##### Table of Contents









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 June 30, 2006                                                
|  
|OR
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-51562


AMERICAN COMMERCIAL LINES INC.


(Exact name of registrant as specified in its charter)





|                                                                                            |  |                                         
|------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                    |  | 75-3177794                              
|(State or Other Jurisdiction of
    Incorporation or Organization)                          |  | (I.R.S. Employer
    Identification No.)
|                                                                                           
|1701 East Market Street
    Jeffersonville, Indiana(Address of Principal Executive Offices) |  | 47130(Zip Code)                         

(812) 288-0100


(Registrants telephone number, including area code)


Not applicable


(Former name, former address and former fiscal year, if
changed since last report)


o þ


12b-2


o o þ


12b-2 o þ


þ o












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##### 










AMERICAN COMMERCIAL LINES INC.


QUARTERLY REPORT ON
FORM 10-Q


FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006


TABLE OF CONTENTS


|                             |  |                                                                                           |    |                                                             |    |  |   | 
|---------------------------- |  | ----------------------------------------------------------------------------------------- | -- | ----------------------------------------------------------- | -- |  | - | 
|                             |  |                                                                                           |    | Page                                                        |   
|                             |  |                                                                                           |    |                                                             |   
|PART I FINANCIAL INFORMATION
|Item 1:                      |  | Financial Statements (unaudited)                                                          |    |                                                             | 3  | 
|                             |  |                                                                                           |    | Condensed Consolidated Statements of
    Operations         |    |  | 3 | 
|                             |  |                                                                                           |    | Condensed Consolidated Statements of
    Financial Position |    |  | 4 | 
|                             |  |                                                                                           |    | Condensed Consolidated Statements of Cash
    Flows         |    |  | 5 | 
|                             |  |                                                                                           |    | Notes to Condensed Consolidated Financial
    Statements    |    |  | 6 | 
|Item 2:                      |  | Managements Discussion and
    Analysis of Financial Condition and Results of Operations |    |                                                             | 24 | 
|Item 3:                      |  | Quantitative and Qualitative Disclosures
    About Market Risk                            |    |                                                             | 45 | 
|Item 4:                      |  | Controls and Procedures                                                                   |    |                                                             | 45 | 
|                            
|PART II OTHER INFORMATION   
|Item 1:                      |  | Legal Proceedings                                                                         |    |                                                             | 45 | 
|Item 1A:                     |  | Risk Factors                                                                              |    |                                                             | 48 | 
|Item 2:                      |  | Unregistered Sales of Securities and Use
    of Proceeds                                  |    |                                                             | 55 | 
|Item 3:                      |  | Defaults on Senior Securities                                                             |    |                                                             | 55 | 
|Item 4:                      |  | Submission of Matters to a Vote of
    Security Holders                                   |    |                                                             | 55 | 
|Item 6:                      |  | Exhibits                                                                                  |    |                                                             | 56 | 
|Signatures                   |  |                                                                                           | 57 |                                                            
|Certtification              
|Certification               
|Certification               
|Certification               



2



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##### Table of Contents






PART I  FINANCIAL INFORMATION







|        |                                 
|------- | --------------------------------
|ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED)

AMERICAN COMMERCIAL LINES INC.





CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                             |                                   |                                                     |            |        |                           |   |         |        |         |   |            |         |         |   |         |         |         | 
|------------------------------------------------------------ | --------------------------------- | --------------------------------------------------- | ---------- | ------ | ------------------------- | - | ------- | ------ | ------- | - | ---------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                                             |                                   | Quarter Ended June 30,                              |            |        | Six Months Ended June 30, |  
|                                                             |                                   |                                                     |            |        |                           |  
|                                                             |                                   | 2006                                                |            |        | 2005                      |   |         | 2006   |         |   | 2005       |        
|                                                             |                                   |                                                     |            |        |                           |   |         |        |         |   |            |        
|                                                             |                                   | (Unaudited)                                         |            |        | (Unaudited)               |  
|                                                             |                                   | (In thousands, except shares and per share amounts) |           
|REVENUE                                                      |                                   | $                                                   | 218,447    |        |                           | $ | 182,385 |        |         | $ | 416,630    |         |         | $ | 327,793 |        
|OPERATING EXPENSE                                            |                                   |                                                     |            |        |                           |   |         |        |         |   |            |         |         |   |         |        
|                                                             | Materials, Supplies and Other     |                                                     |            | 73,609 |                           |   |         | 73,943 |         |   |            | 139,872 |         |   |         | 126,574 |        
|                                                             | Rent                              |                                                     |            | 5,738  |                           |   |         | 5,358  |         |   |            | 11,324  |         |   |         | 10,475  |        
|                                                             | Labor and Fringe Benefits         |                                                     |            | 35,753 |                           |   |         | 31,786 |         |   |            | 70,364  |         |   |         | 63,985  |        
|                                                             | Fuel                              |                                                     |            | 38,655 |                           |   |         | 29,632 |         |   |            | 76,319  |         |   |         | 56,177  |        
|                                                             | Depreciation and Amortization     |                                                     |            | 12,358 |                           |   |         | 12,205 |         |   |            | 24,375  |         |   |         | 24,464  |        
|                                                             | Fuel User Tax                     |                                                     |            | 4,219  |                           |   |         | 4,508  |         |   |            | 8,756   |         |   |         | 8,925   |        
|                                                             | Selling, General & Administrative |                                                     |            | 16,055 |                           |   |         | 13,417 |         |   |            | 32,290  |         |   |         | 25,786  |        
|                                                             |                                   |                                                     |            |        |                           |   |         |        |         |   |            |        
|                                                             |                                   | Total Operating Expenses                            |            |        | 186,387                   |   |         |        | 170,849 |   |            |         | 363,300 |   |         |         | 316,386 | 
|                                                             |                                   |                                                     |            |        |                           |   |         |        |         |   |            |        
|OPERATING INCOME                                             |                                   |                                                     | 32,060     |        |                           |   | 11,536  |        |         |   | 53,330     |         |         |   | 11,407  |        
|OTHER EXPENSE (INCOME)                                       |                                   |                                                     |            |        |                           |   |         |        |         |   |            |         |         |   |         |        
|                                                             | Interest Expense                  |                                                     |            | 4,982  |                           |   |         | 7,392  |         |   |            | 9,758   |         |   |         | 17,754  |        
|                                                             | Other, Net                        |                                                     |            | (949   | )                         |   |         | (4,471 | )       |   |            | (2,574  | )       |   |         | (5,889  | )      
|                                                             |                                   |                                                     |            |        |                           |   |         |        |         |   |            |        
|                                                             |                                   | Total Other Expenses                                |            |        | 4,033                     |   |         |        | 2,921   |   |            |         | 7,184   |   |         |         | 11,865  | 
|                                                             |                                   |                                                     |            |        |                           |   |         |        |         |   |            |        
|INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |                                   |                                                     | 28,027     |        |                           |   | 8,615   |        |         |   | 46,146     |         |         |   | (458    | )      
|INCOME TAXES                                                 |                                   |                                                     | 10,284     |        |                           |   | 2,700   |        |         |   | 17,169     |         |         |   | 228     |        
|                                                             |                                   |                                                     |            |        |                           |   |         |        |         |   |            |        
|INCOME (LOSS) FROM CONTINUING OPERATIONS                     |                                   |                                                     | 17,743     |        |                           |   | 5,915   |        |         |   | 28,977     |         |         |   | (686    | )      
|DISCONTINUED OPERATIONS, Net of Tax (See Note 9)             |                                   |                                                     | (39        | )      |                           |   | 118     |        |         |   | (125       | )       |         |   | 391     |        
|                                                             |                                   |                                                     |            |        |                           |   |         |        |         |   |            |        
|NET INCOME (LOSS)                                            |                                   | $                                                   | 17,704     |        |                           | $ | 6,033   |        |         | $ | 28,852     |         |         | $ | (295    | )      
|                                                             |                                   |                                                     |            |        |                           |   |         |        |         |   |            |        
|WEIGHTED AVERAGE SHARES OUTSTANDING:                         |                                   |                                                     |            |        |                           |   |         |        |         |   |            |         |         |   |         |        
|BASIC                                                        |                                   |                                                     | 30,355,760 |        |                           |   | NA      |        |         |   | 30,295,327 |         |         |   | NA      |        
|DILUTED                                                      |                                   |                                                     | 31,393,331 |        |                           |   | NA      |        |         |   | 31,322,445 |         |         |   | NA      |        
|EARNINGS PER SHARE:                                          |                                   |                                                     |            |        |                           |   |         |        |         |   |            |         |         |   |         |        
|BASIC                                                        |                                   | $                                                   | 0.58       |        |                           |   | NA      |        |         | $ | 0.95       |         |         |   | NA      |        
|DILUTED                                                      |                                   | $                                                   | 0.56       |        |                           |   | NA      |        |         | $ | 0.92       |         |         |   | NA      |        



3



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.





CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


|                                                                                                                                    |                                       |                              |                                            |         |              |         |         |        |         |         | 
|----------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ---------------------------- | ------------------------------------------ | ------- | ------------ | ------- | ------- | ------ | ------- | ------- | 
|                                                                                                                                    |                                       | June 30,                     |                                            |         | December 31, |        
|                                                                                                                                    |                                       | 2006                         |                                            |         | 2005         |        
|                                                                                                                                    |                                       |                              |                                            |         |              |        
|                                                                                                                                    |                                       | (Unaudited)                  |                                            |         |             
|                                                                                                                                    |                                       | (In thousands, except shares |                                           
|                                                                                                                                    |                                       | and per share amounts)       |                                           
|ASSETS                                                                                                                             
|CURRENT ASSETS                                                                                                                      |                                       |                              |                                            |         |              |         |         |       
|                                                                                                                                    | Cash and Cash Equivalents             |                              | $                                          | 11,808  |              |         | $       | 13,959 |        
|                                                                                                                                    | Accounts Receivable, Net              |                              |                                            | 106,700 |              |         |         | 96,526 |        
|                                                                                                                                    | Inventory                             |                              |                                            | 65,891  |              |         |         | 44,976 |        
|                                                                                                                                    | Deferred Tax Asset                    |                              |                                            | 2,918   |              |         |         | 4,644  |        
|                                                                                                                                    | Other Current Assets                  |                              |                                            | 28,057  |              |         |         | 16,787 |        
|                                                                                                                                    |                                       |                              |                                            |         |              |        
|                                                                                                                                    |                                       | Total Current Assets         |                                            |         | 215,374      |         |         |        | 176,892 |        
|PROPERTIES  NET                                                                                                                    |                                       |                              | 446,702                                    |         |              |         | 425,741 |       
|INVESTMENT IN EQUITY INVESTEES                                                                                                      |                                       |                              | 5,279                                      |         |              |         | 5,532   |       
|OTHER ASSETS                                                                                                                        |                                       |                              | 14,479                                     |         |              |         | 15,119  |       
|                                                                                                                                    |                                       |                              |                                            |         |              |        
|                                                                                                                                    |                                       | Total Assets                 |                                            | $       | 681,834      |         |         | $      | 623,284 |        
|                                                                                                                                    |                                       |                              |                                            |         |              |        
|                                                                                                                                   
|LIABILITIES                                                                                                                        
|CURRENT LIABILITIES                                                                                                                 |                                       |                              |                                            |         |              |         |         |       
|                                                                                                                                    | Accounts Payable                      |                              | $                                          | 32,168  |              |         | $       | 47,517 |        
|                                                                                                                                    | Accrued Payroll and Fringe Benefits   |                              |                                            | 20,705  |              |         |         | 22,303 |        
|                                                                                                                                    | Deferred Revenue                      |                              |                                            | 22,331  |              |         |         | 16,631 |        
|                                                                                                                                    | Accrued Claims and Insurance Premiums |                              |                                            | 11,916  |              |         |         | 13,361 |        
|                                                                                                                                    | Accrued Interest                      |                              |                                            | 5,204   |              |         |         | 5,179  |        
|                                                                                                                                    | Customer Deposits                     |                              |                                            | 11,562  |              |         |         | 1,147  |        
|                                                                                                                                    | Other Liabilities                     |                              |                                            | 32,637  |              |         |         | 24,550 |        
|                                                                                                                                    |                                       |                              |                                            |         |              |        
|                                                                                                                                    |                                       | Total Current Liabilities    |                                            |         | 136,523      |         |         |        | 130,688 |        
|LONG TERM DEBT                                                                                                                      |                                       |                              | 214,800                                    |         |              |         | 200,000 |       
|PENSION LIABILITY                                                                                                                   |                                       |                              | 19,250                                     |         |              |         | 17,867  |       
|DEFERRED TAX LIABILITY                                                                                                              |                                       |                              | 9,813                                      |         |              |         | 4,644   |       
|OTHER LONG TERM LIABILITIES                                                                                                         |                                       |                              | 15,429                                     |         |              |         | 16,384  |       
|                                                                                                                                    |                                       |                              |                                            |         |              |        
|                                                                                                                                    |                                       | Total Liabilities            |                                            |         | 395,815      |         |         |        | 369,583 |        
|                                                                                                                                    |                                       |                              |                                            |         |              |        
|                                                                                                                                   
|STOCKHOLDERS EQUITY                                                                                                               
|Common stock; authorized 125,000,000 shares at
    $.01 par value; 30,835,770 shares issued and
    outstanding as of June 30, 2006 |                                       |                              | 308                                        |         |              |         | 307     |       
|Treasury Stock 83,145 shares at June 30, 2006                                                                                       |                                       |                              | (3,018                                     | )       |              |         |        |       
|Other Capital                                                                                                                       |                                       |                              | 253,918                                    |         |              |         | 247,435 |       
|Retained Earnings                                                                                                                   |                                       |                              | 40,665                                     |         |              |         | 11,813  |       
|Accumulated Other Comprehensive Loss                                                                                                |                                       |                              | (5,854                                     | )       |              |         | (5,854  | )     
|                                                                                                                                    |                                       |                              |                                            |         |              |        
|                                                                                                                                    |                                       |                              | Total Stockholders Equity                 |         |              | 286,019 |         |        |         | 253,701 | 
|                                                                                                                                    |                                       |                              |                                            |         |              |        
|                                                                                                                                    |                                       |                              | Total Liabilities and Stockholders Equity |         | $            | 681,834 |         |        | $       | 623,284 | 
|                                                                                                                                    |                                       |                              |                                            |         |              |        



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AMERICAN COMMERCIAL LINES INC.





CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |         |         |          |         |         |  
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------------------------- | ------- | ------ | ------- | ------- | -------- | ------- | ------- | -
|                                                 |                                                                                                                     | Six Months Ended                             |                                                                                
|                                                 |                                                                                                                     | June 30,                                     |                                                                                
|                                                 |                                                                                                                     |                                              |                                                                                
|                                                 |                                                                                                                     | 2006                                         |                                                                                 |         | 2005   |        
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|                                                 |                                                                                                                     | (Unaudited)                                  |                                                                                
|                                                 |                                                                                                                     | (In thousands)                               |                                                                                
|OPERATING ACTIVITIES                             |                                                                                                                     |                                              |                                                                                 |         |        |         |         |         
|                                                 | Income (Loss) from Continuing Operations                                                                            |                                              | $                                                                               | 28,977  |        |         | $       | (686     | )      
|                                                 | Adjustments to Reconcile Income (Loss) from Continuing
    Operations to Net Cash Provided by Operating Activities: |                                              |                                                                                 |         |        |         |         |          |        
|                                                 |                                                                                                                     | Depreciation and Amortization                |                                                                                 |         | 24,375 |         |         |          | 24,464  |        
|                                                 |                                                                                                                     | Debt Issuance Cost Amortization              |                                                                                 |         | 562    |         |         |          | 2,335   |        
|                                                 |                                                                                                                     | Loss (Gain) on Property Dispositions         |                                                                                 |         | 46     |         |         |          | (4,432  | )      
|                                                 |                                                                                                                     | Other                                        |                                                                                 |         | 9,883  |         |         |          | (1,922  | )      
|                                                 |                                                                                                                     | Changes in Operating Assets and Liabilities: |                                                                                 |         |        |         |         |          |         |        
|                                                 |                                                                                                                     |                                              | Accounts Receivable                                                             |         |        | (10,175 | )       |          |         | (8,902  | )
|                                                 |                                                                                                                     |                                              | Inventory                                                                       |         |        | (20,355 | )       |          |         | (14,119 | )
|                                                 |                                                                                                                     |                                              | Accrued Interest                                                                |         |        | 25      |         |          |         | 7,157   |  
|                                                 |                                                                                                                     |                                              | Other Current Assets                                                            |         |        | (8,614  | )       |          |         | (247    | )
|                                                 |                                                                                                                     |                                              | Other Current Liabilities                                                       |         |        | 16,602  |         |          |         | 21,331  |  
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|                                                 |                                                                                                                     |                                              | Net Cash Provided by Operating Activities before Reorganization
    Items       |         |        | 41,326  |         |          |         | 24,979  |  
|                                                 |                                                                                                                     | Reorganization Items Paid                    |                                                                                 |         | (325   | )       |         |          | (12,503 | )      
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|                                                 |                                                                                                                     |                                              | Net Cash Provided by Continuing Operating Activities                            |         |        | 41,001  |         |          |         | 12,476  |  
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|                                                 |                                                                                                                     |                                              | Net Cash Provided by (Used in) Operating Activities of
    Discontinued Segment |         |        | (17     | )       |          |         | 429     |  
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|                                                 |                                                                                                                     |                                              | Net Cash Provided by Operating Activities                                       |         |        | 40,984  |         |          |         | 12,905  |  
|INVESTING ACTIVITIES                             |                                                                                                                     |                                              |                                                                                 |         |        |         |         |         
|                                                 | Property Additions                                                                                                  |                                              |                                                                                 | (46,317 | )      |         |         | (11,485  | )      
|                                                 | Proceeds from Property Dispositions                                                                                 |                                              |                                                                                 | 170     |        |         |         | 13,366   |        
|                                                 | Net Change in Restricted Cash                                                                                       |                                              |                                                                                 |        |        |         |         | (270     | )      
|                                                 | Investment in Vessel Leasing LLC                                                                                    |                                              |                                                                                 |        |        |         |         | (2,500   | )      
|                                                 | Other                                                                                                               |                                              |                                                                                 | (1,184  | )      |         |         | (2,036   | )      
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|                                                 |                                                                                                                     |                                              | Net Cash Used in Investing Activities                                           |         |        | (47,331 | )       |          |         | (2,925  | )
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|FINANCING ACTIVITIES                             |                                                                                                                     |                                              |                                                                                 |         |        |         |         |         
|                                                 | Long Term Debt Repayments                                                                                           |                                              |                                                                                 |        |        |         |         | (402,489 | )      
|                                                 | Revolving Credit Facility Borrowings                                                                                |                                              |                                                                                 | 15,300  |        |         |         | 170,710  |        
|                                                 | 2015 Senior Note Borrowings (Repayments)                                                                            |                                              |                                                                                 | (500    | )      |         |         | 200,000  |        
|                                                 | Outstanding Checks                                                                                                  |                                              |                                                                                 | (10,873 | )      |         |         | (4,577   | )      
|                                                 | Debt Costs                                                                                                          |                                              |                                                                                 | (13     | )      |         |         | (12,937  | )      
|                                                 | Tax Benefit of Share-Based Compensation                                                                             |                                              |                                                                                 | 3,305   |        |         |         |         |        
|                                                 | Acquisition of Treasury Stock                                                                                       |                                              |                                                                                 | (3,018  | )      |         |         |         |        
|                                                 | Other                                                                                                               |                                              |                                                                                 | (5      | )      |         |         | (618     | )      
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|                                                 |                                                                                                                     |                                              | Net Cash Provided by (Used in) Financing Activities                             |         |        | 4,196   |         |          |         | (49,911 | )
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|Net Decrease in Cash and Cash Equivalents        |                                                                                                                     |                                              | (2,151                                                                          | )       |        |         | (39,931 | )       
|Cash and Cash Equivalents at Beginning of Period |                                                                                                                     |                                              | 13,959                                                                          |         |        |         | 46,645  |         
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        
|                                                 |                                                                                                                     |                                              | Cash and Cash Equivalents at End of Period                                      |         | $      | 11,808  |         |          | $       | 6,714   |  
|                                                 |                                                                                                                     |                                              |                                                                                 |         |        |        



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AMERICAN COMMERCIAL LINES INC.





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


(Dollars in thousands, except as otherwise indicated)




|        |                 
|------- | ----------------
|Note 1. | Reporting entity







10-Q S-X.




10-K




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AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|        |                   
|------- | ------------------
|Note 2. | Earnings per Share



|                                                                                                          |  |          |            |  |            |   |            | 
|--------------------------------------------------------------------------------------------------------- |  | -------- | ---------- |  | ---------- | - | ---------- | 
|                                                                                                          |  | Quarter  |            |  | Six Months |  
|                                                                                                          |  | Ended    |            |  | Ended      |  
|                                                                                                          |  |          |            |  |            |  
|                                                                                                          |  | June 30, |            |  | June 30,   |  
|                                                                                                          |  | 2006     |            |  | 2006       |  
|                                                                                                          |  |          |            |  |            |  
|Net Income                                                                                                |  | $        | 17,704     |  |            | $ | 28,852     | 
|Weighted average common shares outstanding (used to calculate
    basic earnings per share)               |  |          | 30,355,760 |  |            |   | 30,295,327 | 
|Pro forma shares if all dilutive potential common shares
    outstanding during the period were exercised |  |          | 1,037,571  |  |            |   | 1,027,118  | 
|Shares used to calculate diluted EPS                                                                      |  |          | 31,393,331 |  |            |   | 31,322,445 | 
|Basic earnings per share                                                                                  |  | $        | 0.58       |  |            |   | 0.95       | 
|Diluted earnings per share                                                                                |  | $        | 0.56       |  |            |   | 0.92       | 





|        |                                         
|------- | ----------------------------------------
|Note 3. | Acquisition and Merger of Vessel Leasing





|        |     
|------- | ----
|Note 4. | Debt

|                     |  |          |         |  |              |   |         | 
|-------------------- |  | -------- | ------- |  | ------------ | - | ------- | 
|                     |  | June 30, |         |  | December 31, |  
|                     |  | 2006     |         |  | 2005         |  
|                     |  |          |         |  |              |  
|Asset based revolver |  | $        | 85,300  |  |              | $ | 70,000  | 
|2015 Senior Notes    |  |          | 129,500 |  |              |   | 130,000 | 
|                     |  |          |         |  |              |  
|Long term debt       |  | $        | 214,800 |  |              | $ | 200,000 | 
|                     |  |          |         |  |              |  

7



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AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












|        |          
|------- | ---------
|Note 5. | Inventory



|                   |  |          |        |  |              |   |        | 
|------------------ |  | -------- | ------ |  | ------------ | - | ------ | 
|                   |  | June 30, |        |  | December 31, |  
|                   |  | 2006     |        |  | 2005         |  
|                   |  |          |        |  |              |  
|Raw Materials      |  | $        | 12,654 |  |              | $ | 9,754  | 
|Work in Process    |  |          | 29,298 |  |              |   | 13,913 | 
|Parts and Supplies |  |          | 23,939 |  |              |   | 21,309 | 
|                   |  |          |        |  |              |  
|                   |  | $        | 65,891 |  |              | $ | 44,976 | 
|                   |  |          |        |  |              |  



|        |      
|------- | -----
|Note 6. | Taxes







8



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|        |                       
|------- | ----------------------
|Note 7. | Employee Benefit Plans



|                                  |  |                |        |   |                  |   |        |          |  |   |          |   |  |   |        |  
|--------------------------------- |  | -------------- | ------ | - | ---------------- | - | ------ | -------- |  | - | -------- | - |  | - | ------ | -
|                                  |  | Quarters Ended |        |   | Six Months Ended |  
|                                  |  |                |        |   |                  |  
|                                  |  | June 30,       |        |   | June 30,         |   |        | June 30, |  |   | June 30, |  
|                                  |  | 2006           |        |   | 2005             |   |        | 2006     |  |   | 2005     |  
|                                  |  |                |        |   |                  |   |        |          |  |   |          |  
|                                  |  | Pension        |        |   | Pension          |  
|Service cost                      |  | $              | 1,251  |   |                  | $ | 1,170  |          |  | $ | 2,502    |   |  | $ | 2,340  |  
|Interest cost                     |  |                | 2,143  |   |                  |   | 2,024  |          |  |   | 4,286    |   |  |   | 4,048  |  
|Expected return on plan assets    |  |                | (2,739 | ) |                  |   | (2,518 | )        |  |   | (5,478   | ) |  |   | (5,036 | )
|Amortization of unrecognized loss |  |                | 40     |   |                  |   |       |          |  |   | 80       |   |  |   |       |  
|                                  |  |                |        |   |                  |   |        |          |  |   |          |  
|Net periodic benefit cost         |  | $              | 695    |   |                  | $ | 676    |          |  | $ | 1,390    |   |  | $ | 1,352  |  
|                                  |  |                |        |   |                  |   |        |          |  |   |          |  

|                          |  |                 |     |                 |                  |   |     |          |  |   |          |  |  |   |     | 
|------------------------- |  | --------------- | --- | --------------- | ---------------- | - | --- | -------- |  | - | -------- |  |  | - | --- | 
|                          |  | Quarters Ended  |     |                 | Six Months Ended |  
|                          |  |                 |     |                 |                  |  
|                          |  | June 30,        |     |                 | June 30,         |   |     | June 30, |  |   | June 30, | 
|                          |  | 2006            |     |                 | 2005             |   |     | 2006     |  |   | 2005     | 
|                          |  |                 |     |                 |                  |   |     |          |  |   |          | 
|                          |  | Post-Retirement |     |                 |                 
|                          |  |                 |     | Post-Retirement |                 
|Service cost              |  | $               | 80  |                 |                  | $ | 87  |          |  | $ | 160      |  |  | $ | 174 | 
|Interest cost             |  |                 | 161 |                 |                  |   | 162 |          |  |   | 322      |  |  |   | 324 | 
|                          |  |                 |     |                 |                  |   |     |          |  |   |          | 
|Net periodic benefit cost |  | $               | 241 |                 |                  | $ | 249 |          |  | $ | 482      |  |  | $ | 498 | 
|                          |  |                 |     |                 |                  |   |     |          |  |   |          | 



|        |                  
|------- | -----------------
|Note 8. | Business Segments



10-K




9



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


OPERATING RESULTS BY BUSINESS SEGMENT


|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |         |   |   |   |         |        |         | 
|------------------------------- | --------------------------------- | ------------------------ | ------- | ------ | ------------- | - | ------ | ------------ | ------ | - | ----------- | --- | ----- | ----- | ------- | - | - | - | ------- | ------ | ------- | 
|                                |                                   | Reportable Segments      |         |        |               |   |        |              |       
|                                |                                   |                          |         |        | All Other     |   |        | Intersegment |        |   |            
|                                |                                   | Transportation           |         |        | Manufacturing |   |        | Segments(1)  |        |   | Elimination |     |       | Total |        
|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |        
|                                |                                   | (Unaudited)              |        
|                                |                                   | Dollars in thousands)    |        
|Quarter ended June 30, 2006     |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |         |   |   |   |         |       
|Total Revenue                   |                                   | $                        | 188,473 |        |               | $ | 48,142 |              |        | $ | 2,207       |     |       | $     | (20,375 | ) |   | $ | 218,447 |       
|Intersegment Revenue            |                                   |                          | 197     |        |               |   | 20,141 |              |        |   | 37          |     |       |       | (20,375 | ) |   |   |        |       
|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |        
|Revenue from external customers |                                   |                          | 188,276 |        |               |   | 28,001 |              |        |   | 2,170       |     |       |       |        |   |   |   | 218,447 |       
|Operating Expense               |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |         |   |   |   |         |       
|                                | Materials, Supplies and Other     |                          |         | 61,440 |               |   |        | 11,521       |        |   |             | 648 |       |       |         |  |   |   |         | 73,609 |        
|                                | Rent                              |                          |         | 5,515  |               |   |        | 175          |        |   |             | 48  |       |       |         |  |   |   |         | 5,738  |        
|                                | Labor and Fringe Benefits         |                          |         | 22,331 |               |   |        | 12,911       |        |   |             | 511 |       |       |         |  |   |   |         | 35,753 |        
|                                | Fuel                              |                          |         | 38,647 |               |   |        |             |        |   |             | 8   |       |       |         |  |   |   |         | 38,655 |        
|                                | Depreciation and Amortization     |                          |         | 11,538 |               |   |        | 460          |        |   |             | 360 |       |       |         |  |   |   |         | 12,358 |        
|                                | Fuel User Tax                     |                          |         | 4,120  |               |   |        | 46           |        |   |             | 53  |       |       |         |  |   |   |         | 4,219  |        
|                                | Selling, General & Administrative |                          |         | 14,372 |               |   |        | 1,451        |        |   |             | 232 |       |       |         |  |   |   |         | 16,055 |        
|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |        
|                                |                                   | Total Operating Expenses |         |        | 157,963       |   |        |              | 26,564 |   |             |     | 1,860 |       |         |   |  |   |         |        | 186,387 | 
|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |        
|Operating Income                |                                   | $                        | 30,313  |        |               | $ | 1,437  |              |        | $ | 310         |     |       | $     |        |   |   | $ | 32,060  |       
|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |        
|Quarter ended June 30, 2005     |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |         |   |   |   |         |       
|Total Revenue                   |                                   | $                        | 147,762 |        |               | $ | 34,612 |              |        | $ | 2,930       |     |       | $     | (2,919  | ) |   | $ | 182,385 |       
|Intersegment Revenue            |                                   |                          | 243     |        |               |   | 2,663  |              |        |   | 13          |     |       |       | (2,919  | ) |   |   |        |       
|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |        
|Revenue from external customers |                                   |                          | 147,519 |        |               |   | 31,949 |              |        |   | 2,917       |     |       |       |        |   |   |   | 182,385 |       
|Operating Expense               |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |         |   |   |   |         |       
|                                | Materials, Supplies and Other     |                          |         | 54,511 |               |   |        | 18,654       |        |   |             | 778 |       |       |         |  |   |   |         | 73,943 |        
|                                | Rent                              |                          |         | 5,136  |               |   |        | 113          |        |   |             | 109 |       |       |         |  |   |   |         | 5,358  |        
|                                | Labor and Fringe Benefits         |                          |         | 21,351 |               |   |        | 9,959        |        |   |             | 476 |       |       |         |  |   |   |         | 31,786 |        
|                                | Fuel                              |                          |         | 29,625 |               |   |        |             |        |   |             | 7   |       |       |         |  |   |   |         | 29,632 |        
|                                | Depreciation and Amortization     |                          |         | 11,420 |               |   |        | 443          |        |   |             | 342 |       |       |         |  |   |   |         | 12,205 |        
|                                | Fuel User Tax                     |                          |         | 4,373  |               |   |        | 77           |        |   |             | 58  |       |       |         |  |   |   |         | 4,508  |        
|                                | Selling, General & Administrative |                          |         | 12,534 |               |   |        | 679          |        |   |             | 204 |       |       |         |  |   |   |         | 13,417 |        
|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |        
|                                |                                   | Total Operating Expenses |         |        | 138,950       |   |        |              | 29,925 |   |             |     | 1,974 |       |         |   |  |   |         |        | 170,849 | 
|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |        
|Operating Income (Loss)         |                                   | $                        | 8,569   |        |               | $ | 2,024  |              |        | $ | 943         |     |       | $     |        |   |   | $ | 11,536  |       
|                                |                                   |                          |         |        |               |   |        |              |        |   |             |     |       |       |        






|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Financial data for segments below the reporting thresholds is
    attributable to a segment operating terminals along the
    U.S. inland waterways and in Venezuela.

10



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


OPERATING RESULTS BY BUSINESS SEGMENT


|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |         |   |   |   |         |         |         | 
|------------------------------- | --------------------------------- | ------------------------ | ------- | ------- | ------------- | - | ------ | ------------ | ------ | - | ----------- | ----- | ----- | ----- | ------- | - | - | - | ------- | ------- | ------- | 
|                                |                                   | Reportable Segments      |         |         |               |   |        |              |       
|                                |                                   |                          |         |         | All Other     |   |        | Intersegment |        |   |            
|                                |                                   | Transportation           |         |         | Manufacturing |   |        | Segments(1)  |        |   | Elimination |       |       | Total |        
|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |        
|Six Months ended June 30, 2006  |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |         |   |   |   |         |        
|Total Revenue                   |                                   | $                        | 358,886 |         |               | $ | 98,661 |              |        | $ | 4,400       |       |       | $     | (45,317 | ) |   | $ | 416,630 |        
|Intersegment Revenue            |                                   |                          | 348     |         |               |   | 44,932 |              |        |   | 37          |       |       |       | (45,317 | ) |   |   |        |        
|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |        
|Revenue from external customers |                                   |                          | 358,538 |         |               |   | 53,729 |              |        |   | 4,363       |       |       |       |        |   |   |   | 416,630 |        
|Operating Expense               |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |         |   |   |   |         |        
|                                | Materials, Supplies and Other     |                          |         | 118,010 |               |   |        | 20,435       |        |   |             | 1,427 |       |       |         |  |   |   |         | 139,872 |        
|                                | Rent                              |                          |         | 10,924  |               |   |        | 288          |        |   |             | 112   |       |       |         |  |   |   |         | 11,324  |        
|                                | Labor and Fringe Benefits         |                          |         | 43,862  |               |   |        | 25,427       |        |   |             | 1,075 |       |       |         |  |   |   |         | 70,364  |        
|                                | Fuel                              |                          |         | 76,310  |               |   |        |             |        |   |             | 9     |       |       |         |  |   |   |         | 76,319  |        
|                                | Depreciation and Amortization     |                          |         | 22,761  |               |   |        | 899          |        |   |             | 715   |       |       |         |  |   |   |         | 24,375  |        
|                                | Fuel User Tax                     |                          |         | 8,545   |               |   |        | 104          |        |   |             | 107   |       |       |         |  |   |   |         | 8,756   |        
|                                | Selling, General & Administrative |                          |         | 29,080  |               |   |        | 2,768        |        |   |             | 442   |       |       |         |  |   |   |         | 32,290  |        
|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |        
|                                |                                   | Total Operating Expenses |         |         | 309,492       |   |        |              | 49,921 |   |             |       | 3,887 |       |         |   |  |   |         |         | 363,300 | 
|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |        
|Operating Income (Loss)         |                                   | $                        | 49,046  |         |               | $ | 3,808  |              |        | $ | 476         |       |       | $     |        |   |   | $ | 53,330  |        
|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |        
|Six Months ended June 30, 2005  |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |         |   |   |   |         |        
|Total Revenue                   |                                   | $                        | 277,116 |         |               | $ | 50,901 |              |        | $ | 4,985       |       |       | $     | (5,209  | ) |   | $ | 327,793 |        
|Intersegment Revenue            |                                   |                          | 369     |         |               |   | 4,827  |              |        |   | 13          |       |       |       | (5,209  | ) |   |   |        |        
|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |        
|Revenue from external customers |                                   |                          | 276,747 |         |               |   | 46,074 |              |        |   | 4,972       |       |       |       |        |   |   |   | 327,793 |        
|Operating Expense               |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |         |   |   |   |         |        
|                                | Materials, Supplies and Other     |                          |         | 102,822 |               |   |        | 22,361       |        |   |             | 1,391 |       |       |         |  |   |   |         | 126,574 |        
|                                | Rent                              |                          |         | 10,131  |               |   |        | 173          |        |   |             | 171   |       |       |         |  |   |   |         | 10,475  |        
|                                | Labor and Fringe Benefits         |                          |         | 43,449  |               |   |        | 19,522       |        |   |             | 1,014 |       |       |         |  |   |   |         | 63,985  |        
|                                | Fuel                              |                          |         | 56,166  |               |   |        |             |        |   |             | 11    |       |       |         |  |   |   |         | 56,177  |        
|                                | Depreciation and Amortization     |                          |         | 22,898  |               |   |        | 881          |        |   |             | 685   |       |       |         |  |   |   |         | 24,464  |        
|                                | Fuel User Tax                     |                          |         | 8,632   |               |   |        | 175          |        |   |             | 118   |       |       |         |  |   |   |         | 8,925   |        
|                                | Selling, General & Administrative |                          |         | 24,105  |               |   |        | 1,267        |        |   |             | 414   |       |       |         |  |   |   |         | 25,786  |        
|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |        
|                                |                                   | Total Operating Expenses |         |         | 268,203       |   |        |              | 44,379 |   |             |       | 3,804 |       |         |   |  |   |         |         | 316,386 | 
|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |        
|Operating Income (Loss)         |                                   | $                        | 8,544   |         |               | $ | 1,695  |              |        | $ | 1,168       |       |       | $     |        |   |   | $ | 11,407  |        
|                                |                                   |                          |         |         |               |   |        |              |        |   |             |       |       |       |        






|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Financial data for segments below the reporting thresholds is
    attributable to a segment operating terminals along the
    U.S. inland waterways and in Venezuela.

11



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 9. Discontinued Operation




|                        |                                                                |                |   |     |                  |  |   |          |  |  |          |      |   |  |   |       | 
|----------------------- | -------------------------------------------------------------- | -------------- | - | --- | ---------------- |  | - | -------- |  |  | -------- | ---- | - |  | - | ----- | 
|                        |                                                                | Quarters Ended |   |     | Six Months Ended | 
|                        |                                                                |                |   |     |                  | 
|                        |                                                                | June 30,       |   |     | June 30,         |  |   | June 30, |  |  | June 30, |     
|                        |                                                                | 2006           |   |     | 2005             |  |   | 2006     |  |  | 2005     |     
|                        |                                                                |                |   |     |                  |  |   |          |  |  |          |     
|DISCONTINUED OPERATIONS |                                                                |                |   |     |                  |  |   |          |  |  |          |      |   |  |   |      
|                        | Revenue                                                        |                | $ | 158 |                  |  | $ | 601      |  |  | $        | 334  |   |  | $ | 1,515 | 
|                        |                                                                |                |   |     |                  |  |   |          |  |  |          |     
|                        | (Loss) income from discontinued operations before income taxes |                | $ | (29 | )                |  | $ | 185      |  |  | $        | (115 | ) |  | $ | 564   | 
|                        | Income tax                                                     |                |   | 10  |                  |  |   | 67       |  |  |          | 10   |   |  |   | 173   | 
|                        |                                                                |                |   |     |                  |  |   |          |  |  |          |     
|                        | (Loss) Income from discontinued operations                     |                | $ | (39 | )                |  | $ | 118      |  |  | $        | (125 | ) |  | $ | 391   | 
|                        |                                                                |                |   |     |                  |  |   |          |  |  |          |     



|         |              
|-------- | -------------
|Note 10. | Contingencies





|         |                         
|-------- | ------------------------
|Note 11. | Share-based Compensation





12



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








Restricted Shares






|                                           |  |        |         | 
|------------------------------------------ |  | ------ | ------- | 
|Restricted Stock                           |  | Shares |        
|                                           |  |        |        
|Not vested at December 31, 2005            |  |        | 596,744 | 
|Vested during quarter ended March 31, 2006 |  |        | 214,272 | 
|Not vested at March 31, 2006               |  |        | 382,472 | 
|Vested during quarter ended June 30, 2006  |  |        | 18,690  | 
|Not vested at June 30, 2006                |  |        | 363,782 | 

Stock Options


13



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                    |  |        |           |          |       |   |       | 
|--------------------------------------------------- |  | ------ | --------- | -------- | ----- | - | ----- | 
|                                                    |  |        |           | Weighted |      
|                                                    |  |        |           | Average  |      
|                                                    |  |        |           | Exercise |      
|Stock Options                                       |  | Shares |           |          | Price |  
|                                                    |  |        |           |          |       |  
|Under option at December 31, 2005                   |  |        | 1,105,192 |          |       | $ | 4.19  | 
|Exercisable at December 31, 2005                    |  |        | 208,000   |          |       | $ | 4.16  | 
|Granted during quarter ended March 31, 2006         |  |        | 181,968   |          |       | $ | 33.17 | 
|Forfeited during quarter ended March 31, 2006       |  |        | 5,018     |          |       | $ | 33.63 | 
|Under option at March 31, 2006                      |  |        | 1,282,142 |          |       | $ | 8.19  | 
|Exercisable at March 31, 2006                       |  |        | 525,701   |          |       | $ | 4.68  | 
|Exercised during quarter ended June 30, 2006        |  |        | 84,054    |          |       | $ | 7.42  | 
|Under option at June 30, 2006                       |  |        | 1,198,088 |          |       | $ | 8.24  | 
|Exercisable at June 30, 2006                        |  |        | 441,648   |          |       | $ | 4.16  | 
|Shares available for future grants at June 30, 2006 |  |        | 912,603   |          |       |   |       | 





Restricted Stock Units




|                                              |  |        |         | 
|--------------------------------------------- |  | ------ | ------- | 
|Restricted Stock Units                        |  | Shares |        
|                                              |  |        |        
|Outstanding at beginning of 2006              |  |        |        | 
|Granted during quarter ended March 31, 2006   |  |        | 208,660 | 
|Forfeited during quarter ended March 31, 2006 |  |        | 2,320   | 
|Not vested at March 31, 2006                  |  |        | 206,340 | 
|Forfeited during quarter ended June 30, 2006  |  |        | 3,095   | 
|                                              |  |        |        
|Not vested at June 30, 2006                   |  |        | 203,245 | 
|                                              |  |        |        

14



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Performance Share Units




|                                              |  |        |        | 
|--------------------------------------------- |  | ------ | ------ | 
|Performance Share Units                       |  | Shares |       
|                                              |  |        |       
|Outstanding at beginning of 2006              |  |        |       | 
|Granted during quarter ended March 31, 2006   |  |        | 41,074 | 
|Forfeited during quarter ended March 31, 2006 |  |        | 1,338  | 
|Not vested at March 31, 2006                  |  |        | 39,736 | 
|Vested during quarter ended June 30, 2006     |  |        | 2,478  | 
|                                              |  |        |       
|Not vested at June 30, 2006                   |  |        | 37,258 | 
|                                              |  |        |       



|         |                                      
|-------- | -------------------------------------
|Note 12. | Debtor Guarantor Financial Statements







15



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Combining Statement of Operations for the Quarter Ended
June 30, 2006


|                                                      |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |       |       |   |         |         |         |   |         |        |         | 
|----------------------------------------------------- | --------------------------------- | ------------------------ | ------- | ------- | ------ | ------ | ------- | --------- | - | - | ---------- | ------- | -- | ---------- | ------- | ------- | ---------- | - | -------- | ------------ | ------- | - | ------ | ----- | ----- | - | ------- | ------- | ------- | - | ------- | ------ | ------- | 
|                                                      |                                   |                          |         |         |        | Parent |         |           |   |   | Subsidiary |         |    | Non-       |         |         |            |   | Combined |             
|                                                      |                                   | ACL Inc.                 |         |         | Parent |        |         | Guarantor |   |   | Issuers    |         |    | Guarantors |         |         | Guarantors |   |          | Eliminations |         |   | Totals |      
|                                                      |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |      
|                                                      |                                   | (In thousands)           |        
|REVENUE                                               |                                   | $                        |        |         |        | $      |        |           |   | $ |           |         |    | $          | 13,613  |         |            | $ | 212,730  |              |         | $ | 5,824  |       |       | $ | (13,720 | )       |         | $ | 218,447 |       
|OPERATING EXPENSE                                     |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |       |       |   |         |         |         |   |         |       
|                                                      | Materials, Supplies and Other     |                          |         |        |        |        |         |          |   |   |            |        |    |            |         |        |            |   |          | 72,067       |         |   |        | 1,624 |       |   |         | (82     | )       |   |         | 73,609 |        
|                                                      | Rent                              |                          |         |        |        |        |         |          |   |   |            |        |    |            |         |        |            |   |          | 19,053       |         |   |        | 323   |       |   |         | (13,638 | )       |   |         | 5,738  |        
|                                                      | Labor and Fringe Benefits         |                          |         |        |        |        |         |          |   |   |            |        |    |            |         |        |            |   |          | 34,606       |         |   |        | 1,147 |       |   |         |        |         |   |         | 35,753 |        
|                                                      | Fuel                              |                          |         |        |        |        |         |          |   |   |            |        |    |            |         |        |            |   |          | 38,511       |         |   |        | 144   |       |   |         |        |         |   |         | 38,655 |        
|                                                      | Depreciation and Amortization     |                          |         |        |        |        |         |          |   |   |            |        |    |            |         | 9,461   |            |   |          | 2,429        |         |   |        | 468   |       |   |         |        |         |   |         | 12,358 |        
|                                                      | Fuel User Tax                     |                          |         |        |        |        |         |          |   |   |            |        |    |            |         |        |            |   |          | 4,219        |         |   |        |      |       |   |         |        |         |   |         | 4,219  |        
|                                                      | Selling, General & Administrative |                          |         |        |        |        |         |          |   |   |            | 68      |    |            |         | 71      |            |   |          | 15,170       |         |   |        | 746   |       |   |         |        |         |   |         | 16,055 |        
|                                                      |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |      
|                                                      |                                   | Total Operating Expenses |         |         |       |        |         |           |  |   |            |         | 68 |            |         |         | 9,532      |   |          |              | 186,055 |   |        |       | 4,452 |   |         |         | (13,720 | ) |         |        | 186,387 | 
|                                                      |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |      
|OPERATING (LOSS) INCOME                               |                                   |                          |        |         |        |        |        |           |   |   | (68        | )       |    |            | 4,081   |         |            |   | 26,675   |              |         |   | 1,372  |       |       |   |        |         |         |   | 32,060  |       
|OTHER EXPENSE (INCOME)                                |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |       |       |   |         |         |         |   |         |       
|                                                      | Interest Expense                  |                          |         |        |        |        |         |          |   |   |            |        |    |            |         | 4,970   |            |   |          | 12           |         |   |        |      |       |   |         |        |         |   |         | 4,982  |        
|                                                      | Other, Net                        |                          |         | (17,704 | )      |        |         | (17,704   | ) |   |            | (27,681 | )  |            |         | (28,570 | )          |   |          | (1,934       | )       |   |        | 224   |       |   |         | 92,420  |         |   |         | (949   | )      
|                                                      |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |      
|                                                      |                                   |                          | (17,704 | )       |        |        | (17,704 | )         |   |   | (27,681    | )       |    |            | (23,600 | )       |            |   | (1,922   | )            |         |   | 224    |       |       |   | 92,420  |         |         |   | 4,033   |       
|                                                      |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |      
|INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |                                   |                          | 17,704  |         |        |        | 17,704  |           |   |   | 27,613     |         |    |            | 27,681  |         |            |   | 28,597   |              |         |   | 1,148  |       |       |   | (92,420 | )       |         |   | 28,027  |       
|INCOME TAXES                                          |                                   |                          |        |         |        |        |        |           |   |   | 9,909      |         |    |            |        |         |            |   | 32       |              |         |   | 343    |       |       |   |        |         |         |   | 10,284  |       
|                                                      |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |      
|INCOME FROM                                           |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |       |       |   |         |         |         |   |         |       
|                                                      | CONTINUING OPERATIONS             |                          |         | 17,704  |        |        |         | 17,704    |   |   |            | 17,704  |    |            |         | 27,681  |            |   |          | 28,565       |         |   |        | 805   |       |   |         | (92,420 | )       |   |         | 17,743 |        
|DISCONTINUED OPERATIONS                               |                                   |                          |        |         |        |        |        |           |   |   |           |         |    |            |        |         |            |   |         |              |         |   | (39    | )     |       |   |        |         |         |   | (39     | )     
|                                                      |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |      
|NET INCOME                                            |                                   | $                        | 17,704  |         |        | $      | 17,704  |           |   | $ | 17,704     |         |    | $          | 27,681  |         |            | $ | 28,565   |              |         | $ | 766    |       |       | $ | (92,420 | )       |         | $ | 17,704  |       
|                                                      |                                   |                          |         |         |        |        |         |           |   |   |            |         |    |            |         |         |            |   |          |              |         |   |        |      

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AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Combining Statement of Operations for the Quarter Ended
June 30, 2005


|                                                      |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |       |       |   |         |         |        |   |         |        |         | 
|----------------------------------------------------- | ----------------------------------------- | ------------------------ | ------ | ------ | ------ | ------ | ------ | --------- | - | - | ---------- | ------ | - | ---------- | ------ | ------- | ---------- | - | -------- | ------------ | ------- | - | ------ | ----- | ----- | - | ------- | ------- | ------ | - | ------- | ------ | ------- | 
|                                                      |                                           |                          |        |        |        | Parent |        |           |   |   | Subsidiary |        |   | Non-       |        |         |            |   | Combined |             
|                                                      |                                           | ACL Inc.                 |        |        | Parent |        |        | Guarantor |   |   | Issuers    |        |   | Guarantors |        |         | Guarantors |   |          | Eliminations |         |   | Totals |      
|                                                      |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |      
|                                                      |                                           | (In thousands)           |       
|REVENUE                                               |                                           | $                        |       |        |        | $      |       |           |   | $ |           |        |   | $          | 8,131  |         |            | $ | 177,567  |              |         | $ | 6,186  |       |       | $ | (9,499  | )       |        | $ | 182,385 |       
|OPERATING EXPENSE                                     |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |       |       |   |         |         |        |   |         |       
|                                                      | Materials, Supplies and Other             |                          |        |       |        |        |        |          |   |   |            |       |   |            |        |        |            |   |          | 72,453       |         |   |        | 1,781 |       |   |         | (291    | )      |   |         | 73,943 |        
|                                                      | Rent                                      |                          |        |       |        |        |        |          |   |   |            |       |   |            |        |        |            |   |          | 14,177       |         |   |        | 389   |       |   |         | (9,208  | )      |   |         | 5,358  |        
|                                                      | Labor and Fringe Benefits                 |                          |        |       |        |        |        |          |   |   |            |       |   |            |        |        |            |   |          | 30,866       |         |   |        | 920   |       |   |         |        |        |   |         | 31,786 |        
|                                                      | Fuel                                      |                          |        |       |        |        |        |          |   |   |            |       |   |            |        |        |            |   |          | 29,493       |         |   |        | 139   |       |   |         |        |        |   |         | 29,632 |        
|                                                      | Depreciation and Amortization             |                          |        |       |        |        |        |          |   |   |            |       |   |            |        | 8,913   |            |   |          | 2,405        |         |   |        | 887   |       |   |         |        |        |   |         | 12,205 |        
|                                                      | Fuel User Tax                             |                          |        |       |        |        |        |          |   |   |            |       |   |            |        |        |            |   |          | 4,508        |         |   |        |      |       |   |         |        |        |   |         | 4,508  |        
|                                                      | Selling, General & Administrative         |                          |        |       |        |        |        |          |   |   |            |       |   |            |        | 129     |            |   |          | 12,457       |         |   |        | 831   |       |   |         |        |        |   |         | 13,417 |        
|                                                      |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |      
|                                                      |                                           | Total Operating Expenses |        |        |       |        |        |           |  |   |            |        |  |            |        |         | 9,042      |   |          |              | 166,359 |   |        |       | 4,947 |   |         |         | (9,499 | ) |         |        | 170,849 | 
|                                                      |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |      
|OPERATING (LOSS) INCOME                               |                                           |                          |       |        |        |        |       |           |   |   |           |        |   |            | (911   | )       |            |   | 11,208   |              |         |   | 1,239  |       |       |   |        |         |        |   | 11,536  |       
|OTHER EXPENSE (INCOME)                                |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |       |       |   |         |         |        |   |         |       
|                                                      | Interest Expense                          |                          |        |       |        |        |        |          |   |   |            |       |   |            |        | 6,780   |            |   |          | 140          |         |   |        | 472   |       |   |         |        |        |   |         | 7,392  |        
|                                                      | Interest (Income) Expense from Affiliates |                          |        |       |        |        |        |          |   |   |            |       |   |            |        | (110    | )          |   |          |             |         |   |        | 110   |       |   |         |        |        |   |         |       |        
|                                                      | Other, Net                                |                          |        | (6,033 | )      |        |        | (6,033    | ) |   |            | (8,820 | ) |            |        | (16,401 | )          |   |          | (1,298       | )       |   |        | (84   | )     |   |         | 34,198  |        |   |         | (4,471 | )      
|                                                      |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |      
|                                                      |                                           |                          | (6,033 | )      |        |        | (6,033 | )         |   |   | (8,820     | )      |   |            | (9,731 | )       |            |   | (1,158   | )            |         |   | 498    |       |       |   | 34,198  |         |        |   | 2,921   |       
|                                                      |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |      
|INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |                                           |                          | 6,033  |        |        |        | 6,033  |           |   |   | 8,820      |        |   |            | 8,820  |         |            |   | 12,366   |              |         |   | 741    |       |       |   | (34,198 | )       |        |   | 8,615   |       
|INCOME TAXES (BENEFIT)                                |                                           |                          |       |        |        |        |       |           |   |   | 2,787      |        |   |            |       |         |            |   | 43       |              |         |   | (130   | )     |       |   |        |         |        |   | 2,700   |       
|                                                      |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |      
|INCOME FROM                                           |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |       |       |   |         |         |        |   |         |       
|                                                      | CONTINUING OPERATIONS                     |                          |        | 6,033  |        |        |        | 6,033     |   |   |            | 6,033  |   |            |        | 8,820   |            |   |          | 12,323       |         |   |        | 871   |       |   |         | (34,198 | )      |   |         | 5,915  |        
|DISCONTINUED OPERATIONS                               |                                           |                          |       |        |        |        |       |           |   |   |           |        |   |            |       |         |            |   |         |              |         |   | 118    |       |       |   |        |         |        |   | 118     |       
|                                                      |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |      
|NET INCOME                                            |                                           | $                        | 6,033  |        |        | $      | 6,033  |           |   | $ | 6,033      |        |   | $          | 8,820  |         |            | $ | 12,323   |              |         | $ | 989    |       |       | $ | (34,198 | )       |        | $ | 6,033   |       
|                                                      |                                           |                          |        |        |        |        |        |           |   |   |            |        |   |            |        |         |            |   |          |              |         |   |        |      

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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Combining Statement of Operations for the Six Months Ended
June 30, 2006


|                                                             |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |       |       |   |          |          |         |   |         |         |         | 
|------------------------------------------------------------ | --------------------------------- | ------------------------ | ------- | ------- | ------ | ------ | ------- | --------- | - | - | ---------- | ------- | --- | ---------- | ------- | ------- | ---------- | - | -------- | ------------ | ------- | - | ------ | ----- | ----- | - | -------- | -------- | ------- | - | ------- | ------- | ------- | 
|                                                             |                                   |                          |         |         |        | Parent |         |           |   |   | Subsidiary |         |     | Non-       |         |         |            |   | Combined |             
|                                                             |                                   | ACL Inc.                 |         |         | Parent |        |         | Guarantor |   |   | Issuers    |         |     | Guarantors |         |         | Guarantors |   |          | Eliminations |         |   | Totals |      
|                                                             |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |      
|                                                             |                                   | (In thousands)           |        
|REVENUE                                                      |                                   | $                        |        |         |        | $      |        |           |   | $ |           |         |     | $          | 27,227  |         |            | $ | 410,467  |              |         | $ | 6,532  |       |       | $ | (27,596  | )        |         | $ | 416,630 |        
|OPERATING EXPENSE                                            |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |       |       |   |          |          |         |   |         |        
|                                                             | Materials, Supplies and Other     |                          |         |        |        |        |         |          |   |   |            |        |     |            |         |        |            |   |          | 136,751      |         |   |        | 3,442 |       |   |          | (321     | )       |   |         | 139,872 |        
|                                                             | Rent                              |                          |         |        |        |        |         |          |   |   |            |        |     |            |         |        |            |   |          | 37,974       |         |   |        | 625   |       |   |          | (27,275  | )       |   |         | 11,324  |        
|                                                             | Labor and Fringe Benefits         |                          |         |        |        |        |         |          |   |   |            |        |     |            |         |        |            |   |          | 68,086       |         |   |        | 2,278 |       |   |          |         |         |   |         | 70,364  |        
|                                                             | Fuel                              |                          |         |        |        |        |         |          |   |   |            |        |     |            |         |        |            |   |          | 76,105       |         |   |        | 214   |       |   |          |         |         |   |         | 76,319  |        
|                                                             | Depreciation and Amortization     |                          |         |        |        |        |         |          |   |   |            |        |     |            |         | 18,706  |            |   |          | 4,734        |         |   |        | 935   |       |   |          |         |         |   |         | 24,375  |        
|                                                             | Fuel User Tax                     |                          |         |        |        |        |         |          |   |   |            |        |     |            |         |        |            |   |          | 8,756        |         |   |        |      |       |   |          |         |         |   |         | 8,756   |        
|                                                             | Selling, General & Administrative |                          |         |        |        |        |         |          |   |   |            | 136     |     |            |         | 239     |            |   |          | 31,128       |         |   |        | 787   |       |   |          |         |         |   |         | 32,290  |        
|                                                             |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |      
|                                                             |                                   | Total Operating Expenses |         |         |       |        |         |           |  |   |            |         | 136 |            |         |         | 18,945     |   |          |              | 363,534 |   |        |       | 8,281 |   |          |          | (27,596 | ) |         |         | 363,300 | 
|                                                             |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |      
|OPERATING (LOSS) INCOME                                      |                                   |                          |        |         |        |        |        |           |   |   | (136       | )       |     |            | 8,282   |         |            |   | 46,933   |              |         |   | (1,749 | )     |       |   |         |          |         |   | 53,330  |        
|OTHER EXPENSE (INCOME)                                       |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |       |       |   |          |          |         |   |         |        
|                                                             | Interest Expense                  |                          |         |        |        |        |         |          |   |   |            |        |     |            |         | 9,732   |            |   |          | 26           |         |   |        |      |       |   |          |         |         |   |         | 9,758   |        
|                                                             | Other, Net                        |                          |         | (28,852 | )      |        |         | (28,852   | ) |   |            | (46,939 | )   |            |         | (48,389 | )          |   |          | (1,554       | )       |   |        | (463  | )     |   |          | 152,475  |         |   |         | (2,574  | )      
|                                                             |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |      
|                                                             |                                   |                          | (28,852 | )       |        |        | (28,852 | )         |   |   | (46,939    | )       |     |            | (38,657 | )       |            |   | (1,528   | )            |         |   | (463   | )     |       |   | 152,475  |          |         |   | 7,184   |        
|                                                             |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |      
|INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |                                   |                          | 28,852  |         |        |        | 28,852  |           |   |   | 46,803     |         |     |            | 46,939  |         |            |   | 48,461   |              |         |   | (1,286 | )     |       |   | (152,475 | )        |         |   | 46,146  |        
|INCOME TAXES (BENEFIT)                                       |                                   |                          |        |         |        |        |        |           |   |   | 17,951     |         |     |            |        |         |            |   | 65       |              |         |   | (847   | )     |       |   |         |          |         |   | 17,169  |        
|                                                             |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |      
|INCOME FROM                                                  |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |       |       |   |          |          |         |   |         |        
|                                                             | CONTINUING OPERATIONS             |                          |         | 28,852  |        |        |         | 28,852    |   |   |            | 28,852  |     |            |         | 46,939  |            |   |          | 48,396       |         |   |        | (439  | )     |   |          | (152,475 | )       |   |         | 28,977  |        
|DISCONTINUED OPERATIONS                                      |                                   |                          |        |         |        |        |        |           |   |   |           |         |     |            |        |         |            |   |         |              |         |   | (125   | )     |       |   |         |          |         |   | (125    | )      
|                                                             |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |      
|NET INCOME (LOSS)                                            |                                   | $                        | 28,852  |         |        | $      | 28,852  |           |   | $ | 28,852     |         |     | $          | 46,939  |         |            | $ | 48,396   |              |         | $ | (564   | )     |       | $ | (152,475 | )        |         | $ | 28,852  |        
|                                                             |                                   |                          |         |         |        |        |         |           |   |   |            |         |     |            |         |         |            |   |          |              |         |   |        |      

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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Combining Statement of Operations for the Six Months Ended
June 30, 2005


|                                                             |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |        |       |   |         |         |         |   |         |         |         | 
|------------------------------------------------------------ | ----------------------------------------- | ------------------------ | ---- | ---- | ------ | ------ | ---- | --------- | - | - | ---------- | ---- | - | ---------- | ------ | ------- | ---------- | - | -------- | ------------ | ------- | - | ------ | ------ | ----- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                                             |                                           |                          |      |      |        | Parent |      |           |   |   | Subsidiary |      |   | Non-       |        |         |            |   | Combined |             
|                                                             |                                           | ACL Inc.                 |      |      | Parent |        |      | Guarantor |   |   | Issuers    |      |   | Guarantors |        |         | Guarantors |   |          | Eliminations |         |   | Totals |       
|                                                             |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |       
|                                                             |                                           | (In thousands)           |     
|REVENUE                                                      |                                           | $                        |     |      |        | $      |     |           |   | $ |           |      |   | $          | 16,266 |         |            | $ | 322,505  |              |         | $ | 7,807  |        |       | $ | (18,785 | )       |         | $ | 327,793 |        
|OPERATING EXPENSE                                            |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |        |       |   |         |         |         |   |         |        
|                                                             | Materials, Supplies and Other             |                          |      |     |        |        |      |          |   |   |            |     |   |            |        |        |            |   |          | 123,488      |         |   |        | 3,428  |       |   |         | (342    | )       |   |         | 126,574 |        
|                                                             | Rent                                      |                          |      |     |        |        |      |          |   |   |            |     |   |            |        |        |            |   |          | 28,207       |         |   |        | 711    |       |   |         | (18,443 | )       |   |         | 10,475  |        
|                                                             | Labor and Fringe Benefits                 |                          |      |     |        |        |      |          |   |   |            |     |   |            |        |        |            |   |          | 62,131       |         |   |        | 1,854  |       |   |         |        |         |   |         | 63,985  |        
|                                                             | Fuel                                      |                          |      |     |        |        |      |          |   |   |            |     |   |            |        |        |            |   |          | 55,983       |         |   |        | 194    |       |   |         |        |         |   |         | 56,177  |        
|                                                             | Depreciation and Amortization             |                          |      |     |        |        |      |          |   |   |            |     |   |            |        | 17,921  |            |   |          | 4,763        |         |   |        | 1,780  |       |   |         |        |         |   |         | 24,464  |        
|                                                             | Fuel User Tax                             |                          |      |     |        |        |      |          |   |   |            |     |   |            |        |        |            |   |          | 8,925        |         |   |        |       |       |   |         |        |         |   |         | 8,925   |        
|                                                             | Selling, General & Administrative         |                          |      |     |        |        |      |          |   |   |            |     |   |            |        | 233     |            |   |          | 23,973       |         |   |        | 1,580  |       |   |         |        |         |   |         | 25,786  |        
|                                                             |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |       
|                                                             |                                           | Total Operating Expenses |      |      |       |        |      |           |  |   |            |      |  |            |        |         | 18,154     |   |          |              | 307,470 |   |        |        | 9,547 |   |         |         | (18,785 | ) |         |         | 316,386 | 
|                                                             |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |       
|OPERATING (LOSS) INCOME                                      |                                           |                          |     |      |        |        |     |           |   |   |           |      |   |            | (1,888 | )       |            |   | 15,035   |              |         |   | (1,740 | )      |       |   |        |         |         |   | 11,407  |        
|OTHER EXPENSE (INCOME)                                       |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |        |       |   |         |         |         |   |         |        
|                                                             | Interest Expense                          |                          |      |     |        |        |      |          |   |   |            |     |   |            |        | 16,546  |            |   |          | 273          |         |   |        | 935    |       |   |         |        |         |   |         | 17,754  |        
|                                                             | Interest (Income) Expense from Affiliates |                          |      |     |        |        |      |          |   |   |            |     |   |            |        | (217    | )          |   |          |             |         |   |        | 217    |       |   |         |        |         |   |         |        |        
|                                                             | Other, Net                                |                          |      | 295  |        |        |      | 295       |   |   |            | 37   |   |            |        | (18,180 | )          |   |          | 914          |         |   |        | (1,301 | )     |   |         | 12,051  |         |   |         | (5,889  | )      
|                                                             |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |       
|                                                             |                                           |                          | 295  |      |        |        | 295  |           |   |   | 37         |      |   |            | (1,851 | )       |            |   | 1,187    |              |         |   | (149   | )      |       |   | 12,051  |         |         |   | 11,865  |        
|                                                             |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |       
|(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |                                           |                          | (295 | )    |        |        | (295 | )         |   |   | (37        | )    |   |            | (37    | )       |            |   | 13,848   |              |         |   | (1,591 | )      |       |   | (12,051 | )       |         |   | (458    | )      
|INCOME TAXES                                                 |                                           |                          |     |      |        |        |     |           |   |   | 258        |      |   |            |       |         |            |   | 100      |              |         |   | (130   | )      |       |   |        |         |         |   | 228     |        
|                                                             |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |       
|(LOSS) INCOME FROM                                           |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |        |       |   |         |         |         |   |         |        
|                                                             | CONTINUING OPERATIONS                     |                          |      | (295 | )      |        |      | (295      | ) |   |            | (295 | ) |            |        | (37     | )          |   |          | 13,748       |         |   |        | (1,461 | )     |   |         | (12,051 | )       |   |         | (686    | )      
|DISCONTINUED OPERATIONS                                      |                                           |                          |     |      |        |        |     |           |   |   |           |      |   |            |       |         |            |   |         |              |         |   | 391    |        |       |   |        |         |         |   | 391     |        
|                                                             |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |       
|NET (LOSS) INCOME                                            |                                           | $                        | (295 | )    |        | $      | (295 | )         |   | $ | (295       | )    |   | $          | (37    | )       |            | $ | 13,748   |              |         | $ | (1,070 | )      |       | $ | (12,051 | )       |         | $ | (295    | )      
|                                                             |                                           |                          |      |      |        |        |      |           |   |   |            |      |   |            |        |         |            |   |          |              |         |   |        |       

19



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Combining Statement of Financial Position at June 30, 2006


|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |       |        |  |          |   |          |   |         |         |         | 
|------------------------------------ | ------------------------------------- | ------------------------------------------ | ------- | - | ------- | ------ | ------- | --------- | ------- |  | ---------- | ------- | ------- | ---------- | ------- | ------- | ---------- |  | -------- | ------------ | ------- |  | ------ | ----- | ------ |  | -------- | - | -------- | - | ------- | ------- | ------- | 
|                                     |                                       |                                            |         |   |         | Parent |         |           |         |  | Subsidiary |         |         | Non-       |         |         |            |  | Combined |             
|                                     |                                       | ACL Inc.                                   |         |   | Parent  |        |         | Guarantor |         |  | Issuers    |         |         | Guarantors |         |         | Guarantors |  |          | Eliminations |         |  | Totals |      
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      
|                                     |                                       | (In thousands)                             |        
|ASSETS                              
|CURRENT ASSETS                       |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |       |        |  |          |   |          |   |         |        
|                                     | Cash and Cash Equivalents             |                                            | $       |  |         |        | $       |          |         |  | $          |        |         |            | $       | 7,083   |            |  | $        | 39           |         |  | $      | 4,686 |        |  | $        |  |          |   | $       | 11,808  |        
|                                     | Accounts Receivable, Net              |                                            |         |  |         |        |         |          |         |  |            |        |         |            |         | (52     | )          |  |          | 100,307      |         |  |        | 6,445 |        |  |          |  |          |   |         | 106,700 |        
|                                     | Accounts Receivable  Intercompany    |                                            |         |  |         |        |         |          |         |  |            | (12,685 | )       |            |         | 143,426 |            |  |          | (130,435     | )       |  |        | (306  | )      |  |          |  |          |   |         |        |        
|                                     | Inventory                             |                                            |         |  |         |        |         |          |         |  |            |        |         |            |         |        |            |  |          | 64,159       |         |  |        | 1,732 |        |  |          |  |          |   |         | 65,891  |        
|                                     | Deferred Tax Asset                    |                                            |         |  |         |        |         |          |         |  |            | 2,918   |         |            |         |        |            |  |          |             |         |  |        |      |        |  |          |  |          |   |         | 2,918   |        
|                                     | Other Current Assets                  |                                            |         |  |         |        |         |          |         |  |            |        |         |            |         | 1,420   |            |  |          | 24,360       |         |  |        | 2,277 |        |  |          |  |          |   |         | 28,057  |        
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      
|                                     |                                       | Total Current Assets                       |         |   |        |        |         |           |        |  |            |         | (9,767  | )          |         |         | 151,877    |  |          |              | 58,430  |  |        |       | 14,834 |  |          |   |         |   |         |         | 215,374 | 
|PROPERTIES  Net                     |                                       |                                            |        |   |         |        |        |           |         |  |           |         |         |            | 361,111 |         |            |  | 75,043   |              |         |  | 10,548 |       |        |  |         |   |          |   | 446,702 |        
|INVESTMENT IN SUBSIDIARIES           |                                       |                                            | 286,019 |   |         |        | 286,019 |           |         |  | 302,593    |         |         |            | 17,308  |         |            |  | 73,877   |              |         |  |       |       |        |  | (965,816 | ) |          |   |        |        
|INVESTMENT IN EQUITY INVESTEES       |                                       |                                            |        |   |         |        |        |           |         |  |           |         |         |            |        |         |            |  | 4,345    |              |         |  | 934    |       |        |  |         |   |          |   | 5,279   |        
|OTHER ASSETS                         |                                       |                                            |        |   |         |        |        |           |         |  |           |         |         |            | 6,665   |         |            |  | 7,747    |              |         |  | 67     |       |        |  |         |   |          |   | 14,479  |        
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      
|                                     |                                       | Total Assets                               |         | $ | 286,019 |        |         | $         | 286,019 |  |            | $       | 292,826 |            |         | $       | 536,961    |  |          | $            | 219,442 |  |        | $     | 26,383 |  |          | $ | (965,816 | ) |         | $       | 681,834 | 
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      
|                                    
|LIABILITIES                         
|CURRENT LIABILITIES                  |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |       |        |  |          |   |          |   |         |        
|                                     | Accounts Payable                      |                                            | $       |  |         |        | $       |          |         |  | $          |        |         |            | $       | 10,040  |            |  | $        | 21,781       |         |  | $      | 347   |        |  | $        |  |          |   | $       | 32,168  |        
|                                     | Accrued Payroll and Fringe Benefits   |                                            |         |  |         |        |         |          |         |  |            |        |         |            |         | 106     |            |  |          | 20,599       |         |  |        |      |        |  |          |  |          |   |         | 20,705  |        
|                                     | Deferred Revenue                      |                                            |         |  |         |        |         |          |         |  |            |        |         |            |         |        |            |  |          | 22,331       |         |  |        |      |        |  |          |  |          |   |         | 22,331  |        
|                                     | Accrued Claims and Insurance Premiums |                                            |         |  |         |        |         |          |         |  |            |        |         |            |         |        |            |  |          | 11,916       |         |  |        |      |        |  |          |  |          |   |         | 11,916  |        
|                                     | Accrued Interest                      |                                            |         |  |         |        |         |          |         |  |            |        |         |            |         | 5,204   |            |  |          |             |         |  |        |      |        |  |          |  |          |   |         | 5,204   |        
|                                     | Customer Deposits                     |                                            |         |  |         |        |         |          |         |  |            |        |         |            |         |        |            |  |          | 11,562       |         |  |        |      |        |  |          |  |          |   |         | 11,562  |        
|                                     | Other Liabilities                     |                                            |         |  |         |        |         |          |         |  |            | 2,074   |         |            |         | 224     |            |  |          | 29,321       |         |  |        | 1,018 |        |  |          |  |          |   |         | 32,637  |        
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      
|                                     |                                       | Total Current Liabilities                  |         |   |        |        |         |           |        |  |            |         | 2,074   |            |         |         | 15,574     |  |          |              | 117,510 |  |        |       | 1,365  |  |          |   |         |   |         |         | 136,523 | 
|LONG TERM DEBT                       |                                       |                                            |        |   |         |        |        |           |         |  |           |         |         |            | 214,800 |         |            |  |         |              |         |  |       |       |        |  |         |   |          |   | 214,800 |        
|PENSION LIABILITY                    |                                       |                                            |        |   |         |        |        |           |         |  |           |         |         |            |        |         |            |  | 19,250   |              |         |  |       |       |        |  |         |   |          |   | 19,250  |        
|DEFERRED TAX LIABILITY               |                                       |                                            |        |   |         |        |        |           |         |  | 9,813      |         |         |            |        |         |            |  |         |              |         |  |       |       |        |  |         |   |          |   | 9,813   |        
|OTHER LONG TERM LIABILITIES          |                                       |                                            |        |   |         |        |        |           |         |  |           |         |         |            |        |         |            |  | 10,478   |              |         |  | 4,951  |       |        |  |         |   |          |   | 15,429  |        
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      
|                                     |                                       | Total Liabilities                          |         |   |        |        |         |           |        |  |            |         | 11,887  |            |         |         | 230,374    |  |          |              | 147,238 |  |        |       | 6,316  |  |          |   |         |   |         |         | 395,815 | 
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      
|STOCKHOLDERS EQUITY                
|Common Stock                         |                                       |                                            | 308     |   |         |        |        |           |         |  |           |         |         |            |        |         |            |  |         |              |         |  | 1,795  |       |        |  | (1,795   | ) |          |   | 308     |        
|Treasury Stock                       |                                       |                                            | (3,018  | ) |         |        |        |           |         |  |           |         |         |            |        |         |            |  |         |              |         |  |       |       |        |  |         |   |          |   | (3,018  | )      
|Other Capital                        |                                       |                                            | 253,918 |   |         |        | 251,208 |           |         |  | 251,208    |         |         |            | 247,904 |         |            |  |         |              |         |  | 7,629  |       |        |  | (757,949 | ) |          |   | 253,918 |        
|Retained Earnings                    |                                       |                                            | 40,665  |   |         |        | 40,665  |           |         |  | 35,585     |         |         |            | 68,045  |         |            |  | 81,566   |              |         |  | 10,643 |       |        |  | (236,504 | ) |          |   | 40,665  |        
|Accumulated Other Comprehensive Loss |                                       |                                            | (5,854  | ) |         |        | (5,854  | )         |         |  | (5,854     | )       |         |            | (9,362  | )       |            |  | (9,362   | )            |         |  |       |       |        |  | 30,432   |   |          |   | (5,854  | )      
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      
|                                     |                                       | Total Stockholders Equity                 |         |   | 286,019 |        |         |           | 286,019 |  |            |         | 280,939 |            |         |         | 306,587    |  |          |              | 72,204  |  |        |       | 20,067 |  |          |   | (965,816 | ) |         |         | 286,019 | 
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      
|                                     |                                       | Total Liabilities and Stockholders Equity |         | $ | 286,019 |        |         | $         | 286,019 |  |            | $       | 292,826 |            |         | $       | 536,961    |  |          | $            | 219,442 |  |        | $     | 26,383 |  |          | $ | (965,816 | ) |         | $       | 681,834 | 
|                                     |                                       |                                            |         |   |         |        |         |           |         |  |            |         |         |            |         |         |            |  |          |              |         |  |        |      

20



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Combining Statement of Financial Position at December 31,
2005


|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |        |        |  |          |   |          |   |         |        |         | 
|------------------------------------ | ------------------------------------- | ------------------------------------------ | ------- | - | ------- | ------ | ------- | ---------- | ------- |  | ---------- | ------- | ------- | ---------- | ------- | ------- | ---------- |  | -------- | ------------ | ------- |  | ------- | ------ | ------ |  | -------- | - | -------- | - | ------- | ------ | ------- | 
|                                     |                                       |                                            |         |   |         | Parent |         |            |         |  | Subsidiary |         |         | Non-       |         |         |            |  | Combined |             
|                                     |                                       | ACL Inc.                                   |         |   | Parent  |        |         | Guarantors |         |  | Issuers    |         |         | Guarantors |         |         | Guarantors |  |          | Eliminations |         |  | Totals  |       
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       
|                                     |                                       | (In thousands)                             |        
|ASSETS                              
|CURRENT ASSETS                       |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |        |        |  |          |   |          |   |         |       
|                                     | Cash and Cash Equivalents             |                                            | $       |  |         |        | $       |           |         |  | $          |        |         |            | $       | 7,740   |            |  | $        | 38           |         |  | $       | 6,181  |        |  | $        |  |          |   | $       | 13,959 |        
|                                     | Accounts Receivable, Net              |                                            |         |  |         |        |         |           |         |  |            |        |         |            |         | 38      |            |  |          | 86,267       |         |  |         | 10,221 |        |  |          |  |          |   |         | 96,526 |        
|                                     | Accounts Receivable  Intercompany    |                                            |         |  |         |        |         |           |         |  |            | (11,479 | )       |            |         | 152,705 |            |  |          | (140,920     | )       |  |         | (306   | )      |  |          |  |          |   |         |       |        
|                                     | Inventory                             |                                            |         |  |         |        |         |           |         |  |            |        |         |            |         |        |            |  |          | 43,358       |         |  |         | 1,618  |        |  |          |  |          |   |         | 44,976 |        
|                                     | Deferred Tax Asset                    |                                            |         |  |         |        |         |           |         |  |            | 4,644   |         |            |         |        |            |  |          |             |         |  |         |       |        |  |          |  |          |   |         | 4,644  |        
|                                     | Other Current Assets                  |                                            |         |  |         |        |         |           |         |  |            |        |         |            |         | 1,049   |            |  |          | 13,114       |         |  |         | 2,624  |        |  |          |   |          |   |         | 16,787 |        
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       
|                                     |                                       | Total Current Assets                       |         |   |        |        |         |            |        |  |            |         | (6,835  | )          |         |         | 161,532    |  |          |              | 1,857   |  |         |        | 20,338 |  |          |   |         |   |         |        | 176,892 | 
|PROPERTIES  Net                     |                                       |                                            |        |   |         |        |        |            |         |  |           |         |         |            | 347,849 |         |            |  | 65,975   |              |         |  | 11,917  |        |        |  |         |   |          |   | 425,741 |       
|INVESTMENT IN SUBSIDIARIES           |                                       |                                            | 253,701 |   |         |        | 253,701 |            |         |  | 255,492    |         |         |            | (31,089 | )       |            |  | 74,442   |              |         |  |        |        |        |  | (806,247 | ) |          |   |        |       
|INVESTMENT IN EQUITY INVESTEES       |                                       |                                            |        |   |         |        |        |            |         |  |           |         |         |            |        |         |            |  | 4,408    |              |         |  | 1,124   |        |        |  |         |   |          |   | 5,532   |       
|OTHER ASSETS                         |                                       |                                            |        |   |         |        |        |            |         |  |           |         |         |            | 7,059   |         |            |  | 7,993    |              |         |  | 67      |        |        |  |         |   |          |   | 15,119  |       
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       
|                                     |                                       | Total Assets                               |         | $ | 253,701 |        |         | $          | 253,701 |  |            | $       | 248,657 |            |         | $       | 485,351    |  |          | $            | 154,675 |  |         | $      | 33,446 |  |          | $ | (806,247 | ) |         | $      | 623,284 | 
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       
|                                    
|LIABILITIES                         
|CURRENT LIABILITIES                  |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |        |        |  |          |   |          |   |         |       
|                                     | Accounts Payable                      |                                            | $       |  |         |        | $       |           |         |  | $          |        |         |            | $       | 20,518  |            |  | $        | 25,047       |         |  | $       | 1,952  |        |  | $        |  |          |   | $       | 47,517 |        
|                                     | Accrued Payroll and Fringe Benefits   |                                            |         |  |         |        |         |           |         |  |            |        |         |            |         | (27     | )          |  |          | 22,330       |         |  |         |       |        |  |          |  |          |   |         | 22,303 |        
|                                     | Deferred Revenue                      |                                            |         |  |         |        |         |           |         |  |            |        |         |            |         |        |            |  |          | 16,631       |         |  |         |       |        |  |          |  |          |   |         | 16,631 |        
|                                     | Accrued Claims and Insurance Premiums |                                            |         |  |         |        |         |           |         |  |            |        |         |            |         |        |            |  |          | 13,361       |         |  |         |       |        |  |          |  |          |   |         | 13,361 |        
|                                     | Accrued Interest                      |                                            |         |  |         |        |         |           |         |  |            |        |         |            |         | 5,179   |            |  |          |             |         |  |         |       |        |  |          |  |          |   |         | 5,179  |        
|                                     | Customer Deposits                     |                                            |         |  |         |        |         |           |         |  |            |        |         |            |         |        |            |  |          | 1,147        |         |  |         |       |        |  |          |  |          |   |         | 1,147  |        
|                                     | Other Liabilities                     |                                            |         |  |         |        |         |           |         |  |            | (4,608  | )       |            |         | 195     |            |  |          | 23,819       |         |  |         | 5,144  |        |  |          |  |          |   |         | 24,550 |        
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       
|                                     |                                       | Total Current Liabilities                  |         |   |        |        |         |            |        |  |            |         | (4,608  | )          |         |         | 25,865     |  |          |              | 102,335 |  |         |        | 7,096  |  |          |   |         |   |         |        | 130,688 | 
|LONG TERM DEBT                       |                                       |                                            |        |   |         |        |        |            |         |  |           |         |         |            | 200,000 |         |            |  |         |              |         |  |        |        |        |  |         |   |          |   | 200,000 |       
|PENSION LIABILITY                    |                                       |                                            |        |   |         |        |        |            |         |  |           |         |         |            |        |         |            |  | 17,867   |              |         |  |        |        |        |  |         |   |          |   | 17,867  |       
|DEFERRED TAX LIABILITY               |                                       |                                            |        |   |         |        |        |            |         |  | 4,644      |         |         |            |        |         |            |  |         |              |         |  |        |        |        |  |         |   |          |   | 4,644   |       
|OTHER LONG TERM LIABILITIES          |                                       |                                            |        |   |         |        |        |            |         |  |           |         |         |            |        |         |            |  | 10,664   |              |         |  | 5,720   |        |        |  |         |   |          |   | 16,384  |       
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       
|                                     |                                       | Total Liabilities                          |         |   |        |        |         |            |        |  |            |         | 36      |            |         |         | 225,865    |  |          |              | 130,866 |  |         |        | 12,816 |  |          |   |         |   |         |        | 369,583 | 
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       
|STOCKHOLDERS EQUITY                
|Common Stock                         |                                       |                                            | 307     |   |         |        |        |            |         |  |           |         |         |            |        |         |            |  |         |              |         |  | 1,813   |        |        |  | (1,813   | ) |          |   | 307     |       
|Other Capital                        |                                       |                                            | 247,435 |   |         |        | 247,742 |            |         |  | 247,742    |         |         |            | 247,742 |         |            |  |         |              |         |  | 53,746  |        |        |  | (796,972 | ) |          |   | 247,435 |       
|Retained Earnings (Deficit)          |                                       |                                            | 11,813  |   |         |        | 11,813  |            |         |  | 6,733      |         |         |            | 21,106  |         |            |  | 33,171   |              |         |  | (34,929 | )      |        |  | (37,894  | ) |          |   | 11,813  |       
|Accumulated Other Comprehensive Loss |                                       |                                            | (5,854  | ) |         |        | (5,854  | )          |         |  | (5,854     | )       |         |            | (9,362  | )       |            |  | (9,362   | )            |         |  |        |        |        |  | 30,432   |   |          |   | (5,854  | )     
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       
|                                     |                                       | Total Stockholders Equity                 |         |   | 253,701 |        |         |            | 253,701 |  |            |         | 248,621 |            |         |         | 259,486    |  |          |              | 23,809  |  |         |        | 20,630 |  |          |   | (806,247 | ) |         |        | 253,701 | 
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       
|                                     |                                       | Total Liabilities and Stockholders Equity |         | $ | 253,701 |        |         | $          | 253,701 |  |            | $       | 248,657 |            |         | $       | 485,351    |  |          | $            | 154,675 |  |         | $      | 33,446 |  |          | $ | (806,247 | ) |         | $      | 623,284 | 
|                                     |                                       |                                            |         |   |         |        |         |            |         |  |            |         |         |            |         |         |            |  |          |              |         |  |         |       

21



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Combining Statement of Cash Flows for the Six Months Ended
June 30, 2006


|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |    |      |        |          |   |         |   |        |         |        |         |         |  
|------------------------------------------------------------------------------------------------------------------- | --------------------------------------- | -------------------------------------------- | ------------------------------------------------------------------------- | --------------------------------------------------- | ------- | ------ | ------ | --------- | ------- | - | ---------- | ----- | ------- | ---------- | ------ | ------- | ---------- | ------ | -------- | ------------ | ----- | ------- | ------- | -- | ---- | ------ | -------- | - | ------- | - | ------ | ------- | ------ | ------- | ------- | -
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         | Parent |        |           |         |   | Subsidiary |       |         | Non-       |        |         |            |        | Combined |             
|                                                                                                                    |                                         | ACL Inc.                                     |                                                                           |                                                     | Parent  |        |        | Guarantor |         |   | Issuers    |       |         | Guarantors |        |         | Guarantors |        |          | Eliminations |       |         | Totals  |   
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|                                                                                                                    |                                         | (In thousands)                               |                                                                          
|Income (Loss) from Continuing Operations                                                                            |                                         | $                                            | 28,852                                                                    |                                                     |         | $      | 28,852 |           |         | $ | 28,852     |       |         | $          | 46,939 |         |            | $      | 48,396   |              |       | $       | (439    | )  |      | $      | (152,475 | ) |         | $ | 28,977 |        
|Adjustments to Reconcile Income (Loss) from Continuing
    Operations to Net Cash Provided by Operating Activities: |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |    |      |        |          |   |         |   |        |        
|                                                                                                                    |                                         | Depreciation and Amortization                |                                                                           |                                                     |        |        |        |           |        |   |            |       |        |            |        |         | 18,706     |        |          |              | 4,734 |         |         |    | 935  |        |          |   |        |   |        |         | 24,375 |        
|                                                                                                                    |                                         | Debt Issuance Cost Amortization              |                                                                           |                                                     |        |        |        |           |        |   |            |       |        |            |        |         | 562        |        |          |              |      |         |         |    |     |        |          |   |        |   |        |         | 562    |        
|                                                                                                                    |                                         | Loss on Property Dispositions                |                                                                           |                                                     |        |        |        |           |        |   |            |       |        |            |        |         | 26         |        |          |              | 20    |         |         |    |     |        |          |   |        |   |        |         | 46     |        
|                                                                                                                    |                                         | Other                                        |                                                                           |                                                     | (28,852 | )      |        |           | (28,852 | ) |            |       | (41,771 | )          |        |         | (47,096    | )      |          |              | 4,815 |         |         |    | (836 | )      |          |   | 152,475 |   |        |         | 9,883  |        
|                                                                                                                    |                                         | Changes in Operating Assets and Liabilities: |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |    |      |        |          |   |         |   |        |         |        |        
|                                                                                                                    |                                         |                                              | Accounts Receivable                                                       |                                                     |         |       |        |           |         |  |            |       |         |           |        |         |            | 91     |          |              |       | (14,042 | )       |    |      | 3,776  |          |   |         |  |        |         |        | (10,175 | )      
|                                                                                                                    |                                         |                                              | Intercompany Accounts Receivable/ Payable                                 |                                                     |         | 3,018  |        |           |         |  |            |       |         | 1,206      |        |         |            | 9,279  |          |              |       | (13,503 | )       |    |      |       |          |   |         |  |        |         |        |        |        
|                                                                                                                    |                                         |                                              | Inventory                                                                 |                                                     |         |       |        |           |         |  |            |       |         |           |        |         |            |       |          |              |       | (20,241 | )       |    |      | (114   | )        |   |         |  |        |         |        | (20,355 | )      
|                                                                                                                    |                                         |                                              | Accrued Interest                                                          |                                                     |         |       |        |           |         |  |            |       |         |           |        |         |            | 25     |          |              |       |        |         |    |      |       |          |   |         |  |        |         |        | 25      |        
|                                                                                                                    |                                         |                                              | Other Current Assets                                                      |                                                     |         |       |        |           |         |  |            |       |         | 1,726      |        |         |            | (310   | )        |              |       | (10,969 | )       |    |      | 939    |          |   |         |  |        |         |        | (8,614  | )      
|                                                                                                                    |                                         |                                              | Other Current Liabilities                                                 |                                                     |         |       |        |           |         |  |            |       |         | 6,682      |        |         |            | 471    |          |              |       | 15,180  |         |    |      | (5,731 | )        |   |         |  |        |         |        | 16,602  |        
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|                                                                                                                    |                                         |                                              | Net Cash Provided by Operating Activities before Reorganization
    Items |                                                     |         | 3,018  |        |           |         |  |            |       |         | (3,305     | )      |         |            | 28,693 |          |              |       | 14,390  |         |    |      | (1,470 | )        |   |         |  |        |         |        | 41,326  |        
|                                                                                                                    |                                         |                                              | Reorganization Items Paid                                                 |                                                     |         |       |        |           |         |  |            |       |         |           |        |         |            |       |          |              |       | (325    | )       |    |      |       |          |   |         |  |        |         |        | (325    | )      
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|                                                                                                                    |                                         |                                              | Net Cash Provided by (Used in) Continuing Operating Activities            |                                                     |         | 3,018  |        |           |         |  |            |       |         | (3,305     | )      |         |            | 28,693 |          |              |       | 14,065  |         |    |      | (1,470 | )        |   |         |  |        |         |        | 41,001  |        
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|                                                                                                                    |                                         |                                              | Net Cash (Used in) Operating Activities of Discontinued Segment           |                                                     |         |       |        |           |         |  |            |       |         |           |        |         |            |       |          |              |       |        |         |    |      | (17    | )        |   |         |  |        |         |        | (17     | )      
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|                                                                                                                    |                                         |                                              | Net Cash Provided by (Used in) Operating Activities                       |                                                     |         | 3,018  |        |           |         |  |            |       |         | (3,305     | )      |         |            | 28,693 |          |              |       | 14,065  |         |    |      | (1,487 | )        |   |         |  |        |         |        | 40,984  |        
|INVESTING ACTIVITIES                                                                                                |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |    |      |        |          |   |         |   |        |        
|                                                                                                                    | Property Additions                      |                                              |                                                                           |                                                    |         |        |        |          |         |   |            |      |         |            |        | (33,188 | )          |        |          | (13,121      | )     |         |         | (8 | )    |        |          |  |         |   |        | (46,317 | )     
|                                                                                                                    | Proceeds from Property Dispositions     |                                              |                                                                           |                                                    |         |        |        |          |         |   |            |      |         |            |        |        |            |        |          | 170          |       |         |         |   |      |        |          |  |         |   |        | 170     |       
|                                                                                                                    | Other                                   |                                              |                                                                           |                                                    |         |        |        |          |         |   |            |      |         |            |        | (155    | )          |        |          | (1,029       | )     |         |         |   |      |        |          |  |         |   |        | (1,184  | )     
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|                                                                                                                    |                                         |                                              |                                                                           | Net Cash Used in Investing Activities               |         |        |       |           |         |   |           |       |         |            |       |         |            |        | (33,343  | )            |       |         | (13,980 | )  |      |        | (8       | ) |         |   |       |         |        |         | (47,331 | )
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|FINANCING ACTIVITIES                                                                                                |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |    |      |        |          |   |         |   |        |        
|                                                                                                                    | Revolving Credit Facility Borrowings    |                                              |                                                                           |                                                    |         |        |        |          |         |   |            |      |         |            |        | 15,300  |            |        |          |             |       |         |         |   |      |        |          |  |         |   |        | 15,300  |       
|                                                                                                                    | 2015 Senior Note Repayments             |                                              |                                                                           |                                                    |         |        |        |          |         |   |            |      |         |            |        | (500    | )          |        |          |             |       |         |         |   |      |        |          |  |         |   |        | (500    | )     
|                                                                                                                    | Outstanding Checks                      |                                              |                                                                           |                                                    |         |        |        |          |         |   |            |      |         |            |        | (10,788 | )          |        |          | (85          | )     |         |         |   |      |        |          |  |         |   |        | (10,873 | )     
|                                                                                                                    | Debt Costs                              |                                              |                                                                           |                                                    |         |        |        |          |         |   |            |      |         |            |        | (13     | )          |        |          |             |       |         |         |   |      |        |          |  |         |   |        | (13     | )     
|                                                                                                                    | Tax Benefit of Share-Based Compensation |                                              |                                                                           |                                                    |         |        |        |          |         |   |            | 3,305 |         |            |        |        |            |        |          |             |       |         |         |   |      |        |          |  |         |   |        | 3,305   |       
|                                                                                                                    | Acquisition of Treasury Stock           |                                              |                                                                           | (3,018                                              | )       |        |        |          |         |   |            |      |         |            |        |        |            |        |          |             |       |         |         |   |      |        |          |  |         |   |        | (3,018  | )     
|                                                                                                                    | Other                                   |                                              |                                                                           |                                                    |         |        |        |          |         |   |            |      |         |            |        | (5      | )          |        |          |             |       |         |         |   |      |        |          |  |         |   |        | (5      | )     
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|                                                                                                                    |                                         |                                              |                                                                           | Net Cash (Used in) Provided by Financing Activities |         |        | (3,018 | )         |         |   |           |       |         |            | 3,305  |         |            |        | 3,994    |              |       |         | (85     | )  |      |        |         |   |         |   |       |         |        |         | 4,196   |  
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|(Decrease) in Cash and Cash Equivalents                                                                             |                                         |                                              |                                                                          |                                                     |         |        |       |           |         |   |           |       |         |            | (656   | )       |            |        |         |              |       |         | (1,495  | )  |      |        |         |   |         |   | (2,151 | )      
|Cash and Cash Equivalents at Beginning of Period                                                                    |                                         |                                              |                                                                          |                                                     |         |        |       |           |         |   |           |       |         |            | 7,740  |         |            |        | 38       |              |       |         | 6,181   |    |      |        |         |   |         |   | 13,959 |        
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   
|                                                                                                                    |                                         |                                              |                                                                           | Cash and Cash Equivalents at End of Period          |         | $      |       |           |         | $ |           |       |         | $          |       |         |            | $      | 7,084    |              |       | $       | 38      |    |      | $      | 4,686    |   |         | $ |       |         |        | $       | 11,808  |  
|                                                                                                                    |                                         |                                              |                                                                           |                                                     |         |        |        |           |         |   |            |       |         |            |        |         |            |        |          |              |       |         |         |   

22



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Combining Statement of Cash Flows for the Six Months Ended
June 30, 2005


|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |        |        |        |         |   |        |     |         |          |         |         |  
|------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | --------------------------------------------------- | ----------------------------------------------------------------------------------- | - | ------ | ------ | ---- | --------- | --- | - | ---------- | - | ------ | ---------- | ------- | -------- | ---------- | ------ | -------- | ------------ | ------ | ------- | ------ | ------ | ------ | ------ | ------- | - | ------ | --- | ------- | -------- | ------- | ------- | -
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        | Parent |      |           |     |   | Subsidiary |   |        | Non-       |         |          |            |        | Combined |             
|                                                                                                                    |                                      | ACL Inc,                                            |                                                                                     |   | Parent |        |      | Guarantor |     |   | Issuers    |   |        | Guarantors |         |          | Guarantors |        |          | Eliminations |        |         | Totals |       
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|                                                                                                                    |                                      | (In thousands)                                      |                                                                                    
|(Loss) Income from Continuing Operations                                                                            |                                      | $                                                   | (295                                                                                | ) |        | $      | (295 | )         |     | $ | (295       | ) |        | $          | (37     | )        |            | $      | 13,748   |              |        | $       | (1,461 | )      |        | $      | (12,051 | ) |        | $   | (686    | )       
|Adjustments to Reconcile (Loss) Income from Continuing
    Operations to Net Cash Provided by Operating Activities: |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |        |        |        |         |   |        |     |         |         
|                                                                                                                    |                                      | Depreciation and Amortization                       |                                                                                     |   |       |        |      |           |    |   |            |   |       |            |         |          | 17,921     |        |          |              | 4,763  |         |        |        | 1,780  |        |         |   |       |     |         |          | 24,464  |        
|                                                                                                                    |                                      | Debt Issuance Cost Amortization                     |                                                                                     |   |       |        |      |           |    |   |            |   |       |            |         |          | 2,264      |        |          |              |       |         |        |        | 71     |        |         |   |       |     |         |          | 2,335   |        
|                                                                                                                    |                                      | (Gain) Loss on Property Dispositions                |                                                                                     |   |       |        |      |           |    |   |            |   |       |            |         |          | (4,339     | )      |          |              | 13     |         |        |        | (106   | )      |         |   |       |     |         |          | (4,432  | )      
|                                                                                                                    |                                      | Other                                               |                                                                                     |   | 295    |        |      |           | 295 |   |            |   | (2,970 | )          |         |          | (36,615    | )      |          |              | 24,769 |         |        |        | 894    |        |         |   | 11,410 |     |         |          | (1,922  | )      
|                                                                                                                    |                                      | Changes in Operating Assets and Liabilities:        |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |        |        |        |         |   |        |     |         |          |         |        
|                                                                                                                    |                                      |                                                     | Accounts Receivable                                                                 |   |        |       |      |           |     |  |            |   |        |           |         |          |            | (125   | )        |              |        | (9,987  | )      |        |        | 1,210  |         |   |        |    |         |          |         | (8,902  | )
|                                                                                                                    |                                      |                                                     | Intercompany Accounts Receivable/ Payable                                           |   |        |       |      |           |     |  |            |   |        | (2         | )       |          |            | 15,547 |          |              |        | (13,045 | )      |        |        | (2,500 | )       |   |        |    |         |          |         |        |  
|                                                                                                                    |                                      |                                                     | Inventory                                                                           |   |        |       |      |           |     |  |            |   |        |           |         |          |            |       |          |              |        | (14,372 | )      |        |        | 253    |         |   |        |    |         |          |         | (14,119 | )
|                                                                                                                    |                                      |                                                     | Accrued Interest                                                                    |   |        |       |      |           |     |  |            |   |        |           |         |          |            | 7,064  |          |              |        | 94      |        |        |        | (1     | )       |   |        |    |         |          |         | 7,157   |  
|                                                                                                                    |                                      |                                                     | Other Current Assets                                                                |   |        |       |      |           |     |  |            |   |        | (2,070     | )       |          |            | 734    |          |              |        | 295     |        |        |        | 394    |         |   |        | 400 |         |          |         | (247    | )
|                                                                                                                    |                                      |                                                     | Other Current Liabilities                                                           |   |        |        |      |           |     |   |            |   |        | 5,337      |         |          |            | 1,277  |          |              |        | 16,059  |        |        |        | (1,583 | )       |   |        | 241 |         |          |         | 21,331  |  
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|                                                                                                                    |                                      |                                                     | Net Cash Provided by (Used in) Operating Activities before
    Reorganization Items |   |        |       |      |           |     |  |            |   |        |           |         |          |            | 3,691  |          |              |        | 22,337  |        |        |        | (1,049 | )       |   |        |    |         |          |         | 24,979  |  
|                                                                                                                    |                                      |                                                     | Reorganization Items Paid                                                           |   |        |       |      |           |     |  |            |   |        |           |         |          |            |       |          |              |        | (12,503 | )      |        |        |       |         |   |        |    |         |          |         | (12,503 | )
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|                                                                                                                    |                                      |                                                     | Net Cash Provided by (Used in) Operating Activities                                 |   |        |       |      |           |     |  |            |   |        |           |         |          |            | 3,691  |          |              |        | 9,834   |        |        |        | (1,049 | )       |   |        |    |         |          |         | 12,476  |  
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|                                                                                                                    |                                      |                                                     | Net Cash Provided by Operating Activities of Discontinued Segment                   |   |        |       |      |           |     |  |            |   |        |           |         |          |            |       |          |              |        |        |        |        |        | 429    |         |   |        |    |         |          |         | 429     |  
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|                                                                                                                    |                                      |                                                     | Net Cash Provided by Operating Activities                                           |   |        |       |      |           |     |  |            |   |        |           |         |          |            | 3,691  |          |              |        | 9,834   |        |        |        | (620   | )       |   |        |    |         |          |         | 12,905  |  
|INVESTING ACTIVITIES                                                                                                |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |        |        |        |         |   |        |     |         |         
|                                                                                                                    | Property Additions                   |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         | (7,865   | )          |        |          | (3,593       | )      |         |        | (27    | )      |        |         |  |        |     |         | (11,485  | )      
|                                                                                                                    | Proceeds from Property Dispositions  |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         | 12,663   |            |        |          | 403          |        |         |        | 300    |        |        |         |  |        |     |         | 13,366   |        
|                                                                                                                    | Net Change in Restricted Cash        |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         |         |            |        |          |             |        |         |        | (270   | )      |        |         |  |        |     |         | (270     | )      
|                                                                                                                    | Investment in Vessel Leasing LLC     |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         | (2,500   | )          |        |          |             |        |         |        |       |        |        |         |  |        |     |         | (2,500   | )      
|                                                                                                                    | Other                                |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         | (28      | )          |        |          | (2,066       | )      |         |        | 58     |        |        |         |  |        |     |         | (2,036   | )      
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|                                                                                                                    |                                      | Net Cash Provided by (Used in) Investing Activities |                                                                                     |   |       |        |      |           |    |   |            |   |       |            |         |          | 2,270      |        |          |              | (5,256 | )       |        |        | 61     |        |         |   |       |     |         |          | (2,925  | )      
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|FINANCING ACTIVITIES                                                                                                |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |        |        |        |         |   |        |     |         |         
|                                                                                                                    | Long Term Debt Repaid                |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         | (401,046 | )          |        |          |             |        |         |        | (1,443 | )      |        |         |  |        |     |         | (402,489 | )      
|                                                                                                                    | Revolving Credit Facility Borrowings |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         | 170,710  |            |        |          |             |        |         |        |       |        |        |         |  |        |     |         | 170,710  |        
|                                                                                                                    | 2015 Senior Note Borrowings          |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         | 200,000  |            |        |          |             |        |         |        |       |        |        |         |  |        |     |         | 200,000  |        
|                                                                                                                    | Outstanding Checks                   |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         |         |            |        |          | (4,577       | )      |         |        |       |        |        |         |  |        |     |         | (4,577   | )      
|                                                                                                                    | Debt Costs                           |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         | (12,937  | )          |        |          |             |        |         |        |       |        |        |         |  |        |     |         | (12,937  | )      
|                                                                                                                    | Other                                |                                                     |                                                                                     |  |        |        |      |          |     |   |            |  |        |            |         | (37      | )          |        |          |             |        |         |        | (581   | )      |        |         |  |        |     |         | (618     | )      
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|                                                                                                                    |                                      | Net Cash Used in Financing Activities               |                                                                                     |   |       |        |      |           |    |   |            |   |       |            |         |          | (43,310    | )      |          |              | (4,577 | )       |        |        | (2,024 | )      |         |   |       |     |         |          | (49,911 | )      
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|(Decrease) Increase in Cash and Cash Equivalents                                                                    |                                      |                                                     |                                                                                    |   |        |        |     |           |     |   |           |   |        |            | (37,349 | )        |            |        | 1        |              |        |         | (2,583 | )      |        |        |        |   |        |     | (39,931 | )       
|Cash and Cash Equivalents at Beginning of Period                                                                    |                                      |                                                     |                                                                                    |   |        |        |     |           |     |   |           |   |        |            | 39,452  |          |            |        | 30       |              |        |         | 7,163  |        |        |        |        |   |        |     | 46,645  |         
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       
|                                                                                                                    |                                      | Cash and Cash Equivalents at End of Period          |                                                                                     | $ |       |        |      | $         |    |   |            | $ |       |            |         | $        | 2,103      |        |          | $            | 31     |         |        | $      | 4,580  |        |         | $ |       |     |         | $        | 6,714   |        
|                                                                                                                    |                                      |                                                     |                                                                                     |   |        |        |      |           |     |   |            |   |        |            |         |          |            |        |          |              |        |         |        |       

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Overview. This section provides a general description of
    the Company and its business, as well as developments the
    Company believes are important in understanding the results of
    operations and financial condition or in understanding
    anticipated future trends.                                                                                                                                                                                                                                                                                                       
|
| |  | Results of Operations. This section provides an analysis
    of the Companys results of operations for the quarter and
    six months ended June 30, 2006 compared to the results of
    operations for the quarter and six months ended June 30,
    2005.                                                                                                                                                                                                                                                                                                                              
|
| |  | Liquidity and Capital Resources. This section provides an
    overview of the Companys sources of liquidity, a
    discussion of the Companys debt that existed as of
    June 30, 2006 and an analysis of the Companys cash
    flows for the six months ended June 30, 2006.                                                                                                                                                                                                                                                                                                         
|
| |  | Changes in Accounting Standards. This section discusses
    certain changes in accounting and reporting standards applicable
    to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Critical Accounting Policies. This section discusses any
    significant changes in accounting policies that are considered
    important to the Companys financial condition and results
    of operations, require significant judgment and require
    estimates on the part of management in application from those
    previously described in the Companys filing on
    Form 10-K for the
    year ended December 31, 2005. The Companys
    significant accounting policies include those considered to be
    critical accounting policies.                                   
|
| |  | Quantitative and Qualitative Disclosures about Market
    Risk. This section discusses our analysis of significant
    changes in exposure to potential loss arising from adverse
    changes in fuel prices, interest rates and foreign currency
    exchange rates in the period since our filing on
    Form 10-K for the
    fiscal year ended December 31, 2005.                                                                                                                                                                                                                     
|
| |  | Risk Factors and Caution Concerning Forward-Looking
    Statements. This section references important factors that
    could adversely affect the operations, business or financial
    results of the Company or its business segments and the use of
    forward-looking information appearing in this filing on
    Form 10-Q,
    including in MD&A and the condensed consolidated financial
    statements. Such information is based on managements
    current expectations about future events, which are inherently
    susceptible to uncertainty and changes in circumstances.

OVERVIEW




| |             
| | ------------
| | Our Business



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RiverTrac












| |             
| | ------------
| | The Industry

Transportation Services:






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| |               
| | --------------
| | Manufacturing:





| |                                
| | -------------------------------
| | Consolidated Financial Overview

year-to


year-to


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year-to


Domestic Transportation Services:




year-to








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| |                         
| | ------------------------
| | Key operating statistics

|                                                  |  |               |            |                   |              |  |       |                |  |   |                   |  |  |  |       |   
|------------------------------------------------- |  | ------------- | ---------- | ----------------- | ------------ |  | ----- | -------------- |  | - | ----------------- |  |  |  | ----- | --
|                                                  |  |               |            | % Change to Prior |              |  |       |                | 
|                                                  |  | Quarter       |            |                   | Year Quarter |  |       | Six Months     |  |   | % Change to Prior | 
|                                                  |  | Ended         |            |                   | Increase     |  |       | Ended June 30, |  |   | Year YTD Increase | 
|                                                  |  | June 30, 2006 |            |                   | (Decrease)   |  |       | 2006           |  |   | (Decrease)        | 
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 
|Affreightment Ton Miles (in thousands):           |  |               |            |                   |              |  |       |                |  |   |                   |  |  |  |       |   
|Total Dry                                         |  |               | 9,367,282  |                   |              |  | (2.4  | )%             |  |   | 18,503,756        |  |  |  | 1.3   | % 
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 
|Ton-miles per average dry affreightment barge     |  |               | 3,345      |                   |              |  | (1.2  | )%             |  |   | 6,626             |  |  |  | 2.4   | % 
|Liquid barge affreightment:                       |  |               |            |                   |              |  |       |                |  |   |                   |  |  |  |       |   
|Total Liquid                                      |  |               | 927,843    |                   |              |  | (16.4 | )%             |  |   | 1,914,383         |  |  |  | (11.7 | )%
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 
|Ton-miles per average liquid affreightment barge  |  |               | 3,654      |                   |              |  | (0.1  | )%             |  |   | 7,237             |  |  |  | 2.1   | % 
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 
|Total ton miles                                   |  |               | 10,295,125 |                   |              |  | (3.8  | )%             |  |   | 20,418,139        |  |  |  | (0.1  | )%
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 
|Ton-miles per average affreightment barge         |  |               | 3,373      |                   |              |  | (1.1  | )%             |  |   | 6,683             |  |  |  | 2.3   | % 
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 
|Rates per ton mile/ Revenues per average barge:   |  |               |            |                   |              |  |       |                |  |   |                   |  |  |  |       |   
|Increase in dry rate per ton mile                 |  |               |            |                   |              |  | 31.1  | %              |  |   |                   |  |  |  | 30.6  | % 
|Increase in fuel neutral dry rate per ton mile    |  |               |            |                   |              |  | 25.9  | %              |  |   |                   |  |  |  | 25.0  | % 
|Increase in liquid rate per ton mile              |  |               |            |                   |              |  | 21.6  | %              |  |   |                   |  |  |  | 22.4  | % 
|Increase in fuel neutral liquid rate per ton mile |  |               |            |                   |              |  | 12.7  | %              |  |   |                   |  |  |  | 11.9  | % 
|Overall rate per ton mile                         |  | $             | 14.23      |                   |              |  | 28.0  | %              |  | $ | 14.07             |  |  |  | 27.9  | % 
|Overall fuel neutral rate per ton mile            |  | $             | 13.59      |                   |              |  | 22.3  | %              |  | $ | 13.37             |  |  |  | 20.8  | % 
|Revenue per average barge operated                |  | $             | 57,400     |                   |              |  | 28.3  | %              |  | $ | 111,004           |  |  |  | 31.1  | % 
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 
|Fuel Price and Volume Data:                       |  |               |            |                   |              |  |       |                |  |   |                   |  |  |  |       |   
|Fuel price per gallon                             |  | $             | 2.02       |                   |              |  | 32.2  | %              |  | $ | 1.93              |  |  |  | 33.5  | % 
|Fuel Gallons                                      |  |               | 17,900     |                   |              |  | (1.4  | )%             |  |   | 39,434            |  |  |  | 1.8   | % 
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 
|Revenue data (in thousands):                      |  |               |            |                   |              |  |       |                |  |   |                   |  |  |  |       |   
|Affreightment revenue                             |  | $             | 146,453    |                   |              |  | 23.1  | %              |  | $ | 287,209           |  |  |  | 27.7  | % 
|Towing                                            |  |               | 12,018     |                   |              |  | 50.1  | %              |  |   | 21,999            |  |  |  | 45.4  | % 
|Charter and Day rate                              |  |               | 9,725      |                   |              |  | 95.4  | %              |  |   | 17,833            |  |  |  | 81.2  | % 
|Demurrage                                         |  |               | 10,180     |                   |              |  | 31.5  | %              |  |   | 19,009            |  |  |  | 30.1  | % 
|Other                                             |  |               | 4,831      |                   |              |  | 28.3  | %              |  |   | 7,388             |  |  |  | (9.6  | )%
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 
|Non-affreightment revenue                         |  |               | 36,754     |                   |              |  | 50.1  | %              |  |   | 66,229            |  |  |  | 38.7  | % 
|Total domestic transportation revenue             |  | $             | 183,207    |                   |              |  | 27.7  | %              |  | $ | 353,438           |  |  |  | 29.7  | % 
|                                                  |  |               |            |                   |              |  |       |                |  |   |                   | 

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| |                    
| | -------------------
| | Barge Fleet Changes

|                                                      |  |     |       |   |         |  |     |       |  |  |       |  
|----------------------------------------------------- |  | --- | ----- | - | ------- |  | --- | ----- |  |  | ----- | -
|Domestic Barges  Current Quarter                     |  | Dry |       |   | Tankers |  |     | Total | 
|                                                      |  |     |       |   |         |  |     |       | 
|Barges operated as of the end of the 1st quarter 2006 |  |     | 2,789 |   |         |  | 385 |       |  |  | 3,174 |  
|Retired                                               |  |     | (13   | ) |         |  | (10 | )     |  |  | (23   | )
|New builds                                            |  |     | 39    |   |         |  | 1   |       |  |  | 40    |  
|Change in number of barges leased                     |  |     |      |   |         |  | 2   |       |  |  | 2     |  
|                                                      |  |     |       |   |         |  |     |       | 
|Barges operated as of the end of the 2nd quarter 2006 |  |     | 2,815 |   |         |  | 378 |       |  |  | 3,193 |  
|                                                      |  |     |       |   |         |  |     |       | 

|                                                      |  |     |       |   |         |  |     |       |  |  |       |  
|----------------------------------------------------- |  | --- | ----- | - | ------- |  | --- | ----- |  |  | ----- | -
|Domestic Barges  YTD                                 |  | Dry |       |   | Tankers |  |     | Total | 
|                                                      |  |     |       |   |         |  |     |       | 
|Barges operated as of the end of 2005                 |  |     | 2,803 |   |         |  | 371 |       |  |  | 3,174 |  
|Retired                                               |  |     | (33   | ) |         |  | (11 | )     |  |  | (44   | )
|New builds                                            |  |     | 50    |   |         |  | 16  |       |  |  | 66    |  
|Change in number of barges leased                     |  |     | (5    | ) |         |  | 2   |       |  |  | (3    | )
|                                                      |  |     |       |   |         |  |     |       | 
|Barges operated as of the end of the 2nd quarter 2006 |  |     | 2,815 |   |         |  | 378 |       |  |  | 3,193 |  
|                                                      |  |     |       |   |         |  |     |       | 





| |                                                          
| | ---------------------------------------------------------
| | Owned Boat Counts and Average Age by Horsepower
    Class

|                       |  |        |     |         |     |  |      | 
|---------------------- |  | ------ | --- | ------- | --- |  | ---- | 
|                       |  |        |     | Average |    
|Horsepower class       |  | Number |     |         | Age | 
|                       |  |        |     |         |     | 
|Less than 2000         |  |        | 46  |         |     |  | 29.3 | 
|Less than 4000         |  |        | 8   |         |     |  | 36.8 | 
|Less than 5500         |  |        | 19  |         |     |  | 34.2 | 
|Less than 7000         |  |        | 38  |         |     |  | 27.8 | 
|Over 7000              |  |        | 11  |         |     |  | 32.0 | 
|                       |  |        |     |         |     | 
|Total/ overall average |  |        | 122 |         |     |  | 30.3 | 



Domestic Transportation Services (continued):






30



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##### Table of Contents







Manufacturing:




| |                                                                   
| | ------------------------------------------------------------------
| | Manufacturing segment units produced for sale or internal
    use:

|                            |  |               |    |  |                  |  |    |          |  |  |          |  |  |  |    | 
|--------------------------- |  | ------------- | -- |  | ---------------- |  | -- | -------- |  |  | -------- |  |  |  | -- | 
|                            |  | Quarter Ended |    |  | Six Months Ended | 
|                            |  |               |    |  |                  | 
|                            |  | June 30,      |    |  | June 30,         |  |    | June 30, |  |  | June 30, | 
|                            |  | 2006          |    |  | 2005             |  |    | 2006     |  |  | 2005     | 
|                            |  |               |    |  |                  |  |    |          |  |  |          | 
|External sales:             |  |               |    |  |                  |  |    |          |  |  |          |  |  |  |    | 
|Liquid tank barges          |  |               | 8  |  |                  |  | 18 |          |  |  | 10       |  |  |  | 29 | 
|Ocean tank barges           |  |               | 0  |  |                  |  | 1  |          |  |  | 0        |  |  |  | 1  | 
|Dry cargo barges            |  |               | 25 |  |                  |  | 0  |          |  |  | 77       |  |  |  | 0  | 
|                            |  |               |    |  |                  |  |    |          |  |  |          | 
|Total external units sold   |  |               | 33 |  |                  |  | 19 |          |  |  | 87       |  |  |  | 30 | 
|                            |  |               |    |  |                  |  |    |          |  |  |          | 
|Internal into production:   |  |               |    |  |                  |  |    |          |  |  |          |  |  |  |    | 
|Liquid tank barges          |  |               | 1  |  |                  |  | 2  |          |  |  | 16       |  |  |  | 3  | 
|Dry cargo barges            |  |               | 39 |  |                  |  | 0  |          |  |  | 50       |  |  |  | 0  | 
|                            |  |               |    |  |                  |  |    |          |  |  |          | 
|Total units into production |  |               | 40 |  |                  |  | 2  |          |  |  | 66       |  |  |  | 3  | 
|                            |  |               |    |  |                  |  |    |          |  |  |          | 
|Total units produced        |  |               | 73 |  |                  |  | 21 |          |  |  | 153      |  |  |  | 33 | 
|                            |  |               |    |  |                  |  |    |          |  |  |          | 



International Transportation Services:


31



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| |                                                                                
| | -------------------------------------------------------------------------------
| | Consolidated Financial Overview  Non-GAAP
    Financial Measure Reconciliation

AMERICAN COMMERCIAL LINES INC.


NET INCOME TO EBITDA RECONCILIATION


|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |        |   |   |        |        |  
|---------------------------------------------- | ----------------------------- | ---------------------- | ------ | ------ | ---------------- | - | ------ | -------- | - | - | -------- | ------ | - | - | ------ | ------ | -
|                                               |                               | Quarter Ended          |        |        | Six Months Ended |  
|                                               |                               |                        |        |        |                  |  
|                                               |                               | June 30,               |        |        | June 30,         |   |        | June 30, |   |   | June 30, |       
|                                               |                               | 2006                   |        |        | 2005             |   |        | 2006     |   |   | 2005     |       
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       
|                                               |                               | (Unaudited)            |       
|                                               |                               | (Dollars in thousands) |       
|CONSOLIDATED NET INCOME (LOSS)                 |                               | $                      | 17,704 |        |                  | $ | 6,033  |          |   | $ | 28,852   |        |   | $ | (295   | )     
|                                               | Interest Income               |                        |        | (259   | )                |   |        | (216     | ) |   |          | (408   | ) |   |        | (458   | )
|                                               | Interest Expense              |                        |        | 4,982  |                  |   |        | 7,392    |   |   |          | 9,758  |   |   |        | 17,754 |  
|                                               | Depreciation and Amortization |                        |        | 12,401 |                  |   |        | 12,223   |   |   |          | 24,483 |   |   |        | 24,502 |  
|                                               | Taxes                         |                        |        | 10,294 |                  |   |        | 2,767    |   |   |          | 17,179 |   |   |        | 401    |  
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       
|CONSOLIDATED EBITDA                            |                               | $                      | 45,122 |        |                  | $ | 28,199 |          |   | $ | 79,864   |        |   | $ | 41,904 |       
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       
|DOMESTIC TRANSPORTATION NET INCOME (LOSS)      |                               | $                      | 15,272 |        |                  | $ | 2,746  |          |   | $ | 25,554   |        |   | $ | (828   | )     
|                                               | Interest Income               |                        |        | (6     | )                |   |        | (85      | ) |   |          | (20    | ) |   |        | (200   | )
|                                               | Interest Expense              |                        |        | 4,982  |                  |   |        | 7,392    |   |   |          | 9,758  |   |   |        | 17,754 |  
|                                               | Depreciation and Amortization |                        |        | 11,160 |                  |   |        | 11,035   |   |   |          | 22,006 |   |   |        | 22,124 |  
|                                               | Taxes                         |                        |        | 9,909  |                  |   |        | 2,787    |   |   |          | 17,950 |   |   |        | 258    |  
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       
|DOMESTIC TRANSPORTATION EBITDA                 |                               | $                      | 41,317 |        |                  | $ | 23,875 |          |   | $ | 75,248   |        |   | $ | 39,108 |       
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       
|MANUFACTURING NET INCOME                       |                               | $                      | 5,518  |        |                  | $ | 2,089  |          |   | $ | 12,534   |        |   | $ | 1,758  |       
|                                               | Interest Income               |                        |        |       |                  |   |        |         |   |   |          |       |   |   |        |       |  
|                                               | Interest Expense              |                        |        |       |                  |   |        |         |   |   |          |       |   |   |        |       |  
|                                               | Depreciation and Amortization |                        |        | 460    |                  |   |        | 443      |   |   |          | 899    |   |   |        | 882    |  
|                                               | Taxes                         |                        |        |       |                  |   |        |         |   |   |          |       |   |   |        |       |  
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       
|TOTAL MANUFACTURING EBITDA                     |                               |                        | 5,978  |        |                  |   | 2,532  |          |   |   | 13,433   |        |   |   | 2,640  |       
|                                               | Intersegment Profit           |                        |        | (4,078 | )                |   |        | (23      | ) |   |          | (8,725 | ) |   |        | (23    | )
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       
|EXTERNAL MANUFACTURING EBITDA                  |                               | $                      | 1,900  |        |                  | $ | 2,509  |          |   | $ | 4,708    |        |   | $ | 2,617  |       
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       
|INTERNATIONAL TRANSPORTATION NET INCOME (LOSS) |                               | $                      | 717    |        |                  | $ | 157    |          |   | $ | (899     | )      |   | $ | (2,763 | )     
|                                               | Interest Income               |                        |        | (252   | )                |   |        | (132     | ) |   |          | (388   | ) |   |        | (259   | )
|                                               | Interest Expense              |                        |        |       |                  |   |        |         |   |   |          |       |   |   |        |       |  
|                                               | Depreciation and Amortization |                        |        | 378    |                  |   |        | 385      |   |   |          | 755    |   |   |        | 774    |  
|                                               | Taxes                         |                        |        | 375    |                  |   |        | (87      | ) |   |          | (781   | ) |   |        | (30    | )
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       
|INTERNATIONAL TRANSPORTATION EBITDA            |                               | $                      | 1,218  |        |                  | $ | 323    |          |   | $ | (1,313   | )      |   | $ | (2,278 | )     
|                                               |                               |                        |        |        |                  |   |        |          |   |   |          |       





32



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| |        
| | -------
| | Outlook

Domestic Transportation Services:












year-to




33



---



##### Table of Contents



year-to


year-to




Manufacturing:


year-to




34



---



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International Transportation:


35



---



##### Table of Contents



RESULTS OF OPERATIONS


AMERICAN COMMERCIAL LINES INC. OPERATING RESULTS BY BUSINESS
SEGMENT


Quarter Ended June 30, 2006 as compared with Quarter
Ended June 30, 2005


|                                       |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |       |    |  |  |       |   
|-------------------------------------- |  | ----------------------------------------- | ------- | - | -------- | - | ------------------------- | -------- |  | ----------- | ------- | - | ----------- | ---- | ----- | -- |  |  | ----- | --
|                                       |  | Quarter Ended                             |         |   |          |   | % of Consolidated Revenue |         
|                                       |  |                                           |         |   |          |   |                           |         
|                                       |  | June 30,                                  |         |   | June 30, |   |                           |          |  | 2nd Quarter |         |   | 2nd Quarter |     
|                                       |  | 2006                                      |         |   | 2005     |   |                           | Variance |  |             | 2006    |   |             | 2005 |      
|                                       |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |      
|                                       |  | (Unaudited)                               |        
|                                       |  | (Dollars in thousands except where noted) |        
|REVENUE                                |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |       |    |  |  |       |   
|Domestic Transportation                |  | $                                         | 183,207 |   |          | $ | 143,483                   |          |  | $           | 39,724  |   |             |      | 83.9  | %  |  |  | 78.7  | % 
|International Transportation           |  |                                           | 5,069   |   |          |   | 4,036                     |          |  |             | 1,033   |   |             |      | 2.3   | %  |  |  | 2.2   | % 
|Manufacturing (external and internal)  |  |                                           | 48,142  |   |          |   | 34,612                    |          |  |             | 13,530  |   |             |      | 22.0  | %  |  |  | 19.0  | % 
|Other                                  |  |                                           | 2,170   |   |          |   | 2,917                     |          |  |             | (747    | ) |             |      | 1.0   | %  |  |  | 1.6   | % 
|Intersegment manufacturing elimination |  |                                           | (20,141 | ) |          |   | (2,663                    | )        |  |             | (17,478 | ) |             |      | (9.2  | )% |  |  | (1.5  | )%
|                                       |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |      
|Consolidated Revenue                   |  |                                           | 218,447 |   |          |   | 182,385                   |          |  |             | 36,062  |   |             |      | 100.0 | %  |  |  | 100.0 | % 
|OPERATING EXPENSE                      |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |       |    |  |  |       |   
|Domestic Transportation                |  |                                           | 154,038 |   |          |   | 134,869                   |          |  |             | (19,169 | ) |             |      |       |    |  |  |       |   
|International Transportation           |  |                                           | 3,925   |   |          |   | 4,081                     |          |  |             | 156     |   |             |      |       |    |  |  |       |   
|Manufacturing (external and internal)  |  |                                           | 42,627  |   |          |   | 32,565                    |          |  |             | (10,062 | ) |             |      |       |    |  |  |       |   
|Other                                  |  |                                           | 1,860   |   |          |   | 1,974                     |          |  |             | 114     |   |             |      |       |    |  |  |       |   
|Intersegment manufacturing elimination |  |                                           | (16,063 | ) |          |   | (2,640                    | )        |  |             | 13,423  |   |             |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |      
|Consolidated Operating Expense         |  |                                           | 186,387 |   |          |   | 170,849                   |          |  |             | (15,538 | ) |             |      | 85.3  | %  |  |  | 93.7  | % 
|OPERATING INCOME                       |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |       |    |  |  |       |   
|Domestic Transportation                |  |                                           | 29,169  |   |          |   | 8,614                     |          |  |             | 20,555  |   |             |      |       |    |  |  |       |   
|International Transportation           |  |                                           | 1,144   |   |          |   | (45                       | )        |  |             | 1,189   |   |             |      |       |    |  |  |       |   
|Manufacturing (external and internal)  |  |                                           | 5,515   |   |          |   | 2,047                     |          |  |             | 3,468   |   |             |      |       |    |  |  |       |   
|Other                                  |  |                                           | 310     |   |          |   | 943                       |          |  |             | (633    | ) |             |      |       |    |  |  |       |   
|Intersegment manufacturing elimination |  |                                           | (4,078  | ) |          |   | (23                       | )        |  |             | (4,055  | ) |             |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |      
|Consolidated Operating Income          |  |                                           | 32,060  |   |          |   | 11,536                    |          |  |             | 20,524  |   |             |      | 14.7  | %  |  |  | 6.3   | % 
|Interest Expense                       |  |                                           | 4,982   |   |          |   | 7,392                     |          |  |             | 2,410   |   |             |      |       |    |  |  |       |   
|Other Income                           |  |                                           | 949     |   |          |   | 4,471                     |          |  |             | 3,522   |   |             |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |      
|Income Before Income Taxes             |  |                                           | 28,027  |   |          |   | 8,615                     |          |  |             | 19,412  |   |             |      |       |    |  |  |       |   
|Income Taxes                           |  |                                           | 10,284  |   |          |   | 2,700                     |          |  |             | (7,584  | ) |             |      |       |    |  |  |       |   
|Discontinued Operations                |  |                                           | (39     | ) |          |   | 118                       |          |  |             | (157    | ) |             |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |      
|Net Income                             |  | $                                         | 17,704  |   |          | $ | 6,033                     |          |  | $           | 11,671  |   |             |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |             |         |   |             |      |      

36



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| |                                                                          
| | -------------------------------------------------------------------------
| | Quarter ended June 30, 2006 comparison to quarter
    ended June 30, 2005

Revenue.








start-up


Operating Expense.






Operating Income.




37



---



##### Table of Contents







Interest Expense.


Other Income.


Income Tax Expense.


Net Income (Loss).


38



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##### Table of Contents



AMERICAN COMMERCIAL LINES INC. OPERATING RESULTS BY BUSINESS
SEGMENT


Six Months Ended June 30, 2006 as compared with Six
Months Ended June 30, 2005


|                                       |  |                                           |         |   |          |   |                           |          |  |            |         |   |            |      |       |    |  |  |       |   
|-------------------------------------- |  | ----------------------------------------- | ------- | - | -------- | - | ------------------------- | -------- |  | ---------- | ------- | - | ---------- | ---- | ----- | -- |  |  | ----- | --
|                                       |  | Six Months Ended                          |         |   |          |   | % of Consolidated Revenue |         
|                                       |  |                                           |         |   |          |   |                           |         
|                                       |  | June 30,                                  |         |   | June 30, |   |                           |          |  | Six Months |         |   | Six Months |     
|                                       |  | 2006                                      |         |   | 2005     |   |                           | Variance |  |            | 2006    |   |            | 2005 |      
|                                       |  |                                           |         |   |          |   |                           |          |  |            |         |   |            |      |      
|                                       |  | (Unaudited)                               |        
|                                       |  | (Dollars in thousands except where noted) |        
|REVENUE                                |  |                                           |         |   |          |   |                           |          |  |            |         |   |            |      |       |    |  |  |       |   
|Domestic Transportation                |  | $                                         | 353,438 |   |          | $ | 272,592                   |          |  | $          | 80,846  |   |            |      | 84.8  | %  |  |  | 83.2  | % 
|International Transportation           |  |                                           | 5,100   |   |          |   | 4,155                     |          |  |            | 945     |   |            |      | 1.2   | %  |  |  | 1.3   | % 
|Manufacturing (external and internal)  |  |                                           | 98,661  |   |          |   | 50,901                    |          |  |            | 47,760  |   |            |      | 23.7  | %  |  |  | 15.5  | % 
|Other                                  |  |                                           | 4,363   |   |          |   | 4,972                     |          |  |            | (609    | ) |            |      | 1.1   | %  |  |  | 1.5   | % 
|Intersegment manufacturing elimination |  |                                           | (44,932 | ) |          |   | (4,827                    | )        |  |            | (40,105 | ) |            |      | (10.8 | )% |  |  | (1.5  | )%
|                                       |  |                                           |         |   |          |   |                           |          |  |           
|Consolidated Revenue                   |  |                                           | 416,630 |   |          |   | 327,793                   |          |  |            | 88,837  |   |            |      | 100.0 | %  |  |  | 100.0 | % 
|OPERATING EXPENSE                      |  |                                           |         |   |          |   |                           |          |  |            |         |   |            |      |       |    |  |  |       |   
|Domestic Transportation                |  |                                           | 302,380 |   |          |   | 260,221                   |          |  |            | (42,159 | ) |            |      |       |    |  |  |       |   
|International Transportation           |  |                                           | 7,112   |   |          |   | 7,982                     |          |  |            | 870     |   |            |      |       |    |  |  |       |   
|Manufacturing (external and internal)  |  |                                           | 86,128  |   |          |   | 49,183                    |          |  |            | (36,945 | ) |            |      |       |    |  |  |       |   
|Other                                  |  |                                           | 3,887   |   |          |   | 3,804                     |          |  |            | (83     | ) |            |      |       |    |  |  |       |   
|Intersegment manufacturing elimination |  |                                           | (36,207 | ) |          |   | (4,804                    | )        |  |            | 31,403  |   |            |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |           
|Consolidated Operating Expense         |  |                                           | 363,300 |   |          |   | 316,386                   |          |  |            | (46,914 | ) |            |      | 87.2  | %  |  |  | 96.5  | % 
|OPERATING INCOME                       |  |                                           |         |   |          |   |                           |          |  |            |         |   |            |      |       |    |  |  |       |   
|Domestic Transportation                |  |                                           | 51,058  |   |          |   | 12,371                    |          |  |            | 38,687  |   |            |      |       |    |  |  |       |   
|International Transportation           |  |                                           | (2,012  | ) |          |   | (3,827                    | )        |  |            | 1,815   |   |            |      |       |    |  |  |       |   
|Manufacturing (external and internal)  |  |                                           | 12,533  |   |          |   | 1,718                     |          |  |            | 10,815  |   |            |      |       |    |  |  |       |   
|Other                                  |  |                                           | 476     |   |          |   | 1,168                     |          |  |            | (692    | ) |            |      |       |    |  |  |       |   
|Intersegment manufacturing elimination |  |                                           | (8,725  | ) |          |   | (23                       | )        |  |            | (8,702  | ) |            |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |           
|Consolidated Operating Income          |  |                                           | 53,330  |   |          |   | 11,407                    |          |  |            | 41,923  |   |            |      | 12.8  | %  |  |  | 3.5   | % 
|Interest Expense                       |  |                                           | 9,758   |   |          |   | 17,754                    |          |  |            | 7,996   |   |            |      |       |    |  |  |       |   
|Other Income                           |  |                                           | 2,574   |   |          |   | 5,889                     |          |  |            | 3,315   |   |            |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |            |         |  
|Income before Income Taxes             |  |                                           | 46,146  |   |          |   | (458                      | )        |  |            | 46,604  |   |            |      |       |    |  |  |       |   
|Income Taxes                           |  |                                           | 17,169  |   |          |   | 228                       |          |  |            | (16,941 | ) |            |      |       |    |  |  |       |   
|Discontinued Operations                |  |                                           | (125    | ) |          |   | 391                       |          |  |            | (516    | ) |            |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |            |         |  
|Net Income                             |  | $                                         | 28,852  |   |          | $ | (295                      | )        |  | $          | 29,147  |   |            |      |       |    |  |  |       |   
|                                       |  |                                           |         |   |          |   |                           |          |  |            |         |  

39



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| |                                                                                
| | -------------------------------------------------------------------------------
| | Six months ended June 30, 2006 comparison to six
    months ended June 30, 2005

Revenue.








start-up


Operating Expense.






40



---



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Operating Income.






Interest Expense.


Other Income.


Income Tax Expense.


Net Income (Loss).


LIQUIDITY AND CAPITAL RESOURCES








41



---



##### Table of Contents







| |                 
| | ----------------
| | Our Indebtedness





| |                                             
| | --------------------------------------------
| | Net Cash, Capital Expenditures and Cash Flow













42



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CHANGES IN ACCOUNTING STANDARDS












43



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CRITICAL ACCOUNTING POLICIES




10-K


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK






| |                
| | ---------------
| | Fuel Price Risk





| |                              
| | -----------------------------
| | Interest Rate and Other Risks





| |                                     
| | ------------------------------------
| | Foreign Currency Exchange Rate Risks



44



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RISK FACTORS AND FORWARD-LOOKING STATEMENTS











|        |                                                               
|------- | --------------------------------------------------------------
|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK








|        |                        
|------- | -----------------------
|ITEM 4. | CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. 13a-15(b)).


Changes in Internal Control over Financial Reporting. 13a-15(f) 15d-15(f)





PART II  OTHER INFORMATION







|        |                  
|------- | -----------------
|ITEM 1. | LEGAL PROCEEDINGS



45



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Current Legal Proceeding.


Miller Appeal.












Environmental Litigation.


46



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SBA Shipyard, Jennings, Louisiana. SBA Shipyard is a
    remediation site that was operated by a third-party barge
    cleaning service provider utilized by National Marine, Inc., an
    entity whose assets were combined with ours in 1998. A
    potentially responsible party group of barge operators, which
    includes us, has been formed to coordinate final cleanup of this
    site. The removal action was completed pursuant to a work plan
    accepted by the U.S. Environmental Protection Agency
    (U.S. EPA) and on February 24, 2006, the
    U.S. EPA approved the final work plan for the site. As of
    March 31, 2006 we had expended approximately $710,000 in
    connection with this site. No additional contributions are
    required or anticipated at this time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | EPS, Marietta, Ohio. EPS, Inc., a wholly owned subsidiary
    of Vectura Group Inc., is the owner of Connex Pipe Systems
    closed solid waste landfill located in Marietta, Ohio
    (Connex). We assumed liability for the monitoring
    and potential cleanup of Connex (up to $30,000 per year)
    pursuant to our combination with Vectura Group in 1998. In 1986,
    Connex was subject to an Ohio consent judgment (Consent
    Judgment) under which it agreed to remediate and monitor
    the closed landfill for a period of three years. Connex complied
    with the Consent Judgment, and in 1994 the Ohio Environmental
    Protection Agency (Ohio EPA) issued a letter
    confirming Connexs compliance. In 1998, the Ohio EPA
    changed its regulations with respect to monitoring requirements
    to require longer monitoring periods for closed sites and sought
    to apply those new regulations to Connex retroactively. In
    November 1998, the Ohio EPA issued finalized guidance
    (Final Guidance) regarding retroactive application
    of the Ohio EPA requirements. We have requested written
    confirmation from the Ohio EPA that the new regulations do not
    retroactively apply and that our monitoring responsibilities
    with respect to the property have been fulfilled. Currently, we
    coordinate inspections of the property four times a year for
    integrity and maintenance of the cap with minimal associated
    cost.
|
| |  | Third Site, Zionsville, Indiana. Jeffboat LLC has been
    named a potentially responsible party at Third Site by the
    U.S. EPA. Third Site was utilized for the storage of
    hazardous substances and wastes during the remediation of the
    Environmental Conservation and Chemical Corporation and
    Northside Sanitary Landfill (ECC/ NSL) in
    Zionsville, Indiana. As a potentially responsible party at
    ECC/NSL, Jeffboat is responsible for 3.6% of the total volume of
    materials to be remediated at Third Site as well. Remediation
    activities are ongoing at Third Site, and, as of June 30,
    2006, Jeffboat had contributed approximately $230,000 toward
    that remediation. No additional contributions are required or
    anticipated at this time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Barge Cleaning Facilities, Port Arthur, Texas. American
    Commercial Barge Line LLC received notices from the
    U.S. EPA in 1999 and 2004 that it is a potentially
    responsible party at the State Marine of Port Arthur and the
    Palmer Barge Line Superfund Sites in Port Arthur, Texas with
    respect to approximately 50 barges that were cleaned by State
    Marine and approximately five barges that were cleaned by Palmer
    Barge Line for us in the early 1980s. The U.S. EPA has made
    no assessments with respect to these sites.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Tiger Shipyard, Baton Rouge, Louisiana. At the direction
    of the State of Louisiana, we have participated in a cleanup of
    a former barge cleaning operation at this site involving the
    cleaning of approximately seven barges and the disposal of barge
    wash water. As of June 30, 2006, we had incurred costs of
    approximately $6.7 million in connection with this site.
    The barge cleaning activities are complete.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | PHI/ Harahan Site, Harahan, Louisiana. We have been
    contacted by the State of Louisiana in connection with the
    investigation and cleanup of diesel and/or jet fuel in soil at
    this site. We believe contamination may have been caused by a
    tenant on the property and have so notified the regulatory
    authorities. On March 22, 2005, we submitted an
    investigation work plan for approval by the State of Louisiana.
    We do not know what level of fuel may be discovered in this
    investigation or whether                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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| |  |                                                                                                                           
| |  | --------------------------------------------------------------------------------------------------------------------------
| |  | cleanup will be required. We have paid approximately $20,000 in
    consultant fees related to investigation at this site.






|         |             
|-------- | ------------
|ITEM 1A. | RISK FACTORS



RISKS RELATED TO OUR INDUSTRY




| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | Freight transportation rates for the Inland Waterways
    fluctuate from time to time and may decrease.





| |                                                                               
| | ------------------------------------------------------------------------------
| | An oversupply of barging capacity may lead to reductions
    in freight rates.





| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | Yields from North American and worldwide grain harvests
    could materially affect demand for our barging services.





| |                                                                                                          
| | ---------------------------------------------------------------------------------------------------------
| | Diminishing demand for new barge construction may lead to
    a reduction in sales prices for new barges.



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| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | Higher fuel prices, if not recouped from our customers,
    could dramatically increase operating expenses and adversely
    affect profitability.





| |                                                            
| | -----------------------------------------------------------
| | We are subject to adverse weather and river
    conditions.





| |                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------
| | Seasonal fluctuations in industry demand could adversely
    affect our operating results, cash flow and working capital
    requirements.





| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | The aging infrastructure on the Inland Waterways may lead
    to increased costs and disruptions in our operations.





| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | The inland barge transportation industry is highly
    competitive; increased competition could adversely affect
    us.



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| |                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Global trade agreements, tariffs and subsidies could
    decrease the demand for imported and exported goods, adversely
    affecting the flow of import and export tonnage through the Port
    of New Orleans and the demand for barging services.





| |                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our failure to comply with domestic or international
    government regulations affecting the domestic or foreign barging
    industries, or changes in these regulations, may cause us to
    incur significant expenses or affect our ability to
    operate.





| |                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Jones Act restricts foreign ownership of our stock,
    and the repeal, suspension or substantial amendment of the Jones
    Act could increase competition on the Inland Waterways and have
    a material adverse effect on our business.



U.S.-citizen


RISKS RELATED TO OUR BUSINESS




| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | Our aging fleet of dry cargo barges may lead to increased
    costs and disruptions in our operations.



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| |                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------
| | We may not be successful in our plans to upgrade our
    production lines in our shipyard and realize increased levels of
    efficiency.





| |                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our cash flows and borrowing facilities may not be
    adequate for our additional capital needs and, if we incur
    additional borrowings, our future cash flow and capital
    resources may not be sufficient for payments of interest and
    principal of our substantial indebtedness.





| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | There could be adverse consequences if the pending appeal
    of the confirmation of our Plan of Reorganization is
    successful.





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| |                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------
| | Our barging services outside the United States subject us
    to changes in foreign economic and political conditions.





| |                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As part of the Companys growth strategy, we may make
    selective acquisitions the integration and consolidation of
    which may disrupt operations and could negatively impact our
    business including our margins.



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| |                                                                      
| | ---------------------------------------------------------------------
| | A disposition of our Venezuelan operations would affect
    earnings.





| |                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The loss of one or more key customers, or material
    nonpayment or nonperformance by one or more of our key
    customers, would have a material adverse effect on our revenue
    and profitability.





| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | A major accident or casualty loss at any of our facilities
    could significantly reduce production.





| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | Our employees are covered by federal maritime laws that
    may subject us to job-related claims in addition to those
    provided by state laws.





| |                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have experienced significant work stoppages by union
    employees in the past, and future work stoppages may disrupt our
    services and adversely affect our operations.



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(Sintra-ACBL),




| |                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------
| | The loss of key personnel, including highly skilled and
    licensed vessel personnel, could adversely affect our
    business.





| |                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------
| | Failure to comply with environmental, health and safety
    regulations could result in substantial penalties and changes to
    our operations.











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| |                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are subject to, and may in the future be subject to,
    disputes, or legal or other proceedings that could involve
    significant expenditures by us.





| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Investor confidence and the market price of our common
    stock may be adversely impacted if we are unable to comply with
    Section 404 of the Sarbanes-Oxley Act of 2002.

10-K







|        |                                                                
|------- | ---------------------------------------------------------------
|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS








|        |                                
|------- | -------------------------------
|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES








|        |                                                    
|------- | ---------------------------------------------------
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1) Elected seven directors to serve until the next Annual
    Meeting of Shareholders and until their respective successors
    are duly elected and qualified.

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| |                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2) Ratified the appointment of Ernst and Young LLP as our
    independent registered public accounting firm for the fiscal
    year ended December 31, 2006.

|    |  |                       |  |     |            |  |          |  |         |         |  |  |   | 
|--- |  | --------------------- |  | --- | ---------- |  | -------- |  | ------- | ------- |  |  | - | 
|    |  |                       |  | For |            |  | Withheld |  |         | Abstain | 
|    |  |                       |  |     |            |  |          |  |         |         | 
|(1) |  | Election of Directors |  |     |            |  |          |  |         |         |  |  |   | 
|    |  | Clayton K. Yeutter    |  |     | 25,905,643 |  |          |  | 930,335 |         |  |  |  | 
|    |  | Eugene I. Davis       |  |     | 26,202,211 |  |          |  | 633,767 |         |  |  |  | 
|    |  | Mark R. Holden        |  |     | 26,253,561 |  |          |  | 582,417 |         |  |  |  | 
|    |  | Richard L. Huber      |  |     | 26,203,182 |  |          |  | 632,796 |         |  |  |  | 
|    |  | Nils E. Larsen        |  |     | 26,075,563 |  |          |  | 760,415 |         |  |  |  | 
|    |  | Emmanuel L. Rouvelas  |  |     | 26,116,064 |  |          |  | 719,914 |         |  |  |  | 
|    |  | R. Christopher Weber  |  |     | 26,125,480 |  |          |  | 710,498 |         |  |  |  | 

|    |  |                                                               |  |     |            |  |         |  |        |         |  |  |        | 
|--- |  | ------------------------------------------------------------- |  | --- | ---------- |  | ------- |  | ------ | ------- |  |  | ------ | 
|    |  |                                                               |  | For |            |  | Against |  |        | Abstain | 
|    |  |                                                               |  |     |            |  |         |  |        |         | 
|(2) |  | Ratification of Independent Registered Public Accounting Firm |  |     | 26,729,066 |  |         |  | 86,840 |         |  |  | 20,072 | 






|        |          
|------- | ---------
|ITEM 6. | EXHIBITS.

|        |    |             |  |                                                                                                                                                                    
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|        | 3  | .1          |  | Second Amended and Restated Bylaws (Incorporated by reference to
    the current report on Form 8-K filed by American Commercial
    Lines Inc. on August 1, 2006).
|       
|        | 31 | .1          |  | Certification by Mark R. Holden, Chief Executive Officer,
    required by Rule 13a-14(a) of the Securities Exchange Act
    of 1934.                               
|       
|        | 31 | .2          |  | Certification by Christopher A. Black, Chief Financial Officer,
    required by Rule 13a-14(a) of the Securities Exchange Act
    of 1934.                         
|       
|        | 32 | .1          |  | Certification by Mark R. Holden, Chief Executive Officer,
    pursuant to 18 U.S.C. Section 1350.                                                                  
|       
|        | 32 | .2          |  | Certification by Christopher A. Black, Chief Financial Officer,
    pursuant to 18 U.S.C. Section 1350.                                                            

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SIGNATURES






| |                               
| | ------------------------------
| | AMERICAN COMMERCIAL LINES INC.



| |     |                   
| | --- | ------------------
| | By: | /s/ Mark R. Holden

| | 
| | 
| | 



| |                                      
| | -------------------------------------
| | Mark R. Holden                       
| | President and Chief Executive Officer



| |     |                         
| | --- | ------------------------
| | By: | /s/ Christopher A. Black

| | 
| | 
| | 



| |                                                  
| | -------------------------------------------------
| | Christopher A. Black                             
| | Senior Vice President and Chief Financial Officer
| | (Principal Financial Officer)                    



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INDEX TO EXHIBITS


|        |    |             |  |                                                                                                                                                                    
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|        | 3  | .1          |  | Second Amended and Restated Bylaws (Incorporated by reference to
    the current report on Form 8-K filed by American Commercial
    Lines Inc. on August 1, 2006).
|       
|        | 31 | .1          |  | Certification by Mark R. Holden, Chief Executive Officer,
    required by Rule 13a-14(a) of the Securities Exchange Act
    of 1934.                               
|       
|        | 31 | .2          |  | Certification by Christopher A. Black, Chief Financial Officer,
    required by Rule 13a-14(a) of the Securities Exchange Act
    of 1934.                         
|       
|        | 32 | .1          |  | Certification by Mark R. Holden, Chief Executive Officer,
    pursuant to 18 U.S.C. Section 1350.                                                                  
|       
|        | 32 | .2          |  | Certification by Christopher A. Black, Chief Financial Officer,
    pursuant to 18 U.S.C. Section 1350.                                                            

58