##### 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 1934For the quarterly period ended
    March 31, 2006ORo

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

47130(Zip Code)(Address of Principal Executive
    Offices)   (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
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ
  þ o




---



##### 



AMERICAN
    COMMERCIAL LINES INC.
  QUARTERLY REPORT ON
    FORM 10-Q
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006
  TABLE OF CONTENTS
  PagePART I
    FINANCIAL INFORMATIONItem 1:

Financial
    Statements (unaudited)


3Condensed
    Consolidated Statements of Operations


3Condensed
    Consolidated Statements of Financial Position


4Condensed
    Consolidated Statements of Cash Flows


5Notes to Condensed
    Consolidated Financial Statements


6Item 2:

Managements Discussion and Analysis of Financial
    Condition and Results of Operations


19Item 3:

Quantitative and
    Qualitative Disclosures About Market Risk


28Item 4:

Controls and
    Procedures


29PART II
    OTHER INFORMATIONItem 1:

Legal
    Proceedings


29Item 1A:

Risk
    Factors


31Item 6:

Exhibits


39Signatures


40Certification of CEOCertification of CFOCertification of CEOCertification of CFO   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
  Quarters EndedMarch 31,


March 31,2006


2005(Unaudited)(In thousands, except shares and
    per share amounts)REVENUE

$
198,359


$
146,322OPERATING EXPENSEMaterials, Supplies and Other


66,334



52,815Rent


5,634



5,207Labor and Fringe Benefits


34,685



32,259Fuel


37,664



26,545Depreciation and Amortization


12,082



12,279Taxes, Other Than Income Taxes


4,537



4,417Selling, General &
    Administrative


16,321



12,440Total Operating Expenses


177,257



145,962OPERATING INCOME


21,102



360OTHER EXPENSE (INCOME)Interest Expense


4,776



10,362Other, Net


(1,707
)


(1,308
)Total Other Expenses


3,069



9,054INCOME (LOSS) BEFORE INCOME TAXES


18,033



(8,694
)INCOME TAXES (BENEFIT)


6,885



(2,366
)NET INCOME (LOSS)

$
11,148


$
(6,328
)WEIGHTED AVERAGE
    SHARES OUTSTANDING:BASIC


30,234,894



NADILUTED


31,251,598



NAEARNINGS PER SHARE:BASIC

$
0.37



NADILUTED

$
0.36



NA    3




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
    POSITION
  March 31,


December 31,2006


2005(Unaudited)(In thousands, except shares and
    per share amounts)ASSETSCURRENT ASSETSCash and Cash Equivalents

$
10,853


$
13,959Accounts Receivable, Net


91,911



96,526Inventory


48,534



44,976Deferred Tax Asset


2,913



4,644Other Current Assets


21,717



16,787Total Current Assets


175,928



176,892PROPERTIES-NET


438,508



425,741INVESTMENT IN EQUITY INVESTEES


5,157



5,532OTHER ASSETS


14,357



15,119Total Assets

$
633,950


$
623,284LIABILITIESCURRENT LIABILITIESAccounts Payable

$
27,464


$
47,517Accrued Payroll and Fringe Benefits


17,675



22,303Deferred Revenue


18,063



16,631Accrued Claims and Insurance
    Premiums


12,606



13,361Accrued Interest


2,122



5,179Accrued Reorganization Claims and
    Fees


1,414



2,724Other Current Liabilities


32,539



22,973Total Current Liabilities


111,883



130,688LONG TERM DEBT


215,700



200,000PENSION LIABILITY


18,526



17,867DEFERRED TAX LIABILITY


6,274



4,644OTHER LONG TERM LIABILITIES


15,698



16,384Total Liabilities


368,081



369,583STOCKHOLDERS
    EQUITYCommon stock; authorized
    125,000,000 shares at $.01 par value;
    30,675,217 shares issued and outstanding, in 2006


307



307Treasury Stock 76,499 shares
    at March 31, 2006


(2,659
)


Other Capital


251,114



247,435Retained Earnings


22,961



11,813Accumulated Other Comprehensive
    Loss


(5,854
)


(5,854
)Total Stockholders Equity


265,869



253,701Total Liabilities and
    Stockholders Equity

$
633,950


$
623,284    4




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  CONDENSED CONSOLIDATED STATEMENTS OF CASH
    FLOWS
  Quarters EndedMarch 31,


March 31,2006


2005(Unaudited)(In thousands)OPERATING ACTIVITIESNet Income (Loss)

$
11,148


$
(6,328
)Adjustments to Reconcile Net
    Income (Loss) to Net Cash Provided by Operating Activities:Depreciation and Amortization


12,082



12,279Debt Issuance Cost Amortization


278



2,336(Gain) Loss on Property
    Dispositions


58



(327
)Other Operating Activities


3,425



505Changes in Operating Assets and
    Liabilities:Accounts Receivable


4,614



3,226Inventory


(3,486
)


(12,685
)Accrued Interest


(3,057
)


2,666Other Current Assets


(2,922
)


152Other Current Liabilities


(5,894
)


7,563Net Cash Provided by Operating
    Activities before Reorganization Items


16,246



9,387Reorganization Items Paid


(309
)


(9,143
)Net Cash Provided by Operating
    Activities


15,937



244INVESTING ACTIVITIESProperty Additions


(24,875
)


(3,936
)Proceeds from Property Dispositions


153



4,056Net Change in Restricted Cash






(285
)Investment in Vessel Leasing LLC






(2,500
)Other Investing Activities


(222
)


(663
)Net Cash Used in Investing
    Activities


(24,944
)


(3,328
)FINANCING ACTIVITIESLong-Term Debt Repaid






(381,793
)Revolving Credit Facility
    Borrowings


15,700



170,7102015 Senior Note Borrowings






200,000Outstanding Checks


(9,545
)


(5,275
)Debt Costs


(13
)


(12,254
)Tax Benefit of Share-Based
    Compensation


2,423



Acquisition of Treasury Stock


(2,659
)


Other Financing Activities


(5
)


(581
)Net Cash Provided by (Used in)
    Financing Activities


5,901



(29,193
)Net Decrease in Cash and Cash
    Equivalents


(3,106
)


(32,277
)Cash and Cash Equivalents at
    Beginning of Period


13,959



46,645Cash and Cash Equivalents at End
    of Period

$
10,853


$
14,368    5




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS
 (Unaudited)
 (Dollars in thousands, except as otherwise indicated)
  Note 1.
    Reporting
    entity        Form 10-Q Regulation S-X.
  Form 10-K
    Note 2.
    Earnings
    per Share   6




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##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Quarter Ended


Quarter EndedMarch 31,


March 31,2006


2005Net Income (Loss)

$
11,148


$
(6,328
)Weighted average common shares
    outstanding (used to calculate basic earnings per share)


30,234,894



N/A
(1)Pro forma shares if all dilutive
    potential common shares outstanding during the period were
    exercised


1,016,704



N/A
(1)Shares used to calculate diluted
    earnings per share


31,251,598



N/A
(1)Basic earnings per share

$
0.37



N/A
(1)Diluted earnings per share

$
0.36



N/A
(1)     (1)
    
    The Companys shares began trading on October 7, 2005
    on the NASDAQ National Market under the symbol ACLI.
    Prior to trading on the NASDAQ National Market, ACLs
    common stock was not listed or quoted on any national exchange
    or market system.  Note 3.
    Acquisition
    and Merger of Vessel Leasing    Note 4.
    Debt  March 31,


December 31,2006


2005Asset based revolver

$
85,700


$
70,0002015 Senior Notes


130,000



130,000Long-term debt

$
215,700


$
200,000      7




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##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 5.
    Inventory    March 31,


December 31,2006


2005Raw Materials

$
8,911


$
9,754Work in Process


18,168



13,913Parts and Supplies


21,455



21,309$
48,534


$
44,976   Note 6.
    Taxes      Note 7.
    Employee
    Benefit Plans    Quarter EndedMarch 31,


March 31,2006


2005PensionService cost

$
1,251


$
1,170Interest cost


2,143



2,024Expected return on plan assets


(2,739
)


(2,518
)Amortization of unrecognized losses


40



Net periodic benefit cost

$
695


$
676Post-RetirementService cost

$
80


$
87Interest cost


161



162Net periodic benefit cost

$
241


$
249   Note 8.
    Business
    Segments   8




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##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Form 10-K
    OPERATING
    RESULTS BY BUSINESS SEGMENT
    Quarters Ended March 31, 2006 and March 31,
    2005
  Reportable Segments


All Other


IntersegmentTransportation


Manufacturing


Segments(1)


Eliminations


TotalQuarter ended March 31,
    2006Total Revenue

$
170,589


$
50,519


$
2,193


$
(24,942
)

$
198,359Intersegment Revenue


151



24,791







(24,942
)


Revenue from external customers


170,438



25,728



2,193







198,359Operating ExpenseMaterials, Supplies and Other


56,641



8,914



779







66,334Rent


5,457



113



64







5,634Labor and Fringe Benefits


21,605



12,516



564







34,685Fuel


37,663







1







37,664Depreciation and Amortization


11,288



439



355







12,082Taxes, Other Than Income Taxes


4,425



58



54







4,537Selling, General &
    Administrative


14,794



1,317



210







16,321Total Operating Expenses


151,873



23,357



2,027







177,257Operating Income


18,565



2,371



166







21,102Quarter ended March 31,
    2005Total Revenue

$
130,268


$
16,289


$
2,055


$
(2,290
)

$
146,322Intersegment Revenue


126



2,164







(2,290
)


Revenue from external customers


130,142



14,125



2,055







146,322Operating ExpenseMaterials, Supplies and Other


48,495



3,707



613







52,815Rent


5,085



60



62







5,207Labor and Fringe Benefits


22,158



9,563



538







32,259Fuel






26,541



4







26,545Depreciation and Amortization


11,498



438



343







12,279Taxes, Other Than Income Taxes


4,259



98



60







4,417Selling, General &
    Administrative


11,642



588



210







12,440Total Operating Expenses


129,678



14,454



1,830







145,962Operating Income (Loss)


464



(329
)


225







360     (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. 9




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##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 9.
    Contingencies    NOTE 10.
    SHARE-BASED
    COMPENSATION          Restricted Shares
 10




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##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      SharesRestricted Stock issued at
    beginning of 2005


Restricted Stock granted during
    year ended December 31, 2005


821,048Restricted Stock vested during
    year ended December 31, 2005


224,304Restricted Stock forfeited during
    year ended December 31, 2005


Restricted Stock not vested at
    December 31, 2005


596,744Restricted Stock granted during
    quarter ended March 31, 2006


Restricted Stock vested during
    quarter ended March 31, 2006


214,272Restricted Stock forfeited during
    quarter ended March 31, 2006


Restricted Stock not vested at
    March 31, 2006


382,472   Stock Options
    WeightedAverageExerciseShares


Price2005Under option at beginning of 2005






Options granted during year ended
    December 31, 2005


1,105,192


$
4.19Options exercised during year
    ended December 31, 2005






Options forfeited or expired
    during year ended December 31, 2005






Under option at December 31,
    2005


1,105,192


$
4.19Options exercisable at
    December 31, 2005


208,000


$
4.16252006Options granted during quarter
    ended March 31, 2006


181,968


$
33.17Options exercised during quarter
    ended March 31, 2006






Options forfeited or expired
    during quarter ended March 31, 2006


5,018


$
33.63Under option at March 31, 2006


1,282,142


$
8.19Options exercisable at
    March 31, 2006


525,701


$
4.68Shares available for future grants
    at March 31, 2006


909,438      11




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##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  over-the-counter,
  Restricted Stock Units
    SharesRestricted Stock Units issued at
    beginning of 2006


Restricted Stock Units granted
    during quarter ended March 31, 2006


208,660Restricted Stock Units vested
    during quarter ended March 31, 2006


Restricted Stock Units forfeited
    during quarter ended March 31, 2006


2,320Restricted Stock Units not vested
    at March 31, 2006


206,340   Performance Share Units
    SharesPerformance Share Units issued at
    beginning of 2006


Performance Share Units granted
    during quarter ended March 31, 2006


41,074Performance Share Units vested
    during quarter ended March 31, 2006


Performance Share Units forfeited
    during quarter ended March 31, 2006


1,338Performance Share Units not vested
    at March 31, 2006


39,736   Note 11.
    Debtor
    Guarantor Financial Statements   12




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##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               Combining
    Statement of Operations for the Quarter Ended March 31,
    2006
  Parent





Subsidiary


Non-





CombinedACL Inc.


Parent


Guarantor


Issuers


Guarantors


Guarantors


Eliminations


Totals(In thousands)REVENUE

$



$



$



$
13,614


$
197,737


$
884


$
(13,876
)

$
198,359OPERATING EXPENSEMaterials, Supplies and Other


















64,684



1,889



(239
)


66,334Rent


















18,921



350



(13,637
)


5,634Labor and Fringe Benefits


















33,480



1,205







34,685Fuel


















37,594



70







37,664Depreciation and Amortization














9,245



2,305



532







12,082Taxes, Other Than Income Taxes


















4,537











4,537Selling, General &
    Administrative










68



168



15,958



127







16,321Total Operating Expenses










68



9,413



177,479



4,173



(13,876
)


177,257OPERATING (LOSS) INCOME










(68
)


4,201



20,258



(3,289
)






21,102OTHER EXPENSE (INCOME)Interest Expense














4,762



14











4,776Other, Net


(11,418
)


(11,418
)


(19,258
)


(19,819
)


380



(769
)


60,595



(1,707
)(11,418
)


(11,418
)


(19,258
)


(15,057
)


394



(769
)


60,595



3,069INCOME (LOSS) BEFORE INCOME TAXES


11,418



11,418



19,190



19,258



19,864



(2,520
)


(60,595
)


18,033INCOME TAXES (BENEFIT)










8,042







33



(1,190
)






6,885NET INCOME (LOSS)

$
11,418


$
11,418


$
11,148


$
19,258


$
19,831


$
(1,330
)

$
(60,595
)

$
11,148  13




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##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Combining
    Statement of Operations for the Quarter Ended March 31,
    2005
  Parent





Subsidiary


Non-





CombinedACL Inc.


Parent


Guarantor


Issuers


Guarantors


Guarantors


Eliminations


TotalsREVENUE

$



$



$



$
8,135


$
144,938


$
2,535


$
(9,286
)

$
146,322OPERATING EXPENSEMaterials, Supplies and Other


















51,035



1,831



(51
)


52,815Rent


















14,030



412



(9,235
)


5,207Labor and Fringe Benefits


















31,265



994







32,259Fuel


















26,490



55







26,545Depreciation and Amortization














9,008



2,358



913







12,279Taxes, Other Than Income Taxes


















4,417











4,417Selling, General &
    Administrative














104



11,516



820







12,440Total Operating Expenses














9,112



141,111



5,025



(9,286
)


145,962OPERATING (LOSS) INCOME














(977
)


3,827



(2,490
)






360OTHER EXPENSE (INCOME)Interest Expense














9,766



133



463







10,362Interest (Income) Expense from
    Affiliates














(107
)






107







Other, Net


6,328



6,328



8,857



(1,779
)


2,212



(1,107
)


(22,147
)


(1,308
)6,328



6,328



8,857



7,880



2,345



(537
)


(22,147
)


9,054(LOSS) INCOME BEFORE INCOME TAXES


(6,328
)


(6,328
)


(8,857
)


(8,857
)


1,482



(1,953
)


22,147



(8,694
)INCOME TAXES (BENEFIT)










(2,529
)






57



106







(2,366
)NET (LOSS) INCOME

$
(6,328
)

$
(6,328
)

$
(6,328
)

$
(8,857
)

$
1,425


$
(2,059
)

$
22,147


$
(6,328
)  14




---



##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Combining
    Statement of Financial Position at March 31, 2006
  Parent





Subsidiary


Non-





CombinedACL Inc.


Parent


Guarantor


Issuers


Guarantors


Guarantors


Eliminations


Totals(In thousands)ASSETSCURRENT ASSETSCash and Cash Equivalents

$



$



$



$
3,309


$
39


$
7,505


$



$
10,853Accounts Receivable, Net














40



90,522



1,349







91,911Accounts
    Receivable  Intercompany










(11,991
)


148,419



(136,122
)


(306
)






Materials and Supplies


















46,661



1,873







48,534Deferred Tax
    Asset  Current










2,913



















2,913Other Current Assets














1,127



19,048



1,542







21,717Total Current Assets










(9,078
)


152,895



20,148



11,963







175,928PROPERTIES-Net














357,730



69,384



11,394







438,508INVESTMENT IN SUBSIDIARIES


265,869



265,869



273,347



(11,256
)


73,111







(866,940
)


INVESTMENT IN EQUITY INVESTEES


















4,252



905







5,157OTHER ASSETS














6,939



7,350



68







14,357Total Assets

$
265,869


$
265,869


$
264,269


$
506,308


$
174,245


$
24,330


$
(866,940
)

$
633,950LIABILITIESCURRENT LIABILITIESAccounts Payable

$



$



$



$
11,185


$
16,070


$
209


$



$
27,464Accrued Payroll and Fringe Benefits














(115
)


17,790











17,675Deferred Revenue


















18,063











18,063Accrued Claims and Insurance
    Premiums


















12,606











12,606Accrued Interest














2,122















2,122Accrued Reorganization Claims
    Settlements


















1,414











1,414Other Liabilities










(2,794
)


75



35,134



124







32,539Total Current Liabilities










(2,794
)


13,267



101,077



333







111,883LONG-TERM DEBT














215,700















215,700PENSION LIABILITY


















18,526











18,526DEFERRED TAX LIABILITY










6,274



















6,274OTHER LONG-TERM LIABILITIES


















11,002



4,696







15,698Total Liabilities










3,480



228,967



130,605



5,029







368,081STOCKHOLDERS
    EQUITYCommon Stock


307



















1,813



(1,813
)


307Treasury Stock


(2,659
)


























(2,659
)Other Capital


251,114



248,762



248,762



246,339







51,211



(795,074
)


251,114Retained Earnings


22,961



22,961



17,881



40,364



53,002



(33,723
)


(100,485
)


22,961Accumulated Other Comprehensive Loss


(5,854
)


(5,854
)


(5,854
)


(9,362
)


(9,362
)






30,432



(5,854
)Total Stockholders Equity


265,869



265,869



260,789



277,341



43,640



19,301



(866,940
)


265,869Total Liabilities and
    Stockholders Equity

$
265,869


$
265,869


$
264,269


$
506,308


$
174,245


$
24,330


$
(866,940
)

$
633,950  15




---



##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Combining
    Statement of Financial Position at December 31,
    2005
  Parent





Subsidiary


Non-





CombinedACL Inc.


Parent


Guarantors


Issuers


Guarantors


Guarantors


Eliminations


Totals(In thousands)ASSETSCURRENT ASSETSCash and Cash Equivalents

$



$



$



$
7,740


$
38


$
6,181


$



$
13,959Accounts Receivable, Net














38



86,267



10,221







96,526Accounts
    Receivable  Intercompany










(11,479
)


152,705



(140,920
)


(306
)






Materials and Supplies


















43,358



1,618







44,976Deferred Tax
    Asset  Current










4,644



















4,644Other Current Assets














1,049



13,114



2,624







16,787Total Current Assets










(6,835
)


161,532



1,857



20,338







176,892PROPERTIES-Net














347,849



65,975



11,917







425,741INVESTMENT IN SUBSIDIARIES


253,701



253,701



255,492



(31,089
)


74,442







(806,247
)


INVESTMENT IN EQUITY INVESTEES


















4,408



1,124







5,532OTHER ASSETS














7,059



7,993



67







15,119Total Assets

$
253,701


$
253,701


$
248,657


$
485,351


$
154,675


$
33,446


$
(806,247
)

$
623,284LIABILITIESCURRENT LIABILITIESAccounts Payable

$



$



$



$
20,518


$
25,047


$
1,952


$



$
47,517Accrued Payroll and Fringe Benefits














(27
)


22,330











22,303Deferred Revenue


















16,631











16,631Accrued Claims and Insurance
    Premiums


















13,361











13,361Accrued Interest














5,179















5,179Current Portion of Long-Term Debt






























Accrued Reorganization Claims and
    Fees


















2,724











2,724Other Liabilities










(4,608
)


195



22,242



5,144







22,973Total Current Liabilities










(4,608
)


25,865



102,335



7,096







130,688LONG-TERM DEBT














200,000















200,000PENSION LIABILITY


















17,867











17,867DEFERRED TAX LIABILITY










4,644



















4,644OTHER LONG-TERM LIABILITIES


















10,664



5,720







16,384Total Liabilities










36



225,865



130,866



12,816







369,583STOCKHOLDERS
    EQUITYCommon Stock


307



















1,813



(1,813
)


307Other Capital


247,435



247,742



247,742



247,742







53,746



(796,972
)


247,435Retained Earnings (Deficit)


11,813



11,813



6,733



21,106



33,171



(34,929
)


(37,894
)


11,813Accumulated 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
)


253,701Total Liabilities and
    Stockholders Equity

$
253,701


$
253,701


$
248,657


$
485,351


$
154,675


$
33,446


$
(806,247
)

$
623,284  16




---



##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Combining
    Statement of Cash Flows for the Quarter Ended March 31,
    2006
  Parent





Subsidiary


Non-





CombinedACL Inc.


Parent


Guarantor


Issuers


Guarantors


Guarantors


Eliminations


Totals(In thousands)Net Income (Loss)

$
11,418


$
11,418


$
11,148


$
19,258


$
19,831


$
(1,330
)

$
(60,595
)

$
11,148Adjustments to Reconcile Net Income
    (Loss) to Cash:Provided by (Used in) Operating
    Activities:Depreciation and Amortization














9,245



2,305



532







12,082Debt Issuance Cost Amortization














278















278Loss on Property Dispositions














26



32











58Other Operating Activities


(11,418
)


(11,418
)


(17,628
)


(20,661
)


4,760



(805
)


60,595



3,425Changes in Operating Assets and
    Liabilities:Accounts Receivable














(1
)


(4,256
)


8,871







4,614Intercompany Accounts
    Receivable/Payable


2,659







512



4,285



(7,456
)










Materials and Supplies


















(3,231
)


(255
)






(3,486
)Accrued Interest














(3,057
)














(3,057
)Other Current Assets










1,731



(78
)


(5,657
)


1,082







(2,922
)Other Current Liabilities










1,814



9



(954
)


(6,763
)






(5,894
)Net Cash Provided by Operating
    Activities before Reorganization Items


2,659







(2,423
)


9,304



5,374



1,332







16,246Reorganization Items Paid


















(309
)










(309
)Net Cash Provided by Operating
    Activities


2,659







(2,423
)


9,304



5,065



1,332







15,937INVESTING ACTIVITIESProperty Additions














(19,728
)


(5,139
)


(8
)






(24,875
)Proceeds from Property Dispositions


















153











153Other Investing Activities














(149
)


(73
)










(222
)Net Cash Used in Investing
    Activities














(19,877
)


(5,059
)


(8
)






(24,944
)FINANCING ACTIVITIESRevolving Credit Facility Borrowings














15,700















15,700Outstanding Checks














(9,540
)


(5
)










(9,545
)Debt Costs














(13
)














(13
)Tax Benefit of Share-Based
    Compensation










2,423



















2,423Acquisition of Treasury Stock


(2,659
)


























(2,659
)Other Financing Activities














(5
)














(5
)Net Cash (Used In) Provided by
    Financing Activities


(2,659
)






2,423



6,142



(5
)










5,901(Decrease) Increase in Cash and
    Cash Equivalents














(4,431
)


1



1,324







(3,106
)Cash and Cash Equivalents at
    Beginning of Period














7,740



38



6,181







13,959Cash and Cash Equivalents at End of
    Period

$



$



$



$
3,309


$
39


$
7,505


$



$
10,853  17




---



##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Combining
    Statement of Cash Flows for the Quarter Ended March 31,
    2005
  Parent





Subsidiary


Non-





CombinedACL Inc,


Parent


Guarantor


Issuers


Guarantors


Guarantors


Eliminations


TotalsNet (Loss) Income

$
(6,328
)

$
(6,328
)

$
(6,328
)

$
(8,857
)

$
1,425


$
(2,059
)

$
22,147


$
(6,328
)Adjustments to Reconcile Net (Loss)
    Income to Net Cash Provided by (Used in) Operating Activities:Depreciation and Amortization














9,008



2,358



913







12,279Debt Issuance Cost Amortization














2,300







36







2,336(Gain) Loss on Property Dispositions














(270
)


1



(58
)






(327
)Other Operating Activities


6,328



6,328



9,654



4,971



264



(5,149
)


(21,891
)


505Changes in Operating Assets and
    Liabilities:Accounts Receivable














84



(2,379
)


5,521







3,226Intercompany Accounts
    Receivable/Payable










1



(19,619
)


17,118



2,500







Materials and Supplies


















(13,050
)


365







(12,685
)Accrued Interest














2,351



54



261







2,666Other Current Assets










(437
)


689



666



(402
)


(364
)


152Other Current Liabilities










(2,890
)


1,927



10,093



(1,675
)


108



7,563Net Cash (Used in) Provided by
    Operating Activities before Reorganization Items














(7,416
)


16,550



253







9,387Reorganization Items Paid


















(9,143
)










(9,143
)Net Cash (Used in) Provided by
    Operating Activities














(7,416
)


7,407



253







244INVESTING ACTIVITIESProperty Additions














(2,611
)


(1,325
)










(3,936
)Proceeds from Property Dispositions














3,738



178



140







4,056Net Change in Restricted Cash






















(285
)






(285
)Investment in Vessel Leasing LLC














(2,500
)














(2,500
)Other Investing Activities














322



(985
)










(663
)Net Cash Used in Investing
    Activities














(1,051
)


(2,132
)


(145
)






(3,328
)FINANCING ACTIVITIESLong-Term Debt Repaid














(381,546
)






(247
)






(381,793
)Revolving Credit Facility Borrowings














170,710















170,7102015 Senior Note Borrowings














200,000















200,000Outstanding Checks


















(5,275
)










(5,275
)Debt Costs














(12,254
)














(12,254
)Other Financing Activities






















(581
)






(581
)Net Cash Used in Financing
    Activities














(23,090
)


(5,275
)


(828
)






(29,193
)Decrease in Cash and Cash
    Equivalents














(31,557
)






(720
)






(32,277
)Cash and Cash Equivalents at
    Beginning of Period














39,452



30



7,163







46,645Cash and Cash Equivalents at End of
    Period

$



$



$



$
7,895


$
30


$
6,443


$



$
14,368  18




---



##### Table of Contents



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
    three months ended March 31, 2006 compared to the results
    of operations for the three months ended March 31, 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
    March 31, 2006 and an analysis of the Companys cash
    flows for the three months ended March 31, 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
   19




---



##### Table of Contents



RiverTrac
  ton-mile ton-mile
    year-over-year
    Our
    Fleet Profile
    Domestic Barges

Dry


Tankers


TotalBarges operated as of the end of
    2005


2,803



371



3,174Retired


(20
)


(1
)


(21
)New builds


11



15



26Change in number of barges leased


(5
)






(5
)Barges operated as of the end of
    the first quarter 2006


2,789



385



3,174   Outlook
  Transportation Services.
 20




---



##### Table of Contents



21




---



##### Table of Contents



Manufacturing.
  Recent
    Developments
  Manufacturing.
 22




---



##### Table of Contents



RESULTS
    OF OPERATIONS
  AMERICAN
    COMMERCIAL LINES INC. OPERATING RESULTS by BUSINESS SEGMENT
    Quarter Ended March 31, 2006 as compared with Quarter Ended
    March 31, 2005
  2006


% of ConsolidatedQuarters Ended


Better


RevenueMarch 31,


March 31,


(Worse)


First Quarter


First Quarter2006


2005


Than 2005


2005


2004(Dollars in thousands except
    where noted)REVENUEDomestic Transportation

$
170,231


$
129,109


$
41,122



85.8
%


88.3
%International Transportation


207



1,033



(826
)


0.1
%


0.7
%Manufacturing (external and
    internal)


50,519



16,289



34,230



25.5
%


11.1
%Other


2,193



2,055



138



1.1
%


1.4
%Intersegment manufacturing
    elimination


(24,791
)


(2,164
)


(22,627
)


(12.5
)%


(1.5
)%Consolidated Revenue

$
198,359


$
146,322


$
52,037



100.0
%


100.0
%OPERATING EXPENSEDomestic Transportation

$
148,342


$
125,352


$
(22,990
)International Transportation


3,531



4,326



795Manufacturing (external and
    internal)


43,501



16,618



(26,883
)Other


2,027



1,830



(197
)Intersegment manufacturing
    elimination


(20,144
)


(2,164
)


17,980Consolidated Operating Expense

$
177,257


$
145,962


$
(31,295
)


89.4
%


99.8
%OPERATING INCOMEDomestic Transportation

$
21,889


$
3,757


$
18,132International Transportation


(3,324
)


(3,293
)


(31
)Manufacturing (external and
    internal)


7,018



(329
)


7,347Other


166



225



(59
)Intersegment manufacturing
    elimination


(4,647
)






(4,647
)Consolidated Operating Income

$
21,102


$
360


$
20,742



10.6
%


0.2
%Interest Expense


4,776



10,362



5,586Other Expense (Income)


(1,707
)


(1,308
)


399Income (Loss) before Income Taxes

$
18,033


$
(8,694
)

$
26,727Income Taxes (Benefit)


6,885



(2,366
)


(9,251
)Net Income (Loss)

$
11,148


$
(6,328
)

$
17,476Domestic Barges Operated (average
    of period beginning and end)


3,174



3,228



(54
)Domestic TransportationRevenue per Barge Operated

$
53,633


$
39,997


$
13,636   Revenue.
   23




---



##### Table of Contents



ton-mile
      Operating Expense.
        Operating Income.
 24




---



##### Table of Contents



Interest Expense.
  Other Income.
  Income Tax Expense.
  Net Income (Loss).
  LIQUIDITY
    AND CAPITAL RESOURCES
   25




---



##### Table of Contents



Our
    Indebtedness
    Net
    Cash, Capital Expenditures and Cash Flow
             26




---



##### Table of Contents



CHANGES
    IN ACCOUNTING STANDARDS
    SFAS No. 109-1, SFAS No. 109-2,
  Chapter 4-Issued
   27




---



##### Table of Contents



CRITICAL
    ACCOUNTING POLICIES
    Form 10-K
  Item 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    Fuel
    Price Risk
    Interest
    Rate and Other Risks
    Foreign
    Currency Exchange Rate Risks
   28




---



##### Table of Contents



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. Rule 13a-15(b)).
  Changes in Internal Control over Financial
    Reporting. Rules 13a-15(f) 15d-15(f)
 PART II  OTHER
    INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS.   29




---



##### Table of Contents



Current Legal Proceeding.
  
    Miller Appeal.  On January 19, 2005,
    MilFam II LP and
    Trust A-4,
    together referred to as the Miller Entities, holders of
    approximately $22.0 million in principal amount of PIK
    Notes, filed a notice of appeal, commencing an appeal to the
    United States District Court for the Southern District of
    Indiana (the District Court) of (1) the order
    of the U.S. Bankruptcy Court, Southern District of Indiana,
    New Albany Division (the Bankruptcy Court) entered
    on December 30, 2004 confirming the Plan of Reorganization
    (the Confirmation Order) and (2) the order of
    the Bankruptcy Court entered on January 12, 2005 denying
    the Miller Entities Motion For Reconsideration And To Open
    Record To Include Recent Senior Debt Trading Information. On
    February 17, 2005, the Miller Entities sought a limited
    stay of the Bankruptcy Courts Confirmation Order. On
    March 3, 2005, the Bankruptcy Court entered an order
    denying the Miller Entities request for a limited stay.
    The Confirmation Order remains in full force and effect.          Environmental Litigation.
 30




---



##### Table of Contents




    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 March 31,
    2006, Jeffboat had contributed approximately $225,000 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 March 31, 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 cleanup will be required. We have paid
    approximately $20,000 in consultant fees related to
    investigation at this site.  ITEM 1A.
    RISK
    FACTORS   31




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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.
    Higher
    fuel prices, if not recouped from our customers, could
    dramatically increase operating expenses and adversely affect
    profitability.
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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.
    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.
   33




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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.
  and/or
  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 barges may lead to increased costs and
    disruptions in our operations.
    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.
   34




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There
    could be adverse consequences if the pending appeal of the
    confirmation of our Plan of Reorganization is
    successful.
  Trust A-4,
         35




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Our
    barging services outside the United States subject us to changes
    in foreign economic and political conditions.
    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.
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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.
    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.
       37




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Our
    financial condition and results of operations will not be
    comparable to the financial condition or results of operations
    reflected in our historical financial statements.
    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.
  Form 10-K
 38




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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    ITEM 5.
    OTHER
    INFORMATION    ITEM 6.
    EXHIBITS.  ExhibitNo

Description10
.1

2006 Non-Employee Director
    Compensation Summary Sheet (incorporated herein by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    filed January 20, 2006).10
.2

Form of Restricted Stock Unit
    Agreement for non-executives of the Company (incorporated herein
    by reference to Exhibit 10.2 to the Companys Current
    Report on
    Form 8-K
    filed January 20, 2006).10
.3

Form of Stock Option Agreement for
    non-executives of the Company (incorporated herein by reference
    to Exhibit 10.3 to the Companys Current Report on
    Form 8-K
    filed January 20, 2006).10
.4

Restricted Stock Unit Deferral
    Plan (incorporated herein by reference to Exhibit 10.4 to
    the Companys Current Report on
    Form 8-K
    filed January 20, 2006).10
.5

Form of Stock Option Agreement
    (incorporated herein by reference to Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    filed February 7, 2006).10
.6

Form of Restricted Stock Unit
    Agreement (incorporated herein by reference to Exhibit 10.2
    to the Companys Current Report on
    Form 8-K
    filed February 7, 2006).10
.7

2006 Executive Annual Incentive
    Plan (incorporated herein by reference to Exhibit 10.1 to
    the Companys Current Report on
    Form 8-K
    filed March 23, 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.  39




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SIGNATURES                    40