##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 333-124454-13
 AMERICAN BARGE LINE COMPANY
 (Exact name of registrant as specified in its charter)
 Delaware
    
    75-3177794(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)1701 East Market Street
    
    47130Jeffersonville, Indiana
    
    (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)
 þ o
  o o þ
 o þ
 þ o




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##### 



AMERICAN BARGE LINE COMPANY
 QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 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 Results of Operations
    
    29Item 3:
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    56Item 4:
    
    Controls and Procedures
    
    56PART II OTHER INFORMATIONItem 1:
    
    Legal Proceedings
    
    56Item 1A:
    
    Risk Factors Risk Factors
    
    59Item 2:
    
    Unregistered Sales of Securities and Use of Proceeds
    
    67Item 3:
    
    Defaults on Senior Securities
    
    67Item 4:
    
    Submission of Matters to a Vote of Security Holders
    
    67Item 6:
    
    Exhibits
    
    68Signatures
    
    69
  2




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##### 



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
 AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except shares and per share amounts)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005RevenuesTransportation Services
    
    $
    212,451
    
    
    $
    145,269
    
    
    $
    568,820
    
    
    $
    421,263Manufacturing
    
    
    54,105
    
    
    
    22,028
    
    
    
    107,834
    
    
    
    68,102Revenues
    
    
    266,556
    
    
    
    167,297
    
    
    
    676,654
    
    
    
    489,365Cost of SalesTransportation Services
    
    
    154,098
    
    
    
    124,759
    
    
    
    430,737
    
    
    
    365,314Manufacturing
    
    
    51,972
    
    
    
    19,996
    
    
    
    99,125
    
    
    
    63,108Cost of Sales
    
    
    206,070
    
    
    
    144,755
    
    
    
    529,862
    
    
    
    428,422Gross Profit
    
    
    60,486
    
    
    
    22,542
    
    
    
    146,792
    
    
    
    60,943Selling, General and Administrative Expenses
    
    
    15,514
    
    
    
    11,393
    
    
    
    46,856
    
    
    
    35,230Operating Income
    
    
    44,972
    
    
    
    11,149
    
    
    
    99,936
    
    
    
    25,713Other Expense (Income)Interest Expense
    
    
    4,812
    
    
    
    7,869
    
    
    
    14,570
    
    
    
    25,623Other, Net
    
    
    (13
    )
    
    
    (96
    )
    
    
    (2,256
    )
    
    
    (4,952
    )Other Expenses
    
    
    4,799
    
    
    
    7,773
    
    
    
    12,314
    
    
    
    20,671Income from Continuing Operations before
Income Taxes
    
    
    40,173
    
    
    
    3,376
    
    
    
    87,622
    
    
    
    5,042Income Taxes
    
    
    15,067
    
    
    
    2,047
    
    
    
    33,018
    
    
    
    2,305Income from Continuing Operations
    
    
    25,106
    
    
    
    1,329
    
    
    
    54,604
    
    
    
    2,737Discontinued Operations, Net of Taxes (Note 8)
    
    
    3,300
    
    
    
    2,177
    
    
    
    2,654
    
    
    
    474Net Income
    
    $
    28,406
    
    
    $
    3,506
    
    
    $
    57,258
    
    
    $
    3,211
  3




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##### 



AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands, except shares and per share amounts)
 September 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)ASSETSCurrent AssetsCash and Cash Equivalents
    
    $
    2,325
    
    
    $
    13,959Accounts Receivable, Net
    
    
    120,011
    
    
    
    96,526Inventory
    
    
    58,368
    
    
    
    44,976Deferred Tax Asset
    
    
    2,559
    
    
    
    4,644Assets Held for Sale
    
    
    33,031
    
    
    
    1,042Other Current Assets
    
    
    31,714
    
    
    
    15,745Total Current Assets
    
    
    248,008
    
    
    
    176,892Properties-Net
    
    
    436,694
    
    
    
    425,741Investment in Equity Investees
    
    
    5,090
    
    
    
    5,532Other Assets
    
    
    15,146
    
    
    
    15,119Total Assets
    
    $
    704,938
    
    
    $
    623,284LIABILITIESCurrent LiabilitiesAccounts Payable
    
    $
    28,519
    
    
    $
    47,517Accrued Payroll and Fringe Benefits
    
    
    26,169
    
    
    
    22,303Deferred Revenue
    
    
    27,754
    
    
    
    16,631Accrued Claims and Insurance Premiums
    
    
    14,726
    
    
    
    13,361Accrued Interest
    
    
    2,035
    
    
    
    5,179Customer Deposits
    
    
    7,149
    
    
    
    1,147Liabilities Related to Assets Held for Sale
    
    
    9,295
    
    
    
    Other Liabilities
    
    
    35,835
    
    
    
    24,550Total Current Liabilities
    
    
    151,482
    
    
    
    130,688Long Term Debt
    
    
    192,800
    
    
    
    200,000Pension Liability
    
    
    19,951
    
    
    
    17,867Deferred Tax Liability
    
    
    12,820
    
    
    
    4,644Other Long Term Liabilities
    
    
    11,051
    
    
    
    16,384Total Liabilities
    
    
    388,104
    
    
    
    369,583STOCKHOLDERS EQUITYCommon stock; authorized 1,000 shares at $.01 par value;
10 shares issued and outstanding in 2006
    
    
    
    
    
    
    Other Capital
    
    
    253,419
    
    
    
    247,742Retained Earnings
    
    
    69,071
    
    
    
    11,813Accumulated Other Comprehensive Loss
    
    
    (5,656
    )
    
    
    (5,854
    )Total Stockholders Equity
    
    
    316,834
    
    
    
    253,701Total Liabilities and Stockholders Equity
    
    $
    704,938
    
    
    $
    623,284
  4




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##### 



AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 Nine Months Ended September 30,2006
    
    
    2005Operating ActivitiesIncome from Continuing Operations
    
    $
    54,604
    
    
    $
    2,737Adjustments to Reconcile Income from Continuing Operations to Net Cash
Provided by Operating Activities:Depreciation and Amortization
    
    
    35,303
    
    
    
    35,256Debt Issuance Cost Amortization
    
    
    832
    
    
    
    2,669Gain on Property Dispositions
    
    
    (43
    )
    
    
    (4,248
    )Contributions to Defined Benefit Pension Plan
    
    
    (454
    )
    
    
    (3,417
    )Other Operating Activities
    
    
    15,610
    
    
    
    3,781Changes in Operating Assets and Liabilities:Accounts Receivable
    
    
    (33,959
    )
    
    
    (14,735
    )Inventory
    
    
    (14,192
    )
    
    
    (17,325
    )Accrued Interest
    
    
    (3,144
    )
    
    
    2,560Other Current Assets
    
    
    (15,635
    )
    
    
    (2,973
    )Other Current Liabilities
    
    
    31,724
    
    
    
    17,192Net Cash Provided by Operating Activities before Reorganization Items
    
    
    70,646
    
    
    
    21,497Reorganization Items Paid
    
    
    (349
    )
    
    
    (12,988
    )Net Cash Provided by Continuing Operating Activities
    
    
    70,297
    
    
    
    8,509Net Cash Provided (Used) by Operating Activities of Discontinued Operations
    
    
    (2,697
    )
    
    
    1,848Net Cash Provided by Operating Activities
    
    
    67,600
    
    
    
    10,357Investing ActivitiesProperty Additions
    
    
    (58,681
    )
    
    
    (26,129
    )Proceeds from Property Dispositions
    
    
    688
    
    
    
    13,500Net Change in Restricted Cash
    
    
    
    
    
    
    (1,148
    )Investment in Vessel Leasing LLC
    
    
    
    
    
    
    (2,500
    )Other Investing Activities
    
    
    (1,515
    )
    
    
    (2,042
    )Net Cash Used in Investing Activities
    
    
    (59,508
    )
    
    
    (18,319
    )Financing ActivitiesLong Term Debt Repayments
    
    
    
    
    
    
    (383,836
    )Asset Based Revolver (Repayments) Borrowings
    
    
    (6,700
    )
    
    
    170,7102015 Senior Note (Repayments) Borrowings
    
    
    (500
    )
    
    
    200,000Outstanding Checks
    
    
    (13,553
    )
    
    
    (2,814
    )Debt Costs
    
    
    (13
    )
    
    
    (13,233
    )Tax Benefit of Share Based Compensation
    
    
    4,063
    
    
    
    Acquisition of Treasury Stock
    
    
    (3,018
    )
    
    
    Other Financing Activities
    
    
    (5
    )
    
    
    (1,782
    )Net Cash Used in Financing Activities
    
    
    (19,726
    )
    
    
    (30,955
    )Net Decrease in Cash and Cash Equivalents
    
    
    (11,634
    )
    
    
    (38,917
    )Cash and Cash Equivalents at Beginning of Period
    
    
    13,959
    
    
    
    46,645Cash and Cash Equivalents at End of Period
    
    $
    2,325
    
    
    $
    7,728
  5




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##### 



AMERICAN BARGE LINE COMPANY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Note 1. Reporting entity
      6




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##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
     Note 2. Acquisition and Merger of Vessel Leasing
  7




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##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Note 3. Debt
 September 30,
    
    
    December 30,2006
    
    
    2005Asset Based Revolver
    
    $
    63,300
    
    
    $
    70,0002015 Senior Notes
    
    
    129,500
    
    
    
    130,000Long Term Debt
    
    $
    192,800
    
    
    $
    200,000
     8




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##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Note 4. Inventory
  September 30,
    
    
    December 30,2006
    
    
    2005Raw Materials
    
    $
    13,095
    
    
    $
    9,754Work In Process
    
    
    22,487
    
    
    
    13,913Parts and Supplies
    
    
    22,786
    
    
    
    21,309Inventory
    
    $
    58,368
    
    
    $
    44,976
 Note 5. Taxes
    9




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##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Note 6. Employee Benefit Plans
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Pension Components:Service costs
    
    $
    1,251
    
    
    $
    1,170
    
    
    $
    3,753
    
    
    $
    3,510Interest costs
    
    
    2,143
    
    
    
    2,024
    
    
    
    6,429
    
    
    
    6,072Expected return on plan assets
    
    
    (2,739
    )
    
    
    (2,518
    )
    
    
    (8,217
    )
    
    
    (7,554
    )Amortization of unrecognized loss
    
    
    40
    
    
    
    
    
    
    
    120
    
    
    
    Net periodic benefit cost
    
    $
    695
    
    
    $
    676
    
    
    $
    2,085
    
    
    $
    2,028Post-retirement Components:Service costs
    
    $
    80
    
    
    $
    87
    
    
    $
    240
    
    
    $
    261Interest costs
    
    
    161
    
    
    
    162
    
    
    
    483
    
    
    
    486Net periodic benefit cost
    
    $
    241
    
    
    $
    249
    
    
    $
    723
    
    
    $
    747
 Note 7. Business Segments
    10




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##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Statement of Operating Income by Reportable Segment
(unaudited)
 Reportable Segments
    
    
    All Other
    
    
    IntersegmentTransportation
    
    
    Manufacturing
    
    
    Segments(1)
    
    
    Elimination
    
    
    TotalQuarter ended September 30, 2006Total Revenue
    
    $
    211,150
    
    
    $
    54,661
    
    
    $
    1,479
    
    
    $
    (734
    )
    
    $
    266,556Intersegment Revenue
    
    
    162
    
    
    
    556
    
    
    
    16
    
    
    
    (734
    )
    
    
    Revenue from external customers
    
    
    210,988
    
    
    
    54,105
    
    
    
    1,463
    
    
    
    
    
    
    
    266,556Operating ExpenseMaterials, Supplies and Other
    
    
    65,633
    
    
    
    
    
    
    
    596
    
    
    
    
    
    
    
    66,229Rent
    
    
    6,021
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    6,045Labor and Fringe Benefits
    
    
    22,931
    
    
    
    
    
    
    
    407
    
    
    
    
    
    
    
    23,338Fuel
    
    
    42,560
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,560Depreciation and Amortization
    
    
    11,111
    
    
    
    
    
    
    
    283
    
    
    
    
    
    
    
    11,394Taxes, Other Than Income Taxes
    
    
    4,477
    
    
    
    
    
    
    
    55
    
    
    
    
    
    
    
    4,532Cost of Goods Sold
    
    
    
    
    
    
    51,972
    
    
    
    
    
    
    
    
    
    
    
    51,972Total Cost of Sales
    
    
    152,733
    
    
    
    51,972
    
    
    
    1,365
    
    
    
    
    
    
    
    206,070Selling, General & Administrative
    
    
    14,027
    
    
    
    1,285
    
    
    
    202
    
    
    
    
    
    
    
    15,514Total Operating Expenses
    
    
    166,760
    
    
    
    53,257
    
    
    
    1,567
    
    
    
    
    
    
    
    221,584Operating Income (Loss)
    
    $
    44,228
    
    
    $
    848
    
    
    $
    (104
    )
    
    $
    
    
    
    $
    44,972Quarter ended September 30, 2005Total Revenue
    
    $
    143,859
    
    
    $
    34,919
    
    
    $
    1,514
    
    
    $
    (12,995
    )
    
    $
    167,297Intersegment Revenue
    
    
    100
    
    
    
    12,891
    
    
    
    4
    
    
    
    (12,995
    )
    
    
    Revenue from external customers
    
    
    143,759
    
    
    
    22,028
    
    
    
    1,510
    
    
    
    
    
    
    
    167,297Operating ExpenseMaterials, Supplies and Other
    
    
    53,778
    
    
    
    
    
    
    
    606
    
    
    
    
    
    
    
    54,384Rent
    
    
    5,021
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    5,051Labor and Fringe Benefits
    
    
    18,298
    
    
    
    
    
    
    
    400
    
    
    
    
    
    
    
    18,698Fuel
    
    
    31,328
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,328Depreciation and Amortization
    
    
    11,030
    
    
    
    
    
    
    
    255
    
    
    
    
    
    
    
    11,285Taxes, Other Than Income Taxes
    
    
    3,954
    
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    4,013Cost of Goods Sold
    
    
    
    
    
    
    19,996
    
    
    
    
    
    
    
    
    
    
    
    19,996Total Cost of Sales
    
    
    123,409
    
    
    
    19,996
    
    
    
    1,350
    
    
    
    
    
    
    
    144,755Selling, General & Administrative
    
    
    10,495
    
    
    
    707
    
    
    
    191
    
    
    
    
    
    
    
    11,393Total Operating Expenses
    
    
    133,904
    
    
    
    20,703
    
    
    
    1,541
    
    
    
    
    
    
    
    156,148Operating Income (Loss)
    
    $
    9,855
    
    
    $
    1,325
    
    
    $
    (31
    )
    
    $
    
    
    
    $
    11,149
 
 (1)
    
    Financial data for segments below the reporting thresholds is attributable to a segment that operates terminals along the U.S. inland waterways. 11




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##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Statement of Operating Income by Reportable Segment
(unaudited)
 Reportable Segments
    
    
    All Other
    
    
    IntersegmentTransportation
    
    
    Manufacturing
    
    
    Segments(1)
    
    
    Elimination
    
    
    TotalNine months ended September 30, 2006Total Revenue
    
    $
    564,936
    
    
    $
    153,322
    
    
    $
    4,447
    
    
    $
    (46,051
    )
    
    $
    676,654Intersegment Revenue
    
    
    510
    
    
    
    45,488
    
    
    
    53
    
    
    
    (46,051
    )
    
    
    Revenue from external customers
    
    
    564,426
    
    
    
    107,834
    
    
    
    4,394
    
    
    
    
    
    
    
    676,654Operating ExpenseMaterials, Supplies and Other
    
    
    180,921
    
    
    
    
    
    
    
    1,482
    
    
    
    
    
    
    
    182,403Rent
    
    
    16,476
    
    
    
    
    
    
    
    76
    
    
    
    
    
    
    
    16,552Labor and Fringe Benefits
    
    
    64,779
    
    
    
    
    
    
    
    1,218
    
    
    
    
    
    
    
    65,997Fuel
    
    
    118,665
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118,665Depreciation and Amortization
    
    
    33,118
    
    
    
    
    
    
    
    818
    
    
    
    
    
    
    
    33,936Taxes, Other Than Income Taxes
    
    
    13,022
    
    
    
    
    
    
    
    162
    
    
    
    
    
    
    
    13,184Cost of Goods Sold
    
    
    
    
    
    
    99,125
    
    
    
    
    
    
    
    
    
    
    
    99,125Total Cost of Sales
    
    
    426,981
    
    
    
    99,125
    
    
    
    3,756
    
    
    
    
    
    
    
    529,862Selling, General & Administrative
    
    
    42,159
    
    
    
    4,053
    
    
    
    644
    
    
    
    
    
    
    
    46,856Total Operating Expenses
    
    
    469,140
    
    
    
    103,178
    
    
    
    4,400
    
    
    
    
    
    
    
    576,718Operating Income (Loss)
    
    $
    95,286
    
    
    $
    4,656
    
    
    $
    (6
    )
    
    $
    
    
    
    $
    99,936Nine months ended September 30, 2005Total Revenue
    
    $
    416,820
    
    
    $
    85,820
    
    
    $
    4,929
    
    
    $
    (18,204
    )
    
    $
    489,365Intersegment Revenue
    
    
    469
    
    
    
    17,718
    
    
    
    17
    
    
    
    (18,204
    )
    
    
    Revenue from external customers
    
    
    416,351
    
    
    
    68,102
    
    
    
    4,912
    
    
    
    
    
    
    
    489,365Operating ExpenseMaterials, Supplies and Other
    
    
    153,693
    
    
    
    
    
    
    
    1,543
    
    
    
    
    
    
    
    155,236Rent
    
    
    14,700
    
    
    
    
    
    
    
    83
    
    
    
    
    
    
    
    14,783Labor and Fringe Benefits
    
    
    60,029
    
    
    
    
    
    
    
    1,278
    
    
    
    
    
    
    
    61,307Fuel
    
    
    87,311
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87,311Depreciation and Amortization
    
    
    33,155
    
    
    
    
    
    
    
    760
    
    
    
    
    
    
    
    33,915Taxes, Other Than Income Taxes
    
    
    12,585
    
    
    
    
    
    
    
    177
    
    
    
    
    
    
    
    12,762Cost of Goods Sold
    
    
    
    
    
    
    63,108
    
    
    
    
    
    
    
    
    
    
    
    63,108Total Cost of Sales
    
    
    361,473
    
    
    
    63,108
    
    
    
    3,841
    
    
    
    
    
    
    
    428,422Selling, General & Administrative
    
    
    32,651
    
    
    
    1,974
    
    
    
    605
    
    
    
    
    
    
    
    35,230Total Operating Expenses
    
    
    394,124
    
    
    
    65,082
    
    
    
    4,446
    
    
    
    
    
    
    
    463,652Operating Income
    
    $
    22,227
    
    
    $
    3,020
    
    
    $
    466
    
    
    $
    
    
    
    $
    25,713
 
 (1)
    
    Financial data for segments below the reporting thresholds is attributable to a segment that operates terminals along the U.S. inland waterways. 12




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Note 8. Discontinued Operations
    Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue
    
    $
    11,290
    
    
    $
    8,557
    
    
    $
    18,156
    
    
    $
    15,797Cost of
Sales
    
    
    4,269
    
    
    
    4,285
    
    
    
    11,882
    
    
    
    11,822Selling, General and
Administrative
    
    
    1,261
    
    
    
    1,415
    
    
    
    2,354
    
    
    
    3,537Other Expense (Income)
    
    
    807
    
    
    
    38
    
    
    
    385
    
    
    
    (821
    )Income from
Discontinued
Operations Before
Tax
    
    
    4,953
    
    
    
    2,819
    
    
    
    3,535
    
    
    
    1,259Income Tax
    
    
    1,653
    
    
    
    642
    
    
    
    881
    
    
    
    785Income from
Discontinued
Operations
    
    $
    3,300
    
    
    $
    2,177
    
    
    $
    2,654
    
    
    $
    474
  13




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Assets held for sale related to discontinued operations
Net book values at December 31, 2005
 Venezuelan Operations:Cash
    
    $
    5,543Other Current Assets
    
    
    13,855Properties-Net
    
    
    11,475Other assets
    
    
    1,186Total assets
    
    
    32,059Total liabilities
    
    
    11,859Total
    
    $
    20,200Dominican Republic Operations:Properties-Net
    
    
    814Total
    
    $
    814
 Note 9. Contingencies
   14




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Note 10. Share-Based Compensation
     Restricted Shares
 15




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
    Restricted Stock
    
    SharesNot vested at December 31, 2005
    
    
    596,744Vested during quarter ended March 31, 2006
    
    
    214,272Not vested at March 31, 2006
    
    
    382,472Vested during quarter ended June 30, 2006
    
    
    18,690Not vested at June 30, 2006 and September 30, 2006
    
    
    363,782
 Stock Options
 16




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
  WeightedAverageExerciseStock Options
    
    Shares
    
    PriceUnder option at December 31, 2005
    
    
    1,105,192
    
    
    $
    4.19Exercisable at December 31, 2005
    
    
    208,000
    
    
    $
    4.16Granted during quarter ended March 31, 2006
    
    
    181,968
    
    
    $
    33.17Forfeited during quarter ended March 31, 2006
    
    
    5,018
    
    
    $
    33.63Under option at March 31, 2006
    
    
    1,282,142
    
    
    $
    8.19Exercisable at March 31, 2006
    
    
    525,701
    
    
    $
    4.68Exercised during quarter ended June 30, 2006
    
    
    84,054
    
    
    $
    7.42Under option at June 30, 2006
    
    
    1,198,088
    
    
    $
    8.24Exercisable at
June 30, 2006
    
    
    441,648
    
    
    $
    4.16Exercised during quarter ended September 30,
2006
    
    
    45,756
    
    
    $
    4.32Under option at September 30,
2006
    
    
    1,152,332
    
    
    $
    8.40Exercisable at September 30,
2006
    
    
    599,357
    
    
    $
    5.40Shares available for future grants
at September 30, 2006
    
    
    908,742
   Restricted Stock Units
  17




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Restricted Stock Units
    
    SharesOutstanding at beginning of 2006
    
    
    Granted during quarter ended March 31, 2006
    
    
    208,660Forfeited during quarter ended March 31, 2006
    
    
    2,320Not vested at March 31, 2006
    
    
    206,340Forfeited during quarter ended June 30, 2006
    
    
    3,095Not vested at June 30, 2006
    
    
    203,245Granted during quarter ended September 30, 2006
    
    
    4,635Forfeited during quarter ended September 30, 2006
    
    
    4,702Vested during quarter ended September 30,
2006
    
    
    1,160Not vested at September 30, 2006
    
    
    202,018
 Performance Share Units
  Performance Share Units
    
    SharesOutstanding at beginning of 2006
    
    
    Granted during quarter ended March 31, 2006
    
    
    41,074Forfeited during quarter ended March 31, 2006
    
    
    1,338Not vested at March 31, 2006
    
    
    39,736Vested during quarter ended June 30, 2006
    
    
    2,478Not vested at June 30, 2006 and September 30, 2006
    
    
    37,258
 Note 11. Debtor Guarantor Financial Statements
   18




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
  19




---



##### 



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Combining Statement of Operations for the Quarter Ended September 30, 2006
  Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(In thousands)RevenuesTransportation Services
    
    $
    
    
    
    $
    
    
    
    $
    27,484
    
    
    $
    184,967
    
    
    $
    
    
    
    $
    
    
    
    $
    212,451Manufacturing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,661
    
    
    
    
    
    
    
    (556
    )
    
    
    54,105Revenues
    
    
    
    
    
    
    
    
    
    
    27,484
    
    
    
    239,628
    
    
    
    
    
    
    
    (556
    )
    
    
    266,556Cost of SalesTransportation Services
    
    
    
    
    
    
    
    
    
    
    10,001
    
    
    
    144,097
    
    
    
    
    
    
    
    
    
    
    
    154,098Manufacturing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,528
    
    
    
    
    
    
    
    (556
    )
    
    
    51,972Cost of Sales
    
    
    
    
    
    
    
    
    
    
    10,001
    
    
    
    196,625
    
    
    
    
    
    
    
    (556
    )
    
    
    206,070Gross Profit
    
    
    
    
    
    
    
    
    
    
    17,483
    
    
    
    43,003
    
    
    
    
    
    
    
    
    
    
    
    60,486Selling, General and Administrative Expenses
    
    
    
    
    
    
    68
    
    
    
    520
    
    
    
    14,926
    
    
    
    
    
    
    
    
    
    
    
    15,514Operating (Loss) Income
    
    
    
    
    
    
    (68
    )
    
    
    16,963
    
    
    
    28,077
    
    
    
    
    
    
    
    
    
    
    
    44,972Other Expense (Income)Interest Expense
    
    
    
    
    
    
    
    
    
    
    4,803
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    4,812Other, Net
    
    
    (28,406
    )
    
    
    (43,541
    )
    
    
    (31,381
    )
    
    
    (2,480
    )
    
    
    
    
    
    
    105,795
    
    
    
    (13
    )Other Expenses
    
    
    (28,406
    )
    
    
    (43,541
    )
    
    
    (26,578
    )
    
    
    (2,471
    )
    
    
    
    
    
    
    105,795
    
    
    
    4,799Income from Continuing Operations before
Income Taxes
    
    
    28,406
    
    
    
    43,473
    
    
    
    43,541
    
    
    
    30,548
    
    
    
    
    
    
    
    (105,795
    )
    
    
    40,173Income Taxes
    
    
    
    
    
    
    15,067
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,067Income from Continuing Operations
    
    
    28,406
    
    
    
    28,406
    
    
    
    43,541
    
    
    
    30,548
    
    
    
    
    
    
    
    (105,795
    )
    
    
    25,106Discontinued Operations, Net of Tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    682
    
    
    
    2,618
    
    
    
    
    
    
    
    3,300Net Income
    
    $
    28,406
    
    
    $
    28,406
    
    
    $
    43,541
    
    
    $
    31,230
    
    
    $
    2,618
    
    
    $
    (105,795
    )
    
    $
    28,406
 20




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
Combining Statement of Operations for the Quarter Ended September 30, 2005
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(In thousands)RevenuesTransportation Services
    
    $
    
    
    
    $
    
    
    
    $
    8,130
    
    
    $
    136,080
    
    
    $
    1,059
    
    
    $
    
    
    
    $
    145,269Manufacturing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,918
    
    
    
    
    
    
    
    (12,890
    )
    
    
    22,028Revenues
    
    
    
    
    
    
    
    
    
    
    8,130
    
    
    
    170,998
    
    
    
    1,059
    
    
    
    (12,890
    )
    
    
    167,297Cost of SalesTransportation Services
    
    
    
    
    
    
    
    
    
    
    8,780
    
    
    
    115,559
    
    
    
    420
    
    
    
    
    
    
    
    124,759Manufacturing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,886
    
    
    
    
    
    
    
    (12,890
    )
    
    
    19,996Cost of Sales
    
    
    
    
    
    
    
    
    
    
    8,780
    
    
    
    148,445
    
    
    
    420
    
    
    
    (12,890
    )
    
    
    144,755Gross Profit
    
    
    
    
    
    
    
    
    
    
    (650
    )
    
    
    22,553
    
    
    
    639
    
    
    
    
    
    
    
    22,542Selling, General and Administrative Expenses
    
    
    
    
    
    
    
    
    
    
    75
    
    
    
    11,318
    
    
    
    
    
    
    
    
    
    
    
    11,393Operating (Loss) Income
    
    
    
    
    
    
    
    
    
    
    (725
    )
    
    
    11,235
    
    
    
    639
    
    
    
    
    
    
    
    11,149Other Expense (Income)Interest Expense
    
    
    
    
    
    
    
    
    
    
    7,256
    
    
    
    22
    
    
    
    591
    
    
    
    
    
    
    
    7,869Other, Net
    
    
    (3,506
    )
    
    
    (5,553
    )
    
    
    (13,534
    )
    
    
    (2,080
    )
    
    
    (73
    )
    
    
    24,650
    
    
    
    (96
    )Other Expenses
    
    
    (3,506
    )
    
    
    (5,553
    )
    
    
    (6,278
    )
    
    
    (2,058
    )
    
    
    518
    
    
    
    24,650
    
    
    
    7,773Income
from Continuing Operations before Income Taxes
    
    
    3,506
    
    
    
    5,553
    
    
    
    5,553
    
    
    
    13,293
    
    
    
    121
    
    
    
    (24,650
    )
    
    
    3,376Income Taxes
    
    
    
    
    
    
    2,047
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,047Income from Continuing Operations
    
    
    3,506
    
    
    
    3,506
    
    
    
    5,553
    
    
    
    13,293
    
    
    
    121
    
    
    
    (24,650
    )
    
    
    1,329Discontinued Operations, Net of Tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    257
    
    
    
    1,920
    
    
    
    
    
    
    
    2,177Net Income
    
    $
    3,506
    
    
    $
    3,506
    
    
    $
    5,553
    
    
    $
    13,550
    
    
    $
    2,041
    
    
    $
    (24,650
    )
    
    $
    3,506
 21




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
Combining Statement of Operations for the Nine Months  Ended
September 30, 2006
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(In thousands)RevenuesTransportation Services
    
    $
    
    
    
    $
    
    
    
    $
    54,711
    
    
    $
    514,109
    
    
    $
    
    
    
    $
    
    
    
    $
    568,820Manufacturing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    153,322
    
    
    
    
    
    
    
    (45,488
    )
    
    
    107,834Revenues
    
    
    
    
    
    
    
    
    
    
    54,711
    
    
    
    667,431
    
    
    
    
    
    
    
    (45,488
    )
    
    
    676,654Cost of SalesTransportation Services
    
    
    
    
    
    
    
    
    
    
    28,707
    
    
    
    402,030
    
    
    
    
    
    
    
    
    
    
    
    430,737Manufacturing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    144,613
    
    
    
    
    
    
    
    (45,488
    )
    
    
    99,125Cost of Sales
    
    
    
    
    
    
    
    
    
    
    28,707
    
    
    
    546,643
    
    
    
    
    
    
    
    (45,488
    )
    
    
    529,862Gross Profit
    
    
    
    
    
    
    
    
    
    
    26,004
    
    
    
    120,788
    
    
    
    
    
    
    
    
    
    
    
    146,792Selling, General and Administrative Expenses
    
    
    
    
    
    
    203
    
    
    
    760
    
    
    
    45,893
    
    
    
    
    
    
    
    
    
    
    
    46,856Operating (Loss) Income
    
    
    
    
    
    
    (203
    )
    
    
    25,244
    
    
    
    74,895
    
    
    
    
    
    
    
    
    
    
    
    99,936Other Expense (Income)Interest Expense
    
    
    
    
    
    
    
    
    
    
    14,534
    
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    14,570Other, Net
    
    
    (57,258
    )
    
    
    (90,479
    )
    
    
    (79,769
    )
    
    
    (4,166
    )
    
    
    
    
    
    
    229,416
    
    
    
    (2,256
    )Other Expenses
    
    
    (57,258
    )
    
    
    (90,479
    )
    
    
    (65,235
    )
    
    
    (4,130
    )
    
    
    
    
    
    
    229,416
    
    
    
    12,314Income
from Continuing Operations before Income Taxes
    
    
    57,258
    
    
    
    90,276
    
    
    
    90,479
    
    
    
    79,025
    
    
    
    
    
    
    
    (229,416
    )
    
    
    87,622Income Taxes
    
    
    
    
    
    
    33,018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,018Income from Continuing Operations
    
    
    57,258
    
    
    
    57,258
    
    
    
    90,479
    
    
    
    79,025
    
    
    
    
    
    
    
    (229,416
    )
    
    
    54,604Discontinued Operations, Net of Tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    600
    
    
    
    2,054
    
    
    
    
    
    
    
    2,654Net Income
    
    $
    57,258
    
    
    $
    57,258
    
    
    $
    90,479
    
    
    $
    79,625
    
    
    $
    2,054
    
    
    $
    (229,416
    )
    
    $
    57,258
 22




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
Combining Statement of Operations for the Nine Months Ended September 30, 2005
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(In thousands)RevenuesTransportation Services
    
    $
    
    
    
    $
    
    
    
    $
    24,395
    
    
    $
    393,726
    
    
    $
    3,142
    
    
    $
    
    
    
    $
    421,263Manufacturing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85,820
    
    
    
    
    
    
    
    (17,718
    )
    
    
    68,102Revenues
    
    
    
    
    
    
    
    
    
    
    24,395
    
    
    
    479,546
    
    
    
    3,142
    
    
    
    (17,718
    )
    
    
    489,365Cost of SalesTransportation Services
    
    
    
    
    
    
    
    
    
    
    26,701
    
    
    
    337,353
    
    
    
    1,260
    
    
    
    
    
    
    
    365,314Manufacturing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,826
    
    
    
    
    
    
    
    (17,718
    )
    
    
    63,108Cost of Sales
    
    
    
    
    
    
    
    
    
    
    26,701
    
    
    
    418,179
    
    
    
    1,260
    
    
    
    (17,718
    )
    
    
    428,422Gross Profit
    
    
    
    
    
    
    
    
    
    
    (2,306
    )
    
    
    61,367
    
    
    
    1,882
    
    
    
    
    
    
    
    60,943Selling, General and Administrative Expenses
    
    
    
    
    
    
    
    
    
    
    308
    
    
    
    34,922
    
    
    
    
    
    
    
    
    
    
    
    35,230Operating (Loss) Income
    
    
    
    
    
    
    
    
    
    
    (2,614
    )
    
    
    26,445
    
    
    
    1,882
    
    
    
    
    
    
    
    25,713Other Expense (Income)Interest Expense
    
    
    
    
    
    
    
    
    
    
    23,802
    
    
    
    77
    
    
    
    1,744
    
    
    
    
    
    
    
    25,623Other, Net
    
    
    (3,211
    )
    
    
    (5,516
    )
    
    
    (31,932
    )
    
    
    (1,109
    )
    
    
    (181
    )
    
    
    36,997
    
    
    
    (4,952
    )Other Expenses
    
    
    (3,211
    )
    
    
    (5,516
    )
    
    
    (8,130
    )
    
    
    (1,032
    )
    
    
    1,563
    
    
    
    36,997
    
    
    
    20,671Income
from Continuing Operations before Income Taxes
    
    
    3,211
    
    
    
    5,516
    
    
    
    5,516
    
    
    
    27,477
    
    
    
    319
    
    
    
    (36,997
    )
    
    
    5,042Income Taxes
    
    
    
    
    
    
    2,305
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,305Income from Continuing Operations
    
    
    3,211
    
    
    
    3,211
    
    
    
    5,516
    
    
    
    27,477
    
    
    
    319
    
    
    
    (36,997
    )
    
    
    2,737Discontinued Operations, Net of Tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (177
    )
    
    
    651
    
    
    
    
    
    
    
    474Net Income
    
    $
    3,211
    
    
    $
    3,211
    
    
    $
    5,516
    
    
    $
    27,300
    
    
    $
    970
    
    
    $
    (36,997
    )
    
    $
    3,211
 23




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
Combining Statement of Financial Position at September 30, 2006
 (unaudited)
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(In thousands)ASSETSCURRENT ASSETSCash and Cash Equivalents
    
    $
    
    
    
    $
    
    
    
    $
    1,717
    
    
    $
    29
    
    
    $
    579
    
    
    $
    
    
    
    $
    2,325Accounts Receivable, Net
    
    
    
    
    
    
    
    
    
    
    105
    
    
    
    119,834
    
    
    
    72
    
    
    
    
    
    
    
    120,011Accounts Receivable  Intercompany
    
    
    
    
    
    
    (19,279
    )
    
    
    141,798
    
    
    
    (122,519
    )
    
    
    
    
    
    
    
    
    
    
    Inventory
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,244
    
    
    
    124
    
    
    
    
    
    
    
    58,368Deferred Tax Asset  Current
    
    
    
    
    
    
    2,559
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,559Assets Held for Sale
    
    
    
    
    
    
    
    
    
    
    461
    
    
    
    2
    
    
    
    32,568
    
    
    
    
    
    
    
    33,031Other Current Assets
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    30,824
    
    
    
    857
    
    
    
    
    
    
    
    31,714Total Current Assets
    
    
    
    
    
    
    (16,720
    )
    
    
    144,114
    
    
    
    86,414
    
    
    
    34,200
    
    
    
    
    
    
    
    248,008PROPERTIES-Net
    
    
    
    
    
    
    
    
    
    
    355,324
    
    
    
    81,370
    
    
    
    
    
    
    
    
    
    
    
    436,694INVESTMENT IN SUBSIDIARIES
    
    
    316,834
    
    
    
    347,783
    
    
    
    48,737
    
    
    
    77,998
    
    
    
    
    
    
    
    (791,352
    )
    
    
    INVESTMENT IN EQUITY INVESTEES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,090
    
    
    
    
    
    
    
    
    
    
    
    5,090OTHER ASSETS
    
    
    
    
    
    
    
    
    
    
    6,395
    
    
    
    8,749
    
    
    
    2
    
    
    
    
    
    
    
    15,146Total Assets
    
    $
    316,834
    
    
    $
    331,063
    
    
    $
    554,570
    
    
    $
    259,621
    
    
    $
    34,202
    
    
    $
    (791,352
    )
    
    $
    704,938LIABILITIESCURRENT LIABILITIESAccounts Payable
    
    $
    
    
    
    $
    
    
    
    $
    7,603
    
    
    $
    20,910
    
    
    $
    6
    
    
    $
    
    
    
    $
    28,519Accrued Payroll and Fringe Benefits
    
    
    
    
    
    
    
    
    
    
    106
    
    
    
    26,063
    
    
    
    
    
    
    
    
    
    
    
    26,169Deferred Revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,754
    
    
    
    
    
    
    
    
    
    
    
    27,754Accrued Claims and Insurance Premiums
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,726
    
    
    
    
    
    
    
    
    
    
    
    14,726Accrued Interest
    
    
    
    
    
    
    
    
    
    
    2,035
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,035Customer Deposits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,149
    
    
    
    
    
    
    
    
    
    
    
    7,149Liabilities Related to Assets Held for Sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,295
    
    
    
    
    
    
    
    9,295Other Liabilities
    
    
    
    
    
    
    6,489
    
    
    
    248
    
    
    
    29,002
    
    
    
    96
    
    
    
    
    
    
    
    35,835Total Current Liabilities
    
    
    
    
    
    
    6,489
    
    
    
    9,992
    
    
    
    125,604
    
    
    
    9,397
    
    
    
    
    
    
    
    151,482LONG-TERM DEBT
    
    
    
    
    
    
    
    
    
    
    192,800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    192,800PENSION LIABILITY
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,951
    
    
    
    
    
    
    
    
    
    
    
    19,951DEFERRED TAX LIABILITY
    
    
    
    
    
    
    12,820
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,820OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,435
    
    
    
    616
    
    
    
    
    
    
    
    11,051Total Liabilities
    
    
    
    
    
    
    19,309
    
    
    
    202,792
    
    
    
    155,990
    
    
    
    10,013
    
    
    
    
    
    
    
    388,104STOCKHOLDERS EQUITYCommon Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,795
    
    
    
    (1,795
    )
    
    
    Other Capital
    
    
    253,419
    
    
    
    253,419
    
    
    
    249,356
    
    
    
    
    
    
    
    7,936
    
    
    
    (510,711
    )
    
    
    253,419Retained Earnings
    
    
    69,071
    
    
    
    63,991
    
    
    
    111,586
    
    
    
    112,795
    
    
    
    14,261
    
    
    
    (302,633
    )
    
    
    69,071Accumulated Other Comprehensive Loss
    
    
    (5,656
    )
    
    
    (5,656
    )
    
    
    (9,164
    )
    
    
    (9,164
    )
    
    
    197
    
    
    
    23,787
    
    
    
    (5,656
    )Total Stockholders Equity
    
    
    316,834
    
    
    
    311,754
    
    
    
    351,778
    
    
    
    103,631
    
    
    
    24,189
    
    
    
    (791,352
    )
    
    
    316,834Total Liabilities and Stockholders Equity
    
    $
    316,834
    
    
    $
    331,063
    
    
    $
    554,570
    
    
    $
    259,621
    
    
    $
    34,202
    
    
    $
    (791,352
    )
    
    $
    704,938
 24




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONSOLIDATED STATEMENTS  (Continued)
Combining Statement of Financial Position at December 31, 2005
 (unaudited)
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    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
    )
    
    
    
    
    
    
    Inventory
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,358
    
    
    
    1,618
    
    
    
    
    
    
    
    44,976Deferred Tax Asset  Current
    
    
    
    
    
    
    4,644
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,644Assets Held for Sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,042
    
    
    
    
    
    
    
    1,042Other Current Assets
    
    
    
    
    
    
    
    
    
    
    1,049
    
    
    
    13,114
    
    
    
    1,582
    
    
    
    
    
    
    
    15,745Total 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
    
    
    
    255,492
    
    
    
    (31,089
    )
    
    
    74,442
    
    
    
    
    
    
    
    (552,546
    )
    
    
    INVESTMENT IN EQUITY INVESTEES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,408
    
    
    
    1,124
    
    
    
    
    
    
    
    5,532OTHER ASSETS
    
    
    
    
    
    
    
    
    
    
    7,059
    
    
    
    7,993
    
    
    
    67
    
    
    
    
    
    
    
    15,119Total Assets
    
    $
    253,701
    
    
    $
    248,657
    
    
    $
    485,351
    
    
    $
    154,675
    
    
    $
    33,446
    
    
    $
    (552,546
    )
    
    $
    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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,179Customer Deposits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,147
    
    
    
    
    
    
    
    
    
    
    
    1,147Other Liabilities
    
    
    
    
    
    
    (4,608
    )
    
    
    195
    
    
    
    23,819
    
    
    
    5,144
    
    
    
    
    
    
    
    24,550Total 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
    
    
    
    
    
    
    
    369,583STOCKHOLDERS EQUITYCommon Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,813
    
    
    
    (1,813
    )
    
    
    Other Capital
    
    
    247,742
    
    
    
    247,742
    
    
    
    247,742
    
    
    
    
    
    
    
    53,746
    
    
    
    (549,230
    )
    
    
    247,742Retained Earnings (Deficit)
    
    
    11,813
    
    
    
    6,733
    
    
    
    21,106
    
    
    
    33,171
    
    
    
    (34,929
    )
    
    
    (26,081
    )
    
    
    11,813Accumulated Other Comprehensive Loss
    
    
    (5,854
    )
    
    
    (5,854
    )
    
    
    (9,362
    )
    
    
    (9,362
    )
    
    
    
    
    
    
    24,578
    
    
    
    (5,854
    )Total Stockholders Equity
    
    
    253,701
    
    
    
    248,621
    
    
    
    259,486
    
    
    
    23,809
    
    
    
    20,630
    
    
    
    (552,546
    )
    
    
    253,701Total Liabilities and Stockholders Equity
    
    $
    253,701
    
    
    $
    248,657
    
    
    $
    485,351
    
    
    $
    154,675
    
    
    $
    33,446
    
    
    $
    (552,546
    )
    
    $
    623,284
 25




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
Combining Statement of Cash Flows for the Nine Months Ended September 30, 2006
  Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(In thousands)OPERATING ACTIVITIESIncome from Continuing Operations
    
    $
    57,258
    
    
    $
    57,258
    
    
    $
    90,479
    
    
    $
    79,025
    
    
    $
    
    
    
    $
    (229,416
    )
    
    $
    54,604Adjustments to Reconcile Income from ContinuingOperations to Net Cash Provided by Operating Activities:Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    28,124
    
    
    
    7,179
    
    
    
    
    
    
    
    
    
    
    
    35,303Debt Issuance Cost Amortization
    
    
    
    
    
    
    
    
    
    
    832
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    832(Gain) Loss on Property Dispositions
    
    
    
    
    
    
    
    
    
    
    (119
    )
    
    
    76
    
    
    
    
    
    
    
    
    
    
    
    (43
    )Contributions to Defined Benefit Pension Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (454
    )
    
    
    
    
    
    
    
    
    
    
    (454
    )Other Operating Activities
    
    
    (57,258
    )
    
    
    (82,303
    )
    
    
    (76,834
    )
    
    
    968
    
    
    
    1,621
    
    
    
    229,416
    
    
    
    15,610Changes in Operating Assets and Liabilities:Accounts Receivable
    
    
    
    
    
    
    
    
    
    
    (67
    )
    
    
    (34,755
    )
    
    
    863
    
    
    
    
    
    
    
    (33,959
    )Intercompany Accounts Receivable/Payable
    
    
    
    
    
    
    7,800
    
    
    
    10,907
    
    
    
    (21,210
    )
    
    
    (515
    )
    
    
    3,018
    
    
    
    Inventory
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,204
    )
    
    
    12
    
    
    
    
    
    
    
    (14,192
    )Accrued Interest
    
    
    
    
    
    
    
    
    
    
    (3,144
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,144
    )Other Current Assets
    
    
    
    
    
    
    2,085
    
    
    
    (28
    )
    
    
    (17,100
    )
    
    
    (592
    )
    
    
    
    
    
    
    (15,635
    )Other Current Liabilities
    
    
    
    
    
    
    11,097
    
    
    
    591
    
    
    
    23,524
    
    
    
    (3,488
    )
    
    
    
    
    
    
    31,724Net Cash
Provided by (Used in) Operating Activities before Reorganization Items
    
    
    
    
    
    
    (4,063
    )
    
    
    50,741
    
    
    
    23,049
    
    
    
    (2,099
    )
    
    
    3,018
    
    
    
    70,646Reorganization Items Paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (349
    )
    
    
    
    
    
    
    
    
    
    
    (349
    )Net Cash
Provided by (Used in) Continuing Operating Activities
    
    
    
    
    
    
    (4,063
    )
    
    
    50,741
    
    
    
    22,700
    
    
    
    (2,099
    )
    
    
    3,018
    
    
    
    70,297Net Cash
Provided by Operating Activities of Discontinued Segment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    600
    
    
    
    (3,297
    )
    
    
    
    
    
    
    (2,697
    )Net Cash Provided by (Used in) Operating Activities
    
    
    
    
    
    
    (4,063
    )
    
    
    50,741
    
    
    
    23,300
    
    
    
    (5,396
    )
    
    
    3,018
    
    
    
    67,600INVESTING ACTIVITIESProperty Additions
    
    
    
    
    
    
    
    
    
    
    (36,962
    )
    
    
    (21,711
    )
    
    
    (8
    )
    
    
    
    
    
    
    (58,681
    )Proceeds from Property Dispositions
    
    
    
    
    
    
    
    
    
    
    515
    
    
    
    173
    
    
    
    
    
    
    
    
    
    
    
    688Other Investing Activities
    
    
    
    
    
    
    
    
    
    
    222
    
    
    
    (1,539
    )
    
    
    (198
    )
    
    
    
    
    
    
    (1,515
    )Net Cash Used in Investing Activities
    
    
    
    
    
    
    
    
    
    
    (36,225
    )
    
    
    (23,077
    )
    
    
    (206
    )
    
    
    
    
    
    
    (59,508
    )FINANCING ACTIVITIESAsset Based Revolver Borrowings
    
    
    
    
    
    
    
    
    
    
    (6,700
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,700
    )2015 Senior Note Repayments
    
    
    
    
    
    
    
    
    
    
    (500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (500
    )Outstanding Checks
    
    
    
    
    
    
    
    
    
    
    (13,321
    )
    
    
    (232
    )
    
    
    
    
    
    
    
    
    
    
    (13,553
    )Debt Costs
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )Tax Benefit of Share Based Compensation
    
    
    
    
    
    
    4,063
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,063Acquisition of Treasury Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,018
    )
    
    
    (3,018
    )Other Financing Activities
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )Net Cash (Used in) Provided by Financing Activities
    
    
    
    
    
    
    4,063
    
    
    
    (20,539
    )
    
    
    (232
    )
    
    
    
    
    
    
    (3,018
    )
    
    
    (19,726
    )Decrease in Cash and Cash Equivalents
    
    
    
    
    
    
    
    
    
    
    (6,023
    )
    
    
    (9
    )
    
    
    (5,602
    )
    
    
    
    
    
    
    (11,634
    )Cash and Cash Equivalents at Beginning of Period
    
    
    
    
    
    
    
    
    
    
    7,740
    
    
    
    38
    
    
    
    6,181
    
    
    
    
    
    
    
    13,959Cash and Cash Equivalents at End of Period
    
    $
    
    
    
    $
    
    
    
    $
    1,717
    
    
    $
    29
    
    
    $
    579
    
    
    $
    
    
    
    $
    2,325
 26




---



##### 



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Combining Statement of Cash Flows for the Nine Months Ended September 30, 2005
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(In thousands)OPERATING ACTIVITIESIncome from Continuing Operations
    
    $
    3,211
    
    
    $
    3,211
    
    
    $
    5,516
    
    
    $
    27,477
    
    
    $
    319
    
    
    $
    (36,997
    )
    
    $
    2,737Adjustments to Reconcile Income from ContinuingOperations to Net Cash Provided by Operating Activities:Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    26,701
    
    
    
    7,313
    
    
    
    1,242
    
    
    
    
    
    
    
    35,256Debt Issuance Cost Amortization
    
    
    
    
    
    
    
    
    
    
    2,562
    
    
    
    
    
    
    
    107
    
    
    
    
    
    
    
    2,669Gain on Property Dispositions
    
    
    
    
    
    
    
    
    
    
    (4,209
    )
    
    
    (38
    )
    
    
    (1
    )
    
    
    
    
    
    
    (4,248
    )Contributions to Defined Benefit Pension Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,417
    )
    
    
    
    
    
    
    
    
    
    
    (3,417
    )Other Operating Activities
    
    
    (3,211
    )
    
    
    (2,897
    )
    
    
    (62,822
    )
    
    
    36,730
    
    
    
    (526
    )
    
    
    36,507
    
    
    
    3,781Changes in Operating Assets and Liabilities:Accounts Receivable
    
    
    
    
    
    
    
    
    
    
    (108
    )
    
    
    (14,965
    )
    
    
    338
    
    
    
    
    
    
    
    (14,735
    )Intercompany Accounts Receivable/Payable
    
    
    
    
    
    
    (2,519
    )
    
    
    27,612
    
    
    
    (22,593
    )
    
    
    (2,500
    )
    
    
    
    
    
    
    Inventory
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,498
    )
    
    
    173
    
    
    
    
    
    
    
    (17,325
    )Accrued Interest
    
    
    
    
    
    
    
    
    
    
    2,243
    
    
    
    37
    
    
    
    280
    
    
    
    
    
    
    
    2,560Other Current Assets
    
    
    
    
    
    
    (2,146
    )
    
    
    761
    
    
    
    (2,009
    )
    
    
    (138
    )
    
    
    559
    
    
    
    (2,973
    )Other Current Liabilities
    
    
    
    
    
    
    4,351
    
    
    
    1,835
    
    
    
    11,676
    
    
    
    (601
    )
    
    
    (69
    )
    
    
    17,192Net Cash Provided by (Used in) Operating Activities
before Reorganization Items
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    22,713
    
    
    
    (1,307
    )
    
    
    
    
    
    
    21,497Reorganization Items Paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,988
    )
    
    
    
    
    
    
    
    
    
    
    (12,988
    )Net Cash Provided by (Used in) Operating
Activities
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    9,725
    
    
    
    (1,307
    )
    
    
    
    
    
    
    8,509Net Cash Provided by Operating Activities
of Discontinued Segment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (177
    )
    
    
    2,025
    
    
    
    
    
    
    
    1,848Net Cash Provided by Operating Activities
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    9,548
    
    
    
    718
    
    
    
    
    
    
    
    10,357INVESTING ACTIVITIESProperty Additions
    
    
    
    
    
    
    
    
    
    
    (21,129
    )
    
    
    (4,969
    )
    
    
    (31
    )
    
    
    
    
    
    
    (26,129
    )Proceeds from Property Dispositions
    
    
    
    
    
    
    
    
    
    
    12,663
    
    
    
    537
    
    
    
    300
    
    
    
    
    
    
    
    13,500Net Change in Restricted Cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,148
    )
    
    
    
    
    
    
    (1,148
    )Investment in Vessel Leasing LLC
    
    
    
    
    
    
    
    
    
    
    (2,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,500
    )Other Investing Activities
    
    
    
    
    
    
    
    
    
    
    206
    
    
    
    (2,306
    )
    
    
    58
    
    
    
    
    
    
    
    (2,042
    )Net Cash Used in Investing Activities
    
    
    
    
    
    
    
    
    
    
    (10,760
    )
    
    
    (6,738
    )
    
    
    (821
    )
    
    
    
    
    
    
    (18,319
    )FINANCING ACTIVITIESLong-Term Debt Repaid
    
    
    
    
    
    
    
    
    
    
    (382,146
    )
    
    
    
    
    
    
    (1,690
    )
    
    
    
    
    
    
    (383,836
    )Asset Based Revolver Borrowings
    
    
    
    
    
    
    
    
    
    
    170,710
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    170,7102015 Senior Note Borrowings
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000Outstanding Checks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,814
    )
    
    
    
    
    
    
    
    
    
    
    (2,814
    )Debt Costs
    
    
    
    
    
    
    
    
    
    
    (13,233
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,233
    )Other Financing Activities
    
    
    
    
    
    
    
    
    
    
    (619
    )
    
    
    
    
    
    
    (1,163
    )
    
    
    
    
    
    
    (1,782
    )Net Cash Used in Financing Activities
    
    
    
    
    
    
    
    
    
    
    (25,288
    )
    
    
    (2,814
    )
    
    
    (2,853
    )
    
    
    
    
    
    
    (30,955
    )Decrease in Cash and Cash Equivalents
    
    
    
    
    
    
    
    
    
    
    (35,957
    )
    
    
    (4
    )
    
    
    (2,956
    )
    
    
    
    
    
    
    (38,917
    )Cash and Cash Equivalents at Beginning of Period
    
    
    
    
    
    
    
    
    
    
    39,452
    
    
    
    30
    
    
    
    7,163
    
    
    
    
    
    
    
    46,645Cash and Cash Equivalents at End of Period
    
    $
    
    
    
    $
    
    
    
    $
    3,495
    
    
    $
    26
    
    
    $
    4,207
    
    
    $
    
    
    
    $
    7,728
 27




---



##### 



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in thousands)
 Note 12. Subsequent Events
  28




---



##### 



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
 This discussion includes certain forward-looking statements that involve many risks and
uncertainties. When used, words such as anticipate, expect, believe, intend, may be and
will be and similar words or phrases, or the negative thereof, unless the context requires
otherwise, are intended to identify forward-looking statements. These forward-looking statements
are based on managements present expectations and beliefs about future events. As with any
projection or forecast, these statements are inherently susceptible to uncertainty and changes in
circumstances. The Company is under no obligation to, and expressly disclaims any obligation to,
update or alter its forward- looking statements whether as a result of such changes, new
information, subsequent events or otherwise.
 See the risk factors included in Item 1A of this report for a detailed discussion of
important factors that could cause actual results to differ materially from those reflected in such
forward-looking statements. The potential for actual results to differ materially from such
forward-looking statements should be considered in evaluating our outlook.
 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
nine months ended September 30, 2006 compared to the
results of operations for the quarter and nine months ended
September 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
September 30, 2006 and an analysis of the Companys cash
flows for the nine months ended September 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, that require significant
judgment and that 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.
 29




---



##### 




    
    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
 ®
 30




---



##### 



The Industry
 Transportation Services Industry:
   31




---



##### 



The Manufacturing Industry:
 32




---



##### 



Consolidated Financial Overview
      Transportation Services:
   33




---



##### 



34




---



##### 



35




---



##### 



Key operating statistics
 % change to prior
    
    
    
    
    
    % change to priorQuarter ended
    
    year quarter
    
    Nine months ended
    
    year YTDSeptember 30, 2006
    
    Increase (decrease)
    
    September 30, 2006
    
    Increase (decrease)Affreightment Ton Miles (in thousands):Total Dry
    
    
    9,904,199
    
    
    
    12.0
    %
    
    
    28,407,955
    
    
    
    4.8
    %Ton-miles per average dry affreightment
barge
    
    
    3,531
    
    
    
    12.8
    %
    
    
    10,159
    
    
    
    5.8
    %Liquid barge affreightment:Total Liquid
    
    
    938,374
    
    
    
    1.7
    %
    
    
    2,852,757
    
    
    
    (7.7
    %)Ton-miles per average liquid
affreightment barge
    
    
    3,475
    
    
    
    10.4
    %
    
    
    10,152
    
    
    
    0.1
    %Total ton miles
    
    
    10,842,573
    
    
    
    10.6
    %
    
    
    31,260,712
    
    
    
    3.5
    %Ton-miles per average affreightment barge
    
    
    3,526
    
    
    
    12.5
    %
    
    
    10,158
    
    
    
    5.2
    %Rates per ton mile/Revenues per average
barge:Increase in dry rate per ton mile
    
    
    
    
    
    
    37.6
    %
    
    
    
    
    
    
    33.4
    %Increase in fuel neutral dry rate per
ton mile
    
    
    
    
    
    
    31.8
    %
    
    
    
    
    
    
    27.7
    %Increase in liquid rate per ton mile
    
    
    
    
    
    
    21.0
    %
    
    
    
    
    
    
    22.3
    %Increase in fuel neutral liquid rate per
ton mile
    
    
    
    
    
    
    11.0
    %
    
    
    
    
    
    
    11.9
    %Overall rate per ton mile
    
    $
    15.96
    
    
    
    34.1
    %
    
    $
    14.72
    
    
    
    30.4
    %Overall fuel neutral rate per ton mile
    
    $
    15.19
    
    
    
    27.6
    %
    
    $
    14.00
    
    
    
    24.0
    %Revenue per average barge operated
    
    $
    66,265
    
    
    
    47.2
    %
    
    $
    177,772
    
    
    
    37.3
    %Fuel Price and Volume Data:Fuel price per gallon
    
    $
    2.09
    
    
    
    34.2
    %
    
    $
    1.99
    
    
    
    28.7
    %Fuel Gallons
    
    
    20,347
    
    
    
    13.7
    %
    
    
    59,781
    
    
    
    5.6
    %Revenue data (in thousands):Affreightment revenue
    
    $
    172,910
    
    
    
    48.9
    %
    
    $
    459,699
    
    
    
    34.9
    %Towing
    
    
    13,563
    
    
    
    69.0
    %
    
    
    35,563
    
    
    
    53.6
    %Charter and Day rate
    
    
    12,235
    
    
    
    93.6
    %
    
    
    30,067
    
    
    
    86.0
    %Demurrage
    
    
    9,556
    
    
    
    (1.5
    %)
    
    
    28,566
    
    
    
    17.4
    %Other
    
    
    2,724
    
    
    
    (24.3
    %)
    
    
    10,532
    
    
    
    (14.3
    %)Non-affreightment revenue
    
    
    38,078
    
    
    
    37.7
    %
    
    
    104,727
    
    
    
    37.9
    %Total domestic transportation revenue
    
    $
    210,988
    
    
    
    46.8
    %
    
    $
    564,426
    
    
    
    35.6
    %
 36




---



##### 



Barge Fleet Changes
 Barges - Quarter ended September 30, 2006
    
    Dry
    
    Tankers
    
    TotalBarges operated as of the end of the 2nd quarter 2006
    
    
    2,815
    
    
    
    378
    
    
    
    3,193Retired
    
    
    (15
    )
    
    
    (4
    )
    
    
    (19
    )New builds
    
    
    
    
    
    
    
    
    
    
    Change in number of barges leased
    
    
    
    
    
    
    
    
    
    
    Barges operated as of the end of the 3rd quarter 2006
    
    
    2,800
    
    
    
    374
    
    
    
    3,174
 Barges - Nine months ended September 30, 2006
    
    Dry
    
    Tankers
    
    TotalBarges operated as of the end of 2005
    
    
    2,803
    
    
    
    371
    
    
    
    3,174Retired
    
    
    (48
    )
    
    
    (15
    )
    
    
    (63
    )New builds
    
    
    50
    
    
    
    16
    
    
    
    66Change in number of barges leased
    
    
    (5
    )
    
    
    2
    
    
    
    (3
    )Barges operated as of the end of the 3rd quarter 2006
    
    
    2,800
    
    
    
    374
    
    
    
    3,174
  Owned Boat Counts and Average Age by Horsepower Class
 AverageHorsepower class
    
    Number
    
    Age1950 or less
    
    
    44
    
    
    
    30.0Less than 4300
    
    
    20
    
    
    
    33.3Less than 6200
    
    
    43
    
    
    
    31.87000 or over
    
    
    15
    
    
    
    29.2Total / overall average age
    
    
    122
    
    
    
    31.1
  37




---



##### 



Transportation Services (continued):
     Manufacturing
 38




---



##### 



Manufacturing segment units produced for external sales or internal use
 Quarters ended
    
    Nine months endedSeptember 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005External sales:Liquid tank barges
    
    
    7
    
    
    
    17
    
    
    
    17
    
    
    
    46Ocean tank barges
    
    
    2
    
    
    
    0
    
    
    
    2
    
    
    
    1Dry cargo barges
    
    
    59
    
    
    
    1
    
    
    
    136
    
    
    
    1Total external units sold
    
    
    68
    
    
    
    18
    
    
    
    155
    
    
    
    48Internal into production:Liquid tank barges
    
    
    0
    
    
    
    13
    
    
    
    16
    
    
    
    16Dry cargo barges
    
    
    0
    
    
    
    0
    
    
    
    50
    
    
    
    0Total units into production
    
    
    0
    
    
    
    13
    
    
    
    66
    
    
    
    16Total units produced
    
    
    68
    
    
    
    31
    
    
    
    221
    
    
    
    64
  39




---



##### 



Consolidated Financial Overview  Non-GAAP Financial Measure Reconciliation
 AMERICAN BARGE LINE COMPANY
NET INCOME TO EBITDA RECONCILIATION
(Dollars in thousands)
(Unaudited)
 Quarter Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Income from Continuing Operations
    
    $
    25,106
    
    
    $
    1,329
    
    
    $
    54,604
    
    
    $
    2,737Discontinued Operations, Net of Taxes
    
    
    3,300
    
    
    
    2,177
    
    
    
    2,654
    
    
    
    474Consolidated Net Income
    
    $
    28,406
    
    
    $
    3,506
    
    
    $
    57,258
    
    
    $
    3,211Adjustments from Continuing Operations:Interest Income
    
    
    (6
    )
    
    
    (73
    )
    
    
    (26
    )
    
    
    (273
    )Interest Expense
    
    
    4,812
    
    
    
    7,869
    
    
    
    14,570
    
    
    
    25,623Depreciation and Amortization
    
    
    11,862
    
    
    
    11,745
    
    
    
    35,303
    
    
    
    35,256Taxes
    
    
    15,067
    
    
    
    2,047
    
    
    
    33,018
    
    
    
    2,305Adjustments from Discontinued Operations:Interest Income
    
    
    (195
    )
    
    
    (122
    )
    
    
    (583
    )
    
    
    (379
    )Depreciation and Amortization
    
    
    386
    
    
    
    488
    
    
    
    1,428
    
    
    
    1,479Taxes
    
    
    1,652
    
    
    
    644
    
    
    
    881
    
    
    
    785EBITDA from Continuing Operations
    
    
    56,841
    
    
    
    22,917
    
    
    
    137,469
    
    
    
    65,648EBITDA from Discontinued Operations
    
    
    5,143
    
    
    
    3,187
    
    
    
    4,380
    
    
    
    2,359Consolidated EBITDA
    
    $
    61,984
    
    
    $
    26,104
    
    
    $
    141,849
    
    
    $
    68,007Transportation Net Income (Loss)
    
    $
    24,445
    
    
    $
    31
    
    
    $
    49,999
    
    
    $
    (798
    )Interest Income
    
    
    (6
    )
    
    
    (73
    )
    
    
    (26
    )
    
    
    (273
    )Interest Expense
    
    
    4,812
    
    
    
    7,869
    
    
    
    14,570
    
    
    
    25,623Depreciation and Amortization
    
    
    11,111
    
    
    
    11,030
    
    
    
    33,118
    
    
    
    33,155Taxes
    
    
    15,067
    
    
    
    2,047
    
    
    
    33,018
    
    
    
    2,305Transportation EBITDA
    
    $
    55,429
    
    
    $
    20,904
    
    
    $
    130,679
    
    
    $
    60,012Manufacturing Net Income
    
    $
    886
    
    
    $
    2,784
    
    
    $
    13,420
    
    
    $
    4,542Interest Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and Amortization
    
    
    468
    
    
    
    460
    
    
    
    1,367
    
    
    
    1,341Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Manufacturing EBITDA
    
    
    1,354
    
    
    
    3,244
    
    
    
    14,787
    
    
    
    5,883Intersegment Profit
    
    
    (120
    )
    
    
    (1,454
    )
    
    
    (8,845
    )
    
    
    (1,477
    )External Manufacturing EBITDA
    
    $
    1,234
    
    
    $
    1,790
    
    
    $
    5,942
    
    
    $
    4,406
 40




---



##### 



41




---



##### 



Outlook
 Transportation Services:
     42




---



##### 



43




---



##### 



Manufacturing:
    44




---



##### 



AMERICAN BARGE LINE COMPANY OPERATING RESULTS by BUSINESS SEGMENT
Quarter Ended September 30, 2006 as compared with Quarter Ended September 30, 2005
(Unaudited)
 % of ConsolidatedQuarters Ended
    
    
    
    
    
    
    RevenueSeptember 30,
    
    
    
    
    
    
    3rd Quarter2006
    
    
    2005
    
    
    Variance
    
    
    2006
    
    
    2005(Dollars in thousands except where noted)REVENUETransportation
    
    $
    210,988
    
    
    $
    143,759
    
    
    
    67,229
    
    
    
    79.2
    %
    
    
    85.9
    %Manufacturing (external and internal)
    
    
    54,661
    
    
    
    34,919
    
    
    
    19,742
    
    
    
    20.5
    %
    
    
    20.9
    %Other
    
    
    1,463
    
    
    
    1,510
    
    
    
    (47
    )
    
    
    0.6
    %
    
    
    0.9
    %Intersegment manufacturing elimination
    
    
    (556
    )
    
    
    (12,891
    )
    
    
    12,335
    
    
    
    (0.2
    %)
    
    
    (7.7
    %)Consolidated Revenue
    
    
    266,556
    
    
    
    167,297
    
    
    
    99,259
    
    
    
    100.0
    %
    
    
    100.0
    %OPERATING EXPENSETransportation
    
    
    166,760
    
    
    
    133,904
    
    
    
    32,856Manufacturing (external and internal)
    
    
    53,693
    
    
    
    32,140
    
    
    
    21,553Other
    
    
    1,567
    
    
    
    1,541
    
    
    
    26Intersegment manufacturing elimination
    
    
    (436
    )
    
    
    (11,437
    )
    
    
    11,001Consolidated Operating Expense
    
    
    221,584
    
    
    
    156,148
    
    
    
    65,436
    
    
    
    83.1
    %
    
    
    93.3
    %OPERATING INCOMETransportation
    
    
    44,228
    
    
    
    9,855
    
    
    
    34,373Manufacturing (external and internal)
    
    
    968
    
    
    
    2,779
    
    
    
    (1,811
    )Other
    
    
    (104
    )
    
    
    (31
    )
    
    
    (73
    )Intersegment manufacturing elimination
    
    
    (120
    )
    
    
    (1,454
    )
    
    
    1,334Consolidated Operating Income
    
    
    44,972
    
    
    
    11,149
    
    
    
    33,823
    
    
    
    16.9
    %
    
    
    6.7
    %Interest Expense
    
    
    4,812
    
    
    
    7,869
    
    
    
    (3,057
    )Other Expense (Income)
    
    
    (13
    )
    
    
    (96
    )
    
    
    83Income from Continuing Operations
before Income Taxes
    
    
    40,173
    
    
    
    3,376
    
    
    
    36,797Income Taxes
    
    
    15,067
    
    
    
    2,047
    
    
    
    13,020Income from Continuing Operations
    
    
    25,106
    
    
    
    1,329
    
    
    
    23,777Discontinued Operations, Net of Tax
    
    
    3,300
    
    
    
    2,177
    
    
    
    1,123Net Income
    
    $
    28,406
    
    
    $
    3,506
    
    
    $
    24,900Domestic Barges Operated (average of
period beginning and end)
    
    
    3,184
    
    
    
    3,194
    
    
    
    (10
    )Revenue per Domestic Barge Operated
(Actual)
    
    $
    66,265
    
    
    $
    45,009
    
    
    $
    21,256
 45




---



##### 



RESULTS OF OPERATIONS
 Quarter ended September 30, 2006 comparison to quarter ended September 30, 2005
 Revenue.
    Operating Expense.
  46




---



##### 



Operating Income.
   Interest Expense.
 Income Tax Expense
 Discontinued Operations, Net of Taxes.
 Net Income.
 47




---



##### 



AMERICAN BARGE LINE COMPANY OPERATING RESULTS by BUSINESS SEGMENT
Nine Months Ended September 30, 2006 as compared with Nine Months Ended September 30, 2005
(Unaudited)
 % of ConsolidatedRevenueNine Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    
    
    
    
    September 30,2006
    
    
    2005
    
    
    Variance
    
    
    2006
    
    
    2005(Dollars in thousands except where noted)REVENUETransportation
    
    $
    564,426
    
    
    $
    416,351
    
    
    
    148,075
    
    
    
    83.4
    %
    
    
    85.1
    %Manufacturing (external and internal)
    
    
    153,322
    
    
    
    85,820
    
    
    
    67,502
    
    
    
    22.7
    %
    
    
    17.5
    %Other
    
    
    4,394
    
    
    
    4,912
    
    
    
    (518
    )
    
    
    0.7
    %
    
    
    1.0
    %Intersegment manufacturing elimination
    
    
    (45,488
    )
    
    
    (17,718
    )
    
    
    (27,770
    )
    
    
    (6.7
    %)
    
    
    (3.6
    %)Consolidated Revenue
    
    
    676,654
    
    
    
    489,365
    
    
    
    187,289
    
    
    
    100.0
    %
    
    
    100.0
    %OPERATING EXPENSETransportation
    
    
    469,140
    
    
    
    394,124
    
    
    
    75,016Manufacturing (external and internal)
    
    
    139,821
    
    
    
    81,323
    
    
    
    58,498Other
    
    
    4,400
    
    
    
    4,446
    
    
    
    (46
    )Intersegment manufacturing elimination
    
    
    (36,643
    )
    
    
    (16,241
    )
    
    
    (20,402
    )Consolidated Operating Expense
    
    
    576,718
    
    
    
    463,652
    
    
    
    113,066
    
    
    
    85.2
    %
    
    
    94.8
    %OPERATING INCOMETransportation
    
    
    95,286
    
    
    
    22,227
    
    
    
    73,059Manufacturing (external and internal)
    
    
    13,501
    
    
    
    4,497
    
    
    
    9,004Other
    
    
    (6
    )
    
    
    466
    
    
    
    (472
    )Intersegment manufacturing elimination
    
    
    (8,845
    )
    
    
    (1,477
    )
    
    
    (7,368
    )Consolidated Operating Income
    
    
    99,936
    
    
    
    25,713
    
    
    
    74,223
    
    
    
    14.8
    %
    
    
    5.3
    %Interest Expense
    
    
    14,570
    
    
    
    25,623
    
    
    
    (11,053
    )Other Expense (Income)
    
    
    (2,256
    )
    
    
    (4,952
    )
    
    
    2,696Income from Continuing Operations
before Income Taxes
    
    
    87,622
    
    
    
    5,042
    
    
    
    82,580Income Taxes
    
    
    33,018
    
    
    
    2,305
    
    
    
    30,713Income from Continuing Operations
    
    
    54,604
    
    
    
    2,737
    
    
    
    51,867Discontinued Operations, Net of Tax
    
    
    2,654
    
    
    
    474
    
    
    
    2,180Net Income
    
    $
    57,258
    
    
    $
    3,211
    
    
    $
    54,047Domestic Barges Operated (average of
period beginning and end)
    
    
    3,175
    
    
    
    3,215
    
    
    
    (40
    )Revenue per Domestic Barge Operated
(Actual)
    
    $
    177,772
    
    
    $
    129,503
    
    
    $
    48,269
 48




---



##### 



Nine months ended September 30, 2006 comparison to nine months ended September 30, 2005
 Revenue.
    Operating Expense.
   49




---



##### 



Operating Income.
 Interest Expense.
 Other Income.
 Income Tax Expense.
 Discontinued
Operations, Net of Tax.
 Net Income.
 50




---



##### 



LIQUIDITY AND CAPITAL RESOURCES
    Our Indebtedness
   51




---



##### 



Net Cash, Capital Expenditures and Cash Flow
       52




---



##### 



CHANGES IN ACCOUNTING STANDARDS
     53




---



##### 



.
    CRITICAL ACCOUNTING POLICIES
  54




---



##### 



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Fuel Price Risk
  Interest Rate and Other Risks
  Foreign Currency Exchange Rate Risks
  55




---



##### 



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
 Changes in Internal Control over Financial Reporting.
 
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
 56




---



##### 



Current Legal Proceeding.
 Miller Appeal.
     57




---



##### 



Environmental Litigation.
 
    
    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 the Company, 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 September 30, 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
 58




---



##### 



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 September 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 September 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 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.
 59




---



##### 



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.
  We are subject to adverse weather and river conditions.
  60




---



##### 



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.
  61




---



##### 



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.
   RISKS RELATED TO OUR BUSINESS
 Our aging fleet of dry cargo barges may lead to increased costs and disruptions in our
operations.
  62




---



##### 



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.
  63




---



##### 



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.
  64




---



##### 



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.
  The loss of key personnel, including highly skilled and licensed vessel personnel, could
adversely affect our business.
  65




---



##### 



Failure to comply with environmental, health and safety regulations could result in
substantial penalties and changes to our operations.
      66




---



##### 



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.
  
 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
  67




---



##### 



ITEM 6. EXHIBITS.
 Exhibit No.
    
    Description3.1
    
    
    Second Amended and Restated Bylaws of American Commercial Lines Inc., dated July 27, 2006
(Incorporated by reference to Exhibit 3.1 to the Current Report of American Commercial Lines Inc.
on Form 8-K (File No. 000-51562) filed by ACL with the Securities and Exchange Commission on
August 1, 2006).4.1
    
    
    First Supplemental Indenture, dated as of September 6, 2006 to the Indenture dated February 11,
2005, among American Commercial Lines LLC, ACL Finance Corp., the guarantors named therein and the
Wilmington Trust Company, as Trustee (Incorporated by reference to Exhibit 4.1 to the Current
Report of American Commercial Lines Inc. on Form 8-K (File No. 000-51562) filed by ACL with the
Securities and Exchange Commission on September 11, 2006).10.1
    
    
    Amendment to Employment Agreement by and between American Commercial Lines Inc. and Jerry R.
Linzey, effective as of August 1, 2006 (Incorporated by reference to Exhibit 10.1 to the Current
Report of American Commercial Lines Inc. on Form 8-K (File No. 000-51562) filed by ACL with the
Securities and Exchange Commission on August 11, 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.
 68




---



##### 



SIGNATURES
  AMERICAN BARGE LINE COMPANYBy:
    /s/ Mark R. HoldenMark R. HoldenPresident and Chief Executive OfficerBy:
    /s/ Christopher A. BlackChristopher A. BlackSenior Vice President and Chief Financial Officer
(Principal Financial Officer)  69




---



##### 



INDEX TO EXHIBITS
 Exhibit No.
    
    Description3.1
    
    
    Second Amended and Restated Bylaws of American
Commercial Lines Inc., dated July 27, 2006
(Incorporated by reference to Exhibit 3.1 to the
Current Report of American Commercial Lines Inc. on
Form 8-K (File No. 000-51562) filed by ACL with the
Securities and Exchange Commission on August 1,
2006).4.1
    
    
    First Supplemental Indenture, dated as of September
6, 2006 to the Indenture dated February 11, 2005,
among American Commercial Lines LLC, ACL Finance
Corp., the guarantors named therein and the
Wilmington Trust Company, as Trustee (Incorporated
by reference to Exhibit 4.1 to the Current Report of
American Commercial Lines Inc. on Form 8-K (File No.
000-51562) filed by ACL with the Securities and
Exchange Commission on September 11, 2006).10.1
    
    
    Amendment to Employment Agreement by and between
American Commercial Lines Inc. and Jerry R. Linzey,
effective as of August 1, 2006 (Incorporated by
reference to Exhibit 10.1 to the Current Report of
American Commercial Lines Inc. on Form 8-K (File No.
000-51562) filed by ACL with the Securities and
Exchange Commission on August 11, 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.
 70