##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 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
    
    03-0552366(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)
 £ R
  Large accelerated filer £
    
    Accelerated filer £
    
    Non-accelerated filer R
 £ R
  R £




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##### 



AMERICAN BARGE LINE COMPANY
 QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006
 TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATION
    
    3Item 1:
    
    Financial Statements (unaudited)
    
    3Condensed Consolidated Statements of Operations
    
    3Condensed Consolidated Statements of Financial Position
    
    4Condensed Consolidated Statements of Cash Flows
    
    5Notes to Condensed Consolidated Financial Statements
    
    6Item 2:
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    19Item 3:
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    27Item 4:
    
    Controls and Procedures
    
    28PART II OTHER INFORMATION
    
    29Item 1:
    
    Legal Proceedings
    
    29Item 1A:
    
    Risk Factors
    
    31Item 6:
    
    Exhibits
    
    37Signatures
    
    
    
    39Certification of Chief Executive OfficerCertification of Chief Financial Officer1350 Certification of Chief Executive Officer1350 Certification of Chief Financial Officer
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
 AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Quarters endedMarch 31,
    
    
    March 31,2006
    
    
    2005(Unaudited)(In thousands)REVENUE
    
    $
    198,359
    
    
    $
    146,322OPERATING EXPENSEMaterials, Supplies and Other
    
    
    66,334
    
    
    
    52,815Rent
    
    
    5,634
    
    
    
    5,207Labor and Fringe Benefits
    
    
    34,685
    
    
    
    32,259Fuel
    
    
    37,664
    
    
    
    26,545Depreciation and Amortization
    
    
    12,082
    
    
    
    12,279Taxes, Other Than Income Taxes
    
    
    4,537
    
    
    
    4,417Selling, General & Administrative
    
    
    16,321
    
    
    
    12,440Total Operating Expenses
    
    
    177,257
    
    
    
    145,962OPERATING INCOME
    
    
    21,102
    
    
    
    360OTHER EXPENSE (INCOME)Interest Expense
    
    
    4,776
    
    
    
    10,362Other, Net
    
    
    (1,707
    )
    
    
    (1,308
    )Total Other Expenses
    
    
    3,069
    
    
    
    9,054INCOME (LOSS) BEFORE INCOME TAXES
    
    
    18,033
    
    
    
    (8,694
    )INCOME TAXES (BENEFIT)
    
    
    6,885
    
    
    
    (2,366
    )NET INCOME (LOSS)
    
    $
    11,148
    
    
    $
    (6,328
    )
  3




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AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 March 31,
    
    
    December 31,2006
    
    
    2005(Unaudited)(In thousands, except shares and per share amounts)ASSETSCURRENT ASSETSCash and Cash Equivalents
    
    $
    10,853
    
    
    $
    13,959Accounts Receivable, Net
    
    
    91,911
    
    
    
    96,526Inventory
    
    
    48,534
    
    
    
    44,976Deferred Tax Asset
    
    
    2,913
    
    
    
    4,644Other Current Assets
    
    
    21,717
    
    
    
    16,787Total Current Assets
    
    
    175,928
    
    
    
    176,892PROPERTIES-NET
    
    
    438,508
    
    
    
    425,741INVESTMENT IN EQUITY INVESTEES
    
    
    5,157
    
    
    
    5,532OTHER ASSETS
    
    
    14,357
    
    
    
    15,119Total Assets
    
    $
    633,950
    
    
    $
    623,284LIABILITIESCURRENT LIABILITIESAccounts Payable
    
    $
    27,464
    
    
    $
    47,517Accrued Payroll and Fringe Benefits
    
    
    17,675
    
    
    
    22,303Deferred Revenue
    
    
    18,063
    
    
    
    16,631Accrued Claims and Insurance Premiums
    
    
    12,606
    
    
    
    13,361Accrued Interest
    
    
    2,122
    
    
    
    5,179Accrued Reorganization Claims and Fees
    
    
    1,414
    
    
    
    2,724Other Current Liabilities
    
    
    32,539
    
    
    
    22,973Total Current Liabilities
    
    
    111,883
    
    
    
    130,688LONG TERM DEBT
    
    
    215,700
    
    
    
    200,000PENSION LIABILITY
    
    
    18,526
    
    
    
    17,867DEFERRED TAX LIABILITY
    
    
    6,274
    
    
    
    4,644OTHER LONG TERM LIABILITIES
    
    
    15,698
    
    
    
    16,384Total Liabilities
    
    
    368,081
    
    
    
    369,583STOCKHOLDERS EQUITYCommon stock; authorized 1,000 shares at $.01 par value;
10 shares issued and outstanding, in 2006
    
    
    
    
    
    
    Other Capital
    
    
    248,762
    
    
    
    247,742Retained Earnings
    
    
    22,961
    
    
    
    11,813Accumulated Other Comprehensive Loss
    
    
    (5,854
    )
    
    
    (5,854
    )Total Stockholders Equity
    
    
    265,869
    
    
    
    253,701Total Liabilities and Stockholders Equity
    
    $
    633,950
    
    
    $
    623,284
  4




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AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Quarters endedMarch 31,
    
    
    March 31,2006
    
    
    2005(Unaudited)(In thousands)OPERATING ACTIVITIESNet Income (Loss)
    
    $
    11,148
    
    
    $
    (6,328
    )Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided by Operating Activities:Depreciation and Amortization
    
    
    12,082
    
    
    
    12,279Debt Issuance Cost Amortization
    
    
    278
    
    
    
    2,336(Gain) Loss on Property Dispositions
    
    
    58
    
    
    
    (327
    )Other Operating Activities
    
    
    3,425
    
    
    
    505Changes in Operating Assets and Liabilities:Accounts Receivable
    
    
    4,614
    
    
    
    3,226Inventory
    
    
    (3,486
    )
    
    
    (12,685
    )Accrued Interest
    
    
    (3,057
    )
    
    
    2,666Other Current Assets
    
    
    (2,922
    )
    
    
    152Other Current Liabilities
    
    
    (5,894
    )
    
    
    7,563Net Cash Provided by Operating Activities
before Reorganization Items
    
    
    16,246
    
    
    
    9,387Reorganization Items Paid
    
    
    (309
    )
    
    
    (9,143
    )Net Cash Provided by Operating Activities
    
    
    15,937
    
    
    
    244INVESTING ACTIVITIESProperty Additions
    
    
    (24,875
    )
    
    
    (3,936
    )Proceeds from Property Dispositions
    
    
    153
    
    
    
    4,056Net Change in Restricted Cash
    
    
    
    
    
    
    (285
    )Investment in Vessel Leasing LLC
    
    
    
    
    
    
    (2,500
    )Other Investing Activities
    
    
    (222
    )
    
    
    (663
    )Net Cash Used in Investing Activities
    
    
    (24,944
    )
    
    
    (3,328
    )FINANCING ACTIVITIESLong-Term Debt Repaid
    
    
    
    
    
    
    (381,793
    )Revolving Credit Facility Borrowings
    
    
    15,700
    
    
    
    170,7102015 Senior Note Borrowings
    
    
    
    
    
    
    200,000Outstanding Checks
    
    
    (9,545
    )
    
    
    (5,275
    )Debt Costs
    
    
    (13
    )
    
    
    (12,254
    )Other Financing Activities
    
    
    (241
    )
    
    
    (581
    )Net Cash Provided by (Used in) Financing Activities
    
    
    5,901
    
    
    
    (29,193
    )Net Decrease in Cash and Cash Equivalents
    
    
    (3,106
    )
    
    
    (32,277
    )Cash and Cash Equivalents at Beginning of Period
    
    
    13,959
    
    
    
    46,645Cash and Cash Equivalents at End of Period
    
    $
    10,853
    
    
    $
    14,368
  5




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AMERICAN BARGE LINE COMPANY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Note 1. Reporting entity
       Note 2. Acquisition and Merger of Vessel Leasing
  Note 3. Debt
 March 31,
    
    
    December 31,2006
    
    
    2005Asset based revolver
    
    $
    85,700
    
    
    $
    70,0002015 Senior Notes
    
    
    130,000
    
    
    
    130,000Long-term debt
    
    $
    215,700
    
    
    $
    200,000
  6




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##### Table of Contents



Note 4. Inventory
  March 31,
    
    December 31,2006
    
    2005Raw Materials
    
    $
    8,911
    
    
    $
    9,754Work in Process
    
    
    18,168
    
    
    
    13,913Parts and Supplies
    
    
    21,455
    
    
    
    21,309$
    48,534
    
    
    $
    44,976
 Note 5. Taxes
   Note 6. Employee Benefit Plans
  Quarter EndedMarch 31,
    
    March 31,2006
    
    2005PensionService cost
    
    $
    1,251
    
    
    $
    1,170Interest cost
    
    
    2,143
    
    
    
    2,024Expected return on plan assets
    
    
    (2,739
    )
    
    
    (2,518
    )Amortization of unrecognized losses
    
    
    40
    
    
    
    Net periodic benefit cost
    
    $
    695
    
    
    $
    676
 Post-RetirementService cost
    
    $
    80
    
    
    $
    87Interest cost
    
    
    161
    
    
    
    162Net periodic benefit cost
    
    $
    241
    
    
    $
    249
 7




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Note 7. Business Segments
    8




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 OPERATING RESULTS BY BUSINESS SEGMENT
Quarters Ended March 31, 2006 and March 31, 2005
 Reportable Segments
    
    All Other
    
    IntersegmentTransportation
    
    Manufacturing
    
    Segments (1)
    
    Eliminations
    
    TotalQuarter ended March 31, 2006Total Revenue
    
    $
    170,589
    
    
    $
    50,519
    
    
    $
    2,193
    
    
    
    ($24,942
    )
    
    $
    198,359Intersegment Revenue
    
    
    151
    
    
    
    24,791
    
    
    
    
    
    
    
    (24,942
    )
    
    
    Revenue from external customers
    
    
    170,438
    
    
    
    25,728
    
    
    
    2,193
    
    
    
    
    
    
    
    198,359Operating ExpenseMaterials, Supplies and Other
    
    
    56,641
    
    
    
    8,914
    
    
    
    779
    
    
    
    
    
    
    
    66,334Rent
    
    
    5,457
    
    
    
    113
    
    
    
    64
    
    
    
    
    
    
    
    5,634Labor and Fringe Benefits
    
    
    21,605
    
    
    
    12,516
    
    
    
    564
    
    
    
    
    
    
    
    34,685Fuel
    
    
    37,663
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    37,664Depreciation and Amortization
    
    
    11,288
    
    
    
    439
    
    
    
    355
    
    
    
    
    
    
    
    12,082Taxes, Other Than Income Taxes
    
    
    4,425
    
    
    
    58
    
    
    
    54
    
    
    
    
    
    
    
    4,537Selling, General &
Administrative
    
    
    14,794
    
    
    
    1,317
    
    
    
    210
    
    
    
    
    
    
    
    16,321Total Operating Expenses
    
    
    151,873
    
    
    
    23,357
    
    
    
    2,027
    
    
    
    
    
    
    
    177,257Operating Income
    
    
    18,565
    
    
    
    2,371
    
    
    
    166
    
    
    
    
    
    
    
    21,102Quarter ended March 31, 2005Total Revenue
    
    $
    130,268
    
    
    $
    16,289
    
    
    $
    2,055
    
    
    
    ($2,290
    )
    
    $
    146,322Intersegment Revenue
    
    
    126
    
    
    
    2,164
    
    
    
    
    
    
    
    (2,290
    )
    
    
    Revenue from external customers
    
    
    130,142
    
    
    
    14,125
    
    
    
    2,055
    
    
    
    
    
    
    
    146,322Operating ExpenseMaterials, Supplies and Other
    
    
    48,495
    
    
    
    3,707
    
    
    
    613
    
    
    
    
    
    
    
    52,815Rent
    
    
    5,085
    
    
    
    60
    
    
    
    62
    
    
    
    
    
    
    
    5,207Labor and Fringe Benefits
    
    
    22,158
    
    
    
    9,563
    
    
    
    538
    
    
    
    
    
    
    
    32,259Fuel
    
    
    26,541
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    26,545Depreciation and Amortization
    
    
    11,498
    
    
    
    438
    
    
    
    343
    
    
    
    
    
    
    
    12,279Taxes, Other Than Income Taxes
    
    
    4,259
    
    
    
    98
    
    
    
    60
    
    
    
    
    
    
    
    4,417Selling, General &
Administrative
    
    
    11,642
    
    
    
    588
    
    
    
    210
    
    
    
    
    
    
    
    12,440Total Operating Expenses
    
    
    129,678
    
    
    
    14,454
    
    
    
    1,830
    
    
    
    
    
    
    
    145,962Operating Income (Loss)
    
    
    464
    
    
    
    (329
    )
    
    
    225
    
    
    
    
    
    
    
    360
 
 (1)
    
    Financial data for segments below the reporting thresholds is attributable to a segment
operating terminals along the U.S. inland waterways and in Venezuela. Note 8. Contingencies
  9




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NOTE 9. SHARE-BASED COMPENSATION
     Restricted
Shares
  SharesRestricted Stock issued at beginning of 2005
    
    
    Restricted Stock granted during year ended December 31, 2005
    
    
    821,048Restricted Stock vested during year ended December 31, 2005
    
    
    224,304Restricted Stock forfeited during year ended December 31, 2005
    
    
    Restricted Stock not vested at December 31, 2005
    
    
    596,744Restricted Stock granted during quarter ended March 31, 2006
    
    
    
 10




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SharesRestricted Stock vested during quarter ended March 31, 2006
    
    
    214,272Restricted Stock forfeited during quarter ended March 31, 2006
    
    
    Restricted Stock not vested at March 31, 2006
    
    
    382,472
 Stock
Options
  2005WeightedAverageExerciseShares
    
    
    PriceUnder option at beginning of 2005
    
    
    
    
    
    
    Options granted during year ended December 31, 2005
    
    
    1,105,192
    
    
    $
    4.19Options exercised during year ended December 31, 2005
    
    
    
    
    
    
    Options forfeited or expired during year ended December 31, 2005
    
    
    
    
    
    
    Under option at December 31, 2005
    
    
    1,105,192
    
    
    $
    4.19Options exercisable at December 31, 2005
    
    
    208,000
    
    
    $
    4.1625
 2006Options granted during quarter ended March 31, 2006
    
    
    181,968
    
    
    $
    33.17Options exercised during quarter ended March 31, 2006
    
    
    
    
    
    
    Options forfeited or expired during quarter ended March 31, 2006
    
    
    5,018
    
    
    $
    33.63Under option at March 31, 2006
    
    
    1,282,142
    
    
    $
    8.19Options exercisable at March 31, 2006
    
    
    525,701
    
    
    $
    4.68Shares available for future grants at March 31, 2006
    
    
    909,438
   Restricted
Stock Units
  11




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##### Table of Contents



SharesRestricted Stock Units issued at beginning of 2006
    
    
    Restricted Stock Units granted during quarter ended March 31, 2006
    
    
    208,660Restricted Stock Units vested during quarter ended March 31, 2006
    
    
    Restricted Stock Units forfeited during quarter ended March 31, 2006
    
    
    2,320Restricted Stock Units not vested at March 31, 2006
    
    
    206,340
 Performance
Share Units
  SharesPerformance Share Units issued at beginning of 2006
    
    
    Performance Share Units granted during quarter ended March 31, 2006
    
    
    41,074Performance Share Units vested during quarter ended March 31, 2006
    
    
    Performance Share Units forfeited during quarter ended March 31, 2006
    
    
    1,338Performance Share Units not vested at March 31, 2006
    
    
    39,736
 Note 10. Debtor Guarantor Financial Statements
       12




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AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
Combining Statement of Operations for the Quarter Ended March 31, 2006
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsREVENUE
    
    $
    
    
    
    $
    
    
    
    $
    13,614
    
    
    $
    197,737
    
    
    $
    884
    
    
    $
    (13,876
    )
    
    $
    198,359OPERATING EXPENSEMaterials,
Supplies and
Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,684
    
    
    
    1,889
    
    
    
    (239
    )
    
    
    66,334Rent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,921
    
    
    
    350
    
    
    
    (13,637
    )
    
    
    5,634Labor and Fringe
Benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,480
    
    
    
    1,205
    
    
    
    
    
    
    
    34,685Fuel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,594
    
    
    
    70
    
    
    
    
    
    
    
    37,664Depreciation and
Amortization
    
    
    
    
    
    
    
    
    
    
    9,245
    
    
    
    2,305
    
    
    
    532
    
    
    
    
    
    
    
    12,082Taxes, Other Than
Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,537
    
    
    
    
    
    
    
    
    
    
    
    4,537Selling, General
& Administrative
    
    
    
    
    
    
    68
    
    
    
    168
    
    
    
    15,958
    
    
    
    127
    
    
    
    
    
    
    
    16,321Total
Operating
Expenses
    
    
    
    
    
    
    68
    
    
    
    9,413
    
    
    
    177,479
    
    
    
    4,173
    
    
    
    (13,876
    )
    
    
    177,257OPERATING (LOSS)
INCOME
    
    
    
    
    
    
    (68
    )
    
    
    4,201
    
    
    
    20,258
    
    
    
    (3,289
    )
    
    
    
    
    
    
    21,102OTHER EXPENSE (INCOME)Interest Expense
    
    
    
    
    
    
    
    
    
    
    4,762
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    4,776Other, Net
    
    
    (11,418
    )
    
    
    (19,258
    )
    
    
    (19,819
    )
    
    
    380
    
    
    
    (769
    )
    
    
    49,177
    
    
    
    (1,707
    )(11,418
    )
    
    
    (19,258
    )
    
    
    (15,057
    )
    
    
    394
    
    
    
    (769
    )
    
    
    49,177
    
    
    
    3,069INCOME (LOSS) BEFORE
INCOME TAXES
    
    
    11,418
    
    
    
    19,190
    
    
    
    19,258
    
    
    
    19,864
    
    
    
    (2,520
    )
    
    
    (49,177
    )
    
    
    18,033INCOME TAXES (BENEFIT)
    
    
    
    
    
    
    8,042
    
    
    
    
    
    
    
    33
    
    
    
    (1,190
    )
    
    
    
    
    
    
    6,885NET INCOME (LOSS)
    
    $
    11,418
    
    
    $
    11,148
    
    
    $
    19,258
    
    
    $
    19,831
    
    
    $
    (1,330
    )
    
    $
    (49,177
    )
    
    $
    11,148
 13




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AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
Combining Statement of Operations for the Quarter Ended March 31, 2005
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsREVENUE
    
    $
    
    
    
    $
    
    
    
    $
    8,135
    
    
    $
    144,938
    
    
    $
    2,535
    
    
    $
    (9,286
    )
    
    $
    146,322OPERATING EXPENSEMaterials, Supplies and Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,035
    
    
    
    1,831
    
    
    
    (51
    )
    
    
    52,815Rent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,030
    
    
    
    412
    
    
    
    (9,235
    )
    
    
    5,207Labor and Fringe Benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,265
    
    
    
    994
    
    
    
    
    
    
    
    32,259Fuel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,490
    
    
    
    55
    
    
    
    
    
    
    
    26,545Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    9,008
    
    
    
    2,358
    
    
    
    913
    
    
    
    
    
    
    
    12,279Taxes, Other Than Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,417
    
    
    
    
    
    
    
    
    
    
    
    4,417Selling, General & Administrative
    
    
    
    
    
    
    
    
    
    
    104
    
    
    
    11,516
    
    
    
    820
    
    
    
    
    
    
    
    12,440Total Operating Expenses
    
    
    
    
    
    
    
    
    
    
    9,112
    
    
    
    141,111
    
    
    
    5,025
    
    
    
    (9,286
    )
    
    
    145,962OPERATING (LOSS) INCOME
    
    
    
    
    
    
    
    
    
    
    (977
    )
    
    
    3,827
    
    
    
    (2,490
    )
    
    
    
    
    
    
    360OTHER EXPENSE (INCOME)Interest Expense
    
    
    
    
    
    
    
    
    
    
    9,766
    
    
    
    133
    
    
    
    463
    
    
    
    
    
    
    
    10,362Interest (Income) Expense from
Affiliates
    
    
    
    
    
    
    
    
    
    
    (107
    )
    
    
    
    
    
    
    107
    
    
    
    
    
    
    
    Other, Net
    
    
    6,328
    
    
    
    8,857
    
    
    
    (1,779
    )
    
    
    2,212
    
    
    
    (1,107
    )
    
    
    (15,819
    )
    
    
    (1,308
    )6,328
    
    
    
    8,857
    
    
    
    7,880
    
    
    
    2,345
    
    
    
    (537
    )
    
    
    (15,819
    )
    
    
    9,054(LOSS) INCOME BEFORE INCOME TAXES
    
    
    (6,328
    )
    
    
    (8,857
    )
    
    
    (8,857
    )
    
    
    1,482
    
    
    
    (1,953
    )
    
    
    15,819
    
    
    
    (8,694
    )INCOME TAXES (BENEFIT)
    
    
    
    
    
    
    (2,529
    )
    
    
    
    
    
    
    57
    
    
    
    106
    
    
    
    
    
    
    
    (2,366
    )NET (LOSS) INCOME
    
    $
    (6,328
    )
    
    $
    (6,328
    )
    
    $
    (8,857
    )
    
    $
    1,425
    
    
    $
    (2,059
    )
    
    $
    15,819
    
    
    $
    (6,328
    )
 14




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
Combining Statement of Financial Position at March 31, 2006
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsASSETSCURRENT ASSETSCash and Cash Equivalents
    
    $
    
    
    
    $
    
    
    
    $
    3,309
    
    
    $
    39
    
    
    $
    7,505
    
    
    $
    
    
    
    $
    10,853Accounts Receivable, Net
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    90,522
    
    
    
    1,349
    
    
    
    
    
    
    
    91,911Accounts Receivable  Intercompany
    
    
    
    
    
    
    (11,991
    )
    
    
    148,419
    
    
    
    (136,122
    )
    
    
    (306
    )
    
    
    
    
    
    
    Materials and Supplies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,661
    
    
    
    1,873
    
    
    
    
    
    
    
    48,534Deferred Tax Asset  Current
    
    
    
    
    
    
    2,913
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,913Other Current Assets
    
    
    
    
    
    
    
    
    
    
    1,127
    
    
    
    19,048
    
    
    
    1,542
    
    
    
    
    
    
    
    21,717Total Current Assets
    
    
    
    
    
    
    (9,078
    )
    
    
    152,895
    
    
    
    20,148
    
    
    
    11,963
    
    
    
    
    
    
    
    175,928PROPERTIES-Net
    
    
    
    
    
    
    
    
    
    
    357,730
    
    
    
    69,384
    
    
    
    11,394
    
    
    
    
    
    
    
    438,508INVESTMENT IN SUBSIDIARIES
    
    
    265,869
    
    
    
    273,347
    
    
    
    (11,256
    )
    
    
    73,111
    
    
    
    
    
    
    
    (601,071
    )
    
    
    INVESTMENT IN EQUITY INVESTEES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,252
    
    
    
    905
    
    
    
    
    
    
    
    5,157OTHER ASSETS
    
    
    
    
    
    
    
    
    
    
    6,939
    
    
    
    7,350
    
    
    
    68
    
    
    
    
    
    
    
    14,357Total Assets
    
    $
    265,869
    
    
    $
    264,269
    
    
    $
    506,308
    
    
    $
    174,245
    
    
    $
    24,330
    
    
    $
    (601,071
    )
    
    $
    633,950LIABILITIESCURRENT LIABILITIESAccounts Payable
    
    $
    
    
    
    $
    
    
    
    $
    11,185
    
    
    $
    16,070
    
    
    $
    209
    
    
    $
    
    
    
    $
    27,464Accrued Payroll and Fringe Benefits
    
    
    
    
    
    
    
    
    
    
    (115
    )
    
    
    17,790
    
    
    
    
    
    
    
    
    
    
    
    17,675Deferred Revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,063
    
    
    
    
    
    
    
    
    
    
    
    18,063Accrued Claims and Insurance Premiums
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,606
    
    
    
    
    
    
    
    
    
    
    
    12,606Accrued Interest
    
    
    
    
    
    
    
    
    
    
    2,122
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,122Accrued Reorganization Claims
Settlements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,414
    
    
    
    
    
    
    
    
    
    
    
    1,414Other Liabilities
    
    
    
    
    
    
    (2,794
    )
    
    
    75
    
    
    
    35,134
    
    
    
    124
    
    
    
    
    
    
    
    32,539Total Current Liabilities
    
    
    
    
    
    
    (2,794
    )
    
    
    13,267
    
    
    
    101,077
    
    
    
    333
    
    
    
    
    
    
    
    111,883LONG-TERM DEBT
    
    
    
    
    
    
    
    
    
    
    215,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    215,700PENSION LIABILITY
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,526
    
    
    
    
    
    
    
    
    
    
    
    18,526DEFERRED TAX LIABILITY
    
    
    
    
    
    
    6,274
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,274OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,002
    
    
    
    4,696
    
    
    
    
    
    
    
    15,698Total Liabilities
    
    
    
    
    
    
    3,480
    
    
    
    228,967
    
    
    
    130,605
    
    
    
    5,029
    
    
    
    
    
    
    
    368,081STOCKHOLDERS EQUITYCommon Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,813
    
    
    
    (1,813
    )
    
    
    Other Capital
    
    
    248,762
    
    
    
    248,762
    
    
    
    246,339
    
    
    
    
    
    
    
    51,211
    
    
    
    (546,312
    )
    
    
    248,762Retained Earnings
    
    
    22,961
    
    
    
    17,881
    
    
    
    40,364
    
    
    
    53,002
    
    
    
    (33,723
    )
    
    
    (77,524
    )
    
    
    22,961Accumulated Other Comprehensive Loss
    
    
    (5,854
    )
    
    
    (5,854
    )
    
    
    (9,362
    )
    
    
    (9,362
    )
    
    
    
    
    
    
    24,578
    
    
    
    (5,854
    )Total Stockholders Equity
    
    
    265,869
    
    
    
    260,789
    
    
    
    277,341
    
    
    
    43,640
    
    
    
    19,301
    
    
    
    (601,071
    )
    
    
    265,869Total Liabilities and Stockholders
Equity
    
    $
    265,869
    
    
    $
    264,269
    
    
    $
    506,308
    
    
    $
    174,245
    
    
    $
    24,330
    
    
    $
    (601,071
    )
    
    $
    633,950
 15




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
NOTES TO CONSOLIDATED STATEMENTS  (Continued)
Combining Statement of Financial Position at December 31, 2005
 Parent
    
    
    
    
    
    Subsidiary
    
    Non-
    
    
    
    
    
    CombinedParent
    
    Guarantors
    
    Issuers
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    TotalsASSETSCURRENT ASSETSCash and Cash Equivalents
    
    $
    
    
    
    $
    
    
    
    $
    7,740
    
    
    $
    38
    
    
    $
    6,181
    
    
    $
    
    
    
    $
    13,959Accounts Receivable, Net
    
    
    
    
    
    
    
    
    
    
    38
    
    
    
    86,267
    
    
    
    10,221
    
    
    
    
    
    
    
    96,526Accounts Receivable  Intercompany
    
    
    
    
    
    
    (11,479
    )
    
    
    152,705
    
    
    
    (140,920
    )
    
    
    (306
    )
    
    
    
    
    
    
    Materials and Supplies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,358
    
    
    
    1,618
    
    
    
    
    
    
    
    44,976Deferred Tax Asset  Current
    
    
    
    
    
    
    4,644
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,644Other Current Assets
    
    
    
    
    
    
    
    
    
    
    1,049
    
    
    
    13,114
    
    
    
    2,624
    
    
    
    
    
    
    
    16,787Total Current Assets
    
    
    
    
    
    
    (6,835
    )
    
    
    161,532
    
    
    
    1,857
    
    
    
    20,338
    
    
    
    
    
    
    
    176,892PROPERTIES-Net
    
    
    
    
    
    
    
    
    
    
    347,849
    
    
    
    65,975
    
    
    
    11,917
    
    
    
    
    
    
    
    425,741INVESTMENT IN SUBSIDIARIES
    
    
    253,701
    
    
    
    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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,179Accrued Reorganization Claims and Fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,724
    
    
    
    
    
    
    
    
    
    
    
    2,724Other Liabilities
    
    
    
    
    
    
    (4,608
    )
    
    
    195
    
    
    
    22,242
    
    
    
    5,144
    
    
    
    
    
    
    
    22,973Total Current Liabilities
    
    
    
    
    
    
    (4,608
    )
    
    
    25,865
    
    
    
    102,335
    
    
    
    7,096
    
    
    
    
    
    
    
    130,688LONG-TERM DEBT
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000PENSION LIABILITY
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,867
    
    
    
    
    
    
    
    
    
    
    
    17,867DEFERRED TAX LIABILITY
    
    
    
    
    
    
    4,644
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,644OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,664
    
    
    
    5,720
    
    
    
    
    
    
    
    16,384Total Liabilities
    
    
    
    
    
    
    36
    
    
    
    225,865
    
    
    
    130,866
    
    
    
    12,816
    
    
    
    
    
    
    
    369,583STOCKHOLDER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
 16




---



##### Table of Contents



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
Combining Statement of Cash Flows for the Quarter Ended March 31, 2006
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsNet Income (Loss)
    
    $
    11,418
    
    
    $
    11,148
    
    
    $
    19,258
    
    
    $
    19,831
    
    
    $
    (1,330
    )
    
    $
    (49,177
    )
    
    $
    11,148Adjustments to Reconcile Net
Income (Loss) to Cash
Provided by (Used in)
Operating Activities:Depreciation and
Amortization
    
    
    
    
    
    
    
    
    
    
    9,245
    
    
    
    2,305
    
    
    
    532
    
    
    
    
    
    
    
    12,082Debt Issuance Cost
Amortization
    
    
    
    
    
    
    
    
    
    
    278
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    278Loss on Property
Dispositions
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    58Other Operating Activities
    
    
    (11,418
    )
    
    
    (17,628
    )
    
    
    (20,661
    )
    
    
    4,760
    
    
    
    (805
    )
    
    
    49,177
    
    
    
    3,425Changes in Operating Assets
and Liabilities:
    
    
    Accounts Receivable
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (4,256
    )
    
    
    8,871
    
    
    
    
    
    
    
    4,614Intercompany Accounts
Receivable/Payable
    
    
    
    
    
    
    512
    
    
    
    4,285
    
    
    
    (7,456
    )
    
    
    
    
    
    
    2,659
    
    
    
    Materials and Supplies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,231
    )
    
    
    (255
    )
    
    
    
    
    
    
    (3,486
    )Accrued Interest
    
    
    
    
    
    
    
    
    
    
    (3,057
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,057
    )Other Current Assets
    
    
    
    
    
    
    1,731
    
    
    
    (78
    )
    
    
    (5,657
    )
    
    
    1,082
    
    
    
    
    
    
    
    (2,922
    )Other Current Liabilities
    
    
    
    
    
    
    1,814
    
    
    
    9
    
    
    
    (954
    )
    
    
    (6,763
    )
    
    
    
    
    
    
    (5,894
    )Net Cash Provided by
Operating Activities
before
Reorganization Items
    
    
    
    
    
    
    (2,423
    )
    
    
    9,304
    
    
    
    5,374
    
    
    
    1,332
    
    
    
    2,659
    
    
    
    16,246Reorganization Items Paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (309
    )
    
    
    
    
    
    
    
    
    
    
    (309
    )Net Cash Provided by
Operating Activities
    
    
    
    
    
    
    (2,423
    )
    
    
    9,304
    
    
    
    5,065
    
    
    
    1,332
    
    
    
    2,659
    
    
    
    15,937INVESTING ACTIVITIESProperty Additions
    
    
    
    
    
    
    
    
    
    
    (19,728
    )
    
    
    (5,139
    )
    
    
    (8
    )
    
    
    
    
    
    
    (24,875
    )Proceeds from Property
Dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    153
    
    
    
    
    
    
    
    
    
    
    
    153Other Investing Activities
    
    
    
    
    
    
    
    
    
    
    (149
    )
    
    
    (73
    )
    
    
    
    
    
    
    
    
    
    
    (222
    )Net Cash Used in
Investing Activities
    
    
    
    
    
    
    
    
    
    
    (19,877
    )
    
    
    (5,059
    )
    
    
    (8
    )
    
    
    
    
    
    
    (24,944
    )FINANCING ACTIVITIESRevolving Credit Facility
Borrowings
    
    
    
    
    
    
    
    
    
    
    15,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,700Outstanding Checks
    
    
    
    
    
    
    
    
    
    
    (9,540
    )
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (9,545
    )Debt Costs
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )Other Financing Activities
    
    
    
    
    
    
    2,423
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (2,659
    )
    
    
    (241
    )Net Cash (Used In)
Provided by
Financing Activities
    
    
    
    
    
    
    2,423
    
    
    
    6,142
    
    
    
    (5
    )
    
    
    
    
    
    
    (2,659
    )
    
    
    5,901(Decrease) Increase in Cash and Cash
Equivalents
    
    
    
    
    
    
    
    
    
    
    (4,431
    )
    
    
    1
    
    
    
    1,324
    
    
    
    
    
    
    
    (3,106
    )Cash and Cash Equivalents at
Beginning of Period
    
    
    
    
    
    
    
    
    
    
    7,740
    
    
    
    38
    
    
    
    6,181
    
    
    
    
    
    
    
    13,959Cash and Cash
Equivalents at End of
Period
    
    $
    
    
    
    $
    
    
    
    $
    3,309
    
    
    $
    39
    
    
    $
    7,505
    
    
    $
    
    
    
    $
    10,853
 17




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
Combining Statement of Cash Flows for the Quarter Ended March 31, 2005
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsNet (Loss) Income
    
    $
    (6,328
    )
    
    $
    (6,328
    )
    
    $
    (8,857
    )
    
    $
    1,425
    
    
    $
    (2,059
    )
    
    $
    15,819
    
    
    $
    (6,328
    )Adjustments to Reconcile Net (Loss)
Income to Net Cash
Provided by (Used in) Operating
Activities:Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    9,008
    
    
    
    2,358
    
    
    
    913
    
    
    
    
    
    
    
    12,279Debt Issuance Cost Amortization
    
    
    
    
    
    
    
    
    
    
    2,300
    
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    2,336(Gain) Loss on Property
Dispositions
    
    
    
    
    
    
    
    
    
    
    (270
    )
    
    
    1
    
    
    
    (58
    )
    
    
    
    
    
    
    (327
    )Other Operating Activities
    
    
    6,328
    
    
    
    9,654
    
    
    
    4,971
    
    
    
    264
    
    
    
    (5,149
    )
    
    
    (15,563
    )
    
    
    505Changes in Operating Assets and
Liabilities:Accounts Receivable
    
    
    
    
    
    
    
    
    
    
    84
    
    
    
    (2,379
    )
    
    
    5,521
    
    
    
    
    
    
    
    3,226Intercompany Accounts
Receivable/Payable
    
    
    
    
    
    
    1
    
    
    
    (19,619
    )
    
    
    17,118
    
    
    
    2,500
    
    
    
    
    
    
    
    Materials and Supplies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,050
    )
    
    
    365
    
    
    
    
    
    
    
    (12,685
    )Accrued Interest
    
    
    
    
    
    
    
    
    
    
    2,351
    
    
    
    54
    
    
    
    261
    
    
    
    
    
    
    
    2,666Other Current Assets
    
    
    
    
    
    
    (437
    )
    
    
    689
    
    
    
    666
    
    
    
    (402
    )
    
    
    (364
    )
    
    
    152Other Current Liabilities
    
    
    
    
    
    
    (2,890
    )
    
    
    1,927
    
    
    
    10,093
    
    
    
    (1,675
    )
    
    
    108
    
    
    
    7,563Net Cash (Used in) Provided by
Operating Activities
before Reorganization Items
    
    
    
    
    
    
    
    
    
    
    (7,416
    )
    
    
    16,550
    
    
    
    253
    
    
    
    
    
    
    
    9,387Reorganization Items Paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,143
    )
    
    
    
    
    
    
    
    
    
    
    (9,143
    )Net Cash (Used in) Provided by
Operating Activities
    
    
    
    
    
    
    
    
    
    
    (7,416
    )
    
    
    7,407
    
    
    
    253
    
    
    
    
    
    
    
    244INVESTING ACTIVITIESProperty Additions
    
    
    
    
    
    
    
    
    
    
    (2,611
    )
    
    
    (1,325
    )
    
    
    
    
    
    
    
    
    
    
    (3,936
    )Proceeds from Property Dispositions
    
    
    
    
    
    
    
    
    
    
    3,738
    
    
    
    178
    
    
    
    140
    
    
    
    
    
    
    
    4,056Net Change in Restricted Cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (285
    )
    
    
    
    
    
    
    (285
    )Investment in Vessel Leasing LLC
    
    
    
    
    
    
    
    
    
    
    (2,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,500
    )Other Investing Activities
    
    
    
    
    
    
    
    
    
    
    322
    
    
    
    (985
    )
    
    
    
    
    
    
    
    
    
    
    (663
    )Net Cash Used in Investing
Activities
    
    
    
    
    
    
    
    
    
    
    (1,051
    )
    
    
    (2,132
    )
    
    
    (145
    )
    
    
    
    
    
    
    (3,328
    )FINANCING ACTIVITIESLong-Term Debt Repaid
    
    
    
    
    
    
    
    
    
    
    (381,546
    )
    
    
    
    
    
    
    (247
    )
    
    
    
    
    
    
    (381,793
    )Revolving Credit Facility Borrowings
    
    
    
    
    
    
    
    
    
    
    170,710
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    170,7102015 Senior Note Borrowings
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000Outstanding Checks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,275
    )
    
    
    
    
    
    
    
    
    
    
    (5,275
    )Debt Costs
    
    
    
    
    
    
    
    
    
    
    (12,254
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,254
    )Other Financing Activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (581
    )
    
    
    
    
    
    
    (581
    )Net Cash Used in Financing
Activities
    
    
    
    
    
    
    
    
    
    
    (23,090
    )
    
    
    (5,275
    )
    
    
    (828
    )
    
    
    
    
    
    
    (29,193
    )Decrease in Cash and Cash Equivalents
    
    
    
    
    
    
    
    
    
    
    (31,557
    )
    
    
    
    
    
    
    (720
    )
    
    
    
    
    
    
    (32,277
    )Cash and Cash Equivalents at Beginning of
Period
    
    
    
    
    
    
    
    
    
    
    39,452
    
    
    
    30
    
    
    
    7,163
    
    
    
    
    
    
    
    46,645Cash and Cash Equivalents at
End of Period
    
    $
    
    
    
    $
    
    
    
    $
    7,895
    
    
    $
    30
    
    
    $
    6,443
    
    
    $
    
    
    
    $
    14,368
 18




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##### Table of Contents



ITEM 2. MANAGEMENTS NARRRATIVE AND ANALYSIS OF RESULTS OF OPERATIONS
 INTRODUCTION
  
    
    Overview.This section provides a general description of the Company and its business, as
well as developments the Company believes are important in understanding the results of
operations and financial condition or in understanding anticipated future trends.
    
    Results of Operations.This section provides an analysis of the Companys results of
operations for the three months ended March 31, 2006 compared to the results of operations
for the three months ended March 31, 2005.
    
    Liquidity and Capital Resources.This section provides an overview of the Companys
sources of liquidity, a discussion of the Companys debt that existed as of March 31, 2006
and an analysis of the Companys cash flows for the three months ended March 31, 2006.
    
    Changes in Accounting Standards.This section discusses certain changes in accounting and
reporting standards applicable to the Company.
    
    Critical Accounting Policies.This section discusses any significant changes in
accounting policies that are considered important to the Companys financial condition and
results of operations, require significant judgment and require estimates on the part of
management in application from those previously described in the Companys filing on Form
10-K for the year ended December 31, 2005. The Companys significant accounting policies
include those considered to be critical accounting policies.
    
    Quantitative and Qualitative Disclosures about Market Risk.This section discusses our
analysis of significant changes in exposure to potential loss arising from adverse changes
in fuel prices, interest rates and foreign currency exchange rates in the period since our
filing on Form 10-K for the fiscal year ended December 31, 2005.
    
    Risk Factors and Caution Concerning Forward-Looking Statements.This section references
important factors that could adversely affect the operations, business or financial results
of the Company or its business segments and the use of forward-looking information appearing
in this filing on Form 10-Q, including in MD&A and the condensed consolidated financial
statements. Such information is based on managements current expectations about future
events, which are inherently susceptible to uncertainty and changes in circumstances.
 OVERVIEW
 Our Business
  19




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##### Table of Contents



RiverTrac
     Our Fleet Profile
  Domestic Barges
    
    Dry
    
    
    Tankers
    
    
    TotalBarges operated as of the end of 2005
    
    
    2,803
    
    
    
    371
    
    
    
    3,174Retired
    
    
    (20
    )
    
    
    (1
    )
    
    
    (21
    )New builds
    
    
    11
    
    
    
    15
    
    
    
    26Change in number of barges leased
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )Barges operated as of the end of the first quarter 2006
    
    
    2,789
    
    
    
    385
    
    
    
    3,174
 Outlook
 Transportation Services.
  20




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21




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##### Table of Contents



Manufacturing
 Recent Developments
 Manufacturing
 22




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RESULTS OF OPERATIONS
 AMERICAN BARGE LINE COMPANY OPERATING RESULTS by BUSINESS SEGMENT
Quarter Ended March 31, 2006 as compared with Quarter Ended March 31, 2005
 2006
    
    
    % of ConsolidatedQuarters ended
    
    
    Better
    
    
    RevenueMarch 31,
    
    
    March 31,
    
    
    (Worse)
    
    
    First Quarter
    
    
    First Quarter2006
    
    
    2005
    
    
    than 2005
    
    
    2005
    
    
    2004(Dollars in thousands except where noted)REVENUEDomestic Transportation
    
    $
    170,231
    
    
    $
    129,109
    
    
    $
    41,122
    
    
    
    85.8
    %
    
    
    88.3
    %International Transportation
    
    
    207
    
    
    
    1,033
    
    
    
    (826
    )
    
    
    0.1
    %
    
    
    0.7
    %Manufacturing (external and internal)
    
    
    50,519
    
    
    
    16,289
    
    
    
    34,230
    
    
    
    25.5
    %
    
    
    11.1
    %Other
    
    
    2,193
    
    
    
    2,055
    
    
    
    138
    
    
    
    1.1
    %
    
    
    1.4
    %Intersegment manufacturing elimination
    
    
    (24,791
    )
    
    
    (2,164
    )
    
    
    (22,627
    )
    
    
    -12.5
    %
    
    
    -1.5
    %Consolidated Revenue
    
    $
    198,359
    
    
    $
    146,322
    
    
    $
    52,037
    
    
    
    100.0
    %
    
    
    100.0
    %OPERATING EXPENSEDomestic Transportation
    
    $
    148,342
    
    
    $
    125,352
    
    
    $
    (22,990
    )International Transportation
    
    
    3,531
    
    
    
    4,326
    
    
    
    795Manufacturing (external and internal)
    
    
    43,501
    
    
    
    16,618
    
    
    
    (26,883
    )Other
    
    
    2,027
    
    
    
    1,830
    
    
    
    (197
    )Intersegment manufacturing elimination
    
    
    (20,144
    )
    
    
    (2,164
    )
    
    
    17,980Consolidated Operating Expense
    
    $
    177,257
    
    
    $
    145,962
    
    
    $
    (31,295
    )
    
    
    89.4
    %
    
    
    99.8
    %OPERATING INCOMEDomestic Transportation
    
    $
    21,889
    
    
    $
    3,757
    
    
    $
    18,132International Transportation
    
    
    (3,324
    )
    
    
    (3,293
    )
    
    
    (31
    )Manufacturing (external and internal)
    
    
    7,018
    
    
    
    (329
    )
    
    
    7,347Other
    
    
    166
    
    
    
    225
    
    
    
    (59
    )Intersegment manufacturing elimination
    
    
    (4,647
    )
    
    
    
    
    
    
    (4,647
    )Consolidated Operating Income
    
    $
    21,102
    
    
    $
    360
    
    
    $
    20,742
    
    
    
    10.6
    %
    
    
    0.2
    %Interest Expense
    
    
    4,776
    
    
    
    10,362
    
    
    
    5,586Other Expense (Income)
    
    
    (1,707
    )
    
    
    (1,308
    )
    
    
    399Income (Loss) before Income Taxes
    
    $
    18,033
    
    
    $
    (8,694
    )
    
    $
    26,727Income Taxes (Benefit)
    
    
    6,885
    
    
    
    (2,366
    )
    
    
    (9,251
    )Net Income (Loss)
    
    $
    11,148
    
    
    $
    (6,328
    )
    
    $
    17,476Domestic Barges Operated (average of
period beginning and end)
    
    
    3,174
    
    
    
    3,228
    
    
    
    (54
    )Domestic
Transportation
Revenue per Barge Operated
    
    $
    53,633
    
    
    $
    39,997
    
    
    $
    13,636
 23




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Revenue.
     Operating Expense.
    24




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##### Table of Contents



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




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Our Indebtedness
  Net Cash, Capital Expenditures and Cash Flow
         26




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CHANGES IN ACCOUNTING STANDARDS
     CRITICAL ACCOUNTING POLICIES
   
 Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 27




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Fuel Price Risk
  Interest Rate and Other Risks
  Foreign Currency Exchange Rate Risks
  RISK FACTORS AND FORWARD-LOOKING STATEMENTS
   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  
 ITEM 4. CONTROLS AND PROCEDURES.
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Evaluation of Disclosure Controls and Procedures.
 Changes in Internal Control over Financial Reporting.
 
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  Current Legal Proceeding.
 
    
    Miller Appeal.On January 19, 2005, MilFam II LP and Trust A-4, together referred to as
the Miller Entities, holders of approximately $22.0 million in principal amount of PIK
Notes, filed a notice of appeal, commencing an appeal to the United States District Court
for the Southern District of Indiana (the District Court) of (1) the order of the U.S.
Bankruptcy Court, Southern District of Indiana, New Albany Division (the Bankruptcy Court)
entered on December 30, 2004 confirming the Plan of Reorganization (the Confirmation
Order) and (2) the order of the Bankruptcy Court entered on January 12, 2005 denying the
Miller Entities Motion For Reconsideration And To Open Record To Include Recent Senior Debt
Trading Information. On February 17, 2005, the Miller Entities sought a limited stay of the
Bankruptcy Courts Confirmation Order. On March 3, 2005, the Bankruptcy Court entered an
order denying the Miller Entities request for a limited stay. The Confirmation Order
remains in full force and effect.On March 30, 2006, the District Court granted our motion and dismissed the appeal. On April
28, 2006, the Miller Entities filed their notice of appeal to the Seventh Circuit Court of
Appeals (the Court of Appeals). Because an appeal remains pending we include the following
description regarding the Miller appeal.On January 31, 2005, the Miller Entities filed a statement of issues to be raised in
the appeal to the District Court. These issues include, among others, that the enterprise
value as of the effective date of the Plan of Reorganization (January 11, 2005) of the
reorganized debtors of $500.0 million as determined by the Bankruptcy Court as part of
the Confirmation Order is too low and was based on inaccurate and incomplete information;
the Plan of Reorganization is not fair and equitable as to the Miller Entities and
other holders of PIK Notes; the Miller Entities claims should not have been subordinated
to the claims of holders of the 2008 Senior Notes as provided under the Plan of
Reorganization; third-party releases provided by the Plan of Reorganization should not
have been granted; the ballot cast by HY I to accept the Plan of Reorganization should be
disregarded; and DHC should not have received any recovery under the Plan of
Reorganization.In several briefs and pleadings filed with the District Court, the Miller Entities
have stated that they seek a limited remedy and are not seeking to undo the Plan of
Reorganization. The Miller Entities have asserted that they are seeking to recover a
portion of the equity value of the reorganized debtors as of the effective date of the
Plan of Reorganization that the Miller Entities contend has been or will be distributed
in the form of new shares to holders of our 2008 Senior Notes and that should
 29




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have instead been distributed to the holders of PIK Notes. Among the remedies that the Miller
Entities argue should be implemented is the issuance to holders of PIK Notes of
sufficient additional new shares so that the holders of the PIK Notes will realize the
additional value that the Miller Entities assert the holders of PIK Notes are entitled,
with the issuance of such additional new shares correspondingly diluting the value of new
shares that were issued to holders of 2008 Senior Notes. The issuance of new shares could
materially dilute the percentage of ownership of some or all of ACLs stockholders.We intend to continue to oppose the further appeal by the Miller Entities and to
advocate that the appeal was properly dismissed by the District Court. However, we can
make no assurance that should the Miller Entities appeal from the District Courts
dismissal of their appeal that the Court of Appeals (or the United States Supreme Court
in the case of any further appeal) will uphold the dismissal, or that the ultimate
outcome of this matter may not materially adversely affect either our ability to fully
consummate our Plan of Reorganization as confirmed or the market value of our common
stock and will not involve a material cost to us. Any such outcome could have a material
adverse effect on our business, financial condition and results of operations.
 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 us, has been formed to coordinate final cleanup of this
site. The removal action was completed pursuant to a work plan accepted by the U.S.
Environmental Protection Agency (U.S. EPA) and on February 24, 2006, the U.S. EPA approved
the final work plan for the site. As of March 31, 2006 we had expended approximately
$710,000 in connection with this site. No additional contributions are required or
anticipated at this time.
    
    EPS, Marietta, Ohio.EPS, Inc., a wholly owned subsidiary of Vectura Group Inc., is the
owner of Connex Pipe Systems closed solid waste landfill located in Marietta, Ohio
(Connex). We assumed liability for the monitoring and potential cleanup of Connex (up to
$30,000 per year) pursuant to our combination with Vectura Group in 1998. In 1986, Connex
was subject to an Ohio consent judgment (Consent Judgment) under which it agreed to
remediate and monitor the closed landfill for a period of three years. Connex complied with
the Consent Judgment, and in 1994 the Ohio Environmental Protection Agency (Ohio EPA)
issued a letter confirming Connexs compliance. In 1998, the Ohio EPA changed its
regulations with respect to monitoring requirements to require longer monitoring periods for
closed sites and sought to apply those new regulations to Connex retroactively. In November
1998, the Ohio EPA issued finalized guidance (Final Guidance) regarding retroactive
application of the Ohio EPA requirements. We have requested written confirmation from the
Ohio EPA that the new regulations do not retroactively apply and that our monitoring
responsibilities with respect to the property have been fulfilled. Currently, we coordinate
inspections of the property four times a year for integrity and maintenance of the cap with
minimal associated cost.
    
    Third Site, Zionsville, Indiana.Jeffboat LLC has been named a potentially responsible
party at Third Site by the U.S. EPA. Third Site was utilized for the storage of hazardous
substances and wastes during the remediation of the Environmental Conservation and Chemical
Corporation and Northside Sanitary Landfill (ECC/ NSL) in Zionsville, Indiana. As a
potentially responsible party at ECC/ NSL, Jeffboat is responsible for 3.6% of the total
volume of materials to be remediated at Third Site as well. Remediation activities are
ongoing at Third Site, and, as of March 31, 2006, Jeffboat had contributed approximately
$225,000 toward that remediation. No additional contributions are required or anticipated at
this time.
    
    Barge Cleaning Facilities, Port Arthur, Texas.American Commercial Barge Line LLC
received notices from the U.S. EPA in 1999 and 2004 that it is a potentially responsible
party at the State Marine of Port Arthur and the Palmer Barge Line Superfund Sites in Port
Arthur, Texas with respect to approximately 50 barges that were cleaned by State Marine and
approximately five
barges that were cleaned by Palmer Barge Line for us in the early 1980s. The U.S. EPA has made
no assessments with respect to these sites.
    
    Tiger Shipyard, Baton Rouge, Louisiana.At the direction of the State of Louisiana, we
have participated in a cleanup of a former barge cleaning operation at this site involving
the cleaning of approximately seven barges and the disposal of barge
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wash water. As of March
31, 2006, we had incurred costs of approximately $6.7 million in connection with this site.
The barge cleaning activities are complete.
    
    PHI/ Harahan Site, Harahan, Louisiana.We have been contacted by the State of Louisiana
in connection with the investigation and cleanup of diesel and/or jet fuel in soil at this
site. We believe contamination may have been caused by a tenant on the property and have so
notified the regulatory authorities. On March 22, 2005, we submitted an investigation work
plan for approval by the State of Louisiana. We do not know what level of fuel may be
discovered in this investigation or whether cleanup will be required. We have paid
approximately $20,000 in consultant fees related to investigation at this site.
 
 ITEM 1A. RISK FACTORS
  RISKS RELATED TO OUR INDUSTRY
 Freight transportation rates for the Inland Waterways fluctuate from time to time and may decrease.
  An oversupply of barging capacity may lead to reductions in freight rates.
  Yields from North American and worldwide grain harvests could materially affect demand for our barging services.
  Diminishing demand for new barge construction may lead to a reduction in sales prices for new barges.
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Higher fuel prices, if not recouped from our customers, could dramatically
increase operating expenses and adversely affect profitability.
  We are subject to adverse weather and river conditions.
  Seasonal fluctuations in industry demand could adversely affect our operating
results, cash flow and working capital requirements.
  The aging infrastructure on the Inland Waterways may lead to increased costs and disruptions in our operations.
  The inland barge transportation industry is highly competitive; increased competition could adversely affect us.
  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.
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Our failure to comply with domestic or international government regulations
affecting the domestic or foreign barging industries, or changes in these
regulations, may cause us to incur significant expenses or affect our ability
to operate.
  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 barges may lead to increased costs and disruptions in our operations.
  Our cash flows and borrowing facilities may not be adequate for our additional
capital needs and, if we incur additional borrowings, our future cash flow and
capital resources may not be sufficient for payments of interest and principal
of our substantial indebtedness.
  There could be adverse consequences if the pending appeal of the confirmation of our Plan of Reorganization is successful.
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Our barging services outside the United States subject us to changes in foreign economic and political conditions.
  A disposition of our Venezuelan operations would affect earnings.
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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.
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Failure to comply with environmental, health and safety regulations could
result in substantial penalties and changes to our operations.
      Our financial condition and results of operations will not be comparable to the
financial condition or results of operations reflected in our historical
financial statements.
  We are subject to, and may in the future be subject to, disputes, or legal or
other proceedings that could involve significant expenditures by us.
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Investor confidence and the market price of our parent companys 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. SUMBISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS.
 ExhibitNo
    
    Description10.1
    
    2006 Non-Employee Director Compensation Summary Sheet
(incorporated herein by reference to Exhibit 10.1 to ACL Inc.s Current Report on Form 8-K filed January 20, 2006).10.2
    
    Form of Restricted Stock Unit Agreement for non-executives of
the Company (incorporated herein by reference to Exhibit 10.2
to ACL Inc.s Current Report on Form 8-K filed January 20,
2006).10.3
    
    Form of Stock Option Agreement for non-executives of the
Company (incorporated herein by reference to Exhibit 10.3 to
ACL Inc.s Current Report on Form 8-K filed January 20,
2006).10.4
    
    Restricted Stock Unit Deferral Plan (incorporated herein by
reference to Exhibit 10.4 to ACL Inc.s Current Report on
Form 8-K filed January 20, 2006).10.5
    
    Form of Stock Option Agreement (incorporated herein by
reference to Exhibit 10.1 to ACL Inc.s Current Report on
Form 8-K filed February 7, 2006).10.6
    
    Form of Restricted Stock Unit Agreement (incorporated herein
by reference to Exhibit 10.2 to ACL Inc.s Current Report
on Form 8-K filed February 7, 2006).
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ExhibitNo
    
    Description10.7
    
    2006 Executive Annual Incentive Plan (incorporated herein by
reference to Exhibit 10.1 to ACL Inc.s Current Report on
Form 8-K filed March 23, 2006).31.1
    
    Certification by Mark R. Holden, Chief Executive Officer, required by Rule 13a-14(a) of the
Securities Exchange Act of1934.31.2
    
    Certification by Christopher A. Black, Chief Financial Officer, required by Rule 13a-14(a) of the
Securities Exchange Act of 1934.32.1
    
    Certification by Mark R. Holden, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350.32.2
    
    Certification by Christopher A. Black, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.
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SIGNATURES
  AMERICAN 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)
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