##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Form 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2011
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                     to
 COMMERCIAL BARGE LINE COMPANY
 (Exact Name of Registrant as Specified in Charter)
 Delaware
    
    333-124454-12
    
    03-0552365(State or other jurisdiction 
of 
incorporation or organization)
    
    (Commission File Number)
    
    (I.R.S. Employer
Identification No.)
 1701 E. Market Street,
    
    47130Jeffersonville, Indiana
    
    (Zip Code)(Address of principal executive offices)
 (812) 288-0100
(Registrants telephone number, including area code)
Former name or former address, if changed since last report:
N/A
 1701 East Market Street
    
    47130Jeffersonville, Indiana
    
    (Zip Code)(Address of principal executive offices)
  þ o
 o o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ
 Not applicable
 Not applicable.
  None




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##### 



COMMERCIAL BARGE LINE COMPANY
 QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED March 31, 2011
 TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATIONItem 1: Financial Statements (unaudited)
    
    
    3Condensed Consolidated Statements of Operations
    
    
    3Condensed Consolidated Balance Sheets
    
    
    4Condensed Consolidated Statements of Cash Flows
    
    
    5Condensed
Consolidated Statement of Stockholders Equity
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3: Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4: Controls and Procedures
    
    
    32PART II OTHER INFORMATIONItem 1: Legal Proceedings
    
    
    33Item 1A: Risk Factors
    
    
    33Item 2: Unregistered Sales of Securities and Use of Proceeds
    
    
    34Item 3: Defaults on Senior Securities
    
    
    34Item 4: Removed and Reserved
    
    
    34Item 6: Exhibits
    
    
    35SignaturesCertification by CEOCertification by CFOCertification by CEOCertification by CFOEX-10.1EX-10.2EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 COMMERCIAL BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited  In thousands)
 Successor Company
    
    
    Predecessor CompanyQuarter Ended March 31,
    
    
    Quarter Ended March 31,2011
    
    
    2010RevenuesTransportation and Services
    
    $
    162,654
    
    
    $
    136,854Manufacturing
    
    
    16,007
    
    
    
    11,442Revenues
    
    
    178,661
    
    
    
    148,296Cost of SalesTransportation and Services
    
    
    158,809
    
    
    
    123,052Manufacturing
    
    
    16,444
    
    
    
    10,532Cost of Sales
    
    
    175,253
    
    
    
    133,584Gross Profit
    
    
    3,408
    
    
    
    14,712Selling, General and Administrative Expenses
    
    
    18,741
    
    
    
    11,620Operating (Loss) Income
    
    
    (15,333
    )
    
    
    3,092Other Expense (Income)Interest Expense
    
    
    7,468
    
    
    
    9,853Other, Net
    
    
    (130
    )
    
    
    (54
    )Other Expense
    
    
    7,338
    
    
    
    9,799Loss from Continuing Operations Before Income Taxes
    
    
    (22,671
    )
    
    
    (6,707
    )Income Tax Benefit
    
    
    (8,803
    )
    
    
    (3,227
    )Loss from Continuing Operations
    
    
    (13,868
    )
    
    
    (3,480
    )Discontinued Operations, Net of Tax
    
    
    (8
    )
    
    
    Net Loss
    
    $
    (13,876
    )
    
    $
    (3,480
    )
  3




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2011
    
    
    2010(Unaudited)(In thousands)ASSETSCurrent AssetsCash and Cash Equivalents
    
    $
    5,866
    
    
    $
    3,707Accounts Receivable, Net
    
    
    75,121
    
    
    
    83,518Inventory
    
    
    71,277
    
    
    
    50,834Deferred Tax Assets
    
    
    2,788
    
    
    
    10,072Assets Held for Sale
    
    
    1,223
    
    
    
    2,133Prepaid and Other Current Assets
    
    
    41,073
    
    
    
    32,075Total Current Assets
    
    
    197,348
    
    
    
    182,339Properties, Net
    
    
    962,167
    
    
    
    979,655Investment in Equity Investees
    
    
    5,859
    
    
    
    5,743Accounts Receivable, Affiliate
    
    
    16,808
    
    
    
    17,400Other Assets
    
    
    52,127
    
    
    
    53,665Goodwill
    
    
    20,470
    
    
    
    20,470Total Assets
    
    $
    1,254,779
    
    
    $
    1,259,272LIABILITIESCurrent LiabilitiesAccounts Payable
    
    $
    40,719
    
    
    $
    44,782Accrued Payroll and Fringe Benefits
    
    
    11,511
    
    
    
    27,992Deferred Revenue
    
    
    19,359
    
    
    
    14,132Accrued Claims and Insurance Premiums
    
    
    12,313
    
    
    
    12,114Accrued Interest
    
    
    5,584
    
    
    
    11,667Customer Deposits
    
    
    437
    
    
    
    500Other Liabilities
    
    
    24,291
    
    
    
    25,810Total Current Liabilities
    
    
    114,214
    
    
    
    136,997Long Term Debt
    
    
    428,345
    
    
    
    385,152Pension and Post Retirement Liabilities
    
    
    39,219
    
    
    
    38,615Deferred Tax Liabilities
    
    
    195,772
    
    
    
    208,651Other Long Term Liabilities
    
    
    57,259
    
    
    
    60,901Total Liabilities
    
    
    834,809
    
    
    
    830,316SHAREHOLDERS EQUITYOther Capital
    
    
    433,864
    
    
    
    435,487Retained Deficit
    
    
    (20,511
    )
    
    
    (6,635
    )Accumulated Other Comprehensive Income
    
    
    6,617
    
    
    
    104Total
Shareholders Equity
    
    
    419,970
    
    
    
    428,956Total
Liabilities and Shareholders Equity
    
    $
    1,254,779
    
    
    $
    1,259,272
  4




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited  In thousands)
 Successor Company
    
    
    Predecessor CompanyQuarter Ended March 31,
    
    
    Quarter Ended March 31,2011
    
    
    2010OPERATING ACTIVITIESNet Loss
    
    $
    (13,876
    )
    
    $
    (3,480
    )Adjustments to Reconcile Net Loss to Net Cash
(Used in) Provided by Operating
Activities:Depreciation and Amortization
    
    
    27,525
    
    
    
    11,999Debt Premium and Debt
Issuance Cost Amortization
    
    
    (674
    )
    
    
    1,326Deferred Taxes
    
    
    (13,322
    )
    
    
    (2,091
    )Gain on Property Dispositions
    
    
    (25
    )
    
    
    (3,871
    )Share-Based Compensation
    
    
    1,493
    
    
    
    (482
    )Other Operating Activities
    
    
    (1,254
    )
    
    
    744Changes in Operating Assets
and Liabilities:Accounts Receivable
    
    
    7,496
    
    
    
    23,965Inventory
    
    
    (20,443
    )
    
    
    (3,500
    )Other Current Assets
    
    
    (803
    )
    
    
    1,221Accounts Payable
    
    
    (5,351
    )
    
    
    (2,038
    )Accrued Interest
    
    
    (6,083
    )
    
    
    (6,981
    )Other Current Liabilities
    
    
    (5,331
    )
    
    
    (17,131
    )Net Cash Used in
Operating Activities
    
    
    (30,648
    )
    
    
    (319
    )INVESTING ACTIVITIESProperty Additions
    
    
    (10,006
    )
    
    
    (15,554
    )Proceeds from Property Dispositions
    
    
    155
    
    
    
    7,208Proceeds from Government Grant
    
    
    
    
    
    
    2,302Other Investing Activities
    
    
    (4,313
    )
    
    
    (303
    )Net Cash Used in
Investing Activities
    
    
    (14,164
    )
    
    
    (6,347
    )FINANCING ACTIVITIESRevolving Credit Facility Borrowings
    
    
    44,630
    
    
    
    11,035Bank Overdrafts on Operating Accounts
    
    
    1,288
    
    
    
    (3,421
    )Debt Issuance/Refinancing Costs
    
    
    (37
    )
    
    
    (107
    )Tax Benefit (Expense) of Share-Based
Compensation
    
    
    1,090
    
    
    
    Exercise of Stock Options
    
    
    
    
    
    
    211Acquisition of Treasury Stock
    
    
    
    
    
    
    (721
    )Other Financing Activities
    
    
    
    
    
    
    (200
    )Net Cash Provided by
Financing Activities
    
    
    46,971
    
    
    
    6,797Net Increase in Cash and Cash Equivalents
    
    
    2,159
    
    
    
    131Cash and Cash Equivalents at Beginning of Period
    
    
    3,707
    
    
    
    1,198Cash and Cash
Equivalents at End of
Period
    
    $
    5,866
    
    
    $
    1,329
  5




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED
STATEMENT OF SHAREHOLDERS EQUITY
 AccumulatedOtherOther
    
    
    Retained
    
    
    ComprehensiveCapital
    
    
    Deficit
    
    
    Income
    
    
    TotalBalance at December 31, 2010
    
    $
    435,487
    
    
    $
    (6,635
    )
    
    $
    104
    
    
    $
    428,956Excess Tax Benefit of Share-based Compensation
    
    
    1,090
    
    
    
    
    
    
    
    
    
    
    
    1,090Comprehensive Loss:Net Loss
    
    
    
    
    
    
    (13,876
    )
    
    
    
    
    
    
    (13,876
    )Net Gain in Fuel Swaps Designated as Cash
Flow Hedging Instrument, Net of Tax
    
    
    
    
    
    
    
    
    
    
    6,513
    
    
    
    6,513Other
    
    
    (2,713
    )
    
    
    
    
    
    
    
    
    
    
    (2,713
    )Total Comprehensive Loss
    
    $
    (2,713
    )
    
    $
    (13,876
    )
    
    $
    6,513
    
    
    $
    (10,076
    )Balance at March 31, 2011
    
    $
    433,864
    
    
    $
    (20,511
    )
    
    $
    6,617
    
    
    $
    419,970
  6




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except as otherwise indicated)
 Note 1. Reporting Entity and Accounting Policies
       7




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
     Note 2. Debt
 March 31,
    
    
    December 31,2011
    
    
    2010Revolving Credit Facility
    
    $
    194,940
    
    
    $
    150,3102017 Senior Notes
    
    
    200,000
    
    
    
    200,000Plus Purchase Premium
    
    
    33,405
    
    
    
    34,842Total Long Term Debt
    
    $
    428,345
    
    
    $
    385,152
      8




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
   Note 3. Inventory
  March 31,
    
    
    December 31,2011
    
    
    2010Raw Materials
    
    $
    35,185
    
    
    $
    19,255Work in Process
    
    
    9,360
    
    
    
    5,844Parts and Supplies
    
    
    26,732
    
    
    
    25,735$
    71,277
    
    
    $
    50,834
 Note 4. Income Taxes
   Note 5. Employee Benefit Plans
  Quarter EndedMarch 31,Successor
    
    
    Predecessor2011
    
    
    2010Pension Components:Service cost
    
    $
    1,175
    
    
    $
    1,200Interest cost
    
    
    2,650
    
    
    
    2,590Expected return on plan assets
    
    
    (3,225
    )
    
    
    (3,130
    )Amortization of unrecognized losses
    
    
    
    
    
    
    15Net periodic benefit cost
    
    $
    600
    
    
    $
    675Post-retirement Components:Service cost
    
    $
    2
    
    
    $
    5Interest cost
    
    
    55
    
    
    
    87Amortization of net gain
    
    
    (12
    )
    
    
    (270
    )Net periodic benefit cost
    
    $
    45
    
    
    $
    (          178
    )
 9




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 6. Related Party Transactions
    Note 7. Business Segments
     10




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Reportable Segments
    
    
    All Other
    
    
    IntersegmentSuccessor
    
    Transportation
    
    
    Manufacturing
    
    
    Segments(1)
    
    
    Eliminations
    
    
    TotalQuarter ended March 31, 2011Total revenue
    
    $
    161,328
    
    
    $
    27,981
    
    
    $
    1,544
    
    
    $
    (12,192
    )
    
    $
    178,661Intersegment revenues
    
    
    202
    
    
    
    11,974
    
    
    
    16
    
    
    
    (12,192
    )
    
    
    Revenue from external customers
    
    
    161,126
    
    
    
    16,007
    
    
    
    1,528
    
    
    
    
    
    
    
    178,661Operating expenseMaterials, supplies and other
    
    
    56,843
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56,843Rent
    
    
    6,987
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,987Labor and fringe benefits
    
    
    30,243
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,243Fuel
    
    
    35,823
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,823Depreciation and amortization
    
    
    25,519
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,519Taxes, other than income taxes
    
    
    2,867
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,867Gain on disposition of equipment
    
    
    (25
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25
    )Cost of goods sold
    
    
    
    
    
    
    16,444
    
    
    
    552
    
    
    
    
    
    
    
    16,996Total cost of sales
    
    
    158,257
    
    
    
    16,444
    
    
    
    552
    
    
    
    
    
    
    
    175,253Selling, general & administrative
    
    
    17,067
    
    
    
    608
    
    
    
    1,066
    
    
    
    
    
    
    
    18,741Total operating expenses
    
    
    175,324
    
    
    
    17,052
    
    
    
    1,618
    
    
    
    
    
    
    
    193,994Operating loss
    
    $
    (14,198
    )
    
    $
    (1,045
    )
    
    $
    (90
    )
    
    $
    
    
    
    $
    (15,333
    )
 Reportable Segments
    
    
    All Other
    
    
    IntersegmentPredecessor
    
    Transportation
    
    
    Manufacturing
    
    
    Segments(1)
    
    
    Eliminations
    
    
    TotalQuarter ended March 31, 2010Total revenue
    
    $
    135,064
    
    
    $
    25,485
    
    
    $
    1,932
    
    
    $
    (14,185
    )
    
    $
    148,296Intersegment revenues
    
    
    142
    
    
    
    14,043
    
    
    
    
    
    
    
    (14,185
    )
    
    
    Revenue from external customers
    
    
    134,922
    
    
    
    11,442
    
    
    
    1,932
    
    
    
    
    
    
    
    148,296Operating expenseMaterials, supplies and other
    
    
    49,821
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,821Rent
    
    
    5,238
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,238Labor and fringe benefits
    
    
    29,039
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,039Fuel
    
    
    27,887
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,887Depreciation and amortization
    
    
    11,074
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,074Taxes, other than income taxes
    
    
    3,118
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,118Gain on disposition of equipment
    
    
    (3,871
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,871
    )Cost of goods sold
    
    
    
    
    
    
    10,532
    
    
    
    746
    
    
    
    
    
    
    
    11,278Total cost of sales
    
    
    122,306
    
    
    
    10,532
    
    
    
    746
    
    
    
    
    
    
    
    133,584Selling, general & administrative
    
    
    9,807
    
    
    
    664
    
    
    
    1,149
    
    
    
    
    
    
    
    11,620Total operating expenses
    
    
    132,113
    
    
    
    11,196
    
    
    
    1,895
    
    
    
    
    
    
    
    145,204Operating income
    
    $
    2,809
    
    
    $
    246
    
    
    $
    37
    
    
    $
    
    
    
    $
    3,092
 
 1)
    
    Financial data for a segment below the reporting threshold is attributable to a segment
that provides architectural design services. 11




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COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 8. Financial Instruments and Risk Management
   Fair Value ofMeasurements atReporting Date UsingMarkets for IdenticalDescription
    
    3/31/2011
    
    
    Assets (Level 1)Fuel Price Swaps
    
    $
    14,045
    
    
    $
    14,045
   Gallons
    
    
    DollarsFuel Price Swaps at December 31, 2010
    
    
    7,638
    
    
    $
    2,9191st Quarter 2011 Fuel Hedge Expense
    
    
    (5,501
    )
    
    
    (2,055
    )1st Quarter 2011 Changes
    
    
    24,900
    
    
    
    13,181Fuel Price Swaps at March 31, 2011
    
    
    27,037
    
    
    $
    14,045
 12




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 9. Contingencies
  Stockholder litigation.
  Collision Incident, Mile Marker 97 of the Mississippi River.
 13




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
     Note 10. Share-Based Compensation
    14




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
      Note 11. Acquisitions, Dispositions and Impairment
   15




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Paid to Zell affiliates
    
    $
    101,077Paid to remaining shareholders
    
    
    317,200Payments to Share-based compensation holders
    
    
    14,284Assumed Credit Facility
    
    
    169,204Fair value of the 2017 Senior Notes
    
    
    235,000Purchase price
    
    $
    836,765
 Allocation of the Purchase Price
  Cash and cash equivalents
    
    $
    22,468Trade receivables acquired at fair value
    
    
    90,693Other working capital, net
    
    
    (29,958
    )Land
    
    
    20,002Buildings/Land Improvements
    
    
    42,187Boats
    
    
    294,534Barges
    
    
    543,403Construction-in-progress
    
    
    13,110Other long-lived tangible assets
    
    
    67,780Favorable charter contracts
    
    
    25,761Other long term assets
    
    
    23,841Equity Investments
    
    
    5,725Jeffboat tradename and intangibles
    
    
    4,500Unfavorable contracts
    
    
    (61,300
    )Multi-employer pension liability
    
    
    (3,497
    )Pension and post retirement
    
    
    (35,102
    )Net deferred tax
    
    
    (207,852
    )Goodwill
    
    
    20,470Total
    
    $
    836,765
 16




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##### Table of Contents



COMMERCIAL BARGE LINE COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Dispositions and Impairments 
  Note 12. Subsequent Event
   Compensation  Stock Compensation
 17




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##### Table of Contents



ITEM 2.
    
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(MD&A)
 This MD&A includes certain forward-looking statements that involve many risks and
uncertainties. When used, words such as anticipate, expect, believe, intend, may be,
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.
 Results of Operations.
 Liquidity and Capital Resources.
 Changes in Accounting Standards.
 Critical Accounting Policies.
 Quantitative and Qualitative Disclosures about Market Risk.
  OVERVIEW
 Our Business
 The Company
  18




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The Industry
  19




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##### Table of Contents



Source: U.S. Army Corps of Engineers Waterborne Commerce Statistics Center
 Consolidated Financial Overview
      20




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Segment Overview
  Transportation
             21




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22




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Key Operating Statistics
 Three
    
    
    % Change toMonths Ended
    
    
    Prior Year QuarterMarch 31, 2011
    
    
    Increase (Decrease)Ton-miles (000s):Total dry
    
    
    6,798,112
    
    
    
    7.8
    %Total liquid
    
    
    564,577
    
    
    
    16.7
    %Total affreightment ton-miles
    
    
    7,362,689
    
    
    
    8.4
    %Total non-affreightment ton-miles
    
    
    867,245
    
    
    
    28.3
    %Total ton-miles
    
    
    8,229,934
    
    
    
    10.2
    %Average ton-miles per affreightment barge
    
    
    3,249
    
    
    
    13.2
    %Rates per ton mile:Dry rate per ton-mile
    
    
    
    
    
    
    15.3
    %Fuel neutral dry rate per ton-mile
    
    
    
    
    
    
    12.3
    %Liquid rate per ton-mile
    
    
    
    
    
    
    7.7
    %Fuel neutral liquid rate per-ton mile
    
    
    
    
    
    
    1.5
    %Overall rate per ton-mile
    
    $
    15.84
    
    
    
    14.8
    %Overall fuel neutral rate per ton-mile
    
    $
    15.35
    
    
    
    11.3
    %Revenue per average barge operated
    
    $
    66,996
    
    
    
    24.2
    %Fuel price and volume data:Fuel price
    
    $
    2.61
    
    
    
    26.0
    %Fuel gallons
    
    
    13,748
    
    
    
    2.0
    %Revenue data (in thousands):Affreightment revenue
    
    $
    116,396
    
    
    
    24.4
    %Towing
    
    
    10,933
    
    
    
    30.6
    %Charter and day rate
    
    
    17,000
    
    
    
    4.7
    %Demurrage
    
    
    11,838
    
    
    
    22.6
    %Other
    
    
    4,959
    
    
    
    (29.8
    %)Total non-affreightment revenue
    
    
    44,730
    
    
    
    8.2
    %Total transportation segment revenue
    
    $
    161,126
    
    
    
    19.4
    %
 23




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##### Table of Contents



Barge Fleet Changes
 Current Quarter
    
    Dry
    
    
    Tankers
    
    
    TotalBarges operated as of the end of the 4th qtr of 2010
    
    
    2,086
    
    
    
    325
    
    
    
    2,411Retired (includes reactivations)
    
    
    (28
    )
    
    
    (7
    )
    
    
    (35
    )New builds
    
    
    25
    
    
    
    
    
    
    
    25Purchased
    
    
    
    
    
    
    
    
    
    
    Change in number of barges leased
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Barges
operated as of the end of the 1st qtr of 2011
    
    
    2,080
    
    
    
    318
    
    
    
    2,398
  Owned Boat Counts and Average Age by Horsepower Class
 AverageHorsepower Class
    
    Number
    
    
    Age1950 or less
    
    
    35
    
    
    
    33.0Less than 4300
    
    
    22
    
    
    
    35.0Less than 6200
    
    
    43
    
    
    
    36.37000 or over
    
    
    11
    
    
    
    32.5Total/overall age
    
    
    111
    
    
    
    34.6
   Manufacturing
    24




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Manufacturing Segment Units Produced for External Sales or Internal Use
 Quarters Ended March 31,2011
    
    
    2010External sales:Liquid tank barges
    
    
    
    
    
    
    3Ocean tank barges
    
    
    
    
    
    
    1Deck barges
    
    
    6
    
    
    
    Dry cargo barges
    
    
    23
    
    
    
    Total external units sold
    
    
    29
    
    
    
    4Internal sales:Liquid tank barges
    
    
    
    
    
    
    Dry cargo barges
    
    
    25
    
    
    
    33Total units into production
    
    
    25
    
    
    
    33Total units produced
    
    
    54
    
    
    
    37
 25




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##### Table of Contents



Consolidated Financial Overview  Non-GAAP Financial Measure Reconciliation
 NET LOSS TO EBITDA RECONCILIATION
 (Dollars in thousands - Unaudited)
 Successor
    
    
    PredecessorQuarter Ended
    
    
    Quarter EndedMarch 31,
    
    
    March 31,2011
    
    
    2010Net loss from continuing operations
    
    $
    (13,868
    )
    
    $
    (3,480
    )Discontinued operations, net of income taxes
    
    
    (8
    )
    
    
    Consolidated net loss
    
    $
    (13,876
    )
    
    $
    (3,480
    )Adjustments from continuing operations:Interest income
    
    
    (55
    )
    
    
    (1
    )Interest expense
    
    
    7,468
    
    
    
    9,853Depreciation and amortization
    
    
    27,525
    
    
    
    11,999Taxes
    
    
    (8,803
    )
    
    
    (3,227
    )Adjustments from discontinued operations:Interest income
    
    
    
    
    
    
    Interest expense
    
    
    
    
    
    
    Depreciation and amortization
    
    
    
    
    
    
    Taxes
    
    
    
    
    
    
    EBITDA from continuing operations
    
    
    12,267
    
    
    
    15,144EBITDA from discontinued operations
    
    
    (8
    )
    
    
    Consolidated EBITDA
    
    $
    12,259
    
    
    $
    15,144Selected segment EBITDA calculations:Transportation net loss
    
    $
    (12,757
    )
    
    $
    (3,745
    )Interest income
    
    
    (55
    )
    
    
    (1
    )Interest expense
    
    
    7,468
    
    
    
    9,853Depreciation and amortization
    
    
    25,519
    
    
    
    11,074Taxes
    
    
    (8,803
    )
    
    
    (3,227
    )Transportation EBITDA
    
    $
    11,372
    
    
    $
    13,954Manufacturing net loss
    
    $
    (1,021
    )
    
    $
    228Depreciation and amortization
    
    
    1,987
    
    
    
    841Total Manufacturing EBITDA
    
    
    966
    
    
    
    1,069Intersegment profit
    
    
    
    
    
    
    External Manufacturing EBITDA
    
    $
    966
    
    
    $
    1,069
   26




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Outlook
 Second Quarter 2011 Weather Event
     Longer-term Outlook
   27




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##### Table of Contents



OPERATING RESULTS by BUSINESS SEGMENT
Quarter Ended March 31, 2011 as compared with March 31, 2010
 % of ConsolidatedQuarter Ended March 31,
    
    
    
    
    
    
    RevenueSuccessor
    
    
    Predecessor
    
    
    
    
    
    
    Quarter Ended2011
    
    
    2010
    
    
    Variance
    
    
    2011
    
    
    2010REVENUETransportation and Services
    
    $
    162,654
    
    
    $
    136,854
    
    
    $
    25,800
    
    
    
    91.0
    %
    
    
    92.3
    %Manufacturing (external and internal)
    
    
    27,981
    
    
    
    25,485
    
    
    
    2,496
    
    
    
    15.7
    %
    
    
    17.2
    %Intersegment manufacturing
elimination
    
    
    (11,974
    )
    
    
    (14,043
    )
    
    
    2,069
    
    
    
    (6.7
    %)
    
    
    (9.5
    %)Consolidated Revenue
    
    
    178,661
    
    
    
    148,296
    
    
    
    30,365
    
    
    
    100.0
    %
    
    
    100.0
    %OPERATING EXPENSETransportation and Services
    
    
    176,942
    
    
    
    134,008
    
    
    
    42,934Manufacturing (external and internal)
    
    
    29,026
    
    
    
    25,239
    
    
    
    3,787Intersegment manufacturing
elimination
    
    
    (11,974
    )
    
    
    (14,043
    )
    
    
    2,069Consolidated Operating Expense
    
    
    193,994
    
    
    
    145,204
    
    
    
    48,790
    
    
    
    108.6
    %
    
    
    97.9
    %OPERATING (LOSS) INCOMETransportation and Services
    
    
    (14,288
    )
    
    
    2,846
    
    
    
    (17,134
    )Manufacturing (external and internal)
    
    
    (1,045
    )
    
    
    246
    
    
    
    (1,291
    )Consolidated Operating (Loss) Income
    
    
    (15,333
    )
    
    
    3,092
    
    
    
    (18,425
    )
    
    
    (8.6
    %)
    
    
    2.1
    %Interest Expense
    
    
    7,468
    
    
    
    9,853
    
    
    
    (2,385
    )Other Expense (Income)
    
    
    (130
    )
    
    
    (54
    )
    
    
    (76
    )Loss Before Income Taxes
    
    
    (22,671
    )
    
    
    (6,707
    )
    
    
    (15,964
    )Income Tax Benefit
    
    
    (8,803
    )
    
    
    (3,227
    )
    
    
    (5,576
    )Discontinued Operations
    
    
    (8
    )
    
    
    
    
    
    
    (8
    )Net Loss
    
    $
    (13,876
    )
    
    $
    (3,480
    )
    
    $
    (10,396
    )Domestic Barges Operated (average of
period beginning and end)
    
    
    2,405
    
    
    
    2,501
    
    
    
    (96
    )Revenue per Barge Operated (Actual)
    
    $
    66,996
    
    
    $
    53,947
    
    
    $
    13,049
 28




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##### Table of Contents



RESULTS OF OPERATIONS
 Quarter ended March 31, 2011 comparison to quarter ended March 31, 2010
 Revenue.
    Operating Expense.
   Operating Loss
   Interest Expense.
 29




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##### Table of Contents



Income Tax Expense.
 Net Income (Loss).
 LIQUIDITY AND CAPITAL RESOURCES
         30




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##### Table of Contents



Our Indebtedness
  Net Cash, Capital Expenditures and Cash Flow
    CHANGES IN ACCOUNTING STANDARDS
    CRITICAL ACCOUNTING POLICIES
    31




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##### Table of Contents



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Fuel Price Risk
  Interest Rate and Other Risks
  Foreign Currency Exchange Rate Risks
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
 32




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##### Table of Contents



Changes in Internal Control over Financial Reporting.
 
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 ITEM 1A. RISK FACTORS
  Risks Related to Our Industry
 
    
    The aftermath of the global economic crisis, which began in 2008, may continue to have
detrimental impacts on our business.
    
    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.
    
    Any decrease in future demand for new barge construction may lead to a reduction in
sales volume and prices for new barges.
    
    Volatile steel prices may lead to a reduction in or delay of demand for new barge
construction.
    
    Higher fuel prices, if not recouped from our customers, could dramatically increase
operating expenses and adversely affect profitability.
    
    Our operating margins are impacted by a low margin legacy contract and by spot rate
market volatility for grain volume and pricing.
    
    We are subject to adverse weather and river conditions, including marine accidents.
    
    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.
    
    Our failure to comply with government regulations affecting the barging industry, or
changes in these regulations, may cause us to incur significant expenses or affect our
ability to operate.
    
    Our maritime operations expose us to numerous legal and regulatory requirements, and
violation of these regulations could result in criminal liability against us or our
officers.
    
    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.
 33




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##### Table of Contents



Risks Related to Our Business
 
    
    We are named as a defendant in lawsuits and we are in receipt of other claims and we
cannot predict the outcome of such litigation and claims, which may result in the
imposition of significant liability.
    
    Our insurance may not be adequate to cover our operational risks.
    
    Our aging fleet of dry cargo barges may lead to a decline in revenue if we do not
replace the barges or drive efficiency in our operations.
    
    Our cash flows and borrowing facilities may not be adequate for our additional capital
needs and our future cash flow and capital resources may not be sufficient for payments
of interest and principal of our substantial indebtedness.
    
    A significant portion of our borrowings are tied to floating interest rates which may
expose us to higher interest payments should interest rates increase substantially.
    
    We face the risk of breaching covenants in our Existing Credit Facility.
    
    The loss of one or more key customers, or material nonpayment or nonperformance by one
or more of our key customers, could cause a significant loss of revenue and may adversely
affect profitability.
    
    A major accident or casualty loss at any of our facilities or affecting free
navigation of the Gulf or the Inland Waterways could significantly reduce production.
    
    Potential future acquisitions or investments in other companies may have a negative
impact on our business.
    
    A temporary or permanent closure of the river to barge traffic in the Chicago area in
response to the threat of Asian carp migrating into the Great Lakes may have an adverse
effect on operations in the area.
    
    Interruption or failure of our information technology and communications systems, or
compliance with requirements related to controls over our information technology
protocols, could impair our ability to effectively provide our services or the integrity
of our information.
    
    Many of our employees are covered by federal maritime laws that may subject us to
job-related claims.
    
    We have experienced work stoppages by union employees in the past, and future work
stoppages may disrupt our services and adversely affect our operations.
    
    The loss of key personnel, including highly skilled and licensed vessel personnel,
could adversely affect our business.
    
    Failure to comply with environmental, health and safety regulations could result in
substantial penalties and changes to our operations.
    
    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.
    
    Our substantial debt could adversely affect our financial condition.
    
    We may be unable to service our indebtedness.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Not applicable.
 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 Not
 
 ITEM 4. REMOVED AND RESERVED
 ITEM 5. OTHER INFORMATION
  34




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ITEM 6. EXHIBITS
 Exhibit No.
    
    Description10.1*
    
    Employment Letter Agreement, dated January 7, 2011, by and between American Commercial Linesand Brian McDonald.10.2*
    
    Supplement to Employment Letter Agreement, dated April 5, 2011, by and between CommercialBarge Line Company and Brian McDonald.31.1*
    
    Certification by Michael P. Ryan, Chief Executive Officer, required by Rule 13a-14(a) of theSecurities Exchange Act of 1934.31.2*
    
    Certification by Brian P. McDonald, Interim Chief Financial Officer, required by Rule13a-14(a) of the Securities Exchange Act of 1934.32.1*
    
    Certification by Michael P. Ryan, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350.32.2 *
    
    Certification by Brian P. McDonald, Interim Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.
 
 *
    
    Filed herein 35




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##### Table of Contents



SIGNATURES
  COMMERCIAL BARGE  LINE COMPANYBy:
    /s/  Michael P.  RyanMichael P.  RyanPresident and Chief Executive Officer By:
    /s/  Brian P. McDonaldBrian P. McDonaldInterim Chief Financial Officer
(Principal Financial Officer)




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit No.
    
    Description10.1*
    
    Employment Letter Agreement, dated January 7, 2011, by and between American Commercial Lines
and Brian McDonald.10.2*
    
    Supplement to Employment Letter Agreement, dated April 5, 2011, by and between Commercial
Barge Line Company and Brian McDonald.31.1*
    
    Certification by Michael P. Ryan, Chief Executive Officer, required by Rule 13a-14(a) of the
Securities Exchange Act of 1934.31.2*
    
    Certification by Brian P. McDonald, Interim Chief Financial Officer, required by Rule
13a-14(a)of the Securities Exchange Act of 1934.32.1*
    
    Certification by Michael P. Ryan, Chief Executive Officer, pursuant to 18 U.S.C. Section
1350.32.2 *
    
    Certification by Brian P. McDonald, Interim Chief Financial Officer, pursuant to 18 U.S.C.
Section 1350.
 
 *
    
    Filed herein