##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    June 30, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934   Commission File Number
    000-51562
  AMERICAN COMMERCIAL LINES
    INC.
 (Exact name of registrant as
    specified in its charter)
  
  Delaware(State or Other Jurisdiction
    of
    Incorporation or Organization)

75-3177794(I.R.S. Employer
    Identification No.)1701 East Market Street
    Jeffersonville, Indiana(Address of Principal
    Executive Offices)

47130(Zip
    Code)   (812) 288-0100
 (Registrants telephone
    number, including area code)
  Not
    applicable (Former
    name, former address and former fiscal year, if changed since
    last report)
  þ o
  12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
  þ o




---



##### 



AMERICAN
    COMMERCIAL LINES INC.
    QUARTERLY REPORT ON
    FORM 10-Q
    FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2008
    TABLE OF CONTENTS
   
 PagePART I FINANCIAL INFORMATIONItem 1:


Financial Statements (unaudited)


3Condensed Consolidated Income Statements


3Condensed Consolidated Balance Sheets


4Condensed Consolidated Statements of Cash
    Flows


5Condensed Consolidated Statement of
    Stockholders Equity


6Notes to Condensed Consolidated Financial
    Statements


7Item 2:


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


21Item 3:


Quantitative and Qualitative Disclosures About
    Market Risk


43Item 4:


Controls and Procedures


43PART II OTHER INFORMATIONItem 1:


Legal Proceedings


44Item 1A:


Risk Factors


46Item 2:


Unregistered Sales of Securities and Use of
    Proceeds


54Item 6:


Exhibits


55Signatures


56Certification by CEOCertification by CFOCertification by CEOCertification by CFOExhibit 10.9Exhibit 10.10Exhibit 10.11Exhibit 10.13Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2   2




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS AMERICAN
    COMMERCIAL LINES INC.



CONDENSED
    CONSOLIDATED INCOME STATEMENTS  Quarter Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007(Unaudited)(In thousands, except shares and per share amounts)RevenuesTransportation and Services

$
227,085


$
185,869


$
433,539


$
361,998Manufacturing


95,609



75,345



159,671



127,460Revenues


322,694



261,214



593,210



489,458Cost of SalesTransportation and Services


200,698



158,462



381,736



299,066Manufacturing


88,059



70,355



147,904



119,568Cost of Sales


288,757



228,817



529,640



418,634Gross Profit


33,937



32,397



63,570



70,824Selling, General and Administrative Expenses


20,431



18,407



40,504



34,838Operating Income


13,506



13,990



23,066



35,986Other Expense (Income)Interest Expense


5,988



2,818



12,720



5,999Debt Retirement Expenses


2,379



2,189



2,379



23,938Other, Net


(296
)


(491
)


(1,146
)


(1,721
)Other Expenses


8,071



4,516



13,953



28,216Income from Continuing Operations Before Taxes


5,435



9,474



9,113



7,770Income Taxes


2,071



3,574



3,446



2,936Income from Continuing Operations


3,364



5,900



5,667



4,834Discontinued Operations, Net of Tax


291



(3
)


303



(49
)Net Income

$
3,655


$
5,897


$
5,970


$
4,785Basic Earnings Per Common Share:Income from continuing operations

$
0.06


$
0.10


$
0.11


$
0.08Income from discontinued operations, net of tax


0.01







0.01



Basic Earnings Per Common Share

$
0.07


$
0.10


$
0.12


$
0.08Earnings Per Common Share  Assuming Dilution:Income from continuing operations

$
0.06


$
0.09


$
0.11


$
0.08Income from discontinued operations, net of tax


0.01







0.01



Earnings Per Common Share  Assuming Dilution:

$
0.07


$
0.09


$
0.12


$
0.08Weighted Average Shares OutstandingBasic


50,477,384



61,349,569



50,277,909



61,349,190Diluted


50,897,559



62,645,171



50,911,237



62,858,400    3




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.



CONDENSED
    CONSOLIDATED BALANCE SHEETS  June 30,


December 31,2008


2007(Unaudited)(In thousands, except shares and per share amounts)ASSETSCurrent AssetsCash and Cash Equivalents

$
14,010


$
5,021Accounts Receivable, Net


126,062



114,921Inventory


87,930



70,890Deferred Tax Asset


2,430



2,582Assets Held for Sale


2,934



325Prepaid and Other Current Assets


30,310



26,336Total Current Assets


263,676



220,075Properties, Net


510,974



511,832Investment in Equity Investees


3,511



3,456Other Assets


23,388



25,448Total Assets

$
801,549


$
760,811LIABILITIESCurrent LiabilitiesAccounts Payable

$
56,692


$
61,130Accrued Payroll and Fringe Benefits


15,890



15,720Deferred Revenue


27,018



17,824Accrued Claims and Insurance Premiums


16,848



15,647Accrued Interest


3,027



1,688Short Term Debt


445,000



Current Portion of Long Term Debt


750



Customer Deposits


8,456



5,596Other Liabilities


38,473



32,036Total Current Liabilities


612,154



149,641Long Term Debt


700



439,760Pension Liability


7,430



5,252Deferred Tax Liability


27,981



26,569Other Long Term Liabilities


14,047



14,198Total Liabilities


662,312



635,420STOCKHOLDERS EQUITYCommon stock; authorized 250,000,000 shares at
    $.01 par value; 63,227,300 and 62,549,666 shares
    issued and outstanding as of June 30, 2008 and
    December 31, 2007, respectively


632



626Treasury Stock 12,597,748 and 12,407,006 shares at
    June 30, 2008 and December 31, 2007, respectively


(312,822
)


(309,517
)Other Capital


288,699



279,266Retained Earnings


153,879



148,426Accumulated Other Comprehensive Income


8,849



6,590Total Stockholders Equity


139,237



125,391Total Liabilities and Stockholders Equity

$
801,549


$
760,811    4




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  CONDENSED CONSOLIDATED STATEMENT OF CASH
    FLOWS
  Six Months Ended June 30,2008


2007(Unaudited)(In thousands)OPERATING ACTIVITIESNet Income

$
5,970


$
4,785Adjustments to Reconcile Net Income to Net Cash Provided by
    Operating Activities:Depreciation and Amortization


26,134



24,765Debt Retirement Costs


2,379



23,938Debt Issuance Cost Amortization


440



216Deferred Taxes


385



7,467Gain on Property Dispositions


(284
)


(1,584
)Share-Based Compensation


4,927



3,730Other Operating Activities


130



561Changes in Operating Assets and Liabilities:Accounts Receivable


(3,336
)


1,081Inventory


(15,129
)


(727
)Accrued Interest


1,329



(3,630
)Other Current Assets


(342
)


(1,033
)Accounts Payable


(1,824
)


(13,127
)Other Current Liabilities


21,840



(20,284
)Net Cash Provided by Operating Activities before Reorganization
    Items


42,619



26,158Reorganization Items Paid






(33
)Net Cash Provided by Operating Activities


42,619



26,125INVESTING ACTIVITIESProperty Additions


(25,001
)


(31,099
)McKinney Acquisition






(15,574
)Investment in Summit Contracting


(8,462
)


(6,132
)Proceeds from Property Dispositions


803



4,242Other Investing Activities


(204
)


(2,095
)Net Cash Used in Investing Activities


(32,864
)


(50,658
)FINANCING ACTIVITIESRevolving Credit Facility Borrowings


6,000



231,1002015 Senior Note Repayments






(119,500
)Tender Premium Paid






(18,390
)Outstanding Checks


(4,395
)


6,692Debt Costs


(3,578
)


(1,309
)Tax Benefit of Share-based Compensation


3,517



10,935Exercise of Stock Options


995



2,001Acquisition of Treasury Stock


(3,305
)


(6,169
)Share Repurchase Program






(85,458
)Other Financing Activities






(372
)Net Cash (Used in) Provided by Financing Activities


(766
)


19,530Net Increase (Decrease) in Cash and Cash Equivalents


8,989



(5,003
)Cash and Cash Equivalents at Beginning of Period


5,021



5,113Cash and Cash Equivalents at End of Period

$
14,010


$
110    5




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.



CONDENSED
    CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY  AccumulatedOtherCommon Stock


Treasury


Other


Retained


ComprehensiveShares


Amount


Stock


Capital


Earnings


Income


Total(Unaudited)(Shares and dollars in thousands)Balance at December 31, 2007, as previously reported


50,143


$
626


$
(309,517
)

$
279,266


$
148,426


$
6,590


$
125,391Adjustment to Opening Retained Earnings for Change in Pension
    and Post Retirement Valuation Date per SFAS 158, Net of Tax


















(518
)






(518
)Adjusted Balance at December 31, 2007


50,143



626



(309,517
)


279,266



147,908



6,590



124,873Amortization of Restricted Stock, Stock Options, Performance
    Shares and Restricted Stock Units














4,927











4,927Tax Benefit of Share-based Compensation














3,517











3,517Exercise of Stock Options


472



4







991











995Issuance of Restricted Stock Units and Performances Shares


206



2







(2
)










Acquisition of Treasury Stock


(191
)






(3,305
)














(3,305
)Comprehensive Income:Net Income


















5,970







5,970Unrealized gain on fuel swaps designated as cash flow hedging
    instrument, net of tax






















2,259



2,259Other


















1







1Total Comprehensive Income

















$
5,971


$
2,259


$
8,230Balance at June 30, 2008


50,630


$
632


$
(312,822
)

$
288,699


$
153,879


$
8,849


$
139,237    6




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollars
    in thousands, except as otherwise indicated)  Note 1.
    Reporting
    Entity and Accounting Policies        Form 10-Q Regulation S-X.
       7




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      instrument-by-instrument
   8




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Form 10-K
    Note 2.
    Earnings
    Per Share   9




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Quarter Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Weighted average common shares outstanding (used to calculate
    basic earnings per share)


50,477,384



61,349,569



50,277,909



61,349,190Shares if all dilutive potential common shares outstanding
    during the period were exercised


420,175



1,295,602



633,328



1,509,210Shares used to calculate diluted EPS


50,897,559



62,645,171



50,911,237



62,858,400   Note 3.
    Stockholders
    Equity      Number of Shares


Number of Shares


Dollar Value


Dollar ValueQuarter Ended


Six Months Ended


Quarter Ended


Six Months EndedJune 30,


June 30,


June 30,


June 30,2008


2007


2008


2007


2008


2007


2008


2007Repurchase Plan






5,624







5,624


$



$
141,904


$



$
141,904Cashless exercises


23



14



191



177



365



417



3,305



6,169Total


23



5,638



191



5,801


$
365


$
142,321


$
3,305


$
148,073    10




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 4.
    Debt  June 30,


December 31,2008


2007Revolving Credit Facility

$
445,000


$
439,000Elliott Bay Note


750



760Summit Contracting Note


700



Total Debt


446,450



439,760Less Short Term Debt


445,000



Less Current Portion of Long Term Debt


750



Long Term Debt

$
700


$
439,760          11




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 5.
    Inventory    June 30,


December 31,2008


2007Raw Materials

$
26,521


$
19,009Work in Process


26,690



25,203Parts and Supplies


34,719



26,678$
87,930


$
70,890   Note 6.
    Income
    Taxes       12




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 7.
    Employee
    Benefit Plans    Quarter Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007Pension Components:Service cost

$
1,327


$
1,242


$
2,654


$
2,484Interest cost


2,356



2,251



4,712



4,502Expected return on plan assets


(2,971
)


(2,900
)


(5,942
)


(5,800
)Amortization of unrecognized losses


14







28



Net periodic benefit cost

$
726


$
593


$
1,452


$
1,186Post-retirement Components:Service cost

$
27


$
49


$
54


$
98Interest cost


136



142



272



284Amortization of net gain


(61
)


(5
)


(122
)


(10
)Net periodic benefit cost

$
102


$
186


$
204


$
372     Note 8.
    Business
    Segments    Form 10-K
     13




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Statement
    of Operating Income by Reportable Segment
  Reportable Segments


All Other


IntersegmentTransportation


Manufacturing


Segments


Elimination


TotalQuarter ended June 30, 2008Total revenue

$
217,527


$
96,104


$
10,161


$
(1,098
)

$
322,694Intersegment revenues


340



495



263



(1,098
)


Revenue from external customers


217,187



95,609



9,898







322,694Operating expenseMaterials, supplies and other


77,392















77,392Rent


5,731















5,731Labor and fringe benefits


28,988















28,988Fuel


65,270















65,270Depreciation and amortization


12,232















12,232Taxes, other than income taxes


3,765















3,765Loss on disposition of equipment


75















75Cost of goods sold






88,059



7,245







95,304Total cost of sales


193,453



88,059



7,245







288,757Selling, general & administrative


17,020



872



2,539







20,431Total operating expenses


210,473



88,931



9,784







309,188Operating income

$
6,714


$
6,678


$
114


$



$
13,506   Reportable Segments


All Other


IntersegmentTransportation


Manufacturing


Segments


Elimination


TotalQuarter ended June 30, 2007Total revenue

$
186,057


$
81,218


$



$
(6,061
)

$
261,214Intersegment revenues


188



5,873







(6,061
)


Revenue from external customers


185,869



75,345











261,214Operating expenseMaterials, supplies and other


67,932















67,932Rent


6,264















6,264Labor and fringe benefits


27,819















27,819Fuel


40,372















40,372Depreciation and amortization


11,922















11,922Taxes, other than income taxes


4,112















4,112Loss on disposition of equipment


41















41Cost of goods sold






70,355











70,355Total cost of sales


158,462



70,355











228,817Selling, general & administrative


17,357



1,050











18,407Total operating expenses


175,819



71,405











247,224Operating income

$
10,050


$
3,940


$



$



$
13,990  14




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Statement
    of Operating Income by Reportable Segment
  Reportable Segments


All Other


IntersegmentTransportation


Manufacturing


Segments


Elimination


TotalSix Months ended June 30, 2008Total revenue

$
422,464


$
160,657


$
12,091


$
(2,002
)

$
593,210Intersegment revenues


456



986



560



(2,002
)


Revenue from external customers


422,008



159,671



11,531







593,210Operating expenseMaterials, supplies and other


154,819















154,819Rent


11,936















11,936Labor and fringe benefits


56,037















56,037Fuel


119,510















119,510Depreciation and amortization


24,139















24,139Taxes, other than income taxes


7,909















7,909Gain on disposition of equipment


(284
)














(284
)Cost of goods sold






147,904



7,670







155,574Total cost of sales


374,066



147,904



7,670







529,640Selling, general & administrative


34,840



1,760



3,904







40,504Total operating expenses


408,906



149,664



11,574







570,144Operating income (loss)

$
13,102


$
10,007


$
(43
)

$



$
23,066   Reportable Segments


All Other


IntersegmentTransportation


Manufacturing


Segments


Elimination


TotalSix Months ended June 30, 2007Total revenue

$
362,307


$
133,898


$



$
(6,747
)

$
489,458Intersegment revenues


309



6,438







(6,747
)


Revenue from external customers


361,998



127,460











489,458Operating expenseMaterials, supplies and other


129,715















129,715Rent


12,237















12,237Labor and fringe benefits


52,916















52,916Fuel


74,391















74,391Depreciation and amortization


23,553















23,553Taxes, other than income taxes


7,838















7,838Gain on disposition of equipment


(1,584
)














(1,584
)Cost of goods sold






119,568











119,568Total cost of sales


299,066



119,568











418,634Selling, general & administrative


32,891



1,947











34,838Total operating expenses


331,957



121,515











453,472Operating income

$
30,041


$
5,945


$



$



$
35,986  15




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 9.
    Financial
    Instruments and Risk Management    Gallons


AverageSettlement Date

Hedged


Fixed PriceJune-08


1,200,000



2.98July-08


1,000,000



3.05August-08


1,000,000



3.33September-08


1,200,000



3.57October-08


1,000,000



3.69November-08


400,000



3.83December-08


200,000



3.89January-09


200,000



3.89February-09


200,000



3.89March-09


200,000



3.89April-09


200,000



3.89May-09


200,000



3.89June-09


200,000



3.897,200,000   Note 10.
    Acquisitions
    and Dispositions   16




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Current Assets

$
961Properties, Net


12,512Goodwill


2,100Purchase Price

$
15,573     Current Assets

$
7,786Properties, Net


3,979Long Term Assets


16Covenant Not to Compete


2,530Tradenames


1,980Customer Relationships


1,460Customer Backlog


280Permits/Licenses


170Goodwill


63Purchase Price

$
18,264      17




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 11.
    Fair
    Market Value Accounting    Fair Value Measurements atReporting Date UsingMarkets for IdenticalDescription

6/30/2008

Assets (Level 1)Fuel price swaps

$
3,568


$
3,568   Note 12.
    Contingencies          e-mail Form 8-K
 18




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13.
    Share-based
    Compensation    Note 14.
    Subsequent
    Event       19




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           20




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##### Table of Contents



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  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. Form 10-K
  Quantitative and Qualitative Disclosures about Market
    Risk. Form 10-K
  OVERVIEW
  Our
    Business
   21




---



##### Table of Contents



Trac
      The
    Industry
  Transportation Industry:
     22




---



##### Table of Contents



ton-miles,
  
   The Manufacturing Industry:
  Consolidated
    Financial Overview
     23




---



##### Table of Contents



ton-mile
  ton-mile
 24




---



##### Table of Contents



Transportation
        ton-miles, ton-miles
      ton-miles
 25




---



##### Table of Contents



Key
    operating statistics
  Three


% Change to


Six


% Change toMonths Ended


Prior Year Quarter


Months Ended


Prior Year YTDJune 30, 2008


Increase (Decrease)


June 30, 2008


Increase (Decrease)Ton-miles
    (000s):Total dry


7,797,906



(13.3
)%


15,916,350



(9.1
)%Total liquid


707,130



(10.9
)%


1,469,415



(6.1
)%Total affreightment
    ton-miles


8,505,036



(13.1
)%


17,385,765



(8.9
)%Total non-affreightment
    ton-miles


1,135,385



13.4
%


2,280,070



18.1
%Total
    ton-miles


9,640,421



(10.7
)%


19,665,835



(6.4
)%Average
    ton-miles
    per affreightment barge


3,308



(9.1
)%


6,707



(3.3
)%Rates per ton mile:Dry rate per
    ton-mile






25.8
%






19.9
%Fuel neutral dry rate per
    ton-mile






12.9
%






8.9
%Liquid rate per
    ton-mile






37.1
%






30.1
%Fuel neutral liquid rate per-ton mile






13.2
%






9.8
%Overall rate per
    ton-mile

$
17.88



27.9
%

$
17.00



21.9
%Overall fuel neutral rate per
    ton-mile

$
15.82



13.2
%

$
15.26



9.3
%Revenue per average barge operated

$
79,179



21.8
%

$
152,075



22.5
%Fuel price and volume data:Fuel price

$
3.44



71.9
%

$
3.12



65.6
%Fuel gallons


18,966



(5.9
)%


38,249



(3.0
)%Revenue data (in thousands):Affreightment revenue

$
151,630



11.1
%

$
295,004



11.0
%Towing


22,189



45.2
%


42,407



51.9
%Charter and day rate


19,075



22.0
%


38,284



33.3
%Demurrage


10,695



14.5
%


22,353



3.2
%Other


13,598



48.8
%


23,960



34.1
%Total non-affreightment revenue


65,557



32.7
%


127,004



32.1
%Total transportation segment revenue

$
217,187



16.8
%

$
422,008



16.6
%    26




---



##### Table of Contents



Domestic Barges  YTD

Dry


Tankers


TotalBarges operated as of the end of 2007


2,440



388



2,828Retired


(72
)


(4
)


(76
)New builds










Purchased


1







1Change in number of barges leased


(31
)






(31
)Barges operated as of the end of the 2nd qtr 2008


2,338



384



2,722     Owned
    Boat Counts and Average Age by Horsepower Class
  AverageHorsepower Class

Number


Age1950 or less


57



31.5Less than 4300


22



34.0Less than 6200


43



33.57000 or over


15



31.0Total/overall age


137



32.5     ton-miles, Ton-mile ton-mile ton-miles. ton-miles
   27




---



##### Table of Contents



28




---



##### Table of Contents



Manufacturing
    Manufacturing
    segment units produced for external sales or internal
    use
  Quarter Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007External sales:Liquid tank barges


17



6



26



13Ocean tank barges


2







3



Dry cargo barges


93



93



172



175Total external units sold


112



99



201



188Internal sales:Liquid tank barges






2







2Dry cargo barges














Total units into production






2







2Total units produced


112



101



201



190    29




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##### Table of Contents



Consolidated
    Financial Overview  Non-GAAP Financial Measure
    Reconciliation
  AMERICAN
    COMMERCIAL LINES INC.
  NET
    INCOME TO EBITDA RECONCILIATION
  Quarter Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007(Unaudited)(Dollars in thousands)Net Income from Continuing Operations

$
3,364


$
5,900


$
5,667


$
4,834Discontinued Operations, Net of Income Taxes


291



(3
)


303



(49
)Consolidated Net Income

$
3,655


$
5,897


$
5,970


$
4,785Adjustments from Continuing Operations:Interest Income


(12
)


(103
)


(62
)


(127
)Interest Expense


5,988



2,818



12,720



5,999Debt Retirement Expenses


2,379



2,189



2,379



23,938Depreciation and Amortization


13,488



12,554



26,134



24,765Taxes


2,071



3,574



3,446



2,936Adjustments from Discontinued Operations:Interest Income


(13
)


(32
)


(32
)


(86
)Depreciation and Amortization














Taxes


158



(1
)


165



(29
)EBITDA from Continuing Operations


27,278



26,932



50,284



62,345EBITDA from Discontinued Operations


436



(36
)


436



(164
)Consolidated EBITDA

$
27,714


$
26,896


$
50,720


$
62,181EBITDA from Continuing Operations by Segment:Transportation Net Income

$
(3,448
)

$
1,981


$
(4,458
)

$
(1,379
)Interest Income


(10
)


(103
)


(58
)


(127
)Interest Expense


5,988



2,818



12,720



5,999Debt Retirement Expenses


2,379



2,189



2,379



23,938Depreciation and Amortization


12,232



11,922



24,139



23,553Taxes


2,071



3,574



3,446



2,936Transportation EBITDA

$
19,212


$
22,381


$
38,168


$
54,920Manufacturing Net Income

$
6,807


$
4,821


$
10,314


$
7,267Interest Income














Interest Expense














Depreciation and Amortization


694



632



1,348



1,212Taxes














Total Manufacturing EBITDA


7,501



5,453



11,662



8,479Intersegment Profit


(87
)


(902
)


(234
)


(1,054
)External Manufacturing EBITDA

$
7,414


$
4,551


$
11,428


$
7,425    30




---



##### Table of Contents



Outlook
  Recent Event:
  Transportation:
    
    Dry cargo barge retirements in the first six months of 2008
    totaled 72 barges, bringing the total number of retirements in
    the period beginning January 1, 2006 through the first
    quarter of 2008 to 558 units, or almost 20% of the
    Companys previously existing dry cargo fleet. We expect a
    total of approximately 180 barge reductions in our dry fleet in
    2008. We are not building any new dry cargo barges during 2008
    for our transportation division at our shipyard and expect that
    increasing the efficiency of the existing fleet should
    compensate for a large portion of the scrapping of older barges
    in the near term.
    We have increased the number of liquid tank barges to be built
    at our shipyard later in 2008, in order to add approximately 15%
    to our existing liquid tank barge barrel capacity to accommodate
    accelerated growth in our liquids division.
    In August 2007 we established a headquarters location in
    Houston, Texas for our liquids division to more directly service
    the majority of our primary liquids customers and prospects.
    We continue replacing certain seasonal dry cargo spot business
    with more ratable long-term contract business. 31




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##### Table of Contents



Year-to-date
  year-to-date
      dock-to-dock dock-to-door door-to-door
 32




---



##### Table of Contents



33




---



##### Table of Contents



year-to-date
    Manufacturing:
  year-to-date
 34




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC. OPERATING RESULTS BY BUSINESS SEGMENT
    Quarter Ended June 30, 2008 as compared with Quarter Ended
    June 30, 2007
  % of ConsolidatedQuarter Ended





RevenueJune 30,





2nd Quarter2008


2007


Variance


2008


2007(Dollars in thousands except where noted)(Unaudited)REVENUETransportation and Services

$
227,085


$
185,869


$
41,216



70.4
%


71.2
%Manufacturing (external and internal)


96,104



81,218



14,886



29.8
%


31.1
%Intersegment manufacturing elimination


(495
)


(5,873
)


5,378



(0.2
)%


(2.3
)%Consolidated Revenue


322,694



261,214



61,480



100.0
%


100.0
%OPERATING EXPENSETransportation and Services


220,257



175,819



44,438Manufacturing (external and internal)


89,339



76,376



12,963Intersegment manufacturing elimination


(408
)


(4,971
)


4,563Consolidated Operating Expense


309,188



247,224



61,964



95.8
%


94.6
%OPERATING INCOMETransportation and Services


6,828



10,050



(3,222
)Manufacturing (external and internal)


6,765



4,842



1,923Intersegment manufacturing elimination


(87
)


(902
)


815Consolidated Operating Income


13,506



13,990



(484
)


4.2
%


5.4
%Interest Expense


5,988



2,818



3,170Debt Retirement Expenses


2,379



2,189



190Other Expense (Income)


(296
)


(491
)


195Income Before Income Taxes


5,435



9,474



(4,039
)Income Taxes


2,071



3,574



(1,503
)Discontinued Operations


291



(3
)


294Net Income

$
3,655


$
5,897


$
(2,242
)Domestic Barges Operated (average of period beginning and end)


2,743



2,860



(117
)Revenue per Barge Operated

$
79,179


$
65,001


$
14,178   RESULTS
    OF OPERATIONS
  Three
    months ended June 30, 2008 comparison to three months ended
    June 30, 2007
  Revenue.
     35




---



##### Table of Contents



Operating Expense.
        Operating Income.
  Interest Expense.
  Debt Retirement Expense.
  Income Tax Expense.
  Discontinued Operations, Net of Taxes.
  Net Income.
 36




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC. OPERATING RESULTS BY BUSINESS SEGMENT
    Six Months Ended June 30, 2008 as compared with Six Months
    Ended June 30, 2007
  % of ConsolidatedSix Months Ended





RevenueJune 30,





Six Months2008


2007


Variance


2008


2007(Unaudited)(Dollars in thousands except where noted)REVENUETransportation and Services

$
433,539


$
361,998


$
71,541



73.1
%


74.0
%Manufacturing (external and internal)


160,657



133,898



26,759



27.1
%


27.3
%Intersegment manufacturing elimination


(986
)


(6,438
)


5,452



(0.2
)%


(1.3
)%Consolidated Revenue


593,210



489,458



103,752



100.0
%


100.0
%OPERATING EXPENSETransportation and Services


420,480



331,957



88,523Manufacturing (external and internal)


150,416



126,899



23,517Intersegment manufacturing elimination


(752
)


(5,384
)


4,632Consolidated Operating Expense


570,144



453,472



116,672



96.1
%


92.6
%OPERATING INCOMETransportation and Services


13,059



30,041



(16,982
)Manufacturing (external and internal)


10,241



6,999



3,242Intersegment manufacturing elimination


(234
)


(1,054
)


820Consolidated Operating Income


23,066



35,986



(12,920
)


3.9
%


7.4
%Interest Expense


12,720



5,999



6,721Debt Retirement Expenses


2,379



23,938



(21,559
)Other Expense (Income)


(1,146
)


(1,721
)


575Income before Income Taxes


9,113



7,770



1,343Income Taxes


3,446



2,936



510Discontinued Operations


303



(49
)


352Net Income

$
5,970


$
4,785


$
1,185Domestic Barges Operated (average of period beginning and end)


2,775



2,917



(142
)Revenue per Barge Operated

$
152,075


$
124,121


$
27,954   Six
    months ended June 30, 2008 comparison to six months ended
    June 30, 2007
  Revenue.
     37




---



##### Table of Contents



Operating Expense.
  year-to-date
      Operating Income.
  Interest Expense.
  Debt Retirement Expense.
  Income Tax Expense.
  Discontinued Operations, Net of Taxes.
  Net Income.
 38




---



##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
        Our
    Indebtedness
           39




---



##### Table of Contents



Net
    Cash, Capital Expenditures and Cash Flow
        CHANGES
    IN ACCOUNTING STANDARDS
   40




---



##### Table of Contents



instrument-by-instrument
        CRITICAL
    ACCOUNTING POLICIES
   41




---



##### Table of Contents



Form 10-K
  Form 10-Q Regulation S-X.
  QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    Fuel
    Price Risk
    Interest
    Rate and Other Risks
    Foreign
    Currency Exchange Rate Risks
   42




---



##### Table of Contents



ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    ITEM 4.
    CONTROLS
    AND PROCEDURES  Evaluation of Disclosure Controls and
    Procedures. Rule 13a-15(b)).
  Changes in Internal Control over Financial
    Reporting. Rules 13a-15(f) 15d-15(f)
 43




---



##### Table of Contents



PART II 
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS.    Environmental
    and Other Litigation.
    Collision Incident, Mile Marker 97 of the Mississippi
    River. No. 08-4012, No. 08-4007, No. 08-4025, No. 08-4031, No. 08-4058, No. 08-4059, in rem in
    rem No. 08-4055, in rem in rem No. 08-4060,
   44




---



##### Table of Contents



Barge Cleaning Facilities, Port Arthur,
    Texas.
  Bulk Terminals Site, Louisville,
    Kentucky.
  SEC
    Inquiry
  e-mail Form 8-K
 45




---



##### Table of Contents



ITEM 1A.
    RISK
    FACTORS    RISKS
    RELATED TO OUR INDUSTRY
  Freight
    transportation rates for the Inland Waterways fluctuate from
    time to time and may decrease.
  season-to-season year-to-year.
  quarter-to-quarter year-to-year. year-to-year
  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.
   46




---



##### Table of Contents



High steel prices may lead to a reduction in demand for
    new barge construction
    Higher
    fuel prices, if not recouped from our customers, could
    dramatically increase operating expenses and adversely affect
    profitability.
  quarter-over-quarter year-over-year
  Our
    operating margins are impacted by certain low margin
    legacy contracts and by spot rate market volatility
    for grain volume and pricing.
    quarter-to-quarter year-to-year.
 47




---



##### Table of Contents



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.
   48




---



##### Table of Contents



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.
  and/or
    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.
    U.S.-citizen
 49




---



##### Table of Contents



RISKS
    RELATED TO OUR BUSINESS
  We are
    named as a defendant in class action lawsuits and we are in
    receipt of other claims and we cannot predict the outcome of
    such litigation which may result in the imposition of
    significant liability to the Company.
            We are
    facing significant litigation which may divert management
    attention and resources from our business.
    Our
    insurance may not be adequate to cover our losses.
      Our
    aging fleet of dry cargo barges may lead to increased costs and
    disruptions in our operations.
   50




---



##### Table of Contents



We may
    not ultimately be able to drive efficiency to the level to
    achieve our current forecast of tonnage without investing
    additional capital or incurring additional costs.
    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.
      Our
    substantial borrowings are currently all tied to floating
    interest rates which may expose us to higher interest payments
    should LIBOR or the prime rate increase
    substantially.
    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.
    
    we were to lose one or more of our large customers, 51




---



##### Table of Contents




    one or more of our large customers were to significantly reduce
    the amount of barging services they purchased from us and we
    were unable to redeploy that equipment on similar terms,
    one or more of our key customers failed to pay or perform,    A
    major accident or casualty loss at any of our facilities could
    significantly reduce production.
    Our
    transportation division 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 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.
   52




---



##### Table of Contents



200-mile
      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.
   53




---



##### Table of Contents



ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS    Maximum Number (orTotal Number of


Approximate DollarShares (or Units)


Value) of SharesPurchased as Part


(or Units) that MayTotal Number of


Average Price Paid


of Publicly


Yet Be PurchasedShares (or Units)


per Share (or Unit)


Announced Plans or


Under the Plans orPeriod

Purchased(1)


(2)


Programs


ProgramsApril 1 to 30, 2008


3,813


$
16.58



N/A



N/AMay 1 to 31, 2008


19,371


$
15.48



N/A



N/AJune 1 to 30, 2008


143


$
10.93



N/A



N/ATotal


23,327


$
15.63



N/A



N/A     (1)
    
    Shares redeemed to satisfy employee tax requirements.(2)
    
    Reflects the weighted average fair market value per share
    redeemed.  ITEM 3.
    DEFAULTS
    UPON SENIOR SECURITIES    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    
    Elected seven directors to serve until the next Annual Meeting
    of Shareholders and until their respective successors are duly
    elected and qualified.
    Approved the Omnibus Incentive Plan, which provides the company
    with the ability to grant a wide variety of equity-based awards
    and cash awards, both of which can be designed to be performance
    awards that qualify as performance-based compensation pursuant
    to Section 162(m) of the Internal Revenue Code.
    Ratified the appointment of Ernst and Young LLP as our
    independent registered public accounting firm for the fiscal
    year ended December 31, 2008.  For

Against

AbstainClayton K. Yeutter


36,241,161



5,630,420



Eugene I. Davis


32,160,467



9,711,114



Michael P. Ryan


41,432,694



438,887



Richard L. Huber


41,221,951



649,630



Nils E. Larsen


41,532,989



338,592



Emmanuel L. Rouvelas


40,158,103



1,713,478



R. Christopher Weber


41,534,168



337,413



BrokerFor

Against

Abstain

Non-VotesApproval of the Companys 2008
    Omnibus Incentive Plan


34,887,783



2,768,598



12,308



4,202,893Ratification of Independent Registered
    Public Accounting Firm


41,778,418



84,245



8,917  54




---



##### Table of Contents



ITEM 5.
    OTHER
    INFORMATION    ITEM 6.
    EXHIBITS.  Exhibit No.

Description10
.1

Amendment No. 5 to Credit Agreement, dated June 26,
    2008, by and among American Commercial Lines LLC, Jeffboat LLC,
    and ACL Transportation Services LLC, and Wells Fargo Bank,
    National Association as administrative agent, Bank of America,
    N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents,
    Fortis Capital Corp. and LaSalle Bank National Association as
    co-documentation agents, and Branch Banking and
    Trust Company, Fifth Third Bank, National City Bank, PNC
    Bank National Association, SunTrust Bank, U.S. Bank National
    Association, and Wachovia Bank, N.A. as syndicate members
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on June 26, 2008).10
.2

2008 Omnibus Incentive Plan (Incorporated by reference to the
    Companys Current Report on
    Form 8-K,
    filed on May 19, 2008).10
.3

Form of Non-Qualified Stock Option Agreement for Executives
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on May 19, 2008).10
.4

Form of Non-Qualified Stock Option Agreement for Non-Executives
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on May 19, 2008).10
.5

Form of Incentive Stock Option Agreement for Executives
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on May 19, 2008).10
.6

Form of Incentive Stock Option Agreement for Non-Executives
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on May 19, 2008).10
.7

Form of Restricted Stock Agreement (Incorporated by reference to
    the Companys Current Report on
    Form 8-K,
    filed on May 19, 2008).10
.8

Form of Restricted Stock Unit Agreement (Incorporated by
    reference to the Companys Current Report on
    Form 8-K,
    filed on May 19, 2008).10
.9

Letter Agreement, dated as of May 14, 2008, by and between
    American Commercial Lines LLC and William N. Whitlock.10
.10

Employment Letter Agreement, dated as of April 25, 2008, by
    and between American Commercial Lines LLC and Dawn Landry.10
.11

Letter Agreement, dated as of April 7, 2008, by and between
    American Commercial Lines Inc. and Jerry R. Linzey.10
.12

2008 Executive Annual Incentive Plan (Incorporated by reference
    to the Companys Current Report on
    Form 8-K,
    filed on April 2, 2008).10
.13

Form of Indemnification Agreement entered into between American
    Commercial Lines Inc. and each member of the Board of Directors
    dated February 4, 2008, except as to Mr. Ryan dated
    July 2, 2008.31
.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 Thomas R. Pilholski, Senior Vice President and
    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 Thomas R. Pilholski, Senior Vice President and
    Chief Financial Officer, pursuant to 18 U.S.C.
    Section 1350.  55




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##### Table of Contents



SIGNATURES      By:
    /s/  Michael
    P. Ryan     By:
    /s/  Thomas
    R. Pilholski       56




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##### Table of Contents



INDEX TO
    EXHIBITS
  Exhibit No.

Description10
.1

Amendment No. 5 to Credit Agreement, dated June 26,
    2008, by and among American Commercial Lines LLC, Jeffboat LLC,
    and ACL Transportation Services LLC, and Wells Fargo Bank,
    National Association as administrative agent, Bank of America,
    N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents,
    Fortis Capital Corp. and LaSalle Bank National Association as
    co-documentation agents, and Branch Banking and
    Trust Company, Fifth Third Bank, National City Bank, PNC
    Bank National Association, SunTrust Bank, U.S. Bank National
    Association, and Wachovia Bank, N.A. as syndicate members
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on June 26, 2008).10
.2

2008 Omnibus Incentive Plan (Incorporated by reference to the
    Companys Current Report on
    Form 8-K,
    filed on May 19, 2008).10
.3

Form of Non-Qualified Stock Option Agreement for Executives
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on May 19, 2008).10
.4

Form of Non-Qualified Stock Option Agreement for Non-Executives
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on May 19, 2008).10
.5

Form of Incentive Stock Option Agreement for Executives
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on May 19, 2008).10
.6

Form of Incentive Stock Option Agreement for Non-Executives
    (Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed on May 19, 2008).10
.7

Form of Restricted Stock Agreement (Incorporated by reference to
    the Companys Current Report on
    Form 8-K,
    filed on May 19, 2008).10
.8

Form of Restricted Stock Unit Agreement (Incorporated by
    reference to the Companys Current Report on
    Form 8-K,
    filed on May 19, 2008).10
.9*±

Letter Agreement, dated as of May 14, 2008, by and between
    American Commercial Lines LLC and William N. Whitlock.10
.10*±

Employment Letter Agreement, dated as of April 25, 2008, by
    and between American Commercial Lines LLC and Dawn Landry.10
.11*±

Letter Agreement, dated as of April 7, 2008, by and between
    American Commercial Lines Inc. and Jerry R. Linzey.10
.12

2008 Executive Annual Incentive Plan (Incorporated by reference
    to the Companys Current Report on
    Form 8-K,
    filed on April 2, 2008).10
.13*±

Form of Indemnification Agreement entered into between American
    Commercial Lines Inc. and each member of the Board of Directors.
    dated February 4, 2008, except as to Mr. Ryan dated
    July 2, 2008.31
.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 Thomas R. Pilholski, Senior Vice President and
    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 Thomas R. Pilholski, Senior Vice President and
    Chief Financial Officer, pursuant to 18 U.S.C.
    Section 1350.     *
    
    Filed herein±
    
    Management contract or compensatory plan or arrangement