##### Table of Contents



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

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    March 31, 2007oro

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

75-3177794(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)1701 East Market Street
    Jeffersonville, Indiana(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
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ
  þ o




---



##### 



AMERICAN
    COMMERCIAL LINES INC.
    QUARTERLY REPORT ON
    FORM 10-Q
    FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007
  
  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


15Item 3:


Quantitative and
    Qualitative Disclosures About Market Risk


30Item 4:


Controls and
    Procedures


31PART II
    OTHER INFORMATIONItem 1:


Legal
    Proceedings


31Item 1A:


Risk
    Factors


32Item 2:


Unregistered
    Sales of Securities and Use of Proceeds


38Item 3:


Defaults on
    Senior Securities


38Item 4:


Submission of
    Matters to a Vote of Security Holders


38Item 6:


Exhibits


39Signatures


40Certification by CEOCertification by CFOCertification by CEOCertification by CFOCertification 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  AMERICAN
    COMMERCIAL LINES INC.
  CONDENSED
    CONSOLIDATED INCOME STATEMENTS
  Quarter Ended March 31,2007


2006(Unaudited)(In thousands, except shares and per share amounts)RevenuesTransportation

$
176,129


$
171,747Manufacturing


52,115



25,728Revenues


228,244



197,475Cost of SalesTransportation


142,229



134,982Manufacturing


49,213



22,040Cost of Sales


191,442



157,022Gross Profit


36,802



40,453Selling, General and
    Administrative Expenses


16,431



16,079Operating Income


20,371



24,374Other Expense
    (Income)Interest Expense


3,181



4,776Debt Retirement Expenses


21,749



Other, Net


(2,855
)


(1,242
)Other Expenses


22,075



3,534(Loss) Income from Continuing
    Operations Before Income Taxes


(1,704
)


20,840Income Taxes
    (Benefit)


(638
)


8,042(Loss) Income from Continuing
    Operations


(1,066
)


12,798Discontinued Operations, Net of
    Income Taxes


(46
)


(1,650
)Net (Loss) Income

$
(1,112
)

$
11,148Basic (Loss) Earnings Per
    Common Share:(Loss) income from continuing
    operations

$
(0.02
)

$
0.20(Loss) income from discontinued
    operations, net of tax






(0.02
)Basic (Loss) Earnings Per
    Common Share

$
(0.02
)

$
0.18(Loss) Earnings Per Common
    Share  Assuming Dilution:(Loss) income from continuing
    operations

$
(0.02
)

$
0.20(Loss) income from discontinued
    operations, net of tax






(0.02
)(Loss) Earnings Per Common
    Share  Assuming Dilution

$
(0.02
)

$
0.18Weighted Average
    Shares OutstandingBasic


61,348,811



60,469,788Diluted


61,348,811



62,503,196    3




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
   March 31,


December 31,2007


2006(Unaudited)(In thousands, except shares and per share amounts)ASSETSCurrent AssetsCash and Cash Equivalents

$
3,063


$
5,113Accounts Receivable, Net


102,009



102,228Inventory


74,034



61,504Deferred Tax Asset


18,085



2,355Assets Held for Sale


989



406Other Current Assets


30,613



25,579Total Current Assets


228,793



197,185Properties, Net


460,141



455,710Investment in Equity
    Investees


3,634



3,527Other Assets


13,484



14,581Total Assets

$
706,052


$
671,003LIABILITIESCurrent LiabilitiesAccounts Payable

$
38,278


$
53,607Accrued Payroll and Fringe Benefits


13,329



28,267Deferred Revenue


17,995



16,803Accrued Claims and Insurance
    Premiums


17,074



15,754Accrued Interest


1,049



4,466Customer Deposits


17,025



9,145Other Liabilities


26,064



24,892Total Current Liabilities


130,814



152,934Long Term Debt


164,800



119,500Pension Liability


16,601



16,026Deferred Tax
    Liability


19,001



14,014Other Long Term
    Liabilities


10,043



9,876Total Liabilities


341,259



312,350STOCKHOLDERS
    EQUITYCommon stock: authorized
    250,000,000 shares at $.01 par value; 62,464,846 and
    61,883,556 shares issued and outstanding as of
    March 31, 2007 and December 31, 2006, respectively


625



619Treasury Stock: 334,994 and
    172,320 shares at March 31, 2007 and December 31,
    2006, respectively


(8,959
)


(3,207
)Other Capital


272,407



259,409Retained Earnings


102,953



104,065Accumulated Other Comprehensive
    Loss


(2,233
)


(2,233
)Total Stockholders Equity


364,793



358,653Total Liabilities and
    Stockholders Equity

$
706,052


$
671,003    4




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  CONDENSED
    CONSOLIDATED STATEMENT OF CHANGE IN CASH FLOWS
  Quarter Ended March 31,2007


2006(Unaudited)(In thousands)OPERATING ACTIVITIESNet (Loss) Income

$
(1,112
)

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


12,211



12,082Debt Retirement Expenses


21,749



Debt Issuance Cost Amortization


156



278Deferred Taxes


4,986



1,630(Gain) Loss on Property
    Dispositions


(1,625
)


58Share-Based Compensation


1,427



1,261Other Operating Activities


(25
)


534Changes in Operating Assets and
    Liabilities, net of McKinney acquisition:Accounts Receivable


218



4,614Inventory


(11,359
)


(3,486
)Accrued Interest


(3,417
)


(3,057
)Other Current Assets


(4,326
)


(2,922
)Accounts Payable


(6,068
)


(10,508
)Other Current Liabilities


(18,842
)


4,614Net Cash (Used in) Provided by
    Operating Activities before Reorganization Items


(6,027
)


16,246Reorganization Items Paid


(9
)


(309
)Net Cash (Used in) Provided by
    Operating Activities


(6,036
)


15,937INVESTING ACTIVITIESProperty Additions


(6,630
)


(24,875
)McKinney Asset Acquisition


(15,486
)


Proceeds from Property Dispositions


3,273



153Other Investing Activities


(645
)


(222
)Net Cash Used in Investing
    Activities


(19,488
)


(24,944
)FINANCING ACTIVITIESAsset Based Revolver Borrowings


164,800



15,7002015 Senior Note Repayments


(119,500
)


Tender Premium Paid


(18,390
)


Outstanding Checks


(9,261
)


(9,545
)Debt Costs






(13
)Tax Benefit of Share Based
    Compensation


9,746



2,423Exercise of Stock Options


1,831



Acquisition of Treasury Stock


(5,752
)


(2,659
)Other Financing Activities






(5
)Net Cash Provided by Financing
    Activities


23,474



5,901Net Decrease in Cash and Cash
    Equivalents


(2,050
)


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


5,113



13,959Cash and Cash Equivalents at End
    of Period

$
3,063


$
10,853    5




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  CONDENSED
    CONSOLIDATED STATEMENT OF STOCKHOLDERS
    EQUITY
 (Unaudited)
  AccumulatedOtherCommon Stock


Treasury


Other


Retained


ComprehensiveShares


Amount


Stock


Capital


Earnings


(Loss)


Total(In thousands)Balance at December 31, 2006


61,711


$
619


$
(3,207
)

$
259,409


$
104,065


$
(2,233
)

$
358,653Amortization of Restricted Stock,
    Stock Options, Performance Shares and Restricted Stock Units














1,427











1,427Excess Tax Benefit of Share-based
    compensation














9,746











9,746Exercise of Stock Options


440



5







1,826











1,831Issuance of Restricted Stock Units
    and Performances Shares


141



1







(1
)










Acquisition of Treasury Stock


(162
)






(5,752
)














(5,752
)Net Loss


















(1,112
)






(1,112
)Balance at March 31, 2007


62,130


$
625


$
(8,959
)

$
272,407


$
102,953


$
(2,233
)

$
364,793    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        Form 10-Q Regulation S-X.
    Accounting for Uncertainty in Income
    Taxes  an interpretation of FASB Statement
    No. 109
 7




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Value Measurements
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities instrument-by-instrument
  Form 10-K
    Note 2.
    Earnings
    Per Share  two-for-one
 8




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2007


2006Weighted average common shares
    outstanding (used to calculate basic EPS)


61,349



60,470Dilutive effect of share-based
    compensation(1)






2,033Fully diluted shares


61,349



62,503Shares used to compute fully
    diluted EPS


61,349



62,503     (1)
    
    Due to the loss in 2007 the 1,723 potentially dilutive
    securities would be anti-dilutive and are, therefore, excluded
    in that period.  Note 3.
    Debt  March 31,


December 31,2007


2006Asset based revolver

$
164,800


$
2015 Senior Notes






119,500Long term debt

$
164,800


$
119,500      9




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 4.
    Inventory    March 31,


December 31,2007


2006Raw Materials

$
18,999


$
19,818Work in Process


33,362



22,001Parts and Supplies


21,673



19,685$
74,034


$
61,504   Note 5.
    Income
    Taxes        Note 6.
    Employee
    Benefit Plans    Quarter Ended March 31,2007


2006Pension Components:Service cost

$
1,242


$
1,251Interest cost


2,251



2,143Expected return on plan assets


(2,900
)


(2,739
)Amortization of unrecognized losses






40Net periodic benefit cost

$
593


$
695Post-retirement
    Components:Service cost

$
49


$
80Interest cost


142



161Amortization of net gain


(5
)


Net periodic benefit cost

$
186


$
241   Note 7.
    Business
    Segments   10




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Form 10-K
    Statement
    of Operating Income by Reportable Segment
  Reportable Segments


IntersegmentTransportation


Manufacturing


Elimination


TotalQuarter ended March 31,
    2007Total revenue

$
176,250


$
52,680


$
(686
)

$
228,244Intersegment revenues


121



565



(686
)


Revenue from external customers


176,129



52,115







228,244Operating expenseMaterials, supplies and other


61,783











61,783Rent


5,973











5,973Labor and fringe benefits


25,097











25,097Fuel


34,019











34,019Depreciation and amortization


11,631











11,631Taxes, other than income taxes


3,726











3,726Cost of goods sold






49,213







49,213Total cost of sales


142,229



49,213







191,442Selling, general &
    administrative


15,534



897







16,431Total operating expenses


157,763



50,110







207,873Operating income

$
18,366


$
2,005


$



$
20,371 11




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##### Table of Contents



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


IntersegmentTransportation


Manufacturing


Elimination


TotalQuarter ended March 31,
    2006Total revenue

$
171,898


$
50,519


$
(24,942
)

$
197,475Intersegment revenues


151



24,791



(24,942
)


Revenue from external customers


171,747



25,728







197,475Operating expenseMaterials, supplies and other


55,614











55,614Rent


5,219











5,219Labor and fringe benefits


20,965











20,965Fuel


37,594











37,594Depreciation and amortization


11,111











11,111Taxes, other than income taxes


4,479











4,479Cost of goods sold






22,040







22,040Total cost of sales


134,982



22,040







157,022Selling, general &
    administrative


14,762



1,317







16,079Total operating expenses


149,744



23,357







173,101Operating income

$
22,003


$
2,371


$



$
24,374   Note 8.
    Contingencies          Note 9.
    Share-based
    Compensation   12




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 10.
    Acquisition
    and Dispostions    Current Assets

$
959Properties  Net


12,512Goodwill


2,015Purchase Price

$
15,486     Note 11.
    Discontinued
    Operations      Quarter Ended March 31,2007


2006Revenue

$



$
884Cost of Sales


4



3,913Selling, General and Administrative


26



243Other Expense (Income)


44



(465
)Loss from Discontinued Operations
    Before Income Tax


(74
)


(2,807
)Income Tax Benefit


(28
)


(1,157
)Loss from Discontinued Operations

$
(46
)

$
(1,650
)  13




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 12.
    Subsequent
    Events     14




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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 and
    will be and similar words or phrases, or the
    negative thereof, unless the context requires otherwise, are
    intended to identify forward-looking statements. These
    forward-looking statements are based on managements
    present expectations and beliefs about future events. As with
    any projection or forecast, these statements are inherently
    susceptible to uncertainty and changes in circumstances. The
    Company is under no obligation to, and expressly disclaims any
    obligation to, update or alter its forward- looking statements
    whether as a result of such changes, new information, subsequent
    events or otherwise.
  See the risk factors included in Item 1A of this report
    for a detailed discussion of important factors that could cause
    actual results to differ materially from those reflected in such
    forward-looking statements. The potential for actual results to
    differ materially from such forward-looking statements should be
    considered in evaluating our outlook.
  INTRODUCTION
    Overview.
  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
   15




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##### Table of Contents



Trac
  The
    Industry
  Transportation Industry:
  TOP 5
    CARRIERS BY FLEET SIZE
    (as of December 31, 2006)
  % of


AverageUnits


Barges


Age (Yrs)Dry Cargo BargesIngram Barge Company


3,633



20.3
%


16.4American Commercial
    Lines


2,639



14.8
%


20.4AEP/MEMCO Barge Line, Inc.


2,628



14.7
%


10.9American River Transportation
    Company


2,061



11.5
%


25.7Cargo Carriers


958



5.4
%


14.8Top 5 Dry Carriers


11,919



66.6
%


17.6Total Industry


17,885



100.0
%


16.2Liquid Cargo BargesKirby Corporation


912



32.5
%


24.1American Commercial
    Lines


371



13.2
%


22.6Marathon Ashland Petroleum LLC


180



6.4
%


19.1Canal Barge Company, Inc.


170



6.1
%


12.3Ingram Barge Company


165



5.9
%


28.5Top 5 Liquid Carriers


1,798



64.0
%


22.6Total Industry


2,809



100.0
%


21.8    Source: Informa and Company 16




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##### Table of Contents



ton-miles,
  
 Source: U.S. Army Corps of
    Engineers Waterborne Commerce Statistics Center
 17




---



##### Table of Contents



The Manufacturing Industry:
  Consolidated
    Financial Overview
      ton-mile
    Transportation
     18




---



##### Table of Contents



ton-miles, ton-miles
      ton-miles
    Key
    operating statistics
  Quarter Ended March 31,


% Change to2007


2006


2006Ton-miles
    (000s) and rates per mile:Total Dry


8,523,012



9,136,474



(6.7
)%Ton-miles
    per average dry affreightment barge


3,303



3,281



0.7
%Total Liquid


777,355



986,540



(21.2
)%Ton-miles
    per average liquid affreightment barge


3,052



3,359



(9.1
)%Total affreightment
    ton-miles


9,300,367



10,123,014



(8.1
)%Total
    ton-miles
    non-affreightment


928,540



675,797



37.4
%Total
    ton-miles


10,228,907



10,798,811



(5.3
)%Ton-miles
    per average affreightment barge


3,280



3,289



(0.3
)%Rates per ton mile/Revenues per
    average barge:Decrease in dry rate per ton-mile










(0.5
)%Increase in fuel neutral dry rate
    per ton-mile










1.8
%Increase in liquid rate per
    ton-mile










11.5
%Increase in fuel neutral liquid
    rate per ton-mile










16.2
%Overall rate per ton-mile

$
13.92


$
13.90



0.1
%Overall fuel neutral rate per
    ton-mile

$
14.28


$
13.90



2.7
%Revenue per average barge
    operated

$
59,644


$
54,111



10.2
%Fuel Price and Volume
    Data:Fuel Price

$
1.77


$
1.85



(4.3
)%Fuel Gallons


19,265



20,354



(5.4
)%Revenue data (in
    thousands):Affreigtment revenue

$
129,480


$
140,757



(8.0
)%Towing


12,640



9,981



26.6
%Charter and day rate


13,085



8,109



61.4
%Demurrage


12,324



8,829



39.6
%Other


8,600



4,071



111.3
%Total non-affreightment


46,649



30,990



50.5
%Total transportation segment
    revenue

$
176,129


$
171,747



2.6
%  19




---



##### Table of Contents



Barge
    Fleet Changes
  Barges  Current Quarter

Dry


Tankers(1)


TotalBarges operated as of the end of
    2006


2,639



371



3,010Retired


(113
)


2



(111
)New builds










Change in number of barges leased


(3
)






(3
)Barges operated as of the end of
    the 1st qtr of 2007


2,523



373



2,896    (1)
    Two tank barges were returned to active service in the quarter.    Owned
    Boat Counts and Average Age by Horsepower Class
  AverageHorsepower Class

Number


Age2,000 or less


63



31.0Less than 4,300


19



31.8Less than 6,200


43



32.37,000 or over


15



29.7Total/overall age


140



31.4      20




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##### Table of Contents



ton-miles
        Manufacturing:
  Manufacturing
    segment units produced for external sales or internal
    use
  Quarter Ended March 31,2007


2006External sales:Liquid tank barges:Ocean tank barges






Liquid tank barges


7



2Dry cargo barges


82



52Total external units sold


89



54Internal sales:Liquid tank barges:Liquid tank barges






15Dry cargo barges






11Total units into production






26Total units produced


89



80    21




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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 March 31,2007


2006(Unaudited)(Dollars in thousands)Net (Loss) Income from Continuing
    Operations

$
(1,066
)

$
12,798Discontinued Operations, Net of
    Income Taxes


(46
)


(1,650
)Consolidated Net (Loss)
    Income

$
(1,112
)

$
11,148Adjustments from Continuing
    Operations:Interest Income


(24
)


(14
)Interest Expense


3,181



4,776Debt Retirement Expenses


21,749



Depreciation and Amortization


12,211



11,550Taxes


(638
)


8,042Adjustments from Discontinued
    Operations:Interest Income


(54
)


(135
)Depreciation and Amortization






532Taxes


(28
)


(1,157
)EBITDA from Continuing
    Operations


35,413



37,152EBITDA from Discontinued
    Operations


(128
)


(2,410
)Consolidated EBITDA

$
35,285


$
34,742EBITDA from Continuing
    Operations by Segment:Transportation Net (Loss)
    Income

$
(3,360
)

$
10,429Interest Income


(24
)


(14
)Interest Expense


3,181



4,776Debt Retirement Expenses


21,749



Depreciation and Amortization


11,631



11,111Taxes


(638
)


8,042Transportation EBITDA

$
32,539


$
34,344Manufacturing Net
    Income

$
2,446


$
7,016Interest Income






Interest Expense






Depreciation and Amortization


580



439Taxes






Total Manufacturing
    EBITDA


3,026



7,455Intersegment Profit


(152
)


(4,647
)External Manufacturing
    EBITDA

$
2,874


$
2,808    22




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##### Table of Contents



Outlook
  Transportation Services:
    
    Accelerating dry cargo barge retirements in 2007 and 2008
    bringing the total number of retirements in 2006 through 2008 to
    over 500 units, or 20% of the Companys previously
    existing dry cargo fleet;
    Significantly reducing or eliminating production of new dry
    cargo barges that were to be built during 2008 for our
    transportation division at our shipyard by increasing the
    efficiency of the existing fleet to compensate for scrapping of
    older barges;
    Increasing the number of 30,000 barrel liquid tank barges
    to be built at our shipyard in 2008 adding approximately 15% of
    our existing liquid tank barge barrel capacity to accommodate
    accelerated growth and focus on our liquids division and
    Establishing a headquarters location in Houston, Texas for our
    liquids division to more directly service the majority of our
    primary liquids customers.       23




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##### Table of Contents



dock-to-dock door-to-door
  2006/2007 2005/2006 2006/2007
  2004/2005
     24




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##### Table of Contents



Manufacturing
    Recent
    Developments
  Manufacturing.
 25




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  OPERATING
    RESULTS BY BUSINESS SEGMENT
 Quarter
    Ended March 31, 2007 as compared with Quarter Ended
    March 31, 2006
  % of ConsolidatedRevenueQuarter Ended March 31,





1st Quarter2007


2006


Variance


2007


2006REVENUETransportation

$
176,129


$
171,747


$
4,382



77.2
%


87.0
%Manufacturing (external and
    internal)


52,680



50,519



2,161



23.1
%


25.6
%Intersegment manufacturing
    elimination


(565
)


(24,791
)


24,226



(0.3
)%


(12.6
)%Consolidated Revenue


228,244



197,475



30,769



100.0
%


100.0
%OPERATING EXPENSETransportation


157,763



149,744



8,019Manufacturing (external and
    internal)


50,523



43,501



7,022Intersegment manufacturing
    elimination


(413
)


(20,144
)


19,731Consolidated Operating Expense


207,873



173,101



34,772



91.1
%


87.7
%OPERATING INCOMETransportation


18,366



22,003



(3,637
)Manufacturing (external and
    internal)


2,157



7,018



(4,861
)Intersegment manufacturing
    elimination


(152
)


(4,647
)


4,495Consolidated Operating Income


20,371



24,374



(4,003
)


8.9
%


12.3
%Interest Expense


3,181



4,776



(1,595
)Debt Retirement Expenses


21,749



Other (Income)


(2,855
)


(1,242
)


(1,613
)Income Before Income Taxes


(1,704
)


20,840



(22,544
)Income Taxes (Benefit)


(638
)


8,042



(8,680
)(Loss) Income from Continuing
    Operations


(1,066
)


12,798



(13,864
)Discontinued Operations, Net of
    Income Taxes


(46
)


(1,650
)


1,604Net (Loss) Income

$
(1,112
)

$
11,148


$
(12,260
)Domestic Barges Operated (average
    of period beginning and end)


2,953



3,174



(221
)Revenue per Domestic Barge
    Operated (Actual)

$
59,644


$
54,111


$
5,533   RESULTS
    OF OPERATIONS
  Quarter
    ended March 31, 2007 comparison to quarter ended
    March 31, 2006
  Revenue.
  ton-mile 20-25 days
 26




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##### Table of Contents



ton-mile ton-mile
    Operating Expense.
      Operating Income.
      Interest Expense.
 27




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##### Table of Contents



Debt Retirement Expenses.
  Income Tax Expense.
  Discontinued Operations, Net of Taxes.
  Net Loss.
  LIQUIDITY
    AND CAPITAL RESOURCES
        Our
    Indebtedness
     28




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##### Table of Contents



Net
    Cash, Capital Expenditures and Cash Flow
        CHANGES
    IN ACCOUNTING STANDARDS
  Accounting for Uncertainty in Income
    Taxes  an interpretation of FASB Statement
    No. 109
  Fair
    Value Measurements
 29




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##### Table of Contents



The
    Fair Value Option for Financial Assets and Financial Liabilities instrument-by-instrument
  CRITICAL
    ACCOUNTING POLICIES
  Form 10-K
  Form 10-Q Regulation S-X.
  QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    Fuel
    Price Risk
   30




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##### Table of Contents



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. Rule 13a-15(b)).
  Changes in Internal Control over Financial
    Reporting. Rules 13a-15(f) 15d-15(f)
 PART II 
    OTHER INFORMATION ITEM
    1.  LEGAL PROCEEDINGS.    Environmental Litigation.
 31




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##### Table of Contents




    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 waste from barge cleaning at the two sites
    in the early 1980s. With regard to the Palmer Barge Line
    Superfund Site, in 2006 the U.S. EPA requested that
    American Commercial Barge Line LLC enter into a consent decree
    for past and future cleanup. We cannot quantify the exposure, if
    any, that the Company may encounter as a result of the notice,
    nor the request for the consent decree.
    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. In November 2006, the State of Louisiana
    notified us that we should proceed with our earlier-submitted
    investigation work plan. We do not know what level of fuel may
    be discovered in this investigation or whether cleanup will be
    required. We have paid approximately $0.02 million in
    consultant fees related to investigation at this site. We have
    reserved $0.05 million for the investigation work plan that
    is scheduled for completion in 2007.  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
  An
    oversupply of barging capacity may lead to reductions in freight
    rates.
   32




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##### Table of Contents



Yields
    from North American and worldwide grain harvests could
    materially affect demand for our barging services
    Diminishing
    demand for new barge construction may lead to a reduction in
    sales prices for new barges.
    Higher
    fuel prices, if not recouped from our customers, could
    dramatically increase operating expenses and adversely affect
    profitability.
    We are
    subject to adverse weather and river conditions.
      Seasonal
    fluctuations in industry demand could adversely affect our
    operating results, cash flow and working capital
    requirements.
   33




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##### Table of Contents



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 domestic or international government
    regulations affecting the domestic or foreign barging
    industries, or changes in these regulations, may cause us to
    incur significant expenses or affect our ability to
    operate.
  and/or
   34




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##### Table of Contents



The
    Jones Act restricts foreign ownership of our stock, and the
    repeal, suspension or substantial amendment of the Jones Act
    could increase competition on the Inland Waterways and have a
    material adverse effect on our business.
    U.S.-citizen
  RISKS
    RELATED TO OUR BUSINESS
  Our
    aging fleet of dry cargo barges may lead to increased costs and
    disruptions in our operations.
    We may
    not be successful in our plans to upgrade our production lines
    in our shipyard and realize increased levels of capacity and
    efficiency.
    Our
    plans for our transportation business capital investment and
    organic growth are predicated on efficiency improvements which
    we expect to achieve through a variety of initiatives including
    reduction in stationary days, better power utilization, and
    improved fleeting, among others. 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.
   35




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##### Table of Contents



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
    indebtedness.
    As
    part of the Companys growth strategy, we may make
    selective acquisitions the integration and consolidation of
    which may disrupt operations and could negatively impact our
    business, including our margins.
    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.
   36




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##### Table of Contents



We
    have experienced significant work stoppages by union employees
    in the past, and future work stoppages may disrupt our services
    and adversely affect our operations.
    The
    loss of key personnel, including highly skilled and licensed
    vessel personnel, could adversely affect our
    business.
    Failure
    to comply with environmental, health and safety regulations
    could result in substantial penalties and changes to our
    operations.
         37




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##### Table of Contents



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.
   ITEM 2.  UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS    Total Number of Shares


Weighted-Redeemed to Satisfy


Average Fair


Total Number of Shares


Maximum Number ofEmployee Tax


Market Value


Purchased as Part of


Shares that May Yet BeWithholding


Per Share


Publicly Announced


Purchased Under thePeriod

Requirements


Redeemed


Plans or Programs


Plans or ProgramsJanuary 2007


88,062


$
34.09



N/A



N/AFebruary 2007


14,302


$
39.02



N/A



N/AMarch 2007


14,071


$
36.05



N/A



N/ATotal


116,435


$
34.93



N/A



N/A   ITEM 3.
    DEFAULTS
    UPON SENIOR SECURITIES    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    ITEM 5.
    OTHER
    INFORMATION   38




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##### Table of Contents



ITEM 6.
    EXHIBITS.  ExhibitNo.

Description4
.1

Second Supplemental Indenture,
    dated as of January 30, 2007 to the Indenture dated
    February 11, 2005, as supplemented, among American
    Commercial Lines LLC, ACL Finance Corp., the guarantors named
    therein and the Wilmington Trust Company, as Trustee
    (Incorporated by reference to Exhibit 4.1 to the Current
    Report of American Commercial Lines Inc. on Form 8-K (File
    No. 000-51562) filed with the Securities and Exchange
    Commission on February 2, 2007).10
.1

2007 Executive Annual Incentive
    Plan (Incorporated by reference to Exhibit 10.1 to the
    Current Report of American Commercial Lines Inc. on
    Form 8-K (File No. 000-51562) filed with the
    Securities and Exchange Commission on January 19, 2007.31
.1

Certification by Mark R. Holden,
    Chief Executive Officer, required by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934.31
.2

Certification by Christopher A.
    Black, Chief Financial Officer, required by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934.32
.1

Certification by Mark R. Holden,
    Chief Executive Officer, pursuant to 18 U.S.C.
    Section 1350.32
.2

Certification by Christopher A.
    Black, Chief Financial Officer, pursuant to 18 U.S.C.
    Section 1350.  39




---



##### Table of Contents



SIGNATURES      By:
    /s/  Mark
    R. Holden     By:
    /s/  Christopher
    A. Black       40




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##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNo.

Description4
.1

Second Supplemental Indenture,
    dated as of January 30, 2007 to the Indenture dated
    February 11, 2005, as supplemented, among American
    Commercial Lines LLC, ACL Finance Corp., the guarantors named
    therein and the Wilmington Trust Company, as Trustee
    (Incorporated by reference to Exhibit 4.1 to the Current
    Report of American Commercial Lines Inc. on
    Form 8-K
    (File
    No. 000-51562)
    filed with the Securities and Exchange Commission on
    February 2, 2007).10
.1

2007 Executive Annual Incentive
    Plan (Incorporated by reference to Exhibit 10.1 to the
    Current Report of American Commercial Lines Inc. on
    Form 8-K
    (File
    No. 000-51562)
    filed with the Securities and Exchange Commission on
    January 19, 2007.31
.1

Certification by Mark R. Holden,
    Chief Executive Officer, required by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934.31
.2

Certification by Christopher A.
    Black, Chief Financial Officer, required by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934.32
.1

Certification by Mark R.
    Holden, Chief Executive Officer, pursuant to 18 U.S.C.
    Section 1350.32
.2

Certification by Christopher A.
    Black, Chief Financial Officer, pursuant to 18 U.S.C.
    Section 1350.  41