##### 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,
    2010oro

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
  Regulation S-T o o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    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, 2010
    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
    Stockholders Equity


6Notes to Condensed Consolidated Financial
    Statements


7Item 2:

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


26Item 3:

Quantitative and Qualitative Disclosures About
    Market Risk


47Item 4:

Controls and Procedures


47PART II OTHER INFORMATIONItem 1:

Legal Proceedings


48Item 1A:

Risk Factors


50Item 2:

Unregistered Sales of Securities and Use of
    Proceeds


60Item 3:

Defaults on Senior Securities


60Item 4:

Submission of Matters to a Vote of Security
    Holders


60Item 6:

Exhibits


60Signatures


61Certification by CEOCertification by CFOCertification by CEOCertification by CFOEX-31.1EX-31.2EX-32.1EX-32.2   2




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS  AMERICAN
    COMMERCIAL LINES INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF OPERATIONS
  Quarter Ended June 30,


Six Months Ended June 30,2010


2009


2010


2009(Unaudited)(In thousands, except shares and per share amounts)RevenuesTransportation and Services

$
152,422


$
147,607


$
289,276


$
305,078Manufacturing


11,879



70,916



23,321



106,150Revenues


164,301



218,523



312,597



411,228Cost of SalesTransportation and Services


135,245



135,319



258,297



275,385Manufacturing


11,462



59,889



21,994



90,325Cost of Sales


146,707



195,208



280,291



365,710Gross Profit


17,594



23,315



32,306



45,518Selling, General and Administrative Expenses


10,565



15,979



22,185



37,292Operating Income


7,029



7,336



10,121



8,226Other Expense (Income)Interest Expense


9,766



11,802



19,619



20,333Other, Net


(107
)


(211
)


(161
)


(487
)Other Expense


9,659



11,591



19,458



19,846Loss from Continuing Operations Before Income Taxes


(2,630
)


(4,255
)


(9,337
)


(11,620
)Income Tax Benefit


(1,267
)


(1,318
)


(4,494
)


(4,209
)Loss from Continuing Operations


(1,363
)


(2,937
)


(4,843
)


(7,411
)Discontinued Operations, Net of Tax


(2
)


(831
)


(2
)


(1,815
)Net Loss

$
(1,365
)

$
(3,768
)

$
(4,845
)

$
(9,226
)Basic Loss per Common Share:Loss from continuing operations

$
(0.11
)

$
(0.23
)

$
(0.38
)

$
(0.58
)Loss from discontinued operations, net of tax






(0.07
)






(0.15
)Basic Loss per Common Share

$
(0.11
)

$
(0.30
)

$
(0.38
)

$
(0.73
)Loss per Common Share  Assuming Dilution:Loss from continuing operations

$
(0.11
)

$
(0.23
)

$
(0.38
)

$
(0.58
)Loss from discontinued operations, net of tax






(0.07
)






(0.15
)Loss per Common Share  Assuming Dilution

$
(0.11
)

$
(0.30
)

$
(0.38
)

$
(0.73
)Weighted Average Shares OutstandingBasic


12,810,811



12,712,985



12,786,314



12,700,403Diluted


12,810,811



12,712,985



12,786,314



12,700,403    3




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
  June 30,


December 31,2010


2009(Unaudited)(In thousands, except shares and per share amounts)ASSETSCurrent AssetsCash and Cash Equivalents

$
1,490


$
1,198Accounts Receivable, Net


64,580



93,295Inventory


57,127



39,070Deferred Tax Asset


3,897



3,791Assets Held for Sale


1,703



3,531Prepaid Expenses and Other Current Assets


35,782



23,879Total Current Assets


164,579



164,764Properties, Net


516,038



521,068Investment in Equity Investees


4,534



4,522Other Assets


30,689



33,536Total Assets

$
715,840


$
723,890LIABILITIESCurrent LiabilitiesAccounts Payable

$
25,996


$
34,163Accrued Payroll and Fringe Benefits


15,563



18,283Deferred Revenue


14,023



13,928Accrued Claims and Insurance Premiums


12,171



16,947Accrued Interest


12,207



13,098Current Portion of Long Term Debt


114



114Customer Deposits


1,000



1,309Other Liabilities


26,647



31,825Total Current Liabilities


107,721



129,667Long Term Debt


350,202



345,419Pension and Post Retirement Liabilities


32,439



31,514Deferred Tax Liability


55,205



40,133Other Long Term Liabilities


6,201



6,567Total Liabilities


551,768



553,300STOCKHOLDERS EQUITYCommon stock; authorized 50,000,000 shares at $.01 par
    value; 16,044,025 and 15,898,596 shares issued and
    outstanding as of June 30, 2010 and December 31, 2009,
    respectively


160



159Treasury Stock 3,210,897 and 3,179,274 shares at
    June 30, 2010 and December 31, 2009, respectively


(314,049
)


(313,328
)Other Capital


300,295



299,486Retained Earnings


179,017



183,862Accumulated Other Comprehensive (Loss) Income


(1,351
)


411Total Stockholders Equity


164,072



170,590Total Liabilities and Stockholders Equity

$
715,840


$
723,890    4




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
 CONDENSED
    CONSOLIDATED STATEMENT OF CASH FLOWS  Six Months Ended June 30,2010


2009(Unaudited)(In thousands)OPERATING ACTIVITIESNet Loss

$
(4,845
)

$
(9,226
)Adjustments to Reconcile Net Loss to Net Cash Provided by
    Operating Activities:Depreciation and Amortization


23,911



27,274Debt Issuance Cost Amortization


2,651



4,720Deferred Taxes


16,438



(4,929
)Gain on Property Dispositions/Impairment of Assets Held for Sale


(3,593
)


(2,312
)Share-Based Compensation


1,623



4,811Other Operating Activities


386



253Changes in Operating Assets and Liabilities:Accounts Receivable


26,414



44,053Inventory


(17,521
)


10,430Other Current Assets


(13,803
)


13,886Accounts Payable


(4,198
)


(16,918
)Accrued Interest


(817
)


2,161Other Current Liabilities


(13,731
)


(16,739
)Net Cash Provided by Operating Activities


12,915



57,464INVESTING ACTIVITIESProperty Additions


(21,909
)


(12,423
)Proceeds from Property Dispositions


7,288



4,161Proceeds from Government Grant


2,302



Other Investing Activities


1,359



(1,655
)Net Cash Used in Investing Activities


(10,960
)


(9,917
)FINANCING ACTIVITIESRevolving Credit Facility Borrowings


4,192



(12,450
)Bank Overdrafts on Operating Accounts


(3,970
)


(10,701
)Debt Issue Costs


(150
)


(21,314
)Tax Expense of Share-Based Compensation


(1,252
)


(1,993
)Exercise of Stock Options


438



Acquisition of Treasury Stock


(721
)


(392
)Other Financing Activities


(200
)


Net Cash Used in Financing Activities


(1,663
)


(46,850
)Net Increase in Cash and Cash Equivalents


292



697Cash and Cash Equivalents at Beginning of Period


1,198



1,217Cash and Cash Equivalents at End of Period

$
1,490


$
1,914    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 (Loss)


Total(Unaudited)(Shares and dollars in thousands)Balance at December 31, 2009


12,719


$
159


$
(313,328
)

$
299,486


$
183,862


$
411


$
170,590Share-based Compensation














1,623











1,623Tax Expense of Share-based Compensation














(1,252
)










(1,252
)Exercise of Stock Options


51











438











438Issuance of Restricted Stock Units and Performances Shares


95



1







(1
)










Acquisition of Treasury Stock


(32
)






(721
)














(721
)Comprehensive Loss:Net Loss


















(4,845
)






(4,845
)Net change in fuel swaps designated as cash flow hedging
    instrument, net of tax






















(1,762
)


(1,762
)Other














1











1Total Comprehensive Loss





$



$



$
1


$
(4,845
)

$
(1,762
)

$
(6,606
)Balance at June 30, 2010


12,833


$
160


$
(314,049
)

$
300,295


$
179,017


$
(1,351
)

$
164,072    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. sub-lease
    No. 2009-01,
 7




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      No. 2010-06,
  Form 10-K
    Note 2.
    Stockholders
    Equity  one-for-four
      June 30,


Dec. 31,2010


2009Minimum pension liability, net of $2,847 tax benefit

$
(4,748
)

$
(4,748
)Minimum post retirement liability, net of $1,745 tax provision


2,909



2,909Gain on fuel hedge, net of tax provision of $425 and $1,791,
    respectively.


488



2,250$
(1,351
)

$
411  8




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 3.
    Earnings
    Per Share      performance-to-date
    Quarter Ended


Six Months EndedJune 30,


June 30,2010


2009


2010


2009Weighted average common shares outstanding (used to calculate
    basic earnings per share)


12,810,811



12,712,985



12,786,314



12,700,403Shares if all dilutive potential common shares outstanding
    during the period were exercised














Shares used to calculate diluted EPS


12,810,811



12,712,985



12,786,314



12,700,403  9




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##### Table of Contents



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


December 31,2010


2009Revolving Credit Facility

$
158,710


$
154,5182017 Senior Notes


200,000



200,000Less Original Issue Discount


(8,508
)


(9,099
)Elliott Bay Note


114



114Total Debt


350,316



345,533Less Current Portion of Long Term Debt


114



114Long Term Debt

$
350,202


$
345,419            10




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##### Table of Contents



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


December 31,2010


2009Raw Materials

$
19,237


$
5,142Work in Process


14,186



12,230Parts and Supplies


23,704



21,698$
57,127


$
39,070   Note 6.
    Income
    Taxes      Note 7.
    Employee
    Benefit Plans    Quarter Ended


Six Months EndedJune 30,


June 30,2010


2009


2010


2009Pension Components:Service cost

$
1,200


$
1,342


$
2,400


$
2,684Interest cost


2,590



2,486



5,180



4,972Expected return on plan assets


(3,130
)


(3,095
)


(6,260
)


(6,190
)Amortization of unrecognized losses


15



14



30



28Net periodic benefit cost

$
675


$
747


$
1,350


$
1,494Post-retirement Components:Service cost

$
5


$
5


$
10


$
10Interest cost


87



104



174



208Amortization of net gain


(270
)


(184
)


(540
)


(368
)Adjustment for prior benefit payment overstatement






27







54Net periodic benefit cost

$
(178
)

$
(48
)

$
(356
)

$
(96
)  11




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##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8.
    Business
    Segments    Form 10-K,
      Reportable Segments


All Other


IntersegmentTransportation


Manufacturing


Segments(1)


Eliminations


TotalQuarter ended June 30, 2010Total revenue

$
150,578


$
19,015


$
2,024


$
(7,316
)

$
164,301Intersegment revenues


180



7,136







(7,316
)


Revenue from external customers


150,398



11,879



2,024







164,301Operating expenseMaterials, supplies and other


52,602















52,602Rent


5,151















5,151Labor and fringe benefits


31,038















31,038Fuel


31,122















31,122Depreciation and amortization


11,000















11,000Taxes, other than income taxes


3,216















3,216Gain on disposition of equipment


278















278Cost of goods sold






11,462



838







12,300Total cost of sales


134,407



11,462



838







146,707Selling, general & administrative


8,834



625



1,106







10,565Total operating expenses


143,241



12,087



1,944







157,272Operating income (loss)

$
7,157


$
(208
)

$
80


$



$
7,029   12




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##### Table of Contents



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


All Other


IntersegmentTransportation


Manufacturing


Segments(1)


Eliminations


TotalQuarter ended June 30, 2009Total revenue

$
145,781


$
78,987


$
1,838


$
(8,083
)

$
218,523Intersegment revenues






8,071



12



(8,083
)


Revenue from external customers


145,781



70,916



1,826







218,523Operating expenseMaterials, supplies and other


54,678















54,678Rent


5,380















5,380Labor and fringe benefits


27,090















27,090Fuel


31,602















31,602Depreciation and amortization


12,419















12,419Taxes, other than income taxes


3,668















3,668Gain on disposition of equipment


(193
)














(193
)Cost of goods sold






59,889



675







60,564Total cost of sales


134,644



59,889



675







195,208Selling, general & administrative


14,354



483



1,142







15,979Total operating expenses


148,998



60,372



1,817







211,187Operating (loss) income

$
(3,217
)

$
10,544


$
9


$



$
7,336   Reportable Segments


All Other


IntersegmentTransportation


Manufacturing


Segments(1)


Eliminations


TotalSix Months ended June 30, 2010Total revenue

$
285,642


$
44,500


$
3,956


$
(21,501
)

$
312,597Intersegment revenues


322



21,179







(21,501
)


Revenue from external customers


285,320



23,321



3,956







312,597Operating expenseMaterials, supplies and other


102,423















102,423Rent


10,389















10,389Labor and fringe benefits


60,077















60,077Fuel


59,009















59,009Depreciation and amortization


22,074















22,074Taxes, other than income taxes


6,334















6,334Gain on disposition of equipment


(3,593
)














(3,593
)Cost of goods sold






21,994



1,584







23,578Total cost of sales


256,713



21,994



1,584







280,291Selling, general & administrative


18,641



1,289



2,255







22,185Total operating expenses


275,354



23,283



3,839







302,476Operating income

$
9,966


$
38


$
117


$



$
10,121   13




---



##### Table of Contents



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


All Other


IntersegmentTransportation


Manufacturing


Segments(1)


Eliminations


TotalSix Months ended June 30, 2009Total revenue

$
301,268


$
115,855


$
3,887


$
(9,782
)

$
411,228Intersegment revenues






9,705



77



(9,782
)


Revenue from external customers


301,268



106,150



3,810







411,228Operating expenseMaterials, supplies and other


111,501















111,501Rent


10,955















10,955Labor and fringe benefits


58,243















58,243Fuel


63,918















63,918Depreciation and amortization


24,554















24,554Taxes, other than income taxes


7,179















7,179Gain on disposition of equipment


(2,297
)














(2,297
)Cost of goods sold






90,325



1,332







91,657Total cost of sales


274,053



90,325



1,332







365,710Selling, general & administrative


33,789



1,155



2,348







37,292Total operating expenses


307,842



91,480



3,680







403,002Operating (loss) income

$
(6,574
)

$
14,670


$
130


$



$
8,226     1)
    
    Financial data for segment below reporting threshold is
    attributable to a segment that provides architectural design
    services that was acquired in 2007.  Note 9.
    Financial
    Instruments and Risk Management    Fair Value ofMeasurements atReporting Date UsingMarkets for IdenticalDescription

6/30/2010

Assets (Level 1)Fuel Price Swaps

$
1,133


$
1,133    14




---



##### Table of Contents



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


DollarsFuel Price Swaps at December 31, 2009


17,928


$
4,7791st Quarter 2009 Fuel Hedge Expense


(5,302
)


(981
)1st Quarter 2009 Changes


3,001



5462nd Quarter 2010 Fuel Hedge Expense


(3,881
)


(814
)2nd Quarter 2010 Changes


3,087



(2,397
)Fuel Price Swaps at June 30, 2010


14,833



1,133   Note 10.
    Contingencies            Note 11.
    Exit
    Activities   15




---



##### Table of Contents



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


AmountHouston rent accrual at March 31, 2009





$
976Initial office closure estimate


1Q 2009



2,130Additional office closure accrual


2Q 2009



175Additional office closure accrual


3Q 2009



350Additional office closure accrual


4Q 2009



1,000Rent payments (April  December 2009)






(522
)Balance at December 31, 2009






4,109Additional office closure accrual


2Q 2010



133Write-off Houston fixed assets and moving expenses


2Q 2010



(2,044
)Rent payments (January  June 2010)






(295
)Balance at June 30, 2010





$
1,903   Note 12.
    Share-Based
    Compensation   16




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13.
    Acquisitions
    and Dispositions      Number ofAmount


BoatsBalance at January 1, 2009

$
4,577



121st Quarter 2009 Sales


(908
)


(2
)2nd Quarter 2009 Returned to Service


(325
)


(1
)3rd Quarter 2009 Additions to Held for Sale


752



103rd Quarter 2009 Returned to Service


(1,874
)


(4
)4th Quarter 2009 Additions to Held for Sale


1,726



24th Quarter 2009 Sales


(417
)


(4
)Balance at December 31, 2009


3,531



131st Quarter 2010 Returned to Service


(693
)


(1
)1st Quarter 2010 Sales


(2,838
)


(12
)2nd Quarter 2010 Additions to Held for Sale


1,703



3Balance at June 30, 2010

$
1,703



3   Note 14.
    Debtor
    Guarantor Financial Statements   17




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Combining
    Statement of Operations for the Quarter Ended June 30,
    2010
  Parent





Subsidiary


Non-





CombinedGuarantor


Issuer


Guarantors


Guarantors


Eliminations


Totals(Unaudited)(In thousands)RevenuesTransportation and Services

$



$



$
150,398


$
2,024


$



$
152,422Manufacturing










11,879











11,879Revenues










162,277



2,024







164,301Cost of SalesTransportation and Services










134,407



838







135,245Manufacturing










11,462











11,462Cost of Sales










145,869



838







146,707Gross Profit










16,408



1,186







17,594Selling, General and Administrative Expenses






104



9,355



1,106







10,565Operating (Loss) Income






(104
)


7,053



80







7,029Other Expense (Income)Interest Expense






6,730



3,036











9,766Other, Net


1,365



(4,202
)


(102
)






2,832



(107
)Other Expense


1,365



2,528



2,934







2,832



9,659(Loss) Income from Continuing Operations Before Income
    Taxes


(1,365
)


(2,632
)


4,119



80



(2,832
)


(2,630
)Income Tax Benefit






(1,267
)














(1,267
)(Loss) Income from Continuing Operations


(1,365
)


(1,365
)


4,119



80



(2,832
)


(1,363
)Discontinued Operations, Net of Tax














(2
)






(2
)Net (Loss) Income

$
(1,365
)

$
(1,365
)

$
4,119


$
78


$
(2,832
)

$
(1,365
)  18




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Combining
    Statement of Operations for the Quarter Ended June 30,
    2009
  Parent





Subsidiary


Non-





CombinedGuarantor


Issuer


Guarantors


Guarantors


Eliminations


Totals(Unaudited)(In thousands)RevenuesTransportation and Services

$



$



$
145,781


$
1,838


$
(12
)

$
147,607Manufacturing










70,916











70,916Revenues










216,697



1,838



(12
)


218,523Cost of SalesTransportation and Services










134,644



687



(12
)


135,319Manufacturing










59,889











59,889Cost of Sales










194,533



687



(12
)


195,208Gross Profit










22,164



1,151







23,315Selling, General and Administrative Expenses






83



14,754



1,142







15,979Operating (Loss) Income






(83
)


7,410



9







7,336Other Expense (Income)Interest Expense










11,802











11,802Other, Net


3,768



5,392



(41
)






(9,330
)


(211
)Other Expense


3,768



5,392



11,761







(9,330
)


11,591(Loss) Income from Continuing Operations Before Income
    Taxes


(3,768
)


(5,475
)


(4,351
)


9



9,330



(4,255
)Income Tax Benefit






(1,318
)














(1,318
)(Loss) Income from Continuing Operations


(3,768
)


(4,157
)


(4,351
)


9



9,330



(2,937
)Discontinued Operations, Net of Tax






389







(1,220
)






(831
)Net Loss

$
(3,768
)

$
(3,768
)

$
(4,351
)

$
(1,211
)

$
9,330


$
(3,768
)  19




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Combining
    Statement of Operations for the Six Months Ended June 30,
    2010
  Parent





Subsidiary


Non-





CombinedGuarantor


Issuer


Guarantors


Guarantors


Eliminations


Totals(Unaudited)(In thousands)RevenuesTransportation and Services

$



$



$
285,320


$
3,956


$



$
289,276Manufacturing










23,321











23,321Revenues










308,641



3,956







312,597Cost of SalesTransportation and Services










256,713



1,584







258,297Manufacturing










21,994











21,994Cost of Sales










278,707



1,584







280,291Gross Profit










29,934



2,372







32,306Selling, General and Administrative Expenses






211



19,719



2,255







22,185Operating (Loss) Income






(211
)


10,215



117







10,121Other Expense (Income)Interest Expense






13,456



6,163











19,619Other, Net


4,845



(4,328
)


(157
)






(521
)


(161
)Other Expense


4,845



9,128



6,006







(521
)


19,458(Loss) Income from Continuing Operations Before Income
    Taxes


(4,845
)


(9,339
)


4,209



117



521



(9,337
)Income Tax Benefit






(4,494
)














(4,494
)(Loss) Income from Continuing Operations


(4,845
)


(4,845
)


4,209



117



521



(4,843
)Discontinued Operations, Net of Tax














(2
)






(2
)Net (Loss) Income

$
(4,845
)

$
(4,845
)

$
4,209


$
115


$
521


$
(4,845
)  20




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Combining
    Statement of Operations for the Six Months Ended June 30,
    2009
  Parent





Subsidiary


Non-





CombinedGuarantor


Issuer


Guarantors


Guarantors


Eliminations


Totals(Unaudited)(In thousands)RevenuesTransportation and Services

$



$



$
301,268


$
3,887


$
(77
)

$
305,078Manufacturing










106,150











106,150Revenues










407,418



3,887



(77
)


411,228Cost of SalesTransportation and Services










274,053



1,409



(77
)


275,385Manufacturing










90,325











90,325Cost of Sales










364,378



1,409



(77
)


365,710Gross Profit










43,040



2,478







45,518Selling, General and Administrative Expenses






162



34,782



2,348







37,292Operating (Loss) Income






(162
)


8,258



130







8,226Other Expense (Income)Interest Expense










20,333











20,333Other, Net


9,226



14,296



(314
)


(1
)


(23,694
)


(487
)Other Expense


9,226



14,296



20,019



(1
)


(23,694
)


19,846(Loss) Income from Continuing Operations Before Income
    Taxes


(9,226
)


(14,458
)


(11,761
)


131



23,694



(11,620
)Income Tax Benefit






(4,230
)






21







(4,209
)(Loss) Income from Continuing Operations


(9,226
)


(10,228
)


(11,761
)


110



23,694



(7,411
)Discontinued Operations, Net of Tax






1,002







(2,817
)






(1,815
)Net Loss

$
(9,226
)

$
(9,226
)

$
(11,761
)

$
(2,707
)

$
23,694


$
(9,226
)  21




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Combining
    Balance Sheet at June 30, 2010
  Parent





Subsidiary


Non-





CombinedGuarantor


Issuer


Guarantors


Guarantors


Eliminations


Totals(Unaudited)(In thousands)ASSETSCurrent AssetsCash and Cash Equivalents

$



$



$
1,213


$
277


$



$
1,490Accounts Receivable, Net


(36,009
)


110,022



(18,586
)


9,153







64,580Inventory










57,127











57,127Deferred Tax Asset






3,897















3,897Assets Held for Sale










1,703











1,703Prepaid Expenses and Other Current Assets






15,228



20,393



161







35,782Total Current Assets


(36,009
)


129,147



61,850



9,591







164,579Properties, Net










515,822



216







516,038Investment in Subsidiaries


200,081



324,115



1,693







(525,889
)


Investment in Equity Investees










4,534











4,534Other Assets






5,176



21,446



4,067







30,689Total Assets

$
164,072


$
458,438


$
605,345


$
13,874


$
(525,889
)

$
715,840LIABILITIESCurrent LiabilitiesAccounts Payable

$



$



$
25,942


$
54


$



$
25,996Accrued Payroll and Fringe Benefits










14,922



641







15,563Deferred Revenue










14,023











14,023Accrued Claims and Insurance Premiums










12,171











12,171Accrued Interest






11,458



749











12,207Current Portion of Long Term Debt














114







114Customer Deposits










1,000











1,000Other Liabilities






202



26,337



108







26,647Total Current Liabilities






11,660



95,144



917







107,721Long Term Debt






191,492



158,710











350,202Pension and Post Retirement Liabilities










32,439











32,439Deferred Tax Liability






55,205















55,205Other Long Term Liabilities










6,189



12







6,201Total Liabilities






258,357



292,482



929







551,768STOCKHOLDERS EQUITYCommon stock


160



















160Treasury Stock


(314,049
)


















(314,049
)Other Capital


300,296



22,416



1,607



25,747



(49,771
)


300,295Retained Earnings


179,016



179,016



313,285



(12,802
)


(479,498
)


179,017Accumulated Other Comprehensive Income


(1,351
)


(1,351
)


(2,029
)






3,380



(1,351
)Total Stockholders Equity


164,072



200,081



312,863



12,945



(525,889
)


164,072Total Liabilities and Stockholders Equity

$
164,072


$
458,438


$
605,345


$
13,874


$
(525,889
)

$
715,840  22




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Combining
    Balance Sheet at December 31, 2009
  Parent





Subsidiary


Non-





CombinedGuarantor


Issuer


Guarantors


Guarantors


Eliminations


Totals(In thousands)ASSETSCurrent AssetsCash and Cash Equivalents

$



$



$
940


$
258


$



$
1,198Accounts Receivable, Net


(37,351
)


118,850



1,932



9,864







93,295Inventory










39,070











39,070Deferred Tax Asset






3,791















3,791Assets Held for Sale










3,531











3,531Prepaid Expenses and Other Current Assets






(1
)


23,673



207







23,879Total Current Assets


(37,351
)


122,640



69,146



10,329







164,764Properties, Net










520,825



243







521,068Investment in Subsidiaries


207,941



322,917



1,694







(532,552
)


Investment in Equity Investees










4,522











4,522Other Assets






5,399



23,971



4,166







33,536Total Assets

$
170,590


$
450,956


$
620,158


$
14,738


$
(532,552
)

$
723,890LIABILITIESCurrent LiabilitiesAccounts Payable

$



$
16


$
33,424


$
723


$



$
34,163Accrued Payroll and Fringe Benefits










17,331



952







18,283Deferred Revenue










13,928











13,928Accrued Claims and Insurance Premiums










16,947











16,947Accrued Interest






12,014



1,084











13,098Current Portion of Long Term Debt














114







114Customer Deposits










1,309











1,309Other Liabilities






(49
)


31,768



106







31,825Total Current Liabilities






11,981



115,791



1,895







129,667Long Term Debt






190,901



154,518











345,419Pension and Post Retirement Liabilities










31,514











31,514Deferred Tax Liability






40,133















40,133Other Long Term Liabilities










6,554



13







6,567Total Liabilities






243,015



308,377



1,908







553,300STOCKHOLDERS EQUITYCommon stock


159



















159Treasury Stock


(313,328
)


















(313,328
)Other Capital


299,486



23,668



1,607



25,747



(51,022
)


299,486Retained Earnings


183,862



183,862



309,074



(12,917
)


(480,019
)


183,862Accumulated Other Comprehensive Income


411



411



1,100







(1,511
)


411Total Stockholders Equity


170,590



207,941



311,781



12,830



(532,552
)


170,590Total Liabilities and Stockholders Equity

$
170,590


$
450,956


$
620,158


$
14,738


$
(532,552
)

$
723,890  23




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Combining
    Statement of Cash Flows for the Six Months Ended June 30,
    2010
  Parent





Subsidiary


Non-





CombinedGuarantor


Issuer


Guarantors


Guarantors


Eliminations


Totals(Unaudited)(In thousands)OPERATING ACTIVITIES:Net (Loss) Income

$
(4,845
)

$
(4,845
)

$
4,209


$
115


$
521


$
(4,845
)Adjustments to Reconcile Net Loss to Net Cash Provided by
    Operating Activities:Depreciation and Amortization










23,743



168







23,911Debt Issuance Cost Amortization






955



1,696











2,651Deferred Taxes






16,438















16,438Gain on Property Dispositions










(3,593
)










(3,593
)Share Based Compensation










1,582



41







1,623Net Income (Loss) of Subsidiaries


4,845



(4,324
)










(521
)


Other Operating Activities










387



(1
)






386Changes in Operating Assets and LiabilitiesAccounts Receivable, Net


283



8,824



16,731



576







26,414Inventory










(17,521
)










(17,521
)Other Current Assets






(15,335
)


1,486



46







(13,803
)Accounts Payable






(16
)


(3,513
)


(669
)






(4,198
)Accrued Interest






(555
)


(335
)


73







(817
)Other Current Liabilities






251



(13,672
)


(310
)






(13,731
)Net Cash Provided by Operating Activities


283



1,393



11,200



39







12,915INVESTING ACTIVITIES:Property Additions










(21,889
)


(20
)






(21,909
)Proceeds from Property Dispositions










7,288











7,288Proceeds from Government Grant










2,302











2,302Other Investing Activities










1,359











1,359Net Cash Used in Investing Activities










(10,940
)


(20
)






(10,960
)FINANCING ACTIVITIES:Revolving Credit Facility Borrowings










4,192











4,192Bank Overdrafts on Operating Accounts










(3,970
)










(3,970
)Debt Issue Costs






(141
)


(9
)










(150
)Tax Expense of Share-Based Compensation






(1,252
)














(1,252
)Exercise of Stock Options


438



















438Acquisition of Treasury Stock


(721
)


















(721
)Other Financing Activities










(200
)










(200
)Net Cash (Used in) Provided by Financing Activities


(283
)


(1,393
)


13











(1,663
)Net Increase in Cash and Cash Equivalents










273



19







292Cash and Cash Equivalents at Beginning of Period










940



258







1,198Cash and Cash Equivalents at End of Period

$



$



$
1,213


$
277


$



$
1,490  24




---



##### Table of Contents



AMERICAN
    COMMERCIAL LINES INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Combining
    Statement of Cash Flows for the Six Months Ended June 30,
    2009
  Parent





Subsidiary


Non-





CombinedGuarantor


Issuer


Guarantors


Guarantors


Eliminations


Totals(Unaudited)(In thousands)OPERATING ACTIVITIES:Net Loss

$
(9,226
)

$
(9,226
)

$
(11,761
)

$
(2,707
)

$
23,694


$
(9,226
)Adjustments to Reconcile Net Income to Net Cash Provided by
    Operating Activities:Depreciation and Amortization










26,305



969







27,274Debt Issuance Cost Amortization










4,720











4,720Deferred Taxes






(4,929
)














(4,929
)Gain on Property Dispositions/ Impairment of Assets Held for Sale










(2,312
)










(2,312
)Share Based Compensation










4,634



177







4,811Net Loss from Subsidiaries


9,226



11,651



2,817







(23,694
)


Other Operating Activities










323



(70
)






253Changes in Operating Assets and LiabilitiesAccounts Receivable, Net


392



970



33,778



8,913







44,053Inventory










10,418



12







10,430Other Current Assets






1,626



12,158



102







13,886Accounts Payable










(12,225
)


(4,693
)






(16,918
)Accrued Interest










2,192



(31
)






2,161Other Current Liabilities






(92
)


(14,066
)


(2,581
)






(16,739
)Net Cash Provided by (Used in) Operating Activities


392







56,981



91







57,464INVESTING ACTIVITIES:Property Additions










(12,341
)


(82
)






(12,423
)Proceeds from Property Dispositions










4,161











4,161Other Investing Activities










(1,655
)










(1,655
)Net Cash Used in Investing Activities










(9,835
)


(82
)






(9,917
)FINANCING ACTIVITIES:Current Revolving Credit Facility Borrowings










(12,450
)










(12,450
)Bank Overdrafts on Operating Accounts










(10,701
)










(10,701
)Debt Amendment Fees










(21,314
)










(21,314
)Tax Expense of Share-Based Compensation










(1,993
)










(1,993
)Acquisition of Treasury Stock


(392
)


















(392
)Net Cash Used in Financing Activities


(392
)






(46,458
)










(46,850
)Net Increase in Cash and Cash Equivalents










688



9







697Cash and Cash Equivalents at Beginning of Period










704



513







1,217Cash and Cash Equivalents at End of Period

$



$



$
1,392


$
522


$



$
1,914  25




---



##### 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. Form 10-K
  Quantitative and Qualitative Disclosures about Market
    Risk. Form 10-K
  OVERVIEW
  Our
    Business
   26




---



##### Table of Contents



The
    Industry
  Transportation Industry:
     27




---



##### Table of Contents



ton-miles,
  
  Source:
  The Manufacturing Industry:
  Consolidated
    Financial Overview
       28




---



##### Table of Contents



quarter-over-quarter
    Segment
    Overview
    Transportation
      ton-miles ton-miles, ton-miles
        ton-miles ton-mile ton-mile ton-mile ton-miles
 29




---



##### Table of Contents



Revenue
    Mix Change ($ in millions) 2Q 2010, 2Q 2009, 2Q 2008
  
         30




---



##### Table of Contents



quarter-over-quarter ton-miles net-of-hedge-impact
    Key
    Operating Statistics
  Three


% Change to


Six


% Change toMonths Ended


Prior Year Quarter


Months Ended


Prior Year YTDJune 30, 2010


Increase (Decrease)


June 30, 2010


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


7,442,635



(12.4
)%


13,751,560



(15.6
)%Total liquid


499,805



15.6
%


983,557



17.8
%Total affreightment
    ton-miles


7,942,440



(11.0
)%


14,735,117



(14.0
)%Total non-affreightment
    ton-miles


674,861



(12.3
)%


1,350,932



(11.1
)%Total
    ton-miles


8,617,301



(11.1
)%


16,086,049



(13.7
)%Average
    ton-miles
    per affreightment barge


3,406



(6.8
)%


6,273



(10.3
)%Rates per ton mile:Dry rate per
    ton-mile






19.4
%






12.7
%Fuel neutral dry rate per
    ton-mile






13.9
%






9.0
%Liquid rate per
    ton-mile






(1.6
)%






(6.2
)%Fuel neutral liquid rate per-ton mile






(9.2
)%






(11.1
)%Overall rate per
    ton-mile

$
13.54



18.9
%

$
13.66



12.9
%Overall fuel neutral rate per
    ton-mile

$
12.85



12.9
%

$
13.17



8.8
%Revenue per average barge operated

$
60,595



6.9
%

$
114,540



(1.1
)%Fuel price and volume data:Fuel price

$
2.22



19.2
%

$
2.15



11.7
%Fuel gallons


14,012



(17.3
)%


27,495



(17.3
)%Revenue data (in thousands):Affreightment revenue

$
107,323



5.6
%

$
200,913



(3.0
)%Towing


9,700



(2.4
)%


18,070



(18.5
)%Charter and day rate


16,079



(1.3
)%


32,321



(1.3
)%Demurrage


7,397



(21.7
)%


17,050



(28.2
)%Other


9,899



16.7
%


16,966



9.9
%Total non-affreightment revenue


43,075



(2.4
)%


84,407



(10.3
)%Total transportation segment revenue

$
150,398



3.2
%

$
285,320



(5.3
)%  31




---



##### Table of Contents



Barge
    Fleet Changes
  Current Quarter

Dry


Tankers


TotalBarges operated as of the end of the 1st qtr of 2010


2,146



346



2,492Retired


(26
)


(9
)


(35
)New builds


17







17Purchased










Change in number of barges leased


(2
)






(2
)Barges operated as of the end of the 2nd qtr of 2010


2,135



337



2,472Six Months Ended June 30, 2010

Dry


Tankers


TotalBarges operated as of the end of 2009


2,149



361



2,510Retired


(57
)


(24
)


(81
)New builds


50







50Purchased










Change in number of barges leased


(7
)






(7
)Barges operated as of the end of the 2nd qtr 2010


2,135



337



2,472     Owned
    Boat Counts and Average Age by Horsepower Class
  Horsepower Class

Number


Average Age1950 or less


36



32.1Less than 4300


21



34.5Less than 6200


43



35.57000 or over


11



31.8Total/overall age


111



33.9       Manufacturing
   32




---



##### Table of Contents



Manufacturing
    Segment Units Produced for External Sales or Internal
    Use
  Quarters Ended June 30,


Six Months Ended June 30,2010


2009


2010


2009External sales:Liquid tank barges


2



19



5



30Ocean tank barges


1



2



2



2Dry cargo barges


9



19



9



19Total external units sold


12



40



16



51Internal sales:Liquid tank barges






4







5Dry cargo barges


17







50



Total units into production


17



4



50



5Total units produced


29



44



66



56  33




---



##### Table of Contents



Consolidated
    Financial Overview  Non-GAAP Financial Measure
    Reconciliation
  NET
    INCOME TO EBITDA RECONCILIATION
  Quarter Ended June 30,


Six Months Ended June 30,2010


2009


2010


2009Net Loss from Continuing Operations

$
(1,363
)

$
(2,937
)

$
(4,843
)

$
(7,411
)Discontinued Operations, Net of Income Taxes


(2
)


(831
)


(2
)


(1,815
)Consolidated Net Loss

$
(1,365
)

$
(3,768
)

$
(4,845
)

$
(9,226
)Adjustments from Continuing Operations:Interest Income






(5
)


(1
)


(11
)Interest Expense


9,766



11,802



19,619



20,333Depreciation and Amortization


11,912



13,389



23,911



26,473Taxes


(1,267
)


(1,318
)


(4,494
)


(4,209
)Adjustments from Discontinued Operations:Interest Income














(1
)Interest Expense






10







20Depreciation and Amortization






345







801Taxes






(219
)






(832
)EBITDA from Continuing Operations


19,048



20,931



34,192



35,175EBITDA from Discontinued Operations


(2
)


(695
)


(2
)


(1,827
)Consolidated EBITDA

$
19,046


$
20,236


$
34,190


$
33,348EBITDA from Continuing Operations by Segment:Transportation Net Loss

$
(1,229
)

$
(13,542
)

$
(4,974
)

$
(22,269
)Interest Income






(5
)


(1
)


(11
)Interest Expense


9,766



11,802



19,619



20,333Depreciation and Amortization


11,000



12,419



22,074



24,554Taxes


(1,267
)


(1,318
)


(4,494
)


(4,230
)Transportation EBITDA

$
18,270


$
9,356


$
32,224


$
18,377Manufacturing Net (Loss) Income

$
(214
)

$
10,596


$
14


$
14,748Depreciation and Amortization


828



885



1,669



1,751Total Manufacturing EBITDA


614



11,481



1,683



16,499Intersegment Profit














External Manufacturing EBITDA

$
614


$
11,481


$
1,683


$
16,499   NET
    INCOME TO EBITDA RECONCILIATION
   34




---



##### Table of Contents



Outlook
    year-over-year
  ton-mile
           35




---



##### Table of Contents



36




---



##### Table of Contents



Transportation:
          ton-miles.
   37




---



##### Table of Contents



ton-mile
  2009-2010
  ton-mile
       38




---



##### Table of Contents



month-to-month
      Manufacturing:
         39




---



##### Table of Contents



OPERATING
    RESULTS by
    BUSINESS SEGMENT
    Quarter Ended June 30, 2010 as compared with Quarter
    Ended
    June 30, 2009
  % of ConsolidatedRevenueQuarter Ended June 30,





2nd Quarter2010


2009


Variance


2010


2009REVENUETransportation and Services

$
152,422


$
147,607


$
4,815



92.8
%


67.6
%Manufacturing (external and internal)


19,015



78,987



(59,972
)


11.6
%


36.1
%Intersegment manufacturing elimination


(7,136
)


(8,071
)


935



(4.4
)%


(3.7
)%Consolidated Revenue


164,301



218,523



(54,222
)


100.0
%


100.0
%OPERATING EXPENSETransportation and Services


145,185



150,815



(5,630
)Manufacturing (external and internal)


19,223



68,443



(49,220
)Intersegment manufacturing elimination


(7,136
)


(8,071
)


935Consolidated Operating Expense


157,272



211,187



(53,915
)


95.7
%


96.6
%OPERATING INCOMETransportation and Services


7,237



(3,208
)


10,445Manufacturing (external and internal)


(208
)


10,544



(10,752
)Intersegment manufacturing elimination










Consolidated Operating Income


7,029



7,336



(307
)


4.3
%


3.4
%Interest Expense


9,766



11,802



(2,036
)Other Expense (Income)


(107
)


(211
)


104Loss Before Income Taxes


(2,630
)


(4,255
)


1,625Income Tax Benefit


(1,267
)


(1,318
)


51Discontinued Operations


(2
)


(831
)


829Net Loss

$
(1,365
)

$
(3,768
)

$
2,403Domestic Barges Operated (average of period beginning and end)


2,482



2,571



(89
)Revenue per Barge Operated (Actual)

$
60,595


$
56,702


$
3,893   RESULTS
    OF OPERATIONS
  Quarter
    ended June 30, 2010 comparison to quarter ended
    June 30, 2009
  Revenue.
       40




---



##### Table of Contents



Operating Expense.
    ton-mile
  Operating Income.
      Interest Expense.
  Income Tax Expense.
  Net Income (Loss).
 41




---



##### Table of Contents



OPERATING
    RESULTS by
    BUSINESS SEGMENT
    Six Months Ended June 30, 2010 as compared with Six Months
    Ended
    June 30, 2009
  % of ConsolidatedRevenueSix Months Ended June 30,





Six Months2010


2009


Variance


2010


2009REVENUETransportation and Services

$
289,276


$
305,078


$
(15,802
)


92.5
%


74.2
%Manufacturing (external and internal)


44,500



115,855



(71,355
)


14.2
%


28.2
%Intersegment manufacturing elimination


(21,179
)


(9,705
)


(11,474
)


(6.7
)%


(2.4
)%Consolidated Revenue


312,597



411,228



(98,631
)


100.0
%


100.0
%OPERATING EXPENSETransportation and Services


279,193



311,522



(32,329
)Manufacturing (external and internal)


44,462



101,185



(56,723
)Intersegment manufacturing elimination


(21,179
)


(9,705
)


(11,474
)Consolidated Operating Expense


302,476



403,002



(100,526
)


96.8
%


98.0
%OPERATING INCOMETransportation and Services


10,083



(6,444
)


16,527Manufacturing (external and internal)


38



14,670



(14,632
)Intersegment manufacturing elimination










Consolidated Operating Income


10,121



8,226



1,895



3.2
%


2.0
%Interest Expense


19,619



20,333



(714
)Other Expense (Income)


(161
)


(487
)


326Loss Before Income Taxes


(9,337
)


(11,620
)


2,283Income Tax Benefit


(4,494
)


(4,209
)


(285
)Discontinued Operations


(2
)


(1,815
)


1,813Net Loss

$
(4,845
)

$
(9,226
)

$
4,381Domestic Barges Operated (average of period beginning and end)


2,491



2,600



(109
)Revenue per Barge Operated (Actual)

$
114,540


$
115,872


$
(1,332
)   RESULTS
    OF OPERATIONS
  Six
    months ended June 30, 2010 comparison to six months ended
    June 30, 2009
  Revenue.
       42




---



##### Table of Contents



Operating Expense.
      Operating Income.
      Interest Expense.
  Income Tax Expense.
  Net Income (Loss).
 43




---



##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
                 44




---



##### Table of Contents



Our
    Indebtedness
      Net
    Cash, Capital Expenditures and Cash Flow
          CHANGES
    IN ACCOUNTING STANDARDS
  No. 2009-01,
 45




---



##### Table of Contents



No. 2010-06,
  Form 10-K
  CRITICAL
    ACCOUNTING POLICIES
  percentage-of-completion
  Form 10-K
  Form 10-Q Regulation S-X.
  QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   46




---



##### Table of Contents



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.
 47




---



##### Table of Contents



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
    and Other Litigation
    Collision Incident, Mile Marker 97 of the Mississippi
    River. No. 08-4012, No. 08-4007, No. 09-cv-04494
   48




---



##### Table of Contents



08-4156,
      Barge Cleaning Facilities, Port Arthur,
    Texas.
 49




---



##### Table of Contents



Bulk Terminals Site, Louisville,
    Kentucky.
  Pulvair Site Group, Tennessee.
  ITEM 1A.
    RISK
    FACTORS    RISKS
    RELATED TO OUR INDUSTRY
  The
    global economic crisis which began in 2008 is likely to continue
    to have detrimental impacts on our business.
    Potential recession impacts
  Credit availability to our customers and
    suppliers
  Market risk
  Freight
    transportation rates for the Inland Waterways fluctuate from
    time to time and may decrease.
  season-to-season year-to-year.
 50




---



##### Table of Contents



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 volume and prices for new barges.
   51




---



##### Table of Contents



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.
  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.
 52




---



##### Table of Contents



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.
   53




---



##### Table of Contents



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 other
    Gulf-coast
    ports 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.
   54




---



##### 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
  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.
    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.
   55




---



##### Table of Contents



Our
    aging fleet of dry cargo barges may lead to increased costs and
    disruptions in our operations.
    We
    have experienced work stoppages by union employees in the past,
    and future work stoppages may disrupt our services and adversely
    affect our operations.
    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 our future cash flow and capital
    resources may not be sufficient for payments of interest and
    principal of our substantial indebtedness.
   56




---



##### Table of Contents



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.
    The
    indenture and the Credit Facility impose significant operating
    and financial restrictions on our Company and our subsidiaries,
    which may prevent us from capitalizing on business
    opportunities.
    
    incur additional indebtedness or enter into sale and leaseback
    obligations;
    pay dividends or certain other distributions on our capital
    stock or repurchase our capital stock other than allowed
    under the indenture;
    make certain investments or other restricted payments;
    place restrictions on the ability of subsidiaries to pay
    dividends or make other payments to us;
    engage in transactions with stockholders or affiliates;
    sell certain assets or merge with or into other companies;
    guarantee indebtedness; and
    create liens.    We
    face the risk of breaching covenants in the 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.
   57




---



##### Table of Contents



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.
    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 affect 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 increase our
    information technology costs and could damage our
    reputation.
    Many
    of our employees are covered by federal maritime laws that may
    subject us to job-related claims.
    The
    loss of key personnel, including highly skilled and licensed
    vessel personnel, could adversely affect our
    business.
   58




---



##### Table of Contents



Failure
    to comply with environmental, health and safety regulations
    could result in substantial penalties and changes to our
    operations.
  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.
   59




---



##### 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

of Publicly

yet be PurchasedShares (or Units)

Paid per Share

Announced Plans

Under the Plans orPeriod

Purchased

(or Unit)

or Programs

ProgramsApril-10


0



0.00


N/A

N/AMay-10


0



0.00


N/A

N/AJune-10


0



0.00


N/A

N/A   ITEM 3.
    DEFAULTS
    UPON SENIOR SECURITIES    ITEM 4.
    REMOVED
    AND RESERVED  ITEM 5.
    OTHER
    INFORMATION    ITEM 6.
    EXHIBITS.  Exhibit no.

Description31
.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.  60




---



##### Table of Contents



SIGNATURES      By:
    /s/  Michael
    P. Ryan     By:
    /s/  Thomas
    R. Pilholski   
   61




---



##### Table of Contents



INDEX TO
    EXHIBITS
  Exhibit No.

Description31
.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