##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2005
 OR
 þ
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 Commission File Number 333-124454-13
 AMERICAN BARGE LINE COMPANY
 (Exact name of registrant as specified in its charter)
 Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
    
    03-0552366
(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)
  Yes
    
    No þ
  Yes
    
    No þ




---



AMERICAN BARGE LINE COMPANY
 QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005
 TABLE OF CONTENTS
 PagePART IFINANCIAL INFORMATIONItem 1: Financial Statements (unaudited)
    
    
    3Condensed Consolidated Statements of Operations
    
    
    3Condensed Consolidated Statements of Financial Position
    
    
    4Condensed Consolidated Statement of Stockholders Equity
    
    
    5Condensed Consolidated Statements of Cash Flows
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3: Quantitative and Qualitative Disclosures About Market Risk
    
    
    34Item 4: Controls and Procedures
    
    
    35PART IIOTHER INFORMATIONItem 1: Legal Proceedings
    
    
    36Item 6: Exhibits
    
    
    38Signatures
    
    
    40CertificationCertificationCertificationCertification




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Reorganized
    
    Predecessor
    
    Reorganized
    
    PredecessorCompany
    
    Company
    
    Company
    
    CompanyQuarter ended
    
    Quarter ended
    
    Six Months Ended
    
    Six Months EndedJune 30,
    
    July 2,
    
    June 30,
    
    July 2,2005
    
    2004
    
    2005
    
    2004(Unaudited)
    
    (Unaudited)(Dollars in Thousands)
    
    (Dollars in Thousands)REVENUE
    
    $
    182,986
    
    
    $
    152,410
    
    
    $
    329,308
    
    
    $
    293,320OPERATING EXPENSEMaterials, Supplies and Other
    
    
    74,067
    
    
    
    70,046
    
    
    
    126,882
    
    
    
    132,584Rent
    
    
    5,408
    
    
    
    5,892
    
    
    
    10,615
    
    
    
    12,212Labor and Fringe Benefits
    
    
    31,845
    
    
    
    28,073
    
    
    
    64,104
    
    
    
    57,952Fuel
    
    
    29,632
    
    
    
    20,264
    
    
    
    56,177
    
    
    
    40,534Depreciation and Amortization
    
    
    12,223
    
    
    
    13,341
    
    
    
    24,502
    
    
    
    27,375Taxes, Other Than Income Taxes
    
    
    4,508
    
    
    
    4,938
    
    
    
    8,925
    
    
    
    10,090Selling, General & Administrative
    
    
    13,519
    
    
    
    9,377
    
    
    
    25,959
    
    
    
    19,474Total Operating Expenses
    
    
    171,202
    
    
    
    151,931
    
    
    
    317,164
    
    
    
    300,221OPERATING INCOME (LOSS)
    
    
    11,784
    
    
    
    479
    
    
    
    12,144
    
    
    
    (6,901
    )OTHER EXPENSE (INCOME)Interest Expense
    
    
    7,392
    
    
    
    9,336
    
    
    
    17,754
    
    
    
    19,448Other, Net
    
    
    (4,408
    )
    
    
    (1,261
    )
    
    
    (5,716
    )
    
    
    (1,727
    )Total Other Expenses
    
    
    2,984
    
    
    
    8,075
    
    
    
    12,038
    
    
    
    17,721INCOME (LOSS) BEFORE INCOME TAXES AND
REORGANIZATION ITEMS
    
    
    8,800
    
    
    
    (7,596
    )
    
    
    106
    
    
    
    (24,622
    )REORGANIZATION ITEMS
    
    
    
    
    
    
    40,770
    
    
    
    
    
    
    
    47,394INCOME (LOSS) BEFORE INCOME TAXES
    
    
    8,800
    
    
    
    (48,366
    )
    
    
    106
    
    
    
    (72,016
    )INCOME TAXES
    
    
    2,767
    
    
    
    190
    
    
    
    401
    
    
    
    314NET INCOME (LOSS)
    
    $
    6,033
    
    
    $
    (48,556
    )
    
    $
    (295
    )
    
    $
    (72,330
    )
  3




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 Reorganized CompanyJune 30,
    
    December 31,2005
    
    2004(Unaudited)(Dollars in Thousands)ASSETSCURRENT ASSETSCash and Cash Equivalents
    
    $
    6,714
    
    
    $
    46,645Cash, Restricted
    
    
    9,452
    
    
    
    9,182Accounts Receivable, Net
    
    
    86,699
    
    
    
    77,997Materials and Supplies
    
    
    62,444
    
    
    
    46,357Deferred Tax Asset
    
    
    5,986
    
    
    
    3,916Other Current Assets
    
    
    17,056
    
    
    
    21,589Total Current Assets
    
    
    188,351
    
    
    
    205,686PROPERTIES-NET
    
    
    416,397
    
    
    
    436,682PENSION ASSET
    
    
    16,171
    
    
    
    15,638INVESTMENT IN EQUITY INVESTEES
    
    
    4,591
    
    
    
    4,396DEFERRED TAX ASSET
    
    
    18,867
    
    
    
    17,791OTHER ASSETS
    
    
    15,216
    
    
    
    5,275Total Assets
    
    $
    659,593
    
    
    $
    685,468LIABILITIESCURRENT LIABILITIESAccounts Payable
    
    $
    23,097
    
    
    $
    25,461Accrued Payroll and Fringe Benefits
    
    
    23,437
    
    
    
    16,745Deferred Revenue
    
    
    15,030
    
    
    
    13,760Accrued Claims and Insurance Premiums
    
    
    10,250
    
    
    
    13,127Accrued Interest
    
    
    8,311
    
    
    
    1,273Current Portion of Long-Term Debt
    
    
    2,887
    
    
    
    2,887Accrued Reorganization Claims and Fees
    
    
    3,100
    
    
    
    15,603Other Liabilities
    
    
    35,277
    
    
    
    24,940Total Current Liabilities
    
    
    121,389
    
    
    
    113,796LONG TERM DEBT
    
    
    371,956
    
    
    
    403,546PENSION LIABILITY
    
    
    23,818
    
    
    
    22,120DEFERRED TAX LIABILITY
    
    
    24,853
    
    
    
    26,787OTHER LONG TERM LIABILITIES
    
    
    15,709
    
    
    
    19,121Total Liabilities
    
    
    557,725
    
    
    
    585,370STOCKHOLDERS EQUITYCommon Stock; authorized 1,000 shares at par value $.01;
10 shares issued and outstanding
    
    
    
    
    
    
    Other Capital
    
    
    106,583
    
    
    
    100,098Unearned Compensation
    
    
    (4,420
    )
    
    
    Retained Deficit
    
    
    (295
    )
    
    
    Total Stockholders Equity
    
    
    101,868
    
    
    
    100,098Total Liabilities and Stockholders Equity
    
    $
    659,593
    
    
    $
    685,468
  4




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
 Common
    
    Other
    
    Unearned
    
    RetainedStock
    
    Capital
    
    Compensation
    
    Deficit
    
    Total(Unaudited)(Dollars in thousands)Reorganized Company:Balance at December 31, 2004
    
    $
    
    
    
    $
    100,098
    
    
    $
    
    
    
    $
    
    
    
    $
    100,098Issuance of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of Parent Company restricted stock and stock options
    
    
    
    
    
    
    6,521
    
    
    
    (6,521
    )
    
    
    
    
    
    
    Amortization of restricted stock and stock options
    
    
    
    
    
    
    
    
    
    
    2,101
    
    
    
    
    
    
    
    2,101Underwriting fees
    
    
    
    
    
    
    (36
    )
    
    
    
    
    
    
    
    
    
    
    (36
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (295
    )
    
    
    (295
    )Balance at June 30, 2005
    
    $
    
    
    
    $
    106,583
    
    
    $
    (4,420
    )
    
    $
    (295
    )
    
    $
    101,868
  5




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Reorganized
    
    PredecessorCompany
    
    CompanySix Months Ended
    
    Six Months EndedJune 30,
    
    July 2,2005
    
    2004(Unaudited)(Dollars in Thousands)OPERATING ACTIVITIESNet Loss
    
    $
    (295
    )
    
    $
    (72,330
    )Adjustments
to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities:Depreciation and Amortization
    
    
    24,502
    
    
    
    27,375Interest Accretion and Debt Issuance Cost Amortization
    
    
    2,335
    
    
    
    4,629Loss on Sale of Argentina Assets
    
    
    
    
    
    
    35,206(Gain) Loss on Property Dispositions
    
    
    (4,432
    )
    
    
    143Other Operating Activities
    
    
    (1,922
    )
    
    
    (1,096
    )Reorganization Items
    
    
    
    
    
    
    12,188Changes in Operating Assets and Liabilities:Accounts Receivable
    
    
    (8,902
    )
    
    
    4,600Materials and Supplies
    
    
    (14,119
    )
    
    
    (5,949
    )Accrued Interest
    
    
    7,157
    
    
    
    2,053Other Current Assets
    
    
    (247
    )
    
    
    859Other Current Liabilities
    
    
    21,331
    
    
    
    2,499Net Cash Provided by Operating Activities
before Reorganization Items
    
    
    25,408
    
    
    
    10,177Reorganization Items Paid
    
    
    (12,503
    )
    
    
    (11,629
    )Net Cash Provided by (Used in) Operating Activities
    
    
    12,905
    
    
    
    (1,452
    )INVESTING ACTIVITIESProperty Additions
    
    
    (11,485
    )
    
    
    (4,261
    )Proceeds from Property Dispositions
    
    
    13,366
    
    
    
    1,039Net Change in Restricted Cash
    
    
    (270
    )
    
    
    (513
    )Investment in Vessel Leasing LLC
    
    
    (2,500
    )
    
    
    Proceeds from Sale of Argentina Assets
    
    
    
    
    
    
    24,100Other Investing Activities
    
    
    (2,036
    )
    
    
    (567
    )Net Cash (Used in) Provided by Investing Activities
    
    
    (2,925
    )
    
    
    19,798FINANCING ACTIVITIESShort-Term Borrowings
    
    
    
    
    
    
    2,354DIP Credit Facility Repayments
    
    
    
    
    
    
    (33,787
    )Long-Term Debt Repaid
    
    
    (402,489
    )
    
    
    (1,443
    )Revolving Credit Facility Borrowings
    
    
    170,710
    
    
    
    2015 Senior Note Borrowings
    
    
    200,000
    
    
    
    Outstanding Checks
    
    
    (4,577
    )
    
    
    (1,588
    )Debt Costs
    
    
    (12,937
    )
    
    
    (150
    )Other Financing Activities
    
    
    (618
    )
    
    
    (639
    )Net Cash Used in Financing Activities
    
    
    (49,911
    )
    
    
    (35,253
    )Net Decrease in Cash and Cash Equivalents
    
    
    (39,931
    )
    
    
    (16,907
    )Cash and Cash Equivalents at Beginning of Period
    
    
    46,645
    
    
    
    35,275Cash and Cash Equivalents at End of Period
    
    $
    6,714
    
    
    $
    18,368
  6




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited) 
(Dollars in Thousands)
 Note 1. Reporting entity
       7




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AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in Thousands)
    Note 2. Acquisition of Vessel Leasing
  Note
3. Recent Developments and Subsequent Events
     Note 4. Debt
 Reorganized CompanyJune 30,
    
    December 31,2005
    
    2004Revolving Credit Facility  Bank of America/UBS Securities
    

    $
    134,500

    
    
    $
    2015 Senior Notes
    
    
    200,000
    
    
    
    Bonds guaranteed by the Maritime Administration
    
    
    30,879
    
    
    
    32,251Maritime Lien Notes
    
    
    9,046
    
    
    
    9,046Tort Lien Notes
    
    
    418
    
    
    
    418Revolving Credit Facility  JPMorgan Chase
    
    
    
    
    
    
    47,839Tranche A Term Loan
    
    
    
    
    
    
    42,531Tranche B Term Loan
    
    
    
    
    
    
    122,448Tranche C Term Loan
    
    
    
    
    
    
    144,077Deferred interest on bank debt
    
    
    
    
    
    
    7,823374,843
    
    
    
    406,433Less current portion of long-term debt
    
    
    2,887
    
    
    
    2,887Long-term debt
    
    $
    371,956
    
    
    $
    403,546
 8




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in Thousands)
         9




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AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in Thousands)
 Note 5. Materials and Supplies
  Reorganized CompanyJune 30,
    
    December 31,2005
    
    2004Raw Materials
    
    $
    7,100
    
    
    $
    5,614Work in Process
    
    
    36,468
    
    
    
    22,284Parts and Supplies
    
    
    18,876
    
    
    
    18,459$
    62,444
    
    
    $
    46,357
 Note 6. Taxes
    10




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in Thousands)
 Note 7. Employee Benefit Plans
  Reorganized
    
    Predecessor
    
    Reorganized
    
    PredecessorCompany
    
    Company
    
    Company
    
    CompanyQuarters Ended
    
    Six Months EndedJune 30,
    
    July 2,
    
    June 30,
    
    July 2,2005
    
    2004
    
    2005
    
    2004Pension
    
    PensionService cost
    
    $
    1,170
    
    
    $
    1,239
    

    
    $
    2,340
    
    
    $
    2,478Interest cost
    

    
    2,024
    
    
    
    1,978
    
    
    
    4,048
    
    
    
    3,956Expected return on plan assets
    
    
    (2,518
    )
    
    
    (2,545
    )

    
    
    (5,036
    )
    
    
    (5,090
    )Amortization of prior service cost
    
    
    
    
    
    
    54
    

    
    
    
    
    
    
    108Amortization of net loss
    
    
    
    
    
    
    216
    

    
    
    
    
    
    
    432Net periodic benefit cost
    
    $
    676
    
    
    $
    942
    

    
    $
    1,352
    
    
    $
    1,884
 Post-Retirement
    
    Post-RetirementService cost
    
    $
    87
    
    
    $
    124
    

    
    $
    174
    
    
    $
    248Interest cost
    
    
    162
    
    
    
    195
    

    
    
    324
    
    
    
    390Amortization of prior service cost
    
    
    
    
    
    
    (273
    )

    
    
    
    
    
    
    (546
    )Amortization of net loss
    
    
    
    
    
    
    101
    

    
    
    
    
    
    
    202Net periodic benefit cost
    
    $
    249
    
    
    $
    147
    

    
    $
    498
    
    
    $
    294
 Note 8. Business Segments
   11




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AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in Thousands)
  Reportable Segments
    
    All Other
    
    IntersegmentBarging
    
    Manufacturing
    
    Segments(1)
    
    Eliminations
    
    TotalQuarter ended June 30, 2005Revenues from external customers
    
    $
    148,120
    
    
    $
    31,949
    
    
    $
    2,917
    
    
    $
    
    
    
    $
    182,986Intersegment revenues
    
    
    244
    
    
    
    2,663
    
    
    
    13
    
    
    
    (2,920
    )
    
    
    Total revenue
    
    
    148,364
    
    
    
    34,612
    
    
    
    2,930
    
    
    
    (2,920
    )
    
    
    182,986Operating income
    
    
    8,817
    
    
    
    2,047
    
    
    
    943
    
    
    
    (23
    )
    
    
    11,784Quarter ended July 2, 2004Revenues from external customers
    
    $
    121,386
    
    
    $
    28,985
    
    
    $
    2,039
    
    
    $
    
    
    
    $
    152,410Intersegment revenues
    
    
    198
    
    
    
    109
    
    
    
    
    
    
    
    (307
    )
    
    
    Total revenue
    
    
    121,584
    
    
    
    29,094
    
    
    
    2,039
    
    
    
    (307
    )
    
    
    152,410Operating income (loss)
    
    
    921
    
    
    
    (178
    )
    
    
    (264
    )
    
    
    
    
    
    
    479Six months ended June 30, 2005Revenues from external customers
    
    $
    278,262
    
    
    $
    46,074
    
    
    $
    4,972
    
    
    $
    
    
    
    $
    329,308Intersegment revenues
    
    
    369
    
    
    
    4,827
    
    
    
    13
    
    
    
    (5,209
    )
    
    
    Total revenue
    
    
    278,631
    
    
    
    50,901
    
    
    
    4,985
    
    
    
    (5,209
    )
    
    
    329,308Operating income
    
    
    9,281
    
    
    
    1,718
    
    
    
    1,168
    
    
    
    (23
    )
    
    
    12,144Six months ended July 2, 2004Revenues from external customers
    
    $
    240,651
    
    
    $
    48,408
    
    
    $
    4,261
    
    
    $
    
    
    
    $
    293,320Intersegment revenues
    
    
    326
    
    
    
    473
    
    
    
    8
    
    
    
    (807
    )
    
    
    Total revenue
    
    
    240,977
    
    
    
    48,881
    
    
    
    4,269
    
    
    
    (807
    )
    
    
    293,320Operating (loss) income
    
    
    (6,851
    )
    
    
    195
    
    
    
    (245
    )
    
    
    
    
    
    
    (6,901
    )
 
 (1)
    
    Financial data for segments below the reporting thresholds is attributable
to a segment operating terminals along the U.S. inland waterways and in
Venezuela. Note 9.
Contingencies
  12




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AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
(Dollars in Thousands)
 Note 10. Stockholders Equity
     Note 11. Debtor Guarantor Financial Statements
       13




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
Combining Statement of Operations for the Quarter Ended June 30, 2005
 Parent
    
    
    
    
    
    Subsidiary
    
    Non-
    
    
    
    
    
    CombinedParent
    
    Guarantor
    
    Issuers
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    Totals(Dollars in Thousands)REVENUE
    
    $
    
    
    
    $
    
    
    
    $
    8,131
    
    
    $
    177,567
    
    
    $
    6,787
    
    
    $
    (9,499
    )
    
    $
    182,986OPERATING EXPENSEMaterials, Supplies and Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,453
    
    
    
    1,905
    
    
    
    (291
    )
    
    
    74,067Rent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,177
    
    
    
    439
    
    
    
    (9,208
    )
    
    
    5,408Labor and Fringe Benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,866
    
    
    
    979
    
    
    
    
    
    
    
    31,845Fuel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,493
    
    
    
    139
    
    
    
    
    
    
    
    29,632Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    8,913
    
    
    
    2,405
    
    
    
    905
    
    
    
    
    
    
    
    12,223Taxes, Other Than Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,508
    
    
    
    
    
    
    
    
    
    
    
    4,508Selling, General & Administrative
    
    
    
    
    
    
    
    
    
    
    129
    
    
    
    12,457
    
    
    
    933
    
    
    
    
    
    
    
    13,519Total Operating Expenses
    
    
    
    
    
    
    
    
    
    
    9,042
    
    
    
    166,359
    
    
    
    5,300
    
    
    
    (9,499
    )
    
    
    171,202OPERATING (LOSS) INCOME
    
    
    
    
    
    
    
    
    
    
    (911
    )
    
    
    11,208
    
    
    
    1,487
    
    
    
    
    
    
    
    11,784OTHER EXPENSE (INCOME)Interest Expense
    
    
    
    
    
    
    
    
    
    
    6,780
    
    
    
    140
    
    
    
    472
    
    
    
    
    
    
    
    7,392Interest (Income) Expense from Affiliates
    
    
    
    
    
    
    
    
    
    
    (110
    )
    
    
    
    
    
    
    110
    
    
    
    
    
    
    
    Other, Net
    
    
    (6,033
    )
    
    
    (8,820
    )
    
    
    (16,401
    )
    
    
    (1,298
    )
    
    
    (21
    )
    
    
    28,165
    
    
    
    (4,408
    )(6,033
    )
    
    
    (8,820
    )
    
    
    (9,731
    )
    
    
    (1,158
    )
    
    
    561
    
    
    
    28,165
    
    
    
    2,984INCOME (LOSS) BEFORE INCOME TAXES
    
    
    6,033
    
    
    
    8,820
    
    
    
    8,820
    
    
    
    12,366
    
    
    
    926
    
    
    
    (28,165
    )
    
    
    8,800INCOME TAXES
    
    
    
    
    
    
    2,787
    
    
    
    
    
    
    
    43
    
    
    
    (63
    )
    
    
    
    
    
    
    2,767NET INCOME (LOSS)
    
    $
    6,033
    
    
    $
    6,033
    
    
    $
    8,820
    
    
    $
    12,323
    
    
    $
    989
    
    
    $
    (28,165
    )
    
    $
    6,033
 14




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
Combining Statement of Operations for the Quarter Ended July 2, 2004
 Parent
    
    
    
    
    
    Subsidiary
    
    Non-
    
    
    
    
    
    CombinedParent
    
    Guarantor
    
    Issuers
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    Totals(Dollars in Thousands)REVENUE
    
    $
    
    
    
    $
    
    
    
    $
    15,104
    
    
    $
    146,651
    
    
    $
    7,534
    
    
    $
    (16,879
    )
    
    $
    152,410OPERATING EXPENSEMaterials, Supplies and Other
    
    
    
    
    
    
    
    
    
    
    1,717
    
    
    
    66,258
    
    
    
    2,645
    
    
    
    (574
    )
    
    
    70,046Rent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,583
    
    
    
    614
    
    
    
    (16,305
    )
    
    
    5,892Labor and Fringe Benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,124
    
    
    
    949
    
    
    
    
    
    
    
    28,073Fuel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,136
    
    
    
    128
    
    
    
    
    
    
    
    20,264Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    8,534
    
    
    
    3,761
    
    
    
    1,046
    
    
    
    
    
    
    
    13,341Taxes, Other Than Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,938
    
    
    
    
    
    
    
    
    
    
    
    4,938Selling, General & Administrative
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    8,182
    
    
    
    1,193
    
    
    
    
    
    
    
    9,377Total Operating Expenses
    
    
    
    
    
    
    
    
    
    
    10,253
    
    
    
    151,982
    
    
    
    6,575
    
    
    
    (16,879
    )
    
    
    151,931OPERATING INCOME (LOSS)
    
    
    
    
    
    
    
    
    
    
    4,851
    
    
    
    (5,331
    )
    
    
    959
    
    
    
    
    
    
    
    479OTHER EXPENSE (INCOME)Interest Expense
    
    
    
    
    
    
    
    
    
    
    8,866
    
    
    
    31
    
    
    
    439
    
    
    
    
    
    
    
    9,336Interest (Income) Expense from Affiliates
    
    
    
    
    
    
    
    
    
    
    (632
    )
    
    
    137
    
    
    
    495
    
    
    
    
    
    
    
    Other, Net
    
    
    
    
    
    
    
    
    
    
    45,202
    
    
    
    33,611
    
    
    
    (603
    )
    
    
    (79,471
    )
    
    
    (1,261
    )
    
    
    
    
    
    
    
    53,436
    
    
    
    33,779
    
    
    
    331
    
    
    
    (79,471
    )
    
    
    8,075(LOSS) INCOME BEFORE INCOME TAXES AND
REORGANIZATION ITEMS
    
    
    
    
    
    
    
    
    
    
    (48,585
    )
    
    
    (39,110
    )
    
    
    628
    
    
    
    79,471
    
    
    
    (7,596
    )REORGANIZATION ITEMS
    
    
    
    
    
    
    
    
    
    
    (29
    )
    
    
    6,007
    
    
    
    34,792
    
    
    
    
    
    
    
    40,770(LOSS) INCOME BEFORE INCOME TAXES
    
    
    
    
    
    
    
    
    
    
    (48,556
    )
    
    
    (45,117
    )
    
    
    (34,164
    )
    
    
    79,471
    
    
    
    (48,366
    )INCOME TAXES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76
    
    
    
    114
    
    
    
    
    
    
    
    190NET (LOSS) INCOME
    
    $
    
    
    
    $
    
    
    
    $
    (48,556
    )
    
    $
    (45,193
    )
    
    $
    (34,278
    )
    
    $
    79,471
    
    
    $
    (48,556
    )
 15




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
Combining Statement of Operations for the Six Months Ended June 30, 2005
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(Dollars in Thousands)REVENUE
    
    $
    
    
    
    $
    
    
    
    $
    16,266
    
    
    $
    322,505
    
    
    $
    9,322
    
    
    $
    (18,785
    )
    
    $
    329,308OPERATING EXPENSEMaterials, Supplies and Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    123,488
    
    
    
    3,736
    
    
    
    (342
    )
    
    
    126,882Rent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,207
    
    
    
    851
    
    
    
    (18,443
    )
    
    
    10,615Labor and Fringe Benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,131
    
    
    
    1,973
    
    
    
    
    
    
    
    64,104Fuel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,983
    
    
    
    194
    
    
    
    
    
    
    
    56,177Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    17,921
    
    
    
    4,763
    
    
    
    1,818
    
    
    
    
    
    
    
    24,502Taxes, Other Than Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,925
    
    
    
    
    
    
    
    
    
    
    
    8,925Selling, General & Administrative
    
    
    
    
    
    
    
    
    
    
    233
    
    
    
    23,973
    
    
    
    1,753
    
    
    
    
    
    
    
    25,959Total Operating Expenses
    
    
    
    
    
    
    
    
    
    
    18,154
    
    
    
    307,470
    
    
    
    10,325
    
    
    
    (18,785
    )
    
    
    317,164OPERATING (LOSS) INCOME
    
    
    
    
    
    
    
    
    
    
    (1,888
    )
    
    
    15,035
    
    
    
    (1,003
    )
    
    
    
    
    
    
    12,144OTHER EXPENSE (INCOME)Interest Expense
    
    
    
    
    
    
    
    
    
    
    16,546
    
    
    
    273
    
    
    
    935
    
    
    
    
    
    
    
    17,754Interest (Income) Expense from Affiliates
    
    
    
    
    
    
    
    
    
    
    (217
    )
    
    
    
    
    
    
    217
    
    
    
    
    
    
    
    Other, Net
    
    
    295
    
    
    
    37
    
    
    
    (18,180
    )
    
    
    914
    
    
    
    (1,128
    )
    
    
    12,346
    
    
    
    (5,716
    )295
    
    
    
    37
    
    
    
    (1,851
    )
    
    
    1,187
    
    
    
    24
    
    
    
    12,346
    
    
    
    12,038(LOSS) INCOME BEFORE INCOME TAXES
    
    
    (295
    )
    
    
    (37
    )
    
    
    (37
    )
    
    
    13,848
    
    
    
    (1,027
    )
    
    
    (12,346
    )
    
    
    106INCOME TAXES
    
    
    
    
    
    
    258
    
    
    
    
    
    
    
    100
    
    
    
    43
    
    
    
    
    
    
    
    401NET (LOSS) INCOME
    
    $
    (295
    )
    
    $
    (295
    )
    
    $
    (37
    )
    
    $
    13,748
    
    
    $
    (1,070
    )
    
    $
    (12,346
    )
    
    $
    (295
    )
 16




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
Combining Statement of Operations for the Six Months Ended July 2, 2004
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(Dollars in Thousands)REVENUE
    
    $
    
    
    
    $
    
    
    
    $
    31,371
    
    
    $
    283,104
    
    
    $
    13,420
    
    
    $
    (34,575
    )
    
    $
    293,320OPERATING EXPENSEMaterials, Supplies and Other
    
    
    
    
    
    
    
    
    
    
    1,717
    
    
    
    125,075
    
    
    
    6,502
    
    
    
    (710
    )
    
    
    132,584Rent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,904
    
    
    
    1,173
    
    
    
    (33,865
    )
    
    
    12,212Labor and Fringe Benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56,058
    
    
    
    1,894
    
    
    
    
    
    
    
    57,952Fuel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,342
    
    
    
    192
    
    
    
    
    
    
    
    40,534Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    17,421
    
    
    
    7,446
    
    
    
    2,508
    
    
    
    
    
    
    
    27,375Taxes, Other Than Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,090
    
    
    
    
    
    
    
    
    
    
    
    10,090Selling, General & Administrative
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    17,197
    
    
    
    2,270
    
    
    
    
    
    
    
    19,474Total Operating Expenses
    
    
    
    
    
    
    
    
    
    
    19,145
    
    
    
    301,112
    
    
    
    14,539
    
    
    
    (34,575
    )
    
    
    300,221OPERATING INCOME (LOSS)
    
    
    
    
    
    
    
    
    
    
    12,226
    
    
    
    (18,008
    )
    
    
    (1,119
    )
    
    
    
    
    
    
    (6,901
    )OTHER EXPENSE (INCOME)Interest Expense
    
    
    
    
    
    
    
    
    
    
    18,477
    
    
    
    63
    
    
    
    908
    
    
    
    
    
    
    
    19,448Interest (Income) Expense from Affiliates
    
    
    
    
    
    
    
    
    
    
    (2,806
    )
    
    
    277
    
    
    
    2,529
    
    
    
    
    
    
    
    Other, Net
    
    
    
    
    
    
    
    
    
    
    68,953
    
    
    
    37,898
    
    
    
    (886
    )
    
    
    (107,692
    )
    
    
    (1,727
    )
    
    
    
    
    
    
    
    84,624
    
    
    
    38,238
    
    
    
    2,551
    
    
    
    (107,692
    )
    
    
    17,721LOSS BEFORE INCOME TAXES AND
REORGANIZATION ITEMS
    
    
    
    
    
    
    
    
    
    
    (72,398
    )
    
    
    (56,246
    )
    
    
    (3,670
    )
    
    
    107,692
    
    
    
    (24,622
    )REORGANIZATION ITEMS
    
    
    
    
    
    
    
    
    
    
    (68
    )
    
    
    12,670
    
    
    
    34,792
    
    
    
    
    
    
    
    47,394LOSS BEFORE INCOME TAXES
    
    
    
    
    
    
    
    
    
    
    (72,330
    )
    
    
    (68,916
    )
    
    
    (38,462
    )
    
    
    107,692
    
    
    
    (72,016
    )INCOME TAXES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23
    
    
    
    291
    
    
    
    
    
    
    
    314NET LOSS
    
    $
    
    
    
    $
    
    
    
    $
    (72,330
    )
    
    $
    (68,939
    )
    
    $
    (38,753
    )
    
    $
    107,692
    
    
    $
    (72,330
    )
 17




---



##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
Combining Statement of Financial Position at June 30, 2005
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(Dollars in thousands)ASSETSCURRENT ASSETSCash and Cash Equivalents
    
    $
    
    
    
    $
    
    
    
    $
    2,103
    
    
    $
    31
    
    
    $
    4,580
    
    
    $
    
    
    
    $
    6,714Cash, Restricted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,452
    
    
    
    
    
    
    
    9,452Accounts Receivable, Net
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    80,459
    
    
    
    6,210
    
    
    
    
    
    
    
    86,699Accounts Receivable  Intercompany
    
    
    
    
    
    
    (2
    )
    
    
    161,249
    
    
    
    (157,057
    )
    
    
    (4,190
    )
    
    
    
    
    
    
    Materials and Supplies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,610
    
    
    
    1,834
    
    
    
    
    
    
    
    62,444Deferred Tax Asset  Current
    
    
    
    
    
    
    5,986
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,986Other Current Assets
    
    
    
    
    
    
    
    
    
    
    1,813
    
    
    
    14,506
    
    
    
    1,136
    
    
    
    (399
    )
    
    
    17,056Total Current Assets
    
    
    
    
    
    
    5,984
    
    
    
    165,195
    
    
    
    (1,451
    )
    
    
    19,022
    
    
    
    (399
    )
    
    
    188,351PROPERTIESNet
    
    
    
    
    
    
    
    
    
    
    304,053
    
    
    
    63,150
    
    
    
    49,194
    
    
    
    
    
    
    
    416,397PENSION ASSETS
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,171
    
    
    
    
    
    
    
    
    
    
    
    16,171INVESTMENT IN SUBSIDIARIES
    
    
    101,868
    
    
    
    102,126
    
    
    
    (27,273
    )
    
    
    (113,377
    )
    
    
    1,291
    
    
    
    (64,635
    )
    
    
    INVESTMENT IN EQUITY INVESTEES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,754
    
    
    
    837
    
    
    
    
    
    
    
    4,591DEFERRED TAX ASSET
    
    
    
    
    
    
    18,867
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,867OTHER ASSETS
    
    
    
    
    
    
    
    
    
    
    9,168
    
    
    
    5,980
    
    
    
    68
    
    
    
    
    
    
    
    15,216Total Assets
    
    $
    101,868
    
    
    $
    126,977
    
    
    $
    451,143
    
    
    $
    (25,773
    )
    
    $
    70,412
    
    
    $
    (65,034
    )
    
    $
    659,593LIABILITIESCURRENT LIABILITIESAccounts Payable
    
    $
    
    
    
    $
    2
    
    
    $
    58
    
    
    $
    22,689
    
    
    $
    348
    
    
    $
    
    
    
    $
    23,097Accrued Payroll and Fringe Benefits
    
    
    
    
    
    
    
    
    
    
    77
    
    
    
    23,360
    
    
    
    
    
    
    
    
    
    
    
    23,437Deferred Revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,145
    
    
    
    (356
    )
    
    
    241
    
    
    
    15,030Accrued Claims and Insurance Premiums
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,250
    
    
    
    
    
    
    
    
    
    
    
    10,250Accrued Interest
    
    
    
    
    
    
    
    
    
    
    8,059
    
    
    
    94
    
    
    
    158
    
    
    
    
    
    
    
    8,311Current Portion of Long-Term Debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,887
    
    
    
    
    
    
    
    2,887Accrued Reorganization Claims and Fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,100
    
    
    
    
    
    
    
    
    
    
    
    3,100Other Liabilities
    
    
    
    
    
    
    5,335
    
    
    
    94
    
    
    
    27,150
    
    
    
    2,698
    
    
    
    
    
    
    
    35,277Total Current Liabilities
    
    
    
    
    
    
    5,337
    
    
    
    8,288
    
    
    
    101,788
    
    
    
    5,735
    
    
    
    241
    
    
    
    121,389LONG-TERM DEBT
    
    
    
    
    
    
    
    
    
    
    334,500
    
    
    
    9,464
    
    
    
    27,992
    
    
    
    
    
    
    
    371,956PENSION LIABILITY
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,818
    
    
    
    
    
    
    
    
    
    
    
    23,818DEFERRED TAX LIABILITY
    
    
    
    
    
    
    24,853
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,853OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,776
    
    
    
    5,574
    
    
    
    (641
    )
    
    
    15,709Total Liabilities
    
    
    
    
    
    
    30,190
    
    
    
    342,788
    
    
    
    145,846
    
    
    
    39,301
    
    
    
    (400
    )
    
    
    557,725STOCKHOLDERS EQUITYCommon Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,813
    
    
    
    (1,813
    )
    
    
    Members Interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,880
    
    
    
    (10,880
    )
    
    
    Other Capital
    
    
    106,583
    
    
    
    106,583
    
    
    
    106,583
    
    
    
    
    
    
    
    50,518
    
    
    
    (263,684
    )
    
    
    106,583Unearned Compensation
    
    
    (4,420
    )
    
    
    (4,420
    )
    
    
    (4,420
    )
    
    
    
    
    
    
    
    
    
    
    8,840
    
    
    
    (4,420
    )Retained Deficit
    
    
    (295
    )
    
    
    (5,376
    )
    
    
    6,192
    
    
    
    (171,619
    )
    
    
    (32,100
    )
    
    
    202,903
    
    
    
    (295
    )Total Stockholders Equity (Deficit)
    
    
    101,868
    
    
    
    96,787
    
    
    
    108,355
    
    
    
    (171,619
    )
    
    
    31,111
    
    
    
    (64,634
    )
    
    
    101,868Total Liabilities and Stockholders Equity
    
    $
    101,868
    
    
    $
    126,977
    
    
    $
    451,143
    
    
    $
    (25,773
    )
    
    $
    70,412
    
    
    $
    (65,034
    )
    
    $
    659,593
 18




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
Combining Statement of Financial Position at December 31, 2004
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(Dollars in thousands)ASSETSCURRENT ASSETSCash and Cash Equivalents
    
    $
    
    
    
    $
    
    
    
    $
    39,452
    
    
    $
    30
    
    
    $
    7,163
    
    
    $
    
    
    
    $
    46,645Cash, Restricted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,182
    
    
    
    
    
    
    
    9,182Accounts Receivable, Net
    
    
    
    
    
    
    
    
    
    
    92
    
    
    
    70,485
    
    
    
    7,420
    
    
    
    
    
    
    
    77,997Accounts Receivable  Intercompany
    
    
    
    
    
    
    
    
    
    
    145,701
    
    
    
    (144,011
    )
    
    
    (1,690
    )
    
    
    
    
    
    
    Materials and Supplies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,270
    
    
    
    2,087
    
    
    
    
    
    
    
    46,357Deferred Tax Asset  Current
    
    
    
    
    
    
    3,916
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,916Other Current Assets
    
    
    
    
    
    
    
    
    
    
    4,942
    
    
    
    15,116
    
    
    
    1,531
    
    
    
    
    
    
    
    21,589Total Current Assets
    
    
    
    
    
    
    3,916
    
    
    
    190,187
    
    
    
    (14,110
    )
    
    
    25,693
    
    
    
    
    
    
    
    205,686PROPERTIESNet
    
    
    
    
    
    
    
    
    
    
    322,052
    
    
    
    63,450
    
    
    
    51,180
    
    
    
    
    
    
    
    436,682PENSION ASSETS
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,638
    
    
    
    
    
    
    
    
    
    
    
    15,638INVESTMENT IN SUBSIDIARIES
    
    
    100,098
    
    
    
    100,098
    
    
    
    (39,322
    )
    
    
    37,319
    
    
    
    977
    
    
    
    (199,170
    )
    
    
    INVESTMENT IN EQUITY INVESTEES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,368
    
    
    
    1,028
    
    
    
    
    
    
    
    4,396DEFERRED TAX ASSET
    
    
    
    
    
    
    17,791
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,791OTHER ASSETS
    
    
    
    
    
    
    
    
    
    
    (270
    )
    
    
    5,474
    
    
    
    71
    
    
    
    
    
    
    
    5,275Total Assets
    
    $
    100,098
    
    
    $
    121,805
    
    
    $
    472,647
    
    
    $
    111,139
    
    
    $
    78,949
    
    
    $
    (199,170
    )
    
    $
    685,468LIABILITIESCURRENT LIABILITIESAccounts Payable
    
    $
    
    
    
    $
    
    
    
    $
    35
    
    
    $
    24,505
    
    
    $
    921
    
    
    $
    
    
    
    $
    25,461Accrued Payroll and Fringe Benefits
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    16,736
    
    
    
    
    
    
    
    
    
    
    
    16,745Deferred Revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,760
    
    
    
    
    
    
    
    
    
    
    
    13,760Accrued Claims and Insurance Premiums
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,127
    
    
    
    
    
    
    
    
    
    
    
    13,127Accrued Interest
    
    
    
    
    
    
    
    
    
    
    1,114
    
    
    
    
    
    
    
    159
    
    
    
    
    
    
    
    1,273Current Portion of Long-Term Debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,887
    
    
    
    
    
    
    
    2,887Accrued Reorganization Claims Settlements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,383
    
    
    
    
    
    
    
    
    
    
    
    8,383Accrued Reorganization Fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,220
    
    
    
    
    
    
    
    
    
    
    
    7,220Other Liabilities
    
    
    
    
    
    
    
    
    
    
    291
    
    
    
    21,276
    
    
    
    3,373
    
    
    
    
    
    
    
    24,940Total Current Liabilities
    
    
    
    
    
    
    
    
    
    
    1,449
    
    
    
    105,007
    
    
    
    7,340
    
    
    
    
    
    
    
    113,796LONG-TERM DEBT
    
    
    
    
    
    
    
    
    
    
    364,717
    
    
    
    9,464
    
    
    
    29,365
    
    
    
    
    
    
    
    403,546PENSION LIABILITY
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,120
    
    
    
    
    
    
    
    
    
    
    
    22,120DEFERRED TAX LIABILITY
    
    
    
    
    
    
    26,787
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,787OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    
    
    
    
    154
    
    
    
    10,291
    
    
    
    8,676
    
    
    
    
    
    
    
    19,121Total Liabilities
    
    
    
    
    
    
    26,787
    
    
    
    366,320
    
    
    
    146,882
    
    
    
    45,381
    
    
    
    
    
    
    
    585,370STOCKHOLDERS EQUITYCommon Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,813
    
    
    
    (1,813
    )
    
    
    Members Interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,663
    
    
    
    (10,663
    )
    
    
    Other Capital
    
    
    100,098
    
    
    
    95,018
    
    
    
    106,327
    
    
    
    (35,743
    )
    
    
    50,518
    
    
    
    (216,120
    )
    
    
    100,098Retained Deficit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,426
    )
    
    
    29,426
    
    
    
    Total Stockholders Equity (Deficit)
    
    
    100,098
    
    
    
    95,018
    
    
    
    106,327
    
    
    
    (35,743
    )
    
    
    33,568
    
    
    
    (199,170
    )
    
    
    100,098Total Liabilities and Stockholders Equity
    
    $
    100,098
    
    
    $
    121,805
    
    
    $
    472,647
    
    
    $
    111,139
    
    
    $
    78,949
    
    
    $
    (199,170
    )
    
    $
    685,468
 19




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##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
(Unaudited)
Combining Statement of Cash Flows for the Six Months Ended June 30, 2005
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(Dollars in Thousands)Net Income (Loss)
    
    $
    (295
    )
    
    $
    (295
    )
    
    $
    (37
    )
    
    $
    13,748
    
    
    $
    (1,070
    )
    
    $
    (12,346
    )
    
    $
    (295
    )Adjustments to Reconcile Net (Loss) Income to Net CashProvided by (Used in) Operating Activities:Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    17,921
    
    
    
    4,763
    
    
    
    1,818
    
    
    
    
    
    
    
    24,502Interest Accretion and Debt Issuance Cost Amortization
    
    
    
    
    
    
    
    
    
    
    2,264
    
    
    
    
    
    
    
    71
    
    
    
    
    
    
    
    2,335(Gain) Loss on Property Dispositions
    
    
    
    
    
    
    
    
    
    
    (4,339
    )
    
    
    13
    
    
    
    (106
    )
    
    
    
    
    
    
    (4,432
    )Other Operating Activities
    
    
    295
    
    
    
    (2,970
    )
    
    
    (36,615
    )
    
    
    24,769
    
    
    
    894
    
    
    
    11,705
    
    
    
    (1,922
    )Changes in Operating Assets and Liabilities:Accounts Receivable
    
    
    
    
    
    
    
    
    
    
    (125
    )
    
    
    (9,987
    )
    
    
    1,210
    
    
    
    
    
    
    
    (8,902
    )Intercompany Accounts Receivable/Payable
    
    
    
    
    
    
    (2
    )
    
    
    15,547
    
    
    
    (13,045
    )
    
    
    (2,500
    )
    
    
    
    
    
    
    Materials and Supplies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,372
    )
    
    
    253
    
    
    
    
    
    
    
    (14,119
    )Accrued Interest
    
    
    
    
    
    
    
    
    
    
    7,064
    
    
    
    94
    
    
    
    (1
    )
    
    
    
    
    
    
    7,157Other Current Assets
    
    
    
    
    
    
    (2,070
    )
    
    
    734
    
    
    
    295
    
    
    
    394
    
    
    
    400
    
    
    
    (247
    )Other Current Liabilities
    
    
    
    
    
    
    5,337
    
    
    
    1,277
    
    
    
    16,059
    
    
    
    (1,583
    )
    
    
    241
    
    
    
    21,331Net Cash Provided by (Used in) Operating Activities
before Reorganization Items
    
    
    
    
    
    
    
    
    
    
    3,691
    
    
    
    22,337
    
    
    
    (620
    )
    
    
    
    
    
    
    25,408Reorganization Items Paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,503
    )
    
    
    
    
    
    
    
    
    
    
    (12,503
    )Net Cash Provided by (Used in) Operating Activities
    
    
    
    
    
    
    
    
    
    
    3,691
    
    
    
    9,834
    
    
    
    (620
    )
    
    
    
    
    
    
    12,905INVESTING ACTIVITIESProperty Additions
    
    
    
    
    
    
    
    
    
    
    (7,865
    )
    
    
    (3,593
    )
    
    
    (27
    )
    
    
    
    
    
    
    (11,485
    )Proceeds from Property Dispositions
    
    
    
    
    
    
    
    
    
    
    12,663
    
    
    
    403
    
    
    
    300
    
    
    
    
    
    
    
    13,366Net Change in Restricted Cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (270
    )
    
    
    
    
    
    
    (270
    )Investment in Vessel Leasing LLC
    
    
    
    
    
    
    
    
    
    
    (2,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,500
    )Other Investing Activities
    
    
    
    
    
    
    
    
    
    
    (28
    )
    
    
    (2,066
    )
    
    
    58
    
    
    
    
    
    
    
    (2,036
    )Net Cash Provided by (Used in) Investing Activities
    
    
    
    
    
    
    
    
    
    
    2,270
    
    
    
    (5,256
    )
    
    
    61
    
    
    
    
    
    
    
    (2,925
    )FINANCING ACTIVITIESLong-Term Debt Repaid
    
    
    
    
    
    
    
    
    
    
    (401,046
    )
    
    
    
    
    
    
    (1,443
    )
    
    
    
    
    
    
    (402,489
    )Revolving Credit Facility Borrowings
    
    
    
    
    
    
    
    
    
    
    170,710
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    170,7102015 Senior Note Borrowings
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000Outstanding Checks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,577
    )
    
    
    
    
    
    
    
    
    
    
    (4,577
    )Debt Costs
    
    
    
    
    
    
    
    
    
    
    (12,937
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,937
    )Other Financing Activities
    
    
    
    
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    (581
    )
    
    
    
    
    
    
    (618
    )Net Cash (Used in) Provided by Financing Activities
    
    
    
    
    
    
    
    
    
    
    (43,310
    )
    
    
    (4,577
    )
    
    
    (2,024
    )
    
    
    
    
    
    
    (49,911
    )(Decrease) Increase in Cash and Cash Equivalents
    
    
    
    
    
    
    
    
    
    
    (37,349
    )
    
    
    1
    
    
    
    (2,583
    )
    
    
    
    
    
    
    (39,931
    )Cash and Cash Equivalents at Beginning of Period
    
    
    
    
    
    
    
    
    
    
    39,452
    
    
    
    30
    
    
    
    7,163
    
    
    
    
    
    
    
    46,645Cash and Cash Equivalents at End of Period
    
    $
    
    
    
    $
    
    
    
    $
    2,103
    
    
    $
    31
    
    
    $
    4,580
    
    
    $
    
    
    
    $
    6,714
 20




---



##### Table of Contents



AMERICAN BARGE LINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
Combining Statement of Cash Flows for the Six Months Ended July 2, 2004
 Parent
    
    
    
    
    
    
    Subsidiary
    
    
    Non-
    
    
    
    
    
    
    CombinedParent
    
    
    Guarantor
    
    
    Issuers
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totals(Dollars in Thousands)Net Loss
    
    $
    
    
    
    $
    
    
    
    $
    (72,330
    )
    
    $
    (68,939
    )
    
    $
    (38,753
    )
    
    $
    107,692
    
    
    $
    (72,330
    )Adjustments to Reconcile Net (Loss) Income to Net CashProvided by (Used in) Operating Activities:Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    17,421
    
    
    
    7,446
    
    
    
    2,508
    
    
    
    
    
    
    
    27,375Interest Accretion and Debt Issuance Cost Amortization
    
    
    
    
    
    
    
    
    
    
    4,558
    
    
    
    
    
    
    
    71
    
    
    
    
    
    
    
    4,629Loss on Sale of Argentina Assets
    
    
    
    
    
    
    
    
    
    
    35,206
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,206Loss on Property Dispositions
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    127
    
    
    
    
    
    
    
    
    
    
    
    143Other Operating Activities
    
    
    
    
    
    
    
    
    
    
    (105,147
    )
    
    
    103,088
    
    
    
    108,402
    
    
    
    (107,439
    )
    
    
    (1,096
    )Reorganization Items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,188
    
    
    
    
    
    
    
    
    
    
    
    12,188Changes in Operating Assets and Liabilities:Accounts Receivable
    
    
    
    
    
    
    
    
    
    
    (2,395
    )
    
    
    3,918
    
    
    
    3,077
    
    
    
    
    
    
    
    4,600Intercompany Accounts Receivable/Payable
    
    
    
    
    
    
    
    
    
    
    11,920
    
    
    
    (34,359
    )
    
    
    22,692
    
    
    
    (253
    )
    
    
    Intercompany Long-term Advances/Payables
    
    
    
    
    
    
    
    
    
    
    101,411
    
    
    
    (3,000
    )
    
    
    (98,411
    )
    
    
    
    
    
    
    Materials and Supplies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,346
    )
    
    
    (603
    )
    
    
    
    
    
    
    (5,949
    )Accrued Interest
    
    
    
    
    
    
    
    
    
    
    2,026
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    2,053Other Current Assets
    
    
    
    
    
    
    
    
    
    
    (1,086
    )
    
    
    769
    
    
    
    1,560
    
    
    
    (384
    )
    
    
    859Other Current Liabilities
    
    
    
    
    
    
    
    
    
    
    2,343
    
    
    
    (1,439
    )
    
    
    1,211
    
    
    
    384
    
    
    
    2,499Net Cash Provided by (Used In) Operating Activities
before Reorganization Items
    
    
    
    
    
    
    
    
    
    
    (6,057
    )
    
    
    14,453
    
    
    
    1,781
    
    
    
    
    
    
    
    10,177Reorganization Items Paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,629
    )
    
    
    
    
    
    
    
    
    
    
    (11,629
    )Net Cash (Used in) Provided by Operating Activities
    
    
    
    
    
    
    
    
    
    
    (6,057
    )
    
    
    2,824
    
    
    
    1,781
    
    
    
    
    
    
    
    (1,452
    )INVESTING ACTIVITIESProperty Additions
    
    
    
    
    
    
    
    
    
    
    (2,247
    )
    
    
    (1,113
    )
    
    
    (901
    )
    
    
    
    
    
    
    (4,261
    )Proceeds from Property Dispositions
    
    
    
    
    
    
    
    
    
    
    595
    
    
    
    444
    
    
    
    
    
    
    
    
    
    
    
    1,039Net Change in Restricted Cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (513
    )
    
    
    
    
    
    
    (513
    )Proceeds form Sale of Argentina Assets
    
    
    
    
    
    
    
    
    
    
    24,100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,100Other Investing Activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (567
    )
    
    
    
    
    
    
    
    
    
    
    (567
    )Net Cash Provided by (Used in) Investing Activities
    
    
    
    
    
    
    
    
    
    
    22,448
    
    
    
    (1,236
    )
    
    
    (1,414
    )
    
    
    
    
    
    
    19,798FINANCING ACTIVITIESShort-Term Borrowings
    
    
    
    
    
    
    
    
    
    
    2,354
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,354DIP Credit Facility Repayments
    
    
    
    
    
    
    
    
    
    
    (33,787
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,787
    )Long-Term Debt Repaid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,443
    )
    
    
    
    
    
    
    (1,443
    )Outstanding Checks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,588
    )
    
    
    
    
    
    
    
    
    
    
    (1,588
    )Debt Costs
    
    
    
    
    
    
    
    
    
    
    (150
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150
    )Other Financing Activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (639
    )
    
    
    
    
    
    
    (639
    )Net Cash Used in Financing Activities
    
    
    
    
    
    
    
    
    
    
    (31,583
    )
    
    
    (1,588
    )
    
    
    (2,082
    )
    
    
    
    
    
    
    (35,253
    )Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    
    
    
    
    
    
    
    
    (15,192
    )
    
    
    
    
    
    
    (1,715
    )
    
    
    
    
    
    
    (16,907
    )Cash and Cash Equivalents at Beginning of Period
    
    
    
    
    
    
    
    
    
    
    31,640
    
    
    
    33
    
    
    
    3,602
    
    
    
    
    
    
    
    35,275Cash and Cash Equivalents at End of Period
    
    $
    
    
    
    $
    
    
    
    $
    16,448
    
    
    $
    33
    
    
    $
    1,887
    
    
    $
    
    
    
    $
    18,368
 21




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 INTRODUCTION.
  
    
    Overview.This section provides a general description of the Company and its
business, as well as developments the Company believes are important in understanding
the results of operations and financial condition or in understanding anticipated
future trends.
    
    Results of Operations.This section provides an analysis of the Companys results
of operations for the three months and six months ended June 30, 2005.
    
    Liquidity and Capital Resources.This section provides an overview of the
Companys sources of liquidity, a discussion of the Companys debt that existed as of
June 30, 2005 and an analysis of the Companys cash flows for the six months ended
June 30, 2005.
    
    Seasonality.This section discusses the seasonality of our business.
    
    Changes in Accounting Standards.This section discusses certain changes in
accounting and reporting standards applicable to the Company.
    
    Critical Accounting Policies.This section discusses
accounting policies that are considered important to the
Companys financial condition and results of operations, require significant
judgement and require estimates on the part of management in
application.
    
    Quantitative and Qualitative Disclosures about Market Risk.This section discusses
exposure to potential loss arising from adverse changes in fuel prices, interest rates
and foreign currency exchange rates.
    
    Risk Factors and Caution Concerning Forward-Looking Statements.This section
references important factors that could adversely affect the operations, business or
financial results of the Company or its business segments and the use of
forward-looking information, included in MD&A and the condensed consolidated financial
statements. Such information is based on managements current expectations about
future events, which are inherently susceptible to uncertainty and changes in
circumstances.
 OVERVIEW
 Our Business
  22




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##### Table of Contents



,
 RiverTrac
    Outlook
 Barge Transportation Services.
  23




---



##### Table of Contents



24




---



##### Table of Contents



Manufacturing.
 Taxes
   25




---



##### Table of Contents



RESULTS OF OPERATIONS
 Quarter Ended June 30, 2005 Compared with Quarter Ended July 2, 2004
  American Barge Line Company and Predecessor Company
OPERATING RESULTS by BUSINESS SEGMENT
Second Quarter 2005 as Compared with Second Quarter 2004
($ thousands, except per barge operated)
 2005Quarter
    
    Quarter
    
    Better
    
    % of Consolidated RevenueEnded
    
    Ended
    
    (Worse)
    
    Second
    
    SecondJune 30,
    
    July 2,
    
    than
    
    Quarter
    
    Quarter2005
    
    2004
    

2004
    
    2005
    
    2004REVENUE (1)Domestic Barging
    
    $
    143,483
    
    
    $
    115,751
    
    
    $
    27,732
    
    
    
    78.4
    %
    
    
    76.0
    %International Barging
    
    
    4,637
    
    
    
    5,635
    
    
    
    (998
    )
    
    
    2.5
    %
    
    
    3.7
    %Manufacturing (Jeffboat)
    
    
    31,949
    
    
    
    28,985
    
    
    
    2,964
    
    
    
    17.5
    %
    
    
    19.0
    %Other
    
    
    2,917
    
    
    
    2,039
    
    
    
    878
    
    
    
    1.6
    %
    
    
    1.3
    %Consolidated Revenue
    
    $
    182,986
    
    
    $
    152,410
    
    
    $
    30,576
    
    
    
    100.0
    %
    
    
    100.0
    %OPERATING EXPENSEDomestic Barging
    
    $
    134,869
    
    
    $
    114,891
    
    
    $
    (19,978
    )International Barging
    
    
    4,434
    
    
    
    5,574
    
    
    
    1,140Manufacturing (Jeffboat)
    
    
    29,925
    
    
    
    29,163
    
    
    
    762Other
    
    
    1,974
    
    
    
    2,303
    
    
    
    329Consolidated Operating Expense
    
    $
    171,202
    
    
    $
    151,931
    
    
    $
    (19,271
    )
    
    
    93.6
    %
    
    
    99.7
    %OPERATING INCOME (LOSS)(1)Domestic Barging
    
    $
    8,614
    
    
    $
    860
    
    
    $
    7,754International Barging
    
    
    203
    
    
    
    61
    
    
    
    142Manufacturing (Jeffboat)
    
    
    2,024
    
    
    
    (178
    )
    
    
    2,202Other
    
    
    943
    
    
    
    (264
    )
    
    
    1,207Consolidated Operating Income
    
    $
    11,784
    
    
    $
    479
    
    
    $
    11,305
    
    
    
    6.4
    %
    
    
    0.3
    %Interest Expense
    
    
    7,392
    
    
    
    9,336
    
    
    
    1,944Other Expense (Income)
    
    
    (4,408
    )
    
    
    (1,261
    )
    
    
    3,147Reorganization Items
    
    
    
    
    
    
    40,770
    
    
    
    40,770Income (Loss) before Income Taxes
    
    $
    8,800
    
    
    $
    (48,366
    )
    
    $
    57,166Income Taxes
    
    
    2,767
    
    
    
    190
    
    
    
    (2,577
    )Net Income (Loss)
    
    $
    6,033
    
    
    $
    (48,556
    )
    
    $
    54,589Domestic
barges operated (average of period beginning and end)
    
    
    3,206
    
    
    
    3,294
    
    
    
    (88
    )Domestic
barging revenue per barge operated (actual)
    
    $
    44,755
    
    
    $
    35,140
    
    
    $
    9,615
 
 (1)
    
    Excludes inter-segment revenue and income. Revenue.
  26




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##### Table of Contents



Operating Expense.
    Interest Expense.
 27




---



##### Table of Contents



Other Expense (Income).
 Reorganization Items.
 Income Tax Expense.
 Six Months Ended June 30, 2005 Compared to Six Months Ended July 2, 2004
  28




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##### Table of Contents



American Barge Line Company and Predecessor Company
OPERATING RESULTS by BUSINESS SEGMENT
Six Months Ended June 30, 2005 as Compared with Six Months Ended July 2, 2004
($ thousands, except per barge operated)
 2005Six Months
    
    Six Months
    
    Better
    
    % of ConsolidatedEnded
    
    Ended
    
    (Worse)
    
    RevenueJune 30,
    
    July 2,
    
    than
    
    Six Months
    
    Six Months2005
    
    2004
    
    2004
    
    2005
    
    2004REVENUE(1)Domestic Barging
    
    $
    272,592
    
    
    $
    231,232
    
    
    $
    41,360
    
    
    
    82.8
    %
    
    
    78.8
    %International Barging
    
    
    5,670
    
    
    
    9,419
    
    
    
    (3,749
    )
    
    
    1.7
    %
    
    
    3.2
    %Manufacturing (Jeffboat)
    
    
    46,074
    
    
    
    48,408
    
    
    
    (2,334
    )
    
    
    14.0
    %
    
    
    16.5
    %Other
    
    
    4,972
    
    
    
    4,261
    
    
    
    711
    
    
    
    1.5
    %
    
    
    1.5
    %Consolidated Revenue
    
    $
    329,308
    
    
    $
    293,320
    
    
    $
    35,988
    
    
    
    100.0
    %
    
    
    100.0
    %OPERATING EXPENSEDomestic Barging
    
    $
    260,221

    
    
    $
    235,278
    
    
    $
    (24,943
    )International Barging
    
    
    8,760
    
    
    
    12,224
    
    
    
    3,464Manufacturing (Jeffboat)
    
    
    44,379
    
    
    
    48,213
    
    
    
    3,834Other
    
    
    3,804
    
    
    
    4,506
    
    
    
    702Consolidated Operating Expense
    
    $
    317,164
    
    
    $
    300,221
    
    
    $
    (16,943
    )
    
    
    96.3
    %
    
    
    102.4
    %OPERATING INCOMEDomestic Barging
    
    $
    12,371
    
    
    $
    (4,046
    )
    
    $
    16,417International Barging
    
    
    (3,090
    )
    
    
    (2,805
    )
    
    
    (285
    )Manufacturing (Jeffboat)
    
    
    1,695
    
    
    
    195
    
    
    
    1,500Other
    
    
    1,168
    
    
    
    (245
    )
    
    
    1,413Consolidated Operating Income
    
    $
    12,144
    
    
    $
    (6,901
    )
    
    $
    19,045
    
    
    
    3.7
    %
    
    
    -2.4
    %Interest Expense
    
    
    17,754
    
    
    
    19,448
    
    
    
    1,694Other Expense (Income)
    
    
    (5,716
    )
    
    
    (1,727
    )
    
    
    3,989Reorganization Items
    
    
    
    
    
    
    47,394
    
    
    
    47,394Loss before Income Taxes
    
    $
    106
    
    
    $
    (72,016
    )
    
    $
    72,122Income Taxes
    
    
    401
    
    
    
    314
    
    
    
    (87
    )Net (Loss) Income
    
    $
    (295
    )
    
    $
    (72,330
    )
    
    $
    72,035Domestic
barges operated (average of period beginning and end)
    
    
    3,219
    
    
    
    3,404
    
    
    
    (185
    )Domestic barging revenue per barge operated
    
    $
    84,682
    
    
    $
    67,929
    
    
    $
    16,753
 
 (1)
    
    Excludes inter-segment revenue. Revenue.
    Operating Expense.
  29




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##### Table of Contents



Interest Expense.
 Other Income.
 Reorganization Items.
 Income Tax Expense.
 30




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
     Our indebtedness and financial restructuring
  31




---



##### Table of Contents



Net cash, capital expenditures and cash flow
  32




---



##### Table of Contents



SEASONALITY
  CHANGES IN ACCOUNTING STANDARDS
  CRITICAL ACCOUNTING POLICIES
  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Fuel price risk
  33




---



##### Table of Contents



Interest rate and other risks
  Foreign currency exchange rate risks
  RISK FACTORS AND FORWARD-LOOKING STATEMENTS
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  34




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES.
 Evaluation of Disclosure Controls and Procedures
 Changes in Internal Control over Financial Reporting
 35




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  Current Legal Proceeding.
 
    
    Miller Appeal.On January 19, 2005, Milfam II LP and Trust A-4, together referred
to as the Miller Entities, holders of approximately $23 million in principal amount of
our 12% Pay-in-Kind Senior Subordinated Notes due July 1, 2008 (the PIK Notes), filed
a notice of appeal, commencing an appeal to the United States District Court for the
Southern District of Indiana (the District Court) of (1) the order of the U.S.
Bankruptcy Court, Southern District of Indiana, New Albany Division (the Bankruptcy
Court) entered on December 30, 2004 confirming the Plan of Reorganization (the
Confirmation Order) and (2) the order of the Bankruptcy Court entered on January 12,
2005 denying the Miller Entities Motion For Reconsideration And To Open Record To
Include Recent Senior Debt Trading Information. On February 17, 2005, the Miller
Entities sought a limited stay of the Bankruptcy Courts Confirmation Order. On March 3,
2005, the Bankruptcy Court entered an order denying the Miller Entities request for a
limited stay. The Confirmation Order remains in full force and effect.On January 31, 2005, the Miller Entities filed a statement of issues to be raised in
the appeal to the District Court. These issues include, among others, that the enterprise
value as of the effective date of the Plan of Reorganization (January 11, 2005) of the
reorganized debtors of $500 million as determined by the Bankruptcy Court as part of the
Confirmation Order is too low and was based on inaccurate and incomplete information; the
Plan of Reorganization is not fair and equitable as to the Miller Entities and other
holders of PIK Notes; the Miller Entities claims should not have been subordinated to
the claims of holders of the 2008 Senior Notes as provided under the Plan of
Reorganization; third-party releases provided by the Plan of Reorganization should not
have been granted; the ballot cast by HY I to accept the Plan of Reorganization should be
disregarded; and Danielson Holding Corporation should not have received any recovery
under the Plan of Reorganization.The Miller Entities filed their Appellants Brief on March 10, 2005. On March 25,
2005, we filed the Appellees Brief and the Appellees Motion to Dismiss. In the
Appellees Motion To Dismiss, we asserted that the appeal should be dismissed because,
under principles sometimes referred to as equitable mootness, no relief may be
equitably fashioned even if the Miller Entities raise a legitimate ground for reversal or
modification of all or some part of the Confirmation Order. The Miller Entities filed
their Response In Opposition To Appellees Motion to Dismiss on April 1, 2005 and their
Appellants Reply Brief on April 4, 2005. On April 12, 2005, we filed the following: (i)
Motion To Strike Declaration Of Tom Thompson; (ii) Brief In Support Of The Motion To
Strike Declaration Of Tom Thompson; and (iii) Reply To Response Of Miller Entities
Opposition To Motion To Dismiss. On April 21, 2004, the Miller Entities filed the
Response By MilFam II LP And Trust A-4 In Opposition To Appellees Motion To Strike
Declaration Of Tom Thompson and on May 2, 2005, we filed Appellees Reply Regarding
Motion To Strike Declaration Of Tom Thompson. On May 11, 2005, the Miller Entities filed
the Response By MilFam II LP And Trust A-4 In Opposition To Appellees Second Motion To
Strike Declaration Of Tom Thompson, and on June 21, 2005, they filed the Request By
Miller Entities For Oral Argument. We filed Appellees Response To Request For
 36




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##### Table of Contents



Oral Argument on June 28, 2005, and the Miller Entities filed the Reply By MilFam II
LP And Trust A-4 To Appellees Response To Request For Oral
Argument on July 8, 2005. On August 9, 2005, the Miller
Entities filed an Emergency Motion for Expedited Consideration of
Appeal as a result of our parent Company's Form S-1 filing on
July 19, 2005.In several of the briefs and other pleadings filed with the District Court, the
Miller Entities have stated that they seek a limited remedy and are not seeking to
undo the Plan of Reorganization. The Miller Entities have asserted that they are
seeking to recover a portion of the equity value of the reorganized debtors as of the
effective date of the Plan of Reorganization that the Miller Entities contend has been or
will be distributed in the form of new shares to holders of our 2008 Senior Notes and
that should have instead been distributed to the holders of PIK Notes. Among the remedies
that the Miller Entities argue should be implemented is the issuance to holders of PIK
Notes of sufficient additional new shares so that the holders of the PIK Notes will
realize the additional value that the Miller Entities assert the holders of PIK Notes are
entitled, with the issuance of such additional new shares correspondingly diluting the
value of new shares that were issued to holders of 2008 Senior Notes. The issuance of new
shares could materially dilute the percentage of ownership of some or all of the
stockholders of American Commercial Lines Inc.We intend to continue to oppose the appeal and to advocate that the appeal should be
dismissed. However, we can make no assurance that the District Court (or the Seventh
Circuit Court of Appeals or the United States Supreme Court, in the case of any further
appeal) will dismiss the appeal, or that the ultimate outcome of this matter will not
materially adversely affect either our ability to fully consummate our Plan of
Reorganization as confirmed or the market value of our common stock and will not involve
a material cost to us. Any such outcome could have a material adverse effect on our
business, financial condition and results of operations.
 Environmental Matters.
 
    
    SBA Shipyard, Jennings, Louisiana.SBA Shipyard is a remediation site that was
operated by a third-party barge cleaning service provider utilized by National Marine,
Inc., an entity whose assets were combined with ours in 1998. A potentially responsible
party group of barge operators, which includes us, has been formed to coordinate final
cleanup of this site. Our funded share of the land contamination cleanup is
approximately 40%. The removal action was completed pursuant to a work plan accepted by
the U.S. Environmental Protection Agency (U.S. EPA). As of March 31, 2005, we had
expended approximately $670,000 in connection with the final cleanup of this site. As of
March 31, 2005, we had a reserve of approximately $41,000 with respect to this site that
we expect will cover the on-going land contamination cleanup. On May 3, 2005, we made an
additional contribution to the cleanup in the amount of approximately $40,000, reducing
this reserve to approximately $930 as of June 30, 2005. No additional contributions are
required or anticipated at this time and therefore no additional environmental reserves
have been made for this matter.
    
    EPS, Marietta, Ohio.EPS, Inc., a wholly owned subsidiary of Vectura Group Inc.,
is the owner of Connex Pipe Systems closed solid waste landfill located in Marietta,
Ohio (Connex). We assumed liability for the monitoring and potential cleanup of Connex
(up to $30,000 per year) pursuant to our combination with Vectura Group. In 1986, Connex
was subject to an Ohio consent judgment (Consent Judgment) under which it agreed to
remediate and monitor the closed landfill for a period of three years. Connex complied
with the Consent Judgment, and in 1994 the Ohio Environmental Protection Agency (Ohio
EPA) issued a letter confirming Connexs compliance. In 1998, the Ohio EPA changed its
regulations with respect to monitoring requirements to require longer monitoring periods
for closed sites and sought to apply those new regulations to Connex retroactively.
Connex and other similarly situated companies objected to the retroactive application of
the new Ohio EPA requirements. In November 1998, the Ohio EPA issued finalized guidance
(Final Guidance) regarding retroactive application of the Ohio EPA requirements. We
believe that the Final Guidance supports the position that Connex has fulfilled its
monitoring obligations with respect to the property. We have requested written
confirmation from the Ohio EPA that our monitoring responsibilities with respect to the
property
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have been fulfilled. Currently, we coordinate inspections of the property four times a
year for integrity and maintenance of the cap with minimal associated cost. As of June
30, 2005, we had a reserve of approximately $31,400 in the event that future monitoring
or testing of the site is required.
    
    Third Site, Zionsville, Indiana.Jeffboat has been named a potentially
responsible party at Third Site by the U.S. EPA. Third Site was utilized for the storage
of hazardous substances and wastes during the remediation of the Environmental
Conservation and Chemical Corporation and Northside Sanitary Landfill (ECC/NSL) in
Zionsville, Indiana. As a potentially responsible party at ECC/ NSL, Jeffboat is
responsible for 3.6% of the total volume of materials to be remediated at Third Site as
well. Remediation activities are ongoing at Third Site, and, as of March 31, 2005,
Jeffboat had contributed approximately $225,000 toward that remediation. No additional
contributions are required or anticipated at this time, and therefore no additional
environmental reserves have been made for this matter.
    
    Barge Cleaning Facilities, Port Arthur, Texas.American Commercial Barge Line LLC
received notices from the U.S. EPA in 1999 and 2004 that it is a potentially responsible
party at the State Marine of Port Arthur and the Palmer Barge Line Superfund Sites in
Port Arthur, Texas with respect to approximately 50 barges that were cleaned by State
Marine and approximately five barges that were cleaned by Palmer Barge Line for us in
the early 1980s. The U.S. EPA has made no assessments with respect to these sites.
    
    Tiger Shipyard, Baton Rouge, Louisiana.At the direction of the State of
Louisiana, we have participated in a cleanup of a former barge cleaning operation at
this site. The cleanup involved the cleaning of approximately seven barges and the
disposal of barge wash water. As of March 31, 2005, we had incurred costs of
approximately $6.7 million in connection with this site. The barge cleaning activities
are complete. As of June 30, 2005, we had a reserve of approximately $9,110 in the event
that the State of Louisiana requires future testing at the site or additional disposal
efforts.
    
    PHI/Harahan Site, Harahan, Louisiana.We have been contacted by the State of
Louisiana in connection with the investigation and cleanup of diesel fuel in soil at
this site. On March 22, 2005, we submitted an investigation work plan for approval by
the State of Louisiana. We do not know what level of diesel will be discovered in this
investigation or whether cleanup will be required. We have paid approximately $20,000 in
consultant fees related to investigation at this site. As of June 30, 2005, we had a
reserve of approximately $2,000 in the event that future testing, clean-up or monitoring
of the site is required.
 
 ITEM 6. EXHIBITS
 Exhibit No.
    
    Description2.1
    
    First Amended Joint Plan of Reorganization, dated as of October 19, 2004, of American Commercial
Lines LLC and Affiliated Debtors (filed as Exhibit 2.1 to the Registration Statement on Form S-4
of American Commercial Lines LLC and ACL Finance Corp. filed on April 29, 2005 and incorporated
herein by reference).3.1
    
    Certificate of Incorporation of American Barge Line Company (filed as Exhibit 3.5 to the
Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on
April 29, 2005 and incorporated herein by reference).3.2
    
    By-laws of American Barge Line Company (filed as Exhibit 3.6 to the Registration Statement on Form
S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on April 29, 2005 and
incorporated herein by reference).
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Exhibit No.
    
    Description4.1
    
    Indenture, dated as of February 11, 2005, among American Commercial Lines LLC, ACL Finance Corp.,
each of the guarantors party thereto and Wilmington Trust Company, as trustee (filed as Exhibit
4.1 to the Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance
Corp. filed on April 29, 2005 and incorporated herein by reference).4.2
    
    Registration Rights Agreement, dated as of February 11, 2005, by and among American Commercial
Lines LLC and ACL Finance Corp., as Issuers, the guarantors named therein and UBS Securities LLC,
Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial
purchasers (filed as Exhibit 4.2 to the Registration Statement on Form S-4 of American Commercial
Lines LLC and ACL Finance Corp. filed on April 29, 2005 and incorporated herein by reference).4.3
    
    Form of Exchange Note (included in Exhibit 4.1).10.1
    
    Amended and Restated Loan Agreement, dated as of February 11, 2005, by and among American
Commercial Barge Line LLC, American Commercial Lines LLC, American Commercial Terminals LLC,
Houston Fleet LLC, Jeffboat LLC, Louisiana Dock Company LLC, the lenders referred to therein and
Bank of America, N.A., as administrative agent (filed as Exhibit 10.1 to the Registration
Statement on Form S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on April 29,
2005 and incorporated herein by reference).10.2
    
    Amendment to Agreements, dated as of May 20, 2005, by and among American Commercial Lines LLC,
Jeffboat LLC, American Commercial Terminals LLC, Houston Fleet LLC, American Commercial Barge Line
LLC, Louisiana Dock Company LLC, the lenders referred to therein and Bank of America, N.A., as
administrative agent. (filed as Exhibit 10.30 to the Registration Statement on Form S-1 of
American Commercial Lines Inc. filed on July 19, 2005 and incorporated herein by reference).10.3
    
    American Commercial Lines Inc. 2005 Stock Incentive Plan (filed as Exhibit 10.27 to Amendment No.
1 to the Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance
Corp. filed on May 27, 2005 and incorporated herein by reference).10.4
    
    Form of American Commercial Lines Inc. Restricted Stock Award Agreement (under the American
Commercial Lines Inc. 2005 Stock Incentive Plan) (filed as Exhibit 10.28 to Amendment No. 1 to the
Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on
May 27, 2005 and incorporated herein by reference).10.5
    
    Form of American Commercial Lines Inc. Nonqualified Stock Option Agreement (under the American
Commercial Lines Inc. 2005 Stock Incentive Plan) (filed as Exhibit 10.29 to Amendment No. 1 to the
Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on
May 27, 2005 and incorporated herein by reference).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.
 
 *
    
    Filed herewith. 39




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SIGNATURES
  AMERICAN BARGE LINE COMPANYBy:
    
    /s/ Mark R. HoldenMark R. HoldenPresident and Chief Executive OfficerBy:
    
    /s/ Christopher A. BlackChristopher A. BlackSenior Vice President and Chief Financial Officer(Principal Financial Officer)
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INDEX TO EXHIBITS
 Exhibit No.
    
    Description2.1
    
    First Amended Joint Plan of Reorganization, dated as of October 19, 2004, of American Commercial
Lines LLC and Affiliated Debtors (filed as Exhibit 2.1 to the Registration Statement on Form S-4
of American Commercial Lines LLC and ACL Finance Corp. filed on April 29, 2005 and incorporated
herein by reference).3.1
    
    Certificate of Incorporation of American Barge Line Company (filed as Exhibit 3.5 to the
Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on
April 29, 2005 and incorporated herein by reference).3.2
    
    By-laws of American Barge Line Company (filed as Exhibit 3.6 to the Registration Statement on Form
S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on April 29, 2005 and
incorporated herein by reference).4.1
    
    Indenture, dated as of February 11, 2005, among American Commercial Lines LLC, ACL Finance Corp.,
each of the guarantors party thereto and Wilmington Trust Company, as trustee (filed as Exhibit
4.1 to the Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance
Corp. filed on April 29, 2005 and incorporated herein by reference).4.2
    
    Registration Rights Agreement, dated as of February 11, 2005, by and among American Commercial
Lines LLC and ACL Finance Corp., as Issuers, the guarantors named therein and UBS Securities LLC,
Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial
purchasers (filed as Exhibit 4.2 to the Registration Statement on Form S-4 of American Commercial
Lines LLC and ACL Finance Corp. filed on April 29, 2005 and incorporated herein by reference).4.3
    
    Form of Exchange Note (included in Exhibit 4.1).10.1
    
    Amended and Restated Loan Agreement, dated as of February 11, 2005, by and among American
Commercial Barge Line LLC, American Commercial Lines LLC, American Commercial Terminals LLC,
Houston Fleet LLC, Jeffboat LLC, Louisiana Dock Company LLC, the lenders referred to therein and
Bank of America, N.A., as administrative agent (filed as Exhibit 10.1 to the Registration
Statement on Form S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on April 29,
2005 and incorporated herein by reference).10.2
    
    Amendment to Agreements, dated as of May 20, 2005, by and among American Commercial Lines LLC,
Jeffboat LLC, American Commercial Terminals LLC, Houston Fleet LLC, American Commercial Barge Line
LLC, Louisiana Dock Company LLC, the lenders referred to therein and Bank of America, N.A., as
administrative agent. (filed as Exhibit 10.30 to the Registration Statement on Form S-1 of
American Commercial Lines Inc. filed on July 19, 2005 and incorporated herein by reference).10.3
    
    American Commercial Lines Inc. 2005 Stock Incentive Plan (filed as Exhibit 10.27 to Amendment No.
1 to the Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance
Corp. filed on May 27, 2005 and incorporated herein by reference).10.4
    
    Form of American Commercial Lines Inc. Restricted Stock Award Agreement (under the American
Commercial Lines Inc. 2005 Stock Incentive Plan) (filed as Exhibit 10.28 to Amendment No. 1 to the
Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on
May 27, 2005 and incorporated herein by reference).10.5
    
    Form of American Commercial Lines Inc. Nonqualified Stock Option Agreement (under the American
Commercial Lines Inc. 2005 Stock Incentive Plan) (filed as Exhibit 10.29 to Amendment No. 1 to the
Registration Statement on Form S-4 of American Commercial Lines LLC and ACL Finance Corp. filed on
May 27, 2005 and incorporated herein by reference).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.
 
 *
    
    Filed herewith. 41