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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 000-51237
 FREIGHTCAR AMERICA, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
(State or other jurisdiction of incorporation or organization)
    
    25-1837219
(I.R.S. Employer Identification No.)Two North Riverside Plaza, Suite 1250, Chicago, Illinois
(Address of principal executive offices)
    
    60606
(Zip Code)
 (800) 458-2235
(Registrants telephone number, including area code)
  Title of class
    
    Name of Each Exchange on Which RegisteredCommon stock, par value $0.01 per share
    
    Nasdaq Global Market
   o þ
 o þ
 þ o
 o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ
    Documents
    
    Part of Form 10-KPortions of the registrants definitive Proxy Statement
for the 2009 annual meeting of stockholders to be filed
pursuant to Regulation 14A within 120 days of the end of
the registrants fiscal year ended December 31, 2008
    
    Part III




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##### 



FREIGHTCAR AMERICA, INC.
 TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    8Item 1B.
    
    Unresolved Staff Comments
    
    
    16Item 2.
    
    Properties
    
    
    16Item 3.
    
    Legal Proceedings
    
    
    17Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    18PART IIItem 5.
    
    Market for Registrants Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity
Securities
    
    
    18Item 6.
    
    Selected Financial Data
    
    
    21Item 7.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    23Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    37Item 8.
    
    Financial Statements and Supplementary Data
    
    
    38Item 9.
    
    Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
    
    
    66Item 9A.
    
    Controls and Procedures
    
    
    66Item 9B.
    
    Other Information
    
    
    67PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    67Item 11.
    
    Executive Compensation
    
    
    67Item 12.
    
    Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    67Item 13.
    
    Certain Relationships and Related Transactions, and
Director Independence
    
    
    67Item 14.
    
    Principal Accounting Fees and Services
    
    
    67PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    67SIGNATURES
    
    
    
    
    69EX-10.2EX-10.4EX-10.5EX-10.7EX-10.8EX-10.19EX-10.22EX-21EX-23EX-31.1EX-31.2EX-32
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PART I
 
 Item 1. Business.
 OVERVIEW
  ®
    OUR PRODUCTS AND SERVICES
   3




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
    
    BethGon Series. The BethGon is the leader in the aluminum-bodied
coal-carrying gondola railcar segment. Since we introduced the steel
BethGon railcar in the late 1970s and the aluminum BethGon railcar in
1986, the BethGon railcar has become the most widely used
coal-carrying railcar in North America. Our current BethGon II
features lighter weight, higher capacity and increased durability
suitable for long-haul coal carrying railcar service. We have received
several patents on the features of the BethGon II and continue to
explore ways to increase the BethGon IIs capacity and improve its
reliability.
    
    AutoFlood Series. Our aluminum bodied open-top hopper railcar, the
AutoFlood, is a five-pocket coal-carrying railcar equipped with a
bottom discharge gate mechanism. We began manufacturing AutoFlood
railcars in 1984, and introduced the AutoFlood II and AutoFlood III
designs in 1996 and 2002, respectively. Both the AutoFlood II and
AutoFlood III design incorporate the automatic rapid discharge
system, the MegaFlo door system, a patented mechanism that uses an
over-center locking design, enabling the cargo door to close with
tension rather than by compression. Further, AutoFlood railcars can
be equipped with rotary couplers to permit rotary unloading.
    
    Other Coal-Carrying Railcars.We also manufacture a variety of
other types of aluminum and steel-bodied coal-carrying railcars,
including triple hopper, hybrid aluminum/stainless steel and flat
bottom gondola railcars.
    
    Other Railcar Types. Our portfolio of other railcar types includes the following:
    
    The AVC Aluminum Vehicle Carrier design is used to transport commercial and
light vehicles (automobiles and trucks) from assembly plants and ports to rail
distribution centers; the Articulated Bulk Container railcar is designed to
carry dense bulk products such as waste products in 20 foot containers;
Intermodal Double Stack railcars, including a stand-alone, 40 foot well car and
the DynaStackÒ articulated, 5-unit, 40 foot well car for international
containers; a Small Cube Covered Hopper railcar used to transport high density
products such as roofing granules, fly ash, sand and cement; a Mill Gondola
Railcar used to transport steel products and scrap; Slab and Coil steel railcars
designed specifically for transportation of steel slabs and coil steel products,
respectively; Flat Railcars, Bulkhead Flat Railcars and Centerbeam Flat
Railcars designed to transport a variety of products, including machinery and
equipment, steel and structural steel components (including pipe), forest
products and other bulky industrial products; a Woodchip Gondola Railcar
designed to haul woodchips and municipal waste or other high-volume, low-density
commodities; and a variety of non-coal carrying open top hopper railcars
designed to carry aggregates, iron ore, taconite pellets, petroleum coke and
other bulk commodities. For example, our VersaFlood aggregate car features the
MegaFlo IA independent automatic door system with an optional hybrid
aluminum/carbon steel body design
    
    International Railcar Designs. We have established a licensing
arrangement with a railcar manufacturer in Brazil pursuant to which
our technology is used to produce various types of railcars in Brazil.
In addition, we manufacture coal-carrying railcars for export to Latin
America and have manufactured intermodal railcars for export to the
Middle East. Railroads outside of North America have a variety of
track gauges that are sized differently than in North America, which
requires us, in some cases, to alter manufacturing specifications for
foreign sales.In 2008 we established a joint venture in India. The joint venture
company, Titagarh FreightCar Private Ltd., is developing prototype
railcars based on our designs, and we expect the prototypes to begin
shipping during 2009. We continue to explore opportunities in other
international markets.
    
    Spare Parts. We sell replacement parts for our railcars and railcars built by others.
  4




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MANUFACTURING
     CUSTOMERS
    SALES AND MARKETING
  RESEARCH AND DEVELOPMENT
  5




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BACKLOG
   Year Ended December 31,2008
    
    
    2007
    
    
    2006Railcar backlog at start of period
    
    
    5,399
    
    
    
    9,315
    
    
    
    20,729Railcars delivered
    
    
    (10,349
    )
    
    
    (10,282
    )
    
    
    (18,764
    )Railcar orders
    
    
    7,570
    
    
    
    6,366
    
    
    
    7,350Railcar backlog at end of period
    
    
    2,620
    
    
    
    5,399
    
    
    
    9,315Estimated backlog at end of period (in thousands)(1)
    
    $
    184,840
    
    
    $
    422,054
    
    
    $
    697,054
 
 (1)
    
    Estimated backlog reflects the total sales attributable to the backlog
reported at the end of the particular period as if such backlog were
converted to actual sales. Estimated backlog does not reflect
potential price increases and decreases under customer contracts that
provide for variable pricing based on changes in the cost of raw
materials. Estimated backlog includes leased railcars as if sold.
Although we continually look for opportunities to package our leased
assets for sale to our leasing company partners, these leased assets
may not be converted to sales  SUPPLIERS AND MATERIALS
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COMPETITION
    INTELLECTUAL PROPERTY
   EMPLOYEES
  REGULATION
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ENVIRONMENTAL MATTERS
     
 Item 1A. Risk Factors.
  RISKS RELATED TO THE RAILCAR INDUSTRY
 We operate in a highly cyclical industry, and our industry and markets are influenced by factors
that are beyond our control, including U.S. economic conditions. In addition, the current downturn
in the credit markets may limit our customers ability to obtain financing to purchase railcars
from us. Such factors could adversely affect demand for our railcar offerings.
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The current cost volatility of the raw materials that we use to manufacture railcars, especially
aluminum and steel, and delivery delays associated with these raw materials may adversely affect
our financial condition and results of operations.
  We depend upon a small number of customers that represent a large percentage of our sales. The loss
of any single customer, or a reduction in sales to any such customer, could have a material adverse
effect on our business, financial condition and results of operations.
  The variable purchase patterns of our customers and the timing of completion, delivery and
acceptance of customer orders may cause our sales and income from operations to vary substantially
each quarter, which will result in significant fluctuations in our quarterly results.
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Limitations on the supply of wheels and other railcar components could adversely affect our
business because they may limit the number of railcars we can manufacture.
  We operate in a highly competitive industry and we may be unable to compete successfully against
other railcar manufacturers.
  Further consolidation of the railroad industry may adversely affect our business.
  RISKS RELATED TO OUR BUSINESS
 The weak global economy and tight credit markets may continue to adversely affect our business.
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We rely significantly on the sales of our coal-carrying railcars. Future demand for coal could
decrease, which could adversely affect our business, financial condition and results of operations.
   We rely upon a single supplier to supply us with all of our cold-rolled center sills for our
railcars, and any disruption of our relationship with this supplier could adversely affect our
business.
  Equipment failures, delays in deliveries or extensive damage to our facilities could lead to
production or service curtailments or shutdowns.
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An increase in health care costs could adversely affect our results of operations.
  Our pension obligations are currently underfunded. We may have to make significant cash payments to
our pension plans, which would reduce the cash available for our business.
  The level of our reported backlog may not necessarily indicate what our future sales will be and
our actual sales may fall short of the estimated sales value attributed to our backlog.
  12




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As a public company, we are required to comply with the reporting obligations of the Exchange Act
and Section 404 of the Sarbanes-Oxley Act of 2002. If we fail to comply with the reporting
obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act or if we fail to maintain
adequate internal controls over financial reporting, our business, results of operations and
financial condition could be materially adversely affected.
   We currently are implementing a new enterprise-wide financial reporting system which may cause
operating or reporting disruptions.
  If we lose key personnel, our operations and ability to manage the day-to-day aspects of our
business will be adversely affected.
   Labor disputes could disrupt our operations and divert the attention of our management and may have
a material adverse effect on our operations and profitability.
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Shortages of skilled labor may adversely impact our operations.
  Lack of acceptance of our new railcar offerings by our customers could adversely affect our
business.
  Our production of new railcar product lines may not be initially profitable and may result in
financial losses.
  We may pursue acquisitions that involve inherent risks, any of which may cause us not to realize
anticipated benefits.
  We might fail to adequately protect our intellectual property, which may result in our loss of
market share, or third parties might assert that our intellectual property infringes on their
intellectual property, which would be costly to defend and divert the attention of our management.
  14




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We are subject to a variety of environmental laws and regulations and the cost of complying with
environmental requirements or any failure by us to comply with such requirements may have a
material adverse effect on our business, financial condition and results of operations.
  Our warranties may expose us to potentially significant claims, which may damage our reputation and
adversely affect our business, financial condition and results of operations.
  We use and rely significantly on a proprietary software system to manage our accounting and
production systems, the failure of which may lead to data loss, significant business interruption
and financial loss.
  The agreements governing our revolving credit facilities contain various covenants that, among
other things, limit our discretion in operating our business and provide for certain minimum
financial requirements.
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To the extent we expand our sales of products and services internationally, we will increase our
exposure to international economic and political risks.
   The market price of our securities may fluctuate significantly, which may make it difficult for
stockholders to sell shares of our common stock when desired or at attractive prices.
  
 Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.
  Leased or
    
    LeaseUse
    
    Location
    
    Size
    
    Owned
    
    Expiration DateCorporate headquarters
    
    Chicago, Illinois
    
    8,574 square feet
    
    Leased
    
    September 30, 2013Railcar assembly and
component
manufacturing
    
    Danville, Illinois
    
    308,665 square feet
on 36.5 acres of land
    
    Owned
    
    Railcar assembly and
component
manufacturing
    
    Roanoke, Virginia
    
    383,709 square feet
on 15.5 acres of land
    
    Leased
    
    November 30, 2014*
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Leased or
    
    LeaseUse
    
    Location
    
    Size
    
    Owned
    
    Expiration DateRailcar assembly and
component
manufacturing
    
    Johnstown,
Pennsylvania
    
    564,983 square feet
on 31.9 acres of land
    
    Owned
    
    Administrative
    
    Johnstown,
Pennsylvania
    
    29,500 square feet
on 1.02 acres of
land
    
    Owned
    
    Light storage
    
    Johnstown,
Pennsylvania
    
    1,633 square feet on
14.26 acres of land
    
    Owned
    
    Parts warehouse
    
    Johnstown,
Pennsylvania
    
    86,000 square feet
    
    Leased
    
    December 31, 2016
 
 *
    
    The lease agreement provides that we or Norfolk Southern, the lessor,
can terminate this lease at any time after December 31, 2009.   
 Item 3. Legal Proceedings.
    17




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Item 4. Submission of Matters to a Vote of Security Holders.
  
 PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
  Common stock priceHigh
    
    Low2008Fourth quarter
    
    $
    28.39
    
    
    $
    17.01Third quarter
    
    $
    39.16
    
    
    $
    27.94Second quarter
    
    $
    44.63
    
    
    $
    33.56First quarter
    
    $
    41.88
    
    
    $
    28.862007Fourth quarter
    
    $
    43.20
    
    
    $
    32.29Third quarter
    
    $
    54.60
    
    
    $
    38.20Second quarter
    
    $
    51.80
    
    
    $
    45.14First quarter
    
    $
    58.87
    
    
    $
    46.852006Fourth quarter
    
    $
    57.07
    
    
    $
    48.79Third quarter
    
    $
    60.05
    
    
    $
    45.10Second quarter
    
    $
    76.57
    
    
    $
    46.60First quarter
    
    $
    72.10
    
    
    $
    47.062005Fourth quarter
    
    $
    49.55
    
    
    $
    35.45Third quarter
    
    $
    40.87
    
    
    $
    19.01Second quarter (from April 6, 2005)
    
    $
    22.00
    
    
    $
    17.55
 Dividend Policy
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Performance Graph
 The following performance graph and related information shall not be deemed soliciting material
or to be filed with the Securities and Exchange Commission, nor shall such information be
incorporated by reference into any future filing under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically
incorporates it by reference into such filing.
  COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG FREIGHTCAR AMERICA,
NASDAQ MARKET INDEX AND DJ TRANSPORTATION INDEX
 
 
 April 6, 2005
    
    June 30, 2005
    
    Dec. 31, 2005
    
    June 30, 2006
    
    Dec. 31, 2006
    
    June 30, 2007
    
    Dec. 31, 2007
    
    June. 30, 2008
    
    Dec. 31, 2008FreightCar America,
Inc.
    
    $
    100.00
    
    
    $
    94.29
    
    
    $
    228.96
    
    
    $
    264.59
    
    
    $
    264.72
    
    
    $
    228.94
    
    
    $
    168.02
    
    
    $
    170.94
    
    
    $
    88.44Nasdaq Composite
Index
    
    $
    100.00
    
    
    $
    103.48
    
    
    $
    111.17
    
    
    $
    110.07
    
    
    $
    122.69
    
    
    $
    132.37
    
    
    $
    134.89
    
    
    $
    116.34
    
    
    $
    80.01DJ Transportation
Index
    
    $
    100.00
    
    
    $
    94.18
    
    
    $
    113.89
    
    
    $
    134.44
    
    
    $
    125.07
    
    
    $
    140.61
    
    
    $
    126.85
    
    
    $
    120.30
    
    
    $
    85.98
 20




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Item 6. Selected Financial Data.
  Year Ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(in thousands, except share and per share data and railcar amounts)Statements of operations data:Revenues
    
    $
    746,390
    
    
    $
    817,025
    
    
    $
    1,444,800
    
    
    $
    927,187
    
    
    $
    482,180Cost of sales
    
    
    690,721
    
    
    
    713,661
    
    
    
    1,211,349
    
    
    
    820,638
    
    
    
    468,309Gross profit
    
    
    55,669
    
    
    
    103,364
    
    
    
    233,451
    
    
    
    106,549
    
    
    
    13,871Selling, general and administrative expense
    
    
    31,717
    
    
    
    38,914
    
    
    
    34,390
    
    
    
    28,461
    
    
    
    32,660Plant closure charges(5)
    
    
    20,037
    
    
    
    30,836
    
    
    
    
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    3,915
    
    
    
    33,614
    
    
    
    199,061
    
    
    
    78,088
    
    
    
    (18,789
    )Interest income
    
    
    3,827
    
    
    
    8,349
    
    
    
    5,860
    
    
    
    1,225
    
    
    
    282Interest expense
    
    
    396
    
    
    
    420
    
    
    
    352
    
    
    
    11,082
    
    
    
    13,856Amortization and write-off of deferred
financing costs
    
    
    281
    
    
    
    232
    
    
    
    306
    
    
    
    776
    
    
    
    459Income (loss) before income taxes
    
    
    7,065
    
    
    
    41,311
    
    
    
    204,263
    
    
    
    67,455
    
    
    
    (32,822
    )Income tax provision (benefit)
    
    
    2,451
    
    
    
    14,843
    
    
    
    75,530
    
    
    
    21,762
    
    
    
    (7,962
    )Net income (loss)
    
    
    4,614
    
    
    
    26,468
    
    
    
    128,733
    
    
    
    45,693
    
    
    
    (24,860
    )Redeemable preferred stock dividends accumulated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    311
    
    
    
    1,062Net income (loss) attributable to common stockholders
    
    $
    4,614
    
    
    $
    26,468
    
    
    $
    128,733
    
    
    $
    45,382
    
    
    $
    (25,922
    )Weighted average common shares outstanding  basic
    
    
    11,788,400
    
    
    
    12,115,712
    
    
    
    12,586,889
    
    
    
    11,135,440
    
    
    
    6,888,750Weighted average common shares outstandingdiluted
    
    
    11,833,132
    
    
    
    12,188,901
    
    
    
    12,785,015
    
    
    
    11,234,075
    
    
    
    6,888,750Per share data:Net income (loss) per share attributable to common
stockholders  basic
    
    $
    0.39
    
    
    $
    2.18
    
    
    $
    10.23
    
    
    $
    4.08
    
    
    $
    (3.76
    )Net income (loss) per share attributable to common
stockholders  diluted
    
    $
    0.39
    
    
    $
    2.17
    
    
    $
    10.07
    
    
    $
    4.04
    
    
    $
    (3.76
    )Dividends declared per common share
    
    $
    0.24
    
    
    $
    0.24
    
    
    $
    0.15
    
    
    $
    0.06
    
    
    $
    0.00Other financial and operating data:Capital expenditures, including railcars on operating
leases produced or acquired
    
    $
    42,428
    
    
    $
    6,073
    
    
    $
    6,903
    
    
    $
    7,520
    
    
    $
    2,215Railcars delivered
    
    
    10,349
    
    
    
    10,282
    
    
    
    18,764
    
    
    
    13,031
    
    
    
    7,484Railcar orders
    
    
    7,570
    
    
    
    6,366
    
    
    
    7,350
    
    
    
    22,363
    
    
    
    12,437Railcar backlog
    
    
    2,620
    
    
    
    5,399
    
    
    
    9,315
    
    
    
    20,729
    
    
    
    11,397Estimated backlog
    
    $
    184,840
    
    
    $
    422,054
    
    
    $
    697,054
    
    
    $
    1,412,424
    
    
    $
    747,842Balance sheet data (at period end):Cash and cash equivalents
    
    $
    129,192
    
    
    $
    197,042
    
    
    $
    212,026
    
    
    $
    61,737
    
    
    $
    11,213Restricted cash(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,955Total assets
    
    
    389,154
    
    
    
    355,884
    
    
    
    419,981
    
    
    
    225,282
    
    
    
    191,143Total debt(3)
    
    
    28
    
    
    
    93
    
    
    
    154
    
    
    
    224
    
    
    
    56,058Rights to additional acquisition consideration,
including accumulated accretion(1)(4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,581Total redeemable preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,182Total stockholders equity (deficit)
    
    
    196,928
    
    
    
    198,072
    
    
    
    203,869
    
    
    
    92,199
    
    
    
    (37,089
    )
 
 (1)
    
    Rights to additional acquisition consideration refers to the additional acquisition
consideration related to the acquisition of our business in 1999 that became due, and was
paid, upon the completion of our initial public offering in April 2005. 21




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(2)
    
    Our restricted cash for the year ended December 31, 2004 included cash collateral of $3.8
million plus interest held in escrow for our participation in a residual support guarantee
agreement with respect to railcars that we sold to a customer that are presently leased by the
customer to a third party. Our restricted cash for the year ended December 31, 2004 also
included $7.5 million held in a restricted cash account as additional collateral for our
former revolving credit facility, which was released to us after we entered into our revolving
credit facility agreement and $1.2 million in escrow, representing security for workers
compensation insurance. As of December 31, 2005, we no longer had any remaining restricted
cash. Restricted cash in the amount of $13.0 million was released during the year ended
December 31, 2005 as follows: the $7.5 million attributable to cash held as additional
collateral under the former revolving credit facility was released upon signing the new credit
facility agreement; $1.2 million held in escrow as security for workers compensation
insurance was replaced by a letter of credit; and $4.3 million held in escrow for a residual
support guaranty relating to railcars we sold to a financial institution that are leased by a
third-party customer was released by the financial institution.(3)
    
    Our total debt includes current maturities of long-term debt and our variable rate demand
industrial revenue bonds due 2010, which are classified as short-term debt. We repaid all of
our debt that existed prior to the initial public offering with the net proceeds of the
initial public offering and available cash.(4)
    
    Our recorded liability under the rights to additional acquisition consideration was based on
the fair value of the rights to additional acquisition consideration at the time that we
acquired our business from TTII in 1999, using a discount rate of 25% and an expected
redemption period of seven years. As a result of our initial public offering, we were required
to pay the additional acquisition consideration in the aggregate amount of $35.0 million.(5)
    
    For the year ended December 31, 2007, we recorded plant closure charges of $30.8 million
relating to the planned closure of our Johnstown facility, which included curtailment and
special termination benefits for our pension and postretirement benefit plans of $27.7
million, one-time employee termination benefits of $2.2 million and fixed asset impairment
charges of $950,000. For the year ended December 31, 2008, we recorded additional plant
closure charges of $20.0 million, which included special termination benefits for our pension
and postretirement benefit plans of $19.0 million, and other related costs of $1.1 million.
See Note 3 to the consolidated financial statements. 22




---



##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 OVERVIEW
 You should read the following discussion in conjunction with our consolidated financial statements
and related notes included elsewhere in this annual report on Form 10-K . This discussion contains
forward-looking statements that are based on managements current expectations, estimates and
projections about our business and operations. Our actual results may differ materially from those
currently anticipated and expressed in such forward-looking statements. See     Forward-Looking
Statements.
         23




---



##### Table of Contents



FINANCIAL STATEMENT PRESENTATION
 Revenues
   Cost of sales
   Operating income
  RESULTS OF OPERATIONS
 24




---



##### Table of Contents



Year Ended December 31, 2008 compared to Year Ended December 31, 2007
 Revenues
 ®
 Gross Profit
  Selling, General and Administrative Expenses
  Plant Closure Charges
  Interest Expense/Income
  Income Taxes
  25




---



##### Table of Contents



Net Income
  Year Ended December 31, 2007 compared to Year Ended December 31, 2006
 Sales
 ®
 Gross Profit
  Selling, General and Administrative Expenses
  Plant Closure Charges
  26




---



##### Table of Contents



Interest Expense/Income
  Income Taxes
  Net Income
  LIQUIDITY AND CAPITAL RESOURCES
    27




---



##### Table of Contents



28




---



##### Table of Contents



Contractual Obligations
  Payments Due by Period2-3
    
    
    4-5
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years(In thousands)Capital leases from long-term debt
    
    $
    28
    
    
    $
    28
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating leases
    
    
    14,850
    
    
    
    2,067
    
    
    
    4,644
    
    
    
    4,687
    
    
    
    3,452Used railcar purchases
    
    
    3,024
    
    
    
    3,024
    
    
    
    
    
    
    
    
    
    
    
    Material and component purchases
    
    
    154,148
    
    
    
    38,681
    
    
    
    63,731
    
    
    
    51,736
    
    
    
    Total
    
    $
    172,050
    
    
    $
    43,800
    
    
    $
    68,375
    
    
    $
    56,423
    
    
    $
    3,452
       29




---



##### Table of Contents



Cash Flows
  2008
    
    
    2007
    
    
    2006Net cash (used in) provided by:Operating activities
    
    $
    (22,829
    )
    
    $
    41,398
    
    
    $
    154,156Investing activities
    
    
    (42,410
    )
    
    
    (6,062
    )
    
    
    (5,821
    )Financing activities
    
    
    (2,611
    )
    
    
    (50,320
    )
    
    
    1,954Total
    
    $
    (67,850
    )
    
    $
    (14,984
    )
    
    $
    150,289
 Operating Activities.
   Investing Activities.
  Financing Activities.
 30




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##### Table of Contents



Capital Expenditures
     CRITICAL ACCOUNTING POLICIES
   Long-lived assets
 Accounting for the Impairment or Disposal of Long-Lived Assets
  31




---



##### Table of Contents



Impairment of goodwill and intangible assets
 Goodwill and Other Intangible Assets
    
    
    volume projections based on an industry-specific outlook for railcar demand and
specifically coal railcar demand;
    
    estimated margins on railcar sales; and
    
    weighted-average cost of capital (or WACC) used to discount future performance of our
company.
   32




---



##### Table of Contents



Pensions and postretirement benefits
   1% Increase
    
    1% Decrease(in thousands)Effect on net periodic benefit cost
    
    $
    (456
    )
    
    $
    456
  1% Increase
    
    1% Decrease(in thousands)Effect on net periodic benefit cost
    
    $
    (140
    )
    
    $
    410
  33




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##### Table of Contents



Income taxes
 Accounting for Uncertainty in Income Taxes  An Interpretation of FASB Standard
No. 109
     34




---



##### Table of Contents



Product warranties
  Revenue recognition
  Compensation expense under stock option agreements and restricted stock awards
  Contingencies and litigation
  RECENT ACCOUNTING PRONOUNCEMENTS
 Accounting for
Uncertainty in Income Taxes  An Interpretation of FASB Standard No. 109
 35




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##### Table of Contents



Fair Value Measurements
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  An amendment of FASB Statements No. 87, 88, 106 and 132(R)
 The Fair Value Option for Financial Assets and
Financial Liabilities.
 Business Combinations,
 FORWARD-LOOKING STATEMENTS
   
    
    the cyclical nature of our business;
    
    adverse economic and market conditions;
    
    fluctuating costs of raw materials, including steel and aluminum, and delays in the
delivery of raw materials;
 36




---



##### Table of Contents




    
    our ability to maintain relationships with our suppliers of railcar components;
    
    our reliance upon a small number of customers that represent a large percentage of our
sales;
    
    the variable purchase patterns of our customers and the timing of completion, delivery and
acceptance of customer orders;
    
    the highly competitive nature of our industry;
    
    risks relating to our relationship with our unionized employees and their unions;
    
    our ability to manage our health care and pension costs;
    
    our reliance on the sales of our aluminum-bodied coal-carrying railcars;
    
    shortages of skilled labor;
    
    the risk of lack of acceptance of our new railcar offerings by our customers;
    
    the cost of complying with environmental laws and regulations;
    
    the costs associated with being a public company;
    
    potential significant warranty claims; and
    
    various covenants in the agreement governing our indebtedness that limit our managements
discretion in the operation of our businesses.
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
     37




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data.
 MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Internal Control Integrated Framework
  Inherent Limitations on Effectiveness of Controls
   38




---



##### Table of Contents



Internal Control
 Integrated Framework Managements Report on Internal Control over Financial Reporting
     39




---



##### Table of Contents



Internal Control  Integrated Framework
  
 40




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##### Table of Contents



FreightCar America, Inc. and Subsidiaries
 CONSOLIDATED BALANCE SHEETS
 December 31,
    
    
    December 31,2008
    
    
    2007AssetsCurrent assetsCash and cash equivalents
    
    $
    129,192
    
    
    $
    197,042Accounts receivable, net of allowance for doubtful accounts of $330 and $223, respectively
    
    
    73,120
    
    
    
    13,068Inventories
    
    
    31,644
    
    
    
    49,845Leased assets held for sale
    
    
    11,703
    
    
    
    Other current assets
    
    
    11,088
    
    
    
    7,223Deferred income taxes
    
    
    16,636
    
    
    
    13,520Total current assets
    
    
    273,383
    
    
    
    280,698Property, plant and equipment, net
    
    
    30,582
    
    
    
    26,921Railcars on operating leases
    
    
    34,971
    
    
    
    Goodwill
    
    
    21,521
    
    
    
    21,521Deferred income taxes
    
    
    23,213
    
    
    
    21,035Other long-term assets
    
    
    5,484
    
    
    
    5,709Total assets
    
    $
    389,154
    
    
    $
    355,884Liabilities, Minority Interest and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    60,986
    
    
    $
    39,525Accrued payroll and employee benefits
    
    
    9,530
    
    
    
    13,320Accrued postretirement benefits
    
    
    5,364
    
    
    
    5,188Accrued warranty
    
    
    11,476
    
    
    
    10,551Customer deposits
    
    
    7,367
    
    
    
    19,836Other current liabilities
    
    
    7,939
    
    
    
    7,100Total current liabilities
    
    
    102,662
    
    
    
    95,520Accrued pension costs
    
    
    26,763
    
    
    
    10,685Accrued postretirement benefits, less current portion
    
    
    55,293
    
    
    
    47,890Other long-term liabilities
    
    
    7,407
    
    
    
    3,717Total liabilities
    
    
    192,125
    
    
    
    157,812Commitments and contingenciesMinority Interest
    
    
    101
    
    
    
    Stockholders equityPreferred stock, $0.01 par value, 2,500,000 shares authorized (100,000 shares each
designated as Series A voting and Series B non-voting, 0 shares issued and
outstanding at December 31, 2007 and 2006)
    
    
    
    
    
    
    Common stock, $0.01 par value, 50,000,000 shares authorized, 12,731,678 and
12,731,678 shares issued at December 31, 2008 and 2007, respectively
    
    
    127
    
    
    
    127Additional paid in capital
    
    
    98,253
    
    
    
    99,270Treasury stock, at cost, 821,182 and 918,257 shares at December 31, 2008 and
2007, respectively
    
    
    (38,871
    )
    
    
    (43,597
    )Accumulated other comprehensive loss
    
    
    (16,471
    )
    
    
    (9,857
    )Retained earnings
    
    
    153,890
    
    
    
    152,129Total stockholders equity
    
    
    196,928
    
    
    
    198,072Total liabilities, minority interest and stockholders equity
    
    $
    389,154
    
    
    $
    355,884
 See notes to the consolidated financial statements.
 41




---



##### Table of Contents



FreightCar America, Inc. and Subsidiaries
 CONSOLIDATED STATEMENTS OF INCOME
 Year Ended December 31,2008
    
    
    2007
    
    
    2006Revenues
    
    $
    746,390
    
    
    $
    817,025
    
    
    $
    1,444,800Cost of sales
    
    
    690,721
    
    
    
    713,661
    
    
    
    1,211,349Gross profit
    
    
    55,669
    
    
    
    103,364
    
    
    
    233,541Selling, general and administrative expense
(including non-cash stock-based compensation expense
of $2,852, $2,804 and $2,130, respectively)
    
    
    31,717
    
    
    
    38,914
    
    
    
    34,390Plant closure charges
    
    
    20,037
    
    
    
    30,836
    
    
    
    Operating income
    
    
    3,915
    
    
    
    33,614
    
    
    
    199,061Interest income
    
    
    3,827
    
    
    
    8,349
    
    
    
    5,860Interest expense
    
    
    396
    
    
    
    420
    
    
    
    352Amortization and write-off of deferred financing costs
    
    
    281
    
    
    
    232
    
    
    
    306Income before income taxes
    
    
    7,065
    
    
    
    41,311
    
    
    
    204,263Income tax provision
    
    
    2,451
    
    
    
    14,843
    
    
    
    75,530Net income attributable to common stockholders
    
    $
    4,614
    
    
    $
    26,468
    
    
    $
    128,733Net income per common share attributable to common
stockholdersbasic
    
    $
    0.39
    
    
    $
    2.18
    
    
    $
    10.23Net income per common share attributable to common
stockholdersdiluted
    
    $
    0.39
    
    
    $
    2.17
    
    
    $
    10.07Weighted average common shares outstandingbasic
    
    
    11,788,400
    
    
    
    12,115,712
    
    
    
    12,586,889Weighted average common shares outstandingdiluted
    
    
    11,833,132
    
    
    
    12,188,901
    
    
    
    12,785,015Dividends declared per common share
    
    $
    0.24
    
    
    $
    0.24
    
    
    $
    0.15
 See notes to the consolidated financial statements.
 42




---



##### Table of Contents



FreightCar America, Inc. and Subsidiaries
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid In
    
    
    Treasury Stock
    
    
    Comprehensive
    
    
    Retained
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Shares
    
    
    Amount
    
    
    Loss
    
    
    Earnings
    
    
    EquityBalance, January 1, 2006
    
    
    12,570,200
    
    
    
    126
    
    
    
    93,932
    
    
    
    
    
    
    
    
    
    
    
    (5,556
    )
    
    
    3,697
    
    
    
    92,199Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    128,733
    
    
    
    128,733Additional minimum pension
liability, net of tax (see
Notes 10 and 11)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,950
    
    
    
    
    
    
    
    1,950Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    130,683Adjustment related to initial
application of SFAS No. 158 
pension liability, net of tax
(see Notes 10 and 11)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,599
    )
    
    
    
    
    
    
    (7,599
    )Adjustment related to initial
application of SFAS No. 158 
postretirement liability, net
of tax (see Notes 10 and 11)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,569
    )
    
    
    
    
    
    
    (15,569
    )Stock options exercised
    
    
    109,936
    
    
    
    1
    
    
    
    2,088
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,089Restricted stock awards
    
    
    3,542
    
    
    
    
    
    
    
    221
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221Forfeiture of restricted stock
awards
    
    
    (2,167
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unvested restricted stock
    
    
    
    
    
    
    
    
    
    
    (125
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (125
    )Stock-based compensation
recognized
    
    
    
    
    
    
    
    
    
    
    2,034
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,034Excess tax benefit from
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    1,831
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,831Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,895
    )
    
    
    (1,895
    )Balance, December 31, 2006
    
    
    12,681,511
    
    
    
    127
    
    
    
    99,981
    
    
    
    
    
    
    
    
    
    
    
    (26,774
    )
    
    
    130,535
    
    
    
    203,869Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,468
    
    
    
    26,468Pension liability activity, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,868
    
    
    
    
    
    
    
    6,868Postretirement liability
activity, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,049
    
    
    
    
    
    
    
    10,049Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,385Adjustment for adoption of
FIN No. 48 (see Note 2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,936
    )
    
    
    (1,936
    )Stock repurchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,048,300
    )
    
    
    (50,000
    )
    
    
    
    
    
    
    
    
    
    
    (50,000
    )Stock options exercised
    
    
    
    
    
    
    
    
    
    
    (3,322
    )
    
    
    109,936
    
    
    
    5,410
    
    
    
    
    
    
    
    
    
    
    
    2,088Restricted stock awards
    
    
    52,000
    
    
    
    
    
    
    
    (1,030
    )
    
    
    20,940
    
    
    
    1,030
    
    
    
    
    
    
    
    
    
    
    
    Forfeiture of restricted stock
awards
    
    
    (1,833)
    )
    
    
    
    
    
    
    37
    
    
    
    (833
    )
    
    
    (37
    )
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
recognized
    
    
    
    
    
    
    
    
    
    
    2,804
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,804Excess tax benefit from
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    800Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,938
    )
    
    
    (2,938
    )Balance, December 31, 2007
    
    
    12,731,678
    
    
    $
    127
    
    
    $
    99,270
    
    
    
    (918,257
    )
    
    $
    (43,597
    )
    
    $
    (9,857
    )
    
    $
    152,129
    
    
    $
    198,072Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,614
    
    
    
    4,614Pension liability activity, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,503
    )
    
    
    
    
    
    
    (7,503
    )Postretirement liability
activity, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    889
    
    
    
    
    
    
    
    889Comprehensive (loss) income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,000
    )Stock options exercised
    
    
    
    
    
    
    
    
    
    
    (1,564
    )
    
    
    54,968
    
    
    
    2,609
    
    
    
    
    
    
    
    
    
    
    
    1,045Restricted stock awards
    
    
    
    
    
    
    
    
    
    
    (2,305
    )
    
    
    48,547
    
    
    
    2,305
    
    
    
    
    
    
    
    
    
    
    
    Forfeiture of restricted stock
awards
    
    
    
    
    
    
    
    
    
    
    188
    
    
    
    (6,440
    )
    
    
    (188
    )
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
recognized
    
    
    
    
    
    
    
    
    
    
    2,852
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,852Deficiency of tax benefit from
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (188
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (188
    )Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,853
    )
    
    
    (2,853
    )Balance, December 31, 2008
    
    
    12,731,678
    
    
    $
    127
    
    
    $
    98,253
    
    
    
    (821,182
    )
    
    $
    (38,871
    )
    
    $
    (16,471
    )
    
    $
    153,890
    
    
    $
    196,928
 See notes to the consolidated financial statements.
 43




---



##### Table of Contents



FreightCar America, Inc. and Subsidiaries
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year Ended December 31,2008
    
    
    2007
    
    
    2006Cash flows from operating activitiesNet income
    
    $
    4,614
    
    
    $
    26,468
    
    
    $
    128,733Adjustments to reconcile net income to net cash flows (used in) provided by
operating activitiesPlant closure
    
    
    20,037
    
    
    
    30,836
    
    
    
    Depreciation and amortization
    
    
    4,380
    
    
    
    3,910
    
    
    
    5,442Other non-cash items
    
    
    589
    
    
    
    2,160
    
    
    
    259Deferred income taxes
    
    
    (1,065
    )
    
    
    (11,911
    )
    
    
    2,568Compensation expense under stock option and restricted share award
agreements
    
    
    2,852
    
    
    
    2,804
    
    
    
    2,130Changes in operating assets and liabilities:Accounts receivable
    
    
    (60,052
    )
    
    
    (1,699
    )
    
    
    (7,515
    )Inventories
    
    
    18,193
    
    
    
    54,875
    
    
    
    (31,554
    )Leased railcars held for sale
    
    
    (11,703
    )
    
    
    
    
    
    
    Other current assets
    
    
    2,346
    
    
    
    (312
    )
    
    
    (1,012
    )Accounts payable
    
    
    21,050
    
    
    
    (62,742
    )
    
    
    42,448Accrued payroll and employee benefits
    
    
    (4,475
    )
    
    
    (2,004
    )
    
    
    3,414Income taxes receivable/payable
    
    
    (8,705
    )
    
    
    (11,922
    )
    
    
    5,581Accrued warranty
    
    
    925
    
    
    
    (1,500
    )
    
    
    4,173Customer deposits and other current liabilities
    
    
    (11,871
    )
    
    
    11,448
    
    
    
    11,614Deferred revenue, non-current
    
    
    1,800
    
    
    
    
    
    
    
    Accrued pension costs and accrued postretirement benefits
    
    
    (1,744
    )
    
    
    987
    
    
    
    (12,125
    )Net cash flows(used in) provided by operating activities
    
    
    (22,829
    )
    
    
    41,398
    
    
    
    154,156Cash flows from investing activitiesPurchases of property, plant and equipment
    
    
    (6,991
    )
    
    
    (6,073
    )
    
    
    (6,903
    )Cost of railcars on operating leases produced or acquired
    
    
    (35,437
    )
    
    
    
    
    
    
    Proceeds from sale of property, plant and equipment
    
    
    18
    
    
    
    11
    
    
    
    1,082Net cash flows (used in) provided by investing activities
    
    
    (42,410
    )
    
    
    (6,062
    )
    
    
    (5,821
    )Cash flows from financing activitiesPayments on long-term debt
    
    
    (65
    )
    
    
    (60
    )
    
    
    (71
    )Deferred financing costs paid
    
    
    (838
    )
    
    
    (211
    )
    
    
    Stock repurchases
    
    
    
    
    
    
    (50,000
    )
    
    
    Issuance of common stock (net of issuance costs and deferred offering costs)
    
    
    1,045
    
    
    
    2,089
    
    
    
    2,089Investment in minority interest by joint venture partner
    
    
    101
    
    
    
    
    
    
    
    Excess tax benefit from stock-based compensation
    
    
    
    
    
    
    800
    
    
    
    1,831Cash dividends paid to stockholders
    
    
    (2,854
    )
    
    
    (2,938
    )
    
    
    (1,895
    )Net cash flows (used in) provided by financing activities
    
    
    (2,611
    )
    
    
    (50,320
    )
    
    
    1,954Net (decrease) increase in cash and cash equivalents
    
    
    (67,850
    )
    
    
    (14,984
    )
    
    
    150,289Cash and cash equivalents at beginning of year
    
    
    197,042
    
    
    
    212,026
    
    
    
    61,737Cash and cash equivalents at end of year
    
    $
    129,192
    
    
    $
    197,042
    
    
    $
    212,026Supplemental cash flow informationCash paid for:Interest
    
    $
    311
    
    
    $
    515
    
    
    $
    360Income tax refunds received
    
    $
    1,737
    
    
    $
    70
    
    
    $
    Income taxes paid
    
    $
    9,740
    
    
    $
    37,147
    
    
    $
    65,581Non-cash transactions:Increase (decrease) in balance of property, plant and equipment on account
    
    $
    235
    
    
    $
    (771
    )
    
    $
    1,076
 See notes to the consolidated financial statements.
 44




---



##### Table of Contents



FreightCar America, Inc. and Subsidiaries
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2008, 2007 and 2006
 Note 1  Description of the Business
  Note 2  Summary of Significant Accounting Policies
 Principles of Consolidation
  Use of Estimates
  Cash Equivalents
   Inventories
  Property, Plant and Equipment
  45




---



##### Table of Contents



Description of Assets
    
    LifeBuildings and improvements
    
    10-40 yearsMachinery and equipment
    
    3-12 years
  Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived Assets
  Research and Development
  Goodwill and Intangible Assets
 Goodwill and Other
Intangible Assets
  46




---



##### Table of Contents



Income Taxes
 Accounting for Income Taxes,
   Product Warranties
  Revenue Recognition
 Accounting for Non-Monetary Transactions, Interpretations of APB No. 29,
    Accounting for Shipping and Handling Fees and Costs
 47




---



##### Table of Contents



Financial Instruments
  Comprehensive Income (Loss)
  Earnings Per Share
  Stock-Based Compensation
 Share-Based Payment,
 Recent Accounting Pronouncements
 Accounting for
Uncertainty in Income Taxes  An Interpretation of FASB Standard No. 109
 Fair Value Measurements
 48




---



##### Table of Contents



Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  An amendment of FASB Statements No. 87, 88, 106 and 132(R)
 The Fair Value Option for Financial Assets and
Financial Liabilities.
 Business Combinations,
 Note 3  Plant Closure Charges
    49




---



##### Table of Contents



2008
    
    2007Pension plan curtailment loss and special termination benefit costs
    
    $
    10,112
    
    
    $
    14,478Postretirement plan curtailment loss and contractual benefit charges
    
    
    8,866
    
    
    
    13,204Employee termination benefits
    
    
    11
    
    
    
    2,204Other related costs
    
    
    1,048
    
    
    
    Impairment charge for plant building and land
    
    
    
    
    
    
    950Total plant closure charges
    
    $
    20,037
    
    
    $
    30,836
 Note 4  Inventories
  December 31,2008
    
    
    2007Work in progress
    
    $
    24,166
    
    
    $
    48,088Finished new railcars
    
    
    5,513
    
    
    
    1,757Used railcars acquired upon trade-in
    
    
    1,965
    
    
    
    Total inventories
    
    $
    31,644
    
    
    $
    49,845
 Note 5  Leased Railcars
    50




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##### Table of Contents



Year ending December 31, 2009
    
    $
    3,610Year ending December 31, 2010
    
    
    3,299Year ending December 31, 2011
    
    
    2,303$
    9,212
 Note 6  Property, Plant and Equipment
  December 31,2008
    
    
    2007Land
    
    $
    701
    
    
    $
    701Buildings and improvements
    
    
    20,918
    
    
    
    20,559Machinery and equipment
    
    
    42,352
    
    
    
    40,228Cost of buildings, improvements, machinery and equipment
    
    
    63,270
    
    
    
    60,787Less: Accumulated depreciation and amortization
    
    
    (38,996
    )
    
    
    (35,697
    )Buildings, improvements, machinery and equipment net of
accumulated depreciation and amortization
    
    
    24,274
    
    
    
    25,090Construction in process
    
    
    5,607
    
    
    
    1,130Total property, plant and equipment
    
    $
    30,582
    
    
    $
    26,921
   Note 7  Intangible Assets
  December 31,2008
    
    
    2007Patents
    
    $
    13,097
    
    
    $
    13,097Accumulated amortization
    
    
    (8,604
    )
    
    
    (8,014
    )Patents, net of accumulated amortization
    
    $
    4,493
    
    
    $
    5,083
 51




---



##### Table of Contents



Note 8  Product Warranties
  December 31,2008
    
    
    2007
    
    
    2006Balance at the beginning of the year
    
    $
    10,551
    
    
    $
    12,051
    
    
    $
    7,878Warranties issued during the year
    
    
    4,621
    
    
    
    3,353
    
    
    
    6,056Reductions for payments, costs of repairs and other
    
    
    (3,696
    )
    
    
    (4,853
    )
    
    
    (1,883
    )Balance at the end of the year
    
    $
    11,476
    
    
    $
    10,551
    
    
    $
    12,051
 Note 9  Revolving Credit Facilities
    JAIX Revolving Credit Facility
  52




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Note 10  Accumulated Other Comprehensive Income (Loss)
  Pre-Tax
    
    
    Tax
    
    
    After-TaxYear ended December 31, 2006Additional minimum pension liability
    
    $
    3,168
    
    
    $
    (1,218
    )
    
    $
    1,950Adjustment related to initial
application of SFAS No. 158 
pension liability (See Note 11)
    
    
    (12,049
    )
    
    
    4,450
    
    
    
    (7,599
    )Adjustment related to initial
application of SFAS No. 158 
postretirement liability (See Note
11)
    
    
    (24,685
    )
    
    
    9,116
    
    
    
    (15,569
    )$
    (33,566
    )
    
    $
    12,348
    
    
    $
    (21,218
    )Year ended December 31, 2007Pension liability activity
    
    $
    10,905
    
    
    $
    (4,037
    )
    
    $
    6,868Postretirement liability activity
    
    
    15,954
    
    
    
    (5,905
    )
    
    
    10,049$
    26,859
    
    
    $
    (9,942
    )
    
    $
    16,917Year ended December 31, 2008Pension liability activity
    
    $
    (12,141
    )
    
    $
    4,638
    
    
    $
    (7,503
    )Postretirement liability activity
    
    
    1,299
    
    
    
    (410
    )
    
    
    889$
    (10,842
    )
    
    $
    4,228
    
    
    $
    (6,614
    )
 53




---



##### Table of Contents



December 31,2008
    
    
    2007Unrecognized pension cost, net of tax of $7,162 and $2,524
    
    $
    11,840
    
    
    $
    4,337Unrecognized postretirement cost, net of tax of $2,801 and $3,211
    
    
    4,631
    
    
    
    5,520$
    16,471
    
    
    $
    9,857
 Note 11  Employee Benefit Plans
     Decrease in prepaid pension benefit cost
    
    $
    (266
    )Decrease in intangible asset
    
    
    (6,099
    )Increase in accrued pension benefits
    
    
    (5,684
    )Increase in accrued postretirement benefits
    
    
    (24,685
    )Increase in accumulated other comprehensive loss, pretax
    
    
    (36,734
    )Increase in deferred tax assets
    
    
    13,566Increase in accumulated other comprehensive loss, net of tax
    
    $
    (23,168
    )
  54




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##### Table of Contents



PostretirementPension Benefits
    
    
    Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007Change in benefit obligationBenefit obligationBeginning of year
    
    $
    55,393
    
    
    $
    49,065
    
    
    $
    53,078
    
    
    $
    52,936Service cost
    
    
    1,128
    
    
    
    2,229
    
    
    
    69
    
    
    
    683Interest cost
    
    
    3,370
    
    
    
    2,771
    
    
    
    3,231
    
    
    
    2,946Plan curtailment
    
    
    
    
    
    
    (54
    )
    
    
    
    
    
    
    40Actuarial loss (gain)
    
    
    (6,884
    )
    
    
    (4,930
    )
    
    
    (913
    )
    
    
    (3,719
    )Special termination benefit loss
    
    
    10,111
    
    
    
    8,952
    
    
    
    8,866
    
    
    
    3,028Benefits paid
    
    
    (3,430
    )
    
    
    (2,640
    )
    
    
    (3,674
    )
    
    
    (2,836
    )Benefit obligationEnd of year
    
    
    59,688
    
    
    
    55,393
    
    
    
    60,657
    
    
    
    53,078Change in plan assetsPlan assetsBeginning of year
    
    
    44,973
    
    
    
    39,489
    
    
    
    
    
    
    
    Actual return on plan assets
    
    
    (15,294
    )
    
    
    2,750
    
    
    
    
    
    
    
    Employer contributions
    
    
    6,750
    
    
    
    5,373
    
    
    
    3,674
    
    
    
    2,836Benefits paid
    
    
    (3,430
    )
    
    
    (2,639
    )
    
    
    (3,674
    )
    
    
    (2,836
    )Plan assets at fair valueEnd of year
    
    
    32,999
    
    
    
    44,973
    
    
    
    
    
    
    
    Funded status of plansEnd of year
    
    $
    (26,689
    )
    
    $
    (10,420
    )
    
    $
    (60,657
    )
    
    $
    (53,078
    )
 PostretirementPension Benefits
    
    
    Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007Amounts recognized in the
Consolidated Balance SheetsNoncurrent assets
    
    $
    75
    
    
    $
    265
    
    
    $
    
    
    
    $
    Current liabilities
    
    
    
    
    
    
    
    
    
    
    (5,364
    )
    
    
    (5,188
    )Noncurrent liabilities
    
    
    (26,763
    )
    
    
    (10,685
    )
    
    
    (55,293
    )
    
    
    (47,890
    )Net amount recognized at December 31
    
    $
    (26,689
    )
    
    $
    (10,420
    )
    
    $
    (60,657
    )
    
    $
    (53,078
    )
   PostretirementPension Benefits
    
    
    Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007Net actuarial loss
    
    $
    18,113
    
    
    $
    5,972
    
    
    $
    6,067
    
    
    $
    7,142Prior service cost
    
    
    889
    
    
    
    889
    
    
    
    1,365
    
    
    
    1,589$
    19,002
    
    
    $
    6,861
    
    
    $
    7,432
    
    
    $
    8,731
  55




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##### Table of Contents



Pension Benefits
    
    
    Postretirement Benefits2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006Components of net periodic benefit costService cost
    
    $
    1,128
    
    
    $
    2,229
    
    
    $
    2,386
    
    
    $
    69
    
    
    $
    683
    
    
    $
    683Interest cost
    
    
    3,370
    
    
    
    2,771
    
    
    
    2,511
    
    
    
    3,231
    
    
    
    2,946
    
    
    
    2,843Settlement of labor dispute
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expected return on plan assets
    
    
    (3,758
    )
    
    
    (3,508
    )
    
    
    (2,161
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of unrecognized prior service cost
    
    
    
    
    
    
    712
    
    
    
    712
    
    
    
    224
    
    
    
    1,725
    
    
    
    1,648Amortization of unrecognized net loss
    
    
    27
    
    
    
    441
    
    
    
    558
    
    
    
    162
    
    
    
    374
    
    
    
    400Curtailment recognition
    
    
    
    
    
    
    5,526
    
    
    
    
    
    
    
    
    
    
    
    10,176
    
    
    
    Contractual benefit charge
    
    
    10,112
    
    
    
    8,952
    
    
    
    
    
    
    
    8,866
    
    
    
    3,028
    
    
    
    Total net periodic benefit cost
    
    $
    10,879
    
    
    $
    17,123
    
    
    $
    4,006
    
    
    $
    12,552
    
    
    $
    18,932
    
    
    $
    5,574
  2008
    
    
    2007Pension
    
    
    Postretirement
    
    
    Pension
    
    
    PostretirementBenefits
    
    
    Benefits
    
    
    Benefits
    
    
    BenefitsNet actuarial gain
    
    $
    12,168
    
    
    $
    (913
    )
    
    $
    (4,173
    )
    
    $
    (3,718
    )Amortization of net actuarial gain
    
    
    (27
    )
    
    
    (162
    )
    
    
    (441
    
    
    
    (374
    )Amortization of prior service cost
    
    
    
    
    
    
    (224
    )
    
    
    (712
    )
    
    
    (1,725
    )Curtailment  prior service cost
    
    
    
    
    
    
    
    
    
    
    (5,457
    )
    
    
    (10,137
    )Curtailment  net actuarial gain
    
    
    
    
    
    
    
    
    
    
    (122
    )
    
    
    Total recognized in accumulated
other comprehensive loss (gain)
    
    $
    12,141
    
    
    $
    (1,299
    )
    
    $
    (10,905
    )
    
    $
    (15,954
    )
  Pension
    
    PostretirementBenefits
    
    Benefits2009
    
    $
    5,427
    
    
    $
    5,4002010
    
    
    5,720
    
    
    
    5,3002011
    
    
    5,519
    
    
    
    5,3002012
    
    
    5,419
    
    
    
    5,1002013
    
    
    5,019
    
    
    
    5,000
  56




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##### Table of Contents



PostretirementPension Benefits
    
    Benefits2008
    
    2007
    
    2008
    
    2007Discount rate
    
    
    6.85
    %
    
    
    6.40
    %
    
    
    6.85
    %
    
    
    6.40
    %Rate of compensation increase
    
    
    3.00
    %
    
    
    3.00%-4.00
    %
  Pension Benefits
    
    Postretirement Benefits2008
    
    2007
    
    2006
    
    2008
    
    2007
    
    2006Discount rate
    
    
    6.40
    %
    
    
    5.90
    %
    
    
    5.75
    %
    
    
    6.40
    %
    
    
    5.90
    %
    
    
    5.75
    %Expected return on
plan assets
    
    
    8.25
    %
    
    
    8.25
    %
    
    
    8.25
    %
    
    
    
    
    
    
    
    
    
    
    Rate of
compensation
increase
    
    
    3.00%-4.00
    %
    
    
    3.00%-4.00
    %
    
    
    3.00%-4.00
    %
    
    
    
    
    
    
    
    
    
    
    
  2008
    
    2007
    
    2006Health care cost trend rate assigned for next year
    
    
    9.00
    %
    
    
    9.00
    %
    
    
    10.00
    %Rate to which cost trend is assumed to decline
    
    
    5.50
    %
    
    
    5.50
    %
    
    
    5.50
    %Year the rate reaches the ultimate trend rate
    
    
    2015
    
    
    
    2014
    
    
    
    2014
   Plan Assets at
    
    TargetDecember 31,
    
    Allocation2008
    
    2007
    
    2009Asset CategoryEquity securities
    
    
    56
    %
    
    
    72
    %
    
    
    70
    %Debt securities
    
    
    44
    %
    
    
    28
    %
    
    
    30
    %100
    %
    
    
    100
    %
    
    
    100
    %
   57




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##### Table of Contents



Note 12  Income Taxes
  Year Ended December 31,2008
    
    
    2007
    
    
    2006Current taxesFederal
    
    $
    238
    
    
    $
    21,772
    
    
    $
    62,433State
    
    
    1,296
    
    
    
    4,789
    
    
    
    10,5291,534
    
    
    
    26,561
    
    
    
    72,962Deferred taxesFederal
    
    
    1,271
    
    
    
    (10,377
    )
    
    
    1,935State
    
    
    (989
    )
    
    
    (1,534
    )
    
    
    633282
    
    
    
    (11,911
    )
    
    
    2,568Interest and penalties expense, gross of related tax effects
    
    
    635
    
    
    
    193
    
    
    
    Total
    
    $
    2,451
    
    
    $
    14,843
    
    
    $
    75,530
  Year Ended December 31,2008
    
    2007
    
    2006Statutory U.S. federal income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes, net of federal tax benefit
    
    
    (13.9
    )%
    
    
    1.9
    %
    
    
    4.2
    %Valuation allowance
    
    
    19.6
    %
    
    
    2.8
    %
    
    
    (0.7
    )%Goodwill amortization for tax reporting purposes
    
    
    (8.5
    )%
    
    
    (1.4
    )%
    
    
    (0.3
    )%Manufacturing deduction
    
    
    
    
    
    
    (3.4
    )%
    
    
    (1.0
    )%Nondeductible expenses
    
    
    0.6
    %
    
    
    
    
    
    
    Other
    
    
    1.9
    %
    
    
    1.0
    %
    
    
    (0.2
    )%Effective income tax rate
    
    
    34.7
    %
    
    
    35.9
    %
    
    
    37.0
    %
 58




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##### Table of Contents



December 31, 2008
    
    
    December 31, 2007Description
    
    Assets
    
    
    Liabilities
    
    
    Assets
    
    
    LiabilitiesAccrued post-retirement and pension benefits-long term
    
    $
    33,909
    
    
    $
    
    
    
    $
    22,338
    
    
    $
    Intangible assets
    
    
    533
    
    
    
    
    
    
    
    1,137
    
    
    
    Accrued workers compensation costs
    
    
    1,137
    
    
    
    
    
    
    
    1,083
    
    
    
    Accrued warranty costs
    
    
    5,302
    
    
    
    
    
    
    
    5,003
    
    
    
    Accrued bonuses
    
    
    130
    
    
    
    
    
    
    
    57
    
    
    
    Accrued vacation
    
    
    811
    
    
    
    
    
    
    
    915
    
    
    
    Accrued contingencies
    
    
    4,580
    
    
    
    
    
    
    
    2,784
    
    
    
    Accrued severance
    
    
    999
    
    
    
    
    
    
    
    787
    
    
    
    Inventory valuation
    
    
    1,665
    
    
    
    
    
    
    
    1,637
    
    
    
    Property, plant and equipment and railcars on
operating leases
    
    
    
    
    
    
    (8,316
    )
    
    
    
    
    
    
    (984
    )State net operating loss carryforwards
    
    
    3,230
    
    
    
    
    
    
    
    1,875
    
    
    
    Stock compensation expense
    
    
    961
    
    
    
    
    
    
    
    920
    
    
    
    Other
    
    
    1,944
    
    
    
    
    
    
    
    588
    
    
    
    55,202
    
    
    
    (8,316
    )
    
    
    39,124
    
    
    
    (984
    )Valuation allowance
    
    
    (7,037
    )
    
    
    
    
    
    
    (3,585
    )
    
    
    Deferred tax assets (liabilities)
    
    $
    48,165
    
    
    $
    (8,316
    )
    
    $
    35,539
    
    
    $
    (984
    )Increase (decrease) in valuation allowance
    
    $
    3,452
    
    
    
    
    
    
    $
    664
   2008
    
    2007Beginning of year balance
    
    $
    2,821
    
    
    $
    2,638Increases in prior period tax positions
    
    
    163
    
    
    
    Decreases in prior period tax positions
    
    
    
    
    
    
    (80
    )Increases in current period tax positions
    
    
    1,368
    
    
    
    263Settlements
    
    
    
    
    
    
    End of year balance
    
    $
    4,352
    
    
    $
    2,821
  59




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##### Table of Contents



Earliest YearOpen ToJurisdiction
    
    ExaminationU.S. Federal
    
    
    2003States:Pennsylvania
    
    
    2003Virginia
    
    
    2005Illinois
    
    
    2003
 Note 13  Stock-Based Compensation
 Share-Based Payment,
 Accounting for Stock Issued to Employees
   60




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##### Table of Contents



Stock Option Activity
  December 31,2008
    
    2007Weighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    ExerciseOptions
    
    Price
    
    Options
    
    PriceOutstanding
    
    (per share)
    
    Outstanding
    
    (per share)Outstanding at the beginning of the year
    
    
    64,968
    
    
    $
    23.76
    
    
    
    229,872
    
    
    $
    20.34Granted
    
    
    190,100
    
    
    
    30.47
    
    
    
    Exercised
    
    
    (54,968
    )
    
    
    19.00
    
    
    
    (109,936
    )
    
    
    19.00Forfeited or expired
    
    
    (40,860
    )
    
    
    30.47
    
    
    
    (54,968
    )
    
    
    19.00Outstanding at the end of the
year
    
    
    159,240
    
    
    $
    31.69
    
    
    
    64,968
    
    
    $
    23.76Exercisable at the end of the year
    
    
    10,000
    
    
    $
    49.90
    
    
    
    6,666
    
    
    $
    49.90
  Weighted-Average
    
    Weighted-Remaining
    
    AverageContractual
    
    Exercise
    
    AggregateOptions
    
    Term
    
    Price
    
    IntrinsicOutstanding
    
    (in years)
    
    (per share)
    
    ValueOptions outstanding
    
    
    159,240
    
    
    
    8.9
    
    
    $
    31.69
    
    
    $
    Vested or expected to vest
    
    
    159,240
    
    
    
    8.9
    
    
    $
    31.69
    
    
    $
    Options exercisable
    
    
    10,000
    
    
    
    6.9
    
    
    $
    49.90
    
    
    
    
  61




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##### Table of Contents



Nonvested Stock Activity
  December 31,2008
    
    2007Weighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    AverageGrant Date
    
    
    
    
    
    Grant DateFair Value
    
    
    
    
    
    Fair ValueShares
    
    (per share)
    
    Shares
    
    (per share)Nonvested at the beginning of the
year
    
    
    82,853
    
    
    $
    53.38
    
    
    
    25,021
    
    
    $
    51.53Granted
    
    
    48,547
    
    
    
    31.47
    
    
    
    72,940
    
    
    
    53.85Vested
    
    
    (46,186
    )
    
    
    52.51
    
    
    
    (12,442
    )
    
    
    53.18Forfeited or expired
    
    
    (6,440
    )
    
    
    30.47
    
    
    
    (2,666
    )
    
    
    49.90Nonvested at the end of the year
    
    
    78,774
    
    
    $
    42.25
    
    
    
    82,853
    
    
    $
    53.38Expected to vest
    
    
    78,774
    
    
    $
    42.25
    
    
    
    82,853
    
    
    $
    53.38
  Note 14  Risks and Contingencies
    62




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##### Table of Contents



Accounting for Contingencies
 Note 15  Other Commitments
   63




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##### Table of Contents



2009
    
    $
    2,0672010
    
    
    2,3082011
    
    
    2,3362012
    
    
    2,3722013
    
    
    2,315Thereafter
    
    
    3,452$
    14,850
       Note 16  Earnings Per Share
  Year Ended December 31,2008
    
    2007
    
    2006Weighted average
common shares
outstanding
    
    
    11,788,400
    
    
    
    12,115,712
    
    
    
    12,586,889Dilutive effect of
employee stock
options and
restricted share
awards
    
    
    44,732
    
    
    
    73,189
    
    
    
    198,126Weighted average
diluted common
shares outstanding
    
    
    11,833,132
    
    
    
    12,188,901
    
    
    
    12,785,015
 64




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##### Table of Contents



Note 17  Operating Segment and Concentration of Sales
  Year ended December 31,2008
    
    
    2007
    
    
    2006New railcar sales
    
    $
    712,432
    
    
    $
    800,542
    
    
    $
    1,435,391Used railcar sales
    
    
    14,368
    
    
    
    5,928
    
    
    
    Leasing revenues
    
    
    2,955
    
    
    
    39
    
    
    
    222Other sales
    
    
    16,635
    
    
    
    10,516
    
    
    
    9,187$
    746,390
    
    
    $
    817,025
    
    
    $
    1,444,800
  Note 18  Labor Agreements
    Note 19  Related Party Transactions
  65




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##### Table of Contents



Note 20  Selected Quarterly Financial Data (Unaudited)
  First Quarter
    
    Second Quarter
    
    Third Quarter
    
    Fourth Quarter(in thousands except for share and per share data)2008Sales
    
    $
    95,098
    
    
    $
    141,335
    
    
    $
    238,008
    
    
    $
    271,949Gross profit
    
    
    9,283
    
    
    
    6,629
    
    
    
    18,417
    
    
    
    21,340Net (loss) income attributable to
common stockholders(1)
    
    
    (10,216
    )
    
    
    (886
    )
    
    
    7,389
    
    
    
    8,327Net (loss) income per common share
attributable to common stockholders
basic(1)
    
    
    (0.87
    )
    
    
    (0.08
    )
    
    
    0.63
    
    
    
    0.70Net (loss) income per common share
attributable to common stockholders
diluted(1)
    
    $
    (0.87
    )
    
    $
    (0.08
    )
    
    $
    0.62
    
    
    $
    0.702007Sales
    
    $
    322,451
    
    
    $
    195,360
    
    
    $
    162,112
    
    
    $
    137,102Gross profit
    
    
    44,133
    
    
    
    24,693
    
    
    
    19,398
    
    
    
    15,140Net income (loss) attributable to
common stockholders(1)
    
    
    22,952
    
    
    
    11,453
    
    
    
    8,681
    
    
    
    (16,618
    )Net income (loss) per common share
attributable to common
stockholdersbasic(1)
    
    
    1.82
    
    
    
    0.94
    
    
    
    0.73
    
    
    
    (1.42
    )Net income (loss) per common share
attributable to common
stockholdersdiluted(1)
    
    $
    1.80
    
    
    $
    0.93
    
    
    $
    0.73
    
    
    $
    (1.42
    )
 
 (1)
    
    Results for the first quarter of 2008 and the fourth quarter 2007 include plant closure
charges of $18.3 million and $30.8 million, respectively (See Note 3 Plant Closure Charges
for a description of these actions). 
 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
  
 Item 9A. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Changes In Internal Controls
  66




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##### Table of Contents



Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
  
 Item 11. Executive Compensation.
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence.
  
 Item 14. Principal Accounting Fees and Services.
  
 PART IV
 
 Item 15. Exhibits, Financial Statement Schedules.
 Exhibits
 (a)
    
    Documents filed as part of this report:
 67




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##### Table of Contents



Managements Report on Internal Control Over Financial Reporting.Report of Independent Registered Public Accounting Firm.
 Consolidated Balance Sheets as of December 31, 2008 and 2007.Consolidated Statements of Income for the years ended December 31, 2008, 2007 and
2006.Consolidated Statements of Stockholders Equity for the years ended December 31,
2008, 2007 and 2006.Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007
and 2006.Notes to Consolidated Financial Statements.
  The following financial statement schedule is a part of this Form 10-K and should be read in
conjunction with our audited consolidated financial statements.Schedule II  Valuation and Qualifying AccountsAll other financial statement schedules are omitted because such schedules are not required
or the information required has been presented in the aforementioned financial statements.
  (b)
    
    The exhibits listed on the Exhibit Index to this Form 10-K are filed with this Form 10-K or
incorporated by reference as set forth below.(c)
    
    Additional Financial Statement SchedulesNone.
 68




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##### Table of Contents



SIGNATURES
  FREIGHTCAR AMERICA, INC.Date: March 13, 2009
    By:
    /s/    Christian B. RagotChristian B. Ragot, President andChief Executive Officer  Signature
    
    Title
    Date/s/ Christian B. Ragot
Christian B. Ragot
    
    President and Chief Executive Officer
(principal executive officer) and Director
    
    March 13, 2009/s/ Christopher L. Nagel
Christopher L. Nagel
    
    Vice President, Finance and Chief Financial
Officer (principal financial officer and
principal accounting officer)
    
    March 13, 2009/s/ Thomas M. Fitzpatrick
Thomas M. Fitzpatrick
    
    Chairman of the Board and
Director
    
    March 13, 2009/s/ James D. Cirar
    
    Director
    
    March 13, 2009James D. Cirar/s/ William D. Gehl
    
    Director
    
    March 13, 2009William D. Gehl/s/ Thomas A. Madden
    
    Director
    
    March 13, 2009Thomas A. Madden/s/ S. Carl Soderstrom
    
    Director
    
    March 13, 2009S. Carl Soderstrom/s/ Robert N. Tidball
    
    Director
    
    March 13, 2009Robert N. Tidball
 69




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##### Table of Contents



FreightCar America, Inc. and Subsidiaries
 
 Schedule II  Valuation and Qualifying Accounts
For the Years Ended December 31, 2008, 2007 and 2006
 Accounts Charged Offand Recoveries ofBalance at
    
    Additions Charged to
    
    Amounts PreviouslyBeginning of Period
    
    Costs and Expenses
    
    Written Off
    
    Balance at End of PeriodYear Ended December 31,
2008Allowance for
doubtful
accounts
    
    $
    223
    
    
    $
    107
    
    
    $
    
    
    
    $
    330Deferred tax
assets valuation
allowance
    
    
    3,585
    
    
    
    3,452
    
    
    
    
    
    
    
    7,037Inventory reserve
    
    
    1,177
    
    
    
    
    
    
    $
    (1,027
    )
    
    
    150Year Ended December 31,
2007Allowance for
doubtful
accounts
    
    $
    191
    
    
    $
    47
    
    
    $
    (15
    )
    
    $
    223Deferred tax
assets valuation
allowance
    
    
    2,921
    
    
    
    664
    
    
    
    
    
    
    
    3,585Inventory reserve
    
    
    
    
    
    
    1,951
    
    
    $
    (774
    )
    
    
    1,177Year Ended December 31,
2006Allowance for
doubtful
accounts
    
    $
    115
    
    
    $
    79
    
    
    $
    (3
    )
    
    $
    191Deferred tax
assets valuation
allowance
    
    
    3,691
    
    
    
    
    
    
    
    (770
    )
    
    
    2,921
 70




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##### Table of Contents



EXHIBIT INDEX
 3.1
    
    Certificate of Ownership and Merger of FreightCar America, Inc. into FCA Acquisition
Corp., as amended (incorporated by reference to Exhibit 3.1 to the Companys Current
Report on Form 8-K filed with the Commission on September 7, 2006).3.2
    
    Third Amended and Restated By-laws of FreightCar America, Inc. (incorporated by
reference to Exhibit 3.1 to the Companys Current Report filed on Form 8-K filed with
the Commission on September 28, 2007).4.1
    
    Form of Registration Rights Agreement, by and among FreightCar America, Inc., Hancock
Mezzanine Partners, L.P., John Hancock Life Insurance Company, Caravelle Investment
Fund, L.L.C., Trimaran Investments II, L.L.C., Camillo M. Santomero, III, and the
investors listed on Exhibit A attached thereto (incorporated by reference to Exhibit
4.3 to Registration Statement Nos. 333-123384 and 333-123875 filed with the Commission
on April 4, 2005).10.1
    
    Employment Agreement, dated as of January 14, 2009, by and between FreightCar America,
Inc. and Christopher L. Nagel (incorporated by reference to Exhibit 10.1 to the
Companys Current Report on Form 8-K filed with the Commission on December 17, 2008).10.2
    
    Employment Agreement, dated as of January 10, 2008, by and between FreightCar America,
Inc. and Nicholas J. Matthews.10.3
    
    Employment Agreement, dated as of January 3, 2007, between FreightCar America, Inc. and
Christian Ragot (incorporated by reference to Exhibit 10.9 to the Companys Annual
Report on Form 10-K for the year ended December 31, 2006 filed with the Commission on
March 13, 2007.10.4
    
    Amendment to employment agreement of Christian Ragot dated as of December 29, 2008.10.5
    
    Amendment to employment agreement of Laurence M. Trusdell dated as of December 29, 2008.10.6
    
    Employment Agreement, dated as of May 1, 2007, between FreightCar America, Inc. and
Charles Magolske.10.7
    
    Amendment to employment agreement of Charles J. Magolske dated as of December 29, 2008.10.8
    
    Amendment to employment agreement of Nicholas J. Matthews dated as of December 29, 2008.10.9
    
    FreightCar America, Inc. 2005 Long Term Incentive Plan (Restated to incorporate all
Amendments) (incorporated by reference to Appendix I to the Companys Proxy Statement
for the annual meeting of stockholders held on May 14, 2008 filed with the Commission
on April 8, 2008).10.10
    
    Form of Restricted Share Award Agreement for the Companys employees (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the
Commission on December 12, 2005).10.11
    
    Form of Restricted Share Award Agreement for the Companys independent directors
(incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K
filed with the Commission on January 27, 2006).10.12
    
    Form of Restricted Share Award Agreement for the Companys employees (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the
Commission on January 15, 2008).10.13
    
    Form of Stock Option Award Agreement for the Companys employees (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the
Commission on January 15, 2008).
 71




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##### Table of Contents



10.14
    
    Lease Agreement, dated as of December 20, 2004, by and between Norfolk Southern Railway
Company and Johnstown America Corporation (the Lease Agreement) (incorporated by
reference to Exhibit 10.27 to Registration Statement Nos. 333-123384 and 333-123875
filed with the Commission on April 4, 2005).*10.15
    
    Amendment to the Lease Agreement, dated as of December 1, 2005 (incorporated by
reference to Exhibit 10.11 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2005).*10.16
    
    Second Amendment to the Lease Agreement, dated as of February 1, 2008, by and between
Norfolk Southern Railway Company and Johnstown America Corporation (incorporated by
reference to Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2008 filed with the Commission on May 12, 2008).10.17
    
    Second Amended and Restated Credit Agreement, dated as of August 24, 2007, by and among
Johnstown America Corporation, Freight Car Services, Inc., JAC Operations, Inc., JAIX
Leasing Company and FreightCar Roanoke, Inc. as the Co-Borrowers, the lenders party
thereto, LaSalle Bank National Association, as Administrative Agent and Arranger, and
National City Business Credit, Inc., as Collateral Agent (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the Commission on
August 28, 2007).10.18
    
    First Amendment to Second Amended and Restated Credit Agreement, dated as of September
30, 2008, by and among Johnstown America Corporation, Freight Car Services, Inc., JAC
Operations, Inc., JAIX Leasing Company and FreightCar Roanoke, Inc., as the
Co-Borrowers, the lenders party thereto and LaSalle Bank National Association, as
Administrative Agent (incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K filed with the Commission on October 6, 2008).10.19
    
    Second Amendment to Second Amended and Restated Credit Agreement, dated as of March 11,
2009, by and among Johnstown America Corporation, Freight Car Services, Inc., JAC
Operations, Inc., JAIX Leasing Company and FreightCar Roanoke, Inc., as the
Co-Borrowers, the lenders party thereto and Bank of America, N.A., as successor by
merger to LaSalle Bank National Association, as Administrative Agent.10.20
    
    Guarantee Agreement, dated as of September 30, 2008, by JAIX Leasing Company in favor
of LaSalle Bank National Association, as Administrative Agent, for the benefit of the
lenders party thereto (incorporated by reference to Exhibit 10.2 to the Companys
Current Report on Form 8-K filed with the Commission on October 6, 2008).10.21
    
    Credit Agreement, dated as of September 30, 2008, by and among JAIX Leasing Company, as
Borrower, Bank of America, N.A., as Administrative Agent, the lenders party thereto and
Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager
(incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K
filed with the Commission on October 6, 2008).10.22
    
    First Amendment to Credit Agreement, dated as of March 11, 2009, by and among JAIX
Leasing Company, as Borrower, Bank of America, N.A., as Administrative Agent, the
lenders party thereto and Banc of America Securities LLC, as Sole Lead Arranger and
Sole Book Manager.10.23
    
    Guarantee Agreement, dated as of September 30, 2008, by FreightCar America, Inc. in
favor of Bank of America, N.A., as Administrative Agent, for the benefit of the lenders
party thereto (incorporated by reference to Exhibit 10.4 to the Companys Current
Report on Form 8-K filed with the Commission on October 6, 2008)
 72




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##### Table of Contents



10.24
    
    Management Incentive Plan of Johnstown America Corporation (incorporated by reference
to Exhibit 10.29 to Registration Statement Nos. 333-123384 and 333-123875 filed with
the Commission on March 17, 2005).10.25
    
    Consulting Agreement, dated as of June 3, 1999, between Rabbit Hill Holdings, Inc.,
Johnstown America Corporation, Freight Car Services, Inc., JAIX Leasing Company and JAC
Patent Company and James D. Cirar (incorporated by reference to Exhibit 10.10 to
Registration Statement Nos. 333-123384 and 333-123875 filed with the Commission on
March 17, 2005).10.26
    
    Amendment to Consulting Agreement, dated March 7, 2005, between FreightCar America,
Inc. and James D. Cirar (incorporated by reference to Exhibit 10.10.1 to Registration
Statement Nos. 333-123384 and 333-123875 filed with the Commission on March 17, 2005).10.27
    
    Form of Letter of Resignation (incorporated by reference to Exhibit 10.1 to the
Companys Current Report on Form 8-K filed with the Commission on December 19, 2006).10.28
    
    Letter of Resignation (incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K filed with the Commission on January 29, 2007).21
    
    Subsidiaries of FreightCar America, Inc.23
    
    Consent of Independent Registered Public Accounting Firm.31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
 
 *
    
    Confidential treatment has been granted for the redacted portions of this exhibit.
A complete copy of the exhibit, including the redacted portions, has been filed
separately with the Securities and Exchange Commission. 73