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UNITES 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, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 000-51728
 
 American Railcar Industries, Inc.
 (Exact name of Registrant as Specified in its Charter)
 
 Delaware
    
    43-1481791(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification Number)
 100 Clark Street
St. Charles, Missouri 63301
(Address of principal executive offices, including zip code)
 Telephone (636) 940-6000
 Securities registered pursuant to Section 12(b) of the Act: None
 Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01 per share
 o þ
 o þ
 o þ
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 o þ
  DOCUMENTS INCORPORATED BY REFERENCE




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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
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American Railcar Industries, Inc.
 Form 10  K
 TABLE OF CONTENTS
 PAGEPART IItem 1.
    
    
    
    Business
    
    
    5Item 1A.
    
    
    
    Risk Factors
    
    
    18Item 1B.
    
    
    
    Unresolved Staff Comments
    
    
    33Item 2.
    
    
    
    Properties
    
    
    33Item 3.
    
    
    
    Legal Proceedings
    
    
    34Item 4.
    
    
    
    Submission of Matters to a Vote of Security Holders
    
    
    34PART IIItem 5.
    
    
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    34Item 6.
    
    
    
    Selected Financial Data
    
    
    38Item 7.
    
    
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    39Item 7A.
    
    
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    60Item 8.
    
    
    
    Financial Statements and Supplementary Data
    
    
    61Item 9.
    
    
    
    Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    104Item 9A.
    
    
    
    Controls and Procedures
    
    
    104Item 9B.
    
    
    
    Other Information
    
    
    104PART IIIItem 10.
    
    
    
    Directors and Executive Officers of the Registrant
    
    
    104Item 11.
    
    
    
    Executive Compensation
    
    
    104Item 12.
    
    
    
    Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    104Item 13.
    
    
    
    Certain Relationships and Related Transactions
    
    
    104Item 14.
    
    
    
    Principal Accountant Fees and Services
    
    
    105PART IVItem 15.
    
    
    
    Exhibits, Financial Statement Schedules
    
    
    105SignaturesUnderwriting AgreementAgreement and Plan of MergerCertificate of Ownership and MergerSupplemental Executive Retirement PlanAmended and Restated Loan and Security AgreementRule 13a-15(e) and 15d-15(e) Certification of CEORule 13a-15(e) and 15d-15(e) Certification of CFOCertification Pursuant to 18 U.S.C. Section 1350
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AMERICAN
RAILCAR INDUSTRIES, INC
FORM 10-K
 
 PART I
 
 Item 1:
    
    Business
 INTRODUCTION
     ADDITIONAL INFORMATION
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® ® ®
 RECENT DEVELOPMENTS
     OUR HISTORY
  6




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OUR PRODUCTS AND SERVICES
  Manufacturing
  Covered hopper railcars. ®
  7




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®
  
    
    Plastic Pellet Railcars.These railcars are designed to transport, load and unload
plastic pellets under precise specifications to preserve the purity of the load. Slight
imperfections in the railcars transporting such goods or in the components that load and
unload them can ruin an entire load. If plastic pellets within a load become tainted, the
imperfection will likely persist during the conversion of the plastic pellets into
end-products. An example of such cargo would be food grade plastic pellets used in the
production of milk bottles and other food containers.
    
    Cement Railcars.Cement loads are heavier than many other loads of comparable volume,
and therefore cement railcars are smaller in size to compensate for the weight. As a
consequence, we can build more cement covered hopper railcars per day than we can any other
railcar we manufacture. Our cement railcars typically have capacities of 3,250 cubic feet
and are built with two lading compartments, compared to, for example, our plastic pellet
railcars, which typically have capacities of up to 6,224 cubic feet and are built with four
compartments.
    
    Pressureaide® Railcars.Our Pressureaide® railcar is targeted towards the bulk powder
markets. Pressureaide® railcars typically handle products such as clays, industrial and food
grade starches and flours. We build our Pressureaide® railcars in capacities ranging from
3,300 cubic feet to as large as 5,750 cubic feet. They operate with internal pressures up
to 14.5 pounds per square inch, which expedites unloading, and are equipped with several
safety devices, such as pressure relief valves, a rupture disc and a vacuum relief valve.
 Tank railcars.
 Component manufacturing.
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Railcar Services
  Railcar repair and refurbishment.
 Railcar fleet management.
 
    
    Mileage accounting.Some customers elect to receive mileage payments to offset freight
charges. Mileage is paid for loaded miles moved and calculated based on published rates. We
collect and audit the railroads mileage calculations to ensure our customers receive the
funds they are due.
    
    Rolling stock taxes.States and localities impose taxes on railcars calculated based
upon mileage reporting. We file the required tax forms with the state and local taxing
authorities. We audit the tax invoices received to determine whether the assessments are
accurate.
    
    Regulatory compliance.Our regulatory compliance support services help customers
maintain their railcar fleets in compliance with applicable regulations. As regulations
change, we help our customers manage the associated requirements and costs. We analyze new
fleets for which we provide fleet management services to identify areas of noncompliance
with applicable U.S. rail regulations and determine corrective actions.
    
    Engineering services.Our engineering support services help customers manage their
regulatory compliance and documentation. We provide procedures and consultation for railcar
repairs to address integrity and compliance.
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
    
    Field engineering services.We provide on-site evaluation and implementation of
significant engineering design changes for our customers.
    
    Online service access.Our web-based systems allow our customers to view information on
their railcar fleet online. The data we maintain includes mechanical and regulatory
information, historical costs and repair detail and the status of repairs.
    
    Maintenance planning.We forecast our customers railcar maintenance needs and suggest
schedules for repair service and refurbishment. This helps to ensure better fleet
utilization and more effective maintenance cycles.
 MANUFACTURING
     
    
    our ability to manufacture several types of railcars at our Paragould facility; for
example, the Paragould facility finished an order of centerbeam platform railcars, and
quickly converted to covered hopper railcar production upon completion of that order;
    
    our two parallel, vertically-tiered manufacturing tracks at Paragould allow workers on
these two tracks to share tools and equipment and allow multiple components of the same
railcar to be produced simultaneously;
    
    our welding machines, which are purposefully smaller than many other industrial welding
machines, allow our welders greater freedom of movement, which, in turn, we believe
increases production speed;
    
    our automated painting lance helps ensure proper interior coating in a single
application and we believe is faster and produces greater consistency than manual coating;
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
    
    our grit-blasting is conducted by automated, oscillating machinery, which we believe is
superior to and more efficient than alternative techniques, including static manual
blasting;
    
    our ability to rotate railcars 360 degrees eases and speeds specific steps in the
production line, such as complicated welding steps that would otherwise need to be
performed from difficult and possibly dangerous angles;
    
    our horizontal manufacturing lines at our Marmaduke facility allow individual tank
railcars to be taken in and out of the production line for additional attention, without
the need to stop the plants entire production process;
    
    our proprietary outer-jacket coiling process allows us to insulate our tank railcars at
our facility;
    
    our force curing technique helps eliminate impurities, smell and residue remaining in
railcars following the painting and lining steps, which we use primarily for railcars
designed to transport food products;
    
    our tracked loading and unloading points decrease the indirect labor required to move
raw materials and components into our facilities and finished products out of our
facilities; and
    
    our integrated painting, railcar truck assembly and fabrication shops eliminate downtime
in our production process.
  
    
    our decentralized management, including a salaried-to-hourly employee ratio of one to
14;
    
    our proactive safety program, which features weekly meetings of safety sub-committees on
which our hourly and salaried employees participate and voluntarily establish safety rules
that frequently exceed regulatory and industry minimum requirements; our safety program has
helped contribute to low incidences of accidents requiring lost production time at our
facilities; and
    
    our flexible workforce allows our employees to frequently move both between locations on
production lines, such as welding and small components fabricating positions, and among our
different manufacturing facilities.
 CUSTOMERS
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SALES AND MARKETING
    PRODUCT DEVELOPMENT
  12




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BACKLOG
      13




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2003
    
    
    2004
    
    
    2005Railcar backlog at start of period
    
    
    412
    
    
    
    2,287
    
    
    
    7,547New railcars delivered
    
    
    (2,557
    )
    
    
    (4,384
    )
    
    
    (6,875
    )New railcar orders
    
    
    4,432
    
    
    
    9,644
    
    
    
    13,838Railcar backlog at end of period
    
    
    2,287
    
    
    
    7,547
    
    
    
    14,510Estimated railcar backlog value
at end of period (in thousands)
1
    
    $
    129,850
    
    
    $
    494,107
    
    
    $
    1,074,408
 
 (1)
    
    Estimated backlog value reflects the total revenues expected to be attributable to the
backlog reported at the end of the particular period as if such backlog were converted to
actual revenues. 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
certain raw materials and railcar components or the cancellation or delay of railcar orders
that may occur.   SUPPLIERS AND MATERIALS
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Steel.
   Tank heads and floor sheet reinforcements.
 Castings.
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Wheels and brakes.
 COMPETITION
     INTELLECTUAL PROPERTY
  16




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EMPLOYEES
  REGULATION
   ENVIRONMENTAL MATTERS
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INSURANCE
  
 Item 1A:
    
    Risk Factors
 RISKS RELATED TO OUR BUSINESS
 Due in part to the highly cyclical nature of the railcar industry, we have incurred substantial
operating losses in the past and may experience declines in revenue and substantial operating
losses in the future.
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The cost of the raw materials that we use to manufacture railcars, particularly steel, are high and
these costs are expected to increase. Any increase in these costs or delivery delays of these raw
materials may materially adversely affect our business, financial condition and results of
operations.
   Fluctuations in the supply of components and raw materials we use in manufacturing railcars could
cause production delays or reductions in the number of railcars we manufacture, which could
materially adversely affect our business, financial condition and results of operations.
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We operate in a highly competitive industry and we may be unable to compete successfully, which
would materially adversely affect our results of operations.
  20




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Equipment failures, delays in deliveries or extensive damage to our facilities, particularly our
railcar manufacturing facilities in Paragould or Marmaduke, Arkansas, could lead to production or
service curtailments or shutdowns.
  We depend upon a small number of customers that represent a large percentage of our revenues. 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.
  If we lose any of our executive officers or key employees, or Carl C. Icahn, the chairman of our
board of directors, our operations and ability to manage the day-to-day aspects of our business may
be materially adversely affected.
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If we face labor shortages or increased labor costs our growth and results of operations could be
materially adversely affected.
 .
 The variable purchase patterns of our railcar customers and the timing of completion, delivery and
acceptance of customer orders may cause our revenues and income from operations to vary
substantially each quarter, which could result in significant fluctuations in our quarterly
results.
  Our relationships with our partners in our Ohio Castings joint venture may not be successful, which
could materially adversely affect our business.
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The level of our reported railcar backlog may not necessarily indicate what our future revenues
will be and our actual revenues may fall short of the estimated revenue value attributed to our
railcar backlog.
  As a public company we are required to comply with the reporting obligations of the Exchange Act
and will be required to comply with Section 404 of the Sarbanes-Oxley Act. If we fail to comply
with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act for
our fiscal year ending December 31, 2007, or if we fail to achieve and maintain adequate internal
controls over financial reporting, our business, results of operations and financial condition, and
investors confidence in us, could be materially adversely affected.
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Rapid growth is straining our operations and requiring us to incur costs to upgrade our
infrastructure.
  Companies affiliated with Carl C. Icahn are important suppliers and customers.
    Services being provided to us by ARL, an entity controlled by Carl C. Icahn, may not be sufficient
to meet our needs, which may require us to incur additional costs.
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As a public company, we may have reduced access to resources of, and benefits provided by, entities
affiliated with Carl C. Icahn.
  Lack of acceptance of our new railcar offerings by our customers could materially adversely affect
our business.
  Our production of new railcar product lines may not be initially profitable and may result in
financial losses.
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We may pursue acquisitions or joint ventures that involve inherent risks, any of which may cause us
not to realize anticipated benefits.
  If we are unable to protect our intellectual property and prevent its improper use by third
parties, our ability to compete in the market may be harmed.
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Our products could infringe the intellectual property rights of others, which may lead to
litigation that could itself be costly, could result in the payment of substantial damages or
royalties, and could prevent us from using technology that is essential to our products.
  
    
    cease selling or using any of our products that incorporate the asserted intellectual
property, which would adversely affect our revenue;
    
    pay substantial damages for past use of the asserted intellectual property;
    
    obtain a license from the holder of the asserted intellectual property, which license
may not be available on reasonable terms, if at all; and
    
    redesign or rename, in the case of trademark claims, our products to avoid infringing
the intellectual property rights of third parties, which may not be possible and could be
costly and time-consuming if it is possible to do.
  We are subject to a variety of environmental laws and regulations and the cost of complying, or our
failure to comply, with such requirements may have a material adverse effect on our business,
financial condition and results of operations.
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Changes in assumptions or investment performance of pension and other postretirement benefit plans
that we sponsor could materially adversely affect our financial condition and results of
operations.
   Our manufacturers warranties expose us to potentially significant claims.
  Increasing insurance claims and expenses could lower profitability and increase business risk.
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Covenants in our amended and restated revolving credit facility restrict our discretion in
operating our business and provide for certain minimum financial requirements.
  
    
    incur additional debt;
    
    redeem our capital stock;
    
    enter into certain transactions with affiliates;
    
    pay dividends and make other distributions;
    
    make investments and other restricted payments; and
    
    create liens.
  Some of our railcar services and component manufacturing employees belong to labor unions and
strikes or work stoppages by them or unions formed by some or all of our other employees in the
future could adversely affect our operations.
  Our failure to comply with regulations imposed by federal and foreign agencies could negatively
affect our financial results.
  Further consolidation of the railroad industry may materially adversely affect our business.
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Reductions in the availability of energy supplies or an increase in energy costs may increase our
operating costs.
  We may be required to reduce our inventory carrying values, which could materially adversely affect
our financial condition and results of operations.
  We may be required to reduce the value of our long-lived assets, which could materially adversely
affect our financial condition and results of operations.
  The price of our common stock is subject to volatility.
  Our stock price may decline due to sales of shares by Carl C. Icahn and other stockholders.
  30




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Carl C. Icahn exerts significant influence over us.
  
    
    any determination with respect to our business strategy and policies;
    
    mergers or other business combinations involving us;
    
    our acquisition or disposition of assets;
    
    future issuances of common stock or other securities by us;
    
    our incurrence of debt or obtaining other sources of financing; and
    
    the payment of dividends on our common stock.
  Mr. Icahns interests may conflict with the interest of our stockholders.
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We are a controlled company within the meaning of the Nasdaq Global Market rules and our
stockholders do not have the same protections afforded to shareholders of companies that are not
controlled companies and, therefore, are subject to all of the Nasdaq Global Market corporate
governance requirements.
  Payments of cash dividends on our common stock may be made only at the discretion of our board of
directors and Delaware law may restrict, and the agreements governing our amended and restated
revolving credit facility contain provisions that limit, our ability to pay dividends.
  As a public company, we incur increased costs that may place a strain on our resources and our
managements attention may be diverted from other business concerns.
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Item 1B: Unresolved Staff Comments
  
 Item 2: Properties
   Leased or
    
    LeaseLocation
    
    Use
    
    Size
    
    Owned
    
    Expiration DateParagould, Arkansas
    
    Covered hopper
railcar
manufacturing
    
    546,680 square feet
     on 82 acres
    
    Owned
    
    Marmaduke, Arkansas
    
    Tank railcar
manufacturing
    
    441,075 square feet
     on 55 acres
    
    Owned
    
    St. Charles,
Missouri
    
    Aluminum foundry
and machining
    
    128,626 square feet
     on 3 acres
    
    Leased
    
    February 28, 2011Jackson, Missouri
    
    Railcar components
manufacturing
    
    110,240 square feet
     on 8 acres
    
    Owned
    
    Kennett, Missouri
    
    Covered hopper and
tank railcar
subassembly and
small components
manufacturing
    
    78,375 square feet
     on 9 acres
    
    Owned
    
    Longview, Texas
    
    Steel foundry and
machining
    
    155,030 square feet
on 31 acres
    
    Owned
    
    
  33




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Item 3: Legal Proceedings
   
 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
 Market Information
   Dividend Policy and Restrictions
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Securities Authorized for Issuance Under Equity Compensation Plans
 Number of securitiesNumber of
    
    
    
    
    
    
    remainingsecurities to
    
    
    
    
    
    
    available forbe issued
    
    
    
    
    
    
    future issuanceupon
    
    
    Weighted-average
    
    
    under equityexercise of
    
    
    exercise price of
    
    
    compensationoutstanding
    
    
    outstanding
    
    
    plans (excludingoptions, warrants
    
    
    options, warrants
    
    
    securities reflectedPlan Category
    
    and rights
    
    
    and rights
    
    
    in column (a))(a)
    
    
    (b)
    
    
    (c)Equity compensation
plans approved by
security holders
    
    
    
    
    
    
    
    
    
    
    1,000,000Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    1,000,000
 2005 Equity Incentive Plan
 Individual Compensation Arrangement with James J. Unger.
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Recent Sales of Unregistered Securities
  (1)
    
    In June 2003 Vegas Financial Corp., a company beneficially owned and controlled by Carl C.
Icahn, our principal beneficial stockholder and the chairman of our board of directors,
invested $10.0 million for 10,000 shares of our payment-in-kind preferred stock, which we
refer to as our PIK preferred stock.(2)
    
    During the period 31, 2002 to December 31, 2003, we issued to Vegas Financial Corp., the sole
owner of our PIK preferred stock, 19,438.44 shares of PIK preferred stock as dividend on the
PIK Preferred Stock.(3)
    
    In July 2004, Vegas Financial Corp. converted all of its PIK preferred stock, consisting of
95,517.04 shares of PIK preferred stock and representing all of the shares of PIK preferred
stock then outstanding and dividend accrued thereon, into 96,171 shares of our new preferred
stock. The PIK preferred stock was valued at the liquidation preference of 95.6 million plus
accrued and unpaid dividends of 0.7 million on such PIK preferred stock converted. At that
time Vegas Financial Corp. also invested $67.5 million for an additional 67,500 shares of our
new preferred stock.(4)
    
    In July 2004, Hopper Investments LLC, a company beneficially owned and controlled by Mr.
Icahn, invested $42.5 million for 1,818,976 shares of our common stock.(5)
    
    In July 2004, we issued ACF Industries, Incorporated 2,000 shares of our new preferred stock
in exchange for ACF Industries, Incorporated transferring certain assets to us. The assets
were valued at $2 million equaling the liquidation preference for the new preferred stock
issued. The assets so transferred to us were subsequently transferred to American Railcar
Leasing, LLC.(6)
    
    In December 2004, we issued 32,500 shares of our new preferred stock to Shippers Second LLC,
the assets were valued at $32.5 million equaling the liquidation preference for the new
preferred stock issued. The assets so transferred to us were subsequently transferred to
American Railcar Leasing LLC.(7)
    
    In July 2004, American Railcar Leasing LLC issued 40,000 B-units of American Railcar Leasing
LLC to ACF Industries, Incorporated and its subsidiaries in consideration of the transfer of
assets to American Railcar Leasing LLC. The B-units of American Railcar Leasing LLC were
convertible into shares of our new preferred stock. On June 30, 2005, the terms of the B-Units
were modified, among other things, to eliminate this conversion feature. We did not issue any
shares of our capital stock in connection with these transactions.
  Use of Proceeds from offering
  36




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Redemption of all outstanding shares of preferred stock
    
    $
    93.9Repayment of notes due to affiliates
    
    
    20.5Repayment of all industrial revenue bonds
    
    
    8.6Repayment of amounts outstanding under revolving credit facility
    
    
    32.3Professional fees
    
    
    1.0Cash and temporary investment for working capital and general corporate purposes
    
    
    35.7Total uses
    
    $
    192.0
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Item 6: Selected Financial Data.
 Years ended December 31,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005(in thousands, except per share amounts)Consolidated statement of operations data:RevenuesManufacturing operations (1)
    
    $
    181,438
    
    
    $
    138,441
    
    
    $
    188,119
    
    
    $
    316,432
    
    
    $
    564,513Railcar services (2)
    
    
    32,703
    
    
    
    30,387
    
    
    
    29,875
    
    
    
    38,624
    
    
    
    43,647Total Revenues
    
    
    214,141
    
    
    
    168,828
    
    
    
    217,994
    
    
    
    355,056
    
    
    
    608,160Cost of goods soldCost of manufacturing operations (3)
    
    
    169,952
    
    
    
    134,363
    
    
    
    174,629
    
    
    
    306,283
    
    
    
    518,063Cost of railcar services (4)
    
    
    33,255
    
    
    
    29,533
    
    
    
    29,762
    
    
    
    34,473
    
    
    
    38,041Total cost of goods sold
    
    
    203,207
    
    
    
    163,896
    
    
    
    204,391
    
    
    
    340,756
    
    
    
    556,104Gross Profit
    
    
    10,934
    
    
    
    4,932
    
    
    
    13,603
    
    
    
    14,300
    
    
    
    52,056Selling, administrative and other (5)
    
    
    9,219
    
    
    
    9,505
    
    
    
    10,340
    
    
    
    10,334
    
    
    
    25,354Operating earnings (loss)
    
    
    1,715
    
    
    
    (4,573
    )
    
    
    3,263
    
    
    
    3,966
    
    
    
    26,702Interest income (6)
    
    
    4,770
    
    
    
    3,619
    
    
    
    3,161
    
    
    
    4,422
    
    
    
    1,658Interest expense (7)
    
    
    (9,525
    )
    
    
    (4,853
    )
    
    
    (3,616
    )
    
    
    (3,667
    )
    
    
    (4,846
    )Income (loss) from joint venture
    
    
    
    
    
    
    
    
    
    
    (604
    )
    
    
    (609
    )
    
    
    610Earnings (loss) before income tax
(benefit) expense
    
    
    (3,040
    )
    
    
    (5,807
    )
    
    
    2,204
    
    
    
    4,112
    
    
    
    24,124Income tax (benefit) expense
    
    
    (1,074
    )
    
    
    (1,894
    )
    
    
    1,139
    
    
    
    2,191
    
    
    
    9,356Net earnings (loss)
    
    $
    (1,966
    )
    
    $
    (3,913
    )
    
    $
    1,065
    
    
    $
    1,921
    
    
    $
    14,768Less preferred dividends
    
    
    (3,070
    )
    
    
    (7,139
    )
    
    
    (9,690
    )
    
    
    (13,241
    )
    
    
    (13,251
    )Net earnings (loss) available to common
shareholders
    
    $
    (5,036
    )
    
    $
    (11,052
    )
    
    $
    (8,625
    )
    
    $
    (11,320
    )
    
    $
    1,517Weighted average shares outstanding basic
and diluted (8)
    
    
    9,328
    
    
    
    9,328
    
    
    
    9,328
    
    
    
    10,140
    
    
    
    11,147Net earnings (loss) per common share
basic and diluted (8)
    
    $
    (0.54
    )
    
    $
    (1.18
    )
    
    $
    (0.92
    )
    
    $
    (1.12
    )
    
    $
    0.14Consolidated balance sheet data (at
period end):Cash and cash equivalents
    
    $
    1,476
    
    
    $
    183
    
    
    $
    65
    
    
    $
    6,943
    
    
    $
    28,692Net working capital
    
    
    35,172
    
    
    
    16,065
    
    
    
    15,084
    
    
    
    46,565
    
    
    
    25,768Net property, plant and equipment
    
    
    81,090
    
    
    
    75,746
    
    
    
    71,230
    
    
    
    76,951
    
    
    
    92,985Total assets
    
    
    191,229
    
    
    
    187,590
    
    
    
    196,508
    
    
    
    356,840
    
    
    
    268,580Total liabilities
    
    
    113,596
    
    
    
    98,463
    
    
    
    190,704
    
    
    
    221,817
    
    
    
    161,820Total shareholders equity
    
    $
    77,633
    
    
    $
    89,127
    
    
    $
    5,804
    
    
    $
    135,023
    
    
    $
    106,760Consolidated cash flow data:Net cash provided by (used in) operating
activities
    
    $
    13,434
    
    
    $
    10,611
    
    
    $
    (1,639
    )
    
    $
    (17,082
    )
    
    $
    41,571Net cash used in investing activities
    
    
    (2,189
    )
    
    
    (535
    )
    
    
    (2,251
    )
    
    
    (11,037
    )
    
    
    (22,580
    )Net cash provided by (used in ) financing
activities
    
    $
    (12,111
    )
    
    $
    (11,369
    )
    
    $
    3,772
    
    
    $
    34,997
    
    
    $
    2,758
 
 (1)
    
    Includes revenues from transactions with affiliates of $ $64.8 million, $63.6 million, $62.9
million, $64.4 million, and $47.2 million in 2001, 2002, 2003, 2004 and 2005, respectively. 38




---



##### Table of Contents



(2)
    
    Includes revenues from transactions with affiliates of $8.6 million, $12.8 million, $11.0
million, $19.4 million, and $20.6 million in 2001, 2002, 2003, 2004 and 2005, respectively.(3)
    
    Including costs from transactions with affiliates of $57.6 million, $55.7 million, $54.4
million, $59.1 million, and $44.1 million in 2001, 2002, 2003, 2004 and 2005, respectively.(4)
    
    Includes costs from transactions with affiliates of $7.2 million, $12.2 million, $10.1
million, $15.5 million, and $16.2 million in 2001, 2002, 2003, 2004 and 2005, respectively.
2005 also includes $2.0 million charge for pension settlement.(5)
    
    Includes $8.9 million charge for pension settlement.(6)
    
    Includes interest income from affiliates of $4.3 million, $3.4 million, $3.0 million, $3.9
million, and $1.0 million in 2001, 2002, 2003, 2004 and 2005, respectively.(7)
    
    Includes interest expense to affiliates of $0.2 million in 2001, $1.5 million in 2004 and
$2.1 million in 2005.(8)
    
    Share and per share data have been restated to give effect to the merger, as discussed in
Note 17 of the Companys Financial Statements. 
 Item 7: Managements Discussion and Analysis of Financial Condition and Results of Operations
 You should read the following discussion in conjunction with Selected consolidated financial data
and our consolidated financial statements and related notes included in this annual report. 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 and as
a result of the factors we describe under Risk Factors and elsewhere in this annual report. See
Special note regarding forward-looking statements appearing at the beginning of this report and
Risk Factors set forth in Item 1A of this report.
 OVERVIEW
    Manufacturing operations
   39




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##### Table of Contents



Year ended December 31,2003
    
    2004
    
    2005Covered hoppers
    
    
    1,343
    
    
    
    1,507
    
    
    
    4,240Centerbeam platform
    
    
    5
    
    
    
    1,240
    
    
    
    785Total Paragould railcar deliveries
    
    
    1,348
    
    
    
    2,747
    
    
    
    5,025
   Year ended December 31,2003
    
    2004
    
    2005Pressure tanks
    
    
    277
    
    
    
    322
    
    
    
    417Non-pressure tanks
    
    
    932
    
    
    
    1,315
    
    
    
    1,433Total Marmaduke railcar deliveries
    
    
    1,209
    
    
    
    1,637
    
    
    
    1,850
  Railcar services
  40




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##### Table of Contents



ARL FORMATION AND EXCHANGE
  FACTORS AFFECTING OPERATING RESULTS
  Cyclicality of the railcar industry.
 Customer concentration.
 41




---



##### Table of Contents



Revenues from affiliates.
 Raw material costs.
  Component supply constraints.
 42




---



##### Table of Contents



Completion of our centerbeam platform railcar contract.
 OUTLOOK
  BACKLOG
  43




---



##### Table of Contents



Year ended December 31,2003
    
    
    2004
    
    
    2005Railcar backlog at start of period
    
    
    412
    
    
    
    2,287
    
    
    
    7,547New railcars delivered
    
    
    (2,557
    )
    
    
    (4,384
    )
    
    
    (6,875
    )New railcar orders
    
    
    4,432
    
    
    
    9,644
    
    
    
    13,838Railcar backlog at end of period
    
    
    2,287
    
    
    
    7,547
    
    
    
    14,510Estimated railcar backlog value
at end of period (in thousands)
    
    $
    129,850
    
    
    $
    494,107
    
    
    $
    1,074,408
    44




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##### Table of Contents



CHARGES AND COSTS ASSOCIATED WITH OUR PUBLIC OFFERING
  ACF employee benefit plans
     Equity incentive awards
  45




---



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Other additional expenses
   RESULTS OF OPERATIONS
  46




---



##### Table of Contents



2003
    
    
    2004
    
    
    2005RevenuesManufacturing operations
    
    
    86.3
    %
    
    
    89.1
    %
    
    
    92.8
    %Railcar services
    
    
    13.7
    %
    
    
    10.9
    %
    
    
    7.2
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods soldCost of manufacturing
    
    
    80.1
    %
    
    
    86.3
    %
    
    
    85.2
    %Cost of railcar services
    
    
    13.7
    %
    
    
    9.7
    %
    
    
    6.3
    %Total cost of goods sold
    
    
    93.8
    %
    
    
    96.0
    %
    
    
    91.5
    %Gross profit
    
    
    6.2
    %
    
    
    4.0
    %
    
    
    8.6
    %Pension settlement expense
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    1.8
    %Selling, administrative and other
expenses
    
    
    4.7
    %
    
    
    2.9
    %
    
    
    4.2
    %Earnings from operations
    
    
    1.5
    %
    
    
    1.1
    %
    
    
    4.4
    %Interest income
    
    
    1.5
    %
    
    
    1.2
    %
    
    
    0.3
    %Interest expense
    
    
    (1.7
    %)
    
    
    (1.0
    %)
    
    
    (0.8
    %)Income (loss) from joint venture
    
    
    (0.3
    %)
    
    
    (0.2
    %)
    
    
    0.1
    %Earnings before income tax expense
    
    
    1.0
    %
    
    
    1.1
    %
    
    
    4.0
    %Income tax expense
    
    
    0.5
    %
    
    
    0.6
    %
    
    
    1.5
    %Net earnings
    
    
    0.5
    %
    
    
    0.5
    %
    
    
    2.5
    %
 Comparison of the year ended December 31, 2005 to the year ended December 31, 2004
  Revenues
    47




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Gross profit
      Pension Settlement Expense
  Selling, administrative and other expenses
  48




---



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Interest expense and interest income
  Income tax expense
  Comparison of the year ended December 31, 2004 to the year ended December 31, 2003
  Revenues
    49




---



##### Table of Contents



Gross profit
    Selling, administrative and other expenses
  Interest expense and interest income
  Income tax expense
  LIQUIDITY AND CAPITAL RESOURCES
  50




---



##### Table of Contents



Redemption of all outstanding shares of preferred stock
    
    $
    93.9Repayment of notes due to affiliates
    
    
    20.5Repayment of all industrial revenue bonds
    
    
    8.6Repayment of amounts outstanding under revolving credit facility
    
    
    32.3Professional fees
    
    
    1.0Cash and temporary investment for working capital and general corporate purposes
    
    
    35.7Total uses
    
    $
    192.0
 Outstanding debt
 Revolving credit facility.
  
    
    Maximum borrowing.Our amended and restated revolving credit facility provides for a maximum borrowing of the lesser of
(a) $75 million or (b) 85% of the eligible accounts receivables plus 65% of the eligible raw materials and finished goods
inventory. Eligible receivables include only accounts receivable to our customers in the United States or Canada arising
from sales in the ordinary course of business with non-affiliates. In addition, the amended and restated revolving credit
facility includes a $15.0 million capital expenditure sub-facility that is based on 80% of the costs related to capital
projects we may undertake;
    
    Term.The amended and restated revolving credit facility expires in January 2009;
    
    Interest rate and fees.Borrowings bear an interest rate of a base rate less 0.5%, where the base rate is the higher of
the highest prime, base or equivalent rate of interest published by the administrative agent, or the published annualized
rate for 90-day dealer commercial paper published in the Wall Street Journal. In addition, we are granted a 1 month, 2
month or 3 month LIBOR rate plus 1.5%. We are required to pay a closing fee of $0.2 million and an unused line fee of
0.375% per year on the unused portion of our amended and restated revolving credit facility;
    
    Collateral.Our receivables, inventory and a pledged deposit account, together with assets we purchase with the proceeds
from the capital expenditure sub-facility, serve as collateral under the amended and restated revolving credit facility and
the capital expenditure sub-facility. In addition, we are required to maintain one or more blocked accounts to which all
our collections would be remitted. Under the amended and restated revolving credit facility, the types of collections that
are subject to the blocked account consist of all collections including all cash, funds, checks, notes, instruments, any
other form of remittance tendered by account debtors in respect of payment of our receivables and any other payments
received by us with respect to any collateral. If the funds which we can draw under the amended and restated revolving
credit facility fall under $5 million, the proceeds
 51




---



##### Table of Contents



in the blocked accounts are transferred to the administrative agent and
the administrative agent is required to apply all such proceeds to our loan account with the administrative agent,
conditional upon final collection, effecting a payment of any obligations that are outstanding at such time. The interest
that the administrative agent holds in such proceeds (until such time as they are applied to the obligations) is in the
nature of a collateral security interest. Upon termination of the administrative agents security interests in such
proceeds in accordance with applicable laws generally governing the termination of security interests and bank deposits,
the administrative agent returns to us any proceeds it holds after satisfaction of existing or contingent obligations owed
to the administrative agent and the other lenders. We may borrow, repay, and reborrow revolving credit loans in accordance
with the terms of the amended and restated revolving credit facility;
    
    Financial covenants.Our amended and restated revolving credit facility requires us to meet an adjusted fixed charge
coverage ratio of not less than 1.2 to 1.0 on a quarterly and/or annual basis and a leverage ratio calculated based on the
outstanding amount of indebtedness to EBITDA, as defined in the amended and restated revolving credit facility, of not
greater than 4.0 to 1.0 on a quarterly and/or annual basis; and
    
    Negative covenants.Our amended and restated revolving credit facility includes certain limitations on, among other
things, our ability to incur additional indebtedness, modify our current governing documents, sell or dispose of
collateral, grant credit and declare or pay dividends or make distributions on common stock or other equity securities. The
limitation on certain of the actions addressed by the amended and restated revolving credit facility is in the nature of a
right in favor of the administrative agent and our lenders to accelerate all of
our obligations under the amended and restated credit facility, a demand right, that is
triggered by certain actions, rather than in the nature of a negative covenant by which we
contractually agree not to take such actions. Included among the actions that trigger a demand
right are certain actions to modify governing documents, sell or dispose of collateral, grant
credit, incur indebtedness, and make dividends and distributions. An incurrence of indebtedness
triggers a demand right if it causes the adjusted ratio of our indebtedness to EBITDA, as
defined in the amended and restated revolving credit facility, to be greater than 4.0 to 1.0.
The direct or indirect payment of dividends or distributions, or purchase, redemption, or
retirement of capital stock, equity interests, options or rights to purchase capital stock or
equity interests, or payments to sinking or analogous funds, triggers a demand right if it
causes the adjusted fixed charge coverage ratio to be less than 1.2 to 1.0 or the ratio of
adjusted indebtedness to EBITDA to be greater than 4.0 to 1.0, each on a quarterly and/or annual
basis, as defined in the amended and restated revolving credit facility.
 Cash flows
  Year ended December 31,2005Cash flowsNet cash provided by (used in):Operating activities
    
    $
    41,571Investing activities
    
    
    (22,580
    )Financing activities
    
    
    2,758
 Operating activities.
  52




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##### Table of Contents



Investing activities.
 Financing activities.
 Capital expenditures.
   53




---



##### Table of Contents



Dividends.
 Contractual obligations
  54




---



##### Table of Contents



Payments due by PeriodContractual Obligations
    
    Total
    
    
    1 year
    
    
    2-3 years
    
    
    4-5 years
    
    
    After 5 years(in thousands)Long-Term Debt Obligations 1
    
    $
    40,370
    
    
    
    40,370
    
    
    
    
    
    
    
    
    
    
    
    Notes payable to affiliates
    
    $
    19,000
    
    
    
    19,000
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations 2
    
    $
    4,970
    
    
    
    2,804
    
    
    
    1,940
    
    
    
    226
    
    
    
    Purchase Obligations
    
    $
    67,629
    
    
    
    16,000
    
    
    
    51,629
    
    
    
    
    
    
    
    Pension Funding
    
    $
    4,936
    
    
    
    1,510
    
    
    
    3,036
    
    
    
    390Total
    
    $
    131,969
    
    
    $
    78,174
    
    
    $
    53,569
    
    
    $
    226
    
    
    $
    
 
 (1)
    
    Our amended and restated revolving credit facility, permits us to borrow $75.0 million
and expires in three years.(2)
    
    The operating lease commitment includes the future minimum rental payments required
under non-cancelable operating leases for property and equipment leased by us.
    CRITICAL ACCOUNTING POLICIES
  Revenue recognition
  55




---



##### Table of Contents



Accounting for Shipping and Handling Fees and Costs
 Accounts receivable
  Product warranties
  Inventory
  Long-lived assets
 Accounting for the Impairment or
Disposal of Long-Lived Assets
 56




---



##### Table of Contents



Income taxes
   Accounting for expenses paid by affiliate
  Fair value of financial instruments
  Contingencies and litigation
 Accounting for
Contingencies
 
    
    available information indicates it is probable that the loss has been or will be
incurred, given the likelihood of the uncertain future events; and
    
    the amount of the loss can be reasonably estimated.
 57




---



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58




---



##### Table of Contents



OFF BALANCE SHEET ARRANGEMENTS
  RECENT ACCOUNTING PRONOUNCEMENTS
 Inventory Costs-An Amendment of ARB No. 43 Chapter 4
 Share-Based Payment Accounting for Stock-Based
Compensation Accounting for Stock Issued to Employees
 Share-Based Payment
  Accounting for Asset Retirement Obligations
 59




---



##### Table of Contents



Accounting Changes and Error Corrections, a replacement
of APB Opinion No. 20 and FAS 3 (FAS 154)
 
 Item 7A: Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
    60




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##### Table of Contents



Item 8: Financial Statements and Supplementary Data
   PageAudited Consolidated Financial Statements of American Railcar Industries, Inc.Report of Grant Thornton LLP Independent Registered Public Accounting Firm
    
    
    62Report of KPMG LLP Independent Registered Public Accounting Firm
    
    
    63Consolidated Balance Sheets as of December 31, 2004 and 2005
    
    
    64Consolidated Statements of Operations for the years ended December 31, 2003, 2004 and 2005
    
    
    66Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2004 and 2005
    
    
    67Consolidated Statement of Shareholders Equity and Comprehensive Income (Loss) for the
years ended December 31, 2003, 2004 and 2005
    
    
    68Notes to Consolidated Financial Statements
    
    
    69Audited Consolidated Financial Statements of Ohio Castings Company, LLCReport of Grant Thornton LLP Independent Registered Public Accounting Firm
    
    
    94Consolidated Balance Sheets as of August 31, 2003, 2004 and 2005
    
    
    95Consolidated Statements of Operations for the period from June 20, 2003 to August 31,
2003 and for the years ended August 31, 2004 and 2005
    
    
    96Consolidated Statements of Cash Flows for the period from June 20, 2003 to August 31,
2003 and for the years ended August 31, 2004 and 2005
    
    
    97Consolidated Statements of Members Equity for the period from June 20, 2003 to August
31, 2003 and for the years ended August 31, 2004 and 2005
    
    
    98Notes to Consolidated Financial Statements
    
    
    99
 61




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 62




---



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      63




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS
  Year EndedDecember 31,2004
    
    
    2005AssetsCurrent AssetsCash and cash equivalents
    
    $
    6,943
    
    
    $
    28,692Accounts receivable, net
    
    
    25,183
    
    
    
    38,273Inventories, net
    
    
    73,925
    
    
    
    88,001Amounts due from affiliates  current
    
    
    
    
    
    
    5,110Prepaid expenses
    
    
    244
    
    
    
    2,523Deferred tax asset
    
    
    2,065
    
    
    
    1,967Total current assets
    
    
    108,360
    
    
    
    164,566Property, plant and equipmentBuildings
    
    
    66,350
    
    
    
    84,255Machinery and equipment
    
    
    58,816
    
    
    
    68,187125,166
    
    
    
    152,442Less accumulated depreciation
    
    
    58,878
    
    
    
    65,39866,288
    
    
    
    87,044Construction in process
    
    
    8,686
    
    
    
    3,759Land
    
    
    1,977
    
    
    
    2,182Net property, plant and equipment
    
    
    76,951
    
    
    
    92,985Notes receivable from affiliates
    
    
    165,000
    
    
    
    Deferred tax asset
    
    
    663
    
    
    
    Debt issuance costs and other assets
    
    
    615
    
    
    
    591Deferred offering costs
    
    
    
    
    
    
    4,860Investment in joint venture
    
    
    5,251
    
    
    
    5,578Total assets
    
    $
    356,840
    
    
    $
    268,580
 64




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##### Table of Contents



CONSOLIDATED BALANCE SHEETS  Continued
  Year EndedDecember 31,2004
    
    
    2005Liabilities and Shareholders EquityCurrent liabilities:Current portion of long-term debt
    
    $
    1,334
    
    
    $
    33,294Accounts payable
    
    
    22,800
    
    
    
    55,793Accrued expenses and taxes
    
    
    4,415
    
    
    
    7,675Accrued compensation
    
    
    5,654
    
    
    
    7,243Accrued dividends
    
    
    3,455
    
    
    
    11,336Note payable to affiliate  current
    
    
    19,000
    
    
    
    19,000Other amounts due to affiliates  current
    
    
    5,137
    
    
    
    4,457Total current liabilities
    
    
    61,795
    
    
    
    138,798Long  term debt, net of current portion
    
    
    8,517
    
    
    
    7,076Note payable to affiliate  noncurrent
    
    
    130,000
    
    
    
    Other amounts due to affiliates  noncurrent
    
    
    17,109
    
    
    
    Deffered tax liability
    
    
    
    
    
    
    5,364Pension and post-retirement liabilities
    
    
    1,602
    
    
    
    10,522Other liabilities
    
    
    2,793
    
    
    
    59Mandatory redeemable preferred stock, stated value $1,000, 99,000
shares authorized, 1 share issued and outstanding at December 31,
2004 and 2005, respectively
    
    
    1
    
    
    
    1Total Liabilities
    
    
    221,817
    
    
    
    161,820Commitments and contingencies
    
    
    
    
    
    
    Shareholders equity:New Preferred Stock, $.01 par value per share, stated value $1,000
per share, 500,000 shares authorized, 111,685 and 82,055 shares
issued and outstanding at December 31, 2004 and 2005, respectively
    
    
    111,685
    
    
    
    82,055Common stock, $.01 par value, 50,000,000 shares authorized,
11,147,059 shares issued and outstanding at December 31, 2004 and
2005
    
    
    111
    
    
    
    111Additional paid-in capital
    
    
    41,249
    
    
    
    41,667Accumulated deficit
    
    
    (16,959
    )
    
    
    (15,442
    )Accumulated other comprehensive loss
    
    
    (1,063
    )
    
    
    (1,631
    )Total shareholders equity
    
    
    135,023
    
    
    
    106,760Total Liabilities and shareholders equity
    
    $
    356,840
    
    
    $
    268,580
  65




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CONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended December 31,2003
    
    
    2004
    
    
    2005Revenues:Manufacturing operations (including revenues from affiliates of
$62,882, $64,372 and $47,195 in 2003, 2004 and 2005,
respectively)
    
    $
    188,119
    
    
    $
    316,432
    
    
    $
    564,513Railcar services (including revenues from affiliates of $11,012,
$19,429 and $20,645 in 2003, 2004 and 2005, respectively)
    
    
    29,875
    
    
    
    38,624
    
    
    
    43,647Total revenues
    
    
    217,994
    
    
    
    355,056
    
    
    
    608,160Cost of goods sold:Manufacturing operations (including costs related to
affiliates of $54,394, $59,052 and $44,077 in 2003, 2004
and 2005, respectively)
    
    
    174,629
    
    
    
    306,283
    
    
    
    518,063Railcar services (including costs relates to
affiliates of $10,136, $15,539 and $16,200 in 2003, 2004
and 2005, respectively)
    
    
    29,762
    
    
    
    34,473
    
    
    
    38,041Total cost of goods sold
    
    
    204,391
    
    
    
    340,756
    
    
    
    556,104Gross profit
    
    
    13,603
    
    
    
    14,300
    
    
    
    52,056Pension settlement expense
    
    
    
    
    
    
    
    
    
    
    8,878Selling, administrative and other
    
    
    10,340
    
    
    
    10,334
    
    
    
    16,476Earnings from operations
    
    
    3,263
    
    
    
    3,966
    
    
    
    26,702Interest income (including interest income from affiliates of
$2,998, $3,885 and $1,008 in 2003, 2004 and 2005,
respectively)
    
    
    3,161
    
    
    
    4,422
    
    
    
    1,658Interest expense including interest expense to affiliates of $0, $1,524
and $2,063 in 2003, 2004 and 2005, respectively
    
    
    3,616
    
    
    
    3,667
    
    
    
    4,846(Loss) earnings from joint venture
    
    
    (604
    )
    
    
    (609
    )
    
    
    610Earnings before income tax expense
    
    
    2,204
    
    
    
    4,112
    
    
    
    24,124Income tax expense
    
    
    1,139
    
    
    
    2,191
    
    
    
    9,356Net earnings
    
    $
    1,065
    
    
    $
    1,921
    
    
    $
    14,768Less preferred dividends
    
    
    (9,690
    )
    
    
    (13,241
    )
    
    
    (13,251
    )Earnings (loss) available to common shareholders
    
    
    (8,625
    )
    
    
    (11,320
    )
    
    
    1,517Weighted average common shares outstanding  basic and
diluted
    
    
    9,328
    
    
    
    10,140
    
    
    
    11,147Net earnings (loss) per common share  basic and diluted
    
    $
    (0.92
    )
    
    $
    (1.12
    )
    
    $
    0.14
 66
    Table of Contents   
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 )
 Year Ended December 31,2003
    
    
    2004
    
    
    2005Operating activities:Net earnings
    
    $
    1,065
    
    
    $
    1,921
    
    
    $
    14,768Adjustments to reconcile net earnings to net cash (used in) provided
by operating activities:Depreciation and amortization
    
    
    6,408
    
    
    
    6,247
    
    
    
    6,807Change in joint venture investment as a result of loss (earnings)
    
    
    604
    
    
    
    609
    
    
    
    (610
    )Expense relating to pre-recapitalization liabilities
    
    
    583
    
    
    
    1,431
    
    
    
    1,061Curtailment gain
    
    
    
    
    
    
    (59
    )
    
    
    Provision for deferred income taxes
    
    
    963
    
    
    
    1,740
    
    
    
    5,606Provision for losses on accounts receivable
    
    
    254
    
    
    
    209
    
    
    
    323Long-lived asset impairment and other charges
    
    
    801
    
    
    
    
    
    
    
    Loss on the disposition of property, plant and equipment
    
    
    73
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (4,509
    )
    
    
    (11,983
    )
    
    
    (13,413
    )Inventories
    
    
    (11,835
    )
    
    
    (28,718
    )
    
    
    (14,076
    )Prepaid expenses
    
    
    88
    
    
    
    (365
    )
    
    
    (2,256
    )Accounts payable
    
    
    3,999
    
    
    
    12,048
    
    
    
    32,993Accrued pension expense
    
    
    
    
    
    
    
    
    
    
    8,335Accrued expenses and taxes
    
    
    1,183
    
    
    
    1,966
    
    
    
    4,871Other
    
    
    (1,316
    )
    
    
    (2,128
    )
    
    
    (2,838
    )Net cash (used in) provided by operating activities
    
    
    (1,639
    )
    
    
    (17,082
    )
    
    
    41,571Investing activities:Purchases of property, plant and equipment
    
    
    (2,301
    )
    
    
    (11,441
    )
    
    
    (22,841
    )Proceeds from note and interest receivable from affiliates
    
    
    50
    
    
    
    404
    
    
    
    261Net cash used in investing activities
    
    
    (2,251
    )
    
    
    (11,037
    )
    
    
    (22,580
    )Financing activities:Issuance of common stock
    
    
    
    
    
    
    42,500
    
    
    
    Issuance of preferred stock
    
    
    10,000
    
    
    
    67,500
    
    
    
    Effect of ARL spin off
    
    
    
    
    
    
    (25,000
    )
    
    
    Advance to affiliate under notes receivable
    
    
    
    
    
    
    (165,000
    )
    
    
    Proceeds from (repayment on) issuance of notes payable from
affiliates
    
    
    
    
    
    
    137,000
    
    
    
    Decrease (increase) in amount due from affiliate
    
    
    8,634
    
    
    
    
    
    
    
    (5,110
    )Increase (decrease) in amount due to affiliate
    
    
    4,028
    
    
    
    18,219
    
    
    
    (17,790
    )Proceeds from debt issuance
    
    
    
    
    
    
    
    
    
    
    31,852Deferred offering costs
    
    
    
    
    
    
    
    
    
    
    (4,860
    )Repayment of debt
    
    
    (18,890
    )
    
    
    (40,222
    )
    
    
    (1,334
    )Net cash provided by financing activities
    
    
    3,772
    
    
    
    34,997
    
    
    
    2,758(Decrease) increase in cash and cash equivalents
    
    
    (118
    )
    
    
    6,878
    
    
    
    21,749Cash and cash equivalents at beginning of year
    
    
    183
    
    
    
    65
    
    
    
    6,943Cash and cash equivalents at end of year
    
    $
    65
    
    
    $
    6,943
    
    
    $
    28,692
  67




---



##### Table of Contents



STATEMENT OF STOCKHOLDERS EQUITY & COMPREHENSIVE INCOME (LOSS)
 )
 Retained
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedearnings
    
    
    
    
    
    
    New
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    other
    
    
    TotalComprehensive
    
    
    (accumulated
    
    
    New Preferred
    
    
    preferred
    
    
    Common
    
    
    Common
    
    
    paid-in
    
    
    comprehensive
    
    
    shareholdersincome (loss)
    
    
    deficit)
    
    
    Stock-Shares
    
    
    stock
    
    
    Stock-Shares
    
    
    stock
    
    
    capital
    
    
    loss
    
    
    equityJanuary 1, 2003
    
    
    
    
    
    
    8,610
    
    
    
    
    
    
    $
    
    
    
    
    9,328
    
    
    $
    93
    
    
    $
    10,901
    
    
    $
    (687
    )
    
    $
    18,917Net earnings
    
    $
    1,065
    
    
    
    1,065
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,065Currency translation adjustment
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    11Minimum pension liability
adjustment, net of tax effect of $128
    
    
    (208
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (208
    )
    
    
    (208
    )Comprehensive income
    
    $
    868Excess of purchase price over book value
related to transfer of Castings from ACF
    
    
    
    
    
    
    (4,874
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,874
    )Dividends on mandatorily redeemable
payment-in-kind preferred stock
    
    
    
    
    
    
    (9,690
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,690
    )Capital contributions for expenses
relating to precapitalization
liabilities retained by ACF
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    583
    
    
    
    
    
    
    
    583Balance December 31, 2003
    
    
    
    
    
    
    (4,889
    )
    
    
    
    
    
    
    
    
    
    
    9,328
    
    
    
    93
    
    
    
    11,484
    
    
    
    (884
    )
    
    
    5,804Net earnings
    
    $
    1,921
    
    
    
    1,921
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,921Currency translation adjustment
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    14Minimum pension liability
adjustment, net of tax effect of $109
    
    
    (193
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (193
    )
    
    
    (193
    )Comprehensive income
    
    $
    1,742Dividends on preferred stock
    
    
    
    
    
    
    (13,241
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,241
    )Transfer mandatorily redeemable PIK
preferred to New Preferred Stock
    
    
    
    
    
    
    
    
    
    
    95,517
    
    
    
    95,517
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95,517Conversion of PIK Preferred Dividends
    
    
    
    
    
    
    
    
    
    
    654
    
    
    
    654
    
    
    
    1,819
    
    
    
    18
    
    
    
    (18
    )
    
    
    
    
    
    
    654Capital contributions
    
    
    
    
    
    
    
    
    
    
    102,000
    
    
    
    102,000
    
    
    
    
    
    
    
    
    
    
    
    42,500
    
    
    
    
    
    
    
    144,500Net adjustments relating to spin
off of ARL (Note 1)
    
    
    
    
    
    
    
    
    
    
    (86,486
    )
    
    
    (86,486
    )
    
    
    
    
    
    
    
    
    
    
    (14,148
    )
    
    
    
    
    
    
    (100,634
    )Deemed distribution related to decrease
in Castings book value
    
    
    
    
    
    
    (750
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (750
    )Capital contributions for expenses
relating to precapitalization
liabilities retained by ACF
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,431
    
    
    
    
    
    
    
    1,431Balance December 31, 2004
    
    
    
    
    
    $
    (16,959
    )
    
    
    111,685
    
    
    $
    111,685
    
    
    
    11,147
    
    
    $
    111
    
    
    $
    41,249
    
    
    $
    (1,063
    )
    
    $
    135,023Net earnings
    
    $
    14,768
    
    
    
    14,768
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,768Currency translation adjustment
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    16Minimum pension liability
adjustment, net of tax effect $362
    
    
    (584
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (584
    )
    
    
    (584
    )Comprehensive income
    
    $
    14,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dividends on preferred stock
    
    
    
    
    
    
    (13,251
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,251
    )Net adjustments relating to spin
off of ARL (Note 1)
    
    
    
    
    
    
    
    
    
    
    (29,630
    )
    
    
    (29,630
    )
    
    
    
    
    
    
    
    
    
    
    (2,023
    )
    
    
    
    
    
    
    (31,653
    )Capital contributions for expenses
relating to precapitalization
liabilities retained by ACF and other
related adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,441
    
    
    
    
    
    
    
    2,441Balance December 31, 2005
    
    
    
    
    
    $
    (15,442
    )
    
    
    82,055
    
    
    $
    82,055
    
    
    
    11,147
    
    
    $
    111
    
    
    $
    41,667
    
    
    $
    (1,631
    )
    
    $
    106,760
  68




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##### Table of Contents








NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 1Description of the Business














69



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##### Table of Contents



New preferred
    
    
    Additional paid instock
    
    
    capital(in thousands)January 1, 2004
    
    $
    
    
    
    $
    11,484New preferred stock issued in exchange for mandatorily
redeemable preferred stock
    
    
    95,517
    
    
    
    Capital contribution
    
    
    102,654
    
    
    
    42,482Exchange of common interest in ARL for new preferred stock
    
    
    (86,486
    )
    
    
    (26,670
    )ARL deferred tax assets
    
    
    
    
    
    
    12,522Other
    
    
    
    
    
    
    1,431December 31, 2004
    
    $
    111,685
    
    
    $
    41,249Exchange of common interest in ARL for new preferred stock
    
    $
    (29,630
    )
    
    
    Tax benefit of ARL NOL
    
    
    
    
    
    
    (2,023
    )Other
    
    
    
    
    
    
    2,441December 31, 2005
    
    $
    82,055
    
    
    $
    41,667
 Note 2Summary of Significant Accounting Policies
  Revenue recognition
  Accounting for Shipping and Handling Fees and Costs,
 70




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##### Table of Contents



Debt issuance costs
  Inventories
  Accounts receivable
  Property, plant and equipment
   Pension plans and other postretirement benefits
   Income taxes
  Ohio Castings joint venture
   71




---



##### Table of Contents



Years Ended December 31,2004
    
    
    2005(in thousands)Financial positionCurrent assets
    
    $
    19,111
    
    
    $
    18,302Property, plant, and equipment, net
    
    
    14,407
    
    
    
    15,380Total assets
    
    
    33,518
    
    
    
    33,682Current liabilities
    
    
    19,674
    
    
    
    14,529Long-term debt
    
    
    8,184
    
    
    
    11,663Total liabilities
    
    
    27,858
    
    
    
    26,192Members equity
    
    $
    5,660
    
    
    $
    7,490Results of operationsSales
    
    $
    76,789
    
    
    $
    119,008Operating (loss) earnings
    
    
    (1,770
    )
    
    
    1,562Net (loss) earnings
    
    $
    (1,827
    )
    
    $
    1,830
 Impairment of long-lived assets
  Statement of cash flows
  72




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##### Table of Contents



Fair value of financial instruments
  Foreign currency translation
  Comprehensive income (loss)
  Retained earnings
  Earnings per share
  Use of estimates
  Recent accounting pronouncements
 Inventory Costs-An Amendment of ARB No. 43 Chapter 4
 73




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##### Table of Contents



Share-Based Payment Accounting for Stock-Based
Compensation Accounting for Stock Issued to Employees
 Share-Based Payment
  Accounting for Asset Retirement Obligations
 Accounting Changes and Error Corrections, a replacement
of APB Opinion No. 20 and FAS 3 (FAS 154)
 Note 3Accounts Receivable, Net
  74




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##### Table of Contents



Years Ended December 31,2003
    
    
    2004
    
    
    2005(in thousands)Beginning Balance
    
    $
    522
    
    
    $
    572
    
    
    $
    510Provision
    
    
    254
    
    
    
    209
    
    
    
    323Write-offs
    
    
    (279
    )
    
    
    (271
    )
    
    
    (23
    )Recoveries
    
    
    75
    
    
    
    
    
    
    
    39Ending Balance
    
    $
    572
    
    
    $
    510
    
    
    $
    849
 Note 4Inventories, Net
  Years Ended December 31,2004
    
    
    2005(in thousands)Raw materials
    
    $
    39,655
    
    
    $
    49,246Work-in-process
    
    
    25,515
    
    
    
    26,301Finished products
    
    
    11,434
    
    
    
    14,772Total inventories
    
    
    76,604
    
    
    
    90,319Less reserves
    
    
    2,679
    
    
    
    2,318Total inventories, net
    
    $
    73,925
    
    
    $
    88,001
  Years Ended December 31,2003
    
    
    2004
    
    
    2005(in thousands)Beginning Balance
    
    $
    1,670
    
    
    $
    2,310
    
    
    $
    2,679Provision
    
    
    762
    
    
    
    559
    
    
    
    273Write-offs
    
    
    (122
    )
    
    
    (190
    )
    
    
    (634
    )Ending Balance
    
    $
    2,310
    
    
    $
    2,679
    
    
    $
    2,318
 Note 5Long-Lived Asset Impairment and Other Charges
  Note 6Long-Term Debt
  75




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##### Table of Contents



Years Ended December 31,2004
    
    
    2005(in thousands)Revolving line of credit
    
    $
    
    
    
    $
    31,852Industrial revenue bonds secured by certain
buildings and manufacturing equipment and
guaranteed by ACF and ACF Holding, with effective
interest rates ranging from 6.75% to 8.5%,
principal amounts due through the year 2011
    
    
    9,600
    
    
    
    8,340Other
    
    
    251
    
    
    
    178Total debt
    
    
    9,851
    
    
    
    40,370Less current portion of debt
    
    
    1,334
    
    
    
    33,294Total long-term debt, net of current portion
    
    $
    8,517
    
    
    $
    7,076
  2006
    
    $
    33,2942007
    
    
    1,5732008
    
    
    1,6132009
    
    
    1,7402010
    
    
    1,8802011
    
    
    270
    Note 7Income Taxes
  76




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##### Table of Contents



Years Ended December 31,2003
    
    
    2004
    
    
    2005(in thousands)Current:Federal
    
    $
    172
    
    
    $
    332
    
    
    $
    3,119State and local
    
    
    27
    
    
    
    48
    
    
    
    495Foreign
    
    
    (23
    )
    
    
    71
    
    
    
    136Total current
    
    
    176
    
    
    
    451
    
    
    
    3,750DeferredFederal
    
    
    833
    
    
    
    1,504
    
    
    
    4,841State and local
    
    
    136
    
    
    
    237
    
    
    
    769Foreign
    
    
    (6
    )
    
    
    (1
    )
    
    
    (4
    )Total deferred
    
    
    963
    
    
    
    1,740
    
    
    
    5,606Total income tax expense
    
    $
    1,139
    
    
    $
    2,191
    
    
    $
    9,356
  Years Ended December 31,2003
    
    
    2004
    
    
    2005(in thousands)Computed income tax expense
    
    $
    771
    
    
    $
    1,439
    
    
    $
    8,443State and local taxes, net of federal tax expense
    
    
    106
    
    
    
    185
    
    
    
    822Non-deductible expenses
    
    
    267
    
    
    
    566
    
    
    
    79Other, net
    
    
    (5
    )
    
    
    1
    
    
    
    12Total income tax expense
    
    $
    1,139
    
    
    $
    2,191
    
    
    $
    9,356
 Years Ended December 31,2003
    
    2004
    
    2005Computed income tax expense
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %State and local taxes, net of federal tax expense
    
    
    4.8
    
    
    
    4.5
    
    
    
    3.4Non-deductible expenses
    
    
    12.1
    
    
    
    13.8
    
    
    
    0.3Other, net
    
    
    (0.2
    )
    
    
    
    
    
    
    0.1Effective income tax rate
    
    
    51.7
    %
    
    
    53.3
    %
    
    
    38.8
    %
  77




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##### Table of Contents



Years Ended December 31,2004
    
    
    2005(in thousands)Current deferred taxesDeferred tax assetsProvisions not currently deductible
    
    $
    2,065
    
    
    $
    1,967Non-current deferred taxesProvisions not currently deductible
    
    
    627
    
    
    
    538Net operating loss carryforwards
    
    
    10,144
    
    
    
    Pensions and post retirement
    
    
    1,440
    
    
    
    3,708Total non-current deferred tax assets
    
    
    12,211
    
    
    
    4,246Total deferred tax assets
    
    
    14,276
    
    
    
    6,213Deferred tax liabilitiesProperty, plant and equipment
    
    
    11,548
    
    
    
    9,610Total non-current deferred tax (liability) asset-net
    
    
    663
    
    
    
    (5,364
    )Total deferred tax (liability) asset
    
    $
    2,728
    
    
    $
    (3,397
    )
  Years Ended December 31,2004
    
    
    2005(in thousands)Deferred tax current asset
    
    $
    2,065
    
    
    $
    1,967Deferred tax long-term asset (liability)
    
    
    663
    
    
    
    (5,364
    )Net deferred tax asset (liability)
    
    $
    2,728
    
    
    $
    (3,397
    )
  Note 8Warranties
   78




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##### Table of Contents



Years Ended December 31,2003
    
    
    2004
    
    
    2005(in thousands)Liability, beginning of year
    
    $
    1,048
    
    
    $
    1,436
    
    
    $
    1,630Provision
    
    
    893
    
    
    
    336
    
    
    
    191Claims
    
    
    (505
    )
    
    
    (142
    )
    
    
    (584
    )Liability, end of year
    
    $
    1,436
    
    
    $
    1,630
    
    
    $
    1,237
 Note 9Stock Options
   Note 10Related Party Transactions
    Projected benefit obligation
    
    $12.4 millionAssets at fair value
    
    8.4 millionUnderfunded status
    
    4.0 million
  79




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##### Table of Contents



Manufacturing services agreementUnder the manufacturing services agreement, ACF agreed to manufacture and distribute, at the
Companys instruction, various products using certain assets that the Company acquired pursuant
to the 1994 ACF asset transfer agreement. In consideration for these services, the Company agreed
to pay ACF based on agreed upon rates. Components supplied to ARI by ACF include tank railcar
heads, wheel sets and various structural components. In the years ended December 31, 2003, 2004
and 2005, ARI purchased inventory of $19.0 million, $31.3 million and $76.4 million,
respectively, of components from ACF. The agreement automatically renews unless written notice is
provided by the Company or ACF.Administration AgreementUnder this agreement, ACF agreed to provide the Company with office facilities and administrative
services, primarily information technology services. In exchange for the facilities and services,
the Company agreed to pay ACF based on agreed upon rates. Management believes that these
allocation methods are reasonable for the relevant costs. Total amounts incurred under this
agreement totaled $0.8 million, $0.8 million and $0.4 million at December 31, 2003, 2004, and
2005, respectively. The facility lease amounts, included in the amounts incurred, have been
included in the total lease expense discussion within this footnote. The agreement was terminated
on April 1, 2005.Until October 2004, ACF received the majority of ARIs cash receipts and disbursed cash on its
behalf. ARI maintained a receivable/payable from affiliates bearing interest at ACFs internal
cost of funds in accordance with this agreement.At the time of ARIs formation in 1994, when this Administrative Agreement was entered into, ARI
and ACF contemplated that ARI would generally need funds to build its facilities, acquire assets
and provide for working capital needs. ACF has provided financing to ARI and ARI has repaid these
amounts through an affiliate account based on ARIs cash flow needs from month to month. ARI has
classified its transactions with ACF through its affiliate account as financing activities on the
accompanying statements of cash flows. From time to time this account has had a due from balance
but ARI does not believe that this changes the basic nature of the financing relationship.As of December 31, 2004, amounts due to affiliates included $22.2 million in payables to ACF and
ARL. Included in amounts due from affiliates at December 31, 2005 were $5.1 million in
receivables from ACF, Ohio Castings, and ARL. As of December 31, 2005, amounts due to affiliates
included $23.5 million in accounts and notes payable to ACF and its affiliates.Railcar Servicing AgreementUnder this agreement, the Company agreed to provide ACF with railcar repair and maintenance
services, fleet management services and consulting services on safety and environmental matters
for railcars owned or managed by ACF. ACF agreed to compensate the Company based on agreed upon
rates. Revenue recorded under this
 80




---



##### Table of Contents



Supply Agreement
   Railcar Management Agreements
  ACF Administration Agreement
    ARL Railcar Services Agreement
  ARL Railcar Servicing Agreement
  ARL Services Agreement
  81




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##### Table of Contents



Trademark License Agreement
    Agreements with ACF
     82




---



##### Table of Contents



Agreements with Affiliated Parties
 3 4
 1 2
 3 4
  Note 11Pension Plans
    83




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##### Table of Contents



PostretirementPension Benefits
    
    
    Benefits2004
    
    
    2005
    
    
    2004
    
    
    2005(in thousands)Change in benefit obligationBenefit obligation  Beninning of year
    
    $
    3,148
    
    
    $
    3,378
    
    
    $
    
    
    
    $
    Plan transfer
    
    
    
    
    
    
    12,362
    
    
    
    
    
    
    
    3,912Service cost
    
    
    34
    
    
    
    21
    
    
    
    
    
    
    
    1Interest cost
    
    
    188
    
    
    
    202
    
    
    
    
    
    
    
    18Plan amendment
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    Actuarial loss
    
    
    29
    
    
    
    1,030
    
    
    
    
    
    
    
    (11
    )Employee contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Benefits paid
    
    
    (14
    )
    
    
    (12
    )
    
    
    
    
    
    
    (16
    )Benefit obligation  End of year
    
    $
    3,378
    
    
    $
    16,981
    
    
    $
    
    
    
    $
    3,909Change in plan assetsPlan assets  Beninning of year
    
    $
    1,574
    
    
    $
    1,776
    
    
    $
    
    
    
    $
    Plan transfer
    
    
    
    
    
    
    8,354
    
    
    
    
    
    
    
    Actual return on plan assets
    
    
    (92
    )
    
    
    180
    
    
    
    
    
    
    
    Employee contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Employer contributions
    
    
    308
    
    
    
    82
    
    
    
    
    
    
    
    11Benefits paid
    
    
    (14
    )
    
    
    (12
    )
    
    
    
    
    
    
    (16
    )Plan assets at fair value  End of year
    
    $
    1,776
    
    
    $
    10,380
    
    
    $
    
    
    
    $
    
 PostretirementPension Benefits
    
    
    Benefits2004
    
    
    2005
    
    
    2004
    
    
    2005(in thousands)Funded statusBenefit obligation in excess of plan assets
    
    $
    (1,602
    )
    
    $
    (6,601
    )
    
    $
    
    
    
    $
    (3,909
    )Unrecognized prior service cost
    
    
    (7
    )
    
    
    (6
    )
    
    
    
    
    
    
    Unrecognized net loss (gain)
    
    
    1,783
    
    
    
    2,744
    
    
    
    
    
    
    
    (12
    )Net amount recognized at December 31
    
    $
    174
    
    
    $
    (3,863
    )
    
    $
    
    
    
    $
    (3,921
    )Amounts recognized in the balance sheetsAccrued benefit liability
    
    $
    (1,602
    )
    
    $
    (6,601
    )
    
    $
    
    
    
    $
    (3,921
    )Accumulated other comprehensive loss (pre-tax)
    
    
    1,776
    
    
    
    2,738
    
    
    
    
    
    
    
    Net amount recognized at December 31
    
    $
    174
    
    
    $
    (3,863
    )
    
    $
    
    
    
    $
    (3,921
    )
  84




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##### Table of Contents



Pension Benefits
    
    
    Postretirement Benefits2003
    
    
    2004
    
    
    2005
    
    
    2003
    
    
    2004
    
    
    2005(in thousands)Components of net periodic benefit costService cost
    
    $
    126
    
    
    $
    34
    
    
    $
    21
    
    
    $
    
    
    
    $
    
    
    
    $
    1Interest cost
    
    
    173
    
    
    
    188
    
    
    
    202
    
    
    
    
    
    
    
    
    
    
    
    18Expected return on plan assets
    
    
    (165
    )
    
    
    (156
    )
    
    
    (193
    )
    
    
    
    
    
    
    
    
    
    
    Curtailment gain
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost (gain)
    
    
    (9
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of unrecognized net loss
    
    
    66
    
    
    
    77
    
    
    
    82
    
    
    
    
    
    
    
    
    
    
    
    $
    191
    
    
    $
    84
    
    
    $
    111
    
    
    $
    
    
    
    $
    
    
    
    $
    19
 Additional information
  PostretirementPension Benefits
    
    Benefits(in thousands)2006
    
    $
    968
    
    
    $
    2732007
    
    
    973
    
    
    
    3032008
    
    
    987
    
    
    
    2852009
    
    
    988
    
    
    
    3012010
    
    
    1,091
    
    
    
    3152011-2015
    
    
    5,372
    
    
    
    1,770
   Pension Benefits
    
    Postretirement Benefits2004
    
    2005
    
    2004
    
    2005Discount rate
    
    
    6.0
    %
    
    
    5.5
    %
    
    
    N/A
    
    
    
    5.5
    %Rate of increase in compensation levels
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
  Pension Benefits
    
    Postretirement Benefits2003
    
    2004
    
    2005
    
    2003
    
    2004
    
    2005Discount rate
    
    
    6.0
    %
    
    
    6.0
    %
    
    
    6.0
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    5.75
    %Expected return on plan assets
    
    
    9.0
    %
    
    
    8.5
    %
    
    
    8.0
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ARate of compensation increase
    
    
    5.0
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
  85




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##### Table of Contents



2003
    
    2004
    
    2005Health care cost trend rate assigned for next year
    
    
    N/A
    
    
    
    N/A
    
    
    
    12.00
    %Rate to which cost trend is assumed to decline
    
    
    N/A
    
    
    
    N/A
    
    
    
    5.00
    %
  One Percentage Point(in thousands)Increase
    
    DecreaseEffect on total of service and interest cost
    
    $
    3
    
    
    $
    (1
    )Effect on postretirement benefit obligation
    
    $
    172
    
    
    $
    (169
    )
  TargetPlan Assets at December 31,
    
    Allocation2004
    
    2005
    
    2006Asset CategoryEquity securities
    
    
    68
    %
    
    
    61
    %
    
    
    60
    %Debt securities
    
    
    32
    %
    
    
    39
    %
    
    
    40
    %100
    %
    
    
    100
    %
    
    
    100
    %
     Note 12  Commitments and Contingencies
  86




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##### Table of Contents



(in thousands)2006
    
    $
    2,8042007
    
    
    1,7092008
    
    
    2312009
    
    
    1612010
    
    
    65Thereafter
    
    
    
     87




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##### Table of Contents



Note 13Mandatorily Redeemable Payment-in-Kind Preferred Stock, New Preferred Stock, Additional
Paid in Capital and Shareholders Equity
    88




---



##### Table of Contents



Note 14Operating Segment and Sales/Credit Concentrations
   As of and for the year ended
    
    Manufacturing
    
    
    Railcar
    
    
    CorporateDecember 31, 2003
    
    Operations
    
    
    Services
    
    
    & all other
    
    
    Eliminations
    
    
    Totals(in thousands)Revenues from external
customers
    
    $
    188,119
    
    
    $
    29,875
    
    
    $
    
    
    
    $
    
    
    
    $
    217,994Intersegment revenues
    
    
    1,152
    
    
    
    548
    
    
    
    
    
    
    
    (1,700
    )
    
    
    Cost of goods sold  external
customers
    
    
    174,629
    
    
    
    29,762
    
    
    
    
    
    
    
    
    
    
    
    204,391Cost of intersegment sales
    
    
    1,074
    
    
    
    539
    
    
    
    
    
    
    
    (1,613
    )
    
    
    Gross profit
    
    
    13,568
    
    
    
    122
    
    
    
    
    
    
    
    (87
    )
    
    
    13,603Selling, administration and
other
    
    
    3,370
    
    
    
    1,555
    
    
    
    5,415
    
    
    
    
    
    
    
    10,340Earnings (loss) from operations
    
    $
    10,198
    
    
    $
    (1,433
    )
    
    $
    (5,415
    )
    
    $
    (87
    )
    
    $
    3,263Total assets
    
    $
    105,542
    
    
    $
    32,594
    
    
    $
    58,372
    
    
    $
    
    
    
    $
    196,508Capital expenditures
    
    
    1,733
    
    
    
    568
    
    
    
    
    
    
    
    
    
    
    
    2,301Depreciation and amortization
    
    
    3,932
    
    
    
    2,112
    
    
    
    364
    
    
    
    
    
    
    
    6,408
 89




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##### Table of Contents



As of and for the year ended
    
    Manufacturing
    
    
    Railcar
    
    
    CorporateDecember 31, 2004
    
    Operations
    
    
    Services
    
    
    & all other
    
    
    Eliminations
    
    
    Totals(in thousands)Revenues from external
customers
    
    $
    316,432
    
    
    $
    38,624
    
    
    $
    
    
    
    $
    
    
    
    $
    355,056Intersegment revenues
    
    
    2,574
    
    
    
    3,003
    
    
    
    
    
    
    
    (5,577
    )
    
    
    Cost of goods sold  external
customers
    
    
    306,283
    
    
    
    34,473
    
    
    
    
    
    
    
    
    
    
    $
    340,756Cost of intersegment sales
    
    
    2,307
    
    
    
    2,527
    
    
    
    
    
    
    
    (4,834
    )
    
    
    Gross profit
    
    
    10,416
    
    
    
    4,627
    
    
    
    
    
    
    
    (743
    )
    
    $
    14,300Selling, administration and
other
    
    
    4,210
    
    
    
    2,225
    
    
    
    3,899
    
    
    
    
    
    
    $
    10,334Earnings (loss) from operations
    
    $
    6,206
    
    
    $
    2,402
    
    
    $
    (3,899
    )
    
    $
    (743
    )
    
    $
    3,966Total assets
    
    $
    34,606
    
    
    $
    33,034
    
    
    $
    289,200
    
    
    $
    
    
    
    $
    356,840Capital expenditures
    
    
    11,062
    
    
    
    379
    
    
    
    
    
    
    
    
    
    
    
    11,441Depreciation and amortization
    
    
    3,955
    
    
    
    1,959
    
    
    
    333
    
    
    
    
    
    
    
    6,247
 As of and for the year ended
    
    Manufacturing
    
    
    Railcar
    
    
    CorporateDecember 31, 2005
    
    Operations
    
    
    Services
    
    
    & all other
    
    
    Eliminations
    
    
    Totals(in thousands)Revenues from external
customers
    
    $
    566,524
    
    
    $
    41,636
    
    
    $
    
    
    
    $
    
    
    
    $
    608,160Intersegment revenues
    
    
    1,762
    
    
    
    2,474
    
    
    
    
    
    
    
    (4,236
    )
    
    
    Cost of goods sold  external
customers
    
    
    520,267
    
    
    
    35,837
    
    
    
    
    
    
    
    
    
    
    $
    556,104Cost of intersegment sales
    
    
    1,522
    
    
    
    1,917
    
    
    
    
    
    
    
    (3,439
    )
    
    
    Gross profit
    
    
    46,497
    
    
    
    6,356
    
    
    
    
    
    
    
    (797
    )
    
    $
    52,056Selling, administration and
other
    
    
    5,502
    
    
    
    1,981
    
    
    
    17,871
    
    
    
    
    
    
    $
    25,354Earnings (loss) from operations
    
    $
    40,995
    
    
    $
    4,375
    
    
    
    (17,871
    )
    
    
    (797
    )
    
    $
    26,702Total assets
    
    $
    185,652
    
    
    $
    34,171
    
    
    $
    48,757
    
    
    $
    
    
    
    $
    268,580Capital expenditures
    
    
    21,693
    
    
    
    686
    
    
    
    462
    
    
    
    
    
    
    
    22,841Depreciation and amortization
    
    
    4,773
    
    
    
    2,011
    
    
    
    23
    
    
    
    
    
    
    
    6,807
 Manufacturing operations
  Railcar services
  90




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##### Table of Contents



Note 15Selected Quarterly Financial Data (unaudited)
 Second
    
    Third
    
    FourthFirst quarter
    
    quarter
    
    quarter
    
    quarter(in thousands, except per share data)2004Sales
    
    $
    79,084
    
    
    $
    79,910
    
    
    $
    95,337
    
    
    $
    100,725Gross Profit
    
    
    6,099
    
    
    
    4,783
    
    
    
    2,838
    
    
    
    580Net earnings (loss)
available to common
shareholders
    
    
    (1,793
    )
    
    
    (1,841
    )
    
    
    (2,789
    )
    
    
    (4,897
    )Net loss
attributable to
common
shareholders, basic
and diluted
    
    $
    (0.19
    )
    
    $
    (0.20
    )
    
    $
    (0.26
    )
    
    $
    (0.44
    )
 Second
    
    Third
    
    FourthFirst quarter
    
    quarter
    
    quarter
    
    quarter(in thousands, except per share data)2005Sales
    
    $
    130,753
    
    
    $
    160,890
    
    
    $
    150,505
    
    
    $
    166,012Gross Profit
    
    
    6,490
    
    
    
    15,662
    
    
    
    15,277
    
    
    
    14,627Net earnings (loss)
available to common
shareholders
    
    
    (1,983
    )
    
    
    1,930
    
    
    
    3,414
    
    
    
    (1,844
    )Net loss
attributable to
common
shareholders, basic
and diluted
    
    $
    (0.18
    )
    
    $
    0.17
    
    
    $
    0.31
    
    
    $
    (0.16
    )
 Note 16Supplemental Cash Flow Information
      91




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##### Table of Contents



Note 17  Stock Split
  Note 18Subsequent Events
  Redemption of all outstanding shares of preferred stock
    
    $
    93.9Repayment of notes due to affiliates
    
    
    20.5Repayment of all industrial revenue bonds
    
    
    8.6Repayment of amounts outstanding under revolving credit facility
    
    
    32.3Professional fees
    
    
    1.0Cash and temporary investment for working capital and general corporate purposes
    
    
    35.7Total uses
    
    $
    192.0
  
    
    A charge of $2.4 million in compensation expense was recognized pursuant to the
terms of the option agreement in place with our CEO (note 9) to recognize the 40%
of the original $6 million in stock awarded under the agreement which vested upon
the close of the IPO. An additional $3.6 million in compensation expense will be
recognized ratably over the one year vesting period starting in February 2006.
    
    A charge of $.5 million in compensation expense was recognized under the terms
of the employment agreement in place with our CFO, as discussed below.
    
    Deferred financing fees of $0.6 million were immediately expensed upon repayment
of the related debt
    
    Approximately $2.2 million in compensation expense is expected to be recognized
ratably over the year in relation to our 2005 Equity Incentive Plan, as discussed
below.
    
    Deferred IPO charges in the amount of $5.1 million were offset against proceeds
from the offering and reflected as a charge against accumulated paid in capital.
  92




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##### Table of Contents



Note 19  Acquisition subsequent to Year-end
  93




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 94




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS
  August 31,2003
    
    
    2004
    
    
    2005AssetsCurrent assets:Cash
    
    $
    811
    
    
    $
    1,922
    
    
    $
    2,026Accounts receivable, net
    
    
    4,808
    
    
    
    10,802
    
    
    
    8,522Inventories
    
    
    2,242
    
    
    
    5,275
    
    
    
    5,827Other Assets
    
    
    393
    
    
    
    112
    
    
    
    759Total current assets
    
    
    8,254
    
    
    
    18,111
    
    
    
    17,134Restricted cash
    
    
    
    
    
    
    935
    
    
    
    800Property, plant and equipment:Buildings
    
    
    
    
    
    
    2,178
    
    
    
    2,192Machinery and equipment
    
    
    79
    
    
    
    12,052
    
    
    
    14,86679
    
    
    
    14,230
    
    
    
    17,058Less accumulated depreciation and amortization
    
    
    3
    
    
    
    854
    
    
    
    1,84676
    
    
    
    13,376
    
    
    
    15,212Land
    
    
    
    
    
    
    270
    
    
    
    270Net property, plant and equipment
    
    
    76
    
    
    
    13,646
    
    
    
    15,482Debt issuance costs, net
    
    
    
    
    
    
    254
    
    
    
    214Total assets
    
    $
    8,330
    
    
    $
    32,946
    
    
    $
    33,630Liabilities and Members EquityCurrent liabilities:Current portion of long-term debt, net of debt discount of $14 in 2005
    
    $
    
    
    
    $
    2,370
    
    
    $
    3,700Current portion of capital leases
    
    
    20
    
    
    
    20
    
    
    
    16Accounts payable
    
    
    1,369
    
    
    
    7,850
    
    
    
    7,246Accrued expenses
    
    
    570
    
    
    
    3,046
    
    
    
    3,969Total current liabilities
    
    
    1,959
    
    
    
    13,286
    
    
    
    14,931Long-term liabilities:Long-term debt, net of current portion, net of debt discount of $51 in 2005
    
    
    
    
    
    
    14,725
    
    
    
    11,838Long-term portion of capital leases, net of current portion
    
    
    38
    
    
    
    16
    
    
    
    Total long-term liabilities
    
    
    38
    
    
    
    14,741
    
    
    
    11,838Total liabilities
    
    
    1,997
    
    
    
    28,027
    
    
    
    26,769Members equity
    
    
    6,333
    
    
    
    4,919
    
    
    
    6,861Total liabilities and members equity
    
    $
    8,330
    
    
    $
    32,946
    
    
    $
    33,630
 See
accompanying notes to the consolidated financial statements.
 95




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##### Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS
  PeriodFromInception(June 20,2003) toAugust
    
    
    Years Ended August31,
    
    
    31,2003
    
    
    2004
    
    
    2005Revenues
    
    $
    5,039
    
    
    $
    55,722
    
    
    $
    109,801Costs and expenses:Cost of sales
    
    
    4,860
    
    
    
    54,974
    
    
    
    101,518Selling, administrative and other
    
    
    144
    
    
    
    4,666
    
    
    
    5,698Interest expense
    
    
    
    
    
    
    496
    
    
    
    643Total costs and expenses
    
    
    5,004
    
    
    
    60,136
    
    
    
    107,859Net earnings (loss)
    
    $
    35
    
    
    $
    (4,414
    )
    
    $
    1,942
 See
accompanying notes to the consolidated financial statements.
 96




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
  PeriodFromInception(June 20,2003) toAugust31,
    
    

Years
Ended August 31,2003
    
    
    2004
    
    
    2005Operating activities:Net earnings (loss)
    
    $
    35
    
    
    $
    (4,414
    )
    
    $
    1,942Adjustments to reconcile net earnings (loss) to
net cash provided by (used in) operating
activities:Depreciation and amortization
    
    
    3
    
    
    
    878
    
    
    
    1,032Changes in operating assets and liabilities, net
of effects of acquisitions:Accounts receivable
    
    
    (4,808
    )
    
    
    (5,994
    )
    
    
    2,280Inventories
    
    
    (408
    )
    
    
    (3,033
    )
    
    
    (552
    )Other assets
    
    
    (393
    )
    
    
    281
    
    
    
    (647
    )Accounts payable
    
    
    1,369
    
    
    
    6,481
    
    
    
    (604
    )Accrued expenses
    
    
    400
    
    
    
    2,476
    
    
    
    858Net cash provided by (used in) operating
activities
    
    
    (3,802
    )
    
    
    (3,325
    )
    
    
    4,309Investing activities:Acquisitions
    
    
    (1,664
    )
    
    
    (12,000
    )
    
    
    Purchases of property, plant and equipment
    
    
    (17
    )
    
    
    (2,424
    )
    
    
    (2,828
    )Net cash used in investing activities
    
    
    (1,681
    )
    
    
    (14,424
    )
    
    
    (2,828
    )Financing activities:Proceeds from notes payable
    
    
    
    
    
    
    17,750
    
    
    
    Payments of debt
    
    
    
    
    
    
    (655
    )
    
    
    (1,492
    )Payments of capital lease obligations
    
    
    (4
    )
    
    
    (22
    )
    
    
    (20
    )Debt issuance costs
    
    
    
    
    
    
    (278
    )
    
    
    Net change in restricted cash
    
    
    
    
    
    
    (935
    )
    
    
    135Investment from members
    
    
    6,298
    
    
    
    3,000
    
    
    
    Net cash (used in) provided by financing
activities
    
    
    6,294
    
    
    
    18,860
    
    
    
    (1,377
    )Increase in cash and cash equivalents
    
    
    811
    
    
    
    1,111
    
    
    
    104Cash at beginning of year
    
    
    
    
    
    
    811
    
    
    
    1,922Cash at end of year
    
    $
    811
    
    
    $
    1,922
    
    
    $
    2,026
 See
accompanying notes to the consolidated financial statements.
 97




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##### Table of Contents



CONSOLIDATED STATEMENTS OF MEMBERS EQUITY
  (Dollars in thousands)Balance at inception (June 20, 2003)
    
    $
    Capital contributions
    
    
    6,298Net loss
    
    
    35Balance, August 31, 2003
    
    
    6,333Net loss
    
    
    (4,414
    )Capital contributions
    
    
    3,000Balance, August 31, 2004
    
    
    4,919Net earnings
    
    
    1,942Balance, August 31, 2005
    
    $
    6,861
 See
accompanying notes to the consolidated financial statements.
 98




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Note 1Basis of Presentation
   Note 2Description of the Business
  Formation and Capital Contributions
  Acquisitions
  Inventory
    
    $
    1,834Accrued liabilities
    
    
    (170
    )
  Land
    
    $
    270Buildings
    
    
    2,178Equipment
    
    
    9,552
  99




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##### Table of Contents



Note 3Summary of Significant Accounting Policies
  Revenue Recognition
  Debt Issuance Costs
  Inventories
  Accounts Receivable
  Property, Plant and Equipment
   Impairment of Long-Lived Assets
  100




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##### Table of Contents



Income Taxes
  Fair Value of Financial Instruments
  Restricted Cash
  Use of Estimates
  Note 4Inventories
  2003
    
    
    2004
    
    
    2005Raw materials
    
    $
    515
    
    
    
    953
    
    
    $
    433Work in process
    
    
    1,440
    
    
    
    3,097
    
    
    
    4,781Finished products
    
    
    677
    
    
    
    1,520
    
    
    
    1,459Less reserves
    
    
    (390
    )
    
    
    (295
    )
    
    
    (846
    )Total inventories
    
    $
    2,242
    
    
    $
    5,275
    
    
    $
    5,827
 101




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##### Table of Contents



Note 5Long-Term Debt
  2003
    
    
    2004
    
    
    2005Enterprise bonds to the Director of
Development of the State of Ohio due on
December 1, 2010, at 3.90% interest
payable in quarterly installments to a
trustee pursuant to a payment schedule.
The bonds are guaranteed by the members
    
    $
    
    
    
    $
    9,345
    
    
    $
    8,000Term note payable to the State of Ohio, to
be comprised of two separate disbursements
of $1,000 at 1% interest (modified from 3%
in January 2005), with interest-only
payments until disbursement of the second
installment and monthly payments of
principal and interest thereafter,
reported net of debt discount of $65 in
2005
    
    
    
    
    
    
    1,000
    
    
    
    935Notes payable to the members, payable in
quarterly principal and interest payments
at 4% interest due November 2008
    
    
    
    
    
    
    6,750
    
    
    
    6,603
    
    
    
    17,095
    
    
    
    15,538Less current portion of debt
    
    
    
    
    
    
    2,370
    
    
    
    3,700Total long-term debt, net of current
portion
    
    $
    
    
    
    $
    14,725
    
    
    $
    11,838
  2006
    
    $
    3,7002007
    
    
    3,5912008
    
    
    3,6532009
    
    
    2,2332010
    
    
    1,801Thereafter
    
    
    560
    Note 6Capital Leases
  Note 7Related-Party Transactions
  102




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##### Table of Contents



Note 8Commitments and Contingencies
  2006
    
    $
    2412007
    
    
    672008
    
    
    552009
    
    
    462010
    
    
    44
     Note 9Business and Credit Concentrations
  Note 10Employee Benefit Plan
  Note 11Supplemental Cash Flow Data
    103




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##### Table of Contents



Item 9: Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A: Controls and Procedures
 Disclosure Controls and Procedures
  
 Item 9B: Other Information
  
 PART III
 
 Item 10: Directors and Executive Officers of the Registrant
   
 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
  104




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##### Table of Contents



Item 14: Principal Accountant Fees and Services
  
 Item 15: Exhibits, Financial Statement Schedules, and Reports on Form 8-K
     105




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##### Table of Contents



Signatures
  American Railcar Industries, Inc.Date: March 28, 2006By:
Name:
    
    /s/ James J. Unger

James J. UngerTitle:
    
    President and Chief Executive Officer
 Signature
    
    Title
    
    Date/s/ James J. Unger
    
    President and Chief Executive Officer
(principal executive officer) and
Director
    
    March 28, 2006Name: James J. Unger/s/ William P. Benac
    
    Chief Financial Officer (principal financial officer)
    
    March 28, 2006Name: William P. Benac/s/ Michael E. Vaughn
    
    Controller (principal accounting officer)
    
    March 28, 2006Name: Michael E. Vaughn/s/ Vincent J. Intrieri
    
    Director
    
    March 28, 2006Name: Vincent J. Intrieri/s/ Jon F. Weber
    
    Director
    
    March 28, 2006Name: Jon F. Weber/s/ Keith Meister
    
    Director
    
    March 28, 2006Name: Keith Meister/s/ James PontiousName: James Pontious
    
    Director
    
    March 28, 2006/s/ James LaisureName: James Laisure
    
    Director
    
    March 28, 2006
 106




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##### Table of Contents



Exhibit index
 ExhibitNo.
    
    Description of Exhibit1.1
    
    Underwriting Agreement by and among UBS Securities LLC, Bear Sterns & Co. Inc.
and American Railcar Industries dated January 2006 **2.1
    
    Agreement and Plan of Merger between American Railcar Industries, Inc. (Missouri)
and American Railcar Industries, Inc. (Delaware)**3.1
    
    Certificate of Incorporation of American Railcar Industries, Inc. (Delaware)*3.2
    
    Bylaws of American Railcar Industries, Inc. (Delaware)*3.3
    
    Certificate of Ownership and Merger of American Railcar Industries, Inc.
(Missouri) and American Railcar Industries, Inc. (Delaware)**4.1
    
    Specimen Common Stock Certificate of American Railcar Industries, Inc. (Delaware)*9.1
    
    Voting Agreement dated as of December 8, 2005 by and between MODAL LLC and the
Foundation for a Greater Opportunity*10.1
    
    Asset Transfer Agreement dated as of October 1, 1994 by and among ACF Industries,
Incorporated, American Railcar Industries, Inc. and Carl C. Icahn*10.2
    
    License Agreement dated as of October 1, 1994 by and between ACF Industries,
Incorporated and American Railcar Industries, Inc. as Licensee*10.3
    
    License Agreement dated as of October 1, 1994 by and between American Railcar
Industries, Inc. and ACF Industries, Incorporated as Licensee*10.4
    
    Manufacturing Services Agreement dated as of October 1, 1994 between ACF
Industries, Incorporated and American Railcar Industries, Inc., as ratified and
amended on June 30, 2005*10.5
    
    Amended and Restated Railcar Servicing Agreement dated as of June 30, 2005
between American Railcar Industries, Inc. and American Railcar Leasing LLC*10.6
    
    Business Consultation Agreement for Human Resources Consultation between ACF
Industries LLC and American Railcar Industries, Inc. dated April 1, 2005*10.7
    
    Business Consultation Agreement for Engineering Services between ACF Industries
LLC and American Railcar Industries, Inc. dated April 1, 2005*10.8
    
    Guaranty of the Master Lease Agreement dated September 30, 1999 between The CIT
Group, Inc./ Equipment Financing, Inc. and American Railcar Industries, Inc., as
amended by ACF Industries, Incorporated for the benefit of American Railcar
Industries, Inc.*10.9
    
    Loan Agreement dated as of July 1, 1996 between The Industrial Development
Authority of the City of Jackson, Missouri and American Railcar Industries, Inc.*10.9.A
    
    Bond Guaranty Agreement dated as of July 1, 1996 by and among American Railcar
Industries, Inc., ACF Industries, Incorporated and Fleet National Bank, as
Trustee*




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##### Table of Contents



ExhibitNo.
    
    Description of Exhibit10.9.B
    
    Deed of Trust and Security Agreement dated as of July 1, 1996 from American
Railcar Industries, Inc. to E. Sid Douglas, III, as Mortgage Trustee and The
Industrial Development Authority of The City of Jackson, Missouri as Issuer and
Secured Party*10.10
    
    Loan Agreement dated as of June 1, 1995 between The Industrial Development
Authority of The City of Kennett, Missouri and American Railcar Industries, Inc.*10.10.A
    
    Bond Guaranty Agreement dated as of June 1, 1995 by and among American Railcar
Industries, Inc., ACF Industries, Incorporated and Fleet National Bank, as
Trustee*10.10.B
    
    Deed of Trust and Security Agreement dated as of June 1, 1995 from American
Railcar Industries, Inc. to E. Sid Douglas, III as Mortgage Trustee and The
Industrial Development Authority of the City of Kennett, Missouri as Issuer and
Secured Party*10.11
    
    Lease Agreement dated as of April 1, 1995 between the City of Paragould, Arkansas
as Lessor and American Railcar Industries, Inc. as Lessee*10.11.A
    
    Bond Guaranty Agreement by and among American Railcar Industries, Inc. and ACF
Industries, Incorporated and Fleet National Bank, as Trustee*10.12
    
    Amended and Restated Services Agreement dated as of June 30, 2005 between
American Railcar Leasing LLC and American Railcar Industries, Inc.*10.13
    
    Indenture of Lease between St. Charles Properties and ACF Industries,
Incorporated for the property located at Clark and Second Streets, St. Charles,
MO, dated March 1, 2001 together with the Assignment and Assumption of Lease
dated April 1, 2005 among ACF Industries LLC (as successor to ACF Industries,
Incorporated), American Railcar Industries, Inc. and St. Charles Properties*10.14
    
    Promissory Note by American Railcar Industries, Inc. in favor of Arnos Corp.
dated as of December 17, 2004*10.15
    
    Exchange and Redemption Agreement dated as of June 30, 2005 among American
Railcar Industries, Inc., Hopper Investments, LLC, Highcrest Investors Corp.,
Buffalo Investors Corp. and American Railcar Leasing, LLC*10.16
    
    Loan and Security Agreement dated as of March 10, 2005 among American Railcar
Industries, Inc. as Borrower, the lenders from time to time party thereto, and
North Fork Business Capital Corporation, as Agent*10.17
    
    Corbitt Equipment Acquisition Agreement*10.18
    
    Multi-Year Purchase and Sale Agreement dated as of July 29, 2005 between American
Railcar Industries, Inc. and The CIT Group/Equipment Financing, Inc.*10.19
    
    American Railcar Industries, Inc. 2005 Equity Incentive Plan*10.21
    
    Promissory Note by American Railcar Industries, Inc. in favor of ACF Industries
Holding Corp. dated as of January 1, 2005*10.22
    
    Assignment and Assumption, Novation and Release dated as of June 30, 2005 by and
between ACF Industries Holding, Inc., American Railcar Industries, Inc.,
Gunderson Specialty Products, Inc., Gunderson, Inc., Castings, LLC, ASF-Keystone,
Inc., Amsted Industries Incorporation and Ohio Castings Company, LLC*10.23
    
    Interest Transfer Agreement dated as of June 30, 2005 by and between ACF
Industries Holding, Inc. and American Railcar Industries, Inc.*




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##### Table of Contents



ExhibitNo.
    
    Description of Exhibit10.24
    
    Redemption Agreement between American Railcar Industries, Inc. and Vegas
Financial Corp. dated as of January 3, 2006 *10.25
    
    Ohio Castings Company, LLC Amended and Restated Limited Liability Company
Agreement, dated as of June 20, 2003*10.26
    
    Employment Agreement between American Railcar Industries, Inc. and James J.
Unger, dated as of November 18, 2005*10.27
    
    Letter Agreement between American Railcar Industries, Inc. and James J. Unger,
dated as of November 18, 2005*10.28
    
    Form of Option Agreement*10.29
    
    American Railcar Industries, Inc. 2005 Executive Incentive Plan*10.30
    
    Amended and Restated Employment Agreement dated as of January 4, 2006 between
American Railcar Industries, Inc. and James A. Cowan*10.31
    
    Employee Benefit Plan Agreement dated as of December 1, 2005 between American
Railcar Industries, Inc. and ACF Industries LLC.*10.32
    
    Trademark License Agreement dated as of June 30, 2005 by and between American
Railcar Industries, Inc. and American Railcar Leasing LLC.*10.33
    
    Summary Plan Description of Executive Survivor Insurance Plan Program of
Insurance Benefits for Salaried Employees of American Railcar Industries, Inc.*10.34
    
    Supplemental Executive Retirement Plan of American Railcar Industries, Inc.**10.35
    
    Amended and Restated Loan and Security Agreement among American Railcar
Industries, Inc., certain Lenders and North Fork Business Capital Corporation, as
agent.**21.1
    
    Subsidiaries of American Railcar Industries, Inc.*31.1
    
    Rule 13a-15(e) and 15d-15(e)
Certification of the Chief Executive Officer. **31.2
    
    Rule 13a-15(e) and 15d-15(e) Certification of the Chief Financial Officer. **32
    
    Certification pursuant to 18 U.S.C.,
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **
 
 *
    
    We previously filed this as an exhibit to our Registration Statement on Form S-1 as amended
(Registration No. 33-330284), and the previously filed exhibit is incorporated herein by reference.**
    
    Filed herewith.
    
    Confidential treatment has been requested for the redacted portions of this agreement. A complete
copy of this agreement, including the redacted portions has been filed separately with the
Securities and Exchange Commission.