##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 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
 þ o
 o
 Rule 12b-2
 Large Accelerated Filer o
    
    Accelerated Filer þ
    
    Non-Accelerated Filer o
    
    Smaller Reporting Company o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
  
    
    the impact of the current economic downturn and restricted credit markets, and the
impact of the continuation of these conditions;
 
    
    the health of and prospects for the overall railcar industry;
 
    
    our prospects in light of the cyclical nature of our business and the current economic
environment;
 
    
    anticipated trends relating to our shipments, revenues, financial condition or results
of operations;
 
    
    the sufficiency of our liquidity and capital resources;
 
    
    the conversion of our railcar backlog into revenues;
 
    
    anticipated production schedules for our products and the anticipated construction and
production schedules of our joint ventures;
 
    
    the impact and anticipated benefits of any acquisitions we may complete;
 
    
    the impact and costs and expenses of any litigation we may be subject to now or in the
future;
 
    
    compliance with covenants contained in our senior unsecured senior notes and in our
revolving credit facility; and
 
    
    the ongoing benefits and risks related to our relationship with Mr. Carl C. Icahn, our
principal beneficial stockholder and the chairman of our board of directors, and certain of
his affiliates.
   2




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##### 



AMERICAN RAILCAR INDUSTRIES, INC.
 FORM 10-K
 TABLE OF CONTENTS
 PAGEPART IItem 1. Business
    
    
    4Item 1A. Risk Factors
    
    
    11Item 1B. Unresolved Staff Comments
    
    
    23Item 2. Properties
    
    
    23Item 3. Legal Proceedings
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    25PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    25Item 6. Selected Consolidated Financial Data
    
    
    28Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    29Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    47Item 8. Financial Statements and Supplementary Data
    
    
    48Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    93Item 9A. Controls and Procedures
    
    
    93Item 9B. Other Information
    
    
    93PART IIIItem 10. Directors, Executive Officers and Corporate Governance of the Registrant
    
    
    95Item 11. Executive Compensation
    
    
    95Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    95Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    95Item 14. Principal Accountant Fees and Services
    
    
    96PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    96Signatures
    
    
    97Exhibit 12.1Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1
   3




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##### Table of Contents



AMERICAN RAILCAR INDUSTRIES, INC.
FORM 10-K
 
 PART I
 
 Item 1: Business
 INTRODUCTION
     ADDITIONAL INFORMATION
 http://www.americanrailcar.com
 http://www.sec.gov http://www.americanrailcar.com
 ® ® ®
 OUR HISTORY
    4




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OUR PRODUCTS AND SERVICES
  Manufacturing Operations
  Covered hopper railcars
  ®
  
    
    Grain Railcars.These railcars are a large group of covered hopper railcars within our
general service covered hopper railcar product offering. These grain railcars service the
food markets, starch markets and energy markets. For example, these railcars carry
shipments of grain to animal feedstock processing plants, grain mills and ethanol
facilities.
 
    
    Cement Railcars.Cement loads are heavier than many other loads of comparable volume,
and therefore cement railcars are smaller to compensate for the weight. Consequently, we
can build more cement covered hopper railcars per day than we can build of any other
covered hopper railcar that we manufacture.
  5




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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. Examples of such cargo would be food grade plastic pellets used in the
production of food and medical product containers.
 
    
    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. 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 and a rupture disc.
 Tank railcars
   Other railcar types
  Component manufacturing
   Railcar Services
   6




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##### Table of Contents



Repair and refurbishment
  Fleet management
  SALES AND MARKETING
   BACKLOG
   Years
Ended December 31,2008
    
    
    2007Railcar backlog at January 1
    
    
    11,929
    
    
    
    16,473New railcars delivered
    
    
    (7,965
    )
    
    
    (7,055
    )New railcar orders
    
    
    279
    
    
    
    2,511Railcar backlog at December 31
    
    
    4,243
    
    
    
    11,929Estimated railcar backlog value at end
of period (in thousands) 1
    
    $
    373,062
    
    
    $
    966,470
 (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 reflects known price adjustments for material cost changes
but does not reflect a projection of any future material price adjustments that are provided
for in certain customer contracts.  7




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SUPPLIERS AND MATERIALS
     Steel
  Tank heads and floor sheet reinforcements
  Castings
   8




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Wheels and brakes
  Axles
  COMPETITION
    INTELLECTUAL PROPERTY
  EMPLOYEES
   9




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REGULATION
  ENVIRONMENTAL MATTERS
       10




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Item 1A: Risk Factors
 RISKS RELATED TO OUR BUSINESS
 The highly cyclical nature of the railcar industry may result in lower revenues during economic
downturns.
   We depend upon a small number of customers that represent a large percentage of our revenues. The
loss of any single significant customer, a reduction in sales to any such significant customer or
any such significant customers inability to pay us in a timely manner could have a material
adverse effect on our business, financial condition and results of operations.
  We operate in a highly competitive industry and we may be unable to compete successfully, which
would materially adversely affect our results of operations.
   11




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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.
  The cost of raw materials and components that we use to manufacture railcars, particularly steel,
are subject to escalation and surcharges and could 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.
    12




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Fluctuations in the supply of components and raw materials we use in manufacturing railcars, which
are often only available from a limited number of suppliers, 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.
   Equipment failures, delays in deliveries or extensive damage to our facilities, particularly our
railcar manufacturing complexes in Paragould or Marmaduke, Arkansas, could lead to production or
service curtailments or shutdowns.
   The variable purchase patterns of our railcar customers and the timing of completion, customer
acceptance and shipment of 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 efforts to manage overhead and production slowdowns may result in the loss of key employees.
   13




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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 and we may have difficulty integrating the operations of any
companies that we acquire, which may adversely affect our results of operations.
    Our failure, or the failure of our joint ventures to complete capital expenditure projects on time
and within budget, or the failure of these projects, once constructed, to operate as anticipated
could materially adversely affect our business, financial condition and results of operations.
  If we lose any of our executive officers or key employees, our operations and ability to manage the
day-to-day aspects of our business may be materially adversely affected.
   14




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Uncertainty surrounding acceptance of our new railcar offerings by our customers, and costs
associated with those new offerings, could materially adversely affect our business.
  Our reliance on the railroads to provide a means of transportation for our railcars may cause our
revenues and income from operations to vary each quarter, which could result in fluctuations in our
quarterly results.
  We are subject to a variety of environmental, health and safety 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.
     15




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As a public company, we are required to comply with the reporting obligations of the Exchange Act
and are 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, or if we
fail to 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.
  If we face labor shortages or increased labor costs, our growth and results of operations could be
materially adversely affected.
  Our Ohio Castings, Axis and India joint ventures, and our relationships with our partners in those
joint ventures, may not be successful, which could materially adversely affect our business.
  Our investment activities are subject to risks that may adversely affect our results of operations,
liquidity and financial condition.
    Companies affiliated with Mr. Carl C. Icahn are important customers, suppliers and manufacturers.
   16




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If a sublease provided to us by ARL, an entity controlled by Mr. Carl C. Icahn, is terminated, we
may need to find new headquarters space, which may require us to incur additional costs.
  As a public company, we may have reduced access to resources of, and benefits provided by, entities
affiliated with Mr. Carl C. Icahn.
  We are involved in investigation and remediation activities relating to facilities previously owned
by ACF, which may have a material adverse effect on our business, financial condition and results
of operations if significant liabilities relating to these activities arise and ACF is not able to
honor the obligations.
   17




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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.
  Changes in assumptions or investment performance related to 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.
  Our revolving credit facility, as amended, and our unsecured senior notes contain, and any
additional financing we may obtain could contain, covenants that restrict our ability to engage in
certain transactions and may impair our ability to respond to changing business and economic
conditions.
  
    
    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.
  18




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Our substantial indebtedness, as a result of the offering of our outstanding unsecured senior
notes, could adversely affect our operations and financial results and prevent us from fulfilling
our obligations under the notes.
  
    
    make it more difficult for us to satisfy our obligations with respect to the notes and
other indebtedness;
 
    
    increase our vulnerability to general economic and industry conditions;
 
    
    require us to dedicate a substantial portion of our cash flow from operations to
payments on our indebtedness, which would reduce the availability of our cash flow to fund
working capital, capital expenditures, expansion efforts and other general corporate
purposes;
 
    
    limit our flexibility in planning for, or reacting to, changes in our business and the
industry in which we operate;
 
    
    place us at a competitive disadvantage compared to our competitors that have less debt;
and
 
    
    limit, among other things, our ability to borrow additional funds for working capital,
capital expenditures, general corporate purposes or acquisitions. Failure to comply with
these covenants could result in an event of default, which, if not cured or waived, could
have a significant adverse effect on us.
 Despite our substantial indebtedness, we may still be able to incur substantially more debt, as may
our subsidiaries, which could further exacerbate the risks associated with our substantial
indebtedness.
  We may not be able to generate sufficient cash flow to service all of our obligations, including
our obligations under our revolving credit facility and unsecured senior notes.
   19




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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.
    Our products could infringe the intellectual property rights of others, which may lead to
litigation that could itself be costly, result in the payment of substantial damages or royalties,
and 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 be costly and time-consuming
even if possible.
  20




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Increasing insurance claims and expenses could lower profitability and increase business risk.
  Our failure to comply with regulations imposed by Federal and foreign agencies could negatively
affect our financial results.
  Reductions in the availability of energy supplies or an increase in energy costs may increase our
operating costs.
  We may be required to reduce the value of our inventory, long-lived assets and/or goodwill, which
could materially adversely affect our financial condition and results of operations.
    21




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The price of our common stock is subject to volatility.
     Our stock price may decline due to sales of shares by Mr. Carl C. Icahn and other stockholders.
   Mr. Carl C. Icahn exerts significant influence over us and his interests may conflict with the
interest of our other stockholders.
    22




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We are a controlled company within the meaning of the NASDAQ Global Market rules and therefore we
are not 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 may be restricted by Delaware law. Our revolving credit facility, as amended, and our
senior unsecured notes, contain provisions that limit our ability to pay dividends.
  
 Item 1B: Unresolved Staff Comments
  
 Item 2: Properties
   23




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LeaseLeased or
    
    ExpirationLocation
    
    Use
    
    Owned
    
    DateParagould, Arkansas
    
    Railcar manufacturing
    
    Owned
    
    N/AMarmaduke, Arkansas
    
    Railcar manufacturing
    
    Owned
    
    N/AJackson, Missouri
    
    Railcar components manufacturing
    
    Owned
    
    N/AKennett, Missouri
    
    Railcar subassembly and small
components manufacturing
    
    Owned
    
    N/ALongview, Texas
    
    Steel foundry
    
    Owned
    
    N/ASt. Charles, Missouri
    
    Aluminum foundry and machining
    
    Leased
    
    2/28/2011
  LeaseLeased or

    
    ExpirationLocation
    
    Owned

    
    DateLongview, Texas
    
    Owned
    
    
    N/AGoodrich, Texas
    
    Owned
    
    
    N/ANorth Kansas City, Missouri
    
    Owned
    
    
    N/ATennille, Georgia
    
    Owned
    
    
    N/AMilton, Pennsylvania
    
    Owned
    
    
    N/A
    (1)Bude, Mississippi
    
    Leased
    
    
    4/30/2009
    (2)Sarnia, Ontario
    
    Leased
    
    
    10/31/2026
    (3)Gonzales, Louisiana
    
    Leased
    
    
    3/31/2010La Porte, Texas
    
    Leased
    
    
    5/31/2010
    (4)Green River, Wyoming
    
    Leased
    
    
    12/1/2012
    (5)
  (1)
    
    The facility in Milton, Pennsylvania has been idle since 2003.(2)
    
    The majority of the facility in Bude, Mississippi is subject to a lease from the city that
expires on April 30, 2009. This lease automatically renews on May 1, 2009, for one year, and
contains a termination clause
requiring six months advance notice. We currently intend to remain in this facility. The
remaining portion of the facility in Bude, Mississippi, is subject to a county lease that
expires on February 28, 2014.(3)
    
    The land this facility is located on is subject to a lease that expires on October 31, 2026
and automatically renews for twenty years.(4)
    
    We moved into this property June 2008 under a lease that expires on May 31, 2010. In
conjunction with the lease, we also entered into a separate sales contract to purchase the
property at the time the lease expires.(5)
    
    The land this facility is located on is subject to a lease
from the State. The lease will expire on December 1, 2017.  24




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Item 3: Legal Proceedings
 OCI Chemical Corporation v. American Railcar
Industries, Inc.
 Nicole Lerma v. American
Railcar Industries, Inc.
  
 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
   25




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PricesYear Ended December 31, 2008
    
    High
    
    
    LowQuarter ended March 31, 2008
    
    $
    25.51
    
    
    $
    15.81Quarter ended June 30, 2008
    
    
    22.28
    
    
    
    16.78Quarter ended September 30, 2008
    
    
    23.00
    
    
    
    15.04Quarter ended December 31, 2008
    
    
    15.63
    
    
    
    6.10
 Year Ended December 31, 2007
    
    High
    
    
    LowQuarter ended March 31, 2007
    
    $
    34.36
    
    
    $
    26.80Quarter ended June 30, 2007
    
    
    43.46
    
    
    
    29.03Quarter ended September 30, 2007
    
    
    42.31
    
    
    
    20.30Quarter ended December 31, 2007
    
    
    24.08
    
    
    
    12.95
 Year Ended December 31, 2006
    
    High
    
    
    LowQuarter ended March 31, 2006
    
    $
    36.94
    
    
    $
    23.40Quarter ended June 30, 2006
    
    
    40.96
    
    
    
    25.82Quarter ended September 30, 2006
    
    
    33.47
    
    
    
    26.32Quarter ended December 31, 2006
    
    
    34.48
    
    
    
    27.40
 Dividend Policy and Restrictions
   26




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Performance Graph
 The following Performance Graph and related information shall not be deemed soliciting material
or to be filed with the Securities and Exchange Commission, nor shall such information be
incorporated by reference into any future filing under the Securities Act of 1933 or Securities
Exchange Act of 1934, each as amended, except to the extent that the Company specifically
incorporates it by reference into such filing.
  
  27




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Item 6: Selected Consolidated Financial Data.
  Years Ended December 31,2008
    
    
    2007
    
    

2006 (8)
    
    
    2005
    
    
    2004($ in thousands, except per share data)Consolidated statement of operations data:RevenuesManufacturing operations (1)
    
    $
    757,505
    
    
    $
    648,124
    
    
    $
    597,913
    
    
    $
    564,513
    
    
    $
    316,432Railcar services (2)
    
    
    51,301
    
    
    
    50,003
    
    
    
    48,139
    
    
    
    43,647
    
    
    
    38,624Total revenues
    
    
    808,806
    
    
    
    698,127
    
    
    
    646,052
    
    
    
    608,160
    
    
    
    355,056Cost of revenueManufacturing operations
    
    
    (682,744
    )
    
    
    (568,023
    )
    
    
    (537,344
    )
    
    
    (518,063
    )
    
    
    (306,283
    )Railcar services (3)
    
    
    (41,653
    )
    
    
    (41,040
    )
    
    
    (38,020
    )
    
    
    (38,041
    )
    
    
    (34,473
    )Total cost of revenue
    
    
    (724,397
    )
    
    
    (609,063
    )
    
    
    (575,364
    )
    
    
    (556,104
    )
    
    
    (340,756
    )Gross profit
    
    
    84,409
    
    
    
    89,064
    
    
    
    70,688
    
    
    
    52,056
    
    
    
    14,300Income related to insurance
recoveries, net
    
    
    
    
    
    
    
    
    
    
    9,946
    
    
    
    
    
    
    
    Gain on asset conversion, net
    
    
    
    
    
    
    
    
    
    
    4,323
    
    
    
    
    
    
    
    Selling, administrative and other (4)
    
    
    (26,535
    )
    
    
    (27,379
    )
    
    
    (28,399
    )
    
    
    (25,354
    )
    
    
    (10,334
    )Operating earnings
    
    
    57,874
    
    
    
    61,685
    
    
    
    56,558
    
    
    
    26,702
    
    
    
    3,966Interest income (5)
    
    
    7,835
    
    
    
    13,829
    
    
    
    1,504
    
    
    
    1,658
    
    
    
    4,422Interest expense (6)
    
    
    (20,299
    )
    
    
    (17,027
    )
    
    
    (1,372
    )
    
    
    (4,846
    )
    
    
    (3,667
    )Other income
    
    
    3,657
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) from joint venture
    
    
    718
    
    
    
    881
    
    
    
    (734
    )
    
    
    610
    
    
    
    (609
    )Earnings before income tax expense
    
    
    49,785
    
    
    
    59,368
    
    
    
    55,956
    
    
    
    24,124
    
    
    
    4,112Income tax expense
    
    
    (18,403
    )
    
    
    (22,104
    )
    
    
    (20,752
    )
    
    
    (9,356
    )
    
    
    (2,191
    )Net earnings from continuing
operations
    
    $
    31,382
    
    
    $
    37,264
    
    
    $
    35,204
    
    
    $
    14,768
    
    
    $
    1,921Less preferred dividends
    
    
    
    
    
    
    
    
    
    
    (568
    )
    
    
    (13,251
    )
    
    
    (13,241
    )Net earnings (loss) available to
common shareholders
    
    $
    31,382
    
    
    $
    37,264
    
    
    $
    34,636
    
    
    $
    1,517
    
    
    $
    (11,320
    )Weighted average shares
outstanding-basic (7)
    
    
    21,302
    
    
    
    21,274
    
    
    
    20,667
    
    
    
    11,147
    
    
    
    10,143Net earnings (loss) per common
share-basic (7)
    
    $
    1.47
    
    
    $
    1.75
    
    
    $
    1.68
    
    
    $
    0.14
    
    
    $
    (1.12
    )Weighted average shares
outstanding-diluted (7)
    
    
    21,302
    
    
    
    21,357
    
    
    
    20,733
    
    
    
    11,147
    
    
    
    10,143Net earnings
(loss) per common
share-diluted (7)
    
    $
    1.47
    
    
    $
    1.74
    
    
    $
    1.67
    
    
    $
    0.14
    
    
    $
    (1.12
    )Dividends declared per common share
    
    $
    0.12
    
    
    $
    0.12
    
    
    $
    0.12
    
    
    
    
    
    
    
    Consolidated balance sheet data (at year end):Cash and cash equivalents
    
    $
    291,788
    
    
    $
    303,882
    
    
    $
    40,922
    
    
    $
    28,692
    
    
    $
    6,943Net working capital
    
    
    376,106
    
    
    
    380,111
    
    
    
    126,086
    
    
    
    25,768
    
    
    
    46,565Net property, plant and equipment
    
    
    206,936
    
    
    
    175,166
    
    
    
    130,293
    
    
    
    92,985
    
    
    
    76,951Total assets
    
    
    679,654
    
    
    
    654,384
    
    
    
    338,926
    
    
    
    268,580
    
    
    
    356,840Total liabilities
    
    
    364,929
    
    
    
    363,396
    
    
    
    88,746
    
    
    
    161,820
    
    
    
    221,817Total shareholders equity
    
    
    314,725
    
    
    
    290,988
    
    
    
    250,180
    
    
    
    106,760
    
    
    
    135,023Consolidated cash flow data:Net cash provided by (used in)
operating activities
    
    $
    44,322
    
    
    $
    60,230
    
    
    $
    29,967
    
    
    $
    41,571
    
    
    $
    (17,082
    )Net cash used in investing activities
    
    
    (53,812
    )
    
    
    (67,434
    )
    
    
    (51,704
    )
    
    
    (22,580
    )
    
    
    (11,037
    )Net cash (used in) provided by
financing activities
    
    
    (2,604
    )
    
    
    270,164
    
    
    
    33,967
    
    
    
    2,758
    
    
    
    34,997
  28




---



##### Table of Contents



(1)
    
    Includes revenues from transactions with affiliates of $182.8 million, $140.2 million, $50.0
million, $47.2 million and $64.4 million in 2008, 2007, 2006, 2005 and 2004, respectively.(2)
    
    Includes revenues from transactions with affiliates of $15.3 million, $16.0 million, $18.9
million, $20.6 million and $19.4 million in 2008, 2007, 2006, 2005 and 2004, respectively.(3)
    
    2005 includes $2.0 million charge for pension settlement.(4)
    
    Includes costs from transactions with affiliates of $0.6 million, $0.6 million, $2.0 million,
$2.0 million and $0.7 million in 2008, 2007, 2006, 2005 and 2004, respectively. 2005 includes
$8.9 million charge for pension settlement.(5)
    
    Includes interest income from affiliates of less than $0.1 million in 2008, 2007 and 2006 and
$1.0 million and $3.9 million in 2005 and 2004, respectively.(6)
    
    Includes interest expense to affiliates of zero, zero, $0.1 million, $2.1 million and $1.5
million in 2008, 2007, 2006, 2005 and 2004, respectively.(7)
    
    Share and per share data has been restated to give effect to the merger of ARI and its
wholly-owned subsidiary, American Railcar Industries, Inc. the surviving entity.(8)
    
    Includes the acquisition of Custom Steel effective as of March 31, 2006, which provided cost
savings during 2006 within our cost of revenue manufacturing operations. 
 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,
including 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
      29




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##### Table of Contents



FACTORS AFFECTING OPERATING RESULTS
  Cyclicality of the railcar industry and effect of economic conditions
  Customer concentration
  Customer order size and frequency
  Revenues from affiliates
   30




---



##### Table of Contents



Raw material costs
  Component supply constraints
  RESULTS OF OPERATIONS
  Years Ended December 31,2008
    
    
    2007
    
    
    2006RevenuesManufacturing operations
    
    
    93.7
    %
    
    
    92.8
    %
    
    
    92.5
    %Railcar services
    
    
    6.3
    %
    
    
    7.2
    %
    
    
    7.5
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of revenueManufacturing operations
    
    
    (84.4
    %)
    
    
    (81.4
    %)
    
    
    (83.2
    %)Railcar services
    
    
    (5.2
    %)
    
    
    (5.9
    %)
    
    
    (5.9
    %)Total cost of revenue
    
    
    (89.6
    %)
    
    
    (87.3
    %)
    
    
    (89.1
    %)Gross profit
    
    
    10.4
    %
    
    
    12.7
    %
    
    
    10.9
    %Income related to insurance
recoveries, net
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    1.5
    %Gain on asset conversion, net
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.7
    %Selling, administrative and other
expenses
    
    
    (3.3
    %)
    
    
    (3.9
    %)
    
    
    (4.4
    %)Earnings from operations
    
    
    7.1
    %
    
    
    8.8
    %
    
    
    8.7
    %Interest income
    
    
    1.0
    %
    
    
    2.0
    %
    
    
    0.2
    %Interest expense
    
    
    (2.5
    %)
    
    
    (2.4
    %)
    
    
    (0.2
    %)Other income
    
    
    0.5
    %
    
    
    0.0
    %
    
    
    0.0
    %Income (loss) from joint venture
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    (0.1
    %)Earnings before income tax expense
    
    
    6.2
    %
    
    
    8.5
    %
    
    
    8.6
    %Income tax expense
    
    
    (2.3
    %)
    
    
    (3.2
    %)
    
    
    (3.2
    %)Net earnings
    
    
    3.9
    %
    
    
    5.3
    %
    
    
    5.4
    %
 Year ended December 31, 2008 compared to year ended December 31, 2007
 Revenues
   31




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##### Table of Contents



Gross profit
    Selling, administrative and other expenses
     32




---



##### Table of Contents



Interest expense and interest income
    Other Income
   Income from joint ventures
  Income tax expense
  Year ended December 31, 2007 compared to the year ended December 31, 2006
 Revenues
    33




---



##### Table of Contents



Gross profit
    Income Related to Insurance Recoveries, Net and Gain on Asset Conversion, Net
     34




---



##### Table of Contents



Year EndedDecember 31, 2006(in thousands)Property damage insurance claim
    
    $
    11,160Property damage claim deductible
    
    
    (100
    )Property damage insurance settlement, net
    
    
    11,060Assets damaged, clean up costs, repair costs
    
    
    (6,737
    )Gain on asset conversion, net
    
    $
    4,323
   Year EndedDecember 31, 2006(in thousands)Business interruption insurance claim
    
    $
    15,968Business interruption claim deductible
    
    
    (600
    )Business interruption insurance settlement, net
    
    
    15,368Continuing expenses
    
    
    (5,430
    )Deductible adjustment
    
    
    8Income related to insurance recoveries, net
    
    $
    9,946
 Selling, administrative and other expenses
    Interest expense and interest income
   35




---



##### Table of Contents



Income (loss) from joint venture
  Income tax expense
  LIQUIDITY AND CAPITAL RESOURCES
  Outstanding and Available Debt
 Senior unsecured notes
   Revolving credit facility
   36




---



##### Table of Contents



Cash Flows from Operating Activities
     Cash Flow from Investing Activities
     37




---



##### Table of Contents



Capital expenditures
    Future Liquidity
     38




---



##### Table of Contents



Dividends
  Contractual Obligations
  Payments due by PeriodContractual Obligations
    
    Total
    
    
    1 year
    
    
    2-3 years
    
    
    4-5 years
    
    
    After 5 years(in thousands)Operating Lease Obligations 1
    
    $
    5,367
    
    
    
    783
    
    
    
    781
    
    
    
    515
    
    
    
    3,288Purchase Obligations
    
    $
    8,100
    
    
    
    7,435
    
    
    
    665
    
    
    
    
    
    
    
    Senior Unsecured Notes 2
    
    $
    275,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    275,000Interest payments on senior unsecured
notes 3
    
    $
    113,438
    
    
    
    20,625
    
    
    
    41,250
    
    
    
    41,250
    
    
    
    10,313Fees related
to Revolving Credit Agreement 4
    
    $
    333
    
    
    
    333
    
    
    
    
    
    
    
    
    
    
    
    Pension Funding 5
    
    $
    7,384
    
    
    
    538
    
    
    
    2,697
    
    
    
    2,467
    
    
    
    1,682Postretirement Funding 6
    
    $
    1,149
    
    
    
    113
    
    
    
    241
    
    
    
    242
    
    
    
    553Total
    
    $
    410,771
    
    
    $
    29,827
    
    
    $
    45,634
    
    
    $
    44,474
    
    
    $
    290,836
 (1)
    
    The operating lease commitment includes the future minimum rental payments required under
non-cancelable operating leases for property and equipment leased by us.(2)
    
    On February 28, 2007, we issued $275.0 million of senior unsecured notes that are due on
March 1, 2014.(3)
    
    The interest rate on these notes is 7.5%. These notes have interest payments due semiannually
on March 1 and September 1 of every year.(4)
    
    Our revolving credit facility, as amended, permits us to borrow up to $100.0 million, subject
to applicable covenants, until expiration in October 2009. We have no borrowings outstanding
on this revolving credit facility as of December 31, 2008.(5)
    
    Our pension funding commitments includes minimum funding contributions required by law for
our two funded pension plans as well as expected benefit payments for our one unfunded pension
plan.(6)
    
    Our postretirement health care benefit plan is unfunded thus the Company must fund benefit
payments.   39




---



##### Table of Contents



Contingencies
    40




---



##### Table of Contents



OCI Chemical Corporation v. American Railcar
Industries, Inc.
 Jennifer Nicole Lerma v.
American Railcar
Industries, Inc.
  CRITICAL ACCOUNTING ESTIMATES AND POLICIES
   41




---



##### Table of Contents



Revenue Recognition
  Inventory
  Long-lived Assets
  Goodwill
  Goodwill and Other Intangible
Assets
  42




---



##### Table of Contents



Product Warranties
  Income Taxes
   43




---



##### Table of Contents



Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statements No. 109,
Accounting for Income Taxes
 Pension and Postretirement Benefits
  Discount rates
  Health care cost trend rates
  Compensation increase
  Expected return on plan assets
  Mortality and retirement rates
    44




---



##### Table of Contents



Effect on DecemberEffect on 2009 Pre-Tax
    
    
    31, 2008 ProjectedChange in Assumption
    
    Pension Expense
    
    
    Benefit Obligation($ in thousands)1% decrease in discount rate
    
    
    152
    
    
    
    2,1621% increase in discount rate
    
    
    (124
    )
    
    
    (1,783
    )1% decrease in expected return
on assets
    
    
    107
    
    
    
    N/A1% increase in expected return
on assets
    
    
    (107
    )
    
    
    N/A
  Effect on 2009 Pre-Tax
    
    
    Effect on DecemberPostretirement Service
    
    
    31, 2008 ProjectedChange in Assumption
    

Cost and Interest Cost
    
    
    Benefit Obligation($ in thousands)1% decrease in discount rate
    
    
    20
    
    
    
    5431% increase in discount rate
    
    
    (17
    )
    
    
    (416
    )
  Effect on 2009 Pre-Tax
    
    
    Effect on DecemberPostretirement Service
    
    
    31, 2008 ProjectedChange in Assumption
    

Cost and Interest Cost
    
    
    Benefit Obligation($ in thousands)1% decrease in health care cost trend rate
    
    
    (47
    )
    
    
    (398
    )1% increase in health care cost trend rate
    
    
    61
    
    
    
    507
  Environmental
   45




---



##### Table of Contents



Stock Based Compensation
 Share-Based Payment (SFAS 123(R)) Accounting for
Stock-Based Compensation Accounting for Stock Issues to Employees.
    Fair Value of Financial Instruments
 Fair Value Measurements
 Recent accounting pronouncements
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statementsan amendment of ARB No. 51
  46




---



##### Table of Contents



Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133
 OFF BALANCE SHEET ARRANGEMENTS
  
 Item 7A: Quantitative and Qualitative Disclosures About Market Risk
      47




---



##### 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
    
    
    49Report of Grant Thornton LLP Independent Registered Public Accounting Firm
    
    
    50Consolidated Balance Sheets as of December 31, 2008 and 2007
    
    
    51Consolidated Statements of Operations for the years ended December 31,
2008, 2007 and 2006
    
    
    52Consolidated Statements of Cash Flows for the years ended December 31,
2008, 2007 and 2006
    
    
    53Consolidated Statement of Shareholders Equity and Comprehensive Income
for the years ended December 31, 2008, 2007 and 2006
    
    
    55Notes to Consolidated Financial Statements
    
    
    56
  48




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal ControlIntegrated Framework
    Internal ControlIntegrated Framework .
  
  49




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Internal
ControlIntegrated Framework
  
  50




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS
  As ofDecember 31,
    
    
    December 31,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    291,788
    
    
    $
    303,882Short-term investments  available for sale securities
    
    
    2,565
    
    
    
    Accounts receivable, net
    
    
    39,725
    
    
    
    33,523Accounts receivable, due from affiliates
    
    
    10,283
    
    
    
    17,175Inventories, net
    
    
    97,245
    
    
    
    93,475Prepaid expenses and other current assets
    
    
    5,314
    
    
    
    5,015Deferred tax assets
    
    
    2,297
    
    
    
    1,610Total current assets
    
    
    449,217
    
    
    
    454,680Property, plant and equipment, net
    
    
    206,936
    
    
    
    175,166Deferred debt issuance costs
    
    
    3,204
    
    
    
    3,977Goodwill
    
    
    7,169
    
    
    
    7,169Other assets
    
    
    37
    
    
    
    37Investment in joint ventures
    
    
    13,091
    
    
    
    13,355Total assets
    
    $
    679,654
    
    
    $
    654,384Liabilities and Stockholders EquityCurrent liabilities:Current portion of long-term debt
    
    $
    
    
    
    $
    8Accounts payable
    
    
    42,201
    
    
    
    47,903Accounts payable, due to affiliates
    
    
    5,193
    
    
    
    2,867Accrued expenses and taxes
    
    
    7,758
    
    
    
    5,866Accrued compensation
    
    
    10,413
    
    
    
    10,379Accrued interest expense
    
    
    6,907
    
    
    
    6,907Accrued dividends
    
    
    639
    
    
    
    639Total current liabilities
    
    
    73,111
    
    
    
    74,569Senior unsecured notes
    
    
    275,000
    
    
    
    275,000Deferred tax liability
    
    
    4,683
    
    
    
    5,690Pension and post-retirement liabilities, less current portion
    
    
    9,024
    
    
    
    6,435Other liabilities
    
    
    3,111
    
    
    
    1,702Total liabilities
    
    
    364,929
    
    
    
    363,396Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity:Common stock, $0.01 par value, 50,000,000 shares authorized,
21,302,296 shares issued and outstanding at December 31,
2008 and 2007
    
    
    213
    
    
    
    213Additional paid-in capital
    
    
    239,617
    
    
    
    239,621Retained earnings
    
    
    80,035
    
    
    
    51,314Accumulated other comprehensive loss
    
    
    (5,140
    )
    
    
    (160
    )Total stockholders equity
    
    
    314,725
    
    
    
    290,988Total liabilities and stockholders equity
    
    $
    679,654
    
    
    $
    654,384
   51




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Revenues:Manufacturing operations (including revenues from affiliates of $182,760,
$140,164 and $50,003 in 2008, 2007 and 2006, respectively)
    
    $
    757,505
    
    
    $
    648,124
    
    
    $
    597,913Railcar services (including revenues from affiliates of $15,338, $15,969
and $18,923 in 2008, 2007 and 2006, respectively)
    
    
    51,301
    
    
    
    50,003
    
    
    
    48,139Total revenues
    
    
    808,806
    
    
    
    698,127
    
    
    
    646,052Cost of revenue:Manufacturing operations
    
    
    (682,744
    )
    
    
    (568,023
    )
    
    
    (537,344
    )Railcar services
    
    
    (41,653
    )
    
    
    (41,040
    )
    
    
    (38,020
    )Total cost of revenue
    
    
    (724,397
    )
    
    
    (609,063
    )
    
    
    (575,364
    )Gross profit
    
    
    84,409
    
    
    
    89,064
    
    
    
    70,688Income related to insurance recoveries, net
    
    
    
    
    
    
    
    
    
    
    9,946Gain on asset conversion, net
    
    
    
    
    
    
    
    
    
    
    4,323Selling, administrative and other (including costs from affiliates of
$606, $606 and $2,035 in 2008, 2007 and 2006, respectively)
    
    
    (26,535
    )
    
    
    (27,379
    )
    
    
    (28,399
    )Earnings from operations
    
    
    57,874
    
    
    
    61,685
    
    
    
    56,558Interest income (including interest income from affiliates of $34, $57
and $54 in 2008, 2007 and 2006, respectively)
    
    
    7,835
    
    
    
    13,829
    
    
    
    1,504Interest expense (including interest expense to affiliates of $0, $0 and
$98 in 2008, 2007 and 2006, respectively)
    
    
    (20,299
    )
    
    
    (17,027
    )
    
    
    (1,372
    )Other income
    
    
    3,657
    
    
    
    
    
    
    
    Earnings (loss) from joint ventures
    
    
    718
    
    
    
    881
    
    
    
    (734
    )Earnings before income tax expense
    
    
    49,785
    
    
    
    59,368
    
    
    
    55,956Income tax expense
    
    
    (18,403
    )
    
    
    (22,104
    )
    
    
    (20,752
    )Net earnings from continuing operations
    
    $
    31,382
    
    
    $
    37,264
    
    
    $
    35,204Less preferred dividends
    
    
    
    
    
    
    
    
    
    
    (568
    )Earnings available to common share holders
    
    $
    31,382
    
    
    $
    37,264
    
    
    $
    34,636Net earnings per common share  basic
    
    $
    1.47
    
    
    $
    1.75
    
    
    $
    1.68Net earnings per common share  diluted
    
    $
    1.47
    
    
    $
    1.74
    
    
    $
    1.67Weighted average common shares outstanding  basic
    
    
    21,302
    
    
    
    21,274
    
    
    
    20,667Weighted average common shares outstanding  diluted
    
    
    21,302
    
    
    
    21,357
    
    
    
    20,733
   52




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Operating activities:Net earnings
    
    $
    31,382
    
    
    $
    37,264
    
    
    $
    35,204Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:Depreciation
    
    
    20,148
    
    
    
    14,085
    
    
    
    10,674Amortization of deferred costs
    
    
    812
    
    
    
    680
    
    
    
    127Loss on disposal of property, plant and equipment
    
    
    308
    
    
    
    385
    
    
    
    4,393Insurance compensation for assets and storm clean-up
    
    
    
    
    
    
    
    
    
    
    (9,938
    )Write-off of deferred financing costs
    
    
    
    
    
    
    
    
    
    
    566Stock based compensation
    
    
    473
    
    
    
    1,927
    
    
    
    8,116Income related to reversal of stock based compensation for stock options
    
    
    (411
    )
    
    
    
    
    
    
    Excess tax benefits from stock option exercises
    
    
    
    
    
    
    (241
    )
    
    
    Change in joint venture investment as a result of (earnings) loss
    
    
    (718
    )
    
    
    (881
    )
    
    
    734Unrealized gain on derivative assets
    
    
    (88
    )
    
    
    
    
    
    
    Provision (benefit) for deferred income taxes
    
    
    1,099
    
    
    
    (370
    )
    
    
    (154
    )Provision for losses on accounts receivable
    
    
    695
    
    
    
    196
    
    
    
    383Long-lived asset impairment charges
    
    
    
    
    
    
    
    
    
    
    400Items reclassified as cash from investing activities:Realized gain on sale of short-term investments  available for sale securities
    
    
    (2,589
    )
    
    
    
    
    
    
    Realized gain on derivative assets
    
    
    (684
    )
    
    
    
    
    
    
    Dividends received from short-term investments  available for sale securities
    
    
    (297
    )
    
    
    
    
    
    
    Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (6,897
    )
    
    
    1,149
    
    
    
    3,020Accounts receivable, due from affiliate
    
    
    6,892
    
    
    
    (7,543
    )
    
    
    (4,522
    )Inventories, net
    
    
    (3,770
    )
    
    
    10,035
    
    
    
    (11,672
    )Prepaid expenses
    
    
    (211
    )
    
    
    838
    
    
    
    (3,317
    )Accounts payable
    
    
    (5,702
    )
    
    
    (7,059
    )
    
    
    (831
    )Accounts payable, due to affiliate
    
    
    2,326
    
    
    
    1,178
    
    
    
    (1,292
    )Accrued expenses and taxes
    
    
    2,071
    
    
    
    10,195
    
    
    
    (1,532
    )Other
    
    
    (517
    )
    
    
    (1,608
    )
    
    
    (392
    )Net cash provided by operating activities
    
    
    44,322
    
    
    
    60,230
    
    
    
    29,967Investing activities:Purchases of property, plant and equipment
    
    
    (52,432
    )
    
    
    (59,367
    )
    
    
    (44,916
    )Sale of property, plant and equipment
    
    
    4
    
    
    
    104
    
    
    
    Purchases of short-term investments  available for sale securities
    
    
    (27,857
    )
    
    
    (100,596
    )
    
    
    Sales of short-term investments  available for sale securities
    
    
    23,631
    
    
    
    100,596
    
    
    
    Dividends received from short-term investments  available for sale securities
    
    
    297
    
    
    
    
    
    
    
    Realized gain on derivative assets
    
    
    684
    
    
    
    
    
    
    
    Property insurance advance on Marmaduke tornado damage
    
    
    
    
    
    
    
    
    
    
    9,938Proceeds from repayment of note receivable from affiliate
    
    
    658
    
    
    
    329
    
    
    
    494Investments in joint ventures
    
    
    (672
    )
    
    
    (8,500
    )
    
    
    Sale of investment in joint venture
    
    
    1,875
    
    
    
    
    
    
    
    Acquisitions
    
    
    
    
    
    
    
    
    
    
    (17,220
    )Net cash used in investing activities
    
    
    (53,812
    )
    
    
    (67,434
    )
    
    
    (51,704
    )
    53




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Financing activities:Proceeds from sale of common stock
    
    
    
    
    
    
    
    
    
    
    205,275Offering costs  initial public offering
    
    
    
    
    
    
    
    
    
    
    (14,605
    )Preferred stock redemption
    
    
    
    
    
    
    
    
    
    
    (82,056
    )Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    (11,904
    )Common stock dividends
    
    
    (2,556
    )
    
    
    (2,551
    )
    
    
    (1,908
    )Increase (decrease) in amount due to affiliate
    
    
    
    
    
    
    
    
    
    
    (20,476
    )Majority shareholder capital contribution
    
    
    
    
    
    
    
    
    
    
    275Finance fees related to new credit facility
    
    
    (40
    )
    
    
    (109
    )
    
    
    (360
    )Proceeds from stock option exercises
    
    
    
    
    
    
    1,985
    
    
    
    Excess tax benefits from stock option exercises
    
    
    
    
    
    
    241
    
    
    
    Proceeds from issuance of senior unsecured
notes, gross
    
    
    
    
    
    
    275,000
    
    
    
    Offering costs  senior unsecured notes issuances
    
    
    
    
    
    
    (4,314
    )
    
    
    Repayment of debt
    
    
    (8
    )
    
    
    (88
    )
    
    
    (40,274
    )Net cash (used in) provided by financing activities
    
    
    (2,604
    )
    
    
    270,164
    
    
    
    33,967(Decrease) increase in cash and cash equivalents
    
    
    (12,094
    )
    
    
    262,960
    
    
    
    12,230Cash and cash equivalents at beginning of year
    
    
    303,882
    
    
    
    40,922
    
    
    
    28,692Cash and cash equivalents at end of year
    
    $
    291,788
    
    
    $
    303,882
    
    
    $
    40,922
   54




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##### Table of Contents



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
  Retained
    
    
    New
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedearnings
    
    
    Preferred
    
    
    New
    
    
    Common
    
    
    
    
    
    
    Additional
    
    
    other
    
    
    TotalComprehensive
    
    
    (accumulated
    
    
    Stock-
    
    
    preferred
    
    
    Stock-
    
    
    Common
    
    
    paid-in
    
    
    comprehensive
    
    
    shareholdersincome (loss)
    
    
    deficit)
    
    
    Shares
    
    
    stock
    
    
    Shares
    
    
    stock
    
    
    capital
    
    
    loss
    
    
    equityJanuary 1, 2006
    
    
    
    
    
    $
    (15,442
    )
    
    
    82,055
    
    
    $
    82,055
    
    
    
    11,147
    
    
    $
    111
    
    
    $
    41,667
    
    
    $
    (1,631
    )
    
    $
    106,760Net earnings
    
    $
    35,204
    
    
    
    35,204
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,204Currency translation adjustment
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    (13
    )Minimum pension liability adjustment, net of tax effect of $7
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    (13
    )Comprehensive income
    
    $
    35,178Effects of adopting FAS 158, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (792
    )
    
    
    (792
    )Dividends on preferred stock
    
    
    
    
    
    
    (568
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (568
    )IPO proceeds, net of related costs of $6,185
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,775
    
    
    
    98
    
    
    
    185,713
    
    
    
    
    
    
    
    185,811Purchase preferred stock
    
    
    
    
    
    
    
    
    
    
    (82,055
    )
    
    
    (82,055
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (82,055
    )Dividends on common stock
    
    
    
    
    
    
    (2,545
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,545
    )Restricted stock grant
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    286
    
    
    
    3
    
    
    
    5,697
    
    
    
    
    
    
    
    5,700Stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,416
    
    
    
    
    
    
    
    2,416Capital contribution by majority shareholder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    275
    
    
    
    
    
    
    
    275Balance December 31, 2006
    
    
    
    
    
    $
    16,649
    
    
    
    
    
    
    $
    
    
    
    
    21,208
    
    
    $
    212
    
    
    $
    235,768
    
    
    $
    (2,449
    )
    
    $
    250,180Net earnings
    
    $
    37,264
    
    
    
    37,264
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,264Currency translation adjustment
    
    
    193
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193
    
    
    
    193Minimum pension liability adjustment, net of tax effect of $1,311
    
    
    2,096
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,096
    
    
    
    2,096Comprehensive income
    
    $
    39,553Dividends on common stock
    
    
    
    
    
    
    (2,554
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,554
    )Effects of adopting FIN 48
    
    
    
    
    
    
    (45
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45
    )Restricted stock grant
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    300Proceeds from stock option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    94
    
    
    
    1
    
    
    
    1,984
    
    
    
    
    
    
    
    1,985Excess tax benefit from stock option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    241
    
    
    
    
    
    
    
    241Stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,328
    
    
    
    
    
    
    
    1,328Balance December 31, 2007
    
    
    
    
    
    $
    51,314
    
    
    
    
    
    
    $
    
    
    
    
    21,302
    
    
    $
    213
    
    
    $
    239,621
    
    
    $
    (160
    )
    
    $
    290,988Net earnings
    
    $
    31,382
    
    
    
    31,382
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,382Currency translation adjustment
    
    
    (428
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (428
    )
    
    
    (428
    )Deferred taxes relating to short term investment
    
    
    1,673
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,673
    
    
    
    1,673Unrealized loss on short term investment
    
    
    (4,250
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,250
    )
    
    
    (4,250
    )Minimum pension liability adjustment, net of tax effect of $1,249
    
    
    (1,975
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,975
    )
    
    
    (1,975
    )Comprehensive income
    
    $
    26,402Effect of pension measurement date change
    
    
    
    
    
    
    (105
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105
    )Dividends on common stock
    
    
    
    
    
    
    (2,556
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,556
    )Additional paid-in capital reduction due to stock
option forfeiture
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (113
    )
    
    
    
    
    
    
    (113
    )Stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109
    
    
    
    
    
    
    
    109Balance December 31, 2008
    
    
    
    
    
    $
    80,035
    
    
    
    
    
    
    $
    
    
    
    
    21,302
    
    
    $
    213
    
    
    $
    239,617
    
    
    $
    (5,140
    )
    
    $
    314,725
   55




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Note 1  Description of the Business
    Note 2  Summary of Accounting Policies
 Cash and cash equivalents
   Short-term investments
 Accounting for Certain Investments in Debt and
Equity Securities
 Derivative assets
 Accounting for Derivative Instruments and Hedging Activities Accounting for Certain Derivative Instruments and Certain Hedging
Activities
  56




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##### Table of Contents



Revenue recognition
  Accounting for Shipping and
Handling Fees and Costs,
 How Taxes Collected from Customers and Remitted to Governmental Authorities Should
be Presented in the Income Statement (That Is, Gross versus Net Presentation)
 Accounts receivable, net
  Inventories
  Property, plant and equipment, net
   Long-lived assets
   57




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##### Table of Contents



Debt issuance costs
  2009
    
    
    6372010
    
    
    6162011
    
    
    6162012
    
    
    6162013 and thereafter
    
    
    719Total
    
    $
    3,204
 Goodwill
 Goodwill and
Other Intangible Assets
 Investment in joint ventures
  Income taxes
  Pension plans and other postretirement benefits
    58




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##### Table of Contents



Fair value of financial instruments
 Fair Value Measurements
 Foreign currency translation
  Comprehensive income
  Earnings per share
  Use of estimates
  Stock-based compensation
 Share-Based Payments
 Reclassifications
   59




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##### Table of Contents



Recent accounting pronouncements
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statementsan amendment of ARB No. 51
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133
 Note 3  Acquisition
    Note 4  Short-term Investments  Available for Sale Securities
      60




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##### Table of Contents



Note 5  Derivatives
 Total return swaps
  Foreign currency option
   Note 6  Fair Value Measurements
 Fair Value Measurements
   
    
    Level 1  Quoted prices are available in active markets for identical investments as
of the reporting date. The type of investments included in Level I include listed
equities and listed derivatives. As required by SFAS 157, the Company does not adjust
the quoted price for these investments, even in situations where they hold a large
position and a sale could reasonably impact the quoted price.
    
    Level 2  Pricing inputs are other than quoted prices in active markets, which are
either directly or indirectly observable as of the reporting date, and fair value is
determined through the use of models or other valuation methodologies. Investments that
are generally included in this category include corporate bonds and loans, less liquid
and restricted equity securities and certain over-the-counter derivatives.
    
    Level 3  Pricing inputs are unobservable for the investment and include situations
where there is little, if any, market activity for the investment. The inputs into the
determination of fair value require significant management judgment or estimation.
  61




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##### Table of Contents



Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsShort term investments  available for sale securities
    
    $
    2,565
    
    
    $
    
    
    
    $
    
    
    
    $
    2,565Derivative asset  foreign currency option
    
    $
    
    
    
    $
    88
    
    
    $
    
    
    
    $
    88$
    2,565
    
    
    $
    88
    
    
    $
    
    
    
    $
    2,653
 Note 7  Accounts Receivable, net
  December 31,
    
    
    December 31,2008
    
    
    2007(in thousands)Accounts receivable, gross
    
    $
    40,540
    
    
    $
    34,020Less allowance for doubtful accounts
    
    
    (815
    )
    
    
    (497
    )Total accounts receivable, net
    
    $
    39,725
    
    
    $
    33,523
  Years Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Beginning Balance
    
    $
    497
    
    
    $
    1,017
    
    
    $
    849Provision
    
    
    688
    
    
    
    196
    
    
    
    383Write-offs
    
    
    (372
    )
    
    
    (716
    )
    
    
    (220
    )Recoveries
    
    
    2
    
    
    
    
    
    
    
    5Ending Balance
    
    $
    815
    
    
    $
    497
    
    
    $
    1,017
  62




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##### Table of Contents



Note 8  Inventories, net
  December 31,
    
    
    December 31,2008
    
    
    2007(in thousands)Raw materials
    
    $
    59,457
    
    
    $
    52,322Work-in-process
    
    
    22,137
    
    
    
    19,835Finished products
    
    
    18,300
    
    
    
    24,023Total inventories
    
    
    99,894
    
    
    
    96,180Less reserves
    
    
    (2,649
    )
    
    
    (2,705
    )Total inventories, net
    
    $
    97,245
    
    
    $
    93,475
  Years Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Beginning Balance
    
    $
    2,705
    
    
    $
    2,729
    
    
    $
    2,318Provision
    
    
    911
    
    
    
    783
    
    
    
    597Write-offs
    
    
    (967
    )
    
    
    (807
    )
    
    
    (186
    )Ending Balance
    
    $
    2,649
    
    
    $
    2,705
    
    
    $
    2,729
 Note 9  Property, Plant and Equipment, net
  December 31,
    
    
    December 31,2008
    
    
    2007Property, plant and equipmentBuildings
    
    $
    130,054
    
    
    $
    117,899Machinery and equipment
    
    
    167,586
    
    
    
    113,415297,640
    
    
    
    231,314Less accumulated depreciation
    
    
    (105,938
    )
    
    
    (86,907
    )Net property, plant and equipment
    
    
    191,702
    
    
    
    144,407Land
    
    
    3,306
    
    
    
    3,306Construction in process
    
    
    11,928
    
    
    
    27,453Total property, plant and equipment
    
    $
    206,936
    
    
    $
    175,166
 Depreciation expense
  Capitalized interest
  Lease agreements
 Accounting for Leases
  63




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##### Table of Contents



Note 10  Long-Lived Asset Impairment Charges
  Note 11  Goodwill
  SFAS 142,
      64




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##### Table of Contents



Note 12  Investments in Joint Ventures
   For the Years Ended December 31,2008
    
    
    2007(in thousands)Carrying amount of investments in joint venturesOhio Castings
    
    $
    7,000
    
    
    $
    5,855Axis
    
    
    6,091
    
    
    
    7,500India
    
    
    
    
    
    
    Total investment in joint ventures
    
    $
    13,091
    
    
    $
    13,355
 Ohio Castings
    Guarantors Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others
  65




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##### Table of Contents



December 31,2008
    
    
    2007(in thousands)Financial positionCurrent assets
    
    $
    12,737
    
    
    $
    11,638Property, plant, and equipment, net
    
    
    14,192
    
    
    
    15,167Total assets
    
    
    26,929
    
    
    
    26,805Current liabilities
    
    
    8,414
    
    
    
    9,736Long-term debt
    
    
    2,059
    
    
    
    5,934Total liabilities
    
    
    10,473
    
    
    
    15,670Members equity
    
    
    16,456
    
    
    
    11,135Total liabilities and members equity
    
    $
    26,929
    
    
    $
    26,805
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Results of operationsSales
    
    $
    88,795
    
    
    $
    74,238
    
    
    $
    108,849Operating earning (loss)
    
    
    5,012
    
    
    
    2,394
    
    
    
    (2,502
    )Net earnings (loss)
    
    $
    5,321
    
    
    $
    2,702
    
    
    $
    (2,046
    )
 Axis
      66




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##### Table of Contents



December 31,2008
    
    
    2007(in thousands)Financial positionCurrent assets
    
    $
    1,462
    
    
    $
    4,409Property, plant, and equipment, net
    
    
    65,358
    
    
    
    19,243Long term assets
    
    
    1,091
    
    
    
    884Total assets
    
    
    67,911
    
    
    
    24,536Current liabilities
    
    
    12,920
    
    
    
    187Long-term debt
    
    
    42,908
    
    
    
    9,361Total liabilities
    
    
    55,828
    
    
    
    9,548Members equity
    
    
    12,083
    
    
    
    14,988Total liabilities and members equity
    
    $
    67,911
    
    
    $
    24,536
  For the Years Ended December 31,2008
    
    
    2007(in thousands)Financial resultsSales
    
    $
    
    
    
    $
    Loss before interest expense
    
    
    2,432
    
    
    
    9Net loss
    
    $
    2,905
    
    
    $
    12
 India
  Note 13  Warranties
   67




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##### Table of Contents



For the Years Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Liability, beginning of year
    
    $
    2,503
    
    
    $
    1,753
    
    
    $
    1,237Provision for new warranties issued
    
    
    1,458
    
    
    
    1,992
    
    
    
    2,063Warranty claims
    
    
    (1,366
    )
    
    
    (1,242
    )
    
    
    (1,547
    )Liability, end of year
    
    $
    2,595
    
    
    $
    2,503
    
    
    $
    1,753
 Note 14  Long-term Debt
  December 31, 2008
    
    
    December 31, 2007(in thousands)Revolving line of credit
    
    $
    
    
    
    $
    Senior unsecured notes
    
    
    275,000
    
    
    
    275,000Other
    
    
    
    
    
    
    8Total long-term debt, including current portion
    
    $
    275,000
    
    
    $
    275,008Less current portion of debt
    
    
    
    
    
    
    8Total long-term debt, net of current portion
    
    $
    275,000
    
    
    $
    275,000
  2009
    
    $
    2010
    
    
    2011
    
    
    2012
    
    
    2013 and thereafter
    
    
    275,000$
    275,000
 Revolving line of credit
    68




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##### Table of Contents



Mortgage note
  Senior unsecured fixed rate notes
     69




---



##### Table of Contents



Note 15  Income Taxes
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Current:Federal
    
    $
    14,290
    
    
    $
    19,356
    
    
    $
    17,249State and local
    
    
    2,465
    
    
    
    3,512
    
    
    
    2,610Foreign
    
    
    187
    
    
    
    36
    
    
    
    101Total current
    
    
    16,942
    
    
    
    22,904
    
    
    
    19,960DeferredFederal
    
    
    1,339
    
    
    
    (716
    )
    
    
    685State and local
    
    
    121
    
    
    
    (79
    )
    
    
    123Foreign
    
    
    1
    
    
    
    (5
    )
    
    
    (16
    )Total deferred
    
    
    1,461
    
    
    
    (800
    )
    
    
    792Total income tax expense
    
    $
    18,403
    
    
    $
    22,104
    
    
    $
    20,752
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Computed income tax expense
    
    $
    17,424
    
    
    $
    20,779
    
    
    $
    19,585State and local taxes, net
of federal tax expense
    
    
    1,681
    
    
    
    2,232
    
    
    
    1,777Non-deductible expenses
    
    
    (546
    )
    
    
    (1,120
    )
    
    
    (654
    )Other, net
    
    
    (156
    )
    
    
    213
    
    
    
    44Total income tax expense
    
    $
    18,403
    
    
    $
    22,104
    
    
    $
    20,752
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Computed income tax expense
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State and
local taxes, net of federal tax expense
    
    
    3.4
    %
    
    
    3.8
    %
    
    
    3.2
    %Non-deductible expenses
    
    
    (1.1
    %)
    
    
    (1.9
    %)
    
    
    (1.2
    %)Other, net
    
    
    (0.3
    %)
    
    
    0.3
    %
    
    
    0.1
    %Effective income tax rate
    
    
    37.0
    %
    
    
    37.2
    %
    
    
    37.1
    %
  70




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##### Table of Contents



December 31,2008
    
    
    2007(in thousands)Current deferred tax assetsProvisions not currently deductible
    
    $
    2,331
    
    
    $
    1,610Non-current deferred tax assetsProvisions not currently deductible
    
    
    4,385
    
    
    
    3,481Stock based compensation
    
    
    897
    
    
    
    1,027Pensions and post retirement
    
    
    3,323
    
    
    
    2,258Total non-current deferred tax asset
    
    
    8,605
    
    
    
    6,766Total deferred tax asset
    
    $
    10,936
    
    
    $
    8,376Current deferred tax liabilityUnrealized gain on financial instruments
    
    $
    (34
    )
    
    $
    Non-current deferred tax liabilitiesInvestment in joint ventures
    
    
    (335
    )
    
    
    (1
    )Realized gain (loss) on financial instruments
    
    
    1,675
    
    
    
    (507
    )Property, plant and equipment
    
    
    (14,628
    )
    
    
    (11,948
    )Total deferred tax liability
    
    $
    (13,322
    )
    
    $
    (12,456
    )
  As of December 31,2008
    
    
    2007(in thousands)Current deferred tax assets
    
    $
    2,331
    
    
    $
    1,610Current deferred tax liability
    
    
    (34
    )
    
    
    Current deferred tax assets (liability), net
    
    
    2,297
    
    
    
    1,610Non-current deferred tax assets
    
    
    8,605
    
    
    
    6,766Non-current deferred tax liability
    
    
    (13,288
    )
    
    
    (12,456
    )Non-current deferred tax assets (liability), net
    
    
    (4,683
    )
    
    
    (5,690
    )Current deferred tax asset, net
    
    
    2,297
    
    
    
    1,610Non-current deferred tax liability, net
    
    
    (4,683
    )
    
    
    (5,690
    )Net deferred tax liability
    
    $
    (2,386
    )
    
    $
    (4,080
    )
    71




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##### Table of Contents



FASB Interpretation No. 48
 Accounting for Uncertainty in
Income Taxes, an interpretation of FASB Statements No. 109, Accounting for Income Taxes
  Gross unrecognized tax benefits at January 1, 2007
    
    $
    (2,114
    )Adoption of FIN 48
    
    
    (45
    )Increases in tax positions for prior years
    
    
    (466
    )Decreases in tax positions for prior years
    
    
    812Increases in tax positions for current years
    
    
    (168
    )Settlements
    
    
    485Lapses in statutes
    
    
    3FIN 48 liability activity, net
    
    
    621Gross unrecognized tax benefits at December 31, 2007
    
    $
    (1,493
    )Increases in tax positions for prior years
    
    
    (53
    )Decreases in tax positions for prior years
    
    
    58Increases in tax positions for current years
    
    
    (596
    )Settlements
    
    
    2FIN 48 liability activity, net
    
    
    (589
    )Gross unrecognized tax benefits at December 31, 2008
    
    $
    (2,082
    )
   Note 16  Employee Benefit Plans
    72




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##### Table of Contents



Pension Benefits
    
    
    Postretirement Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007(in thousands)Change in benefit obligationBenefit obligation  Beginning of year
    
    $
    16,803
    
    
    $
    17,257
    
    
    $
    3,758
    
    
    $
    5,321Service cost
    
    
    370
    
    
    
    242
    
    
    
    78
    
    
    
    130Interest cost
    
    
    1,271
    
    
    
    962
    
    
    
    289
    
    
    
    298Plan amendment
    
    
    
    
    
    
    159
    
    
    
    (694
    )
    
    
    Plan curtailment
    
    
    
    
    
    
    
    
    
    
    (150
    )
    
    
    Actuarial (gain) loss
    
    
    90
    
    
    
    (703
    )
    
    
    (368
    )
    
    
    (1,959
    )Assumed administrative expenses
    
    
    (252
    )
    
    
    (150
    )
    
    
    
    
    
    
    Employee contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59Benefits paid
    
    
    (1,202
    )
    
    
    (964
    )
    
    
    (163
    )
    
    
    (91
    )Benefit obligation  End of year
    
    $
    17,080
    
    
    $
    16,803
    
    
    $
    2,750
    
    
    $
    3,758
 Pension Benefits
    
    
    Postretirement Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007(in thousands)Change in plan assetsPlan assets  Beginning of year
    
    $
    13,555
    
    
    $
    11,270
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    (3,163
    )
    
    
    1,632
    
    
    
    
    
    
    
    Administrative expenses
    
    
    (150
    )
    
    
    (192
    )
    
    
    
    
    
    
    Employee contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59Employer contributions
    
    
    1,655
    
    
    
    1,809
    
    
    
    163
    
    
    
    32Benefits paid
    
    
    (1,202
    )
    
    
    (964
    )
    
    
    (163
    )
    
    
    (91
    )Plan assets at fair value  End of year
    
    $
    10,695
    
    
    $
    13,555
    
    
    $
    
    
    
    $
    
  73




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##### Table of Contents



Pension Benefits
    
    
    Postretirement Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007(in thousands)Funded statusBenefit obligation in excess of plan assets
    
    $
    (6,385
    )
    
    $
    (3,248
    )
    
    $
    (2,750
    )
    
    $
    (3,758
    )Contributions for the fourth quarter
    
    
    N/A
    
    
    
    407
    
    
    
    N/A
    
    
    
    27Net amount recognized at December 31
    
    $
    (6,385
    )
    
    $
    (2,841
    )
    
    $
    (2,750
    )
    
    $
    (3,731
    )
  Pension Benefits
    
    
    Postretirement Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007(in thousands)Accrued benefit liability  short term
    
    $
    (1
    )
    
    $
    (1
    )
    
    $
    (110
    )
    
    $
    (136
    )Accrued benefit liability  long term
    
    
    (6,384
    )
    
    
    (2,840
    )
    
    
    (2,640
    )
    
    
    (3,595
    )Net liability recognized at December 31
    
    $
    (6,385
    )
    
    $
    (2,841
    )
    
    $
    (2,750
    )
    
    $
    (3,731
    )Net actuarial (gain) loss
    
    $
    5,516
    
    
    $
    1,220
    
    
    $
    1,194
    
    
    $
    (884
    )Net prior service cost (credit)
    
    
    137
    
    
    
    155
    
    
    
    597
    
    
    
    121Accumulated other comprehensive loss
(income) pre-tax at December 31,
    
    $
    5,653
    
    
    $
    1,375
    
    
    $
    1,791
    
    
    $
    (763
    )
   Pension Benefits
    
    
    Postretirement Benefits2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006(in thousands)Components of net periodic benefit costService cost
    
    $
    371
    
    
    $
    242
    
    
    $
    179
    
    
    $
    62
    
    
    $
    130
    
    
    $
    11Interest cost
    
    
    1,271
    
    
    
    963
    
    
    
    796
    
    
    
    231
    
    
    
    299
    
    
    
    208Expected return on plan assets
    
    
    (1,359
    )
    
    
    (960
    )
    
    
    (727
    )
    
    
    
    
    
    
    
    
    
    
    Recognized actuarial loss
    
    
    213
    
    
    
    206
    
    
    
    191
    
    
    
    (46
    )
    
    
    50
    
    
    
    Amortization of prior service cost (gain)
    
    
    18
    
    
    
    (1
    )
    
    
    (1
    )
    
    
    18
    
    
    
    18
    
    
    
    Total net preiodic benefit cost
    
    $
    514
    
    
    $
    450
    
    
    $
    438
    
    
    $
    265
    
    
    $
    497
    
    
    $
    219
  74




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##### Table of Contents



Additional information
  Pension Benefits
    
    
    Postretirement Benefits(in thousands)2009
    
    $
    998
    
    
    $
    1132010
    
    
    1,099
    
    
    
    1202011
    
    
    1,095
    
    
    
    1212012
    
    
    1,091
    
    
    
    1212013 and thereafter
    
    
    6,874
    
    
    
    674Total
    
    $
    11,157
    
    
    $
    1,149
   Discount rates
  Health care cost trend rates
  Compensation increase
  Expected return on plan assets
  Mortality and retirement rates
   Pension Benefits
    
    
    Postretirement Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007Discount rate
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    5.60
    %
    
    
    6.30
    %
  75




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##### Table of Contents



Pension Benefits
    
    
    Postretirement Benefits2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006Discount rate
    
    
    6.25
    %
    
    
    5.75
    %
    
    
    5.50
    %
    
    
    6.30
    %
    
    
    5.75
    %
    
    
    5.50
    %Expected
return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
  2008
    
    
    2007
    
    
    2006Health care cost trend rate assigned for next
year
    
    
    9.0
    %
    
    
    10.0
    %
    
    
    11.0
    %Ultimate trend rate
    
    
    5.0
    %
    
    
    5.0
    %
    
    
    5.0
    %Year the rate reaches the ultimate trend rate
    
    
    2018
    
    
    
    2013
    
    
    
    2013
  One Percentage Point(in thousands)Increase
    
    
    DecreaseEffect on total of service and interest cost
    
    $
    61
    
    
    $
    (47
    )Effect on postretirement benefit obligation
    
    $
    507
    
    
    $
    (398
    )
  TargetPlan Assets at December 31,
    
    
    Allocation2008
    
    
    2007
    
    
    2009Asset CategoryEquity securities
    
    
    45
    %
    
    
    57
    %
    
    
    60
    %Debt securities
    
    
    55
    %
    
    
    43
    %
    
    
    40
    %100
    %
    
    
    100
    %
    
    
    100
    %
    76




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##### Table of Contents



Note 17  Commitments and Contingencies
  (in thousands)2009
    
    $
    7832010
    
    
    4932011
    
    
    2882012
    
    
    2592013
    
    
    256Thereafter
    
    
    3,288
      77




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##### Table of Contents



OCI Chemical Corporation v. American Railcar
Industries, Inc.
 Jennifer Nicole Lerma v. American
Railcar Industries, Inc.
       78




---



##### Table of Contents



Note 18  Initial Public Offering
   Redemption of all oustanding shares of preferred stock
    
    $
    94.0Repayment of notes due to affiliates
    
    
    20.5Repayment of all industrial revenue bonds
    
    
    8.6Repayment of amounts outstanding under revolving credit facility
    
    
    32.3Acquisition of Custom Steel
    
    
    17.2Payment of payables in connection with acquisition
    
    
    5.3Investment in plant, property and equipment
    
    
    12.7Offering costs paid during the first quarter
    
    
    1.4Total uses
    
    $
    192.0
 Note 19  Earnings per Share
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Weighted average basic common shares outstanding
    
    
    21,302,296
    
    
    
    21,274,082
    
    
    
    20,666,599Dilutive effect of employee stock options
    
    
    
    (1)(2)
    
    
    82,609
    (2)
    
    
    66,000
    (2)Weighted average diluted common shares outstanding
    
    
    21,302,296
    
    
    
    21,356,691
    
    
    
    20,732,599
 (1)
    
    Stock options to purchase 390,353 shares of common stock were not included in the calculation
for diluted earnings per share for the year ended December 31, 2008. These options would have
resulted in an antidilutive effect to the earnings per share calculation.(2)
    
    Stock options to purchase 75,000 shares of common stock granted during the second quarter of
2006 were not included in the calculation for diluted earnings per share for the years ended
December 31, 2008, 2007 and 2006. These options would have resulted in an antidilutive effect to
the earnings per share calculation. During 2008, these stock options were forfeited/cancelled
without exercise.  79




---



##### Table of Contents



Note 20  Stock Based Compensation
    For the Years Ended December 31,2008
    
    
    2007
    
    
    2006($ in thousands)Stock based compensation expense:Cost of revenue: manufacturing operations
    
    $
    28
    
    
    $
    139
    
    
    $
    190Cost of revenue: railcar services
    
    
    (2
    )
    
    
    9
    
    
    
    Selling, administrative and other
    
    
    36
    
    
    
    1,779
    
    
    
    7,926Total stock based compensation expense
    
    $
    62
    
    
    $
    1,927
    
    
    $
    8,116
  Stock options
    80




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##### Table of Contents



WeightedWeighted
    
    
    AverageWeighted
    
    
    Average
    
    
    Grant-date
    
    
    AggregateShares
    
    
    Average
    
    
    Remaining
    
    
    Fair Value
    
    
    IntrinsicCovered by
    
    
    Exercise
    
    
    Contractual
    
    
    of Options
    
    
    ValueOptions
    
    
    Price
    
    
    Life
    
    
    Granted
    
    
    ($000)January 1, 2006
    
    
    
    
    
    $
    Granted in 2006
    
    
    559,876
    
    
    $
    22.97
    
    
    
    
    
    
    $
    8.05Outstanding at December 31, 2006
    
    
    559,876
    
    
    $
    22.97
    
    
    
    
    
    
    $
    8.05Exercised in 2007
    
    
    (94,523
    )
    
    $
    21.00Outstanding at December 31, 2007
    
    
    465,353
    
    
    $
    23.37
    
    
    
    
    
    
    $
    8.21Cancelled in 2008
    
    
    (75,000
    )Outstanding at December 31, 2008
    
    
    390,353
    
    
    $
    21.00
    
    
    24 months
    
    $
    7.28
    
    
    $
    
    (1)Exercisable at December 31, 2008
    
    
    228,726
    
    
    $
    21.00
    
    
    24 months
    
    $
    7.28
    
    
    $
    
    (1)
 (1)
    
     Options to purchase 390,353 shares, of which 228,726 are exercisable, of the Companys common
stock have exercise prices that are above market price, based on the closing market price of $10.53
for a share of the
Companys common stock on the last business day of the year ended December 31, 2008.     Restricted stock award
    81




---



##### Table of Contents



WeightedNon-vested
    
    
    Average GrantStock Awards
    
    
    Date Fair ValueNon-vested at January 1, 2006
    
    
    
    
    
    $
    Granted in 2006
    
    
    285,714
    
    
    
    21.00Vested in 2006
    
    
    (114,286
    )
    
    
    21.00Non-vested at December 31, 2006
    
    
    171,428
    
    
    
    21.00Vested in 2007
    
    
    (171,428
    )
    
    
    21.00Non-vested at December 31, 2007 and 2008
    
    
    
  Stock appreciation rights
      82




---



##### Table of Contents



2008 Grants
    
    
    2007 GrantGrant date
    
    
    4/28/2008 & 9/12/2008
    
    
    
    4/4/2007# SARs outstanding at December 31, 2008
    
    
    251,088
    
    
    
    254,000Weighted Avg Exercise price
    
    
    $20.81
    
    
    
    $29.49Contractual term
    
    7 years
    
    7 yearsDecember 31, 2008 SARs Black Scholes Valuation Components:Stock volatility range
    
    
    41.5%  46.0%
    
    
    
    44.2%  51.2%Expected life range
    
    3.3  5.2 years
    
    2.7  3.8 yearsRisk free interest rate range
    
    
    0.9%  1.5%
    
    
    
    0.9%Dividend yield
    
    
    0.4%
    
    
    
    0.4%Forfeiture rate
    
    
    9.0%
    
    
    
    2.0%
   WeightedStock
    
    
    Weighted
    
    
    Average
    
    
    Weighted
    
    
    AggregateAppreciation
    
    
    Average
    
    
    Remaining
    
    
    Average Grant
    
    
    IntrinsicRights
    
    
    Exercise
    
    
    Contractual
    
    
    Date Fair
    
    
    Value(SARs)
    
    
    Price
    
    
    Life
    
    
    Value of SARs
    
    
    ($000)January 1, 2007
    
    
    Granted
    
    
    273,800
    
    
    $
    29.49Outstanding at December 31, 2007
    
    
    273,800
    
    
    $
    29.49Granted
    
    
    274,400
    
    
    $
    20.81Cancelled/Forfeited (2)
    
    
    (43,674
    )Outstanding at December 31, 2008
    
    
    504,526
    
    
    $
    25.18
    
    
    70 months
    
    $
    1.14
    
    
    $
    
    (1)Exercisable at December 31, 2008
    
    
    63,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    (1)
 (1)
    
     Stock appreciation rights with an exercise price of $29.49, $20.88 and $16.46 have no
intrinsic value based on the closing market price of $10.53 for a share of the Companys common
stock on the last business day of the year ended December 31, 2008.(2)
    
     In 2008, 19,374 SARs of those granted in 2008 forfeited due to the closing price of the
Companys common stock not achieving a specified price target for twenty trading days during any
sixty day trading day period.  83




---



##### Table of Contents



Note 21  Common Stock and New Preferred Stock
    Note 22  Related Party Transactions
 Agreements with ACF
  Manufacturing services agreement
  Supply agreement
  Inventory storage agreements
  Wheel set agreements
   84




---



##### Table of Contents



Railcar manufacturing agreement
    Other agreements
   Agreements with ARL
  Railcar servicing agreement and fleet services agreement
    85




---



##### Table of Contents



Services agreement, separation agreement and rent and building services extension agreement
     Trademark license agreement
  Sales contracts
    86




---



##### Table of Contents



Agreements with other affiliated parties
        Financial information for transactions with affiliates
      87




---



##### Table of Contents



Note 23  Operating Segment and Sales/Credit Concentrations
  As of and for the year ended
    
    Manufacturing
    
    
    Railcar
    
    
    CorporateDecember 31, 2008
    
    Operations
    
    
    Services
    
    
    & all other
    
    
    Eliminations
    
    
    Totals(in thousands)Revenues from external customers
    
    $
    757,505
    
    
    $
    51,301
    
    
    $
    
    
    
    $
    
    
    
    $
    808,806Intersegment revenues
    
    
    717
    
    
    
    148
    
    
    
    
    
    
    
    (865
    )
    
    
    Cost of revenue  external customers
    
    
    (682,744
    )
    
    
    (41,653
    )
    
    
    
    
    
    
    
    
    
    
    (724,397
    )Cost of intersegment revenue
    
    
    (580
    )
    
    
    (122
    )
    
    
    
    
    
    
    702
    
    
    
    Gross profit (loss)
    
    
    74,898
    
    
    
    9,674
    
    
    
    
    
    
    
    (163
    )
    
    
    84,409Selling, administration and other
    
    
    (7,655
    )
    
    
    (2,551
    )
    
    
    (16,329
    )
    
    
    
    
    
    
    (26,535
    )Earnings (loss) from operations
    
    $
    67,243
    
    
    $
    7,123
    
    
    $
    (16,329
    )
    
    $
    (163
    )
    
    $
    57,874Total assets
    
    $
    351,037
    
    
    $
    40,246
    
    
    $
    288,371
    
    
    $
    
    
    
    $
    679,654Capital expenditures
    
    
    42,163
    
    
    
    7,396
    
    
    
    2,873
    
    
    
    
    
    
    
    52,432Depreciation and amortization
    
    
    17,513
    
    
    
    2,086
    
    
    
    1,361
    
    
    
    
    
    
    
    20,960
 As of and for the year ended
    
    Manufacturing
    
    
    Railcar
    
    
    CorporateDecember 31, 2007
    
    Operations
    
    
    Services
    
    
    & all other
    
    
    Eliminations
    
    
    Totals(in thousands)Revenues from external customers
    
    $
    648,124
    
    
    $
    50,003
    
    
    $
    
    
    
    $
    
    
    
    $
    698,127Intersegment revenues
    
    
    981
    
    
    
    509
    
    
    
    
    
    
    
    (1,490
    )
    
    
    Cost of revenue  external customers
    
    
    (568,023
    )
    
    
    (41,040
    )
    
    
    
    
    
    
    
    
    
    
    (609,063
    )Cost of intersegment revenue
    
    
    (819
    )
    
    
    (471
    )
    
    
    
    
    
    
    1,290
    
    
    
    Gross profit (loss)
    
    
    80,263
    
    
    
    9,001
    
    
    
    
    
    
    
    (200
    )
    
    
    89,064Selling, administration and other
    
    
    (7,667
    )
    
    
    (2,123
    )
    
    
    (17,589
    )
    
    
    
    
    
    
    (27,379
    )Earnings (loss) from operations
    
    $
    72,596
    
    
    $
    6,878
    
    
    $
    (17,589
    )
    
    $
    (200
    )
    
    $
    61,685Total assets
    
    $
    320,313
    
    
    $
    37,243
    
    
    $
    296,828
    
    
    $
    
    
    
    $
    654,384Capital expenditures
    
    
    53,518
    
    
    
    2,017
    
    
    
    3,832
    
    
    
    
    
    
    
    59,367Depreciation and amortization
    
    
    12,121
    
    
    
    1,803
    
    
    
    841
    
    
    
    
    
    
    
    14,765
  88




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##### Table of Contents



As of and for the year ended
    
    Manufacturing
    
    
    Railcar
    
    
    CorporateDecember 31, 2006
    
    Operations
    
    
    Services
    
    
    & all other
    
    
    Eliminations
    
    
    Totals(in thousands)Revenues from external customers
    
    $
    597,913
    
    
    $
    48,139
    
    
    $
    
    
    
    $
    
    
    
    $
    646,052Intersegment revenues
    
    
    1,854
    
    
    
    1,362
    
    
    
    
    
    
    
    (3,216
    )
    
    
    Cost of revenue  external customers
    
    
    (537,344
    )
    
    
    (38,020
    )
    
    
    
    
    
    
    
    
    
    
    (575,364
    )Cost of intersegment revenue
    
    
    (1,655
    )
    
    
    (1,033
    )
    
    
    
    
    
    
    2,688
    
    
    
    Gross profit (loss)
    
    
    60,768
    
    
    
    10,448
    
    
    
    
    
    
    
    (528
    )
    
    
    70,688Income related to insurance
recoveries, net
    
    
    9,946
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,946Gain on asset conversion, net
    
    
    4,323
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,323Selling, administration and other
    
    
    (5,990
    )
    
    
    (1,845
    )
    
    
    (20,564
    )
    
    
    
    
    
    
    (28,399
    )Earnings (loss) from operations
    
    $
    69,047
    
    
    $
    8,603
    
    
    $
    (20,564
    )
    
    $
    (528
    )
    
    $
    56,558Total assets
    
    $
    255,169
    
    
    $
    33,764
    
    
    $
    49,993
    
    
    $
    
    
    
    $
    338,926Capital expenditures
    
    
    43,415
    
    
    
    1,318
    
    
    
    183
    
    
    
    
    
    
    
    44,916Depreciation and amortization
    
    
    8,747
    
    
    
    1,905
    
    
    
    149
    
    
    
    
    
    
    
    10,801
 Manufacturing Operations
     Railcar Services
  Note 24  Marmaduke Storm Damage Insurance Claim (Income related to insurance recoveries)
   89




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##### Table of Contents



Year EndedDecember 31,2006(in thousands)Business interruption insurance claim
    
    $
    15,968Business interruption claim deductible
    
    
    (600
    )Business interruption insurance settlement, net
    
    
    15,368Continuing expenses
    
    
    (5,430
    )Deductible adjustment
    
    
    8Income related to insurance recoveries, net
    
    $
    9,946
  Year EndedDecember 31, 2006(in thousands)Property damage insurance claim
    
    $
    11,160Property damage claim deductible
    
    
    (100
    )Property damage insurance settlement, net
    
    
    11,060Assets damaged, clean up costs, repair costs
    
    
    (6,737
    )Gain on asset conversion, net
    
    $
    4,323
  90




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##### Table of Contents



Note 25  Supplemental Cash Flow Information
              91




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##### Table of Contents



Note 26  Selected Quarterly Financial Data (unaudited)
 First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    Year toquarter
    
    
    quarter
    
    
    quarter
    
    
    quarter
    
    
    Date(in thousands, except per share data)2008Sales
    
    $
    184,049
    
    
    $
    204,482
    
    
    $
    217,248
    
    
    $
    203,027
    
    
    $
    808,806Gross profit
    
    
    22,292
    
    
    
    20,612
    
    
    
    19,603
    
    
    
    21,902
    
    
    
    84,409Net earnings available to common shareholders
    
    
    10,128
    
    
    
    6,232
    
    
    
    7,447
    
    
    
    7,575
    
    
    
    31,382Net earnings per common share-basic
    
    $
    0.48
    
    
    $
    0.29
    
    
    $
    0.35
    
    
    $
    0.35
    
    
    $
    1.47Net earnings per common share-diluted
    
    $
    0.48
    
    
    $
    0.29
    
    
    $
    0.35
    
    
    $
    0.35
    
    
    $
    1.47
 First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    Year toquarter
    
    
    quarter
    
    
    quarter
    
    
    quarter
    
    
    Date(in thousands, except per share data)2007Sales
    
    $
    187,343
    
    
    $
    208,997
    
    
    $
    139,891
    
    
    $
    161,896
    
    
    $
    698,127Gross profit
    
    
    27,981
    
    
    
    25,691
    
    
    
    15,972
    
    
    
    19,420
    
    
    
    89,064Net earnings
available to
common
shareholders
    
    
    13,507
    
    
    
    11,032
    
    
    
    4,860
    
    
    
    7,865
    
    
    
    37,264Net earnings per
common
share-basic
    
    $
    0.64
    
    
    $
    0.52
    
    
    $
    0.23
    
    
    $
    0.36
    
    
    $
    1.75Net earnings per
common
share-diluted
    
    $
    0.63
    
    
    $
    0.52
    
    
    $
    0.23
    
    
    $
    0.36
    
    
    $
    1.74
 Note 27  Subsequent Events
     92




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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
  Changes in Internal Controls
  Managements Report on Internal Control over Financial Reporting
   Internal Control 
Integrated Framework.
  
 Item 9B: Other Information
 Change in executive leadership
   93




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##### Table of Contents



2009 Base Salaries Increase
  2009Name
    
    Position
    
    SalariesJames Cowan
    
    President and Chief Executive
Officer (effective April 1, 2009)
    
    $
    350,000Dale C. Davies
    
    Senior Vice President  Chief Financial Officer
and Treasurer
    
    
    205,000
 2009 Bonus Plan
   Stock Appreciation Rights
  Name
    
    Position
    
    Number of SARsJames Cowan
    
    President and Chief Executive
Officer (effective April 1, 2009)
    
    
    50,000Dale C. Davies
    
    Senior Vice President  Chief Financial Officer
and Treasurer
    
    
    18,000Alan C. Lullman
    
    Senior Vice President  Sales, Marketing and
Services
    
    
    15,000
    94




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##### Table of Contents



PART III
 
 Item 10: Directors, Executive Officers and Corporate Governance 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, and Director Independence
   95




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##### Table of Contents



Item 14: Principal Accountant Fees and Services
  
 Part IV
 
 Item 15: Exhibits and Financial Statement Schedules
      96




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##### Table of Contents



Signatures
  American Railcar Industries, Inc.Date: March 6, 2009
    By:
    /s/ James J. UngerName:
    James J. UngerTitle:
    President and Chief Executive Officer Signature
    
    Title
    
    Date/s/ James J. Unger

Name: James J. Unger
    
    President and Chief Executive Officer (principal
executive officer) and Director
    
    March 6, 2009/s/ Dale C. Davies

Name: Dale C. Davies
    
    Senior Vice President, Treasurer and Chief Financial
Officer (principal financial officer)
    
    March 6, 2009/s/ Michael E. Vaughn

Name: Michael E. Vaughn
    
    Vice President and Corporate Controller 
(principal
accounting officer)
    
    March 6, 2009/s/ Vincent J. Intrieri

Name: Vincent J. Intrieri
    
    Director
    
    March 6, 2009/s/ Peter K. Shea

Name: Peter K. Shea
    
    Director
    
    March 6, 2009/s/ James Pontious

Name: James Pontious
    
    Director
    
    March 6, 2009/s/ James Laisure

Name: James Laisure
    
    Director
    
    March 6, 2009/s/ Brett Icahn

Name: Brett Icahn
    
    Director
    
    March 6, 2009/s/ Harold First

Name: Harold First
    
    Director
    
    March 6, 2009/s/ Hunter Gary

Name: Hunter Gary
    
    Director
    
    March 6, 2009
  97




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##### Table of Contents



Exhibit index
 Exhibit No.
    
    Description of Exhibit2.1
    
    
    Agreement and Plan of Merger between American Railcar
Industries, Inc. (Missouri) and American Railcar
Industries, Inc. (Delaware) (incorporated by reference
to Exhibit 2.1 to ARIs Annual Report on Form 10-K for
the fiscal year ended December 31, 2005, filed with the
SEC on March 28, 2006).2.2
    
    
    Stock Purchase Agreement dated March 24, 2006 between
Steel Technologies, Inc. and ARI Acquisition Sub joined
in by American Railcar Industries (incorporated by
reference to Exhibit 2.2 to ARIs Current Report on
Form 8-K, filed with the SEC on March 28, 2006).3.1
    
    
    Certificate of Incorporation of American Railcar
Industries, Inc. (Delaware) (incorporated by reference
to Exhibit 3.1 to ARIs Registration Statement on Form
S-1, filed with the SEC on December 13, 2005).3.2
    
    
    Amended and Restated By-laws of American Railcar
Industries, Inc. (Delaware) (incorporated by reference
to Exhibit 3.2 to ARIs Current Report on Form 8-K,
filed with the SEC on February 21, 2008).3.3
    
    
    Certificate of Ownership and Merger of American Railcar
Industries, Inc. (Missouri) and American Railcar
Industries, Inc. (Delaware) (incorporated by reference
to Exhibit 3.3 to ARIs Annual Report on Form 10-K for
the fiscal year ended December 31, 2005, filed with the
SEC on March 28, 2006).4.1
    
    
    Specimen Common Stock Certificate of American Railcar
Industries, Inc. (Delaware) (incorporated by reference
to Exhibit 4.1 to ARIs Registration Statement on Form
S-1, Amendment No. 1, filed with the SEC on January 4,
2006).4.2
    
    
    Indenture (Including the form of note), Dated as of
February 28, 2007 (incorporated by reference to Exhibit
4.2 to ARIs Current Report on Form 8-K, filed with the
SEC on March 1, 2007)9.1
    
    
    Voting Agreement dated as of December 8, 2005 by and
between MODAL LLC and the Foundation for a Greater
Opportunity (incorporated by reference to Exhibit 9.1
to ARIs Registration Statement on Form S-1, Amendment
No. 1, filed with the SEC on January 4, 2006).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
(incorporated by reference to Exhibit 10.1 to ARIs
Registration Statement on Form S-1, filed with the SEC
on December 13, 2005).10.2
    
    

License
Agreement dated as of October 1, 1994 by and between ACF
Industries, Incorporated and American Railcar Industries, Inc. as
Licensee (incorporated by reference to Exhibit 10.2 to ARIs
Registration Statement on Form S-1, filed with the SEC on
December 13, 2005).10.3
    
    
    License
Agreement dated as of October 1, 1994 by and between American
Railcar Industries, Inc. and ACF Industries, Incorporated as
Licensee (incorporated by reference to Exhibit 10.3 to ARIs
Registration Statement on Form S-1, filed with the SEC on
December 13, 2005).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 (incorporated by reference to Exhibit
10.4 to ARIs Registration Statement on Form S-1, filed
with the SEC on December 13, 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
(incorporated by reference to Exhibit 10.5 to ARIs
Registration Statement on Form S-1, filed with the SEC
on December 13, 2005).10.6
    
    

Business
Consultation Agreement for Human Resources Consultation between ACF
Industries LLC and American Railcar Industries, Inc. dated
April 1, 2005 (incorporated by reference to Exhibit 10.6 to
ARIs Registration Statement on Form S-1, filed with the
SEC on December 13, 2005).10.7
    
    
    Business
Consultation Agreement for Engineering Services between ACF
Industries LLC and American Railcar Industries, Inc. dated
April 1, 2005 (incorporated by reference to Exhibit 10.7 to
ARIs Registration Statement on Form S-1, filed with the
SEC on December 13, 2005).10.12
    
    
    Amended and Restated
Services Agreement dated
as of June 30, 2005
between American Railcar
Leasing LLC and American
Railcar Industries, Inc.
(incorporated by
reference to Exhibit
10.12 to ARIs
Registration Statement
on Form S-1, filed with
the SEC on December 13,
2005).
  98




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##### Table of Contents



Exhibit No.
    
    Description of Exhibit10.13
    
    
    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
(incorporated by reference to Exhibit 10.13 to ARIs Registration Statement on Form S-1, filed
with the SEC on December 13, 2005).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 (incorporated by reference to Exhibit
10.18 to ARIs Registration Statement on Form S-1, Amendment No. 2, filed with the SEC on January
11, 2006).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 (incorporated by reference to Exhibit 10.22 to ARIs Registration Statement
on Form S-1, filed with the SEC on December 13, 2005).10.24
    
    
    Redemption Agreement between American Railcar Industries, Inc. and Vegas Financial Corp. dated as
of January 3, 2006. (incorporated by reference to Exhibit 10.24 to ARIs Registration Statement on
Form S-1, Amendment No. 1, filed with the SEC on January 4, 2006).10.25
    
    
    Ohio Castings Company, LLC Amended and Restated Limited Liability Company Agreement, dated as of
June 20, 2003 (incorporated by reference to Exhibit 10.25 to ARIs Registration Statement on Form
S-1, filed with the SEC on December 13, 2005).10.27
    
    
    Letter Agreement between American Railcar Industries, Inc. and James J. Unger, dated as of
November 18, 2005 (incorporated by reference to Exhibit 10.27 to ARIs Registration Statement on
Form S-1, filed with the SEC on December 13, 2005).10.31
    
    
    Employee Benefit Plan Agreement dated as of December 1, 2005 between American Railcar
Industries, Inc. and ACF Industries LLC (incorporated by reference to Exhibit 10.31 to
ARIs Registration Statement on Form S-1, Amendment No. 1, filed with the SEC on
January 4, 2006).
  99




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Exhibit No.
    
    Description of Exhibit10.32
    
    
    Trademark License Agreement dated as of June 30, 2005 by and between American Railcar
Industries, Inc. and American Railcar Leasing LLC (incorporated by reference to
Exhibit 10.32 to ARIs Registration Statement on Form S-1, Amendment No. 1, filed with
the SEC on January 4, 2006).10.33
    
    
    Summary Plan Description of Executive Survivor Insurance Plan Program of Insurance
Benefits for Salaried Employees of American Railcar Industries, Inc (incorporated by
reference to Exhibit 10.33 to ARIs Registration Statement on Form S-1, Amendment No.
1, filed with the SEC on January 4, 2006).10.34
    
    
    Supplemental Executive Retirement Plan of American Railcar Industries, Inc
(incorporated by reference to Exhibit 10.34 to ARIs Annual Report on Form 10-K for
the fiscal year ended December 31, 2005, filed with the SEC on March 28, 2006).10.35
    
    
    Amended and Restated Loan and Security Agreement among American Railcar Industries,
Inc., certain Lenders and North Fork Business Capital Corporation, as agent
(incorporated by reference to Exhibit 10.35 to ARIs Annual Report on Form 10-K for
the fiscal year ended December 31, 2005, filed with the SEC on March 28, 2006).10.36
    
    
    American Railcar, Inc. 2005 Equity Incentive Plan, as amended (incorporated by
reference to Exhibit 10.36 to ARIs Quarterly Report on Form 10-Q for the quarter
ended March 31, 2006, filed with the SEC on May 15, 2006).10.37
    
    
    Form of Option Agreement, as amended, under American Railcar Industries, Inc. 2005
Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.37 to ARIs
Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, filed with the SEC
on May 15, 2006).10.38
    
    
    American Railcar Industries, Inc. 2005 Executive Incentive Plan, as amended
(incorporated by reference to Exhibit 10.38 to ARIs Quarterly Report on Form 10-Q for
the quarter ended March 31, 2006, filed with the SEC on May 15, 2006).10.39
    
    
    Purchase and Sale Agreement dated March 31, 2006 between American Railcar Leasing LLC
and American Railcar Industries, Inc. (incorporated by reference to Exhibit 10.39 to
ARIs Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, filed with
the SEC on May 15, 2006).10.40
    
    
    First Amendment to Amended and Restated Loan and Security Agreement dated October 6,
2006 (incorporated by reference to Exhibit 10.40 to ARIs Current Report on Form 8-K
filed with the SEC on October 12, 2006).10.41
    
    
    Purchase and Sale Agreement dated September 19, 2006 between American Railcar Leasing
LLC and American Railcar Industries, Inc. (incorporated by reference to Exhibit 10.41
to ARIs Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, filed
with the SEC on November 14, 2006).10.42
    
    
    Wheel Set Component and Finished Wheel Set Storage Agreement dated November 13, 2006
between ACF Industries LLC and American Railcar Industries, Inc. (incorporated by
reference to Exhibit 10.42 to ARIs Quarterly Report on Form 10-Q for the quarter
ended September 30, 2006, filed with the SEC on November 14, 2006).10.43
    
    
    Second Amendment to Amended and Restated Loan and Security Agreement dated as of
February 12, 2007 (incorporated by reference to Exhibit 10.43 to ARIs Annual Report
on Form 10-K, as amended for the fiscal year ended December 31, 2006, filed with the
SEC on February 13, 2007).10.44A
    
    
    Registration Rights Agreement, dated February 28, 2007 (incorporated by reference to
Exhibit 10.44 to ARIs Current Report on Form 8-K, filed with the SEC on March 1,
2007).
  100




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Exhibit No.
    
    Description of Exhibit10.44B
    
    

Employment Agreement with Alan C. Lullman (incorporated by reference to Exhibit 10.44
to ARIs Current Report on Form 8-K, filed with the SEC on March 30, 2007).10.45
    
    
    ARI/ARL Services Separation Agreement (incorporated by reference to Exhibit 10.45 to
ARIs Current Report on Form 8-K, filed with the SEC on April 5, 2007).10.46
    
    
    Form of Stock Appreciation Rights Agreement (incorporated by reference to Exhibit
10.46 to ARIs Current Report on Form 8-K, filed with the SEC on April 10, 2007).10.47
    
    
    Third Amendment to Amended and Restated Loan and Security Agreement (incorporated by
reference to Exhibit 10.47 to ARIs Quarterly Report on Form 10-Q for the quarter
ended March 31, 2006, filed with the SEC on May 4, 2007).10.48
    
    

ACF Manufacturing Agreement (incorporated by reference to Exhibit 10.48 to ARIs Current
Report on Form 8-K, filed with the SEC on May 22, 2007).10.50
    
    
    Guaranty Agreement (incorporated by reference to Exhibit 10.50 to ARIs Current Report
on Form 8-K, filed with the SEC on January 4, 2008).10.51
    
    
    Axis, LLC Amended and Restated Limited Liability Company Agreement, dated as of
January 25, 2008 (incorporated by reference to Exhibit 10.51 to ARIs Annual Report on
Form 10-K for the fiscal year ended December 31, 2007, filed with the SEC on February
22, 2008).10.52
    
    
    ARI / ARL Rent and Building Services Extension Agreement, dated as of February 22,
2008 (incorporated by reference to Exhibit 10.52 to ARIs Annual Report on Form 10-K
for the fiscal year ended December 31, 2007, filed with the SEC on February 22, 2008).10.53
    
    
    Fleet Services Agreement with American Railcar Leasing, LLC, dated as of February 26,
2008 (incorporated by reference to Exhibit 10.53 to ARIs Quarterly Report on Form
10-Q for the quarter ended March 31, 2008, filed with the SEC on May 12, 2008). 10.54
    
    
    Joint Venture Agreement by and between American Railcar Mauritius II and Amtek
Transportation Systems Limited (incorporated by reference to Exhibit 10.54 to ARIs
Current Report on Form 8-K, filed with the SEC on June 20, 2008).10.55
    
    
    Form of Stock Appreciation Rights Agreement (incorporated by reference to Exhibit
10.55 to ARIs Quarterly Report on Form 10-Q for the quarter ended June 30, 2008,
filed with the SEC on August 8, 2008).10.56
    
    
    Employment Agreement between American Railcar Industries, Inc. and Dale C. Davies,
dated as of September 12, 2008 (incorporated by reference to Exhibit 10.56 to ARIs
Current Report on Form8-K, filed with the SEC on September 16, 2008).12.1
    
    
    Computation of Ratio of Earnings to Fixed Charges.*21.1
    
    
    Subsidiaries of American Railcar Industries, Inc.*23.1
    
    
    Consent of Grant Thornton LLP.*31.1
    
    
    Rule 13a-15(e) and 15d-15(e) Certification of the Chief Executive Officer.*
  101




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Exhibit No.
    
    Description of Exhibit31.2
    
    
    Rule 13a-15(e) and 15d-15(e) Certification of the Chief Financial Officer.*32.1
    
    

Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.*
 
 *
    
    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.
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