##### 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, 2007
 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
(State or Other Jurisdiction of Incorporation or Organization)
    
    43-1481791
(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: Common Stock, par value $.01 per share
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE
  (1)
    
    Proxy Statement for the Registrants 2008 Annual Meeting of Shareholders  Items 10, 11, 12,
13 and 14.




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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
  
    
    the cyclical nature of our business and adverse economic and market conditions;
    
    our reliance upon a small number of customers that represent a large percentage
of our revenues;
    
    risks associated with the conversion of our railcar backlog into revenues,
including pricing and cancellation provisions in some contracts we have with our
customers;
    
    the highly competitive nature of our industry;
    
    fluctuating costs of raw materials, including steel and railcar components, and
delays in the delivery of such raw materials and components;
    
    fluctuations in the supply of components and raw materials we use in railcar
manufacturing and our ability to maintain relationships with our suppliers of railcar
components and raw materials;
    
    the risk of damage to our primary railcar manufacturing complexes or equipment in
Paragould or Marmaduke, Arkansas;
    
    the variable purchase patterns of our railcar customers and the timing of
completion, delivery and acceptance of customer orders;
    
    risks associated with our capital expenditure projects, and those of joint
ventures in which we are involved, including without limitation:
 
    
    construction delays;
    
    unexpected costs;
    
    our planned dependence on various new manufacturing facilities to produce
railcars for which we have already accepted orders and railcar components; and
    
    other risks typically associated with the construction of new
manufacturing facilities;
 
    
    our dependence on our key personnel and the risk that we may lose skilled,
trained, qualified production and management employees in relation to production
slowdowns or any other significant factor that could cause us to lose these employees;
    
    risks associated with our changing business including, without limitation:
 
    
    potential for labor shortages;
    
    the need to implement improvements to our infrastructure to accommodate
growth or changing market conditions; and
    
    risks and costs associated with those improvements;
 
    
    the difficulties of integrating any businesses we might acquire with our own;
    
    the uncertainty of acceptance of our new railcar offerings by our customers or
that our new offerings may not be initially profitable, if at all;
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
    
    the cost of complying with environmental laws and regulations;
    
    the costs associated with complying with various regulations associated with
being a public company;
    
    our joint ventures, including our Ohio Castings and Axis, LLC joint ventures and
our relationships with our partners in those joint ventures may not be successful;
    
    our relationship with Mr. Carl C. Icahn (our principal beneficial stockholder and
the chairman of our board of directors) and his affiliates as a purchaser of our
products, supplier of components to us and as a provider of significant managerial
support;
    
    potential failure of ACF Industries LLC (ACF), an affiliate of Mr. Carl C.
Icahn, to honor its indemnification obligations to us;
    
    potential risk of increased unionization of our workforce;
    
    our ability to manage our pension costs;
    
    potential significant warranty claims;
    
    covenants in our revolving credit facility, as amended, our unsecured senior
notes and other agreements as they presently exist, governing our indebtedness that
limit our managements discretion in the operation of our businesses;
    
    substantial indebtedness resulting from our outstanding notes could adversely
affect our operations and financial results and prevent us from fulfilling our
obligations;
    
    our ability to incur substantially more debt 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 relating to the unsecured senior notes;
    
    we may not be able to protect our intellectual property and prevent its improper
use by third parties;
    
    our products could infringe the intellectual property rights of others, which
could lead to litigation and potential significant damages;
    
    we may incur increased insurance claims and expenses, which could adversely
affect profitability;
    
    our failure to comply with agency regulations could adversely affect our
financial results;
    
    the railroad industry could consolidate further, which could adversely affect our
operations;
    
    we could experience a reduction in the availability of energy supplies or an
increase in energy costs;
    
    we may be required to reduce the value of our inventory, long-lived assets and/or
goodwill according to generally accepted accounting principles;
    
    our stock price is subject to volatility;
    
    our stock price could fluctuate as a result of sales by Mr. Carl C. Icahn or any
other significant stockholder;
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
    
    Mr. Carl C. Icahn exerts significant influence over us and his interest may
conflict with the interest of our other stockholders;
    
    we are not subject to all the NASDAQ corporate governance requirements due to our
controlled company status; and
    
    we could be limited in our ability to pay dividends.
  4




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##### 



AMERICAN RAILCAR INDUSTRIES, INC.
 FORM 10-K
 TABLE OF CONTENTS
 PAGEPART IItem 1.
    
    Business
    
    
    6Item 1A.
    
    Risk Factors
    
    
    12Item 1B.
    
    Unresolved Staff Comments
    
    
    24Item 2.
    
    Properties
    
    
    24Item 3.
    
    Legal Proceedings
    
    
    26Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    26PART IIItem 5.
    
    Market for
Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    26Item 6.
    
    Selected Consolidated Financial Data
    
    
    28Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    30Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    48Item 8.
    
    Financial Statements and Supplementary Data
    
    
    49Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    90Item 9A.
    
    Controls and Procedures
    
    
    90Item 9B.
    
    Other Information
    
    
    90PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance of the Registrant
    
    
    92Item 11.
    
    Executive Compensation
    
    
    92Item 12.
    
    Security Ownership
of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    92Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    92Item 14.
    
    Principal Accountant Fees and Services
    
    
    92PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    93Signatures
    
    
    94Amended and Restated Limited Liability Co AgreementARI/ARL Rent and Building Services Extention AgreementComputation of Ratio of Earnings to Fixed ChargesSubsidiariesConsent of Grant Thornton LLPCertification of Chief Executive OfficerCertification of Chief Financial OfficerSection 906 Certification
  5




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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
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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.
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##### Table of Contents




    
    Cement Railcars.Cement loads are heavier than many other loads of comparable volume,
and therefore cement railcars are smaller in size to compensate for the weight.
Consequently, we can build more cement covered hopper railcars per day than we can build of
any other covered hopper railcar that we manufacture.
    
    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, a rupture disc and a vacuum relief valve.
 Tank railcars.
  Other railcar types.
 Component manufacturing.
  Railcar Services
  Railcar repair and refurbishment.
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Railcar fleet management.
 SALES AND MARKETING
   BACKLOG
   Year ended December 31,2007
    
    
    2006
    
    
    2005Railcar backlog at start of period
    
    
    16,473
    
    
    
    14,510
    
    
    
    7,547New railcars delivered
    
    
    (7,055
    )
    
    
    (6,947
    )
    
    
    (6,875
    )New railcar orders
    
    
    2,511
    
    
    
    8,910
    
    
    
    13,838Railcar backlog at end of period
    
    
    11,929
    
    
    
    16,473
    
    
    
    14,510Estimated railcar backlog value
at end of period (in thousands)
1
    
    $
    966,470
    
    
    $
    1,318,013
    
    
    $
    1,074,408
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(1)
    
    Estimated backlog value reflects the total revenues expected to be attributable to the
backlog reported at the end of the particular period as if such backlog were converted to
actual revenues. Estimated backlog does not reflect potential price adjustments for
material cost changes as provided for in customer contracts.  SUPPLIERS AND MATERIALS
     Steel.
 Tank heads and floor sheet reinforcements.
 Castings.
 Wheels and brakes.
 Axles.
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COMPETITION
    INTELLECTUAL PROPERTY
  EMPLOYEES
  REGULATION
  ENVIRONMENTAL MATTERS
 11




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Item 1A: Risk Factors
 RISKS RELATED TO OUR BUSINESS
 Due in part to the highly cyclical nature of the railcar industry, we have incurred substantial
operating losses in the past and may experience declines in revenue and substantial operating
losses in the future.
  12




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We depend upon a small number of customers that represent a large percentage of our revenues. The
loss of any single customer, or a reduction in sales to any such customer, could have a material
adverse effect on our business, financial condition and results of operations.
  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.
   We operate in a highly competitive industry and we may be unable to compete successfully, which
would materially adversely affect our results of operations.
  13




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The cost of the raw materials and components that we use to manufacture railcars, particularly
steel, are high and 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.
   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.
   14




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Equipment failures, delays in deliveries or extensive damage to our facilities, particularly our
railcar manufacturing complexes in Paragould or Marmaduke, Arkansas, or to ACFs tank railcar
manufacturing facility, could lead to production or service curtailments or shutdowns.
   The variable purchase patterns of our railcar customers and the timing of completion, delivery and
acceptance of customer orders may cause our revenues and income from operations to vary
substantially each quarter, which could result in significant fluctuations in our quarterly
results.
  Our failure to complete our 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 ability to fulfill our existing railcar customer commitments and our business, financial
condition and results of operations.
  Our efforts to manage overhead and manage production slow downs may result in the loss of key
employees.
  15




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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.
    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.
  If we face labor shortages or increased labor costs, our growth and results of operations could be
materially adversely affected.
  Rapid growth could strain our operations and require us to incur costs to upgrade our
infrastructure.
  16




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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.
    17




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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.
  Our joint ventures, including our Ohio Castings and Axis, LLC joint ventures, and our relationships
with our partners in those joint ventures may not be successful, which could materially adversely
affect our business.
  Companies affiliated with Mr. Carl C. Icahn are important customers, suppliers and manufacturers.
     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.
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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.
  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 of pension and other postretirement benefit plans
that we sponsor could materially adversely affect our financial condition and results of
operations.
  19




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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.
   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 adverse economic and industry conditions;
 20




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
    
    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 and our subsidiaries may still be able to incur
substantially more debt, 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 our the unsecured senior notes.
    If we are unable to protect our intellectual property and prevent its improper use by third
parties, our ability to compete in the market may be harmed.
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Our products could infringe the intellectual property rights of others, which may lead to
litigation that could itself be costly, could result in the payment of substantial damages or
royalties, and could prevent us from using technology that is essential to our products.
  
    
    cease selling or using any of our products that incorporate the asserted
intellectual property, which would adversely affect our revenue;
    
    pay substantial damages for past use of the asserted intellectual property;
    
    obtain a license from the holder of the asserted intellectual property, which
license may not be available on reasonable terms, if at all; and
    
    redesign or rename, in the case of trademark claims, our products to avoid
infringing the intellectual property rights of third parties, which may not be possible
and could be costly and time-consuming if it is possible to do.
  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.
  22




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Further consolidation of the railroad industry may materially adversely affect our business.
  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.
  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.
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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
 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.
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LeaseLeased or
    
    ExpirationLocation
    
    Use
    
    Owned
    
    DateParagould, Arkansas
    
    Railcar manufacturing
    
    Owned
    
    N/AMarmaduke, Arkansas
    
    Railcar manufacturing
    
    Owned
    
    N/ASt. Charles, Missouri
    
    Aluminum foundry and machining
    
    Leased
    
    2/28/2011Jackson, Missouri
    
    Railcar components manufacturing
    
    Owned
    
    N/AKennett, Missouri
    
    Railcar subassembly and small
components manufacturing
    
    Owned
    
    N/ALongview, Texas
    
    Steel foundry
    
    Owned
    
    N/A
  Location
    
    Leased or Owned
    
    Lease Expiration DateLongview, Texas
    
    Owned
    
    N/AGoodrich, Texas
    
    Owned
    
    N/ANorth Kansas City, Missouri
    
    Owned
    
    N/ATennille, Georgia (1)
    
    Owned
    
    N/AMilton, Pennsylvania (2)
    
    Owned
    
    N/AGonzales, Louisiana
    
    Leased
    
    3/31/2010Green River, Wyoming
    
    Leased
    
    12/1/2012Deer Park, Texas
    
    Leased
    
    6/30/2008(3)Bude, Mississippi
    
    Leased
    
    4/30/2008(4)Sarnia, Ontario
    
    Leased
    
    10/31/2026
 
 (1)
    
    As of December 31, 2007, our facility located in Tennille, Georgia was secured by a mortgage
that was due February 10, 2008. This mortgage was fully paid in January 2008.(2)
    
    The facility in Milton, Pennsylvania has been idle since 2003.(3)
    
    We have a right to buy this property in 2008 at fair market value when the lease expires and
intend to do so at that time. 25




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(4)
    
    The majority of the facility in Bude, Mississippi is subject to a lease from the city that
expires on April 30, 2008. This lease automatically renews on May 1, 2008 and we plan 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. 
 Item 3: Legal Proceedings
   
 Item 4: Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5:
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 Market Information
   PricesYear 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.
  
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Nasdaq Composite
    
    DJ TransportationARII
    
    Index
    
    Index1/20/2006
    
    $
    100.00
    
    
    $
    100.00
    
    
    $
    100.00Q1 2006
    
    $
    148.60
    
    
    $
    104.12
    
    
    $
    109.85Q2 2006
    
    $
    140.42
    
    
    $
    96.83
    
    
    $
    118.53Q3 2006
    
    $
    123.59
    
    
    $
    100.86
    
    
    $
    107.09Q4 2006
    
    $
    144.67
    
    
    $
    107.06
    
    
    $
    109.66Q1 2007
    
    $
    126.82
    
    
    $
    107.32
    
    
    $
    115.68Q2 2007
    
    $
    166.09
    
    
    $
    115.54
    
    
    $
    122.61Q3 2007
    
    $
    93.68
    
    
    $
    120.09
    
    
    $
    116.30Q4 2007
    
    $
    82.16
    
    
    $
    115.84
    
    
    $
    109.91
 
 Item 6: Selected Consolidated Financial Data.
  28




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##### Table of Contents



Years ended December 31,2007
    
    
    2006 (8)
    
    
    2005
    
    
    2004
    
    
    2003($ in thousands, except per share data)Consolidated statement of operations data:RevenuesManufacturing operations (1)
    
    $
    648,124
    
    
    $
    597,913
    
    
    $
    564,513
    
    
    $
    316,432
    
    
    $
    188,119Railcar services (2)
    
    
    50,003
    
    
    
    48,139
    
    
    
    43,647
    
    
    
    38,624
    
    
    
    29,875Total revenues
    
    
    698,127
    
    
    
    646,052
    
    
    
    608,160
    
    
    
    355,056
    
    
    
    217,994Cost of goods soldCost of manufacturing operations
    
    
    (568,023
    )
    
    
    (537,344
    )
    
    
    (518,063
    )
    
    
    (306,283
    )
    
    
    (174,629
    )Cost of railcar services (3)
    
    
    (41,040
    )
    
    
    (38,020
    )
    
    
    (38,041
    )
    
    
    (34,473
    )
    
    
    (29,762
    )Total cost of goods sold
    
    
    (609,063
    )
    
    
    (575,364
    )
    
    
    (556,104
    )
    
    
    (340,756
    )
    
    
    (204,391
    )Gross profit
    
    
    89,064
    
    
    
    70,688
    
    
    
    52,056
    
    
    
    14,300
    
    
    
    13,603Income related to insurance
recoveries, net
    
    
    
    
    
    
    9,946
    
    
    
    
    
    
    
    
    
    
    
    Gain on asset conversion, net
    
    
    
    
    
    
    4,323
    
    
    
    
    
    
    
    
    
    
    
    Selling, administrative and other (4)
    
    
    (27,379
    )
    
    
    (28,399
    )
    
    
    (25,354
    )
    
    
    (10,334
    )
    
    
    (10,340
    )Operating earnings (loss)
    
    
    61,685
    
    
    
    56,558
    
    
    
    26,702
    
    
    
    3,966
    
    
    
    3,263Interest income (5)
    
    
    13,829
    
    
    
    1,504
    
    
    
    1,658
    
    
    
    4,422
    
    
    
    3,161Interest expense (6)
    
    
    (17,027
    )
    
    
    (1,372
    )
    
    
    (4,846
    )
    
    
    (3,667
    )
    
    
    (3,616
    )Income (loss) from joint venture
    
    
    881
    
    
    
    (734
    )
    
    
    610
    
    
    
    (609
    )
    
    
    (604
    )Earnings before income tax expense
    
    
    59,368
    
    
    
    55,956
    
    
    
    24,124
    
    
    
    4,112
    
    
    
    2,204Income tax expense
    
    
    (22,104
    )
    
    
    (20,752
    )
    
    
    (9,356
    )
    
    
    (2,191
    )
    
    
    (1,139
    )Net earnings from continuing
operations
    
    $
    37,264
    
    
    $
    35,204
    
    
    $
    14,768
    
    
    $
    1,921
    
    
    $
    1,065Less preferred dividends
    
    
    
    
    
    
    (568
    )
    
    
    (13,251
    )
    
    
    (13,241
    )
    
    
    (9,690
    )Net earnings (loss) available to
common shareholders
    
    $
    37,264
    
    
    $
    34,636
    
    
    $
    1,517
    
    
    $
    (11,320
    )
    
    $
    (8,625
    )Weighted average shares outstanding
basic (7)
    
    
    21,274
    
    
    
    20,667
    
    
    
    11,147
    
    
    
    10,143
    
    
    
    9,328Net earnings (loss) per common share
basic (7)
    
    $
    1.75
    
    
    $
    1.68
    
    
    $
    0.14
    
    
    $
    (1.12
    )
    
    $
    (0.92
    )Weighted average shares outstanding
diluted (7)
    
    
    21,357
    
    
    
    20,733
    
    
    
    11,147
    
    
    
    10,143
    
    
    
    9,328Net earnings (loss) per common share
diluted (7)
    
    $
    1.74
    
    
    $
    1.67
    
    
    $
    0.14
    
    
    $
    (1.12
    )
    
    $
    (0.92
    )Dividends declared per common share
    
    $
    0.12
    
    
    $
    0.12
    
    
    
    
    
    
    
    
    
    
    
    Consolidated balance sheet data (at period end):Cash and cash equivalents
    
    $
    303,882
    
    
    $
    40,922
    
    
    $
    28,692
    
    
    $
    6,943
    
    
    $
    65Net working capital
    
    
    380,248
    
    
    
    126,086
    
    
    
    25,768
    
    
    
    46,565
    
    
    
    15,084Net property, plant and equipment
    
    
    175,166
    
    
    
    130,293
    
    
    
    92,985
    
    
    
    76,951
    
    
    
    71,230Total assets
    
    
    654,384
    
    
    
    338,926
    
    
    
    268,580
    
    
    
    356,840
    
    
    
    196,508Total liabilities
    
    
    363,396
    
    
    
    88,746
    
    
    
    161,820
    
    
    
    221,817
    
    
    
    190,704Total shareholders equity
    
    
    290,988
    
    
    
    250,180
    
    
    
    106,760
    
    
    
    135,023
    
    
    
    5,804Consolidated cash flow data:Net cash provided by (used in)
operating activities
    
    $
    60,230
    
    
    $
    29,967
    
    
    $
    41,571
    
    
    $
    (17,082
    )
    
    $
    (1,639
    )Net cash used in investing activities
    
    
    (67,434
    )
    
    
    (51,704
    )
    
    
    (22,580
    )
    
    
    (11,037
    )
    
    
    (2,251
    )Net cash provided by (used in)
financing activities
    
    
    270,164
    
    
    
    33,967
    
    
    
    2,758
    
    
    
    34,997
    
    
    
    3,772
 29




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##### Table of Contents



(1)
    
    Includes revenues from transactions with affiliates of $140.2 million, $50.0 million, $47.2
million, $64.4 million and $62.9 million in 2007, 2006, 2005, 2004 and 2003, respectively.
 (2)
    
    Includes revenues from transactions with affiliates of $16.0 million, $18.9 million, $20.6
million, $19.4 million and $11.0 million in 2007, 2006, 2005, 2004 and 2003, respectively.
  (4)
    
    Includes costs from transactions with affiliates of $0.6 million, $2.0 million, $2.0 million,
$0.7 million and $0.8 million in 2007, 2006, 2005, 2004 and 2003, respectively. 2005 includes
$8.9 million charge for pension settlement.
 (5)
    
    Includes interest income from affiliates of zero, zero, $1.0 million, $3.9 million and $3.0
million in 2007, 2006, 2005, 2004 and 2003, respectively.
 (6)
    
    Includes interest expense to affiliates of zero, $0.1 million, $2.1 million, $1.5 million and
zero in 2007, 2006, 2005, 2004 and 2003, respectively.
 (7)
    
    Share and per share data has been restated to give effect to the merger, as discussed in Note
23 of our Financial Statements.
 (8)
    
    Includes the acquisition of Custom Steel effective as of March 31, 2006, which provided cost
savings during 2006 within our cost of goods sold cost of 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
     30




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##### Table of Contents



Manufacturing operations
    Railcar services
  FACTORS AFFECTING OPERATING RESULTS
  Cyclicality of the railcar industry.
 Customer concentration.
 31




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##### Table of Contents



Customer order size and frequency.
 Revenues from affiliates.
 Raw material costs.
 Component supply constraints.
 RESULTS OF OPERATIONS
  32




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##### Table of Contents



Years ended December 31,2007
    
    2006
    
    2005RevenuesManufacturing operations
    
    
    92.8
    %
    
    
    92.5
    %
    
    
    92.8
    %Railcar services
    
    
    7.2
    %
    
    
    7.5
    %
    
    
    7.2
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods soldCost of manufacturing
    
    
    (81.4
    %)
    
    
    (83.2
    %)
    
    
    (85.2
    %)Cost of railcar services
    
    
    (5.9
    %)
    
    
    (5.9
    %)
    
    
    (6.2
    %)Total cost of goods sold
    
    
    (87.3
    %)
    
    
    (89.1
    %)
    
    
    (91.4
    %)Gross profit
    
    
    12.7
    %
    
    
    10.9
    %
    
    
    8.6
    %Income related to insurance recoveries, net
    
    
    0.0
    %
    
    
    1.5
    %
    
    
    0.0
    %Gain on asset conversion, net
    
    
    0.0
    %
    
    
    0.7
    %
    
    
    0.0
    %Selling, administrative and other expenses
    
    
    (3.9
    %)
    
    
    (4.4
    %)
    
    
    (4.2
    %)Earnings from operations
    
    
    8.8
    %
    
    
    8.7
    %
    
    
    4.4
    %Interest income
    
    
    2.0
    %
    
    
    0.2
    %
    
    
    0.3
    %Interest expense
    
    
    (2.4
    %)
    
    
    (0.2
    %)
    
    
    (0.8
    %)Income (loss) from joint venture
    
    
    0.1
    %
    
    
    (0.1
    %)
    
    
    0.1
    %Earnings before income tax expense
    
    
    8.5
    %
    
    
    8.6
    %
    
    
    4.0
    %Income tax expense
    
    
    (3.2
    %)
    
    
    (3.2
    %)
    
    
    (1.6
    %)Net earnings
    
    
    5.3
    %
    
    
    5.4
    %
    
    
    2.4
    %
 Comparison of the year ended December 31, 2007 to the year ended December 31, 2006
   Revenues
    33




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




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##### 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




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Income (loss) from joint venture
  Income tax expense
  Comparison of the year ended December 31, 2006 to the year ended December 31, 2005
    Revenues
   36




---



##### Table of Contents



Gross profit
      Income Related to Insurance Recoveries, Net and Gain on Asset Conversion, Net
   Selling, administrative and other expenses
   37




---



##### Table of Contents



Interest expense and interest income
   Income (loss) from joint venture
  Income tax expense
  LIQUIDITY AND CAPITAL RESOURCES
  38




---



##### Table of Contents



Outstanding debt
 Senior Unsecured Notes.
  Revolving credit facility.
 Cash flows
  Year endedDecember 31,2007Net cash provided by (used in):Operating activities
    
    $
    60,230Investing activities
    
    
    (67,434
    )Financing activities
    
    
    270,164$
    262,960
 Operating Activities
  39




---



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Investing Activities
   Financing Activities
  Capital expenditures.
  40




---



##### Table of Contents



Dividends.
 Contractual obligations
  41




---



##### Table of Contents



Payments due by PeriodAfter 5Contractual Obligations
    
    Total
    
    1 year
    
    2-3 years
    
    4-5 years
    
    years(in thousands)Short-Term Debt Obligations
    
    $
    8
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations 1
    
    $
    7,605
    
    
    
    964
    
    
    
    1,258
    
    
    
    701
    
    
    
    4,682Purchase Obligations
    
    $
    28,593
    
    
    
    26,674
    
    
    
    1,919
    
    
    
    
    
    
    
    Senior Unsecured Notes 2
    
    $
    275,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    275,000Interest payments on senior unsecured
notes 3
    
    $
    134,063
    
    
    
    20,625
    
    
    
    41,250
    
    
    
    41,250
    
    
    
    30,938Fees related to Revolving Credit
Agreement 4
    
    $
    784
    
    
    
    424
    
    
    
    360
    
    
    
    
    
    
    
    FIN 48 Obligations 5
    
    $
    1,493
    
    
    
    
    
    
    
    1,493
    
    
    
    
    
    
    
    Equipment Lease Buyout 6
    
    $
    6,500
    
    
    
    6,500
    
    
    
    
    
    
    
    
    
    
    
    Pension Funding
    
    $
    1,965
    
    
    
    834
    
    
    
    751
    
    
    
    380
    
    
    
    Total
    
    $
    456,011
    
    
    $
    56,029
    
    
    $
    47,031
    
    
    $
    42,331
    
    
    $
    310,620
 
 (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 September 1 and March 1 of every year.(4)
    
    Our revolving credit facility, as amended, permits us to borrow up to $100.0 million
thereunder, subject to applicable covenants, and expires in less than three years. We have no
borrowings outstanding on the revolving credit facility.(5)
    
    See Note 12 in our Notes to Consolidated Financial Statements for a description of our
Financial Accounting Standards Board (FASB) Interpretation 48, Accounting for Uncertainty in
Income Taxes, an interpretation of FASB Statements No. 109(FIN 48), obligations.(6)
    
    In December 2007, we gave a notice to the lessor of equipment that we were going to buyout
equipment under lease in early 2008.    Contingencies
 42




---



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CRITICAL ACCOUNTING ESTIMATES AND POLICIES
  43




---



##### Table of Contents



Revenue recognition
  Inventory
  Long-lived assets and Goodwill
  Product warranties
  Income taxes
  44




---



##### Table of Contents



Pension and postretirement benefits
  Discount rates
 Health care cost trend rates
 Expected return on plan assets
 Mortality and retirement rates
   45




---



##### Table of Contents



Effect on DecemberEffect on 2008 Pre-Tax
    
    
    31, 2007 ProjectedChange in Assumption
    
    Pension Expense
    
    
    Benefit Obligation($ in thousands)1% decrease in discount rate
    
    
    42
    
    
    
    2,0041% increase in discount rate
    
    
    (184
    )
    
    
    (2,004
    )1% decrease in expected return on assets
    
    
    136
    
    
    
    N/A1% increase in expected return on assets
    
    
    (136
    )
    
    
    N/A
  Effect on DecemberEffect on 2008 Pre-Tax
    
    31, 2007 ProjectedChange in Assumption
    
    Postretirement Expense
    
    Benefit Obligation($ in thousands)1% decrease in discount rate
    
    
    33
    
    
    
    6721% increase in discount rate
    
    
    (31
    )
    
    
    (527
    )
  Effect on 2008 Pre-Tax
    
    Effect on DecemberPostretirement Service
    
    31, 2007 ProjectedChange in Assumption
    
    Cost and Interest Cost
    
    Benefit Obligation($ in thousands)1% decrease in health care cost trend rate
    
    
    (29
    )
    
    
    (393
    )1% increase in health care cost trend rate
    
    
    31
    
    
    
    489
  Environmental
  Stock Based Compensation
 Share-Based Payment" Accounting for
Stock-Based Compensation" Accounting for Stock Issues to Employees.
 46




---



##### Table of Contents



Fair value of financial instruments
  OFF BALANCE SHEET ARRANGEMENTS
  47




---



##### Table of Contents



Item 7A: Quantitative and Qualitative Disclosures About Market Risk
    48




---



##### 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
    
    
    50Report of Grant Thornton LLP Independent Registered Public Accounting Firm
    
    
    51Consolidated Balance Sheets as of December 31, 2007 and 2006
    
    
    52Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005
    
    
    53Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005
    
    
    54Consolidated Statement of Shareholders Equity and Comprehensive Income for the years ended December 31, 2007, 2006 and 2005
    
    
    55Notes to Consolidated Financial Statements
    
    
    56
 49




---



##### Table of Contents



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




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Internal ControlIntegrated Framework
  
 51




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS
  As ofDecember 31,
    
    December 31,2007
    
    2006AssetsCurrent assets:Cash and cash equivalents
    
    $
    303,882
    
    
    $
    40,922Accounts receivable, net
    
    
    33,523
    
    
    
    34,868Accounts receivable, due from affiliates
    
    
    17,175
    
    
    
    9,632Inventories, net
    
    
    93,475
    
    
    
    103,510Prepaid expenses
    
    
    5,015
    
    
    
    5,853Deferred tax assets
    
    
    1,610
    
    
    
    2,089Total current assets
    
    
    454,680
    
    
    
    196,874Property, plant and equipment, net
    
    
    175,166
    
    
    
    130,293Deferred debt issuance costs
    
    
    3,977
    
    
    
    235Goodwill
    
    
    7,169
    
    
    
    7,169Other assets
    
    
    37
    
    
    
    37Investment in joint venture
    
    
    13,355
    
    
    
    4,318Total assets
    
    $
    654,384
    
    
    $
    338,926Liabilities and Stockholders EquityCurrent liabilities:Current portion of long-term debt
    
    $
    8
    
    
    $
    88Accounts payable
    
    
    47,903
    
    
    
    54,962Accounts payable, due to affiliates
    
    
    2,867
    
    
    
    1,689Accrued expenses and taxes
    
    
    5,729
    
    
    
    3,099Accrued compensation
    
    
    10,379
    
    
    
    10,282Accrued interest expense
    
    
    6,907
    
    
    
    32Accrued dividends
    
    
    639
    
    
    
    636Total current liabilities
    
    
    74,432
    
    
    
    70,788Long-term debt, net of current portion
    
    
    
    
    
    
    8Senior unsecured notes
    
    
    275,000
    
    
    
    Deferred tax liability
    
    
    5,690
    
    
    
    7,042Pension and post-retirement liabilities
    
    
    6,572
    
    
    
    10,859Other liabilities
    
    
    1,702
    
    
    
    49Total liabilities
    
    
    363,396
    
    
    
    88,746Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity:Common
stock, $.01 par value, 50,000,000 shares authorized, 21,302,296 and
21,207,773 shares issued and outstanding
at December 31, 2007 and December 31,
2006, respectively
    
    
    213
    
    
    
    212Additional paid-in capital
    
    
    239,621
    
    
    
    235,768Retained earnings
    
    
    51,314
    
    
    
    16,649Accumulated other comprehensive loss
    
    
    (160
    )
    
    
    (2,449
    )Total stockholders equity
    
    
    290,988
    
    
    
    250,180Total liabilities and stockholders equity
    
    $
    654,384
    
    
    $
    338,926
  52




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##### Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS
  For the Years Ended December 31,2007
    
    
    2006
    
    
    2005Revenues:Manufacturing operations (including revenues from affiliates of
$140,164, $50,003 and $47,195 in 2007, 2006 and 2005, respectively)
    
    $
    648,124
    
    
    $
    597,913
    
    
    $
    564,513Railcar services (including revenues from affiliates of $15,969, $18,923
and $20,645 in 2007, 2006, 2005, respectively)
    
    
    50,003
    
    
    
    48,139
    
    
    
    43,647Total revenues
    
    
    698,127
    
    
    
    646,052
    
    
    
    608,160Cost of goods sold:Manufacturing operations
    
    
    (568,023
    )
    
    
    (537,344
    )
    
    
    (518,063
    )Railcar services
    
    
    (41,040
    )
    
    
    (38,020
    )
    
    
    (38,041
    )Total cost of goods sold
    
    
    (609,063
    )
    
    
    (575,364
    )
    
    
    (556,104
    )Gross profit
    
    
    89,064
    
    
    
    70,688
    
    
    
    52,056Income related to insurance recoveries, net
    
    
    
    
    
    
    9,946
    
    
    
    Gain on asset conversion, net
    
    
    
    
    
    
    4,323
    
    
    
    Selling, administrative and other (including costs from affiliates of
$606, $2,035, and $1,959, in 2007, 2006 and 2005, respectively)
    
    
    (27,379
    )
    
    
    (28,399
    )
    
    
    (25,354
    )Earnings from operations
    
    
    61,685
    
    
    
    56,558
    
    
    
    26,702Interest income (including interest income from affiliates of $0, $0 and
$1,008 in 2007, 2006 and 2005, respectively)
    
    
    13,829
    
    
    
    1,504
    
    
    
    1,658Interest expense (including interest expense to affiliates of $0, $98
and $2,063 in 2007, 2006 and 2005, respectively)
    
    
    (17,027
    )
    
    
    (1,372
    )
    
    
    (4,846
    )Earnings (loss) from joint venture
    
    
    881
    
    
    
    (734
    )
    
    
    610Earnings before income tax expense
    
    
    59,368
    
    
    
    55,956
    
    
    
    24,124Income tax expense
    
    
    (22,104
    )
    
    
    (20,752
    )
    
    
    (9,356
    )Net earnings from continuing operations
    
    $
    37,264
    
    
    $
    35,204
    
    
    $
    14,768Less preferred dividends
    
    
    
    
    
    
    (568
    )
    
    
    (13,251
    )Earnings available to common shareholders
    
    $
    37,264
    
    
    $
    34,636
    
    
    $
    1,517Net earnings per common share  basic
    
    $
    1.75
    
    
    $
    1.68
    
    
    $
    0.14Net earnings per common share  diluted
    
    $
    1.74
    
    
    $
    1.67
    
    
    $
    0.14Weighted average common shares outstanding  basic
    
    
    21,274
    
    
    
    20,667
    
    
    
    11,147Weighted average common shares outstanding  diluted
    
    
    21,357
    
    
    
    20,733
    
    
    
    11,147
  53




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
  For the Years Ended December 31,2007
    
    
    2006
    
    
    2005Operating activities:Net earnings
    
    $
    37,264
    
    
    $
    35,204
    
    
    $
    14,768Adjustments to reconcile net earnings to net cash
(used in) provided by operating activities:Depreciation
    
    
    14,085
    
    
    
    10,674
    
    
    
    6,807Amortization of deferred costs
    
    
    680
    
    
    
    127
    
    
    
    Loss on the write-off of property, plant and equipment
    
    
    385
    
    
    
    4,393
    
    
    
    Expense related to assumption of pension plan
    
    
    
    
    
    
    
    
    
    
    8,335Insurance compensation for assets and storm clean-up
    
    
    
    
    
    
    (9,938
    )
    
    
    Write-off of deferred financing costs
    
    
    
    
    
    
    566
    
    
    
    Stock based compensation
    
    
    1,927
    
    
    
    8,116
    
    
    
    Excess tax benefits from stock option exercises
    
    
    (241
    )
    
    
    
    
    
    
    Change in joint venture investment as a result of loss (earnings)
    
    
    (881
    )
    
    
    734
    
    
    
    (610
    )Expense relating to pre-recapitalization liabilities
    
    
    
    
    
    
    
    
    
    
    1,061Provision (benefit) for deferred income taxes
    
    
    (370
    )
    
    
    (154
    )
    
    
    5,606Provision for losses on accounts receivable
    
    
    196
    
    
    
    383
    
    
    
    323Long-lived asset impairment charges
    
    
    
    
    
    
    400
    
    
    
    Changes in operating assets and liabilities:Accounts receivable, net
    
    
    1,149
    
    
    
    3,020
    
    
    
    (13,413
    )Accounts receivable, due from affiliate
    
    
    (7,543
    )
    
    
    (4,522
    )
    
    
    Inventories, net
    
    
    10,035
    
    
    
    (11,672
    )
    
    
    (14,076
    )Prepaid expenses
    
    
    838
    
    
    
    (3,317
    )
    
    
    (2,256
    )Accounts payable
    
    
    (7,059
    )
    
    
    (831
    )
    
    
    32,993Accounts payable, due to affiliate
    
    
    1,178
    
    
    
    (1,292
    )
    
    
    Accrued expenses and taxes
    
    
    10,195
    
    
    
    (1,532
    )
    
    
    4,871Other
    
    
    (1,608
    )
    
    
    (392
    )
    
    
    (2,838
    )Net cash provided by operating activities
    
    
    60,230
    
    
    
    29,967
    
    
    
    41,571Investing activities:Purchases of property, plant and equipment
    
    
    (59,367
    )
    
    
    (44,916
    )
    
    
    (22,841
    )Sale of property, plant and equipment
    
    
    104
    
    
    
    
    
    
    
    Purchases of short term investments, available for sale securities
    
    
    (100,596
    )
    
    
    
    
    
    
    Sales of short term investments, available for sale securities
    
    
    100,596
    
    
    
    
    
    
    
    Property insurance advance on Marmaduke tornado damage
    
    
    
    
    
    
    9,938
    
    
    
    Proceeds from repayment of note receivable from
affiliate (Ohio Castings LLC)
    
    
    329
    
    
    
    494
    
    
    
    261Investments in joint ventures
    
    
    (8,500
    )
    
    
    
    
    
    
    Acquisitions
    
    
    
    
    
    
    (17,220
    )
    
    
    Net cash used in investing activities
    
    
    (67,434
    )
    
    
    (51,704
    )
    
    
    (22,580
    )Financing activities:Proceeds from sale of common stock
    
    
    
    
    
    
    205,275
    
    
    
    Offering costs  initial public offering
    
    
    
    
    
    
    (14,605
    )
    
    
    Preferred stock redemption
    
    
    
    
    
    
    (82,056
    )
    
    
    Preferred stock dividends
    
    
    
    
    
    
    (11,904
    )
    
    
    Common stock dividends
    
    
    (2,551
    )
    
    
    (1,908
    )
    
    
    Increase in amount due from affiliate
    
    
    
    
    
    
    
    
    
    
    (5,110
    )Increase (decrease) in amount due to affiliate
    
    
    
    
    
    
    (20,476
    )
    
    
    (17,790
    )Majority shareholder capital contribution
    
    
    
    
    
    
    275
    
    
    
    Finance fees related to new credit facility
    
    
    (109
    )
    
    
    (360
    )
    
    
    Proceeds from debt issuance
    
    
    
    
    
    
    
    
    
    
    31,852Deferred offering costs
    
    
    
    
    
    
    
    
    
    
    (4,860
    )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
    
    
    (88
    )
    
    
    (40,274
    )
    
    
    (1,334
    )Net cash provided by financing activities
    
    
    270,164
    
    
    
    33,967
    
    
    
    2,758Increase in cash and cash equivalents
    
    
    262,960
    
    
    
    12,230
    
    
    
    21,749Cash and cash equivalents at beginning of year
    
    
    40,922
    
    
    
    28,692
    
    
    
    6,943Cash and cash equivalents at end of year
    
    $
    303,882
    
    
    $
    40,922
    
    
    $
    28,692
  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, 2005
    
    
    
    
    
    $
    (16,959
    )
    
    
    111,685
    
    
    $
    111,685
    
    
    
    11,147
    
    
    $
    111
    
    
    $
    41,249
    
    
    $
    (1,063
    )
    
    $
    135,023Net earnings
    
    $
    14,768
    
    
    
    14,768
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,768Currency translation adjustment
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    16Minimum pension liability
adjustment, net of tax effect
of $362
    
    
    (584
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (584
    )
    
    
    (584
    )Comprehensive income
    
    $
    14,200Dividends on preferred stock
    
    
    
    
    
    
    (13,251
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,251
    )Net adjustments relating to spin
off of ARL (Note 1)
    
    
    
    
    
    
    
    
    
    
    (29,630
    )
    
    
    (29,630
    )
    
    
    
    
    
    
    
    
    
    
    (2,023
    )
    
    
    
    
    
    
    (31,653
    )Capital contributions for expenses
relating to precapitalization
liabilities retained by ACF and
other related adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,441
    
    
    
    
    
    
    
    2,441Balance December 31, 2005
    
    
    
    
    
    $
    (15,442
    )
    
    
    82,055
    
    
    $
    82,055
    
    
    
    11,147
    
    
    $
    111
    
    
    $
    41,667
    
    
    $
    (1,631
    )
    
    $
    106,760Net 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
    )
    
    $
    290,988
  55




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Description of the Business
      Acquisition
    56




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##### Table of Contents



Note 2  Summary of Accounting Policies
  Cash and cash equivalents
  Revenue recognition
  Accounting for Shipping and
Handling Fees and Costs,
  Accounts receivable, net
  Inventories
  Property, plant and equipment
   Debt issuance costs
 57




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##### Table of Contents



2008
    
    $
    7172009
    
    
    6922010
    
    
    6162011
    
    
    6162012 and thereafter
    
    
    1,335Total
    
    $
    3,976
 Goodwill
 Goodwill and Other Intangible Assets
 Investment in joint venture
  Long-lived assets
  Income taxes
  Pension plans and other postretirement benefits
    58




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##### Table of Contents



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




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##### Table of Contents



Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans (an amendment of FASB Statements No. 87, 88, 106, and 132(R))
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statementsan amendment of ARB No. 51
 Share-Based Payment
 Note 3  Accounts Receivable, Net
  December 31,
    
    
    December 31,2007
    
    
    2006(in thousands)Accounts receivable, gross
    
    $
    34,020
    
    
    $
    35,885Less allowance for doubtful accounts
    
    
    (497
    )
    
    
    (1,017
    )Total accounts receivable, net
    
    $
    33,523
    
    
    $
    34,868
  60




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##### Table of Contents



Years Ended December 31,2007
    
    
    2006
    
    
    2005(in thousands)Beginning Balance
    
    $
    1,017
    
    
    $
    849
    
    
    $
    510Provision
    
    
    196
    
    
    
    383
    
    
    
    323Write-offs
    
    
    (716
    )
    
    
    (220
    )
    
    
    (23
    )Recoveries
    
    
    
    
    
    
    5
    
    
    
    39Ending Balance
    
    $
    497
    
    
    $
    1,017
    
    
    $
    849
 Note 4  Inventories, net
  December 31,
    
    
    December 31,2007
    
    
    2006(in thousands)Raw materials
    
    $
    52,322
    
    
    $
    67,258Work-in-process
    
    
    19,835
    
    
    
    23,623Finished products
    
    
    24,023
    
    
    
    15,358Total inventories
    
    
    96,180
    
    
    
    106,239Less reserves
    
    
    (2,705
    )
    
    
    (2,729
    )Total inventories, net
    
    $
    93,475
    
    
    $
    103,510
  Years Ended December 31,2007
    
    
    2006
    
    
    2005(in thousands)Beginning Balance
    
    $
    2,729
    
    
    $
    2,318
    
    
    $
    2,679Provision
    
    
    783
    
    
    
    597
    
    
    
    273Write-offs
    
    
    (807
    )
    
    
    (186
    )
    
    
    (634
    )Ending Balance
    
    $
    2,705
    
    
    $
    2,729
    
    
    $
    2,318
 Note 5  Property, Plant and Equipment
  61




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##### Table of Contents



December 31,
    
    December 31,2007
    
    2006Property, plant and equipmentBuildings
    
    $
    117,899
    
    
    $
    102,737Machinery and equipment
    
    
    113,415
    
    
    
    93,060231,314
    
    
    
    195,797Less accumulated depreciation
    
    
    (86,907
    )
    
    
    (75,204
    )Net property, plant and equipment
    
    
    144,407
    
    
    
    120,593Land
    
    
    3,306
    
    
    
    2,865Construction in process
    
    
    27,453
    
    
    
    6,835Total property, plant and equipment
    
    $
    175,166
    
    
    $
    130,293
 Depreciation Expense
  Capitalized Interest
  Note 6  Long-Lived Asset Impairment Charges
  Note 7  Goodwill
  Note 8  Investment in Joint Venture  Ohio Castings
     62




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##### Table of Contents



Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others
   December 31,2007
    
    
    2006(in thousands)Financial positionCurrent assets
    
    $
    11,638
    
    
    $
    13,650Property, plant, and equipment, net
    
    
    15,167
    
    
    
    15,297Total assets
    
    
    26,805
    
    
    
    28,947Current liabilities
    
    
    9,736
    
    
    
    15,855Long-term debt
    
    
    5,934
    
    
    
    7,659Total liabilities
    
    
    15,670
    
    
    
    23,514Members equity
    
    $
    11,135
    
    
    $
    5,433Total liabilities and members equity
    
    $
    26,805
    
    
    $
    28,947
  For the Years Ended December 31,2007
    
    
    2006
    
    
    2005(in thousands)Results of operationsSales
    
    $
    74,238
    
    
    $
    108,849
    
    
    $
    119,008Operating (loss) earnings
    
    
    2,394
    
    
    
    (2,502
    )
    
    
    1,562Net (loss) earnings
    
    $
    2,702
    
    
    $
    (2,046
    )
    
    $
    1,830
 Note 9  Investment in Joint Venture  Axis, LLC
  63




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##### Table of Contents



Note 10  Warranties
   For the Years Ended December 31,2007
    
    
    2006
    
    
    2005(in thousands)Liability, beginning of year
    
    $
    1,753
    
    
    $
    1,237
    
    
    $
    1,630Provision
    
    
    1,992
    
    
    
    2,063
    
    
    
    191Claims
    
    
    (1,242
    )
    
    
    (1,547
    )
    
    
    (584
    )Liability, end of year
    
    $
    2,503
    
    
    $
    1,753
    
    
    $
    1,237
 Note 11  Long-Term Debt
  December 31, 2007
    
    
    December 31, 2006(in thousands)Revolving line of credit
    
    $
    
    
    
    $
    Senior unsecured notes
    
    
    275,000
    
    
    
    Other
    
    
    8
    
    
    
    96Total long-term debt, including current portion
    
    $
    275,008
    
    
    $
    96Less current portion of debt
    
    
    8
    
    
    
    88Total long-term debt, net of current portion
    
    $
    275,000
    
    
    $
    8
  64




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##### Table of Contents



2008
    
    $
    82009
    
    
    2010
    
    
    2011
    
    
    2012 and thereafter
    
    
    275,000$
    275,008
 Revolving Line of Credit
     Mortgage Note
  Senior Unsecured Fixed Rate Notes
  65




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##### Table of Contents



Note 12  Income Taxes
  For the Years Ended December 31,2007
    
    
    2006
    
    
    2005(in thousands)Current:Federal
    
    $
    19,356
    
    
    $
    17,249
    
    
    $
    3,119State and local
    
    
    3,512
    
    
    
    2,610
    
    
    
    495Foreign
    
    
    36
    
    
    
    101
    
    
    
    136Total current
    
    
    22,904
    
    
    
    19,960
    
    
    
    3,750DeferredFederal
    
    
    (716
    )
    
    
    685
    
    
    
    4,841State and local
    
    
    (79
    )
    
    
    123
    
    
    
    769Foreign
    
    
    (5
    )
    
    
    (16
    )
    
    
    (4
    )Total deferred
    
    
    (800
    )
    
    
    792
    
    
    
    5,606Total income tax expense
    
    $
    22,104
    
    
    $
    20,752
    
    
    $
    9,356
  66




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##### Table of Contents



For the Years Ended December 31,2007
    
    
    2006
    
    
    2005(in thousands)Computed income tax expense
    
    $
    20,779
    
    
    $
    19,585
    
    
    $
    8,443State and local taxes, net
of federal tax expense
    
    
    2,232
    
    
    
    1,777
    
    
    
    822Non-deductible expenses
    
    
    (1,120
    )
    
    
    (654
    )
    
    
    79Other, net
    
    
    213
    
    
    
    44
    
    
    
    12Total income tax expense
    
    $
    22,104
    
    
    $
    20,752
    
    
    $
    9,356
 For the Years Ended December 31,2007
    
    2006
    
    2005Computed income tax expense
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State and local taxes, net
of federal tax expense
    
    
    3.8
    %
    
    
    3.2
    %
    
    
    3.4
    %Non-deductible expenses
    
    
    (1.9
    %)
    
    
    (1.2
    %)
    
    
    0.3
    %Other, net
    
    
    0.3
    %
    
    
    0.1
    %
    
    
    0.1
    %Effective income tax rate
    
    
    37.2
    %
    
    
    37.1
    %
    
    
    38.8
    %
  December 31,2007
    
    
    2006(in thousands)Current deferred tax assetsProvisions not currently deductible
    
    $
    1,610
    
    
    $
    2,204Non-current deferred tax assetsProvisions not currently deductible
    
    
    3,481
    
    
    
    703Pensions and post retirement
    
    
    3,285
    
    
    
    4,291Total non-current deferred tax asset
    
    $
    6,766
    
    
    $
    4,994Total deferred tax asset
    
    $
    8,376
    
    
    $
    7,198Current deferred tax liabilityStock options
    
    
    
    
    
    
    (115
    )Non-current deferred tax liabilitiesProperty, plant and equipment
    
    
    (12,456
    )
    
    
    (12,036
    )Total deferred tax liability
    
    $
    (12,456
    )
    
    $
    (12,151
    )
  67




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##### Table of Contents



As of December 31,2007
    
    
    2006(in thousands)Current deferred tax assets
    
    $
    1,610
    
    
    $
    2,204Current deferred tax liability
    
    
    
    
    
    
    (115
    )Current deferred tax assets (liability), net
    
    $
    1,610
    
    
    $
    2,089Non-current deferred tax assets
    
    $
    6,766
    
    
    $
    4,994Non-current deferred tax liability
    
    
    (12,456
    )
    
    
    (12,036
    )Non-current deferred tax assets (liability), net
    
    $
    (5,690
    )
    
    $
    (7,042
    )Current deferred tax asset, net
    
    $
    1,610
    
    
    $
    2,089Non-current deferred tax liability, net
    
    
    (5,690
    )
    
    
    (7,042
    )Net deferred tax liability
    
    $
    (4,080
    )
    
    $
    (4,953
    )
   FIN 48 Adoption
   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
    )
  68




---



##### Table of Contents



Note 13  Employee Benefit Plans
      69




---



##### Table of Contents



Pension Benefits
    
    
    Postretirement Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006(in thousands)Change in benefit obligationBenefit obligation  Beginning of year
    
    $
    17,257
    
    
    $
    16,981
    
    
    $
    5,321
    
    
    $
    3,909Service cost
    
    
    242
    
    
    
    179
    
    
    
    130
    
    
    
    11Interest cost
    
    
    962
    
    
    
    797
    
    
    
    298
    
    
    
    208Plan amendment
    
    
    159
    
    
    
    
    
    
    
    
    
    
    
    139Actuarial (gain) loss
    
    
    (703
    )
    
    
    312
    
    
    
    (1,959
    )
    
    
    1,137Assumed administrative expenses
    
    
    (150
    )
    
    
    (111
    )
    
    
    
    
    
    
    Employee contributions
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    44Benefits paid
    
    
    (964
    )
    
    
    (901
    )
    
    
    (91
    )
    
    
    (127
    )Benefit obligation  End of year
    
    $
    16,803
    
    
    $
    17,257
    
    
    $
    3,758
    
    
    $
    5,321
 Pension Benefits
    
    
    Postretirement Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006(in thousands)Change in plan assetsPlan assets  Beginning of year
    
    $
    11,270
    
    
    $
    10,380
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    1,632
    
    
    
    874
    
    
    
    
    
    
    
    Administrative expenses
    
    
    (192
    )
    
    
    (153
    )
    
    
    
    
    
    
    Employee contributions
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    44Employer contributions
    
    
    1,809
    
    
    
    1,069
    
    
    
    32
    
    
    
    83Benefits paid
    
    
    (964
    )
    
    
    (900
    )
    
    
    (91
    )
    
    
    (127
    )Plan assets at fair value  End of year
    
    $
    13,555
    
    
    $
    11,270
    
    
    $
    
    
    
    $
    
 Pension Benefits
    
    
    Postretirement Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006(in thousands)Funded statusBenefit obligation in excess of plan assets
    
    $
    (3,248
    )
    
    $
    (5,986
    )
    
    $
    (3,758
    )
    
    $
    (5,321
    )Contributions in the fourth quarter
    
    
    407
    
    
    
    444
    
    
    
    27
    
    
    
    4Net amount recognized at December 31
    
    $
    (2,841
    )
    
    $
    (5,542
    )
    
    $
    (3,731
    )
    
    $
    (5,317
    )
  70




---



##### Table of Contents



Pension Benefits
    
    Postretirement Benefits2007
    
    2006
    
    2007
    
    2006(in thousands)Accrued benefit liability  short term
    
    $
    (1
    )
    
    $
    (1
    )
    
    $
    (136
    )
    
    $
    (258
    )Accrued benefit liability  long term
    
    
    (2,840
    )
    
    
    (5,541
    )
    
    
    (3,595
    )
    
    
    (5,059
    )Net liability recognized at December 31
    
    $
    (2,841
    )
    
    $
    (5,542
    )
    
    $
    (3,731
    )
    
    $
    (5,317
    )Net actuarial (gain) loss
    
    $
    1,220
    
    
    $
    2,759
    
    
    $
    (884
    )
    
    $
    1,125Net prior service cost (credit)
    
    
    155
    
    
    
    (5
    )
    
    
    121
    
    
    
    140Accumulated other comprehensive loss
(income) pre-tax at December 31,
    
    $
    1,375
    
    
    $
    2,754
    
    
    $
    (763
    )
    
    $
    1,265
   PostretirementPension Benefits
    
    BenefitsAccrued benefit liability  short term
    
    $
    (1
    )
    
    $
    (258
    )Accrued benefit liability  long term
    
    
    1
    
    
    
    (1,007
    )Accumulated other comprehensive loss (net of tax effect of $467)
    
    
    
    
    
    
    792
  Pension Benefits
    
    
    Postretirement Benefits2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005(in thousands)Components of net periodic benefit costService cost
    
    $
    242
    
    
    $
    179
    
    
    $
    21
    
    
    $
    130
    
    
    $
    11
    
    
    $
    1Interest cost
    
    
    963
    
    
    
    796
    
    
    
    202
    
    
    
    299
    
    
    
    208
    
    
    
    18Expected return on plan assets
    
    
    (960
    )
    
    
    (727
    )
    
    
    (193
    )
    
    
    
    
    
    
    
    
    
    
    Recognized actuarial loss
    
    
    206
    
    
    
    191
    
    
    
    
    
    
    
    50
    
    
    
    
    
    
    
    Amortization of prior service (gain) cost
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )
    
    
    18
    
    
    
    
    
    
    
    Amortization of unrecognized net loss
    
    
    
    
    
    
    
    
    
    
    82
    
    
    
    
    
    
    
    
    
    
    
    $
    450
    
    
    $
    438
    
    
    $
    111
    
    
    $
    497
    
    
    $
    219
    
    
    $
    19
  71




---



##### Table of Contents



Additional information
  PostretirementPension Benefits
    
    Benefits(in thousands)2008
    
    $
    996
    
    
    $
    1362009
    
    
    985
    
    
    
    1442010
    
    
    1,092
    
    
    
    1582011
    
    
    1,093
    
    
    
    1662012
    
    
    1,091
    
    
    
    1742013-2017
    
    
    5,610
    
    
    
    1,057
   Pension Benefits
    
    Postretirement Benefits2007
    
    2006
    
    2007
    
    2006Discount rate
    
    
    6.25
    %
    
    
    5.75
    %
    
    
    6.30
    %
    
    
    5.75
    %
  Pension Benefits
    
    Postretirement Benefits2007
    
    2006
    
    2005
    
    2007
    
    2006
    
    2005Discount rate
    
    
    5.75
    %
    
    
    5.50
    %
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    5.50
    %
    
    
    5.50
    %Expected return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
  2007
    
    2006
    
    2005Health care cost trend rate assigned for next year
    
    
    10.0
    %
    
    
    11.0
    %
    
    
    12.0
    %Rate to which cost trend is assumed to decline
    
    
    5.0
    %
    
    
    5.0
    %
    
    
    5.0
    %Year the rate reaches the ultimate trend rate
    
    
    2013
    
    
    
    2013
    
    
    
    2013
  One Percentage Point(in thousands)Increase
    
    DecreaseEffect on total of service and interest cost
    
    $
    31
    
    
    $
    (29
    )Effect on postretirement benefit obligation
    
    $
    489
    
    
    $
    (393
    )
  72




---



##### Table of Contents



Plan Assets at December 31,
    
    Target Allocation2007
    
    2006
    
    2008Asset CategoryEquity securities
    
    
    57
    %
    
    
    57
    %
    
    
    60
    %Debt securities
    
    
    43
    %
    
    
    43
    %
    
    
    40
    %100
    %
    
    
    100
    %
    
    
    100
    %
    Note 14  Commitments and Contingencies
  (in thousands)2008
    
    $
    9642009
    
    
    7342010
    
    
    5242011
    
    
    3652012
    
    
    336Thereafter
    
    
    4,682
    73




---



##### Table of Contents



74




---



##### Table of Contents



Note 15  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 16  Earnings per Share
  For the Years Ended December 31,2007
    
    2006
    
    2005Weighted average basic common shares outstanding
    
    
    21,274,082
    
    
    
    20,666,599
    
    
    
    11,147,059Dilutive effect of employee stock options (1)
    
    
    82,609
    
    
    
    66,000
    
    
    
    Weighted average diluted common shares outstanding
    
    
    21,356,691
    
    
    
    20,732,599
    
    
    
    11,147,059
 
 (1)
    
    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, 2007 and 2006. These options would have resulted in an antidilutive effect to the
earnings per share calculation. Note 17  Stock Based Compensation
   75




---



##### Table of Contents



For the Years EndedDecember 31,2007
    
    2006($ in thousands)Stock based compensation expense:Cost of goods sold: manufacturing operations
    
    $
    139
    
    
    $
    190Cost of goods sold: railcar services
    
    
    9
    
    
    
    Selling, administrative and other
    
    
    1,779
    
    
    
    7,926Total stock based compensation expense
    
    $
    1,927
    
    
    $
    8,116
  Stock Options
      76




---



##### Table of Contents



WeightedWeighted
    
    AverageWeighted
    
    Average
    
    Grant-dateShares
    
    Average
    
    Remaining
    
    Fair Value
    
    AggregateCovered by
    
    Exercise
    
    Contractual
    
    of Options
    
    Intrinsic ValueOptions
    
    Price
    
    Life
    
    Granted
    
    ($000)Outstanding at the
beginning of the
period, January 1,
2006
    
    
    
    
    
    $
    Granted in 2006
    
    
    559,876
    
    
    $
    22.97
    
    
    
    
    
    
    $
    8.05Outstanding at the
end of the period,
December 31, 2006
    
    
    559,876
    
    
    $
    22.97
    
    
    
    
    
    
    $
    8.05Exercised in 2007
    
    
    (94,523
    )
    
    $
    21.00Outstanding at the
end of the period,
December 31, 2007
    
    
    465,353
    
    
    $
    23.37
    
    
    36 months
    
    $
    8.21
    
    
    $
    
    (1)Exercisable at the
end of the period,
December 31, 2007
    
    
    67,100
    
    
    $
    21.00
    
    
    36 months
    
    $
    7.28
    
    
    $
    
    (1)
 
 (1)
    
    Options to purchase 465,353 shares, of which 67,100 are exercisable, of the Companys common
stock have exercise prices that are above market price, based on the closing market price of $19.25
for a share of the Companys common stock on the last business day of the year ended December 31,
2007.      Restricted Stock Award
    77




---



##### 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
    )
    
    
    21.00
  Stock Appreciation Rights
    78




---



##### Table of Contents



WeightedStock
    
    Weighted
    
    Average
    
    WeightedAppreciation
    
    Average
    
    Remaining
    
    Average Fair
    
    AggregateRights
    
    Exercise
    
    Contractual
    
    Value of SARs
    
    Intrinsic Value(SARs)
    
    Price
    
    Life
    
    Granted
    
    ($000)Outstanding at the
beginning of the
period, January 1,
2007
    
    
    Granted
    
    
    273,800
    
    
    $
    29.49
    
    
    
    
    
    
    $
    3.02Outstanding at the
end of the period,
December 31, 2007
    
    
    273,800
    
    
    $
    29.49
    
    
    75 months
    
    $
    3.02
    
    
    $
    
    (1)Exercisable at the
end of the period,
December 31, 2007
    
    
    
 
 (1)
    
    Stock appreciation rights with an exercise price of $29.49 have no intrinsic value based on
the closing market price of $19.25 for a share of the Companys common stock on the last business
day of the year ended December 31, 2007.   Note 18  Common Stock and New Preferred Stock
    Note 19  Related Party Transactions
  79




---



##### Table of Contents



Projected benefit obligation
    
    $12.4 millionAssets at fair value
    
    $8.4 millionUnderfunded status
    
    $4.0 million
     Manufacturing
Services Agreement
  Administration Agreement
  Supply Agreement
 80




---



##### Table of Contents



Additional Agreements with ACF
       Railcar Management Agreements
  ACF Administration Agreement
 81




---



##### Table of Contents



ARL Railcar Services Agreement
  ARL Railcar Servicing Agreement
   ARL Services Agreement and ARI/ARL Separation Agreement
    Trademark License Agreement
 82




---



##### Table of Contents



ARL Sales Contracts
   Agreements with Other Affiliated Parties
        83




---



##### Table of Contents



Financial Information for Transactions with Affiliates
     Note 20  Operating Segment and Sales/Credit Concentrations
  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 goods sold  external
customers
    
    
    (568,023
    )
    
    
    (41,040
    )
    
    
    
    
    
    
    
    
    
    
    (609,063
    )Cost of intersegment sales
    
    
    (819
    )
    
    
    (471
    )
    
    
    
    
    
    
    1,290
    
    
    
    Gross profit (loss)
    
    
    80,263
    
    
    
    9,001
    
    
    
    
    
    
    
    (200
    )
    
    
    89,064Income related to insurance
recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain on asset conversion, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Selling, 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
 84




---



##### 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 goods sold  external
customers
    
    
    (537,344
    )
    
    
    (38,020
    )
    
    
    
    
    
    
    
    
    
    
    (575,364
    )Cost of intersegment sales
    
    
    (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
 As of and for the year ended
    
    Manufacturing
    
    
    Railcar
    
    
    CorporateDecember 31, 2005
    
    Operations
    
    
    Services
    
    
    & all other
    
    
    Eliminations
    
    
    Totals(in thousands)Revenues from external
customers
    
    $
    564,513
    
    
    $
    43,647
    
    
    $
    
    
    
    $
    
    
    
    $
    608,160Intersegment revenues
    
    
    1,762
    
    
    
    2,474
    
    
    
    
    
    
    
    (4,236
    )
    
    
    Cost of goods sold  external
customers
    
    
    (518,063
    )
    
    
    (38,041
    )
    
    
    
    
    
    
    
    
    
    
    (556,104
    )Cost of intersegment sales
    
    
    (1,522
    )
    
    
    (1,917
    )
    
    
    
    
    
    
    3,439
    
    
    
    Gross profit (loss)
    
    
    46,690
    
    
    
    6,163
    
    
    
    
    
    
    
    (797
    )
    
    
    52,056Selling, administration and
other
    
    
    (5,502
    )
    
    
    (1,981
    )
    
    
    (17,871
    )
    
    
    
    
    
    
    (25,354
    )Earnings (loss) from operations
    
    $
    41,188
    
    
    $
    4,182
    
    
    $
    (17,871
    )
    
    $
    (797
    )
    
    $
    26,702Total assets
    
    $
    185,652
    
    
    $
    34,171
    
    
    $
    48,757
    
    
    $
    
    
    
    $
    268,580Capital expenditures
    
    
    21,693
    
    
    
    686
    
    
    
    462
    
    
    
    
    
    
    
    22,841Depreciation and amortization
    
    
    4,773
    
    
    
    2,011
    
    
    
    23
    
    
    
    
    
    
    
    6,807
 Manufacturing Operations
     85




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##### Table of Contents



Railcar services
  Note 21  Marmaduke Storm Damage Insurance Claim (Income related to insurance recoveries)
       86




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##### Table of Contents



YearEndedDecember 31,2006Business 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
  YearEndedDecember 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
 Note 22  Supplemental Cash Flow Information
        87




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##### Table of Contents



Note 23  Stock Split
  Note 24  Selected Quarterly Financial Data (unaudited)
 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
    
    
    $
    0.37
    
    
    $
    1.75Net earnings per common share, diluted
    
    $
    0.63
    
    
    $
    0.52
    
    
    $
    0.23
    
    
    $
    0.37
    
    
    $
    1.74
 88




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##### Table of Contents



First
    
    Second
    
    Third
    
    Fourth
    
    Year toquarter
    
    quarter
    
    quarter
    
    quarter
    
    Date(in thousands, except per share data)2006Sales
    
    $
    178,729
    
    
    $
    151,550
    
    
    $
    150,454
    
    
    $
    165,319
    
    
    $
    646,052Gross profit
    
    
    20,260
    
    
    
    17,985
    
    
    
    15,725
    
    
    
    16,718
    
    
    
    70,688Net earnings available to common
shareholders
    
    
    6,693
    
    
    
    10,821
    
    
    
    10,994
    
    
    
    6,128
    
    
    
    34,636Net earnings per common share basic
    
    $
    0.35
    
    
    $
    0.51
    
    
    $
    0.52
    
    
    $
    0.29
    
    
    $
    1.68Net earnings per common share, diluted
    
    $
    0.35
    
    
    $
    0.51
    
    
    $
    0.52
    
    
    $
    0.29
    
    
    $
    1.67
 Note 25  Subsequent Events
     89




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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
 Axle Manufacturing Joint Venture
   90




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##### Table of Contents



ARI / ARL Rent and Building Services Extension Agreement
   Base Salary Increases for Named Executive Officers
  2008 Base SalaryName and Principal Office
    
    (effective January 1, 2008)James J. Unger
    
    $
    364,000President and Chief Executive OfficerJames A. Cowan
    
    $
    312,000Executive Vice President and Chief Operating OfficerWilliam P. Benac
    
    $
    260,000Senior Vice President, Chief Financial Officer and TreasurerAlan C. Lullman
    
    $
    260,000Senior Vice President Sales, Marketing and Services
 91




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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
  
 Item 14: Principal Accountant Fees and Services
  92




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##### Table of Contents



Item 15: Exhibits and Financial Statement Schedules
     93




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##### Table of Contents



Signatures
  American Railcar Industries, Inc.Date: February 22, 2008
    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
    
    February 22, 2008/s/ William P. Benac

Name: William P. Benac
    
    Senior Vice President,
Treasurer and Chief
Financial Officer
(principal financial
officer)
    
    February 22, 2008/s/ Michael E. Vaughn

Name: Michael E. Vaughn
    
    Vice President and
Controller (principal
accounting officer)
    
    February 22, 2008/s/ Vincent J. Intrieri

Name: Vincent J. Intrieri
    
    Director
    
    February 22, 2008/s/ James Pontious

Name: James Pontious
    
    Director
    
    February 22, 2008/s/ James Laisure

Name: James Laisure
    
    Director
    
    February 22, 2008/s/ Brett Icahn

Name: Brett Icahn
    
    Director
    
    February 22, 2008/s/ Harold First

Name: Harold First
    
    Director
    
    February 22, 2008/s/ Hunter Gary

Name: Hunter Gary
    
    Director
    
    February 22, 2008
 94




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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. (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 Bylaws of American Railcar Industries, Inc.
(incorporated by reference to Exhibit 3.1 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. (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).
 95




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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).10.26
    
    Employment Agreement between American Railcar Industries, Inc. and James J. Unger, dated as of
November 18, 2005 (incorporated by reference to Exhibit 10.26 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).10.29
    
    Employment Agreement between American Railcar Industries, Inc.
and William P. Benac, dated as of July 20, 2005 (incorporated
by reference to Exhibit 10.20 to ARIs Registration Statement
on Form S-1, filed with the SEC on December 13, 2005).10.30
    
    Amended and Restated Employment Agreement dated as of January 4, 2006 between American
Railcar Industries, Inc. and James A. Cowan (incorporated by reference to Exhibit
10.30 to ARIs Registration Statement on Form S-1, Amendment No. 1, filed with the SEC
on January 4, 2006).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
 96




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##### Table of Contents



Exhibit No.
    
    Description of ExhibitRegistration Statement on Form S-1, Amendment No. 1, filed with the SEC on
January 4, 2006).10.32
    
    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 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).
 97




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##### Table of Contents



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.*10.52
    
    ARI / ARL Rent and Building Services Extension Agreement,
dated as of February 22, 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-14(a) and 15d-14(a) Certification of the Chief Executive Officer.*31.2
    
    Rule 13a-14(a) and 15d-14(a) Certification of the Chief Financial Officer.*32.1
    
    Certification pursuant to 18U.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. 98