##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Form 10-Q/A
 Amendment
No. 1
 (Mark one)
 þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 22, 2008
 OR
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File Number 001-32627
 HORIZON LINES, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    74-3123672(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)4064 Colony Road, Suite 200, Charlotte, North Carolina
    
    28211(Address of principal executive offices)
    
    (Zip Code)
 (704) 973-7000
(Registrants telephone number, including area code)

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  At
July 23, 2008, 29,972,376 shares of the Registrants common stock, par value $.01 per
share, were outstanding.




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##### 



HORIZON LINES, INC.
Form 10-Q/A Index
 Page No.Explanatory
Note
    
    
    3Part I. Financial Information2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    3Part II. Other Information6. Exhibits
    
    
    19Signature
    
    
    20Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



EXPLANATORY NOTE Horizon Lines, Inc. is filing this amendment (the Form 10-Q/A) to our Quarterly Report on Form 10-Q for the quarter
ended June 22, 2008 (the Form 10-Q), filed with the U.S. Securities and Exchange Commission (SEC) on July 25, 2008,
solely to correct typographical errors in the Outlook on page 28 of that Form 10-Q in Part 1  Item 2  Managements
Discussion and Analysis of Financial Condition and Results of Operations. The Form 10-Q erroneously stated that we expect 2008 earnings per share of $1.16  $1.43, excluding any costs related
to the Department of Justice antitrust investigation and related legal proceedings and a $0.8 million severance charge
for several union employees who elected early retirement. The expected 2008 earnings per share range should be from
$1.03  $1.43. The Form 10-Q also erroneously stated that including estimated legal expenses and severance costs, we expect earnings
per share of $0.97  $1.24. The expected earnings per share range, including those expenses and costs, should be from
$0.84  $1.24. This Form 10-Q/A should be read in conjunction with the original Form 10-Q, continues to speak as of the date of the
Form 10-Q, and does not modify or update disclosures in the original Form 10-Q except as noted above. Accordingly,
this Form 10-Q/A does not reflect events occurring after the filing of the Form 10-Q or modify or update any related
disclosures. In particular, any forward-looking statements included in this Form 10-Q/A represent managements view as
of the filing date of the Form 10-Q. 
 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Executive Overview
  Quarters Ended
    
    
    Six Months EndedJune 22,
    
    
    June 24,
    
    
    June 22,
    
    
    June 24,2008
    
    
    2007
    
    
    2008
    
    
    2007($ in thousands)Operating revenue
    
    $
    330,958
    
    
    $
    295,701
    
    
    $
    636,905
    
    
    $
    569,365Operating expense
    
    
    314,274
    
    
    
    272,796
    
    
    
    608,620
    
    
    
    529,981Operating income
    
    $
    16,684
    
    
    $
    22,905
    
    
    $
    28,285
    
    
    $
    39,384Operating ratio
    
    
    95.0
    %
    
    
    92.3
    %
    
    
    95.6
    %
    
    
    93.1
    %Revenue containers (units)
    
    
    71,169
    
    
    
    72,894
    
    
    
    137,399
    
    
    
    139,815
  Quarters Ended
    
    
    Six Months EndedJune 22,
    
    
    June 24,
    
    
    June 22,
    
    
    June 24,2008
    
    
    2007
    
    
    2008
    
    
    2007(in thousands)Net income
    
    $
    7,235
    
    
    $
    9,560
    
    
    $
    9,326
    
    
    $
    16,612Interest expense, net
    
    
    8,147
    
    
    
    11,663
    
    
    
    17,156
    
    
    
    22,876Income tax expense (benefit)
    
    
    1,298
    
    
    
    1,093
    
    
    
    1,802
    
    
    
    (691
    )Depreciation and amortization
    
    
    15,950
    
    
    
    17,142
    
    
    
    31,650
    
    
    
    34,369EBITDA
    
    $
    32,630
    
    
    $
    39,458
    
    
    $
    59,934
    
    
    $
    73,166
  3




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Recent Developments
  General
   History
  Critical Accounting Policies
   Seasonality
  Results of Operations
 Operating Revenue Overview
   4




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Cost of Services Overview
  Quarter Ended June 22, 2008 Compared with the Quarter Ended June 24, 2007
 Horizon Lines Segment
  Quarters EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    Change
    
    
    % Change($ in thousands)Operating revenue
    
    $
    322,170
    
    
    $
    294,229
    
    
    $
    27,941
    
    
    
    9.5
    %Operating expense:Vessel
    
    
    109,943
    
    
    
    93,158
    
    
    
    16,785
    
    
    
    18.0
    %Marine
    
    
    50,969
    
    
    
    48,226
    
    
    
    2,743
    
    
    
    5.7
    %Inland
    
    
    53,086
    
    
    
    49,569
    
    
    
    3,517
    
    
    
    7.1
    %Land
    
    
    37,119
    
    
    
    31,569
    
    
    
    5,550
    
    
    
    17.6
    %Rolling stock rent
    
    
    10,830
    
    
    
    10,988
    
    
    
    (158
    )
    
    
    (1.4
    )%Cost of services
    
    
    261,947
    
    
    
    233,510
    
    
    
    28,437
    
    
    
    12.2
    %Depreciation and amortization
    
    
    10,817
    
    
    
    10,150
    
    
    
    667
    
    
    
    6.6
    %Amortization of vessel dry-docking
    
    
    4,400
    
    
    
    4,559
    
    
    
    (159
    )
    
    
    (3.5
    )%Selling, general and administrative
    
    
    26,262
    
    
    
    20,569
    
    
    
    5,693
    
    
    
    27.7
    %Miscellaneous expense (income), net
    
    
    716
    
    
    
    (350
    )
    
    
    1,066
    
    
    
    304.6
    %Total operating expense
    
    
    304,142
    
    
    
    268,438
    
    
    
    35,704
    
    
    
    13.3
    %Operating income
    
    $
    18,028
    
    
    $
    25,791
    
    
    $
    (7,763
    )
    
    
    (30.1
    )%Operating ratio
    
    
    94.4
    %
    
    
    91.2
    %
    
    
    
    
    
    
    3.2
    %Revenue containers (units)
    
    
    71,169
    
    
    
    72,894
    
    
    
    (1,725
    )
    
    
    (2.4
    )%
  5




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Operating Revenue.
 Bunker and intermodal fuel surcharges included in rates
    
    $
    18,352General rate increases
    
    
    6,754Increase in non-transportation services
    
    
    4,614Revenue related to acquisition of HSI
    
    
    4,449Revenue container volume decrease
    
    
    (6,228
    )Total operating revenue increase
    
    $
    27,941
  Cost of Services.
  Vessel fuel costs increase
    
    $
    16,303Vessel lease expense increase
    
    
    2,061Labor and other vessel operating decrease
    
    
    (1,579
    )Total vessel expense increase
    
    $
    16,785
     6




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Quarters EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    % Change(in thousands)Land expense:Maintenance
    
    $
    13,549
    
    
    $
    12,340
    
    
    
    9.8
    %Terminal overhead
    
    
    14,793
    
    
    
    12,095
    
    
    
    22.3
    %Yard and gate
    
    
    6,585
    
    
    
    5,462
    
    
    
    20.6
    %Warehouse
    
    
    2,192
    
    
    
    1,672
    
    
    
    31.1
    %Total land expense
    
    $
    37,119
    
    
    $
    31,569
    
    
    
    17.6
    %
  Depreciation and Amortization.
 Quarters EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    % Change(in thousands)Depreciation and amortization:Depreciationowned vessels
    
    $
    2,554
    
    
    $
    2,723
    
    
    
    (6.2
    )%Depreciation and amortizationother
    
    
    3,184
    
    
    
    2,537
    
    
    
    25.5
    %Amortization of intangible assets
    
    
    5,079
    
    
    
    4,890
    
    
    
    3.9
    %Total depreciation and amortization
    
    $
    10,817
    
    
    $
    10,150
    
    
    
    6.6
    %Amortization of vessel dry-docking
    
    $
    4,400
    
    
    $
    4,559
    
    
    
    (3.5
    )%
 Amortization of Vessel Dry-docking.
 Selling, General and Administrative.
 Miscellaneous Expense (Income), Net
  7




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Horizon Logistics Segment
  Quarters EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    Change
    
    
    % Change(in thousands)Operating revenue
    
    $
    8,788
    
    
    $
    1,472
    
    
    $
    7,316
    
    
    
    497.0
    %Operating expense:Inland
    
    
    5,992
    
    
    
    459
    
    
    
    5,533
    
    
    
    1,205.4
    %Land
    
    
    657
    
    
    
    476
    
    
    
    181
    
    
    
    38.0
    %Rolling stock rent
    
    
    103
    
    
    
    
    
    
    
    103
    
    
    
    100.0
    %Cost of services
    
    
    6,752
    
    
    
    935
    
    
    
    5,817
    
    
    
    622.1
    %Depreciation and amortization
    
    
    733
    
    
    
    2,433
    
    
    
    (1,700
    )
    
    
    (70.0
    )%Selling, general and administrative
    
    
    2,611
    
    
    
    941
    
    
    
    1,670
    
    
    
    177.5
    %Miscellaneous expense, net
    
    
    36
    
    
    
    49
    
    
    
    (13
    )
    
    
    (26.5
    )%Total operating expense
    
    
    10,132
    
    
    
    4,358
    
    
    
    5,774
    
    
    
    132.5
    %Operating loss
    
    $
    (1,344
    )
    
    $
    (2,886
    )
    
    $
    1,542
    
    
    
    53.4
    %
 Operating Revenue.
 Cost of Services.
 Depreciation and Amortization.
 Quarters EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    % Change(in thousands)Depreciation and amortization:Depreciation and amortizationother
    
    $
    489
    
    
    $
    2,433
    
    
    
    (80.0
    )%Amortization of intangible assets
    
    
    244
    
    
    
    
    
    
    
    100.0
    %Total depreciation and amortization
    
    $
    733
    
    
    $
    2,433
    
    
    
    (70.0
    )%
 Selling, General and Administrative.
 Unallocated Expenses
 Interest Expense, Net.
 Income Tax Expense.
  8




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Six Months Ended June 22, 2008 Compared with the Six Months Ended June 24, 2007
 Horizon Lines Segment
 Six Months EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    Change
    
    
    % Change($ in thousands)Operating revenue
    
    $
    620,015
    
    
    $
    566,322
    
    
    $
    53,693
    
    
    
    9.5
    %Operating expense:Vessel
    
    
    213,370
    
    
    
    175,880
    
    
    
    37,490
    
    
    
    21.3
    %Marine
    
    
    100,196
    
    
    
    93,992
    
    
    
    6,204
    
    
    
    6.6
    %Inland
    
    
    100,098
    
    
    
    95,214
    
    
    
    4,884
    
    
    
    5.1
    %Land
    
    
    72,321
    
    
    
    63,101
    
    
    
    9,220
    
    
    
    14.6
    %Rolling stock rent
    
    
    22,837
    
    
    
    22,010
    
    
    
    827
    
    
    
    3.8
    %Cost of services
    
    
    508,822
    
    
    
    450,197
    
    
    
    58,625
    
    
    
    13.0
    %Depreciation and amortization
    
    
    21,426
    
    
    
    21,223
    
    
    
    203
    
    
    
    1.0
    %Amortization of vessel dry-docking
    
    
    8,775
    
    
    
    8,319
    
    
    
    456
    
    
    
    5.5
    %Selling, general and administrative
    
    
    48,884
    
    
    
    41,680
    
    
    
    7,204
    
    
    
    17.3
    %Miscellaneous expense, net
    
    
    1,230
    
    
    
    2
    
    
    
    1,228
    
    
    
    61,400
    %Total operating expense
    
    
    589,137
    
    
    
    521,421
    
    
    
    67,716
    
    
    
    13.0
    %Operating income
    
    $
    30,878
    
    
    $
    44,901
    
    
    $
    (14,023
    )
    
    
    (31.2
    )%Operating ratio
    
    
    95.0
    %
    
    
    92.1
    %
    
    
    
    
    
    
    3.1
    %Revenue containers (units)
    
    
    137,399
    
    
    
    139,815
    
    
    
    (2,416
    )
    
    
    (1.7
    )%
 Operating Revenue.
 Bunker and intermodal fuel surcharges included in rates
    
    $
    32,912General rate increases
    
    
    13,771Revenue related to acquisition of HSI
    
    
    8,646Increase in non-transportation services
    
    
    7,059Revenue container volume decrease
    
    
    (8,695
    )Total operating revenue increase
    
    $
    53,693
  Cost of Services.
  9




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##### Table of Contents



Vessel fuel costs increase
    
    $
    31,593Vessel lease expense increase
    
    
    8,203Labor and other vessel operating decrease
    
    
    (2,306
    )Total vessel expense increase
    
    $
    37,490
     Six Months EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    % Change(in thousands)Land expense:Maintenance
    
    $
    26,112
    
    
    $
    24,382
    
    
    
    7.1
    %Terminal overhead
    
    
    28,677
    
    
    
    24,184
    
    
    
    18.6
    %Yard and gate
    
    
    13,477
    
    
    
    11,203
    
    
    
    20.3
    %Warehouse
    
    
    4,055
    
    
    
    3,332
    
    
    
    21.7
    %Total land expense
    
    $
    72,321
    
    
    $
    63,101
    
    
    
    14.6
    %
   10




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##### Table of Contents



Depreciation and Amortization.
 Six Months EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    % Change(in thousands)Depreciation and amortization:Depreciationowned vessels
    
    $
    5,051
    
    
    $
    5,452
    
    
    
    (7.4
    )%Depreciation and amortizationother
    
    
    6,220
    
    
    
    5,990
    
    
    
    3.8
    %Amortization of intangible assets
    
    
    10,155
    
    
    
    9,781
    
    
    
    3.8
    %Total depreciation and amortization
    
    $
    21,426
    
    
    $
    21,223
    
    
    
    1.0
    %Amortization of vessel dry-docking
    
    $
    8,775
    
    
    $
    8,319
    
    
    
    5.5
    %
 Amortization of Vessel Dry-docking.
 Selling, General and Administrative.
 Miscellaneous Expense, Net
 Horizon Logistics Segment
 Six Months EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    Change
    
    
    % Change(in thousands)Operating revenue
    
    $
    16,890
    
    
    $
    3,043
    
    
    $
    13,847
    
    
    
    455.0
    %Operating expense:Inland
    
    
    11,375
    
    
    
    967
    
    
    
    10,408
    
    
    
    1,076.3
    %Land
    
    
    1,262
    
    
    
    964
    
    
    
    298
    
    
    
    30.9
    %Rolling stock rent
    
    
    210
    
    
    
    
    
    
    
    210
    
    
    
    100.0
    %Cost of services
    
    
    12,847
    
    
    
    1,931
    
    
    
    10,916
    
    
    
    565.3
    %Depreciation and amortization
    
    
    1,449
    
    
    
    4,827
    
    
    
    (3,378
    )
    
    
    (70.0
    )%Selling, general and administrative
    
    
    5,120
    
    
    
    1,723
    
    
    
    3,397
    
    
    
    197.2
    %Miscellaneous expense, net
    
    
    67
    
    
    
    79
    
    
    
    (12
    )
    
    
    (15.2
    )%Total operating expenses
    
    
    19,483
    
    
    
    8,559
    
    
    
    10,924
    
    
    
    127.6
    %Operating loss
    
    $
    (2,593
    )
    
    $
    (5,517
    )
    
    $
    2,924
    
    
    
    53.0
    %
 Operating Revenue.
  11




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##### Table of Contents



Cost of Services.
 Depreciation and Amortization.
 Six Months EndedJune 22,
    
    
    June 24,2008
    
    
    2007
    
    
    % Change(in thousands)Depreciation and amortization:Depreciation and amortizationother
    
    $
    941
    
    
    $
    4,827
    
    
    
    (80.5
    )%Amortization of intangible assets
    
    
    508
    
    
    
    
    
    
    
    100.0
    %Total depreciation and amortization
    
    $
    1,449
    
    
    $
    4,827
    
    
    
    (70.0
    )%
 Selling, General and Administrative.
 Unallocated Expenses
 Interest Expense, Net.
 Income Tax Expense (Benefit).
 Liquidity and Capital Resources
   12




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##### Table of Contents



Operating Activities
  Decrease in vessel payments in excess of accrual
    
    $
    20,669Increase in accounts payable and accrued liabilities, net
    
    
    11,819Decrease in management bonus payments in excess of accrual
    
    
    12,998Decrease in accounts receivable
    
    
    6,053Other increases in working capital, net
    
    
    5,214Earnings adjusted for non-cash charges
    
    
    (11,189
    )$
    45,564
 Investing Activities
  Financing Activities
   Outlook
   13




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##### Table of Contents



Capital Requirements
   Long-Term Debt
 Senior Credit Facility
    Derivative Instruments
    14




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##### Table of Contents



4.25% Convertible Senior Notes
   
    
    Prior to May 15, 2012, if during any calendar quarter, and only during
such calendar quarter, if the last reported sale price of the
Companys common stock for at least 20 trading days in a period of 30
consecutive trading days ending on the last trading day of the
preceding calendar quarter exceeds 120% of the applicable conversion
price in effect on the last trading day of the immediately preceding
calendar quarter;
    
    Prior to May 15, 2012, if during the five business day period
immediately after any five consecutive trading day period (the
measurement period) in which the trading price per $1,000 principal
amount of notes for each day of such measurement period was less than
98% of the product of the last reported sale price of the Companys
common stock on such date and the conversion rate on such date;
    
    If, at any time, a change in control occurs or if the Company is a
party to a consolidation, merger, binding share exchange or transfer
or lease of all or substantially all of its assets, pursuant to which
the Companys common stock would be converted into cash, securities or
other assets; or
    
    At any time after May 15, 2012 through the fourth scheduled trading
day immediately preceding August 15, 2012.
    Interest Rate Risk
   15




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##### Table of Contents



Ratio of Earnings to Fixed Charges
  Quarter Ended
    
    
    Six Months EndedJune 22, 2008
    
    
    June 22, 2008Pretax income
    
    $
    8,533
    
    
    $
    11,128Interest expense
    
    
    8,216
    
    
    
    17,259Rentals
    
    
    8,738
    
    
    
    17,691Total fixed charges
    
    $
    16,954
    
    
    $
    34,950Pretax earnings plus fixed charges
    
    $
    25,487
    
    
    $
    46,078Ratio of earnings to fixed charges
    
    
    1.50
    x
    
    
    1.32
    x
  Recent Accounting Pronouncements
  Quarter Ended June 22, 2008
    
    
    Six Months Ended June 22, 2008As
    
    
    
    
    
    
    As
    
    
    As
    
    
    
    
    
    
    AsReported
    
    
    Adjustments
    
    
    Adjusted
    
    
    Reported
    
    
    Adjustments
    
    
    AdjustedInterest expense, net
    
    $
    8,147
    
    
    $
    2,206
    
    
    $
    10,353
    
    
    $
    17,156
    
    
    $
    4,357
    
    
    $
    21,513Income tax expense
    
    
    1,298
    
    
    
    (829
    )
    
    
    469
    
    
    
    1,802
    
    
    
    (1,638
    )
    
    
    164Net income
    
    
    7,235
    
    
    
    (1,377
    )
    
    
    5,858
    
    
    
    9,326
    
    
    
    (2,719
    )
    
    
    6,607Net income per shareBasic
    
    
    0.24
    
    
    
    (0.05
    )
    
    
    0.19
    
    
    
    0.31
    
    
    
    (0.09
    )
    
    
    0.22Diluted
    
    
    0.24
    
    
    
    (0.05
    )
    
    
    0.19
    
    
    
    0.31
    
    
    
    (0.09
    )
    
    
    0.22
  16




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##### Table of Contents



Year Ended December 23, 2007As
    
    
    
    
    
    
    AsReported
    
    
    Adjustments
    
    
    AdjustedInterest expense, net
    
    $
    41,672
    
    
    $
    3,204
    
    
    $
    44,876Income tax benefit
    
    
    (13,983
    )
    
    
    (1,205
    )
    
    
    (15,188
    )Net income
    
    
    28,859
    
    
    
    (1,999
    )
    
    
    26,860Net income per shareBasic
    
    
    0.87
    
    
    
    (0.06
    )
    
    
    0.81Diluted
    
    
    0.85
    
    
    
    (0.06
    )
    
    
    0.79
  Fiscal Year2008
    
    $
    8,9012009
    
    
    10,0112010
    
    
    11,0602011
    
    
    11,7652012
    
    
    4,821
       17




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##### Table of Contents



Forward Looking Statements
       18




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##### Table of Contents



6. Exhibits
 31.1*
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Filed herewith.  19




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##### Table of Contents



SIGNATURE
   HORIZON LINES, INC.By:
    /s/ MICHAEL T. AVARAMichael T. AvaraSenior Vice President & Chief Financial Officer
(Principal Financial Officer & Authorized Signatory)  20




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description31.1*
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Filed herewith.  21