<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                             ---------------------

                                  FORM 10-K/A

<Table>
<S>          <C>
 (Mark One)
    [X]             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934



                     FOR THE FISCAL YEAR ENDED DECEMBER 28, 2001



                                   OR




    [ ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
</Table>

                        Commission file number 333-62227

                             ---------------------

                         AMERICAN COMMERCIAL LINES LLC
             (Exact Name of Registrant as Specified in Its Charter)

<Table>
<S>                                            <C>
                  DELAWARE                                      52-2106600
        (State or Other Jurisdiction                           (IRS Employer
      of Incorporation or Organization)                     Identification No.)
</Table>

<Table>
<S>                                            <C>
           1701 EAST MARKET STREET
           JEFFERSONVILLE, INDIANA                                 47130
  (Address of Principal Executive Offices)                      (Zip Code)
</Table>

                                 (812) 288-0100
              (Registrant's Telephone Number, Including Area Code)
        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  [X]     No  [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     State the aggregate market value of the voting and non-voting common equity
held by nonaffiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the common equity was sold, or the
average bid and asked prices of such common equity, as of a specified date
within 60 days prior to the date of filing. NOT APPLICABLE.
      AS OF DECEMBER 28, 2001, THE REGISTRANT HAD 100 MEMBERSHIP INTERESTS
                                  OUTSTANDING.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                           PRELIMINARY NOTE TO 10-K/A

American Commercial Lines LLC ("ACL") is amending certain portions of its Annual
Report on Form 10-K for the fiscal year ended December 28, 2001 to restate Item
6 (Selected Financial Data), Item 7 (Management's Discussion and Analysis of
Financial Condition and Results of Operations) and Item 8 (Financial Statements
and Supplemental Data), each in its entirety. This restatement is being made to
correct the accounting in 2001 and 2000 with respect to certain minority
interest as more fully described in Note 12 to the financial statements.
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

<Table>
<Caption>
                                                             FISCAL YEARS ENDED
                                      -----------------------------------------------------------------
                                         DEC. 28,        DEC. 29,      DEC. 31,    DEC. 25,    DEC. 26,
                                           2001            2000          1999        1998        1997
                                      --------------   -------------   ---------   ---------   --------
                                      (AS RESTATED)    (AS RESTATED)
                                                           (DOLLARS IN THOUSANDS)
<S>                                   <C>              <C>             <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA(1):
Operating revenue...................    $ 788,501        $ 773,838     $ 739,136   $ 638,478   $618,233
Operating expense...................      723,140          717,530       664,544     575,729    559,600
Operating income....................       65,361           56,308        74,592      62,749     58,633
Other (income) expense(2)...........        1,526           (7,409)       (3,048)        587      1,930
Interest expense....................       70,932           70,813        71,275      40,981     12,472
(Loss) earnings before income taxes,
  extraordinary items and cumulative
  effect of accounting changes......       (7,097)          (7,096)        6,365      21,181     44,231
Income taxes (benefit)..............          118            4,263         1,658     (64,263)    18,287
Extraordinary items(3)..............       (1,885)             734            --          --         --
Cumulative effect of accounting
  changes(4)........................          490               --         1,737          --         --
Net (loss) earnings.................       (5,820)         (12,093)        2,970      85,444     25,944
OTHER OPERATING DATA:
Towboats (at period end)............          193              206           204         201        145
Barges (at period end)..............        5,083            5,103         4,397       4,372      3,822
Tonnage (thousands, for period
  ended)............................       75,546           71,224        71,903      68,749     65,998
OTHER FINANCIAL DATA:
EBITDA(5)...........................    $ 126,375        $ 114,544     $ 129,859   $ 116,457   $ 97,852
Depreciation and amortization.......       55,497           56,014        51,222      46,337     41,149
Property additions..................       19,772           50,861        55,880      45,382     51,500
Net cash provided (used) by:
  Operating activities..............       24,588           30,782        94,602      78,665     52,069
  Investing activities..............        3,292          (24,192)      (59,156)    (62,572)   (49,300)
  Financing activities..............      (40,195)          22,137       (53,961)     26,338    (20,128)
STATEMENT OF FINANCIAL POSITION
  DATA:
Cash and cash equivalents...........    $  47,253        $  59,568     $  30,841   $  49,356   $  6,925
Working capital.....................     (681,674)        (107,354)      (16,525)     37,687      7,445
Properties -- net...................      464,133          509,443       559,777     541,415    460,295
Total assets........................      757,936          787,538       776,096     838,530    640,138
Long-term debt, including current
  portion...........................      608,519          658,055       712,807     758,900     48,230
Shareholder's equity/Member's
  deficit...........................     (148,019)        (142,618)     (132,072)   (130,395)   299,501
</Table>

---------------

(1) ACL acquired the barging operations of National Marine, Inc. in 1998 and
    purchased Peavey in 2000. The results of operations and cash flows of these
    companies have been included from the date of the respective acquisitions.

(2) Includes $11,418 gain from the sale of Waterways Communication System LLC
    ("Watercom") in 2000.

(3) ACL paid $734 for the early redemption premium on the Terminal Revenue bonds
    in 2000. ACL recorded extraordinary income of $1,885 in 2001 on the early
    retirement of $5,000 in Senior Notes.

(4) ACL adopted American Institute of Certified Public Accountants Statement of
    Position 97-3 in the first quarter 1999, with a cumulative effect adjustment
    of $1,737 in non-cash expense for workers' compensa-

                                        1
<PAGE>

    tion second injury funds. ACL adopted Financial Accounting Standards Board
    Statement No. 133 in 2001 with a cumulative effect adjustment of $490 in
    non-cash expense for an interest rate cap.

(5) EBITDA, as that term is defined in the Credit Agreement, as amended, which
    can be found in Exhibits 10.1, 10.14, 10.15, 10.16, 10.17 and 10.18 to
    previous filings by ACL with the U.S. Securities and Exchange Commission
    (the "Commission"), represents earnings before interest, income taxes,
    depreciation, amortization and, in 2001, the addition of $7,139 deferred
    profit, $652 interest rate cap loss and $1,164 expenses related to
    re-capitalization and the subtraction of $1,886 gain from the sale of
    terminals and Omaha condemnation proceeds and $110 earnings from investment
    in T.T. Barge, and in 2000, the addition of $734 extraordinary loss, $3,688
    deferred profit and $3,865 impairment loss on barges and the subtraction of
    $11,418 gain on sale of Watercom, and in 1998, the addition of $7,958 of
    non-recurring, non-cash compensation expense related to the
    Recapitalization. EBITDA is presented because management believes it is a
    widely accepted financial indicator used by certain investors and securities
    analysts to analyze and compare companies on the basis of operating
    performance. EBITDA is not intended to represent cash flows for the period,
    nor has it been presented as an alternative to operating income as an
    indicator of operating performance and should not be considered in isolation
    or as a substitute for measures of performance prepared in accordance with
    generally accepted accounting principles. ACL understands that while EBITDA
    is frequently used by securities analysts in the evaluation of companies,
    EBITDA, as used herein, is not necessarily comparable to other similarly
    titled captions of other companies due to potential inconsistencies in the
    method of calculation. See the historical financial statements of ACL and
    the related notes thereto included elsewhere herein.

                                        2
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
Item 6. "Selected Financial Data" and the consolidated financial statements and
related notes included elsewhere in this Annual Report on Form 10-K. This Annual
Report on Form 10-K contains certain forward-looking statements about ACL's
financial position and results of operations. These statements include words
such as "believe," "expect," "anticipate," "intend," "estimate" or other similar
words. Any statements that express or involve discussions as to expectations,
beliefs or plans are not historical facts and involve known and unknown risks,
uncertainties and other factors that may cause the actual results to materially
differ from those considered by the forward-looking statements. Such factors
include:

     - substantial leverage and ability to service debt;

     - changing market, labor, legal and regulatory conditions and trends in the
       barge and inland shipping industries;

     - general economic and business conditions, including a prolonged or
       substantial recession in the United States or certain international
       commodity markets such as the market for grain exports; and

     - annual worldwide weather conditions, particularly those affecting North
       and South America.

     Although we believe that our plans, intentions and expectations reflected
in or suggested by such forward-looking statements are reasonable, actual
results could differ from a projection or assumption in any of our
forward-looking statements. Our future financial condition and results of
operations, as well as any forward-looking statements, are subject to change and
inherent risks and uncertainties discussed under Item 1. "Business -- Risks
Associated With Our Business" and elsewhere in this Annual Report on Form 10-K
as well as in our other filings with the Securities and Exchange Commission. The
forward-looking statements contained in this Annual Report on Form 10-K are made
only as of the date hereof and ACL does not have or undertake any obligation to
update or revise any forward-looking statements whether as a result of new
information, subsequent events or otherwise, unless otherwise required by law.

OVERVIEW

ACL'S BUSINESS

     ACL is an integrated marine transportation and service company, providing
barge transportation and ancillary services. ACL supports its barging operations
by providing marine vessel design and construction along with inter-modal cargo
transfer services to ACBL and third parties. ACBL is the leading provider of
river barge transportation throughout the Inland Waterways. In addition, since
expanding its barge transportation operations to South America in 1993, ACL
International has become the leading provider of barge transportation services
on the Orinoco River in Venezuela and, through UABL, on the Parana/Paraguay
River system serving Argentina, Brazil, Paraguay, Uruguay and Bolivia. ACL
International, also provides transportation services on the Higuamo River in the
Dominican Republic.

     ACL derives its revenues primarily from the barge transportation of other
bulk/steel, grain, coal and liquids in the United States and South America.
While ACL's customer base has remained relatively stable and certain of its
operations provide steady rate levels and profit margins, its results of
operations can be impacted by a variety of external factors. These factors
include fluctuations in rates for shipping grain, which in turn affect rates for
shipping other dry cargoes, weather and river conditions and fluctuations in
fuel prices. Although revenues from ACL's international operations are typically
denominated in U.S. dollars, its results could be impacted by currency
fluctuations.

     ACL seeks to enter into multi-year contracts at fixed prices (with
inflation-indexed escalation and fuel adjustment clauses) with its customers.
Approximately 60% of contracts in effect as of December 28, 2001 were for
periods of greater than one year.

     ACBL's top 25 customers accounted for 55% of ACL's fiscal 2001 operating
revenue. One customer, Cargill, Inc., accounted for more than 10% of ACL's
fiscal 2001 consolidated operating revenue.

                                        3
<PAGE>

POTENTIAL ACQUISITION AND RECAPITALIZATION OF ACL

     As discussed in Item 1, ACL has been pursuing strategic financial
restructuring alternatives and, on March 15, 2002, entered into a
recapitalization agreement with Danielson regarding the acquisition and
recapitalization of ACL by Danielson.

ACL'S STRATEGY

     Subject to the return of more favorable market and operating conditions and
the consummation of the Danielson Recapitalization, discussed in more detail in
the "Liquidity and Capital Resources" section of this Item 7, ACL intends to
continue to pursue a strategy of growth in its core business units. ACL's
pursuit of growth through strategic acquisitions has created value through
synergies and economies of scale that have enhanced ACL's long term results of
operations. ACL's previous acquisitions have included:

     - SCNO Barge Lines, Inc. in 1988, Hines American Lines, Inc. in 1991, The
       Valley Line Company in 1992, Continental Grain's barging operations in
       1996 and National Marine's barging operations in 1998;

     - On May 26, 2000 ACL entered into an agreement to purchase or lease
       substantially all of the long-term assets of Peavey. This added more than
       900 covered hopper barges to ACL's existing fleet of inland marine
       barges; and

     - On October 24, 2000, an ACL 80% owned subsidiary, ACBLH entered into an
       agreement with Ultrapetrol to combine the inland river barge
       transportation divisions of ACBLH and Ultrapetrol which operate on the
       Parana/Paraguay River system in South America. ACBLH has a 50% ownership
       interest in the newly formed company, UABL. UABL operates 20 towboats and
       a combined fleet of 374 dry cargo and tank barges. UABL serves commodity
       shippers in Argentina, Bolivia, Brazil, Paraguay and Uruguay. UABL seeks
       to further consolidate its position in the Parana/Paraguay River system
       market through acquisitions, and intends to pursue this strategy in 2002.

     Focusing on its core business units, ACL has also divested certain assets
in the past several years, including:

     - On September 6, 2000, ACL sold its 100% membership interest in Waterway
       Communications System LLC ("Watercom") to Mobex Network Services Company
       ("Mobex"). The sale of Watercom will not significantly affect ACL's
       expected future operating income or cash flow from operating activities.

     - On May 25, 2001, ACL entered into an agreement to sell seven of ACT's ten
       terminals, other than its coal transfer facility at St. Louis, Missouri
       and its tank storage facility at Memphis, Tennessee to GMS. An additional
       terminal site in Omaha, Nebraska was transferred on June 29, 2001.
       Subsequent to June 29, 2001, additional proceeds were received from the
       condemnation of Omaha Terminal.

ACL'S FLEET

     The size of ACL's combined domestic and international fleet, including
owned and leased barges, over the past three years is as follows:

                        DOMESTIC AND INTERNATIONAL FLEET
                               (NUMBER OF BARGES)

<Table>
<Caption>
                                                  DECEMBER 28,   DECEMBER 29,   DECEMBER 31,
                  BARGE TYPES                        2001*           2000           1999
                  -----------                     ------------   ------------   ------------
<S>                                               <C>            <C>            <C>
Covered hoppers.................................     3,865          3,965          3,079
Open hoppers....................................       772            673            839
Tank Barges.....................................       439            458            471
Deck Barges.....................................         7              7              8
                                                     -----          -----          -----
          Total.................................     5,083          5,103          4,397
                                                     =====          =====          =====
</Table>

---------------

* In addition ACL operates 298 covered hoppers, 40 open hoppers and 36 tank
  barges through its participation in UABL.

                                        4
<PAGE>

     The average age of ACL's domestic barge fleet is currently 18 years,
compared with an industry average of 16 years. These barges have an expected
life of approximately 25 to 30 years. In addition, at year end ACBL operated 187
towboats domestically, with an average age of 25 years. ACL International
operates 129 barges, with an average age of 17 years, six towboats and in
addition, through UABL, 374 barges with an average age of 16 years and 20
towboats.

TAXES

     ACL is a limited liability company and its operations are conducted mainly
through a series of limited liability company subsidiaries, and, as a result,
ACL will not itself generally be subject to U.S. federal or state income tax.
Taxable income will be allocated to the equity holders of the Parent and such
holders will be responsible for income taxes on such taxable income. ACL intends
to make distributions to the Parent which, in turn, will make distributions to
its equity holders to enable them to meet all or a portion of their tax
obligations with respect to taxable income allocated to them by ACL. The Amended
and Restated Limited Liability Company Agreement of the Parent (the "LLC
Agreement") reduces the amount of tax distributions to CSX (or its affiliate)
until 2005, which may make additional funds available for use by ACL, subject to
the discretion of the Parent. Notwithstanding the foregoing, in certain
circumstances the tax distribution provisions of the LLC Agreement permit
distributions which could exceed the combined federal, state, local and foreign
income taxes that would be payable with respect to taxable income of ACL for any
given period if it were a Delaware corporation filing separate tax returns. Such
distributions are permitted under the Indenture. See Item 13, "Certain
Relationships and Related Transactions."

RESULTS OF OPERATIONS

  YEAR ENDED DECEMBER 28, 2001 COMPARED WITH YEAR ENDED DECEMBER 29, 2000

     ACL follows a 52/53 week fiscal year ending on the last Friday in December
of each year.

     Operating Revenue.  Operating revenue for the year ended December 28, 2001
increased 2% to $788.5 million from $773.8 million for the year ended December
29, 2000. The revenue increase was due to higher barge freight volumes as a
result of the operation of the Peavey barges for the whole year 2001 as compared
to seven months in 2000 and higher freight rates on certain domestic barging
commodities largely due to the effect of contract, fuel price adjustment
clauses. The increase was partially offset by the impact of ice and flooding on
the domestic barging operation in the first half of the year, reduced volume at
Jeffboat and the sale of the ACT terminals.

     Domestic barging revenue increased $44.2 million to $636.0 million
primarily due to the addition of revenue from the Peavey barges, improved
barging freight rates for bulk and steel commodities and higher contract freight
rates from fuel price adjustment clauses. The increase was partially offset by
reduced loads per barge due to severe ice conditions on the Mississippi and
Illinois Rivers in the first quarter of 2001 and the closure of the upper
Mississippi River due to flooding during the second quarter of 2001.

     International revenues fell $0.3 million to $39.7 million primarily due to
ACL's share of the net earnings from UABL being reported, net of expenses, as an
other income item in 2001 according to the equity method, compared to the
consolidating of revenue from the Argentine operation during the first ten
months of 2000. This decrease was partially offset by increased revenue from
equipment charters to the UABL venture. Increased revenue from additional
bauxite freight revenue in Venezuela, additional revenue recognized in 2001 for
settlement of minimum contract tonnage in Venezuela, continuing revenue from a
terminal operation in Venezuela, that began in the fourth quarter of 2000, and
the start of barging operations in the Dominican Republic in 2001 also
contributed to offset the fall in revenue.

     Revenue at Jeffboat decreased $21.2 million to $102.9 million primarily due
to lower volume of hopper barge sales and an increase in the number of hoppers
completed for ACL's leasing program on which the profit on sales is deferred.
The profit on sales of equipment that was subsequently leased to ACL's barge
operating division, ACBL, has been deferred and will be recognized over the life
of the leases. An absence of towboat construction revenue in 2001 as compared to
revenue from the construction of one towboat in 2000

                                        5
<PAGE>

also contributed to the decline. Tank barge construction volume at Jeffboat
improved in 2001 as increased revenue from large tank barge (30,000 barrel tank
barges) sales was partially offset by a reduction in the sales of smaller tank
barges (10,000 barrel tank barges).

     Operating Expense.  Operating expense for the year ended December 28, 2001
rose 1% to $723.1 million from $717.5 million for the year ended December 29,
2000. Domestic barging expenses increased $34.4 million primarily due to
operating the Peavey barges for the full year 2001 and due to higher fuel prices
as a result of the timing of fuel price swap agreements. High proportions (75%)
of the Peavey barges were rented under operating leases, which were assumed by
ACL. The high proportion of Peavey-leased equipment has the impact of
disproportionately raising operating expense in relation to operating revenue as
compared to the fleet prior to the addition of Peavey. Although the timing of
fuel price swaps raised fuel prices, average fuel prices before user tax on
gallons of fuel consumed by vessels decreased 3 cents per gallon to 81 cents per
gallon in 2001. Operating expenses for 2001 include a $16.5 million gain on
property dispositions primarily from the sale of towboats and marine repair
shipyard assets and a $1.1 million favorable adjustment due to a change in
accounting estimate of the depreciable lives of towboats. Operating expenses for
2000 include a non-cash impairment loss on inactive barges of $3.8 million and a
$1.9 million gain on property dispositions primarily from the sale of towboats.

     International barging expenses fell $5.2 million to $33.9 million, largely
due to ACL's share of the net earnings from UABL being reported, net of
expenses, as an other income item in 2001 according to the equity method,
compared to the consolidating of expense from the Argentine operation during the
first ten months of 2000. The decrease was partially offset by increased expense
from the additional movement of bauxite in Venezuela, the operation of the
terminal in Venezuela and the start of barging operations in the Dominican
Republic.

     Jeffboat's expenses decreased $17.7 million to $98.1 million, due to the
lower hopper barge, small tank barge and towboat construction volumes, partially
offset by an increase in large tank barge construction volume. Lower steel
prices and improved productivity also contributed to the decline in expense at
Jeffboat.

     Operating Income.  Operating income for the year increased 16% to $65.4
million from $56.3 million for 2000, due to the reasons discussed above.

     Interest Expense.  Interest expense for 2001 increased to $70.9 million
from $70.8 million for 2000. The increase is due to higher interest rate spreads
as a result of the amendment to the Senior Credit Facilities, a higher
outstanding balance on the revolver in 2001 as compared to 2000 and higher debt
amortization as a result of fees associated with the amendment to the Senior
Credit Facilities. The increase was partially offset by lower London InterBank
Offered Rates ("LIBOR"), which are the basis for certain interest rate
adjustments under ACL's Senior Credit Facilities, lower Term Loan balances and
lower other debt balances.

     Gain on Sale of Watercom.  There was no inclusion of a gain on the sale of
ACL's membership interest in Watercom in 2001 as compared to $11.4 million in
2000.

     (Loss) Earnings Before Income Taxes, Extraordinary Item and Cumulative
Effect of Accounting Change.  The loss before income taxes, extraordinary item
and cumulative effect of accounting change for the year was $7.1 million
compared to a loss of $7.1 million in 2000, due to the reasons discussed above.

     Income Taxes.  Income taxes for the year decreased to $0.1 million from
$4.3 million for 2000 due to lower withholding tax on foreign source income.
ACL's domestic corporate subsidiaries, except ACL Capital Corp., are limited
liability companies. ACL passes its U.S. federal and substantially all of its
state taxable income to its Parent, whose equity holders are responsible for
those income taxes.

     (Loss) Earnings Before Extraordinary Item and Cumulative Effect of
Accounting Change.  The loss before extraordinary item and the cumulative effect
of an accounting change was $7.2 million for 2001 compared with a loss of $11.4
million for 2000, due to the reasons discussed above.

     Extraordinary Item -- Gain (Loss) on Early Extinguishment of Debt.  The
gain on early extinguishment of debt was $1.9 million for 2001 compared to a
loss of $0.7 million for 2000. The gain for 2001 is a result of ACL's purchase
in the open market of $5.0 million par value of a portion of ACL's Senior Notes
for a
                                        6
<PAGE>

discount. The loss for 2000 was due to the early redemption premium on certain
terminal revenue refunding bonds (the "Terminal Revenue Refunding Bonds").

     Cumulative Effect of Accounting Change.  The cumulative effect of
accounting change was a loss of $0.5 million for 2001 due to recognition of a
loss on the fair value of an interest rate cap as a result of ACL's adoption of
FASB Statement No. 133 as of December 30, 2000.

     Net (Loss) Earnings.  Net loss for 2001 was $5.8 million compared to net
loss of $12.1 million in 2000, due to the reasons discussed above.

  YEAR ENDED DECEMBER 29, 2000 COMPARED WITH YEAR ENDED DECEMBER 31, 1999

     ACL follows a 52/53 week fiscal year ending on the last Friday in December
of each year. 2000 was a 52 week year compared with prior year 1999 of 53 weeks.

     Operating Revenue.  Operating revenue for the year ended December 29, 2000
increased nearly 5% to $773.8 million from $739.1 million for the year ended
December 31, 1999. The revenue increase was due to higher barge freight volumes
as a result of the addition of Peavey and higher freight rates on certain
domestic barging commodities largely due to the effect of contract, fuel price
adjustment clauses. The increase was partially offset by lower contract coal
freight rates, one less week in the reporting period and reduced revenue due to
the sale of the Watercom business unit.

     Domestic barging revenue increased nearly 7% or $37.9 million from $553.9
million in 1999 to $591.8 million in 2000 despite the effect of the shorter
reporting period. The increase is primarily due to increased volume as a result
of the larger fleet, higher contract freight rates from fuel price adjustment
clauses, higher market rates for bulk, steel and liquid commodities and adverse
operating conditions in the year ago period. The increase was partially offset
by lost volume as a result of grain inspection delays in the fourth quarter of
2000 due to the introduction of a new type of genetically altered seed into the
U.S. corn supply and the closure of the Illinois River due to ice in December,
2000. Domestic fleet velocity was further reduced by customers holding barge
equipment at loading and unloading ports for longer than usual during the second
and third quarters of 2000.

     International revenues fell $0.1 million to $40.0 million as charter
revenue from the UABL joint venture offset volume shortfalls in Venezuela due to
a customer's unloading dock accident. A large portion of the Venezuelan volume
shortfall earlier in the year was recovered in the fourth quarter from cargo
transfer revenue and increased freight volumes attributable to ACL's start up of
a new crane barge cargo unloading facility.

     Revenue at Jeffboat, ACL's marine construction subsidiary, fell $0.3
million to $124.1 million, reflecting reduced hopper barge construction for
third-party customers, offset by increased construction of tank barges. The
profit on sales of equipment that was subsequently leased to the barge operating
division has been deferred and will be recognized over the life of the leases.

     Operating Expense.  Operating expense for the year ended December 29, 2000
rose 8% to $717.5 million from $664.5 million for the year ended December 31,
1999. Domestic barging expenses increased $51.8 million primarily due to
operating the Peavey barges and higher fuel prices. High proportions (75%) of
the Peavey barges were rented under operating leases. This has the impact of
disproportionately raising operating expense in relation to operating revenue as
compared to the fleet prior to the addition of Peavey. Average fuel prices
increased from 50 cents per gallon in 1999 to 84 cents per gallon in 2000. The
increase in operating expense due to the change in fuel price from the year ago
period was $35 million. The net impact of rising fuel prices offset by contract
revenue adjustments and hedging is estimated to be a $7 million reduction in
operating income vs. the year ago period. Record cold temperatures in the
mid-west resulted in an unusual, December closing of the Illinois River that
also contributed to the increase in 2000 operating expenses. Operating expenses
for 2000 include a non-cash impairment loss on inactive barges of $3.8 million.
Operating expenses for 1999 include charges of $1.6 million for a partially
deferred employment contract payment to a former ACL executive.

                                        7
<PAGE>

     International barging expenses fell $0.6 million to $39.1 million, largely
due to the contribution of the Argentine based operation to UABL and lower barge
freight volume in Venezuela.

     Jeffboat's expenses increased $3.8 million to $115.8 million, due to
increased tank barge construction. The volume related increase was partially
offset by improved productivity and lower steel prices.

     ACL implemented a number of internal changes in 2000, including staff
reductions that resulted in cost savings of approximately $1 million per year,
and reassignment of senior level responsibilities. Changes in health and benefit
plans, including the American Commercial Lines LLC Pension Plan, that affect
salaried employees covered by the plans, were also implemented and resulted in
annual cost savings of approximately $5 million. In 2000, management of ACL's
tank barge cleaning facility at Baton Rouge was assigned to a non-affiliated
third party whose core business is barge cleaning. ACL received a variable
monthly fee linked to the facility's operating profit in 2000. Management of
ACL's boat and barge repair yard in New Orleans and its fleeting facility in
Mobile were also assigned to non-affiliated third parties in 2000 with ACL
receiving monthly fees containing both fixed and variable components. ACL sold
its tank barge cleaning and boat and barge repair facilities to the third party
operators in 2001.

     Operating Income.  Operating income for the year decreased 25% to $56.3
million from $74.6 million for 1999, due to the reasons discussed above.

     Interest Expense.  Interest expense for 2000 decreased to $70.8 million
from $71.3 million for the same period in 1999. The decrease is due to lower
outstanding balances and lower LIBOR base interest on the Senior Credit
Facilities.

     Gain on Sale of Watercom.  The gain on the sale of the membership interest
in Watercom was $11.4 million. The gain results from a purchase price of $16.0
million, which consist of $13.6 million in cash and $2.4 million in Mobex
preferred stock, less $4.6 million which was the total of ACL's net investment
in Watercom and transaction related costs.

     (Loss) Earnings Before Income Taxes, Extraordinary Item and Cumulative
Effect of Accounting Change.  The loss before income taxes, extraordinary item
and cumulative effect of accounting change for the year was $7.1 million
compared to earnings of $6.4 million in 1999, due to the reasons discussed
above.

     Income Taxes.  Income taxes for the year increased to $4.3 million from
$1.7 million for 1999 due to additional withholding tax on foreign source
income. ACL's domestic corporate subsidiaries, except ACL Capital Corp., were
converted to limited liability companies as of June 30, 1998. ACL passes its
U.S. federal and state taxable income to its Parent, whose equity holders are
responsible for those income taxes.

     (Loss) Earnings Before Extraordinary Item and Cumulative Effect of
Accounting Change.  The loss before extraordinary item and the cumulative effect
of an accounting change was $11.4 million for 2000 compared with an earnings of
$4.7 million for the same period in 1999, due to the reasons discussed above.

     Extraordinary Item -- Loss on Early Extinguishment of Debt.  ACL recognized
$0.7 million as an extraordinary loss in the second quarter of 2000 reflecting
the redemption premium on the Terminal Revenue Refunding Bonds. This amount was
paid out of an escrow account previously established as an irrevocable trust.

     Cumulative Effect of Accounting Change.  ACL recognized $1.7 million in
non-cash expense related to a workers compensation secondary injury fund in
accordance with adoption of the American Institute of Certified Public
Accountants (AICPA) Statement of Position (SOP) 97-3, "Accounting by Insurance
and Other Enterprises for Insurance-Related Assessments" in the first quarter of
1999.

     Net (Loss) Earnings.  Net loss for 2000 was $12.1 million compared to net
earnings of $3.0 million in 1999, due to the reasons discussed above.

                                        8
<PAGE>

OUTLOOK

     Domestic barging demand for bulk, steel and liquid commodities is expected
to remain at 2001 levels throughout 2002. The U.S. Department of Agriculture
currently forecasts 2002 crop year corn exports of 1.975 billion bushels as
compared to 1.937 billion bushels for the 2001 crop year.

     In the first quarter of 2002, the average price of fuel consumed by ACBL
vessels is expected to decrease $0.07 per gallon from the fourth quarter of
2001. With the addition of boats required to move the Peavey barges, ACBL
vessels will consume approximately 110 million gallons annually and generally
ratably throughout the year. ACBL has contract price adjustment clauses and a
fuel-hedging program, which provide protection for approximately 75% of gallons
consumed. Contract adjustments are deferred one quarter.

     The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses for the same
period. Actual results could differ from those estimates.

CRITICAL ACCOUNTING POLICIES

     Critical accounting policies that affect the reported amounts of assets and
liabilities include barge transportation revenue being recognized
proportionately as shipments move from origin to destination, estimates of
harbor and towing service charges being made at the time such services are
received, and expense from insurance claim loss deductibles being recognized
based upon liability estimates that are made as claim incidents occur. The
proportion of barge transportation revenue to be recognized is determined by
applying a percentage to the contractual charges for such services. The
percentage is determined by dividing the number of miles from the loading point
to the position of the barge as of the end of the accounting period by the total
miles from the loading point as specified in the relevant freight contract. The
position of the barge at accounting period end is determined by locating the
position of the boat with the barge in tow through use of a global positioning
system. The recognition of revenue based upon the percent of voyage completion
results in a better matching of revenue and expenses. Harbor and towing service
charges are estimated by vendor based upon recent historical charges for the
same type of service. Liabilities for insurance claim loss deductibles are
estimated based upon historical experience with similar claim incidents. Routine
engine overhauls that occur on a one to three year cycle are expensed when they
are incurred. Repairs that extend the original economic life of an asset or that
enhance the original functionality of an asset are capitalized and amortized
over their estimated economic life. The costs of purchasing or developing
software are capitalized and amortized over the estimated economic life of the
software.

     See note 1 to the financial statements in Item 8 for a further discussion
of significant accounting policies.

LIQUIDITY AND CAPITAL RESOURCES

ACL INDEBTEDNESS

     As of December 28, 2001, ACL had outstanding indebtedness of $692.5
million, including $313.3 million drawn under its two Term Loans and $295.0
million aggregate principal amount of Senior Notes. ACL had other notes
outstanding of $0.2 million at year end. In addition, ACL had $5.9 million in
outstanding capital lease obligations and had securitized $51.0 million of the
trade receivables of two subsidiaries.

     ACL also has available borrowings of up to $100.0 million under the
Revolving Credit Facility. At the end of 2001, $15.4 million of letters of
credit had been issued under the facility and $84.0 million revolving loans were
outstanding. ACL had $47.3 million cash on deposit in bank accounts as of
December 28, 2001.

     The Senior Credit Facilities and the Indenture contain a number of
covenants with specified financial ratios and tests including, with respect to
the Senior Credit Facilities, maximum leverage ratios which could lead to an
event of default which could result in acceleration of the debt, higher interest
rates or other adverse consequences. The Indenture also contains certain cross
default provisions. Compliance with financial ratios is

                                        9
<PAGE>

measured at the end of each quarter. ACL's ability to meet the financial ratios
is affected by adverse weather conditions, seasonal market conditions and other
risk factors inherent in its business. These and other risk factors are
discussed in and incorporated by reference from "Risk Factors," Exhibit 99.1,
appended hereto.

IMPACT OF AMENDMENT TO SENIOR CREDIT FACILITIES

     Due to less than anticipated financial results relating to poor river
operating conditions in the domestic barging operation in the fourth quarter of
2000 and an adverse barging freight market largely due to the introduction of a
genetically altered seed into the U.S. corn supply which delayed barge
shipments, ACL completed an agreement with its lenders to amend the Senior
Credit Facilities effective December 29, 2000 through December 31, 2001
("Amendment No. 5"). The amendment added a rent adjusted consolidated leverage
ratio, a limitation on annual rent expense, reduced allowable capital
expenditures, increased the interest rates on the Term Loans and the Revolving
Credit Facility and required a $40.0 million reduction of the Term Loans by
October 30, 2001, to be funded primarily through the sale of assets.

     ACL was in compliance with the requirements of Amendment No. 5 as of the
end of fiscal year 2001. The outstanding balance on the Term Loans was reduced
by $40.0 million primarily by use of proceeds from the sale of certain ACT
terminals to GMS, from the sale of the property and assets of a marine repair
and tank barge cleaning operation located in Louisiana to a newly formed limited
liability company of which ACL has a minority interest, from the sale of the
assets located at a marine repair yard in Louisiana to an unaffiliated third
party, and from the sale of five towboats to unaffiliated third parties.

     Following December 31, 2001, the covenant requirements reverted to those
specified in the original Senior Credit Facilities which are more restrictive
than the amended covenants. Certain covenants added by Amendment No. 5 also
become more restrictive. ACL is currently not in compliance with certain
covenants in the Senior Credit Facilities and it is not likely that ACL will be
able to meet these covenant requirements in 2002, absent an additional amendment
to the Senior Credit Facilities and the consummation of the Danielson
Recapitalization. Failure to meet these covenants could have a material adverse
effect on the liquidity of ACL.

FAILURE TO PAY INTEREST ON SENIOR NOTES

     On December 31, 2001, ACL elected not to pay the interest due (the "Bond
Interest Payment") on its Senior Notes due to ongoing negotiations with its
lenders and noteholders regarding the restructuring of ACL's bank and bond debt.
Following the thirty (30) day grace period provided by the Indenture, ACL again
elected not to make the Bond Interest Payment. This election not to pay the Bond
Interest Payment constituted an event of default under the Indenture. However,
certain noteholders entered into forebearance agreements with ACL agreeing not
to accelerate the maturity of the Senior Notes or take additional adverse
actions against ACL. Acceleration of the Senior Notes under the Indenture would
have a material adverse effect on ACL's liquidity. Further, as a result of ACL's
failure to make the Bond Interest Payment, J.P. Morgan Chase Bank ("J.P.
Morgan") delivered a notice to ACL in January 2002 asserting that ACL was in
default of the Credit Agreement. Certain lenders party to the Credit Agreement
also entered into forebearance agreements with ACL, agreeing not to accelerate
the debt or take additional adverse actions against ACL. An acceleration of the
debt under the Senior Credit Facilities would have a material adverse effect on
ACL's liquidity.

     As a result of the events described above, PNC Bank, National Association
("PNC"), as Administrator under ACL's receivables facility with PNC (the
"Receivables Purchase Agreement"), asserted that ACL was in default under the
Receivables Purchase Agreement. ACL and PNC entered into a waiver of the
Receivables Purchase Agreement on February 11, 2002 (the "RPA Waiver") and a
modification to that waiver on February 25, 2002 (the "RPA Waiver"). The RPA
Waiver has the effect of waiving the default asserted by PNC, provided that ACL
enters into certain definitive agreements with Danielson relating to the
Danielson Recapitalization and refinances the Receivables Purchase Agreement on
or before April 30, 2002. The RPA Waiver also requires ACL to reduce its overall
borrowings under the facility to no more than $50.0 million. A default under the
Receivables Purchase Agreement or the RPA Waiver could have a material adverse
effect on ACL's liquidity.

                                        10
<PAGE>

DANIELSON RECAPITALIZATION

     As discussed in Item 1, ACL has entered into the Recapitalization Agreement
with Danielson which will result in an acquisition and recapitalization of ACL
by Danielson. Should the Danielson Recapitalization be consummated, ACL
anticipates that it will obtain a waiver of any current default under, and
certain amendments to, its Senior Credit Facilities and, with respect to holders
of Senior Notes who tender their Senior Notes in the exchange offer and consent
solicitation, the Indenture governing the Senior Notes.

NET CASH, CAPITAL EXPENDITURES AND CASH FLOW

     Net cash provided by operating activities was $24.6 million, $30.8 million
and $94.6 million for fiscal 2001, 2000 and 1999, respectively. The decrease in
net cash from operating activities in 2001 compared with 2000 was primarily due
to a small increase in inventories in 2001 compared to a large inventory
reduction in 2000 and due to two interest payments on the senior notes being
remitted in 2001 compared to one payment remitted in 2000. The decrease was
partially offset by the timing of cash disbursements related to accounts
payable. The decrease in net cash from operating activities in 2000 compared
with 1999 was primarily due to $50.0 million provided by the initial sale of the
trade receivables of two subsidiaries in 1999, the timing of cash disbursements
related to accounts payable and the lower net earnings. Net cash from operating
activities was used primarily for repayment of third-party debt and capital
expenditures.

     Capital expenditures were $25.6 million, $57.0 million and $55.9 million in
2001, 2000 and 1999, respectively. Expenditures in 2001 and 2000 include $5.8
million and $6.1 million, respectively, in expenditures associated with capital
leases. Cash expenditures included $0.4 million, $48.0 million and $23.9 million
for domestic marine equipment and $3.4 million, $2.9 million and $8.9 million
for foreign investments in 2001, 2000 and 1999, respectively. The remaining
$16.0 million in domestic cash capital expenditures in 2001 was primarily for
marine equipment maintenance.

     ACL expects capital expenditures in 2002 to be approximately $33 million
and to be primarily for fleet maintenance. Additional operating lease expense of
approximately $4 million will be incurred to provide fleet replacement
equipment. This will be partially offset by reductions in existing barge charter
rates.

     Management believes that cash generated from operations is sufficient to
fund its cash requirements, including capital expenditures for fleet
maintenance, working capital, interest payments and scheduled principal
payments. ACL may from time to time, borrow under the Revolving Credit Facility.
ACL currently plans to use excess cash provided by operations to pay down the
Revolving Credit Facility and the Term Loans.

     Demand for freight moved by ACL barges is influenced by the economic demand
for the cargoes. A decrease in that demand could adversely affect ACL's
operating cash flows. Some cargoes are more highly dependent upon general
economic conditions, such as certain liquid and steel cargoes which have
experienced a recent softening in demand.

     Cash flows from ACL's barging and manufacturing operations are also
affected by weather and river conditions. Extreme weather conditions can have a
materially adverse affect on ACL's operating cash flows.

     ACL has various environmental liabilities that could have an impact on its
financial condition and results of operations. These environmental matters are
discussed in Item 3, "Legal Proceedings," contained in this Annual Report on
Form 10-K.

     At December 28, 2001 and December 29, 2000 ACL had $51.0 million and $56.0
million, respectively, outstanding under the Receivables Purchase Agreement, its
accounts receivable securitization facility discussed above, and had $22.6
million and $15.3 million, respectively, of net residual interest in the
securitized receivables which is included in "Accounts Receivable, Net" in ACL's
consolidated financial statements. The fair value of the net residual interest
is measured at the time of the sale and is based on the sale of similar assets.
In 2001, ACL received gross proceeds of $30.8 million from the sale of
receivables and made gross payments of $35.8 million under the Receivables
Purchase Agreement.

                                        11
<PAGE>

CHANGES IN CREDIT RATINGS

     On January 2, 2002, the debt rating agency Standard & Poor's lowered its
rating on ACL's Senior Notes to 'D' from single-'B'-minus and ACL's corporate
credit rating to 'SD' from single-'B'-plus and removed both items from
CreditWatch, where they had been placed with negative implications on May 7,
2001. Also on January 2, 2002, the rating on ACL's Senior Credit Facilities was
lowered to single-'B'-plus from double-'B'-minus (on CreditWatch with negative
implications).

     On March 1, 2002, following the announcement of the potential Danielson
Recapitalization, Standard & Poor's reaffirmed its single-'B'-plus rating on
ACL's Senior Credit Facilities and that it remained on CreditWatch with negative
implications. Standard & Poor's also reaffirmed ACL's corporate credit rating of
'SD' and the 'D' rating on the Senior Notes. These rating changes could
adversely affect ACL's liquidity.

NON-CONSOLIDATED ENTITIES

     In 2001, ACL and Vectura invested in a new company named Vessel Leasing.
399 Venture Partners, Inc., the majority owner of ACL, also holds a majority
ownership interest in Vectura Holding Company LLC which holds a majority
ownership interest in Vectura.

     ACL accounts for its 50% ownership in Vessel Leasing by the equity method.
ACL's investment of $6.8 million in Vessel Leasing is included in other assets
on the consolidated statement of financial position. ACL's share of Vessel
Leasing's net loss is $.04 million in 2001 and is included in other income in
the consolidated statement of operations.

     Vessel Leasing's statement of financial position is not consolidated with
ACL. As of December 28, 2001 Vessel Leasing had total assets of $54.9 million
and total liabilities of $45.6 million including public long term debt of $42.6
million (including current portion) and $2.8 million in unearned revenue from
prepaid charter payments made by ACL's domestic barging subsidiary. Vessel
Leasing's long term debt is not guaranteed by ACL or any of ACL's subsidiaries.
ACL's domestic barge operating subsidiary has a long term operating lease
commitment to Vessel Leasing, which is guaranteed by ACL.

     ACL sold new barges for $47.8 million to Vessel Leasing in 2001. Profit on
sales of barges to Vessel Leasing is deferred by Jeffboat and recognized over
the life of the lease. All of these barges, except for those representing a
capital lease commitment of $3.9 million, were leased by Vessel Leasing to ACL
as operating leases which resulted in ACL charter expense of $1.7 million. ACL
also recorded $3.9 million in capital leases with Vessel Leasing in 2001.

     ACL also has fifty percent (50%) ownership interests in UABL and GMS, as
previously described, which are accounted for by the equity method.

                                        12
<PAGE>

CONTRACTUAL AND COMMERCIAL COMMITMENT SUMMARY

     A summary of ACL's contractual commitments under debt and lease agreements
appears below.

                            CONTRACTUAL OBLIGATIONS

<Table>
<Caption>
                                                               PAYMENTS DUE BY YEAR
                                           ------------------------------------------------------------
                                                      LESS THAN     ONE TO       FOUR TO     AFTER FIVE
CONTRACTUAL OBLIGATIONS                     TOTAL     ONE YEAR    THREE YEARS   FIVE YEARS     YEARS
-----------------------                    --------   ---------   -----------   ----------   ----------
                                                              (DOLLARS IN MILLIONS)
<S>                                        <C>        <C>         <C>           <C>          <C>
Long Term Debt...........................  $  608.5    $608.5       $   --        $  --        $   --
Revolving Credit Facility................      84.0      84.0           --           --            --
Capital Lease Obligations................      10.2       1.0          3.0          1.5           4.7
Operating Leases*........................     302.9      45.6        104.4         47.2         105.7
Unconditional Purchase Obligations.......        --        --           --           --            --
Other Long Term Obligations..............        --        --           --           --            --
                                           --------    ------       ------        -----        ------
Total Contractual Cash Obligations.......  $1,005.6    $739.1       $107.4        $48.7        $110.4
                                           ========    ======       ======        =====        ======
</Table>

---------------

* Operating leases having initial or remaining non-cancelable lease terms longer
  than one year.

     A summary of ACL's other commercial commitments appears below.

                             COMMERCIAL COMMITMENTS

<Table>
<Caption>
                                                    AMOUNT OF COMMITMENT EXPIRATION PER YEAR
                                          -------------------------------------------------------------
                                            TOTAL
                                           AMOUNTS    LESS THAN     ONE TO       FOUR TO     AFTER FIVE
OTHER COMMERCIAL COMMITMENTS              COMMITTED   ONE YEAR    THREE YEARS   FIVE YEARS     YEARS
----------------------------              ---------   ---------   -----------   ----------   ----------
                                                              (DOLLAR IN MILLIONS)
<S>                                       <C>         <C>         <C>           <C>          <C>
Lines of Credit.........................       --         --            --          --            --
Standby Letters of Credit...............     16.3        0.9          10.0          --           5.4
Guarantees..............................       --         --            --          --            --
Standby Repurchase Obligations..........       --         --            --          --            --
Other Commercial Commitments............       --         --            --          --            --
                                            -----       ----         -----          --          ----
Total Commercial Commitments............    $16.3       $0.9         $10.0          $--         $5.4
                                            =====       ====         =====          ==          ====
</Table>

     Additional disclosures regarding these obligations and commitments can be
found in notes 4 and 7 to the consolidated financial statements in Item 8.

FUEL HEDGING AND INTEREST RATE CAP

     ACL uses forward purchases of diesel fuel to provide protection against
increases in prices of diesel fuel used to operate ACL's vessels. The forward
purchases are swap agreements whereby ACL locks into a fixed future price at the
time of purchase. Diesel fuel is not delivered under these future purchases.
Instead the swap is settled when due and ACL pays or receives a dollar amount
based on the difference in the fixed future price and the actual price index for
the settlement month.

     The fair value of the net swap is the difference between the future price
of the fuel index as of the date of valuation and the fixed future price
established at the time each individual contract is purchased, multiplied by the
number of gallons purchased. ACL typically enters into one forward contract each
month for gallons associated with freight bookings that have fixed price
commitments with no contract fuel adjustment protection clauses.

                                        13
<PAGE>

     Due to the bankruptcy of Enron Corp., one of the trading partners to the
fuel swap, ACL has expensed the mark-to-market loss of $0.1 million as fuel
expense in the 2001 Consolidated Statement of Operations. Management believes
the other trading partner does not present credit risk to ACL.

                     FAIR VALUE OF CONTRACTS AT PERIOD END

<Table>
<Caption>
                                                              (DOLLARS IN MILLIONS)
<S>                                                           <C>
Fair value of contracts outstanding at the beginning of
  2001......................................................         $ 0.03
Contracts realized or otherwise settled during 2001.........         $(1.30)
Fair value of new contracts when entered into during the
  period....................................................         $ 0.00
Changes in fair value attributable to changes in valuation
  techniques and assumptions................................         $ 0.00
Other changes in fair values................................         $(0.40)
Fair value of contracts outstanding at the end of the
  period....................................................         $(0.40)
</Table>

<Table>
<Caption>
                                                              MATURITY LESS
                                                                THAN ONE
SOURCE OF FAIR VALUE                                              YEAR        TOTAL
--------------------                                          -------------   ------
<S>                                                           <C>             <C>
Prices provided by other external sources...................     $(0.40)      $(0.40)
</Table>

     ACL also has an interest rate cap agreement on a notional amount of $202
million in debt. The agreement expires August 11, 2003 and has a fair value of
$.04 million as of December 28, 2001. The fair value of the cap agreement has
been provided by an external source.

     For additional disclosures regarding non-exchange traded contracts, please
refer to note 9 to the consolidated financial statements included in Item 8.

RELATED PARTY TRANSACTIONS

     ACL has transactions with various related parties, primarily affiliated
entities accounted for by the equity method. ACL believes that the terms and
conditions of those transactions are in the aggregate not materially more
favorable or unfavorable to ACL than would be obtained on an arm's-length basis
among unaffiliated parties.

     In 2001 ACL received $12.0 million from GMS for the sale of terminals and
proceeds from the condemnation of a terminal, resulting in a gain of $1.9
million which is reported in Other Income.

     ACL recorded charter income from UABL of $11.1 million and $2.1 million in
2001 and 2000, respectively. ACL also recorded administrative fee expenses to
UABL of $7.7 million and $1.5 million in 2001 and 2000, respectively. ACL sold
used barges to UABL for $0.8 million in 2001. Charter rates are established at
fair market value based upon similar transactions. As of December 28, 2001 ACL
has recorded $13.4 million in accounts receivable and $8.4 million in other
current liabilities with UABL.

     ACL, through its subsidiary, Jeffboat, sold new barges for $47.8 million to
Vessel Leasing in 2001. Jeffboat recognizes the profit associated with the sales
of barges to Vessel Leasing over the life of the lease. All of these barges
except for $3.9 million were leased by Vessel Leasing to ACL as operating leases
which resulted in ACL charter expense of $1.7 million in 2001. ACL recorded $3.9
million in capital leases with Vessel Leasing in 2001. Charter rates and sales
of barges are established at fair market value based upon similar transactions.

     See also information contained under "Affiliate Agreements" included under
Item 13 in this Annual Report on Form 10-K.

BACKLOG

     ACL's backlog represents firm orders for barge transportation and marine
equipment. The backlog for barge transportation was approximately $760 million
and $1,124 million at December 28, 2001 and

                                        14
<PAGE>

December 29, 2000, respectively. This backlog ranges from one to eight years
with approximately 40% expected to be filled in 2002. The backlog for marine
equipment was approximately $69 million and $24 million at December 28, 2001 and
December 29, 2000, respectively. The backlog for marine equipment is one year
with 100% expected to be filled in 2002.

SEASONALITY

     ACL's business is seasonal, and its quarterly revenues and profits
historically have been lower during the first and second fiscal quarters of the
year (January through June) and higher during the third and fourth fiscal
quarters (July through December) due to the North American grain harvest. In
addition, working capital requirements fluctuate throughout the year. Adverse
market or operating conditions during the last four months of the year could
have a greater effect on ACL's business, financial condition and results of
operations than during other periods.

CHANGES IN ACCOUNTING STANDARDS

     In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards No. 141 "Business Combinations"
("SFAS 141"), which provides that all business combinations should be accounted
for using the purchase method of accounting and establishes criteria for the
initial recognition and measurement of goodwill and other intangible assets
recorded in connection with a business combination. The provisions of SFAS 141
apply to all business combinations initiated after June 30, 2001 and to all
business combinations accounted for by the purchase method that are completed
after June 30, 2001. ACL will apply the provisions of SFAS 141 to any future
business combinations.

     In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 142 "Goodwill and Other Intangible Assets" ("SFAS 142") which establishes
the accounting for goodwill and other intangible assets following their
recognition. SFAS 142 applies to all goodwill and other intangible assets
whether acquired singly, as part of a group, or in a business combination. SFAS
142 provides that goodwill should not be amortized but should be tested for
impairment annually using a fair-value based approach. In addition, SFAS 142
provides that intangible assets other than goodwill should be amortized over
their useful lives and reviewed for impairment in accordance with Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS 121").
SFAS 142 is effective beginning on December 29, 2001. Upon adoption, ACL will be
required to perform a transitional impairment test under SFAS 142 for all
goodwill recorded as of December 29, 2001. Any impairment loss recorded as a
result of completing the transitional impairment test will be treated as a
change in accounting principle. The impact of the adoption of SFAS 142 on ACL's
results of operations for all periods beginning on or after December 29, 2001
will be to eliminate amortization of goodwill. Management of ACL has not
performed a transitional impairment test under SFAS 142 and accordingly cannot
estimate the impact of the adoption of SFAS 142 as of December 29, 2001.

     In October 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("FAS 144"). The Statement addresses financial accounting and reporting
for the impairment or disposal of long-lived assets. This Statement supercedes
SFAS 121, and the accounting and reporting provisions of Accounting Principles
Board Opinion No. 30, Reporting the Results of Operations -- Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions, for the disposal of a segment of
a business (as previously defined in that Opinion). This Statement also amends
Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
eliminate the exception to consolidation for a subsidiary for which control is
likely to be temporary. The objectives of SFAS 144 are to address significant
issues relating to the implementation of SFAS 121 and to develop a single
accounting model, based on the framework established in FAS 121, for long-lived
assets to be disposed of by sale, whether previously held and used or newly
acquired. The Company will adopt FAS 144 in the Company's first quarter 2002.
Management is currently evaluating the impact of FAS 144 on the Company's future
financial reporting.

                                        15
<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     ACL is exposed to certain market risks which are inherent in its financial
instruments and which arise from transactions entered into in the normal course
of business. A discussion of ACL's primary market exposures in financial
instruments is presented below.

FUEL PRICE RISK

     Fuel consumed in 2001 represented approximately 13% of ACL's operating
expenses. Most of ACL's long-term contracts contain clauses under which
increases in fuel costs are passed on to customers thereby reducing the fuel
price risk. In addition, ACL has entered into fuel rate swap agreements for
short-term protection. As a result of ACL's fuel hedging strategy, it might not
fully benefit from certain fuel price declines.

     Based on ACL's 2002 projected fuel consumption, a one cent change in the
average annual price per gallon of fuel would impact ACL's annual operating
income by approximately $0.3 million (compared to the 2001 projection of $0.3
million), after the effect of escalation clauses in long-term contracts and fuel
rate swap agreements in place as of December 28, 2001. As of December 28, 2001,
ACL had hedged approximately 4% of its projected 2002 fuel requirements using
fuel rate swap agreements with an aggregate fair value of $0.4 million. ACL
estimates that at December 28, 2001, a 10% change in the price per gallon of
fuel would have changed the fair value of the existing fuel rate swap contracts
by $0.2 million.

     See ACL's disclosures relating to fuel hedging in "Fuel Hedging and
Interest Rate Cap" included under Item 7 elsewhere in this Annual Report on Form
10-K.

INTEREST RATE AND OTHER RISKS

     At December 28, 2001, ACL had $397.3 million of floating rate debt
outstanding, which represented the outstanding balance of the Senior Credit
Facilities. A 1% change in interest rates would change interest expense by $4.0
million annually.

     On August 11, 2000, ACL entered into an interest rate cap agreement which
limits ACL's base LIBOR to 7.5% on a notional amount of $201.8 million,
corresponding to that amount of floating rate debt outstanding which is based on
LIBOR. The agreement is designed to hedge ACL's exposure to future increases in
market interest rates. As of December 28, 2001 the fair value of the interest
rate cap agreement was $.04 million.

     At December 28, 2001, ACL had sold at a discount based upon commercial
paper rates, $51.0 million of the accounts receivable of two subsidiaries. ACL
has the right to repurchase these receivables. At this amount outstanding, a 1%
change in the commercial paper rates would change other expense by $0.5 million
annually.

FOREIGN CURRENCY EXCHANGE RATE RISKS

     As in 2000, all of ACL's significant transportation contracts in South
America are currently denominated in U.S. dollars. However, many expenses
incurred in the performance of such contracts, such as crew wages and fuel, are,
by necessity, denominated in a foreign currency. Therefore, ACL is affected by
fluctuations in the value of the U.S. dollar as compared to certain foreign
currencies. Additionally, ACL's investments in foreign affiliates subject it to
foreign currency exchange rate and equity price risks. Management does not
consider its exposure to exchange rate risks to be material and considers its
investments in foreign affiliates to be denominated in relatively stable
currencies and of a long-term nature. Accordingly, ACL does not typically manage
its related foreign currency exchange rate and equity price risks through the
use of financial instruments.

                                        16
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

                         AMERICAN COMMERCIAL LINES LLC

                      CONSOLIDATED STATEMENT OF OPERATIONS

<Table>
<Caption>
                                                                       FISCAL YEARS ENDED
                                                          --------------------------------------------
                                                          DECEMBER 28,    DECEMBER 29,    DECEMBER 31,
                                                              2001            2000            1999
                                                          -------------   -------------   ------------
                                                                     (DOLLARS IN THOUSANDS)
                                                          (AS RESTATED)   (AS RESTATED)
<S>                                                       <C>             <C>             <C>
OPERATING REVENUE
  Revenue...............................................    $729,692        $771,749        $739,136
  Revenue from related parties..........................      58,809           2,089              --
                                                            --------        --------        --------
                                                             788,501         773,838         739,136
OPERATING EXPENSE
  Materials, Supplies and Other.........................     341,606         334,872         306,763
  Rent..................................................      56,711          49,463          43,978
  Labor and Fringe Benefits.............................     166,041         163,251         182,225
  Fuel..................................................      93,560          88,094          53,307
  Depreciation and Amortization.........................      55,497          56,014          51,222
  (Gain) Loss on Property Dispositions, Net.............     (16,498)         (1,686)            384
  Taxes, Other Than Income Taxes........................      26,223          27,522          26,665
                                                            --------        --------        --------
                                                             723,140         717,530         664,544
                                                            --------        --------        --------
OPERATING INCOME........................................      65,361          56,308          74,592
OTHER EXPENSE (INCOME)
  Interest Expense......................................      70,932          70,813          71,275
  Other, Net............................................       1,526           4,009          (3,048)
  Gain on Sale of Watercom..............................          --         (11,418)             --
                                                            --------        --------        --------
                                                              72,458          63,404          68,227
                                                            --------        --------        --------
(LOSS) EARNINGS BEFORE INCOME TAXES, EXTRAORDINARY ITEM
  AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE............      (7,097)         (7,096)          6,365
INCOME TAXES............................................         118           4,263           1,658
                                                            --------        --------        --------
(LOSS) EARNINGS BEFORE EXTRAORDINARY ITEM
  AND CUMULATIVE EFFECT OF ACCOUNTING
  CHANGE................................................      (7,215)        (11,359)          4,707
EXTRAORDINARY ITEM -- GAIN/(LOSS) ON EARLY
  EXTINGUISHMENT OF DEBT................................       1,885            (734)             --
CUMULATIVE EFFECT OF ACCOUNTING CHANGE..................        (490)             --          (1,737)
                                                            --------        --------        --------
NET (LOSS) EARNINGS.....................................    $ (5,820)       $(12,093)       $  2,970
                                                            ========        ========        ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                        17
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                      CONSOLIDATED STATEMENT OF CASH FLOWS

<Table>
<Caption>
                                                                      FISCAL YEARS ENDED
                                                        ----------------------------------------------
                                                         DECEMBER 28,     DECEMBER 29,    DECEMBER 31,
                                                             2001             2000            1999
                                                        --------------   --------------   ------------
                                                        (AS RESTATED)    (AS RESTATED)
                                                                    (DOLLARS IN THOUSANDS)
<S>                                                     <C>              <C>              <C>
OPERATING ACTIVITIES
  Net (Loss) Earnings.................................     $ (5,820)        $(12,093)       $  2,970
  Adjustments to Reconcile Net (Loss) Earnings to Net
     Cash Provided by (Used in) Operating Activities:
     Depreciation and Amortization....................       59,910           59,076          54,039
     Impairment of Barges.............................           --            3,865             230
     Gain on Property Dispositions....................      (16,498)          (1,686)            384
     Gain on Sale of Watercom.........................           --          (11,418)             --
     Proceeds from the Initial Sale of Accounts
       Receivable.....................................           --               --          50,000
     Other Operating Activities.......................       (1,735)          (3,621)          1,684
     Changes in Operating Assets and Liabilities:
       Accounts Receivable............................      (12,010)          (2,547)          5,146
       Materials and Supplies.........................       (1,384)          13,890          (3,287)
       Accrued Interest...............................          413           10,557         (14,834)
       Other Current Assets...........................       (4,998)          (3,715)         (2,136)
       Other Current Liabilities......................        6,710          (21,526)            406
                                                           --------         --------        --------
       Net Cash Provided by Operating Activities......       24,588           30,782          94,602
INVESTING ACTIVITIES
  Property Additions..................................      (19,772)         (30,554)        (55,880)
  Purchase of Barging Assets..........................           --          (31,500)             --
  Investment in Vessel Leasing LLC....................       (6,808)              --              --
  Proceeds from Property Dispositions.................       23,918            4,089           2,133
  Proceeds from Sale of Terminals.....................        7,818               --              --
  Proceeds from Property Condemnation.................        2,730               --              --
  Proceeds from Sale of Watercom......................           --           13,600              --
  Proceeds from Sale of Restricted Investments........           --           25,288              --
  Other Investing Activities..........................       (4,594)          (5,115)         (5,409)
                                                           --------         --------        --------
       Net Cash Provided by (Used in) Investing
          Activities..................................        3,292          (24,192)        (59,156)
FINANCING ACTIVITIES
  Short-Term Borrowings...............................       17,250           66,750              --
  Member Distribution.................................           --               --            (541)
  Long-Term Debt Repaid...............................      (47,937)         (54,752)        (53,046)
  Outstanding Checks Net of Deposits..................       (6,670)          10,075           1,029
  Debt Costs..........................................       (3,463)              --              --
  Other Financing.....................................          625               64          (1,403)
                                                           --------         --------        --------
       Net Cash (Used in) Provided by Financing
          Activities..................................      (40,195)          22,137         (53,961)
Net (Decrease) Increase in Cash and Cash
  Equivalents.........................................      (12,315)          28,727         (18,515)
Cash and Cash Equivalents at Beginning of Period......       59,568           30,841          49,356
                                                           --------         --------        --------
       Cash and Cash Equivalents at End of Period.....     $ 47,253         $ 59,568        $ 30,841
                                                           ========         ========        ========
Supplemental Cash Flow Information:
  Interest Paid.......................................     $ 65,504         $ 57,107        $ 84,084
  Income Taxes Paid...................................        1,175            5,685           3,987
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                        18
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                  CONSOLIDATED STATEMENT OF FINANCIAL POSITION

<Table>
<Caption>
                                                               DECEMBER 28,     DECEMBER 29,
                                                                   2001             2000
                                                              --------------   --------------
                                                              (AS RESTATED)    (AS RESTATED)
                                                                  (DOLLARS IN THOUSANDS)
<S>                                                           <C>              <C>
                                           ASSETS
CURRENT ASSETS
  Cash and Cash Equivalents.................................    $  47,253        $  59,568
  Accounts Receivable, Net..................................       41,383           40,717
  Account Receivable -- Related Parties.....................       13,402            2,111
  Materials and Supplies....................................       31,335           29,773
  Other Current Assets......................................       29,633           23,660
                                                                ---------        ---------
     Total Current Assets...................................      163,006          155,829
PROPERTIES-Net..............................................      464,133          509,443
PENSION ASSET...............................................       26,067           24,512
OTHER ASSETS................................................      104,730           97,754
                                                                ---------        ---------
          Total Assets......................................    $ 757,936        $ 787,538
                                                                =========        =========

                                         LIABILITIES
CURRENT LIABILITIES
  Accounts Payable..........................................    $  29,737        $  29,730
  Accrued Payroll and Fringe Benefits.......................       17,206           14,003
  Deferred Revenue..........................................       11,890           12,011
  Accrued Claims and Insurance Premiums.....................       24,200           21,047
  Accrued Interest..........................................       18,659           18,246
  Short-Term Debt...........................................       84,000           66,750
  Current Portion of Long-Term Debt.........................      608,519           44,579
  Other Current Liabilities.................................       42,072           55,360
  Other Current Liabilities -- Related Parties..............        8,397            1,457
                                                                ---------        ---------
          Total Current Liabilities.........................      844,680          263,183
LONG-TERM DEBT..............................................           --          613,476
PENSION LIABILITY...........................................       18,907           21,389
OTHER LONG-TERM LIABILITIES.................................       42,368           32,108
                                                                ---------        ---------
          Total Liabilities.................................      905,955          930,156
                                                                ---------        ---------

                                      MEMBER'S DEFICIT
Member's Interest...........................................      220,074          220,074
Other Capital...............................................      166,580          163,799
Retained Deficit............................................     (532,816)        (526,007)
Accumulated Other Comprehensive Loss........................       (1,857)            (484)
                                                                ---------        ---------
          Total Member's Deficit............................     (148,019)        (142,618)
                                                                ---------        ---------
          Total Liabilities and Member's Deficit............    $ 757,936        $ 787,538
                                                                =========        =========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                        19
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   CONSOLIDATED STATEMENT OF MEMBER'S DEFICIT

<Table>
<Caption>
                                                                           ACCUMULATED
                                                             RETAINED         OTHER
                                       MEMBER'S    OTHER     EARNINGS     COMPREHENSIVE
                                       INTEREST   CAPITAL    (DEFICIT)   EARNINGS (LOSS)     TOTAL
                                       --------   --------   ---------   ---------------   ---------
                                                          (DOLLARS IN THOUSANDS)
<S>                                    <C>        <C>        <C>         <C>               <C>
Balance at December 25, 1998.........  $220,047   $161,051   $(511,493)      $    --       $(130,395)
Comprehensive Income:
  Net earnings.......................        --         --       2,970                         2,970
  Foreign Currency Translation.......        --                     --          (337)           (337)
                                       --------   --------   ---------       -------       ---------
          Total Comprehensive
            Income...................        --                  2,970          (337)          2,633
Contribution of capital by CSX.......        --      1,054          --            --           1,054
Other................................        --         --      (4,850)           --          (4,850)
Issuance of membership interests.....        27         --          --            --              27
Cash distribution to partners........        --         --        (541)           --            (541)
                                       --------   --------   ---------       -------       ---------
Balance at December 31, 1999.........   220,074    162,105    (513,914)         (337)       (132,072)
Comprehensive Loss:
  Net loss (as restated).............        --         --     (12,093)           --         (12,093)
  Foreign Currency Translation.......        --                     --          (147)           (147)
                                       --------   --------   ---------       -------       ---------
          Total Comprehensive Loss
            (as restated)............        --                (12,093)         (147)        (12,240)
Contribution of capital by CSX.......        --      1,694          --            --           1,694
                                       --------   --------   ---------       -------       ---------
Balance at December 29, 2000 (as
  restated)..........................   220,074    163,799    (526,007)         (484)       (142,618)
Cumulative Effect of Accounting
  Change as of December 30, 2000.....        --                     --          (300)           (300)
Comprehensive Loss:
  Net loss (as restated).............        --         --      (5,820)           --          (5,820)
  Net loss on fuel swaps designated
     as cash flow hedging
     instruments.....................        --                     --          (271)           (271)
  Net loss on interest rate swaps
     designated as cash flow hedging
     instruments.....................        --                     --          (747)           (747)
  Foreign Currency Translation.......        --                     --           (55)            (55)
                                       --------   --------   ---------       -------       ---------
          Total Comprehensive Loss
            (as restated)............        --                 (5,820)       (1,073)         (6,893)
Contribution of capital by CSX.......        --      2,781          --            --           2,781
Consolidation of ACL Funding Corp....        --         --        (989)           --            (989)
                                       --------   --------   ---------       -------       ---------
Balance at December 28, 2001 (as
  restated)..........................  $220,074   $166,580   $(532,816)      $(1,857)      $(148,019)
                                       ========   ========   =========       =======       =========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                        20
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES

  NATURE OF OPERATIONS

     The operations of American Commercial Lines LLC ("ACL") (formerly American
Commercial Lines, Inc. which was converted to a limited liability company in the
second quarter of 1998) include barge transportation together with related
terminal, marine construction and repair along inland waterways. Barge
transportation services include the movement of steel and other bulk products,
grain, coal, and liquids in the United States and South America and account for
the majority of ACL's revenues. Marine construction, repair and terminal
services are provided to customers in marine transportation and other related
industries in the United States. ACL has long term contracts with some
customers.

     ACL was a wholly-owned subsidiary of CSX Corporation ("CSX") until June 30,
1998. On June 30, 1998 ACL's parent, American Commercial Lines Holdings LLC (the
"Parent") completed a recapitalization in a series of transactions in which the
barge business of Vectura Group, Inc. (now Vectura Group LLC, "Vectura") and its
subsidiaries ("NMI" or the "NMI Contribution") were combined with that of ACL.

  PRINCIPLES OF CONSOLIDATION

     The Consolidated Financial Statements reflect the results of operations,
cash flows and financial position of ACL and its majority-owned subsidiaries as
a single entity. All significant intercompany accounts and transactions have
been eliminated. Investments in companies that are not majority-owned are
accounted for under the equity method.

  FISCAL YEAR

     ACL follows an annual fiscal reporting period, which ends on the last
Friday in December. The consolidated financial statements presented are for the
fiscal years ended December 28, 2001 and December 29, 2000 and December 31,
1999.

  USE OF ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. ACL's
significant estimates include barge transportation revenue and expense
recognition, the carrying values and estimated useful lives of fixed assets,
allowances for doubtful accounts, insurance reserves, employee benefit plan
liabilities and others.

  CASH AND CASH EQUIVALENTS

     Cash and cash equivalents include short-term investments with a maturity of
less than three months when purchased. ACL has from time to time, cash in banks
in excess of federally insured limits.

                                        21
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  ACCOUNTS RECEIVABLE

     Accounts Receivable, Net consist of the following:

<Table>
<Caption>
                                                               2001      2000
                                                              -------   -------
<S>                                                           <C>       <C>
Accounts Receivable.........................................  $43,014   $26,542
Note Receivable -- ACLF (See Note 3)........................       --    15,332
Allowance for Doubtful Accounts.............................   (1,631)   (1,157)
                                                              -------   -------
                                                              $41,383   $40,717
                                                              =======   =======
</Table>

     ACL maintains an allowance for doubtful accounts based upon the expected
collectibility of accounts receivable.

  MATERIALS AND SUPPLIES

     Materials and Supplies are carried at the lower of cost (average) or market
and consist of the following:

<Table>
<Caption>
                                                               2001      2000
                                                              -------   -------
<S>                                                           <C>       <C>
Raw Materials...............................................  $ 3,633   $ 2,805
Work in Process.............................................   13,029     9,764
Parts and Supplies..........................................   14,673    17,204
                                                              -------   -------
                                                              $31,335   $29,773
                                                              =======   =======
</Table>

  PROPERTIES

     Properties, at cost, consist of the following:

<Table>
<Caption>
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Land........................................................  $ 11,066   $ 12,813
Buildings and Improvements..................................    36,130     42,721
Equipment...................................................   789,567    800,041
                                                              --------   --------
                                                               836,763    855,575
Less Accumulated Depreciation...............................   372,630    346,132
                                                              --------   --------
                                                              $464,133   $509,443
                                                              ========   ========
</Table>

     Provisions for depreciation of properties are based on the estimated useful
service lives computed on the straight-line method. Buildings and improvements
are depreciated from 15 to 45 years. Equipment is depreciated from 5 to 42
years. Depreciation expense was $52,100 in 2001, $53,457 in 2000 and $49,779 in
1999.

     In the fourth quarter 2001, ACL changed the useful life of towboats from 30
to 42 years, which reduced the loss before extraordinary items and net loss by
$1,142 for the year ended December 28, 2001. This change in accounting estimate
was based on additional information about the useful life of the towboat fleet.

     Properties and other long-lived assets are reviewed for impairment whenever
events or business conditions indicate the carrying amount of such assets may
not be fully recoverable. Initial assessments of recoverability are based on
estimates of undiscounted future net cash flows associated with an asset or a
group of assets. Where impairment is indicated, the assets are evaluated for
sale or other disposition, and their carrying

                                        22
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amount is reduced to fair value based on discounted net cash flows or other
estimates of fair value. There were no fixed asset impairment losses in 2001.
Fixed asset impairment losses of $3,865 and $230 were recorded in 2000 and 1999
respectively in Materials, Supplies and Other on the Consolidated Statement of
Operations. These losses affect the barging segment.

  GLOBAL MATERIALS SERVICES LLC

     ACL's ownership interest in Global Materials Services LLC ("GMS"), a joint
venture between American Commercial Terminals LLC ("ACT") a wholly owned
subsidiary of ACL, and Mid-South Terminal Company, L.P., or unaffiliated third
party, was 50% at December 28, 2001 and December 29, 2000. ACL accounts for this
investment by the equity method. ACL's investment in GMS at December 28, 2001
and December 29, 2000 of $10,208 and $9,124 respectively, is included in other
assets on the consolidated statement of financial position. Earnings related to
ACL's investment in GMS for the year ended December 28, 2001 and December 29,
2000 were $1,015 and $1,138, respectively, and are included in other income in
the consolidated statement of operations. During 2001, ACL contributed $1,200 in
cash to GMS. Other comprehensive loss related to ACL's investment in GMS for the
year ended December 28, 2001 and December 29, 2000 was $1,131 and $329,
respectively, related to interest rate swaps and foreign currency translation.

  UABL LIMITED

     On October 24, 2000, ACL contributed certain assets at book value to UABL
Limited ("UABL"), an Argentine company. ACL accounts for its 50% ownership in
UABL by the equity method. ACL's investment in UABL of $49,892 at December 28,
2001 and $49,686 at December 29, 2000, is included in other assets on the
consolidated statement of financial position. ACL's loss (net of minority
interest) of $2,960 and $1,440 for the years ended December 28, 2001 and
December 29, 2000, respectively, are included in other income in the
consolidated statement of operations. In 2001, ACL made additional investments
in UABL of $4,069.

  VESSEL LEASING LLC

     In 2001 ACL and Vectura invested in a new company named Vessel Leasing LLC
("Vessel Leasing"). 399 Venture Partners, Inc., the majority owner of ACL, also
holds a majority ownership interest in Vectura Holding Company LLC which holds a
majority ownership interest in Vectura.

     ACL accounts for its 50% ownership in Vessel Leasing by the equity method.
ACL's investment of $6,808 in Vessel Leasing is included in other assets on the
consolidated statement of financial position. ACL's share of Vessel Leasing's
net loss is $38 in 2001 and is included in other income in the consolidated
statement of operations. Vessel Leasing's statement of financial position is not
consolidated with ACL. As of December 28, 2001 Vessel Leasing had total assets
of $54,921 and total liabilities of $45,571 including public long term debt of
$42,580 (including current portion) and $2,830 in unearned revenue from prepaid
charter payments made by ACL's domestic barging subsidiary. Vessel Leasing's
long term debt is not guaranteed by ACL or any of ACL's subsidiaries. ACL's
domestic barge operating subsidiary has a long term operating lease commitment
to Vessel Leasing, which is guaranteed by ACL.

     ACL sold new barges for $47,757 to Vessel Leasing in 2001. Profit on sales
of barges to Vessel Leasing is deferred by Jeffboat and recognized over the life
of the lease. All of these barges, except for those representing a capital lease
commitment of $3,924 were leased by Vessel Leasing to ACL as operating leases
which resulted in ACL charter expense of $1,705. ACL also recorded $3,924 in
capital leases with Vessel Leasing in 2001.

                                        23
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  DEBT AMORTIZATION

     ACL amortizes debt costs over the term of the debt. Amortization expense
was $4,413 in 2001, $2,801 in 2000 and $2,802 in 1999 and is included in
interest expense.

  REVENUE RECOGNITION

     Barge transportation revenue is recognized proportionately as shipments
move from origin to destination. The position of shipments is determined by boat
position tracking through use of a global positioning system. This method
results in a better matching of revenue and expense. Terminal, repair and other
revenue is recognized as services are provided. Marine construction revenue and
related expense is primarily recognized on the completed-contract method, due to
the short-term nature of contracts. Revenue from sale/leaseback transactions is
deferred in other liabilities and recognized over the life of the lease.

  SECOND INJURY FUND

     ACL recognized $1,737 in non-cash expense related to a workers compensation
second injury fund in accordance with adoption of the American Institute of
Certified Public Accountants (AICPA) Statement of Position (SOP) 97-3,
"Accounting by Insurance and Other Enterprises for Insurance-Related
Assessments" in the first quarter of 1999.

  RECLASSIFICATION

     Certain prior year amounts have been reclassified to conform to the current
year presentation.

NOTE 2.  PURCHASES AND DISPOSITIONS

     In 2001, ACL sold five towboats, a shipyard in Harahan, Louisiana, a
cleaning facility in Baton Rouge, Louisiana and other assets to meet the
requirements of the Senior Debt Facility amendments described in Note 4. This
resulted in a gain of $16,762 which is reported in gain on property dispositions
in the consolidated statement of operations.

     On May 25, 2001, ACL entered into an agreement to sell substantially all of
the terminals of ACT, other than its coal transfer facility at St. Louis,
Missouri and its tank storage facility at Memphis, Tennessee. The sale of seven
terminals was completed on May 25, 2001. An additional terminal site in Omaha,
Nebraska was transferred on June 29, 2001. Subsequent to June 29, 2001,
additional proceeds were received from the condemnation of Omaha Terminal. ACL
recorded a gain from these transactions of $1,886 in Other Income.

     On May 26, 2000, ACL purchased certain barging assets of the Peavey Barge
Line ("Peavey") from ConAgra, Inc. for $31,500 in cash. The purchase price was
financed with existing credit facilities and cash flows from operations. ACL
also assumed $3,800 in capital leases.

     ACL sold its 100% membership interest in Waterway Communications System LLC
("Watercom") on September 6, 2000 to Mobex Communications, Inc. ("Mobex") for
$13,600 in cash and $2,400 in Mobex preferred stock. The sale resulted in a gain
of $11,418. Cash proceeds were used to pay existing ACL debt.

NOTE 3.  ACCOUNTS RECEIVABLE SECURITIZATION

     At December 28, 2001 and December 29, 2000 ACL had $51,000 and $56,000,
respectively, outstanding under the accounts receivable securitization facility
agreement and had $22,603 and $15,332, respectively, of net residual interest in
the securitized receivables which is included in Accounts Receivable, Net in
ACL's consolidated financial statements. The fair value of the net residual
interest is measured at the time of the sale and is based on the sale of similar
assets. In 2001, ACL received gross proceeds of $30,800 from the sale of
receivables and made gross payments of $35,800 under this Agreement.
                                        24
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     PNC Bank, National Association ("PNC"), as Administrator under ACL's
receivables facility with PNC (the "Receivables Purchase Agreement"), asserted
that ACL was in default under the Receivables Purchase Agreement. ACL and PNC
entered into a waiver of the Receivables Purchase Agreement on February 11, 2002
(the "RPA Waiver") and a modification to that waiver on February 25, 2002 (the
"RPA Waiver"). The RPA Waiver has the effect of waiving the default asserted by
PNC, provided that ACL enters into certain definitive agreements with Danielson
relating to the Danielson Recapitalization and refinances the Receivables
Purchase Agreement on or before April 30, 2002. The RPA Waiver also requires ACL
to reduce its overall borrowings under the facility to no more than $50.0
million. A default under the Receivables Purchase Agreement or the RPA Waiver
could have a material adverse effect on ACL's liquidity.

     In September 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishment of Liabilities" ("SFAS
140"). The Statement is effective for transfers and servicing of financial
assets and extinguishments of liabilities occurring after March 31, 2001. ACL
adopted FAS 140 on April 1, 2001. The adoption required the consolidation of ACL
Funding Corp. ("ACLF"), a wholly-owned subsidiary, that was previously treated
as a non-consolidated Qualified Special Purpose Entity. The consolidation
resulted in a charge to Retained Earnings of $989 in the second quarter 2001.

NOTE 4.  DEBT

     Debt consists of the following:

<Table>
<Caption>
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Revolving Credit Facility...................................  $ 84,000   $ 66,750
$235 million Term Loan......................................   169,378    191,001
$200 million Term Loan......................................   143,951    162,328
$300 million Senior Notes...................................   295,000    300,000
Other Notes.................................................       190      4,726
                                                              --------   --------
                                                               692,519    724,805
Less, short-term debt.......................................    84,000     66,750
Less, current portion long-term debt........................   608,519     44,579
                                                              --------   --------
                                                              $    0.0   $613,476
                                                              ========   ========
</Table>

     ACL has a Revolving Credit Facility, which provides for revolving loans and
letters of credit not to exceed the aggregate principal amount of $100,000,
maturing in June, 2005, but each loan must be repaid within one year. The
Revolving Credit Facility bears an interest rate equal to LIBOR plus a margin
based on ACL's performance. Borrowings on the facility at December 28, 2001 and
December 29, 2000 were $84,000 and $66,750, respectively, with interest rates of
5.75% to 7.5% at December 28, 2001 and 8.75% at December 29, 2000. The borrowing
base was reduced by outstanding letters of credit of $16,260 and $17,857 at
December 28, 2001 and December 29, 2000, respectively.

     The $235,000 Term Loan matures in 2001 through 2007. The $200,000 Term Loan
matures in 2001 through 2006. The two Term Loans bear interest at a rate equal
to LIBOR plus a margin based on ACL's performance. The interest rate at December
28, 2001 was 6.3125% for the $235,000 and 6.0625% for the $200,000 term loans.
Interest on the Term Loans is payable quarterly. The Senior Notes require no
principal payments until maturity in 2008 and have a fixed interest rate of
10.25%. Interest is payable semi-annually. The Term Loans and Revolving Credit
Facility are collateralized by most of ACL's assets. The Senior Notes are not
collateralized. ACL has Other Notes totaling $190 which mature in 2002 with
rates of 6.75% and 4.9%.

                                        25
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Term Loans, Revolving Credit Facility and Senior Notes contain a number
of covenants, including specified financial ratios. As of December 28, 2000 ACL
failed to meet the leverage ratio and the coverage ratio covenants as defined in
the Senior Credit Facility ("Amendment No. 5"). ACL entered into an agreement to
amend the covenants in the Senior Credit Facility. Under the terms of the
amendment, ACL sold $40,000 in certain identified assets and used the proceeds
to repay the Term Loans in 2001. ACL also purchased $5,000 par value of ACL
Senior Notes at a discount in 2001 which resulted in a gain of $1,885 in 2001
from the early extinguishment of debt and is reported as an extraordinary item
in the consolidated statement of operations. ACL also repaid $4,937 in Other
Notes in 2001.

     Following December 31, 2001, the covenant requirements reverted to those
specified in the original Senior Credit Facilities which are more restrictive
than the amended covenants. Certain covenants added by Amendment No. 5 also
become more restrictive. Due in part to reduced EBITDA as a result of the
closure of the upper Mississippi River because of flooding during the second
quarter of 2001, it is not likely that the Company will be able to meet these
covenant requirements in 2002, absent an additional amendment to the Senior
Credit Facilities and the consummation of the Danielson Recapitalization
discussed below. Failure to meet these covenants could have a material adverse
effect on the Company.

     On December 31, 2001, ACL elected not to pay the interest due (the "Bond
Interest Payment") on its Senior Notes due to ongoing negotiations with its
lenders and noteholders regarding the restructuring of ACL's bank and bond debt.
Following the thirty (30) day grace period provided by the Indenture, ACL again
elected not to make the Bond Interest Payment. This election not to pay the Bond
Interest Payment is an event of default under the Indenture, however, certain
Noteholders party thereto entered into forebearance agreements with ACL agreeing
not to accelerate the debt or take additional adverse actions against ACL.
Acceleration of the debt under the Indenture would have a material adverse
effect on ACL's liquidity. Further, as a result of ACL's failure to make the
Bond Interest Payment, J.P. Morgan Chase & Co. ("J.P. Morgan") delivered a
notice to ACL in January 2002 asserting that ACL was in default of the Credit
Agreement. Certain lenders party to the Credit Agreement also entered into
forebearance agreements with ACL, agreeing not to accelerate the debt or take
additional adverse actions against ACL. An acceleration of the debt under the
Credit Agreement would have a material adverse effect on ACL's liquidity.

     In accordance with these facts and circumstances, ACL has reclassified the
outstanding obligations under the Indenture and the Credit Agreement from long
term to current.

     ACL has been pursuing strategic financial restructuring alternatives. On
March 15, 2002, ACL entered into a definitive recapitalization agreement (the
"Recapitalization Agreement") regarding the acquisition and recapitalization of
ACL (the "Danielson Recapitalization") by Danielson Holding Corporation
("Danielson"). Under the terms of the Danielson Recapitalization, Danielson
would acquire 100% of the membership interests of the Parent. ACL's present
indirect preferred equity holders would receive $7,000 in cash. ACL management
will receive approximately $1,695 of restricted Danielson common stock. In
addition, Danielson will deliver $25,000 in cash and approximately $58,493 of
ACL's existing Series B 10 1/4% Senior Notes due June 2008 (the "Senior Notes")
issued pursuant to an indenture dated as of June 30, 1998 with the United States
Trust Company of New York (the "Indenture"), to ACL Holdings in connection with
the transaction. Danielson currently expects to fund the acquisition through a
rights offering to its existing security holders, upon terms and conditions to
be determined. However, consummation of the Recapitalization Agreement is not
conditioned on the successful completion of the rights offering.

     The Danielson Recapitalization will result in a reduction of ACL's senior
secured bank debt incurred under the Senior Credit Facilities and the
restructuring of the Senior Notes pursuant to an exchange offer and consent
solicitation in which $236,507 of the existing Senior Notes (all notes held by
parties other than Danielson) would be exchanged for $120,000 of new 11 1/4%
senior notes due January 1, 2008 ("New Senior Notes") and approximately $116,507
of new 12% pay-in-kind senior subordinated notes due July 1, 2008 ("PIK Notes").
Senior Notes held by Danielson would be retired in conjunction with the
Danielson
                                        26
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Recapitalization. ACL would also issue additional New Senior Notes in an
aggregate principal amount equal to the accrued and unpaid interest on its
existing Senior Notes, other than those held by Danielson, through the effective
date of the transaction up to $20,000, and to the extent that such accrued and
unpaid interest exceeds $20,000, additional PIK Notes in an amount equal to such
excess would be issued.

     The Recapitalization Agreement provides that the exchange offer and consent
solicitation will be made in reliance on a registration exemption provided by
Section 3(a)(9) under the Securities Act of 1933, conditioned on the minimum
participation of 95% of the outstanding principal amount of ACL's outstanding
Senior Notes, as to which noteholders holding more than two-thirds of the
outstanding principal amount of such notes have agreed to tender. In the event
that the exchange offer and consent solicitation is not consummated by June 15,
2002, the Recapitalization Agreement provides for the implementation of the
Danielson Recapitalization through a voluntary prepackaged bankruptcy plan under
Chapter 11 of the Bankruptcy Code, as to which noteholders holding more than
two-thirds of the outstanding principal amount of ACL's outstanding Senior Notes
have agreed to accept.

     In order to assist in the consummation of the Danielson Recapitalization,
ACL has received forbearance agreements from its senior secured lenders pending
the negotiation and execution of definitive documentation relating to the
amendment of ACL's Senior Credit Facilities satisfactory to the parties.

     In June 1998, ACL deposited $26,128 into an escrow fund which, together
with future income earned on such amount, was used to repay $24,400 principal of
the Terminal Revenue Refunding Bonds ("Revenue Bonds") plus redemption premium
and interest in 2000. The redemption premium of $734 was reported as an
extraordinary item in the consolidated statement of operations.

     Long-term debt due in the next five years under the revised Term Loan
agreement, the Senior Notes and Other Notes is $608,519 in 2002, and $0
thereafter.

NOTE 5.  INCOME TAXES

     ACL and its subsidiaries (except for ACL Capital Corp., American Commercial
Lines Funding Corporation and the foreign subsidiaries) are organized as limited
liability companies. As such, ACL passes through its U.S. federal and
substantially all of its state (but not foreign) taxable income to its members
who are responsible for income taxes on such taxable income.

     Components of income tax expense (benefit) follow:

<Table>
<Caption>
                                                              2001    2000     1999
                                                              ----   ------   ------
<S>                                                           <C>    <C>      <C>
Currently payable:
  State.....................................................  $ 24   $   37   $  (27)
  Foreign...................................................    94    4,226    1,685
                                                              ----   ------   ------
                                                              $118   $4,263   $1,658
                                                              ====   ======   ======
</Table>

     Income tax computed at federal statutory rates reconciled to income tax
expense (benefit) follows:

<Table>
<Caption>
                                                              2001    2000     1999
                                                              ----   ------   ------
<S>                                                           <C>    <C>      <C>
State Income Taxes, Net.....................................  $ 24   $   37   $  (27)
Foreign Operations, Net.....................................    94    4,226    1,685
                                                              ----   ------   ------
     Total Income Tax Expense...............................  $118   $4,263   $1,658
                                                              ====   ======   ======
</Table>

                                        27
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 6.  EMPLOYEE BENEFIT PLANS

     ACL sponsors or participates in defined benefit plans covering both
salaried and hourly employees. The plans provide for eligible employees to
receive benefits based on years of service and either compensation rates near
retirement or at a predetermined multiplier factor. Contributions to the plans
are sufficient to meet the minimum funding standards set forth in the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended. Plan assets
consist primarily of common stocks, corporate bonds and cash and cash
equivalents.

     As of January 31, 2000, the accrued benefit obligation under the American
Commercial Lines LLC Pension Plan ("ACL Pension Plan") was frozen. The past
service benefit obligation is complemented by a new prospective annual benefit
obligation. This change affects salaried employees covered by the ACL Pension
Plan and resulted in cost savings to ACL in 2001 and 2000. In 1999 the National
Marine Pension Plan was merged into the ACL Pension Plan.

     In addition to the defined benefit pension and related plans, ACL has a
defined benefit post-retirement plan covering most full-time employees. The plan
provides medical benefits and is contributory, with retiree contributions
adjusted annually, and contains other cost-sharing features such as deductibles
and coinsurance. The accounting for the health care plan anticipates future
cost-sharing changes to the written plan that are consistent with ACL's
expressed intent to increase the retiree contribution rate annually.

     A summary of the pension and post-retirement plan components at September
30 (valuation date) follows:

<Table>
<Caption>
                                              PENSION BENEFITS     POST-RETIREMENT PLAN
                                             -------------------   ---------------------
                                               2001       2000       2001        2000
                                             --------   --------   ---------   ---------
<S>                                          <C>        <C>        <C>         <C>
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation, beginning of year......  $(84,050)  $(97,480)  $(11,161)   $(10,319)
Service cost...............................    (3,818)    (3,783)      (399)       (380)
Interest cost..............................    (6,408)    (6,092)      (826)       (807)
Plan participants' contributions...........        --         --       (261)       (206)
Amendments.................................        --     18,657         --          --
Actuarial (loss) gain......................        --         --     (1,176)       (480)
Liability gain (loss)......................    (2,913)       574         --          --
Benefits paid..............................     4,253      4,074      1,411       1,031
                                             --------   --------   --------    --------
Benefit obligation, end of year............  $(92,936)  $(84,050)  $(12,412)   $(11,161)
                                             ========   ========   ========    ========
CHANGE IN PLAN ASSETS:
Fair value of plan assets at beginning of
  year.....................................  $118,305   $114,446   $     --    $     --
Actual return on plan assets...............    (1,100)     7,919         --          --
Employer contribution......................        12         14      1,150         825
Plan participants' contributions...........        --         --        261         206
Benefits paid..............................    (4,253)    (4,074)    (1,411)     (1,031)
                                             --------   --------   --------    --------
Fair value of plan assets at end of year...  $112,964   $118,305   $     --    $     --
                                             ========   ========   ========    ========
</Table>

                                        28
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                              PENSION BENEFITS     POST-RETIREMENT PLAN
                                             -------------------   ---------------------
                                               2001       2000       2001        2000
                                             --------   --------   ---------   ---------
<S>                                          <C>        <C>        <C>         <C>
FUNDED STATUS:
Funded status..............................  $ 20,027   $ 34,255   $(12,412)   $(11,161)
Unrecognized net actuarial loss (gain).....     7,193     (8,929)    (3,499)     (4,946)
Unrecognized prior service cost............   (21,094)   (23,110)    (1,153)     (1,441)
Net claims during 4th quarter..............         4         --        407         196
                                             --------   --------   --------    --------
Prepaid (accrued) benefit cost.............  $  6,130   $  2,216   $(16,657)   $(17,352)
                                             ========   ========   ========    ========
AMOUNTS RECOGNIZED IN THE CONSOLIDATED
  STATEMENT OF FINANCIAL POSITION CONSIST
  OF:
Prepaid benefit cost.......................  $ 26,067   $ 24,512   $     --    $     --
Accrued benefit liability..................   (20,108)   (22,614)   (16,657)    (17,352)
Other......................................       171        318         --          --
                                             --------   --------   --------    --------
Net amount recognized......................  $  6,130   $  2,216   $(16,657)   $(17,352)
                                             ========   ========   ========    ========
</Table>

     As of December 28, 2001, the American Commercial Vessel and Terminal
Employees' Pension Plan (the "ACV&T Plan") had an accumulated benefit obligation
of $10,181 and a fair value of assets of $9,277. With the merger of the ACV&T
Plan into the ACL Pension Plan on December 31, 2001, the fair value of the
assets of the combined plans exceeds the accumulated benefit obligations related
thereto.

  COMPONENTS OF NET PERIODIC BENEFIT COST:

<Table>
<Caption>
                                               PENSION PLANS            POST-RETIREMENT PLAN
                                       ------------------------------   ---------------------
                                         2001       2000       1999     2001    2000    1999
                                       --------   --------   --------   -----   -----   -----
<S>                                    <C>        <C>        <C>        <C>     <C>     <C>
Service cost.........................  $  3,818   $  3,783   $  6,682   $ 399   $ 380   $ 633
Interest cost........................     6,408      6,092      6,898     826     807     767
Expected return on plan assets.......   (11,937)   (11,169)   (10,093)     --      --      --
Transition obligation amortization...        --       (957)    (1,237)     --      --      --
Amortization of prior service
  costs..............................    (2,015)    (1,875)      (609)   (288)   (288)     --
(Gain)/loss Amortization.............      (172)      (220)       167    (348)     --      --
Recognized net actuarial gain........        --         --         --      --    (418)   (575)
                                       --------   --------   --------   -----   -----   -----
Net periodic benefit cost............  $ (3,898)  $ (4,346)  $  1,808   $ 589   $ 481   $ 825
                                       ========   ========   ========   =====   =====   =====
  WEIGHTED-AVERAGE ASSUMPTIONS AS OF SEPTEMBER 30:
Discount rate........................      7.50%      7.75%      7.75%   7.75%   7.50%   6.75%
Expected return on plan assets.......     10.00%     10.00%     10.00%     NA      NA      NA
Rate of compensation increase........      4.00%      4.00%      5.00%     NA      NA      NA
</Table>

     The net post-retirement benefit obligation was determined using the
assumption that the health care cost trend rate for retirees was 8.0% for
2000-2001, decreasing gradually to a 5.5% trend rate by 2008 and remaining at
that level thereafter. A 1% increase in the assumed health care cost trend rate
would have increased the accumulated post-retirement benefit obligation as of
December 28, 2001 by $875 and the aggregate of the service and interest cost
components of net periodic post-retirement benefit expense for 2001 by $125. A
1% decrease in the assumed health care cost trend rate would have decreased the
accumulated

                                        29
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

post-retirement obligation as of December 28, 2001 by $750 and the aggregate of
the service and interest cost components of net periodic post-retirement benefit
expense for 2001 by $105.

     ACL also sponsors certain contributory defined contribution plans covering
eligible employee groups. Contributions to such plans are based upon a
percentage of employee contributions and were $1,471, $1,456 and $2,028 in 2001,
2000 and 1999, respectively.

     Certain employees are covered by union-sponsored, collectively-bargained,
multi-employer defined benefit pension plans. Contributions to such plans, which
are based upon union contracts, were approximately $74, $84 and $76 in 2001,
2000 and 1999, respectively.

NOTE 7.  LEASE OBLIGATIONS

     ACL leases buildings, data processing hardware and operating equipment
under various operating leases and charter agreements, which expire from 2001 to
2017 and which generally have renewal options at similar terms. Certain vessel
leases also contain purchase options at prices approximating fair value of the
leased vessels. Rental expense under continuing obligations was approximately
$56,711 in 2001, $49,463 in 2000 and $43,978 in 1999.

     At December 28, 2001, ACL's operating leases with initial or remaining
noncancelable lease terms longer than one year and capital leases were as
follows:

<Table>
<Caption>
                                                                                          2007
                                       2002      2003      2004      2005      2006     AND AFTER
                                      -------   -------   -------   -------   -------   ---------
<S>                                   <C>       <C>       <C>       <C>       <C>       <C>
Operating Lease Obligations:
  Operating Leases..................   40,735    33,003    28,905    26,891    19,732     94,199
  Operating Leases -- Related
     Parties........................    4,849     5,378     5,317     4,930     4,930     33,984
                                      -------   -------   -------   -------   -------    -------
                                       45,584    38,381    34,222    31,821    24,662    128,183

Future Capital lease Obligations:
  Capital Leases....................      557       460       460       460       460        192
  Capital Leases -- Related
     Parties........................      432       586       568       455       455      5,087
                                      -------   -------   -------   -------   -------    -------
                                          989     1,046     1,028       915       915      5,279
</Table>

     ACL entered into capital leases of $3,924 and $6,163 in 2001 and 2000,
respectively. The 2001 capital lease was with a related party. ACL incurred
interest expense related to capital leases of $235 in 2001 and $112 in 2000.

     The total future minimum lease payments under capital leases of $10,172
less an interest amount of $4,245 results in a present value of net minimum
lease payments of $5,927.

NOTE 8.  RELATED PARTIES

     Prior to July 1, 1998, ACL was a wholly-owned subsidiary of CSX. ACL had a
new equipment charter with a CSX subsidiary and recorded expense of $1,070 in
1999 until the charter was bought out in 1999 for $2,419.

     In 2001 ACL received $11,969 from GMS for the sale of terminals and
proceeds from the condemnation of a terminal. ACL recognized a gain of $1,886
from these transactions.

     ACL recorded charter income from UABL of $11,052 and $2,089 in 2001 and
2000, respectively. ACL also recorded administrative fee expenses to UABL of
$7,709 and $1,457 in 2001 and 2000, respectively. ACL

                                        30
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

sold used barges to UABL for $790 in 2001. At December 28, 2001 ACL had
receivables of $13,402 and payables of $8,397 with UABL.

     In 2001, ACL and Vectura Group invested in Vessel Leasing; 399 Venture
Partners, Inc., the majority owner of ACL, also holds a majority ownership
interest in Vectura Holding Company LLC which holds a majority ownership
interest in Vectura Group.

     ACL accounts for its 50% ownership in Vessel Leasing by the equity method.
ACL's investment of $6,808 in Vessel Leasing is included in other assets on the
consolidated statement of financial position. ACL's share of Vessel Leasing's
net loss is $38 in 2001 and is included in other income in the consolidated
statement of operations.

     Vessel Leasing's statement of financial position is not consolidated with
ACL. As of December 28, 2001 Vessel Leasing had total assets of $54,921 and
total liabilities of $45,571 including public long term debt of $42,580
(including current portion) and $2,830 in unearned revenue from prepaid charter
payments made by ACL's domestic barging subsidiary. Vessel Leasing's long term
debt is not guaranteed by ACL or any of ACL's subsidiaries. ACL's domestic barge
operating subsidiary has a long term operating lease commitment to Vessel
Leasing, which is guaranteed by ACL.

     ACL sold new barges for $47,757 to Vessel Leasing in 2001. Profit on sales
of barges to Vessel Leasing is deferred by Jeffboat and recognized over the life
of the lease. All of these barges, except for those representing a capital lease
commitment of $3,924 million, were leased by Vessel Leasing to ACL as operating
leases which resulted in ACL charter expense of $1,705. ACL also recorded $3,924
in capital leases with Vessel Leasing in 2001.

NOTE 9.  FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

     The carrying amounts and fair values of ACL's financial instruments are as
follows:

<Table>
<Caption>
                                                     2001                    2000
                                             ---------------------   ---------------------
                                             CARRYING                CARRYING
                                              AMOUNT    FAIR VALUE    AMOUNT    FAIR VALUE
                                             --------   ----------   --------   ----------
<S>                                          <C>        <C>          <C>        <C>
ASSETS:
Interest Rate Cap..........................  $     37    $     37    $    688    $    198
LIABILITIES:
Revolving Credit Facility..................  $ 84,000    $ 84,000    $ 66,750    $ 66,750
$235 million Term Loan.....................   169,378     169,378     191,001     191,001
$200 million Term Loan.....................   143,951     143,951     162,328     162,328
$300 million Senior Notes..................   295,000     147,500     300,000     229,500
Other Notes................................       190         187       4,726       4,735
Net unrealized (loss) gain on fuel hedge
  agreements...............................      (242)       (242)         --          29
</Table>

     The fair values of the Interest Rate Cap and Senior Notes payable are based
on quoted market values. The carrying values of the Term Loans, all of which
bear interest at floating rates, approximate their fair values. The fair value
of the Other Notes have been estimated using discounted cash flow analyses based
on ACL's current incremental borrowing rates for similar types of borrowing
arrangements.

  FUEL PRICE RISK MANAGEMENT

     ACL uses forward purchases to provide short-term protection against a sharp
increase in diesel fuel prices. These instruments generally cover a portion of
the company's forecasted diesel fuel needs for towboat

                                        31
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

operations over the next one to twelve months. ACL accounts for the forward fuel
purchases as cash flow hedges. In accordance with Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"), such financial instruments are marked-to-market with
the offset to other comprehensive income and then subsequently recognized as a
component of fuel expense when the underlying fuel being hedged is used. ACL
adopted SFAS 133 at the beginning of the first quarter of 2001.

     At December 28, 2001, ACL had forward fuel purchase contracts outstanding
with an aggregate notional value of approximately $2,806, and a fair value of
approximately $242 (loss), which has been recorded in other current liabilities
with the offset to other comprehensive earnings for $242 (loss) and an
additional fair value of $131 (loss) which has been recorded as other current
liabilities with the offset to fuel expense in the consolidated statement of
operations. The $242 loss will be recognized in earnings within the next ten
months. Under these agreements, ACL will pay fixed prices ranging from $0.51 to
$0.86 per gallon. There were 4.4 million gallons remaining on the contracts at
December 28, 2001. The agreements terminate October 31, 2002. Due to the
bankruptcy of Enron, one of the trading partners, ACL believes the hedge is no
longer effective and has expensed the mark-to-market loss of $131 as fuel
expense in the 2001 consolidated statement of operations. Management believes
that the other trading partner does not present a credit risk to ACL.

  INTEREST RATE RISK MANAGEMENT

     ACL entered into an interest rate cap agreement in the third quarter of
2000 to reduce the impact of potential rate increases on floating rate debt. The
interest rate cap has a notional amount of $202,000 and a fair value of $37 as
of December 28, 2001 and is effective through August 11, 2003. The Company
accounts for the interest rate cap as a cash flow hedge whereby the fair value
of the interest rate cap is reflected as an asset or liability in the
accompanying consolidated statement of financial position. The cap rate (hedging
instrument) is the same interest rate index as the base interest rate for the
floating rate debt (hedged item). When the interest rate index exceeds the
interest rate cap, a portion of the change in fair value of the instrument
represents a change in intrinsic value which is an effective hedge. This portion
of the change in value will be recorded as other comprehensive income. The
remaining change in fair value of $162 in 2001 is recorded as other expense
(income) on the consolidated statement of operations.

     ACL also records changes to other assets on the accompanying consolidated
statement of financial position, with the offset recorded as comprehensive
income (loss), for changes in the fair value of interest rate swap agreements
entered into by GMS, ACL recognized a comprehensive loss of $747 for its share
of these swaps in 2001.

NOTE 10.  CONTINGENCIES

     A number of legal actions are pending against ACL in which claims are made
in substantial amounts. While the ultimate results of pending litigation cannot
be predicted with certainty, management does not currently expect that
resolution of these matters will have a material adverse effect on the
consolidated results of operations, financial position and cash flows.

NOTE 11.  BUSINESS SEGMENTS

     ACL has two reportable business segments -- barging and construction. ACL's
barging segment includes barge transportation operations in North and South
America and domestic fleeting facilities that provide fleeting, shifting,
cleaning and repair services at various locations along the inland waterways.
The construction segment constructs marine equipment for ACL's domestic and
international fleets as well as external customers.

                                        32
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Management evaluates performance based on segment earnings, which is
defined as operating income before income taxes. The accounting policies of the
reportable segments are consistent with those described in the summary of
significant accounting policies. Intercompany sales are transferred at cost.

     Reportable segments are business units that offer different products or
services. The reportable segments are managed separately because they provide
distinct products and services to internal and external customers.

<Table>
<Caption>
                                               REPORTABLE SEGMENTS
                                             -----------------------    ALL OTHER
                                             BARGING    CONSTRUCTION   SEGMENTS(1)    TOTAL
                                             --------   ------------   -----------   --------
<S>                                          <C>        <C>            <C>           <C>
YEAR ENDED DECEMBER 28, 2001
Revenues from external customers...........  $675,697     $102,862       $ 9,942     $788,501
Intersegment revenues......................        --        1,563             4        1,567
Depreciation expense.......................    48,595        2,125         1,380       52,100
Segment earnings...........................    58,956        4,713         1,692       65,361
Segment assets.............................   672,057       59,676        26,203      757,936
Property Additions (Excluding $5,811 in
  capital leases, and related
  expenditures)............................    16,879        2,094           799       19,772

YEAR ENDED DECEMBER 29, 2000
Revenues from external customers...........  $631,748     $124,068       $18,022     $773,838
Intersegment revenues......................        --        2,917         4,308        7,225
Depreciation expense.......................    48,833        2,011         2,613       53,457
Segment earnings...........................    44,243        8,318         3,747       56,308
Segment assets.............................   698,446       52,704        36,388      787,538
Property Additions* (Excluding $6,163 in
  capital leases)..........................    48,005        1,922           934       50,861

YEAR ENDED DECEMBER 31, 1999
Revenues from external customers...........  $593,939     $124,423       $20,774     $739,136
Intersegment revenues......................        --       20,442         5,174       25,616
Depreciation expense.......................    44,787        1,911         3,081       49,779
Segment earnings...........................    57,670       12,387         4,535       74,592
Segment assets.............................   646,613       60,990        68,493      776,096
Property Additions.........................    52,387        1,790         1,703       55,880
</Table>

---------------

  * Barging includes $20,307 of purchased Barging Assets.

(1) Financial data for segments below the reporting thresholds are attributable
    to two operating segments -- a segment operating terminals along the U.S.
    inland waterways and a segment providing voice and data communications to
    marine companies operating on the U.S. inland waterways. The segment
    providing voice and data communications was sold in 2000.

                                        33
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following is a reconciliation of ACL's revenues from external customers
and segment earnings to ACL's consolidated totals.

<Table>
<Caption>
                                                         2001       2000       1999
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
REVENUES
Revenues from external customers.....................  $788,501   $773,838   $739,136
Intersegment revenues................................     1,567      7,225     25,616
Elimination of intersegment revenues.................    (1,567)    (7,225)   (25,616)
                                                       --------   --------   --------
Operating revenue....................................  $788,501   $773,838   $739,136
                                                       ========   ========   ========
EARNINGS
Total segment earnings...............................  $ 65,361   $ 56,308   $ 74,592
Unallocated amounts:
  Interest expense...................................   (70,932)   (70,813)   (71,275)
  Other, net.........................................    (1,526)    (4,009)     3,048
  Gain on Sale of Watercom...........................        --     11,418         --
                                                       --------   --------   --------
(Loss) Earnings before income taxes, extraordinary
  item and cumulative effect of accounting change....  $ (7,097)  $ (7,096)  $  6,365
                                                       ========   ========   ========
</Table>

  GEOGRAPHIC INFORMATION

<Table>
<Caption>
                                                     REVENUES               PROPERTIES -- NET
                                          ------------------------------   -------------------
                                            2001       2000       1999       2001       2000
                                          --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
United States...........................  $748,837   $733,870   $699,072   $422,877   $469,714
South America...........................    39,664     39,968     40,064     41,256     39,729
                                          --------   --------   --------   --------   --------
Total...................................  $788,501   $773,838   $739,136   $464,133   $509,443
                                          ========   ========   ========   ========   ========
</Table>

     Revenues are attributed to countries based on the location of the service
provided. Properties represent the only long lived assets of ACL.

  MAJOR CUSTOMER

     Revenues from one customer of the barging segment represented approximately
15% in 2001, 14% in 2000 and 14% in 1999 of ACL's consolidated revenues.

NOTE 12.  RESTATEMENT

     The 2001 and 2000 consolidated financial statements have been restated to
properly reflect minority interest. An inadvertent error occurred when operating
losses, attributable to ACBL Hidrovias Ltd. ("ACBLH"), the ACL 80% owned
subsidiary which holds ACL's ownership interest in the marine transportation
operation on the Parana/Paraguay River system in South America, were assigned to
minority interests in excess of their original capital contributions. While
these excess losses will be deducted from any income which may arise and be
assigned to minority interests in the future, there is no current obligation on

                                        34
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

behalf of the minority interests to fund these losses. Accordingly the 2001 and
2000 financial statements were restated as follows:

<Table>
<Caption>
                                           2001      AS RESTATED             2000      AS RESTATED
                                         ---------   -----------           ---------   -----------
<S>                                      <C>         <C>           <C>     <C>         <C>
STATEMENT OF OPERATIONS
Operating Revenue......................  $ 788,501    $ 788,501            $ 773,838    $ 773,838
Operating Income.......................     65,361       65,361               56,308       56,308
Other, Net Expense (Income)............       (591)       1,526                1,050        4,009
(Loss) Earnings Before Extraordinary
  Item and Cumulative Effect of
  Accounting Change....................     (5,098)      (7,215)              (8,400)     (11,359)
Net (Loss) Earnings....................     (3,703)      (5,820)              (9,134)     (12,093)

STATEMENT OF FINANCIAL POSITION
Other Long Term Liabilities............     37,292       42,368               29,149       32,108
Total Liabilities......................    900,879      905,955              927,197      930,156
Retained Deficit.......................   (527,740)    (532,816)            (523,048)    (526,007)
Total Members Deficit..................   (142,943)    (148,019)            (139,659)    (142,618)

STATEMENT OF CASH FLOWS
Net (Loss) Earnings....................     (3,703)      (5,820)              (9,134)     (12,093)
Other Operating Activities.............     (3,852)      (1,735)              (6,580)      (3,621)
</Table>

NOTE 13.  RESTATEMENT OF QUARTERLY DATA (UNAUDITED)

     As discussed in Note 12, the 2001 and 2000 consolidated financial
statements have been restated. The effects of the restatement on quarterly data
is summarized below.

<Table>
<Caption>
                                                           2001 (AS RESTATED)
                                          ----------------------------------------------------
QUARTERLY DATA (UNAUDITED)                  1ST        2ND        3RD        4TH       TOTAL
--------------------------                --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
Operating Revenue.......................  $173,098   $192,884   $207,341   $215,178   $788,501
Operating Income........................   (10,434)    17,194     24,164     34,437     65,361
(Loss) Earnings Before Extraordinary
  Item and Cumulative Effect of
  Accounting Change.....................   (29,922)      (147)     5,204     17,650     (7,215)
Net (Loss) Earnings.....................   (30,412)     1,738      5,204     17,650     (5,820)
</Table>

<Table>
<Caption>
                                                     2001 (AS PREVIOUSLY REPORTED)
                                          ----------------------------------------------------
                                            1ST        2ND        3RD        4TH       TOTAL
                                          --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
Operating Revenue.......................  $173,098   $192,884   $207,341   $215,178   $788,501
Operating (Loss) Income.................   (10,434)    17,194     24,164     34,437     65,361
(Loss) Earnings Before Extraordinary
  Item and Cumulative Effect............   (29,618)       142      5,690     18,688     (5,098)
Net (Loss) Earnings.....................   (30,108)     2,027      5,690     18,688     (3,703)
</Table>

                                        35
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                           2000 (AS RESTATED)
                                          ----------------------------------------------------
QUARTERLY DATA (UNAUDITED)                  1ST        2ND        3RD        4TH       TOTAL
--------------------------                --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
Operating Revenue.......................  $167,477   $193,458   $205,738   $207,165   $773,838
Operating Income........................     7,971     16,122     18,217     13,998     56,308
(Loss) Earnings Before Extraordinary
  Item..................................    (8,727)    (2,558)     7,780     (7,854)   (11,359)
Net (Loss) Earnings.....................    (8,727)    (3,292)     7,780     (7,854)   (12,093)
</Table>

<Table>
<Caption>
                                                     2000 (AS PREVIOUSLY REPORTED)
                                          ----------------------------------------------------
                                            1ST        2ND        3RD        4TH       TOTAL
                                          --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
Operating Revenue.......................  $167,477   $193,458   $205,738   $207,165   $773,838
Operating Income........................     7,971     16,122     18,217     13,998     56,308
(Loss) Earnings Before Extraordinary
  Item..................................    (8,097)    (2,116)     8,432     (6,619)    (8,400)
Net (Loss) Earnings.....................    (8,097)    (2,850)     8,432     (6,619)    (9,134)
</Table>

<Table>
<Caption>
                                                                  1999
                                          ----------------------------------------------------
                                            1ST        2ND        3RD        4TH       TOTAL
                                          --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
Operating Revenue.......................  $173,217   $189,961   $188,617   $187,341   $739,136
Operating Income........................     4,316     19,955     22,480     27,841     74,592
(Loss) Earnings Before Cumulative Effect
  of Accounting Change..................   (12,810)     2,788      5,240      9,489      4,707
Net (Loss) Earnings.....................   (14,547)     2,788      5,240      9,489      2,970
</Table>

     ACL's business is seasonal, and its quarterly revenues and profits
historically are lower during the first and second fiscal quarters of the year
(January through June) and higher during the third and fourth fiscal quarters
(July through December) due to the North American grain harvest.

     A loss of $490 was recorded in the first quarter of 2001 as the cumulative
effect of adopting SFAS 133. An extraordinary gain of $1,885 was recorded in the
second quarter of 2001 relating to the retirement of Senior Notes. In the fourth
quarter 2001, the estimated useful life of boats was changed from 30 to 42
years. This resulted in $1,142 less depreciation for the quarter. The year 2000
included a second quarter extraordinary item charge of $734 for the Terminal
Bond redemption premium, the gain on the sale of Watercom of $11,418 is included
in the third quarter and an impairment loss of $3,865 is included in the fourth
quarter. The first quarter of 1999 includes a non-cash charge of $1,737 for the
workers' compensation second-injury funds due to the adoption of Statement of
Position (SOP) 97-3.

NOTE 14.  CHANGES IN ACCOUNTING STANDARDS

     In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 141, "Business Combinations" ("SFAS 141"), which provides that all business
combinations should be accounted for using the purchase method of accounting and
establishes criteria for the initial recognition and measurement of goodwill and
other intangible assets recorded in connection with a business combination. The
provisions of SFAS 141 apply to all business combinations initiated after June
30, 2001. ACL will apply the provisions of SFAS 141 to any future business
combinations.

     In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which establishes
the accounting for goodwill and other intangible assets following their
recognition. SFAS 142 applies to all goodwill and other intangible assets
whether acquired singly, as part of a group, or in a business combination. SFAS
142 provides that goodwill should not be amortized but should be tested for
impairment annually using a fair-value based approach.

                                        36
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In addition, SFAS 142 provides that other intangible assets other than
goodwill should be amortized over their useful lives and reviewed for impairment
in accordance with Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets to be Disposed Of" ("SFAS
121"). SFAS 142 is effective beginning on December 29, 2001. Upon adoption, ACL
will be required to perform a transitional impairment test under SFAS 142 for
all goodwill recorded as of December 29, 2001. Any impairment loss recorded as a
result of completing the transitional impairment test will be treated as a
change in accounting principle. The impact of the adoption of SFAS 142 on ACL's
results of operations for all periods beginning on or after December 29, 2001
will be to eliminate amortization of goodwill. Management of ACL has not
performed a transitional impairment test under SFAS 142 and accordingly cannot
estimate the impact of the adoption SFAS 142 as of December 29, 2001.

     In October 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("SFAS 144"). The Statement addresses financial accounting and reporting
for the impairment or disposal of long-lived assets. This Statement supersedes
SFAS 121, and the accounting and reporting provisions of Accounting Principles
Board Opinion No. 30, Reporting the Results of Operations -- Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions, for the disposal of a segment of
business (as previously defined in that Opinion). This statement also amends
Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
eliminate the exception to consolidation for a subsidiary for which control is
likely to be temporary. The objectives of SFAS 144 are to address significant
issues relating to the implementation of SFAS 121 and to develop a single
accounting model, based on the framework established in SFAS 121, for long-lived
assets to be disposed of by sale, whether previously held and used or newly
acquired. ACL will adopt SFAS 144 in ACL's first quarter 2002. Management is
currently evaluating the impact of SFAS 144 on ACL's future financial reporting.

NOTE 15.  SUMMARIZED FINANCIAL INFORMATION FOR SIGNIFICANT
50-PERCENT-OR-LESS-OWNED PERSONS

<Table>
<Caption>
                                                              DECEMBER 31,   DECEMBER 31,
                                                                  2001           2000
                                                              ------------   ------------
<S>                                                           <C>            <C>
Current assets..............................................     36,931         21,624
Noncurrent assets...........................................    149,593        130,508
Current liabilities.........................................     43,400         18,882
Noncurrent liabilities......................................     55,593         43,791
</Table>

<Table>
<Caption>
                                                                         YEARS ENDED
                                                          ------------------------------------------
                                                          DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                              2001           2000           1999
                                                          ------------   ------------   ------------
<S>                                                       <C>            <C>            <C>
Revenue.................................................    103,364         52,430         37,102
Operating income (loss).................................      3,117          3,830          6,205
(Loss) earnings before extraordinary item...............     (4,990)        (1,173)         2,896
     and cumulative effect of accounting................         --             --             --
     change.............................................         --             --             --
Net (loss) earnings.....................................     (4,990)        (1,173)         2,896
</Table>

NOTE 16.  GUARANTOR FINANCIAL STATEMENTS

     The $735,000 of debt issued by ACL and a revolving credit facility, which
provides for revolving loans and the issuance of letters of credit in an
aggregate amount up to $100,000, are guaranteed by ACL's wholly-owned domestic
subsidiaries, other than ACL Capital Corp. (which was formed in connection with
the transaction), any Accounts Receivable Subsidiary (as defined in the
Indentures with respect to such debt)

                                        37
<PAGE>
                         AMERICAN COMMERCIAL LINES LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and certain subsidiaries of ACL without substantial assets or operations
(collectively the "Guarantor Subsidiaries"). Such guarantees are full,
unconditional and joint and several. Separate financial statements of the
Guarantor Subsidiaries are not presented because management has determined that
they would not be material to investors. The following supplemental financial
information sets forth on a combined basis, combining statements of financial
position, statements of earnings and statements of cash flows for the Guarantor
Subsidiaries, non-guarantor subsidiaries and for ACL as of December 28, 2001 and
December 29, 2000 and for the fiscal years ended December 28, 2001, December 29,
2000 and December 31, 1999.

                                        38
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     COMBINING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 28, 2001
                                 (AS RESTATED)

<Table>
<Caption>
                                                  GUARANTOR        OTHER                      COMBINED
                                                 SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS    TOTALS
                                                 ------------   ------------   ------------   --------
                                                                (DOLLARS IN THOUSANDS)
<S>                                              <C>            <C>            <C>            <C>
OPERATING REVENUE
  Revenue......................................    $701,081       $28,611        $    --      $729,692
  Revenue from related parties.................      47,757        11,052             --        58,809
                                                   --------       -------        -------      --------
                                                    748,838        39,663             --       788,501
OPERATING EXPENSE
  Materials, Supplies and Other................     319,093        22,513             --       341,606
  Rent.........................................      55,191         1,520             --        56,711
  Labor and Fringe Benefits....................     161,606         4,435             --       166,041
  Fuel.........................................      92,991           569             --        93,560
  Depreciation and Amortization................      50,364         5,133             --        55,497
  Gain on Property Dispositions, Net...........     (16,498)           --             --       (16,498)
  Taxes, Other Than Income Taxes...............      26,166            57             --        26,223
                                                   --------       -------        -------      --------
                                                    688,913        34,227             --       723,140
                                                   --------       -------        -------      --------
OPERATING INCOME...............................      59,925         5,436             --        65,361

OTHER EXPENSE (INCOME)
  Interest Expense.............................      70,932            --             --        70,932
  Interest Expense, Affiliate -- Net...........          --         6,364         (6,364)           --
  Other, Net...................................      (8,328)        3,490          6,364         1,526
                                                   --------       -------        -------      --------
                                                     62,604         9,854             --        72,458
                                                   --------       -------        -------      --------
LOSS BEFORE INCOME TAXES, EXTRAORDINARY ITEM
  AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE...      (2,679)       (4,418)            --        (7,097)
INCOME TAXES...................................         (21)          139             --           118
                                                   --------       -------        -------      --------
LOSS BEFORE EXTRAORDINARY ITEM AND CUMULATIVE
  EFFECT OF ACCOUNTING CHANGE..................      (2,658)       (4,557)            --        (7,215)
EXTRAORDINARY ITEM -- GAIN ON EARLY
  EXTINGUISHMENT OF DEBT.......................       1,885            --             --         1,885
CUMULATIVE EFFECT OF ACCOUNTING CHANGE.........        (490)           --             --          (490)
                                                   --------       -------        -------      --------
NET LOSS.......................................    $ (1,263)      $(4,557)       $    --      $ (5,820)
                                                   ========       =======        =======      ========
</Table>

                                        39
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     COMBINING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 29, 2000
                                 (AS RESTATED)

<Table>
<Caption>
                                                  GUARANTOR        OTHER                      COMBINED
                                                 SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS    TOTALS
                                                 ------------   ------------   ------------   --------
                                                                (DOLLARS IN THOUSANDS)
<S>                                              <C>            <C>            <C>            <C>
OPERATING REVENUE
  Revenue......................................    $733,870       $ 37,879       $    --      $771,749
  Revenue from related parties.................          --          2,089            --         2,089
                                                   --------       --------       -------      --------
                                                    733,870         39,968            --       773,838

OPERATING EXPENSE
  Materials, Supplies and Other................     315,275         19,597            --       334,872
  Rent.........................................      48,033          1,430            --        49,463
  Labor and Fringe Benefits....................     155,903          7,348            --       163,251
  Fuel.........................................      85,159          2,935            --        88,094
  Depreciation and Amortization................      49,104          6,910            --        56,014
  Gain on Property Dispositions, Net...........      (1,686)            --            --        (1,686)
  Taxes, Other Than Income Taxes...............      26,425          1,097            --        27,522
                                                   --------       --------       -------      --------
                                                    678,213         39,317            --       717,530
                                                   --------       --------       -------      --------
OPERATING INCOME (LOSS)........................      55,657            651            --        56,308

OTHER EXPENSE (INCOME)
  Interest Expense.............................      70,813             --            --        70,813
  Interest Expense, Affiliate -- Net...........          --          6,029        (6,029)           --
  Other, Net...................................      (4,745)         2,725         6,029         4,009
  Gain on Sale of Watercom.....................     (11,418)            --            --       (11,418)
                                                   --------       --------       -------      --------
                                                     54,650          8,754            --        63,404
                                                   --------       --------       -------      --------
EARNINGS (LOSS) BEFORE INCOME TAXES AND
  EXTRAORDINARY ITEM...........................       1,007         (8,103)           --        (7,096)
INCOME TAXES...................................         176          4,087            --         4,263
                                                   --------       --------       -------      --------
EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM......         831        (12,190)           --       (11,359)
EXTRAORDINARY ITEM -- LOSS ON EARLY
  EXTINGUISHMENT OF DEBT.......................        (734)            --            --          (734)
                                                   --------       --------       -------      --------
NET EARNINGS (LOSS)............................    $     97       $(12,190)      $    --      $(12,093)
                                                   ========       ========       =======      ========
</Table>

                                        40
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     COMBINING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999

<Table>
<Caption>
                                                  GUARANTOR        OTHER                      COMBINED
                                                 SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS    TOTALS
                                                 ------------   ------------   ------------   --------
                                                                (DOLLARS IN THOUSANDS)
<S>                                              <C>            <C>            <C>            <C>
OPERATING REVENUE..............................    $699,072       $40,064        $    --      $739,136
OPERATING EXPENSE
  Materials, Supplies and Other................     287,980        18,783             --       306,763
  Rent.........................................      41,232         2,746             --        43,978
  Labor and Fringe Benefits....................     172,728         9,497             --       182,225
  Fuel.........................................      50,782         2,525             --        53,307
  Depreciation and Amortization................      45,066         6,156             --        51,222
  Loss on Property Dispositions, Net...........         384            --             --           384
  Taxes, Other Than Income Taxes...............      25,910           755             --        26,665
                                                   --------       -------        -------      --------
                                                    624,082        40,462             --       664,544
                                                   --------       -------        -------      --------
OPERATING INCOME (LOSS)........................      74,990          (398)            --        74,592
OTHER EXPENSE (INCOME)
  Interest Expense.............................      71,275            --             --        71,275
  Interest Expense, Affiliate -- Net...........          --         4,861         (4,861)           --
  Other, Net...................................      (7,005)         (904)         4,861        (3,048)
                                                   --------       -------        -------      --------
                                                     64,270         3,957             --        68,227
                                                   --------       -------        -------      --------
EARNINGS (LOSS) BEFORE INCOME TAXES............      10,720        (4,355)            --         6,365
INCOME TAXES...................................         694           964             --         1,658
                                                   --------       -------        -------      --------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
  ACCOUNTING CHANGE............................      10,026        (5,319)            --         4,707
CUMULATIVE EFFECT OF ACCOUNTING CHANGE.........      (1,737)           --             --        (1,737)
                                                   --------       -------        -------      --------
NET EARNINGS (LOSS)............................    $  8,289       $(5,319)       $    --      $  2,970
                                                   ========       =======        =======      ========
</Table>

                                        41
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 28, 2001
                                 (AS RESTATED)

<Table>
<Caption>
                                                  GUARANTOR        OTHER                      COMBINED
                                                 SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS    TOTALS
                                                 ------------   ------------   ------------   --------
                                                                (DOLLARS IN THOUSANDS)
<S>                                              <C>            <C>            <C>            <C>
OPERATING ACTIVITIES
  Net Loss.....................................    $ (1,263)      $ (4,557)      $    --      $ (5,820)
  Adjustments to Reconcile Net Loss to Net Cash
     Provided by (Used in) Operating
     Activities:
     Depreciation and Amortization.............      54,777          5,133            --        59,910
     Gain on Property Dispositions.............     (16,498)            --            --       (16,498)
     Other Operating Activities................      (6,753)         5,018            --        (1,735)
     Changes in Operating Assets and
       Liabilities:
       Accounts Receivable.....................       6,349        (32,340)       13,981       (12,010)
       Materials and Supplies..................      (1,119)          (265)           --        (1,384)
       Accrued Interest........................         413             --            --           413
       Other Current Assets....................     (14,648)         9,650            --        (4,998)
       Other Current Liabilities...............     (11,859)        18,569            --         6,710
                                                   --------       --------       -------      --------
       Net Cash Provided by Operating
          Activities...........................       9,399          1,208        13,981        24,588
INVESTING ACTIVITIES
  Property Additions...........................     (13,165)        (6,607)           --       (19,772)
  Investment in Vessel Leasing LLC.............      (6,808)            --            --        (6,808)
  Proceeds from Property Dispositions..........      23,918             --            --        23,918
  Proceeds from Sale of Terminals..............       7,818             --            --         7,818
  Proceeds from Property Condemnation..........       2,730             --            --         2,730
  Other Investing Activities...................      (9,055)         1,846         2,615        (4,594)
                                                   --------       --------       -------      --------
       Net Cash Provided by (Used in) Investing
          Activities...........................       5,438         (4,761)        2,615         3,292
FINANCING ACTIVITIES
  Short-Term Borrowings........................      17,250             --            --        17,250
  Long-Term Debt Repaid........................     (47,937)            --            --       (47,937)
  Borrowing from Affiliates....................          --            567          (567)           --
  Affiliate Debt Repaid........................          --           (567)          567            --
  Outstanding Checks Net of Deposits...........      (6,670)            --            --        (6,670)
  Debt Costs...................................      (3,463)            --            --        (3,463)
  Cash Dividends Paid..........................          --         (1,000)        1,000            --
  Other Financing..............................         625          3,615        (3,615)          625
                                                   --------       --------       -------      --------
       Net Cash (Used in) Provided by Financing
          Activities...........................     (40,195)         2,615        (2,615)      (40,195)
Net Decrease in Cash and Cash Equivalents......     (25,358)          (938)       13,981       (12,315)
Cash and Cash Equivalents at Beginning of
  Period.......................................      57,289          2,279            --        59,568
                                                   --------       --------       -------      --------
       Cash and Cash Equivalents at End of
          Period...............................    $ 31,931       $  1,341       $13,981      $ 47,253
                                                   ========       ========       =======      ========
</Table>

                                        42
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 29, 2000
                                 (AS RESTATED)

<Table>
<Caption>
                                                  GUARANTOR        OTHER                      COMBINED
                                                 SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS    TOTALS
                                                 ------------   ------------   ------------   --------
                                                                (DOLLARS IN THOUSANDS)
<S>                                              <C>            <C>            <C>            <C>
OPERATING ACTIVITIES
  Net Earnings (Loss)..........................    $     97       $(12,190)      $     --     $(12,093)
  Adjustments to Reconcile Net Earnings (Loss)
     to Net Cash Provided by (Used in)
     Operating Activities:
     Depreciation and Amortization.............      52,167          6,909             --       59,076
     Impairment of Barges......................       3,865             --             --        3,865
     Gain on Sale of Watercom..................     (11,418)            --             --      (11,418)
     Other Operating Activities................      (4,320)           699             --       (3,621)
     Changes in Operating Assets and
       Liabilities:
       Accounts Receivable.....................       4,925         (7,472)            --       (2,547)
       Materials and Supplies..................      12,469           (265)            --       12,204
       Accrued Interest........................      10,557             --             --       10,557
       Other Current Assets....................      (6,939)         3,224             --       (3,715)
       Other Current Liabilities...............     (23,612)         2,086             --      (21,526)
                                                   --------       --------       --------     --------
       Net Cash Provided by (Used in) Operating
          Activities...........................      37,791         (7,009)            --       30,782
INVESTING ACTIVITIES
  Property Additions...........................     (27,817)        (2,737)            --      (30,554)
  Purchase of Barging Assets...................     (31,500)            --             --      (31,500)
  Proceeds from Property Dispositions..........       4,089             --             --        4,089
  Proceeds from Sale of Watercom...............      13,600             --             --       13,600
  Proceeds from Sale of Restricted
     Investments...............................      25,288             --             --       25,288
  Other Investing Activities...................     (15,537)        (1,536)        11,958       (5,115)
                                                   --------       --------       --------     --------
       Net Cash Used in Investing Activities...     (31,877)        (4,273)        11,958      (24,192)
FINANCING ACTIVITIES
  Short-Term Borrowings........................      66,750             --             --       66,750
  Short-Term Debt Issued.......................     (54,752)            --             --      (54,752)
  Short-Term Debt Repaid.......................          --             --             --           --
  Affiliate Debt Repaid........................          --        (12,560)        12,560           --
  Cash Dividends Paid..........................          --         (3,160)         3,160           --
  Other Financing..............................      10,139          1,694         (1,694)      10,139
  Borrowing from Affiliates....................          --         25,984        (25,984)          --
                                                   --------       --------       --------     --------
       Net Cash Provided by Financing
          Activities...........................      22,137         11,958        (11,958)      22,137
Net Increase in Cash and Cash Equivalents......      28,051            676             --       28,727
Cash and Cash Equivalents at Beginning of
  Period.......................................      29,238          1,603             --       30,841
                                                   --------       --------       --------     --------
       Cash and Cash Equivalents at End of
          Period...............................    $ 57,289       $  2,279       $     --     $ 59,568
                                                   ========       ========       ========     ========
</Table>

                                        43
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1999

<Table>
<Caption>
                                                  GUARANTOR        OTHER                      COMBINED
                                                 SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS    TOTALS
                                                 ------------   ------------   ------------   --------
                                                                (DOLLARS IN THOUSANDS)
<S>                                              <C>            <C>            <C>            <C>
OPERATING ACTIVITIES
  Net Earnings (Loss)..........................    $  8,289       $ (5,319)      $     --     $  2,970
  Adjustments to Reconcile Net Earnings (Loss)
     to Net Cash Provided by Operating
     Activities:
     Depreciation and Amortization.............      47,883          6,156             --       54,039
     Impairment of Barges......................         230             --             --          230
     Proceeds from the initial sale of accounts
       receivable..............................      50,000             --             --       50,000
     Other Operating Activities................       3,723         (2,039)            --        1,684
     Changes in Operating Assets and
       Liabilities:
       Accounts Receivable.....................      (1,983)         7,129             --        5,146
       Materials and Supplies..................      (3,092)           189             --       (2,903)
       Accrued Interest........................     (14,834)            --             --      (14,834)
       Other Current Assets....................      10,890        (13,026)            --       (2,136)
       Other Current Liabilities...............       3,934         (3,528)            --          406
                                                   --------       --------       --------     --------
       Net Cash Provided by (Used in) Operating
          Activities...........................     105,040        (10,438)            --       94,602
INVESTING ACTIVITIES
  Property Additions...........................     (46,564)        (9,316)            --      (55,880)
  Proceeds from Property Dispositions..........       2,111             22             --        2,133
  Other Investing Activities...................     (21,442)           279         15,754       (5,409)
                                                   --------       --------       --------     --------
       Net Cash Used in Investing Activities...     (65,895)        (9,015)        15,754      (59,156)
FINANCING ACTIVITIES
  Partner Distribution.........................        (541)            --             --         (541)
  Long-Term Debt Repaid........................     (53,046)          (155)           155      (53,046)
  Cash Dividends Paid..........................          --         (6,700)         6,700           --
  Other Financing Activities...................        (374)           189           (189)        (374)
  Borrowing from Affiliates....................          --         22,420        (22,420)          --
                                                   --------       --------       --------     --------
       Net Cash (Used in) Provided by Financial
          Activities...........................     (53,961)        15,754        (15,754)     (53,961)
Net Decrease in Cash and Cash Equivalents......     (14,816)        (3,699)            --      (18,515)
Cash and Cash Equivalents at Beginning of
  Period.......................................      44,054          5,302             --       49,356
                                                   --------       --------       --------     --------
       Cash and Cash Equivalents at End of
          Period...............................    $ 29,238       $  1,603       $     --     $ 30,841
                                                   ========       ========       ========     ========
</Table>

                                        44
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         COMBINING STATEMENT OF FINANCIAL POSITION AT DECEMBER 28, 2001

<Table>
<Caption>
                                            GUARANTOR        OTHER                      COMBINED
                                           SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS    TOTALS
                                           ------------   ------------   ------------   ---------
                                                           (DOLLARS IN THOUSANDS)
<S>                                        <C>            <C>            <C>            <C>
                                             ASSETS
CURRENT ASSETS
  Cash and Cash Equivalents..............   $  45,912       $  1,341      $      --     $  47,253
  Accounts Receivable -- Net.............      25,612         29,752        (13,981)       41,383
  Accounts Receivable -- Related
     Parties.............................          --         13,402             --        13,402
  Materials and Supplies.................      30,180          1,155             --        31,335
  Other Current Assets...................      41,069        (11,436)            --        29,633
                                            ---------       --------      ---------     ---------
          Total Current Assets...........     142,773         34,214        (13,981)      163,006
PROPERTIES -- NET........................     422,877         41,256             --       464,133
NET PENSION ASSET........................      26,067             --             --        26,067
OTHER ASSETS.............................     153,227         52,702       (101,199)      104,730
                                            ---------       --------      ---------     ---------
          Total Assets...................   $ 744,944       $128,172      $(115,180)    $ 757,936
                                            =========       ========      =========     =========

                                           LIABILITIES
CURRENT LIABILITIES
  Accounts Payable.......................   $  28,094       $  1,643      $      --     $  29,737
  Accrued Payroll and Fringe Benefits....      17,206             --             --        17,206
  Deferred Revenue.......................      11,890             --             --        11,890
  Accrued Claims and Insurance
     Premiums............................      24,200             --             --        24,200
  Accrued Interest.......................      18,659             --             --        18,659
  Short-term Debt........................      84,000             --             --        84,000
  Current Portion of Long-Term Debt......     608,519             --             --       608,519
  Other Current Liabilities..............      40,249         15,804        (13,981)       42,072
  Other Current Liabilities -- Related
     Parties.............................          --          8,397             --         8,397
                                            ---------       --------      ---------     ---------
          Total Current Liabilities......     832,817         25,844        (13,981)      844,680
LONG-TERM NOTE PAYABLE TO AFFILIATE......          --         86,700        (86,700)           --
LONG-TERM DEBT...........................          --             --             --            --
PENSION LIABILITY........................      18,907             --             --        18,907
OTHER LONG-TERM LIABILITIES..............      36,163          6,205             --        42,368
                                            ---------       --------      ---------     ---------
          Total Liabilities..............   $ 887,887       $118,749      $(100,681)    $ 905,955
                                            ---------       --------      ---------     ---------

                                        MEMBER'S DEFICIT
Member's Interest........................     220,074             --             --       220,074
Other Capital............................     166,580         57,374        (57,374)      166,580
Retained Deficit.........................    (527,740)       (47,951)        42,875      (532,816)
Other Comprehensive Loss.................      (1,857)            --             --        (1,857)
                                            ---------       --------      ---------     ---------
          Total Member's Deficit.........    (142,943)         9,423        (14,499)     (148,019)
                                            ---------       --------      ---------     ---------
          Total Liabilities and Member's
            Deficit......................   $ 744,944       $128,172      $(115,180)    $ 757,936
                                            =========       ========      =========     =========
</Table>

                                        45
<PAGE>

                         AMERICAN COMMERCIAL LINES LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         COMBINING STATEMENT OF FINANCIAL POSITION AT DECEMBER 29, 2000

<Table>
<Caption>
                                                 GUARANTOR        OTHER                      COMBINED
                                                SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS    TOTALS
                                                ------------   ------------   ------------   ---------
                                                                (DOLLARS IN THOUSANDS)
<S>                                             <C>            <C>            <C>            <C>
                                                ASSETS
CURRENT ASSETS
  Cash and Cash Equivalents...................   $  57,288       $  2,280       $     --     $  59,568
  Accounts Receivable -- Net..................      32,608          8,109             --        40,717
  Accounts Receivable -- Related Parties......          --          2,111             --         2,111
  Materials and Supplies......................      28,883            890             --        29,773
  Other Current Assets........................      24,823         (1,163)            --        23,660
                                                 ---------       --------       --------     ---------
          Total Current Assets................     143,602         12,227             --       155,829
PROPERTIES -- NET.............................     469,714         39,729             --       509,443
NET PENSION ASSET.............................      24,512             --             --        24,512
OTHER ASSETS..................................     141,534         51,128        (94,908)       97,754
                                                 ---------       --------       --------     ---------
          Total Assets........................   $ 779,362       $103,084       $(94,908)    $ 787,538
                                                 =========       ========       ========     =========

                                             LIABILITIES
CURRENT LIABILITIES
  Accounts Payable............................   $  28,536       $  1,194       $     --     $  29,730
  Accrued Payroll and Fringe Benefits.........      14,003             --             --        14,003
  Deferred Revenue............................      12,011             --             --        12,011
  Accrued Claims and Insurance Premiums.......      21,047             --             --        21,047
  Accrued Interest............................      18,246             --             --        18,246
  Short-term Debt.............................      66,750             --             --        66,750
  Current Portion of Long-Term Debt...........      44,579             --             --        44,579
  Other Current Liabilities...................      50,918          4,442             --        55,360
  Other Current Liabilities -- Related
     Parties..................................          --          1,457             --         1,457
                                                 ---------       --------       --------     ---------
          Total Current Liabilities...........     256,090          7,093             --       263,183
LONG-TERM NOTE PAYABLE TO AFFILIATE...........          --         86,700        (86,700)           --
LONG-TERM DEBT................................     613,476             --             --       613,476
PENSION LIABILITY.............................      21,389             --             --        21,389
OTHER LONG-TERM LIABILITIES...................      28,066          4,042             --        32,108
                                                 ---------       --------       --------     ---------
          Total Liabilities...................   $ 919,021       $ 97,835       $(86,700)    $ 930,156
                                                 ---------       --------       --------     ---------

                                           MEMBER'S DEFICIT
Member's Interest.............................     220,074             --             --       220,074
Other Capital.................................     163,799         46,820        (46,820)      163,799
Retained Deficit..............................    (523,048)       (41,571)        38,612      (526,007)
Other Comprehensive Loss......................        (484)            --             --          (484)
                                                 ---------       --------       --------     ---------
          Total Member's Deficit..............    (139,659)         5,249         (8,208)     (142,618)
                                                 ---------       --------       --------     ---------
          Total Liabilities and Member's
            Deficit...........................   $ 779,362       $103,084       $(94,908)    $ 787,538
                                                 =========       ========       ========     =========
</Table>

                                        46
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To Board of Managers
of American Commercial Lines LLC:

     In our opinion, based on our audits and the reports of other auditors, the
consolidated financial statements listed in the Index appearing under Item
14(a)(1), after the restatement described in Note 12, present fairly, in all
material respects, the financial position of American Commercial Lines LLC and
its subsidiaries (ACL) at December 28, 2001 and December 29, 2000, and the
results of their operations and their cash flows for each of the three fiscal
years in the period ended December 28, 2001, in conformity with accounting
principles generally accepted in the United States of America. In addition, in
our opinion, based on our audits and the reports of other auditors, the
financial statement schedule listed in the Index appearing under Item 14(a)(2)
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
These financial statements and the financial statement schedule are the
responsibility of ACL's management; our responsibility is to express an opinion
on these financial statements and financial statement schedule based on our
audits. We did not audit the financial statements of UABL Limited (UABL), a 50%
owned subsidiary, for 2001, which statements reflect 7% of consolidated total
assets as of December 28, 2001, and 27% of consolidated net loss for the fiscal
year ended December 28, 2001. We also did not audit the financial statements of
Global Material Services LLC (GMS), a 50% owned subsidiary, for 1999, which
statements reflect 1% of consolidated total assets as of December 31, 1999, and
45% of consolidated net earnings for the fiscal year ended December 31, 1999.
Those statements were audited by other auditors whose reports thereon have been
furnished to us, and our opinion expressed herein, insofar as it relates to the
amounts included for UABL and GMS, is based solely on the reports of the other
auditors. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits and the reports of
other auditors provide a reasonable basis for our opinion.

     The accompanying consolidated financial statements have been prepared
assuming that ACL will continue as a going concern. ACL incurred a substantial
loss during 2001. As discussed in Note 4 to the consolidated financial
statements, subsequent to December 28, 2001 ACL also defaulted on its Senior
Notes and Senior Credit Facilities and has determined that it is not likely that
it will be able to meet the covenant requirements included in the Senior Credit
Facilities agreement for 2002. Accordingly, ACL's outstanding debt has been
classified as current in its consolidated balance sheet at December 28, 2001.
The above facts raise substantial doubt about ACL's ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 4. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

     As discussed in Note 1 to the consolidated financial statements, during the
fourth quarter of 2001 the Company prospectively increased its estimate of the
useful life of towboats, which reduced the loss before extraordinary items and
the net loss by $1.1 million for the fiscal year ended December 28, 2001.

                                          PRICEWATERHOUSECOOPERS LLP

Louisville, Kentucky
March 26, 2002, except for Notes 12 and 13, as to which the date is August 13,
2002.

                                        47
<PAGE>

               SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS

                                 (IN THOUSANDS)

<Table>
<Caption>
                                         BALANCE AT
                                        BEGINNING OF   CHARGES TO                            BALANCE AT END
                                           PERIOD       EXPENSE      OTHER       WRITEOFFS     OF PERIOD
                                        ------------   ----------   -------      ---------   --------------
<S>                                     <C>            <C>          <C>          <C>         <C>
2001:
Allowance for Uncollectible
  accounts............................     $1,157        $1,176          --       $  (702)       $1,631
Valuation allowance for Foreign net
  operating Loss carryforwards........         --            --          --            --            --

2000:
Allowance for Uncollectible
  accounts............................     $2,290        $  194          --       $(1,327)       $1,157
Valuation allowance for Foreign net
  operating Loss carryforwards........     $6,605            --     $(6,605)(1)        --            --

1999:
Allowance for Uncollectible
  accounts............................     $2,335        $  813     $  (591)(2)   $  (267)       $2,290
Valuation allowance for Foreign net
  operating Loss carryforwards........     $4,186        $2,419          --            --        $6,605
</Table>

---------------

(1) Contribution of assets to UABL.

(2) Securitization of accounts receivable.

                                        48
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          American Commercial Lines LLC
                                          (Registrant)

                                          By:     /s/ MICHAEL C. HAGAN
                                            ------------------------------------
                                                      Michael C. Hagan
                                               President and Chief Executive
                                                           Officer

August 13, 2002

                                        49