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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

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

For the transition period from to

Commission File Number: 333-124454-12

COMMERCIAL BARGE LINE COMPANY

(Exact name of registrant as specified in its charter)


Delaware		03-0552365
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1701 E. Market Street, Jeffersonville, Indiana		47130
(Address of principal executive offices)		(Zip Code)

(812) 288-0100

(Registrant’s telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report:

N/A

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 ¨ No x.

Note: As of December 21, 2010, the registrant is a voluntary filer not subject to these filing requirements. However, the registrant has filed all reports required pursuant to Section 13 or 15(d) as if the registrant was subject to such filing requirements since December 21, 2010.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. Not applicable.

COMMERCIAL BARGE LINE COMPANY

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2012

TABLE OF CONTENTS


	Page
PART I FINANCIAL INFORMATION		3
Item 1: Financial Statements (unaudited)		3
Condensed Consolidated Statements of Operations		3
Condensed Consolidated Statements of Comprehensive Income		4
Condensed Consolidated Balance Sheets		5
Condensed Consolidated Statements of Cash Flows		6
Condensed Consolidated Statement of Stockholder’s Equity		7
Notes to Condensed Consolidated Financial Statements		8
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3: Quantitative and Qualitative Disclosures About Market Risk		32
Item 4: Controls and Procedures		32

PART II OTHER INFORMATION		33
Item 1: Legal Proceedings		33
Item 1A: Risk Factors		33
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 3: Defaults Upon Senior Securities		33
Item 4: Mine Safety Disclosures		33
Item 5: Other Information		33
Item 6: Exhibits		34
Signatures		35
Certification by CEO
Certification by CFO
Certification by CEO
Certification by CFO
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

COMMERCIAL BARGE LINE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited—In thousands)


	Three Months Ended September 30, 2012			Three Months Ended September 30, 2011			Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011
Revenues
Transportation and Services	$	156,588		$	196,350		$	513,057		$	520,793
Manufacturing		10,297			35,086			90,636			87,640

Revenues		166,885			231,436			603,693			608,433

Cost of Sales
Transportation and Services		138,232			172,372			447,389			498,302
Manufacturing		9,607			34,932			81,247			86,377

Cost of Sales		147,839			207,304			528,636			584,679

Gross Profit		19,046			24,132			75,057			23,754
Selling, General and Administrative Expenses		11,923			12,276			34,623			42,966

Operating Income (Loss)		7,123			11,856			40,434			(19,212	)

Other Expense (Income)
Interest Expense		7,874			7,553			23,185			22,645
Other, Net		(181	)		(188	)		(484	)		(532	)

Other Expense		7,693			7,365			22,701			22,113

(Loss) Income from Continuing Operations Before Income Taxes		(570	)		4,491			17,733			(41,325	)
Income Taxes (Benefit)		(273	)		(486	)		6,659			(16,784	)

(Loss) Income from Continuing Operations		(297	)		4,977			11,074			(24,541	)
Discontinued Operations, Net of Tax		—			85			26			122

Net (Loss) Income	$	(297	)	$	5,062		$	11,100		$	(24,419	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

COMMERCIAL BARGE LINE COMPANY

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited—In thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net (Loss) Income	$	(297	)	$	5,062		$	11,100		$	(24,419	)
Other Comprehensive Income (Loss)
Change in fair value of cash flow hedges, net of tax provisions of ($1,014) and $2,323 for three months and ($208) and $1,033 for the nine months ended September 30, 2012 and 2011, respectively		2,610			(4,546	)		1,290			(1,690	)
Other		—			—			(77	)		—

Other Comprehensive Income (Loss)		2,610			(4,546	)		1,213			(1,690	)

Total Comprehensive Income (Loss)	$	2,313		$	516		$	12,313		$	(26,109	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

COMMERCIAL BARGE LINE COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited—In thousands)


	September 30, 2012			December 31, 2011
ASSETS
Current Assets
Cash and Cash Equivalents	$	2,667		$	938
Accounts Receivable, Net		77,700			87,368
Inventory		62,318			62,483
Prepaid and Other Current Assets		37,299			27,310

Total Current Assets		179,984			178,099
Properties, Net		982,060			935,576
Investment in Equity Investees		6,619			6,470
Accounts Receivable, Related Parties, Net		12,558			12,021
Goodwill		17,692			17,692
Other Assets		37,590			45,521

Total Assets	$	1,236,503		$	1,195,379

LIABILITIES
Current Liabilities
Accounts Payable	$	39,123		$	48,653
Accrued Payroll and Fringe Benefits		14,273			20,035
Deferred Revenue		15,252			15,251
Accrued Claims and Insurance Premiums		12,340			13,823
Other Current Liabilities		41,840			41,977

Total Current Liabilities		122,828			139,739
Long Term Debt		443,979			384,225
Pension and Post Retirement Liabilities		62,526			67,531
Deferred Tax Liability		180,665			178,602
Other Long Term Liabilities		35,746			46,335

Total Liabilities		845,744			816,432

SHAREHOLDER’S EQUITY
Other Capital		424,432			424,932
Retained Deficit		(9,727	)		(20,826	)
Accumulated Other Comprehensive Loss		(23,946	)		(25,159	)

Total Shareholder’s Equity		390,759			378,947

Total Liabilities and Shareholder’s Equity	$	1,236,503		$	1,195,379

The accompanying notes are an integral part of the condensed consolidated financial statements.

COMMERCIAL BARGE LINE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited—In thousands)


	Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011
OPERATING ACTIVITIES
Net Income (Loss)	$	11,100		$	(24,419	)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities:
Depreciation and Amortization		80,353			82,081
Debt Issuance Cost Amortization		(1,796	)		(1,988	)
Deferred Taxes		1,518			(24,668	)
Gain on Property Dispositions		(9,517	)		(1,294	)
Contributions to Defined Benefit Plan		(7,330	)		(7,458	)
Share-Based Compensation		105			2,204
Other Operating Activities		(3,479	)		(5,646	)
Changes in Operating Assets and Liabilities:
Accounts Receivable		9,668			(1,748	)
Inventory		165			(24,622	)
Other Current Assets		(4,514	)		15,676
Accounts Payable		(10,513	)		(8,270	)
Accrued Interest		(4,745	)		(6,082	)
Other Current Liabilities		(5,761	)		(4,167	)

Net Cash Provided by (Used in) Operating Activities		55,254			(10,401	)
INVESTING ACTIVITIES
Property Additions		(163,706	)		(42,894	)
Proceeds from Property Dispositions		15,523			3,383
Impact of Barge Scrapping Operations		33,691			3,377
Other Investing Activities		(2,522	)		(5,823	)

Net Cash Used in Investing Activities		(117,014	)		(41,957	)
FINANCING ACTIVITIES
Revolving Credit Facility Borrowings		63,935			55,042
Bank Overdrafts on Operating Accounts		982			1,975
Debt Issuance/Refinancing Costs		(360	)		(137	)
Short Term Debt Repayments		(590	)		—
Dividends Paid		(478	)		(6,531	)
Tax Benefit of Share-Based Compensation		—			213

Net Cash Provided by Financing Activities		63,489			50,562
Net Increase (Decrease) in Cash and Cash Equivalents		1,729			(1,796	)
Cash and Cash Equivalents at Beginning of Period		938			3,707

Cash and Cash Equivalents at End of Period	$	2,667		$	1,911

The accompanying notes are an integral part of the condensed consolidated financial statements.

COMMERCIAL BARGE LINE COMPANY

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDER’S EQUITY

(Unaudited—In thousands)


	Other Capital			Retained Deficit			Comprehensive Loss			Total
Balance at December 31, 2011		$424,932		$	(20,826	)	$	(25,159	)	$	378,947
Cash Distributions		(478	)		—			—			(478	)
Other		(22	)		(1	)					(23	)
Comprehensive Earnings:
Net Income		—			11,100			—			11,100
Net Gain in Fuel Swaps Designated as Cash Flow Hedging Instrument, Net of Tax Expense of $208		—			—			1,290			1,290
Other		—			—			(77	)		(77	)

Total Comprehensive Earnings											12,313

Balance at September 30, 2012	$	424,432		$	(9,727	)	$	(23,946	)	$	390,759

The accompanying notes are an integral part of the condensed consolidated financial statements.

COMMERCIAL BARGE LINE COMPANY.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except per share data)

Note 1. Reporting Entity and Accounting Policies

Commercial Barge Line Company is a Delaware corporation. In these condensed consolidated financial statements, unless the context indicates otherwise, “CBL” or the “Company” refers to CBL and its subsidiaries on a consolidated basis.

The operations of the Company include barge transportation together with related port services along the United States Inland Waterways consisting of the Mississippi River System, the Ohio River and the Illinois River and their tributaries and the Gulf Intracoastal Waterway (collectively the “Inland Waterways”) and marine equipment manufacturing. Barge transportation accounts for the majority of the Company’s revenues and includes the movement of bulk products, grain, coal, steel and liquids in the United States. The Company has long-term contracts with many of its customers. Manufacturing of marine equipment is provided to customers in marine transportation and other related industries in the United States. Until its sale in December 2011, the Company also owned Elliott Bay Design Group (“EBDG”), an operation engaged in naval architecture and engineering which was significantly smaller than the transportation or manufacturing segments. The results of operations of EBDG have been reclassified into discontinued operations for all periods presented.

The assets of CBL consist primarily of its ownership of all of the equity interests in American Commercial Lines LLC (“ACL LLC”), ACL Transportation Services LLC (“ACLTS”), and Jeffboat LLC (“Jeffboat”), each a Delaware limited liability company, and ACL Professional Services Inc., a Delaware corporation, and their subsidiaries. CBL files as part of the consolidated federal tax return of its indirect parent Finn Holding Corporation (“Finn”). CBL does not conduct any operations independent of its ownership interests in the consolidated subsidiaries.

CBL is a wholly owned subsidiary of American Commercial Lines Inc. (“ACL”). ACL is a wholly owned subsidiary of ACL I Corporation (“ACL I”). ACL I is a wholly owned subsidiary of Finn. Finn is owned by certain affiliates of Platinum Equity, LLC (certain affiliates of Platinum Equity, LLC are referred to as “Platinum”). On December 21, 2010, the acquisition of ACL by Platinum (the “Acquisition”, in all instances of usage) was consummated. The Acquisition was accomplished through the merger of Finn Merger Corporation (“Finn Merger”), a Delaware corporation and a wholly owned subsidiary of ACL I, a Delaware corporation, with and into ACL. The assets of ACL consist principally of its ownership of all of the stock of CBL.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. As such, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet as of December 31, 2011 has been derived from the audited consolidated balance sheet at that date. The preparation of financial statements in conformity with 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 during the reporting period. Actual results could differ from those estimates. Some of the significant estimates underlying these financial statements include reserves for doubtful accounts, reserves for obsolete and slow moving inventories, pension and post-retirement liabilities, incurred but not reported medical claims, insurance claims and related receivable amounts, deferred tax liabilities, assets held for sale, environmental liabilities, revenues and expenses on special vessels using the percentage-of-completion method, environmental liabilities, valuation allowances related to deferred tax assets, expected forfeitures of share-based compensation, estimates of future cash flows used in impairment evaluations, liabilities for unbilled barge and boat maintenance, liabilities for unbilled harbor and towing services, estimated sub-lease recoveries and depreciable lives of long-lived assets.

In the opinion of management, for all periods presented, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods presented herein are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. Our quarterly revenues and profits historically have been lower during the first six months of the year and higher in the last six months of the year due primarily to the timing of the North American grain harvest and seasonal weather patterns. In the three months ended September 30, 2012, historical seasonality was impacted by severe drought conditions in the Midwestern United States, which negatively affected water levels and the grain harvest disrupting normal operations and increasing costs throughout that quarter.

Periodically the Financial Accounting Standards Board (“FASB”) issues additional Accounting Standards Updates (“ASUs”). ASUs considered to have a potential impact on CBL where the impact is not yet determined are discussed as follows.

ASU Number 2011-5 was issued in June 2011, amending Topic 220—Comprehensive Income. The ASU modifies alternative presentation standards, eliminating the option for disclosure of the elements of other comprehensive income within the statement of stockholder’s equity. Adoption of this ASU by the Company changed our previous presentation, but did not impact the components of other comprehensive income. The ASU was effective on January 1, 2012. ASU Number 2011-12 subsequently modified the effective

COMMERCIAL BARGE LINE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

date of certain provisions of the ASU concerning whether it is necessary to require entities to present reclassification adjustments by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements, reverting to earlier guidance until the Board completes its deliberations on the requested changes. The ASU, as modified, was effective on January 1, 2012.

ASU Number 2011-8 was issued in September 2011, amending Topic 350 Intangibles—Goodwill and Other. The ASU allows entities to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, whereas previous guidance required as the first step in an at least annual evaluation a computation of the fair value of a reporting entity. The ASU is effective for fiscal periods beginning after December 15, 2011.

Certain prior year amounts have been reclassified in these condensed consolidated financial statements to conform to the current year presentation. These reclassifications had no impact on previously reported net income.

Note 2. Debt


	September 30, 2012		December 31, 2011
Revolving Credit Facility	$	219,013	$	155,078
2017 Senior Notes		200,000		200,000
Plus Unamortized Purchase Premium		24,966		29,147

Long Term Debt	$	443,979	$	384,225

Concurrent with the Acquisition, on December 21, 2010, ACL, CBL, ACL LLC, ACLTS and Jeffboat (the “Borrowers”) entered into a senior secured asset-based revolving credit facility (“Credit Facility”) which provides for borrowing capacity of up to an aggregate principal amount of $475,000 with a final maturity date of December 21, 2015. Proceeds of the Credit Facility are available for use by the Borrowers and, subject to certain limitations, their subsidiaries for working capital and general corporate purposes. At the Acquisition, proceeds of the Credit Facility were used, in part, to fund the liquidation of ACL’s previous facility and certain expenses associated with the Acquisition.

The Borrowers may also use the Credit Facility to issue letters of credit up to a total of $50,000. Availability under the Credit Facility is capped at a borrowing base, calculated based on certain percentages of the value of the Company’s vessels, inventory and receivables and subject to certain blocks and reserves, all as further set forth in the Credit Facility agreement. The Borrowers are currently prohibited from incurring more than $390,000 of indebtedness under the Credit Facility regardless of the size of the borrowing base until (a) all of the obligations (other than unasserted contingent obligations) under the indenture governing the 2017 Notes (defined below) are repaid, defeased, discharged or otherwise satisfied or (b) the indenture governing the 2017 Notes is replaced or amended or otherwise modified in a manner such that additional borrowings would be permitted. At the Borrowers’ option, the Credit Facility may be increased by $75,000, subject to certain requirements set forth in the Credit Facility agreement (“Credit Agreement”).

In accordance with the Credit Agreement, the Borrowers’ obligations under the Credit Facility are secured by, among other things, a lien on substantially all of their tangible and intangible personal property (including but not limited to vessels, accounts receivable, inventory, equipment, general intangibles, investment property, deposit and securities accounts, certain owned real property and intellectual property) and a pledge of the capital stock of each of ACL’s wholly owned restricted domestic subsidiaries, subject to certain exceptions and thresholds.

On July 7, 2009, CBL issued $200,000 aggregate principal amount of senior secured second lien 12.5% notes due July 15, 2017 (the “2017 Notes”). The issue price was 95.181% of the principal amount of the 2017 Notes. The 2017 Notes are guaranteed by ACL and by all material existing and future domestic subsidiaries of CBL. At the Acquisition date the fair value of the 2017 Notes was $35,000 higher than the face amount. This amount is being amortized to interest expense using the effective interest method over the remaining life of the 2017 Notes.

The Credit Facility has no financial covenants unless borrowing availability is generally less than a certain defined level set forth in the Credit Agreement. The $169,742 in borrowing availability at September 30, 2012, exceeds the specified level by approximately $120,942.

COMMERCIAL BARGE LINE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Should the springing covenants be triggered, the leverage calculation would include only first lien senior debt, excluding debt under the 2017 Notes. The 2017 Notes and the Credit Facility also provide flexibility to execute sale leasebacks, sell assets and issue additional debt. In addition, the Credit Facility places no direct restrictions on capital spending, but, subject to certain exceptions for redeemable capital interests, management benefit plans and stock dividends, as well as a $20,000 allowance for such payments, does limit the payment of cash dividends to a level equal to half of cumulative consolidated net income since July 1, 2009 plus the aggregate amount of any new capital contributions or equity offering proceeds. Outstanding redeemable capital interests and management benefit plans are not significant as of September 30, 2012, and, since July 1, 2009, there has been no available cumulative consolidated net income through September 30, 2012. No new capital contributions or equity offerings were made since the Acquisition.

Borrowings under the Credit Agreement bear interest, at the Borrowers’ option, at either (i) an alternate base rate or an adjusted LIBOR rate plus, in each case, an applicable margin. Such applicable margin will, depending on average availability under the Credit Facility, range from 2.00% to 2.50% in the case of base rate loans and 2.75% to 3.25% in the case of LIBOR rate loans. Interest is payable (a) in the case of base rate loans, monthly in arrears, and (b) in the case of LIBOR rate loans, at the end of each interest period, but in no event less often than every three months. A commitment fee is payable monthly in arrears at a rate per annum equal to 0.50% of the daily unused amount of the commitments in respect of the Credit Facility. The Borrowers, at their option, may prepay borrowings under the Credit Facility and re-borrow such amounts, at any time (subject to applicable borrowing conditions) without penalty, in whole or in part, in minimum amounts and subject to other conditions set forth in the Credit Facility. For any period that availability is less than a certain defined level set forth in the Credit Agreement and until no longer less than such level for a 30-day period, the Credit Agreement imposes several financial covenants on CBL and its subsidiaries, including (a) a minimum fixed charge coverage ratio (as defined in the Credit Agreement) of at least 1.1 to 1; and (b) a maximum first lien leverage ratio of 4.25 to 1.0. The Credit Agreement requires that CBL and its subsidiaries comply with covenants relating to customary matters (in addition to those financial covenants described above), including with respect to incurring indebtedness and liens, using the proceeds received under the Credit Agreement, transactions with affiliates, making investments and acquisitions, effecting mergers and asset sales, prepaying indebtedness, and paying dividends.

During all periods presented the Company has been in compliance with the respective covenants contained in the Credit Facility.

Additionally, the Company entered into short term financing arrangements comprised of non-cash notes bearing interest of 2.7%, with monthly payments until June 2013, to finance various insurance premiums. Short term debt is classified with Other Current Liabilities on the condensed consolidated balance sheet.

Note 3. Inventory

Inventory is carried at the lower of cost (based on a weighted average method) or market and consists of the following.


	September 30, 2012		December 31, 2011

Raw Materials	$	26,094	$	26,865
Work in Process		11,587		8,232
Parts and Supplies		24,637		27,386

	$	62,318	$	62,483

Note 4. Income Taxes

CBL’s operating entities are primarily single member limited liability companies that are owned by a corporate parent, and are subject to U.S. federal and state income taxes on a combined basis. The effective tax rates in the three months ended September 30, 2012 and 2011 were 47.9% and (10.8%), respectively. The effective tax rate in the three months ended September 30, 2011 was distorted by a $1,877 discrete tax item resulting from a change in IRS Administrative Procedures related to an IRS Revenue Procedure regarding transaction success fees, which increased the benefit for the quarter then ended. The effective tax rates in the nine months ended September 30, 2012 and 2011 were 37.6% and 40.6%, respectively. The effective income tax rates are impacted by the significance of consistent levels of permanent book and tax differences on expected full year income in the respective periods. There is no tax-sharing agreement with the other companies included in the Finn consolidated return filing and therefore the tax attributes of CBL are stated on a stand-alone basis.

COMMERCIAL BARGE LINE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Employee Benefit Plans

A summary of the components of the Company’s pension and post-retirement plans follows.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Pension Components:
Service cost	$	1,140		$	1,120		$	3,420		$	3,360
Interest cost		2,645			2,634			7,935			7,902
Expected return on plan assets		(3,460	)		(3,250	)		(10,380	)		(9,750	)
Amortization of unrecognized losses		443			—			1,329			—

Net periodic benefit cost	$	768		$	504		$	2,304		$	1,512

Post-retirement Components:
Service cost	$	3		$	3		$	9		$	9
Interest cost		45			55			135			165

Net periodic benefit cost	$	48		$	58		$	144		$	174

Note 6. Related Party Transactions

There were no related party freight revenues in the three and nine month periods ended September 30, 2012 and 2011 and there were no related party receivables included in accounts receivable on the condensed consolidated balance sheets at September 30, 2012 and December 31, 2011, except those contained in the caption Accounts Receivable, Related Parties, Net. These amounts related to the receivable from Finn in connection with the Acquisition and certain subsequent payments associated with the wind-down of the pre-Acquisition share-based compensation plan. Since the Acquisition, additional vesting of certain pre-Acquisition share-based awards has occurred and, per the terms of the Omnibus Plan, all awards previously granted to executives separating without cause from the Company within one year after the Acquisition date became fully vested. Finn redeemed certain of these shares. Dividends from the Company were declared and paid to Finn in amounts sufficient to fund these redemptions. These dividends reduced the Accounts Receivable Related Parties, Net balance.

During the first quarter of 2012 and in the second quarter of 2011 the Company paid an annual management fee of $5,000 to Platinum Equity Advisors, LLC. The management fee is amortized to selling, general and administrative expense over the course of the respective fiscal year.

Note 7. Business Segments

CBL has two significant reportable business segments: transportation and manufacturing. CBL’s transportation segment includes barge transportation operations and fleeting facilities that provide fleeting, shifting, cleaning and repair services at various locations along the Inland Waterways. The manufacturing segment constructs marine equipment for external customers as well as for CBL’s transportation segment.

Management evaluates performance based on a variety of measures, including segment earnings, which is defined as operating income. The accounting policies of the reportable segments are consistent with those described in the summary of significant accounting policies described in the Company’s filing on Form 10-K for the year ended December 31, 2011. Intercompany sales are transferred at the lower of cost or fair value.

COMMERCIAL BARGE LINE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.


	Reportable Segments						Intersegment Eliminations			Total
	Transportation			Manufacturing			Intersegment Eliminations			Total
Three Months ended September 30, 2012
Total revenue	$	156,727		$	47,182		$	(37,024	)	$	166,885
Less Intersegment revenues		139			36,885			(37,024	)		—

Revenue from external customers		156,588			10,297			—			166,885
Operating expense
Materials, supplies and other		38,374			—			—			38,374
Rent		6,646			—			—			6,646
Labor and fringe benefits		28,262			—			—			28,262
Fuel		38,161			—			—			38,161
Depreciation and amortization		25,719			—			—			25,719
Taxes, other than income taxes		2,684			—			—			2,684
Gain on disposition of equipment		(1,614	)		—			—			(1,614	)
Cost of goods sold		—			9,607			—			9,607

Total cost of sales		138,232			9,607			—			147,839
Selling, general & administrative		11,059			864			—			11,923

Total operating expenses		149,291			10,471			—			159,762

Operating income (loss)	$	7,297		$	(174	)	$	—		$	7,123


Three Months ended September 30, 2011
Total revenue	$	196,694		$	56,907		$	(22,165	)	$	231,436
Less Intersegment revenues		344			21,821			(22,165	)		—

Revenue from external customers		196,350			35,086			—			231,436
Operating expense
Materials, supplies and other		63,391			—			—			63,391
Rent		6,960			—			—			6,960
Labor and fringe benefits		28,875			—			—			28,875
Fuel		45,347			—			—			45,347
Depreciation and amortization		24,645			—			—			24,645
Taxes, other than income taxes		3,094			—			—			3,094
Loss on disposition of equipment		60			—			—			60
Cost of goods sold		—			34,932			—			34,932

Total cost of sales		172,372			34,932			—			207,304
Selling, general & administrative		11,823			453			—			12,276

Total operating expenses		184,195			35,385			—			219,580

Operating income (loss)	$	12,155		$	(299	)	$	—		$	11,856

COMMERCIAL BARGE LINE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Reportable Segments						Intersegment Eliminations			Total
	Transportation			Manufacturing			Intersegment Eliminations			Total
Nine Months ended September 30, 2012
Total revenue	$	513,489		$	153,233		$	(63,029	)	$	603,693
Less Intersegment revenues		432			62,597			(63,029	)		—

Revenue from external customers		513,057			90,636			—			603,693
Operating expense
Materials, supplies and other		146,209						—			146,209
Rent		20,073						—			20,073
Labor and fringe benefits		85,084						—			85,084
Fuel		120,960						—			120,960
Depreciation and amortization		76,019						—			76,019
Taxes, other than income taxes		8,545						—			8,545
Gain on disposition of equipment		(9,501	)					—			(9,501	)
Cost of goods sold		—			81,247			—			81,247

Total cost of sales		447,389			81,247			—			528,636
Selling, general & administrative		31,591			3,032			—			34,623

Total operating expenses		478,980			84,279			—			563,259

Operating income	$	34,077		$	6,357		$	—		$	40,434


Nine Months ended September 30, 2011
Total revenue	$	521,674		$	121,488		$	(34,729	)	$	608,433
Less Intersegment revenues		881			33,848			(34,729	)		—

Revenue from external customers		520,793			87,640			—			608,433
Operating expense
Materials, supplies and other		181,647			—			—			181,647
Rent		20,924			—			—			20,924
Labor and fringe benefits		84,801			—			—			84,801
Fuel		126,919			—			—			126,919
Depreciation and amortization		76,072			—			—			76,072
Taxes, other than income taxes		9,207			—			—			9,207
Gain on disposition of equipment		(1,268	)		—			—			(1,268	)
Cost of goods sold		—			86,377			—			86,377

Total cost of sales		498,302			86,377			—			584,679
Selling, general & administrative		41,505			1,461			—			42,966

Total operating expenses		539,807			87,838			—			627,645
Operating loss	$	(19,014	)	$	(198	)	$	—		$	(19,212	)

COMMERCIAL BARGE LINE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8. Financial Instruments and Risk Management

The Company has price risk for fuel not covered by contract escalation clauses and in time periods from the date of price changes until the next monthly or quarterly contract reset. From time to time the Company has utilized derivative instruments to manage volatility in addition to contracted rate adjustment clauses. For several years the Company has been entering into fuel price swaps with commercial banks. The number of gallons settled and related net gains, as well as additional gallons hedged and unrealized changes in market value are contained in the table below. At September 30, 2012, the Company has fuel price swaps with a maximum maturity of October 2013. As hedged fuel is used, any gains or losses are recorded as a decrease or increase to fuel expense, a component of cost of sales.

The fair value of unsettled fuel price swaps is listed in the following table. These derivative instruments have been designated and accounted for as cash flow hedges. To the extent of their effectiveness, changes in fair value of the hedged instrument will be accounted for through other comprehensive income until the hedged fuel is used, at which time the gain or loss on the hedge instruments will be recorded as fuel expense (cost of sales). Other comprehensive loss at September 30, 2012 of ($23,946) and December 31, 2011 of ($25,159) consisted of gains (losses) on fuel hedging and pension liability, net of tax benefit of $15,132 and $15,417, respectively. Hedge ineffectiveness is recorded in income as a component of fuel expense as incurred.

The carrying amounts and fair values of the Company’s financial instruments, which are recorded in Prepaid and Other Current Assets, are as follows:


Description	9/30/2012		Reporting Date Using Markets for Identical Assets (Level 1)
Fuel Price Swaps	$	460	$	460

At September 30, 2012, the increase in the fair value of the financial instruments is recorded as a net receivable of $460 in the consolidated balance sheet and as a net-of-tax deferred gain, less hedge ineffectiveness, in other comprehensive income in the consolidated balance sheet. Hedge ineffectiveness resulted in a decrease to fuel expense of $3 and an increase of $24 in the three and nine months of 2012, respectively. The fair value of the fuel price swaps is based on quoted market prices for identical instruments, or Level 1 inputs as to fair value and also considers the credit risk of the counterparty. The Company may increase the quantity hedged or add additional months based upon active monitoring of fuel pricing outlooks by the management team.


	Gallons			Dollars
Fuel Price Swaps at December 31, 2011		19,400		$	(1,012	)
1st Quarter 2012 Fuel Hedge (Income) Expense		(5,900	)		(1,679	)
1st Quarter 2012 Changes		—			5,388
2nd Quarter 2012 Fuel Hedge (Income) Expense		(5,700	)		(603	)
2nd Quarter 2012 Changes		1,800			(5,260	)
3rd Quarter 2012 Fuel Hedge (Income) Expense		(5,200	)		891
3rd Quarter 2012 Changes		720			2,735

Fuel Price Swaps at September 30, 2012		5,120		$	460

Note 9. Contingencies

During the three months ended September 30, 2012 the Company resolved the remaining contingencies as to the amount of insurance proceeds to be received arising from a settlement of certain claims under a replacement property policy for 2011 flood damage to the Company’s terminal located in Memphis, Tennessee and a confirmation of the proceeds amount was received from the insurer. An $11,442 gain, representing the net proceeds was recorded as a reduction of claims expense included in Materials, supplies and other costs as a component of cost of sales transportation and services during the three months ended September 30, 2012. The related receivable is included in Prepaid and Other Current Assets.

The nature of our business exposes us to the potential for legal proceedings, including those relating to labor and employment, personal injury, property damage and environmental matters. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including our assessment of the merits of each particular claim, as well as our current reserves and insurance coverage, we do not expect that any known legal proceeding will in the foreseeable future have a material adverse impact on our financial condition or the results of our operations.

COMMERCIAL BARGE LINE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Shareholder Appraisal Action

On April 12, 2011, IQ Holdings, Inc. (“IQ”) filed a Verified Petition for Appraisal of Stock against ACL in the Court of Chancery in the State of Delaware (the “Delaware Court”). Among other things, the appraisal petition seeks a judicial determination of the fair value of IQ’s 250,000 shares of common stock pursuant to 8 Del. C. § 262, and an order by the Delaware Court directing ACL to pay IQ the fair value of its shares as of the effective date of the Acquisition, taxes, attorney’s fees, and costs and interest from the effective date of the Acquisition through the date of the judgment. A trial was held in October 2012. The Company expects that a ruling will be made in the first half of 2013. Funds sufficient to pay the acquisition price of the stock are held in a paying agent account. While it is not possible at this time to determine the potential outcome of this action, we do not believe the action will result in a payment by ACL (in addition to the funds held in the paying agent account) that would materially affect our financial condition, results of operations or cash flows.

Environmental Litigation

We have been involved in the following environmental matters relating to the investigation or remediation of locations where hazardous materials have or might have been released or where we or our vendors have arranged for the disposal of wastes. These matters include situations in which we have been named or are believed to be a potentially responsible party (“PRP”) under applicable federal and state laws.

Collision Incident, Mile Marker 97 of the Mississippi River

ACL and ACL LLC, an indirect wholly owned subsidiary of ACL, have been named in various lawsuits stemming from an incident on July 23, 2008, involving one of ACL LLC’s tank barges that was being towed by DRD Towing Company L.L.C. (“DRD”), an independent towing contractor. The tank barge was involved in a collision with the motor vessel Tintomara, operated by Laurin Maritime, at Mile Marker 97 of the Mississippi River in the New Orleans area. The tank barge was carrying approximately 9,900 barrels of #6 oil, of which approximately two-thirds was released. ACL completed the cleanup of the oil spill and is processing claims properly presented, documented and recoverable under the Oil Spill Act of 1990 (“OPA 90”). A recent ruling by the United States District Court for the Eastern District of Louisiana held that ACL was not at fault for the incident. This ruling does not exonerate ACL from the liabilities under OPA 90. ACL LLC has filed a Notice of Appeal. Laurin Maritime (America) Inc., Laurin Maritime AB, Whitefin Shipping Company Limited, M/V TINTOMARA, and Anglo-Atlantic Steamship Company Limited has filed a Notice of Cross-Appeal. On August 22, 2011 an action was filed in the U.S. District Court for the Eastern District of Louisiana captioned United States of America v. American Commercial Lines LLC and D.R.D. Towing, LLC, Civil Action No. 2:11-cv-2076. The action seeks damages of approximately $25 million, including certain repayment to the Oil Spill Liability Trust Fund for sums it paid related to the cleanup of the oil spill and to certain claimants for damages cognizable under OPA 90, a civil penalty under the Clean Water Act in an amount to be determined at trial as well as a claim for natural resources damages. ACL and ACL LLC have various insurance covering pollution, property, marine and general liability. While the cost of cleanup operations and other potential liabilities relating to the spill are significant, we believe the company has satisfactory insurance coverage and other legal remedies to cover substantially all of the cost.

Note 10. Share-Based Compensation

On April 12, 2011, Finn adopted the Finn Holding Corporation 2011 Participation Plan (the “Participation Plan”) to provide incentive to key employees of Finn and its subsidiaries by granting performance units to key stakeholders, including CBL’s named executive officers, to maximize Finn’s performance and to provide maximum returns to Finn’s stockholders. The Participation Plan may be altered, amended or terminated by Finn at any time.

Under the Participation Plan, the value of the performance units is related to the appreciation in the value of Finn from and after the date of grant. The performance units vest over a period specified in the applicable award agreements. Participants in the Participation Plan may be entitled to receive compensation for their vested units if certain performance-based “qualifying events” occur during the participant’s employment with CBL. These qualifying events are described below. The Compensation Committee for the Participation Plan (the “Plan Committee”) determines who is eligible to receive an award, the size and timing of the award and the value of the award at the time of grant. The performance units generally mature according to the terms approved by the Plan Committee and as set forth in a grant agreement. Payment on the performance units is contingent upon the occurrence of either (i) a sale of some or all of Finn common stock by its stockholders, or (ii) Finn’s payment of a cash dividend. The Participation Plan will expire April 1, 2016 and all performance units will terminate upon the expiration of the Participation Plan, unless sooner terminated pursuant to the terms of the Participation Plan.

The maximum number of performance units that may be awarded under the Participation Plan is 36,800,000. During the year ended December 31, 2011, a total of 31,165,000 performance units were granted and 19,780,000 performance units were forfeited by executives that left employment in 2011. At no time during the year did the outstanding grants exceed the maximum authorized units. At December 31, 2011, the Company had committed to issue 17,595,000 performance units to executives that joined the Company during 2011. These units were granted during the quarter ended March 31, 2012 and no units were granted in the quarter ended September 30, 2012.

COMMERCIAL BARGE LINE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Upon the occurrence of a qualifying event, participants with vested units may receive an amount equal to the difference between: (i) the value (as defined by the Participation Plan) of the units on the date of the qualifying event, and (ii) the value of the units assigned on the date of grant. No amounts are due to participants until the total cash dividends and net proceeds from the sale of common stock exceed values pre-determined by the Participation Plan. CBL accounts for grants made pursuant to this Participation Plan in accordance with FASB ASC 718, “Compensation—Stock Compensation” (“ASC 718”). It is anticipated that since the occurrence of future “qualifying events” is not determinable or estimable, no liability or expense will be recognized until the qualifying event(s) becomes probable and can be estimated.

Prior to the Acquisition, ACL had reserved the equivalent of approximately 54,000 shares of Finn for grants to employees and directors under the Omnibus Plan. According to the terms of the Omnibus Plan, forfeited share awards and expired stock options become available for future grants. No share-based awards were granted under this Omnibus Plan during the nine months ended September 30, 2012 or 2011.

For all share-based compensation under the Omnibus Plan, as participants render service over the vesting periods, expense has been recorded to the same line items used for cash compensation. Generally, this expense is for the straight-line amortization of the grant date fair market value adjusted for expected forfeitures. Other capital is correspondingly increased as the compensation is recorded. Grant date fair market value for all non-option share-based compensation was the closing market value on the date of grant. Adjustments to estimated forfeiture rates have been made when actual results were known, generally when awards are fully earned. Adjustments to estimated forfeitures for awards not fully vested occur when significant changes in turnover rates became evident.

Effective as of the date of the Acquisition on December 21, 2010, all awards that had been granted to non-executive employees and to the former ACL board members vested and were paid out consistent with certain provisions in the Omnibus Plan. The payment of the intrinsic value of these awards totaling $14,284 was a part of the consideration paid for the Acquisition and included certain previously vested executive shares. This payment by the Company is recorded as an element of the intercompany receivable balance on the condensed consolidated balance sheet. Unvested awards previously granted to Company executives under the Omnibus Plan were assumed by Finn. There were no changes in the terms and conditions of the awards, except for adjustment to denomination in Finn shares for all award types and conversion to time-based vesting as to the performance units. At September 30, 2012, 8,799 shares were available under the Omnibus Plan for future awards, but there is no intention that any further awards will be granted under the Omnibus Plan.

During the 2012 third quarter, 215 stock options vested. During the nine months ended September 30, 2012, a total of 1,468 restricted stock units and 1,329 stock options, held by Company executives vested. These vesting events will result in an increase in additional paid in capital and a tax benefit for the excess of the intrinsic value of the restricted units at the vesting date over the fair value at the date of grant of $206. These tax benefits will be recognized through paid in capital as it becomes more likely than not that the tax benefit will be realized. As of September 30, 2012, there were 2,796 options outstanding with a weighted average exercise price of $55.78 and 54 vested and 690 unvested restricted stock units outstanding.

In the three months and nine months ended September 30, 2012, the Company recorded total stock-based compensation expense of $21 and $105 respectively, and related income tax benefit of $8 and $39, respectively. In the three and nine months ended September 30, 2011, the Company recorded total stock-based employee compensation expense of $389 and $2,204 respectively, and related tax benefit of $145 and $825.

During the three months ended March 31, 2011, after the issuance of $250,000 of unsecured PIK Notes by ACL I, CBL’s indirect parent company, Finn declared a dividend of $258.50 per share for each outstanding share. The dividend was paid to Finn shareholders during the first quarter of 2011. This reduced Finn’s initial capitalization from $460,000 to $201,500.

Per the terms of the Plan, in the event of such dividend, holders of outstanding share-based equity awards were entitled to receive either dividend rights, participation in the dividend or adjustment of awards to maintain the then-current intrinsic value of the existing awards. Finn elected to pay the dividend per share to holders of vested restricted stock units and performance units and to adjust the strike prices and number of options issued to maintain the intrinsic value at date of dividend, or some combination of such actions. The dividend resulted in payments of $3,659 to Company executives at the date of the dividend, with all remaining share-based awards’ new intrinsic value based on shares of Finn valued at $201.50 per share. The $3,659 payment was made by the Company and increased the Company’s related receivable from Finn. After the payouts to the executives, during the nine months ended September 30, 2011, the Company declared and paid dividends to Finn in an amount equal to the gross payments. Finn, in turn, used the proceeds to reimburse the Company for payments made on its behalf to separating executives and to holders of vested restricted units under the Plan.

COMMERCIAL BARGE LINE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 11. Dispositions

Dispositions and Impairments —

In December 2011 the Company disposed of its interest in EBDG. Due to the sale, all results of EBDG operations are reflected in discontinued operations.

During the first quarter of 2011 one of the three boats held for sale was returned to service, one boat was sold in the third quarter of 2011 and two additional boats were placed into held for sale status in the fourth quarter. These three boats are being actively marketed. During the first nine months of 2012 nine surplus boats were sold at a small loss. Additionally, during the nine months ended September 30, 2012, 432 retired barges were sold for scrap generating proceeds of $33,453 and gains on disposition of $12,028.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes certain “forward-looking statements” that involve many risks and uncertainties. When used, words such as “anticipate,” “expect,” “believe,” “intend,” “may be,” “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements. These forward-looking statements are based on management’s present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. The potential for actual results to differ materially from such forward-looking statements should be considered in evaluating our outlook.

The readers of this document are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. See the risk factors enumerated in “Part II—Other Information Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q (this “Report”) and “Part I—Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011 (our “2011 Annual Report”) for a detailed discussion of important factors that could cause actual results to differ materially from those reflected in such forward-looking statements.

INTRODUCTION

This MD&A is provided as a supplement to the accompanying condensed consolidated financial statements and footnotes to help provide an understanding of the financial condition, changes in financial condition and results of operations of Commercial Barge Line Company (the “Company”). This MD&A should be read in conjunction with, and is qualified in its entirety by reference to, the accompanying condensed consolidated financial statements and footnotes. This MD&A is organized as follows.

Overview. This section provides a general description of the Company and its business, as well as developments the Company believes are important in understanding the results of operations and financial condition or in understanding anticipated future trends.

Results of Operations. This section provides an analysis of the Company’s results of operations for the three and nine months ended September 30, 2012 compared to the results of operations for the three and nine months ended September 30, 2011.

Liquidity and Capital Resources. This section provides an overview of the Company’s sources of liquidity, a discussion of the Company’s debt that existed as of September 30, 2012, and an analysis of the Company’s cash flows for the nine months ended September 30, 2012 and September 30, 2011.

Changes in Accounting Standards. This section describes certain changes in accounting and reporting standards applicable to the Company.

Critical Accounting Policies. This section describes any significant changes in accounting policies that are considered important to the Company’s financial condition and results of operations, require significant judgment and require estimates on the part of management in application from those previously described in our 2011 Annual Report. The Company’s significant accounting policies include those considered to be critical accounting policies.

Quantitative and Qualitative Disclosures about Market Risk. This section discusses our analysis of significant changes in exposure to potential losses arising from adverse changes in fuel prices and interest rates at September 30, 2012.

OVERVIEW

Our Business

The Company

CBL is one of the largest and most diversified inland marine transportation and service companies in the United States. CBL provides barge transportation and related services under the provisions of the Jones Act (the “Jones Act”) and manufactures barges, primarily for use in the inland rivers, commonly referred to as brown-water use. The Jones Act is a federal cabotage law that restricts domestic non-proprietary cargo marine transportation in the United States to vessels built and registered in the United States, manned by U.S. citizens and 75% owned by U.S. citizens.

We currently operate in two business segments, transportation and manufacturing. We are the third largest provider of dry cargo barge transportation and second largest provider of liquid tank barge transportation on the United States Inland Waterways, which consists of the Mississippi River, the Ohio River, the Illinois River and their tributaries and the Gulf Intracoastal Waterway (the “Inland Waterways”), accounting for 10.9% of the total inland dry cargo barge fleet and 10.2% of the total inland liquid cargo barge fleet as of December 31, 2011, according to InformaEconomics, Inc. (“Informa”), a private forecasting service.

Our operations are tailored to service a wide variety of shippers and freight types. We provide additional value-added services to our customers, including warehousing and third-party logistics through our BargeLink LLC joint venture. Our operations incorporate advanced fleet management practices and information technology systems which allows us to effectively manage our fleet.

Our manufacturing segment was the second largest manufacturer of brown-water barges in the United States in 2011 according to Criton Corporation (“Criton”), publisher of River Transport News.

The Industry

Transportation Industry. Barge market behavior is driven by the fundamental forces of supply and demand, influenced by a variety of factors including the size of the Inland Waterways barge fleet, local weather patterns, navigation circumstances, domestic and international consumption of agricultural and industrial products, crop production, trade policies and the price of steel.

For purposes of industry analysis, the commodities transported on the Inland Waterways can be broadly divided into four categories: grain, bulk, coal and liquids. Using these broad cargo categories, the following graph depicts the total millions of tons shipped through the Inland Waterways for the quarter and nine months ended September 30, 2012 and September 30, 2011 by all carriers according to data from the US Army Corps of Engineers Waterborne Commerce Statistics Center (the “Corps”). The Corps does not estimate ton-miles, which we believe is a more accurate volume metric. Note that the most recent periods are typically estimated for the Corps’ purposes by lockmasters and retroactively adjusted as shipper data is received.

LOGO

Source: U.S. Army Corps of Engineers Waterborne Commerce Statistics Center

Manufacturing Industry. The inland barge manufacturing industry competes primarily on quality of manufacture, delivery schedule, design capabilities and price. We believe, based on data reported by River Transport News (published by Criton), that Jeffboat and one other competitor together comprise the significant majority of barge manufacturing capacity in the U.S.

Consolidated Financial Overview

For the quarter and nine-month periods ended September 30, 2012, the Company had a net loss of $0.3 million and net income of $11.1 million, respectively. This represented a decrease of $5.4 million for the quarter and an increase of $35.5 million for the first nine months compared to the same periods of the prior year.

The following table displays certain individually significant drivers of after-tax non-comparability in the respective third quarters and first nine-month periods of 2012 and 2011. Though all periods contain the impact of purchase accounting due to the significant difference in the level of asset sales and barge scrapping, we have separated the former basis and the impact of the purchase accounting revaluation of the assets disposed.

Significant Non-Comparable Items

(in thousands)

After Tax Impact on Net Income (Decrease) Increase


	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Share based compensation and restructuring	$	(13	)	$	(590	)	$	(147	)	$	(2,868	)
Other restructuring/acqusition-related costs and consulting		(2,431	)		(2,161	)		(6,047	)		(9,375	)
Total historical cost gains/losses on boat/barge sales		2,787			226			23,525			3,010
Purchase accounting impact on boat/barge gains		(1,792	)		(350	)		(17,703	)		(2,306	)
Customer bankruptcy (loss)/recovery		—			(33	)		—			543
Insurance gain on 2011 flood claims		7,155			—			7,155			—
Discrete tax item		—			(1,877	)		—			(1,877	)

	$	5,706		$	(4,785	)	$	6,783		$	(12,873	)

In addition to the above items, both the quarter and nine months ended September 30, 2012 have been impacted by approximately $15.1 million, after tax, due to drought conditions. The drought lead to extremely low Mississippi River levels, which limited the amount of cargo that could be carried, thereby reducing tons per barge. On average, the Company’s dry cargo tons per barge declined by nearly 7% during the quarter compared to levels that were achieved from March through May of this year. This decline in tons transported resulted in a direct reduction in EBITDAR of $9.8 million for the quarter. Additionally, the number of barges per tow was reduced along the Mississippi River in the most seriously impacted river segments, between St. Louis and Vicksburg, as part of an industry-wide agreement aimed at controlling disruptions to the flow of traffic on the river. As a result, the Company required more tow boats in service to deliver the same equivalent amount of freight based upon number of barges per tow. The cost of this excess towing capacity during the third quarter was $5.9 million. Finally, river conditions led to more traffic disruptions on the Mississippi River south of St. Louis, resulting in a reduced turn of the Company fleet assets. As a result, the Company was required to use more tow boat power to deliver booked freight during the quarter and the slower turn also impacted the number of revenue earning days on the barge fleet. The impact of these incremental costs and lost profit totaled $8.5 million during the quarter.

These items and changes in the operating performance of our transportation and manufacturing segments drove the changes in net income. The primary causes of changes in operating income in our transportation and manufacturing segments are generally described below under “Segment Overview” and more fully described below under Operating Results by Business Segment.

For the quarter and nine months ended September 30, 2012, Adjusted EBITDAR from continuing operations was $55.1 million and $169.3 million respectively. This represents improvements of $7.0 million and $55.3 million compared to the same periods of the prior year. Adjusted EBITDAR from continuing operations as a percent of revenue was 33.0% and 28.1% for the quarter and nine months ended September 30, 2012. This represents an increase of 12.2 points quarter-over-quarter and an increase of 9.3 points nine month period-over-nine month period. See the table below under “Consolidated Financial Overview—Non-GAAP Financial Measure Reconciliation” for a definition of Adjusted EBITDAR and a reconciliation of Adjusted EBITDAR to consolidated net income or loss.

During the nine months ended September 30, 2012, $163.7 million of capital expenditures were primarily attributable to the addition of 77 new covered dry cargo barges, 23 new liquid tank barges, acquisition of eight used liquid tank barges, boat repower spending, other boat and barge capital improvements and facilities improvements. During the nine months ended September 30, 2012, proceeds from the scrapping of 432 retired barges generated $33.5 million and the sale of nine surplus boats generated $15.4 million.

During the nine months ended September 30, 2012, average face amount of outstanding debt increased approximately $16.3 million from the year end 2011 level, primarily driven by capital expenditures in the period offset by proceeds from barge scrapping and boat sales and the improvement in operating cash flow. Total interest expense for the nine months ended September 30, 2012, was $23.2 million or $0.5 million higher than those expenses in the same period of 2011. The increase in interest expense is due higher interest expense in the current year on obligations other than debt.

At September 30, 2012, we had total long term indebtedness of $444.0 million, including $200 million related to the 2017 Notes, $25.0 million in unamortized premium recorded at the Acquisition-date to recognize their fair value, and $219.0 million drawn on our credit facility. At this level of debt, we had $169.7 million in remaining availability under our Credit Facility. The Credit Facility has no maintenance financial covenants unless borrowing availability is generally less than $48.8 million. At September 30, 2012, debt levels were $120.9 million above this threshold. As of September 30, 2012, the present value of the lease payments associated with revenue generating equipment was approximately $45.5 million. Including the present value of these lease payments, the Company’s total funded indebtedness would be $464.5 million as of September 30, 2012. The ratio of funded debt to Adjusted EBITDAR for the trailing twelve months ended September 30, 2012 was 2.0 times.

Segment Overview

We operate in two predominant business segments: transportation and manufacturing.

Transportation

The transportation segment produces several significant revenue streams. Our customers engage us to move cargo, generally for a per ton rate, from an origin point to a destination point along the Inland Waterways in the Company’s barges, pushed primarily by the Company’s towboats under affreightment contracts. Affreightment contracts include both term and spot market arrangements.

Our transportation segment’s revenue stream within any year reflects the variance in seasonal demand, with revenues earned in the first half of the year lower than those earned in the second half of the year. Historically, grain has experienced the greatest degree of seasonality among all the commodity segments, with demand generally following the timing of the annual harvest. Demand for grain movement generally begins around the Gulf Coast and Texas regions and the southern portions of the Lower Mississippi River, or the Delta area, in late summer of each year. The demand for freight spreads north and east as the grain matures and harvest progresses through the Ohio Valley, the Mid-Mississippi River area, and the Illinois River and Upper Mississippi River areas. System-wide demand generally peaks in the mid-fourth quarter. Demand normally tapers off through the mid-first quarter, when traffic is generally limited to the Ohio River as the Upper Mississippi River normally closes from approximately mid-December to mid-March, and ice conditions can hamper navigation on the upper reaches of the Illinois River. On average, for the last five-year period, the peak grain tariff rates have been almost double the trough rates.

Non-affreightment revenue is generated either by demurrage charges related to affreightment contracts or by one of three other contractual arrangements with customers: charter/day rate contracts, outside towing contracts, or other marine services contracts.

Under charter/day rate contracts the Company’s boats and barges are leased to third parties who control the use (loading, movement, unloading) of the vessels. The ton-miles for charter/day rate contracts are not included in the Company’s tracking of affreightment ton-miles, but are captured and reported as part of ton-miles non-affreightment.

Outside towing revenue is earned by moving barges for other affreightment carriers at a specific rate per barge move.

Marine services revenue is earned for fleeting, shifting and cleaning services provided to third parties.

Transportation revenue for each contract type for the quarter and nine months ended September 30, 2012 is summarized in the following key operating statistics table.


	Three Months Ended September 30, 2012		% Change to Prior Year Quarter Increase (Decrease)			Nine Months Ended September 30, 2012		% Change to Prior Year YTD Increase (Decrease)
Ton-miles (in thousands):
Total dry		5,748,665		(26.0	%)		20,321,618		(4.4	%)
Total liquid		444,399		(12.7	%)		1,422,045		(7.1	%)

Total affreightment ton-miles		6,193,064		(25.2	%)		21,743,663		(4.6	%)
Total non-affreightment ton-miles		794,992		(21.3	%)		2,634,745		(3.9	%)

Total ton-miles		6,988,057		(24.8	%)		24,378,407		(4.5	%)

Average ton-miles per affreightment barge		3,423		(7.1	%)		11,670		15.4	%
Rates per ton mile:
Dry rate per ton-mile				(6.2	%)				(4.8	%)
Fuel neutral dry rate per ton-mile				(5.9	%)				(7.6	%)
Liquid rate per ton-mile				3.7	%				12.1	%
Fuel neutral liquid rate per-ton mile				6.6	%				8.5	%
Overall rate per ton-mile	$	16.37		(3.2	%)	$	15.94		(2.6	%)
Overall fuel neutral rate per ton-mile	$	16.50		(2.5	%)	$	15.47		(5.5	%)
Revenue per average barge operated (in thousands)	$	79,527		(3.0	%)	$	239,971		10.9	%
Fuel price and volume data:
Fuel price	$	3.18		2.9	%	$	3.13		7.2	%
Fuel gallons (in thousands)		12,008		(18.2	%)		38,638		(11.1	%)
Revenue data (in thousands):
Affreightment revenue	$	101,167		(27.6	%)	$	346,071		(6.9	%)
Non-affreightment revenue
Towing		9,900		(26.5	%)		33,999		(4.8	%)
Charter and day rate		29,013		19.8	%		84,063		34.7	%
Demurrage		9,783		(21.7	%)		27,024		(18.1	%)
Other		6,725		3.5	%		21,900		23.3	%

Total non-affreightment revenue		55,421		(2.2	%)		166,986		12.2	%

Total transportation segment revenue	$	156,588		(20.3	%)	$	513,057		(1.5	%)

Data regarding changes in our barge fleet for the quarter ended September 30, 2012 is summarized in the following table.

Barge Fleet Changes


Barges —Current Quarter	Dry			Tankers			Total
Barges operated as of June 30, 2012		1,617			321			1,938
Retired (includes reactivations)		(12	)		(2	)		(14	)
New builds		67			15			82
Purchased		—			—			—
Change in number of barges leased		(7	)		—			(7	)

Barges operated as of September 30, 2012		1,665			334			1,999


Barges—Current Year	Dry			Tankers			Total
Barges operated as of December 31, 2011		1,961			316			2,277
Retired (includes reactivations)		(345	)		(13	)		(358	)
New builds		77			23			100
Purchased		—			8			8
Change in number of barges leased		(28	)		—			(28	)

Barges operated as of September 30, 2012		1,665			334			1,999

Data regarding our boat fleet at September 30, 2012 is contained in the following table.

Owned Boat Counts and Average Age by Horsepower Class


Horsepower Class	Number		Average Age
1950 or less		32		33.7
Less than 4650		23		36.8
Less than 6250		33		35.5
6800 and over		12		33.8

Total/overall age		100		34.9

In addition, the Company had 13 chartered boats in service at September 30, 2012. Average life of a boat (with refurbishment) exceeds 50 years. At September 30, 2012, two boats were classified as assets held for sale.

Manufacturing

Our manufacturing segment consists of our subsidiary, Jeffboat which was the second largest manufacturer of brown-water barges in the United States in 2011 according to Criton Corporation, publisher of River Transport News. This segment manufactures barges both for external parties as well as internal use, with internal revenue and associated costs eliminated in the condensed consolidated financial statements presented herein.

Manufacturing Segment Units Produced for External Sales or Internal Use


	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
External sales:
Deck barges		—		15		—		27
Dry cargo barges		18		48		162		135

Total external units sold		18		63		162		162

Internal sales:
Liquid tank barges		15		2		23		2
Dry cargo barges		35		30		45		55

Total units into production		50		32		68		57

Total units produced		68		95		230		219

Consolidated Financial Overview—Non-GAAP Financial Measure Reconciliation

COMMERCIAL BARGE LINE COMPANY

NET INCOME (LOSS) TO ADJUSTED EBITDA AND EBITDAR RECONCILIATION

( Unaudited—Dollars in thousands)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2012			2011			2012					2011
Consolidated Net Income (Loss)	$	(297	)	$	5,062		$	11,100				$	(24,419	)
Less Discontinued Operations, Net of Income Taxes		—			85			26					122

Net (Loss) Income from Continuing Operations		(297	)		4,977			11,074					(24,541	)
Adjustments from Continuing Operations:
Interest Income		—			(4	)		(5	)				(162	)
Interest Expense		7,874			7,553			23,185					22,645
Depreciation and Amortization		26,148			26,626			80,353					82,020
Taxes		(273	)		(486	)		6,659					(16,784	)

EBITDA from Continuing Operations		33,452			38,666			121,266					63,178

Adjustments from Continuing Operations for EBITDAR:
Long-term Boat and Barge Rents		3,822			3,873			11,592					11,550

EBITDAR from Continuing Operations		37,274			42,539			132,858					74,728

Adjustments from Discontinued Operations:
Interest Income		—			—			—					(18	)
Depreciation and Amortization		—			23			—					61

EBITDA from Discontinued Operations		—			108			26					165

Adjustments from Discontinued Operations for EBITDAR:
EBITDAR from Discontinued Operations		—			108			26					165

Consolidated EBITDAR	$	37,274		$	42,647		$	132,884				$	74,893

Other Adjustments to EBITDAR
Other Non-cash or Non-comparable charges included in net income:
Continuing Ops
Share based compensation and restructuring	$	21		$	943		$	234				$	4,586
Other restructuring/acqusition-related costs and consulting		3,887			3,455			9,671					14,994
Other non-cash impacts of purchase accounting		(2,028	)		(730	)		(6,084	)				(1,952	)
Purchase accounting impact on boat/barge gains		2,866			559			28,311					3,688
Gain on excess boat sales		335			—			(10,943	)				—
Insurance gain on 2011 flood claims		(11,442	)		—			(11,442	)				—
Drought, flood and other costs		24,164			1,325			26,714		(A	)		17,943

Total Continuing Ops		17,803			5,552			36,461					39,259

Adjusted EBITDAR from Continuing Ops		55,077			48,091			169,319					113,987

Discontinued Ops
Merger Related and Consulting Expenses		—			—			—					20

Total Discontinued		—			—			—					20

Adjusted EBITDAR from Discontinued Ops		—			108			26					185

Adjusted Consolidated EBITDAR	$	55,077		$	48,199		$	169,345				$	114,172

(A)

In order to provide a comprehensive estimate of the total drought effect, we have included $2,550 of drought related impact, incurred in June, in the nine months ended September 30, 2012. This amount was not included in adjusted EBITDAR in the second quarter 10Q filed on August 14, 2012 as materiality and duration of the drought were not known at that time.

EBITDAR consists of earnings before interest, taxes, depreciation, amortization, long-term boat and barge rents. Adjusted EBITDAR includes adjustments to historical EBITDAR that we do not consider indicative of our core operating functions or ongoing operating performance after the Acquisition. EBITDAR and Adjusted EBITDAR are not calculated or presented in accordance with U.S. GAAP and other companies in our industry may calculate EBITDAR and Adjusted EBITDAR differently than we do. As a result, these financial measures have limitations as analytical and comparative tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. However, we believe that EBITDAR and Adjusted EBITDAR provide relevant and useful information, which is often reported and widely used by analysts, investors and other interested parties in our industry. We consider EBITDAR and Adjusted EBITDAR to be meaningful indicators of core operating performance and we use it as a means to assess the operating performance of our business segments. EBITDAR and Adjusted EBITDAR should not be considered as measures of discretionary cash available to us to invest in the growth of our business as both measures exclude certain items that are relevant in understanding and assessing our results of operations and cash flows. EBITDAR and Adjusted EBITDAR provide management with an understanding of one aspect of earnings before the impact of investing and financing transactions and income taxes. We believe that our use of long-term leases to fund the construction and acquisition of revenue-producing assets is a financing decision and therefore we exclude rents related to such arrangements from this measure for its internal analyses. In calculating these financial measures, we make certain adjustments that are based on assumptions and estimates that may prove to have been inaccurate. In addition, in evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of EBITDAR and Adjusted EBITDAR should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Outlook

Historically, as the Company moved into the third quarter of most years, it experienced a tightening of barge capacity, higher rates and increased volumes. This year severe, persistent drought conditions have presented some of the most challenging operating conditions the industry has experienced in several decades. Not only is this drought impacting navigating conditions by negatively impacting load drafts, tow sizes and system speed, the drought decreased agricultural yields for the current crop year and is expected to result in the lowest levels of grain exports through the Gulf since the mid-1990’s. In non-agricultural market sectors, the Company continues to see strength in energy, as United States coal exports have remained strong and North American oil production continues to rise. Industry tank barge capacity currently lags demand and the Company expects to continue to pursue taking advantage of this market dynamic. Domestic utility coal demand continues to be sluggish as a result of high inventories, coal’s recent competitive disadvantage to natural gas and increased emissions regulations. The overall economic recovery in the United States has slowed, reducing demand for our dry cargo services. These factors have increased the pricing pressure on barge freight. The Company cannot predict how long it will face drought conditions but expects to continue to tightly control expenses while maintaining the safety of our employees, its equipment, the environment and its customers’ cargoes. Navigational draft restrictions, reduced tow sizes and slower system speed will, for the duration of the current conditions, continue to reduce our volumes and boat efficiency and increase costs in the near term. Each one inch reduction in load draft represents the loss of 17 tons of cargo, extrapolating to a 25 barge tow that represents a 425 ton loss of efficiency and a 510 ton loss for a 30 barge tow. Current operating conditions on the Mississippi River below Cairo, Illinois have stabilized in recent weeks but are still not where we would ordinarily expect them for this time of year. In the St. Louis area, water levels remain challenging and could worsen as the Missouri River reservoir releases are restricted during the winter season. We expect that we will continue to deal with the effects of the drought at some level for some time until significant rains refill the watershed.

The Company expects to continue to focus on operating efficiencies, including maintain our network density and tight coordination of multiple freight movements to minimize non-revenue producing activities. The Company also continues to refine its previously announced capital expenditure plan in order to deploy new investment to opportunities with the highest anticipated returns. These reviews have resulted in a reduction of our previously anticipated capital spending by approximately $50 million through the sale of some of the dry hopper barges previously anticipated to be put into service by the Company. Additionally, the Company has sold a limited number of liquid tank barges. The Company expects to continue to make adjustments to its capital spending plans to position itself to best match the extent and timing of anticipated demand, while preserving liquidity in the interim.

In our manufacturing segment, Criton reported that in 2011 there was a net expansion in the dry cargo fleet. Given the age of many barges in the industries dry fleet; we expect a further reduction in the industry fleet of dry cargo barges over the next three to five years. This may lead to more consistent demand and stable pricing for barge building by our manufacturing segment, over the long term. However, the recent slowdown in dry cargo transportation demand has impacted immediate demand for new barge production. Based on current projections, we believe that available production capacity is sold out through the first quarter of 2013

The manufacturing segment’s external revenue backlog at the period end was $47.4 million, approximately $69.7 million lower than the September 30, 2011 backlog and approximately $53.8 million lower than the December 31, 2011 backlog.

Overall, we are monitoring market conditions closely and are maintaining a disciplined approach to our operations that will allow us to continue to realize and build upon the gains we achieved in operating efficiency in 2011 and through the first nine months of 2012.

OPERATING RESULTS by BUSINESS SEGMENT

Quarter Ended September 30, 2012 as compared with September 30, 2011

COMMERCIAL BARGE LINE COMPANY OPERATING RESULTS by BUSINESS SEGMENT

(Dollars in thousands except where noted)

(Unaudited)


										% of Consolidated
										Revenue
	Quarter Ended September 30,									3rd Quarter
	2012			2011			Variance			2012			2011
REVENUE
Transportation and Services	$	156,588		$	196,350		$	(39,762	)		93.8	%		84.8	%
Manufacturing (external and internal)		47,182			56,907			(9,725	)		28.3	%		24.6	%
Intersegment manufacturing elimination		(36,885	)		(21,821	)		(15,064	)		(22.1	%)		(9.4	%)

Consolidated Revenue		166,885			231,436			(64,551	)		100.0	%		100.0	%

OPERATING EXPENSE
Transportation and Services		149,291			184,195			(34,904	)
Manufacturing (external and internal)		47,356			57,206			(9,850	)
Intersegment manufacturing elimination		(36,885	)		(21,821	)		(15,064	)

Consolidated Operating Expense		159,762			219,580			(59,818	)		95.7	%		94.9	%

OPERATING INCOME
Transportation and Services		7,297			12,155			(4,858	)
Manufacturing (external and internal)		(174	)		(299	)		125

Consolidated Operating Income		7,123			11,856			(4,733	)		4.3	%		5.1	%
Interest Expense		7,874			7,553			321
Other Expense (Income)		(181	)		(188	)		7

Income (Loss) Before Income Taxes		(570	)		4,491			(5,061	)
Income Tax Benefit		(273	)		(486	)		213
Discontinued Operations		—			85			(85	)

Net (Loss) Income	$	(297	)	$	5,062		$	(5,359	)

Domestic Barges Operated (average of period beginning and end)		1,969			2,395			(426	)
Revenue per Barge Operated (Actual)	$	79,527		$	81,983		$	(2,456	)

Revenue. As a result of the impact of the persistent drought conditions on the transportation segment, consolidated revenue decreased by $64.6 million to $166.9 million, a 27.9% decrease compared with $231.4 million for the quarter ended September 30, 2011.

Transportation segment revenues were hardest hit by the drought resulting in a decrease of $39.8 million, or 20.3% to $156.6 million. Total affreightment volume measured in ton-miles decreased in the third quarter of 2012 to 6.2 billion compared to 8.3 billion in the same period of the prior year driven by declines of 36.6% in bulk affreightment ton-mile volume and a 32.6% decline in grain affreightment ton-mile volume largely attributable to the aforementioned tow size and draft restrictions resulting from the drought conditions.

For the third quarter ended September 30, 2012, non-affreightment revenues, compared to the same period of the prior year, decreased by $1.3 million, or 2.2%, primarily due to the $4.8 million in higher charter/day rate revenue being more than offset by lower dry towing and lower demurrage revenue in the current year quarter

Overall transportation revenues decreased approximately 19.5% in the quarter ended September 30, 2012 on a fuel neutral basis compared to the same period of the prior year based on changes in volume and pricing. The impact of the volume decreases noted above, was exacerbated by a decline in overall fuel-neutral rates per ton-mile of approximately 2.5% in the quarter compared to prior year. Our achieved grain pricing, across all river segments, was down 11.3% in the quarter compared to the same period of the prior year.

Average revenues per barge operated decreased 3.0% in the third quarter of 2012, compared to the same period of the prior year. The decrease in the quarter was driven by the decline in affreightment revenue, partially offset by an increase in non-affreightment charter and day rate revenue. The change in liquid charter and day rate revenue resulted from higher asset deployment into this trade, with 18 more liquid barges on average in this service in the current year quarter. The predominant lanes of service for this trade are less affected by the current drought conditions.

Manufacturing segment revenues decreased 70.7% to $10.3 million, as 18 barges were sold compared to 63 sold in the prior year quarter. This decline is attributable to a significant portion of the manufacturing segments capacity being allocated to produce barges for the transportation segment during the quarter.

Operating Expense. Consolidated operating expense decreased by $59.8 million, or 27.2%, to $159.8 million in the third quarter of 2012 compared to the same quarter of 2011.

Transportation segment expenses were $34.9 million lower in the third quarter of 2012 than in the comparable quarter of 2011. The decrease in transportation segment operating expenses was attributable to an $11.4 million gain from the resolution of insurance contingencies surrounding a claim related to 2011 damage to one of our river terminals; $7.2 million lower fuel costs; $6.7 million lower boat and barge repairs related to both the boat repower program and lower repairs associated with the significant retirement of older barge assets; other reductions in operating costs related to lower production volume including fleeting, barge preparation and boat hire; and $1.7 million higher gains on disposition of barges and other assets.

Despite the decrease of $7.2 million in total fuel expense compared to the comparable quarter of 2011, fuel as a percent of segment revenues increased in the quarter by 1.3 points to 24.4% of segment revenues or $38.2 million. Fuel consumption decreased approximately 18.2% for the quarter compared to the same period of the prior year driven by lower volume and boat delays. The average net-of-hedge-impact price per gallon increased 2.9% to $3.18 per gallon in the quarter.

Manufacturing operating expenses decreased by $24.9 million due primarily to fewer external barges produced in the third quarter of 2012 compared to the same quarter of the prior year.

Operating Income. Consolidated operating income decreased by $4.7 million to $7.1 million in the third quarter of 2012 compared to the same quarter of 2011 primarily as a result of the declines in transportation segment revenues net of cost reductions attributable to the persistent drought conditions during the 2012 quarter. The drought conditions drove degradation of the operating ratio by 150 basis points in the quarter compared to the prior year. In total, based on operating metrics prior to the beginning of the drought, the estimated operating income impact of the current year drought has been estimated to be $24.2 million.

The manufacturing segment had operating losses of $0.2 and $0.3 million in the quarters ended September 30, 2012 and 2011, respectively despite selling forty-five fewer total barges externally than in the third quarter of 2011. We were able to maintain flat operating loss mainly due to improved labor and materials efficiencies in the shipyard. Manufacturing had approximately five fewer weather-related lost production days in the third quarter.

The drop in external sales was partially offset by an increase of eighteen barges manufactured for internal use as we continue to revitalize our fleet.

Interest Expense. Interest expense was essentially unchanged from the prior year quarter with lower average outstanding debt balances in the 2012 quarter offset by higher interest expense in the current year on obligations other than debt.

Income Tax Expense. The effective tax rates for the third quarters of 2012 and 2011 were 47.9% and (10.8%), respectively. Both rates represent the application of statutory rates to taxable income impacted by consistent levels of permanent book tax differences on differing expected full year income in 2012 compared to 2011. The effective tax rate in the three months ended September 30, 2011 was distorted by a discrete tax item of $1,877 resulting from a change in IRS Administrative Procedures related to transaction success fees.

Net Income (Loss). The net income was lower in the current year quarter due to the factors noted above.

Nine months Ended September 30, 2012 as compared with Nine months Ended September 30, 2011

COMMERCIAL BARGE LINE COMPANY OPERATING RESULTS by BUSINESS SEGMENT

(Dollars in thousands except where noted)

(Unaudited)


										% of Consolidated Revenue
	Nine Months Ended September 30,									3rd Quarter
	2012			2011			Variance			2012			2011
REVENUE
Transportation and Services	$	513,057		$	520,793		$	(7,736	)		85.0	%		85.6	%
Manufacturing (external and internal)		153,233			121,488			31,745			25.4	%		20.0	%
Intersegment manufacturing elimination		(62,597	)		(33,848	)		(28,749	)		(10.4	%)		(5.6	%)

Consolidated Revenue		603,693			608,433			(4,740	)		100.0	%		100.0	%
OPERATING EXPENSE
Transportation and Services		478,980			539,807			(60,827	)
Manufacturing (external and internal)		146,876			121,686			25,190
Intersegment manufacturing elimination		(62,597	)		(33,848	)		(28,749	)

Consolidated Operating Expense		563,259			627,645			(64,386	)		93.3	%		103.2	%
OPERATING INCOME (LOSS)
Transportation and Services		34,077			(19,014	)		53,091
Manufacturing (external and internal)		6,357			(198	)		6,555

Consolidated Operating Income (Loss)		40,434			(19,212	)		59,646			6.7	%		(3.2	%)
Interest Expense		23,185			22,645			540
Other Expense (Income)		(484	)		(532	)		48

Income (Loss) Before Income Taxes		17,733			(41,325	)		59,058
Income Tax (Benefit)		6,659			(16,784	)		23,443
Discontinued Operations		26			122			(96	)

Net Income (Loss)	$	11,100		$	(24,419	)	$	35,519

Domestic Barges Operated (average of period beginning and end)		2,138			2,407			(269	)
Revenue per Barge Operated (Actual)	$	239,971		$	216,366		$	23,605

Revenue. Consolidated revenues were essentially flat in the nine months ended September 30, 2012, at $603.7 million compared with $608.4 million for the nine months ended September 30, 2011.

As a result of the previously mentioned third quarter drought, transportation and services revenues decreased by $7.7 million, or 1.5% in the nine months ended September 30, 2012, compared to the same period of 2011. Total affreightment volume measured in ton-miles decreased for the nine months ended September 30, 2012, to 21.7 billion compared to 22.8 billion in the same period of the prior year again as a result of the third quarter drought conditions.

For the nine months ended September 30, 2012, non-affreightment revenues, compared to the same period of the prior year, increased by $18.1 million, or 12.2%, primarily due to higher charter/day rate revenue, higher liquid towing revenue, higher liquid demurrage and higher fleet revenue for the first half of the year but offset by drought impact in third quarter.

Revenues per average barge operated increased 10.9% for the nine months ended September 30, 2012, compared to the same period of the prior year; although through the first half of the year we were up 25% over the prior year; the erosion in revenues per barge is due primarily to the drought in the third quarter of 2012.

The increase in transportation segment revenues was achieved while operating a barge fleet that was 11.2% smaller on average than the prior year.

Manufacturing segment revenues increased 3.4% compared to the same period of the prior year to $90.6 million, with 162 total barges sold for the nine month period both current and prior year.

Operating Expense. Consolidated operating expense decreased by $64.4 million, or 10.3%, to $563.3 million in the nine months ended September 30, 2012, compared to the same period of 2011.

Transportation segment expenses were $60.8 million lower in the nine months ended September 30, 2012, than in the comparable period of 2011. The decrease in transportation segment operating expenses was attributable to $13.0 million lower boat and barge repairs related to both the boat repower program and lower repairs associated with the significant retirement of older barge assets, $10 .9 million reduction in fleeting, barge preparation, boat hire and claims; $6.0 million benefit of lower fuel pricing and improved fuel efficiency; $8.2 million additional net surplus from sale of barges and a $11.4 million gain from the resolution of insurance contingencies surrounding a claim related to 2011 flood damage to one of our river terminals. Additionally, selling, general and administrative (SG&A) expenses were decreased $9.9 million primarily due to reduction in restructuring and merger related expenses.

Manufacturing operating expenses were 4.1% lower at $84.3 million for the nine months ended September 30, 2012, after elimination of intersegment activity, due to improved labor and materials efficiencies in the shipyard while the same number of barges was produced for external sale.

Operating Income. Consolidated operating income increased by $59.6 million to $40.4 million in the nine months ended September 30, 2012, compared to an operating loss of $19.2 million in the same period in 2011. Operating income in the transportation segment increased by $53.1 million over the same period of 2011 driven by improved operating efficiencies, despite the decline in actual revenues during the period and the adverse operating conditions related to the drought in the third quarter, as discussed above.

Operating income in the manufacturing segment increased by $6.6 million driven by improved efficiency in labor and materials, higher production volume and favorable weather in the year nine months ended September 30, 2012 when compared to the prior year. Manufacturing had approximately twenty-four fewer weather-related lost production days in the nine months ended September 30, 2012 compared to the same periods of the prior year which contributed to the increased productivity in the current year quarter.

Interest Expense. Interest expense increased by $0.5 million in the nine months ended September 30, 2012 compared to the same period of the prior year. The increase resulted from a lower average outstanding debt balance in the nine months ended September 30, 2012, offset by higher interest expense in the current year on obligations other than debt.

Income Tax Expense. The effective tax rates for the nine months ended September 30, 2012 and 2011 were 37.6% and 40.6%, respectively. Both rates represent the application of statutory rates to taxable income impacted by consistent levels of permanent book tax differences on differing expected full year income in 2012 compared to 2011.

Net Income (Loss). The net income was higher in the current year quarter due to the reasons noted above.

LIQUIDITY AND CAPITAL RESOURCES

Based on past performance and current expectations we believe that cash generated from operations and the liquidity available under our capital structure, described below, will satisfy the working capital needs, capital expenditures and other liquidity requirements associated with our operations in 2012.

Our funding requirements include capital expenditures, operating costs, interest payments and other working capital requirements. Our primary sources of liquidity at September 30, 2012, were draws from our Credit Facility, cash generated from operations and proceeds from barge scrapping. Other potential sources of liquidity include proceeds from sale leaseback transactions and the sale of non-core, obsolete and surplus assets. We currently expect that our net 2012 capital expenditures may exceed $200 million, which we currently expect to fund with draws under our Credit Facility and proceeds from boat sales and barge scrapping. For information regarding capital expenditures and proceeds of boat and barge sales for the nine months ended September 30, 2012, see “Net Cash, Capital Expenditures and Cash Flow” below.

Our cash operating costs consist primarily of purchased services, materials and repairs, fuel, labor and fringe benefits and taxes (collectively presented as Cost of Sales on the consolidated statements of operations) and selling, general and administrative costs.

Concurrently with the Acquisition, on December 21, 2010, CBL, ACL LLC, ACLTS and Jeffboat (the “Borrowers”), and ACL and certain subsidiaries as guarantors, entered into a credit agreement (“credit agreement”), consisting of a senior secured asset-based credit facility in an aggregate principal amount of $475.0 million with a final maturity date of December 21, 2015 (“Credit Facility”). The proceeds of the Credit Facility are available for use for working capital and general corporate purposes, including certain amounts payable by ACL in connection with the Acquisition. Availability under the Credit Facility is capped at a borrowing base, calculated based on certain percentages of the value of the Borrower’s vessels, inventory and receivables and subject to certain blocks and reserves, all as further set forth in the

Credit Agreement. We are currently prohibited from incurring more than $390.0 million of indebtedness under the Credit Facility regardless of the size of the borrowing base until (a) all of the obligations (other than unasserted contingent obligations) under the indenture governing the 2017 Notes (defined below) are repaid, defeased, discharged or otherwise satisfied or (b) the indenture governing the 2017 Notes is replaced or amended or otherwise modified in a manner such that such additional borrowings would be permitted. At the Borrower’s option, the Credit Facility may be increased by $75.0 million, subject to certain requirements set forth in the Credit Agreement. The Credit Facility is secured by, among other things, a lien on substantially all of borrows’ tangible and intangible personal property (including but not limited to vessels, accounts receivable, inventory, equipment, general intangibles, investment property, deposit and securities accounts, certain owned real property and intellectual property), a pledge of the capital stock of each of ACL’s wholly owned restricted domestic subsidiaries, subject to certain exceptions and thresholds.

For any period that availability is less than a certain defined level set forth in the Credit Agreement (currently $48.8 million until the $390.0 million borrowing cap is further expanded) and until such level is exceeded for a consecutive 30-day period, the Credit Agreement imposes several financial covenants on the Borrowers, including (a) a minimum fixed charge coverage ratio (as defined in the Credit Agreement) of at least 1.1 to 1; and (b) a maximum first lien leverage ratio of 4.25 to 1.0. In addition, the Borrowers have agreed to maintain all cash (subject to certain exceptions) in deposit or security accounts with financial institutions that have agreed to control agreements whereby the lead bank, as agent for the lenders, has been granted control under specific circumstances. The Credit Agreement requires that the Borrowers comply with covenants relating to customary matters (in addition to those financial covenants described above), including with respect to incurring indebtedness and liens, using the proceeds received under the Credit Facility, effecting transactions with affiliates, making investments and acquisitions, effecting mergers and asset sales, prepaying indebtedness and paying dividends.

Our Indebtedness

On July 7, 2009, CBL issued $200 million aggregate principal amount of 12.5% senior secured second lien notes due July 15, 2017 (the “2017 Notes”). The issue price was 95.181% of the principal amount of the 2017 Notes. The original issue discount on the 2017 Notes was revised in purchase price accounting for the Acquisition to reflect a premium of $35 million, reflecting the fair market value of the 2017 Notes on the Acquisition date. The 2017 Notes are guaranteed by ACL and by certain of CBL’s existing and future domestic subsidiaries.

Additionally, we are allowed to sell certain assets and consummate sale leaseback transactions on other assets to enhance our liquidity position. For a discussion of the interest rate under our credit facility, see Note 2 of the Notes to Condensed Consolidated Financial Statements included in Part I, Item I of this report.

With the remaining 3.2 year term on the Credit Facility and remaining 4.7 year term on the 2017 Notes, we believe that we have an appropriate longer term, lower cost and flexible capital structure that will provide adequate liquidity and allow us to focus on executing our tactical and strategic plans through the various economic cycles.

Net Cash, Capital Expenditures and Cash Flow

In the nine months ended September 30, 2012, net cash provided by operations was $55.3 million compared to cash flow used in operations of $10.4 million for the nine months ended September 30, 2011. The change in cash provided by/used in operations is primarily attributable to improved operating results in the nine months ended September 30, 2012 compared to the prior year. The use of cash for working capital changes in the first nine months of 2012 was $15.7 million. The use of cash for working capital in the first nine months of 2011 was due to $29.2 million related primarily to the advance purchase of steel inventories in the manufacturing segment to lock in steel prices for builds early in that year.

Cash used in investing activities increased $75.1 million in the first nine months of 2012 to $117.0 million, with total property additions and other investing activities increasing to $166.2 million in 2012 from $48.7 million in the same period in 2011 and higher proceeds from surplus boat dispositions of $12.1 million in the first quarter of 2012 and higher cash provided by barge scrapping operations of $33.7 million in the nine months ended September 30, 2012. The capital expenditures in the first nine months of both 2012 and 2011 included new barge construction, capital repairs and investments in our facilities. During the first nine months of 2012 we also began a major initiative to repower and upgrade certain of our boat assets resulting in a higher level of investment in 2012.

Net cash provided by financing activities in the nine months ended September 30, 2012 was $63.5 million, compared to $50.6 million for the nine months ended September 30, 2011. These sources related to borrowings on the Credit Facility, a net increase in the level of bank overdrafts on our zero balance accounts, representing checks disbursed but not yet presented for payment and dividends paid decrease of $6.1 million.

CHANGES IN ACCOUNTING STANDARDS

ASU Number 2011-5 was issued in September 2011, amending Topic 220—Comprehensive Income. The ASU modifies alternative presentation standards, eliminating the option for disclosure of the elements of other comprehensive income within the statement of stockholder’s equity. Adoption of this ASU by the Company changed our previous presentation, but will not impact the components of other comprehensive income.

ASU Number 2011-12 subsequently modified the effective date of certain provisions of ASU 2011-5 concerning whether it is necessary to require entities to present reclassification adjustments by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements, reverting to earlier guidance until the Board completes its deliberations on the requested changes. The ASU, as modified, is effective for fiscal periods beginning after December 15, 2011.

ASU Number 2011-8 was issued in September 2011, amending Topic 350 Intangibles—Goodwill and Other. The ASU allows entities to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, whereas previous guidance required as the first step in an at least annual evaluation a computation of the fair value of a reporting entity. The Company has not yet determined if it will use the qualitative assessment in 2012. The ASU is effective for fiscal periods beginning after December 15, 2011.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. Some of the significant estimates underlying these financial statements include amounts recorded as reserves for doubtful accounts, probable loss estimates regarding long-term construction contracts, reserves for obsolete and slow moving inventories, pension and post-retirement liabilities, incurred but not reported medical claims, insurance claims and related insurance and third-party receivables, deferred tax liabilities, assets held for sale, revenues and expenses on special vessels using the percentage-of-completion method, environmental liabilities, valuation allowances related to deferred tax assets, expected forfeitures of share-based compensation, liabilities for unbilled barge and boat maintenance, liabilities for unbilled harbor and towing services, recoverability of acquisition goodwill and depreciable lives of long-lived assets.

No significant changes have occurred to these policies, which are more fully described in the Company’s filing on Form 10-K for the year ended December 31, 2011. Operating results for the interim periods presented herein are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. Our quarterly revenues and profits historically have been lower during the first six months of the year and higher in the last six months of the year due primarily to the timing of the North American grain harvest.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. As such, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The condensed consolidated balance sheet as of December 31, 2011 has been derived from the audited consolidated balance sheet at that date. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates and prices, such as fuel prices and interest rates, and changes in the market value of financial instruments. We are exposed to various market risks, including those which are inherent in our financial instruments or which arise from transactions entered into in the course of business. A discussion of our primary market risk exposures is presented below. The Company neither holds nor issues financial instruments for trading purposes.

Fuel Price Risk

For the nine months ended September 30, 2012, fuel expenses for fuel purchased directly and used by our boats represented 23.6% of our transportation revenues. Each one cent per gallon rise in fuel price increases our annual operating expense by approximately $0.6 million. We partially mitigate our direct fuel price risk through contract adjustment clauses in our term contracts. Contract adjustments are deferred either one quarter or one month, depending primarily on the age of the term contract. We have been increasing the frequency of contract adjustments to monthly as contracts renew to further limit our timing exposure. Additionally, fuel costs are only one element of the potential movement in spot market pricing, which generally respond only to long-term changes in fuel pricing. All of our grain movements, which comprised 16.1% of our total transportation segment revenues in the first nine months of 2012, are priced in the spot market. Spot grain

contracts are normally priced at, or near, the quoted tariff rates in effect for the river segment of the move at the time they are contracted, which ranges from immediately prior to the transportation services to 90 days or more in advance. We generally manage our risk related to spot rates by contracting for business over a period of time and holding back some capacity to leverage the higher spot rates in periods of high demand. Despite these measures fuel price risk impacts us for the period of time from the date of the price increase until the date of the contract adjustment (either one month or one quarter), making us most vulnerable in periods of rapidly rising prices. We also believe that fuel is a significant element of the economic model of our vendors on the river, with increases passed through to us in the form of higher costs for external shifting and towing. From time to time we have utilized derivative instruments to manage volatility in addition to our contracted rate adjustment clauses. Since 2008 we have entered into fuel price swaps with commercial banks for a portion of our expected fuel usage. These derivative instruments have been designated and accounted for as cash flow hedges, and to the extent of their effectiveness, changes in fair value of the hedged instrument will be accounted for through Other Comprehensive Income until the fuel hedged is used, at which time the gain or loss on the hedge instruments will be recorded as fuel expense. At September 30, 2012, a net asset of approximately $0.5 million has been recorded in the condensed consolidated balance sheet and the gain on the hedge instrument recorded in Other Comprehensive Income, net of negligible hedge ineffectiveness recorded as a reduction of fuel expense. Ultimate gains or losses will not be determinable until the fuel swaps are settled. Realized gains from our hedging program were $1.4 million and $8.9 million in the nine months ended September 30, 2012 and 2011, respectively. We believe that the hedge program can decrease the volatility of our results and protects us against fuel costs greater than our swap price. Further information regarding our hedging program is contained in Note 8 of the Notes to Condensed Consolidated Financial Statements included in Part I, Item I of this report. We may increase the quantity hedged based upon active monitoring of fuel pricing outlooks by the management team.

Interest Rate and Other Risks

At September 30, 2012, we had $219.0 million of floating rate debt outstanding, which represented the outstanding balance of the Credit Facility. If interest rates on our floating rate debt increase significantly, our cash flows could be reduced, which could have an adverse effect on our business, financial condition and results of operations. Each 100 basis point increase in interest rates, at our existing debt level, would increase our cash interest expense by approximately $2.2 million annually. This amount would be mitigated, in part, by the tax deductibility of the increased interest payments.

Foreign Currency Exchange Rate Risks

The Company currently has no direct exposure to foreign currency exchange risk although exchange rates do impact the volume of goods imported and exported that are transported by barge.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk are incorporated herein by reference from Item 2.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported accurately within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms. As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (pursuant to Exchange Act Rule 13a-15(b)). Based upon this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The conclusions of the CEO and CFO from this evaluation were communicated to the Audit Committee. We intend to continue to review and document our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

ITEM 1A.

RISK FACTORS

The Company continues to be subject to the risk factors previously disclosed in “Risk Factors” in the Company annual report on Form 10-K for the year ended December 31, 2011, as filed on March 9, 2012.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

Not applicable.

ITEM 6.

EXHIBITS


Exhibit No.		Description

31.1*		Certification by Mark K. Knoy, Chief Executive Officer, required by Rule 13a-14(a) of the Securities Exchange Act of 1934.

31.2*		Certification by David J. Huls, Chief Financial Officer, required by Rule 13a-14(a) of the Securities Exchange Act of 1934.

32.1*		Certification by Mark K. Knoy, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350.

32.2*		Certification by David J. Huls, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.

101.INS		XBRL Instance Document*

101.SCH		XBRL Taxonomy Extension Schema Document*

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB		XBRL Taxonomy Extension Label Linkbase Document*

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document*

*	Filed herein

SIGNATURES

Pursuant to the requirements 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.


Commercial Barge Line Company

By:		/s/ MARK K. KNOY
		Mark K. Knoy
		President and Chief Executive Officer

By:		/s/ DAVID J. HULS
		David J. Huls
		Chief Financial Officer
		(Principal Financial Officer)

Date: November 8, 2012

INDEX TO EXHIBITS


Exhibit No.		Description

31.1*		Certification by Mark K. Knoy, Chief Executive Officer, required by Rule 13a-14(a) of the Securities Exchange Act of 1934.

31.2*		Certification by David J. Huls, Chief Financial Officer, required by Rule 13a-14(a) of the Securities Exchange Act of 1934.

32.1*		Certification by Mark K. Knoy, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350.

32.2*		Certification by David J. Huls, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.

101.INS		XBRL Instance Document*

101.SCH		XBRL Taxonomy Extension Schema Document*

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB		XBRL Taxonomy Extension Label Linkbase Document*

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document*

*	Filed herein

Large accelerated filer

Accelerated filer

Non-accelerated filer

x (Do not check if a smaller reporting company)

Smaller reporting company

COMMERCIAL BARGE LINE CO 10-Q