This 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.

See the risk factors included in Item 1A of this report for a detailed discussion of important factors that could cause actual results to differ materially from those reflected in such forward-looking statements. The potential for actual results to differ materially from such forward-looking statements should be considered in evaluating our outlook.

INTRODUCTION

Management's discussion and analysis of financial condition and results of operations ("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 American Commercial Lines Inc. (the "Company"). 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. 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, 2009, compared to the results of operations for the three and nine months ended September 30, 2008.

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, 2009, and an analysis of the Company's cash flows for the nine months ended September 30, 2009 and September 30, 2008.

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 the Company's filing on Form 10-K, as amended, for the year ended December 31, 2008. 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 since our filing on Form 10-K, as amended, for the fiscal year ended December 31, 2008.

OVERVIEW

Our Business

We are one of the largest and most diversified marine transportation and services companies in the United States, providing barge transportation and related services under the provisions of the Jones Act, as well as manufacturing barges and other vessels, including ocean-going liquid tank barges. 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 System, its connecting waterways and the Gulf Intracoastal Waterway (the "Inland Waterways"), accounting for 12.5% of the total inland dry cargo barge fleet and 13.1% of the total inland liquid cargo barge fleet as of December 31, 2008, according to Informa Economics, Inc., a private forecasting service ("Informa"). Our manufacturing subsidiary, Jeffboat LLC ("Jeffboat"), was the second largest manufacturer of dry cargo barges in the United States in 2008 according to Criton Corporation, publisher of River Transport News. We believe this also approximates our ranking in terms of construction of liquid tank barges. 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.

On April 1, 2008, we acquired the remaining ownership interests of Summit Contracting, LLC ("Summit"). We had previously made an investment equal to 30% ownership in this entity in May 2007. Summit provides environmental and construction services to a variety of customers. We also own Elliot Bay Design Group, a naval architecture and marine engineering firm, which continues to provide architecture, engineering and production support to its many customers in the commercial marine industry including Jeffboat. The combined operations of Summit and Elliot Bay Design Group are substantially smaller than either the transportation or the manufacturing segment.

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. According to Informa, the Inland Waterways fleet peaked at 23,092 barges at the end of 1998. From 1999 to 2005, the Inland Waterways fleet size was reduced by 2,407 dry cargo barges and 54 liquid tank barges for a total reduction of 2,461 barges, or 10.7%. From that date through the end of 2008 the industry fleet, net of barges scrapped, increased by 225 dry cargo barges and 149 tank barges, ending 2008 at 18,014 dry and 2,991 liquid barges, for a total fleet size of 21,005, 9.0% below the 1998 level. During 2008 the industry fleet placed 917 new dry cargo barges into service while retiring 932 dry cargo barges and expanded the liquid cargo barge fleet by 34 barges. Competition is intense for barge freight transportation. The top five carriers (by fleet size) of dry and liquid barges comprise over 62% of the industry fleet in each sector as of December 31, 2008. The average economic useful life of a dry cargo barge is generally estimated to be between 25 and 30 years and between 30 and 35 years for liquid tank barges.

The demand for dry cargo freight on the Inland Waterways is driven by the production volumes of dry bulk commodities transported by barge, as well as the lower cost of barging as a means of freight transportation. Historically, the major drivers of demand for dry cargo freight are coal for domestic utility companies, industrial and coke producers and export markets; construction commodities such as cement, limestone, sand and gravel; and coarse grain, such as corn and soybeans, for export markets. Other commodity drivers include products used in the manufacturing of steel, finished and partially-finished steel products, ores, salt, gypsum, fertilizer and forest products. The demand for our liquid freight is driven by bulk chemicals used in domestic production, including styrene, methanol, ethylene glycol, propylene oxide, caustic soda and other products. It is also affected by the demand for clean petroleum products and agricultural-related products such as ethanol, edible oils, bio-diesel and molasses.

Freight rates in both the dry and liquid freight markets are a function of the relationship between the amount of freight demand for these commodities and the number of barges available to load freight. We believe that the current supply/demand relationship for dry cargo freight indicates that the improvements in market freight rates obtained in the last several years should be sustained over the long term. Informa's 2008 forecast indicates that the existing dry fleet will expand by only approximately 5% through 2012 due to significant retirements of older barges, although the current economic crisis could impact this expectation. If the projected increase occurs, the industry dry fleet size would remain more than 6% lower than its peak in 1998. Certain spot rate contracts, particularly for grain, are subject to significant seasonal and other fluctuations. Trends in our liquid and bulk commodity markets have been significantly impacted by the current recession. We are uncertain as to the extent and timing of a recovery in these markets which are key to improvement in our profitability. We continue to pursue currently available volume, with

the most success in our grain and legacy coal markets, focusing on productivity, prudent capital investment and cost control to enable us to be ready to capitalize on market demand shifts. We continue to believe that barge transportation remains the lowest cost, most ecologically friendly provider of domestic transportation. We continue to provide quality services to our existing customers and to seek new customers, particularly modal conversions which offer the significant cost advantage of barge transportation for commodities currently being transported primarily by rail and truck.

For purposes of industry analysis, the commodities transported in the Inland Waterways can be broadly divided into four categories: grain, coal, liquids and bulk cargoes. Using these broad cargo categories the following graph depicts the total millions of tons shipped through the Inland Waterways for the quarters and nine months ended September 30, 2009 and September 30, 2008 by all carriers according to the US Army Corps of Engineers (the "Corps") Waterborne Commerce Statistics Center data.

The Corps does not estimate ton-miles, which we believe is a more complete 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.

[[Image Removed: (BAR CHART)]]

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

The Manufacturing Industry: Our manufacturing segment competes with companies also engaged in building equipment for use on both the Inland Waterway system and in ocean-going trade. Based on available industry data, we believe our manufacturing segment is the second largest manufacturer of dry cargo and liquid tank barges for Inland Waterways use in the United States. Due to the relatively long life of the vessels produced by inland shipyards and the relative over-supply of barges built in the late 1970's and early 1980's, there has only recently been a resurgence in the demand for new barges as older barges are retired or made obsolete by U.S. Coast Guard requirements for liquid tank barges. This heightened demand may ultimately increase the competition within the segment.

Consolidated Financial Overview

For the quarters ended September 30, 2009, and September 30, 2008, the Company had a net loss of $12.2 million compared to net income of $18.3 million. For the nine months ended September 30, 2009, and September 30, 2008, the Company had a net loss $21.4 million compared to net income of $24.3 million.

The following table displays the change in net income, separately enumerating certain individually significant non-comparable drivers of the changes in the periods presented.

                                               Quarter Ended                              Nine Months Ended
                                               September 30,                                September 30,
                                             2009         2008        Difference          2009          2008         Difference

Debt retirement expenses                    $ (17.7 )    $    -      $      (17.7 )    $    (17.7 )    $  (2.4 )    $      (15.3 )
Impairment of Summit                           (4.4 )         -              (4.4 )          (4.4 )          -              (4.4 )
Provision for contract dispute                 (2.3 )         -              (2.3 )          (2.9 )          -              (2.9 )
Net gain on sale and impairment of
surplus boats and barges                       15.3         0.5              14.8            17.5          0.6              16.9
Scrapping margin                                1.2         3.9              (2.7 )           2.5         11.9              (9.4 )
Interest expense                              (10.5 )      (7.5 )            (3.0 )         (30.8 )      (20.2 )           (10.6 )
Pension buy-out reversal                          -           -                 -               -          2.1              (2.1 )
RIF/Houston office closure                     (0.4 )         -              (0.4 )          (4.9 )       (1.9 )            (3.0 )
All other operating results                    (0.4 )      32.6             (33.0 )           7.4         48.5             (41.2 )

(Loss) Income from continuing operations
before income tax                           $ (19.2 )    $ 29.5      $      (48.6 )    $    (33.4 )    $  38.6      $      (72.0 )

Income taxes (benefit)                         (7.0 )      11.1             (18.1 )         (12.2 )       14.6             (26.8 )

Net (loss) income from continuing
operations                                  $ (12.2 )    $ 18.4      $      (30.5 )    $    (21.2 )    $  24.0      $      (45.2 )

Discontinued operations, net of tax         $  (0.0 )    $ (0.0 )    $        0.0      $     (0.2 )    $   0.3      $       (0.5 )

Net (loss) income                           $ (12.2 )    $ 18.3      $      (30.5 )    $    (21.4 )    $  24.3      $      (45.7 )

Note: Schedules may not foot due to rounding

Quarter and Nine Months ended September 30, 2009 compared to Quarter and Nine Months ended September 30, 2008

In the quarter and nine months ended September 30, 2009, the Company's income
(loss) from continuing operations before income taxes decreased by $48.6 million and $72.0 million, respectively to losses of $19.2 million and $33.4 million.

The decline in (loss) income from continuing operations before income taxes both for the quarter and nine month period ended September 30, 2009, resulted primarily from the decline in operating margin in our transportation and professional services businesses which more than offset stronger operating performance in our manufacturing segment.

Results for the quarter ended September 30, 2009, were also impacted by three significant non-comparable charges: (i) debt retirement expenses of $17.7 million related to the Company's third quarter debt refinancing, (ii) an impairment charge of $4.4 million related to the intangible assets of the Company's Summit engineering business and (iii) a charge of $2.3 million related to a customer contract dispute in its manufacturing segment. The current quarter also benefitted from higher net gains from asset management actions of approximately $12.0 million. Net gains from asset management actions include the gains on sale or disposal of boats, barges and other assets, impairment of long-lived tangible assets and scrapping margin In the third quarter 2009, though average outstanding debt declined from the prior year's third quarter, interest expense, driven by the Company's increased cost of debt, were $3.0 million higher, negatively impacting (loss) income from continuing operations before income taxes.

Results for the nine months ended September 30, 2009, in addition to the significant non-comparable charges in the quarter, were negatively impacted by severance related to current year reductions in force and expenses for the closure of the Houston office that exceeded the severance related to prior year actions by $3.0 million. The nine months ended September 30, 2008, also benefitted from a $2.1 million pension buyout reversal. Results for the nine months ended September 30, 2009, included higher rate-driven interest expenses that exceed prior year by $10.6 million. The nine months ended September 30, 2009, also benefitted from $7.5 million higher net gains from

asset management actions. The nine month benefit was lower than the benefit in the third quarter due to significantly less barge scrapping activity in the first six months of 2009 when compared to the same period of 2008.

The transportation segment, as illustrated in more detail in the chart in "Transportation" below, continued to be significantly affected by the reduced volumes in its high margin metals and chemicals lines of business ("negative revenue mix"). With ongoing lower demand in our most profitable lines of business and weak spot pricing on the remaining business, operating expenses and operating ratio for the quarter and nine months were significantly negatively impacted in comparison to the prior year. The significant impact of the negative mix shift, excluding grain, drove operating profit down $34.0 million in the quarter, on a 12.1% decrease in ton miles, and $60.6 million for the nine month period. The $19.0 million decline in grain pricing in the quarter drove an $8.2 million decline in grain profitability in the quarter and $10.6 million for the nine month period, despite $7.8 million of lower fuel prices to move grain and a 25% increase in grain volumes for the quarter due to strong volume gains in July and August compared to the prior year. The harvest delay impacted grain volumes and pricing in September, as grain volumes declined 56% compared to August, instead of increasing as is normal. We estimate the volume-related margin impact of the delay in the grain harvest at approximately $3 million in the quarter due to lower than normal September grain volume. Also, we continue to move significantly more empty barges, primarily as a result of an imbalance of northbound vs. southbound freight due to the economic conditions and the impact on northbound dry bulk volumes, primarily metals. We estimate that the incremental expense impact of moving these additional empties compared to prior year was $6.4 million in the quarter and $16.1 million for the nine month period. Net fuel (other than grain) impacted the quarter by a negative $4.6 million compared to the prior year quarter. For the nine month period we benefitted by $1.2 million compared to last year due to the rapidly rising fuel costs in last year's first nine months.

These negatives were partially offset by significantly higher boat productivity of $11.0 million in the quarter and $36.9 million for the first nine months. We used fewer boats per ton mile moved, as we increased loads per barge, optimized boat utilization, and had more favorable operating conditions. Additionally, higher net asset management gains of $12.0 million in the quarter and $7.5 million in the nine month period offset the negative factors in the quarter and nine month comparisons.

Manufacturing operating profit was $1.1 million higher in the quarter and $5.8 million higher for the nine month period than the respective comparable periods of 2008. This represents an improvement of 37.6% for the quarter and 44.5% for the nine month period, despite a $2.3 million charge to reserve for a customer contract claim dispute in the quarter. The improvements in both periods were primarily driven by a better mix of market-priced non-legacy barges, higher productivity and safe operations.

Operating income in our Professional Services business declined $4.9 million in the quarter and $7.4 million in the nine month period, primarily due to a $4.4 million non-cash impairment charge for intangible assets at our Summit engineering company. The impairment was driven by the lower estimates of future cash flows given the volume and margin declines at Summit since its acquisition in 2008. The lower operating performance was driven primarily by the effects of the recession on the number and margins on available projects.

We have continued to lower our cost structure with transportation SG&A down $2.3 million quarter-over-quarter and $3.4 million for the nine month periods including non-comparable charges. Wages in our SG&A total were down $1.1 million during the quarter. Manufacturing SG&A increased $2.3 million due to the charge for the customer dispute in the third quarter. For the nine months ended September 30, 2009, consolidated SG&A declined by $1.2 million despite the non-comparable charges included therein as scheduled in the table above.

For the quarter and nine months ended September 30, 2009, EBITDA was $22.4 million and $55.7 million compared to $49.6 million and $100.3 million, respectively, in the same period of the prior year. EBITDA as a percent of revenue was 10.4% in the third quarter compared to 15.8% in the prior year quarter. EBITDA as a percent of revenue was 8.7% in the nine months ended September 30, 2009, compared to 11.1% in the similar period of the prior year. See the table at the end of this Consolidated Financial Overview for a definition of EBITDA and a reconciliation of EBITDA to consolidated net income.

During the nine months ended September 30, 2009, we had $20.1 million of capital expenditures, inclusive of investment in software. The expenditures were attributable to boat and barge maintenance, work-in-process related

to new liquid tank barges begun in 2008 for use by the transportation segment, improvements to the shipyard, facility improvements and software.

Transportation

In general, as illustrated in the Industry Tonnage chart contained in the Industry section above, the third quarter for waterborne carriers was characterized by a continuation of weak overall demand, with approximately 7% declines in total tons in the quarter compared with the prior year.
Transportation segment revenues decreased by approximately $102 million, or 42%, in the quarter, and by approximately $223 million, or 33% for the nine months. Fuel-neutral transportation revenue decreased 35% in the quarter and 26% for the nine months ended September 30, 2009. The declines in the quarter were driven by a 12% decrease in ton miles, the negative revenue mix, reduced grain pricing and lower towing volumes. The fuel neutral average rate decrease was primarily driven by the negative mix shift and $19.0 million in the quarter and $37.6 million for the nine month period in lower grain pricing. Contract pricing has remained essentially intact. The nine contracts renewed in the 3rd quarter were renewed at approximately a 7% blended rate reduction and for the 15 renewals in the first nine months, we have had a blended price decrease of approximately 5%.

Similar to the first two quarters of 2009, the volume increases in our lower margin grain and legacy coal markets, and significant volume decreases in our highest margin steel and chemicals markets drove the negative mix shift. Most of this deterioration in mix was in the higher margin metals and chemicals market, where revenues, on a fuel-neutral basis were down 54% and 37% respectively for the quarter and 71% and 35% for the nine month period.

Though there was some recent improvement in metal market related volumes, it remains to be seen if the uptick is sustainable. There also has been a stabilization in our liquid chemicals business but no meaningful signs of a near term recovery in this market.

The chart below describes in more detail the fuel neutral change in revenue dollars for major commodity classes for the quarter and nine months ended September 30, 2009.

Transportation Segment Comparative Revenue Commodity Mix (Adjusted for Fuel)

Affreightment contracts comprised approximately 70% and 74% of the Company's transportation segment total revenues and 69% and 71% for the quarters nine months ended September 30, 2009 and 2008, respectively. Under such contracts our customers engage us to move cargo for a per ton rate from an origin point to a destination point along the Inland Waterways on the Company's barges, pushed primarily by the Company's towboats. Affreightment contracts include both term and spot market arrangements. The Company is responsible for tracking and reporting the tonnages moved under such contracts.

The remaining segment revenues ("non-affreightment revenues") were generated either by demurrage charges related to affreightment contracts or by one of three other distinct contractual arrangements with customers: charter/day rate contracts, outside towing contracts, or other marine services contracts. Transportation services revenue for each contract type is summarized in the key operating statistics table that follows.

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.

On average, 38 fewer liquid tank barges in the third quarter 2009 and 33 fewer liquid tank barges in the nine months ended September 30, 2009, were serving customers under charter/day rate contracts when compared to the same periods of 2008. This decrease in the number of barges drove charter and day rate revenue down approximately 23.5% in the quarter and 17.6% in the nine months ended September 30, 2009, over the comparable periods of the prior year. Additionally, the decrease in barges in charter/day rate service increases the number of barges available for affreightment service. Combined with the decrease in spot liquid barge demand in the quarter, this shift to affreightment drove much of the decline in ton-miles per average affreightment barge-day in the quarter.

Revenues per average barge operated decreased 38.0% in the third quarter 2009 over their third quarter 2008 level. Approximately 79% of the decrease was due to lower affreightment revenue and the remainder was due to lower non-affreightment revenue. Approximately two-thirds of the lower affreightment revenue per barge resulted from the negative revenue mix with the remainder attributable to fuel price de-escalation in the quarter. On a fuel neutral basis overall ton-mile rates decreased by 25.1% quarter over quarter and 23.7% for the first nine months 2009 compared to the first nine months 2008. Fuel prices related to non-grain affreightment term contracts had a negative $24.4 million impact on quarter over quarter revenue comparison and had a negative $49.6 million impact on the nine months revenue comparison. Grain prices declined by $19.0 and $37.6 million in the quarter and nine months ended September 30, 2009, compared to the same periods of the prior year. The average price per gallon for fuel decreased by 44% to $2.01 per gallon in the quarter and by more than 40% for the nine months ended September 30, 2009, to $1.95 per gallon.

. . .