TABLE OF CONTENTS

ARI®, Pressureaide®, Center Flow® and our railcar logo are our U.S. registered trademarks. Each trademark, trade name or service mark of any other company appearing in this prospectus belongs to its respective holder.

The market and industry data and forecasts included in this prospectus are based upon independent industry sources, including the Association of American Railroads, the Railway Supply Institute, Inc., Global Insight and the U.S. Department of Agriculture. Although we believe that these independent sources are reliable, we have not independently verified the accuracy and completeness of this information, nor have we independently verified the underlying economic assumptions relied upon in preparing any forecasts. See “Risk factors—Risks related to our business—The market and industry data contained in this prospectus, including estimates and forecasts relating to the growth of the railcar market, cannot be verified with certainty and may prove to be inaccurate.”

We have been advised by Global Insight that forecasts and projections included in this prospectus that have been attributed to Global Insight should not be construed as a guarantee that the forecasts and projections will, in fact, be achieved. These forecasts and projections have been prepared on the basis of certain assumptions, judgments and hypotheses and accordingly no representation or warranty of any kind is or can be made with respect to the accuracy or completeness of, and no representation or warranty shall be inferred from, the forecasts and projections. The forecasts and projections made by Global Insight herein are based on assumptions as to future events and, therefore, are subject to varying degrees of uncertainty.

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4	the cyclical nature of the railcar market;
4	the replacement demand for the aging North American railcar fleet;
4	the shift in the customer base from railroads to leasing companies and shippers; and
4	the consolidation of railcar manufacturers.

4	the health of the U.S. economy;
4	increases in production of a number of consumer and business durable goods;

4	increases in domestic and international demand for U.S. agricultural products;
4	increases in demand for corn used in ethanol production; and
4	the need to replace aging covered hopper railcars.

4	increases in manufacturing activity and the resulting demand for higher volumes of chemicals and gases;
4	increases in demand for petrochemicals, ethanol, edible and lubricating oils and liquid food products; and
4	the need to replace aging tank railcars.

4	Leading railcar manufacturer with focus on the covered hopper and tank railcar markets. We are a leading North American manufacturer of covered hopper and tank railcars. Over the last three years, we believe we have produced an estimated 33% of the covered hopper railcars and an estimated 16% of the tank railcars delivered in North America. Based on a report by the Association of American Railroads, these represent the two largest segments of the North American railcar industry, with covered hopper railcars representing approximately 30% and tank railcars representing approximately 19% of the total North American railcar fleet, based on the number of railcars in service. We believe our railcars are differentiated by their superior quality, innovation and reliability.
4	Modern non-union, low-cost railcar manufacturing facilities in strategic locations. Unlike many of our competitors, we manufacture all of our railcars in modern facilities built in the last ten years. We designed these facilities to provide manufacturing flexibility and allow for the production of a variety of railcar sizes and types. We strategically located these facilities in close proximity to our main customers and suppliers. This reduces freight time and costs for the components we purchase and the time for delivery of completed railcars. Over the past several years, we increased our production capacity and efficiency and reduced our costs per railcar through a number of targeted operational and design improvements, which has also reduced the amount of raw materials necessary for production of railcars. Currently none of our over 1,100 employees at our Paragould and Marmaduke railcar manufacturing facilities are represented by a union. However, employees of three of our repair facilities and one of our component manufacturing facilities, representing 16% of our total workforce as of September 30, 2005, are represented by a union.

4	Preferred access to components through in-house production, a joint venture and strategic sourcing arrangements. We produce many of the components necessary to our railcar manufacturing business ourselves and we own a one-third interest in, and our management team operates, our Ohio Castings joint venture, from which we obtain certain other components. We believe our in-house production capabilities and our involvement in this joint venture help us maintain access to components at competitive prices, despite industry-wide shortages of these potentially capacity constraining components. We also have developed and actively maintain strategic sourcing arrangements and strong relationships with our suppliers. These arrangements and relationships help ensure our continued access to critical components and raw materials that we use to produce railcars, including steel, wheels, and heavy castings. We believe our attention to strengthening our supply chain helps us maintain operational continuity and high production levels.
4	Integrated railcar repair and refurbishment and fleet management services complement railcar manufacturing. We provide a wide array of complementary products and services to the railcar industry. Unlike some other railcar manufacturers, we also repair, maintain and provide fleet management services for existing railcars, including railcars built by others, and manufacture railcar components for third parties and us. We believe this diverse product and service offering provides us with a competitive advantage relative to other railcar manufacturers, primarily in the form of cross- selling opportunities. We also believe that our ability to address the needs of our customers throughout the lifecycle of a railcar enhances our customer relationships and provides us with additional growth opportunities and unique insights into industry trends.
4	Strong relationships with a long-term customer base. We believe that our customers value our products and services. Many of our major customers have been doing business with us for a number of years, including CIT, Dow Chemical Company, GE Capital Corporation and Solvay America, Inc. Many of our customers have demonstrated a willingness to purchase several different types of our products and services over time. We believe we deliver high quality products and services to our customers with low operating and maintenance costs, while maintaining what we believe are low levels of warranty claims.
4	Strong management team with long-standing industry experience. We have an experienced senior operations management team that has an average of over 25 years of experience in the railcar and related manufacturing industries. Our senior operations management team, including our president, James J. Unger, has been with us since we began manufacturing railcars. This team conceived and built our Paragould and Marmaduke railcar manufacturing facilities and has been responsible for growing our revenues from $80.9 million in 1994 to $355.1 million in 2004.

4	Maintain and expand presence in covered hopper and tank railcar markets. We intend to maintain and expand our presence in the covered hopper and tank railcar markets by continuing to deliver high quality and innovative products. We believe our excellent customer relationships have enabled us to identify market demands that we then target through our product development and marketing efforts. We intend to continue the close collaboration between our customers and our engineering, marketing, operations and management personnel to meet demand and, where appropriate, to selectively expand production capacity.
4	Continue to improve operating efficiencies. We intend to build on the success of our production initiatives at our Paragould and Marmaduke railcar manufacturing facilities and plan to continue to identify opportunities to enhance operating efficiencies across these and our other manufacturing facilities. These opportunities include our continued streamlining of our manufacturing processes and our quality control initiatives. We also intend to continue the efforts

	of our design cost reduction team, formed in 2003, which has already significantly reduced our railcar production costs through standardization of components used in our railcars, implemented design changes to reduce the amount of raw material required for our railcars, and improved manufacturing techniques that reduce our labor requirements. These efforts should allow us to reduce our costs and maintain competitive prices.
4	Continue to grow railcar service and fleet management businesses and increase sales of railcar and industrial components. As the existing North American railcar fleet continues to age, we anticipate increased demand for maintenance and repair services and railcar components used in the maintenance and repair of railcars. Additionally, we expect growing demand for our fleet management services as ownership of railcars continues to shift away from the railroads and toward the shippers and leasing companies, which often outsource their fleet management activities to third-party service providers such as us. We intend to capitalize on these trends and we believe we are well positioned to provide increased services through our strategically located network of railcar repair and service facilities.
4	Leverage manufacturing expertise to selectively expand product portfolio. We may seek to expand our product portfolio to other selected types of railcars. Our management designed and constructed our Paragould manufacturing facility to be able to produce most railcar types, and we believe our adaptive production lines and flexible employees are able to shift production among various railcar types with minimal interruption to our operations. In addition, as the existing fleet of North American railcars is aging, expansion of our product portfolio into new railcar types will allow us to grow our business by capturing a portion of the natural replacement demand for existing railcar types. Our ability to produce other types of railcars positions us to respond to customer requests for production outside of our traditional markets and provides us additional manufacturing flexibility in the event the covered hopper or tank railcar markets weaken.
4	Selectively pursue strategic external growth opportunities. By significantly reducing our debt through this offering and with the establishment of a public market for our common stock, we believe we will have increased financial flexibility to supplement internal growth with select acquisitions, alliances or joint ventures. We also believe our in-house fabrication of railcar components and our Ohio Castings joint venture provide us with competitive advantages and we intend to enhance these advantages by selectively acquiring or establishing strategic relationships with railcar component manufacturers and suppliers of critical raw materials. While we have in the past engaged in preliminary discussions with certain parties regarding potential strategic acquisitions, alliances or joint ventures, as of the date of this prospectus, we are not currently engaged in any such discussions and do not have any commitments to enter into any acquisition, alliance or joint venture. We may also seek to expand our railcar components business into international markets on an opportunistic basis.

4	repay outstanding borrowings under our existing revolving credit facility and amend and restate our revolving credit facility;
4	repay the notes payable that we issued to ACF Industries Holding Corp. in connection with the acquisition of our joint venture interest in Ohio Castings, and that we issued to Arnos Corp., both of which are entities controlled by Carl C. Icahn, our principal beneficial stockholder and the chairman of our board of directors;
4	redeem all of our industrial revenue bonds;

For more information, see “Use of proceeds.”

Our outstanding shares of preferred stock include our mandatorily redeemable preferred stock and our new preferred stock. See “Description of capital stock.” Concurrently with this offering, we expect to issue to our president and chief executive officer, James J. Unger, the number of shares of our common stock obtained by dividing $6.0 million by the public offering price set forth on the cover page of this prospectus. See “Management—Executive compensation—Employment agreements.” Concurrently with this offering, we also intend to amend and restate provisions of our existing revolving credit facility to increase its size to $75 million and extend its term to three years from the closing of this offering, pursuant to a commitment letter we have obtained from North Fork Business Capital Corporation and our other lenders. See “Management’s discussion and analysis of financial condition and results of operations— Liquidity and capital reserves—Outstanding debt—Revolving credit facility” for a description of our existing revolving credit facility and the expected terms of our new revolving credit facility. Immediately prior to the closing of this offering, our parent company will merge with and into us pursuant to which all of the outstanding shares of our parent company’s capital stock will be exchanged for shares of our capital stock in the manner described below in “—Corporate Information.” We refer to this offering, the application of the proceeds of this offering as described above, the issuance of shares of our common stock to James J. Unger, the amendment and restatement of our revolving credit facility and the merger described below collectively as the “Transactions.”

OUR RELATIONSHIP WITH CARL C. ICAHN AND ENTITIES AFFILIATED WITH CARL C. ICAHN

Overview. Carl C. Icahn is our principal beneficial stockholder and is the chairman of our board of directors. Since our formation, we have entered into agreements relating to the acquisition of assets from and disposition of assets to entities controlled by Mr. Icahn, the provision of goods and services to us by entities controlled by Mr. Icahn, the provision of goods and services by us to entities affiliated with Mr. Icahn and other matters involving entities controlled by Mr. Icahn. We receive substantial benefit from these agreements and we expect that in the future we will continue to conduct business with entities affiliated with or controlled by Mr. Icahn. In 2002, 2003, 2004 and the first nine months of 2005, our revenues from affiliates of Mr. Icahn accounted for 45%, 34%, 24% and 14% of our total revenues, respectively. In addition, we receive other benefits from our affiliation with Mr. Icahn and companies controlled by Mr. Icahn, such as financial and advisory support, sales support and our participation in buying groups and other arrangements with entities controlled by Mr. Icahn. Until recently, most of our capital needs have been provided by entities controlled by Mr. Icahn.

Application of the net proceeds of this offering. We intend to use the net proceeds of this offering to, among other things, repay $           million of indebtedness that we owe to entities controlled by Mr. Icahn. We also intend to use $           million of the net proceeds of this offering to redeem all of our new preferred stock, all of which is held by Mr. Icahn and his affiliates, including all accumulated and unpaid dividends due on our preferred stock. For more information, see “Use of proceeds.”

Mr. Icahn’s holdings of our common stock. We have been advised that in December 2005, Modal LLC, a company controlled by Mr. Icahn, entered into a stock purchase agreement with the Foundation for a Greater Opportunity, or the Foundation, our other significant beneficial stockholder, to acquire all of our common stock held by the Foundation. The consummation of this acquisition of our common stock requires the completion of this offering and the approval of applicable authorities of the State of New York. If the parties obtain this approval, we have been advised that the parties expect that the purchase would be completed in the first three months of 2006. Pending the closing of this purchase, and for so long as the stock purchase agreement has not been terminated, the

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Foundation has granted Modal LLC an irrevocable proxy to vote all of the shares of our common stock held by the Foundation. The stock purchase agreement may be terminated by either party if the purchase does not occur by May 2006. As a result of these contemplated arrangements, we expect that Mr. Icahn will control approximately           % of the voting power of our capital stock following the offering. As a result, Mr. Icahn is, and will be, able to exert substantial influence over us, elect our directors and control most matters requiring board or shareholder approval. If, following this offering, Mr. Icahn does not acquire all of the shares of our common stock held by the Foundation, following the termination of the irrevocable proxy granted to Modal LLC, Mr. Icahn will continue to beneficially own           % of our common stock and will still be able to exert substantial influence over us. See “Principal stockholders— Icahn agreement to purchase Foundation shares.”

For information about the risks associated with our relationships with Carl C. Icahn and entities affiliated with Carl C. Icahn, see “Risk factors—Risks related to our business—After this offering, companies affiliated with Carl C. Icahn will continue to be important suppliers and customers,” “Risk factors—Risks related to our business—Services being provided to us by ARL, an entity controlled by Carl C. Icahn, may not be sufficient to meet our needs, which may require us to incur additional costs,” “Risk factors—Risks related to our business—After this offering, we may have reduced access to resources of, and benefits provided by, entities affiliated with Carl C. Icahn,” “Risk factors—Risks related to our business—We could be liable for liabilities associated with pension plans sponsored by companies controlled by Carl C. Icahn,” “Risk factors—Risks related to the purchase of our common stock in this offering—Our stock price may decline due to sales of shares by Carl C. Icahn and other stockholders,” “Risk factors—Risks related to the purchase of our common stock in this offering—Carl C. Icahn will continue to exert significant influence over us,” “Risk factors—Risks related to the purchase of our common stock in this offering—Mr. Icahn’s interests may conflict with the interest of our stockholders,” “Risk factors—Risks related to the purchase of our common stock in this offering—Upon the closing of this offering we may be a “controlled company” within the meaning of the Nasdaq National Market rules and you will not have the same protections afforded to shareholders of companies that are not “controlled companies” and, therefore, are subject to all of the Nasdaq National Market corporate governance requirements.” Also, see “Certain relationships and related party transactions—Transactions with Carl C. Icahn and entities affiliated with Carl C. Icahn” for more information about our affiliation with Mr. Icahn and entities affiliated with Mr. Icahn.

CORPORATE INFORMATION

American Railcar Industries, Inc., a Delaware corporation formed on November 16, 2005 (referred to as American Railcar Industries Delaware), will be the issuer of the common stock offered hereby. American Railcar Industries Delaware is a wholly owned subsidiary of American Railcar Industries, Inc., a Missouri corporation (referred to as American Railcar Industries Missouri). Immediately prior to the closing of this offering, American Railcar Industries Missouri will merge with and into American Railcar Industries Delaware, with American Railcar Industries Delaware being the surviving corporation. As a part of this merger American Railcar Industries Missouri will exchange all of its shares of common stock for shares of American Railcar Industries Delaware’s common stock on a one-for-          basis. In addition, American Railcar Industries Missouri will also exchange all of its new preferred stock for shares of American Railcar Industries Delaware’s new preferred stock on a one-for-one basis. We refer to the merger of American Railcar Industries Missouri with and into American Railcar Industries Delaware and these share exchanges collectively as the merger. The surviving corporation of the merger will be incorporated in Delaware and will be named American Railcar Industries, Inc. In this prospectus, references to “our company,” “we,” “us” and “our,” except where the context otherwise indicates, refer to American Railcar Industries Delaware and its consolidated subsidiaries and its predecessors, assuming the merger has occurred. The address of our principal executive offices is 100 Clark Street, St. Charles, Missouri, 63301. Our telephone number is (636) 940-6000. Our website address is www.americanrailcar.com. Information contained in or connected to our website is not part of this prospectus.

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The offering

Unless otherwise indicated, all of the information in this prospectus assumes the underwriters do not exercise their over-allotment option to purchase additional shares of our common stock. Please see “Description of capital stock” for a summary of the terms of our common stock.

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Unless otherwise indicated, all of the information in this prospectus relating to the number of shares of common stock to be outstanding after this offering:

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Summary Consolidated Financial Data

																									Nine months ended
					Years ended December 31,																				September 30,
					2000				2001				2002				2003				2004				2004				2005
																									(unaudited)
					(in thousands, except share data and number of railcars)
Consolidated statement of operations data:
Revenues
	Manufacturing operations(1)				$	200,691			$	181,438			$	138,441			$	188,119			$	316,432			$	226,759			$	409,208
	Railcar services(2)					38,093				32,703				30,387				29,875				38,624				27,572				32,940
		Total revenues				238,784				214,141				168,828				217,994				355,056				254,331				442,148
Cost of goods sold
	Cost of manufacturing operations(3)					187,375				169,952				134,363				174,629				306,283				216,027				377,181
	Cost of railcar services(4)					37,111				33,255				29,533				29,762				34,473				24,585				27,538
			Total cost of goods sold			224,486				203,207				163,896				204,391				340,756				240,612				404,719
		Gross profit				14,298				10,934				4,932				13,603				14,300				13,719				37,429
Selling, administrative and other						8,693				9,219				9,505				10,340				10,334				8,543				11,417
	Operating earnings (loss)					5,605				1,715				(4,573	)			3,263				3,966				5,176				26,012
Interest income(5)						5,777				4,770				3,619				3,161				4,422				2,122				1,265
Interest expense(6)						(13,687	)			(9,525	)			(4,853	)			(3,616	)			(3,667	)			(2,216	)			(3,577	)
Income (loss) from joint venture						—				—				—				(604	)			(609	)			(351	)			443
Earnings (loss) before income tax (benefit) expense						(2,305	)			(3,040	)			(5,807	)			2,204				4,112				4,731				24,143
Income tax (benefit) expense						(713	)			(1,074	)			(1,894	)			1,139				2,191				1,858				9,611
	Net earnings (loss)				$	(1,592	)		$	(1,966	)		$	(3,913	)		$	1,065			$	1,921			$	2,873			$	14,532
		Less preferred dividends				—				(3,070	)			(7,139	)			(9,690	)			(13,241	)			(9,296	)			(11,171	)
	Net earnings (loss) available to common shareholders				$	(1,592	)		$	(5,036	)		$	(11,052	)		$	(8,625	)		$	(11,320	)		$	(6,423	)		$	3,361
Weighted average shares outstanding, basic and diluted(7)						1,000				1,000				1,000				1,000				1,087				1,051				1,195
Net earnings (loss) per common share, basic and diluted(7)					$	(1,592	)		$	(5,036	)		$	(11,052	)		$	(8,625	)		$	(10,414	)		$	(6,111	)		$	2,813
Consolidated balance sheet data (at period end):
Cash and cash equivalents					$	2,342			$	1,476			$	183			$	65			$	6,943			$	50,605			$	26,201
Net working capital						32,096				35,172				16,065				15,084				46,565				83,355				31,197
Net property, plant and equipment						84,897				81,090				75,746				71,230				76,951				73,706				88,555
Total assets						204,764				191,229				187,590				196,508				356,840				300,764				262,024
Total liabilities						170,158				113,596				98,463				190,704				221,817				95,332				154,489
Total shareholders’ equity					$	34,606			$	77,633			$	89,127			$	5,804			$	135,023			$	205,432			$	107,535
Consolidated other operating data:
EBITDA(8)					$	12,202			$	8,764			$	1,698			$	9,067			$	9,604			$	9,599			$	31,427
Items decreasing EBITDA(9)					$	8,619			$	1,848			$	193			$	1,256			$	7,922			$	2,586			$	1,265
Capital expenditures					$	8,662			$	2,617			$	1,816			$	2,301			$	11,441			$	6,750			$	16,356
New railcars delivered						2,423				2,312				1,766				2,557				4,384				3,260				4,980
New railcar orders						2,054				1,598				1,861				4,432				9,644				6,626				13,000
New railcar backlog						1,031				317				412				2,287				7,547				5,653				15,567
Estimated backlog value(10)					$	60,417			$	19,864			$	26,906			$	129,850			$	494,107			$	365,097			$	1,132,788
Consolidated cash flow data:
Net cash provided by (used in) operating activities					$	5,217			$	13,434			$	10,611			$	(1,639	)		$	(17,082	)		$	1,946			$	27,831
Net cash used in investing activities						(8,782	)			(2,189	)			(535	)			(2,251	)			(11,037	)			(6,750	)			(16,356	)
Net cash provided by (used in) financing activities					$	5,490			$	(12,111	)		$	(11,369	)		$	3,772			$	34,997			$	55,344			$	7,783

      The following is a reconciliation of net earnings (loss) to EBITDA:

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		2003 to reflect the lower of cost or market value. Due to reduced demand for railcar repairs at this location, we elected to idle this facility until business conditions warrant its reopening.

	(c)	In 2004 and in the nine months ended September 30, 2004 and September 30, 2005, we incurred an estimated $7.9 million, $4.9 million and $1.5 million, respectively, in increased raw materials costs, consisting primarily of costs relating to steel and railcar components which we were unable to pass on to our customers under our then existing fixed-price customer contracts. Since the first quarter of 2004, we have renegotiated most of our railcar manufacturing contracts to include provisions that adjust the selling prices of our railcars to reflect increases or decreases in the costs of certain raw materials and components. As a result of this change to our railcar manufacturing contracts, we were able to pass on to our customers approximately 32% of the increased raw material and component costs with respect to the railcars that we produced and delivered in 2004. Most of our railcar manufacturing contracts covering railcars to be produced after September 30, 2005 allow for variable pricing to protect us against future changes in the cost of certain raw materials and components.

(10)

Estimated backlog reflects the total sales attributable to the backlog reported at the end of the particular period as if such backlog were converted to actual sales. Estimated backlog does not reflect potential price increases or decreases under most of our customer contracts that provide for variable pricing based on changes in the cost of certain raw materials and railcar components or the possibility that contracts may be canceled or railcar delivery dates delayed and does not reflect the effects of any cancellation or delay of railcar orders that may occur. See “Management’s discussion and analysis of financial condition and results of operations—Backlog.”

Risk factors

Investing in our common stock involves a high degree of risk. Before you invest in our common stock, you should understand and carefully consider the risks below, as well as all of the other information contained in this prospectus and our financial statements and the related notes included elsewhere in this prospectus. Any of these risks could materially adversely affect our business, financial condition, results of operations and the trading price of our common stock, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

Due in part to the highly cyclical nature of the railcar industry, we have incurred substantial operating losses in the past and may experience declines in revenue and substantial operating losses in the future.

Historically, the North American railcar market has been highly cyclical and we expect it to continue to be highly cyclical. During the most recent industry cycle, industry-wide railcar deliveries declined from a peak of 75,704 in 1998 to a low of 17,714 railcars in 2002. During this downturn, our revenues dropped from $238.8 million in 2000 to $168.8 million in 2002 and we incurred losses of $1.6 million, $2.0 million and $3.9 million in 2000, 2001 and 2002, respectively. We believe that downturns in the railcar manufacturing industry will occur in the future and will result in decreased demand for our products and services. The cycles in our industry result from many factors that are beyond our control, including economic conditions in the United States. Although railcar production has increased since 2002, industry professionals believe that demand for railcars may have reached a peak and may not persist if favorable economic and other conditions are not sustained. Even if a sustained economic recovery occurs in the United States, demand for our railcars may not match or exceed expected levels. An economic downturn may result in increased cancellations of railcar orders which could have a material adverse effect on our ability to convert our railcar backlog into revenues. If industry backlog for railcars declines below certain levels, CIT, one of our customers which accounts for 71% of our backlog as of September 30, 2005, will be permitted to cancel some or, in certain circumstances, all its orders with at least 180 days written notice, which could have a material adverse effect on our business, financial condition and results of operations. In addition, an economic downturn in the United States could result in lower sales volumes, lower prices for railcars and a loss of profits for us.

A substantial number of the end users of our railcars acquire railcars through leasing arrangements with our leasing company customers. Economic conditions that result in higher interest rates would increase the cost of new leasing arrangements, which could cause our leasing company customers to purchase fewer railcars. A reduction in the number of railcars purchased by our leasing company customers could have a material adverse effect on our business, financial condition and results of operations.

The cost of the raw materials that we use to manufacture railcars, particularly steel, are high and these costs are expected to increase. Any increase in these costs or delivery delays of these raw materials may materially adversely affect our business, financial condition and results of operations.

The production of railcars requires substantial amounts of steel. The cost of steel and all other materials, including scrap metal, used in the production of our railcars represents approximately 80% to 85% of our manufacturing costs. Although we have negotiated variable pricing provisions in most of our railcar manufacturing contracts that pass certain increases or decreases in our steel costs on to

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Risk factors

our customers, our business remains subject to risks related to price increases and periodic delays in the delivery of steel and other raw materials, all of which are beyond our control. The price for steel, the primary raw material component of our railcars, increased sharply in 2004 as a result of strong worldwide demand and supply limitations caused, in part, by steel industry consolidation and import trade barriers. Price levels for steel have increased again in 2005 and we expect worldwide demand for steel to increase, supplies to be more limited and prices to continue to increase in 2006. In addition, the price and availability of other railcar components that are made of steel have been adversely affected by the increased cost and limited availability of steel. Any fluctuations in the price or availability of steel, or any other material used in the production of our railcars, may have a material adverse effect on our business, financial condition and results of operations. In addition, if any of our raw material suppliers were unable to continue its business or were to seek bankruptcy relief, the availability or price of the materials we use could be adversely affected. Deliveries of our raw materials, and the components made from those raw materials, may also fluctuate depending on supply and demand for the raw material or governmental regulation relating to the raw material, including regulation relating to the importation of the raw material.

We have entered into contracts with most of our railcar customers that allow for variable pricing to protect us against future increases in the cost of certain raw materials and components, including steel. However, in 2004 and in the nine months ended September 30, 2005, we were unable to pass on an estimated $7.9 million and $1.5 million, respectively, in increases in raw material and components costs. As prices for steel, other raw materials and components increase, we may not be able to pass on such price increases to our customers in the future, which could adversely affect our operating margins and cash flows. Even if we are able to increase prices, any such price increases may reduce demand for our railcars. In addition, our customers may not be willing to accept contractual terms that provide for variable pricing and our competitors, in an effort to gain market share or otherwise, have agreed in the past, and may in the future agree, to railcar supply arrangements that provide for fixed pricing. As a result, we may lose railcar orders or we may be required to agree to supply railcars with fixed pricing provisions or be subject to less favorable contract terms, any of which could have a material adverse effect on our business, financial condition and results of operations.

Fluctuations in the supply of components and raw materials we use in manufacturing railcars could cause production delays or reductions in the number of railcars we manufacture, which could materially adversely affect our business, financial condition and results of operations.

Our railcar manufacturing business depends on the adequate supply of numerous components, such as railcar wheels, brakes, tank railcar heads, sideframes, axles, bearings, yokes, bolsters and other heavy castings, and raw materials, such as normalized steel plate. Over the last few years many suppliers have been acquired or ceased operations, which has caused the number of alternative suppliers of components and raw materials to decline. The combination of industry consolidation and high demand has caused recent industry-wide shortages of many critical components as reliable suppliers are frequently at or near production capacity. For example, with respect to railcar wheels, there are only two significant suppliers that continue to produce the type of component we use in our products. We rely on one of these suppliers for most of our railcar wheels. Also, a small percentage of the railcar wheels we use are refurbished and are obtained from scrapped railcars. Supply of these refurbished railcar wheels is available in limited quantities and is unpredictable because the supply of refurbished railcar wheels depends on the level and type of railcars being scrapped in any given period. The supply of steel is similarly limited. While we receive regular steel from three suppliers, we have entered into agreements this year requiring us to buy the lesser of a fixed volume or 75% of our steel requirements from one supplier. In addition, there is currently only one North American supplier of the types and sizes of normalized steel plate we use in the production of many of our tank railcars.

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Risk factors

Supply constraints are exacerbated in our industry because, although multiple suppliers may produce certain components, railcar manufacturing regulations and the physical capabilities of manufacturing facilities restrict the types and sizes of components and raw materials that manufacturers may use. In addition, we do not carry significant inventories of components and procure many of our components on a just-in-time basis. With the recent increased demand for railcars, our remaining suppliers are facing significant challenges in providing components and materials on a timely basis to all railcar manufacturers, including to us. In the event that our suppliers of railcar components and raw materials were to stop or reduce the production of railcar components and raw materials that we use, go out of business, refuse to continue their business relationships with us or become subject to work stoppages, our business would be disrupted. Our inability to obtain components and raw materials in required quantities or of acceptable quality could result in significant delays or reductions in railcar shipments. Any of these events would materially and adversely affect our operating results. Furthermore, our ability to increase our railcar production to expand our business depends on our ability to obtain an increased supply of these railcar components and raw materials.

While we believe that we may, in certain circumstances, secure alternative sources of these components and materials, we may incur substantial delays and significant expense in doing so, the quality and reliability of alternative sources may not be the same and our operating results may be materially adversely affected. Alternative suppliers might charge significantly higher prices for railcar components and materials than we currently pay. Even if alternative suppliers are available to us, these suppliers may be unacceptable to our customers because our customers often specify the components we may use in railcars manufactured for them. Under such circumstances, the disruption to our business could have a material adverse impact on our customer relationships, business, financial condition and results of operations.

We operate in a highly competitive industry and we may be unable to compete successfully, which would materially adversely affect our results of operations.

We face intense competition in all of our markets. In each of our covered hopper and tank railcar manufacturing businesses, we have two principal competitors. Both of our principal competitors in the tank railcar market, Trinity Industries, Inc. and the Union Tank Car Company, and one of our principal competitors in the covered hopper railcar market, Trinity Industries, Inc., have substantially greater resources and produce substantially more railcars than we do. For example, according to Trinity Industries, Inc.’s annual report for the year ended December 31, 2004 and its quarterly report for the nine months ended September 30, 2005, Trinity delivered a total of approximately 15,100 and 17,016 railcars, respectively, during those periods in North America. By comparison, for the year ended December 31, 2004 and for the nine months ended September 30, 2005, we delivered a total of approximately 4,384 and 4,980 railcars, respectively, during those periods in North America. In addition, some of these and other railcar manufacturers produce railcars primarily for use in their own railcar leasing operations, competing directly with leasing companies, some of which are our largest customers. Some of our competitors have greater financial and technological resources than we have. Our competitors may increase their participation in the railcar markets in which we compete and other railcar manufacturers that currently do not manufacture covered hopper or tank railcars may choose to compete directly with us. Railcar purchasers’ sensitivity to price and strong price competition within the industry have historically limited our ability to increase prices to obtain better margins on our railcars. Additionally, as we selectively seek to manufacture different types of railcars we will be competing against railcar manufacturers with significantly more experience than we have with regard to such railcar types. Our competition for the sale of railcar components includes our competitors in the railcar manufacturing market as well as a concentrated group of companies whose primary business focus is the production of one or more specialty components. We compete with numerous

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Risk factors

companies in our railcar fleet management and railcar repair services business, ranging from companies with greater resources than we have to small, local companies.

In all our markets, in addition to price, competition is based on quality, reputation, reliability of delivery, product performance, customer service and other factors. In particular, technological innovation by any of our existing competitors, or new competitors entering any of the markets in which we do business, could put us at a competitive disadvantage. We may be unable to compete successfully or retain our market share in our established markets. Increased competition for the sales of our railcars, our fleet management and repair services and our railcar components could result in price reductions, reduced margins and loss of market share, which could materially adversely affect our prospects, business, financial condition and results of operations.

Equipment failures, delays in deliveries or extensive damage to our facilities, particularly our railcar manufacturing facilities in Paragould or Marmaduke, Arkansas, could lead to production or service curtailments or shutdowns.

We manufacture our railcars at manufacturing facilities in Paragould and Marmaduke, Arkansas. An interruption in manufacturing capabilities at either of these facilities, as a result of equipment failure or other reasons, could reduce or prevent the production of our railcars. A halt of production at either facility could severely delay scheduled railcar delivery dates to our customers and affect our production schedule, which would delay future production. Any significant delay in deliveries to our customers could result in the termination of orders, cause us to lose future sales and negatively affect our reputation among our customers and in the railcar industry, all of which would materially adversely affect our business and results of operations. Additionally, production delays or interruptions at our Jackson, St. Charles or Kennett, Missouri components manufacturing facilities or at our Ohio Castings joint venture, all of which provide key components to our Paragould and Marmaduke railcar manufacturing facilities, could contribute to delays of railcar deliveries and order cancellations. Interruptions at our repair, cleaning and maintenance facilities, including our mobile repair units, may also have a material adverse effect on our business. All of our manufacturing and service facilities are also subject to the risk of catastrophic loss due to unanticipated events, such as fires, earthquakes, explosions, floods or weather conditions. We may experience plant shutdowns or periods of reduced production as a result of equipment failures, loss of power, gray outs, delays in deliveries or extensive damage to any of our facilities, which could have a material adverse effect on our business, results of operations or financial condition.

We depend upon a small number of customers that represent a large percentage of our revenues. The loss of any single customer, or a reduction in sales to any such customer, could have a material adverse effect on our business, financial condition and results of operations.

Railcars are typically sold pursuant to large, periodic orders and, therefore, a limited number of customers typically represents a significant percentage of our railcar sales in any given year. Our top ten customers based on revenues represented, in the aggregate, approximately 77%, 79% and 79% in 2002, 2003 and 2004, respectively, of our total revenues. Moreover, our top three customers based on revenues represented, in the aggregate, approximately 65%, 70% and 59% in 2002, 2003 and 2004, respectively, of our total revenues. In 2004, sales to our top three customers accounted for approximately 23%, 20% and 16%, respectively, of our total revenues. In the nine months ended September 30, 2005, sales to our top three customers accounted for approximately 17%, 16% and 15%, respectively, of our total revenues. The loss of any significant portion of our sales to any major customer, the loss of a single major customer or a material adverse change in the financial condition of any one of our major customers could have a material adverse effect on our business, financial condition and financial results.

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Risk factors

If we lose any of our executive officers or key employees, or Carl C. Icahn, the chairman of our board of directors, our operations and ability to manage the day-to-day aspects of our business may be materially adversely affected.

We believe our success depends to a significant degree upon the continued contributions of our executive officers and key employees, both individually and as a group. Our future performance will substantially depend on our ability to retain and motivate them. If we lose any of our executive officers or key employees or are unable to recruit qualified personnel, our ability to manage the day-to-day aspects of our business may be materially adversely affected. It would be difficult to replace any of our executive officers or key employees without materially adversely affecting our business operations because our executive officers and key employees have many years of experience with our company and within the railcar industry and other manufacturing industries and strong personal ties with many of our important customers and suppliers. Additionally, Mr. Icahn and his affiliated entities have been key resources for strategic and management advice, which we have obtained at no cost. We believe the availability and access to these resources has provided us with a competitive advantage. If Mr. Icahn were no longer the chairman of our board of directors we could lose access to these resources. Furthermore, if Mr. Icahn were no longer the chairman of our board of directors, certain other risks we face relating to our customer, supplier and service relationships with, and competition between us and Mr. Icahn and affiliates of Mr. Icahn, described below, may be exacerbated. The loss of the services of one or more of our executive officers or key employees or the chairman of our board of directors could have a material adverse effect on our business, financial condition and results of operations. We do not currently maintain “key person” life insurance.

If we face labor shortages or increased labor costs our growth and results of operations could be materially adversely affected.

Due to the cyclical nature of the demand for our products, we have had to reduce and then rebuild our workforce as our business has gone through downturns followed by upturns in business activity. Due to the competitive and rural nature of the labor markets in which we operate, this type of employment cycle increases our risk of not being able to retain and recruit the personnel we require in our railcar manufacturing and other businesses, particularly in periods of economic expansion. Our Paragould and Marmaduke facilities are located in sparsely populated communities and we have experienced a high turnover rate at these locations among newly-hired employees. The additional painting and lining capabilities that we are adding to our Paragould facility, which we expect will be completed by the end of 2005, will require additional employees to operate. Our inability to recruit, retain and train adequate numbers of qualified personnel on a timely basis could materially adversely affect our ability to operate our businesses, our financial condition and our results of operations.

The variable purchase patterns of our railcar customers and the timing of completion, delivery and acceptance of customer orders may cause our revenues and income from operations to vary substantially each quarter, which could result in significant fluctuations in our quarterly results.

Most of our individual railcar customers do not make railcar purchases every year because they do not need to replace or replenish their railcar fleets on a yearly basis. Many of our customers place orders for railcars on an as-needed basis, sometimes only once every few years. As a result, the order levels for railcars, the mix of railcar types ordered and the railcars ordered by any particular customer have varied significantly from quarterly period to quarterly period in the past and may continue to vary significantly in the future. Railcar sales comprised approximately 75% of our total revenue in 2004 and 81% of our total revenue in the nine months ended September 30, 2005, and our results of

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Risk factors

operations in any particular quarterly period may be significantly affected by the number and type of railcars manufactured and delivered in any given quarterly period. For example, our net income increased 156% from the first quarter to the second quarter of this year while it decreased 207% from the third quarter to the fourth quarter of fiscal 2004. We record the sale of a railcar after completion of production of the railcar, the railcar is accepted by the customer following inspection, the risk for any damage or loss with respect to the railcar passes to the customer and title to the railcar transfers to the customer. This revenue recognition policy determines when we record the revenues associated with our railcar sales and, as a result, will cause fluctuations in our quarterly results. As a result of these fluctuations, we believe that comparisons of our sales and operating results between quarterly periods within the same fiscal year and between quarterly periods within different fiscal years may not be meaningful and, as such, these comparisons should not be relied upon as indicators of our future performance.

Our relationships with our partners in our Ohio Castings joint venture may not be successful, which could materially adversely affect our business.

Effective on January 1, 2005, we acquired from ACF Industries Holding Corp., an affiliate of Carl C. Icahn, our principal beneficial stockholder and the chairman of our board of directors, its one-third ownership interest in Ohio Castings, our joint venture with affiliates of Amsted Industries Inc., a railcar components manufacturing company, and The Greenbrier Companies, a railcar manufacturer and leasing company. We acquired this joint venture interest in order to increase our supply alternatives for heavy castings, which are critical components for the manufacture of railcars and the supply of which is constrained. The companies that supply the railcar industry with heavy castings have been unable to meet the short-term or long-term demand of railcar manufacturers and, as such, the production capacity of many railcar manufacturers, including ours, is restricted by the limited availability of these components. Although the allocation of castings that we receive from Ohio Castings does not provide us with all of our castings requirements, the joint venture does provide us with a committed source for a critical portion of the castings that we require for the successful operation of our business. If Ohio Castings is unable to provide us with our allocation of castings on a timely basis or at all, our manufacturing costs could increase and we may have to delay or cancel the production of ordered railcars, all of which could materially adversely affect our business, financial condition and results of operations.

The level of our reported railcar backlog may not necessarily indicate what our future revenues will be and our actual revenues may fall short of the estimated revenue value attributed to our railcar backlog.

We define backlog as the number of railcars, and the revenue value in dollars attributed to these railcars, to which our customers have committed in writing to purchase from us that have not yet been recognized as revenues. Our competitors may not define railcar backlog in the same manner as we do, which could make comparisons of our railcar backlog with theirs misleading. In this prospectus, we have disclosed our railcar backlog for various periods and the estimated revenue value in dollars that would be attributed to this railcar backlog once the railcar backlog is converted to actual sales. We consider railcar backlog to be an indicator of future revenues. However, our reported railcar backlog may not be converted into revenues in any particular period, if at all, and the actual revenues from such sales may not equal our reported estimates of railcar backlog value. For example, if the price for raw materials, such as steel, and other components used in the production of our railcars decreases or increases and we have entered into applicable variable pricing contracts with a customer or we are otherwise able to pass on these price changes to a customer, our actual revenues will differ from the estimated revenue value attributed to our railcar backlog. In addition, our railcar manufacturing business relies on third-party suppliers for heavy castings, wheels and other components and raw

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Risk factors

materials and if these third parties were to stop or reduce their supply of components or raw materials, our production would decline and our actual revenues would fall short of the estimated revenue value attributed to our railcar backlog. Customer orders may be subject to cancellation, inspection rights and other customary industry terms, all of which could affect our recognition of revenue currently reflected in our September 30, 2005 backlog. If industry backlog for railcars declines below certain levels, CIT, one of our customers which accounts for 71% of our September 30, 2005 backlog, will be permitted to cancel some or, in certain circumstances, all its orders after at least 180 days written notice, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, delivery dates may be subject to deferral, thereby delaying the date on which we will deliver the associated railcars and realize revenues attributable to such railcar backlog. Therefore, our current level of reported railcar backlog may not necessarily represent the level of revenues that we may generate in any future period. Furthermore, any contract included in our reported railcar backlog that actually generates revenues may not be profitable.

Our management and auditors have identified three significant deficiencies in our internal controls as of December 31, 2004, which, if not properly remediated could result in misstatements in our financial statements in future periods.

Our independent auditors, Grant Thornton LLP, issued a letter to our board of directors in which they identified three significant deficiencies in the design and operation of our internal controls as of December 31, 2004. A significant deficiency is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a misstatement of the financial statements that is more than inconsequential will not be prevented or detected. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. The letter specifically noted the following significant deficiencies:

In light of the noted significant deficiencies, we have instituted control improvements that we believe will reduce the likelihood of similar errors. If the remedial policies and procedures we have implemented are insufficient to address the three significant deficiencies or if additional significant deficiencies or other conditions relating to our internal controls are discovered in the future, we may fail to meet our future reporting obligations, our financial statements may contain misstatements and our operating results may be adversely affected. Any such failure could also adversely affect the results of the periodic management evaluations and annual auditor attestation reports regarding the effectiveness of our internal controls over financial reporting, which will be required when the SEC’s rules under Section 404 of the Sarbanes-Oxley Act of 2002 become applicable to us beginning with the filing of our Annual Report on Form 10-K for the year ended December 31, 2006. Although we believe we have addressed our significant deficiencies in internal controls with the remedial measures

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Risk factors

we have implemented, we cannot guarantee that the measures we have taken to date or any future measures will remediate the significant deficiencies identified or that any additional significant deficiencies will not arise in the future due to a failure to implement and maintain adequate internal controls over financial reporting. Internal control deficiencies could cause investors to lose confidence in the reliability of our financial statements and other reported financial information, which in turn could harm our business and negatively impact the trading price of our common stock.

Once we become a public company, we will need to comply with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act. If we fail to comply with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act, or if we fail to achieve and maintain adequate internal controls over financial reporting, our business, results of operations and financial condition, and investors’ confidence in us, could be materially adversely affected.

As a public company, we will be required to comply with the periodic reporting obligations of the Exchange Act, including preparing annual reports, quarterly reports and current reports. Our failure to prepare and disclose this information in a timely manner could subject us to penalties under federal securities laws, expose us to lawsuits and restrict our ability to access financing. In addition, we will be required under applicable law and regulations to integrate our systems of internal controls over financial reporting. We plan to evaluate our existing internal controls with respect to the standards adopted by the Public Company Accounting Oversight Board. During the course of our evaluation, we may identify areas requiring improvement and may be required to design enhanced processes and controls to address issues identified through this review. This could result in significant delays and cost to us and require us to divert substantial resources, including management time, from other activities. For example, during the audit of our 2004 fiscal year, our independent registered public accounting firm issued a letter to our board of directors noting certain significant deficiencies, as described above.

We expect to dedicate significant management, financial and other resources in connection with our compliance with Section 404 of the Sarbanes-Oxley Act in the second half of 2005. We expect these efforts to include a review of our existing internal control structure. As a result of this review, we may either hire or outsource additional personnel to expand and strengthen our finance function. There have been no external costs associated with this effort through September 30, 2005, and we cannot be certain at this time that we will be able to comply with all of our reporting obligations and successfully complete the procedures, certification and attestation requirements of Section 404 of the Sarbanes-Oxley Act by the time that we are required to file our Annual Report on Form 10-K for the year ended December 31, 2006. If we fail to achieve and maintain the adequacy of our internal controls and do not address the deficiencies identified by our auditors, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with the Sarbanes-Oxley Act. Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result, our failure to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act on a timely basis could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our common stock.

Rapid growth is straining our operations and requiring us to incur costs to upgrade our infrastructure.

During the last five quarters, we have experienced rapid growth in our operations, number of our employees and our product offerings. Our growth places a significant strain on our management, operations and financial systems and also on our ability to retain employees. Our future operating results will depend in part on our ability to continue to implement and improve our operating and

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Risk factors

financial controls and management information systems. If we fail to manage our growth effectively, our business, financial condition and results of operations could be materially adversely affected.

After this offering, companies affiliated with Carl C. Icahn will continue to be important suppliers and customers.

We manufacture railcars and railcar components and provide railcar services for companies affiliated with Carl C. Icahn, our principal beneficial stockholder and the chairman of our board of directors. To the extent our relationships with affiliates of Mr. Icahn change due to the sale of his interest in us or otherwise, our business, results of operations and financial condition may be materially adversely affected.

Affiliates of Mr. Icahn have accounted for approximately 45%, 34%, 24% and 14% of our revenues in 2002, 2003, 2004 and the nine months ended September 30, 2005, respectively. This revenue is primarily attributable to our sale of railcars. American Railcar Leasing LLC, or ARL, a railcar leasing company owned by affiliates of Mr. Icahn, currently purchases all of its railcars from us. However, we have no long-term agreements with ARL or any other affiliates of Mr. Icahn to purchase our railcars, and we cannot assure you that ARL or other affiliates of Mr. Icahn will continue to do so. ARL could, in the future, purchase railcars from one of our competitors. In addition, we have a railcar servicing agreement with ARL, under which we provide fleet management services for the entire railcar fleet of ARL and its subsidiaries. These railcars represented approximately 39% of the railcars for which we provided fleet management services as of September 30, 2005. This agreement is terminable by either party at the end of any contract year upon six months prior notice and ARL is not restricted from using the services of our competitors for its existing fleet of railcars or any other railcars it may purchase. A significant change in the nature of the business relationship with ARL and other affiliates of Mr. Icahn could have a material adverse effect on our business, financial condition and results of operations.

We also purchase railcar and industrial components from ACF, another entity affiliated with Mr. Icahn. ACF has been the supplier of approximately $19.0 million, $31.3 million and $56.2 million of our inventory purchases in 2003, 2004 and the nine months ended September 30, 2005, respectively. Currently, ACF is our sole supplier of tank railcar heads and one of a limited number of suppliers for other important railcar components that we use in our manufacturing operations. These railcar components are manufactured and sold to us under a supply agreement that is terminable by ACF at the end of any contract year on six months prior notice. We cannot guarantee that we would be able to obtain alternative supplies of these railcar components on a timely basis and on comparable terms if we were no longer able to purchase these railcar components from ACF. A failure to obtain component supplies from ACF could materially adversely affect our business, financial condition and results of operations.

For more information on these arrangements, see “Certain relationships and related party transactions.”

Services being provided to us by ARL, an entity controlled by Carl C. Icahn, may not be sufficient to meet our needs, which may require us to incur additional costs.

We use certain outsourced information technology and administrative services from ARL, an entity controlled by Mr. Icahn. We also sublease our headquarters office space in St. Charles, Missouri from ARL. We cannot assure you that these services will be provided at the same level as they are currently being provided or that we will be able to maintain our sublease on the same terms as currently in effect. These arrangements may be terminated by ARL or by us upon six months notice and, if they were terminated, we would be required to find a third-party provider of these services or begin to provide them for ourselves and relocate our office headquarters. As these agreements were negotiated

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Risk factors

with ARL, an entity affiliated with us, the prices and rates charged to us under these agreements may be lower than the prices and rates that may be charged by unaffiliated third parties for similar services and an office sublease or for us to provide these services on our own. We cannot assure you that, if these agreements are terminated, we will be able to replace these services and the sublease in a timely manner or on terms and conditions, including cost, as favorable as those we are currently receiving. Additional expenses incurred in replacing these services and relocation of our office facilities or the failure to replace these services could materially adversely affect our business, financial condition and results of operations.

After this offering, we may have reduced access to resources of, and benefits provided by, entities affiliated with Carl C. Icahn.

We have in the past obtained access to significant financial and other resources from entities affiliated with Carl C. Icahn. For example, until recently, most of our capital needs have been satisfied by entities affiliated with Mr. Icahn. In addition, we believe that our relationship with entities affiliated with Mr. Icahn have, in many cases, provided us with a competitive advantage in identifying opportunities for sales of our products and identifying and attracting partners for critical supply arrangements. For example, we participate in product and service purchasing arrangements with entities controlled by Mr. Icahn, which we believe may provide us with favorable pricing as a result of larger aggregate purchases by the Icahn-affiliated buying group. If we were unable to participate in these buying group arrangements our manufacturing costs would increase and our results of operations and financial condition may be materially adversely affected. Also, lease sales agents of ARL and ACF, in connection with their own leasing sales activities have, from time to time, referred their customers or contacts to us if the customer or contact prefers to purchase rather than lease railcars, which has, in some cases, led to us selling railcars to these customers or contacts. ACF and ARL have in the past accepted orders to purchase railcars for us on our behalf. ARL and ACF have discontinued accepting orders to sell railcars on our behalf. At this time there is no formal arrangement under which referral services are provided and we do not compensate ARL, ACF or any of their leasing sales agents for any railcar sales that we may make as a result of these referrals. To the extent that ARL or ACF discontinue referring potential customers to us, or require us to compensate them for these referrals, our business, results of operations and financial condition may be adversely affected.

Lack of acceptance of our new railcar offerings by our customers could materially adversely affect our business.

Our strategy depends in part on our continued development and sale of new railcar designs to expand or maintain our market share in the railcar markets in which we currently compete. The investment required by us in connection with the development of new railcar designs is considerable and we usually make decisions to develop and market new railcars and railcars with modified designs without firm indications of customer acceptance. New or modified railcar designs may require customers to alter their existing business methods or displace existing equipment in which these customers may have a substantial capital investment. Additionally, many railcar purchasers prefer to maintain a standardized fleet of railcars and railcar purchasers with established railcar fleets are generally resistant to railcar design changes. Therefore, any new or modified railcar designs that we develop may not gain widespread acceptance in the marketplace and any such products may not be able to compete successfully with existing railcar designs or new railcar designs that may be introduced by our competitors.

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Risk factors

Our production of new railcar product lines may not be initially profitable and may result in financial losses.

Our strategy includes developing new railcars and selectively expanding beyond the covered hopper and tank railcar markets. When we begin production of a new railcar product line, we usually experience higher initial costs of production due to training and labor and operating inefficiencies associated with new manufacturing processes. Due to pricing pressures in our industry, the pricing for new railcars in customer contracts usually does not reflect the initial additional costs, and our costs of production may exceed the anticipated revenues until we are able to gain labor efficiencies. For example, in 2004 and 2005, we used a portion of the railcar production capacity at our Paragould facility, which we primarily use to manufacture covered hopper railcars, to manufacture centerbeam platform railcars. This was the first time we manufactured centerbeam platform railcars and primarily as a result of initial training and start-up costs, we incurred a loss on this product. To the extent that the total costs of production significantly exceed our anticipated costs of production, we may incur a loss on our sale of new railcar product lines.

We may pursue acquisitions or joint ventures that involve inherent risks, any of which may cause us not to realize anticipated benefits.

Our business strategy includes the potential acquisition of businesses and entering into joint ventures and other business combinations that we expect will complement and expand our business. We may not be able to successfully identify suitable acquisition or joint venture opportunities or complete any particular acquisition, combination, joint venture or other transaction on acceptable terms. Our identification of suitable acquisition candidates and joint venture opportunities involves risks inherent in assessing the values, strengths, weaknesses, risks and profitability of these opportunities including their effects on our business, diversion of our management’s attention and risks associated with unanticipated problems or unforeseen liabilities. If we are successful in pursuing future acquisitions or joint ventures, we may be required to expend significant funds, incur additional debt or issue additional securities, which may materially adversely affect our results of operations and be dilutive to our stockholders. If we spend significant funds or incur additional debt, our ability to obtain financing for working capital or other purposes could decline and we may be more vulnerable to economic downturns and competitive pressures. In addition, we cannot guarantee that we will be able to finance additional acquisitions or that we will realize any anticipated benefits from acquisitions or joint ventures that we complete. Should we successfully acquire another business, the process of integrating acquired operations into our existing operations may result in unforeseen operating difficulties and may require significant financial resources that would otherwise be available for the ongoing development or expansion of our existing business. Our failure to identify suitable acquisition or joint venture opportunities may restrict our ability to grow our business.

If we are unable to protect our intellectual property and prevent its improper use by third parties, our ability to compete in the market may be harmed.

We rely on patent protection and a combination of copyright, trade secret and trademark laws to protect our proprietary technology and prevent others from duplicating our products. However, these means afford only limited protection and may not prevent our competitors from duplicating our products or gaining access to our proprietary information and technology. These means also may not permit us to gain or maintain a competitive advantage.

Any of our patents may be challenged, invalidated, circumvented or rendered unenforceable. We cannot guarantee that we will be successful should one or more of our patents be challenged for any reason. If our patent claims are rendered invalid or unenforceable, or narrowed in scope, the patent coverage afforded our products could be impaired, which could significantly impede our ability to

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Risk factors

market our products, negatively affect our competitive position and materially adversely affect our business and results of operations.

We cannot assure you that any pending or future patent applications held by us will result in an issued patent, or that if patents are issued to us, that such patents will provide meaningful protection against competitors or against competitive technologies. The issuance of a patent is not conclusive as to its validity or its enforceability. The United States federal courts may invalidate our patents or find them unenforceable. Competitors may also be able to design around our patents. Our patents and patent applications cover particular aspects of our products. Other parties may develop and obtain patent protection for more effective technologies, designs or methods. If these developments were to occur, it could have an adverse effect on our sales. If our intellectual property rights are not adequately protected, we may not be able to commercialize our technologies, products or services and our competitors could commercialize our technologies, which could result in a decrease in our sales and market share and could materially adversely affect our business, financial condition and results of operations.

Our products could infringe the intellectual property rights of others, which may lead to litigation that could itself be costly, could result in the payment of substantial damages or royalties, and could prevent us from using technology that is essential to our products.

We cannot guarantee you that our products, manufacturing processes or other methods do not infringe the patents or other intellectual property rights of third parties. Infringement and other intellectual property claims and proceedings brought against us, whether successful or not, could result in substantial costs and harm our reputation. Such claims and proceedings can also distract and divert management and key personnel from other tasks important to the success of our business. In addition, intellectual property litigation or claims could force us to do one or more of the following:

In the event of an adverse determination in an intellectual property suit or proceeding, or our failure to license essential technology, our sales could be harmed and our costs could increase, which could materially adversely affect our business, financial condition and results of operations.

We are subject to a variety of environmental laws and regulations and the cost of complying, or our failure to comply, with such requirements may have a material adverse effect on our business, financial condition and results of operations.

We are subject to a variety of federal, state and local environmental laws and regulations relating to the release or discharge of materials into the environment, the management, use, processing, handling, storage, transport or disposal of hazardous materials, or otherwise relating to the protection of human health and the environment. These laws and regulations expose us to liability for the environmental condition of our current or formerly owned or operated facilities, and also may expose us to liability for the conduct of others or for our actions that were in compliance with all applicable laws at the time these actions were taken. Despite our intention to be in compliance, we cannot guarantee that we

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will at all times be in compliance with all such requirements. The cost of complying with environmental requirements may also increase substantially in future years. If we violate or fail to comply with these regulations, we could be fined or otherwise sanctioned by regulators. In addition, these requirements are complex, change frequently and may become more stringent over time, which could have a material adverse effect on our business. We are also required to maintain a variety of environmental permits. Our failure to maintain and comply with these permits could result in fines or penalties or other sanctions and have a material adverse effect on our operations or results. Future events, such as new environmental regulations or changes in or modified interpretations of existing laws and regulations or enforcement policies, or further investigation or evaluation of the potential health hazards of products or business activities, may give rise to additional compliance and other costs that could have a material adverse effect on our business, financial conditions and operations.

We are involved in investigation and remediation activities at properties that we now own or lease to address historic contamination and potential contamination by third parties. We are also involved with state agencies in the cleanup of two sites under these laws. These investigations are at a preliminary stage, and it is impossible to estimate, with any certainty, the timing and extent of remedial actions that may be required, and the costs that would be involved in such remediation. Substantially all of the issues identified relate to the use of the properties prior to their transfer to us in 1994 by ACF and for which ACF has retained liability and agreed to indemnify us. However, if ACF fails to honor its obligations to us, we would be responsible for the cost of such remediation. We have been advised that ACF estimates that, for the remainder of 2005, ACF will spend approximately $0.1 million on environmental investigation and, in 2006 and 2007, respectively, it will spend approximately $0.2 million on environmental investigation, relating to contamination that existed at properties prior to their transfer to us in 1994 and for which ACF has retained liability and agreed to indemnify us. We expense all costs associated with environmental investigation and remediation relating to our properties even if we receive indemnification from ACF. ACF’s indemnification is not treated as an offset to that expense, but rather as an additional capital contribution. The discovery of historic contamination or the release of substances into the environment at our current or formerly owned or operated facilities could require ACF or us in the future to incur investigative or remedial costs or other liabilities that could be material or that could interfere with the operation of our business. Any environmental liabilities that we may incur that are not covered by adequate insurance or indemnification from a party other than ACF will also increase our costs and have a negative impact on our profitability. See “Business— Environmental matters” for more information.

Failure of ACF to honor its indemnification obligations to us may have a material adverse effect on our business and financial condition.

In connection with our 1994 acquisition from ACF of assets and certain properties relating to ACF’s railcar components manufacturing and railcar manufacturing and railcar maintenance businesses, ACF agreed to retain and indemnify us for certain liabilities relating to its ownership of those assets and operation of its business prior to the transfer, including liabilities relating to employee benefit plans, worker’s compensation, environmental contamination and third-party litigation. The total of such accrued liabilities was $11.1 million as of December 31, 2004. Additional such liabilities may accrue in the future. If ACF fails to honor its indemnification obligations, whether as a result of a dispute related to the applicability of the indemnification, ACF having insufficient assets to pay liabilities or otherwise, our business and financial condition could be materially adversely affected.

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Risk factors

Changes in assumptions or investment performance of pension and other postretirement benefit plans that we either sponsor or participate in could materially adversely affect our financial condition and results of operations.

We either sponsor or participate in several pension plans, including two plans that were frozen effective April 1, 2004, and in which our employees are therefore no longer accruing additional benefits. To the extent we continue to sponsor or participate in these plans, we will be responsible for making funding contributions to the plans, including the frozen pension plans, and may be liable for a share of any unfunded liabilities that may exist at the time we cease to participate in the plans or the plans are terminated. Our liability and resulting costs for these plans may increase or decrease based upon a number of factors, including actuarial assumptions used, the discount rate used in calculating the present value of future liabilities, and investment performance. An adverse change or result in one or more of these factors could have a material adverse effect on our financial condition and results of operations.

We also provide other postretirement benefits to certain of our employees. Our postretirement benefit obligations and related expense with respect to these postretirement benefits also increase or decrease based on several factors, including changes in health care cost trend rates, and could similarly be materially adversely affected by adverse changes in these factors.

We could be liable for liabilities associated with pension plans sponsored by companies controlled by Carl C. Icahn.

Mr. Icahn, our principal beneficial stockholder and the chairman of our board of directors, and his affiliates currently hold over 80% of our outstanding voting securities. Applicable pension and tax laws make each member of a plan sponsor’s controlled group, generally defined as entities in which there is at least an 80% common ownership interest, jointly and severally liable for pension plan obligations sponsored by other members of the controlled group. These pension obligations include liability for any unfunded liabilities that may exist at the time the plans are terminated. We and our subsidiaries are currently members of a controlled group that includes ACF, an entity in which Mr. Icahn has an indirect ownership interest of at least 80%. ACF is the sponsor of several pension plans that are underfunded, as of December 31, 2004, by a total of approximately $24.1 million on an ongoing actuarial basis and $172.4 million if those plans were terminated, as most recently reported by the plans’ actuaries. These liabilities could increase or decrease, depending on a number of factors, including future changes in promised benefits, investment returns and the assumptions used to calculate the liability. As members of the controlled group, we would be jointly and severally liable for any failure of ACF to pay the unfunded liabilities upon a termination of the ACF pension plans.

Upon completion of this offering, we believe that we should no longer be a member of the ACF controlled group. As a result, we should no longer be subject to ACF’s pension liabilities, unless it were determined that we were otherwise a member of the ACF controlled group or that a principal purpose of the offering or other transactions that resulted in our ceasing to be a member of the ACF controlled group was to evade pension liabilities and the termination date of the underfunded plan was within five years after the offering or other transactions. If such a determination were made and upheld by a court, we could remain jointly and severally liable for pension plan obligations of ACF, which could have a material adverse effect on our financial condition and results of operations.

In connection with Trans World Airlines, Inc.’s (or TWA) 1992 bankruptcy proceedings under Chapter 11 of the Bankruptcy Code, the Pension Benefit Guarantee Corporation (or the PBGC) asserted that ACF as well as the other entities in which Mr. Icahn had a controlling interest were obligated along with TWA to satisfy any underfunding of obligations under TWA’s defined benefit plan. Subsequently, and in response to a petition of another member of the Icahn control group, the PBGC terminated the TWA pension plan and obligated an affiliate of ours, Highcrest Investors Corp (or Highcrest), to make

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Risk factors

eight annual termination payments of $30 million, totaling $240 million. We have been advised that as of December 31, 2004, Highcrest had made termination payments totaling $130 million and still owed $110 million of this obligation. The obligation to make termination payments is non-recourse except to the common stock of ACF Industries Holding Corp., which is also a member of the Icahn control group. The authority of the PBGC to enter into the settlement agreement is currently being contested. If such a contest were to succeed, we could be jointly and severally liable with the other members of the Icahn control group for the termination liability associated with the TWA pension plan, which may be in excess of the remaining termination payments.

Our manufacturer’s warranties expose us to potentially significant claims.

We warrant the workmanship and materials of many of our products under express limited warranties. Accordingly, we may be subject to significant warranty claims in the future such as multiple claims based on one defect repeated throughout our mass production process or claims for which the cost of repairing the defective component is highly disproportionate to the original cost of the part. These types of warranty claims could result in costly product recalls, significant repair costs and damage to our reputation, which could materially adversely affect our business, financial condition and results of operations. Unresolved warranty claims could result in users of our products bringing legal actions against us. For example, we have been named as the defendant in a lawsuit in which the plaintiff, OCI Chemical Company, claims we were responsible for the damage caused by allegedly defective railcars that were manufactured by us. OCI Chemical Company alleges that failures in certain components caused the contents transported by these railcars to spill out of the railcars causing property damage, clean-up costs, monitoring costs, testing costs and other costs and damages.

Increasing insurance claims and expenses could lower profitability and increase business risk.

The nature of our business subjects us to product liability, property damage and personal injury claims, especially in connection with our manufacture and repair of products that transport hazardous or volatile materials, such as pressure tank railcars. We maintain reserves and liability insurance coverage at levels based upon commercial norms in the industries in which we operate and our historical claims experience. Over the last several years, insurance carriers have raised premiums for many companies operating in our industry. Increased premiums may further increase our insurance expense as coverages expire or cause us to raise our self-insured retention. If the number or severity of claims within our self-insured retention increases, we could suffer costs in excess of our reserves. An unusually large liability claim or a series of claims based on a failure repeated throughout our mass production process may exceed our insurance coverage or result in direct damages if we were unable or elected not to insure against certain hazards because of high premiums or other reasons. In addition, the availability of, and our ability to collect on, insurance coverage is often subject to factors beyond our control. Moreover, any accident or incident involving us, even if we are fully insured or not held to be liable, could negatively affect our reputation among customers and the public, thereby making it more difficult for us to compete effectively, and could materially adversely affect the cost and availability of insurance in the future.

Covenants in our revolving credit facility currently restrict and, following amendments to our revolving credit facility that we expect to enter into concurrently with this offering, covenants in our revolving credit facility will continue to restrict our discretion in operating our business and provide for certain minimum financial requirements.

We expect to amend and restate our revolving credit facility concurrently with this offering. Our amended and restated revolving credit facility will contain various covenants, similar to those in our

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Risk factors

existing revolving credit facility, that, among other things, will require us to satisfy certain financial covenants and will limit our management’s discretion by restricting our ability to:

Our failure to comply with any covenants under the amended and restated revolving credit facility could lead to an event of default under the agreements governing our indebtedness that we may have outstanding at the time, permitting our lenders to accelerate our borrowings and to foreclose on any collateral.

Some of our railcar services and component manufacturing employees belong to labor unions and strikes or work stoppages by them or unions formed by some or all of our other employees in the future could adversely affect our operations.

We are a party to collective bargaining agreements with labor unions at our Longview, Texas, North Kansas City, Missouri and our Milton, Pennsylvania repair facilities and at our Longview, Texas steel foundry and components manufacturing facility. As of September 30, 2005, the covered employees at these sites collectively represent approximately 16% of our total workforce. Disputes with regard to the terms of these agreements or our potential inability to negotiate acceptable contracts with these unions in the future could result in, among other things, strikes, work stoppages or other slowdowns by the affected workers. We cannot guarantee that our relations with our railcar services workforce will remain positive. We cannot guarantee that union organizers will not be successful in future attempts to organize our railcar manufacturing employees or our other employees at some of our other facilities. If our workers were to engage in a strike, work stoppage or other slowdown, or other employees were to become unionized or the terms and conditions in future labor agreements were renegotiated, we could experience a significant disruption of our operations and higher ongoing labor costs. In addition, we could face higher labor costs in the future as a result of severance or other charges associated with layoffs, shutdowns or reductions in the size and scope of our operations.

The market and industry data contained in this prospectus, including estimates and forecasts relating to the growth of the railcar market, cannot be verified with certainty and may prove to be inaccurate.

This prospectus contains market and industry data obtained primarily from industry publications of the Association of American Railroads, the Railway Supply Institute, Global Insight and information from the U.S. Department of Agriculture. Industry publications typically indicate that they have derived the published data from sources believed to be reasonable, including other railcar manufacturers, but do not guarantee the accuracy or completeness of the data. While we believe these publications to be reliable, we have not independently verified the data or any of the assumptions on which the estimates and forecasts are based, and the data may prove to be inaccurate. This data includes estimates and forecasts regarding future growth in these industries, specifically data related to railcar production, railcar growth and the historical average age of active railcars in North America. Forecasts and estimates regarding future growth of the railcar industry included in these reports are based on assumptions of the growth and improvement of certain sectors of the U.S. economy. The

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Risk factors

growth and improvement of these sectors of the U.S. economy during the period of these forecasts and estimates are not assured. The failure of these sectors of the U.S. economy to perform as assumed in these forecasts and estimates would cause the forecasted expansion of the railcar industry not to occur or to occur to a lesser extent than predicted. The failure of the rail industry or the railcar supply industry to continue to grow as forecasted by the market and industry data included in this prospectus may have a material adverse effect on our business and the market price of our common stock. See additional information on industry data on page (i).

Our failure to comply with regulations imposed by federal and foreign agencies could negatively affect our financial results.

Our railcar operations are subject to extensive regulation by governmental regulatory and industry authorities and by federal and foreign agencies. These organizations establish rules and regulations for the railcar industry, including construction specifications and standards for the design and manufacture of railcars; mechanical, maintenance and related standards; and railroad safety. New regulatory rulings and regulations from these federal or foreign agencies may impact our financial condition and results of operations. If we fail to comply with the requirements and regulations of these agencies, we may face sanctions and penalties that could materially adversely affect our results of operations.

Further consolidation of the railroad industry may materially adversely affect our business.

Over the past ten years, there has been a consolidation of railroad carriers operating in North America. Railroad carriers are large purchasers of railcars and represent a significant portion of our historical customer base. With fewer railroad carriers, each railroad carrier will have proportionately greater buying power and operating efficiency. This may intensify competition among railcar manufacturers to retain customer relationships with the consolidated railroad carriers and cause our prices to decline. Future consolidation of railroad carriers may materially adversely affect our sales and reduce our income from operations.

Reductions in the availability of energy supplies or an increase in energy costs may increase our operating costs.

We use electricity and natural gas at our manufacturing facilities and to operate our equipment. Over the past three years, prices for electricity and natural gas have fluctuated significantly. An outbreak or escalation of hostilities between the United States and any foreign power and, in particular, a prolonged armed conflict in the Middle East, or a natural disaster such as the recent hurricane and related flooding in the oil producing region of the Gulf Coast of the United States, could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of electricity or energy generally. Future limitations on the availability or consumption of petroleum products and/or an increase in energy costs, particularly electricity for plant operations, could have a materially adverse effect upon our business and results of operations.

We may be required to reduce our inventory carrying values, which could materially adversely affect our financial condition and results of operations.

We are required to record our inventories at the lower of cost or market. In assessing the ultimate realization of inventories, we are required to make judgments as to future demand requirements and compare them with the current or committed inventory levels. We have recorded reductions in inventory carrying values in recent periods due to the discontinuance of product lines and changes in market conditions due to changes in demand requirements. We may be required to reduce inventory carrying values in the future due to a decline in market conditions in the railcar business, which could have a material adverse effect on our financial condition and results of operations.

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We may be required to reduce the value of our long-lived assets, which could materially adversely affect our financial condition and results of operations.

We periodically evaluate the carrying values of our long-lived assets for potential impairment. The carrying value of a long-lived asset is considered impaired when the carrying value is not recoverable through undiscounted future cash flows and the fair value of the asset is less than the carrying value reduced by the estimated cost to dispose of the asset. Any resulting impairment loss related to reductions in the value of our long-lived assets could materially adversely affect our financial condition and results of operations.

RISKS RELATED TO THE PURCHASE OF OUR COMMON STOCK IN THIS OFFERING

As a new investor, you will experience immediate and substantial dilution.

You will pay a price for each share of our common stock that exceeds the per share value attributed from our tangible assets less our total liabilities. Therefore, if we distributed our consolidated tangible assets after deducting our consolidated liabilities to our stockholders following this offering, our stockholders would receive less per share of common stock than you paid in this offering. After giving effect to the sale of our shares of common stock in this offering at the assumed initial public offering price of $               per share, which represents the midpoint of the range on the cover of this prospectus, after deducting the underwriting discount and estimated offering expenses payable by us and after giving effect to the Transactions, our net tangible book value would have been approximately $               million, or $               per share. Accordingly, if you purchase shares of our common stock in this offering you will suffer immediate dilution of $               per share in net tangible book value. Net tangible book value per share represents the amount of our total consolidated tangible assets less our total consolidated liabilities, divided by the total number of shares of common stock outstanding adjusted for this offering and the expected use of the proceeds of this offering, based on an assumed initial offering price of $               per share of common stock, which represents the midpoint of the range on the cover of this prospectus. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares of our capital stock. You may suffer additional dilution to the extent outstanding options to purchase shares of our common stock are exercised. For more information, see “Dilution.”

Our common stock may trade at prices below the initial public offering price and may be susceptible to declines based on securities analysts’ or industry research and reports.

Prior to this offering, you could not buy or sell our common stock publicly. We cannot predict the extent to which an active trading market for our common stock will develop or be sustained after this offering. The initial public offering price will be determined by negotiations between us and representatives of the underwriters based on factors that may not be indicative of future performance and may not bear any relationship to the price at which our common stock will trade upon completion of this offering. You may not be able to resell our common stock at or above the initial public offering price.

In addition, the trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of the analysts who cover us or our industry downgrade our stock or project a downturn in our industry, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

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The price of our common stock is subject to volatility and you could lose all or part of your investment.

Various factors, such as general economic changes in the financial markets, announcements or significant developments with respect to the railcar industry, actual or anticipated variations in our or our competitors’ quarterly or annual financial results, the introduction of new products or technologies by us or our competitors, changes in other conditions or trends in our industry or in the markets of any of our significant customers, changes in governmental regulation, our financial results failing to meet expectations of analysts or investors, or changes in securities analysts’ estimates of our future performance or of that of our competitors or our industry, could cause the market price of our common stock to fluctuate substantially. In addition, our customers’ practice of placing large, periodic orders for products on an as needed basis makes our quarterly sales and operating results difficult to predict and could cause our operating results in some quarters to vary from market expectations and also lead to volatility in our stock price.

Our stock price may decline due to sales of shares by Carl C. Icahn and other stockholders.

Sales of substantial amounts of our common stock, or the perception that these sales may occur, may adversely affect the price of our common stock and impede our ability to raise capital through the issuance of equity securities in the future. There will be                      shares of our common stock outstanding immediately after this offering. Of these shares,           % will be beneficially owned by our principal beneficial stockholder and the chairman of our board of directors, Carl C. Icahn. These include shares of our common stock, representing           % of our shares of common stock outstanding immediately after this offering, held by the Foundation for Greater Opportunity, which an affiliate of Mr. Icahn has agreed to purchase pursuant to a stock purchase agreement entered into in December 2005. The consummation of this acquisition requires the completion of this offering and the approval of applicable authorities of the State of New York. If the parties obtain this approval, we have been advised that the parties expect that the acquisition would be completed in the first three months of 2006. Pending the closing of this acquisition, and for so long as the stock purchase agreement has not been terminated, the Foundation has granted the affiliate of Mr. Icahn purchasing the shares owned by the Foundation an irrevocable proxy to vote all of the shares of our common stock held by the Foundation. All shares sold in this offering will be freely transferable without restriction or further registration under the Securities Act of 1933. All of our other outstanding shares of common stock are subject to restrictions applicable to our “affiliates,” as that term is defined in Rule 144 of the Securities Act and subject to 180-day lock-up agreements. See “Shares eligible for future sale” and “Underwriting.”

We and our executive officers, directors and all our existing stockholders have entered, and certain individuals who purchase shares of our common stock in this offering through the directed share program may enter, into 180-day lock-up agreements with the underwriters. The lock-up agreements prohibit us and our executive officers, directors, existing stockholders and certain individuals who have purchased shares of our common stock through the directed share program from selling or otherwise disposing of shares of common stock, except in limited circumstances. The terms of the lock-up agreements can be waived, at any time, by UBS Securities LLC and Bear, Stearns & Co. Inc. in their sole discretion, without prior notice or announcement, to allow us or our officers, directors, existing stockholders and certain individuals who have purchased shares of our common stock through the directed share program to sell shares of our common stock. If the terms of the lock-up agreements are waived, shares of our common stock will be available for sale in the public market, which could reduce the price of our common stock. See “Shares eligible for future sale— Lock-up agreements” and Underwriting — Directed share program.”

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Following the expiration of the lock-up period, certain shareholders under our new registration rights agreement will be entitled, subject to certain exceptions, to exercise their demand registration rights to register their shares under the Securities Act. If this right is exercised, holders of any of our common stock subject to the registration rights agreement will be entitled to participate in such registration. In addition, in our letter agreement with James Unger, we have agreed to use commercially reasonable efforts to file a registration statement on Form S-8 with the SEC to cover the registration of                      shares of our common stock (assuming an initial public offering price of $          , which represents the midpoint of the range on the cover page of this prospectus). We have agreed to include the balance of Mr. Unger’s shares in any registration statement we file on behalf of Mr. Icahn with regard to the registration for sale of our shares held by Mr. Icahn, provided the contractual restrictions and applicable lock-up period of Mr. Unger’s shares have lapsed. By exercising their registration rights, and selling a large number of shares, these holders could cause the price of our common stock to decline. An estimated                      shares of common stock will be subject to our registration rights agreement and Mr. Unger’s letter agreement upon completion of this offering. See “Shares eligible for future sale,” “Certain relationships and related party transactions— Registration rights,” “Management— Executive compensation— Employment agreements” and “Description of capital stock— Registration rights.”

We may require additional capital in the future and sales of our equity securities to provide this capital may dilute your ownership in us.

We may need to raise additional funds through public or private equity financings to:

Any additional capital raised through the sale of our equity securities may dilute your percentage ownership interest in us.

Carl C. Icahn will continue to exert significant influence over us.

We have been advised that in December 2005 an affiliate of Carl C. Icahn, our principal beneficial stockholder and the chairman of our board of directors, entered into a stock purchase agreement with the Foundation for a Greater Opportunity, or the Foundation, our other significant beneficial stockholder, to acquire all of our common stock held by the Foundation. The consummation of this acquisition requires the completion of this offering and the approval of applicable authorities of the State of New York. If the parties obtain this approval, we have been advised that the parties expect that the purchase would be completed in the first three months of 2006. Pending the closing of this purchase, and for so long as the stock purchase agreement has not been terminated, the Foundation has granted the affiliate of Mr. Icahn purchasing the shares owned by the Foundation an irrevocable proxy to vote all of the shares of our common stock held by the Foundation. The stock purchase agreement may be terminated by either party if the purchase does not occur by May 2006. As a result of these contemplated arrangements, we expect that Mr. Icahn will control approximately           % of the voting power of our capital stock following the offering. If the common stock held by the Foundation is not acquired by affiliates of Mr. Icahn, and the irrevocable proxy expires, Mr. Icahn will control approximately           % of the voting power of our common stock. Whether or not affiliates of Mr. Icahn acquire our common stock held by the Foundation, Mr. Icahn will be able to exert

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substantial influence over us, including the election of our directors, and controlling most matters requiring board or shareholder approval, including:

In addition, the existence of a controlling stockholder may have the effect of making it difficult for, or may discourage or delay, a third party from seeking to acquire, a majority of our outstanding common stock, which may adversely affect the market price of the stock.

Mr. Icahn’s interests may conflict with the interest of our stockholders.

Mr. Icahn owns and controls and has an interest in a wide array of companies, some of which such as ARL and ACF as described below, may compete directly or indirectly with us. As a result, his interests may not always be consistent with our interests or the interests of our other stockholders. For example, ARL, a railcar leasing company owned by Mr. Icahn, competes directly with our other customers that are in the railcar leasing business and ACF, which supplies us with critical components, also provides components to our competitors. ACF has also previously manufactured railcars and may do so in the future. Mr. Icahn and entities controlled by him may also pursue acquisitions or business opportunities that may be complementary to our business. Our certificate of incorporation will allow Mr. Icahn, entities controlled by him, and any director, officer, member, partner, stockholder or employee of Mr. Icahn or entities controlled by him, to take advantage of such corporate opportunities without first presenting such opportunities to us, unless such opportunities are expressly offered to any such party solely in, and as a direct result of, his or her capacity as our director, officer or employee. As a result, corporate opportunities that may benefit us may not be available to us in a timely manner, or at all. See “Description of Capital Stock— Corporate Opportunities.” To the extent that conflicts of interest may arise between us and Mr. Icahn and his affiliates, those conflicts may be resolved in a manner adverse to us or to you or other holders of our securities.

Upon the closing of this offering we may be a “controlled company” within the meaning of the Nasdaq National Market rules and you will not have the same protections afforded to shareholders of companies that are not “controlled companies” and, therefore, are subject to all of the Nasdaq National Market corporate governance requirements.

We have been advised that an affiliate of Carl C. Icahn has entered into an agreement to acquire all of our common stock held by the Foundation. The consummation of this acquisition of our common stock would require the completion of this offering and the approval of applicable authorities of the State of New York. If the parties obtain this approval, we have been advised that the parties expect that the purchase would be completed in the first three months of 2006. Pending the closing of this purchase, and for so long as the stock purchase agreement has not been terminated, the Foundation has granted the affiliate of Mr. Icahn purchasing the shares owned by the Foundation an irrevocable proxy to vote all of the shares of our common stock held by the Foundation. As a result of these contemplated arrangements, Mr. Icahn will control approximately            % of the voting power of our capital stock following the offering. Consequently, after the offering, we will be a “controlled company” within the meaning of the corporate governance standards of the Nasdaq National Market. Under these rules, a “controlled company” may elect not to comply with certain Nasdaq National Market corporate governance requirements, including requirements that a majority of the board of directors consist of independent directors; compensation of

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officers be determined or recommended to the board of directors by a majority of its independent directors or by a compensation committee that is composed entirely of independent directors; and director nominees be selected or recommended for selection by a majority of the independent directors or by a nominating committee composed solely of independent directors. If we are a “controlled company” following this offering, we intend to use these exemptions. As a result, we expect that we would not have a majority of independent directors, we would not have a compensation committee and we would not have a nominating committee. Accordingly, if we are a “controlled company” following this offering, you will not have the same protections afforded to shareholders of other companies that are not “controlled companies” and, therefore, are subject to all of the Nasdaq National Market corporate governance requirements.

Payments of cash dividends on our common stock may be made only at the discretion of our board of directors and Delaware law may restrict, and the agreements governing our revolving credit facility contain provisions that limit, our ability to pay dividends.

Our board of directors has never declared or paid any cash dividends on our common stock. Our board of directors may, in its discretion, refuse to pay dividends and any payment of dividends will depend upon our operating results, strategic plans, capital requirements, financial condition, provisions of our borrowing arrangements and other factors our board of directors considers relevant. In addition, the agreements governing our existing revolving credit facility restrict our ability to declare and pay dividends on our capital stock and the amended and restated revolving credit facility that we expect to enter into concurrently with this offering will also restrict our ability to declare and pay dividends. Furthermore, Delaware law imposes restrictions on our ability to pay dividends. For example, our board of directors may declare dividends only to the extent of our “surplus” (which is defined as total assets at fair market value minus total liabilities, minus statutory capital), or if there is no surplus, out of our net profits for the then-current and/or immediately preceding fiscal years. Accordingly, we may not be able to pay dividends in any given amount in the future, or at all.

As a result of being a public company, we will incur increased costs that may place a strain on our resources and our management’s attention may be diverted from other business concerns.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act, as well as new rules subsequently implemented by the Securities and Exchange Commission, or SEC, and the Nasdaq National Market, have required changes in corporate governance practices of public companies. We expect these new rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. We currently do not have an internal audit group. We will require significant resources and management oversight to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting. This may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, we will need to hire or outsource additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.

We also expect these new rules and regulations to make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We

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are currently evaluating and monitoring developments with respect to these new rules, and we cannot predict or estimate the amount of costs we may incur with respect to them or the timing of such costs.

This offering may cause us to undergo an “ownership change” for purposes of Section 382 of the Internal Revenue Code, which may limit our ability to use our net operating loss carryforwards and certain other tax attributes.

At December 31, 2004, the Company had net operating loss carryforwards of $26 million, which begin to expire in 2024. The tax effect of this federal net operating loss carryforwards were approximately $10.1 million. Under Section 382 of the Internal Revenue Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change of control net operating loss carryforward and other pre-change tax attributes against its post-change income may be limited. Although no definite determination can be made at this time, there is a possibility that this offering will cause us to undergo an ownership change under the Internal Revenue Code. These limitations may have the effect of reducing our after-tax cash flow. Even if this offering does not cause an ownership change to occur, we may undergo an ownership change after the offering due to subsequent changes in ownership of our common stock.

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Special note regarding forward-looking statements

This prospectus contains some forward-looking statements including, in particular, statements about our industry, plans, strategies and prospects. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, financial position or performance to be materially different from any future results, financial position or performance expressed or implied by such forward-looking statements. We have used the words “may,” “will,” “expect,” “anticipate,” “believe,” “forecast,” “estimate,” “plan,” “projected,” “intend” and similar expressions in this prospectus to identify forward-looking statements. We have based these forward-looking statements on our current views with respect to future events and financial performance. Our actual results or those of our industry could differ materially from those projected in the forward-looking statements.

Our forward-looking statements are subject to risks and uncertainties, including:

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Special note regarding forward-looking statements

Our actual results could be different from the results described in or anticipated by our forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections and may be better or worse than anticipated. Given these uncertainties, you should not rely on forward-looking statements. Forward-looking statements represent our estimates and assumptions only as of the date that they were made. We expressly disclaim any duty to provide updates to forward-looking statements, and the estimates and assumptions associated with them, after the date of this prospectus, in order to reflect changes in circumstances or expectations or the occurrence of unanticipated events except to the extent required by applicable securities laws. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed above under “Risk factors.” We caution you that these risks may not be exhaustive. We operate in a continually changing business environment and new risks emerge from time to time. You should carefully read this prospectus in its entirety as it contains information you should consider when making your investment decision.

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Use of proceeds

We estimate that we will receive net proceeds from this offering of approximately $      million (or $      million, if the underwriters exercise their over-allotment option in full), after deducting underwriting discounts and other estimated fees and expenses related to this offering payable by us, assuming an initial offering price of $     per share, which represents the midpoint of the range on the cover of this prospectus.

The table below shows the application of the net proceeds of this offering to give effect to the Transactions, as if the Transactions were completed as of September 30, 2005. Actual amounts will vary from the amounts shown below.

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Use of proceeds

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Dividend policy and restrictions

Our board of directors has never declared or paid any cash dividends on our common stock. Following this offering, we intend to pay cash dividends on our common stock.

As of the date of this prospectus, our board of directors has not determined the amount of any specific dividend. The declaration and payment of dividends will be at the discretion of our board of directors and will depend upon our operating results, strategic plans, capital requirements, financial condition, provisions of our borrowing arrangement and other factors our board of directors considers relevant.

Our existing revolving credit facility provides that the payment of dividends triggers a right in favor of the administrative agent and our lenders to accelerate all of our obligations under the credit facility, a demand right, unless we satisfy certain financial covenants and provide our lenders under that facility with advance notice of the dividend. We expect to amend and restate our existing revolving credit facility pursuant to a commitment letter we have received from our lenders concurrently with the completion of this offering. The amended and restated revolving credit facility would continue to contain provisions that trigger a demand right if we pay dividends on our common stock unless the payment would not cause the adjusted fixed charge coverage ratio to be less than 1.2 to 1.0 or the adjusted ratio of indebtedness to earnings before interest, taxes, depreciation and amortization to be greater than 4.0 to 1.0, each on a quarterly and/or annual basis, as defined in the amended and restated revolving credit facility. In addition, Delaware law imposes restrictions on our ability to pay dividends. For example, our board of directors may declare dividends only to the extent of our “surplus” (which is defined as total assets at fair market value minus total liabilities, minus statutory capital), or if there is no surplus, out of our net profits for the then-current and/or immediately preceding fiscal years. Accordingly, we may not be able to pay dividends in any given amount in the future, or at all.

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