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UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q

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

For the quarterly period ended
September 30, 2003

OR

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

For the transition period from

Commission File Number 333-64687



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GREAT LAKES DREDGE & DOCK CORPORATION

(Exact name of registrant as specified in its charter)


|                                                                             |  |                                             
|---------------------------------------------------------------------------- |  | --------------------------------------------
|Delaware
(State or other jurisdiction
of incorporation or organization)      |  | 13-3634726
(IRS Employer
Identification No.)
|                                                                             |  |                                             
|2122 York Road, Oak Brook, Illinois
(Address of principal executive offices) |  | 60523
(Zip Code)                            

Registrant telephone number, including area code: (630) 574-3000



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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes o   No x

As of
November 11, 2003, there were outstanding 16,169.82 shares of Class A
Common Stock, 33,639 shares of Class B Common Stock and 44,857 shares of Preferred Stock.



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TABLE OF CONTENTS



|                                      |                                                                                               |                                                      |  |  |  |  |  | 
|------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I  Financial Information       
|                                      |                                                                                               | Condensed Consolidated Balance Sheets               
|                                      |                                                                                               | Condensed Consolidated Statements of Income         
|                                      |                                                                                               | Condensed Consolidated Statements of Cash Flows     
|                                      |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                                      | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                      | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                      | Item 4. Controls and Procedures                                                              
|PART II  Other Information          
|                                      | Item 5. Other Information                                                                    
|                                      | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                            
|EXHIBIT INDEX                        
|Restated Certificate of Incorporation
|Certification                        
|Certification                        
|Certification                        
|Certification                        
|Press Release                        



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##### Table of Contents



Great Lakes Dredge & Dock Corporation and Subsidiaries
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period ended September 30, 2003

INDEX

Part I
    
    Financial InformationItem 1
    
    Financial Statements (Unaudited)
    
    PageCondensed Consolidated Balance Sheets at
September 30, 2003 and December 31, 2002
    
    2Condensed Consolidated Statements of Income
for the Three and Nine Months ended
September 30, 2003 and 2002
    
    3Condensed Consolidated Statements of Cash Flows
for the Nine Months ended September 30, 2003 and
2002
    
    4Notes to Unaudited Condensed Consolidated
Financial Statements
    
    5Item 2
    
    Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    17Item 3
    
    Quantitative and Qualitative Disclosures
About Market Risk
    
    24Item 4
    
    Controls and Procedures
    
    24Part II
    
    Other InformationItem 5
    
    Other Information
    
    25Item 6
    
    Exhibits and Reports on Form 8-K
    
    25Signature
    
    
    
    25Exhibit Index
    
    
    
    26


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PART I  Financial Information




Great Lakes Dredge & Dock Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share amounts)

September 30,
    
    December 31,2003
    
    2002AssetsCurrent assets:Cash and equivalents
    
$
    746
    
    
$
    1,456Accounts receivable, net
    
    
    59,432
    
    
    
    52,125Contract revenues in excess of billings
    
    
    14,691
    
    
    
    13,052Inventories
    
    
    14,812
    
    
    
    13,282Prepaid expenses and other current assets
    
    
    17,753
    
    
    
    18,283Total current assets
    
    
    107,434
    
    
    
    98,198Property and equipment, net
    
    
    138,393
    
    
    
    139,419Goodwill
    
    
    28,894
    
    
    
    29,405Inventories
    
    
    10,211
    
    
    
    9,828Investments in joint ventures
    
    
    7,192
    
    
    
    5,552Other assets
    
    
    4,122
    
    
    
    5,084Total assets
    
$
    296,246
    
    
$
    287,486Liabilities and Stockholders DeficitCurrent liabilities:Accounts payable
    
$
    41,886
    
    
$
    31,598Accrued expenses
    
    
    22,533
    
    
    
    30,114Billings in excess of contract revenues
    
    
    4,812
    
    
    
    10,915Current maturities of long-term debt
    
    
    1,762
    
    
    
    11,000Total current liabilities
    
    
    70,993
    
    
    
    83,627Long-term debt
    
    
    171,800
    
    
    
    161,769Deferred income taxes
    
    
    48,228
    
    
    
    46,363Other
    
    
    6,363
    
    
    
    5,787Total liabilities
    
    
    297,384
    
    
    
    297,546Minority interest
    
    
    1,760
    
    
    
    2,346Commitments and contingencies (Note 13)
    
    
    
    
    
    
    Stockholders deficit:Preferred stock, $.01 par value; 250,000 shares
authorized: 45,000 issued; 44,857 outstanding in 2003 and 2002
    
    
    1
    
    
    
    1Common stock, $.01 par value; 2003: 500,000 shares authorized,
50,000 shares issued and 49,808.82 shares outstanding;
2002: 50,000,000 shares authorized, 5,000,000 shares
issued and 4,980,882 shares outstanding
    
    
    50
    
    
    
    50Additional paid-in capital
    
    
    50,457
    
    
    
    50,457Accumulated deficit
    
    
    (53,242
    )
    
    
    (62,787
    )Accumulated other comprehensive income
    
    
    47
    
    
    
    103Treasury stock, at cost; 143 preferred shares and 19,118
common shares in 2003 and 2002
    
    
    (162
    )
    
    
    (162
    )Note receivable from stockholder
    
    
    (49
    )
    
    
    (68
    )Total stockholders deficit
    
    
    (2,898
    )
    
    
    (12,406
    )Total liabilities and stockholders deficit
    
$
    296,246
    
    
$
    287,486


See notes to unaudited condensed consolidated financial statements.

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Great Lakes Dredge & Dock Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(in thousands)

Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2003
    
    2002
    
    2003
    
    2002Contract revenues
    
$
    98,104
    
    
$
    100,055
    
    
$
    302,161
    
    
$
    263,443Costs of contract revenues
    
    
    80,001
    
    
    
    80,339
    
    
    
    250,912
    
    
    
    214,715Gross profit
    
    
    18,103
    
    
    
    19,716
    
    
    
    51,249
    
    
    
    48,728General and administrative expenses
    
    
    6,768
    
    
    
    8,387
    
    
    
    20,208
    
    
    
    21,713Operating income
    
    
    11,335
    
    
    
    11,329
    
    
    
    31,041
    
    
    
    27,015Interest expense, net
    
    
    (5,181
    )
    
    
    (5,415
    )
    
    
    (15,374
    )
    
    
    (16,009
    )Equity in earnings of joint ventures
    
    
    319
    
    
    
    127
    
    
    
    1,063
    
    
    
    209Minority interests
    
    
    (72
    )
    
    
    (419
    )
    
    
    (2
    )
    
    
    902Income before income taxes
    
    
    6,401
    
    
    
    5,622
    
    
    
    16,728
    
    
    
    12,117Income tax expense
    
    
    (2,836
    )
    
    
    (2,682
    )
    
    
    (7,183
    )
    
    
    (1,697
    )Net income
    
$
    3,565
    
    
$
    2,940
    
    
$
    9,545
    
    
$
    10,420


See notes to unaudited condensed consolidated financial statements.

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Great Lakes Dredge & Dock Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

Nine Months EndedSeptember 30,2003
    
    2002Operating ActivitiesNet income
    
$
    9,545
    
    
$
    10,420Adjustments to reconcile net income to net cash flows
from operating activities:Depreciation
    
    
    12,202
    
    
    
    11,755Earnings of equity method investments
    
    
    (1,063
    )
    
    
    (209
    )Minority interests
    
    
    2
    
    
    
    (902
    )Deferred income taxes
    
    
    1,567
    
    
    
    (506
    )Gain on dispositions of property and equipment
    
    
    (805
    )
    
    
    (428
    )Other, net
    
    
    1,824
    
    
    
    1,325Changes in assets and liabilities:Accounts receivable, net
    
    
    (7,307
    )
    
    
    (15,379
    )Contract revenues in excess of billings
    
    
    (1,639
    )
    
    
    9,929Inventories
    
    
    (1,913
    )
    
    
    1,760Prepaid expenses and other current assets
    
    
    3,158
    
    
    
    1,760Accounts payable and accrued expenses
    
    
    2,707
    
    
    
    (10,187
    )Billings in excess of contract revenues
    
    
    (6,103
    )
    
    
    2,522Net cash flows from operating activities
    
    
    12,175
    
    
    
    11,860Investing ActivitiesPurchases of property and equipment
    
    
    (14,179
    )
    
    
    (14,862
    )Dispositions of property and equipment
    
    
    838
    
    
    
    5,413Disposition of interest in Riovia investment
    
    
    1,200
    
    
    
    Purchase portion of minority interests share in
North American Site Developers, Inc.
    
    
    (75
    )
    
    
    Equity investment in land acquisition
    
    
    (1,047
    )
    
    
    Net cash flows from investing activities
    
    
    (13,263
    )
    
    
    (9,449
    )Financing ActivitiesRepayments of long-term debt
    
    
    (9,238
    )
    
    
    (8,000
    )Borrowings of revolving loans, net of repayments
    
    
    10,000
    
    
    
    6,000Financing fees
    
    
    (403
    )
    
    
    Repayment on note receivable from stockholder
    
    
    19
    
    
    
    18Net cash flows from financing activities
    
    
    378
    
    
    
    (1,982
    )Net change in cash and equivalents
    
    
    (710
    )
    
    
    429Cash and equivalents at beginning of period
    
    
    1,456
    
    
    
    2,590Cash and equivalents at end of period
    
$
    746
    
    
$
    3,019Supplemental Cash Flow InformationCash paid for interest
    
$
    18,777
    
    
$
    19,296Cash paid for taxes
    
$
    6,294
    
    
$
    4,002Supplemental Schedule of Noncash Investing and Financing
ActivitiesReclass of property and equipment to assets held for sale,
a component of prepaid expenses and other current assets
    
$
    2,970
    
    
$
    Issuance of common stock to certain members of management;
shares issued from treasury stock
    
$
    
    
    
$
    50


See notes to unaudited condensed consolidated financial statements.

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GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(dollars in thousands)

1. Basis of presentation

The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the U.S. for interim financial information. Accordingly, these financial
statements do not include all the information in the notes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, the unaudited condensed consolidated financial
statements include all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation of the financial position, results
of operations and cash flows as of and for the dates presented. The unaudited
condensed consolidated financial statements and notes herein should be read in
conjunction with the audited consolidated financial statements of Great Lakes
Dredge & Dock Corporation and Subsidiaries (the Company) and the notes
thereto, included in the Companys Annual Report filed on Form 10-K for the
year ended December 31, 2002.

The condensed consolidated results of operations for the interim periods
presented herein are not necessarily indicative of the results to be expected
for the full year.

2. Allocation of equipment cost

The Company can have significant fluctuations in dredging equipment
utilization throughout the year. Accordingly, for interim reporting, the
Company defers or accrues fixed equipment costs and amortizes the expenses in
proportion to revenues recognized over the year to better match revenues and
expenses.

3. Comprehensive income

Total comprehensive income comprises net income and net unrealized gains
and losses on cash flow hedges. Total comprehensive income for the three
months ended September 30, 2003 and 2002 was $3,436 and $3,176, respectively.
Total comprehensive income for the nine months ended September 30, 2003 and
2002 was $9,489 and $11,307, respectively.

4. Risk management activities

The Company uses derivative instruments to manage commodity price and
foreign currency exchange risks. Such instruments are not used for trading
purposes. As of September 30, 2003, the Company is party to various swap
arrangements to hedge the price of a portion of its diesel fuel purchase
requirements for work in its backlog to be performed through October 2004. As
of September 30, 2003, there were 8.0 million gallons remaining on these
contracts. Under these agreements, the Company will pay fixed prices ranging
from $0.72 to $0.78 per gallon. At September 30, 2003 and December 31, 2002,
the fair value on these contracts was estimated to be $77 and $169,
respectively, based on quoted market prices, and is recorded in other current
assets. Ineffectiveness related to these fuel hedge arrangements was determined
to be immaterial. The remaining gains included in accumulated other
comprehensive income at September 30, 2003 will be reclassified into earnings
over the next thirteen months, corresponding to the period during which the
hedged fuel is expected to be utilized.

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The carrying values of other financial instruments included in current
assets and current liabilities approximate fair values due to the short-term
maturities of these instruments. The carrying value of long-term bank debt is
a reasonable estimate of its fair value as interest rates are variable, based
on the prevailing market rates. At September 30, 2003 and December 31, 2002,
the Company had long-term subordinated notes outstanding with a recorded book
value of $154,800 and $154,769, respectively. The fair value of these notes
was $163,525 and $161,386 at September 30, 2003 and December 31, 2002,
respectively, based on quoted market prices.

5. Accounts receivable

Accounts receivable at September 30, 2003 and December 31, 2002 are as
follows:

September 30,
    
    December 31,2003
    
    2002Completed contracts
    $

    22,375
    
    $

    15,134Contracts in progress
    
    
    29,297
    
    
    
    31,466Retainage
    
    
    8,510
    
    
    
    6,51160,182
    
    
    
    53,111Allowance for doubtful accounts
    
    
    (750
    )
    
    
    (986
    )$

    59,432
    
    $

    52,125


6. Contracts in progress

The components of contracts in progress at September 30, 2003 and December
31, 2002 are as follows:

September 30,
    
    December 31,2003
    
    2002Costs and earnings in excess of billings:Costs and earnings for contracts in progress
    
$
    273,601
    
    
$
    190,837Amounts billed
    
    
    (260,059
    )
    
    
    (179,468
    )Costs and earnings in excess of billings for
contracts in progress
    
    
    13,542
    
    
    
    11,369Costs and earnings in excess of billings for
completed contracts
    
    
    1,149
    
    
    
    1,683$
    14,691
    
    
$
    13,052Prepaid contract costs (included in prepaid
expenses and other current assets)
    
$
    901
    
    
$
    3,218Billings in excess of costs and earnings:Amounts billed
    
    $
    (105,660
    )
    
    $
    (69,909
    )Costs and earnings for contracts in progress
    
    
    100,848
    
    
    
    58,994$
    (4,812
    )
    
    $
    (10,915
    )


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7. Accrued expenses

Accrued expenses at September 30, 2003 and December 31, 2002 are as
follows:

September 30,
    
    December 31,2003
    
    2002Payroll and employee benefits
    
$
    5,939
    
    
$
    8,615Insurance
    
    
    5,266
    
    
    
    6,477U.S. income and other taxes
    
    
    5,036
    
    
    
    4,721Interest
    
    
    2,301
    
    
    
    6,880Fixed equipment costs
    
    
    1,808
    
    
    
    Other
    
    
    2,183
    
    
    
    3,421$
    22,533
    
    
$
    30,114


8. Long-term debt

In March 2003, the Company amended its Credit Agreement to increase its
revolving credit facility from $70,000 to $80,000. The revolving credit
facility may be used for borrowings or for letters of credit; it expires in
2006.

9. Capital stock

The Company has authorized and issued 250,000 and 45,000 shares,
respectively, of preferred stock. The preferred stock has a stated value of
$1,000 per share and is entitled to annual dividends, if declared. Such
dividends are cumulative, whether or not declared, and accrue at the rate of
12%, compounding annually. The preferred stock may be redeemed at any time at
the option of the Company at its stated value plus cumulative dividends accrued
and unpaid thereon. At September 30, 2003 and December 31, 2002, dividends in
arrears on the preferred stock were $35,053 and $28,719, respectively. At
December 31, 2002, the Company had authorized and issued 25,000,000 and
1,636,100 shares, respectively, of class A voting common stock, and 25,000,000
and 3,363,900 shares, respectively, of class B nonvoting common stock, with a
par value of $.01 per share. On April 29, 2003, the Company affected a 100 for
1 reverse stock split of its common stock, such that the number of authorized
shares was reduced to 50,000, in total, and the number of issued and
outstanding shares reduced accordingly

10. Sale of interest in Riovia S.A.

In May 2003, the Company concluded the sale of its interest in Riovia
S.A., a venture whose sole business is the performance of a dredging contract
in Argentina and Uruguay. The Company realized a gain of $470, which is
reflected in equity from earnings of joint ventures in the statement of income.

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11. Purchase of minority interests share in North American Site Developers, Inc.

On September 30, 2003, the Company paid $75 to purchase all the shares of
one of the management stockholders of North American Site Developers, Inc.
(NASDI), in connection with his voluntary termination from NASDI. The
purchase price was determined in accordance with the terms of the NASDI Stock
Purchase Agreement. The Company applied purchase accounting on a preliminary
basis, which resulted in a reduction of goodwill in the amount of $511. This
accounting is subject to adjustment; however, the Company does not expect that
such adjustments will have a material effect on its consolidated financial
statements.

12. Segment information

The Company and its subsidiaries operate in two reportable segments:
dredging and demolition. The Companys financial reporting systems present
various data for management to run the business, including profit and loss
statements prepared according to the segments presented. Segment information
for the periods presented is as follows:

Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2003
    
    2002
    
    2003
    
    2002DredgingContract revenues
    
$
    88,028
    
    
$
    82,223
    
    
$
    274,225
    
    
$
    224,573Operating income
    
    
    9,879
    
    
    
    7,806
    
    
    
    29,002
    
    
    
    20,276DemolitionContract revenues
    
$
    10,076
    
    
$
    17,832
    
    
$
    27,936
    
    
$
    38,870Operating income
    
    
    1,456
    
    
    
    3,523
    
    
    
    2,039
    
    
    
    6,739TotalContract revenues
    
$
    98,104
    
    
$
    100,055
    
    
$
    302,161
    
    
$
    263,443Operating income
    
    
    11,335
    
    
    
    11,329
    
    
    
    31,041
    
    
    
    27,015


13. Commitments and contingencies

Commitments:

In the third quarter of 2003, the Company entered into an agreement to
construct a barge for approximately $5,000 to be delivered in January
2004. The
Company also entered into an arrangement to sell two tugboats for approximately
$5,200, which is expected to result in a financial gain to the Company upon
receipt of the proceeds. The net book value of $2,970 related to the tugboats
has been reclassified to assets held for sale as of September 30, 2003.

Also in the third quarter of 2003, the Company committed to purchase two
dredging vessels and certain ancillary equipment, all of which was under
an operating lease, for approximately $15,000 under terms consistent with the
lease agreement. The purchase was concluded in October using borrowings under
the Companys revolving credit facility.

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Contingencies:

At September 30, 2003, the Company is contingently liable, in the normal
course of business, for $16,376 in undrawn letters of credit, with the majority
relating primarily to contract performance guarantees and one covering the
Companys insurance payment liabilities.

Amboy Aggregates, a joint venture in which the Company has a 50% equity
interest, has a mortgage loan with a bank, which contains certain restrictive
covenants, including limitations on the amount of distributions to its joint
venture partners. The Company has guaranteed 50% of the outstanding mortgage
principal and accrued interest, which totaled $159 at September 30, 2003.

In 1997, GLDD purchased rights to dispose of a certain quantity of dredged
material in upland disposal sites in New Jersey at an original cost of $3,150
(land rights). In 2002, the Company entered into an agreement with the owner
of the site setting forth amended terms and conditions that address the
quantity and use of the land rights, among other matters. In 2003, the site
owner utilized the remaining availability of the initial disposal site and
Company management has learned that it is uncertain when future disposal sites
will be made available for the Company to utilize its remaining disposal
rights. The Company is currently pursuing action against the owner of the
site, but based on the uncertainty of these circumstances, management believes
there is a possibility that the Companys recovery of the land rights at their
recorded amount may be impaired. The Company will continue its assessment of
whether its land rights may be impaired, as the outcome of these circumstances
becomes known. The unused portion of the land rights is recorded at cost of
$2,276 and is included in other current and non-current assets on the Companys
consolidated balance sheet at September 30, 2003.

The Company finances certain key vessels used in its operations with
off-balance sheet lease arrangements with unrelated lessors, requiring annual
rentals of $17 to $18 million. These off-balance sheet leases contain default
provisions which are triggered by an acceleration of debt maturity under the
terms of the Companys Credit Agreement. Additionally, the leases typically
contain provisions whereby the Company indemnifies the lessors for the tax
treatment attributable to such leases based on the tax rules in place at lease
inception. The tax indemnifications do not have a contractual dollar limit.
Additionally, it is impractical to develop an estimate of the maximum potential
exposure under these lease indemnification arrangements, since it is entirely
dependent on the unique tax circumstances of each lessor.

Borrowings under the Companys Credit Agreement are secured by first lien
mortgages on certain operating equipment of the Company with a net book value
of $35,892 at December 31, 2002. Additionally, the Company obtains its
performance and bid bonds through a bonding agreement with a surety company
that has been granted a security interest in a substantial portion of the
Companys operating equipment with a net book value of approximately $60,826 at
December 31, 2002. The net book value of equipment serving as collateral under
these agreements at September 30, 2003 does not materially differ from the
values at December 31, 2002. Both the Credit Agreement and bonding agreement
contain certain provisions and covenants; the Company is in compliance with
such covenants at September 30, 2003. The performance and bid bonds are
customarily required for dredging and marine construction projects, as well as
some demolition projects. Bid bonds are generally obtained for a percentage of
bid value and aggregate amounts outstanding typically range between $5 to $10
million. At September 30, 2003, the Company had outstanding performance bonds
valued at approximately $380 million; however the revenue value remaining in
backlog related to these projects totaled approximately $190 million at
September 30, 2003.

Certain foreign projects performed by the Company have warranty periods,
typically spanning no more than three to five years beyond project completion,
whereby the Company retains responsibility to maintain the project site to
certain specifications during the warranty

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period. Generally, any potential liability of the Company is mitigated by
insurance, shared responsibilities with consortium partners, and/or recourse to
owner-provided specifications.

The Company considers it unlikely that it would have to perform under any
of these aforementioned contingent obligations and performance has never been
required in any of these circumstances in the past.

As is customary with negotiated contracts with the federal government, the
government has the right to audit the books and records of the Company to
ensure compliance with such contracts and applicable federal laws. The
government has the ability to seek a price adjustment based on the results of
such audit. Any such audits have not had and are not expected to have a
material adverse impact on the financial position or operations of the Company.

In the normal course of business, the Company is a defendant in various
legal proceedings. Resolution of these claims is not expected to have a
material adverse impact on the financial position or operations of the
Company.

14. Subsequent event

On
November 12, 2003, Great Lakes Dredge & Dock Corporation signed a
definitive agreement along with its current majority-owner, Vectura
Holding Company LLC, a portfolio company of Citigroup Venture Capital
Ltd., to sell the Company to an affiliate of Chicago-based private
equity investment firm, Madison Dearborn Partners, LLC, for $340
million in cash. All financing necessary to complete the transaction
has been committed and the sale is currently targeted to close by the
end of 2003.

15. Supplemental condensed consolidating financial information

Included
in the Companys long-term debt is $155,000 of 11 1/4% senior
subordinated notes which will mature on August 15, 2008. The payment
obligations of the Company under the senior subordinated notes are guaranteed
by the Companys domestic subsidiaries (the Subsidiary Guarantors). Such
guarantees are full, unconditional and joint and several. Separate financial
statements of the Subsidiary Guarantors are not presented because the Companys
management has determined that they would not be material to investors. The
following supplemental financial information sets forth, on a combined basis,
the balance sheets, statements of operations and statements of cash flows for
the Subsidiary Guarantors, the Companys non-guarantor subsidiaries and for the
Company (GLD Corporation). The Condensed Consolidating Statements of
Operations and Cash Flows for the three and nine months ended September 30,
2002 include the operations of NATCO Limited Partnership and North American
Trailing Company within the non-guarantor subsidiary information. Pursuant to
the Companys acquisition of the minority partners remaining shares in
November 2002, these entities were dissolved effective December 31, 2002 and
all subsequent activity is conducted by Great Lakes Dredge & Dock Company, a
wholly-owned subsidiary of the Company and a Subsidiary Guarantor.

10



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GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)

Condensed Consolidating Balance Sheet at September 30, 2003

Guarantor
    
    Other
    
    GLD
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    Subsidiaries
    
    Corporation
    
    Eliminations
    
    TotalsASSETSCurrent assets:Cash and equivalents
    
$
    734
    
    
$
    12
    
    
$
    
    
    
$
    
    
    
$
    746Accounts receivable, net
    
    
    59,432
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,432Receivables from affiliates
    
    
    23,974
    
    
    
    2,952
    
    
    
    6,000
    
    
    
    (32,926
    )
    
    
    Contract revenues in excess of billings
    
    
    14,691
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,691Inventories
    
    
    14,812
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,812Prepaid expenses and other current assets
    
    
    16,101
    
    
    
    
    
    
    
    1,652
    
    
    
    
    
    
    
    17,753Total current assets
    
    
    129,744
    
    
    
    2,964
    
    
    
    7,652
    
    
    
    (32,926
    )
    
    
    107,434Property and equipment, net
    
    
    103,424
    
    
    
    38
    
    
    
    34,931
    
    
    
    
    
    
    
    138,393Goodwill
    
    
    28,894
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,894Investments in subsidiaries
    
    
    5,294
    
    
    
    
    
    
    
    145,007
    
    
    
    (150,301
    )
    
    
    Notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    10,500
    
    
    
    (10,500
    )
    
    
    Inventories
    
    
    10,211
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,211Investments in joint ventures
    
    
    7,192
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,192Other assets
    
    
    2,293
    
    
    
    
    
    
    
    1,829
    
    
    
    
    
    
    
    4,122$
    287,052
    
    
$
    3,002
    
    
$
    199,919
    
    
$
    (193,727
    )
    
$
    296,246LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
$
    41,881
    
    
$
    
    
    
$
    
    
    
$
    5
    
    
$
    41,886Payables to affiliates
    
    
    12,992
    
    
    
    
    
    
    
    13,932
    
    
    
    (26,924
    )
    
    
    Accrued expenses
    
    
    16,083
    
    
    
    
    
    
    
    6,450
    
    
    
    
    
    
    
    22,533Billings in excess of contract revenues
    
    
    4,812
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,812Current maturities of long-term debt
    
    
    6,000
    
    
    
    
    
    
    
    1,762
    
    
    
    (6,000
    )
    
    
    1,762Total current liabilities
    
    
    81,768
    
    
    
    
    
    
    
    22,144
    
    
    
    (32,919
    )
    
    
    70,993Long-term debt
    
    
    3,000
    
    
    
    
    
    
    
    168,800
    
    
    
    
    
    
    
    171,800Notes payable to affiliates
    
    
    10,500
    
    
    
    
    
    
    
    
    
    
    
    (10,500
    )
    
    
    Deferred income taxes
    
    
    37,034
    
    
    
    7
    
    
    
    11,187
    
    
    
    
    
    
    
    48,228Other
    
    
    5,677
    
    
    
    
    
    
    
    686
    
    
    
    
    
    
    
    6,363Total liabilities
    
    
    137,979
    
    
    
    7
    
    
    
    202,817
    
    
    
    (43,419
    )
    
    
    297,384Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,760
    
    
    
    1,760Stockholders equity (deficit)
    
    
    149,073
    
    
    
    2,995
    
    
    
    (2,898
    )
    
    
    (152,068
    )
    
    
    (2,898
    )$
    287,052
    
    
$
    3,002
    
    
$
    199,919
    
    
$
    (193,727
    )
    
$
    296,246


11



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GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)

Condensed Consolidating Balance Sheet at December 31, 2002

Guarantor
    
    Other
    
    GLD
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    Subsidiaries
    
    Corporation
    
    Eliminations
    
    TotalsASSETSCurrent assets:Cash and equivalents
    
$
    1,451
    
    
$
    5
    
    
$
    
    
    
$
    
    
    
$
    1,456Accounts receivable, net
    
    
    52,125
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,125Receivables from affiliates
    
    
    7,970
    
    
    
    2,983
    
    
    
    
    
    
    
    (10,953
    )
    
    
    Contract revenues in excess of billings
    
    
    13,052
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,052Inventories
    
    
    13,282
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,282Prepaid expenses and other current assets
    
    
    17,132
    
    
    
    
    
    
    
    1,151
    
    
    
    
    
    
    
    18,283Total current assets
    
    
    105,012
    
    
    
    2,988
    
    
    
    1,151
    
    
    
    (10,953
    )
    
    
    98,198Property and equipment, net
    
    
    101,889
    
    
    
    86
    
    
    
    37,444
    
    
    
    
    
    
    
    139,419Goodwill
    
    
    29,405
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,405Investments in subsidiaries
    
    
    3,044
    
    
    
    
    
    
    
    126,494
    
    
    
    (129,538
    )
    
    
    Notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    21,000
    
    
    
    (21,000
    )
    
    
    Inventories
    
    
    9,828
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,828Investments in joint ventures
    
    
    5,552
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,552Other assets
    
    
    2,671
    
    
    
    
    
    
    
    2,413
    
    
    
    
    
    
    
    5,084$
    257,401
    
    
$
    3,074
    
    
$
    188,502
    
    
$
    (161,491
    )
    
$
    287,486LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
$
    31,809
    
    
$
    
    
    
$
    (108
    )
    
$
    (103
    )
    
$
    31,598Payables to affiliates
    
    
    3,945
    
    
    
    
    
    
    
    7,008
    
    
    
    (10,953
    )
    
    
    Accrued expenses
    
    
    18,658
    
    
    
    
    
    
    
    11,456
    
    
    
    
    
    
    
    30,114Billings in excess of contract revenues
    
    
    10,915
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,915Current maturities of long-term debt
    
    
    6,000
    
    
    
    
    
    
    
    11,000
    
    
    
    (6,000
    )
    
    
    11,000Total current liabilities
    
    
    71,327
    
    
    
    
    
    
    
    29,356
    
    
    
    (17,056
    )
    
    
    83,627Long-term debt
    
    
    3,000
    
    
    
    
    
    
    
    158,769
    
    
    
    
    
    
    
    161,769Notes payable to affiliates
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    (15,000
    )
    
    
    Deferred income taxes
    
    
    34,233
    
    
    
    30
    
    
    
    12,100
    
    
    
    
    
    
    
    46,363Other
    
    
    5,104
    
    
    
    
    
    
    
    683
    
    
    
    
    
    
    
    5,787Total liabilities
    
    
    128,664
    
    
    
    30
    
    
    
    200,908
    
    
    
    (32,056
    )
    
    
    297,546Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,346
    
    
    
    2,346Stockholders equity (deficit)
    
    
    128,737
    
    
    
    3,044
    
    
    
    (12,406
    )
    
    
    (131,781
    )
    
    
    (12,406
    )$
    257,401
    
    
$
    3,074
    
    
$
    188,502
    
    
$
    (161,491
    )
    
$
    287,486


12



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##### Table of Contents



GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)

Condensed Consolidating Statement of Income for the three months ended September 30, 2003

Guarantor
    
    Other
    
    GLD
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    Subsidiaries
    
    Corporation
    
    Eliminations
    
    TotalsContract revenues
    
$
    98,104
    
    
$
    
    
    
$
    
    
    
$
    
    
    
$
    98,104Costs of contract revenues
    
    
    (79,719
    )
    
    
    (15
    )
    
    
    (267
    )
    
    
    
    
    
    
    (80,001
    )Gross profit (loss)
    
    
    18,385
    
    
    
    (15
    )
    
    
    (267
    )
    
    
    
    
    
    
    18,103General and administrative expenses
    
    
    (6,738
    )
    
    
    (16
    )
    
    
    (14
    )
    
    
    
    
    
    
    (6,768
    )Operating income (loss)
    
    
    11,647
    
    
    
    (31
    )
    
    
    (281
    )
    
    
    
    
    
    
    11,335Interest expense, net
    
    
    (613
    )
    
    
    
    
    
    
    (4,568
    )
    
    
    
    
    
    
    (5,181
    )Equity in (loss) earnings of subsidiaries
    
    
    (27
    )
    
    
    
    
    
    
    6,519
    
    
    
    (6,492
    )
    
    
    Equity in earnings of joint ventures
    
    
    319
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    319Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (72
    )
    
    
    (72
    )Income (loss) before income taxes
    
    
    11,326
    
    
    
    (31
    )
    
    
    1,670
    
    
    
    (6,564
    )
    
    
    6,401Income tax (expense) benefit
    
    
    (4,716
    )
    
    
    13
    
    
    
    1,867
    
    
    
    
    
    
    
    (2,836
    )Net income (loss)
    
$
    6,610
    
    
$
    (18
    )
    
$
    3,537
    
    
$
    (6,564
    )
    
$
    3,565


Condensed Consolidating Statement of Income for the three months ended September 30, 2002

Guarantor
    
    Other
    
    GLD
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    Subsidiaries
    
    Corporation
    
    Eliminations
    
    TotalsContract revenues
    
$
    89,406
    
    
$
    18,394
    
    
$
    
    
    
$
    (7,745
    )
    
$
    100,055Costs of contract revenues
    
    
    (71,634
    )
    
    
    (15,983
    )
    
    
    (467
    )
    
    
    7,745
    
    
    
    (80,339
    )Gross profit (loss)
    
    
    17,772
    
    
    
    2,411
    
    
    
    (467
    )
    
    
    
    
    
    
    19,716General and administrative expenses
    
    
    (6,829
    )
    
    
    (1,524
    )
    
    
    (34
    )
    
    
    
    
    
    
    (8,387
    )Operating income (loss)
    
    
    10,943
    
    
    
    887
    
    
    
    (501
    )
    
    
    
    
    
    
    11,329Interest expense, net
    
    
    (1,573
    )
    
    
    (101
    )
    
    
    (3,741
    )
    
    
    
    
    
    
    (5,415
    )Equity in earnings of subsidiaries
    
    
    461
    
    
    
    
    
    
    
    6,041
    
    
    
    (6,502
    )
    
    
    Equity in earnings of joint ventures
    
    
    127
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    127Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (419
    )
    
    
    (419
    )Income before income taxes
    
    
    9,958
    
    
    
    786
    
    
    
    1,799
    
    
    
    (6,921
    )
    
    
    5,622Income tax (expense) benefit
    
    
    (3,634
    )
    
    
    (189
    )
    
    
    1,141
    
    
    
    
    
    
    
    (2,682
    )Net income
    
$
    6,324
    
    
$
    597
    
    
$
    2,940
    
    
$
    (6,921
    )
    
$
    2,940


13



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##### Table of Contents



GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)

Condensed Consolidating Statement of Income for the nine months ended September 30, 2003

Guarantor
    
    Other
    
    GLD
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    Subsidiaries
    
    Corporation
    
    Eliminations
    
    TotalsContract revenues
    
$
    302,161
    
    
$
    
    
    
$
    
    
    
$
    
    
    
$
    302,161Costs of contract revenues
    
    
    (249,866
    )
    
    
    (47
    )
    
    
    (889
    )
    
    
    (110
    )
    
    
    (250,912
    )Gross profit (loss)
    
    
    52,295
    
    
    
    (47
    )
    
    
    (889
    )
    
    
    (110
    )
    
    
    51,249General and administrative expenses
    
    
    (20,104
    )
    
    
    (38
    )
    
    
    (66
    )
    
    
    
    
    
    
    (20,208
    )Operating income (loss)
    
    
    32,191
    
    
    
    (85
    )
    
    
    (955
    )
    
    
    (110
    )
    
    
    31,041Interest expense, net
    
    
    (1,950
    )
    
    
    
    
    
    
    (13,424
    )
    
    
    
    
    
    
    (15,374
    )Equity in (loss) earnings of subsidiaries
    
    
    (78
    )
    
    
    
    
    
    
    18,554
    
    
    
    (18,476
    )
    
    
    Equity in earnings of joint ventures
    
    
    1,063
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,063Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Income (loss) before
income taxes
    
    
    31,226
    
    
    
    (85
    )
    
    
    4,175
    
    
    
    (18,588
    )
    
    
    16,728Income tax (expense) benefit
    
    
    (12,702
    )
    
    
    36
    
    
    
    5,483
    
    
    
    
    
    
    
    (7,183
    )Net income (loss)
    
$
    18,524
    
    
$
    (49
    )
    
$
    9,658
    
    
$
    (18,588
    )
    
$
    9,545


Condensed Consolidating Statement of Income for the nine months ended September 30, 2002

Guarantor
    
    Other
    
    GLD
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    Subsidiaries
    
    Corporation
    
    Eliminations
    
    TotalsContract revenues
    
$
    232,817
    
    
$
    50,510
    
    
$
    
    
    
$
    (19,884
    )
    
$
    263,443Costs of contract revenues
    
    
    (183,253
    )
    
    
    (49,945
    )
    
    
    (1,401
    )
    
    
    19,884
    
    
    
    (214,715
    )Gross profit (loss)
    
    
    49,564
    
    
    
    565
    
    
    
    (1,401
    )
    
    
    
    
    
    
    48,728General and administrative expenses
    
    
    (17,010
    )
    
    
    (4,577
    )
    
    
    (126
    )
    
    
    
    
    
    
    (21,713
    )Operating income (loss)
    
    
    32,554
    
    
    
    (4,012
    )
    
    
    (1,527
    )
    
    
    
    
    
    
    27,015Interest expense, net
    
    
    (2,854
    )
    
    
    (419
    )
    
    
    (12,736
    )
    
    
    
    
    
    
    (16,009
    )Equity in (loss) earnings of subsidiaries
    
    
    (3,682
    )
    
    
    
    
    
    
    20,355
    
    
    
    (16,673
    )
    
    
    Equity in earnings of joint ventures
    
    
    209
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    209Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    902
    
    
    
    902Income (loss) before
income taxes
    
    
    26,227
    
    
    
    (4,431
    )
    
    
    6,092
    
    
    
    (15,771
    )
    
    
    12,117Income tax (expense) benefit
    
    
    (5,507
    )
    
    
    (518
    )
    
    
    4,328
    
    
    
    
    
    
    
    (1,697
    )Net income (loss)
    
$
    20,720
    
    
$
    (4,949
    )
    
$
    10,420
    
    
$
    (15,771
    )
    
$
    10,420


14



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GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)

Condensed Consolidating Cash Flows for the nine months ended September 30, 2003

Guarantor
    
    Other
    
    GLD
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    Subsidiaries
    
    Corporation
    
    Eliminations
    
    TotalsOperating ActivitiesNet income (loss)
    
$
    18,524
    
    
$
    (49
    )
    
$
    9,658
    
    
$
    (18,588
    )
    
$
    9,545Adjustments to reconcile net income (loss) to net
cash flows from operating activities:Depreciation
    
    
    9,808
    
    
    
    48
    
    
    
    2,346
    
    
    
    
    
    
    
    12,202Earnings of subsidiaries and
equity method investments
    
    
    (985
    )
    
    
    
    
    
    
    (18,664
    )
    
    
    18,586
    
    
    
    (1,063
    )Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Deferred income taxes
    
    
    2,329
    
    
    
    (23
    )
    
    
    (739
    )
    
    
    
    
    
    
    1,567Gain on dispositions of property
and equipment
    
    
    (805
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (805
    )Other, net
    
    
    811
    
    
    
    
    
    
    
    1,013
    
    
    
    
    
    
    
    1,824Changes in assets and liabilities:
    
    
    
    
    
    
    Accounts receivable, net
    
    
    (7,242
    )
    
    
    
    
    
    
    (65
    )
    
    
    
    
    
    
    (7,307
    )Contract revenues in excess of billings
    
    
    (1,639
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,639
    )Inventories
    
    
    (1,913
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,913
    )Prepaid expenses and other current assets
    
    
    3,642
    
    
    
    
    
    
    
    (484
    )
    
    
    
    
    
    
    3,158Accounts payable and accrued expenses
    
    
    7,514
    
    
    
    
    
    
    
    (4,807
    )
    
    
    
    
    
    
    2,707Billings in excess of contract revenues
    
    
    (6,103
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,103
    )Net cash flows from operating activities
    
    
    23,941
    
    
    
    (24
    )
    
    
    (11,742
    )
    
    
    
    
    
    
    12,175Investing ActivitiesPurchases of property and equipment
    
    
    (14,179
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,179
    )Dispositions of property and equipment
    
    
    838
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    838Disposition of interest in Riovia investment
    
    
    1,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,200Purchase portion of minority interests
share in North American Site Developers, Inc
    
    
    (75
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75
    )Equity investment in land acquisition
    
    
    (1,047
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,047
    )Net cash flows from investing activities
    
    
    (13,263
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,263
    )Financing ActivitiesRepayments of long-term debt
    
    
    
    
    
    
    
    
    
    
    (9,238
    )
    
    
    
    
    
    
    (9,238
    )Borrowings of revolving loans, net of repayments
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    10,000Net change in accounts with affiliates
    
    
    (11,414
    )
    
    
    31
    
    
    
    11,383
    
    
    
    
    
    
    
    Financing fees
    
    
    
    
    
    
    
    
    
    
    (403
    )
    
    
    
    
    
    
    (403
    )Repayments on note receivable from stockholder
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19Net cash flows from financing activities
    
    
    (11,395
    )
    
    
    31
    
    
    
    11,742
    
    
    
    
    
    
    
    378Net change in cash and equivalents
    
    
    (717
    )
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    (710
    )Cash and equivalents at beginning of period
    
    
    1,451
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    1,456Cash and equivalents at end of period
    
$
    734
    
    
$
    12
    
    
$
    
    
    
$
    
    
    
$
    746


15



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##### Table of Contents



GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)

Condensed Consolidating Statement of Cash Flows for the nine months ended September 30, 2002

Guarantor
    
    Other
    
    GLD
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    Subsidiaries
    
    Corporation
    
    Eliminations
    
    TotalsOperating ActivitiesNet income (loss)
    
$
    20,720
    
    
$
    (4,949
    )
    
$
    10,420
    
    
$
    (15,771
    )
    
$
    10,420Adjustments to reconcile net income (loss) to net
cash flows from operating activities:Depreciation
    
    
    8,180
    
    
    
    1,588
    
    
    
    1,987
    
    
    
    
    
    
    
    11,755Loss (earnings) of subsidiaries
and equity method investments
    
    
    3,682
    
    
    
    
    
    
    
    (20,564
    )
    
    
    16,673
    
    
    
    (209
    )Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (902
    )
    
    
    (902
    )Deferred income taxes
    
    
    193
    
    
    
    7
    
    
    
    (706
    )
    
    
    
    
    
    
    (506
    )Gain on dispositions of property
and equipment
    
    
    (428
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (428
    )Other, net
    
    
    1,895
    
    
    
    (26
    )
    
    
    (544
    )
    
    
    
    
    
    
    1,325Changes in assets and liabilities:Accounts receivable
    
    
    (12,305
    )
    
    
    (3,074
    )
    
    
    
    
    
    
    
    
    
    
    (15,379
    )Contract revenues in excess of billings
    
    
    11,343
    
    
    
    (1,414
    )
    
    
    
    
    
    
    
    
    
    
    9,929Inventories
    
    
    1,723
    
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    1,760Prepaid expenses and other current assets
    
    
    (176
    )
    
    
    2,138
    
    
    
    (202
    )
    
    
    
    
    
    
    1,760Accounts payable and accrued expenses
    
    
    (3,422
    )
    
    
    (2,098
    )
    
    
    (4,667
    )
    
    
    
    
    
    
    (10,187
    )Billings in excess of contract revenues
    
    
    2,098
    
    
    
    424
    
    
    
    
    
    
    
    
    
    
    
    2,522Net cash flows from operating activities
    
    
    33,503
    
    
    
    (7,367
    )
    
    
    (14,276
    )
    
    
    
    
    
    
    11,860Investing ActivitiesPurchases of property and equipment
    
    
    (14,177
    )
    
    
    (685
    )
    
    
    
    
    
    
    
    
    
    
    (14,862
    )Dispositions of property and equipment
    
    
    5,413
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,413Net cash flows from investing activities
    
    
    (8,764
    )
    
    
    (685
    )
    
    
    
    
    
    
    
    
    
    
    (9,449
    )Financing ActivitiesRepayments of long-term debt
    
    
    
    
    
    
    
    
    
    
    (8,000
    )
    
    
    
    
    
    
    (8,000
    )Borrowings of revolving loans, net of repayments
    
    
    
    
    
    
    
    
    
    
    6,000
    
    
    
    
    
    
    
    6,000Principal receipts (payments) on capital leases
    
    
    
    
    
    
    (1,661
    )
    
    
    1,661
    
    
    
    
    
    
    
    Net change in accounts with affiliates
    
    
    (26,177
    )
    
    
    11,580
    
    
    
    14,597
    
    
    
    
    
    
    
    Repayment on note receivable from stockholder
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    
    
    
    
    18Net cash flows from financing activities
    
    
    (26,177
    )
    
    
    9,919
    
    
    
    14,276
    
    
    
    
    
    
    
    (1,982
    )Net change in cash and equivalents
    
    
    (1,438
    )
    
    
    1,867
    
    
    
    
    
    
    
    
    
    
    
    429Cash and equivalents at beginning of period
    
    
    2,515
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    2,590Cash and equivalents at end of period
    
$
    1,077
    
    
$
    1,942
    
    
$
    
    
    
$
    
    
    
$
    3,019


16



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##### Table of Contents






Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Statement Under the Private Securities Litigation Reform Act

Certain information in this quarterly report on Form 10-Q, including but not
limited to the Managements Discussion and Analysis of Financial Condition and
Results of Operations, may constitute forward-looking statements as such term
is defined in Section 27A of the Securities Exchange Act of 1933 (the
Securities Act) and Section 21E of the Securities Exchange Act of 1934.
Certain forward-looking statements can be identified by the use of
forward-looking terminology such as, believes, expects, may, will,
should, seeks, approximately, intends, plans, estimates,
anticipates, or hopeful, or the negative thereof or other comparable
terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve risks and uncertainties, including those
described in the Risk Factors section of Item 1 of the Companys Form S-4
Registration Statement (Registration No. 333-60300), which could cause actual
results to be materially different than those in the forward-looking
statements, which speak only as of the date hereof. The Company assumes no
obligation to update such information.

General

The Company is the largest provider of dredging services in the United States.
Dredging generally involves the enhancement or preservation of the navigability
of waterways or the protection of shorelines through the removal or
replenishment of soil, sand or rock. The U.S. dredging market consists of
three primary types of work: Capital, Maintenance and Beach Nourishment, in
which the Company experienced an average combined U.S. bid market share of 42%
over the last three years. The Companys bid market is defined as the
population of projects on which it bid or could have bid if not for capacity
constraints (bid market). In addition, the Company has continued its role as
the only U.S. dredging contractor with significant international operations,
which averaged 16% of its contract revenues over the last three years.

The Company also owns 85% of the capital stock of North American Site
Developers, Inc. (NASDI), a demolition service provider located in the
Boston, Massachusetts area. NASDIs principal services consist of interior and
exterior demolition of commercial and industrial buildings, salvage and
recycling of related materials, and removal of hazardous substances and
materials. One NASDI management stockholder retains a 15% non-voting interest
in NASDI.

The Companys equity in earnings of joint ventures relates to the Companys 50%
ownership interest in Amboy Aggregates (Amboy) which is accounted for using
the equity method. Through November 2002, the Company conducted certain hopper
dredging activities, primarily maintenance and beach nourishment projects,
through the operations of NATCO Limited Partnership (NATCO) and North
American Trailing Company (North American). On November 25, 2002, the Company
purchased its foreign minority partners interests in NATCO and North American
for $4.5 million. These subsidiary entities were dissolved at the end of 2002,
and all hopper dredging activities are now being conducted by Great Lakes
Dredge & Dock Company, a wholly-owned dredging subsidiary of the Company.
Therefore, minority interest solely reflects the NASDI management stockholders
15% interest in NASDI.

17



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##### Table of Contents



Results of Operations

The following table sets forth the components of net income and EBITDA as a
percentage of contract revenues for the three and nine months ended September
30, 2003 and 2002:

Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2003
    
    2002
    
    2003
    
    2002Contract revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of contract revenues
    
    
    (81.5
    )
    
    
    (80.3
    )
    
    
    (83.0
    )
    
    
    (81.5
    )Gross profit
    
    
    18.5
    
    
    
    19.7
    
    
    
    17.0
    
    
    
    18.5General and administrative
expenses
    
    
    (6.9
    )
    
    
    (8.4
    )
    
    
    (6.7
    )
    
    
    (8.2
    )Operating income
    
    
    11.6
    
    
    
    11.3
    
    
    
    10.3
    
    
    
    10.3Interest expense, net
    
    
    (5.3
    )
    
    
    (5.4
    )
    
    
    (5.1
    )
    
    
    (6.0
    )Equity in earnings of joint
ventures
    
    
    0.3
    
    
    
    0.1
    
    
    
    0.3
    
    
    
    Minority interest
    
    
    (0.1
    )
    
    
    (0.4
    )
    
    
    
    
    
    
    0.3Income before income taxes
    
    
    6.5
    
    
    
    5.6
    
    
    
    5.5
    
    
    
    4.6Income tax expense
    
    
    (2.9
    )
    
    
    (2.7
    )
    
    
    (2.4
    )
    
    
    (0.6
    )Net income
    
    
    3.6
    %
    
    
    2.9
    %
    
    
    3.1
    %
    
    
    4.0
    %EBITDA
    
    
    15.7
    %
    
    
    15.2
    %
    
    
    14.3
    %
    
    
    14.7
    %


EBITDA, as provided herein, represents earnings from continuing operations
before interest expense (net), income taxes and depreciation expense, and
excludes equity in earnings from joint ventures and minority interests. The
Companys EBITDA is included as it is a basis upon which the Company assesses
its financial performance, and certain covenants in the Companys borrowing
arrangements are tied to similar measures. The Company believes EBITDA is a
useful measure for the users of its financial statements because it provides
information that can be used to evaluate the effectiveness of the Companys
business from an operational perspective, exclusive of costs to finance its
activities, income taxes, depreciation of operating assets, and equity in
earnings from joint ventures and minority interests, none of which is directly
relevant to the efficiency of its operations. The Companys measure of EBITDA
may not be comparable to similar measurements used by other companies and
should not be construed as a substitute for other performance or liquidity
measures such as net income, operating income or operating cash flows reported
in accordance with accounting principles generally accepted in the United
States of America (GAAP).

18



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##### Table of Contents



EBITDA is reconciled to net income, as follows:

Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2003
    
    2002
    
    2003
    
    2002Net income
    $

    3,565
    
    $

    2,940
    
    $

    9,545
    
    
$
    10,420Adjusted for:Interest expense, net
    
    
    5,181
    
    
    
    5,415
    
    
    
    15,374
    
    
    
    16,009Income tax expense
    
    
    2,836
    
    
    
    2,682
    
    
    
    7,183
    
    
    
    1,697Depreciation
    
    
    4,067
    
    
    
    3,843
    
    
    
    12,202
    
    
    
    11,755Other (income) expense *
    
    
    (247
    )
    
    
    292
    
    
    
    (1,061
    )
    
    
    (1,111
    )EBITDA
    $

    15,402
    
    $

    15,172
    
    $

    43,243
    
    
$
    38,770


* Represents equity in earnings of joint venture and minority interest expense.

The following table sets forth, by segment and dredging type of work, the
Companys contract revenues for the three and nine months ended and backlog as
of the periods indicated:

Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,Revenues (in thousands)
    
    2003
    
    2002
    
    2003
    
    2002Dredging:Capital  U.S
    
$
    54,717
    
    
$
    35,923
    
    
$
    165,145
    
    
$
    80,969Capital  foreign
    
    
    21,459
    
    
    
    14,745
    
    
    
    51,010
    
    
    
    42,680Beach
    
    
    298
    
    
    
    13,335
    
    
    
    31,371
    
    
    
    64,112Maintenance
    
    
    11,554
    
    
    
    18,220
    
    
    
    26,699
    
    
    
    36,812Demolition
    
    
    10,076
    
    
    
    17,832
    
    
    
    27,936
    
    
    
    38,870$
    98,104
    
    
$
    100,055
    
    
$
    302,161
    
    
$
    263,443September 30,Backlog (in thousands)
    
    
    
    
    
    
    
    
    
    2003
    
    2002Dredging:Capital  U.S
    
    
    
    
    
    
    
    
    
$
    139,198
    
    
$
    239,626Capital  foreign
    
    
    
    
    
    
    
    
    
    
    32,371
    
    
    
    64,264Beach
    
    
    
    
    
    
    
    
    
    
    30,356
    
    
    
    39,825Maintenance
    
    
    
    
    
    
    
    
    
    
    16,345
    
    
    
    13,721Demolition
    
    
    
    
    
    
    
    
    
    
    11,686
    
    
    
    18,321$
    229,956
    
    
$
    375,757


Third quarter 2003 revenues were $98.1 million, compared to third quarter 2002
revenues of $100.0 million. Revenues for the first nine months of 2003 were
$302.2 million, an increase of $38.8 million or 14.7% over revenues for the
first nine months of 2002 of $263.4 million. While

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##### Table of Contents



the third quarter revenues
for 2003 and 2002 were at similar levels, there was a proportionately higher
amount of domestic and foreign capital dredging work in the 2003 period. On a
year to date basis, the increase in 2003 revenues continues to be predominantly
a result of additional domestic capital dredging work, much of which was in the
2002 year-end backlog. Gross profit margins for the third quarter of 2003 were
18.5% compared to 19.7% for the third quarter of 2002, and 17.0% compared to
18.5% for the first nine months of 2003 and 2002, respectively. Although
revenues benefited from the additional capital work, 2003 gross profit margins
for the third quarter and year to date declined from 2002 levels, due to the
impact of lower margins achieved on certain demolition projects. While NASDIs
performance improved in the third quarter, NASDI continues to be impacted by
additional competition in the demolition industry as the economy has slowed,
and margins have tightened accordingly throughout 2003.

Capital projects include large port deepenings and other infrastructure
projects. Domestic capital dredging revenue increased $18.8 million and $84.2
million and in the third quarter and first nine months of 2003, respectively,
as compared to the same periods of 2002. As mentioned previously, this is a
result of the significant amount of capital project backlog added in 2002. The
2002 domestic dredging bid market was significantly larger than in prior years
and heavily weighted toward Deep Port capital work. The Company successfully
bid and won over 60% of the 2002 Deep Port bid market and continues to perform
on some of these projects. As discussed in previous filings, the Deep Port
projects were authorized by the 1986 Water Resource Development Act (WRDA)
and subsequent bills. In 1997, the Army Corps of Engineers (Corps) announced
Deep Port work, authorized by WRDA, to be completed through 2005, with a value
in excess of $2.0 billion, and supplemental authorizations have increased this
amount to approximately $4.0 billion, with work to be completed through 2010.
Since the 1997 announcement, numerous projects with a combined revenue value of
over $1.3 billion have been let for bid and awarded through the third quarter
of 2003. The Company has been the low bidder on projects with a total value in
excess of $600 million, representing 46% of the total let for bid and awarded.

During the third quarter of 2003, the Company continued work on the Deep Port
projects in Kill Van Kull, New York; Jacksonville Harbor, Florida; and
Wilmington Harbor, North Carolina, which contributed combined revenue to the
quarter of $35.0 million. The Deep Port projects in Houston, Texas and Los
Angeles, California contributed an additional $3.1 million; however most of
this revenue was related to subcontractors and other preparatory work being
performed prior to commencement of the dredging portion of these projects. The
new work capital project along the Providence River and harbor in the Rhode
Island area added another $6.5 million of revenue to the quarter. During the
quarter, the Company completed its dredging assignment in Umm Qasr,
Iraq, the purpose of which was to enable aid ships to enter the port area to offload. Revenue
for this work in Iraq, along with continuing work on the projects in Bahrain;
Ghana; and Alexandria, Egypt totaled $20.6 million for the quarter.

Beach nourishment projects include rebuilding of shoreline areas which have
been damaged by storm activity or ongoing erosion. Third quarter and year to
date 2003 revenues from beach nourishment projects decreased $13.0 million and
$32.7 million, respectively, due primarily to the low volume of beach bidding
activity in the first half of 2003. The Company performed only minimal beach
work during the quarter relating to the start-up of an emergency dredging
project to repair a breach caused by Hurricane Isabel in the outer banks at
Cape Hatteras, North Carolina.

Maintenance projects include routine dredging of ports, rivers and channels to
remove the regular build up of sediment. Maintenance revenues declined $6.7
million and $10.1 million in the third quarter and first nine months of 2003,
respectively, compared to the same periods of 2002. The

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##### Table of Contents



decline in maintenance
revenue was anticipated as the Companys fleet continues to be highly utilized
performing capital dredging projects, which is generally higher margin work.
Third quarter maintenance revenues were primarily derived from a number of
dredge rental projects along the Mississippi River, as well as a few other
typical Corps maintenance projects.

NASDIs demolition revenue for the third quarter and first nine months of 2003
declined $7.8 million and $10.9 million, respectively, from the same periods of
2002, as a result of the slow down in the economy. NASDIs third quarter
activity included work on a large number of small demolition and site
remediation projects in the Boston area, as well as continuing work on a couple
of larger projects including Quarry Street in Quincy and the Equity Office
Building in Boston.

Net interest expense for the third quarter and first nine months of 2003
declined slightly from the same periods of 2002, due to a reduction in the
Companys bank borrowings. Minority interest for the 2003 periods reflects
the expense to the Company due solely to NASDIs earnings in the periods,
whereas the 2002 minority interest amounts also include the impact of NATCOs
operations.

The Companys effective income tax rate for the third quarter and first nine
months of 2003 was approximately 43% compared to approximately 42% and 13% for
the same periods of 2002. On a year to date basis, 2002 benefited from a
significant tax deduction taken in the second quarter. Net income was $3.6
million for the third quarter of 2003, compared to $2.9 million for the third
quarter of 2002. For the first nine months of 2003, net income was $9.5
million compared to $10.4 million for the same period of 2002. Net income for
the 2002 year to date period was favorably impacted by the significant tax
deduction. EBITDA (as defined on page 18) was $15.4
million and $43.2 million for the quarter and nine months ended September 30,
2003, compared to $15.2 million and $38.8 million for the same periods of 2002.
EBITDA improved in 2003 as a result of the increase in domestic capital
dredging revenues, but was impacted by the lower margins achieved in the
demolition segment.

Backlog

The Companys contract backlog represents managements current estimate of the
revenues which will be realized under the portion of the contracts remaining to
be performed. Such estimates are subject to fluctuations based upon the amount
of material actually dredged, as well as factors affecting the time required to
complete the job. In addition, because a substantial portion of the Companys
backlog relates to government contracts, the Companys backlog can be canceled
at any time without penalty. However, the Company can generally recover the
actual committed costs and profit on work performed up to the date of
cancellation. Consequently, backlog is not necessarily indicative of future
revenues. The Companys backlog includes only those projects for which the
customer has provided an executed contract.

As of September 30, 2003, the Company had dredging backlog of $218.3 million,
which compares to dredging backlog of $357.4 million at September 30, 2002 and
$244.7 million at June 30, 2003. Bidding activity through the first half of
2003 was unusually slow and resulted in a dredging bid market for the six
months totaling only $162 million. However, as anticipated,
bidding activity did accelerate in the third quarter resulting in a third
quarter dredging bid market of $185 million, bringing the year to date bid
market to $347 million. As a result of the reduced bid market early in the
year, competition was increased for those bids that did come out. This,
coupled with the Companys equipment commitments resulting from its successful
bidding

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performance in 2002, contributed to the Company winning only 25% of
the work bid and awarded through September 2003. While lower than its average
historical bid market share of recent years, the Company has still won more of
the 2003 work than any other individual competitor, as a result of two
second-tier competitors each winning a significant project in the first part
of 2003, which more greatly dispersed the results. Based on recent bid
schedules provided by the Corps, it is anticipated that the fourth quarter bid
market should continue to reflect typical bidding levels, but it is unlikely
that the annual bid market will approach the levels seen in recent years.

Backlog at September 30, 2003 continues to be concentrated in the domestic
capital dredging market. The Deep Port capital work, which is generally higher
margin work, makes up approximately 41% of total backlog and much of this work
will be performed throughout the remainder of 2003 and into 2004. Domestic
capital backlog at September 30, 2003 includes work remaining on Deep Port
projects in Kill Van Kull, New York; Los Angeles, California; Houston, Texas;
Wilmington, North Carolina; and Manatee Harbor, Florida. Foreign capital
project backlog, which comprises $32 million or 14% of the September 30, 2003
backlog, relates primarily to the long-term project in Bahrain, as well as work
remaining on the projects in Ghana, which is substantially complete and in the
process of demobilizing, and Alexandria, Egypt, which was bid and won in the
first quarter of 2003.

Beach backlog at September 30, 2003 totaled $30.4 million, the majority of
which was added in the third quarter. Beach work is often bid in the second
half of the year, since the work is generally performed between the months of
September to March, due to environmental restrictions. During the quarter,
seven beach projects were bid and awarded with a value of approximately $60
million, of which the Company won four valued at $43 million, although a
portion of this represents project options which are still pending award at
September 30, 2003 and have therefore not been reflected in backlog. The
Company continues to monitor schedules provided by project owners which
identify additional beach nourishment projects valued in excess of $100
million, the majority of which are expected to bid over the next six months.
This includes a large project in Miami Beach which will be re-bid, a few other
projects likely to be in excess of $10 million in Florida, North Carolina and
Alabama, as well as numerous other smaller projects.

Maintenance backlog at September 30, 2003 was $16.3 million, which represents a
typical level for the Company at this point in the year. There were numerous $3 to
$5 million projects let for bid during the quarter, and the Company focused on
obtaining those projects that would enable it to utilize its available
equipment.

The demolition backlog level at September 30, 2003 was $11.7 million, which
compares to $18.3 million at September 30, 2002 and $15.5 million at June 30,
2003. While NASDI has continued to encounter additional competition given the
slow-down in the economy, the demolition bidding activity has started to
increase and NASDIs management anticipates that a few larger projects will be
awarded within the next six months, which will have the potential to improve
margins in this segment.

Liquidity and Capital Resources

The Companys primary sources of liquidity are cash flows from operations and
borrowings under the revolving line of credit with the Companys senior
lenders. The Companys primary uses of cash are funding working capital,
capital expenditures and debt service.

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The Companys net cash generated by operating activities for the nine months
ended September 30, 2003 and 2002 totaled $12.2 million and $11.9 million,
respectively. The fluctuation between years is primarily a result of the
normal timing differences on the recognition and billing of revenues.

The Companys net cash flows used in investing activities were $13.3 million
compared to $9.4 million for the first nine months of 2003 and 2002,
respectively. The use of cash relates primarily to equipment acquisitions,
offset by proceeds on the sale of equipment, including approximately $4.8
million related to the sale of a barge in 2002, which was subsequently leased
back under an operating lease. In 2003, the Company also utilized $1.0 million
to purchase 50% of a real estate interest related to its Amboy joint venture
and received $1.2 million related to the sale of its joint venture investment
in Riovia.

In the third quarter of 2003, the Company entered into an agreement to
construct a barge for approximately $5.0 million to be delivered
in January 2004.
The Company has also entered into an arrangement to sell two tugboats for
approximately $5.2 million, which is expected to result in a financial gain to
the Company upon receipt of the proceeds.

Also in the third quarter of 2003, the Company committed to purchase two
dredging vessels and some ancillary equipment, all of which were under
an operating lease, for approximately $15 million under terms consistent with the
lease agreement. The purchase was concluded in October using borrowings under
the Companys revolving credit facility.

The Companys net cash flows from financing activities for the first nine
months of 2003 totaled $0.4 million compared to a use of $2.0 million in the
same period of 2002. In 2003 period, the Company made increased payments on
its term bank loan, but borrowed more on its revolver credit facility to fund
its working capital investment.

Management believes cash flows from operations and available credit will be
sufficient to finance operations, planned capital expenditures and debt service
requirements for the foreseeable future. The
Companys ability to fund its working capital needs, planned capital
expenditures and scheduled debt payments, to refinance its indebtedness, and to
comply with all of the financial covenants under its debt agreements, depends
on its future operating performance and cash flow, which in turn, are subject
to prevailing economic conditions and to financial, business and other factors,
some of which are beyond the Companys control.

Critical Accounting Policies and Estimates

In preparing its consolidated financial statements, the Company follows
accounting principles generally accepted in the United States of America. The
application of these principles requires significant judgments or an estimation
process that can affect the results of operations, financial
position and cash flows of the Company, as well as the related footnote
disclosures. The Company continually reviews its accounting policies and
financial information disclosures. There have been no material changes in
policies or estimates since December 31, 2002.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The market risk of the Companys financial instruments as of September 30, 2003
has not significantly changed since December 31, 2002. The market risk profile
of the Company on December 31, 2002 is disclosed in the Companys 2002 Annual
Report on Form 10-K.




Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. The Companys
management, with the participation of its Chief Executive Officer and Chief
Financial Officer, have conducted an evaluation of the effectiveness of
disclosure controls and procedures (as such term is defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the
end of the period covered by this quarterly report. Based on that evaluation,
such officers have concluded that the disclosure controls and procedures are
effective in ensuring that all material information required to be filed in
this quarterly report has been made known to them in a timely fashion.

(b) Changes in Internal Controls.There have been no changes in our internal
controls over financial reporting during the most recent fiscal quarter that
have materially affected, or are reasonably likely to materially affect, our
internal controls over financial reporting.

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PART II  Other Information




Item 5. Other Information

On
November 12, 2003, Great Lakes Dredge & Dock Corporation signed
a definitive agreement along with its current majority-owner, Vectura
Holding Company LLC, a portfolio company of Citigroup Venture Capital
Ltd., to sell the Company to an affiliate of Chicago-based private
equity investment firm, Madison Dearborn Partners, LLC, for
$340 million in cash. All financing necessary to complete the
transaction has been committed and the sale is currently targeted to
close by the end of 2003. A copy of the press release announcing the
signing of this agreement is filed as Exhibit 99.1 to this
Report.




Item 6. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits
|--- |  | --------



|3.01 |  | Restated Certificate of Incorporation, dated
November 6, 2003.*
|---- |  | ---------------------------------------------------------------



|31.1 |  | Certification Pursuant to Rules 13a-14 and 15d-14 under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



|31.2 |  | Certification Pursuant to Rules 13a-14 and 15d-14 under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



|32.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*
|---- |  | ------------------------------------------------------------------------------------------------------------------------



|32.2 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*
|---- |  | ------------------------------------------------------------------------------------------------------------------------



|99.1 |  | Press Release dated November 12, 2003.*
|---- |  | ---------------------------------------

*  Filed or furnished herein.



|(b) |  | Reports on Form 8-K
|--- |  | -------------------



| |  | A Current Report on Form 8-K filed on July 22, 2003 regarding a press
release announcing earnings information for the quarter ended June 30,
2003.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Great Lakes Dredge & Dock CorporationDate:  November 14,
2003
    
    By:
    
    /s/ Deborah A. WenselDeborah A. WenselSenior Vice President
and Chief Financial Officer(Principal Financial and Accounting Officer and
Duly Authorized Officer)


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EXHIBIT INDEX

Number
    
    Document Description30.1
    
    Restated Certificate of Incorporation, dated November 6, 2003.*31.1
    
    Certification Pursuant to Rules 13a-14 and 15d-14 under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*31.2
    
    Certification Pursuant to Rules 13a-14 and 15d-14 under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*99.1
    
    Press Release dated November 12, 2003.*


*  Filed or furnished herewith.

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