Statement Under the Private Securities Litigation Reform Act

Certain statements in this Quarterly Report on Form 10-Q may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA") or in releases made by the Securities and Exchange Commission ("SEC"), all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Great Lakes Dredge & Dock Corporation and its subsidiaries ("Great Lakes"), or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words "plan," "believe," "expect," "anticipate," "intend," "estimate," "project," "may," "will," "would," "could," "should," "seeks," or "scheduled to," or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the "safe harbor" provisions of such laws. Great Lakes cautions investors that any forward-looking statements made by Great Lakes are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to Great Lakes, include, but are not limited to, risks and uncertainties that are described in Item 1A "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2008, the Company's Quarterly Reports on Form 10-Q for the periods ended March 31, 2009 and June 30, 2009 and in other securities filings by Great Lakes with the SEC.

Although the Company believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results could differ materially from a projection or assumption in any forward-looking statements. The Company's future financial condition, results of operations and cash flows, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in the Company's Quarterly Report on Form 10-Q are made only as of the date hereof and the Company does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.

General

The Company is the largest provider of dredging services in the United States. In addition, the Company is the only U.S. dredging service provider with significant international operations, which represented approximately 27% of its dredging revenues for the first nine months of 2009 which is slightly below the Company's prior three year average of 30%. The mobility of the Company's fleet enables the Company to move equipment in response to changes in demand for dredging services.

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, beach nourishment and maintenance, in which sectors we have experienced an average combined bid market share in the U.S. of 42% over the last three years, including 47%, 44% and 36% of the capital, beach nourishment and maintenance sectors, respectively. The Company's bid market is defined as the aggregate dollar value of domestic projects on which the Company bid or could have bid if not for capacity constraints ("bid market").

The Company's largest domestic dredging customer is the Army Corps of Engineers (the "Corps"), which has responsibility for federally funded projects related to navigation and flood control of U.S. waterways. The Company's dredging revenues for the nine months ended September 30, 2009 earned from contracts with federal government agencies, including the Corps as well as other federal entities such as the U.S. Coast Guard and the U.S. Navy, were approximately 55% as compared with the Company's three year average of 47%.

The Company also owns a majority interest in NASDI, LLC ("NASDI"), a demolition service provider located in the Boston, Massachusetts area. Demolition revenues accounted for 8.3% of total revenues for the first nine months of 2009, compared with the prior three year average of 14.8%. 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. The majority of NASDI's work has historically been performed in the New England area; however, NASDI is currently expanding into New York and other New England states. In January 2009, the Company acquired a 65% interest in Yankee Environmental Services LLC ("Yankee"), a provider of environmental remediation services including asbestos abatement and removal of other hazardous materials for private and governmental entities. Prior to this acquisition, Yankee served as a subcontractor on many NASDI projects.

The Company has a 50% ownership interest in Amboy Aggregates ("Amboy"). Amboy's primary business is mining sand from the entrance channel to the New York harbor in order to provide sand and aggregate for use in road and building construction. The Company and its Amboy joint venture partner own a 50% interest in land that is adjacent to Amboy's property and may be used in conjunction with Amboy's operations. The Company's investment in Amboy is accounted for using the equity method.

In August, the Company completed an underwritten secondary offering of approximately 12.5 million shares of its common stock owned primarily by Madison Dearborn Capital Partners IV, L.P. All proceeds of this offering were received by the selling shareholders, not by the Company. This transaction has increased the trading liquidity for the Company's common stock and expanded its shareholder base.

The Company operates in two reportable segments: dredging and demolition.

Results of Operations

The following table sets forth the components of net income (loss) attributable to Great Lakes Dredge & Dock Corporation and EBITDA, as defined below, as a percentage of contract revenues for the three and nine months ended September 30, 2009 and 2008:

                                         Three Months Ended       Nine Months Ended
                                           September 30,            September 30,
                                         2009         2008         2009        2008

Contract revenues                          100.0 %      100.0 %     100.0 %     100.0 %
Costs of contract revenues                 (87.8 )      (87.7 )     (84.3 )     (87.9 )
Gross profit                                12.2         12.3        15.7        12.1
General and administrative expenses         (8.4 )       (7.7 )      (7.3 )      (7.6 )
Amortization of intangible assets           (0.1 )       (0.1 )      (0.1 )      (0.1 )
Operating income                             3.7          4.5         8.3         4.4
Interest expense, net                       (2.3 )       (3.0 )      (2.7 )      (3.0 )
Equity in earnings (loss) of joint
ventures                                     0.1            -        (0.1 )       0.1
Income before income taxes                   1.5          1.5         5.5         1.5
Income tax provision                        (0.6 )       (0.6 )      (2.3 )      (0.6 )
Net income                                   0.9          0.9         3.2         0.9
Net income (loss) attributable to
noncontrolling interests                     0.4            -         0.3        (0.1 )
Net income attributable to Great
Lakes Dredge & Dock Corporation              1.3 %        0.9 %       3.5 %       0.8 %

EBITDA                                       9.2 %       10.2 %      13.9 %       9.4 %

EBITDA, as provided herein, represents net income (loss) attributable to Great Lakes Dredge & Dock Corporation, adjusted for net interest expense, income taxes, depreciation and amortization expense. The Company presents EBITDA as an additional measure by which to evaluate the Company's operating trends. The Company believes that EBITDA is a measure frequently used to evaluate performance of companies with substantial leverage and that all of its primary stakeholders (i.e. its bondholders, banks and investors) use EBITDA to evaluate the Company's period to period performance. Additionally, management believes that EBITDA provides a transparent measure of the Company's recurring operating performance and allows management to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance. For this reason, the Company uses a measure based upon EBITDA to assess performance for purposes of determining compensation under its incentive plan. EBITDA should not be considered an alternative to, or more meaningful than, amounts determined in accordance with accounting principles generally accepted in the United States of America ("GAAP") including: (a) operating income as an indicator of operating performance; or (b) cash flows from operations as a measure of liquidity. As such, the Company's use of EBITDA, instead of a GAAP measure, has limitations as an analytical tool, including the inability to determine profitability or liquidity due to the exclusion of interest expense and the associated significant cash requirements and the exclusion of depreciation and amortization, which represent significant and unavoidable operating costs given the level of indebtedness and capital expenditures needed to maintain the Company's business. For these reasons, the Company uses operating income to measure its operating performance and uses EBITDA only as a supplement. EBITDA is reconciled to net income attributable to Great Lakes Dredge & Dock Corporation in the table of financial results as follows:

                                Three Months Ended                Nine Months Ended
                                   September 30,                    September 30,
                             2009       2008     Change       2009       2008     Change

Net income attributable
to Great Lakes Dredge &
Dock Corporation           $  1,695   $  1,401      21.0 %  $ 16,440   $  3,151     421.7 %
 Adjusted for:
Interest expense, net         3,242      4,301     (24.6 )%   12,240     12,853      (4.8 )%
Income tax expense              885        827       7.0 %    10,687      2,530     322.4 %
Depreciation and
amortization                  7,106      8,042     (11.6 )%   24,588     21,256      15.7 %
EBITDA                     $ 12,928   $ 14,571     (11.3 )% $ 63,955   $ 39,790      60.7 %

The following table sets forth, by segment and dredging type of work, the Company's contract revenues for each of the periods indicated:

                                Three Months Ended                Nine Months Ended
                                  September 30,                     September 30,
Revenues (in thousands)     2009        2008      Change      2009        2008      Change
Dredging:
Capital - U.S.            $  43,660   $  37,313       17 %  $ 135,858   $ 113,593       20 %
Capital - foreign            25,264      50,837      (50 )%   115,040     118,959       (3 )%
Beach                        23,152       7,045      229 %     46,298      34,186       35 %
Maintenance                  36,299      28,621       27 %    126,002      67,777       86 %
Demolition                   11,654      18,993      (39 )%    38,489      89,337      (57 )%
                          $ 140,029   $ 142,809       (2 )% $ 461,687   $ 423,852        9 %

Total revenue for the quarter ended September 30, 2009 was $140.0 million, down slightly from revenue of $142.8 million for the third quarter of 2008. Dredging revenue of $128.4 million increased nearly $4.6 million, or 4% from a year ago as strong domestic operations more than offset a significant decline in foreign work. The demolition business continues to be negatively impacted by the economic recession and the resulting slowdown in construction activity which resulted in reduced demolition revenue of $11.7 million versus $19.0 million a year ago, a decrease of $7.3 million or 38.6%. Total revenues for the nine-month period ended September 30, 2009 increased by 9% to $461.7 million compared with $423.9 million for the same 2008 period, primarily as a result of increased domestic dredging activity more than offsetting decreased foreign dredging and demolition activity.

Capital projects include large port deepenings and other infrastructure projects including land reclamations. Domestic capital dredging revenue increased $6.3 million, or 17%, and $22.3 million, or 20%, in the 2009 third quarter and first nine months, respectively, compared to the same 2008 periods. Domestic capital revenue in the quarter and year to date was primarily generated by projects in the Ports of New York, New Jersey, Tampa and Jacksonville and coastal restoration in Louisiana. Foreign revenue decreased $25.6 million and $3.9 million, or 50% and 3%, in the 2009 third quarter and first nine months, respectively, compared to the same 2008 periods. As expected, foreign revenue decreased in the quarter as work slowed on foreign contracts in backlog and potential projects continued to be delayed. Foreign revenue was driven by continued work in Bahrain on the Diyar land reclamation project.

Beach nourishment projects include rebuilding of shoreline areas that have been damaged by storm activity or ongoing erosion. Beach revenue in the 2009 third quarter increased $16.1 million, compared to the same 2008 quarter. Year to date revenue of $46.3 million increased $12.1 million compared to the first nine months of 2008. Beach work rebounded in the third quarter as numerous beach projects that had been hindered by permitting and funding issues were finally bid.

Maintenance projects include routine dredging of ports, rivers and channels to remove the regular build up of sediment. Maintenance revenue in the three and nine months ended September 30, 2009 increased $7.7 million and $58.2 million, respectively, compared to the same periods of 2008. The 2009 year to date maintenance market of $483 million is approximately $200 million greater than the previous five year average for that market and is translating into record maintenance revenue for the Company. This is largely the result of a backlog of maintenance projects being put out to bid as well as additional funding coming from the American Recovery and Reinvestment Act. A number of maintenance projects contributed to this quarter's revenue, including maintenance dredging in Oregon and the Gulf of Mexico.

Gross profit for the 2009 third quarter declined $0.5 million , or 2.9%, to $17.1 million from $17.6 million a year earlier. Gross profit margin (gross profit divided by revenues) for the 2009 third quarter was 12.2% and while comparable to that of the prior year, was down from 17.3% gross profit margin achieved in the first half of 2009. Fleet utilization was down during the quarter due to the mobilization of the dredges Texas and California from the Middle East as well as three other dredges that were in required dry-dock service for a significant portion of the quarter. In addition, costs for mobilization of the dredge California combined with the expected project cost, will not be fully covered by revenue from the first two projects booked to this vessel. As a result approximately $3.0 million of additional expense was recognized in the 2009 third quarter which lowered gross profit margin by 2%. The demolition unit's gross profit was negatively impacted as the demolition unit had lower revenue to cover fixed costs. Gross profit margin for the nine months ended September 30, 2009 increased to 15.7% from 12.1% a year earlier largely due to favorable dredge fleet utilization during the first six months of 2009. As evidenced by the variability in the Company's revenues and gross profit margins in each of the 2009 quarters, both the level of fleet utilization (or days the dredges worked) and the mix of specific projects on which our dredges perform have a significant impact on the Company's quarterly results.

The Company's general and administrative (G&A) expenses totaled $11.8 million and $33.7 million for the three and nine months ended September 30, 2009, respectively, an increase of $0.8 million and $1.4 million from the same periods in 2008. The increase in G&A expense in the third quarter was primarily driven by $0.6 million of expenses related to the secondary stock offering. The year to date increase was also driven by the secondary expenses and legal expenses related to a contract claim for additional revenue on a project.

Operating income for the, 2009 third quarter decreased by 20.9%, to $5.1 million from the prior year, but increased 107% to $38.3 million for 2009 year to date. Although the third quarter results were adversely impacted by mobilizations and dry dockings as discussed above, the strong performance of the first six months and relatively constant G&A expenses helped strengthen gross profit year to date.

Interest expense, net was $3.2 million and $12.2 million for the three and nine months ended September 30, 2009, down $1.1 million and $0.7 million from same 2008 periods primarily as a result of lower interest rates.

Income tax expense for the three and nine months ended September 30, 2009 was $0.9 million and $10.7 million, respectively, compared to $0.8 and $2.5 million for the same 2008 periods, increasing primarily as a result of the higher earnings the Company generated in 2009. The effective tax rate for the nine months ended September 30, 2009 was 39.4%, down from 42.7% at September 30, 2008. The effective tax rate was lower due to the reorganization of NASDI in 2008 as well as a decrease in the effective state income tax rate due to the decline in income in the demolition segment as well as the location of dredging projects during the period.

Net income attributable to Great Lakes Dredge & Dock Corporation of $1.7 million and earnings per diluted share of $0.03 for the 2009 third quarter compared to $1.4 million and $0.02 for the same 2008 period. Net income attributable to Great Lakes Dredge & Dock Corporation and earnings per diluted share for 2009 year to date was $16.4 million and $0.28 respectively, compared to $3.2 million and $0.05 for the same 2008 period.

EBITDA (as defined on page 24) was $12.9 million and $64.0 million for the three and nine months ended September 30, 2009, respectively, compared with $14.6 million and $39.8 million in the same 2008 periods. The increase in year to date EBITDA between the two periods was due to the strong operating performance in the Company's dredging segment.

Results by segment

Dredging

Dredging revenues for the three and nine months ended September 30, 2009 were $128.4 million and $423.2 million, respectively compared to $123.8 million and $334.5 million for the same periods of 2008. Dredging revenues for the nine months ended September 30, 2009 were driven by high utilization on domestic capital and maintenance projects throughout the year and foreign work during the first six months. The dredging segment generated operating income of $6.6 million and $42.4 million for the three and nine months ended September 30, 2009, respectively, compared to operating income of $6.6 million and $13.6 million for the same periods of 2008. 2009 year to date results were driven by high utilization as previously noted and strong margins on domestic projects. In addition, the first three quarters of 2008 were negatively impacted by the temporary loss of the dredge New York after it was struck by another vessel.

Demolition

Demolition revenues for the three months and nine months ended September 30, 2009 totaled $11.7 million and $38.5 million, respectively compared to $19.0 million and $89.3 million for the same 2008 periods. Revenue decreased period over period as activity in the demolition segment has been negatively affected by the economic recession and the resulting slowdown in the construction market. In addition, in the first half of 2008, NASDI worked on several unique, large dollar value projects that contributed to the high revenue in 2008, including one project that contributed $22.4 million of revenue in the first nine months of 2008. Margins have been negatively impacted by the decreased activity as well as contract losses related to a large development project in downtown Boston that has been delayed due to the economic downturn. The demolition segment generated an operating loss of $1.5 million and $4.1 million for the three and nine months ended September 30, 2009, respectively compared to an operating loss of $0.1 million and operating income of $4.9 million for the same periods of 2008.

Bidding Activity and Backlog



The following table sets forth, by segment and dredging type of work, the
Company's backlog as of the dates indicated:



                          September 30,     September 30,     December 31,
Backlog (in thousands)        2009              2008              2008
Dredging:
Capital - U.S.           $       211,392   $       186,523   $      176,051
Capital - foreign                 58,158           154,940 *        139,479 *
Beach                             36,986            23,592           18,934
Maintenance                       94,925            31,270           26,726
Demolition                        18,645            19,036           23,501
                         $       420,106   $       415,361   $      384,691

(* Foreign backlog has been adjusted for the portion of the Diyar contract that became an option pending award in the first quarter of 2009)

Dredging contract backlog represents the Company's estimate of the revenues that will be realized under the portion of the contracts remaining to be performed based upon estimates relating to, among other things, the time required to mobilize the necessary assets to and from the project site, as well as the amount and type of material to be dredged. However, these estimates are necessarily subject to fluctuations based upon the amount and type of material that actually must be dredged. Because of these factors, as well as factors affecting the time required to complete each job, backlog is not necessarily indicative of future revenues or profitability. In addition, a significant amount of the Company's dredging backlog relates to federal government contracts, which can be canceled at any time without penalty, subject to the Company's right, generally, to recover the actual committed costs and profit on work performed up to the date of cancellation. Also, the Company's backlog may fluctuate significantly from quarter to quarter based on the type and size of the projects we are awarded from the bid market. A quarterly increase or decrease in the Company's backlog does not necessarily result in an improvement

or a deterioration of the Company's business. The Company's backlog includes only those projects for which the Company has obtained a signed contract with the customer.

Funding from the American Recovery and Reinvestment Act continued to stimulate bidding in the third quarter. In addition, a number of beach projects that did not receive stimulus funding, were bid during the quarter after a relatively slow first half of 2009. The beach projects accounted for 32% of the third quarter domestic bid market of $325 million. The year to date 2009 domestic bid market reached $845 million, exceeding the size of any full year bid market since 2002. As the domestic bid market has improved the Company has captured a 50% share, which is higher than our prior three year average of 42%.

The Company's contracted dredging backlog as of September 30, 2009 was $401 million, compared with $396 million at September 30, 2008. The 2008 backlog number has been adjusted for the portion of the Diyar contract that became an option pending award in the first quarter of 2009. While total backlog has remained constant compared with September 2008; domestic backlog has grown by over 40%, primarily driven by maintenance and beach work, which offset a reduction in foreign backlog. The September 30, 2009 dredging backlog does not reflect approximately $83 million of domestic low bids pending award, additional phases ("options") pending on projects currently in backlog and the remaining option on the Diyar contract. The September 30, 2008 dredging backlog does not reflect approximately $132 million of domestic low bids pending award and options pending on projects currently in backlog.

Demolition services backlog at September 30, 2009 was $18.6 million, compared with $19.0 million at September 30, 2008.

Market Outlook

United States. The Company currently expects work funded under the American Recovery and Reinvestment Act to be let to bid through October 2010 and continues to believe that approximately $350 to $400 million will be spent on dredging projects, primarily maintenance work, under this stimulus plan. Much of the maintenance work coming out now is due to a lack of focus on maintenance projects over the last several years. The critical need for these maintenance projects to be completed is helping garner support for the Harbor Maintenance Trust Fund (HMTF) initiative. It currently appears that a new Water Resources Development Act bill (WRDA) will be introduced by the end of 2009 and the HMTF legislation will be included within this WRDA bill.

The Panama Canal Expansion continues to move forward. While the Company did not win the most recent dredging project that was bid, the need to deepen U.S. ports will become more important over the next several years as deeper draft cargo ships are being built. This is evidenced by the $350 million deepening project in the Delaware River, the first phase of which was bid earlier this year, and the $600 million deepening project that is planned in Jacksonville, Florida. Both are being planned in anticipation of the need to accommodate these deeper draft vessels. Near term domestic capital projects include another section of the New York harbor, work for the U.S. Navy in Norfolk, and other deepening work along the East Coast. An additional funding source, the Coastal Impact Assistance program, is still on track to add dollars to the dredging market in the Gulf of Mexico coastal area during next few years. This program has . . .