About Great Lakes Dredge & Dock

Great Lakes Dredge & Dock Corporation (Great Lakes) provides dredging services in the United States. The company is also fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The company operates on the East and Gulf coastlines and throughout many inland U.S. waterways. Great Lakes is a leader in the building and maintenance of the nation's navigation system, the protection of shore lines, the restoration of sensitive habitats, and the creation of critical aquatic infrastructure. Operations Domestically, the company’s work generally is performed in coastal waterways and deep water ports. The company is a leader in capital, coastal protection and maintenance dredging in the United States and is one of the oldest and most experienced dredging companies in the country. The company’s foreign projects are typically categorized in the capital work type, but are not included in the aforementioned bid market. Domestic Capital (32% of 2023 Revenues): Capital dredging primarily consists of port expansion projects, which involve the deepening of channels and berthing basins to allow access by larger, deeper draft ships and the provision of land fill used to expand port facilities. In addition to port work, capital projects include coastal restoration and land reclamations, trench digging for pipelines, tunnels and cables, and other dredging related to the construction of breakwaters, jetties, canals and other marine structures. Coastal Protection (33% of 2023 Revenues): Coastal protection projects generally involve moving sand from the ocean floor to shoreline locations where erosion threatens shoreline assets. Beach erosion is a continuous problem that has intensified with the rise in coastal development and has become an important issue for state and local governments concerned with protecting beachfront tourism and real estate. Coastal protection via beach nourishment is often viewed as a better response to erosion than trapping sand through the use of sea walls and jetties, or relocating buildings and other assets away from the shoreline. Maintenance (32% of 2023 Revenues): Maintenance dredging consists of the re-dredging of previously deepened waterways and harbors to remove silt, sand and other accumulated sediments. Due to natural sedimentation, most channels generally require maintenance dredging every one to three years, thus creating a recurring source of dredging work that is typically non-deferrable if optimal commercial navigability is to be maintained. In addition, severe weather, such as hurricanes, flooding and droughts can also cause the accumulation of sediments and drive the need for maintenance dredging. Rivers & Lakes (3% of 2023 Revenues): Domestic rivers and lakes dredging and related operations typically consist of lake and river dredging, inland levee and construction dredging, environmental restoration and habitat improvement and other marine construction projects. Although the Mississippi River has a large source of projects on which the company bids, certain dredges used on these projects are more portable and able to be transported to take advantage of the fragmented market. Foreign: Foreign capital projects typically involve land reclamations, channel deepening and port infrastructure development. The company targets foreign opportunities that are well suited to the company’s equipment. The company has performed dredging work in the Middle East, Africa, Australia, the Caribbean, and Central and South America. Offshore Wind Market While the company continues to reinvest in its core dredging business and renew the company’s dredging fleet, the company is strategically entering the nascent U.S. offshore wind market. Entering the U.S. offshore wind market offers the company the opportunity to diversify the company’s client base, enter a different market and grow the company’s bottom line, while also enhancing the company’s efforts towards sustainability and renewable energy. The company has already established a first mover advantage in scour protection installation for offshore wind foundations, cables, and offshore substations. The company is building the first Jones Act compliant rock installation vessel in the U.S. In December 2023, Great Lakes was awarded another rock installation contract to perform subsea rock cable protection, a new utilization for this vessel, on an offshore wind project off the East Coast of the United States. The company expects to continue to build its offshore wind capabilities, win rock installation projects and position for growth in the accelerating U.S. offshore wind market, as many of the company’s European competitors have done in the international offshore wind markets. Customers In 2023, approximately 75% of the company’s dredging revenues were generated from 39 different contracts with federal agencies or third parties operating under contracts with federal agencies. Bonding and Project Guarantees The company has bonding agreements with Argonaut Insurance Company, ACE Holdings, Liberty Mutual Insurance Company, and Philadelphia Indemnity Insurance Company (collectively, the ‘Sureties’) under which the company can obtain performance, bid and payment bonds. The company also has outstanding bonds with Travelers Casualty and Surety Company of America, Berkley Insurance Company, and Zurich American Insurance Company. Equipment Great Lakes’ fleet of dredges, material barges and other specialized equipment is the largest and most diverse in the U.S. The company operates three principal types of dredging equipment: hopper dredges, hydraulic dredges and mechanical dredges. Hopper Dredges: Hopper dredges are typically self-propelled and have the general appearance of an ocean-going vessel. The dredge has hollow hulls, or ‘hoppers,’ into which material is suctioned hydraulically through drag-arms. Once the hoppers are filled, the dredge sails to the designated disposal site and either (i) bottom dumps the material or (ii) pumps the material from the hoppers through a pipeline to a designated site. Hopper dredges can operate in rough waters, are less likely than other types of dredges to interfere with ship traffic, and can be relocated quickly from one project to another. Hopper dredges primarily work on coastal protection and maintenance projects. The company has recently taken delivery of a 6,500 cubic yard trailing suction hopper dredge, the Galveston Island, which began operations in February 2024. Additionally, in June 2022, the company exercised the contract option with the same builder to build a second 6,500 cubic yard trailing suction hopper dredge, the Amelia Island, with expected delivery in 2025. The addition of the new Galveston Island and Amelia Island hopper dredges will provide the company with added capacity and the opportunity to potentially retire older dredges. Hydraulic Dredges: Hydraulic dredges remove material using a revolving cutterhead which cuts and churns the sediment on the channel or ocean floor and hydraulically pumps the material by pipe to the disposal location. These dredges are very powerful and can dredge some types of rock. Certain dredged materials can be directly pumped for miles with the aid of multiple booster pumps. Hydraulic dredges work with an assortment of support equipment, which help with the positioning and movement of the dredge, handling of the pipelines and the placement of the dredged material. Unlike hopper dredges, relocating hydraulic dredges and all their ancillary equipment requires specialized vessels and additional time, and their operations can be impacted by ship traffic and rough waters. There is a wide range of hydraulic dredges from the company’s smaller rivers & lakes vessels that use pipe sizes ranging from 10’ to 22’ and operate at between 365 and 3,200 total horsepower, while the company’s other hydraulic dredges use pipe sizes ranging from 18’ to 30’ and operate at between 1,900 and 16,650 total horsepower. Mechanical Dredges: There are two basic types of mechanical dredges: clamshell and backhoe. In both types, the dredge uses a bucket to excavate material from the channel or ocean floor. The dredged material is placed by the bucket into material barges, or ‘scows,’ for transport to the designated disposal area. The scows are emptied by bottom-dumping, direct pump-out or removal by a crane with a bucket. The backhoe dredge is capable of removing hard-packed sediments, blasted rock and debris and can work in tight areas, such as along docks or terminals. Clamshell dredges with specialized buckets are ideally suited to handle softer silts and maintenance material requiring environmentally controlled excavation and disposal. Additionally, the company owns an electric clamshell dredge which provides an advantage in those markets with stringent emissions standards. During 2023, the company retired one mechanical dredge as part of its ongoing fleet modernization program. Scows: The company has the largest fleet of material barges in the domestic industry, which provides cost advantages when dredged material is required to be disposed far offshore or when material requires controlled disposal. The company uses scows with its hydraulic dredges and mechanical dredges. Scows are an efficient and cost-effective way to move material and increase dredging production. The company has thirteen scows in its fleet with a capacity ranging from 5,000 to 8,800 cubic yards. The company placed into service three new scows during 2022, each 8,800 cubic yards in size. During 2023, the company entered into a sale leaseback transaction for the three scows placed into service in 2022. Additionally in 2023, the company retired three scows as part of its ongoing fleet modernization program. Multi Cats: In 2023, the company took delivery of two Damen multifunctional all-purpose vessels (‘Multi Cats’), the Cape Hatteras and the Cape Canaveral in 2023. These vessels will greatly improve the safety and efficiency of pipe and anchor operations. The two vessels are the first Damen Multi Cats to be built in the U.S. and are fully compliant with the U.S. Coast Guard and the U.S. Army Corps of Engineers stability criteria. The company has numerous pieces of smaller equipment that support its dredging operations. Great Lakes’ domestic dredging fleet is typically positioned on the East and Gulf Coasts, with many of the rivers & lakes dredges on inland rivers and lakes. The mobility of the fleet enables the company to move equipment in response to changes in demand. The company continually assesses its need to upgrade and expand its dredging fleet to take advantage of improving technology and to address the changing needs of the dredging market, and retire older, less efficient dredges. The company is also committed to a reliability-assured maintenance program, which it believes is reflected in the long lives of most if its equipment and its low level of unscheduled downtime on jobs. To the extent that market conditions warrant the expenditures, Great Lakes can prolong the useful life of its vessels. Certification of equipment by the U.S. Coast Guard and establishment of the permissible loading capacity by the American Bureau of Shipping (‘A.B.S.’) are important factors in the company’s dredging business. Many projects, such as coastal protection projects with offshore sand borrow sites and dredging projects in exposed entrance channels or with offshore disposal areas, are restricted by federal regulations to be performed only by dredges or scows that have U.S. Coast Guard certification and a load line established by A.B.S. The certifications indicate that the dredge is structurally capable of operating in open waters. The company has more certified dredging vessels than any of its domestic competitors and makes substantial investments to maintain these certifications. Seasonality Seasonality generally does have a significant impact on the company’s operations. However, many East Coast coastal protection projects are limited by environmental windows that require work to be performed in winter months to protect wildlife habitats. In addition, rivers and lakes in the northern U.S. freeze during the winter, significantly reducing the company’s ability to operate and transport its equipment in the relevant geographies. Government Regulations The company is subject to government regulations pursuant to the Foreign Dredge Act of 1906; the Section 27 of the Merchant Marine Act of 1920; the Shipping Act, 1916 (the ‘Shipping Act’) and the vessel documentation laws set forth in Chapter 121 of Title 46 of the United States Code. History The company was founded in 1890. It was formerly known as Lydon & Drews Partnership and changed its name to Great Lakes Dredge & Dock Corporation in 1905.