1372020--3/9/2010--Great_Lakes_Dredge_&_Dock

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We depend on our ability to continue to obtain federal government dredging contracts, and are therefore greatly impacted by the amount of government funding for dredging projects. A reduction in government funding for dredging contracts can materially reduce our revenues and profits. Our profitability is subject to inherent risks because of the fixed-price nature of most of our contracts. Our quarterly operating results may vary significantly. Our use of the percentage-of-completion method of accounting could result in a reduction or reversal of previously recorded revenue and profit. We are subject to risks related to our international dredging operations. The work currently performed internationally is primarily with one customer. The amount of our estimated backlog is subject to change and not necessarily indicative of future revenues. If we fail to comply with government contracting regulations, our revenue could suffer. We have a significant amount of indebtedness, which makes us more vulnerable to adverse economic and competitive conditions. Our business is subject to significant operating risks and hazards that could result in damage or destruction to persons or property, which could result in losses or liabilities to us. If we are unable, in the future, to obtain bonding or letters of credit for our dredging contracts, our ability to obtain future dredging contracts will be limited, thereby adversely affecting our business. Our business would be adversely affected if we failed to comply with the Jones Act provisions on coastwise trade, or if those provisions were modified or repealed. Capital expenditures and other costs necessary to operate and maintain our vessels tend to increase with the age of the vessel and may also increase due to changes in governmental regulations, safety or other equipment standards. Environmental regulations could force us to incur significant capital and operational costs. We may be affected by market or regulatory responses to climate change. Our business could suffer in the event of a work stoppage by our unionized labor force. Our employees are covered by federal laws that may provide seagoing employees remedies for job-related claims in addition to those provided by state laws. Our current insurance coverage may not be adequate, and we may not be able to obtain insurance at acceptable rates, or at all. Our demolition business depends on key customer relationships and our reputation in the Boston construction market, both of which have been developed and maintained by one individual. Loss of any of these elements would materially reduce our demolition revenues and profits. Our common stock is subject to restrictions on foreign ownership. Delaware law and our charter documents may impede or discourage a takeover that you may consider favorable. Our stockholders may not receive dividends because of restrictions in our debt agreements, Delaware law and state regulatory requirements. The market price of our common stock may fluctuate significantly, and this may make it difficult for holders to resell our common stock when they want or at prices that they find attractive. Future issuances of our common stock will dilute the ownership interests of stockholders and may adversely affect the trading price of our common stock. Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs, access to capital and cost of capital. The current weakness in the economic environment and other factors could lead to our goodwill and other intangible assets becoming impaired, which may require us to take significant non-cash charges against earnings.

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1372020--3/9/2010--Great_Lakes_Dredge_&_Dock_CORP