Good day, and thank you for standing by. Welcome to the Q2 2022 Great Lakes Dredge & Dock Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tina Baginskis, Director, Investor Relations and Financial Planning. Please go ahead. Good morning, and welcome to our Q2 conference call. Joining me on the call this morning is our President and Chief Executive Officer, Lasse Petterson, and our Chief Financial Officer, Scott Kornblau. Lasse will provide an update on the events of the quarter, then Scott will continue with an update on our financial results for the quarter. Lasse will conclude with an update on the outlook for the business and market. Following their comments, there will be an opportunity for questions. During this call, we will make certain forward-looking statements to help you understand our business. These statements involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations. Certain risk factors inherent in our business are set forth in our earnings release and in filings with the SEC, including our 2021 Form 10-K and subsequent filings. During this call, we also refer to certain non-GAAP financial measures, including adjusted EBITDA, which are explained in the net income to adjusted EBITDA reconciliation attached to our earnings release and posted on our investor relations website, along with certain other operating data. With that, I will turn the call over to Lasse. Thank you, Tina. As stated in our earnings release, our Q2 results did not meet expectations as we navigated challenging environments driven by external factors, including supply chain delays, inflationary pressures, and adverse weather conditions, combined with some atypical dredging project challenges. During the quarter, we had three projects encountering differing and unanticipated site conditions, which negatively impacted production and in turn, margins. We are now working to resolve the cost impacts through contractual discussions with our customers. However, revenue and profit recognition is delayed until these discussions are agreed upon and finalized. We also had several projects impacted by unseasonably rough sea conditions along the East Coast. These weather events caused several vessels to stop operating and seek shelter, which extended completion timelines and delayed scheduled commencement to work on subsequent projects. Our project estimates include weather event days based upon historic weather records. Unfortunately, weather patterns seem to be changing, and we will, on future projects, adjust the estimates to include more frequent severe weather. Although these severe weather events cause short-term impacts to our projects, they also cause an increase in beach and barrier island erosion and sedimentation of shipping channels and ports that in turn need to be renourished and maintained in the following years, which add to the recurring nature of our business. During the quarter, we saw inflation impact labor, operating supply costs, and the cost of dry dockings. Moreover, supply chain issues extended the duration of dry dockings and delayed mobilization on several projects. The high-earning hopper dredge, Liberty Island, had her dry dock extended by several weeks as installation of her new system for automation and dredge process systems were delayed. The delivery of the Carolina's new emission reduction equipment was delivered late, which delayed her mobilization by about a month to the Houston Ship Channel project, where she eventually started work in Q3 in July. These extended idle periods increased the cost of her dry docking. However, the follow impact on the delayed start and scheduled completion of their assigned projects had a major impact on our Q2 results. Bidding for projects for the quarter was unusually slow in Q1 and for the first two months of Q2, resulting in delayed bidding for beach and maintenance projects that we have historically seen in the Q2 for execution in the current year. Since these bids for new dredge projects did not materialize as early as in previous years, two dredges were idle for part of the Q2. Bidding is now picking up in Q3, and we expect the full year's bid market for the U.S. Army Corps of Engineers to be as strong as 2021. In addition, the bid market for private and state and local clients will this year be substantial, with the bids for Port of Houston Project 11, phase II, and potentially phase III, and the potential notice to proceed on one or more of the pending LNG projects. As we enter Q3, we are focused on ensuring that new projects start up and are executed on schedule, as well as mitigating and resolving the contractual issues from the events in the H1 of the year. However, we do not anticipate meeting a full year's expectation as the effect of the H1 year events is not expected to be fully recovered in the H2 of the year. In spite of the short-term challenges, the outlook for Great Lakes remains strong. We continue to see increased market demand from the U.S. Army Corps of Engineers, backed by strong government support that we expect will benefit Great Lakes and our market position in the coming years. The energy situation in Europe is driving the LNG exports facilities here in the US towards final FID, which we expect to add to our markets in 2023 and 2024. Our new build program is on schedule with a new hopper dredge, the Galveston Island, which is expected to be ready for operation in the H1 of 2023. In addition, in June, we announced the exercise of the option to build the Galveston Island sister ship, which will be ready for operation in 2025. After decommissioning several older strategies in 2017, we have invested in productivity upgrades to our best-performing vessels. Throughout our fleet renewal program, we are installing newer and more efficient Tier 4 engines that will help conserve fuel and reduce emissions. Our fleet is already using low sulfur fuel, and all our hydraulic systems are now using a biodegradable product to avoid environmental impacts from minor spills. We believe our ongoing fleet renewal program will position us well to meet the current and future market demands. Turning to our offshore wind initiative, it is gaining momentum with the formal signing of the Empire Wind rock installation contract for Equinor this past month. We are now in discussions with several other developers for projects commencing in 2025 and are very optimistic to have a full work schedule for the vessel as she starts operation in 2025. I now turn the call over to Scott to further discuss the results of the quarter and the year, and then I'll provide further commentary around the market and our business. Thanks, Lasse, and good morning, everyone. Let me start by walking through our Q2 results in which revenues were $149.4 million, net loss was $4 million, and adjusted EBITDA was $10.2 million. Contract revenues of $149.4 million for the Q2 of 2022 decreased $20.5 million or 12.1% from the prior year's Q2. The lower revenue in the Q2 of 2022 was primarily due to lower maintenance dredging revenue, partially offset by higher domestic capital project revenue. Q2 2022 revenue came in about 15% below the guidance given on the last earnings call due to a number of the reasons Lasse previously mentioned. The extended dry dockings of the Liberty Island and Carolina caused each dredge to operate about one month less than anticipated for the quarter. Additionally, like last quarter, the Q2 saw an unusually large amount of weather impacts. For context, the number of weather days we experienced in the Q2 of 2022 was over three times the number of days we saw in the same quarter of 2021. Finally, we had production issues on a handful of projects, most relating to differing and unusual site conditions. There's a process we go through with our clients to resolve the impact these adverse conditions have on our projects. However, we don't record any potential benefit until we get closer to finalizing discussions, which can often lag multiple quarters after the initial differing site condition assessment. Current quarter gross profit of $10.5 million decreased $12.4 million from the Q2 of 2021. Gross profit margin this quarter was 7% compared to 13.5% in the prior year quarter and was lower than the guidance given on the last call, driven by the weather and production impacts that affected revenue. In addition, the extended dry dockings of the Liberty Island and Carolina came at increased costs, and we saw inflation impacting most of our operating costs. While we will properly account for the increased inflation in ongoing and future bids, most of the projects we are currently working were bid prior to the large increases in costs contributing to the drag on margins. Fortunately, we mitigated the inflation impact of fuel, which represents a large portion of our operating costs as we hedge most of our estimated fuel usage at the time of contract award. Operating loss for the current quarter of $0.3 million decreased $9.1 million from the prior year quarter, primarily due to lower gross profit margin, partially offset by lower general and administrative expenses compared to the prior year's Q2. Q2 2022 G&A of $10.8 million decreased $3.4 million from the prior year's Q2, primarily due to lower incentive expense and lower Houston relocation costs. Q2 G&A was also lower than prior quarter guidance, primarily due to a one-time non-recurring adjustment, lower than expected incentive expense, and a continued focus on cost savings. Net interest expense of $3.4 million for the Q2 of 2022 came in at guidance and was down from $6.7 million in the Q2 of 2021, primarily due to the lower interest rate on the senior notes, which were refinanced in the Q2 of 2021, and additional capitalized interest for the new builds. Q2 2022 income tax benefit of $0.9 million compared to income tax expense of $0.8 million from the same quarter of 2021 was driven by the lower current quarter income. Rounding out the P&L net loss for the Q2 of 2022 was $4 million, down from $2.1 million of net income in the prior year quarter. Next, we turn to our balance sheet, where we ended the Q2 of 2022 with $75.4 million in cash and no debt maturities until 2029. Our undrawn revolver was recently upsized to $300 million, and the maturity was extended until July 2027, providing us additional liquidity to support our new build program. Q2 2022 capital expenditures were $39.2 million, which includes $11.7 million for our new scows and multi cats, $9 million for the Galveston Island new build, $6.1 million for emission upgrades to the Carolina and the Booster Buster, $4.4 million for upgrades to the Liberty Island, $2.8 million for the sub-sea rock installation vessel, and $5.2 million in maintenance CapEx. After announcing the build of our second new hopper dredge earlier in the Q2, revised full year CapEx is expected to be $180 million, but can fluctuate greatly up or down based on timing of progress payments. I'll conclude with some commentary on the Q3 and H2 of 2022. We expect Q3 revenues to be between $160 million and $170 million. The projected increase from the Q2 is driven by both the Liberty Island and the Carolina working the majority of the Q3 compared to being in dry dock the majority of the Q2. In addition, one of the dredges that was idle most of the Q2 is expected to work the majority of the Q3. Partially offsetting the projected increase, the New York is expected to be idle for most of the Q3 after entering dry dock in June. Also, the Texas is currently undergoing maintenance and repairs that are expected to be completed by mid Q3, and the Padre Island and Ellis Island are scheduled to begin their dry dockings towards the end of the Q3. We expect Q3 gross profit margins to be in the lower teens, with some remaining drag from the H1 year weather and production impacts. Q3 G&A expense is expected to increase a few million dollars from the Q2, mostly due to the non-recurrence of the one-time Q2 adjustment previously mentioned and the gradual ramp up of the offshore wind team. Finally, net interest expense should continue to slightly decrease each quarter throughout the year as more interest is capitalized as the new builds progress. As Lasse mentioned, we expect the H2 of 2022 to be much better than the H1. While I'm not ready to give specific Q4 guidance, the Q4 of 2022 is shaping up to be on par, if not higher, than our solid Q1 results, which will provide momentum going into what appears to be a strong 2023. With that, I'll turn the call back over to Lasse for his remarks on the outlook moving forward. Thank you, Scott. Before I discuss the market, I'd like to take a moment and announce and discuss the announcements that we recently made with the changes in our operations group. We have announced that our Chief Operating Officer, Dave Simonelli, after having 44 years of service in the company, has decided to retire. Dave worked on both domestic and international projects for us and have extensive experience. With Dave's retirement, I decided to adjust our organization, and I'm pleased to announce the appointments of David Johansen to the position of Senior Vice President of Project Acquisition and Operations, and of Chris Kunsten to the position of Senior Vice President, Project Services and Fleet Engineering. Both David and Chris have more than 30 years of dredging experience, and they will both report directly to me. We thank Dave for his many years of service, and Dave Simonelli will continue to work with us as a senior advisor, taking on special projects as we see needed. In 2021, the domestic market reached $1.8 billion in projects bid. We expect that the 2022 bid market will be as strong as 2021, however, occurring somewhat later in the year, as mentioned earlier. We ended the quarter with a backlog of $373.8 million and $540.9 million in low bids and options pending award, which compares to last year's Q2 of $454 million in backlog and $508 million in low bids and options pending award. As you know, in the late Q2, the Port of Houston bid out the second phase of the Houston Ship Channel, a widening project. At the end of 2021, Great Lakes won the first phase, but we were not successful on the second phase. The work in Houston has its challenges, and we bid the risks accordingly. There are several projects that are going to be active going forward, which includes the LNG projects that we have in our backlog as low bids and options pending awards. In addition, we have seen bid activities increase substantially in the third quarter, and we expect to see bids for multiple new phases on port deepening projects in Norfolk, Freeport, Mobile, Sabine, and additional projects of the Houston Ship Channel Project 11. As I mentioned, bidding has picked up in Q3 and post-quarter close in July, we were low bidder on $184 million of work, which represents 74% of the July bid market. Included in our low bid pending awards are two LNG projects that are still pending the notice to proceed by the clients. Europe is currently reevaluating their sourcing of energy after the Russian invasion of Ukraine, which will require imports of large quantities of LNG. Both these projects are gaining momentum and based on the client's schedules for FID, dredging works should start in 2023. We continue to see strong support from Congress for infrastructure investments and for the dredging industry. On July 28, the Senate passed a version of the Water Resources Development Act of 2022, or WRDA, as we call it, which includes legislation that authorizes about $25 billion to help finance 20 new and modified U.S. Army Corps of Engineers projects for flood and hurricane protection, dredging, ecosystem restoration, and other construction projects. Since the House passed their version also recently, the legislation is expected to be conferenced and signed into law by President Biden in short order. This is the earliest passage of this WRDA legislation in recent history. As of June 28, both the Senate and House passed their respective fiscal year Corps of Engineers budget proposals for 2023. The Senate proposal was $8.7 billion, and the House proposal was $8.9 billion. Prior to sending to President Biden for his signature, the House and Senate will meet to agree on a final amount, which will likely be another record budget for the Corps. This increased budget and the funding from the administration's infrastructure bill support our expectation for a strong market entering into 2023. In March 2021, the White House announced new initiatives will advance the administration's goal to expand the nation's offshore wind energy capacity in the coming decade by opening new areas of development and increase public financing for projects. As part of the initiative, the Department of the Interior, Energy and Commerce committed to a shared goal of installing 30 gigawatts of offshore wind power generation capacity in the U.S. waters by 2030. In January 2022, the Biden administration announced plans to auction more than 480,000 acres in the New York Bight for six new offshore wind energy leases, the administration's first wind sale and the largest lease area ever offered, with potentially build-out capacity of up to 7 GW. We continue to maintain a strong focus on our future, and our recently announced offshore wind award by Equinor MVP solidifies Great Lakes entry into the U.S. offshore wind market with a major project award for a sub-sea rock installation vessel currently being built for delivery late 2024. The renewable power generated by the two wind farms will power more than 1 million households in New York. The project team will be mobilized to start working this year with the installation of the rock and scale protection starting in 2025. Great Lakes will, through this, be generating local content, employment, and economic activities in the state of New York by purchasing rock from domestic New York quarries and using the marine logistic base in Staten Island for its operations. In parallel to the vessel build and the new contract, we are bidding for a multitude of offshore wind farm projects with rock installations planned for 2025 and beyond. Major wind farm developers like Equinor, Dominion, Ørsted, Avangrid, and US Wind have already issued RFQs, and they are in the process of selecting suppliers for the wind farm developments. As the offshore wind industry is developing here in the United States, the global offshore wind market are forecasted to be booming with more than 200 gigawatts of offshore wind generation capacity expected to be installed globally over the next 10 years. We expect this will keep the large international contractors involved in offshore wind very busy for the next years, keeping vessel and equipment demand high. We have good opportunities ahead to add new projects to our backlog, providing solid activity for our vessel from 2025 and onwards. In conclusion, although we are faced with a challenging Q2, as we are addressing, mitigating, and seeking contractual resolution to the issues encountered, we remain confident in the decisions we have made and the strategic initiatives we have implemented to enhance our fleet and grow our business. With that, I turn the call over for questions. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question will come from Joe Gomes with Noble Capital Markets. Your line is now open. Thank you. Good morning. Thanks for taking the questions. Hey, good morning, Joe. The first one I kind of wanted to throw out there is maybe we can get a little more color or detail on the projects that you were encountering difficulty in. You know, you mentioned in the release and are negotiating with the clients. What kind of size or revenue impact in the quarter did that have, if you can? Also, you know, are you through the difficulty, or is it, you know, something that's also impacting the Q3? You know, just any more additional color there would be appreciated. Yeah. Joe, this is Scott. The three projects that we mentioned, we've identified the site conditions being deteriorated in the Q2. The way the accounting works is we need to take a catch-up hit to get to the percent complete at that point, we'll have a bigger impact in the Q2, but we will have to take that remaining drag until the project is estimated to complete, unless we're able to resolve the dispute prior to the end of the project. It will continue to drag the remainder of the project. These three in particular had a multi-million dollar impact for this quarter. I also wanna kind of walk through, there were other claims in prior quarters that we're still seeing the drag on right now. We have tens of millions of dollars of unresolved claims at this point that we are working through with our customer. We've been successful, and our customers have typically been very open when we can demonstrate that the conditions that we bid the job on, based on the information they gave us, are not what the conditions are. These things just take time. Okay. That's very helpful, thank you on that. On the offshore wind, you know, I think you mentioned that you're out there looking for additional opportunities. You know, I think last quarter you had mentioned that, you know, you had open half of 2025 and half of 2026, with the rest going to the New York project. You know, where I guess one is, you know, where do you stand on filling the open time? And two, I know that you have an option to build a second vessel. Obviously the first one's not complete yet. Given that, you know, these take a while to build, the contracts are awarded 2-3 years ahead of time, when do you think you might be looking at a go, no-go on the option ship? Yeah. The first vessel, as you know, we contracted back in December last year, and it will be ready for delivery at the end of 2024. We are bidding a lot of work that is coming out here over the next six months. We will have a fairly certain picture of the utilization of the first vessel by the end of the year or early next year. We are optimistic to have that vessel fully utilized by that time. Based upon the outcome of those discussions, we will have to make a decision on a second vessel, probably in the H1 of next year. I would also say that we have a partner going into offshore wind. We're doing this together with Van Oord. They also have rock installation vessels. However, they are internationally flagged, and as such, will have to go and pick up the rock in Canada to come down to the U.S. to install it. It is an option for us to use the capacity that Van Oord has in case we run out of capacity of our own. Okay. Great on that. Thank you. One more, if I may, like, jump back in queue. You've talked, as you know, for a while here on the LNG projects. I understand, you know, Russia and Ukraine, and you know, Europe starting to at least look for alternatives for supply. But I guess, you know, kind of how confident are you and what gives you the confidence that, That these projects are actually going to take shape here and come to fruition, you know, in the near term. Well, with the developments in Europe and what happened in Ukraine and continue to happen in Ukraine and the energy situation in Europe, Europeans are looking for more diversification of their energy supply. This all points in the right direction for the LNG exports here in the United States. As you know, we have two projects that we have included in our backlog, or it is really awards that are pending a final investment decision. According to what we hear from the developers and also what you can read in the press, these discussions are ongoing and, based upon the schedules that are being discussed from the developers, we will be looking at entering into final negotiations and contracts, so potentially during this year, and then work will be executed in 2023 and 2024. Great. Thank you very much. I'll get back in queue. Please stand by for our next question. Our next question comes from Adam Thalhimer with Thompson Davis. Your line is now open. Hey, good morning, guys. First, I just wanted to ask about the bidding environment. Obviously, good result in July. What do you see in the outlook for bidding for August and September? Well, Q3 is always a very busy bidding season for us. Most of the work that we are bidding in Q3 will be for execution in 2023. There are still some utilization that we would like to secure towards the end of the year. As I said in my notes, we do expect the increased funding for the Corps of Engineers to translate into work that needs to be executed this year and next year. They have record budgets and there has been some delay in getting those projects to the market. Although the H1 of the year in totality is for the bid market for the U.S. Army Corps of Engineers has been similar to what we've seen in previous years, the bids came out very late in June. There was a substantial delay here in the H1 of the year. We expect the bidding to pick up substantially in Q3 and also in Q4. Everything points to a very strong backlog development over the remainder six months of the year for work to be executed in 2023 and onwards. Okay. I think I heard you also say that you signed Equinor formally in July. Will that go into the Q3 backlog? Yes, it will. Okay. Last one for me. How easy is it to put inflation into the bids right now? Are you seeing your competitors do the same thing? Yeah. Well, cost is cost, and it has to be added to the cost of doing the project. So what happened here is we were hedging our fuel expenses, but the very rapid price increases that we saw during the end of last year and this H1 of this year was just substantial. I can tell you wire ropes are up 100%. Chemicals are up 40%-50%. And the projects that we executed here in the H1 was bid before you saw this kind of explosive inflation pressure. So what we do now, we do update our expectation for cost increases on bids going forward. So I see this as a kind of passing issue. Scott, you want to add to that or? No, I mean, you know, we're not quite sure what our competitors are doing, but we have a certain margin that we wanna hit, and we've got to make sure that when we build up our bid, we are not only getting the cost right, we're also pricing in the risk. That's what we have done on our recent bids, and we will continue to do. You know, you did see the July results. That was based on this new model of getting costs where they need to be in. We still had a very successful month. Got it. Okay. Thanks, guys. Good luck in Q3. Thanks, Adam. Please stand by for our next question. Our next question comes from Jon Tanwanteng with CJS Securities. Your line is now open. Hey, good morning, guys. Thank you for taking my questions. Just to follow up on that last one. I think I got the answer, I just want to clarify. The margins on the low bid you had in July, that work is at your target margin that you want it to be. It's not. It was more competitive or had issues due to inflation or anything like that. Just a little more color there. No, that is correct. We are bidding the market as we see it, and we do expect a very strong bid market here in Q3, Q4 for 2023. Yes, we are bidding as we always have. Okay. How should we think of inflation and supply chain and dry docking risks for the rest of the year? Because obviously it was something that was probably a little bit more unexpected than not, especially as it concerns the equipment deliveries. Yeah, you know, on the inflation front, again, as we start rolling into the more recent projects that we have bid, you know, we're hopeful that we have captured all of that and the impact should not be as much. As I mentioned, we are still working on projects and will continue into the H2 of the year, you know, that were bid prior to it. We will continue to see a drag. Hopefully as new projects replace old projects, that will decline. We do have three vessels left for dry docking for the H2 of the year. We are doing everything we can to order what we know ahead of time to make sure that it's there. You know, there's always risk that once we get into the yard and we find something else that we need, we need to do it. We have done everything we can to properly prepare and have everything we need at the dry dock when we're ready to start. Okay, great. How should we think of your cash needs, with the EBITDA not quite where you want it to be and lots of investments underway? You expanded your credit agreement. Should we expect that to be drawn down very soon? Or will you utilize some other kind of financing? Or do you expect your cash flow to kind of rebound and help you out there? Yeah. You know, as you said, you know, our cash, we've been saying this, you know, for the last few quarters, you know, we will have negative cash flow this year. Now with the addition of the second hopper, we will have negative cash flow in 2023, with the expectation it starts leveling off in 2024. Then once we take delivery of everything, you know, cash flow should drastically ramp up in 2025. It is possible next year that we do have to tap into the revolver for some, you know, short-term bridge financing. We are exploring other options right now, just kicking tires just to know what's out there. Right now we're comfortable, especially with the expanded revolver, if we need to tap into it for a short amount of bridge financing, until we start taking delivery and earning funds. We're fine doing that. Okay, great. Last one from me, and I'll jump back in the queue. What happened with the Houston bid? Have you done a postmortem on why you didn't win that one and what the remaining Houston opportunity looks like? Yeah, of course. When we have a large project, we always do a postmortem to understand how we assess risks and production on the project and compare that to what we believe our competition has been doing. We believe there is a strong market going forward for dredging both the rest of this year and then next year, in particular next year and onwards. We price our risks and our, as we see the projects accordingly. That's the only thing I can say about that. We are bidding the market as we see it. I guess, John, the only thing I would add is, you know, we're there right now at Houston. We understand the risks and the conditions of the material there, and we priced all of that in. We're very comfortable with what we bid, even after doing the postmortem. Frankly, even trying to go back and refigure out how to get where the winning bidder did to stick with the risks that we know are there and the margins we couldn't get there. While we would have liked to have it's in our backyard, we're very comfortable with how we priced that project. As Lasse said, we feel very strong about the 2023 and 2024 market. If it's not this one, we'll move on to the next one and stay disciplined. Understood. Thank you. Goodbye. Adam Thalhimer with Thompson Davis, your line is now open. Oh, thanks for getting me back in. Just one question. As you guys look out to 2023, is there any reason to think the margin profile of the business has changed at all? Margin profile, we are looking at margin as we have in the past. The business is solid. As we have said, our EBITDA expectations has not changed. We are looking at getting a new dredge out there next year, which will be a nice addition to our fleet with a new modern hopper dredge. That's why we also decided to go for the option. We do see a very optimistic put in upon this market as we go forward. Scott, you mentioned that tens and tens of millions of Cost reclamation out there. I mean, does that flow straight to EBITDA when that comes in? Yeah. I mean, when we settle one of these, if the project is already complete, that will go straight to revenue. If we're able to resolve while a project is in progress, then yeah, it'll spill through the end of the project flow through to down to EBITDA. Okay. You think on these three jobs and previously outstanding items, more likely to get payback sometime in 2023, or are you hoping for this year? Yeah. I mean, some could happen this year. I mean, again, it takes quarters, and as I mentioned, of the large amount that I mentioned, most of those have happened prior to Q2. There is absolutely a chance that we get resolution. Now, when I you know, the amounts that I say, that is the claim the way that we see it right now. That does not necessarily mean that we're going to settle at 100 cents on the dollar. Our success rate has been historically very high, but not necessarily at every penny that we believe is coming to us. You haven't put any of that into the H2 outlook that you gave. In the outlook, we haven't, but we also haven't talked about any potential claims that may pop up that goes the other way in the H2. You know, these do ebb and flow. Fair enough. Okay. Thanks, guys. Yep. Please stand by for our next question. Our next question comes from Poe Fratt with Alliance. Your line is now open. Good morning, Lasse. Good morning, Scott. Hey, Poe. Hey, just, Scott, I didn't catch the adjustment, one-time adjustment to this, the Q2 G&A that looks like it'll hit the Q3 too. Can you just give us a little more color on the amount and sort of the nature of that adjustment? Yeah. It will not hit the Q3. It was strictly isolated to the Q2. When I'm talking about a bridge between the Q2 to Q3, the Q3 won't have the benefit of the adjustment that lowered G&A in Q2. It has to do with the lower incentive pay that I talked about in the quarter. It was also an adjustment related to that. Okay. Would that be the full difference between the Q1 G&A and the Q2 G&A? Is that sort of the way to frame it? That's a big part of it. That's not all of it. We have, I think I mentioned in one of the earlier calls, you know, we are really taking a hard look at cost, and we have rolled out a number of cost reduction initiatives, and we're also starting to see those pay off as well. I would say it's a combination of both of those, partially offset as we build up the wind team. Great. On the unresolved claims, you know, the three larger projects, reading between the lines, I'm coming to the conclusion that Houston is one of those jobs where the site conditions changed. Is that possible given how, you know, that project only started a short time ago? Can you just give us a little more flavor on the three projects, and then also when you expect to complete the three projects, not necessarily when you expect to resolve the claims? Yeah. We are not going to discuss individual projects, but the projects in question is projects that we executed in Q2 and Q3, and we expect the projects to be done by Q3. The discussions with the clients will also take some time before it gets resolved. Just to clarify, Lasse, so all these 3 projects will be completed in the Q3 of 2022? That is the way the schedule looks today, yes. Okay, great. Can you talk about the new build program? You know, inflation has been an issue on the operating level, but can you talk about your new build cost in the context of the inflation that you're seeing at the operating level? Is there a potential impact on the new build costs? Well, we have seen some supply chain issues on the new builds with delays of equipment coming to the yard. There are some inflationary pressures. However, lately we've seen steel prices moderating and even coming down. When we entered into the contract to build the first hopper vessel, we negotiated the price of the option. That's really what we can say about that. We have an agreement with the yard where we are doing some adjustments on steel pricing up and down. We do not see any continued major impact of the inflation on the new build projects. Scott, you want to- Poe, just to give a little color. On the Galveston Island, which we're about to take delivery of, as Lasse mentioned, was a fixed price contract, with the exception of steel. We signed this contract a couple of years ago when steel was lower, and obviously it's increased. The impact of the change orders because of the increase in price of steel was $2 million, and that was a pretty drastic increase in steel. That was a nominal impact. Now when we signed the new one, and we've, you know, already given the price in the low hundreds, that was negotiated a much higher steel price. Our expectation is that we don't see an increase and it does go up or down, so we potentially see a clawback. Great. Thanks for your time. At this time, this concludes the Q&A. I would now like to turn the conference back to Tina Baginskis for closing remarks. Thank you. We appreciate the support of our shareholders, employees, and business partners, and we thank you for joining us in this discussion about the important developments and initiatives in our business. We look forward to speaking with you during our next earnings discussion. Thank you. This concludes today's conference call. Thanks for participating. You may now disconnect.