Good day, and thank you for standing by. Welcome to the third quarter 2022 Great Lakes Dredge & Dock Corporation conference call. At this time, all participants are in listen-only mode. After the speaker 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. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I will now hand the conference over to your speaker today, Tina Baginskis, Director of Investor Relations. Please go ahead. Thank you. Good morning, and welcome to our third quarter 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. Thanks, Tina. During the third quarter, we continued to navigate a challenging operating environment, driven by the continued delayed bid market, inflationary pressures, and continued impact from the second quarter site condition claims on certain projects. Overall, year to date, bid volumes from the Army Corps sits at 90% of the 2021 year to date volumes, as we have seen some good improvements in bid volumes during Q3. Unfortunately, the severe delay in the bid market that we have seen through Q1 and Q2 this year had a significant impact on our fleet utilization in Q2 and Q3, as a portion of our annual revenues comes from projects bid and executed within the year, which we call book and burn. These projects are typically beach renourishment projects, and these volumes were only 53% of the 2021 bid market volumes. When these projects get delayed and/or not tendered, it impacts the fleet utilization for the industry, both for Great Lakes and for our competitors. We both have 10 dredges tied to the dock with no work. In September, we had nine major dredges in dry dockings or idle. We have used the time efficiently to accelerate repairs and maintenance work, and currently the dredges are back in normal operations. We have held numerous and constructive discussions with the Army Corps leadership on what is impacting the bid market and how to resolve the issues, and we have started to see positive developments. In the latter part of Q3, the bid market gained momentum and Great Lakes won 50.1% of the volumes bid, as we were awarded $338.9 million in dredging projects and open options, ending the quarter with $452.6 million of dredging backlog and $625.7 million in open options and projects pending award. The Army Corps continues to receive record funding, so we are optimistic that this situation is temporary and we see a return to more normal market conditions over the next quarters as more projects are scheduled to bid in Q4 and also into Q1 of 2023. During the quarter, we have seen inflationary pressures impacting cost of labor, cost of spares and consumables, and subcontractor pricing. Scott will give further details, but as an example, our cost of wire rope, which we use a lot for our winches and cranes, has increased more than 100% since 2021. In our second quarter earnings call, we elaborated on an unusual number of projects that encountered differing and unanticipated site conditions and mentioned that this would also impact our operations in third quarter. Varying site conditions on projects are not uncommon, and there are established methodologies for resolving these contractually. Unfortunately, this takes time and revenue and profit recognition are delayed until these discussions are agreed upon. As we did back in 2017 when we went through a challenging environment, we are taking prompt and strong action to adjust to this situation. We will reduce operating expense by keeping the oldest and least productive dredges at the dock with minimum crewing. We are rationalizing our fleet of older support equipment. We have accelerated needed repairs to the most productive parts of our fleet to optimize production going forward. Our cost reduction initiatives are proving out as our SG&A is currently well below prior year, even in spite of the inflationary pressures we have experienced. Our fleet renewal program is moving forward as planned. After decommissioning several of our oldest dredges in 2017, we have invested in productivity upgrades for best performing vessels, and our new hopper dredge, the Galveston Island, will be ready for operation in the first half of 2023, and her sister ship is expected to be ready for operation in the first half of 2025. The delivery of the Galveston Island will provide us with added capacity and the opportunity to potentially retire some of our older dredges, which will have a positive impact on our overall margins in the coming years. These days, we are mobilizing our Empire Wind project team in Houston. This project for Equinor and BP, with expected offshore rock installation starting in 2025, is a solid start on our new venture to participate in the U.S. offshore wind market. We have entered and are in discussions with several other wind farm developers for projects commencing rock placement in 2025 and beyond, and are very optimistic to have a full work schedule for our new rock installation vessel as she starts operation in 2025. As we enter the fourth quarter, we expect results to improve as our fleet is busy both for Q4 and for the first quarter of next year. We believe the fundamentals are in place for a return to a more normal dredging market in 2023. We believe the issues we have encountered this year are short term in nature, and the ongoing demand for dredging services and our new and upgraded dredging fleet, combined with our strategy for growth in the offshore wind market, is a solid path for our company. I will now turn the call over to Scott to further discuss the results of the quarter and the year, and then I'll provide some further commentary around the markets and our business. Thank you, Lasse, and good morning, everyone. Let me start by walking through our third quarter results in which contract revenues were $158.3 million, net loss was $9.9 million, and adjusted EBITDA was $1.3 million. Revenue of $158.3 million in the third quarter decreased $10.3 million from the prior year third quarter, mostly driven by lower domestic capital and maintenance revenue, partially offset by higher coastal protection revenue. Third quarter 2022 revenue came in about $10 million below the guidance given on the last earnings call, primarily due to the lack of book and burn beach and maintenance work that we typically see in the third quarter. For context, we had nine dredges either idle or in dry dock in September 2022, compared to just one idle dredge in September 2021. Current quarter gross profit and gross profit margin was $3.8 million and 2.4% respectively, compared to $36.3 million and 21.5% respectively in the third quarter of 2021, and was lower than the guidance given on the last call, partially due to the lower than expected utilization and revenue previously mentioned. In addition, further differing site conditions on two of the projects we discussed last quarter contributed to the lower margin. These impacts will be added to the claims that we are working closely with our clients to resolve. We also experienced continued inflationary pressures on consumables in addition to rising diesel prices, which impacted the unhedged portion of our fuel as we typically hedge around 80% of our estimated fuel usage. Finally, we accelerated maintenance and repairs on a number of our vessels that had unexpected downtime, mostly due to the previously mentioned lack of book and burn. Though the cost to do this maintenance impacts the current quarter, we felt it was prudent to take advantage of the downtime to set us up for next year. Operating loss for the current quarter of $9.5 million decreased from prior year quarter's operating income of $21.4 million, primarily due to the lower gross profit, offset partially by a decrease in general and administrative expenses. Third quarter 2022 G&A of $13.3 million decreased $1.9 million from the prior year third quarter, primarily due to lower incentive expense and lower Houston relocation costs, and was slightly below guidance due to the continued focus on cost savings. Net interest expense of $3.4 million for the third quarter 2022 came in at guidance and was down from $4.2 million in the third quarter of 2021, primarily due to additional capitalized interest for the new builds. Third quarter 2022 income tax benefit of $3.3 million compared to income tax expense of $3.2 million for the same quarter of 2021, and was driven by the lower current quarter income. Rounding out the P&L, net loss for the third quarter of 2022 was $9.9 million, down from $13.8 million of net income in the prior year quarter. Next, we turn to our balance sheet, where we ended the third quarter with $38.8 million in cash. Third quarter 2022 capital expenditures were $33.7 million, which includes $11.1 million for our new scows and multi-cats, $8.5 million for the Galveston Island new build, $8.2 million in maintenance and other CapEx, $5.1 million for our second new hopper dredge, and $800,000 for the subsea rock installation vessel. I'll conclude with some commentary on the upcoming quarter. We expect fourth quarter 2022 revenues to be between $175 million and $185 million, as we are already seeing an uptick in utilization, as currently 11 of our blue water dredges are working. Two others, the Padre Island and the Ellis Island, are undergoing the regulatory dry dockings and are expected to get back to work at the conclusion of their shipyard stays in December. Finally, we have brought two of our older dredges to the dock, which will drastically reduce crew and other costs, which gives us the ability to quickly bring them back to work if opportunities present themselves. We expect fourth quarter gross profit margin to be in the high single digits, with some remaining drag from the issues around production and inflation encountered during the second and third quarters, the continued impact of high diesel prices on the unhedged portion of our fuel, the mix of projects in backlog, and the Ellis and Padre dry dockings. Fourth quarter G&A and net interest expense should remain relatively flat from the prior quarter. Inclusive of our three ongoing new builds, we expect fourth quarter CapEx to be approximately $55 million, taking full year CapEx to approximately $155 million. During the fourth quarter, we drew $10 million on our credit facility to support the new build payments. Despite the challenges we face this year, our liquidity remains strong. Our notes, which were refinanced last year at a very attractive 5.25% interest rate, don't mature until 2029, and our recently upsized $300 million revolver runs until mid-2027. These well-timed moves, along with an improving bid market, support our new build initiative, setting us up for future growth. With that, I will turn the call back over to Lasse for his remarks on the outlook moving forward. Thank you, Scott. As indicated earlier, bidding was delayed in the first half of the year, which then impacted the 2022 utilization. The bid market has picked up in the third quarter, which points to improved utilization in 2023. Although some of the new phases on larger port deepening projects previously planned to bid in Q4 will likely slip into Q1 and Q2 next year. We expect port deepening projects to continue in 2023 for the ports of Freeport, Sabine, Houston, Corpus Christi, Norfolk, and Mobile. The LNG projects we have bid continue to update their plans in light of the changed energy situation in the EU. Early works on the site has been initiated. We are in the process of updating our estimates for these projects, but final FID has not yet been authorized. We continue to see strong support from Congress for infrastructure investments and for the dredging industry. On July 28 this year, the Senate passed a version of the Water Resources Development Act, or WRDA, which includes legislation that authorizes about $25 billion to help finance 20 new or 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. As of July 28, both the Senate and House passed their respective fiscal year 2023 U.S. Army Corps of Engineers budget proposals. The Senate's 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 will be under continued resolution until mid-December this year. This increased budget and the funding from the Biden administration's infrastructure bill support our expectation of a stronger bid market entering 2023. We continue to see strong prevailing activity within the offshore wind market in the United States. Great Lakes has already been awarded by Equinor and BP, the rock installation contract for the Empire Wind one and two projects, with installation windows in 2025 and 2026, which is expected to power more than 1 million homes in the State of New York. In parallel to the rock installation vessel build and this first contract, we are bidding for a multitude of other offshore wind farm projects with rock installation planned for late 2025 and on. Major wind farm developers like Equinor, Dominion, Ørsted, Avangrid, and US Wind has already and they are in the process of selecting suppliers for their wind farm developments. We are optimistic about securing one or more of these projects to fill up these projects, to fill up our backlog, providing solid utilization for our vessel from 2025 and onward. In conclusion, entering this year, we thought the worst effects of COVID was behind us, and with solid funding for dredging, that we would have yet another good year. However, the delayed bid market in dredging, combined with inflationary pressures, supply chain constraints, and changed site conditions on projects severely impacted our results for Q2 and Q3 this year. In spite of these current difficulties, we remain positive that Great Lakes strong performance over the past five years after our restructuring and rationalization program in 2017 has allowed us to not only manage through this challenging year, but has provided us with the ability to continue our strategy of investing in our fleet to improve our overall margin profile while executing on a strategy to invest in the rapidly growing offshore wind market that provide client diversification and a new source of revenue growth. With that, I turn the call over for questions. Thank you. As a reminder, if you have a question, please press star one one. Once again, to ask a question, please press star one one. Please stand by while we compile the Q&A roster. Our first question will come from Joe Gomes from Noble Capital Markets. Your line is open. Good morning, and thanks for taking the questions. Good morning, Joe. Kind of like to start out here. You know, on the second quarter call, you gave the guidance, which obviously, you know, came in below the guidance. I'm just wondering, you know, that was a month into the quarter, what changed in the last two months of the quarter? Or what was, you know, a surprise during the last two months of the quarter, to cause that miss, you know, especially on the gross margin side? Yeah. No, Joe, appreciate the question. Really a handful of things. Even, you know, on the last call, as you're right, was just three months ago, we still had expectations like we typically see in a Q3 for book and burn towards the end of the quarter. That did not materialize. Utilization that we were expecting did not occur. The diesel impact, and as I'm sure you've been following, diesel has recently gone through the roof. That 20% unhedged portion, based on some, you know, old legacy bids, that 20% differential came back, and it was a very impactful number in the quarter. During the quarter, two of the projects that we talked about last quarter with the differing site conditions, we had worsening differing site conditions. Again, Lasse talked about that's a timing issue. We need to take the hit now, but we will add that to our claim. You know, we are having those conversations now with our customer and, you know, we're comfortable they'll get resolved, but these things do take time. The last piece of it, which drove higher costs was once we saw that we were going to have more dredges at the dock not working due to the lack of book and burn, we thought it was a really good idea, let's accelerate repairs and maintenance that we had planned for these dredges later on, take advantage of the downtime, get those out of the way, so when this market picks up, we can get back to work and not have to pause. Thank you for that. Is there any way to kind of, you know, give a, you know, a percentage of impact for these, you know, four or five different, you know, costs here or lower utilizations and the diesel impact, for gross margin? You list them, you know, which one was the most impactful? You know, I don't know if you can rank them on a kind of a and break it out on a, you know, on a kind of a dollar basis as opposed to just saying these are the things that hit us. Yeah. Joe, the four major ones that I just mentioned, the impact was about the same on all of them. There are little differences, but they really had about the same impact. The sum of those four without those, if we didn't have them, it would have gotten us fairly close to where I think consensus was for the quarter. These were things we did not anticipate. These are things that we typically do not see in a Q3, all four of them were just as impactful as the others. Okay. Thank you for that. Very helpful. Any impact from Ian either, you know, Hurricane Ian either positively or, you know, negative? I'm understanding that it came right at the end of the quarter, but any impact that you could see maybe on the positive side or again, on the negative side from the hurricane? Yeah. The positive is that there are several large beach restoration projects that will come as a result of Hurricane Ian. However, it takes a while for the Corps to get these tenders out and bid and before we can execute. We expect these to come out to bid in Q2 next year. That will start to come out in Q2 next year, and then execution will be in the second half of next year for those beach projects or beach restoration projects. Joe, I will add, we had three dredges in the area, but the impact and downtime from it was very small and something that we've already contemplated for being in that area that time of year. It did not impact operations more than just a few days. Okay. One last one for me, if I may. You know, in the news here lately, obviously, was the acquisition of your competitor Weeks by Kiewit. I was just wondering, you know, kind of getting your guys' thoughts on how that may or may not, you know, change the competitive environment out there. Yeah. The news came out here in the third quarter that Kiewit was buying Weeks. As you know, Weeks is our second largest competitor. I know the Kiewit organization from my prior life in oil and gas, and I see them as a very responsible and a strong contractor with a very strong risk management program in place. The acquisition doesn't change also the capacity in the industry, so we don't really see this as a major change for us, so competitively. Okay, great. Thanks for taking the questions. Yeah. Thank you. One moment for our next question, please. Our next question comes from Adam Thalhimer from Thompson Davis. Your line is open. Hey, good morning, guys. Good morning, Adam. Good morning. The two jobs that had the site conditions remained challenging in Q3, when did those jobs complete? They both roll into next year. What would be your thought, I guess, either positively or negatively on, you know, further surprises? I mean, you know, both of these jobs now are, you know, well over 50% done. I think we have a pretty good feel, you know, of what's there. Again, it can happen. We see, you know, we do as much pre-work and sampling that we can prior to, but we can't sample every area and, you know, it can happen. I would, I do believe just as far as we are into these projects, that we have a pretty good idea of those conditions and would not expect to see anything getting worse. Okay. Got it. The nine major dredges that were either in dry dock and are idle in September, how many of those were idle, of the nine? Yeah. Well, like I said, we had the two that were in dry dock, and then others were either between jobs, getting ready to go to the backlog or book and burn that we thought we'd have, that we didn't, and some of them were already had scheduled repairs and maintenance. A mix of those. We just decided it was prudent, let's take advantage of it, and do it. As I noted, as we sit here to date, 11 of our vessels are working. That was temporary, and we are getting our dredges back to work. Okay. That's what I was trying to get a sense of. Are any of them still idle today or everybody's working today? Yeah. As I mentioned, we have 11 working. We have still the two in dry dock, and then we have taken two to the dock, and we are going to drastically reduce costs on those two. We can quickly bring them back if opportunities present themselves. When we get. Okay. When we get to December, we'll have the two hoppers finish their dry dock. Besides those two sitting at the dock, it looks pretty good for Q1 right now. We still have some space to fill, but nothing that is unusual. We had some, you know, really good momentum in Q3 in the bid market. Okay. I don't wanna put words in your mouth, but when do you think we can get back to historical high teens gross margins? One of the challenges we have right now, even though we did see, you know, a much stronger bid market in Q3, it is the mix of work. We have not seen the level of capital projects this year bidding that we have in the past. Year to date, the capital project bid market is half of where it was a year ago. As you know, that's the high margin work that we do very well on. The current mix of backlog has lower high margin work than we typically see. The good news though is between now and the end of the first quarter, we have visibility to nine capital projects to be bid. Lasse mentioned a number of them in his commentary. We do see it coming, but these are jobs that got pushed to the right that should have bid already and have not, but are on the slate now to, as the way we see it, to bid in Q1. You mentioned six of them in the press release, three ports being Houston, Corpus Christi, Norfolk, Mobile. Those bids are actually earlier in 2023 versus later? That is correct. Okay, that's encouraging. Last one, the large LNG project. Can you just update us on the timing of when that might first flip into backlog and then actually flip into construction? Yeah. As I said, these projects are waiting for final investment decision by the developers. That final investment decision is dependent on several things. One is, long-term supply contracts and, also, financing from the banks on the back of those supply contracts. We are seeing that the developers are updating their plans. We have been asked for price re-estimates. If there is a positive FID, later this year on one of them, we would see dredging starting in the second half of next year. Great. Okay. Good luck in Q4. Thank you. Thank you. Thank you. One moment for our next question, please. Our next question will come from Jon Tanwanteng from CJS Securities. Your line is open. Hi, good morning, and thank you for taking my questions. Scott, I was wondering if you could break out in Q4 what you expect to be the impact of these lingering, you know, effects from change orders, as well as inflation, and dry docking expenses. Second, maybe if you could answer what amount of expenses did you pull in from 2023 on a maintenance basis, just for the idle time that you had? Yeah. You know, looking at the continuing impact, again, I still think we're gonna see some pressure on diesel. I mean, you know, just in these last couple of weeks, it continues to increase, you know, to levels we haven't seen in a very long time. As I mentioned earlier, I don't think we'll see any continuing further differing site conditions on those projects. I think we have a pretty good feel of the estimates of those. When I guided to, you know, the high single digits, and then we have the dry docking, it contemplates everything, that I just spoke of. You know, the continued drag on some of them and then, you know, I think we'll see continued inflationary pressure. All of that is baked into the guidance that I gave on that. I'm sorry, what was the second part of the question? How much maintenance did you pull in? During the quarter, I mean, I said there were, I think we had planned maintenance on a handful of vessels already. There were three others in addition to the dry dockings that were planned to be done either in Q4 or the first half of next year that we did. You know, but between those unplanned ones, it was probably $4 million-$5 million. Okay, great. That's helpful. Second, just on your hedging program with the fuel, you mentioned you're 80% hedged on some legacy contracts. What is your level of hedging on projects that you're signing now? Yeah. We don't change the philosophy around our hedging program. We will, as we put on new bids, still do that 80%, but we will put in the bid at the current rate, and then we will go ahead and hedge that portion. We've always had this 20% exposure. Sometimes it works in our favor. Most of the time it is relatively flat. Then we have a quarter like this, where it really, you know, hit us. The philosophy hasn't changed. It's just we now know when we put in new bids, we are going to bid it at these higher prices and then hedge 80% of that right away to take that risk off the table. Understood. Thank you. Finally, in your discussions with the Army Corps, what gives you the confidence that awards will, I guess, improve to a more normalized rate? My understanding is, that they're lacking manpower, and I don't know how quickly that something like that could be turned around. Yeah. In our discussions with the Army Corps, we are highlighting the issues that we see compared to the year-over-year on the bid volumes coming out. We have seen a good pickup in third quarter. We have had detailed discussion on the port deepening bids that is scheduled to come out or was scheduled to come out in fourth quarter. We know they are slipping into Q1 of next year. The Corps is well aware of the issues and are very keen to get back to our normal bid volumes. What gives me reason for optimism is the fact that funds are now being made available for the Corps for these projects, and our strong work on the Harbor Maintenance Trust Fund in the last years has secured that funding going forward. Got it. Thank you, Lasse. Thank you. One moment for our next question. Our next question will come from Andrew Casella from Deutsche Bank. Your line is open. Hi. Thanks for taking the questions. I wanted to ask, just remind us again, when you bid on a project, how quickly do you start mobilizing and getting funding for that, I guess, as we think about, you know, the comments you were making on some of the capital projects that are bidding in the first quarter. Is that essentially assume that you'll be mobilized as soon as you make the bid? Or just remind us again on that mechanism. Yeah. Typically, what happens is that you bid the work and, if you are the low bidder, it takes four to five weeks to get that confirmed and turned into being a contract. Then it takes us some weeks to mobilize on the project. Typically, between six and eight weeks. Could take longer, but if we want to go quickly on to the job, that's the timeframe. Got it. With that in mind, I guess, as a follow-up to the question about kind of getting back to the high-teens margin, certainly with the understanding that the mix needs to include some of these capital projects, that seems like that's a second half 2023 event versus it being anytime sooner. Yes, I think that's okay. Okay, got it. Just as far as you know, some of the cash sources and uses as we think about next year and obviously with EBITDA running at these lower levels, I mean, with the CapEx program definitely going to, you know, strain liquidity a bit. Can you just remind us again how you're thinking about CapEx for 2023, and then just any comments on kind of how you're thinking about working capital? Yeah, sure. I gave $155, $100 roughly for 2022. We expect next year to look about the same, you know, as we continue with the new build programs. We'll take delivery of the Galveston Island in the first part of the year, but we'll continue with the progress on the second hopper and the wind vessel. CapEx should remain relatively flat. You know, we did recently upsize our revolver, and the plan all along was that we would use the revolver as, you know, short-term bridge financing during this new build period. Even, you know, in light of the 2022 results, that did not change the way we were thinking about it. We had always anticipated that our CapEx driven by the new build program would exceed operating cash flow starting in 2022. We will take delivery of the Galveston next year, and in 2025, have all the new vessels in our toolkit quickly start building up cash again and quickly get the revolver paid off, starting in 2025. Okay. Got it. Then final question from me. As you think about, you know, bidding on new contracts, you know, certainly this period of excess inflation and just how, I guess, broad it's been, is there a way to change some of the contractual mechanisms where you make it either more formulaic, where you're more protected, I guess, in kind of the, you know, when you make the bid versus when it's executed? Just curious if there's a possibility of kind of changing some of those mechanisms on the prospective basis. Generally, when you do a written rebid for the Corps, you cannot change those conditions. What we do is to update our cost estimates and make sure that we include for the increased cost of consumables, and fuel, and so forth. If it's a RFP, it's a different way of bidding, and then there could be different contractual requirements. You could have a weight that's being put to your execution plan, to your people, your experience, and the type of equipment that you bring to the client. There, you have a better opportunity to change some of these items that otherwise is fixed. I'll add, you know, it's one of the, you know, advantages of the diversification we're looking at to get into the offshore wind business. Those are more traditional RFP-type contracts, where we're able to negotiate in escalation clauses and things like that to help de-risk some of these issues that we've seen. Okay. Got it. Thanks so much. I'll get back in the queue. Thank you. One moment for our next question, please. Our next question will come from Jon Tanwanteng from CJS Securities. Your line is open. Hi. Thanks for the follow-up. My question is just on the offshore wind industry. I was wondering if you could just give us a little more color on the health of that market. Just, I read yesterday that the Massachusetts Commonwealth Wind project was endangered due to rising costs. Number one, are you bidding on that? Number two, are there any other projects that are in scope of that kind of headwind? Yeah. In general, there are a number of projects that are scheduled for start installation in 2025 and 2026 and 2027. We have bid out for all of the ones that are now starting up and being planned here in the early phases. There will be some movements on these projects. We know that from history and large projects. There are hearings, there are approvals that needs to be obtained. There has been some talk about supply chain on generators that is delaying some of the plans for the developers. There is also a trend towards larger generators. Currently, they're looking at 15 MW per tower. There are talks about a 20 MW turbine and clearly the economics of the developments are better with larger generators on per item. These things are included in the developer's consideration, but we are fairly optimistic that several of these projects will go forward with rock installation in 2025 and 2026. As I said, we already have a contract in place with Equinor and BP for Empire Wind. We need one more contract to have a good utilization as we get into 2025, 2026. Got it. One more question, just on the language that you used in your prepared remarks in the press release over performance obligations and options versus your prior, I guess, low bid pending award. Just what's the difference there, and is there anything we need to be thinking about? Yeah. It's no different. We just clarified and used different terminology. The low bids always included options as well, so we just put that clarifying language. You don't need to think about it any different than you have been in the past. Should we think about performance obligations as backlog? Yes. They will eventually turn into backlog. That's from the Equinor project. The backlog that we listed excludes the Equinor project. You will see us starting to refer to dredging backlog. The backlog numbers are dredging. In addition, we have the Equinor contract. Understood. Thank you. Thank you. One moment for our next question, please. Our next question will come from Andrew Casella from Deutsche Bank. Your line is open. Hi. Thanks for taking the follow-up. Just, I'm not sure if you guys disclosed this, but do you have, you know, I guess, the total quantum of claims you're kind of making on these two site condition issues? I guess just trying to understand what the P&L opportunity is ultimately. Then, you know, any sense of when you potentially could kind of resolve that since it's been a lingering issue and seems like it'll, you know. It seems like it's been going on for a couple quarters now. Yeah. You know, look, as Lasse has said, these are not unusual. These happen quite often. What's unusual is the size of these and that we had multiple larger ones hit in the same period. Again, this is normal operation. I will tell you, and in addition to these two, again, there's a number of this just normal course of business that we have all along. Between all the potential claims right now, it's in the $10 million-$20 million range. Not that we, you know, will necessarily settle every single one of these at $1.00 But our success rate has been very good in the past, so we do expect to get a large portion of that. These do take time, though. You know, our discussions with our client, getting them to agree that there's merit to it, that typically is fairly easy. We can all agree that we thought the conditions were gonna be X and they turned out to be Y. It's quantifying the impact of those differing site conditions that just take a little time to work through. I don't expect either of these that I called out to get resolved this year, but we have a lot of people focused on it. We have ongoing conversations. We're motivated to get these done, but I do think it's gonna be a first half of next year. Got it. Just as far as the mechanism with that, I mean, is this a rolling process, where you know you'll have, I guess, the quantum of the issues you had in the second quarter, you go to the you know the customer, try to get those back, then you have additional ones in the third quarter? Or do you have to kind of wait till the end of the project to go back and I guess resolve all of them at once? Yeah. Typically, the resolution occurs at the end of the project. The conversations start immediately. Okay. Great. Thanks so much. Thank you. As a reminder, to ask a question, please press star one one. One moment for our next question. Our next question will come from William Feeley from Feeley Capital Markets. Your line is open. Hi. Good morning, gentlemen. Morning. Two brief questions. The first question is whether the difficulties in the Mississippi River, low drafts and that sort of thing, represents an opportunity for GLDD, or not. Then second, Excuse me if I'm not up to date on this issue, but would it be troublesome to ask for maybe a two-minute update on sort of the state of play, if you will, generally speaking, on a lot of discussions that seems to be going on about the Jones Act and the impact on GLDD? Yeah. The water levels in the Mississippi River is extraordinarily low, which gives challenges for the navigation on the river. We have several projects in the area, and we have been asked if we have a large cutter dredge available to go in and help out. It adds some work. It typically work that's for us, but is on the rivers and lakes part of our business. It adds work that is different from previous years, where previous years we have much more sedimentation in the outer part of the delta, which is not happening this year, which then gives work for hopper dredges typically. The nature of the work has changed. I don't know what you're referring to with the Jones Act. Could you clarify? You know, next quarter I'll study the issue. In the meanwhile, it seems to me there's been a lot of discussion about the benefits of you know, waiving it or eliminating it. I think it is primarily relates to the LNG market. You know, I'm not up to date on the topic, so let's just. Okay. Leave that. I can give a quick comment that the support for the Jones Act and the Vessel Documentation Act is extremely strong in Congress. There are very strong support for the Jones Act from a national security point of view, and that is in support of both the domestic shipping and also for dredging. Every time there is a natural disaster that hits, there are speculators say, you know, oil traders that are speculating in getting dispensations for delivery of LNG and diesel, that happened this time too. This dispensation, there is a system in place for waiving the Jones Act in time of national emergency. We don't think this time was a national emergency, but there was a dispensation given. Okay. Thanks so much, Lasse. Thank you. One moment for our next question, please. Our next question will come from Stephen Hansel from Eclectic Investment Partners. Your line is open. Please check that your line is not on mute. Thank you. Can you speak to the projected economics of the wind farm business relative to other parts of your business? Yeah. I'll take that. Yeah, we have said all along that the margins that we will see on the wind business are at the upper echelons of what we see on our most lucrative capital projects on the dredging side. Our expectation in the early years, and we think we can push it after that, is that we are in the 30%, low- to mid-30% range margins. Again, I think we have expectations that we can continue to push on that. Are there any different competitors that you expect in that business? Yeah. Currently, there are two components to this. Part of the work can be done by international contractors if they go to Canada and pick up the rock there. The other part is strictly Jones Act. Clearly, there is opportunity for competition with the international contractors, such as Boskalis and DEME, Van Oord, Jan De Nul, which are the active contractors in the North Sea. Then on the Jones Act, there is no other rock installation vessel being built. I would like to just make a comment also. In the United States for the next 10 years, the plans are for 30 GW of offshore wind capacity, generation capacity to be installed. In Europe, they're looking at 200 GW, which will put a very high demand on all the international vessels to participate in that market. We do believe that we have a very strong competitive position here in the United States, in the U.S. market. Final question: Did you consider, I think the stock sort of signaled an early warning, but did you consider giving one during the quarter when it became more obvious that numbers were gonna be significantly different from what had been projected? You know, top line we were, I think, fairly in line with consensus. You know, we have been you know, signaling for some time that we would continue to feel a lot of the pressures that we felt in Q2, that those would continue into Q3. You know, I don't know if everybody contemplated and you know, took what we were saying you know, as the truth, but it was something we believed. This was except for that book and burn piece, you know, which again, we really thought we would vessels to work and didn't, you know, again, we knew all these other pressures that we saw were going to continue and, you know, I think we signaled them pretty strongly on the last call that, you know, that this would continue for some time. Okay. Thank you very much. Thank you. I am showing no further questions from our phone lines. I'd now like to turn the conference back over to Tina Baginskis for any 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. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.