14.

Subsidiary guarantors

The Company’s long-term debt at September 30, 2015 includes $275,000 of 7.375% senior notes due February 1, 2019. The Company’s obligations under these senior unsecured notes are guaranteed by the Company’s 100% owned domestic subsidiaries. Such guarantees are full, unconditional and joint and several.

The following supplemental financial information sets forth for the Company’s subsidiary guarantors (on a combined basis), the Company’s non-guarantor subsidiaries (on a combined basis) and Great Lakes Dredge & Dock Corporation, exclusive of its subsidiaries (“GLDD Corporation”):

(i)

balance sheets as of September 30, 2015 and December 31, 2014;

(ii)

statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014; and

(iii)

statements of cash flows for the nine months ended September 30, 2015 and 2014.

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF SEPTEMBER 30, 2015
(In thousands)

ASSETS	Subsidiary Guarantors			Non-Guarantor Subsidiaries		GLDD Corporation		Eliminations			Consolidated Totals
CURRENT ASSETS:
Cash and cash equivalents	$	8,814		$	605	$	2	$	—		$	9,421
Accounts receivable — net		142,042			1,842		—		—			143,884
Contract revenues in excess of billings		63,882			2,877		—		—			66,759
Inventories		37,250			—		—		—			37,250
Prepaid expenses and other current assets		60,735			339		15,797		—			76,871
Total current assets		312,723			5,663		15,799		—			334,185

PROPERTY AND EQUIPMENT—Net		423,140			17		—		—			423,157
GOODWILL AND OTHER INTANGIBLE ASSETS—Net		86,900			—		—		—			86,900
INVENTORIES — Noncurrent		37,508			—		—		—			37,508
INVESTMENTS IN JOINT VENTURES		12,319			—		—		—			12,319
RECEIVABLES FROM AFFILIATES		14,907			3,449		54,028		(72,384	)		—
INVESTMENTS IN SUBSIDIARIES		3,684			—		638,506		(642,190	)		—
OTHER		7,981			3		3,918		—			11,902
TOTAL	$	899,162		$	9,132	$	712,251	$	(714,574	)	$	905,971

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	109,019		$	558	$	384	$	—		$	109,961
Accrued expenses		59,195			596		4,187		—			63,978
Billings in excess of contract revenues		6,296			155		—		—			6,451
Current portion of long term debt		1,416			—		6,953		—			8,369
Total current liabilities		175,926			1,309		11,524		—			188,759

7 3/8% SENIOR NOTES		—			—		274,902		—			274,902
REVOLVING CREDIT FACILITY		—			—		28,000		—			28,000
NOTES PAYABLE		356			—		51,752		—			52,108
DEFERRED INCOME TAXES		(521	)		—		89,776		—			89,255
PAYABLES TO AFFILIATES		67,685			924		3,775		(72,384	)		—
OTHER		20,425			—		439		—			20,864
Total liabilities		263,871			2,233		460,168		(72,384	)		653,888

TOTAL EQUITY		635,291			6,899		252,083		(642,190	)		252,083
TOTAL	$	899,162		$	9,132	$	712,251	$	(714,574	)	$	905,971

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2014
(In thousands)

ASSETS	Subsidiary Guarantors		Non-Guarantor Subsidiaries		GLDD Corporation		Eliminations			Consolidated Totals
CURRENT ASSETS:
Cash and cash equivalents	$	41,724	$	663	$	2	$	—		$	42,389
Accounts receivable — net		115,739		355		—		(2,906	)		113,188
Receivables from affiliates		152,822		3,673		55,805		(212,300	)		—
Contract revenues in excess of billings		78,631		4,236		—		(310	)		82,557
Inventories		34,735		—		—		—			34,735
Prepaid expenses and other current assets		54,327		431		14,617		—			69,375
Total current assets		477,978		9,358		70,424		(215,516	)		342,244

PROPERTY AND EQUIPMENT—Net		399,421		24		—		—			399,445
GOODWILL AND OTHER INTANGIBLE ASSETS—Net		95,289		—		—		—			95,289
INVENTORIES — Noncurrent		36,262		—		—		—			36,262
INVESTMENTS IN JOINT VENTURES		7,889		—		—		—			7,889
INVESTMENTS IN SUBSIDIARIES		3,757		—		619,220		(622,977	)		—
OTHER		7,135		3		4,967		—			12,105
TOTAL	$	1,027,731	$	9,385	$	694,611	$	(838,493	)	$	893,234

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	121,282	$	1,389	$	516	$	(3,216	)	$	119,971
Payables to affiliates		196,829		403		15,068		(212,300	)		—
Accrued expenses		60,415		659		8,967		—			70,041
Billings in excess of contract revenues		4,639		—		—		—			4,639
Current portion of long term debt		859		—		5,000		—			5,859
Total current liabilities		384,024		2,451		29,551		(215,516	)		200,510

7 3/8% SENIOR NOTES		—		—		274,880		—			274,880
NOTE PAYABLE		7,553		—		41,944		—			49,497
DEFERRED INCOME TAXES		172		—		91,835		—			92,007
OTHER		19,939		—		438		—			20,377
Total liabilities		411,688		2,451		438,648		(215,516	)		637,271

TOTAL EQUITY		616,043		6,934		255,963		(622,977	)		255,963
TOTAL	$	1,027,731	$	9,385	$	694,611	$	(838,493	)	$	893,234

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015
(In thousands)

	Subsidiary Guarantors			Non-Guarantor Subsidiaries			GLDD Corporation			Eliminations			Consolidated Totals

Contract revenues	$	216,993		$	4,402		$	—		$	(593	)	$	220,802
Costs of contract revenues		(193,955	)		(3,355	)		—			593			(196,717	)
Gross profit		23,038			1,047			—			—			24,085

OPERATING EXPENSES:
General and administrative expenses		15,277			—			—			—			15,277
Impairment of goodwill		—			—			—			—			—
Gain on sale of assets—net		(884	)		—			—			—			(884	)
Operating income		8,645			1,047			—			—			9,692

Interest expense—net		(90	)		—			(7,203	)		—			(7,293	)
Equity in earnings of subsidiaries		2			—			8,144			(8,146	)		—
Equity in loss of joint ventures		(2,051	)		—			—			—			(2,051	)
Other expense		706			—			—			—			706


Income before income taxes		7,212			1,047			941			(8,146	)		1,054

Income tax (provision) benefit		7			(120	)		(629	)		—			(742	)

Net income	$	7,219		$	927			312			(8,146	)		312


Comprehensive income (loss)	$	7,219		$	288		$	(327	)	$	(7,507	)	$	(327	)

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014
(In thousands)

	Subsidiary Guarantors			Non-Guarantor Subsidiaries			GLDD Corporation			Eliminations			Consolidated Totals

Contract revenues	$	198,934		$	3,264		$	—		$	—		$	202,198
Costs of contract revenues		(170,911	)		(6,828	)		—			—			(177,739	)
Gross profit		28,023			(3,564	)		—			—			24,459

OPERATING EXPENSES:
General and administrative expenses		15,988			1			73			—			16,062
Loss on sale of assets—net		390			—			—			—			390
Operating income (loss)		11,645			(3,565	)		(73	)		—			8,007

Interest expense—net		(60	)		—			(4,642	)		—			(4,702	)
Equity in earnings of subsidiaries		54			—			3,316			(3,370	)		—
Equity in loss of joint ventures		(5,785	)		—			—			—			(5,785	)
Other expense		384			—			—			—			384

Income from continuing operations before income taxes		6,238			(3,565	)		(1,399	)		(3,370	)		(2,096	)

Income tax benefit		697			—			372			—			1,069

Income (loss) from continuing operations		6,935			(3,565	)		(1,027	)		(3,370	)		(1,027	)
Loss from discontinued operations, net of income taxes		(1,059	)		—			(1,059	)		1,059			(1,059	)
Net income (loss)	$	5,876		$	(3,565	)	$	(2,086	)	$	(2,311	)	$	(2,086	)


Comprehensive income (loss)	$	5,707		$	(3,981	)	$	(2,671	)	$	(1,726	)	$	(2,671	)

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015
(In thousands)

	Subsidiary Guarantors			Non-Guarantor Subsidiaries			GLDD Corporation			Eliminations			Consolidated Totals

Contract revenues	$	624,498		$	11,912		$	—		$	(2,174	)	$	634,236
Costs of contract revenues		(558,343	)		(11,013	)		—			2,174			(567,182	)
Gross profit		66,155			899			—			—			67,054

OPERATING EXPENSES:
General and administrative expenses		48,768			—			—			—			48,768
Impairment of goodwill		2,750			—			—			—			2,750
Gain on sale of assets—net		(887	)		—			—			—			(887	)
Operating income		15,524			899			—			—			16,423

Interest expense—net		(349	)		—			(18,141	)		—			(18,490	)
Equity in earnings of subsidiaries		6			—			9,663			(9,669	)		—
Equity in loss of joint ventures		(5,765	)		—			—			—			(5,765	)
Other expense		(346	)		(7	)		—			—			(353	)

Income (loss) before income taxes		9,070			892			(8,478	)		(9,669	)		(8,185	)

Income tax (provision) benefit		7			(300	)		3,124			—			2,831

Net income (loss)	$	9,077		$	592		$	(5,354	)	$	(9,669	)	$	(5,354	)


Comprehensive income (loss)	$	9,077		$	(802	)	$	(6,748	)	$	(8,275	)	$	(6,748	)

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
(In thousands)

	Subsidiary Guarantors			Non-Guarantor Subsidiaries			GLDD Corporation			Eliminations			Consolidated Totals

Contract revenues	$	540,199		$	21,090		$	—		$	—		$	561,289
Costs of contract revenues		(463,718	)		(26,002	)		—			—			(489,720	)
Gross profit		76,481			(4,912	)		—			—			71,569

OPERATING EXPENSES:
General and administrative expenses		49,776			1			73			—			49,850
Loss on sale of assets—net		558			—			—			—			558
Operating income (loss)		26,147			(4,913	)		(73	)		—			21,161

Interest income (expense)—net		91			(261	)		(14,560	)		—			(14,730	)
Equity in earnings (loss) of subsidiaries		(52	)		—			15,915			(15,863	)		—
Equity in loss of joint ventures		(9,063	)		—			—			—			(9,063	)
Gain on bargain purchase acquisition		2,197			—			—			—			2,197
Other income		403			7			—			—			410

Income (loss) from continuing operations before income taxes		19,723			(5,167	)		1,282			(15,863	)		(25	)

Income tax (provision) benefit		1,307			—			(882	)		—			425

Income (loss) from continuing operations		21,030			(5,167	)		400			(15,863	)		400
Loss from discontinued operations, net of income taxes		(9,118	)		(1,343	)		(9,118	)		10,461			(9,118	)
Net income (loss)	$	11,912		$	(6,510	)	$	(8,718	)	$	(5,402	)	$	(8,718	)

Comprehensive income (loss)	$	11,713		$	(6,899	)	$	(9,306	)	$	(4,814	)	$	(9,306	)

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015
(In thousands)

	Subsidiary Guarantors			Non-Guarantor Subsidiaries			GLDD Corporation			Eliminations			Consolidated Totals

OPERATING ACTIVITIES:
Cash provided by (used in) operating activities		15,013			(1,308	)		(17,602	)		—			(3,897	)

INVESTING ACTIVITIES:
Purchases of property and equipment		(53,394	)		—			—			—			(53,394	)
Proceeds from dispositions of property and equipment		1,167			—			—			—			1,167
Net change in accounts with affiliates		(29,059	)		—			(9,839	)		38,898			—
Net cash flows used in investing activities		(81,286	)		—			(9,839	)		38,898			(52,227	)

FINANCING ACTIVITIES:
Deferred financing fees		—			—			(29	)		—			(29	)
Repayments of long term note payable		—			—			(488	)		—			(488	)
Taxes paid on settlement of vested share awards		—			—			(265	)		—			(265	)
Repayments of term loan facility		—			—			(3,750	)		—			(3,750	)
Repayments of equipment debt		(853	)		—			—			—			(853	)
Proceeds from equipment debt		—			—			410			—			410
Net change in accounts with affiliates		17,416			1,355			20,127			(38,898	)		—
Capital contributions		16,800			—			(16,800	)		—			—
Exercise of options and purchases from employee stock plans		—			—			1,356			—			1,356
Excess income tax benefit from share-based compensation		—			—			(13	)		—			(13	)
Treasury stock		—			—			(1,107	)		—			(1,107	)
Borrowings under revolving loans		—			—			146,000			—			146,000
Repayments of revolving loans		—			—			(118,000	)		—			(118,000	)

Net cash flows provided by financing activities		33,363			1,355			27,441			(38,898	)		23,261

Effect of foreign currency exchange rates on cash and cash equivalents		—			(105	)		—			—			(105	)

Net increase (decrease) in cash and cash equivalents		(32,910	)		(58	)		—			—			(32,968	)

Cash and cash equivalents at beginning of period		41,724			663			2			—			42,389

Cash and cash equivalents at end of period	$	8,814		$	605		$	2		$	—		$	9,421

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
(In thousands)

	Subsidiary Guarantors			Non-Guarantor Subsidiaries			GLDD Corporation			Eliminations			Consolidated Totals

OPERATING ACTIVITIES:
Net cash flows provided by (used in) operating activities of continuing operations	$	24,488		$	(3,357	)	$	(5,840	)	$	—		$	15,291
Net cash flows used in operating activities of discontinued operations		(4,000	)		(1,024	)		—			—			(5,024	)
Cash provided by (used in) operating activities		20,488			(4,381	)		(5,840	)		—			10,267

INVESTING ACTIVITIES:
Purchases of property and equipment		(66,433	)		—			—			—			(66,433	)
Proceeds from dispositions of property and equipment		1,614			—			—			—			1,614
Proceeds from vendor performance obligations		(3,100	)		—			—			—			(3,100	)
Payments for acquisitions of businesses		(2,048	)		—			—			—			(2,048	)
Net change in accounts with affiliates		(9,402	)		—			—			9,402			—

Net cash flows used in investing activities of continuing operations		(79,369	)		—			—			9,402			(69,967	)
Net cash flows provided by investing activities of discontinued operations		5,275			—			—			—			5,275
Cash used in investing activities		(74,094	)		—			—			9,402			(64,692	)

FINANCING ACTIVITIES:
Deferred financing fees		—			—			(845	)		—			(845	)
Purchase of noncontrolling interest		—			—			(205	)		—			(205	)
Taxes paid on settlement of vested share awards		—			—			(501	)		—			(501	)
Repayment of equipment debt		(121	)		—			—			—			(121	)
Net change in accounts with affiliates		—			3,595			5,807			(9,402	)		—
Exercise of options and purchases from employee stock plans		—			—			1,542			—			1,542
Excess income tax benefit from share-based compensation		—			—			45			—			45
Borrowings under revolving loans		—			—			105,000			—			105,000
Repayments of revolving loans		—			—			(105,000	)		—			(105,000	)

Cash provided by (used in) financing activities		(121	)		3,595			5,843			(9,402	)		(85	)

Effect of foreign currency exchange rates on cash and cash equivalents		—			260			—			—			260

Net increase (decrease) in cash and cash equivalents		(53,727	)		(526	)		3			—			(54,250	)

Cash and cash equivalents at beginning of period		71,939			3,399			—			—			75,338

Cash and cash equivalents at end of period	$	18,212		$	2,873		$	3		$	—		$	21,088