Mary Morrissey - Investor Relations Mark Marinko - Chief Financial Officer Jonathan Berger - Chief Executive Officer.

Scott Levine - Imperial Capital Jon Tanwanteng - CJS Securities John Rogers - D.A. Davidson & Co. Richard D'Auteuil - Columbia Funds Series Trust Larry Callahan - Wheelhouse Securities Shu Haur Tang - Morgan Stanley Investment Management Richard Shuster - Boston Partners Financial Group, LLC.

Good day, ladies and gentlemen, and welcome to the Great Lakes Dredge & Dock Corporation Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time.

[Operator Instructions] As a reminder, this conference is being recorded. I’ll now turn the call over to your host Mary Morrissey. Please go ahead..

Thank you and good morning. This is Mary Morrissey, and I welcome to our quarterly conference call. Jon Berger, our Chief Executive Officer; and Mark Marinko, our Chief Financial Officer, will discuss the operational and financial results for the quarter and six months ended June 30, 2015.

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 2014 Form 10-K and subsequent filings.

During this call, we also refer to certain non-GAAP financial measures, including adjusted EBITDA from continuing operations, 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 operated data.

Now I’ll turn the call over to Mark Marinko, our CFO..

Thank you, Mary. And good morning to everyone joining us. I would like to start off the call by speaking at a higher level about the quarter. Overall, senior management is pleased with the company's consolidated results. We expected the second quarter to be a major improvement over the first quarter and it was.

There were some one-time items that we benefited from that I'll point out to you later. Operationally at the segment level the dredging segment delivered a phenomenal quarter and whiles the environmental and remediation segment showed an improvement over the first quarter, it is not where we wanted it to be.

As some of you may have seen in our press release this morning, we continue to expect our fiscal year guidance of adjusted EBITDA in the range of $97 million to $107 million.

For the remainder of the year all segments have secured the vast majority of backlog at margins that we continue to believe will enable us to achieve adjusted EBITDA in the range of $97 million to $107 million.

Moving to the second quarter financial results, total company revenues in the second quarter of 2015 were $239 million which is a 29% increase compared to the second quarter last year and was a result of increased revenues in both of our business segments.

Total company consolidated gross profit was $32 million an increase of 23% compared to the second quarter of 2014. Gross profit margin for the quarter was relatively flat at 14% year-over-year with an improvement of margin in the dredging segment partially offset by a decrease in margin in the environmental segment.

Total company operating income was $14 million for the quarter up from operating income of $10 million from the prior year quarter with an increase in dredging offset by a loss in the environmental and remediation segment. I’ll now walk through our results by segments so you can get a better understanding of what is driving our consolidated results.

The dredging segments revenue was up 21% in the current year quarter at $190 million with higher foreign, domestic capital and maintenance dredging partially offset by lower coastal protection and rivers & lakes dredging revenue.

Dredging’s gross margin profit improved to 16% from 14% benefiting from strong contract margin on some of our dredging projects and improve fleet utilization and therefore better fixed cost coverage.

Operating income increased to $18 million for the quarter a 65% increase from the same period in the prior year driven primarily by the gross profit margin improvement. Our environmental remediation segments revenue increased 70% to $50 million for the second quarter primarily driven by the inclusion of Magnus.

As a reminder, we acquired Magnus in November of 2014. The segments gross profit was 4% in the second quarter 2015 compared to 12% in the second quarter and the prior year. With increased overhead mainly as a result of the Magnus acquisition and project losses most of which are due to pending change orders and claims impacting results.

The environmental remediation segment reported operating loss of $4 million compared to a loss of just under $1 million in the second quarter of 2014 with the lower gross profit being the primary driver. The second quarter operating profit results were impacted by two one-time items.

First, as a reminder when we acquired Magnus the purchase price included cash at close, a seller note and a potential earn-out. Due to our current expectation that Magnus will be unable to meet performance targets set forth in the note, we reduce the amount owed on it by $7 million. This reduction had a positive impact on G&A.

As of June 30, the note has been fully written-off. Second, we recorded a goodwill impairment charge of $2.8 million related to our Terra Contracting Services business. Project overruns due to a change in conditions totaled $4 million during the second quarter.

In some cases these projects has been affected by unforeseen circumstances out of our control. For example, archaeological remains were discovered on a significant levy project in California delaying the project. And the mine reclamation project in Washington State was delayed due to later than anticipated snowmelt.

Just this past weekend the same project site had to be evacuated due to the Wolverine forest fire. The forest fires not reached the project site, but due to the remoteness of this mine the fire was approaching the one evacuation route.

At this time we are not able to estimate the length of delay and an extensive delay has not been factored into our forecasts. In the situations where we can we are vigorously working with our customers to recover the amounts from the outstanding claims and change orders.

Additionally, we are moving to improve the financial results of the E&R segment and we are finalizing a plan to materially reduce costs. Some cost reduction measures have already been implemented and will have an impact in 2015, but the full benefit of our cost reduction initiatives will be realized in 2016.

Moving to the balance sheet at June 30, 2015 we are just under $15 million in cash on our balance sheet and had drawn $18 million on our revolver.

Total CapEx for the quarter was just under $13 million with approximately $5 million for the ATB during the second quarter and the remainder spent on maintaining our fleet and other land equipment additions. To date we have spent $68 million on the ATB.

Turning to bid results, domestic dredging bid market for the second quarter of 2015 was $201 million which is about the same as the second quarter of 2014. This year's bidding market included the $77 million Shell Island West coastal restoration that Great Lakes was awarded during the second quarter.

In total the company won 60% of the overall domestic dredging bid market during the second quarter of 2015 which is above our prior three-year average of 43% and it’s mainly due to the $77 million Shell Island West award.

Please remember that variability and contract wins from quarter-to-quarter is not unusual and the win rate from one quarter is not indicative of the win rate the company is likely to achieve for the full-year.

During the second quarter, Great Lakes won 100% or $94 million of the capital projects awarded, 20% or $6 million of the coastal protection projects awarded, 28% or $21 million of the maintenance projects awarded and none of the rivers and lakes projects awarded.

Contract to dredging backlog at June 30, 2015 totaled $602 million compared to backlog at December 31, 2014 of $594 million. The environmental remediation segments backlog was $149 million at June 30, 2015 a $74 million increase compared to the year-end backlog.

Now, I’ll turn the call over to Jon Berger, who will discuss some of the results for the quarter as well as provide an update on some of the broader market drivers that may affect your business moving forward..

Thank you Mark, and good morning everybody. Thank you for joining us. We are quite pleased with our dredging segments project execution and results both domestically and internationally during the second quarter. Domestically as anticipated we began working on several of the Sandy-related coastal protection projects on East Coast.

In July, we were able to take some of our shareholders to visit a beach project in New Jersey that was decimated by Hurricane Sandy, the Avalon beach project. This was a $6 million project funded by the City of Avalon.

Our shareholders were able to witness firsthand the complexity of dredging projects for the dredge at an offshore borrow site at end also see the beach operation where sand was being pumped to widen the existing beach. One of our hydraulic dredges, the Illinois completed this project.

At a different coastal protection project in New Jersey and some of you maybe aware. Our dredge Liberty Island experienced an engine failure early in the second quarter that required the dredged to be moved to a shipyard in Norfolk, Virginia for repairs.

Given the breath of our fleet and the complexity of the Sandy projects that have been awarded, we have been able to address this unforeseen circumstance in stride. We do not expect this downtime to materially impact our results for the year.

I want to take a moment to commend our dredging teams ability to successfully minimize the impact of this engine failure. The more recent issue at the end of July that I know some of you saw in the news related to a problem with our gearbox bearing that needed to be replaced.

We do not anticipate additional problems with the dredged engine and we expect the dredge to be back in service next week. Speaking in general regarding our Sandy and other Coastal protection projects on the East Coast they’re going well and we are on track or ahead of our schedule on the majority of these projects.

Please do not forget there's flexibility and the timing of completing the Sandy projects and we are utilizing this flexibility to mange our fleet, our current workload and backlog and work out a bit. We continue to finalize our work on the PortMiami deepening project during the second quarter.

The project has continued progress well and we are scheduled to complete the work during the third quarter and this includes three additional scope modifications. Internationally as we’ve mentioned during the last call Suez project has been going exceptionally well and we’ve completed our portion of the dredging project well ahead of schedule.

We are in the process of D mobilizing our equipment from the site. In fact later this week we will be participating in some of the festivities that are planning to celebrate the opening of the new Suez Canal and East Hidd. I will be finding out right after school to represent GLDD date on this historic project.

Regarding the bidding market it was a bit lighter than expected in the second quarter with a modesty decrease in letting as compare to the first quarter. But with the increase budget in 2015 the core has been able to get more projects on it.

As we told you previously the State of Georgia committed its own funding to get the Savannah Harbor deepening project started. The Panama Canal expansion project is expected to be completed in early 2016 and we expect to see other ports along the East Coast pursue deepening projects the next few years. Let's look ahead to the bidding opportunities.

We expect bidding opportunities to accelerate in the third quarter. We are estimating a significant number of projects at the moment and will be bidding on a mix of potential projects along the Eastern Seaboard and the Gulf Coast.

In the Gulf as Mark mentioned we were awarded the $77 million Shell Island West project that is being funded with some of the early nerd of money that BP satisfied. This project will utilize the Empire pipeline that we installed several years ago that worked on the Scofield Island and the Shell Island East Coastal restoration projects.

Having this pipeline will play a critical role and executing this project providing a cost saving from state and enabling us to efficiently execute on this and the predecessor projects. Work will begin this fall and is expected to be complete by the third quarter of 2016 at which time the pipeline will be removed.

Longer-term we are very pleased that BP have agreed to a negotiated settlement in its case regarding the Deepwater Horizon oil spill. It is early in the process and many details need to be worked out, but this $18 billion settlement marks a major milestone. At this stage, it appears that the money will be paid out of many years.

The Louisiana already have a master plan for rebuilding and restoring its coast and many other states in the region are developing similar plan. Ultimately this is a positive development for the dredging and the environmental contract the industry.

Despite low prices in the energy market certain of the LNG projects in the Gulf that we've been tracking still appear to be moving forward. On the East Coast we anticipates seeing additional Sandy-related Coastal protection work to be tendered in the second half of the year and in 2016.

These projects are funded by the $5 billion Sandy appropriations not to be Army Corps budget approximately $3 billion of these appropriations remain. Internationally with Suez project wrapping up early we continue to actively pursue several opportunities in the Gulf region with several opportunities in the negotiation phase.

In Washington DC despite the great news early this year that both the house and the Senate approved appropriations fill with strong support for the Army Corps budget and higher spending for the Harbor Maintenance Trust Fund it does appear that Congress was not going to pass a budget on time this year.

So therefore we expect a continuing resolution, which puts the Corps budget back at the previous year level. We're disappointed with [indiscernible] hopeful then omnibus budget is passed soon after the continuing resolution takes the step. At this point we don't know when it may be passed.

Regardless of the continuing resolution we remain encouraged at the ongoing high-level of discussion and knowledge of the Harbor Maintenance Trust Fund in Congress.

This is a very important initiative that had not only impacts the regions closest to ports and waterways, but the entire country since the majority of the United States foreign trade flows through our ports..

We are committed to executing these measures to kind of timely manner so the costs for this segment are in line with our expected revenues that we generate. We continue to have positive expectations for the environmental remediation segment and believe that will be a valuable asset for the company.

In conclusion, we’d like to take the opportunity to thank our stakeholders for your dedication and commitment and I'd like to reiterate our steadfast commitment to delivering a strong performance for the rest of the year. With that, we’d like to open it up for questions..

Thank you. [Operator Instructions] Our first question comes from Scott Levine with Imperial Capital. Your line is open..

Hey, good morning guys..

Hey, Scott. .

So I guess just firstly with respect to the award phase you guys are anticipating for the back half of the year, bookings have been good in dredging first half you guys have had a higher win rate than usual, but the bid markets kind of been okay. Given your expectations for the Army Corps and some of the budget issues you highlighted.

I mean in generally speaking you are expecting a more active bid market in the back half and if so to what extent?.

Certainly we are expecting more active bid market in the second half. Our estimating team is working over time on a significant number of projects to bid right now. The overall level of activity certainly will be higher, but I’m not sure I can give you an exact number of where it will be.

But there is a good bit of work out there; there is a couple of negotiated situations certainly with some private clients that we are looking at. And there are some chunky projects that hopefully will come out either late this year or the early part of next year along the coast both the East Coast and in the Gulf..

Okay, so maybe a more of a biased toward coastal than not in – maybe a little bit more specifics around the international and some of these Mid-East projects and we see a pick up there and your degree of confidence in that happening for you?.

Yes, we’ve seen upticks internationally also and as we said we are in negotiations on a couple of those. Internationally, as you know is not as easy to market to predict and until we get it in the boat. We are going to have to be cautious is just because as you know it’s a little bit more difficult market to predict there..

Got it.

And turning to remediation just a little bit more clarity where there any new problem projects that kind of arose or the charges on projects that were in either lost position or maybe troubled to begin with and in your view are these charges kind of more indicative of kind of a normal nature of the business and its inherent lumpiness or is it proven to be a bit more challenging than you anticipated maybe prior to the Magnus acquisition.

A little bit more color on your thoughts on just the nature of some of these issues and whether we can expect improvement and when?.

Yes. So this is Mark. We did have a mix of some projects smaller fell into losses this quarter due to changing conditions, so we filed the change orders or claims related to that.

One that was a little more material it’s not a changing conditions, but it did relate to that archaeological find with the Indian barrel ground, we’re just delayed longer than we anticipated. So not an execution issue, but it's a timing issue that pushed – that will push that project into 2016.

We are mobilized in working there now so delay stop, but it did push some of it to 2016. So you see a mix of both, but yes definitely you have more change orders and claims than you would historically see in our dredging segment..

I mean and I guess I’d just ask you is that kind of a normal nature of this business or there is something that you can do with regard to your contracting strategy to maybe mitigate some of the issue here or is it not that simple?.

No I think the answer is both I think clearly I mean we’ve dredged when you compared to dredging we dredged the vast majority of these locations many, many times overall company history and there is a more clear path of how you contract with the Army Corps. And then it is in most of these environmental remediation projects we are starting from new.

And I think there is a combination, we can do and one of the things we hope to do for most of time is to bring more sophisticated contracting to place with our clients then the individual companies were able to do in the past and we have to manage them better.

So I think it is a combination as Mark said I think the two big projects that got delayed, there is standby time that covers our kind of out-of-pocket costs, it doesn't provide profit, it doesn't cover all your overhead.

And both of those are just kind of unforeseen, archaeological finds and then the slowness to get on that project started because of the late winter. So the long answer to a short question is it’s a little bit above..

Got it. One last one if I may then on the G&A.

So I'm hearing you correctly the $7 million write-off of the note receivables embedded with net $50.5 million numbers, so it’s a normalized number in the low-20s there then or is there I might not reading that right?.

No, that’s correct..

And is that a decent number to think about as a go forward number, do you think you get some efficiency as you integrate E&R and given some of the other cost issue – cost projects in terms of efficiencies you are working on now?.

That's correct, that's our plan..

Got it. Great, thank you..

Thank you..

Our next question comes from Jon Tanwanteng..

Good morning guys, thanks for taking the questions.

Mark, what’s the source of the higher level of depreciation and amortization a quarter and what’s the correct run rate going forwards?.

Pardon me. .

Yes, I think the higher revenue we told, yes we told….

Yes, what we do is I apologize. What we do is we do match our expenses to revenue, our kind of plant expenses if so if you had higher revenues in the first half of the year, you’ll move some of that depreciation forward.

So in this quarter for example with dredging had much higher revenue than in the first quarter we pull some of that depreciation forward to match with the revenue. So it's not straight lined across the quarters..

Gotcha. That’s helpful, thank you.

Okay, and in the Middle East there is a potential rent deal open any new opportunities for you, is that a market that you getting it to?.

It’s too early for us to tell, but there is some other government regulations that probably make it difficult for us to get in there. It’s not full lifting if I understand it correctly all the sanctions and things like that. So I don't per see that to be incredible market for us in the near-term..

Okay, and just with regards to the BP funds.

How can we quantify the incremental opportunity there maybe in the near-term? What portion of the projects that you could directly bid on?.

Yes, all we need a little bit more clarity there. There's a significant amount of work talked about specifically in Louisiana that we stated that as a very detailed plan. The other states are developing those if you read the popular press a lot of that – significant amount of that revenue will come to dredging.

I've always used that rule of thumb let’s just say 50% of it comes to work that we can bid on, over sometimes so it’s going to be meaningful.

I will say in Louisiana I’ve heard some early discussions of them bonding over the cash flows that come out over 15 years to maybe accelerate those things over a shorter period of time which would tend to make sense if you think about it for a politician standpoint.

They doesn't really do many good to spend money in years 10 to 15 because they are going to be long gone from being governor and have expectations that’s known somewhere else.

So in Louisiana which is probably farthest to long in their Coastal protection plans there's been some discussions of trying to figure out a way using the capital markets to accelerate some of that. But I think it's still very early until the judge approves the settlement and the cash flows are fully defined before we have a full picture..

Okay thanks.

And then finally, can you tally up the total amount of potential change orders and outstanding claims that you have pending I guess [you’ve] potential to realize a little bit?.

Yes. The total is about $7 million right now, you remember some of that is would be negotiated I don't think you’d see the entire potential of $7 million there..

Okay and is that all operating profit if it comes through..

Yes..

Okay. Great thank you very much guys..

Yes..

Thank you..

Your next question comes from John Rogers with D.A. Davidson. Your line is open..

Hi, good morning..

Good morning, John..

A couple of just follow-up things first of all, so total depreciation for the year you’re looking at the low-50s.

Is that right?.

Yes..

Okay. And Mark you went through these numbers faster than I could get them.

But can you go through the capital projects or the different segments of dredging the bid markets and the percentages that you won?.

Sure, sure so for the second quarter we won 100% or $94 million of the capital projects awarded. We won 20% or $6 million of the Coastal Protection projects awarded..

Okay..

We won 28% or $21 million of the maintenance projects awarded. And then as I stated zero of the rivers and lakes projects awarded..

Okay. And then I guess John just on the environmental business at this point given your experience is here. I mean I guess sort of is there anything specifically that you are doing with the organization in terms of bidding the strategies or market focus that to get this back on track. When you’ve talked about it in the past and I know..

I mean we’re doing it exactly a lot, some of which I am reluctant to share because it involves things that are in the middle. But the answer is yes, we’re certainly focused on where we want to be, and where this business should be in the next couple of years. So that involves opportunities where we can cross-sell on to the water.

Where we have great experiences both from some of the predecessor companies and our own experiences we like the market again in the energy sector, and we’ve in the process of finalizing it is not onboard a specific individual to lead our charge into utilities and energy sector.

The individual has vast experience that’s a client that you know the type of client that we want. It’s a good client it’s a generally have significant size projects. And so we are molding the business into what we believe, we have to do, and it some work to take two individual businesses that were growing very fast and put them together.

And we spent a lot of time as a senior management team in doing that and as Mark says we think – the fruits the label come out hope in the second half of the year in 2016..

Okay so we should see some of that this year..

Correct..

Okay. And up to almost $150 million in backlog in that segment you have now.

Can you give us a sense of how much of that is work that needs to be finished off now at either very lower or no margin?.

Yes, just you know that the biggest individual chunk of that probably 35% to 40% is a timing materials project. And as you know basically it’s one where we don't take significant risk, right. It’s a time and materials plus margin so we feel very good about that part of it.

And how much is left to be done that is I don't think that’s a significant amount to you. That it would be lower zero margins of the backlog..

No..

No..

No, I don’t think that is any of it or very….

It would be little, but not much..

Little, but very small amount, John..

Okay. Thanks for the help..

Yes..

Our next question comes from Rick D'Auteuil with Columbia. Your line is open..

Yes, just same line of questioning.

In the quarter were there any resolutions of change orders from the prior periods?.

No..

Are there any short-term resolutions expected on any of these change orders?.

Yes..

Yes, there is one that were going to a negotiating session in the next few weeks that we expect will result in a resolution..

Okay, of the $7 million how much are on the path of litigation as opposed to negotiated settlements?.

Yes, I mean everyone involved, how do you get some one on the table. I don't believe that much is ultimately ends up in litigation through the process, but it’s a dance that has to be done. So at the end of the day I think our historical experience is that most of this never goes through to full litigation..

Okay, so it’s a thought that between now and year-end of vast majority of that $7 million will have been negotiated.

I know you're not going to get $7 million, but will have been negotiated and resolved?.

I would say it’s at least half, but it’s hard to us to predict with our own different phases with different types of clients..

All right.

And again that would be a 100% margin as it comes through right?.

That’s Correct..

Yes, this is accounting policy as you all know we take all the costs and so therefore it just really just drops the bottom line..

A quarter ago you talked about the E&R business needing to diversify geographically and you guys were pursuing better weather states to explore new business, is any progress along those lines..

Yes, once we like to call it the winter work right, we want to win – their slowest time and whether it’s Terra or Magnus. So recently we won a smaller job, but its winter work. So….

We’re getting a big project in Miami right in the near-term and we’ve also what I guess the nice ways that we traded out some assets if you will marketing assets that are now concentrated in the South..

Okay..

So we do expect we’ll see some fruitfulness in the next six months, yes..

Okay. I don't know if history has this modeled right, but it probably when you say the third quarter is your peak quarter and I’d encourage you to at least review how the street is modeling it just because its with all the moving parts in the Magnus acquisition really history doesn’t help us much here anymore.

So we originally thinking that this was going to be an okay business and it’s not been and I don't know if it’s not been because of the seasonality and some unusual events or it’s not been because you made a mistake and you made acquisitions that don't help the overall model.

But again to the extent that these are good businesses still and they are going to start to show that in Q3 especially, yes I think it’s important to get people on the right phase if they are off phase on that..

Yes, agreed..

Okay, thank you..

[Operator Instructions] Our next question comes from Larry Callahan with Wheelhouse Securities. Your line is open..

Yes, hi..

Good morning..

In line with the previous line of questioning.

Can you give an example of what would be considered a positive surprise in environmental contracting? I think we’ve seen a number of negative surprises so maybe is it possible that competition Mike it’s from point diminished for these projects were the margin might build in some of these regularly unforeseen events? Thanks..

Yes, part of our strategy Larry is to move to the type of client that I think provides more steady responsible contracting and a good example of that would be the utilities industry.

Utilities industry and the energy industry has a significant amount of environmental work ahead of them and I think if you look that 2013 and 2012 and part of 2014 the Ambridge contracts that we did where excellent work went well I think we executed them above the expectation and we perform well and it was a very good client and we continue to have that client and we expect them to be a client that we will have for a long time.

I think we start looking at the utilities industry and all the coal ash work that is out there that plays very well to our combined skills, their companies that are looking for high level well-capitalized larger contractors then some of this work that you end up doing for smaller clients or developers and so those are places where we have to move this business to and I think when you see that you'll see responsible contracting with a good counterparty a long-term for us.

So I hope that answered your question..

Mark, could you give an example of how your dredging business ties in with environmental projects kind of a concrete example?.

Sure, I’ll give you a couple of examples. Right now we're working on Lake Decatur dredging project. The disposal facility which to be on land we were pumping the dredge soils to is being managed and worked on by our higher contracting business. When we did the Ambridge is an example.

There was dredging, we took one of our small rivers and lakes dredges that dredged and then took the materials to a site along the side of the river, couple sites and we deepwater in process that dredge material and then took it to disposal facilities. I think you’ll continue to see projects like that and large-scale projects.

Many years ago before we owned it our rivers and lakes division worked on the TVA [Ashton Spill] in Tennessee. And we expect that our dredging skills can be valuable in working on some of these Ashton closures potentially that would be joint projects.

A lot of the environmental dredging has upland processing of these materials and those are things that are environmental people do and do well and significant amount of the environmental work that certainly carries on over the years is on the on the water.

And the joint knowledge skills and expertise and equipment that we might set in our rivers and lakes are in our engineering department of our dredging department played very well and working together and bidding together and providing that technology knowledge. So I hope that’s coupled a good concrete examples for you..

Yes, does this BP related or Gulf Coast work involved much of that?.

Yes. I think certainly be the BP work you are going to find over some length of time there will be environmental work there. I think there could be some levy work that certainly manage those a significant amount of levy work.

The second-largest levy system I guess in flood control areas Sacramento and they're probably the dominant contractor in doing levy repair work there. I think with all the money coming into Louisiana from BP I think there will be that type of work.

So the answer is yes, I think long-term ones that they start finalizing some of their plans I think there will be environmental on landslide work that our environmental guys will be chasing..

That’s very helpful. Thanks a lot..

Absolutely, Larry..

Our next question comes from Shu Haur Tang with MSIM. Your line is open..

Good morning, guys..

Good morning..

Q1 you guided – gave a little bit guidance in terms of capitalization in terms of your senior notes and you mentioned that you might take a look in fall. Is this something still on the table, could you talk a little bit or give some update on that? Thank you..

Yes. And Mark will give you details, but clearly our notes have a step down at the end of January of 2015 and 2016. So we have been modeling and looking at – is it a right time to refinance them out with the low interest rates and our notes trading above par.

So we are looking at just redoing our capital structure, just take advantage of rates and timing, but our notes my guess is that it would probably be a first quarter event of 2016..

Jon is right, there's a – the step down in end of January is 101 in change and then there is another step down at far at the end of January 2017. So we’ll do the math and look at the rates to determine what the best decision is moving forward..

Sounds good. Thank you..

Thank you..

Our next question comes from John Rogers with D.A. Davidson. Your line is open..

Hi, just one follow-up. Mark you talked about the depreciation phasing that you tied out revenue.

The second – the lower depreciation levels expected for the second half of the year should we think about or tie that to expected dredging revenue based on your work schedules?.

Right. So if you think of matching the revenue and expense, it’s actually – we have a few additions remember during the year as well. So it actually knowing the second half of the year is if we can do the math to get to $97 million to $107 million of EBITDA it will look similar to the second quarter results on average.

So there is – so it’ll be fairly similar with the little step up from just additions this year..

Okay, they are not just the dredging business right?.

Well, generally I speak overall, but it is really the dredging is the main – its 90% of the capital spend so it really is driven by dredging..

Okay, all right.

So we’re not assuming the same drags in the environment business and stable on the dredging?.

That’s correct..

Okay, great. Thanks for the clarification..

Sure..

Our next question comes from Richard Shuster with Boston Partners. Your line is open..

Thanks guys.

I got a bunch of questions on the E&R, first one is this mean that you are going to – I assume you are going to make money in the third quarter in E&R?.

Yes..

Okay.

And what is the book value of that business at this point?.

I don’t have that….

Rough, you don’t need an exact number I mean this has been such a problem business I’m sure you think about it all the time..

Yes, so about 80, I think the carrying value is about $80 million..

Okay, and so you spend roughly $80 million and in the last two years what is the combined losses of this business?.

The last two years I mean again I don’t have the rate in front of me I have to do the math. .

You must have some and this has been a real problem business I’m sure you’ll think about this all the time..

So last....

What’s the last year loss?.

Yes, operating income was I just don’t have….

You’ll come back to me later..

Yes..

This year so far we’ve lost $20 million in this business?.

Operating income year-to-date is $20 million….

So it was $20 million.

Okay, so when you have the $97 million to $107 million, when you forecast that what we forecasting for E&R in the second half when you’re forecasting the $97 million to $107 million?.

We don’t give out publicly our EBITDA by segments..

But presumably if we didn’t have E&R that number would be materially higher..

Correct..

Okay. Couple of other questions.

In the 334 for EBITDA you show in the quarter I assume we should take out the seven for normalized number and gets a 264 that’s how that works?.

Right..

And lost a 41 in environmental that doesn’t include the seven..

No it does..

So that was would have been 11?.

Right and it also includes the how $3 million for the goodwill impairment gaining that those two well..

So would have been – so the actual loss would have been eight in the second quarter?.

Right..

Wow, okay. If you would sell this business right, I mean it has been such a disaster. If you would have sell this business today what do you think you get? Do you think you get book..

Fair enough, good question..

What’s your guess? I mean it has been such a massive to try I mean we’re sitting where the stock, where the enterprise value I don’t know 700 where the other business is producing looks like a 120 and this has got some value I mean its clearly getting a massive negative value right now in the stock market.

But you would get I assume you get somewhere close to book right..

I don’t think I can answer than on the phone call Rich. Let’s take it offline and we can go through it but I just don’t think that we should be answering that question..

One last question along these lines….

Yes..

How much more patients do you have with this business?.

Yes, I mean we just bought Magnus the structure of the transaction work exactly how we expected it to that were, we’re in the business with a very modest multiple and we are doing all the things we expected to do. We are doing all the things that we talked about with you doing to get it where we want to be.

If we aren’t comfortable with this we will move on it, we’ve been spending a lot of time, a lot of changes have been made to put in a position to speed, and I will tell you that at the end of the day Magnus will do okay this year and based on the purchase price we paid a very modest price. So I’m not ready to throw in to tally it on it..

Okay, thank you. End of Q&A.

I am showing no further questions. I will now turn the call back over to Mary Morrissey for closing remarks..

And we appreciate the support of our shareholders, employees and business partners. And we thank you for joining us the discussion this morning about our business and initiatives and industry. We look forward to speaking with you during our next earnings discussion in November. Thank you..

Thank you. Ladies and gentlemen that does conclude today’s conference. You may all disconnect. And everyone have a great day..