The following discussion and analysis of our financial condition and results of
operations is based on and should be read in conjunction with our consolidated
financial statements and the accompanying notes beginning on page F-1 of this
Annual Report on Form 10-K. Certain statements made in our discussion may be
forward-looking. Forward-looking statements involve risks and uncertainties and
a number of other factors that could cause actual results or outcomes to differ
materially from our expectations. See "Forward-Looking Statements" at the
beginning of this Annual Report on Form 10-K for additional discussion of some
of these risks and uncertainties. Unless the context requires otherwise, when we
refer to "we", "us" and "our", we are describing Orion Group Holdings, Inc. and
its consolidated subsidiaries.

Overview

Orion Group Holdings, Inc., its subsidiaries and affiliates (hereafter
collectively referred to as the "Company"), provides a broad range of specialty
construction services in the infrastructure, industrial and building sectors of
the continental United States, Alaska, and the Caribbean Basin. The Company's
marine segment services the infrastructure sector through marine transportation
facility construction, marine pipeline construction, marine environmental
structures, dredging of waterways, channels and ports, environmental dredging,
design, and specialty services. Its concrete segment services the building
sector by providing turnkey concrete construction services including pour and
finish, dirt work, layout, forming, rebar, and mesh across the light commercial
structural and other associated business areas. The Company is headquartered in
Houston, Texas with offices throughout its operating areas.

Our contracts are obtained primarily through competitive bidding in response to
"requests for proposals" by federal, state and local agencies and through
negotiation and competitive bidding with private parties and general
contractors. Our bidding activity and strategies are affected by such factors as
our backlog, current utilization of equipment and other resources, job location,
our ability to obtain necessary surety bonds and competitive considerations. The
timing and location of awarded contracts may result in unpredictable
fluctuations in the results of our operations.

Most of our revenue is derived from fixed-price contracts. We generally record
revenue on construction contracts over time, measured by the percentage of
actual contract costs incurred to date to total estimated costs for each
contract. There are a number of factors that can create variability in contract
performance and therefore impact the results of our operations. The most
significant of these include the following:

? the completeness and accuracy of the original offer;

? increases in commodity prices such as concrete, steel and fuel;

? customer delays, work stoppages and other costs due to weather conditions and

environmental restrictions;

? availability and skill level of workers; and

? a change in the availability and proximity of equipment and materials.

All of these factors can have a negative impact on our contract performance,
which can adversely affect the timing of revenue recognition and ultimate
contract profitability. We plan our operations and bidding activity with these
factors in mind and they generally have not had a material adverse impact on the
results of our operations in the past.

2021 summary and 2022 outlook

In 2021, we recorded revenues of $601.4 million, of which $263.9 million was
attributable to our marine segment and the remaining $337.5 million to our
concrete segment. In addition, we ended 2021 with a consolidated backlog of
$590.0 million. Our revenues in 2021 decreased by 15.3% as compared with 2020
and we recorded a net loss of $14.6 million, as compared with net income of
$20.2 million in the prior year.

Looking to 2022, the company continues to focus on developing opportunities in the infrastructure, industrial, and building sectors through organic growth, greenfield expansion, and expansion. opportunities for strategic acquisitions.

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The spread of COVID-19 has impacted the global economy, leaving supply chains
disrupted. As the world uses tactics like "social distancing" and "stay at home
orders" to slow and stop the spread of COVID-19, demand destruction has led to
increased unemployment and to the weakening of consumer confidence. Although to
date the Company hasn't experienced materially negative impacts from COVID-19,
such as widespread project stoppage/cancelations or a slowdown/stoppage of
accounts receivables collections, any delays in the timing of future awards
could create gaps in the Company's project delivery schedule across quarterly
periods.

Federal and State governments have increased spending as part of efforts to
mitigate the impact of COVID-19 on the economy.  The amount and timing of such
spending will be directly impacted by the duration of required efforts to
contain COVID-19 and the severity of the negative impacts created by the virus
and its effect on the economy.

Marine segment

Demand for our marine construction services continues, given our differentiated
capabilities and service offering within the space. We continue to see bid
opportunities to help maintain and expand the infrastructure that facilitates
the movement of goods and people on or over waterways. However, we have some
concerns about the short-term outlook for and are closely monitoring the short
and long-term cruise line capital expenditures as their current demand has been
severely impacted by COVID-19. Further, while we currently see bid opportunities
from our private sector energy-related customers as they expand their marine
facilities related to the storage, transportation and refining of domestically
produced energy, we recognize that the timing of project awards may be impacted
as a result of volatility of oil prices due to COIVD-19 related uncertainties.
Over the long-term, we expect to see bid opportunities in this sector from
petrochemical-related businesses, energy exporters, and liquefied natural gas
facilities. Opportunities from local port authorities will also remain over the
long-term, many of which are related to the widened Panama Canal. Additionally,
bid opportunities related to coastal restoration funded through the Resource and
Ecosystems Sustainability, opportunities under the Tourist Opportunities and
Revived Economies of the Gulf Coast States Act (the "RESTORE Act") may arise
into 2022. We believe our current equipment fleet will allow us to better meet
market demand for projects from both our public and private customers.

Over the long term, we are seeing positive trends in demand for our services in our end markets, including:

? Continuing need to repair and improve deteriorating US marine infrastructure;

? Long-term demand from downstream energy companies will be boosted by

larger capital projects, as well as maintenance intervention works;

Expected increases in cargo volume and future demands of larger vessels

? transiting the Panama Canal will require ports along the Gulf Coast and

Atlantic Coast to expand the port infrastructure and carry out

dredging services;

Job opportunities generated by the reform of water resources and

? Development Act (the “WRRDA Act”) authorizing expenditures for conservation

   and development of the nation's waterways as well as addressing funding
   deficiencies within the Harbor Maintenance Trust Fund;

Renewed focus on coastal rehabilitation along the Gulf Coastspecifically

? through the use of funds from the RESTORE Act based on the fines collected related to the

2010 Gulf of Mexico oil spill;

? Funding for highways and transportation under successor laws to the FAST Act;

? Almost $7 billion federal funding provided by USACE as part of

disaster recovery in Texas; and,

? Potential opportunities related to the federal infrastructure bill.

Concrete Segment

Demand for our concrete sector services continues, although the timing of some new projects may be delayed due to macroeconomic impacts related to COVID-19. We are currently seeing long-term demand for our concrete construction services in the Texas construction industry as Texas’ four major metropolitan areas and expanding suburbs, permanently retain

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their positions as leading destinations for population and business growth.
Population growth throughout our markets continues to drive new distribution
centers, education facilities, office expansion, retail and grocery
establishments, new multi-family housing units, and structural towers for
business, residential or mixed-use purposes.  The diversified Texas economy
provides us with multiple sources of bid opportunities. Additional demand for
concrete services in our markets could be provided by work as part of the
federal infrastructure bill.

Over the long term, we are seeing positive trends in demand for our services in our end markets, including:

?Population growth in the state of Texas driven by company relocations;

?Continued investment in warehousing/distribution space in the Dallas-Fort Worth
Region;

?Transfer of people driven by COVID-19 from city centers to suburban areas;

? Almost $7 billion federal funding provided by USACE as part of

   disaster recovery in Texas; and,

?Potential opportunities related to the federal infrastructure bill.

Consolidated operating results

Backlog information

Our backlog represents our estimate of the revenue we expect to realize from the portion of the contracts that remain to be performed. Given the typical duration of our contracts, which is generally less than one year, our order backlog at any given time is generally only a portion of the revenue we expect to achieve in a twelve month period. We have not been adversely affected by contract cancellations or changes in the past, but we may be in the future, particularly during times of economic uncertainty.

Backlog for the periods ended below is as follows (in millions):

                       December 31, 2021     September 30, 2021       June 30, 2021       March 31, 2021       December 31, 2020
Marine segment        $             376.9    $             379.9    $           170.2    $           154.8    $             202.6
Concrete segment                    213.1                  192.9                224.2                210.0                  236.9
Consolidated          $             590.0    $             572.8    $           394.4    $           364.8    $             439.5

The increase in backlog during the quarter is primarily driven by new jobs we
won. The general trend of declining backlog over the past year through June 2021
is due in significant part to headwinds created by the COVID-19 pandemic in
certain end market sectors, which has slowed the timing of project awards.  We,
however, remain optimistic in our end-markets and in the opportunities that are
emerging across our various marketplaces as evidenced by the $2.6 billion of
quoted bids outstanding at quarter end, of which $138 million we are the
apparent low bidder on or have been awarded contracts subsequent to the end of
the fiscal year ended December 31, 2021.

These estimates are subject to fluctuations based upon the scope of services to
be provided, as well as factors affecting the time required to complete the
project. Backlog is not necessarily indicative of future results. In addition to
our backlog under contract, we also have a substantial number of projects in
negotiation or pending award at any given time.  Delays in decisions on pending
awards also have a negative impact on the timing and amount by which we are able
to increase backlog.

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Income Statement Comparisons

                                                           Year ended December 31,
                                             2021                     2020                    2019
                                       Amount      Percent     Amount      Percent     Amount      Percent

                                                         (dollar amounts in thousands)
Contract revenues                    $  601,360      100.0 %  $ 709,942      100.0 %  $ 708,390      100.0 %

Cost of contract revenues               560,393       93.2 %    625,239    

  88.1 %    644,349       91.0 %
Gross profit                             40,967        6.8 %     84,703       11.9 %     64,041        9.0 %
Selling, general and
administrative expenses                  60,181       10.0 %     65,091        9.3 %     61,012        8.7 %

Amortization of intangible assets         1,521        0.3 %      2,070        0.3 %      2,640        0.4 %
Gain on disposal of assets, net        (11,418)      (2.0)      (9,044)    

 (1.4)      (1,804)      (0.3) %
Operating (loss) income                 (9,317)      (1.5) %     26,586        3.7 %      2,193        0.3 %
Other (expense) income:
Other income                                199          - %        347          - %        771        0.1 %
Interest income                             136          - %        183          - %        353          - %
Interest expense                        (5,076)      (0.8) %    (4,920)      (0.6) %    (6,808)      (0.9) %
Other expense, net                      (4,741)      (0.8) %    (4,390)      (0.6) %    (5,684)      (0.8) %
(Loss) income before income tax
expense                                (14,058)      (2.3) %     22,196        3.1 %    (3,491)      (0.5) %
Income tax expense                          502        0.1 %      1,976        0.3 %      1,868        0.3 %
Net (loss) income                    $ (14,560)      (2.4) %  $  20,220        2.8 %  $ (5,359)      (0.8) %

Year ended December 31, 2021 compared to the year ended December 31, 2020

Contract Revenues. Contract revenues for the year ended December 31, 2021 of
$601.4 million decreased $108.5 million or 15.3% as compared to $709.9 million
in the prior year period. The decrease was primarily driven by a reduction in
project activity compared to the prior year in the marine segment as a result of
reduced and/or delayed bid opportunities due to the continued impacts from COVID
19 on the industries in which we serve.

Gross Profit.  Gross profit was $41.0 million for the year ended December 31,
2021, compared to $84.7 million in the prior year period, a decrease of $43.7
million or 51.6%. Gross profit in the period was 6.8% of total contract revenues
as compared to 11.9% in the prior year period. The decrease in gross profit
dollars and percentage was driven by the decreased activity and volumes which
negatively impacted revenue and contributed to an under recovery of indirect
costs primarily related to decreased labor and equipment utilization. We also
incurred decreased project performance in our concrete segment.

Selling, General and Administrative Expense. Selling, general and administrative
("SG&A") expenses were $60.2 million for the year ended December
31, 2021 compared to $65.1 million in the prior year period, a decrease of $4.9
million or 7.5%. As a percentage of total contract revenues, SG&A
expenses increased from 9.3% to 10.0% primarily as a result of the reduced
revenue noted above. The decrease in SG&A dollars was driven by a decrease in
the current year period related to bonus expense, business development costs
pursuant to timing of project pursuits and awards and travel related costs.

Gain on Disposal of Assets, net. During the year ended December 31, 2021 and
2020, we realized $11.4 million and $9.0 million, respectively, of net gains on
disposal of assets. Included in the current year amount is a net gain of $6.7
million related to the sale of property in Tampa, Florida. See Note 6 in this
form 10-K for a further description of the sale of property. Included in the
prior year amount is a $2.9 million net gain on insurance recoveries.

Other income, net of expenses. Other expenses primarily reflect interest on our borrowings, partially offset by interest income and non-operating gains or losses. Debit interest for the current period of the year included $2.1 million
related to the extinguishment of our term loan and related interest rate swaps.

Income Tax Expense. We recorded tax expense of $0.5 million in the year ended
December 31, 2021, compared to tax expense of $2.0 million in the prior year
period. Our effective tax rate for the year ended December 31, 2021 was (3.6)%,

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which differs from the federal statutory rate of 21% primarily due to the valuation allowance related to the current year net loss.

Year ended December 31, 2020 compared to the year ended December 31, 2019

Contract Revenues. Contract revenues for the year ended December 31, 2020 of
$709.9 million increased approximately 0.2% as compared to $708.4 million in the
prior year period.

Gross Profit.  Gross profit was $84.7 million for the year ended December 31,
2020, compared to $64.0 million in the prior year period, an increase of $20.7
million or 32.3%. Gross profit for the year ended December 31, 2020 was 11.9% of
total contract revenues as compared to 9.0% in the prior year period. The
increase in gross profit dollars and percentage were primarily driven by margin
improvement on projects and efficiencies in labor and equipment  utilization.

Selling, General and Administrative Expense. Selling, general and administrative
("SG&A") expenses were $65.1 million for the year ended December 31, 2020
compared to $61.0 million in the prior year period, an increase of $4.1 million,
or 6.4%. As a percentage of total contract revenues, SG&A expenses increased
from 8.7% to 9.3%. The increase in both dollars and percentage was primarily
attributable to the increased accrual of the annual incentive compensation plan
during the current year period as compared to the prior year period.

Gain on Disposal of Assets, net. During the year ended December 31, 2020, we
realized $6.2 million of net gains on sales of assets and $2.9 million of net
gains on insurance recoveries from involuntary dispositions of assets. This
compared to realizing $1.8 million of net gains on the assets we sold during the
2019 comparative period.

Other income, net of expenses. Other expenses primarily reflect interest on our borrowings, partially offset by interest income and non-operating gains or losses.

Income Tax Expense. We recorded tax expense of $2.0 million for the year ended
December 31, 2020, compared to tax expense of $1.9 million in the prior year
period. Our effective tax rate for the year ended December 31, 2020 was 8.9%,
which differs from the federal statutory rate of 21% primarily due to the
movement in the valuation allowance for current year activity, state income
taxes and the non-deductibility of other permanent items.

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Segment Results

The following table sets forth, for the periods indicated, statements of
operations data by segment, segment revenues as a percentage of consolidated
revenues and segment operating income (loss) as a percentage of segment
revenues.  In connection with the preparation of the financial statements for
the year ended December 31, 2021, the Company has identified and corrected
certain immaterial errors in segment reporting for all periods presented.
Specifically, certain corporate overhead costs previously recorded to the marine
segment as part of operating income (loss) and allocated from the marine segment
to the concrete segment below operating income in the other income (expense)
line have been allocated from the marine segment to the concrete segment as part
of the determination of operating income for each segment. These corrections
resulted in an offsetting change in operating income (loss) for each segment of
$12.9 million and $11.8 million for the years ended December 31, 2020 and
December 31, 2019, respectively.

                                                             Year ended December 31,
                                              2021                     2020                    2019
                                        Amount      Percent     Amount      Percent      Amount      Percent
                                                          (dollar amounts in thousands)
Contract revenues
Marine segment
Public sector                         $  164,636       62.4 %  $ 240,353       61.9 %  $  258,039       69.9 %
Private sector                            99,279       37.6 %    147,820       38.1 %     111,099       30.1 %
Marine segment total                  $  263,915      100.0 %  $ 388,173      100.0 %  $  369,138      100.0 %
Concrete segment
Public sector                         $   14,945        4.4 %  $  41,853       13.0 %  $   49,175       14.5 %
Private sector                           322,500       95.6 %    279,916       87.0 %     290,077       85.5 %
Concrete segment total                $  337,445      100.0 %  $ 321,769      100.0 %  $  339,252      100.0 %
Total                                 $  601,360               $ 709,942               $  708,390

Operating income (loss)
Marine segment                        $    5,760        2.2 %  $  29,815        7.7 %  $   12,841        3.5 %
Concrete segment                        (15,077)      (4.5) %    (3,229)      (1.0) %    (10,648)      (3.1) %
Total                                 $  (9,317)               $  26,586               $    2,193

Year ended December 31, 2021 compared to the year ended December 31, 2020

Marine segment

Revenues for our marine segment for the year ended December 31, 2021 were $263.9
million compared to $388.2 million for the year ended December 31, 2020, a
decrease of $124.3 million, or 32.0%. The decrease was primarily attributable to
a reduction in project activity compared to the prior year period.

Operating income for our marine segment for the year ended December 31, 2021 was
$5.8 million, compared to operating income of $29.8 million for the year ended
December 31, 2020, a decrease of $24.0 million. Excluding the impact of the sale
of property in Tampa, Florida in the current year and the net gain on insurance
recoveries and the recovery on a disputed receivable in the prior year operating
loss was $0.6 million for the year ended December 31, 2021, compared to
operating income of $26.1 million for the year ended December 31, 2020, a
decrease of $26.7 million. This decrease in operating income was primarily due
to the decrease in revenue noted above and related under recovery of indirect
costs as a result of decreased labor and equipment utilization.

Concrete Segment

Revenues for our concrete segment for the year ended December 31, 2021 were
$337.5 million compared to $321.8 million for the year ended December 31, 2020,
an increase of $15.7 million, or 4.9%. This increase resulted from increased
production volumes in the current year period.

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Operating loss for our concrete segment for the year ended December 31, 2021 was
$15.1 million, compared to $3.2 million for the year ended December 31, 2020, an
increase in operating loss of $11.9 million. This increase in operating loss was
primarily due to decreased project performance and lower margins on several
projects during the 2021 period.

Year ended December 31, 2020 compared to the year ended December 31, 2019

Marine segment

Revenues from our marine segment for the year ended December 31, 2020 were $388.2 million compared to $369.1 million for the year ended December 31, 2019an augmentation of $19.1 millioni.e. 5.2%.

Operating income for our marine segment for the year ended December 31, 2020 was
$29.8 million, compared to operating income of $12.8 million for the year ended
December 31, 2019, an increase of $17.0 million. This increase in operating
income included $6.7 million of net gains on disposal of assets. Excluding the
increase in net gains on disposal of assets, net operating income for our marine
segment for the year ended December 31, 2020 was $21.7 million compared to
operating income of $11.5 million for the year ended December 31, 2019, an
increase of $10.2 million. This increase in operating income was primarily due
to project execution related margin improvement and non-direct cost recovery
compared to the prior year period.

Concrete Segment

Revenues from our concrete segment for the year ended December 31, 2020 were
$321.8 million compared to $339.3 million for the year ended December 31, 2019a decrease of $17.5 millioni.e. 5.2%.

Operating loss for our concrete segment for the year ended December 31, 2020 was
$3.2 million, compared to an operating loss of $10.6 million for the year ended
December 31, 2019, a decrease in operating loss of $7.4 million. This decrease
in operating loss was primarily due to the improvement  in project margins.

Critical accounting estimates

The consolidated financial statements contained in this report were prepared in
accordance with U.S. GAAP. The preparation of these financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions
that affect both the Company's carrying values of its assets and liabilities,
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Although our significant
accounting policies are described in more detail in Note 2 of the Notes to
Consolidated Financial Statements; we believe the following accounting policies
to be critical to the judgments and estimates used in the preparation of our
financial statements:

? Recognition of revenue from construction contracts;

 ? Long Lived Assets;


 ? Income Taxes;

? Insurance Coverage, Disputes, Claims and Contingencies.

Revenue recognition

We adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), on
January 1, 2018, using the modified retrospective method. We recognized the
cumulative effect of initially adopting Topic 606 guidance as an adjustment to
the beginning balance of retained earnings. Contracts with customers that were
not substantially complete in both our marine and concrete segments were
evaluated in order to determine the impact as of the date of adoption. The
comparative information has not been restated and continues to be reported under
the accounting standards in effect for those periods.

Our revenue is derived from contracts to provide marine construction, dredging,
turnkey concrete services, and other specialty services. Our projects are
typically short in duration and usually span a period of less than one year. We
determine the appropriate accounting treatment for each contract before work
begins and generally record revenue on contracts over time.

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Performance obligations are promises in a contract to transfer distinct goods or
services to the customer and are the unit of account under Topic 606. Our
contracts and related change orders typically represent a single performance
obligation because individual goods and services are not separately identifiable
and we provide a significantly integrated service. Revenue is recognized over
time because control is continuously transferred to the customer. For contracts
with multiple performance obligations, we allocate the contract's transaction
price to each performance obligation using our best estimate of the stand-alone
selling price of each distinct good or service. Progress is measured by
the percentage of actual contract costs incurred to date to total estimated
costs for each contract. This method is used because management considers
contract costs incurred to be the best available measure of progress on these
contracts. Contract costs include all direct costs, such as material and labor,
and those indirect costs incurred that are related to contract performance such
as payroll taxes and insurance. General and administrative costs are charged to
expense as incurred. Upfront costs, such as incurring costs to mobilize
personnel and equipment prior to satisfying a performance obligation are
capitalized and amortized over the contract performance period.

Changes in job performance, job conditions and estimated profitability,
including those arising from final contract settlements, may result in revisions
to costs and reported revenue and are recognized in the period in which the
revisions are determined. The effect of changes in estimates of contract revenue
or contract costs is recognized as an adjustment to recognized revenue on a
cumulative catch-up basis. When losses on uncompleted contracts are anticipated,
the entire loss is recognized in the period in which such losses are determined.
Revenue is recorded net of any sales taxes collected and paid on behalf of

the
customer, if applicable.

Long-Lived Assets

Our long-lived assets consist primarily of equipment used in our operations.
Fixed assets are carried at cost and are depreciated over their estimated useful
lives, ranging from one to 30 years, using the straight-line method for
financial reporting purposes and accelerated methods for tax reporting purposes.
The carrying value of our long-lived assets is evaluated periodically based on
utilization of the asset and physical condition of the asset, as well as the
useful life of the asset to determine if adjustment to the depreciation period
or the carrying value is warranted. If events and circumstances such as poor
utilization or deteriorated physical condition indicate that the asset(s) should
be reviewed for possible impairment, we use projections to assess whether future
cash flows, including disposition, on a non-discounted basis related to the
tested assets are likely to exceed the recorded carrying amount of those assets
to determine if an impairment exists. If we identify a potential impairment, we
will estimate the fair value of the asset through known market transactions of
similar equipment and other valuation techniques, which could include the use of
similar projections on a discounted cash flow basis. We will report a loss to
the extent that the carrying value of the impaired assets exceeds their fair
values.

Income Taxes

We determine our consolidated income tax provision using the asset and liability
method prescribed by U.S. GAAP, which requires the recognition of income tax
expense for the amount of taxes payable or refundable for the current period and
for deferred tax liabilities and assets for the future tax consequences of
events that have been recognized in an entity's financial statements or tax
returns. We must make significant assumptions, judgments and estimates to
determine our current provision for income taxes, our deferred tax assets and
liabilities, and any valuation allowance to be recorded against any deferred tax
asset. The current provision for income tax is based upon the current tax laws
and our interpretation of these laws, as well as the probable outcomes of any
tax audits. The value of any net deferred tax asset depends upon estimates of
the amount and category of future taxable income reduced by the amount of any
tax benefits that we do not expect to realize. The factors used to assess the
likelihood of realization include our forecast of future taxable income
exclusive of reversing temporary differences and carryforwards, future reversals
of existing taxable temporary differences and available tax planning strategies
that could be implemented to realize the net deferred tax assets.

We consider both positive and negative evidence when evaluating the need for a
valuation allowance on our deferred tax assets in accordance with ASC
740. Available evidence includes historical financial information supplemented
by currently available information about future years. Generally, historical
financial information is more objectively verifiable than projections of future
income and is therefore given more weight in our assessment.  We consider
cumulative losses in the most recent twelve quarters to be significant negative
evidence that is difficult to overcome in considering whether a valuation
allowance is required. Conversely, we consider a cumulative income position over
the most resent twelve quarters, to be significant positive evidence that a
valuation allowance may not be required.

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Actual operating results and the underlying amount and category of income in
future years could render current assumptions, judgments and estimates of
recoverable net deferred taxes inaccurate, thus impacting our financial position
and results of operations. We compute deferred income taxes using the liability
method. Under the liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. Under
the liability method, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

We account for uncertain tax positions in accordance with the provisions of the
FASB's ASC 740-10, which prescribes a recognition threshold and measurement
attribute for financial statement disclosure of tax positions taken, or expected
to be taken, on our consolidated tax return. We evaluate and record any
uncertain tax positions based on the amount that management deems is more likely
than not to be sustained upon ultimate settlement with the tax authorities in
the tax jurisdictions in which we operate.

Insurance coverage, disputes, claims and contingencies

We maintain insurance coverage for our business and operations. Insurance
related to property, equipment, automobile, general liability and a portion of
workers' compensation is provided through traditional policies, subject to a
deductible or deductibles. A portion of our workers' compensation exposure is
covered through a mutual association, which is subject to supplemental calls.

The marine segment maintains five levels of excess loss insurance coverage,
totaling $200 million in excess of primary coverage. This excess loss coverage
responds to most of its liability policies when a primary limit of $1 million
has been exhausted; provided that the primary limit for Contingent Maritime
Employer's Liability is $10 million and the Watercraft Pollution Policy primary
limit is $5 million. The concrete segment maintains five levels of excess loss
insurance coverage, totaling $200 million in excess of primary coverage. This
excess loss coverage responds to most of its liability policies when a primary
limit of $1 million has been exhausted.

Separately, the Company's marine segment employee health care is paid for by
general assets of the Company and currently administered by a third party. The
administrator has purchased appropriate stop-loss coverage. Losses on these
policies up to the deductible amounts are accrued based upon known claims
incurred and an estimate of claims incurred but not reported. The accruals are
derived from known facts, historical trends and industry averages to determine
the best estimate of the ultimate expected loss.  Actual claims may vary from
estimates. Any adjustments to such reserves are included in the Consolidated
Results of Operations in the period in which they become known. The Company's
concrete segment employee health care is provided through two policies. A fully
funded policy is offered primarily to salaried employees and their dependents
while a partially self-funded plan with an appropriate stop-loss is offered
primarily to hourly employees and their dependents. The self-funded plan is
funded to the maximum exposure and, as a result, is expected to receive a
partial refund after the policy expiration.

Cash and capital resources

Our primary liquidity needs are to finance our working capital, fund capital
expenditures, and pursue strategic acquisitions. Historically, our source of
liquidity has been cash provided by our operating activities and borrowings
under our credit facilities. The assessment of the liquidity and going concern
requires the Company to make estimates of future activity and judgments about
whether the Company has adequate liquidity to operate.  Significant assumptions
used in the Company's forecasted model of liquidity include forecasted sales,
costs, and capital expenditures. Based on a careful assessment of these factors
management believes that the Company will have adequate liquidity for its
operations for at least the next 12 months.

Changes in working capital are normal within our business given the varying mix
in size, scope and timing of delivery of our projects. At December 31, 2021, our
working capital was $36.2 million, as compared with $54.8 million at
December 31, 2020. As of December 31, 2021, we had unrestricted cash on hand of
$12.3 million. Our borrowing capacity at December 31, 2021 was approximately
$9.3 million.

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Ninth Amendment to the Revolving Credit Facility

On March 1, 2022, we entered into an amended revolving line of credit and
swingline loan agreement (the "Ninth Amendment") to, among other things, waive
covenant defaults, reset the revolver limit, implement an anti-cash hoarding
provision and institute temporary covenant requirements. For further details of
the Ninth Amendment, see Note 20 in the Notes to the Financial Statements (of
this Form 10-K).

We expect to meet our future internal liquidity and working capital needs and
maintain or replace our equipment fleet through capital expenditure purchases,
leases and major repairs, from funds generated by our operating activities for
at least the next 12 months. Although our line of credit is reduced, we believe
our cash position is adequate for our general business requirements discussed
above and to service our debt.

The following table provides information about our cash flows and capital expenditures for the years ending December 31, 20212020 and 2019:

                                                                    2021            2020            2019
Net (loss) income                                               $   (14,560)    $     20,220    $    (5,359)
Adjustments to remove non-cash and non-operating items                

22,726 26,338 35,457 Cash flow from net income after adjusting for non-cash and non-operating items

8,166 46,558 30,098 Change in operating assets and liabilities (working capital) (8,097)

           (526)        (30,814)
Cash flows provided by (used in) operating activities           $         69    $     46,032    $      (716)
Cash flows provided by (used in) investing activities           $     10,629    $    (3,129)    $   (13,331)
Cash flows provided by (used in) financing activities           $         

6 ($42,400) $6,449

Capital expenditures (included in investing activities above)

                                                          $   

(16,975) ($14,694) ($17,199)

Operating Activities. During 2021, we generated approximately $0.1 million in
cash from our operating activities. The net cash inflow is comprised of $8.2
million of cash inflows from net income, after adjusting for non-cash items and
$8.1 million of cash outflows related to changes in net working capital. The
changes in net working capital, which are reflected as changes in operating
assets and liabilities in our Consolidated Statements of Cash Flows, were
primarily driven by a $2.4 million outflow pursuant to the relative timing and
significance of project progression and billings during the period, a  $1.3
million outflow related to a decrease in our net position of accounts receivable
and accounts payable plus accrued  liabilities during the period and a $4.9
million decrease in operating lease liabilities during the period, partially
offset by $0.5 million of other cash inflows.

During 2020, we generated approximately $46.0 million in cash from our operating
activities. The net cash inflow is comprised of $46.5 million of cash inflows
from net income, after adjusting for non-cash items, partially offset by $0.5
million of cash outflows related to changes in net working capital. The changes
in net working capital, which are reflected as changes in operating assets and
liabilities in our Consolidated Statements of Cash Flows, were primarily driven
by a $6.5 million outflow pursuant to the relative timing and significance of
project progression and billings during the period, a $5.4 million decrease in
operating lease liabilities during the period and $1.3 million of other
outflows, partially offset by a $12.7 million inflow related to a decrease in
our net position of accounts receivable and accounts payable plus accrued
liabilities during the period.

During 2019, we used approximately $0.7 million in cash from our operating
activities. The net cash outflow is comprised of $30.1 million of cash inflows
from net income, after adjusting for non-cash items and $30.8 million of cash
outflows related to changes in net working capital. The changes in net working
capital, which are reflected as changes in operating assets and liabilities in
our Consolidated Statements of Cash Flows, were primarily driven by a $22.9
million increase in our net position of accounts receivable and accounts
payable. The increases in accounts receivable and accounts payable were
consistent with our increased project activity year over year.  The year over
year increase in accounts receivable is more pronounced than accounts payable
due to the longer cycle times on the accounts receivable, which also include

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retainage whereas accounts payable typically turn in 30 days. The changes in net
working capital also included a net outflow of $5.2 million from the net change
in costs and estimated earnings in excess of billings on uncompleted contracts,
offset by the change in billings in excess of costs and estimated earnings on
uncompleted contracts. These changes were driven by the timing and execution of
the underlying projects.

Investing Activities. Capital asset additions and betterments to our fleet were
$17.0 million in 2021, as compared with $14.7 million and $17.2 million in 2020
and 2019, respectively. Proceeds from the sale of property and equipment were
$27.1 in the year ended December 31, 2021, as compared with $5.9 million in the
year ended December 31, 2020. The increase in proceeds from the sale of property
and equipment for the year ended December 31, 2021 is primarily related to the
sale of our property in Tampa, Florida.

Financing Activities. During the year ended December 31, 2021, we drew down $53
million from our revolving line of credit. During the year ended December 31,
2021 we repaid $19 million on our revolving line of credit.

During the year ended December 31, 2021 we fully extinguished the term loan
portion of our Credit Facility, in part using proceeds from the sale of property
in Tampa, Florida.  The extinguishment of the term loan reduced our exposure to
variability in interest rates and eliminated future loan amortization payment
commitments.  Concurrent with extinguishing the term loan, we canceled the
remaining open position on our interest rate swap, resulting in a $1.3 million
loss on the mark to market value of the swap at the date of termination.  The
$1.3 million was paid to the counterparty, cleared from the balance sheet as an
interest rate swap liability, removed from Other Comprehensive Income and
charged to interest expense during the year ended December 31, 2021.  Further,
the remaining $0.8 million of unamortized deferred debt issuance costs were
charged to interest expense related to the early extinguishment of the term
loan.   There were no penalties incurred related to early payment of the term
loan.

During 2020, we drew down $10.0 million from our revolving line of credit.
Additionally, we repaid $41.0 million on our revolving line of credit, as well
as made the regularly scheduled debt payment on the term loan of $3.8 million
and an additional principal paydown of $3.4 million with proceeds from the sale
of equipment.

In 2019, we pulled $63.0 million of our revolving line of credit. In addition, we refunded $49.0 million on this drawing, as well as regular debt repayments on the term loan of $3.0 million and an additional principal repayment of $18.2 million with the proceeds of a sale-leaseback agreement.

Sources of capital

As of December 31, 2021, our available sources of capital consist of borrowing
availability on our revolving line of credit of $9.3 million pursuant to our
Credit Facility.

Financial covenants

Financial covenants under the credit facility include:

• A minimum consolidated EBITDA requirement which must not be less than the following

during each noted period:

– End of fiscal quarter March 31, 2022 – $2.6 million.

– End of fiscal quarter June 30, 2022 – $7.7 million on an annual basis to date.

• A consolidated leverage ratio so as not to exceed the following elements during each

period:

– End of fiscal quarter September 30, 2022 and each Fiscal quarter then, do not exceed 3.00 to 1.00.

• A consolidated fixed charge coverage ratio that must not be less than the following

during each noted period:

– End of fiscal quarter December 31, 2022 and each Fiscal quarter thereafter not be less than 1.25 to 1.00.

In addition, the Credit Facility contains events of default that are usual and
customary for similar arrangements, including non-payment of principal, interest
or fees; breaches of representations and warranties that are not timely cured;
violation of covenants; bankruptcy and insolvency events; and events
constituting a change of control.

During the fourth quarter of 2021, the Company entered into discussions with the lead bank due to concerns that it would not meet financial covenants. The company has performed the Ninth Amendment for March 2022. With the

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execution of the aforementioned amendment, the Company obtained a waiver on the
financial covenants as of December 31, 2021. See Note 11 in the Notes to the
Financial Statements (of this Form 10-K) for further discussion on the Company's
Debt.

Bonding Capacity

We are often required to provide various types of surety bonds that provide
additional security to our customers for our performance under certain
government and private sector contracts. Our ability to obtain surety bonds
depends on our capitalization, working capital, past performance and external
factors, including the capacity of the overall surety market. At December 31,
2021, the capacity under our current bonding arrangement was at least $750
million, with approximately $110 million of projects being bonded. We believe
our balance sheet and working capital position are sufficient to allow us to
continue to access our bonding capacity.

Effect of inflation

We are subject to the effects of inflation through increases in the cost of raw
materials, and other items such as fuel, concrete and steel. Due to the relative
short-term duration of our projects, we are generally able to include
anticipated price increases in the cost of our bids.

Off-balance sheet arrangements

Currently our only off balance sheet arrangements are those discussed above
under "Bonding Capacity" and those which arise in the normal course of business.
These arrangements are not reasonably likely to have an effect on our financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures, or capital resources that is material to investors. See Note 17 of
Notes to Consolidated Financial Statements beginning on page F-1 of this Annual
Report on Form 10-K.

Recently issued accounting pronouncements

See Note 2 of the Notes to the Financial Statements (Part IV, Item 15 of this Form 10-K) for further discussion.

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