SOURCE: DryShips Inc.

DryShips Inc.

March 30, 2011 19:51 ET

DryShips Inc. Reports Financial and Operating Results for the Fourth Quarter 2010

ATHENS, GREECE--(Marketwire - March 30, 2011) - DryShips Inc. (NASDAQ: DRYS), or the Company, a global provider of marine transportation services for drybulk and petroleum cargoes, and through its majority owned subsidiary, Ocean Rig UDW Inc., of off-shore contract drilling oil services, today announced its unaudited financial and operating results for the fourth quarter and year ended December 31, 2010.

Fourth quarter 2010 Financial Highlights

-- For the fourth quarter of 2010, the Company reported net income of $99.7
   million, or $0.31 basic and $0.29 diluted earnings per share. Included
   in the fourth quarter 2010 results are various items, totaling $16.7
   million, or $0.06 per share which are described below. Excluding these
   items, net income would have amounted to $83.0 million or $0.25 basic
   and $0.24 diluted earnings per share.

   -- Included in the fourth quarter 2010 results are non-cash amortization
      of debt issuance costs, including those relating to our convertible
      senior notes, totaling $10.2 million, or $0.03 per share.

   -- Included in the fourth quarter 2010 results are gains incurred on our
      interest rate swaps, amounting to $26.9 million, or $0.09 per share.

-- Basic earnings per share for the fourth quarter of 2010 includes a
   reduction to net income amounting to $3.8 million relating to the
   cumulative payment-in-kind dividends on the Series A Convertible
   Preferred Stock, which reduces the income available to common
   shareholders.

-- The Company reported adjusted EBITDA of $129.3 million for the fourth
   quarter of 2010.(1)

(1) Please see later in this release for a reconciliation of Adjusted
EBITDA to net income, the most directly comparable financial measure
calculated in accordance with United States generally accepted accounting
principles, or U.S. GAAP.

George Economou, Chairman and Chief Executive Officer of the Company, commented:

"We are pleased to report another solid quarter of operating results and the successful achievement of a number of milestones that were initiated over the last two years. Most of these positive developments stem from the offshore drilling segment as we have successfully concluded two vital financings. The restructuring of the Deutsche Bank led facility for newbuilding drillship Ocean Rig Poseidon allows for immediate drawdown and signifies the support of our bankers and the benefits of our commercial decision to charter the Ocean Rig Poseidon to Petrobras. We were also able to achieve competitive financing terms in a challenging market with the new $800 million facility led by Nordea and ABN-AMRO. Giving effect to the drawdown of these two facilities along with cash on hand we will have secured financing for all of our four drillships while the Ocean Rig Mykonos facility also remains available for drawdown. We are now focused on taking delivery of the remaining drillships and ensuring drilling operations start at the earliest. We remain committed to registering the Ocean Rig shares on an exchange at the earliest and to build Ocean Rig into a competitive player in the ultra deepwater sector.

"We are pleased with our decision to make a counter cyclical investment and seize the opportunity to purchase a high specification fleet of sister tankers from a top quality yard. The tanker market has again proved to be as unpredictable as ever due to the fallout of the Libyan conflict. The short term impact has been an increase in tonne-mile demand as longer-haul sources replace Libyan oil in Europe. We remain committed to placing the Company's tanker interests in a standalone entity at the right time.

"As we move through 2011, we are seeing increasingly attractive opportunities to purchase drybulk carriers and renew and/or grow our fleet. Our strategy remains opportunistic in this sector."

Financial Review: 2010 Fourth quarter

The Company recorded net income of $99.7 million, or $0.31 basic and $0.29 diluted earnings per share, for the three-month period ended December 31, 2010, as compared to a net income of $9.6 million, or $0.02 basic and diluted earnings per share, for the three-month period ended December 31, 2009. Adjusted EBITDA, which is defined and reconciled to net income later in this press release, was $129.3 million for the fourth quarter of 2010 as compared to $76.7 million for the same period in 2009.

Included in the fourth quarter 2010 results are various items totaling $16.7 million, or $0.06 per share, which are described at the beginning of this press release. Excluding these items, our adjusted net income would have amounted to $83.0 million, or $0.25 per share.

Basic earnings per share for the fourth quarter of 2010 includes a reduction to net income amounting to $3.8 million relating to the cumulative payment-in-kind dividends on the Series A Convertible Preferred Stock, which reduces the income available to common shareholders.

For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) decreased by $5.3 million to $106.7 million for the three-month period ended December 31, 2010, as compared to $112.0 million for the three-month period ended December 31, 2009. For the offshore drilling segment, revenues from drilling contracts increased by $25.2 million to $102.3 million for the three-month period ended December 31, 2010 as compared to $77.1 million for the same period in 2009.

Total vessel and rig operating expenses increased by $6.5 million to $52.0 million for the three-month period ended December 31, 2010, as compared to $45.5 million for the three-month period ended December 31, 2009, while total depreciation and amortization decreased by $3.2 million to $46.9 million for the three-month period ended December 31, 2010 as compared to $50.1 million for the three-month period ended December 31, 2009. Total general and administrative expenses increased to $25.2 million in the fourth quarter of 2010 from $24.5 million during the comparative period in 2009.

Financing Developments

New $800 million Syndicated Secured Term Loan Facility

On March 25, 2011, the Company received signed commitments from all the lenders participating in a new $800 million syndicated secured term loan facility to partially finance the construction costs of the Ocean Rig Corcovado and Olympia. This facility has a 5 year term and 12 year repayment profile, and bears interest at LIBOR plus a margin.

This new facility is subject to completion of definitive documentation, which the Company expects to occur in the coming weeks. The Lead Arrangers are Nordea Bank and ABN AMRO. Also participating in this financing is Garanti-Instituttet for Eksportkreditt (GIEK), Norway's export credit agency, DVB Bank, Deutsche Bank and National Bank of Greece.

The Company intends to use a portion of the new facility to prepay its $325 million Bridge Loan Facility with Deutsche Bank.

Restructuring of $1.1 billion Secured Term Loan Facility

On March 28, 2011, the Company received signed consents from all participating lenders to restructure the $1.1 billion secured term loan facilities led by Deutsche Bank.

The main terms of the restructuring are as follows:

-- The maximum amount permitted to be drawn is reduced from $562 million to
   $495 million under each facility.

-- In addition to the DryShips Guarantee, the Company's majority-owned
   subsidiary, Ocean Rig UDW Inc., will provide an unlimited recourse
   guarantee and will be subject to certain financial covenants that will
   apply quarterly.

-- Full draw downs (up to a total of $495 million) will be permitted for
   The Ocean Rig Poseidon based upon the fixture of the drillship under its
   drilling contract with Petrobras, and cash collateral deposited for this
   vessel will be released.

-- For the Ocean Rig Mykonos, the Company will have up to one month prior
   To delivery (scheduled for September 2011) to execute an acceptable
   Drilling contract in order to draw down the loan.

This restructuring is subject to completion of definitive documentation, which the Company expects to occur in the coming weeks.

New $70 million Secured Term Loan Facility

On February 7, 2011, the Company executed definitive documentation for a $70 million secured term loan facility with an international lender to partially finance the construction costs of the newbuilding tankers, Saga and Villamoura. This facility has a 5 year term and a 15 year repayment profile, and bears interest at LIBOR plus a margin. As of March 30, 2011, the Company has drawn the full amount available under this facility.

New $32.3 million Secured Term Loan Facility

On March 30, 2011, the Company received a firm commitment from an international lender for a $32.3 million secured term loan facility to partially finance the construction cost of the newbuilding tanker, Daytona, which is scheduled to be delivered in May 2011. This facility has a 6 year term and a 15 year repayment profile, and bears interest at LIBOR plus a margin. This facility is subject to completion of definitive documentation, which the Company expects to occur in the coming weeks.

Selected Recent Developments

-- On November 23, 2010, the Company announced it has entered into an
   agreement with a major South Korean shipyard for the option to construct
   up to four ultra deepwater drillships. The new orders would be
   sisterships of the drillships under construction with further upgrades
   to the specifications. Each of the four options can be declared within
   twelve months of the agreement, with deliveries ranging from 2013 until
   2014. The total project cost is estimated to be about $600 million per
   drillship excluding financing costs. The agreement includes a
   non-refundable slot reservation fee of $24.8 million per drillship that
   will be applied to the drillship contract price if the options are
   exercised. The option agreement was novated to Ocean Rig UDW in December
   2010 at a cost of $99.0 million.

-- In January 2011, the Company entered into firm contracts with Cairn
   Energy PLC for the Leiv Eiriksson and the Ocean Rig Corcovado, and with
   Petrobras Tanzania for the Ocean Rig Poseidon.

-- On December 21, 2010, Ocean Rig UDW closed its offering by way of a
   private placement of shares in the Norwegian market with total gross
   proceeds of $500 million, with DryShips retaining 78% of Ocean Rig UDW.
   As noted above, as part of this transaction Ocean Rig UDW acquired at
   cost the drillship options held by DryShips.

-- On December 23, 2010, the Company entered into direct agreements with a
   first class Korean shipyard to purchase twelve high specification
   newbuilding tankers at a total purchase price of $770 million, including
   over $3 million per vessel in extra items. The delivery installments for
   these contracts approximate 70% of each vessel's price.

-- On January 3, 2011, the Company took delivery of its newbuilding
   drillship Ocean Rig Corcovado (Hull 1837).

-- On January 18, 2011, the Company took delivery of its newbuilding
   Aframax tanker, Saga.

-- On March 17, 2011, the Company's vessel, MV OLIVA, was reported to have
   run aground in a group of islands in the South Atlantic Ocean. Salvors
   report that there are no salvage prospects for the vessel or the cargo.
   We expect that all losses will be covered by insurance.

-- On March 23, 2011, the Company took delivery of its newbuilding Suezmax
   tanker, Vilamoura.

-- On March 30, 2011, the Company took delivery of its second newbuilding
   drillship Ocean Rig Olympia (Hull 1838).

-- In March 2011, a U.S. District Court in Maryland resolved a case in
   which Cardiff, the former manager of the Company's vessel, M/V Capitola,
   entered into a comprehensive settlement with the U.S. Department of
   Justice in connection with an investigation into MARPOL violations
   involving that vessel.  The court applied a fine of approximately $2.5
   million and instructed Cardiff to implement an Environmental Compliance
   Plan, or ECP, which the vessels' current operator, TMS Bulkers, will
   carry out.

-- Three of the Company's drybulk carriers are chartered to Korea Lines
   Corporation (KLC). As of February 16, 2011, KLC entered into a
   rehabilitation proceeding under the protection of the Korean Courts. The
   Company reached an agreement with the receivers of KLC to restructure
   the charters at a base rate plus a profit share component. The agreement
   requires that a certain portion of outstanding hire be paid in full with
   the remaining amount to be filed as an unsecured claim, the satisfaction
   of which will be subject to the rehabilitation proceedings in the Korean
   Bankruptcy Courts.

Fleet List

The table below describes our drybulk and tanker fleet profile as of March 29, 2011

                      Year                   Gross rate Redelivery
                      Built   DWT     Type    Per day    Earliest  Latest

Dry fleet
---------

Capesize:
Alameda                2001 170,662 Capesize $   27,500     Nov-15   Jan-16
Brisbane               1995 151,066 Capesize $   25,000     Dec-11   Apr-12
Capri                  2001 172,579 Capesize Spot           Apr-18   Jun-18
Flecha                 2004 170,012 Capesize $   55,000     Jul-18   Nov-18
Manasota               2004 171,061 Capesize $   67,000     Feb-13   Apr-13
Mystic                 2008 170,040 Capesize $   52,310     Aug-18   Dec-18
Samsara                1996 150,393 Capesize Spot

Panamax:
Amalfi ex. Gemini S    2009  75,000  Panamax $   39,750     Aug-13   Dec-13
Avoca                  2004  76,629  Panamax $   45,500     Sep-13   Dec-13
Bargara                2002  74,832  Panamax $   43,750     May-12   Jul-12
Capitola               2001  74,816  Panamax Spot           Jun-13   Aug-13
Catalina               2005  74,432  Panamax $   40,000     Jun-13   Aug-13
Conquistador           2000  75,607  Panamax $   17,750     Aug-11   Nov-11
Coronado               2000  75,706  Panamax $   18,250     Sep-11   Nov-11
Ecola                  2001  73,925  Panamax $   43,500     Jun-12   Aug-12
La Jolla               1997  72,126  Panamax $   14,750     Aug-11   Nov-11
Levanto                2001  73,931  Panamax $   16,800     Sep-11   Nov-11
Ligari                 2004  75,583  Panamax $   55,500     Jun-12   Aug-12
Maganari               2001  75,941  Panamax $   14,500     Jul-11   Sep-11
Majorca                2005  74,747  Panamax $   43,750     Jun-12   Aug-12
Marbella               2000  72,561  Panamax $   14,750     Aug-11   Nov-11
Mendocino              2002  76,623  Panamax $   56,500     Jun-12   Sep-12
Ocean Crystal          1999  73,688  Panamax $   15,000     Aug-11   Nov-11
Oregon                 2002  74,204  Panamax $   16,350     Aug-11   Oct-11
Padre                  2004  73,601  Panamax $   46,500     Sep-12   Dec-12
Positano               2000  73,288  Panamax $   42,500     Sep-13   Dec-13
Primera                1998  72,495  Panamax $   18,250*    Sep-11   Sep-11
Rapallo                2009  75,123  Panamax $   15,400     Aug-11   Oct-11
Redondo                2000  74,716  Panamax $   34,500     Apr-13   Jun-13
Saldanha               2004  75,707  Panamax $   52,500     Jun-12   Sep-12
Samatan                2001  74,823  Panamax Spot           May-13   Jul-13
Sonoma                 2001  74,786  Panamax $   19,300    Sept-11   Nov-11
Sorrento               2004  76,633  Panamax $   17,300     Sep-11   Dec-11
Toro                   1995  73,035  Panamax $   16,750     May-11   Jul-11


Supramax:
Galveston ex. Pachino  2002  51,201 Supramax Spot
Paros I                2003  51,201 Supramax $   27,135     Oct-11   May-12


                      Year
Newbuildings          Built   DWT     Type
------------

Panamax 1              2011  76,000  Panamax
Panamax 2              2012  76,000  Panamax


Tanker fleet
------------
Saga                   2011 115,200  Aframax Spot
Vilamoura              2011 158,300  Suezmax Spot


Newbuildings
------------

Alicante               2012 115,200 Aframax
Belmar                 2011 115,200 Aframax
Calida                 2011 115,200 Aframax
Daytona                2011 115,200 Aframax
Mareta                 2012 115,200 Aframax
Blanca                 2013 158,300 Suezmax
Bordeira               2013 158,300 Suezmax
Esperona               2013 158,300 Suezmax
Lipari                 2012 158,300 Suezmax
Petalidi               2012 158,300 Suezmax


* Based on a synthetic time charter






        Drybulk Carrier Segment Summary Operating Data (unaudited)

          (Dollars in thousands, except average daily results)


                                 Three Months Ended       Year Ended
                                    December 31,         December 31,
                                ------------------------------------------
                                  2009       2010       2009       2010
                                ---------  ---------  ---------  ---------
Average number of vessels(1)         39.0       37.0       38.1       37.2
Total voyage days for
 vessels(2)                         3,535      3,341      13,660    13,372
Total calendar days for
 vessels(3)                         3,588      3,404      13,914    13,583
Fleet utilization(4)                 98.5%      98.1%      98.2%      98.5%
Time charter equivalent(5)         31,683     31,929     30,425     32,184
Vessel operating expenses
 (daily)(6)                         5,553      5,577      5,434      5,245

(1) Average number of vessels is the number of vessels that constituted our
    fleet for the relevant period, as measured by the sum of the number of
    days each vessel was a part of our fleet during the period divided by
    the number of calendar days in that period.
(2) Total voyage days for fleet are the total days the vessels were in our
    possession for the relevant period net of off hire days.
(3) Calendar days are the total number of days the vessels were in our
    possession for the relevant period including off hire days.
(4) Fleet utilization is the percentage of time that our vessels were
    available for revenue generating voyage days, and is determined by
    dividing voyage days by fleet calendar days for the relevant period.
(5) Time charter equivalent, or TCE, is a measure of the average daily
    revenue performance of a vessel on a per voyage basis. Our method of
    calculating TCE is consistent with industry standards and is determined
    by dividing voyage revenues (net of voyage expenses) by voyage days for
    the relevant time period. Voyage expenses primarily consist of port,
    canal and fuel costs that are unique to a particular voyage, which
    would otherwise be paid by the charterer under a time charter contract,
    as well as commissions. TCE is a standard shipping industry performance
    measure used primarily to compare period-to-period changes in a
    shipping company's performance despite changes in the mix of charter
    types (i.e., spot charters, time charters and bareboat charters) under
    which the vessels may be employed between the periods.


                                 Three Months Ended       Year Ended
                                    December 31,         December 31,
                                --------------------  --------------------
                                  2009       2010       2009       2010
                                ---------  ---------  ---------  ---------
Voyage revenues                   119,332    113,521    444,385    457,804
Voyage expenses                    (7,332)    (6,844)   (28,779)   (27,433)
                                ---------  ---------  ---------  ---------
Time charter equivalent
 revenues                         112,000    106,677    415,606    430,371
                                ---------  ---------  ---------  ---------
Total voyage days for fleet         3,535      3,341     13,660     13,372
Time charter equivalent TCE        31,683     31,929     30,425     32,184

(6) Daily vessel operating expenses, which includes crew costs, provisions,
    deck and engine stores, lubricating oil, insurance, maintenance and
    repairs is calculated by dividing vessel operating expenses by fleet
    calendar days for the relevant time period.






                              DryShips Inc.

                          Financial Statements

        Unaudited Condensed Consolidated Statements of Operations

(Expressed in Thousands
 of U.S. Dollars-
 except for share and per
 share data)               Three Months Ended             Year Ended
                               December 31,              December 31,
                        ------------------------  ------------------------
                            2009         2010         2009         2010
                        -----------  -----------  -----------  -----------
                       (As restated)             (As restated)

REVENUES:
Voyage revenues         $   119,332      113,521      444,385  $   457,804
Revenues from drilling
 contracts                   77,100      102,301      375,449      401,941
                        -----------  -----------  -----------  -----------
                            196,432      215,822      819,834      859,745

EXPENSES:
Voyage expenses               7,332        6,844       28,779       27,433
Vessel operating
 expenses                    19,924       18,984       75,605       71,245
Drilling rigs operating
 expenses                    25,589       33,015      126,282      119,369
Depreciation and
 amortization                50,127       46,883      196,309      190,911
Loss/ (gain) on sale of
 vessels                          -          708       (2,045)      (9,435)
Loss on contract
 cancellations, net          32,773            -      244,189            -
Vessel impairment
 charge                       1,578        5,568        1,578        5,568
General and
 administrative
 expenses                    24,510       25,203       90,823       87,264
                        -----------  -----------  -----------  -----------

Operating income             34,599       78,617       58,314      367,390

OTHER INCOME /
 (EXPENSES):
Interest and finance
 costs, net of interest
 income                     (16,222)      (3,900)     (75,725)     (45,959)
Gain/(loss) on interest
 rate swaps                   2,171       26,884       23,160     (120,505)
Other, net                   (8,006)       5,899       (6,692)       9,960
Income taxes                 (2,938)      (5,640)     (12,797)     (20,436)
                        -----------  -----------  -----------  -----------
Total other
 income/(expenses), net     (24,995)      23,243      (72,054)    (176,940)
                        -----------  -----------  -----------  -----------

Net income/(loss)             9,604      101,860      (13,740)     190,450

Net income attributable
 to non-controlling
 interests                        -       (2,123)      (7,178)      (2,123)
                        -----------  -----------  -----------  -----------

Net  income/(loss)
 attributable to
 Dryships Inc.          $     9,604       99,737      (20,918) $   188,327
                        ===========  ===========  ===========  ===========

Earnings/(loss) per
 common share, basic    $     0.022        0.308       (0.136) $     0.642
Weighted average number
 of shares, basic       253,951,696  307,926,254  209,331,737  268,858,688
Earnings/(loss) per
 common share, diluted  $     0.022        0.290       (0.136) $     0.617
Weighted average number
 of shares, diluted     253,951,696  344,493,418  209,331,737  305,425,852






                              Dryships Inc.

        Unaudited Condensed Consolidated Balance Sheets


(Expressed in Thousands of U.S.
 Dollars)                            December 31, 2009   December 31, 2010
                                     ------------------  ------------------
                                       (As restated)
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents          $          693,169  $          391,530
  Restricted cash                               350,833             530,156
  Trade accounts receivable, net                 66,681              25,204
  Other current assets                           69,967              70,065
                                     ------------------  ------------------
  Total current assets                        1,180,650           1,016,955
                                     ------------------  ------------------

FIXED ASSETS, NET:
  Advances for assets under
   construction and acquisitions              1,181,228           2,071,327
  Vessels, net                                2,058,329           1,917,966
  Drilling rigs, machinery and
   equipment, net                             1,329,641           1,249,333
                                     ------------------  ------------------
  Total fixed assets, net                     4,569,198           5,238,626
                                     ------------------  ------------------

OTHER NON CURRENT ASSETS:
  Restricted cash                                     -             243,672
  Other non-current assets                       55,775             483,869
                                     ------------------  ------------------
  Total non current assets                       55,775             727,541
                                     ------------------  ------------------
  Total assets                                5,805,623           6,983,122
                                     ==================  ==================

LIABILITIES AND STOCKHOLDERS'
 EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt           1,698,692             731,232
  Other current liabilities                     197,331             204,203
                                     ------------------  ------------------
  Total current liabilities                   1,896,023             935,435
                                     ------------------  ------------------

NON CURRENT LIABILITIES
  Long-term debt, net of current
   portion                                      985,992           1,988,460
  Other non-current liabilities                 112,438             161,070
                                     ------------------  ------------------
  Total non current liabilities               1,098,430           2,149,530
                                     ------------------  ------------------

COMMITMENTS AND CONTINGENCIES                         -                   -

STOCKHOLDERS' EQUITY:
  Total Dryhsips Inc. stockholders'
   equity                                     2,811,170           3,361,881
  Non controlling interests                           -             536,276
                                     ------------------  ------------------
  Total equity                                2,811,170           3,898,157
                                     ------------------  ------------------
  Total liabilities and
   stockholders' equity              $        5,805,623  $        6,983,122
                                     ==================  ==================






                          Ocean Rig UDW Inc.

                         Financial Statements

        Unaudited Condensed Consolidated Statements of Operations


(Expressed in Thousands
 of U.S. Dollars-
 except for share and per
 share data)               Three Months Ended             Year Ended
                               December 31,              December 31,
                        ------------------------  ------------------------
                            2009         2010         2009         2010
                        -----------  -----------  -----------  -----------

REVENUES:
Revenues from drilling
 contracts              $    75,560      102,301      388,122      405,712
                        -----------  -----------  -----------  -----------

EXPENSES:
Drilling rigs operating
 expenses                    27,332       33,015      133,256      119,369
Depreciation and
 amortization                19,296       17,831       75,348       75,092
Loss/ (gain) on sale of
 vessels                          -          707            -        1,458
General and
 administrative
 expenses                     4,408        5,211       17,955       19,443
                        -----------  -----------  -----------  -----------
Operating income             24,524       45,537      161,563      190,350

OTHER INCOME /
 (EXPENSES):
Interest income               2,146        3,122        6,259       12,464
Interest and finance
 costs                       (3,590)      (2,415)     (46,120)      (8,418)
Gain/(loss) on interest
 rate swaps                   3,129       12,478        4,826      (40,303)
Other, net                     (567)         247        2,023        1,104
Income taxes                 (2,938)      (5,640)     (12,797)     (20,436)
                        -----------  -----------  -----------  -----------
Total other
 income/(expenses), net      (1,820)       7,792      (45,809)     (55,589)
                        -----------  -----------  -----------  -----------

Net  income/(loss)      $    22,704       53,329      115,754  $   134,761
                        ===========  ===========  ===========  ===========

Earnings/(loss) per
 common share, basic    $      0.22         0.50         1,12  $      1,30

Weighted average
 number of shares,
 basic                  103,125,500  106,231,090  103,125,500  103,908,279

Earnings/(loss) per
 common share, diluted  $      0.22         0.50         1,12  $      1,30

Weighted average
 number of shares,
 diluted                103,125,500  106,231,090  103,125,500  103,908,279






                          Ocean Rig UDW Inc.

             Unaudited Condensed Consolidated Balance Sheets


(Expressed in Thousands of U.S.
 Dollars)                            December 31, 2009   December 31, 2010
                                     ------------------  ------------------

ASSETS
CURRENT ASSETS:
  Cash and cash equivalents          $          234,195  $           95,707
  Restricted cash                               220,690             464,638
  Trade accounts receivable, net                 65,486              24,286
  Other current assets                           38,187              39,220
                                     ------------------  ------------------
  Total current assets                          558,558             623,851
                                     ------------------  ------------------

FIXED ASSETS, NET:
  Advances for assets under
   construction and acquisitions              1,178,392           1,888,490
  Drilling rigs, machinery and
   equipment, net                             1,317,607           1,249,333
                                     ------------------  ------------------
  Total fixed assets, net                     2,495,999           3,137,823
                                     ------------------  ------------------

OTHER NON CURRENT ASSETS:
  Other non-current assets                       55,428             582,024
                                     ------------------  ------------------
  Total non current assets                       55,428             582,024
                                     ------------------  ------------------
  Total assets                                3,109,985           4,343,698
                                     ==================  ==================



LIABILITIES AND STOCKHOLDERS'
 EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt             537,668             560,561
  Other current liabilities                     144,619             107,357
                                     ------------------  ------------------
  Total current liabilities                     682,287             667,918
                                     ------------------  ------------------

NON CURRENT LIABILITIES
  Long-term debt, net of current
   portion                                      662,362             696,986
  Other non-current liabilities                  64,219              97,712
                                     ------------------  ------------------
  Total non current liabilities                 726,581             794,698
                                     ------------------  ------------------

COMMITMENTS AND CONTINGENCIES                         -                   -


STOCKHOLDERS' EQUITY:
  Total stockholders' equity                  1,701,117           2,881,082
                                     ------------------  ------------------
  Total equity                                1,701,117           2,881,082
                                     ------------------  ------------------
  Total liabilities and
   stockholders equity               $        3,109,985  $        4,343,698
                                     ==================  ==================

Adjusted EBITDA Reconciliation

Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization and gains or losses on interest rate swaps. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by U.S. GAAP, and our calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations and efficiency. Adjusted EBITDA is also used by our lenders as a measure of our compliance with certain covenants contained in our loan agreements and because the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.

The following table reconciles net income to Adjusted EBITDA:

DryShips Inc.
-------------

                     Three Months  Three Months   Year Ended    Year Ended
(Expressed in            Ended         Ended     December 31,  December 31,
 Thousands of U.S.   December 31,  December 31,      2009          2010
 Dollars)                2009          2010
                    (As restated)               (As restated)

Net income/(loss)
 attributable to
 DryShips Inc.              9,604        99,737       (20,918)      188,327

Add: Net interest
 expense                   16,222         3,900        75,725        45,959
Add: Depreciation
 and amortization          50,127        46,883       196,309       190,911
Add: Income taxes           2,938         5,640        12,797        20,436
Add: Loss/ (gain) on
 interest rate swaps       (2,171)      (26,884)      (23,160)      120,505

                     ------------  ------------  ------------  ------------
Adjusted EBITDA            76,720       129,276       240,753       566,138
                     ============  ============  ============  ============


Ocean Rig UDW Inc.
------------------

                    Three Months  Three Months   Year Ended    Year Ended
(Expressed in           Ended         Ended     December 31,  December 31,
 Thousands of U.S.  December 31,  December 31,      2009          2010
 Dollars)               2009          2010

Net income/(loss)         22,704        53,329       115,754       134,761

Add: Net interest
 expense                   1,444          (707)       39,861        (4,046)
Add: Depreciation
 and amortization         16,427        17,831        75,348        75,092
Add: Income taxes          2,938         5,640        12,797        20,436
Add: Loss/ (gain)
 on interest rate
 swaps                    (3,129)      (12,478)       (4,826)       40,303

                    ------------  ------------  ------------  ------------
Adjusted EBITDA           40,384        63,615       238,934       266,546
                    ============  ============  ============  ============

Conference Call and Webcast: Thursday, March 31, 2011

As announced, the Company's management team will host a conference call, on Thursday, March 31, 2011 at 8:00 AM Eastern Daylight Time to discuss the Company's financial results.

Conference Call details:

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote "DryShips."

A replay of the conference call will be available until April 2, 2011. The United States replay number is 1(866) 247-4222; from the UK 0(800) 953-1533; the standard international replay number is (+44) (0) 1452 550 000 and the access code required for the replay is: 2133051#.

Slides and audio webcast:

There will also be a simultaneous live webcast over the Internet, through the DryShips Inc. website (www.dryships.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About DryShips Inc.

DryShips Inc., based in Greece, is an owner of drybulk carriers and tankers that operate worldwide. Through its majority owned subsidiary, Ocean Rig UDW, Inc., DryShips owns and operates 6 offshore ultra deepwater drilling units, comprising of 2 ultra deepwater semisubmersible drilling rigs and 4 ultra deepwater drillships, 2 of which will be delivered to the company during 2011. As of the day of this release, DryShips owns a fleet of 38 drybulk carriers (including newbuildings), comprising 7 Capesize, 29 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.4 million tons, and 12 tankers (including newbuildings), comprising 6 Suezmax and 6 Aframax, with a combined deadweight tonnage of over 1.6 million tons.

DryShips Inc.'s common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "DRYS."

Visit the Company's website at www.dryships.com

Forward-Looking Statement

Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charterhire and drilling dayrates and drybulk carrier, tanker vessel, drilling rig and drillship values, failure of a seller to deliver one or more drilling units or drybulk carrier or tanker vessels, failure of a buyer to accept delivery of a drilling unit or vessel, inability to procure acquisition financing, default by one or more charterers of our ships, changes in demand for drybulk commodities or oil or petroleum products, changes in demand that may affect attitudes of time charterers and customer drilling programs, scheduled and unscheduled drydockings and upgrades, changes in our operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips Inc. with the US Securities and Exchange Commission.

Contact Information

  • Investor Relations / Media:
    Nicolas Bornozis
    Capital Link, Inc. (New York)
    Tel. 212-661-7566
    E-mail: dryships@capitallink.com