-- 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