th quarter ended december 31, 2010 earnings...
TRANSCRIPT
![Page 1: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/1.jpg)
DryShips Inc.4th Quarter Ended December 31, 2010Earnings Presentationg
NASDAQ: “DRYS”March 31st, 2011
NASDAQ: “DRYS”
![Page 2: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/2.jpg)
Forward Looking Statements
Matters discussed in this presentation may constitute forward-looking statements. Forward-lookingstatements reflect the Company’s current views with respect to future events and financial performanceand may include statements concerning plans, objectives, goals, strategies, future events or
f fperformance, and underlying assumptions and other statements, which are other than statements ofhistorical facts.
The forward-looking statements in this release are based upon various assumptions, many of whichare based, in turn, upon further assumptions, including without limitation, management's examination
f hi t i l ti t d d t t i d i d d th d t il bl f thi d tiof historical operating trends, data contained in our records and other data available from third parties.Although DryShips Inc. believes that these assumptions were reasonable when made, because theseassumptions are inherently subject to significant uncertainties and contingencies which are difficult orimpossible to predict and are beyond our control, DryShips Inc. cannot assure you that it will achieveor accomplish these expectations, beliefs or projections. Important factors that, in the Company’s view,p p , p j p , p y ,could cause actual results to differ materially from those discussed in the forward-looking statementsinclude the strength of world economies and currencies, general market conditions, including changesin charterhire rates and vessel values, changes in demand that may affect attitudes of time charterersto scheduled and unscheduled drydocking, changes in DryShips Inc.'s operating expenses, includingbunker prices dry docking and insurance costs or actions taken by regulatory authorities potentialbunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potentialliability from pending or future litigation, domestic and international political conditions, potentialdisruption 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 Securitiesand Exchange Commission
DryShips Inc. Page 2
and Exchange Commission.
![Page 3: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/3.jpg)
Agenda
Fourth Quarter 2010 HighlightsFourth Quarter 2010 HighlightsFourth Quarter 2010 HighlightsFourth Quarter 2010 Highlights
Company OverviewCompany Overview
Industry OverviewIndustry Overview
Financial Overview & ConclusionFinancial Overview & Conclusion
Q&AQ&AQ&AQ&A
DryShips Inc.
![Page 4: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/4.jpg)
Q4 2010 Results
Reported Net Income: $ 99.7 million or $ 0.31 basic earnings per share
Unusual Events Affecting Q4 Results:
$ 10.2 mNon-cash amortization of debt issuance costs, including those relating to our convertible senior notes
Plus
($ 26.9 m)Gains incurred on interest rate swapsMinus
Adjusted Net Income : $ 83.0 million or $ 0.25 basic earnings per share
DryShips Inc. Page 4
![Page 5: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/5.jpg)
OCR UDW Financing Completed
Received signed commitments from all lenders participating in a new $800 million Syndicated SecuredTerm Loan Facility to partially finance the construction costs of the OCR Corcovado and Olympia
Facility has a 5-year term, 12-year repayment profile and bears interest at LIBOR plus a margin
Lead Arrangers: Nordea Bank and ABN Amro
Also participating: GIEK, DVB Bank, Deutsche Bank and NBG
Facility is subject to completion of definitive documentation, which the Company expects tocomplete in the coming weeks
Portion of the new facility will be used to prepay the $325 million Bridge Loan Facility withy p p y g yDeutsche Bank
Received signed consents from all participating lenders to restructure the $1.1 billion Secured TermLoan Facility led by Deutsche Bank
Reduced the maximum amount permitted to be drawn from $562 to $495 million under each facility
Full draw downs will be permitted for the OCR Poseidon based upon the fixture of the drillshipunder the drilling contract with Petrobras
Cash collateral deposited for this vessel will be released
In addition to the Dryships Guarantee, Ocean Rig UDW will provide an unlimited recourseguarantee and will be subject to certain financial covenants that will apply to each quarter
For the OCR Mykonos, the Company will have up to one month prior to delivery to execute anacceptable drilling contract in order to draw down the loan
DryShips Inc. Page 5
Restructuring is subject to completion of definitive documentation, which the Company expects tocomplete in the coming weeks
![Page 6: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/6.jpg)
OCR UDW – Firing on all Cylinders
Entered into an agreement with a major South Korean shipyard, for the option to construct up to fourUDW drillships
New orders would be sisterships of the drillships under construction, with further upgrades
Each of the four options can be declared by November 2011
Deliveries range from 2013 until 2014
Total project cost estimated at about $600 million per drillship, excluding financing costs
Option agreement was novated to Ocean Rig UDW at cost, in December 2010
Entered into firm contracts with Cairn Energy PLC for the Leiv Eiriksson and the OCR Corcovado, andwith Petrobras Tanzania for the OCR Poseidon
O Ri UDW l d it ff i b f i t l t f h ith t t l d f Ocean Rig UDW closed its offering by way of a private placement of shares with total gross proceeds of$500 million with DryShips retaining 78% of Ocean Rig UDW
Took delivery of the OCR Corcovado, in January 2011
Took delivery of the OCR Olympia, in March 2011
DryShips Inc. Page 6
![Page 7: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/7.jpg)
Tanker Segment – Up & Running
Purchased 12 high-spec newbuilding tankers at a total purchase price of $770 million
Includes $3 million per vessel in extra items
Delivery installments of about 70% of each vessel’s price
Executed definitive documentation for a $70 million Secured Term Loan Facility with an internationallender to partially finance the construction costs of the newbuilding tankers, M/T Saga and M/TVilamoura
Facility has a 5-year term, 15-year repayment profile and bears interest at LIBOR plus a marginy y , y p y p p g
Company has drawn the full amount available under the facility
Took delivery of the newbuilding Aframax tanker M/T Saga, in January 2011
Took delivery of the newbuilding Suezmax tanker M/T Vilamoura, in March 2011
Received firm commitment from an international lender for a $32.3 million Secured Term Loan Facility topartially finance the construction cost of the newbuilding tanker, Daytona, scheduled to be delivered inMay 2011
Facility has a 6-year term, 15-year repayment profile and bears interest at LIBOR plus a margin
Facility is subject to completion of definitive documentation, which the Company expects tocomplete in the coming weeks
DryShips Inc. Page 7
complete in the coming weeks
![Page 8: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/8.jpg)
Drybulk Carriers
M/V Oliva was reported to have run aground on Nightingale Island, in the South Atlantic Ocean
Salvors report that there are no salvage prospects for the vessel or the cargo
Expect that all losses will be covered by insurance
A US District Court in Maryland resolved a case in which Cardiff, the former manager of the M/V Capitola,entered into a comprehensive settlement with the US DoJ in connection with an investigation intoMARPOL violations involving the vessel
Court applied a fine of approximately $2.5 million and instructed Cardiff to implement anpp pp y pEnvironmental Compliance Plan
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 As of February 16, 2011, KLC entered into a rehabilitation proceeding under the protection of theKorean Courts
Company reached an agreement with the receivers of KLC to restructure the charters at a baserate plus a profit share component
Agreement requires that a certain portion of outstanding hire be paid in full and the remainingamount will be filed as an unsecured claim, satisfaction of which will be subject to therehabilitation proceedings in the Korean Bankruptcy Courts
DryShips Inc. Page 8
![Page 9: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/9.jpg)
Agenda
Fourth Quarter 2010 HighlightsFourth Quarter 2010 Highlights
Company OverviewCompany OverviewCompany OverviewCompany Overview
Industry OverviewIndustry Overview
Financial Overview & ConclusionFinancial Overview & Conclusion
Q&AQ&AQ&AQ&A
DryShips Inc.
![Page 10: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/10.jpg)
Drybulk Employment Status – Building up Leverage to Spot
80%
% Charter coverage Annual Dry Bulk fixed revenue ($m) Average fixed rate1 ($k/d)
$351 $45,800$43,800
36%
$224
$106
$ ,
$33,800
18%
2011 2012 2013
$
2011 2012 2013 2011 2012 2013
Spot vessels
7.1 23.7 30.3
Total revenue from time charters for the next 3 years is about $680 million
DryShips Inc. Page 10
y1 Represents rates before commission
![Page 11: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/11.jpg)
Tankers – High Spec Tankers Delivered On Time
Aframax vessels
M/T Saga delivered in January 2011
M/T Daytona – Q2 2011
M/T Belmar – Q4 2011
M/T Calida – Q4 2011
M/T Alicante – Q2 2012
M/T Mareta – Q3 2012 M/T Mareta – Q3 2012
Suezmax vessels
M/T Vilamoura delivered in March 2011
M/T Lipari – Q2 2012
M/T Petalidi – Q2 2012
M/T Bordeira – Q1 2013
M/T Esperona – Q3 2013
DryShips Inc. Page 11
M/T Blanca – Q4 2013
![Page 12: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/12.jpg)
UDW Contract Backlog – Leverage to Rising Market
Contracts in place
Leiv Eirikson Petrobras Cairn
Eirik Raude Tullow - 3 years (commenced October 2008)
Ocean Rig Corcovado
Ocean Rig Olympia
Ocean Rig Poseidon
Ocean Rig M konos
+ OptionB&S
NB Delivery July 2011
NB D li S t b 2011
Cairn
Petrobras - 20 months
Vanko / Lukoil - 1 yr + 1yr option
Unit Year Built Redelivery Customer Operating Area Maximum dayrate ($k) Backlog ($m)Leiv Eiriksson 2001 Apr – 11 Petrobras Black Sea $ 583 $ 51
Ocean Rig Mykonos
2011 2012 2013
NB Delivery September 2011
Eirik Raude 2002 Oct – 11 Tullow Off-shore Ghana $ 665 $ 186
OCR Olympia 2011 Q2 – 12 Vanco / Lukoil W. Africa $ 415 $ 160
Eirik Raude 2002 Q2 – 12 Borders & Southern Falklands $ 540 $ 77
OCR Corcovado 2011 Q4 – 11 Cairn Greenland $ 560 $ 142
OCR Poseidon 2011 Q2 – 13 Petrobras Tanzania $ 632 $ 378OCR Poseidon 2011 Q2 13 Petrobras Tanzania $ 632 $ 378
Leiv Eiriksson 2001 Q4 – 11 Cairn Greenland $ 550 $ 95
Total $ 1,089
Notes:
DryShips Inc.
• Backlog as of 31/12/2010• Vanco/Lukoil and Borders & Southern backlogs do not assume extension of 1-yr and 135 days options respectively
Page 12
![Page 13: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/13.jpg)
Drillships Construction Update – On Schedule
Construction for drillships proceeding as per schedule
Ocean Rig Corcovado (Hull 1837), delivered on January 3rd, upgraded to winterizedunit and sailed
Ocean Rig Olympia (Hull 1838) , delivered March 30th
Ocean Rig Poseidon (Hull 1865) , on schedule for delivery in July
Ocean Rig Mykonos (Hull 1866), on schedule for delivery in September
DryShips Inc. Page 13
![Page 14: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/14.jpg)
DryShips Inc Strategy – Three Standalone Segments
Stand alone entity
Capitalization
Opportunistic
Valuation of long-term charters
DrybulkUDW Drilling
proceeding
Increase backlog
Fleet growth
term charters
Fleet renewal
Take advantage when market
Increase liquidity (float)
improves
Tankers
Spin-off / IPO
Dividend play
DryShips Inc. Page 14
p y
![Page 15: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/15.jpg)
Agenda
Fourth Quarter 2010 HighlightsFourth Quarter 2010 Highlights
Company OverviewCompany Overview
Industry OverviewIndustry OverviewIndustry OverviewIndustry Overview
Fi i l O i & C l iFi i l O i & C l i
DrybulkDrybulk
Financial Overview & ConclusionFinancial Overview & Conclusion
Q&AQ&A
DryShips Inc.
Q&AQ&A
![Page 16: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/16.jpg)
Drybulk Rates – Capesize Rates in the Doldrums
200,000
250,000
(USD / day)
Drybulk Average T/C Routes – Since 2005
0
50,000
100,000
150,000
Jan-05 Sep-05 May-06 Jan-07 Sep-07 Jun-08 Feb-09 Oct-09 Jun-10 Mar-11
Capesize Panamax Supramax
Drybulk Average T/C Routes – Since beginning of 2010
40,00050,00060,00070,000
(USD / day)
010,00020,00030,000
Jan-10 Feb-10 Apr-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Feb-11
DryShips Inc.
Capesize Panamax SupramaxSource: Clarkson
Page 16
![Page 17: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/17.jpg)
Drybulk Net Fleet Growth – Achilles Heel
100(million DWT)
Yearly Net Fleet Changes
60
80
40
0
20
-202000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD
2011
Deliveries Sold for Scrap Losses Misc Additions Misc Removals Net Fleet Change
DryShips Inc.
Deliveries Sold for Scrap Losses Misc. Additions Misc. Removals Net Fleet Change
Source: Clarkson
Page 17
![Page 18: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/18.jpg)
Drybulk Deliveries – Significant Slippage but….
140
160
140
160
Actual vs. scheduled deliveries in terms of DWT in 2010 Actual vs. scheduled deliveries in terms of DWT in 2011(million DWT) (million DWT)
100
120
140
100
120
140
Implie
slippage:
60
80
60
80
ed : 37%
Actu79
Assum
ing 2w
e expect abto b
20
40
20
40
ual deliveries of 9 m
illion DW
T
2010 level slippagbout 81 m
illion De delivered
0
Janu
aryFe
bruary
March
April
May
June July
Augus
tSep
tembe
rOcto
ber
Novem
ber
Decem
ber
Total Scheduled in the beginning of 2010
0
Janu
aryFe
bruary
March
April
May
June July
Augus
tSep
tembe
rOcto
ber
Novem
ber
Decem
ber
Total Scheduled in the beginning of 2011A t l D li d
ge, W
T
DryShips Inc.
ota Sc edu ed t e beg g o 0 0Actual Delivered
Actual Delivered
Page 18
Source: Clarkson
![Page 19: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/19.jpg)
Drybulk Demand Growth – Solid Fundamentals
(million tons)
1,200
1,400
1,600
World Crude Steel Production
200
400
600
800
1,000
02008 2009 2010 2011E
Chinese steel production Rest of the World
Seaborne Coal Trade (Coking + Steam)Seaborne Iron Ore Trade
600
800
1,000
1,200
600
800
1,000
1,200(million tons) (million tons)
0
200
400
2008 2009 2010 2011E
China Iron Ore Imports Rest of the World Imports
0
200
400
2008 2009 2010 2011E
China Coal Imports Rest of the World
DryShips Inc.
p p p
Source: SSY
Page 19
![Page 20: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/20.jpg)
Urbanization in China and India – Long Terms Story Intact
50,000
60,000US - $55,600 in 2025
Urbanization of China China’s GDP per capita 2000 – 2025
1,200
1,600USD / Capita(in million)
10 000
20,000
30,000
40,000
400
800
1,200
Projected India and China finished steel demandUrbanization of India
0
10,000
2000 2009 2025 projection
01990 2005 2025 projection
Urbanized population in China Total Population in China
800
1,200
1,600
600
800
1,000
CAGR: 3.4%
(in million) (in mtpa)
0
400
800
1990 2005 2025 projection0
200
400
1990 1995 2000 2005 2010 2015 2025
CAGR: 8.0%
DryShips Inc.
Source: BHP Billiton, McKinsey 2011, Global Insight
Page 20
p j
Urbanized population in India Total Population in India China's demand India's demand
![Page 21: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/21.jpg)
Agenda
Fourth Quarter 2010 HighlightsFourth Quarter 2010 Highlights
Company OverviewCompany Overview
Industry OverviewIndustry OverviewIndustry OverviewIndustry Overview
Fi i l O i & C l iFi i l O i & C l i
TankersTankers
Financial Overview & ConclusionFinancial Overview & Conclusion
Q&AQ&A
DryShips Inc.
Q&AQ&A
![Page 22: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/22.jpg)
Tanker Rates – Volatility Due Geo-Political Events
200 000
250,000
(USD / day)
Tanker Average Earnings (TCE) – Since 2005
0
50,000
100,000
150,000
200,000
0Jan-05 Sep-05 May-06 Jan-07 Sep-07 Jun-08 Feb-09 Oct-09 Jun-10 Mar-11
VLCC Suezmax Aframax
Tanker Average Earnings (TCE) – Since beginning of 2010
30,000
40,00050,000
60,000
(USD / day)
010,000
20,000
Sep-10 Oct-10 Nov-10 Dec-10 Dec-10 Jan-11 Feb-11 Mar-11
DryShips Inc.
VLCC Suezmax Aframax
Source: Clarkson
Page 22
![Page 23: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/23.jpg)
Tankers Net Fleet Growth – Single Hull Fleet Gone
(million DWT)
Yearly Net Fleet Changes
50
60
30
40
50
10
20
-20
-10
0
-302000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD
2011
Deliveries Sold for Scrap Losses Misc Additions Misc Removals Net Fleet Change
DryShips Inc.
Source: Clarkson
Page 23
Deliveries Sold for Scrap Losses Misc. Additions Misc. Removals Net Fleet Change
![Page 24: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/24.jpg)
Tankers Deliveries – Significant Slippage
Actual vs. scheduled deliveries in terms of DWT in 2010
60
70
Actual vs. scheduled deliveries in terms of DWT in 2011
60
70(million DWT) (million DWT)
50
60
50
60
Implied
slippage: 36%
30
40
30
40
Actual39 m
Assum
ing 2w
e expect abto b
10
20
10
20
deliveries of m
illion DW
T
2010 level slippagbout 38 m
illion Dbe delivered
0
Janu
aryFe
bruary
March
April
May
June July
Augus
tSep
tembe
rOcto
ber
Novem
ber
Decem
ber
Total Scheduled in the beginning of 2010
0
Janu
aryFe
bruary
March
April
May
June July
Augus
tSep
tembe
rOcto
ber
Novem
ber
Decem
ber
Total Scheduled in the beginning of 2011
ge, D
WT
DryShips Inc. Page 24
Source: ClarksonActual Delivered Actual Delivered
![Page 25: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/25.jpg)
Oil Consumption – Demand Growth Intact
3 0
4.0
(million barrels per day)
Year-on-year change in Global Oil Demand
0 0
1.0
2.0
3.0
-1.0
0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E
Year-on-year change in Chinese Oil Demand
0 6
0.8
1
1.2(million barrels per day)
0
0.2
0.4
0.6
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E
DryShips Inc.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E
Source: IEA
Page 25
![Page 26: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/26.jpg)
Oil Supply – Non-OPEC Production Growth Slowing
88
90
1.00
2.00
Global Oil Supply OPEC vs. Non-OPEC Production Growth(million barrels per day)(million barrels per day)
82
84
86
-2.00
-1.00
0.00
80
82
2007 2008 2009 2010
-3.002007 2008 2009 2010 2011 2012
OPEC production Non-OPEC production
OECD Inventories And Forward Demand CoverGlobal Supply of Oil by Region 2010
Other non-OECD29%
Total OPEC33%
2,700
2,800
60
65(million barrels) (days)
Former Soviet Union16%
OECD22%
2,400
2,500
2,600
Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 1145
50
55
DryShips Inc.
22% Q1-05 Q3-05 Q1-06 Q3-06 Q1-07 Q3-07 Q1-08 Q3-08 Q1-09 Q3-09 Q1-10 Q3-10 Q1-11
OECD Inventories Days of Forward Demand CurveSource: SSY, Jefferies, Deutsche Bank, OECD, OPEC, EIA, OGJ, IEA
Page 26
![Page 27: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/27.jpg)
Libya – Saudi Arabia Holds All the Cards
0.26
0.33
3.50
Nigeria
UAE
Saudi Arabia
Libya’s Oil Production and Consumption OPEC Spare Capacity vs Jan 2011 Supply
1.6
2
(million barrels per day) (million barrels per day)
0.05
0.14
0.18
0.19
0.22
0.23
Iraq
Venezuela
Qatar
Angola
Libya
Kuwait
g
0.4
0.8
1.2
0.02
0.03
0.04
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Ecuador
Algeria
Iran
Libya's Seaborne Crude Exports – by Ship TypeLibya's Seaborne Crude Exports – by Country
02000 2002 2004 2006 2008 2010
Consumption Crude Oil Production Total Oil Production
Suezmax17%
VLCC3%Panamax
2%
Italy37%Greece
5%
Other12%USA
3%UK4%
Aframax78%France
19%
China10%
Spain10%
5%
DryShips Inc.
19%
Source: Deutsche Bank, OECD, OPEC, EIA, OGJ, IEA
Page 27
![Page 28: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/28.jpg)
Agenda
Fourth Quarter 2010 HighlightsFourth Quarter 2010 Highlights
Company OverviewCompany Overview
Industry OverviewIndustry OverviewIndustry OverviewIndustry Overview
Fi i l O i & C l iFi i l O i & C l i
Japan ImpactJapan Impact
Financial Overview & ConclusionFinancial Overview & Conclusion
Q&AQ&A
DryShips Inc.
Q&AQ&A
![Page 29: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/29.jpg)
Japan – Disaster Will Have Long Lasting Effects
Short-term
Manufacturing losses
Immediate and Long Term Effects
Energy
Negative on nuclear Economic growth weakens
Reduced Consumption
Long-term
f
Negative on nuclear
Positive on LNG
Positive on Coal
Japan becomes a net petroleum product importer
Japanese Coal and Iron Ore Imports Japanese Energy Consumption (2009)(in million)
Infrastructure rebuilding
Change in Energy Mix
importer
10
12
14
16
18
(in million)
Hydro4%Nuclear
13%
Oil43%
0
2
4
6
8
Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11Coal23%
Natural Gas17%
43%
DryShips Inc.
Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10 Jan 11
Coal Imports Iron Ore Imports
Source: Clarkson, Wells Fargo, Japan Ministry of Economy
Page 29
23%
![Page 30: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/30.jpg)
Agenda
Fourth Quarter 2010 HighlightsFourth Quarter 2010 Highlights
Company OverviewCompany Overview
Industry OverviewIndustry OverviewIndustry OverviewIndustry Overview
Fi i l O i & C l iFi i l O i & C l i
UDW DrillingUDW Drilling
Financial Overview & ConclusionFinancial Overview & Conclusion
Q&AQ&A
DryShips Inc.
Q&AQ&A
![Page 31: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/31.jpg)
High Oil Prices – Fundamentals + Conflicts
Analysts expect high oil prices for the near future, mainly driven by:
Demand growth in emerging markets
Declining production in mature provinces (e.g. North Sea, Mexico)
Slowing non-OPEC production growth
Brent (USD/bbl)
120
140
160
Brent (USD/bbl)
60
80
100
0
20
40
Jan-2005 Sep-2005 May-2006 Jan-2007 Sep-2007 Jun-2008 Feb-2009 Oct-2009 Jun-2010 Mar-2011
DryShips Inc.
Jan-2005 Sep-2005 May-2006 Jan-2007 Sep-2007 Jun-2008 Feb-2009 Oct-2009 Jun-2010 Mar-2011
Page 31
![Page 32: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/32.jpg)
E&P spending is accelerating Onshore and shallow water oil reserves are mature; deepwater and ultra-deepwater are the new frontiers
Oil companies have announced plans for increased CAPEX budgets in 2011 vs 2010
Aggregate increase in CAPEX being 15% across the group
Budgets are likely to increase further during 2011, with an increase of around 15-20% for 2011 more likely
Petrobras announced E&P growth of 16.5%
BG, Chevron and ConocoPhillips are all increasing capex by 25% or more
Oil companies using on average $58 per barrel in their models
Technological innovations have improved the economic viability of deepwater developments
20%
Oil Demand & Spare Capacity and Global E&P CAPEX Growth in 2011 E&P Spending Budgets
15%15%16%
13%
8%
12%
16%
0%
4%
8%
Super Majors &Majors
National OilCompanies
Independents Average
DryShips Inc.
Source: Pareto, SEB
Page 32
![Page 33: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/33.jpg)
UDW drilling – A Rising Market Historical dayrate development for ultra deepwater rigs
Rates bottomed out in Q3 2010 in the low ~$400,000 per day range and now trading up
Source: Pareto Research
Management estimate of current market rate: $475,000 per day Currently more than 15 open enquiries for projects in Brazil, West Africa, North Sea, Mediterranean, Asia, etc Brazil expected to play a critical role in balancing ultra-deepwater demand and supply despite ordering some rigs at
domestic yards G lf of Me ico drilling permits being handed o t Latent demand from GoM co ld be a game changer
DryShips Inc.
Gulf of Mexico drilling permits being handed out. Latent demand from GoM could be a game changer
Page 33
![Page 34: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/34.jpg)
Ultra-deepwater units availability tightening
DryShips Inc.
Source: Fearnley Offshore
Page 34
![Page 35: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/35.jpg)
Agenda
Fourth Quarter 2010 HighlightsFourth Quarter 2010 Highlights
Company OverviewCompany Overview
Industry OverviewIndustry Overview
Financial Overview & ConclusionFinancial Overview & ConclusionFinancial Overview & ConclusionFinancial Overview & Conclusion
Q&AQ&AQ&AQ&A
DryShips Inc.
![Page 36: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/36.jpg)
Summary Financials
Three months ended December 31,
(USD in millions, except number of vessels and rigs) 2009 2010
Average number of dry bulk vessels 39.0 37.0 Average number of drilling rigs 2 0 2 0Average number of drilling rigs 2.0 2.0
Total revenue $196.4 $215.8
Adjusted EBITDA(a) $109.5 $130.0 Net interest expense $16.2 $3.9
December 31, 2009 December 31, 2010
Total cash $1,044.0 $1,165.4 Total debt $2,684.7 $2,719.7 Net debt $1,640.7 $1,554.3 Sh h ld ' it $2 811 2 $3 361 9Shareholders' equity $2,811.2 $3,361.9Total capitalization $5,495.9 $6,081.6
Credit statistics Adj. EBITDA / Net interest expense 6.8 33.3 Debt to capitalization 49% 45% Net debt to capitalization 30% 26%
( ) Adj d EBITDA i b f i d i i d i i i l i d
DryShips Inc.
(a) Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization, gains or losses on interest rate swaps and contract termination fees and forfeiture of vessels deposits
Page 36
![Page 37: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/37.jpg)
CAPEX
Yard Commitments – as of 31/12/2010(USD thousands)
FY2011 FY2012 FY2013 TotalDrillships:Hull 1838 287,494 - - 287,494Hull 1865 357,154 - - 357,154Hull 1866 408,751 - - 408,751Total 1,053,399 - - 1,053,399
Drybulk Vessels:Panamax 1 26,440 - - 26,440Panamax 2 9,915 16,525 - 26,440
36,355 16,525 - 52,880
Tanker Vessels:Saga 45,600 - - 45,600Vilamoura 54,400 - - 54,400Petalidi 6,800 54,400 - 61,200Lipari 6,800 54,400 - 61,200Bordeira - 13,600 47,600 61,200Esperona - 6,800 54,400 61,200Blanca - 6,800 54,400 61,200Daytona 42,750 - - 42,750Belmar 45,600 - - 45,600Calida 51,300 - - 51,300Alicante 5,700 45,600 - 51,300Mareta - 51,300 - 51,300
258,950 232,900 156,400 648,250
DryShips Inc. Page 37
Total Yard Commitments 1,348,704 249,425 156,400 1,754,529
![Page 38: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/38.jpg)
DEBT
Proforma Debt Repayment Schedule – as of 31/12/2010
(USD thousands)
Drybulk Segment Drilling Rig Segment Total
FY 2011 172,270 568,334 740,604
Long-term Debt
FY 2012 113,762 91,614 205,376
FY 2013 109,772 474,114 583,886
DryShips Inc. Page 38
![Page 39: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/39.jpg)
Strong Contracted Cashflow - Upside from Drillships & Spot Drybulk and Tankers($ in millions)
$711
$822
$ 03$800
$1,000Fixed EBITDA Estimates
$430
$42
$436
$711 $703
$600
$239$166
$220
$37
$589
$200
$400
$166$77$37
$02011 2012 2013
Ultra Deep Water (Spot - assumed fixed at market) **Ultra Deep Water (fixed contracts) *
Notes:− EBITDA has been estimated on the basis of Net Revenues; Drydock expenses are not included in calculation of EBITDA. Cash G&A related to the fixed business is
taken into account in calculation of EBITDA− Assumed utilization rate of 95% for the rigs and drillships− * Estimates only include fixed contracts− ** Spot – assumed fixed at market EBITDA: All units as they become available, are assumed fixed upon delivery at $475,000 per day (with 1 month mobilization
period, and assumed OPEX of $150,000 per day)
Ultra Deep Water (fixed contracts) Dry Cargo Fixed
DryShips Inc. Page 39
− Assumes no EBITDA for the spot drybulk and tanker vessels:− Drybulk spot vessels: 7.1 in 2011, 23.7 in 2012 and 30.3 in 2013− Tanker spot vessels: 2.6 in 2011, 7.3 in 2012 and 10.3 in 2013
![Page 40: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/40.jpg)
DryShips Inc Strategy – Three Standalone Segments
Stand alone entity
Capitalization
Opportunistic
Valuation of long-term charters
DrybulkUDW Drilling
proceeding
Increase backlog
Fleet growth
term charters
Fleet renewal
Take advantage when market
Increase liquidity (float)
improves
Tankers
Spin-off / IPO
Dividend play
DryShips Inc. Page 40
p y
![Page 41: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/41.jpg)
INDUSTRY OVERVIEW APPENDIX
DryShips Inc.
![Page 42: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/42.jpg)
Appendix 1 – Condensed Consolidated Income Statements (unaudited)(Expressed in Thousands of U.S. Dollars- except for share and per share data)
Three Months Ended
December 31,
Year Ended
December 31,
2009 2010 2009 2010 (As restated) (As restated)
REVENUES: Voyage revenues $ 119,332 113,521 444,385 $ 457,804y g , , , ,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 L / ( i ) l f l 708 (2 045) (9 435)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)
(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
DryShips Inc. Page 42
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
![Page 43: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/43.jpg)
Appendix 2 – Condensed Consolidated Balance Sheets (unaudited)
(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 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’ EQUITYLIABILITIES 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 1,988,460g pOther 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
DryShips Inc. Page 43
Total equity 2,811,170 3,898,157 Total liabilities and stockholders’ equity $ 5,805,623 $ 6,983,122
![Page 44: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/44.jpg)
Appendix 3 – Summary Operating Data(Dollars in thousands, except average daily results)
Three Months Ended
December 31, Year Ended
December 31, 2009 2010 2009 2010A b f l (1) 39 0 37 0 38 1 37 2Average number of vessels(1) 39.0 37.0 38.1 37.2Total voyage days for vessels(2) 3,535 3,341 13,660 13,372Total calendar days for vessels(3) 3,588 3,404 13,914 13,583Fleet utilization(4) 98.5% 98.1% 98.2% 98.5%Time charter equivalent(5) 31,683 31,929 30,425 32,184Vessel operating expenses (daily)(6) 5,553 5,577 5,434 5,245Vesse ope at g e pe ses (da y) 5,553 5,577 5, 3 5, 5
(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) T l d f fl h l d h l i i f h l i d f ff hi(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 perioddetermined 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
DryShips Inc. Page 44
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.
![Page 45: th Quarter Ended December 31, 2010 Earnings Presentationdryships.irwebpage.com/files/drys4q2010.pdf · Q4 2010 Results Reported Net Income: $ 99.7 million or $ 0.31 basic earnings](https://reader036.vdocuments.net/reader036/viewer/2022071212/602531dd1d42fe4341283d12/html5/thumbnails/45.jpg)
Appendix 4 – Fleet Profile Bulk Carriers 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
Year Gross rate Redelivery
Built DWT Type Per day Earliest Latest
Supramax:
Galveston ex. Pachino 2002 51,201 Supramax Spot
Paros I 2003 51,201 Supramax $27,135 Oct-11 May-12
Newbuildings
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
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
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
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 Aframaxg
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
,
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
Notes:
g , , g
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
DryShips Inc. Page 45
• Fleet List as of March 29, 2011
• * Based on a synthetic time charter
, $ , p
Sorrento 2004 76,633 Panamax $17,300 Sep-11 Dec-11
Toro 1995 73,035 Panamax $16,750 May-11 Jul-11