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Friday, July 21, 2017

Dryships Post 2Q Loss

August 8, 2015

George Economou, Chairman and Chief Executive Officer

George Economou, Chairman and Chief Executive Officer

 

DryShips Inc. an international provider of marine transportation services for drybulk and petroleum cargoes, and through its affiliate, Ocean Rig UDW Inc., or Ocean Rig, of offshore deepwater drilling services, today announced its unaudited financial and operating results for the second quarter ended June 30, 2015.

Second Quarter 2015 Financial Highlights

For the second quarter of 2015, the Company reported a net loss of $1.44 billion, or $2.17 basic and diluted loss per share.
             Included in the second quarter 2015 results are:

             - A one-time non-cash loss of $1.35 billion, or $2.03 per share, as a result of the deconsolidation of Ocean Rig.

             - Impairment charge on one drybulk vessel, of $83.9 million, or $0.13 per share.

             - Other non-cash losses related to the previously announced settlement of receivables and new employment entered into with one of our charterers, of $45.8 million, or $0.07 per share.

               Excluding these items, the Company’s net results would have amounted to a net income of $36.5 million, or $0.06 per share. ([1])

The Company reported Adjusted EBITDA of $243.4 million for the second quarter of 2015, as compared to $248.8 million for the second quarter of 2014. ([2])

Recent Highlights

-           On July 30, 2015, the Company reached an agreement with Ocean Rig to exchange the remaining outstanding balance of $80.0 million owed to Ocean Rig under the $120.0 million Exchangeable Promissory Note, for 17,777,778 shares of Ocean Rig owned by the Company.

-           On July 30, 2015, Ocean Rig’s Board of Directors decided to suspend its quarterly dividend until market conditions improve.

-           As of August 6, 2015, the tankers Saga, Belmar, Lipari, Bordeira and Petalidi were delivered to their new owners.

             (1)The net result includes Ocean Rig results up to June 8, 2015, which were also adjusted for the minority interests of 42.24% not owned by DryShips Inc. common stockholders.

             (2)Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net income.

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

“Dryships second quarter results were burdened with one-off non-cash losses mainly associated with the deconsolidation of Ocean Rig. More recently, our stake in Ocean Rig has fallen even further as a result of the settlement of the $120 million promissory note by means of shares of Ocean Rig. Follow-ing the consummation of the transaction, Dryships will continue to remain the largest single share-holder in Ocean Rig with an approximately 40% direct ownership.

“We are currently focused on the delivery of our tankers to their new owners. We have already deliv-ered 3 Suezmax tankers and 2 Aframax tankers and we expect to deliver the remaining 5 tankers by the end of September 2015.

“Going forward, Dryships’ cashflow will be driven solely by the conditions of the drybulk market, given also the recent dividend suspension announced by Ocean Rig. We believe that the recent im-provement in the drybulk market, while helpful, does not significantly change our outlook for a chal-lenging environment in the next 18 months, and we remain prepared for the uncertainty ahead.”

Financial Review: 2015 Second Quarter – Drilling segment included up to June 8, 2015

The Company recorded net loss of $1.44 billion, or $2.17 basic and diluted loss per share, for the three-month period ended June 30, 2015, as compared to a net loss of $5.6 million, or $0.01 basic and diluted loss per share, for the three-month period ended June 30, 2014. Adjusted EBITDA(1) was $243.4 million for the second quarter of 2015, as compared to $248.8 million for the same period in 2014.

For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) amounted to $37.4(3)  million for the three-month period ended June 30, 2015, as compared to $41.7 million for the three-month period ended June 30, 2014. For the tanker segment, net voyage revenues amounted to $39.2 million for the three-month period ended June 30, 2015, as compared to $14.2 million for the same period in 2014. For the offshore drilling segment, revenues from drilling contracts decreased by $117.7 million to $323.7 million for the three-month period ended June 30, 2015, as compared to $441.4 million for the three-month period ended June 30, 2014.

Total vessels’, drilling rigs’ and drillships’ operating expenses and total depreciation and amortization decreased to $136.2 million and to $90.8 million, respectively, for the three-month period ended June 30, 2015, from $213.0 million and $112.7 million, respectively, for the three-month period ended June 30, 2014. Total general and administrative expenses decreased to $31.5 million in the second quarter of 2015, from $41.5 million during the same period in 2014.

Interest and finance costs, net of interest income, amounted to $69.9 million for the three-month period ended June 30, 2015, compared to $86.0 million for the three-month period ended June 30, 2014.

The Time Charter Equivalent(2) , or TCE, rate for our drybulk fleet was $10,813 per day per vessel in the three month period ended June 30, 2015, as compared to $12,064 per day per vessel in the corresponding period of 2014.  The Time Charter Equivalent, or TCE, rate for our tanker fleet was $43,221 per day per vessel in the three month period ended June 30, 2015 which is a significant improvement compared to the $15,650 per day per vessel TCE rate in the corresponding period of 2014.

(1) Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net income.

(2) Time Charter Equivalent is a non-GAAP measure; please see later in this press release for definition.

(3) Does not include accrual for the provision of the purchase options and write off in overdue receivables under certain time charter agreements.

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