th quarter ended december 31, 2010 earnings...

DryShips Inc.4th Quarter Ended December 31, 2010Earnings Presentationg

NASDAQ: “DRYS”March 31st, 2011

NASDAQ: “DRYS”

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.

and Exchange Commission.

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.

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.

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.

Restructuring is subject to completion of definitive documentation, which the Company expects tocomplete in the coming weeks

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.

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.

complete in the coming weeks

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.

Agenda

Fourth Quarter 2010 HighlightsFourth Quarter 2010 Highlights

Company OverviewCompany OverviewCompany OverviewCompany Overview



Q&AQ&AQ&AQ&A

DryShips Inc.

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.

y1 Represents rates before commission

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.

M/T Blanca – Q4 2013

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

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.

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.

p y

Agenda



Industry OverviewIndustry OverviewIndustry OverviewIndustry Overview

Fi i l O i & C l iFi i l O i & C l i

DrybulkDrybulk


Q&AQ&A

DryShips Inc.

Q&AQ&A

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

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

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

Source: Clarkson

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

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

p j

Urbanized population in India Total Population in India China's demand India's demand

Agenda





TankersTankers


Q&AQ&A

DryShips Inc.

Q&AQ&A

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

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

Deliveries Sold for Scrap Losses Misc. Additions Misc. Removals Net Fleet Change

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


0

Janu

aryFe

bruary

March

April

May

June July

Augus

tSep

tembe

rOcto

ber

Novem

ber

Decem

ber


ge, D

WT

DryShips Inc.

Source: ClarksonActual Delivered Actual Delivered

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

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

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

Agenda





Japan ImpactJapan Impact


Q&AQ&A

DryShips Inc.

Q&AQ&A

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

23%

Agenda





UDW DrillingUDW Drilling


Q&AQ&A

DryShips Inc.

Q&AQ&A

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


DryShips Inc.


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

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

Ultra-deepwater units availability tightening

DryShips Inc.

Source: Fearnley Offshore

Agenda




Financial Overview & ConclusionFinancial Overview & ConclusionFinancial Overview & ConclusionFinancial Overview & Conclusion

Q&AQ&AQ&AQ&A

DryShips Inc.

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

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.

Total Yard Commitments 1,348,704 249,425 156,400 1,754,529

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.

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.

− 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

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.

p y

INDUSTRY OVERVIEW APPENDIX

DryShips Inc.

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.

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

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.

Total equity 2,811,170 3,898,157 Total liabilities and stockholders’ equity $ 5,805,623 $ 6,983,122

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.

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.

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.

• 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

th quarter ended december 31, 2010 earnings...

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