Dresser-Rand (DRC) 10-Q 2010 Q1 Quarterly report

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

þ  Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2010

o Transition Report under Section 13 or 15(d) of the Exchange Act

For the Transition Period from                    to                    

Commission file number 001-32586

Dresser-Rand Group Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-1780492
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
West 8 Tower, Suite 1000 10205 Westheimer Road Houston, TX	77042
(Address of principal executive offices)	(Zip Code)

(713) 354-6100

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.þ Yeso No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yeso No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerþ	Accelerated filero	Non-accelerated filero	Smaller reporting companyo
		(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).o Yesþ No

The number of shares of common stock, $.01 par value, outstanding as of April 23, 2010, was 82,530,716.

DRESSER-RAND GROUP INC.
TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Consolidated Statement of Income for the three months ended March 31, 2010 and 2009		3
Consolidated Balance Sheet at March 31, 2010 and December 31, 2009		4
Consolidated Statement of Cash Flows for the three months ended March 31, 2010 and 2009		5
Notes to Unaudited Consolidated Financial Statements at March 31, 2010		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3. Quantitative and Qualitative Disclosure about Market Risk		23
Item 4. Controls and Procedures		23
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		25
Item 6. Exhibits		25
Signatures		26
Exhibits
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

Page 2 of 26

PART I. — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DRESSER-RAND GROUP INC.

CONSOLIDATED STATEMENT OF INCOME

	Three months ended March 31,
	2010			2009
	(Unaudited; $ in millions, except
	per share amounts)
Net sales of products	$	398.5		$	410.9
Net sales of services		103.6			98.0
Total revenues		502.1			508.9
Cost of products sold		287.1			304.3
Cost of services sold		72.9			67.5
Total cost of sales		360.0			371.8
Gross profit		142.1			137.1
Selling and administrative expenses		71.4			67.6
Research and development expenses		6.3			4.0
Plan settlement		—			1.3
Income from operations		64.4			64.2
Interest expense, net		(8.2	)		(7.0	)
Other expense, net		(16.2	)		(4.3	)
Income before income taxes		40.0			52.9
Provision for income taxes		17.7			18.4
Net income	$	22.3		$	34.5
Net income per share
Basic	$	0.27		$	0.42
Diluted	$	0.27		$	0.42
Weighted average shares outstanding — (in thousands)
Basic		81,865			81,573
Diluted		82,243			81,607

See accompanying notes to unaudited consolidated financial statements.

Page 3 of 26

DRESSER-RAND GROUP INC.

CONSOLIDATED BALANCE SHEET

	March 31,			December 31,
	2010			2009
	(Unaudited; $ in millions, except
	share amounts)
Assets
Current assets
Cash and cash equivalents	$	178.9		$	223.2
Accounts receivable, less allowance for losses of $15.3 at 2010 and $14.4 at 2009		259.9			289.8
Inventories, net		321.8			353.0
Prepaid expenses and other		31.2			24.9
Deferred income taxes, net		44.0			45.4
Total current assets		835.8			936.3
Property, plant and equipment, net		272.3			268.9
Goodwill		482.8			486.0
Intangible assets, net		432.1			430.9
Other assets		27.0			28.1
Total assets	$	2,050.0		$	2,150.2
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accruals	$	340.4		$	412.0
Customer advance payments		130.7			165.2
Accrued income taxes payable		12.1			8.1
Loans payable		—			0.1
Total current liabilities		483.2			585.4
Deferred income taxes, net		37.9			38.5
Postemployment and other employee benefit liabilities		105.5			109.9
Long-term debt		370.0			370.0
Other noncurrent liabilities		36.3			33.8
Total liabilities		1,032.9			1,137.6
Commitments and contingencies (Notes 8 through 12)
Stockholders’ equity
Common stock, $0.01 par value, 250,000,000 shares authorized; and 82,510,715 and 82,513,744 shares issued and outstanding, respectively		0.8			0.8
Additional paid-in capital		398.8			396.6
Retained earnings		660.4			638.1
Accumulated other comprehensive loss		(42.9	)		(22.9	)
Total stockholders’ equity		1,017.1			1,012.6
Total liabilities and stockholders’ equity	$	2,050.0		$	2,150.2

See accompanying notes to unaudited consolidated financial statements.

Page 4 of 26

DRESSER-RAND GROUP INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

	Three months ended March 31,
	2010			2009
	(Unaudited; $ in millions)
Cash flows from operating activities
Net income	$	22.3		$	34.5
Adjustments to arrive at net cash provided by operating activities
Depreciation and amortization		13.2			12.3
Deferred income taxes		0.5			(0.4	)
Stock-based compensation		1.6			1.9
Excess tax benefits from share-based compensation		(0.6	)		—
Amortization of debt financing costs		0.8			0.8
Provision for losses on inventory		1.2			0.9
Plan settlement		—			(0.2	)
Loss on sale of property, plant and equipment		0.2			0.2
Net income from equity investment		(0.1	)		—
Working capital and other, net of acquisitions
Accounts receivable		31.1			63.6
Inventories		26.8			(37.1	)
Accounts payable and accruals		(42.3	)		(38.3	)
Customer advances		(30.2	)		8.0
Other		(0.5	)		(22.8	)
Net cash provided by operating activities		24.0			23.4
Cash flows from investing activities
Capital expenditures		(5.0	)		(7.0	)
Proceeds from sales of property, plant and equipment		0.1			1.0
Acquisitions, net of cash		(58.3	)		—
Net cash used in investing activities		(63.2	)		(6.0	)
Cash flows from financing activities
Proceeds from exercise of stock options		0.1			—
Excess tax benefits from share-based compensation		0.6			—
Payments of long-term debt		(0.1	)		(0.1	)
Net cash provided by (used in) financing activities		0.6			(0.1	)
Effect of exchange rate changes on cash and cash equivalents		(5.7	)		(4.4	)
Net (decrease) increase in cash and cash equivalents		(44.3	)		12.9
Cash and cash equivalents, beginning of the period		223.2			147.1
Cash and cash equivalents, end of period	$	178.9		$	160.0

See accompanying notes to unaudited consolidated financial statements.

Page 5 of 26

DRESSER-RAND GROUP INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share amounts)

1. Basis of presentation

Unless the context otherwise indicates, the terms “we”, “our”, “us”, the “Company” and similar terms, refer to Dresser-Rand Group Inc. and its consolidated subsidiaries.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and notes required by such principles applicable to annual financial statements. These financial statements are unaudited but, in the opinion of management, contain all adjustments (including normal recurring adjustments) considered necessary for a fair presentation of our financial position and results of operations. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2009, and our other filings with the Securities and Exchange Commission. Operating results for the 2010 period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.

2. New accounting standards

In October 2009, Accounting Standards Update (“ASU”) 2009-13,Revenue Recognition, was issued. ASU 2009-13 replaces the concept of fair market value with selling price when determining how to allocate the total contract sales price in a multiple-deliverable revenue arrangement. This amendment establishes a hierarchy process for determining the selling price of a given deliverable to be used in the allocation. The order of the selling price determination hierarchy is (a) vendor specific objective evidence; (b) third party evidence, if vendor specific objective evidence is not available; or (c) estimated selling price, if neither vendor specific objective evidence nor third party evidence is available. This amendment could significantly expand the disclosures related to the Company’s sales arrangements should it be determined that it results in a material change to the current practice. ASU 2009-13 will be effective for the Company’s fiscal year beginning January 1, 2011. The Company is currently evaluating the impact of the adoption of ASU 2009-13 on its consolidated financial statements.

On January 1, 2010, the Company adopted ASU 2009-16, which codifies Statement No. 166,Accounting for Transfers of Financial Assets, issued in June 2009 and revises the former guidance under Statement No. 140,Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. ASU 2009-16 requires more information about transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks related to transferred financial assets. ASU 2009-16 also eliminates the concept of “qualified special-purpose entity”, changes the requirements for derecognizing financial assets, and requires additional disclosures. The adoption of ASU 2009-16 did not have a material impact on our consolidated financial statements.

On January 1, 2010, the Company adopted ASU 2009-17, which codifies Statement No. 167,Amendments to FASB Interpretation No. 46(R)issued in June 2009. ASU 2009-17 requires a qualitative approach to identifying a controlling financial interest in a variable interest entity (“VIE”), and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the VIE. The adoption of ASU 2009-17 did not have a material impact on our consolidated financial statements.

On January 1, 2010, the Company adopted ASU 2010-6,Improving Disclosures About Fair Value Measurements, which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of the standard’s Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements on a gross basis for Level 3 fair-value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December 15, 2010. The adoption of ASU 2010-6 did not have a material impact on our consolidated financial statements.

On January 1, 2010, the Company adopted ASU 2010-09,Subsequent Events — Amendments to Certain Recognition and Disclosure Requirements, which amends Accounting Standards Codification (“ASC”) Topic 855, Subsequent Events,so that SEC filers no longer are required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. The adoption of ASU 2010-09 did not have a material impact on our consolidated financial statements.

Page 6 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

3. Acquisitions and other investments

On January 18, 2010, the Company acquired certain assets of Leading Edge Turbine Technologies, Inc. (such business being referred to as “LETT”), located in Houston, TX for $34.2. The acquisition allows the Company to expand its service offering in its current market and provides the Company with access to adjacent markets. LETT is a provider of turbine technologies specializing in industrial gas turbines, steam turbines and compressor repair. The purchase agreement includes the potential for additional cash consideration based on achieving certain revenue and earnings before interest, tax, depreciation, and amortization (“EBITDA”) targets over a three-year period ending on December 31, 2012. The additional consideration is up to a maximum of $5.5 depending upon the achievement of such targets. The estimated fair value of the additional consideration for the LETT acquisition has been included as a liability in the financial statements. Changes in the fair value will be recognized immediately in the applicable consolidated statements of income until the contingency is resolved.

Goodwill is comprised primarily of expected synergies from combining operations of LETT and the Company. The entire amount of goodwill from the acquisition is attributable to the Aftermarket Parts and Services segment.

For tax purposes the amortization of goodwill is deductible over 15 years.

The acquisition price was allocated to the fair values of assets acquired and liabilities assumed as follows:

	2010
Accounts receivable, net	$	3.5
Inventory, net		2.2
Total current assets		5.7
Property, plant and equipment		10.8
Amortizable intangible assets		9.3
Goodwill		13.5
Total assets acquired		39.3
Accounts payable and accruals		1.3
Total liabilities assumed		1.3
Purchase price		38.0
Fair value of contingent consideration (non-cash)		(3.8	)
Cash paid	$	34.2

Pro forma financial information, assuming this acquisition occurred at the beginning of each income statement period, has not been presented because the effect on our results for each of those periods is not considered material. The results of the acquisition have been included in our consolidated financial results since the date of the acquisition, and were not material to the results of operations for the three months ended March 31, 2010.

In addition to the cash paid for acquisitions discussed above, on January 22, 2010, the Company paid $24.1 of additional cash consideration in connection with its 2008 acquisition of certain assets of Peter Brotherhood Ltd.

Other Investments

In 2008, the Company entered into an agreement by which it acquired a non-controlling interest in Ramgen Power Systems, LLC (“Ramgen”), a privately held development stage company that is developing compressor technology that applies proven supersonic aircraft technology to ground-based air and gas compressors. In addition to receiving a non-controlling interest, the Company received an option to acquire the business of Ramgen at a price of $25.0 and a royalty commitment. The option is exercisable at any time through October 28, 2012. Pursuant to the agreement, an initial investment of $5.0 was made in November 2008, and our final contractually obligated investment of $5.0 was made in May 2009. The Company also made an optional investment in November 2009 of $5.0 which resulted in an aggregate non-controlling interest of 23.7%. The agreement allows the Company to make additional optional investments of $9.0 through October 2012. The Company’s maximum exposure to loss on its investment in Ramgen is limited to the amounts invested. In determining whether the Company should consolidate Ramgen, the Company considered that its Board participation, ownership interest and the option would not give the Company the ability to direct the activities of Ramgen, and consequently, would not result in the Company being the primary beneficiary. The investment in Ramgen is being accounted for under the equity method of accounting.

Page 7 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

In April 2009, an affiliate of the Company and Al Rushaid Petroleum Investment Company (“ARPIC”) executed and delivered a Business Venture Agreement to form a joint venture, Dresser-Rand Arabia LLC (“D-R Arabia”). D-R Arabia will be a center of excellence in the Kingdom of Saudi Arabia for manufacturing, repairs, service, technical expertise and training. The affiliate will own approximately 50% of D-R Arabia. The affiliate is making a cash contribution of approximately $0.3 and will license D-R Arabia to use certain intellectual property. ARPIC will own approximately 50% of the “Joint Venture” and is making a cash contribution of approximately $0.3. In determining whether the Company should consolidate D-R Arabia, the Company considered that its ownership and Board participation would give the Company the ability to direct the activities ofD-R Arabia which would result in the Company being the primary beneficiary. Consequently, D-R Arabia is consolidated in the financial results of the Company.

4. Intangible assets and goodwill

The cost and related accumulated amortization of intangible assets were:

	March 31, 2010				Weighted	December 31, 2009
			Accumulated		Average			Accumulated
	Cost		Amortization		Useful Lives	Cost		Amortization
Trade names	$	94.1	$	12.2	39 years	$	93.1	$	11.6
Customer relationships		263.3		36.2	37 years		258.6		34.5
Software		30.6		16.5	10 years		30.6		15.8
Existing technology		136.8		29.4	24 years		137.1		27.9
Non-compete agreements		2.6		1.0	4 years		2.1		0.8
Total amortizable intangible assets	$	527.4	$	95.3		$	521.5	$	90.6

Intangible asset amortization expense was $5.1 for the three months ended March 31, 2010, and $4.8 for the three ended March 31, 2009, respectively.

The following table represents the changes in goodwill:

				Aftermarket
	New units			parts and services			Total
Balance, December 31, 2009	$	157.0		$	329.0		$	486.0
Acquisitions		—			13.5			13.5
Foreign currency adjustments		(6.6	)		(10.1	)		(16.7	)
Balance, March 31, 2010	$	150.4		$	332.4		$	482.8

Page 8 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

5. Inventories

Inventories were as follows:

	March 31,			December 31,
	2010			2009
Raw materials and supplies	$	133.4		$	132.6
Work-in-process and finished goods		395.0			485.0
		528.4			617.6
Less: Progress payments		(206.6	)		(264.6	)
Total inventories	$	321.8		$	353.0

Progress payments represent payments from customers based on milestone completion schedules. Any payments received in excess of the related inventory investment are classified as “Customer Advance Payments” in the current liabilities section of the balance sheet.

6. Property, plant and equipment

Property, plant and equipment was comprised of the following:

	March 31,			December 31,
	2010			2009
Cost:
Land	$	16.2		$	15.3
Buildings and improvements		117.5			113.9
Machinery and equipment		290.4			285.3
		424.1			414.5
Less: Accumulated depreciation		(151.8	)		(145.6	)
Property, plant and equipment, net	$	272.3		$	268.9

7. Financial Instruments (€ in millions)

The Company manages exposure to changes in foreign currency exchange rates through its normal operating and financing activities as well as through the use of financial instruments, principally forward exchange contracts.

The purpose of the Company’s foreign currency hedging activities is to mitigate the economic impact of changes in foreign currency exchange rates. The Company attempts to hedge transaction exposures through natural offsets. To the extent that this is not practicable, the Company may enter into forward exchange contracts. Major exposure areas considered for hedging include foreign currency denominated receivables and payables, firm committed transactions and forecast sales and purchases.

The Company’s foreign currency derivative financial instruments are not designated as hedges for accounting purposes. The Company recognizes all derivatives as assets or liabilities on the balance sheet and measures them at fair value. Changes in the fair values of derivatives are immediately recognized in the consolidated statement of income as foreign currency income or loss in other income (expense).

The Company has entered into an interest rate swap agreement to minimize the economic impact of unexpected fluctuations in interest rates on the lease of its compressor testing facility in France. The interest rate swap has a notional amount of €18.0 (approximately $24.3) and effectively converts substantially all of the interest component of the lease from a variable rate of interest to a fixed rate of interest. The interest rate swap has been designated as a cash flow hedge for accounting purposes, and unrealized gains and losses are recognized in other comprehensive income. The fair value of the interest rate swap and the related unrealized loss are not material to the consolidated financial statements.

Page 9 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis:

	March 31,		December 31,
	2010		2009
Foreign currency exchange contracts assets	$	5.0	$	5.9
Foreign currency exchange contracts liabilities	$	6.0	$	7.2

The net foreign currency loss recognized for currency transactions, forward currency contracts and re-measuring monetary assets and liabilities was $16.1 for the three months ended March 31, 2010, compared to $4.3 for the three months ended March 31, 2009. The Venezuelan government has devalued the bolivar a number of times, including a devaluation on January 8, 2010. During the three months ended March 31, 2010, the Company recorded a loss of approximately $13.6 as a result of this devaluation.

The carrying values of cash, accounts receivable, short-term borrowings and accounts payable are reasonable estimates of their fair values due to the short-term nature of these instruments. The fair value of debt obligations as of March 31, 2010, was approximately $373.9.

Under accounting principles generally accepted in the United States of America, fair value for all financial instruments is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are based on the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
Level 3	Unobservable inputs for the asset or liability

Input levels used for fair value measurements are as follows:

Description	Disclosure	Input Level	Inputs
Long-term debt (note disclosure only)	Note 7	Level 1	Quoted market prices
Financial derivatives	Note 7	Level 2	Quoted market prices of similar instruments

8. Income taxes

We operate in numerous countries and tax jurisdictions around the world and many of the tax returns we have filed have not been audited. Accordingly, we could be exposed to additional income and other taxes.

Our estimated income tax provision for the three months ended March 31, 2010, and 2009, resulted in effective rates that differ from the U.S. federal statutory rate of 35% because of certain expenses that are not tax deductible, state and local taxes, different tax rates in foreign jurisdictions and deductions and credits for income tax purposes only. Additionally, in 2009, we executed a corporate restructuring to facilitate our global cash management, the effect of which reduced our effective tax rate by approximately 2.6 percentage points in the three months ended March 31, 2010, compared to the three months ended March 31, 2009. As a result of the devaluation of the Venezuelan bolivar on January 8, 2010, the Company recorded a non-deductible foreign exchange loss in its Consolidated Income Statement of approximately $13.6 million in the three months ended March 31, 2010. This resulted in a 11.3 percentage point increase in our effective tax rate for the three months ended March 31, 2010.

Page 10 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

9. Pension plans

The components of net pension expense were as follows:

	Three months ended March 31,
	2010			2009
Service cost	$	1.9		$	1.5
Interest cost		5.2			4.9
Expected return on plan assets		(5.2	)		(4.5	)
Amortization of prior service cost		0.3			0.2
Amortization of net actuarial loss		0.7			1.0
Plan settlement		—			1.3
Net pension expense	$	2.9		$	4.4

In 2008, the Company amended its Canadian defined benefit pension plan to discontinue the benefits. Accounting principles generally accepted in the United States of America require a portion of any prior service cost recognized in comprehensive income to be recognized in the statement of income when a curtailment occurs. These amounts were not material to the consolidated financial statements in 2008. During the three months ended March 31, 2009, the Company converted the plan to a defined contribution plan, which was considered a plan settlement. The plan settlement required the Company to recognize a $1.3 settlement charge in the consolidated statement of income for the three months ended March 31, 2009. The settlement charge included approximately $0.4 of net actuarial losses previously recorded in accumulated other comprehensive income. The cash payment required to effect the plan conversion was $1.5.

10. Postretirement benefits other than pensions

The components of net periodic postretirement benefits income for such plans were as follows:

	Three months ended March 31,
	2010			2009
Interest cost	$	0.2		$	0.3
Amortization of prior service credit		(2.3	)		(2.0	)
Amortization of net actuarial loss		0.4			0.2
Net post-retirement benefits income	$	(1.7	)	$	(1.5	)

11. Commitments and contingencies (£ in millions)

We are involved in various litigation, claims and administrative proceedings arising in the normal course of business. Amounts recorded for identified contingent liabilities are estimates, which are regularly reviewed and adjusted to reflect additional information when it becomes available. We are indemnified by our former owner, Ingersoll Rand Company Limited, for certain of these matters as part of Ingersoll Rand’s sale of the Company. While adverse decisions in certain of these litigation matters, claims and administrative proceedings could have a material effect on a particular quarter’s or year’s results of operations, subject to the uncertainties inherent in estimating future costs for contingent liabilities and the benefit of the indemnity from Ingersoll Rand, management believes that any future accruals, with respect to these currently known contingencies, would not have a material effect on the financial condition, liquidity or cash flows of the Company.

Of the litigation pending, a tort claim has been brought against the Company in 2008 in the Prakhanong Provincial court, Thailand by Kaona Power Supply Co. Ltd., alleging, among other matters, defects and negligence in connection with the manufacture, testing, installation and commissioning of a new unit and claiming damages in the aggregate of approximately $9.0 plus pre-judgment interest and costs. While damages are a possibility, the Company shall vigorously defend this lawsuit, including by asserting its contractual limitation of liability and agreement to exclude consequential damages. Moreover, the Company is asserting rights it believes it has to insurance coverage with respect to this claim.

In a case between Talisman Energy, Inc. and the Company that was previously reported in which the claimant was seeking damages of approximately $21.0, the Company settled the case for an immaterial amount.

Page 11 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

In November 2007, Local 313 of IUE-CWA, the union that represents certain employees at the Company’s Painted Post facility (the “IUE”) made an offer to have its striking members return to work under the terms of the previously expired union agreement. The Company rejected that offer and a lockout of the represented employees commenced. Approximately one week later, after reaching an impasse in negotiations, the Company exercised its right to implement the terms of its last contract offer, ended the lockout, and the employees represented by the IUE agreed to return to work under the implemented terms. Subsequently, the IUE filed several unfair labor practice (“ULP”) charges against the Company with Region 3 of the National Labor Relations Board (“NLRB”), asserting multiple allegations arising from the protracted labor dispute, its termination, contract negotiations and related matters.

Region 3 of the NLRB decided to proceed to complaint on only one-third of the ULP allegations asserted by the IUE, while the remaining claims were dismissed. Notably, the NLRB found that many of the critical aspects of the Company’s negotiations with the IUE were handled appropriately, including, that the union’s strike was not an unfair labor practice strike and the Company’s declaration of impasse and its unilateral implementation of its last offer were lawful.

The claims that proceeded to complaint before the NLRB included the Company’s handling of the one week lockout, the negotiation of the recall process used to return employees to the facility after reaching impasse and lifting the lockout, and the termination of two employees who engaged in misconduct on the picket line during the strike. The trial of this matter took place before a NLRB Administrative Law Judge (the “ALJ”) in Elmira and Painted Post, N.Y. during the summer of 2009. On January 29, 2010, the ALJ issued his decision in which he found in favor of the union on some issues and upheld the Company’s position on others. The Company continues to believe it complied with the law with respect to the allegations that led to the adverse ALJ ruling, and it has appealed these rulings to the NLRB in Washington, D.C. While the Company believes it should ultimately prevail with respect to these ULP allegations, several levels of appeal may be necessary. The Company anticipates that any impact arising from the ULP allegations will not have a material adverse effect on the Company’s financial condition. The appellate process could reasonably take 3 to 5 years and potentially even longer to resolve with finality.

During the three months ended September 30, 2009, the Company received notification from the current plan trustees of one of its subsidiaries’ pension plans in the United Kingdom that the plan may not have been properly amended to achieve sex equalization. The third-party trustee at the time action was taken believes that it had taken the appropriate steps to properly amend the plan. If it is determined that sex equalization was not achieved, certain benefits would be recalculated by reference to a normal retirement date of 60 for both men and women, which we believe could result in a potential liability of up to approximately £4.0 ($6.1).

12. Warranty accruals

We maintain a product warranty liability that represents estimated future claims for equipment, parts and services covered during a warranty period. A warranty liability is provided at the time of revenue recognition based on historical experience and adjusted as required.

The following table represents the changes in the product warranty liability:

	Three months ended March 31,
	2010			2009
Beginning balance	$	39.2		$	37.0
Provisions for warranties issued during the period		3.8			4.3
Adjustments to warranties issued in prior periods		0.3			—
Payments during period		(5.1	)		(3.3	)
Foreign currency adjustments		(0.9	)		(0.9	)
Ending balance	$	37.3		$	37.1

Page 12 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

13. Segment information

We have two reportable segments based on the engineering and production processes, and the products and services provided by each segment as follows:

1) New units are highly engineered solutions to new requests from customers. The segment includes engineering, manufacturing, sales and administrative support.

2) Aftermarket parts and services consist of support solutions for the existing population of installed equipment. The segment includes engineering, manufacturing, sales and administrative support.

Unallocated amounts represent expenses and assets that cannot be assigned directly to either reportable segment because of their nature. Unallocated net expenses include certain corporate expenses, research and development expenses and the plan settlement. Assets that are directly assigned to the two reportable segments are trade accounts receivable, net inventories, and goodwill. Unallocated assets include cash, prepaid expenses and other, deferred taxes, property, plant and equipment, and intangible assets.

Segment results for the three months ended March 31, 2010, and 2009 were as follows:

	Three months ended March 31,
	2010			2009
Revenues
New units	$	285.1		$	278.4
Aftermarket parts and services		217.0			230.5
Total revenues	$	502.1		$	508.9
Operating Income
New units	$	40.3		$	25.2
Aftermarket parts and services		45.9			58.9
Unallocated		(21.8	)		(19.9	)
Total operating income	$	64.4		$	64.2
Depreciation and Amortization
New units	$	7.4		$	6.8
Aftermarket parts and services		5.8			5.5
Total depreciation and amortization	$	13.2		$	12.3
Assets (including Goodwill)
New units	$	320.5		$	333.2
Aftermarket parts and services		743.8			736.0
Unallocated		985.7			935.9
Total assets	$	2,050.0		$	2,005.1

14. Stockholders’ equity

Changes in stockholders’ equity for three months ended March 31, 2010, were:

							Accumulated
							Other
	Common		Additional		Retained		Comprehensive
	Stock		Paid-in Capital		Earnings		(Loss) Income			Total
At December 31, 2009	$	0.8	$	396.6	$	638.1	$	(22.9	)	$	1,012.6
Stock-based employee compensation		—		2.2		—		—			2.2
Net income		—		—		22.3		—			22.3
Other comprehensive income (loss)
Foreign currency adjustments		—		—		—		(19.2	)		(19.2	)
Unrealized loss on derivatives, net of $0.1 tax		—		—		—		(0.2	)		(0.2	)
Pension and other postretirement benefit plans — net of $0.3 tax:
Benefit plans amortization		—		—		—		(0.6	)		(0.6	)
At March 31, 2010	$	0.8	$	398.8	$	660.4	$	(42.9	)	$	1,017.1

Page 13 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

The components of total comprehensive income were as follows:

	Three months ended March 31,
	2010			2009
Net income	$	22.3		$	34.5
Other comprehensive income
Foreign currency adjustments		(19.2	)		(12.4	)
Unrealized loss on derivatives, net of $0.1 tax		(0.2	)		—
Pension and other postretirement benefit plans — net of $0.3 tax
Benefit plans amortization		(0.6	)		(0.4	)
Plan settlement		—			0.3
Total comprehensive income	$	2.3		$	22.0

During the three months ended March 31, 2010, the Compensation Committee of the Board of Directors approved grants of options and appreciation rights involving 237,603 shares of common stock and granted a total of 366,687 shares of time-vested restricted stock units to employees under the Dresser-Rand Group Inc. Stock Incentive Plan. Additionally, the compensation committee approved the issuance of performance based restricted stock units with a target grant amount of 82,236 restricted shares. These stock compensation arrangements vest over three year periods. Additionally, Directors were granted 17,940 shares of restricted stock which will vest over one year.

15. Supplemental guarantor financial information

The following wholly owned subsidiaries have guaranteed the Company’s senior subordinated notes on a full, unconditional and joint and several basis: Dresser-Rand LLC, Dresser-Rand Power LLC, Dresser-Rand Company, D-R Steam LLC and Dresser-Rand Global Services, Inc. (“Subsidiary Guarantors”).

The Company’s U.S. income tax liabilities are accounted for by the Issuer (Dresser-Rand Group Inc.). Each quarter, the Company recognizes an income tax expense and related income tax liability for the Subsidiary Guarantors’ and Subsidiary Non-Guarantors’ portion of U.S. pre-tax earnings. Periodically, the income tax liability balances are transferred to an intercompany account. The amounts transferred for the three months ended March 31, 2010 and 2009 were $119.0 and $107.1, respectively.

The following condensed consolidated financial information of the Issuer, Subsidiary Guarantors and Subsidiary Non-Guarantors, presents statements of income for the three months ended March 31, 2010, and 2009, balance sheets at March 31, 2010, and December 31, 2009, and statements of cash flows for the three months ended March 31, 2010, and 2009.

Page 14 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

CONDENSED CONSOLIDATING STATEMENT OF INCOME
For the three months ended March 31, 2010

							Subsidiary
				Subsidiary			Non-			Consolidating
	Issuer			Guarantors			Guarantors			Adjustments			Total
Net sales	$	—		$	247.2		$	301.6		$	(46.7	)	$	502.1
Cost of sales		—			180.7			217.0			(37.7	)		360.0
Gross profit		—			66.5			84.6			(9.0	)		142.1
Selling and administrative expenses		35.2			12.7			31.3			(7.8	)		71.4
Research and development expenses		—			5.2			1.1			—			6.3
(Loss) income from operations		(35.2	)		48.6			52.2			(1.2	)		64.4
Equity earnings in affiliates		39.9			3.7			—			(43.6	)		—
Interest expense, net		(7.8	)		—			(0.4	)		—			(8.2	)
Intercompany interest and fees		14.2			(1.9	)		(12.3	)		—			—
Other income (expense), net		2.0			—			(18.2	)		—			(16.2	)
Income before income taxes		13.1			50.4			21.3			(44.8	)		40.0
(Benefit) provision for income taxes		(9.2	)		17.2			9.7			—			17.7
Net income	$	22.3		$	33.2		$	11.6		$	(44.8	)	$	22.3

CONDENSED CONSOLIDATING STATEMENT OF INCOME
For the three months ended March 31, 2009

							Subsidiary
				Subsidiary			Non-			Consolidating
	Issuer			Guarantors			Guarantors			Adjustments			Total
Net sales	$	—		$	316.4		$	235.0		$	(42.5	)	$	508.9
Cost of sales		—			227.0			179.1			(34.3	)		371.8
Gross profit		—			89.4			55.9			(8.2	)		137.1
Selling and administrative expenses		32.0			15.0			27.4			(6.8	)		67.6
Research and development expenses		—			3.6			0.4			—			4.0
Plan settlement		—			—			1.3			—			1.3
(Loss) income from operations		(32.0	)		70.8			26.8			(1.4	)		64.2
Equity earnings in affiliates		55.6			2.4			—			(58.0	)		—
Interest (expense) income, net		(7.7	)		—			0.7			—			(7.0	)
Intercompany interest and fees		4.6			(0.8	)		(3.8	)		—			—
Other income (expense), net		0.8			(0.8	)		(4.3	)		—			(4.3	)
Income before income taxes		21.3			71.6			19.4			(59.4	)		52.9
(Benefit) provision for income taxes		(13.2	)		25.6			6.0			—			18.4
Net income	$	34.5		$	46.0		$	13.4		$	(59.4	)	$	34.5

Page 15 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

CONDENSED CONSOLIDATING BALANCE SHEET
March 31, 2010

			Subsidiary			Subsidiary Non-		Consolidating
	Issuer		Guarantors			Guarantors		Adjustments			Total
ASSETS
Cash and cash equivalents	$	13.4	$	—		$	165.5	$	—		$	178.9
Accounts receivable, net		—		108.5			151.4		—			259.9
Inventories, net		—		188.9			143.1		(10.2	)		321.8
Prepaid and other expenses and deferred income taxes		39.9		2.1			33.2		—			75.2
Total current assets		53.3		299.5			493.2		(10.2	)		835.8
Investment in affiliates		1,943.9		69.9			—		(2,013.8	)		—
Property, plant and equipment, net		—		180.3			92.0		—			272.3
Intangible assets, net		—		455.2			459.7		—			914.9
Other assets		25.3		0.6			1.1		—			27.0
Total assets	$	2,022.5	$	1,005.5		$	1,046.0	$	(2,024.0	)	$	2,050.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accruals	$	14.4	$	182.8		$	286.0	$	—		$	483.2
Total current liabilities		14.4		182.8			286.0		—			483.2
Long-term debt		370.0		—			—		—			370.0
Intercompany accounts		600.4		(690.3	)		89.9		—			—
Other noncurrent liabilities		20.6		91.5			67.6		—			179.7
Total liabilities		1,005.4		(416.0	)		443.5		—			1,032.9
Common stock		0.8		—			—		—			0.8
Other stockholders’ equity		1,016.3		1,421.5			602.5		(2,024.0	)		1,016.3
Total stockholders’ equity		1,017.1		1,421.5			602.5		(2,024.0	)		1,017.1
Total liabilities and stockholders’ equity	$	2,022.5	$	1,005.5		$	1,046.0	$	(2,024.0	)	$	2,050.0

CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2009

				Subsidiary			Subsidiary Non-		Consolidating
	Issuer			Guarantors			Guarantors		Adjustments			Total
ASSETS
Cash and cash equivalents	$	57.6		$	—		$	165.6	$	—		$	223.2
Accounts receivables, net		—			126.4			163.4		—			289.8
Inventories, net		—			215.0			147.0		(9.0	)		353.0
Prepaid and other expenses and deferred income taxes		33.4			2.2			34.7		—			70.3
Total current assets		91.0			343.6			510.7		(9.0	)		936.3
Investment in affiliates		1,911.9			64.6			—		(1,976.5	)		—
Property, plant and equipment, net		—			171.2			97.7		—			268.9
Intangible assets, net		—			436.5			480.4		—			916.9
Other assets		26.1			0.7			1.3		—			28.1
Total assets	$	2,029.0		$	1,016.6		$	1,090.1	$	(1,985.5	)	$	2,150.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accruals	$	(90.9	)	$	306.3		$	369.9	$	—		$	585.3
Loans payable		—			0.1			—		—			0.1
Total current liabilities		(90.9	)		306.4			369.9		—			585.4
Long-term debt		370.0			—			—		—			370.0
Intercompany accounts		717.0			(756.7	)		39.7		—			—
Other noncurrent liabilities		20.3			86.5			75.4		—			182.2
Total liabilities		1,016.4			(363.8	)		485.0		—			1,137.6
Common stock		0.8			—			—		—			0.8
Other stockholders’ equity		1,011.8			1,380.4			605.1		(1,985.5	)		1,011.8
Total stockholders’ equity		1,012.6			1,380.4			605.1		(1,985.5	)		1,012.6
Total liabilities and stockholders’ equity	$	2,029.0		$	1,016.6		$	1,090.1	$	(1,985.5	)	$	2,150.2

Page 16 of 26

DRESSER-RAND GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
($ in millions, except per share amounts)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the three months ended March 31, 2010

							Subsidiary
				Subsidiary			Non-			Consolidating
	Issuer			Guarantors			Guarantors			Adjustments		Total
Cash flows from operating activities
Net cash provided by (used in) operating activities	$	84.4		$	(70.5	)	$	10.1		$	—	$	24.0
Cash flows from investing activities
Capital expenditures		—			(3.5	)		(1.5	)		—		(5.0	)
Proceeds from sale of property, plant and equipment		—			0.1			—			—		0.1
Acquisitions, net of cash		(34.2	)		—			(24.1	)		—		(58.3	)
Net cash used in investing activities		(34.2	)		(3.4	)		(25.6	)		—		(63.2	)
Cash flows from financing activities
Proceeds from exercise of stock options		0.1			—			—			—		0.1
Excess tax benefits from share-based compensation		—			0.6			—			—		0.6
Payment of long-term debt		—			(0.1	)		—			—		(0.1	)
Change in intercompany accounts		(94.5	)		73.4			21.1			—		—
Net cash (used in) provided by financing activities		(94.4	)		73.9			21.1			—		0.6
Effect of exchange rate changes		—			—			(5.7	)		—		(5.7	)
Net decrease in cash and equivalents		(44.2	)		—			(0.1	)		—		(44.3	)
Cash and cash equivalents, beginning of period		57.6			—			165.6			—		223.2
Cash and cash equivalents, end of period	$	13.4		$	—		$	165.5		$	—	$	178.9

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the three months ended March 31, 2009

							Subsidiary
				Subsidiary			Non-			Consolidating
	Issuer			Guarantors			Guarantors			Adjustments		Total
Cash flows from operating activities
Net cash provided by (used in) operating activities	$	55.4		$	(64.8	)	$	32.8		$	—	$	23.4
Cash flows from investing activities
Capital expenditures		—			(6.6	)		(0.4	)		—		(7.0	)
Proceeds from sale of property, plant and equipment		—			1.0			—			—		1.0
Net cash used in investing activities		—			(5.6	)		(0.4	)		—		(6.0	)
Cash flows from financing activities
Payment of long-term debt		—			(0.1	)		—			—		(0.1	)
Change in intercompany accounts		(66.9	)		70.5			(3.6	)		—		—
Net cash (used in) provided by financing activities		(66.9	)		70.4			(3.6	)		—		(0.1	)
Effect of exchange rate changes		—			—			(4.4	)		—		(4.4	)
Net (decrease) increase in cash and equivalents		(11.5	)		—			24.4			—		12.9
Cash and cash equivalents, beginning of period		26.5			—			120.6			—		147.1
Cash and cash equivalents, end of period	$	15.0		$	—		$	145.0		$	—	$	160.0

Page 17 of 26

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ($ in millions)

Overview

We are among the largest global suppliers of custom-engineered rotating equipment solutions for long-life, critical applications in the oil, gas, petrochemical and process industries. We have two reportable segments which are based on the engineering and production processes, and the products and services we provide: (1) new units and (2) aftermarket parts and services. Our products are used for applications that include oil and gas production; high-pressure gas injection, gas lift and other applications for enhanced oil recovery; natural gas production and processing; gas liquefaction; gas gathering, transmission and storage; hydrogen, wet and coker gas, synthesis gas, carbon dioxide and many other applications for the refining, fertilizer and petrochemical markets; several applications for the armed forces; as well as varied applications for general industrial markets such as paper, steel, sugar, and distributed power generation. We service our installed base, and that of other suppliers, around the world through the provision of parts, repairs, overhauls, operation and maintenance, upgrades, revamps, applied technology solutions, coatings, field services, technical support and other extended services.

We operate globally with manufacturing facilities in the United States, France, United Kingdom, Germany, Norway, China and India. We provide a wide array of products and services to our worldwide client base in over 140 countries from our global locations (65 sales offices, 38 service centers and 12 manufacturing locations) in 18 U.S. states and 29 countries.

The energy markets continue to be driven by worldwide supply and demand, production and processing capacity, and geopolitical risks. Despite the recent financial market turmoil and global economic slow down, we continue to believe that the longer-term fundamentals affecting the energy industry will support significant additional investment in energy infrastructure worldwide as well as the maintenance and upgrade of the existing installed base of rotating equipment.

From a long-term perspective, we believe that the fundamentals driving trends in our industry remain in place. These include maturing producing oil and gas fields worldwide that require greater use of compression equipment to maintain production levels; the increase in demand for natural gas that is driving growth in gas production, storage and transmission infrastructure; international regulatory and environmental initiatives, including clean fuel legislation and stricter emission controls; the aging installed base that is increasing demand for aftermarket parts and services, overhauls and upgrades; and the increased outsourcing of equipment maintenance and operation.

Results of Operations

Three months ended March 31, 2010, compared to the three months ended March 31, 2009:

	Three months ended					Three months ended					Period to Period Change
	March 31, 2010					March 31, 2009					2009 to 2010			% Change
Statement of Operations Data:
Total revenues	$	502.1		100.0	%	$	508.9		100.0	%	$	(6.8	)		(1.3	)%
Cost of sales		360.0		71.7			371.8		73.1			(11.8	)		(3.2	)%
Gross profit		142.1		28.3			137.1		26.9			5.0			3.6	%
Selling and administrative expenses		71.4		14.2			67.6		13.3			3.8			5.6	%
Research and development expenses		6.3		1.3			4.0		0.8			2.3			57.5	%
Plan settlement		—		—			1.3		0.2			(1.3	)		(100.0	)%
Operating income		64.4		12.8			64.2		12.6			0.2			0.3	%
Interest expense, net		(8.2	)	(1.6	)		(7.0	)	(1.4	)		(1.2	)		17.1	%
Other expense, net		(16.2	)	(3.2	)		(4.3	)	(0.8	)		(11.9	)		276.7	%
Income before income taxes		40.0		8.0			52.9		10.4			(12.9	)		(24.3	)%
Provision for income taxes		17.7		3.5			18.4		3.6			(0.7	)		(3.8	)%
Net income	$	22.3		4.5	%	$	34.5		6.8	%	$	(12.2	)		(35.4	)%
Bookings	$	565.3				$	355.8				$	209.5			58.9	%
Backlog — ending	$	1,748.1				$	2,087.6				$	(339.5	)		(16.3	)%

Total revenues.Total revenues were $502.1 for the three months ended March 31, 2010, compared to $508.9 for the three months ended March 31, 2009, a decrease of $6.8 or 1.3%. The highly engineered nature of our worldwide products and services does not easily lend itself to reasonably measure the impact of price, volume and mix on changes in our total revenues from period to period. Nevertheless, based on factors such as measures of labor hours and purchases from suppliers, volume was lower during the three months ended March 31, 2010 than the three months ended March 31, 2009, in both segments, driven by lower bookings in 2009 as a result of the economic downturn at the end of 2008 and beginning of 2009.

Page 18 of 26

Cost of sales.Cost of sales was $360.0 for the three months ended March 31, 2010, compared to $371.8 for the three months ended March 31, 2009. As a percentage of revenues, cost of sales was 71.7% for the three months ended March 31, 2010, compared to 73.1% for the three months ended March 31, 2009. Overall, cost of sales as a percentage of revenue decreased as a result of cost and productivity improvements. This has been partly offset by a shift in overall segment mix from the higher margin aftermarket parts and services segment to the lower margin new units segment.

Gross profit.Gross profit was $142.1 for the three months ended March 31, 2010, compared to $137.1 for the three months ended March 31, 2009. As a percentage of revenues, gross profit was 28.3% for the three months ended March 31, 2010, compared to 26.9% for the three months ended March 31, 2009. The increase in the gross profit percentage resulted from the factors discussed above.

Selling and administrative expenses.Selling and administrative expenses were $71.4 for the three months ended March 31, 2010, compared to $67.6 for the three months ended March 31, 2009. The increase in selling and administrative expenses for the three months ended March 31, 2010 is attributable to additional costs associated with recent acquisitions and the impact of the weaker US dollar. As a percentage of sales, selling and administrative expenses increased to 14.2% from 13.3%.

Research and development expenses.Research and development expenses for the three months ended March 31, 2010, were $6.3 compared to $4.0 for the three months ended March 31, 2009. Research and development expenses increased in the three months ended March 31, 2010 as a result of executing our strategy to introduce new and innovative products and technologies with a focus on key new product development initiatives for Integrated Compression Systems (ICS), Liquid Natural Gas (LNG) and gas turbines, as well as expanding the portfolio of projects focused on product enhancements.

Plan Settlement. In 2008, the Company amended its Canadian defined benefit pension plan to discontinue the benefits. During the three months ended March 31, 2009, the Company converted the plan to a defined contribution plan which was considered a plan settlement. The plan settlement required the Company to recognize a $1.3 settlement charge in the consolidated statement of income for the three months ended March 31, 2009.

Operating income.Operating income was $64.4 for the three months ended March 31, 2010, compared to $64.2 for the three months ended March 31, 2009, an increase of $0.2. The increase was primarily attributable to higher gross profit discussed above offset by the increase in selling expenses. As a percentage of revenues, operating income for the three months ended March 31, 2010 was 12.8%, compared to 12.6% for the three months ended March 31, 2009.

Interest expense, net.Interest expense, net was $8.2 for the three months ended March 31, 2010, compared to $7.0 for the three months ended March 31, 2009, including approximately $0.8 of amortization of deferred financing costs for both periods. We experienced lower interest income in the three months ended March 31, 2010 resulting from lower interest rates and lower interest bearing cash balances.

Other expense, net.Other expense, net was $16.2 for the three months ended March 31, 2010, compared to other expense, net of $4.3 for the three months ended March 31, 2009. Other income (expense), net consists primarily of net currency gains and losses. The increase in other expense, net is the result of the devaluation of the Venezuelan bolivar on January 8, 2010. As a result of this devaluation, the Company recorded a non-deductible foreign exchange loss in its Consolidated Income Statement of approximately $13.6 in the three months ended March 31, 2010.

Provision for income taxes.Provision for income taxes was $17.7 for the three months ended March 31, 2010, and $18.4 for the three months ended March 31, 2009. Our estimated income tax provision for the three months ended March 31, 2010 and 2009, results in an effective rate that differs from the U.S. federal statutory rate of 35% because of different tax rates in foreign tax jurisdictions and certain deductions and credits allowable for income tax purposes, partially offset by state and local income taxes and valuation allowances on net operating loss carryforwards that more likely than not will not be realized. We will adjust valuation allowances in the future when it becomes more likely than not that the benefits of deferred tax assets will be realized. In addition to these impacts to the effective tax rate, we experienced a tax benefit in certain tax jurisdictions which reduced our effective tax rate by approximately 2.6 percentage points for the three months ended March 31, 2010 as a result of a corporate restructuring executed to facilitate our global cash management. The devaluation of the Venezuelan bolivar discussed above resulted in an additional 11.3 percentage point increase in our effective tax rate for the three months ended March 31, 2010.

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Bookings and backlog.Bookings for the three months ended March 31, 2010, were $565.3 compared to $355.8 for the three months ended March 31, 2009, an increase of $209.5 or 58.9%. New units segment bookings increased $191.9 and aftermarket parts and services bookings increased $17.6. The increase in bookings reflects the improvement in market conditions from the economic downturn experienced at the beginning of 2009. Backlog was $1,748.1 at March 31, 2010, compared to $2,087.6 at March 31, 2009.

Segment information

We have two reportable segments based on the engineering and production processes, and the products and services provided by each segment as follows:

1) New units are highly engineered solutions to new requests from customers. The segment includes engineering, manufacturing, sales and administrative support.

2) Aftermarket parts and services consist of support solutions for the existing population of installed equipment. The segment includes engineering, manufacturing, sales and administrative support.

Unallocated amounts represent expenses and assets that cannot be assigned directly to either reportable segment because of their nature. Unallocated net expenses include certain corporate expenses and research and development expenses and the plan settlement. Assets that are directly assigned to the two reportable segments are trade accounts receivable, net inventories, and goodwill. Unallocated assets include cash, prepaid expenses and other, deferred taxes, property, plant and equipment, and intangible assets.

Segment Analysis — three months ended March 31, 2010, compared to three months ended March 31, 2009:

	Three months ended March 31,										Period to Period Change
	2010					2009					2009 to 2010			% Change
Revenues
New units	$	285.1		56.8	%	$	278.4		54.7	%	$	6.7			2.4	%
Aftermarket parts and services		217.0		43.2	%		230.5		45.3	%		(13.5	)		(5.9	)%
Total revenues	$	502.1		100.0	%	$	508.9		100.0	%	$	(6.8	)		(1.3	)%
Gross profit
New units	$	63.4				$	47.5				$	15.9			33.5	%
Aftermarket parts and services		78.7					89.6					(10.9	)		(12.2	)%
Total gross profit	$	142.1				$	137.1				$	5.0			3.6	%
Operating income
New units	$	40.3				$	25.2				$	15.1			59.9	%
Aftermarket parts and services		45.9					58.9					(13.0	)		(22.1	)%
Unallocated		(21.8	)				(19.9	)				(1.9	)		9.5	%
Total operating income	$	64.4				$	64.2				$	0.2			0.3	%
Bookings
New units	$	301.3				$	109.4				$	191.9			175.4	%
Aftermarket parts and services		264.0					246.4					17.6			7.1	%
Total bookings	$	565.3				$	355.8				$	209.5			58.9	%
Backlog — ending
New units	$	1,368.4				$	1,663.4				$	(295.0	)		(17.7	)%
Aftermarket parts and services		379.7					424.2					(44.5	)		(10.5	)%
Total backlog	$	1,748.1				$	2,087.6				$	(339.5	)		(16.3	)%

New Units

Revenues.New units revenues were $285.1 for the three months ended March 31, 2010, compared to $278.4 for the three months ended March 31, 2009, an increase of $6.7 or 2.4%. The highly engineered nature of new unit products does not easily lend itself to reasonably measure the impact of price, volume and mix on changes in our new unit revenues from period to period. Nevertheless, based on factors such as measures of labor hours and purchases from suppliers, new units volume was lower during the three months ended March 31, 2010, as compared to the three months ended March 31, 2009 driven by a lower level of bookings in 2009. The effect of lower volumes was more than offset by the effect of a weaker U.S. dollar. Cycle times from order entry to completion for products in this segment are currently averaging 12 to 15 months.

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Gross profit.Gross profit was $63.4 for the three months ended March 31, 2010, compared to $47.5 for the three months ended March 31, 2009. Gross profit, as a percentage of segment revenues, was 22.2% for the three months ended March 31, 2010 compared to 17.1% for the three months ended March 31, 2009. Gross profit as a percentage of revenues increased as a result of cost and productivity improvements in the three months ended March 31, 2010.

Operating income.Operating income was $40.3 for the three months ended March 31, 2010, compared to $25.2 for the three months ended March 31, 2009. As a percentage of segment revenues, operating income was 14.1% for the three months ended March 31, 2010, compared to 9.1% for the three months ended March 31, 2009. The increase in operating income, as well as the increase in operating income as a percentage of segment revenues resulted primarily from the factors discussed above.

Bookings and Backlog.New units bookings for the three months ended March 31, 2010, were $301.3 compared to $109.4 for the three months ended March 31, 2009. The increase in new units bookings reflects the improvement in market conditions from the economic downturn experienced at the beginning of 2009. The backlog was $1,368.4 at March 31, 2010, compared to $1,663.4 at March 31, 2009.

Aftermarket Parts and Services

Revenues.Aftermarket parts and services revenues were $217.0 for the three months ended March 31, 2010, compared to $230.5 for the three months ended March 31, 2009, a decrease of $13.5 or 5.9%. The decline in aftermarket parts and services segment revenues was the result of a lower sales to one national oil company client and reduced maintenance spending by certain other clients, principally in the North American downstream market. Elapsed time from order entry to completion in this segment typically ranges from one day to 12 months depending on the nature of the product or service.

Gross profit.Gross profit was $78.7 for the three months ended March 31, 2010, compared to $89.6 for the three months ended March 31, 2009. Gross profit as a percentage of segment revenues was 36.3% for the three months ended March 31, 2010 compared to 38.9% for the three months ended March 31, 2009. Gross profit as a percentage of revenues decreased primarily due to lower absorption of fixed costs.

Operating income.Operating income was $45.9 for the three months ended March 31, 2010, compared to $58.9 for the three months ended March 31, 2009. As a percentage of segment revenues, operating income decreased to 21.2% for the three months ended March 31, 2010, from 25.6% for the three months ended March 31, 2009. In addition to the reasons discussed above, the changes in operating income and operating income as a percentage of segment revenues were also impacted by a less favorable mix.

Bookings and Backlog.Bookings for the three months ended March 31, 2010 were $264.0, compared to $246.4 for the three months ended March 31, 2009. We believe the increase in bookings reflects an improvement in market conditions. Backlog was $379.7 as of March 31, 2010, compared to $424.2 at March 31, 2009.

Liquidity and Capital Resources

Net cash provided by operating activities for the three months ended March 31, 2010, was $24.0 compared to $23.4 for the three months end March 31, 2009. From December 31, 2009, to March 31, 2010, accounts receivable declined as a result of improved collections, and inventories decreased as a result of lower activity in certain of our factories. Reductions in these working capital accounts were offset by reductions in accounts payable and customer advances and progress payments, also resulting from lower activity in certain of our factories. The decrease in activity in certain of our factories is attributable to the lower level of bookings in 2009 as a result of the economic downturn.

Net cash used in investing activities was $63.2 for the three months ended March 31, 2010, compared to $6.0 in the same period of 2009. Cash used in investing activities for the three months ended March 31, 2010, includes $34.2 related to the acquisition of certain assets of Leading Edge Turbine Technologies, Inc. and the payment of $24.1 of contingent consideration associated with the 2008 acquisition of Peter Brotherhood Ltd. Capital expenditures were $5.0 for the three months ended March 31, 2010, compared to $7.0 for the three months ended March 31, 2009.

Net cash provided by financing activities was $0.6 for the three months ended March 31, 2010, compared to net cash used of $0.1 for the three months ended March 31, 2009.

As of March 31, 2010, we had cash and cash equivalents of $178.9 and the ability to borrow $356.5 under our $500.0 restated senior secured revolving credit facility, as $143.5 was used for outstanding letters of credit. In addition to these letters of credit, a total of $99.8 of letters of credit and bank guarantees were outstanding at March 31, 2010, which were issued by banks offering uncommitted lines of credit. Although there can be no assurances, based on our current and anticipated levels of operations and conditions in our markets and industry, we believe that our cash flow from operations, available cash and available borrowings under the restated senior secured revolving credit facility will be adequate to meet our working capital, capital expenditures, interest payments and other funding requirements for the next 12 months and our long-term future contractual obligations.

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New accounting standards

In October 2009, Accounting Standards Update (“ASU”) 2009-13,Revenue Recognition, was issued. ASU 2009-13 replaces the concept of fair market value with selling price when determining how to allocate the total contract sales price in a multiple-deliverable revenue arrangement. This amendment establishes a hierarchy process for determining the selling price of a given deliverable to be used in the allocation. The order of the selling price determination hierarchy is (a) vendor specific objective evidence; (b) third party evidence, if vendor specific objective evidence is not available; or (c) estimated selling price, if neither vendor specific objective evidence nor third party evidence is available. This amendment could significantly expand the disclosures related to the Company’s sales arrangements should it be determined that it results in a material change to the current practice. ASU 2009-13 will be effective for the Company’s fiscal year beginning January 1, 2011. The Company is currently evaluating the impact of the adoption of ASU 2009-13 on its consolidated financial statements.

On January 1, 2010, the Company adopted ASU 2009-16, which codifies Statement No. 166,Accounting for Transfers of Financial Assets, issued in June 2009 and revises the former guidance under Statement No. 140,Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. ASU 2009-16 requires more information about transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks related to transferred financial assets. ASU 2009-16 also eliminates the concept of “qualified special-purpose entity”, changes the requirements for derecognizing financial assets, and requires additional disclosures. The adoption of ASU 2009-16 did not have a material impact on our consolidated financial statements.

On January 1, 2010, the Company adopted ASU 2009-17, which codifies Statement No. 167,Amendments to FASB Interpretation No. 46(R)issued in June 2009. ASU 2009-17 requires a qualitative approach to identifying a controlling financial interest in a variable interest entity (“VIE”), and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the VIE. The adoption of ASU 2009-17 did not have a material impact on our consolidated financial statements.

On January 1, 2010, the Company adopted ASU 2010-6,Improving Disclosures About Fair Value Measurements, which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of the standard’s Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements on a gross basis for Level 3 fair-value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December 15, 2010. The adoption of ASU 2010-6 did not have a material impact on our consolidated financial statements.

On January 1, 2010, the Company adopted ASU 2010-09,Subsequent Events — Amendments to Certain Recognition and Disclosure Requirements, which amends Accounting Standards Codification (“ASC”) Topic 855, Subsequent Events,so that SEC filers no longer are required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. The adoption of ASU 2010-09 did not have a material impact on our consolidated financial statements.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information. When used in this Form 10-Q, the words “anticipates,” “believes,” “expects,” “intends”, “appears”, “outlook”, and similar expressions identify such forward-looking statements. Although we believe that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include, among others, the following:

• economic or industry downturns;

• volatility and disruption of the credit markets;

• our inability to implement our business strategy to increase our aftermarket parts and services revenue;

• our inability to generate cash and access capital on reasonable terms;

• competition in our markets;

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• the variability of bookings due to volatile market conditions, client subjectivity in placing orders, and timing of large orders;

• failure to integrate our acquisitions, or achieve the expected benefits from any future acquisitions;

• economic, political, currency and other risks associated with our international sales and operations;

• fluctuations in currency values and exchange rates;

• loss of our senior management or other key personnel;

• environmental compliance costs and liabilities;

• failure to maintain safety performance acceptable to our clients;

• failure to negotiate new collective bargaining agreements;

• unexpected product claims or regulations;

• infringement of our intellectual property rights or our infringement of others’ intellectual property rights;

• our pension expenses and funding requirements; and

• other factors described in this report and as set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK ($and€in millions)

Our results of operations are affected by fluctuations in the value of local currencies in which we transact business. We record the effect of translating our non-U.S. subsidiaries’ financial statements into U.S. dollars using exchange rates as they exist at the end of each month. The effect on our results of operations of fluctuations in currency exchange rates depends on various currency exchange rates and the magnitude of the transactions completed in currencies other than the U.S. dollar. Generally, weakening of the U.S. dollar improves our reported results when the local currency financial statements are translated into U.S. dollars for inclusion in our consolidated financial statements and the strengthening of the U.S. dollar impacts our results negatively. We enter into financial instruments to mitigate the impact of changes in currency exchange rates where we deem appropriate. The net foreign currency loss recognized for currency transactions, forward currency contracts and re-measuring monetary assets and liabilities was $16.1 for the three months ended March 31, 2010, compared to $4.3 for the three months ended March 31, 2009. The Venezuelan government has devalued the bolivar a number of times, including a devaluation on January 8, 2010. Foreign currency losses for the three months ended March 31, 2010 included approximately $13.6 as a result of this devaluation.

The Company has entered into an interest rate swap agreement to minimize the economic impact of unexpected fluctuations in interest rates on the lease of its compressor testing facility in France. The interest rate swap has a notional amount of€18.0 (approximately $24.3) and effectively converts substantially the entire interest component of the lease from a variable rate of interest to a fixed rate of interest. The interest rate swap has been designated as a cash flow hedge for accounting purposes, and unrealized gains and losses are recognized in other comprehensive income. The fair value of the interest rate swap and the related unrealized loss are not material to the consolidated financial statements.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2010. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2010, our disclosure controls and procedures were effective.

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During the three months ended March 31, 2010, there were no changes in internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II. — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS ($ and £ in millions)

We are involved in various litigation, claims and administrative proceedings arising in the normal course of business. Amounts recorded for identified contingent liabilities are estimates, which are regularly reviewed and adjusted to reflect additional information when it becomes available. We are indemnified by our former owner, Ingersoll Rand Company Limited, for certain of these matters as part of Ingersoll Rand’s sale of the Company. While adverse decisions in certain of these litigation matters, claims and administrative proceedings could have a material effect on a particular quarter’s or year’s results of operations, subject to the uncertainties inherent in estimating future costs for contingent liabilities and the benefit of the indemnity from Ingersoll Rand, management believes that any future accruals, with respect to these currently known contingencies, would not have a material effect on the financial condition, liquidity or cash flows of the Company.

Of the litigation pending, a tort claim has been brought against the Company in 2008 in the Prakhanong Provincial court, Thailand by Kaona Power Supply Co. Ltd., alleging, among other matters, defects and negligence in connection with the manufacture, testing, installation and commissioning of a new unit and claiming damages in the aggregate of approximately $9.0 plus pre-judgment interest and costs. While damages are a possibility, the Company shall vigorously defend this lawsuit, including by asserting its contractual limitation of liability and agreement to exclude consequential damages. Moreover, the Company is asserting rights it believes it has to insurance coverage with respect to this claim.

In a case between Talisman Energy, Inc. and the Company that was previously reported in which the claimant was seeking damages of approximately $21.0, the Company settled the case for an immaterial amount.

In November 2007, Local 313 of IUE-CWA, the union that represents certain employees at the Company’s Painted Post facility (the “IUE”) made an offer to have its striking members return to work under the terms of the previously expired union agreement. The Company rejected that offer and a lockout of the represented employees commenced. Approximately one week later, after reaching an impasse in negotiations, the Company exercised its right to implement the terms of its last contract offer, ended the lockout, and the employees represented by the IUE agreed to return to work under the implemented terms. Subsequently, the IUE filed several unfair labor practice (“ULP”) charges against the Company with Region 3 of the National Labor Relations Board (“NLRB”), asserting multiple allegations arising from the protracted labor dispute, its termination, contract negotiations and related matters.

Region 3 of the NLRB decided to proceed to complaint on only one-third of the ULP allegations asserted by the IUE, while the remaining claims were dismissed. Notably, the NLRB found that many of the critical aspects of the Company’s negotiations with the IUE were handled appropriately, including, that the union’s strike was not an unfair labor practice strike and the Company’s declaration of impasse and its unilateral implementation of its last offer were lawful.

The claims that proceeded to complaint before the NLRB included the Company’s handling of the one week lockout, the negotiation of the recall process used to return employees to the facility after reaching impasse and lifting the lockout, and the termination of two employees who engaged in misconduct on the picket line during the strike. The trial of this matter took place before a NLRB Administrative Law Judge (the “ALJ”) in Elmira and Painted Post, N.Y. during the summer of 2009. On January 29, 2010, the ALJ issued his decision in which he found in favor of the union on some issues and upheld the Company’s position on others. The Company continues to believe it complied with the law with respect to the allegations that led to the adverse ALJ ruling, and it has appealed these rulings to the NLRB in Washington, D.C. While the Company believes it should ultimately prevail with respect to these ULP allegations, several levels of appeal may be necessary. The Company anticipates that any impact arising from the ULP allegations will not have a material adverse effect on the Company’s financial condition. The appellate process could reasonably take 3 to 5 years and potentially even longer to resolve with finality.

During the three months ended September 30, 2009, the Company received notification from the current plan trustees of one of its subsidiaries’ pension plans in the United Kingdom that the plan may not have been properly amended to achieve sex equalization. The third-party trustee at the time action was taken believes that it had taken the appropriate steps to properly amend the plan. If it is determined that sex equalization was not achieved, certain benefits would be recalculated by reference to a normal retirement date of 60 for both men and women, which we believe could result in a potential liability of up to approximately £4.0 ($6.1).

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table contains information about repurchases of our common stock during the three months ended March 31, 2010:

					Total Number		Approximate
					of Shares		Dollar Value
					Purchased as		of Shares
					Part of		That May Yet
					Publicly		Be Purchased
	Total Number		Average Price		Announced		Under the
	of Shares		Paid Per		Plans or		Plans or
Period	Purchased (1)		Share		Programs		Programs
January 2010		—	$	—		—		—
February 2010		80,021	$	31.20		—		—
March 2010		—	$	—		—		—
Total		80,021				—		—

(1) These shares were delivered to us as payment of withholding taxes due on the vesting of restricted stock issued under our Stock Incentive Plan.

ITEM 6. EXHIBITS

The following exhibits are filed with this report:

Exhibit No.		Description
	3.1	Amended and Restated Certificate of Incorporation of Dresser-Rand Group Inc. (incorporated by reference to Exhibit 3.1 to Dresser-Rand Group Inc.’s Registration Statement on Form S-1/A, filed July 18, 2005, File No. 333-124963).
	3.2	Amended and Restated By-Laws of Dresser-Rand Group Inc. (incorporated by reference to Exhibit 3.1 to Dresser-Rand Group Inc.’s Current Report on Form 8-K, filed November 16, 2007, File No. 001-32586).
	10.1	Dresser-Rand Annual Incentive Program, adopted February 12, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on February 17, 2010, File No. 001-32586).
	10.2	Dresser-Rand Group Inc. Form of Grant Notice and Standard Terms and Conditions for Performance Restricted Stock Units (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on March 17, 2010, File No. 001-32586).
	10.3	Second Amendment to the Dresser-Rand Group Inc. 2008 Stock Incentive Plan, adopted March 15, 2010 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on March 17, 2010, File No. 001-32586).
	31.1	Certification of the President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of the Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of the President and Chief Executive Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). (This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference).
	32.2	Certification of the Executive Vice President and Chief Financial Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). (This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference).

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DRESSER-RAND GROUP INC.
Date: April 29, 2010	/s/ Raymond L. Carney Jr.
	Raymond L. Carney Jr.
	Vice President, Controller and Chief Accounting Officer

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