Howard Weil 37th Energy Conference
March 25, 2009
Disclosure
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain
forward-looking statements so long as such information is identified as forward-looking and is
accompanied by meaningful cautionary statements identifying important factors that could
cause actual results to differ materially from those projected in the information.
The use of words such as “may”, “might”, “will”, “should”, “expect”, “plan”, “outlook”,
“anticipate”, “believe”, “estimate”, “project”, “intend”, “future”, “potential” or “continue”, and
other similar expressions are intended to identify forward-looking statements.
All of these forward-looking statements are based on estimates and assumptions by our
management that, although we believe to be reasonable, are inherently uncertain. Forward-
looking statements involve risks and uncertainties, including, but not limited to, economic,
competitive, governmental and technological factors outside of our control, that may cause our
business, industry, strategy or actual results to differ materially from the forward-looking
statements.
These risks and uncertainties may include those discussed in the Company’s most recent
filings with the Securities and Exchange Commission, and other factors which may not be
known to us. Any forward-looking statement speaks only as of its date. We undertake no
obligation to publicly update or revise any forward-looking statement, whether as a result of
new information, future events or otherwise, except as required by law.
2
Company Overview
Dresser-Rand - Global Supplier of Energy Solutions
Over 90% of bookings for the twelve months ended 12/31/08 of $2.3
billion from oil and gas infrastructure spending
Compression is needed at every stage of the oil and gas production
cycle – upstream, midstream and downstream
A leading provider of rotating equipment / largest installed base /
industry leading alliances
Aftermarket
Parts and
Services
New Units
55%
45%
2008 Sales By
Business Segment
2008 Revenues By
Destination
North
America
Asia Pacific
11%
41%
Latin
America
Europe
Middle
East /Africa
25%
11%
12%
4
Strong Markets & Operational Excellence Have Led to
Solid Revenue and Income Growth
Backlog End of Period
($ in Millions)
Bookings
($ in Millions)
Sales
($ in Millions)
Operating Income
($ in Millions)
5
Extensive Global Presence
Shanghai,
PRC
Kemanan,
Terengganu, Malaysia
Cilegon,
Banten, Indonesia
Naroda, India
Kongsberg, Norway
Spijkenisse,
The Netherlands
Oberhausen,
Germany
Peterborough
Cambridgeshire U.K.
Le Havre,
France
Genoa, Italy
Campinas - SP, Brazil
Maracaibo, Edo.
Zulia Venezuela
Edmonton, Alberta
Canada
Seattle, WA
Rancho
Dominguez, CA
Chula Vista, CA
Tulsa, OK
Midland, TX
Houston, TX
Baton Rouge, LA
Chesapeake, VA
Naperville, IL
Hamilton, OH
Horsham, PA
Olean, NY
Wellsville, NY
Painted Post, NY
WW Headquarters
Regional Centers
Kuala Lumpur, Malaysia
Houston, Texas
Le Havre, France
Houston, Texas, USA
Service Centers (33)
Global Operations
Olean, New York
Wellsville, New York
Painted Post, New York
Burlington, Iowa
Houston, Texas
Louisiana, Missouri
Kiefer, Oklahoma
Kuala Lumpur, Malaysia
Burlington, IA
Bielefeld,
Germany
Port Harcourt
Nigeria
Mayport, FL
Chirchik,
Uzbekistan
Angola
Africa
Aberdeen,
Scotland, U.K.
Le Havre, France
Oberhausen, Germany
Bielefeld, Germany
Kongsberg, Norway
Naroda, India
Shanghai, China
Peterborough, UK
Louisiana, MO
Jena, LA
Sarnia, Ontario
Kiefer, OK
Abu Daibi,
UAE
6
Upstream
Midstream
Downstream
Inlet Volume (cfm)
50
500
5,000
50,000
500,000
1
150
1,500
15,000
75,000
Gas Reinjection
LNG
Refining
Hydrogen
Ethylene
GTL
CNG
Axial
DATUM
Axially
Split
Pipeline
Booster
Process
& Separable
Recip
PDI
Boil-Off
Recip
DATUM (HP)
Clean Fuels
Centrifugal
Gas Transmission
Multi-Stage
Steam
Turbine
SST
Broadest Rotating Equipment Offering
Meets All Applications
7
Most Client Alliances in Industry ~ 50
Validation of Dresser-Rand’s Value Proposition
8
Outlook
Traditional Market Opportunities
Offshore production / LNG / FPSO
Peter Brotherhood acquisition strengthens position in
FPSO market
LNG / Floating LNG (awarded world’s 1st project)
Upstream
Midstream
Downstream
Gas pipelines & storage
Recent acquisitions strengthen position (Arrow;
Enginuity)
Coal bed Methane, Shale
Refining - expansions, process upgrades,
environmental compliance, energy conservation,
difficult crudes
Petro-chemical / Chemical (Asia Pacific, India and
Middle East)
10
Emerging Market Opportunities
ICS - DATUM derivative technology / close
coupled motor / proprietary separation technology
1st commercial order – topside Petrobras P-18
Subsea
CAES
CO2 Sequestration
Experience and Technology - Only operating
installation in North America
Government Incentives - Federal, State and “Green”
incentives
Tracking ~ 15 projects
DRC has the most horsepower worldwide
compressing CO2
Working with Praxair on clean coal pilot plant in
Jamestown New York
Invested in Ramgen supersonic compressor
technology
11
Current Market Conditions
New Unit Bookings
2009 estimate - $0.7 to $1.1 billion (1Q09 run rate below
range)
Delay appears temporary – cost reductions sought
No major new unit order cancellations
Inquiries remain at a high level
Aftermarket bookings continue to be steady
Slowing economy will challenge us but 2009 revenues and
operating income expected to be up from 2008
Planning our manufacturing strategy over the past eight
years to be well positioned for cyclical lows
Not The First Slowdown We Have Faced
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Well Positioned to Weather a Slowdown
Strong backlog of orders
Historically dependable aftermarket segment
Strong value proposition & selling strategy
Flexible manufacturing model
Unique low capital intensity business model
Strong balance sheet
Leadership in place to ensure continued good execution
Focused on Operational Excellence
And Productivity Improvements
13
Strong Backlog of Orders
($ in Millions)
Backlog of $2.3 billion
21% higher than 12/07
78% higher than 12/06
New unit backlog up 19%
vs. last year
$1.4 billion scheduled
to ship in 2009
Aftermarket backlog up
33% vs. last year
$1,267
$1,859
$2,252
14
Largest installed base - difficult to duplicate:
Built through organic sales and acquisitions
Typical operating life of ~ 30-years
Historically Dependable Aftermarket
(Revenue $ in Millions)
15
Recognized for lowest Total Cost of Ownership
Consistently able to obtain price premiums over competition
D-R’s Technology often offers unique cost saving solutions
others cannot. Example: Flex LNG, world’s 1st floating LNG
Actual quote from the client’s EPC Technical Director:
“D-R was chosen on the basis of their compressor
technology and their gas turbine/compressor packaging
concept, which are drivers for minimizing total project
risk as well as maximizing the production of LNG.”
Strong Value Proposition and Selling Strategy
D-R Technology & Business Processes --
Source of Sustainable Competitive Advantage
16
Flexible Manufacturing Model
Highly absorbed internally at cycle bottoms
Able to flex capacity to meet cycle peaks
Flexibility Through Supply Chain Management
($ in Millions)
2001
2008
08 vs. '01
Sales
$877
$2,195
2 1/2 X
Operating Income
$21
$338
16 X
- % of Sales
2.4%
15.4%
Employees
6,084
6,400
5%
Manufacturing Footprint ( Sq. Ft.)
~ 3.9 M
~ 4.0 M
Small
Change
17
Unique Low Capital Intensity Business Model
NWC as a % of LTM Sales
Modest working capital
requirements
Customer advance payments
and progress payments
finance working capital
Manufacturing strategy allows
for low capital expenditures
Aftermarket segment low
capital intensity
Capex as a % of Sales
*
* Reflects acquisition from Ingersoll-Rand in October 2004.
Period
Ended
*
18
Strong Balance Sheet
7 3/8% Notes Mature 2014
No Revolver Borrowings / $271
Used for Letters of Credit
Net debt to total capital 20%
Total debt $370
Net debt $223
Net debt to adjusted EBITDA 0.6X
Liquidity at 12/31/08 = $376 ($147
Cash + $229 Revolver)
Net Debt to Adjusted EBITDA
Net Debt to Capital
At 12/31:
At 12/31:
19
2009 Operating Income Guidance
($ in Millions)
Basis of 2009 estimate – 1/31/09 exchange rate (EURO to US$ = 1.28)
1Q09 Operating Income guidance unchanged – 11% to 13% of full year
guidance range
2009 Guidance Range
2008
Actual
2008
Pro Forma
(1/31/09 Exch. Rate)
$310 - $315
20
Summary
Believe we have sustainable competitive advantages:
Technology, Alliances, Installed Base, Service Network
Believe we are very well positioned for difficult economy
Unique business model (manufacturing flexibility / low
capital intensity)
Dependable aftermarket revenue stream
Strong financial condition
Experienced leadership
When global economy starts to recover believe energy
infrastructure investment will accelerate quickly and lead to
superior returns for our shareholders
Believe Market Will Reward DRC for its
Flexible Business Model / Consistent Aftermarket
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Appendix
22
Adjusted EBITDA Reconciliation to GAAP
($ in Millions)
2008
2007
2006
2005
2004
GAAP Net Income
$197.7
$106.7
$78.8
$37.1
$49.4
Interest Expense - net
29.4
36.8
47.9
57.0
6.5
Depreciation & Amortization
48.8
49.3
50.3
61.4
39.0
Income Tax Expense
103.6
60.9
58.6
15.5
19.2
EBITDA
$379.5
$253.7
$235.6
$171.0
$114.1
Adjustments:
Curtailment Amend. / Parial Settlement
(5.4)
0.0
(11.8)
0.0
0.0
Stock-based Compensation
7.4
8.5
23.6
0.0
0.0
Forward Exchange Contracts (gain) loss
(9.2)
1.4
(1.9)
2.2
(1.1)
Other
1.0
(1.5)
3.9
14.5
35.9
Adjusted EBITDA
$373.3
$262.1
$249.4
$187.7
$148.9
23
NWC Reconciliation to GAAP
($ in Millions)
2008
2007
2006
2005
2004
Current Assets
$907.8
$825.7
$669.0
$549.4
$574.6
Less: Current Liabilities
(736.3)
(620.5)
(471.5)
(393.2)
(329.7)
GAAP Net Working Capital (NWC)
$171.5
$205.2
$197.5
$156.2
$244.9
Adjustments:
Cash and Cash Equivalents
(147.1)
(206.2)
(146.8)
(98.0)
(111.5)
Deferred Income Taxes
(22.5)
(19.3)
(13.9)
(10.9)
(7.4)
Accrued Income Taxes Payable
30.2
22.0
30.3
5.0
2.7
Other
0.2
0.2
0.1
0.1
4.0
Net Working Capital
$32.3
$1.9
$67.2
$52.4
$132.7
24
Net Debt Reconciliation to GAAP
($ in Millions)
2008
2007
2006
2005
2004
Total Debt
$370
$370
$506
$598
$823
Less Cash
(147)
(206)
(147)
(98)
(112)
Net Debt
$223
$164
$359
$500
$711
At 12/31
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www.dresser-rand.com
info@dresser-rand.com
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