Company Overview / Strategic Content Dresser-Rand Group Inc. (NYSE: DRC) Guascor Group Potential Acquisition March 7, 2011 Conference Call Copyright 2011 1
Guascor Group (GG) - Outstanding Strategic Fit & Compelling Financial Opportunity Consistent with Strategy presented at 11/11/2010 Investor/Analyst Day GG gas and diesel engine technology can: Enhance DRC product portfolio for…
GG - Overview Private industrial company founded 2010 Estimated Revenues 1966 by Business Headquarters Vitoria-Gasteiz, Spain Power 1,300 employees Systems Customized energy solutions based Energy (Engine & Parts) Assets / 153…
Power Systems - Engine Business Power Generation applications inclusive of aftermarket activity (parts, repairs and service) distributed generation and turnkey solutions Engine line includes gas, liquid and dual fuel capability…
Energy Assets and O&M Services Energy Assets: Ownership, operation and maintenance of energy plants using GG technology - 300MW under ownership Enables a full understanding of the operational behavior of key equipment and systems…
Renewables Business Solar: Active system integrator in the renewables power market Distributed Generation: targets remote area needs as a complement to Power Systems business Uses solar as a power source to provide isolated areas…
Strategic Fit 8 Copyright 2011
Leveraging Product Platforms Across Energy Infrastructure Markets From 11/11/2010 Investor/Analyst presentation Copyright 2011 100 % product technology overlap 9
Leveraging Product Platforms Across Energy Infrastructure Markets Oil & Gas Market Environmental Market Bio- U/S M/S D/S EOR CHP CSP WTE CAES CCS mass Centrifugal Reciprocating Product Technology Platforms Axial Key:…
D-Rs Organization Alignment From 11/11/2010 Investor/Analyst presentation Two market-based Client Facing groups Oil & Gas Enhanced w/ GG Environmental Solutions Focus on the unique requirements of each segment with a Value Selling…
Guascor Footprint - Commercial & Operational Area of Influence (*) GG Commercial HQ Branches Power Distributors, Agents, Packagers Renewable Agents, JV & Distributors Power / Renew Distributors, Agents Service Centers Gets DRCs…
Market Dynamics From 11/11/2010 Investor/Analyst presentation We have taken a 20 year view of markets with the following expectations: Major growth in oil & gas will come from outside the US National Oil Companies will become…
New Units - Served Industry Market (SIM) From 11/11/2010 Investor/Analyst presentation Enhanced w/ GG Enhanced w/ GG Copyright 2011 14
Environmental Market Primary Growth Drivers From 11/11/2010 Investor/Analyst presentation Rise in energy demand in emerging countries Enhanced w/ GG Distributed power generation - lack (emerging economies) or old (Western world)…
(II) Building on D-R Core Steam Turbine Technology to Serve Adjacent Space From 11/11/2010 Investor/Analyst presentation Existing Market Applications Compressor drive oil and gas Pump drive nuclear Enhanced w/ GG Distributed power…
GG Alignment with DRCs Target Markets Energy Infrastructure Markets Not Turbines DRC DRC DRC DRC DRC DRC Applicable Not Not Not Compressors DRC DRC DRC DRC Required to Serve Applicable Applicable Applicable Not Not…
Growth Accelerators From 11/11/2010 Investor/Analyst presentation ICS business development and marinization (subsea) program Ramgen supersonic compression Localization and infrastructure build-out Gas turbine repair capability…
Summary From 11/11/2010 Investor/Analyst presentation Traditional Oil & Gas markets are expected to grow at 10% CAGR over the next 5-year period Enhanced w/ GG Emerging markets in the environmental space are expected to grow…
Financial Impact Copyright 2011 20
Continued Focus on Operational Excellence From 11/11/2010 Investor/Analyst presentation Potential to Accelerate to 2014 A critical success factor is Copyright 2011 continued operational discipline 21
Cumulative Total Shareholder Return Potential Impact of GG acquisition Use of Excess Free Cash Flow Copyright 2011 Indexed returns based on 100 investment on August 5, 2005 (DRC IPO date) 22
Proposed Deal Structure ( in Millions) DRC to acquire GG for an enterprise value of 500 million (690) Purchase 100% of the shares of GG for an expected price of 376 million (518) Assume net debt of 125 million (172) Purchase price…
Balance Sheet Strength Key Ratios (Pro-forma ratios assumes GG acquisition closes as though effective as of 12/31/10) 60% 6.0 Potential to rapidly de-lever 50% ability to further 5.0 Net Debt to adjusted EBITDA accelerate…
Closing Conditions / Timeline Closing under the Agreement is subject to various closing conditions, including receipt of a variety of regulatory approvals, licenses and clearances, which may not be satisfactorily obtained.…
Summary Great strategic fit GG offers DRCs Environmental SBU critical competencies and resources required to pull DRC product and services into bio- energy and distributed power generation and bio-mass applications GGs engine…
Appendix 27 Copyright 2011
EBITDA Reconciliation to GAAP ( in Millions) For the year ended December 31, 2010 Pro Forma Dresser-Rand GG Adjustments * Pro Forma (in millions) Adjusted EBITDA 300.9 64.7 - 365.6 Less: Interest expense, net 33.0 16.3 14.9 64.2…
Net Debt Reconciliation to GAAP ( in Millions) December 31, 2010 October 31, 2010 Pro Forma GG GG Dresser-Rand Adjustments* Pro Forma (in millions) 164.9 Debt and capital lease obligations 221.8 370.0 330.0 921.8 3.0 Emission…
Risk Factors We may not be able to integrate our acquisitions successfully, or achieve the expected benefits from, any future acquisitions, which could adversely affect our results. We have at times used acquisitions as a means of…
Risk Factors (contd) We are subject to different regulatory requirements and have different policies than GG, and as a result the scope of the GG business operated by us following the closing may be different than the historical scope…
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