Dresser-Rand Announces $150 Million Accelerated Share Buyback Program

Dresser-Rand Group

announced today that its board of directors has authorized in total the repurchase of up to $150 million of its common stock, which is approximately 5 percent of the Company's outstanding shares. As of August 25, 2011, Dresser-Rand had 78.7 million shares of common stock outstanding. According to Mark Baldwin, Executive V.P. and CFO, "the decision to repurchase was based on three criteria: the recent precipitous relative drop in the Company's share price, the capacity that presently exists on our balance sheet, which allows for this level of expenditure, and our present view that we expect strong bookings in the second half of 2011. While we presently reiterate our previous guidance for 2011 in the area of bookings, we also acknowledge that, should our bids on several large projects for which we believe we have strong offerings actually materialize prior to the end of the year, we may be at the top end of, or even exceed, the guidance previously provided. In essence, we believe that the time is right for repurchase, that we have the present capacity to fund the transaction, and that the strong expected bookings will generate sufficient cash flows to provide for reducing balance sheet leverage and at the same time enable us to meet ongoing financial commitments for working capital, capital expenditures and potential bolt-on acquisitions over the coming months." The stock buyback transaction is being carried out under an accelerated stock buyback agreement with Goldman, Sachs & Co. As contemplated by that agreement, Dresser-Rand will pay approximately $150 million to Goldman, Sachs & Co. to repurchase outstanding shares of its common stock and will receive a substantial majority of the shares to be delivered under the accelerated stock buyback on August 31, 2011. Goldman, Sachs & Co. is expected to purchase shares of Dresser-Rand common stock in the open market in connection with the accelerated stock buyback. The agreement contemplates that final settlement should occur early in the fourth quarter. At settlement, Dresser-Rand may be entitled to receive additional shares of common stock from Goldman, Sachs & Co. or, under certain circumstances, may issue additional shares or make a payment to Goldman, Sachs & Co. at the Company's option.