##### 



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 1934For the Quarterly Period Ended
    March 31, 2008o

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
    ACTFor 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
    
    incorporation or organization)

(I.R.S. Employer
    Identification No.)1200 W. Sam
    Houston Parkway, N.
    Houston, TX(Address of principal
    executive offices)

77043(Zip Code)   (713) 467-2221
 (Registrants telephone
    number, including area code)
   (Former name, former address and
    former fiscal year, if changed since last report)
   þ o
  12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o  Rule 12b-2 o þ




---



##### 



DRESSER-RAND
    GROUP INC.
  TABLE OF CONTENTS
  PagePART I.  FINANCIAL INFORMATIONItem 1.

Financial Statements (unaudited):Consolidated Statement of Income for the three months ended
    March 31, 2008 and 2007


3Consolidated Balance Sheet at March 31, 2008 and
    December 31, 2007


4Consolidated Statement of Cash Flows for the three months ended
    March 31, 2008 and 2007


5Notes to Unaudited Consolidated Financial Statements at
    March 31, 2008


6-18Item 2.

Managements Discussion and Analysis of Financial Condition
    and Results of Operations


19-25Item 3.

Quantitative and Qualitative Disclosure about Market Risk


25Item 4.

Controls and Procedures


26PART II.  OTHER INFORMATIONItem 1.

Legal Proceedings


26Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds


26Item 5.

Other Events


26Item 6.

Exhibits


27Signatures


28Exhibits  2




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##### 



PART I. 
    FINANCIAL INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS  DRESSER-RAND
    GROUP INC.
  CONSOLIDATED
    STATEMENT OF INCOME
  Three Months Ended March 31,2008


2007(Unaudited; $ in millions, except per share amounts)Net sales of products

$
287.1


$
242.1Net sales of services


76.7



72.3Total revenues


363.8



314.4Cost of products sold


206.2



173.3Cost of services sold


51.9



49.5Total cost of sales


258.1



222.8Gross profit


105.7



91.6Selling and administrative expenses


63.9



55.5Research and development expenses


2.1



3.1Curtailment amendment


(7.2
)


Income from operations


46.9



33.0Interest expense, net


(7.0
)


(10.9
)Other income, net


1.8



2.3Income before income taxes


41.7



24.4Provision for income taxes


14.5



9.0Net income

$
27.2


$
15.4Net income per common share-basic and diluted

$
0.32


$
0.18Weighted average shares outstanding  (In
    thousands)Basic


85,514



85,459Diluted


85,659



85,459    3




---



##### 



DRESSER-RAND
    GROUP INC.
 CONSOLIDATED
    BALANCE SHEET  March 31,


December 31,2008


2007(Unaudited; $ in millions, except per share amounts)ASSETSCurrent assetsCash and cash equivalents

$
258.8


$
206.2Accounts receivable, less allowance for losses of $6.0 at 2008
    and $5.9 at 2007


264.0



311.9Inventories, net


266.6



265.3Prepaid expenses


34.1



23.0Deferred income taxes, net


19.3



19.3Total current assets


842.8



825.7Property, plant and equipment, net


218.5



216.7Goodwill


470.6



447.5Intangible assets, net


439.2



440.0Other assets


20.1



21.0Total assets

$
1,991.2


$
1,950.9LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable and accruals

$
359.4


$
358.4Customer advance payments


236.9



239.9Accrued income taxes payable


23.8



22.0Loans payable


0.2



0.2Total current liabilities


620.3



620.5Deferred income taxes


50.6



48.4Postemployment and other employee benefit liabilities


77.6



80.6Long-term debt


370.2



370.3Other noncurrent liabilities


23.7



25.9Total liabilities


1,142.4



1,145.7Commitments and contingencies (Notes 6 through 10)Stockholders equityCommon stock, $0.01 par value, 250,000,000 shares
    authorized; and, 86,005,995 and 85,826,523 shares issued
    and outstanding, respectively


0.9



0.9Additional paid-in capital


527.6



527.3Retained earnings


256.8



229.7Accumulated other comprehensive income


63.5



47.3Total stockholders equity


848.8



805.2Total liabilities and stockholders equity

$
1,991.2


$
1,950.9    4




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##### 



DRESSER-RAND
    GROUP INC.
  CONSOLIDATED
    STATEMENT OF CASH FLOWS
  Three Months Ended March 31,2008


2007(Unaudited; $ in millions)Cash flows from operating activitiesNet income

$
27.2


$
15.4Adjustments to arrive at net cash provided by operating
    activities:Depreciation and amortization


12.4



11.9Deferred income taxes


3.0



1.0Stock-based compensation


1.4



4.5Amortization of debt financing costs


0.8



1.8Provision for losses on inventory


0.4



0.7Curtailment amendment


(7.2
)


Working capital and otherAccounts receivable


54.5



60.6Customer advances


(13.5
)


51.7Accounts payable


(9.9
)


(15.8
)Inventories


4.3



(10.9
)Other


(18.7
)


(13.5
)Net cash provided by operating activities


54.7



107.4Cash flows from investing activitiesCapital expenditures


(6.0
)


(4.7
)Proceeds from sales of property, plant and equipment


0.2



Net cash used in investing activities


(5.8
)


(4.7
)Cash flows from financing activitiesPurchase of treasury stock


(0.9
)


Payments of long-term debt


(0.1
)


(50.0
)Net cash used in financing activities


(1.0
)


(50.0
)Effect of exchange rate changes on cash and cash equivalents


4.7



0.6Net increase in cash and cash equivalents


52.6



53.3Cash and cash equivalents, beginning of the period


206.2



146.8Cash and cash equivalents, end of period

$
258.8


$
200.1    5




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS
 ($ in millions)
  1.
    Basis of
    presentation  Form 10-K
  2.
    New
    accounting standards  Fair Value Measurements.
    Level 1

Unadjusted quoted prices in active markets for identical assets
    or liabilitiesLevel 2

Unadjusted quoted prices in active markets for similar assets or
    liabilities, orUnadjusted quoted prices for identical or similar asset or
    liabilities in markets that are not active, orInputs other than quoted prices that are observable for the
    asset or liabilityLevel 3

Unobservable inputs for the asset or liability     Foreign currency exchange contracts assets

$
4.2Foreign currency exchange contracts liabilities

$
3.1   over-the-counter
  No. 157-2, Partial Deferral of the Effective Date of Statement
    No. 157 No. 157-2
 6




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans, an
    amendment of FASB Statements No. 87, 88, 106 and 132(R),
  Disclosures about Derivative Instruments and Hedging
    Activities, an amendment of FASB Statement No. 133
  3.
    Intangible
    assets and goodwill    March 31, 2008


Weighted


December 31, 2007Accumulated


Average





AccumulatedCost


Amortization


Useful Lives


Cost


AmortizationTrade names

$
88.8


$
7.4



40 years


$
88.7


$
6.9Customer relationships


250.6



22.2



39 years



246.9



20.2Software


30.6



10.4



10 years



30.6



9.7Existing technology


127.1



17.9



25 years



127.1



16.5Total amortizable intangible assets

$
497.1


$
57.9






$
493.3


$
53.3       March 31,2008Beginning balance

$
447.5Foreign currency adjustments


23.1Ending balance

$
470.6  7




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  4.
    Inventories    March 31,


December 31,2008


2007Raw materials and supplies

$
124.2


$
123.9Work-in-process
    and finished goods


437.5



330.2561.7



454.1Less:Progress payments


(295.1
)


(188.8
)Total inventories

$
266.6


$
265.3     5.
    Property,
    plant and equipment    March 31,


December 31,2008


2007Cost:Land

$
10.0


$
9.6Buildings and improvements


83.9



80.4Machinery and equipment


223.0



215.4316.9



305.4Less: Accumulated depreciation


(98.4
)


(88.7
)Property, plant and equipment, net

$
218.5


$
216.7   6.
    Income
    taxes     8




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  7.
    Pension
    plans    Three Months Ended March 31,2008


2007Service cost

$
1.8


$
1.7Interest cost


5.1



4.6Expected return on plan assets


(5.8
)


(5.4
)Amortization of net losses


0.1



Net pension expense

$
1.2


$
0.9   8.
    Postretirement
    benefits other than pensions    Three Months Ended March 31,2008


2007Service cost

$
0.1


$
0.4Interest cost


0.5



0.6Amortization of prior service (credit)


(1.8
)


(0.1
)Curtailment amendment


(7.2
)


Net periodic postretirement benefits (gain) cost

$
(8.4
)

$
0.9     9.
    Commitments
    and contingencies   9




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
      10.
    Warranty
    accruals      Three Months Ended March 31,2008


2007Beginning balance

$
28.5


$
23.4Provisions for warranties issued during the period


5.1



4.8Adjustments to warranties issued in prior periods


1.3



1.0Payments during period


(6.9
)


(3.6
)Foreign currency adjustments


0.9



0.2Ending balance

$
28.9


$
25.8   11.
    Segment
    information         10




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
    Three Months Ended March 31,2008


2007RevenuesNew units

$
149.5


$
114.3Aftermarket parts and services


214.3



200.1Total revenues

$
363.8


$
314.4Operating IncomeNew units

$
9.2


$
4.6Aftermarket parts and services


50.0



48.2Unallocated


(12.3
)


(19.8
)Total operating income

$
46.9


$
33.0Depreciation and AmortizationNew units

$
5.6


$
5.0Aftermarket parts and services


6.8



6.9Total depreciation and amortization

$
12.4


$
11.9Total Assets (including Goodwill)New units

$
286.8


$
234.5Aftermarket parts and services


705.1



606.7Unallocated


999.3



943.0Total assets

$
1,991.2


$
1,784.2  11




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  12.
    Stockholders
    equity    AccumulatedOtherCommon


Additional


Retained


ComprehensiveStock


Paid-in Capital


Earnings


Income


TotalAt December 31, 2007

$
0.9


$
527.3


$
229.7


$
47.3


$
805.2Stock-based employee compensation






0.3











0.3Adoption of FASB Statement No. 158










(0.1
)






(0.1
)Net income










27.2







27.2Other comprehensive income (loss)Foreign currency translation adjustment














18.9



18.9Pension and other postretirement benefit plans  net
    of $1.7 tax:Adoption of FASB Statement No. 158














(0.3
)


(0.3
)Benefit plans amortization














(1.0
)


(1.0
)Benefit plan amendment














2.2



2.2Curtailment amendment














(4.5
)


(4.5
)Net gain from remeasurement














0.9



0.9At March 31, 2008

$
0.9


$
527.6


$
256.8


$
63.5


$
848.8     Three Months Ended March 31,2008


2007Net income

$
27.2


$
15.4Other comprehensive income:Foreign currency adjustments


18.9



5.0Pension and other postretirement benefit plans  net
    of $1.7 tax in 2008 and $(3.1) in 2007:Adoption of FASB Statement No. 158


(0.3
)


Benefit plans amortization


(1.0
)


Benefit plan amendment


2.2



5.0Curtailment amendment


(4.5
)


Net gain from remeasurement


0.9



Total comprehensive income

$
43.4


$
25.4    12




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  13.
    Supplemental
    guarantor financial information      CONDENSED
    CONSOLIDATING STATEMENT OF INCOME
 For the three months ended March 31, 2008
  Subsidiary


Subsidiary


ConsolidatingIssuer


Guarantors


Non-Guarantors


Adjustments


TotalNet sales

$



$
276.0


$
116.5


$
(28.7
)

$
363.8Cost of sales






203.4



75.8



(21.1
)


258.1Gross profit






72.6



40.7



(7.6
)


105.7Selling and administrative expenses


32.5



14.3



22.7



(5.6
)


63.9Research and development expenses






2.0



0.1







2.1Curtailment amendment






(7.2
)










(7.2
)(Loss) income from operations


(32.5
)


63.5



17.9



(2.0
)


46.9Equity earnings in affiliates


50.3



1.1







(51.4
)


Interest (expense) income, net


(8.0
)






1.0







(7.0
)Intercompany interest and fees


1.5



(0.1
)


(1.4
)






Other (expense) income, net


(0.2
)


0.9



1.1







1.8Income before income taxes


11.1



65.4



18.6



(53.4
)


41.7(Benefit) provision for income taxes


(16.1
)


23.1



7.5







14.5Net income

$
27.2


$
42.3


$
11.1


$
(53.4
)

$
27.2  13




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  CONDENSED
    CONSOLIDATING STATEMENT OF INCOME
 For the three months ended March 31, 2007
  Subsidiary


Subsidiary


ConsolidatingIssuer


Guarantors


Non-Guarantors


Adjustments


TotalNet sales

$



$
216.5


$
127.0


$
(29.1
)

$
314.4Cost of sales






153.0



91.1



(21.3
)


222.8Gross profit






63.5



35.9



(7.8
)


91.6Selling and administrative expenses


32.8



10.7



18.5



(6.5
)


55.5Research and development expenses






3.0



0.1







3.1(Loss) income from operations


(32.8
)


49.8



17.3



(1.3
)


33.0Equity earnings in affiliates


37.7



0.5







(38.2
)


Interest (expense), net


(9.2
)






(1.7
)






(10.9
)Intercompany interest and fees


5.3



1.0



(6.3
)






Other income (expense), net


0.2



(0.1
)


2.2







2.3Income before income taxes


1.2



51.2



11.5



(39.5
)


24.4(Benefit) provision for income taxes


(14.2
)


19.1



4.1







9.0Net income

$
15.4


$
32.1


$
7.4


$
(39.5
)

$
15.4  14




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  CONDENSED
    CONSOLIDATING BALANCE SHEET
 March 31, 2008
  Subsidiary


Subsidiary


ConsolidatingIssuer


Guarantors


Non-Guarantors


Adjustments


TotalASSETSCash and cash equivalents

$
110.3


$



$
148.5


$



$
258.8Accounts receivables, net


0.4



135.3



128.3







264.0Inventories, net






187.9



86.6



(7.9
)


266.6Prepaids expenses and deferred income taxes


22.5



3.0



27.9







53.4Total current assets


133.2



326.2



391.3



(7.9
)


842.8Investment in affiliates


1,553.9



71.0







(1,624.9
)


Property, plant, and equipment, net






147.5



71.0







218.5Intangible assets, net






450.8



459.0







909.8Other assets


17.5







2.6







20.1Total assets

$
1,704.6


$
995.5


$
923.9


$
(1,632.8
)

$
1,991.2LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable and accruals

$
(60.9
)

$
340.5


$
340.5


$



$
620.1Loans payable






0.2











0.2Total current liabilities


(60.9
)


340.7



340.5







620.3Long-term debt


370.0



0.2











370.2Intercompany accounts


518.1



(585.8
)


67.7







Other noncurrent liabilities


28.6



60.8



62.5







151.9Total liabilities


855.8



(184.1
)


470.7







1,142.4Common stock


0.9















0.9Other stockholders equity


847.9



1,179.6



453.2



(1,632.8
)


847.9Total stockholders equity


848.8



1,179.6



453.2



(1,632.8
)


848.8Total liabilities and stockholders equity

$
1,704.6


$
995.5


$
923.9


$
(1,632.8
)

$
1,991.2  15




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  CONDENSED
    CONSOLIDATING BALANCE SHEET
 December 31, 2007
  Subsidiary


Subsidiary


ConsolidatingIssuer


Guarantors


Non-Guarantors


Adjustments


TotalASSETSCash and cash equivalents

$
70.7


$



$
135.5


$



$
206.2Accounts receivable, net


0.1



155.9



155.9







311.9Inventories, net






184.4



86.8



(5.9
)


265.3Prepaid expenses and deferred income taxes


21.1



2.8



18.4







42.3Total current assets


91.9



343.1



396.6



(5.9
)


825.7Investment in affiliates


1,466.5



69.9







(1,536.4
)


Property, plant, and equipment, net






149.1



67.6







216.7Intangible assets, net






454.6



432.9







887.5Other assets


18.7







2.3







21.0Total assets

$
1,577.1


$
1,016.7


$
899.4


$
(1,542.3
)

$
1,950.9LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable and accruals

$
(36.4
)

$
316.9


$
339.8


$



$
620.3Loans payable






0.2











0.2Total current liabilities


(36.4
)


317.1



339.8







620.5Long-term debt


370.0



0.3











370.3Intercompany accounts


408.5



(482.7
)


74.2







Other noncurrent liabilities


29.8



63.1



62.0







154.9Total liabilities


771.9



(102.2
)


476.0







1,145.7Common stock


0.9















0.9Other stockholders equity


804.3



1,118.9



423.4



(1,542.3
)


804.3Total stockholders equity


805.2



1,118.9



423.4



(1,542.3
)


805.2Total liabilities and stockholders equity

$
1,577.1


$
1,016.7


$
899.4


$
(1,542.3
)

$
1,950.9  16




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  CONDENSED
    CONSOLIDATING STATEMENT OF CASH FLOWS
 For the three months ended March 31, 2008
  Subsidiary


Subsidiary


ConsolidatingIssuer


Guarantors


Non-Guarantors


Adjustments


TotalCash flows from operating activities:Net cash (used in) provided by operating activities

$
(48.2
)

$
86.4


$
16.6


$
(0.1
)

$
54.7Cash flows from investing activities:Capital expenditures






(4.4
)


(1.6
)






(6.0
)Proceeds from sale of property, plant and equipment






0.1



0.1







0.2Net cash used in investing activities






(4.3
)


(1.5
)






(5.8
)Cash flows from financing activities:Payment of long-term debt






(0.1
)










(0.1
)Change in intercompany accounts


88.7



(82.0
)


(6.8
)


0.1



Purchase of treasury stock


(0.9
)














(0.9
)Net cash provided by (used in) financing activities


87.8



(82.1
)


(6.8
)


0.1



(1.0
)Effect of exchange rate changes










4.7







4.7Net increase in cash and equivalents


39.6







13.0







52.6Cash and cash equivalents, beginning of period


70.7







135.5







206.2Cash and cash equivalents, end of period

$
110.3


$



$
148.5


$



$
258.8  17




---



##### 



DRESSER-RAND
    GROUP INC.
  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ($ in millions)
  CONDENSED
    CONSOLIDATING STATEMENT OF CASH FLOWS
 For the three months ended March 31, 2007
  Subsidiary


Subsidiary


ConsolidatingIssuer


Guarantors


Non-Guarantors


Adjustments


TotalCash flows from operating activities:Net cash (used in) provided by operating activities

$
(9.7
)

$
83.2


$
32.6


$
1.3


$
107.4Cash flows from investing activities:Capital expenditures


(2.2
)


(1.6
)


(0.9
)






(4.7
)Net cash used in investing activities


(2.2
)


(1.6
)


(0.9
)






(4.7
)Cash flows from financing activities:Net change in debt


(50.0
)














(50.0
)Change in intercompany accounts


67.2



(81.6
)


15.7



(1.3
)


Net cash provided by (used in) financing activities


17.2



(81.6
)


15.7



(1.3
)


(50.0
)Effect of exchange rate changes










0.6







0.6Net increase in cash and equivalents


5.3







48.0







53.3Cash and cash equivalents, beginning of period


36.9







109.9







146.8Cash and cash equivalents, end of period

$
42.2


$



$
157.9


$



$
200.1  18




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##### 



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS ($ in millions)  Overview
              Results
    of Operations
  Three
    months ended March 31, 2008, compared to the three months
    ended March 31, 2007:
  Three Months Ended March 31,


Three Months Ended March 31,


Period to Period Change2008


2007


2007 to 2008


% ChangeStatement of Operations Data:Total revenues

$
363.8



100.0
%

$
314.4



100.0
%

$
49.4



15.7
%Cost of sales


258.1



70.9



222.8



70.9



35.3



15.8
%Gross profit


105.7



29.1



91.6



29.1



14.1



15.4
%Selling and administrative expenses


63.9



17.6



55.5



17.6



8.4



15.1
%Research and development expenses


2.1



0.6



3.1



1.0



(1.0
)


(32.3
)%Curtailment amendment


(7.2
)


(2.0
)










(7.2
)


NMOperating income


46.9



12.9



33.0



10.5



13.9



42.1
%Interest expense, net


(7.0
)


(1.9
)


(10.9
)


(3.4
)


3.9



(35.8
)%Other income, net


1.8



0.5



2.3



0.7



(0.5
)


(21.7
)%Income before income taxes


41.7



11.5



24.4



7.8



17.3



70.9
%Provision for income taxes


14.5



4.0



9.0



2.9



5.5



61.1
%Net income

$
27.2



7.5
%

$
15.4



4.9
%

$
11.8



76.6
%Bookings

$
575.7






$
425.6






$
150.1



35.3
%Backlog-ending

$
2,122.3






$
1,380.6






$
741.7



53.7
%  19




---



##### 



Total revenues.
  Cost of sales.
  Gross profit.
  Selling and administrative expenses.
  Research and development expenses.
  Curtailment amendment.
 20




---



##### 



Operating income.
  Interest expense, net.
  Other income, net.
  Provision for income taxes.
  Bookings and backlog.
 21




---



##### 



Segment
    information
          Segment
    Analysis  three months ended March 31, 2008,
    compared to three months ended March 31,
    2007:
  Three Months Ended March 31,





Period to Period Change2008





2007





2007 to 2008


% ChangeStatement of Segment Data:RevenuesNew units

$
149.5



41.1
%

$
114.3



36.4
%

$
35.2



30.8
%Aftermarket parts and services


214.3



58.9
%


200.1



63.6
%


14.2



7.1
%Total revenues

$
363.8



100.0
%

$
314.4



100.0
%

$
49.4



15.7
%Gross profitNew units

$
25.3






$
16.7






$
8.6



51.5
%Aftermarket parts and services


80.4







74.9







5.5



7.3
%Total gross profit

$
105.7






$
91.6






$
14.1



15.4
%Operating incomeNew units

$
9.2






$
4.6






$
4.6



100.0
%Aftermarket parts and services


50.0







48.2







1.8



3.7
%Unallocated


(12.3
)






(19.8
)






7.5



(37.9
)%Total operating income

$
46.9






$
33.0






$
13.9



42.1
%BookingsNew units

$
339.0






$
235.0






$
104.0



44.3
%Aftermarket parts and services


236.7







190.6







46.1



24.2
%Total bookings

$
575.7






$
425.6






$
150.1



35.3
%Backlog-endingNew units

$
1,779.6






$
1,104.4






$
675.2



61.1
%Aftermarket parts and services


342.7







276.2







66.5



24.1
%Total backlog

$
2,122.3






$
1,380.6






$
741.7



53.7
%   New
    Units
  Revenues.
 22




---



##### 



Gross profit.
  Operating income.
  Bookings and Backlog.
  Aftermarket
    Parts and Services
  Revenues.
  Gross profit.
  Operating income.
  Bookings and Backlog.
  Liquidity
    and Capital Resources
  work-in-process.
   23




---



##### 



New
    accounting standards
  Fair Value Measurements.
    Level 1

Unadjusted quoted prices in active markets for identical assets
    or liabilitiesLevel 2

Unadjusted quoted prices in active markets for similar assets or
    liabilities, orUnadjusted quoted prices for identical or similar asset or
    liabilities in markets that are not active, orInputs other than quoted prices that are observable for the
    asset or liabilityLevel 3

Unobservable inputs for the asset or liability     Foreign currency exchange contracts assets

$
4.2Foreign currency exchange contracts liabilities

$
3.1     No. 157-2, Partial Deferral of the Effective Date of Statement
    No. 157 No. 157-2
  Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans, an
    amendment of FASB Statements No. 87, 88, 106 and 132(R),
  Disclosures about Derivative Instruments and Hedging
    Activities, an amendment of FASB Statement No. 133
 24




---



##### 



SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  form 10-Q Form 10-Q,
  
    economic or industry downturns;
    our inability to implement our business strategy to increase our
    Aftermarket Parts and Services revenue;
    competition in our markets;
    failure to complete or achieve the expected benefits from any
    future acquisitions;
    economic, political, currency and other risks associated with
    our international sales and operations;
    loss of our senior management;
    our brand name may be confused with others;
    environmental compliance costs and liabilities;
    failure to maintain safety performance acceptable to our clients;
    unexpected product claims or regulations;
    infringement on our intellectual property or our infringement on
    others intellectual property; 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, 2007.  ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK ($ in
    millions)  non-U.S. subsidiaries
   25




---



##### 



ITEM 4.
    CONTROLS
    AND PROCEDURES  Rules 13a-15(e)
    PART II. 
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS      ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  Issuer
    Purchases of Equity Securities
    ApproximateDollar Valueof SharesTotal Number


That May Yetof Shares


Be PurchasedTotal Number


Average Price


Purchased as Part of


Under theof Shares


Paid per


Publicly Announced Plans


Plans orPeriod

Purchased


Share


or Programs


ProgramsJanuary 2008














February 2008


24,637
(1)

$
34.52







March 2008














Total


24,637











     (1)
    
    These shares were delivered to us as payment of withholding
    taxes due on the vesting of restricted stock issued under our
    2005 Stock Incentive Plan.  ITEM 5.
    OTHER
    EVENTS   26




---



##### 



ITEM 6.
    EXHIBITS    Exhibit 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 on July 18, 2005, File
    No. 333-124963).Exhibit 3.2

Amended and Restated Bylaws (incorporated by reference to
    Exhibit 3.2 to Dresser-Rand Group Inc.s Registration
    Statement on
    Form S-1/A
    filed on July 18, 2005, File
    No. 333-124963).Exhibit 10.1

Amended and Restated Credit Agreement, dated as of
    August 30, 2007, among Dresser-Rand Group Inc., certain of
    its foreign subsidiaries, the syndicate of lenders party
    thereto, Citicorp North America, Inc., as Administrative Agent,
    J.P. Morgan Securities Inc. and UBS Securities LLC, as
    Co-Syndication Agents, Citigroup Global Markets Inc.,
    J.P. Morgan Securities Inc. and UBS Securities LLC, as
    Joint Lead Arrangers and Joint Book Managers, and Natixis and
    Wells Fargo Bank, N.A., as Co-Documentation Agents (incorporated
    by reference to Exhibit 10.1 to Dresser-Rand Group
    Inc.s Current Report on
    Form 8-K,
    filed on August 31, 2007, File
    No. 001-32586.)Exhibit 10.2

Amendment No. 1, dated April 24, 2008, to the Amended
    and Restated Credit Agreement, dated as of August 30, 2007.Exhibit 10.3

Letter Agreement with Lonnie A. Arnett.Exhibit 31.1

Certification of the President and Chief Executive Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31.2

Certification of the Executive Vice President and Chief
    Financial Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.Exhibit 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.)Exhibit 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.)  27




---



##### 



SIGNATURES    DRESSER-RAND GROUP INC.
  
       28