(Operator Instructions) Welcome everyone to the Baker Hughes Second Quarter Earnings Conference Call. I would now like to turn the call over to Gary Flaharty, Director of Investor Relations.

Welcome to the Baker Hughes second quarter 2009 earnings conference call. With me here this morning are Peter Ragauss, Baker Hughes’ Senior Vice President and Chief Financial Officer, Martin Craighead, Senior Vice President and Chief Operating Officer, and Chad Deaton, Baker Hughes’ Chief Executive Officer and Chairman. Following management’s comments we’ll open the lines for your questions. Reconciliation of operating profits and non-GAAP measures to GAAP results for historic periods can be found on our website at www.BakerHughes.com in the investor relations section under financial information. Finally, I caution you that any company outlooks discussed this morning are subject to various risk factors. We’ll try to highlight these risk factors as we make these forward looking statements. However, the format of the call does prevent a more thorough discussion of the risk factors. For a full discussion please refer to our annual report 10-K, 10-Q, and in particular the forward looking disclosure in this morning’s news release. With that, I’ll conclude our discussion of the administrative details and turn the call over to Peter Ragauss.

This morning we reported net income on a US GAAP basis of $87 million or $0.28 per share. This compares to $1.23 per share a year ago and $0.63 per share for the first quarter 2009. Q2 revenue was $2.34 billion down 22% or $662 million compared to the second quarter of 2008 and down 12% or $332 million from last quarter. North American revenue was $794 million in the second quarter down 38% year over year and down 27% sequentially. Revenue outside of North America was $1.5 billion in the second quarter down 10% year on year and down 3% sequentially. Oil field operating margin for the second quarter was 10% down from 23% in the year ago quarter and down from 14% in Q1. Severance and reorganization costs in the second quarter were $16 million and we increased our allowance for doubtful account by $38 million in the quarter for a total of $54 million or $0.13 per share. Excluding the impact for these charges our second quarter oil field operating margin would have been around 13%. Turning to the performance of our two segments, Drilling and Evaluation revenue was $1.1 billion in Q2 down 27% year over year and down 14% sequentially. The Drilling and Evaluation segment’s operating margin was 7% in Q2 down from 24% in the year ago quarter and down from 12% in Q1. Adjusting for severance and reorganization costs and the increase in allowance for doubtful accounts, the operating margin would have been around 9%. Revenue for our Completion and Production segment was $1.2 billion down 17% from the year ago quarter and down 11% sequentially. C&P operating margin in Q2 was 14% down from 22% in the second quarter 2008 and down from 17% in Q1. Again, adjusting for severance and reorganization…

I’m going to begin with North America which continues to be the most challenging region. The US land rig count was down 30% sequentially, exceeding the 27% sequential drop from Q4 2008. The US offshore rig count weakened in the second quarter 2009 and was the lowest since the second quarter 1992. In this challenging market, US revenues were down 39% year on year compared to a rig count that was down 50% and down 26% sequentially compared to a rig count that was down 30%. It was a similar story in Canada where revenue was down 24% year on year compared to a 46% decrease in the rig activity. The spring break up was especially difficult in Canada with the Q2 rig count also the lowest since the spring of 1992. Revenue decreased 34% sequentially compared to a 73% decline in rig count. Operating profit was only slightly positive in the second quarter of 2009 for North America. In comparison, our operating profit margin was 26% in the second quarter of ’08 and 12% in the prior quarter. Adjusting for severance and reorganization costs and the increase in allowance for doubtful accounts the operating margin for North America was 2% in the second quarter. With activity cut in half there is ample capacity in the market and customers have taken advantage of the situation to push prices lower. In response to the lower activity and incremental pricing pressure we took additional steps in the quarter to reduce our operating costs to improve the profitability of our North American operations going forward. We made incremental reductions of our workforce and implemented other programs to reduce our labor costs. As we previously disclosed, the severance we took in the first quarter was expected to benefit us in the third and fourth…

On our last call we forecast that the North America rig count would average about 950 rigs during Q2 and the actual number was 934. Our current view of the future remains much like we called it in the April conference call. First, we feel that the ongoing success in the Hainesville and Marcellus shale highlights how the recent technology advancements in horizontal drilling and completions are leading to a future with fewer rigs which are able to access the formation more efficiently. Second, the economic activity and industrial demand remained weak. There’s still ample gas supply to keep North America drilling activity contained for the near term. While the LNG overhand is still there, the impact to date has been less then we actually anticipated it would be back in April. The slower pace of capacity additions and new re-gasification capacity is helping the North America market avoid a more serious disruption. At the time we predicted that the rig count would bottom at the end of Q2 or early Q3 for US land we saw it bottom, or at least we hope it bottomed in early June. It has slowly improved since. Canada obviously reached bottom during the Q2 breakup and will improve in Q3 and Q4 that at levels much less then what we’ve seen in previous years. Forecasting future rig activity is clearly difficult in today’s environment but our latest projection show an average 2009 rig count of 1,026 compared to an average of 1,879 rigs in 2008, that’s a 45% drop in average rig count from ’08 to full year ’09. Stepping out on a limb a little bit looking out, still a ways away but our early forecast for 2010 is for an increase of about 9% to 1,120 plus or minus. We’re believing…

At this point I’ll ask the operator to open the lines for your questions. To give everyone a fair chance to ask a question we do ask that you limit yourself to a single question and a related follow up question. Could we have the first question please?

(Operator Instructions) Your first question comes from Jim Crandell – Barclays Jim Crandell – Barclays : Overall do you believe you’ve seen the bottom on a quarterly basis in international revenue? Secondly, what is the general magnitude of weakness you might expect in international profit margins in coming quarters?

We don’t think we’ve seen the bottom yet on international revenue. We’re hoping that occurs in Q3 maybe into Q4. We’re expecting that international margins backing out anything for doubtful accounts etc. we’re probably looking at somewhere in the 350 basis points ongoing deterioration. Jim Crandell – Barclays : That would be true in probably all geomarkets or all major regions?

Yes, I think we’ve got a little bit more opportunity in the Latin America market due to obviously Brazil and Mexico now we’re pretty well established on these Alma projects. We do have some startup costs that are taking place as we move on to these land projects that Martin referred to on these 450 wells. For the most part I think the other two regions will take the brunt of some of the margin deterioration. Jim Crandell – Barclays : You’ve had some nice product line wins that you talked about on your call. To what extent over the last three months have you also won contracts on bundled services or IPM basis and is there any sort of change in your willingness or aggressiveness in trying to beat that part of your business?

I think we had as many wins this quarter as we talked about last quarter. We’ve had this discussion before whether where do you switch over from bundled services to IPM. Again IPM to me is where you manage the entire project from picking locations to cleaning locations to managing the rig, the whole works. Again, we find that in certain places of the world, clearly Mexico, a little bit in a couple other countries in Latin America, to some degree Russia, Algeria. What we’re seeing is a lot more bundling of our services where we’re winning three, four, five product lines not necessarily managed locations. This latest three wins that Martin talked about in Latin America clearly we’re acting as a sub-contractor to three independent so-called IPM Mexican companies. We don’t take the risk but we get to do what we do very well and that’s provide our services and technology to them. If we could do more of that, that’s a preferred model for us. Jim Crandell – Barclays : Could you comment on what happened in Mexico on the first Burgos contract, I understand at least your partner was low bidder and that you were bypassed there. Also, I’m sure you are happy being a big component supplier to the independent companies that contempact but weren’t you low bidder on ATG5 and why do you think that you were bypassed there.

Are you talking about Burgos or ATG because you started off… Jim Crandell – Barclays : I started with Burgos and my impression was your partner there who would do the rig and civil engineering work was low bidder on that but was bypassed. The second question was ATG5 my recollection was you were also low bidder on that one as well.

Burgos we didn’t go after Burgos. When we looked at Burgos it’s about a $550 million project. Our services for that project would have been about $55 million so the other $400 million and whatever else would have been third party services from bulldozers to who knows what. We just didn’t think that looked that attractive. We did go after ATG5, we were low bidder. Through the process we ended up getting disqualified from that for technical reasons. Then after it was re-awarded they went ahead and awarded four projects of about 180 plus or minus wells a piece to these four Mexican contractors. Those are the three of the four that they contacted us and said would you provide services on those. You’re right; we’re pretty pleased with that. It allows us to continue to build out on land and again not necessarily take all the risk on drilling rigs etc. Jim Crandell – Barclays : Is there an easy explanation on why you could be disqualified for technical reasons and then they give it to local competitors?

No, I don’t know the answer to that.

Your next question comes from Dan Pickering - Tudor, Pickering, Holt

As we look at the North American business, revenues there stronger then we thought, profits weaker. Help us with from this 2% margin level what’s the Canada bounce back, what’s the reasonable expectation for those margins in Q3, Q4?

If you look first at Q2 D&E suffered terribly like everybody’s D&E. C&P held up better although on the completion side that’s kind of a mix between the drilling side as well as completion. If you look going forward on Q2, we said in the press release, that we felt that Q2 would be the bottom for us in North America profitability. We’re not saying that Q3 is going to turn around and be tremendously bright by any means. We see that with Canada coming back a little bit, I think it got down as low as an average of 80 rigs in the quarter and we’re seeing somewhere around 200 plus or minus in Q3. That’s obviously going to help. We have our cost structure in Canada in pretty decent shape because Canada has been down a while so we’ve been able to take costs out this and there. We should see the benefit in North America beginning in US Q3 from the severance that we took in Q1 and Q2 so that should benefit on land and offshore during the quarter so that’s why we’re saying we think we’ll see a little bounce back possible and we also feel now that for the most part the pricing has been worked through we’re not seeing pricing pressure, a lot of pricing pressure right now its terrible but its there and we can now adjust to it.

Q3 won’t be bright but we’re coming off of a pretty rough Q2. I’m groping for some magnitude here just because Q2 was a surprise. Does better mean 200 or 300 basis points better or 500 or 600 basis points better or you just don’t want to say because there are too many moving parts.

I’d prefer not to say. There’s still a lot of moving parts. We’re drawing a line in the sand and saying Q2 is the bottom that’s what we’re telling our people, so we’ll improve on it.

Corporate expenses could you talk about that increase was this geomarket expense or what should we expect from those corporate expenses as we move through the back part of the year?

We did have some one time benefits in Q1 that aren’t going to repeat so that’s part of the delta. One of the things that Chad mentioned last conference call was that next year we expect shared services savings, the number quoted was $50 million and a lot of that’s the finance group, some of its other corporate functions. That is taking some investment and that’s actually ramping up. It ramped up in Q2 and its ramping up in Q3 and Q4. We’re installing our enterprise wide accounting system in places in basically every country and that’s taking some time but once we’re done with that, that’s actually going to take, its not going to be finished in 2009 but it will continue. That’s a big part of the charges going on. We expect to see some savings coming through in 2010. The other is some of these reorg costs Chad mentioned they’re going to be increasing in Q3. The bulk of them are going to be in Q3 and a chunk of those will probably come through the corporate line.

So the $86 million number is going to hold and maybe go up a little bit in Q3 and Q4?

I hope it’s a little bit less but I would say closer to the Q2 run rate then the Q1 for sure.

Your next question comes from Geoff Kieburtz – Weeden Geoff Kieburtz – Weeden: On the international margins, over what kind of time period do you think that this 350 basis point margin erosion is likely to play out?

I think the next two to three quarters. Geoff Kieburtz – Weeden: You see the bottom some time in the first half of 2010?

Yes. Geoff Kieburtz – Weeden: Is that dependent on oil prices being strong enough to stimulate increased international spending next year?

Yes, I think if we exit this year, oil prices hold in there this $70 range, I think the customers are getting comfortable with that, there will be some increase in activity going forward. There might be some projects that are dropped. If we see oil price fall back in the $50’s or low $60’s then I think we’re just going to have a longer ride through 2010. If we can be in the $70 range there seems to be a little more optimism out there with our clients to move forward with their projects. Geoff Kieburtz – Weeden: I don’t want to be belligerent but when we hear you talking about the reorganization it does appear on the surface that Baker Hughes is doing some things that many of your competitors have already put in place in some cases a number of years ago. If there are such substantial benefits to this change and reorganization are you not in a position of having to catch up and if you are, how do you that? How do you catch up having for various reasons not been able to implement this reorganization earlier?

We have been building towards this for quite some time. We didn’t have an epiphany on April 1st and said let’s reorganize. We moved towards it about three years ago, two and a half years ago when we first created the super regions. We’ve been staffing those, we moved towards it in Russia, Saudi and Brazil. We’ve pretty much been running along that line for the last couple of years. It was clearly not possible to do a couple years ago, two and a half years ago when we first entered in the DPA to go ahead and move several hundred people all around the world. About the time we just entered into that would have been chaos, probably suicide. Then I think the other one is we’ve been aggressively bringing people and developing people with all cultures of the company. When you look at it today whereas three years ago out of the top 20 executives in the company they were all American or British. Today nine out of our top 20 are multi-cultural so therefore we’ve got Latinos running Latin America, Middle Easterners running Middle East, Russian running Russia. We wanted to pull the trigger on this when we thought we were ready to pull it. I don’t think we have a long catch up period to go because most of its in place. We’ve been building out facilities in key areas which we didn’t have so now it’s just a matter of shifting these people with the shock collars out of here and putting them in these. I’ll tell you the response that I receive from our clients at high levels for big NOCs as well as the IOCs they’re ready for it and they’re excited about it. I think we could see some good things happen over the next year.

Your next question comes from Waqar Syed – Tristone Capital Waqar Syed – Tristone Capital: As you look at your prior portfolio any missing pieces there and do you think this is time now for consolidation and do you see any opportunities in the marketplace?

We get that question every call. Yes, we’re constantly looking for any gaps in our portfolio. We continue to fill a gap that we had that we started on last year and we wanted to build out the reservoir capability. Last year we bought GMI and GCA this year we just bought Helix and Epic just this quarter. That builds us up to about 350 reservoir consultants and professionals, geophysicists, etc. We’ll continue to look for companies like that that could fit into our portfolio. Then we look at just the white spaces and gaps we have. As Peter said, we have a very strong balance sheet; we’re in great shape from that standpoint. We think there’s going to be opportunities come up over the next few quarters, especially if this thing just kind of stays flat for a while. Yes, we will be looking and seeing what’s out there and if we see something we like we’ll move on it. Waqar Syed – Tristone Capital: One of the ideas that has been talked about has been pressure pumping, do you still feel more about getting exposure on the international side or you feel that even gaining exposure in North America may not be a bad idea at this point?

I haven’t changed in my thinking for the last three years or since I’ve come in here four years ago. Pressure pumping could fit into a Baker Hughes product line situation very nicely, domestically as well as internationally. We said that same thing regarding certain other gaps that we think the price are right other type of portfolio fills we would take a look at different things. Yes, I still believe it’s a potential.

Your next question comes from Dan Boyd - Goldman Sachs

You mentioned in the press release that you’re positioning the company to grow market share. If you could just comment on what regions or product lines you’re most excited about from a relative perspective and is it an area where you have the most opportunity where you’re catching up your competitors or is it where you think you’re going to gain share where you’re already strong?

It’s clearly the catch up. I think we just have to look at a couple areas again that we didn’t have much market share. Brazil we were almost non-existent four years ago now we’re a major player. Russia, other than selling a few products, central lift products, ESPs into Russia. Now today we’re offering full services. Saudi Arabia again other then completions we didn’t do much in Saudi four years ago and now we’re one of the largest players there. Mexico is a perfect example again where we didn’t do much. These recent wins now put us in pretty good position. We’re targeting these key countries; West Africa is one where we made some nice investments. I just referred to that. We’re starting to see some wins for some clients that we haven’t worked for in the past. I don’t think it’s any one product line I think it’s a matter of getting the Baker Hughes brand and name which is very good, getting the people and the infrastructure and the position to be able to deliver to the clients. In my comments I mentioned about West Africa and clearly three years ago some of the major IOCs in West Africa when the audited our base and talked about projects there they were very concerned could we handle a $400 or $500 million project, kind of bundled services. With what we’re building there and what we’ve shown them that’s not an issue today. I think that those are the type of low hanging fruit that we’ve been after that we’ll continue to go for.

That’s all geobased, it should be handled by the restructuring, is there anything on the product line specifically where you need to play catch up a little where you think you can gain some share?

I don’t want to target our competition where we think we may want to go I’ll probably dodge that question.

On North America, it sounds like in the US your rig count forecast for next year it isn’t that different from ours. When we look at the fourth quarter number it does sound like the fourth quarter rig count for 2010 with that type of trajectory would be similar to what we just experienced in the first quarter of 2009. When your North American margins adjust it would have been 16%. How should we think about what margins might be with the same level of rig count in the fourth quarter of 2010 relative to where they were in the first quarter of this year, recognizing that obviously pricing is lower but at the same time you have been able to take a lot of cost out of your cost structure.

It’s the way we modeled it, we kind of see a ‘U’ coming from January two years back to the end of December seeing it build back up to about where it is. You’re exactly right, if we see that build towards the end of 2010 we could probably go back and look at things that took place in ’05, ’06 when everything was ramping up steeper then we’re projecting now. Then the cost starts falling, the benefit falls straight to the bottom line because you’ve got the cost out of the system, you’re back in a growth mode again.

The 1,300 rig count in the US is a15% margins in North America out of the question or you think that’s something on a stretch goal could be achievable?

I don’t think they’re out of the question. I’ve often said that at a 1,200, 1,300, 1,400 rig count in the US the service sector can make money. There has to be some thing that take place, you can’t have as much capacity in this business as we have today. We can’t go from 2,200, 2,300 rigs go way down and be back at 1,300 and have the same capacity out there then margins won’t get there. I think there’s going to be the next couple three quarters are probably going to be pretty tough in North America and in the end there’ll be some consolidation and we’ll be back to that point which we’ve seen in so many different cycles. We can make money with 1,300 rigs in the service sector.

Your next question comes from Marshall Adkins – Raymond James Marshall Adkins – Raymond James: You gave a pretty good overview of the reconciliation by region on the severance costs and stuff. Could you give us a little more specifics on the numbers? It appeared that I guess Latin America bore the brunt of those write downs but I was just wondering if we could get a little specifics on the exact magnitude by region of the write downs.

Why don’t I just give you the numbers so you don’t have to use your Ouija board to figure it out. The sum of the total is $54 million so North America give it $12 million, Latin America give it $25 million, EARC give it $12 million and Middle East/Asia/Pacific give it $6 million. Marshall Adkins – Raymond James: Going forward you mentioned that we’re going to have some reorg costs, is that going to be more in corporate and are we going to see or do you expect to see more of the severance going forward or are we pretty much done with all that?

I’ll answer the reorg allocation. Right now our best guess is probably half in corporate and half out in the business because we still have a lot of people moving around, etc. but we also have additional systems adjustments to make. We’ll tell you what it is next quarter. Marshall Adkins – Raymond James: More international obviously for the part that will be embedded in the margins, right?

That’s right.

On the severance, the first quarter was the big hit that we took, significantly down this quarter. I would say Q3 may be similar to Q2 and we definitely want to have it all behind us at the end of next quarter, depending on how the market evolves but it looks like its pretty much behind us. Marshall Adkins – Raymond James: Maybe a little bit more in Q3 but not of the magnitude we saw the last couple quarters?

Not even close, no.

Your next question comes from Robin Shoemaker – Citigroup Robin Shoemaker – Citigroup: I wanted to return to your 9% growth forecast for the US rig count and in that context if we grow by that amount and as you indicated most of the growth is coming in the oil rig count. What scope is there fore pricing improvement from the levels we’ve reached currently across your product lines basically?

If you looked across, split it between segments I think the C&P side has a better chance of getting some price improvement then D&E. I don’t think at that 9% rig count there’s the tremendous opportunity for much overall price increase on either of them. I think the other side of it is if again we grow 9% we still have the same capacity that we have today out there then there’s not going to be any price improvement. Two functions there, one if we some consolidation and some other things in different product lines then that will help get us back perhaps to some reasonable margins and that’s got to come from price and a culmination of costs. Two I would think that the production side has a little better chance of getting some price increase going forward then D&E right now for the next several quarters. Robin Shoemaker – Citigroup: Is it the case then that increase you’re anticipating most of that to come from oil related rig count improvement as has been the case thus far and if that’s the case what does that mean in terms of revenue per rig versus a recovery in gas drilling?

I think the recovery will come in the oil side. What it means revenue per rig I don’t know. I don’t think we have numbers on that exactly to look at. The gas side, which you’re going to see on the gas side on the recovery is these are going to be horizontal wells not vertical wells so our type of services are going to be much better because these are more technically challenging wells. If we get into some like on the oil if you look up in the Balkan areas where we’re now starting to see multi-lateral wells and that’s very good for the completion side of the business because these well bores requires a lot more jewelry and it’s a lot more complicated. As we get into longer extended reach wells or perhaps some lateral, multi-lateral type wells that will benefit Baker Hughes.

Your next question comes from Brad Handler – Credit Suisse Brad Handler – Credit Suisse: On the allowances for doubtful accounts it seems as thought that was a pretty big number larger then what I think we’ve seen out of peers although we may not get a clear read out of your peers. Maybe you could speak to that a little more, how concentrated is that, it sounds like maybe in Latin America but are we talking about just a small handful or are we talking about a number of clients, a more pretty broad based conservatism here, can you just give us more on that please.

About half of it is with one client, the other half is spread throughout the globe. To answer your question, you’re seeing different people take different approaches. We’ve seen a lot of the drillers actually taking write downs and pretty aggressive allowances for doubtful accounts. I think some of our peers haven’t shown anything yet, we’re probably in the middle of the road between what’s happening in the oil service and we’re basically following our internal rules, if you will, for taking these and we’re reserving to where we think we have an adequate reserve. Brad Handler – Credit Suisse: Your comments in the press release as it related to regions in the quarter sort of revenue declines, are we supposed to infer that there’s already pricing. If you’re saying revenue versus activity is the inference that there’s already some pricing degradation and if you maybe you can give us some flavor on the international side in Q2 already.

The pricing degradation will come more in Q3, Q4 simply because for Q1 and Q2 we were in the midst of renegotiating, especially the IOCs a lot of projects around the globe. Some of those were not finally negotiated and finished until end Q2 so you had a partial effect of that in Q2. Now you’ll see it in Q3 and Q4 and on Q1 next year. There will be other contracts that roll over and depending on what the activity level and what’s happening in the competition side as those roll over then those will be up for negotiation as well. We have not, I guess kind of a reference point, and we think that the actually pricing negotiations pretty much come to a stop, we’re not seeing the pressure that we saw Q1, Q2, most of those are done and so we know the numbers to move forward with. I don’t know if that helps your question or not. Brad Handler – Credit Suisse: If I could just come back to it, if we think maybe about the Eastern Hemisphere is it possible to generalize and say the pricing is down 1%, 2%, 5% or more for that matter just again with references to revenue I’m assuming that there is some pricing degradation I’m just trying to get a flavor for how much has happened so far.

I don’t have a number to try to say the whole hemisphere. We look at these things country by country and contract by contract. Martin do you have a total number for hemisphere?

I don’t. To follow up on what Chad said it’s also product line by product line. Some of these have been probably more severe then we would have anticipated but that’s mixed into some that are still benefiting from negotiations a year ago or 18 months ago. It really just depends on how they all play out timing wise and the product line in particular. Brad Handler – Credit Suisse: I understand we’re dealing with so many different countries and such, as you say by product line can you make some generalizations about some products in the Eastern Hemisphere seeing pricing degradation already versus others is there some consistency there by product?

What we’ve seen is that perhaps a couple of the product lines that are most hardly hit in North America and the assets are fungible are the ones that are the first to become exposed in the Eastern Hemisphere, again its by project. If I had to give you an example I would have to say that there’s a lot of wireline capacity leaving North America and moving east. I think that’s probably the one that is going to be maybe the last to come out.

I think it’s safe to say the D&E, drilling and evaluation side will feel it more then the C&P side. Brad Handler – Credit Suisse: As you say it’s in part because North American capacity is fungible and so it’s becoming available in other markets?

Correct.

Your next question comes from Rob MacKenzie – FBR Capital Markets Rob MacKenzie – FBR Capital Markets: Obviously it’s too soon to see results from this now but when should we start to expect seeing positive results from the reorganization? Where is that most likely to take place first and what kind of magnitude of share gains do you think you can achieve and in what kind of timeframe?

I think you’ll expect to see benefits clearly in Q1 2010 both from a revenue standpoint as well as a cost standpoint. Perhaps even some in Q4 but Q2 and Q3 will have a lot of costs. We do have some overlapping responsibilities obviously as we hand off one to the other and some inefficiencies that we’ll be taking care of. Peter talked about on the financial side getting that in place which is costing us clearly this year which will be much better position come January 1 to handle. I think where you’ll see some of the real benefits to come through this is in Far East, I think Asia. We’re very happy with the team we’ve got out there, they’re in place. I think we’ve got some real opportunity to grow in Asia. I think Middle East not necessarily Saudi but perhaps Egypt and some of the Oman, some of these areas as they come back I think will benefit us with this new organization. West Africa I think is the next big one with the new facilities and the organization and just being closer to the client you’ll see it there. In terms of actual percentage of market share gains that we’re going to have I’m not going to try and go out on a limb and predict that but I feel very comfortable that this will just put us in a much better position to make decisions faster then what we’ve had to go through with most of the management team sitting back in Houston. Now the management team is much closer and will move forward with it, be held accountable for it. I think that will help in the area of profitability. Rob MacKenzie – FBR Capital Markets: How long do you expect to be able to, if there is say low hanging fruit, how long from say later this year, early next year, do you think you get to harvest most of that incremental benefit?

I don’t know an answer for that one. I can’t tell you.

Your last question comes from Jim Crandell – Barclays Jim Crandell – Barclays : You’ve seen a lot of international cycles do you think that the price degradation you’re seeing in the international, particularly the Eastern Hemisphere business from the IOCs this cycle is worse then prior cycles particularly give the effect that this is a relatively shallow downturn in the Eastern Hemisphere?

Yes, I’d probably have to say in terms of them, some of them leveraging or putting the pressure on from a global basis. This is probably one of the more challenging, more pressure then what I’ve seen. Part of it I actually think the service sector tends to be more bundled or IO, integrated operations, we talked earlier so they tend to use that leverage to bring in all product lines. In the past it was pretty much individual services they negotiated each one now they’re negotiating with companies on large packages. There’s no doubt that the pricing I think this time is more severe internationally then, more pressure then in the past. They didn’t necessarily get all the pricing that’s talked about in Q1 and early Q2 those were negotiated. Still they got their house of blood. Jim Crandell – Barclays : I believe you established the base in Iraq; could you give me your perspective on how you expect business to evolve there both from the IOCs and the NOCs and how you think Baker Hughes is positioned?

We like our position. We are and have been selling product and material into Iraq. We’ve not taken on service contracts yet. We are, as you said, establishing a base; we will be up and operational by the year end, as kind of on speculation because we see a lot of potential activity there. We are in discussion with every IOC including national companies in Iraq to provide services. These are anywhere from individual type call out bundling usually because logistics issues there all the way through to some managing some projects. I think Iraq has a lot of potential I just think its going to take a while to see it happen. I wouldn’t expect next year we’re talking that Iraq being one of our biggest customers or areas. Although I think it will grow as time goes on.

One final reminder before we close, hopefully by now all of you have received an invitation to our 2009 analyst conference which will be held in Celle, Germany on September 16, 17. The conference will include presentations from our senior management team as well as a tour of our newly expanded technology center in Celle. We think it will be an enjoyable and an informative event. If you wish to attend and have not received details on the conference please call Haley VanMannen in our office at 713-439-8742. At this point I’ll thank Chad, Peter and everyone, all of our participants this morning for your time and your thoughtful questions. Following the conclusion of today’s call both Jean and I will be available to answer any additional questions that you have. Once again, thank you for your participation.

Thank you for participating in today’s Baker Hughes Inc. Conference Call. (Operator Instructions) You may now disconnect.