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Calyon Energy Forum 2009

Calyon Energy Forum 2009. May 13, 2009. Forward-Looking Statements.

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Calyon Energy Forum 2009

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  1. Calyon Energy Forum 2009 May 13, 2009

  2. Forward-Looking Statements Some of the things we will discuss today relative to our views on future company performance and results, and other statements not dealing with historical facts, will be forward-looking statements within the meaning of U.S. securities laws. The company cautions that actual results may differ materially from those discussed in these forward-looking statements. You should refer to the additional information contained in our filings with the SEC about the risks and uncertainties that could cause actual results to be different than those contemplated in this discussion. The company’s SEC filings can be viewed at www.bakerhughes.com. Reconciliation of non GAAP measures referenced in today’s presentation can be found on our website www.bakerhughes.com in the Investor Relations section.

  3. First Quarter Results • North America • $1.08 B • Revenue down 8% y/y, down 23% seq • Operating profit margin – 12.1% • Adj. operating profit margin1 - 15.6% 1 Excluding severance costs and allowance for doubtful accounts

  4. This US Cycle Compared to Past Cycles • weeks from peak Rigs Lost 1986 weeks from peak 2008-2009 2001-2002 1987-1989 1990-1992 1997-1999 % Loss f/ Peak *Updated 5/8/09 4 Rigs

  5. US Rig Count 2007 to Date* -54.0% from 9/12-57.0% from 442 on 11/7 -54.5% from 1606 on 9/12 -54.3% from 2031 on 9/12 -58.8% from 9/12-59.4% from 404 on 9/19 -61.4% from 9/12-62.2% from 1017 on 8/29 -40.4% from 9/12-41.5% from 650 on 10/31 *Updated 5/8/09 5 Rigs

  6. US Natural Gas Inventory and LNG 1,919 Bcf in storage34% above last year’s 1,436 Bcf Source: Bloomberg, EIA (DOE), Waterbourne LNG Report 6 Macroeconomics – Gas

  7. First Quarter Results • North America • $1.08 B • Revenue down 8% y/y, down 23% seq • Operating profit margin – 12.1% • Adj. operating profit margin1 - 15.6% • Latin America Revenue • $288 MM • Revenue up 23% y/y, down 15% seq • Operating profit margin 8.8% • Adj. operating profit margin1 – 15.1% • Europe / Africa / Russia & Caspian • $776 MM • Revenue up 2% y/y, down 8% seq • Operating profit margin – 19.4% • Adj. operating profit margin1 – 21.9% • Middle East / Asia Pacific • $521 MM • Revenue up 5% y/y, down 12% seq • Operating profit margin – 14.0% • Adj. operating profit margin1 – 15.2% 1 Excluding severance costs and allowance for doubtful accounts

  8. This Int’l Cycle Compared to Past Cycles months from peak 2008-2009 Rigs Lost 1990-1992 1997-1999 months from peak % Loss from Peak Source: Baker Hughes – May 2009 8 Rigs

  9. Exiting the Downturn A Stronger Company • Reducing the size of our workforce • $250 million annual savings • Achieve run-rate by Q309 • Efficiencies in Shared services organizations • $50 million in 2010 • Closed and Consolidate Facilities • Strengthened Balance Sheet • Added Key Executives • Supply Chain • Information Technology • Reliability • Geographic Organization

  10. Regions and Geomarkets Stavanger Moscow Aberdeen Calgary London Paris Milan Almaty Beijing Algiers Cairo Dhahran Houston Tripoli Dubai Mexico City Mumbai Caracas Lagos Bogota Kuala Lumpur Jakarta Luanda Rio de Janeiro Cape Town Perth Buenos Aires

  11. New Organization Chad Deaton Chairman, President & CEO Peter Ragauss Sr. VP & CFO Didier Charreton VP, HR Martin Craighead Sr VP & COO Alan Crain VP, General Counsel Russ Cancilla VP, HSE&S Andy O’Donnell,President Western Hemisphere BelgacemChiraig President, Eastern Hemisphere Derek MathiesonPresidentProducts and Technology Nathan Meehan VP ReservoirTechnology Clif TripletVP InformationTechnology Art SoucyVP Supply Chain

  12. Technology Spend BHI R&E Spend ($ Mlns) BHI Capex and DD&A ($ Mlns) Source: BHI, Public Filings

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