Good morning, my name is Christy and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Baker Hughes Second Quarter 2008 Conference Call. (Operator Instructions). I will now turn the conference over to Mr. Gary Flaharty, Director of Investor Relations. Sir, you may proceed.

Alright, thank you Christy and good morning, everyone. Welcome to the Baker Hughes Second Quarter 2008 Earnings Conference Call. Here with me this morning are Chad Deaton, Baker Hughes’ Chief Executive Officer and Chairman, President. And Peter Ragauss, Baker Hughes’ Senior Vice President and Chief Financial Officer. Following management’s comments, we will open the lines for your question. 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. I also caution you that any company outlooks discussed this morning are subject to various risk factors. We will 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 of these risk factors, please refer to our annual report 10-K, 10-Q, in particular the forward-looking disclosure in this morning’s news release. With that, I will conclude our discussion to the administrative details and turn the call over to Peter Ragauss, Peter.

Thanks, Gary. Good morning and welcome to the Baker Hughes second quarter 2008 earnings conference call. This morning, we recorded net income on a U.S. GAAP basis for the second quarter of 2008 of $379 million or $1.23 per share. This compares to a $1.09 a year ago and $1.27 per share the last quarter. Net income for the second quarter includes a charge of $62 million before tax, $40 million after tax or about $.13 per share. The charges for the settlement of the litigation with Reid we previously announced in May. It covers a $70 million in royalties we paid netted against $8 million in royalties we received for prior use of certain technologies. Net income for the first quarter of 2008 included a $.06 gain from the sale of a product line. Unless noted otherwise, we will exclude this quarter’s charge and last quarter’s gain from our discussion this morning. So excluding these two items from their respective quarters, earnings per share for this quarter were $1.36, up $.15 from last quarter’s $1.21 and up $.27 from last year’s $1.09. This equates to a 25% earnings per share increase over last year. Q2 revenue is $3 billion. This is up $460 million or an 18% improvement from the second quarter of 2007 and $327 million or a 12% improvement from last quarter. North American revenue is up 20% compared to the year-ago quarter and up 9% compared to the prior quarter. U.S. land is the big story for North America where our directional drilling, oil field chemicals and completion products led a robust quarter. We also saw activity rebound in the Gulf of Mexico. Together, these two markets more than offset a very typical Q2 in Canada. Total non-North American revenue was up 17% year-on-year and up…

Alright, thanks, Peter. Q2 was a very good quarter for Baker Hughes. As Peter mentioned, our revenues increased 18% year-on-year and 12% sequentially. Activity in the international markets remains strong and supported a 17% year-over-year revenue increase and a 15% sequential revenue increase. Taking a look at our regional performance, in North America, revenue was up 20%, compared to the year-ago quarter and it was up 9% sequentially. U.S. land revenue was up 24% year-on-year on a 7% increase in the rate count and was up 15% percent sequentially in a 5% increase in rig activity. This strong U.S. land activity served to offset the impact of the expected seasonal decline in Canada in Q2. Part of what is driving the significant revenue increase relative to rig count is a favorable mix resulting in the increase in horizontal drilling. This especially benefits our D and E segment with increased demand for conventional drilling, directional drilling and our recently introduced AutoTrak Express. Our AutoTrak Express was introduced earlier this year into the U. S. land market and is growing in customer acceptance. A tool, it is a fit-for purpose version of our pioneering AutoTrak tool that allows the operator to use a single bottom-hole assembly for the vertical build and horizontal section. The AutoTrak Express tool includes all the directional drilling capability required for land-based applications without the extra features required for more challenging application. It is priced between rotary steerables and conventional drilling. Within the Completion’s product line in North America in our C and P segment, increasing deployment of vapor oil tools FracPoint completions technology and unconventional gas place and a strong quarter for sales of artificial lifts, drove the sequential and year-on-year revenue improvement. As for U.S. offshore, revenue is up 10% year-on-year compared to a 13% decline…

Alright, thank you, Chad. At this point, I will ask Christy to open the lines for your question. As is our usual practice, to give everyone a fair chance to ask a question, we ask that you limit yourself to a single question and a related follow-up question. Christy, could we have the first question please.

Yes, sir. Your first question comes from the line of Bill Herbert of Simmons and Company.

Good morning, Bill. Bill Herbert - Simmons & Company: Hey, thanks. Good morning, guys. Chad, on the Pemex contract, that is being split with B.J., right?

That is correct. They have the fluids and cementing. Bill Herbert - Simmons & Company: Right, so is it 50-50?

No, it is about 65%, 70% for Baker Hughes and the balance for B.J. Bill Herbert - Simmons & Company: Okay, great and then with regard to the timing of the rig ramp, by when do you get to the 15th rig?

Well, there are 15 wells -- Bill Herbert - Simmons & Company: I mean 15 wells.

Seven -- Bill Herbert - Simmons & Company: Yes, sorry.

Seven rigs and they will just ramp up. We should be in the early -- the end of the third quarter, early fourth quarter, we will begin to start on the first rig and it will just ramp up from there. Bill Herbert - Simmons & Company: Okay and do you have handy what the magnitude of expected start-up costs are for all of these Latin American projects?

We are probably looking at about $10 to $12 million a quarter. Bill Herbert - Simmons & Company: For the next two quarters?

Correct. Bill Herbert - Simmons & Company: Okay and then that should tail off, right?

Yes. Bill Herbert - Simmons & Company: Okay.

You, know you can look at it just like the Brazil startup when all that started up and for the directional drilling side and it took several quarters to work through that. That was a much bigger start-up, though. Bill Herbert - Simmons & Company: Okay and then the last one for me is just a question for Peter. I think I heard you say, Peter that margins for Q3 flat with Q2, and I am just curious with a recovering Canada, the offsetting negatives are these -- is the ramp in Latin America in terms of cost or what?

That and we are also investing , you will have noticed in the press release we are ramping up our hiring of people. Bill Herbert - Simmons & Company: Yes, yes.

And also we mentioned the corporate expenses will be up a little bit. Bill Herbert - Simmons & Company: Okay, great. Thanks very much, guys.

Your next question comes from the line of James Crandell of Lehman Brothers.

Good morning, everybody.

Good morning, Jim.

Good morning, Jim.

Chad, congratulations on the good earnings and those big contract wins.

Thank you.

Chad, as you look at international growth over the remainder this year, but particularly in ’09, do you see it accelerating on a year-to-year basis versus what you have highlighted for 2008?

Well, yes I do, Jim. I think we will probably exit this year in the high teens year-on-year international growth and we think that will carry on over. I think we got the opportunities for pricing improvement in next year, which will add to some of that growth, so yes I think we are accelerating. The other thing is we have, over these last two or three quarters, we have learned, especially on the international, regarding on some of these tendering packages regarding our compliance program and working with the monitors. So I think we have learned a lot on how to tender these and how to handle them and what to go after. So, I think we are just in a much better position these last quarter or two than where we were three or four quarters ago of understanding what we needed to do.

Do you think it is too optimistic, Chad, to look at all the deep water rigs coming on, look at your contract wins in Brazil and Mexico and think that you could have international growth in 2009 that could be 20% or better?

I do not think that is unreasonable, I mean, a lot of it depends on the start-up of these, Jim, and what else we will win in the meantime, these next six months. Like I said, there are $11 billion worth of tenders sitting out there. Some of them have been tendered, some of them have not yet and so how those roll in and we will get much more clarity on that, obviously over the next few months.

Okay and just as a follow-up, can you comment, perhaps, in a little bit more detail in the U.S. market on your prospects for getting real price improvement over the cost increases your are experiencing for your different product lines.

Yes, well let us take a few of the areas, there. Artificial Lift is already getting some good pricing above the cost, so they had a very good quarter and a lot of that was through price and I think that will continue. We are seeing price improvement or getting price in the drilling side, mainly for labor right now, but with the demand that seems to continue to be called on us right now, especially on the horizontal side. I think as the year goes on, we will see some benefit there on price. Petrolife, the chemical side has had significant price increase this last quarter and in the first quarter. The problem is they have also had significant raw material, hydrocarbon-based material costs that have just gone out of sight. We have been able to keep up with that in Q3, Q4. We will continue to raise prices and hopefully, we can outrun that. Completions, for certain part of the completions business, North America we have seen some improvement in price and I think the second half can be better in that area as well. And then bits will be kind of regional, depending on where in North America, some areas will be still competitive, others I think we have some room there for some price.

Okay. Thank you.

You bet.

Your next question comes from the line of Kurt Hallead of Royal Bank.

Hey, good morning

Good morning, Kirk

Good morning

Great, I just wanted to get a general sense about a couple of different earnings report coming out before you and some of your competitors were already talking about price points that were 10 to 15% higher in North America and 15% higher out in the international market and I just wanted to see how that kind of jives with your view of the world.

Yes, I heard a 15% price improvement. You know, Kirk, if we could get 15% price improvement weighted average, our margins would jump out of sight. I think everybody’s would. We just do not see 15% price improvement, internationally or domestic happening. I think there is room going forward that we would see price improvement, but I just do not buy those numbers.

Yes, I think those were gross, obviously not net, but nonetheless, okay. Your comment here about modest up tick in the international growth rate for 2006, I am not sure if we heard you correctly about progressing out into next year in looking at a kind of a high teens growth rate, did I understand that correctly?

Yes, that is correct?

Okay and, Chad, what do you think the shift is here, you may have already discussed it a little bit, but is it solely your view on offshore rigs coming into the market or the new projects you are taking on or is there underlying increase in the spending plan?

Well, I think I feel as good about West Africa as I have felt in the last two years when you look at it and you go through our success in Africa in the second quarter. And Nigeria was up strong, Algeria was strong, Libya was up very strong, Angola, you know, there is a big tender there we are anxiously waiting for that would make a big difference for whoever gets that. So, I think one of the benefits in ’09 over ’08 is just going to be our West Africa performance. I think Russia will be better in ’09 and we are pretty well positioned in Russia. We have some work to do in the Middle East, you know, with an area where we continue to invest and I think in one sense, it could be a problem, but I look at it as being an opportunity. It is a great opportunity for us, so I think that ’09 will be a year that we could continue to penetrate the Middle East like what we have penetrated Saudi and Oman and Qatar and some of these other countries and continue that ’09 and that is going to benefit us for our international growth as well and of course, Latin America will really be an ’09 event. Not so much on drilling services in Brazil because we already have already 50% of that business so that will just continue to ramp, but the Drilling Fluids will be much bigger for us in Brazil in ’09 and, of course, Mexico will be a major player for us in ’09. Those are where we are kind of putting our numbers. That, plus the fact that the offshore rigs as they come on in the fourth quarter and through next year, we think we will do quite well with those.

Just in Mexico, what kind of margin drag is the startup in Mexico for the back half of the year?

Well, we are not going to have positive margins in Mexico in the second quarter, but we believe that we will be back to positive margins in the third quarter as the project starts up. And then it will get better as the quarters roll on.

Okay, great. Good color. Thank you.

Your next question comes from the line of Ole Slorer of Morgan Stanley.

Thank you.

Good morning Ole.

Good morning and congratulations on these margins.

Thanks Ole.

How do you feel about your business compared to say a year ago and two years ago when we had capacities using completion, there was shortage of personnel in your wireline division, drilling services was still struggling and you were still hiring (inaudible) from people so there is still a lot of work to do to grow the company. But, do you feel ahead of the hump here in terms of the cost to income ratio as we go forward?

Well, I do not know if you ever get ahead of the hump. As Peter said, we are bringing on another 3,000 in the second half of this year. So, we go back to this point that it takes them a little while for their productivity to get in place. But if you look at are margins, our margins have stayed in there at the 23%. As Peter said the other day, he has been here a year and a half, two years now and when he came, we were a $2 billion a quarter, and we are $3 billion today and our margins are holding in there. We have added about 10,000 people or 9,000 people I guess during that time. So, going forward, I think we are kind of back where we were two years, two and a half years ago, this is kind of the second wind, I think a second leg of activity that is coming on globally as well as domestically.

Do you feel you are ready for that now?

Yes. Yes. I think we are ready for it. I think from the manufacturing standpoint, remember going into it about two, three years ago Ole, we were a company that was spending about $300 million of Cap-Ex a year. These last couple of years we spent $1.1 billion and $1.3 billion, so we have continued to build out infrastructure tools and continue to bring on the right people. So, yes, I have no qualms, I know where you are coming from because we talked about it; I have no qualms to handle the offshore rigs coming in at all. We have already been tracking these rigs, the Gulf of Mexico there are 16 rigs coming in over the next probably about the next two to three quarters. Clients have already started to issue contracts out of -- we estimate the TAM for our services on those 16 rigs at about $550 million, about $200 million of it has already been awarded. We show we have about 35% of what has been awarded. So already, and again, these are three, four quarters out, some of them, before they roll in. So already we know what rigs we are going to be on and we can start assigning people as it gets closer.

Yes. And the visibility is pretty good at the moment. So you feel you are ready for it, that is good to hear.

Yes.

You highlight the flat sequential margin and if I heard correctly, you indicate that the first quarter should be a little better than the third quarter?

Yes, that is the way we are modeling it now or we see it now. We think Q4 looks pretty strong.

And the timing there, is that offshore versus onshore? Is it –Mexico, Latin America starting up and taking effect, what is it that gives you this confidence?

It is all over from North America to West Africa to Latin America to Russia. It is really coming in from everywhere.

When you say a lot stronger, can you give a little bit more color?

Well, I just did. I said it would be much stronger.

Okay. Okay. I guess I am fighting too hard. Well, thank you very much.

You bet.

Your next question comes from the line of Byron Pope of Tudor, Pickering, Holt.

Now that you are providing operating margins by regions, Chad, could you give us a feel, I know you have got mix issues in different regions, but could you give us a feel for how we should think about the ability to bring home incremental margins in your international markets over time?

You are talking about margins in general or just how we are going to improve incremental margins?

Just thinking about the incremental earnings, incremental margins capability in your various international regions. And again, I know you have mix issues by region. But just trying to think about the incremental profits that you can drive home with incremental dollar of revenues in some of your international markets.

Well, I think Latin America, I expect to see, once you kind of get the startup in Mexico and the drilling through with Brazil, but I think Latin America is going to show very good incrementals. We have got the Brazil stuff for drilling behind us and we are adding -- we continue to go from 13 rigs to 17 rigs in terms of build out. So we do have some. But I think Latin America incrementals will do fine. I think West Africa should do well. I think Europe is a little bit like North America just activity dependent and what takes place. We have some nice contracts in your Europe. I think our challenge is still, as I mentioned earlier, I still think we have got to work on the Middle East/Asia Pac. This is the one area where we had some strong, strong revenues out of the Middle East mainly because of what we did in the past on completions or equalizer and of course the ramp up in Saudi with all the directional drilling where we were really nonexistent there four years ago. So the last couple of years we saw some great increases there we got to overcome. If you look at our incrementals this quarter as well as last quarter and look at it as a company group, so far we are the highest incremental this quarter. And I think we were second highest or close to second highest last quarter out of our peer group, out of six that we track. So I think you look at it globally, I think our incrementals are strong as anywhere. And if you look at it regionally we got to work on the Middle East.

And then just one follow up question with regard to North America. Given the strength of your sequential revenue improvement in US land and US Gulf of Mexico, is it fair to think that operating margins in those two areas within North America were up sequentially? So basically North America ex Canada up margins, North America would have been up sequentially?

Well they were definitely offshore. I could tell you here. Down just slightly on land. Up quite a bit offshore. Combined they were up. For US they were up. Yes.

Okay. Thanks.

Your next question comes from the line Robin Shoemaker of Citigroup.

Yes good morning. Chad, I was wondering if you could update us as you have on prior calls about your -- the transformation under way in your international sales organization. And you greatly reduced the number of agents. How far along are we in that process? Are we fully through it and what do you think the residual impact is at this point?

Well, Robin I think where we are today. Again we have gone from about 600 commercial agents, processing agents and commercial agents. Even as we focused on the commercial side we have gone from roughly 600 a few years ago to around 50 give or take handful today. Some are required in certain countries. And the other countries we continue to try to reduce where we can. So I think we may get that down a little bit more. I think more -- we are just so much better in terms of how to handle these agents and our processes are much better. Our procedures -- we do have the monitor in place. The monitor as Peter referred to it in his comments; the monitor has given us certain recommendations and certain recommendations to government that he wants us to follow through on. And he will come back in the fall and see how we have implemented those. And it mostly now, falls into the functional roles such as legal, HR and finance. They are the ones that are carrying a lot of the load today. I think last year when the monitor first came in and we settled with the DOJ, we really had a lot of our operational people tied up to make sure that we were continuing to reduce agents. And I think that is the big thing from last year to this year is that this year our operations people obviously maintain their focus on compliance and what we are doing. But they are able to now a lot more concentrate on operations around the world and the let the functional groups go ahead and implement the procedures and processes that we have agreed to, to finish out with a monitor. And I think that is the big change from last year to this year that we see. I do not know if that answers your question or not.

Yes. It does. I mean -- when we look also back over the last year some of the areas where you have had big start-up costs. I wonder as you look at your country-by-country or region-by-region now, where is the biggest delta where you are starting to see the downhill slope on the cost side? And the revenue ramp, not project specific but regions? Where are you really seeing the biggest change as start-up costs start to decline?

Well, in Latin America. General just in region, specifically Brazil. I think that is an area and another one would be Saudi. Where, again, we now have the infrastructure in place and the buildup. I think we are seeing the benefit of activity that is kind of flat; been able to improve because we are more efficient. I think we are close to in Russia, we will never probably never get to the point where we will not keep on building up and ramping up in Russia. But a lot of our size is in place. So I think we are up to 1450. We will be at 1800 people in Russia by the end of this year. We have got some good projects. So we are having some facility build outs in Siberia and the Eastern Russian places. But I think those are three that pop to mind.

And if you win some big contracts such as Angola then presumably there -- you are kind of on the uphill slope in a few places as well, like that.

Yes, I think Angola and Nigeria are two that we got a couple of tenders there, if we win them and we have got to put some more investment in there. But not on the same scale as what we have done in Brazil and what we are doing in Russia.

Right, understood. Okay, thank you.

You bet.

Your next question comes from the line of Chuck Minervino of Goldman Sachs.

Hi good morning.

Good morning Chuck.

So you gave your initial forecasts on 2009 international growth. And I was just wondering if you guys cared to venture a guess on your North America revenue growth assumptions for the back half of the year into 2009? Maybe taking into account what you are looking for drilling activity in Canada and price, etc?

Well, let us talk rigs for the second half of the year in North America. We see rig count going up an average about 8%. I think gas is going up 7%. Oil direct is going up 13% over the first half. So clearly second half in North America continues to look good. I would not want to try to venture in 2009 what revenue or what we are going to do in ’09 yet. I think that what we will see in ’09 just depends on these things we have talked about for the last several years. What does the winter look like? What does the summer look like? What happens with the hurricane season, et cetera, et cetera? I do think that there are some clients that are very well positioned that even if gas went down to $7, $8 MCF, I do not think it would stop their programs. And I think probably some clients that are looking at $10, $11, $12 gas in order to justify their programs. So you know even if gas got down to $8 or $9 next year. I do not think we would see a collapse by any means. I think we would just see possibly a retraction like what we saw a year ago. And probably stabilize at a pretty good high rate, would continue to move forward. The other part of your question was what, Chuck?

No, that was it. I guess Canada if you could factor (inaudible)?

Yes Canada is coming back. I do not think it is going to be as high as what it was the second half of last year. But British Columbia clearly looks the strongest area up there now but I think Canada will have a decent second half of the year and probably do okay next year.

All right and then just on your internationals as the 20% that you had mentioned earlier. Can you give us a sense of how much of that is contracted as of right now? Or is most of that work that still yet to come?

No, we pretty much try to run our numbers based on what we are -- either want or we are pretty confident we are going to win. So, I would say that is pretty much stuff we are comfortable with.

Thank you.

Your next question comes from the line of Doug Becker of Banc of America.

Thanks. Chad, on the one hand you have a very positive outlook. We are seeing activity in North America looking up. We have seen a number of your competitors increase capital spending. On the other hand, you are still looking at CapEx of around $1.3 billion. I just want to get a better understanding or kind of just reconciling the two things and that what we are spending.

Well, I think you have to kind of look at where we are. We spent about $600 million year-to-date, a little less than that. We have got a $1.3 billion that we are showing there. So we have got $700 million to spend in the second half. We could, depending on, again any contracts that we win in the next few months. If we win them, we will ramp up CapEx. So we could go up to $1.4 billion by the end of the year. I mean two things there. One could we get all these facilities and everything built to spend $700 million by the end of the year. And two if we need to do more we will do it. Again, it just depends. Some of these contracts are large - $400, $500, $600, $800 million type contracts. If we win them then we are going to have to increase our capital spending but we call that shot when it happens.

All right, makes sense. Another thing, if you could just talk a little bit more your current views in the ITM or integrated operations, the contract in Mexico. The offer in Mexico looks pretty nice. Are your thoughts on those type of contracts changing?

Well, you know they are changing in that this is what is in demand right now. So you obviously you change and that is what some clients are saying you need to do. The contract in Mexico, as I said, is not without its risks but it is also tendered at a high enough price over the AFE that we feel that we can handle those risks. And those are the type ones that we like. We do not mind the technical challenges as long as we got a shot at making some money on them. Right now we are on seven such projects around the world. We are managing or have about 13, 14 rigs. We have in hand, about $1 billion worth of contract is what those add up to. And that is over about a two-year period of time. That mostly -- we still like the idea of not necessarily owning the rig or being responsible to rigs so that does not include any rig revenue in there. That is mostly Baker Hughes services, with the exception in Mexico with our partner BJ there for their share of that project. We have got several other tenders out right now that we are waiting to hear on. By year-end we could be at 10, 12 projects based on those wins. So we are being pretty selective on where and we are being pretty selective in terms of the risks that we take.

Okay, thanks.

Your next question comes from the line of Michael LaMotte of J.P. Morgan.

Thanks. Morning. Can I follow up on the CapEx question quickly and ask you to breakout facilities versus tool and sort of direct revenue spend? Get a sense to how those changes are tracking versus revenue.

Yes, we are around $300 million for facility spend for ’08. And the other billion is mainly on tools -- logging tools, cementing tools -- did not have that one right. That goes back a few years. Logging tools, directional drilling tools, bits -- you have to keep in mind that we do capitalize our bits. So that is where that spread is. So again, if it comes down to it we win some contracts and we need to ramp up then these are not long necessary -- real long lead times. They are not like rigs or big pressure pumping units and things like that.

But we are also building some capacities outside of just infrastructure. For example, our chemicals business is virtually sold out right now. And we are building reactors and so on. And pumps business is close to its capacity right now and we have got to invest in those areas. So, we are continuing to make incremental improvements in the supply chain as well. And it is probably 100 or 200 roughly in that sort of activity. As well as in the next –

Sure. Call that manufacturing. And remind me again what the 300 compares to versus last year on the facilities? It was quite a bit higher last year was it not?

No last year it was about $150 million.

Actually we ended up at about $130 million.

$130 million –

Actual spent.

You know we put in the press release that this year in square footage we will have done more than we did in the previous six years. So go back three years ago it was about $15 million for facilities.

Okay. And then in terms of a run rate sort of in the ’09, any thoughts as to what would be an appropriate level -- facility spend going forward?

Do not know yet on tools because that will all depend on what contracts we win et cetera but on facilities you are still going to be north of $300 million for infrastructure type spend. Facilities and as Peter said some manufacturing capabilities, et cetera

And then Chad, if I could ask you to elaborate a little bit on the fluid contracts in Brazil?

Well, it is for all their fluids and FES type work or 50% of their deep-water work. We were already on several rigs down there for drilling fluids. It did go to tender. We did win the tender. We were the low price on this one for the tender. Margin wise it is good margins when you look at on a global basis. So we feel pretty excited about this win and it will really put us on the map down in Brazil.

It strikes me and feel free to correct this observation if you do not think it is right. But it strikes me that you are having much greater success with single point of service contract wins in large scale, i.e., directional drilling Brazil or fluids in Brazil, than sort of the big large bundled packages. Do you think that is a function of sort of the breaking down the barrier in terms of how the customer views Baker Hughes very strong in terms of product and service line? But its in-tech atlas product line specific as opposed to here is Baker Hughes?

Oh I think it depends on the customer. We do not have a problem going in and getting a shot at any of these big IPM type projects. It is a matter of when you sit down and look at it. And the third party charges and pulls through and everything else. We tend to mark them up a little bit and maybe are not competitive on a couple of them but we do -- we have done quite well on the individual services on big wins. And especially when it comes to highly complicated type projects. I think there the client really does start looking at the big service companies and kind of points to where they are strong in a particular area and say what can you do for us. Because they have so much exposure on some of these big projects especially offshore. So they tend to break it up and kind of put it down into individual services.

That is good color. Thank you.

Christy at this point I think we will go ahead and conclude the call. I want to thank everyone for their participation this morning. I do want to respectful of the other calls that are happening today. I think you got another call in about four minutes. So following the conclusion of today’s call both G and I will be available to answer your questions. We once again thank you for your participation.

Thank you again for participating in today’s Baker Hughes Incorporated conference call. This call will be available for replay beginning at 10:30 am EST, 9:30 am CST, and will be available through 10 pm EST on Tuesday, August 5th, 2008. The conference id number for the replay is 49306924. Again, the conference id number for the replay is 49306924. The number to dial for the replay is 800-642-1687 in the United States or 706-645-9291 internationally. That is 800-642-1687 or 706-645-9291 internationally. You may now disconnect.