1. 2008 Annual Report To Stockholders
Advancing Reservoir Performance. All the easy oil has been found.
Our customers need the right technology, properly applied, to
produce hydrocarbons from difficult reservoirs, including unconven-
tional gas plays, sub-salt formations, and deep, high pressure/
high temperature wells. Baker Hughes has that technology.
Baker Hughes has long been a leading provider of high-performance technology that creates
value from the reservoir. Virtually every product and service we provide is designed to lower
costs, reduce risk or improve productivity during activities directly related to hydrocarbon
Baker Hughes Incorporated extraction, advancing reservoir performance.
2929 Allen Parkway, Suite 2100
Our Drilling and Evaluation segment provides advanced evaluation technologies and geosci-
Houston, Texas 77019-2118
ence services to identify and quantify hydrocarbons so customers can make better decisions
P.O. Box 4740 about field development and create more value. Our full range of drilling technologies helps
Houston, TX 77210-4740 our customers drill their wells more efficiently and more precisely to the most productive
zones in the reservoir.
(713) 439-8600
www.bakerhughes.com Our Completion and Production segment is focused on advancing reservoir performance
over the 10- to 20-year life of the field. Our completion systems anticipate reservoir prob-
Advancing
lems and enable operators to optimize production from all types of wells, even in hostile
environments. Our artificial lift systems and chemical treatment services provide unique solu-
tions that enhance long-term productivity.
Reservoir
Even our downstream services to pipeline and refining customers are designed to create
value from hydrocarbons extracted from the reservoir by moving crude oil and products
more efficiently and by improving the performance of plant processes.
While Baker Hughes possesses a full range of technologies directed at the reservoir, we are
Performance
improving our ability to understand hydrocarbon reservoirs. In 2008, Baker Hughes formed
the Reservoir Technology and Consulting Group to build capabilities in reservoir engineering,
geomechanics and consulting that will enhance our ability to advance reservoir performance.
Additional information about the company is available on our website at
http://investor.bakerhughes.com/annuals.cfm

2. 2008 Annual Report To Stockholders
Advancing Reservoir Performance. All the easy oil has been found.
Our customers need the right technology, properly applied, to
produce hydrocarbons from difficult reservoirs, including unconven-
tional gas plays, sub-salt formations, and deep, high pressure/
high temperature wells. Baker Hughes has that technology.
Baker Hughes has long been a leading provider of high-performance technology that creates
value from the reservoir. Virtually every product and service we provide is designed to lower
costs, reduce risk or improve productivity during activities directly related to hydrocarbon
Baker Hughes Incorporated extraction, advancing reservoir performance.
2929 Allen Parkway, Suite 2100
Our Drilling and Evaluation segment provides advanced evaluation technologies and geosci-
Houston, Texas 77019-2118
ence services to identify and quantify hydrocarbons so customers can make better decisions
P.O. Box 4740 about field development and create more value. Our full range of drilling technologies helps
Houston, TX 77210-4740 our customers drill their wells more efficiently and more precisely to the most productive
zones in the reservoir.
(713) 439-8600
www.bakerhughes.com Our Completion and Production segment is focused on advancing reservoir performance
over the 10- to 20-year life of the field. Our completion systems anticipate reservoir prob-
Advancing
lems and enable operators to optimize production from all types of wells, even in hostile
environments. Our artificial lift systems and chemical treatment services provide unique solu-
tions that enhance long-term productivity.
Reservoir
Even our downstream services to pipeline and refining customers are designed to create
value from hydrocarbons extracted from the reservoir by moving crude oil and products
more efficiently and by improving the performance of plant processes.
While Baker Hughes possesses a full range of technologies directed at the reservoir, we are
Performance
improving our ability to understand hydrocarbon reservoirs. In 2008, Baker Hughes formed
the Reservoir Technology and Consulting Group to build capabilities in reservoir engineering,
geomechanics and consulting that will enhance our ability to advance reservoir performance.
Additional information about the company is available on our website at
http://investor.bakerhughes.com/annuals.cfm

3. Review
Corporate Officers Board of Directors
During a year with record financial results, Baker Hughes contin- Keys to Success Our Core Values Chad C. Deaton
ued to invest in people, technology and infrastructure to help oil • People contributing to their full potential. Integrity – We believe integrity is the foundation of our individual and corporate actions. Chairman, President and Chief Executive Officer
and gas companies advance reservoir performance. We delivered • Delivering unmatched value to our customers. We are accountable for our actions, successes and failures.
advanced technology and services to support unconventional gas Martin S. Craighead
• Being cost-efficient in everything we do. Teamwork – We believe teamwork leverages our individual strengths. We willingly share our resources as we
and deepwater projects in North America, geared up for growing Vice President and Group President,
work toward common goals.
activity in Latin America, and expanded our capabilities to meet • Employing our resources effectively. Drilling and Evaluation
Performance – We believe performance excellence will differentiate us from our competitors. We work hard,
client needs in the Eastern Hemisphere. Below are highlights from
celebrate our successes and learn from our failures. Paul S. Butero
Baker Hughes operations around the world.
Learning – We believe a learning environment is the way to achieve the full potential of each Vice President and President, INTEQ
individual and the company. Larry D. Brady Clarence P. Cazalot, Jr. Chad C. Deaton Edward P. Djerejian
Stephen K. Ellison
Former Chairman and President and Chief Chairman, President and Director, James A. Baker III
Vice President and President, Baker Atlas Chief Executive Officer, Executive Officer, Chief Executive Officer, Institute for Public Policy,
Intermec, Inc. Marathon Oil Corporation Baker Hughes Incorporated Rice University
Gary G. Rich
Vice President and President,
Hughes Christensen
Richard L. Williams
Vice President and President,
Canada Europe Baker Hughes Drilling Fluids
In Canada, total rig count was up 11% from 2007, In Europe, Baker Hughes reinforced its leading posi-
as oil-directed drilling increased 33%. Our horizontal tion in Norway, obtaining an important contract for Clifton Triplett
well technology helped operators exploit the Willi- drilling, evaluation, fluids and completion technology. Vice President, Chief Information Officer
ston basin oil plays in Saskatchewan. We introduced We continued to set records, drilling complex, multi-
Anthony G. Fernandes Claire W. Gargalli Pierre H. Jungels, CBE James A. Lash
our casing drilling technology in the arctic Mckenzie lateral wells for StatoilHydro. We also helped U.K. David H. Barr
Former Chairman, President Former Vice Chairman, Former President of the Chairman, Manchester
delta and in the Canadian Rockies. We also provided operators optimize production from mature fields Vice President and Group President, and Chief Executive Officer, Diversified Search and Institute of Petroleum Principal LLC
drill bits, chemical services, completion tools and using reentry systems, directional drilling, specialty Completion and Production Phillip Services Corporation Diversified Health
high temperature ESP systems for oil sand and Steam chemical services and artificial lift technology. Search Companies
Christopher P. Beaver
Assisted Gravity Drainage projects.
Russia Vice President and President,
U.S. Land In the first half of the year, Baker Hughes set
Baker Oil Tools
In the U.S. land market, Baker Hughes was well posi- extended reach drilling records from Sakhalin Island, Nelson Ney
tioned to support operators in unconventional gas and expanded its fluids, specialty chemicals and elec- Vice President and President, Centrilift
basins with horizontal drilling, evaluation and com- tric submersible pump businesses in Western Siberia.
pletion technology. Our artificial lift, specialty chemi- Wireline logging and re-entry drilling activity also John A. O’Donnell
cal and permanent monitoring product lines helped increased before the market weakened. Despite the Vice President and President,
optimize production from mature fields. We inaugu- impact of the economic downturn, the company Baker Petrolite
rated our new Center for Technology Innovation in continues to invest in growth in Russia, adding facili- James F. McCall* J. Larry Nichols H. John Riley, Jr. Charles L. Watson
David E. Emerson
Houston, and opened a number of new operations ties and developing our employee base. Lt. General, U.S. Army Chairman and Chief Former Chairman, Senior Advisor, Eagle Energy
Vice President, Corporate Development
facilities across the country. (Retired) and Former Executive Officer, Cooper Industries, Ltd. Partners and Electricite de
Middle East Peter A. Ragauss Executive Director of the Devon Energy Corporation France and Chairman,
U.S. Offshore Baker Hughes opened a major new regional head- Senior Vice President and
American Society of
Military Comptrollers
Wincrest Ventures L.P.
Offshore U.S., deepwater operators benefited from quarters and education center in Dubai. Horizontal Chief Financial Officer
Baker Hughes technology and experience. Our drill- drilling and completions activity remained strong in
ing fluids experts demonstrated their leadership in Saudi Arabia with the introduction of new PDC bits Alan J. Keifer Stockholder Information Form 10-K Corporate Office
deep water with new synthetic fluids and advanced and LWD technology. Baker Hughes also gained Vice President and Controller Transfer Agent and Registrar Additional copies of the Location and
hydraulics engineering. Our directional drilling and directional drilling and completions business in the
John H. Lohman, Jr. BNY Mellon Shareowner company’s Annual Report to Mailing Address
LWD experts continued their record of reliability in U.A.E., built its fluids and artificial lift businesses in Services LLC the Securities and Exchange 2929 Allen Parkway, Suite 2100
Vice President, Tax
drilling through and beneath salt formations. Our Kuwait, delivered advanced completions in Qatar, 480 Washington Boulevard Commission (Form 10-K) are Houston, Texas 77019-2118
completions, intelligent well technology, and flow and won a long-term artificial lift contract in Oman. Jan Kees van Gaalen Jersey City, NJ 07310 available by writing to Baker Telephone: (713) 439-8600
assurance services helped optimize deepwater pro- Vice President and Treasurer (888) 216-8057 Hughes Investor Relations. P.O. Box 4740
duction. And we installed ESP systems in innovative Asia Pacific Houston, Texas 77210-4740
booster systems for subsea wells. In the Asia Pacific area, Baker Hughes completion Alan R. Crain Stock Exchange Listings Annual Meeting
systems enhanced results from horizontal and HPHT Senior Vice President and General Counsel Ticker Symbol “BHI” The company’s Annual Meeting Website
Latin America wells in India. Our wireline and artificial lift busi-
Sandra E. Alford New York Stock Exchange, Inc. of Stockholders will be held www.bakerhughes.com
In Latin America, Baker Hughes opened a new facility nesses showed strong gains in Indonesia. We pro- SWX Swiss Exchange at 9:00 a.m. Central Time on Baker Hughes
Corporate Secretary
in Macaé, Brazil and expanded operations there to vided innovative completions and gravel packing April 23, 2009 at the Information Systems
support deepwater and pre-salt directional drilling services in Thailand and advanced logging services Jay G. Martin Investor Relations Office Plaza Banquet Room (888) 408-4244
and LWD services, while adding capabilities to pro- offshore Vietnam. In Malaysia, we drilled complex Vice President, Chief Compliance Officer Gary R. Flaharty 2777 Allen Parkway
vide drilling fluids throughout the country. Our artifi- horizontal wells and helped restore production from and Senior Deputy General Counsel Director, Investor Relations Houston, Texas 77019-2118
cial lift systems helped clients throughout Latin under-performing wells. In China, our technologies Baker Hughes Incorporated
America maximize oil recovery, and we introduced and services contributed to successful projects in Didier Charreton P.O. Box 4740
new pumping systems for water injection. Baker Bohai Bay and the South China Sea. Vice President, Human Resources Houston, Texas 77210-4740
Hughes also managed two integrated operations ir@bakerhughes.com
Africa
Design: SAVAGE, Branding + Corporate Design, Houston, Texas
projects in Colombia during the year and prepared Derek Mathieson
for a major integrated project offshore Mexico to Strong activity in northern Africa included a multi-rig Vice President and Chief Technology
and Marketing Officer As a Baker Hughes stockholder, you are invited to take advantage of our convenient stockholder services or request
commence in 2009. integrated operations project and steady ongoing
more information about Baker Hughes.
business in Algeria, as well as increased participation
in the emerging Libyan market. Baker Hughes Russell J. Cancilla BNY Mellon Shareowner Services, our transfer agent, maintains the records for our registered stockholders and can
focused on opportunities in the deepwater fields Vice President, Health, Safety and help you with a variety of stockholder related services at no charge including:
off West Africa. In Angola, we delivered high-end Environment and Security
drilling and evaluation systems for complex wells, • Change of name or address • Additional administrative services • Dividend reinvestment enrollment
and in Nigeria, we prepared a new facility to serve • Duplicate mailings • Consolidation of accounts • Transfer of stock to another person
offshore customers. • Lost stock certificates
Access your investor statements online 24 hours a day, 7 days a week with MLinkSM.
For more information, go to www.melloninvestor.com/ISD.
*Will retire at the Annual Meeting of Stockholders to be held April 23, 2009.

4. Review
Corporate Officers Board of Directors
During a year with record financial results, Baker Hughes contin- Keys to Success Our Core Values Chad C. Deaton
ued to invest in people, technology and infrastructure to help oil • People contributing to their full potential. Integrity – We believe integrity is the foundation of our individual and corporate actions. Chairman, President and Chief Executive Officer
and gas companies advance reservoir performance. We delivered • Delivering unmatched value to our customers. We are accountable for our actions, successes and failures.
advanced technology and services to support unconventional gas Martin S. Craighead
• Being cost-efficient in everything we do. Teamwork – We believe teamwork leverages our individual strengths. We willingly share our resources as we
and deepwater projects in North America, geared up for growing Vice President and Group President,
work toward common goals.
activity in Latin America, and expanded our capabilities to meet • Employing our resources effectively. Drilling and Evaluation
Performance – We believe performance excellence will differentiate us from our competitors. We work hard,
client needs in the Eastern Hemisphere. Below are highlights from
celebrate our successes and learn from our failures. Paul S. Butero
Baker Hughes operations around the world.
Learning – We believe a learning environment is the way to achieve the full potential of each Vice President and President, INTEQ
individual and the company. Larry D. Brady Clarence P. Cazalot, Jr. Chad C. Deaton Edward P. Djerejian
Stephen K. Ellison
Former Chairman and President and Chief Chairman, President and Director, James A. Baker III
Vice President and President, Baker Atlas Chief Executive Officer, Executive Officer, Chief Executive Officer, Institute for Public Policy,
Intermec, Inc. Marathon Oil Corporation Baker Hughes Incorporated Rice University
Gary G. Rich
Vice President and President,
Hughes Christensen
Richard L. Williams
Vice President and President,
Canada Europe Baker Hughes Drilling Fluids
In Canada, total rig count was up 11% from 2007, In Europe, Baker Hughes reinforced its leading posi-
as oil-directed drilling increased 33%. Our horizontal tion in Norway, obtaining an important contract for Clifton Triplett
well technology helped operators exploit the Willi- drilling, evaluation, fluids and completion technology. Vice President, Chief Information Officer
ston basin oil plays in Saskatchewan. We introduced We continued to set records, drilling complex, multi-
Anthony G. Fernandes Claire W. Gargalli Pierre H. Jungels, CBE James A. Lash
our casing drilling technology in the arctic Mckenzie lateral wells for StatoilHydro. We also helped U.K. David H. Barr
Former Chairman, President Former Vice Chairman, Former President of the Chairman, Manchester
delta and in the Canadian Rockies. We also provided operators optimize production from mature fields Vice President and Group President, and Chief Executive Officer, Diversified Search and Institute of Petroleum Principal LLC
drill bits, chemical services, completion tools and using reentry systems, directional drilling, specialty Completion and Production Phillip Services Corporation Diversified Health
high temperature ESP systems for oil sand and Steam chemical services and artificial lift technology. Search Companies
Christopher P. Beaver
Assisted Gravity Drainage projects.
Russia Vice President and President,
U.S. Land In the first half of the year, Baker Hughes set
Baker Oil Tools
In the U.S. land market, Baker Hughes was well posi- extended reach drilling records from Sakhalin Island, Nelson Ney
tioned to support operators in unconventional gas and expanded its fluids, specialty chemicals and elec- Vice President and President, Centrilift
basins with horizontal drilling, evaluation and com- tric submersible pump businesses in Western Siberia.
pletion technology. Our artificial lift, specialty chemi- Wireline logging and re-entry drilling activity also John A. O’Donnell
cal and permanent monitoring product lines helped increased before the market weakened. Despite the Vice President and President,
optimize production from mature fields. We inaugu- impact of the economic downturn, the company Baker Petrolite
rated our new Center for Technology Innovation in continues to invest in growth in Russia, adding facili- James F. McCall* J. Larry Nichols H. John Riley, Jr. Charles L. Watson
David E. Emerson
Houston, and opened a number of new operations ties and developing our employee base. Lt. General, U.S. Army Chairman and Chief Former Chairman, Senior Advisor, Eagle Energy
Vice President, Corporate Development
facilities across the country. (Retired) and Former Executive Officer, Cooper Industries, Ltd. Partners and Electricite de
Middle East Peter A. Ragauss Executive Director of the Devon Energy Corporation France and Chairman,
U.S. Offshore Baker Hughes opened a major new regional head- Senior Vice President and
American Society of
Military Comptrollers
Wincrest Ventures L.P.
Offshore U.S., deepwater operators benefited from quarters and education center in Dubai. Horizontal Chief Financial Officer
Baker Hughes technology and experience. Our drill- drilling and completions activity remained strong in
ing fluids experts demonstrated their leadership in Saudi Arabia with the introduction of new PDC bits Alan J. Keifer Stockholder Information Form 10-K Corporate Office
deep water with new synthetic fluids and advanced and LWD technology. Baker Hughes also gained Vice President and Controller Transfer Agent and Registrar Additional copies of the Location and
hydraulics engineering. Our directional drilling and directional drilling and completions business in the
John H. Lohman, Jr. BNY Mellon Shareowner company’s Annual Report to Mailing Address
LWD experts continued their record of reliability in U.A.E., built its fluids and artificial lift businesses in Services LLC the Securities and Exchange 2929 Allen Parkway, Suite 2100
Vice President, Tax
drilling through and beneath salt formations. Our Kuwait, delivered advanced completions in Qatar, 480 Washington Boulevard Commission (Form 10-K) are Houston, Texas 77019-2118
completions, intelligent well technology, and flow and won a long-term artificial lift contract in Oman. Jan Kees van Gaalen Jersey City, NJ 07310 available by writing to Baker Telephone: (713) 439-8600
assurance services helped optimize deepwater pro- Vice President and Treasurer (888) 216-8057 Hughes Investor Relations. P.O. Box 4740
duction. And we installed ESP systems in innovative Asia Pacific Houston, Texas 77210-4740
booster systems for subsea wells. In the Asia Pacific area, Baker Hughes completion Alan R. Crain Stock Exchange Listings Annual Meeting
systems enhanced results from horizontal and HPHT Senior Vice President and General Counsel Ticker Symbol “BHI” The company’s Annual Meeting Website
Latin America wells in India. Our wireline and artificial lift busi-
Sandra E. Alford New York Stock Exchange, Inc. of Stockholders will be held www.bakerhughes.com
In Latin America, Baker Hughes opened a new facility nesses showed strong gains in Indonesia. We pro- SWX Swiss Exchange at 9:00 a.m. Central Time on Baker Hughes
Corporate Secretary
in Macaé, Brazil and expanded operations there to vided innovative completions and gravel packing April 23, 2009 at the Information Systems
support deepwater and pre-salt directional drilling services in Thailand and advanced logging services Jay G. Martin Investor Relations Office Plaza Banquet Room (888) 408-4244
and LWD services, while adding capabilities to pro- offshore Vietnam. In Malaysia, we drilled complex Vice President, Chief Compliance Officer Gary R. Flaharty 2777 Allen Parkway
vide drilling fluids throughout the country. Our artifi- horizontal wells and helped restore production from and Senior Deputy General Counsel Director, Investor Relations Houston, Texas 77019-2118
cial lift systems helped clients throughout Latin under-performing wells. In China, our technologies Baker Hughes Incorporated
America maximize oil recovery, and we introduced and services contributed to successful projects in Didier Charreton P.O. Box 4740
new pumping systems for water injection. Baker Bohai Bay and the South China Sea. Vice President, Human Resources Houston, Texas 77210-4740
Hughes also managed two integrated operations ir@bakerhughes.com
Africa
Design: SAVAGE, Branding + Corporate Design, Houston, Texas
projects in Colombia during the year and prepared Derek Mathieson
for a major integrated project offshore Mexico to Strong activity in northern Africa included a multi-rig Vice President and Chief Technology
and Marketing Officer As a Baker Hughes stockholder, you are invited to take advantage of our convenient stockholder services or request
commence in 2009. integrated operations project and steady ongoing
more information about Baker Hughes.
business in Algeria, as well as increased participation
in the emerging Libyan market. Baker Hughes Russell J. Cancilla BNY Mellon Shareowner Services, our transfer agent, maintains the records for our registered stockholders and can
focused on opportunities in the deepwater fields Vice President, Health, Safety and help you with a variety of stockholder related services at no charge including:
off West Africa. In Angola, we delivered high-end Environment and Security
drilling and evaluation systems for complex wells, • Change of name or address • Additional administrative services • Dividend reinvestment enrollment
and in Nigeria, we prepared a new facility to serve • Duplicate mailings • Consolidation of accounts • Transfer of stock to another person
offshore customers. • Lost stock certificates
Access your investor statements online 24 hours a day, 7 days a week with MLinkSM.
For more information, go to www.melloninvestor.com/ISD.
*Will retire at the Annual Meeting of Stockholders to be held April 23, 2009.