Baker Hughes 2004 Annual Report Download - page 7

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priorities.฀This฀means฀that฀we฀have฀to฀฀
be฀flexible฀enough฀to฀develop฀a฀specific฀
strategy฀to฀meet฀the฀needs฀of฀each฀of฀
these฀customers.
Our฀traditional฀markets฀continue฀to฀
be฀very฀important.฀We฀will฀continue฀to฀
provide฀high฀quality฀products฀and฀services฀
to฀our฀major฀and฀independent฀customers.฀
North฀America฀and฀the฀North฀Sea฀also฀
present฀significant฀ongoing฀opportunities฀
for฀Baker฀Hughes.฀Growing฀demand฀for฀
natural฀gas฀is฀expected฀to฀drive฀strong฀drill-
ing฀activity฀in฀North฀America.฀And฀in฀
maturing฀North฀Sea฀fields,฀our฀customers฀
will฀need฀more฀of฀our฀technology฀to฀main-
tain฀production.฀
We฀need฀a฀diverse฀workforce.฀We฀
operate฀in฀over฀90฀countries,฀and฀a฀grow-
ing฀majority฀of฀our฀revenue฀comes฀from฀
outside฀the฀U.S.฀We฀need฀to฀understand,฀
respect฀and฀operate฀in฀many฀different฀cul-
tures.฀So฀we฀are฀enhancing฀our฀efforts฀to฀
recruit,฀train฀and฀develop฀people฀from฀
those฀cultures.฀
There฀is฀no฀better฀training฀ground฀
than฀Baker฀Hughes.฀We฀have฀seven฀dif-
ferent฀divisions฀operating฀around฀the฀
world.฀This฀is฀a฀great฀place฀for฀young฀engi-
neers฀and฀other฀professionals฀to฀learn฀a฀฀
full฀range฀of฀technologies฀from฀industry฀
experts,฀and฀to฀live฀and฀work฀in฀a฀variety฀
of฀cultures.฀
Technology฀innovation฀is฀another฀
critical฀success฀factor฀for฀Baker฀Hughes.฀
In฀2004,฀Baker฀Hughes฀invested฀over฀฀
$270฀million฀in฀research฀and฀engineering,฀
primarily฀to฀support฀existing฀businesses.฀฀
In฀my฀view,฀we฀also฀need฀a฀longer-term฀
approach฀to฀technology฀development.฀To฀
this฀end,฀we฀are฀building฀on฀a฀small฀group฀
of฀experts฀at฀the฀corporate฀level฀to฀develop฀
broader,฀multi-division฀solutions฀to฀major฀
problems฀that฀our฀customers฀face฀–฀like฀
production฀optimization,฀deepwater฀devel-
opment,฀and฀high฀pressure/high฀tempera-
ture฀wells.฀
Strong฀product฀line฀divisions฀give฀
Baker฀Hughes฀a฀competitive฀advan-
tage.฀Baker฀Hughes฀will฀continue฀to฀differ-
entiate฀itself฀with฀strong฀divisions,฀highly฀
focused฀on฀their฀product฀lines.฀With฀a฀
strong฀focus,฀we฀can฀maintain฀high฀levels฀
of฀quality฀without฀blurring฀the฀responsibil-
ity฀for฀excellence฀in฀technology฀and฀service.
We฀will฀maintain฀our฀capital฀฀
discipline.฀The฀company฀has฀worked฀hard฀
to฀develop฀capital฀discipline,฀by฀reducing฀
debt฀and฀carefully฀evaluating฀investments.฀
We฀use฀a฀company฀metric฀called฀Baker฀
Value฀Added฀(BVA)฀that฀measures฀our฀
operating฀profit฀after฀tax฀less฀the฀cost฀of฀
capital฀employed.฀The฀BVA฀concept฀has฀
given฀our฀managers฀a฀performance฀yard-
stick฀that฀has฀helped฀them฀improve฀
returns.฀We฀will฀maintain฀capital฀discipline฀
while฀pursuing฀opportunities฀for฀growth.
Baker฀Hughes฀is฀a฀service฀company.฀
We฀should฀remind฀ourselves฀every฀day฀that฀
our฀goal฀is฀to฀provide฀quality฀services฀to฀
our฀customers,฀reducing฀non-productive฀
time฀and฀improving฀production.฀These฀are฀
the฀results฀that฀all฀of฀our฀customers฀under-
stand฀and฀value.
2004฀Annual฀Report฀฀฀฀฀3