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2007 Form 10-K 39
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Baker Hughes Incorporated
Houston, Texas
We have audited the accompanying consolidated balance sheets of Baker Hughes Incorporated and subsidiaries (the “Company”)
as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for
each of the three years in the period ended December 31, 2007. Our audits also included financial statement schedule II, valuation
and qualifying accounts, listed in the Index at Item 15. These financial statements and financial statement schedule are the responsi-
bility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by manage-
ment, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Baker Hughes
Incorporated and subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the
United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consoli-
dated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
As described in Note 1 and Note 6 to the consolidated financial statements: effective as of January 1, 2007, the Company
adopted Financial Accounting Standards Board (“FASB”) Staff Position (“FSP”) AUG AIR-1, which prohibits the accrue-in-advance
method of accounting for planned major maintenance activities; effective as of January 1, 2007, the Company adopted FASB Inter-
pretation 48, which established new accounting and reporting standards for uncertainty in income taxes recognized in financial
statements. Furthermore, as described in Note 4 and Note 14 to the consolidated financial statements: effective as of January 1,
2006, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 123R, which established new accounting
and reporting standards for stock-based compensation; effective as of December 31, 2006, the Company adopted SFAS No. 158,
which established new accounting and reporting standards for defined benefit pension and other postretirement plans.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
the Company’s internal control over financial reporting as of December 31, 2007, based on the criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report
dated February 19, 2008 expressed an unqualified opinion on the Company’s internal control over financial reporting.
Houston, Texas
February 19, 2008