HOUSTON, April 26 /PRNewswire-FirstCall/ -- Baker Hughes Incorporated(NYSE: BHI; EBS) announced today that it has reached settlements with theUnited States Department of Justice (DOJ) and the Securities and ExchangeCommission (SEC). These parallel settlements resolve the investigations,disclosed in 2002 and 2003, into Baker Hughes' operations in Angola,Kazakhstan and Nigeria. The total agreed-upon payments to settle theseinvestigations are $44.1 million, for which the company recorded a reserve inthe fourth quarter of 2006.
Chad Deaton, chairman and chief executive officer of Baker Hughes, said,"Since the commencement of these investigations in 2002, we have cooperatedfully with the SEC and DOJ. We conducted our own rigorous, independentinvestigation and we have openly shared our findings with these agencies. Theacts which resulted in these enforcement actions are contrary to our corevalues, our policies and our expectations for ethical behavior. The companyhas terminated employees and commercial agents that it believes were directlyinvolved. In addition, we have further strengthened the compliance culturewithin the company by making extensive improvements and enhancements to ourcompliance program.
"Our employees and management have demonstrated their strong commitment toethical business conduct and strict compliance with the law over the pastseveral years, and the progress of our programs to benchmark and to continueto improve our compliance are on track. There is no doubt that our renewedcommitment to strong ethics and legal compliance complements our Best-in-Classtechnology and our reputation for reliability and project execution."
Baker Hughes' Compliance Program
Over the past several years Baker Hughes has embarked on a process tocontinuously upgrade its compliance program to a Best-in-Class standard and tominimize the role that commercial agents play in our business model.Highlights of this process include:
Mr. Deaton said, "The significant steps we have taken over the past fewyears to strengthen our global compliance program will play an important rolein reinforcing this company's strong historical reputation for integrity andethical behavior. Baker Hughes is committed to continued improvement in ourcompliance program with particular emphasis on the FCPA. We are ready to workclosely with the compliance monitor to demonstrate the effectiveness of ourcurrent compliance program and to build upon the improvements we have alreadymade."
For more information on Baker Hughes' program for ethical and legalcompliance, visit the company's web site at:http://www.bakerhughes.com/investor/about/our_commitment.htm
Forward-Looking Statements
This news release (and oral statements made regarding the subjects of thisrelease) contain forward-looking statements within the meaning of Section 27Aof the Securities Act of 1933, as amended, and Section 21E of the SecuritiesExchange Act of 1934, as amended, (each a "Forward-Looking Statement"). Thewords "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate,""project," "forecasts," "predict," "outlook," "aim," "will," "could,""should," "would," "may," "likely" and similar expressions, and the negativethereof, are intended to identify forward-looking statements. There are manyrisks and uncertainties that could cause actual results to differ materiallyfrom our forward-looking statements. These forward-looking-statements arealso affected by the risk factors described in the Company's Annual Report onForm 10-K for the year ended December 31, 2006; the Company's subsequentquarterly reports on Form 10-Q; and those set forth from time to time in ourother filings with the Securities and Exchange Commission. The documents areavailable through the company's web site or through the SEC's Electronic DataGathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov . Weundertake no obligation to publicly update or revise any forward-lookingstatement.
The Forward-Looking Statements contained in this news release are alsosubject to the following risk factors:
Our expectations of success regarding the effectiveness of our ongoingcompliance program is subject to the company's ability to continue to workwith agents and business partners as well as supervise, train and retaincompetent employees and the efforts of our employees to comply with the BakerHughes Business Code of Conduct. Under the settlement agreements Baker Hughesis subject to a two-year deferred prosecution agreement and is enjoined by acourt against any further violations of the FCPA. Accordingly, the settlementagreements reached with the SEC and DOJ could be substantially nullified andthe company could be subject to severe sanctions and civil and criminalprosecution as well as fines and penalties in the event of a subsequentviolation by the company or any of its employees or a failure of the companyto meet all of the conditions contained in the agreements.
Our expectations regarding the impact of the settlement agreements withthe SEC and DOJ and our ongoing business operations are subject to (1) ourability to hire and successfully coordinate with a government-approved monitorin connection with our compliance program and on-going operations (2) thepotential impact of the settlement on the operations of the company and/or itssubsidiaries and any legal action against the company and/or its subsidiariesin the countries that are the subject of the settlements and (3) thecollateral impact of the agreement in the U.S. and other countries outside theUnited States where the company and/or its subsidiaries do business that mayclaim jurisdictions over any of the matters related to the DOJ and SECinvestigations.
Baker Hughes is a leading provider of drilling, formation evaluation, completion and production products and services to the worldwide oil and gas industry.
NOT INTENDED FOR BENEFICIAL HOLDERS
Contact:
Gary R. Flaharty (713) 439-8039
H. Gene Shiels (713) 439-8822
SOURCE: Baker Hughes Incorporated
CONTACT: Gary R. Flaharty, +1-713-439-8039, or H. Gene Shiels,
+1-713-439-8822, both of Baker Hughes Incorporated
Web site: http://www.bakerhughes.com
http://www.bakerhughes.com/investor/about/our_commitment.htm
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