Baker Hughes 2013 Annual Report Download - page 65

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Baker Hughes Incorporated35
Highlights of our Compliance Program include the following:
• We have comprehensive internal policies over such areas as facilitating payments; travel, entertainment,
gifts and charitable donations connected to non-U.S. government officials; payments to non-U.S.
commercial sales representatives; and the use of non-U.S. police or military organizations for security
purposes. In addition, we have country-specific guidance for customs standards, visa processing, export
and re-export controls, economic sanctions and antiboycott laws.
• We have a comprehensive employee compliance training program covering substantially all employees.
• We have a due diligence procedure for commercial sales, processing and professional agents and an
enhanced process for classifying distributors.
• We have a special compliance committee, which is made up of senior officers, that meets no less than once
a year to review the oversight reports for all active commercial sales representatives.
• We have continued our reduction of the use of commercial sales representatives and processing agents,
including the reduction of customs agents.
• We use technology to monitor and report on compliance matters, including a web-based antiboycott
reporting tool and a global trade management software tool.
• We have a program designed to encourage reporting of any ethics or compliance matter without fear of
retaliation including a worldwide Business Helpline operated by a third party and currently available toll-free
in 150 languages to ensure that our helpline is easily accessible to employees in their own language.
• We have a centralized finance organization including an enterprise-wide accounting system and company-
wide policies. In addition, the corporate audit function has incorporated anti-corruption procedures in audits
of certain countries. We also conduct FCPA risk assessments and legal audit procedures.
• We continue to work to ensure that we have adequate legal compliance coverage around the world,
including the coordination of compliance advice and customized training across all regions and countries
where we do business.
• We have a centralized human resources function, including consistent standards for pre-hire screening of
employees, the screening of existing employees prior to promoting them to positions where they may be
exposed to corruption-related risks, and a uniform policy for new hire training.
LIQUIDITY AND CAPITAL RESOURCES
Our objective in financing our business is to maintain sufficient liquidity, adequate financial resources and
financial flexibility in order to fund the requirements of our business. At December 31, 2013, we had cash and cash
equivalents of $1.40 billion, of which substantially all was held by foreign subsidiaries. A substantial portion of the
cash held by foreign subsidiaries at December 31, 2013 was reinvested in our international operations as our intent
is to use this cash to, among other things, fund the operations of our foreign subsidiaries. If we decide at a later
date to repatriate those funds to the U.S., we may be required to provide taxes on certain of those funds based on
applicable U.S. tax rates net of foreign tax credits. In addition, we have a $2.50 billion committed revolving credit
facility with commercial banks and a commercial paper program under which we may issue up to $2.50 billion. The
maximum combined borrowing at any time under both the credit facility and the commercial paper program is $2.50
billion. At December 31, 2013, we had commercial paper outstanding of $254 million; therefore, the amount
available for borrowing under the facility as of December 31, 2013 was $2.246 billion. We believe that cash on
hand, cash flows generated from operations and the available credit facility, including the issuance of commercial
paper, will provide sufficient liquidity to manage our global cash needs. In 2013, we used cash to pay for a variety
of activities including working capital needs, capital expenditures, repurchase of our common stock and payment of
dividends.
Cash Flows
Cash flows provided by (used in) each type of activity were as follows for the years ended December 31:
(In millions) 2013 2012 2011
Operating activities $ 3,161 $ 1,835 $ 1,507
Investing activities (1,663) (2,521) (1,891)
Financing activities (1,103) 646 (30)