been completed of the causes of the catastrophe and appropriate safeguards have been implemented to  reduce the likelihood of future similar occurrences. The Obama Administration has also proposed  reorganizing the Mineral Management Service into two regulatory bodies, with one of the two bodies  dedicated to regulatory oversight of offshore drilling operations. The ultimate effects of the rig catastrophe,  and the governmental and industry response to these events, could have a significant impact on the  offshore E&P industry and energy service companies that serve that industry. Among the possible future  consequences of this event are additional regulatory oversight and control with respect to offshore drilling, a  potential ban or restriction on oil and gas exploration in certain offshore areas, particularly deepwater  drilling, and an increase in insurance premiums for casualty insurance that may be more difficult to obtain. Any such development could reduce demand for the company’s services in the U. S. GOM. The events in  the U. S. GOM may also have ramifications in foreign exploration areas, which could adversely affect our  international operations as well, although it is impossible to assess at this time. Information on Properties is contained in Item 1 of this report.  None. The company has previously reported that special counsel engaged by the company’s Audit Committee had  completed an internal investigation into certain FCPA matters and reported its findings to the Audit  Committee. The substantive areas of the internal investigation have been reported publicly by the company  in prior filings.  Special counsel has reported to the Department of Justice (DOJ) and the Securities and Exchange  Commission (SEC) the results of the investigation, and has engaged in a series of cooperative discussions  with the two federal agencies as to the potential legal ramifications of those findings. The following reflects  the status of those discussions:  The company has reached an agreement in principle with the staff of the SEC to resolve its previously  disclosed investigation of possible violations of the FCPA. Under the proposed resolution, the company  would consent to the filing in federal district court of a complaint (“Complaint”) by the SEC, without admitting  or denying the allegations in the Complaint, and to the imposition by the court of a final judgment against the  company, including a permanent injunction against us. The Complaint would allege civil violations of the  FCPA’s anti-bribery and accounting provisions with respect to certain previously discussed conduct  involving tax authorities in Azerbaijan, and the FCPA’s accounting provisions with respect to amounts paid  by a subsidiary of the company to a third party customs broker to procure certain permits necessary for the  company’s vessels to operate in Nigeria. The final judgment would not take effect until it is confirmed by the  court, and would permanently enjoin the company from future violations of those provisions.  The agreement in principle would require the company to pay a total of approximately $11.4 million,  consisting of the sum of $8.4 million (principally representing disgorgement of profits and prejudgment  interest) payable at the time of settlement and a contingent civil penalty of $3.0 million. The contingent civil  penalty would be payable to the SEC in 18 months, to the extent that the company had not agreed to pay  fines or penalties of at least that amount to another government authority (or authorities) in connection with  the matters covered by the internal investigation. The financial charge associated with the proposed  settlement with the SEC was recorded in the fourth quarter of fiscal 2010 and is included in general and  administrative expenses.  The agreement in principle is contingent upon the parties’ agreement on the terms of the relevant  documents, approval by the Securities and Exchange Commission, and confirmation by a federal district  -22-  Securities and Exchange Commission  Foreign Corrupt Practices Internal Investigation ITEM 3. LEGAL PROCEEDINGS ITEM 2. PROPERTIES ITEM 1B. UNRESOLVED STAFF COMMENTS