ed11k_hrsp12312007.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
Form
11-K
(X) Annual
Report pursuant to Section 15(d) of The Securities Exchange Act of
1934.
For the fiscal year ended December 31,
2007.
or
(
) Transition
Report pursuant to Section 15(d) of The Securities Exchange Act of
1934.
For the transition period from
______________ to ___________.
Commission
file number 1-3492
A. Full
title of the plan and the address of the plan, if different from that of the
issuer named below:
Halliburton
Retirement and Savings Plan
10200
Bellaire Blvd.
Building
91, Room 2NE18B
Houston,
Texas 77072
B. Name
of issuer of the securities held pursuant to the plan and the address of its
principal executive office:
Halliburton
Company
(a
Delaware Corporation)
75-2677995
140l
McKinney, Suite 2400
Houston,
Texas 77010
Telephone
Number – (713) 759-2600
Required
Information
The
following financial statements prepared in accordance with the financial
reporting requirements of the Employee Retirement Income Security Act of 1974,
signature and exhibit are filed for the Halliburton Retirement and Savings
Plan:
Financial
Statements and Supplemental Schedule
Report of
Independent Registered Public Accounting Firm
Statements
of Net Assets Available for Plan Benefits – December 31, 2007 and
2006
Statement
of Changes in Net Assets Available for Plan Benefits – Year ended December 31,
2007
Notes to
Financial Statements – December 31, 2007 and 2006
Supplemental
Schedule H, Line 4i – Schedule of Assets (Held at End of Year) – December 31,
2007
Signature
Exhibit
Consent
of Harper & Pearson Company, P.C. (Exhibit 23.1)
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Table
of Contents
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Financial
Statements
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Page
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|
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Report
of Independent Registered Public Accounting Firm
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1
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|
|
|
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Statements
of Net Assets Available for Plan Benefits
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|
|
December
31, 2007 and 2006
|
2
|
|
|
|
|
Statement
of Changes in Net Assets Available for Plan Benefits
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|
|
Year
Ended December 31, 2007
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3
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|
|
|
|
Notes
to Financial Statements
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|
|
December
31, 2007 and 2006
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4
|
|
|
|
|
Supplemental
Schedule
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|
|
|
|
|
Schedule
H, Line 4i – Schedule of Assets (Held at End of Year)
|
|
|
December
31, 2007
|
15
|
Schedules
not listed above are omitted because of the absence of conditions under which
they are required under the Department of Labor’s Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974.
Report
of Independent Registered Public Accounting Firm
To the
Benefits Committee of
Halliburton
Retirement and Savings Plan
Houston,
Texas
We have
audited the accompanying statements of net assets available for plan benefits of
the Halliburton Retirement and Savings Plan (the "Plan") as of December 31, 2007
and 2006, and the related statement of changes in net assets available for plan
benefits for the year ended December 31, 2007. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). 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 management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for plan benefits of the Plan as of
December 31, 2007 and 2006, and the changes in its net assets available for plan
benefits for the year ended December 31, 2007 in conformity with generally
accepted accounting principles in the United States of America.
Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/
Harper & Pearson Company, P.C.
Houston,
Texas
June 20,
2008
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Statements
of Net Assets Available for Plan Benefits
December
31, 2007 and 2006
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|
|
2007
|
|
|
2006
|
|
|
Assets
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ |
2,077,518 |
|
|
$ |
697,315 |
|
|
Plan’s interest in Master Trust
at fair value
|
|
|
3,754,033,396 |
|
|
|
3,474,261,911 |
|
|
Participant loans
|
|
|
60,078,056 |
|
|
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56,496,059 |
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|
Total investments
|
|
|
3,816,188,970 |
|
|
|
3,531,455,285 |
|
|
Receivables
|
|
|
|
|
|
|
|
|
|
Company contributions receivable,
net of forfeitures
Participant contributions
receivable
|
|
|
60,296,160 92,122 |
|
|
|
52,423,930 — |
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|
Total receivables
|
|
|
60,388,282 |
|
|
|
52,423,930 |
|
|
|
|
|
|
|
|
|
|
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|
Net
assets available for plan benefits at fair value
|
|
|
3,876,577,252 |
|
|
|
3,583,879,215 |
|
|
Adjustment
from fair value to contract value for fully
|
|
|
|
|
|
|
|
|
|
benefit-responsive
investment contracts
|
|
|
(20,742,658 |
) |
|
|
(11,274,432 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
assets available for plan benefits
|
|
$ |
3,855,834,594 |
|
|
$ |
3,572,604,783 |
|
See
accompanying notes to financial statements.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Statement
of Changes in Net Assets Available for Plan Benefits
Year
Ended December 31, 2007
|
Additions
|
|
|
|
|
Investment income,
net
|
|
|
|
|
Plan’s interest in Master
Trust net investment activity
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|
$ |
324,747,072 |
|
|
Interest on loans to
participants
|
|
|
4,256,110 |
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|
Total investment
income
|
|
|
329,003,182 |
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|
Contributions
|
|
|
|
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Company, net of
forfeitures
|
|
|
114,339,895 |
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|
Plan
participants
|
|
|
123,814,125 |
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Rollovers
|
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13,232,979 |
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|
Total
contributions
|
|
|
251,386,999 |
|
|
|
|
|
|
|
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Total additions
|
|
|
580,390,181 |
|
|
|
|
|
|
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Deductions
|
|
|
|
|
|
Benefits paid to
participants
|
|
|
283,565,591 |
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|
Investment management fees and
administrative expenses
|
|
|
13,594,779 |
|
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Total deductions
|
|
|
297,160,370 |
|
|
|
|
|
|
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Net increase in net assets
available for plan benefits
|
|
|
283,229,811 |
|
|
|
|
|
|
|
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Net
assets available for plan benefits
|
|
|
|
|
|
Beginning of year
|
|
|
3,572,604,783 |
|
|
|
|
|
|
|
|
End of year
|
|
$ |
3,855,834,594 |
|
See
accompanying notes to financial statements.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December 31,
2007 and 2006
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(1)
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Description
of the Plan
|
The Halliburton
Retirement and Savings Plan (the “Plan”) is a defined contribution plan
maintained for the benefit of certain qualified employees of Halliburton Company
and certain subsidiaries (the “Company”). The Plan was established in
accordance with Sections 401(a) and 401(k) of the Internal Revenue Code of 1986,
as amended (“IRC”) and is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”). The following
description of the Plan provides only general
information. Participants should refer to the plan document or
summary plan description for a more complete description of the Plan’s
provisions.
All
employees of the Company are eligible for immediate participation in the Plan
upon their date of hire unless they are among the ineligible populations as
defined in the plan document. Generally, employees are ineligible to
participate in the Plan if they are: (1) covered by a collective
bargaining agreement, unless the Company has specifically extended participation
to the employee group; (2) nonresident aliens with no earned income from the
Company from sources within the United States of America; (3) covered by any
other funded plan of deferred compensation of any foreign subsidiary of the
Company with respect to employment in the United States of America; (4) leased
employees or independent contractors; or (5) eligible (except for meeting age
and service requirements) to participate in any other plan of the Company that
is intended to meet the requirements of section 401(a) of the IRC other than the
Halliburton Retirement Plan (a defined benefit plan).
Employees
Participants
may elect to contribute up to 50% of their eligible earnings, not to exceed the
Internal Revenue Service (“IRS”) compensation limit ($225,000 for 2007), to the
tax deferred savings feature of the Plan through periodic payroll
deductions. The total amount of participant tax deferred savings
contributions was limited to $15,500 for 2007.
The Plan
contains an automatic enrollment feature for eligible employees hired on and
after January 1, 2006. These employees are automatically enrolled to
contribute 4% of their eligible compensation to the Plan on a pre-tax basis
unless such employees affirmatively take action to opt-out of the automatic
enrollment process. The contributions made under the automatic
enrollment process are invested in the Moderate Premixed Portfolio fund unless
the participants affirmatively choose another investment fund or any combination
of investment funds available under the Plan. The participants have
the option to stop or change their contribution and investment fund elections at
any time.
Participants
who are age 50 or older before the close of the Plan year may elect to make a
catch-up contribution, subject to certain limitations under the IRC ($5,000 per
participant in 2007).
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December
31, 2007 and 2006
Employees
are permitted to roll over balances held in other qualified plans or individual
retirement accounts (“IRAs”) into the Plan, as specified in the plan
document.
Employer
Plan
participants who make tax deferred contributions will receive Company matching
contributions equal to 100% of the first 4% of a participant’s eligible
compensation during the applicable pay period.
The
Company also provides an annual non-elective contribution of 4% of eligible
compensation on behalf of each eligible employee, regardless of individual
participation in the Plan. Eligible employees are not required to
make any contributions to the Plan in order to receive the non-elective
contribution. To be eligible to receive an allocation of the
non-elective contribution, an employee must be employed by the Company or one of
its controlled group members as of December 31 or be on an approved leave of
absence as of such date. Eligible employees will also receive an
allocation of the non-elective contribution if they terminate their employment
with the Company or one of its controlled group members during the plan year due
to retirement, death or disability. The non-elective contribution for
the 2007 plan year was funded by the Company in March 2008, in the amount of
$60,246,829.
The
Company has entered into a master trust agreement with the Halliburton Company
Employee Benefit Master Trust (the “Master Trust”). The Master Trust
was established for the collective investment of certain defined contribution
and defined benefit plans sponsored by the Company or its
affiliates. The Plan maintains a clearing account, which invests in a
short term investment fund to facilitate the payment of benefits and receipt of
contributions to the Plan.
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|
(d)
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Investment
Elections and Transfers
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Contributions
and participant account balances may be directed to one of thirteen funds or a
combination of funds. The available investment funds are the
Aggressive Premixed Portfolio, the Mid Cap Fund, the Conservative Premixed
Portfolio, the Balanced Fund, the Large Cap Value Fund, the Bond Index Fund, the
S&P 500 Index Fund, the Large Cap Growth Fund, the Non-US Equity Fund, the
Moderate Premixed Portfolio, the Small Cap Value Fund, the Stable Value Premixed
Portfolio, and the Halliburton Stock Fund. The assets of the funds are held in
the Master Trust. The Halliburton Stock Fund (“HSF”) was closed to new
investments effective January 1, 2007.
The Plan
allows participants to make transfers of their account balances among the funds,
subject to Plan’s investment transfer policy. The amount of the transfer may be
all or any portion of the participant’s account balance.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December
31, 2007 and 2006
Effective
January 1, 2006, the Plan adopted a new investment transfer policy which places
waiting periods on transfers and reallocations into and out of all of the
investment funds. If a participant makes a transfer or fund
reallocation out of a fund other than the Stable Value Premixed Portfolio, the
participant cannot transfer money into that same fund for up to twenty calendar
days. If funds are transferred or reallocated into the Stable Value
Premixed Portfolio, the number of units that the money represents on the day of
the transfer or reallocation transaction is locked in and cannot be transferred
out of the Stable Value Premixed Portfolio for up to twenty calendar
days. Participants are permitted to reallocate or transfer money into
the Stable Value Premixed Portfolio at any time.
The
Halliburton Company Benefits Committee (the “Benefits Committee”) controls and
manages the operation and administration of the Plan. The Halliburton Company
Investment Committee (the “Investment Committee”) controls and manages the
operation and administration of the Master Trust. State Street Bank and Trust
Company (“State Street”) is the Plan’s trustee and Hewitt Associates LLC is the
record keeper.
A
participant may borrow from their vested account balance a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50% of their vested account
balance (reduced by the highest outstanding loan balance in all Company
sponsored plans in the prior twelve months). A participant may not
have more than one loan outstanding at any time. Loans bear interest
at the current prime rate plus 1% as published in the Wall Street Journal as of
the first day of each month. Loans must be repaid within five years
(ten years for primary residence loan) through payroll deductions and are
collateralized by the participant’s account balance. If a participant
fails to comply with the repayment terms of the loan, the Benefits Committee or
its designee may deem such defaulted loans as a distribution when the loans are
considered uncollectible from the participant.
Participants
are immediately 100% vested in their tax deferred contributions, Company
matching contributions, rollover contributions, and the related
earnings. Participants become fully vested in the non-elective
contributions upon (1) completion of three years of service, (2) reaching the
Normal Retirement Date while employed by the Company, or (3) termination of
employment with the Company due to death or disability. Participants
who terminate prior to becoming fully vested forfeit their nonvested balances in
accordance to the terms of the Plan.
Forfeitures
are used to reduce future Company contributions. The forfeiture
amounts that were used to reduce Company contributions totaled $5,546,646 for
the year ended December 31, 2007. Forfeitures available to reduce
future company contributions were $1,469,514 at December 31, 2007 and $140,368
at December 31, 2006.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December 31,
2007 and 2006
Each
participant or their designated beneficiary may elect to receive a distribution
upon retirement, termination, disability, or death. Direct rollovers
to an IRA or other eligible retirement plans are permitted. All
termination distributions are generally made in lump-sum amounts or pursuant to
a commercial annuity contract. Periodic installments, lump-sum
distributions and commercial annuity contracts are also available to
participants who retire or become disabled, at the participant’s
election. Distributions upon the death of a participant are generally
made in the form of a lump-sum payment or periodic installments, as elected by
the designated beneficiary. Certain joint and survivor annuities are
available upon election to participants who had a balance under the Plan prior
to June 1998, as provided under the terms of the Plan. Distributions
from the HSF may be made in the form of shares of stock or cash.
While
employed, a participant may make in-service withdrawals from his or her
after-tax account or rollover account as defined in the plan
document. In-service withdrawals from all accounts under the Plan are
also permitted upon attainment of age 59-1/2. Further, in-service
withdrawals from a participant’s tax-deferred savings account can be made in the
event of a proven financial hardship, subject to limitations under the
Plan. Certain additional in-service withdrawals are permitted for
account balances transferred from acquired company plans, as defined in the plan
document.
Investment
earnings on participants’ accounts are allocated proportionately based on their
relative account balance in each investment fund.
|
|
(j)
|
Halliburton
Stock Fund
|
Effective
July 1, 2002, the HSF was converted into an Employee Stock Ownership Plan
(“ESOP”). The ESOP is designed to comply with Section 4975(e)(7) of
the Internal Revenue Code and Section 407(d)(6) of ERISA.
The ESOP
has a dividend pass-through election whereby any cash dividends attributable to
Halliburton Company Common Stock held by the ESOP are to be paid by the Company
directly to the Trustee. The participants may elect to receive the
dividends in cash or reinvest it for more units of the HSF. Any cash
dividends received by the Trustee which are attributable to financed stock are
to be used by the Trustee to make exempt loan payments until the exempt loan has
been repaid in full. During 2007 and 2006, there were no loans
related to stock purchases.
Each
participant is entitled to exercise voting rights attributable to the
Halliburton Company Common Stock allocated to his or her account and is notified
by the Trustee prior to the time that such rights are to be
exercised. The Trustee is not permitted to vote any allocated shares
for which instructions have been given by a participant. The Trustee
is required, however, to vote all shares which have not been voted by Plan
participants or beneficiaries.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December
31, 2007 and 2006
Effective
January 1, 2007, the HSF was closed to new investments. No further contributions
or transfers into the HSF will be permitted. Participants will have until
December 31, 2009 to transfer all amounts out of the HSF. Any amounts
not transferred out of the HSF by the end of this sunset period will be
liquidated and invested in an investment fund chosen by the Investment
Committee. However, the Benefits Committee reserves the right to implement
periodic transfers and/or change or accelerate the sunset period at any
time.
The Board
of Directors of the Company may amend, modify, or terminate the Plan at any
time. The Chief Executive Officer of the Company may amend the Plan
if such amendment does not have a significant cost impact on the Company or if
the amendment is required to acquire or maintain the qualified status of the
Plan. No Plan termination is contemplated, but if it should occur,
the accounts of all participants would immediately become fully vested and be
paid in accordance with the terms of the Plan.
|
(2)
|
Significant
Accounting Policies
|
The
accompanying financial statements have been prepared using the accrual basis of
accounting in accordance with generally accepted accounting principles in the
United States of America.
As
described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1
and SOP 94-4-1, Reporting of
Fully Benefit-Responsive Investment Contracts Held by Certain Investment
Companies Subject to the AICPA Investment Company Guide and Defined Contribution
Health and Welfare and Pension Plans (the “FSP”), investment contracts
held by a defined contribution plan are required to be reported at fair
value. However, contract value is the relevant measurement attribute
for that portion of the net assets available for benefits of a defined
contribution plan attributable to fully benefit-responsive investment contracts
because contract value is the amount participants would receive if they were to
initiate permitted transactions under the terms of the plan. As
required by the FSP, the Statement of Net Assets Available for Plan Benefits
presents the fair value of the investment contracts as well as the adjustment of
the fully benefit-responsive investment contracts from fair value to contract
value. The Statement of Changes in Net Assets Available for Plan
Benefits is prepared on a contract value basis.
|
(b)
|
New Accounting Standard
|
In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
157, “Fair Value Measurements” SFAS 157 defines fair value, sets out a
framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements of assets and liabilities. The Plan adopted SFAS 157 as of
January 1, 2008 without material impact on the Statements of Net Assets
Available for Plan Benefits or the Statement of Changes in Net Assets Available
for Plan Benefits.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December
31, 2007 and 2006
|
|
(c)
|
Valuation
of Investments
|
The
investments in all funds except the Stable Value Premixed Portfolio are
presented at fair value, based on the quoted market prices of the underlying
securities within each fund at December 31, 2007 and 2006.
The Plan
invests in cash, cash equivalents and participant loans, which are held by the
Trustee outside of the Master Trust. Cash and cash equivalents are in
a short term investment fund, which is valued at cost, which approximates fair
value. Participant loans are valued at cost, which approximates fair
value.
The
Plan’s proportionate interest in the Master Trust net assets is presented at
fair value with an adjustment from fair value to contract value for fully
benefit-responsive investment contracts.
Cash
equivalents, exchange traded derivative financial instruments, stock securities,
mutual funds, bonds and notes, and all other debt securities held within the
Master Trust are presented at their fair market
value. Common/collective trust funds are stated at the fair market
value of the underlying securities.
The
Stable Value Premixed Portfolio (“SVPP”) is reported at fair value and adjusted
to contract value. Contract value represents the accumulated contributions plus
accrued net earnings, less distributions. Fair value of the investment in the
SVPP is estimated using discounted cash flows. The SVPP invests primarily in
asset-backed contracts that are fully benefit-responsive. These asset-backed
contracts have two components: (1) a portfolio of securities or underlying
assets and (2) a wrap contract. These underlying assets, generally fixed income
securities, are held by an independent trustee for the sole benefit of the fund
and a wrap contract is entered into for a fee with a financial institution to
assure contract value liquidity for plan participant directed withdrawals,
transfers or loans. The underlying assets are valued as described in the
preceding paragraphs of this section. The issuer of the contract (wrap provider)
undertakes to repay the principal amount deposited plus accrued interest less
expenses to fund participant-directed withdrawals, transfers and loans. The
crediting rate of the asset-backed contract is a function of the relationship
between the market value, yield and duration of the underlying assets versus the
contract value. If the positive adjustment for the portion of net assets
attributable to fully benefit-responsive investment contracts from fair value to
contract value increases, the crediting rate at the next reset date will be
negatively impacted and vice versa. Interest rate change is a key factor that
can influence future crediting rates because it impacts the value, yield and
duration of the underlying securities. The contract rate is reset periodically
by wrap providers and cannot be less than zero.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December
31, 2007 and 2006
The net
average yield earned divided by the underlying assets of the wrapped contracts
for 2007 was 6.64% and for 2006 was 4.49%. The net actual interest rate credited
to participants divided by the underlying assets of the wrapped contracts for
2007 was 5.34% and for 2006 was 5.10%.
All of
the asset-backed contracts held by the SVPP are fully participating contracts.
In a fully participating contract, the asset and liability risks may be
transferred from the wrap provider to the fund in the event of a plan
termination or non-participant directed withdrawal, transfer or
loan. The risk of this event happening is not
probable. The wrap provider may terminate a fully benefit-responsive
contract and settle at an amount different from the contract value if the wrap
provider of the fund is unable to meet the terms of the contract.
These
investment funds are exposed to various risks, such as interest rate, market and
credit. Due to these risks, the amounts reported in the Statements of
Net Assets Available for Plan Benefits could be materially affected in the near
term.
|
|
(d)
|
Securities
Transactions and Investment Income
|
The Plan
records interest on cash and cash equivalents and participant loans held outside
of the Master Trust when earned. Purchases and sales of securities
held outside the Master Trust are recorded on the trade-date basis.
Purchases
and sales of securities in the Master Trust are also recorded on the trade-date
basis. Realized gains (losses) on investments sold and unrealized
appreciation (depreciation) for investments of the Master Trust are combined and
presented as Plan’s interest in Master Trust net investment activity on the
Statement of Changes in Net Assets Available for Plan Benefits.
In
addition, investment income of the Master Trust includes interest, dividends,
and other income. Interest income of the Master Trust investments is
recorded when earned. Dividends on the Master Trust investments are
recorded on the ex-dividend date.
|
|
(e)
|
Administrative
Expenses
|
The
Master Trust pays substantially all plan expenses on behalf of the
Plan. Generally, trustee fees, recordkeeping fees, audit fees, and
investment management fees are paid from Master Trust assets and are charged to
the plans participating in the Master Trust. Expenses related to the
direct management of the Master Trust are shared on an equitable basis by the
participating plans. Expenses specifically related to an individual
plan are charged to the assets of the Plan which incurred the
charges. These expenses, totaling $13,594,779 for 2007, are shown as
a separate component in the Statement of Changes in Net Assets Available for
Plan Benefits.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December
31, 2007 and 2006
Benefits
are recorded when paid.
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those
estimates.
|
(3)
|
Investment
Assets Held in the Master Trust
|
Certain
assets of the Plan are combined with the assets of certain other benefit plans
of affiliated companies in the Master Trust. The assets of the Master
Trust are segregated into thirteen funds in which the defined contribution plans
may participate. The combination of the plans’ assets is only for
investment purposes and the plans continue to be operated under their current
plan documents, as amended.
The
Master Trust assets are allocated among participating plans by assigning to each
plan those transactions (primarily contributions, benefit payments, and certain
administrative expenses) which can be specifically identified and allocated
among all plans, in proportion to the fair value of the assets assigned to each
plan, the income and expenses resulting from the collective investment of the
assets.
In April
2007, Halliburton completed the separation of KBR, Inc. (“KBR”) from the
Company. In accordance with the Master Trust agreement and the Employee Matters
agreement between Halliburton and KBR, the assets related to the Brown &
Root, Inc. Employees' Retirement and Savings Plan and Kellogg Brown & Root,
Inc. Retirement and Savings Plan, have been split-off from the Master Trust and
were transferred to KBR by the trustee during February and March 2007. The
amount of assets transferred to KBR totaled $2,060,764,873.
The
following is a summary of net assets as of December 31, 2007 and 2006 and
total net investment activity for the year ended December 31, 2007 and net
appreciation (depreciation) by investment type for the year ended December 31,
2007 of the Master Trust. The Plan’s interest in the Master Trust’s net assets
for the applicable periods are also presented.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December
31, 2007 and 2006
|
Net
Assets
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$ |
145,446,709 |
|
|
$ |
193,438,035 |
|
|
Derivatives
|
|
|
3,037,949 |
|
|
|
2,250,315 |
|
|
Collateral received for
securities loaned
|
|
|
487,268,935 |
|
|
|
638,638,539 |
|
|
U.S. bonds and
notes
|
|
|
1,189,680,353 |
|
|
|
1,798,435,833 |
|
|
Non-U.S. bonds and
notes
|
|
|
87,942,866 |
|
|
|
124,490,738 |
|
|
Halliburton
stock
|
|
|
254,648,218 |
|
|
|
340,448,470 |
|
|
Other U.S.
stock
|
|
|
648,856,042 |
|
|
|
1,157,918,463 |
|
|
Non-U.S. stock
|
|
|
601,523,748 |
|
|
|
672,023,819 |
|
|
Common/collective trust
funds
|
|
|
515,805,239 |
|
|
|
770,696,209 |
|
|
Mutual funds
|
|
|
155,334,114 |
|
|
|
262,876,450 |
|
|
Securities
loaned
|
|
|
|
|
|
|
|
|
|
U.S. bonds and
notes
|
|
|
173,033,859 |
|
|
|
391,476,097 |
|
|
Other U.S.
stock
|
|
|
282,154,610 |
|
|
|
188,830,671 |
|
|
Non-U.S. stock
|
|
|
20,635,133 |
|
|
|
43,565,784 |
|
|
Total
investments
|
|
|
4,565,367,775 |
|
|
|
6,585,089,423 |
|
|
Receivables
|
|
|
|
|
|
|
|
|
|
Receivables for investments
sold
|
|
|
216,993,811 |
|
|
|
383,326,380 |
|
|
Dividends
|
|
|
1,580,433 |
|
|
|
2,516,104 |
|
|
Interest
|
|
|
13,614,722 |
|
|
|
22,913,222 |
|
|
Other
|
|
|
378,549 |
|
|
|
660,036 |
|
|
Total
receivables
|
|
|
232,567,515 |
|
|
|
409,415,742 |
|
|
Total assets
|
|
|
4,797,935,290 |
|
|
|
6,994,505,165 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Payable for investments
purchased
|
|
|
420,765,363 |
|
|
|
702,465,690 |
|
|
Obligation for collateral
received for securities loaned
|
|
|
487,268,935 |
|
|
|
638,638,539 |
|
|
Other payables
|
|
|
7,769,881 |
|
|
|
7,209,486 |
|
|
Total
liabilities
|
|
|
915,804,179 |
|
|
|
1,348,313,715 |
|
|
Net
Assets at fair value
|
|
|
3,882,131,111 |
|
|
|
5,646,191,450 |
|
|
Adjustments from fair value to
contract value for fully
|
|
|
|
|
|
|
|
|
|
benefit-responsive investment
contracts
|
|
|
(20,751,607 |
) |
|
|
(19,493,698 |
) |
|
Net
Assets
|
|
$ |
3,861,379,504 |
|
|
$ |
5,626,697,752 |
|
|
Plan’s
interest in Master Trust net assets at fair value
|
|
$ |
3,754,033,396 |
|
|
$ |
3,474,261,911 |
|
|
Adjustments from fair value to
contract value for fully
|
|
|
|
|
|
|
|
|
|
benefit-responsive investment
contracts
|
|
|
(20,742,658 |
) |
|
|
(11,274,432 |
) |
|
Plan’s
interest in Master Trust net assets
|
|
$ |
3,733,290,738 |
|
|
$ |
3,462,987,479 |
|
|
Plan’s
percentage interest in Master Trust net assets
|
|
|
96.68 |
% |
|
|
61.55 |
% |
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December
31, 2007 and 2006
|
|
|
Year
ended
|
|
|
|
|
December
31,
|
|
|
Net
Investment Activity
|
|
2007
|
|
|
|
|
|
|
|
Net
investment appreciation
|
|
$ |
263,450,670 |
|
|
Investment
income
|
|
|
122,041,656 |
|
|
Expenses
|
|
|
(16,773,532 |
) |
|
Net investment
activity
|
|
$ |
368,718,794 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Appreciation (Depreciation) by Investment Type
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$ |
(2,604 |
) |
|
Derivatives
|
|
|
(1,261,242 |
) |
|
U.S.
bonds and notes
|
|
|
930,082 |
|
|
Non-U.S.
bonds and notes
|
|
|
(292,475 |
) |
|
Halliburton
stock
|
|
|
50,921,791 |
|
|
U.S.
stock
|
|
|
65,856,135 |
|
|
Non-U.S.
stock
|
|
|
94,419,807 |
|
|
Common/collective
trust funds
|
|
|
32,215,987 |
|
|
Mutual
funds
|
|
|
2,469,116 |
|
|
Other
investments
|
|
|
18,194,073 |
|
|
Net investment
appreciation
|
|
$ |
263,450,670 |
|
The
Master Trust makes use of several investment strategies involving limited use of
derivative investments. The Master Trust’s management, as a matter of
policy and with risk management as their primary objective, monitors risk
indicators such as duration and counter-party credit risk, both for the
derivatives themselves and for the investment portfolios holding the
derivatives. Investment managers are allowed to use derivatives for
such strategies as portfolio structuring, return enhancement, and hedging
against deterioration of investment holdings from market and interest rate
changes. Derivatives are also used as a hedge against foreign
currency fluctuations. The Master Trust’s management does not allow
investment managers for the Master Trust to use leveraging for any investment
purchase. Derivative investments are stated at estimated fair market
values as determined by quoted market prices. Gains and losses on
such investments are included in the net investment appreciation of the Master
Trust.
Certain
investment managers of the Master Trust participate in a securities lending
program administered by State Street. The transfer of assets under State
Street’s securities lending program are secured borrowings with pledge of
collateral. The fair market value of the securities loaned as of December 31,
2007 and 2006 was $475,823,601 and $623,872,552
respectively. The cash and non-cash collateral received for securities loaned as
of December 31, 2007 and 2006 was $487,268,935 and $638,638,539 respectively. As
of December 31, 2007 and 2006, none of the collateral received for securities
loaned has been sold or repledged.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
Notes to
Financial Statements
December
31, 2007 and 2006
The
following table represents the fair value of individual investment funds held
under the Master Trust that exceed 5% of the Plan’s net assets as of
December 31, 2007 and 2006:
|
|
|
2007
|
|
|
2006
|
|
|
Participation
in Master Trust, at fair value:
|
|
|
|
|
|
|
|
Stable Value Premixed
Portfolio
|
|
$ |
1,004,396,569 |
|
|
$ |
1,044,544,517 |
|
|
General Investment
Fund
|
|
|
865,865,828 |
|
|
|
798,339,467 |
|
|
Equity Investment
Fund
|
|
|
343,219,884 |
|
|
|
279,584,740 |
|
|
Halliburton Company Stock
Fund
|
|
|
255,991,932 |
|
|
|
272,103,020 |
|
|
Large Cap Value
Fund
|
|
|
232,784,027 |
|
|
|
240,826,596 |
|
|
Non-U.S. Equity
Fund
|
|
|
267,280,156 |
|
|
|
180,262,762 |
|
|
S&P 500 Index
Fund
|
|
|
191,944,780 |
|
|
|
195,113,853 |
|
The IRS
informed the Company by a letter dated March 4, 2004, that the Plan and related
trust were designed in accordance with the applicable provisions of the
IRC. The Plan has been amended and restated since receiving the
letter; however, the plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable requirements of
the IRC. Therefore, the plan administrator believes that the Plan is
qualified and the related trust is tax-exempt as of December 31, 2007 and
2006.
|
(6)
|
Related-Party
Transactions
|
The Plan,
through its participation in the Master Trust, may invest in investment
securities issued and/or managed by the Trustee and asset
managers. Additionally, the Master Trust invests in Halliburton
Company’s common stock through the HSF. These entities are considered
parties-in-interest to the Plan. These transactions are covered by an
exemption from the prohibited transaction provisions of ERISA and the
IRC.
HALLIBURTON
RETIREMENT AND SAVINGS PLAN
EIN:
75-2677995
PLAN #
001
Schedule H,
Line 4i – Schedule of Assets (Held at End of Year)
December
31, 2007
|
(a)
|
|
(b)
|
(c)
|
|
(d)
|
|
|
(e)
|
|
| |
|
|
Description
of investments,
|
|
|
|
|
|
|
| |
|
Identity
of issue,
|
including
maturity date, rate
|
|
|
|
|
|
|
| |
|
borrower,
lessor
|
of
interest, collateral, par
|
|
|
|
|
Current
|
|
| |
|
or
similar party
|
or
maturity value
|
|
Cost
|
|
|
value
|
|
| |
* |
|
State Street Bank
and
|
SSBTC short term
investment fund
|
|
|
|
|
|
|
| |
|
|
Trust
Company
|
|
|
|
** |
|
|
$ |
2,077,518 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
* |
|
Halliburton
Company
|
Investment in net
assets of Halliburton
|
|
|
|
|
|
|
|
|
| |
|
|
Employee Benefit
|
Company Employee
Benefit
|
|
|
|
|
|
|
|
|
| |
|
|
Master
Trust
|
Master
Trust
|
|
|
** |
|
|
|
3,754,033,396 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
* |
|
Participant
Loans
|
Loans issued at
interest rates between
|
|
|
|
|
|
|
|
|
| |
|
|
|
5.0% and 11.5% with
various
|
|
|
|
|
|
|
|
|
| |
|
|
|
maturities
|
|
|
** |
|
|
|
60,078,056 |
|
| |
|
|
|
|
|
|
|
|
|
$ |
3,816,188,970 |
|
*Column (a) indicates each identified
person/entity known to be a party-in-interest.
** Cost omitted for participant
directed investments.
See
accompanying report of independent registered public accounting
firm.
Signature
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Halliburton
Company Benefits Committee of the Halliburton Retirement and Savings Plan has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: June
20, 2008
By: /s/ Gilbert
Chavez
Gilbert Chavez, Chairperson of the
Halliburton
Company Benefits
Committee