SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from to .
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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
4100 Clinton Drive
Building 3, Room 1208
Houston, TX 77020
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office.
Halliburton Company, Inc.
3600 Lincoln Plaza
500 N. Akard
Dallas, Texas 75201
REQUIRED INFORMATION
The following financial statements prepared in accordance with the
financial reporting requirements of ERISA and exhibits are filed for
the Halliburton Retirement and Savings Plan:
Financial Statements and Schedule
---------------------------------
Report of Independent Public Accountants - Arthur Andersen LLP
Statements of Net Assets Available for Plan Benefits as of
December 31, 2000 and 1999
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2000
Notes to Financial Statements
Supplemental Schedule of Assets Held for Investment Purposes
as of December 31, 2000
Exhibit
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Consent of Independent Public Accountants - Arthur Andersen
LLP (Exhibit 23)
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the 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 28, 2001
By /s/ Margaret E. Carriere
--------------------------------------
Margaret E. Carriere, Chairperson
of the Halliburton Company
Benefits Committee
Halliburton Retirement and Savings Plan
Financial Statements
As of December 31, 2000 and 1999,
And Supplemental Schedule
As of December 31, 2000
Together with Report of Independent Public Accountants
Halliburton Retirement and Savings Plan
Index to Financial Statements
Page(s)
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Report of Independent Public Accountants 1
Statements of Net Assets Available for Plan Benefits
as of December 31, 2000 and 1999 2
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2000 3
Notes to Financial Statements 4-10
Supplemental Schedule of Assets Held for Investment Purposes
as of December 31, 2000 11
Report of Independent Public Accountants
To the Benefits Committee of the
Halliburton Retirement and Savings Plan:
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, 2000 and 1999, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 2000. These
financial statements and the supplemental schedule referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and supplemental schedule based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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 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, 2000 and 1999, and the changes in its net assets available for
plan benefits for the year ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes 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 has been subjected to the auditing procedures
applied in our audits 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/ Arthur Andersen LLP
-------------------------
Arthur Andersen LLP
Dallas, Texas,
April 25, 2001
Halliburton Retirement and Savings Plan
Statements of Net Assets Available for Plan Benefits
As of December 31, 2000 and 1999
2000 1999
---------------- ----------------
ASSETS:
Cash $ 1,390,856 $ 1,690,085
Company contributions receivable 14,264,426 2,945,966
Plan participants' contributions receivable 2,325,565 89,962
Participation in Master Trust, at fair value 3,834,641,353 3,987,631,147
Participant loans 82,027,397 72,404,580
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Total assets 3,934,649,597 4,064,761,740
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LIABILITIES:
Payable to other plan (4,475,405) -
---------------- ----------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 3,930,174,192 $ 4,064,761,740
================ ================
The accompanying notes are an integral part of these financial statements.
2
Halliburton Retirement and Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 2000
ADDITIONS:
Contributions-
Company $ 68,441,733
Plan participants 115,330,165
Transfers from other plans 24,298,723
Investment activity-
Allocation of Master Trust net investment activity 25,394,674
Interest and dividends 721,639
Interest on loans to participants 6,790,257
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Total additions 240,977,191
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DEDUCTIONS:
Benefits paid to participants (352,496,337)
Transfer to other plans (5,261,291)
Administrative expenses and other (17,807,111)
-----------------
Total deductions (375,564,739)
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NET DECREASE IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (134,587,548)
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year 4,064,761,740
-----------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $ 3,930,174,192
=================
The accompanying notes are an integral part of this financial statement.
3
Halliburton Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
1. Description of Plan:
The Halliburton Retirement and Savings Plan (the "Plan") is a defined
contribution profit sharing pension plan for certain qualified employees of
Halliburton Company and subsidiaries (the "Company"). The Plan was established
in accordance with Sections 401(a) and 401(k) of the Internal Revenue Code
("IRC") and is subject to the provisions of the Employee Retirement Income
Security Act of 1974. 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.
Plan Mergers
On December 31, 1998, the Plan received the net assets of The M.W. Kellogg
Company Savings and Investment Plan ("Kellogg"), Dresser Industries, Inc.
Retirement Savings Plan-A ("RSPA"), and the Dresser Industries, Inc. Retirement
Savings Plan-B ("RSPB") in connection with the merger of those plans with the
Plan. Additionally, the Plan received net assets from the transfer of certain
participants' balances from the Brown & Root, Inc. Employees' Retirement and
Savings Plan ("B&R Plan"). These transactions are referred to as the Plan
Mergers. The former participants of these plans now participate in the Plan and
their participant accounts have been transferred to the Plan.
Assets of the Plan related to pre-Plan Merger participants and former
participants in the B&R Plan were combined with assets of certain other benefit
plans of the Company in the Halliburton Company Employee Benefit Master Trust
(the "Master Trust") for the entire plan year. Assets related to the former
Kellogg, RSPA, and RSPB plans continued to be invested in the investment
vehicles of those predecessor plans until April 1, 1999. The investment assets
of these former plans were transferred to the Master Trust as of that date.
Effective July 6, 2000, the C.F. Braun, Inc. Select Savings Plan ("Braun Plan")
merged with the Plan. In accordance with the merger, the net assets of the Braun
Plan were transferred to the Master Trust.
Plan Spin-off
Effective September 1, 2000, the Plan spun off certain participants to the
National-Oil Well Retirement and Thrift Plan ("NOW Plan") based upon the
purchase and sale agreement signed by the Company and National-Oil Well, L.P. on
September 6, 2000. Approximately $4.4 million in assets were transferred to the
NOW Plan on January 2, 2001, from the Master Trust.
Operations
Eligibility
Certain employees of the Company are eligible for participation in the Plan upon
their date of hire.
Contributions
Participants may elect to contribute to the tax deferred savings and/or
after-tax features of the Plan through periodic payroll deductions. These
contributions are limited to an aggregate of 15% of the participant's eligible
earnings of up to $170,000; the total amount of participant tax deferred savings
contributions is limited to $10,500 and $10,000 for 2000 and 1999, respectively.
Any contributions in excess of the $10,500 limit are automatically made to the
4
Halliburton Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
participant's after-tax account. The Plan participants who contribute also
receive Company matching contributions equal to 100% of the first 4% of a
participant's compensation. The Company may make annual profit sharing
contributions to participants on a tax-deferred basis, based on Company
performance. Participants are not required to have contributed to the Plan to be
eligible for such a contribution. The participant's share of any discretionary
profit sharing contribution is based on a percentage of their eligible pay for
the year.
Eligible employees who participated in a qualified savings or retirement plan of
a former employer, may be able to roll over tax-deferred contributions and
earnings from their former plan into the Plan.
Upon attainment of either the normal retirement age (65) or early retirement age
(55 or 50 during specified periods), participants in the Halliburton Retirement
Plan (a defined benefit pension plan sponsored by the Company) may elect to
transfer their vested benefits to the Plan. Such transfers are restricted as to
the investment elections in which they may be invested. The amount of the
benefit that may be rolled over is the actuarially determined amount to be
received by the participant. Transfers may be made during any month of the year.
Cash Accounts
The Plan maintains cash accounts to facilitate the payment of benefits and
receipt of contributions.
Investment Elections
Contributions and participant account balances may be directed to one of eleven
funds or a combination of funds. The assets of the funds are held in the Master
Trust (see Note 3). One of the investment funds invests primarily in Halliburton
Company stock, the Halliburton Stock Fund (the "HSF"). Participants'
contributions to the HSF are limited to 15% of their total contributions. The
Plan allows participants to make daily transfers of their account balances among
the funds. The amount of the transfer may be all or any portion of the
participant's account balance, subject to certain limitations on transfers to
the HSF.
Participant Loans
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. A participant may have up to two loans outstanding at any time. Loans
bear interest at the current prime rate plus one percent as published in the
Wall Street Journal. Loans must be repaid within 5 years (10 years for primary
residence loan) through payroll deductions and are collateralized by the
participant's account balance.
Vesting
Participants' contributions to their accounts and the earnings thereon are fully
vested when made or earned. Participants employed by the Company on December 31,
1998, are fully vested in all Company matching and profit sharing contributions.
Participants hired after December 31, 1998, are fully vested in all Company
matching and profit sharing contributions after completing one year of service.
Participants who terminate prior to obtaining one year of service forfeit their
non-vested balances. Participants not employed by the Company at December 31,
1998, are subject to the vesting provisions of the predecessor plan document.
5
Halliburton Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
The nonvested portion of account balances of participants who terminated prior
to December 31, 1998, is forfeitable. The nonvested portion is forfeited at the
end of the fifth year following termination unless the participant is rehired
within five years of termination. Such forfeitures are used to reduce future
Company matching contributions. As of December 31, 2000, the forfeitures were
$448,006; forfeitures were not used to reduce Company matching contributions in
2000.
Distributions
Each participant, or their designated beneficiary, may elect to receive a
distribution upon retirement, termination, or due to disability or death.
Certain participants' balances related to prior plan mergers may be withdrawn at
any time. Direct rollovers to an IRA or other qualified plan are permitted. All
distributions are made in lump-sum amounts or in periodic installments, at the
participant's election. Distributions from the HSF may be made in the form of
shares of stock or cash. Each participant may elect to receive an in-service
withdrawal of their after-tax contributions.
Administration
At December 31, 2000, State Street Bank and Trust Company ("State Street") was
the Plan's trustee, and Hewitt Associates LLC was the recordkeeper.
Investment Earnings
Investment earnings on participants' accounts are allocated proportionately
based on their relative account balance in each investment fund. Such earnings
are taxable to participants at the time of distribution from the Plan.
Plan Termination
The Board of Directors of the Company may amend, modify, or terminate the Plan
at any time. No such termination is contemplated, but if it should occur, the
accounts of all participants would be immediately fully vested and paid in
accordance with the terms of the Plan.
2. Significant Accounting Policies:
Basis of Accounting
The accompanying financial statements are prepared using the accrual basis of
accounting.
Investment Valuation and Income Recognition
Prior to April 1, 1999, certain participants' accounts were invested in mutual
funds that were stated at fair value, except for those accounts invested in an
investment contract, which was valued at contract value, and Halliburton Company
stock. Shares of mutual funds were valued at quoted market prices. Halliburton
Company stock was valued at its year-end unit closing price (comprised of
year-end market price plus uninvested cash). Purchases and sales of investments
were recorded on a trade-date basis. Dividends were recorded on the ex-dividend
date. See Note 3 Master Trust for 2000 investment valuation and income
recognition.
6
Halliburton Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
Allocation of Master Trust Net Investment Activity
The allocation of Master Trust net investment activity represents the Plan's
share of the net investment income or loss on investments held by the Master
Trust determined by the Plan's allocable share of the net assets of the Master
Trust. Net investment income or loss is the realized net gain or loss from
investments sold, change in the unrealized net gain or loss on investments,
dividend income, and interest income of the Master Trust.
Administrative Expenses
Administrative expenses which are related to compliance and operational
activities as defined by the Department of Labor may be charged against the plan
assets at the discretion of the plan administrator and in accordance with the
terms of the Plan.
Payment of Benefits
Benefits are recorded when paid.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.
Recently Issued Accounting Pronouncements
On September 15, 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, "Accounting For and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters" (the "SOP")
which eliminates the requirement for a defined contribution plan to disclose
participant directed investment programs by investment option and certain other
previously required disclosures. The Plan adopted the SOP in 1999.
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments and hedging activities. It requires that an
entity recognize all derivatives in the statement of financial position and
measure those instruments at fair value. In 1999, the FASB issued SFAS No. 137
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133," which defers the effective date for
one year. The Plan must implement SFAS No. 133 for fiscal year 2001, and
management does not expect a material impact on the Plan's net assets or net
investment income.
3. Master Trust:
At December 31, 2000, 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 plans may
participate. The Plan participates in eleven of these funds. The combination of
the plans' assets is only for investment purposes, and each plan continues to be
operated under its current plan document. All investments of the Master Trust
are held by State Street.
7
Halliburton Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
The funds within the Master Trust hold bank, insurance and investment contracts
providing a fully benefit-responsive feature. These investments are stated at
contract value, which approximates fair value. Where the Master Trust owns the
underlying securities of asset-backed investment contracts, the contracts are
stated at fair market value of the underlying securities plus an adjustment for
the difference between fair market value of the underlying securities and
contract value. Contract value represents the principal balance of the
investment plus accrued interest at the stated contract rate, less payments
received and contract charges by the insurance company or bank.
Cash equivalents, derivative financial instruments, stock securities, bonds and
notes, and all other debt securities are presented at their quoted market value.
Realized and unrealized changes in market values are recognized in the period in
which the changes occur.
Real estate related investments consist of real estate mortgages and investments
in Real Estate Investment Trusts. Real estate mortgages are stated at cost plus
accrued interest less payments received.
All investment transactions are accounted for on the trade-date basis in
accordance with accounting principles generally accepted in the United States.
The Master Trust investment activity is included in the summary statements
below.
The following are the statements of net assets as of December 31, 2000 and 1999,
and the statement of changes in net assets of the Master Trust for the year
ended December 31, 2000 (dollar amounts in thousands):
Statements of Net Assets 2000 1999
------------------------ --------------- --------------
Cash and equivalents $ 359,903 $ 376,319
Receivables 40,740 62,024
Asset-backed investment contracts (5,819) 10,564
U.S. corporate and government bonds and notes 2,154,126 1,837,434
Non-U.S. bonds and notes 255,764 189,126
Non-U.S. stock 525,642 645,146
Halliburton Company stock 153,963 178,766
Insurance investment contracts 17,244 46,557
Pooled equity index funds 7,232 12,142
Other U.S. stock 1,231,674 1,432,116
Pooled bond funds 50,798 20,290
Real estate related investments 5,347 5,395
Investments in mutual funds 735,210 629,697
Payables (557,896) (219,308)
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Net assets of the Master Trust $ 4,973,928 $ 5,226,268
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Plan dollar value interest $ 3,834,641 $ 3,987,631
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Plan percent interest 77.09% 76.30%
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8
Halliburton Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
Statement of Changes in Net Assets
Participating plans' net assets, beginning of year $ 5,226,268
Net realized gain 267,831
Net change in unrealized gain (435,043)
Net investment income 179,849
Receipts from participating plans 1,650,914
Withdrawals by participating plans (1,915,891)
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Participating plans' net assets, end of year $ 4,973,928
==============
Net Appreciation (Depreciation) by Type
Cash and equivalents $ 1,336
U.S. corporate and government
bonds and notes 18,745
Non-U.S. bonds and notes (5,200)
Non-U.S. stock (79,552)
Halliburton Company stock (10,533)
Pooled equity index funds (3,159)
Other U.S. stock (65,347)
Investments in mutual funds (22,108)
Other investments (1,394)
--------------
Total depreciation $ (167,212)
==============
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 statement of changes in
net assets of the Master Trust.
4. Investments:
Individual investments in excess of 5% of net assets available for plan benefits
are as follows:
2000 1999
-------------------- --------------------
Participation in Master Trust, at fair value-
Fixed Investment Fund $ 1,112,930,458 $ 1,151,940,688
Equity Investment Fund 371,753,993 448,339,013
General Investment Fund 1,248,585,841 1,448,017,358
S&P 500 Index Fund 364,789,888 350,159,900
9
Halliburton Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
5. Tax Status:
The Internal Revenue Service has determined and informed the Company by letter
dated April 24, 1998, that the Plan and related trust are designed in accordance
with the applicable sections of the IRC. The Plan has been amended since
receiving the determination letter. However, management believes that the Plan
is currently designed and operating in compliance with the applicable
requirements of the IRC.
6. Related-Party Transactions:
State Street is the trustee defined by the Plan. The assets of the Plan are held
by the Master Trust, of which State Street is also the trustee. Additionally,
the Master Trust invests in the HSF. Therefore, State Street, the Master Trust,
the Company, and the participants of the Plan qualify as parties-in-interest.
7. Subsequent Event:
On January 30, 2001, the Company executed a definitive agreement to sell Dresser
Equipment Group ("DEG") to an investor group consisting of First Reserve
Corporation, Odyssey Investment Partners, LLC and members of the existing DEG
management team (the "Buyers").
Effective April 10, 2001, approximately 3,000 participants and their balances
were scheduled to be transferred out of the Plan in June 2001 into a similar
plan established by the Buyers.
10
Halliburton Retirement and Savings Plan
Supplemental Schedule of Assets Held for Investment Purposes
As of December 31, 2000
EIN: 75-2677995
Plan #: 001
(a) (b) (c) (e)
Identity of Issue, Borrower, Current
Lessor, or Similar Party Description of Investment Value
- -------- ------------------------------ ------------------------------------------- ------------------
* State Street Bank and Trust
Company Cash $ 1,390,856
* Halliburton Company Employee Investment in Net Assets of Halliburton
Benefit Master Trust Company Employee Benefit Master Trust 3,834,641,353
* Participant Loans Loans issued at interest rates between 6%
and 11.5% 82,027,397
* Column (a) indicates each identified person/entity known to be a
party-in-interest.
This supplemental schedule lists assets held for investment purposes at December
31, 2000, as required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure.
11
Exhibit 23
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K, into the Company's previously filed
Registration Statement File No. 333-55747.
/s/ Arthur Andersen LLP
-------------------------
Arthur Andersen LLP
Dallas, Texas,
June 22, 2001