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, 2006.
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
Savings Plan
10200
Bellaire Blvd.
Building
91, Room 2NE18
Houston,
TX 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 Savings Plan:
Financial
Statements and Supplemental
Schedule
Report
of Independent Registered Public
Accounting Firm
Statements
of Net Assets Available for
Plan Benefits – December 31, 2006 and 2005
Statement
of Changes in Net Assets
Available for Plan Benefits – Year ended December 31, 2006
Notes
to Financial Statements –
December 31, 2006 and 2005
Supplemental
Schedule H, Line 4i –
Schedule of Assets (Held at End of Year) – December 31, 2006
Signature
Exhibit
Consent
of Harper & Pearson
Company, P.C. (Exhibit 23.1)
HALLIBURTON
SAVINGS PLAN
Table
of Contents
|
Page
|
|
|
Financial
Statements
|
|
|
Report
of Independent Registered Public Accounting Firm
|
1
|
|
Statements
of Net Assets Available for Plan Benefits
|
|
|
December
31, 2006 and 2005
|
2
|
|
Statement
of Changes in Net Assets Available for Plan Benefits
|
|
|
Year
ended December 31, 2006
|
3
|
|
Notes
to Financial Statements
|
|
|
December
31, 2006 and 2005
|
4-14
|
|
Supplemental
Schedule
|
|
|
Schedule
H, Line 4i – Schedule of Assets (Held at End of Year)
|
|
|
December
31, 2006
|
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
Savings Plan
Houston,
Texas
We
have
audited the accompanying statements of net assets available for plan benefits
of
the Halliburton Savings Plan (the “Plan”) as of December 31, 2006 and 2005, and
the related statement of changes in net assets available for plan benefits
for
the year ended December 31, 2006. 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). 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, 2006 and 2005, and the changes in its net assets available for
plan
benefits for the year ended December 31, 2006 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
19,
2007
1
HALLIBURTON
SAVINGS PLAN
Statements
of Net Assets Available for Plan Benefits
December
31, 2006 and 2005
|
2006
|
2005
|
|||||||
|
Assets
|
||||||||
|
Investments:
|
||||||||
|
Cash
and cash
equivalents
|
$ |
4,448
|
$ |
2,077
|
||||
|
Plan’s
interest in Master Trust
at fair value (see Note 2)
|
4,089,758
|
3,805,411
|
||||||
|
Participant
loans
|
97,696
|
85,180
|
||||||
|
Total
investments
|
4,191,902
|
3,892,668
|
||||||
|
Net
assets available for plan benefits at fair value
|
4,191,902
|
3,892,668
|
||||||
|
Adjustment
from fair value to
contract value for fully
|
||||||||
|
benefit-responsive
investment
contracts
|
(4,597 | ) | (5,073 | ) | ||||
|
Net
assets available for plan benefits
|
$ |
4,187,305
|
$ |
3,887,595
|
||||
See
accompanying notes to financial statements.
2
HALLIBURTON
SAVINGS PLAN
Statement
of Changes in Net Assets Available for Plan Benefits
Year
Ended December 31, 2006
|
Additions:
|
||||
|
Investment
income,
net:
|
||||
|
Plan’s
interest in Master
Trust investment gain
|
$ |
385,754
|
||
|
Interest
on loans to
participants
|
6,354
|
|||
|
Total
investment
income
|
392,108
|
|||
|
Contributions:
|
||||
|
Company,
net of
forfeitures
|
63,046
|
|||
|
Plan
participants
|
91,688
|
|||
|
Rollovers
|
8,442
|
|||
|
Total
contributions
|
163,176
|
|||
|
TOTAL
ADDITIONS
|
555,284
|
|||
|
Deductions:
|
||||
|
Benefits
paid to
participants
|
247,239
|
|||
|
Investment
management fees and
administrative expenses
|
8,335
|
|||
|
TOTAL
DEDUCTIONS
|
255,574
|
|||
|
NET
INCREASE
|
299,710
|
|||
|
NET
ASSETS AVAILABLE FOR PLAN BENEFITS
|
||||
|
Beginning
of year
|
3,887,595
|
|||
|
End
of year
|
$ |
4,187,305
|
||
See
accompanying notes to financial
statements.
3
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
|
(1)
|
Description
of the Plan
|
The
Halliburton 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.
|
|
(a)
|
Eligibility
|
Employees
of the Company are eligible for participation in the Plan upon completion
of
three months of service except those who are among the following ineligible
populations: (1) nonresident aliens with no earned income from the Company
from
sources within the United States; (2) employees who are eligible to participate
in any other 401(k) plan of the Company or a member of its controlled group;
(3)
leased employees or independent contractors as defined in the plan document;
(4)
employees covered by a collective bargaining agreement unless the Company
has
specifically extended the participation to the employee group, or (5) employees
employed by an operation located in Puerto Rico. The Company has
specifically extended participation to certain employee groups covered by
a
collective bargaining agreement with the Bentonite (Colony) Union representing
the majority of the collective bargaining members in the Plan.
|
|
(b)
|
Contributions
|
Participants
may elect to contribute to the tax deferred savings and/or after tax savings
features of the Plan through periodic payroll
deductions. Participants may contribute up to 25% of their eligible
earnings on a pre-tax basis and up to another 25% of their eligible earnings
on
an after-tax basis. The total amount of a participant’s tax deferred
savings contributions was limited to $15,000 for 2006 and the 2006 limit
for
eligible earnings was $220,000. Any contributions in excess of the
$15,000 limit are automatically made to the participant’s after-tax
account. The Company makes matching contributions and fixed company
contributions to certain groups of participants based on separate formulas
set
forth in the collective bargaining agreements as defined in the plan
document.
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 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.
4
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
|
|
(c)
|
Plan
Accounts
|
The
Company has entered into a master trust agreement known as 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.
|
|
(d)
|
Investment
Elections and
Transfers
|
Contributions
and participant account balances may be directed to one of thirteen funds
or a
combination of funds. The assets of the funds are held in the Master
Trust (See Note 3). Participants may direct up to a maximum of 15
percent of their contributions to the Halliburton Stock Fund (“HSF”) (See Note
7).
The
Plan
allows participants to make daily transfers of their account balances among
the
funds subject to the Plan’s investment transfer policy. The amount of
the transfer may be all or any portion of the participant’s account
balance.
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.
|
|
(e)
|
Administration
|
The
Halliburton Company Benefits Committee (the “Committee”) controls and
manages the operation and administration of the Plan. State Street
Bank and Trust Company (“State Street”) is the Plan’s trustee and Hewitt
Associates LLC is the record keeper.
|
|
(f)
|
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 (reduced by the highest outstanding
loan balance in all Company sponsored plans in the prior twelve months) or
50%
of their vested account balance. 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 the month. Loans must be repaid within five years (ten years for
primary residence loans) 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 Committee or its designee may deem
such defaulted loans as a distribution when the loans are considered
uncollectible from the participant.
5
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
|
|
(g)
|
Vesting
|
Participants
are immediately 100% vested in their tax deferred contributions, after-tax
contributions, rollover contributions and the related
earnings. Generally, except as provided in the provisions of the plan
document, the participant’s interest in the matching contributions and the
related earnings shall become fully vested after the completion of five years
of
service.
Participants,
who terminate before becoming fully vested, will forfeit the nonvested portion
of their account balance in accordance with the terms of the Plan and collective
bargaining agreement, as applicable.
Forfeitures
are used to reduce future Company contributions. The forfeiture
amounts that were used to reduce Company contributions were $61,083 for the
year
ended December 31, 2006. Forfeitures available to reduce future
company matching contributions were $837 and $0 as of December 31, 2006 and
2005, respectively.
|
|
(h)
|
Distributions
|
Each
participant or their designated beneficiaries 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 distributions are made in lump-sum amounts or in
periodic installments, at the participant’s election. Distributions
from the HSF may be in the form of shares of stock or cash.
While
employed, a participant may make one in-service withdrawal of $500 or more
from
his or her after-tax account during a plan year. 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
pre-tax account, rollover account and after-tax 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.
|
|
(i)
|
Investment
Earnings
|
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.
6
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
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 2006 and 2005, 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 those shares which have not been voted by Plan
participants or beneficiaries.
|
|
(k)
|
Plan
Termination
|
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
|
|
|
(a)
|
Basis
of Accounting
|
The
accompanying financial statements have been prepared using the accrual basis
of
accounting in accordance with the 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.
7
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
The
Plan
has adopted the financial statement presentation and disclosure requirements
effective December 31, 2006 and retroactively restated the Statement of Net
Assets Available for Plan Benefits for the periods presented. The
effect of adopting the FSP had no impact on net assets which have been
historically presented at contract value.
|
|
(b)
|
Valuation
of Investments
|
The
Plan
invests in cash and cash equivalents and participant loans, which are held
by
the Trustee outside of the Master Trust. Cash and cash equivalents
are 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 (See Note 3) is
presented at fair value with an adjustment from fair value to contract value
for
fully benefit-responsive investment contracts.
Cash
equivalents, derivative financial instruments, stock securities, mutual funds,
bonds and notes, and all other debt securities held within the Master Trust
are
presented at their quoted market value. Common/collective trust funds
are stated at the fair market value of the underlying securities.
The
Master Trust’s investment in the Pooled Equity Fund and Pooled Fixed Income Fund
represents the unitized values of certain equity managers’ accounts on a
combined basis. Each manager’s account is valued daily. A
unit price is calculated for each manager by dividing the total value of
the
manager’s account by the total number of units in existence for that
manager. Net income and realized/unrealized investment gains and
losses by each manager are passed through to the investment options through
the
managers’ unit price.
The
Stable Value Premixed Portfolio 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. Pursuant to the contract, 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.
8
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
The
net
weighted average yield earned on the Stable Value Premixed Portfolio, which
is
different from the interest rate credited to participants, by the entire
fund
for 2006 was 2.28% and for 2005 1.99%. The net weighted interest rate
credited to participants in the fund for 2006 was 5.03% and for 2005 was
4.79%.
All
of
the asset-backed contracts held by the Stable Value Premixed Portfolio 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 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.
|
|
(c)
|
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 investment gain 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.
|
|
(d)
|
Administrative
Expenses
|
All
plan
expenses, other than those elected to be paid by the Company, are paid by
the
Master Trust on behalf of the Plan. Generally, trustee fees,
recordkeeping fees, audit fees, and investment management fees, to the extent
not elected to be paid by the Company, 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, to the extent not paid by the Company, are charged to the
assets of the Plan which incurred the charges. In 2006, the Company
elected to pay certain expenses specifically related to the Plan. The
total expenses paid by the Master Trust on behalf of the Plan were $8,335
for
2006 which is shown as a separate component of the Statement of Changes in
Net
Assets Available for Plan Benefits.
9
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
|
|
(e)
|
Payment
of Benefits
|
Benefits
are recorded when paid.
|
|
(f)
|
Use
of Estimates
|
The
preparation of financial statements in conformity with generally accepted
accounting principles 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.
|
(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
individual 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.
The
following is a summary of net assets as of December 31, 2006 and 2005, total
investment income for the year ended December 31, 2006 and net appreciation
(depreciation) by investment type for the year ended December 31, 2006 of
the
Master Trust (dollar amounts in thousands). The Plan’s interests in
the Master Trust’s net assets for the applicable periods (dollar amounts in
thousands) are also presented.
10
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
|
Net
Assets
|
2006
|
2005
|
||||||
|
(in
000’s)
|
(in
000’s)
|
|||||||
|
Assets:
|
||||||||
|
Investments
-
|
||||||||
|
Cash
and
equivalents
|
$ |
193,438
|
$ |
350,772
|
||||
|
Derivatives
|
2,250
|
2,030
|
||||||
|
Collateral
received for
securities loaned
|
633,836
|
532,223
|
||||||
|
U.S.
bonds and
notes
|
1,798,436
|
1,842,616
|
||||||
|
Non-U.S.
bonds and
notes
|
124,491
|
135,349
|
||||||
|
Halliburton
stock
|
340,449
|
378,906
|
||||||
|
Other
U.S.
stock
|
1,157,918
|
1,031,147
|
||||||
|
Non-U.S.
stock
|
672,024
|
490,670
|
||||||
|
Common/collective
trust
funds
|
770,696
|
644,634
|
||||||
|
Mutual
funds
|
262,876
|
228,965
|
||||||
|
Securities
loaned
-
|
||||||||
|
U.S.
bonds and
notes
|
391,476
|
362,492
|
||||||
|
Other
U.S.
stock
|
188,831
|
127,777
|
||||||
|
Non-U.S.
stock
|
43,566
|
31,518
|
||||||
|
Total
investments
|
6,580,287
|
6,159,099
|
||||||
|
Receivables
-
|
||||||||
|
Receivables
for investments
sold
|
383,327
|
133,665
|
||||||
|
Dividends
|
2,516
|
2,036
|
||||||
|
Interest
|
22,913
|
17,740
|
||||||
|
Other
|
660
|
180
|
||||||
|
Total
receivables
|
409,416
|
153,621
|
||||||
|
Total
assets
|
6,989,703
|
6,312,720
|
||||||
|
Liabilities:
|
||||||||
|
Payables
for investments
purchased
|
702,466
|
523,408
|
||||||
|
Obligation
for collateral
received for securities loaned
|
633,836
|
532,223
|
||||||
|
Other
payables
|
7,209
|
8,358
|
||||||
|
Total
liabilities
|
1,343,511
|
1,063,989
|
||||||
|
Net
Assets at fair value
|
5,646,192
|
5,248,731
|
||||||
|
Adjustments
from fair value to
contract value for fully
|
||||||||
|
benefit-responsive
investment
contracts
|
(19,494 | ) | (22,852 | ) | ||||
|
Net
Assets
|
$ |
5,626,698
|
$ |
5,225,879
|
||||
|
Plan’s
interest in Master Trust net assets at fair value
|
$ |
4,090
|
$ |
3,805
|
||||
|
Adjustments
from fair value to
contract value for fully
|
||||||||
|
benefit-responsive
investment
contracts
|
(5 | ) | (5 | ) | ||||
|
Plan’s
interest in Master Trust net assets
|
$ |
4,085
|
$ |
3,800
|
||||
|
Plan’s
percentage interest in Master Trust net assets
|
0.07 | % | 0.07 | % | ||||
11
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
|
Year
ended
|
||||
|
December
31,
|
||||
|
Total
Investment Income
|
2006
|
|||
|
(in
000’s)
|
||||
|
Net
investment appreciation
|
$ |
391,309
|
||
|
Investment
income
|
179,141
|
|||
|
Expenses
|
(19,689 | ) | ||
|
Total
investment
income
|
$ |
550,761
|
||
|
Year
ended
|
||||
|
December
31,
|
||||
|
Net
Appreciation (Depreciation) by Investment Type
|
2006
|
|||
|
(in
000’s)
|
||||
|
Cash
and equivalents
|
$ |
546
|
||
|
Derivatives
|
(1,594 | ) | ||
|
U.S.
bonds and notes
|
2,075
|
|||
|
Non-U.S.
bonds and notes
|
1,236
|
|||
|
Halliburton
stock
|
4,370
|
|||
|
U.S.
stock
|
152,055
|
|||
|
Non-U.S.
stock
|
137,004
|
|||
|
Common/collective
trust funds
|
77,076
|
|||
|
Mutual
funds
|
15,302
|
|||
|
Other
investments
|
3,239
|
|||
|
Total
appreciation
|
$ |
391,309
|
||
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, 2006 and 2005 was $623,872,552 and $521,786,769
respectively. The cash and non-cash collateral received for
securities loaned as of December 31, 2006 and 2005 was $633,836,151 and
$532,223,051 respectively. As of December 31, 2006 and 2005, none of
the collateral received for securities loaned has been sold or
repledged.
12
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
|
(4)
|
Investments
|
The
following table represents the fair value of individual investment funds
held
under the Master Trust which exceed 5% of the Plan’s net assets as of December
31, 2006 and 2005:
|
2006
|
2005
|
|||||||
|
Participation
in Master Trust, at fair value:
|
||||||||
|
Large
Cap Value
Fund
|
$ |
1,308,651
|
$ |
1,117,733
|
||||
|
Halliburton
Company Stock
Fund
|
1,203,523
|
1,227,426
|
||||||
|
Stable
Value Premixed
Portfolio
|
409,626
|
406,442
|
||||||
|
S&P
500 Index
Fund
|
365,071
|
311,997
|
||||||
|
Balanced
Fund
|
319,743
|
319,532
|
||||||
|
(5)
|
Tax
Status
|
The
Internal Revenue Service 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 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 was
qualified and the related trust was tax-exempt as of December 31, 2006 and
2005.
|
(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.
|
(7)
|
Subsequent
Events
|
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 Company.
13
HALLIBURTON
SAVINGS PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
On
February 26, 2007, the Company announced that its board of directors approved
a
plan under which Halliburton will dispose of its remaining interest in KBR,
Inc.
through a split-off exchange offer to Halliburton’s stockholders. In
this split-off exchange offer, Halliburton offered 135,627,000 shares of
KBR
common stock (“KBR Stock”) that it owned to Halliburton’s stockholders in
exchange for shares of Halliburton common stock (“Halliburton Stock”) at an
exchange ratio that was determined by a specified formula and pursuant to
the
terms and conditions set forth in a Form S-4 registration statement filed
by KBR
with the Securities and Exchange Commission (the “Exchange
Offer”). Following the offer period for the Exchange Offer (the
“Tender Period”), during which time Halliburton stockholders could elect to
tender their shares of Halliburton Stock for KBR Stock, Halliburton would
distribute the shares of KBR Stock exchanged for the tendered shares of
Halliburton Stock.
On
March
29, 2007, pursuant to the terms and conditions of the Exchange Offer, the
Company announced that the exchange ratio was set at the maximum ratio of
1.5905
shares of KBR Stock per share of Halliburton Stock and the Tender Period
was
extended to April 2, 2007.
United
States Trust Company, National Association (“U.S. Trust”),
was engaged to act as an independent fiduciary for the HSF in the Plan to
decide
whether the HSF should participate in the Exchange Offer and tender any shares
of Halliburton Stock held in the Halliburton Stock Fund in exchange for KBR
Stock. At the
conclusion of the Tender Period, U.S. Trust did not tender any shares held
in
the HSF of the Plan.
As
a
result of the completion of separation from KBR, assets of plans sponsored
by
this former subsidiary were withdrawn from the Master Trust. The total plan
assets withdrawn represented approximately 36% of the Master Trust assets
as of
December 31, 2006.
14
HALLIBURTON
SAVINGS PLAN
EIN:
75-2677995
PLAN
#:
145
Schedule
H, Line 4i – Schedule of Assets (Held at End of Year)
December
31, 2006
|
(a)
|
(b)
|
(c)
|
(d)
|
|
(e)
|
|
Description
of investments, including
|
|||||
|
Identity
of issue, borrower,
|
maturity
date, rate of interest, collateral,
|
Current
|
|||
|
lessor,
or similar party
|
par
or maturity value
|
Cost
|
value
|
||
|
*
|
State
Street Bank and Trust
|
SSBTC
short term investment fund
|
|||
|
Company
|
**
|
$
|
4,448
|
||
|
*
|
Halliburton
Company
|
Investment
in net assets of Halliburton
|
|||
|
Employee
Benefit
|
Company
Employee
Benefit
|
||||
|
Master
Trust
|
Master
Trust
|
**
|
4,085,161
|
||
|
*
|
Participant
Loans
|
Loans
issued at interest rates between
|
|||
|
5.0%
and 9.0%; various maturity
dates
|
**
|
97,696
|
|||
|
$
|
4,187,305
|
* 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.
15
Signature
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Halliburton
Company Benefits Committee of the Halliburton Savings Plan has duly caused
this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
Date: June
20, 2007
By: /s/
Michele
Mastrean
Michele
Mastrean, Chairperson of
the
Halliburton
Company Benefits
Committee
EXHIBIT
23.1
Consent
of Independent Registered Public Accounting Firm
We
hereby
consent to the incorporation by reference in the Registration Statement on
Form
S-8 (File No. 333-86080) pertaining to Halliburton Company of our report dated
June 19, 2007, related to the financial statements and supplemental schedule
of
the Halliburton Savings Plan, included in the annual report on Form 11-K for
the
year ended December 31, 2006.
/s/
Harper & Pearson Company, P.C.
Houston,
Texas
June
19,
2007