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, 2008.
or
(
) Transition
Report pursuant to Section 15(d) of The Securities Exchange Act of
1934.
For the transition period from
______________ to ___________.
Commission
file number 001-03492
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 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 Savings Plan:
Financial
Statements and Supplemental Schedule
Report of
Independent Registered Public Accounting Firm
Statements
of Net Assets Available for Plan Benefits – December 31, 2008 and
2007
Statement
of Changes in Net Assets Available for Plan Benefits – Year ended December 31,
2008
Notes to
Financial Statements – December 31, 2008 and 2007
Supplemental
Schedule H, Line 4i – Schedule of Assets (Held at End of Year) – December 31,
2008
Signature
Exhibit
Consent
of Harper & Pearson Company, P.C. (Exhibit 23.1)
(i)
HALLIBURTON SAVINGS
PLAN
Index
to Form 11-K
For
the Year Ended December 31, 2008
|
Page
|
|
|
Report
of Independent Registered Public Accounting Firm
|
1 |
|
|
|
|
Statements
of Net Assets Available for Plan Benefits
|
2 |
|
Statement
of Changes in Net Assets Available for Plan Benefits
|
3 |
|
Notes
to Financial Statements
|
4-15 |
|
Schedule
H, Line 4i – Schedule of Assets (Held at End of Year)
|
16 |
|
Signature
|
17 |
|
Exhibit
23.1 – Consent of Independent Registered Public Accounting
Firm
|
|
Note:
The accompanying
financial statements have been prepared in part for the purpose of filing with
the U.S. Department of Labor’s Form 5500.
Supplemental schedules required by 29 CFR 2520.103-10 of the Department of
Labor’s Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974, other
than the Schedule of
Assets listed above, are omitted because of the absence of the conditions under
which they are required.
(ii)
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, 2008 and 2007, and
the related statement of changes in net assets available for plan benefits for
the year ended December 31, 2008. 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, 2008 and 2007, and the changes in its net assets available for plan
benefits for the year ended December 31, 2008 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 26,
2009
1
HALLIBURTON
SAVINGS PLAN
Statements
of Net Assets Available for Plan Benefits
|
December
31
|
||||||||
|
2008
|
2007
|
|||||||
|
Assets
|
||||||||
|
Cash and
equivalents
|
$ | 24,288 | $ | 20,505 | ||||
|
Plan’s interest in Master Trust
at fair value
|
2,804,944 | 4,475,494 | ||||||
|
Participant loans
|
128,272 | 85,755 | ||||||
|
Net
assets available for plan benefits at fair value
|
2,957,504 | 4,581,754 | ||||||
|
Adjustments
from fair value to contract value for fully
|
||||||||
|
benefit-responsive investment
contracts
|
22,881 | (8,950 | ) | |||||
|
Net
assets available for plan benefits
|
$ | 2,980,385 | $ | 4,572,804 | ||||
See
accompanying notes to financial statements.
2
HALLIBURTON
SAVINGS PLAN
Statement
of Changes in Net Assets Available for Plan Benefits
|
Year
Ended
|
||||
|
December
31, 2008
|
||||
|
Additions
|
||||
|
Interest on loans to
participants
|
$ | 6,991 | ||
|
Plan participant
contributions
|
1,187 | |||
|
Total
additions
|
8,178 | |||
|
Deductions
|
||||
|
Plan’s interest in Master Trust
net investment activity
|
1,475,798 | |||
|
Benefits paid to
participants
|
115,189 | |||
|
Investment management fees and
administrative expenses
|
9,610 | |||
|
Total
deductions
|
1,600,597 | |||
|
Net
decrease in net assets available for plan benefits
|
(1,592,419 | ) | ||
|
Net
assets available for plan benefits
|
||||
|
Beginning of year
|
4,572,804 | |||
|
End of year
|
$ | 2,980,385 | ||
See
accompanying notes to financial statements.
3
HALLIBURTON
SAVINGS PLAN
Notes to
Financial Statements
Note
1. Description of the Plan
The
Halliburton Savings Plan (the Plan) is a defined contribution plan
maintained for the benefit of certain 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.
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 of America; (2) employees who are eligible to
participate in any other 401(k) plan sponsored by 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 collective bargaining agreements.
Contributions
Employees. 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 pretax 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 $15,500 for 2008 and the 2008 limit for
eligible earnings was $230,000. Any contributions in excess of the
$15,500 limit are automatically made to the participant’s after-tax
account.
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 2008).
Participants
are permitted to roll over balances held in other qualified plans or individual
retirement accounts (IRA) into the Plan, as specified in the plan
document.
Employer. Participants
remaining in the Plan are covered by a collective bargaining agreement that does
not currently provide Company matching contributions.
Plan
accounts
The
Company has entered into a master trust agreement with the Halliburton Company
Employee Benefit Master Trust (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.
4
Investment
elections and transfers
Participant
account balances may be directed to one of 12 funds or a combination of
funds. The available investment funds are the Aggressive Premixed
Portfolio, the Mid Cap Equity Index Fund, the Conservative Premixed Portfolio
(CPP), the Balanced Fund, the Large Cap Value Equity Fund, the Bond Index Fund,
the S&P 500 Index Fund, the Large Cap Growth Equity Fund, the Non-U.S.
Equity Fund, the Moderate Premixed Portfolio, the Small Cap Equity Fund, and the
Stable Value Premixed Portfolio (SVPP).
The
Halliburton Stock Fund (HSF) currently holds participant investments; however,
it was closed to new investments effective January 1,
2007. Participants may no longer make new contributions,
transfers-in, or loan repayments. The Company provided a three-year
sunset period beginning January 1, 2007 allowing participants to transition out
of the HSF. Any amounts not transferred out of the HSF by the end of
the sunset period will be liquidated and invested in an investment fund chosen
by the Company. The assets of these funds are held in the Master
Trust.
The Plan
allows participants to make 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 that 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 SVPP, the participant cannot transfer
money into that same fund for up to 20 calendar days. If funds are
transferred or reallocated into the SVPP, 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 SVPP for up to 20 calendar
days. Participants are permitted to reallocate or transfer money into
the SVPP at any time.
Administration
The
Halliburton Company Benefits Committee (Benefits Committee) controls and manages
the operation and administration of the Plan. The Halliburton Company
Investment Committee (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.
Participant
loans
Participants
may borrow from their vested account balances 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 12 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. A loan must be repaid within five years (10 years for
primary residence loans) through payroll deductions and is collateralized by the
participant’s account balance. If a participant fails to comply with
the repayment terms of a loan, the Benefits Committee or its designee may deem
such defaulted loan as a distribution when the loan is considered uncollectible
from the participant.
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 forfeit their nonvested balances in
accordance with the terms of the Plan and collective bargaining agreement, as
applicable.
Forfeitures
are used to reduce future Company contributions. No forfeitures were
used to reduce Company contributions in 2008. Forfeitures available
to reduce future Company contributions were $17,439 at December 31,
2008.
5
Distributions
Participants
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 made in the
form of shares of stock or cash.
While
employed, each participant may make one in-service withdrawal of $500 or more
from his or her after-tax account during a plan year, provided the participant
has made contributions to the Plan for at least one 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
pretax account, rollover account, and after-tax account can be made in the event
of a proven financial hardship, subject to limitations under the
Plan.
Investment
earnings
Investment
earnings on participants’ accounts are allocated proportionately based on their
relative account balance in each investment fund.
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.
Union
decertification
The
agreement between the Company and the Bentonite (Colony) Operation collective
bargaining unit expired October 21, 2007. Upon expiration of this
contract, the employees became eligible to participate in the Halliburton
Retirement and Savings Plan. The balances in the Halliburton Savings
Plan, as of the expiration date of the contract, remain in this
plan.
|
Note
2. Significant Accounting
Policies
|
Basis
of accounting
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 (FASB) Staff Position Nos. AAG
INV-1 and SOP 94-4-1 (As Amended), “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.
6
Use
of estimates
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.
Valuation
of investments
The
investments in all funds of the Master Trust are reported at fair
value. Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
The
Plan’s proportionate interest in Master Trust net assets is presented at fair
value with an adjustment from fair value to contract value for fully
benefit-responsive investment contracts. The SVPP, which invests
primarily in asset-backed contracts that are fully benefit-responsive, is
reported at fair value and adjusted to contract value. In addition to
investments reported at fair value, the CPP owns units of a benefit-responsive
common/collective trust fund, which are reported at fair value and adjusted to
contract value. Contract value represents the accumulated
contributions plus accrued net earnings minus distributions. See Note
4 for discussion of benefit-responsive asset-backed contracts.
The Plan
invests in cash, cash equivalents, and participant loans, all of which are held
by the Trustee outside of the Master Trust. Cash and equivalents are
in a short-term investment fund that is valued at cost, which approximates fair
value. Participant loans are valued at amortized cost, which
approximates fair value. The Plan and the Master Trust consider all
highly liquid investments with an original maturity of three months or less to
be cash equivalents.
Risks
and uncertainties
The
investment funds are exposed to various risks, such as interest rate risk,
market risk, and credit risk. Due to the level of risk associated
with certain investment securities, it is reasonably possible that changes in
the values of investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the Statements of Net
Assets Available for Plan Benefits and participant account
balances.
Securities
transactions and investment income
The Plan
records interest on cash, cash equivalents, and participant loans held outside
of the Master Trust when earned. Purchases and sales of securities
held outside of 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.
Interest
income of the Master Trust investments is recorded when
earned. Dividends on the Master Trust investments are recorded on the
ex-dividend date.
Payment
of benefits
Benefit
payments to participants are recorded when paid.
7
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 that incurred the charges. In 2008, the Company
elected to pay certain expenses specifically related to the
Plan. Total expenses paid by the Master Trust on behalf of the Plan
are shown as a separate component in the Statement of Changes in Net Assets
Available for Plan Benefits.
Note
3. Fair Value Measurements
On
January 1, 2008, the Plan adopted FASB Statement of Financial Accounting
Standards No. 157 (SFAS No. 157), “Fair Value Measurements,” and related FASB
staff positions. SFAS No. 157 establishes a framework for measuring
fair value as it relates to financial assets and liabilities and to nonfinancial
assets and liabilities measured at fair value on a recurring
basis. That framework provides a three-level valuation hierarchy
based upon observable and unobservable inputs, with preference given to
observable inputs. These two types of inputs create the following
fair value hierarchy:
| Level 1 - | quoted prices in active markets for identical instruments; | |
|
|
Level
2 -
|
significant
other observable inputs, including quoted prices for similar instruments
in active markets, quoted prices for identical or similar instruments in
markets that are not active, and inputs other than quoted prices that are
observable or are derived principally from or corroborated by observable
market data for substantially the full term of the instrument;
and
|
|
|
Level
3 -
|
unobservable
inputs to the valuation model.
|
Valuation
of investments
Exchange-traded
derivative financial instruments, exchange-traded funds, and publicly traded
equity securities are valued based on their quoted fair value by independent
pricing vendors and are included in Level 1. Mutual funds are valued
at the net asset value of units held by the Master Trust and are included in
Level 1. Common/collective trust funds are valued at the net asset
value of units held by the Master Trust and are included in Level
2. Fixed income securities, such as corporate and government bonds,
asset-backed securities, and other debt securities are valued using quotes from
independent pricing vendors based on recent trading activity and other relevant
information, including market interest rate curves, referenced credit spreads,
and estimated prepayment rates, where applicable, and are included in Level
2. Non-exchange-traded derivative financial instruments are valued in
accordance with the investment managers’ fair value methods based on observable
inputs, such as interest rate yield curve data, credit spread recovery rates,
and recent trading activity from market makers, and are included in Level
2.
In
certain circumstances, pricing vendors and investment managers may provide
valuations that are based on significant unobservable inputs, and in those
circumstances, the securities are classified as Level 3. Certain
securities priced using non-binding broker quotes are also included in Level
3. Non-binding broker quotes are used as the primary basis for
valuation when there is limited or no relevant market activity for a specific
instrument.
8
The
following table sets forth by level within the fair value hierarchy the fair
value of Master Trust investments and participant loans held by the Plan as of
December 31, 2008:
|
Description
|
Level
1
|
Level 2 |
Level
3
|
Total
|
|
||||||||||||||
|
Master
Trust:
|
|||||||||||||||||||
|
Cash and
equivalents
|
$ | 10,422,086 | $ | 124,635,210 | $ | – | $ | 135,057,296 | |||||||||||
|
U.S. and non-U.S. bonds and
notes
|
– | 1,171,319,474 | 7,971,391 | 1,179,290,865 | |||||||||||||||
|
Other U.S. and non-U.S.
stock
|
923,860,808 | 50,000 | – | 923,910,808 | |||||||||||||||
|
Common/collective trust
funds
|
– | 561,848,319 | – | 561,848,319 | |||||||||||||||
|
Mutual funds
|
115,164,807 | – | – | 115,164,807 | |||||||||||||||
|
Halliburton stock
|
100,898,691 | – | – | 100,898,691 | |||||||||||||||
|
Derivatives
|
(2,838,601 | ) | (29,566,997 | ) | – | (32,405,598 | ) | ||||||||||||
|
Wrapper contracts
|
– | – | 2,928,720 | 2,928,720 | |||||||||||||||
|
Master
Trust investments at fair value
|
1,147,507,791 | 1,828,286,006 | 10,900,111 | 2,986,693,908 | |||||||||||||||
|
Participant
loans held by the Plan
|
– | – | 128,272 | 128,272 | |||||||||||||||
|
Total
investments at fair value
|
$ | 1,147,507,791 | $ | 1,828,286,006 | $ | 11,028,383 | $ | 2,986,822,180 | |||||||||||
Changes
in the fair value of Level 3 assets for the year ended December 31, 2008
were:
|
Bonds
|
Wrapper
|
Participant
|
||||||||||||||
|
and
Notes
|
Contracts
|
Loans
|
Total
|
|||||||||||||
|
Fair
value at January 1, 2008
|
$ | 21,469,604 | $ | 288,784 | $ | 85,755 | $ | 21,844,143 | ||||||||
|
Realized
losses included in changes in net assets(a)
|
(14,372,996 | ) | – | – | (14,372,996 | ) | ||||||||||
|
Unrealized
gains (losses) included related to
|
||||||||||||||||
|
instruments still held at December
31, 2008(a)
|
(2,790,921 | ) | 2,639,936 | – | (150,985 | ) | ||||||||||
|
Purchases,
issuances, and settlements
|
3,665,704 | – | 42,517 | 3,708,221 | ||||||||||||
|
Fair
value at December 31, 2008
|
$ | 7,971,391 | $ | 2,928,720 | $ | 128,272 | $ | 11,028,383 | ||||||||
(a)
Included in “Net investment appreciation (depreciation)” on Master Trust changes
in net assets table on page 11.
Note
4. 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 13 funds in which the defined contribution plans
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) that can be specifically identified or allocated among
all plans in proportion to the fair value of the assets assigned to each
plan.
In April
2007, Halliburton completed the separation of KBR, Inc. (KBR) from the
Company. Accordingly, all assets of the plans sponsored by this
former subsidiary were withdrawn from the Master Trust prior to the separation
and transferred to a separate master trust. Total plan assets
withdrawn represented approximately 36% of the Master Trust net assets as of
December 31, 2006.
9
Master
Trust net assets and the Plan’s interest in Master Trust net assets
were:
|
December
31
|
||||||||
|
2008
|
2007
|
|||||||
|
Assets
|
||||||||
|
Investments
|
||||||||
|
Cash and
equivalents
|
$ | 135,057,296 | $ | 145,446,709 | ||||
|
U.S. bonds and
notes
|
1,101,039,643 | 1,189,680,353 | ||||||
|
Other U.S.
stock
|
592,344,650 | 648,856,042 | ||||||
|
Common/collective trust
funds
|
561,848,319 | 515,691,288 | ||||||
|
Non-U.S. stock
|
331,566,158 | 601,523,748 | ||||||
|
Mutual funds
|
115,164,807 | 155,334,114 | ||||||
|
Halliburton
stock
|
100,898,691 | 254,648,218 | ||||||
|
Non-U.S. bonds and
notes
|
78,251,222 | 87,942,866 | ||||||
|
Wrapper
contracts
|
2,928,720 | 288,784 | ||||||
|
Collateral received for
securities loaned
|
– | 487,268,935 | ||||||
|
Securities
loaned
|
||||||||
|
Other U.S. stock
|
– | 282,154,610 | ||||||
|
U.S. bonds and
notes
|
– | 173,033,859 | ||||||
|
Non-U.S. stock
|
– | 20,635,133 | ||||||
|
Derivatives
|
– | 3,037,949 | ||||||
|
Investments at fair
value
|
3,019,099,506 | 4,565,542,608 | ||||||
|
Receivables
|
||||||||
|
Receivables for investments
sold
|
464,951,917 | 216,993,811 | ||||||
|
Interest
|
13,546,802 | 13,614,722 | ||||||
|
Dividends
|
1,526,308 | 1,580,433 | ||||||
|
Other
|
590,519 | 378,549 | ||||||
|
Total
receivables
|
480,615,546 | 232,567,515 | ||||||
|
Total
assets
|
3,499,715,052 | 4,798,110,123 | ||||||
|
Liabilities
|
||||||||
|
Payable for investments
purchased
|
541,706,973 | 424,044,642 | ||||||
|
Investment in
derivatives
|
32,405,598 | – | ||||||
|
Obligation for collateral
received for securities loaned
|
– | 487,268,935 | ||||||
|
Other payables
|
3,729,399 | 4,490,602 | ||||||
|
Total
liabilities
|
577,841,970 | 915,804,179 | ||||||
|
Net
assets reflecting all investments at fair value
|
2,921,873,082 | 3,882,305,944 | ||||||
|
Adjustments from fair value to
contract value for fully
|
||||||||
|
benefit-responsive investment
contracts
|
73,255,646 | (20,926,440 | ) | |||||
|
Net
assets
|
$ | 2,995,128,728 | $ | 3,861,379,504 | ||||
|
Plan’s
interest in Master Trust net assets at fair value
|
$ | 2,804,944 | $ | 4,475,494 | ||||
|
Adjustments from fair value to
contract value for fully
|
||||||||
|
benefit-responsive investment
contracts
|
22,881 | (8,950 | ) | |||||
|
Plan’s
interest in Master Trust net assets
|
$ | 2,827,825 | $ | 4,466,544 | ||||
|
Plan’s
percentage interest in Master Trust net assets
|
0.09 | % | 0.12 | % | ||||
10
The 22%
decrease in Master Trust net assets and resulting decrease in the Plan’s
interest in Master Trust net assets during 2008 was chiefly the result of the
downturn in global financial markets and broad economic decline worldwide during
the year.
Master
Trust changes in net assets from net investment activity were:
|
Year
Ended
|
||||
|
December
31, 2008
|
||||
|
Net
investment appreciation (depreciation)
|
||||
|
Cash and
equivalents
|
$ | (989 | ) | |
|
Other U.S.
stock
|
(379,905,847 | ) | ||
|
Non-U.S. stock
|
(295,018,542 | ) | ||
|
Common/collective trust
funds
|
(127,254,164 | ) | ||
|
Halliburton
stock
|
(107,030,936 | ) | ||
|
Mutual funds
|
(40,821,382 | ) | ||
|
U.S. bonds and
notes
|
(31,198,132 | ) | ||
|
Derivatives
|
(5,432,872 | ) | ||
|
Non-U.S. bonds and
notes
|
(4,258,891 | ) | ||
|
Other
investments
|
6,783,752 | |||
|
Total
net investment depreciation
|
(984,138,003 | ) | ||
|
Net
investment income (loss)
|
||||
|
Interest
income
|
74,723,960 | |||
|
Dividend
income
|
35,501,832 | |||
|
Other income
|
2,061,846 | |||
|
Expenses
|
(14,665,829 | ) | ||
|
Total
net investment income
|
97,621,809 | |||
|
Changes
in net assets from net investment activity
|
$ | (886,516,194 | ) | |
Benefit-responsive
asset-backed contracts
The SVPP
invests primarily in separately managed 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. The underlying assets, generally fixed-income securities,
are held by the Trustee for the sole benefit of the SVPP. Depending
on the securities, they are valued using either observable or unobservable
inputs and are, therefore, included in Level 1, 2, or 3 of the fair value
hierarchy. Wrap contracts are entered into for a fee with a financial
institution to assure contract value liquidity for plan participant-directed
withdrawals, transfers, or loans. 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 the wrap provider and cannot be less than zero.
The net
average yield earned (lost) by the separately managed asset-backed contracts
divided by the fair value of the underlying assets was (2.97)% for 2008 and
6.64% for 2007. The net actual earnings credited to participants
attributable to the separately managed asset-backed contracts divided by the
fair value of the underlying assets was 5.64% for 2008 and 5.34% for
2007.
11
All of
the separately managed 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 SVVP 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 SVPP is unable to meet the terms of the contract.
The
Stable Value Premixed Portfolio and the Conservative Premixed Portfolio own
units of a benefit-responsive common/collective trust fund. The yield
earned by the common/collective trust fund was 5.29% at December 31, 2008 and
5.24% at December 31, 2007. This represents the annualized earnings
of all investments divided by the fair value of all investments. The
yield credited by the common/collective trust fund to participants was 4.10% at
December 31, 2008 and 5.09% at December 31, 2007. This represents the
annualized earnings credited to participants in the common/collective trust fund
divided by the fair value of all investments.
The
asset-backed contracts held by the common/collective trust fund are fully
participating and hybrid contracts. A hybrid contract is a
combination of participating and non-participating contracts. In
non-participating contracts, the contract holder does not participate in asset
and liability risks.
The
following tables set forth the benefit-responsive asset-backed contracts held in
the SVPP and CPP by the Master Trust as of December 31, 2008 and
2007.
|
December
31, 2008
|
||||||||||||||||||||
|
Moody’s
|
Wrapper
|
|||||||||||||||||||
|
Credit
|
Investment
at
|
Contract
at
|
Adjustment
to
|
Investment
at
|
||||||||||||||||
|
Contract
Issuer
|
Rating
|
Fair
Value
|
Fair
Value
|
Contract
Value
|
Contract
Value
|
|||||||||||||||
|
Wells
Fargo Stable Return
|
||||||||||||||||||||
|
Fund - #1
|
n/a
|
$ | 196,516,347 | $ | n/a | $ | 10,998,275 | $ | 207,514,622 | |||||||||||
|
Metropolitan
Life
|
Aa2
|
155,858,064 | 1,329,375 | 19,233,667 | 176,421,106 | |||||||||||||||
|
Monumental
Life
|
||||||||||||||||||||
|
Insurance
Company
|
Aa3
|
168,653,505 | 429,064 | 6,704,019 | 175,786,588 | |||||||||||||||
|
Natixis
Financial Products,
|
||||||||||||||||||||
|
Inc. -
#1
|
Aa3
|
186,340,309 | – | (11,349,069 | ) | 174,991,240 | ||||||||||||||
|
Pacific
Life Insurance
|
||||||||||||||||||||
|
Company
|
Aa3
|
170,438,649 | 594,568 | 3,473,736 | 174,506,953 | |||||||||||||||
|
JPMorgan
Chase - #1
|
Aaa
|
144,717,125 | 450,506 | 24,205,033 | 169,372,664 | |||||||||||||||
|
Natixis
Financial Products,
|
||||||||||||||||||||
|
Inc. - #2
|
Aa3
|
78,827,903 | – | 3,819,170 | 82,647,073 | |||||||||||||||
|
JPMorgan
Chase - #2
|
Aaa
|
65,223,909 | 125,207 | 15,121,500 | 80,470,616 | |||||||||||||||
|
Wells
Fargo Stable Return
|
||||||||||||||||||||
|
Fund - #2
|
n/a | 18,749,090 | n/a | 1,049,315 | 19,798,405 | |||||||||||||||
|
Total
investments in
|
||||||||||||||||||||
|
security-backed
contracts
|
$ | 1,185,324,901 | $ | 2,928,720 | $ | 73,255,646 | $ | 1,261,509,267 | ||||||||||||
12
|
December
31, 2007
|
||||||||||||||||||||
|
Moody’s
|
Wrapper
|
|||||||||||||||||||
|
Credit
|
Investment
at
|
Contract
at
|
Adjustment
to
|
Investment
at
|
||||||||||||||||
|
Contract
Issuer
|
Rating
|
Fair
Value
|
Fair
Value
|
Contract
Value
|
Contract
Value
|
|||||||||||||||
|
JPMorgan
Chase - #1
|
Aaa
|
$ | 171,259,448 | $ | 146,095 | $ | (1,259,712 | ) | $ | 170,145,831 | ||||||||||
|
Monumental
Life
|
||||||||||||||||||||
|
Insurance
Company
|
Aa3
|
169,260,960 | – | (2,379,389 | ) | 166,881,571 | ||||||||||||||
|
Metropolitan
Life
|
Aa2
|
169,433,840 | – | (2,803,408 | ) | 166,630,432 | ||||||||||||||
|
Union
Bank of
|
||||||||||||||||||||
|
Switzerland, AG
|
Aaa
|
167,867,016 | – | (2,717,393 | ) | 165,149,623 | ||||||||||||||
|
Natixis
Financial Products,
|
||||||||||||||||||||
|
Inc. -
#1
|
Aa2
|
175,316,358 | – | (12,153,386 | ) | 163,162,972 | ||||||||||||||
|
JPMorgan
Chase - #2
|
Aaa
|
75,820,964 | 142,689 | 2,682,769 | 78,646,422 | |||||||||||||||
|
Natixis
Financial Products,
|
||||||||||||||||||||
|
Inc. -
#2
|
Aa2
|
80,478,504 | – | (2,409,872 | ) | 78,068,632 | ||||||||||||||
|
Wells
Fargo Stable Return
|
||||||||||||||||||||
|
Fund - #2
|
n/a | 21,727,111 | n/a | 65,378 | 21,792,489 | |||||||||||||||
|
Wells
Fargo Stable Return
|
||||||||||||||||||||
|
Fund - #1
|
n/a | 16,142,429 | n/a | 48,573 | 16,191,002 | |||||||||||||||
|
Total
investments in
|
||||||||||||||||||||
|
security-backed
contracts
|
$ | 1,047,306,630 | $ | 288,784 | $ | (20,926,440 | ) | $ | 1,026,668,974 | |||||||||||
Derivatives
The
Master Trust makes use of several investment strategies involving use of
derivative investments. The Investment Committee monitors risk
indicators, such as duration, 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 may also be used to hedge against foreign
currency fluctuations. The Investment Committee does not allow
investment managers for the Master Trust to use derivatives for speculative
purposes.
Securities
lending transactions
Certain
manager accounts of the Master Trust participated in a securities lending
program administered by State Street until the Investment Committee decided to
withdraw from the program in 2008. The transfers of assets under
State Street’s securities lending program were secured borrowings with pledge of
collateral. The fair market value of the securities loaned was
$475,823,602 as of
December 31, 2007. There were no securities of the Master Trust on
loan at December 31, 2008. As of December 31, 2007, none of the
collateral received for securities loaned was sold or repledged.
Certain
common/collective trust funds and mutual funds in which the Master Trust invests
participate in securities lending programs. The programs are
administered by the trustee of the common/collective and mutual
funds.
13
Note
5. Investments
The fair
value of individual investment funds held under the Master Trust that exceeded
5% of the Plan’s net assets were:
|
December
31
|
||||||||
|
2008
|
2007
|
|||||||
|
Participation
in Master Trust at fair value:
|
||||||||
|
Large Cap Value Equity
Fund
|
$ | 748,961 | $ | 1,337,155 | ||||
|
Halliburton Stock
Fund
|
627,175 | 1,312,321 | ||||||
|
Stable Value Premixed
Portfolio
|
387,812 | 433,348 | ||||||
|
Balanced Fund
|
283,140 | 346,405 | ||||||
|
S&P 500 Index
Fund
|
231,499 | 392,297 | ||||||
|
Bond Index Fund
|
188,644 | 186,078 | ||||||
Note
6. 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, 2008 and
2007.
Note
7. Related-Party Transactions
Through
its participation in the Master Trust, the Plan 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.
14
Note
8. Reconciliation of Financial Statements to U.S. Department of Labor
Form 5500
Following
is a reconciliation of net assets available for plan benefits per the financial
statements at December 31, 2008 to the Form 5500.
|
December
31, 2008
|
||||
|
Net
assets available for plan benefits per the financial
statements
|
$ | 2,980,385 | ||
|
Less: Adjustment
from fair value to contract value for fully
|
||||
|
benefit-responsive investment
contracts
|
22,881 | |||
|
Net
assets available for plan benefits per the Form 5500
|
$ | 2,957,504 | ||
For the year
ended December 31, 2008, following is a reconciliation of the Plan’s interest in
Master Trust net investment activity per the financial statements to the Form
5500.
|
Year
Ended
|
||||
|
December
31, 2008
|
||||
|
Plan’s
interest in Master Trust net investment activity per the financial
statements
|
$ | (1,475,798 | ) | |
|
Less: Adjustment
from fair value to contract value for fully
benefit-responsive
|
||||
|
investment
contracts
|
22,881 | |||
|
Plan’s
interest in Master Trust net investment activity per the Form
5500
|
$ | (1,498,679 | ) | |
15
HALLIBURTON
SAVINGS PLAN
EIN:
75-2677995
PLAN #
145
Schedule
H, Line 4i – Schedule of Assets (Held at End of Year)
December
31, 2008
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||||||
|
Description
of Investments,
|
||||||||||||
|
Identity
of Issue,
|
Including
Maturity Date, Rate
|
|||||||||||
|
Borrower,
Lessor or
|
of
Interest, Collateral, Par
|
Current
|
||||||||||
|
Similar
Party
|
or
Maturity Value
|
Cost
|
Value
|
|||||||||
| * |
Halliburton
Company
|
Investment in net assets of
Halliburton
|
||||||||||
|
Employee
Benefit
|
Company Employee
Benefit
|
|||||||||||
|
Master
Trust
|
Master
Trust
|
** | $ | 2,804,944 | ||||||||
| * |
Participant
loans
|
Loans issued at interest rates
between
|
||||||||||
|
5.0% and 9.25% with
various
|
||||||||||||
|
maturities
|
** | 128,272 | ||||||||||
| * |
State
Street Bank and
|
State Street Bank and Trust
Company
|
||||||||||
|
Trust Company
|
short-term investment
fund
|
** | 24,288 | |||||||||
|
Total
|
$ | 2,957,504 | ||||||||||
|
*
|
Column
(a) indicates each identified person or entity known to be a
party-in-interest.
|
|
**
|
Cost
information is not required for participant-directed investments and,
therefore, is not
included.
|
See
accompanying Report of Independent Registered Public Accounting
Firm.
16
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.
By: /s/ Gilbert
Chavez
Gilbert
Chavez
Chairperson,
Halliburton Company Benefits
Committee
Date: June 26,
2009
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 26, 2009 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, 2008.
/s/
Harper & Pearson Company, P.C.
Houston,
Texas
June 26,
2009