DALLAS, Mar 14, 2002 /PRNewswire-FirstCall via COMTEX/ -- Halliburton Company
(NYSE: HAL) announces that, on March 13, 2002, the Delaware Supreme Court issued
an Order affirming without opinion the judgment of the Court of Chancery in
litigation between Highlands Insurance Company and Halliburton. The Chancery
Court had held that the fixed-cost primary insurance policies issued by
Highlands Insurance Company to Brown & Root, Inc. from 1958 until 1986
terminated on January 23, 1996 at the time of the spin-off of Highlands
Insurance Group, Inc. by Halliburton. These policies provided primary insurance
for the approximately 30,000 Brown & Root asbestos claims noted in Halliburton's
Annual Report on Form 10-K filed March 12, 2002. This primary coverage
represents only a portion of total insurance covering Brown & Root asbestos
claims. There is more than $2 billion of excess coverage above the Highlands
primary coverage. As reported in the Form 10-K, based on a written legal opinion
by outside counsel that Halliburton would prevail in the Highlands litigation,
Halliburton determined to carry approximately $80 million in claim receivables
against the Highlands insurance policies for settlement and defense costs and
pending asbestos litigation. These receivables will likely be written off in the
first quarter of 2002 and if so will result in an after tax reduction in income
of $0.11 per diluted share. Approximately 45% of these receivables relate to
payments of settlement and defense costs already made by Halliburton. The
remainder is management's estimate of insurance recoveries against future
settlement payments on existing Brown & Root asbestos claims.
"We are surprised by the decision of the Court and we are currently reviewing
our options," said Dave Lesar, Chairman and CEO, Halliburton. "The actions of
the Court only affect claims that are related to Brown & Root operations, which
represent less than 11 percent of the total 274,000 claims outstanding at the
end of last year."
Doug Foshee Executive Vice President and Chief Financial Officer of Halliburton
will hold a telephone conference on March 14, 2002 at 9:00 am (CST) to discuss
these matters. If you plan to participate in the teleconference, please
telephone (719) 457-2727 ten to fifteen minutes prior to starting time and refer
to confirmation code 792467.
Halliburton Company, founded in 1919, is one of the world's largest providers of
products and services to the petroleum and energy industries. The company serves
its customers with a broad range of products and services through its Energy
Services Group and Engineering and Construction Group business segments. The
company's World Wide Web site can be accessed at www.halliburton.com .
SOURCE Halliburton Company
CONTACT: Wendy Hall, Public Relations, +1-713-676-5227, or Cedric
Burgher, Investor Relations, +1-713-676-4608, both of Halliburton Company
