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Page
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Report
of Independent Registered Public Accounting Firm
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1
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Statements
of Net Assets Available for Benefits – December 31, 2006 and
2005
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2
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Statements
of Changes in Net Assets Available for Benefits –
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Years
ended December 31, 2006
and 2005
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3
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Notes
to Financial Statements – December 31, 2006 and 2005
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4-15
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Supplemental
Schedule
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Schedule
H, Line 4i – Schedule of Assets (Held at End of Year) – December 31,
2006
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16
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2006
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2005
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|||||||
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Assets:
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||||||||
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Investments,
at fair value
-
|
||||||||
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Plan
interest in Master Trust
(see note 2)
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$ |
515,846,647
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$ |
533,654,185
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||||
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Cash
and cash
equivalents
|
570,017
|
485,841
|
||||||
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Receivables
-
|
||||||||
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Plan
participants’
contributions
|
-
|
40,581
|
||||||
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Net
assets available for benefits at fair value
|
$ |
516,416,664
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$ |
534,180,607
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||||
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Adjustments
from fair value to contract value for interest in Master
|
||||||||
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Trust
relating to fully
benefit-responsive investment contracts
|
(2,495,473 | ) | (3,117,614 | ) | ||||
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Net
assets available for
benefits
|
$ |
513,921,191
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$ |
531,062,993
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||||
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2006
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2005
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|||||||
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Additions:
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||||||||
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Contributions:
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||||||||
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Company,
net of
forfeitures
|
$ |
212,565
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$ |
360,853
|
||||
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Plan
participants
|
2,065,564
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3,160,719
|
||||||
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Rollovers
|
2,761
|
-
|
||||||
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Investment
income,
net:
|
||||||||
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Plan
interest in Master Trust
investment gain
|
50,364,551
|
39,137,356
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||||||
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Total
additions
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52,645,441
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42,658,928
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||||||
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Deductions:
|
||||||||
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Benefits
paid to
participants
|
(67,195,664 | ) | (60,360,882 | ) | ||||
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Investment
management fees and
administrative expenses
|
(2,030,984 | ) | (2,135,505 | ) | ||||
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Transfer
to other
plan
|
(560,595 | ) |
-
|
|||||
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Total
deductions
|
(69,787,243 | ) | (62,496,387 | ) | ||||
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Net
decrease to net assets
available for benefits
|
(17,141,802 | ) | (19,837,459 | ) | ||||
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Net
assets available for benefits, beginning of year
|
531,062,993
|
550,900,452
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||||||
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Net
assets available for benefits, end of year
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$ |
513,921,191
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$ |
531,062,993
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||||
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The
Brown & Root, Inc. Employees’ Retirement and Savings Plan (the Plan)
is a defined contribution plan for certain qualified employees of
certain
subsidiaries of Halliburton Company (Halliburton). The Plan is
sponsored by Kellogg Brown & Root, LLC, formerly Kellogg Brown and
Root, Inc. (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.
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(a)
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Eligibility
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Certain
employees of the Company are eligible for participation in the Plan
upon
their first anniversary date of employment following completion of
1,000
hours of credited service.
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(b)
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Contributions
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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 50% of the participant’s
eligible earnings up to $220,000 and $210,000 for 2006 and 2005,
respectively. The total amount of participant tax deferred
savings contribution is limited to $15,000 and $14,000 for 2006 and
2005,
respectively. Any contributions in excess of these limits are
automatically made to the participant’s after-tax
account. Additional limitations are in place for highly
compensated employees under the provisions of the
Plan.
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Participants
who are age 50 or older before the close of the Plan year may elect
to
make a catch-up contribution, ($5,000 and $4,000 per participant
in 2006
and 2005, respectively). Catch-up contributions are treated as
Tax Deferred Savings Contributions for all purposes of the
Plan. However, catch-up contributions shall not be considered
for purposes of determining the amount of Employer Matching Contributions
to be made to the Plan on the participant’s behalf. Catch-up
contributions are not subject to the 50% of compensation limitation,
but
instead, when aggregated with other Tax Deferred Savings Contributions,
cannot exceed 75% of a Participant’s compensation, the annual dollar
limit, or the actual percentage restriction. Catch-up
contributions exceeding limitations of the Plan are distributed to
the
participant by April 15 of the following Plan
year.
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The
Company matches 50% of the tax deferred savings contributions (other
than
catch-up contributions) that are not in excess of 4% of eligible
earnings. The Company may make annual discretionary retirement
allocation contributions, based on Company performance to participants,
as
defined by the plan document. Participants are not required to
have contributed to the Plan to be eligible for such a
contribution. The participant’s share of any discretionary
retirement allocation contribution is based on a percentage of their
eligible pay for the Plan year to be determined in the subsequent
year
after company performance results are recorded. For 2006, the
Company did not make a discretionary retirement allocation
contribution. For 2005, the Company did make a discretionary
retirement allocation contribution in the form of a match
optimization.
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Employees
are permitted to roll over pre-tax and after-tax amounts with earnings
held in other qualified plans or individual retirement accounts (IRAs)
into the Plan, as specified in the Plan
document.
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(c)
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Plan
Accounts
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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 Halliburton
or
its affiliates. The Plan maintains a clearing account, which
invests in a short term investment fund to facilitate the payment
of
benefits and receipt of contributions to the
Plan.
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(d)
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Investment
Elections and
Transfers
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Contributions
and participant account balances may be directed to one of thirteen
funds
or a combination of funds. The 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).
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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. The Plan imposes
a fifteen calendar-day waiting period on transfers involving the
Non-U.S.
Equity Fund.
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(e)
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Administration
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During
February 2006, the KBR Benefits Committee was created solely to control
and manage the operation and administration of the Plan. Prior
to that time the Halliburton Benefits Committee maintained all control,
management, and administration of the Plan. The Halliburton
Company Investments Committee maintained all powers and duties related
to
the Plan’s investment fund or funds until such time assets were fully
transferred to the KBR Master Trust (see note
8).
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State
Street Bank and Trust Company (State Street or the Trustee) is the
Plan’s
trustee, and Hewitt Associates LLC is the record
keeper.
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(f)
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Vesting
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Participants’
contributions to their accounts and the earnings thereon are fully
vested
when made or earned. Participants are fully vested in Company matching
contributions and the earnings thereon made subsequent to January
1, 2004
after 3 years of service. Prior to January 1, 2004, participants
were
fully vested in Company matching contributions and the earnings
thereon.
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Participants
have a vested interest in the Company discretionary retirement allocation
contribution account based on years of service as
follows:
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Years
of service
|
Vested
percentage
|
|||
|
Less
than 3
|
0 | % | ||
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At
least 3 but less than 4
|
20 | % | ||
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At
least 4 but less than 5
|
50 | % | ||
|
At
least 5 but less than 6
|
60 | % | ||
|
At
least 6 but less than 7
|
80 | % | ||
|
7
or more
|
100 | % | ||
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|
The
non vested portion of a participant’s account is forfeited at the end of
the fifth year following termination unless the participant is rehired
within five years of termination. Forfeitures are used to
reduce Company contributions. Forfeitures available as of
December 31, 2006 and 2005 are $128,740 and $186,423
respectively. Forfeitures of $197,193 and $290,166 in 2006 and
2005, respectively, were used to offset Company
contributions.
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(g)
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Distributions
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|
|
Each
participant, or their designated beneficiary, may elect to receive
a
distribution upon retirement, termination, disability, or
death. Direct rollovers to an IRA or other qualified 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 in-service withdrawals from their
after-tax accounts as defined in the Plan document. In-service
withdrawals from their tax-deferred savings are also permitted upon
attainment of age 59-1/2 or proven financial hardship, subject to
limitations under the Plan.
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(h)
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Investment
Earnings
|
|
|
Investment
earnings on participants’ accounts are allocated proportionately based on
their relative account balance in each investment
fund.
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|
(i)
|
Halliburton
Stock Fund
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|
The
HSF is an Employee Stock Ownership Plan (ESOP). The ESOP is
designed to comply with Section 4975(e)(7) of the IRC and Section
407(d)(6) of ERISA.
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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 Halliburton directly to the
Trustee.
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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 at its
discretion all shares which have not been voted by Plan participants
and
beneficiaries.
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(j)
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Plan
Termination
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|
The
Board of Directors of Halliburton 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 (see note
9).
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(a)
|
Basis
of Accounting
|
|
|
The
accompanying financial statements are prepared in conformity using
the
accrual basis of accounting. 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. The Plan invests in
investment contracts through the Halliburton Company Employee Benefit
Master Trust. The statements of net assets available for
benefits present the fair value of the investment in the master trust
as
well as the adjustment of the investment in the master trust from
fair
value to contract value relating to investment contracts. The
statements of changes in net assets available for Benefits are prepared
on
a contract value basis.
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|
The
Plan has adopted the financial statement presentation and disclosure
requirements effective December 31, 2006 and retroactively restated
the
statement of net assets for the periods presented. The effect
of adopting the FSP had no impact on net assets which have been
historically presented at contract
value.
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(b)
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Valuation
of Investments
|
|
|
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
values. Common/collective trust funds are stated at the fair
market value of the underlying securities. The Master Trust
considers all highly liquid investments with an original maturity
of three
months or less to be cash
equivalents.
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|
The
Master Trust’s investment in the Pooled Equity Fund and Pooled Fixed
Income Fund represents the unitized values of certain pooled managers’
accounts on a combined basis. Each pooled manager’s account is
valued daily. A unit price is calculated for each pooled
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.
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|
|
The
Stable Value Premixed Portfolio within the Master Trust invests primarily
in asset-backed contracts that are fully
benefit-responsive. These asset-backed contracts have two
components: 1) a portfolio of securities or underlying assets and
2) a
wrap contract. These underlying assets, generally fixed income
securities, are held by an independent trustee for the sole benefit
of the
Fund and a wrap contract is entered into for a fee with a financial
institution to assure contract value liquidity for plan participant
directed withdrawals, transfers or loans. The issuer of the
contract (wrap provider) undertakes to repay the principal amount
deposited pursuant to the contract 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.
|
|
|
The
net weighted average yield earned, which is different from the interest
rate credited to participants, by the entire fund for 2006 was 2.28%
and
for 2005 was 1.99%. The net weighted interest rate credited to
participants in the fund for 2006 was 5.03% and for 2005 was
4.79%.
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|
|
All
of the asset-backed contracts held by the Fund 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 a non-participant directed withdrawal,
transfer or loan. The risk of this event happening is possible
but 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 or the Fund is unable to meet
the
terms of the contract.
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|
The
Plan’s proportionate interest in the investments of the Master Trust is
shown in the statements of net assets available for benefits as Plan
interest in the Master Trust (see note
3).
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|
(c)
|
Securities
Transactions and Investment
Income
|
|
|
The
Plan records interest on cash and cash equivalents held outside of
the
Master Trust as 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 recorded on a 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 interest in Master Trust investment
gain in the statements of changes in net assets available for
benefits.
|
|
|
In
addition, investment income of the Master Trust includes dividends,
interest, and other income. Interest income of the Master Trust
investments is recorded as earned. Dividends on the Master
Trust investments are recorded on the ex-dividend
date.
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|
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(d)
|
Administrative
Expenses
|
|
|
The
Master Trust pays substantially all plan expenses on behalf of the
Plan.
Generally, trustee fees, recordkeeping fees, audit fees, and investment
management fees are paid from Master Trust assets and are charged
to the
plans participating in the Master Trust. Expenses related to
the direct management of the Master Trust are shared on an equitable
basis
by the participating plans. Expenses specifically related to an
individual plan are charged to the assets of the Plan which incurred
the
charges. These expenses are shown as a component of Plan
interest in Master Trust investment
gain.
|
|
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(e)
|
Payment
of Benefits
|
|
|
Benefits
are recorded when paid.
|
|
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(f)
|
Use
of Estimates
|
|
|
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, and changes therein and disclosure
of
contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those
estimates.
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(g)
|
Risk
and Uncertainties
|
|
|
The
investments of the Master Trust are exposed to various risks, such
as
interest rate, credit and overall market volatility. Due to the
level of risk associated with certain investment securities, it is
reasonably possible that changes in the value of investment securities
will occur in the near term.
|
|
|
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
plans
may participate. The combination of the plans’ assets is only
for investment purposes and the plans continue to be operated under
their
current plan documents, as amended.
|
|
|
The
following is a summary of net assets as of December 31, 2006 and
2005 and
net investment activity for the years ended December 31, 2006 and
2005 of
the Master Trust and net appreciation by investment type for the
years
ended December 31, 2006 and 2005. The Plan’s interest in the
Master Trust’s net assets for the applicable periods is also
presented.
|
|
Net
Assets
|
2006
|
2005
|
||||||
|
Assets:
|
||||||||
|
Investments
-
|
||||||||
|
Cash
and cash equivalents
|
$ |
193,438,035
|
$ |
350,772,343
|
||||
|
Derivatives
|
2,250,315
|
2,030,481
|
||||||
|
Collateral
received for securities loaned
|
633,836,151
|
532,223,051
|
||||||
|
U.S.
bonds and notes
|
1,798,435,833
|
1,842,615,949
|
||||||
|
Non-U.S.
bonds and notes
|
124,490,738
|
135,348,594
|
||||||
|
Halliburton
stock
|
340,448,470
|
378,905,599
|
||||||
|
Other
U.S. stock
|
1,157,918,463
|
1,031,147,338
|
||||||
|
Non-U.S.
stock
|
672,023,819
|
490,670,073
|
||||||
|
Common/collective
trust funds
|
770,696,209
|
644,633,745
|
||||||
|
Mutual
funds
|
262,876,450
|
228,964,981
|
||||||
|
Securities
loaned -
|
||||||||
|
U.S.
bonds and
notes
|
391,476,097
|
362,491,919
|
||||||
|
Other
U.S. stock
|
188,830,671
|
127,777,298
|
||||||
|
Non-U.S.
stock
|
43,565,784
|
31,517,552
|
||||||
|
Total
investments
|
6,580,287,035
|
6,159,098,923
|
||||||
|
Receivables
-
|
||||||||
|
Receivables
for investments
sold
|
383,326,380
|
133,665,454
|
||||||
|
Dividends
|
2,516,104
|
2,036,423
|
||||||
|
Interest
|
22,913,222
|
17,740,202
|
||||||
|
Other
|
660,036
|
180,485
|
||||||
|
Total
receivables
|
409,415,742
|
153,622,564
|
||||||
|
Total
assets
|
6,989,702,777
|
6,312,721,487
|
||||||
|
Liabilities:
|
||||||||
|
Payables
for investments
purchased
|
702,465,690
|
523,408,403
|
||||||
|
Obligation
for collateral
received for securities loaned
|
633,836,151
|
532,223,051
|
||||||
|
Other
payables
|
7,209,486
|
8,357,798
|
||||||
|
Total
liabilities
|
1,343,511,327
|
1,063,989,252
|
||||||
|
Adjustments
from fair value to
contract value for
|
||||||||
|
fully
benefit-responsive
investment contracts 1
|
(19,493,698 | ) | (22,852,041 | ) | ||||
|
Net
Assets
|
$ |
5,626,697,752
|
$ |
5,225,880,194
|
||||
|
Plan’s
interest in Master Trust net assets at fair value
|
$ |
515,846,647
|
$ |
533,654,185
|
||||
|
Adjustments
from fair value to contract value for interest
|
||||||||
|
in
Master Trust relating to fully
benefit-responsive
|
||||||||
|
investment
contracts
|
(2,495,473 | ) | (3,117,614 | ) | ||||
|
Plan’s
interest in Master Trust net assets
|
$ |
513,351,174
|
$ |
530,536,571
|
||||
|
Plan’s
percentage interest in Master Trust net assets
|
9.12 | % | 10.15 | % | ||||
|
|
1
Represents
the difference between fair market value of the underlying security
and
the contract value for certain investment contracts (see note
2b).
|
|
Years
ended
|
||||||||
|
December
31,
|
||||||||
|
Net
Investment Activity
|
2006
|
2005
|
||||||
|
Net
investment appreciation
|
$ |
391,308,872
|
$ |
311,605,507
|
||||
|
Investment
income
|
179,141,421
|
161,566,345
|
||||||
|
Expenses
|
(19,688,994 | ) | (17,919,390 | ) | ||||
|
Net
investment
activity
|
$ |
550,761,299
|
$ |
455,252,462
|
||||
|
Years
ended
|
||||||||
|
December
31,
|
||||||||
|
Net
Appreciation (Depreciation) by Investment Type
|
2006
|
2005
|
||||||
|
Cash
and cash equivalents
|
$ |
546,457
|
$ |
1,491,469
|
||||
|
Derivatives
|
(1,594,391 | ) | (1,827,998 | ) | ||||
|
U.S.
bonds and notes
|
2,074,818
|
(6,440,446 | ) | |||||
|
Non-U.S.
bonds and notes
|
1,235,827
|
(1,050,642 | ) | |||||
|
Halliburton
stock
|
4,369,833
|
150,792,801
|
||||||
|
Other
U.S. stock
|
152,055,402
|
47,386,749
|
||||||
|
Non-U.S.
stock
|
137,004,749
|
84,671,119
|
||||||
|
Common/collective
trust funds
|
77,075,690
|
31,913,527
|
||||||
|
Mutual
funds
|
15,301,698
|
1,102,891
|
||||||
|
Other
investments
|
3,238,789
|
3,566,037
|
||||||
|
Total
appreciation
|
$ |
391,308,872
|
$ |
311,605,507
|
||||
|
|
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 strategies such 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 Investment
Committee 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
net investment appreciation in the statements of changes in participating
plans’ net assets 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.
|
|
|
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:
|
||||||||
|
Stable
Value Premixed
Portfolio
|
$ |
222,344,980
|
$ |
249,768,506
|
||||
|
Moderate
Premixed
Portfolio
|
197,888,924
|
196,830,787
|
||||||
|
Aggressive
Premixed
Portfolio
|
31,627,994
|
28,466,913
|
||||||
|
|
The
Internal Revenue Service (IRS) informed the Company by a letter dated
August 24, 2004 that the Plan and related trust were designed in
accordance with the applicable provisions of the IRC. The Plan
has been amended, 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.
|
|
|
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.
|
|
|
Effective
April 30, 2006, as a result of the sale of certain assets of Kellogg
Brown
and Root, Ltd. to Production Services Network (PSN), the accounts
of
participants transferring to PSN were spun off. The total
transferred to PSN’s Defined Contribution Plan on May 24, 2006 was
$560,595.
|
|
|
KBR,
Inc. (KBR) and all subsidiaries separated from Halliburton by means
of a
split-off exchange offer on April 5, 2007. The separation was
initiated on November 21, 2006 through an initial public offering
(IPO) of
less than 20% of KBR common stock. During the first quarter of
2007 Halliburton extended an offer to its shareholders to exchange
shares
of Halliburton common stock for shares of KBR. The split-off
exchange offer resulted in the disposal of Halliburton’s remaining
interest in KBR. Plan assets were transferred from the
Halliburton Employee Benefit Master Trust into the KBR Employee Benefit
Master Trust in February, 2007.
|
|
|
The
separation of KBR from Halliburton initiated a change in the duties
of the
Investment Committee and change from the Halliburton Investment Committee
to the KBR Investment Committee upon the transfer of plan assets
to the
KBR Employee Benefit Master Trust. The United States Trust
Company is the Independent Stock Fund Fiduciary and is charged with
the
responsibilities for management of the KBR Stock
Funds.
|
|
|
Effective
January 1, 2007, the ESOP is no longer offered for the investment
of
contributions allocated to participants’ accounts. Beginning
January 1, 2007 through December 13, 2007 a participant may transfer
funds
from the ESOP account to non-ESOP accounts, but no election can be
made to
invest in the ESOP account. Any designation to the Halliburton
Stock fund as of December 27, 2006 will be deemed to have designated
instead that future contributions be invested in the Moderate Premixed
Investment Portfolio Fund under non-ESOP accounts, until such time
the
participant designates other funds for future
contributions. The KBR Stock fund was created in April, 2007 as
part of the separation from Halliburton, however no participant was
able
to designate an investment to the KBR Stock fund. Effective
December 14, 2007, the Halliburton Stock Fund and the KBR Stock Fund
will
be eliminated.
|
|
|
Effective
January 1, 2007, participants who complete one Hour of Service on
or after
January 1, 2007 will be 100% vested in the Company discretionary
retirement allocation contribution account after six years of
service.
|
|
|
Effective
April 5, 2007, the Board of Directors of KBR or other individuals
as
specified in the Plan 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.
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
|
Identity
of issue,
|
|||||
|
borrower,
lessor,
|
Description
of
|
Current
|
|||
|
or
similar party
|
investment
|
Cost
|
Value
|
||
|
*
|
Halliburton
Company
|
Investment
in net assets of
|
|||
|
Employee
Benefit
|
Halliburton
Company
|
||||
|
Master
Trust
|
Employee
Benefit
Master
|
||||
|
Trust
|
**
|
$
|
513,351,174
|