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, 1998
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:
Brown & Root, Inc. Employees' Retirement and Savings Plan
Halliburton Benefits Center
4100 Clinton Drive
Building 1, Room 130
Houston, Texas 77020
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office.
Halliburton Company, Inc.
3600 Lincoln Plaza
500 N. Akard
Dallas, Texas 75201
<PAGE>
REQUIRED INFORMATION
The following financial statements prepared in accordance with the
financial reporting requirements of ERISA and exhibits are filed for
the Brown & Root Employees' Retirement and Savings Plan:
Financial Statements and Schedules
----------------------------------
Report of Independent Public Accountants - Arthur Andersen LLP
Statements of Net Assets Available for Benefits with Fund
Information as of December 31, 1998 and 1997
Statement of Changes in Net Assets Available for Benefits with
Fund Information for the Year Ended December 31, 1998
Notes to Financial Statements
Item 27(a) - Supplemental Schedule of Assets Held for Investment
Purposes, December 31, 1998
Item 27(d) - Supplemental Schedule of Reportable Transactions for
the Year Ended December 31, 1998
Exhibit
-------
Consent of Independent Public Accountants - Arthur Andersen LLP
(Exhibit 23)
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange
Act of 1934, the administrator and/or the Benefits Committee of
the Brown & Root, Inc. Employees' Retirement and Savings Plan
has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: July 14, 1999
By /s/ Celeste Colgan
----------------------------------
Celeste Colgan, Chairman
Benefits Committee
<PAGE>
BROWN & ROOT, INC. EMPLOYEES'
RETIREMENT AND SAVINGS PLAN
Financial Statements
As Of December 31, 1998 And 1997,
And Supplemental Schedules
As Of December 31, 1998
Together With Report Of Independent Public Accountants
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Benefits Committee of the
Brown & Root, Inc. Employees'
Retirement and Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Brown & Root, Inc. Employees' Retirement and Savings Plan (the
"Plan") as of December 31, 1998 and 1997, and the related statements of changes
in net assets available for plan benefits for the year ended December 31, 1998.
These financial statements and the supplemental schedules referred to below are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and supplemental schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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, 1998 and 1997, and the statement of changes in its net assets
available for plan benefits for the year ended December 31, 1998, in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are 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 Fund Information in the
statements of net assets available for plan benefits and the statements of
changes in net assets available for plan benefits is presented for the purpose
of additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and Fund Information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
As further discussed in Note 8 to the accompanying financial statements, on
December 31, 1998, certain net assets of the Plan were transferred into the
Halliburton Profit Sharing and Savings Plan, now renamed the Halliburton
Retirement and Savings Plan.
ARTHUR ANDERSEN LLP
Dallas, Texas,
July 14, 1999
<PAGE>
<TABLE>
<CAPTION>
BROWN & ROOT, INC.
EMPLOYEES' RETIREMENT AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
General Fixed Halliburton Equity
Investment Income Stock Investment
Fund Fund Fund Fund Total
------------- ------------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Participation in Master Trust,
at fair value $814,779,081 $587,062,215 $17,566,879 $217,708,158 $1,637,116,333
Employer contributions
receivable 2,501 4,434 204 1,553 8,692
Plan participants' contributions
receivable 177,666 417,164 8,792 189,219 792,841
------------- ------------- ------------ ------------- ---------------
Total assets 814,959,248 587,483,813 17,575,875 217,898,930 1,637,917,866
------------- ------------- ------------ ------------- ---------------
LIABILITIES:
Payable to Halliburton Profit
Sharing and Savings Plan (383,173,508) (212,399,956) (11,377,081) (144,287,865) (751,238,410)
Accrued liabilities (481,861) (179,443) (1,218) (37,526) (700,048)
------------- ------------- ------------ ------------- ---------------
Total liabilities (383,655,369) (212,579,399) (11,378,299) (144,325,391) (751,938,458)
------------- ------------- ------------ ------------- ---------------
INTERFUND RECEIVABLES
(PAYABLES) 204,359 (337,957) (35,386) 168,984 -
------------- ------------- ------------ ------------- ---------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $431,508,238 $374,566,457 $ 6,162,190 $ 73,742,523 $ 885,979,408
============= ============= ============ ============= ===============
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BROWN & ROOT, INC.
EMPLOYEES' RETIREMENT AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
General Fixed Halliburton Equity
Investment Income Stock Investment
Fund Fund Fund Fund Total
------------- ------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Participation in Master Trust,
at fair value $790,910,875 $540,949,582 $ 21,954,010 $180,822,337 $1,534,636,804
Employer contributions
receivable 36,800,661 1,498,440 792,290 4,925,592 44,016,983
Plan participants' contributions
receivable 475,186 2,857,386 - 820,467 4,153,039
Other receivables 41,299 101,502 2,963 - 145,764
------------- ------------- -------------- ------------- ---------------
Total assets 828,228,021 545,406,910 22,749,263 186,568,396 1,582,952,590
------------- ------------- -------------- ------------- ---------------
LIABILITIES:
Accrued liabilities (1,101,669) (47,239) (3,926) (25,776) (1,178,610)
Excess contributions (5,829) (114,523) - (5,967) (126,319)
------------- ------------- -------------- ------------- ---------------
Total liabilities (1,107,498) (161,762) (3,926) (31,743) (1,304,929)
------------- ------------- -------------- ------------- ---------------
INTERFUND RECEIVABLES
(PAYABLES) 3,928 (34) (530) (3,364) -
------------- ------------- -------------- ------------- ---------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $827,124,451 $545,245,114 $ 22,744,807 $186,533,289 $1,581,647,661
============= ============= ============== ============= ===============
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BROWN & ROOT, INC.
EMPLOYEES' RETIREMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
General Fixed Halliburton Equity
Investment Income Stock Investment
Fund Fund Fund Fund Total
------------- -------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS:
Employer $ 979,973 $ 392,931 $ 42,479 $ 339,187 $ 1,754,570
Plan participants 6,854,491 20,750,809 183,432 7,851,897 35,640,629
ALLOCATION OF MASTER TRUST
NET INVESTMENT ACTIVITY 96,725,325 40,270,526 (10,292,855) 26,738,743 153,441,739
------------- -------------- -------------- -------------- ----------------
104,559,789 61,414,266 (10,066,944) 34,929,827 190,836,938
------------- -------------- -------------- -------------- ----------------
LESS:
Benefits paid to participants (60,011,493) (60,015,102) (987,820) (13,628,978) (134,643,393)
Excess contributions 5,829 114,523 - 5,967 126,319
Administrative expenses (380,536) (270,373) (9,662) (89,136) (749,707)
------------- -------------- -------------- -------------- ----------------
(60,386,200) (60,170,952) (997,482) (13,712,147) (135,266,781)
------------- -------------- -------------- -------------- ----------------
NET INCREASE (DECREASE) 44,173,589 1,243,314 (11,064,426) 21,217,680 55,570,157
TRANSFER TO HALLIBURTON
PROFIT SHARING AND
SAVINGS PLAN (383,173,508) (212,399,956) (11,377,081) (144,287,865) (751,238,410)
TRANSFERS BETWEEN FUNDS (56,616,294) 40,477,985 5,858,890 10,279,419 -
NET ASSETS AVAILABLE FOR
PLAN BENEFITS,
beginning of year 827,124,451 545,245,114 22,744,807 186,533,289 1,581,647,661
------------- -------------- -------------- -------------- ----------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of year $431,508,238 $ 374,566,457 $ 6,162,190 $ 73,742,523 $ 885,979,408
============= ============== ============== ============== ================
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>
</TABLE>
<PAGE>
BROWN & ROOT, INC.
EMPLOYEES' RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
1. SUMMARY OF THE PLAN:
--------------------
The following brief description of the Brown & Root, Inc. Employees' Retirement
and Savings Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan agreement for more complete information.
Participation
- -------------
The Plan is a trusteed, defined contribution profit-sharing pension plan
covering eligible employees of Brown & Root Holdings, Inc. (the "Company" or the
"Employer"), a Delaware corporation and a wholly owned subsidiary of Halliburton
Company, and those subsidiaries and affiliated companies (collectively, the
"Employers") which have adopted the Plan, as amended. Employees covered by a
collective bargaining agreement are not eligible to participate in the Plan
unless the Plan has been adopted as a part of such agreement. An employee is
eligible for participation in the Plan on the first day of the month following
the completion of one year of service with his/her employer. The administrative
committee of the Plan consists of members appointed by the Board of Directors of
the Company.
Contributions
- -------------
Employer contributions consist of an annual profit-sharing contribution and a
monthly 401(k) matching contribution.
At the authorization of the Board of Directors, the Company contributes to the
Plan a profit-sharing amount to be allocated to each participant based on the
proportion that each participant's weighted eligible earnings, as defined by the
Plan agreement, bear to the total weighted eligible earnings of all participants
entitled to an allocation. Weighted eligible earnings are determined by
multiplying a participant's eligible earnings by a factor based on the
participant's completed years of service as of the end of the Plan year as
follows:
<TABLE>
<CAPTION>
Years of Service Factor
----------------------------- ------
<S> <C>
Less than 4 1/2
At least 4 but less than 10 1
At least 10 but less than 15 2
At least 15 but less than 20 3
20 or more 4
</TABLE>
In order to be eligible for such contribution, the participant must be actively
employed by the Company on December 31 of the Plan year for which the
contribution applies unless the participant meets certain other conditions
specified by the Plan.
Participants may elect to contribute to the Plan on a pretax basis a percentage
of their eligible earnings, as defined by the Plan, provided that the total
dollar amount of these pretax deferrals during the year does not exceed the
applicable dollar limitation imposed by Treasury Regulations.
<PAGE>
2
The Employer shall contribute each month an amount equal to 25% of the
participant's contribution during such month up to a maximum of $250 per year.
Additionally, participants may elect to make after-tax contributions to the Plan
not to exceed 15% of their eligible earnings during the Plan year.
Investment Options
- ------------------
The assets of the Plan are combined with assets of certain other benefit plans
of affiliated companies in the Halliburton Company Employee Benefit Master Trust
(the "Master Trust"). The Master Trust is comprised of the following investment
options:
o General Investment Fund (GIF) - The GIF is a diversified fund that
invests primarily in foreign and domestic stocks and bonds and is
structured for long-term growth. The individual securities in the GIF
are managed by several registered professional investment managers
selected by the investment committee, which is appointed by the Board
of Directors of Halliburton Company.
o Fixed Income Fund (FIF) - The FIF is a diversified fund that places the
preservation of principal as its primary objective. Investments of the
FIF include primarily insurance investment contracts, asset-backed
investment contracts, bank investment contracts, and domestic bonds. As
in the GIF, the investment committee uses professional investment
managers to manage individual securities, with the exception of the
bank and insurance contracts which are not actively traded.
o Halliburton Stock Fund (HSF) - The HSF is not a diversified fund and
invests only in the common stock of Halliburton Company.
o Equity Investment Fund (EIF) - The EIF invests primarily in U.S. stocks
and non-U.S. stocks, generally the same stocks which comprise part of
the GIF.
Plan participants may direct their contributions, as well as their portion of
Company contributions, between the FIF, the GIF, the HSF and the EIF, as
defined by the Plan agreement. Plan participants are allowed to transfer up to
15% of their profit-sharing account and Company match account balances to the
HSF.
Benefits Paid to Participants
- -----------------------------
Upon application and approval by the Plan's administrative committee, a
participant may withdraw, during active employment, all or part of the balance
in his/her employee contribution account and, under certain conditions, the
vested portion of his/her Employer contribution account. Participants have a
vested interest in the Company contribution account based on years of service as
follows:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
-------------------------- -----------------
<S> <C>
Less than 3 0%
At least 3 but less than 4 20
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
</TABLE>
The right to benefits under the Plan is nonforfeitable upon the attainment of
age 55, permanent disability, or death. A retired or disabled participant or the
beneficiary of a deceased participant is entitled to receive the total amounts
in the participant and Employer contribution accounts as of the date of
retirement, full and permanent disability, or death, whether his/her interest in
such accounts is vested or not. Benefits are recorded when paid.
<PAGE>
3
Forfeitures
- -----------
Forfeitures represent the nonvested portion of a terminated participant's profit
sharing account. Forfeitures are allocated at each year-end ($652,818 and
$748,592 in 1998 and 1997, respectively) to all active participants eligible for
an Employer contribution for such year. The allocation is based on the same
method as that of the Employer contribution discussed above.
Allocation of Income
- --------------------
The income or loss of the GIF, FIF, HSF, and EIF is allocated to participants'
accounts daily. The allocation to each participant's account is made in the form
of an increase or decrease in the net asset value per unit on a daily basis.
Plan Amendment, Modification, and Termination
- ---------------------------------------------
The Board of Directors of the Company may amend, modify, or terminate the Plan
at any time. No such termination is contemplated, but if it should occur, the
accounts of all participants would be immediately fully vested and paid in
accordance with the terms of the Plan.
2. SIGNIFICANT ACCOUNTING POLICIES:
--------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are prepared using the accrual method of
accounting.
Allocation of Master Trust Net Investment Activity
- --------------------------------------------------
The allocation of the Master Trust net investment activity represents the Plan's
share of the net investment income or loss on investments held by the Master
Trust. The net investment income or loss is the realized gain or loss from
investments sold, change in the unrealized net gain or loss on investments,
dividend income, and interest income less related expenses recorded by the
Master Trust (see Note 3).
Accrued Expenses
- ----------------
Accrued expenses represent amounts owed for Plan expenses as of the end of the
year and amounts due to participants to whom benefit checks have been written
but have not been cashed for periods greater than 90 days.
Valuation of Plan Assets
- ------------------------
As of May 1, 1998, the Plan assets are valued by the Trustee on a daily basis.
Participants were in an activity "black out" period from April 3, 1998, to June
1, 1998, due to the change in recordkeeper to Hewitt Associates, Inc. ("Hewitt")
as of May 1, 1998. During this period, participants were unable to make any
requests for withdrawals, transfer funds, or reallocate balances. Subsequent to
June 1, 1998, participants were able to request qualified withdrawals, transfer
funds, and reallocate balances on a daily basis.
Administrative Expenses
- -----------------------
Administrative expenses which are related to compliance and operational
activities as defined by the Department of Labor may be charged against the Plan
assets at the discretion of the Plan administrator and in accordance with the
terms of the Plan. Certain expenses of the Plan are paid by the Company. The
Plan is not liable to the Company for these expenses paid on its behalf.
<PAGE>
4
Excess Contributions
- --------------------
Excess contributions represent pretax and after-tax amounts contributed to
participant accounts which exceeded the statutory limits, as defined by the
Internal Revenue Code, and earnings thereon. These amounts were refunded to
participants subsequent to year-end and were included in the participant's 1998
and 1997 personal income.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
Use of Estimates
- ----------------
Preparation of the Plan's financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the Plan's
financial statements and the reported amounts of income and expenses during the
reporting periods. Actual results could differ from those estimates.
3. MASTER TRUST:
-------------
The assets of the Plan are combined with the assets of certain other benefit
plans of affiliated companies in the Master Trust. There are four funds within
the Master Trust: the GIF, FIF, HSF, and EIF. The combination of the Plans'
assets is only for investment purposes, and each plan continues to be operated
under its current plan agreement, as amended. All assets of the Master Trust are
held by State Street Bank and Trust ("State Street").
The funds within the Master Trust hold bank, insurance and investment contracts
providing a fully benefit-responsive feature. These investments are stated at
contract value, which approximates fair value. Where the Trust owns the
underlying securities of asset-backed investment contracts, the contracts are
stated at fair market value of the underlying securities plus an adjustment for
the difference between fair market value of the underlying securities and
contract value. Contract value represents the principal balance of the
investment plus accrued interest at the stated contract rate, less payments
received and contract charges by the insurance company or bank.
Cash equivalents, derivative financial instruments, stock securities, bonds and
notes and all other debt securities are presented at their quoted market value.
Realized and unrealized changes in market values are recognized in the period in
which the changes occur.
The GIF invests in the EIF to obtain its equity exposure. The EIF operates on a
unitized basis. All EIF investments are valued at the end of the day. The unit
price is calculated by dividing the total value of the assets by the total
number of units in existence. Contributions into and withdrawals from the EIF,
in the course of a day, are used to buy and sell units at the preceding day's
closing unit price.
Real estate mortgages are stated at cost plus accrued interest less payments
received.
Real estate holdings are stated at their estimated market values as determined
by an independent appraiser.
The assets of the Plan were held by the Master Trust during 1998 and 1997 (as
described above) and, accordingly, investment activity for 1998 and 1997 was
recorded by the Master Trust. All investment transactions are accounted for on
the trade date basis in accordance with generally accepted accounting
principles. The Master Trust investment activity is included in the summary
statements below.
<PAGE>
5
The following are the Master Trust statements of net assets as of December 31,
1998 and 1997, and the statements of changes in net assets for the years ended
December 31, 1998 and 1997 (dollar amounts in thousands):
<TABLE>
<CAPTION>
1998
----------------------------------------------------
Statement of Net Assets GIF FIF HSF EIF
----------------------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Cash and equivalents $ 23,890 $ 135,523 $ (108) $ 59,137
Receivables 9,268 14,504 3 2,942
Asset-backed investment contracts - (50,451) - -
U.S. corporate and government
bonds and notes 596,029 1,059,646 - -
Non-U.S. bonds 59,219 119,812 - 909
Non-U.S. stock 1,075 - - 522,589
Halliburton stock - - 103,024 -
Insurance investment contracts - 36,141 - -
Other U.S. stock 18,737 7,809 - 1,234,755
Pooled bond fund 57,181 5,570 - -
Real estate and related investments 130 - - -
GIF participation in EIF 1,327,950 - - (1,327,950)
Payables (50,825) (69,373) (45) (8,338)
----------- ----------- --------- -----------
Net assets of the Master Trust $2,042,654 $1,259,181 $102,874 $ 484,044
=========== =========== ========= ===========
Plan dollar value interest $ 431,508 $ 374,566 $ 6,162 $ 73,743
=========== =========== ========= ===========
Plan percent interest 21.12% 29.75% 5.99% 15.23%
=========== =========== ========= ===========
Statement of Changes in Net Assets GIF FIF HSF EIF
---------------------------------- ----------- ----------- --------- -----------
Participating plans' net assets,
beginning of year $1,991,913 $1,136,766 $181,012 $ 397,717
Receipts from participating plans 217,682 347,247 21,774 166,385
Net realized gain 38,769 4,265 6,085 170,959
Net unrealized gain (loss) (34,423) (632) (82,097) 64,561
Dividend and interest income, net of
Master Trust expenses 39,969 81,346 1,754 23,190
Withdrawals by participating plans (410,047) (309,811) (25,654) (139,977)
GIF participation in EIF 198,791 - - (198,791)
----------- ----------- --------- -----------
Participating plans' net assets, end of year $2,042,654 $1,259,181 $102,874 $ 484,044
=========== =========== ========= ===========
</TABLE>
<PAGE>
6
<TABLE>
<CAPTION>
Investment Income by Type GIF FIF HSF EIF
------------------------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Cash and equivalents $ (664) $ (65) $ - $ (129)
U.S. corporate and government
bonds and notes 11,159 2,230 - -
Non-U.S. bonds (3,717) 1,148 - (246)
Non-U.S. stock 67 - - 24,367
Other U.S. stock (1,230) 470 - 212,913
Halliburton stock - - (76,012) -
Real estate 101 - - -
Options 40 - - -
Forward contracts 586 - - (96)
Other investments (1,997) (150) - (1,289)
----------- ----------- --------- -----------
Total appreciation (depreciation) $ 4,345 $ 3,633 $(76,012) $ 235,520
=========== =========== ========= ===========
1997
----------------------------------------------------
Statement of Net Assets GIF FIF HSF EIF
----------------------- ----------- ----------- --------- -----------
Cash and equivalents $ 31,247 $ 113,099 $ 467 $ 73,160
Receivables 9,849 13,990 3 2,623
Asset-backed investment contracts - (41,970) - -
U.S. corporate bonds and
government bonds and notes 502,030 956,763 - -
Non-U.S. bonds 121,967 135,677 - 1,169
Non-U.S. stock - - - 413,086
Halliburton stock - - 180,563 -
Insurance investment contracts - 45,525 - -
Other U.S. stock 14,500 11,370 - 1,127,707
Pooled equity funds - - - 32,215
Pooled bond funds 119,998 11,183 - -
Real estate and related 4,333 - - -
GIF participation in EIF 1,251,159 - - (1,251,159)
Payables (63,170) (108,871) (21) (1,084)
----------- ----------- --------- -----------
Net assets of the Master Trust $1,991,913 $1,136,766 $181,012 $ 397,717
=========== =========== ========= ===========
Plan dollar value interest $ 790,911 $ 540,950 $ 21,954 $ 180,822
=========== =========== ========= ===========
Plan percent interest 39.71% 47.59% 12.13% 45.47%
=========== =========== ========= ===========
</TABLE>
The Master Trust makes use of several investment strategies involving the
limited use of derivative instruments. The Master Trust's management, as a
matter of policy and with risk management as their primary objective, monitors
such risk indicators as duration and where applicable, counter-party credit
risk. These are monitored for both 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 combining statements of changes in net assets.
<PAGE>
7
4. INVESTMENTS:
------------
Individual investments in excess of 5% of net assets available for plan benefits
are as follows:
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Master Trust - GIF $814,779,081 $790,910,875
Master Trust - FIF 587,062,215 540,949,582
Master Trust - EIF 217,708,158 180,822,337
</TABLE>
5. FEDERAL INCOME TAXES:
---------------------
The Plan obtained its latest determination letter on September 26, 1995, in
which the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Internal Revenue Code (the
"Code"). The Plan has been amended since receiving the determination letter.
However, management believes, based on consultation with legal counsel, that the
Plan is currently designed and operated in compliance with the applicable
requirements of the Code. Therefore, they believe that the Plan was qualified
under Section 401(a) of the Code and the related trust was tax exempt under
Section 501(a) of the Code as of December 31, 1998 and 1997.
6. RELATED-PARTY TRANSACTIONS:
---------------------------
State Street Trust is the trustee defined by the Plan. The assets of the Plan
are held by the Master Trust, of which State Street is also the trustee.
Therefore these assets qualify as party-in-interest.
7. UNITS OF PARTICIPATION:
-----------------------
The Plan assigns units of participation to participants. As of April 30, 1998,
all of the investment options were reunitized to $10.0000 net asset value per
unit. The following details the total number of units and net asset value per
unit as of December 31, 1998 and 1997:
<TABLE>
<CAPTION>
Fund Units Net Asset Value Per Unit
- ---- ----------- ------------------------
<S> <C> <C>
1998
- ----
GIF 20,430,436 $21.1209
FIF 215,926,274 1.7347
HSF 765,737 8.0474
EIF 10,379,723 7.1045
1997
- ----
GIF 624,386,239 1.3247
FIF 474,249,903 1.1497
HSF 10,527,080 2.1606
EIF 126,540,457 1.4741
</TABLE>
8. ASSET TRANSFER:
---------------
As of December 31, 1998, $751,238,410 of the net assets of this plan were merged
into the Halliburton Profit Sharing and Savings Plan ("HPSSP"). The participant
accounts included in this transfer were all active employees on December 31,
1998, who were not classified as craft employees. As a result of the transfer,
all active non-craft employees ceased participation in the Plan and became
active participants in the HPSSP and all participant account balances were
transferred to HPSSP. Non-craft employees include all technical, professional,
and administrative personnel of Brown & Root, Inc.
<PAGE>
8
<TABLE>
<CAPTION>
SCHEDULE I
BROWN & ROOT, INC.
EMPLOYEES' RETIREMENT AND SAVINGS PLAN
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
EIN: 75-2677995
PLAN #: 001
(a) (b) (c) (d) (e)
Identity of Issue, Borrower, Current
Lessor, or Similar Party Description of Investment Cost Value
- ------ ----------------------------- ---------------------------------------- ------------ ------------
<S> <C> <C> <C> <C>
* Halliburton Company Employee Investment in Net Assets of Halliburton
Benefit Master Trust Company Employee Benefit Master
Trust - General Investment Fund $334,376,221 $431,508,238
* Halliburton Company Employee Investment in Net Assets of Halliburton
Benefit Master Trust Company Employee Benefit Master
Trust - Fixed Income Fund 334,160,160 374,566,457
* Halliburton Company Employee Investment in Net Assets of Halliburton
Benefit Master Trust Company Employee Benefit Master
Trust - Halliburton Stock Fund 16,405,359 6,162,190
* Halliburton Company Employee Investment in Net Assets of Halliburton
Benefit Master Trust Company Employee Benefit Master
Trust - Equity Investment Fund 47,231,822 73,742,523
<FN>
* Column (a) indicates each identified person/entity known to be a party-in-interest.
This supplemental schedule lists assets held for investment purposes at December
31, 1998, as required by the Department of Labor Rules and Regulations for
Reporting and Disclosure.
</FN>
</TABLE>
<PAGE>
9
<TABLE>
<CAPTION>
SCHEDULE II
BROWN & ROOT, INC.
EMPLOYEES' RETIREMENT AND SAVINGS PLAN
ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
EIN: 75-2677995
PLAN #: 001
(a) (b) (c) (d) (g) (i)
Net Gain
Purchase Selling Cost (Loss)
Identity of Party Involved Description of Asset Price Price of Asset on Sale
- ------------------------------ ------------------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
<FN>
Note: All reportable transactions are reported as part of the master trust filing.
Categories (e) Lease Rental and (f) Expenses Incurred with Transactions do not
apply to any of these transactions.
This supplemental schedule lists individual and series transactions in excess of
5% of the fair market value of plan assets at the beginning of the year as
required by the Department of Labor Rules and Regulations for Reporting and
Disclosure.
</FN>
</TABLE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports included in this Form 11-K, into the Company's previously filed
Registration Statement File No. 333-55747.
ARTHUR ANDERSEN LLP
Dallas, Texas,
July 14, 1999
