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:
Halliburton Retirement and Savings Plan
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 Halliburton Retirement and Savings Plan, previously named the
Halliburton Profit Sharing 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 as of 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 Halliburton 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>
HALLIBURTON PROFIT SHARING
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
Halliburton Profit Sharing and Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Halliburton Profit Sharing and Savings Plan (the "Plan") as of
December 31, 1998 and 1997, and the related statement 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 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 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 statement of
changes in its 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 1 to the accompanying financial statements, on June
1, 1998, the Plan received all of the net assets of the Halliburton Prior
Accounts Retirement Plan, as a result of the merger of these plans. On December
31, 1998, the Plan received all of the net assets of the M.W. Kellogg Savings
and Investment Plan, the Dresser Industries, Inc. Retirement Savings Plan A, and
the Dresser Industries, Inc. Retirement Savings Plan B, as a result of the
mergers of these plans. Additionally, the Plan received certain plan assets from
the spin-off of certain participation in the Brown & Root, Inc. Employees'
Retirement and Savings Plan.
As discussed in Note 8 to the accompanying financial statements, subsequent to
December 31, 1998, the name of the Plan was changed to the Halliburton
Retirement and Savings Plan.
ARTHUR ANDERSEN LLP
Dallas, Texas,
July 14, 1999
<PAGE>
1
<TABLE>
<CAPTION>
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
-------------- --------------- --------------- ------------------ ------------------ ------------------
Assets, Assets, Assets, Assets,
Receivable Receivable Receivable Receivable
Assets, from from from from
Assets, Plan M.W. Kellogg Dresser Industries Dresser Industries Brown & Root, Inc.
Company Participants' Savings and Retirement Retirement Employees'
Contributions Contributions Investment Savings Savings Retirement and
Receivable Receivable Plan Plan A Plan B Savings Plan
-------------- --------------- --------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
General
Investment
Fund $ 124,789 $ 531,203 $ - $ - $ - $ 383,173,508
Fixed Income
Fund 132,916 500,017 - - - 212,399,956
Halliburton
Stock Fund 2,951 13,374 - - - -
Equity
Investment
Fund 123,125 547,922 - - - 144,287,865
Company
Stock Fund - - 2,115,690 36,116,759 1,248,059 11,377,081
Barr
Rosenburg Small
Capitalization
Fund - - 1,522,314 1,148,826 125,853 -
Davis New York
Venture Fund - - 2,370,234 64,124,362 3,478,172 -
Vanguard Index
Trust-500
Portfolio - - 161,266,791 59,685,159 5,638,552 -
Vanguard/
Wellington
Fund - - 79,378,803 28,312,251 3,214,857 -
Vanguard
U.S. Growth
Portfolio - - 49,275,570 6,347,991 461,996 -
Vanguard
Retirement
Savings Plan - - 32,541,120 - - -
Vanguard
International
Growth
Portfolio - - 7,073,321 708,301 50,762 -
Vanguard
Small-Cap
Index Fund - - 501,204 418,249 26,769 -
Vanguard Total
Bond Market
Index Fund - - 15,276,676 17,655,467 1,589,662 -
Vanguard
Explorer
Fund - - 5,356,990 364,568 34,087 -
<PAGE>
2
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN (CONT'D)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
-------------- --------------- --------------- ------------------ ------------------ ------------------
Assets, Assets, Assets, Assets,
Receivable Receivable Receivable Receivable
Assets, from from from from
Assets, Plan M.W. Kellogg Dresser Industries Dresser Industries Brown & Root, Inc.
Company Participants' Savings and Retirement Retirement Employees'
Contributions Contributions Investment Savings Savings Retirement and
Receivable Receivable Plan Plan A Plan B Savings Plan
-------------- --------------- --------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Vanguard
Total
International
SIF - - 234,226 107,100 2,098 -
Vanguard
Windsor II
Fund - - 3,599,969 89,581,416 4,774,505 -
Vanguard Prime
Fund - - 71,498,802 5,248,444 650,551 -
Stable
Value Fund - - - 90,880,885 7,684,109 -
Loans
Receivable from
Participants - - 6,405,816 11,487,179 1,897,145 -
Total 383,781 1,592,516 438,417,526 412,186,957 30,877,177 751,238,410
<PAGE>
3
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN (CONT'D)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
--------------- --------------- -------------- ------------- ------------ --------------
Assets, Net Assets
Participation * Available
in Master Liabilities, Interfund for
Trust, at Fair Total Accrued Total Receivables Plan
Value Assets Expenses Liabilities (Payables) Benefits
--------------- --------------- -------------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
General
Investment
Fund $1,205,221,197 $1,589,050,697 $ (115,429) $ (115,429) $ 653,226 $1,589,588,494
Fixed Income
Fund 672,119,102 885,151,991 (61,738) (61,738) (444,760) 884,645,493
Halliburton
Stock Fund 85,306,804 85,323,129 - - 34,574 85,357,703
Equity
Investment
Fund 266,336,154 411,295,066 (45,692) (45,692) (243,040) 411,006,334
Company Stock
Fund - 50,857,589 - - - 50,857,589
Barr
Rosenburg Small
Capitalization
Fund - 2,796,993 - - - 2,796,993
Davis New York
Venture Fund - 69,972,768 - - - 69,972,768
Vanguard Index
Trust-500
Portfolio - 226,590,502 - - - 226,590,502
Vanguard/
Wellington
Fund - 110,905,911 - - - 110,905,911
Vanguard
U.S. Growth
Portfolio - 56,085,557 - - - 56,085,557
Vanguard
Retirement
Savings Plan - 32,541,120 - - - 32,541,120
Vanguard
International
Growth
Portfolio - 7,832,384 - - - 7,832,384
Vanguard
Small-Cap
Index Fund - 946,222 - - - 946,222
Vanguard Total
Bond Market - 34,521,805 - - - 34,521,805
Index Fund
Vanguard
Explorer
Fund - 5,755,645 - - - 5,755,645
<PAGE>
4
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN (CONT'D)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
--------------- --------------- -------------- ------------- ------------ --------------
Assets, Net Assets
Participation * Available
in Master Liabilities, Interfund for
Trust, at Fair Total Accrued Total Receivables Plan
Value Assets Expenses Liabilities (Payables) Benefits
--------------- --------------- -------------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Vanguard
Total
International
SIF - 343,424 - - - 343,424
Vanguard
Windsor II
Fund - 97,955,890 - - - 97,955,890
Vanguard Prime
Fund - 77,397,797 - - - 77,397,797
Stable
Value Fund - 98,564,994 - - - 98,564,994
Loans
Receivable from
Participants - 19,790,140 - - - 19,790,140
Total 2,228,983,257 3,863,679,624 (222,859) (222,859) - 3,863,456,765
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>
</TABLE>
<PAGE>
5
<TABLE>
<CAPTION>
HALLIBURTON PROFIT SHARING 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:
Company contributions receivable $ 60,039,686 $ 272,536 $ - $ 204,200 $ 60,516,422
Plan participants' contributions
receivable 518,835 602,218 - 529,275 1,650,328
Other receivables 53,428 59,083 888 5,159 118,558
Participation in Master Trust,
at fair value 1,165,586,649 579,025,670 159,058,037 214,342,154 2,118,012,510
---------------- ------------- ------------- ------------- ---------------
Total assets 1,226,198,598 579,959,507 159,058,925 215,080,788 2,180,297,818
---------------- ------------- ------------- ------------- ---------------
LIABILITIES:
Excess contributions (1,121,935) (1,287,350) - (1,241,328) (3,650,613)
Accrued expenses (73,667) (42,827) (5,233) (12,482) (134,209)
---------------- ------------- ------------- ------------- ---------------
Total liabilities (1,195,602) (1,330,177) (5,233) (1,253,810) (3,784,822)
---------------- ------------- ------------- ------------- ---------------
INTERFUND RECEIVABLES
(PAYABLES) 3,818 (38,077) 16,954 17,305 -
---------------- ------------- ------------- ------------- ---------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 1,225,006,814 $578,591,253 $159,070,646 $213,844,283 $2,176,512,996
================ ============= ============= ============= ===============
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>
</TABLE>
<PAGE>
6
<TABLE>
<CAPTION>
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
-------------- --------------- ------------- -------------- --------------- -------------- --------------
Allocation
of Master Less,
Contributions, Trust Net Benefits Less, Less, Net Increase
Contributions, Plan Investment Paid to Excess Administrative in
Company Participants Activity Participants Contributions Expenses Net Assets
-------------- --------------- ------------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
General
Investment
Fund $ 3,019,140 $ 13,585,941 $ 142,463,816 $ (92,155,283) $ 1,121,935 $ (443,039) $ 67,592,510
Fixed Income
Fund 3,295,175 13,956,042 44,226,880 (69,967,938) 1,287,350 (212,424) (7,414,915)
Halliburton
Stock Fund 26,311 151,710 (63,964,541) (9,483,308) - (60,150) (73,329,978)
Equity
Investment
Fund 3,026,419 14,452,030 32,833,615 (15,821,871) 1,241,328 (81,534) 35,649,987
Company Stock
Fund - - - - - - -
Barr
Rosenburg Small
Capitalization
Fund - - - - - - -
Davis New York
Venture Fund - - - - - - -
Vanguard Index
Trust-500
Portfolio - - - - - - -
Vanguard/
Wellington
Fund - - - - - - -
Vanguard
U.S. Growth
Portfolio - - - - - - -
Vanguard
Retirement
Savings Plan - - - - - - -
Vanguard
International
Growth
Portfolio - - - - - - -
Vanguard
Small-Cap
Index Fund - - - - - - -
Vanguard Total
Bond Market
Index Fund - - - - - - -
Vanguard
Explorer
Fund - - - - - - -
Vanguard
Total
International
SIF - - - - - - -
<PAGE>
7
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN (CONT'D)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
-------------- --------------- ------------- -------------- --------------- -------------- --------------
Allocation
of Master Less,
Contributions, Trust Net Benefits Less, Less, Net Increase
Contributions, Plan Investment Paid to Excess Administrative in
Company Participants Activity Participants Contributions Expenses Net Assets
-------------- --------------- ------------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Vanguard
Windsor II
Fund - - - - - - -
Vanguard Prime
Fund - - - - - - -
Stable
Value Fund - - - - - - -
Loans
Receivable from
Participants - - - - - - -
Total 9,367,045 42,145,723 155,559,770 (187,428,400) 3,650,613 (797,147) 22,497,604
<PAGE>
8
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN (CONT'D)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
--------------- ---------------- ---------------- -------------- ---------------
Transfers from Transfers from Transfers from Transfers from Transfers from
Other Plans, Other Plans, Other Plans, Other Plans, Other Plans,
M.W. Kellogg Dresser Dresser Halliburton Brown & Root,
Company Industries, Inc. Industries, Inc. Prior Acounts Inc. Employees'
Savings and Retirement Retirement Retirement Retirement and
Investment Plan Savings Plan A Savings Plan B Plan Savings Plan
--------------- ---------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
General
Investment
Fund $ - $ - $ - $ 6,568,807 $ 383,173,508
Fixed Income
Fund - - - 14,657,019 212,399,956
Halliburton
Stock Fund - - - (664,174) -
Equity
Investment
Fund - - - 11,164,443 144,287,865
Company Stock
Fund 2,115,690 36,116,759 1,248,059 - 11,377,081
Barr
Rosenburg Small
Capitalization
Fund 1,522,314 1,148,826 125,853 - -
Davis New York
Venture Fund 2,370,234 64,124,362 3,478,172 - -
Vanguard Index
Trust-500
Portfolio 161,266,791 59,685,159 5,638,552 - -
Vanguard/
Wellington
Fund 79,378,803 28,312,251 3,214,857 - -
Vanguard
U.S. Growth
Portfolio 49,275,570 6,347,991 461,996 - -
Vanguard
Retirement
Savings Plan 32,541,120 - - - -
Vanguard
International
Growth
Portfolio 7,073,321 708,301 50,762 - -
Vanguard
Small-Cap
Index Fund 501,204 418,249 26,769 - -
Vanguad Total
Bond Market
Index Fund 15,276,676 17,655,467 1,589,662 - -
Vanguard
Explorer
Fund 5,356,990 364,568 34,087 - -
Vanguard
Total
International
SIF 234,226 107,100 2,098 - -
<PAGE>
9
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN (CONT'D)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
--------------- ---------------- ---------------- -------------- ---------------
Transfers from Transfers from Transfers from Transfers from Transfers from
Other Plans, Other Plans, Other Plans, Other Plans, Other Plans,
M.W. Kellogg Dresser Dresser Halliburton Brown & Root,
Company Industries, Inc. Industries, Inc. Prior Acounts Inc. Employees'
Savings and Retirement Retirement Retirement Retirement and
Investment Plan Savings Plan A Savings Plan B Plan Savings Plan
--------------- ---------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Vanguard
Windsor II
Fund 3,599,969 89,581,416 4,774,505 - -
Vanguard Prime
Fund 71,498,802 5,248,444 650,551 - -
Stable
Value Fund - 90,880,885 7,684,109 - -
Loans
Receivable from
Participants 6,405,816 11,487,179 1,897,145 - -
Total 438,417,526 412,186,957 30,877,177 31,726,095 751,238,410
<PAGE>
10
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
--------------- ---------------- ----------------
Net Assets
Available for Net Assets
Transfers Plan Benefits, Available for
Between Beginning of Plan Benefits,
Funds Year End of Year
--------------- ---------------- ----------------
<S> <C> <C> <C>
General
Investment
Fund $ (92,753,145) $ 1,225,006,814 $ 1,589,588,494
Fixed Income
Fund 86,412,180 578,591,253 884,645,493
Halliburton
Stock Fund 281,209 159,070,646 85,357,703
Equity
Investment
Fund 6,059,756 213,844,283 411,006,334
Company Stock
Fund - - 50,857,589
Barr
Rosenburg Small
Capitalization
Fund - - 2,796,993
Davis New York
Venture Fund - - 69,972,768
Vanguard Index
Trust-500
Portfolio - - 226,590,502
Vanguard/
Wellington
Fund - - 110,905,911
Vanguard
U.S. Growth
Portfolio - - 56,085,557
Vanguard
Retirement
Savings Plan - - 32,541,120
Vanguard
International
Growth
Portfolio - - 7,832,384
Vanguard
Small-Cap
Index Fund - - 946,222
Vanguard Total
Bond Market
Index Fund - - 34,521,805
Vanguard
Explorer
Fund - - 5,755,645
Vanguard
Total
International
SIF - - 343,424
<PAGE>
11
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN (CONT'D)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
--------------- ---------------- ----------------
Net Assets
Available for Net Assets
Transfers Plan Benefits, Available for
Between Beginning of Plan Benefits,
Funds Year End of Year
--------------- ---------------- ----------------
<S> <C> <C> <C>
Vanguard
Windsor II
Fund - - 97,955,890
Vanguard Prime
Fund - - 77,397,797
Stable
Value Fund - - 98,564,994
Loans
Receivable from
Participants - - 19,790,140
Total - 2,176,512,996 3,863,456,765
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>
</TABLE>
<PAGE>
12
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
1. SUMMARY OF PLAN:
----------------
The Halliburton Profit Sharing and Savings Plan (the "Plan") is a defined
contribution profit sharing pension plan for qualified employees of Halliburton
Company and certain subsidiaries (the "Company"). The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA). On
June 1, 1998, the Plan received $31,726,095 from the Halliburton Prior Accounts
Retirement Plan ("HPAR") as a result of the merger of these Plans. On December
31, 1998, the Plan received $435,390,300, $410,008,764, and $30,615,937 from the
M.W. Kellogg Savings and Investment Plan ("Kellogg"), Dresser Industries, Inc.
Retirement Savings Plan A ("RSPA"), and the Dresser Industries, Inc. Retirement
Savings Plan B ("RSPB"), respectively, as a result of the mergers of these
plans. Additionally, the Plan received $751,238,410 from the spin-off of certain
participation in the Brown and Root, Inc. Employees' Retirement and Savings Plan
("B&R Plan"). These transactions are referred to as the Plan Mergers. The
transfer of assets from the Kellogg, RSPA, RSPB and HPAR plans was due to the
1998 merger of Halliburton Company with Dresser Industries, Inc. The former
participants of these plans now participate in the Plan and their participant
accounts were transferred to the Plan. The Plan Mergers did not have an impact
on the operation of participant accounts, which continued to operate under their
existing plan documents.
Certain assets of the Plan related to pre Plan Merger participants and former
participants in the HPAR and B & R 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 the 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 the 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.
<PAGE>
13
As a result of the Plan Mergers during 1998, the following additional investment
options were included in net plan assets. Some or all of these investments are
available for former participants in the Kellogg, RSPA and RSPB Plans.
Company Stock Fund seeks to provide the potential for long-term growth through
increases in the value of the company stock and reinvestment of its dividends.
Barr Rosenberg Small Capitalization Fund is an equity-indexed mutual fund that
invests at least 65% of its assets in common stocks of issuers with
capitalizations of less than $750 million. It may invest without limit in
foreign securities traded on United States exchanges and seeks a greater return
than the Russell 2000 Index.
Company Stock Fund seeks to provide the potential for long-term growth through
increases in the value of the Company stock and reinvestment of its dividends.
Davis New York Venture Fund - Class A is an equity fund which primarily invests
in stocks of large fundamentally sound growth companies which appear to be
undervalued.
Vanguard Index Trust-500 Portfolio is an equity-indexed mutual fund which
primarily invests in stocks comprising the S&P 500 Index.
Vanguard Wellington Fund is a balanced mutual fund which primarily invests in
common stocks and bonds of established companies.
Vanguard U.S. Growth Fund is an equity mutual fund which primarily invests in
the equity securities of seasoned United States companies with above average
prospects for growth.
Vanguard Retirement Savings Trust is an investment contract fund which primarily
invests in investment contracts issued by financial institutions and backed only
by them or by high-quality bonds.
Vanguard International Growth Fund is a diversified mutual fund which primarily
invests in equity securities of seasoned companies located outside the United
States.
Vanguard Small-Cap Index Fund is an equity-indexed mutual fund which primarily
invests in stocks in the Russell 2000 Index, an unmanaged index of smaller
companies.
Vanguard Total Bond Market Index Fund is a bond indexed fund which primarily
invests in bonds from a variety of industries in an attempt to match the
performance of the total United States bond market as represented by the
unmanaged Lehman Brothers Bond Index.
Vanguard Explorer Fund is a diversified mutual fund which primarily invests in
equity securities of small companies.
Vanguard Total International Stock Index Fund invests primarily in three other
Vanguard Mutual Funds including the European Stock Index Fund, Pacific Stock
Index Fund, and Emerging Markets Stock Index Fund, which provide exposure to
over 300 countries.
Vanguard Windsor II Fund is an equity mutual fund which primarily invests in
large companies whose stocks generally sell at prices below the overall market
average as compared to dividend income and future return potential.
Vanguard Prime Money Market Fund is a short-term investment fund which invests
primarily in securities issued by the United States Treasury and other United
States government agencies.
Stable Value Fund seeks to provide long term growth of capital.
<PAGE>
14
Operations
- ----------
Pre Plan Merger Participants:
- -----------------------------
Excess Company profits, if any, are shared with Plan participants through
Company contributions into each participant's current investment elections.
However, if no elections have been made, the contribution is made to the GIF
Fund. The Company's annual contribution, if any, is allocated to participants
based on the proportion that each participant's basic earnings, as defined by
the Plan agreement, bear to the total basic earnings of all qualified
participants during the Plan year. Participants are immediately vested in their
contributions. Participants active on or after January 1, 1997, become
immediately vested in all Company contributions. Participants who were inactive
prior to January 1, 1997, remain subject to the prior vesting schedule which
provided that participants vest in their Company contributions 20% after three
years of credited service and 20% each credited year of service thereafter. The
Plan allows participants to make daily transfers of their company contributions
among the GIF, FIF, HSF, and EIF. The amount of the transfer may be all or any
portion of the participant's account balance, subject to certain limitations on
transfers to the HSF.
Participants may elect to contribute to the tax deferred savings feature of the
Plan through periodic payroll deductions. These contributions are limited to 15%
of the participant's gross compensation of up to $160,000 for 1998 and 1997,
respectively. The Plan participants who contribute also receive Company matching
contributions equal to 50% of the first 4% of a participant's contributions.
Matching contributions are subject to the same vesting schedule as the profit
sharing contributions made to the participants' Company contributions accounts,
as described above. Participant contributions and matching contributions may be
directed in whole percentage increments to the GIF, FIF, and/or the EIF by the
participant, as well as to the HSF, subject to certain limitations.
Qualified participants may voluntarily make annual cash contributions to regular
savings (after tax) of a certain amount to the GIF, FIF, EIF, or the HSF, or the
participants may divide their investment allocation between the four funds in
whole percentage increments, subject to certain limitations on investments in
the HSF. The participants may make contributions into the Plan either by
periodic payroll deductions or by a yearly lump-sum contribution (regular
savings only).
The participant's federal income taxes on tax-deferred savings and Company
contributions and earnings on regular savings are deferred until the participant
withdraws the funds from the Plan. Participants' contributions to their accounts
are fully vested when made.
The nonvested portion of account balances of participants who terminated prior
to January 1, 1997, is forfeitable. The nonvested portion is forfeited at the
end of the fifth year following termination unless the participant becomes an
active participant within five years of termination. Such forfeitures are used
to reduce future Company matching contributions. Forfeitures totaled $15,580 and
$473,113 for Plan years ended 1998 and 1997, respectively.
Effective January 1, 1991, the Company created the Halliburton Retirement Plan,
which provides participants of the Plan with a guaranteed minimum retirement
benefit. This guaranteed minimum is based on the participant's final average
pay, years of participation service after January 1, 1990, and his/her age. A
participant's post-1989 profit sharing account (Company contributions only) is
used as an offset to the minimum guaranteed benefit.
Participants may elect to transfer their total retirement plan benefit to the
Plan. The participant is able to direct the transfer into one of three funds
(GIF, FIF or the EIF). The amount of the benefit eligible to be rolled over is
the actuarially determined amount which is eligible to be received by the
<PAGE>
15
participant. Transfers may be made during any month of the year. A participant
is eligible for these options upon attainment of either the normal retirement
age (65) or early retirement age (55 or 50 during specified periods).
HPAR:
- -----
HPAR was established on January 1, 1989, to provide one retirement plan to hold
the assets of retirement accounts owned by employees who previously worked for a
company now owned, in whole or in part, by the Company. However, it was restated
in its entirety to include certain provisions, such as employees investment
options and was instituted as of January 1, 1994. At May 31, 1998, participants
in HPAR included employees who previously had accounts in the retirement plans
of Geosource, Texas Instruments/Geophysical Services, Inc., Gearhart Industries,
Inc., Sierra Geophysics, Inc., or Automation Technology, Inc.
HPAR is frozen, and as such, does not allow for any additional contributions by
the Company or any prior employer.
B & R Plan:
- -----------
The B & R Plan is a trusteed, defined contribution profit-sharing pension plan
covering eligible employees of Brown & Root Holdings, Inc. ("B & R Holdings"), a
Delaware corporation and a wholly owned subsidiary of Halliburton Company, and
those subsidiaries and affiliated companies which have adopted the B & R Plan,
as amended. Employees covered by a collective bargaining agreement are not
eligible to participate in the B & R Plan unless the B & R Plan has been adopted
as a part of such agreement. An employee is elibible for participation in the B
& R Plan on the first day of the month following the completion of one year of
service with B & R Holdings, Inc.
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 B& R Holdings contributes 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
B & R 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 B& R Holdings on December 31 of the B & R Plan year for which the
contribution applies unless the participant meets certain other conditions
specified by the B & R Plan.
Participants may elect to contribute to the B & R Plan on a pretax basis a
percentage of their eligible earnings, as defined by the B & R 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>
16
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 B &
R Plan not to exceed 15% of their eligible earnings during the year.
B & R 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 B & R Plan agreement. Participants are allowed to transfer up to
15% of their profit-sharing account and match account balances to the HSF.
Upon application and approval by the B & R 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 B & R 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.
Forfeitures represent the nonvested portion of a terminated participant's profit
sharing account. Forfeitures are allocated at each year-end ($652,818 in 1998 )
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.
Kellogg:
- --------
Kellogg is a defined contribution plan established for the benefit of eligible
former employees of The M. W. Kellogg Company ("Kellogg Inc."), previously a
wholly owned subsidiary of Dresser Industries, Inc. ("Dresser"). Employees must
have completed 12 months of service to be eligible to participate in the Plan.
Each eligible participant may make pre-tax or after-tax salary contributions, or
a combination thereof, ranging from 2% to 16% of total earnings. Kellogg will
match participant contributions up to a maximum of 6% of total earnings at the
rate of 75 cents per dollar contributed.
Participant contributions combined with company contributions for the year may
not exceed the lesser of $30,000 or 25% of the participant's compensation (after
subtracting the salary reduction contributions).
Earnings of each investment fund are allocated on a daily basis to that fund's
participants in proportion to each participant's share of fund assets or based
upon the number of shares held by a participant for investment purposes.
<PAGE>
17
For each participant who first entered Kellogg on or after January 1, 1987, such
participant's vested interest in account balances attributable to the Kellogg
Inc.'s contribution is determined by years of vesting service, defined as plan
years in which a participant renders 1,000 or more hours of service, as follows:
<TABLE>
<CAPTION>
Years of
Vesting Service
-----------------
<S> <C>
Less than 3 years 0%
3 years 20%
4 years 40%
5 years 60%
6 years 80%
7 years or more 100%
</TABLE>
In addition, all participants who have attained the age of 65 or who are
terminated from active status by reason of death or disability become 100%
vested in company contributions and investment earnings thereon.
Participants' contributions to their accounts are fully vested when made.
When participants cease to be active, they are entitled to receive the portion
of their account balance attributable to their contributions to Kellogg and the
vested portion of company contributions. The unvested portion of their account
balance attributable to company contributions is forfeited by the participant
and is used to reduce future company contributions. Participant forfeitures are
held in the Vanguard Money Market Reserve (VMMR) Prime Portfolio fund until
employer contributions can be offset.
Participants may borrow from their vested balances in Kellogg, subject to
certain limits set by law. If a participant requests a loan, the minimum loan
amount is $1,000 and the maximum loan amount is $50,000, subject to certain
other restrictions. Interest rates are based on published rates for major money
center banks on the first day of the quarter in which the loan application is
received. Loan repayments are made by payroll deduction over a period not to
exceed 10 years for loans made for the purpose of acquiring a principal
residence and 4.5 years for all other loans. Loans may be repaid in full at any
time without penalty. All loans are secured by the participants vested balances
in Kellogg.
Forfeitures of the non-vested portion of the Kellogg Inc.'s matching
contribution are used to reduce future Kellogg Inc.'s contributions.
Participants may choose to invest all of their contributions and company
matching contributions in one fund or split them in percentage increments
between the funds. If a participant does not specify how to invest his
contributions, they are automatically invested in the VMMR Prime Portfolio.
Participants may change contribution allocations on a daily basis by calling
Vanguard Fiduciary Trust Company ("Vanguard"), trustee, directly. In addition, a
participant may transfer all or a portion (in whole percentages) of the value of
his contributions and company matching contributions among the eight investment
funds.
<PAGE>
18
RSPA and RSPB:
- --------------
The RSPA is a defined contribution plan established for the benefit of salaried
employees of Dresser. RSPB is a salary deferral savings plan established for
former hourly employees of Dresser. Both were established in accordance with
section 401(a) of the Internal Revenue Code (IRC) and is subject to the
provisions of ERISA.
RSPA and RSPB entitle eligible employees to make pre-tax and after-tax
contributions. Total employee contributions cannot exceed 12% of eligible
compensation (10% if highly-compensated employee). Pretax contributions per
employee are limited by law up to the maximum contributions under Section 402(g)
of the IRC.
Dresser makes basic contributions to RSPA and RSPB on behalf of its employees
equal to 3% of earnings and matching contributions equal to 100% of participant
contributions up to 2% of earnings and 50% of participant contributions between
2% - 6% of earnings. Dresser also makes Medisave and Pension Equalizer
contributions to eligible Participants.
Participant contributions, plus the earnings thereon, vest immediately.
Participants become fully vested in Basic, Match, Medisave, and Pension
Equalizer contributions and the interest thereon upon the completion of five
years of service, upon the latter of attainment of age 65 or of the fifth
anniversary of participation in RSPA and RSPB, upon termination of RSPA and
RSPB, or upon death or disability. Forfeitures of the employer's contributions
due to Participants withdrawing from RSPA and RSPB prior to full vesting are
used to reduce the employer's future contributions.
The Participant or beneficiary may elect to receive a distribution upon
retirement, termination (elective, nonelective, or due to disability), or death.
Any distribution provided by the RSPA and RSPB is paid by the Trustee directly
to the Participant or in the form of a direct rollover to another qualified plan
or an IRA. All distributions are made in lump-sum amounts or in periodic
installments, as elected by the Participant, up to the value of the funds
allocated to the account of the Participant. The Participant may elect to
receive an in-service withdrawal of their after-tax contributions. Special rules
apply to a distribution due to financial hardship and to account balances whose
features were protected by regulations provided for in the merger process.
A Participant may borrow money from RSPA and RSPB, up to the least of 50% of the
vested amount credited to their personal account, $50,000 (less the highest
outstanding loan balance), or 100% of non-basic and non-pension equalizer
account balances. Loans bear interest at the current prime rate as published in
the Wall Street Journal. Loans must be repaid within 5 years (10 years for
primary residence loan) through payroll deductions. Early pay-offs are allowed
after six months from the date of the loan. Loans are collateralized by the
Participant's account balance.
Loan activity is reflected in the financial statements in the Conversion and
Loan Funds. The amounts reported as payments in these funds represent the
reductions in loan balances that result from the withdrawal from the RSPA and
RSPB of Participants with outstanding loan balances.
Plan 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.
<PAGE>
19
2. SIGNIFICANT ACCOUNTING POLICIES:
--------------------------------
Basis of Accounting
- -------------------
The accompanying financial statements are prepared using the accrual basis of
accounting.
Allocation of Master Trust Net Investment Activity
- --------------------------------------------------
The allocation of Master Trust net investment activity represents the Plan's
share of the net investment income or loss on investments held by the Master
Trust determined by the Plan's allocable share of the net assets of the Master
Trust. Net investment income or loss is the realized net gain (loss) from
investments sold, change in the unrealized net gain (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 30, 1998, to June
1, 1998. During this period, participants were unable to make any requests for
withdrawals, transfer of funds or reallocate balances. Subsequent to June 1,
1998, participants are 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.
Excess Contributions
- --------------------
Excess contributions represent pretax and after-tax amounts contributed to
participant accounts which exceeded the statutory limits, as defined by the IRC,
and earnings thereon. These amounts were refunded to participants subsequent to
year-end and were included in the participant's 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
<PAGE>
20
financial statements and the reported amounts of income and expenses during the
reporting periods. Actual results could differ from those estimates.
3. MASTER TRUST:
-------------
Certain 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, EIF, and the HSF. 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.
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, bond 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 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>
21
The following are summary statements of net assets as of December 31, 1998 and
1997, and a summary statement of changes in net assets of the Master Trust for
the year ended December 31, 1998 (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 bonds 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
Real estate and related investments 130 - - -
Pooled bond funds 57,181 5,570 - -
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 $1,205,221 $ 672,119 $ 85,307 $ 266,336
=========== =========== ========= ============
Plan percent interest 59.00% 53.38% 82.92% $55.02%
=========== =========== ========= ============
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 change in unrealized gain (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
=========== =========== ========= ============
<PAGE>
22
1998
--------------------------------------------------------
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 $1,165,587 $ 579,026 $159,058 $ 214,342
=========== =========== ========== ============
Plan percent interest 58.52% 50.94% 87.87% 53.89%
=========== =========== ========== ============
</TABLE>
The Master Trust makes use of several investment strategies involving the
limited use of derivative investments. 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 management does not allow
investment managers for the Master Trust to use leveraging for any investment
<PAGE>
23
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.
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 $1,205,221,197 $1,165,586,649
Master Trust - FIF 672,119,102 579,025,670
Master Trust - EIF 266,336,154 214,342,154
Master Trust - HSF 85,306,804 159,058,037
</TABLE>
5. FEDERAL INCOME TAXES:
---------------------
The Internal Revenue Service has determined and informed the Company by letter
dated August 20, 1997, that the Plan and related trust are designed in
accordance 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 Trust 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 investments 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 30,233,563 39.8637
FIF 247,297,928 2.7179
EIF 12,622,741 21.0997
HSF 3,743,003 22.7910
<PAGE>
24
Fund Units Net Asset Value Per Unit
- ---- ------------ ------------------------
<S> <C> <C>
1997
- ----
GIF 924,533,444 1.3250
FIF 502,991,613 1.1503
EIF 144,861,322 1.4762
HSF 73,062,027 2.1772
</TABLE>
8. SUBSEQUENT EVENT:
------------------
Subsequent to December 31, 1998, the name of the Plan was changed to the
Halliburton Retirement and Savings Plan.
<PAGE>
25
<TABLE>
<CAPTION>
SCHEDULE I
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
EIN: 73-2677995
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 $1,063,049,662 $1,205,221,197
* Halliburton Company Employee Investment in Net Assets of Halliburton
Benefit Master Trust Company Employee Benefit Master
Trust - Fixed Income Fund 628,069,387 672,119,102
* Halliburton Company Employee Investment in Net Assets of Halliburton
Benefit Master Trust Company Employee Benefit Master
Trust - Halliburton Stock Fund 149,321,994 85,306,804
* Halliburton Company Employee Investment in Net Assets of Halliburton
Benefit Master Trust Company Employee Benefit Master
Trust - Equity Investment Fund 233,174,238 266,336,154
<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>
26
<TABLE>
<CAPTION>
SCHEDULE II
HALLIBURTON PROFIT SHARING AND SAVINGS PLAN
ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
EIN: 73-2677995
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 of 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's 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
report 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
