Halliburton 2009 Annual Report Download

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PUSHING

2009 ANNUAL REPORT

Table of contents

  • Page 1
    PUSHING BOUNDARIES 2009 ANNUAL REPORT

  • Page 2
    ... In 2009, Halliburton won $130 million of additional revenue in Alaska by using an optimized formationevaluation approach for an international oil company for openhole and cased-hole wireline. COnTinEnTAL UniTED STATES As the technology leader for unconventional gas plays, Halliburton continued...

  • Page 3
    RUSSiA Halliburton set new drilling records in Russia and opened the first Real Time Center complementing our state-of-the-art directional drilling maintenance center. nORWAY Significant 2009 contract awards included Baroid work with Talisman; contracts for Baroid and Cementing with BP; and 2-year ...

  • Page 4
    ... serves the upstream oil and gas industry throughout the life cycle of the reservoir - from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production through the life of the field. Increased service intensity...

  • Page 5
    ... OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA) 2009 2008 2007 Revenue Operating income Amounts attributable to company shareholders: Income from continuing operations Net income Diluted income per share attributable to company shareholders: Income from continuing operations Net income Cash...

  • Page 6
    ..., we opened a new state-of-the-art base camp to support our expanded product service line offerings. Additionally, in Angola, we launched the Stim Star Angola stimulation vessel, which is specialized to work in difficult sea conditions. executing to PlAn, Achieving reSultS We executed our strategy...

  • Page 7
    ... and lower project costs. Through these initiatives, Halliburton has strengthened its share across all major product service lines with significant gains in testing, drill bits, and directional drilling. The successful execution of our strategy is reflected in our financial results. Even at...

  • Page 8
    ... was provided in part by the 2009 acquisition of Geo-Logic Systems, LLC, whose software helps validate interpretations and assists in analyzing and modeling hydrocarbon migration pathways, maturation histories, and fault seal characteristics in complex geology. 04 HALLIBURTON 2009 ANNUAL REPORT

  • Page 9
    ... best placement of a well. Halliburton continued to build on its leadership position in well construction and production. In 2009, Baroid expanded its global footprint into the region by introducing new drilling fluid and environmental services that offer superior solutions for salt conditions. We...

  • Page 10
    ... bring the reliability and power needed to stimulate the deep, hot Haynesville shale. Because we manufacture our own equipment designed for the application, we can offer customized completion solutions that increase efficiency during stimulation treatments. 06 HALLIBURTON 2009 ANNUAL REPORT

  • Page 11
    ...continuous drilling and the gathering of high-quality formation evaluation data that is critical to optimize completions in shale plays. Furthermore, to increase the completion efficiency, Halliburton deployed customized HT-2000â„¢ stimulation units with specialized engines and fluid ends to enhance...

  • Page 12
    SAUDI ARABIA From well construction to fluid systems, drilling and formation evaluation to production optimization, Halliburton has worked in a multitude of different reservoirs and wells, ranging from basic to complex, in Saudi Arabia. 08 HALLIBURTON 2009 ANNUAL REPORT

  • Page 13
    ... more than 25 percent to global oil production, the Middle East region is an area of great promise and opportunity. Halliburton has worked in Saudi Arabia for nearly 70 years, performing thousands of service operations and providing customized solutions to address multiple unique reservoirs. A prime...

  • Page 14
    GLOBAL COMMITMENT Halliburton continuously develops new materials that are compatible with a broad range of produced water. Onsite quality testing helps assure continued high fluid performance. 10 HALLIBURTON 2009 ANNUAL REPORT

  • Page 15
    ..., and develop the needed technology to provide viable solutions to meet our sustainability goals. HALLIBURTON RANKED THIRD OUT OF 27 ENERGY SECTOR COMPANIES FOR CLIMATERELATED INNOVATION* *2010 Maplecroft Climate Innovation Index listed on the Bloomberg Professional Service PUSHING BOUNDARIES...

  • Page 16
    ... wellbore in the best part of the reservoir. Utilizing the full range of LWD technology, including magnetic-resonance logging while drilling, has eliminated redundant wireline logging runs while achieving results equivalent or superior to wireline measurements. 12 HALLIBURTON 2009 ANNUAL REPORT

  • Page 17
    FORM 10-K PUSHING BOUNDARIES

  • Page 18
    ... or organization) 3000 North Sam Houston Parkway East Houston, Texas 77032 (Address of principal executive offices) Telephone Number - Area code (281) 871-2699 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on which registered New York Stock Exchange 75-2677995...

  • Page 19
    ... Financial Data (Unaudited) Quarterly Data and Market Price Information (Unaudited) PART III Item 10. Directors, Executive Officers, and Corporate Governance Item 11. Executive Compensation Item 12(a). Security Ownership of Certain Beneficial Owners Item 12(b). Security Ownership of Management...

  • Page 20
    .... General description of business Halliburton Company's predecessor was established in 1919 and inco rporated under the laws of the State of Delaware in 1924. We provide a variety of services and products to customers in the energy industry related to the exploration, development, and production of...

  • Page 21
    ... The business operations of our divisions are organized around four primary geographic regions: North America, Latin America, Europe/Africa/CIS, and Middle East/Asia. In 2009, based on the location of services provided and products sold, 36% of our consolidated revenue was from the United States. In...

  • Page 22
    ..., and our other SEC filings. The address of that site is www.sec.gov. We have posted on our web site our Code of Business Conduct, which applies to all of our employees and Directors and serves as a code of ethics for our principal executive officer, principal financial officer, principal accounting...

  • Page 23
    ..., United States Region of Halliburton Company, December 2003 to June 2006 James S. Brown (Age 55) * Albert O. Cornelison, Jr. Executive Vice President and General Counsel of Halliburton Company, (Age 60) since December 2002 David S. King (Age 53) President, Completion and Production Division of...

  • Page 24
    ... President, Global Business Lines and Corporate Development of Halliburton Company, since January 2010 President, Drilling and Evaluation Division and Corporate Development of Halliburton Company, March 2009 to December 2009 Executive Vice President, Strategy and Corporate Development of Halliburton...

  • Page 25
    ... and corporate offices. Location Completion and Production segment: Arbroath, United Kingdom Johor, Malaysia Monterrey, Mexico Sao Jose dos Campos, Brazil Stavanger, Norway Drilling and Evaluation segment: Alvarado, Texas Nisku, Canada Singapore The Woodlands, Texas Shared/corporate facilities...

  • Page 26
    ...and Issuer Purchases of Equity Securities. Halliburton Company's common stock is traded on the New York Stock Exchange. Information related to the high and low market prices of common stock and quarterly dividend payments is included under the caption "Quarterly Data and Market Price Information" on...

  • Page 27
    ... 31, 2009 were acquired from employees in connection with the settlement of income tax and related benefit withholding obligations arising from vesting in restricted stock grants. These shares were not part of a publicly announced program to purchase common shares. Item 6. Selected Financial Data...

  • Page 28
    ... to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. There has been no change in our internal control over financial reporting that occurred during the three months ended December 31, 2009 that...

  • Page 29
    ... around four primary geographic regions: North America, Latin America, Europe/Africa/CIS, and Middle East/Asia. We have significant manufacturing operations in various locations, including, but not limited to, the United States, Canada, the United Kingdom, Malaysia, Mexico, Brazil, and Singapore...

  • Page 30
    ... wireline and perforating, and cementing product service lines. During 2009, we purchased approximately $1.6 billion in United States Treasury securities, with varying maturity dates. We paid $417 million to the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) in 2009 related...

  • Page 31
    ... directed toward our production enhancement, drilling services, wireline and perforating, and cementing product service lines and toward retiring old equipment to replace it with new equipment to improve our fleet reliability and efficiency. We are currently exploring opportunities for acquisitions...

  • Page 32
    .... In addition, we manage our cash investments by investing principally in United States Treasury securities and repurchase agreements collateralized by United States Treasury securities. Credit ratings. Credit ratings for our long-term debt remain A2 with Moody's Investors Service and A with...

  • Page 33
    ... the sale of services and products to major, national, and independent oil and natural gas companies worldwide. We serve the upstream oil and natural gas industry throughout the lifecycle of the reservoir, from locating hydrocarbons and managing geological data, to drilling and formation evaluation...

  • Page 34
    ...): Land Offshore Total Worldwide total Land total Offshore total Oil vs. Natural Gas United States (incl. Gulf of Mexico): Oil Natural Gas Total Canada: Oil Natural Gas Total International (excluding Canada): Oil Natural Gas Total Worldwide total Oil total Natural Gas total 2009 1,042 44 1,086 220...

  • Page 35
    ..., high depletion rates, and the need for continual reserve replacement should drive the long-term need for our services. North America operations Volatility in natural gas prices can impact our customers' drilling and production activities, particularly in North America. In 2009, we experienced...

  • Page 36
    ... consulting services for the development, deployment, and ongoing global support of exploration and production technology and workflows; - a five-year, $1.5 billion contract to provide a broad base of products and services to an international oil company for its work associated with North America...

  • Page 37
    ... full field development a four-year contract to provide directional-drilling, measurement-while-drilling, and logging-while-drilling, along with drilling fluids and cementing services in Russia; and a multi-year contract scheduled to commence in 2010 to provide completion products and services and...

  • Page 38
    ... OPERATIONS IN 2009 COMPARED TO 2008 REVENUE: Millions of dollars Completion and Production Drilling and Evaluation Total revenue By geographic region: Completion and Production: North America Latin America Europe/Africa/CIS Middle East/Asia Total Drilling and Evaluation: North America Latin America...

  • Page 39
    ...: Completion and Production: North America Latin America Europe/Africa/CIS Middle East/Asia Total Drilling and Evaluation: North America Latin America Europe/Africa/CIS Middle East/Asia Total Total operating income by region (excluding Corporate and other): North America Latin America Europe/Africa...

  • Page 40
    ...services in Africa and production enhancement services in the North Sea and Angola. Middle East/Asia operating income decreased 15% primarily due to lower completion tools sales in Saudi Arabia and lower demand for production enhancement services in Oman and Malaysia. Drilling and Evaluation revenue...

  • Page 41
    ... in the United States. Latin America operating income fell 39% primarily due to lower activity across all product service lines in Venezuela and decreased demand and pricing pressure for drilling services and wireline and perforating services in Argentina, Colombia, and Mexico. The region was also...

  • Page 42
    ... OPERATIONS IN 2008 COMPARED TO 2007 REVENUE: Millions of dollars Completion and Production Drilling and Evaluation Total revenue By geographic region: Completion and Production: North America Latin America Europe/Africa/CIS Middle East/Asia Total Drilling and Evaluation: North America Latin America...

  • Page 43
    ...: Completion and Production: North America Latin America Europe/Africa/CIS Middle East/Asia Total Drilling and Evaluation: North America Latin America Europe/Africa/CIS Middle East/Asia Total Total operating income by region (excluding Corporate and other): North America Latin America Europe/Africa...

  • Page 44
    ... to the acquisition of PSL Energy Services Limited. Additionally, completion tools revenue benefited from increased sales and service in Africa. Middle East/Asia revenue grew 19% from increased completion tools sales and deliveries and new contracts for production enhancement services in the region...

  • Page 45
    ... in North America, Latin America, and Asia. Europe/Africa/CIS operating income increased 12% benefiting from higher customer demand for wireline and perforating services in Africa. Higher demand for software sales and consulting services in Europe also contributed to the increase. Middle East/Asia...

  • Page 46
    ... for uncertain tax positions; - legal and investigation matters; - valuations of indemnities; - valuations of long-lived assets, including intangible assets; - purchase price allocation for acquired businesses; - pensions; - allowance for bad debts; and - percentage-of-completion accounting for...

  • Page 47
    ... of local tax laws, tax treaties, and related authorities in each jurisdiction. Changes in the operating environment, including changes in tax law and currency/repatriation controls, could impact the determination of our income tax liabilities for a tax year. Tax filings of our subsidiaries...

  • Page 48
    ... any amounts. Attorneys in our legal department monitor and manage all claims filed against us and review all pending investigations. Generally, the estimate of probable costs related to these matters is developed in consultation with internal and outside legal counsel representing us. Our estimates...

  • Page 49
    ... its carrying amount by a significant margin for 2009, 2008, and 2007. See Note 1 to the consolidated financial statements for accounting policies related to long-lived assets and intangible assets. Acquisitions-purchase price allocation We allocate the purchase price of an acquired business to...

  • Page 50
    ... net actuarial loss, net of tax, related to pension plans at December 31, 2009 was $185 million. In our international plans where employees continue to earn additional benefits for continued service, unrecognized actuarial gains and losses are being recognized over a period of 6 to 19 years, which...

  • Page 51
    ... included in revenue. Progress is generally based upon physical progress related to contractually defined units of work. At the outset of each contract, we prepare a detailed analysis of our estimated cost to complete the project. Risks related to service delivery, usage, productivity, and other...

  • Page 52
    ... impact our future reported earnings. Currently, long-term contracts accounted for under the percentage-of-completion method of accounting do not comprise a significant portion of our business. However, in the future, we expect our business with national or state-owned oil companies to grow relative...

  • Page 53
    ... requirements related to our operations worldwide. For information related to environmental matters, see Note 8 to the consolidated financial statements and "Risk Factors-Customers and Business" under the subheading "Environmental requirements." NEW ACCOUNTING PRONOUNCEMENTS In October 2009, the...

  • Page 54
    ... -term strategy to grow our international operations. In 2010, the independent consultant will perform a 30-day, follow-up review to confirm that we have implemented the recommendations and continued the application of our current policies and procedures and to recommend any additional improvements...

  • Page 55
    ..., loss of, or adverse effect on, cash flow, assets, goodwill, results of operations, business prospects, profits or business value or claims by directors, officers, employees, affiliates, advisors, attorneys, agents, debt holders, or other interest holders or constituents of KBR o r KBR's current or...

  • Page 56
    ... of or higher depletion rate on our oil and natural gas properties. Geopolitical and International Environment International and political events A significant portion of our revenue is derived from our non-United States operations, which exposes us to risks inherent in doing business in each of the...

  • Page 57
    ...addition, military action or continued unrest in the Middle East could impact the supply and pricing for oil and natural gas, disrupt our operations in the region and elsewhere, and increase our costs for security worldwide. Our operations outside the United States require us to comply with a number...

  • Page 58
    ... in which we operate. In addition, any possible reprisals as a consequence of the wars and ongoing military action in the Middle East, such as acts of terrorism in the United States or elsewhere, could materially and adversely affect us in ways we cannot predict at this time. Income taxes We have...

  • Page 59
    ...of industrial business operations. This has negatively impacted worldwide demand for energy, resulting in lower oil and natural gas prices, a lowering of the level of exploration, development, and production activity, and a corresponding decline in the demand for our well services and products. This...

  • Page 60
    ... gas prices. Risks related to our business in Venezuela We believe there are risks associated with our operations in Venezuela. For example, the Venezuela National Assembly enacted legislation that allows the Venezuelan government, directly or through its state-owned oil company, to assume control...

  • Page 61
    ...our ability to complete a project in a timely fashion or at a profit may be impaired. If the amount we are required to pay for these goods and services exceeds the amount we have estimated in bidding for fixed-price work, we could experience losses in the performance of these contracts. These delays...

  • Page 62
    ... strict liability. Strict liability means that in some situations we could be exposed to liability for cleanup costs, natural resource damages, and other damages as a result of our conduct that was lawful at the time it occurred or the conduct of prior operators or other third parties. Liability...

  • Page 63
    ...process could make it more difficult to complete natural gas and oil wells and could have an adverse impact on our future results of operations, liquidity, and financial condition. Law and regulatory requirements In the countries in which we conduct business, we are subject to multiple and, at times...

  • Page 64
    ... offshore drilling rigs resulting in suspension of operations; - weather-related damage to our facilities and project work sites; - inability to deliver materials to jobsites in accordance with contract schedules; and - loss of productivity. Because demand for natural gas in the United States drives...

  • Page 65
    ... control over financial reporting as of December 31, 2009 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report that is included herein. HALLIBURTON COMPANY by /s/ David J. Lesar David J. Lesar Chairman of the Board, President, and Chief Executive...

  • Page 66
    ..., in accordance with the standards of the Public Company Accounting Oversight Board (United States), Halliburton Company's internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring...

  • Page 67
    ... of operations, sh areholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2009, and our report dated February 17, 2010 expressed an unqualified opinion on those consolidated financial statements. /s/ KPMG LLP Houston, Texas February 17, 2010 48

  • Page 68
    ... 3,486 Millions of dollars and shares except per share data Revenue: Services Product sales Total revenue Operating costs and expenses: Cost of services Cost of sales General and administrative Gain on sale of assets, net Total operating costs and expenses Operating income Interest expense Interest...

  • Page 69
    ... benefits Deferred revenue Department of Justice (DOJ) and Securities and Exchange Commission (SEC) settlement and indemnity, current Other current liabilities Total current liabilities Long-term debt Employee compensation and benefits Other liabilities Total liabilities Shareholders' equity: Common...

  • Page 70
    ... Inc. exchange offer Comprehensive income: Net income Net cumulative translation adjustments Defined benefit and other postretirement plans adjustments Net unrealized gains (losses) on investments Total comprehensive income Balance at December 31 See notes to consolidated financial statements. 2009...

  • Page 71
    ... flows from operating activities Cash flows from investing activities: Capital expenditures Purchases of investments in marketable securities Sales of investments in marketable securities Sales of property, plant, and equipment Acquisitions of assets, net of cash acquired Disposal of KBR, Inc. cash...

  • Page 72
    ... influence, we use the cost method. We report two business segments. In the first quarter of 2009, we reclassified certain services between our operating segments to re-establish a new service offering. See Note 2 for further information. Additionally, KBR, Inc. (KBR), formerly a wholly owned...

  • Page 73
    ... or production cost for new items and original cost less allowance for condition for used material returned to stock. Production cost includes material, labor, and manufacturing overhead. Some domestic manufacturing and field service finished products and parts inventories for drill bits, completion...

  • Page 74
    ... goodwill arising from 2008 acquisitions, of which $159 million related to the Completion and Production segment and $115 million related to the Drilling and Evaluation segment. The reported amounts of goodwill for each reporting unit are reviewed for impairment on an annual basis, during the third...

  • Page 75
    ... operate under two divisions, which form the basis for the two operating segments we report: the Completion and Production segment and the Drilling and Evaluation segment. In the first quarter of 2009, we moved a portion of our completion tools and services from the Completion and Production segment...

  • Page 76
    ...completion equipment, intelligent completion systems, expandable liner hanger systems, sand control systems, well servicing tools, and reservoir performance services. Reservoir performance services include testing tools, real-time reservoir analysis, and data acquisition services. Cementing services...

  • Page 77
    ... oil companies. These offerings make use of all of our oilfield services, products, technologies, and project management capabilities to assist our customers in optimizing the value of their oil and natural gas assets. Corporate and other includes expenses related to support functions and corporate...

  • Page 78
    ...such as cash, are considered to be shared among the segments. Revenue by country is determined based on the location of services provided and products sold. Operations by geographic area Millions of dollars Revenue: United States Other countries Total 2009 Year Ended December 31 2008 2007 $ 7,775 10...

  • Page 79
    ... the lower of cost or market. In the United States we manufacture certain finished products and parts inventories for drill bits, completion products, bulk materials, and other tools that are recorded using the last-in, first-out method, which totaled $68 million at December 31, 2009 and $92 million...

  • Page 80
    ... in October 2008 to provide additional liquidity and for other general corporate purposes. Note 7. KBR Separation In 2007, we completed the separation of KBR from us by exchanging the shares of KBR common stock owned by us on that date for shares of our common stock. In the second quarter of...

  • Page 81
    ...results effective March 31, 2007. Year Ended December 31 2007 $ 2,250 $ 62 $ 23 (a) Millions of dollars Revenue Operating income Net income (a) Net income for 2007 represents our 81% share of KBR's results from January 1, 2007 through March 31, 2007. We entered into various agreements relating to...

  • Page 82
    In February 2009, the United States Department of Justice (DOJ) and Securities and Exchange Commission (SEC) FCPA investigations were resolved. The total of fines and disgorgement was $579 million, of which KBR consented to pay $20 million. As of December 31, 2009, we had paid $417 million, ...

  • Page 83
    ..., loss of, or adverse effect on, cash flow, assets, goodwill, results of operations, business prospects, profits or business value or claims by directors, officers, employees, affiliates, advisors, attorneys, agents, debt holders, or other interest holders or constituents of KBR or KBR's current or...

  • Page 84
    ... class actions were filed against us. Several of those lawsuits also named as defendants several of our present or former officers and directors. The class action cases were later consolidated, and the amended consolidated class action complaint, styled Richard Moore, et al. v. Halliburton Company...

  • Page 85
    .... The Fifth Circuit affirmed the district court's order denying class certification. AMSF will have the opportunity to request additional review by the Fifth Circuit and the United States Supreme Court. As of December 31, 2009, we had not accrued any amounts related to this matter because we do not...

  • Page 86
    ...subject to numerous environmental, legal, and regulatory requirements related to our operations worldwide. In the United States, these laws and regulations include, among others: - the Comprehensive Environmental Response, Compensation, and Liability Act; - the Resource Conservation and Recovery Act...

  • Page 87
    ... of dollars United States Foreign Total Reconciliations between the actual provision for income taxes on continuing operations and that computed by applying the United States statutory rate to income from continuing operations before income taxes were as follows: Year Ended December 31 2009 2008...

  • Page 88
    ... Gross deferred tax assets: Employee compensation and benefits Accrued liabilities Net operating loss carryforwards Capitalized research and experimentation Insurance accruals Software revenue recognition Inventory Other Total gross deferred tax assets Gross deferred tax liabilities: Depreciation...

  • Page 89
    ... would give rise to a United States tax credit. The remaining balance of $114 million and $163 million as of December 31, 2009 and 2008, if resolved in our favor, would positively impact the effective tax rate, and therefore, be recognized as additional tax benefits in our statements of operations...

  • Page 90
    ... dividends paid Stock plans Common shares purchased Tax benefit from exercise of options and restricted stock Distributions to noncontrolling interest holders Other transactions with shareholders Total dividends and other transactions with shareholders Shares exchanged in KBR, Inc. exchange offer...

  • Page 91
    ...net loss Other Tax effect on defined benefit and postretirement plans Defined benefit and other postretirement plans, net Net unrealized losses on investments, net of tax benefit of $4 Total comprehensive income Balance at December 31, 2008 Cash dividends paid Stock plans Common shares purchased Tax...

  • Page 92
    ... the years ended December 31, 2009, 2008 and 2007. Year Ended December 31 2009 2008 2007 $ 143 $ 103 $ 97 $ (50) $ (36) $ (35) $ 93 $ 67 $ 62 Millions of dollars Stock-based compensation cost Tax benefit Stock-based compensation cost, net of tax Our Stock and Incentive Plan, as amended (Stock Plan...

  • Page 93
    ... the year. All stock options under the Stock Plan are granted at the fair market value of our common stock at the grant date. Employee stock options vest ratably over a three- or four-year period and generally expire 10 years from the grant date. Stock options granted to non-employee directors vest...

  • Page 94
    ... age 72 or the time from the grant date to completion of four years of service on the Board. We reserved 200,000 shares of common stock for issuance to non-employee directors, which may be authorized but unissued common shares or treasury shares. At December 31, 2009, 130,400 shares had been issued...

  • Page 95
    ... December 31, 2009, there was $277 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested restricted stock, which is expected to be recognized over a weighted average period of 4 years. Employee Stock Purchase Plan Under the ESPP, eligible employees may have up...

  • Page 96
    ... to manage our working capital position to minimize foreign currency commitments in non-traded currencies and recognize that pricing for the services and products offered in these countries should cover the cost of exchange rate devaluations. We have historically incurred transaction losses in...

  • Page 97
    ... rates. At December 31, 2009, we held $1.3 billion in United States Treasury securities with maturities that extend through September 2010. These securities are accounted for as available-for-sale and recorded at fair value in "Investments in marketable securities." Fair market value of financial...

  • Page 98
    ... postretirement benefit obligation amount for these plans is not affected by the expected future health care cost inflation rate. The liability at the balance sheet dates presented and the annual cost for these plans are not material. Effective for our fiscal year ended December 31, 2009, we...

  • Page 99
    ... our pension plans. 2009 Millions of dollars Benefit obligation Benefit obligation at beginning of period Service cost Interest cost Plan participants' contributions Plan amendments Settlements/curtailments Divestitures Business combinations Currency fluctuations Actuarial (gain) loss Benefits paid...

  • Page 100
    ...107 65 $ 477 360 Fair value measurements of plan assets The following tables set forth the fair value of our United States and international plan assets at December 31, 2009. United States Pension Plans Quoted Prices Significant in Active Observable Markets for Inputs for Identical Assets Similar...

  • Page 101
    ... managers within each asset class. For our United States pension plans, the target asset allocation is 50% to 75% equity securities and 30% to 45% fixed income securities. For our United Kingdom pension plan, which constituted 74% of our international pension plans' projected benefit obligations...

  • Page 102
    ... benefit cost for the years ended December 31 were as follows: 2009 2008 2007 Discount rate: United States pension plans 4.7-5.8% 4.6-6.2% 5.8% International pension plans 5.7-8.8% 2.5-8.8% 2.3-8.8% Expected long-term return on plan assets: United States pension plans 8.0% 8.0% 8.3% International...

  • Page 103
    ...the acquisition date, in-process research and development is recorded at fair value as an indefinite-lived intangible asset at the acquisition date, restructuring costs associated with a business combination are generally expensed subsequent to the acquisition date, and changes in deferred tax asset...

  • Page 104
    ... to defer the effective date of the fair value standard for certain nonfinancial assets and nonfinancial liabilities for an additional year. In October 2008, the FASB also issued an update to the original standard related to determining the fair value of a financial asset when the market for that...

  • Page 105
    ... average common shares outstanding Diluted weighted average common shares outstanding Other financial data: Capital expenditures Long-term borrowings (repayments), net Depreciation, depletion, and amortization expense Payroll and employee benefits Number of employees (1) discontinued operations in...

  • Page 106
    HALLIBURTON COMPANY Quarterly Data and Market Price Information (1) (Unaudited) Quarter Millions of dollars except per share data 2009 Revenue Operating income Net income Amounts attributable to company shareholders: Income from continuing operations Loss from discontinued operations Net income ...

  • Page 107
    ... Report," "Summary Compensation Table," "Grants of Plan -Based Awards in Fiscal 2009," "Outstanding Equity Awards at Fiscal Year End 2009," "2009 Option Exercises and Stock Vested," "2009 Nonqualified Deferred Compensation," "Pension Benefits Table," "Employment Contracts and Change-in-Control...

  • Page 108
    ... 13. Certain Relationships and Related Transactions, and Director Independence. This information is incorporated by reference to the Halliburton Company Proxy Statement for our 2010 Annual Meeting of Stockholders (File No. 1-3492) under the caption "Corporate Governance" to the extent any disclosure...

  • Page 109
    ... Company, now known as Halliburton Energy Services, Inc. (the Predecessor) dated as of February 20, 1991, File No. 1-3492). Senior Indenture dated as of January 2, 1991 between the Predecessor and The Bank of New York Trust Company, N.A. (as successor to Texas Commerce Bank National Association...

  • Page 110
    ... to Exhibit 4.7 to Halliburton's Form 10-K for the year ended December 31, 1998, File No. 1-3492). Fourth Supplemental Indenture dated as of September 29, 1998 between Halliburton and The Bank of New York Trust Company, N.A. (as successor to Texas Commerce Bank National Association), as Trustee, to...

  • Page 111
    ... by reference to Exhibit 4.16 to Halliburton's Form 10 -K for the year ended December 31, 2003, File No. 1-3492). Indenture dated as of October 17, 2003 between Halliburton and The Bank of New York Trust Company, N.A. (as successor to JPMorgan Chase Bank), as Trustee (incorporated by reference to...

  • Page 112
    ... 4.23). Halliburton Company Career Executive Incentive Stock Plan as amended November 15, 1990 (incorporated by reference to Exhibit 10(a) to the Predecessor's Form 10 -K for the year ended December 31, 1992, File No. 1-3492). Halliburton Company Restricted Stock Plan for Non-Employee Directors...

  • Page 113
    ..., 2006, File No. 1-3492). Tax Sharing Agreement, effective as of January 1, 2006, by and between Halliburton Company, KBR Holdings, LLC and KBR, Inc., as amended effective February 26, 2007 (incorporated by reference to Exhibit 10.2 to KBR's Annual Report on Form 10-K for the year ended December 31...

  • Page 114
    ...). Halliburton Company Directors' Deferred Compensation Plan, as amended and restated effective January 1, 2007 (incorporated by reference to Exhibit 10.9 to Halliburton's Form 10-Q for the quarter ended September 30, 2007, File No. 13492). Retirement Plan for the Directors of Halliburton Company...

  • Page 115
    ... ended September 30, 2009, File No. 13492). Form of Non-Employee Director Restricted Stock Agreement (incorporated by reference to Exhibit 99.5 of Halliburton's Form S -8 filed May 21, 2009, Registration No. 333-159394). First Amendment to Halliburton Company Supplemental Executive Retirement Plan...

  • Page 116
    ...by reference to Exhibit 10.36 to Halliburton's Form 10-K for the year ended December 31, 2008, File No. 13492). Executive Agreement (Craig W. Nunez) (incorporated by reference to Exhibit 10.37 to Halliburton's Form 10-K for the year ended December 31, 2008, File No. 1-3492). 10.41 10.42 Amendment...

  • Page 117
    ...reference to Exhibit 24.2 to Halliburton's Form 10 -K for the year ended December 31, 2008, File No. 1-3492). Power of attorney for Nance K. Dicciani, signed in July 2009. Power of attorney for Robert A. Malone, signed in June 2009. Certification of Chief Executive Officer pursuant to Section 302 of...

  • Page 118
    ...on this 17th day of February, 2010. HALLIBURTON COMPANY By /s/ David J. Lesar David J. Lesar Chairman of the Board, President, and Chief Executive Officer As required by the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities indicated on...

  • Page 119
    ... J. Landis Martin J. Landis Martin Jay A. Precourt Jay A. Precourt Debra L. Reed Debra L. Reed Title Director * Director * Director * Director * Director * Director * Director * Director * Director * Director * /s/ Sherry D. Williams Sherry D. Williams, Attorney-in-fact 100

  • Page 120

  • Page 121
    ... Chairman of the Board and Chief Executive Officer, Anadarko Petroleum Corporation (2008) Robert A. Malone President and Chief Executive Officer, First National Bank of Sonora; Retired Chairman of the Board and President, BP America Inc. (2009) (A) (C) J. Landis Martin Founder and Managing Director...

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