SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (date of earliest event reported)
February 16, 2004
Halliburton Company
(Exact name of registrant as specified in its charter)
State or other Commission IRS Employer
jurisdiction File Number Identification
of incorporation Number
Delaware 1-3492 No. 75-2677995
1401 McKinney, Suite 2400
Houston, Texas 77010
(Address of principal executive offices)
Registrant's telephone number,
including area code - 713-759-2600
INFORMATION TO BE INCLUDED IN REPORT
Item 5. Other Events.
Halliburton's Kellogg Brown & Root subsidiary is suspending $140.8
million of subcontractor invoicing to the Army Materiel Command relating to food
services for soldiers and supporting civilian personnel in Iraq and Kuwait.
Kellogg Brown & Root will withhold the invoices until an internal review is
completed, expected within 30 days, regarding the number of meals ordered by the
Army Materiel Command and the number of soldiers actually served at dining
facilities for U.S. troops and supporting civilian personnel in Iraq and Kuwait.
The $140.8 million amount is Halliburton's "order of magnitude" estimate of the
remaining amounts being questioned by the Defense Contract Audit Agency. Kellogg
Brown & Root had also previously agreed to temporarily credit $35.8 million for
invoices submitted to the Department of Defense until Kellogg Brown & Root, the
DCAA and the Army Materiel Command could agree on a process to be used for
invoicing for food services.
Halliburton believes that Kellogg Brown & Root's review of billing
methodology will be complete by mid-March, but cannot currently predict when the
issues will be resolved with the DCAA. All invoicing in Iraq and Kuwait for
other food services and matters will continue to be processed and sent to the
Army Materiel Command for payment. In the meantime, Kellogg Brown & Root may
choose to withhold all or a portion of its payments to its subcontractors
relating to the withheld invoices pending resolution of the issues.
Item 9. Regulation FD Disclosure.
On February 16, 2004 registrant issued a press release entitled
"Halliburton Voluntarily Suspends Billing For the Next Month."
The text of the press release is as follows:
Halliburton Voluntarily Suspends Billing For the Next Month
Company continues to resolve "Boots Through the Door"
versus "Meals Served" issues
HOUSTON, Texas -- Halliburton (NYSE:HAL) today said it has offered an
unprecedented response to the Department of Defense regarding the number of
meals which have been served to the troops. The company today said it has
suspended certain invoicing of subcontractor services for meal planning, food
purchase and meal preparation for soldiers.
Simultaneously, Halliburton said the company will continue working with our
customer, the US Army, to finalize an agreement as to how to reconcile the
differences between meals ordered by the Department of Defense and the 'boots
through the door' number of meals actually served to the soldiers. While the
company cannot predict when the methodology will be agreed upon with the
military, it is important to note that the amounts that are being withheld from
billing have the potential to increase as well as decrease.
"It is important to understand that this is not any sort of `admission'. As a
responsible government contractor it is the right thing to do," said Randy Harl,
president and chief executive officer, KBR. "KBR is a good steward of the
taxpayers' dollars."
As the reconciliation process continues, the difference between the number of
meals planned and the amount of meals actually served to the troops on the
ground first totaled $16 million and shortly thereafter an additional $11.4
million. In an SEC filing last week, Halliburton confirmed it agreed with the
DCAA to suspend subcontractor billings of $34.5 million. In addition, the
company now is voluntarily holding approximately $140 million of subcontractor
invoices for food services that have already been provided to the military.
Halliburton will defer further billing to the US Government for these
subcontracted services until an agreement is reached. Despite taking these
actions, the company said it expects the basic issues of breakfast, lunch and
dinner to continue to be the topic of political discussions. The company says it
is willing to wait until the facts catch up to the rhetoric. "Most cooks know
how many people are coming to dinner when they are preparing food," said Harl.
"It's just not that simple in Iraq."
Halliburton, through its KBR subsidiary, is providing food service for the
troops in a contract known as LOGCAP. The company provides food and laundry
services as well as communications for the troops as part of the contract. "We
give the soldiers a way to feel a little bit closer to home," said Harl.
"Because we are good stewards of the taxpayers' money and we believe in our
ability to do this job better than any other company, we are willing to delay
our payment for the work we are doing. I know of no other company who would do
this and also has the special skill sets that enable it to do the work we are
doing to support the troops, said Harl."
Halliburton is resolved to support the military while also carrying out the
important responsibility to maintain oversight in the expenditure of funds. Our
employees have had a significant and positive impact on the quality of life for
troops and are risking their lives everyday, while providing troops housing,
meals, mail and other vital services.
KBR will continue to work with all government agencies to establish that the
company's contracts are not only good for the United States, but also that
Halliburton is the best and most qualified contractor to perform these difficult
and dangerous tasks. KBR has always worked with the DCAA and will continue to
work with them in the future. At times, KBR and DCAA have disagreed on issues
that were subject to audit, but the company and the DCAA have always been able
to work through these issues.
Halliburton has a 60-year history of working with the government. KBR helped
build U.S. war ships in World War II, as well as projects in Somalia, Rwanda,
Haiti and the Balkans. Halliburton also helped put out more than half of the oil
well fires in Kuwait during the 1991 Gulf War.
Halliburton, founded in 1919, is one of the world's largest providers of
products and services to the petroleum and energy industries. The company serves
its customers with a broad range of products and services through its Energy
Services and Engineering and Construction Groups. The company's World Wide Web
site can be accessed at www.halliburton.com.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HALLIBURTON COMPANY
Date: February 19, 2004 By: /s/ Bruce A. Metzinger
---------------------------------
Bruce A. Metzinger
Assistant Secretary