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Halliburton Says SEC Begins Probe

May 29, 2002

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DALLAS (AP) _ The Securities and Exchange Commission has begun a preliminary investigation of the accounting method Halliburton Co. uses to report cost overruns on construction jobs, the company said Tuesday.

The Dallas-based oil-services provider told the SEC it would cooperate fully with the investigation.

Halliburton said it believes it followed generally accepted accounting principles in accounting for the construction claims and change orders, which are negotiated with customers.

The company believes the investigation is the result of a New York Times article on May 22.

Before 1998 and its merger with Dresser, Halliburton said it did not record construction job claims and change orders in revenue or accounts receivable before they were resolved with the customer.

But in 1998, the company began recording such items in revenue and accounts receivable when Halliburton expected the money would be collectible from the customer, and it has continued that practice since.

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