Investment Information

Investment Objective & Strategy

The Conservative Premixed Portfolio (CPP) seeks long-term
growth with a relatively low level of market risk. The
investment option aims for a competitive investment return,
while minimizing risk by diversifying its investment among
different asset types. Further diversification is achieved by
using several investment managers with different styles.
The investment option invests in: US and non-US
equities listed on exchanges of developed and emerging
markets, broad and high yield bonds and stable value. Stocks
provide potential growth balanced by bonds and stable value
which seek to minimize risk and short term volatility. Non-US
stocks and bonds may have different risk and return
characteristics and may be used for diversification purposes.
Unit price, yield and return will vary. Note: Voting rights for
securities held in the investment option are not passed on to
you.
Fees and Expenses as of 12-31-12
Management Fee 0.29%
Plan Admin Fee 0.07%
All Others 0.04%
Total Fee as a % 0.40%
Total Fee per $1000 Investment $4.00
Management Company
Aberdeen Asset Management Inc.
Agincourt Capital Management, LLC
Boston Company Asset Management, LLC
Fayez Sarofim & Co (US)
Galliard Capital Management Inc
GAMCO Investors, Inc
Integrity Asset Management, LLC
Jennison Associates LLC
Loomis Sayles & Company L.P.
Metropolitan West Asset Management, LLC
Northern Cross, LLC
Pacific Investment Management Co LLC
Pyramis Global Advisors Trust Co.
Sands Capital Management, LLC
State Street Global Advisors
T. Rowe Price Associates, Inc.
Wellington Management Company, LLP
Volatility and Risk
Volatility as of 12-31-12
Low Moderate High
Investment
Category
In the past, this investment has shown a relatively small
range of price fluctuations relative to other investments.
Based on this measure, currently more than two-thirds of all
investments have shown higher levels of risk. Consequently,
this investment may appeal to investors looking for a
conservative investment strategy.
Performance
5
10
15
20
0
-5
-10
-15
Total Return%
as of 12-31-12
Investment
Benchmark
Average annual, if greater
than 1 year
YTD 3 Month 1 Year 3 Year 5 Year Since Inception
9.91 1.46 9.91 6.94 4.25 5.46 Fund Return %
8.64 1.13 8.64 6.39 3.50 4.95 Benchmark Return %
Data above represents past performance and does not guarantee future results. Investment returns and principal values
will fluctuate so that participants' units may be worth more or less than their original cost when redeemed. Current
performance may be lower or higher than data stated herein. Performance is shown after all expenses.
Portfolio Analysis
Composition as of 12-31-12 % Assets
U.S. Stocks 24.8
Non-U.S. Stocks 12.9
Bonds 19.0
Cash 3.4
Other 40.0
Morningstar World Regions as of 12-31-12 % Fund
Americas 74.86
...........................................................................................................
North America 72.50
Latin America 2.37
Greater Europe 17.49
...........................................................................................................
United Kingdom 4.58
Europe Developed 11.68
Europe Emerging 0.93
Africa/Middle East 0.31
Greater Asia 7.65
...........................................................................................................
Japan 2.50
Australasia 1.27
Asia Developed 1.60
Asia Emerging 2.27
Morningstar Equity Style Box
L
a
r
g
e
M
i
d
S
m
a
l
l
Value Blend Growth
as of 12-31-12 % Market Cap
Giant 42.14
..........................................................
Large 33.21
Medium 15.04
Small 7.27
..........................................................
Micro 2.34
Morningstar Fixed Income Style Box as of 12-31-12
H
i
g
h
M
e
d
L
o
w
Ltd Mod Ext
Avg Eff Duration 4.60
Avg Eff Maturity 6.30
Avg Credit Quality BB
Top 10 Holdings as of 12-31-12 % Assets
Wells Fargo Stable Return CIT Fund G 38.94
Apple Inc 0.85
Ginnie Mae Single Family TBA 3% 2042-02-01 02-01-42 0.65
US Treasury Note 2.625% 08-15-20 0.62
FHLMC 3.5% 07-01-42 0.53
.............................................................................................
Google, Inc. Class A 0.50
Amazon.com Inc 0.50
US Treasury Note 2% 11-15-21 0.43
Visa, Inc. 0.42
Qualcomm, Inc. 0.38
...........................................................................................................
Total Number of Stock Holdings 1686
Total Number of Bond Holdings 752
Annual Turnover Ratio % 242
Morningstar Equity Sectors as of 12-31-12 % Fund
" Cyclical 39.62
...........................................................................................................
Basic Materials 5.91
Consumer Cyclical 14.67
Financial Services 16.88
Real Estate 2.16
v Sensitive 39.40
...........................................................................................................
@ Communication Services 2.26
@ Energy 9.78
@ Industrials 13.76
@ Technology 13.60
~ Defensive 20.98
...........................................................................................................
@ Consumer Defensive 9.52
Healthcare 10.38
@ Utilities 1.08
Morningstar F-I Sectors as of 12-31-12 % Fund % Category
Government 20.08 22.75
@ Corporate 33.47 33.45
Securitized 29.09 18.84
@ Municipal 2.26 4.15
Cash & Equivalents 15.11 17.83
@ Other 0.00 2.98
Release Date: 12-31-2012
Conservative Premixed Portfolio
....................................................................................................................................................................................................................................................................................................................................................
Benchmark Morningstar Category Total Assets ($mil) Inception Date
Custom Benchmark Conservative Allocation 165.33 01-02-06
2013 Morningstar, Inc., Morningstar Investment Profiles 312-696-6000. All rights reserved. The information contained herein: (1) is proprietary to
Morningstar and/or its content providers; (2) may not be copied or distributed and (3) is not warranted to be accurate, complete or timely. Neither
Morningstar nor its content providers are responsible for any damages or losses arising from any use of information. Past performance is no guarantee
of future performance. Visit our investment website at www.morningstar.com.
Page 1 of 2
The Halliburton Retirement and Savings Plan (Plan) is
intended to be participant-directed plan as described in
Section 404(c) of the Employee Retirement Income Security
Act of 1974, as amended (ERISA). Therefore the fiduciaries of
this plan are generally relieved of liability for any losses that
are the result of any investment instructions given by a
participant or a beneficiary of the Plan.
The allocation directed to each underlying investment
manager under each investment option has been selected by
the Halliburton Company Investment Committee in
consultation with, Mercer Investment Consulting, Inc., the
investment advisor to the Plan. The individual investment
options will be reviewed periodically and the Investment
Committee will modify the allocations and/or underlying
investment managers when deemed appropriate.
An investment's principal value and investment return will
fluctuate, so that an investor's unit values may be worth
more or less than at the time of the original investment. In
accordance with ERISA, the Plan assets are held in trust for
the exclusive benefit of participants and beneficiaries. As
with all 401(k) plans, assets are not FDIC-insured, may lose
value and are not guaranteed by a bank or other financial
institution.
Reliable sources are utilized to produce these reports but
there is no warranty or guarantee that this data is accurate,
timely, or complete. Historic performance is not an indication
of future results and should not be relied upon to predict
future investment returns.
Contact Information
For current information, including month-end performance,
please visit www.halliburton.com/totalrewards (if you are a
current employee) or www.netbenefits.com (if you are a
former employee). You may also call the Halliburton Benefits
Center at 1-866-321-0964 (international toll free, use your
country's AT&T access code, then 866-321-0964) or for toll
call 857-362-5980, select option 2.
Principal Risk
The Conservative Premixed Portfolio invests in both growth
and value stocks of all market capitalizations. Growth stocks
can be more volatile. Value stocks can continue to be
undervalued by the market for long periods of time.
Securities of smaller, lesser-known companies can be more
volatile than those of larger companies. Stock markets are
volatile and can decline significantly in response to adverse
issuer, political, regulatory, market, economic or other
developments. These risks may be magnified in foreign
markets. In addition, foreign securities are subject to
currency-exchange-rate risks. Bonds are subject to interest
rate risk; as interest rates rise, bond prices usually fall, and
vice versa. This effect is usually more pronounced for
longer-term securities. Bonds also carry inflation, credit and
default risk for both issuers and counterparties. Unlike
individual bonds, most bond funds do not have a maturity
date, so holding bonds until maturity to avoid losses caused
by price volatility is not possible. The asset-backed
investment contracts and securities purchased by the stable
value commingled fund are backed solely by the financial
resources of the issuers of such contracts and by a portfolio
of securities. An investment in stable value is not insured or
guaranteed by the managers, the plan sponsor, the trustee,
the FDIC, or any other government agency. The asset-backed
contracts entered into by the stable value commingled fund
enables the fund to utilize book value (principal plus interest
accrued to date) accounting.
Through the use of book value accounting, there is no
immediate recognition of investment gains and losses.
Instead, gains and losses are recognized over time by
periodically adjusting the interest rate credited to the stable
value commingled fund under the contracts. However, while
the stable value commingled fund seeks to preserve your
principal investment, it is possible to lose money by investing
in stable value. The asset-backed contracts provide for the
payment of certain withdrawals and exchanges at book value
during the term of the asset-backed contracts. In order for
the asset-backed contract issuers to pay such withdrawals
and exchanges at book value, the contract terms subject the
stable value commingled fund and its participants to certain
restrictions. For example, withdrawals prompted by certain
events (e.g., layoffs, early retirement windows, spin-offs,
sale of a division, facility closings, plan terminations, partial
plan terminations, changes in laws or regulations) may be
paid at the market value of the investment option's
securities, which may be less than the book value balance.
Blended Benchmark
26% Russell 3000 Index/12% MSCI All Country World ex
U.S. Index/24% Barclays Capital U.S. Aggregate Index/38%
Hueler Pooled Fund Universe Average
Performance
Investment performance is determined after fees are charged
to the investment option and assumes reinvestment of
dividends and capital gains. Investment option performance
is compared with the blended benchmark (index). Indices are
unmanaged portfolios of specified securities and the indices
do not reflect any initial or ongoing expenses. The
investment option's portfolio may differ significantly from the
securities in the indices.
Additional Fee Disclosure
The expense ratio is an asset-weighted blend of fees and
will fluctuate based on asset values and market conditions;
any fees quoted herein are subject to change. Transaction
costs incurred by the investment option for buying and
selling securities are not included in the expense ratio. These
costs, along with management fees, plan administration fees
and other fees are paid out of the investment option's assets,
reducing the rate of return realized by participants. There are
no entry or exit fees charged to participants who invest in
this investment option. Cumulative effect of fees and
expenses can substantially reduce the growth of a
participant's retirement account. Participants are encouraged
to visit the Employee Benefits Security Administration
website for information and example demonstrating the
long-term effect of fees and expenses. Fees and expenses
are only one of several factors that participants and
beneficiaries should consider when making investment
decisions.
Collective Trusts and Separate Accounts
Most of the Plan's investment options are structured using
institutionally managed separate accounts; this means the
accounts are managed only for participants in the Halliburton
Plans. Individual securities are bought and sold by
professional investment managers selected by the
Investment Committee. Collective Trusts are investment
vehicles operated by banks or trust companies. Neither
collective trust funds nor separate accounts are mutual
funds. Unlike mutual funds, separate accounts and collective
trust funds are not subject to and are not registered under
the Securities Act of 1933 or the Investment Company Act of
1940.
Morningstar Style Box
The Morningstar Style Box reveals a investment option's
investment strategy as of the date noted on this report. For
equity securities the vertical axis shows the market
capitalization of the stocks owned and the horizontal axis
shows the investment style (value, blend, or growth). For
fixed-income securities, the vertical axis shows the credit
quality of the bonds owned and the horizontal axis shows
interest rate sensitivity as measured by a bond's effective
duration. Morningstar's process for classifying a fund's bond
portfolio credit quality differs from the process that has been
used in prior years. Previously, the investment option's bond
portfolio credit quality was based on the weighted average
credit quality of the underlying bonds in the portfolio as
determined by Moody's. Morningstar uses a methodology
that attempts to capture the probability of a credit
downgrade in the portfolio. This method assigns a greater
weighting to lower quality bonds because lower quality
bonds are more likely to be downgraded. This method results
in the investment option having a lower quality score than
the actual weighted average credit quality of the portfolio.
The investment option's active managers take the risk of a
downgrade into account in determining which bonds to hold.
Morningstar's rating is expected to fluctuate with market
conditions over time.
Stable Value
The Conservative Premixed Portfolio (CPP) has a 38%
exposure to stable value. Stable value funds are invested in
high quality, diversified fixed income portfolios (i.e. bonds)
that are protected against interest rate volatility by contracts
issued by banks and insurance companies. Stable value
funds are designed to preserve capital while providing
steady returns and are considered a conservative and low
risk investment.
The market value of bonds is volatile by nature and
moves inversely with interest rate changes. As interest rates
move up, the market value of bonds declines, and vice-versa.
This volatility is not unusual. Unlike other investments
options, however, stable value is protected against interest
rate swings via insurance company and bank contracts. The
contracts are designed to allow participants to transact at
book value (principal plus accrued interest less expenses)
without reference to the market value fluctuations of the
underlying bond portfolios. The risks associated with these
contracts are outlined in the Principal Risks section.
CPP invests in a stable value commingled fund that
holds traditional guaranteed investment contracts (GIC),
insurance separate accounts contracts and synthetic GICs.
GICs are typically issued by insurance companies where they
guarantee the unit holders of the commingled fund principal
repayment and a fixed or floating interest rate for a
predetermined period of time. Insurance separate accounts
are contracts with insurance company where funds are
entrusted to the insurance companies for the purpose of
investing in securities. These securities are kept separate
from the insurance company's general investments so there
is no credit risk in the event that the insurer becomes
insolvent. The returns are variable rather than fixed, so the
contract holder rather than the insurance company assumes
market risk. In the synthetic GIC arrangement, the
participants of the Plans own the underlying fixed income
securities that support the insurance and bank contracts. The
diversified portfolios are managed by investment managers
solely for the Plan participants.
Disclosure
2013 Morningstar, Inc., Morningstar Investment Profiles 312-696-6000. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or
its content providers; (2) may not be copied or distributed and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are
responsible for any damages or losses arising from any use of information. Past performance is no guarantee of future performance. Visit our investment website at
www.morningstar.com.
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