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Contents

Contents. Introduction to our team Our understanding of Halliburton’s needs Roles and responsibilities Our approach Tools and technology Aligning Global Resources Client list Fees Attachments Attachment A: Detailed Work Plan Attachment B: Detailed Biographies

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  1. Contents • Introduction to our team • Our understanding of Halliburton’s needs • Roles and responsibilities • Our approach • Tools and technology • Aligning Global Resources • Client list • Fees • Attachments • Attachment A: Detailed Work Plan • Attachment B: Detailed Biographies • Attachment C: Cross Reference to RFP 1

  2. Introduction to Our Team PricewaterhouseCoopers Core Team Firm Leaders Ron Knecht National Sarbanes-Oxley Leader Al Bledsoe Houston Office Managing Partner Subject Matter Experts Gary Prasher Risk & Control Partner Ray Slocumb Information Technology / Controls Partner Perry Elders Engagement Partner Doug Cogan Engagement Senior Manager ESG Doug Cogan Lead Manager KBR Lanyard Sledge Lead Manager Houston Team Scott Daniels Senior Associate Global Teams Houston Team Global Teams 2 PricewaterhouseCoopers

  3. Our Understanding of Your Needs Halliburton needs: • Project management • Assistance scoping the controls assessment • Understanding of roles, key steps, options, and best practices • Right team that complements your resources • Advisors experienced in controls assessments • Global Resources • Tool to document and map processes/controls to COSO • Commitment to September 30, 2003 deadline 3

  4. A Word About COSO No firm understands the COSO framework as well as PricewaterhouseCoopers. • 10 years ago our risk and control practice authored the report for COSO– a consortium of leading organizations dedicated to improving the quality of financial reporting • Recently COSO awarded PricewaterhouseCoopers a second engagement to develop an enterprise-wide risk management framework • We expect that the project will be completed and the formal report published in June 2003 4

  5. Roles and Responsibilities Halliburton -Disclosure Committee Steering Committee Halliburton VP and Controller R. Charles Muchmore, Jr. Halliburton Director - Audit Services Dennis Croysdale KBR Chief Financial Officer Bruce Stanski Others External Auditor KPMG PwC Advisor Perry Elders Core Project Team ESG Lyn Beaty Nadeem Ashfaq Bryce Towney KBR Steve Kuxhausen Mark Traylor Mike Price PwC Perry Elders Doug Cogan Lanyard Sledge Other Resources Halliburton Resources: PwC Subject Matter Specialists: • Finance Managers • Operations Management • Information Technology • Internal Audit • SEC Attorney(s) • Engineers • Construction Specialists • Manufacturing Specialists • Internal Controls • Process Specialists • Information Technology/SAP • Others as needed 5 PricewaterhouseCoopers

  6. Disclosure Committee Membership: Chief Financial Officer Corporate Controller Audit Committee Chairman Legal / IT / Operations Scope: Reports to Executive Management Evaluate transactions and events to determine disclosure Review and evaluate external disclosures Steering Committee Membership: Corporate Controller Director - Audit Services ESG / KBR CFOs / Controllers Legal / IT / Operations Scope: Weekly debriefings with Core Team Reports to Disclosure Committee Make key decisions Recommend certification to Disclosure Committee Roles and ResponsibilitiesBest Practice - Disclosure Committee vs. Steering Committee 6 PricewaterhouseCoopers

  7. Halliburton Membership: Project Manager from ESG and KBR Various business and process specialists Scope: Lead Project Work with PwC Provide business unit/operational insights PricewaterhouseCoopers Membership: Engagement Partner and Core Team Subject Matter Experts Scope: Project Management Technical and strategic consultants Full time, on-sight consultants Development of project plans and tasks Roles and ResponsibilitiesCore Project Team 7 PricewaterhouseCoopers

  8. Key Decisions • Evaluation framework – COSO • Identify Key Financial Processes (KFPs) • KFP impact • KFP targeted maturity • Level and form of KFP documentation: • Process maps and/or detailed procedures memos • Summary memos • Extract of internal and external audit work • Bullet point summaries • Locations and processes to be documented and mapped to COSO • Tool for mapping to COSO • Testing scopes • Control gaps to be remediated prior to certification • Overall certification recommendation to Disclosure Committee 8

  9. Our ApproachProposed Project Timeline 9 PricewaterhouseCoopers

  10. Our Approach Five key stages of proven structured approach: • Our approach is designed to: • Further define roles of Core Project Team • Help quickly evaluate options • Reach consensus • Provide near-term work plan and ongoing assessment plan See Attachment A for Detailed Work Plan 10 PricewaterhouseCoopers

  11. Stage 1 Timeline & Resources PricewaterhouseCoopers 11

  12. Phase 1 – Mobilize Project • Roles and responsibilities for Core Project Team • COSO Training Materials for Core Team • Mission Statement (project definitions) • Selection of project management tool • Summaries of areas requiring clarification • Identification of other Halliburton specialists and liaisons needed • Preliminary schedule of resource requirements for inventory of financial processes • Project Calendar through Phase 3 • Selected Pilots • Identification of personnel to perform pilots Stage 1- Deliverables • Phase 3 – Sizing the Work • Matrix of financial processes • Halliburton terminology and business framework mapped to COSO • Proposed business process taxanomy/business model • Standardized vocabulary for KFP’s • Key findings, observations on each pilot • Phase 5 – Develop Resource – Loaded Work Plan • Final business process taxonomy/business model • Resource-loaded detailed work plan for Stage 2 • Man day requirements for Halliburton personnel (and contractors if used) • Key milestones for each KFP and/or business unit • Tool/mechanism to track issues and proposed remediation plans (issues management) • Phase 4 – Evaluate and Select Technology Enabling Tool • Tool requirements and selection criteria • Summary evaluation of available tools • Possible options if no go assessment made on available tools • Fully loaded estimate of tool costs (e.g., software, hardware, infrastructure) • Executed license arrangement (if external) • Phase 6 – Stage 2 Start-up • Stage 2 training materials • User guides for tools to be used in Stage 2 • Phase 2 – Engage Key Stakeholders • Presentation to the Internal Control Project Steering Committee • Communications infrastructure • Communication package(s) • Calendar of set status meetings • Summary of observations/issues raised by key stakeholders 12 PricewaterhouseCoopers

  13. Tools and Technology Internal Controls Workbench The Workbench is a technology enabler designed to facilitate consistent documentation and assessment of internal controls for clients. • More than a checklist to COSO, it becomes your central document and compliance repository • Enables continuous compliance with 302 and 404 - without need for continuous third party support • Web-enabled with global reach • Populated with COSO and configurable to your business standards, definitions and processes • Stable and scalable technical architecture – Microsoft SQL/Server 13

  14. Hierarchy COSO Structure Internal Control Workbench Structure COSO Component Control Activity Cycle Revenue and Receivables Transaction The PROCESS Transaction Order Processing Control Objectives Control Objective Process Only Valid Orders Risks Issues Risk Orders may not be authorized Control Activities Action Plans Control Activities Your unique control activities Testing 14 PricewaterhouseCoopers

  15. 15

  16. Tools and Technology Global Best Practices • Dissects best practices into 13 business process categories and 163 sub-categories • Operating processes represent composite of all activities related to acquiring and serving customers • Management processes include all other functions 16

  17. Halliburton - 69 Countries Africa 11 countries Asia 10 countries Australia / Asia Pacific 11 countries Europe 14 countries Middle East 7 countries North America 8 countries Latin America 8 countries Number of countries from Halliburton website PwC - 142 Countries Africa 26 countries Asia 21 countries Australia / Asia Pacific 6 countries Europe 43 countries Middle East 13 countries North America 15 countries Latin America 18 countries Aligning Global Resources 17

  18. Audit Clients Dana Corporation Eastman Kodak Haggar Humana Moody’s Corporation Pride International Regis Corporation Sara Lee Non-Audit Clients Amdocs BJ Services Invacare Monsanto Nicor ShopNBC.com/ (ValueVision Media, Inc.) Toyota Financial Services Client ListWe are assisting with Sarbanes-Oxley 404 services Note: We have numerous other S-O 404 engagements for which client identification is not available. 18

  19. Fees • We sincerely want to serve Halliburton in the Sarbanes-Oxley Section 404 compliance project • We estimate our level of effort to be approximately 2,000 hours for Stage 1, which represents approximately $600,000, assuming Halliburton provides the resources for documentation • We will bill US personnel at the following hourly rates: • Partner $385 • Senior Manager $330 • Manager $275 • Senior Associate $190 • Associate $125 • Individual hourly rates for international personnel will be determined based on the nature of work to be done, skills required and geographic location • Where we are engaged as the S-O 404 advisory, there is no additional charge for the PwC Internal Control Workbench. 19

  20. Key Challenges • Time and global resources to complete project by September 30, 2003 • Documentation • For many companies, processes are not formally or uniformly documented • Mapping to COSO • Control improvement • Systems alignment • Joint ventures (for companies like Halliburton) 20

  21. Addressing Key Challenges PricewaterhouseCoopers offers: • Full time resources to complete project on-time • Global resources we can call on where you operate • Detailed work plan to address documentation options and best practices • Scope and methodology for mapping to COSO • Systems specialists to address issues/needs • Experience in tough judgments about scope (e.g. locations and processes) and conclusions (e.g. COSO gap assessments). 21

  22. Why Choose PricewaterhouseCoopers? • Developed original COSO framework • Deep industry knowledge as leading service provider to global oilfield services companies • Thought leader on Sarbanes-Oxley • Developed technology tools specifically for S-O 404 • Performing numerous projects for OFS industry (and across other industries), for audit and non-audit clients • Global resources to help you wherever needed • Strong systems and SAP skills, including controls tools • Right tools - Internal Controls Workbench and Global Best Practices 22

  23. Attachment ADetailed Work Plan - Stage 1

  24. Attachment BDetailed Biographies

  25. Office: (713) 356-4315 Mobile: (713) 305-7873 Home: (713) 973-8003 E-mail: perry.elders@us.pwcglobal.com Perry Elders Engagement Partner Perry is a partner in the Houston assurance practice and has 20 years of audit experience. He joined PwC on July 1, 2002 after 19 years with Arthur Andersen in Houston, where he was the head of the oilfield service practice for the Gulf Coast. Perry has extensive experience in the oilfield service industry, with particular specialization in the contract drilling sector. He has led three industry forums on contract drilling accounting practices. Perry has extensive internal control evaluation experience and is a member of the PwC Sarbanes-Oxley task force. He has led numerous worldwide multi-location engagements for complex organizations. Perry also has experience in accounting by manufacturers and construction contractors, including cost accounting and percentage of completion revenue recognition. Perry’s clients have included: Pride International, Transocean, R&B Falcon, OFS Portal, Offshore Energy Center, Lufkin Industries, Oceaneering International, Hanover Compressor, Total Safety, Skaugen PetroTrans, Unitor, Weatherford International, Stewart & Stevenson, Drexel Oilfield Services, and Quality Tubing Production Operators. 1 PricewaterhouseCoopers

  26. Office: (713) 356-8284 Mobile: (713) 301-3448 Home: (281) 257-9259 E-mail: doug.cogan@us.pwcglobal.com Doug Cogan Engagement Senior Manager & Lead ESG Manager Doug is a Senior Manager in our Houston office with more than 14 years of experience, 11 of which have been focused on the Energy industry. He has strong knowledge of Sarbanes-Oxley methodology and tools, and will be instrumental in managing this engagement. Doug focuses on integrated information systems risk within the energy industry, and he has significant experience with ERP implementations and the associated technology risks. He has participated in security solutions including Enterprise Resource Planning security, web-enabled security and technical security solutions. He has managed both internal and external audit functions within the Energy industry, and he has been heavily involved in the creation in our integrated audit approach and with our energy e-business diagnostic tool. His petroleum and utility client experience is extensive and is balanced well with significant information risk involvement with retail and manufacturing clients. Doug’s clients have included: Amerada Hess, Amoco, BP, Caterpillar, ChevronPhillips, Consolidated Natural Gas, Cooper Cameron, Equilon/Motiva, ExxonMobil, Kinder Morgan, Marathon, Shell, and US Steel. 2 PricewaterhouseCoopers

  27. Office: (713) 356-6701 Mobile: (713) 303-5002 Home: (281) 360-6249 E-mail: lanyard.g.sledge@us.pwcglobal.com Lanyard SledgeLead KBR Manager Lanyard is a skilled manager in our Houston risk and controls practice with over 20 years of internal audit and risk management experience in the energy and technology industries. He has focused on areas such as financial reporting, internal controls, allocations, storage and revenue billing. In his work, he has provided his expertise to ensure the successful delivery of new business services and strategic client solutions in the areas of Information Technology, Internal Controls, Financial Reporting, and Business Analysis. Lanyard has assisted companies in addressing the requirements of Sarbanes-Oxley, including revenue recognition and enhancements to corporate policies and procedures. He has also provided advice to senior management on the establishment and monitoring of key processes for S-O 404 readiness. Lanyard’s clients have included: Freeport MacMoRan, GlobalSantaFe, Hanover Compressor, Noble Drilling, Plains All American, Pride International, Quanta Services, and Texas United. 3 PricewaterhouseCoopers

  28. Office: (713) 356-4666 Mobile: (832) 541-8398 Home: (713) 426-2422 E-mail: scott.daniels@us.pwcglobal.com Scott DanielsSenior Associate Scott has worked at PricewaterhouseCoopers for over 6 years and has been responsible for developing and managing quality teams and coordinating information systems and internal control related engagements for our major clients. He has 4 1/2 years of information systems experience and assessing internal components and characteristics. Scott has been part of many engagement teams focused on reviewing control environments and recommending best practices and control improvements. In addition to his audit support responsibilities, Scott has spent the last three months working on a large worldwide Sarbanes-Oxley project that focused on controls assessment and preparation for 404 attestation. He has experience working on international energy companies and has been involved centrally in the delivery of services for business processes and/or information system controls projects. His clients have included: ChevronTexaco, Cooper Cameron, Schlumberger, Conoco, Performance Products, SantaFe Snyder Oil, and Cabot Oil & Gas. 4 PricewaterhouseCoopers

  29. Office: (713) 356-4686 E-mail: gary.c.prasher@us.pwcglobal.com Gary PrasherRisk and Control Partner Gary is the leader of our Sarbanes-Oxley compliance practice, and will serve as our Subject Matter Specialist for Sarbanes-Oxley Section 404. He will provide guidance from the risk and control perspective, advising our team throughout the engagement. Gary’s experience covers a broad range of diverse market segments, with extensive experience in the energy industry. He has specialized in risk management services which have included process control work, internal audit services and information technology and compliance review services. Gary has over 33 years of experience with PwC serving a broad range of clients ranging from start ups to large international corporations and large service organizations. Gary is currently consulting with numerous clients in the Houston area on Sarbanes-Oxley and is one of the Firm’s designated experts on Sarbanes-Oxley. Gary’s clients have included: Apache Corporation, Marathon Oil, BP, Schlumberger, Shell, IBM, El Paso Energy, and Allied Waste. 5 PricewaterhouseCoopers

  30. Office: (713) 356-8039 E-mail: raymond.e.slocumb@us.pwcglobal.com Ray SlocumbIT and Controls Partner Ray is our Central Region Leader for the GRMS Energy industry practice. He has over 17 years of experience in leading various systems control projects on all technical platforms, including mainframe, client server, network and web-enabled environments in the energy industry. Ray particularly specializes in managing large IT audits though co-sourcing or full outsourcing client arrangements. Ray’s recent project responsibilities have included managing large IT audit outsourcing projects, system development audit projects, system quality assurance reviews, E-business controls and strategy evaluations, trading and marketing control reviews, business continuity planning, technical security diagnostic reviews, and assessment of controls in various large systems applications. He also has performed and lead extensive controls projects related to SAP, Peoplesoft and Oracle applications. His clients have included ChevronPhillips, Texaco, ConocoPhillips, El Paso Energy, ExxonMobil, Burlington Resources, Entergy, Dynegy, McDermott International, Premcor, Lower Colorado River Authority, Pugent Sound Energy, and The Interstate Natural Gas Association (INGAA). 6 PricewaterhouseCoopers

  31. Office: (713) 356-6005 E-mail: ron.knecht@us.pwcglobal.com Ron KnechtNational Sarbanes-Oxley Leader Ron is our National Sarbanes-Oxley Leader, and brings extensive experience serving a wide variety of energy companies for more than 24 years. He also serves as the Firm's energy practice technical liaison partner with the National office, as well as one of two Houston office Risk Management partners. Ron participates in preparing the Firm's response to emerging accounting standards by the FASB, SEC and other standard-setting bodies. In addition, Ron’s experience includes his involvement with more than 35 transactions in the domestic and international arena. He frequently consults with the energy divisions of major banks to structure energy-related transactions such as off-balance sheet financings, volumetric product payments, forward sales and others. He has a deep knowledge of working with operations in Europe, Southeast Asia, the Middle East, and the Latin American countries of Argentina, Mexico and Venezuela. Ron’s clients have included: Shell Oil Company and Shell’s joint ventures – Shell Deer Park Refining, Ltd., Equilon Enterprises and Motiva Enterprises, Santa Fe Energy Resources, Union Texas Petroleum, and Equilon Enterprises. 7 PricewaterhouseCoopers

  32. Office: (713) 356-4963 E-mail: alvin.bledsoe@us.pwcglobal.com Al BledsoeHouston Office Managing Partner Al is the Managing Partner of our Houston office and has nearly three decades of experience in financial accounting, including practice before the SEC, structuring mergers and acquisitions, divestiture transactions and overall business strategy. Al will be responsible for assisting our team in obtaining the best global resources for Halliburton, as well as ensuring that Halliburton is receiving the highest quality professional services available. He has the responsibility to determine what steps are necessary to provide independent assurance as to the quality of the overall client relationship. Al is the Senior Relationship Partner working with Engagement Partners on the following clients: El Paso Energy, Burlington Resources, Dynegy, GlobalSantaFe, Pride International, Southern Union Company, and Service Corporation International. 8 PricewaterhouseCoopers

  33. Attachment CCross Reference to RFP

  34. Halliburton asked... Demonstration of firm’s technology tools to be utilized Firm’s proposed project execution plan Firm’s expectations of Halliburton as to personnel resource requirements Key challenges in becoming compliant with S-O 404, including those specific to Halliburton Best practices regarding Steering Committee composition, functions and operating style Interrelationships between Disclosure Committee and Steering Committee Range of options pertaining to internal control documentation Extent to which processes need to be mapped Fee structure and rates Identify key personnel and their locations assigned to this project Listing of current clients utilizing PwC to assist them in Sarbanes-Oxley Act Section 404 compliance Differentiating aspects of our firm See page… 13 – 16 9 – 12 5, 11 & 19 20 & 21 5 – 8 6 8 8 19 2 & Attachment B 18 22 Cross Reference to RFP 1

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