S&P: Halliburton unaffected

The U.S. Army Field Support Command (AFSC) and Halliburton Co. (BBB/stable/A-2) subsidiary Kellog Brown & Root (KBR) have completed the definitization of 27 outstanding task orders, valued at more than $10.5 billion, related to the Logistics Civil Augmentation Program (LOGCAP) III contract.

The company has reached an agreement with the Army on billings for food service provided to troops in Iraq, resolving a payment withholding issue that has been pending since February 2004. The AFSC will pay KBR $1.176 billion while retaining $55.1 million of about $200 million in payments that had been withheld while these issues were resolved.

Standard & Poor's said these are largely favorable developments for Halliburton as it alleviates two of the concerns associated with KBR. Still, there is no near-term impact on the ratings or outlook, which already incorporated the expectation for such a resolution of these issues.

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