Halliburton's press release says that the spike in profits was due primarily to the Pentagon's payment of "award fees" for KBR work in the Middle East.
Government and Infrastructure (G&I) operating income for the second quarter of 2005 was $73 million compared to $19 million in the second quarter of 2004, a 284% increase.-- Haliburton Press Release (.pdf) announcing 2005 second quarter results
The increase primarily resulted from positive developments related to LogCAP award fees. G&I continues to receive favorable job performance ratings for its work supporting the troops in Iraq.
As a result, G&I recognized $29 million of income for recent awards on completed work, and increased the award fee accrual rate for its ongoing work under the LogCAP contract from 50% to 72% during the quarter.
G&I also realized improved performance at the DML shipyard, partially offset by the completion of the RIO contract in Iraq.