SECURITIES AND EXCHANGE COMMISSION
|
ý | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2007 |
OR |
o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to |
Commission File Number 1-8097 |
|
ENSCO SAVINGS PLAN
|
|
|
|
2007 | 2006 | ||||
---|---|---|---|---|---|
ASSETS: | |||||
Cash | $ 273,224 | $ -- | |||
Receivables: | |||||
Employer contributions | 12,867,795 | 11,736,462 | |||
Participant contributions | 414,883 | 381,769 | |||
Investments, at fair value | 198,266,202 | 175,446,000 | |||
Net assets reflecting investments at fair value | 211,822,104 | 187,564,231 | |||
Adjustment from fair value to contract value for fully benefit- responsive investment contracts | (304,199 | ) | 413,053 | ||
NET ASSETS AVAILABLE FOR PLAN BENEFITS | $211,517,905 | $187,977,284 | |||
The accompanying notes are an integral part of these financial statements. |
|
ENSCO SAVINGS PLAN
|
2007 | 2006 | ||||
---|---|---|---|---|---|
ADDITIONS TO NET ASSETS ATTRIBUTED TO: | |||||
Interest and dividends | $ 8,224,364 | $ 5,513,604 | |||
Participant contributions | 8,772,517 | 8,458,896 | |||
Employer contributions | 17,614,705 | 16,068,048 | |||
Net appreciation in the fair value of investments | 11,142,642 | 12,410,683 | |||
Total additions | 45,754,228 | 42,451,231 | |||
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: | |||||
Distributions to participants | 22,179,321 | 24,165,690 | |||
Fees | 34,286 | 35,930 | |||
Total deductions | 22,213,607 | 24,201,620 | |||
NET ADDITIONS | 23,540,621 | 18,249,611 | |||
NET ASSETS AVAILABLE FOR PLAN BENEFITS: | |||||
Beginning of year | 187,977,284 | 169,727,673 | |||
End of year | $211,517,905 | $187,977,284 | |||
The accompanying notes are an integral part of these financial statements. |
|
|
Savings Participants may elect to make contributions to the Plan through salary deferrals ("Savings Contributions"), which qualify for tax deferral under Section 401(k) of the Internal Revenue Code ("the Code"). Under the Plan, Savings Contributions are limited to 50% (10% for highly compensated individuals) of the Savings Participant's compensation, subject to the annual dollar limitation set forth in Section 402(g) of the Code ($15,500 and $15,000 for the years ended December 31, 2007 and 2006, respectively). Participants who have attained age 50 before the close of the plan year are eligible to make catch-up contributions. An individual's total catch-up contributions during 2007 could not exceed $5,000. Within certain limits, as defined in the Plan, Savings Participants may elect to increase, decrease or suspend their Savings Contributions. At the discretion of its Board of Directors, the Company may make contributions to the Plan ("Matching Contributions"). Matching Contributions may be made by the Company in the form of a stated dollar amount or in the form of a matching percentage of Savings Contributions. The Company made Matching Contributions to active participant employee accounts as follows: |
Contribution Level | Matching Percentage | ||||||
---|---|---|---|---|---|---|---|
2007 | 2006 | ||||||
First 5% of eligible compensation | 100% | 100% |
Total Matching Contributions for the years ended December 31, 2007 and 2006, were approximately $5.0 million and $4.6 million, respectively. Matching Contributions are disclosed net of approximately $600,000 and $800,000 of forfeitures for the years ended December 31, 2007 and 2006, respectively. At the discretion of its Board of Directors following close of a fiscal year in which the Company reported a profit, the Company may also make annual profit sharing contributions to the Plan for the benefit of all eligible employees ("Profit Sharing Contributions"). The Company may make Profit Sharing Contributions either in cash or in the Company's common stock. Annual Profit Sharing Contributions are allocated to eligible employees based on their proportionate compensation. The 2007 and 2006 Profit Sharing Contributions awarded in cash were approximately $12.6 million and $11.5 million, respectively. At December 31, 2007 and 2006, the Plan's contribution receivable from the Company included approximately $12.6 million and $11.5 million, respectively, related to the 2007 and 2006 Profit Sharing Contributions which were paid in March 2008 and 2007, respectively. |
|
Statutory limits on the sum of a participant's annual Savings
Contributions and Matching Contribution and Profit
Sharing Contribution ("Company Contributions") were the lesser of $45,000 for 2007 and $44,000 for 2006 or 100% of
the Plan participant's compensation. Under certain circumstances, Plan participants may make contributions to the
Plan in the form of rollover contributions ("Rollover Contributions"). Plan Administration T. Rowe Price Trust Company ("T. Rowe Price") serves as the asset custodian and investment manager for the Plan's trust fund and executes all investment actions at the discretion of Plan participants. Recordkeeping responsibilities are maintained by T. Rowe Price. Vesting A Plan participant's Matching Contribution account balance and Profit Sharing Contribution account balance shall become vested and nonforfeitable upon the completion of years of service with the Company, as follows: |
Completed years of service | Vested percentage | ||
---|---|---|---|
Less than two years | 0% | ||
Two years | 20% | ||
Three years | 40% | ||
Four years | 60% | ||
Five years | 80% | ||
Six or more years | 100% |
A Plan participant shall become fully vested in his or her Matching Contribution account balance and Profit Sharing Contribution account balance upon certain events, including death or disability, attaining the age of 65 or a period of service with the Company of at least six years, or a full termination of the Plan. A Plan participant's Savings Contribution account balance and Rollover Contribution account balance are fully vested at all times. Upon completion of each Plan year, the nonvested portion of Matching Contribution account balances and Profit Sharing Contribution account balances of terminated Plan participants are forfeited ("forfeitures") to the Plan and may be used to pay certain administrative expenses of the Plan and then applied to reduce the amount of employer contributions. The Plan used forfeitures of approximately $600,000 and $800,000 to reduce a portion of the Company's Matching Contributions during the years ended December 31, 2007 and 2006, respectively. |
|
Distributions of a Plan participant's Savings Contribution account and Rollover Contribution account and the vested portion of a participant's Matching Contribution account and Profit Sharing Contribution account are generally made within 60 days of an employee request due to termination of employment or certain Internal Revenue Service ("IRS") regulations. At December 31, 2007 and 2006, all Plan participants who had elected to withdraw from the Plan had been paid. Investments The Plan allows participants to direct all contributions among a number of different investment choices managed by T. Rowe Price and Company stock. The daily value of each investment unit is determined by dividing the total fair market value of all assets in each fund by the total number of units in that fund. Investment income, including certain administrative fees and net appreciation (depreciation) of the fair value of investments, are allocated to each Participant's account based on the change in unit value for each investment fund in which the Participant has an account balance. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Method of Accounting The Plan's financial statements are prepared on the accrual basis of accounting. The Plan's investments are stated at fair value using quoted market prices. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year end. Participant loans are valued at their outstanding balances, which approximate fair value. The Plan's interest in the T. Rowe Price Stable Value Common Trust Fund is valued based on information reported by the fund's investment advisor using the audited financial statements of the collective trust at year end. As described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1 and SOP 94-4-1, "Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans" (the "FSP"), investment contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of the Plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The Plan's T. Rowe Price Stable Value Common Trust Fund invests in investment contracts through a collective trust. As required by the FSP, the statements of net assets available for plan benefits present the fair value of the investment in the collective trust as well as the adjustment of the investment in the collective trust from fair value to contract value relating to the investment contracts. The statements of changes in net assets available for plan benefits are prepared on a contract value basis. |
|
Purchases and sales of mutual funds and the Company's common stock fund are recorded on a trade-date basis. Interest is recorded on the accrual basis and dividends are recorded on the ex-dividend date. The Plan presents in the statements of changes in net assets available for plan benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. Net appreciation (depreciation) is calculated based on beginning of the year market values of investments to the date of sale and the purchase price, if purchased during the year, to the end of the year market value. Distributions Distributions of benefits to participants are recorded when paid. Loans Approved loans to eligible participants shall be granted from the participants' vested accounts. The interest rate is a fixed rate determined monthly. All loans must be secured with an irrevocable pledge assignment. Loan payments are generally made through participant payroll deductions. Loans shall not exceed the limitations listed in the Plan document, which are the lesser of 50% of the participant's vested balance or $50,000 less the highest outstanding loan balance in the previous 12 months. The Plan allows no more than two outstanding loans at a time to any one participant. Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the Plan sponsor to make estimates and assumptions that affect the reported amounts of assets and liabilities and related changes in net assets available for plan benefits as well as disclosures of gain and loss contingencies at the date of the financial statements. Actual results could differ from those estimates. |
|
The fair value of investments that represent 5% or more of the Plans net assets are identified as follows: |
December 31, | |||||
---|---|---|---|---|---|
2007 | 2006 | ||||
Mutual Funds | |||||
T. Rowe Price: | |||||
Spectrum Growth Fund | $ 16,349,166 | $ 14,866,827 | |||
Mid-Cap Growth Fund | 15,347,348 | 11,471,579 | |||
Balanced Fund | 13,282,756 | 10,697,144 | |||
Blue Chip Growth Fund | 10,292,492 | 8,898,380 | |||
Other Funds | 24,420,491 | 20,980,419 | |||
Common Collective Trust Fund: | |||||
T. Rowe Price Stable Value Common Trust Fund | 51,468,634 | 48,182,251 | |||
Common Stock: | |||||
ENSCO International Incorporated Stock Fund | 55,752,451 | 49,811,830 | |||
186,913,338 | 164,908,430 | ||||
Loan Fund | 11,352,864 | 10,537,570 | |||
Total Investments | $198,266,202 | $175,446,000 | |||
|
2007 | 2006 | ||||||
---|---|---|---|---|---|---|---|
Company stock | $9,813,547 | $ 8,705,563 | |||||
Mutual funds | 1,329,095 | 3,705,120 | |||||
$11,142,642 | $12,410,683 | ||||||
At December 31, 2007 and 2006, the Plan's investment in the Company's common stock was based on the closing price on such dates of $59.62 per share and $50.06 per share, respectively. Like any investment in publicly traded securities, the Company's common stock is subject to price changes. During 2007 and 2006, the high and low prices for the Company's common stock were $67.61 and $45.00 and $58.75 and $37.36, respectively. |
|
The Plan has no employees. All administrative expenses of the Plan have been paid by the Company. Fees paid by the participants and the Plan for investment management and loan origination services amounted to approximately $34,000 and $36,000 for the years ended December 31, 2007 and 2006, respectively. 5. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. 6. TAX STATUS The Internal Revenue Service has determined and informed the Company by letter dated July 28, 2005, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code ("IRC"). The Plan has been amended since receiving the determination letter, however, management believes that the Plan is designed and is currently being operated in compliance with the applicable provisions of the IRC. During 2005, the Plan allowed certain participants to contribute to the Plan prematurely and subsequently failed to follow their investment direction upon meeting the eligibility requirements to participate in the Plan. During 2006, the Plan self-corrected the error. The correction did not have a material effect on the Plan's financial statements and the Plan's administrator and counsel do not expect this correction to affect the Plan's tax-exempt status. 7. RELATED PARTY TRANSACTIONS Certain Plan investments are shares of mutual funds managed by T. Rowe Price, the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Shares of the Company's common stock held by the Plan as an investment qualify as party-in-interest transactions. 8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets
available for plan benefits between the financial statements and Form 5500: |
December 31, | |||||||
---|---|---|---|---|---|---|---|
2007 | 2006 | ||||||
Net assets available for plan benefits per the financial statements | $211,517,905 | $187,977,284 | |||||
Adjustment to fair value from contract value for fully benefit-responsive investment contracts | 304,199 | (413,053 | ) | ||||
Net assets available for plan benefits per Form 5500 | $211,822,104 | $187,564,231 | |||||
|
|
December 31, | |||||||
---|---|---|---|---|---|---|---|
2007 | 2006 | ||||||
Additions to net assets per the financial statements | $45,754,228 | $42,451,231 | |||||
Adjustment to fair value from contract value for fully benefit-responsive investment contracts | 717,252 | (413,053 | ) | ||||
Additions to net assets per Form 5500 | $46,471,480 | $42,038,178 | |||||
The Plan invests in various investment options that are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in the value of the investments will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statement of net assets available for plan benefits. 10. NEW ACCOUNTING PRONOUNCEMENTS In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value, provides a framework for measuring fair value in accordance with U.S. generally accepted accounting principles and expands the disclosures required for fair value measurements. This statement applies to other accounting pronouncements that require fair value measurements; it does not require any new fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007, but was amended on February 6, 2008 to defer the effective date for one year for certain nonfinancial assets and liabilities. We do not expect this statement to have a material effect on the Plan's financial statements. In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115" ("SFAS 159"). This standard permits entities to choose to measure certain financial assets and liabilities and other eligible items at fair value, which are not otherwise currently required to be measured at fair value. Under SFAS 159, the decision to measure items at fair value is made at specified election dates on an irrevocable instrument-by-instrument basis. Entities electing the fair value option would be required to recognize changes in fair value in earnings and to expense upfront cost and fees associated with the item for which the fair value option is elected. Entities may elect the fair value option provided for in this standard and adopt SFAS 159 on January 1, 2008. We do not expect this statement to have a material effect on the Plan's financial statements. |
|
Effective January 1, 2008, the Plan was amended by the Company
to reduce the period of service with the Company
required for vesting of matching contributions. A Plan participant's Matching Contribution account balance and
Profit Sharing Contribution account balance shall become vested and nonforfeitable upon the completion of
a specific period of service with the Company, as follows: |
Completed years of service | Vested percentage | ||
---|---|---|---|
Less than one year | 0% | ||
One year | 33% | ||
Two years | 67% | ||
Three or more years | 100% | ||
Effective June 1, 2008, the Plan was amended to include automatic enrollment of eligible U.S. taxpaying employees who do not complete their enrollment forms. Effective June 1, 2008, the Plan was further amended to limit the portion of a participant's current contributions allocated to the Company Stock Fund. Subsequent to this amendment, participants may not direct more than 50% of their current investment to the Company Stock Fund. If a participant's investment election in effect on June 1, 2008 provided for an election in excess of 50% to the Company Stock Fund, that investment election was automatically revised, effective June 1, 2008, to provide for an election of 50% to the Company Stock Fund. The percentage elected in excess of 50% will be deemed to be an election of that excess percentage to the particular T. Rowe Price target date retirement fund determined by the participant's age. Effective June 1, 2008, the Plan was further amended to limit a participant's investment in the Company's Stock Fund to 50% of total invested asset value. However, if a participant's investment in the Company Stock Fund was 50% or more of the total invested asset value as of June 1, 2008, the participant may continue to hold that investment interest in the Company Stock Fund. |
|
Supplemental Information
|
Identity of issue or | Description of | Rate of | Fair | ||||
---|---|---|---|---|---|---|---|
party involved | investment | interest | value | ||||
T. Rowe Price: | |||||||
*T. Rowe Price Stable | |||||||
Value Common Trust Fund | Common Trust Fund | 3.45% - 5.85% | $ 51,468,634 | ||||
*Balanced Fund | Mutual Fund | - | 13,282,756 | ||||
*Spectrum Growth Fund | Mutual Fund | - | 16,349,166 | ||||
*Spectrum Income Fund | Mutual Fund | - | 8,089,521 | ||||
*Blue Chip Growth Fund | Mutual Fund | - | 10,292,492 | ||||
*Equity Income Fund | Mutual Fund | - | 5,529,640 | ||||
*Mid-Cap Growth Fund | Mutual Fund | - | 15,347,348 | ||||
*Small-Cap Stock Fund | Mutual Fund | - | 5,948,823 | ||||
*Vanguard Institutional Index | Mutual Fund | - | 4,852,507 | ||||
131,160,887 | |||||||
Employer securities: | |||||||
*ENSCO International Incorporated Stock Fund |
ENSCO International Incorporated Common Stock |
- | 55,752,451 | ||||
*Participant Loans | Participant Loans, maturity dates ranging from January 2008 to September 2017 |
4.89% - 10.50% | 11,352,864 | ||||
$198,266,202 | |||||||
Historical cost information is not presented on this schedule, as all investments are participant directed. |
*Party-in-interest |
See accompanying independent registered public accounting firm's report. |
|
SIGNATURES
|
|
|
ENSCO Savings Plan |
Date: June 30, 2008 | /s/ DAVID A. ARMOUR
By: David A. Armour Controller | |
|
|
EXHIBIT INDEX |
Exhibit No. | Description | |
23.1 | Consent of Independent Registered Public Accounting Firm | |
15 |
|