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The financial statements listed in the accompanying table of contents on the following page are filed as part of this Form 11-K. Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee of the Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. |
ENSCO Savings Plan | ||
Date: June 27, 2002 | /s/ H. E. MALONE, JR.
By: H. E. Malone, Jr. Vice President | |
ENSCO SAVINGS PLAN
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The report that appears above is a copy of the report issued by the Company's previous independent auditor, Arthur Andersen, LLP. Representatives from Arthur Andersen LLP were not available to reissue the report. This disclosure has been requested by the Securities and Exchange Commission. |
ENSCO SAVINGS PLAN
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2001 | 2000 | ||||
---|---|---|---|---|---|
ASSETS: | |||||
Cash and cash equivalents | $ 469,769 | $ 61,864 | |||
Receivables: | |||||
Participant contributions | 199,195 | 369,775 | |||
Participant loan interest payments | 13,762 | 24,055 | |||
Employer contributions | 6,913,122 | 2,396,442 | |||
Investments (see Note 4) | 89,104,189 | 89,206,639 | |||
Total assets | 96,700,037 | 92,058,775 | |||
NET ASSETS AVAILABLE FOR PLAN BENEFITS | $96,700,037 | $92,058,775 | |||
The accompanying notes are an integral part of these financial statements. |
ENSCO SAVINGS PLAN
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ADDITIONS TO NET ASSETS ATTRIBUTED TO: | |||
Interest and dividends | $ 2,665,532 | ||
Participant contributions | 5,848,528 | ||
Employer contributions | 12,197,532 | ||
Net depreciation in the fair value of investments | (9,840,500 | ) | |
Total additions | 10,871,092 | ||
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: | |||
Distributions to participants | 6,219,569 | ||
Loan fees | 10,261 | ||
Total deductions | 6,229,830 | ||
NET ADDITIONS | 4,641,262 | ||
NET ASSETS AVAILABLE FOR PLAN BENEFITS: | |||
Beginning of year | 92,058,775 | ||
End of year | $96,700,037 | ||
The accompanying notes are an integral part of these financial statements. |
Matching Percentage | |||||||
---|---|---|---|---|---|---|---|
Contribution Level | 2001 | 2000 | |||||
Fourth | First-Third | ||||||
Quarter | Quarters | ||||||
First 5% of participation contribution | 100% | 100% | - | ||||
First 3% of participation contribution | - | - | 100% | ||||
Second 3% of participation contribution | - | - | 50% |
Total Matching Contributions for the year ended December 31, 2001 was approximately $12.2 million. At the discretion of its Board of Directors, the Company may also make annual contributions to the Plan for the benefit of all eligible employees (Profit Sharing Contributions). The Company may make Profit Sharing Contributions in either cash or in the Companys common stock. Annual Profit Sharing Contributions are allocated to eligible employees based on their proportionate compensation. The 2001 Profit Sharing Contribution awarded was approximately $7.2 million. At December 31, 2001, the Plan recorded a receivable from the Company in the amount of approximately $6.8 million related to the 2001 Profit Sharing Contribution, which was paid in March 2002. The remaining Profit Sharing Contribution amount of approximately $450,000 was transferred from forfeitures to fund the accounts of the eligible employees at the same time. The Plan limits the sum of a participants annual Savings Contributions, and Matching Contribution and Profit Sharing Contribution (Company Contributions) to the lesser of $30,000 or 25% of the Plan participants compensation as defined by the Plan document. Under certain circumstances, Plan participants may make contributions to the Plan in the form of rollover contributions (Rollover Contributions). A Rollover Contribution is an eligible rollover contribution transferred to the Plan pursuant to an employee's election as described in the Code. Plan Administration T. Rowe Price serves as the investment manager for the Plan's trust fund and executes all investment actions. Recordkeeping responsibilities are maintained by T. Rowe Price. Vesting A Plan participants Matching Contribution account balance and Profit Sharing Contribution account balance shall become vested and nonforfeitable upon the completion of certain years of service with the Company or combined service with Dual and 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 account balance upon certain events, including death or disability, attaining the age of 60, or a full or partial termination of the Plan. A Plan participants Savings Contribution account balance and Rollover Contribution account balance is 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 reduce the amount of Matching Contributions and Profit Sharing Contributions due or administrative expenses to be paid by the Company. At December 31, 2001 and 2000, the Plan had forfeiture balances of $110,173 and $8,150, respectively. Distributions Distributions of a Plan participants Savings Contribution account and Rollover Contribution account and the vested portion of a participants 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 regulations. At December 31, 2001 and 2000, all persons had been paid who elected to withdraw from the Plan. Investments The Plan allows participants to direct their contributions and Matching Contributions among a number of different investment choices. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Method of Accounting The Plans financial statements are prepared on the accrual basis of accounting. The Plans investments are stated at fair value, except for the Stable Value Common Trust Fund which is stated at contract value (Note 3). The Plans investments are principally comprised of the Companys common stock, mutual funds and debt and equity securities. The fair value of the Plans investments is determined by T. Rowe Price and is based on quoted market prices. Purchases and sales of securities and the Companys common stock 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 statement of changes in net assets available for 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. Distributions Distributions are recorded when paid. Loans Generally, approved loans to eligible participants shall be granted from the participants vested accounts on a pro-rata basis. 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 a participant payroll deduction. Pervasiveness of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related revenues and expenses, and disclosure of gain and loss contingencies at the date of the financial statements. Actual results could differ from those estimates. 3. INVESTMENT CONTRACTS The Stable Value Common Trust Fund invests in a common trust fund which invests in investment contracts issued by insurance companies and banks. The Stable Value Fund credited participant accounts at rates of interest ranging from 5.44% to 6.11% on the T. Rowe Price Stable Value Common Trust Fund during 2001. The calculated average yield for 2001 was 5.83%. The Stable Value Common Trust Fund is included in the financial statements at contract value, which approximates fair value. Contract value represents contributions made plus credited interest, less Plan withdrawals. 4. PLAN INVESTMENTS Plan investments that represent 5% or more of the Plans net assets are identified as follows: |
December 31, | |||||
---|---|---|---|---|---|
2001 | 2000 | ||||
Investment at Fair Value as Determined by | |||||
Quoted Market Price | |||||
Mutual Funds: | |||||
Spectrum Growth Fund | $ 7,059,847 | $ 7,831,082 | |||
Other Funds | 15,100,868 | 12,986,991 | |||
Common Stock: | |||||
ENSCO International Incorporated | 36,352,078 | 40,710,572 | |||
58,512,793 | 61,528,645 | ||||
Investments at Contract Value | |||||
Stable Value Common Trust Fund | 25,238,032 | 22,852,531 | |||
Loan Fund | 5,353,364 | 4,825,463 | |||
Total Investments | $89,104,189 | $89,206,639 | |||
During 2001, the Plan's investments, including gains and losses on investments bought and sold, as well as held during the year, depreciated in value by $9,840,500 as follows:
|
Company stock | $7,984,710 | ||
Mutual funds | 1,855,790 | ||
$9,840,500 | |||
At December 31, 2001 and 2000, the Plans investment in the Companys common stock was based on the closing price on such dates of $24.85 per share and $34.06 per share, respectively. Like any investment in publicly traded securities, the Companys common stock is subject to price changes. During 2001, the high and low prices for the Companys common stock were $44.49 and $12.81, respectively. |
5. ADMINISTRATIVE FEES The Plan has no employees and the Company has covered all recurring administrative costs of the Plan. All expenses incurred in the administration of the Plan, except to the extent paid by the Company, shall be paid from the Plan assets, including unallocated forfeitures. The Company paid $161,918 and $125,354 for all of the administrative costs of the Plan during 2001 and 2000, respectively. 6. 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. 7. TAX STATUS Management believes that the Plan is qualified under Section 401(a) of the Code and therefore the trust is exempt from taxation under Section 501(a). A favorable IRS determination letter dated September 21, 1995 was received for the Plan. Generally, contributions to a qualified plan are deductible by the Company when made, earnings of the trust are tax exempt and participants are not taxed on their benefits until withdrawn from the Plan. 8. NONEXEMPT TRANSACTIONS For certain payroll periods during the Plan year, the Company failed to remit Savings Contributions of $49,883, or .85% of the total Savings Contributions of $5,848,528, to T. Rowe Price in a timely manner during 2001. This failure constitutes a prohibited transaction under the Internal Revenue Code as identified in Schedule II. The Company believes the effect to the Savings Participants is minimal. |
Supplemental Information
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Identity of issue or | Description of | Rate of | Current | ||||
---|---|---|---|---|---|---|---|
party involved | Investment | interest | Value | ||||
T. Rowe Price: | |||||||
*T. Rowe Price Stable | |||||||
Value Common Trust Fund | Common Trust Fund | 5.44% - 6.11% | $25,238,032 | ||||
*Balanced Fund | Mutual Fund | - | 3,802,565 | ||||
*Spectrum Income Fund | Mutual Fund | - | 3,106,337 | ||||
*Spectrum Growth Fund | Mutual Fund | - | 7,059,847 | ||||
*Blue Chip Growth Fund | Mutual Fund | - | 2,371,208 | ||||
*Equity Income Fund | Mutual Fund | - | 487,099 | ||||
*Equity Index 500 Fund | Mutual Fund | - | 2,395,001 | ||||
*Mid-Cap Growth Fund | Mutual Fund | - | 2,112,744 | ||||
*Small-Cap Stock Fund | Mutual Fund | - | 825,915 | ||||
47,398,748 | |||||||
Employer securities: | |||||||
*ENSCO International Incorporated | ENSCO International Incorporated Common Stock |
- | 36,352,078 | ||||
*Loan Fund | Participant Loans | 6.00% - 10.50% | 5,353,364 | ||||
$89,104,189 | |||||||
*Party-in-interest. | |||||||
Supplemental Information
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Description of Transactions | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Including | |||||||||||
Relationship | Maturity Date, | Net Gain | |||||||||
to plan, | Rate of Interest, | Current | or (Loss) | ||||||||
Identity of party | employer or | Collateral, Par or | Cost | Value | on Each | ||||||
involved | party-in-interest | Maturity Value | Asset | of Asset | Transaction | ||||||
ENSCO International Incorporated | Plan Sponsor | Plan Sponsor collected Savings Contributions from Savings Participants during 2001 and did not remit the Savings Contributions to the Plan within the required time. | $49,883 | $49,883 | $ - |
We consent to the incorporation by reference in the registration statement No. 33-40282 on Form S-8 of ENSCO International Incorporated of our report dated May 22, 2002 relating to the statement of net assets available for benefits of the ENSCO Savings Plan as of December 31, 2001, and the related statement of changes in net assets available for benefits for the year then ended and the related schedules, which report appears in the December 31, 2001 annual report on Form 11-K of the ENSCO Savings Plan. |
/s/ KPMG LLP Dallas, Texas |