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To Our Customers, Shareholders and Employees:

When we look back over the past fiscal year, we see that ENSCO was not immune to the effects of a weak economy and changing priorities of a new administration. Our FY09 revenues were $100.1 million, a 7.6% decrease over last fiscal year.

Much of this decrease can be attributed to a contraction in our Managed Engineering Services business in New York, which resulted from the slowdown and eventual cancellation of the VH-71 Presidential Helicopter program. The recession also hurt our commercial rail inspection business as the railroads moved to cut costs by delaying capital spending. Finally, we felt the impact of the administration change in many parts of our government services business as significant new business awards were delayed.

The events of the past year also revealed some weaknesses in business models and practices we have relied on for many years, and we are moving to address these in FY10.

We are proud of the longstanding relationships we have with our customers. It has been our privilege to work with some of the most important companies and government agencies in the world to ensure the success of their missions.

Most significantly, we acknowledge that we underestimated the magnitude and speed of the contraction in our Managed Engineering Services business, and we did not react quickly enough to execute a successful stopgap.

Nevertheless, early in FY09, we recognized the challenges that lay ahead and moved to address the changing economic climate. We ensured that the company remained in a strong financial position through judicious use of credit and strong cash flow management. We continued to invest time and resources by restructuring our Corporate Business Development function and refocusing some of our operations to accelerate business capture and enhance execution.

While it is impossible to accurately predict when the global economic downturn will end, we remain confident that the steps we are taking will increase earnings in FY10 and position us well for future growth. We have aligned our products and services with the priorities identified by the new administration.

“We ensured that the company remained in a strong financial position through judicious use of credit and strong cash flow management.”

We are focusing on expanding our new business pipeline to offset existing vulnerabilities; we are dedicating investment, infrastructure and effort on our core capabilities; we are applying a more disciplined and systematic approach to business development; we are leveraging our capabilities into adjacent markets; and we are re-emphasizing the importance of our customer relations.

We are proud of the longstanding relationships we have with our customers. It has been our privilege to work with some of the most important companies and government agencies in the world to ensure the success of their missions. Now, more than ever it is critical to connect with our customers, to engage them in constructive dialogue so that we continue to provide them with the products and services they require.

As we continue to actively reach out to our customers, we are emphasizing the breadth of skills we can offer to them. As an industry leader in the fields of R&D and engineering solutions as well as technical and professional services, we have the capacity to address a wide range of challenges on behalf of our customers. We are underscoring our ability to work with today’s customers to define, develop and deliver the best possible solutions and then support them across the lifespan of the product or service.

During these unprecedented times, ENSCO marked its 40th anniversary. Over four decades, we have been a company driven by innovation; we are the go-to source for custom solutions to many of the world’s most critical challenges. It is our reputation for excellence and the diversity of our portfolio of products and services that have helped us navigate the current economic downturn and that position us well to excel in the recovery.

In many ways, ENSCO is embarking on a new beginning. The world is a very different place than it was 40 years ago, and ENSCO is prepared to, quite literally, put a fresh face forward. As part of an ongoing rebranding initiative, we are launching a new logo that embraces our heritage by utilizing the iconic waveform of the past, but updating it with a contemporary look that underscores our importance in the new century.

We also know ENSCO will continue to thrive for one important reason: the unimpeachable quality of our employees. It is the innovative spirit of our people that fuels the engine of ENSCO, and we remain committed to providing a hospitable work environment that promotes original thinking and supports invention.

The pace of change in the world seems to quicken each day, and yet ENSCO remains relevant. That’s because we make things that make travel safer, save lives and preserve our quality of life. We are reminded of that even as the events of FY09 inspired us to regroup and reflect on where we were as a company and where we want to go. We seized this moment to be personally accountable to our customers and employees, and we are confident that we will emerge as a stronger company that is well positioned for the future.
 

Paul W. Broome CEO and Chairman of the Board

Alan G.R. Bell President and COO

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