##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-31306
 NOBLE CORPORATION
  Cayman Islands
    
    98-0366361(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. employer identification number)13135 South Dairy Ashford, Suite 800
    
    77478Sugar Land, Texas
    
    (Zip code)(Address of principal executive offices)
 Registrants telephone number, including area code: (281) 276-6100
 þ o
  þ o o
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##### 



TABLE OF CONTENTS
 PAGEPART I
    
    ITEM 1. FINANCIAL STATEMENTS
    
    
    3ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    28Forward-Looking Statements
    
    
    28Executive Overview
    
    
    28Results of Operations
    
    
    30Liquidity and Capital Resources
    
    
    42ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    44ITEM 4. CONTROLS AND PROCEDURES
    
    
    45PART II
    
    ITEM 1. LEGAL PROCEEDINGS
    
    
    46ITEM 1A. RISK FACTORS
    
    
    46ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    48ITEM 6. EXHIBITS
    
    
    48SIGNATURES
    
    
    49INDEX TO EXHIBITS
    
    
    50Certification of Mark A. JacksonCertification of Thomas L. MitchellCertification of Mark A. JacksonCertification of Thomas L. Mitchell
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    152,430
    
    
    $
    61,710Accounts receivable
    
    
    496,868
    
    
    
    408,241Insurance receivables
    
    
    32,852
    
    
    
    54,191Inventories
    
    
    4,655
    
    
    
    4,461Prepaid expenses
    
    
    22,553
    
    
    
    20,491Other current assets
    
    
    24,594
    
    
    
    20,886Total current assets
    
    
    733,952
    
    
    
    569,980PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    5,741,765
    
    
    
    5,215,477Other
    
    
    81,947
    
    
    
    71,8705,823,712
    
    
    
    5,287,347Accumulated depreciation
    
    
    (1,526,328
    )
    
    
    (1,428,954
    )4,297,384
    
    
    
    3,858,393OTHER ASSETS
    
    
    161,932
    
    
    
    157,541$
    5,193,268
    
    
    $
    4,585,914LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    9,970
    
    
    $
    9,629Accounts payable
    
    
    180,019
    
    
    
    196,111Accrued payroll and related costs
    
    
    97,953
    
    
    
    93,251Taxes payable
    
    
    70,692
    
    
    
    52,793Interest payable
    
    
    10,421
    
    
    
    9,683Other current liabilities
    
    
    72,835
    
    
    
    64,793Total current liabilities
    
    
    441,890
    
    
    
    426,260LONG-TERM DEBT
    
    
    814,417
    
    
    
    684,469DEFERRED INCOME TAXES
    
    
    223,445
    
    
    
    219,521OTHER LIABILITIES
    
    
    51,329
    
    
    
    34,0191,531,081
    
    
    
    1,364,269COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    (6,703
    )
    
    
    (7,348
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share; 400,000 shares authorized;
134,170 shares issued and outstanding in 2007; 134,592 shares issued
and outstanding in 2006
    
    
    13,417
    
    
    
    13,459Capital in excess of par value
    
    
    720,025
    
    
    
    789,354Retained earnings
    
    
    2,958,619
    
    
    
    2,446,056Accumulated other comprehensive loss
    
    
    (23,171
    )
    
    
    (19,876
    )3,668,890
    
    
    
    3,228,993$
    5,193,268
    
    
    $
    4,585,914
  3




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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended June 30,2007
    
    
    2006OPERATING REVENUESContract drilling services
    
    $
    657,504
    
    
    $
    466,957Reimbursables
    
    
    28,608
    
    
    
    20,640Labor contract drilling services
    
    
    39,165
    
    
    
    27,349Engineering, consulting and other
    
    
    722
    
    
    
    2,568725,999
    
    
    
    517,514OPERATING COSTS AND EXPENSESContract drilling services
    
    
    212,050
    
    
    
    173,228Reimbursables
    
    
    24,608
    
    
    
    17,544Labor contract drilling services
    
    
    32,454
    
    
    
    23,080Engineering, consulting and other
    
    
    7,255
    
    
    
    7,276Depreciation and amortization
    
    
    68,323
    
    
    
    62,545Selling, general and administrative
    
    
    20,302
    
    
    
    10,655364,992
    
    
    
    294,328OPERATING INCOME
    
    
    361,007
    
    
    
    223,186OTHER INCOME (EXPENSE)Interest expense, net of amount capitalized
    
    
    (1,231
    )
    
    
    (1,773
    )Other, net
    
    
    512
    
    
    
    1,893INCOME BEFORE INCOME TAXES
    
    
    360,288
    
    
    
    223,306INCOME TAX PROVISION
    
    
    (70,257
    )
    
    
    (43,545
    )NET INCOME
    
    $
    290,031
    
    
    $
    179,761NET INCOME PER SHARE:Basic
    
    $
    2.18
    
    
    $
    1.31Diluted
    
    $
    2.16
    
    
    $
    1.30
 .
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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Six Months Ended June 30,2007
    
    
    2006OPERATING REVENUESContract drilling services
    
    $
    1,234,419
    
    
    $
    875,304Reimbursables
    
    
    59,751
    
    
    
    43,712Labor contract drilling services
    
    
    75,720
    
    
    
    53,865Engineering, consulting and other
    
    
    2,533
    
    
    
    6,5481,372,423
    
    
    
    979,429OPERATING COSTS AND EXPENSESContract drilling services
    
    
    408,892
    
    
    
    334,091Reimbursables
    
    
    52,154
    
    
    
    37,596Labor contract drilling services
    
    
    60,857
    
    
    
    45,019Engineering, consulting and other
    
    
    10,896
    
    
    
    10,547Depreciation and amortization
    
    
    132,788
    
    
    
    121,906Selling, general and administrative
    
    
    34,528
    
    
    
    20,940Hurricane losses and recoveries, net
    
    
    
    
    
    
    (4,404
    )700,115
    
    
    
    565,695OPERATING INCOME
    
    
    672,308
    
    
    
    413,734OTHER INCOME (EXPENSE)Interest expense, net of amount capitalized
    
    
    (2,735
    )
    
    
    (14,252
    )Other, net
    
    
    1,670
    
    
    
    4,235INCOME BEFORE INCOME TAXES
    
    
    671,243
    
    
    
    403,717INCOME TAX PROVISION
    
    
    (130,892
    )
    
    
    (78,725
    )NET INCOME
    
    $
    540,351
    
    
    $
    324,992NET INCOME PER SHARE:Basic
    
    $
    4.05
    
    
    $
    2.38Diluted
    
    $
    4.01
    
    
    $
    2.35
 .
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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months Ended June 30,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    540,351
    
    
    $
    324,992Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation, amortization and impairment
    
    
    137,788
    
    
    
    126,755Deferred income tax provision
    
    
    6,324
    
    
    
    12,259Share-based compensation expense
    
    
    16,903
    
    
    
    10,106Other
    
    
    (7,279
    )
    
    
    6,668Other changes in current assets and liabilities:Accounts receivable
    
    
    (88,627
    )
    
    
    (106,945
    )Other current assets
    
    
    14,325
    
    
    
    (31,205
    )Accounts payable
    
    
    (20,960
    )
    
    
    6,011Other current liabilities
    
    
    33,243
    
    
    
    21,919Net cash provided by operating activities
    
    
    632,068
    
    
    
    370,560CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    (323,338
    )
    
    
    (281,672
    )Other capital expenditures
    
    
    (216,452
    )
    
    
    (160,431
    )Major maintenance expenditures
    
    
    (39,370
    )
    
    
    (26,782
    )Accrued capital expenditures
    
    
    22,173
    
    
    
    Proceeds from sales of property and equipment
    
    
    3,284
    
    
    
    Proceeds from Smedvig disposition
    
    
    
    
    
    
    691,261Proceeds from sales and maturities of marketable securities
    
    
    
    
    
    
    6,582Net cash provided by (used for) investing activities
    
    
    (553,703
    )
    
    
    228,958CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on bank credit facilities
    
    
    220,000
    
    
    
    Payments on bank credit facilities
    
    
    (85,000
    )
    
    
    (135,000
    )Payments of other long-term debt
    
    
    (4,730
    )
    
    
    (604,404
    )Net proceeds from employee stock transactions
    
    
    13,560
    
    
    
    7,642Proceeds from issuance of senior notes, net of debt issuance costs
    
    
    
    
    
    
    295,953Dividends paid
    
    
    (10,788
    )
    
    
    (10,997
    )Repurchases of ordinary shares
    
    
    (120,687
    )
    
    
    (50,667
    )Net cash provided by (used for) financing activities
    
    
    12,355
    
    
    
    (497,473
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    90,720
    
    
    
    102,045CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    61,710
    
    
    
    121,845CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    152,430
    
    
    $
    223,890
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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 AccumulatedCapital in
    
    
    
    
    
    
    Other
    
    
    TotalOrdinary Shares
    
    
    Excess of
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Par Value
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalance at December 31, 2006
    
    
    134,592
    
    
    $
    13,459
    
    
    $
    789,354
    
    
    $
    2,446,056
    
    
    $
    (19,876
    )
    
    $
    3,228,993Share-based compensation:Share-based compensation
    
    
    617
    
    
    
    62
    
    
    
    17,452
    
    
    
    
    
    
    
    
    
    
    
    17,514Contribution to employee
benefit plans
    
    
    36
    
    
    
    4
    
    
    
    2,933
    
    
    
    
    
    
    
    
    
    
    
    2,937Exercise of stock options
    
    
    530
    
    
    
    53
    
    
    
    19,534
    
    
    
    
    
    
    
    
    
    
    
    19,587Restricted shares surrendered for
withholding taxes or
forfeited
    
    
    (217
    )
    
    
    (22
    )
    
    
    (6,005
    )
    
    
    
    
    
    
    
    
    
    
    (6,027
    )Repurchases of ordinary shares
    
    
    (1,388
    )
    
    
    (139
    )
    
    
    (103,243
    )
    
    
    
    
    
    
    
    
    
    
    (103,382
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    540,351
    
    
    
    
    
    
    
    540,351Dividends paid ($0.08 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,788
    )
    
    
    
    
    
    
    (10,788
    )Adoption of FIN 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,000
    )
    
    
    
    
    
    
    (17,000
    )Other comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,295
    )
    
    
    (3,295
    )Balance at June 30, 2007
    
    
    134,170
    
    
    $
    13,417
    
    
    $
    720,025
    
    
    $
    2,958,619
    
    
    $
    (23,171
    )
    
    $
    3,668,890
  7




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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Three Months Ended June 30,2007
    
    
    2006NET INCOME
    
    $
    290,031
    
    
    $
    179,761OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    1,790
    
    
    
    1,327Unrealized holding gain on securities
    
    
    
    
    
    
    46Forward currency contract activity
    
    
    (222
    )
    
    
    1,998Pension plan actuarial loss
    
    
    (5,580
    )
    
    
    Amortization of deferred pension plan amounts
    
    
    397
    
    
    
    Other comprehensive income (loss)
    
    
    (3,615
    )
    
    
    3,371COMPREHENSIVE INCOME
    
    $
    286,416
    
    
    $
    183,132
 Six Months Ended June 30,2007
    
    
    2006NET INCOME
    
    $
    540,351
    
    
    $
    324,992OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    2,552
    
    
    
    2,756Unrealized holding gain on securities
    
    
    
    
    
    
    19,523Forward currency contract activity
    
    
    (1,051
    )
    
    
    3,194Settlement of interest rate swaps
    
    
    
    
    
    
    2,509Pension plan actuarial loss
    
    
    (5,580
    )
    
    
    Amortization of deferred pension plan amounts
    
    
    784
    
    
    
    Other comprehensive income (loss)
    
    
    (3,295
    )
    
    
    27,982COMPREHENSIVE INCOME
    
    $
    537,056
    
    
    $
    352,974
 .
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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 1  BASIS OF PRESENTATION
   NOTE 2  NET INCOME PER SHARE
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Weighted-average shares outstanding  basic
    
    
    132,964
    
    
    
    136,800
    
    
    
    133,260
    
    
    
    136,759Effect of potentially dilutive shares:Stock options
    
    
    1,254
    
    
    
    1,397
    
    
    
    1,215
    
    
    
    1,441Time-vested restricted stock
    
    
    77
    
    
    
    29
    
    
    
    47
    
    
    
    116Performance-vested restricted stock
    
    
    75
    
    
    
    71
    
    
    
    61
    
    
    
    59Weighted-average shares outstanding  diluted
    
    
    134,370
    
    
    
    138,297
    
    
    
    134,583
    
    
    
    138,375Net income  basic and diluted
    
    $
    290,031
    
    
    $
    179,761
    
    
    $
    540,351
    
    
    $
    324,992Net income per share:Basic
    
    $
    2.18
    
    
    $
    1.31
    
    
    $
    4.05
    
    
    $
    2.38Diluted
    
    $
    2.16
    
    
    $
    1.30
    
    
    $
    4.01
    
    
    $
    2.35
  9




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 3  PROPERTY AND EQUIPMENT
   NOTE 4  DEBT
  NOTE 5  INCOME TAXES
 Accounting for Uncertainty in Income Taxes
   10




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
  NOTE 6  EMPLOYEE BENEFIT PLANS
  Three Months Ended June 30,2007
    
    
    2006International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    1,665
    
    
    $
    1,665
    
    
    $
    776
    
    
    $
    1,357Interest cost
    
    
    1,152
    
    
    
    1,495
    
    
    
    792
    
    
    
    1,236Return on plan assets
    
    
    (1,131
    )
    
    
    (1,650
    )
    
    
    (899
    )
    
    
    (1,449
    )Amortization of prior service cost
    
    
    
    
    
    
    99
    
    
    
    
    
    
    
    84Amortization of transition obligation
    
    
    67
    
    
    
    
    
    
    
    39
    
    
    
    Recognized net actuarial loss
    
    
    54
    
    
    
    380
    
    
    
    88
    
    
    
    344Net pension expense
    
    $
    1,807
    
    
    $
    1,989
    
    
    $
    796
    
    
    $
    1,572
 Six Months Ended June 30,2007
    
    
    2006International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    2,935
    
    
    $
    3,330
    
    
    $
    1,552
    
    
    $
    2,714Interest cost
    
    
    2,172
    
    
    
    2,990
    
    
    
    1,584
    
    
    
    2,472Return on plan assets
    
    
    (2,262
    )
    
    
    (3,300
    )
    
    
    (1,798
    )
    
    
    (2,898
    )Amortization of prior service cost
    
    
    
    
    
    
    198
    
    
    
    
    
    
    
    168Amortization of transition obligation
    
    
    121
    
    
    
    
    
    
    
    78
    
    
    
    Recognized net actuarial loss
    
    
    108
    
    
    
    760
    
    
    
    176
    
    
    
    688Net pension expense
    
    $
    3,074
    
    
    $
    3,978
    
    
    $
    1,592
    
    
    $
    3,144
    11




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
  NOTE 7  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   Accounting for Derivative Instruments and Hedging Activities
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net unrealized gain (loss) at beginning of period
    
    $
    2,388
    
    
    $
    (201
    )
    
    $
    3,217
    
    
    $
    (3,906
    )Activity during period:Settlement of forward contracts outstanding at
beginning of period
    
    
    (903
    )
    
    
    242
    
    
    
    (1,935
    )
    
    
    1,400Net unrealized gain on outstanding
forward currency contracts
    
    
    681
    
    
    
    1,756
    
    
    
    884
    
    
    
    1,794Settlement of interest rate swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,509Net unrealized gain at June 30
    
    $
    2,166
    
    
    $
    1,797
    
    
    $
    2,166
    
    
    $
    1,797
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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 8  COMMITMENTS AND CONTINGENCIES
     13




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 Noble Clyde Boudreaux Noble
Clyde Boudreaux
   Internal Investigation
      14




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
   NOTE 9  SEGMENT AND RELATED INFORMATION
 Disclosure about Segments of an Enterprise and Related
Information
  Noble Kolskaya
 15




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 Contract Drilling ServicesInternational
    
    Domestic
    
    Other
    
    TotalThree Months Ended June 30, 2007Revenues from external customers
    
    $
    507,996
    
    
    $
    169,740
    
    
    $
    48,263
    
    
    $
    725,999Depreciation and amortization
    
    
    49,824
    
    
    
    16,284
    
    
    
    2,215
    
    
    
    68,323Segment operating income (loss)
    
    
    257,932
    
    
    
    105,182
    
    
    
    (2,107
    )
    
    
    361,007Interest expense, net of amount
capitalized
    
    
    148
    
    
    
    828
    
    
    
    255
    
    
    
    1,231Income tax provision (benefit)
    
    
    37,733
    
    
    
    36,310
    
    
    
    (3,786
    )
    
    
    70,257Segment profit
    
    
    219,764
    
    
    
    68,065
    
    
    
    2,202
    
    
    
    290,031Total assets (at end of period)
    
    
    3,001,751
    
    
    
    1,773,792
    
    
    
    417,725
    
    
    
    5,193,268Capital expenditures
    
    
    147,969
    
    
    
    157,927
    
    
    
    36,586
    
    
    
    342,482Three Months Ended June 30, 2006Revenues from external customers
    
    $
    342,149
    
    
    $
    140,398
    
    
    $
    34,967
    
    
    $
    517,514Depreciation and amortization
    
    
    48,985
    
    
    
    12,369
    
    
    
    1,191
    
    
    
    62,545Segment operating income (loss)
    
    
    143,116
    
    
    
    82,232
    
    
    
    (2,162
    )
    
    
    223,186Interest expense, net of amount
capitalized
    
    
    163
    
    
    
    702
    
    
    
    908
    
    
    
    1,773Income tax provision
    
    
    16,204
    
    
    
    25,647
    
    
    
    1,694
    
    
    
    43,545Segment profit (loss)
    
    
    126,473
    
    
    
    55,887
    
    
    
    (2,599
    )
    
    
    179,761Total assets (at end of period)
    
    
    2,528,170
    
    
    
    1,315,055
    
    
    
    415,958
    
    
    
    4,259,183Capital expenditures
    
    
    117,753
    
    
    
    108,339
    
    
    
    27,571
    
    
    
    253,663
 16




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 Contract Drilling ServicesInternational
    
    Domestic
    
    Other
    
    TotalSix Months Ended June 30, 2007Revenues from external customers
    
    $
    953,555
    
    
    $
    321,095
    
    
    $
    97,773
    
    
    $
    1,372,423Depreciation and amortization
    
    
    97,895
    
    
    
    30,022
    
    
    
    4,871
    
    
    
    132,788Segment operating income
    
    
    471,461
    
    
    
    199,176
    
    
    
    1,671
    
    
    
    672,308Interest expense, net of amount
capitalized
    
    
    647
    
    
    
    1,695
    
    
    
    393
    
    
    
    2,735Income tax provision (benefit)
    
    
    68,345
    
    
    
    69,085
    
    
    
    (6,538
    )
    
    
    130,892Segment profit
    
    
    402,872
    
    
    
    128,420
    
    
    
    9,059
    
    
    
    540,351Total assets (at end of period)
    
    
    3,001,751
    
    
    
    1,773,792
    
    
    
    417,725
    
    
    
    5,193,268Capital expenditures
    
    
    227,725
    
    
    
    273,941
    
    
    
    77,494
    
    
    
    579,160Six Months Ended June 30, 2006Revenues from external customers
    
    $
    626,959
    
    
    $
    282,266
    
    
    $
    70,204
    
    
    $
    979,429Depreciation and amortization
    
    
    94,753
    
    
    
    24,909
    
    
    
    2,244
    
    
    
    121,906Segment operating income (loss)
    
    
    245,051
    
    
    
    168,718
    
    
    
    (35
    )
    
    
    413,734Interest expense, net of amount
capitalized
    
    
    135
    
    
    
    1,644
    
    
    
    12,473
    
    
    
    14,252Income tax provision (benefit)
    
    
    25,963
    
    
    
    53,013
    
    
    
    (251
    )
    
    
    78,725Segment profit (loss)
    
    
    218,384
    
    
    
    118,423
    
    
    
    (11,815
    )
    
    
    324,992Total assets (at end of period)
    
    
    2,528,170
    
    
    
    1,315,055
    
    
    
    415,958
    
    
    
    4,259,183Capital expenditures
    
    
    235,288
    
    
    
    189,896
    
    
    
    43,701
    
    
    
    468,885
 NOTE 10  OPERATING COSTS AND EXPENSES
 Engineering and Consulting Services
    Selling, General and Administrative
  17




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
   NOTE 11  ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 NOTE 12  SUBSEQUENT EVENTS
    18




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 13  GUARANTEES OF REGISTERED SECURITIES
    19




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
June 30, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    46,368
    
    
    $
    104
    
    
    $
    29
    
    
    $
    105,929
    
    
    $
    
    
    
    $
    152,430Accounts receivable
    
    
    
    
    
    
    12,165
    
    
    
    10,176
    
    
    
    474,527
    
    
    
    
    
    
    
    496,868Insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,852
    
    
    
    
    
    
    
    32,852Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,655
    
    
    
    
    
    
    
    4,655Prepaid expenses
    
    
    
    
    
    
    1,178
    
    
    
    522
    
    
    
    20,853
    
    
    
    
    
    
    
    22,553Accounts receivable from affiliates
    
    
    572,103
    
    
    
    
    
    
    
    507,648
    
    
    
    
    
    
    
    (1,079,751
    )
    
    
    Other current assets
    
    
    3
    
    
    
    5
    
    
    
    11
    
    
    
    288,439
    
    
    
    (263,864
    )
    
    
    24,594Total current assets
    
    
    618,474
    
    
    
    13,452
    
    
    
    518,386
    
    
    
    927,255
    
    
    
    (1,343,615
    )
    
    
    733,952PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    
    
    1,260,505
    
    
    
    109,709
    
    
    
    4,371,551
    
    
    
    
    
    
    
    5,741,765Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,947
    
    
    
    
    
    
    
    81,947
    
    
    
    1,260,505
    
    
    
    109,709
    
    
    
    4,453,498
    
    
    
    
    
    
    
    5,823,712Accumulated depreciation
    
    
    
    
    
    
    (71,417
    )
    
    
    (62,458
    )
    
    
    (1,392,453
    )
    
    
    
    
    
    
    (1,526,328
    )
    
    
    
    1,189,088
    
    
    
    47,251
    
    
    
    3,061,045
    
    
    
    
    
    
    
    4,297,384NOTES RECEIVABLE FROM AFFILIATES
    
    
    546,835
    
    
    
    20,963
    
    
    
    44,159
    
    
    
    526,717
    
    
    
    (1,138,674
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    3,009,696
    
    
    
    3,509,775
    
    
    
    2,646,380
    
    
    
    
    
    
    
    (9,165,851
    )
    
    
    OTHER ASSETS
    
    
    3,983
    
    
    
    4,783
    
    
    
    3,525
    
    
    
    149,641
    
    
    
    
    
    
    
    161,932$
    4,178,988
    
    
    $
    4,738,061
    
    
    $
    3,259,701
    
    
    $
    4,664,658
    
    
    $
    (11,648,140
    )
    
    $
    5,193,268LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    70,700
    
    
    $
    174,716
    
    
    $
    
    
    
    $
    9,970
    
    
    $
    (245,416
    )
    
    $
    9,970Accounts payable
    
    
    
    
    
    
    23,259
    
    
    
    2,540
    
    
    
    154,220
    
    
    
    
    
    
    
    180,019Accrued payroll and related costs
    
    
    
    
    
    
    (62
    )
    
    
    13,857
    
    
    
    84,158
    
    
    
    
    
    
    
    97,953Taxes payable
    
    
    
    
    
    
    (237
    )
    
    
    
    
    
    
    70,929
    
    
    
    
    
    
    
    70,692Interest payable
    
    
    4,616
    
    
    
    15,066
    
    
    
    8,511
    
    
    
    676
    
    
    
    (18,448
    )
    
    
    10,421Accounts payable to affiliates
    
    
    
    
    
    
    808,620
    
    
    
    
    
    
    
    271,131
    
    
    
    (1,079,751
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    3
    
    
    
    493
    
    
    
    72,339
    
    
    
    
    
    
    
    72,835Total current liabilities
    
    
    75,316
    
    
    
    1,021,365
    
    
    
    25,401
    
    
    
    663,423
    
    
    
    (1,343,615
    )
    
    
    441,890LONG-TERM DEBT
    
    
    434,782
    
    
    
    
    
    
    
    351,677
    
    
    
    27,958
    
    
    
    
    
    
    
    814,417NOTES PAYABLE TO AFFILIATES
    
    
    
    
    
    
    491,717
    
    
    
    35,000
    
    
    
    611,957
    
    
    
    (1,138,674
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    3,157
    
    
    
    12,758
    
    
    
    207,530
    
    
    
    
    
    
    
    223,445OTHER LIABILITIES
    
    
    
    
    
    
    1,043
    
    
    
    3,669
    
    
    
    46,617
    
    
    
    
    
    
    
    51,329510,098
    
    
    
    1,517,282
    
    
    
    428,505
    
    
    
    1,557,485
    
    
    
    (2,482,289
    )
    
    
    1,531,081COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,703
    )
    
    
    
    
    
    
    (6,703
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    13,417
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,417Capital in excess of par value
    
    
    720,025
    
    
    
    1,149,965
    
    
    
    870,744
    
    
    
    94,952
    
    
    
    (2,115,661
    )
    
    
    720,025Retained earnings
    
    
    2,958,619
    
    
    
    2,070,814
    
    
    
    1,960,694
    
    
    
    3,042,095
    
    
    
    (7,073,603
    )
    
    
    2,958,619Accumulated other comprehensive
income (loss)
    
    
    (23,171
    )
    
    
    
    
    
    
    (242
    )
    
    
    (23,171
    )
    
    
    23,413
    
    
    
    (23,171
    )3,668,890
    
    
    
    3,220,779
    
    
    
    2,831,196
    
    
    
    3,113,876
    
    
    
    (9,165,851
    )
    
    
    3,668,890$
    4,178,988
    
    
    $
    4,738,061
    
    
    $
    3,259,701
    
    
    $
    4,664,658
    
    
    $
    (11,648,140
    )
    
    $
    5,193,268
 20




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
December 31, 2006
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    2,458
    
    
    $
    36
    
    
    $
    
    
    
    $
    59,216
    
    
    $
    
    
    
    $
    61,710Accounts receivable
    
    
    
    
    
    
    4,032
    
    
    
    6,613
    
    
    
    397,596
    
    
    
    
    
    
    
    408,241Insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,191
    
    
    
    
    
    
    
    54,191Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,461
    
    
    
    
    
    
    
    4,461Prepaid expenses
    
    
    
    
    
    
    827
    
    
    
    709
    
    
    
    18,955
    
    
    
    
    
    
    
    20,491Accounts receivable from affiliates
    
    
    582,991
    
    
    
    
    
    
    
    514,851
    
    
    
    
    
    
    
    (1,097,842
    )
    
    
    Other current assets
    
    
    1
    
    
    
    
    
    
    
    311
    
    
    
    44,200
    
    
    
    (23,626
    )
    
    
    20,886Total current assets
    
    
    585,450
    
    
    
    4,895
    
    
    
    522,484
    
    
    
    578,619
    
    
    
    (1,121,468
    )
    
    
    569,980PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    
    
    1,045,324
    
    
    
    103,625
    
    
    
    4,066,528
    
    
    
    
    
    
    
    5,215,477Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,870
    
    
    
    
    
    
    
    71,870
    
    
    
    1,045,324
    
    
    
    103,625
    
    
    
    4,138,398
    
    
    
    
    
    
    
    5,287,347Accumulated depreciation
    
    
    
    
    
    
    (60,265
    )
    
    
    (60,307
    )
    
    
    (1,308,382
    )
    
    
    
    
    
    
    (1,428,954
    )
    
    
    
    985,059
    
    
    
    43,318
    
    
    
    2,830,016
    
    
    
    
    
    
    
    3,858,393NOTES RECEIVABLE FROM AFFILIATES
    
    
    501,835
    
    
    
    
    
    
    
    9,159
    
    
    
    657,035
    
    
    
    (1,168,029
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    2,456,632
    
    
    
    2,991,648
    
    
    
    2,420,467
    
    
    
    
    
    
    
    (7,868,747
    )
    
    
    OTHER ASSETS
    
    
    3,613
    
    
    
    4,963
    
    
    
    3,507
    
    
    
    145,458
    
    
    
    
    
    
    
    157,541$
    3,547,530
    
    
    $
    3,986,565
    
    
    $
    2,998,935
    
    
    $
    4,211,128
    
    
    $
    (10,158,244
    )
    
    $
    4,585,914LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    33,255
    
    
    $
    (23,626
    )
    
    $
    9,629Accounts payable
    
    
    17,305
    
    
    
    11,513
    
    
    
    1,628
    
    
    
    165,665
    
    
    
    
    
    
    
    196,111Accrued payroll and related costs
    
    
    
    
    
    
    45
    
    
    
    16,909
    
    
    
    76,297
    
    
    
    
    
    
    
    93,251Taxes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,793
    
    
    
    
    
    
    
    52,793Interest payable
    
    
    1,469
    
    
    
    
    
    
    
    7,453
    
    
    
    761
    
    
    
    
    
    
    
    9,683Accounts payable to affiliates
    
    
    
    
    
    
    638,638
    
    
    
    
    
    
    
    459,204
    
    
    
    (1,097,842
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    3
    
    
    
    1,140
    
    
    
    63,650
    
    
    
    
    
    
    
    64,793Total current liabilities
    
    
    18,774
    
    
    
    650,199
    
    
    
    27,130
    
    
    
    851,625
    
    
    
    (1,121,468
    )
    
    
    426,260LONG-TERM DEBT
    
    
    299,763
    
    
    
    
    
    
    
    351,672
    
    
    
    33,034
    
    
    
    
    
    
    
    684,469NOTES PAYABLE TO AFFILIATES
    
    
    
    
    
    
    657,035
    
    
    
    
    
    
    
    510,994
    
    
    
    (1,168,029
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    
    
    
    
    12,140
    
    
    
    207,381
    
    
    
    
    
    
    
    219,521OTHER LIABILITIES
    
    
    
    
    
    
    1,043
    
    
    
    2,099
    
    
    
    30,877
    
    
    
    
    
    
    
    34,019318,537
    
    
    
    1,308,277
    
    
    
    393,041
    
    
    
    1,633,911
    
    
    
    (2,289,497
    )
    
    
    1,364,269COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,348
    )
    
    
    
    
    
    
    (7,348
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    13,459
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,459Capital in excess of par value
    
    
    789,354
    
    
    
    1,149,965
    
    
    
    870,744
    
    
    
    98,562
    
    
    
    (2,119,271
    )
    
    
    789,354Retained earnings
    
    
    2,446,056
    
    
    
    1,528,323
    
    
    
    1,735,314
    
    
    
    2,505,879
    
    
    
    (5,769,516
    )
    
    
    2,446,056Accumulated other comprehensive income (loss)
    
    
    (19,876
    )
    
    
    
    
    
    
    (164
    )
    
    
    (19,876
    )
    
    
    20,040
    
    
    
    (19,876
    )3,228,993
    
    
    
    2,678,288
    
    
    
    2,605,894
    
    
    
    2,584,565
    
    
    
    (7,868,747
    )
    
    
    3,228,993$
    3,547,530
    
    
    $
    3,986,565
    
    
    $
    2,998,935
    
    
    $
    4,211,128
    
    
    $
    (10,158,244
    )
    
    $
    4,585,914
 21




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    20,447
    
    
    $
    15,393
    
    
    $
    621,664
    
    
    $
    
    
    
    $
    657,504Reimbursables
    
    
    
    
    
    
    216
    
    
    
    229
    
    
    
    28,163
    
    
    
    
    
    
    
    28,608Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,165
    
    
    
    
    
    
    
    39,165Engineering, consulting and other
    
    
    
    
    
    
    20,618
    
    
    
    
    
    
    
    722
    
    
    
    (20,618
    )
    
    
    722
    
    
    
    41,281
    
    
    
    15,622
    
    
    
    689,714
    
    
    
    (20,618
    )
    
    
    725,999OPERATING COSTS AND EXPENSESContract drilling services
    
    
    5,407
    
    
    
    6,504
    
    
    
    7,418
    
    
    
    213,339
    
    
    
    (20,618
    )
    
    
    212,050Reimbursables
    
    
    
    
    
    
    192
    
    
    
    226
    
    
    
    24,190
    
    
    
    
    
    
    
    24,608Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,454
    
    
    
    
    
    
    
    32,454Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,255
    
    
    
    
    
    
    
    7,255Depreciation and amortization
    
    
    
    
    
    
    6,494
    
    
    
    1,349
    
    
    
    60,480
    
    
    
    
    
    
    
    68,323Selling, general and administrative
    
    
    4,252
    
    
    
    991
    
    
    
    316
    
    
    
    14,743
    
    
    
    
    
    
    
    20,3029,659
    
    
    
    14,181
    
    
    
    9,309
    
    
    
    352,461
    
    
    
    (20,618
    )
    
    
    364,992OPERATING INCOME (LOSS)
    
    
    (9,659
    )
    
    
    27,100
    
    
    
    6,313
    
    
    
    337,253
    
    
    
    
    
    
    
    361,007OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    306,848
    
    
    
    280,447
    
    
    
    130,767
    
    
    
    
    
    
    
    (718,062
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (7,527
    )
    
    
    (11,829
    )
    
    
    (6,631
    )
    
    
    11,853
    
    
    
    12,903
    
    
    
    (1,231
    )Other, net
    
    
    77
    
    
    
    2
    
    
    
    
    
    
    
    13,336
    
    
    
    (12,903
    )
    
    
    512INCOME BEFORE INCOME TAXES
    
    
    289,739
    
    
    
    295,720
    
    
    
    130,449
    
    
    
    362,442
    
    
    
    (718,062
    )
    
    
    360,288INCOME TAX (PROVISION) BENEFIT
    
    
    292
    
    
    
    4,068
    
    
    
    (2,053
    )
    
    
    (72,564
    )
    
    
    
    
    
    
    (70,257
    )NET INCOME
    
    $
    290,031
    
    
    $
    299,788
    
    
    $
    128,396
    
    
    $
    289,878
    
    
    $
    (718,062
    )
    
    $
    290,031
 22




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2006
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    9,564
    
    
    $
    12,595
    
    
    $
    444,798
    
    
    $
    
    
    
    $
    466,957Reimbursables
    
    
    
    
    
    
    60
    
    
    
    41
    
    
    
    20,539
    
    
    
    
    
    
    
    20,640Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,349
    
    
    
    
    
    
    
    27,349Engineering, consulting and other
    
    
    
    
    
    
    12,740
    
    
    
    
    
    
    
    2,568
    
    
    
    (12,740
    )
    
    
    2,568
    
    
    
    22,364
    
    
    
    12,636
    
    
    
    495,254
    
    
    
    (12,740
    )
    
    
    517,514OPERATING COSTS AND EXPENSESContract drilling services
    
    
    3,470
    
    
    
    5,257
    
    
    
    1,436
    
    
    
    175,805
    
    
    
    (12,740
    )
    
    
    173,228Reimbursables
    
    
    
    
    
    
    45
    
    
    
    41
    
    
    
    17,458
    
    
    
    
    
    
    
    17,544Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,080
    
    
    
    
    
    
    
    23,080Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,276
    
    
    
    
    
    
    
    7,276Depreciation and amortization
    
    
    
    
    
    
    6,215
    
    
    
    1,204
    
    
    
    55,126
    
    
    
    
    
    
    
    62,545Selling, general and administrative
    
    
    1,107
    
    
    
    558
    
    
    
    169
    
    
    
    8,821
    
    
    
    
    
    
    
    10,6554,577
    
    
    
    12,075
    
    
    
    2,850
    
    
    
    287,566
    
    
    
    (12,740
    )
    
    
    294,328OPERATING INCOME (LOSS)
    
    
    (4,577
    )
    
    
    10,289
    
    
    
    9,786
    
    
    
    207,688
    
    
    
    
    
    
    
    223,186OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    185,306
    
    
    
    166,670
    
    
    
    79,037
    
    
    
    
    
    
    
    (431,013
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (1,886
    )
    
    
    (13,464
    )
    
    
    (7,567
    )
    
    
    10,184
    
    
    
    10,960
    
    
    
    (1,773
    )Other, net
    
    
    918
    
    
    
    111
    
    
    
    (4,576
    )
    
    
    16,400
    
    
    
    (10,960
    )
    
    
    1,893INCOME BEFORE INCOME TAXES
    
    
    179,761
    
    
    
    163,606
    
    
    
    76,680
    
    
    
    234,272
    
    
    
    (431,013
    )
    
    
    223,306INCOME TAX (PROVISION) BENEFIT
    
    
    
    
    
    
    3,836
    
    
    
    825
    
    
    
    (48,206
    )
    
    
    
    
    
    
    (43,545
    )NET INCOME
    
    $
    179,761
    
    
    $
    167,442
    
    
    $
    77,505
    
    
    $
    186,066
    
    
    $
    (431,013
    )
    
    $
    179,761
 23




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    37,037
    
    
    $
    28,474
    
    
    $
    1,168,908
    
    
    $
    
    
    
    $
    1,234,419Reimbursables
    
    
    
    
    
    
    356
    
    
    
    455
    
    
    
    58,940
    
    
    
    
    
    
    
    59,751Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,720
    
    
    
    
    
    
    
    75,720Engineering, consulting and other
    
    
    
    
    
    
    30,595
    
    
    
    
    
    
    
    2,527
    
    
    
    (30,589
    )
    
    
    2,533
    
    
    
    67,988
    
    
    
    28,929
    
    
    
    1,306,095
    
    
    
    (30,589
    )
    
    
    1,372,423OPERATING COSTS AND EXPENSESContract drilling services
    
    
    10,710
    
    
    
    13,007
    
    
    
    14,654
    
    
    
    401,110
    
    
    
    (30,589
    )
    
    
    408,892Reimbursables
    
    
    
    
    
    
    307
    
    
    
    451
    
    
    
    51,396
    
    
    
    
    
    
    
    52,154Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,857
    
    
    
    
    
    
    
    60,857Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,896
    
    
    
    
    
    
    
    10,896Depreciation and amortization
    
    
    
    
    
    
    12,772
    
    
    
    2,933
    
    
    
    117,083
    
    
    
    
    
    
    
    132,788Selling, general and administrative
    
    
    6,236
    
    
    
    1,958
    
    
    
    646
    
    
    
    25,688
    
    
    
    
    
    
    
    34,52816,946
    
    
    
    28,044
    
    
    
    18,684
    
    
    
    667,030
    
    
    
    (30,589
    )
    
    
    700,115OPERATING INCOME (LOSS)
    
    
    (16,946
    )
    
    
    39,944
    
    
    
    10,245
    
    
    
    639,065
    
    
    
    
    
    
    
    672,308OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    569,765
    
    
    
    526,533
    
    
    
    245,526
    
    
    
    
    
    
    
    (1,341,824
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (13,134
    )
    
    
    (23,672
    )
    
    
    (13,959
    )
    
    
    22,489
    
    
    
    25,541
    
    
    
    (2,735
    )Other, net
    
    
    86
    
    
    
    2
    
    
    
    
    
    
    
    27,123
    
    
    
    (25,541
    )
    
    
    1,670INCOME BEFORE INCOME TAXES
    
    
    539,771
    
    
    
    542,807
    
    
    
    241,812
    
    
    
    688,677
    
    
    
    (1,341,824
    )
    
    
    671,243INCOME TAX (PROVISION) BENEFIT
    
    
    580
    
    
    
    8,091
    
    
    
    (2,327
    )
    
    
    (137,236
    )
    
    
    
    
    
    
    (130,892
    )NET INCOME
    
    $
    540,351
    
    
    $
    550,898
    
    
    $
    239,485
    
    
    $
    551,441
    
    
    $
    (1,341,824
    )
    
    $
    540,351
 24




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2006
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    18,984
    
    
    $
    21,434
    
    
    $
    834,886
    
    
    $
    
    
    
    $
    875,304Reimbursables
    
    
    
    
    
    
    205
    
    
    
    67
    
    
    
    43,440
    
    
    
    
    
    
    
    43,712Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,865
    
    
    
    
    
    
    
    53,865Engineering, consulting and other
    
    
    
    
    
    
    25,340
    
    
    
    
    
    
    
    6,548
    
    
    
    (25,340
    )
    
    
    6,548
    
    
    
    44,529
    
    
    
    21,501
    
    
    
    938,739
    
    
    
    (25,340
    )
    
    
    979,429OPERATING COSTS AND EXPENSESContract drilling services
    
    
    7,043
    
    
    
    9,906
    
    
    
    3,030
    
    
    
    339,452
    
    
    
    (25,340
    )
    
    
    334,091Reimbursables
    
    
    
    
    
    
    143
    
    
    
    67
    
    
    
    37,386
    
    
    
    
    
    
    
    37,596Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,019
    
    
    
    
    
    
    
    45,019Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,547
    
    
    
    
    
    
    
    10,547Depreciation and amortization
    
    
    
    
    
    
    12,428
    
    
    
    2,547
    
    
    
    106,931
    
    
    
    
    
    
    
    121,906Selling, general and administrative
    
    
    2,870
    
    
    
    1,067
    
    
    
    338
    
    
    
    16,665
    
    
    
    
    
    
    
    20,940Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,404
    )
    
    
    
    
    
    
    (4,404
    )9,913
    
    
    
    23,544
    
    
    
    5,982
    
    
    
    551,596
    
    
    
    (25,340
    )
    
    
    565,695OPERATING INCOME (LOSS)
    
    
    (9,913
    )
    
    
    20,985
    
    
    
    15,519
    
    
    
    387,143
    
    
    
    
    
    
    
    413,734OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    335,736
    
    
    
    300,025
    
    
    
    161,651
    
    
    
    
    
    
    
    (797,412
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (1,889
    )
    
    
    (26,926
    )
    
    
    (25,895
    )
    
    
    18,536
    
    
    
    21,922
    
    
    
    (14,252
    )Other, net
    
    
    1,058
    
    
    
    262
    
    
    
    (16,778
    )
    
    
    41,615
    
    
    
    (21,922
    )
    
    
    4,235INCOME BEFORE INCOME TAXES
    
    
    324,992
    
    
    
    294,346
    
    
    
    134,497
    
    
    
    447,294
    
    
    
    (797,412
    )
    
    
    403,717INCOME TAX (PROVISION) BENEFIT
    
    
    
    
    
    
    7,673
    
    
    
    9,504
    
    
    
    (95,902
    )
    
    
    
    
    
    
    (78,725
    )NET INCOME
    
    $
    324,992
    
    
    $
    302,019
    
    
    $
    144,001
    
    
    $
    351,392
    
    
    $
    (797,412
    )
    
    $
    324,992
 25




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    540,351
    
    
    $
    550,898
    
    
    $
    239,485
    
    
    $
    551,441
    
    
    $
    (1,341,824
    )
    
    $
    540,351Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, amortization and impairment
    
    
    
    
    
    
    12,772
    
    
    
    2,933
    
    
    
    122,083
    
    
    
    
    
    
    
    137,788Deferred income tax provision
    
    
    
    
    
    
    3,157
    
    
    
    618
    
    
    
    2,549
    
    
    
    
    
    
    
    6,324Share-based compensation expense
    
    
    16,903
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,903Equity earnings in affiliates
    
    
    (569,765
    )
    
    
    (526,533
    )
    
    
    (245,526
    )
    
    
    
    
    
    
    1,341,824
    
    
    
    Other
    
    
    (370
    )
    
    
    (180
    )
    
    
    3,249
    
    
    
    (9,978
    )
    
    
    
    
    
    
    (7,279
    )Other changes in current assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (8,133
    )
    
    
    (3,563
    )
    
    
    (76,931
    )
    
    
    
    
    
    
    (88,627
    )Other current assets
    
    
    (2
    )
    
    
    (356
    )
    
    
    (487
    )
    
    
    15,170
    
    
    
    
    
    
    
    14,325Accounts payable
    
    
    (14,158
    )
    
    
    (1,367
    )
    
    
    912
    
    
    
    (6,347
    )
    
    
    
    
    
    
    (20,960
    )Other current liabilities
    
    
    
    
    
    
    (344
    )
    
    
    (3,699
    )
    
    
    37,286
    
    
    
    
    
    
    
    33,243Net cash provided by (used for) operating
activities
    
    
    (27,041
    )
    
    
    29,914
    
    
    
    (6,078
    )
    
    
    635,273
    
    
    
    
    
    
    
    632,068CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    (215,181
    )
    
    
    
    
    
    
    (108,157
    )
    
    
    
    
    
    
    (323,338
    )Other capital expenditures
    
    
    
    
    
    
    
    
    
    
    (6,084
    )
    
    
    (210,368
    )
    
    
    
    
    
    
    (216,452
    )Major maintenance expenditures
    
    
    
    
    
    
    (1,439
    )
    
    
    
    
    
    
    (37,931
    )
    
    
    
    
    
    
    (39,370
    )Accrued capital expenditures
    
    
    
    
    
    
    13,113
    
    
    
    
    
    
    
    9,060
    
    
    
    
    
    
    
    22,173Proceeds from sales of property and equipment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,284
    
    
    
    
    
    
    
    3,284Repayments of notes from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,565
    
    
    
    (11,565
    )
    
    
    Notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,700
    )
    
    
    25,700
    
    
    
    Net cash provided by (used for) investing
activities
    
    
    
    
    
    
    (203,507
    )
    
    
    (6,084
    )
    
    
    (358,247
    )
    
    
    14,135
    
    
    
    (553,703
    )CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on bank credit facilities
    
    
    135,000
    
    
    
    
    
    
    
    85,000
    
    
    
    
    
    
    
    
    
    
    
    220,000Payments on bank credit facilities
    
    
    
    
    
    
    
    
    
    
    (85,000
    )
    
    
    
    
    
    
    
    
    
    
    (85,000
    )Payments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,730
    )
    
    
    
    
    
    
    (4,730
    )Advances (to)/from affiliates
    
    
    28,166
    
    
    
    185,226
    
    
    
    12,191
    
    
    
    (225,583
    )
    
    
    
    
    
    
    Repayments of notes to affiliates
    
    
    
    
    
    
    (11,565
    )
    
    
    
    
    
    
    
    
    
    
    11,565
    
    
    
    Notes payable to affiliates
    
    
    25,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,700
    )
    
    
    Net proceeds from employee stock transactions
    
    
    13,560
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,560Dividends paid
    
    
    (10,788
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,788
    )Repurchases of ordinary shares
    
    
    (120,687
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (120,687
    )Net cash provided by (used for) financing
activities
    
    
    70,951
    
    
    
    173,661
    
    
    
    12,191
    
    
    
    (230,313
    )
    
    
    (14,135
    )
    
    
    12,355NET INCREASE IN CASH AND CASH
EQUIVALENTS
    
    
    43,910
    
    
    
    68
    
    
    
    29
    
    
    
    46,713
    
    
    
    
    
    
    
    90,720CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    2,458
    
    
    
    36
    
    
    
    
    
    
    
    59,216
    
    
    
    
    
    
    
    61,710CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    46,368
    
    
    $
    104
    
    
    $
    29
    
    
    $
    105,929
    
    
    $
    
    
    
    $
    152,430
 26




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2006
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    324,992
    
    
    $
    302,019
    
    
    $
    144,001
    
    
    $
    351,392
    
    
    $
    (797,412
    )
    
    $
    324,992Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, amortization and impairment
    
    
    
    
    
    
    12,428
    
    
    
    2,547
    
    
    
    111,780
    
    
    
    
    
    
    
    126,755Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,259
    
    
    
    
    
    
    
    12,259Share-based compensation expense
    
    
    10,106
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,106Equity in income of affiliates
    
    
    (335,736
    )
    
    
    (300,025
    )
    
    
    (161,651
    )
    
    
    
    
    
    
    797,412
    
    
    
    Other
    
    
    
    
    
    
    3,675
    
    
    
    (2,013
    )
    
    
    5,006
    
    
    
    
    
    
    
    6,668Other changes in current assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (968
    )
    
    
    5,091
    
    
    
    (111,068
    )
    
    
    
    
    
    
    (106,945
    )Other current assets
    
    
    50
    
    
    
    (33
    )
    
    
    
    
    
    
    (31,222
    )
    
    
    
    
    
    
    (31,205
    )Accounts payable
    
    
    
    
    
    
    436
    
    
    
    (403
    )
    
    
    5,978
    
    
    
    
    
    
    
    6,011Other current liabilities
    
    
    1,835
    
    
    
    21,922
    
    
    
    (1,397
    )
    
    
    (441
    )
    
    
    
    
    
    
    21,919Net cash provided by (used for) operating
activities
    
    
    1,247
    
    
    
    39,454
    
    
    
    (13,825
    )
    
    
    343,684
    
    
    
    
    
    
    
    370,560CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    (190,710
    )
    
    
    
    
    
    
    (90,962
    )
    
    
    
    
    
    
    (281,672
    )Other capital expenditures
    
    
    
    
    
    
    
    
    
    
    (1,511
    )
    
    
    (158,920
    )
    
    
    
    
    
    
    (160,431
    )Major maintenance expenditures
    
    
    
    
    
    
    (678
    )
    
    
    
    
    
    
    (26,104
    )
    
    
    
    
    
    
    (26,782
    )Repayments of notes from affiliates
    
    
    
    
    
    
    
    
    
    
    27,896
    
    
    
    12,526
    
    
    
    (40,422
    )
    
    
    Proceeds from Smedvig disposition
    
    
    691,261
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    691,261Proceeds from sales and maturities of
marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,582
    
    
    
    
    
    
    
    6,582Net cash provided by (used for) investing
activities
    
    
    691,261
    
    
    
    (191,388
    )
    
    
    26,385
    
    
    
    (256,878
    )
    
    
    (40,422
    )
    
    
    228,958CASH FLOWS FROM FINANCING ACTIVITIESPayments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    (600,000
    )
    
    
    (4,404
    )
    
    
    
    
    
    
    (604,404
    )Payments on bank credit facilities
    
    
    
    
    
    
    
    
    
    
    (135,000
    )
    
    
    
    
    
    
    
    
    
    
    (135,000
    )Advances (to)/from affiliates
    
    
    (787,768
    )
    
    
    161,669
    
    
    
    722,440
    
    
    
    (96,341
    )
    
    
    
    
    
    
    Repayments of notes to affiliates
    
    
    (27,896
    )
    
    
    (12,526
    )
    
    
    
    
    
    
    
    
    
    
    40,422
    
    
    
    Net proceeds from employee stock transactions
    
    
    7,642
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,642Proceeds from issuance of Senior Notes, net of
debt issuance costs
    
    
    295,953
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    295,953Dividends paid
    
    
    (10,997
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,997
    )Repurchases of ordinary shares
    
    
    (50,667
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,667
    )Net cash provided by (used for) financing
activities
    
    
    (573,733
    )
    
    
    149,143
    
    
    
    (12,560
    )
    
    
    (100,745
    )
    
    
    40,422
    
    
    
    (497,473
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    118,775
    
    
    
    (2,791
    )
    
    
    
    
    
    
    (13,939
    )
    
    
    
    
    
    
    102,045CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    13,957
    
    
    
    3,119
    
    
    
    
    
    
    
    104,769
    
    
    
    
    
    
    
    121,845CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    132,732
    
    
    $
    328
    
    
    $
    
    
    
    $
    90,830
    
    
    $
    
    
    
    $
    223,890
 27




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  
 FORWARD-LOOKING STATEMENTS
  
 EXECUTIVE OVERVIEW
      28




---



##### Table of Contents



Noble Clyde Boudreaux
 INTERNAL INVESTIGATION
       29




---



##### Table of Contents



RESULTS OF OPERATIONS
 Hurricane Losses and Recoveries
  For the Three Months Ended June 30, 2007 and 2006
 General
   30




---



##### Table of Contents



Contract Drilling ServicesInternational
    
    
    Domestic
    
    
    Other
    
    
    Total(In thousands)Three Months Ended June 30, 2007Operating Revenues:Contract drilling services
    
    $
    490,962
    
    
    $
    166,542
    
    
    $
    
    
    
    $
    657,504Reimbursables
    
    
    16,766
    
    
    
    3,090
    
    
    
    8,752
    
    
    
    28,608Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    39,165
    
    
    
    39,165Engineering, consulting and other
    
    
    268
    
    
    
    108
    
    
    
    346
    
    
    
    722507,996
    
    
    
    169,740
    
    
    
    48,263
    
    
    
    725,999Operating Costs and Expenses:Contract drilling services
    
    
    170,691
    
    
    
    41,359
    
    
    
    
    
    
    
    212,050Reimbursables
    
    
    13,946
    
    
    
    2,760
    
    
    
    7,902
    
    
    
    24,608Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    32,454
    
    
    
    32,454Engineering, consulting and other
    
    
    12
    
    
    
    3
    
    
    
    7,240
    
    
    
    7,255Depreciation and amortization
    
    
    49,824
    
    
    
    16,284
    
    
    
    2,215
    
    
    
    68,323Selling, general and administrative
    
    
    15,591
    
    
    
    4,152
    
    
    
    559
    
    
    
    20,302250,064
    
    
    
    64,558
    
    
    
    50,370
    
    
    
    364,992Operating Income (Loss)
    
    $
    257,932
    
    
    $
    105,182
    
    
    $
    (2,107
    )
    
    $
    361,007
 Contract Drilling ServicesInternational
    
    
    Domestic
    
    
    Other
    
    
    Total(In thousands)Three Months Ended June 30, 2006Operating Revenues:Contract drilling services
    
    $
    329,368
    
    
    $
    137,589
    
    
    $
    
    
    
    $
    466,957Reimbursables
    
    
    12,225
    
    
    
    2,704
    
    
    
    5,711
    
    
    
    20,640Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    27,349
    
    
    
    27,349Engineering, consulting and other
    
    
    556
    
    
    
    105
    
    
    
    1,907
    
    
    
    2,568342,149
    
    
    
    140,398
    
    
    
    34,967
    
    
    
    517,514Operating Costs and Expenses:Contract drilling services
    
    
    133,487
    
    
    
    39,741
    
    
    
    
    
    
    
    173,228Reimbursables
    
    
    10,443
    
    
    
    2,298
    
    
    
    4,803
    
    
    
    17,544Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    23,080
    
    
    
    23,080Engineering, consulting and other
    
    
    352
    
    
    
    (46
    )
    
    
    6,970
    
    
    
    7,276Depreciation and amortization
    
    
    48,985
    
    
    
    12,369
    
    
    
    1,191
    
    
    
    62,545Selling, general and administrative
    
    
    5,766
    
    
    
    3,804
    
    
    
    1,085
    
    
    
    10,655199,033
    
    
    
    58,166
    
    
    
    37,129
    
    
    
    294,328Operating Income (Loss)
    
    $
    143,116
    
    
    $
    82,232
    
    
    $
    (2,162
    )
    
    $
    223,186
 31




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##### Table of Contents



Rig Utilization, Operating Days and Average Dayrates
  Average RigUtilization (1)
    
    Operating Days (2)
    
    Average DayrateThree Months Ended
    
    Three Months Ended
    
    Three Months EndedJune 30,
    
    June 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006
    
    2007
    
    2006International (3):Jackups
    
    
    98
    %
    
    
    98
    %
    
    
    3,553
    
    
    
    3,581
    
    
    $
    112,804
    
    
    $
    71,826Semisubmersibles - >6,000(4)
    
    
    100
    %
    
    
    100
    %
    
    
    182
    
    
    
    182
    
    
    
    166,795
    
    
    
    145,698Semisubmersibles - <6,000(5)
    
    
    81
    %
    
    
    100
    %
    
    
    148
    
    
    
    91
    
    
    
    166,705
    
    
    
    196,709Drillships
    
    
    100
    %
    
    
    100
    %
    
    
    273
    
    
    
    273
    
    
    
    128,874
    
    
    
    96,313Total International
    
    
    97
    %
    
    
    98
    %
    
    
    4,156
    
    
    
    4,127
    
    
    $
    118,138
    
    
    $
    79,808Domestic (6):Semisubmersibles - >6,000(4)
    
    
    100
    %
    
    
    100
    %
    
    
    373
    
    
    
    364
    
    
    $
    343,754
    
    
    $
    273,779Semisubmersibles - <6,000(5)
    
    
    100
    %
    
    
    100
    %
    
    
    91
    
    
    
    168
    
    
    
    173,462
    
    
    
    128,147Submersibles
    
    
    100
    %
    
    
    97
    %
    
    
    273
    
    
    
    264
    
    
    
    82,137
    
    
    
    61,402Total Domestic
    
    
    100
    %
    
    
    99
    %
    
    
    737
    
    
    
    796
    
    
    $
    225,872
    
    
    $
    172,950Total Company
    
    
    98
    %
    
    
    98
    %
    
    
    4,893
    
    
    
    4,923
    
    
    $
    134,364
    
    
    $
    94,852
 
 (1)
    
    Information reflects our policy of reporting on the basis of the number of actively marketed
rigs in our fleet. Percentages reflect the results of rigs only during the period in which
they are owned by us.(2)
    
    Information reflects the number of days that our rigs were operating under contractual
terms.(3)
    
    International encompasses contract drilling services conducted in the Middle East, India,
Mexico, the North Sea, Brazil and West Africa.(4)
    
    These units have water depth ratings of 6,000 feet or greater depending on the unit.(5)
    
    These units have water depth ratings of less than 6,000 feet.(6)
    
    Domestic encompasses contract drilling services conducted in the U.S. Gulf of Mexico. 32




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##### Table of Contents



International Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Contract drilling services
    
    $
    490,962
    
    
    $
    329,368
    
    
    $
    170,691
    
    
    $
    133,487Reimbursables (1)
    
    
    16,766
    
    
    
    12,225
    
    
    
    13,946
    
    
    
    10,443Other
    
    
    268
    
    
    
    556
    
    
    
    12
    
    
    
    352Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    49,824
    
    
    
    48,985Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    15,591
    
    
    
    5,766Total
    
    $
    507,996
    
    
    $
    342,149
    
    
    $
    250,064
    
    
    $
    199,033
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Ton van Langeveld Noble Therald Martin
 Operating Costs and Expenses. Noble Therald Martin
 33




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##### Table of Contents



Domestic Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Contract drilling services
    
    $
    166,542
    
    
    $
    137,589
    
    
    $
    41,359
    
    
    $
    39,741Reimbursables (1)
    
    
    3,090
    
    
    
    2,704
    
    
    
    2,760
    
    
    
    2,298Other
    
    
    108
    
    
    
    105
    
    
    
    3
    
    
    
    (46
    )Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    16,284
    
    
    
    12,369Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    4,152
    
    
    
    3,804Total
    
    $
    169,740
    
    
    $
    140,398
    
    
    $
    64,558
    
    
    $
    58,166
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Therald Martin Noble Clyde Boudreaux
 Operating Costs and Expenses . Noble Clyde Boudreaux Noble Therald
Martin
 34




---



##### Table of Contents



Other
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Labor contract drilling services
    
    $
    39,165
    
    
    $
    27,349
    
    
    $
    32,454
    
    
    $
    23,080Engineering, consulting and other
    
    
    346
    
    
    
    1,907
    
    
    
    7,240
    
    
    
    6,970Reimbursables (1)
    
    
    8,752
    
    
    
    5,711
    
    
    
    7,902
    
    
    
    4,803Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    2,215
    
    
    
    1,191Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    559
    
    
    
    1,085Total
    
    $
    48,263
    
    
    $
    34,967
    
    
    $
    50,370
    
    
    $
    37,129
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues . Noble Kolskaya
  Operating Costs and Expenses . Noble Kolskaya
  Noble Kolskaya Noble
Kolskaya
 Other Items
 Selling, General and Administrative Expenses .
 35




---



##### Table of Contents



Interest Expense .
 Other, net.
 Income Tax Provision .
 For the Six Months Ended June 30, 2007 and 2006
 General
   36




---



##### Table of Contents



Contract Drilling ServicesInternational
    
    
    Domestic
    
    
    Other
    
    
    Total(In thousands)Six Months Ended June 30, 2007Operating Revenues:Contract drilling services
    
    $
    920,440
    
    
    $
    313,979
    
    
    $
    
    
    
    $
    1,234,419Reimbursables
    
    
    32,755
    
    
    
    6,870
    
    
    
    20,126
    
    
    
    59,751Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    75,720
    
    
    
    75,720Engineering, consulting and other
    
    
    360
    
    
    
    246
    
    
    
    1,927
    
    
    
    2,533953,555
    
    
    
    321,095
    
    
    
    97,773
    
    
    
    1,372,423Operating Costs and Expenses:Contract drilling services
    
    
    330,815
    
    
    
    78,077
    
    
    
    
    
    
    
    408,892Reimbursables
    
    
    27,230
    
    
    
    6,415
    
    
    
    18,509
    
    
    
    52,154Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    60,857
    
    
    
    60,857Engineering, consulting and other
    
    
    173
    
    
    
    (17
    )
    
    
    10,740
    
    
    
    10,896Depreciation and amortization
    
    
    97,895
    
    
    
    30,022
    
    
    
    4,871
    
    
    
    132,788Selling, general and administrative
    
    
    25,981
    
    
    
    7,422
    
    
    
    1,125
    
    
    
    34,528482,094
    
    
    
    121,919
    
    
    
    96,102
    
    
    
    700,115Operating Income
    
    $
    471,461
    
    
    $
    199,176
    
    
    $
    1,671
    
    
    $
    672,308
 Contract Drilling ServicesInternational
    
    
    Domestic
    
    
    Other
    
    
    Total(In thousands)Six Months Ended June 30, 2006Operating Revenues:Contract drilling services
    
    $
    602,239
    
    
    $
    273,065
    
    
    $
    
    
    
    $
    875,304Reimbursables
    
    
    23,715
    
    
    
    8,933
    
    
    
    11,064
    
    
    
    43,712Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    53,865
    
    
    
    53,865Engineering, consulting and other
    
    
    1,005
    
    
    
    268
    
    
    
    5,275
    
    
    
    6,548626,959
    
    
    
    282,266
    
    
    
    70,204
    
    
    
    979,429Operating Costs and Expenses:Contract drilling services
    
    
    256,373
    
    
    
    77,718
    
    
    
    
    
    
    
    334,091Reimbursables
    
    
    19,236
    
    
    
    8,371
    
    
    
    9,989
    
    
    
    37,596Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    45,019
    
    
    
    45,019Engineering, consulting and other
    
    
    317
    
    
    
    (156
    )
    
    
    10,386
    
    
    
    10,547Depreciation and amortization
    
    
    94,753
    
    
    
    24,909
    
    
    
    2,244
    
    
    
    121,906Selling, general and administrative
    
    
    11,229
    
    
    
    7,110
    
    
    
    2,601
    
    
    
    20,940Hurricane losses and recoveries, net
    
    
    
    
    
    
    (4,404
    )
    
    
    
    
    
    
    (4,404
    )381,908
    
    
    
    113,548
    
    
    
    70,239
    
    
    
    565,695Operating Income (Loss)
    
    $
    245,051
    
    
    $
    168,718
    
    
    $
    (35
    )
    
    $
    413,734
 37




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##### Table of Contents



Rig Utilization, Operating Days and Average Dayrates
  Average RigUtilization (1)
    
    
    Operating Days (2)
    
    
    Average DayrateSix Months Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006International (3):Jackups
    
    
    98
    %
    
    
    99
    %
    
    
    7,065
    
    
    
    7,001
    
    
    $
    107,490
    
    
    $
    67,944Semisubmersibles - >6,000(4)
    
    
    100
    %
    
    
    100
    %
    
    
    362
    
    
    
    362
    
    
    
    159,946
    
    
    
    117,636Semisubmersibles - <6,000(5)
    
    
    66
    %
    
    
    100
    %
    
    
    238
    
    
    
    181
    
    
    
    178,961
    
    
    
    155,299Drillships
    
    
    97
    %
    
    
    100
    %
    
    
    525
    
    
    
    543
    
    
    
    115,355
    
    
    
    100,229Total International
    
    
    96
    %
    
    
    99
    %
    
    
    8,190
    
    
    
    8,087
    
    
    $
    112,383
    
    
    $
    74,470Domestic (6):Jackups
    
    
    N/A
    
    
    
    86
    %
    
    
    N/A
    
    
    
    155
    
    
    $
    N/A
    
    
    $
    101,112Semisubmersibles - >6,000(4)
    
    
    100
    %
    
    
    100
    %
    
    
    734
    
    
    
    724
    
    
    
    328,782
    
    
    
    257,759Semisubmersibles - <6,000(5)
    
    
    100
    %
    
    
    100
    %
    
    
    181
    
    
    
    348
    
    
    
    163,979
    
    
    
    126,097Submersibles
    
    
    97
    %
    
    
    82
    %
    
    
    529
    
    
    
    444
    
    
    
    81,609
    
    
    
    60,228Total Domestic
    
    
    99
    %
    
    
    93
    %
    
    
    1,444
    
    
    
    1,671
    
    
    $
    217,512
    
    
    $
    163,462Total Company
    
    
    97
    %
    
    
    98
    %
    
    
    9,634
    
    
    
    9,758
    
    
    $
    128,137
    
    
    $
    89,705
 
 (1)
    
    Information reflects our policy of reporting on the basis of the number of actively marketed
rigs in our fleet. Percentages reflect the results of rigs only during the period in which
they are owned by us.(2)
    
    Information reflects the number of days that our rigs were operating under contractual
terms.(3)
    
    International encompasses contract drilling services conducted in the Middle East, India,
Mexico, the North Sea, Brazil and West Africa.(4)
    
    These units have water depth ratings of 6,000 feet or greater depending on the unit.(5)
    
    These units have water depth ratings of less than 6,000 feet.(6)
    
    Domestic encompasses contract drilling services conducted in the U.S. Gulf of Mexico. 38




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##### Table of Contents



International Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesSix Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Contract drilling services
    
    $
    920,440
    
    
    $
    602,239
    
    
    $
    330,815
    
    
    $
    256,373Reimbursables (1)
    
    
    32,755
    
    
    
    23,715
    
    
    
    27,230
    
    
    
    19,236Other
    
    
    360
    
    
    
    1,005
    
    
    
    173
    
    
    
    317Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    97,895
    
    
    
    94,753Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    25,981
    
    
    
    11,229Total
    
    $
    953,555
    
    
    $
    626,959
    
    
    $
    482,094
    
    
    $
    381,908
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Tom Jobe Noble
Eddie Paul Noble Therald Martin
 Operating Costs and Expenses.
 39




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##### Table of Contents



Domestic Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesSix Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Contract drilling services
    
    $
    313,979
    
    
    $
    273,065
    
    
    $
    78,077
    
    
    $
    77,718Reimbursables (1)
    
    
    6,870
    
    
    
    8,933
    
    
    
    6,415
    
    
    
    8,371Other
    
    
    246
    
    
    
    268
    
    
    
    (17
    )
    
    
    (156
    )Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    30,022
    
    
    
    24,909Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    7,422
    
    
    
    7,110Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,404
    )Total
    
    $
    321,095
    
    
    $
    282,266
    
    
    $
    121,919
    
    
    $
    113,548
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Tom Jobe Noble Eddie Paul Noble Therald Martin Noble Clyde Boudreaux
 Operating Costs and Expenses . Noble Clyde Boudreaux
 40




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##### Table of Contents



Other
  Operating CostsOperating Revenues
    
    
    and ExpensesSix Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Labor contract drilling services
    
    $
    75,720
    
    
    $
    53,865
    
    
    $
    60,857
    
    
    $
    45,019Engineering, consulting and other
    
    
    1,927
    
    
    
    5,275
    
    
    
    10,740
    
    
    
    10,386Reimbursables (1)
    
    
    20,126
    
    
    
    11,064
    
    
    
    18,509
    
    
    
    9,989Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    4,871
    
    
    
    2,244Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    1,125
    
    
    
    2,601Total
    
    $
    97,773
    
    
    $
    70,204
    
    
    $
    96,102
    
    
    $
    70,239
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues . Noble Kolskaya
  Operating Costs and Expenses . Noble Kolskaya
  Noble Kolskaya Noble Kolskaya
 41




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##### Table of Contents



Other Items
 Selling, General and Administrative Expenses .
 Interest Expense .
 Other, net.
 Income Tax Provision .
 
 LIQUIDITY AND CAPITAL RESOURCES
 Overview
     42




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##### Table of Contents



Capital Expenditures
  Noble Clyde Boudreaux Noble Clyde Boudreaux Noble Dave Beard Noble Danny Adkins Noble Jim Day Noble Roger Lewis Noble Hans Deul Noble Scott Marks
    Credit Facilities, Long-Term Debt and Other Commercial Commitments
    43




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
  Foreign Currency Risk
    Market Risk
  44




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
   45




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  Our international operations involve additional risks not associated with domestic operations.
  
    
    terrorist acts, war and civil disturbances;
    
    expropriation of property or equipment;
    
    foreign and domestic monetary policy;
    
    the inability to repatriate income or capital;
    
    regulatory or financial requirements to comply with foreign bureaucratic actions; and
    
    changing taxation policies.
  
    
    the importing, exporting, equipping and operation of drilling units;
    
    repatriation of foreign earnings;
    
    currency exchange controls;
    
    oil and gas exploration and development;
    
    taxation of offshore earnings and earnings of expatriate personnel; and
    
    use and compensation of local employees and suppliers by foreign contractors.
   We could be adversely affected by violations of applicable anti-corruption laws.
  46




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##### Table of Contents



We are subject to changes in tax laws.
    47




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##### Table of Contents



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total Number of Shares
    
    Maximum Number ofTotal Number
    
    
    
    
    
    Purchased as Part of
    
    Shares that May Yet Beof Shares
    
    Average Price
    
    Publicly Announced
    
    Purchased Under thePeriod
    
    Purchased
    
    Paid per Share(2)(3)
    
    Plans or Programs(1)(2)(3)
    
    Plans or Programs(1)April 2007
    
    
    121,298
    (4)
    
    $
    84.61
    
    
    
    94,000
    
    
    
    13,968,000May 2007
    
    
    94,287
    (5)
    
    $
    86.88
    
    
    
    94,000
    
    
    
    13,874,000June 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,874,000
 
 (1)
    
    All share repurchases were made in the open market pursuant to the share repurchase program
which Nobles board of directors authorized and adopted and which we announced on January 31,
2002. On February 2, 2007, Noble announced that its board of directors increased the share
repurchase authorization by 10,000,000 shares, resulting in 15,262,000 shares authorized for
repurchase. Our share repurchase program has no date of expiration.(2)
    
    Shares repurchased in April totaled 94,000 shares at an average price of $84.71 ($8.0
million).(3)
    
    Shares repurchased in May totaled 94,000 shares at an average price of $86.88 ($8.2 million).(4)
    
    Includes 27,298 ordinary shares at an average price of $84.27 acquired by surrender of
ordinary shares to the Company by employees for withholding taxes upon the vesting of
restricted stock.(5)
    
    Includes 287 ordinary shares at an average price of $84.76 acquired by surrender of ordinary
shares to the Company by employees for withholding taxes upon the vesting of restricted stock. 
 ITEM 6. EXHIBITS
  48




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SIGNATURES
  NOBLE CORPORATIONDATE: August 9, 2007
    By:
    /s/ MARK A. JACKSONMark A. JacksonChairman of the Board, President and Chief Executive Officer
(Duly authorized officer)/s/ THOMAS L. MITCHELLThomas L. MitchellSenior Vice President and Chief Financial Officer
(Principal financial officer) 49




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INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    EXHIBIT4.1
    
    Short-Term Loan Agreement dated as of July 24, 2007 among Noble Corporation, as
Borrower, the Lenders from time to time parties thereto and Goldman Sachs Credit
Partners L.P., as Administrative Agent (filed as Exhibit 4.1 to Noble Corporations
Current Report on Form 8-K filed on July 26, 2007 and incorporated herein by
reference).10.1*
    
    Transition Consulting Services Agreement dated as of April 26, 2007 between
Noble Corporation and James C. Day (filed as Exhibit 10.1 to Noble Corporations
Current Report on Form 8-K filed on May 1, 2007 and incorporated herein by reference).10.2*
    
    Noble Corporation 2007 Short Term Incentive Plan (filed as Exhibit 10.3 to
Noble Corporations Current Report on Form 8-K filed on May 1, 2007 and incorporated
herein by reference).31.1
    
    Certification of Mark A. Jackson Pursuant to the U.S. Securities Exchange Act
of 1934, as amended, Rule 13a-14(a) or Rule 15d-14(a).31.2
    
    Certification of Thomas L. Mitchell Pursuant to the U.S. Securities Exchange
Act of 1934, as amended, Rule 13a-14(a) or Rule 15d-14(a).32.1+
    
    Certification of Mark A. Jackson Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2+
    
    Certification of Thomas L. Mitchell Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Management contract or compensatory plan or arrangement required to be filed as an
exhibit hereto.+
    
    Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K. 50