##### 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) OFTHE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2006ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934For the transition period from ___to ___
 Commission file number: 0-13857
 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
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
 o þ




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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
    
    
    30Forward-Looking Statements
    
    
    30Executive Overview
    
    
    30Results of Operations
    
    
    31Liquidity and Capital Resources
    
    
    43ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
    
    
    46ITEM 4.
    
    CONTROLS AND PROCEDURES
    
    
    47PART II
    
    ITEM 1.
    
    LEGAL PROCEEDINGS
    
    
    47ITEM 1A.
    
    RISK FACTORS
    
    
    48ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    49ITEM 6.
    
    EXHIBITS
    
    
    49SIGNATURES
    
    
    50INDEX TO EXHIBITS
    
    
    51Certification of James C. Day Pursuant to Rule 13a-14a/15d-14aCertification of Mark A. Jackson Pursuant to Rule 13a-14a/15d-14aCertification of James C. Day Pursuant to Section 906Certification of Mark A. Jackson Pursuant to Section 906
  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 31,2006
    
    
    2005ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    223,890
    
    
    $
    121,845Investments in marketable securities
    
    
    37,113
    
    
    
    44,457Accounts receivable
    
    
    384,172
    
    
    
    276,688Insurance receivables
    
    
    58,921
    
    
    
    51,565Inventories
    
    
    4,266
    
    
    
    3,940Prepaid expenses
    
    
    24,945
    
    
    
    10,064Other current assets
    
    
    28,765
    
    
    
    13,896Total current assets
    
    
    762,072
    
    
    
    522,455PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    4,613,562
    
    
    
    4,178,097Other
    
    
    71,318
    
    
    
    66,6984,684,880
    
    
    
    4,244,795Accumulated depreciation
    
    
    (1,339,539
    )
    
    
    (1,245,776
    )3,345,341
    
    
    
    2,999,019INVESTMENTS IN MARKETABLE SECURITIES
    
    
    1,555
    
    
    
    673,639OTHER ASSETS
    
    
    150,215
    
    
    
    151,254$
    4,259,183
    
    
    $
    4,346,367LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    9,295
    
    
    $
    8,972Accounts payable
    
    
    118,012
    
    
    
    93,914Accrued payroll and related costs
    
    
    84,328
    
    
    
    78,558Taxes payable
    
    
    44,828
    
    
    
    45,245Interest payable
    
    
    10,264
    
    
    
    9,640Other current liabilities
    
    
    38,330
    
    
    
    23,006Total current liabilities
    
    
    305,057
    
    
    
    259,335LONG-TERM DEBT
    
    
    689,342
    
    
    
    1,129,325DEFERRED INCOME TAXES
    
    
    239,848
    
    
    
    227,589OTHER LIABILITIES
    
    
    6,081
    
    
    
    6,2901,240,328
    
    
    
    1,622,539COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    (7,655
    )
    
    
    (7,906
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share; 400,000 shares authorized;
136,801 shares issued and outstanding in 2006; 137,009 shares issued
and outstanding in 2005
    
    
    13,680
    
    
    
    13,701Capital in excess of par value
    
    
    960,191
    
    
    
    1,024,470Retained earnings
    
    
    2,050,010
    
    
    
    1,736,015Restricted stock (unearned compensation)
    
    
    
    
    
    
    (17,099
    )Accumulated other comprehensive income (loss)
    
    
    2,629
    
    
    
    (25,353
    )3,026,510
    
    
    
    2,731,734$
    4,259,183
    
    
    $
    4,346,367
  3




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended June 30,2006
    
    
    2005OPERATING REVENUESContract drilling services
    
    $
    476,339
    
    
    $
    303,911Reimbursables
    
    
    20,640
    
    
    
    18,655Labor contract drilling services
    
    
    17,967
    
    
    
    17,531Engineering, consulting and other
    
    
    2,568
    
    
    
    3,911517,514
    
    
    
    344,008OPERATING COSTS AND EXPENSESContract drilling services
    
    
    180,621
    
    
    
    145,907Reimbursables
    
    
    17,544
    
    
    
    16,546Labor contract drilling services
    
    
    15,687
    
    
    
    14,476Engineering, consulting and other
    
    
    7,276
    
    
    
    5,733Depreciation and amortization
    
    
    62,545
    
    
    
    59,529Selling, general and administrative
    
    
    10,655
    
    
    
    10,099294,328
    
    
    
    252,290OPERATING INCOME
    
    
    223,186
    
    
    
    91,718OTHER INCOME (EXPENSE)Interest expense, net of amount capitalized
    
    
    (1,773
    )
    
    
    (5,192
    )Other, net
    
    
    1,893
    
    
    
    2,876INCOME BEFORE INCOME TAXES
    
    
    223,306
    
    
    
    89,402INCOME TAX PROVISION
    
    
    (43,545
    )
    
    
    (16,092
    )NET INCOME
    
    $
    179,761
    
    
    $
    73,310NET INCOME PER SHARE:Basic
    
    $
    1.31
    
    
    $
    0.54Diluted
    
    $
    1.30
    
    
    $
    0.53
 .
 4




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Six Months Ended June 30,2006
    
    
    2005OPERATING REVENUESContract drilling services
    
    $
    893,971
    
    
    $
    566,315Reimbursables
    
    
    43,712
    
    
    
    43,157Labor contract drilling services
    
    
    35,198
    
    
    
    35,672Engineering, consulting and other
    
    
    6,548
    
    
    
    9,189979,429
    
    
    
    654,333OPERATING COSTS AND EXPENSESContract drilling services
    
    
    348,526
    
    
    
    289,929Reimbursables
    
    
    37,596
    
    
    
    39,452Labor contract drilling services
    
    
    30,584
    
    
    
    29,665Engineering, consulting and other
    
    
    10,706
    
    
    
    11,621Depreciation and amortization
    
    
    121,906
    
    
    
    115,906Selling, general and administrative
    
    
    20,940
    
    
    
    17,917Hurricane losses and recoveries, net
    
    
    (4,404
    )
    
    
    565,854
    
    
    
    504,490OPERATING INCOME
    
    
    413,575
    
    
    
    149,843OTHER INCOME (EXPENSE)Interest expense, net of amount capitalized
    
    
    (14,252
    )
    
    
    (11,127
    )Other, net
    
    
    4,394
    
    
    
    6,211INCOME BEFORE INCOME TAXES
    
    
    403,717
    
    
    
    144,927INCOME TAX PROVISION
    
    
    (78,725
    )
    
    
    (26,087
    )NET INCOME
    
    $
    324,992
    
    
    $
    118,840NET INCOME PER SHARE:Basic
    
    $
    2.38
    
    
    $
    0.88Diluted
    
    $
    2.35
    
    
    $
    0.87
 .
 5




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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months Ended June 30,2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    324,992
    
    
    $
    118,840Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    121,906
    
    
    
    115,906Deferred income tax provision
    
    
    12,259
    
    
    
    9,835Equity in income of joint venture
    
    
    
    
    
    
    (2,388
    )Distributions received from joint venture
    
    
    
    
    
    
    2,194Stock-based compensation expense
    
    
    10,106
    
    
    
    3,365Other
    
    
    11,517
    
    
    
    1,158Other changes in current assets and liabilities, net of
acquired working capital:Accounts receivable
    
    
    (106,945
    )
    
    
    (42,624
    )Other current assets
    
    
    (31,205
    )
    
    
    (11,347
    )Accounts payable
    
    
    6,011
    
    
    
    (8,326
    )Other current liabilities
    
    
    21,919
    
    
    
    3,584Net cash provided by operating activities
    
    
    370,560
    
    
    
    190,197CASH FLOWS FROM INVESTING ACTIVITIESNew construction and major capital upgrades
    
    
    (281,672
    )
    
    
    (56,709
    )Other capital expenditures
    
    
    (160,431
    )
    
    
    (52,376
    )Major maintenance expenditures
    
    
    (26,782
    )
    
    
    (29,078
    )Proceeds from sales of property and equipment
    
    
    
    
    
    
    993Proceeds from Smedvig disposition
    
    
    691,261
    
    
    
    Investments in marketable securities
    
    
    
    
    
    
    (23,349
    )Proceeds from sales and maturities of marketable securities
    
    
    6,582
    
    
    
    106,679Increase in restricted cash
    
    
    
    
    
    
    (28,920
    )Net cash provided by (used for) investing activities
    
    
    228,958
    
    
    
    (82,760
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on bank credit facilities
    
    
    (135,000
    )
    
    
    (65,000
    )Payments of other long-term debt
    
    
    (604,404
    )
    
    
    (4,108
    )Net proceeds from employee stock transactions
    
    
    7,642
    
    
    
    53,955Proceeds from issuance of senior notes, net of debt issuance costs
    
    
    295,953
    
    
    
    Dividends paid
    
    
    (10,997
    )
    
    
    (5,429
    )Repurchases of ordinary shares
    
    
    (50,667
    )
    
    
    Net cash used for financing activities
    
    
    (497,473
    )
    
    
    (20,582
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    102,045
    
    
    
    86,855CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    121,845
    
    
    
    58,790CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    223,890
    
    
    $
    145,645
  6




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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 Restricted
    
    
    AccumulatedCapital in
    
    
    
    
    
    
    Stock
    
    
    Other
    
    
    TotalOrdinary Shares
    
    
    Excess of
    
    
    Retained
    
    
    (Unearned
    
    
    Comprehensive
    
    
    Shareholders'Shares
    
    
    Amount
    
    
    Par Value
    
    
    Earnings
    
    
    Compensation)
    
    
    Income (Loss)
    
    
    EquityBalance at December 31, 2005
    
    
    137,009
    
    
    $
    13,701
    
    
    $
    1,024,470
    
    
    $
    1,736,015
    
    
    $
    (17,099
    )
    

    $
    (25,353
    )
    
    $
    2,731,734Stock-based compensationAdoption of SFAS No. 123R
    
    
    
    
    
    
    
    
    
    
    (17,099
    )
    
    
    
    
    
    
    17,099
    
    

    
    
    
    
    
    Stock-based compensation
    
    
    555
    
    
    
    56
    
    
    
    10,327
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    10,383Contribution to employee
benefit plans
    
    
    45
    
    
    
    4
    
    
    
    3,477
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    3,481Exercise of stock options
    
    
    269
    
    
    
    27
    
    
    
    9,098
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    9,125Restricted shares surrendered for
withholding taxes or
forfeited
    
    
    (77
    )
    
    
    (8
    )
    
    
    (1,475
    )
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    (1,483
    )Repurchases of ordinary shares
    
    
    (1,000
    )
    
    
    (100
    )
    
    
    (68,607
    )
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    (68,707
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    324,992
    
    
    
    
    
    

    
    
    
    
    
    324,992Dividends paid ($0.08 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,997
    )
    
    
    
    
    

    
    
    
    
    
    (10,997
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    27,982
    
    
    
    27,982Balance at June 30, 2006
    
    
    136,801
    
    
    $
    13,680
    
    
    $
    960,191
    
    
    $
    2,050,010
    
    
    $
    
    
    

    $
    2,629
    
    
    $
    3,026,510
  7




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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Three Months Ended June 30,2006
    
    
    2005NET INCOME
    
    $
    179,761
    
    
    $
    73,310OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    1,327
    
    
    
    (2,141
    )Unrealized holding gain on marketable securities
    
    
    46
    
    
    
    252Unrealized gain (loss) on foreign currency forward contracts
    
    
    1,998
    
    
    
    (2,761
    )Other comprehensive income (loss)
    
    
    3,371
    
    
    
    (4,650
    )COMPREHENSIVE INCOME
    
    $
    183,132
    
    
    $
    68,660
 Six Months Ended June 30,2006
    
    
    2005NET INCOME
    
    $
    324,992
    
    
    $
    118,840OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    2,756
    
    
    
    (3,486
    )Unrealized holding gain on marketable securities
    
    
    19,523
    
    
    
    386Unrealized gain (loss) on foreign currency forward contracts
    
    
    3,194
    
    
    
    (2,492
    )Unrealized gain on interest rate swaps
    
    
    2,509
    
    
    
    Other comprehensive income (loss)
    
    
    27,982
    
    
    
    (5,592
    )COMPREHENSIVE INCOME
    
    $
    352,974
    
    
    $
    113,248
 .
 8




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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  STOCK-BASED COMPENSATION
 Adoption of SFAS No. 123R
 Share-Based Payment Accounting for Stock Issued to Employees
 Earnings per Share
   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.)
  Three Months
    
    
    Six MonthsEnded
    
    
    EndedJune 30, 2005
    
    
    June 30, 2005Net income  as reported
    
    $
    73,310
    
    
    $
    118,840Stock-based compensation expense, net of tax  as reported
    
    
    1,266
    
    
    
    2,187Stock-based compensation expense, net of tax  pro forma
    
    
    (3,486
    )
    
    
    (5,963
    )Net income  pro forma
    
    $
    71,090
    
    
    $
    115,064Net income per share:Basic  as reported
    
    $
    0.54
    
    
    $
    0.88Basic  pro forma
    
    $
    0.52
    
    
    $
    0.85Diluted  as reported
    
    $
    0.53
    
    
    $
    0.87Diluted  pro forma
    
    $
    0.52
    
    
    $
    0.84
 Stock Options
   Shares
    
    
    Weighted-Underlying
    
    
    AverageOptions
    
    
    Exercise PriceJanuary 1, 2006
    
    
    3,992,008
    
    
    $
    36.14Granted
    
    
    134,598
    
    
    
    76.43Exercised
    
    
    (268,855
    )
    
    
    33.80Forfeited
    
    
    (36,521
    )
    
    
    52.85Outstanding at June 30, 2006 (1)
    
    
    3,821,230
    
    
    
    37.56Exercisable at June 30, 2006 (1)
    
    
    3,284,398
    
    
    $
    34.03
 
 (1)
    
    At June 30, 2006, the remaining weighted average contractual life for options outstanding
and exercisable was 5.5 and 4.8 years, respectively. The aggregate intrinsic value of options
outstanding and exercisable at
June 30, 2006 was $140.9 million and $130.0 million, respectively. 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.)
  Six Months Ended June 30, 2006
 Weighted-average fair value per option granted
    
    $
    26.98Weighted-average exercise price per option granted
    
    $
    76.43Valuation assumptions:Expected option term (years)
    
    
    4.6Expected volatility
    
    
    34.00
    %Expected dividend yield
    
    
    0.20
    %Risk-free interest rate
    
    
    4.58
    %
   Shares
    
    
    Weighted-Under
    
    
    AverageOutstanding
    
    
    Grant-DateOptions
    
    
    Fair ValueNon-vested options at January 1, 2006
    
    
    816,222
    
    
    $
    18.39Granted
    
    
    134,598
    
    
    
    26.98Vested
    
    
    (378,498
    )
    
    
    18.45Forfeited
    
    
    (35,490
    )
    
    
    20.46Non-vested options at June 30, 2006
    
    
    536,832
    
    
    $
    20.36
    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.)
 Restricted Stock
    Weighted-
    
    
    
    
    
    
    Weighted-Time-Vested
    
    
    Average
    
    
    Performance-Vested
    
    
    AverageRestricted
    
    
    Grant-Date
    
    
    Restricted Shares
    
    
    Grant-DateShares Outstanding
    
    
    Fair Value
    
    
    Outstanding (1)
    
    
    Fair ValueNon-vested restricted shares at
January 1, 2006
    
    
    158,297
    
    
    $
    44.32
    
    
    
    304,627
    
    
    $
    14.92Granted
    
    
    457,059
    
    
    
    77.05
    
    
    
    96,776
    
    
    
    27.68Vested
    
    
    (66,193
    )
    
    
    56.74
    
    
    
    
    
    
    
    Forfeited
    
    
    (36,748
    )
    
    
    49.42
    
    
    
    (53,998
    )
    
    
    15.97Non-vested restricted shares at
June 30, 2006
    
    
    512,415
    
    
    $
    70.05
    
    
    
    347,405
    
    
    $
    18.31
 
 (1)
    
    The number of performance-vested restricted shares shown equals the shares that would
vest if the maximum level of performance is achieved. The minimum number of shares is zero
and the target level of performance is 67 percent of the amounts shown.  12




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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.)
    Valuation assumptions:Expected volatility
    
    
    30.00
    %Expected dividend yield
    
    
    0.20
    %Risk-free interest rate
    
    
    4.77
    %
  NOTE 3  NET INCOME PER SHARE
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Weighted-average shares outstanding  basic
    
    
    136,800
    
    
    
    136,065
    
    
    
    136,759
    
    
    
    135,637Effect of potentially dilutive shares:Stock options
    
    
    1,397
    
    
    
    1,235
    
    
    
    1,441
    
    
    
    1,299Non-vested time-vested restricted stock
    
    
    29
    
    
    
    
    
    
    
    116
    
    
    
    Non-vested performance-vested restricted stock
    
    
    71
    
    
    
    
    
    
    
    59
    
    
    
    Weighted-average shares  diluted
    
    
    138,297
    
    
    
    137,300
    
    
    
    138,375
    
    
    
    136,936Net income  basic and diluted
    
    $
    179,761
    
    
    $
    73,310
    
    
    $
    324,992
    
    
    $
    118,840Net income per share:Basic
    
    $
    1.31
    
    
    $
    0.54
    
    
    $
    2.38
    
    
    $
    0.88Diluted
    
    $
    1.30
    
    
    $
    0.53
    
    
    $
    2.35
    
    
    $
    0.87
  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.)
 NOTE 4  MARKETABLE SECURITIES
      Accounting for
Certain Investments in Debt and Equity Securities
 Accounting for Derivative Instruments and Hedging Activities
 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 5  PROPERTY AND EQUIPMENT
  Panon, Panon Noble Harvey Duhaney
  NOTE 6  DEBT
  NOTE 7  COMMITMENTS AND CONTINGENCIES
 Noble Clyde Boudreaux Noble Dave Beard Noble Danny Adkins Noble Roger Lewis Noble Hans Deul Noble Scott Marks
 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.)
     16




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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  EMPLOYEE BENEFIT PLANS
    Three Months Ended June 30,2006
    
    
    2005International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    776
    
    
    $
    1,357
    
    
    $
    628
    
    
    $
    1,183Interest cost
    
    
    792
    
    
    
    1,236
    
    
    
    679
    
    
    
    1,015Return on plan assets
    
    
    (899
    )
    
    
    (1,449
    )
    
    
    (758
    )
    
    
    (1,068
    )Amortization of prior service cost
    
    
    
    
    
    
    84
    
    
    
    
    
    
    
    65Amortization of transition obligation
    
    
    39
    
    
    
    
    
    
    
    62
    
    
    
    Recognized net actuarial loss (gain)
    
    
    88
    
    
    
    344
    
    
    
    (19
    )
    
    
    214Net pension expense
    
    $
    796
    
    
    $
    1,572
    
    
    $
    592
    
    
    $
    1,409
 Six months Ended June 30,2006
    
    
    2005International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    1,552
    
    
    $
    2,714
    
    
    $
    1,256
    
    
    $
    2,368Interest cost
    
    
    1,584
    
    
    
    2,472
    
    
    
    1,357
    
    
    
    2,030Return on plan assets
    
    
    (1,798
    )
    
    
    (2,898
    )
    
    
    (1,517
    )
    
    
    (2,136
    )Amortization of prior service cost
    
    
    
    
    
    
    168
    
    
    
    
    
    
    
    130Amortization of transition obligation
    
    
    78
    
    
    
    
    
    
    
    125
    
    
    
    Recognized net actuarial loss (gain)
    
    
    176
    
    
    
    688
    
    
    
    (38
    )
    
    
    428Net pension expense
    
    $
    1,592
    
    
    $
    3,144
    
    
    $
    1,183
    
    
    $
    2,820
   17




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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  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   Accounting for Certain Derivative Instruments and
Certain Hedging Activities (an amendment of FASB Statement No. 133), Amendment of
Statement 133 on Derivative Instruments and Hedging Activities
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net unrealized gain (loss) at beginning of period
    
    $
    (201)
    
    
    $
    269
    
    
    $
    (3,906
    )
    
    $
    Activity during period:Net unrealized gain (loss) on outstanding
foreign currency forward contracts
    
    
    1,998
    
    
    
    (2,761
    )
    
    
    3,194
    
    
    
    (2,492
    )Settlement of interest rate swaps
    
    
    
    
    
    
    
    
    
    
    2,509
    
    
    
    Net unrealized gain (loss) at June 30
    
    $
    1,797
    
    
    $
    (2,492
    )
    
    $
    1,797
    
    
    $
    (2,492
    )
 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 10  SEGMENT AND RELATED INFORMATION
 Disclosure about Segments of an Enterprise and Related
Information
   International
    
    
    Domestic
    
    
    EngineeringContract
    
    
    Contract
    
    
    &Drilling
    
    
    Drilling
    
    
    ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    TotalThree Months Ended June 30, 2006Revenues from external customers
    
    $
    351,823
    
    
    $
    140,398
    
    
    $
    1,998
    
    
    $
    23,295
    
    
    $
    517,514Depreciation and amortization
    
    
    49,328
    
    
    
    12,986
    
    
    
    190
    
    
    
    41
    
    
    
    62,545Interest expense, net of amount
capitalized
    
    
    6,460
    
    
    
    3,510
    
    
    
    42
    
    
    
    (8,239
    )
    
    
    1,773Income tax provision (benefit)
    
    
    16,361
    
    
    
    25,647
    
    
    
    (2,112
    )
    
    
    3,649
    
    
    
    43,545Segment profit (loss)
    
    
    121,635
    
    
    
    52,462
    
    
    
    (4,002
    )
    
    
    9,666
    
    
    
    179,761Total assets (at end of period)
    
    
    2,897,973
    
    
    
    1,176,054
    
    
    
    24,373
    
    
    
    160,783
    
    
    
    4,259,183Capital expenditures
    
    
    154,886
    
    
    
    95,967
    
    
    
    
    
    
    
    2,810
    
    
    
    253,663Three Months Ended June 30, 2005Revenues from external customers
    
    $
    233,212
    
    
    $
    84,504
    
    
    $
    4,749
    
    
    $
    21,543
    
    
    $
    344,008Depreciation and amortization
    
    
    46,993
    
    
    
    11,770
    
    
    
    99
    
    
    
    667
    
    
    
    59,529Interest expense, net of amount
capitalized
    
    
    4,884
    
    
    
    3,212
    
    
    
    35
    
    
    
    (2,939
    )
    
    
    5,192Income tax provision (benefit)
    
    
    8,921
    
    
    
    8,578
    
    
    
    29
    
    
    
    (1,436
    )
    
    
    16,092Segment profit (loss)
    
    
    48,854
    
    
    
    26,300
    
    
    
    (2,764
    )
    
    
    920
    
    
    
    73,310Total assets (at end of period)
    
    
    2,209,937
    
    
    
    1,044,615
    
    
    
    31,396
    
    
    
    125,089
    
    
    
    3,411,037Capital expenditures
    
    
    41,466
    
    
    
    11,823
    
    
    
    21
    
    
    
    21,455
    
    
    
    74,765
 19




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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.)
 International
    
    
    Domestic
    
    
    EngineeringContract
    
    
    Contract
    
    
    &Drilling
    
    
    Drilling
    
    
    ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    TotalSix Months Ended June 30, 2006Revenues from external customers
    
    $
    646,409
    
    
    $
    282,266
    
    
    $
    5,386
    
    
    $
    45,368
    
    
    $
    979,429Depreciation and amortization
    
    
    95,424
    
    
    
    26,129
    
    
    
    273
    
    
    
    80
    
    
    
    121,906Interest expense, net of amount
capitalized
    
    
    12,729
    
    
    
    7,260
    
    
    
    84
    
    
    
    (5,821
    )
    
    
    14,252Income tax provision (benefit)
    
    
    26,281
    
    
    
    53,013
    
    
    
    (2,387
    )
    
    
    1,818
    
    
    
    78,725Segment profit (loss)
    
    
    208,917
    
    
    
    111,587
    
    
    
    (4,315
    )
    
    
    8,803
    
    
    
    324,992Total assets (at end of period)
    
    
    2,897,973
    
    
    
    1,176,054
    
    
    
    24,373
    
    
    
    160,783
    
    
    
    4,259,183Capital expenditures
    
    
    289,618
    
    
    
    174,621
    
    
    
    
    
    
    
    4,646
    
    
    
    468,885Six Months Ended June 30, 2005Revenues from external customers
    
    $
    448,113
    
    
    $
    145,315
    
    
    $
    15,856
    
    
    $
    45,049
    
    
    $
    654,333Depreciation and amortization
    
    
    91,336
    
    
    
    22,783
    
    
    
    197
    
    
    
    1,590
    
    
    
    115,906Interest expense, net of amount
capitalized
    
    
    9,768
    
    
    
    6,460
    
    
    
    71
    
    
    
    (5,172
    )
    
    
    11,127Income tax provision (benefit)
    
    
    16,602
    
    
    
    9,827
    
    
    
    508
    
    
    
    (850
    )
    
    
    26,087Segment profit (loss)
    
    
    84,013
    
    
    
    34,444
    
    
    
    (3,858
    )
    
    
    4,241
    
    
    
    118,840Total assets (at end of period)
    
    
    2,209,937
    
    
    
    1,044,615
    
    
    
    31,396
    
    
    
    125,089
    
    
    
    3,411,037Capital expenditures
    
    
    84,129
    
    
    
    28,052
    
    
    
    278
    
    
    
    25,704
    
    
    
    138,163
 NOTE 11  ACCOUNTING PRONOUNCEMENTS
 Employers Accounting for Defined Benefit Pension and Other Postretirement
Plansan amendment of SFAS Nos. 87, 88, 106, and 132(R).
 Accounting for Uncertainty in Income
Taxes
 20




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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 12  GUARANTEES OF REGISTERED SECURITIES
    21




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
June 30, 2006
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    132,732
    
    

    $
    328
    
    
    $
    
    
    
    $
    90,830
    
    
    $
    
    
    
    $
    223,890Investment in marketable securities
    
    
    
    
    

    
    15,489
    
    
    
    
    
    
    
    21,624
    
    
    
    
    
    
    
    37,113Accounts receivable
    
    
    
    
    

    
    3,161
    
    
    
    13,702
    
    
    
    367,309
    
    
    
    
    
    
    
    384,172Insurance receivables
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    58,921
    
    
    
    
    
    
    
    58,921Inventories
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    4,266
    
    
    
    
    
    
    
    4,266Prepaid expenses
    
    
    
    
    

    
    245
    
    
    
    321
    
    
    
    24,379
    
    
    
    
    
    
    
    24,945Accounts receivable from affiliates
    
    
    401,989
    
    

    
    
    
    
    
    465,270
    
    
    
    
    
    
    
    (867,259
    )
    
    
    Other current assets
    
    
    50
    
    

    
    139
    
    
    
    247
    
    
    
    60,853
    
    
    
    (32,524
    )
    
    
    28,765Total current assets
    
    
    534,771
    
    

    
    19,362
    
    
    
    479,540
    
    
    
    628,182
    
    
    
    (899,783
    )
    
    
    762,072PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    

    
    758,829
    
    
    
    101,102
    
    
    
    3,753,631
    
    
    
    
    
    
    
    4,613,562Other
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    71,318
    
    
    
    
    
    
    
    71,318
    
    

    
    758,829
    
    
    
    101,102
    
    
    
    3,824,949
    
    
    
    
    
    
    
    4,684,880Accumulated depreciation
    
    
    
    
    

    
    (48,958
    )
    
    
    (58,223
    )
    
    
    (1,232,358
    )
    
    
    
    
    
    
    (1,339,539
    )
    
    

    
    709,871
    
    
    
    42,879
    
    
    
    2,592,591
    
    
    
    
    
    
    
    3,345,341NOTES RECEIVABLE FROM AFFILIATES
    
    
    511,836
    
    

    
    
    
    
    
    44,159
    
    
    
    694,370
    
    
    
    (1,250,365
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    2,295,976
    
    

    
    2,493,579
    
    
    
    2,209,719
    
    
    
    
    
    
    
    (6,999,274
    )
    
    
    INVESTMENTS IN MARKETABLE
SECURITIES
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    1,555
    
    
    
    
    
    
    
    1,555OTHER ASSETS
    
    
    4,109
    
    

    
    3,116
    
    
    
    3,820
    
    
    
    139,170
    
    
    
    
    
    
    
    150,215$
    3,346,692
    
    

    $
    3,225,928
    
    
    $
    2,780,117
    
    
    $
    4,055,868
    
    
    $
    (9,149,422
    )
    
    $
    4,259,183LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    
    
    

    $
    
    
    
    $
    
    
    
    $
    9,295
    
    
    $
    
    
    
    $
    9,295Accounts payable
    
    
    18,605
    
    

    
    2,760
    
    
    
    1,402
    
    
    
    95,245
    
    
    
    
    
    
    
    118,012Accrued payroll and related costs
    
    
    
    
    

    
    74
    
    
    
    15,451
    
    
    
    68,803
    
    
    
    
    
    
    
    84,328Taxes payable
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    44,828
    
    
    
    
    
    
    
    44,828Interest payable
    
    
    1,835
    
    

    
    21,922
    
    
    
    7,587
    
    
    
    11,444
    
    
    
    (32,524
    )
    
    
    10,264Accounts payable to affiliates
    
    
    
    
    

    
    327,657
    
    
    
    
    
    
    
    539,602
    
    
    
    (867,259
    )
    
    
    Other current liabilities
    
    
    
    
    

    
    
    
    
    
    817
    
    
    
    37,513
    
    
    
    
    
    
    
    38,330Total current liabilities
    
    
    20,440
    
    

    
    352,413
    
    
    
    25,257
    
    
    
    806,730
    
    
    
    
    )
    
    
    305,057LONG-TERM DEBT
    
    
    299,742
    
    

    
    
    
    
    
    351,666
    
    
    
    37,934
    
    
    
    
    
    
    
    689,342NOTES PAYABLE TO AFFILIATES
    
    
    
    
    

    
    694,370
    
    
    
    
    
    
    
    555,995
    
    
    
    (1,250,365
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    

    
    (2,700
    )
    
    
    12,279
    
    
    
    230,269
    
    
    
    
    
    
    
    239,848OTHER LIABILITIES
    
    
    
    
    

    
    1,043
    
    
    
    2,304
    
    
    
    2,734
    
    
    
    
    
    
    
    6,081320,182
    
    

    
    1,045,126
    
    
    
    391,506
    
    
    
    1,633,662
    
    
    
    (2,150,148
    )
    
    
    1,240,328COMMITMENTS AND CONTINGENCIES
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTEREST
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    (7,655
    )
    
    
    
    
    
    
    (7,655
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    13,680
    
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,680Capital in excess of par value
    
    
    960,191
    
    

    
    1,149,966
    
    
    
    870,743
    
    
    
    531,652
    
    
    
    (2,552,361
    )
    
    
    960,191Retained earnings
    
    
    2,050,010
    
    

    
    1,030,940
    
    
    
    1,517,868
    
    
    
    1,895,580
    
    
    
    (4,444,388
    )
    
    
    2,050,010Accumulated other comprehensive
income (loss)
    
    
    2,629
    
    

    
    (104
    )
    
    
    
    
    
    
    2,629
    
    
    
    (2,525
    )
    
    
    2,6293,026,510
    
    

    
    2,180,802
    
    
    
    2,388,611
    
    
    
    2,429,861
    
    
    
    (6,999,274
    )
    
    
    3,026,510$
    3,346,692
    
    

    $
    3,225,928
    
    
    $
    2,780,117
    
    
    $
    4,055,868
    
    
    $
    (9,149,422
    )
    
    $
    4,259,183
 22




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
December 31, 2005
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    13,957
    
    
    $
    3,119
    
    
    $
    
    
    
    $
    104,769
    
    
    $
    
    
    
    $
    121,845Investment in marketable securities
    
    
    
    
    
    
    18,036
    
    
    
    
    
    
    
    26,421
    
    
    
    
    
    
    
    44,457Accounts receivable
    
    
    
    
    
    
    4,129
    
    
    
    8,611
    
    
    
    263,948
    
    
    
    
    
    
    
    276,688Insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,565
    
    
    
    
    
    
    
    51,565Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,940
    
    
    
    
    
    
    
    3,940Prepaid expenses
    
    
    
    
    
    
    251
    
    
    
    321
    
    
    
    9,492
    
    
    
    
    
    
    
    10,064Accounts receivable from affiliates
    
    
    273,597
    
    
    
    
    
    
    
    524,596
    
    
    
    
    
    
    
    (798,193
    )
    
    
    Other current assets
    
    
    
    
    
    
    172
    
    
    
    247
    
    
    
    42,354
    
    
    
    (28,877
    )
    
    
    13,896Total current assets
    
    
    287,554
    
    
    
    25,707
    
    
    
    533,775
    
    
    
    502,489
    
    
    
    (827,070
    )
    
    
    522,455PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    
    
    568,119
    
    
    
    99,591
    
    
    
    3,510,387
    
    
    
    
    
    
    
    4,178,097Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,698
    
    
    
    
    
    
    
    66,698
    
    
    
    568,119
    
    
    
    99,591
    
    
    
    3,577,085
    
    
    
    
    
    
    
    4,244,795Accumulated depreciation
    
    
    
    
    
    
    (37,843
    )
    
    
    (56,143
    )
    
    
    (1,151,790
    )
    
    
    
    
    
    
    (1,245,776
    )
    
    
    
    530,276
    
    
    
    43,448
    
    
    
    2,425,295
    
    
    
    
    
    
    
    2,999,019NOTES RECEIVABLE FROM AFFILIATES
    
    
    511,835
    
    
    
    
    
    
    
    744,159
    
    
    
    1,345,577
    
    
    
    (2,601,571
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    1,960,241
    
    
    
    2,238,517
    
    
    
    2,029,863
    
    
    
    
    
    
    
    (6,228,621
    )
    
    
    INVESTMENTS IN MARKETABLE
SECURITIES
    
    
    672,104
    
    
    
    
    
    
    
    
    
    
    
    1,535
    
    
    
    
    
    
    
    673,639OTHER ASSETS
    
    
    
    
    
    
    4,105
    
    
    
    4,404
    
    
    
    142,745
    
    
    
    
    
    
    
    151,254$
    3,431,734
    
    
    $
    2,798,605
    
    
    $
    3,355,649
    
    
    $
    4,417,641
    
    
    $
    (9,657,262
    )
    
    $
    4,346,367LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    
    
    
    $
    21,562
    
    
    $
    
    
    
    $
    8,972
    
    
    $
    (21,562
    )
    
    $
    8,972Accounts payable
    
    
    
    
    
    
    2,398
    
    
    
    1,805
    
    
    
    89,711
    
    
    
    
    
    
    
    93,914Accrued payroll and related costs
    
    
    
    
    
    
    
    
    
    
    16,388
    
    
    
    62,170
    
    
    
    
    
    
    
    78,558Taxes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,245
    
    
    
    
    
    
    
    45,245Interest payable
    
    
    
    
    
    
    
    
    
    
    8,718
    
    
    
    8,237
    
    
    
    (7,315
    )
    
    
    9,640Accounts payable to affiliates
    
    
    
    
    
    
    167,416
    
    
    
    
    
    
    
    630,777
    
    
    
    (798,193
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    
    
    
    
    146
    
    
    
    22,860
    
    
    
    
    
    
    
    23,006Total current liabilities
    
    
    
    
    
    
    191,376
    
    
    
    27,057
    
    
    
    867,972
    
    
    
    (827,070
    )
    
    
    259,335LONG-TERM DEBT
    
    
    
    
    
    
    32,421
    
    
    
    1,086,661
    
    
    
    10,243
    
    
    
    
    
    
    
    1,129,325NOTES PAYABLE TO AFFILIATES
    
    
    700,000
    
    
    
    645,577
    
    
    
    
    
    
    
    1,255,994
    
    
    
    (2,601,571
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    (2,700
    )
    
    
    13,016
    
    
    
    217,273
    
    
    
    
    
    
    
    227,589OTHER LIABILITIES
    
    
    
    
    
    
    1,043
    
    
    
    2,509
    
    
    
    2,738
    
    
    
    
    
    
    
    6,290700,000
    
    
    
    867,717
    
    
    
    1,129,243
    
    
    
    2,354,220
    
    
    
    (3,428,641
    )
    
    
    1,622,539COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTEREST
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,906
    )
    
    
    
    
    
    
    (7,906
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    13,701
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,701Capital in excess of par value
    
    
    1,024,470
    
    
    
    1,149,965
    
    
    
    870,744
    
    
    
    374,810
    
    
    
    (2,395,519
    )
    
    
    1,024,470Retained earnings
    
    
    1,736,015
    
    
    
    781,160
    
    
    
    1,355,662
    
    
    
    1,721,870
    
    
    
    (3,858,692
    )
    
    
    1,736,015Restricted stock (unearned compensation)
    
    
    (17,099
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,099
    )Accumulated other comprehensive
income (loss)
    
    
    (25,353
    )
    
    
    (237
    )
    
    
    
    
    
    
    (25,353
    )
    
    
    25,590
    
    
    
    (25,353
    )2,731,734
    
    
    
    1,930,888
    
    
    
    2,226,406
    
    
    
    2,071,327
    
    
    
    (6,228,621
    )
    
    
    2,731,734$
    3,431,734
    
    
    $
    2,798,605
    
    
    $
    3,355,649
    
    
    $
    4,417,641
    
    
    $
    (9,657,262
    )
    
    $
    4,346,367
 23




---



##### 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
    
    

    $
    454,180
    
    

    $
    
    
    
    $
    476,339Reimbursables
    
    
    
    
    

    
    60
    
    
    
    41
    
    

    
    20,539
    
    

    
    
    
    
    
    20,640Labor contract drilling services
    
    
    
    
    

    
    
    
    
    
    
    
    

    
    17,967
    
    

    
    
    
    
    
    17,967Engineering, 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
    
    

    
    183,198
    
    

    
    (12,740
    )
    
    
    180,621Reimbursables
    
    
    
    
    

    
    45
    
    
    
    41
    
    

    
    17,458
    
    

    
    
    
    
    
    17,544Labor contract drilling services
    
    
    
    
    

    
    
    
    
    
    
    
    

    
    15,687
    
    

    
    
    
    
    
    15,687Engineering, 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
    
    

    
    
    
    
    
    10,655Hurricane losses and recoveries, net
    
    
    
    
    

    
    
    
    
    
    
    
    

    
    
    
    

    
    
    
    
    
    4,577
    
    

    
    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
 24




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2005
 Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    NHC
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    
    
    
    $
    6,944
    
    
    $
    296,967
    
    
    $
    
    
    
    $
    303,911Reimbursables
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    18,654
    
    
    
    
    
    
    
    18,655Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,531
    
    
    
    
    
    
    
    17,531Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    3,898
    
    
    
    
    
    
    
    3,911
    
    
    
    
    
    
    
    6,958
    
    
    
    337,050
    
    
    
    
    
    
    
    344,008OPERATING COSTS AND EXPENSESContract drilling services
    
    
    9
    
    
    
    
    
    
    
    1,142
    
    
    
    144,756
    
    
    
    
    
    
    
    145,907Reimbursables
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    16,545
    
    
    
    
    
    
    
    16,546Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,476
    
    
    
    
    
    
    
    14,476Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,733
    
    
    
    
    
    
    
    5,733Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    1,747
    
    
    
    57,782
    
    
    
    
    
    
    
    59,529Selling, general and administrative
    
    
    369
    
    
    
    
    
    
    
    202
    
    
    
    9,528
    
    
    
    
    
    
    
    10,099378
    
    
    
    
    
    
    
    3,092
    
    
    
    248,820
    
    
    
    
    
    
    
    252,290OPERATING INCOME (LOSS)
    
    
    (378
    )
    
    
    
    
    
    
    3,866
    
    
    
    88,230
    
    
    
    
    
    
    
    91,718OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    73,134
    
    
    
    66,664
    
    
    
    68,864
    
    
    
    
    
    
    
    (208,662
    )
    
    
    Interest expense
    
    
    
    
    
    
    (11,605
    )
    
    
    (7,250
    )
    
    
    2,058
    
    
    
    11,605
    
    
    
    (5,192
    )Other, net
    
    
    554
    
    
    
    
    
    
    
    
    
    
    
    13,927
    
    
    
    (11,605
    )
    
    
    2,876INCOME BEFORE INCOME TAXES
    
    
    73,310
    
    
    
    55,059
    
    
    
    65,480
    
    
    
    104,215
    
    
    
    (208,662
    )
    
    
    89,402INCOME TAX (PROVISION) BENEFIT
    
    
    
    
    
    
    4,062
    
    
    
    1,184
    
    
    
    (21,338
    )
    
    
    
    
    
    
    (16,092
    )NET INCOME
    
    $
    73,310
    
    
    $
    59,121
    
    
    $
    66,664
    
    
    $
    82,877
    
    
    $
    (208,662
    )
    
    $
    73,310
 25




---



##### 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
    
    

    $
    853,553
    
    

    $
    
    
    
    $
    893,971Reimbursables
    
    
    
    
    

    
    205
    
    
    
    67
    
    

    
    43,440
    
    

    
    
    
    
    
    43,712Labor contract drilling services
    
    
    
    
    

    
    
    
    
    
    
    
    

    
    35,198
    
    

    
    
    
    
    
    35,198Engineering, 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
    
    
    8,527
    
    

    
    9,906
    
    
    
    3,030
    
    

    
    352,403
    
    

    
    (25,340
    )
    
    
    348,526Reimbursables
    
    
    
    
    

    
    143
    
    
    
    67
    
    

    
    37,386
    
    

    
    
    
    
    
    37,596Labor contract drilling services
    
    
    
    
    

    
    
    
    
    
    
    
    

    
    30,584
    
    

    
    
    
    
    
    30,584Engineering, consulting and other
    
    
    
    
    

    
    
    
    
    
    
    
    

    
    10,706
    
    

    
    
    
    
    
    10,706Depreciation and amortization
    
    
    
    
    

    
    12,428
    
    
    
    2,547
    
    

    
    106,931
    
    

    
    
    
    
    
    121,906Selling, general and administrative
    
    
    1,386
    
    

    
    1,067
    
    
    
    338
    
    

    
    18,149
    
    

    
    
    
    
    
    20,940Hurricane losses and recoveries, net
    
    
    
    
    

    
    
    
    
    
    
    
    

    
    (4,404
    )
    

    
    
    
    
    
    (4,404
    )9,913
    
    

    
    23,544
    
    
    
    5,982
    
    

    
    551,755
    
    

    
    (25,340
    )
    
    
    565,854OPERATING INCOME (LOSS)
    
    
    (9,913
    )
    

    
    20,985
    
    
    
    15,519
    
    

    
    386,984
    
    

    
    
    
    
    
    413,575OTHER 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
    )
    

    
    (26,775
    )
    
    
    (25,895
    )
    

    
    18,385
    
    

    
    21,922
    
    
    
    (14,252
    )Other, net
    
    
    1,058
    
    

    
    111
    
    
    
    (16,778
    )
    

    
    41,925
    
    

    
    (21,922
    )
    
    
    4,394INCOME 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
 26




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2005
 Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    NHC
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    
    
    
    $
    14,360
    
    
    $
    551,955
    
    
    $
    
    
    
    $
    566,315Reimbursables
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    43,155
    
    
    
    
    
    
    
    43,157Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,672
    
    
    
    
    
    
    
    35,672Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    43
    
    
    
    9,146
    
    
    
    
    
    
    
    9,189
    
    
    
    
    
    
    
    14,405
    
    
    
    639,928
    
    
    
    
    
    
    
    654,333OPERATING COSTS AND EXPENSESContract drilling services
    
    
    34
    
    
    
    
    
    
    
    3,056
    
    
    
    286,839
    
    
    
    
    
    
    
    289,929Reimbursables
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    39,450
    
    
    
    
    
    
    
    39,452Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,665
    
    
    
    
    
    
    
    29,665Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,621
    
    
    
    
    
    
    
    11,621Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    3,189
    
    
    
    112,717
    
    
    
    
    
    
    
    115,906Selling, general and administrative
    
    
    215
    
    
    
    
    
    
    
    450
    
    
    
    17,252
    
    
    
    
    
    
    
    17,917249
    
    
    
    
    
    
    
    6,697
    
    
    
    497,544
    
    
    
    
    
    
    
    504,490OPERATING INCOME (LOSS)
    
    
    (249
    )
    
    
    
    
    
    
    7,708
    
    
    
    142,384
    
    
    
    
    
    
    
    149,843OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    117,215
    
    
    
    104,014
    
    
    
    108,430
    
    
    
    
    
    
    
    (329,659
    )
    
    
    Interest expense
    
    
    
    
    
    
    (23,197
    )
    
    
    (14,500
    )
    
    
    3,373
    
    
    
    23,197
    
    
    
    (11,127
    )Other, net
    
    
    1,958
    
    
    
    
    
    
    
    (1
    )
    
    
    27,451
    
    
    
    (23,197
    )
    
    
    6,211INCOME BEFORE INCOME TAXES
    
    
    118,924
    
    
    
    80,817
    
    
    
    101,637
    
    
    
    173,208
    
    
    
    (329,659
    )
    
    
    144,927INCOME TAX (PROVISION) BENEFIT
    
    
    (84
    )
    
    
    8,154
    
    
    
    2,377
    
    
    
    (36,534
    )
    
    
    
    
    
    
    (26,087
    )NET INCOME
    
    $
    118,840
    
    
    $
    88,971
    
    
    $
    104,014
    
    
    $
    136,674
    
    
    $
    (329,659
    )
    
    $
    118,840
 27




---



##### 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 and amortization
    
    
    
    
    

    
    12,428
    
    
    
    2,547
    
    
    
    106,931
    
    
    
    
    
    
    
    121,906Deferred income tax provision
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    12,259
    
    
    
    
    
    
    
    12,259Distributions received from joint ventures
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation expense
    
    
    10,106
    
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,106Equity earnings in affiliates
    
    
    (335,736
    )
    

    
    (300,025
    )
    
    
    (161,651
    )
    
    
    
    
    
    
    797,412
    
    
    
    Other
    
    
    
    
    

    
    3,675
    
    
    
    (2,013
    )
    
    
    9,855
    
    
    
    
    
    
    
    11,517Other changes in current assets and liabilities, net of
acquired working capital: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 and major capital upgrades
    
    
    
    
    

    
    (190,710
    )
    
    
    
    
    
    
    (90,962
    )
    
    
    
    
    
    
    (281,672
    )Other capital expenditures
    
    
    
    
    

    
    
    
    
    
    (1,511
    )
    
    
    (158,920
    )
    
    
    
    
    
    
    (160,431
    )Major maintenance expenditures
    
    
    
    
    

    
    (678
    )
    
    
    
    
    
    
    (26,104
    )
    
    
    
    
    
    
    (26,782
    )Repayments from affiliates
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    12,526
    
    
    
    (12,526
    )
    
    
    Notes receivable from affiliates
    
    
    
    
    

    
    
    
    
    
    27,896
    
    
    
    
    
    
    
    (27,896
    )
    
    
    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
    
    
    
    
    

    
    (12,526
    )
    
    
    (600,000
    )
    
    
    (4,404
    )
    
    
    12,526
    
    
    
    (604,404
    )(Payments)/Borrowing on credit facilities, net
    
    
    
    
    

    
    
    
    
    
    (135,000
    )
    
    
    
    
    
    
    
    
    
    
    (135,000
    )Accounts receivable from affiliates
    
    
    (787,768
    )
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    787,768
    
    
    
    Accounts payable to affiliates
    
    
    
    
    

    
    161,669
    
    
    
    722,440
    
    
    
    (96,341
    )
    
    
    (787,768
    )
    
    
    Note payable to affiliate
    
    
    (27,896
    )
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    27,896
    
    
    
    Proceeds from issuance of ordinary shares
    
    
    7,642
    
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,642Proceeds from issuance of Senior Notes
    
    
    295,953
    
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    295,953Payments of dividends
    
    
    (10,997
    )
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,997
    )Repurchase 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
    )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
 28




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2005
 Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    NHC
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    118,840
    
    
    $
    88,971
    
    
    $
    104,014
    
    
    $
    136,674
    
    
    $
    (329,659
    )
    
    $
    118,840Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    3,189
    
    
    
    112,717
    
    
    
    
    
    
    
    115,906Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,835
    
    
    
    
    
    
    
    9,835Loss on sales of marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48
    
    
    
    
    
    
    
    48Equity in income of joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,388
    )
    
    
    
    
    
    
    (2,388
    )Distributions received from joint venture
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,194
    
    
    
    
    
    
    
    2,194Compensation expense from stock-based plans
    
    
    3,365
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,365Equity earnings in affiliates
    
    
    (117,215
    )
    
    
    (104,014
    )
    
    
    (108,430
    )
    
    
    
    
    
    
    329,659
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    207
    
    
    
    903
    
    
    
    
    
    
    
    1,110Changes in current assets and liabilities:Accounts receivable
    
    
    
    
    
    
    
    
    
    
    (734
    )
    
    
    (41,890
    )
    
    
    
    
    
    
    (42,624
    )Accounts receivable from affiliates
    
    
    (8,842
    )
    
    
    
    
    
    
    67,495
    
    
    
    
    
    
    
    (58,653
    )
    
    
    Other current assets
    
    
    19,918
    
    
    
    
    
    
    
    1,146
    
    
    
    (32,411
    )
    
    
    
    
    
    
    (11,347
    )Accounts payable
    
    
    
    
    
    
    
    
    
    
    (631
    )
    
    
    (7,695
    )
    
    
    
    
    
    
    (8,326
    )Accounts payable to affiliates
    
    
    
    
    
    
    17,062
    
    
    
    
    
    
    
    (75,715
    )
    
    
    58,653
    
    
    
    Other current liabilities
    
    
    (1,455
    )
    
    
    7,637
    
    
    
    (1,169
    )
    
    
    (1,429
    )
    
    
    
    
    
    
    3,584Net cash provided by operating
activities
    
    
    14,611
    
    
    
    9,656
    
    
    
    65,087
    
    
    
    100,843
    
    
    
    
    
    
    
    190,197CASH FLOWS FROM INVESTING ACTIVITIESAcquisitions and related capital upgrades
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (56,709
    )
    
    
    
    
    
    
    (56,709
    )Other capital expenditures
    
    
    
    
    
    
    
    
    
    
    (42
    )
    
    
    (52,334
    )
    
    
    
    
    
    
    (52,376
    )Deferred repair and maintenance expenditures
    
    
    
    
    
    
    
    
    
    
    (45
    )
    
    
    (29,033
    )
    
    
    
    
    
    
    (29,078
    )Proceeds from sales of property and equipment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    993
    
    
    
    
    
    
    
    993Repayments from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,656
    
    
    
    (9,656
    )
    
    
    Investment in marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,349
    )
    
    
    
    
    
    
    (23,349
    )Proceeds from sales and maturities of
marketable securities
    
    
    23,600
    
    
    
    
    
    
    
    
    
    
    
    83,079
    
    
    
    
    
    
    
    106,679Increase in restricted cash
    
    
    (28,920
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,920
    )Net cash used for investing activities
    
    
    (5,320
    )
    
    
    
    
    
    
    (87
    )
    
    
    (67,697
    )
    
    
    (9,656
    )
    
    
    (82,760
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments of borrowings on credit facility
    
    
    
    
    
    
    
    
    
    
    (65,000
    )
    
    
    
    
    
    
    
    
    
    
    (65,000
    )Payments of long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,108
    )
    
    
    
    
    
    
    (4,108
    )Payments to affiliates
    
    
    
    
    
    
    (9,656
    )
    
    
    
    
    
    
    
    
    
    
    9,656
    
    
    
    Proceeds from issuance of ordinary shares
    
    
    53,955
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,955Payments of dividends
    
    
    (5,429
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,429
    )Net cash provided by (used for) financing
activities
    
    
    48,526
    
    
    
    (9,656
    )
    
    
    (65,000
    )
    
    
    (4,108
    )
    
    
    9,656
    
    
    
    (20,582
    )INCREASE IN CASH
AND CASH EQUIVALENTS
    
    
    57,817
    
    
    
    
    
    
    
    
    
    
    
    29,038
    
    
    
    
    
    
    
    86,855CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    8,130
    
    
    
    
    
    
    
    
    
    
    
    50,660
    
    
    
    
    
    
    
    58,790CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    65,947
    
    
    $
    
    
    
    $
    
    
    
    $
    79,698
    
    
    $
    
    
    
    $
    145,645
 29




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 FORWARD-LOOKING STATEMENTS
  
 EXECUTIVE OVERVIEW
      Noble Clyde Boudreaux Noble Dave Beard Noble Danny Adkins Noble Roger Lewis Noble Hans Deul Noble Scott Marks
 30




---



##### Table of Contents



RESULTS OF OPERATIONS
 Hurricane Losses and Recoveries
  Renewal of 2006  2007 Marine and Energy Package, Excess Liability, and Protection and Indemnity
Programs
  For the Three Months Ended June 30, 2006 and 2005
 General
   International
    
    
    DomesticContract
    
    
    Contract
    
    
    EngineeringDrilling
    
    
    Drilling
    
    
    & ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Total(In thousands)Three Months Ended June 30, 2006Operating Revenues:Contract drilling services
    

    $
    338,750
    
    
    $
    137,589
    
    

    $
    
    
    
    $
    
    
    
    $
    476,339Reimbursables
    

    
    12,517
    
    
    
    2,704
    
    

    
    91
    
    
    
    5,328
    
    
    
    20,640Labor contract drilling services
    

    
    
    
    
    
    
    
    

    
    
    
    
    
    17,967
    
    
    
    17,967Engineering, consulting and other
    

    
    556
    
    
    
    105
    
    

    
    1,907
    
    
    
    
    
    
    
    2,568351,823
    
    
    
    140,398
    
    

    
    1,998
    
    
    
    23,295
    
    
    
    517,514Operating Costs and Expenses:Contract drilling services
    

    
    140,880
    
    
    
    39,741
    
    

    
    
    
    
    
    
    
    
    
    180,621Reimbursables
    

    
    10,639
    
    
    
    2,298
    
    

    
    78
    
    
    
    4,529
    
    
    
    17,544Labor contract drilling services
    

    
    
    
    
    
    
    
    

    
    
    
    
    
    15,687
    
    
    
    15,687Engineering, consulting and other
    

    
    352
    
    
    
    (46
    )
    

    
    7,167
    
    
    
    (197
    )
    
    
    7,276Depreciation and amortization
    

    
    49,328
    
    
    
    12,986
    
    

    
    190
    
    
    
    41
    
    
    
    62,545Selling, general and administrative
    

    
    5,877
    
    
    
    3,804
    
    

    
    631
    
    
    
    343
    
    
    
    10,655Hurricane losses and recoveries, net
    

    
    
    
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    207,076
    
    
    
    58,783
    
    

    
    8,066
    
    
    
    20,403
    
    
    
    294,328Operating Income
    

    $
    144,747
    
    
    $
    81,615
    
    

    $
    (6,068
    )
    
    $
    2,892
    
    
    $
    223,186
 31




---



##### Table of Contents



International
    
    
    DomesticContract
    
    
    Contract
    
    
    EngineeringDrilling
    
    
    Drilling
    
    
    & ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Total(In thousands)Three Months Ended June 30, 2005Operating Revenues:Contract drilling services
    

    $
    224,518
    
    
    $
    79,393
    
    

    $
    
    
    
    $
    
    
    
    $
    303,911Reimbursables
    

    
    7,933
    
    
    
    4,826
    
    

    
    1,884
    
    
    
    4,012
    
    
    
    18,655Labor contract drilling services
    

    
    
    
    
    
    
    
    

    
    
    
    
    
    17,531
    
    
    
    17,531Engineering, consulting and other
    

    
    761
    
    
    
    285
    
    

    
    2,865
    
    
    
    
    
    
    
    3,911233,212
    
    
    
    84,504
    
    

    
    4,749
    
    
    
    21,543
    
    
    
    344,008Operating Costs and Expenses:Contract drilling services
    

    
    113,107
    
    
    
    32,800
    
    

    
    
    
    
    
    
    
    
    
    145,907Reimbursables
    

    
    6,195
    
    
    
    4,602
    
    

    
    1,919
    
    
    
    3,830
    
    
    
    16,546Labor contract drilling services
    

    
    
    
    
    
    
    
    

    
    
    
    
    
    14,476
    
    
    
    14,476Engineering, consulting and other
    

    
    195
    
    
    
    134
    
    

    
    5,216
    
    
    
    188
    
    
    
    5,733Depreciation and amortization
    

    
    46,993
    
    
    
    11,770
    
    

    
    99
    
    
    
    667
    
    
    
    59,529Selling, general and administrative
    

    
    7,012
    
    
    
    2,513
    
    

    
    234
    
    
    
    340
    
    
    
    10,099173,502
    
    
    
    51,819
    
    

    
    7,468
    
    
    
    19,501
    
    
    
    252,290Operating Income
    

    $
    59,710
    
    
    $
    32,685
    
    

    $
    (2,719
    )
    
    $
    2,042
    
    
    $
    91,718
 32




---



##### 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 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005International (3):Jackups
    
    
    98
    %
    
    
    97
    %
    
    
    3,672
    
    
    
    3,266
    
    
    $
    72,601
    
    
    $
    51,747Semisubmersibles ->6,000(4)(7)
    
    
    100
    %
    
    
    100
    %
    
    
    182
    
    
    
    182
    
    
    
    145,698
    
    
    
    158,779Semisubmersibles -<6,000(5)
    
    
    100
    %
    
    
    100
    %
    
    
    91
    
    
    
    91
    
    
    
    196,709
    
    
    
    84,742Drillships
    
    
    100
    %
    
    
    95
    %
    
    
    273
    
    
    
    260
    
    
    
    96,313
    
    
    
    72,707Total International
    
    
    98
    %
    
    
    97
    %
    
    
    4,218
    
    
    
    3,799
    
    
    $
    80,311
    
    
    $
    59,099Domestic (6):Jackups
    
    
    N/A
    
    
    
    100
    %
    
    
    
    
    
    
    182
    
    
    $
    N/A
    
    
    $
    60,865Semisubmersibles ->6,000 (4)
    
    
    100
    %
    
    
    96
    %
    
    
    364
    
    
    
    348
    
    
    
    273,779
    
    
    
    125,866Semisubmersibles -<6,000 (5)
    
    
    100
    %
    
    
    100
    %
    
    
    168
    
    
    
    182
    
    
    
    128,147
    
    
    
    77,611Submersibles
    
    
    97
    %
    
    
    95
    %
    
    
    264
    
    
    
    258
    
    
    
    61,402
    
    
    
    40,267Total Domestic
    
    
    99
    %
    
    
    97
    %
    
    
    796
    
    
    
    970
    
    
    $
    172,950
    
    
    $
    81,848Total Company
    
    
    98
    %
    
    
    97
    %
    
    
    5,014
    
    
    
    4,769
    
    
    $
    95,011
    
    
    $
    63,726
 
 (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 or operated 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,
Mexico, the North Sea, Brazil, West Africa, India and the Mediterranean Sea.(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.(7)
    
    For discussion of factors affecting average dayrates, see International Contract
Drilling Services  Operating Revenues below. 33




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##### Table of Contents



International Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Contract drilling services
    
    $
    338,750
    
    
    $
    224,518
    
    
    $
    140,880
    
    
    $
    113,107Reimbursables (1)
    
    
    12,517
    
    
    
    7,933
    
    
    
    10,639
    
    
    
    6,195Engineering, consulting and other
    
    
    556
    
    
    
    761
    
    
    
    352
    
    
    
    195Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    49,328
    
    
    
    46,993Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    5,877
    
    
    
    7,012Total
    
    $
    351,823
    
    
    $
    233,212
    
    
    $
    207,076
    
    
    $
    173,502
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost 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 Harvey Duhaney Noble Mark Burns Noble Jimmy Puckett Noble Lewis Dugger Noble Tom Jobe Noble Eddie Paul
 Operating Costs and Expenses.
 34




---



##### Table of Contents



Domestic Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Contract drilling services
    
    $
    137,589
    
    
    $
    79,393
    
    
    $
    39,741
    
    
    $
    32,800Reimbursables (1)
    
    
    2,704
    
    
    
    4,826
    
    
    
    2,298
    
    
    
    4,602Engineering, consulting and other
    
    
    105
    
    
    
    285
    
    
    
    (46
    )
    
    
    134Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    12,986
    
    
    
    11,770Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    3,804
    
    
    
    2,513Total
    
    $
    140,398
    
    
    $
    84,504
    
    
    $
    58,783
    
    
    $
    51,819
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost 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 Paul Romano Noble Lester Pettus
 Operating Costs and Expenses .
 35




---



##### Table of Contents



Engineering & Consulting Services
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Engineering, consulting and other
    
    
    $ 1,907
    
    
    
    $ 2,865
    
    
    
    $ 7,167
    
    
    
    $ 5,216Reimbursables (1)
    
    
    91
    
    
    
    1,884
    
    
    
    78
    
    
    
    1,919Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    190
    
    
    
    99Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    631
    
    
    
    234Total
    
    
    $ 1,998
    
    
    
    $ 4,749
    
    
    
    $ 8,066
    
    
    
    $ 7,468
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost 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.
 Operating Costs and Expenses .
 Other
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Labor contract drilling services
    
    
    $ 17,967
    
    
    
    $ 17,531
    
    
    
    $ 15,687
    
    
    
    $ 14,476Reimbursables (1)
    
    
    5,328
    
    
    
    4,012
    
    
    
    4,529
    
    
    
    3,830Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    (197
    )
    
    
    188Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    41
    
    
    
    667Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    343
    
    
    
    340Total
    
    
    $ 23,295
    
    
    
    $ 21,543
    
    
    
    $ 20,403
    
    
    
    $ 19,501
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost 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 .
 36




---



##### Table of Contents



Operating Costs and Expenses .
 Other Items
 Selling, General and Administrative Expenses . Share-Based Payment
 Interest Expense .
 Other, net.
 Income Tax Provision .
 For the Six Months Ended June 30, 2006 and 2005
 General
  37




---



##### Table of Contents



International
    
    
    DomesticContract
    
    
    Contract
    
    
    EngineeringDrilling
    
    
    Drilling
    
    
    & ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Total(In thousands)Six Months Ended June 30, 2006Operating Revenues:Contract drilling services
    
    
    $ 620,906
    
    
    
    $ 273,065
    
    
    
    $       
    
    
    
    $        
    
    
    
    $ 893,971Reimbursables
    
    
    24,498
    
    
    
    8,933
    
    
    
    111
    
    
    
    10,170
    
    
    
    43,712Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,198
    
    
    
    35,198Engineering, consulting and other
    
    
    1,005
    
    
    
    268
    
    
    
    5,275
    
    
    
    
    
    
    
    6,548646,409
    
    
    
    282,266
    
    
    
    5,386
    
    
    
    45,368
    
    
    
    979,429Operating Costs and Expenses:Contract drilling services
    
    
    270,808
    
    
    
    77,718
    
    
    
    
    
    
    
    
    
    
    
    348,526Reimbursables
    
    
    19,896
    
    
    
    8,371
    
    
    
    88
    
    
    
    9,241
    
    
    
    37,596Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,584
    
    
    
    30,584Engineering, consulting and other
    
    
    476
    
    
    
    (156
    )
    
    
    10,587
    
    
    
    (201
    )
    
    
    10,706Depreciation and amortization
    
    
    95,424
    
    
    
    26,129
    
    
    
    273
    
    
    
    80
    
    
    
    121,906Selling, general and administrative
    
    
    11,451
    
    
    
    7,110
    
    
    
    798
    
    
    
    1,581
    
    
    
    20,940Hurricane losses and recoveries, net
    
    
    
    
    
    
    (4,404
    )
    
    
    
    
    
    
    
    
    
    
    (4,404
    )398,055
    
    
    
    114,768
    
    
    
    11,746
    
    
    
    41,285
    
    
    
    565,854Operating Income
    
    
    $ 248,354
    
    
    
    $ 167,498
    
    
    
    $  (6,360
    )
    
    
    $   4,083
    
    
    
    $ 413,575
 International
    
    
    DomesticContract
    
    
    Contract
    
    
    EngineeringDrilling
    
    
    Drilling
    
    
    & ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Total(In thousands)Six Months Ended June 30, 2005Operating Revenues:Contract drilling services
    
    
    $ 429,680
    
    
    
    $ 136,635
    
    
    
    $        
    
    
    
    $        
    
    
    
    $ 566,315Reimbursables
    
    
    17,267
    
    
    
    8,162
    
    
    
    8,910
    
    
    
    8,818
    
    
    
    43,157Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,672
    
    
    
    35,672Engineering, consulting and other
    
    
    1,166
    
    
    
    518
    
    
    
    6,946
    
    
    
    559
    
    
    
    9,189448,113
    
    
    
    145,315
    
    
    
    15,856
    
    
    
    45,049
    
    
    
    654,333Operating Costs and Expenses:Contract drilling services
    
    
    227,525
    
    
    
    62,404
    
    
    
    
    
    
    
    
    
    
    
    289,929Reimbursables
    
    
    14,107
    
    
    
    7,807
    
    
    
    8,957
    
    
    
    8,581
    
    
    
    39,452Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,665
    
    
    
    29,665Engineering, consulting and other
    
    
    347
    
    
    
    306
    
    
    
    10,251
    
    
    
    717
    
    
    
    11,621Depreciation and amortization
    
    
    91,336
    
    
    
    22,783
    
    
    
    197
    
    
    
    1,590
    
    
    
    115,906Selling, general and administrative
    
    
    12,081
    
    
    
    4,688
    
    
    
    468
    
    
    
    680
    
    
    
    17,917345,396
    
    
    
    97,988
    
    
    
    19,873
    
    
    
    41,233
    
    
    
    504,490Operating Income
    
    
    $ 102,717
    
    
    
    $  47,327
    
    
    
    $  (4,017
    )
    
    
    $   3,816
    
    
    
    $ 149,843
 38




---



##### 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 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005International (3):Jackups
    
    
    99
    %
    
    
    96
    %
    
    
    7,182
    
    
    
    6,352
    
    
    $
    68,831
    
    
    $
    51,461Semisubmersibles ->6,000(4)(7)
    
    
    100
    %
    
    
    100
    %
    
    
    362
    
    
    
    362
    
    
    
    117,636
    
    
    
    151,951Semisubmersibles -<6,000(5)
    
    
    100
    %
    
    
    93
    %
    
    
    181
    
    
    
    168
    
    
    
    155,299
    
    
    
    74,507Drillships
    
    
    100
    %
    
    
    81
    %
    
    
    543
    
    
    
    440
    
    
    
    100,229
    
    
    
    80,175Total International
    
    
    99
    %
    
    
    95
    %
    
    
    8,268
    
    
    
    7,322
    
    
    $
    75,098
    
    
    $
    58,683Domestic (6):Jackups
    
    
    86
    %
    
    
    100
    %
    
    
    155
    
    
    
    362
    
    
    $
    101,112
    
    
    $
    58,356Semisubmersibles ->6,000 (4)
    
    
    100
    %
    
    
    85
    %
    
    
    724
    
    
    
    618
    
    
    
    257,759
    
    
    
    116,499Semisubmersibles -<6,000 (5)
    
    
    100
    %
    
    
    100
    %
    
    
    348
    
    
    
    362
    
    
    
    126,097
    
    
    
    65,735Submersibles
    
    
    82
    %
    
    
    97
    %
    
    
    444
    
    
    
    528
    
    
    
    60,228
    
    
    
    37,343Total Domestic
    
    
    93
    %
    
    
    94
    %
    
    
    1,671
    
    
    
    1,870
    
    
    $
    163,462
    
    
    $
    73,067Total Company
    
    
    98
    %
    
    
    95
    %
    
    
    9,939
    
    
    
    9,192
    
    
    $
    89,946
    
    
    $
    61,610
 
 (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 or operated 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, Mexico,
the North Sea, Brazil, West Africa, India and the Mediterranean Sea.(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.(7)
    
    For discussion of factors affecting average dayrates, see International Contract Drilling
Services  Operating Revenues below. 39




---



##### Table of Contents



International Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesSix Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Contract drilling services
    
    $
    620,906
    
    
    $
    429,680
    
    
    $
    270,808
    
    
    $
    227,525Reimbursables (1)
    
    
    24,498
    
    
    
    17,267
    
    
    
    19,896
    
    
    
    14,107Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Engineering, consulting and other
    
    
    1,005
    
    
    
    1,166
    
    
    
    476
    
    
    
    347Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    95,424
    
    
    
    91,336Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    11,451
    
    
    
    12,081Total
    
    $
    646,409
    
    
    $
    448,113
    
    
    $
    398,055
    
    
    $
    345,396
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost 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 Harvey Duhaney Noble Mark Burns Noble Tom Jobe Noble Eddie Paul
 Operating Costs and Expenses.
 40




---



##### Table of Contents



Domestic Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesSix Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Contract drilling services
    
    $
    273,065
    
    
    $
    136,635
    
    
    $
    77,718
    
    
    $
    62,404Reimbursables (1)
    
    
    8,933
    
    
    
    8,162
    
    
    
    8,371
    
    
    
    7,807Engineering, consulting and other
    
    
    268
    
    
    
    518
    
    
    
    (156
    )
    
    
    306Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    26,129
    
    
    
    22,783Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    7,110
    
    
    
    4,688Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    (4,404
    )
    
    
    Total
    
    $
    282,266
    
    
    $
    145,315
    
    
    $
    114,768
    
    
    $
    97,988
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost 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 Joe Alford Noble Paul Romano
 Operating Costs and Expenses .
  41




---



##### Table of Contents



Engineering & Consulting Services
  Operating CostsOperating Revenues
    
    
    and ExpensesSix Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Engineering, consulting and other
    
    $
    5,275
    
    
    $
    6,946
    
    
    $
    10,587
    
    
    $
    10,251Reimbursables (1)
    
    
    111
    
    
    
    8,910
    
    
    
    88
    
    
    
    8,957Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    273
    
    
    
    197Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    798
    
    
    
    468Total
    
    $
    5,386
    
    
    $
    15,856
    
    
    $
    11,746
    
    
    $
    19,873
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost 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.
 Operating Costs and Expenses .
 Other
  Operating CostsOperating Revenues
    
    
    and ExpensesSix Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Labor contract drilling services
    
    $
    35,198
    
    
    $
    35,672
    
    
    $
    30,584
    
    
    $
    29,665Reimbursables (1)
    
    
    10,170
    
    
    
    8,818
    
    
    
    9,241
    
    
    
    8,581Engineering, consulting and other
    
    
    
    
    
    
    559
    
    
    
    (201
    )
    
    
    717Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    80
    
    
    
    1,590Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    1,581
    
    
    
    680Total
    
    $
    45,368
    
    
    $
    45,049
    
    
    $
    41,285
    
    
    $
    41,233
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost 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 .
 42




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##### Table of Contents



Operating Costs and Expenses .
 Other Items
 Selling, General and Administrative Expenses .
 Interest Expense .
 Other, net.
 Income Tax Provision .
 
 LIQUIDITY AND CAPITAL RESOURCES
 Overview
       43




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##### Table of Contents



Capital Expenditures
  Noble Clyde
Boudreaux Noble Dave Beard Noble Roger Lewis Noble Hans Deul Noble Danny Adkins Noble Paul
Wolff
 Noble Dave Beard Noble Clyde Boudreaux Noble Roger Lewis Noble Hans Deul Noble Danny Adkins
 Noble Scott Marks
    Investment in Smedvig
  44




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##### Table of Contents



Credit Facilities and Long-Term Debt
     45




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##### Table of Contents



ACCOUNTING PRONOUNCEMENTS
 Employers Accounting for Defined Benefit Pension and Other Postretirement
Plansan amendment of SFAS Nos. 87,88,106, and 132(R)
 Accounting for Uncertainty in Income
Taxes
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     46




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 ITEM 1. LEGAL PROCEEDINGS
  47




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##### Table of Contents



ITEM 1A. RISK FACTORS
  We may have difficulty obtaining insurance in the future and we cannot fully insure against
all of the risk and hazards we face.
 48




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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
    
    Plans or Programs (2)
    
    Plans or Programs (2)April 1  April 30, 2006
    
    
    18,107
    (1)
    
    $
    81.77
    
    
    
    -
    
    
    
    9,062,000May 1  May 31, 2006
    
    
    100,000
    
    
    $
    67.82
    
    
    
    100,000
    
    
    
    8,962,000June 1  June 30, 2006
    
    
    900,000
    
    
    $
    68.80
    
    
    
    900,000
    
    
    
    8,062,000
 
 (1)
    
    Consists of ordinary shares surrendered to the Company by employees for withholding
taxes upon the vesting of restricted stock.(2)
    
    All share repurchases were made in the open market and were effected pursuant to the share
repurchase program which our Board of Directors authorized and adopted and which we announced
on January 31, 2002. The program authorization covers an aggregate of 15,000,000 ordinary
shares, and has no date of expiration. 
 ITEM 6. EXHIBITS
  49




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##### Table of Contents



SIGNATURES
  NOBLE CORPORATIONDATE:  August 8, 2006
    By:
    /s/ MARK A. JACKSONMark A. JacksonPresident and Chief Operating Officer and acting Chief Financial Officer
(Duly authorized officer and principal financial officer) 50




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##### Table of Contents



INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    EXHIBIT4.1
    
    Indenture, dated as of May 26, 2006, between Noble Corporation, as
Issuer, and JPMorgan Chase Bank, National Association, as Trustee (filed as
Exhibit 4.1 to the Registrants Current Report on Form 8-K filed on May 26, 2006
and incorporated herein by reference).4.2
    
    First Supplemental Indenture, dated as of May 26, 2006, between Noble
Corporation, as Issuer, Noble Drilling Corporation, as Guarantor, and JPMorgan
Chase Bank, National Association, as Trustee (filed as Exhibit 4.2 to the
Registrants Current Report on Form 8-K filed on May 26, 2006 and incorporated
herein by reference).4.3
    
    Specimen Note for the 5.875% Senior Notes due 2013 of Noble Corporation
(filed as Exhibit 4.3 to the Registrants Current Report on Form 8-K filed on
May 26, 2006 and incorporated herein by reference).31.1
    
    Certification of James C. Day Pursuant to SEC Rule 13a-14(a) or Rule 15d-14(a).31.2
    
    Certification of Mark A. Jackson Pursuant to SEC Rule 13a-14(a) or Rule
15d-14(a).32.1+
    
    Certification of James C. Day 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 Mark A. Jackson Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 +
    
    Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K. 51