##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-31306
 NOBLE CORPORATION
  Cayman Islands(State or other jurisdiction of incorporation or organization)
    
    98-0366361(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
    
    Smaller reporting company o
 Yes o No þ




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##### 



TABLE OF CONTENTS
 PAGEPART I FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS
    
    
    3Consolidated Balance Sheets as of September 30, 2008 and December 31,
2007
    
    
    3Consolidated Statements of Income for the three and nine months ended
September 30, 2008 and 2007
    
    
    4Consolidated Statements of Cash Flows for the nine months ended
September 30, 2008 and 2007
    
    
    5Consolidated Statements of Shareholders Equity for the nine months
ended September 30, 2008
    
    
    6Consolidated Statements of Comprehensive Income for the three and
nine months ended September 30, 2008 and 2007
    
    
    7Notes to Consolidated Financial Statements
    
    
    8ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    28ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    40ITEM 4. CONTROLS AND PROCEDURES
    
    
    41PART II OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    42ITEM 1A. RISK FACTORS
    
    
    42ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    45ITEM 6. EXHIBITS
    
    
    45SIGNATURES
    
    
    46INDEX TO EXHIBITS
    
    
    47Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
   September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    213,653
    
    
    $
    161,058Accounts receivable
    
    
    662,178
    
    
    
    613,115Insurance receivables
    
    
    
    
    
    
    39,066Prepaid expenses
    
    
    40,110
    
    
    
    20,721Other current assets
    
    
    48,514
    
    
    
    26,231Total current assets
    
    
    964,455
    
    
    
    860,191PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    7,115,513
    
    
    
    6,354,782Other
    
    
    100,961
    
    
    
    80,1697,216,474
    
    
    
    6,434,951Accumulated depreciation
    
    
    (1,821,411
    )
    
    
    (1,639,035
    )5,395,063
    
    
    
    4,795,916OTHER ASSETS
    
    
    251,639
    
    
    
    219,899$
    6,611,157
    
    
    $
    5,876,006LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    25,352
    
    
    $
    10,334Accounts payable
    
    
    305,718
    
    
    
    198,395Accrued payroll and related costs
    
    
    94,814
    
    
    
    115,914Taxes payable
    
    
    70,030
    
    
    
    85,641Interest payable
    
    
    7,434
    
    
    
    9,951Other current liabilities
    
    
    51,808
    
    
    
    72,537Total current liabilities
    
    
    555,156
    
    
    
    492,772LONG-TERM DEBT
    
    
    701,519
    
    
    
    774,182DEFERRED INCOME TAXES
    
    
    296,250
    
    
    
    240,621OTHER LIABILITIES
    
    
    100,637
    
    
    
    65,7051,653,562
    
    
    
    1,573,280COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    (5,101
    )
    
    
    (5,596
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share; 400,000 shares authorized;
263,807 and 268,223 shares issued and outstanding at
September 30, 2008 and December 31, 2007, respectively
    
    
    26,381
    
    
    
    26,822Capital in excess of par value
    
    
    439,679
    
    
    
    683,697Retained earnings
    
    
    4,511,660
    
    
    
    3,602,870Accumulated other comprehensive loss
    
    
    (15,024
    )
    
    
    (5,067
    )4,962,696
    
    
    
    4,308,322$
    6,611,157
    
    
    $
    5,876,006
   3




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007OPERATING REVENUESContract drilling services
    
    $
    835,198
    
    
    $
    718,756
    
    
    $
    2,416,312
    
    
    $
    1,953,175Reimbursables
    
    
    18,087
    
    
    
    31,478
    
    
    
    71,509
    
    
    
    91,229Labor contract drilling services
    
    
    8,197
    
    
    
    40,622
    
    
    
    47,346
    
    
    
    116,342Engineering, consulting and other
    
    
    499
    
    
    
    420
    
    
    
    1,180
    
    
    
    2,953861,981
    
    
    
    791,276
    
    
    
    2,536,347
    
    
    
    2,163,699OPERATING COSTS AND EXPENSESContract drilling services
    
    
    253,729
    
    
    
    227,276
    
    
    
    746,117
    
    
    
    636,168Reimbursables
    
    
    16,494
    
    
    
    27,675
    
    
    
    63,786
    
    
    
    79,829Labor contract drilling services
    
    
    5,410
    
    
    
    32,324
    
    
    
    37,294
    
    
    
    93,181Engineering, consulting and other
    
    
    
    
    
    
    6,073
    
    
    
    
    
    
    
    17,369Depreciation and amortization
    
    
    92,671
    
    
    
    77,992
    
    
    
    263,406
    
    
    
    210,380Selling, general and administrative
    
    
    16,027
    
    
    
    24,617
    
    
    
    56,967
    
    
    
    59,145Hurricane losses and recoveries, net
    
    
    10,000
    
    
    
    1,600
    
    
    
    10,000
    
    
    
    1,600Gain on disposal of assets, net
    
    
    
    
    
    
    
    
    
    
    (35,521
    )
    
    
    394,331
    
    
    
    397,557
    
    
    
    1,142,049
    
    
    
    1,097,672OPERATING INCOME
    
    
    467,650
    
    
    
    393,719
    
    
    
    1,394,298
    
    
    
    1,066,027OTHER INCOME (EXPENSE)Interest expense, net of amount capitalized
    
    
    (601
    )
    
    
    (9,146
    )
    
    
    (2,432
    )
    
    
    (11,881
    )Interest income and other, net
    
    
    2,304
    
    
    
    6,954
    
    
    
    7,013
    
    
    
    8,624INCOME BEFORE INCOME TAXES
    
    
    469,353
    
    
    
    391,527
    
    
    
    1,398,879
    
    
    
    1,062,770INCOME TAX PROVISION
    
    
    (86,831
    )
    
    
    (73,247
    )
    
    
    (256,451
    )
    
    
    (204,139
    )NET INCOME
    
    $
    382,522
    
    
    $
    318,280
    
    
    $
    1,142,428
    
    
    $
    858,631NET INCOME PER SHARE:Basic
    
    $
    1.44
    
    
    $
    1.19
    
    
    $
    4.30
    
    
    $
    3.22Diluted
    
    $
    1.43
    
    
    $
    1.18
    
    
    $
    4.26
    
    
    $
    3.19DIVDENDS PER SHARE
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    0.87
    
    
    $
    0.12WEIGHTED-AVERAGE SHARES OUTSTANDINGBasic
    
    
    264,746
    
    
    
    266,684
    
    
    
    265,883
    
    
    
    266,575Diluted
    
    
    267,041
    
    
    
    269,476
    
    
    
    268,266
    
    
    
    269,270
 .
  4




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
   Nine Months Ended September 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    1,142,428
    
    
    $
    858,631Adjustments to reconcile net income to net cash from operating activities:Depreciation and amortization
    
    
    263,406
    
    
    
    210,380Impairment loss on assets
    
    
    
    
    
    
    10,189Hurricane losses and recoveries, net
    
    
    10,000
    
    
    
    1,600Deferred income tax provision
    
    
    14,102
    
    
    
    13,197Share-based compensation expense
    
    
    28,274
    
    
    
    25,951Pension contributions
    
    
    (17,445
    )
    
    
    (37,615
    )Gain on disposal of assets, net
    
    
    (35,521
    )
    
    
    Other, net
    
    
    (3,935
    )
    
    
    22,427Other changes in current assets and liabilities:Accounts receivable
    
    
    (49,063
    )
    
    
    (111,363
    )Hurricane insurance receivables
    
    
    17,319
    
    
    
    Other current assets
    
    
    (43,891
    )
    
    
    18,535Accounts payable
    
    
    (2,406
    )
    
    
    (36,914
    )Other current liabilities
    
    
    8,397
    
    
    
    20,367Net cash from operating activities
    
    
    1,331,665
    
    
    
    995,385CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    (563,349
    )
    
    
    (541,976
    )Other capital expenditures
    
    
    (243,843
    )
    
    
    (330,707
    )Major maintenance expenditures
    
    
    (72,918
    )
    
    
    (69,756
    )Accrued capital expenditures
    
    
    92,719
    
    
    
    55,940Hurricane insurance receivables
    
    
    21,747
    
    
    
    Proceeds from disposal of assets
    
    
    39,134
    
    
    
    4,643Net cash from investing activities
    
    
    (726,510
    )
    
    
    (881,856
    )CASH FLOWS FROM FINANCING ACTIVITIESShort-term debt borrowing
    
    
    
    
    
    
    685,000Short-term debt payment
    
    
    
    
    
    
    (685,000
    )Borrowings on bank credit facilities
    
    
    
    
    
    
    220,000Payments on bank credit facilities
    
    
    (50,000
    )
    
    
    (120,000
    )Payments of other long-term debt
    
    
    (7,682
    )
    
    
    (7,158
    )Net proceeds from employee stock transactions
    
    
    10,070
    
    
    
    24,713Dividends paid
    
    
    (233,638
    )
    
    
    (21,528
    )Repurchases of ordinary shares
    
    
    (271,310
    )
    
    
    (120,687
    )Net cash from financing activities
    
    
    (552,560
    )
    
    
    (24,660
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    52,595
    
    
    
    88,869CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    161,058
    
    
    
    61,710CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    213,653
    
    
    $
    150,579
   5




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
   AccumulatedCapital in
    
    
    
    
    
    
    Other
    
    
    TotalOrdinary
    
    
    Excess of
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Par Value
    
    
    Par Value
    
    
    Earnings
    
    
    Loss
    
    
    EquityBalance at December 31, 2007
    
    
    268,223
    
    
    $
    26,822
    
    
    $
    683,697
    
    
    $
    3,602,870
    
    
    $
    (5,067
    )
    
    $
    4,308,322Share-based compensation:Share-based compensation
    
    
    1,145
    
    
    
    114
    
    
    
    28,160
    
    
    
    
    
    
    
    
    
    
    
    28,274Contribution to employee
benefit plans
    
    
    10
    
    
    
    1
    
    
    
    621
    
    
    
    
    
    
    
    
    
    
    
    622Exercise of stock options
    
    
    848
    
    
    
    86
    
    
    
    18,019
    
    
    
    
    
    
    
    
    
    
    
    18,105Tax benefit of stock option
exercised
    
    
    
    
    
    
    
    
    
    
    4,895
    
    
    
    
    
    
    
    
    
    
    
    4,895Restricted shares surrendered for
withholding taxes or
forfeited
    
    
    (454
    )
    
    
    (46
    )
    
    
    (7,989
    )
    
    
    
    
    
    
    
    
    
    
    (8,035
    )Repurchases of ordinary shares
    
    
    (5,965
    )
    
    
    (596
    )
    
    
    (287,724
    )
    
    
    
    
    
    
    
    
    
    
    (288,320
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,142,428
    
    
    
    
    
    
    
    1,142,428Dividends paid ($0.87 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (233,638
    )
    
    
    
    
    
    
    (233,638
    )Other comprehensive loss, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,957
    )
    
    
    (9,957
    )Balance at September 30, 2008
    
    
    263,807
    
    
    $
    26,381
    
    
    $
    439,679
    
    
    $
    4,511,660
    
    
    $
    (15,024
    )
    
    $
    4,962,696
   6




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NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
   Three Months Ended September 30,2008
    
    
    2007NET INCOME
    
    $
    382,522
    
    
    $
    318,280OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    (4,259
    )
    
    
    2,225Foreign currency forward contract activity
    
    
    (663
    )
    
    
    1,414Amortization of deferred pension plan amounts
    
    
    169
    
    
    
    504Other comprehensive income (loss)
    
    
    (4,753
    )
    
    
    4,143COMPREHENSIVE INCOME
    
    $
    377,769
    
    
    $
    322,423
 Nine Months Ended September 30,2008
    
    
    2007NET INCOME
    
    $
    1,142,428
    
    
    $
    858,631OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    (8,323
    )
    
    
    4,777Foreign currency forward contract activity
    
    
    (2,219
    )
    
    
    363Pension plan actuarial loss
    
    
    
    
    
    
    (5,580
    )Amortization of deferred pension plan amounts
    
    
    585
    
    
    
    1,288Other comprehensive income (loss)
    
    
    (9,957
    )
    
    
    848COMPREHENSIVE INCOME
    
    $
    1,132,471
    
    
    $
    859,479
 .
  7




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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 1  BASIS OF PRESENTATION
  two-for-one
   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 2  NET INCOME PER SHARE
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Weighted-average shares outstanding  basic
    
    
    264,746
    
    
    
    266,684
    
    
    
    265,883
    
    
    
    266,575Effect of potentially dilutive shares:Stock options and awards
    
    
    2,295
    
    
    
    2,792
    
    
    
    2,383
    
    
    
    2,695Weighted-average shares outstanding  diluted
    
    
    267,041
    
    
    
    269,476
    
    
    
    268,266
    
    
    
    269,270Net income  basic and diluted
    
    $
    382,522
    
    
    $
    318,280
    
    
    $
    1,142,428
    
    
    $
    858,631Net income per share:Basic
    
    $
    1.44
    
    
    $
    1.19
    
    
    $
    4.30
    
    
    $
    3.22Diluted
    
    $
    1.43
    
    
    $
    1.18
    
    
    $
    4.26
    
    
    $
    3.19
  NOTE 3  PROPERTY AND EQUIPMENT
    NOTE 4  ASSET DISPOSALS
   9




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 5  DEBT
  September 30,
    
    
    December 31,2008
    
    
    2007Credit Facility
    
    $
    50,000
    
    
    $
    100,0006.95% Senior Notes due 2009
    
    
    149,996
    
    
    
    149,9877.50% Senior Notes due 2019
    
    
    201,695
    
    
    
    201,6955.875% Senior Notes due 2013
    
    
    299,828
    
    
    
    299,800Project Financing  Thompson Notes
    
    
    25,352
    
    
    
    33,034Total Debt
    
    
    726,871
    
    
    
    784,516Current Maturities
    
    
    (25,352
    )
    
    
    (10,334
    )Long-term Debt
    
    $
    701,519
    
    
    $
    774,182
    NOTE 6  INCOME TAXES
    10




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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 7  EMPLOYEE BENEFIT PLANS
  Three Months Ended September 30,2008
    
    
    2007International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    1,030
    
    
    $
    1,574
    
    
    $
    910
    
    
    $
    1,665Interest cost
    
    
    1,057
    
    
    
    1,615
    
    
    
    959
    
    
    
    1,495Return on plan assets
    
    
    (1,463
    )
    
    
    (2,228
    )
    
    
    (1,348
    )
    
    
    (1,650
    )Amortization of prior service cost
    
    
    
    
    
    
    97
    
    
    
    
    
    
    
    99Amortization of transition obligation
    
    
    35
    
    
    
    
    
    
    
    18
    
    
    
    Recognized net actuarial loss
    
    
    16
    
    
    
    88
    
    
    
    251
    
    
    
    380Net pension expense
    
    $
    675
    
    
    $
    1,146
    
    
    $
    790
    
    
    $
    1,989
 Nine Months Ended September 30,2008
    
    
    2007International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    3,871
    
    
    $
    4,721
    
    
    $
    3,845
    
    
    $
    4,995Interest cost
    
    
    3,557
    
    
    
    4,844
    
    
    
    3,131
    
    
    
    4,485Return on plan assets
    
    
    (4,841
    )
    
    
    (6,682
    )
    
    
    (3,610
    )
    
    
    (4,950
    )Amortization of prior service cost
    
    
    
    
    
    
    293
    
    
    
    
    
    
    
    297Amortization of transition obligation
    
    
    121
    
    
    
    
    
    
    
    139
    
    
    
    Recognized net actuarial loss
    
    
    96
    
    
    
    262
    
    
    
    359
    
    
    
    1,140Net pension expense
    
    $
    2,804
    
    
    $
    3,438
    
    
    $
    3,864
    
    
    $
    5,967
    NOTE 8  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   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.)
  Cash Flow Hedges
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net unrealized gain at beginning of period
    
    $
    663
    
    
    $
    2,166
    
    
    $
    2,219
    
    
    $
    3,217Activity during period:Settlement of forward contracts outstanding at beginning
of period
    
    
    (663
    )
    
    
    (939
    )
    
    
    (2,219
    )
    
    
    (2,450
    )Net unrealized gain on outstanding forward contracts
    
    
    
    
    
    
    2,353
    
    
    
    
    
    
    
    2,813Net unrealized gain at end of period
    
    $
    
    
    
    $
    3,580
    
    
    $
    
    
    
    $
    3,580
 Fair Value Hedges
 Accounting for Derivative Instruments and Hedging Activities
 NOTE 9  FAIR VALUE OF FINANCIAL INSTRUMENTS
 Fair
Value Measurements Partial Deferral of the
Effective Date of Statement 157
   12




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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.)
  September 30, 2008
    
    
    December 31, 2007Estimated Fair ValueMeasurementsQuoted
    
    
    SignificantPrices in
    
    
    Other
    
    
    SignificantActive
    
    
    Observable
    
    
    UnobservableCarrying
    
    
    Markets
    
    
    Inputs
    
    
    Inputs
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    Amount
    
    
    Fair ValueAssetsMarketable securities
    
    $
    12,592
    
    
    $
    12,592
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    LiabilitiesForward contracts
    
    $
    3,802
    
    
    $
    
    
    
    $
    3,802
    
    
    $
    
    
    
    $
    2,219
    
    
    $
    2,219
 short-term.
 The Fair Value Option for Financial Assets and
Liabilities
 NOTE 10  COMMITMENTS AND CONTINGENCIES
   13




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
        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.)
    Internal Investigation
      15




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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.)
     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 11  SEGMENT AND RELATED INFORMATION
   Three Months Ended September 30,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractDrilling
    
    
    
    
    
    
    
    
    
    
    DrillingServices
    
    
    Other
    
    
    Total
    
    
    Services
    
    
    Other
    
    
    TotalRevenues from external customers
    
    $
    852,519
    
    
    $
    9,462
    
    
    $
    861,981
    
    
    $
    743,391
    
    
    $
    47,885
    
    
    $
    791,276Depreciation and amortization
    
    
    90,923
    
    
    
    1,748
    
    
    
    92,671
    
    
    
    75,627
    
    
    
    2,365
    
    
    
    77,992Segment operating income (loss)
    
    
    466,377
    
    
    
    1,273
    
    
    
    467,650
    
    
    
    393,949
    
    
    
    (230
    )
    
    
    393,719Interest expense, net of amount
capitalized
    
    
    581
    
    
    
    20
    
    
    
    601
    
    
    
    1,056
    
    
    
    8,090
    
    
    
    9,146Income tax provision (benefit)
    
    
    75,179
    
    
    
    11,652
    
    
    
    86,831
    
    
    
    73,463
    
    
    
    (216
    )
    
    
    73,247Segment profit (loss)
    
    
    392,224
    
    
    
    (9,702
    )
    
    
    382,522
    
    
    
    318,595
    
    
    
    (315
    )
    
    
    318,280Total assets (at end of period)
    
    
    6,197,987
    
    
    
    413,170
    
    
    
    6,611,157
    
    
    
    5,122,966
    
    
    
    385,947
    
    
    
    5,508,913Capital expenditures
    
    
    347,207
    
    
    
    8,010
    
    
    
    355,217
    
    
    
    338,502
    
    
    
    24,777
    
    
    
    363,279
 Nine Months Ended September 30,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractDrilling
    
    
    
    
    
    
    
    
    
    
    DrillingServices
    
    
    Other
    
    
    Total
    
    
    Services
    
    
    Other
    
    
    TotalRevenues from external customers
    
    $
    2,475,096
    
    
    $
    61,251
    
    
    $
    2,536,347
    
    
    $
    2,018,041
    
    
    $
    145,658
    
    
    $
    2,163,699Depreciation and amortization
    
    
    258,344
    
    
    
    5,062
    
    
    
    263,406
    
    
    
    203,544
    
    
    
    6,836
    
    
    
    210,380Segment operating income
    
    
    1,354,405
    
    
    
    39,893
    
    
    
    1,394,298
    
    
    
    1,064,587
    
    
    
    1,440
    
    
    
    1,066,027Interest expense, net of amount
capitalized
    
    
    2,184
    
    
    
    248
    
    
    
    2,432
    
    
    
    3,398
    
    
    
    8,483
    
    
    
    11,881Income tax provision (benefit)
    
    
    247,619
    
    
    
    8,832
    
    
    
    256,451
    
    
    
    210,893
    
    
    
    (6,754
    )
    
    
    204,139Segment profit
    
    
    1,109,827
    
    
    
    32,601
    
    
    
    1,142,428
    
    
    
    849,888
    
    
    
    8,743
    
    
    
    858,631Total assets (at end of period)
    
    
    6,197,987
    
    
    
    413,170
    
    
    
    6,611,157
    
    
    
    5,122,966
    
    
    
    385,947
    
    
    
    5,508,913Capital expenditures
    
    
    849,226
    
    
    
    30,884
    
    
    
    880,110
    
    
    
    840,168
    
    
    
    102,271
    
    
    
    942,439
  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 12  ACCOUNTING PRONOUNCEMENTS
 Noncontrolling Interests in Consolidated
Financial Statements  An Amendment of ARB No. 51
 Business Combinations
 
    
    transaction costs will generally be expensed as incurred;
 
    
    contingent consideration will be recognized at fair value on the acquisition date;
 
    
    acquired contingent liabilities will be recorded at fair value at the acquisition date
and subsequently measured at either the higher of such amount or the amount determined
under existing guidance for non-acquired contingencies;
 
    
    fair value of the purchase price, including the issuance of equity securities, will be
determined on the acquisition date (closing) instead of announcement date;
 
    
    restructuring costs associated with a business combination will generally be expensed
subsequent to the acquisition date; and
 
    
    changes in deferred tax asset valuation allowances and income tax uncertainties after
the acquisition date generally will affect income tax expense.
  Disclosures about Derivative Instruments and
Hedging Activities
 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities
  18




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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.)
 The Hierarchy of Generally Accepted Accounting
Principles
 Determining the Fair Value of a Financial
Asset When the Market for That Asset Is Not Active
 NOTE 13  SUBSEQUENT EVENT
  NOTE 14  GUARANTEES OF REGISTERED SECURITIES
     19




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
September 30, 2008
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    63,253
    
    
    $
    332
    
    
    $
    27
    
    
    $
    150,041
    
    
    $
    
    
    
    $
    213,653Accounts receivable
    
    
    
    
    
    
    19,123
    
    
    
    7,414
    
    
    
    635,641
    
    
    
    
    
    
    
    662,178Insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Prepaid expenses
    
    
    
    
    
    
    959
    
    
    
    105
    
    
    
    39,046
    
    
    
    
    
    
    
    40,110Accounts receivable from affiliates
    
    
    115,943
    
    
    
    
    
    
    
    575,229
    
    
    
    961,230
    
    
    
    (1,652,402
    )
    
    
    Other current assets
    
    
    5,541
    
    
    
    52
    
    
    
    20
    
    
    
    105,172
    
    
    
    (62,271
    )
    
    
    48,514Total current assets
    
    
    184,737
    
    
    
    20,466
    
    
    
    582,795
    
    
    
    1,891,130
    
    
    
    (1,714,673
    )
    
    
    964,455PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    
    
    1,812,371
    
    
    
    113,592
    
    
    
    5,189,550
    
    
    
    
    
    
    
    7,115,513Other
    
    
    
    
    
    
    225
    
    
    
    
    
    
    
    100,736
    
    
    
    
    
    
    
    100,961
    
    
    
    1,812,596
    
    
    
    113,592
    
    
    
    5,290,286
    
    
    
    
    
    
    
    7,216,474Accumulated depreciation
    
    
    
    
    
    
    (105,749
    )
    
    
    (68,948
    )
    
    
    (1,646,714
    )
    
    
    
    
    
    
    (1,821,411
    )
    
    
    
    1,706,847
    
    
    
    44,644
    
    
    
    3,643,572
    
    
    
    
    
    
    
    5,395,063NOTES RECEIVABLE FROM AFFILIATES
    
    
    511,835
    
    
    
    20,963
    
    
    
    44,159
    
    
    
    1,741,721
    
    
    
    (2,318,678
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    5,061,494
    
    
    
    6,403,915
    
    
    
    3,370,046
    
    
    
    
    
    
    
    (14,835,455
    )
    
    
    OTHER ASSETS
    
    
    3,135
    
    
    
    5,644
    
    
    
    6,547
    
    
    
    236,313
    
    
    
    
    
    
    
    251,639$
    5,761,201
    
    
    $
    8,157,835
    
    
    $
    4,048,191
    
    
    $
    7,512,736
    
    
    $
    (18,868,806
    )
    
    $
    6,611,157LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    
    
    
    $
    27,756
    
    
    $
    
    
    
    $
    25,352
    
    
    $
    (27,756
    )
    
    $
    25,352Accounts payable
    
    
    
    
    
    
    4,972
    
    
    
    11,211
    
    
    
    289,535
    
    
    
    
    
    
    
    305,718Accrued payroll and related costs
    
    
    17,021
    
    
    
    205
    
    
    
    9,735
    
    
    
    67,853
    
    
    
    
    
    
    
    94,814Taxes payable
    
    
    
    
    
    
    8,846
    
    
    
    
    
    
    
    61,184
    
    
    
    
    
    
    
    70,030Interest payable
    
    
    10,677
    
    
    
    16,270
    
    
    
    14,551
    
    
    
    451
    
    
    
    (34,515
    )
    
    
    7,434Accounts payable to affiliates
    
    
    
    
    
    
    1,652,402
    
    
    
    
    
    
    
    
    
    
    
    (1,652,402
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    4
    
    
    
    1
    
    
    
    51,803
    
    
    
    
    
    
    
    51,808Total current liabilities
    
    
    27,698
    
    
    
    1,710,455
    
    
    
    35,498
    
    
    
    496,178
    
    
    
    (1,714,673
    )
    
    
    555,156LONG-TERM DEBT
    
    
    349,828
    
    
    
    
    
    
    
    351,691
    
    
    
    
    
    
    
    
    
    
    
    701,519NOTES PAYABLE TO AFFILIATES
    
    
    414,300
    
    
    
    1,207,421
    
    
    
    120,000
    
    
    
    576,957
    
    
    
    (2,318,678
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    8,977
    
    
    
    13,045
    
    
    
    274,228
    
    
    
    
    
    
    
    296,250OTHER LIABILITIES
    
    
    6,679
    
    
    
    30,234
    
    
    
    3,858
    
    
    
    59,866
    
    
    
    
    
    
    
    100,637798,505
    
    
    
    2,957,087
    
    
    
    524,092
    
    
    
    1,407,229
    
    
    
    (4,033,351
    )
    
    
    1,653,562COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,101
    )
    
    
    
    
    
    
    (5,101
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    26,381
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,381Capital in excess of par value
    
    
    439,679
    
    
    
    1,279,983
    
    
    
    870,744
    
    
    
    1,270,234
    
    
    
    (3,420,961
    )
    
    
    439,679Retained earnings
    
    
    4,511,660
    
    
    
    3,920,765
    
    
    
    2,652,730
    
    
    
    4,855,398
    
    
    
    (11,428,893
    )
    
    
    4,511,660Accumulated other comprehensive
income (loss)
    
    
    (15,024
    )
    
    
    
    
    
    
    625
    
    
    
    (15,024
    )
    
    
    14,399
    
    
    
    (15,024
    )4,962,696
    
    
    
    5,200,748
    
    
    
    3,524,099
    
    
    
    6,110,608
    
    
    
    (14,835,455
    )
    
    
    4,962,696$
    5,761,201
    
    
    $
    8,157,835
    
    
    $
    4,048,191
    
    
    $
    7,512,736
    
    
    $
    (18,868,806
    )
    
    $
    6,611,157
  20




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
December 31, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    12,544
    
    
    $
    
    
    
    $
    73
    
    
    $
    148,441
    
    
    $
    
    
    
    $
    161,058Accounts receivable
    
    
    
    
    
    
    22,900
    
    
    
    9,699
    
    
    
    580,516
    
    
    
    
    
    
    
    613,115Insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,066
    
    
    
    
    
    
    
    39,066Prepaid expenses
    
    
    
    
    
    
    858
    
    
    
    82
    
    
    
    19,781
    
    
    
    
    
    
    
    20,721Accounts receivable from affiliates
    
    
    419,197
    
    
    
    
    
    
    
    576,239
    
    
    
    
    
    
    
    (995,436
    )
    
    
    Other current assets
    
    
    3,474
    
    
    
    160
    
    
    
    135
    
    
    
    65,154
    
    
    
    (42,692
    )
    
    
    26,231Total current assets
    
    
    435,215
    
    
    
    23,918
    
    
    
    586,228
    
    
    
    852,958
    
    
    
    (1,038,128
    )
    
    
    860,191PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    
    
    1,665,102
    
    
    
    111,089
    
    
    
    4,578,591
    
    
    
    
    
    
    
    6,354,782Other
    
    
    
    
    
    
    170
    
    
    
    
    
    
    
    79,999
    
    
    
    
    
    
    
    80,169
    
    
    
    1,665,272
    
    
    
    111,089
    
    
    
    4,658,590
    
    
    
    
    
    
    
    6,434,951Accumulated depreciation
    
    
    
    
    
    
    (82,964
    )
    
    
    (64,947
    )
    
    
    (1,491,124
    )
    
    
    
    
    
    
    (1,639,035
    )
    
    
    
    1,582,308
    
    
    
    46,142
    
    
    
    3,167,466
    
    
    
    
    
    
    
    4,795,916NOTES RECEIVABLE FROM AFFILIATES
    
    
    511,835
    
    
    
    20,963
    
    
    
    44,159
    
    
    
    1,462,786
    
    
    
    (2,039,743
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    3,881,341
    
    
    
    4,906,292
    
    
    
    3,010,249
    
    
    
    
    
    
    
    (11,797,882
    )
    
    
    OTHER ASSETS
    
    
    3,666
    
    
    
    6,847
    
    
    
    3,953
    
    
    
    205,433
    
    
    
    
    
    
    
    219,899$
    4,832,057
    
    
    $
    6,540,328
    
    
    $
    3,690,731
    
    
    $
    5,688,643
    
    
    $
    (14,875,753
    )
    
    $
    5,876,006LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    
    
    
    $
    25,886
    
    
    $
    
    
    
    $
    10,334
    
    
    $
    (25,886
    )
    
    $
    10,334Accounts payable
    
    
    
    
    
    
    5,540
    
    
    
    4,778
    
    
    
    188,077
    
    
    
    
    
    
    
    198,395Accrued payroll and related costs
    
    
    
    
    
    
    421
    
    
    
    13,131
    
    
    
    102,362
    
    
    
    
    
    
    
    115,914Taxes payable
    
    
    
    
    
    
    2,114
    
    
    
    
    
    
    
    83,527
    
    
    
    
    
    
    
    85,641Interest payable
    
    
    4,122
    
    
    
    6,847
    
    
    
    15,200
    
    
    
    588
    
    
    
    (16,806
    )
    
    
    9,951Accounts payable to affiliates
    
    
    
    
    
    
    1,171,782
    
    
    
    
    
    
    
    (176,346
    )
    
    
    (995,436
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    3
    
    
    
    487
    
    
    
    72,047
    
    
    
    
    
    
    
    72,537Total current liabilities
    
    
    4,122
    
    
    
    1,212,593
    
    
    
    33,596
    
    
    
    280,589
    
    
    
    (1,038,128
    )
    
    
    492,772LONG-TERM DEBT
    
    
    399,800
    
    
    
    
    
    
    
    351,682
    
    
    
    22,700
    
    
    
    
    
    
    
    774,182NOTES PAYABLE TO AFFILIATES
    
    
    114,300
    
    
    
    1,228,486
    
    
    
    120,000
    
    
    
    576,957
    
    
    
    (2,039,743
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    4,795
    
    
    
    12,496
    
    
    
    223,330
    
    
    
    
    
    
    
    240,621OTHER LIABILITIES
    
    
    5,513
    
    
    
    23,266
    
    
    
    1,689
    
    
    
    35,237
    
    
    
    
    
    
    
    65,705523,735
    
    
    
    2,469,140
    
    
    
    519,463
    
    
    
    1,138,813
    
    
    
    (3,077,871
    )
    
    
    1,573,280COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,596
    )
    
    
    
    
    
    
    (5,596
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    26,822
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,822Capital in excess of par value
    
    
    683,697
    
    
    
    1,279,983
    
    
    
    870,744
    
    
    
    792,645
    
    
    
    (2,943,372
    )
    
    
    683,697Retained earnings
    
    
    3,602,870
    
    
    
    2,791,205
    
    
    
    2,301,199
    
    
    
    3,767,848
    
    
    
    (8,860,252
    )
    
    
    3,602,870Accumulated other comprehensive
income (loss)
    
    
    (5,067
    )
    
    
    
    
    
    
    (675
    )
    
    
    (5,067
    )
    
    
    5,742
    
    
    
    (5,067
    )4,308,322
    
    
    
    4,071,188
    
    
    
    3,171,268
    
    
    
    4,555,426
    
    
    
    (11,797,882
    )
    
    
    4,308,322$
    4,832,057
    
    
    $
    6,540,328
    
    
    $
    3,690,731
    
    
    $
    5,688,643
    
    
    $
    (14,875,753
    )
    
    $
    5,876,006
  21




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2008
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    69,695
    
    
    $
    14,583
    
    
    $
    779,920
    
    
    $
    (29,000
    )
    
    $
    835,198Reimbursables
    
    
    
    
    
    
    277
    
    
    
    41
    
    
    
    17,769
    
    
    
    
    
    
    
    18,087Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,197
    
    
    
    
    
    
    
    8,197Engineering, consulting and other
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    509
    
    
    
    
    
    
    
    499
    
    
    
    69,962
    
    
    
    14,624
    
    
    
    806,395
    
    
    
    (29,000
    )
    
    
    861,981OPERATING COSTS AND EXPENSESContract drilling services
    
    
    5,294
    
    
    
    10,536
    
    
    
    6,171
    
    
    
    260,728
    
    
    
    (29,000
    )
    
    
    253,729Reimbursables
    
    
    
    
    
    
    254
    
    
    
    34
    
    
    
    16,206
    
    
    
    
    
    
    
    16,494Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,410
    
    
    
    
    
    
    
    5,410Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    
    
    
    
    9,185
    
    
    
    1,930
    
    
    
    81,556
    
    
    
    
    
    
    
    92,671Selling, general and administrative
    
    
    2,328
    
    
    
    1,634
    
    
    
    460
    
    
    
    11,605
    
    
    
    
    
    
    
    16,027Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    10,000Gain on disposal of assets, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,622
    
    
    
    21,609
    
    
    
    8,595
    
    
    
    385,505
    
    
    
    (29,000
    )
    
    
    394,331OPERATING INCOME (LOSS)
    
    
    (7,622
    )
    
    
    48,353
    
    
    
    6,029
    
    
    
    420,890
    
    
    
    
    
    
    
    467,650OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    393,270
    
    
    
    343,368
    
    
    
    71,773
    
    
    
    
    
    
    
    (808,411
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (5,047
    )
    
    
    (10,138
    )
    
    
    (6,388
    )
    
    
    8,975
    
    
    
    11,997
    
    
    
    (601
    )Interest income and other, net
    
    
    2,352
    
    
    
    1
    
    
    
    
    
    
    
    11,948
    
    
    
    (11,997
    )
    
    
    2,304INCOME BEFORE INCOME TAXES
    
    
    382,953
    
    
    
    381,584
    
    
    
    71,414
    
    
    
    441,813
    
    
    
    (808,411
    )
    
    
    469,353INCOME TAX (PROVISION) BENEFIT
    
    
    (431
    )
    
    
    2,176
    
    
    
    (2,613
    )
    
    
    (85,963
    )
    
    
    
    
    
    
    (86,831
    )NET INCOME
    
    $
    382,522
    
    
    $
    383,760
    
    
    $
    68,801
    
    
    $
    355,850
    
    
    $
    (808,411
    )
    
    $
    382,522
  22




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    36,351
    
    
    $
    15,448
    
    
    $
    682,505
    
    
    $
    (15,548
    )
    
    $
    718,756Reimbursables
    
    
    
    
    
    
    83
    
    
    
    267
    
    
    
    31,128
    
    
    
    
    
    
    
    31,478Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,622
    
    
    
    
    
    
    
    40,622Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    420
    
    
    
    
    
    
    
    420
    
    
    
    36,434
    
    
    
    15,715
    
    
    
    754,675
    
    
    
    (15,548
    )
    
    
    791,276OPERATING COSTS AND EXPENSESContract drilling services
    
    
    5,320
    
    
    
    8,546
    
    
    
    6,113
    
    
    
    222,845
    
    
    
    (15,548
    )
    
    
    227,276Reimbursables
    
    
    
    
    
    
    62
    
    
    
    266
    
    
    
    27,347
    
    
    
    
    
    
    
    27,675Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,324
    
    
    
    
    
    
    
    32,324Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,073
    
    
    
    
    
    
    
    6,073Depreciation and amortization
    
    
    
    
    
    
    6,539
    
    
    
    1,515
    
    
    
    69,938
    
    
    
    
    
    
    
    77,992Selling, general and administrative
    
    
    3,676
    
    
    
    1,010
    
    
    
    327
    
    
    
    19,604
    
    
    
    
    
    
    
    24,617Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,600
    
    
    
    
    
    
    
    1,6008,996
    
    
    
    16,157
    
    
    
    8,221
    
    
    
    379,731
    
    
    
    (15,548
    )
    
    
    397,557OPERATING INCOME (LOSS)
    
    
    (8,996
    )
    
    
    20,277
    
    
    
    7,494
    
    
    
    374,944
    
    
    
    
    
    
    
    393,719OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    387,937
    
    
    
    365,727
    
    
    
    202,504
    
    
    
    
    
    
    
    (956,168
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (61,970
    )
    
    
    (11,213
    )
    
    
    (6,448
    )
    
    
    11,734
    
    
    
    58,751
    
    
    
    (9,146
    )Interest income and other, net
    
    
    920
    
    
    
    1
    
    
    
    
    
    
    
    64,784
    
    
    
    (58,751
    )
    
    
    6,954INCOME BEFORE INCOME TAXES
    
    
    317,891
    
    
    
    374,792
    
    
    
    203,550
    
    
    
    451,462
    
    
    
    (956,168
    )
    
    
    391,527INCOME TAX (PROVISION) BENEFIT
    
    
    389
    
    
    
    1,426
    
    
    
    (21,862
    )
    
    
    (53,200
    )
    
    
    
    
    
    
    (73,247
    )NET INCOME
    
    $
    318,280
    
    
    $
    376,218
    
    
    $
    181,688
    
    
    $
    398,262
    
    
    $
    (956,168
    )
    
    $
    318,280
  23




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2008
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    185,769
    
    
    $
    38,875
    
    
    $
    2,267,968
    
    
    $
    (76,300
    )
    
    $
    2,416,312Reimbursables
    
    
    
    
    
    
    1,177
    
    
    
    200
    
    
    
    70,132
    
    
    
    
    
    
    
    71,509Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,346
    
    
    
    
    
    
    
    47,346Engineering, consulting and other
    
    
    
    
    
    
    (8
    )
    
    
    1
    
    
    
    1,187
    
    
    
    
    
    
    
    1,180
    
    
    
    186,938
    
    
    
    39,076
    
    
    
    2,386,633
    
    
    
    (76,300
    )
    
    
    2,536,347OPERATING COSTS AND EXPENSESContract drilling services
    
    
    17,639
    
    
    
    29,017
    
    
    
    19,022
    
    
    
    756,739
    
    
    
    (76,300
    )
    
    
    746,117Reimbursables
    
    
    
    
    
    
    1,011
    
    
    
    188
    
    
    
    62,587
    
    
    
    
    
    
    
    63,786Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,294
    
    
    
    
    
    
    
    37,294Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    
    
    
    
    25,314
    
    
    
    5,342
    
    
    
    232,750
    
    
    
    
    
    
    
    263,406Selling, general and administrative
    
    
    7,532
    
    
    
    4,621
    
    
    
    1,381
    
    
    
    43,433
    
    
    
    
    
    
    
    56,967Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    10,000Gain on disposal of assets, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,521
    )
    
    
    
    
    
    
    (35,521
    )25,171
    
    
    
    59,963
    
    
    
    25,933
    
    
    
    1,107,282
    
    
    
    (76,300
    )
    
    
    1,142,049OPERATING INCOME (LOSS)
    
    
    (25,171
    )
    
    
    126,975
    
    
    
    13,143
    
    
    
    1,279,351
    
    
    
    
    
    
    
    1,394,298OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    1,180,153
    
    
    
    1,046,513
    
    
    
    361,425
    
    
    
    
    
    
    
    (2,588,091
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (18,430
    )
    
    
    (30,684
    )
    
    
    (19,164
    )
    
    
    27,117
    
    
    
    38,729
    
    
    
    (2,432
    )Interest income and other, net
    
    
    6,703
    
    
    
    1
    
    
    
    
    
    
    
    39,038
    
    
    
    (38,729
    )
    
    
    7,013INCOME BEFORE INCOME TAXES
    
    
    1,143,255
    
    
    
    1,142,805
    
    
    
    355,404
    
    
    
    1,345,506
    
    
    
    (2,588,091
    )
    
    
    1,398,879INCOME TAX (PROVISION) BENEFIT
    
    
    (827
    )
    
    
    6,205
    
    
    
    (3,873
    )
    
    
    (257,956
    )
    
    
    
    
    
    
    (256,451
    )NET INCOME
    
    $
    1,142,428
    
    
    $
    1,149,010
    
    
    $
    351,531
    
    
    $
    1,087,550
    
    
    $
    (2,588,091
    )
    
    $
    1,142,428
  24




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    103,977
    
    
    $
    43,922
    
    
    $
    1,851,413
    
    
    $
    (46,137
    )
    
    $
    1,953,175Reimbursables
    
    
    
    
    
    
    439
    
    
    
    722
    
    
    
    90,068
    
    
    
    
    
    
    
    91,229Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116,342
    
    
    
    
    
    
    
    116,342Engineering, consulting and other
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    2,947
    
    
    
    
    
    
    
    2,953
    
    
    
    104,422
    
    
    
    44,644
    
    
    
    2,060,770
    
    
    
    (46,137
    )
    
    
    2,163,699OPERATING COSTS AND EXPENSESContract drilling services
    
    
    16,030
    
    
    
    21,554
    
    
    
    20,767
    
    
    
    623,954
    
    
    
    (46,137
    )
    
    
    636,168Reimbursables
    
    
    
    
    
    
    369
    
    
    
    716
    
    
    
    78,744
    
    
    
    
    
    
    
    79,829Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,181
    
    
    
    
    
    
    
    93,181Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    400
    
    
    
    16,969
    
    
    
    
    
    
    
    17,369Depreciation and amortization
    
    
    
    
    
    
    19,311
    
    
    
    4,048
    
    
    
    187,021
    
    
    
    
    
    
    
    210,380Selling, general and administrative
    
    
    9,912
    
    
    
    2,967
    
    
    
    973
    
    
    
    45,293
    
    
    
    
    
    
    
    59,145Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,600
    
    
    
    
    
    
    
    1,60025,942
    
    
    
    44,201
    
    
    
    26,904
    
    
    
    1,046,762
    
    
    
    (46,137
    )
    
    
    1,097,672OPERATING INCOME (LOSS)
    
    
    (25,942
    )
    
    
    60,221
    
    
    
    17,740
    
    
    
    1,014,008
    
    
    
    
    
    
    
    1,066,027OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    957,702
    
    
    
    892,272
    
    
    
    448,099
    
    
    
    
    
    
    
    (2,298,073
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (75,105
    )
    
    
    (34,885
    )
    
    
    (20,496
    )
    
    
    34,312
    
    
    
    84,293
    
    
    
    (11,881
    )Interest income and other, net
    
    
    1,007
    
    
    
    3
    
    
    
    
    
    
    
    91,907
    
    
    
    (84,293
    )
    
    
    8,624INCOME BEFORE INCOME TAXES
    
    
    857,662
    
    
    
    917,611
    
    
    
    445,343
    
    
    
    1,140,227
    
    
    
    (2,298,073
    )
    
    
    1,062,770INCOME TAX (PROVISION) BENEFIT
    
    
    969
    
    
    
    9,516
    
    
    
    (24,158
    )
    
    
    (190,466
    )
    
    
    
    
    
    
    (204,139
    )NET INCOME
    
    $
    858,631
    
    
    $
    927,127
    
    
    $
    421,185
    
    
    $
    949,761
    
    
    $
    (2,298,073
    )
    
    $
    858,631
  25




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2008
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    1,142,428
    
    
    $
    1,149,010
    
    
    $
    351,531
    
    
    $
    1,087,550
    
    
    $
    (2,588,091
    )
    
    $
    1,142,428Adjustments to reconcile net income to net cash
from operating activities:Depreciation and amortization
    
    
    
    
    
    
    25,314
    
    
    
    5,342
    
    
    
    232,750
    
    
    
    
    
    
    
    263,406Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    10,000Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    549
    
    
    
    13,553
    
    
    
    
    
    
    
    14,102Share-based compensation expense
    
    
    28,274
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,274Equity earnings in affiliates
    
    
    (1,180,153
    )
    
    
    (1,046,513
    )
    
    
    (361,425
    )
    
    
    
    
    
    
    2,588,091
    
    
    
    Pension contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,445
    )
    
    
    
    
    
    
    (17,445
    )Gain on disposal of assets, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,521
    )
    
    
    
    
    
    
    (35,521
    )Other, net
    
    
    1,697
    
    
    
    5,621
    
    
    
    43
    
    
    
    (11,296
    )
    
    
    
    
    
    
    (3,935
    )Other changes in current assets and liabilities:Accounts receivable
    
    
    
    
    
    
    3,777
    
    
    
    2,285
    
    
    
    (55,125
    )
    
    
    
    
    
    
    (49,063
    )Hurricane insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,319
    
    
    
    
    
    
    
    17,319Other current assets
    
    
    (2,067
    )
    
    
    3
    
    
    
    92
    
    
    
    (41,919
    )
    
    
    
    
    
    
    (43,891
    )Accounts payable
    
    
    
    
    
    
    (568
    )
    
    
    6,433
    
    
    
    (8,271
    )
    
    
    
    
    
    
    (2,406
    )Other current liabilities
    
    
    23,576
    
    
    
    15,940
    
    
    
    (4,531
    )
    
    
    (26,588
    )
    
    
    
    
    
    
    8,397Net cash from operating activities
    
    
    13,755
    
    
    
    152,584
    
    
    
    319
    
    
    
    1,165,007
    
    
    
    
    
    
    
    1,331,665CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    (563,349
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (563,349
    )Other capital expenditures
    
    
    
    
    
    
    
    
    
    
    (2,503
    )
    
    
    (241,340
    )
    
    
    
    
    
    
    (243,843
    )Major maintenance expenditures
    
    
    
    
    
    
    
    
    
    
    (2,889
    )
    
    
    (70,029
    )
    
    
    
    
    
    
    (72,918
    )Accrued capital expenditures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    92,719
    
    
    
    
    
    
    
    92,719Hurricane insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,747
    
    
    
    
    
    
    
    21,747Notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (300,000
    )
    
    
    300,000
    
    
    
    Repayments from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,065
    
    
    
    (21,065
    )
    
    
    Proceeds from disposal of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,134
    
    
    
    
    
    
    
    39,134Net cash from investing activities
    
    
    
    
    
    
    (563,349
    )
    
    
    (5,392
    )
    
    
    (436,704
    )
    
    
    278,935
    
    
    
    (726,510
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on bank credit facilities
    
    
    (50,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,000
    )Payments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,682
    )
    
    
    
    
    
    
    (7,682
    )Advances (to) from affiliates
    
    
    281,832
    
    
    
    432,162
    
    
    
    5,027
    
    
    
    (719,021
    )
    
    
    
    
    
    
    Repayment of notes to affiliates
    
    
    
    
    
    
    (21,065
    )
    
    
    
    
    
    
    
    
    
    
    21,065
    
    
    
    Notes payable to affiliates
    
    
    300,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (300,000
    )
    
    
    Net proceeds from employee stock transactions
    
    
    10,070
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,070Dividends paid
    
    
    (233,638
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (233,638
    )Repurchases of ordinary shares
    
    
    (271,310
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (271,310
    )Net cash from financing activities
    
    
    36,954
    
    
    
    411,097
    
    
    
    5,027
    
    
    
    (726,703
    )
    
    
    (278,935
    )
    
    
    (552,560
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    50,709
    
    
    
    332
    
    
    
    (46
    )
    
    
    1,600
    
    
    
    
    
    
    
    52,595CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    12,544
    
    
    
    
    
    
    
    73
    
    
    
    148,441
    
    
    
    
    
    
    
    161,058CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    63,253
    
    
    $
    332
    
    
    $
    27
    
    
    $
    150,041
    
    
    $
    
    
    
    $
    213,653
  26




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    858,631
    
    
    $
    927,127
    
    
    $
    421,185
    
    
    $
    949,761
    
    
    $
    (2,298,073
    )
    
    $
    858,631Adjustments to reconcile net income to net cash
from operating activities:Depreciation and amortization
    
    
    
    
    
    
    19,311
    
    
    
    4,048
    
    
    
    187,021
    
    
    
    
    
    
    
    210,380Impairment loss on assets
    
    
    
    
    
    
    
    
    
    
    400
    
    
    
    9,789
    
    
    
    
    
    
    
    10,189Deferred income tax provision
    
    
    
    
    
    
    4,794
    
    
    
    382
    
    
    
    8,021
    
    
    
    
    
    
    
    13,197Share-based compensation expense
    
    
    25,951
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,951Equity earnings in affiliates
    
    
    (957,702
    )
    
    
    (892,272
    )
    
    
    (448,099
    )
    
    
    
    
    
    
    2,298,073
    
    
    
    Pension contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,615
    )
    
    
    
    
    
    
    (37,615
    )Other, net
    
    
    618
    
    
    
    67
    
    
    
    (743
    )
    
    
    24,085
    
    
    
    
    
    
    
    24,027Other changes in current assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (7,882
    )
    
    
    (3,380
    )
    
    
    (100,101
    )
    
    
    
    
    
    
    (111,363
    )Other current assets
    
    
    1
    
    
    
    654
    
    
    
    647
    
    
    
    17,233
    
    
    
    
    
    
    
    18,535Accounts payable
    
    
    (17,305
    )
    
    
    (1,510
    )
    
    
    1,804
    
    
    
    (19,903
    )
    
    
    
    
    
    
    (36,914
    )Other current liabilities
    
    
    7,909
    
    
    
    (4,306
    )
    
    
    (7,987
    )
    
    
    24,751
    
    
    
    
    
    
    
    20,367Net cash from operating activities
    
    
    (81,897
    )
    
    
    45,983
    
    
    
    (31,743
    )
    
    
    1,063,042
    
    
    
    
    
    
    
    995,385CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    (428,517
    )
    
    
    
    
    
    
    (113,459
    )
    
    
    
    
    
    
    (541,976
    )Other capital expenditures
    
    
    
    
    
    
    (52
    )
    
    
    (7,927
    )
    
    
    (322,728
    )
    
    
    
    
    
    
    (330,707
    )Major maintenance expenditures
    
    
    
    
    
    
    (2,407
    )
    
    
    (914
    )
    
    
    (66,435
    )
    
    
    
    
    
    
    (69,756
    )Accrued capital expenditures
    
    
    
    
    
    
    (6,334
    )
    
    
    
    
    
    
    62,274
    
    
    
    
    
    
    
    55,940Proceeds from disposal of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,643
    
    
    
    
    
    
    
    4,643Notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (750,350
    )
    
    
    750,350
    
    
    
    Repayments of notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    702,526
    
    
    
    (702,526
    )
    
    
    Net cash from investing activities
    
    
    
    
    
    
    (437,310
    )
    
    
    (8,841
    )
    
    
    (483,529
    )
    
    
    47,824
    
    
    
    (881,856
    )CASH FLOWS FROM FINANCING ACTIVITIESShort-term debt borrowing
    
    
    685,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    685,000Short-term debt payment
    
    
    (685,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (685,000
    )Borrowings on bank credit facilities
    
    
    135,000
    
    
    
    
    
    
    
    85,000
    
    
    
    
    
    
    
    
    
    
    
    220,000Payments on bank credit facilities
    
    
    (35,000
    )
    
    
    
    
    
    
    (85,000
    )
    
    
    
    
    
    
    
    
    
    
    (120,000
    )Payments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,158
    )
    
    
    
    
    
    
    (7,158
    )Advances (to)/from affiliates
    
    
    32,995
    
    
    
    408,939
    
    
    
    40,631
    
    
    
    (482,565
    )
    
    
    
    
    
    
    Notes payable to affiliates
    
    
    750,350
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (750,350
    )
    
    
    Repayment of notes payable to affiliates
    
    
    (685,000
    )
    
    
    (17,526
    )
    
    
    
    
    
    
    
    
    
    
    702,526
    
    
    
    Net proceeds from employee stock transactions
    
    
    24,713
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,713Dividends paid
    
    
    (21,528
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,528
    )Repurchases of ordinary shares
    
    
    (120,687
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (120,687
    )Net cash from financing activities
    
    
    80,843
    
    
    
    391,413
    
    
    
    40,631
    
    
    
    (489,723
    )
    
    
    (47,824
    )
    
    
    (24,660
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    (1,054
    )
    
    
    86
    
    
    
    47
    
    
    
    89,790
    
    
    
    
    
    
    
    88,869CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    2,458
    
    
    
    36
    
    
    
    
    
    
    
    59,216
    
    
    
    
    
    
    
    61,710CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    1,404
    
    
    $
    122
    
    
    $
    47
    
    
    $
    149,006
    
    
    $
    
    
    
    $
    150,579
  27




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##### Table of Contents



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




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##### Table of Contents



Results and Strategy
   
    
    we continued construction on three newbuild ultra-deepwater semisubmersibles, the Noble
Dave Beard, Noble Danny Adkinsand Noble Jim Day, which are scheduled for delivery in the
first quarter of 2009, the second quarter of 2009 and the fourth quarter of 2009,
respectively;
 
    
    we completed construction and took delivery of the F&G JU-200E enhanced premium
independent leg cantilevered jackup, the Noble Hans Deul;
 
    
    we continued construction on the F&G JU-2000E enhanced premium independent leg
cantilevered jackup, Noble Scott Marks, which is scheduled for delivery in the second
quarter of 2009; and
 
    
    we entered into agreements for the construction of a new, dynamically positioned,
ultra-deepwater, harsh environment Globetrotter-class drillship capable of working in up to
10,000 feet of water, which is scheduled to be delivered in the second half of 2011.
   29




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##### Table of Contents



CONTRACT DRILLING SERVICES BACKLOG
  Year Ending December 31,Total
    
    
    2008(1)
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012-2016(In thousands)Contract Drilling Services BacklogSemisubmersibles/Drillships(2)
    
    $
    9,182,000
    
    
    $
    384,000
    
    
    $
    1,760,000
    
    
    $
    2,005,000
    
    
    $
    1,676,000
    
    
    $
    3,357,000Jackups/Submersibles(3)
    
    
    2,923,000
    
    
    
    523,000
    
    
    
    1,767,000
    
    
    
    505,000
    
    
    
    128,000
    
    
    
    Total(4)
    
    $
    12,105,000
    
    
    $
    907,000
    
    
    $
    3,527,000
    
    
    $
    2,510,000
    
    
    $
    1,804,000
    
    
    $
    3,357,000Percent of Available
Operating Days Committed (5)
    
    
    
    
    
    
    92
    %
    
    
    74
    %
    
    
    39
    %
    
    
    23
    %
    
    
    8
    %
 
 (1)
    
    Represents a three-month period beginning October 1, 2008.(2)
    
    Our drilling contracts with Petroleo Brasileiro S.A. (Petrobras) provide an opportunity for
us to earn performance bonuses based on absence of downtime experienced for our rigs operating
offshore Brazil. With respect to our semisubmersibles operating offshore Brazil, we have
included in our backlog an amount equal to 75 percent of potential performance bonuses
for such semisubmersibles, which amount is based on and consistent with our historical
earnings of performance bonuses for these rigs. With respect to our drillships operating
offshore Brazil, we (a) have not included in our backlog amounts any performance bonuses for
periods prior to the commencement of certain upgrade projects planned for 2010 and 2011, which
projects are designed to enhance the reliability and operational performance of our
drillships, and (b) have included in our backlog amounts an amount equal to 75 percent of
potential performance bonuses for periods after the estimated completion of such upgrade
projects. Our backlog amount for semisubmersibles/drillships includes approximately $346
million attributable to these performance bonuses.(3)
    
    Our drilling contracts with Pemex Exploracion y Produccion (Pemex) for certain jackups
operating offshore in Mexico are subject to price review and adjustment of the rig dayrate.
Presently, contracts for five jackups have dayrates indexed to the world average of the
highest dayrates published by ODS-Petrodata. After an initial firm dayrate period, the
dayrates are generally adjusted quarterly based on formulas calculated from the index. Our
contract drilling services backlog has been calculated using the September 30, 2008
index-based dayrates for periods subsequent to the initial firm dayrate period.(4)
    
    Pemex has the ability to
cancel early its drilling contracts with us on 30 days or less
notice without Pemex making an early termination payment. We
currently have 12 rigs contracted to Pemex in Mexico, and our
backlog includes approximately $1.6 billion related to such
contracts at September 30, 2008.(5)
    
    Percentages take into account additional capacity from the estimated dates of deployment of
our newbuild rigs that are scheduled to commence operations during the balance of 2008 and
2009.
    30




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##### Table of Contents



INTERNAL INVESTIGATION
        31




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##### Table of Contents



RESULTS OF OPERATIONS
 For the Three Months Ended September 30, 2008 and 2007
 General
  Rig Utilization, Operating Days and Average Dayrates
  Average RigUtilization(1)
    
    
    Operating Days(2)
    
    
    Average DayratesThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,%
    
    
    
    
    
    
    
    
    
    
    %2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeJackups
    
    
    91
    %
    
    
    95
    %
    
    
    3,444
    
    
    
    3,532
    
    
    
    -2
    %
    
    $
    150,350
    
    
    $
    126,342
    
    
    
    19
    %Semisubmersibles
>6,000(3)
    
    
    95
    %
    
    
    99
    %
    
    
    613
    
    
    
    636
    
    
    
    -4
    %
    
    
    329,586
    
    
    
    282,807
    
    
    
    17
    %Semisubmersibles
<6,000(4)
    
    
    100
    %
    
    
    100
    %
    
    
    276
    
    
    
    276
    
    
    
    
    %
    
    
    237,674
    
    
    
    178,403
    
    
    
    33
    %Drillships
    
    
    67
    %
    
    
    87
    %
    
    
    184
    
    
    
    241
    
    
    
    -24
    %
    
    
    214,758
    
    
    
    130,019
    
    
    
    65
    %Submersibles
    
    
    67
    %
    
    
    68
    %
    
    
    184
    
    
    
    188
    
    
    
    -2
    %
    
    
    55,117
    
    
    
    63,812
    
    
    
    -14
    %Total
    
    
    90
    %
    
    
    94
    %
    
    
    4,701
    
    
    
    4,873
    
    
    
    -4
    %
    
    $
    177,683
    
    
    $
    147,501
    
    
    
    20
    %
 
 (1)
    
    Information reflects our policy of reporting on the basis of the number of actively marketed
rigs in our fleet excluding newbuild rigs under construction.(2)
    
    Information reflects the number of days that our rigs were operating under contract.(3)
    
    These units have water depth ratings of 6,000 feet or greater.(4)
    
    These units have water depth ratings of less than 6,000 feet.  32




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##### Table of Contents



Contract Drilling Services
  Three Months EndedSeptember 30,
    
    
    Change2008
    
    
    2007
    
    
    $
    
    
    %Operating Revenues:Contract drilling services
    
    $
    835,198
    
    
    $
    718,756
    
    
    $
    116,442
    
    
    
    16
    %Reimbursables (1)
    
    
    17,227
    
    
    
    24,234
    
    
    
    (7,007
    )
    
    
    -29
    %Other
    
    
    94
    
    
    
    401
    
    
    
    (307
    )
    
    
    -77
    %$
    852,519
    
    
    $
    743,391
    
    
    $
    109,128
    
    
    
    15
    %Operating Costs and Expenses:Contract drilling services
    
    $
    253,729
    
    
    $
    227,276
    
    
    $
    26,453
    
    
    
    12
    %Reimbursables (1)
    
    
    15,604
    
    
    
    20,820
    
    
    
    (5,216
    )
    
    
    -25
    %Other
    
    
    
    
    
    
    7
    
    
    
    (7
    )
    
    
    -100
    %Depreciation and amortization
    
    
    90,923
    
    
    
    75,627
    
    
    
    15,296
    
    
    
    20
    %Selling, general and administrative
    
    
    15,886
    
    
    
    24,112
    
    
    
    (8,226
    )
    
    
    -34
    %Hurricane losses and recoveries, net
    
    
    10,000
    
    
    
    1,600
    
    
    
    8,400
    
    
    
    525
    %386,142
    
    
    
    349,442
    
    
    
    36,700
    
    
    
    11
    %Operating Income
    
    $
    466,377
    
    
    $
    393,949
    
    
    $
    72,428
    
    
    
    18
    %
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues.
  Noble Roy
Butler, Noble Max Smith Noble George McLeod Noble Roger Eason Noble Fri Rodli, Noble Don
Walker, Noble Roy Butler Noble Carl Norberg Noble Roger Lewis
 Operating Costs and Expenses. Noble Roger Lewis,
   33




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##### Table of Contents



Other
  Three Months EndedSeptember 30,
    
    
    Change2008
    
    
    2007
    
    
    $
    
    
    %Operating Revenues:Labor contract drilling services
    
    $
    8,197
    
    
    $
    40,622
    
    
    $
    (32,425
    )
    
    
    -80
    %Reimbursables (1)
    
    
    860
    
    
    
    7,244
    
    
    
    (6,384
    )
    
    
    -88
    %Engineering, consulting and other
    
    
    405
    
    
    
    19
    
    
    
    386
    
    
    
    **$
    9,462
    
    
    $
    47,885
    
    
    $
    (38,423
    )
    
    
    -80
    %Operating Costs and Expenses:Labor contract drilling services
    
    $
    5,410
    
    
    $
    32,324
    
    
    $
    (26,914
    )
    
    
    -83
    %Reimbursables (1)
    
    
    890
    
    
    
    6,855
    
    
    
    (5,965
    )
    
    
    -87
    %Engineering, consulting and other
    
    
    
    
    
    
    6,066
    
    
    
    (6,066
    )
    
    
    -100
    %Depreciation and amortization
    
    
    1,748
    
    
    
    2,365
    
    
    
    (617
    )
    
    
    -26
    %Selling, general and administrative
    
    
    141
    
    
    
    505
    
    
    
    (364
    )
    
    
    -72
    %8,189
    
    
    
    48,115
    
    
    
    (39,926
    )
    
    
    -83
    %Operating Income
    
    $
    1,273
    
    
    $
    (230
    )
    
    $
    1,503
    
    
    
    **
 
 **
    
    Not a meaningful percentage.(1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Kolskaya Noble Kolskaya Noble Kolskaya
 Operating Costs and Expenses. Noble Kolskaya
  Noble Kolskaya
  34




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##### Table of Contents



Other Items
 Interest Expense.
 Interest income and other, net.
 Income Tax Provision.
 For the Nine Months Ended September 30, 2008 and 2007
 General
  Rig Utilization, Operating Days and Average Dayrates
  Average RigUtilization(1)
    
    
    Operating Days(2)
    
    
    Average DayratesNine Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,%
    
    
    
    
    
    
    
    
    
    
    %2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeJackups
    
    
    94
    %
    
    
    97
    %
    
    
    10,525
    
    
    
    10,598
    
    
    
    -1
    %
    
    $
    147,554
    
    
    $
    113,770
    
    
    
    30
    %Semisubmersibles
>6,000(3)
    
    
    95
    %
    
    
    100
    %
    
    
    1,822
    
    
    
    1,732
    
    
    
    5
    %
    
    
    314,612
    
    
    
    276,590
    
    
    
    14
    %Semisubmersibles
<6,000(4)
    
    
    100
    %
    
    
    85
    %
    
    
    822
    
    
    
    694
    
    
    
    18
    %
    
    
    210,695
    
    
    
    174,836
    
    
    
    21
    %Drillships
    
    
    67
    %
    
    
    94
    %
    
    
    548
    
    
    
    766
    
    
    
    -28
    %
    
    
    160,066
    
    
    
    119,959
    
    
    
    33
    %Submersibles
    
    
    66
    %
    
    
    88
    %
    
    
    545
    
    
    
    717
    
    
    
    -24
    %
    
    
    53,161
    
    
    
    76,953
    
    
    
    -31
    %Total
    
    
    91
    %
    
    
    96
    %
    
    
    14,262
    
    
    
    14,507
    
    
    
    -2
    %
    
    $
    169,419
    
    
    $
    134,639
    
    
    
    26
    %
 
 (1)
    
    Information reflects our policy of reporting on the basis of the number of actively marketed
rigs in our fleet excluding newbuild rigs under construction.(2)
    
    Information reflects the number of days that our rigs were operating under contract.(3)
    
    These units have water depth ratings of 6,000 feet or greater.(4)
    
    These units have water depth ratings of less than 6,000 feet.  35




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##### Table of Contents



Contract Drilling Services
  Nine Months EndedSeptember 30,
    
    
    Change2008
    
    
    2007
    
    
    $
    
    
    %Operating Revenues:Contract drilling services
    
    $
    2,416,312
    
    
    $
    1,953,175
    
    
    $
    463,137
    
    
    
    24
    %Reimbursables (1)
    
    
    58,039
    
    
    
    63,859
    
    
    
    (5,820
    )
    
    
    -9
    %Other
    
    
    745
    
    
    
    1,007
    
    
    
    (262
    )
    
    
    -26
    %$
    2,475,096
    
    
    $
    2,018,041
    
    
    $
    457,055
    
    
    
    23
    %Operating Costs and Expenses:Contract drilling services
    
    $
    746,117
    
    
    $
    636,168
    
    
    $
    109,949
    
    
    
    17
    %Reimbursables (1)
    
    
    50,922
    
    
    
    54,465
    
    
    
    (3,543
    )
    
    
    -7
    %Other
    
    
    
    
    
    
    163
    
    
    
    (163
    )
    
    
    -100
    %Depreciation and amortization
    
    
    258,344
    
    
    
    203,544
    
    
    
    54,800
    
    
    
    27
    %Selling, general and administrative
    
    
    55,308
    
    
    
    57,515
    
    
    
    (2,207
    )
    
    
    -4
    %Hurricane losses and recoveries, net
    
    
    10,000
    
    
    
    1,600
    
    
    
    8,400
    
    
    
    **1,120,691
    
    
    
    953,455
    
    
    
    167,236
    
    
    
    18
    %Operating Income
    
    $
    1,354,405
    
    
    $
    1,064,586
    
    
    $
    289,819
    
    
    
    27
    %
 
 **
    
    Not a meaningful percentage.(1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues.
  Noble Roy Butler, Noble
Max Smith, Noble George McLeod Noble Roy Rhodes Noble Roger Eason Noble Fri Rodli,
Noble Don Walker, Noble Roy Butler Noble Carl Norberg Noble Clyde
Boudreaux Noble Roger Lewis
 Operating Costs and Expenses. Noble Clyde Boudreaux Noble Roger Lewis,
  36




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,
   Other
  Nine Months EndedSeptember 30,
    
    
    Change2008
    
    
    2007
    
    
    $
    
    
    %Operating Revenues:Labor contract drilling services
    
    $
    47,346
    
    
    $
    116,342
    
    
    $
    (68,996
    )
    
    
    -59
    %Reimbursables (1)
    
    
    13,470
    
    
    
    27,370
    
    
    
    (13,900
    )
    
    
    -51
    %Engineering, consulting and other
    
    
    435
    
    
    
    1,946
    
    
    
    (1,511
    )
    
    
    -78
    %$
    61,251
    
    
    $
    145,658
    
    
    $
    (84,407
    )
    
    
    -58
    %Operating Costs and Expenses:Labor contract drilling services
    
    $
    37,294
    
    
    $
    93,181
    
    
    $
    (55,887
    )
    
    
    -60
    %Reimbursables (1)
    
    
    12,864
    
    
    
    25,364
    
    
    
    (12,500
    )
    
    
    -49
    %Engineering, consulting and other
    
    
    
    
    
    
    17,206
    
    
    
    (17,206
    )
    
    
    -100
    %Depreciation and amortization
    
    
    5,062
    
    
    
    6,836
    
    
    
    (1,774
    )
    
    
    -26
    %Selling, general and administrative
    
    
    1,659
    
    
    
    1,630
    
    
    
    29
    
    
    
    2
    %Gain on disposal of assets, net
    
    
    (35,521
    )
    
    
    
    
    
    
    (35,521
    )
    
    
    **21,358
    
    
    
    144,217
    
    
    
    (122,859
    )
    
    
    -85
    %Operating Income
    
    $
    39,893
    
    
    $
    1,441
    
    
    $
    38,452
    
    
    
    **
 
 **
    
    Not a meaningful percentage.(1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Kolskaya Noble Kolskaya Noble Kolskaya
   37




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##### Table of Contents



Operating Costs and Expenses. Noble Kolskaya
  Noble Kolskaya
 Other Items
 Interest Expense.
 Interest income and other, net.
 Income Tax Provision.
 LIQUIDITY AND CAPITAL RESOURCES
 Overview
     38




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##### Table of Contents



Capital Expenditures
  Noble
Danny Adkins Noble Jim Day, Noble Dave Beard Globetrotter Noble Scott Marks Noble Hans Deul
   Credit Facilities and Long-Term Debt
    39




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##### Table of Contents



NEW ACCOUNTING PRONOUNCEMENTS
 Disclosures about Derivative Instruments and Hedging Activities
 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities
 The Hierarchy of Generally Accepted Accounting
Principles
 Determining the Fair Value of a Financial
Asset When the Market for That Asset Is Not Active
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
   40




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##### Table of Contents



Foreign Currency Risk
    Accounting for Derivative Instruments and Hedging Activities
 Market Risk
  
 ITEM 4. CONTROLS AND PROCEDURES
   41




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  Our international operations involve additional risks not associated with U.S. Gulf of Mexico
operations.
  
    
    terrorist acts, war and civil disturbances;
 
    
    seizure, nationalization or expropriation of property or equipment;
 
    
    foreign and U.S. monetary policy and foreign currency fluctuations and devaluations;
 
    
    the inability to repatriate income or capital;
 
    
    complications associated with repairing and replacing equipment in remote locations;
 
    
    piracy;
 
    
    import-export quotas, wage and price controls, imposition of trade barriers and other
forms of government regulation and economic conditions that are beyond our control;
 
    
    regulatory or financial requirements to comply with foreign bureaucratic actions; and
 
    
    changing taxation policies.
  
    
    the importing, exporting, equipping and operation of drilling units;
 
    
    repatriation of foreign earnings;
 
    
    currency exchange controls;
 
    
    oil and gas exploration and development;
 
    
    taxation of offshore earnings and earnings of expatriate personnel; and
 
    
    use and compensation of local employees and suppliers by foreign contractors.
  42




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##### Table of Contents



The recent worldwide financial and credit crisis could lead to an extended worldwide economic
recession and have a material adverse effect on our financial position, results of operations and
cash flows.
   43




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##### Table of Contents



The global financial and credit crisis may have impacts on our liquidity and financial
condition that we currently cannot predict.
  We are subject to changes in tax laws.
     44




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##### Table of Contents



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total Number of
    
    
    Maximum NumberShares Purchased
    
    
    of Shares that MayTotal Number
    
    
    Average
    
    
    as Part of Publicly
    
    
    Yet Be Purchasedof Shares
    
    
    Price Paid
    
    
    Announced Plans
    
    
    Under the PlansPeriod
    
    Purchased
    
    
    per Share
    
    
    or Programs(1)
    
    
    or Programs(1)July 2008
    
    
    1,051
    (2)
    
    $
    52.29
    (2)
    
    
    
    
    
    
    25,712,000August 2008
    
    
    3,540,916
    (3)
    
    $
    49.19
    (3)
    
    
    3,537,000
    
    
    
    22,175,000September 2008
    
    
    1,847,259
    (4)
    
    $
    47.82
    (4)
    
    
    1,835,109
    
    
    
    20,339,891
 (1)
    
    All share purchases were made in the open market and were pursuant to the share repurchase
program, which Nobles Board of Directors authorized and adopted and that we announced on
January 31, 2002. Our repurchase program has no date of expiration.(2)
    
    Includes 1,051 ordinary shares at an average price of $52.29 per share acquired by
surrender to us by employees for withholding taxes payable upon the vesting of restricted
stock.(3)
    
    Includes 3,916 ordinary shares at an average price of $48.68 per share acquired by
surrender to us by employees for withholding taxes payable upon the vesting of restricted
stock. Shares repurchased pursuant to our share repurchase program were purchased at an
average share price of $49.19 per share.(4)
    
    Includes 12,150 ordinary shares at an average price of $47.38 per share acquired by
surrender to us by employees for withholding taxes payable upon the vesting of restricted
stock. Shares repurchased pursuant to our share repurchase program were purchased at an
average share price of $47.82 per share. 
 ITEM 6. EXHIBITS
   45




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SIGNATURES
  NOBLE CORPORATIONDATE:  November 7, 2008
    By:
    /s/ DAVID W. WILLIAMSDavid W. WilliamsChairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)/s/ THOMAS L. MITCHELLThomas L. MitchellSenior Vice President, Chief Financial Officer, Treasurer and Controller
(Principal Financial and Accounting Officer)  46




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INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    EXHIBIT31.1
    
    
    Certification of David W. Williams Pursuant to the U.S. Securities Exchange Act
of 1934, as amended, Rule 13a-14(a) or Rule 15d-14(a).31.2
    
    
    Certification of Thomas L. Mitchell Pursuant to the U.S. Securities Exchange
Act of 1934, as amended, Rule 13a-14(a) or Rule 15d-14(a).32.1
    +
    
    Certification of David W. Williams Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    +
    
    Certification of Thomas L. Mitchell Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 +
    
    Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K.  47