##### 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, 2006
 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: 0-13857
 NOBLE CORPORATION
  Cayman Islands
    
    98-0366361(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. employer identification number)13135 South Dairy Ashford, Suite 800
    
    77478Sugar Land, Texas
    
    (Zip code)(Address of principal executive offices)
 Registrants telephone number, including area code: (281) 276-6100
 þ o
  þ o o
 o þ




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##### 



TABLE OF CONTENTS
 PAGEPART IITEM 1. FINANCIAL STATEMENTS
    
    
    3ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    31Forward-Looking Statements
    
    
    31Executive Overview
    
    
    31Results of Operations
    
    
    32Liquidity and Capital Resources
    
    
    44ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
    
    
    48ITEM 4. CONTROLS AND PROCEDURES
    
    
    49PART IIITEM 1. LEGAL PROCEEDINGS
    
    
    49ITEM 1A. RISK FACTORS
    
    
    50ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE
OF PROCEEDS
    
    
    50ITEM 6. EXHIBITS
    
    
    51SIGNATURES
    
    
    52INDEX TO EXHIBITS
    
    
    53Certification Pursuant to Rule 13a-14a/15d-14aCertification Pursuant to Rule 13a-14a/15d-14aCertification Pursuant to Section 906Certification Pursuant to Section 906
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2006
    
    
    2005ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    140,098
    
    
    $
    121,845Investments in marketable securities
    
    
    29,652
    
    
    
    44,457Accounts receivable
    
    
    390,768
    
    
    
    276,688Insurance receivables
    
    
    50,029
    
    
    
    51,565Inventories
    
    
    4,565
    
    
    
    3,940Prepaid expenses
    
    
    20,143
    
    
    
    10,064Other current assets
    
    
    31,636
    
    
    
    13,896Total current assets
    
    
    666,891
    
    
    
    522,455PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    4,911,179
    
    
    
    4,178,097Other
    
    
    73,875
    
    
    
    66,6984,985,054
    
    
    
    4,244,795Accumulated depreciation
    
    
    (1,389,370
    )
    
    
    (1,245,776
    )3,595,684
    
    
    
    2,999,019INVESTMENTS IN MARKETABLE SECURITIES
    
    
    
    
    
    
    673,639OTHER ASSETS
    
    
    150,497
    
    
    
    151,254$
    4,413,072
    
    
    $
    4,346,367LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    9,460
    
    
    $
    8,972Accounts payable
    
    
    132,990
    
    
    
    93,914Accrued payroll and related costs
    
    
    93,273
    
    
    
    78,558Taxes payable
    
    
    53,911
    
    
    
    45,245Interest payable
    
    
    8,279
    
    
    
    9,640Other current liabilities
    
    
    38,873
    
    
    
    23,006Total current liabilities
    
    
    336,786
    
    
    
    259,335LONG-TERM DEBT
    
    
    686,929
    
    
    
    1,129,325DEFERRED INCOME TAXES
    
    
    237,380
    
    
    
    227,589OTHER LIABILITIES
    
    
    5,977
    
    
    
    6,2901,267,072
    
    
    
    1,622,539COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    (7,587
    )
    
    
    (7,906
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share; 400,000 shares authorized;
135,586 shares issued and outstanding in 2006; 137,009 shares issued
and outstanding in 2005
    
    
    13,559
    
    
    
    13,701Capital in excess of par value
    
    
    885,850
    
    
    
    1,024,470Retained earnings
    
    
    2,251,756
    
    
    
    1,736,015Restricted stock (unearned compensation)
    
    
    
    
    
    
    (17,099
    )Accumulated other comprehensive income (loss)
    
    
    2,422
    
    
    
    (25,353
    )3,153,587
    
    
    
    2,731,734$
    4,413,072
    
    
    $
    4,346,367
  3




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended September 30,2006
    
    
    2005OPERATING REVENUESContract drilling services
    
    $
    513,325
    
    
    $
    328,101Reimbursables
    
    
    24,800
    
    
    
    18,078Labor contract drilling services
    
    
    20,775
    
    
    
    17,275Engineering, consulting and other
    
    
    3,086
    
    
    
    3,751561,986
    
    
    
    367,205OPERATING COSTS AND EXPENSESContract drilling services
    
    
    186,527
    
    
    
    156,026Reimbursables
    
    
    21,534
    
    
    
    15,219Labor contract drilling services
    
    
    17,027
    
    
    
    14,967Engineering, consulting and other
    
    
    3,262
    
    
    
    5,349Depreciation and amortization
    
    
    65,560
    
    
    
    61,276Selling, general and administrative
    
    
    11,875
    
    
    
    9,324Hurricane losses and recoveries, net
    
    
    
    
    
    
    10,465305,785
    
    
    
    272,626OPERATING INCOME
    
    
    256,201
    
    
    
    94,579OTHER INCOME (EXPENSE)Interest expense, net of amount capitalized
    
    
    (882
    )
    
    
    (5,153
    )Other, net
    
    
    2,037
    
    
    
    2,093INCOME BEFORE INCOME TAXES
    
    
    257,356
    
    
    
    91,519INCOME TAX PROVISION
    
    
    (50,184
    )
    
    
    (14,996
    )NET INCOME
    
    $
    207,172
    
    
    $
    76,523NET INCOME PER SHARE:Basic
    
    $
    1.53
    
    
    $
    0.56Diluted
    
    $
    1.51
    
    
    $
    0.55
 .
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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Nine Months Ended September 30,2006
    
    
    2005OPERATING REVENUESContract drilling services
    
    $
    1,407,296
    
    
    $
    894,416Reimbursables
    
    
    68,512
    
    
    
    61,235Labor contract drilling services
    
    
    55,973
    
    
    
    52,947Engineering, consulting and other
    
    
    9,634
    
    
    
    12,9401,541,415
    
    
    
    1,021,538OPERATING COSTS AND EXPENSESContract drilling services
    
    
    535,053
    
    
    
    445,955Reimbursables
    
    
    59,130
    
    
    
    54,671Labor contract drilling services
    
    
    47,611
    
    
    
    44,632Engineering, consulting and other
    
    
    13,968
    
    
    
    16,970Depreciation and amortization
    
    
    187,466
    
    
    
    177,182Selling, general and administrative
    
    
    32,815
    
    
    
    27,241Hurricane losses and recoveries, net
    
    
    (4,404
    )
    
    
    10,465871,639
    
    
    
    777,116OPERATING INCOME
    
    
    669,776
    
    
    
    244,422OTHER INCOME (EXPENSE)Interest expense, net of amount capitalized
    
    
    (15,134
    )
    
    
    (16,280
    )Other, net
    
    
    6,431
    
    
    
    8,304INCOME BEFORE INCOME TAXES
    
    
    661,073
    
    
    
    236,446INCOME TAX PROVISION
    
    
    (128,909
    )
    
    
    (41,083
    )NET INCOME
    
    $
    532,164
    
    
    $
    195,363NET INCOME PER SHARE:Basic
    
    $
    3.90
    
    
    $
    1.44Diluted
    
    $
    3.86
    
    
    $
    1.42
 .
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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months Ended September 30,2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    532,164
    
    
    $
    195,363Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    187,466
    
    
    
    177,182Deferred income tax provision
    
    
    9,791
    
    
    
    23,745Equity in income of joint venture
    
    
    
    
    
    
    (2,790
    )Distributions received from joint venture
    
    
    
    
    
    
    2,194Share-based compensation expense
    
    
    15,830
    
    
    
    5,546Hurricane losses and recoveries, net
    
    
    
    
    
    
    10,465Other
    
    
    14,189
    
    
    
    2,572Other changes in current assets and liabilities, net of
acquired working capital:Accounts receivable
    
    
    (113,541
    )
    
    
    (61,194
    )Other current assets
    
    
    (21,861
    )
    
    
    (9,466
    )Accounts payable
    
    
    32,614
    
    
    
    903Other current liabilities
    
    
    38,610
    
    
    
    (6,568
    )Net cash provided by operating activities
    
    
    695,262
    
    
    
    337,952CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    (474,208
    )
    
    
    (89,497
    )Other capital expenditures
    
    
    (266,426
    )
    
    
    (139,752
    )Major maintenance expenditures
    
    
    (44,515
    )
    
    
    (50,140
    )Proceeds from sales of property and equipment
    
    
    
    
    
    
    1,035Proceeds from Smedvig disposition
    
    
    691,261
    
    
    
    Purchase of the remaining 50% equity interest in
the Panon, net of cash acquired
    
    
    
    
    
    
    (28,374
    )Investments in marketable securities
    
    
    
    
    
    
    (24,149
    )Proceeds from sales and maturities of marketable securities
    
    
    15,461
    
    
    
    111,736Net cash used for investing activities
    
    
    (78,427
    )
    
    
    (219,141
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on bank credit facilities
    
    
    (135,000
    )
    
    
    (65,000
    )Payments of other long-term debt
    
    
    (606,667
    )
    
    
    (6,371
    )Net proceeds from employee stock transactions
    
    
    10,932
    
    
    
    68,611Proceeds from issuance of senior notes, net of debt issuance costs
    
    
    295,851
    
    
    
    Dividends paid
    
    
    (16,423
    )
    
    
    (8,168
    )Repurchases of ordinary shares
    
    
    (147,275
    )
    
    
    Net cash used for financing activities
    
    
    (598,582
    )
    
    
    (10,928
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    18,253
    
    
    
    107,883CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    121,845
    
    
    
    58,790CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    140,098
    
    
    $
    166,673
  6




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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 Restricted
    
    
    AccumulatedCapital in
    
    
    
    
    
    
    Stock
    
    
    Other
    
    
    TotalOrdinary Shares
    
    
    Excess of
    
    
    Retained
    
    
    (Unearned
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Par Value
    
    
    Earnings
    
    
    Compensation)
    
    
    Income (Loss)
    
    
    EquityBalance at December 31, 2005
    
    
    137,009
    
    
    $
    13,701
    
    
    $
    1,024,470
    
    
    $
    1,736,015
    
    
    $
    (17,099
    )
    
    $
    (25,353
    )
    
    $
    2,731,734Share-based compensationAdoption of SFAS No. 123R
    
    
    
    
    
    
    
    
    
    
    (17,099
    )
    
    
    
    
    
    
    17,099
    
    
    
    
    
    
    
    Share-based compensation
    
    
    617
    
    
    
    62
    
    
    
    16,282
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,344Contribution to employee
benefit plans
    
    
    63
    
    
    
    6
    
    
    
    4,745
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,751Exercise of stock options
    
    
    286
    
    
    
    29
    
    
    
    10,199
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,228Tax benefit of option exercises
    
    
    
    
    
    
    
    
    
    
    2,733
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,733Restricted shares surrendered for
withholding taxes or
forfeited
    
    
    (83
    )
    
    
    (8
    )
    
    
    (2,021
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,029
    )Repurchases of ordinary shares
    
    
    (2,306
    )
    
    
    (231
    )
    
    
    (153,459
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (153,690
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    532,164
    
    
    
    
    
    
    
    
    
    
    
    532,164Dividends paid ($0.12 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,423
    )
    
    
    
    
    
    
    
    
    
    
    (16,423
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,775
    
    
    
    27,775Balance at September 30, 2006
    
    
    135,586
    
    
    $
    13,559
    
    
    $
    885,850
    
    
    $
    2,251,756
    
    
    $
    
    
    
    $
    2,422
    
    
    $
    3,153,587
  7




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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Three Months Ended September 30,2006
    
    
    2005NET INCOME
    
    $
    207,172
    
    
    $
    76,523OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    760
    
    
    
    (117
    )Unrealized holding gain on marketable securities
    
    
    213
    
    
    
    533Unrealized gain (loss) on foreign currency forward contracts
    
    
    (1,180
    )
    
    
    563Other comprehensive income (loss)
    
    
    (207
    )
    
    
    979COMPREHENSIVE INCOME
    
    $
    206,965
    
    
    $
    77,502
 Nine Months Ended September 30,2006
    
    
    2005NET INCOME
    
    $
    532,164
    
    
    $
    195,363OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    3,516
    
    
    
    (3,603
    )Unrealized holding gain on marketable securities
    
    
    19,736
    
    
    
    919Unrealized gain (loss) on foreign currency forward contracts
    
    
    2,014
    
    
    
    (1,929
    )Unrealized gain on interest rate swaps
    
    
    2,509
    
    
    
    Other comprehensive income (loss)
    
    
    27,775
    
    
    
    (4,613
    )COMPREHENSIVE INCOME
    
    $
    559,939
    
    
    $
    190,750
 .
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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 1  BASIS OF PRESENTATION
  NOTE 2  SHARE-BASED COMPENSATION
 Adoption of SFAS No. 123R
 Share-Based Payment Accounting for Stock Issued to Employees
 Earnings per Share
   9




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
  Three Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30, 2005
    
    
    September 30, 2005Net income  as reported
    
    $
    76,523
    
    
    $
    195,363Share-based compensation expense, net of tax  as reported
    
    
    1,418
    
    
    
    3,605Share-based compensation expense, net of tax  pro forma
    
    
    (2,907
    )
    
    
    (8,869
    )Net income  pro forma
    
    $
    75,034
    
    
    $
    190,099Net income per share:Basic  as reported
    
    $
    0.56
    
    
    $
    1.44Basic  pro forma
    
    $
    0.55
    
    
    $
    1.40Diluted  as reported
    
    $
    0.55
    
    
    $
    1.42Diluted  pro forma
    
    $
    0.54
    
    
    $
    1.38
 Stock Options
   Weighted-Shares
    
    AverageUnderlying Options
    
    Exercise PriceJanuary 1, 2006
    
    
    3,992,008
    
    
    $
    36.14Granted
    
    
    188,218
    
    
    
    72.97Exercised
    
    
    (286,036
    )
    
    
    35.76Forfeited
    
    
    (42,659
    )
    
    
    52.67Outstanding at September 30, 2006 (1)
    
    
    3,851,531
    
    
    
    37.93Exercisable at September 30, 2006 (1)
    
    
    3,350,711
    
    
    $
    35.00
 
 (1)
    
    At September 30, 2006, the remaining weighted average contractual life for options
outstanding and exercisable was 5.3 and 4.8 years, respectively. The aggregate intrinsic
value of options outstanding and exercisable at
September 30, 2006 was $102.8 million and $98.2 million, respectively. 10




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
  Nine Months Ended September 30, 2006Weighted-average fair value per option granted
    
    $
    24.46Weighted-average exercise price per option granted
    
    $
    72.97Valuation assumptions:Expected option term (years)
    
    
    4.6Expected volatility
    
    
    34.0
    %Expected dividend yield
    
    
    0.2
    %Risk-free interest rate
    
    
    4.6
    %
   Weighted-Shares
    
    AverageUnder Outstanding
    
    Grant-DateOptions
    
    Fair ValueNon-vested options at January 1, 2006
    
    
    816,222
    
    
    $
    18.39Granted
    
    
    188,218
    
    
    
    24.46Vested
    
    
    (461,093
    )
    
    
    18.64Forfeited
    
    
    (42,527
    )
    
    
    20.16Non-vested options at September 30, 2006
    
    
    500,820
    
    
    $
    20.34
    11




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 Restricted Stock
    Weighted-
    
    
    
    
    
    Weighted-Time-Vested
    
    Average
    
    Performance-Vested
    
    AverageRestricted
    
    Grant-Date
    
    Restricted Shares
    
    Grant-DateShares Outstanding
    
    Fair Value
    
    Outstanding (1)
    
    Fair ValueNon-vested restricted shares at
January 1, 2006
    
    
    158,297
    
    
    $
    44.32
    
    
    
    304,627
    
    
    $
    14.92Granted
    
    
    519,880
    
    
    
    74.82
    
    
    
    96,776
    
    
    
    27.68Vested
    
    
    (165,706
    )
    
    
    65.12
    
    
    
    
    
    
    
    Forfeited
    
    
    (42,867
    )
    
    
    53.33
    
    
    
    (53,998
    )
    
    
    15.97Non-vested restricted shares at
September 30, 2006
    
    
    469,604
    
    
    $
    71.44
    
    
    
    347,405
    
    
    $
    18.31
 
 (1)
    
    The number of performance-vested restricted shares shown equals the shares that would vest
if the maximum level of performance is achieved. The minimum number of shares is zero and
the target level of performance is 67 percent of the amounts shown.  12




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
    Valuation assumptions:Expected volatility
    
    
    30.0
    %Expected dividend yield
    
    
    0.2
    %Risk-free interest rate
    
    
    4.8
    %
  NOTE 3  NET INCOME PER SHARE
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Weighted-average shares outstanding  basic
    
    
    135,665
    
    
    
    136,708
    
    
    
    136,392
    
    
    
    136,013Effect of potentially dilutive shares:Stock options
    
    
    1,255
    
    
    
    1,405
    
    
    
    1,379
    
    
    
    1,334Non-vested time-vested restricted stock
    
    
    12
    
    
    
    
    
    
    
    81
    
    
    
    Non-vested performance-vested restricted stock
    
    
    66
    
    
    
    
    
    
    
    61
    
    
    
    Weighted-average shares  diluted
    
    
    136,998
    
    
    
    138,113
    
    
    
    137,913
    
    
    
    137,347Net income  basic and diluted
    
    $
    207,172
    
    
    $
    76,523
    
    
    $
    532,164
    
    
    $
    195,363Net income per share:Basic
    
    $
    1.53
    
    
    $
    0.56
    
    
    $
    3.90
    
    
    $
    1.44Diluted
    
    $
    1.51
    
    
    $
    0.55
    
    
    $
    3.86
    
    
    $
    1.42
  13




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
  NOTE 4  MARKETABLE SECURITIES
      Accounting for
Certain Investments in Debt and Equity Securities,
 Accounting for Derivative Instruments and Hedging
Activities
 14




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##### 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 5  PROPERTY AND EQUIPMENT
  Panon, Panon Noble Harvey Duhaney
  Noble Jim Thompson Noble Max Smith Noble Paul Romano Noble Amos Runner
 NOTE 6  DEBT
  NOTE 7  COMMITMENTS AND CONTINGENCIES
   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.)
     NOTE 8  EMPLOYEE BENEFIT PLANS
  16




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
    Three Months Ended September 30,2006
    
    
    2005International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    776
    
    
    $
    1,357
    
    
    $
    618
    
    
    $
    1,159Interest cost
    
    
    792
    
    
    
    1,236
    
    
    
    659
    
    
    
    1,079Return on plan assets
    
    
    (899
    )
    
    
    (1,449
    )
    
    
    (733
    )
    
    
    (1,179
    )Amortization of prior service cost
    
    
    
    
    
    
    84
    
    
    
    
    
    
    
    111Amortization of transition obligation
    
    
    39
    
    
    
    
    
    
    
    61
    
    
    
    Recognized net actuarial loss (gain)
    
    
    88
    
    
    
    344
    
    
    
    (18
    )
    
    
    162Net pension expense
    
    $
    796
    
    
    $
    1,572
    
    
    $
    587
    
    
    $
    1,332
 Nine Months Ended September 30,2006
    
    
    2005International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    2,328
    
    
    $
    4,071
    
    
    $
    1,855
    
    
    $
    3,478Interest cost
    
    
    2,376
    
    
    
    3,708
    
    
    
    1,977
    
    
    
    3,238Return on plan assets
    
    
    (2,697
    )
    
    
    (4,347
    )
    
    
    (2,200
    )
    
    
    (3,538
    )Amortization of prior service cost
    
    
    
    
    
    
    252
    
    
    
    
    
    
    
    334Amortization of transition obligation
    
    
    117
    
    
    
    
    
    
    
    183
    
    
    
    Recognized net actuarial loss (gain)
    
    
    264
    
    
    
    1,032
    
    
    
    (55
    )
    
    
    485Net pension expense
    
    $
    2,388
    
    
    $
    4,716
    
    
    $
    1,760
    
    
    $
    3,997
   17




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 9  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   Accounting for Certain Derivative Instruments and
Certain Hedging Activities (an amendment of FASB Statement No. 133), Amendment of
Statement 133 on Derivative Instruments and Hedging Activities
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net unrealized gain (loss) at beginning of period
    
    $
    1,797
    
    
    $
    (2,492
    )
    
    $
    (3,906
    )
    
    $
    Activity during period:Settlement of forward contracts outstanding at
beginning of period
    
    
    (942
    )
    
    
    933
    
    
    
    1,431
    
    
    
    Net unrealized gain (loss) on outstanding
foreign currency forward contracts
    
    
    (238
    )
    
    
    (370
    )
    
    
    583
    
    
    
    (1,929
    )Settlement of interest rate swaps
    
    
    
    
    
    
    
    
    
    
    2,509
    
    
    
    Net unrealized gain (loss) at September 30
    
    $
    617
    
    
    $
    (1,929
    )
    
    $
    617
    
    
    $
    (1,929
    )
 18




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 10  SEGMENT AND RELATED INFORMATION
 Disclosure about Segments of an Enterprise and Related
Information
   19




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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.)
 International
    
    Domestic
    
    EngineeringContract
    
    Contract
    
    &Drilling
    
    Drilling
    
    ConsultingServices
    
    Services
    
    Services
    
    Other
    
    TotalThree Months Ended September 30, 2006Revenues from external customers
    
    $
    390,757
    
    
    $
    143,372
    
    
    $
    1,836
    
    
    $
    26,021
    
    
    $
    561,986Depreciation and amortization
    
    
    52,823
    
    
    
    12,052
    
    
    
    15
    
    
    
    670
    
    
    
    65,560Interest expense, net of amount
capitalized
    
    
    7,151
    
    
    
    3,355
    
    
    
    43
    
    
    
    (9,667
    )
    
    
    882Income tax provision (benefit)
    
    
    21,200
    
    
    
    29,131
    
    
    
    (690
    )
    
    
    543
    
    
    
    50,184Segment profit (loss)
    
    
    131,811
    
    
    
    58,838
    
    
    
    (1,109
    )
    
    
    17,632
    
    
    
    207,172Total assets (at end of period)
    
    
    2,824,225
    
    
    
    1,222,584
    
    
    
    23,077
    
    
    
    343,186
    
    
    
    4,413,072Capital expenditures
    
    
    213,693
    
    
    
    93,144
    
    
    
    
    
    
    
    9,427
    
    
    
    316,264Three Months Ended September 30, 2005Revenues from external customers
    
    $
    259,733
    
    
    $
    82,736
    
    
    $
    2,954
    
    
    $
    21,782
    
    
    $
    367,205Depreciation and amortization
    
    
    48,126
    
    
    
    12,247
    
    
    
    84
    
    
    
    819
    
    
    
    61,276Interest expense, net of amount
capitalized
    
    
    4,882
    
    
    
    2,722
    
    
    
    38
    
    
    
    (2,489
    )
    
    
    5,153Income tax provision (benefit)
    
    
    11,474
    
    
    
    3,977
    
    
    
    175
    
    
    
    (630
    )
    
    
    14,996Segment profit (loss)
    
    
    64,264
    
    
    
    12,536
    
    
    
    (2,400
    )
    
    
    2,123
    
    
    
    76,523Total assets (at end of period)
    
    
    2,349,819
    
    
    
    1,077,043
    
    
    
    30,081
    
    
    
    135,269
    
    
    
    3,592,212Capital expenditures
    
    
    89,237
    
    
    
    8,902
    
    
    
    
    
    
    
    148,845
    
    
    
    246,984
 International
    
    Domestic
    
    EngineeringContract
    
    Contract
    
    &Drilling
    
    Drilling
    
    ConsultingServices
    
    Services
    
    Services
    
    Other
    
    TotalNine Months Ended September 30, 2006Revenues from external customers
    
    $
    1,037,166
    
    
    $
    425,638
    
    
    $
    7,222
    
    
    $
    71,389
    
    
    $
    1,541,415Depreciation and amortization
    
    
    148,247
    
    
    
    36,962
    
    
    
    288
    
    
    
    1,969
    
    
    
    187,466Interest expense, net of amount
capitalized
    
    
    19,881
    
    
    
    10,615
    
    
    
    127
    
    
    
    (15,489
    )
    
    
    15,134Income tax provision (benefit)
    
    
    47,481
    
    
    
    82,144
    
    
    
    (3,077
    )
    
    
    2,361
    
    
    
    128,909Segment profit (loss)
    
    
    340,728
    
    
    
    170,425
    
    
    
    (5,424
    )
    
    
    26,435
    
    
    
    532,164Total assets (at end of period)
    
    
    2,824,225
    
    
    
    1,222,584
    
    
    
    23,077
    
    
    
    343,186
    
    
    
    4,413,072Capital expenditures
    
    
    480,686
    
    
    
    260,565
    
    
    
    
    
    
    
    43,898
    
    
    
    785,149Nine Months Ended September 30, 2005Revenues from external customers
    
    $
    707,846
    
    
    $
    228,051
    
    
    $
    18,810
    
    
    $
    66,831
    
    
    $
    1,021,538Depreciation and amortization
    
    
    139,462
    
    
    
    35,030
    
    
    
    281
    
    
    
    2,409
    
    
    
    177,182Interest expense, net of amount
capitalized
    
    
    14,650
    
    
    
    9,182
    
    
    
    109
    
    
    
    (7,661
    )
    
    
    16,280Income tax provision (benefit)
    
    
    28,076
    
    
    
    13,804
    
    
    
    683
    
    
    
    (1,480
    )
    
    
    41,083Segment profit (loss)
    
    
    148,277
    
    
    
    46,980
    
    
    
    (6,258
    )
    
    
    6,364
    
    
    
    195,363Total assets (at end of period)
    
    
    2,349,819
    
    
    
    1,077,043
    
    
    
    30,081
    
    
    
    135,269
    
    
    
    3,592,212Capital expenditures
    
    
    173,366
    
    
    
    36,954
    
    
    
    
    
    
    
    174,827
    
    
    
    385,147
 20




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 11  ACCOUNTING PRONOUNCEMENTS
 Employers Accounting for Defined Benefit Pension and Other Postretirement Plansan amendment of
SFAS Nos. 87, 88, 106, and 132(R)
 Accounting for Uncertainty in Income
Taxes
 Fair Value Measurements
 Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements
 21




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 12  GUARANTEES OF REGISTERED SECURITIES
    22




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
September 30, 2006
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    6,610
    
    
    $
    6,997
    
    
    $
    
    
    
    $
    126,491
    
    
    $
    
    
    
    $
    140,098Investments in marketable securities
    
    
    
    
    
    
    9,103
    
    
    
    
    
    
    
    20,549
    
    
    
    
    
    
    
    29,652Accounts receivable
    
    
    
    
    
    
    3,864
    
    
    
    14,920
    
    
    
    371,984
    
    
    
    
    
    
    
    390,768Insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,029
    
    
    
    
    
    
    
    50,029Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,565
    
    
    
    
    
    
    
    4,565Prepaid expenses
    
    
    
    
    
    
    303
    
    
    
    299
    
    
    
    19,541
    
    
    
    
    
    
    
    20,143Accounts receivable from affiliates
    
    
    431,021
    
    
    
    
    
    
    
    461,630
    
    
    
    
    
    
    
    (892,651
    )
    
    
    Other current assets
    
    
    2
    
    
    
    108
    
    
    
    247
    
    
    
    63,803
    
    
    
    (32,524
    )
    
    
    31,636Total current assets
    
    
    437,633
    
    
    
    20,375
    
    
    
    477,096
    
    
    
    656,962
    
    
    
    (925,175
    )
    
    
    666,891PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    
    
    922,468
    
    
    
    102,880
    
    
    
    3,885,831
    
    
    
    
    
    
    
    4,911,179Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73,875
    
    
    
    
    
    
    
    73,875
    
    
    
    922,468
    
    
    
    102,880
    
    
    
    3,959,706
    
    
    
    
    
    
    
    4,985,054Accumulated depreciation
    
    
    
    
    
    
    (54,638
    )
    
    
    (59,259
    )
    
    
    (1,275,473
    )
    
    
    
    
    
    
    (1,389,370
    )
    
    
    
    867,830
    
    
    
    43,621
    
    
    
    2,684,233
    
    
    
    
    
    
    
    3,595,684NOTES RECEIVABLE FROM AFFILIATES
    
    
    511,835
    
    
    
    
    
    
    
    44,159
    
    
    
    683,560
    
    
    
    (1,239,554
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    2,515,365
    
    
    
    2,772,700
    
    
    
    2,314,148
    
    
    
    
    
    
    
    (7,602,213
    )
    
    
    OTHER ASSETS
    
    
    3,893
    
    
    
    4,578
    
    
    
    3,635
    
    
    
    138,391
    
    
    
    
    
    
    
    150,497$
    3,468,726
    
    
    $
    3,665,483
    
    
    $
    2,882,659
    
    
    $
    4,163,146
    
    
    $
    (9,766,942
    )
    
    $
    4,413,072LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    9,460
    
    
    $
    
    
    
    $
    9,460Accounts payable
    
    
    6,597
    
    
    
    6,711
    
    
    
    1,313
    
    
    
    118,369
    
    
    
    
    
    
    
    132,990Accrued payroll and related costs
    
    
    2,511
    
    
    
    34
    
    
    
    15,537
    
    
    
    75,191
    
    
    
    
    
    
    
    93,273Taxes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,911
    
    
    
    
    
    
    
    53,911Interest payable
    
    
    6,277
    
    
    
    19,153
    
    
    
    1,199
    
    
    
    14,174
    
    
    
    (32,524
    )
    
    
    8,279Accounts payable to affiliates
    
    
    
    
    
    
    499,341
    
    
    
    
    
    
    
    393,310
    
    
    
    (892,651
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    
    
    
    
    2,348
    
    
    
    36,525
    
    
    
    
    
    
    
    38,873Total current liabilities
    
    
    15,385
    
    
    
    525,239
    
    
    
    20,397
    
    
    
    700,940
    
    
    
    (925,175
    )
    
    
    336,786LONG-TERM DEBT
    
    
    299,754
    
    
    
    
    
    
    
    351,669
    
    
    
    35,506
    
    
    
    
    
    
    
    686,929NOTES PAYABLE TO AFFILIATES
    
    
    
    
    
    
    683,560
    
    
    
    
    
    
    
    555,994
    
    
    
    (1,239,554
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    (2,700
    )
    
    
    13,200
    
    
    
    226,880
    
    
    
    
    
    
    
    237,380OTHER LIABILITIES
    
    
    
    
    
    
    1,043
    
    
    
    2,201
    
    
    
    2,733
    
    
    
    
    
    
    
    5,977315,139
    
    
    
    1,207,142
    
    
    
    387,467
    
    
    
    1,522,053
    
    
    
    (2,164,729
    )
    
    
    1,267,072COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,587
    )
    
    
    
    
    
    
    (7,587
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    13,559
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,559Capital in excess of par value
    
    
    885,850
    
    
    
    1,149,966
    
    
    
    870,744
    
    
    
    750,678
    
    
    
    (2,771,388
    )
    
    
    885,850Retained earnings
    
    
    2,251,756
    
    
    
    1,308,409
    
    
    
    1,624,443
    
    
    
    1,895,580
    
    
    
    (4,828,432
    )
    
    
    2,251,756Accumulated other comprehensive
income (loss)
    
    
    2,422
    
    
    
    (34
    )
    
    
    5
    
    
    
    2,422
    
    
    
    (2,393
    )
    
    
    2,4223,153,587
    
    
    
    2,458,341
    
    
    
    2,495,192
    
    
    
    2,648,680
    
    
    
    (7,602,213
    )
    
    
    3,153,587$
    3,468,726
    
    
    $
    3,665,483
    
    
    $
    2,882,659
    
    
    $
    4,163,146
    
    
    $
    (9,766,942
    )
    
    $
    4,413,072
 23




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
December 31, 2005
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    13,957
    
    
    $
    3,119
    
    
    $
    
    
    
    $
    104,769
    
    
    $
    
    
    
    $
    121,845Investments in marketable securities
    
    
    
    
    
    
    18,036
    
    
    
    
    
    
    
    26,421
    
    
    
    
    
    
    
    44,457Accounts receivable
    
    
    
    
    
    
    4,129
    
    
    
    8,611
    
    
    
    263,948
    
    
    
    
    
    
    
    276,688Insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,565
    
    
    
    
    
    
    
    51,565Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,940
    
    
    
    
    
    
    
    3,940Prepaid expenses
    
    
    
    
    
    
    251
    
    
    
    321
    
    
    
    9,492
    
    
    
    
    
    
    
    10,064Accounts receivable from affiliates
    
    
    273,597
    
    
    
    
    
    
    
    524,596
    
    
    
    
    
    
    
    (798,193
    )
    
    
    Other current assets
    
    
    
    
    
    
    172
    
    
    
    247
    
    
    
    42,354
    
    
    
    (28,877
    )
    
    
    13,896Total current assets
    
    
    287,554
    
    
    
    25,707
    
    
    
    533,775
    
    
    
    502,489
    
    
    
    (827,070
    )
    
    
    522,455PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    
    
    568,119
    
    
    
    99,591
    
    
    
    3,510,387
    
    
    
    
    
    
    
    4,178,097Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,698
    
    
    
    
    
    
    
    66,698
    
    
    
    568,119
    
    
    
    99,591
    
    
    
    3,577,085
    
    
    
    
    
    
    
    4,244,795Accumulated depreciation
    
    
    
    
    
    
    (37,843
    )
    
    
    (56,143
    )
    
    
    (1,151,790
    )
    
    
    
    
    
    
    (1,245,776
    )
    
    
    
    530,276
    
    
    
    43,448
    
    
    
    2,425,295
    
    
    
    
    
    
    
    2,999,019NOTES RECEIVABLE FROM AFFILIATES
    
    
    511,835
    
    
    
    
    
    
    
    744,159
    
    
    
    1,345,577
    
    
    
    (2,601,571
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    1,960,241
    
    
    
    2,238,517
    
    
    
    2,029,863
    
    
    
    
    
    
    
    (6,228,621
    )
    
    
    INVESTMENTS IN MARKETABLE
SECURITIES
    
    
    672,104
    
    
    
    
    
    
    
    
    
    
    
    1,535
    
    
    
    
    
    
    
    673,639OTHER ASSETS
    
    
    
    
    
    
    4,105
    
    
    
    4,404
    
    
    
    142,745
    
    
    
    
    
    
    
    151,254$
    3,431,734
    
    
    $
    2,798,605
    
    
    $
    3,355,649
    
    
    $
    4,417,641
    
    
    $
    (9,657,262
    )
    
    $
    4,346,367LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    
    
    
    $
    21,562
    
    
    $
    
    
    
    $
    8,972
    
    
    $
    (21,562
    )
    
    $
    8,972Accounts payable
    
    
    
    
    
    
    2,398
    
    
    
    1,805
    
    
    
    89,711
    
    
    
    
    
    
    
    93,914Accrued payroll and related costs
    
    
    
    
    
    
    
    
    
    
    16,388
    
    
    
    62,170
    
    
    
    
    
    
    
    78,558Taxes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,245
    
    
    
    
    
    
    
    45,245Interest payable
    
    
    
    
    
    
    
    
    
    
    8,718
    
    
    
    8,237
    
    
    
    (7,315
    )
    
    
    9,640Accounts payable to affiliates
    
    
    
    
    
    
    167,416
    
    
    
    
    
    
    
    630,777
    
    
    
    (798,193
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    
    
    
    
    146
    
    
    
    22,860
    
    
    
    
    
    
    
    23,006Total current liabilities
    
    
    
    
    
    
    191,376
    
    
    
    27,057
    
    
    
    867,972
    
    
    
    (827,070
    )
    
    
    259,335LONG-TERM DEBT
    
    
    
    
    
    
    32,421
    
    
    
    1,086,661
    
    
    
    10,243
    
    
    
    
    
    
    
    1,129,325NOTES PAYABLE TO AFFILIATES
    
    
    700,000
    
    
    
    645,577
    
    
    
    
    
    
    
    1,255,994
    
    
    
    (2,601,571
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    (2,700
    )
    
    
    13,016
    
    
    
    217,273
    
    
    
    
    
    
    
    227,589OTHER LIABILITIES
    
    
    
    
    
    
    1,043
    
    
    
    2,509
    
    
    
    2,738
    
    
    
    
    
    
    
    6,290700,000
    
    
    
    867,717
    
    
    
    1,129,243
    
    
    
    2,354,220
    
    
    
    (3,428,641
    )
    
    
    1,622,539COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,906
    )
    
    
    
    
    
    
    (7,906
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    13,701
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,701Capital in excess of par value
    
    
    1,024,470
    
    
    
    1,149,965
    
    
    
    870,744
    
    
    
    374,810
    
    
    
    (2,395,519
    )
    
    
    1,024,470Retained earnings
    
    
    1,736,015
    
    
    
    781,160
    
    
    
    1,355,662
    
    
    
    1,721,870
    
    
    
    (3,858,692
    )
    
    
    1,736,015Restricted stock (unearned compensation)
    
    
    (17,099
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,099
    )Accumulated other comprehensive
income (loss)
    
    
    (25,353
    )
    
    
    (237
    )
    
    
    
    
    
    
    (25,353
    )
    
    
    25,590
    
    
    
    (25,353
    )2,731,734
    
    
    
    1,930,888
    
    
    
    2,226,406
    
    
    
    2,071,327
    
    
    
    (6,228,621
    )
    
    
    2,731,734$
    3,431,734
    
    
    $
    2,798,605
    
    
    $
    3,355,649
    
    
    $
    4,417,641
    
    
    $
    (9,657,262
    )
    
    $
    4,346,367
 24




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2006
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    11,371
    
    
    $
    11,824
    
    
    $
    490,130
    
    
    $
    
    
    
    $
    513,325Reimbursables
    
    
    
    
    
    
    169
    
    
    
    106
    
    
    
    24,525
    
    
    
    
    
    
    
    24,800Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,775
    
    
    
    
    
    
    
    20,775Engineering, consulting and other
    
    
    
    
    
    
    12,949
    
    
    
    
    
    
    
    3,086
    
    
    
    (12,949
    )
    
    
    3,086
    
    
    
    24,489
    
    
    
    11,930
    
    
    
    538,516
    
    
    
    (12,949
    )
    
    
    561,986OPERATING COSTS AND EXPENSESContract drilling services
    
    
    6,131
    
    
    
    6,062
    
    
    
    3,062
    
    
    
    184,221
    
    
    
    (12,949
    )
    
    
    186,527Reimbursables
    
    
    
    
    
    
    143
    
    
    
    106
    
    
    
    21,285
    
    
    
    
    
    
    
    21,534Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,027
    
    
    
    
    
    
    
    17,027Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,262
    
    
    
    
    
    
    
    3,262Depreciation and amortization
    
    
    
    
    
    
    6,393
    
    
    
    1,235
    
    
    
    57,932
    
    
    
    
    
    
    
    65,560Selling, general and administrative
    
    
    2,249
    
    
    
    488
    
    
    
    161
    
    
    
    8,977
    
    
    
    
    
    
    
    11,8758,380
    
    
    
    13,086
    
    
    
    4,564
    
    
    
    292,704
    
    
    
    (12,949
    )
    
    
    305,785OPERATING INCOME (LOSS)
    
    
    (8,380
    )
    
    
    11,403
    
    
    
    7,366
    
    
    
    245,812
    
    
    
    
    
    
    
    256,201OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    219,389
    
    
    
    208,677
    
    
    
    104,429
    
    
    
    
    
    
    
    (532,495
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (4,611
    )
    
    
    (13,526
    )
    
    
    (6,565
    )
    
    
    12,538
    
    
    
    11,282
    
    
    
    (882
    )Other, net
    
    
    774
    
    
    
    (3,364
    )
    
    
    2,500
    
    
    
    13,409
    
    
    
    (11,282
    )
    
    
    2,037INCOME BEFORE INCOME TAXES
    
    
    207,172
    
    
    
    203,190
    
    
    
    107,730
    
    
    
    271,759
    
    
    
    (532,495
    )
    
    
    257,356INCOME TAX (PROVISION) BENEFIT
    
    
    
    
    
    
    3,834
    
    
    
    (1,156
    )
    
    
    (52,862
    )
    
    
    
    
    
    
    (50,184
    )NET INCOME
    
    $
    207,172
    
    
    $
    207,024
    
    
    $
    106,574
    
    
    $
    218,897
    
    
    $
    (532,495
    )
    
    $
    207,172
 25




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2005
 Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    NHC
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    
    
    
    $
    7,605
    
    
    $
    320,496
    
    
    $
    
    
    
    $
    328,101Reimbursables
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    18,051
    
    
    
    
    
    
    
    18,078Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,275
    
    
    
    
    
    
    
    17,275Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    3,731
    
    
    
    
    
    
    
    3,751
    
    
    
    
    
    
    
    7,652
    
    
    
    359,553
    
    
    
    
    
    
    
    367,205OPERATING COSTS AND EXPENSESContract drilling services
    
    
    66
    
    
    
    
    
    
    
    1,295
    
    
    
    154,665
    
    
    
    
    
    
    
    156,026Reimbursables
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    15,192
    
    
    
    
    
    
    
    15,219Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,967
    
    
    
    
    
    
    
    14,967Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,349
    
    
    
    
    
    
    
    5,349Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    1,446
    
    
    
    59,830
    
    
    
    
    
    
    
    61,276Selling, general and administrative
    
    
    601
    
    
    
    
    
    
    
    (222
    )
    
    
    8,945
    
    
    
    
    
    
    
    9,324Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,465
    
    
    
    
    
    
    
    10,465667
    
    
    
    
    
    
    
    2,546
    
    
    
    269,413
    
    
    
    
    
    
    
    272,626OPERATING INCOME (LOSS)
    
    
    (667
    )
    
    
    
    
    
    
    5,106
    
    
    
    90,140
    
    
    
    
    
    
    
    94,579OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    76,773
    
    
    
    62,547
    
    
    
    63,882
    
    
    
    
    
    
    
    (203,202
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (2
    )
    
    
    (10,996
    )
    
    
    (7,160
    )
    
    
    2,009
    
    
    
    10,996
    
    
    
    (5,153
    )Other, net
    
    
    419
    
    
    
    
    
    
    
    
    
    
    
    12,670
    
    
    
    (10,996
    )
    
    
    2,093INCOME BEFORE INCOME TAXES
    
    
    76,523
    
    
    
    51,551
    
    
    
    61,828
    
    
    
    104,819
    
    
    
    (203,202
    )
    
    
    91,519INCOME TAX (PROVISION) BENEFIT
    
    
    
    
    
    
    3,848
    
    
    
    719
    
    
    
    (19,563
    )
    
    
    
    
    
    
    (14,996
    )NET INCOME
    
    $
    76,523
    
    
    $
    55,399
    
    
    $
    62,547
    
    
    $
    85,256
    
    
    $
    (203,202
    )
    
    $
    76,523
 26




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2006
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    30,355
    
    
    $
    33,258
    
    
    $
    1,343,683
    
    
    $
    
    
    
    $
    1,407,296Reimbursables
    
    
    
    
    
    
    374
    
    
    
    173
    
    
    
    67,965
    
    
    
    
    
    
    
    68,512Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,973
    
    
    
    
    
    
    
    55,973Engineering, consulting and other
    
    
    
    
    
    
    38,289
    
    
    
    
    
    
    
    9,634
    
    
    
    (38,289
    )
    
    
    9,634
    
    
    
    69,018
    
    
    
    33,431
    
    
    
    1,477,255
    
    
    
    (38,289
    )
    
    
    1,541,415OPERATING COSTS AND EXPENSESContract drilling services
    
    
    14,658
    
    
    
    15,968
    
    
    
    6,092
    
    
    
    536,624
    
    
    
    (38,289
    )
    
    
    535,053Reimbursables
    
    
    
    
    
    
    286
    
    
    
    173
    
    
    
    58,671
    
    
    
    
    
    
    
    59,130Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,611
    
    
    
    
    
    
    
    47,611Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,968
    
    
    
    
    
    
    
    13,968Depreciation and amortization
    
    
    
    
    
    
    18,821
    
    
    
    3,782
    
    
    
    164,863
    
    
    
    
    
    
    
    187,466Selling, general and administrative
    
    
    3,635
    
    
    
    1,555
    
    
    
    499
    
    
    
    27,126
    
    
    
    
    
    
    
    32,815Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,404
    )
    
    
    
    
    
    
    (4,404
    )18,293
    
    
    
    36,630
    
    
    
    10,546
    
    
    
    844,459
    
    
    
    (38,289
    )
    
    
    871,639OPERATING INCOME (LOSS)
    
    
    (18,293
    )
    
    
    32,388
    
    
    
    22,885
    
    
    
    632,796
    
    
    
    
    
    
    
    669,776OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    555,125
    
    
    
    508,702
    
    
    
    266,080
    
    
    
    
    
    
    
    (1,329,907
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (6,500
    )
    
    
    (40,301
    )
    
    
    (32,460
    )
    
    
    31,250
    
    
    
    32,877
    
    
    
    (15,134
    )Other, net
    
    
    1,832
    
    
    
    (3,253
    )
    
    
    (14,278
    )
    
    
    55,007
    
    
    
    (32,877
    )
    
    
    6,431INCOME BEFORE INCOME TAXES
    
    
    532,164
    
    
    
    497,536
    
    
    
    242,227
    
    
    
    719,053
    
    
    
    (1,329,907
    )
    
    
    661,073INCOME TAX (PROVISION) BENEFIT
    
    
    
    
    
    
    11,507
    
    
    
    8,348
    
    
    
    (148,764
    )
    
    
    
    
    
    
    (128,909
    )NET INCOME
    
    $
    532,164
    
    
    $
    509,043
    
    
    $
    250,575
    
    
    $
    570,289
    
    
    $
    (1,329,907
    )
    
    $
    532,164
 27




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2005
 Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    NHC
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    
    
    
    $
    21,965
    
    
    $
    872,451
    
    
    $
    
    
    
    $
    894,416Reimbursables
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    61,206
    
    
    
    
    
    
    
    61,235Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,947
    
    
    
    
    
    
    
    52,947Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    63
    
    
    
    12,877
    
    
    
    
    
    
    
    12,940
    
    
    
    
    
    
    
    22,057
    
    
    
    999,481
    
    
    
    
    
    
    
    1,021,538OPERATING COSTS AND EXPENSESContract drilling services
    
    
    100
    
    
    
    
    
    
    
    4,351
    
    
    
    441,504
    
    
    
    
    
    
    
    445,955Reimbursables
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    54,642
    
    
    
    
    
    
    
    54,671Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,632
    
    
    
    
    
    
    
    44,632Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,970
    
    
    
    
    
    
    
    16,970Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    4,635
    
    
    
    172,547
    
    
    
    
    
    
    
    177,182Selling, general and administrative
    
    
    816
    
    
    
    
    
    
    
    228
    
    
    
    26,197
    
    
    
    
    
    
    
    27,241Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,465
    
    
    
    
    
    
    
    10,465916
    
    
    
    
    
    
    
    9,243
    
    
    
    766,957
    
    
    
    
    
    
    
    777,116OPERATING INCOME (LOSS)
    
    
    (916
    )
    
    
    
    
    
    
    12,814
    
    
    
    232,524
    
    
    
    
    
    
    
    244,422OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    193,988
    
    
    
    166,561
    
    
    
    172,312
    
    
    
    
    
    
    
    (532,861
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (2
    )
    
    
    (34,193
    )
    
    
    (21,660
    )
    
    
    5,382
    
    
    
    34,193
    
    
    
    (16,280
    )Other, net
    
    
    2,377
    
    
    
    
    
    
    
    (1
    )
    
    
    40,121
    
    
    
    (34,193
    )
    
    
    8,304INCOME BEFORE INCOME TAXES
    
    
    195,447
    
    
    
    132,368
    
    
    
    163,465
    
    
    
    278,027
    
    
    
    (532,861
    )
    
    
    236,446INCOME TAX (PROVISION) BENEFIT
    
    
    (84
    )
    
    
    12,002
    
    
    
    3,096
    
    
    
    (56,097
    )
    
    
    
    
    
    
    (41,083
    )NET INCOME
    
    $
    195,363
    
    
    $
    144,370
    
    
    $
    166,561
    
    
    $
    221,930
    
    
    $
    (532,861
    )
    
    $
    195,363
 28




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2006
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    532,164
    
    
    $
    509,043
    
    
    $
    250,575
    
    
    $
    570,289
    
    
    $
    (1,329,907
    )
    
    $
    532,164Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    18,821
    
    
    
    3,782
    
    
    
    164,863
    
    
    
    
    
    
    
    187,466Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    184
    
    
    
    9,607
    
    
    
    
    
    
    
    9,791Share-based compensation expense
    
    
    15,830
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,830Equity earnings in affiliates
    
    
    (555,125
    )
    
    
    (508,702
    )
    
    
    (266,080
    )
    
    
    
    
    
    
    1,329,907
    
    
    
    Other
    
    
    31,668
    
    
    
    322
    
    
    
    (1,072
    )
    
    
    (16,729
    )
    
    
    
    
    
    
    14,189Other changes in current assets and liabilities, net of
acquired working capital:Accounts receivable
    
    
    
    
    
    
    (265
    )
    
    
    6,309
    
    
    
    (119,585
    )
    
    
    
    
    
    
    (113,541
    )Other current assets
    
    
    2
    
    
    
    (64
    )
    
    
    (22
    )
    
    
    (21,777
    )
    
    
    
    
    
    
    (21,861
    )Accounts payable
    
    
    6,597
    
    
    
    4,313
    
    
    
    (492
    )
    
    
    22,196
    
    
    
    
    
    
    
    32,614Other current liabilities
    
    
    8,788
    
    
    
    19,187
    
    
    
    (6,168
    )
    
    
    16,803
    
    
    
    
    
    
    
    38,610Net cash provided by (used for) operating
activities
    
    
    39,924
    
    
    
    42,655
    
    
    
    (12,984
    )
    
    
    625,667
    
    
    
    
    
    
    
    695,262CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    (354,349
    )
    
    
    
    
    
    
    (119,859
    )
    
    
    
    
    
    
    (474,208
    )Other capital expenditures
    
    
    
    
    
    
    
    
    
    
    (3,289
    )
    
    
    (263,137
    )
    
    
    
    
    
    
    (266,426
    )Major maintenance expenditures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (44,515
    )
    
    
    
    
    
    
    (44,515
    )Repayments from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,388
    
    
    
    (17,388
    )
    
    
    Notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    27,896
    
    
    
    
    
    
    
    (27,896
    )
    
    
    Proceeds from Smedvig disposition
    
    
    691,261
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    691,261Proceeds from sales and maturities of
marketable securities
    
    
    
    
    
    
    8,933
    
    
    
    
    
    
    
    6,528
    
    
    
    
    
    
    
    15,461Net cash provided by (used for) investing
activities
    
    
    691,261
    
    
    
    (345,416
    )
    
    
    24,607
    
    
    
    (403,595
    )
    
    
    (45,284
    )
    
    
    (78,427
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on bank credit facilities
    
    
    
    
    
    
    
    
    
    
    (135,000
    )
    
    
    
    
    
    
    
    
    
    
    (135,000
    )Payments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    (600,000
    )
    
    
    (6,667
    )
    
    
    
    
    
    
    (606,667
    )Accounts receivable from affiliates
    
    
    (853,721
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    853,721
    
    
    
    Accounts payable to affiliates
    
    
    
    
    
    
    324,027
    
    
    
    723,377
    
    
    
    (193,683
    )
    
    
    (853,721
    )
    
    
    Note payable to affiliate
    
    
    (27,896
    )
    
    
    (17,388
    )
    
    
    
    
    
    
    
    
    
    
    45,284
    
    
    
    Net proceeds from employee stock transactions
    
    
    10,932
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,932Proceeds from issuance of senior notes, net of
debt issuance costs
    
    
    295,851
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    295,851Dividends paid
    
    
    (16,423
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,423
    )Repurchases of ordinary shares
    
    
    (147,275
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (147,275
    )Net cash provided by (used for) financing
activities
    
    
    (738,532
    )
    
    
    306,639
    
    
    
    (11,623
    )
    
    
    (200,350
    )
    
    
    45,284
    
    
    
    (598,582
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    (7,347
    )
    
    
    3,878
    
    
    
    
    
    
    
    21,722
    
    
    
    
    
    
    
    18,253CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    13,957
    
    
    
    3,119
    
    
    
    
    
    
    
    104,769
    
    
    
    
    
    
    
    121,845CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    6,610
    
    
    $
    6,997
    
    
    $
    
    
    
    $
    126,491
    
    
    $
    
    
    
    $
    140,098
 29




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2005
 Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    NHC
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    195,363
    
    
    $
    144,370
    
    
    $
    166,561
    
    
    $
    221,930
    
    
    $
    (532,861
    )
    
    $
    195,363Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    4,635
    
    
    
    172,547
    
    
    
    
    
    
    
    177,182Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,745
    
    
    
    
    
    
    
    23,745Equity in income of joint venture
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,790
    )
    
    
    
    
    
    
    (2,790
    )Distributions received from joint venture
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,194
    
    
    
    
    
    
    
    2,194Share-based compensation expense
    
    
    5,546
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,546Equity earnings in affiliates
    
    
    (193,988
    )
    
    
    (166,561
    )
    
    
    (172,312
    )
    
    
    
    
    
    
    532,861
    
    
    
    Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,465
    
    
    
    
    
    
    
    10,465Other
    
    
    
    
    
    
    
    
    
    
    (576
    )
    
    
    3,148
    
    
    
    
    
    
    
    2,572Other changes in current assets and liabilities, net of
acquired working capital:Accounts receivable
    
    
    
    
    
    
    
    
    
    
    585
    
    
    
    (61,779
    )
    
    
    
    
    
    
    (61,194
    )Accounts receivable from affiliates
    
    
    (79,480
    )
    
    
    
    
    
    
    71,963
    
    
    
    
    
    
    
    7,517
    
    
    
    Other current assets
    
    
    19,918
    
    
    
    
    
    
    
    1,052
    
    
    
    (30,436
    )
    
    
    
    
    
    
    (9,466
    )Accounts payable
    
    
    
    
    
    
    
    
    
    
    (530
    )
    
    
    1,433
    
    
    
    
    
    
    
    903Accounts payable to affiliates
    
    
    
    
    
    
    29,242
    
    
    
    
    
    
    
    (21,725
    )
    
    
    (7,517
    )
    
    
    Other current liabilities
    
    
    (1,455
    )
    
    
    7,561
    
    
    
    (6,209
    )
    
    
    (6,465
    )
    
    
    
    
    
    
    (6,568
    )Net cash provided by (used for) operating
activities
    
    
    (54,096
    )
    
    
    14,612
    
    
    
    65,169
    
    
    
    312,267
    
    
    
    
    
    
    
    337,952CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (89,497
    )
    
    
    
    
    
    
    (89,497
    )Other capital expenditures
    
    
    
    
    
    
    
    
    
    
    (42
    )
    
    
    (139,710
    )
    
    
    
    
    
    
    (139,752
    )Major maintenance expenditures
    
    
    
    
    
    
    
    
    
    
    (127
    )
    
    
    (50,013
    )
    
    
    
    
    
    
    (50,140
    )Proceeds from sales of property and equipment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,035
    
    
    
    
    
    
    
    1,035Purchase of remaining 50% equity interest in the
Panon, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,374
    )
    
    
    
    
    
    
    (28,374
    )Repayments from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,612
    
    
    
    (14,612
    )
    
    
    Investment in marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,149
    )
    
    
    
    
    
    
    (24,149
    )Proceeds from sales and maturities of
marketable securities
    
    
    23,600
    
    
    
    
    
    
    
    
    
    
    
    88,136
    
    
    
    
    
    
    
    111,736Net cash provided by (used for) investing
activities
    
    
    23,600
    
    
    
    
    
    
    
    (169
    )
    
    
    (227,960
    )
    
    
    (14,612
    )
    
    
    (219,141
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on bank credit facilities
    
    
    
    
    
    
    
    
    
    
    (65,000
    )
    
    
    
    
    
    
    
    
    
    
    (65,000
    )Payments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,371
    )
    
    
    
    
    
    
    (6,371
    )Payments to affiliates
    
    
    
    
    
    
    (14,612
    )
    
    
    
    
    
    
    
    
    
    
    14,612
    
    
    
    Net proceeds from employee stock transactions
    
    
    68,611
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68,611Dividends paid
    
    
    (8,168
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,168
    )Net cash provided by (used for) financing
activities
    
    
    60,443
    
    
    
    (14,612
    )
    
    
    (65,000
    )
    
    
    (6,371
    )
    
    
    14,612
    
    
    
    (10,928
    )INCREASE IN CASH
AND CASH EQUIVALENTS
    
    
    29,947
    
    
    
    
    
    
    
    
    
    
    
    77,936
    
    
    
    
    
    
    
    107,883CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    8,130
    
    
    
    
    
    
    
    
    
    
    
    50,660
    
    
    
    
    
    
    
    58,790CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    38,077
    
    
    $
    
    
    
    $
    
    
    
    $
    128,596
    
    
    $
    
    
    
    $
    166,673
 30




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
 FORWARD-LOOKING STATEMENTS
  
 EXECUTIVE OVERVIEW
      Noble Clyde Boudreaux Noble Dave Beard Noble
Danny Adkins
 31




---



##### Table of Contents



Noble Roger Lewis Noble Hans Deul Noble
Scott Marks
 
 RESULTS OF OPERATIONS
 Hurricane Losses and Recoveries
  Noble Jim Thompson Noble Max Smith Noble Paul Romano Noble Amos Runner
 For the Three Months Ended September 30, 2006 and 2005
 General
   32




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##### Table of Contents



International
    
    
    DomesticContract
    
    
    Contract
    
    
    EngineeringDrilling
    
    
    Drilling
    
    
    &ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Total(In thousands)Three Months Ended September 30, 2006Operating Revenues:Contract drilling services
    
    $
    372,818
    
    
    $
    140,507
    
    
    $
    
    
    
    $
    
    
    
    $
    513,325Reimbursables
    
    
    16,820
    
    
    
    2,703
    
    
    
    31
    
    
    
    5,246
    
    
    
    24,800Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,775
    
    
    
    20,775Engineering, consulting and other
    
    
    1,119
    
    
    
    162
    
    
    
    1,805
    
    
    
    
    
    
    
    3,086390,757
    
    
    
    143,372
    
    
    
    1,836
    
    
    
    26,021
    
    
    
    561,986Operating Costs and Expenses:Contract drilling services
    
    
    152,968
    
    
    
    33,559
    
    
    
    
    
    
    
    
    
    
    
    186,527Reimbursables
    
    
    13,778
    
    
    
    2,537
    
    
    
    32
    
    
    
    5,187
    
    
    
    21,534Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,027
    
    
    
    17,027Engineering, consulting and other
    
    
    (145
    )
    
    
    37
    
    
    
    3,165
    
    
    
    205
    
    
    
    3,262Depreciation and amortization
    
    
    52,823
    
    
    
    12,052
    
    
    
    15
    
    
    
    670
    
    
    
    65,560Selling, general and administrative
    
    
    7,590
    
    
    
    3,556
    
    
    
    396
    
    
    
    333
    
    
    
    11,875227,014
    
    
    
    51,741
    
    
    
    3,608
    
    
    
    23,422
    
    
    
    305,785Operating Income
    
    $
    163,743
    
    
    $
    91,631
    
    
    $
    (1,772
    )
    
    $
    2,599
    
    
    $
    256,201
 International
    
    
    DomesticContract
    
    
    Contract
    
    
    EngineeringDrilling
    
    
    Drilling
    
    
    &ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Total(In thousands)Three Months Ended September 30, 2005Operating Revenues:Contract drilling services
    
    $
    248,536
    
    
    $
    79,565
    
    
    $
    
    
    
    $
    
    
    
    $
    328,101Reimbursables
    
    
    10,423
    
    
    
    2,943
    
    
    
    205
    
    
    
    4,507
    
    
    
    18,078Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,275
    
    
    
    17,275Engineering, consulting and other
    
    
    774
    
    
    
    228
    
    
    
    2,749
    
    
    
    
    
    
    
    3,751259,733
    
    
    
    82,736
    
    
    
    2,954
    
    
    
    21,782
    
    
    
    367,205Operating Costs and Expenses:Contract drilling services
    
    
    120,700
    
    
    
    35,326
    
    
    
    
    
    
    
    
    
    
    
    156,026Reimbursables
    
    
    8,053
    
    
    
    2,740
    
    
    
    242
    
    
    
    4,184
    
    
    
    15,219Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,967
    
    
    
    14,967Engineering, consulting and other
    
    
    35
    
    
    
    606
    
    
    
    4,603
    
    
    
    105
    
    
    
    5,349Depreciation and amortization
    
    
    48,126
    
    
    
    12,247
    
    
    
    84
    
    
    
    819
    
    
    
    61,276Selling, general and administrative
    
    
    6,419
    
    
    
    2,333
    
    
    
    233
    
    
    
    339
    
    
    
    9,324Hurricane losses and recoveries, net
    
    
    
    
    
    
    10,465
    
    
    
    
    
    
    
    
    
    
    
    10,465183,333
    
    
    
    63,717
    
    
    
    5,162
    
    
    
    20,414
    
    
    
    272,626Operating Income
    
    $
    76,400
    
    
    $
    19,019
    
    
    $
    (2,208
    )
    
    $
    1,368
    
    
    $
    94,579
 33




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##### Table of Contents



Rig Utilization, Operating Days and Average Dayrates
  Average RigUtilization (1)
    
    Operating Days (2)
    
    Average DayrateThree Months Ended
    
    Three Months Ended
    
    Three Months EndedSeptember 30,
    
    September 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005International (3):Jackups
    
    
    97
    %
    
    
    98
    %
    
    
    3,652
    
    
    
    3,440
    
    
    $
    79,485
    
    
    $
    55,271Semisubmersibles  >6,000(4)
    
    
    100
    %
    
    
    100
    %
    
    
    184
    
    
    
    184
    
    
    
    166,951
    
    
    
    153,274Semisubmersibles  <6,000(5)
    
    
    83
    %
    
    
    100
    %
    
    
    153
    
    
    
    92
    
    
    
    163,221
    
    
    
    84,315Drillships
    
    
    100
    %
    
    
    100
    %
    
    
    276
    
    
    
    276
    
    
    
    97,242
    
    
    
    81,401Total International
    
    
    97
    %
    
    
    99
    %
    
    
    4,265
    
    
    
    3,992
    
    
    $
    87,413
    
    
    $
    62,265Domestic (6):Jackups
    
    
    N/A
    
    
    
    100
    %
    
    
    
    
    
    
    184
    
    
    $
    N/A
    
    
    $
    68,990Semisubmersibles  >6,000 (4)
    
    
    100
    %
    
    
    100
    %
    
    
    368
    
    
    
    368
    
    
    
    290,976
    
    
    
    127,240Semisubmersibles  <6,000 (5)
    
    
    90
    %
    
    
    96
    %
    
    
    83
    
    
    
    176
    
    
    
    155,307
    
    
    
    69,241Submersibles
    
    
    100
    %
    
    
    67
    %
    
    
    276
    
    
    
    184
    
    
    
    74,529
    
    
    
    42,590Total Domestic
    
    
    99
    %
    
    
    90
    %
    
    
    727
    
    
    
    912
    
    
    $
    193,270
    
    
    $
    87,209Total Company
    
    
    97
    %
    
    
    97
    %
    
    
    4,992
    
    
    
    4,904
    
    
    $
    102,821
    
    
    $
    66,904
 
 (1)
    
    Information reflects our policy of reporting on the basis of the number of actively marketed
rigs in our fleet. Percentages reflect the results of rigs only during the period in which
they are owned or operated by us.(2)
    
    Information reflects the number of days that our rigs were operating under contractual
terms.(3)
    
    International encompasses contract drilling services conducted in the Middle East, Mexico,
the North Sea, Brazil, West Africa, and India.(4)
    
    These units have water depth ratings of 6,000 feet or greater depending on the unit.(5)
    
    These units have water depth ratings of less than 6,000 feet.(6)
    
    Domestic encompasses contract drilling services conducted in the U.S. Gulf of Mexico. 
 34




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##### Table of Contents



International Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Contract drilling services
    
    $
    372,818
    
    
    $
    248,536
    
    
    $
    152,968
    
    
    $
    120,700Reimbursables (1)
    
    
    16,820
    
    
    
    10,423
    
    
    
    13,778
    
    
    
    8,053Other
    
    
    1,119
    
    
    
    774
    
    
    
    (145
    )
    
    
    35Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    52,823
    
    
    
    48,126Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    7,590
    
    
    
    6,419Total
    
    $
    390,757
    
    
    $
    259,733
    
    
    $
    227,014
    
    
    $
    183,333
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Harvey Duhaney Noble Mark Burns Noble Tom Jobe Noble Eddie Paul Noble Therald Martin
 Operating Costs and Expenses.
 35




---



##### Table of Contents



Domestic Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Contract drilling services
    
    $
    140,507
    
    
    $
    79,565
    
    
    $
    33,559
    
    
    $
    35,326Reimbursables (1)
    
    
    2,703
    
    
    
    2,943
    
    
    
    2,537
    
    
    
    2,740Other
    
    
    162
    
    
    
    228
    
    
    
    37
    
    
    
    606Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    12,052
    
    
    
    12,247Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    3,556
    
    
    
    2,333Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,465Total
    
    $
    143,372
    
    
    $
    82,736
    
    
    $
    51,741
    
    
    $
    63,717
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Tom Jobe Noble Eddie Paul Noble Therald Martin
 Operating Costs and Expenses .
  36




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##### Table of Contents



Engineering & Consulting Services
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Engineering, consulting and other
    
    $
    1,805
    
    
    $
    2,749
    
    
    $
    3,165
    
    
    $
    4,603Reimbursables (1)
    
    
    31
    
    
    
    205
    
    
    
    32
    
    
    
    242Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    15
    
    
    
    84Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    396
    
    
    
    233Total
    
    $
    1,836
    
    
    $
    2,954
    
    
    $
    3,608
    
    
    $
    5,162
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues.
 Operating Costs and Expenses .
 Other
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Labor contract drilling services
    
    $
    20,775
    
    
    $
    17,275
    
    
    $
    17,027
    
    
    $
    14,967Reimbursables (1)
    
    
    5,246
    
    
    
    4,507
    
    
    
    5,187
    
    
    
    4,184Other
    
    
    
    
    
    
    
    
    
    
    205
    
    
    
    105Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    670
    
    
    
    819Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    333
    
    
    
    339Total
    
    $
    26,021
    
    
    $
    21,782
    
    
    $
    23,422
    
    
    $
    20,414
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues .
 37




---



##### Table of Contents



Operating Costs and Expenses .
 Other Items
 Selling, General and Administrative Expenses . Share-Based Payment
 Interest Expense .
 Other, net.
 Income
Tax Provision .
 For the Nine Months Ended September 30, 2006 and 2005
 General
  38




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##### Table of Contents



International
    
    
    DomesticContract
    
    
    Contract
    
    
    EngineeringDrilling
    
    
    Drilling
    
    
    & ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Total(In thousands)Nine Months Ended September 30, 2006Operating Revenues:Contract drilling services
    
    $
    993,724
    
    
    $
    413,572
    
    
    $
    
    
    
    $
    
    
    
    $
    1,407,296Reimbursables
    
    
    41,318
    
    
    
    11,636
    
    
    
    142
    
    
    
    15,416
    
    
    
    68,512Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,973
    
    
    
    55,973Engineering, consulting and other
    
    
    2,124
    
    
    
    430
    
    
    
    7,080
    
    
    
    
    
    
    
    9,6341,037,166
    
    
    
    425,638
    
    
    
    7,222
    
    
    
    71,389
    
    
    
    1,541,415Operating Costs and Expenses:Contract drilling services
    
    
    423,776
    
    
    
    111,277
    
    
    
    
    
    
    
    
    
    
    
    535,053Reimbursables
    
    
    33,674
    
    
    
    10,908
    
    
    
    120
    
    
    
    14,428
    
    
    
    59,130Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,611
    
    
    
    47,611Engineering, consulting and other
    
    
    331
    
    
    
    (119
    )
    
    
    13,752
    
    
    
    4
    
    
    
    13,968Depreciation and amortization
    
    
    148,247
    
    
    
    36,962
    
    
    
    288
    
    
    
    1,969
    
    
    
    187,466Selling, general and administrative
    
    
    19,041
    
    
    
    10,666
    
    
    
    1,194
    
    
    
    1,914
    
    
    
    32,815Hurricane losses and recoveries, net
    
    
    
    
    
    
    (4,404
    )
    
    
    
    
    
    
    
    
    
    
    (4,404
    )625,069
    
    
    
    165,290
    
    
    
    15,354
    
    
    
    65,926
    
    
    
    871,639Operating Income
    
    $
    412,097
    
    
    $
    260,348
    
    
    $
    (8,132
    )
    
    $
    5,463
    
    
    $
    669,776
 International
    
    
    DomesticContract
    
    
    Contract
    
    
    EngineeringDrilling
    
    
    Drilling
    
    
    & ConsultingServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Total(In thousands)Nine Months Ended September 30, 2005Operating Revenues:Contract drilling services
    
    $
    678,216
    
    
    $
    216,200
    
    
    $
    
    
    
    $
    
    
    
    $
    894,416Reimbursables
    
    
    27,690
    
    
    
    11,105
    
    
    
    9,115
    
    
    
    13,325
    
    
    
    61,235Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,947
    
    
    
    52,947Engineering, consulting and other
    
    
    1,940
    
    
    
    746
    
    
    
    9,695
    
    
    
    559
    
    
    
    12,940707,846
    
    
    
    228,051
    
    
    
    18,810
    
    
    
    66,831
    
    
    
    1,021,538Operating Costs and Expenses:Contract drilling services
    
    
    348,225
    
    
    
    97,730
    
    
    
    
    
    
    
    
    
    
    
    445,955Reimbursables
    
    
    22,160
    
    
    
    10,547
    
    
    
    9,199
    
    
    
    12,765
    
    
    
    54,671Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,632
    
    
    
    44,632Engineering, consulting and other
    
    
    382
    
    
    
    912
    
    
    
    14,854
    
    
    
    822
    
    
    
    16,970Depreciation and amortization
    
    
    139,462
    
    
    
    35,030
    
    
    
    281
    
    
    
    2,409
    
    
    
    177,182Selling, general and administrative
    
    
    18,500
    
    
    
    7,021
    
    
    
    701
    
    
    
    1,019
    
    
    
    27,241Hurricane losses and recoveries, net
    
    
    
    
    
    
    10,465
    
    
    
    
    
    
    
    
    
    
    
    10,465528,729
    
    
    
    161,705
    
    
    
    25,035
    
    
    
    61,647
    
    
    
    777,116Operating Income
    
    $
    179,117
    
    
    $
    66,346
    
    
    $
    (6,225
    )
    
    $
    5,184
    
    
    $
    244,422
 39




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##### Table of Contents



Rig Utilization, Operating Days and Average Dayrates
  Average RigUtilization (1)
    
    Operating Days (2)
    
    Average DayrateNine Months Ended
    
    Nine Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005International (3):Jackups
    
    
    98
    %
    
    
    97
    %
    
    
    10,834
    
    
    
    9,792
    
    
    $
    72,497
    
    
    $
    52,799Semisubmersibles
 >6,000(4)(7)
    
    
    100
    %
    
    
    100
    %
    
    
    546
    
    
    
    546
    
    
    
    135,579
    
    
    
    152,396Semisubmersibles  <6,000(5)
    
    
    92
    %
    
    
    95
    %
    
    
    334
    
    
    
    260
    
    
    
    158,928
    
    
    
    77,977Drillships
    
    
    100
    %
    
    
    87
    %
    
    
    819
    
    
    
    716
    
    
    
    99,238
    
    
    
    80,648Total International
    
    
    98
    %
    
    
    96
    %
    
    
    12,533
    
    
    
    11,314
    
    
    $
    79,289
    
    
    $
    59,947Domestic (6):Jackups
    
    
    86
    %
    
    
    100
    %
    
    
    155
    
    
    
    546
    
    
    $
    101,112
    
    
    $
    61,939Semisubmersibles  >6,000 (4)
    
    
    100
    %
    
    
    90
    %
    
    
    1,092
    
    
    
    986
    
    
    
    268,954
    
    
    
    120,508Semisubmersibles  <6,000 (5)
    
    
    98
    %
    
    
    99
    %
    
    
    431
    
    
    
    538
    
    
    
    131,714
    
    
    
    66,883Submersibles
    
    
    88
    %
    
    
    87
    %
    
    
    720
    
    
    
    712
    
    
    
    65,710
    
    
    
    38,699Total Domestic
    
    
    95
    %
    
    
    93
    %
    
    
    2,398
    
    
    
    2,782
    
    
    $
    172,465
    
    
    $
    77,714Total Company
    
    
    98
    %
    
    
    95
    %
    
    
    14,931
    
    
    
    14,096
    
    
    $
    94,253
    
    
    $
    63,452
 
 (1)
    
    Information reflects our policy of reporting on the basis of the number of actively marketed
rigs in our fleet. Percentages reflect the results of rigs only during the period in which
they are owned or operated by us.(2)
    
    Information reflects the number of days that our rigs were operating under contractual terms.(3)
    
    International encompasses contract drilling services conducted in the Middle East, Mexico,
the North Sea, Brazil, West Africa, and India.(4)
    
    These units have water depth ratings of 6,000 feet or greater depending on the unit.(5)
    
    These units have water depth ratings of less than 6,000 feet.(6)
    
    Domestic encompasses contract drilling services conducted in the U.S. Gulf of Mexico.(7)
    
    For discussion of factors affecting average dayrates, see International Contract Drilling
Services  Operating Revenues below. 40




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##### Table of Contents



International Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesNine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Contract drilling services
    
    $
    993,724
    
    
    $
    678,216
    
    
    $
    423,776
    
    
    $
    348,225Reimbursables (1)
    
    
    41,318
    
    
    
    27,690
    
    
    
    33,674
    
    
    
    22,160Other
    
    
    2,124
    
    
    
    1,940
    
    
    
    331
    
    
    
    382Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    148,247
    
    
    
    139,462Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    19,041
    
    
    
    18,500Total
    
    $
    1,037,166
    
    
    $
    707,846
    
    
    $
    625,069
    
    
    $
    528,729
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Harvey Duhaney Noble Mark Burns Noble Tom Jobe Noble
Eddie Paul Noble Therald Martin
 Operating Costs and Expenses.
 41




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##### Table of Contents



Domestic Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesNine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Contract drilling services
    
    $
    413,572
    
    
    $
    216,200
    
    
    $
    111,277
    
    
    $
    97,730Reimbursables (1)
    
    
    11,636
    
    
    
    11,105
    
    
    
    10,908
    
    
    
    10,547Other
    
    
    430
    
    
    
    746
    
    
    
    (119
    )
    
    
    912Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    36,962
    
    
    
    35,030Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    10,666
    
    
    
    7,021Hurricane losses and recoveries, net
    
    
    
    
    
    
    
    
    
    
    (4,404
    )
    
    
    10,465Total
    
    $
    425,638
    
    
    $
    228,051
    
    
    $
    165,290
    
    
    $
    161,705
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Tom Jobe Noble Eddie Paul Noble Therald Martin
 Operating Costs and Expenses .
  42




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##### Table of Contents



Engineering & Consulting Services
  Operating CostsOperating Revenues
    
    
    and ExpensesNine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Engineering, consulting and other
    
    $
    7,080
    
    
    $
    9,695
    
    
    $
    13,752
    
    
    $
    14,854Reimbursables (1)
    
    
    142
    
    
    
    9,115
    
    
    
    120
    
    
    
    9,199Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    288
    
    
    
    281Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    1,194
    
    
    
    701Total
    
    $
    7,222
    
    
    $
    18,810
    
    
    $
    15,354
    
    
    $
    25,035
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues.
 Operating Costs and Expenses .
 Other
  Operating CostsOperating Revenues
    
    
    and ExpensesNine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In thousands)Labor contract drilling services
    
    $
    55,973
    
    
    $
    52,947
    
    
    $
    47,611
    
    
    $
    44,632Reimbursables (1)
    
    
    15,416
    
    
    
    13,325
    
    
    
    14,428
    
    
    
    12,765Other
    
    
    
    
    
    
    559
    
    
    
    4
    
    
    
    822Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    1,969
    
    
    
    2,409Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    1,914
    
    
    
    1,019Total
    
    $
    71,389
    
    
    $
    66,831
    
    
    $
    65,926
    
    
    $
    61,647
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct cost as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues .
 43




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##### Table of Contents



Operating Costs and Expenses .
 Other Items
 Selling, General and Administrative Expenses .
 Interest Expense .
 Other, net. Panon Noble
Harvey Duhaney
 Income Tax Provision .
 
 LIQUIDITY AND CAPITAL RESOURCES
 Overview
     44




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##### Table of Contents



Capital Expenditures
  Noble Clyde Boudreaux Noble Dave Beard Noble Roger
Lewis Noble Hans Deul Noble Scott Marks Noble Danny Adkins Noble Bingo 9000 Rig
    Investment in Smedvig
   45




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Credit Facilities and Long-Term Debt
     46




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ACCOUNTING PRONOUNCEMENTS
 Employers Accounting for Defined Benefit Pension and Other Postretirement Plansan amendment of
SFAS Nos. 87, 88, 106, and 132(R)
 Accounting for Uncertainty in Income
Taxes
 Fair Value Measurements
 Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements
 47




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
        48




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
   49




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##### Table of Contents



ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total Number of Shares
    
    Maximum Number ofTotal Number
    
    
    
    
    
    Purchased as Part of
    
    Shares that May Yet Beof Shares
    
    Average Price
    
    Publicly Announced
    
    Purchased Under thePeriod
    
    Purchased(1)
    
    Paid per Share(1)(3)
    
    Plans or Programs(2)(3)
    
    Plans or Programs(2)July 1  July 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,062,000August 1 
August 31, 2006
    
    
    705,532
    
    
    $
    66.06
    
    
    
    700,000
    
    
    
    7,362,000September 1 
September 30, 2006
    
    
    600,248
    
    
    $
    63.94
    
    
    
    600,000
    
    
    
    6,762,000
 
 (1)
    
    Includes ordinary shares purchased by the Company pursuant to a voluntary program (also known
as an odd-lot program) through which holders who own fewer than 100 ordinary shares may sell
their shares to the Company. All shares submitted for sale under this offer were purchased by
the Company. Shares purchased under the odd-lot offer in August totaled 5,532 at an average
price of $67.96 ($376,000) and in September totaled 248 at an average price of $64.04
($16,000).(2)
    
    All share repurchases, except those repurchased under our odd-lot program described in
footnote (1) above, were made in the open market and were effected pursuant to the share
repurchase program which our board of directors authorized and adopted and which we announced
on January 31, 2002. The program authorization covers an aggregate of 15,000,000 ordinary
shares, and has no date of expiration.(3)
    
    Shares repurchased in August totaled 700,000 shares at an average price of $66.05 ($46.2
million) and in September totaled 600,000 at an average price of $63.94 ($38.4 million). 50




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##### Table of Contents



ITEM 6. EXHIBITS
  51




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SIGNATURES
  NOBLE CORPORATIONDATE:  November 8, 2006
    By:
    /s/ MARK A. JACKSONMark A. JacksonChief Executive Officer, President and Chief Operating Officer
(Duly authorized officer) /s/ THOMAS L. MITCHELLThomas L. MitchellSenior Vice President and Chief Financial Officer
(Principal financial officer) 52




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##### Table of Contents



INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    EXHIBIT10.1
    
    Summary of Noble Corporation Directors Compensation (filed as Exhibit 10.1 to
the Registrants Current Report on Form 8-K filed on July 27, 2006 and incorporated
herein by reference).31.1
    
    Certification of Mark A. Jackson Pursuant to SEC Rule 13a-14(a) or Rule 15d-14(a).31.2
    
    Certification of Thomas L. Mitchell Pursuant to SEC Rule 13a-14(a) or Rule
15d-14(a).32.1+
    
    Certification of Mark A. Jackson Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2+
    
    Certification of Thomas L. Mitchell Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 +
    
    Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K. 53