##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-31306
 NOBLE CORPORATION
  Cayman Islands(State or other jurisdiction of incorporation or organization)
    
    98-0366361(I.R.S. employer identification number)13135 South Dairy Ashford, Suite 800
Sugar Land, Texas(Address of principal executive offices)
    
    77478(Zip code)
 Registrants telephone number, including area code: (281) 276-6100
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o
  o þ




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##### 



TABLE OF CONTENTS
 PAGEPART I FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS
    
    
    3Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007
    
    
    3Consolidated Statements of Income for the three and six months ended June 30, 2008 and 2007
    
    
    4Consolidated Statements of Cash Flows for the six months ended June 30, 2008 and 2007
    
    
    5Consolidated Statements of Shareholders Equity for the six months ended June 30, 2008
    
    
    6Consolidated Statements of Comprehensive Income for the three and six months ended June 30,
2008 and 2007
    
    
    7Notes to Consolidated Financial Statements
    
    
    8ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    28ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
    
    
    40ITEM 4. CONTROLS AND PROCEDURES
    
    
    41PART II OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    41ITEM 1A. RISK FACTORS
    
    
    42ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    43ITEM 6. EXHIBITS
    
    
    43SIGNATURES
    
    
    44INDEX TO EXHIBITS
    
    
    45Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
   June 30,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    320,964
    
    
    $
    161,058Accounts receivable
    
    
    560,923
    
    
    
    613,115Insurance receivables
    
    
    
    
    
    
    39,066Prepaid expenses
    
    
    51,529
    
    
    
    20,721Other current assets
    
    
    36,499
    
    
    
    26,231Total current assets
    
    
    969,915
    
    
    
    860,191PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    6,794,897
    
    
    
    6,354,782Other
    
    
    97,515
    
    
    
    80,1696,892,412
    
    
    
    6,434,951Accumulated depreciation
    
    
    (1,753,263
    )
    
    
    (1,639,035
    )5,139,149
    
    
    
    4,795,916OTHER ASSETS
    
    
    243,256
    
    
    
    219,899$
    6,352,320
    
    
    $
    5,876,006LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    27,958
    
    
    $
    10,334Accounts payable
    
    
    172,805
    
    
    
    198,395Accrued payroll and related costs
    
    
    97,623
    
    
    
    115,914Taxes payable
    
    
    102,814
    
    
    
    85,641Interest payable
    
    
    9,465
    
    
    
    9,951Other current liabilities
    
    
    53,551
    
    
    
    72,537Total current liabilities
    
    
    464,216
    
    
    
    492,772LONG-TERM DEBT
    
    
    701,507
    
    
    
    774,182DEFERRED INCOME TAXES
    
    
    254,521
    
    
    
    240,621OTHER LIABILITIES
    
    
    94,237
    
    
    
    65,7051,514,481
    
    
    
    1,573,280COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    (5,313
    )
    
    
    (5,596
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share; 400,000 shares authorized;
269,157 and 268,223 shares issued and outstanding at June 30, 2008 and
December 31, 2007, respectively
    
    
    26,916
    
    
    
    26,822Capital in excess of par value
    
    
    686,641
    
    
    
    683,697Retained earnings
    
    
    4,139,866
    
    
    
    3,602,870Accumulated other comprehensive loss
    
    
    (10,271
    )
    
    
    (5,067
    )4,843,152
    
    
    
    4,308,322$
    6,352,320
    
    
    $
    5,876,006
   3




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##### Table of Contents



NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007OPERATING REVENUESContract drilling services
    
    $
    783,280
    
    
    $
    657,504
    
    
    $
    1,581,114
    
    
    $
    1,234,419Reimbursables
    
    
    20,964
    
    
    
    28,608
    
    
    
    53,422
    
    
    
    59,751Labor contract drilling services
    
    
    8,218
    
    
    
    39,165
    
    
    
    39,149
    
    
    
    75,720Engineering, consulting and other
    
    
    479
    
    
    
    722
    
    
    
    681
    
    
    
    2,533812,941
    
    
    
    725,999
    
    
    
    1,674,366
    
    
    
    1,372,423OPERATING COSTS AND EXPENSESContract drilling services
    
    
    256,436
    
    
    
    212,050
    
    
    
    492,388
    
    
    
    408,892Reimbursables
    
    
    17,831
    
    
    
    24,608
    
    
    
    47,292
    
    
    
    52,154Labor contract drilling services
    
    
    6,547
    
    
    
    32,454
    
    
    
    31,884
    
    
    
    60,857Engineering, consulting and other
    
    
    
    
    
    
    7,255
    
    
    
    
    
    
    
    11,296Depreciation and amortization
    
    
    87,836
    
    
    
    68,323
    
    
    
    170,735
    
    
    
    132,388Selling, general and administrative
    
    
    19,667
    
    
    
    20,302
    
    
    
    40,940
    
    
    
    34,528Gain on disposal of assets, net
    
    
    (35,521
    )
    
    
    
    
    
    
    (35,521
    )
    
    
    352,796
    
    
    
    364,992
    
    
    
    747,718
    
    
    
    700,115OPERATING INCOME
    
    
    460,145
    
    
    
    361,007
    
    
    
    926,648
    
    
    
    672,308OTHER INCOME (EXPENSE)Interest expense, net of amount capitalized
    
    
    (721
    )
    
    
    (1,231
    )
    
    
    (1,831
    )
    
    
    (2,735
    )Interest income and other, net
    
    
    1,580
    
    
    
    512
    
    
    
    4,709
    
    
    
    1,670INCOME BEFORE INCOME TAXES
    
    
    461,004
    
    
    
    360,288
    
    
    
    929,526
    
    
    
    671,243INCOME TAX PROVISION
    
    
    (85,286
    )
    
    
    (70,257
    )
    
    
    (169,620
    )
    
    
    (130,892
    )NET INCOME
    
    $
    375,718
    
    
    $
    290,031
    
    
    $
    759,906
    
    
    $
    540,351NET INCOME PER SHARE:Basic
    
    $
    1.41
    
    
    $
    1.09
    
    
    $
    2.85
    
    
    $
    2.03Diluted
    
    $
    1.40
    
    
    $
    1.08
    
    
    $
    2.83
    
    
    $
    2.01
 .
  4




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NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
   Six Months Ended June 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    759,906
    
    
    $
    540,351Adjustments to reconcile net income to net cash from operating activities:Depreciation and amortization
    
    
    170,735
    
    
    
    132,388Impairment loss on assets
    
    
    
    
    
    
    5,400Deferred income tax provision
    
    
    13,900
    
    
    
    6,324Share-based compensation expense
    
    
    18,471
    
    
    
    16,903Pension contributions
    
    
    (17,445
    )
    
    
    (16,705
    )Gain on disposal of assets, net
    
    
    (35,521
    )
    
    
    Other, net
    
    
    7,761
    
    
    
    9,426Other changes in current assets and liabilities:Accounts receivable
    
    
    52,192
    
    
    
    (88,627
    )Hurricane insurance receivables
    
    
    17,319
    
    
    
    Other current assets
    
    
    (42,632
    )
    
    
    14,325Accounts payable
    
    
    (7,994
    )
    
    
    (20,960
    )Other current liabilities
    
    
    (1,179
    )
    
    
    33,243Net cash from operating activities
    
    
    935,513
    
    
    
    632,068CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    (310,770
    )
    
    
    (323,338
    )Other capital expenditures
    
    
    (161,546
    )
    
    
    (216,452
    )Major maintenance expenditures
    
    
    (52,577
    )
    
    
    (39,370
    )Accrued capital expenditures
    
    
    (17,596
    )
    
    
    22,173Hurricane insurance receivables
    
    
    21,747
    
    
    
    Proceeds from disposal of assets
    
    
    39,134
    
    
    
    3,284Net cash from investing activities
    
    
    (481,608
    )
    
    
    (553,703
    )CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on bank credit facilities
    
    
    
    
    
    
    220,000Payments on bank credit facilities
    
    
    (50,000
    )
    
    
    (85,000
    )Payments of other long-term debt
    
    
    (5,076
    )
    
    
    (4,730
    )Net proceeds from employee stock transactions
    
    
    10,558
    
    
    
    13,560Dividends paid
    
    
    (222,910
    )
    
    
    (10,788
    )Repurchases of ordinary shares
    
    
    (26,571
    )
    
    
    (120,687
    )Net cash from financing activities
    
    
    (293,999
    )
    
    
    12,355NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    159,906
    
    
    
    90,720CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    161,058
    
    
    
    61,710CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    320,964
    
    
    $
    152,430
   5




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NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
   AccumulatedCapital in
    
    
    
    
    
    
    Other
    
    
    TotalOrdinary
    
    
    Excess of
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Par Value
    
    
    Par Value
    
    
    Earnings
    
    
    Loss
    
    
    EquityBalance at December 31, 2007
    
    
    268,223
    
    
    $
    26,822
    
    
    $
    683,697
    
    
    $
    3,602,870
    
    
    $
    (5,067
    )
    
    $
    4,308,322Share-based compensation:Share-based compensation
    
    
    1,084
    
    
    
    108
    
    
    
    18,363
    
    
    
    
    
    
    
    
    
    
    
    18,471Contribution to employee
benefit plans
    
    
    9
    
    
    
    1
    
    
    
    579
    
    
    
    
    
    
    
    
    
    
    
    580Exercise of stock options
    
    
    813
    
    
    
    82
    
    
    
    17,689
    
    
    
    
    
    
    
    
    
    
    
    17,771Restricted shares surrendered for
withholding taxes or
forfeited
    
    
    (379
    )
    
    
    (38
    )
    
    
    (7,175
    )
    
    
    
    
    
    
    
    
    
    
    (7,213
    )Repurchases of ordinary shares
    
    
    (593
    )
    
    
    (59
    )
    
    
    (26,512
    )
    
    
    
    
    
    
    
    
    
    
    (26,571
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    759,906
    
    
    
    
    
    
    
    759,906Dividends paid ($0.83 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (222,910
    )
    
    
    
    
    
    
    (222,910
    )Other comprehensive loss, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,204
    )
    
    
    (5,204
    )Balance at June 30, 2008
    
    
    269,157
    
    
    $
    26,916
    
    
    $
    686,641
    
    
    $
    4,139,866
    
    
    $
    (10,271
    )
    
    $
    4,843,152
   6




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NOBLE CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
   Three Months Ended June 30,2008
    
    
    2007NET INCOME
    
    $
    375,718
    
    
    $
    290,031OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    (3,999
    )
    
    
    1,790Foreign currency forward contract activity
    
    
    (1,250
    )
    
    
    (222
    )Pension plan actuarial loss
    
    
    
    
    
    
    (5,580
    )Amortization of deferred pension plan amounts
    
    
    190
    
    
    
    397Other comprehensive loss
    
    
    (5,059
    )
    
    
    (3,615
    )COMPREHENSIVE INCOME
    
    $
    370,659
    
    
    $
    286,416
 Six Months Ended June 30,2008
    
    
    2007NET INCOME
    
    $
    759,906
    
    
    $
    540,351OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    (4,064
    )
    
    
    2,552Foreign currency forward contract activity
    
    
    (1,556
    )
    
    
    (1,051
    )Pension plan actuarial loss
    
    
    
    
    
    
    (5,580
    )Amortization of deferred pension plan amounts
    
    
    416
    
    
    
    784Other comprehensive loss
    
    
    (5,204
    )
    
    
    (3,295
    )COMPREHENSIVE INCOME
    
    $
    754,702
    
    
    $
    537,056
 .
  7




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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
     8




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 2  NET INCOME PER SHARE
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Weighted-average shares outstanding  basic
    
    
    266,464
    
    
    
    265,927
    
    
    
    266,458
    
    
    
    266,521Effect of potentially dilutive shares:Stock options and awards
    
    
    2,730
    
    
    
    2,813
    
    
    
    2,428
    
    
    
    2,646Weighted-average shares outstanding  diluted
    
    
    269,194
    
    
    
    268,740
    
    
    
    268,886
    
    
    
    269,167Net income  basic and diluted
    
    $
    375,718
    
    
    $
    290,031
    
    
    $
    759,906
    
    
    $
    540,351Net income per share:Basic
    
    $
    1.41
    
    
    $
    1.09
    
    
    $
    2.85
    
    
    $
    2.03Diluted
    
    $
    1.40
    
    
    $
    1.08
    
    
    $
    2.83
    
    
    $
    2.01
  NOTE 3  PROPERTY AND EQUIPMENT
   NOTE 4  ASSET DISPOSALS
   9




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 5  DEBT
  June 30,
    
    
    December 31,2008
    
    
    2007Credit Facility
    
    $
    50,000
    
    
    $
    100,0006.95% Senior Notes due 2009
    
    
    149,993
    
    
    
    149,9877.50% Senior Notes due 2019
    
    
    201,695
    
    
    
    201,6955.875% Senior Notes due 2013
    
    
    299,819
    
    
    
    299,800Project Financing  Thompson Notes
    
    
    27,958
    
    
    
    33,034Total Debt
    
    
    729,465
    
    
    
    784,516Current Maturities
    
    
    (27,958
    )
    
    
    (10,334
    )Long-term Debt
    
    $
    701,507
    
    
    $
    774,182
    NOTE 6  INCOME TAXES
    10




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 7  EMPLOYEE BENEFIT PLANS
  Three Months Ended June 30,2008
    
    
    2007International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    1,421
    
    
    $
    1,573
    
    
    $
    1,665
    
    
    $
    1,665Interest cost
    
    
    1,249
    
    
    
    1,614
    
    
    
    1,152
    
    
    
    1,495Return on plan assets
    
    
    (1,686
    )
    
    
    (2,227
    )
    
    
    (1,131
    )
    
    
    (1,650
    )Amortization of prior service cost
    
    
    
    
    
    
    98
    
    
    
    
    
    
    
    99Amortization of transition obligation
    
    
    43
    
    
    
    
    
    
    
    67
    
    
    
    Recognized net actuarial loss
    
    
    40
    
    
    
    87
    
    
    
    54
    
    
    
    380Net pension expense
    
    $
    1,067
    
    
    $
    1,145
    
    
    $
    1,807
    
    
    $
    1,989
 Six Months Ended June 30,2008
    
    
    2007International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    2,841
    
    
    $
    3,147
    
    
    $
    2,935
    
    
    $
    3,330Interest cost
    
    
    2,500
    
    
    
    3,229
    
    
    
    2,172
    
    
    
    2,990Return on plan assets
    
    
    (3,378
    )
    
    
    (4,454
    )
    
    
    (2,262
    )
    
    
    (3,300
    )Amortization of prior service cost
    
    
    
    
    
    
    196
    
    
    
    
    
    
    
    198Amortization of transition obligation
    
    
    86
    
    
    
    
    
    
    
    121
    
    
    
    Recognized net actuarial loss
    
    
    80
    
    
    
    174
    
    
    
    108
    
    
    
    760Net pension expense
    
    $
    2,129
    
    
    $
    2,292
    
    
    $
    3,074
    
    
    $
    3,978
    NOTE 8  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
    11




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 Accounting for Derivative
Instruments and Hedging Activities
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net unrealized gain at beginning of period
    
    $
    1,913
    
    
    $
    2,388
    
    
    $
    2,219
    
    
    $
    3,217Activity during period:Settlement of forward contracts outstanding at beginning
of period
    
    
    ( 1,295
    )
    
    
    (903
    )
    
    
    (1,850
    )
    
    
    (1,935
    )Net unrealized gain on outstanding foreign currency
forward contracts
    
    
    45
    
    
    
    681
    
    
    
    294
    
    
    
    884Net unrealized gain at end of period
    
    $
    663
    
    
    $
    2,166
    
    
    $
    663
    
    
    $
    2,166
 NOTE 9  FAIR VALUE OF FINANCIAL INSTRUMENTS
 Fair
Value Measurements Partial Deferral of the
Effective Date of Statement 157
   12




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
  June 30, 2008
    
    
    December 31, 2007Estimated Fair ValueMeasurementsQuoted
    
    
    SignificantPrices in
    
    
    Other
    
    
    SignificantActive
    
    
    Observable
    
    
    UnobservableCarrying
    
    
    Markets
    
    
    Inputs
    
    
    Inputs
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    Amount
    
    
    Fair ValueDerivative Instruments Foreign currency forward contracts
    
    $
    663
    
    
    $
    
    
    
    $
    663
    
    
    $
    
    
    
    $
    2,219
    
    
    $
    2,219
  The Fair Value Option for Financial Assets and
Liabilities
 NOTE 10  COMMITMENTS AND CONTINGENCIES
    13




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




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




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
     16




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 11  SEGMENT AND RELATED INFORMATION
   Three Months Ended June 30,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractDrilling
    
    
    
    
    
    
    
    
    
    
    DrillingServices
    
    
    Other
    
    
    Total
    
    
    Services
    
    
    Other
    
    
    TotalRevenues from external customers
    
    $
    803,390
    
    
    $
    9,551
    
    
    $
    812,941
    
    
    $
    677,736
    
    
    $
    48,263
    
    
    $
    725,999Depreciation and amortization
    
    
    86,636
    
    
    
    1,200
    
    
    
    87,836
    
    
    
    66,108
    
    
    
    2,215
    
    
    
    68,323Segment operating income
    
    
    424,227
    
    
    
    35,918
    
    
    
    460,145
    
    
    
    363,114
    
    
    
    (2,107
    )
    
    
    361,007Interest expense, net of amount
capitalized
    
    
    610
    
    
    
    111
    
    
    
    721
    
    
    
    976
    
    
    
    255
    
    
    
    1,231Income tax provision (benefit)
    
    
    83,641
    
    
    
    1,645
    
    
    
    85,286
    
    
    
    74,043
    
    
    
    (3,786
    )
    
    
    70,257Segment profit
    
    
    340,731
    
    
    
    34,987
    
    
    
    375,718
    
    
    
    287,829
    
    
    
    2,202
    
    
    
    290,031Total assets (at end of period)
    
    
    5,774,924
    
    
    
    577,396
    
    
    
    6,352,320
    
    
    
    4,775,543
    
    
    
    417,725
    
    
    
    5,193,268Capital expenditures
    
    
    274,252
    
    
    
    16,653
    
    
    
    290,905
    
    
    
    305,896
    
    
    
    36,586
    
    
    
    342,482
 Six Months Ended June 30,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractDrilling
    
    
    
    
    
    
    
    
    
    
    DrillingServices
    
    
    Other
    
    
    Total
    
    
    Services
    
    
    Other
    
    
    TotalRevenues from external customers
    
    $
    1,622,577
    
    
    $
    51,789
    
    
    $
    1,674,366
    
    
    $
    1,274,650
    
    
    $
    97,773
    
    
    $
    1,372,423Depreciation and amortization
    
    
    167,421
    
    
    
    3,314
    
    
    
    170,735
    
    
    
    127,917
    
    
    
    4,471
    
    
    
    132,388Segment operating income
    
    
    888,028
    
    
    
    38,620
    
    
    
    926,648
    
    
    
    670,637
    
    
    
    1,671
    
    
    
    672,308Interest expense, net of amount
capitalized
    
    
    1,603
    
    
    
    228
    
    
    
    1,831
    
    
    
    2,342
    
    
    
    393
    
    
    
    2,735Income tax provision (benefit)
    
    
    172,440
    
    
    
    (2,820
    )
    
    
    169,620
    
    
    
    137,430
    
    
    
    (6,538
    )
    
    
    130,892Segment profit
    
    
    717,603
    
    
    
    42,303
    
    
    
    759,906
    
    
    
    531,292
    
    
    
    9,059
    
    
    
    540,351Total assets (at end of period)
    
    
    5,774,924
    
    
    
    577,396
    
    
    
    6,352,320
    
    
    
    4,775,543
    
    
    
    417,725
    
    
    
    5,193,268Capital expenditures
    
    
    502,019
    
    
    
    22,874
    
    
    
    524,893
    
    
    
    501,666
    
    
    
    77,494
    
    
    
    579,160
  17




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 12  ACCOUNTING PRONOUNCEMENTS
 Noncontrolling Interests in Consolidated
Financial Statements  An Amendment of ARB No. 51
 Business Combinations
 
    
    transaction costs will generally be expensed as incurred;
    
    contingent consideration will be recognized at fair value on the acquisition date;
    
    acquired contingent liabilities will be recorded at fair value at the acquisition date
and subsequently measured at either the higher of such amount or the amount determined
under existing guidance for non-acquired contingencies;
    
    fair value of the purchase price, including the issuance of equity securities, will be
determined on the acquisition date (closing) instead of announcement date;
    
    restructuring costs associated with a business combination will generally be expensed
subsequent to the acquisition date; and
    
    changes in deferred tax asset valuation allowances and income tax uncertainties after
the acquisition date generally will affect income tax expense.
  Disclosures about Derivative Instruments and
Hedging Activities
 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities
  18




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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 The Hierarchy of Generally Accepted Accounting
Principles
 NOTE 13  SUBSEQUENT EVENT
  NOTE 14  GUARANTEES OF REGISTERED SECURITIES
    19




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
June 30, 2008
  NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    128,084
    
    
    $
    210
    
    
    $
    29
    
    
    $
    192,641
    
    
    $
    
    
    
    $
    320,964Accounts receivable
    
    
    
    
    
    
    23,580
    
    
    
    7,481
    
    
    
    529,862
    
    
    
    
    
    
    
    560,923Insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Prepaid expenses
    
    
    
    
    
    
    1,037
    
    
    
    173
    
    
    
    50,319
    
    
    
    
    
    
    
    51,529Accounts receivable from affiliates
    
    
    156,258
    
    
    
    
    
    
    
    580,116
    
    
    
    706,835
    
    
    
    (1,443,209
    )
    
    
    Other current assets
    
    
    3,677
    
    
    
    36
    
    
    
    
    
    
    
    91,459
    
    
    
    (58,673
    )
    
    
    36,499Total current assets
    
    
    288,019
    
    
    
    24,863
    
    
    
    587,799
    
    
    
    1,571,116
    
    
    
    (1,501,882
    )
    
    
    969,915PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    
    
    1,980,804
    
    
    
    112,961
    
    
    
    4,701,132
    
    
    
    
    
    
    
    6,794,897Other
    
    
    
    
    
    
    225
    
    
    
    
    
    
    
    97,290
    
    
    
    
    
    
    
    97,515
    
    
    
    1,981,029
    
    
    
    112,961
    
    
    
    4,798,422
    
    
    
    
    
    
    
    6,892,412Accumulated depreciation
    
    
    
    
    
    
    (97,686
    )
    
    
    (67,540
    )
    
    
    (1,588,037
    )
    
    
    
    
    
    
    (1,753,263
    )
    
    
    
    1,883,343
    
    
    
    45,421
    
    
    
    3,210,385
    
    
    
    
    
    
    
    5,139,149NOTES RECEIVABLE FROM AFFILIATES
    
    
    511,835
    
    
    
    20,963
    
    
    
    44,159
    
    
    
    1,598,923
    
    
    
    (2,175,880
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    4,668,224
    
    
    
    4,901,214
    
    
    
    3,298,273
    
    
    
    
    
    
    
    (12,867,711
    )
    
    
    OTHER ASSETS
    
    
    3,312
    
    
    
    6,530
    
    
    
    6,330
    
    
    
    227,084
    
    
    
    
    
    
    
    243,256$
    5,471,390
    
    
    $
    6,836,913
    
    
    $
    3,981,982
    
    
    $
    6,607,508
    
    
    $
    (16,545,473
    )
    
    $
    6,352,320LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    
    
    
    $
    27,094
    
    
    $
    
    
    
    $
    27,958
    
    
    $
    (27,094
    )
    
    $
    27,958Accounts payable
    
    
    
    
    
    
    5,892
    
    
    
    6,134
    
    
    
    160,779
    
    
    
    
    
    
    
    172,805Accrued payroll and related costs
    
    
    
    
    
    
    331
    
    
    
    11,745
    
    
    
    85,547
    
    
    
    
    
    
    
    97,623Taxes payable
    
    
    
    
    
    
    8,472
    
    
    
    
    
    
    
    94,342
    
    
    
    
    
    
    
    102,814Interest payable
    
    
    6,273
    
    
    
    15,193
    
    
    
    19,080
    
    
    
    498
    
    
    
    (31,579
    )
    
    
    9,465Accounts payable to affiliates
    
    
    
    
    
    
    1,440,733
    
    
    
    
    
    
    
    2,476
    
    
    
    (1,443,209
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    340
    
    
    
    403
    
    
    
    52,808
    
    
    
    
    
    
    
    53,551Total current liabilities
    
    
    6,273
    
    
    
    1,498,055
    
    
    
    37,362
    
    
    
    424,408
    
    
    
    (1,501,882
    )
    
    
    464,216LONG-TERM DEBT
    
    
    349,819
    
    
    
    
    
    
    
    351,688
    
    
    
    
    
    
    
    
    
    
    
    701,507NOTES PAYABLE TO AFFILIATES
    
    
    264,300
    
    
    
    1,214,623
    
    
    
    120,000
    
    
    
    576,957
    
    
    
    (2,175,880
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    4,795
    
    
    
    14,298
    
    
    
    235,428
    
    
    
    
    
    
    
    254,521OTHER LIABILITIES
    
    
    7,846
    
    
    
    30,234
    
    
    
    3,961
    
    
    
    52,196
    
    
    
    
    
    
    
    94,237628,238
    
    
    
    2,747,707
    
    
    
    527,309
    
    
    
    1,288,989
    
    
    
    (3,677,762
    )
    
    
    1,514,481COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,313
    )
    
    
    
    
    
    
    (5,313
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    26,916
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,916Capital in excess of par value
    
    
    686,641
    
    
    
    552,236
    
    
    
    870,744
    
    
    
    834,555
    
    
    
    (2,257,535
    )
    
    
    686,641Retained earnings
    
    
    4,139,866
    
    
    
    3,536,970
    
    
    
    2,583,929
    
    
    
    4,499,548
    
    
    
    (10,620,447
    )
    
    
    4,139,866Accumulated other comprehensive
income (loss)
    
    
    (10,271
    )
    
    
    
    
    
    
    
    
    
    
    (10,271
    )
    
    
    10,271
    
    
    
    (10,271
    )4,843,152
    
    
    
    4,089,206
    
    
    
    3,454,673
    
    
    
    5,323,832
    
    
    
    (12,867,711
    )
    
    
    4,843,152$
    5,471,390
    
    
    $
    6,836,913
    
    
    $
    3,981,982
    
    
    $
    6,607,508
    
    
    $
    (16,545,473
    )
    
    $
    6,352,320
  20




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##### Table of Contents



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




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2008
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    75,805
    
    
    $
    10,702
    
    
    $
    734,773
    
    
    $
    (38,000
    )
    
    $
    783,280Reimbursables
    
    
    
    
    
    
    406
    
    
    
    39
    
    
    
    20,519
    
    
    
    
    
    
    
    20,964Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,218
    
    
    
    
    
    
    
    8,218Engineering, consulting and other
    
    
    
    
    
    
    2
    
    
    
    1
    
    
    
    476
    
    
    
    
    
    
    
    479
    
    
    
    76,213
    
    
    
    10,742
    
    
    
    763,986
    
    
    
    (38,000
    )
    
    
    812,941OPERATING COSTS AND EXPENSESContract drilling services
    
    
    6,413
    
    
    
    9,427
    
    
    
    6,294
    
    
    
    272,302
    
    
    
    (38,000
    )
    
    
    256,436Reimbursables
    
    
    
    
    
    
    312
    
    
    
    38
    
    
    
    17,481
    
    
    
    
    
    
    
    17,831Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,547
    
    
    
    
    
    
    
    6,547Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    
    
    
    
    8,521
    
    
    
    1,773
    
    
    
    77,542
    
    
    
    
    
    
    
    87,836Selling, general and administrative
    
    
    2,496
    
    
    
    1,502
    
    
    
    461
    
    
    
    15,208
    
    
    
    
    
    
    
    19,667Gain on disposal of assets, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,521
    )
    
    
    
    
    
    
    (35,521
    )8,909
    
    
    
    19,762
    
    
    
    8,566
    
    
    
    353,559
    
    
    
    (38,000
    )
    
    
    352,796OPERATING INCOME (LOSS)
    
    
    (8,909
    )
    
    
    56,451
    
    
    
    2,176
    
    
    
    410,427
    
    
    
    
    
    
    
    460,145OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    388,556
    
    
    
    331,407
    
    
    
    126,112
    
    
    
    
    
    
    
    (846,075
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (6,043
    )
    
    
    (10,209
    )
    
    
    (6,388
    )
    
    
    8,949
    
    
    
    12,970
    
    
    
    (721
    )Interest income and other, net
    
    
    2,415
    
    
    
    
    
    
    
    
    
    
    
    12,135
    
    
    
    (12,970
    )
    
    
    1,580INCOME BEFORE INCOME TAXES
    
    
    376,019
    
    
    
    377,649
    
    
    
    121,900
    
    
    
    431,511
    
    
    
    (846,075
    )
    
    
    461,004INCOME TAX (PROVISION) BENEFIT
    
    
    (301
    )
    
    
    531
    
    
    
    (251
    )
    
    
    (85,265
    )
    
    
    
    
    
    
    (85,286
    )NET INCOME
    
    $
    375,718
    
    
    $
    378,180
    
    
    $
    121,649
    
    
    $
    346,246
    
    
    $
    (846,075
    )
    
    $
    375,718
  22




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2007
 NHC and NDH Noble
    
    
    Noble
    
    
    Other
    
    


    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    41,065
    
    
    $
    15,393
    
    
    $
    621,664
    
    
    $
    (20,618
    )
    
    $
    657,504Reimbursables
    
    
    
    
    
    
    216
    
    
    
    229
    
    
    
    28,163
    
    
    
    
    
    
    
    28,608Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,165
    
    
    
    
    
    
    
    39,165Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    722
    
    
    
    
    
    
    
    722
    
    
    
    41,281
    
    
    
    15,622
    
    
    
    689,714
    
    
    
    (20,618
    )
    
    
    725,999OPERATING COSTS AND EXPENSESContract drilling services
    
    
    5,407
    
    
    
    6,504
    
    
    
    7,418
    
    
    
    213,339
    
    
    
    (20,618
    )
    
    
    212,050Reimbursables
    
    
    
    
    
    
    192
    
    
    
    226
    
    
    
    24,190
    
    
    
    
    
    
    
    24,608Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,454
    
    
    
    
    
    
    
    32,454Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,255
    
    
    
    
    
    
    
    7,255Depreciation and amortization
    
    
    
    
    
    
    6,494
    
    
    
    1,349
    
    
    
    60,480
    
    
    
    
    
    
    
    68,323Selling, general and administrative
    
    
    4,252
    
    
    
    991
    
    
    
    316
    
    
    
    14,743
    
    
    
    
    
    
    
    20,3029,659
    
    
    
    14,181
    
    
    
    9,309
    
    
    
    352,461
    
    
    
    (20,618
    )
    
    
    364,992OPERATING INCOME (LOSS)
    
    
    (9,659
    )
    
    
    27,100
    
    
    
    6,313
    
    
    
    337,253
    
    
    
    
    
    
    
    361,007OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    306,848
    
    
    
    280,447
    
    
    
    130,767
    
    
    
    
    
    
    
    (718,062
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (7,527
    )
    
    
    (11,829
    )
    
    
    (6,631
    )
    
    
    11,853
    
    
    
    12,903
    
    
    
    (1,231
    )Interest income and other, net
    
    
    77
    
    
    
    2
    
    
    
    
    
    
    
    13,336
    
    
    
    (12,903
    )
    
    
    512INCOME BEFORE INCOME TAXES
    
    
    289,739
    
    
    
    295,720
    
    
    
    130,449
    
    
    
    362,442
    
    
    
    (718,062
    )
    
    
    360,288INCOME TAX (PROVISION) BENEFIT
    
    
    292
    
    
    
    4,068
    
    
    
    (2,053
    )
    
    
    (72,564
    )
    
    
    
    
    
    
    (70,257
    )NET INCOME
    
    $
    290,031
    
    
    $
    299,788
    
    
    $
    128,396
    
    
    $
    289,878
    
    
    $
    (718,062
    )
    
    $
    290,031
  23




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2008
 NHC and NDH
    
    
    Noble
    
    

    Other
    
    


    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    116,074
    
    
    $
    24,292
    
    
    $
    1,488,048
    
    
    $
    (47,300
    )
    
    $
    1,581,114Reimbursables
    
    
    
    
    
    
    900
    
    
    
    159
    
    
    
    52,363
    
    
    
    
    
    
    
    53,422Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,149
    
    
    
    
    
    
    
    39,149Engineering, consulting and other
    
    
    
    
    
    
    2
    
    
    
    1
    
    
    
    678
    
    
    
    
    
    
    
    681
    
    
    
    116,976
    
    
    
    24,452
    
    
    
    1,580,238
    
    
    
    (47,300
    )
    
    
    1,674,366OPERATING COSTS AND EXPENSESContract drilling services
    
    
    12,345
    
    
    
    18,481
    
    
    
    12,851
    
    
    
    496,011
    
    
    
    (47,300
    )
    
    
    492,388Reimbursables
    
    
    
    
    
    
    757
    
    
    
    154
    
    
    
    46,381
    
    
    
    
    
    
    
    47,292Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,884
    
    
    
    
    
    
    
    31,884Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    
    
    
    
    16,129
    
    
    
    3,412
    
    
    
    151,194
    
    
    
    
    
    
    
    170,735Selling, general and administrative
    
    
    5,204
    
    
    
    2,987
    
    
    
    921
    
    
    
    31,828
    
    
    
    
    
    
    
    40,940Gain on disposal of assets, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,521
    )
    
    
    
    
    
    
    (35,521
    )17,549
    
    
    
    38,354
    
    
    
    17,338
    
    
    
    721,777
    
    
    
    (47,300
    )
    
    
    747,718OPERATING INCOME (LOSS)
    
    
    (17,549
    )
    
    
    78,622
    
    
    
    7,114
    
    
    
    858,461
    
    
    
    
    
    
    
    926,648OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    786,883
    
    
    
    703,145
    
    
    
    289,652
    
    
    
    
    
    
    
    (1,779,680
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (13,383
    )
    
    
    (20,546
    )
    
    
    (12,776
    )
    
    
    18,141
    
    
    
    26,733
    
    
    
    (1,831
    )Interest income and other, net
    
    
    4,351
    
    
    
    
    
    
    
    
    
    
    
    27,091
    
    
    
    (26,733
    )
    
    
    4,709INCOME BEFORE INCOME TAXES
    
    
    760,302
    
    
    
    761,221
    
    
    
    283,990
    
    
    
    903,693
    
    
    
    (1,779,680
    )
    
    
    929,526INCOME TAX (PROVISION) BENEFIT
    
    
    (396
    )
    
    
    4,029
    
    
    
    (1,260
    )
    
    
    (171,993
    )
    
    
    
    
    
    
    (169,620
    )NET INCOME
    
    $
    759,906
    
    
    $
    765,250
    
    
    $
    282,730
    
    
    $
    731,700
    
    
    $
    (1,779,680
    )
    
    $
    759,906
  24




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2007
 NHC and NDH
    
    
    Noble
    
    
    

    Other
    

    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    67,626
    
    
    $
    28,474
    
    
    $
    1,168,908
    
    
    $
    (30,589
    )
    
    $
    1,234,419Reimbursables
    
    
    
    
    
    
    356
    
    
    
    455
    
    
    
    58,940
    
    
    
    
    
    
    
    59,751Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,720
    
    
    
    
    
    
    
    75,720Engineering, consulting and other
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    2,527
    
    
    
    
    
    
    
    2,533
    
    
    
    67,988
    
    
    
    28,929
    
    
    
    1,306,095
    
    
    
    (30,589
    )
    
    
    1,372,423OPERATING COSTS AND EXPENSESContract drilling services
    
    
    10,710
    
    
    
    13,007
    
    
    
    14,654
    
    
    
    401,110
    
    
    
    (30,589
    )
    
    
    408,892Reimbursables
    
    
    
    
    
    
    307
    
    
    
    451
    
    
    
    51,396
    
    
    
    
    
    
    
    52,154Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,857
    
    
    
    
    
    
    
    60,857Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,296
    
    
    
    
    
    
    
    11,296Depreciation and amortization
    
    
    
    
    
    
    12,772
    
    
    
    2,933
    
    
    
    116,683
    
    
    
    
    
    
    
    132,388Selling, general and administrative
    
    
    6,236
    
    
    
    1,958
    
    
    
    646
    
    
    
    25,688
    
    
    
    
    
    
    
    34,52816,946
    
    
    
    28,044
    
    
    
    18,684
    
    
    
    667,030
    
    
    
    (30,589
    )
    
    
    700,115OPERATING INCOME (LOSS)
    
    
    (16,946
    )
    
    
    39,944
    
    
    
    10,245
    
    
    
    639,065
    
    
    
    
    
    
    
    672,308OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    569,765
    
    
    
    526,533
    
    
    
    245,526
    
    
    
    
    
    
    
    (1,341,824
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (13,134
    )
    
    
    (23,672
    )
    
    
    (13,959
    )
    
    
    22,489
    
    
    
    25,541
    
    
    
    (2,735
    )Interest income and other, net
    
    
    86
    
    
    
    2
    
    
    
    
    
    
    
    27,123
    
    
    
    (25,541
    )
    
    
    1,670INCOME BEFORE INCOME TAXES
    
    
    539,771
    
    
    
    542,807
    
    
    
    241,812
    
    
    
    688,677
    
    
    
    (1,341,824
    )
    
    
    671,243INCOME TAX (PROVISION) BENEFIT
    
    
    580
    
    
    
    8,091
    
    
    
    (2,327
    )
    
    
    (137,236
    )
    
    
    
    
    
    
    (130,892
    )NET INCOME
    
    $
    540,351
    
    
    $
    550,898
    
    
    $
    239,485
    
    
    $
    551,441
    
    
    $
    (1,341,824
    )
    
    $
    540,351
  25




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2008
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    759,906
    
    
    $
    765,250
    
    
    $
    282,730
    
    
    $
    731,700
    
    
    $
    (1,779,680
    )
    
    $
    759,906Adjustments to reconcile net income to net cash
from operating activities:Depreciation and amortization
    
    
    
    
    
    
    16,129
    
    
    
    3,412
    
    
    
    151,194
    
    
    
    
    
    
    
    170,735Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    1,802
    
    
    
    12,098
    
    
    
    
    
    
    
    13,900Share-based compensation expense
    
    
    18,471
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,471Equity earnings in affiliates
    
    
    (786,883
    )
    
    
    (703,145
    )
    
    
    (289,652
    )
    
    
    
    
    
    
    1,779,680
    
    
    
    Pension contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,445
    )
    
    
    
    
    
    
    (17,445
    )Gain on disposal of assets, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,521
    )
    
    
    
    
    
    
    (35,521
    )Other, net
    
    
    2,687
    
    
    
    6,962
    
    
    
    1,168
    
    
    
    (3,056
    )
    
    
    
    
    
    
    7,761Other changes in current assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (680
    )
    
    
    2,218
    
    
    
    50,654
    
    
    
    
    
    
    
    52,192Hurricane insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,319
    
    
    
    
    
    
    
    17,319Other current assets
    
    
    (203
    )
    
    
    (59
    )
    
    
    44
    
    
    
    (42,414
    )
    
    
    
    
    
    
    (42,632
    )Accounts payable
    
    
    
    
    
    
    352
    
    
    
    1,356
    
    
    
    (9,702
    )
    
    
    
    
    
    
    (7,994
    )Other current liabilities
    
    
    2,151
    
    
    
    14,951
    
    
    
    2,410
    
    
    
    (20,691
    )
    
    
    
    
    
    
    (1,179
    )Net cash from operating activities
    
    
    (3,871
    )
    
    
    99,760
    
    
    
    5,488
    
    
    
    834,136
    
    
    
    
    
    
    
    935,513CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    (310,770
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (310,770
    )Other capital expenditures
    
    
    
    
    
    
    
    
    
    
    (1,872
    )
    
    
    (159,674
    )
    
    
    
    
    
    
    (161,546
    )Major maintenance expenditures
    
    
    
    
    
    
    
    
    
    
    (2,091
    )
    
    
    (50,486
    )
    
    
    
    
    
    
    (52,577
    )Accrued capital expenditures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,596
    )
    
    
    
    
    
    
    (17,596
    )Hurricane insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,747
    
    
    
    
    
    
    
    21,747Notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150,000
    )
    
    
    150,000
    
    
    
    Repayments from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,260
    
    
    
    (13,260
    )
    
    
    Proceeds from sales of property and equipment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,134
    
    
    
    
    
    
    
    39,134Net cash from investing activities
    
    
    
    
    
    
    (310,770
    )
    
    
    (3,963
    )
    
    
    (303,615
    )
    
    
    136,740
    
    
    
    (481,608
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on bank credit facilities
    
    
    (50,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,000
    )Payments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,076
    )
    
    
    
    
    
    
    (5,076
    )Advances (to) from affiliates
    
    
    258,334
    
    
    
    224,480
    
    
    
    (1,569
    )
    
    
    (481,245
    )
    
    
    
    
    
    
    Repayment of notes to affiliates
    
    
    
    
    
    
    (13,260
    )
    
    
    
    
    
    
    
    
    
    
    13,260
    
    
    
    Notes payable to affiliates
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150,000
    )
    
    
    Net proceeds from employee stock transactions
    
    
    10,558
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,558Dividends paid
    
    
    (222,910
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (222,910
    )Repurchases of ordinary shares
    
    
    (26,571
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,571
    )Net cash from financing activities
    
    
    119,411
    
    
    
    211,220
    
    
    
    (1,569
    )
    
    
    (486,321
    )
    
    
    (136,740
    )
    
    
    (293,999
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    115,540
    
    
    
    210
    
    
    
    (44
    )
    
    
    44,200
    
    
    
    
    
    
    
    159,906CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    12,544
    
    
    
    
    
    
    
    73
    
    
    
    148,441
    
    
    
    
    
    
    
    161,058CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    128,084
    
    
    $
    210
    
    
    $
    29
    
    
    $
    192,641
    
    
    $
    
    
    
    $
    320,964
  26




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    540,351
    
    
    $
    550,898
    
    
    $
    239,485
    
    
    $
    551,441
    
    
    $
    (1,341,824
    )
    
    $
    540,351Adjustments to reconcile net income to net cash
from operating activities:Depreciation and amortization
    
    
    
    
    
    
    12,772
    
    
    
    2,933
    
    
    
    116,683
    
    
    
    
    
    
    
    132,388Impairment loss on assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,400
    
    
    
    
    
    
    
    5,400Deferred income tax provision
    
    
    
    
    
    
    3,157
    
    
    
    618
    
    
    
    2,549
    
    
    
    
    
    
    
    6,324Share-based compensation expense
    
    
    16,903
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,903Equity earnings in affiliates
    
    
    (569,765
    )
    
    
    (526,533
    )
    
    
    (245,526
    )
    
    
    
    
    
    
    1,341,824
    
    
    
    Pension contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,705
    )
    
    
    
    
    
    
    (16,705
    )Other
    
    
    (370
    )
    
    
    (180
    )
    
    
    3,249
    
    
    
    6,727
    
    
    
    
    
    
    
    9,426Other changes in current assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (8,133
    )
    
    
    (3,563
    )
    
    
    (76,931
    )
    
    
    
    
    
    
    (88,627
    )Other current assets
    
    
    (2
    )
    
    
    (356
    )
    
    
    (487
    )
    
    
    15,170
    
    
    
    
    
    
    
    14,325Accounts payable
    
    
    (14,158
    )
    
    
    (1,367
    )
    
    
    912
    
    
    
    (6,347
    )
    
    
    
    
    
    
    (20,960
    )Other current liabilities
    
    
    
    
    
    
    (344
    )
    
    
    (3,699
    )
    
    
    37,286
    
    
    
    
    
    
    
    33,243Net cash from operating activities
    
    
    (27,041
    )
    
    
    29,914
    
    
    
    (6,078
    )
    
    
    635,273
    
    
    
    
    
    
    
    632,068CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    (215,181
    )
    
    
    
    
    
    
    (108,157
    )
    
    
    
    
    
    
    (323,338
    )Other capital expenditures
    
    
    
    
    
    
    
    
    
    
    (6,084
    )
    
    
    (210,368
    )
    
    
    
    
    
    
    (216,452
    )Major maintenance expenditures
    
    
    
    
    
    
    (1,439
    )
    
    
    
    
    
    
    (37,931
    )
    
    
    
    
    
    
    (39,370
    )Accrued capital expenditures
    
    
    
    
    
    
    13,113
    
    
    
    
    
    
    
    9,060
    
    
    
    
    
    
    
    22,173Proceeds from sales of property and equipment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,284
    
    
    
    
    
    
    
    3,284Notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,700
    )
    
    
    25,700
    
    
    
    Repayments of notes receivable from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,565
    
    
    
    (11,565
    )
    
    
    Net cash from investing activities
    
    
    
    
    
    
    (203,507
    )
    
    
    (6,084
    )
    
    
    (358,247
    )
    
    
    14,135
    
    
    
    (553,703
    )CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on bank credit facilities
    
    
    135,000
    
    
    
    
    
    
    
    85,000
    
    
    
    
    
    
    
    
    
    
    
    220,000Payments on bank credit facilities
    
    
    
    
    
    
    
    
    
    
    (85,000
    )
    
    
    
    
    
    
    
    
    
    
    (85,000
    )Payments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,730
    )
    
    
    
    
    
    
    (4,730
    )Advances (to)/from affiliates
    
    
    28,166
    
    
    
    185,226
    
    
    
    12,191
    
    
    
    (225,583
    )
    
    
    
    
    
    
    Notes payable to affiliates
    
    
    25,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,700
    )
    
    
    Repayment of notes payable to affiliates
    
    
    
    
    
    
    (11,565
    )
    
    
    
    
    
    
    
    
    
    
    11,565
    
    
    
    Net proceeds from employee stock transactions
    
    
    13,560
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,560Dividends paid
    
    
    (10,788
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,788
    )Repurchases of ordinary shares
    
    
    (120,687
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (120,687
    )Net cash from financing activities
    
    
    70,951
    
    
    
    173,661
    
    
    
    12,191
    
    
    
    (230,313
    )
    
    
    (14,135
    )
    
    
    12,355NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    43,910
    
    
    
    68
    
    
    
    29
    
    
    
    46,713
    
    
    
    
    
    
    
    90,720CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    2,458
    
    
    
    36
    
    
    
    
    
    
    
    59,216
    
    
    
    
    
    
    
    61,710CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    46,368
    
    
    $
    104
    
    
    $
    29
    
    
    $
    105,929
    
    
    $
    
    
    
    $
    152,430
  27




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
   FORWARD-LOOKING STATEMENTS
  EXECUTIVE OVERVIEW
    
    
    we continued construction on three newbuild ultra-deepwater semisubmersibles, the Noble
Dave Beard,
Noble Danny Adkinsand Noble Jim Day, which are scheduled for delivery in the first quarter
of 2009, the second quarter of 2009 and the fourth quarter of 2009, respectively; and
 
    
    we continued construction on two F&G JU-2000E enhanced premium independent leg
cantilevered jackups, the Noble Hans Deuland Noble Scott Marks, which are scheduled for
delivery in the third quarter of 2008 and the second quarter of 2009, respectively.
  28




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##### Table of Contents



29




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##### Table of Contents



CONTRACT DRILLING SERVICES BACKLOG
  Year Ending December 31,Total
    
    
    2008(1)
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012-2016(In thousands)Contract Drilling Services BacklogSemisubmersibles/Drillships(2)
    
    $
    9,043,000
    
    
    $
    729,000
    
    
    $
    1,738,000
    
    
    $
    1,833,000
    
    
    $
    1,493,000
    
    
    $
    3,250,000Jackups/Submersibles
    
    
    2,923,000
    
    
    
    1,020,000
    
    
    
    1,525,000
    
    
    
    309,000
    
    
    
    69,000
    
    
    
    Total
    
    $
    11,966,000
    
    
    $
    1,749,000
    
    
    $
    3,263,000
    
    
    $
    2,142,000
    
    
    $
    1,562,000
    
    
    $
    3,250,000Percent of Available
Operating Days Committed(3)
    
    
    
    
    
    
    89
    %
    
    
    68
    %
    
    
    31
    %
    
    
    19
    %
    
    
    8
    %
 
 (1)
    
    Represents a six-month period beginning July 1, 2008.(2)
    
    Our drilling contracts with Petroleo Brasileiro S.A. (Petrobras) provide an opportunity for
us to earn performance bonuses based on absence of downtime experienced for our rigs operating
offshore Brazil. With respect to our semisubmersibles operating offshore Brazil, we have
included in our backlog amounts an amount equal to 75 percent of potential performance bonuses
for such semisubmersibles, which amount is based on and consistent with our historical
earnings of performance bonuses for these rigs. With respect to our drillships operating
offshore Brazil, we (a) have not included in our backlog amounts any performance bonuses for
periods prior to the commencement of certain upgrade projects planned for 2010 and 2011, which
projects are designed to enhance the reliability and operational performance of our
drillships, and (b) have included in our backlog amounts an amount equal to 75 percent of
potential performance bonuses for periods after the estimated completion of such upgrade
projects. Our backlog amount for semisubmersibles/drillships includes approximately $347
million attributable to these performance bonuses.(3)
    
    Percentages take into account additional capacity from the estimated dates of deployment of
our newbuild rigs that are scheduled to commence operations during 2008 and 2009.    30




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##### Table of Contents



INTERNAL INVESTIGATION
        31




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##### Table of Contents



RESULTS OF OPERATIONS
 For the Three Months Ended June 30, 2008 and 2007
 General
  Rig Utilization, Operating Days and Average Dayrates
  Average Rig
    
    
    Operating Days(2)
    
    
    Average DayratesUtilization(1)
    
    
    Three Months Ended
    
    
    Three Months EndedThree Months Ended
    
    
    June 30,
    
    
    June 30,June 30,
    
    
    
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    
    
    
    %2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeJackups
    
    
    93
    %
    
    
    98
    %
    
    
    3,481
    
    
    
    3,553
    
    
    
    -2
    %
    
    $
    147,081
    
    
    $
    112,804
    
    
    
    30
    %Semisubmersibles
>6,000(3)
    
    
    90
    %
    
    
    100
    %
    
    
    572
    
    
    
    555
    
    
    
    3
    %
    
    
    323,830
    
    
    
    285,758
    
    
    
    13
    %Semisubmersibles
<6,000(4)
    
    
    100
    %
    
    
    87
    %
    
    
    273
    
    
    
    239
    
    
    
    14
    %
    
    
    192,416
    
    
    
    169,283
    
    
    
    14
    %Drillships
    
    
    67
    %
    
    
    100
    %
    
    
    182
    
    
    
    273
    
    
    
    -33
    %
    
    
    131,174
    
    
    
    128,874
    
    
    
    2
    %Submersibles (5)
    
    
    67
    %
    
    
    100
    %
    
    
    182
    
    
    
    273
    
    
    
    -33
    %
    
    
    53,039
    
    
    
    82,137
    
    
    
    -35
    %Total
    
    
    90
    %
    
    
    98
    %
    
    
    4,690
    
    
    
    4,893
    
    
    
    -4
    %
    
    $
    167,002
    
    
    $
    134,364
    
    
    
    24
    %
 
 (1)
    
    Information reflects our policy of reporting on the basis of the number of actively marketed
rigs in our fleet excluding newbuild rigs under construction.(2)
    
    Information reflects the number of days that our rigs were operating under contract.(3)
    
    These units have water depth ratings of 6,000 feet or greater.(4)
    
    These units have water depth ratings of less than 6,000 feet.(5)
    
    Beginning in
October 2007, one of our three submersibles, the Noble Fri
Rodli, was cold
stacked.  32




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##### Table of Contents



Contract Drilling Services
  Three Months EndedJune 30,
    
    
    Change2008
    
    
    2007
    
    
    $
    
    
    %Operating Revenues:Contract drilling services
    
    $
    783,280
    
    
    $
    657,504
    
    
    $
    125,776
    
    
    
    19
    %Reimbursables (1)
    
    
    19,646
    
    
    
    19,856
    
    
    
    (210
    )
    
    
    -1
    %Other
    
    
    464
    
    
    
    376
    
    
    
    88
    
    
    
    23
    %$
    803,390
    
    
    $
    677,736
    
    
    $
    125,654
    
    
    
    19
    %Operating Costs and Expenses:Contract drilling services
    
    $
    256,436
    
    
    $
    212,050
    
    
    $
    44,386
    
    
    
    21
    %Reimbursables (1)
    
    
    16,565
    
    
    
    16,706
    
    
    
    (141
    )
    
    
    -1
    %Other
    
    
    
    
    
    
    15
    
    
    
    (15
    )
    
    
    -100
    %Depreciation and amortization
    
    
    86,636
    
    
    
    66,108
    
    
    
    20,528
    
    
    
    31
    %Selling, general and administrative
    
    
    19,526
    
    
    
    19,743
    
    
    
    (217
    )
    
    
    -1
    %379,163
    
    
    
    314,622
    
    
    
    64,541
    
    
    
    21
    %Operating Income
    
    $
    424,227
    
    
    $
    363,114
    
    
    $
    61,113
    
    
    
    17
    %
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues.
  Noble Roy
Butler, Noble Max Smith Noble George McLeod Noble Roger Eason Noble Fri Rodli, Noble Don
Walker Noble Carl Norberg Noble Clyde Boudreaux Noble Roger Lewis
 Operating Costs and Expenses. Noble Clyde Boudreaux Noble Roger Lewis,
 Noble Clyde Boudreaux Noble Roger Lewis
  33




---



##### Table of Contents



Other
  Three Months EndedJune 30,
    
    
    Change2008
    
    
    2007
    
    
    $
    
    
    %Operating Revenues:Labor contract drilling services
    
    $
    8,218
    
    
    $
    39,165
    
    
    $
    (30,947
    )
    
    
    -79
    %Reimbursables (1)
    
    
    1,318
    
    
    
    8,752
    
    
    
    (7,434
    )
    
    
    -85
    %Engineering and consulting
    
    
    
    
    
    
    346
    
    
    
    (346
    )
    
    
    -100
    %Other
    
    
    15
    
    
    
    
    
    
    
    15
    
    
    
    *
    *$
    9,551
    
    
    $
    48,263
    
    
    $
    (38,712
    )
    
    
    -80
    %Operating Costs and Expenses:Labor contract drilling services
    
    $
    6,547
    
    
    $
    32,454
    
    
    $
    (25,907
    )
    
    
    -80
    %Reimbursables (1)
    
    
    1,266
    
    
    
    7,902
    
    
    
    (6,636
    )
    
    
    -84
    %Engineering, consulting and other
    
    
    
    
    
    
    7,240
    
    
    
    (7,240
    )
    
    
    -100
    %Depreciation and amortization
    
    
    1,200
    
    
    
    2,215
    
    
    
    (1,015
    )
    
    
    -46
    %Selling, general and administrative
    
    
    141
    
    
    
    559
    
    
    
    (418
    )
    
    
    -75
    %Gain on disposal of assets, net
    
    
    (35,521
    )
    
    
    
    
    
    
    35,521
    
    
    
    *
    *(26,367
    )
    
    
    50,370
    
    
    
    (76,737
    )
    
    
    *
    *Operating Income
    
    $
    35,918
    
    
    $
    (2,107
    )
    
    $
    38,025
    
    
    
    *
    *
 
 **
    
    Not a meaningful percentage.(1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Kolskaya Noble Kolskaya Noble Kolskaya
 Operating Costs and Expenses. Noble Kolskaya
  Noble Kolskaya
  34




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##### Table of Contents



Other Items
 Interest Expense.
 Interest income and other, net.
 Income Tax Provision.
 For the Six Months Ended June 30, 2008 and 2007
 General
  Rig Utilization, Operating Days and Average Dayrates
  Average RigUtilization(1)
    
    
    Operating Days(2)
    
    
    Average DayratesSix Months Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,%
    
    
    
    
    
    
    
    
    
    
    %2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeJackups
    
    
    95
    %
    
    
    98
    %
    
    
    7,082
    
    
    
    7,065
    
    
    
    
    %
    
    $
    146,195
    
    
    $
    107,490
    
    
    
    36
    %Semisubmersibles
>6,000(3)
    
    
    95
    %
    
    
    100
    %
    
    
    1,209
    
    
    
    1,096
    
    
    
    10
    %
    
    
    307,019
    
    
    
    273,023
    
    
    
    12
    %Semisubmersibles
<6,000(4)
    
    
    100
    %
    
    
    77
    %
    
    
    546
    
    
    
    419
    
    
    
    30
    %
    
    
    197,057
    
    
    
    172,484
    
    
    
    14
    %Drillships
    
    
    67
    %
    
    
    97
    %
    
    
    364
    
    
    
    525
    
    
    
    -31
    %
    
    
    132,420
    
    
    
    115,355
    
    
    
    15
    %Submersibles (5)
    
    
    66
    %
    
    
    97
    %
    
    
    361
    
    
    
    529
    
    
    
    -32
    %
    
    
    52,164
    
    
    
    81,609
    
    
    
    -36
    %Total
    
    
    92
    %
    
    
    97
    %
    
    
    9,562
    
    
    
    9,634
    
    
    
    -1
    %
    
    $
    165,356
    
    
    $
    128,137
    
    
    
    29
    %
 
 (1)
    
    Information reflects our policy of reporting on the basis of the number of actively marketed
rigs in our fleet excluding newbuild rigs under construction.(2)
    
    Information reflects the number of days that our rigs were operating under contract.(3)
    
    These units have water depth ratings of 6,000 feet or greater.(4)
    
    These units have water depth ratings of less than 6,000 feet.(5)
    
    Beginning in
October 2007, one of our three submersibles, the Noble Fri
Rodli, was cold
stacked.  35




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##### Table of Contents



Contract Drilling Services
  Six Months EndedJune 30,
    
    
    Change2008
    
    
    2007
    
    
    $
    
    
    %Operating Revenues:Contract drilling services
    
    $
    1,581,114
    
    
    $
    1,234,419
    
    
    $
    346,695
    
    
    
    28
    %Reimbursables (1)
    
    
    40,812
    
    
    
    39,625
    
    
    
    1,187
    
    
    
    3
    %Other
    
    
    651
    
    
    
    606
    
    
    
    45
    
    
    
    7
    %$
    1,622,577
    
    
    $
    1,274,650
    
    
    $
    347,927
    
    
    
    27
    %Operating Costs and Expenses:Contract drilling services
    
    $
    492,388
    
    
    $
    408,892
    
    
    $
    83,496
    
    
    
    20
    %Reimbursables (1)
    
    
    35,318
    
    
    
    33,645
    
    
    
    1,673
    
    
    
    5
    %Other
    
    
    
    
    
    
    156
    
    
    
    (156
    )
    
    
    -100
    %Depreciation and amortization
    
    
    167,421
    
    
    
    127,917
    
    
    
    39,504
    
    
    
    31
    %Selling, general and administrative
    
    
    39,422
    
    
    
    33,403
    
    
    
    6,019
    
    
    
    18
    %734,549
    
    
    
    604,013
    
    
    
    130,536
    
    
    
    22
    %Operating Income
    
    $
    888,028
    
    
    $
    670,637
    
    
    $
    217,391
    
    
    
    32
    %
 
 (1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues.
  Noble Roy Butler, Noble
Max Smith, Noble George McLeod Noble Roy Rhodes Noble Roger Eason Noble Fri Rodli,
Noble Don Walker Noble Carl Norberg Noble Clyde Boudreaux Noble Roger Lewis
 Operating Costs and Expenses. Noble Clyde Boudreaux Noble Roger Lewis,
  36




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##### Table of Contents



Noble Clyde Boudreaux Noble Roger Lewis,
  Other
  Six Months EndedJune 30,
    
    
    Change2008
    
    
    2007
    
    
    $
    
    
    %Operating Revenues:Labor contract drilling services
    
    $
    39,149
    
    
    $
    75,720
    
    
    $
    (36,571
    )
    
    
    -48
    %Reimbursables (1)
    
    
    12,610
    
    
    
    20,126
    
    
    
    (7,516
    )
    
    
    -37
    %Engineering and consulting
    
    
    
    
    
    
    1,927
    
    
    
    (1,927
    )
    
    
    -100
    %Other
    
    
    30
    
    
    
    
    
    
    
    30
    
    
    
    *
    *$
    51,789
    
    
    $
    97,773
    
    
    $
    (45,984
    )
    
    
    -47
    %Operating Costs and Expenses:Labor contract drilling services
    
    $
    31,884
    
    
    $
    60,857
    
    
    $
    (28,973
    )
    
    
    -48
    %Reimbursables (1)
    
    
    11,974
    
    
    
    18,509
    
    
    
    (6,535
    )
    
    
    -35
    %Engineering, consulting and other
    
    
    
    
    
    
    11,140
    
    
    
    (11,140
    )
    
    
    -100
    %Depreciation and amortization
    
    
    3,314
    
    
    
    4,471
    
    
    
    (1,157
    )
    
    
    -26
    %Selling, general and administrative
    
    
    1,518
    
    
    
    1,125
    
    
    
    393
    
    
    
    35
    %Gain on disposal of assets, net
    
    
    (35,521
    )
    
    
    
    
    
    
    35,521
    
    
    
    *
    *13,169
    
    
    
    96,102
    
    
    
    (82,933
    )
    
    
    -86
    %Operating Income
    
    $
    38,620
    
    
    $
    1,671
    
    
    $
    36,949
    
    
    
    *
    *
  
 **
    
    Not a meaningful percentage.(1)
    
    We record reimbursements from customers for out-of-pocket expenses as revenues and the
related direct costs as operating expenses. Changes in the amount of these reimbursables do
not have a material effect on our financial position, results of operations or cash flows. Operating Revenues. Noble Kolskaya Noble Kolskaya Noble Kolskaya
  Operating Costs and Expenses. Noble Kolskaya
   37




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##### Table of Contents



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




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##### Table of Contents



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




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##### Table of Contents



NEW ACCOUNTING PRONOUNCEMENTS
 Disclosures about Derivative Instruments and
Hedging Activities
 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities
 The Hierarchy of Generally Accepted Accounting
Principles
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
  Foreign Currency Risk
     40




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##### Table of Contents



Market Risk
  
 ITEM 4. CONTROLS AND PROCEDURES
    
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
   41




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##### Table of Contents



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




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##### Table of Contents



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total Number of
    
    
    Maximum NumberShares Purchased
    
    
    of Shares that MayTotal Number
    
    
    Average
    
    
    as Part of Publicly
    
    
    Yet Be Purchasedof Shares
    
    
    Price Paid
    
    
    Announced Plans
    
    
    Under the PlansPeriod
    
    Purchased
    
    
    per Share
    
    
    or Programs (2)
    
    
    or Programs (2)April 2008
    
    
    6,913
    (1)
    
    $
    58.45
    
    
    
    
    
    
    
    25,712,000May 2008
    
    
    483
    (1)
    
    $
    54.81
    
    
    
    
    
    
    
    25,712,000June 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    25,712,000
 (1)
    
    Acquired by surrender of ordinary shares to us by employees for withholding taxes
payable upon the vesting of restricted stock.(2)
    
    No share repurchases were made in the quarter ended June 30, 2008 pursuant to the share
repurchase plan, which Nobles Board of Directors authorized and adopted and that we
announced on January 31, 2002. On February 2, 2007, we announced that Nobles Board of
Directors had increased the share repurchase authorization by 20 million shares, resulting
in 30.5 million shares authorized for repurchase. Our repurchase program has no date of
expiration. 
 ITEM 6. EXHIBITS
   43




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##### Table of Contents



SIGNATURES
  NOBLE CORPORATIONDATE:  August 8, 2008
    By:
    /s/ DAVID W. WILLIAMSDavid W. WilliamsChairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)/s/ THOMAS L. MITCHELLThomas L. MitchellSenior Vice President, Chief Financial Officer, Treasurer and Controller
(Principal Financial and Accounting Officer)  44




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##### Table of Contents



INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    EXHIBIT10.1 *
    
    
    Separation agreement between Noble Corporation and Robert D. Campbell dated
May 13, 2008 (filed as exhibit 10.1 to Noble Corporations Current Report on Form 8-K
filed on May 16, 2008 and incorporated herein by reference).31.1
    
    
    Certification of David W. Williams Pursuant to the U.S. Securities Exchange Act
of 1934, as amended, Rule 13a-14(a) or Rule 15d-14(a).31.2
    
    
    Certification of Thomas L. Mitchell Pursuant to the U.S. Securities Exchange
Act of 1934, as amended, Rule 13a-14(a) or Rule 15d-14(a).32.1 +
    
    
    Certification of David W. Williams Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2 +
    
    
    Certification of Thomas L. Mitchell Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Management contract or compensatory plan or arrangement required to be
filed as an exhibit hereto.+
    
    Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K.  45