##### 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 March 31, 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 þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company 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
    
    
    24Forward-Looking Statements
    
    
    24Executive Overview
    
    
    24Contract Drilling Services Backlog
    
    
    26Internal Investigation
    
    
    27Results of Operations
    
    
    28Liquidity and Capital Resources
    
    
    32New Accounting Pronouncements
    
    
    34ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    35ITEM 4. CONTROLS AND PROCEDURES
    
    
    35PART IIITEM 1. LEGAL PROCEEDINGS
    
    
    36ITEM 1A. RISK FACTORS
    
    
    36ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    38ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    39ITEM 6. EXHIBITS
    
    
    39SIGNATURES
    
    
    40INDEX TO EXHIBITS
    
    
    41Form of Performance-Vested Restricted Stock AgreementForm of Time-Vested Restricted Stock AgreementCertification Pursuant to Rule 13a-14(a)Certification Pursuant to Rule 13a-14(a)Certification Pursuant to Section 1350Certification Pursuant to Section 1350
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    319,597
    
    
    $
    161,058Accounts receivable
    
    
    576,981
    
    
    
    613,115Insurance receivables
    
    
    
    
    
    
    39,066Inventories
    
    
    3,924
    
    
    
    3,814Prepaid expenses
    
    
    59,957
    
    
    
    20,721Other current assets
    
    
    25,033
    
    
    
    22,417Total current assets
    
    
    985,492
    
    
    
    860,191PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    6,562,748
    
    
    
    6,354,782Other
    
    
    82,609
    
    
    
    80,1696,645,357
    
    
    
    6,434,951Accumulated depreciation
    
    
    (1,700,584
    )
    
    
    (1,639,035
    )4,944,773
    
    
    
    4,795,916OTHER ASSETS
    
    
    222,767
    
    
    
    219,899$
    6,153,032
    
    
    $
    5,876,006LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    30,518
    
    
    $
    10,334Accounts payable
    
    
    169,192
    
    
    
    198,395Accrued payroll and related costs
    
    
    95,330
    
    
    
    115,914Taxes payable
    
    
    117,520
    
    
    
    85,641Interest payable
    
    
    7,546
    
    
    
    9,951Other current liabilities
    
    
    58,041
    
    
    
    72,537Total current liabilities
    
    
    478,147
    
    
    
    492,772LONG-TERM DEBT
    
    
    701,495
    
    
    
    774,182DEFERRED INCOME TAXES
    
    
    250,461
    
    
    
    240,621OTHER LIABILITIES
    
    
    64,731
    
    
    
    65,7051,494,834
    
    
    
    1,573,280COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    (6,068
    )
    
    
    (5,596
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share; 400,000 shares authorized;
268,683 shares issued and outstanding in 2008; 268,223 shares issued
and outstanding in 2007
    
    
    26,868
    
    
    
    26,822Capital in excess of par value
    
    
    666,298
    
    
    
    683,697Retained earnings
    
    
    3,976,312
    
    
    
    3,602,870Accumulated other comprehensive loss
    
    
    (5,212
    )
    
    
    (5,067
    )4,664,266
    
    
    
    4,308,322$
    6,153,032
    
    
    $
    5,876,006
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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended March 31,2008
    
    
    2007OPERATING REVENUESContract drilling services
    
    $
    797,834
    
    
    $
    576,915Reimbursables
    
    
    32,458
    
    
    
    31,143Labor contract drilling services
    
    
    30,931
    
    
    
    36,555Engineering, consulting and other
    
    
    202
    
    
    
    1,811861,425
    
    
    
    646,424OPERATING COSTS AND EXPENSESContract drilling services
    
    
    235,952
    
    
    
    196,842Reimbursables
    
    
    29,461
    
    
    
    27,546Labor contract drilling services
    
    
    25,337
    
    
    
    28,403Engineering, consulting and other
    
    
    
    
    
    
    3,641Depreciation and amortization
    
    
    82,899
    
    
    
    64,465Selling, general and administrative
    
    
    21,273
    
    
    
    14,226394,922
    
    
    
    335,123OPERATING INCOME
    
    
    466,503
    
    
    
    311,301OTHER INCOME (EXPENSE)Interest expense, net of amount capitalized
    
    
    (1,110
    )
    
    
    (1,504
    )Other, net
    
    
    3,129
    
    
    
    1,158INCOME BEFORE INCOME TAXES
    
    
    468,522
    
    
    
    310,955INCOME TAX PROVISION
    
    
    (84,334
    )
    
    
    (60,635
    )NET INCOME
    
    $
    384,188
    
    
    $
    250,320NET INCOME PER SHARE:Basic
    
    $
    1.44
    
    
    $
    0.94Diluted
    
    $
    1.43
    
    
    $
    0.93
 .
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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months Ended March 31,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    384,188
    
    
    $
    250,320Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    82,899
    
    
    
    64,465Deferred income tax provision
    
    
    9,840
    
    
    
    2,794Share-based compensation expense
    
    
    8,716
    
    
    
    7,340Pension contribution
    
    
    (3,183
    )
    
    
    (728
    )Other, net
    
    
    1,380
    
    
    
    3,631Other changes in current assets and liabilities:Accounts receivable
    
    
    36,134
    
    
    
    (53,306
    )Hurricane insurance receivables
    
    
    17,319
    
    
    
    Other current assets
    
    
    (42,268
    )
    
    
    5,795Accounts payable
    
    
    3,278
    
    
    
    (49,536
    )Other current liabilities
    
    
    (5,606
    )
    
    
    39,471Net cash provided by operating activities
    
    
    492,697
    
    
    
    270,246CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    (134,380
    )
    
    
    (115,049
    )Other capital expenditures
    
    
    (76,673
    )
    
    
    (103,216
    )Major maintenance expenditures
    
    
    (22,935
    )
    
    
    (18,413
    )Accrued capital expenditures
    
    
    (32,481
    )
    
    
    9,627Hurricane insurance receivables
    
    
    21,747
    
    
    
    Proceeds from sales of property and equipment
    
    
    282
    
    
    
    Net cash used for investing activities
    
    
    (244,440
    )
    
    
    (227,051
    )CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on bank credit facilities
    
    
    
    
    
    
    170,000Payments on bank credit facilities
    
    
    (50,000
    )
    
    
    (85,000
    )Payments of other long-term debt
    
    
    (2,516
    )
    
    
    (2,345
    )Net proceeds from employee stock transactions
    
    
    115
    
    
    
    (481
    )Dividends paid
    
    
    (10,746
    )
    
    
    (5,409
    )Repurchases of ordinary shares
    
    
    (26,571
    )
    
    
    (104,557
    )Net cash used for financing activities
    
    
    (89,718
    )
    
    
    (27,792
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    158,539
    
    
    
    15,403CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    161,058
    
    
    
    61,710CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    319,597
    
    
    $
    77,113
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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
    
    
    1,079
    
    
    
    108
    
    
    
    8,992
    
    
    
    
    
    
    
    
    
    
    
    9,100Contribution to employee
benefit plans
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3Exercise of stock options
    
    
    252
    
    
    
    25
    
    
    
    6,873
    
    
    
    
    
    
    
    
    
    
    
    6,898Restricted shares surrendered for
withholding taxes or
forfeited
    
    
    (278
    )
    
    
    (28
    )
    
    
    (6,755
    )
    
    
    
    
    
    
    
    
    
    
    (6,783
    )Repurchases of ordinary shares
    
    
    (593
    )
    
    
    (59
    )
    
    
    (26,512
    )
    
    
    
    
    
    
    
    
    
    
    (26,571
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    384,188
    
    
    
    
    
    
    
    384,188Dividends paid ($0.04 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,746
    )
    
    
    
    
    
    
    (10,746
    )Other comprehensive loss, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (145
    )
    
    
    (145
    )Balance at March 31, 2008
    
    
    268,683
    
    
    $
    26,868
    
    
    $
    666,298
    
    
    $
    3,976,312
    
    
    $
    (5,212
    )
    
    $
    4,664,266
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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Three Months Ended March 31,2008
    
    
    2007NET INCOME
    
    $
    384,188
    
    
    $
    250,320OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:Foreign currency translation adjustments
    
    
    (65
    )
    
    
    762Foreign currency forward contract activity
    
    
    (306
    )
    
    
    (829
    )Amortization of deferred pension plan amounts
    
    
    226
    
    
    
    387Other comprehensive (loss) income
    
    
    (145
    )
    
    
    320COMPREHENSIVE INCOME
    
    $
    384,043
    
    
    $
    250,640
 .
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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
 NOTE 1  BASIS OF PRESENTATION
    NOTE 2  NET INCOME PER SHARE
  Three Months Ended
March 31,2008
    
    
    2007Weighted-average shares outstanding  basic
    
    
    266,451
    
    
    
    267,121Effect of potentially dilutive shares:Stock options
    
    
    1,884
    
    
    
    2,353Time-vested restricted stock
    
    
    140
    
    
    
    32Performance-vested restricted stock
    
    
    103
    
    
    
    94Weighted-average shares outstanding  diluted
    
    
    268,578
    
    
    
    269,600Net income  basic and diluted
    
    $
    384,188
    
    
    $
    250,320Net income per share:Basic
    
    $
    1.44
    
    
    $
    0.94Diluted
    
    $
    1.43
    
    
    $
    0.93
  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 3  PROPERTY AND EQUIPMENT
   NOTE 4  DEBT
  NOTE 5  INCOME TAXES
   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 6  EMPLOYEE BENEFIT PLANS
  Three Months Ended March 31,2008
    
    
    2007International
    
    
    Domestic
    
    
    International
    
    
    DomesticService cost
    
    $
    1,420
    
    
    $
    1,574
    
    
    $
    1,270
    
    
    $
    1,665Interest cost
    
    
    1,251
    
    
    
    1,615
    
    
    
    1,020
    
    
    
    1,495Return on plan assets
    
    
    (1,692
    )
    
    
    (2,227
    )
    
    
    (1,131
    )
    
    
    (1,650
    )Amortization of prior service cost
    
    
    
    
    
    
    98
    
    
    
    
    
    
    
    99Amortization of transition obligation
    
    
    43
    
    
    
    
    
    
    
    54
    
    
    
    Recognized net actuarial loss
    
    
    40
    
    
    
    87
    
    
    
    54
    
    
    
    380Net pension expense
    
    $
    1,062
    
    
    $
    1,147
    
    
    $
    1,267
    
    
    $
    1,989
    NOTE 7  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   Accounting for Derivative
Instruments and Hedging Activities
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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 Ended
March 31,2008
    
    
    2007Net unrealized gain at beginning of period
    
    $
    2,219
    
    
    $
    3,217Activity during period:Settlement of forward contracts outstanding at beginning
of period
    
    
    (1,086
    )
    
    
    (1,220
    )Net unrealized gain on outstanding foreign currency
forward contracts
    
    
    780
    
    
    
    391Net unrealized gain at March 31
    
    $
    1,913
    
    
    $
    2,388
 NOTE 8  FAIR VALUE OF FINANCIAL INSTRUMENTS
 Fair
Value Measurements Partial Deferral of the
Effective Date of Statement 157
   March 31, 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
    
    $
    1,913
    
    
    $
    
    
    
    $
    1,913
    
    
    $
    
    
    
    $
    2,219
    
    
    $
    2,219
  The Fair Value Option for Financial Assets and
Liabilities
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NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share amounts.)
  NOTE 9  COMMITMENTS AND CONTINGENCIES
      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.)
     Internal Investigation
  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 10  SEGMENT AND RELATED INFORMATION
  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.)
  Contract DrillingServices
    
    
    Other
    
    
    TotalThree Months Ended March 31, 2008Revenues from external customers
    
    $
    819,187
    
    
    $
    42,238
    
    
    $
    861,425Depreciation and amortization
    
    
    80,785
    
    
    
    2,114
    
    
    
    82,899Segment operating income
    
    
    463,801
    
    
    
    2,702
    
    
    
    466,503Interest expense, net of amount
capitalized
    
    
    994
    
    
    
    116
    
    
    
    1,110Income tax provision (benefit)
    
    
    88,798
    
    
    
    (4,464
    )
    
    
    84,334Segment profit
    
    
    376,872
    
    
    
    7,316
    
    
    
    384,188Total assets (at end of period)
    
    
    5,627,977
    
    
    
    525,055
    
    
    
    6,153,032Capital expenditures
    
    
    227,767
    
    
    
    6,221
    
    
    
    233,988Three Months Ended March 31, 2007Revenues from external customers
    
    $
    596,914
    
    
    $
    49,510
    
    
    $
    646,424Depreciation and amortization
    
    
    61,809
    
    
    
    2,656
    
    
    
    64,465Segment operating income
    
    
    307,523
    
    
    
    3,778
    
    
    
    311,301Interest expense, net of amount
capitalized
    
    
    1,366
    
    
    
    138
    
    
    
    1,504Income tax provision (benefit)
    
    
    63,387
    
    
    
    (2,752
    )
    
    
    60,635Segment profit
    
    
    243,463
    
    
    
    6,857
    
    
    
    250,320Total assets (at end of period)
    
    
    4,491,032
    
    
    
    329,596
    
    
    
    4,820,628Capital expenditures
    
    
    195,770
    
    
    
    40,908
    
    
    
    236,678
 NOTE 11  ACCOUNTING PRONOUNCEMENTS
 Noncontrolling Interests in Consolidated
Financial Statements  An Amendment of ARB No. 51
 Business Combinations
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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.)
 
    
    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
 NOTE 12  SUBSEQUENT EVENT
   NOTE 13  GUARANTEES OF REGISTERED SECURITIES
  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.)
   17




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NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
March 31, 2008
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    1,418
    
    
    $
    271
    
    
    $
    67
    
    
    $
    317,841
    
    
    $
    
    
    
    $
    319,597Accounts receivable
    
    
    
    
    
    
    29,590
    
    
    
    9,201
    
    
    
    538,190
    
    
    
    
    
    
    
    576,981Insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,924
    
    
    
    
    
    
    
    3,924Prepaid expenses
    
    
    
    
    
    
    1,587
    
    
    
    96
    
    
    
    58,274
    
    
    
    
    
    
    
    59,957Accounts receivable from affiliates
    
    
    346,523
    
    
    
    
    
    
    
    571,589
    
    
    
    373,330
    
    
    
    (1,291,442
    )
    
    
    Other current assets
    
    
    1,834
    
    
    
    25
    
    
    
    150
    
    
    
    77,074
    
    
    
    (54,050
    )
    
    
    25,033Total current assets
    
    
    349,775
    
    
    
    31,473
    
    
    
    581,103
    
    
    
    1,368,633
    
    
    
    (1,345,492
    )
    
    
    985,492PROPERTY AND EQUIPMENTDrilling equipment and facilities
    
    
    
    
    
    
    1,799,952
    
    
    
    112,267
    
    
    
    4,650,529
    
    
    
    
    
    
    
    6,562,748Other
    
    
    
    
    
    
    170
    
    
    
    
    
    
    
    82,439
    
    
    
    
    
    
    
    82,609
    
    
    
    1,800,122
    
    
    
    112,267
    
    
    
    4,732,968
    
    
    
    
    
    
    
    6,645,357Accumulated depreciation
    
    
    
    
    
    
    (89,920
    )
    
    
    (66,239
    )
    
    
    (1,544,425
    )
    
    
    
    
    
    
    (1,700,584
    )
    
    
    
    1,710,202
    
    
    
    46,028
    
    
    
    3,188,543
    
    
    
    
    
    
    
    4,944,773NOTES RECEIVABLE FROM AFFILIATES
    
    
    511,835
    
    
    
    20,963
    
    
    
    44,159
    
    
    
    1,455,939
    
    
    
    (2,032,896
    )
    
    
    INVESTMENTS IN AFFILIATES
    
    
    4,279,668
    
    
    
    5,278,029
    
    
    
    3,173,789
    
    
    
    
    
    
    
    (12,731,486
    )
    
    
    OTHER ASSETS
    
    
    3,489
    
    
    
    6,101
    
    
    
    4,301
    
    
    
    208,876
    
    
    
    
    
    
    
    222,767$
    5,144,767
    
    
    $
    7,046,768
    
    
    $
    3,849,380
    
    
    $
    6,221,991
    
    
    $
    (16,109,874
    )
    
    $
    6,153,032LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    
    
    
    $
    26,489
    
    
    $
    
    
    
    $
    30,518
    
    
    $
    (26,489
    )
    
    $
    30,518Accounts payable
    
    
    
    
    
    
    4,277
    
    
    
    5,917
    
    
    
    158,998
    
    
    
    
    
    
    
    169,192Accrued payroll and related costs
    
    
    
    
    
    
    480
    
    
    
    12,209
    
    
    
    82,641
    
    
    
    
    
    
    
    95,330Taxes payable
    
    
    
    
    
    
    2,114
    
    
    
    
    
    
    
    115,406
    
    
    
    
    
    
    
    117,520Interest payable
    
    
    9,712
    
    
    
    14,005
    
    
    
    10,848
    
    
    
    542
    
    
    
    (27,561
    )
    
    
    7,546Accounts payable to affiliates
    
    
    
    
    
    
    1,291,442
    
    
    
    
    
    
    
    
    
    
    
    (1,291,442
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    3
    
    
    
    404
    
    
    
    57,634
    
    
    
    
    
    
    
    58,041Total current liabilities
    
    
    9,712
    
    
    
    1,338,810
    
    
    
    29,378
    
    
    
    445,739
    
    
    
    (1,345,492
    )
    
    
    478,147LONG-TERM DEBT
    
    
    349,810
    
    
    
    
    
    
    
    351,685
    
    
    
    
    
    
    
    
    
    
    
    701,495NOTES PAYABLE TO AFFILIATES
    
    
    114,300
    
    
    
    1,221,639
    
    
    
    120,000
    
    
    
    576,957
    
    
    
    (2,032,896
    )
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    4,795
    
    
    
    14,677
    
    
    
    230,989
    
    
    
    
    
    
    
    250,461OTHER LIABILITIES
    
    
    6,679
    
    
    
    23,267
    
    
    
    1,587
    
    
    
    33,198
    
    
    
    
    
    
    
    64,731480,501
    
    
    
    2,588,511
    
    
    
    517,327
    
    
    
    913,553
    
    
    
    (3,005,058
    )
    
    
    1,494,834COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,068
    )
    
    
    
    
    
    
    (6,068
    )SHAREHOLDERS EQUITYOrdinary shares-par value $0.10 per share
    
    
    26,868
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,868Capital in excess of par value
    
    
    666,298
    
    
    
    1,279,983
    
    
    
    870,744
    
    
    
    793,086
    
    
    
    (2,943,813
    )
    
    
    666,298Retained earnings
    
    
    3,976,312
    
    
    
    3,178,274
    
    
    
    2,462,280
    
    
    
    4,153,302
    
    
    
    (9,793,856
    )
    
    
    3,976,312Accumulated other comprehensive
income (loss)
    
    
    (5,212
    )
    
    
    
    
    
    
    (971
    )
    
    
    (5,212
    )
    
    
    6,183
    
    
    
    (5,212
    )4,664,266
    
    
    
    4,458,257
    
    
    
    3,332,053
    
    
    
    4,941,176
    
    
    
    (12,731,486
    )
    
    
    4,664,266$
    5,144,767
    
    
    $
    7,046,768
    
    
    $
    3,849,380
    
    
    $
    6,221,991
    
    
    $
    (16,109,874
    )
    
    $
    6,153,032
 18




---



##### 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
    
    
    
    
    
    
    
    39,066Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,814
    
    
    
    
    
    
    
    3,814Prepaid expenses
    
    
    
    
    
    
    858
    
    
    
    82
    
    
    
    19,781
    
    
    
    
    
    
    
    20,721Accounts receivable from affiliates
    
    
    419,197
    
    
    
    
    
    
    
    576,239
    
    
    
    
    
    
    
    (995,436
    )
    
    
    Other current assets
    
    
    3,474
    
    
    
    160
    
    
    
    135
    
    
    
    61,340
    
    
    
    (42,692
    )
    
    
    22,417Total 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
 19




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended March 31, 2008
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    30,969
    
    
    $
    13,590
    
    
    $
    753,275
    
    
    $
    
    
    
    $
    797,834Reimbursables
    
    
    
    
    
    
    494
    
    
    
    120
    
    
    
    31,844
    
    
    
    
    
    
    
    32,458Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,931
    
    
    
    
    
    
    
    30,931Engineering, consulting and other
    
    
    
    
    
    
    9,300
    
    
    
    
    
    
    
    202
    
    
    
    (9,300
    )
    
    
    202
    
    
    
    40,763
    
    
    
    13,710
    
    
    
    816,252
    
    
    
    (9,300
    )
    
    
    861,425OPERATING COSTS AND EXPENSESContract drilling services
    
    
    5,932
    
    
    
    9,054
    
    
    
    6,557
    
    
    
    223,709
    
    
    
    (9,300
    )
    
    
    235,952Reimbursables
    
    
    
    
    
    
    445
    
    
    
    116
    
    
    
    28,900
    
    
    
    
    
    
    
    29,461Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,337
    
    
    
    
    
    
    
    25,337Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    
    
    
    
    7,608
    
    
    
    1,639
    
    
    
    73,652
    
    
    
    
    
    
    
    82,899Selling, general and administrative
    
    
    2,708
    
    
    
    1,485
    
    
    
    460
    
    
    
    16,620
    
    
    
    
    
    
    
    21,2738,640
    
    
    
    18,592
    
    
    
    8,772
    
    
    
    368,218
    
    
    
    (9,300
    )
    
    
    394,922OPERATING INCOME (LOSS)
    
    
    (8,640
    )
    
    
    22,171
    
    
    
    4,938
    
    
    
    448,034
    
    
    
    
    
    
    
    466,503OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    398,327
    
    
    
    371,738
    
    
    
    163,540
    
    
    
    
    
    
    
    (933,605
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (7,340
    )
    
    
    (10,337
    )
    
    
    (6,388
    )
    
    
    9,192
    
    
    
    13,763
    
    
    
    (1,110
    )Other, net
    
    
    1,936
    
    
    
    
    
    
    
    
    
    
    
    14,956
    
    
    
    (13,763
    )
    
    
    3,129INCOME BEFORE INCOME TAXES
    
    
    384,283
    
    
    
    383,572
    
    
    
    162,090
    
    
    
    472,182
    
    
    
    (933,605
    )
    
    
    468,522INCOME TAX (PROVISION) BENEFIT
    
    
    (95
    )
    
    
    3,498
    
    
    
    (1,009
    )
    
    
    (86,728
    )
    
    
    
    
    
    
    (84,334
    )NET INCOME
    
    $
    384,188
    
    
    $
    387,070
    
    
    $
    161,081
    
    
    $
    385,454
    
    
    $
    (933,605
    )
    
    $
    384,188
 20




---



##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended March 31, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalOPERATING REVENUESContract drilling services
    
    $
    
    
    
    $
    16,591
    
    
    $
    13,081
    
    
    $
    547,243
    
    
    $
    
    
    
    $
    576,915Reimbursables
    
    
    
    
    
    
    139
    
    
    
    226
    
    
    
    30,778
    
    
    
    
    
    
    
    31,143Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,555
    
    
    
    
    
    
    
    36,555Engineering, consulting and other
    
    
    
    
    
    
    9,977
    
    
    
    
    
    
    
    1,805
    
    
    
    (9,971
    )
    
    
    1,811
    
    
    
    26,707
    
    
    
    13,307
    
    
    
    616,381
    
    
    
    (9,971
    )
    
    
    646,424OPERATING COSTS AND EXPENSESContract drilling services
    
    
    5,522
    
    
    
    6,504
    
    
    
    7,236
    
    
    
    187,551
    
    
    
    (9,971
    )
    
    
    196,842Reimbursables
    
    
    
    
    
    
    115
    
    
    
    226
    
    
    
    27,205
    
    
    
    
    
    
    
    27,546Labor contract drilling services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,403
    
    
    
    
    
    
    
    28,403Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,641
    
    
    
    
    
    
    
    3,641Depreciation and amortization
    
    
    
    
    
    
    6,278
    
    
    
    1,584
    
    
    
    56,603
    
    
    
    
    
    
    
    64,465Selling, general and administrative
    
    
    2,065
    
    
    
    966
    
    
    
    330
    
    
    
    10,865
    
    
    
    
    
    
    
    14,2267,587
    
    
    
    13,863
    
    
    
    9,376
    
    
    
    314,268
    
    
    
    (9,971
    )
    
    
    335,123OPERATING INCOME (LOSS)
    
    
    (7,587
    )
    
    
    12,844
    
    
    
    3,931
    
    
    
    302,113
    
    
    
    
    
    
    
    311,301OTHER INCOME (EXPENSE)Equity earnings in affiliates (net of tax)
    
    
    263,216
    
    
    
    246,396
    
    
    
    115,067
    
    
    
    
    
    
    
    (624,679
    )
    
    
    Interest expense, net of amount
capitalized
    
    
    (5,607
    )
    
    
    (11,843
    )
    
    
    (7,329
    )
    
    
    10,636
    
    
    
    12,639
    
    
    
    (1,504
    )Other, net
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    13,788
    
    
    
    (12,639
    )
    
    
    1,158INCOME BEFORE INCOME TAXES
    
    
    250,031
    
    
    
    247,397
    
    
    
    111,669
    
    
    
    326,537
    
    
    
    (624,679
    )
    
    
    310,955INCOME TAX (PROVISION) BENEFIT
    
    
    289
    
    
    
    4,023
    
    
    
    (274
    )
    
    
    (64,673
    )
    
    
    
    
    
    
    (60,635
    )NET INCOME
    
    $
    250,320
    
    
    $
    251,420
    
    
    $
    111,395
    
    
    $
    261,864
    
    
    $
    (624,679
    )
    
    $
    250,320
 21




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Three Months Ended March 31, 2008
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    384,188
    
    
    $
    387,070
    
    
    $
    161,081
    
    
    $
    385,454
    
    
    $
    (933,605
    )
    
    $
    384,188Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    7,608
    
    
    
    1,639
    
    
    
    73,652
    
    
    
    
    
    
    
    82,899Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    2,181
    
    
    
    7,659
    
    
    
    
    
    
    
    9,840Share-based compensation expense
    
    
    8,716
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,716Equity earnings in affiliates
    
    
    (398,327
    )
    
    
    (371,738
    )
    
    
    (163,540
    )
    
    
    
    
    
    
    933,605
    
    
    
    Pension contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,183
    )
    
    
    
    
    
    
    (3,183
    )Other
    
    
    1,343
    
    
    
    
    
    
    
    (398
    )
    
    
    435
    
    
    
    
    
    
    
    1,380Other changes in current assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (6,690
    )
    
    
    498
    
    
    
    42,326
    
    
    
    
    
    
    
    36,134Hurricane insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,319
    
    
    
    
    
    
    
    17,319Other current assets
    
    
    1,640
    
    
    
    (594
    )
    
    
    (29
    )
    
    
    (43,285
    )
    
    
    
    
    
    
    (42,268
    )Accounts payable
    
    
    
    
    
    
    (1,263
    )
    
    
    1,139
    
    
    
    3,402
    
    
    
    
    
    
    
    3,278Other current liabilities
    
    
    5,590
    
    
    
    7,217
    
    
    
    (5,357
    )
    
    
    (13,056
    )
    
    
    
    
    
    
    (5,606
    )Net cash provided by (used for) operating
activities
    
    
    3,150
    
    
    
    21,610
    
    
    
    (2,786
    )
    
    
    470,723
    
    
    
    
    
    
    
    492,697CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    (134,380
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (134,380
    )Other capital expenditures
    
    
    
    
    
    
    
    
    
    
    (1,178
    )
    
    
    (75,495
    )
    
    
    
    
    
    
    (76,673
    )Major maintenance expenditures
    
    
    
    
    
    
    
    
    
    
    (748
    )
    
    
    (22,187
    )
    
    
    
    
    
    
    (22,935
    )Accrued capital expenditures
    
    
    
    
    
    
    (470
    )
    
    
    
    
    
    
    (32,011
    )
    
    
    
    
    
    
    (32,481
    )Hurricane insurance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,747
    
    
    
    
    
    
    
    21,747Repayments from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,244
    
    
    
    (6,244
    )
    
    
    Proceeds from sales of property and equipment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    282
    
    
    
    
    
    
    
    282Net cash used for investing
activities
    
    
    
    
    
    
    (134,850
    )
    
    
    (1,926
    )
    
    
    (101,420
    )
    
    
    (6,244
    )
    
    
    (244,440
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on bank credit facilities
    
    
    (50,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,000
    )Payments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,516
    )
    
    
    
    
    
    
    (2,516
    )Advances (to) from affiliates
    
    
    72,926
    
    
    
    119,755
    
    
    
    4,706
    
    
    
    (197,387
    )
    
    
    
    
    
    
    Repayment of notes to affiliates
    
    
    
    
    
    
    (6,244
    )
    
    
    
    
    
    
    
    
    
    
    6,244
    
    
    
    Net proceeds from employee stock transactions
    
    
    115
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115Dividends paid
    
    
    (10,746
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,746
    )Repurchases of ordinary shares
    
    
    (26,571
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,571
    )Net cash provided by (used for) financing
activities
    
    
    (14,276
    )
    
    
    113,511
    
    
    
    4,706
    
    
    
    (199,903
    )
    
    
    6,244
    
    
    
    (89,718
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    (11,126
    )
    
    
    271
    
    
    
    (6
    )
    
    
    169,400
    
    
    
    
    
    
    
    158,539CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    12,544
    
    
    
    
    
    
    
    73
    
    
    
    148,441
    
    
    
    
    
    
    
    161,058CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    1,418
    
    
    $
    271
    
    
    $
    67
    
    
    $
    317,841
    
    
    $
    
    
    
    $
    319,597
 22




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##### Table of Contents



NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Three Months Ended March 31, 2007
 NHC and NDH
    
    
    Noble
    
    
    Other
    
    
    ConsolidatingNoble
    
    
    Combined
    
    
    Drilling
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    250,320
    
    
    $
    251,420
    
    
    $
    111,395
    
    
    $
    261,864
    
    
    $
    (624,679
    )
    
    $
    250,320Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    6,278
    
    
    
    1,584
    
    
    
    56,603
    
    
    
    
    
    
    
    64,465Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    1,248
    
    
    
    1,546
    
    
    
    
    
    
    
    2,794Share-based compensation expense
    
    
    7,340
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,340Equity earnings in affiliates
    
    
    (263,216
    )
    
    
    (246,396
    )
    
    
    (115,067
    )
    
    
    
    
    
    
    624,679
    
    
    
    Pension contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (728
    )
    
    
    
    
    
    
    (728
    )Other
    
    
    (224
    )
    
    
    457
    
    
    
    1,372
    
    
    
    2,026
    
    
    
    
    
    
    
    3,631Other changes in current assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (3,282
    )
    
    
    (5,433
    )
    
    
    (44,591
    )
    
    
    
    
    
    
    (53,306
    )Other current assets
    
    
    1
    
    
    
    (8
    )
    
    
    690
    
    
    
    5,112
    
    
    
    
    
    
    
    5,795Accounts payable
    
    
    (12,676
    )
    
    
    (2,175
    )
    
    
    410
    
    
    
    (35,095
    )
    
    
    
    
    
    
    (49,536
    )Other current liabilities
    
    
    
    
    
    
    (140
    )
    
    
    (4,786
    )
    
    
    44,397
    
    
    
    
    
    
    
    39,471Net cash provided by (used for) operating
activities
    
    
    (18,455
    )
    
    
    6,154
    
    
    
    (8,587
    )
    
    
    291,134
    
    
    
    
    
    
    
    270,246CASH FLOWS FROM INVESTING ACTIVITIESNew construction
    
    
    
    
    
    
    (69,527
    )
    
    
    
    
    
    
    (45,522
    )
    
    
    
    
    
    
    (115,049
    )Other capital expenditures
    
    
    
    
    
    
    (932
    )
    
    
    (5,336
    )
    
    
    (96,948
    )
    
    
    
    
    
    
    (103,216
    )Major maintenance expenditures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,413
    )
    
    
    
    
    
    
    (18,413
    )Accrued capital expenditures
    
    
    
    
    
    
    (6,334
    )
    
    
    
    
    
    
    15,961
    
    
    
    
    
    
    
    9,627Repayments from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,692
    
    
    
    (5,692
    )
    
    
    Net cash used for investing
activities
    
    
    
    
    
    
    (76,793
    )
    
    
    (5,336
    )
    
    
    (139,230
    )
    
    
    (5,692
    )
    
    
    (227,051
    )CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on credit facilities
    
    
    85,000
    
    
    
    
    
    
    
    85,000
    
    
    
    
    
    
    
    
    
    
    
    170,000Payments on bank credit facilities
    
    
    
    
    
    
    
    
    
    
    (85,000
    )
    
    
    
    
    
    
    
    
    
    
    (85,000
    )Payments of other long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,345
    )
    
    
    
    
    
    
    (2,345
    )Accounts receivable from affiliates
    
    
    51,702
    
    
    
    
    
    
    
    13,923
    
    
    
    
    
    
    
    (65,625
    )
    
    
    Accounts payable to affiliates
    
    
    
    
    
    
    76,317
    
    
    
    
    
    
    
    (141,942
    )
    
    
    65,625
    
    
    
    Note payable to affiliate
    
    
    
    
    
    
    (5,692
    )
    
    
    
    
    
    
    
    
    
    
    5,692
    
    
    
    Net proceeds from employee stock transactions
    
    
    (481
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (481
    )Dividends paid
    
    
    (5,409
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,409
    )Repurchases of ordinary shares
    
    
    (104,557
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (104,557
    )Net cash provided by (used for) financing
activities
    
    
    26,255
    
    
    
    70,625
    
    
    
    13,923
    
    
    
    (144,287
    )
    
    
    5,692
    
    
    
    (27,792
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    7,800
    
    
    
    (14
    )
    
    
    
    
    
    
    7,617
    
    
    
    
    
    
    
    15,403CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    2,458
    
    
    
    36
    
    
    
    
    
    
    
    59,216
    
    
    
    
    
    
    
    61,710CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    10,258
    
    
    $
    22
    
    
    $
    
    
    
    $
    66,833
    
    
    $
    
    
    
    $
    77,113
 
 23




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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
  Noble Roger Eason
  24




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##### Table of Contents




    
    commenced operating the newbuild F&G JU-2000E enhanced premium independent leg
cantilevered jackup Noble Roger Lewisfollowing delivery acceptance in the fourth quarter
of 2007. The unit is under contract with Shell in the Middle East at a dayrate of
$105,000;
    
    continued construction on the three remaining newbuild ultra-deepwater semisubmersibles,
the Noble Dave Beard, Noble Danny Adkinsand Noble Jim Day, which are scheduled for
delivery in the fourth quarter of 2008, the first quarter of 2009 and the fourth quarter of
2009, respectively; and
    
    continued construction on the two remaining F&G JU-2000E enhanced premium independent
leg cantilevered jackups, the Noble Hans Deuland Noble Scott Marks, which are being
constructed in China and are scheduled for delivery in the third quarter of 2008 and the
second quarter of 2009, respectively.
       25




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##### Table of Contents



CONTRACT DRILLING SERVICES BACKLOG
  For the Years Ending December 31,Total
    
    
    2008(1)
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012-2016(In thousands)Contract Drilling Services BacklogSemisubmersibles/Drillships(2)
    
    $
    8,651,000
    (2)
    
    $
    1,042,000
    
    
    $
    1,661,000
    
    
    $
    1,674,000
    
    
    $
    1,424,000
    
    
    $
    2,850,000Jackups/Submersibles
    
    
    2,502,000
    
    
    
    1,355,000
    
    
    
    857,000
    
    
    
    221,000
    
    
    
    69,000
    
    
    
    Total
    
    $
    11,153,000
    
    
    $
    2,397,000
    
    
    $
    2,518,000
    
    
    $
    1,895,000
    
    
    $
    1,493,000
    
    
    $
    2,850,000Percent of AvailableOperating Days Committed(3)
    
    
    
    
    
    
    83
    %
    
    
    50
    %
    
    
    27
    %
    
    
    18
    %
    
    
    6
    %
 
 (1)
    
    Represents a nine-month period beginning April 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) we 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 total backlog amount for semisubmersibles/drillships includes $350 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.   26




---



##### Table of Contents



INTERNAL INVESTIGATION
       27




---



##### Table of Contents



RESULTS OF OPERATIONS
 For the Three Months Ended March 31, 2008 and 2007
 General
   28




---



##### Table of Contents



Contract DrillingServices
    
    
    Other
    
    
    Total(In thousands)Three Months Ended March 31, 2008Operating Revenues:Contract drilling services
    
    $
    797,834
    
    
    $
    
    
    
    $
    797,834Reimbursables
    
    
    21,166
    
    
    
    11,292
    
    
    
    32,458Labor contract drilling services
    
    
    
    
    
    
    30,931
    
    
    
    30,931Engineering, consulting and other
    
    
    187
    
    
    
    15
    
    
    
    202819,187
    
    
    
    42,238
    
    
    
    861,425Operating Costs and Expenses:Contract drilling services
    
    $
    235,952
    
    
    $
    
    
    
    $
    235,952Reimbursables
    
    
    18,753
    
    
    
    10,708
    
    
    
    29,461Labor contract drilling services
    
    
    
    
    
    
    25,337
    
    
    
    25,337Engineering, consulting and other
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    80,785
    
    
    
    2,114
    
    
    
    82,899Selling, general and administrative
    
    
    19,896
    
    
    
    1,377
    
    
    
    21,273355,386
    
    
    
    39,536
    
    
    
    394,922Operating Income
    
    $
    463,801
    
    
    $
    2,702
    
    
    $
    466,503
 Contract DrillingServices
    
    
    Other
    
    
    Total(In thousands)Three Months Ended March 31, 2007Operating Revenues:Contract drilling services
    
    $
    576,915
    
    
    $
    
    
    
    $
    576,915Reimbursables
    
    
    19,769
    
    
    
    11,374
    
    
    
    31,143Labor contract drilling services
    
    
    
    
    
    
    36,555
    
    
    
    36,555Engineering, consulting and other
    
    
    230
    
    
    
    1,581
    
    
    
    1,811596,914
    
    
    
    49,510
    
    
    
    646,424Operating Costs and Expenses:Contract drilling services
    
    $
    196,842
    
    
    $
    
    
    
    $
    196,842Reimbursables
    
    
    16,939
    
    
    
    10,607
    
    
    
    27,546Labor contract drilling services
    
    
    
    
    
    
    28,403
    
    
    
    28,403Engineering, consulting and other
    
    
    141
    
    
    
    3,500
    
    
    
    3,641Depreciation and amortization
    
    
    61,809
    
    
    
    2,656
    
    
    
    64,465Selling, general and administrative
    
    
    13,660
    
    
    
    566
    
    
    
    14,226289,391
    
    
    
    45,732
    
    
    
    335,123Operating Income
    
    $
    307,523
    
    
    $
    3,778
    
    
    $
    311,301
 29




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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 EndedMarch 31,
    
    March 31,
    
    March 31,2008
    
    2007
    
    2008
    
    2007
    
    2008
    
    2007Jackups
    
    
    97
    %
    
    
    98
    %
    
    
    3,601
    
    
    
    3,512
    
    
    $
    145,337
    
    
    $
    102,112Semisubmersibles - >6,000 (3)
    
    
    100
    %
    
    
    100
    %
    
    
    637
    
    
    
    540
    
    
    
    291,924
    
    
    
    259,837Semisubmersibles - <6,000 (4)
    
    
    100
    %
    
    
    67
    %
    
    
    273
    
    
    
    180
    
    
    
    201,699
    
    
    
    176,722Drillships
    
    
    67
    %
    
    
    93
    %
    
    
    182
    
    
    
    252
    
    
    
    133,665
    
    
    
    100,740Submersibles
    
    
    66
    %
    
    
    95
    %
    
    
    179
    
    
    
    256
    
    
    
    51,274
    
    
    
    81,047Total Company
    
    
    94
    %
    
    
    96
    %
    
    
    4,872
    
    
    
    4,740
    
    
    $
    163,772
    
    
    $
    121,705
 
 (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. Contract Drilling Services
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Contract drilling services
    
    $
    797,834
    
    
    $
    576,915
    
    
    $
    235,952
    
    
    $
    196,842Reimbursables (1)
    
    
    21,166
    
    
    
    19,769
    
    
    
    18,753
    
    
    
    16,939Engineering, consulting and other
    
    
    187
    
    
    
    230
    
    
    
    
    
    
    
    141Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    80,785
    
    
    
    61,809Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    19,896
    
    
    
    13,660Total
    
    $
    819,187
    
    
    $
    596,914
    
    
    $
    355,386
    
    
    $
    289,391
 
 (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 Clyde
Boudreaux Noble Roger Lewis
 30




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##### Table of Contents



Noble
Fri Rodli
 Operating Costs and Expenses. Noble Clyde Boudreaux Noble Roger Lewis
 Noble Clyde
Boudreaux Noble Roger Lewis
 Other
  Operating CostsOperating Revenues
    
    
    and ExpensesThree Months Ended
    
    
    Three Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Labor contract drilling services
    
    $
    30,931
    
    
    $
    36,555
    
    
    $
    25,337
    
    
    $
    28,403Engineering, consulting and other
    
    
    15
    
    
    
    1,581
    
    
    
    
    
    
    
    3,500Reimbursables (1)
    
    
    11,292
    
    
    
    11,374
    
    
    
    10,708
    
    
    
    10,607Depreciation and amortization
    
    
    N/A
    
    
    
    N/A
    
    
    
    2,114
    
    
    
    2,656Selling, general and administrative
    
    
    N/A
    
    
    
    N/A
    
    
    
    1,377
    
    
    
    566Total
    
    $
    42,238
    
    
    $
    49,510
    
    
    $
    39,536
    
    
    $
    45,732
 
 (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 Kolskaya Noble Kolskaya Noble Kolskaya
  31




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##### Table of Contents



Operating Costs and Expenses. Noble Kolskaya
  Noble Kolskaya
 Other Items
 Selling, General and Administrative Expenses.
 Interest Expense.
 Other, net.
 Income Tax Provision.
 
 LIQUIDITY AND CAPITAL RESOURCES
 Overview
    32




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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
   33




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##### Table of Contents



NEW ACCOUNTING PRONOUNCEMENTS
 Disclosures about Derivative Instruments and
Hedging Activities
 34




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
  Foreign Currency Risk
    Market Risk
  
 ITEM 4. CONTROLS AND PROCEDURES
  35




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  We may have difficulty obtaining or maintaining insurance in the future and we cannot fully
insure against all of the risks and hazards we face.
    36




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##### Table of Contents



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.
   37




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##### Table of Contents



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total Number of Shares
    
    Maximum Number ofTotal Number
    
    
    
    
    
    Purchased as Part of
    
    Shares that May Yet Beof Shares
    
    Average Price
    
    Publicly Announced
    
    Purchased Under thePeriod
    
    Purchased
    
    Paid per Share(2)(3)
    
    Plans or Programs(1)(2)(3)
    
    Plans or Programs(1)January 2008
    
    
    206,746
    (4)
    
    $
    45.24
    
    
    
    199,000
    
    
    
    26,106,000February 2008
    
    
    535,319
    (5)
    
    $
    44.84
    
    
    
    394,000
    
    
    
    25,712,000March 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,712,000
 
 (1)
    
    All share purchases were made in the open market and were effected pursuant to the share
repurchase program that 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 20,000,000 shares, resulting in
30,524,000 shares authorized for repurchase. Our share repurchase program has no date of
expiration.(2)
    
    Shares repurchased in January totaled 199,000 shares at an average price of $44.84 per share
($9 million).(3)
    
    Shares repurchased in February totaled 394,000 at an average price of $44.80 per share ($18
million).(4)
    
    Includes 7,746 ordinary shares at an average price of $55.58 per share acquired by surrender
of ordinary shares to us by employees for withholding taxes payable upon the vesting of
restricted stock.(5)
    
    Includes 141,319 ordinary shares at an average price of $44.95 per share acquired by
surrender of ordinary shares to us by employees for withholding taxes payable upon vesting of
restricted stock. 38




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##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 (a)
    
    The annual general meeting of members of Noble was held in Houston, Texas, at
10:00 a.m., local time, on May 1, 2008.(b)
    
    Proxies were solicited by the board of directors of Noble pursuant to
Regulation 14A under the U.S. Securities Exchange Act of 1934, as amended. There was
no solicitation in opposition to the board of directors nominees for election as
directors, Lawrence J. Chazen and Mary P. Ricciardello, each an incumbent director,
and they were duly re-elected. The terms of Julie H. Edwards, Marc E. Leland, David
W. Williams, Michael A. Cawley, Luke R. Corbett and Jack E. Little, each an incumbent
director, continued following the annual general meeting.(c)
    
    Out of a total of 268,635,604 ordinary shares of Noble outstanding and
entitled to vote at the annual general meeting, 233,757,834 shares were present in
person or by proxy, representing a majority of the outstanding shares. Two matters,
as fully described in the proxy statement for the annual general meeting, were voted
on by members. The first matter voted on was the election of two directors to serve
three-year terms on the board of directors of Noble. The results of voting were as
follows:
 Number of SharesNumber of Shares
    
    WITHHOLDING AUTHORITYVoting FOR Re-election
    
    to Vote for Re-electionNominee for Re-election as Director
    
    as Director
    
    as DirectorLawrence J. Chazen
    
    
    205,863,080
    
    
    
    27,894,754Mary P. Ricciardello
    
    
    205,909,206
    
    
    
    27,848,628
   (d)
    
    Inapplicable.
 
 ITEM 6. EXHIBITS
  39




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##### Table of Contents



SIGNATURES
  NOBLE CORPORATIONDATE: May 9, 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) 40




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##### Table of Contents



INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    EXHIBIT10.1*
    
    Form of Noble Corporation Performance-Vested Restricted Stock Agreement under
the Noble Corporation 1991 Stock Option and Restricted Stock Plan.10.2*
    
    Form of Noble Corporation Time-Vested Restricted Stock Agreement under the
Noble Corporation 1991 Stock Option and Restricted Stock Plan.10.3*
    
    Noble Corporation 2008 Short Term Incentive Plan (filed as Exhibit 10.1 to
Noble Corporations Current Report on Form 8-K filed on May 6, 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. 41