Noble 8-K Other Events

Exhibit 99.2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

	September 30,			December 31,
	2008			2007
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	213,653		$	161,058
Accounts receivable		662,178			613,115
Insurance receivables		—			39,066
Prepaid expenses		40,110			20,721
Other current assets		48,514			26,231
Total current assets		964,455			860,191
PROPERTY AND EQUIPMENT
Drilling equipment and facilities		7,115,513			6,354,782
Other		100,961			80,169
		7,216,474			6,434,951
Accumulated depreciation		(1,821,411	)		(1,639,035	)
		5,395,063			4,795,916
OTHER ASSETS		251,639			219,899
	$	6,611,157		$	5,876,006
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	25,352		$	10,334
Accounts payable		305,718			198,395
Accrued payroll and related costs		94,814			115,914
Taxes payable		70,030			85,641
Interest payable		7,434			9,951
Other current liabilities		51,808			72,537
Total current liabilities		555,156			492,772
LONG-TERM DEBT		701,519			774,182
DEFERRED INCOME TAXES		296,250			240,621
OTHER LIABILITIES		100,637			65,705
		1,653,562			1,573,280
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST		(5,101	)		(5,596	)
SHAREHOLDERS’ EQUITY
Ordinary shares-par value $0.10 per share; 400,000 shares authorized; 263,807 and 268,223 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively		26,381			26,822
Capital in excess of par value		439,679			683,697
Retained earnings		4,511,660			3,602,870
Accumulated other comprehensive loss		(15,024	)		(5,067	)
		4,962,696			4,308,322
	$	6,611,157		$	5,876,006

See accompanying notes to the consolidated financial statements.

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
OPERATING REVENUES
Contract drilling services	$	835,198		$	718,756		$	2,416,312		$	1,953,175
Reimbursables		18,087			31,478			71,509			91,229
Labor contract drilling services		8,197			40,622			47,346			116,342
Engineering, consulting and other		499			420			1,180			2,953
		861,981			791,276			2,536,347			2,163,699
OPERATING COSTS AND EXPENSES
Contract drilling services		253,729			227,276			746,117			636,168
Reimbursables		16,494			27,675			63,786			79,829
Labor contract drilling services		5,410			32,324			37,294			93,181
Engineering, consulting and other		—			6,073			—			17,369
Depreciation and amortization		92,671			77,992			263,406			210,380
Selling, general and administrative		16,027			24,617			56,967			59,145
Hurricane losses and recoveries, net		10,000			1,600			10,000			1,600
Gain on disposal of assets, net		—			—			(35,521	)		—
		394,331			397,557			1,142,049			1,097,672
OPERATING INCOME		467,650			393,719			1,394,298			1,066,027
OTHER INCOME (EXPENSE)
Interest expense, net of amount capitalized		(601	)		(9,146	)		(2,432	)		(11,881	)
Interest income and other, net		2,304			6,954			7,013			8,624
INCOME BEFORE INCOME TAXES		469,353			391,527			1,398,879			1,062,770
INCOME TAX PROVISION		(86,831	)		(73,247	)		(256,451	)		(204,139	)
NET INCOME	$	382,522		$	318,280		$	1,142,428		$	858,631
NET INCOME PER SHARE:
Basic	$	1.44		$	1.19		$	4.30		$	3.22
Diluted	$	1.43		$	1.18		$	4.26		$	3.19
DIVDENDS PER SHARE	$	0.04		$	0.04		$	0.87		$	0.12
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic		264,746			266,684			265,883			266,575
Diluted		267,041			269,476			268,266			269,270

See accompanying notes to the consolidated financial statements.

2

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

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

See accompanying notes to the consolidated financial statements.

3

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
(Unaudited)

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

See accompanying notes to the consolidated financial statements.

4

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

	Three Months Ended September 30,
	2008			2007
NET INCOME	$	382,522		$	318,280
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation adjustments		(4,259	)		2,225
Foreign currency forward contract activity		(663	)		1,414
Amortization of deferred pension plan amounts		169			504
Other comprehensive income (loss)		(4,753	)		4,143
COMPREHENSIVE INCOME	$	377,769		$	322,423

	Nine Months Ended September 30,
	2008			2007
NET INCOME	$	1,142,428		$	858,631
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation adjustments		(8,323	)		4,777
Foreign currency forward contract activity		(2,219	)		363
Pension plan actuarial loss		—			(5,580	)
Amortization of deferred pension plan amounts		585			1,288
Other comprehensive income (loss)		(9,957	)		848
COMPREHENSIVE INCOME	$	1,132,471		$	859,479

See accompanying notes to the consolidated financial statements.

5

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

The accompanying unaudited consolidated financial statements of Noble Corporation (“Noble” or, together with its consolidated subsidiaries, unless the context requires otherwise, the “Company”, “we”, “our” and words of similar import) have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) as they pertain to Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The unaudited financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods, on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a normal recurring nature. The Consolidated Balance Sheet at December 31, 2007 presented herein is derived from the December 31, 2007 audited consolidated financial statements. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2007. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

On July 27, 2007, Noble’s Board of Directors approved what is commonly referred to in the United States as a “two-for-one stock split” of Noble’s ordinary shares effected in the form of a 100 percent stock dividend to members (shareholders) of record on August 7, 2007. The stock dividend was distributed on August 28, 2007 when shareholders of record were issued one additional ordinary share for each ordinary share held. All share and per share data included in the unaudited consolidated financial statements and accompanying notes have been adjusted to reflect the stock split for all periods presented.

Certain reclassifications have been made to amounts in prior period financial statements to conform to current period presentations. We believe these reclassifications are immaterial as they do not have a material impact on our financial position, results of operations or cash flows. In our Consolidated Balance Sheet at December 31, 2007, we had previously included inventories as a separate caption. As our inventories consist of spare parts, materials and supplies held for consumption, rather than for sale to third parties, we have included this amount in other current assets. At December 31, 2007, inventories totaled approximately $4 million.

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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

The following table reconciles the basic and diluted average shares outstanding for net income per share computations (amounts in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2008		2007		2008		2007
Weighted-average shares outstanding — basic		264,746		266,684		265,883		266,575
Effect of potentially dilutive shares:
Stock options and awards		2,295		2,792		2,383		2,695
Weighted-average shares outstanding — diluted		267,041		269,476		268,266		269,270
Net income — basic and diluted	$	382,522	$	318,280	$	1,142,428	$	858,631
Net income per share:
Basic	$	1.44	$	1.19	$	4.30	$	3.22
Diluted	$	1.43	$	1.18	$	4.26	$	3.19

Only those items having a dilutive impact on our basic net income per share are included in diluted net income per share. For the three months ended September 30, 2008 and 2007, stock options and awards totaling 0.2 million and 0.7 million shares, respectively, were excluded from the diluted net income per share calculation as they were not dilutive. For the nine months ended September 30, 2008 and 2007, stock options and awards totaling 0.2 million and 0.7 million shares, respectively, were excluded from the diluted net income per share calculation as they were not dilutive.

NOTE 3 — PROPERTY AND EQUIPMENT

Interest is capitalized on construction-in-progress at the weighted average cost of debt outstanding during the period of construction. Capitalized interest was $11 million and $35 million for the three and nine months ended September 30, 2008, respectively, and $13 million and $38 million for the three and nine months ended September 30, 2007, respectively.

Certain of our rigs operating in the U.S. Gulf of Mexico sustained damage in 2005 as a result of Hurricanes Katrina and Rita. All damaged rigs returned to work by April 2006. Our insurance receivables at December 31, 2007 relating to claims for hurricane damage were $39 million, which we received during the first quarter of 2008 as final settlement of all remaining hurricane-related claims and receivables for physical damage and loss of hire for Hurricanes Katrina and Rita.

Certain of our rigs operating in the U.S. Gulf of Mexico sustained damage during the third quarter of 2008 as a result of Hurricanes Ike and Gustav. All damaged rigs have subsequently returned to work. During the third quarter of 2008, we recorded a $10 million charge for the non-reimbursable portion of rig damages for our rigs that sustained damage as a result of Hurricane Ike.

NOTE 4 — ASSET DISPOSALS

During the second quarter of 2008, we sold our North Sea labor contract drilling services business to Seawell Holding UK Limited (“Seawell”) for $35 million plus working capital. This sale included labor contracts covering 11 platform operations in the United Kingdom sector of the North Sea. In connection with this transaction, we recognized a gain of $35 million, net of closing costs, which included approximately $5 million in cumulative currency translation adjustments.

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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

Long-term debt consists of the following at September 30, 2008 and December 31, 2007:

	September 30,			December 31,
	2008			2007
Credit Facility	$	50,000		$	100,000
6.95% Senior Notes due 2009		149,996			149,987
7.50% Senior Notes due 2019		201,695			201,695
5.875% Senior Notes due 2013		299,828			299,800
Project Financing — Thompson Notes		25,352			33,034
Total Debt		726,871			784,516
Current Maturities		(25,352	)		(10,334	)
Long-term Debt	$	701,519		$	774,182

We have a $600 million unsecured credit facility (the “Credit Facility”), which was originally scheduled to mature on March 15, 2012. During the first quarter of 2008, the term of the Credit Facility was extended for an additional one-year period to March 15, 2013. During this one-year extension period, the total amount available under the Credit Facility will be $575 million, but we have the right to seek an increase of the total amount available to $600 million. We may, subject to certain conditions, request that the term of the Credit Facility be further extended for an additional one-year period. Our subsidiary, Noble Drilling Corporation (“Noble Drilling”), has guaranteed the obligations under the Credit Facility. Pursuant to the terms of the Credit Facility, we may, subject to certain conditions, elect to increase the amount available to an amount not to exceed $800 million.

The Credit Facility provides us with the ability to issue up to $150 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding, it does reduce the amount available. At September 30, 2008, we had $50 million in borrowings and no letters of credit outstanding, leaving $550 million available under the Credit Facility.

At September 30, 2008 and December 31, 2007, the weighted average interest rate for outstanding borrowings under the Credit Facility was 3.4 percent and 5.2 percent, respectively.

NOTE 6 — INCOME TAXES

At December 31, 2007, the reserves for uncertain tax positions totaled $61 million (net of related tax benefits of $7 million). At September 30, 2008, the reserves for uncertain tax positions increased to $89 million (net of related tax benefits of $4 million). The increase in uncertain tax positions at September 30, 2008 was primarily due to tax positions taken on returns filed in one of our foreign jurisdictions. If these reserves of $89 million are not realized, the provision for income taxes would be reduced by $63 million and equity would be directly increased by $26 million.

We do not anticipate that any tax contingencies resolved in the next 12 months will have a material impact on our financial position or results of operations.

8

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

Pension costs include the following components:

	Three Months Ended September 30,
	2008						2007
	International			Domestic			International			Domestic
Service cost	$	1,030		$	1,574		$	910		$	1,665
Interest cost		1,057			1,615			959			1,495
Return on plan assets		(1,463	)		(2,228	)		(1,348	)		(1,650	)
Amortization of prior service cost		—			97			—			99
Amortization of transition obligation		35			—			18			—
Recognized net actuarial loss		16			88			251			380
Net pension expense	$	675		$	1,146		$	790		$	1,989

	Nine Months Ended September 30,
	2008						2007
	International			Domestic			International			Domestic
Service cost	$	3,871		$	4,721		$	3,845		$	4,995
Interest cost		3,557			4,844			3,131			4,485
Return on plan assets		(4,841	)		(6,682	)		(3,610	)		(4,950	)
Amortization of prior service cost		—			293			—			297
Amortization of transition obligation		121			—			139			—
Recognized net actuarial loss		96			262			359			1,140
Net pension expense	$	2,804		$	3,438		$	3,864		$	5,967

In August 2006, U.S. President Bush signed into law the Pension Protection Act of 2006 (“PPA”). The PPA requires that pension plans become fully funded over a seven-year period beginning in 2008 and increases the amount we are allowed to contribute to our domestic pension plans in the near term.

During the nine months ended September 30, 2008, we contributed $17 million to our pension plans, and expect to contribute an additional $4 million during the remainder of 2008. The aggregate $21 million in contributions represents the total contributions expected to be made in 2008, subject to applicable law.

We sponsor the Noble Drilling Corporation 401(k) Savings Restoration Plan (“Restoration Plan”). The Restoration Plan has no assets, and amounts “contributed” to the Restoration Plan are kept by us for general corporate purposes. The investments selected by employees and the associated returns are tracked on a phantom basis. Accordingly, we have a liability to employees for amounts originally contributed plus phantom investment income or less phantom investment losses. We are at risk for phantom investment income and, conversely, benefit should phantom investment losses occur. At September 30, 2008, our liability under the Restoration Plan totaled $10 million. During the third quarter of 2008, we purchased investments that closely correlate to the investment elections made by participants in the Restoration Plan in order to mitigate the impact of the phantom investment income and losses on our financial statements. The value of these investments held for our benefit totaled $10 million at September 30, 2008.

NOTE 8 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We periodically enter into derivative instruments to manage our exposure to fluctuations in interest rates and foreign currency exchange rates, and we may conduct hedging activities in future periods to mitigate such exposure. We have documented policies and procedures to monitor and control the use of derivative instruments. We do not engage in derivative transactions for speculative or trading purposes, nor are we a party to leveraged derivatives.

9

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

Hedge effectiveness is measured quarterly based on the relative cumulative changes in fair value between derivative contracts and the hedged item over time. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings. We did not recognize a gain or loss due to hedge ineffectiveness in our Consolidated Statements of Income during the three or nine months ended September 30, 2008 and 2007 related to these derivative instruments.

Cash Flow Hedges

Our North Sea operations have a significant amount of their cash operating expenses payable in either the Euro or British Pound, and we typically maintain forward contracts settling monthly in Euros and British Pounds. During the third quarter of 2008, we settled all outstanding forward contracts related to our North Sea operations.

The balance of the net unrealized gain related to our forward contracts included in Accumulated other comprehensive loss and related activity is as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Net unrealized gain at beginning of period	$	663		$	2,166		$	2,219		$	3,217
Activity during period:
Settlement of forward contracts outstanding at beginning of period		(663	)		(939	)		(2,219	)		(2,450	)
Net unrealized gain on outstanding forward contracts		—			2,353			—			2,813
Net unrealized gain at end of period	$	—		$	3,580		$	—		$	3,580

Fair Value Hedges

During the third quarter of 2008, we entered into a firm commitment for the construction of a newbuild drillship. The drillship will be constructed in two phases, with the second phase being installation and commissioning of the topside equipment. The contract for this second phase of construction is denominated in Euros, and in order to mitigate the risk of fluctuations in foreign currency exchange rates, we entered into forward contracts to purchase Euros. As of September 30, 2008, the aggregate notional amount of the forward contracts was 80 million Euros. Each forward contract settles in connection with required payments per the contract. We are accounting for these forward contracts as fair value hedges under Statement of Financial Accounting Standards (“SFAS”) No. 133,Accounting for Derivative Instruments and Hedging Activities, as amended (“SFAS No. 133”). The fair market value of those derivative instruments is included in Other current assets/liabilities or Other assets/liabilities, depending on when the forward contract is expected to be settled. Gains and losses from these fair value hedges are recognized in earnings currently along with the change in fair value of the hedged item attributable to the risk being hedged. The fair market value of these outstanding forward contracts, which are included in Other current liabilities and Other liabilities, totaled approximately $3.8 million at September 30, 2008.

NOTE 9 — FAIR VALUE OF FINANCIAL INSTRUMENTS

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157,Fair Value Measurements(“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements. Instead, its application will be made pursuant to other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. On February 6, 2008, the FASB issued FASB Staff Position FAS 157-2,Partial Deferral of the Effective Date of Statement 157, which deferred the effective date for one year for certain nonfinancial assets and liabilities, except those recognized or disclosed at fair value on a recurring basis. These nonfinancial items include reporting units measured at fair value in a goodwill impairment test and nonfinancial assets and liabilities assumed in a business combination.

10

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

We adopted SFAS No. 157 effective January 1, 2008 for financial assets and liabilities measured on a recurring basis. There was no impact for the partial adoption of SFAS No. 157 on our consolidated financial statements. We do not expect the application of SFAS No. 157 to our nonfinancial assets and liabilities to have any material effect on our consolidated financial statements.

The following table presents the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis:

	September 30, 2008
			Estimated Fair Value
			Measurements
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable		December 31, 2007
	Carrying		Markets		Inputs		Inputs		Carrying		Estimated
	Amount		(Level 1)		(Level 2)		(Level 3)		Amount		Fair Value
Assets—
Marketable securities	$	12,592	$	12,592	$	—	$	—	$	—	$	—
Liabilities—
Forward contracts	$	3,802	$	—	$	3,802	$	—	$	2,219	$	2,219

The derivative instruments have been valued using actively quoted prices and quotes obtained from the counterparties to the derivative instruments. Our cash and cash equivalents, accounts receivable and accounts payable are by their nature short-term. As a result, the carrying values included in the accompanying Consolidated Balance Sheets approximate fair value.

In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Liabilities(“SFAS No. 159”). SFAS No. 159 permits entities to measure eligible assets and liabilities at fair value. We adopted SFAS No. 159 effective January 1, 2008, and we did not elect the fair value option for our financial instruments. Accordingly, there was no impact to our consolidated financial statements as a result of this adoption.

NOTE 10 — COMMITMENTS AND CONTINGENCIES

Noble Asset Company Limited (“NACL”), a wholly-owned, indirect subsidiary of Noble, was named one of 21 parties served a Show Cause Notice (“SCN”) issued by the Commissioner of Customs (Prev.), Mumbai, India (the “Commissioner”) in August 2003. The SCN concerned alleged violations of Indian customs laws and regulations regarding one of our jackups. The Commissioner alleged certain violations to have occurred before, at the time of, and after NACL acquired the rig from the rig’s previous owner. In the purchase agreement for the rig, NACL received contractual indemnification against liability for Indian customs duty from the rig’s previous owner. In connection with the export of the rig from India in 2001, NACL posted a bank guarantee in the amount of 150 million Indian Rupees (or $3 million at September 30, 2008) and a customs bond in the amount of 970 million Indian Rupees (or $21 million at September 30, 2008), both of which remain in place. In March 2005, the Commissioner passed an order against NACL and the other parties cited in the SCN seeking (i) to invoke the bank guarantee posted on behalf of NACL as a fine, (ii) to demand duty of (a) $19 million plus interest related to a 1997 alleged import and (b) $22 million plus interest related to a 1999 alleged import, provided that the duty and interest demanded in (b) would not be payable if the duty and interest demanded in (a) were paid by NACL, and (iii) to assess a penalty of $500,000 against NACL. NACL appealed the order of the Commissioner to the Customs, Excise & Service Tax Appellate Tribunal (“CESTAT”). At a hearing on April 5, 2006, CESTAT upheld NACL’s appeal and overturned the Commissioner’s March 2005 order against NACL in its entirety. CESTAT thereafter issued its written judgment dated August 8, 2006 upholding NACL’s appeal on all grounds and setting aside the duty demand, interest, fine and penalty. The Commissioner filed an appeal in the Bombay High Court challenging the order passed by CESTAT. In August 2008, the Division Bench of the Bombay High Court dismissed the Commissioner’s appeal of CESTAT’s order. NACL is seeking the return or cancellation of its previously posted custom bond and bank guarantees, but no hearing has been scheduled. NACL continues to pursue contractual indemnification against liability for Indian customs duty and related costs and expenses against the rig’s previous owner in arbitration proceedings in London, which proceedings the parties have temporarily stayed pending further developments in the Indian proceeding. We do not believe the ultimate resolution of this matter will have a material adverse effect on our financial position, results of operations or cash flows.

11

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

We operate in a number of countries throughout the world and our income tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions. We are currently contesting several tax assessments and may contest future assessments when we believe the assessments are in error. We cannot predict or provide assurance as to the ultimate outcome of the existing or future assessments. We believe the ultimate resolution of the outstanding assessments, for which we have not made any accrual, will not have a material adverse effect on our consolidated financial statements. We recognize uncertain tax positions that we believe have a greater than 50 percent likelihood of being sustained. See Note 6 for additional information.

Certain of our international income tax returns have been examined for the 2002 through 2004 periods and audit claims have been assessed for approximately $96 million (including interest and penalties). We believe audit claims of an additional $17 million to $19 million attributable to other business tax returns may be assessed against us. We have contested, or intend to contest, most of the audit findings, including through litigation if necessary, and we do not believe that there is greater than 50 percent likelihood that additional taxes will be incurred. Accordingly, no accrual has been made for such amounts.

We are from time to time a party to various lawsuits that are incidental to our operations in which the claimants seek an unspecified amount of monetary damages for personal injury, including claims purportedly resulting from exposure to asbestos on drilling rigs and associated facilities. At October 31, 2008, there were approximately 39 of these lawsuits in which we are one of many defendants. These lawsuits have been filed in the states of Louisiana, Mississippi and Texas. Exposure related to these lawsuits is not currently determinable. We intend to defend vigorously against the litigation.

We are a defendant in certain claims and litigation arising out of operations in the ordinary course of business, the resolution of which, in the opinion of management, will not be material to our financial position, results of operations or cash flows.

During the fourth quarter of 2007, our Nigerian subsidiary received letters from the Nigerian Maritime Administration and Safety Agency (“NIMASA”) seeking to collect a two percent surcharge on contract amounts under contracts performed by “vessels”, within the meaning of Nigeria’s cabotage laws, engaged in the Nigerian coastal shipping trade. Although we do not believe that these letters apply to our ownership of drilling units, NIMASA is seeking to apply a provision of the Nigerian cabotage laws (which became effective on May 1, 2004) to our offshore drilling units by considering these units to be “vessels” within the meaning of those laws and therefore subject to the surcharge, which is imposed only upon “vessels”. Our offshore drilling units are not engaged in the Nigerian coastal shipping trade and are not in our view “vessels” within the meaning of Nigeria’s cabotage laws. On January 24, 2008, we filed an originating summons against NIMASA and the Minister of Transportation in the Federal High Court of Lagos, Nigeria seeking, among other things, a declaration that our drilling operations do not constitute “coastal trade” or “cabotage” within the meaning of Nigeria’s cabotage laws and that our offshore drilling units are not “vessels” within the meaning of those laws. NIMASA and the Minister of Transportation filed a preliminary objection to our originating summons and the proceeding. On October 21, 2008, the High Court dismissed the objection as being without merit and scheduled for argument our originating summons on December 17, 2008. We intend to take all further appropriate legal action to resist the application of Nigeria’s cabotage laws to our drilling units. The outcome of any such legal action and the extent to which we may ultimately be responsible for the surcharge is uncertain. If it is ultimately determined that offshore drilling units constitute vessels within the meaning of the Nigerian cabotage laws, we may be required to pay the surcharge and comply with other aspects of the Nigerian cabotage laws, which could adversely affect our operations in Nigerian waters and require us to incur additional costs of compliance.

12

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

We maintain certain insurance coverage against specified marine liabilities, including liability for physical damage to our drilling rigs, and loss of hire on certain of our rigs. Our March 2008 insurance program renewal included an annual aggregate coverage limit of $200 million applicable to our drilling units operating in the U.S. Gulf of Mexico for physical damage and loss of hire on certain units resulting from named windstorm perils. This aggregate coverage limit may not fully insure our losses in the event that one or more named windstorms damage our drilling units in the U.S. Gulf of Mexico. The reduced coverage does not apply to our units in the Mexican portion of the Gulf of Mexico. We presently have five semisubmersibles and three submersibles in the U.S. Gulf of Mexico. We maintain a $10 million deductible on our marine hull and machinery coverage, and loss of hire coverage is subject to a 60-day waiting period deductible for named U.S. Gulf of Mexico windstorms and a 45-day waiting period for all other perils.

On September 12, 2008, Hurricane Ike passed through the oil and gas fields of the U.S. Gulf of Mexico causing damage to certain of our rigs. The $200 million aggregate insurance limit available to our rigs operating in the U.S. Gulf of Mexico was sufficient to cover the loss, with the exception of the physical damage deductible and the loss of hire waiting period.

We carry protection and indemnity insurance covering marine third party liability exposures, which also includes coverage for employer’s liability resulting from personal injury to our offshore drilling crews. Our protection and indemnity policy has a standard deductible of $1 million per occurrence, and we retain $5 million of claims in the aggregate beyond the standard deductible.

In connection with our 2008 and future capital expenditure programs, we had entered into certain commitments, including shipyard and purchase commitments, of approximately $1.1 billion at September 30, 2008.

Internal Investigation

In June 2007, we announced that we were conducting an internal investigation of our Nigerian operations, focusing on the legality under the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), and local laws of our Nigerian affiliate’s reimbursement of certain expenses incurred by our customs agents in connection with obtaining and renewing permits for the temporary importation of drilling units and related equipment into Nigerian waters, including permits that are necessary for our drilling units to operate in Nigerian waters. We also announced that the audit committee of Noble’s Board of Directors had engaged a leading law firm with significant experience in investigating and advising on FCPA matters to lead the investigation as independent outside counsel. The scope of the investigation also includes our dealings with customs agents and customs authorities in certain parts of the world other than Nigeria in which we conduct our operations, as well as dealings with other types of local agents in Nigeria and such other parts of the world. There can be no assurance that evidence of additional potential FCPA violations may not be uncovered through the investigation.

The audit committee commissioned the internal investigation after our management brought to the attention of the audit committee a news release issued by another company. The news release disclosed the other company was conducting an internal investigation into the FCPA implications of certain actions by a customs agent in Nigeria in connection with the temporary importation of that company’s vessels into Nigeria. Our drilling units that conduct operations in Nigeria do so under temporary import permits, and management considered it prudent to review our own practices in this regard.

We voluntarily contacted the SEC and the U.S. Department of Justice (“DOJ”) to advise them that an independent investigation was underway. We have been cooperating, and intend to continue to cooperate, fully with both agencies. If the SEC or the DOJ determines that violations of the FCPA have occurred, they could seek civil and criminal sanctions, including monetary penalties, against us and/or certain of our employees, as well as additional changes to our business practices and compliance programs, any of which could have a material adverse effect on our business and financial condition. In addition, such actions, whether actual or alleged, could damage our reputation and ability to do business, to attract and retain employees, and to access capital markets. Further, detecting, investigating, and resolving such actions is expensive and consumes significant time and attention of our senior management.

13

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

The independent outside counsel appointed by the audit committee to perform the internal investigation recently made a presentation of the results of its investigation to the DOJ and the SEC. The SEC and the DOJ have begun to review these results and information gathered by the independent outside counsel in the course of the investigation. Neither the SEC nor the DOJ has indicated what action it may take, if any, against us or any individual, or whether it may request that the audit committee’s independent outside counsel conduct further investigation. Therefore, we consider the internal investigation to be ongoing and cannot predict when it will conclude. Furthermore, we cannot predict whether either the SEC or the DOJ will open its own proceeding to investigate this matter, or if a proceeding is opened, what potential remedies these agencies may seek. We could also face fines or sanctions in relevant foreign jurisdictions. Based on information obtained to date in our internal investigation, we have not determined that any potential liability that may result is probable or remote or can be reasonably estimated. As a result, we have not made any accrual in our consolidated financial statements at September 30, 2008.

We are currently operating four jackup rigs offshore Nigeria under extensions of temporary import permits that allow the rigs to remain in Nigeria through November 28, 2008. We continue to seek to avoid material disruption to our Nigerian operations; however, there can be no assurance that we will be able to obtain new permits or further extensions of permits necessary to continue the operation of our rigs in Nigeria after expiration of the current terms of the temporary import permits. If we cannot obtain a new permit or an extension necessary to continue operations of any rig, we may need to cease operations under the drilling contract for such rig and relocate such rig from Nigerian waters. We cannot predict what impact this may have on any such contract or our business in Nigeria. Furthermore, we cannot predict what changes, if any, relating to temporary import permit policies and procedures may be established or implemented in Nigeria in the future, or how any such changes may impact our business there.

Notwithstanding that the internal investigation is ongoing, we have concluded that certain changes to our FCPA compliance program would provide us greater assurance that our assets are not used, directly or indirectly, to make improper payments, including customs payments, and that we are in compliance with the FCPA’s record-keeping requirements. Although we have had a long-standing published policy requiring compliance with the FCPA and broadly prohibiting any improper payments by us to foreign or domestic officials, we have adopted additional measures intended to enhance FCPA compliance procedures. Further measures may be required once the investigation concludes.

For the three and nine months ended September 30, 2008, we incurred legal fees and related costs of $2 million and $14 million, respectively, related to the internal investigation. It is anticipated that additional costs will be incurred in future periods, but the amount of these costs cannot be presently determined.

14

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

Beginning in the fourth quarter of 2007, we report our international and domestic contract drilling operations as a single reportable segment: Contract Drilling Services. The consolidation into one reportable segment reflects how we manage our business, and the fact that all of our drilling fleet is dependent upon the worldwide oil industry. The mobile offshore drilling units comprising our offshore rig fleet operate in a single, global market for contract drilling services and are often redeployed globally due to changing demands of our customers, which consist largely of major international and government owned/controlled oil and gas companies throughout the world. Our contract drilling services segment conducts contract drilling operations in the Middle East, India, the U.S. Gulf of Mexico, Mexico, the North Sea, Brazil and West Africa.

We evaluate the performance of our operating segment primarily based on operating revenues and net income. Summarized financial information of our reportable segment for the three and nine months ended September 30, 2008 and 2007 is shown in the following table. The “Other” column includes results of labor contract drilling services, engineering and consulting services, other insignificant operations and corporate related items. All prior period amounts have been reclassified to conform to the current presentation.

	Three Months Ended September 30,
	2008							2007
	Contract							Contract
	Drilling							Drilling
	Services		Other			Total		Services		Other			Total
Revenues from external customers	$	852,519	$	9,462		$	861,981	$	743,391	$	47,885		$	791,276
Depreciation and amortization		90,923		1,748			92,671		75,627		2,365			77,992
Segment operating income (loss)		466,377		1,273			467,650		393,949		(230	)		393,719
Interest expense, net of amount capitalized		581		20			601		1,056		8,090			9,146
Income tax provision (benefit)		75,179		11,652			86,831		73,463		(216	)		73,247
Segment profit (loss)		392,224		(9,702	)		382,522		318,595		(315	)		318,280
Total assets (at end of period)		6,197,987		413,170			6,611,157		5,122,966		385,947			5,508,913
Capital expenditures		347,207		8,010			355,217		338,502		24,777			363,279

	Nine Months Ended September 30,
	2008						2007
	Contract						Contract
	Drilling						Drilling
	Services		Other		Total		Services		Other			Total
Revenues from external customers	$	2,475,096	$	61,251	$	2,536,347	$	2,018,041	$	145,658		$	2,163,699
Depreciation and amortization		258,344		5,062		263,406		203,544		6,836			210,380
Segment operating income		1,354,405		39,893		1,394,298		1,064,587		1,440			1,066,027
Interest expense, net of amount capitalized		2,184		248		2,432		3,398		8,483			11,881
Income tax provision (benefit)		247,619		8,832		256,451		210,893		(6,754	)		204,139
Segment profit		1,109,827		32,601		1,142,428		849,888		8,743			858,631
Total assets (at end of period)		6,197,987		413,170		6,611,157		5,122,966		385,947			5,508,913
Capital expenditures		849,226		30,884		880,110		840,168		102,271			942,439

15

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

In December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statements — An Amendment of ARB No. 51(“SFAS No. 160”). SFAS No. 160 establishes new accounting and reporting standards for a noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements. The amount of net income attributable to a noncontrolling interest will be included in consolidated net income on the face of the income statement. SFAS No. 160 requires that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss when a subsidiary is deconsolidated. Such gain or loss will be measured using the fair value of the noncontrolling equity investment on the deconsolidation date. SFAS No. 160 also includes expanded disclosures regarding the interests of the parent and its noncontrolling interest. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. We do not expect the adoption of SFAS No. 160 to have a material impact on our financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141(R),Business Combinations(“SFAS No. 141(R)”). SFAS No. 141(R) will significantly change the accounting for business combinations. Under SFAS No. 141(R), the acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS No. 141(R) will change the accounting treatment for certain specific items, including:

• 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.

SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, and earlier adoption is prohibited. This standard will change our accounting treatment for business combinations on a prospective basis.

In March 2008, the FASB issued SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities(“SFAS No. 161”). SFAS No. 161 requires entities with derivative instruments to disclose information to enable financial statement users to understand how and why the entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items affect the entity’s financial position, financial performance and cash flows. SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. We are currently evaluating the impact, if any, that SFAS No. 161 will have on our consolidated financial statements.

In June 2008, the FASB issued FSP EITF 03-6-1,Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities(“FSP EITF 03-6-1”). FSP EITF 03-6-1 states that unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and should be included in the computation of earnings per share pursuant to the two-class method. FSP EITF 03-6-1 is effective for fiscal years and interim periods beginning after December 15, 2008. We are currently evaluating the impact, if any, that FSP EITF 03-6-1 will have on our consolidated financial statements.

16

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

In May 2008, the FASB issued SFAS No. 162,The Hierarchy of Generally Accepted Accounting Principles(“SFAS No. 162”). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. The new standard becomes effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411. We do not expect SFAS No. 162 to have a material impact on our financial position or results of operations.

In October 2008, the FASB issued FSP FAS 157-3,Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active(“FSP FAS 157-3”). FSP FAS 157-3 clarifies the application of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP FAS 157-3 was effective upon issuance. The application of FSP FAS 157-3 did not have a material affect on our consolidated financial statements.

NOTE 13 — SUBSEQUENT EVENT

On October 31, 2008, Noble’s Board of Directors declared a quarterly cash dividend of $0.04 per ordinary share payable to shareholders of record on November 12, 2008, with a distribution date of December 1, 2008.

NOTE 14 — GUARANTEES OF REGISTERED SECURITIES

This Note has been updated to present condensed consolidating financial information that includes Noble Holding International Limited (“NHIL”), an indirect wholly-owned subsidiary of Noble. NHIL will be a registrant in a Registration Statement that Noble intends to file on November 18, 2008. Any debt securities that NHIL may issue will be fully and unconditionally guaranteed by Noble.

Noble and Noble Holding (U.S.) Corporation (“NHC”), a wholly-owned subsidiary of Noble, are guarantors for certain debt securities issued by Noble Drilling. These debt securities consist of Noble Drilling’s 6.95% Senior Notes due 2009 and its 7.50% Senior Notes due 2019 (the “ND Notes”), which had outstanding principal balances at September 30, 2008 of $150 million and $202 million, respectively. Noble Drilling is an indirect, wholly-owned subsidiary of Noble and a direct, wholly-owned subsidiary of NHC. Noble’s and NHC’s guarantees of the ND Notes are full and unconditional. In December 2005, Noble Drilling Holding LLC (“NDH”), an indirect wholly-owned subsidiary of Noble, became a co-obligor on (and effectively a guarantor of) the ND Notes.

In connection with the 2006 issuance of Noble’s 5.875% Senior Notes due 2013 (the “Noble Notes”), Noble Drilling guaranteed the payment of the Noble Notes. Noble Drilling’s guarantee of the Noble Notes is full and unconditional. The outstanding principal balance of the Noble Notes at September 30, 2008 was $300 million.

17

NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
September 30, 2008
(In thousands)

The following consolidating financial statements of Noble, NHC and NDH combined, Noble Drilling, NHIL and all other subsidiaries present investments in both consolidated and unconsolidated affiliates using the equity method of accounting. Certain reclassifications have been made to amounts in prior period financial statements to conform to current period presentations.

												Other
				NHC and NDH			Noble					Subsidiaries			Consolidating
	Noble			Combined			Drilling			NHIL		of Noble			Adjustments			Total
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	63,253		$	332		$	27		$	—	$	150,041		$	—		$	213,653
Accounts receivable		—			19,123			7,414			—		635,641			—			662,178
Prepaid expenses		—			959			105			—		39,046			—			40,110
Accounts receivable from affiliates		115,943			—			575,229			—		961,274			(1,652,446	)		—
Other current assets		5,541			52			20			—		105,172			(62,271	)		48,514
Total current assets		184,737			20,466			582,795			—		1,891,174			(1,714,717	)		964,455
PROPERTY AND EQUIPMENT
Drilling equipment and facilities		—			1,812,371			113,592			—		5,189,550			—			7,115,513
Other		—			225			—			—		100,736			—			100,961
		—			1,812,596			113,592			—		5,290,286			—			7,216,474
Accumulated depreciation		—			(105,749	)		(68,948	)		—		(1,646,714	)		—			(1,821,411	)
		—			1,706,847			44,644			—		3,643,572			—			5,395,063
NOTES RECEIVABLE FROM AFFILIATES		511,835			20,963			44,159			—		1,741,721			(2,318,678	)		—
INVESTMENTS IN AFFILIATES		5,061,494			6,403,915			3,370,046			2,455,159		—			(17,290,614	)		—
OTHER ASSETS		3,135			5,644			6,547			—		236,313			—			251,639
	$	5,761,201		$	8,157,835		$	4,048,191		$	2,455,159	$	7,512,780		$	(21,324,009	)	$	6,611,157
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	—		$	27,756		$	—		$	—	$	25,352		$	(27,756	)	$	25,352
Accounts payable		—			4,972			11,211			—		289,535			—			305,718
Accrued payroll and related costs		17,021			205			9,735			—		67,853			—			94,814
Taxes payable		—			8,846			—			—		61,184			—			70,030
Interest payable		10,677			16,270			14,551			—		451			(34,515	)		7,434
Accounts payable to affiliates		—			1,652,402			—			44		—			(1,652,446	)		—
Other current liabilities		—			4			1			—		51,803			—			51,808
Total current liabilities		27,698			1,710,455			35,498			44		496,178			(1,714,717	)		555,156
LONG-TERM DEBT		349,828			—			351,691			—		—			—			701,519
NOTES PAYABLE TO AFFILIATES		414,300			1,207,421			120,000			—		576,957			(2,318,678	)		—
DEFERRED INCOME TAXES		—			8,977			13,045			—		274,228			—			296,250
OTHER LIABILITIES		6,679			30,234			3,858			—		59,866			—			100,637
		798,505			2,957,087			524,092			44		1,407,229			(4,033,395	)		1,653,562
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST		—			—			—			—		(5,101	)		—			(5,101	)
SHAREHOLDERS’ EQUITY
Ordinary shares-par value $0.10 per share		26,381			—			—			—		—			—			26,381
Capital in excess of par value		439,679			1,279,983			870,744			406,998		1,270,278			(3,828,003	)		439,679
Retained earnings		4,511,660			3,920,765			2,652,730			2,048,117		4,855,398			(13,477,010	)		4,511,660
Accumulated other comprehensive income (loss)		(15,024	)		—			625			—		(15,024	)		14,399			(15,024	)
		4,962,696			5,200,748			3,524,099			2,455,115		6,110,652			(17,290,614	)		4,962,696
	$	5,761,201		$	8,157,835		$	4,048,191		$	2,455,159	$	7,512,780		$	(21,324,009	)	$	6,611,157

18

NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
December 31, 2007
(In thousands)

												Other
				NHC and NDH			Noble					Subsidiaries			Consolidating
	Noble			Combined			Drilling			NHIL		of Noble			Adjustments			Total
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	12,544		$	—		$	73		$	—	$	148,441		$	—		$	161,058
Accounts receivable		—			22,900			9,699			—		580,516			—			613,115
Insurance receivables		—			—			—			—		39,066			—			39,066
Prepaid expenses		—			858			82			—		19,781			—			20,721
Accounts receivable from affiliates		419,197			—			576,239			—		176,376			(1,171,812	)		—
Other current assets		3,474			160			135			—		65,154			(42,692	)		26,231
Total current assets		435,215			23,918			586,228			—		1,029,334			(1,214,504	)		860,191
PROPERTY AND EQUIPMENT
Drilling equipment and facilities		—			1,665,102			111,089			—		4,578,591			—			6,354,782
Other		—			170			—			—		79,999			—			80,169
		—			1,665,272			111,089			���		4,658,590			—			6,434,951
Accumulated depreciation		—			(82,964	)		(64,947	)		—		(1,491,124	)		—			(1,639,035	)
		—			1,582,308			46,142			—		3,167,466			—			4,795,916
NOTES 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			1,722,781		—			(13,520,663	)		—
OTHER ASSETS		3,666			6,847			3,953			—		205,433			—			219,899
	$	4,832,057		$	6,540,328		$	3,690,731		$	1,722,781	$	5,865,019		$	(16,774,910	)	$	5,876,006
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	—		$	25,886		$	—		$	—	$	10,334		$	(25,886	)	$	10,334
Accounts payable		—			5,540			4,778			—		188,077			—			198,395
Accrued payroll and related costs		—			421			13,131			—		102,362			—			115,914
Taxes payable		—			2,114			—			—		83,527			—			85,641
Interest payable		4,122			6,847			15,200			—		588			(16,806	)		9,951
Accounts payable to affiliates		—			1,171,782			—			30		—			(1,171,812	)		—
Other current liabilities		—			3			487			—		72,047			—			72,537
Total current liabilities		4,122			1,212,593			33,596			30		456,935			(1,214,504	)		492,772
LONG-TERM DEBT		399,800			—			351,682			—		22,700			—			774,182
NOTES PAYABLE TO AFFILIATES		114,300			1,228,486			120,000			—		576,957			(2,039,743	)		—
DEFERRED INCOME TAXES		—			4,795			12,496			—		223,330			—			240,621
OTHER LIABILITIES		5,513			23,266			1,689			—		35,237			—			65,705
		523,735			2,469,140			519,463			30		1,315,159			(3,254,247	)		1,573,280
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST		—			—			—			—		(5,596	)		—			(5,596	)
SHAREHOLDERS’ EQUITY
Ordinary shares-par value $0.10 per share		26,822			—			—			—		—			—			26,822
Capital in excess of par value		683,697			1,279,983			870,744			406,998		792,675			(3,350,400	)		683,697
Retained earnings		3,602,870			2,791,205			2,301,199			1,315,753		3,767,848			(10,176,005	)		3,602,870
Accumulated other comprehensive income (loss)		(5,067	)		—			(675	)		—		(5,067	)		5,742			(5,067	)
		4,308,322			4,071,188			3,171,268			1,722,751		4,555,456			(13,520,663	)		4,308,322
	$	4,832,057		$	6,540,328		$	3,690,731		$	1,722,781	$	5,865,019		$	(16,774,910	)	$	5,876,006

19

NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2008
(In thousands)

												Other
				NHC and NDH			Noble					Subsidiaries			Consolidating
	Noble			Combined			Drilling			NHIL		of Noble			Adjustments			Total
OPERATING REVENUES
Contract drilling services	$	—		$	69,695		$	14,583			—	$	779,920		$	(29,000	)	$	835,198
Reimbursables		—			277			41			—		17,769			—			18,087
Labor contract drilling services		—			—			—			—		8,197			—			8,197
Engineering, consulting and other		—			(10	)		—			—		509			—			499
		—			69,962			14,624			—		806,395			(29,000	)		861,981
OPERATING COSTS AND EXPENSES
Contract drilling services		5,294			10,536			6,171			—		260,728			(29,000	)		253,729
Reimbursables		—			254			34			—		16,206			—			16,494
Labor contract drilling services		—			—			—			—		5,410			—			5,410
Engineering, consulting and other		—			—			—			—		—			—			—
Depreciation and amortization		—			9,185			1,930			—		81,556			—			92,671
Selling, general and administrative		2,328			1,634			460			—		11,605			—			16,027
Hurricane losses and recoveries, net		—			—			—			—		10,000			—			10,000
Gain on disposal of assets, net		—	��		—			—			—		—			—			—
		7,622			21,609			8,595			—		385,505			(29,000	)		394,331
OPERATING INCOME (LOSS)		(7,622	)		48,353			6,029			—		420,890			—			467,650
OTHER INCOME (EXPENSE)
Equity earnings in affiliates (net of tax)		393,270			343,368			71,773			257,505		—			(1,065,916	)		—
Interest expense, net of amount capitalized		(5,047	)		(10,138	)		(6,388	)		—		8,975			11,997			(601	)
Interest income and other, net		2,352			1			—			—		11,948			(11,997	)		2,304
INCOME BEFORE INCOME TAXES		382,953			381,584			71,414			257,505		441,813			(1,065,916	)		469,353
INCOME TAX (PROVISION) BENEFIT		(431	)		2,176			(2,613	)		—		(85,963	)		—			(86,831	)
NET INCOME	$	382,522		$	383,760		$	68,801		$	257,505	$	355,850		$	(1,065,916	)	$	382,522

20

NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2007
(In thousands)

													Other
				NHC and NDH			Noble						Subsidiaries			Consolidating
	Noble			Combined			Drilling			NHIL			of Noble			Adjustments			Total
OPERATING REVENUES
Contract drilling services	$	—		$	36,351		$	15,448			—		$	682,505		$	(15,548	)	$	718,756
Reimbursables		—			83			267			—			31,128			—			31,478
Labor contract drilling services		—			—			—			—			40,622			—			40,622
Engineering, consulting and other		—			—			—			—			420			—			420
		—			36,434			15,715			—			754,675			(15,548	)		791,276
OPERATING COSTS AND EXPENSES
Contract drilling services		5,320			8,546			6,113			3			222,842			(15,548	)		227,276
Reimbursables		—			62			266			—			27,347			—			27,675
Labor contract drilling services		—			—			—			—			32,324			—			32,324
Engineering, consulting and other		—			—			—			—			6,073			—			6,073
Depreciation and amortization		—			6,539			1,515			—			69,938			—			77,992
Selling, general and administrative		3,676			1,010			327			—			19,604			—			24,617
Hurricane losses and recoveries, net		—			—			—			—			1,600			—			1,600
		8,996			16,157			8,221			3			379,728			(15,548	)		397,557
OPERATING INCOME (LOSS)		(8,996	)		20,277			7,494			(3	)		374,947			—			393,719
OTHER INCOME (EXPENSE)
Equity earnings in affiliates (net of tax)		387,937			365,727			202,504			213,455			—			(1,169,623	)		—
Interest expense, net of amount capitalized		(61,970	)		(11,213	)		(6,448	)		—			11,734			58,751			(9,146	)
Interest income and other, net		920			1			—			—			64,784			(58,751	)		6,954
INCOME BEFORE INCOME TAXES		317,891			374,792			203,550			213,452			451,465			(1,169,623	)		391,527
INCOME TAX (PROVISION) BENEFIT		389			1,426			(21,862	)		—			(53,200	)		—			(73,247	)
NET INCOME	$	318,280		$	376,218		$	181,688		$	213,452		$	398,265		$	(1,169,623	)	$	318,280

21

NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2008
(In thousands)

													Other
				NHC and NDH			Noble						Subsidiaries			Consolidating
	Noble			Combined			Drilling			NHIL			of Noble			Adjustments			Total
OPERATING REVENUES
Contract drilling services	$	—		$	185,769		$	38,875			—		$	2,267,968		$	(76,300	)	$	2,416,312
Reimbursables		—			1,177			200			—			70,132			—			71,509
Labor contract drilling services		—			—			—			—			47,346			—			47,346
Engineering, consulting and other		—			(8	)		1			—			1,187			—			1,180
		—			186,938			39,076			—			2,386,633			(76,300	)		2,536,347
OPERATING COSTS AND EXPENSES
Contract drilling services		17,639			29,017			19,022			14			756,725			(76,300	)		746,117
Reimbursables		—			1,011			188			—			62,587			—			63,786
Labor contract drilling services		—			—			—			—			37,294			—			37,294
Engineering, consulting and other		—			—			—			—			—			—			—
Depreciation and amortization		—			25,314			5,342			—			232,750			—			263,406
Selling, general and administrative		7,532			4,621			1,381			—			43,433			—			56,967
Hurricane losses and recoveries, net		—			—			—			—			10,000			—			10,000
Gain on disposal of assets, net		—			—			—			—			(35,521	)		—			(35,521	)
		25,171			59,963			25,933			14			1,107,268			(76,300	)		1,142,049
OPERATING INCOME (LOSS)		(25,171	)		126,975			13,143			(14	)		1,279,365			—			1,394,298
OTHER INCOME (EXPENSE)
Equity earnings in affiliates (net of tax)		1,180,153			1,046,513			361,425			732,378			—			(3,320,469	)		—
Interest expense, net of amount capitalized		(18,430	)		(30,684	)		(19,164	)		—			27,117			38,729			(2,432	)
Interest income and other, net		6,703			1			—			—			39,038			(38,729	)		7,013
INCOME BEFORE INCOME TAXES		1,143,255			1,142,805			355,404			732,364			1,345,520			(3,320,469	)		1,398,879
INCOME TAX (PROVISION) BENEFIT		(827	)		6,205			(3,873	)		—			(257,956	)		—			(256,451	)
NET INCOME	$	1,142,428		$	1,149,010		$	351,531		$	732,364		$	1,087,564		$	(3,320,469	)	$	1,142,428

22

NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2007
(In thousands)

													Other
				NHC and NDH			Noble						Subsidiaries			Consolidating
	Noble			Combined			Drilling			NHIL			of Noble			Adjustments			Total
OPERATING REVENUES
Contract drilling services	$	—		$	103,977		$	43,922			—		$	1,851,413		$	(46,137	)	$	1,953,175
Reimbursables		—			439			722			—			90,068			—			91,229
Labor contract drilling services		—			—			—			—			116,342			—			116,342
Engineering, consulting and other		—			6			—			—			2,947			—			2,953
		—			104,422			44,644			—			2,060,770			(46,137	)		2,163,699
OPERATING COSTS AND EXPENSES
Contract drilling services		16,030			21,554			20,767			13			623,940			(46,137	)		636,167
Reimbursables		—			369			716			—			78,744			—			79,829
Labor contract drilling services		—			—			—			—			93,181			—			93,181
Engineering, consulting and other		—			—			400			—			16,970			—			17,370
Depreciation and amortization		—			19,311			4,048			—			187,021			—			210,380
Selling, general and administrative		9,912			2,967			973			—			45,293			—			59,145
Hurricane losses and recoveries, net		—			—			—			—			1,600			—			1,600
		25,942			44,201			26,904			13			1,046,749			(46,137	)		1,097,672
OPERATING INCOME (LOSS)		(25,942	)		60,221			17,740			(13	)		1,014,021			—			1,066,027
OTHER INCOME (EXPENSE)
Equity earnings in affiliates (net of tax)		957,702			892,272			448,099			553,778			—			(2,851,851	)		—
Interest expense, net of amount capitalized		(75,105	)		(34,885	)		(20,496	)		—			34,312			84,293			(11,881	)
Interest income and other, net		1,007			3			—			—			91,907			(84,293	)		8,624
INCOME BEFORE INCOME TAXES		857,662			917,611			445,343			553,765			1,140,240			(2,851,851	)		1,062,770
INCOME TAX (PROVISION) BENEFIT		969			9,516			(24,158	)		—			(190,466	)		—			(204,139	)
NET INCOME	$	858,631		$	927,127		$	421,185		$	553,765		$	949,774		$	(2,851,851	)	$	858,631

23

NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2008
(In thousands)

												��
													Other
				NHC and NDH			Noble						Subsidiaries			Consolidating
	Noble			Combined			Drilling			NHIL			of Noble			Adjustments			Total
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,142,428		$	1,149,010		$	351,531		$	732,364		$	1,087,564$			(3,320,469	)	$	1,142,428
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		—			25,314			5,342			—			232,750			—			263,406
Hurricane losses and recoveries, net		—			—			—			—			10,000			—			10,000
Deferred income tax provision		—			—			549			—			13,553			—			14,102
Share-based compensation expense		28,274			—			—			—			—			—			28,274
Equity earnings in affiliates		(1,180,153	)		(1,046,513	)		(361,425	)		(732,378	)		—			3,320,469			—
Pension contributions		—			—			—			—			(17,445	)		—			(17,445	)
Gain on disposal of assets, net		—			—			—			—			(35,521	)		—			(35,521	)
Other, net		1,697			5,621			43			—			(11,296	)		—			(3,935	)
Other changes in current assets and liabilities:
Accounts receivable		—			3,777			2,285			—			(55,125	)		—			(49,063	)
Hurricane insurance receivables		—			—			—			—			17,319			—			17,319
Other current assets		(2,067	)		3			92			—			(41,919	)		—			(43,891	)
Accounts payable		—			(568	)		6,432			—			(8,270	)		—			(2,406	)
Other current liabilities		23,576			15,940			(4,531	)		—			(26,588	)		—			8,397
Net cash from operating activities		13,755			152,584			318			(14	)		1,165,022			—			1,331,665
CASH FLOWS FROM INVESTING ACTIVITIES
New construction		—			(563,349	)		—			—			—			—			(563,349	)
Other capital expenditures		—			—			(2,503	)		—			(241,340	)		—			(243,843	)
Major maintenance expenditures		—			—			(2,889	)		—			(70,029	)		—			(72,918	)
Accrued capital expenditures		—			—			—			—			92,719			—			92,719
Hurricane insurance receivables		—			—			—			—			21,747			—			21,747
Notes receivable from affiliates		—			—			—			—			(300,000	)		300,000			—
Repayments from affiliates		—			—			—			—			21,065			(21,065	)		—
Proceeds from disposal of assets		—			—			—			—			39,134			—			39,134
Net cash from investing activities		—			(563,349	)		(5,392	)		—			(436,704	)		278,935			(726,510	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on bank credit facilities		(50,000	)		—			—			—			—			—			(50,000	)
Payments of other long-term debt		—			—			—			—			(7,682	)		—			(7,682	)
Advances (to) from affiliates		281,832			432,162			5,028			14			(719,036	)		—			—
Repayment of notes to affiliates		—			(21,065	)		—			—			—			21,065			—
Notes payable to affiliates		300,000			—			—			—			—			(300,000	)		—
Net proceeds from employee stock transactions		10,070			—			—			—			—			—			10,070
Dividends paid		(233,638	)		—			—			—			—			—			(233,638	)
Repurchases of ordinary shares		(271,310	)		—			—			—			—			—			(271,310	)
Net cash from financing activities		36,954			411,097			5,028			14			(726,718	)		(278,935	)		(552,560	)
NET INCREASE (DECREASE) IN CASH AND CASH- EQUIVALENTS		50,709			332			(46	)		—			1,600			—			52,595
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		12,544			—			73			—			148,441			—			161,058
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	63,253		$	332		$	27		$	—		$	150,041		$	—		$	213,653

24

NOBLE CORPORATION AND OTHER SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2007
(In thousands)

													Other
				NHC and NDH			Noble						Subsidiaries			Consolidating
	Noble			Combined			Drilling			NHIL			of Noble			Adjustments			Total
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	858,631		$	927,127		$	421,185		$	553,765		$	949,774		$	(2,851,851	)	$	858,631
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		—			19,311			4,048			—			187,021			—			210,380
Impairment loss on assets		—			—			400			—			9,789			—			10,189
Deferred income tax provision		—			4,794			382			—			8,021			—			13,197
Share-based compensation expense		25,951			—			—			—			—			—			25,951
Equity earnings in affiliates		(957,702	)		(892,272	)		(448,099	)		(553,778	)		—			2,851,851			—
Pension contributions		—			—			—			—			(37,615	)		—			(37,615	)
Other, net		618			67			(743	)		—			24,085			—			24,027
Other changes in current assets and liabilities:
Accounts receivable		—			(7,882	)		(3,380	)		—			(100,101	)		—			(111,363	)
Other current assets		1			654			647			—			17,233			—			18,535
Accounts payable		(17,305	)		(1,510	)		1,804			—			(19,903	)		—			(36,914	)
Other current liabilities		7,909			(4,306	)		(7,987	)		—			24,751			—			20,367
Net cash from operating activities		(81,897	)		45,983			(31,743	)		(13	)		1,063,055			—			995,385
CASH FLOWS FROM INVESTING ACTIVITIES
New construction		—			(428,517	)		—			—			(113,459	)		—			(541,976	)
Other capital expenditures		—			(52	)		(7,927	)		—			(322,728	)		—			(330,707	)
Major maintenance expenditures		—			(2,407	)		(914	)		—			(66,435	)		—			(69,756	)
Accrued capital expenditures		—			(6,334	)		—			—			62,274			—			55,940
Notes receivable from affiliates		—			—			—			—			(750,350	)		750,350			—
Repayments from affiliates		—			—			—			—			702,526			(702,526	)		—
Proceeds from disposal of assets		—			—			—			—			4,643			—			4,643
Net cash from investing activities		—			(437,310	)		(8,841	)		—			(483,529	)		47,824			(881,856	)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term debt borrowing		685,000			—			—			—			—			—			685,000
Short-term debt payment		(685,000	)		—			—			—			—			—			(685,000	)
Borrowings on bank credit facilities		135,000			—			85,000			—			—			—			220,000
Payments on bank credit facilities		(35,000	)		—			(85,000	)		—			—			—			(120,000	)
Payments of other long-term debt		—			—			—			—			(7,158	)		—			(7,158	)
Advances (to) from affiliates		32,995			408,939			40,631			13			(482,578	)		—			—
Repayment of notes to affiliates		(685,000	)		(17,526	)		—			—			—			702,526			—
Notes payable to affiliates		750,350			—			—			—			—			(750,350	)		—
Net proceeds from employee stock transactions		24,713			—			—			—			—			—			24,713
Dividends paid		(21,528	)		—			—			—			—			—			(21,528	)
Repurchases of ordinary shares		(120,687	)		—			—			—			—			—			(120,687	)
Net cash from financing activities		80,843			391,413			40,631			13			(489,736	)		(47,824	)		(24,660	)
NET INCREASE (DECREASE) IN CASH AND CASH- EQUIVALENTS		(1,054	)		86			47			—			89,790			—			88,869
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		2,458			36			—			—			59,216			—			61,710
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,404		$	122		$	47		$	—		$	149,006		$	—		$	150,579

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