Noble 10Q 2009 Q2 Quarterly report

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 endedJune 30, 2009


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Noble Corporation

(Exact name of registrant as specified in its charter)
(Commission File No. 000-53604)
98-0619597 (IRS Employer Identification No.)
13135 South Dairy Ashford, Suite 800, Sugar Land, Texas 77478
(Address of principal executive offices, including zip code)
(281) 276-6100
(Registrant’s telephone number, including area code)
Switzerland
(State or other jurisdiction of incorporation)

Noble Corporation

(Exact name of registrant as specified in its charter)
(Commission File No. 001-31306)
98-0366361 (IRS Employer Identification No.)
13135 South Dairy Ashford, Suite 800, Sugar Land, Texas 77478
(Address of principal executive offices, including zip code)
(281) 276-6100
(Registrant’s telephone number, including area code)
Cayman Islands
(State or other jurisdiction of incorporation)

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ Noo

Indicate by check mark whether each registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yesþ Noo

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filerþ		Accelerated filero		Non-accelerated filero		Smaller reporting companyo

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Act). Yeso Noþ

Number of shares outstanding at August 3, 2009: Noble Corporation (Switzerland) — 261,541,366; Noble Corporation (Cayman Islands) — 261,245,693

Noble Corporation, a Cayman Islands company and a wholly owned subsidiary of Noble Corporation, a Swiss corporation, meets the conditions set forth in General Instructions H(1) (a) and (b) of Form 10-Q and is therefore filing thisForm 10-Q with the reduced disclosure format contemplated by paragraphs (b) and (c) of General Instruction H(2) ofForm 10-Q.

TABLE OF CONTENTS


	Page
PART I FINANCIAL INFORMATION

Item 1 Financial Statements

Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008		3

Consolidated Statements of Income for the three and six months ended June 30, 2009 and 2008		4

Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008		6

Consolidated Statements of Shareholders’ Equity for the six months ended June 30, 2009		7

Consolidated Statements of Comprehensive Income for the three months and six months ended June 30, 2009 and 2008		8

Notes to Consolidated Financial Statements		9

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		30

Item 3 Quantitative and Qualitative Disclosures About Market Risk		47

Item 4 Controls and Procedures		48

PART II OTHER INFORMATION

Item 1 Legal Proceedings		49

Item 1A Risk Factors		49

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds		49

Item 4 Submission of Matters to a Vote of Security Holders		50

Item 6 Exhibits		50

SIGNATURES		51

Index to Exhibits		52

Exhibit 10.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

This combined Quarterly Report on Form 10-Q is separately filed by Noble Corporation, a Swiss corporation (“Noble-Swiss”), and Noble Corporation, a Cayman Islands company (“Noble-Cayman”). Information in this filing relating to Noble-Cayman is filed by Noble-Swiss and separately by Noble-Cayman on its own behalf. Noble-Cayman makes no representation as to information relating to Noble-Swiss (except as it may relate to Noble-Cayman) or any other affiliate or subsidiary of Noble-Swiss. Because Noble-Cayman meets the conditions specified in General Instructions H(1)(a) and (b) to Form 10-Q, it is permitted to use the reduced disclosure format for wholly owned subsidiaries of reporting companies. Accordingly, Noble-Cayman has omitted from this report the information called for by Item 3 (Quantitative and Qualitative Disclosures about Market Risk) of Part I of Form 10-Q and the following items of Part II of Form 10-Q: Item 2 (Unregistered Sales of Equity Securities and Use of Proceeds), Item 3 (Defaults upon Senior Securities) and Item 4 (Submission of Matters to a Vote of Security Holders).

This report should be read in its entirety as it pertains to each Registrant. Except where indicated, the Unaudited Consolidated Financial Statements and the Notes to the Unaudited Consolidated Financial Statements are combined. References in this Quarterly Report on Form 10-Q to “Noble,” the “Company,” “we,” “us,” “our” and words of similar meaning refer collectively to Noble-Swiss and its consolidated subsidiaries, including Noble-Cayman, after March 26, 2009 and to Noble-Cayman and its consolidated subsidiaries for periods through March 26, 2009. Noble-Swiss became a successor registrant to Noble-Cayman under the Securities Exchange Act of 1934 (the “Exchange Act”) pursuant to Rule 12g-3 of the Exchange Act as a result of consummation of the Transaction described in Note 1 to Item 1, Part I of this Quarterly Report on Form 10-Q.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)


	Noble Corporation						Noble Corporation
	(Noble-Swiss)						(Noble-Cayman)
	June 30,			December 31,			June 30,			December 31,
	2009			2008			2009			2008
ASSETS
Current assets
Cash and cash equivalents	$	671,420		$	513,311		$	671,401		$	513,311
Accounts receivable		654,435			644,840			654,435			644,840
Insurance receivables		39,214			13,516			39,214			13,516
Prepaid expenses		43,582			21,207			43,582			21,207
Other current assets		45,326			47,467			45,326			47,467

Total current assets		1,453,977			1,240,341			1,453,958			1,240,341


Property and equipment
Drilling equipment and facilities		7,854,412			7,427,908			7,854,412			7,427,908
Other		113,395			105,340			113,395			105,340

		7,967,807			7,533,248			7,967,807			7,533,248
Accumulated depreciation		(2,015,731	)		(1,886,231	)		(2,015,731	)		(1,886,231	)

		5,952,076			5,647,017			5,952,076			5,647,017


Other assets		276,069			219,441			276,069			219,441

Total assets	$	7,682,122		$	7,106,799		$	7,682,103		$	7,106,799


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt	$	—		$	172,698		$	—		$	172,698
Accounts payable		204,914			259,107			204,741			259,107
Accrued payroll and related costs		75,270			75,449			75,270			75,449
Taxes payable		69,253			107,211			69,253			107,211
Interest payable		11,252			11,325			11,252			11,325
Other current liabilities		62,155			53,203			62,155			53,203

Total current liabilities		422,844			678,993			422,671			678,993


Long-term debt		750,866			750,789			750,866			750,789
Deferred income taxes		275,396			265,018			275,396			265,018
Other liabilities		170,721			121,284			181,979			121,284

Total liabilities		1,619,827			1,816,084			1,630,912			1,816,084


Commitments and contingencies

Shareholders’ equity
Shares — par value 5.00 Swiss francs per share; 414,399 shares authorized; 138,133 shares conditionally authorized, 276,266 shares issued and 261,404 shares outstanding as of June 30, 2009		1,163,035			—			—			—
Ordinary shares — par value $.10 per share;
400,000 shares authorized; 261,246 shares and 261,899 shares issued and outstanding at June 30, 2009 and December 31, 2008, respectively		—			26,190			26,125			26,190
Capital in excess of par value		—			402,115			360,244			402,115
Retained earnings		4,950,702			4,919,667			5,716,264			4,919,667
Accumulated other comprehensive loss		(51,442	)		(57,257	)		(51,442	)		(57,257	)

Total shareholders’ equity		6,062,295			5,290,715			6,051,191			5,290,715

Total liabilities and shareholders’ equity	$	7,682,122		$	7,106,799		$	7,682,103		$	7,106,799

See accompanying notes to the consolidated financial statements.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Operating revenues
Contract drilling services	$	868,205		$	783,280		$	1,740,602		$	1,581,114
Reimbursables		22,834			20,964			39,512			53,422
Labor contract drilling services		7,419			8,218			14,353			39,149
Other		414			479			556			681

		898,872			812,941			1,795,023			1,674,366


Operating costs and expenses
Contract drilling services		251,054			256,436			491,910			492,388
Reimbursables		19,281			17,831			33,364			47,292
Labor contract drilling services		4,881			6,547			9,257			31,884
Depreciation and amortization		99,417			87,836			192,401			170,735
Selling, general and administrative		21,484			19,667			39,201			40,940
(Gain)/loss on asset disposal/involuntary conversion, net		16,943			(35,521	)		28,977			(35,521	)

		413,060			352,796			795,110			747,718


Operating income		485,812			460,145			999,913			926,648

Other income (expense)
Interest expense, net of amount capitalized		(361	)		(721	)		(882	)		(1,831	)
Interest income and other, net		1,318			1,580			2,390			4,709

Income before income taxes		486,769			461,004			1,001,421			929,526
Income tax provision		(94,920	)		(85,286	)		(195,277	)		(169,620	)

Net income	$	391,849		$	375,718		$	806,144		$	759,906


Net income per share
Basic	$	1.50		$	1.40		$	3.08		$	2.83
Diluted	$	1.49		$	1.39		$	3.08		$	2.81

See accompanying notes to the consolidated financial statements.

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Operating revenues
Contract drilling services	$	868,205		$	783,280		$	1,740,602		$	1,581,114
Reimbursables		22,834			20,964			39,512			53,422
Labor contract drilling services		7,419			8,218			14,353			39,149
Other		414			479			556			681

		898,872			812,941			1,795,023			1,674,366


Operating costs and expenses
Contract drilling services		251,054			256,436			491,910			492,388
Reimbursables		19,281			17,831			33,364			47,292
Labor contract drilling services		4,881			6,547			9,257			31,884
Depreciation and amortization		99,417			87,836			192,401			170,735
Selling, general and administrative		20,653			19,667			38,278			40,940
(Gain)/loss on asset disposal/involuntary conversion, net		16,943			(35,521	)		28,977			(35,521	)

		412,229			352,796			794,187			747,718


Operating income		486,643			460,145			1,000,836			926,648

Other income (expense)
Interest expense, net of amount capitalized		(361	)		(721	)		(882	)		(1,831	)
Interest income and other, net		1,318			1,580			2,390			4,709

Income before income taxes		487,600			461,004			1,002,344			929,526
Income tax provision		(94,920	)		(85,286	)		(195,277	)		(169,620	)

Net income	$	392,680		$	375,718		$	807,067		$	759,906

See accompanying notes to the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


	Noble Corporation						Noble Corporation
	(Noble-Swiss)						(Noble-Cayman)
	Six Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Cash flows from operating activities
Net income	$	806,144		$	759,906		$	807,067		$	759,906
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		192,401			170,735			192,401			170,735
(Gain)/loss on asset disposal/involuntary conversion, net		28,977			(35,521	)		28,977			(35,521	)
Deferred income tax provision		6,431			13,900			6,431			13,900
Share-based compensation expense		17,294			18,471			17,294			18,471
Pension contributions		(1,432	)		(17,445	)		(1,432	)		(17,445	)
Other changes in assets and liabilities:
Accounts receivable		(25,691	)		52,192			(25,691	)		52,192
Other current assets		(42,037	)		(25,313	)		(42,037	)		(25,313	)
Other assets		(17,282	)		3,236			(17,282	)		3,236
Accounts payable		23,333			(7,994	)		23,160			(7,994	)
Other current liabilities		(29,083	)		(1,179	)		(29,398	)		(1,179	)
Other liabilities		39,384			4,525			41,747			4,525

Net cash from operating activities		998,439			935,513			1,001,237			935,513


Cash flows from investing activities
New construction		(275,153	)		(310,770	)		(275,153	)		(310,770	)
Other capital expenditures		(192,657	)		(161,546	)		(192,657	)		(161,546	)
Major maintenance expenditures		(57,750	)		(52,577	)		(57,750	)		(52,577	)
Accrued capital expenditures		(68,134	)		(17,596	)		(68,134	)		(17,596	)
Hurricane insurance receivables		—			21,747			—			21,747
Proceeds from disposal of assets		—			39,134			—			39,134

Net cash from investing activities		(593,694	)		(481,608	)		(593,694	)		(481,608	)


Cash flows from financing activities
Payments on bank credit facilities		—			(50,000	)		—			(50,000	)
Payments of other long-term debt		(172,700	)		(5,076	)		(172,700	)		(5,076	)
Employee stock transactions		(2,599	)		10,558			(5,416	)		10,558
Dividends paid		(10,470	)		(222,910	)		(10,470	)		(222,910	)
Repurchases of ordinary shares		(60,867	)		(26,571	)		(60,867	)		(26,571	)

Net cash from financing activities		(246,636	)		(293,999	)		(249,453	)		(293,999	)

Net increase in cash and cash equivalents		158,109			159,906			158,090			159,906
Cash and cash equivalents, beginning of period		513,311			161,058			513,311			161,058

Cash and cash equivalents, end of period	$	671,420		$	320,964		$	671,401		$	320,964

See accompanying notes to the consolidated financial statements.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)


													Accumulated
							Capital in						Other			Total
	Shares						Excess of			Retained			Comprehensive			Shareholders’
	Balance			Par Value			Par Value			Earnings			Loss			Equity

Balance at December 31, 2008		261,899		$	26,190		$	402,115		$	4,919,667		$	(57,257	)	$	5,290,715

Share-based compensation
Share-based compensation		1,339			175			8,255			8,864			—			17,294
Contribution to employee benefit plans		15			40			152			276			—			468
Exercise of stock options		185			761			162			2,055			—			2,978
Tax benefit of stock options exercised		—			—			(1,597	)		—			—			(1,597	)
Restricted shares surrendered for withholding taxes or forfeited		(314	)		(166	)		(5,527	)		116			—			(5,577	)

Repurchases of ordinary shares		(1,720	)		(172	)		(43,303	)		—			—			(43,475	)
Cancellation of shares in Transaction		(261,246	)		(26,125	)		26,125			—			—			—
Issuance of shares in Transaction		261,246			1,162,332			(386,382	)		(775,950	)		—			—
Net income		—			—			—			806,144			—			806,144
Dividends paid ($0.04 per share)		—			—			—			(10,470	)		—			(10,470	)
Other comprehensive loss, net		—			—			—			—			5,815			5,815


Balance at June 30, 2009		261,404		$	1,163,035		$	—		$	4,950,702		$	(51,442	)	$	6,062,295

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


													Accumulated
							Capital in						Other			Total
	Shares						Excess of			Retained			Comprehensive			Shareholders’
	Balance			Par Value			Par Value			Earnings			Loss			Equity

Balance at December 31, 2008		261,899		$	26,190		$	402,115		$	4,919,667		$	(57,257	)	$	5,290,715

Share-based compensation
Share-based compensation		1,332			133			8,266			—			—			8,399
Contribution to employee benefit plans		6			1			152			—			—			153
Exercise of stock options		18			2			145			—			—			147
Tax benefit of stock options exercised		—			—			(1,597	)		—			—			(1,597	)
Restricted shares surrendered for withholding taxes or forfeited		(285	)		(29	)		(5,534	)		—			—			(5,563	)

Repurchases of ordinary shares		(1,720	)		(172	)		(43,303	)		—			—			(43,475	)
Net income		—			—			—			807,067			—			807,067
Dividends paid ($0.04 per share)		—			—			—			(10,470	)		—			(10,470	)
Other comprehensive loss, net		—			—			—			—			5,815			5,815


Balance at June 30, 2009		261,250		$	26,125		$	360,244		$	5,716,264		$	(51,442	)	$	6,051,191

See accompanying notes to the consolidated financial statements.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Noble Corporation					Noble Corporation
	(Noble-Swiss)					(Noble-Swiss)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2009		2008			2009		2008

Net income	$	391,849	$	375,718		$	806,144	$	759,906

Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		2,349		(3,999	)		1,222		(4,064	)
Gain (loss) on forward currency forward contracts		2,658		(1,250	)		2,852		(1,556	)
Amortization of deferred pension plan amounts		889		190			1,741		416

Other comprehensive loss, net		5,896		(5,059	)		5,815		(5,204	)

Comprehensive income	$	397,745	$	370,659		$	811,959	$	754,702

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


	Noble Corporation					Noble Corporation
	(Noble-Cayman)					(Noble-Cayman)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2009		2008			2009		2008

Net income	$	392,680	$	375,718		$	807,067	$	759,906

Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		2,349		(3,999	)		1,222		(4,064	)
Gain (loss) on forward currency forward contracts		2,658		(1,250	)		2,852		(1,556	)
Amortization of deferred pension plan amounts		889		190			1,741		416

Other comprehensive loss, net		5,896		(5,059	)		5,815		(5,204	)

Comprehensive income	$	398,576	$	370,659		$	812,882	$	754,702

See accompanying notes to the consolidated financial statements.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES
NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

Note 1 — Basis of Presentation

On March 26, 2009, pursuant to the previously announced Agreement and Plan of Merger, Reorganization and Consolidation, dated as of December 19, 2008 (as amended, the “Merger Agreement”), among Noble-Swiss, Noble-Cayman, and Noble Cayman Acquisition Ltd., a Cayman Islands company and a wholly-owned subsidiary of Noble-Swiss (“Noble-Acquisition”), Noble-Cayman merged by way of schemes of arrangement under Cayman Islands law (the “Schemes of Arrangement”) with Noble-Acquisition, with Noble-Cayman as the surviving company (the “Transaction”). Under the terms of the Schemes of Arrangement, each holder of Noble-Cayman ordinary shares outstanding immediately prior to the Transaction received, through an exchange agent, one Noble-Swiss registered share in exchange for each outstanding Noble-Cayman ordinary share, and Noble-Swiss received, through an exchange agent, a number of newly issued Noble-Cayman ordinary shares equal to the number of Noble-Cayman ordinary shares outstanding immediately prior to the Transaction. Noble-Swiss also issued 15 million Noble-Swiss registered shares to Noble-Cayman in connection with the Transaction that are being held in treasury by a wholly owned subsidiary.

The Transaction effectively changed the place of incorporation of our parent holding company from the Cayman Islands to Switzerland. As a result of the Transaction, Noble-Cayman became a direct, wholly-owned subsidiary of Noble-Swiss. Currently, Noble-Swiss’ principal asset is 100% of the shares of Noble-Cayman. The consolidated financial statements of Noble-Swiss include the accounts of its wholly-owned subsidiary, Noble-Cayman. Noble-Swiss conducts substantially all of its business through Noble-Cayman and its subsidiaries.

The accompanying unaudited consolidated financial statements of Noble-Swiss and Noble-Cayman 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 disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) 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, 2008 presented herein is derived from the December 31, 2008 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, 2008 filed by Noble-Cayman. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Certain amounts in prior periods have been reclassified to conform to the current year presentation.

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

Note 2 — Net Income per Share

We calculate net income per share in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 128,Earnings Per Share. In June 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“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 clarifies 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. EITF Issue No. 03-6,Participating Securities and the Two Class Method under FASB Statement No. 128(“EITF 03-6”) clarified the use of the “two-class” method of calculating earnings per share as originally prescribed in SFAS 128. The “two-class” method allocates undistributed earnings between common shares and participating securities. We determined that our unvested restricted share awards meet the definition of a participating security as they contain nonforfeitable rights to dividends. The diluted earnings per share calculation under the “two-class” method also includes the dilutive effect of potential registered shares issued in connection with stock options. The dilutive effect of stock options is determined using the treasury stock method.

The following table sets forth the computation of basic and diluted net income per share for Noble-Swiss. As a result of the consummation of the Transaction, Noble-Cayman has no public equity outstanding after March 26, 2009 as all Noble-Cayman ordinary shares are held by Noble-Swiss. Therefore, no earnings per share information is presented for Noble-Cayman.


	Three months ended						Six months ended
	June 30,						June 30,
	2009			2008			2009			2008
Allocation of net income
Basic
Net income	$	391,849		$	375,718		$	806,144		$	759,906
Earnings allocated to unvested share-based payment awards		(4,174	)		(3,324	)		(7,671	)		(6,418	)

Net income to common shareholders — basic	$	387,675		$	372,394		$	798,473		$	753,488


Diluted
Net income	$	391,849		$	375,718		$	806,144		$	759,906
Earnings allocated to unvested share-based payment awards		(4,161	)		(3,313	)		(7,650	)		(6,386	)

Net income to common shareholders — diluted	$	387,688		$	372,405		$	798,494		$	753,520


Weighted average shares outstanding — basic		258,487			266,464			258,874			266,458
Incremental shares issuable from assumed exercise of stock options		839			2,049			702			1,967

Weighted average shares outstanding — diluted		259,326			268,513			259,576			268,425


Weighted average unvested share-based payment awards		2,783			2,286			2,487			2,160


Earnings per share
Basic	$	1.50		$	1.40		$	3.08		$	2.83
Diluted	$	1.49		$	1.39		$	3.08		$	2.81

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 $13 million and $29 million for the three and six months ended June 30, 2009, and $12 million and $24 million for the three and six months ended June 30, 2008, respectively.

In May 2009, our jackup, theNoble David Tinsley, experienced a “punch-through” while the rig was being positioned on location offshore Qatar. The incident involved the sudden penetration of all three legs through the sea bottom, which resulted in severe damage to the legs and the rig. The rig is currently in the shipyard to replace the legs and repair the damage to the rig. We recorded a charge of $17 million during the quarter ended June 30, 2009, related to this involuntary conversion, which includes approximately $9 million for the write-off of the damaged legs.

During the first quarter of 2009, we recognized a charge of $12 million related to theNoble Fri Rodli, a submersible that has been cold stacked since October 2007. We recorded the charge as a result of a decision to evaluate disposition alternatives for this rig.

During the second quarter of 2008, we sold our North Sea labor contract drilling services business to Seawell Holding UK Limited 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 includes approximately $5 million in cumulative currency translation adjustments.

Note 4 — Accounts Receivable

During the second quarter of 2009, we reached an agreement with one of our customers in the U.S. Gulf of Mexico regarding outstanding receivables owed to us, which totaled approximately $52 million at June 30, 2009. The customer has conveyed to us an overriding royalty interest (“ORRI”) as security for the outstanding receivables and has agreed to a payment plan to repay all past due amounts. Amounts received by us pursuant to the ORRI will be applied to the customer’s payment obligations under the payment plan. We have agreed that we will not sell, assign or otherwise dispose of the ORRI as long as the customer meets its payment obligations and complies with the terms of the agreement, which runs through June 2011. The customer is currently meeting its payment obligations under the agreement. The customer has a right to reacquire the ORRI at the end of the term of the agreement, or earlier, subject to certain conditions, which include the customer being current on all payment obligations. In connection with this agreement, we have reclassified the December 31, 2008 receivable balance owed to us from the customer to “Other Assets.”

Note 5 — Debt

Long-term debt consisted of the following at June 30, 2009 and December 31, 2008:


	June 30,		December 31,
	2009		2008
Credit Facility	$	—	$	—
6.95% Senior Notes due 2009		—		149,998
5.875% Senior Notes due 2013		299,855		299,837
7.375% Senior Notes due 2014		249,316		249,257
7.50% Senior Notes due 2019		201,695		201,695
Project Financing — Thompson Notes		—		22,700

Total Debt		750,866		923,487
Current Maturities		—		(172,698	)

Long-term Debt	$	750,866	$	750,789

We have a $600 million unsecured bank 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 during that period 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 up to $800 million. Borrowings under the Credit Facility will bear interest (i) at the sum of Adjusted LIBOR (as defined in the Credit Facility) plus the Applicable Margin (as defined in the Credit Facility; 0.235 percent based on our current credit ratings), or (ii) at the base rate, determined as the greater of the prime rate for U.S. Dollar loans announced by Citibank, N.A. in New York or the sum of the weighted average overnight federal funds rate published by the Federal Reserve Bank of New York plus 0.50 percent. The Credit Facility contains various covenants, including a debt to total tangible capitalization covenant that limits this ratio to 0.60. As of June 30, 2009, our ratio of debt to total tangible capitalization was 0.11. In addition, the Credit Facility includes restrictions on certain fundamental changes such as mergers, unless we are the surviving entity or the other party assumes the obligations under the Credit Facility, and the ability to sell or transfer all or substantially all of our assets unless to a subsidiary. The Credit Facility also limits our subsidiaries’ additional indebtedness, excluding intercompany advances and loans, to 10 percent of our consolidated net assets, as defined in the Credit Facility, unless a subsidiary guarantee is issued to the parent company borrower. There are also restrictions on our incurring or assuming additional liens in certain circumstances. We were in compliance with all covenants under the Credit Facility at June 30, 2009.

During the first quarter of 2009, we repaid $150 million principal amount of 6.95% Senior Notes due 2009 and $23 million principal amount of project financing Thompson Notes using cash on hand at maturity.

Fair Value of Financial Instruments

Fair value as used in SFAS No. 107,Disclosures about Fair Value of Financial Instruments, represents the amount at which an instrument could be exchanged in a current transaction between willing parties. The fair value of our senior notes was based on the quoted market prices for similar issues or on the current rates offered to us for debt of similar remaining maturities. The following table presents the estimated fair value of our long-term debt as of June 30, 2009 and December 31, 2008.


	June 30, 2009				December 31, 2008
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Long-term debt
Credit Facility	$	—	$	—	$	—	$	—
6.95% Senior Notes due 2009		—		—		149,998		149,185
5.875% Senior Notes due 2013		299,855		299,440		299,837		294,495
7.375% Senior Notes due 2014		249,316		259,817		249,257		249,838
7.50% Senior Notes due 2019		201,695		198,320		201,695		196,991
Project Financing — Thompson Notes		—		—		22,700		22,700

Note 6 — Income Taxes

At December 31, 2008, the reserves for uncertain tax positions totaled $93 million (net of related tax benefits of $5 million). At June 30, 2009, the reserves for uncertain tax positions totaled $126 million (net of related tax benefits of $5 million). If the reserves of $126 million are not realized, the provision for income taxes would be reduced by $99 million and equity would be directly increased by $27 million.

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

Note 7 — Employee Benefit Plans

Pension costs include the following components:


	Three Months Ended June 30,
	2009						2008
	Non-U.S.			U.S.			Non-U.S.			U.S.
Service cost	$	757		$	1,803		$	1,421		$	1,573
Interest cost		1,063			1,713			1,249			1,614
Return on plan assets		(1,322	)		(1,786	)		(1,686	)		(2,227	)
Amortization of prior service cost		—			73			—			98
Amortization of transition obligation		18			—			43			—
Recognized net actuarial loss		61			1,031			40			87

Net pension expense	$	577		$	2,834		$	1,067		$	1,145


	Six Months Ended June 30,
	2009						2008
	Non-U.S.			U.S.			Non-U.S.			U.S.

Service cost	$	1,505		$	3,606		$	2,841		$	3,147
Interest cost		2,085			3,426			2,500			3,229
Return on plan assets		(2,593	)		(3,572	)		(3,378	)		(4,454	)
Amortization of prior service cost		—			146			—			196
Amortization of transition obligation		35			—			86			—
Recognized net actuarial loss		118			2,062			80			174

Net pension expense	$	1,150		$	5,668		$	2,129		$	2,292

During the six months ended June 30, 2009, we made contributions to our pension plans totaling $1 million. We expect to contribute, subject to applicable law, an aggregate of $6 million to our pension plans in 2009, including the $1 million in contributions made during the six months ended June 30, 2009.

We sponsor the Noble Drilling Corporation 401(k) Savings Restoration Plan (“Restoration Plan”). The Restoration Plan is a nonqualified, unfunded employee benefit plan under which certain highly compensated employees may elect to defer compensation in excess of amounts deferrable under our 401(k) savings plan. The Restoration Plan has no assets, and amounts withheld for 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 withheld plus phantom investment income or less phantom investment losses. We are at risk for phantom investment income and, conversely, we benefit should phantom investment losses occur. At June 30, 2009 and December 31, 2008, our liability under the Restoration Plan totaled $7 million and $8 million, respectively. We have 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 $7 million at both June 30, 2009 and December 31, 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.

Hedge effectiveness is evaluated based on the matching of critical terms between derivative contracts and the hedged item. 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 six months ended June 30, 2009 and 2008 related to these derivative instruments.

Effective January 1, 2009, we adopted Statement of Financial Accounting Standard 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. Our adoption of SFAS No. 161 did not have a material impact on our financial position or results of operations.

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. The Euro-denominated forward contracts settling in the remainder of 2009 represent approximately 61 percent of our forecasted Euro requirements. The British Pound-denominated forward contracts settling in the remainder of 2009 represent approximately 61 percent of our forecasted British Pound requirements. The notional amount of forward contracts outstanding at June 30, 2009 was approximately 11 million Euros and 20 million British Pounds. The aggregate notional amount of these forward contracts, expressed in U.S. Dollars, was $45 million at June 30, 2009. We had no Euro-denominated or British Pound-denominated forward contracts outstanding at December 31, 2008.

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						Six Months Ended
	June 30,						June 30,
	2009			2008			2009		2008

Net unrealized gain at beginning of period	$	194		$	1,913		$	—	$	2,219
Activity during period:
Settlement of forward contracts during period		(60	)		(1,295	)		—		(1,850	)
Net unrealized gain on outstanding forward contracts		2,718			45			2,852		294

Net unrealized gain at end of period	$	2,852		$	663		$	2,852	$	663

Fair Value Hedges

We have 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. Our payment obligation 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 June 30, 2009, the aggregate notional amount of the remaining forward contracts was 70 million Euros. Each forward contract settles in connection with required payments under the contract. We are accounting for these forward contracts as fair value hedges under 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 million at June 30, 2009.

Note 9 — Fair Value of Financial Instruments

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


			June 30, 2009						December 31, 2008
			Estimated Fair Value
			Measurements
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
	Carrying		Markets		Inputs		Inputs		Carrying		Estimated
	Amount		(Level 1)		(Level 2)		(Level 3)		Amount		Fair Value
Assets -
Marketable securities	$	7,262	$	7,262	$	—	$	—	$	7,104	$	7,104
Forward contracts	$	2,852	$	—	$	2,852	$	—	$	—	$	—

Liabilities -
Forward contracts	$	2,996	$	—	$	2,996	$	—	$	5,418	$	5,418

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.

Note 10 — Commitments and Contingencies

Noble Asset Company Limited (“NACL”), our wholly-owned, indirect subsidiary, 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 June 30, 2009) and a customs bond in the amount of 970 million Indian Rupees (or $20 million at June 30, 2009), 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. In November 2008, the Commissioner filed a Special Leave Petition, an Appeal in the Supreme Court of India, appealing the order of the Bombay High Court. NACL has filed an Affidavit-in-reply opposing admission of the Appeal in the Supreme Court of India, and is seeking the return or cancellation of its previously posted custom bond and bank guarantee. 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.

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 non-U.S. income tax returns have been examined for the 2002 through 2004 periods and audit claims have been assessed for approximately $129 million (including interest and penalties), primarily in Mexico. We do not believe we owe these amounts and are defending our position. However, we expect increased audit activity in Mexico and anticipate the tax authorities will issue additional assessments and continue to pursue legal actions for all audit claims. We believe audit claims of an additional $18 million to $20 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 injuries purportedly resulting from exposure to asbestos on drilling rigs and associated facilities. At June 30, 2009, 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 laws 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. In January 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. In February 2009, NIMASA filed suit against us in the Federal High Court of Nigeria seeking collection of the cabotage surcharge. 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.

NIMASA has also informed the Nigerian Content Division of its position that we are not in compliance with the cabotage laws. The Nigerian Content Division makes determinations of companies’ compliance with applicable local content regulations for purposes of government contracting, including contracting for services in connection with oil and gas concessions where the Nigerian national oil company is a partner. The Nigerian Content Division has barred us from participating in new tenders as a result of NIMASA’a allegations. We continue to discuss this matter with the Nigerian Content Division. However, no assurance can be given with respect to our ability to bid for future work in Nigeria until our dispute with NIMASA is resolved.

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. The damage caused in 2005 and 2008 by Hurricanes Katrina, Rita and Ike to oil and gas assets situated in the U.S. Gulf of Mexico has negatively impacted the energy insurance market, resulting in more restricted and more expensive coverage. Beginning March 1, 2009, we elected to self insure U.S. named windstorm physical damage and loss of hire exposures due to the high cost of coverage for these perils. This self insurance applies only to our units in the U.S. portion of the Gulf of Mexico. We presently have five semisubmersibles and two submersibles in the U.S. Gulf of Mexico. Our rigs located in the Mexican portion of the Gulf of Mexico remain covered by commercial insurance for windstorm damage up to the declared value of each unit. We maintain physical damage deductibles of $25 million per occurrence for jack-ups and submersibles and $50 million per occurrence for semi-submersibles and drillships. The loss of hire coverage applies only to our rigs operating under contract with a dayrate equal to or greater than $200,000 a day and is subject to a 45-day waiting period for each unit and each occurrence.

Although we maintain insurance in the geographic areas in which we operate, pollution, reservoir damage and environmental risks generally are not fully insurable. Our insurance policies and contractual rights to indemnity may not adequately cover our losses or may have exclusions of coverage for some losses. We do not have insurance coverage or rights to indemnity for all risks, including loss of hire insurance on most of the rigs in our fleet. Uninsured exposures may include war risk, activities prohibited by U.S. laws and regulations, radiation hazards, certain loss or damage to property on board our rigs and losses relating to terrorist acts or strikes. If a significant accident or other event occurs and is not fully covered by insurance or contractual indemnity, it could adversely affect our financial position, results of operations or cash flows. There can be no assurance that those parties with contractual obligations to indemnify us will necessarily be financially able to indemnify us against all these risks.

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 currently has a standard deductible of $10 million per occurrence.

In connection with our capital expenditure program, we had outstanding commitments, including shipyard and purchase commitments of approximately $1.1 billion at June 30, 2009.

We have entered into employment agreements with certain of our executive officers, as well as certain other employees. These agreements become effective upon a change of control of Noble-Swiss (within the meaning set forth in the agreements) or a termination of employment in connection with or in anticipation of a change of control, and remain effective for three years thereafter. These agreements provide for compensation and certain other benefits under such circumstances.

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 our 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 that 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 or 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.

The independent outside counsel appointed by the audit committee to perform the internal investigation made a presentation of the results of its investigation to the DOJ and the SEC in June 2008. The SEC and the DOJ have been reviewing 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 June 30, 2009.

We are currently operating two jackup rigs offshore Nigeria. The temporary import permits covering the rigs expired in November 2008 and we have pending applications to renew these permits. However, as of July 31, 2009, the Nigerian customs office had not acted on our applications. 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. 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. In any case, we also could be subject to actions by Nigerian customs for import duties and fines for these two rigs, as well as other drilling rigs that operated in Nigeria in the past. We cannot predict what impact these events 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 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 U.S. officials, we adopted additional measures intended to enhance FCPA compliance procedures. Further measures may be required once the investigation concludes.

We incurred legal fees and related costs of $0.3 million and $0.6 million for the three and six months ended June 30, 2009, respectively, and $4 million and $11 million for the three and six months ended June 30, 2008, 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.

Note 11 — Segment and Related Information

We report our contract drilling operations as a single reportable segment: Contract Drilling Services. The consolidation of our contract drilling operations into one reportable segment is attributable to how we manage our business, and the fact that all of our drilling fleet is dependent upon the worldwide oil and gas 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 non-U.S. 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 six months ended June 30, 2009 and 2008 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.


	Three Months Ended June 30,
	2009						2008
	Contract						Contract
	Drilling						Drilling
	Services		Other		Total		Services		Other		Total

Revenues from external customers	$	890,914	$	7,958	$	898,872	$	803,390	$	9,551	$	812,941
Depreciation and amortization		96,952		2,465		99,417		86,636		1,200		87,836
Segment operating income		485,800		12		485,812		424,227		35,918		460,145
Interest expense, net of amount capitalized		160		201		361		610		111		721
Income tax provision		94,899		21		94,920		83,641		1,645		85,286
Segment profit		391,763		86		391,849		340,731		34,987		375,718
Total assets (at end of period)		7,001,497		680,625		7,682,122		5,774,924		577,396		6,352,320
Capital expenditures		254,393		20,447		274,840		274,252		16,653		290,905


	Six Months Ended June 30,
	2009						2008
	Contract						Contract
	Drilling						Drilling
	Services		Other		Total		Services		Other			Total

Revenues from external customers	$	1,779,594	$	15,429	$	1,795,023	$	1,622,577	$	51,789		$	1,674,366
Depreciation and amortization		187,850		4,551		192,401		167,421		3,314			170,735
Segment operating income		999,436		477		999,913		888,028		38,620			926,648
Interest expense, net of amount capitalized		350		532		882		1,603		228			1,831
Income tax provision		195,044		233		195,277		172,440		(2,820	)		169,620
Segment profit		805,183		961		806,144		717,603		42,303			759,906
Total assets (at end of period)		7,001,497		680,625		7,682,122		5,774,924		577,396			6,352,320
Capital expenditures		494,128		31,432		525,560		502,019		22,874			524,893

Note 12 — Accounting Pronouncements

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments,”which requires disclosures about fair value of financial instruments for interim reporting periods. This guidance is effective for interim reporting periods ending after June 15, 2009 and applies to our disclosures beginning with our second fiscal quarter of 2009. The adoption of this FSP did not have a material impact on our financial condition or results of operations.

In April 2009, the FASB also issued FSP No. FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” which provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. This guidance is effective for interim reporting periods ending after June 15, 2009 and applies to our disclosures beginning with our second fiscal quarter of 2009. Our adoption of this FSP did not have a material impact on our financial condition or results of operations.

Also in April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2,“Recognition and Presentation of Other-Than-Temporary Impairments,”which amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. This guidance is effective for interim reporting periods ending after June 15, 2009 and applies to our disclosures beginning with our second fiscal quarter of 2009. Our adoption of this FSP did not have a material impact on our financial condition or results of operations.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events,” which expands disclosures of subsequent events and requires management to disclose the date through which subsequent events have been evaluated. This guidance is effective for interim reporting periods ending after June 15, 2009 and applies to our disclosures beginning with our second fiscal quarter of 2009. Our adoption of SFAS No. 165 did not have a material impact on our financial condition or results of operations.

In June 2009, the FASB issued the following:

•

SFAS No. 166, “Accounting for Transfers of Financial Assets — an Amendment to FASB Statement No. 140,” which expands disclosures that a reporting entity provides about transfers of financial assets and its effect on the financial statements. This guidance is effective for annual and interim reporting periods beginning after November 15, 2009.

•

SFAS No. 167, “Amendments to FASB Interpretation No. 46(R),” which revises how an entity evaluates variable interest entities. This guidance is effective for annual and interim reporting periods beginning after November 15, 2009.

•

SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162,” which modifies the GAAP hierarchy and how authoritative guidance is referenced in financial statements. This guidance is effective for annual and interim reporting periods ending after September 15, 2009.

We do not expect our adoption of these new accounting pronouncements will have a material impact on our financial condition or results of operations.

Note 13 — Subsequent Events

Management has evaluated subsequent events through August 7, 2009, which is the date the consolidated financial statements were filed with the SEC, and has determined that no material reportable events have occurred between July 1, 2009 and August 7, 2009.

Note 14 — Guarantees of Registered Securities

Noble-Cayman and Noble Holding (U.S.) Corporation (“NHC”), each a wholly-owned subsidiary of Noble-Swiss, are guarantors of Noble Drilling Corporation’s (“NDC”) 7.50% Senior Notes due 2019. The outstanding principal balance of the 7.50% Senior Notes at June 30, 2009 was $202 million. NDC is an indirect, wholly-owned subsidiary of Noble-Swiss and a direct, wholly-owned subsidiary of NHC. Noble-Cayman’s and NHC’s guarantees of the 7.50% Senior Notes are full and unconditional. In December 2005, Noble Drilling Holding LLC (“NDH”), an indirect wholly-owned subsidiary of Noble-Swiss, became a co-obligor on (and effectively a guarantor of) the 7.50% Senior Notes.

In connection with the issuance of Noble-Cayman’s 5.875% Senior Notes due 2013, NDC guaranteed the payment of the 5.875% Senior Notes. NDC’s guarantee of the 5.875% Senior Notes is full and unconditional. The outstanding principal balance of the 5.875% Senior Notes at June 30, 2009 was $300 million.

In November 2008, Noble Holding International Limited (“NHIL”), an indirect wholly-owned subsidiary of Noble-Swiss, issued $250 million principal amount of 7.375% Senior Notes due 2014, which are fully and unconditionally guaranteed by Noble-Cayman. The outstanding principal balance of the 7.375% Senior Notes at June 30, 2009 was $249 million.

The following consolidating financial statements of Noble-Cayman, NHC and NDH combined, NDC, NHIL and all other subsidiaries present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.

Subsidiary Balance Sheet

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 2009
(in thousands)


												Other
	Noble-			NHC and NDC			Noble					Subsidiaries			Consolidating
	Cayman			Combined			Drilling			NHIL		of Noble			Adjustments			Total
ASSETS
Current assets
Cash and cash equivalents	$	4,072		$	258		$	4,210		$	—	$	662,861		$	—		$	671,401
Accounts receivable		—			13,502			7,856			9		633,068			—			654,435
Prepaid expenses		—			703			1			—		42,878			—			43,582
Accounts receivable from affiliates		—			—			457,374			241,082		981,934			(1,680,390	)		—
Other current assets		—			941			831			—		148,516			(65,748	)		84,540

Total current assets		4,072			15,404			470,272			241,091		2,469,257			(1,746,138	)		1,453,958


Property and equipment
Drilling equipment, facilities and other		—			1,905,459			129,381			—		5,932,967			—			7,967,807
Accumulated depreciation		—			(84,952	)		(74,018	)		—		(1,856,761	)		—			(2,015,731	)

Total property and equipment, net		—			1,820,507			55,363			—		4,076,206			—			5,952,076


Notes receivable from affiliates		511,835			10,363			1,384			—		1,414,821			(1,938,403	)		—
Investments in affiliates		6,335,343			7,204,587			3,732,485			3,232,160		—			(20,504,575	)		—
Other assets		3,164			5,798			4,390			1,954		260,763			—			276,069

Total assets	$	6,854,414		$	9,056,659		$	4,263,894		$	3,475,205	$	8,221,047		$	(24,189,116	)	$	7,682,103


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt	$	—		$	7,201		$	—		$	—	$	—		$	(7,201	)	$	—
Accounts payable and accrued liabilities		6,391			45,718			40,564			10,834		377,711			(58,547	)		422,671
Accounts payable to affiliates		353,444			1,326,946			—			—		—			(1,680,390	)		—

Total current liabilities		359,835			1,379,865			40,564			10,834		377,711			(1,746,138	)		422,671


Long-term debt		299,855			—			201,695			249,316		—			—			750,866
Notes payable to affiliates		129,900			1,164,921			120,000			—		523,582			(1,938,403	)		—
Other liabilities		13,633			29,866			29,556			—		384,320			—			457,375

Total liabilities		803,223			2,574,652			391,815			260,150		1,285,613			(3,684,541	)		1,630,912


Commitments and contingencies

Shareholders’ Equity
Ordinary shares		26,125			—			—			—		—			—			26,125
Capital in excess of par value		360,244			1,279,983			870,744			406,998		838,639			(3,396,364	)		360,244
Retained earnings		5,716,264			5,202,024			3,001,162			2,808,057		6,148,237			(17,159,480	)		5,716,264
Accumulated other comprehensive income (loss)		(51,442	)		—			173			—		(51,442	)		51,269			(51,442	)

Total shareholders’ equity		6,051,191			6,482,007			3,872,079			3,215,055		6,935,434			(20,504,575	)		6,051,191

Total liabilities and shareholders’ equity	$	6,854,414		$	9,056,659		$	4,263,894		$	3,475,205	$	8,221,047		$	(24,189,116	)	$	7,682,103

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2008
(in thousands)


												Other
	Noble-			NHC and NDC			Noble					Subsidiaries			Consolidating
	Cayman			Combined			Drilling			NHIL		of Noble			Adjustments			Total
ASSETS
Current assets
Cash and cash equivalents	$	661		$	445		$	26		$	—	$	512,179		$	—		$	513,311
Accounts receivable		—			26,604			13,099			—		605,137			—			644,840
Prepaid expenses		—			725			1			—		20,481			—			21,207
Accounts receivable from affiliates		32,807			—			562,679			247,174		961,230			(1,803,890	)		—
Other current assets		7,395			2,768			8			—		134,524			(83,712	)		60,983

Total current assets		40,863			30,542			575,813			247,174		2,233,551			(1,887,602	)		1,240,341


Property and equipment
Drilling equipment, facilities and other		—			2,296,241			116,995			—		5,120,012			—			7,533,248
Accumulated depreciation		—			(113,481	)		(70,326	)		—		(1,702,424	)		—			(1,886,231	)

Total property and equipment, net		—			2,182,760			46,669			—		3,417,588			—			5,647,017


Notes receivable from affiliates		511,835			20,963			44,159			—		1,757,321			(2,334,278	)		—
Investments in affiliates		5,498,928			6,374,623			3,460,873			2,727,556		—			(18,061,980	)		—
Other assets		2,957			10,117			6,418			2,017		197,932			—			219,441

Total assets	$	6,054,583		$	8,619,005		$	4,133,932		$	2,976,747	$	7,606,392		$	(22,283,860	)	$	7,106,799


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt	$	—		$	21,066		$	149,998		$	—	$	22,700		$	(21,066	)	$	172,698
Accounts payable and accrued liabilities		27,452			57,797			40,968			2,075		440,649			(62,646	)		506,295
Accounts payable to affiliates		—			1,642,231			—			—		161,659			(1,803,890	)		—

Total current liabilities		27,452			1,721,094			190,966			2,075		625,008			(1,887,602	)		678,993


Long-term debt		299,837			—			201,695			249,257		—			—			750,789
Notes payable to affiliates		429,900			1,207,421			120,000			—		576,957			(2,334,278	)		—
Other liabilities		6,679			42,520			21,394			—		315,709			—			386,302

Total liabilities		763,868			2,971,035			534,055			251,332		1,517,674			(4,221,880	)		1,816,084


Commitments and contingencies

Shareholders’ Equity
Ordinary shares		26,190			—			—			—		—			—			26,190
Capital in excess of par value		402,115			1,279,983			870,744			406,998		844,032			(3,401,757	)		402,115
Retained earnings		4,919,667			4,367,987			2,728,073			2,318,417		5,301,943			(14,716,420	)		4,919,667
Accumulated other comprehensive income (loss)		(57,257	)		—			1,060			—		(57,257	)		56,197			(57,257	)

Total shareholders’ equity		5,290,715			5,647,970			3,599,877			2,725,415		6,088,718			(18,061,980	)		5,290,715

Total liabilities and shareholders’ equity	$	6,054,583		$	8,619,005		$	4,133,932		$	2,976,747	$	7,606,392		$	(22,283,860	)	$	7,106,799

Subsidiary Income Statement

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2009
(in thousands)


													Other
	Noble-			NHC and NDC			Noble						Subsidiaries			Consolidating
	Cayman			Combined			Drilling			NHIL			of Noble			Adjustments			Total
Operating revenues
Contract drilling services	$	—		$	34,947		$	16,305		$	—		$	835,052		$	(18,099	)	$	868,205
Reimbursables		—			583			—			—			22,251			—			22,834
Labor contract drilling services		—			—			—			—			7,419			—			7,419
Other		—			—			—			—			414			—			414

Total operating revenues		—			35,530			16,305			—			865,136			(18,099	)		898,872


Operating costs and expenses
Contract drilling services		5,517			17,336			1,860			17			244,423			(18,099	)		251,054
Reimbursables		—			352			—			—			18,929			—			19,281
Labor contract drilling services		—			—			—			—			4,881			—			4,881
Depreciation and amortization		—			7,868			2,664			—			88,885			—			99,417
Selling, general and administrative		3,095			1,689			506			—			15,363			—			20,653
Loss on involuntary conversion		—			—			—			—			16,943			—			16,943

Total operating costs and expenses		8,612			27,245			5,030			17			389,424			(18,099	)		412,229


Operating income (loss)		(8,612	)		8,285			11,275			(17	)		475,712			—			486,643

Other income (expense)
Equity earnings in affiliates (net of tax)		406,573			416,166			173,994			232,545			—			(1,229,278	)		—
Interest expense, net of amounts capitalized		(5,281	)		(16,175	)		(3,781	)		(10,196	)		11,051			24,021			(361	)
Interest income and other, net		—			—			—			—			25,339			(24,021	)		1,318


Income before income taxes		392,680			408,276			181,488			222,332			512,102			(1,229,278	)		487,600
Income tax (provision) benefit		—			(289	)		(4,150	)		—			(90,481	)		—			(94,920	)

Net income	$	392,680		$	407,987		$	177,338		$	222,332		$	421,621		$	(1,229,278	)	$	392,680

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2009
(in thousands)


													Other
	Noble-			NHC and NDC			Noble						Subsidiaries			Consolidating
	Cayman			Combined			Drilling			NHIL			of Noble			Adjustments			Total
Operating revenues
Contract drilling services	$	—		$	84,222		$	25,867		$	—		$	1,666,474		$	(35,961	)	$	1,740,602
Reimbursables		—			1,050			—			—			38,462			—			39,512
Labor contract drilling services		—			—			—			—			14,353			—			14,353
Other		—			—			—			—			556			—			556

Total operating revenues		—			85,272			25,867			—			1,719,845			(35,961	)		1,795,023


Operating costs and expenses
Contract drilling services		10,518			27,597			3,648			26			486,082			(35,961	)		491,910
Reimbursables		—			731			—			—			32,633			—			33,364
Labor contract drilling services		—			—			—			—			9,257			—			9,257
Depreciation and amortization		—			16,488			4,712			—			171,201			—			192,401
Selling, general and administrative		6,229			3,021			861			—			28,167			—			38,278
Loss on asset disposal/involuntary conversion		—			—			—			—			28,977			—			28,977

Total operating costs and expenses		16,747			47,837			9,221			26			756,317			(35,961	)		794,187


Operating income (loss)		(16,747	)		37,435			16,646			(26	)		963,528			—			1,000,836

Other income (expense)
Equity earnings in affiliates (net of tax)		836,134			829,964			271,612			504,604			—			(2,442,314	)		—
Interest expense, net of amounts capitalized		(13,904	)		(32,301	)		(9,735	)		(14,938	)		24,268			45,728			(882	)
Interest income and other, net		1,201			—			—			—			46,917			(45,728	)		2,390


Income before income taxes		806,684			835,098			278,523			489,640			1,034,713			(2,442,314	)		1,002,344
Income tax (provision) benefit		383			(1,807	)		(5,434	)		—			(188,419	)		—			(195,277	)

Net income	$	807,067		$	833,291		$	273,089		$	489,640		$	846,294		$	(2,442,314	)	$	807,067

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2008
(in thousands)


													Other
	Noble-			NHC and NDC			Noble						Subsidiaries			Consolidating
	Cayman			Combined			Drilling			NHIL			of Noble			Adjustments			Total
Operating revenues
Contract drilling services	$	—		$	75,805		$	10,702		$	—		$	734,773		$	(38,000	)	$	783,280
Reimbursables		—			406			39			—			20,519			—			20,964
Labor contract drilling services		—			—			—			—			8,218			—			8,218
Other		—			2			1			—			476			—			479

Total operating revenues		—			76,213			10,742			—			763,986			(38,000	)		812,941


Operating costs and expenses
Contract drilling services		6,413			9,427			6,294			5			272,297			(38,000	)		256,436
Reimbursables		—			312			38			—			17,481			—			17,831
Labor contract drilling services		—			—			—			—			6,547			—			6,547
Depreciation and amortization		—			8,521			1,773			—			77,542			—			87,836
Selling, general and administrative		2,496			1,502			461			—			15,208			—			19,667
Gain on asset disposal, net		—			—			—			—			(35,521	)		—			(35,521	)

Total operating costs and expenses		8,909			19,762			8,566			5			353,554			(38,000	)		352,796


Operating income (loss)		(8,909	)		56,451			2,176			(5	)		410,432			—			460,145

Other income (expense)
Equity earnings in affiliates (net of tax)		388,556			331,407			126,112			249,857			—			(1,095,932	)		—
Interest expense, net of amounts capitalized		(6,043	)		(10,209	)		(6,388	)		—			8,950			12,969			(721	)
Interest income and other, net		2,415			—			—			—			12,134			(12,969	)		1,580


Income before income taxes		376,019			377,649			121,900			249,852			431,516			(1,095,932	)		461,004
Income tax (provision) benefit		(301	)		531			(251	)		—			(85,265	)		—			(85,286	)

Net income	$	375,718		$	378,180		$	121,649		$	249,852		$	346,251		$	(1,095,932	)	$	375,718

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2008
(in thousands)


													Other
	Noble-			NHC and NDC			Noble						Subsidiaries			Consolidating
	Cayman			Combined			Drilling			NHIL			of Noble			Adjustments			Total
Operating revenues
Contract drilling services	$	—		$	116,074		$	24,292		$	—		$	1,488,048		$	(47,300	)	$	1,581,114
Reimbursables		—			900			159			—			52,363			—			53,422
Labor contract drilling services		—			—			—			—			39,149			—			39,149
Other		—			2			1			—			678			—			681

Total operating revenues		—			116,976			24,452			—			1,580,238			(47,300	)		1,674,366


Operating costs and expenses
Contract drilling services		12,345			18,481			12,851			14			495,997			(47,300	)		492,388
Reimbursables		—			757			154			—			46,381			—			47,292
Labor contract drilling services		—			—			—			—			31,884			—			31,884
Depreciation and amortization		—			16,129			3,412			—			151,194			—			170,735
Selling, general and administrative		5,204			2,987			921			—			31,828			—			40,940
Gain on asset disposal, net		—			—			—			—			(35,521	)		—			(35,521	)

Total operating costs and expenses		17,549			38,354			17,338			14			721,763			(47,300	)		747,718


Operating income (loss)		(17,549	)		78,622			7,114			(14	)		858,475			—			926,648

Other income (expense)
Equity earnings in affiliates (net of tax)		786,883			703,145			289,652			474,873			—			(2,254,553	)		—
Interest expense, net of amounts capitalized		(13,383	)		(20,546	)		(12,776	)		—			18,142			26,732			(1,831	)
Interest income and other, net		4,351			—			—			—			27,090			(26,732	)		4,709


Income before income taxes		760,302			761,221			283,990			474,859			903,707			(2,254,553	)		929,526
Income tax (provision) benefit		(396	)		4,029			(1,260	)		—			(171,993	)		—			(169,620	)

Net income	$	759,906		$	765,250		$	282,730		$	474,859		$	731,714		$	(2,254,553	)	$	759,906

Subsidiary Cash Flow

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2009
(in thousands)


													Other
	Noble-			NHC and NDC			Noble						Subsidiaries			Consolidating
	Cayman			Combined			Drilling			NHIL			of Noble			Adjustments			Total
Cash flows from operating activities
Net cash from operating activities		(18,692	)		26,291			21,470			(6,151	)		978,319			—			1,001,237


Cash flows from investing activities
New construction and capital expenditures		—			(275,153	)		(12,412	)		—			(306,129	)		—			(593,694	)
Repayments of notes from affiliates		—			—			42,775			—			331,900			(374,675	)		—
Other		—			—			—			—			—			—			—

Net cash from investing activities		—			(275,153	)		30,363			—			25,771			(374,675	)		(593,694	)


Cash flows from financing activities
Payments of other long-term debt		—			—			(150,000	)		—			(22,700	)		—			(172,700	)
Advances (to) from affiliates		398,856			280,575			102,351			6,151			(787,933	)		—			—
Repayments of notes to affiliates		(300,000	)		(31,900	)		—			—			(42,775	)		374,675			—
Repurchases of ordinary shares		(60,867	)		—			—			—			—			—			(60,867	)
Other		(15,886	)		—			—			—			—			—			(15,886	)

Net cash from financing activities		22,103			248,675			(47,649	)		6,151			(853,408	)		374,675			(249,453	)

Net increase (decrease) in cash and cash equivalents		3,411			(187	)		4,184			—			150,682			—			158,090
Cash and cash equivalents, beginning of period		661			445			26			—			512,179			—			513,311

Cash and cash equivalents, end of period	$	4,072		$	258		$	4,210		$	—		$	662,861		$	—		$	671,401

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2008
(in thousands)


													Other
	Noble-			NHC and NDC			Noble						Subsidiaries			Consolidating
	Cayman			Combined			Drilling			NHIL			of Noble			Adjustments			Total
Cash flows from operating activities
Net cash from operating activities		(3,871	)		99,760			5,488			(14	)		834,150			—			935,513


Cash flows from investing activities
New construction and capital expenditures		—			(310,770	)		(3,963	)		—			(227,756	)		—			(542,489	)
Repayments of notes from affiliates		—			—			—			—			(136,740	)		136,740			—
Other		—			—			—			—			60,881			—			60,881

Net cash from investing activities		—			(310,770	)		(3,963	)		—			(303,615	)		136,740			(481,608	)


Cash flows from financing activities
Payments on bank credit facilities		(50,000	)		—			—			—			—			—			(50,000	)
Payments of other long-term debt		—			—			—			—			(5,076	)		—			(5,076	)
Advances (to) from affiliates		258,334			224,480			(1,569	)		9			(481,254	)		—			—
Repayments of notes to affiliates		150,000			(13,260	)		—			—			—			(136,740	)		—
Repurchases of ordinary shares		(26,571	)		—			—			—			—			—			(26,571	)
Other		(212,352	)		—			—			—			—			—			(212,352	)

Net cash from financing activities		119,411			211,220			(1,569	)		9			(486,330	)		(136,740	)		(293,999	)

Net increase (decrease) in cash and cash equivalents		115,540			210			(44	)		(5	)		44,205			—			159,906
Cash and cash equivalents, beginning of period		12,544			—			73			—			148,441			—			161,058

Cash and cash equivalents, end of period	$	128,084		$	210		$	29		$	(5	)	$	192,646		$	—		$	320,964

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is intended to assist you in understanding our financial position at June 30, 2009, and our results of operations for the three and six months ended June 30, 2009 and 2008. The following discussion should be read in conjunction with the consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2008 filed by Noble-Cayman.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this report regarding our financial position, business strategy, backlog, plans and objectives of management for future operations, foreign currency requirements, industry conditions, and indebtedness covenant compliance are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should” and similar expressions are intended to be among the statements that identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to be correct. These forward-looking statements speak only as of the date of this report on Form 10-Q and we undertake no obligation to revise or update any forward-looking statement for any reason, except as required by law. We have identified factors that could cause actual plans or results to differ materially from those included in any forward-looking statements. These factors include those referenced or described in “Item 1A. Risk Factors” of Part II included herein, and in our other filings with the U.S. Securities and Exchange Commission (“SEC”). We cannot control such risk factors and other uncertainties, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. You should consider these risks and uncertainties when you are evaluating us.

Consummation of Migration

On March 26, 2009, pursuant to the previously announced Agreement and Plan of Merger, Reorganization and Consolidation, dated as of December 19, 2008 (as amended, the “Merger Agreement”), among Noble-Swiss, Noble-Cayman, and Noble Cayman Acquisition Ltd., a Cayman Islands company and a wholly-owned subsidiary of Noble-Swiss (“Noble-Acquisition”), Noble-Cayman merged by way of schemes of arrangement under Cayman Islands law (the “Schemes of Arrangement”) with Noble-Acquisition, with Noble-Cayman as the surviving company (the “Transaction”). Under the terms of the Schemes of Arrangement, each holder of Noble-Cayman ordinary shares outstanding immediately prior to the Transaction received, through an exchange agent, one Noble registered share in exchange for each outstanding Noble-Cayman ordinary share, and Noble-Cayman received, through an exchange agent, a number of newly issued Noble-Cayman ordinary shares equal to the number of Noble-Cayman ordinary shares outstanding immediately prior to the Transaction. Noble-Swiss also issued 15 million Noble-Swiss registered shares to Noble-Cayman in connection with the Transaction that are being held in treasury by a wholly owned subsidiary.

The Transaction effectively changed the place of incorporation of our parent holding company from the Cayman Islands to Switzerland. As a result of the Transaction, Noble-Cayman became a direct, wholly-owned subsidiary of Noble-Swiss. Currently, Noble-Swiss’ principal asset is 100% of the shares of common stock of Noble-Cayman. The consolidated financial statements of Noble-Swiss include the accounts of its wholly-owned subsidiary, Noble-Cayman. Noble-Swiss conducts substantially all of its business through Noble-Cayman and its subsidiaries.

In connection with the Transaction, we have also decided to relocate our principal executive offices, including selected officers and their personnel, to Geneva, Switzerland. We currently expect the first phase of this process to be complete during the third quarter of 2009. Our current office in Sugar Land, Texas will continue to be our largest office and the center for much of our primary worldwide operations support functions providing the resources that are needed to run our day-to-day business around the world.

Executive Overview

We are a leading offshore drilling contractor for the oil and gas industry. We perform contract drilling services with our fleet of 62 offshore drilling units located worldwide, including the Middle East, India, the U.S. Gulf of Mexico, Mexico, the North Sea, Brazil, and West Africa. Our fleet count includes four rigs currently under construction.

Economic Outlook

While the global macro environment improved during the second quarter 2009 compared to the previous two quarters, the worldwide economy remains uncertain. Oil prices strengthened during the quarter to reach the $60 to $70 per barrel range; however, prices continue to be volatile. Various economic indicators also continue to be mixed, leading to broad concern about length of the economic recovery. In spite of higher oil prices, we have not seen a substantial increase in demand for offshore drilling services. Demand remains high in the deepwater market segment, but there is little contract activity across the midwater or shallow water segments. In particular, dayrates for jackup units have decreased up to fifty percent in most regions and utilization has dropped significantly. While we believe that the risk for early contract terminations of, or defaults under, existing contracts has decreased, that risk has not been eliminated. We believe the contracting environment will continue to be challenging throughout the remainder of 2009. If the global economy continues to improve and oil prices stabilize, we hope to see increased demand for contract drilling services in 2010. However, due to the introduction of newbuild jackup units into the market, it is possible that dayrates for jackup units may not improve from current levels and could decline further as more units compete for available jobs.

We cannot be certain of the future price of oil or when the global economy will recover. However, we believe that the current reduced demand for hydrocarbons is largely a result of the global financial crisis and that an economic recovery combined with the continued natural decline of worldwide hydrocarbon basins will be positive factors for the demand for future contract drilling services. We continue to believe we are well positioned within the industry. Furthermore, our liquidity and financial strength may create potential rig acquisition opportunities for us.

Demand for our drilling services generally depends on a variety of economic and political factors, including worldwide demand for oil and gas, the ability of the Organization of Petroleum Exporting Countries (“OPEC”) to set and maintain production levels and pricing, the level of production of non-OPEC countries and the policies of various governments regarding exploration and development of their oil and gas reserves. Our results of operations depend on activity in the oil and gas production and development markets worldwide. Historically, oil and gas prices and market expectations of potential changes in these prices have significantly affected that level of activity. Generally, higher oil and natural gas prices or our customers’ expectations of higher prices result in greater demand for our services and lower oil and gas prices result in reduced demand for our services.

Demand for our services is also a function of the worldwide supply of mobile offshore drilling units. Industry sources report that a total of 69 newbuild jackups and 96 deepwater newbuilds are scheduled to enter service worldwide between 2009 and 2012. A significant number of these units, particularly among the jackup units, reportedly do not have a contractual commitment from a customer and are referred to in the offshore drilling industry as “being built on speculation.” The introduction of non-contracted rigs into the marketplace could have an adverse affect on the level of demand for our services or the dayrates we are able to achieve.

We cannot predict the future level of demand for our drilling services or future conditions in the offshore contract drilling industry. Decreases in commodity prices or the level of demand for our drilling services or increases in the supply of drilling rigs in the market could have an adverse effect on our results of operations.

Results and Strategy

In the second quarter of 2009, we recognized net income of $392 million, or $1.49 per diluted share, on total revenues of $899 million. The average dayrate across our worldwide fleet increased to $198,270 for the second quarter of 2009 from $194,308 in the first quarter of 2009. Fleetwide average utilization was 84 percent in the second quarter of 2009, as compared to 86 percent in the first quarter of 2009. Daily contract drilling services costs increased to $57,332 for the second quarter of 2009 from $53,646 for the first quarter of 2009. As a result, our contract drilling services margin decreased slightly to 71 percent in the second quarter of 2009 from 72 percent in the first quarter of 2009.

Our long-standing business strategy continues to be the active expansion of our worldwide offshore drilling and deepwater capabilities through upgrades and modifications, acquisitions, and the deployment of our drilling assets in important geological areas. We have also actively expanded our offshore drilling and deepwater capabilities in recent years through the construction of new rigs. During the second quarter of 2009, we continued our expansion strategy as indicated by the following activities:

•

we completed construction on theNoble Scott Marks,an F&G JU-2000E enhanced premium independent leg cantilevered jackup, which left the shipyard in the second quarter of 2009 and is expected to begin operations in the third quarter of 2009;

•

construction continued on three newbuild ultra-deepwater semisubmersibles, theNoble Danny Adkinsand theNoble Dave Beard, which are scheduled for delivery in the fourth quarter of 2009, and theNoble Jim Day, which is scheduled for delivery in the second quarter of 2010; and

•

construction continued on one dynamically positioned, ultra-deepwater, harsh environmentGlobetrotter-class drillship, which is scheduled to be delivered in the second half of 2011.

Contract Drilling Services Backlog

We maintain a backlog (as defined below) of commitments for contract drilling services. The following table sets forth as of June 30, 2009 the amount of our contract drilling services backlog and the percent of available operating days committed for the periods indicated:


			Year Ending December 31,
	Total		2009 (1)			2010			2011			2012			2013-2017
	(In millions)
Contract Drilling Services
Semisubmersibles/Drillships (2)	$	8,084	$	910		$	1,963		$	1,627		$	1,158		$	2,426
Jackups/Submersibles (3)		1,553		832			551			169			1			—

Total (4) (5)	$	9,637	$	1,742		$	2,514		$	1,796		$	1,159		$	2,426


Percent of Available Operating Days Committed (6)				75	%		42	%		24	%		13	%		7	%


(1)		Represents a six-month period beginning July 1, 2009.

(2)		Our drilling contracts with Petrobras provide an opportunity for us to earn performance bonuses based on downtime experienced for our rigs operating offshore Brazil. With respect to our semisubmersibles operating offshore Brazil, we have included in our backlog an amount equal to 75 percent of potential performance bonuses for such semisubmersibles, which amount is based on and generally 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 any performance bonuses for periods prior to the commencement of certain upgrade projects planned for 2010 and 2011, which projects are designed to enhance the reliability and operational performance of our drillships, and (b) have included in our backlog an amount equal to 75 percent of potential performance bonuses for periods after the estimated completion of such upgrade projects. Our backlog for semisubmersibles/drillships includes approximately $367 million attributable to these performance bonuses.

(3)		Our drilling contracts with Pemex Exploracion y Produccion (“Pemex”) for certain jackups operating offshore in Mexico are subject to price review and adjustment of the rig dayrate. Presently, contracts for five jackups have dayrates indexed to the world average of the highest dayrates published by ODS-Petrodata. After an initial firm dayrate period, the dayrates are generally adjusted quarterly based on formulas calculated from the index. Our contract drilling services backlog has been calculated using the June 30, 2009 index-based dayrates for periods subsequent to the initial firm dayrate period.

(4)		Pemex has the ability to cancel its drilling contracts on 30 days or less notice without Pemex’s making an early termination payment. We currently have 13 rigs contracted to Pemex in Mexico, and our backlog includes approximately $1.0 billion related to such contracts at June 30, 2009. Also, our drilling contracts generally give the customer an early termination right in the event we fail to meet certain performance standards, including downtime thresholds. While we do not currently anticipate any cancellations as a result of events that have occurred to date, clients may from time to time have the contractual right to do so, which is the case with the drilling contract for theNoble Roger Eason. However, we do not believe that the customer will terminate this contract.

(5)		TheNoble Scott Marksmust be provided by September 30, 2009 or our customer has the right to terminate the contract. TheNoble Danny Adkinsmust be delivered from the shipyard by January 1, 2010 or the customer has the right to terminate the contract. The drilling contract for theNoble Jim Daycontains a termination right in the event the rig is not ready to commence operations by December 31, 2010. The drilling contract for theNoble Dave Beardgives the customer the right to terminate the contract if the rig did not commence operations by December 2008 and also gives the customer the right to apply a penalty for delay in delivery beyond October 24, 2009. The customer has not cancelled the contract.

(6)		Percentages take into account additional capacity from the estimated dates of deployment of our newbuild rigs that are scheduled to commence operations during the remainder of 2009 through 2011.

Our contract drilling services backlog consists of commitments we believe to be firm. Our contract drilling services backlog reported above reflects estimated future revenues attributable to both signed drilling contracts and letters of intent. A letter of intent is generally subject to customary conditions, including the execution of a definitive drilling contract. If worldwide economic conditions continue to deteriorate, it is possible that some customers that have entered into letters of intent will not enter into signed drilling contracts. We calculate backlog for any given unit and period by multiplying the full contractual operating dayrate for such unit by the number of days remaining in the period. The reported contract drilling services backlog does not include amounts representing revenues for mobilization, demobilization and contract preparation, which are not expected to be significant to our contract drilling services revenues, reimbursable amounts from customers or amounts attributable to uncommitted option periods under drilling contracts or letters of intent.

The amount of actual revenues earned and the actual periods during which revenues are earned may differ from the backlog amounts and backlog periods set forth in the table above due to various factors, including, but not limited to, shipyard and maintenance projects, unplanned downtime, weather conditions and other factors that result in applicable dayrates lower than the full contractual operating dayrate. In addition, amounts included in the backlog may change because drilling contracts may be varied or modified by mutual consent or customers may exercise early termination rights or decline to enter into a drilling contract after executing a letter of intent. As a result, our backlog as of any particular date may not be indicative of our actual operating results for the subsequent periods for which the backlog is calculated.

Internal Investigation

The independent outside counsel appointed by the audit committee to perform the internal investigation made a presentation of the results of its investigation to the DOJ and the SEC in June 2008. 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 June 30, 2009.

Results of Operations

In the following discussion, we address the consolidated results of operations of Noble-Swiss. With the exception of nominal administrative expenses, the results of operations of Noble-Swiss are substantially identical to those of Noble-Cayman. The discussion related to operating revenues and costs and expenses is identical for, and applies to, both companies. Per share information relates only to Noble-Swiss.

For the Three Months Ended June 30, 2009 and 2008

General

Net income for the three months ended June 30, 2009 (the “Current Quarter”) was $392 million, or $1.49 per diluted share, on operating revenues of $899 million, compared to net income for the three months ended June 30, 2008 (the “Comparable Quarter”) of $376 million, or $1.39 per diluted share, on operating revenues of $813 million.

Rig Utilization, Operating Days and Average Dayrates

Operating revenues and operating costs and expenses for our contract drilling services segment are dependent on three primary metrics — rig utilization, operating days and dayrates. The following table sets forth the average rig utilization, operating days and average dayrates for our rig fleet for the three months ended June 30, 2009 and 2008:


	Average Rig						Operating							Average
	Utilization (1)						Days (2)							Dayrates
	Three Months Ended						Three Months Ended							Three Months Ended
	June 30,						June 30,							June 30,
	2009			2008			2009		2008		% Change			2009		2008		% Change

Jackups		80	%		93	%		3,076		3,481		-12	%	$	157,381	$	147,081		7	%
Semisubmersibles > 6000’ (3)		94	%		90	%		596		572		4	%		408,510		323,830		26	%
Semisubmersibles < 6000’ (4)		100	%		100	%		273		273		0	%		251,945		192,416		31	%
Drillships		100	%		67	%		273		182		50	%		226,187		131,174		72	%
Submersibles (5)		88	%		67	%		161		182		-12	%		63,324		53,039		19	%


Total		84	%		90	%		4,379		4,690		-7	%	$	198,270	$	167,002		19	%


(1)		Information reflects our policy of reporting on the basis of the number of actively marketed rigs in our fleet excluding newbuild rigs under construction.

(2)		Information reflects the number of days that our rigs were operating under contract.

(3)		These units have water depth ratings of 6,000 feet or greater.

(4)		These units have water depth ratings of less than 6,000 feet.

(5)		Effective March 31, 2009, theNoble Fri Rodli,which had been cold stacked since October 2007, was removed from our rig fleet.

Contract Drilling Services

The following table sets forth the operating revenues and the operating costs and expenses for our contract drilling services segment for the three months ended June 30, 2009 and 2008:


	Three Months Ended
	June 30,				Change
	2009		2008		$			%
Operating revenues:
Contract drilling services	$	868,205	$	783,280	$	84,925			11	%
Reimbursables (1)		22,295		19,646		2,649			13	%
Other		414		464		(50	)		-11	%

	$	890,914	$	803,390	$	87,524			11	%


Operating costs and expenses:
Contract drilling services	$	251,054	$	256,436		(5,382	)		-2	%
Reimbursables (1)		18,754		16,565		2,189			13	%
Depreciation and amortization		96,952		86,636		10,316			12	%
Selling, general and administrative		21,411		19,526		1,885			10	%
Loss on involuntary conversion		16,943		—		16,943			n/a

		405,114		379,163		25,951			7	%

Operating income	$	485,800	$	424,227	$	61,573			15	%


(1)		We record reimbursements from customers for out-of-pocket expenses as revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations or cash flows.

Operating Revenues.Contract drilling services revenue increases for the Current Quarter as compared to the Comparable Quarter were primarily driven by increases in average dayrates. Higher average dayrates increased revenues approximately $147 million, while fewer operating days reduced revenues approximately $62 million.

Average dayrates increased 19 percent in the Current Quarter as compared to the Comparable Quarter as we received higher average dayrates across all rig categories.

The decrease in operating days in the Current Quarter as compared to the Comparable Quarter was primarily due to downtime of certain rigs in the Current Quarter. Unpaid shipyard days increased 168 days in the Current Quarter as compared to the Comparable Quarter, as we had 10 rigs spend time in the shipyard during the Current Quarter. We had only six rigs with unpaid shipyard days in the Comparable Quarter. Additionally, stacked days increased 149 days as theNoble Dick Favor, Noble Don Walker, Noble Lloyd NobleandNoble Tommy Craigheadeach were stacked for certain periods during the Current Quarter. In the Comparable Quarter, three rigs, theNoble Fri Rodli, Noble Carl Norbergand theNoble Don Walker, spent a significant number of days stacked. The decrease in operating days in the Current Quarter was partially offset by an increase in available days of 97 days for the enhanced premium jackups theNoble Scott Marksand theNoble Hans Deul, which were added to the fleet in November 2008 and June 2009, respectively. Additionally, the Current Quarter had 91 less available operating days than the Comparable Quarter due to theNoble Fri Rodlibeing removed from our rig fleet effective March 31, 2009.

Operating Costs and Expenses.Contract drilling services operating costs and expenses decreased $5 million for the Current Quarter over the Comparable Quarter. Our newbuild rigs, theNoble Hans Deuland theNoble Scott Marks, which were added to the fleet in November 2008 and June 2009, respectively, added approximately $4 million of operating costs in the Current Quarter. Excluding the additional expenses related to our newbuild rigs, our contract drilling costs decreased $9 million in the Current Quarter from the Comparable Quarter. This change was primarily driven by a $13 million decrease in local labor costs due to the increased number of rigs stacked during the Current Quarter and a $5 million decrease in insurance costs from our new insurance program under which we are predominately self-insured. These decreases were partially offset by a $5 million increase in miscellaneous transportation and fuel costs and a $3 million increase in maintenance expenses.

The increase in depreciation and amortization in the Current Quarter over the Comparable Quarter was primarily due to depreciation on newbuilds added to the fleet and additional depreciation related to other capital expenditures on our fleet since the Comparable Quarter.

Loss on involuntary conversion during the Current Quarter relates to a charge of $17 million for our jackup, theNoble David Tinsley, which experienced a “punch-through” while being positioned on location offshore Qatar. The $17 million charge includes approximately $9 million for the write-off of the damaged legs and $8 million for non-reimbursable expenses.

Other

The following table sets forth the operating revenues and the operating costs and expenses for our other services for the three months ended June 30, 2009 and 2008:


	Three Months Ended
	June 30,					Change
	2009		2008			$			%
Operating revenues:
Labor contract drilling services	$	7,419	$	8,218		$	(799	)		-10	%
Reimbursables (1)		539		1,318			(779	)		-59	%
Other		—		15			(15	)		-100	%

	$	7,958	$	9,551		$	(1,593	)		-17	%


Operating costs and expenses:
Labor contract drilling services	$	4,881	$	6,547			(1,666	)		-25	%
Reimbursables (1)		527		1,266			(739	)		-58	%
Depreciation and amortization		2,465		1,200			1,265			105	%
Selling, general and administrative		73		141			(68	)		-48	%
Gain on asset disposal, net		—		(35,521	)		35,521			-100	%

		7,946		(26,367	)		34,313			-130	%

Operating income	$	12	$	35,918		$	(35,906	)		-100	%


(1)		We record reimbursements from customers for out-of-pocket expenses as revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations or cash flows.

Operating Revenues and Costs and Expenses.Revenues and expenses associated with our Canadian labor contract drilling services decreased in the Current Quarter primarily due to fluctuations in foreign currency exchange rates. Additionally, expenses during the Comparable Quarter included approximately $1 million in costs associated with our return of the jackupNoble Kolskaya, which was operated under a bareboat charter, to its owner.

Other Income and Expenses

Selling, General and Administrative Expenses.Consolidated selling, general and administrative expenses increased $2 million in the Current Quarter as compared to the Comparable Quarter. The increase between periods resulted primarily from $2 million in costs related to our recent re-domestication from the Cayman Islands to Switzerland, a $2 million increase in employee-related costs and a $2 million increase in other general and administrative costs. These increases were partially offset by a $4 million reduction in costs incurred in the internal investigation of our Nigerian operations.

Gain on Asset Disposal, net.Gain on asset disposal, net, for the Comparable Quarter relates to the sale of our North Sea labor contract drilling services business in April 2008. 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.

Income Tax Provision.The income tax provision increased $10 million in the Current Quarter primarily due to higher pre-tax earnings in the Current Quarter over the Comparable Quarter. The higher pre-tax earnings increased income tax expense by $5 million, in addition to a higher effective tax rate, 19.5 percent in the Current Quarter compared to 18.5 percent in the Comparable Quarter, which increased income tax expense by $5 million. The higher effective tax rate in the Current Quarter resulted from higher pre-tax earnings of U.S. owned assets, which generally have a higher statutory tax rate and lower pre-tax earnings of non-U.S. owned assets, which generally have a lower statutory tax rate.

For the Six Months Ended June 30, 2009 and 2008

General

Net income for the six months ended June 30, 2009 (the “Current Period”) was $806 million, or $3.08 per diluted share, on operating revenues of $1.8 billion, compared to net income for the six months ended June 30, 2008 (the “Comparable Period”) of $760 million, or $2.81 per diluted share, on operating revenues of $1.7 billion.

Rig Utilization, Operating Days and Average Dayrates


	Average Rig						Operating							Average
	Utilization (1)						Days (2)							Dayrates
	Six Months Ended						Six Months Ended							Six Months Ended
	June 30,						June 30,							June 30,
	2009			2008			2009		2008		% Change			2009		2008		% Change

Jackups		83	%		95	%		6,319		7,082		-11	%	$	157,882	$	146,195		8	%
Semisubmersibles > 6000’ (3)		97	%		95	%		1,226		1,209		1	%		388,709		307,019		27	%
Semisubmersibles < 6000’ (4)		100	%		100	%		543		546		-1	%		249,048		197,057		26	%
Drillships		81	%		67	%		440		364		21	%		251,182		132,420		90	%
Submersibles (5)		75	%		66	%		341		361		-6	%		60,749		52,164		16	%


Total		85	%		92	%		8,869		9,562		-7	%	$	196,263	$	165,356		19	%


(1)		Information reflects our policy of reporting on the basis of the number of actively marketed rigs in our fleet excluding newbuild rigs under construction.

(2)		Information reflects the number of days that our rigs were operating under contract.

(3)		These units have water depth ratings of 6,000 feet or greater.

(4)		These units have water depth ratings of less than 6,000 feet.

(5)		Effective March 31, 2009, theNoble Fri Rodli,which had been cold stacked since October 2007, was removed from our rig fleet.

Contract Drilling Services

The following table sets forth the operating revenues and the operating costs and expenses for our contract drilling services segment for the six months ended June 30, 2009 and 2008:


	Six Months Ended
	June 30,				Change
	2009		2008		$			%
Operating revenues:
Contract drilling services	$	1,740,602	$	1,581,114	$	159,488			10	%
Reimbursables (1)		38,451		40,812		(2,361	)		-6	%
Other		541		651		(110	)		-17	%

	$	1,779,594	$	1,622,577	$	157,017			10	%


Operating costs and expenses:
Contract drilling services	$	491,910	$	492,388		(478	)		0	%
Reimbursables (1)		32,343		35,318		(2,975	)		-8	%
Depreciation and amortization		187,850		167,421		20,429			12	%
Selling, general and administrative		39,078		39,422		(344	)		-1	%
Loss on asset disposal/involuntary conversion		28,977		—		28,977			n/a

		780,158		734,549		45,609			6	%

Operating income	$	999,436	$	888,028	$	111,408			13	%

(1)

We record reimbursements from customers for out-of-pocket expenses as revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations or cash flows.

Operating Revenues.Contract drilling services revenue increases for the Current Period as compared to the Comparable Period were primarily driven by increases in average dayrates. Higher average dayrates increased revenues approximately $295 million, while fewer operating days reduced revenues approximately $136 million.

Average dayrates increased 19 percent in the Current Period as compared to the Comparable Period as we received higher average dayrates across all rig categories.

The decrease in operating days in the Current Period as compared to the Comparable Period was primarily due to downtime of certain rigs in the Current Period. Unpaid shipyard days increased 393 days in the Current Period as compared to the Comparable Period, as we had 16 rigs spend time in the shipyard during the Current Period. We had only seven rigs with unpaid shipyard days in the Comparable Period. Additionally, stacked days increased 342 days as theNoble Fri Rodli, Noble Dick Favor, Noble Don Walker, Noble Lloyd NobleandNoble Tommy Craigheadeach were stacked for certain periods during the Current Period. In the Comparable Period, three rigs, theNoble Fri Rodli, Noble Carl Norbergand theNoble Don Walkerspent a significant number of days stacked.The decrease in operating days in the Current Period was partially offset by an increase in available days of 187 days for the enhanced premium jackups theNoble Scott Marksand theNoble Hans Deul, which were added to the fleet in November 2008 and June 2009, respectively. The Current Period also had 91 less available days than the Comparable Period due to theNoble Fri Rodlibeing removed from our rig fleet effective March 31, 2009. Additionally, the Current Period had one less available operating day than the Comparable Period due to the leap year in 2008, which reduced available days in the Current Period by 54 days.

Operating Costs and Expenses.Contract drilling services operating costs and expenses decreased slightly in the Current Period as compared to the Comparable Period. Our newbuild rigs, theNoble Hans Deuland theNoble Scott Marks, which were added to the fleet in November 2008 and June 2009, respectively, added approximately $8 million of operating costs in the Current Period. Excluding the additional expenses related to our newbuild rigs, our contract drilling costs decreased $8 million in the Current Period from the Comparable Period. This change was primarily driven by a $22 million decrease in local labor costs due to the increased number of rigs stacked during the Current Period and an $8 million decrease in insurance costs from our new insurance program under which we are predominately self-insured. These decreases were partially offset by a $10 million increase in maintenance expenses, a $6 million increase in miscellaneous transportation and fuel costs and a $6 million increase in mobilization costs.

The increase in depreciation and amortization in the Current Period over the Comparable Period was primarily due to depreciation on newbuilds added to the fleet and additional depreciation related to other capital expenditures on our fleet since the Comparable Period.

Loss on asset disposal/involuntary conversion during the Current Period includes a charge of $17 million for our jackup, theNoble David Tinsley, which experienced a “punch-through” while being positioned on location offshore Qatar. The $17 million charge includes approximately $9 million for the write-off of the damaged legs and $8 million for non-reimbursable expenses. Also, during the Current Period, we recorded a charge of $12 million for theNoble Fri Rodli, as a result of a decision to evaluate disposition alternatives for this submersible drilling unit.

Other

The following table sets forth the operating revenues and the operating costs and expenses for our other services for the six months ended June 30, 2009 and 2008:


	Six Months Ended
	June 30,					Change
	2009		2008			$			%
Operating revenues:
Labor contract drilling services	$	14,353	$	39,149		$	(24,796	)		-63	%
Reimbursables (1)		1,061		12,610			(11,549	)		-92	%
Other		15		30			(15	)		-50	%

	$	15,429	$	51,789		$	(36,360	)		-70	%


Operating costs and expenses:
Labor contract drilling services	$	9,257	$	31,884			(22,627	)		-71	%
Reimbursables (1)		1,021		11,974			(10,953	)		-91	%
Depreciation and amortization		4,551		3,314			1,237			37	%
Selling, general and administrative		123		1,518			(1,395	)		-92	%
Gain on asset disposal, net		—		(35,521	)		35,521			-100	%

		14,952		13,169			1,783			14	%

Operating income	$	477	$	38,620		$	(38,143	)		-99	%


(1)		We record reimbursements from customers for out-of-pocket expenses as revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations or cash flows.

Operating Revenues.Our labor contract drilling services revenues decreased in the Current Period primarily due to the sale of our North Sea labor contract drilling services business in April 2008. Additionally, during the Comparable Period, we returned the jackupNoble Kolskaya, which was operated under a bareboat charter, to its owner. The drilling contract for theNoble Kolskayahad been terminated and the jackup had been warm stacked since February 2008. Revenues during the Comparable Period related to our North Sea labor contract drilling services business andNoble Kolskayawere $22 million. Revenues associated with our Canadian labor contracts decreased $3 million from the Comparable Period due to a reduction in the number of rigs we operated under labor contracts and fluctuations in foreign currency exchange rates.

Operating Costs and Expenses.Labor contract drilling services costs and expenses decreased due to the sale of our North Sea labor contract drilling services business and the return of theNoble Kolskayato its owner in 2008. Expenses during the Comparable Period related to our North Sea labor contract drilling services business andNoble Kolskayawere $19 million. Operating costs associated with our Canadian labor contracts decreased $3 million from the Comparable Period due to a reduction in the number of rigs we are operating under labor contracts and fluctuations in foreign currency exchange rates.

Other Income and Expenses

Selling, General and Administrative Expenses.Consolidated selling, general and administrative expenses decreased $2 million in the Current Period as compared to the Comparable Period. The decrease between periods resulted primarily from an $11 million reduction in costs incurred in the internal investigation of our Nigerian operations. This decrease was partially offset by $5 million in costs related to our recent re-domestication from the Cayman Islands to Switzerland and increases in employee-related costs totaling $4 million.

Gain on Asset Disposal, net.Gain on asset disposal, net, for the Comparable Period relates to the sale of our North Sea labor contract drilling services business in April 2008. 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.

Interest Expense.Interest expense, net of amount capitalized decreased $1 million primarily due to lower debt levels in the Current Period than in the Comparable Period. Capitalized interest was $29 million for the Current Period as compared to $24 million for the Comparable Period.

Interest Income and Other, net.Interest income and other, net decreased $2 million in the Current Period from the Comparable Period primarily due to foreign currency exchange rate adjustments and lower yields on cash investments during the Current Period partially offset by higher average cash balances.

Income Tax Provision.The income tax provision increased $26 million primarily due to higher pre-tax earnings in the Current Period over the Comparable Period. The higher pre-tax earnings increased income tax expense by $13 million, in addition to a higher effective tax rate, 19.5 percent in the Current Period compared to 18.2 percent in the Comparable Period, which increased income tax expense by $13 million. The higher effective tax rate in the Current Period resulted from higher pre-tax earnings of U.S. owned assets, which generally have a higher statutory tax rate and lower pre-tax earnings of non-U.S. owned assets, which generally have a lower statutory tax rate.

Liquidity and Capital Resources

Overview

Our principal capital resource in the Current Period was net cash from operating activities of $998 million, which compared to $936 million in the Comparable Period. The increase in net cash from operating activities in the Current Period was primarily attributable to higher net income. At June 30, 2009, we had cash and cash equivalents of $671 million and $600 million available under our bank credit facility described under “Credit Facility and Long-Term Debt” below. We had working capital of $1.0 billion and $561 million at June 30, 2009 and December 31, 2008, respectively. Total debt as a percentage of total debt plus shareholders’ equity was 11.0 percent at June 30, 2009 and 14.9 percent at December 31, 2008. Additionally, at June 30, 2009, we had a total contract drilling services backlog of approximately $9.6 billion. Our backlog reflects a commitment of 74 percent of operating days for the remainder of 2009 and 41 percent for 2010. See additional information regarding our backlog at “Contract Drilling Services Backlog.”

As a result of the cash generated by our operations, our cash on hand and the availability under our bank credit facility, we believe our liquidity and financial condition are sufficient to meet all of our reasonably anticipated cash flow needs for the remainder of 2009 including:

•

normal recurring operating expenses;

•

capital expenditures, including new construction and other expenditures;

•

repurchase of, and distributions on, our shares; and

•

contributions to our pension plans.

The recent worldwide financial and credit crisis has reduced the availability of capital and credit to fund the continuation and expansion of industrial business operations worldwide and could impact our liquidity and financial condition in the future. It may be difficult or more expensive for us to access the capital markets or borrow money at a time when we would like, or need, to access capital, which could have an adverse impact on our ability to react to changing economic and business conditions, and to fund our operations and capital expenditures and to make acquisitions.

Capital Expenditures

Our primary capital requirement in 2009 will be for capital expenditures. Capital expenditures totaled $526 million and $525 million for the six months ended June 30, 2009 and 2008, respectively.

At June 30, 2009, we had four rigs under construction, and capital expenditures for new construction in the Current Period totaled $275 million. Capital expenditures for newbuild rigs in the Current Period included $75 million for theNoble Danny Adkins, $81 million for theNoble Jim Day,$48 million for theNoble Dave Beardand $29 million for ourGlobetrotter-class drillship. Additionally, new construction capital expenditures for the Current Period included $42 million for our remaining newbuilds, which includes the recently completedNoble Scott MarksandNoble Hans Deul. Other capital expenditures totaled $193 million in the Current Period, which included approximately $40 million for major upgrade projects. Capitalized major maintenance expenditures, which typically occur every 3 to 5 years, totaled $58 million in the Current Period.

Our total capital expenditure budget for 2009 is approximately $1.3 billion. In connection with our 2009 and future capital expenditure programs, as of June 30, 2009, we had outstanding commitments, including shipyard and purchase commitments, for approximately $1.1 billion. Our remaining 2009 capital expenditure budget will generally be spent at our discretion. We may accelerate or delay capital projects as needed.

From time to time we consider possible projects that would require capital expenditures or other cash expenditures that are not included in our capital budget, and such unbudgeted capital or cash expenditures could be significant. In addition, we will continue to evaluate acquisitions of drilling units from time to time. Other factors that could cause actual capital expenditures to materially exceed planned capital expenditures include delays and cost overruns in shipyards (including costs attributable to labor shortages), shortages of equipment, latent damage or deterioration to hull, equipment and machinery in excess of engineering estimates and assumptions, and changes in design criteria or specifications during repair or construction.

Ordinary Share Repurchases and Dividends

Prior to the Transaction, the Board of Directors of Noble-Cayman authorized and adopted a share repurchase program, and Noble-Swiss has adopted this program. At June 30, 2009, 16.6 million registered shares remained available under this authorization. Share repurchases for the six months ended June 30, 2009 totaled 1.7 million shares and were repurchased in open market transactions for approximately $43 million. Future repurchases by Noble-Swiss will be subject to the requirements of Swiss law, including the requirement that Noble-Swiss and its subsidiaries may only repurchase shares if and to the extent that sufficient freely distributable reserves are available. Also, the aggregate par value of all Noble-Swiss registered shares held by Noble-Swiss and its subsidiaries, including treasury shares, may not exceed 10 percent of Noble-Swiss’ registered share capital without shareholder approval.

The declaration and payment of dividends in the future will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual restrictions and other factors deemed relevant by our Board of Directors, and must be approved in advance by our shareholders. We have proposed, and our shareholders have approved, to effect distributions on Noble-Swiss shares through a reduction in par value, which could affect the timing of the distribution payments. We may propose additional distributions in the future.

Contributions to Pension Plans

In August 2006, U.S. President Bush signed into law the Pension Protection Act of 2006 (“PPA”). The PPA requires that pension plans fund towards a target of at least 100 percent with a transition through 2011 and increases the amount we are allowed to contribute to our U.S. pension plans in the near term. During the six months ended June 30, 2009 and 2008, we made contributions to our pension plans totaling $1 million and $17 million, respectively. We expect the minimum aggregate contributions to our non-U.S. and U.S. plans in 2009, subject to applicable law, to be $6 million. We continue to monitor and evaluate funding options based upon market conditions and may increase contributions at our discretion.

Credit Facility and Long-Term Debt

The Credit Facility provides us with the ability to issue up to $150 million in letters of credit. While the issuance of letters of credit does not increase our borrowings outstanding, it does reduce the amount available. At June 30, 2009, we had no borrowing or letters of credit outstanding under the Credit Facility. We believe that we maintain good relationships with our lenders under the Credit Facility, and we believe that our lenders have the liquidity and capability to perform should the need arise for us to draw on the Credit Facility.

The indentures governing our outstanding senior unsecured notes contain covenants that place restrictions on certain merger and consolidation transactions, unless we are the surviving entity or the other party assumes the obligations under the indenture, and on the ability to sell or transfer all or substantially all of our assets. In addition, there are restrictions on incurring or assuming certain liens and sale and lease-back transactions. At June 30, 2009, we were in compliance with all our debt covenants. We continually monitor compliance with the covenants under our notes and, based on our expectations for the remainder of 2009, expect to remain in compliance during the year.

At June 30, 2009, we had letters of credit of $89 million and performance and tax assessment bonds totaling $301 million supported by surety bonds outstanding. Of the letters of credit outstanding, $47 million were issued to support bank bonds in connection with our drilling units in Nigeria. Additionally, certain of our subsidiaries issue, from time to time, guarantees of the temporary import status of rigs or equipment imported into certain countries in which we operate. These guarantees are issued in lieu of payment of custom, value added or similar taxes in those countries.

Our debt decreased to $751 million at June 30, 2009 from $923 million (including current maturities of $173 million) at December 31, 2008, primarily due to the repayment of $173 million principal amount of maturing notes during the first quarter of 2009. Repayments of maturing notes were made with cash on hand at maturity. Other than our outstanding letters of credit and surety bonds discussed above, at June 30, 2009, we had no other off-balance sheet debt or other off-balance sheet arrangements. For additional information on our long-term debt, see Note 5 to our accompanying consolidated financial statements.

New Accounting Pronouncements

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments,”which requires disclosures about fair value of financial instruments for interim reporting periods. This guidance is effective for interim reporting periods ending after June 15, 2009 and applies to our disclosures beginning with our second fiscal quarter of 2009. Our adoption of this FSP did not have a material impact on our financial condition or results of operations.

In June 2009, the FASB issued the following:

•

We do not expect our adoption of these new accounting pronouncements will have a material impact on our financial condition or results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential for loss due to a change in the value of a financial instrument as a result of fluctuations in interest rates, currency exchange rates or equity prices, as further described below.

Interest Rate Risk

We are subject to market risk exposure related to changes in interest rates on borrowings under the Credit Facility. Interest on borrowings under the Credit Facility is at an agreed upon percentage point spread over LIBOR, or a base rate stated in the agreement. At June 30, 2009, we had no amounts outstanding under the Credit Facility.

Foreign Currency Risk

Although we conduct business globally, a substantial majority of the value of our foreign transactions are denominated in U.S. Dollars. With certain exceptions, typically involving national oil companies, we structure our drilling contracts entirely in U.S. Dollars to mitigate our exposure to fluctuations in foreign currencies. Other than trade accounts receivable and trade accounts payable, which mostly offset one another, we do not currently have material amounts of assets, liabilities, or financial instruments that are sensitive to foreign currency exchange rates.

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 Euro and British Pounds. The Euro-denominated forward currency contracts settling in the remainder of 2009 represent approximately 61 percent of our forecasted Euro requirements. The British Pound-denominated forward contracts settling in the remainder of 2009 represent approximately 61 percent of our forecasted British Pound requirements. The notional amount of forward contracts outstanding at June 30, 2009 was approximately 11 million Euros and 20 million British Pounds. The aggregate notional amount of these forward contracts, expressed in U.S. Dollars, was $45 million at June 30, 2009. The fair market value of these outstanding forward contracts was $3 million at June 30, 2009. A ten percent change in exchange rates for the Euro and British Pound would change the fair value of these forward contracts by approximately $5 million.

We have 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. Our payment obligation 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 June 30, 2009, the aggregate notional amount of the remaining forward contracts was 70 million Euros. Each forward contract settles in connection with required payments under 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 million at June 30, 2009. A ten percent change in exchange rates for the Euro would change the fair value of these forward contracts by approximately $10 million.

Market Risk

We sponsor the Noble Drilling Corporation 401(k) Savings Restoration Plan (“Restoration Plan”). The Restoration Plan is a nonqualified, unfunded employee benefit plan under which certain highly compensated employees may elect to defer compensation in excess of amounts deferrable under our 401(k) savings plan. The Restoration Plan has no assets, and amounts withheld for 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 withheld 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 June 30, 2009, our liability under the Restoration Plan totaled $7 million. During 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 $7 million at June 30, 2009. A ten percent change in the fair value of the phantom investments would change our liability by approximately $1 million. Any change in the fair value of the phantom investments would be mitigated by a change in the investments held for our benefit.

Item 4. Controls and Procedures

Our Chairman, President and Chief Executive Officer, David W. Williams, and Senior Vice President, Chief Financial Officer, Treasurer and Controller, Thomas L. Mitchell, have evaluated the disclosure controls and procedures for each of Noble-Swiss and Noble-Cayman as of the end of the period covered by this report. On the basis of this evaluation, Mr. Williams and Mr. Mitchell have concluded that the disclosure controls and procedures for each of Noble-Swiss and Noble-Cayman were effective as of June 30, 2009. These disclosure controls and procedures are designed to ensure that information required to be disclosed by each of Noble-Swiss and Noble-Cayman in the reports that they file with or submit to the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

There was no change in either Noble-Swiss’ or Noble-Cayman’s internal control over financial reporting that occurred during the quarter ended June 30, 2009 that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of each of Noble-Swiss or Noble-Cayman.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding legal proceedings is set forth in Note 10 to our consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes from the risk factors as previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2008 filed by Noble-Cayman in response to Item 1A of Part I of Form 10-K and in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 filed by Noble-Swiss and Noble-Cayman in response to Item 1A of Part II of Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth for the periods indicated certain information with respect to purchases by Noble-Swiss of shares:

Total Number of

Maximum Number

Shares Purchased

of Shares that May

Total Number

Average

as Part of Publicly

Yet Be Purchased

of Shares

Price Paid

Announced Plans

Under the Plans

Period

Purchased

per Share

or Programs

or Programs (1)

April 2009

—

n/a

—

16,619,891

May 2009

483

(2)

27.89

(2)

—

16,619,891

June 2009

—

n/a

—

16,619,891


(1)		All share purchases have been made in the open market and were pursuant to the share repurchase program which our Board of Directors authorized and adopted and that we announced on January 31, 2002. Our repurchase program has no date of expiration.

(2)		Includes 483 registered shares at an average price of $27.89 per share acquired by surrender to us by employees for withholding taxes payable upon the vesting of restricted stock.

ITEM 4. Submission of Matters to a Vote of Security Holders

	(a)		The general meeting of shareholders of Noble-Swiss was held on May 28, 2009.

	(b)		Proxies were solicited by the board of directors of Noble-Swiss 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, Julie H. Edwards, Marc E. Leland and David W. Williams, each an incumbent director, and they were duly re-elected. The terms of Michael A. Cawley, Jack E. Little, Lawrence J. Chazen and Mary P. Ricciardello, each an incumbent director, continued following the annual general meeting.

	(c)		Out of a total of 261,249,501 registered shares of Noble-Swiss outstanding and entitled to vote at the meeting, 188,426,950 shares were present in person or by proxy, representing a majority of the outstanding shares. Four matters, as fully described in the proxy statement for the general meeting, were voted on by shareholders.

			The first matter voted on was the approval for the payment of a dividend through a reduction of the par value of the shares in an aggregate amount of Swiss francs 0.25 per share. The results of the voting on this proposal were as follows:


For:		187,564,441		Against:		608,735		Abstain:		253,774

The second matter voted on was the election of three directors to serve three-year terms on the board of directors of Noble-Swiss. The results of voting were as follows:


			Number of Shares
			WITHHOLDING
	Number of Shares		AUTHORITY
	Voting FOR		to Vote for
Nominee for Re-election	Re-election as		Re-election as
as Director	Director		Director
Julie H. Edwards		186,580,424		1,846,526
Marc E. Leland		185,719,142		2,707,808
David W. Williams		185,861,632		2,565,318

The third matter voted on was the approval of the appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm for 2009. The results of the voting on this proposal were as follows:


For:		165,164,737		Against:		23,051,503		Abstain:		210,710

The fourth matter voted on was the approval to amend Article 21 paragraph 1(d) of the Articles of Association in order to limit the changes to authorized and conditional capital that require approval of at least two-thirds of the shares represented at a general meeting to an increase in the amount of the authorized or conditional share capital. The results of the voting on this proposal were as follows:


For:		150,444,874		Against:		863,849		Abstain:		190,878

(d) Inapplicable.

Item 6. Exhibits

The information required by this Item 6 is set forth in the Index to Exhibits accompanying this Quarterly Report on Form 10-Q and is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Noble Corporation, a Swiss corporation

/s/ David W. Williams David W. Williams		August 7, 2009 Date
Chairman, President and Chief Executive Officer (Principal Executive Officer)

/s/ Thomas L. Mitchell Thomas L. Mitchell
Senior Vice President, Chief Financial Officer, Treasurer and Controller (Principal Financial and Accounting Officer)

Noble Corporation, a Cayman Islands company

/s/ David W. Williams		August 7, 2009

David W. Williams President and Chief Executive Officer (Principal Executive Officer)		Date

/s/ Thomas L. Mitchell Thomas L. Mitchell Senior Vice President, Chief Financial Officer, Treasurer and Controller (Principal Financial and Accounting Officer)

Index to Exhibits


Exhibit
Number		Exhibit

	2.1	Agreement and Plan of Merger, Reorganization and Consolidation, dated as of December 19, 2008, among Noble Corporation, a Swiss corporation (“Noble-Swiss”), Noble Corporation, a Cayman Islands company (“Noble-Cayman”), and Noble Cayman Acquisition Ltd. (filed as Exhibit 1.1 to Noble-Cayman’s Current Report on Form 8-K filed on December 22, 2008 and incorporated herein by reference).

	2.2	Amendment No. 1 to Agreement and Plan of Merger, Reorganization and Consolidation, dated as of February 4, 2009, among Noble-Swiss, Noble-Cayman and Noble Cayman Acquisition Ltd. (filed as Exhibit 2.2 to Noble-Cayman’s Current Report on Form 8-K filed on February 4, 2009 and incorporated herein by reference).

	3.1	Articles of Association of Noble-Swiss (filed as Exhibit 3.1 to the Noble-Swiss’ Current Report on Form 8-K filed on March 27, 2009 and incorporated herein by reference).

	3.2	By-laws of Noble-Swiss (filed as Exhibit 3.2 to Noble-Swiss’ Current Report on Form 8-K filed on March 27, 2009 and incorporated herein by reference).

	3.3	Memorandum and Articles of Association of Noble-Cayman (filed as Exhibit 3.1 to Noble-Cayman’s Current Report on Form 8-K filed on March 30, 2009 and incorporated herein by reference).

	4.1	Form of Limited Consent of Noble-Cayman (filed as Exhibit 1.1 to Noble-Cayman’s Current Report on Form 8-K filed on January 21, 2009 and incorporated herein by reference).

	10.1*	Noble Corporation 2009 Short Term Incentive Plan

	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), for Noble-Swiss and for Noble-Cayman.

	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), for Noble-Swiss and for Noble-Cayman.

	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, for Noble-Swiss and for Noble-Cayman.

	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, for Noble-Swiss and for Noble-Cayman.

	101+	Interactive Data File


*		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.

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Noble (NE) 10-Q2009 Q2 Quarterly report

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