UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: September 30, ~~2012~~2013

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

For the transition period fromto

Commission file number: 000-53604

NOBLE CORPORATION

(Exact name of registrant as specified in its charter)

Switzerland

98-0619597

(State or other jurisdiction of

incorporation or organization)

(I.R.S. employer

identification number)

Dorfstrasse 19A, Baar, Switzerland 6340

(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: 41 (41) 761-65-55

Commission file number: 001-31306

NOBLE CORPORATION

(Exact name of registrant as specified in its charter)

Cayman Islands

98-0366361

(State or other jurisdiction of

incorporation or organization)

(I.R.S. employer

identification number)

Suite 3D, Landmark Square, 64 Earth Close, P.O. Box 31327 ~~George Town,~~Georgetown, Grand Cayman, Cayman Islands, ~~KY1-1206~~BWI, KY-1 1206

(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (345) 938-0293

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. Yes x No ¨

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). Yes x No ¨

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):


Noble-Swiss:	Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
Noble-Cayman:	Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company ¨

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

Number of shares outstanding and trading at October 31, ~~2012:~~2013: Noble Corporation (Switzerland) — ~~252,720,353~~253,407,310

Number of shares outstanding at October 31, ~~2012:~~2013: 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) to Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format contemplated by paragraphs (b) and (c) of General Instruction H(2) of Form 10-Q.

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements
	Noble Corporation (Noble-Swiss) Financial Statements:
	Consolidated Balance ~~Sheet~~Sheets as of September 30, ~~2012~~2013 and December 31, ~~2011~~2012		3
	Consolidated ~~Statement~~Statements of Income for the three and nine months ended September 30, ~~2012~~2013 and ~~2011~~2012		4
	Consolidated ~~Statement~~Statements of Comprehensive Income for the three and nine months ended September 30, ~~2012~~2013 and ~~2011~~2012		5
	Consolidated ~~Statement~~Statements of Cash Flows for the nine months ended September 30, ~~2012~~2013 and ~~2011~~2012		6
	Consolidated ~~Statement~~Statements of Equity for the nine months ended September 30, ~~2012~~2013 and ~~2011~~2012		7

	Noble Corporation (Noble-Cayman) Financial Statements:
	Consolidated Balance ~~Sheet~~Sheets as of September 30, ~~2012~~2013 and December 31, ~~2011~~2012		8
	Consolidated ~~Statement~~Statements of Income for the three and nine months ended September 30, ~~2012~~2013 and ~~2011~~2012		9
	Consolidated ~~Statement~~Statements of Comprehensive Income for the three and nine months ended September 30, ~~2012~~2013 and ~~2011~~2012		10
	Consolidated ~~Statement~~Statements of Cash Flows for the nine months ended September 30, ~~2012~~2013 and ~~2011~~2012		11
	Consolidated ~~Statement~~Statements of Equity for the nine months ended September 30, ~~2012~~2013 and ~~2011~~2012		12

	Notes to Combined Consolidated Financial Statements		13

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		3640
Item 3	Quantitative and Qualitative Disclosures About Market Risk		5055
Item 4	Controls and Procedures		5156
PART II	OTHER INFORMATION
Item 1	Legal Proceedings		5257
Item 21A	Risk Factors		57
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		5258
Item 6	Exhibits		5258
	SIGNATURES		5359
	Index to Exhibits		5460

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. Since 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) and Item 3 (Defaults upon Senior Securities).

This report should be read in its entirety as it pertains to each Registrant. Except where indicated, the Consolidated Financial Statements and related Notes 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.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

CONSOLIDATED BALANCE ~~SHEET~~SHEETS

(In thousands)

(Unaudited)

   September 30,
2012 December 31,
2011
ASSETS

Current assets

Cash and cash equivalents
   $ 218,467    $ 239,196
Accounts receivable
   791,408    587,163
Taxes receivable
   118,540    75,284
Prepaid expenses
   64,644    35,796
Other current assets
   111,433    122,173


Total current assets
   1,304,492    1,059,612


Property and equipment, at cost
   16,637,626    15,540,178
Accumulated depreciation
   (3,825,482 ) (3,409,833 )


Property and equipment, net
   12,812,144    12,130,345


Other assets
   343,770    305,202


Total assets
   $ 14,460,406    $ 13,495,159


LIABILITIES AND EQUITY

Current liabilities

Accounts payable
   $ 298,363    $ 436,006
Accrued payroll and related costs
   145,595    117,907
Interest payable
   23,851    54,419
Taxes payable
   130,551    94,920
Dividends payable
   99,582    —
Other current liabilities
   144,267    123,928


Total current liabilities
   842,209    827,180


Long-term debt
   4,639,429    4,071,964
Deferred income taxes
   235,851    242,791
Other liabilities
   353,595    255,372


Total liabilities
   6,071,084    5,397,307


Commitments and contingencies

Shareholders’ equity

Shares; 253,299 and 252,639 shares outstanding
   709,993    766,595
Treasury shares, at cost; 586 and 287 shares
   (20,986 ) (10,553 )
Additional paid-in capital
   75,696    48,356
Retained earnings
   6,938,434    6,676,444
Accumulated other comprehensive loss
   (72,077 ) (74,321 )


Total shareholders’ equity
   7,631,060    7,406,521
Noncontrolling interests
   758,262    691,331


Total equity
   8,389,322    8,097,852


Total liabilities and equity
   $ 14,460,406    $ 13,495,159


	September 30,			December 31,
	2013			2012
ASSETS
Current assets
Cash and cash equivalents	$	178,370		$	282,092
Accounts receivable		865,746			743,673
Taxes receivable		143,635			112,423
Prepaid expenses		52,752			43,962
Other current assets		134,500			123,175

Total current assets		1,375,003			1,305,325

Property and equipment, at cost		18,606,931			16,971,666
Accumulated depreciation		(4,534,474	)		(3,945,694	)

Property and equipment, net		14,072,457			13,025,972

Other assets		281,871			276,477

Total assets	$	15,729,331		$	14,607,774

LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	318,013		$	350,147
Accrued payroll and related costs		137,481			132,728
Taxes payable		134,318			135,257
Dividends payable		192,352			66,369
Other current liabilities		202,422			226,948

Total current liabilities		984,586			911,449

Long-term debt		5,307,838			4,634,375
Deferred income taxes		187,648			226,045
Other liabilities		392,443			347,615

Total liabilities		6,872,515			6,119,484

Commitments and contingencies
Shareholders’ equity
Shares; 254,165 and 253,348 shares outstanding		712,421			710,130
Treasury shares, at cost; 777 and 589 shares		(28,627	)		(21,069	)
Additional paid-in capital		117,458			83,531
Retained earnings		7,417,890			7,066,023
Accumulated other comprehensive loss		(110,583	)		(115,449	)

Total shareholders’ equity		8,108,559			7,723,166
Noncontrolling interests		748,257			765,124

Total equity		8,856,816			8,488,290

Total liabilities and equity	$	15,729,331		$	14,607,774

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

   Three Months Ended
September 30, Nine Months Ended
September 30,
   2012 2011 2012 2011
Operating revenues

Contract drilling services
   $ 833,212    $ 704,892    $ 2,427,759    $ 1,837,047
Reimbursables
   28,137    17,438    94,090    63,851
Labor contract drilling services
   22,667    15,564    58,538    43,123
Other
   16    8    258    766


   884,032    737,902    2,580,645    1,944,787


Operating costs and expenses

Contract drilling services
   449,125    358,547    1,292,638    1,001,638
Reimbursables
   21,047    13,971    76,618    49,797
Labor contract drilling services
   12,991    8,053    34,070    25,326
Depreciation and amortization
   195,087    166,213    549,779    487,454
Selling, general and administrative
   26,858    27,536    75,388    72,883
Loss on impairment
   —      —      18,345    —
Gain on contract settlements/extinguishments, net
   —      —      (33,255 ) (21,202 )


   705,108    574,320    2,013,583    1,615,896


Operating income
   178,924    163,582    567,062    328,891
Other income (expense)

Interest expense, net of amount capitalized
   (25,635 ) (11,530 ) (56,783 ) (45,400 )
Interest income and other, net
   1,553    1,117    4,526    3,175


Income before income taxes
   154,842    153,169    514,805    286,666
Income tax provision
   (25,162 ) (17,614 ) (93,107 ) (42,481 )


Net income
   129,680    135,555    421,698    244,185
Net income attributable to noncontrolling interests
   (14,906 ) (238 ) (26,931 ) (290 )


Net income attributable to Noble Corporation
   $ 114,774    $ 135,317    $ 394,767    $ 243,895


Net income per share

Basic
   $ 0.45    $ 0.53    $ 1.55    $ 0.96
Diluted
   $ 0.45    $ 0.53    $ 1.55    $ 0.96


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Operating revenues
Contract drilling services	$	1,041,118		$	833,212		$	2,945,310		$	2,427,759
Reimbursables		29,242			28,137			78,676			94,090
Labor contract drilling services		8,493			22,667			43,150			58,538
Other		28			16			105			258

		1,078,881			884,032			3,067,241			2,580,645

Operating costs and expenses
Contract drilling services		488,250			449,125			1,464,320			1,292,638
Reimbursables		23,671			21,047			61,294			76,618
Labor contract drilling services		8,153			12,991			29,804			34,070
Depreciation and amortization		223,711			195,087			642,456			549,779
General and administrative		33,776			26,858			86,196			75,388
Loss on impairment		3,585			—			3,585			18,345
Gain on disposal of assets, net		(35,646	)		—			(35,646	)		—
Gain on contract settlements/extinguishments, net		(45,000	)		—			(46,800	)		(33,255	)

		700,500			705,108			2,205,209			2,013,583

Operating income		378,381			178,924			862,032			567,062
Other income (expense)
Interest expense, net of amount capitalized		(23,149	)		(25,635	)		(75,115	)		(56,783	)
Interest income and other, net		1,057			1,553			1,587			4,526

Income before income taxes		356,289			154,842			788,504			514,805
Income tax provision		(55,830	)		(25,162	)		(127,006	)		(93,107	)

Net income		300,459			129,680			661,498			421,698
Net income attributable to noncontrolling interests		(18,502	)		(14,906	)		(52,861	)		(26,931	)

Net income attributable to Noble Corporation	$	281,957		$	114,774		$	608,637		$	394,767

Net income per share
Basic	$	1.10		$	0.45		$	2.37		$	1.55
Diluted	$	1.10		$	0.45		$	2.37		$	1.55

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

   Three Months Ended
September 30, Nine Months Ended
September 30,
   2012 2011 2012 2011
Net income
   $ 129,680    $ 135,555    $ 421,698    $ 244,185
Other comprehensive income (loss), net of tax

Foreign currency translation adjustments
   2,033    (4,929 ) (4,994 ) (547 )
Gain (loss) on foreign currency forward contracts
   —      (9,654 ) 3,061    (7,141 )
Loss on interest rate swaps
   —      —      —      (366 )
Amortization of deferred pension plan amounts (net of tax provision of $790 and $356 for the three months ended September 30, 2012 and 2011, respectively, and $2,157 and $1,061 for the nine months ended September 30, 2012 and 2011, respectively)
   1,351    687    4,177    2,062


Other comprehensive income/(loss), net
   3,384    (13,896 ) 2,244    (5,992 )
Net comprehensive income attributable to noncontrolling interests
   (14,906 ) (238 ) (26,931 ) (290 )


Comprehensive income attributable to Noble Corporation
   $ 118,158    $ 121,421    $ 397,011    $ 237,903


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Net income	$	300,459		$	129,680		$	661,498		$	421,698
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustments		(1,135	)		2,033			(658	)		(4,994	)
Foreign currency forward contracts		5,320			—			589			3,061
Amortization of deferred pension plan amounts (net of tax provision of $732 and $790 for the three months ended September 30, 2013 and 2012, respectively, and $2,192 and $2,157 for the nine months ended September 30, 2013 and 2012, respectively)		1,661			1,351			4,935			4,177

Other comprehensive income, net		5,846			3,384			4,866			2,244
Net comprehensive income attributable to noncontrolling interests		(18,502	)		(14,906	)		(52,861	)		(26,931	)

Comprehensive income attributable to Noble Corporation	$	287,803		$	118,158		$	613,503		$	397,011

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

   Nine Months Ended
September 30,
   2012 2011
Cash flows from operating activities

Net income
   $ 421,698    $ 244,185
Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization
   549,779    487,454
Loss on impairment
   18,345    —
Gain on contract extinguishments, net
   —      (21,202 )
Deferred income taxes
   (16,090 ) (34,549 )
Amortization of share-based compensation
   28,782    26,857
Net change in other assets and liabilities
   (71,010 ) (243,715 )


Net cash from operating activities
   931,504    459,030


Cash flows from investing activities

Capital expenditures
   (1,247,139 ) (1,972,572 )
Change in accrued capital expenditures
   (195,044 ) (48,782 )
Refund from contract extinguishments
   —      18,642


Net cash from investing activities
   (1,442,183 ) (2,002,712 )


Cash flows from financing activities

Change in bank credit facilities, net
   (630,000 ) 675,000
Proceeds from issuance of senior notes, net of debt issuance costs
   1,186,636    1,087,833
Contributions from joint venture partners
   40,000    481,000
Payments of joint venture debt
   —      (693,494 )
Settlement of interest rate swaps
   —      (29,032 )
Par value reduction/dividend payments
   (105,092 ) (114,453 )
Financing costs on credit facilities
   (5,014 ) (2,835 )
Proceeds from employee stock transactions
   13,853    9,018
Repurchases of employee shares surrendered for taxes
   (10,433 ) (10,211 )


Net cash from financing activities
   489,950    1,402,826


Net change in cash and cash equivalents
   (20,729 ) (140,856 )
Cash and cash equivalents, beginning of period
   239,196    337,871


Cash and cash equivalents, end of period
   $ 218,467    $ 197,015


	Nine Months Ended
	September 30,
	2013			2012
Cash flows from operating activities
Net income	$	661,498		$	421,698
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		642,456			549,779
Loss on impairment		3,585			18,345
Gain on disposal of assets, net		(35,646	)		—
Deferred income taxes		(41,400	)		(16,090	)
Amortization of share-based compensation		33,471			28,782
Net change in other assets and liabilities		(102,310	)		(71,010	)

Net cash from operating activities		1,161,654			931,504

Cash flows from investing activities
Capital expenditures		(1,724,727	)		(1,247,139	)
Change in accrued capital expenditures		(66,946	)		(195,044	)
Proceeds from disposal of assets		61,000			—

Net cash from investing activities		(1,730,673	)		(1,442,183	)

Cash flows from financing activities
Net change in borrowings outstanding on bank credit facilities		973,055			(630,000	)
Repayment of long-term debt		(300,000	)		—
Proceeds from issuance of senior notes, net of debt issuance costs		—			1,186,636
Dividends paid to joint venture partner		(69,728	)		—
Contributions from joint venture partner		—			40,000
Financing costs on credit facilities		(2,432	)		(5,014	)
Par value reduction/dividend payments		(130,787	)		(105,092	)
Proceeds from employee stock transactions		2,747			13,853
Repurchases of employee shares surrendered for taxes		(7,558	)		(10,433	)

Net cash from financing activities		465,297			489,950

Net change in cash and cash equivalents		(103,722	)		(20,729	)
Cash and cash equivalents, beginning of period		282,092			239,196

Cash and cash equivalents, end of period	$	178,370		$	218,467

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF EQUITY

(In thousands)

(Unaudited)

   Shares
Additional
Paid-in
Retained Treasury
Accumulated
Other
Comprehensive
Noncontrolling    Total
   Balance Par Value Capital Earnings Shares Loss Interests    Equity
Balance at December 31, 2010
   262,415    $ 917,684    $ 39,006    $ 6,630,500    $ (373,967 ) $ (50,220 ) $ 124,631       $ 7,287,634
Employee related equity activity

Amortization of share-based compensation
   —      —      26,857    —      —      —      —         26,857
Issuance of share-based compensation shares
   248    844    (837 ) —      —      —      —         7
Exercise of stock options
   490    1,629    7,104    —      —      —      —         8,733
Tax benefit of stock options exercised
   —      —      278    —      —      —      —         278
Restricted shares forfeited or repurchased for taxes
   (319 ) (1,107 ) 1,107    —      (10,211 ) —      —         (10,211 )
Retirement of treasury shares
   (10,116 ) (33,035 ) (340,612 ) 373,647    —      —         —
Settlement of FIN48 provision
   —      —      15,658    —      —      —         15,658
Net income
   —      —      —      243,895    —      —      290       244,185
Par value reduction payments
   —      (89,948 ) (24,505 ) —      —      —      —         (114,453 )
Equity contribution by joint venture partner
   —      —      —      —      —      —      518,973       518,973
Other comprehensive loss, net
   —      —      —      —      —      (5,992 ) —         (5,992 )




Balance at September 30, 2011
   252,718    $ 796,067    $ 49,010    $ 6,549,441    $ (10,531 ) $ (56,212 ) $ 643,894       $ 7,971,669




Balance at December 31, 2011
   252,639    $ 766,595    $ 48,356    $ 6,676,444    $ (10,553 ) $ (74,321 ) $ 691,331       $ 8,097,852
Employee related equity activity

Amortization of share-based compensation
   —      —      28,782    —      —      —      —         28,782
Issuance of share-based compensation shares
   428    1,284    (1,276 ) —      —      —      —         8
Exercise of stock options
   606    1,722    10,949    —      —      —      —         12,671
Tax benefit of stock options exercised
   —      —      1,174    —      —      —      —         1,174
Restricted shares forfeited or repurchased for taxes
   (374 ) (1,138 ) 1,138    —      (10,433 ) —      —         (10,433 )
Net income
   —      —      —      394,767    —      —      26,931       421,698
Equity contribution by joint venture partner
   —      —      —      —      —      —      40,000       40,000
Par value reduction/dividend payments
   —      (58,470 ) (13,427 ) (33,195 ) —      —      —         (105,092 )
Dividends payable
   —      —      —      (99,582 ) —      —      —         (99,582 )
Other comprehensive income, net
   —      —      —      —      —      2,244    —         2,244




Balance at September 30, 2012
   253,299    $ 709,993    $ 75,696    $ 6,938,434    $ (20,986 ) $ (72,077 ) $ 758,262       $ 8,389,322


																Accumulated
							Additional									Other
	Shares						Paid-in			Retained			Treasury			Comprehensive			Noncontrolling			Total
	Balance			Par Value			Capital			Earnings			Shares			Loss			Interests			Equity
Balance at December 31, 2011		252,639		$	766,595		$	48,356		$	6,676,444		$	(10,553	)	$	(74,321	)	$	691,331		$	8,097,852
Employee related equity activity
Amortization of share-based compensation		—			—			28,782			—			—			—			—			28,782
Issuance of share-based compensation shares		428			1,284			(1,276	)		—			—			—			—			8
Exercise of stock options		606			1,722			10,949			—			—			—			—			12,671
Tax benefit of employee stock transactions		—			—			1,174			—			—			—			—			1,174
Restricted shares forfeited or repurchased for taxes		(374	)		(1,138	)		1,138			—			(10,433	)		—			—			(10,433	)
Net income		—			—			—			394,767			—			—			26,931			421,698
Equity contribution by joint venture partner		—			—			—			—			—			—			40,000			40,000
Par value reduction payments		—			(58,470	)		(13,427	)		—			—			—			—			(71,897	)
Dividends declared		—			—			—			(132,777	)		—			—			—			(132,777	)
Other comprehensive income, net		—			—			—			—			—			2,244			—			2,244

Balance at September 30, 2012		253,299		$	709,993		$	75,696		$	6,938,434		$	(20,986	)	$	(72,077	)	$	758,262		$	8,389,322

Balance at December 31, 2012		253,348		$	710,130		$	83,531		$	7,066,023		$	(21,069	)	$	(115,449	)	$	765,124		$	8,488,290
Employee related equity activity
Amortization of share-based compensation		—			—			33,471			—			—			—			—			33,471
Issuance of share-based compensation shares		659			1,851			(1,834	)		—			—			—			—			17
Exercise of stock options		158			440			3,760			—			—			—			—			4,200
Tax benefit of employee stock transactions		—			—			(1,470	)		—			—			—			—			(1,470	)
Restricted shares forfeited or repurchased for taxes		—			—			—			—			(7,558	)		—			—			(7,558	)
Net income		—			—			—			608,637			—			—			52,861			661,498
Dividends declared		—			—			—			(256,770	)		—			—			—			(256,770	)
Dividends paid to joint venture partner		—			—			—			—			—			—			(69,728	)		(69,728	)
Other comprehensive income, net		—			—			—			—			—			4,866			—			4,866

Balance at September 30, 2013		254,165		$	712,421		$	117,458		$	7,417,890		$	(28,627	)	$	(110,583	)	$	748,257		$	8,856,816

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONSOLIDATED BALANCE ~~SHEET~~SHEETS

(In thousands)

(Unaudited)

   September 30,
2012 December 31,
2011
ASSETS

Current assets

Cash and cash equivalents
   $ 213,681    $ 235,056
Accounts receivable
   791,408    587,163
Taxes receivable
   118,354    75,284
Prepaid expenses
   61,536    33,105
Other current assets
   111,433    120,109


Total current assets
   1,296,412    1,050,717


Property and equipment, at cost
   16,601,975    15,505,994
Accumulated depreciation
   (3,818,729 ) (3,404,589 )


Property and equipment, net
   12,783,246    12,101,405


Other assets
   343,852    305,283


Total assets
   $ 14,423,510    $ 13,457,405


LIABILITIES AND EQUITY

Current liabilities

Accounts payable
   $ 297,969    $ 435,729
Accrued payroll and related costs
   134,010    108,908
Interest payable
   23,851    54,419
Taxes payable
   126,112    91,190
Other current liabilities
   144,267    123,399


Total current liabilities
   726,209    813,645


Long-term debt
   4,639,429    4,071,964
Deferred income taxes
   235,851    242,791
Other liabilities
   353,595    255,372


Total liabilities
   5,955,084    5,383,772


Commitments and contingencies

Shareholder equity

Ordinary shares; 261,246 shares outstanding
   26,125    26,125
Capital in excess of par value
   466,028    450,616
Retained earnings
   7,290,088    6,979,882
Accumulated other comprehensive loss
   (72,077 ) (74,321 )


Total shareholder equity
   7,710,164    7,382,302
Noncontrolling interests
   758,262    691,331


Total equity
   8,468,426    8,073,633


Total liabilities and equity
   $ 14,423,510    $ 13,457,405


	September 30,			December 31,
	2013			2012
ASSETS
Current assets
Cash and cash equivalents	$	173,717		$	277,375
Accounts receivable		865,746			743,673
Taxes receivable		143,238			112,310
Prepaid expenses		49,329			41,232
Other current assets		134,004			122,649

Total current assets		1,366,034			1,297,239

Property and equipment, at cost		18,569,631			16,935,147
Accumulated depreciation		(4,526,002	)		(3,938,518	)

Property and equipment, net		14,043,629			12,996,629

Other assets		281,956			276,558

Total assets	$	15,691,619		$	14,570,426

LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	315,933		$	349,594
Accrued payroll and related costs		129,170			123,936
Taxes payable		130,071			130,844
Other current liabilities		202,422			226,935

Total current liabilities		777,596			831,309

Long-term debt		5,307,838			4,634,375
Deferred income taxes		187,648			226,045
Other liabilities		392,443			347,615

Total liabilities		6,665,525			6,039,344

Commitments and contingencies
Shareholders’ equity
Ordinary shares; 261,246 shares outstanding		26,125			26,125
Capital in excess of par value		489,058			470,454
Retained earnings		7,873,237			7,384,828
Accumulated other comprehensive loss		(110,583	)		(115,449	)

Total shareholders’ equity		8,277,837			7,765,958
Noncontrolling interests		748,257			765,124

Total equity		9,026,094			8,531,082

Total liabilities and equity	$	15,691,619		$	14,570,426

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF INCOME

(In thousands)

(Unaudited)

   Three Months Ended
September 30, Nine Months Ended
September 30,
   2012 2011 2012 2011
Operating revenues

Contract drilling services
   $ 833,212    $ 704,892    $ 2,427,759    $ 1,837,047
Reimbursables
   28,137    17,438    94,090    63,851
Labor contract drilling services
   22,667    15,564    58,538    43,123
Other
   16    8    258    766


   884,032    737,902    2,580,645    1,944,787


Operating costs and expenses

Contract drilling services
   444,225    349,626    1,280,969    980,662
Reimbursables
   21,047    13,971    76,618    49,797
Labor contract drilling services
   12,991    8,053    34,070    25,326
Depreciation and amortization
   194,595    165,719    548,271    486,010
Selling, general and administrative
   15,487    17,637    44,964    48,810
Loss on impairment
   —      —      18,345    —
Gain on contract settlements/extinguishments, net
   —      —      (33,255 ) (21,202 )


   688,345    555,006    1,969,982    1,569,403


Operating income
   195,687    182,896    610,663    375,384
Other income (expense)

Interest expense, net of amount capitalized
   (25,635 ) (11,530 ) (56,783 ) (45,400 )
Interest income and other, net
   1,361    1,884    4,368    3,978


Income before income taxes
   171,413    173,250    558,248    333,962
Income tax provision
   (24,784 ) (17,298 ) (91,972 ) (41,480 )


Net income
   146,629    155,952    466,276    292,482
Net income attributable to noncontrolling interests
   (14,906 ) (238 ) (26,931 ) (290 )


Net income attributable to Noble Corporation
   $ 131,723    $ 155,714    $ 439,345    $ 292,192


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Operating revenues
Contract drilling services	$	1,041,118		$	833,212		$	2,945,310		$	2,427,759
Reimbursables		29,242			28,137			78,676			94,090
Labor contract drilling services		8,493			22,667			43,150			58,538
Other		28			16			105			258

		1,078,881			884,032			3,067,241			2,580,645

Operating costs and expenses
Contract drilling services		486,113			444,225			1,448,119			1,280,969
Reimbursables		23,671			21,047			61,294			76,618
Labor contract drilling services		8,153			12,991			29,804			34,070
Depreciation and amortization		223,176			194,595			641,159			548,271
General and administrative		7,251			15,487			37,682			44,964
Loss on impairment		3,585			—			3,585			18,345
Gain on disposal of assets, net		(35,646	)		—			(35,646	)		—
Gain on contract settlements/extinguishments, net		(45,000	)		—			(46,800	)		(33,255	)

		671,303			688,345			2,139,197			1,969,982

Operating income		407,578			195,687			928,044			610,663
Other income (expense)
Interest expense, net of amount capitalized		(23,149	)		(25,635	)		(75,115	)		(56,783	)
Interest income and other, net		415			1,361			1,183			4,368

Income before income taxes		384,844			171,413			854,112			558,248
Income tax provision		(55,488	)		(24,784	)		(125,232	)		(91,972	)

Net income		329,356			146,629			728,880			466,276
Net income attributable to noncontrolling interests		(18,502	)		(14,906	)		(52,861	)		(26,931	)

Net income attributable to Noble Corporation	$	310,854		$	131,723		$	676,019		$	439,345

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

   Three Months Ended
September 30, Nine Months Ended
September 30,
   2012 2011 2012 2011
Net income
   $ 146,629    $ 155,952    $ 466,276    $ 292,482
Other comprehensive income (loss), net of tax

Foreign currency translation adjustments
   2,033    (4,929 ) (4,994 ) (547 )
Gain (loss) on foreign currency forward contracts
   —      (9,654 ) 3,061    (7,141 )
Loss on interest rate swaps
   —      —      —      (366 )
Amortization of deferred pension plan amounts (net of tax provision of $790 and $356 for the three months ended September 30, 2012 and 2011, respectively, and $2,157 and $1,061 for the nine months ended September 30, 2012 and 2011, respectively)
   1,351    687    4,177    2,062


Other comprehensive income/(loss), net
   3,384    (13,896 ) 2,244    (5,992 )
Net comprehensive income attributable to noncontrolling interests
   (14,906 ) (238 ) (26,931 ) (290 )


Comprehensive income attributable to Noble Corporation
   $ 135,107    $ 141,818    $ 441,589    $ 286,200


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Net income	$	329,356		$	146,629		$	728,880		$	466,276
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustments		(1,135	)		2,033			(658	)		(4,994	)
Foreign currency forward contracts		5,320			—			589			3,061
Amortization of deferred pension plan amounts (net of tax provision of $732 and $790 for the three months ended September 30, 2013 and 2012, respectively, and $2,192 and $2,157 for the nine months ended September 30, 2013 and 2012, respectively)		1,661			1,351			4,935			4,177

Other comprehensive income, net		5,846			3,384			4,866			2,244
Net comprehensive income attributable to noncontrolling interests		(18,502	)		(14,906	)		(52,861	)		(26,931	)

Comprehensive income attributable to Noble Corporation	$	316,700		$	135,107		$	680,885		$	441,589

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

   Nine Months Ended
September 30,
   2012 2011
Cash flows from operating activities

Net income
   $ 466,276    $ 292,482
Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization
   548,271    486,010
Loss on impairment
   18,345    —
Gain on contract extinguishments, net
   —      (21,202 )
Deferred income taxes
   (16,090 ) (34,549 )
Capital contribution by parent- shared-based compensation
   15,412    15,150
Net change in other assets and liabilities
   (75,357 ) (250,433 )


Net cash from operating activities
   956,857    487,458


Cash flows from investing activities

Capital expenditures
   (1,245,671 ) (1,967,618 )
Change in accrued capital expenditures
   (195,044 ) (48,782 )
Refund from contract extinguishments
   —      18,642


Net cash from investing activities
   (1,440,715 ) (1,997,758 )


Cash flows from financing activities

Change in bank credit facilities, net
   (630,000 ) 675,000
Proceeds from issuance of senior notes, net of debt issuance costs
   1,186,636    1,087,833
Contributions from joint venture partners
   40,000    481,000
Payments of joint venture debt
   —      (693,494 )
Settlement of interest rate swaps
   —      (29,032 )
Financing costs on credit facilities
   (5,014 ) (2,835 )
Distributions to parent company, net
   (129,139 ) (149,566 )


Net cash from financing activities
   462,483    1,368,906


Net change in cash and cash equivalents
   (21,375 ) (141,394 )
Cash and cash equivalents, beginning of period
   235,056    333,399


Cash and cash equivalents, end of period
   $ 213,681    $ 192,005


	Nine Months Ended
	September 30,
	2013			2012
Cash flows from operating activities
Net income	$	728,880		$	466,276
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		641,159			548,271
Loss on impairment		3,585			18,345
Gain on disposal of assets, net		(35,646	)		—
Deferred income taxes		(41,400	)		(16,090	)
Capital contribution by parent—share-based compensation		18,604			15,412
Net change in other assets and liabilities		(102,238	)		(75,357	)

Net cash from operating activities		1,212,944			956,857

Cash flows from investing activities
Capital expenditures		(1,723,941	)		(1,245,671	)
Change in accrued capital expenditures		(66,946	)		(195,044	)
Proceeds from disposal of assets		61,000			—

Net cash from investing activities		(1,729,887	)		(1,440,715	)

Cash flows from financing activities
Net change in borrowings outstanding on bank credit facilities		973,055			(630,000	)
Repayment of long-term debt		(300,000	)		—
Proceeds from issuance of senior notes, net of debt issuance costs		—			1,186,636
Dividends paid to joint venture partner		(69,728	)		—
Contributions from joint venture partner		—			40,000
Financing costs on credit facilities		(2,432	)		(5,014	)
Distributions to parent company, net		(187,610	)		(129,139	)

Net cash from financing activities		413,285			462,483

Net change in cash and cash equivalents		(103,658	)		(21,375	)
Cash and cash equivalents, beginning of period		277,375			235,056

Cash and cash equivalents, end of period	$	173,717		$	213,681

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF EQUITY

(In thousands)

(Unaudited)

            Accumulated
         Capital in    Other
   Shares    Excess of    Retained Comprehensive Noncontrolling    Total
   Balance    Par Value    Par Value    Earnings Loss Interests    Equity
Balance at December 31, 2010
   261,246       $ 26,125       $ 416,232       $ 6,743,887    $ (50,220 ) $ 124,631       $ 7,260,655
Net income
   —         —         —         292,192    —      290       292,482
Capital contributions by parent— share-based compensation
   —         —         15,150       —      —      —         15,150
Distributions to parent
   —         —         —         (149,566 ) —      —         (149,566 )
Settlement of FIN48 provision
   —         —         15,658       —      —      —         15,658
Noncontrolling interest contributions
   —         —         —         —      —      518,973       518,973
Other comprehensive income, net
   —         —         —         —      (5,992 ) —         (5,992 )










Balance at September 30, 2011
   261,246       $ 26,125       $ 447,040       $ 6,886,513    $ (56,212 ) $ 643,894       $ 7,947,360










Balance at December 31, 2011
   261,246       $ 26,125       $ 450,616       $ 6,979,882    $ (74,321 ) $ 691,331       $ 8,073,633
Net income
   —         —         —         439,345    —      26,931       466,276
Capital contributions by parent— share-based compensation
   —         —         15,412       —      —      —         15,412
Distributions to parent
   —         —         —         (129,139 ) —      —         (129,139 )
Noncontrolling interest contributions
   —         —         —         —      —      40,000       40,000
Other comprehensive loss, net
   —         —         —         —      2,244    —         2,244










Balance at September 30, 2012
   261,246       $ 26,125       $ 466,028       $ 7,290,088    $ (72,077 ) $ 758,262       $ 8,468,426


										Accumulated
					Capital in					Other
	Shares				Excess of		Retained			Comprehensive			Noncontrolling			Total
	Balance		Par Value		Par Value		Earnings			Loss			Interests			Equity
Balance at December 31, 2011		261,246	$	26,125	$	450,616	$	6,979,882		$	(74,321	)	$	691,331		$	8,073,633
Net income		—		—		—		439,345			—			26,931			466,276
Capital contributions by parent—share-based compensation		—		—		15,412		—			—			—			15,412
Distributions to parent		—		—		—		(129,139	)		—			—			(129,139	)
Equity contribution by joint venture partner		—		—		—		—			—			40,000			40,000
Other comprehensive income, net		—		—		—		—			2,244			—			2,244

Balance at September 30, 2012		261,246	$	26,125	$	466,028	$	7,290,088		$	(72,077	)	$	758,262		$	8,468,426

Balance at December 31, 2012		261,246	$	26,125	$	470,454	$	7,384,828		$	(115,449	)	$	765,124		$	8,531,082
Net income		—		—		—		676,019			—			52,861			728,880
Capital contributions by parent—share-based compensation		—		—		18,604		—			—			—			18,604
Distributions to parent		—		—		—		(187,610	)		—			—			(187,610	)
Dividends paid to joint venture partner		—		—		—		—			—			(69,728	)		(69,728	)
Other comprehensive income, net		—		—		—		—			4,866			—			4,866

Balance at September 30, 2013		261,246	$	26,125	$	489,058	$	7,873,237		$	(110,583	)	$	748,257		$	9,026,094

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Note 1 — Organization and Basis of Presentation

Noble Corporation, a Swiss corporation (“Noble-Swiss”), is a leading ~~provider of~~ offshore ~~contract~~ drilling ~~services~~contractor for the oil and gas industry. ~~Our~~We perform contract drilling services with our fleet of 79 mobile offshore drilling units located worldwide. We also own one floating production storage and offloading unit (“FPSO”). Currently, our fleet consists of 14 semisubmersibles, 14 drillships, 49 jackups and two submersibles. ~~Additionally,~~At September 30, 2013, we ~~have one floating production storage and offloading unit. Our fleet includes 11~~had nine units under construction as follows:

~~five~~three dynamically positioned, ultra-deepwater, harsh environment ~~drillships~~drillships; and

six high-specification heavy-duty, harsh environment jackups.

Subsequent to September 30, 2013, one newbuild drillship, theNoble Bob Douglas, and one newbuild jackup, ~~rigs.~~theNoble Regina Allen, were delivered from the shipyard. These units are currently mobilizing, undergoing final commissioning and customer acceptance testing before commencing their respective contracts.

Our ~~global~~ fleet is ~~currently located~~deployed globally in ~~the following areas: the U.S. Gulf of Mexico~~oil and ~~Alaska, Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India, Australia and the Asian Pacific.~~gas producing regions. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921.

Noble Corporation, a Cayman Islands company (“Noble-Cayman”) is a direct, wholly-owned subsidiary of Noble-Swiss, our publicly-traded parent company. Noble-Swiss’ principal asset is all of the shares of Noble-Cayman. Noble-Cayman has no public equity outstanding. The consolidated financial statements of Noble-Swiss include the accounts of Noble-Cayman, and 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 statement 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 recurring nature. The December 31, ~~2011~~2012 Consolidated Balance Sheets presented herein are derived from the December 31, ~~2011~~2012 audited consolidated financial statements. These interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2011,~~2012, filed by both Noble-Swiss and 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.

Migration to the United Kingdom

In October 2013, our shareholders approved the previously announced proposed corporate reorganization transaction (the “Transaction”) of Noble-Swiss and the group of companies it controls. The Transaction will merge Noble-Swiss into a newly formed subsidiary incorporated under English law, Noble Corporation plc (“Noble-UK”), which will become our new holding company. The Transaction will effectively change the place of incorporation of our publicly traded parent company from Switzerland to the United Kingdom. Subject to the completion of certain closing requirements, the Transaction is expected to be completed in November 2013.

In the Transaction, all of the outstanding ordinary shares of Noble-Swiss will be cancelled, and Noble-UK will issue, through an exchange agent, one ordinary share of Noble-UK in exchange for each ordinary share of Noble-Swiss. Upon completion of the Transaction, Noble-UK will own and continue to conduct the same businesses through the Noble group as Noble-Swiss conducted prior to the Transaction, except that Noble-UK will be the parent company of the Noble group of companies. Noble-UK is expected to become subject to SEC reporting requirements and its ordinary shares have been approved for listing on the New York Stock Exchange under the symbol “NE”, subject to notice of issuance.

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)

Proposed Spin-off Transaction

In September 2013, we announced that our Board of Directors approved a plan to reorganize our business by means of a separation and spin-off of a newly formed subsidiary whose assets and liabilities would consist of most of our standard specification drilling units and related assets, liabilities and business (the “Separation”), resulting in the creation of two separate offshore drilling companies. The drilling units to be owned and operated by the new company include five drillships, three semisubmersibles, 34 jackups, two submersibles and one FPSO, as well as the Hibernia platform operations offshore Canada. We will continue to own and operate our high-specification assets with particular operating focus in deepwater and ultra-deepwater markets for drillships and semisubmersibles and harsh environment and high-specification markets for jackups. The Separation is subject to several conditions, including final board approval and shareholder approval.

Note 2 — Consolidated Joint Ventures

We ~~own~~maintain a 50 percent ~~interests~~interest in two joint ventures, each with a subsidiary of Royal Dutch Shell ~~PLC~~plc. (“Shell”), ~~for~~that own and operate the ~~construction and operation of our~~ two ~~Bully-class~~Bully-class drillships. ~~Since these entities’ equity at risk is insufficient to permit them to carry on their activities without additional financial support, they each meet the criteria for a variable interest entity.~~ We have determined that we are the primary beneficiary for accounting purposes. Accordingly, we consolidate the entities in our consolidated financial statements after eliminating intercompany transactions. Shell’s equity interests are presented as noncontrolling interests on our Consolidated Balance Sheets.

In April 2011, the Bully joint venture partners entered into capital contribution agreements whereby capital calls up to a total of $360 million ~~can~~could be made for funds needed to complete the construction of the drillships. All contributions under these agreements ~~were~~have been made, ~~during 2011 and~~with the final contribution made in the first quarter of 2012. ~~No amounts remain available under these agreements.~~

AtDuring the nine months ended September 30, ~~2012,~~2013, the Bully joint venture partners approved and paid dividends totaling $139 million.

The combined carrying amount of theBully-class drillships ~~was $1.5 billion, which was~~at both September 30, 2013 and December 31, 2012 totaled $1.4 billion. These assets were primarily funded through ~~partners’~~partner equity contributions.

During 2012, these rigs commenced operations. Operational results for the three and nine months ended September 30, 2013 and 2012 are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Operating revenues	$	94,847	$	78,447	$	272,620	$	162,892
Net income	$	36,488	$	28,679	$	103,123	$	52,152

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 3 — Share Data

Share capital

The following ~~is a detail of~~table details Noble-Swiss’ ~~authorized~~ share capital as of September 30, ~~2012~~2013 and December 31, ~~2011:~~2012:


					September 30,		December 31,
	September 30, 2012		December 31, 2011		2013		2012
Shares outstanding and trading		252,713		252,352		253,388		252,759
Treasury shares		586		287		777		589

Total shares outstanding		253,299		252,639		254,165		253,348
Treasury shares held for share-based compensation plans		12,851		13,511		11,985		12,802

Total shares authorized for issuance		266,150		266,150		266,150		266,150

Par value per share (in Swiss Francs)		3.15		3.41		3.15		3.15

Repurchased treasury shares are recorded at cost, and ~~include both shares repurchased pursuant~~relate to ~~our Board of Directors approved share repurchase program and~~ shares surrendered by employees for taxes payable upon the vesting of restricted stock. The number of shares that we may hold in treasury is limited under Swiss law. At September 30, 2012, 6.8 million shares remained available for repurchase under the authorization by the Board of Directors noted above. No shares were repurchased under this authorization during the nine months ended September 30, 2012.

Our Board of Directors may ~~further~~ increase Noble-Swiss’ share capital through the issuance of up to 133.1 million authorized ~~registered~~ shares without obtaining shareholder approval. The issuance of these authorized ~~registered~~ shares is subject to certain conditions regarding their use.

In April 2012, our shareholders approved the payment of a dividend aggregating $0.52 per share, which was paid in four equal installments, with the final payment having been made in May 2013.

In April 2013, our shareholders approved the payment of a dividend aggregating $1.00 per share to be paid in four equal installments, the first of which was paid in August ~~2012,~~2013, with the remaining three installments ~~to be paid in~~currently scheduled for November ~~2012,~~2013, February ~~2013~~2014 and May ~~2013,~~2014, respectively. ~~These dividends will require us to make cash payments of approximately $33 million during the fourth quarter of 2012, based on the number of shares currently outstanding.~~ As of September 30, ~~2012,~~2013, we had ~~$100~~$192 million of dividends payable ~~outstanding on this obligation. Any additional issuances~~outstanding. Our Board of ~~shares would further increase our obligation.~~Directors has the authority to accelerate the payment of any installment, or portions thereof, at its sole discretion at any time prior to payment of the final installment.

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)

Earnings per share

The following table sets forth the computation of basic and diluted earnings per share for Noble-Swiss:


	Three months ended						Nine months ended						Three months ended						Nine months ended
	September 30,						September 30,						September 30,						September 30,
	2012			2011			2012			2011			2013			2012			2013			2012
Allocation of net income
Basic
Net income attributable to Noble Corporation	$	114,774		$	135,317		$	394,767		$	243,895		$	281,957		$	114,774		$	608,637		$	394,767
Earnings allocated to unvested share-based payment awards		(1,192	)		(1,415	)		(4,008	)		(2,487	)		(3,393	)		(1,192	)		(7,191	)		(4,008	)

Net income to common shareholders—basic	$	113,582		$	133,902		$	390,759		$	241,408		$	278,564		$	113,582		$	601,446		$	390,759

Diluted
Net income attributable to Noble Corporation	$	114,774		$	135,317		$	394,767		$	243,895		$	281,957		$	114,774		$	608,637		$	394,767
Earnings allocated to unvested share-based payment awards		(1,190	)		(1,412	)		(4,002	)		(2,481	)		(3,390	)		(1,190	)		(7,184	)		(4,002	)

Net income to common shareholders—diluted	$	113,584		$	133,905		$	390,765		$	241,414		$	278,567		$	113,584		$	601,453		$	390,765

Weighted average shares outstanding—basic		252,657			251,580			252,339			251,327			253,357			252,657			253,242			252,339
Incremental shares issuable from assumed exercise of stock options		317			449			385			640			261			317			265			385

Weighted average shares outstanding—diluted		252,974			252,029			252,724			251,967			253,618			252,974			253,507			252,724

Weighted average unvested share-based payment awards		2,651			2,658			2,588			2,589			3,086			2,651			3,028			2,588

Earnings per share
Basic	$	0.45		$	0.53		$	1.55		$	0.96		$	1.10		$	0.45		$	2.37		$	1.55
Diluted	$	0.45		$	0.53		$	1.55		$	0.96		$	1.10		$	0.45		$	2.37		$	1.55

Only those items having a dilutive impact on our basic earnings per share are included in diluted earnings per share. ~~At both~~For the three months ended September 30, ~~2012~~2013 and ~~2011,~~2012, stock options ~~totaling~~representing approximately 0.9 million and 1.1 million shares, respectively, were excluded from the diluted earnings per share as they were not dilutive.

Note 4 — Receivables from Customers

At September 30, 2013, we had receivables of approximately $14 million related to theNoble Max Smith, which are being disputed by our customer, Pemex Exploracion y Produccion (“Pemex”). These receivables have been classified as long-term and are included in “Other assets” on our Consolidated Balance Sheet. The disputed amounts relate to lost revenues for downtime that occurred after our rig was damaged when one of Pemex’s supply boats collided with our rig in 2010. In January 2012, we filed a lawsuit against Pemex in Mexican court seeking recovery of these amounts. While we can make no assurances as to the outcome of this dispute, we believe we are entitled to the disputed amounts.

Note 5 — Property and Equipment

Property and equipment, at cost, as of September 30, ~~2012~~2013 and December 31, ~~2011 consisted of the following:~~

   September 30,    December 31,
   2012    2011
Drilling equipment and facilities
   $ 13,449,855       $ 10,974,943
Construction in progress
   2,991,487       4,367,750
Other
   196,284       197,485




   $ 16,637,626       $ 15,540,178

Capital expenditures, including capitalized interest, totaled $1.2 billion and $2.0 billion for the nine months ended September 30, 2012 and 2011, respectively. Capital expenditures for the first nine months of 2012 consisted of the following:

~~$441 million for newbuild construction;~~

~~$548 million for major projects, including $50 million in subsea related expenditures and $29 million to upgrade two drillships currently operating in Brazil;~~

~~$150 million for other capitalized expenditures, including upgrades and replacements to drilling equipment, that generally have a useful life ranging from 3 to 5 years; and~~

~~$108 million in capitalized interest.~~


	September 30,		December 31,
	2013		2012
Drilling equipment and facilities	$	15,835,848	$	14,099,628
Construction in progress		2,569,052		2,677,385
Other		202,031		194,653

Property and equipment, at cost	$	18,606,931	$	16,971,666

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)

Capital expenditures, including capitalized interest, totaled $1.7 billion and $1.2 billion for the nine months ended September 30, 2013 and 2012, respectively. Interest is capitalized on construction-in-progress at the weighted average cost of debt outstanding during the period of construction. Capitalized interest was $31 million and $92 million for the three and nine months ended September 30, 2013, respectively, as compared to $31 million and $108 million for the three and nine months ended September 30, ~~2012, respectively, as compared to $32 million and $88 million for the three and nine months ended September 30, 2011.~~2012.

Note 56 — Loss on Impairment

During the second quarter of 2012, we determined that our submersible rig fleet, consisting of two cold stacked rigs, was partially impaired due to the declining market outlook for drilling services for this rig type. We estimated the fair value of the rigs based on the salvage value of the rigs and a recent transaction involving a similar unit owned by a peer company (Level 2 fair value measurement). Based on these estimates, we recognized a charge of approximately $13 million ~~for the nine months ended September 30,~~in 2012.

Also, during the second quarter of 2012, we determined that certain corporate assets were partially impaired due to a declining market for, and the potential disposal of, the assets. We estimated the fair value of the ~~asset~~assets based on ~~recent transactions involving similar units in~~a signed letter of intent to sell the ~~market~~assets (Level 2 fair value measurement). Based on these estimates, we recognized a charge of approximately $5 million ~~for the nine months ended September 30,~~in 2012.

During the third quarter of 2013, we recorded an additional impairment charge of approximately $4 million on our two cold stacked submersible rigs arising from the potential disposition of these assets to an unrelated third party.

Note 67 — Gain on Disposal of Assets, net

During the third quarter of 2013, we completed the sale of theNoble Lewis Dugger for $61 million to an unrelated third party in Mexico. In connection with the sale, we recorded a pre-tax gain of approximately $36 million.

Note 8 – Gain on Contract Settlements/Extinguishments, net

During the third quarter of 2013, we received $45 million related to the settlement of all claims against the former shareholders of FDR Holdings, Ltd., which we acquired in July 2010, relating to alleged breaches of various representations and warranties contained in the purchase agreement.

During the second quarter of 2012, we received approximately $5 million from the settlement of a claim relating to theNoble David Tinsley, which had experienced a “punch-through” while being positioned on location in 2009. We had originally recorded a $17 million charge during 2009 related to this incident. Additionally, during the second quarter of 2012, we settled an action against certain vendors for damages sustained during Hurricane Ike. We recognized a net gain of approximately $28 million related to this settlement. We also resolved all outstanding matters with Anadarko Petroleum Company ~~(“Anadarko”)~~in the second quarter of 2012 related to the previously disclosed force majeure action, Hurricane Ike matters and receivables relating to theNoble Amos Runner.

In January 2011, we announced the signing of a Memorandum of Understanding (“MOU”) with Petroleo Brasileiro S.A. (“Petrobras”) regarding operations in Brazil. Under the terms of the MOU, we agreed to substitute the~~Noble Phoenix, then under contract with Shell in Southeast Asia, for the~~~~Noble Muravlenko~~~~. In connection with the cancellation of the contract on the~~~~Noble Phoenix~~, we recognized a non-cash gain of approximately $52.5 million during the first quarter of 2011, which represented the unamortized fair value of the in-place contract at acquisition. As a result of the substitution, we reached a decision not to proceed with the previously announced reliability upgrade to the~~Noble Muravlenko~~ that was scheduled to take place in 2013, and therefore, incurred a non-cash charge of approximately $32.6 million related to the termination of outstanding shipyard contracts. The substitution was completed during the fourth quarter of 2012.

In February 2011, the outstanding balances of the Bully joint venture credit facilities, which totaled $693 million, were repaid in full and the credit facilities terminated using a portion of the proceeds from our February 2011 debt offering and equity contributions from our joint venture partner. In addition, the related interest rate swaps were settled and terminated concurrent with the repayment and termination of the credit facilities. As a result of these transactions, we recognized a gain of approximately $1.3 million during the first quarter of 2011.

~~Note 7 — Receivables from Customers~~

~~In June 2010, a subsidiary of Frontier, which we acquired in July 2010, entered into a charter contract with a subsidiary of BP PLC (“BP”) for the~~~~Seillean~~ ~~with a term of a minimum of 100 days. The unit went on hire on July 23, 2010. In October 2010, BP initiated an arbitration proceeding against us claiming the contract was void~~~~ab initio~~, or never existed, due to a fundamental breach and has made other claims and demanded that we reimburse the amounts already paid to us under the charter. We believe BP owes us the amounts due under the charter. The charter contained a “hell or high water” provision requiring payment, and we believe we satisfied our obligations under the charter. Outstanding receivables related to this charter totaled $35 million as of September 30, 2012. We recently received a favorable summary judgment ruling upholding the charter agreement and requiring BP to pay us the outstanding amounts, however, this matter has not been finally resolved because the ruling allows BP the opportunity to make a damages claim under the charter agreement. These receivables continue to be classified as long-term and are included in “Other assets” on our Consolidated Balance Sheet. We can make no assurances as to the outcome of this dispute.

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)

~~At September 30, 2012, we had receivables of approximately $14 million related to the~~~~Noble Max Smith~~, which are being disputed by our customer, Pemex Exploracion y Produccion (“Pemex”). These receivables have been classified as long-term and are included in “Other assets” on our Consolidated Balance Sheet. The disputed amount relates to lost revenues for downtime that occurred after our rig was damaged when one of Pemex’s supply boats collided with our rig. In January 2012, we filed a lawsuit against Pemex in Mexican court seeking recovery of these amounts. While we can make no assurances as to the outcome of this dispute, we believe we are entitled to the disputed amounts.

Note 89 — Debt

Total debt consisted of the following at September 30, ~~2012~~2013 and December 31, ~~2011:~~2012:


	September 30, 2012		December 31, 2011		September 30,		December 31,
Wholly-owned debt instruments:
					2013		2012
Senior unsecured notes:
5.875% Senior Notes due 2013	$	299,975	$	299,949	$	—	$	299,985
7.375% Senior Notes due 2014		249,760		249,647		249,922		249,799
3.45% Senior Notes due 2015		350,000		350,000		350,000		350,000
3.05% Senior Notes due 2016		299,948		299,938		299,963		299,952
2.50% Senior Notes due 2017		299,844		—		299,877		299,852
7.50% Senior Notes due 2019		201,695		201,695		201,695		201,695
4.90% Senior Notes due 2020		498,870		498,783		498,991		498,900
4.625% Senior Notes due 2021		399,515		399,480		399,563		399,527
3.95% Senior Notes due 2022		399,075		—		399,157		399,095
6.20% Senior Notes due 2040		399,891		399,890		399,892		399,891
6.05% Senior Notes due 2041		397,605		397,582		397,638		397,613
5.25% Senior Notes due 2042		498,251		—		498,276		498,257
Credit facilities		345,000		975,000

Total senior unsecured notes						3,994,974		4,294,566
Commercial paper program						1,312,864		339,809

Total long-term debt	$	4,639,429	$	4,071,964	$	5,307,838	$	4,634,375

~~During June 2012,~~Credit Facilities and Commercial Paper Program

We currently have three separate credit facilities with an aggregate maximum available capacity of $2.9 billion (together, the “Credit Facilities”), which includes a $600 million 364-day unsecured revolving credit agreement we ~~replaced our $575~~entered into in August 2013. In addition, we have an $800 million credit facility ~~scheduled to mature~~maturing in ~~2013, with~~2015 and a ~~new $1.2~~$1.5 billion credit facility ~~which matures~~maturing in 2017. ~~The new facility, combined with~~We also established a commercial paper program in September 2012, which allows us to issue up to $1.8 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program are supported by our ~~existing $600~~Credit Facilities and, therefore, are classified as long-term on our Consolidated Balance Sheet. Our total debt related to the Credit Facilities and commercial paper program was $1.3 billion at September 30, 2013 as compared to $340 million ~~credit facility that matures in 2015, gives us a total borrowing~~at December 31, 2012. At September 30, 2013, we had approximately $1.6 billion of available capacity under the ~~two facilities (together referred to as the “Credit Facilities”) of $1.8 billion. The covenants and events of default under the~~ Credit Facilities are substantially similar, and each facility contains a covenant that limits our ratio of debt to total tangible capitalization, as defined in the Credit Facilities, to 0.60. At September 30, 2012, our ratio of debt to total tangible capitalization was less than 0.36. We were in compliance with all covenants under the Credit Facilities as of September 30, 2012.Facilities.

The Credit Facilities provide us with the ability to issue up to $375 million in letters of credit in the aggregate. The issuance of letters of credit does not increase our borrowings outstanding under the Credit Facilities, but it does reduce the amount available. At September 30, ~~2012,~~2013, we had no letters of credit ~~outstanding~~issued under the Credit Facilities.

During September 2012, we established a commercial paper program, which will allow us to issue up to $1.8 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program are supported by the unused committed capacity under our Credit Facilities and, as such, are classified as long-term on our balance sheet. Subsequent to September 30, 2012, we began issuing notes under the program and had outstanding notes totaling $328 million as of October 31, 2012.

~~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)~~

Senior Unsecured Notes

In February 2012, we issued, through our indirect wholly-owned subsidiary, Noble Holding International Limited (“NHIL”), $1.2 billion aggregate principal amount of senior notes in three separate tranches, ~~with~~comprising $300 million of 2.50% Senior Notes due 2017, $400 million of 3.95% Senior Notes due 2022, and $500 million of 5.25% Senior Notes due 2042. The weighted average coupon of all three tranches is 4.13%. The net proceeds of approximately $1.19 billion, after expenses, were primarily used to repay the then outstanding balance on our Credit Facilities.

Our 5.875% Senior Notes ~~mature~~matured during the second quarter of 2013. We ~~anticipate using availability~~used proceeds from our commercial paper program to repay the $300 million outstanding balance.

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)

Covenants

The Credit Facilities are guaranteed by our indirect wholly-owned subsidiaries, NHIL and Noble Drilling Corporation (“NDC”). The covenants and events of default under the Credit Facilities are substantially similar, and each facility contains a covenant that limits our ratio of debt to total tangible capitalization, as defined in the Credit Facilities, to ~~repay the outstanding balance; therefore, we continue to report the balance as long-term at~~0.60. At September 30, ~~2012.~~2013, our ratio of debt to total tangible capitalization was approximately 0.37. We were in compliance with all covenants under the Credit Facilities as of September 30, 2013.

~~The~~In addition to the covenants from the Credit Facilities noted above, 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 September 30, ~~2012,~~2013, we were in compliance with all of our debt covenants. We continually monitor compliance with the covenants under our ~~Credit Facilities and senior~~ notes and, based on our expectations for ~~2012,~~2013, expect to remain in compliance during the year.

Fair Value of Debt

Fair value represents the amount at which an instrument could be exchanged in a current transaction between willing parties. The estimated 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 (Level 2 measurement).

The following table presents the estimated fair value of our long-term debt as of September 30, ~~2012~~2013 and December 31, ~~2011.~~2012, respectively:


	September 30, 2012				December 31, 2011				September 30, 2013				December 31, 2012
	Carrying		Estimated		Carrying		Estimated		Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value		Value		Fair Value		Value		Fair Value
Wholly-owned debt instruments
Senior unsecured notes:
5.875% Senior Notes due 2013	$	299,975	$	308,949	$	299,949	$	317,586	$	—	$	—	$	299,985	$	305,594
7.375% Senior Notes due 2014		249,760		272,063		249,647		278,966		249,922		257,442		249,799		269,008
3.45% Senior Notes due 2015		350,000		369,921		350,000		363,571		350,000		363,551		350,000		368,824
3.05% Senior Notes due 2016		299,948		314,142		299,938		306,057		299,963		309,374		299,952		316,268
2.50% Senior Notes due 2017		299,844		309,118		—		—		299,877		301,995		299,852		309,846
7.50% Senior Notes due 2019		201,695		249,768		201,695		248,623		201,695		235,014		201,695		249,358
4.90% Senior Notes due 2020		498,870		559,783		498,783		531,437		498,991		523,400		498,900		562,530
4.625% Senior Notes due 2021		399,515		440,799		399,480		416,847		399,563		407,416		399,527		442,776
3.95% Senior Notes due 2022		399,075		420,137		—		—		399,157		385,207		399,095		422,227
6.20% Senior Notes due 2040		399,891		466,331		399,890		450,017		399,892		407,789		399,891		477,327
6.05% Senior Notes due 2041		397,605		461,733		397,582		443,308		397,638		400,740		397,613		468,256
5.25% Senior Notes due 2042		498,251		533,637		—		—		498,276		451,050		498,257		533,422
Credit Facilities		345,000		345,000		975,000		975,000

Total senior unsecured notes										3,994,974		4,042,978		4,294,566		4,725,436
Commercial paper program										1,312,864		1,312,864		339,809		339,809

Total long-term debt	$	4,639,429	$	5,051,381	$	4,071,964	$	4,331,412	$	5,307,838	$	5,355,842	$	4,634,375	$	5,065,245

Note 910 — Income Taxes

At December 31, ~~2011, the reserves for uncertain tax positions totaled $118 million (net of related tax benefits of $8 million). At September 30,~~ 2012, the reserves for uncertain tax positions totaled ~~$124~~$125 million (net of related tax benefits of $10 million). ~~If the~~At September 30, ~~2012~~2013, the reserves ~~are~~for uncertain tax positions totaled $138 million (net of related tax benefits of $2 million), and if not ~~realized,~~utilized, would reduce the provision for income taxes ~~would be reduced~~ by ~~$124 million in future periods.~~

~~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)~~

$138 million.

It is possible that our existing liabilities related to our ~~reserve~~reserves for uncertain tax positions may ~~increase or decrease~~change in the next ~~twelve~~12 months primarily due to the completion of open audits or the expiration of statutes of limitation. However, we cannot reasonably estimate a range of changes in our existing liabilities due to various uncertainties, such as the unresolved nature of various audits.

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 1011 — Employee Benefit Plans

Pension costs include the following components:


	Three Months Ended September 30,												Three Months Ended September 30,
	2012						2011						2013						2012
	Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.
Service cost	$	1,072		$	2,431		$	1,141		$	2,152		$	1,361		$	2,681		$	1,072		$	2,431
Interest cost		1,317			2,196			1,433			2,143			1,259			2,263			1,317			2,196
Return on plan assets		(1,313	)		(2,793	)		(1,449	)		(2,768	)		(1,443	)		(3,275	)		(1,313	)		(2,793	)
Amortization of prior service cost		—			57			—			57			—			57			—			57
Amortization of transition obligation		—			—			19			—
Recognized net actuarial loss		199			1,885			123			844			426			1,910			199			1,885

Net pension expense	$	1,275		$	3,776		$	1,267		$	2,428		$	1,603		$	3,636		$	1,275		$	3,776


	Nine Months Ended September 30,
	2012						2011
	Non-U.S.			U.S.			Non-U.S.			U.S.
Service cost	$	3,306		$	7,237		$	3,387		$	6,456
Interest cost		4,025			6,556			4,256			6,428
Return on plan assets		(4,001	)		(8,379	)		(4,306	)		(8,304	)
Amortization of prior service cost		—			171			—			170
Amortization of transition obligation		—			—			56			—
Recognized net actuarial loss		600			5,563			366			2,531

Net pension expense	$	3,930		$	11,148		$	3,759		$	7,281


	Nine Months Ended September 30,
	2013						2012
	Non-U.S.			U.S.			Non-U.S.			U.S.
Service cost	$	4,089		$	8,043		$	3,306		$	7,237
Interest cost		3,793			6,787			4,025			6,556
Return on plan assets		(4,351	)		(9,827	)		(4,001	)		(8,379	)
Amortization of prior service cost		—			171			—			171
Recognized net actuarial loss		1,226			5,730			600			5,563

Net pension expense	$	4,757		$	10,904		$	3,930		$	11,148

During the three and nine months ended September 30, ~~2012,~~2013, we made contributions to our pension plans totaling $3$5 million and $13 million, respectively. ~~We expect the funding to our non-U.S. and U.S. plans in 2012, subject to applicable law, to be approximately $17 million.~~

Note 1112 — 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. 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. During the nine months ended September 30, 2011, we maintained certain foreign currency forward contracts that did not qualify under the Financial Accounting Standards Board (“FASB”) standards for hedge accounting treatment and therefore, changes in fair values were recognized as either income or loss in our consolidated income statement.

For foreign currency forward contracts, hedge effectiveness is evaluated at inception based on the matching of critical terms between derivative contracts and the hedged item. ~~For interest rate swaps, we evaluate all material terms between the swap and the underlying debt obligation, known in FASB standards as the “long-haul method.”~~ Any change in fair value resulting from ineffectiveness is recognized immediately in earnings.

~~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)~~

Cash Flow Hedges

Our North Sea and Brazil operations have a significant amount of their cash operating expenses payable in local currencies. To limit the potential risk of currency fluctuations, we ~~have historically maintained short-term~~periodically enter into forward contracts, ~~settling monthly~~all of which have a maturity of less than 12 months. The forward contracts maturing during the remainder of 2013 represent approximately 59 percent of these forecasted local currency requirements. The notional amount of the forward contracts outstanding, expressed in ~~their respective local currencies. At~~U.S. Dollars, was approximately $42 million at September 30, ~~2012, we had no outstanding derivative contracts.~~2013. Total unrealized gain related to these forward contracts was approximately $0.6 million as of September 30, 2013 and was recorded as part of “Accumulated other comprehensive loss” (“AOCL”).

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)

The balance of the net unrealized ~~gain/(loss)~~gain related to our cash flow hedges included in ~~“Accumulated other comprehensive loss” (“AOCL”)~~AOCL and related activity is as follows:

   Three Months Ended Nine Months Ended
   September 30, September 30,
   2012    2011 2012 2011
Net unrealized gain/(loss) at beginning of period
   $ —         $ 4,117    $ (3,061 ) $ 1,970
Activity during period:

Settlement of foreign currency forward contracts during the period
   —         (2,054 ) 3,061    (1,604 )
Settlement of interest rate swaps during the period
   —         —      —      (366 )
Net unrealized loss on outstanding foreign currency forward contracts
   —         (7,600 ) —      (5,537 )




Net unrealized gain/(loss) at end of period
   $ —         $ (5,537 ) $ —      $ (5,537 )


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013			2012		2013		2012
Net unrealized loss at beginning of period	$	(4,731	)	$	—	$	—	$	(3,061	)
Activity during period:
Settlement of foreign currency forward contracts during the period		2,849			—		—		3,061
Net unrealized gain on outstanding foreign currency forward contracts		2,471			—		589		—

Net unrealized gain at end of period	$	589		$	—	$	589	$	—

Financial Statement Presentation

The following tables, together with Note ~~12,~~13, summarize the financial statement presentation and fair value of our derivative positions as of September 30, ~~2012~~2013 and December 31, ~~2011:~~2012:


		Estimated fair value					Estimated fair value
	Balance sheet classification	September 30, 2012		December 31, 2011		Balance sheet classification	September 30, 2013		December 31, 2012
Asset derivatives
Cash flow hedges
Short-term foreign currency forward contracts						Other current assets	$	1,927	$	—
Liability derivatives
Cash flow hedges
Short-term foreign currency forward contracts	Other current liabilities	$	—	$	3,061	Other current liabilities	$	1,338	$	—

To supplement the fair value disclosures in Note ~~12,~~13, the following summarizes the recognized gains and losses of cash flow hedges ~~and non-designated derivatives~~ through AOCL or through “other income” for the three months ended September 30, ~~2012~~2013 and ~~2011:~~2012:


	Gain/(loss) recognized through AOCL					Gain/(loss) reclassified from AOCL to “other income”					Gain/(loss) recognized through “other income”				Gain/(loss) recognized through AOCL				Gain/(loss) reclassified from AOCL to “other income”				Gain/(loss) recognized through “other income”
	2012		2011			2012		2011			2012		2011		2013		2012		2013		2012		2013		2012
Cash flow hedges
Foreign currency forward contracts	$	—	$	(7,600	)	$	—	$	(2,054	)	$	—	$	—	$	2,471	$	—	$	2,849	$	—	$	—	$	—

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)

To supplement the fair value disclosures in Note ~~12,~~13, the following summarizes the recognized gains and losses of cash flow hedges ~~and non-designated derivatives~~ through AOCL or through “other income” for the nine months ended September 30, ~~2012~~2013 and ~~2011:~~2012:


	Gain/(loss) recognized through AOCL					Gain/(loss) reclassified from AOCL to “other income”					Gain/(loss) recognized through “other income”					Gain/(loss) recognized through AOCL					Gain/(loss) reclassified from AOCL to “other income”				Gain/(loss) recognized through “other income”
	2012		2011			2012		2011			2012		2011			2013			2012		2013		2012		2013		2012
Cash flow hedges
Foreign currency forward contracts	$	—	$	(5,537	)	$	3,061	$	(1,604	)	$	—	$	—		$	(2,525	)	$	—	$	3,114	$	3,061	$	—	$	—
Interest rate swaps		—		—			—		(366	)		—		—
Non-designated derivatives
Foreign currency forward contracts	$	—	$	—		$	—	$	—		$	—	$	(546	)

Note 1213 — 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:


	September 30, 2012								December 31, 2011				September 30, 2013
			Estimated Fair Value Measurements												Estimated Fair Value Measurements
			Quoted		Significant										Quoted		Significant
			Prices in		Other		Significant								Prices in		Other		Significant
			Active		Observable		Unobservable								Active		Observable		Unobservable
	Carrying		Markets		Inputs		Inputs		Carrying		Estimated		Carrying		Markets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)		Amount		Fair Value		Amount		(Level 1)		(Level 2)		(Level 3)
Assets—
Marketable securities	$	5,745	$	5,745	$	—	$	—	$	4,701	$	4,701	$	7,072	$	7,072	$	—	$	—
Foreign currency forward contracts														1,927		—		1,927		—
Liabilities—
Foreign currency forward contracts	$	—	$	—	$	—	$	—	$	3,061	$	3,061	$	1,338	$	—	$	1,338	$	—

~~At the time of valuation, the derivative~~

December 31, 2012

Estimated Fair Value Measurements

Quoted

Significant

Prices in

Other

Significant

Active

Observable

Unobservable

Carrying

Markets

Inputs

Amount

(Level 1)

(Level 2)

(Level 3)

Assets—

Marketable securities

5,816

—

The foreign currency instruments ~~were~~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.

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 1314 — Accumulated Other Comprehensive Loss

The following tables set forth the changes in AOCL by component for the three and nine months ended September 30, 2013. All amounts within the tables are shown net of tax.


	Three months ended September 30, 2013
	Gain / (Loss)			Defined
	on			Benefit			Foreign
	Cash Flow			Pension			Currency
	Hedges⁽¹⁾			Items⁽²⁾			Items			Total
Balance at beginning of period	$	(4,731	)	$	(91,797	)	$	(19,901	)	$	(116,429	)

Activity during period:
Other comprehensive income/(loss) before reclassifications		2,471			—			(1,135	)		1,336
Amounts reclassified from AOCL		2,849			1,661			—			4,510

Net current period other comprehensive income/(loss)		5,320			1,661			(1,135	)		5,846

Balance at end of period	$	589		$	(90,136	)	$	(21,036	)	$	(110,583	)


	Nine months ended September 30, 2013
				Defined
	Gain on			Benefit			Foreign
	Cash Flow			Pension			Currency
	Hedges⁽¹⁾			Items⁽²⁾			Items			Total
Balance at beginning of period	$	—		$	(95,071	)	$	(20,378	)	$	(115,449	)

Activity during period:
Other comprehensive income/(loss) before reclassifications		589			—			(658	)		(69	)
Amounts reclassified from AOCL		—			4,935			—			4,935

Net current period other comprehensive income/(loss)		589			4,935			(658	)		4,866

Balance at end of period	$	589		$	(90,136	)	$	(21,036	)	$	(110,583	)

(1)	Gain / (loss) on cash flow hedges are related to our foreign currency forward contracts. Reclassifications from AOCL are recognized through “other income” on our Consolidated Statement of Income. See Note 12 for additional information.

(2)

Defined benefit pension items relate to actuarial losses and the amortization of prior service costs. Reclassifications from AOCL are recognized as expense on our Consolidated Statement of Income through either “contract drilling services” or “general and administrative”. See Note 11 for additional information

Note 15 — Commitments and Contingencies

TheNoble Homer Ferrington was under contract with a subsidiary of ExxonMobil Corporation (“ExxonMobil”), which entered into an assignment agreement with BP for a two-well farmout of the rig in Libya after successfully drilling two wells with the rig for ExxonMobil. In August 2010, BP attempted to terminate the assignment agreement claiming that the rig was not in the required condition, and ExxonMobil informed us that we must look to BP for payment of the dayrate during the assignment period. In August 2010, we initiated arbitration proceedings under the drilling contract against both BP and ExxonMobil. We do not believe BP had the right to terminate the assignment agreement and believe the rig was ready to operate under the drilling contract. The rig operated under farmout arrangements from March 2011 to the conclusion of the contract in the second quarter of 2012. We believe we are owed dayrate by either or both of these clients. The operating dayrate was approximately $538,000 per day for the work in Libya. The arbitration process is proceeding, and we intend to vigorously pursue these claims. As a result of the uncertainties noted above, we have not recognized any revenue during the assignment ~~period and the matter could have a material positive effect on our results of operations or cash flows in the period the matter is resolved should the arbitration panel ultimately rule in our favor.~~period.

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)

In August 2007, we entered into a drilling contract with Marathon Oil Company (“Marathon”) for theNoble Jim Day to operate in the U.S. Gulf of Mexico. On January 1, 2011, Marathon provided notice that it was terminating the contract. Marathon’s stated reason for the termination was that the rig had not been accepted by Marathon by December 31, 2010, and Marathon also maintained that a force majeure condition existed under the contract. The contract contained a provision allowing Marathon to terminate if the rig had not commenced operations by December 31, 2010. We believe the rig was ready to commence operations and should have been accepted by Marathon. The contract term was for four years. No revenue has been recognized under this contract. We have contracted the rig for much of the original term with other customers. In March 2011, we filed suit in Texas State District Court against Marathon seeking damages for its actions. ~~The suit is proceeding~~We are in advanced settlement discussions with Marathon and ~~is currently in~~have postponed the ~~discovery phase.~~trial date. We cannot ~~provide assurance as to~~predict the outcome of this ~~lawsuit.~~lawsuit, including any settlement discussions.

In November 2012, the U.S. Coast Guard in Alaska conducted an inspection of our drillship, theNoble Discoverer, and cited a number of deficiencies to be remediated, including issues relating to the main propulsion and safety management systems. We initiated a comprehensive effort to address the deficiencies identified by the Coast Guard and commenced an ongoing dialogue with the agency to keep it apprised of our progress. We began an internal investigation in conjunction with the Coast Guard inspection, and the Coast Guard then began its own investigation. We reported certain potential violations of applicable law to the Coast Guard identified as a result of our internal investigation. These related to what we believe were certain unauthorized disposals of collected deck and sea water from theNoble Discoverer, collected, treated deck water from theKulluk and potential record-keeping issues with the oil record books for theNoble Discoverer, Kulluk and other rigs, and with the garbage log for theKulluk. The Coast Guard referred theNoble Discoverer andKulluk matters to the U.S. Department of Justice (“DOJ”) for further investigation. We are cooperating with the DOJ and Coast Guard in connection with their investigation, and are maintaining a dialogue with the DOJ. We cannot predict when the DOJ and Coast Guard will conclude the investigation and cannot provide any assurances with respect to the outcome. If the DOJ or Coast Guard determines that violations of applicable law have occurred, they could seek civil and criminal sanctions, including monetary penalties and operational sanctions, against us and/or certain of our employees, as well as oversight of our operational compliance programs. Based on information obtained to date, we believe it is probable that we will have to pay some amount in fines and penalties to resolve this matter. However, at this time we cannot appropriately estimate the potential liability that may result and we have not made any accrual in our consolidated financial statements at September 30, 2013 related to the matter.

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 September 30, ~~2012,~~2013, there were 2933 asbestos related lawsuits in which we are one of many defendants. These lawsuits have been filed in the United States in the states of Louisiana, Mississippi and Texas. We intend to vigorously defend against the litigation. We do not believe the ultimate resolution of these matters will have a material adverse effect on our financial position, results of operations or cash flows.

We are a defendant in certain claims and litigation arising out of operations in the ordinary course of business, including certain disputes with customers over receivables discussed in Note 7,4, the resolution of which, in the opinion of management, will not be material to our financial position, results of operations or cash flows. There is inherent risk in any litigation or dispute and no assurance can be given as to the outcome of these claims.

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)

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. The U.S. Internal Revenue Service (“IRS”) has completed its ~~audit~~ examination of our ~~2008 U.S.~~ tax ~~return and proposed~~reporting for the taxable year ended December 31, 2008. In June 2013, the IRS examination team notified us that they were no longer proposing any adjustments ~~and deficiencies~~ with respect to ~~certain items that were reported by us~~our tax reporting for the taxable year ended December 31, 2008. We are due a refund for the 2008 tax ~~year.~~year, and our refund claim is currently under review. The IRS began its examination of our tax reporting for the taxable year ended December 31, 2009. We believe that we have accurately reported all amounts in our 2008 tax return, and have filed protests with the IRS Office of Appeals contesting the examination team’s proposed adjustments. A conference has been scheduled in December 2012 to discuss these items. We intend to vigorously defend our reported positions. Our 2009 tax return is under audit, and we expect to receive additional Information Document Requests in the coming months. During the third quarter, a U.S. subsidiary of Frontier concluded its audit with the IRS for its 2007 and 2008 tax returns, resulting in no change to income tax expense.returns. Furthermore, we are currently contesting several non-U.S. tax assessments and may contest future ~~assessments when we disagree with those assessments based on the technical merits of the positions established at the time of the filing of the tax return.~~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. We cannot predict or provide assurance as to the ultimate outcome of ~~the~~any existing or future assessments.

~~Our~~During the second quarter of 2013, we reached an agreement with the Mexican ~~income~~ tax ~~returns have been examined~~authorities resolving certain previously disclosed tax assessments. This settlement removes potential contingent tax exposure of $502 million in Mexico for periods prior to 2007, which includes the assessments for years 2002 through ~~2007 periods and audit claims~~2005 of approximately $348 million, as well as settlement for 2006. The settlement of these assessments did not have been assessed for approximately $326 million (including interest and penalties). During 2011, we received from the Regional Chamber of the Federal Tax Court adverse decisions with respect to approximately $6 million in assessments related to depreciation deductions, which we are appealing. We are also contesting all other assessments in Mexico. Tax authorities in Mexico and other jurisdictions may issue additional assessments or pursue legal actions as a ~~result of tax audits and we cannot predict or provide assurance as to the ultimate outcome of such assessments and legal actions.~~material impact on our consolidated financial statements.

~~Additional audit~~Audit claims of approximately ~~$91~~$300 million attributable to income, customs and other business taxes have been assessed against ~~us in other jurisdictions.~~us. We have contested, or intend to contest, these assessments, including through litigation if necessary, and we believe the ultimate resolution, for which we have not made any accrual, will not have a material adverse effect on our consolidated financial statements. Tax authorities may issue additional assessments or pursue legal actions as a result of tax audits and we cannot predict or provide assurance as to the ultimate outcome of such assessments and legal actions.

~~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)~~

We maintain certain insurance coverage against specified marine perils, which includes physical damage and loss of hire. Damage caused by hurricanes has negatively impacted the energy insurance market, resulting in more restrictive and expensive coverage for U.S. named windstorm perils. Accordingly, we have elected to significantly reduce the named windstorm insurance on our rigs operating in the U.S. Gulf of Mexico. Presently, we insure theNoble Jim Thompson,Noble Amos Runner andNoble Driller for “total loss only” when caused by a named windstorm. ~~Our~~For theNoble Bully I, our customer assumes the risk of loss ~~on the~~~~Noble Bully I~~due to a named windstorm event, ~~up to $450 million per occurrence~~ pursuant to the terms of the drilling contract, ~~relating to such vessel, provided~~through the purchase of insurance coverage (provided that we are responsible for any deductible under such policy) or, at its option, the ~~first $25 million per occurrence for~~assumption of the risk of loss up to the insured value in lieu of the purchase of such ~~named windstorm events.~~insurance. The remaining rigs in the U.S. Gulf of Mexico are self-insured for named windstorm perils. Our remaining rigs, ~~located~~including those in the Mexico portion of the Gulf of Mexico, ~~remain~~continue to be covered by commercial insurance for windstorm damage. In addition, we maintain physical damage deductibles on our rigs ranging from $15 million to $25 million per occurrence, depending on location. 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 expatriate activities prohibited by U.S. laws and regulations, radiation hazards, certain loss or damage to property on board our rigs and losses relating to shore-based terrorist acts or strikes. If a significant accident or other event occurs and is not fully covered by insurance or contractual indemnity, it could materially adversely affect our financial position, results of operations or cash flows. Additionally, 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.

In January 2012, we were assessed a fine by the Brazilian government in the amount of R$1.8 million (approximately $887,000) in connection with the inadvertent discharge of drilling fluid from one of our rigs offshore Brazil in September 2011. We have accepted the assessment.

In October 2011, we were assessed a fine by the Brazilian government in the amount of R$238,000 (approximately $117,000) in connection with the inadvertent discharge of drilling fluid from one of our rigs offshore Brazil in November 2010. We have accepted the assessment.

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, with maximum liability coverage of $750 million.

In connection with our capital expenditure program, we had outstanding commitments, including shipyard and purchase commitments of approximately ~~$3.0~~$2.6 billion at September 30, ~~2012.~~2013.

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)

We have entered into 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.

~~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)~~

Nigerian Operations

During the fourth quarter of 2007, our Nigerian subsidiary received letters from the Nigerian Maritime Administration and Safety Agency (“NIMASA”) seeking to collect a 2 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. In August 2009, the court issued a favorable ruling in response to our originating summons stating that drilling operations do not fall within the cabotage laws and that drilling rigs are not vessels for purposes of those laws. The court also issued an injunction against the defendants prohibiting their interference with our drilling rigs or drilling operations. NIMASA has appealed the court’s ruling, although the court dismissed NIMASA’s lawsuit filed against us in February 2009. 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 had previously informed the Nigerian Content Division of its position that we were 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 had previously barred us from participating in new tenders as a result of NIMASA’s allegations, although the Division reversed its actions based on the favorable Federal High Court ruling. 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.

As previously disclosed, in November 2010 we finalized settlements with the SEC and the Department of Justice as the result of an internal investigation of the legality under the United States Foreign Corrupt Practices Act (“FCPA”) and local laws of certain reimbursement payments made by our Nigerian affiliate to our customs agents in Nigeria. In January 2011, a subsidiary of Noble-Swiss resolved an investigation by the Nigerian Economic and Financial Crimes Commission and the Nigerian Attorney General Office into these same activities. Any additional investigation by these or other agencies could damage our reputation and result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations in certain jurisdictions and might adversely affect our business, results of operations or financial condition. Further, resolving any additional investigations could be expensive and consume significant time and attention of our senior management.

Under the Nigerian Industrial Training Fund Act of 2004, as amended (the “Act”), Nigerian companies with five or more employees must contribute annually ~~one~~1 percent of their payroll to the Industrial Training Fund (“ITF”) established under the Act to be used for the training of Nigerian nationals with a view towards generating a pool of indigenously trained manpower. We have not paid this amount on our expatriate workers employed by our non-Nigerian employment entity in the past as we did not believe the contribution obligation was applicable to them. In October 2012, we received a demand from the ITF for payments going back to 2004 and associated penalties in respect of these expatriate employees. In February 2013, the ITF filed suit seeking payment of these amounts. We do not believe that we owe the amount ~~claimed and that, in the event we were to have any liability, it would be for an immaterial amount.~~claimed. We ~~continue to investigate the matter and~~ are ~~also engaged~~ in discussions with the ITF to resolve the ~~issue.~~issue and do not believe the resolution of this matter will have a material adverse effect on our financial position or cash flows.

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 1416 — Segment and Related Information

We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects 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 ~~in response~~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~~contract drilling services segment ~~currently~~ conducts contract drilling operations ~~principally~~ in the ~~U.S. Gulf of Mexico,~~United States, Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India, ~~Australia~~Asia and ~~the Asian Pacific.~~

~~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)~~

Australia.

We evaluate the performance of our operating segment ~~primarily~~ based on ~~operating~~ revenues from external customers and ~~net income.~~segment profit. Summarized financial information of our reportable ~~segments~~segment for the three and nine months ended September 30, 2013 and 2012 ~~and 2011 for Noble-Swiss and Noble-Cayman are~~is shown in the following table. The “Other” column includes results of labor contract drilling services in Canada and Alaska, as well as corporate related items. The consolidated financial statements of Noble-Swiss include the accounts of Noble-Cayman, and Noble-Swiss conducts substantially all of its business through Noble-Cayman and its subsidiaries. As a result, the summarized financial information for Noble-Cayman is substantially the same as Noble-Swiss.


	Noble-Swiss
	Three Months Ended September 30,																		Three Months Ended September 30,
	2012									2011									2013									2012
	Contract									Contract									Contract									Contract
	Drilling									Drilling									Drilling									Drilling
	Services			Other			Total			Services			Other			Total			Services			Other			Total			Services			Other			Total
Revenues from external customers	$	860,315		$	23,717		$	884,032		$	719,546		$	18,356		$	737,902		$	1,069,986		$	8,895		$	1,078,881		$	860,315		$	23,717		$	884,032
Depreciation and amortization		191,638			3,449			195,087			162,837			3,376			166,213			219,695			4,016			223,711			191,638			3,449			195,087
Segment operating income		173,285			5,639			178,924			159,588			3,994			163,582
Segment operating income/(loss)																				382,475			(4,094	)		378,381			173,285			5,639			178,924
Interest expense, net of amount capitalized		(121	)		(25,514	)		(25,635	)		(122	)		(11,408	)		(11,530	)		(317	)		(22,832	)		(23,149	)		(121	)		(25,514	)		(25,635	)
Income tax (provision) / benefit		(28,307	)		3,145			(25,162	)		(18,380	)		766			(17,614	)
Segment profit / (loss)		130,983			(16,209	)		114,774			141,199			(5,882	)		135,317
Income tax (provision)/benefit																				(59,854	)		4,024			(55,830	)		(28,307	)		3,145			(25,162	)
Segment profit/(loss)																				303,617			(21,660	)		281,957			130,983			(16,209	)		114,774
Total assets (at end of period)		13,983,223			477,183			14,460,406			12,472,018			479,515			12,951,533			15,058,076			671,255			15,729,331			13,983,223			477,183			14,460,406


	Noble-Cayman
	Three Months Ended September 30,																		Nine Months Ended September 30,
	2012									2011									2013									2012
	Contract									Contract									Contract									Contract
	Drilling									Drilling									Drilling									Drilling
	Services			Other			Total			Services			Other			Total			Services			Other			Total			Services			Other			Total
Revenues from external customers	$	860,315		$	23,717		$	884,032		$	719,546		$	18,356		$	737,902		$	3,022,966		$	44,275		$	3,067,241		$	2,519,930		$	60,715		$	2,580,645
Depreciation and amortization		191,638			2,957			194,595			162,837			2,882			165,719			631,396			11,060			642,456			539,698			10,081			549,779
Segment operating income		178,185			17,502			195,687			168,509			14,387			182,896			861,219			813			862,032			559,713			7,349			567,062
Interest expense, net of amount capitalized		(121	)		(25,514	)		(25,635	)		(122	)		(11,408	)		(11,530	)		(539	)		(74,576	)		(75,115	)		(315	)		(56,468	)		(56,783	)
Income tax (provision) / benefit		(28,307	)		3,523			(24,784	)		(18,380	)		1,082			(17,298	)
Segment profit / (loss)		135,883			(4,160	)		131,723			150,120			5,594			155,714
Income tax (provision)/benefit																				(138,695	)		11,689			(127,006	)		(102,005	)		8,898			(93,107	)
Segment profit/(loss)																				669,107			(60,470	)		608,637			434,561			(39,794	)		394,767
Total assets (at end of period)		13,983,223			440,287			14,423,510			12,472,018			439,780			12,911,798			15,058,076			671,255			15,729,331			13,983,223			477,183			14,460,406

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)

   Noble-Swiss
   Nine Months Ended September 30,
   2012 2011
   Contract Contract
   Drilling Drilling
   Services Other Total Services Other Total
Revenues from external customers
   $ 2,519,930    $ 60,715    $ 2,580,645    $ 1,897,045    $ 47,742    $ 1,944,787
Depreciation and amortization
   539,698    10,081    549,779    477,568    9,886    487,454
Segment operating income
   559,713    7,349    567,062    321,613    7,278    328,891
Interest expense, net of amount capitalized
   (315 ) (56,468 ) (56,783 ) (1,890 ) (43,510 ) (45,400 )
Income tax (provision) / benefit
   (102,005 ) 8,898    (93,107 ) (48,661 ) 6,180    (42,481 )
Segment profit / (loss)
   434,561    (39,794 ) 394,767    272,488    (28,593 ) 243,895
Total assets (at end of period)
   13,983,223    477,183    14,460,406    12,472,018    479,515    12,951,533

   Noble-Cayman
   Nine Months Ended September 30,
   2012 2011
   Contract Contract
   Drilling Drilling
   Services Other Total Services Other Total
Revenues from external customers
   $ 2,519,930    $ 60,715    $ 2,580,645    $ 1,897,045    $ 47,742    $ 1,944,787
Depreciation and amortization
   539,698    8,573    548,271    477,568    8,442    486,010
Segment operating income
   571,382    39,281    610,663    342,589    32,795    375,384
Interest expense, net of amount capitalized
   (315 ) (56,468 ) (56,783 ) (1,890 ) (43,510 ) (45,400 )
Income tax (provision) / benefit
   (102,005 ) 10,033    (91,972 ) (48,661 ) 7,181    (41,480 )
Segment profit / (loss)
   446,230    (6,885 ) 439,345    293,464    (1,272 ) 292,192
Total assets (at end of period)
   13,983,223    440,287    14,423,510    12,472,018    439,780    12,911,798

Note 1517 — Accounting Pronouncements

In ~~May 2011,~~February 2013, the FASB issued Accounting Standards Update (“ASU”) No. ~~2011-04,~~2013-02, which amends FASB Accounting Standards Codification (“ASC”) Topic ~~820, “Fair Value Measurements and Disclosures.~~220, “Comprehensive Income.” This amended guidance ~~clarifies the wording used to describe many of the requirements in accounting literature for measuring fair value and for disclosing~~requires additional information about ~~fair value measurements. The goal~~reclassification adjustments out of ~~the amendment is to create consistency between the United States~~comprehensive income, including changes in comprehensive income balances by component and ~~international accounting standards. The~~significant items reclassified out of comprehensive income. This guidance is effective for ~~annual and interim~~ reporting periods beginning ~~on or~~ after December 15, ~~2011. Our~~2012. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or financial disclosures.

In ~~June 2011,~~March 2013, the FASB issued ASU No. ~~2011-05,~~2013-05, which amends ASC Topic ~~220, “Comprehensive Income.~~830, “Foreign Currency Matters.” This ASU ~~allows an~~provides guidance on foreign currency translation adjustments when a parent entity ceases to ~~present the total~~have a controlling interest on a previously consolidated subsidiary or group of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.assets. The ~~amendment no longer allows an entity to show changes to other comprehensive income solely through the statement of equity. For publicly traded entities, the~~ guidance is effective for ~~annual and interim reporting periods~~fiscal years beginning on or after December 15, ~~2011. In December 2011,~~2013. We are still evaluating what impact, if any, the ~~FASB issued ASU No. 2011-12, which defers only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments. Our~~ adoption of this guidance ~~did not~~will have ~~a material impact~~ on our financial condition, results of operations, cash flows or financial disclosures.

~~NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES~~In July 2013, the FASB issued ASU No. 2013-11, which amends ASC Topic 740, “Taxes.” This ASU provides guidance on the presentation of tax benefits when a net operating loss carryforward or other tax credit carryforward exists. The guidance is effective for fiscal years beginning on or after December 15, 2013. We are still evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.

~~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 1618 — Net Change in Other Assets and Liabilities

The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows:


	Noble-Swiss						Noble-Cayman						Noble-Swiss						Noble-Cayman
	Nine months ended						Nine months ended						Nine months ended						Nine months ended
	September 30,						September 30,						September 30,						September 30,
	2012			2011			2012			2011			2013			2012			2013			2012
Accounts receivable	$	(163,051	)	$	(213,747	)	$	(163,051	)	$	(213,747	)	$	(92,073	)	$	(163,051	)	$	(92,073	)	$	(163,051	)
Other current assets		(58,303	)		(23,900	)		(59,764	)		(20,578	)		(50,738	)		(58,303	)		(49,791	)		(59,764	)
Other assets		(25,543	)		(37,171	)		(25,546	)		(39,649	)		(8,129	)		(25,543	)		(8,133	)		(25,546	)
Accounts payable		29,470			(23,744	)		29,353			(23,654	)		9,357			29,470			7,830			29,353
Other current liabilities		76,035			21,281			79,436			13,655			4,042			76,035			4,702			79,436
Other liabilities		70,382			33,566			64,215			33,540			35,231			70,382			35,227			64,215

	$	(71,010	)	$	(243,715	)	$	(75,357	)	$	(250,433	)	$	(102,310	)	$	(71,010	)	$	(102,238	)	$	(75,357	)

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 1719 — Guarantees of Registered Securities

Guarantees of Registered Securities

Noble-Cayman, or one or more subsidiaries of Noble-Cayman, are a co-issuer or guarantor or otherwise obligated as of September 30, ~~2012~~2013 as follows:


	Issuer
Notes	(Co-Issuer(s))	Guarantor(s)
~~$300 million 5.875% Senior Notes due 2013~~	~~Noble-Cayman~~	~~Noble Drilling Corporation (“NDC”);~~
		~~NHIL~~
$250 million 7.375% Senior Notes due 2014	NHIL	Noble-Cayman
$350 million 3.45% Senior Notes due 2015	NHIL	Noble-Cayman
$300 million 3.05% Senior Notes due 2016	NHIL	Noble-Cayman
$300 million 2.50% Senior Notes due 2017	NHIL	Noble-Cayman
$202 million 7.50% Senior Notes due 2019	NDC;	Noble-Cayman;
	Noble Drilling Services 6 LLC (“NDS6”)	Noble Holding (U.S.) Corporation (“NHC”);
		Noble Drilling Holding LLC (“NDH”)
$500 million 4.90% Senior Notes due 2020	NHIL	Noble-Cayman
$400 million 4.625% Senior Notes due 2021	NHIL	Noble-Cayman
$400 million 3.95% Senior Notes due 2022	NHIL	Noble-Cayman
$400 million 6.20% Senior Notes due 2040	NHIL	Noble-Cayman
$400 million 6.05% Senior Notes due 2041	NHIL	Noble-Cayman
$500 million 5.25% Senior Notes due 2042	NHIL	Noble-Cayman

The following consolidating financial statements of Noble-Cayman, NHC and NDH combined, NDC, NHIL, NDS6 and all other subsidiaries present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.

Revision

As part of our worldwide asset consolidation completed in 2009, NDC received a limited partnership interest in one of our Other Non-Guarantor Subsidiaries of Noble. This limited partnership interest has historically been included as a component of Total Shareholder Equity and income attributable to this limited partnership interest has been included in Net Income Attributable to Noble Corporation in the Other Non-Guarantor Subsidiaries of Noble column in the condensed consolidating financial statements.

During the first quarter of 2013, we amended the presentation of this limited partnership interest in the Other Non-guarantor Subsidiaries of Noble column to correctly present it as a noncontrolling interest and to record the income attributable to NDC as Net Income Attributable to Noncontrolling Interests. We also made appropriate adjustments to the Consolidating Adjustments column. We concluded these errors were not material individually or in the aggregate to any of the previously issued financial statements taken as a whole. The following chart presents the impact of this change in presentation in the Other Non-Guarantor Subsidiaries of Noble and Consolidating Adjustments columns on the historical Condensed Consolidating Balance Sheet and Condensed Consolidating Statement of Income. The revisions below did not impact our Condensed Consolidating Statement of Cash Flows.

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

~~CONDENSED CONSOLIDATING BALANCE SHEET~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~September 30, 2012~~

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

   Noble-
Cayman    NHC and NDH
Combined NDC NHIL    NDS6    Other
Non-guarantor
Subsidiaries of
Noble Consolidating
Adjustments Total
ASSETS

Current assets

Cash and cash equivalents
   $ —         $ 435    $ —      $ 19       $ —         $ 213,227    $ —      $ 213,681
Accounts receivable
   —         10,560    1,584    —         —         779,264    —      791,408
Taxes receivable
   —         25,502    —      —         —         92,852    —      118,354
Prepaid expenses
   —         444    20    —         —         61,072    —      61,536
Short-term notes receivable from affiliates
   —         119,476    —      —         —         252,138    (371,614 ) —
Accounts receivable from affiliates
   852,466       153,146    970,918    502,287       42,675       5,570,469    (8,091,961 ) —
Other current assets
   375       640    196    —         —         110,222    —      111,433








Total current assets
   852,841       310,203    972,718    502,306       42,675       7,079,244    (8,463,575 ) 1,296,412








Property and equipment, at cost
   —         2,616,145    75,591    —         —         13,910,239    —      16,601,975
Accumulated depreciation
   —         (300,637 ) (57,520 ) —         —         (3,460,572 ) —      (3,818,729 )








Property and equipment, net
   —         2,315,508    18,071    —         —         10,449,667    —      12,783,246








Notes receivable from affiliates
   3,816,463       1,206,000    —      3,524,814       479,107       2,171,875    (11,198,259 ) —
Investments in affiliates
   7,484,253       9,078,691    3,412,070    7,188,893       2,348,479       —      (29,512,386 ) —
Other assets
   6,296       535    654    26,740       790       308,837    —      343,852








Total assets
   $ 12,159,853       $ 12,910,937    $ 4,403,513    $ 11,242,753       $ 2,871,051       $ 20,009,623    $ (49,174,220 ) $ 14,423,510








LIABILITIES AND EQUITY

Current liabilities

Short-term notes payables from affiliates
   $ 90,314       $ 51,054    $ 110,770    $ —         $ —         $ 119,476    $ (371,614 ) $ —
Accounts payable
   —         2,720    644    —         —         294,605    —      297,969
Accrued payroll and related costs
   —         5,478    7,857    —         —         120,675    —      134,010
Accounts payable to affiliates
   848,091       4,628,552    4,593    152,009       68,819       2,389,897    (8,091,961 ) —
Interest payable
   6,093       —      —      17,128       630       —      —      23,851
Taxes payable
   —         9,007    —      —         —         117,105    —      126,112
Other current liabilities
   —         —      240    —         —         144,027    —      144,267








Total current liabilities
   944,498       4,696,811    124,104    169,137       69,449       3,185,785    (8,463,575 ) 726,209








Long-term debt
   644,975       —      —      3,792,759       201,695       —      —      4,639,429
Notes payable to affiliates
   2,840,287       648,475    —      975,000       1,342,000       5,392,497    (11,198,259 ) —
Deferred income taxes
   —         —      15,731    —         —         220,120    —      235,851
Other liabilities
   19,929       17,475    —      —         —         316,191    —      353,595








Total liabilities
   4,449,689       5,362,761    139,835    4,936,896       1,613,144       9,114,593    (19,661,834 ) 5,955,084








Commitments and contingencies

Total shareholder equity
   7,710,164       7,548,176    4,263,678    6,305,857       1,257,907       10,136,768    (29,512,386 ) 7,710,164
Noncontrolling interest
   —         —      —      —         —         758,262    —      758,262








Total equity
   7,710,164       7,548,176    4,263,678    6,305,857       1,257,907       10,895,030    (29,512,386 ) 8,468,426








Total liabilities and equity
   $ 12,159,853       $ 12,910,937    $ 4,403,513    $ 11,242,753       $ 2,871,051       $ 20,009,623    $ (49,174,220 ) $ 14,423,510


	Other Non-Guarantor
	Subsidiaries of Noble						Consolidating Adjustments
	As reported			As adjusted			As reported			As adjusted
December 31, 2010
Income statement- Twelve months ended
Net income	$	1,023,782		$	1,023,782		$	(2,963,512	)	$	(2,963,512	)
Net income attributable to noncontrolling interests		(3	)		(41,889	)		—			41,886

Net income attributable to Noble Corporation	$	1,023,779		$	981,893		$	(2,963,512	)	$	(2,921,626	)

December 31, 2011
Income statement- Twelve months ended
Net income	$	634,128		$	634,128		$	(1,758,285	)	$	(1,758,285	)
Net loss attributable to noncontrolling interests		7,273			(15,808	)		—			23,081

Net income attributable to Noble Corporation	$	641,401		$	618,320		$	(1,758,285	)	$	(1,735,204	)

Balance Sheet
Total shareholder equity	$	9,853,129		$	9,483,809		$	(28,268,572	)	$	(27,899,252	)
Noncontrolling interests		691,331			1,060,651			—			(369,320	)

Total equity	$	10,544,460		$	10,544,460		$	(28,268,572	)	$	(28,268,572	)

March 31, 2012
Income statement- Three months ended
Net income	$	173,657		$	173,657		$	(591,588	)	$	(591,588	)
Net income attributable to noncontrolling interests		6,832			(1,196	)		—			8,028

Net income attributable to Noble Corporation	$	180,489		$	172,461		$	(591,588	)	$	(583,560	)

June 30, 2012
Income statement- Three months ended
Net income	$	253,086		$	253,086		$	(662,439	)	$	(662,439	)
Net income attributable to noncontrolling interests		(18,857	)		(29,201	)		—			10,344

Net income attributable to Noble Corporation	$	234,229		$	223,885		$	(662,439	)	$	(652,095	)

Income statement- Six months ended
Net income	$	426,743		$	426,743		$	(1,254,027	)	$	(1,254,027	)
Net income attributable to noncontrolling interests		(12,025	)		(30,397	)		—			18,372

Net income attributable to Noble Corporation	$	414,718		$	396,346		$	(1,254,027	)	$	(1,235,655	)

September 30, 2012
Income statement- Three months ended
Net income	$	211,597		$	211,597		$	(569,368	)	$	(569,368	)
Net income attributable to noncontrolling interests		(14,906	)		(22,246	)		—			7,340

Net income attributable to Noble Corporation	$	196,691		$	189,351		$	(569,368	)	$	(562,028	)

Income statement- Nine months ended
Net income	$	638,340		$	638,340		$	(1,823,395	)	$	(1,823,395	)
Net income attributable to noncontrolling interests		(26,931	)		(52,643	)		—			25,712

Net income attributable to Noble Corporation	$	611,409		$	585,697		$	(1,823,395	)	$	(1,797,683	)

NOBLE CORPORATION (NOBLE-SWISS) AND SUBSIDIARIES

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

~~CONDENSED CONSOLIDATING BALANCE SHEET~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~December 31, 2011~~

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

   Noble-
Cayman NHC and NDH
Combined NDC NHIL NDS6 Other
Non-guarantor
Subsidiaries of
Noble Consolidating
Adjustments Total
ASSETS

Current assets

Cash and cash equivalents
   $ 146    $ 385    $ —      $ —      $ —      $ 234,525    $ —      $ 235,056
Accounts receivable
   —      10,810    3,371    —      —      572,982    —      587,163
Taxes receivable
   —      4,566    —      —      —      70,718    —      75,284
Prepaid expenses
   —      453    19    —      —      32,633    —      33,105
Short-term notes receivable from affiliates
   —      119,476    —      —      —      122,298    (241,774 ) —
Accounts receivable from affiliates
   1,683,740    99,202    879,581    159,132    33,905    6,372,657    (9,228,217 ) —
Other current assets
   —      643    196    93    —      119,177    —      120,109


Total current assets
   1,683,886    235,535    883,167    159,225    33,905    7,524,990    (9,469,991 ) 1,050,717


Property and equipment, at cost
   —      2,737,764    75,001    —      —      12,693,229    —      15,505,994
Accumulated depreciation
   —      (232,621 ) (54,599 ) —      —      (3,117,369 ) —      (3,404,589 )


Property and equipment, net
   —      2,505,143    20,402    —      —      9,575,860    —      12,101,405


Notes receivable from affiliates
   3,842,062    675,000    —      2,336,527    572,107    2,678,192    (10,103,888 ) —
Investments in affiliates
   6,969,201    9,101,938    3,450,212    6,605,771    2,141,450    —      (28,268,572 ) —
Other assets
   3,230    473    483    18,548    880    281,669    —      305,283


Total assets
   $ 12,498,379    $ 12,518,089    $ 4,354,264    $ 9,120,071    $ 2,748,342    $ 20,060,711    $ (47,842,451 ) $ 13,457,405


LIABILITIES AND EQUITY

Current liabilities

Short-term notes payables from affiliates
   $ 72,298    $ 50,000    $ —      $ —      $ —      $ 119,476    $ (241,774 ) $ —
Accounts payable
   —      5,577    985    —      —      429,167    —      435,729
Accrued payroll and related costs
   —      2,897    6,518    —      —      99,493    —      108,908
Accounts payable to affiliates
   2,079,719    4,166,021    27,341    112,953    34,107    2,808,076    (9,228,217 ) —
Interest payable
   1,891    —      —      48,116    4,412    —      —      54,419
Taxes payable
   —      10,032    —      —      —      81,158    —      91,190
Other current liabilities
   —      —      240    —      —      123,159    —      123,399


Total current liabilities
   2,153,908    4,234,527    35,084    161,069    38,519    3,660,529    (9,469,991 ) 813,645


Long-term debt
   1,274,949    —      —      2,595,320    201,695    —      —      4,071,964
Notes payable to affiliates
   1,667,291    1,147,500    85,000    975,000    811,000    5,418,097    (10,103,888 ) —
Deferred income taxes
   —      —      15,731    —      —      227,060    —      242,791
Other liabilities
   19,929    24,878    —      —      —      210,565    —      255,372


Total liabilities
   5,116,077    5,406,905    135,815    3,731,389    1,051,214    9,516,251    (19,573,879 ) 5,383,772


Commitments and contingencies

Total shareholder equity
   7,382,302    7,111,184    4,218,449    5,388,682    1,697,128    9,853,129    (28,268,572 ) 7,382,302
Noncontrolling interest
   —      —      —      —      —      691,331    —      691,331


Total equity
   7,382,302    7,111,184    4,218,449    5,388,682    1,697,128    10,544,460    (28,268,572 ) 8,073,633


Total liabilities and equity
   $ 12,498,379    $ 12,518,089    $ 4,354,264    $ 9,120,071    $ 2,748,342    $ 20,060,711    $ (47,842,451 ) $ 13,457,405


	Other Non-Guarantor
	Subsidiaries of Noble						Consolidating Adjustments
	As reported			As adjusted			As reported			As adjusted
December 31, 2012
Income statement- Twelve months ended
Net income	$	280,763		$	280,763		$	(1,891,202	)	$	(1,891,202	)
Net income attributable to noncontrolling interests		(33,793	)		(68,969	)		—			35,176

Net income attributable to Noble Corporation	$	246,970		$	211,794		$	(1,891,202	)	$	(1,856,026	)

Balance Sheet
Total shareholder equity	$	9,913,839		$	9,509,343		$	(29,719,135	)	$	(29,314,639	)
Noncontrolling interests		765,124			1,169,620			—			(404,496	)

Total equity	$	10,678,963		$	10,678,963		$	(29,719,135	)	$	(29,719,135	)

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2013

(in thousands)


	Noble-		NHC and NDH										Subsidiaries			Consolidating
	Cayman		Combined			NDC			NHIL		NDS6		of Noble			Adjustments			Total
ASSETS
Current assets
Cash and cash equivalents	$	5	$	123		$	—		$	8	$	—	$	173,581		$	—		$	173,717
Accounts receivable		—		59,250			3,388			—		—		803,108			—			865,746
Taxes receivable		—		41,407			—			—		—		101,831			—			143,238
Prepaid expenses		—		749			8			—		—		48,572			—			49,329
Short-term notes receivable from affiliates		—		869,476			—			—		606,269		319,201			(1,794,946	)		—
Accounts receivable from affiliates		978,461		157,252			1,154,776			172,379		65,991		6,311,688			(8,840,547	)		—
Other current assets		—		4,418			196			—		—		129,390			—			134,004

Total current assets		978,466		1,132,675			1,158,368			172,387		672,260		7,887,371			(10,635,493	)		1,366,034

Property and equipment, at cost		—		2,518,896			77,253			—		—		15,973,482			—			18,569,631
Accumulated depreciation		—		(328,045	)		(61,592	)		—	��	—		(4,136,365	)		—			(4,526,002	)

Property and equipment, net		—		2,190,851			15,661			—		—		11,837,117			—			14,043,629

Notes receivable from affiliates		3,816,463		675,000			—			3,524,814		5,000		1,827,879			(9,849,156	)		—
Investments in affiliates		8,507,009		12,100,603			3,310,205			8,521,927		2,332,612		—			(34,772,356	)		—
Other assets		6,144		5,266			266			23,395		668		246,217			—			281,956

Total assets	$	13,308,082	$	16,104,395		$	4,484,500		$	12,242,523	$	3,010,540	$	21,798,584		$	(55,257,005	)	$	15,691,619

LIABILITIES AND EQUITY
Current liabilities
Short-term notes payables from affiliates	$	78,016	$	127,036		$	114,149		$	—	$	750,000	$	725,745		$	(1,794,946	)	$	—
Accounts payable		—		4,338			537			—		—		311,058			—			315,933
Accrued payroll and related costs		—		8,085			8,865			—		—		112,220			—			129,170
Accounts payable to affiliates		1,061,152		4,998,213			3,908			236,008		77,296		2,463,970			(8,840,547	)		—
Taxes payable		—		13,434			9			—		—		116,628			—			130,071
Other current liabilities		496		5,270			240			17,128		630		178,658			—			202,422

Total current liabilities		1,139,664		5,156,376			127,708			253,136		827,926		3,908,279			(10,635,493	)		777,596

Long-term debt		1,312,864		—			—			3,793,279		201,695		—			—			5,307,838
Notes payable to affiliates		2,557,787		586,979			—			975,000		811,000		4,918,390			(9,849,156	)		—
Deferred income taxes		—		—			15,731			—		—		171,917			—			187,648
Other liabilities		19,930		23,106			—			—		—		349,407			—			392,443

Total liabilities		5,030,245		5,766,461			143,439			5,021,415		1,840,621		9,347,993			(20,484,649	)		6,665,525

Commitments and contingencies
Total shareholder equity		8,277,837		10,337,934			4,341,061			7,221,108		1,169,919		11,261,974			(34,331,996	)		8,277,837
Noncontrolling interest		—		—			—			—		—		1,188,617			(440,360	)		748,257

Total equity		8,277,837		10,337,934			4,341,061			7,221,108		1,169,919		12,450,591			(34,772,356	)		9,026,094

Total liabilities and equity	$	13,308,082	$	16,104,395		$	4,484,500		$	12,242,523	$	3,010,540	$	21,798,584		$	(55,257,005	)	$	15,691,619

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2012

(in thousands)


													Other
													Non-guarantor
	Noble-		NHC and NDH										Subsidiaries			Consolidating
	Cayman		Combined			NDC			NHIL		NDS6		of Noble			Adjustments			Total
ASSETS
Current assets
Cash and cash equivalents	$	1,003	$	904		$	—		$	2	$	—	$	275,466		$	—		$	277,375
Accounts receivable		—		14,885			3,335			—		—		725,453			—			743,673
Taxes receivable		—		8,341			—			—		—		103,969			—			112,310
Prepaid expenses		—		396			9			—		—		40,827			—			41,232
Short-term notes receivable from affiliates		—		119,476			—			—		586,769		252,138			(958,383	)		—
Accounts receivable from affiliates		664,375		140,014			1,015,204			526,483		38,895		5,855,066			(8,240,037	)		—
Other current assets		235		639			196			—		—		121,579			—			122,649

Total current assets		665,613		284,655			1,018,744			526,485		625,664		7,374,498			(9,198,420	)		1,297,239

Property and equipment, at cost		—		2,735,223			76,428			—		—		14,123,496			—			16,935,147
Accumulated depreciation		—		(283,028	)		(58,411	)		—		—		(3,597,079	)		—			(3,938,518	)

Property and equipment, net		—		2,452,195			18,017			—		—		10,526,417			—			12,996,629

Notes receivable from affiliates		3,816,463		1,206,000			—			3,524,814		479,107		2,171,875			(11,198,259	)		—
Investments in affiliates		7,770,066		9,170,923			3,386,879			7,413,361		1,977,906		—			(29,719,135	)		—
Other assets		5,798		320			543			25,895		759		243,243			—			276,558

Total assets	$	12,257,940	$	13,114,093		$	4,424,183		$	11,490,555	$	3,083,436	$	20,316,033		$	(50,115,814	)	$	14,570,426

LIABILITIES AND EQUITY
Current liabilities
Short-term notes payables from affiliates	$	90,314	$	51,054		$	110,770		$	—	$	—	$	706,245		$	(958,383	)	$	—
Accounts payable		—		6,522			1,183			—		—		341,889			—			349,594
Accrued payroll and related costs		—		6,176			7,611			—		—		110,149			—			123,936
Accounts payable to affiliates		900,063		4,806,235			5,444			165,065		77,075		2,286,155			(8,240,037	)		—
Taxes payable		—		9,152			—			—		—		121,692			—			130,844
Other current liabilities		1,594		—			240			62,430		4,412		158,259			—			226,935

Total current liabilities		991,971		4,879,139			125,248			227,495		81,487		3,724,389			(9,198,420	)		831,309

Long-term debt		639,794		—			—			3,792,886		201,695		—			—			4,634,375
Notes payable to affiliates		2,840,287		648,475			—			975,000		1,342,000		5,392,497			(11,198,259	)		—
Deferred income taxes		—		—			15,731			—		—		210,314			—			226,045
Other liabilities		19,930		17,815			—			—		—		309,870			—			347,615

Total liabilities		4,491,982		5,545,429			140,979			4,995,381		1,625,182		9,637,070			(20,396,679	)		6,039,344

Commitments and contingencies
Total shareholder equity		7,765,958		7,568,664			4,283,204			6,495,174		1,458,254		9,509,343			(29,314,639	)		7,765,958
Noncontrolling interest		—		—			—			—		—		1,169,620			(404,496	)		765,124

Total equity		7,765,958		7,568,664			4,283,204			6,495,174		1,458,254		10,678,963			(29,719,135	)		8,531,082

Total liabilities and equity	$	12,257,940	$	13,114,093		$	4,424,183		$	11,490,555	$	3,083,436	$	20,316,033		$	(50,115,814	)	$	14,570,426

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended September 30, 2013

(in thousands)


																Other
																Non-guarantor
	Noble-			NHC and NDH												Subsidiaries			Consolidating
	Cayman			Combined			NDC			NHIL			NDS6			of Noble			Adjustments			Total
Operating revenues
Contract drilling services	$	—		$	67,831		$	5,126		$	—		$	—		$	991,221		$	(23,060	)	$	1,041,118
Reimbursables		—			1,796			—			—			—			27,446			—			29,242
Labor contract drilling services		—			—			—			—			—			8,493			—			8,493
Other		—			—			—			—			—			28			—			28

Total operating revenues		—			69,627			5,126			—			—			1,027,188			(23,060	)		1,078,881

Operating costs and expenses
Contract drilling services		1,665			24,776			2,231			29,339			—			451,162			(23,060	)		486,113
Reimbursables		—			1,509			—			—			—			22,162			—			23,671
Labor contract drilling services		—			—			—			—			—			8,153			—			8,153
Depreciation and amortization		—			15,937			1,174			—			—			206,065			—			223,176
General and administrative		252			831			—			2,672			—			3,496			—			7,251
Loss on impairment		—			—			—			—			—			3,585			—			3,585
Gain on disposal of assets, net		—			—			—			—			—			(35,646	)		—			(35,646	)
Gain on contract settlements/extinguishments, net		(45,000	)		—			—			—			—			—			—			(45,000	)

Total operating costs and expenses		(43,083	)		43,053			3,405			32,011			—			658,977			(23,060	)		671,303

Operating income (loss)		43,083			26,574			1,721			(32,011	)		—			368,211			—			407,578
Other income (expense)
Equity earnings in affiliates, net of tax		301,048			189,686			40,619			330,102			(1,381,410	)		—			519,955			—
Interest expense, net of amounts capitalized		(34,941	)		(5,604	)		(503	)		(32,646	)		(14,998	)		(1,548,475	)		1,614,018			(23,149	)
Interest income and other, net		1,664			20,354			(7	)		44,809			1,524,744			22,869			(1,614,018	)		415

Income before income taxes		310,854			231,010			41,830			310,254			128,336			(1,157,395	)		519,955			384,844
Income tax provision		—			(51,021	)		—			—			—			(4,467	)		—			(55,488	)

Net Income		310,854			179,989			41,830			310,254			128,336			(1,161,862	)		519,955			329,356
Net income attributable to noncontrolling interests		—			—			—			—			—			(34,004	)		15,502			(18,502	)

Net income attributable to Noble Corporation		310,854			179,989			41,830			310,254			128,336			(1,195,866	)		535,457			310,854

Other comprehensive income, net		5,846			—			—			—			—			5,846			(5,846	)		5,846

Comprehensive income attributable to Noble Corporation	$	316,700		$	179,989		$	41,830		$	310,254		$	128,336		$	(1,190,020	)	$	529,611		$	316,700

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Nine Months Ended September 30, 2013

(in thousands)


	Noble- Cayman			NHC and NDH Combined			NDC			NHIL			NDS6			Other Non-guarantor Subsidiaries of Noble			Consolidating Adjustments			Total
Operating revenues
Contract drilling services	$	—		$	201,101		$	15,135		$	—		$	—		$	2,795,505		$	(66,431	)	$	2,945,310
Reimbursables		—			5,117			—			—			—			73,559			—			78,676
Labor contract drilling services		—			—			—			—			—			43,150			—			43,150
Other		—			—			—			—			—			105			—			105

Total operating revenues		—			206,218			15,135			—			—			2,912,319			(66,431	)		3,067,241

Operating costs and expenses
Contract drilling services		3,600			61,079			5,842			79,188			—			1,364,841			(66,431	)		1,448,119
Reimbursables		—			4,332			—			—			—			56,962			—			61,294
Labor contract drilling services		—			—			—			—			—			29,804			—			29,804
Depreciation and amortization		—			46,120			3,377			—			—			591,662			—			641,159
General and administrative		1,544			4,845			1			20,788			1			10,503			—			37,682
Loss on impairment		—			—			—			—			—			3,585			—			3,585
Gain on disposal of assets, net		—			—			—			—			—			(35,646	)		—			(35,646	)
Gain on contract settlements/extinguishments, net		(45,000	)		—			—			—			—			(1,800	)		—			(46,800	)

Total operating costs and expenses		(39,856	)		116,376			9,220			99,976			1			2,019,911			(66,431	)		2,139,197

Operating income (loss)		39,856			89,842			5,915			(99,976	)		(1	)		892,408			—			928,044
Other income (expense)
Equity earnings in affiliates, net of tax		736,942			392,101			53,787			796,217			(1,177,957	)		—			(801,090	)		—
Interest expense, net of amounts capitalized		(105,720	)		(18,604	)		(1,842	)		(99,911	)		(38,388	)		(1,595,902	)		1,785,252			(75,115	)
Interest income and other, net		4,941			42,205			(7	)		129,601			1,537,410			72,285			(1,785,252	)		1,183

Income before income taxes		676,019			505,544			57,853			725,931			321,064			(631,209	)		(801,090	)		854,112
Income tax provision		—			(41,278	)		—			—			—			(83,954	)		—			(125,232	)

Net Income		676,019			464,266			57,853			725,931			321,064			(715,163	)		(801,090	)		728,880
Net income attributable to noncontrolling interests		—			—			—			—			—			(88,725	)		35,864			(52,861	)

Net income attributable to Noble Corporation		676,019			464,266			57,853			725,931			321,064			(803,888	)		(765,226	)		676,019

Other comprehensive income, net		4,866			—			—			—			—			4,866			(4,866	)		4,866

Comprehensive income attributable to Noble Corporation	$	680,885		$	464,266		$	57,853		$	725,931		$	321,064		$	(799,022	)	$	(770,092	)	$	680,885

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended September 30, 2012

(in thousands)


	Noble- Cayman			NHC and NDH Combined			NDC			NHIL			NDS6			Other Non-guarantor Subsidiaries of Noble			Consolidating Adjustments			Total			Noble- Cayman			NHC and NDH Combined			NDC			NHIL			NDS6			Other Non-guarantor Subsidiaries of Noble				Consolidating Adjustments			Total
Operating revenues
Contract drilling services	$	—		$	36,149		$	5,061		$	—		$	—		$	809,858		$	(17,856	)	$	833,212		$	—		$	36,149		$	5,061		$	—		$	—		$	809,858			$	(17,856	)	$	833,212
Reimbursables		—			389			—			—			—			27,748			—			28,137			—			389			—			—			—			27,748				—			28,137
Labor contract drilling services		—			—			—			—			—			22,667			—			22,667			—			—			—			—			—			22,667				—			22,667
Other		—			—			—			—			—			16			—			16			—			—			—			—			—			16				—			16

Total operating revenues		—			36,538			5,061			—			—			860,289			(17,856	)		884,032			—			36,538			5,061			—			—			860,289				(17,856	)		884,032

Operating costs and expenses
Contract drilling services		1,355			13,948			1,919			19,636			—			425,223			(17,856	)		444,225			1,355			13,948			1,919			19,636			—			425,223				(17,856	)		444,225
Reimbursables		—			216			—			—			—			20,831			—			21,047			—			216			—			—			—			20,831				—			21,047
Labor contract drilling services		—			—			—			—			—			12,991			—			12,991			—			—			—			—			—			12,991				—			12,991
Depreciation and amortization		—			15,500			1,181			—			—			177,914			—			194,595			—			15,500			1,181			—			—			177,914				—			194,595
Selling, general and administrative		426			1,447			—			9,700			1			3,913			—			15,487
General and administrative																										426			1,447			—			9,700			1			3,913				—			15,487

Total operating costs and expenses		1,781			31,111			3,100			29,336			1			640,872			(17,856	)		688,345			1,781			31,111			3,100			29,336			1			640,872				(17,856	)		688,345

Operating income (loss)		(1,781	)		5,427			1,961			(29,336	)		(1	)		219,417			—			195,687			(1,781	)		5,427			1,961			(29,336	)		(1	)		219,417				—			195,687

Other income (expense)
Equity earnings in affiliates, net of tax		162,311			69,069			36,463			172,364			129,161			—			(569,368	)		—			162,311			69,069			36,463			172,364			129,161			—				(569,368	)		—
Interest expense, net of amounts capitalized		(30,496	)		(8,964	)		(852	)		(33,509	)		(11,832	)		(20,221	)		80,239			(25,635	)		(30,496	)		(8,964	)		(852	)		(33,509	)		(11,832	)		(20,221	)			80,239			(25,635	)
Interest income and other, net		1,689			11,080			9			37,430			2,846			28,546			(80,239	)		1,361			1,689			11,080			9			37,430			2,846			28,546				(80,239	)		1,361

Income before income taxes		131,723			76,612			37,581			146,949			120,174			227,742			(569,368	)		171,413			131,723			76,612			37,581			146,949			120,174			227,742				(569,368	)		171,413
Income tax provision		—			(8,639	)		—			—			—			(16,145	)		—			(24,784	)		—			(8,639	)		—			—			—			(16,145	)			—			(24,784	)
																																											��
Net Income		131,723			67,973			37,581			146,949			120,174			211,597			(569,368	)		146,629			131,723			67,973			37,581			146,949			120,174			211,597				(569,368	)		146,629
Net income attributable to noncontrolling interests		—			—			—			—			—			(14,906	)		—			(14,906	)		—			—			—			—			—			(22,246	)			7,340			(14,906	)

Net income attributable to Noble Corporation		131,723			67,973			37,581			146,949			120,174			196,691			(569,368	)		131,723			131,723			67,973			37,581			146,949			120,174			189,351				(562,028	)		131,723

Other comprehensive income, net		3,384			—			—			—			—			3,384			(3,384	)		3,384			3,384			—			—			—			—			3,384				(3,384	)		3,384

Comprehensive income attributable to Noble Corporation	$	135,107		$	67,973		$	37,581		$	146,949		$	120,174		$	200,075		$	(572,752	)	$	135,107		$	135,107		$	67,973		$	37,581		$	146,949		$	120,174		$	192,735			$	(565,412	)	$	135,107

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Nine Months Ended September 30, 2012

(in thousands)


	Noble- Cayman			NHC and NDH Combined			NDC			NHIL			NDS6			Other Non-guarantor Subsidiaries of Noble			Consolidating Adjustments			Total			Noble- Cayman			NHC and NDH Combined			NDC			NHIL			NDS6			Other Non-guarantor Subsidiaries of Noble			Consolidating Adjustments			Total
Operating revenues
Contract drilling services	$	—		$	117,488		$	14,941		$	—		$	—		$	2,352,618		$	(57,288	)	$	2,427,759		$	—		$	117,488		$	14,941		$	—		$	—		$	2,352,618		$	(57,288	)	$	2,427,759
Reimbursables		—			6,199			—			—			—			87,891			—			94,090			—			6,199			—			—			—			87,891			—			94,090
Labor contract drilling services		—			—			—			—			—			58,538			—			58,538			—			—			—			—			—			58,538			—			58,538
Other		—			—			—			—			—			1,190			(932	)		258			—			—			—			—			—			1,190			(932	)		258

Total operating revenues		—			123,687			14,941			—			—			2,500,237			(58,220	)		2,580,645			—			123,687			14,941			—			—			2,500,237			(58,220	)		2,580,645

Operating costs and expenses
Contract drilling services		3,794			42,642			5,529			56,048			—			1,231,176			(58,220	)		1,280,969			3,794			42,642			5,529			56,048			—			1,231,176			(58,220	)		1,280,969
Reimbursables		—			5,641			—			—			—			70,977			—			76,618			—			5,641			—			—			—			70,977			—			76,618
Labor contract drilling services		—			—			—			—			—			34,070			—			34,070			—			—			—			—			—			34,070			—			34,070
Depreciation and amortization		—			45,577			3,278			—			—			499,416			—			548,271			—			45,577			3,278			—			—			499,416			—			548,271
Selling, general and administrative		1,237			4,258			—			28,137			1			11,331			—			44,964
General and administrative																										1,237			4,258			—			28,137			1			11,331			—			44,964
Loss on impairment		—			—			—			—			—			18,345			—			18,345			—			—			—			—			—			18,345			—			18,345
Gain on contract settlements/extinguishments, net		—			(4,869	)		—			—			—			(28,386	)		—			(33,255	)		—			(4,869	)		—			—			—			(28,386	)		—			(33,255	)

Total operating costs and expenses		5,031			93,249			8,807			84,185			1			1,836,929			(58,220	)		1,969,982			5,031			93,249			8,807			84,185			1			1,836,929			(58,220	)		1,969,982

Operating income (loss)		(5,031	)		30,438			6,134			(84,185	)		(1	)		663,308			—			610,663			(5,031	)		30,438			6,134			(84,185	)		(1	)		663,308			—			610,663

Other income (expense)
Equity earnings in affiliates, net of tax		515,132			358,234			92,343			583,122			274,564			—			(1,823,395	)		—			515,132			358,234			92,343			583,122			274,564			—			(1,823,395	)		—
Interest expense, net of amounts capitalized		(76,396	)		(37,881	)		(3,040	)		(83,975	)		(31,020	)		(60,193	)		235,722			(56,783	)		(76,396	)		(37,881	)		(3,040	)		(83,975	)		(31,020	)		(60,193	)		235,722			(56,783	)
Interest income and other, net		5,640			29,771			4			99,609			8,771			96,295			(235,722	)		4,368			5,640			29,771			4			99,609			8,771			96,295			(235,722	)		4,368

Income before income taxes		439,345			380,562			95,441			514,571			252,314			699,410			(1,823,395	)		558,248			439,345			380,562			95,441			514,571			252,314			699,410			(1,823,395	)		558,248
Income tax provision		—			(30,902	)		—			—			—			(61,070	)		—			(91,972	)		—			(30,902	)		—			—			—			(61,070	)		—			(91,972	)

Net Income		439,345			349,660			95,441			514,571			252,314			638,340			(1,823,395	)		466,276			439,345			349,660			95,441			514,571			252,314			638,340			(1,823,395	)		466,276
Net income attributable to noncontrolling interests		—			—			—			—			—			(26,931	)		—			(26,931	)		—			—			—			—			—			(52,643	)		25,712			(26,931	)

Net income attributable to Noble Corporation		439,345			349,660			95,441			514,571			252,314			611,409			(1,823,395	)		439,345			439,345			349,660			95,441			514,571			252,314			585,697			(1,797,683	)		439,345

Other comprehensive income, net		2,244			—			—			—			—			2,244			(2,244	)		2,244			2,244			—			—			—			—			2,244			(2,244	)		2,244

Comprehensive income attributable to Noble Corporation	$	441,589		$	349,660		$	95,441		$	514,571		$	252,314		$	613,653		$	(1,825,639	)	$	441,589		$	441,589		$	349,660		$	95,441		$	514,571		$	252,314		$	587,941		$	(1,799,927	)	$	441,589

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

~~CONDENSED CONSOLIDATING STATEMENT OF INCOME~~

~~Three Months Ended September 30, 2011~~

~~(in thousands)~~

   Noble-
Cayman NHC and NDH
Combined NDC NHIL NDS6 Other
Non-guarantor
Subsidiaries of
Noble Consolidating
Adjustments Total
Operating revenues

Contract drilling services
   $ —      $ 38,955    $ 5,105    $ —      $ —      $ 680,617    $ (19,785 ) $ 704,892
Reimbursables
   —      691    —      —      —      16,747    —      17,438
Labor contract drilling services
   —      4    —      —      —      15,560    —      15,564
Other
   —      —      —      —      —      8    —      8


Total operating revenues
   —      39,650    5,105    —      —      712,932    (19,785 ) 737,902


Operating costs and expenses

Contract drilling services
   1,759    10,485    1,883    9,819    —      345,465    (19,785 ) 349,626
Reimbursables
   —      420    —      —      —      13,551    —      13,971
Labor contract drilling services
   —      —      —      —      —      8,053    —      8,053
Depreciation and amortization
   —      13,138    937    —      —      151,644    —      165,719
Selling, general and administrative
   2,094    1,488    —      9,253    —      4,802    —      17,637


Total operating costs and expenses
   3,853    25,531    2,820    19,072    —      523,515    (19,785 ) 555,006


Operating income (loss)
   (3,853 ) 14,119    2,285    (19,072 ) —      189,417    —      182,896
Other income (expense)

Equity earnings in affiliates, net of tax
   174,673    226,079    45,818    172,153    (20,624 ) —      (598,099 ) —
Interest expense, net of amounts capitalized
   (16,721 ) (15,612 ) (1,285 ) (21,641 ) (7,106 ) (267 ) 51,102    (11,530 )
Interest income and other, net
   1,615    6,906    (40 ) 15,813    2,277    26,415    (51,102 ) 1,884


Income before income taxes
   155,714    231,492    46,778    147,253    (25,453 ) 215,565    (598,099 ) 173,250
Income tax (provision) / benefit
   —      487    —      —      —      (17,785 ) —      (17,298 )


Net Income
   155,714    231,979    46,778    147,253    (25,453 ) 197,780    (598,099 ) 155,952
Net income attributable to noncontrolling interests
   —      —      —      —      —      (238 ) —      (238 )


Net income attributable to Noble Corporation
   155,714    231,979    46,778    147,253    (25,453 ) 197,542    (598,099 ) 155,714


Other comprehensive loss, net
   (13,896 ) —      —      —      —      (13,896 ) 13,896    (13,896 )


Comprehensive income attributable to Noble Corporation
   $ 141,818    $ 231,979    $ 46,778    $ 147,253    $ (25,453 ) $ 183,646    $ (584,203 ) $ 141,818

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

~~CONDENSED CONSOLIDATING STATEMENT OF INCOME~~

~~Nine Months Ended September 30, 2011~~

~~(in thousands)~~

   Noble-
Cayman NHC and NDH
Combined NDC NHIL NDS6 Other
Non-guarantor
Subsidiaries of
Noble Consolidating
Adjustments Total
Operating revenues

Contract drilling services
   $ —      $ 100,009    $ 14,800    $ —      $ —      $ 1,770,356    $ (48,118 ) $ 1,837,047
Reimbursables
   —      3,381    12    —      —      60,458    —      63,851
Labor contract drilling services
   —      4    —      —      —      43,119    —      43,123
Other
   —      —      —      —      —      766    —      766


Total operating revenues
   —      103,394    14,812    —      —      1,874,699    (48,118 ) 1,944,787


Operating costs and expenses

Contract drilling services
   4,818    31,554    5,681    26,625    —      960,102    (48,118 ) 980,662
Reimbursables
   —      3,331    —      —      —      46,466    —      49,797
Labor contract drilling services
   —      —      —      —      —      25,326    —      25,326
Depreciation and amortization
   —      36,330    2,781    —      —      446,899    —      486,010
Selling, general and administrative
   5,397    4,206    —      24,756    1    14,450    —      48,810
Gain on contract extinguishments, net
   —      —      —      —      —      (21,202 ) —      (21,202 )


Total operating costs and expenses
   10,215    75,421    8,462    51,381    1    1,472,041    (48,118 ) 1,569,403


Operating income (loss)
   (10,215 ) 27,973    6,350    (51,381 ) (1 ) 402,658    —      375,384
Other income (expense)

Equity earnings in affiliates, net of tax
   350,439    328,452    80,795    344,524    86,932    —      (1,191,142 ) —
Interest expense, net of amounts capitalized
   (52,985 ) (45,527 ) (4,824 ) (67,667 ) (22,048 ) (3,284 ) 150,935    (45,400 )
Interest income and other, net
   4,953    19,376    8    38,557    6,321    85,698    (150,935 ) 3,978


Income before income taxes
   292,192    330,274    82,329    264,033    71,204    485,072    (1,191,142 ) 333,962
Income tax (provision) / benefit
   —      6,287    —      —      —      (47,767 ) —      (41,480 )


Net Income
   292,192    336,561    82,329    264,033    71,204    437,305    (1,191,142 ) 292,482
Net income attributable to noncontrolling interests
   —      —      —      —      —      (290 ) —      (290 )


Net income attributable to Noble Corporation
   292,192    336,561    82,329    264,033    71,204    437,015    (1,191,142 ) 292,192


Other comprehensive loss, net
   (5,992 ) —      —      —      —      (5,992 ) 5,992    (5,992 )


Comprehensive income attributable to Noble Corporation
   $ 286,200    $ 336,561    $ 82,329    $ 264,033    $ 71,204    $ 431,023    $ (1,185,150 ) $ 286,200

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

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2013

(in thousands)


	Noble- Cayman			NHC and NDH Combined			NDC			NHIL			NDS6			Other Non-guarantor Subsidiaries of Noble			Consolidating Adjustments			Total
Cash flows from operating activities
Net cash from operating activities	$	(79,174	)	$	46,344		$	8,285		$	(113,088	)	$	1,495,330		$	(144,753	)	$	—		$	1,212,944

Cash flows from investing activities
New construction and capital expenditures		—			(1,070,669	)		(559	)		—			—			(719,659	)		—			(1,790,887	)
Proceeds from disposal of assets		—			—			—			—			—			61,000			—			61,000
Notes receivable from affiliates		—			—			—			—			—			294,798			(294,798	)		—

Net cash from investing activities		—			(1,070,669	)		(559	)		—			—			(363,861	)		(294,798	)		(1,729,887	)

Cash flows from financing activities
Net change in borrowings outstanding on bank credit facilities		973,055			—			—			—			—			—			—			973,055
Repayment of long-term debt		(300,000	)		—			—			—			—			—			—			(300,000	)
Financing costs on credit facilities		(2,432	)		—			—			—			—			—			—			(2,432	)
Dividends paid to joint venture partner		—			—			—			—			—			(69,728	)		—			(69,728	)
Distributions to parent company, net		(187,610	)		—			—			—			—			—			—			(187,610	)
Advances (to) from affiliates		(110,039	)		1,023,544			(7,726	)		113,094			(1,495,330	)		476,457			—			—
Notes payable to affiliates		(294,798	)		—			—			—			—			—			294,798			—

Net cash from financing activities		78,176			1,023,544			(7,726	)		113,094			(1,495,330	)		406,729			294,798			413,285

Net change in cash and cash equivalents		(998	)		(781	)		—			6			—			(101,885	)		—			(103,658	)
Cash and cash equivalents, beginning of period		1,003			904			—			2			—			275,466			—			277,375

Cash and cash equivalents, end of period	$	5		$	123		$	—		$	8		$	—		$	173,581		$	—		$	173,717

NOBLE CORPORATION (NOBLE-CAYMAN) AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2012

(in thousands)


	Noble- Cayman			NHC and NDH Combined			NDC			NHIL			NDS6			Other Non-guarantor Subsidiaries of Noble			Consolidating Adjustments			Total			Noble- Cayman			NHC and NDH Combined			NDC			NHIL			NDS6			Other Non-guarantor Subsidiaries of Noble			Consolidating Adjustments			Total
Cash flows from operating activities
Net cash from operating activities	$	(59,614	)	$	7,563		$	8,989		$	(107,638	)	$	(25,942	)	$	1,133,499		$	—		$	956,857		$	(59,614	)	$	7,563		$	8,989		$	(107,638	)	$	(25,942	)	$	1,133,499		$	—		$	956,857

Cash flows from investing activities
New construction and capital expenditures		—			(499,141	)		(1,040	)		—			—			(940,534	)		—			(1,440,715	)		—			(499,141	)		(1,040	)		—			—			(940,534	)		—			(1,440,715	)
Notes receivable from affiliates		—			—			—			(1,188,287	)		—			—			1,188,287			—			—			—			—			(1,188,287	)		—			—			1,188,287			—

Net cash from investing activities		—			(499,141	)		(1,040	)		(1,188,287	)		—			(940,534	)		1,188,287			(1,440,715	)		—			(499,141	)		(1,040	)		(1,188,287	)		—			(940,534	)		1,188,287			(1,440,715	)

Cash flows from financing activities
Change in bank credit facilities, net		(630,000	)		—			—			—			—			—			—			(630,000	)
Net change in borrowings outstanding on bank credit facilities																										(630,000	)		—			—			—			—			—			—			(630,000	)
Proceeds from issuance of senior notes, net		—			—			—			1,186,636			—			—			—			1,186,636			—			—			—			1,186,636			—			—			—			1,186,636
Contributions from joint venture partners		—			—			—			—			—			40,000			—			40,000
Contributions from joint venture partner																										—			—			—			—			—			40,000			—			40,000
Financing costs on credit facilities		(5,014	)		—			—			—			—			—			—			(5,014	)		(5,014	)		—			—			—			—			—			—			(5,014	)
Distributions to parent		(129,139	)		—			—			—			—			—			—			(129,139	)
Distributions to parent company, net																										(129,139	)		—			—			—			—			—			—			(129,139	)
Advances (to) from affiliates		(364,666	)		491,628			(7,949	)		109,308			25,942			(254,263	)		—			—			(364,666	)		491,628			(7,949	)		109,308			25,942			(254,263	)		—			—
Notes payable to affiliates		1,188,287			—			—			—			—			—			(1,188,287	)		—			1,188,287			—			—			—			—			—			(1,188,287	)		—

Net cash from financing activities		59,468			491,628			(7,949	)		1,295,944			25,942			(214,263	)		(1,188,287	)		462,483			59,468			491,628			(7,949	)		1,295,944			25,942			(214,263	)		(1,188,287	)		462,483

Net change in cash and cash equivalents		(146	)		50			—			19			—			(21,298	)		—			(21,375	)		(146	)		50			—			19			—			(21,298	)		—			(21,375	)
Cash and cash equivalents, beginning of period		146			385			—			—			—			234,525			—			235,056			146			385			—			—			—			234,525			—			235,056

Cash and cash equivalents, end of period	$	—		$	435		$	—		$	19		$	—		$	213,227		$	—		$	213,681		$	—		$	435		$	—		$	19		$	—		$	213,227		$	—		$	213,681

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

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~Nine Months Ended September 30, 2011~~

~~(in thousands)~~

   Noble-
Cayman NHC and NDH
Combined NDC NHIL NDS6 Other
Non-guarantor
Subsidiaries of
Noble Consolidating
Adjustments Total
Cash flows from operating activities

Net cash from operating activities
   $ (40,060 ) $ 30,944    $ 6,889    $ (105,014 ) $ (19,420 ) $ 614,119    $ —      $ 487,458


Cash flows from investing activities

New construction and capital expenditures
   —      (1,135,054 ) (475 ) —      —      (880,871 ) —      (2,016,400 )
Notes receivable from affiliates
   20,000    —      —      (1,096,927 ) —      200,000    876,927    —
Refund from contract extinguishments
   —      —      —      —      —      18,642    —      18,642


Net cash from investing activities
   20,000    (1,135,054 ) (475 ) (1,096,927 ) —      (662,229 ) 876,927    (1,997,758 )


Cash flows from financing activities

Change in bank credit facilities, net
   675,000    —      —      —      —      —      —      675,000
Proceeds from issuance of senior notes, net
   —      —      —      1,087,833    —      —      —      1,087,833
Contributions from joint venture partners
   —      —      —      —      —      481,000    —      481,000
Payments of joint venture debt
   —      —      —      —      —      (693,494 ) —      (693,494 )
Settlement of interest rate swaps
   —      —      —      —      —      (29,032 ) —      (29,032 )
Financing costs on credit facilities
   (2,835 ) —      —      —      —      —      —      (2,835 )
Distributions to parent
   (149,566 ) —      —      —      —      —      —      (149,566 )
Advances (to) from affiliates
   (355,081 ) 1,121,756    28,586    114,108    19,420    (928,789 ) —      —
Notes payable to affiliates
   (147,500 ) (17,500 ) (35,000 ) —      —      1,076,927    (876,927 ) —


Net cash from financing activities
   20,018    1,104,256    (6,414 ) 1,201,941    19,420    (93,388 ) (876,927 ) 1,368,906


Net change in cash and cash equivalents
   (42 ) 146    —      —      —      (141,498 ) —      (141,394 )
Cash and cash equivalents, beginning of period
   42    146    —      —      —      333,211    —      333,399


Cash and cash equivalents, end of period
   $ —      $ 292    $ —      $ —      $ —      $ 191,713    $ —      $ 192,005

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 September 30, ~~2012,~~2013, and our results of operations for the three and nine months ended September 30, ~~2012~~2013 and ~~2011.~~2012. 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, ~~2011~~2012 filed by Noble Corporation, a Swiss corporation (“Noble-Swiss”), and Noble Corporation, a Cayman Islands company (“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 contract backlog, fleet status, our financial position, business strategy, timing or results of acquisitions or dispositions, the pending migration to the United Kingdom, a potential separation and spin-off of our standard specification business (including form, timing and fleet composition), repayment of debt, borrowings under our ~~Credit Facilities (as defined below), issuance of commercial paper notes,~~credit facilities or other instruments, completion, delivery dates and acceptance of our newbuild rigs, future capital expenditures, contract commitments, dayrates, contract commencements, extension or renewals, contract tenders, the outcome of any dispute, litigation, audit or investigation, plans and objectives of management for future operations, foreign currency requirements, results of joint ventures, indemnity and other contract claims, construction and upgrade of rigs, industry conditions, ~~including the effect of disruptions of drilling in the U.S. Gulf of Mexico,~~ access to financing, impact of competition, governmental regulations and permitting, availability of labor, worldwide economic conditions, taxes and tax rates, indebtedness covenant compliance, dividends and distributable reserves, and timing for compliance with any new regulations 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 including but not limited to operating hazards and delays, risks associated with operations outside the U.S., actions by regulatory authorities, customers, joint venture partners, contractors, lenders and other third parties, legislation and regulations affecting drilling operations, ~~costs and difficulties relating~~the inability to consummate a potential spin-off transaction or change in corporate domicile or the ~~integration~~inability to realize the benefits of ~~businesses,~~such transactions, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions and the future price of oil and gas 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 Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2011,~~2012, our Quarterly Reports on Form 10-Q 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.

Executive Overview

Noble-Swiss is a leading ~~provider of~~ offshore ~~contract~~ drilling ~~services~~contractor for the oil and gas industry. ~~Our~~We perform contract drilling services with our fleet of 79 mobile offshore drilling units located worldwide. We also own one floating production storage and offloading unit. Currently, our fleet consists of 14 semisubmersibles, 14 drillships, 49 jackups and two submersibles. ~~Additionally,~~At September 30, 2013, we ~~have one floating production storage and offloading unit. Our fleet includes 11~~had nine units under construction as follows:

~~five~~three dynamically positioned, ultra-deepwater, harsh environment ~~drillships~~drillships; and

six high-specification heavy-duty, harsh environment jackups.

Migration to the United Kingdom

~~Outlook~~In October 2013, our shareholders approved the previously announced proposed corporate reorganization transaction (the “Transaction”) of Noble-Swiss and the group of companies it controls. The Transaction will merge Noble-Swiss into a newly formed subsidiary incorporated under English law, Noble Corporation plc. (“Noble-UK”), which will become our new holding company. The Transaction will effectively change the place of incorporation of our publicly traded parent company from Switzerland to the United Kingdom. Subject to the completion of certain closing requirements, the Transaction is expected to be completed in November 2013.

~~During~~In the Transaction, all of the outstanding ordinary shares of Noble-Swiss will be cancelled, and Noble-UK will issue, through an exchange agent, one ordinary share of Noble-UK in exchange for each ordinary share of Noble-Swiss. Upon completion of the Transaction, Noble-UK will own and continue to conduct the same businesses through the Noble group as Noble-Swiss conducted prior to the Transaction, except that Noble-UK will be the parent company of the Noble group of companies. Noble-UK is expected to become subject to SEC reporting requirements and its ordinary shares have been approved for listing on the New York Stock Exchange under the symbol “NE”, subject to notice of issuance.

Proposed Spin-off Transaction

The plan approved by the Board of Directors involves the separation of the standard specification business through the distribution of the shares of the new company to Noble-Swiss shareholders in a spin-off that would be tax-free to shareholders. Subject to business, market, regulatory and other considerations, the Separation is expected to be preceded by an initial public offering (“IPO”) of up to 20 percent of the shares of the new company. The Separation is subject to several conditions, including final approval of our Board of Directors and approval of our shareholders, which we expect to seek in the second quarter of 2014. We have received a private letter ruling from the U.S. Internal Revenue Service stating that the Separation is expected to qualify as a tax-free transaction under sections 368(a)(1)(D) and 355, and related provisions of the Internal Revenue Code of 1986, as amended. We anticipate that the spin-off would be completed by the end of 2014. We expect that the net proceeds received by the new company from borrowings, and the IPO if undertaken, would be used to repay indebtedness to Noble incurred by the new company. We expect that, in turn, Noble would use such proceeds to repay outstanding indebtedness of Noble-Cayman and its subsidiaries. There can be no assurance that our proposed plan will lead to an IPO or spin-off of the new company or any other transaction, or that if any transaction is pursued, that it will be consummated.

Outlook

The business environment for the first nine months of ~~2012, we continued~~2013 has remained positive, with steady to ~~see stability~~higher drilling activity, especially for ultra-deepwater and jackup rigs. The overall contractual environment has been positive and underlying commodity prices have been stable, with Brent crude oil averaging $107 per barrel in the ~~offshore drilling market even as the underlying commodity markets were subject to short-term volatility. In the U.S. Gulf~~third quarter. The stability of ~~Mexico, the granting of permits~~crude oil prices remains a key factor supporting customer exploration and publication of new safety rules has led to more stable activity levels within the industry, especially as it relates to the deepwater markets. The continued stability reflects the positive long-term outlook for commodity prices,production spending, which has ~~led to greater investment~~positively influenced both shallow and ~~contributed to improved dayrates for~~ deepwater ~~and ultra-deepwater rigs worldwide. While there are still risks, including potential third-party environmental lawsuits targeting the permitting process, possible new~~ drilling ~~regulations, a failure of the federal agencies of the U.S. government to issue permits in a timely manner and the adoption by individual operators of new~~activity. Customer drilling or equipment standards exceeding those required by regulatory bodies, we believe the potential for these risks will be reduced as long as rigs continue to work without incident in the U.S. Gulf of Mexico.

~~There~~activity, which continues to ~~be uncertainty regarding the sustainability of the global economic recovery, which is proceeding unevenly~~expand globally, has resulted in ~~different geographic regions. In addition~~rig supply constraints in some regions, leading customers to political instability in certain oil producing nations in the Middle East and North Africa, there is also uncertainty regarding recovery in the credit markets, particularly in Europe, which some analysts predict could be the catalystcontract rigs for a worldwide recession. As a result, oil prices during 2012 have been volatile for short-term pricing. Supply side concerns in response to continued political unrest in the Middle East and North Africa are weighed against global recession fears. Natural gas prices in the United States continue to be at low levels based on current oversupply. We believe these competing factors will impact the volatility in the offshore drilling market and the prices of oil and gas commodities for the foreseeable future.longer durations.

~~Despite the instability in the global economy and commodity prices noted above, the market for offshore drilling services has continued the upward trend that began in 2011.~~

We believe both the short-term and long-term outlook for the ~~deep and~~ ultra-deepwater ~~markets continues to strengthen.~~market remains positive. Market dayrates for new ultra-deepwater units ~~remain~~have consistently remained above $500,000 throughout the year, which is higher than rates seen in recent years. A number of fixtures have exceeded $550,000, and in certain cases even exceeded $600,000. Our market analysis indicates that ~~there is little, if any,~~ availability of ultra-deepwater units ~~for 2012, and 2013 availability~~in 2014 continues to decrease. We have seen some early indications of softening in deepwater rates, as some units in the global deepwater fleet transition to new contracts. The softening dayrate environment is ~~rapidly decreasing.~~ especially noticeable in older deepwater rigs that lack the technical features found on the new ultra-deepwater units delivered in recent quarters.

Utilization rates for ~~jackup units stabilized in 2011, and~~jackups improved in most regions during the first nine months of ~~2012.~~2013. While ~~we currently have three jackup rigs available, we have seen tangible market activity and anticipate a favorable environment for these rigs in the short-term. We continue to see~~there is differentiation in the jackup market, with ~~newer~~high-specification units having utilization rates and dayrates exceeding those for units that entered service before ~~2000. However,~~2000, we continue to see improvement in the ~~older jack-up~~standard capability jackup market with ~~increased~~strong utilization and ~~competitive dayrates.~~rising dayrates in most regions.

~~Demand~~Despite the positive market conditions noted above, global economic risk remains. In addition, political instability, especially in the Middle East and North Africa, has further created uncertainty within the marketplace. While these factors create a potential risk for ~~our~~postponement or cancellation of some drilling ~~services generally depends on a variety of economic~~opportunities, we believe the outlook for the offshore drilling industry remains positive.

Results and ~~political factors, including worldwide demand~~Strategy

Our goal is to be the preferred offshore drilling contractor for the oil and gas industry based upon 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 access to their oil and gas reserves. Our results of operations depend on offshore drilling activity worldwide. Historically, oil and gas prices and market expectations of potential changesfollowing core principles:

operate in ~~these prices have significantly affected~~a manner that ~~level of activity. Generally, higher oil and natural gas prices, or our customers’ expectations of higher prices, result in greater demand~~provides a safe working environment for our ~~services~~employees while protecting the environment and ~~lower oil and gas prices result in reduced demand~~our assets;

provide an attractive investment vehicle for our ~~services. Demand for our services is also~~shareholders; and

deliver exceptional customer service through a ~~function of the worldwide supply of mobile offshore drilling units. Industry analysts widely report that a significant expansion of industry supply of both jackups~~large, diverse and ultra-deepwater units is underway. This increased supply and the introduction of additional non-contracted rigs into the marketplace could have an adverse effect on demand for our services or the dayrates we are able to achieve.

We currently have 12 rigs contracted in Mexico with Pemex Exploracion y Produccion (“Pemex”), and three of these rigs have contracts scheduled to expire in the fourth quarter of 2012. Pemex continues to tender for additional jackup rigs as it attempts to increase the number of working rigs. Some previous tenders publishedtechnically advanced fleet operated by Pemex contained a requirement that certain units must have entered service since the year 2000. While Pemex did not succeed in securing a significant number of newer rigs from those published tenders, we cannot predict whether this age requirement will be present in future Pemex tenders. If this requirement is present in future tenders, it could require us to seek work for our rigs in other locations, as the ages of our rigs currently operating in Mexico do not meet this requirement. If such work is not available, it could lead to additional idle time on some of our rigs. We cannot predict how many rigs might be affected or how long they could remain idle. Given the current market conditions and availability of rigs, we believe our rigs will either receive contract extensions with PEMEX or will find additional work in the future.

~~In connection with our existing drilling contracts with Petrobras for two of our drillships operating in Brazil, we approved certain shipyard reliability upgrade projects for these drillships, the~~~~Noble Leo Segerius~~ ~~and the~~~~Noble Roger Eason~~~~. These upgrade projects are designed to enhance the reliability and operational performance of these drillships. During the first quarter of 2012, the~~~~Noble Leo Segerius~~ ~~completed the shipyard portion of its reliability upgrade and departed the shipyard in Brazil for seatrials, final commissioning and customer acceptance activities. The~~~~Noble Leo Segerius~~ ~~returned to work in the fourth quarter of 2012. The~~~~Noble Roger Eason~~ entered the shipyard for its reliability upgrade in the second quarter of 2012, which is expected to take approximately 270 days to complete. There are a number of risks associated with shipyard projects of this nature, particularly in Brazil, including potential project delays and cost overruns because of labor, customs, local shipyard, local content and other issues. For example, recently a number of labor issues within the operational and regulatory support infrastructure in Brazil caused two rigs to be delayed in returning to operations following the completion of shipyard projects. In addition, the drilling contracts for these vessels provide Petrobras with certain rights of termination in the event of excessive downtime, and it is possible that Petrobras could exercise this right in the future with respect to one or both of these drillships. We intend to continue to closely monitor and discuss with Petrobras the status of these projects and plan to take appropriate steps to mitigate identified risks, which depending upon the circumstances, could involve a variety of options.

~~Results and Strategy~~

competent personnel.

Our business strategy also focuses on the active expansion of our ~~fleet~~worldwide deepwater and high specification jackup capabilities through ~~construction and~~ acquisitions, ~~of drilling units, coupled with~~ upgrades and modifications, the deployment of ~~existing units. We seek to deploy~~ our drilling assets in important oil and gas producing ~~areas.~~ areas throughout the world and potential divestitures of our standard specification drilling units.

We have actively expanded our offshore drilling, deepwater and ~~deepwater~~high specification jackup capabilities in recent years through the construction and acquisition of ~~new rigs, and as~~rigs. As part of this technical and operational expansion, we plan to continue pursuing opportunities to upgrade our fleet to achieve greater technological capability, which we believe will lead to increased drilling efficiencies and the ability to complete the increasingly more complex well ~~programs.~~

~~We believe modernizing~~programs required by our ~~overall fleet is an important element~~customers. During the first nine months of our strategy. We may dispose of some, or all, of our lower specification units and related assets and operations in one or more transactions. These dispositions may include sales of assets to third parties, a spin-off or other distribution or separation of assets. In analyzing any disposition, we will consider the strategic benefit of the potential transaction while seeking to secure what we consider appropriate value to our shareholders. To date, no potential disposition has provided the results we seek. The drilling market for lower specification units has recently improved. While we expect the increased utilization and dayrates experienced in most regions for these assets to contribute positively to our overall results under current market conditions, we do continue to analyze strategic options for these lower specification units in a manner that we believe will maximize shareholder value. We can provide no assurance as to whether, or when, any disposition transaction will occur or what form it may take.

~~At September 30, 2012,~~2013, we continued to execute our newbuild ~~strategy with~~program, completing the following ~~11 projects:~~milestones:

•

we commenced operations on theNoble Don Taylor, a dynamically positioned, ultra-deepwater, harsh environment drillship, under a long-term contract in the U.S. Gulf of Mexico in the third quarter of 2013;

~~one dynamically positioned, ultra-deepwater, harsh environment Globetrotter-class drillship, which is scheduled to be delivered to our customer in the fourth quarter of 2013;~~

•

we commenced operations on theNoble Globetrotter II, a dynamically positioned, ultra-deepwater, harsh environmentGlobetrotter-class drillship, under a long-term contract in West Africa in the third quarter of 2013;

•

we completed construction of theNoble Mick O’Brien, a high-specification, heavy duty, harsh environment jackup that left the shipyard during the third quarter of 2013 and is scheduled to complete acceptance testing and begin operations under a five-month contract in the Middle East in the fourth quarter of 2013;

~~four~~we continued construction of three additional dynamically positioned, ultra-deepwater, harsh environment drillships at Hyundai Heavy Industries Co. Ltd. ~~(“HHI”), the first of which is estimated to be delivered from the shipyard to begin acceptance testing in the second quarter of 2013; and~~

;

~~six~~we continued construction of five high-specification, heavy duty, harsh environment jackups; and

we began construction of one ultra-high specification jackup.

Subsequent to September 30, 2013, one newbuild drillship, theNoble Bob Douglas, and one newbuild jackup, ~~rigs,~~ the ~~first of which is estimated to be~~Noble Regina Allen, were delivered from the ~~shipyard to begin~~shipyard. These units are currently mobilizing, undergoing final commissioning and customer acceptance testing before commencing their respective contracts.

Total capital expenditures, including expenditures related to our newbuild program, were $1.7 billion for the nine months ended September 30, 2013.

Demand for our services is a function of the worldwide supply of mobile offshore drilling units. In recent years, there has been a significant expansion of industry supply of both jackups and ultra-deepwater units, many of which are currently under construction without a contract. The introduction of non-contracted newbuild rigs into the marketplace will increase the supply of rigs which compete for drilling service contracts, and could negatively impact the dayrates we are able to achieve. Our strategy on newbuild construction has generally been to expand our drilling fleet in connection with a long-term drilling contract that covers a substantial portion of our capital investment and provides an acceptable return on our capital employed. In response to the addition of a significant number of new, technologically advanced units in the ~~first quarter of 2013.~~

global fleet and changes in customer requirements and preferences, we determined that in order to maintain long-term competitiveness, it was both necessary and desirable for us to engage in building high specification jackups and floating units on a speculative basis. Of ~~our 11 rigs~~the units we currently have under construction, ~~as of September 30, 2012,~~ two of the ~~drillships~~heavy-duty, harsh environment jackups are ~~committed for five years or more and one drillship is committed for three years. Additionally, two of the jackup rigs have received commitments for contracts. The remaining rigs are currently~~ being constructed without customer contracts. We will continue our efforts to secure contracts for these units, and believe that we will have these rigs contracted prior to their shipyard completion. We may continue to conduct new speculative building in the future.

From time to time, we evaluate individual rig transactions and business combinations with other parties where we believe we can create shareholder value. We will continue to consider business opportunities that promote our growth strategy and optimize shareholder value.

While we cannot predict the future level of demand or dayrates for our drilling services or future conditions in the offshore contract drilling industry, we ~~continue to~~ believe we are well positioned within the industry and that our newbuild program will further strengthen our position, especially in ~~the ultra-deepwater and high-specification markets.~~

deepwater drilling.

In the third quarter of 2012, we recognized net income attributable to Noble-Swiss of $115 million, or $0.45 per diluted share, on total revenues of $884 million. Sequential results of key metrics are as follows:

   Three Months Ended
   September 30, June 30,
   2012 2012
Average dayrate
   $ 168,608    $ 181,663
Average utilization
   78 % 76 %
Daily contract drilling services costs
   $ 90,885    $ 90,699
Contract drilling services margin
   46 % 50 %

Contract Drilling Services Backlog

We maintain a backlog (as defined below) of commitments for contract drilling services. The following table sets forth, as of September 30, ~~2012,~~2013, the amount of our contract drilling services backlog and the percent of available operating days committed for the periods indicated:


			Year Ending December 31,																	Year Ending December 31,
	Total		2012 ⁽¹⁾			2013			2014			2015			2016-2023			Total		2013⁽¹⁾			2014			2015			2016			2017-2023
	(In millions)																	(In millions)
Contract Drilling Services Backlog
Semisubmersibles/Drillships^{(2) (4) (6)}	$	12,495	$	651		$	2,607		$	2,614		$	1,878		$	4,745
Semisubmersibles/Drillships^{(2) (6)}																		$	12,242	$	783		$	3,012		$	2,661		$	1,876		$	3,910
Jackups/Submersibles⁽³⁾		2,302		344			1,229			631			98			—			3,976		393			1,555			942			421			665

Total⁽⁴⁾	$	14,797	$	995		$	3,836		$	3,245		$	1,976		$	4,745		$	16,218	$	1,176		$	4,567		$	3,603		$	2,297		$	4,575

Percent of Available Operating Days
Committed⁽⁵⁾				83	%		69	%		45	%		19	%		5	%
Percent of Available Operating Days Committed⁽⁵⁾																					80	%		71	%		42	%		20	%		5	%

(1)	Represents a three-month period beginning October 1, ~~2012.~~2013.

(2) Our drilling contracts with ~~Petrobras~~Petróleo Brasileiro S.A. (“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~~semisubmersibles/drillships operating offshore Brazil for Petrobras, 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 presently operating offshore Brazil for Petrobras, we (a) have not included in our backlog any performance bonuses for periods prior to the commencement of certain upgrade projects planned for 2012 and 2013, which projects are designed to enhance the reliability and operational performance of these 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.semisubmersibles. Our backlog for semisubmersibles/drillships includes approximately ~~$219~~$151 million attributable to these performance bonuses.

The drilling contracts with Royal Dutch Shell plc. (“Shell”) for theNoble Globetrotter I,Noble Globetrotter II,Noble Jim Thompson,Noble Clyde Boudreaux,Noble Max Smith, Noble Don Taylorand Noble Jim Day provide opportunities for us to earn performance bonuses based on key performance indicators as defined by Shell. With respect to these contracts, we have included in our backlog an amount equal to 50 percent of the potential performance bonuses for these rigs. Our backlog for these rigs includes approximately $395 million attributable to these performance bonuses.

~~The drilling contracts with Shell for the~~~~Noble Globetrotter I~~,~~Noble Globetrotter II~~,~~Noble Jim Thompson~~,~~Noble Clyde Boudreaux~~~~and~~~~Noble Max Smith~~~~, as well as the letters of intent for the~~~~Noble Jim Day~~ ~~and~~~~Noble Don Taylor~~, provide opportunities for us to earn performance bonuses based on key performance indicators as defined by Shell. With respect to these contracts, we have included in our backlog an amount equal to 50 percent of the potential performance bonuses for these rigs. Our backlog for these rigs includes approximately $414 million attributable to these performance bonuses.

(3)

~~Pemex~~Petróleos Mexicanos (“Pemex”) has the ability to cancel its drilling contracts on 30 days or less notice without ~~requiring~~Pemex’s making an early termination ~~payment by Pemex.~~payment. As of September 30, ~~2012,~~2013, we had 12eleven rigs contracted to Pemex in Mexico, and our backlog includes approximately ~~$693~~$562 million related to such ~~contracts at September 30, 2012.~~contracts.

(4)

Our drilling contracts generally provide the customer an early termination right in the event we fail to meet certain performance standards, including downtime thresholds. For example, Petrobras has the right to terminate its contracts in the event of excessive downtime. While we have exceeded downtime thresholds in the past on certain rigs contracted with Petrobras,we have not received any notification concerning contract cancellations ~~to date~~ nor do we anticipate receiving any such notifications.

(5) Percentages take into account additional capacity from the estimated dates of deployment of our newbuild rigs that are scheduled to commence operations during ~~2012~~2013 through ~~2015.~~2016.
(6) Noble and a subsidiary of Shell are involved in joint ~~venture agreements to~~ventures that own and operate both theNoble Bully I and theNoble Bully II. ~~Pursuant to these~~Under the terms of the joint venture agreements, each party has an equal 50 percent share in both vessels. As of September 30, ~~2012,~~2013, the combined amount of backlog for these rigs ~~totaled $2.4~~totals $2.0 billion, all of which is included in our backlog. Noble’s ~~proportionate~~net interest in the backlog for these rigs ~~was $1.2~~is $1.0 billion.

Our contract drilling services backlog reported above reflects estimated future revenues attributable to both signed drilling contracts and letters of intent that we expect ~~will become binding contracts.~~to realize. A letter of intent is generally subject to customary conditions, including the execution of a definitive drilling contract. ~~For a number of reasons, it~~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, amounts constituting reimbursables 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 be materially different than the backlog amounts and backlog periods set forth in the table above ~~for~~due to various factors, including, but not limited to, shipyard and maintenance projects, ~~operational~~unplanned downtime, achievement of bonuses, weather conditions ~~bonuses~~ and other factors that result in applicable dayrates lower than the full contractual operating dayrate. In addition, amounts included in the backlog may change ~~as a result of government-imposed restrictions or delays in the issuance of drilling permits. Furthermore,~~because drilling contracts may be varied or modified by mutual consent or customers may exercise early termination rights contained in some of our drilling contracts 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.

As of September 30, ~~2012,~~2013, we estimate Shell and Petrobras represented approximately ~~61%~~49 percent and ~~15%,~~10 percent, respectively, of our backlog.

Nigerian Operations

In April 2010, the Nigerian Oil and Gas Industry Content Development Bill was signed into law. The law is designed to create Nigerian content in operations and transactions within the Nigerian oil and gas industry. The law sets forth certain requirements for the utilization of Nigerian human resources and goods and services in oil and gas projects and creates a Nigerian Content Development and Monitoring Board ~~(“NCDMB”)~~ to implement and monitor the law and develop regulations pursuant to the law. The ~~NCDMB~~Nigerian Content Development and Monitoring Board has indicated that it will require all non-Nigerian offshore drilling companies to reorganize their local operations to include Nigerian indigenous minority interests in the operating assets and to obtain the approval of the ~~NCDMB~~Nigerian Content Development and Monitoring Board for future work in Nigeria. The ~~NCDMB actively monitors awards for future work and reviews plans for local content and development of Nigerian interests. The~~ law also ~~established~~establishes a Nigerian Content Development Fund to fund the implementation of the law, and requires that 1one percent of the value of every contract awarded in the Nigerian oil and gas industry be paid into the fund. We cannot predict what impact the new law may have on our existing or future operations in Nigeria, but the effect on our operations there could be significant.

Results of Operations

For the Three Months Ended September 30, ~~2012~~2013 and ~~2011~~2012

Net income attributable to ~~Noble Corporation (“Noble-Swiss”~~Noble-Swiss for the three months ended September 30, 2013 (the “Current Quarter”) was $282 million, or $1.10 per diluted share, on operating revenues of $1.1 billion, compared to net income for the three months ended September 30, 2012 (the ~~“Current~~“Comparable Quarter”) ~~was~~of $115 million, or $0.45 per diluted share, on operating revenues of $884 ~~million, compared to net income for the three months ended September 30, 2011 (the “Comparable Quarter”) of $135 million, or $0.53 per diluted share, on operating revenues of $738~~ million.

~~The consolidated financial statements~~As a result of Noble-Swiss ~~include the accounts of Noble-Cayman; Noble-Swiss conducts substantially~~conducting all of its business through Noble-Cayman and its ~~subsidiaries. As a result,~~subsidiaries, the financial position and results of operations for Noble-Cayman, and the reasons for material changes in the amount of revenue and expense items between 2013 and 2012, ~~and 2011, would be~~are the same as the information presented below regarding Noble-Swiss in all material respects, except operating income for Noble-Cayman for the three months ended September 30, 2013 and 2012 was $29 million and $17 million higher than operating income for Noble-Swiss for the same period. The operating income difference is primarily a result of executive costs directly attributable to Noble-Swiss for operations support and stewardship related services.

Rig Utilization, Operating Days and Average Dayrates

Operating ~~revenues and operating costs and expenses~~results 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 September 30, ~~2012~~2013 and ~~2011:~~2012:


																					Average Rig						Operating							Average
																					Utilization (1)						Days (2)							Dayrates
	Average Rig Utilization (1)						Operating Days (2)							Average Dayrates							Three Months Ended						Three Months Ended							Three Months Ended
	Three Months Ended September 30,						Three Months Ended September 30,							Three Months Ended September 30,							September 30,						September 30,							September 30,
	2012			2011			2012		2011		% Change			2012		2011		% Change			2013			2012			2013		2012		% Change			2013		2012		% Change
Jackups		83	%		82	%		3,285		3,229		2	%	$	97,857	$	89,352		10	%		94	%		83	%		3,635		3,285		11	%	$	112,414	$	97,857		15	%
Semisubmersibles		83	%		84	%		1,067		1,086		-2	%		331,900		315,034		5	%		79	%		83	%		1,012		1,067		-5	%		380,048		331,900		15	%
Drillships		73	%		60	%		590		329		79	%		267,166		225,669		18	%		79	%		73	%		702		590		19	%		353,278		267,166		32	%
Other		0	%		0	%		—		—		—			—		—		—			0	%		0	%		—		—		—			—		—		—

Total		78	%		76	%		4,942		4,644		6	%	$	168,608	$	151,782		11	%		85	%		78	%		5,349		4,942		8	%	$	194,645	$	168,608		15	%

(1)	Information reflects our policy of reporting on the basis of the number of rigs in our fleet, excluding newbuild rigs ~~under construction.~~not placed in service.

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

Contract Drilling Services

The following table sets forth the operating ~~revenues and the operating costs and expenses~~results for our contract drilling services segment for the three months ended September 30, ~~2012~~2013 and ~~2011~~2012 (in thousands):

   Three Months Ended
September 30,    Change
   2012    2011    $ %
Operating revenues:

Contract drilling services
   $ 833,212       $ 704,892       $ 128,320    18 %
Reimbursables (1)
   27,087       14,646       12,441    85 %
Other
   16       8       8    100 %






   $ 860,315       $ 719,546       $ 140,769    20 %






Operating costs and expenses:

Contract drilling services
   $ 449,125       $ 358,547       $ 90,578    25 %
Reimbursables (1)
   20,039       11,362       8,677    76 %
Depreciation and amortization
   191,638       162,837       28,801    18 %
Selling, general and administrative
   26,228       27,212       (984 ) -4 %






   687,030       559,958       127,072    23 %






Operating income
   $ 173,285       $ 159,588       $ 13,697    9 %

~~(1)~~

We record reimbursements from customers for out-of-pocket expenses as operating 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~~—Changes in contract drilling services revenues for the Current Quarter as compared to the Comparable Quarter were driven by increases in both average dayrates and operating days. The 11 percent increase in average dayrates increased revenue by $83 million while the 6 percent increase in operating days increased revenues by approximately $45 million.

The change in contract drilling services revenues relates to our drillships, jackups and semisubmersibles, which generated approximately $83 million, $33 million and $12 million more revenue, respectively, in the Current Quarter.

The increase in drillship revenues was driven by a 79 percent increase in operating days and an 18 percent increase in average dayrates, resulting in a $59 million and a $24 million increase in revenues, respectively, from the Comparable Quarter. The increase in both operating days and average dayrates was the result of the~~Noble Bully I~~,~~Noble Bully II~~~~and~~~~Noble Globetrotter I~~~~, which commenced their contracts with Shell in March 2012, April 2012, and July 2012, respectively.~~

The 10 percent increase in jackup average dayrates resulted in a $28 million increase in revenues, which was coupled with a 2 percent increase in jackup operating days, resulting in a $5 million increase in revenues from the Comparable Quarter. The increase in average dayrates resulted from improved market conditions in the global shallow water market throughout the jackup fleet. The slight increase in utilization primarily related to rigs in Mexico, the North Sea and the Middle East, which experienced increased operating days during the Current Quarter.

The 5 percent increase in semisubmersible average dayrates resulted in an $18 million increase in revenues from the Comparable Quarter, which was partially offset by the 2 percent decrease in operating days, which resulted in a $6 million decrease in revenues. The increase in average dayrates is a result of the~~Noble Paul Romano~~ returning to work at a higher than average dayrate after being stacked in the Comparable Quarter, as well as favorable dayrate changes on new contracts across the semisubmersible fleet. The slight decrease in operating days is primarily from the~~Noble Dave Beard,~~ ~~the~~~~Noble Max Smith~~~~and the~~ ~~Noble Clyde Boudreaux~~, which all experienced mobilization time and/or shipyard time to undergo contract preparations and/or repairs and regulatory inspections during the Current Quarter after operating at full capacity during the Comparable Quarter.

~~Operating Costs and Expenses~~—Contract drilling services operating costs and expenses increased $91 million for the Current Quarter as compared to the Comparable Quarter. A portion of the increase is due to the crew-up and operating expenses for the recently completed rigs noted above, which added approximately $40 million in expense during the Current Quarter. Excluding the additional expenses related to these rigs, our contract drilling costs increased $51 million in the Current Quarter from the Comparable Quarter. This change was primarily driven by a $20 million increase in repair and maintenance, a $12 million increase in labor, a $9 million increase related to shorebase support, a $5 million increase in insurance costs related to increased premiums on our new policy renewed in March 2012, a $3 million increase in safety, training and regulatory inspections and a $2 million increase in rig catering and other miscellaneous expenses.

~~The increase in depreciation and amortization in the Current Quarter from the Comparable Quarter was primarily attributable to assets placed in service, including the~~~~Noble Bully I~~,~~Noble Bully II~~~~and~~~~Noble Globetrotter I~~.

~~Other~~

~~The following table sets forth the operating revenues and the operating costs and expenses for our other services for the three months ended September 30, 2012 and 2011:~~

   Three Months Ended
September 30,    Change
   2012    2011    $ %
Operating revenues:

Labor contract drilling services
   $ 22,667       $ 15,564       $ 7,103    46 %
Reimbursables (1)
   1,050       2,792       (1,742 ) -62 %






   $ 23,717       $ 18,356       $ 5,361    29 %






Operating costs and expenses:

Labor contract drilling services
   $ 12,991       $ 8,053       $ 4,938    61 %
Reimbursables (1)
   1,008       2,609       (1,601 ) -61 %
Depreciation and amortization
   3,449       3,376       73    2 %
Selling, general and administrative
   630       324       306    94 %






   18,078       14,362       3,716    26 %






Operating income
   $ 5,639       $ 3,994       $ 1,645    41 %

~~(1)~~

~~Operating Revenues and Costs and Expenses~~~~—The change in both revenue and expense primarily relate to the commencement of a refurbishment project with our customer, Shell, for one of its rigs to be operated under a labor contract in Alaska.~~

~~Other Income and Expenses~~

~~Interest Expense, net of amount capitalized~~—Interest expense, net of amount capitalized, increased $14 million in the Current Quarter as compared to the Comparable Quarter. The increase is a result of the $1.2 billion of senior notes issued in February 2012, coupled with lower capitalized interest due primarily to the completion of construction on three of our newbuild drillships. During the Current Quarter, we capitalized approximately 55 percent of total interest charges versus approximately 74 percent during the Comparable Quarter.

~~Income Tax Provision~~—Our income tax provision increased $8 million in the Current Quarter as a result of a higher effective tax rate during the Current Quarter. The increase in the income tax rate was primarily due to fewer discrete tax benefits recognized during the Current Quarter.

~~For the Nine Months Ended September 30, 2012 and 2011~~

Net income attributable to Noble Corporation (“Noble-Swiss”) for the nine months ended September 30, 2012 (the “Current Period”) was $395 million, or $1.55 per diluted share, on operating revenues of $2.6 billion, compared to net income for the nine months ended September 30, 2011 (the “Comparable Period”) of $244 million, or $0.96 per diluted share, on operating revenues of $1.9 billion.

The consolidated financial statements of Noble-Swiss include the accounts of Noble-Cayman; Noble-Swiss conducts substantially all of its business through Noble-Cayman and its subsidiaries. As a result, the financial position and results of operations for Noble-Cayman, and the reasons for material changes in the amount of revenue and expense items between 2012 and 2011, would be the same as the information presented below regarding Noble-Swiss in all material respects, except operating income for Noble-Cayman for the nine months ended September 30, 2012 was $44 million higher than operating income for Noble-Swiss for the same period. The operating income difference is primarily a result of executive costs directly attributable to Noble-Swiss for operations support and stewardship related services.

~~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 nine months ended September 30, 2012 and 2011:

   Average Rig
Utilization (1) Operating
Days (2) Average
Dayrates
   Nine Months Ended
September 30, Nine Months Ended
September 30,    Nine Months Ended
September 30,
   2012 2011 2012    2011    % Change 2012    2011    % Change
Jackups
   80 % 72 % 9,447       8,407       12 % $ 95,333       $ 84,084       13 %
Semisubmersibles
   86 % 80 % 3,286       3,042       8 % 345,530       288,246       20 %
Drillships
   64 % 61 % 1,344       1,007       33 % 291,448       251,421       16 %
Other
   0 % 0 % —         —         —      —         —         —





Total
   76 % 69 % 14,077       12,456       13 % $ 172,466       $ 147,476       17 %

~~(1)~~

~~Information reflects our policy of reporting on the basis of the number of rigs in our fleet, excluding newbuild rigs under construction.~~

~~(2)~~

~~Information reflects the number of days that our rigs were operating under contract.~~

~~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 nine months ended September 30, 2012 and 2011 (in thousands):


													Three Months Ended
	Nine Months Ended September 30,						Change						September 30,					Change
	2012			2011			$			%			2013			2012		$			%
Operating revenues:
Contract drilling services	$	2,427,759		$	1,837,047		$	590,712			32	%	$	1,041,118		$	833,212	$	207,906			25	%
Reimbursables (1)		91,913			59,232			32,681			55	%		28,840			27,087		1,753			6	%
Other		258			766			(508	)		-66	%		28			16		12			75	%

	$	2,519,930		$	1,897,045		$	622,885			33	%	$	1,069,986		$	860,315	$	209,671			24	%

Operating costs and expenses:
Contract drilling services	$	1,292,638		$	1,001,638		$	291,000			29	%	$	488,250		$	449,125	$	39,125			9	%
Reimbursables (1)		74,519			45,408			29,111			64	%		23,281			20,039		3,242			16	%
Depreciation and amortization		539,698			477,568			62,130			13	%		219,695			191,638		28,057	��		15	%
Selling, general and administrative		73,907			72,020			1,887			3	%
General and administrative														33,346			26,228		7,118			27	%
Loss on impairment		12,710			—			12,710			**			3,585			—		3,585				**
Gain on disposal of assets, net														(35,646	)		—		(35,646	)			**
Gain on contract settlements/extinguishments, net		(33,255	)		(21,202	)		(12,053	)		57	%		(45,000	)		—		(45,000	)			**

		1,960,217			1,575,432			384,785			24	%		687,511			687,030		481			0	%

Operating income	$	559,713		$	321,613		$	238,100			74	%	$	382,475		$	173,285	$	209,190			121	%

(1)	We record reimbursements from customers for out-of-pocket expenses as operating 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.

**	Not a meaningful percentage.

Operating ~~Revenues~~Revenues.—Changes in contract drilling services revenues for the Current ~~Period~~Quarter as compared to the Comparable ~~Period~~Quarter were driven by increases in both average dayrates and operating days. The 1715 percent increase in average dayrates increased ~~revenues~~revenue by ~~approximately $352~~$139 million while the 138 percent increase in operating days increased ~~revenue~~revenues by ~~$239~~approximately $69 million.

The ~~change~~increase in contract drilling services revenues relates to our ~~semisubmersibles,~~drillships, jackups and ~~drillships,~~semisubmersibles, which generated approximately ~~$259~~$90 million, ~~$194~~$87 million and ~~$138~~$31 million more revenue, respectively, in the Current ~~Period.~~Quarter.

The 2032 percent increase in ~~semisubmersible~~drillship average dayrates resulted in a ~~$188~~$60 million increase in revenues, and the 19 percent increase in drillship operating days resulted in a $30 million increase in revenues from the Comparable ~~Period while the increase in operating days of 8 percent resulted in an additional $71 million increase in revenues.~~Quarter. The increase in ~~semisubmersibles revenue is a~~both average dayrates and operating days was the result of ~~our rigs returning to standard operating dayrates after experiencing lower standby rates due to drilling restrictions in the U.S. Gulf of Mexico in the Comparable Period, as well as~~ theNoble ~~Paul Romano~~ ~~returning to work after being stacked for most of the Comparable Period. The increase in operating days is primarily from the~~~~Noble Jim Day,~~ ~~the~~~~Noble Homer Ferrington,~~~~the~~~~Noble Paul Romano~~Don Taylorand ~~the~~ Noble ~~Amos Runner~~Globetrotter II, which ~~all~~commenced their contracts with Shell in August 2013 and September 2013, respectively. Additionally, theNoble Leo Segerius operated ~~at full capacity~~ during the Current ~~Period~~Quarter after being off contract ~~for the majority of~~during the Comparable ~~Period.~~Quarter.

The 1315 percent increase in jackup average dayrates resulted in a ~~$106~~$53 million increase in revenues, ~~which was coupled with a 12~~and the 11 percent increase in jackup operating days ~~resulting~~resulted in ~~an $88~~a $34 million increase in revenues from the Comparable ~~Period.~~Quarter. The increase in average dayrates resulted from improved market conditions in the global shallow water ~~market throughout the jackup fleet.~~market. The increase in utilization is primarily related to certain rigs in ~~Mexico, West Africa and~~ the Middle and Far East, which ~~experienced increased~~were operating ~~days~~ during the Current ~~Period.~~Quarter but not in the Comparable Quarter.

The ~~increase in drillship revenues was driven by a 33~~15 percent increase in ~~operating days and~~semisubmersibles average dayrates resulted in a ~~16 percent~~$49 million increase in revenues from the Comparable Quarter. The increase in average dayrates ~~resulting in an $84 million and a $54 million increase in revenues, respectively,~~resulted from favorable dayrate changes on new contracts across the ~~Comparable Period. The increase in both average dayrates and operating days was the result of~~semisubmersible fleet, as well as theNoble ~~Bully I~~Max Smith,and theNoble ~~Bully II~~Clyde Boudreaux,~~and~~~~Noble Globetrotter I~~, which ~~commenced their contracts with Shell in March 2012, April 2012 and July 2012, respectively. These increases were partially offset by the~~~~Noble Phoenix~~~~, which completed its shipyard project~~operated during the Current ~~Period~~Quarter after being off contract for part the Comparable Quarter. The 5 percent decline in ~~preparation for its substitution for~~operating days resulted in an $18 million decline in revenues driven by downtime on theNoble ~~Muravlenko~~Paul Romano ~~in Brazil~~ and theNoble ~~Leo Segerius~~Homer Ferrington~~, which was undergoing its reliability upgrade project~~ during the Current ~~Period but operated during a portion of the Comparable Period.~~Quarter.

Operating Costs and ~~Expenses~~Expenses.—Contract drilling services operating costs and expenses increased ~~$291~~$39 million for the Current ~~Period~~Quarter as compared to the Comparable ~~Period.~~Quarter. A portion of the increase iswas due to the crew-up and operating expenses for the recently completed ~~rigs noted above,~~newbuild drillships, which ~~have~~ added approximately ~~$90~~$18 million in ~~expense~~expenses during the Current ~~Period.~~Quarter. Excluding the additional expenses related to these ~~rigs,~~newbuilds, our contract drilling costs increased ~~$201~~$21 million in the Current ~~Period~~Quarter from the Comparable ~~Period.~~Quarter. This change was primarily driven by a ~~$59~~$15 million increase in labor ~~due to rigs returning, or preparing to return, to work and salary increases effective in the second and third quarters of the prior year,~~costs, a ~~$37~~$13 million increase in shorebase support ~~a $30 million increase in maintenance~~ and ~~rig-related expense, a $23~~an $8 million increase in mobilization due to the amortization of certain rig moves and the demobilization of rigs primarily in Mexico, partially offset by a $14 million ~~increase~~decrease in ~~rig catering, communications~~repair and maintenance and a $1 million decrease in other miscellaneous expenses, a $14 million increase in insurance costs related to increased premiums on our policy renewed in March 2012, an $11 million increase in safety, training and regulatory inspections, a $5 million increase in rig communications and rental equipment, a $4 million increase in rotation costs and a $4 million increase in fuel and transportation costs.

The increase in depreciation and amortization in the Current ~~Period~~Quarter from the Comparable ~~Period~~Quarter was primarily attributable to assets placed in service, ~~during the Current Period,~~ including the~~Noble Bully I, Noble Bully IIand the~~ Noble Globetrotter I,Noble Don TaylorandNoble Globetrotter II.

Loss on impairment during the Current ~~Period~~Quarter was related to our two cold stacked submersible rigs arising from the potential disposition of these assets to an ~~impairment charge~~unrelated third party.

Gain on ~~our submersible fleet, primarily as a result~~disposal of assets during the Current Quarter was attributable to the sale of the ~~declining market outlook for drilling services for this rig type.~~Noble Lewis Dugger to an unrelated third party in Mexico.

Gain on contract settlements/extinguishments during the Current ~~Period related~~Quarter was attributable to ~~a $28 million gain on~~ the settlement of ~~an action with certain vendors for damages sustained during Hurricane Ike. Additionally, we received $5 million from a~~all claims ~~settlement on~~against the~~Noble David Tinsley~~ former shareholders of FDR Holdings, Ltd., which ~~had experienced a “punch-through” while being positioned on location~~we acquired in ~~2009.~~July 2010, relating to alleged breaches of various representations and warranties contained in the purchase agreement.

Other

The following table sets forth the operating ~~revenues and the operating costs and expenses~~results for our other services for the ~~nine~~three months ended September 30, ~~2012~~2013 and ~~2011:~~2012:


											Three Months Ended
	Nine Months Ended September 30,				Change						September 30,					Change
	2012		2011		$			%			2013			2012		$			%
Operating revenues:
Labor contract drilling services	$	58,538	$	43,123	$	15,415			36	%	$	8,493		$	22,667	$	(14,174	)		-63	%
Reimbursables (1)		2,177		4,619		(2,442	)		-53	%		402			1,050		(648	)		-62	%

	$	60,715	$	47,742	$	12,973			27	%	$	8,895		$	23,717	$	(14,822	)		-62	%

Operating costs and expenses:
Labor contract drilling services	$	34,070	$	25,326	$	8,744			35	%	$	8,153		$	12,991	$	(4,838	)		-37	%
Reimbursables (1)		2,099		4,389		(2,290	)		-52	%		390			1,008		(618	)		-61	%
Depreciation and amortization		10,081		9,886		195			2	%		4,016			3,449		567			16	%
Selling, general and administrative		1,481		863		618			72	%
Loss on impairment		5,635		—		5,635			**
General and administrative												430			630		(200	)		-32	%

		53,366		40,464		12,902			32	%		12,989			18,078		(5,089	)		-28	%

Operating income	$	7,349	$	7,278	$	71			1	%
Operating income (loss)											$	(4,094	)	$	5,639	$	(9,733	)			**

(1)	We record reimbursements from customers for out-of-pocket expenses as operating 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.

**	Not a meaningful percentage.

Operating Revenues and Costs and ~~Expenses~~Expenses.—The ~~change~~decrease in both revenue and expense primarily ~~relate~~relates to the ~~commencement~~cancellation of a ~~refurbishment~~ project with our customer, Shell, for one of its rigs ~~to be operated~~that was operating under a labor contract in Alaska. The project was cancelled on March 31, 2013.

Other Income and Expenses

Interest Expense, net of amount capitalized. Interest expense, net of amount capitalized, was $2 million lower in the Current Quarter as compared to the Comparable Quarter. The decrease is a result of the repayment of our 5.875 percent senior notes in June 2013 using proceeds from our commercial paper program, which are at a lower interest rate.

Income Tax Provision.Our income tax provision increased $31 million in the Current Quarter, of which $15 million is related to the tax on the sale of theNoble Lewis Dugger. Excluding the sale of theNoble Lewis Dugger, the increase in in our income tax provision was driven by higher pre-tax income, which increased our income tax provision by $27 million. This was partially offset by a lower tax rate in the Current Quarter as a result of favorable changes in the geographic mix of pre-tax income and the recognition of certain discrete benefits during the Current Quarter.

For the Nine Months Ended September 30, 2013 and 2012

Net income attributable to Noble-Swiss for the nine months ended September 30, 2013 (the “Current Period”) was $609 million, or $2.37 per diluted share, on operating revenues of $3.1 billion, compared to net income for the nine months ended September 30, 2012 (the “Comparable Period”) of $395 million, or $1.55 per diluted share, on operating revenues of $2.6 billion.

As a result of Noble-Swiss conducting all of its business through Noble-Cayman and its subsidiaries, the financial position and results of operations for Noble-Cayman, and the reasons for material changes in the amount of revenue and expense items between 2013 and 2012, are the same as the information presented below regarding Noble-Swiss in all material respects, except operating income for Noble-Cayman for the nine months ended September 30, 2013 and 2012 was $66 million and $44 million higher than operating income for Noble-Swiss for the same period. The operating income difference is primarily a result of executive costs directly attributable to Noble-Swiss for operations support and stewardship related services.

Rig Utilization, Operating Days and Average Dayrates

Operating results 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 nine months ended September 30, 2013 and 2012:

   Average Rig Operating Average
   Utilization (1) Days (2) Dayrates
   Nine Months Ended Nine Months Ended    Nine Months Ended
   September 30, September 30,    September 30,
   2013 2012 2013    2012    % Change 2013    2012    % Change
Jackups
   93 % 80 % 10,826       9,447       15 % $ 111,414       $ 95,333       17 %
Semisubmersibles
   79 % 86 % 3,036       3,286       -8 % 356,396       345,530       3 %
Drillships
   80 % 64 % 2,008       1,344       49 % 327,336       291,448       12 %
Other
   0 % 0 % —         —         —      —         —         —





Total
   84 % 76 % 15,870       14,077       13 % $ 185,589       $ 172,466       8 %





(1) Information reflects our policy of reporting on the basis of the number of rigs in our fleet, excluding newbuild rigs not placed in service.
(2) Information reflects the number of days that our rigs were operating under contract.
Contract Drilling Services
The following table sets forth the operating results for our contract drilling services segment for the nine months ended September 30, 2013 and 2012 (in thousands):
   Nine Months Ended
   September 30, Change
   2013 2012 $ %
Operating revenues:

Contract drilling services
   $ 2,945,310    $ 2,427,759    $ 517,551    21 %
Reimbursables (1)
   77,551    91,913    (14,362 ) -16 %
Other
   105    258    (153 ) -59 %


   $ 3,022,966    $ 2,519,930    $ 503,036    20 %


Operating costs and expenses:

Contract drilling services
   $ 1,464,320    $ 1,292,638    $ 171,682    13 %
Reimbursables (1)
   60,219    74,519    (14,300 ) -19 %
Depreciation and amortization
   631,396    539,698    91,698    17 %
General and administrative
   84,673    73,907    10,766    15 %
Loss on impairment
   3,585    12,710    (9,125 ) **
Gain on disposal of assets, net
   (35,646 ) —      (35,646 ) **
Gain on contract settlements/extinguishments, net
   (46,800 ) (33,255 ) (13,545 ) 41 %


   2,161,747    1,960,217    201,530    10 %


Operating income
   $ 861,219    $ 559,713    $ 301,506    54 %


(1) We record reimbursements from customers for out-of-pocket expenses as operating 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.
** Not a meaningful percentage.
Operating Revenues. Changes in contract drilling services revenues for the Current Period as compared to the Comparable Period were driven by increases in both operating days and average dayrates. The 13 percent increase in operating days increased revenue by $309 million while the 8 percent increase in average dayrates increased revenues by approximately $209 million.
The change in contract drilling services revenues relates to our jackups and drillships, which generated approximately $305 million and $266 million more revenue, respectively, in the Current Period. These amounts were offset by decreases in revenues from our semisubmersibles, which declined $53 million from the Comparable Period.
The 17 percent increase in jackup average dayrates resulted in a $174 million increase in revenues, which was coupled with a 15 percent increase in operating days, resulting in a $131 million increase in revenues from the Comparable Period. The increase in average dayrates resulted from improved market conditions in the global shallow water market. Additionally, revenue of $18 million was recognized in connection with the cancellation of a contract by our customer on theNoble Houston Colbert. The increase in utilization primarily related to rigs in Mexico and the Middle East, which experienced increased operating days during the Current Period.
The increase in drillship revenues was driven by a 49 percent increase in operating days and a 12 percent increase in average dayrates, resulting in a $194 million and a $72 million increase in revenues, respectively, from the Comparable Period. The increase in both average dayrates and operating days was the result of theNoble Bully I, Noble Bully II, Noble Globetrotter I, Noble Globetrotter IIand the Noble Don Taylor, which commenced their contracts with Shell in March 2012, April 2012, July 2012, August 2013 and September 2013, respectively. Additionally, theNoble Duchess and theNoble Leo Segerius operated during the Current Period after being off contract during the Comparable Period. These increases were partially offset by theNoble Roger Eason,which was in the shipyard during the Current Period to undergo its reliability upgrade project.
The decrease in semisubmersible revenues of $53 million primarily relates to theNoble Paul Romanoand theNoble Homer Ferrington, which were off contract during the Current Period but operated during the Comparable Period, coupled with downtime on theNoble Paul Wolff and theNoble Therald Martin during the Current Period. These decreases were partially offset by favorable dayrate changes on new contracts across the semisubmersible fleet, as well as theNoble Max Smith,which experienced full utilization during the Current Period after being off contract during the Comparable Period.
Operating Costs and Expenses. Contract drilling services operating costs and expenses increased $172 million for the Current Period as compared to the Comparable Period. A portion of the increase was due to the crew-up and operating expenses for the recently completed newbuild drillships, which added approximately $82 million in expenses during the Current Period. Excluding the additional expenses related to these rigs, our contract drilling costs increased $90 million in the Current Period from the Comparable Period. This change was primarily driven by a $50 million increase in labor, the majority of which is due to rigs returning to work during the Current Period and a $50 million increase related to shorebase support, partially offset by a $10 million decrease in mobilization due to the amortization of certain rig moves and the demobilization of rigs primarily in the North Sea and Mexico.
The increase in depreciation and amortization in the Current Period from the Comparable Period was primarily attributable to assets placed in service, including the Noble Bully I, Noble Bully II, Noble Globetrotter I, Noble Don TaylorandNoble Globetrotter II.
Loss on impairment during the Comparable Period related to an impairment charge on our submersible fleet, primarily as a result of the declining market for drilling services for this rig type. During the Current Period, we recorded an additional impairment charge of approximately $4 million on our two cold stacked submersible rigs arising from the potential disposition of these assets to an unrelated third party.
Gain on disposal of assets during the Current Period was attributable to the sale of theNoble Lewis Dugger to an unrelated third party in Mexico.
Gain on contract settlements/extinguishments during the Current Period was attributable to the settlement of all claims against the former shareholders of FDR Holdings, Ltd., which we acquired in July 2010, relating to alleged breaches of various representations and warranties contained in the purchase agreement. During the Comparable Period, we recognized a $28 million gain on the settlement of an action with certain vendors for damages sustained during Hurricane Ike. Additionally, we recognized a $5 million gain from a claims settlement on theNoble David Tinsley, which had experienced a “punch-through” while being positioned on location in 2009.
Other
The following table sets forth the operating results for our other services for the nine months ended September 30, 2013 and 2012:
   Nine Months Ended
   September 30,    Change
   2013    2012    $ %
Operating revenues:

Labor contract drilling services
   $ 43,150       $ 58,538       $ (15,388 ) -26 %
Reimbursables (1)
   1,125       2,177       (1,052 ) -48 %






   $ 44,275       $ 60,715       $ (16,440 ) -27 %






Operating costs and expenses:

Labor contract drilling services
   $ 29,804       $ 34,070       $ (4,266 ) -13 %
Reimbursables (1)
   1,075       2,099       (1,024 ) -49 %
Depreciation and amortization
   11,060       10,081       979    10 %
General and administrative
   1,523       1,481       42    3 %
Loss on impairment
   —         5,635       (5,635 ) **






   43,462       53,366       (9,904 ) -19 %






Operating income
   $ 813       $ 7,349       $ (6,536 ) **






(1) We record reimbursements from customers for out-of-pocket expenses as operating 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.
** Not a meaningful percentage.
Operating Revenues and Costs and Expenses. The change in both revenue and expense primarily relates to the cancellation of a project with our customer, Shell, for one of its rigs operating under a labor contract in Alaska. The project was cancelled on March 31, 2013.
Loss on impairment during the Comparable Period related to an impairment charge on certain corporate assets, as a result of a declining market for, and the potential disposal of, ~~the~~such assets.
Other Income and Expenses
Interest Expense, net of amount ~~capitalized~~capitalized.—Interest expense, net of amount capitalized, increased ~~$11~~$18 million in the Current Period as compared to the Comparable Period. The increase is ~~primarily the~~a result of lower capitalized interest in the ~~issuance~~Current Period as compared to the Comparable Period due primarily to the completion of ~~$1.2 billion in senior notes in February 2012.~~construction on five of our newbuild drillships, coupled with increased borrowings outstanding under our credit facilities and commercial paper program. During the Current Period, we capitalized approximately 55 percent of total interest charges versus approximately 66 percent during the Comparable Period.
Income Tax ~~Provision~~Provision.—Our income tax provision increased ~~$51~~$34 million in the Current Period, ~~primarily~~of which $15 million is related to the tax on the sale of theNoble Lewis Dugger. Excluding the sale of theNoble Lewis Dugger, the increase in our income tax provision was driven by higher pre-tax income, which increased our income tax provision by $43 million. This was partially offset by a lower tax rate in the Current Period as a result of ~~a higher~~favorable changes in the geographic mix of pre-tax income and ~~effective tax rate~~the recognition of certain discrete benefits during the Current Period. The increase in pre-tax earnings generated a $34 million increase in tax expense while the increase in the income tax rate during the Current Period increased the income tax provision by $17 million. The increase in the income tax rate was primarily due to the net gain from U.S. settlement and impairment charges, coupled with various discrete tax items recognized in the Current Period in other taxing jurisdictions.
Liquidity and Capital Resources
~~Overview~~
Net cash from operating activities for the Current Period ~~increased to~~was $1.2 billion and $932 ~~million from $459~~ million in the Comparable Period. The increase in net cash from operating activities in the Current Period was primarily attributable to ~~a significant~~an increase in net income. We had working capital of ~~$462~~$390 million and ~~$232~~$394 million at September 30, ~~2012~~2013 and December 31, ~~2011,~~2012, respectively. ~~As a result of our $1.2 billion debt offering in February 2012 partially offset by a reduction in borrowings outstanding on our Credit Facilities,~~Our total debt as a percentage of total debt plus equity increased to 3637.5 percent at September 30, ~~2012~~2013 from 3435.3 percent at December 31, ~~2011.~~2012 as a result of an increase in commercial paper outstanding during the Current Period.
Our principal source of capital in the Current Period was the $1.2 billion in cash generated from ~~our $1.2 billion senior notes offering and net cash from~~ operating activities ~~of $932 million.~~noted above, coupled with borrowings through our commercial paper program. Cash generated during the Current Period was primarily used to ~~repay borrowings outstanding under our Credit Facilities and to~~ fund our capital expenditure program.
Our currently anticipated ~~future~~ cash flow needs may include the following:

committed capital expenditures, including expenditures for newbuild projects currently underway;

normal recurring operating expenses;

discretionary capital expenditures, including various capital upgrades;

payments of dividends; and

repayment of maturing debt.
We currently expect to fund these cash flow needs with cash generated by our operations, cash on hand, ~~and~~ borrowings under our existing ~~Credit Facilities~~credit facilities and commercial paper ~~program.~~program, borrowings under potential new credit facilities, issuances of long-term debt, or asset sales. However, to adequately cover our expected cash flow needs, we may require capital in excess of the amount provided through these sources, and we may seek additional sources of liquidity and/or delay or cancel certain discretionary capital expenditures as necessary.
At September 30, ~~2012,~~2013, we had a total contract drilling services backlog of approximately ~~$14.8~~$16.2 billion. Our backlog as of September 30, ~~2012~~2013 reflects a commitment of 8380 percent of available ~~operating~~ days for the remainder of ~~2012~~2013 and 6971 percent for ~~2013.~~2014. See additional information regarding our backlog at “Contract Drilling Services Backlog.”
Capital Expenditures
Our primary use of available liquidity during ~~2012~~2013 is for capital expenditures. Capital expenditures, including capitalized interest, totaled ~~$1.2~~$1.7 billion and ~~$2.0~~$1.2 billion for the nine months ended September 30, 2013 and 2012, ~~and 2011,~~ respectively.
At September 30, ~~2012,~~2013, we had 11nine rigs under construction, and capital expenditures, excluding capitalized interest, for new construction during the first nine months of ~~2012~~2013 totaled ~~$441 million,~~$1.0 billion, as follows (in millions):

Rig type/name

Currently under construction

Drillships

Noble Globetrotter II
   $ 187.3
Noble Don Taylor (formerly HHI Drillship I)
   63.0
Noble Bob Douglas (formerly HHI Drillship II)
   57.0
Noble Sam Croft (formerly HHI Drillship III)
   2.4
HHI Drillship IV
   2.4
Jackups

Noble Sam Turner (formerly Noble Jackup IV)
   47.2
Noble Regina Allen (formerly Noble Jackup I)
   6.0
Noble Mick O’Brien (formerly Noble Jackup II)
   4.0
Noble Houston Colbert (formerly Noble Jackup III)
   3.0
Noble Tom Prosser (formerly Noble Jackup V)
   1.7
Noble Jackup VI
   1.6
Recently completed construction projects

Noble Globetrotter I
   41.5
Noble Bully II
   18.7
Noble Bully I
   4.7


Total Newbuild Capital Expenditures
   $ 440.5


Rig type/name

Currently under construction

Drillships

Noble Sam Croft
   $ 70.9
Noble Tom Madden
   64.8
Noble Bob Douglas **
   63.3
Jackups

Noble Jackup VII (CJ70-Mariner)
   179.6
Noble Regina Allen **
   8.6
Noble Houston Colbert
   7.4
Noble Sam Turner
   4.2
Noble Tom Prosser
   3.3
Noble Sam Hartley
   2.6
Recently completed construction projects

Noble Don Taylor
   376.1
Noble Mick O’Brien
   134.4
Noble Globetrotter II
   98.9
Other
   7.7


Total Newbuild Capital Expenditures
   $ 1,021.8


** These units were delivered from the shipyard subsequent to September 30, 2013.
In addition to the newbuild expenditures noted above, capital expenditures ~~for~~during the first nine months ~~ended September 30, 2012~~of 2013 consisted of the following:

$~~548~~610 million for capital expenditures, which includes major projects, ~~including $50 million in~~ subsea related expenditures and ~~$29 million to upgrade two drillships currently operating in Brazil;~~
~~$150 million for other capitalized expenditures, including~~ upgrades and replacements to drilling ~~equipment that generally have a useful life ranging from 3 to 5 years;~~equipment; and

$~~108~~92 million in capitalized interest.
Our total capital expenditure estimate for ~~2012~~2013 is approximately ~~$1.8~~$2.6 billion, including capitalized ~~interest, which may fluctuate as a result of the timing of completion of ongoing projects.~~interest.
In connection with our capital expenditure program, as of September 30, ~~2012,~~2013, we had outstanding commitments, including shipyard and purchase commitments, for approximately ~~$3.0~~$2.6 billion, of which we expect to spend approximately ~~$1.8~~$1.7 billion within the next twelve months.
From time to time we consider possible projects that would require expenditures that are not included in our capital budget, and such unbudgeted 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 ~~expected amounts~~plan 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, changes in governmental regulations and requirements and changes in design criteria or specifications during repair or construction.
Dividends
Our most recent quarterly dividend payment to shareholders, totaling ~~approximately $33~~$64 million (or ~~$0.13~~$0.25 per share), was declared on July ~~27, 2012~~26, 2013 and paid on August ~~16, 2012~~15, 2013 to holders of record on August ~~6, 2012.~~5, 2013. This payment represented the first tranche of our previously approved annual dividend payment to shareholders discussed below.
In April ~~2012,~~2013, our shareholders approved the payment of a dividend aggregating ~~$0.52~~$1.00 per share to be paid in four equal installments, the first of which was paid in August ~~2012,~~2013, with the remaining three installments ~~to be paid in~~currently scheduled for November ~~2012,~~2013, February ~~2013~~2014 and May ~~2013,~~2014, respectively. ~~These dividends will require us~~Our Board of Directors has the authority to ~~make cash payments~~accelerate the payment of ~~approximately $33 million in~~any installment, or portions thereof, at its sole discretion at any time prior to payment of the fourth quarter of 2012, based on the number of shares currently outstanding. As of September 30, 2012, we had $100 million of dividends payable outstanding on this obligation. Any additional issuances of shares would further increase our obligation.final installment.
The declaration and payment of dividends, ~~in the future by Noble-Swiss~~ or ~~the distributions of capital, including~~ returns of capital in the form of par value reductions, require authorization of the shareholders of Noble-Swiss. The amount of such dividends, distributions and returns of capital 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 shareholders.
Credit Facilities and ~~Long-Term Debt~~Senior Unsecured Notes
~~During June 2012,~~Credit Facilities and Commercial Paper Program
We currently have three separate credit facilities with an aggregate maximum available capacity of $2.9 billion (together, the “Credit Facilities”), which includes a $600 million 364-day unsecured revolving credit agreement we ~~replaced our $575~~entered into in August 2013. In addition, we have an $800 million credit facility ~~scheduled to mature~~maturing in ~~2013, with~~2015 and a ~~new $1.2~~$1.5 billion credit facility ~~which matures~~maturing in 2017. ~~The new facility, combined with~~We also established a commercial paper program in September 2012, which allows us to issue up to $1.8 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program are supported by our ~~existing $600~~Credit Facilities and, therefore, are classified as long-term on our Consolidated Balance Sheet. Our total debt related to the Credit Facilities and commercial paper program was $1.3 billion at September 30, 2013 as compared to $340 million ~~credit facility that matures in 2015, gives us a total borrowing~~at December 31, 2012. At September 30, 2013, we had approximately $1.6 billion of available capacity under the ~~two facilities (together referred to as the “Credit Facilities”) of $1.8 billion. The covenants and events of default under the~~ Credit Facilities are substantially similar, and each facility contains a covenant that limits our ratio of debt to total tangible capitalization, as defined in the Credit Facilities, to 0.60. At September 30, 2012, our ratio of debt to total tangible capitalization was less than 0.36. We were in compliance with all covenants under the Credit Facilities as of September 30, 2012.Facilities.
The Credit Facilities provide us with the ability to issue up to $375 million in letters of credit in the aggregate. The issuance of letters of credit does not increase our borrowings outstanding under the Credit Facilities, but it does reduce the amount available. At September 30, ~~2012,~~2013, we had no letters of credit ~~outstanding~~issued under the Credit Facilities.
During September 2012, we established a commercial paper program, which will allow us to issue up to $1.8 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program are supported by the unused committed capacity under our Credit Facilities and, as such, are classified as long-term on our balance sheet. Subsequent to September 30, 2012, we began issuing notes under the program and had outstanding notes totaling $328 million as of October 31, 2012.Senior Unsecured Notes
In February 2012, we issued, through our indirect wholly-owned subsidiary, Noble Holding International Limited (“NHIL”), $1.2 billion aggregate principal amount of senior notes in three separate tranches, ~~with~~comprising $300 million of 2.50% Senior Notes due 2017, $400 million of 3.95% Senior Notes due 2022, and $500 million of 5.25% Senior Notes due 2042. The weighted average coupon of all three tranches is 4.13%. The net proceeds of approximately $1.19 billion, after expenses, were primarily used to repay the then outstanding balance on our Credit Facilities.
Our 5.875% Senior Notes ~~mature~~matured during the second quarter of 2013. We ~~anticipate using availability~~used proceeds from our commercial paper program to repay the $300 million outstanding balance.
Covenants
The Credit Facilities and commercial paper program are guaranteed by our indirect wholly-owned subsidiaries, NHIL and Noble Drilling Corporation (“NDC”). The covenants and events of default under the Credit Facilities are substantially similar, and each facility contains a covenant that limits our ratio of debt to total tangible capitalization, as defined in the Credit Facilities, to ~~repay the outstanding balance; therefore, we continue to report the balance as long-term at~~0.60. At September 30, ~~2012.~~2013, our ratio of debt to total tangible capitalization was approximately 0.37. We were in compliance with all covenants under the Credit Facilities as of September 30, 2013.
~~The~~In addition to the covenants from the Credit Facilities noted above, 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 September 30, ~~2012,~~2013, we were in compliance with all our debt covenants. We continually monitor compliance with the covenants under our ~~Credit Facilities and senior~~ notes and, based on our expectations for ~~2012,~~2013, expect to remain in compliance during the year.
Other
At September 30, ~~2012,~~2013, we had letters of credit of ~~$36~~$214 million and performance and tax assessment bonds totaling ~~$318~~$131 million supported by surety bonds outstanding. Additionally, certain of our subsidiaries issue ~~from time~~guarantees 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~~in-lieu of payment of custom, value added or similar taxes in those countries.
Our long-term debt was $4.6 billion at September 30, 2012 as compared to $4.1 billion at December 31, 2011. The increase in debt is a result of the issuance of $1.2 billion aggregate principal amount of senior notes, partially offset by the net repayment of $630 million on the Credit Facilities during the current year. For additional information on our long-term debt, see Note 8 to our consolidated financial statements.
New Accounting Pronouncements
In ~~May 2011,~~February 2013, the ~~Financial Accounting Standards Board (“FASB”)~~FASB issued Accounting Standards Update (“ASU”) No. ~~2011-04,~~2013-02, which amends FASB Accounting Standards Codification (“ASC”) Topic ~~820, “Fair Value Measurements and Disclosures.~~220, “Comprehensive Income.” This amended guidance ~~clarifies the wording used to describe many of the requirements in accounting literature for measuring fair value and for disclosing~~requires additional information about ~~fair value measurements. The goal~~reclassification adjustments out of ~~the amendment is to create consistency between the United States~~comprehensive income, including changes in comprehensive income balances by component and ~~international accounting standards. The~~significant items reclassified out of comprehensive income. This guidance is effective for ~~annual and interim~~ reporting periods beginning ~~on or~~ after December 15, ~~2011. Our~~2012. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or financial disclosures.
In ~~June 2011,~~March 2013, the FASB issued ASU No. ~~2011-05,~~2013-05, which amends ASC Topic ~~220, “Comprehensive Income.~~830, “Foreign Currency Matters.” This ASU ~~allows an~~provides guidance on foreign currency translation adjustments when a parent entity ceases to ~~present the total~~have a controlling interest on a previously consolidated subsidiary or group of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.assets. The ~~amendment no longer allows an entity to show changes to other comprehensive income solely through the statement of equity. For publicly traded entities, the~~ guidance is effective for ~~annual and interim reporting periods~~fiscal years beginning on or after December 15, ~~2011. In December 2011,~~2013. We are still evaluating what impact, if any, the ~~FASB issued ASU No. 2011-12, which defers only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments. Our~~ adoption of this guidance ~~did not~~will have ~~a material impact~~ on our financial condition, results of operations, cash flows or financial disclosures.
In July 2013, the FASB issued ASU No. 2013-11, which amends ASC Topic 740, “Taxes.” This ASU provides guidance on the presentation of tax benefits when a net operating loss carryforward or other tax credit carryforward exists. The guidance is effective for fiscal years beginning on or after December 15, 2013. We are still evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the potential for loss from 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 Facilities. Interest on borrowings under the Credit Facilities is at an agreed upon percentage point spread over LIBOR, or a base rate stated in the agreements. At September 30, ~~2012,~~2013, we had ~~$345 million~~$1.3 billion in borrowings outstanding under our commercial paper program, which is supported by the Credit Facilities. Assuming our current level of debt, a change in LIBOR rates of 1 percent would increase our interest charges by approximately $3$13 million per year.
We maintain certain debt instruments at a fixed rate whose fair value will fluctuate based on changes in interest rates and market perceptions of our credit risk. The fair value of our long-term debt was ~~$5.1~~$5.4 billion and ~~$4.3~~$5.1 billion at September 30, ~~2012~~2013 and December 31, ~~2011,~~2012, respectively. The increase in fair value was primarily a result of increased indebtedness outstanding under our ~~issuance of $1.2 billion in debt in February 2012, partially offset by the net repayment of $630 million on our Credit Facilities,~~commercial paper program coupled with ~~changes in fair value related to~~ changes in interest rates and market perceptions of our credit ~~risk.~~risk, partially offset by the repayment of our $300 million fixed rate senior note.
Foreign Currency Risk
As a multinational company, we conduct business worldwide. Our functional currency is primarily the U.S. dollar, which is consistent with the oil and gas industry. However, outside the United States, a portion of our expenses are incurred in local currencies. Therefore, when the U.S. dollar weakens (strengthens) in relation to the currencies of the countries in which we operate, our expenses reported in U.S. dollars will increase (decrease).
We are exposed to risks on future cash flows to the extent that local currency expenses exceed revenues denominated in local currency that are different than the functional currency. To help manage this potential risk, we periodically enter into derivative instruments to manage our exposure to fluctuations in currency exchange rates, and we may conduct hedging activities in future periods to mitigate such exposure. These contracts are primarily accounted for as cash flow hedges, with the effective portion of changes in the fair value of the hedge recorded on the Consolidated Balance Sheet and in “Accumulated other comprehensive loss” (“AOCL”). Amounts recorded in AOCL are reclassified into earnings in the same period or periods that the hedged item is settled and recognized in earnings. The ineffective portion of changes in the fair value of the hedged item is recorded directly to earnings. 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.
AtOur North Sea and Brazil operations have a significant amount of their cash operating expenses payable in local currencies. To limit the potential risk of currency fluctuations, we periodically enter into forward contracts, all of which have a maturity of less than 12 months. The forward contracts maturing during the remainder of 2013 represent approximately 59 percent of these forecasted local currency requirements. The notional amount of the forward contracts outstanding, expressed in U.S. dollars, was approximately $42 million at September 30, ~~2012, we had no outstanding derivative contracts. Depending on market conditions, we may elect~~2013. Total unrealized gain related to ~~utilize short-term~~these forward ~~currency~~ contracts was $0.6 million as of September 30, 2013 and was recorded as part of AOCL. A 10 percent change in the ~~future.~~exchange rate for the local currencies would change the fair value of these forward contracts by approximately $4 million.
Market Risk
We have a U.S. noncontributory defined benefit pension plan that covers certain salaried employees and a U.S. noncontributory defined benefit pension plan that covers certain hourly employees, whose initial date of employment is prior to August 1, 2004 (collectively referred to as our “qualified U.S. plans”). These plans are governed by the Noble Drilling Corporation Retirement Trust. The benefits from these plans are based primarily on years of service and, for the salaried plan, employees’ compensation near retirement. These plans are designed to qualify under the Employee Retirement Income Security Act of 1974 (“ERISA”), and our funding policy is consistent with funding requirements of ERISA and other applicable laws and regulations. We make cash contributions, or utilize credits available to us, for the qualified U.S. plans when required. The benefit amount that can be covered by the qualified U.S. plans is limited under ERISA and the Internal Revenue Code of ~~1986 as amended.~~1986. Therefore, we maintain an unfunded, nonqualified excess benefit plan designed to maintain benefits for all employees at the formula level in the qualified ~~salary~~ U.S. ~~plan.~~plans.
In addition to the U.S. plans, each of Noble Drilling (Land Support) Limited, Noble Enterprises Limited and Noble Drilling (Nederland) B.V., all indirect, wholly-owned subsidiaries of Noble-Swiss, maintains a pension plan that covers all of its salaried, ~~employees.~~non-union employees (collectively referred to as our “non-U.S. plans”). Benefits are based on credited service and employees’ compensation, ~~near retirement,~~ as defined by the plans.
Changes in market asset values related to the pension plans noted above could have a material impact upon our “Consolidated Statement of Comprehensive Income” and could result in material cash expenditures in future periods.
Item 4. Controls and Procedures
David W. Williams, Chairman, President and Chief Executive Officer of Noble-Swiss, and James A. MacLennan, Senior Vice President and Chief Financial Officer of Noble-Swiss, have evaluated the disclosure controls and procedures of Noble-Swiss as of the end of the period covered by this report. On the basis of this evaluation, Mr. Williams and Mr. MacLennan have concluded that Noble-Swiss’ disclosure controls and procedures were effective as of September 30, ~~2012.~~2013. Noble-Swiss’ disclosure controls and procedures are designed to ensure that information required to be disclosed by Noble-Swiss in the reports that it files with or submits 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.
David W. Williams, President and Chief Executive Officer of Noble-Cayman, and Dennis J. Lubojacky, Vice President and Chief Financial Officer of Noble-Cayman, have evaluated the disclosure controls and procedures of Noble-Cayman as of the end of the period covered by this report. On the basis of this evaluation, Mr. Williams and Mr. Lubojacky have concluded that Noble-Cayman’s disclosure controls and procedures were effective as of September 30, ~~2012.~~2013. Noble-Cayman’s disclosure controls and procedures are designed to ensure that information required to be disclosed by Noble-Cayman in the reports that it files with or submits 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 September 30, ~~2012~~2013 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, respectively.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information regarding legal proceedings is set forth in Notes ~~6, 7~~4, 8 and 1315 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
Risks Relating to Our Business
The risk factors below update and supplement the risks described under “Risk Factors Relating to Our Business” in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2012, and should be considered together with the risk factors described in that report.
We may not complete the proposed change in the place of incorporation of Noble-Swiss from Switzerland to the United Kingdom. If we do complete the change in the place of incorporation, we may not realize the benefits we anticipate from the migration, or the migration may adversely impact us or our shareholders.
We cannot assure that we will complete the announced change of place of incorporation of our parent company from Switzerland to the United Kingdom if certain conditions, including receiving final regulatory clearance, are not satisfied.
Even if we complete the migration to the United Kingdom, we may not realize the benefits that we expect to realize from the migration. The migration may also expose us to certain risks that could have an adverse effect on us or our results of operations. Further, if the migration is completed, the rights of our shareholders as shareholders of an English company will differ from the rights they have currently as shareholders of a Swiss company.
In connection with the proposed migration, we filed with the U.S. Securities and Exchange Commission (“SEC”) a registration statement on Form S-4, which was declared effective by the SEC, and we distributed to our shareholders a definitive proxy statement/prospectus. You should read the definitive proxy statement/prospectus carefully because it contains important information about us and the migration, including risks related thereto.
The proposed separation and spin-off of our standard specification business is contingent upon the satisfaction of a number of conditions, may require significant time and attention of our management and may not achieve the intended results, and difficulties in connection with the spin-off could have an adverse effect on us.
As previously disclosed, our Board of Directors has approved a plan to reorganize our business by means of a separation and spin-off of a newly formed subsidiary whose assets would consist of most of our standard specification drilling units. For more information, please read “The Proposed Spin-Off” in Item 2 of Part I of this Quarterly Report on Form 10-Q. The spin-off, including any potential IPO of our subsidiary that would own and operate most of our standard specification business, is contingent upon the final approval of our Board of Directors, the approval of our shareholders, and other conditions, some of which are beyond our control. We may also choose to abandon the spin-off at any time. For these and other reasons, the spin-off may not be completed in the expected timeframe or at all. Additionally, execution of the proposed spin-off will likely continue to require significant expense, time and attention of our management. The spin-off could distract management from the operation of our business and the execution of our other strategic initiatives. Our employees may also be uncertain about their future roles within the separate companies pending the completion of the spin-off, which could lead to departures. Further, if the spin-off is completed, we may not realize the benefits we expect to realize. Any such difficulties could have an adverse effect on our business, results of operations and financial condition. If completed, the spin-off may also expose us to certain risks that could have an adverse effect on our results of operations and financial condition.
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 of shares by Noble-Swiss:

Period
   Total Number
of Shares
Purchased    Average
Price Paid
per Share Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs    Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs
July 2012
   16,997       $ 37.46 ⁽¹⁾ —         6,769,891
August 2012
   835       $ 38.25 ⁽¹⁾ —         6,769,891
September 2012
   —         n/a    —         6,769,891
Period
   Total Number
of Shares
Purchased⁽²⁾    Average
Price Paid
per Share    Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs    Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs⁽¹⁾
July 2013
   10,912       $ 38.64       —         6,769,891
August 2013
   863       $ 38.73       —         6,769,891
September 2013
   630       $ 40.44       —         6,769,891

(1) All share purchases made in the open market and were pursuant to the share repurchase program which our Board of Directors authorized and adopted and our shareholders approved. Our repurchase program has no date of expiration.
(2) Amounts represent shares surrendered by employees for withholding taxes payable upon the vesting of restricted stock or exercise of stock ~~options and were not made pursuant to the share repurchase program which our Board of Directors authorized and adopted. Our repurchase program has no date of expiration.~~options.
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
November 4, 2013
David W. Williams
Chairman, President and Chief Executive Officer
(Principal Executive Officer)

~~November 6, 2012~~
Date
/s/ James A. MacLennan
James A. MacLennan
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

Noble Corporation, a Cayman Islands company
/s/ David W. Williams
November 4, 2013
David W. Williams
President and Chief Executive Officer
(Principal Executive Officer)

~~November 6, 2012~~
Date
/s/ Dennis J. Lubojacky
Dennis J. Lubojacky
Vice President and Chief Financial Officer
(Principal Financial Officer)

Index to Exhibits

Exhibit
Number

Exhibit
2.1 Merger Agreement, dated as of June 30, 2013, between Noble Corporation, a Swiss corporation (“Noble-Swiss”) and Noble Corporation Limited (“Noble-UK”) (filed as Exhibit 2.1 to Noble-Swiss’ Current Report on Form 8-K filed on July 1, 2013 and incorporated herein by reference).
2.2    Agreement and Plan of Merger, Reorganization and Consolidation, dated as of December 19, 2008, among ~~Noble Corporation, a Swiss corporation (“Noble-Swiss”),~~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~~2.3    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 Noble-Swiss’ Quarterly Report on Form 10-Q filed on August ~~6, 2012~~5, 2013 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).
~~10.1~~4.1    ~~Form of Commercial Paper Dealer~~364-Day Revolving Credit Agreement dated as of ~~September 19, 2012 between Noble Corporation, a~~August 22, 2013 among Noble-Cayman; the Lenders from time to time parties thereto; JPMorgan Chase Bank, N.A., as Administrative Agent and Swingline Lender; Barclays Bank PLC, Citibank, N.A., Deutsche Bank Securities, Inc. and Wells Fargo Bank, National Association, as Co-Syndication Agents; and BNP Paribas, Credit Agricole Corporate & Investment Bank, Credit Suisse AG, Cayman Islands ~~company, Noble Holding International Limited, a Cayman Islands company, Noble Drilling Corporation, a Delaware corporation,~~Branch, Goldman Sachs Bank USA, HSBC Bank USA, N.A., SunTrust Bank and ~~certain investment banks~~The Bank of Tokyo-Mitsubishi UFJ, LTD., as Co-Documentation agents (filed as Exhibit ~~10.1~~4.1 to ~~Noble-Swiss’~~Noble-Swiss and Noble-Cayman’s Current Report on Form 8-K filed on ~~September 19, 2012~~August 22, 2013 and incorporated herein by reference).
~~10.2~~4.2    ~~Form of Issuing and Paying Agent~~Guaranty Agreement dated as of ~~September 19, 2012~~August 22, 2013 between Noble Drilling Corporation, a ~~Cayman Islands company~~Delaware corporation, and ~~the Issuing and Paying Agent~~JPMorgan Chase Bank, N.A. (filed as Exhibit ~~10.2~~4.2 to ~~Noble-Swiss’~~Noble-Swiss and Noble-Cayman’s Current Report on Form 8-K filed on ~~September 19, 2012~~August 22, 2013 and incorporated herein by reference).
4.3 Guaranty Agreement dated as of August 22, 2013 between Noble Holding International Limited, a Cayman Islands company, and JPMorgan Chase Bank, N.A. (filed as Exhibit 4.3 to Noble-Swiss and Noble-Cayman’s Current Report on Form 8-K filed on August 22, 2013 and incorporated herein by reference).
31.1    Certification of David W. Williams pursuant to the U.S. Securities Exchange Act of 1934, as amended, Rule 13a-14(a) or Rule 15d-14(a), for Noble-Swiss and for Noble-Cayman.
31.2    Certification of James A. MacLennan pursuant to the U.S. Securities Exchange Act of 1934, as amended, Rule 13a- 14(a) or Rule 15d-14(a), for Noble-Swiss.
31.3    Certification of Dennis J. Lubojacky pursuant to the U.S. Securities Exchange Act of 1934, as amended, Rule 13a- 14(a) or Rule 15d-14(a), 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 James A. MacLennan pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Noble-Swiss.
32.3+    Certification of Dennis J. Lubojacky pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Noble-Cayman.
~~101+~~101    Interactive Data File

* Management contract or compensatory plan or arrangement
+ Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K.

5460


	Shares						Additional Paid-in			Retained			Treasury			Accumulated Other Comprehensive			Noncontrolling		Total
	Balance			Par Value			Capital			Earnings			Shares			Loss			Interests		Equity
Balance at December 31, 2010		262,415		$	917,684		$	39,006		$	6,630,500		$	(373,967	)	$	(50,220	)	$	124,631	$	7,287,634

Employee related equity activity
Amortization of share-based compensation		—			—			26,857			—			—			—			—		26,857
Issuance of share-based compensation shares		248			844			(837	)		—			—			—			—		7
Exercise of stock options		490			1,629			7,104			—			—			—			—		8,733
Tax benefit of stock options exercised		—			—			278			—			—			—			—		278
Restricted shares forfeited or repurchased for taxes		(319	)		(1,107	)		1,107			—			(10,211	)		—			—		(10,211	)
Retirement of treasury shares		(10,116	)		(33,035	)					(340,612	)		373,647			—			—		—
Settlement of FIN48 provision		—			—						15,658			—			—			—		15,658
Net income		—			—			—			243,895			—			—			290		244,185
Par value reduction payments		—			(89,948	)		(24,505	)		—			—			—			—		(114,453	)
Equity contribution by joint venture partner		—			—			—			—			—			—			518,973		518,973
Other comprehensive loss, net		—			—			—			—			—			(5,992	)		—		(5,992	)

Balance at September 30, 2011		252,718		$	796,067		$	49,010		$	6,549,441		$	(10,531	)	$	(56,212	)	$	643,894	$	7,971,669

Balance at December 31, 2011		252,639		$	766,595		$	48,356		$	6,676,444		$	(10,553	)	$	(74,321	)	$	691,331	$	8,097,852

Employee related equity activity
Amortization of share-based compensation		—			—			28,782			—			—			—			—		28,782
Issuance of share-based compensation shares		428			1,284			(1,276	)		—			—			—			—		8
Exercise of stock options		606			1,722			10,949			—			—			—			—		12,671
Tax benefit of stock options exercised		—			—			1,174			—			—			—			—		1,174
Restricted shares forfeited or repurchased for taxes		(374	)		(1,138	)		1,138			—			(10,433	)		—			—		(10,433	)
Net income		—			—			—			394,767			—			—			26,931		421,698
Equity contribution by joint venture partner		—			—			—			—			—			—			40,000		40,000
Par value reduction/dividend payments		—			(58,470	)		(13,427	)		(33,195	)		—			—			—		(105,092	)
Dividends payable		—			—			—			(99,582	)		—			—			—		(99,582	)
Other comprehensive income, net		—			—			—			—			—			2,244			—		2,244

Balance at September 30, 2012		253,299		$	709,993		$	75,696		$	6,938,434		$	(20,986	)	$	(72,077	)	$	758,262	$	8,389,322


	Three Months Ended
	September 30,			June 30,
	2012			2012
Average dayrate	$	168,608		$	181,663
Average utilization		78	%		76	%
Daily contract drilling services costs	$	90,885		$	90,699
Contract drilling services margin		46	%		50	%


Rig type/name
Currently under construction
Drillships
Noble Globetrotter II	$	187.3
Noble Don Taylor (formerly HHI Drillship I)		63.0
Noble Bob Douglas (formerly HHI Drillship II)		57.0
Noble Sam Croft (formerly HHI Drillship III)		2.4
HHI Drillship IV		2.4
Jackups
Noble Sam Turner (formerly Noble Jackup IV)		47.2
Noble Regina Allen (formerly Noble Jackup I)		6.0
Noble Mick O’Brien (formerly Noble Jackup II)		4.0
Noble Houston Colbert (formerly Noble Jackup III)		3.0
Noble Tom Prosser (formerly Noble Jackup V)		1.7
Noble Jackup VI		1.6
Recently completed construction projects
Noble Globetrotter I		41.5
Noble Bully II		18.7
Noble Bully I		4.7

Total Newbuild Capital Expenditures	$	440.5


Rig type/name
Currently under construction
Drillships
Noble Sam Croft	$	70.9
Noble Tom Madden		64.8
Noble Bob Douglas **		63.3
Jackups
Noble Jackup VII (CJ70-Mariner)		179.6
Noble Regina Allen **		8.6
Noble Houston Colbert		7.4
Noble Sam Turner		4.2
Noble Tom Prosser		3.3
Noble Sam Hartley		2.6
Recently completed construction projects
Noble Don Taylor		376.1
Noble Mick O’Brien		134.4
Noble Globetrotter II		98.9
Other		7.7

Total Newbuild Capital Expenditures	$	1,021.8


Period	Total Number of Shares Purchased		Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 2012		16,997	$	37.46	⁽¹⁾		—		6,769,891
August 2012		835	$	38.25	⁽¹⁾		—		6,769,891
September 2012		—		n/a			—		6,769,891


Period	Total Number of Shares Purchased⁽²⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾
July 2013		10,912	$	38.64		—		6,769,891
August 2013		863	$	38.73		—		6,769,891
September 2013		630	$	40.44		—		6,769,891


/s/ David W. Williams		November 4, 2013
David W. Williams Chairman, President and Chief Executive Officer (Principal Executive Officer)	~~November 6, 2012~~	Date

/s/ James A. MacLennan
James A. MacLennan Senior Vice President and Chief Financial Officer (Principal Financial Officer)

Noble Corporation, a Cayman Islands company

/s/ David W. Williams		November 4, 2013
David W. Williams President and Chief Executive Officer (Principal Executive Officer)	~~November 6, 2012~~	Date

/s/ Dennis J. Lubojacky
Dennis J. Lubojacky Vice President and Chief Financial Officer (Principal Financial Officer)


Exhibit Number		Exhibit

2.1		Merger Agreement, dated as of June 30, 2013, between Noble Corporation, a Swiss corporation (“Noble-Swiss”) and Noble Corporation Limited (“Noble-UK”) (filed as Exhibit 2.1 to Noble-Swiss’ Current Report on Form 8-K filed on July 1, 2013 and incorporated herein by reference).

2.2		Agreement and Plan of Merger, Reorganization and Consolidation, dated as of December 19, 2008, among ~~Noble Corporation, a Swiss corporation (“Noble-Swiss”),~~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~~2.3		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 Noble-Swiss’ Quarterly Report on Form 10-Q filed on August ~~6, 2012~~5, 2013 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).

~~10.1~~4.1		~~Form of Commercial Paper Dealer~~364-Day Revolving Credit Agreement dated as of ~~September 19, 2012 between Noble Corporation, a~~August 22, 2013 among Noble-Cayman; the Lenders from time to time parties thereto; JPMorgan Chase Bank, N.A., as Administrative Agent and Swingline Lender; Barclays Bank PLC, Citibank, N.A., Deutsche Bank Securities, Inc. and Wells Fargo Bank, National Association, as Co-Syndication Agents; and BNP Paribas, Credit Agricole Corporate & Investment Bank, Credit Suisse AG, Cayman Islands ~~company, Noble Holding International Limited, a Cayman Islands company, Noble Drilling Corporation, a Delaware corporation,~~Branch, Goldman Sachs Bank USA, HSBC Bank USA, N.A., SunTrust Bank and ~~certain investment banks~~The Bank of Tokyo-Mitsubishi UFJ, LTD., as Co-Documentation agents (filed as Exhibit ~~10.1~~4.1 to ~~Noble-Swiss’~~Noble-Swiss and Noble-Cayman’s Current Report on Form 8-K filed on ~~September 19, 2012~~August 22, 2013 and incorporated herein by reference).

~~10.2~~4.2		~~Form of Issuing and Paying Agent~~Guaranty Agreement dated as of ~~September 19, 2012~~August 22, 2013 between Noble Drilling Corporation, a ~~Cayman Islands company~~Delaware corporation, and ~~the Issuing and Paying Agent~~JPMorgan Chase Bank, N.A. (filed as Exhibit ~~10.2~~4.2 to ~~Noble-Swiss’~~Noble-Swiss and Noble-Cayman’s Current Report on Form 8-K filed on ~~September 19, 2012~~August 22, 2013 and incorporated herein by reference).

4.3		Guaranty Agreement dated as of August 22, 2013 between Noble Holding International Limited, a Cayman Islands company, and JPMorgan Chase Bank, N.A. (filed as Exhibit 4.3 to Noble-Swiss and Noble-Cayman’s Current Report on Form 8-K filed on August 22, 2013 and incorporated herein by reference).

31.1		Certification of David W. Williams pursuant to the U.S. Securities Exchange Act of 1934, as amended, Rule 13a-14(a) or Rule 15d-14(a), for Noble-Swiss and for Noble-Cayman.

31.2		Certification of James A. MacLennan pursuant to the U.S. Securities Exchange Act of 1934, as amended, Rule 13a- 14(a) or Rule 15d-14(a), for Noble-Swiss.

31.3		Certification of Dennis J. Lubojacky pursuant to the U.S. Securities Exchange Act of 1934, as amended, Rule 13a- 14(a) or Rule 15d-14(a), 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 James A. MacLennan pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Noble-Swiss.

32.3+		Certification of Dennis J. Lubojacky pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Noble-Cayman.

~~101+~~101		Interactive Data File