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: June 30, ~~2014~~2015

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

For the transition period from to

Commission file number: 001-36211

Noble Corporation plc

(Exact name of registrant as specified in its charter)

England and Wales (Registered Number ~~83549545)~~08354954)

98-0619597

(State or other jurisdiction of

incorporation or organization)

(I.R.S. employer

identification number)

Devonshire House, 1 Mayfair Place, London, England, W1J8AJ

(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: +44 20 3300 2300

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, Grand Cayman, Cayman Islands, KY1-1206

(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 Corporation plc:	Large accelerated filerx	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨

Noble Corporation:	Large accelerated filer¨	Accelerated filer¨	Non-accelerated filerx	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 July ~~31, 2014:~~24, 2015: Noble Corporation plc — ~~254,260,645~~241,969,586

Number of shares outstanding at July ~~31, 2014:~~24, 2015: Noble Corporation — 261,245,693

Noble Corporation, a Cayman Islands company and a wholly owned subsidiary of Noble Corporation plc, a public limited company ~~registered~~incorporated under the laws of England and Wales, meets the conditions set forth in General Instructions H(1) (a) and (b) to Form 10-Q and is therefore filing this Quarterly Report on 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 ~~Statementss~~Statements
	Noble Corporation plc (Noble-UK) Financial ~~Statementss:~~Statements:
	Consolidated Balance Sheets as of June 30, ~~2014~~2015 and December 31, ~~2013~~2014		3
	Consolidated Statements of Income for the three and six months ended June 30, ~~2014~~2015 and ~~2013~~2014		4
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, ~~2014~~2015 and ~~2013~~2014		5
	Consolidated Statements of Cash Flows for the six months ended June 30, ~~2014~~2015 and ~~2013~~2014		6
	Consolidated Statements of Equity for the six months ended June 30, ~~2014~~2015 and ~~2013~~2014		7

	Noble Corporation (Noble-Cayman) Financial ~~Statementss:~~Statements:
	Consolidated Balance Sheets as of June 30, ~~2014~~2015 and December 31, ~~2013~~2014		8
	Consolidated Statements of Income for the three and six months ended June 30, ~~2014~~2015 and ~~2013~~2014		9
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, ~~2014~~2015 and ~~2013~~2014		10
	Consolidated Statements of Cash Flows for the six months ended June 30, ~~2014~~2015 and ~~2013~~2014		11
	Consolidated Statements of Equity for the six months ended June 30, ~~2014~~2015 and ~~2013~~2014		12

	Notes to Combined Consolidated Financial Statements		13

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		3639
Item 3	Quantitative and Qualitative Disclosures About Market Risk		4952
Item 4	Controls and Procedures		5053
PART II	OTHER INFORMATION
Item 1	Legal Proceedings		51
~~Item 1A~~	~~Risk Factors~~		5154
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		5255
Item 6	Exhibits		5255
	SIGNATURES		5356
	Index to Exhibits		5457

This combined Quarterly Report on Form 10-Q is separately filed by Noble Corporation plc, a public limited company ~~registered~~incorporated under the laws of England and Wales (“Noble-UK”), and Noble Corporation, a Cayman Islands company (“Noble-Cayman”). Information in this filing relating to Noble-Cayman is filed by Noble-UK and separately by Noble-Cayman on its own behalf. Noble-Cayman makes no representation as to information relating to Noble-UK (except as it may relate to Noble-Cayman) or any other affiliate or subsidiary of Noble-UK. 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~~wholly-owned subsidiaries of reporting companies as stated in General Instructions H(2). 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-UK and its consolidated subsidiaries, including Noble-Cayman.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NOBLE CORPORATION PLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


	June 30,			December 31,
	2014			2013			June 30, 2015			December 31, 2014
ASSETS
Current assets
Cash and cash equivalents	$	140,537		$	114,458		$	247,683		$	68,510
Accounts receivable		889,942			949,069			540,423			569,096
Taxes receivable		148,345			140,269			60,564			107,490
Prepaid expenses and other current assets		233,252			187,139			161,634			183,466

Total current assets		1,412,076			1,390,935			1,010,304			928,562


Property and equipment, at cost		20,391,892			19,198,767			14,610,963			14,442,922
Accumulated depreciation		(5,118,363	)		(4,640,677	)		(2,640,518	)		(2,330,413	)

Property and equipment, net		15,273,529			14,558,090			11,970,445			12,112,509


Other assets		304,295			268,932			223,967			245,751

Total assets	$	16,989,900		$	16,217,957		$	13,204,716		$	13,286,822


LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt							$	350,000		$	—
Accounts payable	$	365,961		$	347,214			220,475			265,389
Accrued payroll and related costs		148,447			151,161			81,804			102,520
Taxes payable		127,739			125,119			109,786			94,230
Dividends payable		—			128,249
Interest payable								80,300			61,964
Other current liabilities		258,667			300,172			111,529			144,571

Total current liabilities		900,814			1,051,915			953,894			668,674


Long-term debt		6,013,946			5,556,251			4,488,541			4,869,020
Deferred income taxes		233,419			225,455			104,402			120,589
Other liabilities		338,888			334,308			310,481			341,505

Total liabilities		7,487,067			7,167,929			5,857,318			5,999,788


Commitments and contingencies

Shareholders’ equity
Shares; 254,258 and 253,448 shares outstanding		2,543			2,534
Shares; 241,970 and 247,501 shares outstanding								2,420			2,475
Additional paid-in capital		828,879			810,286			609,667			695,638
Retained earnings		8,017,321			7,591,927			6,087,800			5,936,035
Accumulated other comprehensive loss		(71,264	)		(82,164	)		(69,173	)		(69,418	)

Total shareholders’ equity		8,777,479			8,322,583			6,630,714			6,564,730

Noncontrolling interests		725,354			727,445			716,684			722,304

Total equity		9,502,833			9,050,028			7,347,398			7,287,034

Total liabilities and equity	$	16,989,900		$	16,217,957		$	13,204,716		$	13,286,822

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013			2015			2014			2015			2014
Operating revenues
Contract drilling services	$	1,200,406		$	975,455		$	2,406,710		$	1,904,192		$	771,307		$	779,368		$	1,550,668		$	1,550,005
Reimbursables		31,811			28,260			68,464			49,434			22,248			24,413			47,229			48,963
Labor contract drilling services		8,146			13,603			16,358			34,657
Other		—			67			1			77

		1,240,363			1,017,385			2,491,533			1,988,360			793,555			803,781			1,597,897			1,598,968

Operating costs and expenses
Contract drilling services		577,134			487,971			1,138,265			968,097			319,207			370,902			640,957			723,782
Reimbursables		22,460			22,701			53,066			37,623			17,652			17,732			37,809			39,236
Labor contract drilling services		6,261			9,349			12,487			21,598
Depreciation and amortization		254,394			212,589			500,299			418,745			159,123			152,862			313,261			299,060
General and administrative		27,080			26,850			52,717			52,419			22,424			27,080			46,362			52,717
Non-recurring spin-off related costs		6,458			4,065			18,863			8,027
Gain on contract extinguishment		—			—			—			(1,800	)

														518,406			568,576			1,038,389			1,114,795
		893,787			763,525			1,775,697			1,504,709

Operating income		346,576			253,860			715,836			483,651			275,149			235,205			559,508			484,173

Other income (expense)
Interest expense, net of amount capitalized		(36,351	)		(24,665	)	��	(76,743	)		(51,966	)		(57,465	)		(36,351	)		(106,509	)		(76,743	)
Interest income and other, net		(328	)		955			(1,518	)		530			(431	)		(1,361	)		6,151			(2,629	)

Income before income taxes		309,897			230,150			637,575			432,215
Income from continuing operations before income taxes														217,253			197,493			459,150			404,801
Income tax provision		(52,435	)		(36,824	)		(106,871	)		(71,176	)		(39,405	)		(34,265	)		(82,852	)		(69,843	)

Net income from continuing operations														177,848			163,228			376,298			334,958
Net income from discontinued operations, net of tax														—			94,234			—			195,746

Net income		257,462			193,326			530,704			361,039			177,848			257,462			376,298			530,704
Net income attributable to noncontrolling interests		(22,903	)		(16,706	)		(39,819	)		(34,359	)		(18,817	)		(22,903	)		(38,864	)		(39,819	)

Net income attributable to Noble Corporation	$	234,559		$	176,620		$	490,885		$	326,680
Net income attributable to Noble Corporation plc													$	159,031		$	234,559		$	337,434		$	490,885

Net income per share
Basic	$	0.91		$	0.69		$	1.90		$	1.28
Diluted	$	0.91		$	0.69		$	1.90		$	1.27

Net income attributable to Noble Corporation plc
Income from continuing operations													$	159,031		$	140,325		$	337,434		$	295,139
Income from discontinued operations														—			94,234			—			195,746

Net income attributable to Noble Corporation plc													$	159,031		$	234,559		$	337,434		$	490,885


Per share data:
Basic:
Income from continuing operations													$	0.64		$	0.54		$	1.36		$	1.14
Income from discontinued operations														—			0.37			—			0.76

Net income attributable to Noble Corporation plc													$	0.64		$	0.91		$	1.36		$	1.90


Diluted:
Income from continuing operations													$	0.64		$	0.54		$	1.36		$	1.14
Income from discontinued operations														—			0.37			—			0.76

Net income attributable to Noble Corporation plc													$	0.64		$	0.91		$	1.36		$	1.90

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended						Six Months Ended						Three Months Ended June 30,						Six Months Ended June 30,
	June 30,						June 30,						2015			2014			2015			2014
	2014			2013			2014			2013
Net income	$	257,462		$	193,326		$	530,704		$	361,039		$	177,848		$	257,462		$	376,298		$	530,704

Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		1,711			(2,180	)		2,720			477			1,425			1,711			(1,874	)		2,720
Foreign currency forward contracts		706			(3,529	)		6,652			(4,731	)		3,054			706			(91	)		6,652
Amortization of deferred pension plan amounts (net of tax provision of $253 and $730 for the three months ended June 30, 2014 and 2013, respectively, and $505 and $1,460 for the six months ended June 30, 2014 and 2013, respectively)		765			1,632			1,528			3,274
Amortization of deferred pension plan amounts (net of tax provision of $582 and $253 for the three months ended June 30, 2015 and 2014, respectively, and $1,148 and $505 for the six months ended June 30, 2015 and 2014, respectively)														1,129			765			2,210			1,528

Other comprehensive income (loss), net		3,182			(4,077	)		10,900			(980	)
Other comprehensive income, net														5,608			3,182			245			10,900

Net comprehensive income attributable to noncontrolling interests		(22,903	)		(16,706	)		(39,819	)		(34,359	)		(18,817	)		(22,903	)		(38,864	)		(39,819	)

Comprehensive income attributable to Noble Corporation	$	237,741		$	172,543		$	501,785		$	325,700
Comprehensive income attributable to Noble Corporation plc													$	164,639		$	237,741		$	337,679		$	501,785

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended
	June 30,						Six Months Ended June 30,
	2014			2013			2015			2014
Cash flows from operating activities
Net income	$	530,704		$	361,039		$	376,298		$	530,704
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		500,299			418,745			313,261			500,299
Deferred income taxes		10,127			(7,505	)		(17,312	)		10,127
Amortization of share-based compensation		26,517			20,335			21,147			26,517
Net change in other assets and liabilities		(35,824	)		(146,549	)		74,484			(35,824	)

Net cash from operating activities		1,031,823			646,065			767,878			1,031,823


Cash flows from investing activities
Capital expenditures		(1,216,404	)		(1,244,311	)		(170,283	)		(1,216,404	)
Change in accrued capital expenditures		(11,813	)		(39,047	)		(38,408	)		(11,813	)

Net cash from investing activities		(1,228,217	)		(1,283,358	)		(208,691	)		(1,228,217	)


Cash flows from financing activities
Net change in borrowings outstanding on bank credit facilities		707,472			941,653			(1,123,495	)		707,472
Repayment of long-term debt		(250,000	)		(300,000	)		—			(250,000	)
Issuance of senior notes								1,092,728			—
Debt issuance costs on senior notes and credit facilities								(16,070	)		(386	)
Dividends paid to noncontrolling interests		(41,910	)		(46,649	)		(44,484	)		(41,910	)
Financing costs on credit facilities		(386	)		(1,912	)
Repurchases of shares								(100,630	)		—
Dividend payments		(193,740	)		(66,672	)		(185,669	)		(193,740	)
Employee stock transactions		1,037			2,065			(2,394	)		1,037
Repurchases of employee shares surrendered for taxes		—			(7,077	)

Net cash from financing activities		222,473			521,408			(380,014	)		222,473

Net change in cash and cash equivalents		26,079			(115,885	)		179,173			26,079
Cash and cash equivalents, beginning of period		114,458			282,092			68,510			114,458

Cash and cash equivalents, end of period	$	140,537		$	166,207		$	247,683		$	140,537

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)


														Accumulated									Shares						Additional Paid-in			Retained			Accumulated Other Comprehensive			Noncontrolling			Total
					Additional									Other									Balance			Par Value			Capital			Earnings			Loss			Interests			Equity
	Shares				Paid-in			Retained			Treasury			Comprehensive			Noncontrolling			Total
Balance at December 31, 2013																								253,448		$	2,534		$	810,286		$	7,591,927		$	(82,164	)	$	727,445		$	9,050,028
	Balance		Par Value		Capital			Earnings			Shares			Loss			Interests			Equity
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		—		—		20,335			—			—			—			—			20,335			—			—			26,517			—			—			—			26,517
Issuance of share-based compensation shares		601		1,688		(1,671	)		—			—			—			—			17			683			6			(8,952	)		—			—			—			(8,946	)
Exercise of stock options		131		365		3,161			—			—			—			—			3,526			127			3			2,548			—			—			—			2,551
Tax benefit of stock options exercised		—		—		(1,478	)		—			—			—			—			(1,478	)
Restricted shares forfeited or repurchased for taxes		—		—		—			—			(7,077	)		—			—			(7,077	)
Tax benefit of equity transactions																								—			—			(1,520	)		—			—			—			(1,520	)
Net income		—		—		—			326,680			—			—			34,359			361,039			—			—			—			490,885			—			39,819			530,704
Dividends paid to noncontrolling interests																								—			—			—			—			—			(41,910	)		(41,910	)
Dividends		—		—		—			(256,723	)		—			—			—			(256,723	)		—			—			—			(65,491	)		—			—			(65,491	)
Dividends paid to noncontrolling interests		—		—		—			—			—			—			(46,649	)		(46,649	)
Other comprehensive income (loss), net		—		—		—			—			—			(980	)		—			(980	)
Other comprehensive income, net																								—			—			—			—			10,900			—			10,900

Balance at June 30, 2013		254,080	$	712,183	$	103,878		$	7,135,980		$	(28,146	)	$	(116,429	)	$	752,834		$	8,560,300
Balance at June 30, 2014																								254,258		$	2,543		$	828,879		$	8,017,321		$	(71,264	)	$	725,354		$	9,502,833

Balance at December 31, 2013		253,448	$	2,534	$	810,286		$	7,591,927		$	—		$	(82,164	)	$	727,445		$	9,050,028

Balance at December 31, 2014																								247,501		$	2,475		$	695,638		$	5,936,035		$	(69,418	)	$	722,304		$	7,287,034

Employee related equity activity
Amortization of share-based compensation		—		—		26,517			—			—			—			—			26,517			—			—			21,147			—			—			—			21,147
Issuance of share-based compensation shares		683		6		(8,952	)		—			—			—			—			(8,946	)		678			7			(4,149	)		—			—			—			(4,142	)
Exercise of stock options		127		3		2,548			—			—			—			—			2,551
Tax benefit of stock options exercised		—		—		(1,520	)		—			—			—			—			(1,520	)
Tax benefit of equity transactions																								—			—			(2,401	)		—			—			—			(2,401	)
Repurchases of shares																								(6,209	)		(62	)		(100,568	)		—			—			—			(100,630	)
Net income		—		—		—			490,885			—			—			39,819			530,704			—			—			—			337,434			—			38,864			376,298
Dividends paid to noncontrolling interests																								—			—			—			—			—			(44,484	)		(44,484	)
Dividends		—		—		—			(65,491	)		—			—			—			(65,491	)		—			—			—			(185,669	)		—			—			(185,669	)
Dividends paid to noncontrolling interests		—		—		—			—			—			—			(41,910	)		(41,910	)
Other comprehensive income (loss), net		—		—		—			—			—			10,900			—			10,900
Other comprehensive income, net																								—			—			—			—			245			—			245

Balance at June 30, 2014		254,258	$	2,543	$	828,879		$	8,017,321		$	—		$	(71,264	)	$	725,354		$	9,502,833
Balance at June 30, 2015																								241,970		$	2,420		$	609,667		$	6,087,800		$	(69,173	)	$	716,684		$	7,347,398

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


	June 30,			December 31,
	2014			2013			June 30, 2015			December 31, 2014
ASSETS
Current assets
Cash and cash equivalents	$	137,710		$	110,382		$	245,120		$	65,780
Accounts receivable		889,942			949,069			540,423			569,096
Taxes receivable		148,159			140,029			60,157			107,289
Prepaid expenses and other current assets		231,704			184,348			138,604			139,669

Total current assets		1,407,515			1,383,828			984,304			881,834


Property and equipment, at cost		20,353,341			19,160,350			14,572,411			14,404,371
Accumulated depreciation		(5,108,147	)		(4,631,678	)		(2,627,726	)		(2,318,220	)

Property and equipment, net		15,245,194			14,528,672			11,944,685			12,086,151


Other assets		304,366			269,014			220,764			222,254

Total assets	$	16,957,075		$	16,181,514		$	13,149,753		$	13,190,239


LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt							$	350,000		$	—
Accounts payable	$	352,233		$	345,910			218,066			261,012
Accrued payroll and related costs		142,552			143,346			74,405			91,487
Taxes payable		124,631			120,588			107,716			91,471
Interest payable								80,300			61,964
Other current liabilities		258,667			300,172			107,567			139,950

Total current liabilities		878,083			910,016			938,054			645,884


Long-term debt		6,013,946			5,556,251			4,488,541			4,869,020
Deferred income taxes		233,419			225,455			104,402			120,589
Other liabilities		338,888			334,308			304,938			335,964

Total liabilities		7,464,336			7,026,030			5,835,935			5,971,457


Commitments and contingencies

Shareholder equity
Ordinary shares; 261,246 shares outstanding		26,125			26,125			26,125			26,125
Capital in excess of par value		516,108			497,316			545,352			530,657
Retained earnings		8,296,416			7,986,762			6,094,830			6,009,114
Accumulated other comprehensive loss		(71,264	)		(82,164	)		(69,173	)		(69,418	)

Total shareholder equity		8,767,385			8,428,039			6,597,134			6,496,478

Noncontrolling interests		725,354			727,445			716,684			722,304

Total equity		9,492,739			9,155,484			7,313,818			7,218,782

Total liabilities and equity	$	16,957,075		$	16,181,514		$	13,149,753		$	13,190,239

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013			2015			2014			2015			2014
Operating revenues
Contract drilling services	$	1,200,406		$	975,455		$	2,406,710		$	1,904,192		$	771,307		$	779,368		$	1,550,668		$	1,550,005
Reimbursables		31,811			28,260			68,464			49,434			22,248			24,413			47,229			48,963
Labor contract drilling services		8,146			13,603			16,358			34,657
Other		—			67			1			77

		1,240,363			1,017,385			2,491,533			1,988,360			793,555			803,781			1,597,897			1,598,968

Operating costs and expenses
Contract drilling services		569,438			485,445			1,128,266			962,006			318,967			363,206			638,446			713,783
Reimbursables		22,460			22,701			53,066			37,623			17,652			17,732			37,809			39,236
Labor contract drilling services		6,261			9,402			12,487			21,651
Depreciation and amortization		253,774			212,232			499,084			417,983			158,797			152,242			312,663			297,845
General and administrative		11,489			15,588			23,421			30,431			13,509			11,489			25,717			23,421
Gain on contract extinguishment		—			—			—			(1,800	)

														508,925			544,669			1,014,635			1,074,285
		863,422			745,368			1,716,324			1,467,894

Operating income		376,941			272,017			775,209			520,466			284,630			259,112			583,262			524,683

Other income (expense)
Interest expense, net of amount capitalized		(36,351	)		(24,665	)		(76,743	)		(51,966	)		(57,465	)		(36,351	)		(106,509	)		(76,743	)
Interest income and other, net		(215	)		705			(1,532	)		768			(1,901	)		(1,248	)		4,547			(2,643	)

Income before income taxes		340,375			248,057			696,934			469,268
Income from continuing operations before income taxes														225,264			221,513			481,300			445,297
Income tax provision		(52,233	)		(35,730	)		(106,561	)		(69,744	)		(39,536	)		(34,063	)		(83,094	)		(69,533	)

Net income from continuing operations														185,728			187,450			398,206			375,764
Net income from discontinued operations, net of tax														—			100,692			—			214,609

Net income		288,142			212,327			590,373			399,524			185,728			288,142			398,206			590,373
Net income attributable to noncontrolling interests		(22,903	)		(16,706	)		(39,819	)		(34,359	)		(18,817	)		(22,903	)		(38,864	)		(39,819	)

Net income attributable to Noble Corporation	$	265,239		$	195,621		$	550,554		$	365,165		$	166,911		$	265,239		$	359,342		$	550,554

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended						Six Months Ended						Three Months Ended June 30,						Six Months Ended June 30,
	June 30,						June 30,						2015			2014			2015			2014
	2014			2013			2014			2013
Net income	$	288,142		$	212,327		$	590,373		$	399,524		$	185,728		$	288,142		$	398,206		$	590,373

Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		1,711			(2,180	)		2,720			477			1,425			1,711			(1,874	)		2,720
Foreign currency forward contracts		706			(3,529	)		6,652			(4,731	)		3,054			706			(91	)		6,652
Amortization of deferred pension plan amounts (net of tax provision of $253 and $730 for the three months ended June 30, 2014 and 2013, respectively, and $505 and $1,460 for the six months ended June 30, 2014 and 2013, respectively)		765			1,632			1,528			3,274
Amortization of deferred pension plan amounts (net of tax provision of $582 and $253 for the three months ended June 30, 2015 and 2014, respectively, and $1,148 and $505 for the six months ended June 30, 2015 and 2014, respectively)														1,129			765			2,210			1,528

Other comprehensive income (loss), net		3,182			(4,077	)		10,900			(980	)
Other comprehensive income, net														5,608			3,182			245			10,900

Net comprehensive income attributable to noncontrolling interests		(22,903	)		(16,706	)		(39,819	)		(34,359	)		(18,817	)		(22,903	)		(38,864	)		(39,819	)

Comprehensive income attributable to Noble Corporation	$	268,421		$	191,544		$	561,454		$	364,185		$	172,519		$	268,421		$	359,587		$	561,454

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended
	June 30,						Six Months Ended June 30,
	2014			2013			2015			2014
Cash flows from operating activities
Net income	$	590,373		$	399,524		$	398,206		$	590,373
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		499,084			417,983			312,663			499,084
Deferred income taxes		10,127			(7,505	)		(17,312	)		10,127
Capital contribution by parent—share-based compensation		18,792			12,183
Capital contribution by parent - share-based compensation								14,695			18,792
Net change in other assets and liabilities		(37,241	)		(146,377	)		44,726			(37,241	)

Net cash from operating activities		1,081,135			675,808			752,978			1,081,135


Cash flows from investing activities
Capital expenditures		(1,216,270	)		(1,244,239	)		(170,283	)		(1,216,270	)
Change in accrued capital expenditures		(11,813	)		(39,047	)		(38,408	)		(11,813	)

Net cash from investing activities		(1,228,083	)		(1,283,286	)		(208,691	)		(1,228,083	)


Cash flows from financing activities
Net change in borrowings outstanding on bank credit facilities		707,472			941,653			(1,123,495	)		707,472
Repayment of long-term debt		(250,000	)		(300,000	)		—			(250,000	)
Issuance of senior notes								1,092,728			—
Debt issuance costs on senior notes and credit facilities								(16,070	)		(386	)
Dividends paid to noncontrolling interests		(41,910	)		(46,649	)		(44,484	)		(41,910	)
Financing costs on credit facilities		(386	)		(1,912	)
Distributions to parent company, net		(240,900	)		(100,960	)		(273,626	)		(240,900	)

Net cash from financing activities		174,276			492,132			(364,947	)		174,276

Net change in cash and cash equivalents		27,328			(115,346	)		179,340			27,328
Cash and cash equivalents, beginning of period		110,382			277,375			65,780			110,382

Cash and cash equivalents, end of period	$	137,710		$	162,029		$	245,120		$	137,710

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)


										Accumulated									Shares				Capital in Excess of		Retained			Accumulated Other Comprehensive			Noncontrolling			Total
					Capital in					Other									Balance		Par Value		Par Value		Earnings			Loss			Interests			Equity
	Shares				Excess of		Retained			Comprehensive			Noncontrolling			Total
	Balance		Par Value		Par Value		Earnings			Loss			Interests			Equity
Balance at December 31, 2012		261,246	$	26,125	$	470,454	$	7,384,828		$	(115,449	)	$	765,124		$	8,531,082
Balance at December 31, 2013																				261,246	$	26,125	$	497,316	$	7,986,762		$	(82,164	)	$	727,445		$	9,155,484
Distributions to parent																				—		—		—		(240,900	)		—			—			(240,900	)
Capital contributions by parent - share-based compensation																				—		—		18,792		—			—			—			18,792
Net income		—		—		—		365,165			—			34,359			399,524			—		—		—		550,554			—			39,819			590,373
Capital contributions by parent — share-based compensation		—		—		12,183		—			—			—			12,183
Distributions to parent		—		—		—		(100,960	)		—			—			(100,960	)
Dividends paid to noncontrolling interests		—		—		—		—			—			(46,649	)		(46,649	)		—		—		—		—			—			(41,910	)		(41,910	)
Other comprehensive income (loss), net		—		—		—		—			(980	)		—			(980	)

Balance at June 30, 2013		261,246	$	26,125	$	482,637	$	7,649,033		$	(116,429	)	$	752,834		$	8,794,200

Balance at December 31, 2013		261,246	$	26,125	$	497,316	$	7,986,762		$	(82,164	)	$	727,445		$	9,155,484
Net income		—		—		—		550,554			—			39,819			590,373
Capital contributions by parent — share-based compensation		—		—		18,792		—			—			—			18,792
Distributions to parent		—		—		—		(240,900	)		—			—			(240,900	)
Dividends paid to noncontrolling interests		—		—		—		—			—			(41,910	)		(41,910	)
Other comprehensive income (loss), net		—		—		—		—			10,900			—			10,900
Other comprehensive income, net																				—		—		—		—			10,900			—			10,900

Balance at June 30, 2014		261,246	$	26,125	$	516,108	$	8,296,416		$	(71,264	)	$	725,354		$	9,492,739			261,246	$	26,125	$	516,108	$	8,296,416		$	(71,264	)	$	725,354		$	9,492,739


Balance at December 31, 2014																				261,246	$	26,125	$	530,657	$	6,009,114		$	(69,418	)	$	722,304		$	7,218,782
Distributions to parent																				—		—		—		(273,626	)		—			—			(273,626	)
Capital contributions by parent - share-based compensation																				—		—		14,695		—			—			—			14,695
Net income																				—		—		—		359,342			—			38,864			398,206
Dividends paid to noncontrolling interests																				—		—		—		—			—			(44,484	)		(44,484	)
Other comprehensive income, net																				—		—		—		—			245			—			245

Balance at June 30, 2015																				261,246	$	26,125	$	545,352	$	6,094,830		$	(69,173	)	$	716,684		$	7,313,818

See accompanying notes to the unaudited consolidated financial statements.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 1 — Organization and Basis of Presentation

~~On November 20, 2013, pursuant to the Merger Agreement dated as of June 30, 2013 between Noble Corporation, a Swiss corporation (“Noble-Swiss”), and~~ Noble Corporation plc, a public limited company ~~registered~~incorporated under the laws of England and Wales (“Noble-UK”), Noble-Swiss merged with and into Noble-UK, with Noble-UK as the surviving company (the “Transaction”). In the Transaction, all of the outstanding ordinary shares of Noble-Swiss were cancelled, and Noble-UK issued, through an exchange agent, one ordinary share of Noble-UK in exchange for each ordinary share of Noble-Swiss.

The Transaction effectively changed the place of incorporation of our publicly traded parent holding company from Switzerland to the United Kingdom. As a result of the Transaction, Noble-UK owns and conducts the same businesses through the Noble group as Noble-Swiss conducted prior to the Transaction, except that Noble-UK is ~~the parent company of the Noble group of companies.~~

~~We are~~ a leading offshore drilling contractor for the oil and gas industry. We perform contract drilling services with our global fleet of mobile offshore drilling ~~units located worldwide, and at June 30, 2014 we were also responsible for~~units. As of the ~~operations~~filing date of this Quarterly Report on ~~the Hibernia platform offshore Canada. At June 30, 2014,~~Form 10-Q, our fleet consisted of 1415 jackups, nine drillships and eight semisubmersibles, ~~14 drillships, 49 jackups and~~including one ~~floating production storage and offloading unit (“FPSO”), including three units under construction as follows:~~

~~one dynamically positioned, ultra-deepwater,~~high-specification, harsh environment ~~drillship;~~jackup under construction.

We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business, and

~~two high-specification, heavy-duty, harsh environment jackups.~~

At 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 global market for contract drilling services and are often redeployed to different regions due to changing demands of our customers, which consist largely of major independent and government owned/controlled oil and gas companies throughout the world. As of June 30, ~~2014,~~2015, our ~~fleet was located~~contract drilling services segment conducts operations in the United States, ~~Mexico,~~ Brazil, Argentina, the North Sea, the Mediterranean ~~West Africa,~~Sea, the Black Sea, the Middle East, ~~India,~~ Asia and Australia. 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,~~an indirect, wholly-owned subsidiary of Noble-UK, our publicly-traded parent company. Noble-UK’s principal asset is all of the shares of Noble-Cayman. Noble-Cayman has no public equity outstanding. The consolidated financial statements of Noble-UK include the accounts of Noble-Cayman, and Noble-UK conducts substantially all of its business through Noble-Cayman and its subsidiaries.

The accompanying unaudited consolidated financial statements of Noble-UK 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 Quarterly Reports on 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, ~~2013~~2014 Consolidated Balance Sheets presented herein are derived from the December 31, ~~2013~~2014 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, ~~2013,~~2014, filed by both Noble-UK 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.

Note 2 – Spin-off of Paragon Offshore plc (“Paragon Offshore”)

On August 1, 2014, Noble-UK completed the separation and spin-off of a majority of its standard specification offshore drilling business (the “Spin-off”) through a pro rata distribution of all of the ordinary shares of its wholly-owned subsidiary, Paragon Offshore, to the holders of Noble’s ordinary shares. Our shareholders received one share of Paragon Offshore for every three shares of Noble owned as of July 23, 2014, the record date for the distribution. Through the Spin-off, we disposed of most of our standard specification drilling units and related assets, liabilities and business. Prior to the Spin-off, Paragon Offshore issued approximately $1.7 billion of long-term debt. We used the proceeds from this debt to repay certain amounts outstanding under our commercial paper program.

Prior to the completion of the Spin-off, Noble and Paragon Offshore entered into a series of agreements to effect the separation and Spin-off and govern the relationship between the parties after the Spin-off.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Master Separation Agreement (“MSA”)

The general terms and conditions relating to the separation and Spin-off are set forth in the MSA. The MSA identifies the assets transferred, liabilities assumed and contracts assigned either to Paragon Offshore ~~plc Spin-off Transaction~~

On August 1, 2014, we completed the previously announced plan to reorganize our business by means of a spin-off of a wholly-owned subsidiary, Paragon Offshore plc (“Paragon Offshore”). The spin-off was accomplished through a pro rata distribution by us of all of the ordinary shares of Paragon Offshore to our shareholders. Our shareholders received one share of Paragon Offshore for every three shares of Noble owned as of July 23, 2014, the record date for the distribution. Paragon Offshore’s assets and liabilities consist of most of our standard specification drilling units and related assets, liabilities and business. Paragon Offshore’s fleet consists of five drillships, three semisubmersibles, 34 jackups and one FPSO. Paragon Offshore is also responsible for the Hibernia platform operations offshore Canada. In connection with the spin-off, we received approximately $1.7 billion in cash as settlement of intercompany notes issuedor by Paragon Offshore to us in the separation and describes when and how these transfers, assumptions and assignments would occur. The MSA provides for, among other things, Paragon Offshore’s responsibility for liabilities relating to its business and the responsibility of Noble ~~as consideration~~for liabilities related to our, and in certain limited cases, Paragon Offshore’s business, in each case irrespective of when the liability arose. The MSA also contains indemnification obligations and ongoing commitments by us and Paragon Offshore.

Employee Matters Agreement (“EMA”)

The EMA allocates liabilities and responsibilities between us and Paragon Offshore relating to employment, compensation and benefits and other employment related matters.

Tax Sharing Agreement (“TSA”)

The TSA provides for the ~~business contributed to Paragon Offshore. Noble used these funds to repay outstanding third-party debt~~allocation of ~~Noble-Cayman~~tax liabilities and ~~its subsidiaries.~~

~~Because the spin-off distribution was completed after June 30, 2014, the accounts of~~benefits between us and Paragon Offshore and ~~its subsidiaries are~~governs the parties’ assistance with tax-related claims.

Transition Services Agreements

Under two transition services agreements, we agreed to continue, for a limited period of time, to provide various interim support services to Paragon Offshore, and Paragon Offshore agreed to provide various interim support services to us, including providing operational and administrative support for our remaining Brazilian operations.

Note 3 — Discontinued Operations

Paragon Offshore, which had been reflected as continuing operations in our consolidated financial statements prior to the Spin-Off, meets the criteria for being reported as discontinued operations and has been reclassified as such in ~~this report. In subsequent reports, we expect to present~~our results of operations. The results of discontinued operations for the ~~accounts~~three and six months ended June 30, 2014 include the historical results of Paragon Offshore, including $6 million and ~~its subsidiaries as~~$19 million, respectively, of non-recurring costs incurred by Noble related to the Spin-Off.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following table provides the components of net income from discontinued ~~operations.~~operations, net of tax for Noble-UK for the three and six months ended June 30, 2014:


	Three months ended June 30, 2014			Six months ended June 30, 2014
Operating revenues
Contract drilling services	$	421,038		$	856,705
Reimbursables		7,398			19,501
Labor contract drilling services		8,146			16,358
Other		—			1

Operating revenues from discontinued operations	$	436,582		$	892,565


Income from discontinued operations
Income from discontinued operations before income taxes	$	112,404		$	232,774
Income tax provision		(18,170	)		(37,028	)

Net income from discontinued operations	$	94,234		$	195,746

Note 24 — Consolidated Joint Ventures

We maintain a 50 percent interest in two joint ventures, each with a subsidiary of Royal Dutch Shell plc (“Shell”), that own and operate the twoBully-class drillships. We have determined that we are the primary ~~beneficiary.~~beneficiary of the joint ventures. 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.

During the six months ended June 30, 2015 and 2014, the Bully joint ventures approved and paid dividends totaling $89 million and $84 million, of which $42 million was paid to our joint venture partner. During the six months ended June 30, 2013, the Bully joint ventures approved and paid dividends totaling $93 million, of which $47 million wasrespectively. Of these amounts, 50 percent were paid to our joint venture partner.

The combined carrying amount of theBully-class drillships at both June 30, ~~2014~~2015 and December 31, ~~2013~~2014 totaled $1.4 billion. These assets were primarily funded through partner equity contributions. Cash held by the Bully joint ventures ~~totaled~~was approximately ~~$43~~$41 million at June 30, ~~2014~~2015 as compared to approximately ~~$50~~$47 million at December 31, ~~2013. Operational results for the three and six months ended June 30, 2014 and 2013 are as follows:~~

   Three months ended    Six months ended
   June 30,    June 30,
   2014    2013    2014    2013
Operating revenues
   $ 98,217       $ 87,478       $ 185,403       $ 177,773
Net income
   $ 46,956       $ 35,914       $ 84,676       $ 73,413

~~Note 3 — Share Data~~

~~Share capital~~

As of June 30, 2014, Noble-UK had approximately 254.3 million shares outstanding and trading as compared to approximately 253.4 million shares outstanding and trading at December 31, 2013. Our Board of Directors may increase our share capital through the issuance of up to 53 million authorized shares (at current nominal value of $0.01 per share) without obtaining shareholder approval.

In April 2013, our shareholders approved the payment of a dividend aggregating $1.00 per share, which was declared by our Board of Directors and paid in four equal installments. The final payment of this obligation was made in May 2014, and included an additional dividend of $0.125 per share in accordance with our current dividend policy. The aggregate dividend paid in May 2014 was approximately $97 million, or $0.375 per share.

~~NOBLE CORPORATION PLC AND SUBSIDIARIES~~

~~NOBLE CORPORATION 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-UK:~~

Three months ended Six months ended
June 30, June 30,
2014 2013 2014 2013
Allocation of net income

Basic

Net income attributable to Noble Corporation
$ 234,559    $ 176,620    $ 490,885    $ 326,680
Earnings allocated to unvested share-based payment awards
(3,776 ) (2,169 ) (8,048 ) (3,822 )

Net income to common shareholders—basic
$ 230,783    $ 174,451    $ 482,837    $ 322,858

Diluted

Net income attributable to Noble Corporation
$ 234,559    $ 176,620    $ 490,885    $ 326,680
Earnings allocated to unvested share-based payment awards
(3,774 ) (2,167 ) (8,046 ) (3,819 )

Net income to common shareholders—diluted
$ 230,785    $ 174,453    $ 482,839    $ 322,861

Weighted average shares outstanding—basic
254,238    253,295    254,090    253,184
Incremental shares issuable from assumed exercise of stock options
97    261    116    265

Weighted average shares outstanding—diluted
254,335    253,556    254,206    253,449

Weighted average unvested share-based payment awards
4,156    3,150    4,172    2,998

Earnings per share

Basic
$ 0.91    $ 0.69    $ 1.90    $ 1.28
Diluted
$ 0.91    $ 0.69    $ 1.90    $ 1.27
Dividends per share
$ 0.38    $ 0.13    $ 0.75    $ 0.26

Only those items having a dilutive impact on our basic earnings per share are included in diluted earnings per share. For the three months ended June 30, 2014 and 2013, approximately 1 million shares underlying stock options were excluded from the diluted earnings per share as such stock options were not dilutive.

~~Note 4 — Receivables from Customers~~

~~At June 30, 2014, we had a receivable of approximately $14 million related to the~~~~Noble Max Smith~~, which is being disputed by our customer, Petróleos Mexicanos (“Pemex”). This receivable has been classified as long-term and is 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 2010. In January 2012, we filed a lawsuit against Pemex in Mexican court seeking recovery of this amount. This matter is currently proceeding through the Mexican judicial system. While we can make no assurances as to the outcome of this dispute, we believe we are entitled to the disputed amount.2014.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 5 — Share Data

Earnings per share

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


	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Numerator:
Basic
Income from continuing operations	$	159,031		$	140,325		$	337,434		$	295,139
Earnings allocated to unvested share-based payment awards		(3,555	)		(2,257	)		(7,489	)		(4,767	)

Income from continuing operations to common shareholders		155,476			138,068			329,945			290,372


Income from discontinued operations		—			94,234			—			195,746
Earnings allocated to unvested share-based payment awards		—			(1,519	)		—			(3,281	)

Income from discontinued operations, net of tax to common shareholders		—			92,715			—			192,465


Net income attributable to Noble-UK		159,031			234,559			337,434			490,885
Earnings allocated to unvested share-based payment awards		(3,555	)		(3,776	)		(7,489	)		(8,048	)

Net income to common shareholders - basic	$	155,476		$	230,783		$	329,945		$	482,837


Diluted
Income from continuing operations	$	159,031		$	140,325		$	337,434		$	295,139
Earnings allocated to unvested share-based payment awards		(3,555	)		(2,256	)		(7,489	)		(4,766	)

Income from continuing operations to common shareholders		155,476			138,069			329,945			290,373


Income from discontinued operations		—			94,234			—			195,746
Earnings allocated to unvested share-based payment awards		—			(1,518	)		—			(3,280	)

Income from discontinued operations, net of tax to common shareholders		—			92,716			—			192,466


Net income attributable to Noble-UK		159,031			234,559			337,434			490,885
Earnings allocated to unvested share-based payment awards		(3,555	)		(3,774	)		(7,489	)		(8,046	)

Net income to common shareholders - diluted	$	155,476		$	230,785		$	329,945		$	482,839


Denominator:
Weighted average shares outstanding - basic		241,966			254,238			242,324			254,090
Incremental shares issuable from assumed exercise of stock options		—			97			—			116

Weighted average shares outstanding - diluted		241,966			254,335			242,324			254,206


Weighted average unvested share-based payment awards		5,533			4,156			5,500			4,172


Earnings per share
Basic
Continuing operations	$	0.64		$	0.54		$	1.36		$	1.14
Discontinued operations		—			0.37			—			0.76

Net income attributable to Noble-UK	$	0.64		$	0.91		$	1.36		$	1.90


Diluted
Continuing operations	$	0.64		$	0.54		$	1.36		$	1.14
Discontinued operations		—			0.37			—			0.76

Net income attributable to Noble-UK	$	0.64		$	0.91		$	1.36		$	1.90


Dividends per share	$	0.375		$	0.375		$	0.75		$	0.75

Only those items having a dilutive impact on our basic earnings per share are included in diluted earnings per share. For the three months ended June 30, 2015 and 2014, approximately 2 million and 1 million shares underlying stock options, respectively, were excluded from the diluted earnings per share as such stock options were not dilutive.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Share capital

As of June 30, 2015, Noble-UK had approximately 242.0 million shares outstanding and trading as compared to approximately 247.5 million shares outstanding and trading at December 31, 2014. The decrease in shares outstanding is primarily related to the repurchase of 6.2 million shares pursuant to our approved share repurchase program, discussed below. Our Board of Directors may increase our share capital through the issuance of up to 53 million authorized shares (at current nominal value of $0.01 per share) without obtaining shareholder approval.

Our most recent quarterly dividend payment to shareholders, totaling approximately $93 million (or $0.375 per share), was declared on April 24, 2015 and paid on May 14, 2015 to holders of record on May 4, 2015.

Share repurchases

Under UK law, the company is only permitted to purchase its own shares by way of an “off-market purchase” in a plan approved by shareholders. In December 2014, we received shareholder approval to repurchase up to 37,000,000 ordinary shares, or approximately 15 percent of our outstanding ordinary shares at the time of the shareholder approval. Any repurchases are expected to be funded using cash on hand, cash from operations or short-term borrowings under our Credit Facilities. The authority to make such repurchases will expire on the later of April 2016 or the end of the Company’s 2016 annual general meeting of shareholders, at which time we could seek shareholder approval for further repurchases. During the six months ended June 30, 2015, we repurchased 6.2 million of our ordinary shares covered by this authorization for a total cost of approximately $101 million. During the three months ended June 30, 2015, we did not repurchase any of our shares.

Note 6 — Receivables from Customers

At June 30, 2015, we had receivables of approximately $14 million related to theNoble Max Smith that are being disputed by our former customer, Petróleos Mexicanos (“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 a 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 7 — Property and Equipment

Property and equipment, at cost, as of June 30, ~~2014~~2015 and December 31, ~~2013~~2014 for Noble-UK consisted of the following:


	June 30,		December 31,
	2014		2013		June 30, 2015		December 31, 2014
Drilling equipment and facilities	$	18,070,733	$	17,130,986	$	13,691,525	$	13,254,240
Construction in progress		2,068,119		1,854,434		683,410		969,985
Other		253,040		213,347		236,028		218,697

Property and equipment, at cost	$	20,391,892	$	19,198,767	$	14,610,963	$	14,442,922

Capital expenditures, including capitalized interest, totaled $170 million and $1.2 billion for ~~both~~ the six months ended June 30, 2015 and 2014, ~~and 2013.~~respectively. Capitalized interest was $6 million and $12 million for the three and six months ended June 30, 2015, respectively, as compared to $13 million and $27 million for the three and six months ended June 30, 2014.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Capital expenditures related to Paragon Offshore for the six months ended June 30, 2014 ~~respectively,~~totaled $135 million. Depreciation expense for Paragon Offshore that was classified as ~~compared to $32~~discontinued operations totaled $102 million and ~~$62~~$201 million, respectively, for the three and six months ended June 30, ~~2013.~~2014.

Note 68 — Debt

Long-term debt consisted of the following at June 30, ~~2014~~2015 and December 31, ~~2013:~~2014:


	June 30,		December 31,
	2014		2013		June 30, 2015			December 31, 2014
Senior unsecured notes:
7.375% Senior Notes due March 2014	$	—	$	249,964
3.45% Senior Notes due August 2015		350,000		350,000	$	350,000		$	350,000
3.05% Senior Notes due March 2016		299,974		299,967		299,990			299,982
2.50% Senior Notes due March 2017		299,903		299,886		299,938			299,920
4.00% Senior Notes due March 2018						249,516			—
7.50% Senior Notes due March 2019		201,695		201,695		201,695			201,695
4.90% Senior Notes due August 2020		499,086		499,022		499,218			499,151
4.625% Senior Notes due March 2021		399,601		399,576		399,653			399,627
3.95% Senior Notes due March 2022		399,221		399,178		399,309			399,264
5.95% Senior Notes due April 2025						448,767			—
6.20% Senior Notes due August 2040		399,894		399,893		399,895			399,895
6.05% Senior Notes due March 2041		397,663		397,646		397,700			397,681
5.25% Senior Notes due March 2042		498,296		498,283		498,324			498,310
6.95% Senior Notes due April 2045						394,536			—

Total senior unsecured notes		3,745,333		3,995,110		4,838,541			3,745,525
Commercial paper program		2,268,613		1,561,141

Total long-term debt	$	6,013,946	$	5,556,251
Credit facilities & commercial paper program						—			1,123,495

Total debt						4,838,541			4,869,020

Less: Current maturities						(350,000	)		—

Long-term debt					$	4,488,541		$	4,869,020

Credit Facilities and Commercial Paper Program

We currently have ~~three separate~~two credit facilities with an aggregate maximum ~~available~~ capacity of ~~$2.9~~$2.7 billion, which are comprised of a five year $2.4 billion senior unsecured credit facility that matures in January 2020 and a $225 million 364-day senior unsecured credit facility that matures in January 2016 (together, ~~referred to as~~ the “Credit Facilities”).

We have ~~established~~ a commercial paper program ~~which~~that allows us to issue up to ~~$2.7~~$2.4 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program are supported by the unused capacity under our Credit Facilities and, therefore, are classified as long-term on our Consolidated Balance Sheet. The outstanding amounts of commercial paper reduce availability under our Credit Facilities.

The ~~Credit Facilities provide~~$2.4 billion facility provides us with the ability to issue up to ~~$375~~$500 million in letters of ~~credit in the aggregate.~~credit. The issuance of letters of credit under the ~~Credit Facilities~~facility reduces the amount available for borrowing. At June 30, ~~2014,~~2015, we had no letters of credit issued under the ~~Credit Facilities.~~facility.

Senior Unsecured Notes

In March 2015, our indirect wholly-owned subsidiary, Noble Holding International Limited (“NHIL”), issued $1.1 billion aggregate principal amount of senior notes in three separate tranches, comprised of $250 million of 4.00% Senior Notes due 2018, $450 million of 5.95% Senior Notes due 2025, and $400 million of 6.95% Senior Notes due 2045. The weighted average coupon of all three tranches is 5.87%. The interest rate on these senior notes

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

may be increased if the credit rating applicable to the notes is downgraded below certain specified levels. The net proceeds of approximately $1.08 billion, after expenses, were used to repay indebtedness outstanding under our Credit Facilities and commercial paper program.

On August 1, 2015, our $350 million 3.45% Senior ~~Unsecured~~ Notes

~~In March 2014,~~ matured, which we repaid using cash on hand. We have, therefore, classified these balances as “Current maturities of long-term debt” on our ~~$250~~Consolidated Balance Sheet as of June 30, 2015.

Our $300 million ~~7.375%~~3.05% Senior Notes mature during the first quarter of 2016. We anticipate using ~~issuances~~availability under our ~~commercial paper program.~~Credit Facilities to repay the outstanding balances; therefore, we continue to report these balances as long-term as of June 30, 2015.

Covenants

The Credit Facilities are guaranteed by ~~our indirect wholly-owned subsidiaries, Noble Holding International Limited (“NHIL”)~~NHIL and Noble Holding Corporation (“NHC”). The covenants and events of default under the two 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 June 30, ~~2014,~~2015, our ratio of debt to total tangible capitalization was approximately ~~0.39.~~0.40. We were in compliance with all covenants under the Credit Facilities as of June 30, ~~2014.~~2015.

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 on entering into sale and lease-back transactions. At June 30, ~~2014,~~2015, we were in compliance with all of our debt covenants. We continually monitor compliance with the covenants under our notes and expect to remain in compliance during the remainder of ~~2014.~~2015.

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~~ All remaining fair value ~~of our long-term debt as of June 30, 2014 and December 31, 2013, respectively:~~disclosures are presented in Note 12.

   June 30, 2014    December 31, 2013
   Carrying    Estimated    Carrying    Estimated
   Value    Fair Value    Value    Fair Value
Senior unsecured notes:

7.375% Senior Notes due March 2014
   $ —         $ —         $ 249,964       $ 253,634
3.45% Senior Notes due August 2015
   350,000       359,532       350,000       363,019
3.05% Senior Notes due March 2016
   299,974       310,058       299,967       309,878
2.50% Senior Notes due March 2017
   299,903       307,420       299,886       302,891
7.50% Senior Notes due March 2019
   201,695       235,163       201,695       232,839
4.90% Senior Notes due August 2020
   499,086       548,520       499,022       528,597
4.625% Senior Notes due March 2021
   399,601       429,755       399,576       413,868
3.95% Senior Notes due March 2022
   399,221       408,265       399,178       390,520
6.20% Senior Notes due August 2040
   399,894       456,520       399,893       421,720
6.05% Senior Notes due March 2041
   397,663       452,273       397,646       417,312
5.25% Senior Notes due March 2042
   498,296       514,529       498,283       476,873








Total senior unsecured notes
   3,745,333       4,022,035       3,995,110       4,111,151
Commercial paper program
   2,268,613       2,268,613       1,561,141       1,561,141








Total long-term debt
   $ 6,013,946       $ 6,290,648       $ 5,556,251       $ 5,672,292

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following table presents the estimated fair value of our total debt as of June 30, 2015 and December 31, 2014, respectively:


	June 30, 2015				December 31, 2014
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Senior unsecured notes:
3.45% Senior Notes due August 2015	$	350,000	$	350,341	$	350,000	$	354,992
3.05% Senior Notes due March 2016		299,990		302,419		299,982		302,515
2.50% Senior Notes due March 2017		299,938		299,126		299,920		287,014
4.00% Senior Notes due March 2018		249,516		255,442		—		—
7.50% Senior Notes due March 2019		201,695		223,947		201,695		212,068
4.90% Senior Notes due August 2020		499,218		514,130		499,151		471,095
4.625% Senior Notes due March 2021		399,653		396,118		399,627		363,837
3.95% Senior Notes due March 2022		399,309		367,077		399,264		346,425
5.95% Senior Notes due April 2025		448,767		442,302		—		—
6.20% Senior Notes due August 2040		399,895		338,989		399,895		350,351
6.05% Senior Notes due March 2041		397,700		329,678		397,681		343,653
5.25% Senior Notes due March 2042		498,324		376,746		498,310		385,181
6.95% Senior Notes due April 2045		394,536		367,827		—		—

Total senior unsecured notes		4,838,541		4,564,142		3,745,525		3,417,131

Credit facilities & commercial paper program		—		—		1,123,495		1,123,495

Total debt	$	4,838,541	$	4,564,142	$	4,869,020	$	4,540,626

Note 79 — Income Taxes

At June 30, ~~2014,~~2015, the reserves for uncertain tax positions totaled ~~$122~~$112 million (net of related tax benefits of $2$1 million). If the June 30, ~~2014~~2015 reserves are not realized, the provision for income taxes would be reduced by ~~$122~~$112 million. At December 31, ~~2013,~~2014, the reserves for uncertain tax positions totaled ~~$127~~$116 million (net of related tax benefits of $2$1 million).

It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may increase or decrease in the next 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.

Note 810 — Employee Benefit Plans

Pension costs include the following ~~components:~~components for the three months ended June 30, 2015 and 2014:


	Three Months Ended June 30,												Three Months Ended June 30,
	2014						2013						2015						2014
	Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.
Service cost	$	1,433		$	2,541		$	1,349		$	2,681		$	846		$	2,149		$	1,433		$	2,541
Interest cost		1,472			2,714			1,252			2,262			632			2,300			1,472			2,714
Return on plan assets		(1,856	)		(3,846	)		(1,437	)		(3,276	)		(911	)		(3,286	)		(1,856	)		(3,846	)
Amortization of prior service cost		(5	)		56			—			57			26			36			(5	)		56
Recognized net actuarial loss		316			651			395			1,910			110			1,539			316			651

Net pension expense	$	1,360		$	2,116		$	1,559		$	3,634		$	703		$	2,738		$	1,360		$	2,116

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

   Six Months Ended June 30,
   2014 2013
   Non-U.S. U.S. Non-U.S. U.S.
Service cost
   $ 2,853    $ 5,082    $ 2,728    $ 5,362
Interest cost
   2,928    5,428    2,534    4,524
Return on plan assets
   (3,691 ) (7,692 ) (2,908 ) (6,552 )
Amortization of prior service cost
   (10 ) 112    —      114
Recognized net actuarial loss
   629    1,302    800    3,820


Net pension expense
   $ 2,709    $ 4,232    $ 3,154    $ 7,268

Included in net pension expense for the three months ended June 30, 2014 for our non-U.S. and U.S. plans was approximately $0.8 million and $0.5 million, respectively, related to Paragon Offshore that was classified as discontinued operations.

Pension costs include the following components for the six months ended June 30, 2015 and 2014:


	Six Months Ended June 30,
	2015						2014
	Non-U.S.			U.S.			Non-U.S.			U.S.
Service cost	$	1,720		$	4,298		$	2,853		$	5,082
Interest cost		1,274			4,599			2,928			5,428
Return on plan assets		(1,837	)		(6,573	)		(3,691	)		(7,692	)
Amortization of prior service cost		53			71			(10	)		112
Recognized net actuarial loss		155			3,079			629			1,302

Net pension expense	$	1,365		$	5,474		$	2,709		$	4,232

Included in net pension expense for the six months ended June 30, 2014 for our non-U.S. and U.S. plans was approximately $2 million and $0.9 million, respectively, related to Paragon Offshore that was classified as discontinued operations.

During the three and six months ended June 30, ~~2014,~~2015, we made contributions to our pension plans totaling $6approximately $0.1 million and $7$0.3 million, respectively.

Note 911 — 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.

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. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings.

~~NOBLE CORPORATION PLC AND SUBSIDIARIES~~

~~NOBLE CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~Cash Flow Hedges~~Transition Services Agreements

~~Our North Sea, Mexico~~Under two transition services agreements, we agreed to continue, for a limited period of time, to provide various interim support services to Paragon Offshore, and ~~Brazil~~Paragon Offshore agreed to provide various interim support services to us, including providing operational and administrative support for our remaining Brazilian operations.

Note 3 — Discontinued Operations

Paragon Offshore, which had been reflected as continuing operations ~~have a significant amount~~in our consolidated financial statements prior to the Spin-Off, meets the criteria for being reported as discontinued operations and has been reclassified as such in our results of ~~their cash operating expenses payable in local currencies. To limit the potential risk~~operations. The results of currency fluctuations, we periodically enter into forward contracts, which settle monthly in the operations’ respective local currencies. All of these contracts have a maturity of less than 12 months. The forward contract settlements in the remainder of 2014 represent approximately 35 percent of these forecasted local currency requirements. The notional amount of the forward contracts outstanding, expressed in U.S. Dollars, was approximately $192 million at June 30, 2014. Total unrealized gains related to these forward contracts were approximately $7 million as of June 30, 2014 and were recorded as part of “Accumulated other comprehensive loss” (“AOCL”).

~~Financial Statement Presentation~~

~~The following table, together with Note 10, summarizes the financial statement presentation and fair value of our derivative positions as of June 30, 2014 and December 31, 2013:~~

      Estimated fair value
   Balance sheet
classification    June 30, 2014    December 31,
2013
Asset derivatives

Cash flow hedges

Short-term foreign currency forward contracts
   Other current assets    $ 6,652       $ —

Gain/(loss) recognized
through AOCL Gain/(loss) reclassified
from AOCL to “other
income” Gain/(loss) recognized
through “other income”
2014 2013 2014 2013 2014 2013
Cash flow hedges

Foreign currency forward contracts
$ 5,067 $ (4,431 ) $ 1,585 $ (300 ) $ — $ —

To supplement the fair value disclosures in Note 10, the following summarizes the recognized gains and losses of cash flow hedges and non-designated derivatives through AOCL or through “other income” for the six months ended June 30, 2014 include the historical results of Paragon Offshore, including $6 million and ~~2013:~~$19 million, respectively, of non-recurring costs incurred by Noble related to the Spin-Off.

   Gain/(loss) recognized
through AOCL Gain/(loss) reclassified
from AOCL to “other
income” Gain/(loss) recognized
through “other income”
   2014    2013 2014    2013 2014    2013
Cash flow hedges

Foreign currency forward contracts
   $ 3,873       $ (4,545 ) $ 2,779       $ (186 ) $ —         $ —

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

~~Note 10 — Fair Value of Financial Instruments~~

The following table ~~presents~~provides the components of net income from discontinued operations, net of tax for Noble-UK for the three and six months ended June 30, 2014:


	Three months ended June 30, 2014			Six months ended June 30, 2014
Operating revenues
Contract drilling services	$	421,038		$	856,705
Reimbursables		7,398			19,501
Labor contract drilling services		8,146			16,358
Other		—			1

Operating revenues from discontinued operations	$	436,582		$	892,565


Income from discontinued operations
Income from discontinued operations before income taxes	$	112,404		$	232,774
Income tax provision		(18,170	)		(37,028	)

Net income from discontinued operations	$	94,234		$	195,746

Note 4 — Consolidated Joint Ventures

We maintain a 50 percent interest in two joint ventures, each with a subsidiary of Royal Dutch Shell plc (“Shell”), that own and operate the twoBully-class drillships. We have determined that we are the primary beneficiary of the joint ventures. 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.

During the six months ended June 30, 2015 and 2014, the Bully joint ventures approved and paid dividends totaling $89 million and $84 million, respectively. Of these amounts, 50 percent were paid to our joint venture partner.

The combined carrying amount of theBully-class drillships at both June 30, 2015 and ~~estimated fair value of our financial instruments recognized~~December 31, 2014 totaled $1.4 billion. These assets were primarily funded through partner equity contributions. Cash held by the Bully joint ventures was approximately $41 million at ~~fair value on a recurring basis:~~

   June 30, 2014
      Estimated Fair Value Measurements
   Carrying
Amount    Quoted
Prices in
Active
Markets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)
Assets -

Marketable securities
   $ 8,590       $ 8,590       $ —         $ —
Foreign currency forward contracts
   6,652       —         6,652       —

   December 31, 2013
      Estimated Fair Value Measurements
   Carrying
Amount    Quoted
Prices in
Active
Markets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)
Assets -

Marketable securities
   $ 7,230       $ 7,230       $ —         $ —

~~The foreign currency forward contracts have been valued using actively quoted prices and quotes obtained from the counterparties~~June 30, 2015 as compared to the contracts. 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.approximately $47 million at December 31, 2014.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 115 — ~~Accumulated Other Comprehensive Loss~~Share Data

Earnings per share

The following ~~tables set~~table sets forth the ~~changes~~computation of basic and diluted earnings per share for Noble-UK:


	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Numerator:
Basic
Income from continuing operations	$	159,031		$	140,325		$	337,434		$	295,139
Earnings allocated to unvested share-based payment awards		(3,555	)		(2,257	)		(7,489	)		(4,767	)

Income from continuing operations to common shareholders		155,476			138,068			329,945			290,372


Income from discontinued operations		—			94,234			—			195,746
Earnings allocated to unvested share-based payment awards		—			(1,519	)		—			(3,281	)

Income from discontinued operations, net of tax to common shareholders		—			92,715			—			192,465


Net income attributable to Noble-UK		159,031			234,559			337,434			490,885
Earnings allocated to unvested share-based payment awards		(3,555	)		(3,776	)		(7,489	)		(8,048	)

Net income to common shareholders - basic	$	155,476		$	230,783		$	329,945		$	482,837


Diluted
Income from continuing operations	$	159,031		$	140,325		$	337,434		$	295,139
Earnings allocated to unvested share-based payment awards		(3,555	)		(2,256	)		(7,489	)		(4,766	)

Income from continuing operations to common shareholders		155,476			138,069			329,945			290,373


Income from discontinued operations		—			94,234			—			195,746
Earnings allocated to unvested share-based payment awards		—			(1,518	)		—			(3,280	)

Income from discontinued operations, net of tax to common shareholders		—			92,716			—			192,466


Net income attributable to Noble-UK		159,031			234,559			337,434			490,885
Earnings allocated to unvested share-based payment awards		(3,555	)		(3,774	)		(7,489	)		(8,046	)

Net income to common shareholders - diluted	$	155,476		$	230,785		$	329,945		$	482,839


Denominator:
Weighted average shares outstanding - basic		241,966			254,238			242,324			254,090
Incremental shares issuable from assumed exercise of stock options		—			97			—			116

Weighted average shares outstanding - diluted		241,966			254,335			242,324			254,206


Weighted average unvested share-based payment awards		5,533			4,156			5,500			4,172


Earnings per share
Basic
Continuing operations	$	0.64		$	0.54		$	1.36		$	1.14
Discontinued operations		—			0.37			—			0.76

Net income attributable to Noble-UK	$	0.64		$	0.91		$	1.36		$	1.90


Diluted
Continuing operations	$	0.64		$	0.54		$	1.36		$	1.14
Discontinued operations		—			0.37			—			0.76

Net income attributable to Noble-UK	$	0.64		$	0.91		$	1.36		$	1.90


Dividends per share	$	0.375		$	0.375		$	0.75		$	0.75

Only those items having a dilutive impact on our basic earnings per share are included in diluted earnings per share. For the ~~accumulated balances for each component of AOCL, net of tax, for the six~~three months ended June 30, 2015 and 2014, approximately 2 million and ~~2013.~~

   Gains /
(Losses) on
Cash Flow
Hedges⁽¹⁾ Defined
Benefit
Pension
Items⁽²⁾ Foreign
Currency
Items Total
Balance at December 31, 2012
   $ —      $ (95,071 ) $ (20,378 ) $ (115,449 )


Activity during period:

Other comprehensive income (loss) before reclassifications
   (4,917 ) —      477    (4,440 )
Amounts reclassified from AOCL
   186    3,274    —      3,460


Net other comprehensive income (loss)
   (4,731 ) 3,274    477    (980 )


Balance at June 30, 2013
   $ (4,731 ) $ (91,797 ) $ (19,901 ) $ (116,429 )


Balance at December 31, 2013
   $ —      $ (58,598 ) $ (23,566 ) $ (82,164 )


Activity during period:

Other comprehensive income before reclassifications
   9,431    —      2,720    12,151
Amounts reclassified from AOCL
   (2,779 ) 1,528    —      (1,251 )


Net other comprehensive income
   6,652    1,528    2,720    10,900


Balance at June 30, 2014
   $ 6,652    $ (57,070 ) $ (20,846 ) $ (71,264 )

~~(1)~~

~~Gains on cash flow hedges are related to our foreign currency forward contracts. Reclassifications~~1 million shares underlying stock options, respectively, were excluded from ~~AOCL are recognized through “other income” on our Consolidated Statement of Income. See Note 9 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 8 for additional information.

~~Note 12 — Commitments and Contingencies~~

~~The~~~~Noble 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.

~~NOBLE CORPORATION PLC AND SUBSIDIARIES~~

~~NOBLE CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~In November 2012, the U.S. Coast Guard in Alaska conducted an inspection of our drillship, the~~~~Noble Discoverer~~, and cited a number of deficiencies to be remediated, including issues relating to the main propulsion and safety management system. We initiated a comprehensive effort to address the deficiencies identified by the Coast Guard and worked 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~~such stock options were ~~certain unauthorized disposals of collected deck and sea water from the~~~~Noble Discoverer~~~~, collected, treated deck water from the~~~~Kulluk~~ ~~and potential record-keeping issues with the oil record books for the~~~~Noble Discoverer~~~~and~~~~Kulluk~~~~and other matters. The Coast Guard referred the~~~~Noble Discoverer~~ ~~and~~~~Kulluk~~ matters to the U.S. Department of Justice (“DOJ”) for further investigation. We are cooperating with the DOJ in connection with their investigation, which relates to the items described above, hazardous condition allegations with respect to the~~Noble Discoverer~~ and other matters. We cannot predict when the DOJ will conclude the investigation and cannot provide any assurances with respect to the outcome. The DOJ is seeking criminal sanctions, including monetary penalties, against us, as well as some form of ongoing assurance of our operational compliance programs, and we are in settlement discussions with the DOJ. We believe it is probable that we will have to pay some amount in fines and penalties to resolve this matter and have reserved $12 million.

We previously reported on an action taken by the Nigerian Maritime Administration and Safety Agency, or NIMASA, against our previous Nigerian subsidiary (the “Paragon Nigeria Subsidiary”) in connection with Nigeria’s cabotage laws (the “Cabotage Action”) and a separate action taken by the Nigerian Industrial Training Fund against the Paragon Nigeria Subsidiary with respect to expatriate employee surcharges (the “ITF Action”). As a result of the spin-off of Paragon Offshore on August 1, 2014, the Cabotage Action and the ITF Action are, at the date of filing this report, the legal and contractual responsibility of Paragon Offshore and not ~~of us.~~

We are from time to time a party to various lawsuits that are incidental to our operations in which the claimants seek an unspecified amount of monetary damages for personal injury, including injuries purportedly resulting from exposure to asbestos on drilling rigs and associated facilities. At June 30, 2014, there were 37 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, 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.

We operate in a number of countries throughout the world and our tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions. During 2013, the IRS completed its examination of our tax reporting for the taxable year ended December 31, 2008 and concluded that we were entitled to a refund. The congressional Joint Committee on Taxation took no exception to the conclusions reached by the IRS, and the refund, plus interest, was received in March 2014. The IRS also completed its examination of our tax reporting for the taxable year ended December 31, 2009, and informed us that it made no changes to our reported tax. During the first quarter of 2014, the IRS began its examination of our tax reporting for the taxable years ended December 31, 2010 and 2011. We believe that we have accurately reported all amounts in our 2010 and 2011 tax returns. Furthermore, we are currently contesting several non-U.S. tax assessments and may contest future assessments. We believe the ultimate resolution of the outstanding assessments, for which we have not made any accrual, will not have a material adverse effect on our consolidated financial statements. We recognize uncertain tax positions that we believe have a greater than 50 percent likelihood of being sustained. We cannot predict or provide assurance as to the ultimate outcome of any existing or future assessments.

Audit claims of approximately $345 million attributable to income, customs and other business taxes have been assessed against 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 PLC AND SUBSIDIARIES~~

~~NOBLE CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

We have been notified by Petróleo Brasileiro S.A. (“Petrobras”) that it is currently challenging assessments by Brazilian tax authorities of withholding taxes associated with the provision of drilling rigs for its operations in Brazil during 2008 and 2009. Petrobras has also notified us that if Petrobras must ultimately pay such withholding taxes, it will seek reimbursement from us for the portion allocable to our drilling rigs. The amount of withholding tax that Petrobras indicates may be allocable to Noble drilling rigs that remain in our fleet as a result of the Paragon Offshore spin-off is approximately $36 million. We dispute the validity of the assessment, and we have notified Petrobras of our position. We will, if necessary, vigorously defend our rights.

~~During June 2014 and July 2014, there were two inadvertent discharges of drilling fluid on the~~~~Noble Roger Eason~~~~, one of our rigs operating offshore Brazil. We are currently in discussions with the Brazilian government, and have not been assessed any fines. As a result of the spin-off of Paragon Offshore, the~~~~Noble Roger Eason~~ ~~is part of Paragon Offshore’s fleet, and this matter is the legal and contractual responsibility of Paragon Offshore.~~

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 the~~Noble Jim Thompson~~,~~Noble Amos Runner~~ ~~and~~~~Noble Driller~~ ~~for “total loss only” when caused by a named windstorm. For the~~~~Noble Bully I~~, our customer assumes the risk of loss due to a named windstorm event, pursuant to the terms of the drilling contract, through the purchase of insurance coverage (provided that we are responsible for any deductible under such policy) or, at its option, the assumption of the risk of loss up to the insured value in lieu of the purchase of such insurance. The remaining rigs in the U.S. Gulf of Mexico are self-insured for named windstorm perils. Our rigs located in the Mexico portion of the Gulf of Mexico remain covered by commercial insurance for windstorm damage. In addition, we maintain a physical damage deductible on our rigs of $25 million per occurrence. 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.

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 $1.3 billion at June 30, 2014.~~

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-UK (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.dilutive.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Share capital

Share repurchases

Note 6 — Receivables from Customers

Note 7 — Property and Equipment

Property and equipment, at cost, as of June 30, 2015 and December 31, 2014 for Noble-UK consisted of the following:


	June 30, 2015		December 31, 2014
Drilling equipment and facilities	$	13,691,525	$	13,254,240
Construction in progress		683,410		969,985
Other		236,028		218,697

Property and equipment, at cost	$	14,610,963	$	14,442,922

Capital expenditures, including capitalized interest, totaled $170 million and $1.2 billion for the six months ended June 30, 2015 and 2014, respectively. Capitalized interest was $6 million and $12 million for the three and six months ended June 30, 2015, respectively, as compared to $13 million and $27 million for the three and six months ended June 30, 2014.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Capital expenditures related to Paragon Offshore ~~plc Spin-off Transaction~~for the six months ended June 30, 2014 totaled $135 million. Depreciation expense for Paragon Offshore that was classified as discontinued operations totaled $102 million and $201 million, respectively, for the three and six months ended June 30, 2014.

Note 8 — Debt

Long-term debt consisted of the following at June 30, 2015 and December 31, 2014:


	June 30, 2015			December 31, 2014
Senior unsecured notes:
3.45% Senior Notes due August 2015	$	350,000		$	350,000
3.05% Senior Notes due March 2016		299,990			299,982
2.50% Senior Notes due March 2017		299,938			299,920
4.00% Senior Notes due March 2018		249,516			—
7.50% Senior Notes due March 2019		201,695			201,695
4.90% Senior Notes due August 2020		499,218			499,151
4.625% Senior Notes due March 2021		399,653			399,627
3.95% Senior Notes due March 2022		399,309			399,264
5.95% Senior Notes due April 2025		448,767			—
6.20% Senior Notes due August 2040		399,895			399,895
6.05% Senior Notes due March 2041		397,700			397,681
5.25% Senior Notes due March 2042		498,324			498,310
6.95% Senior Notes due April 2045		394,536			—

Total senior unsecured notes		4,838,541			3,745,525

Credit facilities & commercial paper program		—			1,123,495

Total debt		4,838,541			4,869,020

Less: Current maturities		(350,000	)		—

Long-term debt	$	4,488,541		$	4,869,020

Credit Facilities and Commercial Paper Program

~~Prior~~We currently have two credit facilities with an aggregate maximum capacity of $2.7 billion, which are comprised of a five year $2.4 billion senior unsecured credit facility that matures in January 2020 and a $225 million 364-day senior unsecured credit facility that matures in January 2016 (together, the “Credit Facilities”).

We have a commercial paper program that allows us to issue up to $2.4 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program are supported by the unused capacity under our Credit Facilities and, therefore, are classified as long-term on our Consolidated Balance Sheet. The outstanding amounts of commercial paper reduce availability under our Credit Facilities.

The $2.4 billion facility provides us with the ability to issue up to $500 million in letters of credit. The issuance of letters of credit under the facility reduces the amount available for borrowing. At June 30, 2015, we had no letters of credit issued under the facility.

Senior Unsecured Notes

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

On August 1, 2015, our $350 million 3.45% Senior Notes matured, which we repaid using cash on hand. We have, therefore, classified these balances as “Current maturities of long-term debt” on our Consolidated Balance Sheet as of June 30, 2015.

Our $300 million 3.05% Senior Notes mature during the first quarter of 2016. We anticipate using availability under our Credit Facilities to repay the outstanding balances; therefore, we continue to report these balances as long-term as of June 30, 2015.

Covenants

The Credit Facilities are guaranteed by NHIL and Noble Holding Corporation (“NHC”). The covenants and events of default under the two 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 June 30, 2015, our ratio of debt to total tangible capitalization was approximately 0.40. We were in compliance with all covenants under the Credit Facilities as of June 30, 2015.

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 on entering into sale and lease-back transactions. At June 30, 2015, we were in compliance with all of our debt covenants. We continually monitor compliance with the covenants under our notes and expect to remain in compliance during the remainder of 2015.

Fair Value of Debt

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following table presents the estimated fair value of our total debt as of June 30, 2015 and December 31, 2014, respectively:


	June 30, 2015				December 31, 2014
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Senior unsecured notes:
3.45% Senior Notes due August 2015	$	350,000	$	350,341	$	350,000	$	354,992
3.05% Senior Notes due March 2016		299,990		302,419		299,982		302,515
2.50% Senior Notes due March 2017		299,938		299,126		299,920		287,014
4.00% Senior Notes due March 2018		249,516		255,442		—		—
7.50% Senior Notes due March 2019		201,695		223,947		201,695		212,068
4.90% Senior Notes due August 2020		499,218		514,130		499,151		471,095
4.625% Senior Notes due March 2021		399,653		396,118		399,627		363,837
3.95% Senior Notes due March 2022		399,309		367,077		399,264		346,425
5.95% Senior Notes due April 2025		448,767		442,302		—		—
6.20% Senior Notes due August 2040		399,895		338,989		399,895		350,351
6.05% Senior Notes due March 2041		397,700		329,678		397,681		343,653
5.25% Senior Notes due March 2042		498,324		376,746		498,310		385,181
6.95% Senior Notes due April 2045		394,536		367,827		—		—

Total senior unsecured notes		4,838,541		4,564,142		3,745,525		3,417,131

Credit facilities & commercial paper program		—		—		1,123,495		1,123,495

Total debt	$	4,838,541	$	4,564,142	$	4,869,020	$	4,540,626

Note 9 — Income Taxes

At June 30, 2015, the reserves for uncertain tax positions totaled $112 million (net of related tax benefits of $1 million). If the June 30, 2015 reserves are not realized, the provision for income taxes would be reduced by $112 million. At December 31, 2014, the reserves for uncertain tax positions totaled $116 million (net of related tax benefits of $1 million).

It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may increase or decrease in the next 12 months primarily due to the completion of open audits or the ~~spin-off~~expiration of ~~Paragon Offshore, Noble~~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.

Note 10 — Employee Benefit Plans

Pension costs include the following components for the three months ended June 30, 2015 and ~~Paragon Offshore entered into a Master Separation Agreement (“MSA”)~~2014:


	Three Months Ended June 30,
	2015						2014
	Non-U.S.			U.S.			Non-U.S.			U.S.
Service cost	$	846		$	2,149		$	1,433		$	2,541
Interest cost		632			2,300			1,472			2,714
Return on plan assets		(911	)		(3,286	)		(1,856	)		(3,846	)
Amortization of prior service cost		26			36			(5	)		56
Recognized net actuarial loss		110			1,539			316			651

Net pension expense	$	703		$	2,738		$	1,360		$	2,116

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Included in net pension expense for the three months ended June 30, 2014 for our non-U.S. and ~~other agreements to effect the separation~~U.S. plans was approximately $0.8 million and ~~spin-off and govern the relationship between the parties after the spin-off.~~

~~MSA~~

~~The general terms and conditions relating to the separation and spin-off are set forth in the MSA. The MSA identifies the assets transferred, liabilities assumed and contracts assigned either~~$0.5 million, respectively, related to Paragon Offshore ~~by us or by~~that was classified as discontinued operations.

Pension costs include the following components for the six months ended June 30, 2015 and 2014:


	Six Months Ended June 30,
	2015						2014
	Non-U.S.			U.S.			Non-U.S.			U.S.
Service cost	$	1,720		$	4,298		$	2,853		$	5,082
Interest cost		1,274			4,599			2,928			5,428
Return on plan assets		(1,837	)		(6,573	)		(3,691	)		(7,692	)
Amortization of prior service cost		53			71			(10	)		112
Recognized net actuarial loss		155			3,079			629			1,302

Net pension expense	$	1,365		$	5,474		$	2,709		$	4,232

During the three and six months ended June 30, 2015, we made contributions to usour pension plans totaling approximately $0.1 million and $0.3 million, respectively.

Note 11 — 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 ~~separation and describes when and how these transfers, assumptions and assignments will occur. The MSA provides~~use of derivative instruments. We do not engage in derivative transactions for ~~among other things, Paragon Offshore’s responsibility for liabilities relating~~speculative or trading purposes, nor are we a party to ~~their business~~leveraged derivatives.

For foreign currency forward contracts, hedge effectiveness is evaluated at inception based on the matching of critical terms between derivative contracts and the ~~responsibility of Noble for liabilities related to our, and~~hedged item. Any change in ~~certain limited cases, Paragon Offshore’s business,~~fair value resulting from ineffectiveness is recognized immediately in ~~each case irrespective of when the liability arose. The MSA also contains indemnification obligations and ongoing commitments by us and Paragon Offshore.~~earnings.

~~Employee Matters Agreement~~

~~The employee matters agreement allocates liabilities and responsibilities between us and Paragon Offshore relating to employment, compensation and benefits and other employment related matters.~~

~~Tax Sharing Agreement~~

~~The tax sharing agreement provides for the allocation of tax liabilities and benefits between us and Paragon Offshore and governs the parties’ assistance with tax-related claims.~~

Transition Services Agreements

Under two transition services agreements, we ~~will~~agreed to continue, for a limited period of time, to provide various interim support services to Paragon Offshore, and Paragon Offshore ~~will~~agreed to provide various interim support services to us, including providing operational and administrative support for our remaining Brazilian operations.

Note 133 — ~~Segment and Related Information~~Discontinued Operations

~~We report our contract drilling operations~~Paragon Offshore, which had been reflected 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 industry. The mobile offshore drilling units comprising our offshore rig fleet operate in a single, global market for contract drilling services and are often redeployed globally due to changing demands of our customers, which consist largely of major non-U.S. and government owned/controlled oil and gas companies throughout the world. As of June 30, 2014, our contract drilling services segment conducts contract drillingcontinuing operations in our consolidated financial statements prior to the ~~United States, Mexico, Brazil, Argentina,~~Spin-Off, meets the ~~North Sea, the Mediterranean, West Africa, the Middle East, India, Asia~~criteria for being reported as discontinued operations and ~~Australia.~~

~~We evaluate the performance~~has been reclassified as such in our results of ~~our operating segment based on revenues from external customers and segment profit. Summarized financial information~~operations. The results of ~~our reportable segment~~discontinued operations for the three and six months ended June 30, 2014 ~~and 2013 is shown in~~include the ~~following tables. The “Other” column includes~~historical results of ~~labor contract drilling services in Canada~~Paragon Offshore, including $6 million and ~~Alaska, as well as corporate~~$19 million, respectively, of non-recurring costs incurred by Noble related ~~items. The consolidated financial statements of Noble-UK include~~to the accounts of Noble-Cayman, and Noble-UK 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-UK.Spin-Off.

NOBLE CORPORATION PLC AND SUBSIDIARIES

NOBLE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

   Three Months Ended June 30,
   2014 2013
   Contract Contract
   Drilling Drilling
   Services Other Total Services Other Total
Revenues from external customers
   $ 1,229,697    $ 10,666    $ 1,240,363    $ 1,003,522    $ 13,863    $ 1,017,385
Depreciation and amortization
   249,701    4,693    254,394    209,082    3,507    212,589
Segment operating income/ (loss)
   353,095    (6,519 ) 346,576    257,622    (3,762 ) 253,860
Interest expense, net of amount capitalized
   (84 ) (36,267 ) (36,351 ) (102 ) (24,563 ) (24,665 )
Income tax (provision)/ benefit
   (60,031 ) 7,596    (52,435 ) (41,240 ) 4,416    (36,824 )
Segment profit/ (loss)
   271,848    (37,289 ) 234,559    199,811    (23,191 ) 176,620
Total assets (at end of period)
   16,132,649    857,251    16,989,900    14,777,991    688,095    15,466,086
The following table provides the components of net income from discontinued operations, net of tax for Noble-UK for the three and six months ended June 30, 2014:

   Six Months Ended June 30,
   2014 2013
   Contract Contract
   Drilling Drilling
   Services Other Total Services Other Total
Revenues from external customers
   $ 2,472,135    $ 19,398    $ 2,491,533    $ 1,952,980    $ 35,380    $ 1,988,360
Depreciation and amortization
   491,275    9,024    500,299    411,701    7,044    418,745
Segment operating income/ (loss)
   736,962    (21,126 ) 715,836    486,609    (2,958 ) 483,651
Interest expense, net of amount capitalized
   (157 ) (76,586 ) (76,743 ) (222 ) (51,744 ) (51,966 )
Income tax (provision)/ benefit
   (123,687 ) 16,816    (106,871 ) (80,137 ) 8,961    (71,176 )
Segment profit/ (loss)
   574,459    (83,574 ) 490,885    372,059    (45,379 ) 326,680
Total assets (at end of period)
   16,132,649    857,251    16,989,900    14,777,991    688,095    15,466,086
   Three months ended
June 30,
2014    Six months ended
June 30,
2014
Operating revenues

Contract drilling services
   $ 421,038       $ 856,705
Reimbursables
   7,398       19,501
Labor contract drilling services
   8,146       16,358
Other
   —         1




Operating revenues from discontinued operations
   $ 436,582       $ 892,565




Income from discontinued operations

Income from discontinued operations before income taxes
   $ 112,404       $ 232,774
Income tax provision
   (18,170 )    (37,028 )




Net income from discontinued operations
   $ 94,234       $ 195,746




Note 4 — Consolidated Joint Ventures
We maintain a 50 percent interest in two joint ventures, each with a subsidiary of Royal Dutch Shell plc (“Shell”), that own and operate the twoBully-class drillships. We have determined that we are the primary beneficiary of the joint ventures. 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.
During the six months ended June 30, 2015 and 2014, the Bully joint ventures approved and paid dividends totaling $89 million and $84 million, respectively. Of these amounts, 50 percent were paid to our joint venture partner.
The combined carrying amount of theBully-class drillships at both June 30, 2015 and December 31, 2014 totaled $1.4 billion. These assets were primarily funded through partner equity contributions. Cash held by the Bully joint ventures was approximately $41 million at June 30, 2015 as compared to approximately $47 million at December 31, 2014.
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
Note 5 — Share Data
Earnings per share
The following table sets forth the computation of basic and diluted earnings per share for Noble-UK:
Three months ended
June 30, Six months ended
June 30,
2015 2014 2015 2014
Numerator:

Basic

Income from continuing operations
$ 159,031    $ 140,325    $ 337,434    $ 295,139
Earnings allocated to unvested share-based payment awards
(3,555 ) (2,257 ) (7,489 ) (4,767 )

Income from continuing operations to common shareholders
155,476    138,068    329,945    290,372

Income from discontinued operations
—      94,234    —      195,746
Earnings allocated to unvested share-based payment awards
—      (1,519 ) —      (3,281 )

Income from discontinued operations, net of tax to common shareholders
—      92,715    —      192,465

Net income attributable to Noble-UK
159,031    234,559    337,434    490,885
Earnings allocated to unvested share-based payment awards
(3,555 ) (3,776 ) (7,489 ) (8,048 )

Net income to common shareholders - basic
$ 155,476    $ 230,783    $ 329,945    $ 482,837

Diluted

Income from continuing operations
$ 159,031    $ 140,325    $ 337,434    $ 295,139
Earnings allocated to unvested share-based payment awards
(3,555 ) (2,256 ) (7,489 ) (4,766 )

Income from continuing operations to common shareholders
155,476    138,069    329,945    290,373

Income from discontinued operations
—      94,234    —      195,746
Earnings allocated to unvested share-based payment awards
—      (1,518 ) —      (3,280 )

Income from discontinued operations, net of tax to common shareholders
—      92,716    —      192,466

Net income attributable to Noble-UK
159,031    234,559    337,434    490,885
Earnings allocated to unvested share-based payment awards
(3,555 ) (3,774 ) (7,489 ) (8,046 )

Net income to common shareholders - diluted
$ 155,476    $ 230,785    $ 329,945    $ 482,839

Denominator:

Weighted average shares outstanding - basic
241,966    254,238    242,324    254,090
Incremental shares issuable from assumed exercise of stock options
—      97    —      116

Weighted average shares outstanding - diluted
241,966    254,335    242,324    254,206

Weighted average unvested share-based payment awards
5,533    4,156    5,500    4,172

Earnings per share

Basic

Continuing operations
$ 0.64    $ 0.54    $ 1.36    $ 1.14
Discontinued operations
—      0.37    —      0.76

Net income attributable to Noble-UK
$ 0.64    $ 0.91    $ 1.36    $ 1.90

Diluted

Continuing operations
$ 0.64    $ 0.54    $ 1.36    $ 1.14
Discontinued operations
—      0.37    —      0.76

Net income attributable to Noble-UK
$ 0.64    $ 0.91    $ 1.36    $ 1.90

Dividends per share
$ 0.375    $ 0.375    $ 0.75    $ 0.75
Only those items having a dilutive impact on our basic earnings per share are included in diluted earnings per share. For the three months ended June 30, 2015 and 2014, approximately 2 million and 1 million shares underlying stock options, respectively, were excluded from the diluted earnings per share as such stock options were not dilutive.
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
Share capital
As of June 30, 2015, Noble-UK had approximately 242.0 million shares outstanding and trading as compared to approximately 247.5 million shares outstanding and trading at December 31, 2014. The decrease in shares outstanding is primarily related to the repurchase of 6.2 million shares pursuant to our approved share repurchase program, discussed below. Our Board of Directors may increase our share capital through the issuance of up to 53 million authorized shares (at current nominal value of $0.01 per share) without obtaining shareholder approval.
Our most recent quarterly dividend payment to shareholders, totaling approximately $93 million (or $0.375 per share), was declared on April 24, 2015 and paid on May 14, 2015 to holders of record on May 4, 2015.
Share repurchases
Under UK law, the company is only permitted to purchase its own shares by way of an “off-market purchase” in a plan approved by shareholders. In December 2014, we received shareholder approval to repurchase up to 37,000,000 ordinary shares, or approximately 15 percent of our outstanding ordinary shares at the time of the shareholder approval. Any repurchases are expected to be funded using cash on hand, cash from operations or short-term borrowings under our Credit Facilities. The authority to make such repurchases will expire on the later of April 2016 or the end of the Company’s 2016 annual general meeting of shareholders, at which time we could seek shareholder approval for further repurchases. During the six months ended June 30, 2015, we repurchased 6.2 million of our ordinary shares covered by this authorization for a total cost of approximately $101 million. During the three months ended June 30, 2015, we did not repurchase any of our shares.
Note 6 — Receivables from Customers
At June 30, 2015, we had receivables of approximately $14 million related to theNoble Max Smith that are being disputed by our former customer, Petróleos Mexicanos (“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 a 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 7 — Property and Equipment
Property and equipment, at cost, as of June 30, 2015 and December 31, 2014 for Noble-UK consisted of the following:
   June 30,
2015    December 31,
2014
Drilling equipment and facilities
   $ 13,691,525       $ 13,254,240
Construction in progress
   683,410       969,985
Other
   236,028       218,697




Property and equipment, at cost
   $ 14,610,963       $ 14,442,922




Capital expenditures, including capitalized interest, totaled $170 million and $1.2 billion for the six months ended June 30, 2015 and 2014, respectively. Capitalized interest was $6 million and $12 million for the three and six months ended June 30, 2015, respectively, as compared to $13 million and $27 million for the three and six months ended June 30, 2014.
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
Capital expenditures related to Paragon Offshore for the six months ended June 30, 2014 totaled $135 million. Depreciation expense for Paragon Offshore that was classified as discontinued operations totaled $102 million and $201 million, respectively, for the three and six months ended June 30, 2014.
Note 8 — Debt
Long-term debt consisted of the following at June 30, 2015 and December 31, 2014:
   June 30,
2015    December 31,
2014
Senior unsecured notes:

3.45% Senior Notes due August 2015
   $ 350,000       $ 350,000
3.05% Senior Notes due March 2016
   299,990       299,982
2.50% Senior Notes due March 2017
   299,938       299,920
4.00% Senior Notes due March 2018
   249,516       —
7.50% Senior Notes due March 2019
   201,695       201,695
4.90% Senior Notes due August 2020
   499,218       499,151
4.625% Senior Notes due March 2021
   399,653       399,627
3.95% Senior Notes due March 2022
   399,309       399,264
5.95% Senior Notes due April 2025
   448,767       —
6.20% Senior Notes due August 2040
   399,895       399,895
6.05% Senior Notes due March 2041
   397,700       397,681
5.25% Senior Notes due March 2042
   498,324       498,310
6.95% Senior Notes due April 2045
   394,536       —




Total senior unsecured notes
   4,838,541       3,745,525
Credit facilities & commercial paper program
   —         1,123,495




Total debt
   4,838,541       4,869,020




Less: Current maturities
   (350,000 )    —




Long-term debt
   $ 4,488,541       $ 4,869,020




Credit Facilities and Commercial Paper Program
We currently have two credit facilities with an aggregate maximum capacity of $2.7 billion, which are comprised of a five year $2.4 billion senior unsecured credit facility that matures in January 2020 and a $225 million 364-day senior unsecured credit facility that matures in January 2016 (together, the “Credit Facilities”).
We have a commercial paper program that allows us to issue up to $2.4 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program are supported by the unused capacity under our Credit Facilities and, therefore, are classified as long-term on our Consolidated Balance Sheet. The outstanding amounts of commercial paper reduce availability under our Credit Facilities.
The $2.4 billion facility provides us with the ability to issue up to $500 million in letters of credit. The issuance of letters of credit under the facility reduces the amount available for borrowing. At June 30, 2015, we had no letters of credit issued under the facility.
Senior Unsecured Notes
In March 2015, our indirect wholly-owned subsidiary, Noble Holding International Limited (“NHIL”), issued $1.1 billion aggregate principal amount of senior notes in three separate tranches, comprised of $250 million of 4.00% Senior Notes due 2018, $450 million of 5.95% Senior Notes due 2025, and $400 million of 6.95% Senior Notes due 2045. The weighted average coupon of all three tranches is 5.87%. The interest rate on these senior notes
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
may be increased if the credit rating applicable to the notes is downgraded below certain specified levels. The net proceeds of approximately $1.08 billion, after expenses, were used to repay indebtedness outstanding under our Credit Facilities and commercial paper program.
On August 1, 2015, our $350 million 3.45% Senior Notes matured, which we repaid using cash on hand. We have, therefore, classified these balances as “Current maturities of long-term debt” on our Consolidated Balance Sheet as of June 30, 2015.
Our $300 million 3.05% Senior Notes mature during the first quarter of 2016. We anticipate using availability under our Credit Facilities to repay the outstanding balances; therefore, we continue to report these balances as long-term as of June 30, 2015.
Covenants
The Credit Facilities are guaranteed by NHIL and Noble Holding Corporation (“NHC”). The covenants and events of default under the two 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 June 30, 2015, our ratio of debt to total tangible capitalization was approximately 0.40. We were in compliance with all covenants under the Credit Facilities as of June 30, 2015.
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 on entering into sale and lease-back transactions. At June 30, 2015, we were in compliance with all of our debt covenants. We continually monitor compliance with the covenants under our notes and expect to remain in compliance during the remainder of 2015.
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). All remaining fair value disclosures are presented in Note 12.
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
The following table presents the estimated fair value of our total debt as of June 30, 2015 and December 31, 2014, respectively:
   June 30, 2015    December 31, 2014
   Carrying
Value    Estimated
Fair Value    Carrying
Value    Estimated
Fair Value
Senior unsecured notes:

3.45% Senior Notes due August 2015
   $ 350,000       $ 350,341       $ 350,000       $ 354,992
3.05% Senior Notes due March 2016
   299,990       302,419       299,982       302,515
2.50% Senior Notes due March 2017
   299,938       299,126       299,920       287,014
4.00% Senior Notes due March 2018
   249,516       255,442       —         —
7.50% Senior Notes due March 2019
   201,695       223,947       201,695       212,068
4.90% Senior Notes due August 2020
   499,218       514,130       499,151       471,095
4.625% Senior Notes due March 2021
   399,653       396,118       399,627       363,837
3.95% Senior Notes due March 2022
   399,309       367,077       399,264       346,425
5.95% Senior Notes due April 2025
   448,767       442,302       —         —
6.20% Senior Notes due August 2040
   399,895       338,989       399,895       350,351
6.05% Senior Notes due March 2041
   397,700       329,678       397,681       343,653
5.25% Senior Notes due March 2042
   498,324       376,746       498,310       385,181
6.95% Senior Notes due April 2045
   394,536       367,827       —         —








Total senior unsecured notes
   4,838,541       4,564,142       3,745,525       3,417,131
Credit facilities & commercial paper program
   —         —         1,123,495       1,123,495








Total debt
   $ 4,838,541       $ 4,564,142       $ 4,869,020       $ 4,540,626








Note 9 — Income Taxes
At June 30, 2015, the reserves for uncertain tax positions totaled $112 million (net of related tax benefits of $1 million). If the June 30, 2015 reserves are not realized, the provision for income taxes would be reduced by $112 million. At December 31, 2014, the reserves for uncertain tax positions totaled $116 million (net of related tax benefits of $1 million).
It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may increase or decrease in the next 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.
Note 10 — Employee Benefit Plans
Pension costs include the following components for the three months ended June 30, 2015 and 2014:
   Three Months Ended June 30,
   2015    2014
   Non-U.S.    U.S.    Non-U.S.    U.S.
Service cost
   $ 846       $ 2,149       $ 1,433       $ 2,541
Interest cost
   632       2,300       1,472       2,714
Return on plan assets
   (911 )    (3,286 )    (1,856 )    (3,846 )
Amortization of prior service cost
   26       36       (5 )    56
Recognized net actuarial loss
   110       1,539       316       651








Net pension expense
   $ 703       $ 2,738       $ 1,360       $ 2,116








NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
Included in net pension expense for the three months ended June 30, 2014 for our non-U.S. and U.S. plans was approximately $0.8 million and $0.5 million, respectively, related to Paragon Offshore that was classified as discontinued operations.
Pension costs include the following components for the six months ended June 30, 2015 and 2014:
   Six Months Ended June 30,
   2015    2014
   Non-U.S.    U.S.    Non-U.S.    U.S.
Service cost
   $ 1,720       $ 4,298       $ 2,853       $ 5,082
Interest cost
   1,274       4,599       2,928       5,428
Return on plan assets
   (1,837 )    (6,573 )    (3,691 )    (7,692 )
Amortization of prior service cost
   53       71       (10 )    112
Recognized net actuarial loss
   155       3,079       629       1,302








Net pension expense
   $ 1,365       $ 5,474       $ 2,709       $ 4,232








Included in net pension expense for the six months ended June 30, 2014 for our non-U.S. and U.S. plans was approximately $2 million and $0.9 million, respectively, related to Paragon Offshore that was classified as discontinued operations.
During the three and six months ended June 30, 2015, we made contributions to our pension plans totaling approximately $0.1 million and $0.3 million, respectively.
Note 11 — 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.
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. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings.
Cash Flow Hedges
Several of our regional shorebases, including our North Sea, Australian and Brazilian 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, which settle monthly in the operations’ respective local currencies. All of these contracts have a maturity of less than 12 months. The forward contract settlements in the remainder of 2015 represent approximately 60 percent of these forecasted local currency requirements. The notional amount of the forward contracts outstanding, expressed in U.S. Dollars, was approximately $47 million at June 30, 2015. Total unrealized losses related to these forward contracts were approximately $0.1 million as of June 30, 2015 and were recorded as part of “Accumulated other comprehensive loss” (“AOCL”).
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
Financial Statement Presentation
The following table, together with Note 12, summarizes the financial statement presentation and fair value of our derivative positions as of June 30, 2015 and December 31, 2014:
      Estimated fair value
   Balance sheet
classification    June 30,
2015    December 31,
2014
Asset derivatives

Cash flow hedges

Short-term foreign currency forward contracts
   Other current assets    $ 1,103       $ —
Liability derivatives

Cash flow hedges

Short-term foreign currency forward contracts
   Other current liabilities    $ 1,194       $ —
To supplement the fair value disclosures in Note 12, the following summarizes the recognized gains and losses of cash flow hedges and non-designated derivatives through AOCL or through “contract drilling services” expense for the three months ended June 30, 2015 and 2014:
   Gain/(loss) recognized
through AOCL    Gain/(loss) reclassified
from AOCL to “contract
drilling services”
expense    Gain/(loss) recognized
through “contract
drilling services” expense
   2015    2014    2015 2014    2015    2014
Cash flow hedges

Foreign currency forward contracts
   $ 479       $ 5,067       $ (570 ) $ 1,585       $ —         $ —
To supplement the fair value disclosures in Note 12, the following summarizes the recognized gains and losses of cash flow hedges and non-designated derivatives through AOCL or through “contract drilling services” expense for the six months ended June 30, 2015 and 2014:
   Gain/(loss) recognized
through AOCL    Gain/(loss) reclassified
from AOCL to “contract
drilling services”
expense    Gain/(loss) recognized
through “contract
drilling services” expense
   2015    2014    2015 2014    2015    2014
Cash flow hedges

Foreign currency forward contracts
   $ 513       $ 3,873       $ (604 ) $ 2,779       $ —         $ —
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
Note 12 — Fair Value of Financial Instruments
The following tables present the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis:
   June 30, 2015
      Estimated Fair Value Measurements
   Carrying
Amount    Quoted
Prices in
Active
Markets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)
Assets -

Marketable securities
   $ 7,170       $ 7,170       $ —         $ —
Foreign currency forward contracts
   1,103       —         1,103       —
Liabilities -

Foreign currency forward contracts
   $ 1,194       $ —         $ 1,194       $ —
   December 31, 2014
      Estimated Fair Value Measurements
   Carrying
Amount    Quoted
Prices in
Active
Markets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)
Assets -

Marketable securities
   $ 6,175       $ 6,175       $ —         $ —
The foreign currency forward contracts have been valued using actively quoted prices and quotes obtained from the counterparties to the contracts. 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 PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
Note 13 — Accumulated Other Comprehensive Loss
The following tables set forth the components of, and changes in the accumulated balances for each component of, AOCL for the six months ended June 30, 2015 and 2014. All amounts within the tables are shown net of tax.
   Gains /
(Losses) on
Cash Flow
Hedges⁽¹⁾    Defined
Benefit
Pension
Items⁽²⁾    Foreign
Currency
Items    Total
Balance at December 31, 2013
   $ —         $ (58,598 )    $ (23,566 )    $ (82,164 )








Activity during period:

Other comprehensive income before reclassifications
   9,431       —         2,720       12,151
Amounts reclassified from AOCL
   (2,779 )    1,528       —         (1,251 )








Net other comprehensive income
   6,652       1,528       2,720       10,900








Balance at June 30, 2014
   $ 6,652       $ (57,070 )    $ (20,846 )    $ (71,264 )

















Balance at December 31, 2014
   $ —         $ (58,440 )    $ (10,978 )    $ (69,418 )








Activity during period:

Other comprehensive loss before reclassifications
   (695 )    —         (1,874 )    (2,569 )
Amounts reclassified from AOCL
   604       2,210       —         2,814








Net other comprehensive income (loss)
   (91 )    2,210       (1,874 )    245








Balance at June 30, 2015
   $ (91 )    $ (56,230 )    $ (12,852 )    $ (69,173 )








(1) Gains / (losses) on cash flow hedges are related to our foreign currency forward contracts. Reclassifications from AOCL are recognized through “contract drilling services” expense on our Consolidated Statements of Income. See Note 11 for additional information.
(2) Defined benefit pension items relate to actuarial changes, the amortization of prior service costs and curtailment and settlement expenses. Reclassifications from AOCL are recognized as expense on our Consolidated Statements of Income through either “contract drilling services” or “general and administrative”. See Note 10 for additional information.
Note 14 — Commitments and Contingencies
TheNoble Homer Ferringtonwas under contract with a subsidiary of Exxon Mobil Corporation (“Exxon”), which entered into an assignment agreement with British Petroleum plc (“BP”) for a two-well farmout of the rig in Libya after successfully drilling two wells with the rig for Exxon. In August 2010, BP attempted to terminate the assignment agreement claiming that the rig was not in the required condition, and Exxon 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 the Libyan operating subsidiaries of both BP and Exxon (the “Defendants”). The arbitration panel issued an award in our favor for the amount of $136 million plus interest and fees, and on July 10, 2015, the period under which the Defendants could seek clarification or correction of the award under the applicable arbitration rules expired. On July 31, 2015, BP paid us $149 million under the award, and we expect Exxon to promptly resolve their portion of the award. We anticipate recognizing award amounts received in our statement of operations during the third quarter.
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
In December 2014, one of our subsidiaries reached a settlement with the U.S. Department of Justice (“DOJ”) regarding our drillship, theNoble Discoverer, and theKulluk in respect of violations of applicable law discovered in connection with a 2012 coast guard inspection in Alaska and our own subsequent internal investigation. Under the terms of the agreement, the subsidiary pled guilty to oil record book, ballast record and required hazardous condition reporting violations with respect to the Noble Discoverer and an oil record book violation with respect to theKulluk. The subsidiary paid $8.2 million in fines and $4 million in community service payments, and was placed on probation for four years, provided that we may petition the court for early dismissal of probation after three years. If during the term of probation, the subsidiary fails to adhere to the terms of the plea agreement, the DOJ may withdraw from the plea agreement and would be free to prosecute the subsidiary on all charges arising out of its investigation, including any charges dismissed pursuant to the terms of the plea agreement, as well as potentially other charges. We also implemented a comprehensive environmental compliance plan in connection with the settlement.
We have used a commercial agent in Brazil in connection with our Petróleo Brasileiro S.A. (“Petrobras”) drilling contracts. We understand that this agent has represented a number of different companies in Brazil over many years, including several offshore drilling contractors. Recent reports indicate that this agent has entered into a plea agreement in Brazil in connection with the award of a drilling contract to a competitor, and has implicated a Petrobras official as part of a wider investigation of Petrobras’ business practices. We are not aware of any improper activity by Noble in connection with contracts that Noble has entered into with Petrobras, and we have not been contacted by any authorities regarding such contracts or the investigation into Petrobras’ business practices.
We are from time to time a party to various lawsuits that are incidental to our operations in which the claimants seek an unspecified amount of monetary damages for personal injury, including injuries purportedly resulting from exposure to asbestos on drilling rigs and associated facilities. At June 30, 2015, there were 45 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, 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.
We operate in a number of countries throughout the world and our tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions. During the first quarter of 2014, the IRS began its examination of our tax reporting in the U.S. for the taxable years ended December 31, 2010 and 2011. We believe that we have accurately reported all amounts in our 2010 and 2011 tax returns. We believe the ultimate resolution of the outstanding assessments in the U.S., 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 any existing or future assessments.
Audit claims of approximately $110 million attributable to income, customs and other business taxes have been assessed against us in Mexico and Brazil. Tax assessments of approximately $52 million have been made against Noble entities in Mexico, of which approximately $38 million relates to Paragon Offshore assets that operated through Noble-retained entities in Mexico prior to the Spin-off. Paragon Offshore has received tax assessments of approximately $220 million against Paragon Offshore entities in Mexico, of which approximately $50 million relates to Noble assets that operated through Paragon Offshore-retained entities in Mexico prior to the Spin-off. In Brazil, Paragon Offshore has received tax assessments of approximately $150 million, of which $46 million relates to Noble assets that operated through a Paragon Offshore-retained entity in Brazil prior to the Spin-off. Under the TSA, Paragon Offshore must indemnify us for all assessed amounts that are related to Paragon Offshore’s Mexico assets, approximately $38 million as noted above, and we must indemnify Paragon Offshore for all assessed amounts that are related to Noble’s Mexico and Brazil assets, approximately $50 million and $46 million, respectively, as noted above, if and when such payments become due.
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
We have contested, or intend to contest or cooperate with Paragon Offshore where it is contesting, the assessments described above, 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 or our ability to collect indemnities from Paragon Offshore under the TSA.
On January 23, 2015, Noble received an official notification of a ruling from the Second Chamber of the Supreme Court in Mexico. The ruling settled an ongoing dispute in Mexico relating to the classification of a Noble subsidiary’s business activity and the applicable rate of depreciation under the Mexican law applicable to the activities of that subsidiary. The ruling did not result in any additional tax liability to Noble. Additionally, the ruling is only applicable to the Noble subsidiary named in the ruling and, therefore, does not establish the depreciation rate applicable to the assets of other Noble subsidiaries. We will continue to contest future assessments received. Any claim by the tax authorities relating to this depreciation issue would be related to the businesses transferred to Paragon Offshore in the Spin-off and, therefore, would be subject to indemnification by Paragon Offshore under the TSA.
We have been notified by Petrobras that it is currently challenging assessments by Brazilian tax authorities of withholding taxes associated with the provision of drilling rigs for its operations in Brazil during 2008 and 2009. Petrobras has also notified us that if Petrobras must ultimately pay such withholding taxes, it will seek reimbursement from us for the portion allocable to our drilling rigs. The amount of withholding tax that Petrobras indicates may be allocable to Noble drilling rigs is R$79 million (approximately $25 million). We believe that our contract with Petrobras requires Petrobras to indemnify us for these withholding taxes. We will, if necessary, vigorously defend our rights.
We maintain certain insurance coverage against specified marine perils, which includes physical damage and loss of hire. The rigs in the U.S. Gulf of Mexico are self-insured for named windstorm perils. In addition, we maintain a physical damage deductible on our rigs of $25 million per occurrence. 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, strikes or cyber risks. 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.
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 $697 million at June 30, 2015.
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION 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-UK (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 PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)
Note 15 — Accounting Pronouncements
In April 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-08, which amends FASB Accounting Standards Codification (“ASC”) Topic 205, “Presentation of Financial Statements” and ASC Topic 360, “Property, Plant, and Equipment.” This ASU alters the definition of a discontinued operation to cover only asset disposals that are a strategic shift with a major effect on an entity’s operations and finances, and calls for more extensive disclosures about a discontinued operation’s assets, liabilities, income and expenses. The guidance is effective for all disposals, or classifications as held-for-sale, of components of an entity that occur within annual periods beginning on or after December 15, 2014. ~~We are still evaluating what impact, if any,~~This standard was not early adopted in connection with the Spin-Off. The adoption of this guidance ~~will~~did not have a material impact on our financial condition, results of operations, cash flows or financial disclosures.
In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, “Revenue from Contracts with Customers.” The amendments in this ASU are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices and improve disclosure requirements. ~~The amendments in this accounting standard update are~~Under the deferred adoption date, the new guidance will be effective for interim and annual reporting periods beginning after December 15, ~~2016.~~2017. 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.
In June 2014, the FASB issued ASU No. 2014-12, which amends ASC Topic 718, “Compensation-Stock Compensation.” The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. The guidance is effective for annual periods beginning after December 15, 2015. The guidance can be applied prospectively for all awards granted or modified after the effective date or retrospectively to all awards with performance targets outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. 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.
In August 2014, the FASB issued ASU No. 2014-15, which amends ASC Subtopic 205-40, “Disclosure of Uncertainties about an Entity’s Ability to continue as a Going Concern.” The amendments in this ASU provide guidance related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
In January 2015, the FASB issued ASU No. 2015-01, which amends ASC Subtopic 225-20, “Income Statement – Extraordinary and Unusual Items.” The amendment in this ASU eliminates from GAAP the concept of extraordinary items. The amendments in this update are effective for interim and annual reporting periods beginning after December 15, 2015. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
In February 2015, the FASB issued ASU No. 2015-02 which amends ASC Subtopic 810, “Consolidations.” This amendment affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities; eliminate the presumption that a general partner should consolidate a limited partnership; affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. The standard may be applied retrospectively or through a cumulative effect adjustment to retained earnings as of the beginning of the year of adoption. We are 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 PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

In April 2015, the FASB issued ASU No. 2015-03 which amends ASC Subtopic 835-30, “Interest – Imputation of Interest.” The guidance requires debt issuance costs to be presented in the balance sheet as a direct reduction from the associated debt liability. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. We are evaluating what impact the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
In April 2015, the FASB issued ASU No. 2015-04 which amends ASC Topic 715, “Compensation – Retirement Benefits.” The guidance gives an employer whose fiscal year end does not coincide with a calendar month end the ability, as a practical expedient, to measure defined benefit retirement obligations and related plan assets as of the month end that is closest to its fiscal year end. The ASU also provides a similar practical expedient for interim remeasurements of significant events. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
Note 1516 — ~~Net Change~~Supplemental Financial Information
Consolidated Balance Sheets Information
Deferred revenues from drilling contracts totaled $223 million and $263 million at June 30, 2015 and December 31, 2014, respectively. Such amounts are included in ~~Other Assets~~either “Other current liabilities” or “Other liabilities” in the accompanying Consolidated Balance Sheets, based upon our expected time of recognition. Related expenses deferred under drilling contracts totaled $90 million at June 30, 2015 as compared to $94 million at December 31, 2014, and ~~Liabilities~~are included in either “Prepaid expenses and other current assets” or “Other assets” in the accompanying Consolidated Balance Sheets, based upon our expected time of recognition.
In April 2015, we agreed to contract dayrate reductions for five rigs working for Saudi Arabian Oil Company (“Aramco”), which are effective from January 1, 2015 through December 31, 2015. In accordance with accounting guidance, we are recognizing the reductions on a straight-line basis over the remaining life of the existing Aramco contracts. At June 30, 2015, revenues recorded in excess of billings as a result of this recognition totaled $37 million, and are included in “Other assets” in the accompanying Consolidated Balance Sheets.
Consolidated Statements of Cash Flows Information
The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows:

   Noble-UK Noble-Cayman
   Six months ended Six months ended
   June 30, June 30,
   2014 2013 2014 2013
Accounts receivable
   $ 67,689    $ (90,903 ) $ 67,689    $ (90,903 )
Other current assets
   (47,537 ) (68,614 ) (48,834 ) (70,214 )
Other assets
   (39,612 ) 1,191    (39,603 ) 1,145
Accounts payable
   17,497    32,125    5,073    32,222
Other current liabilities
   (46,749 ) (8,057 ) (34,454 ) (6,336 )
Other liabilities
   12,888    (12,291 ) 12,888    (12,291 )


   $ (35,824 ) $ (146,549 ) $ (37,241 ) $ (146,377 )


~~Note 16 — Subsequent Events~~
~~Paragon Offshore plc Spin-off Transaction~~
As discussed in Note 1, we completed our spin-off of Paragon Offshore on August 1, 2014. As part of this spin-off, we received approximately $1.7 billion in cash as settlement of intercompany notes issued by Paragon Offshore to Noble as consideration for the business contributed to Paragon Offshore. We used these funds to repay outstanding third-party debt of Noble-Cayman and its subsidiaries.
~~On July 18, 2014, Paragon Offshore incurred approximately $1.7 billion of debt consisting of:~~
~~$1.08 billion aggregate principal amount of senior notes in two separate tranches, comprising $500 million of 6.75% Senior Notes due 2022 and $580 million of 7.25% Senior Notes due 2024; and~~
~~$650 million of a senior secured term credit agreement, at an interest rate of LIBOR plus 2.75%, subject to a LIBOR floor of 1%, which has an initial term of seven years.~~
~~Subsequent to the spin-off, we have no obligation for any of Paragon Offshore’s outstanding debt.~~
~~UK Bareboat Tax Law~~
In July 2014, the UK government passed a new law that restricts deductions on certain related party transactions, such as those relating to the bareboat charter agreements used in connection with our UK continental shelf operations. This legislation, which became effective retroactively from April 1, 2014, will result in an increase in the effective tax rate reducing our net income on our consolidated operations and will be shown in our statement of operations beginning in the third quarter of 2014. This new legislation would be applicable to our operations in the UK irrespective of the place of incorporation of Noble-UK.
   Noble-UK    Noble-Cayman
   Six months ended
June 30,    Six months ended
June 30,
   2015    2014    2015    2014
Accounts receivable
   $ 28,673       $ 67,689       $ 28,673       $ 67,689
Other current assets
   68,667       (47,537 )    48,106       (48,834 )
Other assets
   39,132       (39,612 )    18,838       (39,603 )
Accounts payable
   (9,915 )    17,497       (7,947 )    5,073
Other current liabilities
   (19,481 )    (46,749 )    (10,350 )    (34,454 )
Other liabilities
   (32,592 )    12,888       (32,594 )    12,888








   $ 74,484       $ (35,824 )    $ 44,726       $ (37,241 )








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

Note 17 — Information about Noble-Cayman
Guarantees of Registered Securities
In May 2014, as part of the separation of Paragon Offshore, Noble Holding (U.S.) Corporation (“NHC”) assumed all of the obligations of Noble Drilling Corporation (“NDC”) under the Senior Notes due 2019, and NDC was released from all obligations under the Senior Notes due 2019. As such, we are removing NDC from the guarantor financial statements and NHC will no longer be combined with Noble Drilling Holding, LLC (“NDH”), as they are now issuers and guarantors on separate debt instruments. We have recast prior periods presented to conform to the guarantor structure as it exists at June 30, 2014.
Noble-Cayman, or one or more wholly-owned subsidiaries of Noble-Cayman, are a co-issuer or full and unconditional guarantor or otherwise obligated as of June 30, ~~2014 with respect to the following securities~~2015 as follows:

~~Issuer~~
Notes

Issuer
(Co-Issuer(s))

~~Guarantor(s)~~
Guarantor
$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
$250 million 4.00% Senior Notes due 2018
NHIL Noble-Cayman
$202 million 7.50% Senior Notes due 2019
NHC ~~Noble-Cayman;~~ Noble-Cayman
~~NDH~~Noble Drilling Holding, LLC (“NDH”)
Noble Drilling Services 6 LLC (“NDS6”)
$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
$450 million 5.95% Senior Notes due 2025
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
$400 million 6.95% Senior Notes due 2045
NHIL Noble-Cayman
The following condensed consolidating financial statements of Noble-Cayman, NHC, NDH, NHIL, NDS6 and all other subsidiaries present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.
NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
June 30, ~~2014~~2015
(in thousands)

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

Current assets

Cash and cash equivalents
$ 5    $ —      $ 1,330    $ —      $ —      $ 136,375    $ —      $ 137,710    $ 29    $ —      $ 126    $ —      $ —      $ 244,965    $ —      $ 245,120
Accounts receivable
—      —      45,464    —      —      844,478    —      889,942    —      —      16,141    —      —      524,282    —      540,423
Taxes receivable
—      58,014    299    —      —      89,846    —      148,159    —      16,063    281    —      —      43,813    —      60,157
Short-term notes receivable from affiliates
—      —      1,077,965    —      19,500    560,925    (1,658,390 ) —      125,330    —      1,077,965    —      333,965    171,925    (1,709,185 ) —
Accounts receivable from affiliates
1,164,153    368,701    161,002    252,598    34,071    4,375,746    (6,356,271 ) —      693,834    437,455    234,677    1,164,504    121,829    4,258,806    (6,911,105 ) —
Prepaid expenses and other current assets
—      —      2,373    21    —      229,310    —      231,704    1,436    —      4,961    —      —      132,207    —      138,604

Total current assets
1,164,158    426,715    1,288,433    252,619    53,571    6,236,680    (8,014,661 ) 1,407,515    820,629    453,518    1,334,151    1,164,504    455,794    5,375,998    (8,620,290 ) 984,304

Property and equipment, at cost
—      —      2,135,178    —      —      18,218,163    —      20,353,341    —      —      2,081,631    —      —      12,490,780    —      14,572,411
Accumulated depreciation
—      —      (246,406 ) —      —      (4,861,741 ) —      (5,108,147 ) —      —      (315,372 ) —      —      (2,312,354 ) —      (2,627,726 )

Property and equipment, net
—      —      1,888,772    —      —      13,356,422    —      15,245,194    —      —      1,766,259    —      —      10,178,426    —      11,944,685

Notes receivable from affiliates
3,304,753    —      879,154    1,980,391    5,000    2,096,075    (8,265,373 ) —      3,304,653    —      236,920    1,980,391    5,000    1,583,587    (7,110,551 ) —
Investments in affiliates
9,378,489    1,437,748    6,084,404    10,055,746    6,291,130    —      (33,247,517 ) —      4,971,977    1,316,576    2,913,930    8,777,006    6,634,018    —      (24,613,507 ) —
Other assets
3,943    —      7,015    21,253    576    271,579    —      304,366    6,773    —      6,523    27,668    455    179,345    —      220,764

Total assets
$ 13,851,343    $ 1,864,463    $ 10,147,778    $ 12,310,009    $ 6,350,277    $ 21,960,756    $ (49,527,551 ) $ 16,957,075    $ 9,104,032    $ 1,770,094    $ 6,257,783    $ 11,949,569    $ 7,095,267    $ 17,317,356    $ (40,344,348 ) $ 13,149,753

LIABILITIES AND EQUITY

Current liabilities

Short-term notes payables from affiliates
$ —      $ 171,925    $ —      $ —      $ 760,720    $ 725,745    $ (1,658,390 ) $ —      $ —      $ 171,925    $ —      $ —      $ 371,720    $ 1,165,540    $ (1,709,185 ) $ —
Current maturities of long-term debt
—      —      —      350,000    —      —      —      350,000
Accounts payable
—      —      8,594    —      —      343,639    —      352,233    —      —      7,658    —      —      210,408    —      218,066
Accrued payroll and related costs
—      —      7,951    —      —      134,601    —      142,552    —      —      6,412    —      —      67,993    —      74,405
Accounts payable to affiliates
1,025,178    61,519    3,278,835    45,051    13,352    1,932,336    (6,356,271 ) —      717,632    65,849    3,460,644    78,638    23,959    2,564,383    (6,911,105 ) —
Taxes payable
—      —      —      —      —      124,631    —      124,631    —      —      —      —      —      107,716    —      107,716
Interest payable
—      —      —      75,888    4,412    —      —      80,300
Other current liabilities
1,173    —      32,505    57,053    4,412    163,524    —      258,667    273    —      7,097    —      —      100,197    —      107,567

Total current liabilities
1,026,351    233,444    3,327,885    102,104    778,484    3,424,476    (8,014,661 ) 878,083    717,905    237,774    3,481,811    504,526    400,091    4,216,237    (8,620,290 ) 938,054

Long-term debt
2,268,613    —      —      3,543,638    201,695    —      —      6,013,946    —      —      —      4,286,846    201,695    —      —      4,488,541
Notes payable to affiliates
1,769,064    —      1,113,363    1,169,180    834,450    3,379,316    (8,265,373 ) —      1,769,064    —      600,874    1,169,181    192,215    3,379,217    (7,110,551 ) —
Deferred income taxes
—      —      —      —      —      233,419    —      233,419    —      —      —      —      —      104,402    —      104,402
Other liabilities
19,930    —      30,999    —      —      287,959    —      338,888    19,929    —      27,703    —      —      257,306    —      304,938

Total liabilities
5,083,958    233,444    4,472,247    4,814,922    1,814,629    7,325,170    (16,280,034 ) 7,464,336    2,506,898    237,774    4,110,388    5,960,553    794,001    7,957,162    (15,730,841 ) 5,835,935

Commitments and contingencies

Total shareholder equity
8,767,385    1,631,019    5,675,531    7,495,087    4,535,648    13,375,613    (32,712,898 ) 8,767,385    6,597,134    1,532,320    2,147,395    5,989,016    6,301,266    8,221,330    (24,191,327 ) 6,597,134
Noncontrolling interests
—      —      —      —      —      1,259,973    (534,619 ) 725,354    —      —      —      —      —      1,138,864    (422,180 ) 716,684

Total equity
8,767,385    1,631,019    5,675,531    7,495,087    4,535,648    14,635,586    (33,247,517 ) 9,492,739    6,597,134    1,532,320    2,147,395    5,989,016    6,301,266    9,360,194    (24,613,507 ) 7,313,818

Total liabilities and equity
$ 13,851,343    $ 1,864,463    $ 10,147,778    $ 12,310,009    $ 6,350,277    $ 21,960,756    $ (49,527,551 ) $ 16,957,075    $ 9,104,032    $ 1,770,094    $ 6,257,783    $ 11,949,569    $ 7,095,267    $ 17,317,356    $ (40,344,348 ) $ 13,149,753

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, ~~2013~~2014
(in thousands)

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

Current assets

Cash and cash equivalents
$ 1    $ —      $ 402    $ 4    $ —      $ 109,975    $ —      $ 110,382    $ 5    $ —      $ 254    $ —      $ —      $ 65,521    $ —      $ 65,780
Accounts receivable
—      —      34,038    —      —      915,031    —      949,069    —      —      37,655    2,336    —      529,105    —      569,096
Taxes receivable
—      52,307    —      —      —      87,722    —      140,029    —      63,373    752    —      —      43,164    —      107,289
Short-term notes receivable from affiliates
—      —      1,456,245    139,195    19,500    52,611    (1,667,551 ) —      123,449    —      1,077,965    —      333,966    171,925    (1,707,305 ) —
Accounts receivable from affiliates
1,244,019    —      108,208    210,868    27,537    6,010,430    (7,601,062 ) —      2,019,319    374,012    192,771    157,164    125,834    4,191,406    (7,060,506 ) —
Prepaid expenses and other current assets
—      —      6,336    —      —      178,012    —      184,348    14,274    —      1,764    —      —      123,631    —      139,669

Total current assets
1,244,020    52,307    1,605,229    350,067    47,037    7,353,781    (9,268,613 ) 1,383,828    2,157,047    437,385    1,311,161    159,500    459,800    5,124,752    (8,767,811 ) 881,834

Property and equipment, at cost
—      —      2,340,216    —      —      16,820,134    —      19,160,350    —      —      2,040,168    —      —      12,364,203    —      14,404,371
Accumulated depreciation
—      —      (310,171 ) —      —      (4,321,507 ) —      (4,631,678 ) —      —      (278,147 ) —      —      (2,040,073 ) —      (2,318,220 )

Property and equipment, net
—      —      2,030,045    —      —      12,498,627    —      14,528,672    —      —      1,762,021    —      —      10,324,130    —      12,086,151

Notes receivable from affiliates
3,304,753    —      124,216    2,367,555    5,000    1,390,500    (7,192,024 ) —      3,304,654    —      236,921    1,980,391    5,000    1,581,429    (7,108,395 ) —
Investments in affiliates
8,601,712    2,907,379    6,595,591    9,456,735    5,440,004    —      (33,001,421 ) —      4,567,335    1,318,239    2,921,452    8,266,444    6,290,918    —      (23,364,388 ) —
Other assets
6,256    —      6,332    22,681    639    233,106    —      269,014    2,908    —      6,212    19,826    517    192,791    —      222,254

Total assets
$ 13,156,741    $ 2,959,686    $ 10,361,413    $ 12,197,038    $ 5,492,680    $ 21,476,014    $ (49,462,058 ) $ 16,181,514    $ 10,031,944    $ 1,755,624    $ 6,237,767    $ 10,426,161    $ 6,756,235    $ 17,223,102    $ (39,240,594 ) $ 13,190,239

LIABILITIES AND EQUITY

Current liabilities

Short-term notes payables from affiliates
$ —      $ 52,611    $ 139,195    $ —      $ 750,000    $ 725,745    $ (1,667,551 ) $ —      $ —      $ 171,925    $ —      $ —      $ 371,720    $ 1,163,660    $ (1,707,305 ) $ —
Accounts payable
—      —      5,310    —      —      340,600    —      345,910    600    —      10,130    —      —      250,282    —      261,012
Accrued payroll and related costs
—      —      8,582    —      —      134,764    —      143,346    —      —      7,738    —      —      83,749    —      91,487
Accounts payable to affiliates
1,104,410    653,049    4,032,776    216,866    21,173    1,572,788    (7,601,062 ) —      606,224    63,602    3,513,705    61,982    16,869    2,798,124    (7,060,506 ) —
Taxes payable
—      —      827    —      —      119,761    —      120,588    —      —      —      —      —      91,471    —      91,471
Interest payable
499    —      —      57,053    4,412    —      —      61,964
Other current liabilities
412    —      22,106    62,431    4,412    210,811    —      300,172    15,651    —      13,409    —      —      110,890    —      139,950

Total current liabilities
1,104,822    705,660    4,208,796    279,297    775,585    3,104,469    (9,268,613 ) 910,016    622,974    235,527    3,544,982    119,035    393,001    4,498,176    (8,767,811 ) 645,884

Long-term debt
1,561,141    —      —      3,793,414    201,696    —      —      5,556,251    1,123,495    —      —      3,543,830    201,695    —      —      4,869,020
Notes payable to affiliates
2,042,808    —      534,683    975,000    260,216    3,379,317    (7,192,024 ) —      1,769,068    —      598,715    1,169,180    192,216    3,379,216    (7,108,395 ) —
Deferred income taxes
—      —      —      —      —      225,455    —      225,455    —      —      —      —      —      120,589    —      120,589
Other liabilities
19,931    —      24,502    —      —      289,875    —      334,308    19,929    —      29,093    —      —      286,942    —      335,964

Total liabilities
4,728,702    705,660    4,767,981    5,047,711    1,237,497    6,999,116    (16,460,637 ) 7,026,030    3,535,466    235,527    4,172,790    4,832,045    786,912    8,284,923    (15,876,206 ) 5,971,457

Commitments and contingencies

Total shareholder equity
8,428,039    2,254,026    5,593,432    7,149,327    4,255,183    13,238,656    (32,490,624 ) 8,428,039    6,496,478    1,520,097    2,064,977    5,594,116    5,969,323    7,812,656    (22,961,169 ) 6,496,478
Noncontrolling interests
—      —      —      —      —      1,238,242    (510,797 ) 727,445    —      —      —      —      —      1,125,523    (403,219 ) 722,304

Total equity
8,428,039    2,254,026    5,593,432    7,149,327    4,255,183    14,476,898    (33,001,421 ) 9,155,484    6,496,478    1,520,097    2,064,977    5,594,116    5,969,323    8,938,179    (23,364,388 ) 7,218,782

Total liabilities and equity
$ 13,156,741    $ 2,959,686    $ 10,361,413    $ 12,197,038    $ 5,492,680    $ 21,476,014    $ (49,462,058 ) $ 16,181,514    $ 10,031,944    $ 1,755,624    $ 6,237,767    $ 10,426,161    $ 6,756,235    $ 17,223,102    $ (39,240,594 ) $ 13,190,239

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2015
(in thousands)
   Noble-
Cayman NHC NDH NHIL NDS6 Other
Non-guarantor
Subsidiaries
of Noble Consolidating
Adjustments Total
Operating revenues

Contract drilling services
   $ —      $ —      $ 64,269    $ —      $ —      $ 755,585    $ (48,547 ) $ 771,307
Reimbursables
   —      —      8,537    —      —      13,711    —      22,248


Total operating revenues
   —      —      72,806    —      —      769,296    (48,547 ) 793,555


Operating costs and expenses

Contract drilling services
   2,792    8,302    17,864    23,389    —      315,167    (48,547 ) 318,967
Reimbursables
   —      —      3,299    —      —      14,353    —      17,652
Depreciation and amortization
   —      —      20,683    —      —      138,114    —      158,797
General and administrative
   482    3,672    —      9,045    1    309    —      13,509


Total operating costs and expenses
   3,274    11,974    41,846    32,434    1    467,943    (48,547 ) 508,925


Operating income (loss)
   (3,274 ) (11,974 ) 30,960    (32,434 ) (1 ) 301,353    —      284,630
Other income (expense)

Income (loss) of unconsolidated affiliates
   187,575    34,898    37,017    248,725    164,049    —      (672,264 ) —
Income (loss) of unconsolidated affiliates - discontinued operations, net of tax
   —      —      —      —      —      —      —      —


Total income (loss) of unconsolidated affiliates
   187,575    34,898    37,017    248,725    164,049    —      (672,264 ) —
Interest expense, net of amounts capitalized
   (21,133 ) (1,229 ) (3,310 ) (60,552 ) (7,753 ) (14,215 ) 50,727    (57,465 )
Interest income and other, net
   3,743    (1 ) 14,275    21,011    1,414    8,384    (50,727 ) (1,901 )


Income from continuing operations before income taxes
   166,911    21,694    78,942    176,750    157,709    295,522    (672,264 ) 225,264
Income tax provision
   —      (17,592 ) (1,397 ) —      —      (20,547 ) —      (39,536 )


Net income from continuing operations
   166,911    4,102    77,545    176,750    157,709    274,975    (672,264 ) 185,728
Net income from discontinued operations, net of tax
   —      —      —      —      —      —      —      —


Net Income
   166,911    4,102    77,545    176,750    157,709    274,975    (672,264 ) 185,728
Net income attributable to noncontrolling interests
   —      —      —      —      —      (27,360 ) 8,543    (18,817 )


Net income attributable to Noble Corporation
   166,911    4,102    77,545    176,750    157,709    247,615    (663,721 ) 166,911


Other comprehensive income, net
   5,608    —      —      —      —      5,608    (5,608 ) 5,608


Comprehensive income attributable to Noble Corporation
   $ 172,519    $ 4,102    $ 77,545    $ 176,750    $ 157,709    $ 253,223    $ (669,329 ) $ 172,519


NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2015
(in thousands)
Noble-
Cayman NHC NDH NHIL NDS6 Other
Non-guarantor
Subsidiaries
of Noble Consolidating
Adjustments Total
Operating revenues

Contract drilling services
$ —      $ —      $ 139,328    $ —      $ —      $ 1,493,392    $ (82,052 ) $ 1,550,668
Reimbursables
—      —      10,916    —      —      36,313    —      47,229

Total operating revenues
—      —      150,244    —      —      1,529,705    (82,052 ) 1,597,897

Operating costs and expenses

Contract drilling services
4,607    16,593    47,242    46,228    —      605,828    (82,052 ) 638,446
Reimbursables
—      —      4,781    —      —      33,028    —      37,809
Depreciation and amortization
—      —      38,051    —      —      274,612    —      312,663
General and administrative
939    7,060    —      17,394    1    323    —      25,717

Total operating costs and expenses
5,546    23,653    90,074    63,622    1    913,791    (82,052 ) 1,014,635

Operating income (loss)
(5,546 ) (23,653 ) 60,170    (63,622 ) (1 ) 615,914    —      583,262
Other income (expense)

Income (loss) of unconsolidated affiliates
404,301    66,979    92,041    538,483    343,099    —      (1,444,903 ) —
Income (loss) of unconsolidated affiliates - discontinued operations, net of tax
—      —      —      —      —      —      —      —

Total income (loss) of unconsolidated affiliates
404,301    66,979    92,041    538,483    343,099    —      (1,444,903 ) —
Interest expense, net of amounts capitalized
(45,886 ) (2,248 ) (6,565 ) (108,888 ) (13,969 ) (27,942 ) 98,989    (106,509 )
Interest income and other, net
6,473    4,831    26,987    41,790    2,813    20,642    (98,989 ) 4,547

Income from continuing operations before income taxes
359,342    45,909    172,633    407,763    331,942    608,614    (1,444,903 ) 481,300
Income tax provision
—      (33,685 ) (1,776 ) —      —      (47,633 ) —      (83,094 )

Net income from continuing operations
359,342    12,224    170,857    407,763    331,942    560,981    (1,444,903 ) 398,206
Net income from discontinued operations, net of tax
—      —      —      —      —      —      —      —

Net Income
359,342    12,224    170,857    407,763    331,942    560,981    (1,444,903 ) 398,206
Net income attributable to noncontrolling interests
—      —      —      —      —      (57,824 ) 18,960    (38,864 )

Net income attributable to Noble Corporation
359,342    12,224    170,857    407,763    331,942    503,157    (1,425,943 ) 359,342

Other comprehensive income, net
245    —      —      —      —      245    (245 ) 245

Comprehensive income attributable to Noble Corporation
$ 359,587    $ 12,224    $ 170,857    $ 407,763    $ 331,942    $ 503,402    $ (1,426,188 ) $ 359,587

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2014
(in thousands)

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

Contract drilling services
$ —      $ —      $ 85,664    $ —      $ —      $ 1,147,008    $ (32,266 ) $ 1,200,406    $ —      $ —      $ 85,664    $ —      $ —      $ 725,970    $ (32,266 ) $ 779,368
Reimbursables
—      —      2,576    —      —      29,235    —      31,811    —      —      2,575    —      —      21,838    —      24,413
Labor contract drilling services
—      —      —      —      —      8,146    —      8,146
Other
—      —      —      —      —      —      —      —

Total operating revenues
—      —      88,240    —      —      1,184,389    (32,266 ) 1,240,363    —      —      88,239    —      —      747,808    (32,266 ) 803,781

Operating costs and expenses

Contract drilling services
2,615    13,267    26,516    35,214    —      524,092    (32,266 ) 569,438    2,615    13,267    26,516    35,214    —      317,860    (32,266 ) 363,206
Reimbursables
—      —      1,662    —      —      20,798    —      22,460    —      —      1,662    —      —      16,070    —      17,732
Labor contract drilling services
—      —      —      —      —      6,261    —      6,261
Depreciation and amortization
—      —      15,711    —      —      238,063    —      253,774    —      —      15,711    —      —      136,531    —      152,242
General and administrative
334    3,156    —      8,263    1    (265 ) —      11,489    334    3,156    —      8,263    1    (265 ) —      11,489

Total operating costs and expenses
2,949    16,423    43,889    43,477    1    788,949    (32,266 ) 863,422    2,949    16,423    43,889    43,477    1    470,196    (32,266 ) 544,669

Operating income (loss)
(2,949 ) (16,423 ) 44,351    (43,477 ) (1 ) 395,440    —      376,941    (2,949 ) (16,423 ) 44,350    (43,477 ) (1 ) 277,612    —      259,112
Other income (expense)

Equity earnings in affiliates, net of tax
285,396    93,044    116,173    283,077    118,105    —      (895,795 ) —
Income (loss) of unconsolidated affiliates
184,704    64,955    22,653    164,952    114,022    —      (551,286 ) —
Income (loss) of unconsolidated affiliates - discontinued operations, net of tax
100,692    28,089    93,520    118,125    4,083    —      (344,509 ) —

Total income (loss) of unconsolidated affiliates
285,396    93,044    116,173    283,077    118,105    —      (895,795 ) —
Interest expense, net of amounts capitalized
(22,466 ) (736 ) (7,151 ) (39,998 ) (7,955 ) (12,452 ) 54,407    (36,351 ) (22,466 ) (736 ) (7,151 ) (39,998 ) (7,955 ) (12,452 ) 54,407    (36,351 )
Interest income and other, net
5,258    —      13,069    21,011    317    14,537    (54,407 ) (215 ) 5,258    —      13,069    21,011    317    13,504    (54,407 ) (1,248 )

Income before income taxes
265,239    75,885    166,442    220,613    110,466    397,525    (895,795 ) 340,375
Income from continuing operations before income taxes
265,239    75,885    166,441    220,613    110,466    278,664    (895,795 ) 221,513
Income tax provision
—      (27,054 ) (1,578 ) —      (1,547 ) (22,054 ) —      (52,233 ) —      (17,194 ) (1,522 ) —      (1,547 ) (13,800 ) —      (34,063 )

Net income from continuing operations
265,239    58,691    164,919    220,613    108,919    264,864    (895,795 ) 187,450
Net income from discontinued operations, net of tax
—      (9,860 ) (55 ) —      —      110,607    —      100,692

Net Income
265,239    48,831    164,864    220,613    108,919    375,471    (895,795 ) 288,142    265,239    48,831    164,864    220,613    108,919    375,471    (895,795 ) 288,142
Net income attributable to noncontrolling interests
—      —      —      —      —      (33,655 ) 10,752    (22,903 ) —      —      —      —      —      (33,655 ) 10,752    (22,903 )

Net income attributable to Noble Corporation
265,239    48,831    164,864    220,613    108,919    341,816    (885,043 ) 265,239    265,239    48,831    164,864    220,613    108,919    341,816    (885,043 ) 265,239

Other comprehensive income, net
3,182    —      —      —      —      3,182    (3,182 ) 3,182    3,182    —      —      —      —      3,182    (3,182 ) 3,182

Comprehensive income attributable to Noble Corporation
$ 268,421    $ 48,831    $ 164,864    $ 220,613    $ 108,919    $ 344,998    $ (888,225 ) $ 268,421    $ 268,421    $ 48,831    $ 164,864    $ 220,613    $ 108,919    $ 344,998    $ (888,225 ) $ 268,421

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2014
(in thousands)

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

Contract drilling services
$ —      $ —      $ 171,246    $ —      $ —      $ 2,309,988    $ (74,524 ) $ 2,406,710    $ —      $ —      $ 162,617    $ —      $ —      $ 1,461,912    $ (74,524 ) $ 1,550,005
Reimbursables
—      —      3,343    —      —      65,121    —      68,464    —      —      3,253    —      —      45,710    —      48,963
Labor contract drilling services
—      —      —      —      —      16,358    —      16,358
Other
—      —      —      —      —      1    —      1

Total operating revenues
—      —      174,589    —      —      2,391,468    (74,524 ) 2,491,533    —      —      165,870    —      —      1,507,622    (74,524 ) 1,598,968

Operating costs and expenses

Contract drilling services
12,686    20,486    61,400    61,330    —      1,046,888    (74,524 ) 1,128,266    12,686    20,486    61,090    61,330    —      632,715    (74,524 ) 713,783
Reimbursables
—      —      2,571    —      —      50,495    —      53,066    —      —      2,493    —      —      36,743    —      39,236
Labor contract drilling services
—      —      —      —      —      12,487    —      12,487
Depreciation and amortization
—      —      31,663    —      —      467,421    —      499,084    —      —      30,345    —      —      267,500    —      297,845
General and administrative
907    5,003    —      15,224    1    2,286    —      23,421    907    5,003    —      15,224    1    2,286    —      23,421

Total operating costs and expenses
13,593    25,489    95,634    76,554    1    1,579,577    (74,524 ) 1,716,324    13,593    25,489    93,928    76,554    1    939,244    (74,524 ) 1,074,285

Operating income (loss)
(13,593 ) (25,489 ) 78,955    (76,554 ) (1 ) 811,891    —      775,209    (13,593 ) (25,489 ) 71,942    (76,554 ) (1 ) 568,378    —      524,683
Other income (expense)

Equity earnings in affiliates, net of tax
605,609    163,777    225,327    601,836    290,296    —      (1,886,845 ) —
Income (loss) of unconsolidated affiliates
391,000    110,710    120,767    420,510    284,171    —      (1,327,158 ) —
Income (loss) of unconsolidated affiliates - discontinued operations, net of tax
214,609    53,067    104,560    181,326    6,125    —      (559,687 ) —

Total income (loss) of unconsolidated affiliates
605,609    163,777    225,327    601,836    290,296    —      (1,886,845 ) —
Interest expense, net of amounts capitalized
(48,350 ) (963 ) (12,974 ) (86,491 ) (15,904 ) (24,746 ) 112,685    (76,743 ) (48,350 ) (963 ) (12,974 ) (86,491 ) (15,904 ) (24,746 ) 112,685    (76,743 )
Interest income and other, net
6,888    —      26,749    46,968    630    29,918    (112,685 ) (1,532 ) 6,888    —      26,749    46,968    630    28,807    (112,685 ) (2,643 )

Income before income taxes
550,554    137,325    318,057    485,759    275,021    817,063    (1,886,845 ) 696,934
Income from continuing operations before income taxes
550,554    137,325    311,044    485,759    275,021    572,439    (1,886,845 ) 445,297
Income tax provision
—      (57,248 ) (2,585 ) —      (1,547 ) (45,181 ) —      (106,561 ) —      (38,593 ) (2,206 ) —      (1,547 ) (27,187 ) —      (69,533 )

Net income from continuing operations
550,554    98,732    308,838    485,759    273,474    545,252    (1,886,845 ) 375,764
Net income from discontinued operations, net of tax
—      (18,655 ) 6,634    —      —      226,630    —      214,609

Net Income
550,554    80,077    315,472    485,759    273,474    771,882    (1,886,845 ) 590,373    550,554    80,077    315,472    485,759    273,474    771,882    (1,886,845 ) 590,373
Net income attributable to noncontrolling interests
—      —      —      —      —      (63,641 ) 23,822    (39,819 ) —      —      —      —      —      (63,641 ) 23,822    (39,819 )

Net income attributable to Noble Corporation
550,554    80,077    315,472    485,759    273,474    708,241    (1,863,023 ) 550,554    550,554    80,077    315,472    485,759    273,474    708,241    (1,863,023 ) 550,554

Other comprehensive income, net
10,900    —      —      —      —   �� 10,900    (10,900 ) 10,900    10,900    —      —      —      —      10,900    (10,900 ) 10,900

Comprehensive income attributable to Noble Corporation
$ 561,454    $ 80,077    $ 315,472    $ 485,759    $ 273,474    $ 719,141    $ (1,873,923 ) $ 561,454    $ 561,454    $ 80,077    $ 315,472    $ 485,759    $ 273,474    $ 719,141    $ (1,873,923 ) $ 561,454

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF ~~INCOME~~
~~Three Months Ended June 30, 2013~~
~~(in thousands)~~

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

Contract drilling services
$ —      $ —      $ 86,313    $ —      $ —      $ 912,063    $ (22,921 ) $ 975,455
Reimbursables
—      —      2,735    —      —      25,525    —      28,260
Labor contract drilling services
—      —      —      —      —      13,603    —      13,603
Other
—      —      —      —      —      67    —      67

Total operating revenues
—      —      89,048    —      —      951,258    (22,921 ) 1,017,385

Operating costs and expenses

Contract drilling services
1,016    5,816    14,062    25,636    —      461,836    (22,921 ) 485,445
Reimbursables
—      —      2,489    —      —      20,212    —      22,701
Labor contract drilling services
—      —      —      —      —      9,402    —      9,402
Depreciation and amortization
—      —      15,321    —      —      196,911    —      212,232
General and administrative
667    2,122    —      9,403    1    3,395    —      15,588

Total operating costs and expenses
1,683    7,938    31,872    35,039    1    691,756    (22,921 ) 745,368

Operating income (loss)
(1,683 ) (7,938 ) 57,176    (35,039 ) (1 ) 259,502    —      272,017
Other income (expense)

Equity earnings in affiliates, net of tax
233,129    7,291    98,181    240,658    87,425    —      (666,684 ) —
Interest expense, net of amounts capitalized
(37,472 ) (233 ) (5,205 ) (32,705 ) (11,669 ) (24,093 ) 86,712    (24,665 )
Interest income and other, net
1,647    —      11,037    45,031    6,361    23,341    (86,712 ) 705

Income before income taxes
195,621    (880 ) 161,189    217,945    82,116    258,750    (666,684 ) 248,057
Income tax provision
—      15,766    (1,467 ) —      —      (50,029 ) —      (35,730 )

Net Income
195,621    14,886    159,722    217,945    82,116    208,721    (666,684 ) 212,327
Net income attributable to noncontrolling interests
—      —      —      —      —      (27,183 ) 10,477    (16,706 )

Net income attributable to Noble Corporation
195,621    14,886    159,722    217,945    82,116    181,538    (656,207 ) 195,621

Other comprehensive loss, net
(4,077 ) —      —      —      —      (4,077 ) 4,077    (4,077 )

Comprehensive income attributable to Noble Corporation
$ 191,544    $ 14,886    $ 159,722    $ 217,945    $ 82,116    $ 177,461    $ (652,130 ) $ 191,544

~~NOBLE CORPORATION AND SUBSIDIARIES~~
~~CONDENSED CONSOLIDATING STATEMENT OF INCOME~~CASH FLOWS
Six Months Ended June 30, ~~2013~~2015
(in thousands)

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

Contract drilling services
$ —      $ —      $ 133,270    $ —      $ —      $ 1,814,293    $ (43,371 ) $ 1,904,192
Reimbursables
—      —      3,321    —      —      46,113    —      49,434
Labor contract drilling services
—      —      —      —      —      34,657    —      34,657
Other
—      —      —      —      —      77    —      77

Total operating revenues
—      —      136,591    —      —      1,895,140    (43,371 ) 1,988,360

��

Operating costs and expenses

Contract drilling services
1,935    11,260    25,043    49,849    —      917,290    (43,371 ) 962,006
Reimbursables
—      —      2,823    —      —      34,800    —      37,623
Labor contract drilling services
—      —      —      —      —      21,651    —      21,651
Depreciation and amortization
—      —      30,183    —      —      387,800    —      417,983
General and administrative
1,292    4,014    —      18,116    1    7,008    —      30,431
Gain on contract extinguishments
—      —      —      —      —      (1,800 ) —      (1,800 )

Total operating costs and expenses
3,227    15,274    58,049    67,965    1    1,366,749    (43,371 ) 1,467,894

Operating income (loss)
(3,227 ) (15,274 ) 78,542    (67,965 ) (1 ) 528,391    —      520,466
Other income (expense)

Equity earnings in affiliates, net of tax
435,894    16,021    186,394    466,115    203,453    —      (1,307,877 ) —
Interest expense, net of amounts capitalized
(70,779 ) (617 ) (12,383 ) (67,265 ) (23,390 ) (47,427 ) 169,895    (51,966 )
Interest income and other, net
3,277    —      21,851    84,792    12,666    48,077    (169,895 ) 768

Income before income taxes
365,165    130    274,404    415,677    192,728    529,041    (1,307,877 ) 469,268
Income tax provision
—      11,868    (2,125 ) —      —      (79,487 ) —      (69,744 )

Net Income
365,165    11,998    272,279    415,677    192,728    449,554    (1,307,877 ) 399,524
Net income attributable to noncontrolling interests
—      —      —      —      —      (54,721 ) 20,362    (34,359 )

Net income attributable to Noble Corporation
365,165    11,998    272,279    415,677    192,728    394,833    (1,287,515 ) 365,165

Other comprehensive loss, net
(980 ) —      —      —      —      (980 ) 980    (980 )

Comprehensive income attributable to Noble Corporation
$ 364,185    $ 11,998    $ 272,279    $ 415,677    $ 192,728    $ 393,853    $ (1,286,535 ) $ 364,185

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

Net cash from operating activities
$ (37,768 ) $ (7,445 ) $ 123,844    $ (117,391 ) $ (11,095 ) $ 802,833    $ —      $ 752,978

Cash flows from investing activities

Capital expenditures
—      —      (48,227 ) —      —      (160,464 ) —      (208,691 )

Net cash from investing activities
—      —      (48,227 ) —      —      (160,464 ) —      (208,691 )

Cash flows from financing activities

Net change in borrowings outstanding on bank credit facilities
(1,123,495 ) —      —      —      —      —      —      (1,123,495 )
Issuance of senior notes
—      —      —      1,092,728    —      —      —      1,092,728
Debt issuance costs on senior notes and credit facilities
(6,450 ) —      —      (9,620 ) —      —      —      (16,070 )
Dividends paid to noncontrolling interests
—      —      —      —      —      (44,484 ) —      (44,484 )
Distributions to parent company, net
(273,626 ) —      —      —      —      —      —      (273,626 )
Advances (to) from affiliates
1,441,363    7,445    (75,745 ) (965,717 ) 11,095    (418,441 ) —      —

Net cash from financing activities
37,792    7,445    (75,745 ) 117,391    11,095    (462,925 ) —      (364,947 )

Net change in cash and cash equivalents
24    —      (128 ) —      —      179,444    —      179,340
Cash and cash equivalents, beginning of period
5    —      254    —      —      65,521    —      65,780

Cash and cash equivalents, end of period
$ 29    $ —      $ 126    $ —      $ —      $ 244,965    $ —      $ 245,120

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2014
(in thousands)

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

Net cash from operating activities
$ (33,190 ) $ (89,407 ) $ 132,085    $ (120,048 ) $ (16,759 ) $ 1,208,454    $ —      $ 1,081,135

Cash flows from investing activities

New construction and capital expenditures
—      —      (860,876 ) —      —      (367,207 ) —      (1,228,083 )
Notes receivable from affiliates
—      —      —      273,744    —      —      (273,744 ) —

Net cash from investing activities
—      —      (860,876 ) 273,744    —      (367,207 ) (273,744 ) (1,228,083 )

Cash flows from financing activities

Net change in borrowings outstanding on bank credit facilities
707,472    —      —      —      —      —      —      707,472
Repayment of long-term debt
—      —      —      (250,000 ) —      —      —      (250,000 )
Dividends paid to noncontrolling interests
—      —      —      —      —      (41,910 ) —      (41,910 )
Financing costs on credit facilities
(386 ) —      —      —      —      —      —      (386 )
Distributions to parent company, net
(240,900 ) —      —      —      —      —      —      (240,900 )
Advances (to) from affiliates
(159,248 ) 89,407    729,719    96,300    16,759    (772,937 ) —      —
Notes payable to affiliates
(273,744 ) —      —      —      —      —      273,744    —

Net cash from financing activities
33,194    89,407    729,719    (153,700 ) 16,759    (814,847 ) 273,744    174,276

Net change in cash and cash equivalents
4    —      928    (4 ) —      26,400    —      27,328
Cash and cash equivalents, beginning of period
1    —      402    4    —      109,975    —      110,382

Cash and cash equivalents, end of period
$ 5    $ —      $ 1,330    $ —      $ —      $ 136,375    $ —      $ 137,710

~~NOBLE CORPORATION AND SUBSIDIARIES~~
~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~
~~Six Months Ended June 30, 2013~~
~~(in thousands)~~
Other
Non-guarantor
Noble- Subsidiaries Consolidating
Cayman NHC NDH NHIL NDS6 of Noble Adjustments Total Noble-
Cayman NHC NDH NHIL NDS6 Other
Non-guarantor
Subsidiaries
of Noble Consolidating
Adjustments Total
Cash flows from operating activities

Net cash from operating activities
$ (60,083 ) $ (47,456 ) $ 71,577    $ (48,774 ) $ (10,663 ) $ 771,207    $ —      $ 675,808    $ (33,190 ) $ (89,407 ) $ 132,085    $ (120,048 ) $ (16,759 ) $ 1,208,454    $ —      $ 1,081,135

Cash flows from investing activities

New construction and capital expenditures
—      —      (804,500 ) —      —      (478,786 ) —      (1,283,286 )
Capital expenditures
—      —      (860,876 ) —      —      (367,207 ) —      (1,228,083 )
Notes receivable from affiliates
—      —      —      273,744    —      —      (273,744 ) —

Net cash from investing activities
—      —      (804,500 ) —      —      (478,786 ) —      (1,283,286 ) —      —      (860,876 ) 273,744    —      (367,207 ) (273,744 ) (1,228,083 )

Cash flows from financing activities

Net change in borrowings outstanding on bank credit facilities
941,653    —      —      —      —      —      —      941,653    707,472    —      —      —      —      —      —      707,472
Repayment of long-term debt
(300,000 ) —      —      —      —      —      —      (300,000 ) —      —      —      (250,000 ) —      —      —      (250,000 )
Dividends paid to noncontrolling interest
—      —      —      —      —      (46,649 ) —      (46,649 )
Financing costs on credit facilities
(1,912 ) —      —      —      —      —      —      (1,912 )
Debt issuance costs on senior notes and credit facilities
(386 ) —      —      —      —      —      —      (386 )
Dividends paid to noncontrolling interests
—      —      —      —      —      (41,910 ) —      (41,910 )
Distributions to parent company, net
(100,960 ) —      —      —      —      —      —      (100,960 ) (240,900 ) —      —      —      —      —      —      (240,900 )
Advances (to) from affiliates
(479,696 ) 47,456    732,263    48,774    10,663    (359,460 ) —      —      (159,248 ) 89,407    729,719    96,300    16,759    (772,937 ) —      —
Notes payable to affiliates
(273,744 ) —      —      —      —      —      273,744    —

Net cash from financing activities
59,085    47,456    732,263    48,774    10,663    (406,109 ) —      492,132    33,194    89,407    729,719    (153,700 ) 16,759    (814,847 ) 273,744    174,276

Net change in cash and cash equivalents
(998 ) —      (660 ) —      —      (113,688 ) —      (115,346 ) 4    —      928    (4 ) —      26,400    —      27,328
Cash and cash equivalents, beginning of period
1,003    —      904    2    —      275,466    —      277,375    1    —      402    4    —      109,975    —      110,382

Cash and cash equivalents, end of period
$ 5    $ —      $ 244    $ 2    $ —      $ 161,778    $ —      $ 162,029    $ 5    $ —      $ 1,330    $ —      $ —      $ 136,375    $ —      $ 137,710

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion is intended to assist you in understanding our financial position at June 30, ~~2014,~~2015, and our results of operations for the three and six months ended June 30, ~~2014~~2015 and ~~2013.~~2014. 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, ~~2013~~2014 filed by Noble Corporation plc, a public limited company ~~registered~~incorporated under the laws of England and Wales (“Noble-UK”), and Noble Corporation, a Cayman Islands company (“Noble-Cayman”).
As a result of the spin-off of Paragon Offshore plc, a public limited company incorporated under the laws of England and Wales (“Paragon Offshore”), on August 1, 2014, the results of operations for Paragon Offshore are reported as discontinued operations in this report. The terms “earnings” and “loss” as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” refer to income/(loss) from continuing operations. Income/(loss) from continuing operations is representative of the Company’s current business operations and focus.
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, including those regarding rig demand, the offshore drilling market, oil prices, contract backlog, fleet status, our financial position, business strategy, ~~timing or results~~impairments, level of ~~acquisitions or dispositions,~~debt, repayment of debt, costs, expense management, timing or number of share repurchases, borrowings under our credit facilities or other instruments, sources of funds, completion, delivery dates and acceptance of our newbuild rigs, future capital expenditures, contract commitments, dayrates, contract amendments, commencements, ~~extension~~extensions, renewals, renegotiations or ~~renewals,~~terminations, 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, 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, timing or results of acquisitions or dispositions, 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, market conditions, legislation and regulations affecting drilling operations, costs and difficulties relating to the integration of businesses, 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, ~~2013,~~2014, 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.
~~Paragon Offshore plc Spin-off Transaction~~
On August 1, 2014, we completed the previously announced plan to reorganize our business by means of a spin-off of a wholly-owned subsidiary, Paragon Offshore plc (“Paragon Offshore”). The spin-off was accomplished through a pro rata distribution by us of all of the ordinary shares of Paragon Offshore to our shareholders. Our shareholders received one share of Paragon Offshore for every three shares of Noble owned as of July 23, 2014, the record date for the distribution. Paragon Offshore’s assets and liabilities consist of most of our standard specification drilling units and related assets, liabilities and business. Paragon Offshore’s fleet consists of five drillships, three semisubmersibles, 34 jackups and one floating production storage and offloading unit (“FPSO”). Paragon Offshore is also responsible for the Hibernia platform operations offshore Canada. In connection with the spin-off, we received approximately $1.7 billion in cash as settlement of intercompany notes issued by Paragon Offshore to Noble as consideration for the business contributed to Paragon Offshore. Noble used these funds to repay outstanding third-party debt of Noble-Cayman and its subsidiaries.
~~In connection with the separation and spin-off, we entered into a master separation agreement and other agreements described in Note 12 to our financial statements in this report.~~
Because the spin-off distribution was completed after June 30, 2014, the accounts of Paragon Offshore and its subsidiaries are reflected as continuing operations in our consolidated financial statements in this report and are part of our results of operations discussed throughout this report.
Executive Overview
We are a leading offshore drilling contractor for the oil and gas industry. We perform contract drilling services with our global fleet of mobile offshore drilling ~~units located worldwide.~~units. As of ~~August 1, 2014,~~the filing date of this Quarterly Report on Form 10-Q, our fleet ~~consists~~consisted of 15 jackups, 11nine drillships and eight semisubmersibles, ~~and 9 drillships,~~ including ~~three units under construction as follows:~~
one ~~dynamically positioned, ultra-deepwater,~~high-specification, harsh environment ~~drillships;~~jackup under construction.
We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business, and
~~two high-specification, heavy-duty, harsh environment jackups.~~
~~Our~~ the fact that all of our drilling fleet is ~~located~~dependent upon the worldwide oil and gas industry. The mobile offshore drilling units comprising our offshore rig fleet operate in a global market for contract drilling services and are often redeployed to different regions due to changing demands of our customers, which consist largely of major independent and government owned/controlled oil and gas companies throughout the world. As of June 30, 2015, our contract drilling services segment conducts operations in the United States, Brazil, Argentina, the North Sea, the Mediterranean ~~West Africa,~~Sea, the Black Sea, the Middle East, Asia and Australia. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921.
Outlook
The business environment for offshore drillers during the first six months of ~~2014~~2015 remained challenging. The rig capacity imbalance, caused in part by the addition of newbuild units and rigs completing current contracts increased while customer demand for these rigs has ~~been challenging. While~~decreased. Beginning in June 2014, the price of ~~Brent Crude,~~oil, a key factor in determining customer activity levels, ~~remained strong throughout~~began to decline rapidly, with the ~~period, there~~Brent crude price declining from approximately $112 per barrel on June 30, 2014 to approximately $63 per barrel on June 30, 2015. In this environment, operators have curtailed drilling programs, especially exploration activity, resulting in a dramatic reduction in dayrates for new contracts as well as lower rig utilization. The industry has ~~been~~responded by accelerating the pace of rig retirements and reducing the supply of marketed rigs across the worldwide fleet.
We expect that the business environment for the remainder of 2015 and 2016 will remain challenging and could potentially deteriorate further. The present level of global economic activity, high levels of US onshore oil production, the potential increase of oil supply from Iran and a ~~decrease~~lack of production cuts within OPEC are contributing to an uncertain oil price environment, leading to a persistent disruption in ~~contracting activity particularly for ultra-deepwater~~our customers’ exploration and ~~deepwater rigs with delays in projects, as operators evaluate development costs. In addition, supply~~production spending plans. Current and expected demand from customers over the remainder of 2015 and 2016 is not expected to ~~increase due~~support the current supply of offshore drilling rigs resulting from capital expenditures that the offshore drilling industry has undertaken in recent years or the continuation of capital expenditures at similar levels. We cannot give any assurances as to ~~a significant number of newbuild units that are forecast to enter the market over the next 12 months and the number of drilling contracts that will roll over during such period, particularly~~when these conditions in the ~~deepwater and ultra-deepwater segments.~~offshore drilling market will improve, or when there will be higher demand for contract drilling services or a decline in the supply of available drilling rigs. While current market conditions persist, we ~~believe the short-term outlook has downside risks, we~~will continue to ~~have confidence~~focus on operating efficiency, cost control and operating margin preservation, which could include stacking or scrapping additional drilling rigs.
We believe in the long-term fundamentals for the ~~industry. These fundamental factors include stable crude oil prices, favorable exploration~~industry, especially for those contractors with a modern fleet of high-specification rigs like ours. Also, we believe the ultimate recovery will benefit from any sustained under-investment by clients during this current market phase.
Consistent with our policy, we evaluate property and equipment for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Further declines in the offshore drilling market, or lack of recovery in market conditions, to the extent actual results ~~geographic expansion of deepwater drilling activities, a growing backlog of multi-year field development programs and greater access by~~do not meet our ~~customers to promising offshore regions, as evidenced by the Australian government releasing 30 oil and gas blocks for bidding and the energy reform legislation in Mexico that could potentially~~estimated assumptions, may lead to ~~an increase~~potential impairments in ~~drilling activity in Mexican waters.~~the future.
Results and Strategy
Our ~~goal is to be the preferred offshore drilling contractor for the oil and gas industry based upon the following core principles:~~
~~operate in a manner that provides a safe working environment for our employees while protecting the environment and our assets;~~
~~provide an attractive investment vehicle for our shareholders; and~~
~~deliver superior customer service through a diverse and technically advanced fleet operated by proficient crews.~~
~~Our~~ business strategy ~~has also focused~~focuses on ~~the active expansion of our worldwide~~ deepwater drilling and ~~high specification jackup capabilities through construction, modifications~~high-specification jackups and ~~acquisitions,~~ the deployment of our drilling ~~assets~~rigs in important oil and gas ~~producing areas throughout~~basins around the ~~world and the divestiture of our standard specification drilling units.~~world.
We have actively expanded our offshore deepwater drilling and ~~high specification~~high-specification jackup capabilities in recent years through the construction ~~and acquisition~~ of rigs. ~~As part of this technical~~Currently, we have one newbuild project remaining, the heavy-duty, harsh environment jackup,Noble Lloyd Noble, which is scheduled to commence operations under a four-year
contract in the North Sea in mid-2016. Although we plan to focus on capital preservation and ~~operational expansion,~~liquidity based on current market conditions, we also plan to continue to evaluate opportunities to enhance our fleet to achieve greater technological capability, which we believe will lead to increased drilling efficiencies and ~~the~~an enhanced ability to ~~complete~~execute the increasingly more complex drilling programs required by our customers. ~~During the first six months of 2014, we continued to execute our newbuild program, completing the following milestones:~~
• ~~we commenced operations in the first quarter of 2014 on the~~~~Noble Regina Allen~~~~, a high-specification, heavy duty, harsh environment jackup, under an 18-month contract in the North Sea;~~
• ~~we commenced operations in the first quarter of 2014 on the~~~~Noble Houston Colbert~~~~, a high-specification, heavy duty, harsh environment jackup, under a 22-month contract in Argentina;~~
• ~~we completed construction of the~~~~Noble Sam Turner~~, a high-specification, heavy duty, harsh environment jackup, which was delivered from the shipyard during the first quarter of 2014 and is scheduled to complete acceptance testing and begin operations under a two-year contract in the North Sea in the third quarter of 2014;
• ~~we completed construction of the~~~~Noble Sam Croft~~, a dynamically positioned, ultra-deepwater, harsh environment drillship, which was delivered from the shipyard during the second quarter of 2014 and is scheduled to complete acceptance testing and begin operations under a three-year contract in the U.S. Gulf of Mexico in the third quarter of 2014;
• ~~we completed construction of the~~~~Noble Tom Prosser~~, a high-specification, heavy duty, harsh environment jackup, which was delivered from the shipyard during the second quarter of 2014. This unit is currently undergoing final commissioning and crew familiarization, and is scheduled to complete acceptance testing and begin operations under an 18-month contract in Australia in the first quarter of 2015;
• ~~we continued construction of the~~~~Noble Tom Madden~~, a dynamically positioned, ultra-deepwater, harsh environment drillship, which is scheduled to be delivered from the shipyard in the third quarter of 2014. The unit will then mobilize to the U.S. Gulf of Mexico where it is expected to begin operations under a three-year contract in the first quarter of 2015;
• ~~we continued construction of the~~~~Noble Sam Hartley~~~~, a high-specification, heavy duty, harsh environment jackup, which is scheduled to be completed in the fourth quarter of 2014; and~~
~~we continued construction of our CJ70, an ultra-high specification jackup.~~
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 strategically well ~~positioned within~~positioned.
Spin-off of Paragon Offshore plc
On August 1, 2014, Noble-UK completed the ~~industry~~separation and ~~that~~spin-off of a majority of its standard specification offshore drilling business (the “Spin-Off”) through a pro rata distribution of all of the ordinary shares of its wholly-owned subsidiary, Paragon Offshore, to the holders of Noble’s ordinary shares. Our shareholders received one share of Paragon Offshore for every three shares of Noble owned as of July 23, 2014, the record date for the distribution. Through the Spin-Off, we disposed of most of our ~~newbuild activity will further strengthen~~standard specification drilling units and related assets, liabilities and business. Prior to the Spin-off, Paragon Offshore issued approximately $1.7 billion of long-term debt. We used the proceeds from this debt to repay certain amounts outstanding under our ~~position.~~commercial paper program. The results of operations for Paragon Offshore prior to the Spin-off date and incremental Spin-off related costs have been classified as discontinued operations for all periods presented in this Quarterly Report on Form 10-Q. For additional information regarding the Spin-off, see Note 2 to the consolidated financial statements included in this report.
Contract Drilling Services Backlog
We maintain a backlog (as defined below) of commitments for contract drilling services. The following table sets forth, as of June 30, ~~2014,~~2015, the amount of our contract drilling services backlog and the percent of available operating days committed for the periods ~~indicated and, because the Paragon Offshore spin-off occurred after such date, includes backlog of $2.3 billion associated with the Paragon Offshore fleet:~~indicated:

      Year Ending December 31,       Year Ending December 31,
   Total    2014⁽¹⁾ 2015 2016 2017 2018-2023    Total    2015⁽¹⁾ 2016 2017 2018 2019-2023
   (In millions)    (In millions)
Contract Drilling Services Backlog

Semisubmersibles/Drillships^{(2) (6)}
   $ 10,067       $ 1,459    $ 2,659    $ 1,956    $ 1,253    $ 2,740
Jackups⁽³⁾
   3,286       919    1,204    496    230    437
Semisubmersibles/Drillships^{(2) (5)}
   $ 6,788       $ 1,180    $ 1,811    $ 1,100    $ 701    $ 1,996
Jackups
   1,901       299    665    424    252    261








Total⁽⁴⁾⁽³⁾
   $ 13,353       $ 2,378    $ 3,863    $ 2,452    $ 1,483    $ 3,177       $ 8,689       $ 1,479    $ 2,476    $ 1,524    $ 953    $ 2,257








Percent of Available Days Committed⁽⁵⁾

Percent of Available Days Committed⁽⁴⁾

Semisubmersibles/Drillships
      72 % 59 % 40 % 24 % 9 %       78 % 58 % 35 % 24 % 14 %
Jackups
      76 % 46 % 13 % 4 % 1 %       80 % 68 % 41 % 19 % 2 %




Total
      74 % 50 % 23 % 11 % 9 %       79 % 63 % 38 % 21 % 8 %




(1) Represents a six-month period beginning July 1, ~~2014.~~2015.
(2) ~~Our~~The drilling contracts with Petróleo Brasileiro S.A. (“Petrobras”) provide an opportunity for us to earn performance bonuses based on reaching targets for downtime experienced for our rigs operating offshore Brazil. Our backlog includes an amount equal to 50 percent of potential performance bonuses for such rigs, or $74 million.
~~The drilling contracts with Royal Dutch Shell, PLC~~Royal Dutch Shell, plc (“Shell”) for theNoble Globetrotter I,Noble Globetrotter II,~~Noble Jim Thompson~~,Noble Clyde Boudreaux,~~Noble Max Smith,~~ Noble Don Taylorand the Noble Jim Day provide opportunities for us to earn performance bonuses based on key performance indicators as defined by the ~~contract.~~contracts. Our backlog includes an amount equal to 25 percent of potential performance bonuses for these rigs, or ~~$162 million.~~
~~(3)~~ Petróleos Mexicanos (“Pemex”) has the ability to cancel its drilling contracts on 30 days or less notice without Pemex’s making an early termination payment. At June 30, 2014, we had 10 rigs contracted to Pemex in Mexico, and our backlog includes approximately $308 million related to such contracts. All Pemex contracts are with Paragon Offshore.
~~(4)~~ ~~Some of our drilling contracts provide the customer with certain early termination rights.~~
~~(5)~~ Percent of available days committed is calculated by dividing the total number of days our rigs are operating under contract for such period, or committed days, by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Committed days do not include the days that a rig is stacked or the days that a rig is expected to be out of service for significant overhaul, repairs or maintenance. Percentages take into account additional capacity from the estimated dates of deployment of our newbuild rigs that are scheduled to commence operations during 2014 through 2016.
~~(6)~~ ~~Noble and a subsidiary of Shell are involved in joint ventures that own and operate both the~~~~Noble Bully I~~ ~~and the~~~~Noble Bully II~~. Under the terms of the joint venture agreements, each party has an equal 50 percent share in both vessels. As of June 30, 2014, the combined amount of backlog for these rigs totals $1.9 billion, all of which is included in our backlog. Noble’s proportional interest in the backlog for these rigs was $927approximately $117 million.
~~Our contract drilling services backlog reflects estimated future revenues attributable to both signed~~
(3) Some of our drilling contracts provide the customer with certain termination rights and, ~~letters~~in certain cases, these termination rights require minimal or no notice or financial penalties. However, as of ~~intent~~July 27, 2015, we have not received any notification of contract cancellations.
(4)
Percent of available days committed is calculated by dividing the total number of days our rigs are operating under contract for such period, or committed days, by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Committed days do not include the days that ~~we expect~~a rig is stacked or the
days that a rig is expected to ~~realize.~~be out of service for significant overhaul, repairs or maintenance. Percentages take into account additional capacity from the estimated dates of deployment of our newbuild rigs that are scheduled to commence operations during 2015 and 2016.
(5) Noble and a subsidiary of Shell are involved in joint ventures that own and operate both theNoble Bully I and theNoble Bully II. Under the terms of the joint venture agreements, each party has an equal 50 percent share in both rigs. As of June 30, 2015, the combined amount of backlog for these rigs totals approximately $1.4 billion, all of which is included in our backlog. Noble’s proportional interest in the backlog for these rigs totals $720 million.
Our contract drilling services backlog reflects estimated future revenues attributable to both signed drilling contracts and letters of intent that we expect to result in binding drilling contracts. A letter of intent is generally subject to customary conditions, including the execution of a definitive drilling contract. It is possible that some customers that have entered into letters of intent will not enter into signed drilling contracts. As of June 30, 2015, our contract drilling services backlog did not include any letters of intent.
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 due to various factors, including, but not limited to, shipyard and maintenance projects, unplanned downtime, achievement of bonuses, weather conditions and other factors that result in applicable dayrates lower than the full contractual operating dayrate. In addition, amounts included in the backlog may change because drilling contracts may be varied or modified by mutual consent or customers may exercise 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 periods for which the backlog is calculated. See Part I, Item 1A, “Risk Factors – We can provide no assurance that our current backlog of contract drilling revenue will be ultimately realized” in our Annual Report on Form 10-K for the year ended December 31, 2014.
As of June 30, 2015, Shell and Freeport-McMoRan Inc. represented approximately 61 percent and 12 percent of our backlog, respectively.
Results of Operations
For the Three Months Ended June 30, 2015 and 2014
Net income from continuing operations attributable to Noble-UK for the three months ended June 30, 2015 (the “Current Quarter”) was $159 million, or $0.64 per diluted share, on operating revenues of $794 million, compared to net income from continuing operations for the three months ended June 30, 2014 (the “Comparable Quarter”) of $140 million, or $0.54 per diluted share, on operating revenues of $804 million.
As a result of Noble-UK 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 the Current Quarter and the Comparable Quarter, would be the same as the information presented below regarding Noble-UK in all material respects, except operating income for Noble-Cayman for the three months ended June 30, 2015 and 2014 was $9 million and $24 million higher, respectively, than operating income for Noble-UK for the same periods. The operating income difference is primarily a result of executive costs directly attributable to Noble-UK for operations support and stewardship related services. In addition, we had non-recurring costs of $6 million during the Comparable Quarter related to the Spin-off, which we recognized as part of discontinued operations at the Noble-UK level.
Rig Utilization, Operating Days and Average Dayrates
Operating results from continuing operations for our contract drilling services segment are dependent on three primary metrics: rig utilization, operating days and dayrates. The following table sets forth the average rig utilization, operating days and average dayrates for our rig fleet for the three months ended June 30, 2015 and 2014:
   Average Rig
Utilization (1) Operating
Days (2) Average
Dayrates
   Three Months Ended
June 30, Three Months Ended
June 30,    Three Months Ended
June 30,
   2015 2014 2015    2014    % Change 2015    2014    % Change
Jackups
   84 % 87 % 993       870       14 % $ 171,482       $ 178,259       -4 %
Semisubmersibles
   63 % 74 % 455       742       -39 % 403,319       424,199       -5 %
Drillships
   100 % 100 % 819       637       29 % 509,783       485,686       5 %





Total
   83 % 85 % 2,267       2,249       1 % $ 340,217       $ 346,494       -2 %





(1) We define utilization for a specific period as the total number of days our rigs are operating under contract, divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet, excluding newbuild rigs under construction.
(2) Information reflects 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 due to various factors, including, but not limited to, shipyard and maintenance projects, unplanned downtime, achievement of bonuses, weather conditions and other factors that result in applicable dayrates lower than the full contractual operating dayrate. In addition, amounts included in the backlog may change because drilling contracts may be varied or modified by mutual consent or customers may exercise early termination rights 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 periods for which the backlog is calculated. See Part I, Item 1A, “Risk Factors – We can provide no assurance that our ~~current backlog of contract drilling revenue will be ultimately realized” in our Annual Report on Form 10-K for the year ended December 31, 2013.~~
~~As of June 30, 2014, we estimate Shell and Freeport-McMoRan Copper & Gold represented approximately 52 percent and 10 percent of our backlog, respectively.~~
~~Results of Operations~~
~~For the Three Months Ended June 30, 2014 and 2013~~
~~Net income attributable to Noble-UK for the three months ended June 30, 2014 (the “Current Quarter”) was $235 million, or $0.91 per diluted share, on~~rigs were operating revenues of $1.24 billion, compared to net income for the three months ended June 30, 2013 (the “Comparable Quarter”) of $177 million, or $0.69 per diluted share, on operating revenues of $1.02 billion.
~~As a result of Noble-UK conducting all of its business through Noble-Cayman~~under contract.
Contract Drilling Services
The following table sets forth the operating results from continuing operations for our contract drilling services segment for the three months ended June 30, 2015 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~~ 2014 and 2013, would be the same as the information presented below regarding Noble-UK in all material respects, except operating income for Noble-Cayman for the three months ended June 30, 2014 and 2013 was $30 million and $18 million higher than operating income for Noble-UK for the same period. The operating income difference is primarily a result of executive costs directly attributable to Noble-UK 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 three months ended June 30, 2014 and 2013 (dollars in thousands):

   Average Rig Operating Average
   Utilization (1) Days (2) Dayrates
   Three Months Ended Three Months Ended    Three Months Ended
   June 30, June 30,    June 30,
   2014 2013 2014    2013    % Change 2014    2013    % Change
Jackups
   80 % 92 % 3,272       3,594       -9 % $ 130,851       $ 116,266       13 %
Semisubmersibles
   73 % 76 % 924       970       -5 % 394,605       370,117       7 %
Drillships
   92 % 78 % 1,001       637       57 % 407,259       311,490       31 %
Other
   0 % 0 % —         —         0 % —         —         0 %





Total
   79 % 83 % 5,197       5,201       0 % $ 231,003       $ 187,537       23 %






~~(1)~~ We define utilization for a specific period as the total number of days our rigs are operating under contract, divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available 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 results for our contract drilling services segment for the three months ended June 30, 2014 and 2013 (dollars in thousands):~~
   Three Months Ended
   June 30,    Change    Three Months Ended
June 30    Change
   2014    2013    $ %    2015    2014    $    %
Operating revenues:

Contract drilling services
   $ 1,200,406       $ 975,455       $ 224,951    23 %    $ 771,307       $ 779,368       $ (8,061 )    -1 %
Reimbursables (1)
   29,291       28,000       1,291    5 %    22,248       22,243       5       0 %
Other
   —         67       (67 ) **














   $ 1,229,697       $ 1,003,522       $ 226,175    23 %    $ 793,555       $ 801,611       $ (8,056 )    -1 %














Operating costs and expenses:

Contract drilling services
   $ 577,134       $ 487,971       $ 89,163    18 %    $ 319,207       $ 370,902       $ (51,695 )    -14 %
Reimbursables (1)
   21,481       22,469       (988 ) -4 %    17,652       17,097       555       3 %
Depreciation and amortization
   249,701       209,082       40,619    19 %    153,579       148,324       5,255       4 %
General and administrative
   26,845       26,378       467    2 %    22,424       26,845       (4,421 )    -16 %
Non-recurring spin-off related costs
   1,441       —         1,441    **














   876,602       745,900       130,702    18 %    512,862       563,168       (50,306 )    -9 %














Operating income
   $ 353,095       $ 257,622       $ 95,473    37 %    $ 280,693       $ 238,443       $ 42,250       18 %














(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 Quarter as compared to the Comparable Quarter was driven by an increase in average dayrates, partially offset by a slight decrease in operating days. The 23 percent increase in average dayrates increased revenue by approximately $226 million, but the slight decrease in operating days decreased revenues by $1 million.
The increase in contract drilling services revenues relates to our drillships, jackups and semisubmersibles, which generated approximately $209 million, $10 million and $6 million more revenue, respectively, in the Current Quarter.
The increase in drillship revenues was driven by a 57 percent increase in operating days and a 31 percent increase in average dayrates, resulting in a $113 million and a $96 million increase in revenues, respectively, from the Comparable Quarter. The increase in both average dayrates and operating days was the result of the~~Noble Don Taylor, Noble Globetrotter IIand~~~~Noble Bob Douglas~~
Operating Revenues. Changes in contract drilling services revenues for the Current Quarter as compared to the Comparable Quarter were driven by a decrease in average dayrates, partially offset by an increase in operating days. The 2 percent decrease in average dayrates decreased revenues by $14 million, which was partially offset by the 1 percent increase in operating days which increased revenues by $6 million.
The decrease in contract drilling services revenues was related to our semisubmersibles, which generated $131 million less revenue than in the Comparable Quarter. This was partially offset by increased revenues related to our drillships and jackups, which generated $108 million and $15 million more revenue, respectively, in the Current Quarter.
The decrease in semisubmersible revenues was driven by a 39 percent decrease in operating days and a 5 percent decrease in average dayrates, resulting in a $122 million and a $9 million decrease in revenues, respectively, from the Comparable Quarter. The decrease in both operating days and average dayrates was primarily attributable to the retirement of theNoble Jim Thompson, theNoble Driller and theNoble Paul Wolff as a result of our decision to discontinue marketing these rigs based on current market conditions. Additionally, theNoble Max Smith and theNoble Paul Romano were operational during the Comparable Quarter but were off contract during the Current Quarter.
The increase in drillship revenues was driven by a 29 percent increase in operating days and a 5 percent increase in average dayrates, resulting in an $88 million and a $20 million increase in revenues, respectively, from the Comparable Quarter. The increase in both average dayrates and operating days was the result of the newbuilds Noble Sam Croftand theNoble Tom Madden, which commenced their contracts in July 2014 and November 2014, respectively.
The 14 percent increase in operating days on our jackups resulted in a $22 million increase in revenues from the Comparable Quarter. The increase in operating days was the result of the commencement of theNoble Sam Turner in August ~~2013, September 2013 and December 2013, respectively. Additionally, the~~~~Noble Roger Eason~~ ~~was fully operational during the Current Quarter, after receiving a reduced rate while in the shipyard to undergo its reliability upgrade project during the Comparable Quarter.~~
The 13 percent increase in jackup average dayrates resulted in a $48 million increase in revenues from the Comparable Quarter. The increase in average dayrates resulted from favorable dayrate changes on new contracts across the jackup fleet, as well as the newbuild jackups operating at favorable dayrates. The 9 percent decline in operating days resulted in a $38 million decline in revenues driven by the~~Noble Gus Androes, Noble David Tinsley, Noble Gene Rosserand~~ ~~Noble Charlie Yester~~~~, which were off contract in the Current Quarter but experienced full utilization during the Comparable Quarter, coupled with increased downtime on the~~~~Noble Percy Johns~~ ~~and~~~~Noble Scott Marks~~ ~~during the Current Quarter. These decreases were partially offset by the contract commencements of the following newbuilds:~~~~Noble Mick O’Brien, Noble Regina Allen~~~~and~~~~Noble Houston Colbert~~ ~~in November 2013, January~~ 2014 ~~and March 2014, respectively,~~ and the~~Noble Lewis Dugger, which was sold in July 2013, was fully utilized during the Comparable Quarter.~~
The 7 percent increase in average dayrates on our semisubmersibles resulted in a $23 million increase in revenues from the Comparable Quarter. The increase in average dayrates is due to favorable dayrate changes on new contracts across the semisubmersible fleet, as well as the return to work of the~~Noble Paul Romano~~ ~~during the Current Quarter. The 5 percent decline in operating days resulted in a $17 million decline in revenues driven by the~~~~Noble Paul Wolff,~~ ~~which completed its contract during the Current Quarter but experienced full utilization during the Comparable Quarter.~~
~~Operating Costs and Expenses.~~ Contract drilling services operating costs and expenses increased $89 million for the Current Quarter as compared to the Comparable Quarter. A significant portion of the increase is due to the crew-up and operating expenses for our newbuild rigs as they commenced operating under contracts, which added approximately $70 million in expense in the Current Quarter. The remaining change was primarily driven by a $12 million increase in labor costs and a $9 million increase in mobilization due to the amortization of certain rig moves and the demobilization of rigs. These increases were partially offset by a $2 million decrease in maintenance and other rig-related 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 Don Taylor, Noble Globetrotter II, Noble Mick O’Brien, Noble Bob Douglas, Noble Regina Allen~~~~and~~~~Noble Houston Colbert.~~
~~Other~~
~~The following table sets forth the operating results for our other services for the three months ended June 30, 2014 and 2013 (dollars in thousands):~~

   Three Months Ended
   June 30, Change
   2014 2013 $ %
Operating revenues:

Labor contract drilling services
   $ 8,146    $ 13,603    $ (5,457 ) -40 %
Reimbursables (1)
   2,520    260    2,260    869 %


   $ 10,666    $ 13,863    $ (3,197 ) -23 %


Operating costs and expenses:

Labor contract drilling services
   $ 6,261    $ 9,349    $ (3,088 ) -33 %
Reimbursables (1)
   979    232    747    322 %
Depreciation and amortization
   4,693    3,507    1,186    34 %
General and administrative
   235    472    (237 ) -50 %
Non-recurring spin-off related costs
   5,017    4,065    952    23 %


   17,185    17,625    (440 ) -2 %


Operating (loss)/income
   $ (6,519 ) $ (3,762 ) $ (2,757 ) 73 %


~~(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 and Costs and Expenses.~~ ~~The decrease in both revenue and expense primarily relates to the cancellation of a project with our customer, Shell, for one of its rigs that was operating under a labor contract in Alaska.~~
~~Other Income and Expenses~~
~~Non-recurring spin-off related costs.~~ Non-recurring spin-off related costs increased $2 million in the Current Quarter from the Comparable Quarter for professional fees and other costs incurred related to the Paragon Offshore spin-off transaction.
~~Interest Expense, net of amount capitalized.~~ Interest expense, net of amount capitalized, increased $12 million in the Current Quarter as compared to the Comparable Quarter. The increase is a result of a reduction in capitalized interest in the Current Quarter as compared to the Comparable Quarter due primarily to the completion of construction on three of our newbuild drillships and three of our newbuild jackups, coupled with increased borrowings outstanding under our credit facilities and commercial paper program. During the Current Quarter, we capitalized approximately 27 percent of total interest charges versus approximately 56 percent during the Comparable Quarter.
~~Income Tax Provision.~~ Our income tax provision increased $16 million in the Current Quarter driven by higher pre-tax income. The 35 percent increase in pre-tax earnings generated a $13 million increase in income tax expense. Additionally, a 6 percent increase in the effective tax rate during the Current Quarter increased income tax expense by an additional $3 million. The increase in the effective tax rate was a result of a change in the geographic mix of pre-tax earnings.
~~For the Six Months Ended June 30, 2014 and 2013~~
Net income attributable to Noble-UK for the six months ended June 30, 2014 (the “Current Period”) was $491 million, or $1.90 per diluted share, on operating revenues of $2.5 billion, compared to net income for the six months ended June 30, 2013 (the “Comparable Period”) of $327 million, or $1.27 per diluted share, on operating revenues of $2.0 billion.
As a result of Noble-UK 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 2014 and 2013, would be the same as the information presented below regarding Noble-UK in all material respects, except operating income for Noble-Cayman for the six months ended June 30, 2014 and 2013 was $59 million and $37 million higher than operating income for Noble-UK for the same period. The operating income difference is primarily a result of executive costs directly attributable to Noble-UK 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 six months ended June 30, 2014 and 2013 (dollars in thousands):

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

June 30,
   2014 2013 2014    2013    % Change 2014    2013    % Change
Jackups
   83 % 92 % 6,684       7,192       -7 % $ 127,844       $ 110,908       15 %
Semisubmersibles
   76 % 80 % 1,917       2,023       -5 % 393,577       344,568       14 %
Drillships
   92 % 80 % 1,991       1,306       52 % 400,612       313,398       28 %
Other
   0 % 0 % —         —         —      —         —         —





Total
   82 % 84 % 10,592       10,521       1 % $ 227,211       $ 180,984       26 %





~~(1)~~ We define utilization for a specific period as the total number of days our rigs are operating under contract, divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available 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 results for our contract drilling services segment for the six months ended June 30, 2014 and 2013 (dollars in thousands):~~

   Six Months Ended
   June 30, Change
   2014    2013 $ %
Operating revenues:

Contract drilling services
   $ 2,406,710       $ 1,904,192    $ 502,518    26 %
Reimbursables (1)
   65,424       48,711    16,713    34 %
Other
   1       77    (76 ) **




   $ 2,472,135       $ 1,952,980    $ 519,155    27 %




Operating costs and expenses:

Contract drilling services
   $ 1,138,265       $ 968,097    $ 170,168    18 %
Reimbursables (1)
   51,599       36,938    14,661    40 %
Depreciation and amortization
   491,275       411,701    79,574    19 %
General and administrative
   52,273       51,435    838    2 %
Non-recurring spin-off related costs
   1,761       —      1,761    **
Gain on contract extinguishments
   —         (1,800 ) 1,800    **




   1,735,173       1,466,371    268,802    18 %




Operating income
   $ 736,962       $ 486,609    $ 250,353    51 %




~~(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 average dayrates and operating days. The 26 percent increase in average dayrates increased revenues by approximately $490 million while the 1 percent increase in operating days increased revenue by $13 million.
The change in contract drilling services revenues relates to our drillships, semisubmersibles and jackups, which generated approximately $389 million, $57 million and $57 million more revenue, respectively, in the Current Period.
The increase in drillship revenues was driven by a 52 percent increase in operating days and a 28 percent increase in average dayrates, resulting in a $215 million and a $174 million increase in revenues, respectively, from the Comparable Period. The increase in both average dayrates and operating days was the result of the~~Noble Don Taylor, Noble Globetrotter IIand~~~~Noble Bob Douglas~~~~, which commenced their contracts in August 2013, September 2013 and December 2013, respectively. Additionally, the~~~~Noble Roger Eason~~~~was fully operational during the Current Period, after receiving a reduced rate while in the shipyard to undergo its reliability upgrade project for a portion of the Comparable Period.~~
The 14 percent increase in average dayrates on our semisubmersibles resulted in a $94 million increase in revenues from the Comparable Period. The increase in average dayrates is due to favorable dayrate changes on new contracts across the semisubmersible fleet, as well as the~~Noble Paul Romano~~ ~~returning to work during the Current Period. The 5 percent decline in operating days resulted in a $37 million decline in revenues driven by the~~~~Noble Paul Wolff~~~~and~~~~Noble Homer Ferrington,~~ ~~which completed their respective contracts during the Current Period but experienced full utilization during the Comparable Period.~~
The 15 percent increase in jackup average dayrates resulted in a $113 million increase in revenues from the Comparable Period. The increase in average dayrates resulted from favorable dayrate changes on new contracts across the jackup fleet, as well as the newbuild jackups operating at favorable dayrates. The 7 percent decline in operating days resulted in a $56 million decline in revenues driven by the~~Noble Gus Androes, Noble Gene Rosser, Noble Charlie Yesterand~~Noble David Tinsley, which ~~were~~was fully operational during the Current Quarter but was off contract ~~for a portion of~~during the Comparable Quarter. This was partially offset by theNoble Mick O’Brien, which was off contract during the Current ~~Period~~Quarter but experienced full utilization during the Comparable ~~Period and increased downtime~~Quarter. The 4 percent decline in average dayrates resulted in a $7 million decrease in revenues driven by unfavorable dayrate changes on ~~the~~~~Noble Percy Johns~~ ~~and~~~~Noble Scott Marks~~ ~~during~~contracts across the ~~Current Period. Additionally, the~~~~Noble Lewis Dugger~~~~, which was sold in July 2013, was fully utilized during the Comparable Period. These decreases were partially offset by the contract commencements of the~~~~Noble Mick O’Brien, Noble Regina Allen~~~~and~~~~Noble Houston Colbert~~ ~~in November 2013, January 2014 and March 2014, respectively.~~jackup fleet.
Operating Costs and Expenses. Contract drilling services operating costs and expenses ~~increased $170~~decreased $52 million for the Current ~~Period~~Quarter as compared to the Comparable ~~Period. A significant portion of the increase was due to the crew-up~~Quarter. Crew-up and operating expenses for our newbuild rigs as they commenced, or prepared to commence, operating under contracts ~~which~~ added approximately ~~$144~~$41 million in ~~expenses during~~expense in the Current ~~Period.~~Quarter. This was partially offset by decreased costs of $34 million related to the retirement of theNoble Jim Thompson, theNoble Driller and theNoble Paul Wolff and $34 million related to idle or stacked rigs. The remaining ~~change~~$25 million decrease in costs was primarily driven by a ~~$25~~$27 million ~~increase in labor, the majority of which is due to rigs returning to work during the Current Period and a $16 million increase~~decrease in mobilization ~~due~~and transportation expenses related to ~~the amortization of~~ certain rig moves during the Comparable Quarter and ~~the demobilization of rigs. These increases were~~a $2 million decrease in insurance costs related to our policy renewal in March 2015, which was partially offset by a ~~$15~~$4 million ~~decrease~~increase in ~~maintenance and~~other rig-related ~~expense.~~expenses.
The increase in depreciation and amortization in the Current ~~Period~~Quarter from the Comparable ~~Period~~Quarter was primarily attributable to assets placed in service, including the~~Noble Don Taylor, Noble Globetrotter II, Noble Mick O’Brien, Noble Bob Douglas, Noble Regina Allenand~~~~Noble Houston Colbert.~~ newbuilds noted above.
Other Income and Expenses
General and administrative expenses. Overall, general and administrative expenses decreased $5 million in the Current Quarter as compared to the Comparable Quarter primarily as a result of decreased legal and other professional fees.
Interest Expense, net of amount capitalized. Interest expense, net of amount capitalized, increased $21 million in the Current Quarter as compared to the Comparable Quarter. The increase is a result of the $1.1 billion of senior notes issued in March 2015, coupled with a reduction in capitalized interest in the Current Quarter as compared to the Comparable Quarter due primarily to the completion of construction on two of our newbuild drillships and two of our newbuild jackups. During the Current Quarter, we capitalized approximately 10 percent of total interest charges versus approximately 27 percent during the Comparable Quarter.
Income Tax Provision. Our income tax provision increased $5 million in the Current Quarter. A 10 percent increase in pre-tax earnings generated a $3 million increase in income tax expense. Additionally, a 5 percent increase in the worldwide effective tax rate generated a $2 million increase in income tax expense. The increase in the worldwide effective tax rate was primarily a result of a change in the geographic mix of pre-tax earnings.
Discontinued Operations. Net income from discontinued operations for the Comparable Quarter was $94 million. Revenues reported within discontinued operations were $437 million during the Comparable Quarter. Operating income included within discontinued operations was $111 million during the Comparable Quarter. There was no activity related to discontinued operations during the Current Quarter.
For the Six Months Ended June 30, 2015 and 2014
Net income from continuing operations attributable to Noble-UK for the six months ended June 30, 2015 (the “Current Period”) was $337 million, or $1.36 per diluted share, on operating revenues of $1.6 billion, compared to net income from continuing operations for the six months ended June 30, 2014 (the “Comparable Period”) of $295 million, or $1.14 per diluted share, on operating revenues of $1.6 billion.
As a result of Noble-UK 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 the Current Period and the Comparable Period, would be the same as the information presented below regarding Noble-UK in all material respects, except operating income for Noble-Cayman for the six months ended June 30, 2015 and 2014 was $24 million and $41 million higher, respectively, than operating income for Noble-UK for the same periods. The operating income difference is primarily a result of executive costs directly attributable to Noble-UK for operations support and stewardship related services. In addition, we had non-recurring costs of $19 million during the Comparable Period related to the Spin-off, which we recognized as part of discontinued operations at the Noble-UK level.
Rig Utilization, Operating Days and Average Dayrates
Operating results from continuing operations 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 six months ended June 30, 2015 and 2014:
   Average Rig
Utilization (1) Operating
Days (2) Average
Dayrates
   Six Months Ended
June 30, Six Months Ended
June 30,    Six Months Ended
June 30,
   2015 2014 2015    2014    % Change 2015    2014    % Change
Jackups
   88 % 92 % 1,983       1,740       14 % $ 172,090       $ 170,672       1 %
Semisubmersibles
   64 % 78 % 948       1,556       -39 % 397,839       421,250       -6 %
Drillships
   100 % 100 % 1,629       1,267       29 % 511,014       471,753       8 %
Other
   N/A    0 % N/A       —         ** N/A       —         **





Total
   85 % 88 % 4,560       4,563       0 % $ 340,089       $ 339,682       0 %





(1) We define utilization for a specific period as the total number of days our rigs are operating under contract, divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet, excluding newbuild rigs under construction.
(2) Information reflects the number of days that our rigs were operating under contract.
** Not a meaningful percentage.
Contract Drilling Services
The following table sets forth the operating results from continuing operations for our ~~other~~contract drilling services segment for the six months ended June 30, ~~2014~~2015 and ~~2013~~2014 (dollars in thousands):

   Six Months Ended
   June 30, Change    Six Months Ended
June 30,    Change
   2014 2013 $ %    2015    2014    $    %
Operating revenues:

Labor contract drilling services
   $ 16,358    $ 34,657    $ (18,299 ) -53 %
Contract drilling services
   $ 1,550,668       $ 1,550,005       $ 663       0 %
Reimbursables (1)
   3,040    723    2,317    320 %    47,229       46,793       436       1 %










   $ 19,398    $ 35,380    $ (15,982 ) -45 %    $ 1,597,897       $ 1,596,798       $ 1,099       0 %










Operating costs and expenses:

Labor contract drilling services
   $ 12,487    $ 21,598    $ (9,111 ) -42 %
Contract drilling services
   $ 640,957       $ 723,782       $ (82,825 )    -11 %
Reimbursables (1)
   1,467    685    782    114 %    37,809       38,600       (791 )    -2 %
Depreciation and amortization
   9,024    7,044    1,980    28 %    301,787       290,212       11,575       4 %
General and administrative
   444    984    (540 ) -55 %    46,362       52,273       (5,911 )    -11 %
Non-recurring spin-off related costs
   17,102    8,027    9,075    113 %










   40,524    38,338    2,186    6 %    1,026,915       1,104,867       (77,952 )    -7 %










Operating income
   $ (21,126 ) $ (2,958 ) $ (18,168 ) 614 %    $ 570,982       $ 491,931       $ 79,051       16 %










(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~~Revenues. Changes in contract drilling services revenues for the Current Period as compared to the Comparable Period were driven by a slight increase in average dayrates, partially offset by a slight decrease in operating days. The slight increase in average dayrates increased revenues by approximately $2 million, while the slight decrease in operating days decreased revenues by $1 million.
The marginal increase in contract drilling services revenues relates to our drillships and jackups, which generated approximately $235 million and $44 million more revenue, respectively, in the Current Period. This was partially offset by decreased revenues related to our semisubmersibles, which declined $278 million from the Comparable Period.
The increase in drillship revenues was driven by a 29 percent increase in operating days and an 8 percent increase in average dayrates, resulting in a $171 million and a $64 million increase in revenues, respectively, from the Comparable Period. The increase in both average dayrates and operating days was the result of the newbuilds Noble Sam Croftand theNoble Tom Madden, which commenced their contracts in July 2014 and November 2014, respectively.
The increase in jackup revenues was driven by a 14 percent increase in operating days and a 1 percent increase in average dayrates, resulting in a $41 million and a $3 million increase in revenues, respectively, from the Comparable Period. The increase in both operating days and average dayrates was the result of the commencements of the following newbuilds:Noble Regina Allen, Noble Houston Colbertand Noble Sam Turner in January 2014, March 2014 and August 2014, respectively. This was partially offset by theNoble Mick O’Brien, which was off contract during the Current Period but experienced full utilization during the Comparable Period.
The decrease in semisubmersible revenues was driven by a 39 percent decline in operating days and a 6 percent decline in average dayrates, resulting in a $256 million and a $22 million decrease in revenues, respectively, from the Comparable Period. The decrease in both operating days and average dayrates was primarily attributable to the retirement of theNoble Jim Thompson, theNoble Driller and theNoble Paul Wolff during the Current Period as a result of our decision to discontinue marketing these rigs based on current market conditions. Additionally, theNoble Max Smith and Noble Paul Romano were operational during the Comparable Period but were off contract during the Current Period.
Operating Costs and Expenses. ~~The change in both revenue~~Contract drilling services operating costs and ~~expense primarily relates~~expenses decreased $83 million for the Current Period as compared to the ~~cancellation of a project with~~Comparable Period. Crew-up and operating expenses for our ~~customer, Shell, for one of its~~newbuild rigs as they commenced, or prepared to commence, operating under contracts added approximately $93 million in expense in the Current Period. This was partially offset by decreased costs of $74 million related to the retirement of theNoble Jim Thompson, theNoble Driller and theNoble Paul Wolff and $54 million related to idle or stacked rigs. The remaining $48 million decrease in costs was primarily driven by a $32 million decrease in mobilization and transportation expenses related to certain rig moves during the Comparable Period, an $8 million decrease in other rig-related expenses, a $5 million decrease in labor ~~contract~~costs and a $3 million decrease in ~~Alaska during 2013.~~operations support.
The increase in depreciation and amortization in the Current Period from the Comparable Period was primarily attributable to assets placed in service, including the newbuilds noted above.
Other Income and Expenses
~~Non-recurring spin-off related costs.~~General and administrative expenses. ~~Non-recurring spin-off related costs increased $11~~Overall, general and administrative expenses decreased $6 million in the Current Period ~~from~~as compared to the Comparable Period ~~for professional fees~~primarily as a result of decreased legal and other ~~costs incurred related to the Paragon Offshore spin-off transaction.~~professional fees.
Interest Expense, net of amount capitalized. Interest expense, net of amount capitalized, increased ~~$25~~$30 million in the Current Period as compared to the Comparable Period. The increase is a result of ~~lower~~the $1.1 billion of senior notes issued in March 2015, coupled with a reduction in capitalized interest in the Current Period as compared to the Comparable Period due primarily to the completion of construction on ~~three of our newbuild drillships and three~~four of our newbuild jackups ~~coupled with increased borrowings outstanding under~~and two of our ~~credit facilities and commercial paper program.~~newbuild drillships. During the Current Period, we capitalized approximately 2610 percent of total interest charges versus approximately 5426 percent during the Comparable Period.
Income Tax Provision. Our income tax provision increased ~~$36~~$13 million in the Current ~~Period driven by higher pre-tax income. The 48~~Period. A 13 percent increase in pre-tax earnings generated a ~~$34~~$9 million increase in income tax expense. Additionally, a 25 percent increase in the worldwide effective tax rate ~~during the Current Period increased~~generated a $4 million increase in income tax ~~expense by an additional $2 million.~~expense. The increase in the worldwide effective tax rate was primarily a result of a change in the geographic mix of pre-tax ~~earnings.~~earnings offset by favorable changes in discrete items.
Discontinued Operations. Net income from discontinued operations for the Comparable Period was $196 million. Revenues reported within discontinued operations were $893 million during the Comparable Period. Operating income included within discontinued operations was $232 million during the Comparable Period. There was no activity related to discontinued operations during the Current Period.
Liquidity and Capital Resources
Overview
Cash flows from discontinued operations are combined with cash flows from continuing operations within each cash flow statement category on our Consolidated Statements of Cash Flows for the six months ended June 30, 2014 included in this Quarterly Report on Form 10-Q. Net cash from operating activities ~~for~~was $768 million in the Current Period and $1.0 billion in the Comparable Period. We had working capital of $56 million and $260 million at June 30, 2015 and December 31, 2014, respectively.
Net cash used in investing activities in the Current Period was ~~$1.0~~$209 million as compared to $1.2 billion ~~and $646~~in the Comparable Period. The variance primarily relates to lower newbuild expenditures, coupled with expenditures for Paragon Offshore in the Comparable Period.
Net cash used in financing activities in the Current Period was $380 million as compared to net cash provided from financing activities of $222 million in the Comparable Period. The ~~increase in net cash from operating activities in~~variance primarily relates to the Current Period ~~was primarily attributable~~proceeds of $1.1 billion from the senior notes offering, which we used to ~~a significant increase in net income~~repay indebtedness outstanding on our credit facilities and ~~favorable collections~~commercial paper program, while the Comparable Period includes the repayment of ~~accounts receivable. We had working capital~~our $250 million 7.375% Senior Notes. Additionally, during the Current Period we repurchased
6.2 million shares as part of ~~$511 million and $339 million at June 30, 2014 and December 31, 2013, respectively.~~our share repurchase program. Our total debt as a percentage of total debt plus equity ~~increased to 38.8~~was 39.7 percent at June 30, ~~2014 from 38.0~~2015 as compared to 40.1 percent at December 31, ~~2013, primarily~~2014. Although we issued $1.1 billion senior notes in March 2015, this amount was substantially offset by a net reduction in indebtedness outstanding on our Credit Facilities and commercial paper program during the Current Period as a result of ~~an increase in commercial paper outstanding during~~ the ~~Current Period.~~application of proceeds from the senior note offering.
Our principal sources of capital in the Current Period were our $1.1 billion senior notes offering in March 2015 and the cash generated from operating activities noted ~~above and borrowings under our commercial paper program.~~above. Cash generated during the Current Period was primarily used ~~to fund~~for the following:
repay indebtedness outstanding under our Credit Facilities and commercial paper program;
normal recurring operating expenses;
payment of our quarterly dividends;
repurchase 6.2 million shares; and
capital ~~expenditure program.~~
expenditures.
Our currently anticipated cash flow needs, both in the short-term and long-term, may include the following:

~~committed capital expenditures, including expenditures for newbuild projects currently underway;~~
normal recurring operating expenses;

committed and discretionary capital ~~expenditures, including various capital upgrades;~~expenditures;

~~non-recurring spin-off related costs;~~repayment of maturing debt;

payments of dividends; and

~~repayment~~repurchase of ~~maturing debt.~~shares.
We currently expect to fund these cash flow needs with cash generated by our operations, cash on hand, borrowings under our existing or future credit facilities and commercial paper program, potential 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 available from these sources, and we may seek additional sources of liquidity and/or delay or cancel certain discretionary capital expenditures or other payments as necessary.
At June 30, ~~2014,~~2015, we had a total contract drilling services backlog of approximately ~~$13.4~~$8.7 billion. Our backlog as of June 30, ~~2014 reflects~~2015 includes a commitment of 7479 percent of available days for the remainder of ~~2014~~2015 and 5063 percent of available days for ~~2015.~~2016. For additional information regarding our backlog, see “Contract Drilling Services Backlog.”
Capital Expenditures
~~Our primary use of available liquidity during 2014 is for capital expenditures.~~ Capital expenditures, including capitalized interest, totaled $170 million and $1.2 billion for the six months ended June 30, 2015 and 2014, ~~and June 30, 2013,~~ respectively.
At June 30, 2014, we had three rigs under construction, and capital expenditures, excluding capitalized interest, for new construction during the first six months of 2014 totaled $836 million, as follows (in millions):

Rig type/name

Currently under construction

Drillships

Noble Tom Madden
   $ 32.0
Jackups

Noble Sam Hartley
   4.6
Noble Jackup VII (CJ70-Mariner)
   4.3
Recently completed construction projects

Noble Sam Croft
   353.2
Noble Tom Prosser
   141.9
Noble Sam Turner
   140.8
Noble Houston Colbert
   134.9
Noble Globetrotter II
   10.2
Noble Bob Douglas
   9.3
Noble Don Taylor
   3.2
Noble Regina Allen
   1.3
Noble Mick O’Brien
   0.5
Other
   0.1


Total Newbuild Capital Expenditures
   $ 836.3


~~In addition to the newbuild expenditures noted above, capital~~ Capital expenditures during the first six months of ~~2014~~2015 consisted of the following:

$~~353~~135 million for major projects, subsea related expenditures and upgrades and replacements to drilling equipment; ~~and~~
• $23 million on newbuilds, including costs for theNoble Lloyd Noble and trailing costs on our recently completed newbuilds; and

$2712 million in capitalized interest.
Our total capital expenditure estimate for ~~2014~~2015 is approximately ~~$2.2 billion.~~$503 million. In addition, we anticipate ~~incurring~~recording capitalized interest, which may fluctuate as a result of the timing of completion of ongoing projects.
In connection with our capital expenditure program, as of June 30, ~~2014,~~2015, we had outstanding commitments, including shipyard and purchase commitments, for approximately ~~$1.3 billion,~~$697 million, all of which we expect to spend ~~approximately $932 million~~ 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 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 ~~$97~~$93 million (or $0.375 per share), was declared on April ~~25, 2014~~24, 2015 and paid on May ~~15, 2014~~14, 2015 to holders of record on May 5, 2014. This payment represents the final tranche ($0.25 per share) of our previously approved annual dividend payment to shareholders, as well as an additional $0.125 per share declared by the Board of Directors in accordance with our current dividend policy.4, 2015.
On July ~~25, 2014,~~24, 2015, our Board of Directors approved the payment of a quarterly dividend to shareholders of $0.375 per share. The payment is expected to total approximately ~~$97~~$93 million, based on the number of shares currently outstanding.
The declaration and payment of dividends require authorization of the Board of Directors of Noble-UK and such dividends on issued share capital may be paid only out of Noble-UK’s “distributable reserves” on its statutory balance sheet. Noble-UK is not permitted to pay dividends out of share capital, which includes share premiums. The amount, or continuance, of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual restrictions, anticipated capital needs and other factors deemed relevant by our Board of ~~Directors.~~Directors and we may decide to change our dividend at any time.
Share Repurchases
In December 2014, we received shareholder approval to repurchase up to 37,000,000 additional ordinary shares, or approximately 15 percent of our outstanding ordinary shares at the time of the shareholder approval. Any repurchases are expected to be funded using cash on hand, cash from operations or short-term borrowings under our credit facilities. The authority to make such repurchases will expire on the later of April 2016 or the end of the Company’s 2016 annual general meeting of shareholders, at which time we could seek shareholder approval for further repurchases.
In January 2015, we repurchased 6.2 million of our ordinary shares at an average price of $16.10 per share, excluding commissions and stamp tax. Including these items, the average price paid per share during January 2015 was $16.21. There can be no assurance as to the timing or amount of any such further repurchases. However, we intend to take a cautious approach to future share repurchases at least until market conditions in the offshore drilling business stabilize.
Credit Facilities and Senior Unsecured Notes
Credit Facilities and Commercial Paper Program
We currently have ~~three separate~~two credit facilities with an aggregate maximum ~~available~~ capacity of ~~$2.9~~$2.7 billion, which are comprised of a five year $2.4 billion senior unsecured credit facility that matures in January 2020 and a $225 million 364-day senior unsecured credit facility that matures in January 2016 (together, ~~referred to as~~ the “Credit Facilities”).
We have ~~established~~ a commercial paper program, which allows us to issue up to ~~$2.7~~$2.4 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program are supported by the unused capacity under our Credit Facilities and, therefore, are classified as long-term on our Consolidated Balance Sheet. ~~Outstanding~~The outstanding amounts of commercial paper ~~reduces~~reduce availability under our Credit Facilities.
Our total debt related to the Credit Facilities and commercial paper program was ~~$2.3 billion at June 30, 2014 as compared to $1.6~~$1.1 billion at December 31, ~~2013.~~2014. At June 30, ~~2014,~~2015, we had ~~approximately $631 million~~no amounts outstanding under the Credit Facilities and commercial paper program, therefore, we had $2.7 billion of available capacity under the Credit Facilities.
The ~~Credit Facilities provide~~$2.4 billion facility provides us with the ability to issue up to ~~$375~~$500 million in letters of ~~credit in the aggregate.~~credit. The issuance of letters of credit under the ~~Credit Facilities~~facility reduces the amount available for borrowing. At June 30, ~~2014,~~2015, we had no letters of credit issued under the ~~Credit Facilities.~~facility.
Senior Unsecured Notes
Our total debt related to senior unsecured notes was ~~$3.7~~$4.8 billion at June 30, ~~2014~~2015 as compared to ~~$4.0~~$3.7 billion at December 31, ~~2013.~~2014. The ~~decrease~~increase in senior unsecured notes outstanding is a result of the ~~maturity~~issuance of $1.1 billion aggregate principal amount of senior notes in March 2015, which we issued through our indirect wholly-owned subsidiary, Noble Holding International Limited (“NHIL”). These senior notes were issued in three separate tranches, consisting of $250 million ~~7.375%~~of 4.00% Senior Notes ~~during March 2014,~~due 2018, $450 million of 5.95% Senior Notes due 2025, and $400 million of 6.95% Senior Notes due 2045. The weighted average coupon of all three tranches is 5.87%. The interest rate on these senior notes may be increased if the credit rating applicable to the notes is downgraded below certain specified levels. The net proceeds of approximately $1.08 billion, after expenses, were used to repay indebtedness outstanding under our Credit Facilities and commercial paper program.
On August 1, 2015, our $350 million 3.45% Senior Notes matured, which ~~was~~we repaid using ~~issuances~~cash on hand. We have, therefore, classified these balances as “Current maturities of long-term debt” on our Consolidated Balance Sheet as of June 30, 2015.
Our $300 million 3.05% Senior Notes mature during the first quarter of 2016. We anticipate using availability under our ~~commercial paper program.~~Credit Facilities to repay the outstanding balances; therefore, we continue to report these balances as long-term as of June 30, 2015.
Covenants
The Credit Facilities ~~and commercial paper program~~ are guaranteed by ~~our indirect wholly-owned subsidiaries, Noble Holding International Limited (“NHIL”)~~NHIL and Noble Holding Corporation (“NHC”). The covenants and events of default under the two 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 June 30, ~~2014,~~2015, our ratio of debt to total tangible capitalization was approximately ~~0.39.~~0.40. We were in compliance with all covenants under the Credit Facilities as of June 30, ~~2014.~~2015.
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 entering into sale and lease-back transactions. At June 30, ~~2014,~~2015, we were in compliance with all of our debt covenants. We continually monitor compliance with the covenants under our notes and expect to remain in compliance during the remainder of ~~2014.~~2015.
~~Other~~
At June 30, 2014, we had letters of credit of $201 million and performance and temporary import bonds totaling $110 million supported by surety bonds outstanding. Certain of our subsidiaries issue guarantees to the temporary import status of rigs or equipment imported into certain countries in which we operate. These guarantees are issued in-lieu of payment of custom, value added or similar taxes in those countries.
New Accounting Pronouncements
In April 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-08, which amends FASB Accounting Standards Codification (“ASC”) Topic 205, “Presentation of Financial Statements” and ASC Topic 360, “Property, Plant, and Equipment.” This ASU alters the definition of a discontinued operation to cover only asset disposals that are a strategic shift with a major effect on an entity’s operations and finances, and calls for more extensive disclosures about a discontinued operation’s assets, liabilities, income and expenses. The guidance is effective for all disposals, or classifications as held-for-sale, of components of an entity that occur within annual periods beginning on or after December 15, 2014. ~~We are still evaluating what impact, if any,~~This standard was not early adopted in connection with the Spin-Off. The adoption of this guidance ~~will~~did not have a material impact on our financial condition, results of operations, cash flows or financial disclosures.
In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, “Revenue from Contracts with Customers.” The amendments in this ASU are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices and improve disclosure
requirements. ~~The amendments in this accounting standard update are~~Under the deferred adoption date, the new guidance will be effective for interim and annual reporting periods beginning after December 15, ~~2016.~~2017. 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.
In June 2014, the FASB issued ASU No. 2014-12, which amends ASC Topic 718, “Compensation-Stock Compensation.” The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. The guidance is effective for annual periods beginning after December 15, 2015. The guidance can be applied prospectively for all awards granted or modified after the effective date or retrospectively to all awards with performance targets outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. 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.
In August 2014, the FASB issued ASU No. 2014-15, which amends ASC Subtopic 205-40, “Disclosure of Uncertainties about an Entity’s Ability to continue as a Going Concern.” The amendments in this ASU provide guidance related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
In January 2015, the FASB issued ASU No. 2015-01, which amends ASC Subtopic 225-20, “Income Statement – Extraordinary and Unusual Items.” The amendment in this ASU eliminates from GAAP the concept of extraordinary items. The amendments in this update are effective for interim and annual reporting periods beginning after December 15, 2015. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
In February 2015, the FASB issued ASU No. 2015-02 which amends ASC Subtopic 810, “Consolidations.” This amendment affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities; eliminate the presumption that a general partner should consolidate a limited partnership; affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. The standard may be applied retrospectively or through a cumulative effect adjustment to retained earnings as of the beginning of the year of adoption. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
In April 2015, the FASB issued ASU No. 2015-03 which amends ASC Subtopic 835-30, “Interest – Imputation of Interest.” The guidance requires debt issuance costs to be presented in the balance sheet as a direct reduction from the associated debt liability. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. We are evaluating what impact the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
In April 2015, the FASB issued ASU No. 2015-04 which amends ASC Topic 715, “Compensation – Retirement Benefits.” The guidance gives an employer whose fiscal year end does not coincide with a calendar month end the ability, as a practical expedient, to measure defined benefit retirement obligations and related plan assets as of the month end that is closest to its fiscal year end. The ASU also provides a similar practical expedient for interim remeasurements of significant events. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted. We are 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~~due to a change in the value of a financial instrument as a result of fluctuations in interest rates, currency exchange rates or equity prices, as further described below.
Interest Rate Risk
We are subject to market risk exposure related to changes in interest rates on borrowings under the Credit Facilities and commercial paper program. 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 June 30, ~~2014,~~2015, we had ~~$2.3 billion in~~no borrowings outstanding under our Credit Facilities and commercial paper program, which is supported by the Credit Facilities. ~~Assuming~~
Access to our ~~current level~~commercial paper program is dependent upon our credit ratings. A decline in our credit ratings below investment grade would prohibit us from accessing the commercial paper market. If we were unable to access the commercial paper market, we would likely transfer any outstanding borrowings to our Credit Facilities. Our Credit Facilities have interest rates that are generally higher than those found in the commercial paper market, which would result in increased interest expense in the future.
In addition, our Credit Facilities and certain of ~~debt, a change in LIBOR~~our senior unsecured notes have provisions which vary the applicable interest rates based upon our credit ratings. If our credit ratings were to decline to certain specified levels, the interest expense under our Credit Facilities and certain of ~~1 percent~~our senior unsecured notes would ~~increase our interest charges by approximately $23 million per year.~~increase.
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 total debt was ~~$6.3~~$4.6 billion and ~~$5.7~~$4.5 billion at June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, respectively. The ~~increase~~senior notes issuance of $1.1 billion in ~~fair value~~March 2015 was ~~primarily~~substantially offset by a ~~result of increased~~reduction in indebtedness outstanding under our Credit Facilities and commercial paper ~~program coupled with changes in interest rates, partially offset by the repayment of our $250 million fixed rate senior note.~~program.
Foreign Currency Risk
Although we are a UKU.K. company, we define foreign currency as any non-U.S. denominated currency. 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 other 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 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.
Our North Sea, ~~Mexico~~Australian and ~~Brazil~~Brazilian 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, which settle monthly in the operations’ respective local currencies. All of these contracts have a maturity of less than 12 months. The forward contract settlements in the remainder of ~~2014~~2015 represent approximately 3560 percent of these forecasted local currency requirements. The notional amount of the forward contracts outstanding, expressed in U.S. dollars, was approximately ~~$192~~$47 million at June 30, ~~2014.~~2015. Total unrealized ~~gains~~losses related to these forward contracts were approximately $7$0.1 million as of June 30, ~~2014~~2015 and were recorded as part of AOCL. A 10 percent change in the exchange rate for the local currencies would change the fair value of these forward contracts by approximately ~~$19~~$5 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 ~~Services Inc.~~Employees’ 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 (“IRC”) of 1986. Therefore, we maintain an unfunded, nonqualified excess benefit plan designed to maintain benefits for specified employees at the formula level in the qualified salary U.S. plan. We refer to the qualified U.S. plans and the excess benefit plan collectively as the “U.S. 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~~Resources Limited, both indirect, wholly-owned subsidiaries of Noble-UK, maintains a pension plan that covers all of its salaried, non-union employees, whose most recent date of employment is prior to April 1, 2014 (collectively referred to as our “non-U.S. plans”). Benefits are based on credited service and employees’ compensation, 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-UK, and James A. MacLennan, Senior Vice President and Chief Financial Officer of Noble-UK, have evaluated the disclosure controls and procedures of Noble-UK 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-UK’s disclosure controls and procedures were effective as of June 30, ~~2014.~~2015. Noble-UK’s disclosure controls and procedures are designed to ensure that information required to be disclosed by Noble-UK 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 June 30, ~~2014.~~2015. 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-UK’s or Noble-Cayman’s internal control over financial reporting that occurred during the quarter ended June 30, ~~2014~~2015 that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of each of Noble-UK or Noble-Cayman, respectively.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information regarding legal proceedings is set forth in Notes 46 and 1214 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~~
~~Risk Factors Relating to Our Business~~
The risk factor below updates and supplements 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, 2013, and should be considered together with the risk factors described in that report.
~~Recent changes in tax laws will, and possible future changes in tax laws or interpretations may, increase our tax rate.~~
We operate through various subsidiaries in numerous countries throughout the world. Consequently, we are subject to changes in tax laws, treaties or regulations or the interpretation or enforcement thereof in the United Kingdom, the U.S. or jurisdictions in which we or any of our subsidiaries operate or are incorporated. For example, in July 2014, the UK government issued legislation that restricts deductions on certain related party transactions, such as those relating to the bareboat charter agreements used in connection with our UK continental shelf operations. The legislation, which became effective retroactively to April 1, 2014, will result in an increase in the effective tax rate reducing our net income on our consolidated operations and will be shown in our statement of operations beginning in the third quarter of 2014.
Tax laws and regulations are highly complex and subject to interpretation. Our income tax expense is based upon our interpretation of the tax laws in effect in various countries at the time that the expense was incurred. If these laws, treaties or regulations change or other taxing authorities do not agree with our assessment of the effects of such laws, treaties and regulations, this could have a material adverse effect on us, resulting in a higher effective tax rate on our worldwide earnings or a reclassification of the tax impact of our significant corporate restructuring transactions.
In addition, the manner in which our shareholders are taxed on distributions on, and dispositions of, our shares could be affected by changes in tax laws, treaties or regulations or the interpretation or enforcement thereof in the United Kingdom, the U.S. or other jurisdictions in which our shareholders are resident. Any such changes could result in increased taxes for our shareholders and affect the trading price of our shares.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Under UK law, the company is only permitted to purchase its own shares by way of an ~~“off market~~“off-market purchase” in a plan approved by shareholders. ~~Prior~~In December 2014, we received shareholder approval to repurchase up to 37,000,000 ordinary shares, or approximately 15 percent of our ~~redomiciliation to the UK, a resolution was adopted by the Board of Directors authorizing the repurchase of 6,769,891~~outstanding ordinary shares during the five-year period commencing on the date of the redomiciliation. This number of shares corresponds to the number of shares that Noble Corporation, a Swiss corporation, had authority to repurchase at the time of the ~~redomiciliation.~~shareholder approval. Any repurchases are expected to be funded using cash on hand, cash from operations or short-term borrowings under our Credit Facilities. The authority to make such repurchases will expire on the later of April 2016 or the end of the Company’s 2016 annual general meeting of shareholders, at which time we could seek shareholder approval for further repurchases. The company may only fund the purchase of its own shares out of distributable reserves or the proceeds of a new issue of shares made expressly for that purpose. The company currently has adequate distributable reserves to fund its currently approved repurchase plan. If any premium above the nominal value of the purchased shares is paid, it must be paid out of distributable reserves. Any shares purchased by the company out of distributable reserves may be held as treasury ~~shares.~~shares or cancelled at the company’s election. During the ~~six~~three months ended June 30, ~~2014,~~2015, there were no repurchases by Noble-UK of its shares.
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 plc, a public limited company ~~registered~~incorporated under the laws of England and Wales

/s/ David W. Williams

August ~~8, 2014~~6, 2015
David W. Williams
Date
Chairman, President and Chief Executive Officer
~~(Principal Executive Officer)~~
~~Date~~
(Principal Executive Officer)
/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

August ~~8, 2014~~6, 2015
David W. Williams
~~President and Chief Executive Officer~~
~~(Principal Executive Officer)~~
Date
President and Chief Executive Officer
(Principal Executive Officer)
/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~~ (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 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).
    2.3    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).
    2.4    Master Separation Agreement, dated as of July 31, 2014, between Noble-Cayman and Paragon Offshore plc. (filed as Exhibit 2.1 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).
    3.1    Composite Copy of Articles of Association of Noble-UK, as of June 10, 2014 (filed as Exhibit 3.1 to Noble-UK’s ~~Current~~Quarterly Report on Form ~~8-K filed on November 20, 2013~~10-Q for the quarter ended September 30, 2014 and incorporated herein by reference).
    3.2    Memorandum and Articles of Association of Noble-Cayman (filed as Exhibit 3.1 to Noble-Cayman’s Current Report on Form 8-K filed on March 30, 2009 and incorporated herein by reference).
    4.1 Revolving Credit Agreement dated as of January 26, 2015, among Noble-Cayman and Noble International Finance Company, a Cayman Islands company, as borrowers; JPMorgan Chase Bank, N.A., as administrative agent and a swingline lender; Wells Fargo Bank, National Association, as a swingline lender; the lenders party thereto; Barclays Bank PLC, Citibank, N.A., DNB Bank ASA New York Branch, HSBC Bank USA, N.A., SunTrust Bank and Wells Fargo, asco-syndication agents; BNP Paribas, Credit Suisse AG, Cayman Islands Branch and Mizuho Bank, Ltd, asco-documentation agents; and J.P. Morgan Securities LLC, Barclays Bank PLC, Citigroup Global Markets Inc., DNB Markets, Inc., HSBC Securities (USA) Inc., SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC, as joint lead arrangers and joint lead bookrunners (filed as Exhibit 4.1 to Noble-UK’s Current Report on Form 8-K filed on January 29, 2015 and incorporated herein by reference).
    4.2 364-Day Revolving Credit Agreement dated as of January 29, 2015, among Noble-Cayman and Noble International Finance Company, a Cayman Islands company, as borrowers; JPMorgan, as administrative agent; the lenders party thereto; Barclays Bank PLC, Citibank, N.A. and HSBC Bank USA, N.A., as co-syndication agents; BNP Paribas, as documentation agent; and J.P. Morgan Securities LLC, Barclays Bank PLC, Citigroup Global Markets Inc., and HSBC Securities (USA) Inc., as joint lead arrangers and joint lead bookrunners (filed as Exhibit 4.2 to Noble-UK’s Current Report on Form 8-K filed on January 29, 2015 and incorporated herein by reference).
    4.3 Indenture, dated as of March 16, 2015, among Noble Holding International Limited, as Issuer, and Wells Fargo N.A., as Trustee, relating to 4.000% senior notes due 2018, 5.950% senior notes due 2025 and 6.95% senior notes due 2045 of Noble Holding International Limited (filed as Exhibit 4.1 to Noble-UK’s Current Report on Form 8-K filed on March 16, 2015 and incorporated herein by reference).
    4.4 First Supplemental Indenture, dated as of March 16, 2015, among Noble Holding International Limited, as Issuer, Noble Corporation, as Guarantor, and Wells Fargo N.A., as Trustee, relating to 4.000% senior notes due 2018, 5.950% senior notes due 2025 and 6.95% senior notes due 2045 of Noble Holding International Limited (filed as Exhibit 4.2 to Noble-UK’s Current Report on Form 8-K filed on March 16, 2015 and incorporated herein by reference).
  10.1    Tax Sharing Agreement, dated as of July 31, 2014, between Noble-UK and Paragon Offshore plc. (filed as Exhibit 10.1 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).
  10.2    Employee Matters Agreement, dated as of July 31, 2014, between Noble-Cayman and Paragon Offshore plc. (filed as Exhibit 10.2 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).
  10.3    Transition Services Agreement, dated as of July 31, 2014, between Noble-Cayman and Paragon Offshore plc. (filed as Exhibit 10.3 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).
  10.4    Transition Services Agreement (Brazil), dated as of July 31, 2014, among Paragon Offshore do Brasil Limitada, Paragon Offshore (Nederland) B.V., Paragon Offshore plc, Noble-Cayman, Noble Dave Beard Limited and Noble Drilling (Nederland) II B.V. (filed as Exhibit 10.4 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).
  10.5* Noble Corporation 2015 Short Term Incentive Plan (filed as Exhibit 10.5 to Noble-UK’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 and incorporated herein by reference).
  10.6* Noble Corporation 2015 Omnibus Incentive Plan, effective May 1, 2015 (filed as Exhibit 10.1 to Noble-UK’s Current Report on Form 8-K filed on April 29, 2015 and incorporated herein by reference).
  10.7* Amended and Restated Form of Noble-UK 2013 Performance-Vested Restricted Stock Unit Award under the Noble-UK 1991 Stock Option and Restricted Stock Plan (filed as Exhibit 10.1 to Noble-UK’s Current Report on Form 8-K filed on October 16, 2014 and incorporated herein by reference).
  10.8* Amended and Restated Form of Noble-UK 2014 Performance-Vested Restricted Stock Unit Award under the Noble-UK 1991 Stock Option and Restricted Stock Plan (filed as Exhibit 10.2 to Noble-UK’s Current Report on Form 8-K filed on October 16, 2014 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-UK 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-UK.
  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-UK 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-UK.
  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    Interactive Data File

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

5458


	June 30, 2014				December 31, 2013
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Senior unsecured notes:
7.375% Senior Notes due March 2014	$	—	$	—	$	249,964	$	253,634
3.45% Senior Notes due August 2015		350,000		359,532		350,000		363,019
3.05% Senior Notes due March 2016		299,974		310,058		299,967		309,878
2.50% Senior Notes due March 2017		299,903		307,420		299,886		302,891
7.50% Senior Notes due March 2019		201,695		235,163		201,695		232,839
4.90% Senior Notes due August 2020		499,086		548,520		499,022		528,597
4.625% Senior Notes due March 2021		399,601		429,755		399,576		413,868
3.95% Senior Notes due March 2022		399,221		408,265		399,178		390,520
6.20% Senior Notes due August 2040		399,894		456,520		399,893		421,720
6.05% Senior Notes due March 2041		397,663		452,273		397,646		417,312
5.25% Senior Notes due March 2042		498,296		514,529		498,283		476,873

Total senior unsecured notes		3,745,333		4,022,035		3,995,110		4,111,151
Commercial paper program		2,268,613		2,268,613		1,561,141		1,561,141

Total long-term debt	$	6,013,946	$	6,290,648	$	5,556,251	$	5,672,292


		Estimated fair value
	Balance sheet classification	June 30, 2014		December 31, 2013
Asset derivatives
Cash flow hedges
Short-term foreign currency forward contracts	Other current assets	$	6,652	$	—


	Gain/(loss) recognized through AOCL					Gain/(loss) reclassified from AOCL to “other income”					Gain/(loss) recognized through “other income”
	2014		2013			2014		2013			2014		2013
Cash flow hedges
Foreign currency forward contracts	$	5,067	$	(4,431	)	$	1,585	$	(300	)	$	—	$	—


	June 30, 2014
			Estimated Fair Value Measurements
	Carrying Amount		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets -
Marketable securities	$	8,590	$	8,590	$	—	$	—
Foreign currency forward contracts		6,652		—		6,652		—


	Gains / (Losses) on Cash Flow Hedges⁽¹⁾			Defined Benefit Pension Items⁽²⁾			Foreign Currency Items			Total
Balance at December 31, 2012	$	—		$	(95,071	)	$	(20,378	)	$	(115,449	)

Activity during period:
Other comprehensive income (loss) before reclassifications		(4,917	)		—			477			(4,440	)
Amounts reclassified from AOCL		186			3,274			—			3,460

Net other comprehensive income (loss)		(4,731	)		3,274			477			(980	)

Balance at June 30, 2013	$	(4,731	)	$	(91,797	)	$	(19,901	)	$	(116,429	)


Balance at December 31, 2013	$	—		$	(58,598	)	$	(23,566	)	$	(82,164	)

Activity during period:
Other comprehensive income before reclassifications		9,431			—			2,720			12,151
Amounts reclassified from AOCL		(2,779	)		1,528			—			(1,251	)

Net other comprehensive income		6,652			1,528			2,720			10,900

Balance at June 30, 2014	$	6,652		$	(57,070	)	$	(20,846	)	$	(71,264	)


	Gain/(loss) recognized through AOCL				Gain/(loss) reclassified from AOCL to “contract drilling services” expense					Gain/(loss) recognized through “contract drilling services” expense
	2015		2014		2015			2014		2015		2014
Cash flow hedges
Foreign currency forward contracts	$	479	$	5,067	$	(570	)	$	1,585	$	—	$	—


	Gains / (Losses) on Cash Flow Hedges⁽¹⁾			Defined Benefit Pension Items⁽²⁾			Foreign Currency Items			Total
Balance at December 31, 2013	$	—		$	(58,598	)	$	(23,566	)	$	(82,164	)

Activity during period:
Other comprehensive income before reclassifications		9,431			—			2,720			12,151
Amounts reclassified from AOCL		(2,779	)		1,528			—			(1,251	)

Net other comprehensive income		6,652			1,528			2,720			10,900

Balance at June 30, 2014	$	6,652		$	(57,070	)	$	(20,846	)	$	(71,264	)



Balance at December 31, 2014	$	—		$	(58,440	)	$	(10,978	)	$	(69,418	)

Activity during period:
Other comprehensive loss before reclassifications		(695	)		—			(1,874	)		(2,569	)
Amounts reclassified from AOCL		604			2,210			—			2,814

Net other comprehensive income (loss)		(91	)		2,210			(1,874	)		245

Balance at June 30, 2015	$	(91	)	$	(56,230	)	$	(12,852	)	$	(69,173	)


	Noble-UK						Noble-Cayman
	Six months ended						Six months ended
	June 30,						June 30,
	2014			2013			2014			2013
Accounts receivable	$	67,689		$	(90,903	)	$	67,689		$	(90,903	)
Other current assets		(47,537	)		(68,614	)		(48,834	)		(70,214	)
Other assets		(39,612	)		1,191			(39,603	)		1,145
Accounts payable		17,497			32,125			5,073			32,222
Other current liabilities		(46,749	)		(8,057	)		(34,454	)		(6,336	)
Other liabilities		12,888			(12,291	)		12,888			(12,291	)

	$	(35,824	)	$	(146,549	)	$	(37,241	)	$	(146,377	)


	~~Issuer~~
Notes	Issuer (Co-Issuer(s))	~~Guarantor(s)~~ Guarantor
$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
$250 million 4.00% Senior Notes due 2018	NHIL		Noble-Cayman
$202 million 7.50% Senior Notes due 2019	NHC	~~Noble-Cayman;~~	Noble-Cayman
	~~NDH~~Noble Drilling Holding, LLC (“NDH”)
	Noble Drilling Services 6 LLC (“NDS6”)
$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
$450 million 5.95% Senior Notes due 2025	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
$400 million 6.95% Senior Notes due 2045	NHIL		Noble-Cayman


												Other
												Non-guarantor
	Noble-											Subsidiaries			Consolidating
	Cayman		NHC		NDH			NHIL		NDS6		of Noble			Adjustments			Total			Noble- Cayman		NHC		NDH			NHIL		NDS6		Other Non-guarantor Subsidiaries of Noble			Consolidating Adjustments			Total
ASSETS
Current assets
Cash and cash equivalents	$	5	$	—	$	1,330		$	—	$	—	$	136,375		$	—		$	137,710		$	29	$	—	$	126		$	—	$	—	$	244,965		$	—		$	245,120
Accounts receivable		—		—		45,464			—		—		844,478			—			889,942			—		—		16,141			—		—		524,282			—			540,423
Taxes receivable		—		58,014		299			—		—		89,846			—			148,159			—		16,063		281			—		—		43,813			—			60,157
Short-term notes receivable from affiliates		—		—		1,077,965			—		19,500		560,925			(1,658,390	)		—			125,330		—		1,077,965			—		333,965		171,925			(1,709,185	)		—
Accounts receivable from affiliates		1,164,153		368,701		161,002			252,598		34,071		4,375,746			(6,356,271	)		—			693,834		437,455		234,677			1,164,504		121,829		4,258,806			(6,911,105	)		—
Prepaid expenses and other current assets		—		—		2,373			21		—		229,310			—			231,704			1,436		—		4,961			—		—		132,207			—			138,604

Total current assets		1,164,158		426,715		1,288,433			252,619		53,571		6,236,680			(8,014,661	)		1,407,515			820,629		453,518		1,334,151			1,164,504		455,794		5,375,998			(8,620,290	)		984,304

Property and equipment, at cost		—		—		2,135,178			—		—		18,218,163			—			20,353,341			—		—		2,081,631			—		—		12,490,780			—			14,572,411
Accumulated depreciation		—		—		(246,406	)		—		—		(4,861,741	)		—			(5,108,147	)		—		—		(315,372	)		—		—		(2,312,354	)		—			(2,627,726	)

Property and equipment, net		—		—		1,888,772			—		—		13,356,422			—			15,245,194			—		—		1,766,259			—		—		10,178,426			—			11,944,685

Notes receivable from affiliates		3,304,753		—		879,154			1,980,391		5,000		2,096,075			(8,265,373	)		—			3,304,653		—		236,920			1,980,391		5,000		1,583,587			(7,110,551	)		—
Investments in affiliates		9,378,489		1,437,748		6,084,404			10,055,746		6,291,130		—			(33,247,517	)		—			4,971,977		1,316,576		2,913,930			8,777,006		6,634,018		—			(24,613,507	)		—
Other assets		3,943		—		7,015			21,253		576		271,579			—			304,366			6,773		—		6,523			27,668		455		179,345			—			220,764

Total assets	$	13,851,343	$	1,864,463	$	10,147,778		$	12,310,009	$	6,350,277	$	21,960,756		$	(49,527,551	)	$	16,957,075		$	9,104,032	$	1,770,094	$	6,257,783		$	11,949,569	$	7,095,267	$	17,317,356		$	(40,344,348	)	$	13,149,753

LIABILITIES AND EQUITY
Current liabilities
Short-term notes payables from affiliates	$	—	$	171,925	$	—		$	—	$	760,720	$	725,745		$	(1,658,390	)	$	—		$	—	$	171,925	$	—		$	—	$	371,720	$	1,165,540		$	(1,709,185	)	$	—
Current maturities of long-term debt																						—		—		—			350,000		—		—			—			350,000
Accounts payable		—		—		8,594			—		—		343,639			—			352,233			—		—		7,658			—		—		210,408			—			218,066
Accrued payroll and related costs		—		—		7,951			—		—		134,601			—			142,552			—		—		6,412			—		—		67,993			—			74,405
Accounts payable to affiliates		1,025,178		61,519		3,278,835			45,051		13,352		1,932,336			(6,356,271	)		—			717,632		65,849		3,460,644			78,638		23,959		2,564,383			(6,911,105	)		—
Taxes payable		—		—		—			—		—		124,631			—			124,631			—		—		—			—		—		107,716			—			107,716
Interest payable																						—		—		—			75,888		4,412		—			—			80,300
Other current liabilities		1,173		—		32,505			57,053		4,412		163,524			—			258,667			273		—		7,097			—		—		100,197			—			107,567

Total current liabilities		1,026,351		233,444		3,327,885			102,104		778,484		3,424,476			(8,014,661	)		878,083			717,905		237,774		3,481,811			504,526		400,091		4,216,237			(8,620,290	)		938,054

Long-term debt		2,268,613		—		—			3,543,638		201,695		—			—			6,013,946			—		—		—			4,286,846		201,695		—			—			4,488,541
Notes payable to affiliates		1,769,064		—		1,113,363			1,169,180		834,450		3,379,316			(8,265,373	)		—			1,769,064		—		600,874			1,169,181		192,215		3,379,217			(7,110,551	)		—
Deferred income taxes		—		—		—			—		—		233,419			—			233,419			—		—		—			—		—		104,402			—			104,402
Other liabilities		19,930		—		30,999			—		—		287,959			—			338,888			19,929		—		27,703			—		—		257,306			—			304,938

Total liabilities		5,083,958		233,444		4,472,247			4,814,922		1,814,629		7,325,170			(16,280,034	)		7,464,336			2,506,898		237,774		4,110,388			5,960,553		794,001		7,957,162			(15,730,841	)		5,835,935

Commitments and contingencies
Total shareholder equity		8,767,385		1,631,019		5,675,531			7,495,087		4,535,648		13,375,613			(32,712,898	)		8,767,385			6,597,134		1,532,320		2,147,395			5,989,016		6,301,266		8,221,330			(24,191,327	)		6,597,134
Noncontrolling interests		—		—		—			—		—		1,259,973			(534,619	)		725,354			—		—		—			—		—		1,138,864			(422,180	)		716,684

Total equity		8,767,385		1,631,019		5,675,531			7,495,087		4,535,648		14,635,586			(33,247,517	)		9,492,739			6,597,134		1,532,320		2,147,395			5,989,016		6,301,266		9,360,194			(24,613,507	)		7,313,818

Total liabilities and equity	$	13,851,343	$	1,864,463	$	10,147,778		$	12,310,009	$	6,350,277	$	21,960,756		$	(49,527,551	)	$	16,957,075		$	9,104,032	$	1,770,094	$	6,257,783		$	11,949,569	$	7,095,267	$	17,317,356		$	(40,344,348	)	$	13,149,753


			Year Ending December 31,																	Year Ending December 31,
	Total		2014⁽¹⁾			2015			2016			2017			2018-2023			Total		2015⁽¹⁾			2016			2017			2018			2019-2023
	(In millions)																	(In millions)
Contract Drilling Services Backlog
Semisubmersibles/Drillships^{(2) (6)}	$	10,067	$	1,459		$	2,659		$	1,956		$	1,253		$	2,740
Jackups⁽³⁾		3,286		919			1,204			496			230			437
Semisubmersibles/Drillships^{(2) (5)}																		$	6,788	$	1,180		$	1,811		$	1,100		$	701		$	1,996
Jackups																			1,901		299			665			424			252			261

Total⁽⁴⁾⁽³⁾	$	13,353	$	2,378		$	3,863		$	2,452		$	1,483		$	3,177		$	8,689	$	1,479		$	2,476		$	1,524		$	953		$	2,257

Percent of Available Days Committed⁽⁵⁾

Percent of Available Days Committed⁽⁴⁾
Semisubmersibles/Drillships				72	%		59	%		40	%		24	%		9	%				78	%		58	%		35	%		24	%		14	%
Jackups				76	%		46	%		13	%		4	%		1	%				80	%		68	%		41	%		19	%		2	%

Total				74	%		50	%		23	%		11	%		9	%				79	%		63	%		38	%		21	%		8	%


	Average Rig Utilization (1)						Operating Days (2)							Average Dayrates
	Three Months Ended June 30,						Three Months Ended June 30,							Three Months Ended June 30,
	2015			2014			2015		2014		% Change			2015		2014		% Change

Jackups		84	%		87	%		993		870		14	%	$	171,482	$	178,259		-4	%
Semisubmersibles		63	%		74	%		455		742		-39	%		403,319		424,199		-5	%
Drillships		100	%		100	%		819		637		29	%		509,783		485,686		5	%

Total		83	%		85	%		2,267		2,249		1	%	$	340,217	$	346,494		-2	%


	Average Rig						Operating							Average
	Utilization (1)						Days (2)							Dayrates
	Three Months Ended						Three Months Ended							Three Months Ended
	June 30,						June 30,							June 30,
	2014			2013			2014		2013		% Change			2014		2013		% Change
Jackups		80	%		92	%		3,272		3,594		-9	%	$	130,851	$	116,266		13	%
Semisubmersibles		73	%		76	%		924		970		-5	%		394,605		370,117		7	%
Drillships		92	%		78	%		1,001		637		57	%		407,259		311,490		31	%
Other		0	%		0	%		—		—		0	%		—		—		0	%

Total		79	%		83	%		5,197		5,201		0	%	$	231,003	$	187,537		23	%


	Three Months Ended
	June 30,				Change						Three Months Ended June 30				Change
	2014		2013		$			%			2015		2014		$			%
Operating revenues:
Contract drilling services	$	1,200,406	$	975,455	$	224,951			23	%	$	771,307	$	779,368	$	(8,061	)		-1	%
Reimbursables (1)		29,291		28,000		1,291			5	%		22,248		22,243		5			0	%
Other		—		67		(67	)		**

	$	1,229,697	$	1,003,522	$	226,175			23	%	$	793,555	$	801,611	$	(8,056	)		-1	%

Operating costs and expenses:
Contract drilling services	$	577,134	$	487,971	$	89,163			18	%	$	319,207	$	370,902	$	(51,695	)		-14	%
Reimbursables (1)		21,481		22,469		(988	)		-4	%		17,652		17,097		555			3	%
Depreciation and amortization		249,701		209,082		40,619			19	%		153,579		148,324		5,255			4	%
General and administrative		26,845		26,378		467			2	%		22,424		26,845		(4,421	)		-16	%
Non-recurring spin-off related costs		1,441		—		1,441			**

		876,602		745,900		130,702			18	%		512,862		563,168		(50,306	)		-9	%

Operating income	$	353,095	$	257,622	$	95,473			37	%	$	280,693	$	238,443	$	42,250			18	%


Rig type/name
Currently under construction
Drillships
Noble Tom Madden	$	32.0
Jackups
Noble Sam Hartley		4.6
Noble Jackup VII (CJ70-Mariner)		4.3
Recently completed construction projects
Noble Sam Croft		353.2
Noble Tom Prosser		141.9
Noble Sam Turner		140.8
Noble Houston Colbert		134.9
Noble Globetrotter II		10.2
Noble Bob Douglas		9.3
Noble Don Taylor		3.2
Noble Regina Allen		1.3
Noble Mick O’Brien		0.5
Other		0.1

Total Newbuild Capital Expenditures	$	836.3


/s/ David W. Williams				August ~~8, 2014~~6, 2015
David W. Williams				Date
Chairman, President and Chief Executive Officer ~~(Principal Executive Officer)~~				~~Date~~
(Principal Executive Officer)

/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				August ~~8, 2014~~6, 2015
David W. Williams ~~President and Chief Executive Officer~~ ~~(Principal Executive Officer)~~				Date
President and Chief Executive Officer
(Principal Executive Officer)

/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~~ (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 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).

2.3		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).

2.4		Master Separation Agreement, dated as of July 31, 2014, between Noble-Cayman and Paragon Offshore plc. (filed as Exhibit 2.1 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).

3.1		Composite Copy of Articles of Association of Noble-UK, as of June 10, 2014 (filed as Exhibit 3.1 to Noble-UK’s ~~Current~~Quarterly Report on Form ~~8-K filed on November 20, 2013~~10-Q for the quarter ended September 30, 2014 and incorporated herein by reference).

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

4.1		Revolving Credit Agreement dated as of January 26, 2015, among Noble-Cayman and Noble International Finance Company, a Cayman Islands company, as borrowers; JPMorgan Chase Bank, N.A., as administrative agent and a swingline lender; Wells Fargo Bank, National Association, as a swingline lender; the lenders party thereto; Barclays Bank PLC, Citibank, N.A., DNB Bank ASA New York Branch, HSBC Bank USA, N.A., SunTrust Bank and Wells Fargo, asco-syndication agents; BNP Paribas, Credit Suisse AG, Cayman Islands Branch and Mizuho Bank, Ltd, asco-documentation agents; and J.P. Morgan Securities LLC, Barclays Bank PLC, Citigroup Global Markets Inc., DNB Markets, Inc., HSBC Securities (USA) Inc., SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC, as joint lead arrangers and joint lead bookrunners (filed as Exhibit 4.1 to Noble-UK’s Current Report on Form 8-K filed on January 29, 2015 and incorporated herein by reference).

4.2		364-Day Revolving Credit Agreement dated as of January 29, 2015, among Noble-Cayman and Noble International Finance Company, a Cayman Islands company, as borrowers; JPMorgan, as administrative agent; the lenders party thereto; Barclays Bank PLC, Citibank, N.A. and HSBC Bank USA, N.A., as co-syndication agents; BNP Paribas, as documentation agent; and J.P. Morgan Securities LLC, Barclays Bank PLC, Citigroup Global Markets Inc., and HSBC Securities (USA) Inc., as joint lead arrangers and joint lead bookrunners (filed as Exhibit 4.2 to Noble-UK’s Current Report on Form 8-K filed on January 29, 2015 and incorporated herein by reference).

4.3		Indenture, dated as of March 16, 2015, among Noble Holding International Limited, as Issuer, and Wells Fargo N.A., as Trustee, relating to 4.000% senior notes due 2018, 5.950% senior notes due 2025 and 6.95% senior notes due 2045 of Noble Holding International Limited (filed as Exhibit 4.1 to Noble-UK’s Current Report on Form 8-K filed on March 16, 2015 and incorporated herein by reference).

4.4		First Supplemental Indenture, dated as of March 16, 2015, among Noble Holding International Limited, as Issuer, Noble Corporation, as Guarantor, and Wells Fargo N.A., as Trustee, relating to 4.000% senior notes due 2018, 5.950% senior notes due 2025 and 6.95% senior notes due 2045 of Noble Holding International Limited (filed as Exhibit 4.2 to Noble-UK’s Current Report on Form 8-K filed on March 16, 2015 and incorporated herein by reference).

10.1		Tax Sharing Agreement, dated as of July 31, 2014, between Noble-UK and Paragon Offshore plc. (filed as Exhibit 10.1 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).

10.2		Employee Matters Agreement, dated as of July 31, 2014, between Noble-Cayman and Paragon Offshore plc. (filed as Exhibit 10.2 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).

10.3		Transition Services Agreement, dated as of July 31, 2014, between Noble-Cayman and Paragon Offshore plc. (filed as Exhibit 10.3 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).

10.4		Transition Services Agreement (Brazil), dated as of July 31, 2014, among Paragon Offshore do Brasil Limitada, Paragon Offshore (Nederland) B.V., Paragon Offshore plc, Noble-Cayman, Noble Dave Beard Limited and Noble Drilling (Nederland) II B.V. (filed as Exhibit 10.4 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference).


10.5*		Noble Corporation 2015 Short Term Incentive Plan (filed as Exhibit 10.5 to Noble-UK’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 and incorporated herein by reference).

10.6*		Noble Corporation 2015 Omnibus Incentive Plan, effective May 1, 2015 (filed as Exhibit 10.1 to Noble-UK’s Current Report on Form 8-K filed on April 29, 2015 and incorporated herein by reference).

10.7*		Amended and Restated Form of Noble-UK 2013 Performance-Vested Restricted Stock Unit Award under the Noble-UK 1991 Stock Option and Restricted Stock Plan (filed as Exhibit 10.1 to Noble-UK’s Current Report on Form 8-K filed on October 16, 2014 and incorporated herein by reference).

10.8*		Amended and Restated Form of Noble-UK 2014 Performance-Vested Restricted Stock Unit Award under the Noble-UK 1991 Stock Option and Restricted Stock Plan (filed as Exhibit 10.2 to Noble-UK’s Current Report on Form 8-K filed on October 16, 2014 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-UK 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-UK.

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-UK 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-UK.

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		Interactive Data File