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NE Noble

Filed: 7 May 21, 7:51am

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________________________________________________
FORM 10-Q
_____________________________________________________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2021
OR
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
(Exact name of registrant as specified in its charter)
_____________________________________________________________________________________________________
Cayman Islands 98-1575532
(State or other jurisdiction of incorporation or organization)(I.R.S. employer identification number)
13135 Dairy Ashford, Suite 800, Sugar Land, Texas, 77478
(Address of principal executive offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (281) 276-6100
_____________________________________________________________________________________________________
Commission file number: 001-31306

Noble Finance Company
(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)
13135 Dairy Ashford, Suite 800, Sugar Land, Texas, 77478
(Address of principal executive offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (281) 276-6100
_______________________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act: None
_______________________________________________________________________________________________
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      No  
Indicate by check mark whether each registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes      No  
Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Noble Corporation:Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
Noble Finance Company:Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes      No  
Number of shares outstanding at May 5, 2021: Noble Corporation - 60,137,084
Number of shares outstanding: Noble Finance Company - 261,245,693
This Quarterly Report on Form 10-Q is a combined report being filed separately by two registrants: Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability, and its wholly-owned subsidiary, Noble Finance Company, an exempted company incorporated in the Cayman Islands.



TABLE OF CONTENTS
 
   Page
PART I  
Item 1  
 Noble Corporation (Noble) Financial Statements:  
  
  
  
  
  
    
 Noble Finance Company (Finco) Financial Statements:  
  
  
  
  
  
    
  
    
Item 2 
Item 3 
Item 4 
PART II  
Item 1 
Item 1A
Item 6 
  
This combined Quarterly Report on Form 10-Q is separately filed by Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability (“Noble” or “Successor”), and Noble Finance Company (formerly known as Noble Corporation), an exempted company incorporated in the Cayman Islands with limited liability and a wholly-owned subsidiary of Noble (“Finco”).Information in this filing relating to Finco is filed by Noble and separately by Finco on its own behalf. Finco makes no representation as to information relating to Noble (except as it may relate to Finco) or any other affiliate or subsidiary of Noble.
This report should be read in its entirety as it pertains to each Registrant. Except where indicated, the Condensed 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 and its condensed consolidated subsidiaries, including Finco.
2


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
SuccessorPredecessor
March 31, 2021December 31, 2020
ASSETS
Current assets
Cash and cash equivalents$116,326 $343,332 
Accounts receivable, net of allowance for credit losses of $0 and $1,069, respectively178,942 147,863 
Taxes receivable31,487 30,767 
Prepaid expenses and other current assets27,840 80,322 
Total current assets354,595 602,284 
Intangible assets104,930 
Property and equipment, at cost1,178,688 4,777,697 
Accumulated depreciation(13,873)(1,200,628)
Property and equipment, net1,164,815 3,577,069 
Other assets70,528 84,584 
Total assets$1,694,868 $4,263,937 
LIABILITIES AND EQUITY
Current liabilities
Accounts payable$96,223 $95,159 
Accrued payroll and related costs36,615 36,553 
Taxes payable32,901 36,819 
Interest payable6,587 
Other current liabilities30,689 49,820 
Total current liabilities203,015 218,351 
Long-term debt393,500 
Deferred income taxes17,929 9,292 
Other liabilities77,862 108,039 
Liabilities subject to compromise4,239,643 
Total liabilities692,306 4,575,325 
Commitments and contingencies (Note 14)00
Shareholders’ equity
Predecessor common stock, $0.01 par value, ordinary shares; 251,084 shares outstanding as of December 31, 2020— 2,511 
Successor common stock, $0.00001 par value, ordinary shares; 43,537 shares outstanding as of March 31, 2021— 
Additional paid-in capital1,020,785 814,796 
Accumulated deficit(18,224)(1,070,683)
Accumulated other comprehensive loss(58,012)
Total shareholdersequity
1,002,562 (311,388)
Total liabilities and equity$1,694,868 $4,263,937 
See accompanying notes to the unaudited condensed consolidated financial statements.
3


NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited) 
SuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Operating revenues
Contract drilling services$84,629 $74,051 $267,364 
Reimbursables and other7,804 3,430 13,947 
92,433 77,481 281,311 
Operating costs and expenses
Contract drilling services79,981 46,965 161,145 
Reimbursables7,044 2,737 11,684 
Depreciation and amortization14,244 20,622 103,681 
General and administrative9,548 5,727 17,839 
Loss on impairment1,119,517 
110,817 76,051 1,413,866 
Operating income (loss)(18,384)1,430 (1,132,555)
Other income (expense)
Interest expense, net of amounts capitalized(6,895)(229)(70,880)
Interest income and other, net399 (2,282)
Reorganization items, net252,051 
Income (loss) before income taxes(25,271)253,651 (1,205,717)
Income tax benefit (provision)7,047 (3,423)143,040 
Net income (loss)$(18,224)$250,228 $(1,062,677)
Per share data
Basic:
Net income (loss)$(0.36)$1.00 $(4.25)
Diluted:
Net income (loss)$(0.36)$0.98 $(4.25)
See accompanying notes to the unaudited condensed consolidated financial statements.
4


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

SuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Net income (loss)$(18,224)$250,228 $(1,062,677)
Other comprehensive income (loss)
Foreign currency translation adjustments(116)(2,136)
Amortization of deferred pension plan amounts (net of tax provision of $0, $59 and $150 for the period from February 6, 2021 through March 31, 2021, period from January 1, 2021 through February 5, 2021 and three months ended March 31, 2020, respectively.)224 568 
Other comprehensive income (loss), net108 (1,568)
Comprehensive income (loss)$(18,224)$250,336 $(1,064,245)

See accompanying notes to the unaudited condensed consolidated financial statements.
5


NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
SuccessorPredecessor
Period from February 6, 2021 through March 31, 2021Period from January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Cash flows from operating activities
Net income (loss)$(18,224)$250,228 $(1,062,677)
Adjustments to reconcile net loss to net cash flow from operating activities:
Depreciation and amortization14,244 20,622 103,681 
Loss on impairment1,119,517 
Amortization of intangible asset8,459 
Reorganization items, net(280,790)
Deferred income taxes(4,285)2,501 6,014 
Amortization of share-based compensation2,018 710 3,245 
Other costs, net(1,660)(10,754)(3,195)
Changes in components of working capital:
Change in taxes receivable1,069 (1,789)(120,838)
Net changes in other operating assets and liabilities16,563 (26,176)(46,557)
Net cash provided by (used in) operating activities18,184 (45,448)(810)
Cash flows from investing activities
Capital expenditures(15,332)(14,629)(36,461)
Proceeds from disposal of assets, net231 194 
Net cash used in investing activities(15,101)(14,435)(36,461)
Cash flows from financing activities
Issuance of second lien notes200,000 
Borrowings on credit facilities177,500 110,000 
Repayments of credit facilities(545,000)
Debt issuance costs(23,664)
Cash paid to settle equity compensation awards(1,010)
Taxes withheld on employee stock transactions(1)(413)
Net cash provided by (used in) financing activities(191,165)108,577 
Net increase (decrease) in cash, cash equivalents and restricted cash3,083 (251,048)71,306 
Cash, cash equivalents and restricted cash, beginning of period113,993 365,041 105,924 
Cash, cash equivalents and restricted cash, end of period$117,076 $113,993 $177,230 
See accompanying notes to the unaudited condensed consolidated financial statements.
6


NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
(Unaudited)
SharesAdditional
Paid-in
Capital
Retained
Earnings (Accumulated Deficit)
Accumulated Other
Comprehensive
Loss
Total
Equity
BalancePar Value
Balance at 12/31/2019 (Predecessor)249,200 $2,492 $807,093 $2,907,776 $(58,389)$3,658,972 
Employee related equity activity
Amortization of share-based compensation— — 2,235 — — 2,235 
Issuance of share-based compensation shares1,752 17 (17)— — 
Shares withheld for taxes on equity transactions— — (430)— — (430)
Net loss— — — (1,062,677)— (1,062,677)
Other comprehensive loss, net(1,568)(1,568)
Balance at 3/31/2020 (Predecessor)250,952 $2,509 $808,881 $1,845,099 $(59,957)$2,596,532 
Balance at 12/31/2020 (Predecessor)251,084 $2,511 $814,796 $(1,070,683)$(58,012)$(311,388)
Employee related equity activity
Amortization of share-based compensation— — 710 — — 710 
Issuance of share-based compensation shares43 — — — — — 
Shares withheld for taxes on equity transactions— — (1)— — (1)
Net income— — — 250,228 — 250,228 
Other comprehensive income, net— — — — 108 108 
Cancellation of Predecessor equity(251,127)(2,511)(815,505)820,455 57,904 60,343 
Issuance of Successor common stock and warrants50,000 1,018,767 — — 1,018,768 
Balance at 2/5/2021 (Predecessor)50,000 $1 $1,018,767 $0 $0 $1,018,768 
Balance at 2/6/2021 (Successor)50,000 $1 $1,018,767 $0 $0 1,018,768 
Employee related equity activity.
Amortization of share-based compensation— — 2,018 — — 2,018 
Exchange of common stock for penny warrants(6,463)— — — — — 
Net loss— — — (18,224)— (18,224)
Balance at 3/31/21 (Successor)43,537 $1 $1,020,785 $(18,224)$0 $1,002,562 
See accompanying notes to the unaudited condensed consolidated financial statements.

7


NOBLE FINANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited) 
SuccessorPredecessor
March 31, 2021December 31, 2020
ASSETS
Current assets
Cash and cash equivalents$116,326 $343,332 
Accounts receivable, net of allowance for credit losses of $0 and $1,069, respectively178,942 147,863 
Accounts receivable from affiliates31,214 
Taxes receivable31,487 30,767 
Prepaid expenses and other current assets19,486 50,469 
Total current assets346,241 603,645 
Intangible assets104,930 
Property and equipment, at cost1,178,688 4,777,697 
Accumulated depreciation(13,873)(1,200,628)
Property and equipment, net1,164,815 3,577,069 
Other assets70,528 84,584 
Total assets$1,686,514 $4,265,298 
LIABILITIES AND EQUITY
Current liabilities
Accounts payable$87,712 $83,649 
Accrued payroll and related costs36,615 36,516 
Taxes payable32,901 36,819 
Interest payable6,587 
Other current liabilities30,690 49,820 
Total current liabilities194,505 206,804 
Long-term debt393,500 
Deferred income taxes17,929 9,292 
Other liabilities77,837 108,039 
Liabilities subject to compromise4,154,555 
Total liabilities683,771 4,478,690 
Commitments and contingencies (Note 14)00
Shareholders’ equity
Predecessor common stock, $0.10 par value, 261,246 ordinary shares outstanding as of December 31, 2020.— 26,125 
Successor common stock, $0.10 par value, 261,246 ordinary shares outstanding as of March 31, 2021.26,125 — 
Capital in excess of par value989,284 766,714 
Accumulated deficit(12,666)(948,219)
Accumulated other comprehensive loss(58,012)
Total shareholdersequity
1,002,743 (213,392)
Total liabilities and equity$1,686,514 $4,265,298 
See accompanying notes to the unaudited condensed consolidated financial statements.
8


NOBLE FINANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
 
SuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Operating revenues
Contract drilling services$84,629 $74,051 $267,364 
Reimbursables and other7,804 3,430 13,947 
92,433 77,481 281,311 
Operating costs and expenses
Contract drilling services79,361 46,703 160,841 
Reimbursables7,044 2,737 11,684 
Depreciation and amortization14,243 20,631 103,109 
General and administrative4,611 5,729 6,751 
Loss on impairment1,119,517 
105,259 75,800 1,401,902 
Operating income (loss)(12,826)1,681 (1,120,591)
Other income (expense)
Interest expense, net of amounts capitalized(6,895)(229)(70,880)
Interest income and other, net400 (2,294)
Reorganization items, net195,395 
Income (loss) before income taxes(19,713)197,247 (1,193,765)
Income tax benefit (provision)7,047 (3,422)143,040 
Net income (loss)$(12,666)$193,825 $(1,050,725)
See accompanying notes to the unaudited condensed consolidated financial statements.
9


NOBLE FINANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)

SuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Net income (loss)$(12,666)$193,825 $(1,050,725)
Other comprehensive income (loss)
Foreign currency translation adjustments(116)(2,136)
Amortization of deferred pension plan amounts (net of tax provision of $0, $59 and $150 for the period from February 6, 2021 through March 31, 2021, period from January 1, 2021 through February 5, 2021 and three months ended March 30, 2020, respectively.)224 568 
Other comprehensive income (loss), net108 (1,568)
Comprehensive income (loss)$(12,666)$193,933 $(1,052,293)
See accompanying notes to the unaudited condensed consolidated financial statements.


10


NOBLE FINANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
SuccessorPredecessor
Period from February 6, 2021 through March 31, 2021Period from January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Cash flows from operating activities
Net income (loss)$(12,666)$193,825 $(1,050,725)
Adjustments to reconcile net loss to net cash flow from operating activities:
Depreciation and amortization14,243 20,631 103,109 
Loss on impairment1,119,517 
Amortization of intangible asset8,459 
Reorganization items, net(203,490)
Deferred income taxes(4,285)2,501 6,014 
Amortization of share-based compensation2,018 710 3,245 
Other costs, net(1,660)(3,054)1,427 
Changes in components of working capital:
Change in taxes receivable1,069 (1,789)(120,838)
Net changes in other operating assets and liabilities13,766 (21,808)(51,328)
Net cash provided by (used in) operating activities20,944 (12,474)10,421 
Cash flows from investing activities
Capital expenditures(15,332)(14,629)(36,461)
Proceeds from disposal of assets, net231 194 
Net cash used in investing activities(15,101)(14,435)(36,461)
Cash flows from financing activities
Issuance of second lien notes200,000 
Borrowings on credit facilities177,500 110,000 
Repayments of credit facilities(545,000)
Debt issuance costs(10,139)
Distributions to parent company, net(2,760)(26,503)(12,644)
Net cash provided by (used in) financing activities(2,760)(204,142)97,356 
Net increase (decrease) in cash, cash equivalents and restricted cash3,083 (231,051)71,316 
Cash, cash equivalents and restricted cash, beginning of period113,993 345,044 105,878 
Cash, cash equivalents and restricted cash, end of period$117,076 $113,993 $177,194 
See accompanying notes to the unaudited condensed consolidated financial statements.
11


NOBLE FINANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
(Unaudited)
SharesAdditional
Paid-in
Capital
Retained
Earnings (Accumulated Deficit)
Accumulated Other
Comprehensive Loss
Total Equity
BalancePar Value
Balance at 12/31/2019 (Predecessor)261,246 $26,125 $757,545 $3,032,699 $(58,389)$3,757,980 
Distributions to parent company, net— — — (12,644)— (12,644)
Capital contribution by parent - share-based compensation— — 3,245 — — 3,245 
Net loss— — — (1,050,725)— (1,050,725)
Other comprehensive loss, net— — — — (1,568)(1,568)
Balance at 3/31/2020 (Predecessor)261,246 $26,125 $760,790 $1,969,330 $(59,957)$2,696,288 
Balance at 12/31/2020 (Predecessor)261,246 $26,125 $766,714 $(948,219)$(58,012)$(213,392)
Distributions to parent company, net— — — (26,503)— (26,503)
Capital contribution by parent - share-based compensation— — 710 — — 710 
Net income— — — 193,825 — 193,825 
Other comprehensive income, net— — — — 108 108 
Elimination of Predecessor equity— — 222,601 780,897 57,904 1,061,402 
Balance at 2/5/2021 (Predecessor)261,246 $26,125 $990,025 $0 $0 $1,016,150 
Balance at 2/6/2021 (Successor)261,246 $26,125 $990,025 $0 $0 $1,016,150 
Distributions to parent company, net— — (2,759)— — (2,759)
Capital contribution by parent - share-based compensation— — 2,018 — — 2,018 
Net loss— — (12,666)— (12,666)
Other comprehensive income, net— — — — 
Balance at 3/31/2021 (Successor)261,246 $26,125 $989,284 $(12,666)$0 $1,002,743 
See accompanying notes to the unaudited condensed consolidated financial statements.


12

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

Note 1— Organization and Basis of Presentation
Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability, collectively with its consolidated subsidiaries (“Noble” or “Successor”), is a leading offshore drilling contractor for the oil and gas industry. We provide contract drilling services to the international oil and gas industry with our global fleet of mobile offshore drilling units. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921. As of March 31, 2021, our fleet of 19 drilling rigs consisted of 7 floaters and 12 jackups.
We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business. 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 primarily of large, integrated, independent and government-owned or controlled oil and gas companies throughout the world.
On July 31, 2020 (the “Petition Date”), our former parent company, Noble Holding Corporation plc (formerly known as Noble Corporation plc), a public limited company incorporated under the laws of England and Wales (“Legacy Noble” or the “Predecessor”), and certain of its subsidiaries, including Noble Finance Company (formerly known as Noble Corporation), a Cayman Islands company (“Finco”), filed voluntary petitions in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). On September 4, 2020, the Debtors (as defined herein) filed with the Bankruptcy Court the Joint Plan of Reorganization of Noble Corporation plc and its Debtor Affiliates, which was subsequently amended on October 8, 2020 and October 13, 2020 and modified on November 18, 2020 (as amended, modified or supplemented, the “Plan”), and the related disclosure statement. On September 24, 2020, 6 additional subsidiaries of Legacy Noble (together with Legacy Noble and its subsidiaries that filed on the Petition Date, as the context requires, the “Debtors”) filed voluntary petitions in the Bankruptcy Court. The chapter 11 proceedings were jointly administered under the caption Noble Corporation plc, et al. (Case No. 20-33826) (the “Chapter 11 Cases”). On November 20, 2020, the Bankruptcy Court entered an order confirming the Plan. In connection with the Chapter 11 Cases and the Plan, on and prior to the Effective Date (as defined herein), Legacy Noble and certain of its subsidiaries effectuated certain restructuring transactions pursuant to which Legacy Noble formed Noble as an indirect wholly-owned subsidiary of Legacy Noble and transferred to Noble substantially all of the subsidiaries and other assets of Legacy Noble. On February 5, 2021 (the “Effective Date”), the Plan became effective in accordance with its terms, the Debtors emerged from the Chapter 11 Cases and Noble became the new parent company. In accordance with the Plan, Legacy Noble and its remaining subsidiary will in due course be wound down and dissolved in accordance with applicable law. The Bankruptcy Court closed the chapter 11 case with respect to all Debtors other than Legacy Noble, pending its wind down.
Noble is the successor issuer to Legacy Noble for purposes of and pursuant to Rule 15d-5 of the Exchange Act. References to the “Company,” “we,” “us” or “our” in this Quarterly Report are to Noble, together with its consolidated subsidiaries, when referring to periods following the Effective Date, and to Legacy Noble, together with its consolidated subsidiaries, when referring to periods prior to and including the Effective Date.
Upon emergence, the Company applied fresh start accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 852 – Reorganizations (“ASC 852”). The application of fresh start accounting resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. Accordingly, our financial statements and notes after the Effective Date are not comparable to our financial statements and notes on and prior to that date. See “Note 3— Reorganization and Fresh Start Accounting” for additional information.
Finco was an indirect, wholly-owned subsidiary of Legacy Noble prior to the Effective Date and has been a direct, wholly-owned subsidiary of Noble since the Effective Date. Noble’s principal asset is all of the shares of Finco. Finco has no public equity outstanding. The consolidated financial statements of Noble include the accounts of Finco, and Noble conducts substantially all of its business through Finco and its subsidiaries. As such, the terms “Predecessor” and “Successor” also refers to Finco, as the context requires.
13

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
The accompanying unaudited condensed consolidated financial statements of Noble and Finco have been prepared pursuant to the rules and regulations of the US 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 have been condensed or omitted pursuant to such rules and regulations. The unaudited financial statements are prepared on a going concern basis and reflect all adjustments that 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, 2020 Condensed Consolidated Balance Sheets presented herein are derived from the December 31, 2020 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, 2020, filed by both Noble and Finco. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
Note 2— Chapter 11 Emergence
On the Petition Date, Legacy Noble and certain of its subsidiaries, including Finco, filed voluntary petitions in the Bankruptcy Court seeking relief under chapter 11 of the Bankruptcy Code. The Plan was confirmed by the Bankruptcy Court on November 20, 2020, and the Debtors emerged from the bankruptcy proceedings on the Effective Date.
On the Effective Date, and pursuant to the terms of the Plan, the Company:
Appointed 5 new members to the Successor’s board of directors to replace all of the directors of the Predecessor, other than the director also serving as President and Chief Executive Officer, who was re-appointed pursuant to the Plan. Subsequent to the Effective Date, an additional director was appointed.
Terminated and cancelled all ordinary shares and equity-based awards of Legacy Noble that were outstanding immediately prior to the Effective Date;
Transferred approximately 31.7 million ordinary shares of Noble with a nominal value of $0.00001 per share (“Ordinary Shares”) to holders of Legacy Noble’s Senior Notes due 2026 (the “Guaranteed Notes”) in the cancellation of the Guaranteed Notes;
Transferred approximately 2.1 million Ordinary Shares, approximately 8.3 million seven-year warrants with Black-Scholes protection (the “Tranche 1 Warrants”) with an exercise price of $19.27 and approximately 8.3 million seven-year warrants with Black-Scholes protection (the “Tranche 2 Warrants”) with an exercise price of $23.13 to holders of Legacy Noble’s then outstanding senior notes (other than the Guaranteed Notes) (the “Legacy Notes”) in cancellation of the Legacy Notes;
Issued approximately 7.7 million Ordinary Shares and $216.0 million principal amount of our senior secured second lien notes (the “Second Lien Notes”) to participants in a rights offering (the “Rights Offering”) at an aggregate subscription price of $200.0 million;
Issued approximately 5.6 million Ordinary Shares to the backstop parties (the “Backstop Parties”) to a Backstop Commitment Agreement, dated October 12, 2020 (the “Backstop Commitment Agreement”), among the Debtors and the Backstop Parties as Holdback Securities (as defined in the Backstop Commitment Agreement);
Issued approximately 1.7 million Ordinary Shares to the Backstop Parties in respect of their backstop commitment to subscribe for Unsubscribed Securities (as defined in the Backstop Commitment Agreement);
Issued approximately 1.2 million Ordinary Shares to the Backstop Parties in connection with the payment of the Backstop Premiums (as defined in the Backstop Commitment Agreement);
Issued 2.8 million five-year warrants with no Black-Scholes protection (the “Tranche 3 Warrants”) with an exercise price of $124.40 to the holders of Legacy Noble’s ordinary shares outstanding prior to the Effective Date;
Entered into a senior secured revolving credit agreement (the “Revolving Credit Agreement”) that provides for a $675.0 million senior secured revolving credit facility (with a $67.5 million sublimit for the issuance of letters of credit thereunder) (the “Revolving Credit Facility”);
Entered into an indenture governing the Second Lien Notes;
Entered into a registration rights agreement with certain parties who received Ordinary Shares under the Plan (the “Equity Registration Rights Agreement”); and
Entered into a registration rights agreement with certain parties who received Second Lien Notes under the Plan.
In addition, Noble entered into an exchange agreement with certain Backstop Parties which provided that, as soon as reasonably practicable after the Effective Date, the other parties to such agreement would deliver to the Company an aggregate of approximately 6.5 million Ordinary Shares issued pursuant to the Plan in exchange for the issuance of penny warrants to purchase up to approximately 6.5 million Ordinary Shares, with an exercise price of $0.01 per share (“Penny Warrants”). This exchange was completed in late February 2021.
14

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Management Incentive Plan. The Plan contemplated that on or after the Effective Date, the Company would adopt a long-term incentive plan and authorize and reserve 7.7 million Ordinary Shares for issuance pursuant to equity incentive awards to be granted under such plan. On February 18, 2021, the Company adopted the long-term incentive plan and authorized and reserved 7.7 million Ordinary Shares for awards to be granted under such plan. As of March 31, 2021, 1,721,821 shares of time-based vesting awards were granted and vest over a three-year period and 1,409,562 shares of performance-based vesting awards were granted and vest over a three-year period. The total award-date fair value of the time-based awards was $28.3 million and the total award-date fair value of the performance-based awards was $28.4 million.
Sources of Cash for Plan Distribution. All cash payments made by the Company under the Plan on the Effective Date were funded from cash on hand, proceeds of the Rights Offering, and proceeds of the Revolving Credit Facility.
Reorganization Items, Net
In accordance with ASC 852, any incremental expenses, gains and losses that are realized or incurred as of or subsequent to the Petition Date and before the Effective Date that are a direct result of the Chapter 11 Cases are recorded under “Reorganization items, net.” The following table summarizes the components of reorganization items included in our Condensed Consolidated Statements of Operations for the period January 1, 2021 through February 5, 2021:
Predecessor
NobleFinco
January 1, 2021 through February 5, 2021January 1, 2021 through February 5, 2021
Professional fees (1)
$(28,739)$(8,095)
Adjustments for estimated allowed litigation claims77,300 
Write-off of unrecognized share-based compensation(4,406)(4,406)
Gain on settlement of liabilities subject to compromise2,556,147 2,556,147 
Loss on fresh start adjustments(2,348,251)(2,348,251)
Total Reorganization items, net$252,051 $195,395 
(1)Payments of $44.2 million and $7.2 million related to professional fees have been presented as cash outflows from operating activities in our Condensed Consolidated Statements of Cash Flows for the period January 1, 2021 through February 5, 2021 for Noble and Finco, respectively.
Liabilities Subject to Compromise
Since the Petition Date, the Company operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. In accordance with ASC 852, on our Condensed Consolidated Balance Sheets prior to the Effective Date, the caption “Liabilities subject to compromise” reflects the expected allowed amount of the pre-petition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount. The Company has considered the chapter 11 motions approved by the Bankruptcy Court with respect to the amount and classification of its pre-petition liabilities. The Company evaluated and adjusted the amount and classification of its pre-petition liabilities through the Effective Date.

Note 3— Reorganization and Fresh Start Accounting
In connection with our emergence from bankruptcy and in accordance with ASC 852, Noble and Finco qualified for and applied fresh start accounting on the Effective Date. Noble and Finco were required to apply fresh start accounting because (i) the holders of existing Legacy Noble voting shares received less than 50% of the voting shares of the Successor, and (ii) the reorganization value of Noble's and Finco's assets, each of which approximated $1.7 billion, immediately prior to confirmation of the Plan was less than the corresponding post-petition liabilities and allowed claims, each of which approximated $4.0 billion. Applying fresh start accounting resulted in new reporting entities with no beginning retained earnings or accumulated deficit. Accordingly, our financial statements and notes after the Effective Date are not comparable to our financial statements and notes on and to prior to that date.
With the application of fresh start accounting, we allocated the reorganization value to our individual assets and liabilities (except for deferred income taxes) based on their estimated fair values in conformity with ASC Topic 805, Business Combinations. The amount of deferred taxes was determined in accordance with ASC Topic 740, Income Taxes and ASC 852. The Effective Date fair values of our assets and liabilities differed materially from their recorded values as reflected on the historical balance sheets.
15

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
As described in "Note 1— Organization and Basis of Presentation," Noble and Finco are referred to as Successor, as the context requires, and includes the financial position and results of operations of the reorganized Noble and Finco subsequent to February 5, 2021. References to Predecessor relate to the financial position and results of operations of Legacy Noble and Finco prior to, and including, February 5, 2021.
Reorganization Value and Valuation of Assets
The reorganization value represents the fair value of the Successor’s and Finco’s total assets and was derived from the enterprise value, which represents the estimated fair value of an entity’s long-term debt and equity. As set forth in the Plan, the enterprise value of the reorganized Debtors was estimated to be in the range of $1.1 billion to $1.6 billion with a midpoint of $1.3 billion. The enterprise value range was determined by using a discounted cash flow analysis and a peer group trading analysis, excluding unrestricted cash at emergence. Based on the estimates and assumptions discussed above, we estimated the enterprise value to be the midpoint of the range of estimated enterprise value of $1.3 billion.
The following table reconciles the enterprise value to the Successor common stock as of the Effective Date:
February 5, 2021
Enterprise Value$1,300,300 
Plus: Cash and cash equivalents111,968 
Less: Fair value of debt(393,500)
Fair Value of Successor Common Stock$1,018,768 
Shares issued upon emergence50,000 
Per share value$20.38 

The following table reconciles the enterprise value to the reorganization value as of the Effective Date:
February 5, 2021
Enterprise Value$1,300,300 
Plus: Cash and cash equivalents111,968 
Plus: Non-interest bearing current liabilities185,410 
Plus: Non-interest bearing non-current liabilities108,268 
Reorganization value of Successor assets$1,705,946 
With the assistance of financial advisors, we determined the enterprise and corresponding equity value of the Successor by calculating the present value of future cash flows based on our financial projections. The enterprise value and corresponding equity value are dependent upon achieving future financial results set forth in our valuations, as well as the realization of certain other assumptions. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, the estimates, assumptions, valuations or financial projections may not be realized and actual results could vary materially.
Valuation Process
Under the application of fresh start accounting and with the assistance of valuation experts, we conducted an analysis of the Condensed Consolidated Balance Sheet to determine if any of the Company’s net assets would require a fair value adjustment as of the Effective Date. The results of our analysis indicated that our principal assets, which include mobile offshore drilling units, certain intangibles and debt issued at emergence would require a fair value adjustment on the Effective Date. The rest of the Company’s net assets were determined to have carrying values that approximated fair value on the Effective Date. Further details regarding the valuation process is described further below.
16

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Property, Plant and Equipment
The valuation of the Company’s mobile offshore drilling units and other related tangible assets was determined by using a combination of (1) the discounted cash flows expected to be generated from our drilling assets over their remaining useful lives and (2) the cost to replace our drilling assets, as adjusted by the current market for similar offshore drilling assets. Assumptions used in our assessment included, but were not limited to, future marketability of each unit in light of the current market conditions and its current technical specifications, timing of future contract awards and expected operating dayrates, operating costs, utilization rates, tax rates, discount rates, capital expenditures, market values, weighting of market values, reactivation costs, estimated economic useful lives and, in certain cases, our belief that a drilling unit is no longer marketable and is unlikely to return to service in the near to medium term. We included an allocation for corporate overhead when calculating the discounted cash flows expected to be generated from our drilling assets over their remaining useful lives. The cash flows were discounted at our weighted average cost of capital (“WACC”), which was derived from a blend of our after-tax cost of debt and our cost of equity, and computed using public share price information for similar offshore drilling market participants, certain U.S. Treasury rates, and certain risk premiums specific to the Company.
The valuation of our remaining property and equipment, including owned real estate, construction in progress assets, and other equipment essential to our operations, was determined utilizing a combination of replacement cost and market valuation approaches. Specifically, the land was valued using a sales comparison method of the market approach, in which we utilized recent sales of comparable properties to estimate the fair value on a U.S. Dollar per acre basis. The remaining property and equipment were valued using a cost approach, in which we estimated the replacement cost of the assets and applied adjustments for physical depreciation and obsolescence, where applicable, to arrive at a fair value.
Intangible Assets
At emergence, we held contracts for drilling services related to certain long-term contracts. Given the contract dayrates relative to market dayrates at the Effective Date, we determined the contracts represent favorable contract intangible assets. Based on a discounted cash flow analysis utilizing the dayrate differential between current market dayrates and the contract dayrates, and a risk-adjusted discount rate of 17%, we determined the aggregate fair value of our contracts for these certain contracts to be $113.4 million above the fair value of the contracts if they were priced at current market dayrates on the Effective Date. The dayrate differential on these contracts as compared to prior years was primarily driven by the combination of continued market oversupply of offshore drilling units, the volatility in oil and gas price and the unprecedented crude product consumption levels experienced in 2020.
Debt
The valuations of the Company’s Revolving Credit Facility and Second Lien Notes were based on relevant market data as of the Effective Date and the terms of each of the respective instruments. Considering the interest rates and implied yields for the Revolving Credit Facility and Second Lien Notes were within a range of comparable market yields (with considerations for term and seniority), fair value adjustments were recorded relating to each of the instruments .
Successor Warrants
On the Effective Date, the Company issued Tranche 1 Warrants and Tranche 2 Warrants to certain former bondholders as part of the settlement of their pre-petition claims. The Company also issued Tranche 3 Warrants to holders of the Predecessor’s ordinary shares. The fair values of the warrants on the Effective Date were determined using an options pricing model while considering the contractual terms for each respective tranche, including the mandatory exercise provisions related to Tranche 1 Warrants and Tranche 2 Warrants. The key market data assumptions for the options pricing model are the estimated volatility and the risk-free rate. The volatility assumption was estimated using market data for similar offshore drilling market participants with consideration for differences in size and leverage. The risk-free rate assumption was based on US Constant Maturity Treasury rates as of the Effective Date.

17

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Condensed Consolidated Balance Sheet at Emergence
The adjustments set forth in the following Condensed Consolidated Balance Sheet as of February 5, 2021 reflect the consummation of the transactions contemplated by the Plan and carried out by the Company ("Reorganization Adjustments") and the fair value adjustments as a result of the application of fresh start accounting ("Fresh Start Adjustments"). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine fair values and significant assumptions or inputs.

The following table reflects the reorganization and application of ASC 852 on our condensed consolidated balance sheet as of February 5, 2021:
PredecessorReorganization AdjustmentsFresh Start AdjustmentsSuccessor
ASSETS 
Current assets
Cash and cash equivalents$317,962 $(205,994)(a)$$111,968 
Accounts receivable, net189,207 189,207 
Taxes receivable32,556 32,556 
Prepaid expenses and other current assets63,056 (20,302)(b)(10,073)(m)32,681 
Total current assets602,781 (226,296)(10,073)366,412 
Intangible assets113,389 (n)113,389 
Property and equipment, at cost4,787,661 (3,631,936)(o)1,155,725 
Accumulated depreciation(1,221,033)1,221,033 (o)
Property and equipment, net3,566,628 (2,410,903)1,155,725 
Other assets69,940 10,983 (c)(10,503)(m)70,420 
Total assets$4,239,349 $(215,313)$(2,318,090)$1,705,946 
LIABILITIES AND EQUITY
Current liabilities
Accounts payable$89,215 $(7,266)(d)$$81,949 
Accrued payroll and related costs35,615 35,615 
Taxes payable34,211 34,211 
Other current liabilities64,943 21,305 (e)(52,613)(m)33,635 
Total current liabilities223,984 14,039 (52,613)185,410 
Long-term debt352,054 (f)41,446 (p)393,500 
Deferred income taxes9,303 (17,328)(g)29,550 (q)21,525 
Other liabilities108,489 4,659 (h)(26,405)(m)86,743 
Liabilities subject to compromise4,143,812 (4,143,812)(i)
Total liabilities4,485,588 (3,790,388)(8,022)687,178 
Shareholders’ equity
Common stock (Predecessor)2,511 (2,511)(j)— — 
Common stock (Successor)— (k)— 
Additional paid-in capital (Predecessor)815,505 (815,505)(j)— — 
Additional paid-in capital (Successor)— 1,018,767 (k)— 1,018,767 
Accumulated deficit(1,006,351)3,374,323 (l)(2,367,972)(r)
Accumulated other comprehensive loss(57,904)57,904 (s)
Total shareholders’ equity(246,239)3,575,075 (2,310,068)1,018,768 
Total liabilities and equity$4,239,349 $(215,313)$(2,318,090)$1,705,946 

18

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Reorganization Adjustments
(a)Represents the reorganization adjustment to cash and cash equivalents
Proceeds from Rights Offering$200,000 
Proceeds from the Revolving Credit Facility, net of issuance costs167,361 
Transfer of cash from restricted cash300 
Payment of professional service fees(23,261)
Payment of the pre-petition revolving credit facility principal and accrued interest(550,019)
Deconsolidation of NHUK(300)
Payment of recurring debt fees(75)
Change in cash and cash equivalents$(205,994)
(b)Represents the reorganization adjustment for the following:
Payment of professional service fees from escrow$(12,380)
Payment of Paragon litigation settlement form escrow(7,700)
Transfer of restricted cash to cash(300)
Adjustment to miscellaneous receivables related to the deconsolidation of NHUK upon emergence78 
Change in prepaid expenses and other current assets$(20,302)
(c)Adjustments to other assets relates to capitalization of long-term debt issuance costs related to the Revolving Credit Facility of $11.1 million and the impact of reorganization adjustments on deferred tax assets of $(0.1) million.
(d)Adjustments to accounts payable related to the payment of professional fees $(15.2) million and the reinstatement of trade payables from liabilities subject to compromise of $8.0 million.
(e)Adjustment of $21.3 million to other current liabilities related to the reinstatement of liabilities subject to compromise.
(f)Represents $352.1 million of outstanding borrowings, net of financing costs, under the Second Lien Notes and Revolving Credit Facility.
(g)Represents the write-off of $(17.3) million deferred income taxes as the result of the Company’s tax restructuring.
(h)Represents cancellation of $(0.1) million cash-based compensation plans and the reinstatement of $4.7 million right-of-use lease liabilities.
19

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
(i)Liabilities subject to compromise settled or reinstated in accordance with the Plan and the resulting gain were determined as follows:
4.900% senior notes due Aug. 2020$62,535 
4.625% senior notes due Mar. 202179,937 
3.950% senior notes due Mar. 202221,213 
7.750% senior notes due Jan. 2024397,025 
7.950% senior notes due Apr. 2025450,000 
7.875% senior notes due Feb. 2026750,000 
6.200% senior notes due Aug. 2040393,597 
6.050% senior notes due Mar. 2041395,000 
5.250% senior notes due Mar. 2042483,619 
8.950% senior notes due Apr. 2045400,000 
5.958% revolving credit facility maturing Jan. 2023545,000 
Accrued and unpaid interest110,300 
Protection and indemnity insurance liabilities25,669 
Accounts payable and other payables8,163 
Estimated loss on litigation15,700 
Lease liabilities6,054 
Total consolidated liabilities subject to compromise4,143,812 
Issuance of Successor common stock(854,909)
Issuance of Successor warrants to certain Predecessor creditors(141,029)
Payment of the pre-petition revolving credit facility principal and accrued interest(550,020)
Payment of Paragon litigation settlement from escrow(7,700)
Reinstatement of Transocean litigation liability(8,000)
Reinstatement of protection and indemnity insurance liabilities(11,791)
Reinstatement of trade payables and right-of-use lease liabilities(14,216)
Gain on settlement of liabilities subject to compromise$2,556,147 

(j)Represents the cancellation of the Predecessor’s common stock of $(2.5) million and Additional paid-in capital of $(815.5) million.

20

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
(k)Represents the reorganization adjustments to common stock and additional paid in capital
Par value of 50 million shares of new common stock issued$
Capital in excess of par value of 50 million issued and authorized shares of new common stock issued875,931 
Fair value of new warrants issued142,836 
Total Successor equity issued on the Effective Date$1,018,768 
(l)Represents the reorganization adjustments to accumulated deficit:
Gain on settlement of liabilities subject to compromise$2,556,147 
Professional fees and success fees(15,017)
Write-off of unrecognized share-based compensation(4,406)
Reorganization items, net2,536,724 
Cancellation of Predecessor common stock and additional paid-in capital820,299 
Cancellation of Predecessor cash and equity compensation plans2,183 
Issuance of Successor warrants to Predecessor equity holders(1,807)
Deconsolidation of NHUK(222)
Recognition of recurring debt fees(75)
Tax impacts of reorganization17,221 
Net impact to Accumulated Deficit$3,374,323 

Fresh Start Adjustments
(m)Reflects adjustments to capitalized deferred costs, deferred revenue and pension balances due to the application of fresh start accounting as follows:
Prepaid expenses and other current assetsOther assetsOther current liabilitiesOther liabilities
Deferred contract assets and revenues$(10,073)$(2,616)$(52,616)$(20,320)
Write-off of certain financing costs(6,238)
Pension assets and obligations(1,010)(6,085)
Fair value adjustments to other assets(639)
$(10,073)$(10,503)$(52,613)$(26,405)
(n)Reflects the fair value adjustment of $113.4 million to record an intangible asset for favorable contracts with customers.
(o)Reflects the fair value adjustment of $2.4 billion to property and equipment of the Predecessor. The following table presents a comparison of the historical and new fair values upon emergence:
Historical ValueFair Value
Drilling equipment and facilities$4,355,384 $1,070,931 
Construction in progress231,626 75,159 
Other200,651 9,635 
Less: accumulated depreciation(1,221,033)
Property and equipment, at cost$3,566,628 $1,155,725 
(p)Reflects a fair value adjustment of $41.4 million to the carrying value of the Second Lien Notes due to application of fresh start accounting.
(q)New deferred tax balances of $29.6 million were established for favorable contracts with customers due to application of fresh start accounting.
21

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
(r)The following table summarizes the cumulative impact of the fresh start adjustments, as discussed above, the elimination of the Predecessor’s accumulated other comprehensive loss, and the adjustments required to eliminate accumulated deficit:
Fair value adjustment to Prepaid and other current assets$(10,073)
Fair value adjustment to Intangible assets113,389 
Fair value adjustment to Property and equipment, net(2,410,903)
Fair value adjustment to Other assets(10,503)
Fair value adjustment to Other current liabilities52,613 
Fair value adjustment to Long-term debt(41,446)
Fair value adjustment to Deferred income taxes(9,829)
Fair value adjustment to Other liabilities26,405 
Derecognition of Predecessor Accumulated other comprehensive loss(57,904)
Total fresh start adjustments included in Reorganization items, net(2,348,251)
Tax impact of fresh start adjustments(19,721)
Net change in accumulated deficit$(2,367,972)
(s)Reflects $57.9 million for the derecognition of Predecessor Accumulated other comprehensive loss through Reorganization items, net.
Note 4— Accounting Pronouncements
Accounting Standards Adopted
In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, which amends ASC Topic 740, Income Taxes. This update simplifies the accounting for income taxes by removing certain exceptions to general principles. The amendment is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, and is required to be adopted on a retrospective basis for all periods presented.
We adopted ASU No. 2019-12, effective January 1, 2021. The adoption of this guidance did not have a material impact on our condensed consolidated financial statements.
Recently Issued Accounting Standards
With the exception of the updated standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our condensed consolidated financial statements.
22

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 5— Income (Loss) Per Share
The following table presents the computation of basic and diluted loss per share for Noble:
SuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Numerator: 
Basic
Net income (loss)$(18,224)$250,228 $(1,062,677)
Diluted  
Net income (loss)$(18,224)$250,228 $(1,062,677)
Denominator:  
Weighted average shares outstanding - basic50,000 251,115 250,047 
Weighted average shares outstanding - diluted50,000 256,571 250,047 
Per share data  
Basic:
Net income (loss)$(0.36)$1.00 $(4.25)
Diluted:
Net income (loss)$(0.36)$0.98 $(4.25)
Only those items having a dilutive impact on our basic loss per share are included in diluted loss per share. For the period from February 6, 2021 through March 31, 2021, the period from January 1, 2021 through February 5, 2021, and the three months ended March 31, 2020, approximately 22.6 million, 0.6 million, and 12.4 million share-based awards, respectively, were excluded from diluted loss per share since the effect would have been anti-dilutive.
Share capital
Successor Share capital
On the Effective Date, pursuant to the Plan, Noble issued 50 million Ordinary Shares. Subsequent to the Effective Date, approximately 6.5 million Ordinary Shares were exchanged for Penny Warrants to purchase up to approximately 6.5 million Ordinary shares, with an exercise price of $0.01 per share. Ordinary Shares issuable upon the exercise of Penny Warrants were included in the number of outstanding shares used for the computation of basic net loss per share prior to the exercise of those warrants. As of March 31, 2021, Noble had approximately 43.5 million Ordinary Shares outstanding as compared to approximately 251.1 million Legacy Noble ordinary shares outstanding and trading at December 31, 2020. Pursuant to the Memorandum of Association of Noble Corporation, the share capital of Noble is $6,000 divided into 500,000,000 ordinary shares of a par value of $0.00001 each and 100,000,000 shares of a par value of $0.00001, each of such class or classes having the rights as the board of directors of Noble (the “Board”) may determine from time to time.
Predecessor Share capital
As discussed in “Note 2— Chapter 11 Emergence,” on the Effective Date and pursuant to the terms of the Plan, all of the Predecessor’s ordinary shares were cancelled. In accordance with the Plan, all agreements, instruments and other documents evidencing, relating to or otherwise connected with any of Legacy Noble’s equity interests outstanding prior to the Effective Date, including all equity-based awards, were cancelled and all such equity interests have no further force or effect after the Effective Date. Pursuant to the Plan, the holders of Legacy Noble’s ordinary shares outstanding prior to the Effective Date received their pro rata share of the Tranche 3 Warrants to acquire Ordinary Shares.
23

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 6— Property and Equipment
Property and equipment, at cost consisted of the following:
SuccessorPredecessor
March 31, 2021December 31, 2020
Drilling equipment and facilities$1,085,292 $4,476,960 
Construction in progress83,591 99,812 
Other9,805 200,925 
Property and equipment, at cost$1,178,688 $4,777,697 
During the period from February 6 through March 31, 2021 and the period from January 1 through February 5, 2021, we recognized 0 impairment charges to our long-lived assets. During the three months ended March 31, 2020, we recognized a non-cash loss on impairment of $1.1 billion, related to our long-lived assets. See “Note 10— Loss on Impairment” for additional information.
Note 7— Debt
Post-emergence Debt
Senior Secured Revolving Credit Facility
On the Effective Date, Finco and Noble International Finance Company (“NIFCO”) entered into the Revolving Credit Agreement providing for the $675.0 million Revolving Credit Facility and canceled all debt that existed immediately prior to the Effective Date. The Revolving Credit Facility matures on July 31, 2025. Subject to the satisfaction of certain conditions, Finco may from time to time designate one or more of Finco’s other wholly-owned subsidiaries as additional borrowers under the Revolving Credit Agreement (collectively with Finco and NIFCO, the “Borrowers”). As of the Effective Date, $177.5 million of loans were outstanding, and $8.8 million of letters of credit were issued, under the Revolving Credit Facility.
All obligations of the Borrowers under the Revolving Credit Agreement, certain cash management obligations and certain swap obligations are unconditionally guaranteed, on a joint and several basis, by Finco and certain of its direct and indirect subsidiaries (collectively with the Borrowers, the “Credit Parties”), including a guarantee by each Borrower of the obligations of each other Borrower under the Revolving Credit Agreement. All such obligations, including the guarantees of the Revolving Credit Facility, are secured by senior priority liens on substantially all assets of, and the equity interests in, each Credit Party, including all of the rigs owned by the Company as of the Effective Date or acquired thereafter and certain assets related thereto, in each case, subject to certain exceptions and limitations described in the Revolving Credit Agreement.
The loans outstanding under the Revolving Credit Facility bear interest at a rate per annum equal to the applicable margin plus, at Finco’s option, either: (i) the reserve-adjusted LIBOR or (ii) a base rate, determined as the greatest of (x) the prime loan rate as published in the Wall Street Journal, (y) the federal funds effective rate plus ½ of 1%, and (z) the reserve-adjusted one-month LIBOR plus 1%. The applicable margin is initially 4.75% per annum for LIBOR loans and 3.75% per annum for base rate loans and will be increased by 50 basis points after July 31, 2024, and may be increased by an additional 50 basis points under certain conditions described in the Revolving Credit Agreement.
The Borrowers are required to pay a quarterly commitment fee to each lender under the Revolving Credit Agreement, which accrues at a rate per annum equal to 0.50% on the average daily unused portion of such lender’s commitments under the Revolving Credit Facility. The Borrowers are also required to pay customary letter of credit and fronting fees.
Borrowings under the Revolving Credit Agreement may be used for working capital and other general corporate purposes. Availability of borrowings under the Revolving Credit Agreement is subject to the satisfaction of certain conditions, including restrictions on borrowings if, after giving effect to any such borrowings and the application of the proceeds thereof, (i) the aggregate amount of Available Cash (as defined in the Revolving Credit Agreement) would exceed $100 million, (ii) the Consolidated First Lien Net Leverage Ratio (as defined in the Revolving Credit Agreement) would be greater than 5.50 to 1.00 and the aggregate principal amount outstanding under the Revolving Credit Facility would exceed $610 million, or (iii) the Asset Coverage Ratio (as described below) would be less than 2.00 to 1.00.
24

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Mandatory prepayments and, under certain circumstances, commitment reductions are required under the Revolving Credit Facility in connection with (i) certain asset sales, asset swaps and events of loss (subject to reinvestment rights if no event of default exists) and (ii) certain debt issuances. Available Cash in excess of $150 million is also required to be applied periodically to prepay loans (without a commitment reduction). The loans under the Revolving Credit Facility may be voluntarily prepaid, and the commitments thereunder voluntarily terminated or reduced, by the Borrowers at any time without premium or penalty, other than customary breakage costs.
The Revolving Credit Agreement obligates Finco and its restricted subsidiaries to comply with the following financial maintenance covenants:
as of the last day of each fiscal quarter in 2021, Adjusted EBITDA (as defined in the Revolving Credit Agreement) is not permitted to be lower than (i) $70 million for the four fiscal quarter period ending March 31, 2021, (ii) $40 million for the four fiscal quarter period ending June 30, 2021 and (iii) $25 million for the four fiscal quarter periods ending on each of September 30, 2021 and December 31, 2021;
as of the last day of each fiscal quarter ending on or after March 31, 2022, the ratio of Adjusted EBITDA to Cash Interest Expense (as defined in the Revolving Credit Agreement) is not permitted to be less than (i) 2.00 to 1.00 for each four fiscal quarter period ending on or after March 31, 2022 until June 30, 2024, and (ii) 2.25 to 1.00 for each four fiscal quarter period ending thereafter; and
for each fiscal quarter ending on or after June 30, 2021, the ratio of (x) Asset Coverage Aggregate Rig Value (as defined in the Revolving Credit Agreement) to (y) the aggregate principal amount of loans and letters of credit outstanding under the Revolving Credit Facility (the “Asset Coverage Ratio”) as of the last day of any such fiscal quarter is not permitted to be less than 2.00 to 1.00.
The Revolving Credit Facility contains affirmative and negative covenants, representations and warranties and events of default that the Company considers customary for facilities of this type.
Second Lien Notes Indenture
On the Effective Date, pursuant to the Backstop Commitment Agreement and in accordance with the Plan, Noble and Finco consummated the Rights Offering of Second Lien Notes and associated Ordinary Shares at an aggregate subscription price of $200.0 million.
An aggregate principal amount of $216 million of Second Lien Notes was issued in the Rights Offering, which includes the aggregate subscription price of $200.0 million plus a backstop fee of $16.0 million which was paid in kind. The Second Lien Notes mature on February 15, 2028. The Second Lien Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured second-priority basis, by the direct and indirect subsidiaries of Finco that are Credit Parties under the Revolving Credit Facility. The Second Lien Notes and such guarantees are secured by senior priority liens on the assets subject to liens securing the Revolving Credit Facility, including the equity interests in Finco and each guarantor of the Second Lien Notes, all of the rigs owned by the Company as of the Effective Date or acquired thereafter, certain assets related thereto, and substantially all other assets of Finco and such guarantors, in each case, subject to certain exceptions and limitations.
Interest on the Second Lien Notes accrues, at Finco’s option, at a rate of: (i) 11% per annum, payable in cash; (ii) 13% per annum, with 50% of such interest to be payable in cash and 50% of such interest to be payable by issuing additional Second Lien Notes (“PIK Notes”); or (iii) 15% per annum, with the entirety of such interest to be payable by issuing PIK Notes. Finco shall pay interest semi-annually in arrears on February 15 and August 15 of each year, commencing August 15, 2021. For the period ended March 31, 2021, we assumed we will make the next interest payment by issuing PIK Notes and accrued interest at a rate of 15%.
On or after February 15, 2024, Finco may redeem all or part of the Second Lien Notes at fixed redemption prices (expressed as percentages of the principal amount), plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Finco may also redeem the Second Lien Notes, in whole or in part, at any time and from time to time on or before February 14, 2025 at a redemption price equal to 106% of the principal amount plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date, plus a “make-whole” premium. Notwithstanding the foregoing, if a Change of Control (as defined in the Second Lien Notes Indenture) occurs prior to (but not including) February 15, 2024, then, within 120 days of such Change of Control, Finco may elect to purchase all remaining outstanding Second Lien Notes at a redemption price equal to 106% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.
The Second Lien Notes contain covenants and events of default that the Company considers customary for notes of this type.
25

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Pre-emergence Debt
2017 Credit Facility
In December 2017, Noble Cayman Limited, a Cayman Islands company and a wholly-owned indirect subsidiary of Finco; Noble International Finance Company, a Cayman Islands company and a wholly-owned indirect subsidiary of Finco; and Noble Holding UK Limited, a company incorporated under the laws of England and Wales and a wholly-owned direct subsidiary of Legacy Noble (“NHUK”), as parent guarantor, entered into a senior unsecured credit agreement (as amended, the “2017 Credit Facility”). In July 2019, we executed a first amendment to our 2017 Credit Facility, which, among other things, reduced the maximum aggregate amount of commitments thereunder from $1.5 billion to $1.3 billion.
Prior to the filing of the Chapter 11 Cases, the 2017 Credit Facility was scheduled to mature in January 2023. Borrowings were available for working capital and other general corporate purposes. The 2017 Credit Facility provided for a letter of credit sub-facility in the amount of $15.0 million, with the ability to increase such amount up to $500.0 million with the approval of the lenders. The 2017 Credit Facility had provisions that varied the applicable interest rates for borrowings based upon our debt ratings. Borrowings under the 2017 Credit Facility bore interest at LIBOR plus an applicable margin. NHUK guaranteed the obligations of the borrowers under the 2017 Credit Facility. In addition, certain indirect subsidiaries of Legacy Noble that owned rigs were guarantors under the 2017 Credit Facility.
The filing of the Chapter 11 Cases constituted events of default that accelerated the Company’s obligations under the indentures governing our outstanding senior notes and under our 2017 Credit Facility. In addition, the unpaid principal and interest due under our indentures and the 2017 Credit Facility became immediately due and payable. However, any efforts to enforce such payment obligations with respect to our senior notes and 2017 Credit Facility were automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement were subject to the applicable provisions of the Bankruptcy Code. See “Note 1— Organization and Basis of Presentation” for additional information.
The Company had $545.0 million outstanding under the 2017 Credit Facility prior to the Effective Date. On the Effective Date, all outstanding obligations under the 2017 Credit Facility were terminated and the holders of claims under the 2017 Credit Facility had such obligations repaid using cash on hand, repaid using proceeds from the Rights Offering, or refinanced through the Revolving Credit Facility. On the Effective Date, all liens and security interests granted to secure such obligations were terminated and are of no further force and effect.
Seller Loans     
In February 2019, we purchased the Noble Joe Knight for $83.8 million with a $53.6 million seller-financed secured loan (the “2019 Seller Loan”). In September 2018, we purchased the Noble Johnny Whitstine for $93.8 million with a $60.0 million seller-financed secured loan (the “2018 Seller Loan” and, together with the 2019 Seller Loan, the “Seller Loans”).
In April 2020, the Company agreed with the lender under the Seller Loans to pay off 85% of the outstanding principal amount of the Seller Loans in exchange for a discount to the outstanding loan balance. On April 20, 2020, the Company made a payment of $48.1 million under the 2019 Seller Loan and $53.6 million under the 2018 Seller Loan, and, upon the lender’s receipt of such payment, interest ceased accruing, and the financial covenants set forth in the agreements relating to the Seller Loans ceased to apply. On July 20, 2020, at the conclusion of the 90-day period following the payment date, all outstanding amounts were reduced to 0, all security was released, and the Seller Loans were terminated.
Senior Notes
On the Effective Date, in accordance with the Plan, all outstanding obligations under our senior notes were cancelled and the indentures governing such obligations were cancelled, except to the limited extent expressly set forth in the Plan. See “Note 2— Chapter 11 Emergence” for additional information.
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 debt instruments 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 carrying amount of the Revolving Credit Facility approximates fair value as the interest rate is variable and reflective of market rates. All remaining fair value disclosures are presented in “Note 13— Fair Value of Financial Instruments.”
26

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
The following table presents the carrying value, net of unamortized debt issuance costs and discounts or premiums, and the estimated fair value of our total debt, not including the effect of unamortized debt issuance costs, respectively:
SuccessorPredecessor
March 31, 2021 (1)
December 31, 2020 (1)
Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Senior secured notes:
11.000% Second Lien Notes due February 2028$216,000 $226,260 $$
Senior unsecured notes:
4.900% Senior Notes due August 202062,535 1,366 
4.625% Senior Notes due March 202179,936 1,596 
3.950% Senior Notes due March 202221,213 354 
7.750% Senior Notes due January 2024397,025 7,925 
7.950% Senior Notes due April 2025450,000 8,348 
7.875% Senior Notes due February 2026750,000 301,935 
6.200% Senior Notes due August 2040393,596 7,966 
6.050% Senior Notes due March 2041395,002 7,327 
5.250% Senior Notes due March 2042483,619 9,701 
8.950% Senior Notes due April 2045400,000 7,420 
Credit facility:
Senior Secured Revolving Credit Facility matures July 2025177,500 177,500 
2017 Credit Facility matures January 2023545,000 545,000 
Total debt393,500 403,760 3,977,926 898,938 
Less: Current maturities of long-term debt
Long-term debt$393,500 $403,760 $$
(1) At March 31, 2021, there were 0 unamortized debt issuance costs and discounts or premiums associated with the Second Lien Notes, and $12.5 million of unamortized debt issuance costs associated with the Revolving Credit Facility. At December 31, 2020, all unamortized debt issuance costs and discounts or premiums associated with Predecessor debt had been written off.
As discussed in “Note 1— Organization and Basis of Presentation,” since the Petition Date, the Company operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. Accordingly, all of our long-term debt obligations were presented as “Liabilities subject to compromise” on our Condensed Consolidated Balance Sheet at December 31, 2020.
27

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 8— Accumulated Other Comprehensive Income (Loss)
The following table presents the changes in the accumulated balances for each component of “Accumulated other comprehensive income (loss)” (“AOCI”) for the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020. All amounts within the table are shown net of tax.
Defined Benefit Pension Items (1)
Foreign Currency ItemsTotal
Balance at 12/31/2019 (Predecessor)$(40,635)$(17,754)$(58,389)
Activity during period:
Other comprehensive income (loss) before reclassifications(2,136)(2,136)
Amounts reclassified from AOCI568 568 
Net other comprehensive income (loss)568 (2,136)(1,568)
Balance at 3/31/2020 (Predecessor)$(40,067)$(19,890)$(59,957)
Balance at 12/31/2020 (Predecessor)$(39,737)$(18,275)$(58,012)
Activity during period:
Other comprehensive income (loss) before reclassifications(116)(116)
Amounts reclassified from AOCI224 224 
Net other comprehensive income (loss)224 (116)108 
Cancellation of Predecessor equity39,513 18,391 57,904 
Balance at 2/5/2021 (Predecessor)$$$
Balance at 2/6/2021 (Successor)$$$
Activity during period:
Other comprehensive income (loss) before reclassifications
Amounts reclassified from AOCI
Net other comprehensive income (loss)
Balance at 3/31/2021 (Successor)$$$
(1)Defined benefit pension items relate to actuarial changes and the amortization of prior service costs. Reclassifications from AOCI are recognized as expense on our Condensed Consolidated Statements of Operations through “Other income (expense).” See “Note 12— Employee Benefit Plans” for additional information.
28

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 9— Revenue and Customers
Contract Balances
Accounts receivable are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. Payment terms on invoiced amounts are typically range from 30 to 60 days. Current contract asset and liability balances are included in “Prepaid expenses and other current assets” and “Other current liabilities,” respectively, and noncurrent contract assets and liabilities are included in “Other assets” and “Other liabilities,” respectively, on our Condensed Consolidated Balance Sheets.
The following table provides information about contract assets and contract liabilities from contracts with customers:
SuccessorPredecessor
March 31, 2021December 31, 2020
Current contract assets$846 $10,687 
Noncurrent contract assets3,174 
Total contract assets846 13,861 
Current contract liabilities (deferred revenue)(2,845)(34,990)
Noncurrent contract liabilities (deferred revenue)(8,571)(24,896)
Total contract liabilities$(11,416)$(59,886)
29

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Significant changes in the remaining performance obligation contract assets and the contract liabilities balances for the three months ended March 31, 2021 and 2020 are as follows:
Contract AssetsContract Liabilities
Net balance at 12/31/2019 (Predecessor)$30,800 $(65,055)
Amortization of deferred costs(8,799)— 
Additions to deferred costs2,578 — 
Amortization of deferred revenue— 15,828 
Additions to deferred revenue— (19,479)
Total(6,221)(3,651)
Net balance at 3/31/2020 (Predecessor)$24,579 $(68,706)
Net balance at 12/31/2020 (Predecessor)$13,861 $(59,886)
Amortization of deferred costs(1,607)— 
Additions to deferred costs432 — 
Amortization of deferred revenue— 4,142 
Additions to deferred revenue— (25,479)
Fresh start accounting revaluation(12,686)72,936 
Total$(13,861)$51,599 
Net balance at 2/5/21 (Predecessor)$$(8,287)
Net balance at 2/6/21 (Successor)$$(8,287)
Additions to deferred costs888 — 
Amortization of deferred costs(42)— 
Amortization of deferred revenue— 
Additions to deferred revenue— (3,129)
Total846 (3,129)
Net balance at 3/31/2021 (Successor)$846 $(11,416)
30

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Customer Contract Intangible Assets
Upon emergence from the Chapter 11 Cases, the Company recognized a fair value adjustment of $113.4 million related to intangible assets for certain favorable customer contracts. These intangible assets will be amortized as a reduction of contract drilling services revenue for the remainder of the contracts, 18 months and 32 months, respectively. As of March 31, 2021, the net carrying amount was $104.9 million, $113.4 million gross less $8.5 million accumulated amortization. The expected remaining amortization is as follows: $43.1 million for the nine-month period ending December 31, 2021 and $43.5 million and $18.3 million for the years ending December 31, 2022 and 2023, respectively.We assess the recoverability of the unamortized balance when indicators of impairment are present. Should the review indicate that the carrying value is not fully recoverable, the portion not fully recoverable would be recognized as an impairment loss.
Transaction Price Allocated to the Remaining Performance Obligations
The following table reflects revenue expected to be recognized in the future related to unsatisfied performance obligations, by rig type, as of March 31, 2021:    
For the Years Ended December 31,
2021 (1)
2022202320242025 and beyondTotal
Floaters$56 $11,309 $51 $$$11,416 
Jackups
Total$56 $11,309 $51 $$$11,416 
(1) Represents a nine-month period beginning April 1, 2021.
The revenue included above consists of expected mobilization, demobilization, and upgrade revenue for unsatisfied performance obligations. The amounts are derived from the specific terms within drilling contracts that contain such provisions, and the expected timing for recognition of such revenue is based on the estimated start date and duration of each respective contract based on information known at March 31, 2021. The actual timing of recognition of such amounts may vary due to factors outside of our control. We have taken the optional exemption, permitted by accounting standards, to exclude disclosure of the estimated transaction price related to the variable portion of unsatisfied performance obligations at the end of the reporting period, as our transaction price is based on a single performance obligation consisting of a series of distinct hourly, or more frequent, periods, the variability of which will be resolved at the time of the future services.
Disaggregation of Revenue
The following table provides information about contract drilling revenue by rig types:
SuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Floaters$56,048 $50,057 $125,336 
Jackups28,581 23,994 142,028 
Total$84,629 $74,051 $267,364 
Note 10— Loss on Impairment
Asset Impairments
We evaluate our property and equipment for impairment whenever there are changes in facts that suggest that the value of the asset is not recoverable. During the period from February 6 through March 31, 2021 and the period from January 1 through February 5, 2021, 0 impairment was recognized on our fleet.
In connection with the preparation of our financial statements for the first quarter of 2020, we conducted a review of our fleet to determine recoverability and recognized approximately $1.1 billion in impairment charges for 4 floaters, and $5.5 million of impairment charges related to certain capital spare equipment. For our impaired floaters, we estimated the fair value by applying the income valuation approach utilizing significant unobservable inputs, representative of a Level 3 fair value measurement. The review included an assessment of certain assumptions, including future marketability of each unit in light of the then-current market conditions and their current technical specifications. Assumptions used in our assessment included, but were not limited to, timing of future contract awards and expected operating
31

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
dayrates, operating costs, utilization rates, discount rates, capital expenditures, reactivation costs, estimated economic useful lives and, in certain cases, our belief that a drilling unit is no longer marketable and is unlikely to return to service in the near to medium term.
The impact of the current global economic turmoil continues to evolve and its duration and ultimate disruption to our customers’ and our business cannot be estimated at this time. We could recognize further impairment charges should such disruption continue. If we experience prolonged unfavorable changes to current market conditions, reactivation costs or dayrates or if we are unable to secure new or extended contracts for our active rigs at favorable rates, it is reasonably possible that the estimate of undiscounted cash flows may change in the near term, resulting in the need to write down the affected assets to their corresponding estimated fair values.
Note 11— Income Taxes
As described in “Note 2— Chapter 11 Emergence,” in accordance with the Plan, the Predecessor’s Legacy Notes were cancelled and exchanged for Successor’s Ordinary Shares and Warrants. The cancellation of indebtedness income resulting from such restructuring transactions has significantly reduced the Company’s US tax attributes, including but not limited to NOL carryforwards. As a result of the emergence from bankruptcy, on the Effective Date, the Company experienced an ownership change under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), which is anticipated to subject certain remaining tax attributes to an annual limitation under Section 382 of the Code.
On the Effective Date, the Company had net deferred tax liabilities in total of $21.5 million inclusive of a valuation allowance of $4.7 million. Because of the impact the cumulative operating losses have on the determination of the recoverability of deferred tax assets through future earnings and the negative evidence associated with the bankruptcy reorganization, the Company assessed the realizability of its deferred tax assets based on the future reversals of existing deferred tax liabilities. Accordingly, the Company established a new valuation allowance of $4.7 million for a portion of its deferred tax assets.
At March 31, 2021, the Company had a deferred tax asset of $0.7 million net of valuation allowance. Additionally, the Company also had deferred tax liabilities of $17.9 million inclusive of a valuation allowance of $5.3 million.
At March 31, 2021, the reserves for uncertain tax positions totaled $34.0 million (net of related tax benefits of $0.3 million). At December 31, 2020, the reserves for uncertain tax positions totaled $42.5 million (net of related tax benefits of $0.4 million).
It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may fluctuate in the next 12 months primarily due to the completion of open audits or the expiration of statutes of limitation.
During the period ended on February 5, 2021, our income tax provision included a tax benefit of $1.7 million related to non-US reserve release.
On the Effective Date, our income tax provision included tax expenses of $2.5 million associated with reorganization and fresh start adjustments.
During the period from February 6, 2021 to March 31, 2021, our tax provision included tax benefits of $10.1 million related to US and non-US reserve releases.
32

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 12— Employee Benefit Plans
Pension costs include the following components for the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020:
SuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Non-USUSNon-USUSNon-USUS
Interest cost$233 $1,090 $99 $621 $433 $1,892 
Return on plan assets(155)(2,118)(69)(1,250)(499)(2,919)
Recognized net actuarial loss282 716 
Net pension benefit cost (gain)$78 $(1,028)$31 $(347)$(63)$(311)
During the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020, we made 0 contributions to our pension plans. Effective December 31, 2016, employees and alternate payees accrue no future benefits under the US plans and, as such, Noble recognized 0 service costs with the plans for the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020.
Note 13— 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:
Successor:March 31, 2021
Estimated Fair Value Measurements
Carrying AmountQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Assets -
Marketable securities$6,742 $6,742 $$
Predecessor:December 31, 2020
Estimated Fair Value Measurements
Carrying AmountQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Assets -
Marketable securities$12,326 $12,326 $$
Our cash, cash equivalents and restricted cash, accounts receivable, marketable securities and accounts payable are by their nature short-term. As a result, the carrying values included in our Condensed Consolidated Balance Sheets approximate fair value. See “Note 7— Debt” for information regarding the fair value of our debt.
Note 14— Commitments and Contingencies
Tax matters
Subsequent to our filing of an Application for Tentative Refund with the Internal Revenue Service (“IRS”) under the CARES Act in the months of April and August 2020, the IRS informed us that it would be conducting a limited scope examination of the taxable years ended December 31, 2012, 2013, 2014, 2018 and 2019. In the first quarter of 2020, we filed a foreign tax credit refund claim for taxable year 2009. The IRS is currently auditing taxable year 2009 in relation to our refund claim. No other taxable years are currently under audit in the US. We believe that we have accurately reported all amounts in our returns.
Audit claims of approximately $95.2 million attributable to income and other business taxes were assessed against Noble entities in Mexico related to tax years 2007, 2009 and 2010, in Australia related to tax years 2013 to 2016, in Guyana related to tax years 2019 and 2020
33

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
and in Saudi Arabia related to tax years 2015 to 2018. We intend to vigorously defend our reported positions and believe the ultimate resolution of the audit claims will not have a material adverse effect on our consolidated financial statements.
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. We recognize uncertain tax positions that we believe have a greater than 50 percent likelihood of being sustained upon challenge by a tax authority. We cannot predict or provide assurance as to the ultimate outcome of any existing or future assessments.
Other contingencies
Legacy Noble entered into agreements with certain of our executive officers. These agreements became effective upon a change of control of Noble (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 were effective for three years thereafter. These agreements provided for compensation and certain other benefits under such circumstances. On the Effective Date of our emergence from the Chapter 11 Cases, the Legacy Noble agreements were superseded by new employment agreements with substantially similar terms except that the new agreements provide for certain severance benefits upon termination without cause or resignation for good reason.
We are a defendant in certain claims and litigation arising out of operations in the ordinary course of business, including personal injury claims, 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.
Note 15— Supplemental Financial Information
Condensed Consolidated Balance Sheets Information
Our Noble restricted cash balance as of March 31, 2021, February 5, 2021 and December 31, 2020 consisted of $0.8 million, $2.0 million, and $21.7 million, respectively. Our Finco restricted cash balance as of March 31, 2021, February 5, 2021 and December 31, 2020 consisted of $0.8 million, $2.0 million and $1.7 million, respectively. All restricted cash is recorded in “Prepaid expenses and other current assets.”
Condensed Consolidated Statements of Cash Flows Information
Operating cash activities
The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows:
Noble
SuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Accounts receivable$10,265 $(41,344)$(10,152)
Other current assets3,566 17,884 15,164 
Other assets(8,169)8,521 2,235 
Accounts payable6,642 (16,819)(9,001)
Other current liabilities3,192 11,428 (36,097)
Other liabilities1,067 (5,846)(8,706)
Total net change in assets and liabilities$16,563 $(26,176)$(46,557)
34

NOBLE CORPORATION AND SUBSIDIARIES
NOBLE FINANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Finco
SuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Accounts receivable$10,265 $(41,344)$(10,152)
Other current assets550 19,398 14,667 
Other assets(8,168)8,512 2,807 
Accounts payable6,883 (14,061)(9,194)
Other current liabilities3,193 11,623 (36,128)
Other liabilities1,043 (5,936)(13,328)
Total net change in assets and liabilities$13,766 $(21,808)$(51,328)
Non-cash investing and financing activities
Additions to property and equipment, at cost for which we had accrued a corresponding liability in accounts payable as of February 5, 2021, March 31, 2021 and December 31, 2020 were $31.0 million, $38.6 million and $35.3 million, respectively.
Additions to property and equipment, at cost for which we had accrued a corresponding liability in accounts payable as of March 31, 2020 and December 31, 2019 were $24.7 million and $36.0 million, respectively.
On the Effective Date, an aggregate principal amount of $216.0 million of Second Lien Notes was issued, which includes the aggregate subscription price of $200.0 million, plus a backstop fee of $16.0 million which was paid in kind.
Note 16— Subsequent Events
On March 25, 2021, Noble entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Pacific Drilling Company LLC (“Pacific Drilling”), pursuant to which Noble acquired Pacific Drilling in an all-stock transaction (the “Merger”) on April 15, 2021. Pursuant to the terms and conditions set forth in the Merger Agreement, (a) each membership interest in Pacific Drilling was converted into the right to receive 6.366 Ordinary Shares and (b) each of Pacific Drilling’s warrants outstanding immediately prior to the effective time of the Merger was converted into the right to receive 1.553 Ordinary Shares. As part of the transaction, Pacific Drilling’s equity holders received 16.6 million Ordinary Shares, or approximately 24.9% of the outstanding Ordinary Shares and Penny Warrants at closing.
On April 15, 2021, in connection with the closing of the Merger, Noble entered into a Registration Rights Agreement (the “Merger Registration Rights Agreement”) with each of the holders identified therein (the “Merger RRA Holders”), pursuant to which, among other things, Noble will be required to file with the SEC a registration statement registering for resale the Ordinary Shares issuable to the Merger RRA Holders upon consummation of the Merger, and subject to certain limitations set forth therein, certain Merger RRA Holders have customary shelf, demand and piggyback registration rights. In addition, pursuant to the Merger Registration Rights Agreement, certain Merger RRA Holders have the right to require Noble, subject to certain limitations set forth therein, to effect a distribution of any or all of their Ordinary Shares by means of an underwritten offering. Noble is not obligated to effect any underwritten offering unless the dollar amount of the registrable securities of the Merger RRA Holder(s) demanding such underwritten offering to be included therein is reasonably likely to result in gross sale proceeds of at least $20 million.

35


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 March 31, 2021, and our results of operations for the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and three months ended March 31, 2020. The following discussion should be read in conjunction with the condensed 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, 2020 filed by Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability (“Noble” or “Successor”), and Noble Finance Company (formerly known as Noble Corporation), a Cayman Islands company (“Finco”).
On July 31, 2020 (the “Petition Date”), our former parent company, Noble Holding Corporation plc (formerly known as Noble Corporation plc), a public limited company incorporated under the laws of England and Wales (“Legacy Noble” or the “Predecessor”), and certain of its subsidiaries, including Finco, filed voluntary petitions in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). On September 4, 2020, the Debtors (as defined herein) filed with the Bankruptcy Court the Joint Plan of Reorganization of Noble Corporation plc and its Debtor Affiliates, which was subsequently amended on October 8, 2020 and October 13, 2020 and modified on November 18, 2020 (as amended, modified or supplemented, the “Plan”), and the related disclosure statement. On September 24, 2020, six additional subsidiaries of Legacy Noble (together with Legacy Noble and its subsidiaries that filed on the Petition Date, as the context requires, the “Debtors”) filed voluntary petitions in the Bankruptcy Court. The chapter 11 proceedings were jointly administered under the caption Noble Corporation plc, et al. (Case No. 20-33826) (the “Chapter 11 Cases”). On November 20, 2020, the Bankruptcy Court entered an order confirming the Plan. In connection with the Chapter 11 Cases and the Plan, on and prior to the Effective Date (as defined herein), Legacy Noble and certain of its subsidiaries effectuated certain restructuring transactions pursuant to which Legacy Noble formed Noble as an indirect wholly-owned subsidiary of Legacy Noble and transferred to Noble substantially all of the subsidiaries and other assets of Legacy Noble. On February 5, 2021 (the “Effective Date”), the Plan became effective in accordance with its terms, the Debtors emerged from the Chapter 11 Cases and Noble became the new parent company. In accordance with the Plan, Legacy Noble and its remaining subsidiary will in due course be wound down and dissolved in accordance with applicable law. The Bankruptcy Court closed the chapter 11 case with respect to all Debtors other than Legacy Noble, pending its wind down.
Noble is the successor issuer to Legacy Noble for purposes of and pursuant to Rule 15d-5 of the Exchange Act. References to the “Company,” “we,” “us” or “our” in this Annual Report are to Noble, together with its consolidated subsidiaries, when referring to periods following the Effective Date, and to Legacy Noble, together with its consolidated subsidiaries, when referring to periods prior to the Effective Date.
Finco was an indirect, wholly-owned subsidiary of Legacy Noble prior to the Effective Date and has been a direct, wholly-owned subsidiary of Noble since the Effective Date. Noble’s principal asset is all of the shares of Finco. Finco has no public equity outstanding. The consolidated financial statements of Noble include the accounts of Finco, and Noble conducts substantially all of its business through Finco and its subsidiaries. As such, the terms “Predecessor” and “Successor” also refers to Finco, as the context requires.
36


Forward-Looking Statements
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this report or in the documents incorporated by reference, including those regarding the impact of our emergence from bankruptcy on our business and relationships, our plan to list our equity on a national securities exchange, the global novel strain of coronavirus (“COVID-19”) pandemic and agreements regarding production levels among members of the Organization of Petroleum Exporting Countries (“OPEC”) and other oil and gas producing nations (together with OPEC, “OPEC+”), and any expectations we may have with respect thereto, and those regarding rig demand, peak oil, the offshore drilling market, oil prices, contract backlog, fleet status, our future financial position, business strategy (including our business strategy post-emergence from bankruptcy), impairments, repayment of debt, credit ratings, liquidity, borrowings under any credit facilities or other instruments, sources of funds, future capital expenditures, contract commitments, dayrates, contract commencements, extension or renewals, contract tenders, the outcome of any dispute, litigation, audit or investigation, plans and objectives of management for future operations, foreign currency requirements, results of joint ventures, indemnity and other contract claims, reactivation, refurbishment, conversion 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, benefits or results of acquisitions or dispositions (including the benefits of the Merger (as defined below), and our plans, objectives, expectations and intentions related to the Merger), and timing for compliance with any new regulations are forward-looking statements. When used in this report or in the documents incorporated by reference, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “shall,” “will,” “would” 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 Quarterly 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 risks and uncertainties relating to our emergence from bankruptcy (including but not limited to our ability to improve our operating structure, financial results and profitability and to maintain relationships with suppliers, customers, employees and other third parties following emergence from bankruptcy), the Merger (including the risk that the Merger disrupts the parties’ current plans and operations as a result of the consummation of the transactions contemplated by the Merger Agreement, the ability to recognize the anticipated benefits of the Merger, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees, costs related to the Merger, changes in applicable laws or regulations, the possibility that the combined company may be adversely affected by other economic, business, and/or competitive factors and the ability of the combined company to improve its operating structure, financial results and profitability and to maintain relationships with suppliers, customers, employees and other third parties), the effects of public health threats, pandemics and epidemics, such as the ongoing outbreak of COVID-19, and the adverse impact thereof on our business, financial condition and results of operations (including but not limited to our growth, operating costs, supply chain, availability of labor, logistical capabilities, customer demand for our services and industry demand generally, our liquidity, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally), the effects of actions by or disputes among OPEC+ members with respect to production levels or other matters related to the price of oil, market conditions, 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, operating hazards and delays, risks associated with operations outside the US, actions by regulatory authorities, credit rating agencies, customers, joint venture partners, contractors, lenders and other third parties, legislation and regulations affecting drilling operations (including as a result of the change in the US presidential administration), compliance with or changes in regulatory requirements, violations of anti-corruption laws, shipyard risk and timing, delays in mobilization of rigs, 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, 2020, in Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q and in our other filings with the US 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.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at our website. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
Our website address is http://www.noblecorp.com. Investors should also note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the investor relations section of our website to communicate with our investors. It is possible that the financial and other information (including fleet status reports) posted there could be deemed to be material information. Except to the extent explicitly stated herein, documents and information on our website are not incorporated by reference herein.

37


Executive Overview
We provide contract drilling services to the international oil and gas industry with our global fleet of mobile offshore drilling units. As of the filing date of this Quarterly Report on Form 10-Q, with the addition of five floaters from our acquisition of Pacific Drilling Company LLC, our fleet of 24 drilling rigs consisted of 12 floaters and 12 jackups strategically deployed worldwide in both ultra-deepwater and shallow water locations. We typically employ each drilling unit under an individual contract, and many contracts are awarded based upon a competitive bidding process.
We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business. 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 primarily of large, integrated, independent and government-owned or controlled oil and gas companies throughout the world.
Recent Events
Emergence from Chapter 11. On February 5, 2021 (the “Effective Date”), Legacy Noble successfully completed its financial restructuring and Legacy Noble and its debtor affiliates emerged from the Chapter 11 Cases. As a result, Noble emerged from bankruptcy on the Effective Date with a substantially delevered balance sheet and less than $400.0 million of debt. Noble’s capital structure as of the Effective Date includes a $675.0 million revolving credit facility, of which $150.0 million is drawn as of May 5, 2021, and $216.0 million of our senior secured second lien notes (the “Second Lien Notes”). On the Effective Date, Legacy Noble’s ordinary shares were cancelled and ordinary shares of Noble with a nominal value of $0.00001 per share (“Ordinary Shares”) were issued to Legacy Noble’s former bondholders. Certain former bondholders and former equity holders of Legacy Noble were also issued warrants to purchase shares of the Company. All cash payments made by the Company under the Plan on the Effective Date were funded from cash on hand, proceeds of the Rights Offering, and proceeds from the new revolving credit facility. For additional information regarding the Chapter 11 Cases and our emergence, see “Note 2— Chapter 11 Emergence” to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Fresh Start Accounting. In connection with our emergence from bankruptcy, Noble and Finco qualified for and applied fresh start accounting on the Effective Date. With the application of fresh start accounting, we allocated the reorganization value to our individual assets and liabilities based on their estimated fair values. The Effective Date fair values of our assets and liabilities differed materially from their recorded values as reflected on the historical balance sheets. The application of fresh start accounting resulted in new reporting entities with no beginning retained earnings or accumulated deficit. Accordingly, our financial statements and notes thereto after the Effective Date are not comparable to our financial statements and notes to prior to that date. To facilitate our discussion and analysis of our financial condition and results of operations herein, we refer to the reorganized company as the “Successor” for periods subsequent to the Effective Date, and “Predecessor” for periods prior to the Effective Date. Furthermore, our presentations herein include a “black line” division to delineate the lack of comparability between the Predecessor and Successor. To facilitate our discussion herein, we have addressed the Successor and Predecessor periods discretely and have provided comparative analysis, to the extent that it is practical, where appropriate.
Merger with Pacific Drilling. On March 25, 2021, Noble entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Pacific Drilling Company LLC (“Pacific Drilling”), pursuant to which Noble acquired Pacific Drilling in an all-stock transaction (the “Merger”) on April 15, 2021. Pursuant to the terms and conditions set forth in the Merger Agreement, (a) each membership interest in Pacific Drilling was converted into the right to receive 6.366 Ordinary Shares and (b) each of Pacific Drilling’s warrants outstanding immediately prior to the effective time of the Merger was converted into the right to receive 1.553 Ordinary Shares. As part of the transaction, Pacific Drilling’s equity holders received 16.6 million Ordinary Shares, or approximately 24.9% of the outstanding Ordinary Shares and Penny Warrants (as defined herein) at closing.
The Merger facilitates Noble's reentry into the growing West Africa and Mexico regions, and broadens our customer relationships. Noble expects to dispose of the Pacific Bora and Pacific Mistral rigs expeditiously. Subsequent to those dispositions, Noble will own and operate a high specification fleet of 24 rigs, with 12 floaters and 12 jackups.
Appointment of new director. On April 19, 2021, the board of directors of Noble, appointed Paul Aronzon to serve as a director. Mr. Aronzon will serve as a director until the next shareholder vote at the annual general meeting of shareholders of the Company in 2022. At the time of his appointment, Mr. Aronzon was named to serve on the Audit and Finance Committees of the Board.
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Market Outlook
The offshore drilling industry remains highly competitive. We believe the convergence of events in 2020 and 2021, including the ongoing impacts from the COVID-19 pandemic, have lengthened an already challenging and slow recovery in our industry. Despite these challenges and demand projections, we believe that oil and gas demand will rebalance and oil and gas will remain a significant portion of the world’s energy mix. We expect that the return to stable oil demand and prices coupled with the continued attrition of rigs in the global offshore fleet will bring improved market conditions for our services.
After completing the Merger with Pacific Drilling, Noble has a fleet of 24 rigs, consisting of 12 jackups and 12 floaters. Our fleet is among the youngest, most technically advanced, and versatile fleets in the industry and is well positioned to compete as market dynamics improve. Our fleet consists predominantly of technologically advanced units, equipped with sophisticated systems and components prepared to execute our customers’ increasingly complicated offshore drilling programs safely and with greater efficiency, contributing to an overall reduction of our carbon footprint. We remain committed to safely and efficiently serving the needs of our customers globally.
Contract Drilling Services Backlog
We maintain a backlog of commitments for contract drilling services. Our contract drilling services backlog reflects estimated future revenues attributable to signed drilling contracts. While backlog did not include any letters of intent as of March 31, 2021, in the past we have included in backlog certain letters of intent that we expect to result in binding drilling contracts.
We calculate backlog for any given unit and period by multiplying the full contractual operating dayrate for such unit by the number of days remaining in the period, and include certain assumptions based on the terms of certain contractual arrangements, discussed in the notes to the table below. For the four rigs contracted with Exxon Mobil Corporation (“ExxonMobil”) mentioned below, we utilize the current market rate, adjusted for a moderate discount rate, as described in footnote (3) to the backlog table below. 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. Backlog herein also has not been adjusted for the non-cash amortization related to favorable customer contract intangibles which were recognized on the Effective Date.
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    The table below presents the amount of our contract drilling services backlog as of March 31, 2021, and the percent of available operating days committed for the periods indicated:
Year Ending December 31, (6)
Total
2021 (1)
2022202320242025 - 2027
(In thousands)
Contract Drilling Services Backlog
Floaters (2)(3)
$1,150,452 $360,074 $367,526 $140,659 $71,279 $210,914 
Jackups (4)
392,278 208,125 148,414 35,739 — — 
Total$1,542,730 $568,199 $515,940 $176,398 $71,279 $210,914 
Percent of Available Days Committed (5)
Floaters91 %65 %24 %14 %14 %
Jackups68 %32 %%— %— %
Total77 %44 %13 %%%
(1)Represents a nine-month period beginning April 1, 2021. Some of our drilling contracts provide customers with certain early termination rights and, in limited cases, those termination rights require minimal or no notice and minimal financial penalties.
(2)Two of our long-term drilling contracts with Royal Dutch Shell plc (“Shell”), the Noble Globetrotter I and Noble Globetrotter II, contain a dayrate adjustment mechanism that utilizes an average of market rates that match a set of distinct technical attributes and is subject to a modest discount, beginning on the fifth-year anniversary of the contract and continuing every six months thereafter. On December 12, 2016, we amended those drilling contracts with Shell. As a result of the amendments, each of the contracts now has a contractual dayrate floor of $275,000 per day. Once the dayrate adjustment mechanism becomes effective and following any idle periods, the dayrate for these rigs will not be lower than the higher of (i) the contractual dayrate floor or (ii) the market rate as calculated under the adjustment mechanism. The impact to contract backlog from these amendments has been reflected in the table above and the backlog calculation assumes that, after any idle period at the contractual stacking rate, each rig will work at its respective dayrate floor for the remaining contract term.
(3)Noble entered into a multi-year Commercial Enabling Agreement (the “CEA”) with ExxonMobil in February 2020. Under the CEA, dayrates earned by each rig will be updated at least twice per year to the prevailing market rate, subject to a scale-based discount and a performance bonus that appropriately aligns the interests of Noble and ExxonMobil. Under the CEA, the table above includes awarded and remaining term of seven years related to the Noble Tom Madden, two years to each of the Noble Bob Douglas and Noble Don Taylor and eight months to the Noble Sam Croft. Under the CEA, ExxonMobil may reassign term among rigs. The aforementioned additional backlog included in the table above was estimated using the current market rate, adjusted for a moderate discount rate.
(4)In April 2020, we received notice from Saudi Arabian Oil Company (“Saudi Aramco”) to suspend operations on the Noble Scott Marks for a period of up to 12 months. Beginning in early May 2020, we idled the Noble Scott Marks at a rate of $0 per day. The impact to contract backlog has been reflected in the table above and the backlog calculation assumes that, upon completion of the suspension period, the rig will resume operations at the contracted dayrate for the remaining contract term.
(5)Percent of available days committed is calculated by dividing the total number of days our rigs are operating under contract for such period by the product of the number of our rigs and the number of calendar days in such period.
(6)This table does not include $125.4 million of backlog associated with assets acquired in the Merger.
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 presented in the table above due to various factors, including, but not limited to, the impact of the COVID-19 pandemic and related mitigation efforts on the demand for oil, current oversupply of oil, shipyard and maintenance projects, unplanned downtime, the operation of market benchmarks for dayrate resets, achievement of bonuses, weather conditions, reduced standby or mobilization rates 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 – Our current backlog of contract drilling revenue may not be ultimately realized” in our Annual Report on Form 10-K for the year ended December 31, 2020.
As of March 31, 2021, ExxonMobil, Shell and Saudi Aramco represented approximately 49.4 percent, 24.3 percent and 13.8 percent of our backlog, respectively.
40


Strategy and Results of Operations
Our business strategy focuses on a high-specification fleet of both floating and jackup rigs and the deployment of our drilling rigs in established and emerging offshore oil and gas basins around the world. We emphasize safe operations, environmental stewardship, and superior performance through a structured management system, the employment of qualified and well-trained crews, the care of our surroundings and the neighboring communities where we operate, and other activities advancing our environmental sustainability, social responsibility, and good governance. We also manage rig operating costs through the implementation and continuous improvement of innovative systems and processes, which includes the use of data analytics and predictive maintenance technology.
Our floating and jackup drilling fleet is among the youngest, most modern and versatile in the industry, with the majority of our rigs having been delivered since 2011. Our fleet consists predominately of technologically advanced units, equipped with sophisticated systems and components prepared to execute our customers’ increasingly complicated offshore drilling programs safely and with greater efficiency, contributing to an overall reduction of our carbon footprint. We do not have any newbuild rigs under construction and we have also retired, sold or otherwise fully impaired 18 drilling rigs since late 2014, due in part to advanced service lives, high cost of operation and limited customer appeal. Current market conditions could lead to us stacking or retiring additional rigs.
We continue to prioritize capital preservation and liquidity in light of the challenging market conditions. However, we will also continue to evaluate opportunities to enhance our fleet of floating and jackup rigs, particularly focusing on higher specification rigs, to meet the demands of increasingly complex drilling programs required by our customers.

Key Operating Metrics
Operating results for our contract drilling services segment are dependent on three primary metrics: operating days, dayrates and operating costs. We also track rig utilization, which is a function of operating days and the number of rigs in our fleet. For more information on operating costs, see “—Contract Drilling Services” below.
The following table presents the average rig utilization, operating days and average dayrates for our rig fleet for the periods indicated:
Average Rig Utilization (1)
Operating Days (2)
Average Dayrates (2)
SuccessorPredecessorSuccessorPredecessorSuccessorPredecessor
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Jackups53 %58 %94 %342 252 1,082 $83,472 $95,212 $131,253 
Floaters83 %86 %58 %314 216 637 205,242 231,745 196,759 
Total64 %68 %77 %656 468 1,719 $141,752 $158,228 $155,526 
(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)An operating day is defined as a calendar day during which a rig operated under a drilling contract. We define average dayrates as revenue from contract drilling services earned per operating day. Average dayrates have not been adjusted for the non-cash amortization related to favorable customer contract intangibles.
Results for the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020
Net loss for the for the period from February 6 through March 31, 2021 was $18.2 million or $0.36 per diluted share, on operating revenues of $92.4 million. Net income for the period from January 1 through February 5, 2021 was $250.2 million, or $0.98 per diluted share, on operating revenues of $77.5 million, compared to net loss for the three months ended March 31, 2020 of $1.1 billion, or $4.25 per diluted share, on operating revenues of $281.3 million.
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As a result of Noble conducting substantially all of its business through Finco and its subsidiaries, the financial position and results of operations for Finco, and the reasons for material changes in the amount of revenue and expense items for the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and three months ended March 31, 2020, would be the same as the information presented below regarding Noble in all material respects, with the exception of operating income (loss). For the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and three months ended March 31, 2020, Finco’s operating loss was $5.6 million lower, operating income was $0.3 million higher and operating loss was $12.0 million lower, respectively, than that of Noble. The operating income (loss) difference is primarily a result of expenses related to corporate legal costs, administration, and chapter 11 bankruptcy charges directly attributable to Noble for operations support and stewardship-related services.
Contract Drilling Services
The following table presents the operating results for our contract drilling services segment for the periods indicated (dollars in thousands):
SuccessorPredecessor
Period From February 6, 2021 through
March 31, 2021
Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Operating revenues:
Contract drilling services$84,629 $74,051 $267,364 
Reimbursables and other (1)
7,804 3,430 13,947 
92,433 77,481 281,311 
Operating costs and expenses:
Contract drilling services79,981 46,965 161,145 
Reimbursables (1)
7,044 2,737 11,684 
Depreciation and amortization14,244 20,622 101,108 
General and administrative9,548 5,727 17,839 
Loss on impairments— — 1,119,517 
110,817 76,051 1,411,293 
Operating loss$(18,384)$1,430 $(1,129,982)
(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.
During the period from February 6 through March 31, 2021, contract drilling services revenues totaled $56.0 million for our floaters and $28.6 million for our jackups. Six of our seven floaters were contracted and operated the majority of the period and nine of our 12 jackups were contracted of which eight operated the entire period. One contracted rig, the Noble Scott Marks, did not operate the entire period as a result of the work suspension which began in May 2020; the suspension is expected to end with the rig returning to operations in May 2021. The other contracted rigs not operating the full period included the Noble Lloyd Noble, which completed its contract in late February 2021 and subsequently moved to the shipyard to prepare for its upcoming work in Norway, and the Noble Roger Lewis, which completed regulatory shipyard maintenance during the period. This was offset by the Noble Sam Turner commencing a new contract in early March 2021. Additionally, contract drilling revenue for the period included: (i) a reduction of $8.5 million of related to the non-cash amortization related to customer contract intangibles which were recognized on the Effective Date and (ii) lower amortizations for mobilization, pre-contract and capital recovery revenues.
During the period from January 1 through February 5, 2021, contract drilling services revenues totaled $50.1 million for our floaters and $24.0 million for our jackups. All six contracted floaters and seven of our eight contracted jackups operated the entire period. This was offset by one contracted jackup not operating the full period, the Noble Scott Marks, which was on suspension, as previously described.
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During the three months ended March 31, 2020 contract drilling services revenues totaled $125.3 million for our floaters with seven of our 12 floaters contracted and operating the entire period and $142.1 million for our jackups with all 12 rigs contracted and operating a majority the period.
Operating Costs and Expenses.
During the period from February 6 through March 31, 2021, contract drilling services costs totaled $80.0 million. Reduced operating costs in the period was a result of rigs stacked during the entire period including the Noble Clyde Boudreaux, Noble Houston Colbert, Noble Hans Deul and Noble Tom Prosser. The period also included lower amortizations for mobilization and pre-contract costs and lower insurance costs.
During the period from January 1 through February 5, 2021, contract drilling services costs totaled $47.0 million. Reduced operating costs in the period was a result of rigs stacked during the entire period including the Noble Clyde Boudreaux, Noble Houston Colbert, Noble Hans Deul and Noble Tom Prosser.
During the three months ended March 31, 2020, contract drilling services costs totaled $161.1 million. Elevated operating costs for this period was a result of 19 rigs contracted and operating a majority of the quarter. In addition, this quarter included costs related to rigs that were operating or stacked and ultimately retired and sold in the second half of 2020 including the Noble Bully I, Noble Bully II, Noble Danny Adkins, Noble Jim Day, Noble Joe Beall and Noble Paul Romano.
Depreciation and amortization totaled $14.2 million, $20.6 million and $101.1 million during the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020, respectively. The decline in depreciation and amortization over these periods were due to impairments of assets recognized during 2020 and to the fair value remeasurement of our rigs as a result of the implementation of fresh start accounting on the Effective Date.
Loss on Impairments. We recorded no loss on impairments during the period from February 6 through March 31, 2021 or the period from January 1 through February 5, 2021. We recorded a loss on impairment of $1.1 billion for the three months ended March 31, 2020. For additional information, see “Note 10— Loss on Impairment” to our condensed consolidated financial statements.
Other Income and Expenses
General and Administrative Expenses. General and administrative expenses totaled $9.5 million, $5.7 million and $17.8 million during the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020, respectively. Both the Predecessor and Successor periods in 2021 include reduced legal and professional fees not otherwise classified in Reorganization items, net.
Reorganization Items, Net. Noble incurred a net gain of $252.1 million for reorganization items during the period from January 1 through February 5, 2021. Finco incurred a net gain of $195.4 million for reorganization items during the period from January 1 through February 5, 2021. The gain was primarily the result of gains on the settlement of Liabilities subject to compromise exceeding other net reorganization charges and net charges related to fresh start accounting. No reorganization charges or income were recorded during the three months ended March 31, 2020. For additional information, see “Note 2— Chapter 11 Emergence” to our condensed consolidated financial statements.
Interest Expense. Interest expense totaled $6.9 million, $0.2 million and $70.9 million during the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020, respectively. The Predecessor period of 2021 included reduced expenses due to the Bankruptcy Court order of a stay on all interest expense during the pendency of the Chapter 11 Cases. The Successor period of 2021 includes interest expense on our newly issued Second Lien Notes as well as drawings on our Revolving Credit Facility. For additional information, see “Note 2— Chapter 11 Emergence” and “Note 7— Debt” to our condensed consolidated financial statements.
Income Tax Provision. We recorded an income tax benefit of $7.0 million, income tax expense of $3.4 million and income tax benefit $143.0 million during the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020, respectively. During the period from February 6, 2021 to March 31, 2021, our tax provision included tax benefits of $10.1 million related to US and non-US reserve releases. During the period ended on February 5, 2021, our income tax provision included a tax benefit of $1.7 million related to non-US reserve release and tax expense of $2.5 million related to fresh start and reorganization adjustments. During the three months ended on March 31, 2020, our tax benefit included the tax impact of asset impairment of $95.6 million, the tax impact of the application of the CARES Act of $42.6 million and a non-US reserve release due to statute expiration of $4.6 million.
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Liquidity and Capital Resources
As a result of the financial restructuring through the Chapter 11 Cases, Noble emerged with a new $675.0 million revolving credit facility and $216.0 million of Second Lien Notes. At emergence, Legacy Noble’s ordinary shares were cancelled and Ordinary Shares were issued to Legacy Noble’s former bondholders. Certain former bondholders and former equity holders of Legacy Noble were also issued warrants to purchase shares of the Company.
Post-emergence Debt
Senior Secured Revolving Credit Facility
On the Effective Date, Finco and Noble International Finance Company (“NIFCO”) entered into the Revolving Credit Agreement providing for the $675.0 million Revolving Credit Facility and canceled all debt that existed immediately prior to the Effective Date. The Revolving Credit Facility matures on July 31, 2025. Subject to the satisfaction of certain conditions, Finco may from time to time designate one or more of Finco’s other wholly-owned subsidiaries as additional borrowers under the Revolving Credit Agreement (collectively with Finco and NIFCO, the “Borrowers”). As of the Effective Date, $177.5 million of loans were outstanding, and $8.8 million of letters of credit were issued, under the Revolving Credit Facility.
All obligations of the Borrowers under the Revolving Credit Agreement, certain cash management obligations and certain swap obligations are unconditionally guaranteed, on a joint and several basis, by Finco and certain of its direct and indirect subsidiaries (collectively with the Borrowers, the “Credit Parties”), including a guarantee by each Borrower of the obligations of each other Borrower under the Revolving Credit Agreement. All such obligations, including the guarantees of the Revolving Credit Facility, are secured by senior priority liens on substantially all assets of, and the equity interests in, each Credit Party, including all of the rigs owned by the Company as of the Effective Date or acquired thereafter and certain assets related thereto, in each case, subject to certain exceptions and limitations described in the Revolving Credit Agreement.
The loans outstanding under the Revolving Credit Facility bear interest at a rate per annum equal to the applicable margin plus, at Finco’s option, either: (i) the reserve-adjusted LIBOR or (ii) a base rate, determined as the greatest of (x) the prime loan rate as published in the Wall Street Journal, (y) the federal funds effective rate plus 1⁄2 of 1%, and (z) the reserve-adjusted one-month LIBOR plus 1%. The applicable margin is initially 4.75% per annum for LIBOR loans and 3.75% per annum for base rate loans and will be increased by 50 basis points after July 31, 2024, and may be increased by an additional 50 basis points under certain conditions described in the Revolving Credit Agreement.
The Borrowers are required to pay a quarterly commitment fee to each lender under the Revolving Credit Agreement, which accrues at a rate per annum equal to 0.50% on the average daily unused portion of such lender’s commitments under the Revolving Credit Facility. The Borrowers are also required to pay customary letter of credit and fronting fees.
Borrowings under the Revolving Credit Agreement may be used for working capital and other general corporate purposes. Availability of borrowings under the Revolving Credit Agreement is subject to the satisfaction of certain conditions, including restrictions on borrowings if, after giving effect to any such borrowings and the application of the proceeds thereof, (i) the aggregate amount of Available Cash (as defined in the Revolving Credit Agreement) would exceed $100.0 million, (ii) the Consolidated First Lien Net Leverage Ratio (as defined in the Revolving Credit Agreement) would be greater than 5.50 to 1.00 and the aggregate principal amount outstanding under the Revolving Credit Facility would exceed $610.0 million, or (iii) the Asset Coverage Ratio (as described below) would be less than 2.00 to 1.00.
Mandatory prepayments and, under certain circumstances, commitment reductions are required under the Revolving Credit Facility in connection with (i) certain asset sales, asset swaps and events of loss (subject to reinvestment rights if no event of default exists) and (ii) certain debt issuances. Available Cash in excess of $150.0 million is also required to be applied periodically to prepay loans (without a commitment reduction). The loans under the Revolving Credit Facility may be voluntarily prepaid, and the commitments thereunder voluntarily terminated or reduced, by the Borrowers at any time without premium or penalty, other than customary breakage costs.
The Revolving Credit Agreement obligates Finco and its restricted subsidiaries to comply with the following financial maintenance covenants:
as of the last day of each fiscal quarter in 2021, Adjusted EBITDA (as defined in the Revolving Credit Agreement) is not permitted to be lower than (i) $70.0 million for the four fiscal quarter period ending March 31, 2021, (ii) $40.0 million for the four fiscal quarter period ending June 30, 2021 and (iii) $25.0 million for the four fiscal quarter periods ending on each of September 30, 2021 and December 31, 2021;
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as of the last day of each fiscal quarter ending on or after March 31, 2022, the ratio of Adjusted EBITDA to Cash Interest Expense (as defined in the Revolving Credit Agreement) is not permitted to be less than (i) 2.00 to 1.00 for each four fiscal quarter period ending on or after March 31, 2022 until June 30, 2024, and (ii) 2.25 to 1.00 for each four fiscal quarter period ending thereafter; and
for each fiscal quarter ending on or after June 30, 2021, the ratio of (x) Asset Coverage Aggregate Rig Value (as defined in the Revolving Credit Agreement) to (y) the aggregate principal amount of loans and letters of credit outstanding under the Revolving Credit Facility (the “Asset Coverage Ratio”) as of the last day of any such fiscal quarter is not permitted to be less than 2.00 to 1.00.
The Revolving Credit Facility contains affirmative and negative covenants, representations and warranties and events of default that the Company considers customary for facilities of this type.
Second Lien Notes Indenture
On the Effective Date, pursuant to the Backstop Commitment Agreement and in accordance with the Plan, Noble and Finco consummated the Rights Offering of Second Lien Notes and associated Ordinary Shares at an aggregate subscription price of $200.0 million.
An aggregate principal amount of $216.0 million of Second Lien Notes was issued in the Rights Offering, which includes the aggregate subscription price of $200.0 million plus a backstop fee of $16.0 million which was paid in kind. The Second Lien Notes mature on February 15, 2028. The Second Lien Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured second-priority basis, by the direct and indirect subsidiaries of Finco that are Credit Parties under the Revolving Credit Facility. The Second Lien Notes and such guarantees are secured by senior priority liens on the assets subject to liens securing the Revolving Credit Facility, including the equity interests in Finco and each guarantor of the Second Lien Notes, all of the rigs owned by the Company as of the Effective Date or acquired thereafter, certain assets related thereto, and substantially all other assets of Finco and such guarantors, in each case, subject to certain exceptions and limitations.
Interest on the Second Lien Notes accrues, at Finco’s option, at a rate of: (i) 11% per annum, payable in cash; (ii) 13% per annum, with 50% of such interest to be payable in cash and 50% of such interest to be payable by issuing additional Second Lien Notes (“PIK Notes”); or (iii) 15% per annum, with the entirety of such interest to be payable by issuing PIK Notes. Finco shall pay interest semi-annually in arrears on February 15 and August 15 of each year, commencing August 15, 2021. For the period ended March 31, 2021, we assumed we will make the next interest payment by issuing PIK notes.
On or after February 15, 2024, Finco may redeem all or part of the Second Lien Notes at fixed redemption prices (expressed as percentages of the principal amount), plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Finco may also redeem the Second Lien Notes, in whole or in part, at any time and from time to time on or before February 14, 2025 at a redemption price equal to 106% of the principal amount plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date, plus a “make-whole” premium. Notwithstanding the foregoing, if a Change of Control (as defined in the Second Lien Notes Indenture) occurs prior to (but not including) February 15, 2024, then, within 120 days of such Change of Control, Finco may elect to purchase all remaining outstanding Second Lien Notes at a redemption price equal to 106% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.
The Second Lien Notes contain covenants and events of default that the Company considers customary for notes of this type.
Sources and Uses of Cash Overview
Our principal sources of capital in the current period were cash generated from operating activities and funding from our Revolving Credit Facility and Second Lien Notes. Cash on hand during the current period was primarily used for the following:
normal recurring operating expenses;
fees and expenses related to the Chapter 11 Cases; and
capital expenditures.

Net cash provided by operating activities was $18.2 million during the period from February 6 through March 31, 2021 and net cash used in operating activities was $45.4 million for the period from January 1 through February 5, 2021 and $0.8 million for the three months ended March 31, 2020. The Successor period benefited from a cash flow inflow from operating assets and liabilities, while the Predecessor had a cash outflow from operating assets and liabilities. We had working capital of $151.6 million at March 31, 2021 and $383.9 million at December 31, 2020.
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Net cash used in investing activities during the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and the three months ended March 31, 2020 were $15.1 million, $14.4 million and $36.5 million, respectively. The Predecessor and Successor periods include shipyard work on the Noble Lloyd Noble and the managed pressure drilling upgrade on the Noble Don Taylor and Noble Tom Madden.
Net cash provided by financing activities was zero during the period from February 6 through March 31, 2021, net cash used in financing activities was $191.2 million during the period from January 1 through February 5, 2021 and net cash provided by financing activities was $108.6 million for the three months ended March 31, 2020. The Predecessor period included the repayment of the 2017 Credit Facility, issuances of the Second Lien Notes and borrowings on the Revolving Credit Facility.
Our currently anticipated cash flow needs, both in the short-term and long-term, may include the following:
normal recurring operating expenses;
planned and discretionary capital expenditures; and
repayments of debt and interest.
We currently expect to fund these cash flow needs with cash generated by our operations, cash on hand, borrowings under our Revolving Credit Facility. Subject to market conditions and other factors, we may also issue equity or long-term debt securities to fund these cash flow needs and for other purposes.
Capital Expenditures
Capital expenditures totaled $22.9 million, $10.3 million and $25.1 million during the period from February 6 through March 31, 2021, the period from January 1 through February 5, 2021 and three months ended March 31, 2020, respectively.
Capital expenditures during the period from February 6 through March 31, 2021 consisted of the following:
$9.5 million for sustaining capital;
$12.9 million in major projects, including subsea and other related projects;
$0.2 million for capitalized interest; and
$0.3 million for rebillable capital and contract modifications.
Capital expenditures during the period from January 1 through February 5, 2021 consisted of the following:
$1.5 million for sustaining capital;
$2.1 million in major projects, including subsea and other related projects; and
$6.7 million for rebillable capital and contract modifications.
Including the effects of the recent Merger, our total capital expenditure estimate for 2021 is expected to range between $180 million and $200 million, of which approximately $100 million to $110 million is currently anticipated to be spent for sustaining capital, and approximately $20 million is anticipated to be rebillable to our customers.
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, while liquidity and preservation of capital remains our top priority, we will continue to evaluate acquisitions of drilling units from time to time.
Share Capital
As of March 31, 2021, Noble had approximately 43.5 million shares outstanding as compared to approximately 251.1 million shares outstanding and trading at December 31, 2020.
At Legacy Noble’s 2020 Annual General Meeting, Legacy Noble’s shareholders authorized its Board of Directors to increase share capital through the issuance of up to approximately 8.7 million ordinary shares (at then current nominal value of $0.01 per share). Other than shares issued to Legacy Noble’s directors under the Noble Corporation 2017 Director Omnibus Plan, the authority was not used to allot shares during the year ended December 31, 2020 and expired on the Effective Date.
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In accordance with the Plan, all agreements, instruments and other documents evidencing, relating to or otherwise connected with any of Legacy Noble’s equity interests outstanding prior to the Effective Date, including all equity-based awards, were cancelled and all such equity interests have no further force or effect after the Effective Date. Pursuant to the Plan, the holders of Legacy Noble’s ordinary shares, par value $0.01 per share, outstanding prior to the Effective Date received their pro rata share of the Tranche 3 Warrants to acquire Ordinary Shares. Pursuant to the Memorandum of Association of Noble Corporation, the share capital of Noble is $6,000 divided into 500,000,000 ordinary shares of a par value of $0.00001 each and 100,000,000 shares of a par value of $0.00001, each of such class or classes having the rights as the Board may determine from time to time.
Noble has not paid dividends since the third quarter of 2016. With respect to Legacy Noble, the declaration and payment of dividends required the authorization of the Board of Directors of Legacy Noble, provided that such dividends on issued share capital may be paid only out of Legacy Noble’s “distributable reserves” on its statutory balance sheet in accordance with UK law. Therefore, Legacy Noble was not permitted to pay dividends out of share capital, which includes share premium. The payment of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual and indenture restrictions and other factors deemed relevant by our current Board of Directors; however, at this time, we do not expect to pay any dividends in the foreseeable future.
Guarantees of Registered Securities
Finco has issued the following registered securities: the Second Lien Notes due 2028. The Second Lien Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured second-priority basis, by the direct and indirect subsidiaries of Finco that are Credit Parties under the Revolving Credit Facility (the “Guarantors”). The guarantees are unconditional, irrevocable, joint and several senior obligations of each Guarantor and rank equally in right of payment with all future senior indebtedness of such Guarantor and effectively senior to all of such Guarantor’s unsecured senior indebtedness.
The Notes and such guarantees are secured by second priority liens on the collateral securing the obligations under the Revolving Credit Facility, including, among other things, (i) a pledge of the equity interests in Finco, (ii) pledges of the equity interests in the Guarantors and (iii) a lien on substantially all of the assets of Finco and the Guarantors (including the equity interests in substantially all of the other direct subsidiaries of Finco and the Guarantors), in each case, subject to certain exceptions and limitations (collectively, the “Collateral”). The Collateral also includes mortgages on certain rigs owned by the Company as of the Effective Date.
Note Guarantees
The guarantees by the Guarantors are unconditional, irrevocable, joint and several senior obligations of each Guarantor and rank equally in right of payment with all future senior indebtedness of such Guarantor and effectively senior to all of such Guarantor’s unsecured senior indebtedness. The guarantees rank senior in right of payment to any existing and future subordinated obligations of such Guarantor and are effectively junior to any obligations of such Guarantor that are secured by senior liens on the Collateral or secured by assets which do not constitute Collateral. Under the indenture governing the Notes, a Guarantor may be released and relieved of its obligations under its guarantee under certain circumstances, including: (1) upon Finco’s exercise of legal defeasance in accordance with the relevant provisions of the indenture governing the Notes, (2) in the event of any sale or other disposition of all of the capital stock of any Guarantor in compliance with the provisions of the indenture governing the Notes, (3) upon the dissolution or liquidation of a Guarantor, (3) with the requisite consent of the noteholders, (4) if such Guarantor is properly designated as an unrestricted subsidiary in accordance with the indenture governing the Notes, (5) upon the release or discharge of the Guarantor’s obligations under its guarantee or (6) with respect to certain future immaterial guarantors, upon a written notice from Finco to the trustee for the Notes.
Finco is a holding company with no significant operations or material assets other than the direct and indirect equity interests it holds in the Guarantors and other non-guarantor subsidiaries. Finco conducts its operations primarily through its subsidiaries. As a result, its ability to pay principal and interest on the Notes is dependent on the cash flow generated by its subsidiaries and their ability to make such cash available to Finco by dividend or otherwise. The Guarantors’ earnings will depend on their financial and operating performance, which will be affected by general economic, industry, financial, competitive, operating, legislative, regulatory and other factors beyond Finco’s control. Any payments of dividends, distributions, loans or advances to Finco by the Guarantors could also be subject to restrictions on dividends under applicable local law in the jurisdictions in which the Guarantors operate. In the event that Finco does not receive distributions from the Guarantors, or to the extent that the earnings from, or other available assets of, the Guarantors are insufficient, Finco may be unable to make payments on the Notes.
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Pledged Securities of Affiliates
Pursuant to the terms of the Notes collateral documents, the collateral agent under the indenture governing the Notes may pursue remedies, or pursue foreclosure proceedings on the Collateral (including the equity of the Guarantors and other direct subsidiaries of Finco and the Guarantors), following an event of default under the indenture governing the Notes. The collateral agent’s ability to exercise such remedies is limited by the intercreditor agreement for so long as any priority lien debt is outstanding.
The pledged equity of the Guarantors constitutes substantially all of the securities of our affiliates which have been pledged to secure the obligations under the Notes. The value of the pledged equity is subject to fluctuations based on factors that include, among other things, general economic conditions and the ability to realize on the collateral as part of a going concern and in an orderly fashion to available and willing buyers and not under distressed circumstances. There is no trading market for the pledged equity interests.
Under the terms of the documents governing the Notes (the “Notes Documents”), Finco and the Guarantors will be entitled to the release of the Collateral from the liens securing the Notes under one or more circumstances, including (1) to the extent required by or pursuant to the terms of the Notes Documents; (2) to the extent that proceeds continue to constitute Collateral, in the event that Collateral is sold, transferred, disbursed or otherwise disposed of to third parties; or (3) as otherwise provided in the Notes Documents, including the release of the priority lien on such Collateral. Upon the release of any subsidiary from its guarantee, if any, in accordance with the terms of the indenture governing the Notes, the lien on any pledged equity interests issued by such Guarantor and on any assets of such Guarantor will automatically terminate.
Guarantor Summarized Financial Information
The summarized financial information below reflect the combined accounts of the Guarantors and the non-consolidated accounts of Finco (collectively, the “Obligors”), for the dates and periods indicated. The financial information is presented on a combined basis and intercompany balances and transactions between entities in the Obligor group have been eliminated.
Summarized Balance Sheet Information:
SuccessorPredecessor
March 31, 2021December 31, 2020
Current assets$254,142 $461,587 
Amounts due from non-guarantor subsidiaries, current5,316,574 5,552,158 
Noncurrent assets1,279,943 3,590,865 
Amounts due from non-guarantor subsidiaries, noncurrent1,051,849 1,045,237 
Current liabilities152,536 159,601 
Amounts due from non-guarantor subsidiaries, current4,954,038 5,532,634 
Noncurrent liabilities456,054 120,033 
Amounts due from non-guarantor subsidiaries, noncurrent164,860 480,460 

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Summarized Statement of Operations Information:
Successor (1)
Predecessor
ObligorsObligors
Period From February 6, 2021 through March 31, 2021Period From January 1, 2021 through February 5, 2021Three Months Ended
March 31, 2020
Operating revenues$83,948 $70,584 $258,944 
Operating costs and expenses87,662 63,255 863,051 
Loss from continuing operations before income taxes(14,691)(2,303,528)(620,531)
Net loss(16,326)(2,318,932)(623,952)
(1)Includes operating revenue of $2.1 million, operating costs and expenses of $(2.8) million and other expense of $4.3 million attributable to transactions with non-guarantor subsidiaries for the period from February 6, 2021 through March 31, 2021; Includes operating revenue of $3.8 million, operating costs and expenses of $(1.1) million and other expense of $(1.2) million attributable to transactions with non-guarantor subsidiaries for the period from January 1, 2021 through February 5, 2021; Includes operating revenue of $26.0 million, operating costs and expenses of $6.5 million and other expense of $12.9 million attributable to transactions with non-guarantor subsidiaries for three months ended March 31, 2020.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements as that term is defined in Item 303(a)(4)(ii) of Regulation S-K.
New Accounting Pronouncements
See Part I, Item 1, Financial Statements, “Note 4— Accounting Pronouncements,” to the condensed consolidated financial statements for a description of the recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
There has been no significant change in our exposure to market risk when compared to those disclosed in “Part II - Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2020.
Item 4. Controls and Procedures
Robert W. Eifler, President and Chief Executive Officer (Principal Executive Officer) of Noble, and Richard B. Barker, Senior Vice President and Chief Financial Officer (Principal Financial Officer) of Noble, have evaluated the disclosure controls and procedures of Noble as of the end of the period covered by this report. On the basis of this evaluation, Mr. Eifler and Mr. Barker have concluded that Noble’s disclosure controls and procedures were effective as of March 31, 2021. Noble’s disclosure controls and procedures are designed to ensure that information required to be disclosed by Noble in the reports that it files with or submits to the SEC are 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.
Robert W. Eifler, President and Chief Executive Officer (Principal Executive Officer) of Finco, and Richard B. Barker, Director, Senior Vice President and Chief Financial Officer (Principal Financial Officer) of Finco, have evaluated the disclosure controls and procedures of Finco as of the end of the period covered by this report. On the basis of this evaluation, Mr. Eifler and Mr. Barker have concluded that Finco’s disclosure controls and procedures were effective as of March 31, 2021. Finco’s disclosure controls and procedures are designed to ensure that information required to be disclosed by Finco in the reports that it files with or submits to the SEC are 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 were no changes in Noble’s internal control over financial reporting that occurred during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of Noble.
There were no changes in Finco’s internal control over financial reporting that occurred during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of Finco.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information regarding legal proceedings is presented in “Note 14— Commitments and Contingencies,” to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q and is incorporated herein by reference.
Item 1A. Risk Factors
There are numerous factors that affect our business and results of operations, many of which are beyond our control. In addition to the risk factors set forth below and the other information presented in this Quarterly Report, you should carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2020, which contains descriptions of significant risks that might cause our actual results of operations in future periods to differ materially from those currently anticipated or expected.
Risks Related to Our Business and Operations
Future sales or the availability for sale of substantial amounts of the Ordinary Shares, or the perception that these sales may occur, could, if the Ordinary Shares are listed on a national securities exchange, adversely affect the trading price of the Ordinary Shares and could impair our ability to raise capital through future sales of equity securities.
Pursuant to the Memorandum of Association of Noble Corporation, the share capital of Noble is $6,000 divided into 500,000,000 ordinary shares of a par value of $0.00001 each and 100,000,000 shares of a par value of $0.00001, each of such class or classes having the rights as our Board of Directors may determine from time to time. On April 12, 2021, there were 43,536,636 Ordinary Shares outstanding and 6,463,182 Penny Warrants (as defined herein) issued and outstanding. In addition, as of April 12, 2021, 8,332,910 Tranche 1 Warrants, 8,332,910 Tranche 2 Warrants and 2,777,698 Tranche 3 Warrants (each as defined herein) are outstanding and exercisable. On April 15, 2021, we issued approximately 16.6 million Ordinary Shares to the equity holders of Pacific Drilling in connection with the closing of the Merger. We also have 7,716,049 Ordinary Shares authorized and initially reserved for issuance pursuant to equity awards under the Noble Corporation 2021 Long-Term Incentive Plan.
A large percentage of the Ordinary Shares are held by a relatively small number of investors. We entered into (i) the Equity Registration Rights Agreement (as defined herein) with certain parties who received Ordinary Shares under the Plan and (ii) the Merger Registration Rights Agreement (as defined herein) with the Merger RRA Holders (as defined herein), in each case pursuant to which we have agreed to file a registration statement with the SEC to facilitate potential future sales of such Ordinary Shares by them. We intend to apply for a listing of the Ordinary Shares on a national securities exchange. However, we can provide no assurance when we will apply for listing of the Ordinary Shares, whether the Ordinary Shares will be approved for listing, whether an active trading market will develop for the Ordinary Shares or as to the liquidity of such trading market for the Ordinary Shares. If the Ordinary Shares are listed on a national securities exchange, sales of a substantial number of the Ordinary Shares in the public markets, or even the perception that these sales might occur (such as upon the filing of the aforementioned registration statements), could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities.
We may issue Ordinary Shares or other securities from time to time as consideration for future acquisitions and investments. If any such acquisition or investment is significant, the number of Ordinary Shares, or the number or aggregate principal amount, as the case may be, of other securities that we may issue may in turn be substantial. We may also grant registration rights covering those Ordinary Shares or other securities in connection with any such acquisitions and investments.
If the Ordinary Shares are listed on a national securities exchange, we cannot predict the effect that future sales of Ordinary Shares will have on the price at which the Ordinary Shares trades or the size of future issuances of Ordinary Shares or the effect, if any, that future issuances will have on the market price of the Ordinary Shares. Sales of substantial amounts of the Ordinary Shares, or the perception that such sales could occur, may, if the Ordinary Shares are listed on a national securities exchange, adversely affect the trading price of the Ordinary Shares.

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Risks Related to the Merger
The integration of Pacific Drilling into the combined company may not be as successful as anticipated, and the combined company may not achieve the intended benefits or do so within the intended timeframe.
The Merger involves numerous operational, strategic, financial, accounting, legal, tax and other risks, including potential liabilities associated with the acquired business. Difficulties in integrating Pacific Drilling into the combined company may result in the combined company performing differently than expected, in operational challenges or in the delay or failure to realize anticipated expense-related efficiencies, and could have an adverse effect on the financial condition, results of operations or cash flows of Noble. Potential difficulties that may be encountered in the integration process include, among other factors:
•    the inability to successfully integrate the businesses of Pacific Drilling into the combined company, operationally and culturally, in a manner that permits Noble to achieve the full revenue and cost savings anticipated from the Merger;
•    complexities associated with managing a larger, more complex, integrated business;
•    not realizing anticipated synergies;
•    the inability to retain key employees and otherwise integrate personnel from the two companies and the loss of key employees;
•    potential unknown liabilities and unforeseen expenses associated with the Merger;
•    difficulty or inability to comply with the covenants of the debt of the combined company;
•    integrating relationships with customers, vendors and business partners;
•    performance shortfalls, including operating, safety, or environmental performance at one or both of the companies as a result of the diversion of management’s attention caused by completing the Merger and integrating Pacific Drilling’s operations into the combined company; and
•    the disruption of, or the loss of momentum in, each company’s ongoing business or inconsistencies in standards, controls, procedures and policies.
Additionally, the success of the Merger will depend, in part, on the combined company’s ability to realize the anticipated benefits and cost savings from combining Noble’s and Pacific Drilling’s businesses. The anticipated benefits and cost savings of the Merger may not be realized fully or at all, may take longer to realize than expected or could have other adverse effects that Noble does not currently foresee. Some of the assumptions that Noble has made, such as the achievement of certain synergies, may not be realized.
As noted above, certain shareholders own a substantial percentage of the Ordinary Shares. Certain of such shareholders may also have received additional Ordinary Shares in the Merger. As a result, the risks relating to concentrated ownership of the Ordinary Shares, described above in, “—Risks Related to Our Business and Operations—Future sales or the availability for sale of substantial amounts of the Ordinary Shares, or the perception that these sales may occur, could, if the Ordinary Shares are listed on a national securities exchange, adversely affect the trading price of the Ordinary Shares and could impair our ability to raise capital through future sales of equity securities,” would be increased.
Risks Related to the Second Lien Notes
Noble conducts substantially all of its business through Finco and its subsidiaries, and the indenture governing the Second Lien Notes contains operating and financial restrictions that may restrict Finco’s business and financing activities.
On the Effective Date, and pursuant to the terms of the Plan, Finco issued an aggregate principal amount of $216 million of Second Lien Notes. The Second Lien Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured second-priority basis, by the direct and indirect subsidiaries of Finco that are Credit Parties under the Revolving Credit Facility. The Second Lien Notes and such guarantees are secured by senior priority liens on the assets subject to liens securing the Revolving Credit Facility, including the equity interests in Finco and each guarantor of the Second Lien Notes, all of the rigs owned by the Company as of the Effective Date or acquired thereafter, certain assets related thereto, and substantially all other assets of Finco and such guarantors, in each case, subject to certain exceptions and limitations. Finco is entitled to pay interest on the Second Lien Notes in the form of PIK Notes at its option in lieu of paying cash interest. As a result, we cannot assure you that Finco will make cash interest payments on the Second Lien Notes. The payment of interest through PIK Notes will increase the amount of Finco’s indebtedness and increase the risks associated with its level of indebtedness.
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Noble conducts substantially all of its business through Finco and its subsidiaries. The primary restrictive covenants contained in the indenture under which the Second Lien Notes were issued limit Finco’s ability and the ability of certain of its subsidiaries to pay dividends or make other distributions or repurchase or redeem its capital stock and certain indebtedness, create liens securing certain indebtedness, incur certain indebtedness, consolidate, merge or transfer all or substantially all of its properties and assets, enter into transactions with affiliates and dispose of assets and use proceeds from the dispositions of assets.
Finco’s ability to comply with the covenants and restrictions contained in the indenture governing the Second Lien Notes may be affected by events beyond its control. If market or other economic conditions deteriorate, Finco’s ability to comply with these covenants and restrictions may be impaired. A failure to comply with the covenants, ratios or tests in the indenture governing the Second Lien Notes, if not cured or waived, could have a material adverse effect on Finco’s and our business, financial condition and results of operations. Finco’s existing and future indebtedness may have cross-default and cross-acceleration provisions. Upon the triggering of any such provision, the relevant creditor may:
•    not be required to lend any additional amounts to Finco;
•    elect to declare all borrowings outstanding due to them, together with accrued and unpaid interest and fees, to be due and payable (and, with respect to Finco’s secured indebtedness, foreclose on the collateral securing such indebtedness);
•    elect to require that all obligations accrue interest at the default rate provided therein, if such rate has not already been imposed;
•    have the ability to require Finco to apply all of its available cash to repay such borrowings; and/or
•    prevent Finco from making debt service payments under its other agreements, any of which could result in an event of default under the Second Lien Notes.
If any of Finco’s existing indebtedness were to be accelerated, there can be no assurance that it would have, or be able to obtain, sufficient funds to repay such indebtedness in full. Even if new financing were available, it may be on terms that are less attractive to Finco than the Revolving Credit Facility or the Second Lien Notes or it may not be on terms that are acceptable to Finco.

Item 6. Exhibits
The following exhibits are filed as part of this Quarterly Report on Form 10-Q.
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Index to Exhibits
Exhibit
Number
Exhibit
2.1
2.2
2.3
2.4
2.5†
3.1
3.2
3.3
4.1
10.1
10.2†
10.3
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Exhibit
Number
Exhibit
10.4
10.5
10.6
10.7
10.8
10.9*
10.10*
10.11*
10.12*
10.13*
10.14
10.15*
10.16*
10.17*
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Exhibit
Number
Exhibit
10.18*
10.19*
10.20*
10.21*
10.22*
10.23
10.24
22.1
31.1
31.2
31.3
31.4
32.1+
32.2+
32.3+
32.4+
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
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Exhibit
Number
Exhibit
101.SCHInline XBRL Taxonomy Extension Schema Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
______________________________________________________
*    Management contract or compensatory plan or arrangement.
†    Certain portions of the exhibit have been omitted. The Company agrees to furnish a supplemental copy with any omitted information to the SEC upon request.
+    Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Noble Corporation, a Cayman Islands company
 
/s/ Richard B. BarkerMay 7, 2021
Richard B. Barker
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Date
/s/ Laura D. CampbellMay 7, 2021
Laura D. Campbell
Vice President, Chief Accounting Officer and Controller
(Principal Accounting Officer)
Date

Noble Finance Company, a Cayman Islands company
/s/ Richard B. BarkerMay 7, 2021
Richard B. Barker
Director, Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Date
/s/ Laura D. CampbellMay 7, 2021
Laura D. Campbell
Vice President and Controller
(Principal Accounting Officer)
Date

57