UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________________________________________________
FORM 10-Q
_____________________________________________________________________________________________________
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2019
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: 001-3621 1
_____________________________________________________________________________________________________
Noble Corporation plc
(Exact name of registrant as specified in its charter)
_____________________________________________________________________________________________________
England and Wales (Registered Number 08354954)
 
98-0619597
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. employer
identification number)
10 Brook Street, London, England, W1S1BG
(Address of principal executive offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: +44 20 3300 2300
Commission file number: 001-31306
_____________________________________________________________________________________________________
Noble Corporation
(Exact name of registrant as specified in its charter)
_____________________________________________________________________________________________________
Cayman Islands
 
98-0366361
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. employer
identification number)
Suite 3D Landmark Square, 64 Earth Close, P.O. Box 31327 George Town, Grand Cayman, Cayman Islands, KY1-1206
(Address of principal executive offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (345) 938-0293
_______________________________________________________________________________________________
Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   þ     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   þ     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 plc:
Large accelerated filer þ
Accelerated filer ¨
Non-accelerated filer ¨
Smaller reporting company ¨
Emerging growth company ¨
Noble Corporation:
Large accelerated filer ¨
Accelerated filer ¨
Non-accelerated filer þ
Smaller reporting company ¨
Emerging 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   þ
Securities registered pursuant to Section 12(b) of the Act:
Name of Company
 
Title of each class
 
Trading symbol(s)
 
Name of each exchange on which registered
Noble Corporation plc
 
Ordinary Shares
 
NE
 
New York Stock Exchange
Noble Corporation
 
None
 
—

 
—
Number of shares outstanding and trading at April 30, 2019: Noble Corporation plc - 249,155,155
Number of shares outstanding: Noble Corporation - 261,245,693
Noble Corporation, a Cayman Islands company and a wholly owned subsidiary of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, meets the conditions set forth in General Instructions H(1) (a) and (b) of Form 10-Q and is therefore filing this Quarterly Report on Form 10-Q with the reduced disclosure format contemplated by paragraphs (b) and (c) of General Instruction H(2) of Form 10-Q.



TABLE OF CONTENTS
 
 
 
 
 
Page
PART I
 
 
 
Item 1
 
 
 
 
 
Noble Corporation plc (Noble-UK) Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noble Corporation (Noble-Cayman) Financial Statements:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2
 
 
Item 3
 
 
Item 4
 
 
PART II
 
 
 
Item 1
 
 
Item 1A
 
 
Item 2
 
 
Item 6
 
 
 
 
 
 
 
 
This combined Quarterly Report on Form 10-Q is separately filed by Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble-UK”), and Noble Corporation, a Cayman Islands company (“Noble-Cayman”). Information in this filing relating to Noble-Cayman is filed by Noble-UK and separately by Noble-Cayman on its own behalf. Noble-Cayman makes no representation as to information relating to Noble-UK (except as it may relate to Noble-Cayman) or any other affiliate or subsidiary of Noble-UK. Since Noble-Cayman meets the conditions specified in General Instructions H(1)(a) and (b) to Form 10-Q, it is permitted to use the reduced disclosure format for wholly-owned subsidiaries of reporting companies as stated in General Instructions H(2). Accordingly, Noble-Cayman has omitted from this report the information called for by “Item 3 (Quantitative and Qualitative Disclosures about Market Risk)” of Part I of Form 10-Q and the following items of Part II of Form 10-Q, “Item 2 (Unregistered Sales of Equity Securities and Use of Proceeds),” and “Item 3 (Defaults upon Senior Securities).”
This report should be read in its entirety as it pertains to each Registrant. Except where indicated, the 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-UK and its condensed consolidated subsidiaries, including Noble-Cayman.

2


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
NOBLE CORPORATION PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
March 31,
2019
 
December 31,
2018
ASSETS
Current assets
 
 
 
 
Cash and cash equivalents
 
$
187,093

 
$
375,232

Accounts receivable, net
 
211,729

 
200,722

Taxes receivable
 
16,294

 
20,498

Prepaid expenses and other current assets
 
45,994

 
62,604

Total current assets
 
461,110

 
659,056

Property and equipment, at cost
 
11,017,281

 
10,956,412

Accumulated depreciation
 
(2,510,699
)
 
(2,475,694
)
Property and equipment, net
 
8,506,582

 
8,480,718

Other assets
 
148,622

 
125,149

Total assets
 
$
9,116,314

 
$
9,264,923

LIABILITIES AND EQUITY
Current liabilities
 
 
 
 
Current maturities of long-term debt
 
$
300,000

 
$
—

Accounts payable
 
111,044

 
125,557

Accrued payroll and related costs
 
34,867

 
50,284

Taxes payable
 
26,482

 
29,386

Interest payable
 
64,201

 
100,100

Other current liabilities
 
59,038

 
60,130

Total current liabilities
 
595,632

 
365,457

Long-term debt
 
3,550,791

 
3,877,402

Deferred income taxes
 
81,009

 
91,695

Other liabilities
 
305,074

 
275,795

Total liabilities
 
4,532,506

 
4,610,349

Commitments and contingencies (Note 13)
 


 


Shareholders’ equity
 
 
 
 
Common stock, $0.01 par value, ordinary shares; 249,150 and 246,794 shares outstanding as of March 31, 2019 and December 31, 2018, respectively
 
2,491

 
2,468

Additional paid-in capital
 
699,552

 
699,409

Retained earnings
 
3,537,477

 
3,608,366

Accumulated other comprehensive loss
 
(56,014
)
 
(57,072
)
Total shareholders ’ equity
 
4,183,506

 
4,253,171

Noncontrolling interests
 
400,302

 
401,403

Total equity
 
4,583,808

 
4,654,574

Total liabilities and equity
 
$
9,116,314

 
$
9,264,923

See accompanying notes to the unaudited condensed consolidated financial statements.

3


NOBLE CORPORATION PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Operating revenues
 
 
 
 
Contract drilling services
 
$
270,501

 
$
229,106

Reimbursables and other
 
12,387

 
6,051

 
 
282,888

 
235,157

Operating costs and expenses
 
 
 
 
Contract drilling services
 
171,728

 
136,849

Reimbursables
 
9,395

 
4,350

Depreciation and amortization
 
109,578

 
128,755

General and administrative
 
15,999

 
22,083

 
 
306,700

 
292,037

Operating loss
 
(23,812
)
 
(56,880
)
Other income (expense)
 
 
 
 
Interest expense, net of amounts capitalized
 
(70,244
)
 
(76,015
)
Gain (loss) on extinguishment of debt, net
 
31,266

 
(8,768
)
Interest income and other, net
 
2,506

 
1,339

Loss from continuing operations before income taxes
 
(60,284
)
 
(140,324
)
Income tax provision
 
(2,865
)
 
(2,996
)
Net loss from continuing operations
 
(63,149
)
 
(143,320
)
Net loss from discontinued operations, net of tax
 
(3,821
)
 
—

Net loss
 
(66,970
)
 
(143,320
)
Net (income) loss attributable to noncontrolling interests
 
(3,919
)
 
986

Net loss attributable to Noble Corporation plc
 
$
(70,889
)
 
$
(142,334
)
Net loss attributable to Noble Corporation plc
 
 
 
 
Net loss from continuing operations
 
$
(67,068
)
 
$
(142,334
)
Net loss from discontinued operations, net of tax
 
(3,821
)
 
—

Net loss attributable to Noble Corporation plc
 
$
(70,889
)
 
$
(142,334
)
Per share data
 
 
 
 
Basic:
 
 
 
 
Loss from continuing operations
 
$
(0.27
)
 
$
(0.58
)
Loss from discontinued operations
 
(0.02
)
 
—

Net loss attributable to Noble Corporation plc
 
$
(0.29
)
 
$
(0.58
)
 
 
 
 
 
Diluted:
 
 
 
 
Loss from continuing operations
 
$
(0.27
)
 
$
(0.58
)
Loss from discontinued operations
 
(0.02
)
 
—

Net loss attributable to Noble Corporation plc
 
$
(0.29
)
 
$
(0.58
)
 
 
 
 
 
See accompanying notes to the unaudited condensed consolidated financial statements.

4


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

 
 
Three Months Ended March 31,
 
 
2019
 
2018
Net loss
 
$
(66,970
)
 
$
(143,320
)
Other comprehensive income (loss)
 
 
 
 
Foreign currency translation adjustments
 
508

 
667

Amortization of deferred pension plan amounts (net of tax provision of $145 and $87 for the three months ended March 31, 2019 and 2018, respectively)
 
550

 
324

Other comprehensive income, net
 
1,058

 
991

Net comprehensive (income) loss attributable to noncontrolling interests
 
(3,919
)
 
986

Comprehensive loss attributable to Noble Corporation plc
 
$
(69,831
)
 
$
(141,343
)

See accompanying notes to the unaudited condensed consolidated financial statements.

5


NOBLE CORPORATION PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
Net loss
 
$
(66,970
)
 
$
(143,320
)
Adjustments to reconcile net loss to net cash flow from operating activities:
 
 
 
 
Depreciation and amortization
 
109,578

 
128,755

(Gain) loss on extinguishment of debt, net
 
(31,266
)
 
8,768

Deferred income taxes
 
2,208

 
(4,906
)
Amortization of share-based compensation
 
2,952

 
6,282

Other costs, net
 
(3,264
)
 
3,626

Changes in components of working capital:
 
 
 
 
Change in taxes receivable
 
4,204

 
84,486

Net changes in other operating assets and liabilities
 
(58,217
)
 
(28,778
)
Net cash provided by (used in) operating activities
 
(40,775
)
 
54,913

Cash flows from investing activities
 
 
 
 
Capital expenditures
 
(96,793
)
 
(33,816
)
Proceeds from disposal of assets, net
 
7,930

 
117

Net cash used in investing activities
 
(88,863
)
 
(33,699
)
Cash flows from financing activities
 
 
 
 
Issuance of senior notes
 
—

 
750,000

Borrowings on credit facilities
 
350,000

 
—

Repayments of debt
 
(400,000
)
 
(952,209
)
Debt issuance costs
 
(90
)
 
(14,184
)
Dividends paid to noncontrolling interests
 
(5,020
)
 
(2,667
)
Taxes withheld on employee stock transactions
 
(2,763
)
 
(3,305
)
Net cash used in financing activities
 
(57,873
)
 
(222,365
)
Net decrease in cash, cash equivalents and restricted cash
 
(187,511
)
 
(201,151
)
Cash, cash equivalents and restricted cash, beginning of period
 
375,907

 
662,829

Cash, cash equivalents and restricted cash, end of period
 
$
188,396

 
$
461,678

See accompanying notes to the unaudited condensed consolidated financial statements.

6


NOBLE CORPORATION PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
(Unaudited)
 
 
 
Shares
 
Additional Paid-in Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Income (Loss)
 
Noncontrolling Interests
 
Total Equity
 
 
Balance
 
Par Value
 
 
 
 
 
Balance at December 31, 2017
 
244,971

 
$
2,450

 
$
678,922

 
$
4,637,677

 
$
(42,888
)
 
$
674,467

 
$
5,950,628

Tax effect of intra-entity asset transfers
 
—

 
—

 
—

 
(148,393
)
 
—

 
—

 
(148,393
)
Stranded tax effect resulting from the Tax Cuts and Jobs Act
 
—

 
—

 
—

 
5,540

 
(5,540
)
 
—

 
—

Adjustment for adopting the revenue recognition standard
 
—

 
—

 
—

 
(1,488
)
 
—

 
—

 
(1,488
)
Balance at January 1, 2018
 
244,971

 
2,450

 
678,922

 
4,493,336

 
(48,428
)
 
674,467

 
5,800,747

Employee related equity activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of share-based compensation
 
—

 
—

 
6,282

 
—

 
—

 
—

 
6,282

Issuance of share-based compensation shares
 
1,807

 
14

 
(2
)
 
—

 
—

 
—

 
12

Shares withheld for taxes on equity transactions
 
—

 
—

 
(3,319
)
 
—

 
—

 
—

 
(3,319
)
Net loss
 
—

 
—

 
—

 
(142,334
)
 
—

 
(986
)
 
(143,320
)
Dividends paid to noncontrolling interests
 
—

 
—

 
—

 
—

 
—

 
(2,667
)
 
(2,667
)
Dividend equivalents (1)
 
—

 
—

 
—

 
116

 
—

 
—

 
116

Other comprehensive income, net
 
—

 
—

 
—

 
—

 
991

 
—

 
991

Balance at March 31, 2018
 
246,778

 
$
2,464

 
$
681,883

 
$
4,351,118

 
$
(47,437
)
 
$
670,814

 
$
5,658,842

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
 
246,794

 
$
2,468

 
$
699,409

 
$
3,608,366

 
$
(57,072
)
 
$
401,403

 
$
4,654,574

Employee related equity activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of share-based compensation
 
—

 
—

 
2,952

 
—

 
—

 
—

 
2,952

Issuance of share-based compensation shares
 
2,356

 
23

 
(23
)
 
—

 
—

 
—

 
—

Shares withheld for taxes on equity transactions
 
—

 
—

 
(2,786
)
 
—

 
—

 
—

 
(2,786
)
Net income (loss)
 
—

 
—

 
—

 
(70,889
)
 
—

 
3,919

 
(66,970
)
Dividends paid to noncontrolling interests
 
—

 
—

 
—

 
—

 
—

 
(5,020
)
 
(5,020
)
Other comprehensive income, net
 
—

 
—

 
—

 
—

 
1,058

 
—

 
1,058

Balance at March 31, 2019
 
249,150

 
$
2,491

 
$
699,552

 
$
3,537,477

 
$
(56,014
)
 
$
400,302

 
$
4,583,808

(1)  
Activity associated with dividend equivalents, which are related to performance awards granted in 2016, to be paid upon vesting.
See accompanying notes to the unaudited condensed consolidated financial statements.



7


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

 
 
March 31,
2019
 
December 31,
2018
ASSETS
Current assets
 
 
 
 
Cash and cash equivalents
 
$
187,015

 
$
374,375

Accounts receivable, net
 
211,729

 
200,722

Taxes receivable
 
16,303

 
20,498

Prepaid expenses and other current assets
 
45,601

 
61,917

Total current assets
 
460,648

 
657,512

Property and equipment, at cost
 
11,017,281

 
10,956,412

Accumulated depreciation
 
(2,510,699
)
 
(2,475,694
)
Property and equipment, net
 
8,506,582

 
8,480,718

Other assets
 
148,622

 
125,149

Total assets
 
$
9,115,852

 
$
9,263,379

LIABILITIES AND EQUITY
Current liabilities
 
 
 
 
Current maturities of long-term debt
 
$
300,000

 
$
—

Accounts payable
 
110,915

 
125,237

Accrued payroll and related costs
 
34,867

 
50,284

Taxes payable
 
26,482

 
29,386

Interest payable
 
64,201

 
100,100

Other current liabilities
 
59,038

 
60,012

Total current liabilities
 
595,503

 
365,019

Long-term debt
 
3,550,791

 
3,877,402

Deferred income taxes
 
81,009

 
91,695

Other liabilities
 
305,074

 
275,795

Total liabilities
 
4,532,377

 
4,609,911

Commitments and contingencies (Note 13)
 


 


Shareholders’ equity
 
 
 
 
Common stock, $0.10 par value, ordinary shares; 261,246 shares outstanding as of March 31, 2019 and December 31, 2018
 
26,125

 
26,125

Capital in excess of par value
 
650,022

 
647,082

Retained earnings
 
3,563,040

 
3,635,930

Accumulated other comprehensive loss
 
(56,014
)
 
(57,072
)
Total shareholders ’ equity
 
4,183,173

 
4,252,065

Noncontrolling interests
 
400,302

 
401,403

Total equity
 
4,583,475

 
4,653,468

Total liabilities and equity
 
$
9,115,852

 
$
9,263,379

See accompanying notes to the unaudited condensed consolidated financial statements.

8


NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
 
 
 
Three Months Ended March 31,
 
 
 
2019
 
2018
 
Operating revenues
 
 
 
 
 
Contract drilling services
 
$
270,501

 
$
229,106

 
Reimbursables and other
 
12,387

 
6,050

 
 
 
282,888

 
235,156

 
Operating costs and expenses
 
 
 
 
 
Contract drilling services
 
170,862

 
136,406

 
Reimbursables
 
9,395

 
4,350

 
Depreciation and amortization
 
108,772

 
127,639

 
General and administrative
 
7,595

 
13,457

 
 
 
296,624

 
281,852

 
Operating loss
 
(13,736
)
 
(46,696
)
 
Other income (expense)
 
 
 
 
 
Interest expense, net of amounts capitalized
 
(70,244
)
 
(76,015
)
 
Gain (loss) on extinguishment of debt, net
 
31,266

 
(8,768
)
 
Interest income and other, net
 
2,506

 
1,346

 
Loss from continuing operations before income taxes
 
(50,208
)
 
(130,133
)
 
Income tax provision
 
(2,865
)
 
(2,996
)
 
Net loss from continuing operations
 
(53,073
)
 
(133,129
)
 
Net loss from discontinued operations, net of tax
 
(3,821
)
 
—

 
Net loss
 
(56,894
)
 
(133,129
)
 
Net (income) loss attributable to noncontrolling interests
 
(3,919
)
 
986

 
Net loss attributable to Noble Corporation
 
$
(60,813
)
 
$
(132,143
)
 
See accompanying notes to the unaudited condensed consolidated financial statements.

9


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

 
 
Three Months Ended March 31,
 
 
2019
 
2018
Net loss
 
$
(56,894
)
 
$
(133,129
)
Other comprehensive income (loss)
 
 
 
 
Foreign currency translation adjustments
 
508

 
667

Foreign currency forward contracts
 
—

 
—

Amortization of deferred pension plan amounts (net of tax provision of $145 and $87 for the three months ended March 31, 2019 and 2018, respectively)
 
550

 
324

Other comprehensive income, net
 
1,058

 
991

Net comprehensive (income) loss attributable to noncontrolling interests
 
(3,919
)
 
986

Comprehensive loss attributable to Noble Corporation
 
$
(59,755
)
 
$
(131,152
)
See accompanying notes to the unaudited condensed consolidated financial statements.



10


NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Cash flows from operating activities
 
 
 
 
Net loss
 
$
(56,894
)
 
$
(133,129
)
Adjustments to reconcile net loss to net cash flow from operating activities:
 
 
 
 
Depreciation and amortization
 
108,772

 
127,639

(Gain) loss on extinguishment of debt, net
 
(31,266
)
 
8,768

Deferred income taxes
 
2,208

 
(4,906
)
Amortization of share-based compensation
 
2,940

 
6,282

Other costs, net
 
(3,264
)
 
3,626

Changes in components of working capital:
 
 
 
 
Change in taxes receivable
 
4,195

 
84,486

Net changes in other operating assets and liabilities
 
(57,373
)
 
(27,869
)
Net cash provided by (used in) operating activities
 
(30,682
)
 
64,897

Cash flows from investing activities
 
 
 
 
Capital expenditures
 
(96,793
)
 
(33,816
)
Proceeds from disposal of assets, net
 
7,930

 
117

Net cash used in investing activities
 
(88,863
)
 
(33,699
)
Cash flows from financing activities
 
 
 
 
Issuance of senior notes
 
—

 
750,000

Borrowings on credit facilities
 
350,000

 
—

Repayments of debt
 
(400,000
)
 
(952,209
)
Debt issuance costs
 
(90
)
 
(14,184
)
Dividends paid to noncontrolling interests
 
(5,020
)
 
(2,667
)
Distributions to parent company, net
 
(12,077
)
 
(13,318
)
Net cash used in financing activities
 
(67,187
)
 
(232,378
)
Net decrease in cash, cash equivalents and restricted cash
 
(186,732
)
 
(201,180
)
Cash, cash equivalents and restricted cash, beginning of period
 
375,050

 
662,011

Cash, cash equivalents and restricted cash, end of period
 
$
188,318

 
$
460,831

See accompanying notes to the unaudited condensed consolidated financial statements.

11


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

 
 
Shares
 
Capital in Excess of Par Value
 
Retained Earnings
 
Accumulated Other Comprehensive Income (Loss)
 
Noncontrolling Interests
 
Total Equity
 
 
Balance
 
Par Value
 
 
 
 
 
Balance at December 31, 2017
 
261,246

 
$
26,125

 
$
623,137

 
$
4,669,173

 
$
(42,888
)
 
$
674,467

 
$
5,950,014

Tax effect of intra-entity asset transfers
 
—

 
—

 
—

 
(148,393
)
 
—

 
—

 
(148,393
)
Stranded tax effect resulting from the Tax Cuts and Jobs Act
 
—

 
—

 
—

 
5,540

 
(5,540
)
 
—

 
—

Adjustment for adopting the revenue recognition standard
 
—

 
—

 
—

 
(1,488
)
 
—

 
—

 
(1,488
)
Balance at January 1, 2018
 
261,246

 
26,125

 
623,137

 
4,524,832

 
(48,428
)
 
674,467

 
5,800,133

Distributions to parent company, net
 
—

 
—

 
—

 
(13,318
)
 
—

 
—

 
(13,318
)
Capital contribution by parent - share-based compensation
 
—

 
—

 
6,282

 
—

 
—

 
—

 
6,282

Net income (loss)
 
—

 
—

 
—

 
(132,143
)
 
—

 
(986
)
 
(133,129
)
Dividends paid to noncontrolling interests
 
—

 
—

 
—

 
—

 
—

 
(2,667
)
 
(2,667
)
Other comprehensive income, net
 
—

 
—

 
—

 
—

 
991

 
—

 
991

Balance at March 31, 2018
 
261,246

 
$
26,125

 
$
629,419

 
$
4,379,371

 
$
(47,437
)
 
$
670,814

 
$
5,658,292

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
 
261,246

 
$
26,125

 
$
647,082

 
$
3,635,930

 
$
(57,072
)
 
$
401,403

 
$
4,653,468

Distributions to parent company, net
 
—

 
—

 
—

 
(12,077
)
 
—

 
—

 
(12,077
)
Capital contribution by parent - share-based compensation
 
—

 
—

 
2,940

 
—

 
—

 
—

 
2,940

Net income (loss)
 
—

 
—

 
—

 
(60,813
)
 
—

 
3,919

 
(56,894
)
Dividends paid to noncontrolling interests
 
—

 
—

 
—

 
—

 
—

 
(5,020
)
 
(5,020
)
Other comprehensive income, net
 
—

 
—

 
—

 
—

 
1,058

 
—

 
1,058

Balance at March 31, 2019
 
261,246

 
$
26,125

 
$
650,022

 
$
3,563,040

 
$
(56,014
)
 
$
400,302

 
$
4,583,475

See accompanying notes to the unaudited condensed consolidated financial statements.

12
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)


Note 1— Organization and Basis of Presentation
Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble-UK”), is a leading offshore drilling contractor for the oil and gas industry. We provide contract drilling services with our global fleet of mobile offshore drilling units. As of March 31, 2019 , our fleet consisted of 12 floaters (consisting of four semisubmersibles and eight drillships) and 13 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.
Noble Corporation, a Cayman Islands company (“Noble-Cayman”), is an indirect, wholly-owned subsidiary of Noble-UK, our publicly-traded parent company. Noble-UK’s principal asset is all of the shares of Noble-Cayman. Noble-Cayman has no public equity outstanding. The condensed consolidated financial statements of Noble-UK include the accounts of Noble-Cayman, and Noble-UK conducts substantially all of its business through Noble-Cayman and its subsidiaries.
The accompanying unaudited condensed consolidated financial statements of Noble-UK and Noble-Cayman have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) as they pertain to Quarterly Reports on Form 10-Q. Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The unaudited financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the financial position and results of operations for the interim periods, on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a recurring nature. The December 31, 2018 Condensed Consolidated Balance Sheets presented herein are derived from the December 31, 2018 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, 2018 , filed by both Noble-UK and Noble-Cayman. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
Beginning in the first quarter of 2019 , we combined the semisubmersibles and drillships in our contract drilling services fleet into a single category, “floaters” for reporting purposes. We have made certain reclassifications so as to conform to such current period presentation. The reclassification did not have a material effect on our Condensed Consolidated Statements of Operations or related disclosures.
Note 2— Accounting Pronouncements
Accounting Standards Adopted
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 (Topic 842, “Leases”), as amended, which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, time and uncertainty of cash flows arising from lease agreements. We adopted this standard, on a modified retrospective basis, effective January 1, 2019 and will not restate comparative periods. Our adoption did not have a material effect on our condensed consolidated financial statements.
With respect to leases in which we are the lessee, we recognized a lease liability and a corresponding right-of-use asset of approximately $28.0 million as of January 1, 2019. We have elected the package of practical expedients that permits us to not reassess (1) whether previously expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. In addition, we have elected the hindsight practical expedient in connection with our adoption of the new lease standard. As lessee, we have made the accounting policy election to not recognize a right-of-use asset lease and lease liability for leases with a term of 12 months or less. We will recognize lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. We have also elected the practical expedient to not separate lease and non-lease components.
Our drilling contracts contain a lease component related to the underlying drilling equipment, in addition to the service component provided by our crews and our expertise to operate such drilling equipment. We have concluded the non-lease service of operating our equipment and providing expertise in the drilling of the client’s well is predominant in our drilling contracts. We have applied the practical expedient to account for the lease and associated non-lease components as a single component. With the election of the practical expedient, we will continue to present a single performance obligation under the new revenue guidance in Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers.”
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.

13
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

Note 3— Consolidated Joint Ventures
We maintain a 50 percent interest in two joint ventures, each with a subsidiary of Royal Dutch Shell plc (“Shell”), that own and operate the two Bully -class drillships. We have determined that we are the primary beneficiary of the joint ventures. Accordingly, we consolidate the entities in our condensed consolidated financial statements after eliminating intercompany transactions. Shell’s equity interests are presented as noncontrolling interests on our Condensed Consolidated Balance Sheets.
During the three months ended March 31, 2019 and 2018 , the Bully joint ventures approved and paid dividends totaling $10.0 million and $5.3 million , respectively. Of these amounts, 50 percent was paid to our joint venture partner. The combined carrying amount of the Bully -class drillships at both March 31, 2019 and December 31, 2018 totaled $0.7 billion . These assets were primarily funded through partner equity contributions. Cash held by the Bully joint ventures totaled approximately $42.1 million at March 31, 2019 as compared to approximately $45.2 million at December 31, 2018 .
Note 4— Loss Per Share
The following table presents the computation of basic and diluted loss per share for Noble-UK:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Numerator:
 
 

 
 
Basic
 
 
 
 
Net loss from continuing operations
 
$
(67,068
)
 
$
(142,334
)
Net loss from discontinued operations, net of tax
 
(3,821
)
 
—

Net loss attributable to Noble Corporation plc
 
$
(70,889
)
 
$
(142,334
)
Diluted
 
 

 
 

Net loss from continuing operations
 
$
(67,068
)
 
$
(142,334
)
Net loss from discontinued operations, net of tax
 
(3,821
)
 
—

Net loss attributable to Noble Corporation plc
 
$
(70,889
)
 
$
(142,334
)
Denominator:
 
 

 
 

Weighted average shares outstanding - basic
 
248,251

 
246,175

Weighted average shares outstanding - diluted
 
248,251

 
246,175

Loss per share
 
 

 
 

Basic:
 
 
 
 
Loss from continuing operations
 
$
(0.27
)
 
$
(0.58
)
Loss from discontinued operations
 
(0.02
)
 
—

Net loss attributable to Noble Corporation plc
 
$
(0.29
)
 
$
(0.58
)
Diluted:
 
 
 
 
Loss from continuing operations
 
$
(0.27
)
 
$
(0.58
)
Loss from discontinued operations
 
(0.02
)
 
—

Net loss attributable to Noble Corporation plc
 
$
(0.29
)
 
$
(0.58
)
Only those items having a dilutive impact on our basic loss per share are included in diluted loss per share. For the three months ended March 31, 2019 and 2018 , approximately 13.2 million and 13.7 million share-based awards, respectively, were excluded from diluted loss per share since the effect would have been anti-dilutive.
Share capital
As of March 31, 2019 , Noble-UK had approximately 249.2 million shares outstanding and trading as compared to approximately 246.8 million shares outstanding and trading at December 31, 2018 . At our 2019 Annual General Meeting, shareholders approved a proposal to allow our Board of Directors to increase share capital through the issuance of up to approximately 83.1 million ordinary shares (at current nominal value

14
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

of $0.01 per share). The right of our directors to allot shares will expire at the end of our 2020 Annual General Meeting unless we seek an extension from shareholders at that time. No shares were allotted during the three months ended March 31, 2019 .
The declaration and payment of dividends require the authorization of the Board of Directors of Noble-UK, provided that such dividends on issued share capital may be paid only out of Noble-UK’s “distributable reserves” on its statutory balance sheet in accordance with UK law. Therefore, Noble-UK is not permitted to pay dividends out of share capital, which includes share premium. Noble has not paid dividends since the third quarter of 2016. 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 Board of Directors.
Share repurchases
Under UK law, the Company is only permitted to purchase its own shares by way of an “off-market purchase” in a plan approved by shareholders. We currently do not have shareholder authority to repurchase shares. During the three months ended March 31, 2019 and 2018, we did not repurchase any of our shares.
Note 5— Property and Equipment
Property and equipment, at cost, for Noble-UK consisted of the following:
 
 
March 31, 2019
 
December 31, 2018
Drilling equipment and facilities
 
$
10,497,161

 
$
10,546,376

Construction in progress
 
318,700

 
209,091

Other
 
201,420

 
200,945

Property and equipment, at cost
 
$
11,017,281

 
$
10,956,412

On February 28, 2019, we purchased another GustoMSC CJ46 rig, the Noble Joe Knight. We paid $83.8 million for the rig, with $30.2 million paid in cash and the remaining $53.6 million of the purchase price financed with a loan by the seller, PaxOcean Group (“PaxOcean”). See “ Note 6— Debt ” for additional information.
Note 6— Debt
Credit Facilities
2015 Credit Facility
We have a $300 million senior unsecured credit facility that will mature in January 2020 and is guaranteed by our indirect, wholly-owned subsidiaries, Noble Holding (U.S.) LLC (“NHUS”) and Noble Holding International Limited (“NHIL”) (the “2015 Credit Facility”).
In January 2018, in connection with entering into the 2017 Credit Facility (as defined herein), we amended the 2015 Credit Facility, which caused, among other things, a reduction in the aggregate principal amount of commitments under the 2015 Credit Facility. As a result of the 2015 Credit Facility’s reduction in the aggregate principal amount of commitments, we recognized a net loss of approximately $2.3 million in the three months ended March 31, 2018. Borrowings under the 2015 Credit Facility bear interest at the London inter-bank offered rate (“LIBOR”) plus an applicable margin, which is currently the maximum contractual rate of 1.65% . At March 31, 2019 , we had $300.0 million of borrowings outstanding under the 2015 Credit Facility.
2017 Credit Facility
On December 21, 2017, Noble Cayman Limited, a Cayman Islands company and a wholly-owned indirect subsidiary of Noble-Cayman ; Noble International Finance Company, a Cayman Islands company and a wholly-owned indirect subsidiary of Noble-Cayman ; and Noble Holding UK Limited, a company incorporated under the laws of England and Wales and a wholly-owned direct subsidiary of Noble-UK (“NHUK”), as parent guarantor, entered into a new senior unsecured credit agreement (the “ 2017 Credit Facility” and, together with the 2015 Credit Facility, the “Credit Facilities”). The maximum aggregate amount of commitments under the 2017 Credit Facility is approximately $1.5 billion . Borrowings under the 2017 Credit Facility are subject to certain conditions precedent, including that there be no unused commitments to advance loans under the 2015 Credit Facility. The 2017 Credit Facility will mature in January 2023. Borrowings may be used for working capital and other general corporate purposes. The 2017 Credit Facility provides for a letter of credit sub-facility currently 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. Borrowing under the 2017 Credit Facility bear interest at LIBOR

15
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

plus an applicable margin, which is currently the maximum contractual rate of 4.25% . At March 31, 2019 , we had $50.0 million of borrowings outstanding under the 2017 Credit Facility, plus $3.4 million of performance letters of credit.
Both of our Credit Facilities have provisions which vary the applicable interest rates for borrowings based upon our debt ratings. We also pay a facility fee under the 2015 Credit Facility on the full commitments thereunder (used or unused) and a commitment fee under the 2017 Credit Facility on the daily unused amount of the underlying commitments, in each case which varies depending on our credit ratings. At March 31, 2019 , the interest rates and fees in effect under our Credit Facilities were the highest permitted interest rates under those agreements.
Debt Issuance
In January 2018, we issued $750.0 million aggregate principal amount of our Senior Notes due 2026 (the “ 2026 Notes”) through our indirect wholly-owned subsidiary, NHIL. The net proceeds of the offering of approximately $737.4 million , after expenses, were used to retire a portion of our near-term senior notes in a related tender offer.
The indenture for the 2026 Notes contains certain covenants and restrictions, including, among others, restrictions on our subsidiaries’ ability to incur certain additional indebtedness. Additionally, the subsidiary guarantors must own, directly or indirectly, (i) assets comprising at least 85% of the revenue of Noble-Cayman and its subsidiaries on a consolidated basis and (ii) jackups, semisubmersibles, drillships, submersibles or other mobile offshore drilling units of material importance, the combined book value of which comprises at least 85% of the combined book value of all such assets of Noble-Cayman and its subsidiaries on a consolidated basis, in each case, with respect to the most recently completed fiscal year.
Seller Loans
2019 Seller Loan
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”). The 2019 Seller Loan has a term of four years and requires a 5% principal payment at the end of the third year with the remaining 95% of the principal due at the end of the term. The 2019 Seller Loan bears a cash interest rate of 4.25% and the equivalent of a 1.25% interest rate paid-in-kind over the four -year term of the 2019 Seller Loan. Based on the terms of the 2019 Seller Loan, the 1.25% paid-in-kind interest rate is accelerated into the first year, resulting in an overall first year interest rate of 8.91% , of which only 4.25% is payable in cash. Thereafter, the paid-in-kind interest ends and the cash interest rate of 4.25% is payable for the remainder of the term.
2018 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”). The 2018 Seller Loan has a term of four years and requires a 5% principal payment at the end of the third year with the remaining 95% of the principal due at the end of the term. The 2018 Seller Loan bears a cash interest rate of 4.25% and the equivalent of a 1.25% interest rate paid-in-kind over the four -year term of the 2018 Seller Loan. Based on the terms of the 2018 Seller Loan, the 1.25% paid-in-kind interest rate is accelerated into the first year, resulting in an overall first year interest rate of 8.91% , of which only 4.25% is payable in cash. Thereafter, the paid-in-kind interest ends and the cash interest rate of 4.25% is payable for the remainder of the term.
Both of the Seller Loans are guaranteed by Noble-Cayman and each is secured by a mortgage on the applicable rig and by the pledge of the shares of the applicable single-purpose entity that owns the relevant rig. Each Seller Loan contains debt to total capitalization ratio and minimum liquidity financial covenants substantially similar to the 2017 Credit Facility, and an asset and revenue covenant substantially similar to the 2026 Notes as well as other covenants and provisions customarily found in secured transactions, including a cross default provision. Each Seller Loan requires immediate repayment on the occurrence of certain events, including the termination of the drilling contract associated with the relevant rig.
Senior Notes Interest Rate Adjustments
Our Senior Notes due 2025 and our Senior Notes due 2045 are subject to provisions that vary the applicable interest rates based on our debt rating. Effective April 2018, these senior notes have reached the contractually defined maximum interest rate set for each rating agency and no further interest rate increases are possible. The interest rates on these senior notes may be decreased if our debt ratings were to be raised by either rating agency above specified levels. Our other outstanding senior notes do not contain provisions varying applicable interest rates based upon our credit ratings.

16
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

Debt Tender Offers, Repayments, and Open Market Repurchases
In March 2019, we completed cash tender offers for our Senior Notes due 2020 (the “2020 Notes”), Senior Notes due 2021 (the “2021 Notes”), Senior Notes due 2022 (the “2022 Notes”) and Senior Notes due 2024 (the “2024 Notes”). Pursuant to such tender offers, we purchased $440.9 million aggregate principal amount of these senior notes for $400.0 million , plus accrued interest, using cash on hand and borrowings under the 2015 Credit Facility. As a result of this transaction, we recognized a net gain of approximately $31.3 million .
In October 2018, we purchased $27.4 million aggregate principal amount of various tranches of our senior notes for approximately $20.2 million , plus accrued interest, as open market repurchases and recognized a net gain of approximately $6.9 million .
In August 2018, we purchased $0.4 million aggregate principal amount of our Senior Notes due 2042 for approximately $0.3 million , plus accrued interest, as open market repurchases and recognized a net gain of approximately $0.1 million .
In March 2018, we repaid the remaining aggregate principal amount of $126.6 million of our Senior Notes due 2018 (the “2018 Notes”) at maturity using cash on hand.
In March 2018, we purchased $9.5 million aggregate principal amount of various tranches of our senior notes for approximately $8.7 million , plus accrued interest, as open market repurchases and recognized a net gain of approximately $0.5 million .
In February 2018, we redeemed the remaining principal amount of $61.9 million of our Senior Notes due 2019 (the “2019 Notes”) for approximately $65.3 million , plus accrued interest. As a result of this transaction, we recognized a net loss of approximately $3.5 million .
In February 2018, we completed cash tender offers for the 2018 Notes, the 2019 Notes, the 2020 Notes, the 2021 Notes, the 2022 Notes and the 2024 Notes. Pursuant to such tender offers, we purchased $754.2 million aggregate principal amount of these senior notes for $750.0 million , plus accrued interest, using the net proceeds of the 2026 Notes issuance and cash on hand. As a result of this transaction, we recognized a net loss of approximately $3.5 million .
Covenants
The 2017 Credit Facility contains certain financial covenants applicable to NHUK and its subsidiaries, including (i) a covenant restricting debt to total tangible capitalization to not greater than 0.55 at the end of each fiscal quarter, (ii) a minimum Liquidity requirement of $300.0 million , (iii) a covenant that, beginning with the fiscal quarter ending March 31, 2018, the ratio of the Rig Value (as defined in the 2017 Credit Facility) of Marketed Rigs (as defined in the 2017 Credit Facility) to the sum of commitments under the 2017 Credit Facility plus indebtedness for borrowed money of the borrowers and guarantors, in each case, that directly own Marketed Rigs, is not less than 3:00 to 1:00 at the end of each fiscal quarter and (iv) a covenant that, beginning with the fiscal quarter ending March 31, 2018, the ratio of (A) the Rig Value of the Closing Date Rigs (as defined in the 2017 Credit Facility) that are directly wholly owned by the borrowers and guarantors to (B) the Rig Value of the Closing Date Rigs owned by NHUK, subsidiaries of NHUK and certain local content affiliates, is not less than 80% at the end of each fiscal quarter (such covenants described in (iii) and (iv) of this paragraph, the “Guarantor Ratio Covenants”). The 2017 Credit Facility also includes restrictions on borrowings if, after giving effect to any such borrowings and the application of the proceeds thereof, the aggregate amount of Available Cash (as defined in the 2017 Credit Facility) would exceed $200.0 million .
NHUK has guaranteed the obligations of the borrowers under the 2017 Credit Facility. In addition, certain indirect subsidiaries of Noble-UK that own rigs are guarantors under the 2017 Credit Facility. Certain other subsidiaries of Noble-UK may be required from time to time to guarantee the obligations of the borrowers under the 2017 Credit Facility in order maintain compliance with the Guarantor Ratio Covenants.
The 2017 Credit Facility contains additional restrictive covenants generally applicable to NHUK and its subsidiaries, including restrictions on the incurrence of liens and indebtedness, mergers and other fundamental changes, restricted payments, repurchases and redemptions of indebtedness with maturities outside of the maturity of the 2017 Credit Facility, sale and leaseback transactions and transactions with affiliates.
The 2015 Credit Facility is guaranteed by NHUS and NHIL. The 2015 Credit Facility contains a covenant that limits our ratio of debt to total tangible capitalization, as defined in the 2015 Credit Facility, to 0.60 at the end of each fiscal quarter.
In addition to the covenants from the Credit Facilities noted above, the covenants from the 2026 Notes described under “—Debt Issuance” above, and the covenants from the Seller Loans described under “—Seller Loans” above, the indentures governing our outstanding senior unsecured notes contain covenants that place restrictions on certain merger and consolidation transactions, unless we are the surviving entity or the other party assumes the obligations under the indenture, and on the ability to sell or transfer all or substantially all of our assets. There are also restrictions on incurring or assuming certain liens and on entering into sale and lease-back transactions.

17
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

At March 31, 2019 , our debt to total tangible capitalization ratio under our 2017 Credit Facility was approximately 0.48 and we were in compliance with all applicable debt covenants. We continually monitor compliance with the covenants under our Credit Facilities, senior notes and Seller Loans and expect to remain in compliance throughout 2019 .
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 Credit Facilities approximates fair value as the interest rates are variable and reflective of market rates. All remaining fair value disclosures are presented in “ Note 12— Fair Value of Financial Instruments .”
The following table presents the carrying value, net of unamortized debt issuance costs and discounts, and the estimated fair value of our total debt, not including the effect of unamortized debt issuance costs, respectively:
 
 
March 31, 2019
 
December 31, 2018
 
 
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
Senior unsecured notes:
 
 
 
 
 
 
 
 
4.90% Senior Notes due August 2020
 
$
62,468

 
$
60,066

 
$
65,810

 
$
60,177

4.625% Senior Notes due March 2021
 
79,803

 
77,696

 
92,967

 
84,931

3.95% Senior Notes due March 2022
 
21,171

 
19,213

 
41,617

 
37,096

7.75% Senior Notes due January 2024
 
388,710

 
358,561

 
783,350

 
613,719

7.95% Senior Notes due April 2025
 
446,626

 
388,917

 
446,517

 
339,035

7.875% Senior Notes due February 2026
 
738,389

 
699,773

 
738,075

 
647,085

6.20% Senior Notes due August 2040
 
390,472

 
251,079

 
390,454

 
245,242

6.05% Senior Notes due March 2041
 
389,722

 
250,770

 
389,693

 
247,171

5.25% Senior Notes due March 2042
 
478,028

 
293,770

 
477,996

 
277,056

8.95% Senior Notes due April 2045
 
390,694

 
316,960

 
390,672

 
311,392

Seller loans:
 
 
 
 
 
 
 
 
Seller-financed secured loan due September 2022
 
60,983

 
59,363

 
60,251

 
57,902

Seller-financed secured loan due February 2023
 
53,725

 
50,516

 
—

 
—

Credit facilities:
 
 
 
 
 
 
 
 
2015 Credit Facility matures January 2020
 
300,000

 
300,000

 
—

 
—

2017 Credit Facility matures January 2023
 
50,000

 
50,000

 
—

 
—

Total debt
 
3,850,791

 
3,176,684

 
3,877,402

 
2,920,806

Less: Current maturities of long-term debt
 
(300,000
)
 
(300,000
)
 
—

 
—

Long-term debt
 
$
3,550,791

 
$
2,876,684

 
$
3,877,402

 
$
2,920,806


Note 7— 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 three months ended March 31, 2019 and 2018 . All amounts within the table are shown net of tax.

18
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

 
 
Defined Benefit Pension Items (1)
 
Foreign Currency Items
 
Total
Balance at December 31, 2017
 
$
(27,603
)
 
$
(15,285
)
 
$
(42,888
)
Activity during period:
 
 
 
 
 
 
Stranded tax effect resulting from the Tax Cuts and Jobs Act
 
(5,540
)
 
—

 
(5,540
)
Balance at January 1, 2018
 
(33,143
)
 
(15,285
)
 
(48,428
)
Activity during period:
 
 
 
 
 
 
Other comprehensive income before reclassifications
 
—

 
667

 
667

Amounts reclassified from AOCI
 
324

 
—

 
324

Net other comprehensive income
 
324

 
667

 
991

Balance at March 31, 2018
 
$
(32,819
)
 
$
(14,618
)
 
$
(47,437
)
 
 
 
 
 
 
 
Balance at December 31, 2018
 
$
(39,058
)
 
$
(18,014
)
 
$
(57,072
)
Activity during period:
 
 
 
 
 
 
Other comprehensive loss before reclassifications
 
—

 
508

 
508

Amounts reclassified from AOCI
 
550

 
—

 
550

Net other comprehensive income (loss)
 
550

 
508

 
1,058

Balance at March 31, 2019
 
$
(38,508
)
 
$
(17,506
)
 
$
(56,014
)
(1)  
Defined benefit pension items relate to actuarial changes. Reclassifications from AOCI are recognized as expense on our Condensed Consolidated Statements of Operations through “General and administrative.” See “ Note 11— Employee Benefit Plans ” for additional information.
Note 8— 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 30 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:
 
 
March 31, 2019
 
December 31, 2018
Current contract assets
 
$
20,824

 
$
25,298

Noncurrent contract assets
 
18,438

 
22,366

Total contract assets
 
39,262

 
47,664

 
 
 
 
 
Current contract liabilities (deferred revenue)
 
(29,325
)
 
(32,906
)
Noncurrent contract liabilities (deferred revenue)
 
(42,939
)
 
(47,847
)
Total contract liabilities
 
$
(72,264
)
 
$
(80,753
)

19
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar 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, 2019 are as follows:
 
 
Contract Assets
 
Contract Liabilities
Net balance at December 31, 2018
 
$
47,664

 
$
(80,753
)
 
 
 
 
 
Amortization of deferred costs
 
(8,775
)
 
—

Additions to deferred costs
 
373

 
—

Amortization of deferred revenue
 
—

 
9,355

Additions to deferred revenue
 
—

 
(866
)
Total
 
(8,402
)
 
8,489

 
 
 
 
 
Net balance at March 31, 2019
 
$
39,262

 
$
(72,264
)
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, at the end of the reporting period:    
 
 
Three Months Ended March 31, 2019
 
 
2019
 
2020
 
2021
 
2022
 
2023 and beyond
 
Total
Floaters
 
$
15,598

 
$
16,073

 
$
15,757

 
$
9,255

 
$
3,568

 
$
60,251

Jackups
 
8,352

 
3,661

 
—

 
—

 
—

 
12,013

Total
 
$
23,950

 
$
19,734

 
$
15,757

 
$
9,255

 
$
3,568

 
$
72,264

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, 2019 . 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:
 
 
Three Months Ended March 31, 2019
 
Three Months Ended March 31, 2018
Floaters
 
$
153,154

 
120,636

Jackups
 
117,347

 
108,470

Total
 
$
270,501

 
$
229,106


Note 9— Leases
Leases
We determine if an arrangement is a lease at inception. Our operating lease agreements are primarily for real estate, equipment, storage, dock space and automobiles and are included within “Other current liabilities,” “Other assets” and “Other liabilities,” respectively, on our Condensed Consolidated Balance Sheets.

20
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Certain of our lease agreements include options to extend or terminate the lease, which we do not include in our minimum lease terms unless management is reasonably certain to exercise.
Supplemental balance sheet information related to leases was as follows:
 
 
March 31, 2019
Operating Leases
 
 
Operating lease right-of-use assets
 
$
28,272

Current operating lease liabilities
 
4,396

Long-term operating lease liabilities
 
$
23,243

Weighted average remaining lease term for operating leases (years)
 
9.1

Weighted average discounted rate for operating leases
 
9.6
%
The components of lease cost were as follows:
 
 
March 31, 2019
Operating lease cost
 
$
1,859

Short-term lease cost
 
2,052

Variable lease cost
 
529

    Total lease cost
 
$
4,440

Supplemental cash flow information related to leases was as follows:
 
 
March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
 
 
Operating cash flows from operating leases
 
$
2,200

Maturities of lease liabilities as of March 31, 2019 were as follows:
 
 
Operating Leases
2019
 
$
4,814

2020
 
5,917

2021
 
4,448

2022
 
3,618

2023
 
3,250

Thereafter
 
22,335

    Total lease payments
 
44,382

Less: Interest
 
(16,743
)
    Present value of lease liability
 
$
27,639

Note 10— Income Taxes
At March 31, 2019 , the reserves for uncertain tax positions totaled $195.1 million (net of related tax benefits of $1.0 million ). At December 31, 2018 , the reserves for uncertain tax positions totaled $183.8 million (net of related tax benefits of $1.0 million ).

21
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

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. However, we cannot reasonably estimate a range of changes in our existing liabilities due to various uncertainties, such as the unresolved nature of various audits.
Note 11— Employee Benefit Plans
Pension costs include the following components for the three months ended March 31, 2019 and 2018 :
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
 
Non-U.S.
 
U.S.
 
Non-U.S.
 
U.S.
Interest cost
 
$
445

 
$
2,178

 
$
465

 
$
2,045

Return on plan assets
 
(634
)
 
(2,578
)
 
(716
)
 
(2,979
)
Recognized net actuarial gain
 
3

 
692

 
—

 
411

Net pension benefit cost (gain)
 
$
(186
)
 
$
292

 
$
(251
)
 
$
(523
)
During the three months ended March 31, 2019 and 2018 , we made no contributions to our pension plans. Effective December 31, 2016, employees and alternate payees accrue no future benefits under the U.S. plans and, as such, Noble recognized no service costs with the plans for the three months ended March 31, 2019 and 2018 .
Note 12— Fair Value of Financial Instruments
The following tables present the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis:
 
 
March 31, 2019
 
 
 
 
Estimated Fair Value Measurements
 
 
Carrying Amount
 
Quoted Prices in Active Markets (Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Assets -
 
 
 
 
 
 
 
 
Marketable securities
 
$
7,359

 
$
7,359

 
$
—

 
$
—

 
 
December 31, 2018
 
 
 
 
Estimated Fair Value Measurements
 
 
Carrying Amount
 
Quoted Prices in Active Markets (Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Assets -
 
 
 
 
 
 
 
 
Marketable securities
 
$
8,659

 
$
8,659

 
$
—

 
$
—

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.
Note 13— Commitments and Contingencies
Transocean Ltd.
In January 2017, a subsidiary of Transocean Ltd. (“Transocean”) filed suit against us and certain of our subsidiaries for patent infringement in a Texas federal court and Transocean later added another claim alleging that we breached a 2007 settlement agreement we entered into with Transocean relating to patent claims in respect of another Noble rig. The suit claims that five of our newbuild rigs that operated in the U.S. Gulf of Mexico violated Transocean patents relating to what is generally referred to as dual-activity drilling. We were aware of the patents when we constructed the rigs. The patents are now expired in the United States and most other countries. While there is inherent risk in litigation, we do

22
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

not believe that our rigs infringe the Transocean patents or that there has been any breach of the 2007 agreement. The litigation continues, and the court has set a trial date in November 2019. We continue to defend ourselves vigorously against this claim.
Brazil commercial agent
We previously used a commercial agent in Brazil in connection with our Petróleo Brasileiro S.A. (“Petrobras”) drilling contracts. This agent represented a number of different companies in Brazil over many years, including several offshore drilling contractors. In November 2015, this agent pled guilty in Brazil in connection with the award of a drilling contract to a competitor and implicated a Petrobras official as part of a wider investigation of Petrobras’ business practices. Following news reports relating to the agent’s involvement in the Brazil investigation in connection with his activities with other companies, we conducted a review, which was substantially completed in 2017, of our relationship with the agent and with Petrobras. We have been in contact and cooperated with the SEC, the Brazilian federal prosecutor’s office and the U.S. Department of Justice (“DOJ”) about this matter and in December 2018, the SEC and the DOJ each advised us that they had closed their file on this matter. We have remained in contact with the Brazilian federal prosecutor’s office, who is aware of our internal review, and continue to cooperate with any questions or requests they may have. To our knowledge, neither the agent, nor the government authorities investigating the matter, has alleged that the agent or Noble acted improperly in connection with our contracts with Petrobras.
Paragon Offshore
On August 1, 2014, Noble-UK completed the separation and spin-off of a majority of its standard specification offshore drilling business (the “Spin-off”) through a pro rata distribution of all of the ordinary shares of its wholly-owned subsidiary, Paragon Offshore plc (“Paragon Offshore”), to the holders of Noble’s ordinary shares. In February 2016, Paragon Offshore sought approval of a pre-negotiated plan of reorganization (the “Prior Plan”) by filing for voluntary relief under Chapter 11 of the United States Bankruptcy Code. As part of the Prior Plan, we entered into a settlement agreement with Paragon Offshore (the “Settlement Agreement”). The Prior Plan was rejected by the bankruptcy court in October 2016.
In April 2017, Paragon Offshore filed a revised plan of reorganization (the “New Plan”) in its bankruptcy proceeding. Under the New Plan, Paragon Offshore no longer needed the Mexican tax bonding that Noble-UK was to provide under the Settlement Agreement. Consequently, Paragon Offshore abandoned the Settlement Agreement as part of the New Plan, and the Settlement Agreement was terminated at the time of the filing of the New Plan. On May 2, 2017, Paragon Offshore announced that it had reached an agreement in principle with both its secured and unsecured creditors to revise the New Plan to, among other things, create and fund a $10.0 million litigation trust to pursue litigation against us. On June 7, 2017, the revised New Plan was approved by the bankruptcy court, and Paragon Offshore emerged from bankruptcy on July 18, 2017.
On December 15, 2017, the litigation trust filed claims relating to the Spin-off against us and certain of our current and former officers and directors in the Delaware bankruptcy court that heard Paragon Offshore’s bankruptcy. The complaint alleges claims of alleged actual and constructive fraudulent conveyance, unjust enrichment and recharacterization of intercompany notes as equity claims against Noble and claims of breach of fiduciary duty and aiding and abetting breach of fiduciary duty against the officer and director defendants. The complaint states that the litigation trust is seeking damages of approximately $1.7 billion from the Company, an amount equal to the amount borrowed by Paragon Offshore immediately prior to the Spin-off, as well as unspecified amounts in respect of the claims against the officer and director defendants all of whom have indemnification arrangements with us. Discovery continues and the court has approved a litigation schedule, which could result in all pre-trial activity being completed during the second quarter of 2020. A trial date has not yet been set.
We believe that Paragon Offshore, at the time of the Spin-off, was properly funded, solvent and had appropriate liquidity and that the claims brought by the litigation trust are without merit. We intend to defend ourselves vigorously. However, there is inherent risk and substantial expense in litigation, and the amount of damages the plaintiff is seeking is substantial. If any of the litigation trust’s claims are successful, or if we elect to settle any claims (in part to reduce or eliminate the ongoing cost of defending the litigation and eliminate any risk of a larger judgment against us), any damages or other amounts we would be required to or agree to pay could be substantial and could have a material adverse effect on our business, financial condition and results of operations. Because of our view of the merits of the claims and the significant discovery still to be conducted in the litigation, we are not currently able to make a reasonable estimation of the amount of possible loss we may incur, if any. Subsequent developments in the litigation may make such an estimation possible, in which case we may record a charge against our income when a loss is reasonably estimable. This may occur even though the litigation may still be ongoing. Any charge could be material and could have a material adverse effect on our financial condition and results of operations. It may also be materially different than any amount we are required to pay once the litigation is concluded.
We have directors’ and officers’ indemnification coverage for the officers and directors who have been sued by the litigation trust. The insurers have accepted coverage for the director and officer claims and we are continuing to discuss with them the scope of their reimbursement of litigation expenses. In addition, at the time of the Spin-off, we had entity coverage, or “Side C” coverage, which was meant to cover certain litigation claims up to the coverage limit of $150.0 million , including litigation expenses. We have made a claim for coverage of the litigation

23
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

trust’s claims against Noble under such entity insurance. The insurers have rejected coverage for these claims. We cannot predict the amount of claims and expenses we may incur, pay or settle in the Paragon Offshore litigation that such insurance will cover, if any.
Prior to the completion of the Spin-off, Noble-UK and Paragon Offshore entered into a series of agreements to effect the separation and Spin-off and govern the relationship between the parties after the Spin-off (the “Separation Agreements”), including the MSA and a Tax Sharing Agreement (the “TSA”).
As part of its final bankruptcy plan, Paragon Offshore rejected the Separation Agreements. Accordingly, the indemnity obligations that Paragon Offshore potentially would have owed us under the Separation Agreements have now terminated, including indemnities arising under the MSA and the TSA in respect of obligations related to Paragon Offshore’s business that were incurred through Noble-retained entities prior to the Spin-off. Likewise, any potential indemnity obligations that we would have owed Paragon Offshore under the Separation Agreements, including those under the MSA and the TSA in respect of Noble-UK’s business that was conducted prior to the Spin-off through Paragon Offshore-retained entities, are now also extinguished. In the absence of the Separation Agreements, liabilities relating to the respective parties will be borne by the owner of the legal entity or asset at issue and neither party will look to an allocation based on the historic relationship of an entity or asset to one of the party’s business, as had been the case under the Separation Agreements.
The rejection and ultimate termination of the indemnity and related obligations under the Separation Agreements resulted in a number of accounting charges and benefits during the year ended December 31, 2017, and such termination may continue to affect us in the future as liabilities arise for which we would have been indemnified by Paragon Offshore or would have had to indemnify Paragon Offshore. We do not expect that, overall, the rejection of the Separation Agreements by Paragon Offshore will have a material adverse effect on our financial condition or liquidity. However, any loss we experience with respect to which we would have been able to secure indemnification from Paragon Offshore under one or more of the Separation Agreements could have an adverse impact on our results of operations in any period, which impact may be material depending on our results of operations during this down-cycle.
During the three months ended March 31, 2019 , we recognized charges of $3.8 million recorded in “Net loss from discontinued operations, net of tax” on our Condensed Consolidated Statement of Operations relating to settlement of Mexico customs audits from rigs included in the Spin-off.
Tax matters
During 2014 , the Internal Revenue Service (“IRS”) began its examination of our tax reporting in the U.S. for the taxable years ended December 31, 2010 and 2011 . The IRS examination team has completed its examination of our 2010 and 2011 U.S. tax returns and proposed adjustments and deficiencies with respect to certain items that were reported by us for the 2010 and 2011 tax year. On December 19, 2016, we received the Revenue Agent Report from the IRS. We believe that we have accurately reported all amounts in our tax returns, and have submitted administrative protests with the IRS Office of Appeals contesting the examination team’s proposed adjustments. We intend to vigorously defend our reported positions, and believe the ultimate resolution of the adjustments proposed by the IRS examination team will not have a material adverse effect on our condensed consolidated financial statements. During the third quarter of 2017, the IRS initiated its examination of our 2012 , 2013 , 2014 and 2015 tax returns.
Audit claims of approximately $51.9 million attributable to income and other business taxes have been assessed against Noble entities in Mexico related to tax years 2005 and 2007. 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. We cannot predict or provide assurance as to the ultimate outcome of any existing or future assessments.
Other contingencies
We have entered into agreements with certain of our executive officers, as well as certain other employees. These agreements become effective upon a change of control of Noble-UK (within the meaning set forth in the agreements) or a termination of employment in connection with or in anticipation of a change of control, and remain effective for three years thereafter. These agreements provide for compensation and certain other benefits under such circumstances.
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.

24
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

Note 14— Supplemental Financial Information
Condensed Consolidated Balance Sheets Information
Our restricted cash balance as of March 31, 2019 and December 31, 2018 consisted of $1.3 million and $0.7 million , respectively, and is included 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-UK
 
Noble-Cayman
 
 
Three Months Ended March 31,
 
Three Months Ended March 31,
 
 
2019
 
2018
 
2019
 
2018
Accounts receivable
 
$
(11,007
)
 
$
22,892

 
$
(11,007
)
 
$
22,892

Other current assets
 
17,097

 
9,986

 
16,803

 
9,699

Other assets
 
3,700

 
(11,668
)
 
4,506

 
(10,552
)
Accounts payable
 
(1,867
)
 
6,175

 
(1,676
)
 
6,175

Other current liabilities
 
(59,685
)
 
(58,860
)
 
(59,544
)
 
(58,780
)
Other liabilities
 
(6,455
)
 
2,697

 
(6,455
)
 
2,697

Total net change in assets and liabilities
 
$
(58,217
)
 
$
(28,778
)
 
$
(57,373
)
 
$
(27,869
)
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 March 31, 2019 and December 31, 2018 were $38.5 million and $52.1 million , respectively.
Additions to property and equipment, at cost for which we had accrued a corresponding liability in accounts payable as of March 31, 2018 and December 31, 2017 were $29.6 million and $25.5 million , respectively.
In February 2019, we entered into the $53.6 million 2019 Seller Loan to finance a portion of the purchase price for the Noble Joe Knight. See “ Note 6— Debt ” for additional information.


25
NOBLE CORPORATION PLC AND SUBSIDIARIES
NOBLE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar amounts in tables are in thousands, except per share data)

Note 15— Condensed Consolidating Financial Information
Guarantees of Registered Securities
Noble-Cayman, or one or more 100 percent owned subsidiaries of Noble-Cayman, is an issuer, co-issuer or full and unconditional guarantor or otherwise obligated as of March 31, 2019 with respect to registered securities as follows (see “ Note 6— Debt ” for additional information):
 
 
Issuer
 
 
Notes (1)
 
(Co-Issuer(s))
 
Guarantor
4.90% Senior Notes due 2020
 
NHIL
 
Noble-Cayman
4.625% Senior Notes due 2021
 
NHIL
 
Noble-Cayman
3.95% Senior Notes due 2022
 
NHIL
 
Noble-Cayman
7.75% Senior Notes due 2024
 
NHIL
 
Noble-Cayman
7.95% Senior Notes due 2025
 
NHIL
 
Noble-Cayman
6.20% Senior Notes due 2040
 
NHIL
 
Noble-Cayman
6.05% Senior Notes due 2041
 
NHIL
 
Noble-Cayman
5.25% Senior Notes due 2042
 
NHIL
 
Noble-Cayman
8.95% Senior Notes due 2045
 
NHIL
 
Noble-Cayman
(1) Our 2026 Notes are excluded from this list as they are unregistered securities issued in a non-public offering.  
The following condensed consolidating financial statements of Noble-Cayman, NHIL and all other subsidiaries present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.






























26

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
March 31, 2019
(in thousands)
(Unaudited)
 
 
Noble -
Cayman
 
NHIL
 
Other
Non-guarantor
Subsidiaries
of Noble
 
Consolidating
Adjustments
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
1

 
$
—

 
$
187,014

 
$
—

 
$
187,015

Accounts receivable
 
—

 
—

 
211,729

 
—

 
211,729

Taxes receivable
 
—

 
—

 
16,303

 
—

 
16,303

Accounts receivable from affiliates
 
743,538

 
61,045

 
5,113,199

 
(5,917,782
)
 
—

Prepaid expenses and other current assets
 
468

 
—

 
45,133

 
—

 
45,601

Total current assets
 
744,007

 
61,045

 
5,573,378

 
(5,917,782
)
 
460,648

Property and equipment, at cost
 
—

 
—

 
11,017,281

 
—

 
11,017,281

Accumulated depreciation
 
—

 
—

 
(2,510,699
)
 
—

 
(2,510,699
)
Property and equipment, net
 
—

 
—

 
8,506,582

 
—

 
8,506,582

Notes receivable from affiliates
 
5,145

 
—

 
43,000

 
(48,145
)
 
—

Investments in affiliates
 
7,656,540

 
8,787,194

 
—

 
(16,443,734
)
 
—

Other assets
 
—

 
—

 
148,622

 
—

 
148,622

Total assets
 
$
8,405,692

 
$
8,848,239

 
$
14,271,582

 
$
(22,409,661
)
 
$
9,115,852

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
 
Current maturities of long-term debt
 
300,000

 
—

 
—

 
—

 
300,000

Accounts payable
 
39

 
63

 
110,813

 
—

 
110,915

Accrued payroll and related costs
 
—

 
—

 
34,867

 
—

 
34,867

Accounts payable to affiliates
 
3,901,507

 
1,211,694

 
804,581

 
(5,917,782
)
 
—

Taxes payable
 
—

 
—

 
26,482

 
—

 
26,482

Interest payable
 
1,044

 
60,170

 
2,987

 
—

 
64,201

Other current liabilities
 
—

 
—

 
59,038

 
—

 
59,038

Total current liabilities
 
4,202,590

 
1,271,927

 
1,038,768

 
(5,917,782
)
 
595,503

Long-term debt
 
—

 
3,386,083

 
164,708

 
—

 
3,550,791

Notes payable to affiliates
 
—

 
43,000

 
5,145

 
(48,145
)
 
—

Deferred income taxes
 
—

 
—

 
81,009

 
—

 
81,009

Other liabilities
 
19,929

 
—

 
285,145

 
—

 
305,074

Total liabilities
 
4,222,519

 
4,701,010

 
1,574,775

 
(5,965,927
)
 
4,532,377

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
Shareholders’ equity
 
4,183,173

 
4,147,229

 
12,296,505

 
(16,443,734
)
 
4,183,173

Noncontrolling interests
 
—

 
—

 
400,302

 
—

 
400,302

Total equity
 
4,183,173

 
4,147,229

 
12,696,807

 
(16,443,734
)
 
4,583,475

Total liabilities and equity
 
$
8,405,692

 
$
8,848,239

 
$
14,271,582

 
$
(22,409,661
)
 
$
9,115,852


27

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2018
(in thousands)
(Unaudited)  
 
 
Noble-
Cayman
 
NHIL
 
Other
Non-guarantor
Subsidiaries
of Noble
 
Consolidating
Adjustments
 
Total
ASSETS
 
 

 
 

 
 

 
 

 
 

Current assets
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
—

 
$
17,818

 
$
356,557

 
$
—

 
$
374,375

Accounts receivable
 
—

 
—

 
200,722

 
—

 
200,722

Taxes receivable
 
—

 
—

 
20,498

 
—

 
20,498

Short-term notes receivable from affiliates
 
—

 
—

 
3,175,662

 
(3,175,662
)
 
—

Accounts receivable from affiliates
 
275,726

 
61,046

 
4,823,902

 
(5,160,674
)
 
—

Prepaid expenses and other current assets
 
—

 
—

 
61,917

 
—

 
61,917

Total current assets
 
275,726

 
78,864

 
8,639,258

 
(8,336,336
)
 
657,512

Property and equipment, at cost
 
—

 
—

 
10,956,412

 
—

 
10,956,412

Accumulated depreciation
 
—

 
—

 
(2,475,694
)
 
—

 
(2,475,694
)
Property and equipment, net
 
—

 
—

 
8,480,718

 
—

 
8,480,718

Notes receivable from affiliates
 
5,145

 
—

 
—

 
(5,145
)
 
—

Investments in affiliates
 
7,716,068

 
12,300,840

 
—

 
(20,016,908
)
 
—

Other assets
 
609

 
—

 
124,540

 
—

 
125,149

Total assets
 
$
7,997,548

 
$
12,379,704

 
$
17,244,516

 
$
(28,358,389
)
 
$
9,263,379

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities
 
 

 
 

 
 

 
 

 
 

Short-term notes payables to affiliates
 
$
—

 
$
3,175,662

 
$
—

 
$
(3,175,662
)
 
$
—

Accounts payable
 
45

 
—

 
125,192

 
—

 
125,237

Accrued payroll and related costs
 
—

 
—

 
50,284

 
—

 
50,284

Accounts payable to affiliates
 
3,725,506

 
1,098,395

 
336,773

 
(5,160,674
)
 
—

Taxes payable
 
—

 
—

 
29,386

 
—

 
29,386

Interest payable
 
3

 
99,997

 
100

 
—

 
100,100

Other current liabilities
 
—

 
—

 
60,012

 
—

 
60,012

Total current liabilities
 
3,725,554

 
4,374,054

 
601,747

 
(8,336,336
)
 
365,019

Long-term debt
 
—

 
3,817,153

 
60,249

 
—

 
3,877,402

Notes payable to affiliates
 
—

 
—

 
5,145

 
(5,145
)
 
—

Deferred income taxes
 
—

 
—

 
91,695

 
—

 
91,695

Other liabilities
 
19,929

 
—

 
255,866

 
—

 
275,795

Total liabilities
 
3,745,483

 
8,191,207

 
1,014,702

 
(8,341,481
)
 
4,609,911

Commitments and contingencies
 


 


 


 


 


Shareholders’ equity
 
4,252,065

 
4,188,497

 
15,828,411

 
(20,016,908
)
 
4,252,065

Noncontrolling interests
 
—

 
—

 
401,403

 
—

 
401,403

Total equity
 
4,252,065

 
4,188,497

 
16,229,814

 
(20,016,908
)
 
4,653,468

Total liabilities and equity
 
$
7,997,548

 
$
12,379,704

 
$
17,244,516

 
$
(28,358,389
)
 
$
9,263,379





28

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS and COMPREHENSIVE INCOME (LOSS)
Three Months Ended March 31, 2019
(in thousands)
(Unaudited)
 
 
Noble-
Cayman
 
NHIL
 
Other
Non-guarantor
Subsidiaries
of Noble
 
Consolidating
Adjustments
 
Total
Operating revenues
 
 
 
 
 
 
 
 
 
 
Contract drilling services
 
$
—

 
$
—

 
$
270,501

 
$
—

 
$
270,501

Reimbursables and other
 
—

 
—

 
12,387

 
—

 
12,387

Total operating revenues
 
—

 
—

 
282,888

 
—

 
282,888

Operating costs and expenses
 
 
 
 
 
 
 
 
 
 
Contract drilling services
 
35

 
—

 
170,827

 
—

 
170,862

Reimbursables
 
—

 
—

 
9,395

 
—

 
9,395

Depreciation and amortization
 
—

 
—

 
108,772

 
—

 
108,772

General and administrative
 
—

 
3

 
7,592

 
—

 
7,595

Total operating costs and expenses
 
35

 
3

 
296,586

 
—

 
296,624

Operating loss
 
(35
)
 
(3
)
 
(13,698
)
 
—

 
(13,736
)
Other income (expense)
 
 
 
 
 
 
 
 
 
 
Income (loss) of unconsolidated affiliates
 
(55,708
)
 
2,184

 
—

 
53,524

 
—

Income (loss) of unconsolidated affiliates - discontinued operations, net of tax
 
(3,821
)
 
(3,821
)
 
—

 
7,642

 
—

Interest expense, net of amounts capitalized
 
(1,318
)
 
(71,577
)
 
(2,228
)
 
4,879

 
(70,244
)
Gain on extinguishment of debt, net
 
—

 
31,266

 
—

 
—

 
31,266

Interest income and other, net
 
69

 
(7
)
 
7,323

 
(4,879
)
 
2,506

Income (loss) before income taxes
 
(60,813
)
 
(41,958
)
 
(8,603
)
 
61,166

 
(50,208
)
Income tax benefit
 
—

 
—

 
(2,865
)
 
—

 
(2,865
)
Net income (loss) from continuing operations
 
(60,813
)
 
(41,958
)
 
(11,468
)
 
61,166

 
(53,073
)
Net income (loss) from discontinued operations
 
—

 
—

 
(3,821
)
 
—

 
(3,821
)
Net income (loss)
 
(60,813
)
 
(41,958
)
 
(15,289
)
 
61,166

 
(56,894
)
Net (income) loss attributable to noncontrolling interests
 
—

 
—

 
(3,919
)
 
—

 
(3,919
)
Net income (loss) attributable to Noble Corporation
 
(60,813
)
 
(41,958
)
 
(19,208
)
 
61,166

 
(60,813
)
Other comprehensive income (loss), net
 
1,058

 
—

 
1,058

 
(1,058
)
 
1,058

Comprehensive income (loss) attributable to Noble Corporation
 
$
(59,755
)
 
$
(41,958
)
 
$
(18,150
)
 
$
60,108

 
$
(59,755
)

29

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS and COMPREHENSIVE INCOME (LOSS)
Three Months Ended March 31, 2018
(in thousands)
(Unaudited)
 
 
Noble-
Cayman
 
NHIL
 
Other
Non-guarantor
Subsidiaries
of Noble
 
Consolidating
Adjustments
 
Total
Operating revenues
 
 
 
 
 
 
 
 
 

Contract drilling services
 
$
—

 
$
—

 
$
229,106

 
$
—

 
$
229,106

Reimbursables and other
 
—

 
—

 
6,050

 
—

 
6,050

Total operating revenues
 
—

 
—

 
235,156

 
—

 
235,156

Operating costs and expenses
 
 
 
 
 
 
 
 
 
 
Contract drilling services
 
81

 
604

 
135,721

 
—

 
136,406

Reimbursables
 
—

 
—

 
4,350

 
—

 
4,350

Depreciation and amortization
 
—

 
—

 
127,639

 
—

 
127,639

General and administrative
 
33

 
618

 
12,806

 
—

 
13,457

Total operating costs and expenses
 
114

 
1,222

 
280,516

 
—

 
281,852

Operating loss
 
(114
)
 
(1,222
)
 
(45,360
)
 
—

 
(46,696
)
Other income (expense)
 
 
 
 
 
 
 
 
 
 
Income (loss) of unconsolidated affiliates
 
(130,816
)
 
12,518

 
—

 
118,298

 
—

Interest expense, net of amounts capitalized
 
(445
)
 
(119,821
)
 
—

 
44,251

 
(76,015
)
Gain (loss) on extinguishment of debt, net
 
(2,336
)
 
5,419

 
(11,851
)
 
—

 
(8,768
)
Interest income and other, net
 
1,568

 
(129
)
 
44,158

 
(44,251
)
 
1,346

Income (loss) before income taxes
 
(132,143
)
 
(103,235
)
 
(13,053
)
 
118,298

 
(130,133
)
Income tax benefit
 
—

 
—

 
(2,996
)
 
—

 
(2,996
)
Net income (loss)
 
(132,143
)
 
(103,235
)
 
(16,049
)
 
118,298

 
(133,129
)
Net (income) loss attributable to noncontrolling interests
 
—

 
—

 
986

 
—

 
986

Net income (loss) attributable to Noble Corporation
 
(132,143
)
 
(103,235
)
 
(15,063
)
 
118,298

 
(132,143
)
Other comprehensive income (loss), net
 
991

 
—

 
991

 
(991
)
 
991

Comprehensive income (loss) attributable to Noble Corporation
 
$
(131,152
)
 
$
(103,235
)
 
$
(14,072
)
 
$
117,307

 
$
(131,152
)

















30

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Three Months Ended March 31, 2019
(in thousands)
(Unaudited)
 
 
Noble-
Cayman
 
NHIL
 
Other
Non-guarantor
Subsidiaries
of Noble
 
Consolidating
Adjustments
 
Total
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
 
$
2,973

 
$
(110,170
)
 
$
76,515

 
$
—

 
$
(30,682
)
Cash flows from investing activities
 
 

 
 

 
 

 
 

 
 

Capital expenditures
 
—

 
—

 
(96,793
)
 
—

 
(96,793
)
Proceeds from disposal of assets
 
—

 
—

 
7,930

 
—

 
7,930

Notes receivable from affiliates
 
 
 
 
 
(43,000
)
 
43,000

 
—

Net cash provided by (used in) investing activities
 
—

 
—

 
(131,863
)
 
43,000

 
(88,863
)
Cash flows from financing activities
 
 

 
 

 
 

 
 

 
 

Borrowings on credit facilities
 
300,000

 
—

 
50,000

 
—

 
350,000

Repayment of long-term debt
 
—

 
(400,000
)
 
—

 
—

 
(400,000
)
Debt issuance costs
 
—

 
—

 
(90
)
 
—

 
(90
)
Dividends paid to noncontrolling interests
 
—

 
—

 
(5,020
)
 
—

 
(5,020
)
Distributions to parent company, net
 
(12,077
)
 
—

 
—

 
—

 
(12,077
)
Advances (to) from affiliates
 
(290,895
)
 
449,352

 
(158,457
)
 
—

 
—

Notes payable to affiliates
 
—

 
43,000

 
—

 
(43,000
)
 
—

Net cash provided by (used in) financing activities
 
(2,972
)
 
92,352

 
(113,567
)
 
(43,000
)
 
(67,187
)
Net change in cash, cash equivalents and restricted cash
 
1

 
(17,818
)
 
(168,915
)
 
—

 
(186,732
)
Cash, cash equivalents and restricted cash, beginning of period
 
—

 
17,818

 
357,232

 
—

 
375,050

Cash, cash equivalents and restricted cash, end of period
 
$
1

 
$
—

 
$
188,317

 
$
—

 
$
188,318


31

NOBLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Three Months Ended March 31, 2018
(in thousands)
(Unaudited)
 
 
Noble-
Cayman
 
NHIL
 
Other
Non-guarantor
Subsidiaries
of Noble
 
Consolidating
Adjustments
 
Total
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
 
$
7,313

 
$
(135,393
)
 
$
192,977

 
$
—

 
$
64,897

Cash flows from investing activities
 
 

 
 

 
 

 
 

 
 

Capital expenditures
 
—

 
—

 
(33,816
)
 
—

 
(33,816
)
Proceeds from disposal of assets
 
—

 
—

 
117

 
—

 
117

Net cash used in investing activities
 
—

 
—

 
(33,699
)
 
—

 
(33,699
)
Cash flows from financing activities
 
 

 
 

 
 

 
 

 
 

Repayment of long-term debt
 
—

 
(738,555
)
 
(213,654
)
 
—

 
(952,209
)
Issuance of senior notes
 
—

 
750,000

 
—

 
—

 
750,000

Debt issuance costs
 
(217
)
 
(12,581
)
 
(1,386
)
 
—

 
(14,184
)
Dividends paid to noncontrolling interests
 
—

 
—

 
(2,667
)
 
—

 
(2,667
)
Distribution to parent company, net
 
(13,318
)
 
—

 
—

 
—

 
(13,318
)
Advances (to) from affiliates
 
6,221

 
147,567

 
(153,788
)
 
—

 
—

Net cash provided by (used in) financing activities
 
(7,314
)
 
146,431

 
(371,495
)
 
—

 
(232,378
)
Net change in cash, cash equivalents and restricted cash
 
(1
)
 
11,038

 
(212,217
)
 
—

 
(201,180
)
Cash, cash equivalents and restricted cash, beginning of period
 
11

 
29,324

 
632,676

 
—

 
662,011

Cash, cash equivalents and restricted cash, end of period
 
$
10

 
$
40,362

 
$
420,459

 
$
—

 
$
460,831


32


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, 2019 , and our results of operations for the three months ended March 31, 2019 and 2018 . 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, 2018 filed by Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble-UK”), and Noble Corporation, a Cayman Islands company (“Noble-Cayman”).
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this report or in the documents incorporated by reference, including those regarding rig demand, the offshore drilling market, oil prices, contract backlog, fleet status, our future financial position, business strategy, impairments, repayment of debt, credit ratings, borrowings under our Credit Facilities (as defined herein) 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 or results of acquisitions or dispositions, 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,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should” and similar expressions are intended to be among the statements that identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to be correct. These forward-looking statements speak only as of the date of this report on Form 10-Q and we undertake no obligation to revise or update any forward-looking statement for any reason, except as required by law. We have identified factors including but not limited to 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 U.S., actions by regulatory authorities, credit rating agencies, customers, joint venture partners, contractors, lenders and other third parties, legislation and regulations affecting drilling operations, compliance with 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, 2018 , our Quarterly Reports on Form 10-Q and in our other filings with the U.S. Securities and Exchange Commission (“SEC”). We cannot control such risk factors and other uncertainties, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. You should consider these risks and uncertainties when you are evaluating us.
Executive Overview
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, our fleet of 25 drilling rigs consisted of 12 floaters (consisting of four semisubmersibles and eight drillships) and 13 jackups strategically deployed worldwide in both established and emerging ultra-deepwater and shallow water locations. We typically employ each drilling unit under an individual contract. Although the final terms of the contracts result from negotiations with our customers, 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.
Outlook
During early 2019, average crude oil prices have continued to increase from the price drop that began in early October 2018. At April 29, 2019, the closing price for a barrel of Brent crude oil was $71.22, which approximated the average closing price for 2018 and exceeded the average closing price from 2017 by nearly $17 per barrel. This has led to a slight improvement in customer activity, most notably across the jackup fleet. However, the challenging business environment for offshore drillers continued to persist due to an industry-wide rig supply imbalance that resulted from a multi-year period of investment in new offshore drilling capacity. Following the period of industry expansion, a period of oil price volatility

33


compelled exploration and production companies to deemphasize offshore programs while focusing instead on land-based opportunities. A portion of the newbuild capacity ordered prior to the decline in industry activity continues to exit shipyards, while the delivery of other newbuild rigs has been delayed into the future. In either case, these rigs have added to the prevailing supply imbalance. Since 2015 , the industry has experienced a higher level of fleet attrition, as rigs are removed from the global supply due to a number of factors, including advanced service life, high maintenance and reactivation costs and limited customer appeal, but the pace of attrition is significantly less than what would be required to remedy the capacity imbalance. Additionally, our customers have adopted a cautious approach to offshore spending due, in part, to volatility in crude oil prices over the past four years . We expect that the offshore drilling programs of operators will remain somewhat curtailed, as our customers continue to favor cash flow realization over long cycle investment in offshore production and exploration. During 2018 and in the first quarter of 2019, we recognized improvement in leading edge dayrates in the high specification jackup sector, especially in regions such as the North Sea and Middle East where approximately 80 percent of our fleet is located. We remain cautiously optimistic that this trend will continue throughout 2019 . However, the floating sector has not enjoyed the same pricing improvement as the jackup sector. While market improvement during the first quarter of 2019 gives cause for some optimism, additional customer activity will be required before floating sector dayrates move significantly higher.
In spite of the gradual improvement in offshore activities in 2018 and early 2019, we expect the business environment for the remainder of 2019 to remain challenging. The uncertainty of the viability and length of reductions in production agreed to by the Organization of Petroleum Exporting Countries (“OPEC”), the incremental production capacity in non-OPEC countries, including growing production from U.S. shale activity, the current U.S. political environment and fluid sentiment in oil markets are contributing to an uncertain oil price environment, leading to considerable uncertainty in our customers’ production spending plans. However, steady oil demand growth, the lack of production investments in various countries and the production limits agreed to by OPEC and other significant oil producing countries should support higher sustained crude prices, and lead to improved offshore spending by our customers over time. In general, recent contract awards have been subject to an extremely competitive bidding process. As a result, the contracts have been for dayrates and contract terms that are substantially lower than rates and terms were for the same class of rigs before this period of imbalance.
We cannot give any assurances as to when conditions in the offshore drilling market will improve, or when the oversupply of available drilling rigs will come back into balance.
Due to numerous factors that influence our customers' annual global offshore spending patterns, including geopolitical events, we cannot predict the future level of demand or dayrates for our services, or future conditions in the offshore contract drilling industry. However, we believe the existence of certain factors should over time contribute to an improvement in the market for our services, driven in part by an acceleration in customers’ offshore spending. These factors include:
•
sustained crude oil prices;
•
improved geologic success with regard to our customers’ exploration efforts;
•
greater customer access to areas with promising offshore resource potential;
•
advances in offshore technological applications which reduce offshore costs and improve project economics;
•
high rate of natural depletion relating to land-based sources of crude oil production;
•
deteriorating annual production and poor reserve replacement metrics caused, in part, by a period of sustained under-investment by our customers; and
•
declining supply of rigs due to continued attrition.
We believe that we are strategically well positioned during this period of fundamental weakness for several reasons, including our substantial backlog, modern fleet of high-specification rigs and strong operational capability. We also believe that these strengths will help us take advantage of any future market upcycle.
Results and Strategy
Our business strategy focuses on a balanced, high-specification fleet of both floating and jackup rigs and the deployment of our drilling rigs in oil and gas basins around the world. We emphasize safe operations through the employment of quality, well-trained crews and strive to manage rig operating costs through the practice of innovative systems and processes, including 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. Our fleet consists predominately of technologically advanced units, equipped with sophisticated systems and components capable of executing our customers’ increasingly complicated offshore drilling programs safely and with greater efficiency. A total of 16 of our drilling rigs have been delivered since 2011 following their construction in quality shipyards located primarily in Korea and Singapore. We have not engaged in newbuild rig construction since 2016.

34


We have also retired or sold 11 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.
Although we plan to prioritize capital preservation and liquidity based on the challenging market conditions, from time to time we will also continue to evaluate opportunities to enhance our fleet of floating and jackup rigs, particularly focusing on higher specification rigs, to execute the increasingly complex drilling programs required by our customers.
On February 28, 2019 , we purchased another GustoMSC CJ46 rig, the Noble Joe Knight. We paid $83.8 million for the rig, with $30.2 million paid in cash and the remaining $53.6 million of the purchase price financed with a loan by the seller, PaxOcean Group (“PaxOcean”), in which 95% of the principal is due at the end of the four-year term. See “ Note 6— Debt ” to our condensed consolidated financial statements for additional information.
Spin-off of Paragon Offshore plc
On August 1, 2014 , Noble-UK completed the separation and spin-off of a majority of its standard specification offshore drilling business (the “ Spin-off ” ) through a pro rata distribution of all of the ordinary shares of its wholly-owned subsidiary, Paragon Offshore plc ( “ Paragon Offshore ” ), to the holders of Noble’s ordinary shares. In February 2016 , Paragon Offshore sought approval of a pre-negotiated plan of reorganization (the “Prior Plan”) by filing for voluntary relief under Chapter 11 of the United States Bankruptcy Code. As part of the Prior Plan, we entered into a settlement agreement with Paragon Offshore (the “Settlement Agreement”). The Prior Plan was rejected by the bankruptcy court in October 2016.
In April 2017 , Paragon Offshore filed a revised plan of reorganization (the “New Plan”) in its bankruptcy proceeding. Under the New Plan, Paragon Offshore no longer needed the Mexican tax bonding that Noble-UK was to provide under the Settlement Agreement. Consequently, Paragon Offshore abandoned the Settlement Agreement as part of the New Plan, and the Settlement Agreement was terminated at the time of the filing of the New Plan. On May 2, 2017 , Paragon Offshore announced that it had reached an agreement in principle with both its secured and unsecured creditors to revise the New Plan to, among other things, create and fund a $10.0 million litigation trust to pursue litigation against us. On June 7, 2017 , the revised New Plan was approved by the bankruptcy court, and Paragon Offshore emerged from bankruptcy on July 18, 2017 .
On December 15, 2017 , the litigation trust filed claims relating to the Spin-off against us and certain of our current and former officers and directors in the Delaware bankruptcy court that heard Paragon Offshore’s bankruptcy. The complaint alleges claims of alleged actual and constructive fraudulent conveyance, unjust enrichment and recharacterization of intercompany notes as equity claims against Noble and claims of breach of fiduciary duty and aiding and abetting breach of fiduciary duty against the officer and director defendants. The complaint states that the litigation trust is seeking damages of approximately $1.7 billion from the Company, an amount equal to the amount borrowed by Paragon Offshore immediately prior to the Spin-off, as well as unspecified amounts in respect of the claims against the officer and director defendants, all of whom have indemnification arrangements with us. Discovery continues and the court has approved a litigation schedule, which could result in all pre-trial activity being completed during the second quarter of 2020. A trial date has not yet been set.
We believe that Paragon Offshore, at the time of the Spin-off, was properly funded, solvent and had appropriate liquidity and that the claims brought by the litigation trust are without merit. We intend to defend ourselves vigorously. However, there is inherent risk and substantial expense in litigation, and the amount of damages the plaintiff is seeking is substantial. If any of the litigation trust’s claims are successful, or if we elect to settle any claims (in part to reduce or eliminate the ongoing cost of defending the litigation and eliminate any risk of a larger judgment against us), any damages or other amounts we would be required to or agree to pay could be substantial and could have a material adverse effect on our business, financial condition and results of operations. Because of our view of the merits of the claims and the significant discovery still to be conducted in the litigation, we are not currently able to make a reasonable estimation of the amount of possible loss we may incur, if any. Subsequent developments in the litigation may make such an estimation possible, in which case we may record a charge against our income when a loss is reasonably estimable. This may occur even though the litigation may still be ongoing. Any charge could be material and could have a material adverse effect on our financial condition and results of operations. It may also be materially different than any amount we are required to pay once the litigation is concluded.
We have directors’ and officers’ indemnification coverage for the officers and directors who have been sued by the litigation trust. The insurers have accepted coverage for the director and officer claims and we are continuing to discuss with them the scope of their reimbursement of litigation expenses. In addition, at the time of the Spin-off, we had entity coverage, or “Side C” coverage, which was meant to cover certain litigation claims up to the coverage limit of $150.0 million , including litigation expenses. We have made a claim for coverage of the litigation trust’s claims against Noble under such entity insurance. The insurers have rejected coverage for these claims. We cannot predict the amount of claims and expenses we may incur, pay or settle in the Paragon Offshore litigation that such insurance will cover, if any.

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Prior to the completion of the Spin-off, Noble-UK and Paragon Offshore entered into a series of agreements to effect the separation and Spin-off and govern the relationship between the parties after the Spin-off (the “ Separation Agreements ” ), including the MSA and a Tax Sharing Agreement (the “ TSA ” ).
As part of its final bankruptcy plan, Paragon Offshore rejected the Separation Agreements. Accordingly, the indemnity obligations that Paragon Offshore potentially would have owed us under the Separation Agreements have now terminated, including indemnities arising under the MSA and the TSA in respect of obligations related to Paragon Offshore’s business that were incurred through Noble-retained entities prior to the Spin-off. Likewise, any potential indemnity obligations that we would have owed Paragon Offshore under the Separation Agreements, including those under the MSA and the TSA in respect of Noble-UK’s business that was conducted prior to the Spin-off through Paragon Offshore-retained entities, are now also extinguished. In the absence of the Separation Agreements, liabilities relating to the respective parties will be borne by the owner of the legal entity or asset at issue and neither party will look to an allocation based on the historic relationship of an entity or asset to one of the party’s business, as had been the case under the Separation Agreements.
The rejection and ultimate termination of the indemnity and related obligations under the Separation Agreements resulted in a number of accounting charges and benefits during the year ended December 31, 2017 , and such termination may continue to affect us in the future as liabilities arise for which we would have been indemnified by Paragon Offshore or would have had to indemnify Paragon Offshore. We do not expect that, overall, the rejection of the Separation Agreements by Paragon Offshore will have a material adverse effect on our financial condition or liquidity. However, any loss we experience with respect to which we would have been able to secure indemnification from Paragon Offshore under one or more of the Separation Agreements could have an adverse impact on our results of operations in any period, which impact may be material depending on our results of operations during this down-cycle.
During the three months ended March 31, 2019 , we recognized charges of $3.8 million recorded in “Net loss from discontinued operations, net of tax” on our Condensed Consolidated Statement of Operations relating to settlement of Mexico customs audits from rigs included in the Spin-off.
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, 2019 , 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 rig and period by multiplying the full contractual operating dayrate for such rig by the number of days remaining in the period, and for the three rigs contracted with Royal Dutch Shell plc (“Shell”) mentioned below, we utilize the idle period and floor rates as described in footnote (2) 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.

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The table below presents the amount of our contract drilling services backlog and the percent of available operating days committed for the periods indicated:
 
 
 
 
Year Ending December 31,
 
 
Total
 
2019 (1)
 
2020
 
2021
 
2022
 
2023
 
 
(In thousands)
Contract Drilling Services Backlog
 
 
 
 
 
 
 
 
 
 
 
 
Floaters (2)(3)
 
$
1,373,147

 
$
373,525

 
$
404,767

 
$
338,025

 
$
187,255

 
$
69,575

Jackups
 
899,825

 
352,803

 
313,677

 
166,805

 
66,540

 
—

Total   (4)
 
$
2,272,972

 
$
726,328

 
$
718,444

 
$
504,830

 
$
253,795

 
$
69,575

Percent of Available Days Committed   (5)
 
 
 
 
 
 
 
 
 
 
 
 
Floaters
 
 
 
53
%
 
37
%
 
27
%
 
15
%
 
6
%
Jackups
 
 
 
75
%
 
43
%
 
31
%
 
13
%
 
—
%
Total
 
 
 
64
%
 
40
%
 
29
%
 
14
%
 
3
%
(1)  
Represents a nine-month period beginning April 1, 2019 . The backlog figure and days committed to contracts exclude the contract extension with Talos and the new one-year award with Exxon Mobil (Esso) for the Noble Don Taylor and excludes the contract extensions received for the Noble Joe Beall and Noble Sam Hartley , all of which were secured in April 2019.
(2)  
As previously reported, three of our long-term drilling contracts with Shell, the Noble Bully II , 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. The contract amendments for the Noble Globetrotter I and Noble Globetrotter II provide a dayrate floor of $275,000 per day. The Noble Bully II contract contains a dayrate floor of $200,000 per day plus daily operating expenses. The amendment also provided Shell the right to idle the Noble Bully II for up to one year at a special stacking rate. The Noble Bully II was idled at a rate of $200,000 per day, effective April 3, 2017. In April 2018, we agreed with Shell to extend the idle period for the Noble Bully II through December 31, 2018 at a revised rate of $230,000 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 their respective dayrate floor for the remaining contract term.
(3)  
Noble and a subsidiary of Shell are involved in joint ventures that own and operate both the Noble Bully I and the Noble Bully II . Pursuant to these agreements, each party has an equal 50 percent share in both vessels. As of March 31, 2019 , the backlog for the Noble Bully II totaled $375.0 million , all of which is included in backlog. As of the same date, the Noble Bully I had no backlog. Noble’s proportional interest in the backlog for these rigs totaled $187.5 million .
(4)  
Some of our drilling contracts provide the customers with certain early termination rights and, in limited cases, those termination rights require minimal or no notice and minimal financial penalties.
(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.
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, 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, 2018 .

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As of March 31, 2019 , Shell, Saudi Arabian Oil Company and Equinor ASA represented approximately 50.7 percent , 22.7 percent and 10.0 percent of our backlog, respectively.
Results of Operations
For the Three Months Ended March 31, 2019 and 2018
Net loss from continuing operations attributable to Noble-UK for the three months ended March 31, 2019 was $67.1 million , or $0.27 per diluted share, on operating revenues of $282.9 million , compared to net loss from continuing operations for the three months ended March 31, 2018 of $142.3 million , or $0.58 per diluted share, on operating revenues of $235.2 million .
As a result of Noble-UK conducting all of its business through Noble-Cayman and its subsidiaries, the financial position and results of operations for Noble-Cayman, and the reasons for material changes in the amount of revenue and expense items between March 31, 2019 and March 31, 2018 , would be the same as the information presented below regarding Noble-UK in all material respects, with the exception of operating loss. During the three months ended March 31, 2019 and 2018 , Noble-Cayman's operating losses were $10.1 million and $10.2 million lower, respectively, than that of Noble-UK. The operating loss difference is primarily a result of administration and other costs directly attributable to Noble-UK for operations support and stewardship-related services.
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
 
 
Three Months Ended
March 31,
 
Three Months Ended
March 31,
 
 
 
Three Months Ended
March 31,
 
 
 
 
2019
 
2018
 
2019
 
2018
 
% Change
 
2019
 
2018
 
% Change
Jackups
 
93
%
 
56
%
 
923

 
706

 
31
%
 
$
127,150

 
$
153,662

 
(17
)%
Floaters
 
60
%
 
37
%
 
647

 
465

 
39
%
 
236,715

 
259,326

 
(9
)%
Total
 
76
%
 
47
%
 
1,570

 
1,171

 
34
%
 
$
172,305

 
$
195,633

 
(12
)%
(1)  
We define utilization for a specific period as the total number of days our rigs are operating under contract, divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet, excluding newbuild rigs under construction.
(2)  
Information reflects the number of days that our rigs were operating under contract.

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Contract Drilling Services
The following table presents the operating results for our contract drilling services segment for the periods indicated (dollars in thousands):
 
 
Three Months Ended
March 31,
 
Change
 
 
2019
 
2018
 
$
 
%
Operating revenues:
 
 
 
 
 
 
 
 
Contract drilling services
 
$
270,501

 
$
229,106

 
$
41,395

 
18
 %
Reimbursables and other (1)
 
12,387

 
6,051

 
6,336

 
105
 %
 
 
282,888

 
235,157

 
47,731

 
20
 %
Operating costs and expenses:
 
 
 
 
 
 
 
 
Contract drilling services
 
171,728

 
136,849

 
34,879

 
25
 %
Reimbursables (1)
 
9,395

 
4,350

 
5,045

 
116
 %
Depreciation and amortization
 
106,086

 
123,215

 
(17,129
)
 
(14
)%
General and administrative
 
15,999

 
22,083

 
(6,084
)
 
(28
)%
 
 
303,208

 
286,497

 
16,711

 
6
 %
Operating income (loss)
 
$
(20,320
)
 
$
(51,340
)
 
$
31,020

 
(60
)%
(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. The $41.4 million increase in contract drilling services revenues for the three months ended March 31, 2019 as compared to the same period of 2018 was composed of a $39.4 million increase due to an increased number of operating days and a $2.0 million increase from higher dayrates. The revenue increase was due to a $32.4 million and $9.0 million increase in floater and jackup fleet revenues, respectively.
The $32.4 million revenue increase in our floater fleet for the three months ended March 31, 2019 is attributable to a $28.5 million increase due to an increased number in operating days as two rigs returned to service and to a $3.9 million increase in average dayrates as compared to the same period of 2018 .
The $9.0 million revenue increase in our jackup fleet for the three months ended March 31, 2019 is attributable to a $10.9 million increase due to more operating days, partially offset by a $1.9 million decline in revenues associated with unfavorable dayrate changes as compared to the same period of 2018 .
Operating Costs and Expenses. Contract drilling services costs increased $34.9 million for the three months ended March 31, 2019 as compared to the same period of 2018 . Rigs that returned to service in the current period contributed $32.4 million to the increase in operating costs. Cost increases were seen across all rig related expense categories, including personnel-related expenses and expenses for repairs and maintenance as rigs returned to operations.
Depreciation and amortization decreased $17.1 million for the three months ended March 31, 2019 as compared to the same period of 2018 . The decline was due to the effect of rig impairments during 2018 .
Other Income and Expenses
General and Administrative Expenses. General and administrative expenses decreased $6.1 million during the three months ended March 31, 2019 as compared to the same period of 2018 , primarily as a result of a decrease in employee-related costs and professional fees.
Interest Expense. Interest expense decreased $5.8 million during the three months ended March 31, 2019 as compared to the same period of 2018 . This decrease was primarily due to the retirement of a portion of various tranches of our senior notes as a result of tender offers and open market repurchases throughout 2018 and early 2019. This decrease was offset by the issuance of our Senior Notes due 2026 (the “2026 Notes”) in January 2018 and the borrowing on our Credit Facilities (as defined herein) in early 2019. For additional information, see “ Note 6— Debt ” to our condensed consolidated financial statements.

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Income Tax Provision. Our income tax provision decreased by $0.1 million for the three months ended March 31, 2019 as compared to the same period of 2018 . Included in the income tax provision for both periods was the tax effect from the gain and loss on debt extinguishment of $6.6 million and $1.8 million for the current and prior period, respectively. Excluding these one-time items, the income tax provision decreased by $8.5 million due to a lower pre-tax loss and a higher worldwide effective tax rate in the current period as compared to the same period of 2018. The lower pre-tax loss generated a $1.5 million decrease in the tax provision due to the negative tax rate in the comparable period and the higher worldwide effective tax rate reduced the tax provision by $7.1 million in the current period. The increase in the worldwide effective tax rate is primarily a result of the geographic mix of income and sources of revenue during the current period.
Liquidity and Capital Resources
Overview
Net cash used in operating activities was $40.8 million for the three months ended March 31, 2019 and net cash provided by operating activities was $54.9 million for the three months ended March 31, 2018 . The decrease in net cash provided by operating activities for the three months ended March 31, 2019 was primarily attributable to a reduction in contract drilling services margin in the current period as compared to the same period of 2018, as well as a one-time tax refund of $84.5 million received in the first quarter of 2018. We had negative working capital of $134.5 million at March 31, 2019 and working capital of $293.6 million December 31, 2018 .
Net cash used in investing activities for the three months ended March 31, 2019 was $88.9 million as compared to $33.7 million for the three months ended March 31, 2018 . The variance primarily relates to the purchase of the Noble Joe Knight and the preparation of the Noble Johnny Whitstine to commence operations for its contract in the current period.
Net cash used in financing activities for the three months ended March 31, 2019 was $57.9 million as compared to $222.4 million for the three months ended March 31, 2018 . During the current period, our primary use of cash included retirement of a portion of various tranches of our senior notes as a result of tender offers, offset by borrowings on our Credit Facilities.
In March 2019, we completed cash tender offers for our Senior Notes due 2020 (the “2020 Notes”), Senior Notes due 2021 (the “2021 Notes”), Senior Notes due 2022 (the “2022 Notes”) and Senior Notes due 2024 (the “2024 Notes”). Pursuant to such tender offers, we purchased $440.9 million aggregate principal amount of these senior notes for $400.0 million, plus accrued interest, using borrowings under the 2015 Credit Facility (as defined herein) and cash on hand.
Our primary source of capital in the current period was cash generated from operating activities. Cash on hand during the current period was primarily used for the following:
•
normal recurring operating expenses;
•
retirement of a portion of various tranches of our senior notes in tender offers; and
•
capital expenditures.
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 existing Credit Facilities and potential issuances of equity or long-term debt. However, to adequately cover our expected cash flow needs, we may require capital in excess of the amount available from these sources, and we may seek additional sources of liquidity and/or delay or cancel certain discretionary capital expenditures or other payments as necessary.
At March 31, 2019 , we had a total contract drilling services backlog of approximately $2.3 billion , which includes a commitment of 64 percent of available days for the remainder of 2019 and 40 percent of available days for 2020 . For additional information regarding our backlog, see “Contract Drilling Services Backlog.”
Capital Expenditures
Capital expenditures totaled $136.8 million and $37.9 million for the three months ended March 31, 2019 and 2018 , respectively. Capital expenditures during the first three months of 2019 consisted of the following:
•
$7.6 million for sustaining capital;
•
$41.1 million in major projects, including reactivations and subsea and other related projects;
•
$83.8 million to purchase the Noble Joe Knight (inclusive of cash paid and seller financing); and

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•
$4.3 million in capitalized interest.
Our total capital expenditure estimate for 2019 is approximately $303.9 million .
•
$90.9 million for sustaining capital;
•
$119.9 million in major projects, including reactivations and subsea and other related projects;
•
$83.8 million purchase of the Noble Joe Knight ; and
•
$9.3 million in capitalized interest.
From time to time we consider possible projects that would require expenditures that are not included in our capital budget, and such unbudgeted expenditures could be significant. In addition, we will continue to evaluate acquisitions of drilling units from time to time. Other factors that could cause actual capital expenditures to materially exceed plan include delays and cost overruns in shipyards (including costs attributable to labor shortages), shortages of equipment, latent damage or deterioration to hull, equipment and machinery in excess of engineering estimates and assumptions, changes in governmental regulations and requirements, possible refurbishment and reactivation of rigs and changes in design criteria or specifications during repair or construction.
Share Capital
The declaration and payment of dividends require the authorization of the Board of Directors of Noble-UK, provided that such dividends on issued share capital may be paid only out of Noble-UK’s “distributable reserves” on its statutory balance sheet in accordance with UK law. Therefore, Noble-UK is not permitted to pay dividends out of share capital, which includes share premium. Noble has not paid dividends since the third quarter of 2016. 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 Board of Directors.
At our 2019 Annual General Meeting, shareholders approved a proposal to allow our Board of Directors to increase share capital through the issuance of up to approximately 83.1 million ordinary shares (at current nominal value of $0.01 per share). The right of our directors to allot shares will expire at the end of our 2020 Annual General Meeting unless we seek an extension from shareholders at that time. No shares were allotted during the three months ended March 31, 2019 .
Share Repurchases
Under UK law, the Company is only permitted to purchase its own shares by way of an “off-market purchase” in a plan approved by shareholders. We currently do not have shareholder authority to repurchase shares. During the three months ended March 31, 2019 , we did not repurchase any of our shares.
Credit Facilities
2015 Credit Facility
We have a $300 million senior unsecured credit facility that will mature in January 2020 and is guaranteed by our indirect, wholly-owned subsidiaries, Noble Holding (U.S.) LLC (“NHUS”) and Noble Holding International Limited (“NHIL”) (the “2015 Credit Facility”).
In January 2018, in connection with entering into the 2017 Credit Facility (as defined herein), we amended the 2015 Credit Facility, which caused, among other things, a reduction in the aggregate principal amount of commitments under the 2015 Credit Facility. As a result of the 2015 Credit Facility’s reduction in the aggregate principal amount of commitments, we recognized a net loss of approximately $2.3 million in the three months ended March 31, 2018. Borrowings under the 2015 Credit Facility bear interest at the London inter-bank offered rate (“LIBOR”) plus an applicable margin, which is currently the maximum contractual rate of 1.65% . At March 31, 2019 , we had $300.0 million of borrowings outstanding under the 2015 Credit Facility.
2017 Credit Facility
On December 21, 2017, Noble Cayman Limited, a Cayman Islands company and a wholly-owned indirect subsidiary of Noble-Cayman ; Noble International Finance Company, a Cayman Islands company and a wholly-owned indirect subsidiary of Noble-Cayman ; and Noble Holding UK Limited, a company incorporated under the laws of England and Wales and a wholly-owned direct subsidiary of Noble-UK (“NHUK”), as parent guarantor, entered into a new senior unsecured credit agreement (the “ 2017 Credit Facility” and, together with the 2015 Credit Facility, the “Credit Facilities”). The maximum aggregate amount of commitments under the 2017 Credit Facility is approximately $1.5 billion . Borrowings under the 2017 Credit Facility are subject to certain conditions precedent, including that there be no unused commitments to advance loans under the 2015 Credit Facility. The 2017 Credit Facility will mature in January 2023. Borrowings may be used for working capital and other general corporate purposes. The 2017 Credit Facility provides for a letter of credit sub-facility currently 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. Borrowing under the 2017 Credit Facility bear interest at LIBOR

41


plus an applicable margin, which is currently the maximum contractual rate of 4.25% . At March 31, 2019 , we had $50.0 million of borrowings outstanding under the 2017 Credit Facility, plus $3.4 million of performance letters of credit.
Both of our Credit Facilities have provisions which vary the applicable interest rates for borrowings based upon our debt ratings. We also pay a facility fee under the 2015 Credit Facility on the full commitments thereunder (used or unused) and a commitment fee under the 2017 Credit Facility on the daily unused amount of the underlying commitments, in each case which varies depending on our credit ratings. At March 31, 2019 , the interest rates and fees in effect under our Credit Facilities were the highest permitted interest rates under those agreements.
Debt Issuance
In January 2018, we issued $750.0 million aggregate principal amount of the 2026 Notes through our indirect wholly-owned subsidiary, NHIL. The net proceeds of the offering of approximately $737.4 million , after expenses, were used to retire a portion of our near-term senior notes in a related tender offer.
The indenture for the 2026 Notes contains certain covenants and restrictions, including, among others, restrictions on our subsidiaries’ ability to incur certain additional indebtedness. Additionally, the subsidiary guarantors must own, directly or indirectly, (i) assets comprising at least 85% of the revenue of Noble-Cayman and its subsidiaries on a consolidated basis and (ii) jackups, semisubmersibles, drillships, submersibles or other mobile offshore drilling units of material importance, the combined book value of which comprises at least 85% of the combined book value of all such assets of Noble-Cayman and its subsidiaries on a consolidated basis, in each case, with respect to the most recently completed fiscal year.
Seller Loans
2019 Seller Loan
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”). The 2019 Seller Loan has a term of four years and requires a 5% principal payment at the end of the third year with the remaining 95% of the principal due at the end of the term. The 2019 Seller Loan bears a cash interest rate of 4.25% and the equivalent of a 1.25% interest rate paid-in-kind over the four-year term of the 2019 Seller Loan. Based on the terms of the 2019 Seller Loan, the 1.25% paid-in-kind interest rate is accelerated into the first year, resulting in an overall first year interest rate of 8.91% , of which only 4.25% is payable in cash. Thereafter, the paid-in-kind interest ends and the cash interest rate of 4.25% is payable for the remainder of the term.
2018 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”). The 2018 Seller Loan has a term of four years and requires a 5% principal payment at the end of the third year with the remaining 95% of the principal due at the end of the term. The 2018 Seller Loan bears a cash interest rate of 4.25% and the equivalent of a 1.25% interest rate paid-in-kind over the four -year term of the 2018 Seller Loan. Based on the terms of the 2018 Seller Loan, the 1.25% paid-in-kind interest rate is accelerated into the first year, resulting in an overall first year interest rate of 8.91% , of which only 4.25% is payable in cash. Thereafter, the paid-in-kind interest ends and the cash interest rate of 4.25% is payable for the remainder of the term.
Both of the Seller Loans are guaranteed by Noble-Cayman and each is secured by a mortgage on the applicable rig and by the pledge of the shares of the applicable single-purpose entity that owns the relevant rig. Each Seller Loan contains debt to total capitalization ratio and minimum liquidity financial covenants substantially similar to the 2017 Credit Facility, and an asset and revenue covenant substantially similar to the 2026 Notes as well as other covenants and provisions customarily found in secured transactions, including a cross default provision. Each Seller Loan requires immediate repayment on the occurrence of certain events, including the termination of the drilling contract associated with the relevant rig.
Senior Notes Interest Rate Adjustments
Our Senior Notes due 2025 (the “2025 Notes”) and our Senior Notes due 2045 (the “2045 Notes”) are subject to provisions that vary the applicable interest rates based on our debt rating. Effective April 2018, these senior notes have reached the contractually defined maximum interest rate set for each rating agency and no further interest rate increases are possible. The interest rates on these senior notes may be decreased if our debt ratings were to be raised by either rating agency above specified levels. Our other outstanding senior notes do not contain provisions varying applicable interest rates based upon our credit ratings.
Debt Tender Offers, Repayments and Open Market Repurchases

42


In March 2019, we completed cash tender offers for the 2020 Notes, the 2021 Notes, the 2022 Notes, and the 2024 Notes. Pursuant to such tender offers, we purchased $440.9 million aggregate principal amount of these senior notes for $400.0 million , plus accrued interest, using cash on hand and borrowings under the 2015 Credit Facility. As a result of this transaction, we recognized a net gain of approximately $31.3 million.
In October 2018, we purchased $27.4 million aggregate principal amount of various tranches of our senior notes for approximately $20.2 million , plus accrued interest, as open market repurchases and recognized a net gain of approximately $6.9 million .
In August 2018, we purchased $0.4 million aggregate principal amount of our Senior Notes due 2042 for approximately $0.3 million , plus accrued interest, as open market repurchases and recognized a net gain of approximately $0.1 million .
In March 2018, we repaid the remaining aggregate principal amount of $126.6 million of our Senior Notes due 2018 (the “2018 Notes”) at maturity using cash on hand.
In March 2018, we purchased $9.5 million aggregate principal amount of various tranches of our senior notes for approximately $8.7 million , plus accrued interest, as open market repurchases and recognized a net gain of approximately $0.5 million .
In February 2018, we redeemed the remaining principal amount of $61.9 million of our Senior Notes due 2019 (the “2019 Notes”) for approximately $65.3 million , plus accrued interest. As a result of this transaction, we recognized a net loss of approximately $3.5 million .
In February 2018, we completed cash tender offers for the 2018 Notes, the 2019 Notes, the 2020 Notes, the 2021 Notes, the 2022 Notes and the 2024 Notes. Pursuant to such tender offers, we purchased $754.2 million aggregate principal amount of these senior notes for $750.0 million , plus accrued interest, using the net proceeds of the 2026 Notes issuance and cash on hand. As a result of this transaction, we recognized a net loss of approximately $3.5 million .
Covenants
The 2017 Credit Facility contains certain financial covenants applicable to NHUK and its subsidiaries, including (i) a covenant restricting debt to total tangible capitalization to not greater than 0.55 at the end of each fiscal quarter, (ii) a minimum Liquidity requirement of $300.0 million , (iii) a covenant that, beginning with the fiscal quarter ending March 31, 2018, the ratio of the Rig Value (as defined in the 2017 Credit Facility) of Marketed Rigs (as defined in the 2017 Credit Facility) to the sum of commitments under the 2017 Credit Facility plus indebtedness for borrowed money of the borrowers and guarantors, in each case, that directly own Marketed Rigs, is not less than 3:00 to 1:00 at the end of each fiscal quarter and (iv) a covenant that, beginning with the fiscal quarter ending March 31, 2018, the ratio of (A) the Rig Value of the Closing Date Rigs (as defined in the 2017 Credit Facility) that are directly wholly owned by the borrowers and guarantors to (B) the Rig Value of the Closing Date Rigs owned by NHUK, subsidiaries of NHUK and certain local content affiliates, is not less than 80% at the end of each fiscal quarter (such covenants described in (iii) and (iv) of this paragraph, the “Guarantor Ratio Covenants”). The 2017 Credit Facility also includes restrictions on borrowings if, after giving effect to any such borrowings and the application of the proceeds thereof, the aggregate amount of Available Cash (as defined in the 2017 Credit Facility) would exceed $200.0 million .
NHUK has guaranteed the obligations of the borrowers under the 2017 Credit Facility. In addition, certain indirect subsidiaries of Noble-UK that own rigs are guarantors under the 2017 Credit Facility. Certain other subsidiaries of Noble-UK may be required from time to time to guarantee the obligations of the borrowers under the 2017 Credit Facility in order maintain compliance with the Guarantor Ratio Covenants.
The 2017 Credit Facility contains additional restrictive covenants generally applicable to NHUK and its subsidiaries, including restrictions on the incurrence of liens and indebtedness, mergers and other fundamental changes, restricted payments, repurchases and redemptions of indebtedness with maturities outside of the maturity of the 2017 Credit Facility, sale and leaseback transactions and transactions with affiliates.
The 2015 Credit Facility is guaranteed by NHUS and NHIL. The 2015 Credit Facility contains a covenant that limits our ratio of debt to total tangible capitalization, as defined in the 2015 Credit Facility, to 0.60 at the end of each fiscal quarter.
In addition to the covenants from the Credit Facilities noted above, the covenants from the 2026 Notes described under “—Debt Issuance” above, and the covenants from the Seller Loans described under “—Seller Loans” above, the indentures governing our outstanding senior unsecured notes contain covenants that place restrictions on certain merger and consolidation transactions, unless we are the surviving entity or the other party assumes the obligations under the indenture, and on the ability to sell or transfer all or substantially all of our assets. There are also restrictions on incurring or assuming certain liens and on entering into sale and lease-back transactions.
At March 31, 2019 , our debt to total tangible capitalization ratio under our 2017 Credit Facility was approximately 0.48 and we were in compliance with all applicable debt covenants. We continually monitor compliance with the covenants under our Credit Facilities, senior notes and Seller Loans and expect to remain in compliance throughout 2019 .

43


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 2— 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
Market risk is the potential for loss due to a change in the value of a financial instrument as a result of fluctuations in interest rates, currency exchange rates or equity prices, as further described below.
Interest Rate Risk
We are subject to market risk exposure related to changes in interest rates on borrowings under our Credit Facilities. Interest on borrowings under our Credit Facilities is at an agreed upon percentage point spread over LIBOR, or a base rate stated in the agreements. Borrowings under the 2015 Credit Facility bear interest at LIBOR plus an applicable margin, which is currently the maximum contractual rate of 1.65% . At March 31, 2019 , we had $300.0 million of borrowings outstanding under the 2015 Credit Facility. Borrowing under the 2017 Credit Facility bear interest at LIBOR plus an applicable margin, which is currently the maximum contractual rate of 4.25% . At March 31, 2019 , we had $50.0 million of borrowings outstanding under the 2017 Credit Facility, plus $3.4 million of performance letters of credit.
Our 2025 Notes and our 2045 Notes are subject to provisions that vary the applicable interest rates based on our debt rating. Effective April 2018, these senior notes have reached the contractually defined maximum interest rate set for each rating agency and no further interest rate increases are possible. The interest rates on these senior notes may be decreased if our debt ratings were to be raised by either rating agency above specified levels. Our other outstanding senior notes do not contain provisions varying applicable interest rates based upon our credit ratings.
We maintain certain debt instruments at a fixed rate whose fair value will fluctuate based on changes in market expectations for interest rates and perceptions of our credit risk. The fair value of our total debt was $2.9 billion at both March 31, 2019 and December 31, 2018 . The decrease in the fair value of debt relates to a reduction in total principal amount outstanding due to our debt repayments during the period, partially offset by our debt issuance and changes in market expectations for interest rates and perceptions of our credit risk.
Foreign Currency Risk
Although we are a UK company, we define foreign currency as any non-U.S. denominated currency. Our functional currency is the U.S. Dollar. However, outside the United States, a portion of our expenses are incurred in local currencies. Therefore, when the U.S. Dollar weakens (strengthens) in relation to the currencies of the countries in which we operate, our expenses reported in U.S. Dollars will increase (decrease).
We are exposed to risks on future cash flows to the extent that local currency expenses exceed revenues denominated in local currency that are other than the functional currency.
Several of our regional shorebases have a significant amount of their cash operating expenses payable in local currencies. To limit the potential risk of currency fluctuations, we periodically enter into forward contracts, which have historically settled monthly in the operations’ respective local currencies. All of these contracts had a maturity of less than 12 months. There were no foreign currency forward contracts outstanding or entered into during three months ended March 31, 2019 .
Market Risk
We have a U.S. noncontributory defined benefit pension plan that covers certain salaried employees and a U.S. noncontributory defined benefit pension plan that covers certain hourly employees, whose initial date of employment is prior to August 1, 2004 (collectively referred to as our “qualified U.S. plans”). These plans are governed by the Noble Drilling Employees’ Retirement Trust. The benefits from these plans are based primarily on years of service and, for the salaried plan, employees’ compensation near retirement. These plans are designed to qualify under the Employee Retirement Income Security Act of 1974 (“ERISA”), and our funding policy is consistent with funding requirements of ERISA and other applicable laws and regulations. We make cash contributions, or utilize credits available to us, for the qualified U.S. plans when required. The benefit amount that can be covered by the qualified U.S. plans is limited under ERISA and the Internal Revenue Code of 1986. Therefore, we maintain an unfunded, nonqualified excess benefit plan designed to maintain benefits for specified employees at the formula level in the qualified salary U.S. plan. We refer to the qualified U.S. plans and the excess benefit plan collectively as the “U.S. plans.”

44


In addition to the U.S. plans, Noble Drilling (Land Support) Limited, an indirect, wholly-owned subsidiary of Noble-UK, maintains a pension plan that covers all of its salaried, non-union employees, whose most recent date of employment is prior to April 1, 2014 (referred to as our “non-U.S. plan”). Benefits are based on credited service and employees’ compensation, as defined by the non-U.S. plan.
Changes in market asset values related to the pension plans noted above could have a material impact upon our Condensed Consolidated Statements of Comprehensive Income (Loss) and could result in material cash expenditures in future periods.
Item 4. Controls and Procedures
Julie J. Robertson, Chairman, President and Chief Executive Officer of Noble-UK, and Adam C. Peakes, Senior Vice President and Chief Financial Officer of Noble-UK, have evaluated the disclosure controls and procedures of Noble-UK as of the end of the period covered by this report. On the basis of this evaluation, Ms. Robertson and Mr. Peakes have concluded that Noble-UK’s disclosure controls and procedures were effective as of March 31, 2019 . Noble-UK’s disclosure controls and procedures are designed to ensure that information required to be disclosed by Noble-UK in the reports that it files with or submits to the SEC 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.
Julie J. Robertson, President and Chief Executive Officer of Noble-Cayman, and Adam C. Peakes, Director, Vice President and Chief Financial Officer of Noble-Cayman, have evaluated the disclosure controls and procedures of Noble-Cayman as of the end of the period covered by this report. On the basis of this evaluation, Ms. Robertson and Mr. Peakes have concluded that Noble-Cayman’s disclosure controls and procedures were effective as of March 31, 2019 . Noble-Cayman’s disclosure controls and procedures are designed to ensure that information required to be disclosed by Noble-Cayman in the reports that it files with or submits to the SEC 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 either Noble-UK’s or Noble-Cayman’s internal control over financial reporting that occurred during the quarter ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of each of Noble-UK or Noble-Cayman, respectively.

PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information regarding legal proceedings is presented in “ Note 13— 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 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, 2018 , 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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Under UK law, the Company is only permitted to purchase its own shares by way of an “off-market purchase” in a plan approved by shareholders. As of the date of this report, no such plan has been approved and during the three months ended March 31, 2019 there were no repurchases by Noble-UK of its shares.
Item 6. Exhibits
The following exhibits are filed as part of this Quarterly Report on Form 10-Q.

45


Index to Exhibits
Exhibit
Number
 
Exhibit
 
 
 
2.1
 
 
 
 
2.2
 
 
 
 
2.3
 
 
 
 
3.1
 
 
 
 
3.2
 
 
 
 
10.1*
 
 
 
 
10.2*
 
 
 
 
10.3*
 
 
 
 
10.4*
 
 
 
 
10.5*
 
 
 
 
10.6*
 

 
 
 
31.1
 
 
 
 
31.2
 

 
 
 
32.1+
 
 
 
 
32.2+
 

46


Exhibit
Number
 
Exhibit
 
 
 
 
 
 
101
 
Interactive Data File
______________________________________________________
*
Management contract or compensatory plan or arrangement.
+
Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K.

47


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Noble Corporation plc , a public limited company incorporated under the laws of England and Wales
 
/s/ Adam C. Peakes
 
May 2, 2019
Adam C. Peakes
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
 
Date
 
 
 
/s/ Laura D. Campbell
 
May 2, 2019
Laura D. Campbell
Vice President and Controller
(Principal Accounting Officer)

 
Date

Noble Corporation , a Cayman Islands company
/s/ Adam C. Peakes
 
May 2, 2019
Adam C. Peakes
Director, Vice President and Chief Financial Officer
(Principal Financial Officer)
 
Date
 
 
 
/s/ Laura D. Campbell
 
May 2, 2019
Laura D. Campbell
Vice President and Controller
(Principal Accounting Officer)

 
Date


48
Exhibit 10.1

NOBLE CORPORATION
2019 Short-Term Incentive Plan (“STIP”)
Plan Overview, Terms and Conditions
Plan Purpose

The success of Noble Corporation (“Noble”) and its subsidiaries (collectively, the “Company”) is a result of the efforts of all key employees. In order to focus each employee’s efforts on optimizing the Company’s overall operational and financial results, the Company maintains this Short Term Incentive Plan (the “Plan”) to reward employees for successful achievement of specific goals.

An effective incentive plan should both align employee interests with those of shareholders and motivate and influence employee behavior. Key positions within the Company have the ability to make a positive contribution to key factors that increase shareholder value. These factors can be quantified and measured through achievement of various financial and operational targets. The objectives of using such targets in the formulation of the specific Company goals are to link an employee’s annual incentive award more closely to the metrics that lead to the creation of shareholder wealth and to promote a culture of high performance and an environment of teamwork.
 
Eligibility and Participation

Full-time shore-based employees and select offshore employees are eligible for consideration of a bonus under the Plan, based upon performance, subject to the approval of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Noble.

To be eligible to receive a bonus payment with respect to a Plan year, an employee must be actively employed by the Company on the last day of such Plan year and must continue to be employed through the date on which bonus payments for such Plan year are made. An employee shall not be eligible to receive any bonus payment if the employee’s employment with the Company terminates for any reason, either voluntarily or involuntarily (except as noted below), before that date on which bonus payments for a Plan year are made. The Plan year is also the calendar year unless otherwise specified.

In the event of death, disability or retirement, the employee or estate of the former employee may receive a payment from the Plan, at the discretion of the Committee and the Chief Executive Officer (the “CEO”). For purposes of the Plan, “disability” means any termination of employment with the Company or an affiliate of the Company because of a long-term or total disability, as determined by the Company’s disability insurance programs. “Retirement” means a termination of employment with the Company on a voluntary basis by a person if, immediately prior to such termination of employment, the sum of the age and the number of years of continuous service of such person with the Company is equal to or greater than 60.

Plan Funding

The Award Pool for 2019 will primarily be a function of the Company’s performance on key metrics to include:
•
Company EBITDA versus budget (weighted 70%)
•
Company Safety goal result (weighted 20%)
•
Company Environmental goal result (weighted 10%)

See Exhibit 1 for details on the Company’s performance measures . Generally, each goal is structured to include a Threshold, Target and Maximum level of achievement. The Threshold is the minimum level of achievement. If Performance is below Threshold for a goal, it will yield no pool funding associated with that goal.


Exhibit 10.1


The Award Pool available will be determined first by multiplying the sum of the target bonuses for all eligible employees at the end of the year (“Aggregate Target Bonuses”) by the Company’s weighted performance as measured by the results of the key metrics. See Exhibit 2 for an example illustrating the calculation of the Award Pool.

The Award Pool will be allocated as described in the next sections.

Individual Target Bonus

The target bonus for an employee is an amount equal to the employee’s salary at the end of the Plan year multiplied by the assigned target bonus percentage. Target bonuses range from 4% to 110% of salary. The assigned targets are based on competitive market data and internal equity considerations and are reviewed each year. Note that, for purposes of calculating the Aggregate Target Bonuses, a target bonus percentage of up to 6% will be used for those employees covered under the Plan that do not have a formal target bonus percentage.

Financial and Operating Goals

The performance scales for 2019 for these metrics are provided in Exhibit 1.

In administering the Plan and reviewing the calculation of the Financial and Operating goals, the Committee may take into consideration the effect of any unusual, non-recurring or extraordinary item or event that impacts the Company or any member of the Driller Peer Group during the year, including, but not limited to, acquisitions, divestitures or impairments. Furthermore, the Committee may make adjustments to the calculation of any of the Financial and Operating goals so that any such unusual, non-recurring or extraordinary item or event does not distort or adversely affect the calculation of the Financial and Operating goals.

Determination of Individual Awards

Each target bonus will be adjusted by the overall Corporate and/or Operations Financial and Operating results depending on the employee (see Exhibit 1). This will be the Adjusted Target Bonus. For example, if an individual’s bonus target is $10,000, and the performance multiple for Financial and Operating goals is 1.20, the Adjusted Target Bonus would be $12,000. The cumulative total of awards for all employees will be the “Aggregate Calculated Pool”.

Amounts may be adjusted for employees hired or promoted during the Plan year considering length of service or time in position and may also be adjusted upward or downward by up to 20% to reflect merit, individual and team performance and/or additional selected criteria, subject to the approval of the Committee and CEO. In extreme circumstances, the Adjusted Target Bonus can be adjusted downward by as much as 100% for any reason, including, but not limited to, Company or region performance, individual employee performance, employee conduct, separation of employment, etc., subject to the approval of the Committee and CEO.

Note that if on a cumulative basis the sum of the awards in the Aggregate Calculated Pool is greater than the Award Pool, bonuses will be adjusted on a pro-rata basis to remain within the constraints of the Award Pool.

Review and Approval

The Board will approve the Company’s budget for the year in terms of EBITDA , and safety and environmental performance levels (and associated payouts for each) no later than March 31 st of the year.



Exhibit 10.1

If, after the establishment of goals for a Plan year, the budget changes substantially due to subsequent events, such as the acquisition, spin-off or sale of assets, any unusual or non- recurring item or any unforeseen event that impacts the Company, a region or the industry as a whole, then the Committee may make adjustments to the respective goals in order that the affected participants may not be adversely impacted by such an event or item. Any such revised goals shall be applicable to the Plan year from and after the time of their approval.

After the end of each Plan year, the Committee, in its best business judgment, will make the final determination on the size of the Award Pool for such Plan year. All bonus calculations, allocations and recommendations are subject to review and approval by the Committee.

Separately, managers having responsibility for recommending the allocation of bonuses to eligible employees shall submit their recommended bonus for each employee to the CEO for review and approval. Notwithstanding anything otherwise contained in this Plan, the Committee and the CEO (and any delegated designee of the CEO) shall have the authority to adjust individual bonus amounts as deemed to be appropriate for any reason, including, but not limited to, Company or region performance, individual employee performance, employee conduct, separation of employment, etc.

At-Will Employment

Nothing in the Plan guarantees or constitutes a contract for any specific term of employment or otherwise limits the Company’s or an employee’s right to terminate the employment relationship for any reason at any time.




























Exhibit 10.1

Exhibit 1
2019 STIP - Financial and Operating Goal Performance Scales

Performance relative to the following goals will determine the size of the Award Pool for 2019:
Company EBITDA (70%)
Level of Achievement
 
Threshold
 
Target
 
Maximum
% of Target
 
80%
 
100%
 
120%
Bonus Pool Multiple
 
0.50
 
1.00
 
2.00

EBITDA is defined as the Company’s earnings before the deduction of interest, tax, depreciation and amortization expenses, subject to adjustment to exclude extraordinary gains or losses. Cash operating margin is defined as contract drilling revenues less contract drilling cost including reimbursables. Achievement at levels between the points shown will be determined via linear interpolation.
Company Safety (20%)
Level of Achievement
 
Bonus Pool Multiple
Top Quartile Performance & Year-Over-Year Improvement
 
2.00
Top Quartile Performance
 
1.50
Second Quartile Performance
 
1.00
Third Quartile Performance
 
0.50
Bottom Quartile Performance
 
—

Safety is measured by Total Recordable Incident Rate (“TRIR”) as compared to the International Association of Drilling Contractors (“IADC”) offshore industry average of companies with greater than 1.5 million manhours. The IADC offshore industry average will be based on the twelve-month period ending September 30, 2019.

Company Environmental (10%)
Level of Achievement
 
Threshold
 
Target
 
Maximum
% of Target
 
3.01 - 3.50
 
2.51 - 3.00
 
≤2.50%
Bonus Pool Multiple
 
0.50
 
1.00
 
2.00

As part of Environmental Stewardship, Noble’s focus is on preventing all Loss of Primary Containment (LOPC).  The environmental measure is an LOPC event that results in either a spill that is contained on a rig or that is lost to sea.  To calculate, the number of LOPC events is multiplied by 200,000, then divided by cumulative manhours for the year.  This rate calculation is used to normalize the activity levels year over year.

Within the constraints of the Award Pool, Operations employees will also be measured on region-specific goals. Operations employees are those employees that work in our regions. These regional goals are measured on the same performance scales as the Company goals referenced above.



Exhibit 10.1

Financial and Operating Goal Weighting Schedule
Goal
 
Corporate
 
Operations
Company EBITDA
 
70%
 
—
Region Cash Operating Margin
 
—
 
70%
Company Safety
 
20%
 
10%
Region Safety
 
—
 
10%
Company Environmental
 
10%
 
10%








































Exhibit 10.1

Exhibit 2
Plan Funding Calculation Example

Assuming Aggregate Target Bonuses of $15 million and bonus pool multiples of 1.00 for Company EBITDA, 1.20 for Company Safety and 1.00 for the Company Environmental goals, the Award Pool would be:

Plan Award Pool Calculation
Goal
 
Multiple
 
Weighting
 
Factor
Company EBITDA
 
1.00
x
70%
=
0.70
Company Safety
 
1.20
x
20%
=
0.24
Company Environmental
 
1.00
x
10%
=
0.10
 
 
 
 
 
 
 
Combined Award Pool Multiple
 
 
 
 
 
1.04
Aggregate Target Bonuses
 
 
 
 
 
$15mm
Award Pool (1.04 x $15 mm)
 
 
 
 
 
$15.6mm



Exhibit 10.2

NOBLE CORPORATION

PERFORMANCE-VESTED RESTRICTED STOCK UNIT AWARD

THIS INSTRUMENT (this “Instrument”), made as of the __st day of _______, 20__, by Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (the “Company”) evidences the performance-vested Restricted Stock Units (as defined in the Plan) awarded hereunder to __________ (“Employee”) and sets forth the restrictions, terms and conditions that apply thereto.
W I T N E S S E T H:

WHEREAS, the committee (the “Committee”) acting under the Noble Corporation 2015 Omnibus Incentive Plan, as amended (the “Plan”), has determined that it is desirable to award performance-vested Restricted Stock Units to Employee pursuant to the Plan; and

WHEREAS, pursuant to the Plan, the Committee has determined that the performance-vested Restricted Stock Units so awarded shall be subject to the restrictions, terms and conditions set forth in this Instrument.

NOW, THEREFORE, the award of performance-vested Restricted Stock Units is hereby granted to Employee as follows:

1.      Performance-Vested Restricted Stock Unit Award . On the terms and conditions and subject to the restrictions, including forfeiture, hereinafter set forth, the Company hereby awards _______ Restricted Stock Units (the “Awarded Restricted Stock Units”) to Employee pursuant to the Plan. The Awarded Restricted Stock Units are effective as of the date of this Instrument (the “Effective Date”), and shall vest or be forfeited in accordance with (and otherwise be subject to) the provisions of this Instrument. The Awarded Restricted Stock Units are awarded without the payment of any cash consideration by Employee, except that payment of nominal value in respect of the Shares hereunder may be required by the Committee or pursuant to procedures of the Committee in respect of the allotment and issuance, transfer or delivery of such Shares. This award of Restricted Stock Units made to Employee is hereby designated by the Committee to be a Performance Award for the purposes of the Plan.

2.      Vesting and Forfeiture . The Awarded Restricted Stock Units shall be subject to being forfeited by Employee during the “Restricted Period” as defined in the attached Schedule I, and shall vest or be forfeited by Employee as follows:

(a)      If Employee remains continuously employed by the Company or an affiliate from the Effective Date through the end of the Restricted Period, the Awarded Restricted Stock Units shall vest and the forfeiture restrictions applicable to them under this Instrument shall terminate to the extent of the percentage of vesting achieved under the “Performance Measures” as defined in the attached Schedule I and the vesting schedule provisions of the attached Schedule I, and any Awarded Restricted Stock Units that do not vest at the end of the Restricted Period shall be forfeited by Employee.

(b)      If Employee’s employment with the Company or an affiliate terminates during the Restricted Period by reason of the death, Disability or Retirement of Employee, then the number of Awarded Restricted Stock Units equal to the total number of Awarded Restricted Stock Units granted hereunder multiplied by a fraction, (i) the numerator of which is the number of calendar months remaining in the Restricted Period that end after the date of Employee’s termination of employment with the Company or an affiliate by reason of death, Disability or Retirement, and (ii) the denominator


Exhibit 10.2

of which is 36, shall be forfeited by Employee effective as of the date of such termination of employment. The remaining number of Awarded Restricted Stock Units shall remain eligible for vesting subject to the forfeiture restrictions applicable to them under this Instrument which, subject to this Section 2, shall terminate at the end of the Restricted Period to the extent of the percentage of vesting achieved under the Performance Measures and vesting schedule provisions of the attached Schedule I, it being understood that any then outstanding Awarded Restricted Stock Units that do not vest at the end of the Restricted Period shall be forfeited by Employee.
 
(c)      If Employee’s employment with the Company or an affiliate terminates during the Restricted Period for any reason other than the death, Disability or Retirement of Employee, all of the Awarded Restricted Stock Units shall be forfeited by Employee.

(d)      The foregoing provisions of this Section 2 to the contrary notwithstanding, if a 409A Change in Control (as defined below) occurs during the Restricted Period, 100% of the then outstanding Awarded Restricted Stock Units shall vest and the forfeiture restrictions applicable to them under this Instrument shall terminate, and any and all other vesting rights with respect to the then outstanding Awarded Restricted Stock Units shall be forfeited by Employee. For the purposes of this Instrument, a “409A Change in Control” means a Change in Control (as defined in the Plan) that also is a change in control event within the meaning of U.S. Treas. Reg. section 1.409A-3(i)(5). The provisions of this Section 2(d) shall be the exclusive means by which any outstanding Awarded Restricted Stock Units shall vest in connection with a change in the ownership or effective control of the Company or a change in the ownership of the assets of the Company, and no provision of any plan, employment agreement or other agreement or arrangement pertaining to Employee and the Company or an affiliate shall cause such an Awarded Restricted Stock Units to vest in connection with a change in the ownership or effective control of the Company or a change in the ownership of the assets of the Company unless this Section 2(d) is amended in writing by the parties to provide for such vesting.

For the purposes of this Instrument, transfers of employment without interruption of service between or among the Company and any of its affiliates shall not be considered a termination of employment.

3.      Allotment and Issuance of Shares . With respect to any Awarded Restricted Stock Units that vest pursuant to the provisions of Section 2(a) or Section 2(b) hereof, as soon as practicable after the percentage of vesting achieved under the Performance Measures and vesting provisions of the attached Schedule I has been determined and certified in writing by the Committee and during the period beginning at the end of the “Performance Cycle” as defined in the attached Schedule I and ending no later than 75 days after the end of the Performance Cycle, the Company shall, subject to Section 6(b) herein, allot and issue or transfer to Employee one Share in settlement of such Awarded Restricted Stock Unit and such Awarded Restricted Stock Unit shall be canceled. With respect to an Awarded Restricted Stock Unit that vests pursuant to the provisions of Section 2(d) hereof, as soon as practicable following the occurrence of a 409A Change in Control (but in no event later than the end of the calendar year in which such 409A Change in Control occurs, or if later, 2.5 months after such 409A Change in Control), the Company shall, subject to Section 6(b) herein, allot and issue or transfer to Employee one Share in settlement of such Awarded Restricted Stock Unit and such Awarded Restricted Stock Unit shall be canceled.
The applicable vesting or forfeiture of the Awarded Restricted Stock Units that are outstanding at the end of the Restricted Period shall be determined and certified in writing by the Committee as soon as reasonably practicable after the end of the Restricted Period, but in no event later than 75 days after the end of the Performance Cycle.


Exhibit 10.2

4.      No Rights as Shareholder . Employee shall have no rights as a shareholder of the Company, including, without limitation, voting rights or the right to receive dividends and distributions as a shareholder, with respect to the Shares subject to the Awarded Restricted Stock Units, unless and until and to the extent such Shares are allotted and issued or transferred to Employee as provided herein.

5.      Dividend Equivalents . The Company hereby awards Dividend Equivalents to Employee with respect to the Awarded Restricted Stock Units. Such Dividend Equivalents shall be payable at the same time, and shall be subject to the same conditions, that are applicable to the Awarded Restricted Stock Units. Accordingly, the right to receive such Dividend Equivalent payments shall be forfeited to the extent that the Awarded Restricted Stock Units do not vest, are forfeited or are otherwise cancelled pursuant to such Performance Award. The award of Dividend Equivalents made to Employee pursuant to this Section 5 is not a Performance Award for the purposes of the Plan.

6.      Arrangements and Procedures Regarding Nominal Value and Withholding Taxes .

(a)      Employee shall make arrangements satisfactory to the Committee for (i) the payment of the aggregate nominal value with respect to the Shares that are allotted and issued, transferred or delivered to or on behalf of Employee in settlement of Awarded Restricted Stock Units that have become vested and (ii) the payment of taxes of any kind that are required by law to be withheld with respect to the Awarded Restricted Stock Units or the Dividend Equivalents awarded under this Instrument, including, without limitation, taxes applicable to (x) the awarding of the Awarded Restricted Stock Units or the allotment and issuance or transfer of Shares in settlement thereof, or (y) the awarding of the Dividend Equivalents or the payments made with respect thereto.

(b)      Unless and until the Committee shall determine otherwise and provide notice to Employee in accordance with Section 6(c), any obligation of Employee under Section 6(a) that arises with respect to the allotment and issuance, transfer or delivery of Shares in settlement of Awarded Restricted Stock Units that have become vested may be satisfied, in accordance with procedures adopted by the Committee, by (i) Employee’s forfeiture or surrender of the right to require the Company to allot and issue, transfer or deliver Shares subject to such Awarded Restricted Stock Units, (ii) causing such Awarded Restricted Stock Units to be settled partly in cash, or (iii) otherwise withholding a portion of such Shares. In the case of Shares as to which the right to require allotment and issuance, transfer or delivery is forfeited or surrendered pursuant to clause (i) and Shares withheld pursuant to clause (iii), such Shares or rights shall be valued at the Fair Market Value (of such Shares or the Shares to which such rights relate, as the case may be) as of the date on which the taxable event that gives rise to the withholding requirement occurs.

(c)      The Committee may determine, after the Effective Date and on notice to Employee, to authorize one or more arrangements (in addition to or in lieu of the arrangement described in Section 6(b)) satisfactory to the Committee for Employee to satisfy the obligation of Employee under Section 6(a).

(d)      If Employee does not, for whatever reason, satisfy the obligation of Employee under Section 6(a), then the Company and its affiliates shall, to the extent permitted by law, have the right to deduct from any payments of any kind otherwise due to Employee the amount required to satisfy the obligation of Employee under such Section 6(a).

7.      Non-Assignability . This Instrument is not assignable or transferable by Employee. No right or interest of Employee under this Instrument or the Plan may be assigned, transferred or alienated, in whole or in part, either directly or by operation of law (except pursuant to a qualified domestic relations order within


Exhibit 10.2

the meaning of Section 414(p) of the Code or a similar domestic relations order under applicable foreign law, either in such form as is acceptable to the committee), and no such right or interest shall be liable for or subject to any debt, obligation or liability of Employee.

8.      Defined Terms; Plan Provisions . Unless the context clearly indicates otherwise, the capitalized terms used (and not otherwise defined) in this Instrument shall have the meanings assigned to them under the provisions of the Plan. The Awarded Restricted Stock Units and the Dividend Equivalents subject to this Instrument shall be governed by and subject to all applicable provisions of the Plan. This Instrument is subject to the Plan, and the Plan shall govern where there is any inconsistency between the Plan and this Instrument.

9.      Governing Law . This Instrument shall be governed by and construed and enforced in accordance with the laws of the State of Texas, without regard to the principles of conflicts of laws thereof, except to the extent Texas law is preempted by federal law of the United States or by the laws of England and Wales.

10.      Binding Effect . This Instrument shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns.

11.      Prior Communications; Amendment . This Instrument, together with any Schedules and Exhibits and any other writings referred to herein or delivered pursuant hereto, evidences the Award granted hereunder, which shall be subject to the restrictions, terms and conditions hereof, and supersedes all prior agreements and understandings, whether written or oral, between the parties with respect to the subject matter hereof. To the fullest extent provided by applicable law, this Instrument may only be amended, modified and supplemented in accordance with the applicable terms and conditions set forth in the Plan.

12.      Notices . All notices and other communications hereunder shall be in writing and shall be deemed given if directed in the manner specified below, to the parties at the following addresses and numbers:

(a)      If to the Company, when delivered by hand, confirmed fax or mail (registered or certified mail with postage prepaid) to:
Noble Corporation plc
10 Brook Street
London
W1S IBG
England
Attention: Corporate Secretary
Fax: 281-596 - 4486
 
With a copy to:
 
Chairman of Compensation Committee
c/o Noble Corporation plc
London
W1S IBG
England
Fax: 281-596 - 4486



Exhibit 10.2

(b)      If to Employee, when delivered by hand, confirmed fax or mail (registered or certified mail with postage prepaid) to:
The last known address and number for Employee as maintained in the personnel records of the Company

For purposes of this Section 12, the Company shall provide Employee with written notice of any change of the Company’s address, and Employee shall be responsible for providing the Company with proper notice of any change of Employee’s address pursuant to the Company’s personnel policies, and from and after the giving of such notice the address or addresses therein specified will be deemed to be the address of such party for the purposes of giving notice hereunder.

13.      Severability . If any provision of this Instrument is held to be unenforceable, this Instrument shall be considered divisible and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects the restrictions, terms and conditions set forth in this Instrument shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law.

14.      Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only, do not constitute a part of this Instrument, and shall not affect in any manner the meaning or interpretation of this Instrument.

15.      Gender . Pronouns in masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.

16.      References . The words “this Instrument,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Instrument as a whole and not to any particular subdivision unless expressly so limited. Whenever the words “include,” “includes” and “including” are used in this Instrument, such words shall be deemed to be followed by the words “without limitation.”

17.      Unfunded Awards . The awards made under this Instrument are unfunded and unsecured obligations and rights to provide or receive compensation in accordance with the provisions hereof, and to the extent that Employee acquires a right to receive compensation from the Company or an affiliate pursuant to this Instrument, such right shall be no greater than the right of any unsecured general creditor of the Company or such affiliate.

18.      Compliance with Code Section 409A . The compensation payable to or with respect to Employee pursuant to the Awarded Restricted Stock Units is intended to be compensation that is not subject to the tax imposed by Code Section 409A, and this Instrument shall be administered and construed to the fullest extent possible to reflect and implement such intent.

IN WITNESS WHEREOF, the Company has signed and delivered this Instrument as of the date first above written.

NOBLE CORPORATION PLC






Exhibit 10.2


                    
SCHEDULE I
NOBLE CORPORATION
PERFORMANCE MEASURES FOR THE 2019-2021 PERFORMANCE CYCLE
AWARD OF PERFORMANCE-VESTED RESTRICTED STOCK UNITS

The Committee has determined and specifies that the following Performance Cycle Restricted Period, Target Restricted Stock Units, and Performance Measures (each as defined below), shall be applied with respect to the Awarded Restricted Stock Units:
1.      Performance Cycle . The “Performance Cycle” applicable to the Awarded Restricted Stock Units shall be the three-year period beginning on January 1, 2019 and ending on December 31, 2021.
2.      Restricted Period . The “Restricted Period” applicable to the Awarded Restricted Stock Units shall be the three-year period beginning on the Effective Date and ending on the third anniversary of the Effective Date.
3.      Target Restricted Stock Units . The “Target Restricted Stock Units” applicable to the Awarded Restricted Stock Units shall equal 100% of the number of the Awarded Restricted Stock Units that are outstanding as of the end of the Restricted Period. As further discussed below the number of Target Restricted Stock Units shall be multiplied by the vesting percentage to determine the number of the Awarded Restricted Stock Units that will vest, if at all, at the end of the Restricted Period.
4.      Performance Measures . The “Performance Measures” applicable to the Awarded Restricted Stock Units shall be the TSR Performance Measure and the CDM-GA Performance Measure (each as defined below), which shall be used to determine the extent of the vesting of the Awarded Restricted Stock Units that are outstanding as of the end of the Restricted Period. Each Performance Measure shall be applied to determine its respective performance percentage set forth on Annex I, which is attached to and hereby made a part of this Schedule I. As further discussed below, the performance percentages for each of the Performance Measures shall be averaged to determine the vesting percentage.
The applicable Performance Measure ranking of the Company and the companies in the Applicable Peer Group (as defined below) for each Performance Cycle shall be (i) determined and certified in writing by the Committee as soon as reasonably practicable after the end of the Performance Cycle and (ii) based on the then-available public information with respect to such Performance Measure (the “Performance Data”), but in no event later than 75 days after the end of the Performance Cycle. For purposes of establishing the applicable Performance Measure ranking of the Company and the companies in the Applicable Company Group, the applicable Performance Measure of each such entity shall be ranked in descending order from highest to lowest, with the highest ranked entity being ranked as 1, the next highest ranked entity as 2, etc.
TSR Performance Measure . The “TSR Performance Measure” will be measured by applying the Performance Data and determining the cumulative total shareholder return (“TSR”) for the Shares of the Company for the Performance Cycle relative to the TSR of a group of peer companies for the Performance Cycle (the “Applicable Peer Group”):
The Applicable Peer Group shall consist of: Diamond Offshore Drilling Inc.; Ensco International plc; Seadrill Limited; and Transocean Ltd., the common security of each such entity is publicly traded on either


Exhibit 10.2

the NYSE or NASDAQ Stock Market (such entity being a “Public Reporting Company”) as of the date hereof.
TSR for the Company and each member of the Applicable Peer Group for the Performance Cycle shall be defined and calculated as follows, where “Beginning Price” is the average closing price on the relevant United States stock market (NYSE or NASDAQ) for a share of the relevant company’s common equity security during the 30 trading days immediately preceding the beginning of the Performance Cycle and the “Ending Price” is the average closing price on the relevant United States stock market (NYSE or NASDAQ) for a share of the relevant company’s common equity security during the last 30 trading days of the Performance Cycle for which Performance Data is available:
TSR for the Performance Cycle
=
((Ending Price - Beginning Price) + dividends and cash distributions   per share paid*) ÷ Beginning Price

*
Stock dividends paid in common equity securities rather than cash in which there is a distribution of less than 25 percent of the fully diluted outstanding shares (as calculated prior to the distribution) shall be treated as cash for purposes of this calculation.
If any Applicable Peer Group company is no longer a Public Reporting Company on the last trading day of the Performance Cycle, then adjustments may be effected, as further described below, with respect to the performance determinations and performance percentages that apply to the TSR Performance Measure. In addition, if any Applicable Peer Group company is not a Public Reporting Company on a continuous basis during the Performance Cycle, but is otherwise a Public Reporting Company on the last trading day of the Performance Cycle, then adjustments may be effected, as appropriate, with respect to the performance determinations and performance percentages that apply to the TSR Performance Measure.
If the TSR for the Company or any member of the Applicable Peer Group is negative for any applicable Performance Cycle, the relative ranking of the TSRs shall reflect such negative results from smallest to greatest (with the smallest negative margin being the highest ranked of the negative results).
CDM-GA Performance Measure . The “CDM-GA Performance Measure” will be measured by applying the Performance Data and determining the Company’s contract drilling margin less G&A, expressed as a percentage, for the applicable Performance Cycle (“CDM-GA”) relative to the CDM-GA for the Applicable Peer Group for the Performance Cycle.
CDM-GA for the Company and each member of the Applicable Peer Group for the Performance Cycle shall be defined and calculated as follows:
CDM-GA for the Performance Cycle
=
(Contract Drilling Margin* - G&A) ÷
Contract Drilling Revenues**

*Contract Drilling Margin equals Contract Drilling Revenues less Contract Drilling Costs.
**Contract Drilling Revenues, Contract Drilling Costs and G&A shall be as shown on the face of the income statements that comprise Performance Data for the Company and the Applicable Peer Group members for the periods constituting the Performance Cycle.
If any Applicable Peer Group company is no longer a Public Reporting Company on the last trading day of the Performance Cycle, then adjustments may be effected, as further described below, with respect to the performance determinations and performance percentages that apply to the CDM-GA Performance Measure. In addition, if any Applicable Peer Group company is not a Public Reporting Company on a


Exhibit 10.2

continuous basis during the Performance Cycle, but is otherwise a Public Reporting Company on the last trading day of the Performance Cycle, then adjustments may be effected, as appropriate, with respect to the performance determinations and performance percentages that apply to the CDM-GA Performance Measure.
If the CDM-GA for the Company or any member of the Applicable Peer Group is negative for any applicable Performance Cycle, the relative ranking of the CDM-GAs shall reflect such negative results from smallest to greatest (with the smallest negative margin being the highest ranked of the negative results).
4.      Vesting Calculation . The number of the Awarded Restricted Stock Units that will vest at the end of the Restricted Period shall be based on (i) the number of Target Restricted Stock Units as determined pursuant to paragraph 3 above and (ii) the average of the performance percentages for the Performance Cycle as each such percentage shall be determined in accordance with Annex I. The number of Awarded Restricted Stock Units vesting shall be the number of Target Restricted Stock Units multiplied by the average of the performance percentages for the Performance Measures as shown on Annex I.
Example 1 : If the Company ranks fourth among the Applicable Peer Group for the TSR Performance Measure for the Performance Cycle, Annex I provides for a 50% performance percentage. If the Company ranks first among the Applicable Peer Group for the CDM-GA Performance Measure for the Performance Cycle, Annex I provides for a 200% performance percentage. For an award comprised of 500 Target Restricted Stock Units, the number of shares to vest with respect to the Awarded Restricted Stock Units would be:

•
((50% + 200%) ÷ 2) = 125% (vesting percentage)
•
125% × 500 = 625 shares
    
Example 2 : Assume the same facts as Example 1 and that the holder of the Awarded Restricted Stock Units incurs a termination of employment under Section 2(b) of this Instrument with 7 months remaining in the Restricted Period that ends after the date of termination. Pursuant to Section 2(b), 7/36ths of the Awarded Restricted Stock Units are forfeited, and 29/36ths of the Awarded Restricted Stock Units remain outstanding. The number of shares to vest with respect to the Awarded Restricted Stock Units would be:

•
500 × (7 ÷36) = 97 (rounded down, 403 remaining)
•
((50% + 200%) ÷ 2) = 125% (vesting percentage)
•
403 × 125% = 503 shares (rounded down)
 













Exhibit 10.2


ANNEX I TO SCHEDULE I

2019-2021 Performance Cycle
Performance-Vested Restricted Stock Unit Agreement Ranking, Performance Percentage and Vesting Schedule

Noble Ranking Among Applicable Peer Group
Performance Percentage
1
200%
2 and 3
Payout is interpolated between 50% and 200% based on Noble’s performance ranking relative to the companies in the 1 st  and 4 th  position
4
50%
5
0%

After determining the applicable Performance Measure of each company within the Applicable Peer Group, the Performance Measure for the Company will be ranked against the applicable Performance Measure of each of the Applicable Peer Group companies.
With regard to acquisitions, for the TSR measure, acquired companies will be converted to an average of the remaining four companies (including Noble) and for the CDM-GA measure, the acquired company will be measured up until the acquisition date.
With regard to bankruptcy, for both measures, if a company goes bankrupt during the period, it will be moved to the bottom rank rather than removed.



Exhibit 10.3

NOBLE CORPORATION
TIME-VESTED RESTRICTED STOCK UNIT AWARD
THIS INSTRUMENT (the “Instrument”), made as of the __st day of _________, 20__ by Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (the “Company”) evidences the time-vested Restricted Stock Units (as defined in the Plan) awarded hereunder to ____________ (“Employee”) and sets forth the restrictions, terms and conditions that apply thereto.
W I T N E S S E T H:
WHEREAS, the committee (the “Committee”) acting under the Noble Corporation 2015 Omnibus Incentive Plan, as amended (the “Plan”), has determined that it is desirable to award time-vested Restricted Stock Units to Employee pursuant to the Plan; and
WHEREAS, pursuant to the Plan, the Committee has determined that the time-vested Restricted Stock Units so awarded shall be subject to the restrictions, terms and conditions set forth in this Instrument;
NOW, THEREFORE, the award of time-vested Restricted Stock Units is hereby granted to Employee as follows:
1.      Time-Vested Restricted Stock Unit Award
On the terms and conditions and subject to the restrictions, including forfeiture, hereinafter set forth, the Company hereby awards ______ Restricted Stock Units (the “Awarded Restricted Stock Units”) to Employee pursuant to the Plan. The Awarded Restricted Stock Units are being awarded to Employee effective as of the date of this Instrument (the “Effective Date”), and shall vest or be forfeited in accordance with (and otherwise be subject to) the provisions of this Instrument. The Awarded Restricted Stock Units are being awarded to Employee without the payment of any cash consideration by Employee, except that payment of nominal value in respect of the Shares hereunder may be required by the Committee or pursuant to procedures of the Committee in respect of the allotment and issuance, transfer or delivery of such Shares.
2.      Vesting and Forfeiture
Except as set forth in Section 3 of this Instrument, the Awarded Restricted Stock Units shall vest and the forfeiture restrictions applicable to them under this Instrument shall terminate in accordance with the provisions of the attached Schedule I, provided that Employee remains continuously employed by the Company or an Affiliate from the Effective Date to the applicable date of vesting. Any Awarded Restricted Stock Units that have not already vested shall be forfeited by Employee upon the termination of Employee’s employment with the Company or an Affiliate for any reason other than (i) death or Disability or (ii) after the occurrence of a Change in Control, by reason of (A) the Company’s termination of Employee’s employment other than for Cause (as defined below) or (B) Employee’s termination of Employee’s employment for Good Reason (as defined below). For purposes of this Instrument, transfers of employment without interruption of service between or among the Company and any of its Affiliates shall not be considered a termination of employment.


Exhibit 10.3

3.      Acceleration of Vesting.
(a)      All of the Awarded Restricted Stock Units that have not already vested shall become fully vested and no longer subject to any forfeiture restrictions under this Instrument if Employee’s employment with the Company or an Affiliate terminates (i) by reason of the death or Disability of Employee or (ii) after the occurrence of a Change in Control, by reason of (A) the Company’s termination of Employee’s employment other than for Cause or (B) Employee’s termination of Employee’s employment for Good Reason.
(b)      For purposes of this Instrument, “Cause” shall mean (i) the willful and continued failure of Employee to perform substantially Employee’s duties for the Company (other than any such failure resulting from bodily injury or disease or any other incapacity due to mental or physical illness); or (ii) the willful engaging by Employee in illegal conduct or gross misconduct that is materially and demonstrably detrimental to the Company and/or its Affiliates, monetarily or otherwise. For purposes of this provision, no act, or failure to act, on the part of Employee shall be considered “willful” unless done, or omitted to be done, by Employee in bad faith or without reasonable belief that Employee’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, upon the instructions of the Chief Executive Officer or another senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Company in good faith and in the best interests of the Company and its Affiliates.
(c)      For purposes of this Instrument, “Good Reason” shall mean any of the following (without Employee’s express written consent): (i) a material diminution in Employee’s base salary as of the day immediately preceding the Change in Control or (ii) the Company’s requiring Employee to be based at any office or location more than 50 miles from Employee’s principal office or location as of the day immediately preceding the Change in Control. Notwithstanding the foregoing, Employee shall not have the right to terminate Employee’s employment hereunder for Good Reason unless (1) within 60 days of the initial existence of the condition or conditions giving rise to such right Employee provides written notice to the Corporate Secretary of the Company of the existence of such condition or conditions, and (2) the Company fails to remedy such condition or conditions within 30 days following the receipt of such written notice (the “Cure Period”). If any such condition is not remedied within the Cure Period, Employee must terminate Employee’s employment with the Company within a reasonable period of time, not to exceed 30 days, following the end of the Cure Period.
4.      Allotment and Issuance of Shares. As soon as practicable following the date any Awarded Restricted Stock Unit vests (but no later than the end of the calendar year in which vesting occurs or, if later, 2.5 months after vesting), the Company shall, subject to Section 7(b) herein, allot and issue or transfer to Employee one Share in settlement of such Awarded Restricted Stock Unit and such Awarded Restricted Stock Unit shall be canceled.
5.      No Rights as Shareholder
. Employee shall have no rights as a shareholder of the Company, including, without limitation, voting rights or the right to receive dividends and distributions as a shareholder, with respect to the Shares subject to the Awarded Restricted Stock Units, unless and until and to the extent such Shares are allotted and issued or transferred to Employee as provided herein.
6.      Dividend Equivalents . The Company hereby awards Dividend Equivalents to Employee with respect to the Awarded Restricted Stock Units. The Dividend Equivalents awarded to Employee under this Section 6 shall entitle Employee to the payment, with respect to each Share that is subject to an Awarded


Exhibit 10.3

Restricted Stock Unit that has not been canceled or forfeited, of an amount in cash equal to the amount of any cash dividend paid by the Company with respect to one Share while such Awarded Restricted Stock Unit remains outstanding. Such amount shall be paid to Employee by Employee’s employer or the Company-appointed transfer agent at the same time, and shall be subject to the same conditions, that are applicable to the Awarded Restricted Stock Units. Accordingly, the right to receive such Dividend Equivalent payments shall be forfeited to the extent that the Awarded Restricted Stock Units do not vest, are forfeited or are otherwise cancelled
7.      Arrangements and Procedures Regarding Nominal Value and Withholding Taxes .
(a)      Employee shall make arrangements satisfactory to the Committee for (i) the payment of the aggregate nominal value with respect to the Shares that are allotted and issued, transferred or delivered to or on behalf of Employee in settlement of Awarded Restricted Stock Units that have become vested and (ii) the payment of taxes of any kind that are required by law to be withheld with respect to the Awarded Restricted Stock Units or the Dividend Equivalents awarded under this Instrument, including, without limitation, taxes applicable to (x) the awarding of the Awarded Restricted Stock Units or the allotment and issuance or transfer of Shares in settlement thereof, or (y) the awarding of the Dividend Equivalents or the payments made with respect thereto.
(b)      Unless and until the Committee shall determine otherwise and provide notice to Employee in accordance with Section 7(c), any obligation of Employee under Section 7(a) that arises with respect to the allotment and issuance, transfer or delivery of Shares in settlement of Awarded Restricted Stock Units that have become vested may be satisfied, in accordance with procedures adopted by the Committee, by (i) Employee’s forfeiture or surrender of the right to require the Company to allot and issue, transfer or deliver Shares subject to such Awarded Restricted Stock Units, (ii) causing such Awarded Restricted Stock Units to be settled partly in cash or (iii) otherwise withholding a portion of such Shares. In the case of Shares as to which the right to require allotment and issuance, transfer or delivery is forfeited or surrendered pursuant to clause (i) and Shares withheld pursuant to clause (iii) such Shares or rights shall be valued at the Fair Market Value (of such Shares or the Shares to which such rights relate, as the case may be) as of the date on which the taxable event that gives rise to the withholding requirement occurs.
(c)      The Committee may determine, after the Effective Date and on notice to Employee, to authorize one or more arrangements (in addition to or in lieu of the arrangement described in Section 7(b)) satisfactory to the Committee for Employee to satisfy the obligation of Employee under Section 7(a).
(d)      If Employee does not, for whatever reason, satisfy the obligation of Employee under Section 7(a), then the Company and its Affiliates shall, to the extent permitted by law, have the right to deduct from any payments of any kind otherwise due to Employee the amount required to satisfy the obligation of Employee under such Section 7(a).
8.      Non-Assignability
This Instrument is not assignable or transferable by Employee. No right or interest of Employee under this Instrument or the Plan may be assigned, transferred or alienated, in whole or in part, either directly or by operation of law (except pursuant to a qualified domestic relations order within the meaning of Section 414(p) of the Code or a similar domestic relations order under applicable foreign law, either in such form as is acceptable to the committee), and no such right or interest shall be liable for or subject to any debt, obligation or liability of Employee.


Exhibit 10.3

9.      Defined Terms; Plan Provisions
Unless the context clearly indicates otherwise, the capitalized terms used (and not otherwise defined) in this Instrument shall have the meanings assigned to them under the provisions of the Plan. The Awarded Restricted Stock Units and the Dividend Equivalents subject to this Instrument shall be governed by and subject to all applicable provisions of the Plan. This Instrument is subject to the Plan, and the Plan shall govern where there is any inconsistency between the Plan and this Instrument.
10.      Governing Law
This Instrument shall be governed by and construed and enforced in accordance with the laws of the State of Texas, without regard to the principles of conflicts of laws thereof, except to the extent Texas law is preempted by federal law of the United States or by the laws of England and Wales.
11.      Binding Effect
This Instrument shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns.
12.      Prior Communications; Amendment
This Instrument, together with any Schedules and Exhibits and any other writings referred to herein or delivered pursuant hereto, evidences the Award granted hereunder, which shall be subject to the restrictions, terms and conditions hereof, and supersedes all prior agreements and understandings, whether written or oral, between the parties with respect to the subject matter hereof. To the fullest extent provided by applicable law, this Instrument may only be amended, modified and supplemented in accordance with the applicable terms and conditions set forth in the Plan.
13.      Notices
All notices and other communications hereunder shall be in writing and shall be deemed given if directed in the manner specified below, to the parties at the following addresses and numbers:
(a)      If to the Company, when delivered by hand, confirmed fax or mail (registered or certified mail with postage prepaid) to:
Noble Corporation plc
10 Brook Street
London W1S IBG, England
Attention: Corporate Secretary
Fax: 281 -596 - 4486
 
With a copy to:
 
Chairman of Compensation Committee
c/o Noble Corporation plc
10 Brook Street
London W1S IBG, England
Fax: 281 -596 - 4486



Exhibit 10.3

(b)      If to Employee, when delivered by hand, confirmed fax or mail (registered or certified mail with postage prepaid) to:

[The last known address and number for Employee
as maintained in the personnel records of the Company]

For purposes of this Section 13, the Company shall provide Employee with written notice of any change of the Company’s address, and Employee shall be responsible for providing the Company with proper notice of any change of Employee’s address pursuant to the Company’s personnel policies, and from and after the giving of such notice the address or addresses therein specified will be deemed to be the address of such party for the purposes of giving notice hereunder.
14.      Severability
If any provision of this Instrument is held to be unenforceable, this Instrument shall be considered divisible and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects the restrictions, terms and conditions set forth in this Instrument shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law.
15.      Descriptive Headings
The descriptive headings herein are inserted for convenience of reference only, do not constitute a part of this Instrument, and shall not affect in any manner the meaning or interpretation of this Instrument.
16.      Gender
Pronouns in masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.
17.      References
The words “this Instrument,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Instrument as a whole and not to any particular subdivision unless expressly so limited. Whenever the words “include,” “includes” and “including” are used in this Instrument, such words shall be deemed to be followed by the words “without limitation.”
18.      Unfunded Awards . The awards made under this Instrument are unfunded and unsecured obligations and rights to provide or receive compensation in accordance with the provisions hereof, and to the extent that Employee acquires a right to receive compensation from the Company or an Affiliate pursuant to this Instrument, such right shall be no greater than the right of any unsecured general creditor of the Company or such Affiliate.
19.      Compliance with Code Section 409A . The compensation payable to or with respect to Employee pursuant to the Awarded Restricted Stock Units is intended to be compensation that is not subject to the tax imposed by Code Section 409A, and this Instrument shall be administered and construed to the fullest extent possible to reflect and implement such intent.


Exhibit 10.3

IN WITNESS WHEREOF, the Company has signed and delivered this Instrument as of the date first above written.
NOBLE CORPORATION PLC


























Exhibit 10.3

SCHEDULE I
NOBLE CORPORATION
RESTRICTED PERIODS
FOR AWARD OF TIME-VESTED RESTRICTED STOCK UNITS
The Committee has determined that the following specified restricted time periods shall be applicable to the Awarded Restricted Stock Units awarded pursuant to the Instrument:
1.      Restricted Periods.

(i)
One-third of the Awarded Restricted Stock Units shall vest and no longer be subject to forfeiture on the first anniversary of the Effective Date; and

(ii)
One-third of the Awarded Restricted Stock Units shall vest and no longer be subject to forfeiture on the second anniversary of the Effective Date; and

(iii)
One-third of the Awarded Restricted Stock Units shall vest and no longer be subject to forfeiture on the third anniversary of the Effective Date.




Exhibit 10.4

Noble Corporation
Summary of Director Compensation

Annual Retainer . Noble Corporation plc, a company organized under the laws of England and Wales, (the “Company”) pays each of its non-employee directors an annual retainer of $50,000. Under the Noble Corporation plc 2017 Director Omnibus Plan (the “Director Plan”), non-employee directors may elect to receive up to all of the retainer in shares. The number of shares to be issued under the plan in any particular quarter is generally determined using the average of the high and low trading price on the date of grant.

Board Meeting Fees . In addition, the Company pays its non-employee directors a Board meeting fee of $2,000. The Company pays each member of its committees a committee meeting fee of $2,000 per in-person meeting and $1,000 per telephonic meeting. The Company also reimburses directors for travel, lodging and related expenses they may incur in attending Board and committee meetings, and related activities in connection with the duties as director.

Committee Fees . The chair of the audit committee and the compensation committee receives an annual retainer of $20,000, and the chair of each other standing Board committee receives an annual retainer of $10,000. The lead director also receives an annual fee of $22,500.

Equity Compensation . Under the Director Plan, each annually-determined award of a variable number of restricted shares or share units is made on a date selected by the Board, or if no such date is selected by the Board, the date on which the Board action approving such award is taken. The compensation committee has adopted a policy providing that all equity awards to directors under the Director Plan (other than shares issued to pay the quarterly retainer discussed above) will include a one-year vesting period.



EXHIBIT 31.1

Noble Corporation plc , a public limited company incorporated under the laws of England and Wales
Noble Corporation , a Cayman Islands company
I, Julie J. Robertson, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Noble Corporation plc and Noble Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
 
/s/ Julie J. Robertson
 
May 2, 2019
Julie J. Robertson
 
Date
Chairman, President and Chief Executive Officer of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, and President and Chief Executive Officer of Noble Corporation, a Cayman Islands company
 
 


EXHIBIT 31.2

Noble Corporation plc , a public limited company incorporated under the laws of England and Wales
Noble Corporation , a Cayman Islands company
I, Adam C. Peakes, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Noble Corporation plc and Noble Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
 
/s/ Adam C. Peakes
 
May 2, 2019
Adam C. Peakes
 
Date
Senior Vice President and Chief Financial Officer of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, and Director, Vice President and Chief Financial Officer of Noble Corporation, a Cayman Islands company
 
 



EXHIBIT 32.1

Noble Corporation plc , a public limited company incorporated under the laws of England and Wales
Noble Corporation , a Cayman Islands company
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble-UK”), and Noble Corporation, a Cayman Islands company (“Noble-Cayman”) on Form 10-Q for the period ended March 31, 2019 , as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), I, Julie J. Robertson, Chairman, President and Chief Executive Officer of Noble-UK and President and Chief Executive Officer of Noble-Cayman, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 2, 2019
/s/ Julie J. Robertson
 
Julie J. Robertson
 
Chairman, President and Chief Executive Officer of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, and President and Chief Executive Officer of Noble Corporation, a Cayman Islands company



EXHIBIT 32.2


Noble Corporation plc , a public limited company incorporated under the laws of England and Wales
Noble Corporation , a Cayman Islands company
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble-UK”), and Noble Corporation, a Cayman Islands company (“Noble-Cayman”) on Form 10-Q for the period ended March 31, 2019 , as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), I, Adam C. Peakes, Senior Vice President and Chief Financial Officer of Noble-UK and Director, Vice-President and Chief Financial Officer of Noble-Cayman, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 2, 2019
/s/ Adam C. Peakes
 
Adam C. Peakes
 
Senior Vice President and Chief Financial Officer of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, and Director, Vice President and Chief Financial Officer of Noble Corporation, a Cayman Islands company