<PAGE> 1
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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, 1995
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: 0-13857
NOBLE DRILLING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 73-0374541
(State of incorporation) (I.R.S. employer identification number)
10370 RICHMOND AVENUE, SUITE 400
HOUSTON, TEXAS 77042
(Address of principal executive offices) (Zip code)
Indicate by check mark whether the 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./x/Yes / / No
Number of shares of Common Stock outstanding as of May 2, 1995:
83,175,625
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<PAGE> 2
FORM 10-Q
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
---------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . $ 73,542 $ 95,163
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 933 898
Investment in marketable debt securities . . . . . . . . . . . . . . . . . . 43,858 39,673
Investment in marketable equity securities . . . . . . . . . . . . . . . . . 9,287 9,489
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,608 61,563
Costs of uncompleted contracts in excess of billings . . . . . . . . . . . . 1,126 841
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,590 14,008
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,067 18,584
---------- ---------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 228,011 240,219
---------- ---------
PROPERTY AND EQUIPMENT
Drilling equipment and facilities . . . . . . . . . . . . . . . . . . . . . . 814,804 804,445
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,418 20,461
---------- ---------
836,222 824,906
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . (340,484) (331,584)
---------- ---------
495,738 493,322
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,869 6,348
---------- ---------
$ 731,618 $ 739,889
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term debt and short-term debt . . . . . . . . . $ 3,700 $ 6,244
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,052 34,662
Accrued payroll and related costs . . . . . . . . . . . . . . . . . . . . . . 11,059 14,888
Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,611 12,972
Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,797 2,853
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 9,685 10,715
---------- ---------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 75,904 82,334
LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,546 126,546
OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,008 2,767
MINORITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405 631
---------- ---------
206,863 212,278
---------- ---------
SHAREHOLDERS' EQUITY
$2.25 Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,065 2,989
$1.50 Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,025 4,025
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,319 7,808
Capital in excess of par value . . . . . . . . . . . . . . . . . . . . . . . 588,699 590,733
Unrealized losses on marketable securities . . . . . . . . . . . . . . . . . (936) (1,847)
Minimum pension liability . . . . . . . . . . . . . . . . . . . . . . . . . . (3,825) (3,825)
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . (1,794) (2,325)
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (71,528) (68,197)
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . (270) (1,750)
---------- ---------
524,755 527,611
---------- ---------
COMMITMENTS AND CONTINGENCIES . . . . . . . . . . . . . . . . . . . . . . . . . - -
---------- ---------
$ 731,618 $ 739,889
========== =========
</TABLE>
See notes to interim financial statements.
2
<PAGE> 3
FORM 10-Q
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
--------------------------------
1995 1994
-------- --------
<S> <C> <C>
OPERATING REVENUES
Contract drilling services . . . . . . . . . . . . . . . . . . . . . . . . $ 53,932 $ 68,465
Labor contract drilling services . . . . . . . . . . . . . . . . . . . . . 10,590 9,073
Turnkey drilling services . . . . . . . . . . . . . . . . . . . . . . . . . 17,178 -
Engineering and consulting services . . . . . . . . . . . . . . . . . . . . 1,567 309
Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,829 1,074
-------- --------
85,096 78,921
-------- --------
OPERATING COSTS AND EXPENSES
Contract drilling services . . . . . . . . . . . . . . . . . . . . . . . . 36,119 42,475
Labor contract drilling services . . . . . . . . . . . . . . . . . . . . . 8,110 7,245
Turnkey drilling services . . . . . . . . . . . . . . . . . . . . . . . . . 16,377 -
Engineering and consulting services . . . . . . . . . . . . . . . . . . . . 1,457 258
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,688 601
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . 8,834 9,498
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . 10,556 8,519
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (58) (37)
-------- --------
83,083 68,559
-------- --------
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,013 10,362
OTHER INCOME (EXPENSE)
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,024) (3,000)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,492 1,160
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 578 1,143
-------- --------
INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 1,059 9,665
INCOME TAX PROVISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,720) (1,544)
-------- --------
NET (LOSS) INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (661) 8,121
PREFERRED STOCK DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . (2,670) (3,191)
-------- --------
NET (LOSS) INCOME APPLICABLE TO COMMON SHARES . . . . . . . . . . . . . . . . $ (3,331) $ 4,930
======== ========
NET (LOSS) INCOME APPLICABLE TO COMMON SHARES
PER SHARE (See Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . $ ( 0.06) $ 0.06
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING . . . . . . . . . . . . . . . . . 80,066 76,928
</TABLE>
See notes to interim financial statements.
3
<PAGE> 4
FORM 10-Q
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
--------------------------------
1995 1994
-------- --------
<S> <C> <C>
CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (661) $ 8,121
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . 8,834 9,498
Loss (gain) on sale of assets . . . . . . . . . . . . . . . . . . . . . . . 206 (74)
(Gain) loss on foreign exchange . . . . . . . . . . . . . . . . . . . . . . (494) 24
Deferred income tax (benefit) provision . . . . . . . . . . . . . . . . . . (682) 834
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 (31)
Changes in current assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . (994) (2,081)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,612) (3,874)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,472 553
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,736) 5,039
-------- --------
3,477 18,009
-------- --------
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
Purchase of property and equipment . . . . . . . . . . . . . . . . . . . . . (16,082) (8,886)
Proceeds from sale of property and equipment . . . . . . . . . . . . . . . . 70 135
Investment in marketable securities . . . . . . . . . . . . . . . . . . . . (3,274) (26,673)
Investment in unconsolidated affiliate . . . . . . . . . . . . . . . . . . . - (238)
-------- --------
(19,286) (35,662)
-------- --------
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
Payment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . - (6)
Dividends paid on preferred stock . . . . . . . . . . . . . . . . . . . . . (2,670) (3,191)
Issuance of common stock, net of Preferred Conversion Payment . . . . . . . (967) 249
Payment of short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . (2,544) -
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 4
-------- --------
(6,042) (2,944)
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH . . . . . . . . . . . . . . . . . . . 230 (653)
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . . (21,621) (21,250)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD . . . . . . . . . . . . . . . 95,163 69,177
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . . . . . . . . . . . $ 73,542 $ 47,927
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 15
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,494 $ 1,003
Noncash investing and financing activities:
Triton acquisition with common stock. . . . . . . . . . . . . . . . . . . . $ 1,500 $ -
</TABLE>
See notes to interim financial statements.
4
<PAGE> 5
FORM 10-Q
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
NOTE 1 - BASIS OF ACCOUNTING
The Consolidated Balance Sheet as of March 31, 1995 of Noble Drilling
Corporation ("Noble Drilling" or, together with its consolidated subsidiaries,
unless the context requires otherwise, the "Company"), the related Consolidated
Statements of Operations and Consolidated Statements of Cash Flows for the
three-month periods ended March 31, 1995 and 1994 are unaudited. In the opinion
of management, all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of such financial statements
have been included. These interim financial statements and notes are presented
in condensed form as permitted by Form 10-Q.
On September 15, 1994, the Company completed the merger of Chiles
Offshore Corporation ("Chiles") with a wholly owned subsidiary of Noble
Drilling (the "Chiles Merger"). The consolidated financial statements reflect
the restatement of the Company's historical financial statements to reflect the
Chiles Merger as a pooling of interests as of the beginning of the earliest year
presented.
Certain reclassifications have been made to the 1994 consolidated
financial statements to conform to the classifications used in the 1995
consolidated financial statements.
NOTE 2 -- CONVERSION OF $2.25 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
In March 1995, an aggregate of 923,862 shares of Noble Drilling's $2.25
Convertible Exchangeable Preferred Stock ("$2.25 Preferred Stock") were
converted into 5,006,830 shares of Noble Drilling common stock; 2,065,238
shares of the $2.25 Preferred Stock remain outstanding at March 31, 1995. The
Company paid an aggregate of approximately $1.5 million in cash in connection
with the conversion ("Preferred Conversion Payment").
NOTE 3 - CHANGE IN ACCOUNTING ESTIMATES
Effective January 1, 1995, the Company revised its estimates of salvage
values and remaining depreciable lives of certain rigs to better reflect their
economic lives and to be consistent with other similar assets owned by the
Company. The effect of this change in estimates was a decrease in the net loss
applicable to common shares for the three-month period ended March 31, 1995 of
$1.1 million, or $0.01 per share. If the change in estimates would have been
made on January 1, 1994, net income applicable to common shares for the
three-month period ended March 31, 1994 would have been increased by
approximately $800,000, or $0.01 per share.
NOTE 4 - NET (LOSS) INCOME APPLICABLE TO COMMON SHARES PER SHARE
Net (loss) income applicable to common shares per share has been computed
on the basis of the weighted average number of common shares and, where
dilutive, common share equivalents outstanding during the indicated periods.
Each outstanding share of the $2.25 Preferred Stock and $1.50 Convertible
Preferred Stock ("$1.50 Preferred Stock") was assumed to be converted into
5.41946 and 2.4446 shares of common stock, respectively, for purposes of
calculating fully diluted earnings per share. The calculation of net (loss)
income applicable to common shares per share assuming full dilution was
antidilutive; therefore, fully diluted amounts are not presented. The Preferred
Conversion Payment of approximately $1.5 million in March 1995 was accounted
for as a reduction of net earnings applicable to common shares for purposes of
calculating the net loss per common share. This accounting treatment increased
the net loss applicable to common shares per share from $0.04 to $0.06 for the
three-month period ended March 31, 1995.
NOTE 5 - MERGER AND ACQUISITION
The Chiles Merger was consummated on September 15, 1994, through the
exchange of 28,598,777 shares of Noble Drilling common stock for all the
outstanding shares of common stock of Chiles. In addition, 4,025,000 shares of
$1.50 Preferred Stock were issued at the time of the Chiles Merger and
exchanged for all of the outstanding shares of the Chiles $1.50 convertible
preferred stock. Noble Drilling also issued 480,000 shares of its common stock
in exchange for the cancellation of outstanding Chiles stock options. The
Chiles Merger was accounted for as a pooling of interests and all financial
information for the current and prior periods has been restated to reflect this
merger.
On April 22, 1994, the Company acquired all of the issued and outstanding
shares of common stock (the "Shares") of Triton Engineering Services Company
("Triton") pursuant to the terms of the Stock Purchase Agreement dated April
22, 1994
5
<PAGE> 6
FORM 10-Q
("Triton Acquisition"). In consideration for the Shares, the Company paid
approximately $4,085,000 in cash, issued promissory notes in the aggregate
amount of $4,000,000 and issued 751,864 shares of Noble Drilling common stock
valued at $5,169,000. The promissory notes were paid on October 21, 1994. In
addition, the Company has a contingent obligation on April 22, 1996 to pay
additional consideration in the form of Noble Drilling common stock, including
issuance of up to 254,551 shares of Noble Drilling common stock. At March 31,
1995, the Company has recorded a reserve of $1.5 million related to this
contingent obligation. The Triton Acquisition has been accounted for under the
purchase method, and accordingly, the operating results have been included in
the consolidated operating results since the date of acquisition.
The following table summarizes certain unaudited pro forma condensed
consolidated results of operations information that gives effect to the Triton
Acquisition as if this transaction had occurred on January 1, 1994.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, 1994
--------------
(UNAUDITED)
<S> <C>
Operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 105,056
Net income applicable to common shares . . . . . . . . . . . . . . . . . . $ 5,024
Net income applicable to common shares per share . . . . . . . . . . . . . $ 0.06
</TABLE>
NOTE 6 - MARKETABLE SECURITIES
During 1994, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." Under the provisions of SFAS No. 115, investments in debt
and equity securities are required to be classified into one of three
categories: held to maturity, available for sale or trading securities. At each
reporting date, the appropriateness of such classification is required to be
reassessed.
As of March 31, 1995, the Company classified all of its debt securities,
with original maturities of three months or more, as available for sale. These
investments are classified as marketable securities within current assets on the
accompanying consolidated balance sheets. The following table highlights
information applicable to the Company's investments classified as available for
sale as of March 31, 1995:
<TABLE>
<CAPTION>
NET
AMORTIZED UNREALIZED
DEBT SECURITY/MATURITY COST FAIR VALUE LOSSES
----------------------------------------------- --------- ---------- ----------
<S> <C> <C> <C>
Corporate Obligations
Mature within 1 year . . . . . . . . . . . . . $ 15,172 $ 15,177 $ 5
Mature after 1 year through 3 years . . . . . 5,185 5,088 (97)
-------- -------- ------
20,357 20,265 (92)
-------- -------- ------
U.S. Government Obligations:
Mature within 1 year . . . . . . . . . . . . . 10,753 10,475 (278)
Mature after 1 year through 3 years . . . . . 13,684 13,118 (566)
-------- -------- ------
24,437 23,593 (844)
-------- -------- ------
Total $ 44,794 $ 43,858 $ (936)
======== ======== ======
</TABLE>
An allowance for unrealized losses has been included as a reduction of
shareholders' equity. Total realized losses related to short-term investments
for the three-month period ended March 31, 1995 amounted to $22,000.
The Company categorizes its investments in marketable equity securities
of $9.3 million as trading securities and such investments are classified as
current assets and are recorded at fair value at March 31, 1995. Total net
unrealized losses related to these equity investments for the three-month period
ended March 31, 1995 were $202,000.
6
<PAGE> 7
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
THE COMPANY
The Company's offshore fleet at March 31, 1995 consisted of 44 rigs,
comprising 32 jackup drilling rigs, eight submersible rigs and four posted
barges. The offshore fleet is currently diversified geographically as follows:
U.S. Gulf - 29 rigs; Mexican Gulf - two rigs; West Africa - eight rigs;
Venezuela - four rigs; and India - one rig. The Company's offshore operations
also include labor contracts for drilling and workover activities covering 14
rigs operating in the U.K. North Sea and one rig operating in the Middle East.
These rigs are not owned or leased by the Company. Through its wholly owned
subsidiary, Triton Engineering Services Company ("Triton"), the Company provides
turnkey drilling services and other engineering and consulting services for the
oil and gas industry. The Company's land drilling operations are conducted
principally in Canada, Texas and Louisiana with an active fleet of 19 land
drilling rigs. As used herein, "Noble Drilling" refers to Noble Drilling
Corporation and the "Company" refers to Noble Drilling and its consolidated
subsidiaries unless the context requires otherwise.
INDUSTRY CONDITIONS AND RISKS
The Company's operating strategy has been to pursue drilling
opportunities in the U.S. and in certain international markets. Worldwide
drilling conditions vary substantially from region to region; however, the
Company operates in most markets where there is a demand for offshore drilling
rigs.
During late 1992, U.S. natural gas prices improved, resulting in greater
demand and higher dayrates for drilling rigs. Increasing U.S. natural gas
prices resulted in significant improvements in the U.S. Gulf of Mexico ("U.S.
Gulf") rig demand and dayrates during the second half of 1993. Declining world
oil prices during this period reduced rig demand outside the U.S. Gulf. As a
result of declining international rig demand and improved market conditions in
the U.S. Gulf, certain contractors mobilized rigs from international markets to
the U.S. Gulf in late 1993 and early 1994. The increased supply of drilling rigs
in the U.S. Gulf more than offset the increased level of U.S. Gulf rig demand
during 1994 and the first quarter of 1995, causing dayrates to deteriorate. The
average dayrate charged by the Company in the first quarter of 1995 in the U.S.
Gulf was 16 percent lower than the average dayrate charged by the Company in the
first quarter of 1994. If the price of natural gas, which has increased slightly
in recent months, remains at current levels indefinitely, the Company's dayrates
and utilization rates in the U.S. Gulf could be adversely affected. The Company
also believes that, absent an improvement in rig demand outside the U.S. Gulf,
the supply of rigs in the U.S. Gulf could continue to cause pressure on dayrates
and utilization levels of the Company's rig fleet through 1995. The Company can
predict neither the future level of demand for its drilling services nor the
future conditions in the offshore contract drilling industry.
A major portion of the Company's revenues has been attributable to
international operations. Revenues from international sources accounted for
approximately 52 percent and 48 percent, respectively, of the Company's
operating revenues for the three-month period ended March 31, 1995 and the year
ended December 31, 1994.
Currently, the Company has four offshore drilling rigs under contract and
three offshore drilling rigs available for bidding in Nigeria. The Company
maintains war and political risk insurance (covering physical damage or loss up
to the insured value of each rig), subject, in the case of certain coverages, to
immediate termination upon certain events or upon termination by the underwriter
on seven days' notice. Revenues from drilling activities in Nigeria accounted
for approximately 10 percent and 13 percent, respectively, of the Company's
operating revenues for the three-month period ended March 31, 1995 and the year
ended December 31, 1994, respectively. Recently, the Company has been able to
secure new drilling contracts for offshore Nigeria. No assurance can be given
that the political and economic climate in Nigeria will remain stable or that it
will not worsen.
The Company began to operate in Venezuela in late 1993. The Company
currently has four jackup rigs working for Lagoven, a subsidiary of the
government-owned oil company of Venezuela, under well-to-well contracts. The
four rigs had been under long-term contracts with Lagoven which expired in the
first quarter of 1995. Negotiations are currently underway to renew contracts
for two of the rigs under an alliance program with Lagoven, and the remaining
two rigs are being actively bid by the Company in Venezuela. In recent periods,
the Venezuelan economy has experienced high inflation and a shortage of foreign
currency. During a banking crisis in July 1994, the Venezuelan government
imposed a program of currency exchange controls and taxes on certain financial
transactions that temporarily limited the ability of the government-owned oil
companies and their affiliates to make payment in U.S. dollars or other hard
currencies to oilfield service contractors. The Company's operations have not
been materially affected, and the Company continues to receive timely
7
<PAGE> 8
FORM 10-Q
payment for its services in U.S. dollars. Although timely U.S. dollar payments
are currently being made to the Company, future exchange control actions of the
Venezuelan government could adversely affect the Company's operations in
Venezuela. Revenues from drilling activities in Venezuela accounted for
approximately 10 percent of the Company's operating revenues for each of the
three-month period ended March 31, 1995 and the year ended December 31, 1994.
The Company currently has one rig stacked and one rig working under
contract offshore Mexico in the Bay of Campeche. Although the Company's
Mexican drilling contracts require payment in U.S. dollars, the level of
drilling activity and the ability of Mexican parties to meet these obligations
are affected by the strength of the local currency. In late December 1994, the
Mexican government devalued its currency by approximately 45 percent. The
Mexican new peso further declined in the first quarter of 1995; however, it has
strengthened slightly in recent weeks. Revenues from drilling activities in
Mexico accounted for approximately five percent and six percent, respectively,
of the Company's operating revenues for the three-month period ended March 31,
1995 and the year ended December 31, 1994, and the Company has not to date
experienced any defaults under its Mexican drilling contracts. At this time, it
is not known whether the currency situation in Mexico will cause delays in the
renewal of existing contracts or the execution of new drilling contracts for
offshore Mexico. No assurance can be given that the economic climate in Mexico
will improve or that it will not worsen.
SELECTED FINANCIAL INFORMATION
The following table sets forth selected consolidated financial
information of the Company expressed as a percentage of total operating revenues
for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1995 1994
------ ------
<S> <C> <C>
Operating revenues
Contract drilling services
International offshore . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.7 % 34.6 %
Domestic offshores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.7 41.6
International land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0 7.7
Domestic land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 2.8
Labor contract drilling services . . . . . . . . . . . . . . . . . . . . . . . 12.4 11.5
Turnkey drilling services 20.2 -
Engineering and consulting services . . . . . . . . . . . . . . . . . . . . . 1.8 .4
Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 1.4
------ ------
100.0 100.0
Operating costs (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (74.9) (64.1)
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . (10.4) (12.0)
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . (12.4) (10.8)
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . .1 -
------ ------
Operating incomepe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 13.1
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.6) (3.8)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 1.5
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 1.4
------ ------
Income before income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 12.2
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.0) (2.0)
------ ------
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.7) 10.2
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.1) (4.0)
------ ------
Net (loss) income applicable to common shares . . . . . . . . . . . . . . . . . (3.8)% 6.2 %
====== ======
</TABLE>
- -------------------
(1) Consists of operating costs and expenses other than depreciation and
amortization, selling, general and administrative, and minority interest.
8
<PAGE> 9
FORM 10-Q
RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
OPERATIONAL REVIEW. During the three-month period ended March 31, 1995
(the "Current Quarter"), the Company generated operating revenues of $85.1
million compared to $78.9 million during the three-month period ended March 31,
1994 (the "Comparable Quarter"). The increase in operating revenues was
primarily due to the operations of Triton, which was acquired in April 1994,
partially offset by a decrease in offshore domestic contract drilling services
revenues. Revenues in the Current Quarter for the domestic offshore contract
drilling operations decreased by $11.8 million due principally to fewer
operating days and a 16 percent decrease in the average dayrate as compared to
the Comparable Quarter. Revenues in the Current Quarter for the international
offshore contract drilling operations decreased by $3.8 million due principally
to fewer operating days and an eight percent decrease in the average dayrate as
compared to the Comparable Quarter.
The utilization rate for the Company's domestic offshore rig fleet was 81
percent in the Current Quarter compared to 73 percent in the Comparable
Quarter. The Company's international offshore rig utilization rate decreased to
80 percent during the Current Quarter from 84 percent in the Comparable
Quarter. At March 31, 1995, the Company had 15 labor contracts on
operator-owned rigs in its international operations, unchanged from
March 31, 1994. The Company's domestic land rig utilization rate was 56
percent in the Current Quarter as compared to 47 percent in the Comparable
Quarter. The utilization rate for the Company's international land rig fleet
was 94 percent in the Current Quarter compared to 80 percent in the Comparable
Quarter.
Gross margins from offshore contract drilling operations were $15.2
million, or 34 percent of offshore contract drilling revenues, in the Current
Quarter as compared to $24.1 million, or 40 percent of offshore drilling
revenues, in the Comparable Quarter. The decrease in gross margins was
principally due to fewer operating days and lower average dayrates from the
domestic offshore contract drilling operations as discussed above. Labor
contract gross margins were $2.5 million, or 23 percent of labor contract
revenues, in the Current Quarter compared to $1.8 million, or 20 percent of
labor contract revenues, in the Comparable Quarter. Land drilling operation
gross margins were $2.6 million, or 28 percent of land contract drilling
revenues, in the Current Quarter, compared to $1.9 million, or 23 percent of
land contract drilling revenues, in the Comparable Quarter. Turnkey drilling
operation gross margins were $117,000 or 1 percent of turnkey drilling
revenues, in the Current Quarter as a result of approximately $3.5 million of
losses incurred on completed wells and known losses on uncompleted wells due to
well-control problems.
DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization
expenses were $8.8 million in the Current Quarter as compared to $9.5 million
in the Comparable Quarter, a decrease of $700,000. In the first quarter of
1995, estimated salvage values and remaining depreciable lives of certain rigs
were adjusted to better reflect their remaining economic lives and to be
consistent with other similar assets held by the Company. The effect of this
change in accounting estimates was a decrease to the Current Quarter net loss
applicable to common shares of approximately $1.1 million, or $0.01 per share.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses were $10.6 million in the Current Quarter
compared to $8.5 million in the Comparable Quarter. The increase in SG&A
expenses was principally attributable to the SG&A expenses from the Triton
operation.
INTEREST INCOME (EXPENSE). Interest expense, net of interest income, was
$1.5 million in the Current Quarter compared to $1.8 million in the Comparable
Quarter. This decrease was principally due to the higher interest rates the
Company obtained on cash and marketable debt security investments in the
Current Quarter.
OTHER, NET. Other, net was $578,000 in the Current Quarter as compared to
$1.1 million in the Comparable Quarter. The decrease in other, net was
primarily due to an insurance recovery of $807,000 the Company received in the
Comparable Quarter.
9
<PAGE> 10
FORM 10-Q
LIQUIDITY AND CAPITAL RESOURCES
OVERVIEW
The Company had working capital of $152.1 million and $157.9 million as
of March 31, 1995 and December 31, 1994, respectively. The decrease in working
capital was primarily due to increased capital expenditures during the Current
Quarter. The ratio of current assets to current liabilities at March 31, 1995
was 3.00:1 as compared to 2.92:1 at December 31, 1994. The ratio of long-term
debt to total debt plus shareholders' equity was 0.19:1 at March 31, 1995,
unchanged from December 31, 1994.
At March 31, 1995, the Company had cash, cash equivalents, restricted
cash and investments in marketable debt securities of $118.3 million and $26.0
million of funds available under various lines of credit. The Company expects
to generate positive cash flow from operations for the remainder of 1995 and
the first three months of 1996, assuming no material decrease in demand for
contract drilling and turnkey services. The Company will continue to have cash
requirements for debt principal and interest payments and preferred dividends,
when and if declared. For the remainder of 1995 and the first three months of
1996, debt principal and interest payments are estimated to be approximately
$15.4 million. Cumulative dividends on the $2.25 Preferred Stock and $1.50
Preferred Stock for the remainder of 1995 and the first three months of 1996
are approximately $4.6 million and $6.1 million, respectively, for aggregate
dividends of approximately $10.7 million. The Company expects to fund these
obligations, totaling $26.1 million, out of cash and short-term investments as
well as cash expected to be provided by operations.
Capital expenditures for the remainder of 1995 and the first three months
of 1996 are planned to aggregate approximately $65 million, of which the
majority are discretionary and relate to upgrades of equipment which management
considers desirable to improve the marketability of the fleet, but which could
be deferred if necessary. These capital expenditures will be funded from
operating cash flows to the extent available, existing cash balances and/or
with available lines of credit.
CREDIT FACILITIES AND LONG-TERM DEBT
At March 31, 1995, the Company had lines of credit totaling $26.0 million
and letter of credit facilities totaling $5.7 million subject to the Company's
maintenance of certain levels of collateral. Based on levels of collateral at
March 31, 1995, the Company had $26.0 million available under these lines of
credit and $2.7 million available to support the issuance of letters of credit.
In connection with the initial construction of the NN-1, the predecessor
of NN-1 Limited Partnership issued U.S. Government Guaranteed Ship Financing
Sinking Fund Bonds, of which $2.1 million was outstanding at March 31, 1995.
Interest and principal is payable semi-annually on June 15 and December 15 of
each year with interest at 8.95 percent, and the bonds mature in 1998. The
bonds are secured by the vessel, and the applicable security agreement contains
certain restrictions, among others, on distributions to partners, dispositions
of assets, and the provision of services to related parties. In addition, there
are minimum working capital, net worth and long-term debt to net worth
requirements applicable to NN-1 Limited Partnership. The Company's sharing
percentage in NN-1 Limited Partnership's distributions from operations is
generally 90 percent.
In 1993, the Company issued $125,000,000 aggregate principal amount of
9 1/4% Senior Notes Due 2003 (the "Senior Notes"). The Senior Notes will mature
on October 1, 2003. Interest on the Senior Notes is payable semi-annually on
April 1 and October 1 of each year. The Senior Notes are redeemable at the
option of the Company, in whole or in part, on or after October 1, 1998 at
103.47 percent of principal amount, declining ratably to par on or after
October 1, 2001, plus accrued interest. Mandatory sinking fund payments of 25
percent of the original principal amount of the Senior Notes at par plus
accrued interest will be required on October 1, 2001 and October 1, 2002. The
indenture governing the Senior Notes contains certain restrictive covenants,
including limitations on additional indebtedness and the ability to secure such
indebtedness; restrictions on dividends and certain investments; and
limitations on sale of assets, sales and leasebacks, transactions with
affiliates, and mergers or consolidations.
10
<PAGE> 11
FORM 10-Q
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of stockholders of Noble Drilling was held in
Houston, Texas, at 10:00 a.m., local time, on April 27, 1995.
(b) Proxies were solicited by the Board of Directors of Noble Drilling
pursuant to Regulation 14A under the Securities Exchange Act of 1934.
There was no solicitation in opposition to the Board of Directors'
nominees as listed in the proxy statement and all of such nominees
were duly elected.
(c) Out of a total of 79,100,802 shares of Noble Drilling common stock
outstanding and entitled to vote, 68,004,158 shares were present in
person or by proxy, representing approximately 86 percent. The only
matter voted on by the stockholders, as fully described in the proxy
statement for the annual meeting, was the nomination of Michael A.
Cawley, Tommy C. Craighead and James L. Fishel to serve three-year
terms on the Board of Directors of Noble Drilling. The results of
voting were as follows:
<TABLE>
<CAPTION>
Number of Shares Number of Shares
Voting FOR Election WITHHOLDING AUTHORITY to Vote
Nominee for Director as Director for Election as Director
------------------------------------------------- ------------------- -----------------------------
<S> <C> <C>
Michael A. Cawley 67,221,100 783,058
Tommy C. Craighead 67,185,743 818,415
James L. Fishel 67,267,711 736,447
</TABLE>
(d) Inapplicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The information required by this Item 6(a) is set forth in the Index
to Exhibits accompanying this quarterly report and is incorporated
herein by reference.
(b) No report on Form 8-K was filed by the Company during the quarter ended
March 31, 1995.
11
<PAGE> 12
FORM 10-Q
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 DRILLING CORPORATION
DATE: May 5, 1995 /s/ JAMES C. DAY
-------------------------------------
JAMES C. DAY, Chairman, President and
Chief Executive Officer
DATE: May 5, 1995 /s/ BYRON L. WELLIVER
-------------------------------------
BYRON L. WELLIVER,
Senior Vice President-Finance,
Treasurer and Controller
(Principal Financial and Accounting
Officer)
12
<PAGE> 13
FORM 10-Q
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- -------- ----------------------------------------------------------------------------------------------
<S> <C>
Exhibit 3.1 - Certificate of Amendment of Certificate of Incorporation of the Registrant dated September 15,
1994.
Exhibit 10.1 - Amendment No. 5 to the Noble Drilling Corporation Thrift Plan dated effective as of May 1,
1995.
Exhibit 10.2 - Noble Drilling Corporation Retirement Restoration Plan dated April 27, 1995.
Exhibit 27 - Financial Data Schedule.
</TABLE>
<PAGE> 1
EXHIBIT 3.1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "NOBLE DRILLING CORPORATION", FILED IN THIS OFFICE ON THE
FIFTEENTH DAY OF SEPTEMBER, A.D. 1994, AT 11:45 O'CLOCK A.M.
[SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
[SEAL] Edward J. Freel, Secretary of State
AUTHENTICATION: 7240345
DATE: 09-15-94
<PAGE> 2
EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
NOBLE DRILLING CORPORATION
Noble Drilling Corporation (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "General Corporation Law"), hereby certifies as follows:
FIRST: That the Board of Directors of the Corporation, at a meeting
duly called and held on June 9, 1994, adopted the following resolutions
proposing and declaring advisable an amendment (the "Amendment") to the
Restated Certificate of Incorporation (the "Certificate of Incorporation") of
the Corporation and calling for the submission of the Amendment to the
stockholders of the Corporation entitled to vote in respect thereof for their
consideration:
"RESOLVED, that the Board of Directors hereby
declares it advisable and in the best interests of the Corporation and
its stockholders to amend the Certificate of Incorporation by deleting
Article IV, Section 1 thereof in its entirety and substituting
therefor the following:
"Section 1. The total number of shares of all
classes of stock which the Corporation shall have authority to
issue is 215,000,000, consisting of (1) 15,000,000 shares of
Preferred Stock, par value $1.00 per share ("Preferred
Stock"), and (2) 200,000,000 shares of Common Stock, par value
$.10 per share ("Common Stock")."
RESOLVED FURTHER, that the Board of Directors hereby directs
that the foregoing amendment to Article IV of the Certificate of
Incorporation be submitted to the stockholders of the Corporation for
their adoption and recommends that the stockholders of the Corporation
adopt such amendment."
SECOND: That at a special meeting of stockholders of the Corporation
entitled to vote on the Amendment duly called and held on September 15, 1994,
such stockholders adopted the Amendment.
THIRD: That the Amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the General Corporation Law.
This Amendment shall become effective at 2:00 p.m., Eastern Daylight
Savings Time, on September 15, 1994.
IN WITNESS WHEREOF, this Amendment has been signed on behalf of the
Corporation by its Chairman of the Board, President and Chief Executive Officer
as of the 15th day of September, 1994.
NOBLE DRILLING CORPORATION
By: /s/ JAMES C. DAY
-------------------------------
JAMES C. DAY
Chairman of the Board,
President and Chief Executive
Officer
<PAGE> 1
EXHIBIT 10.1
AMENDMENT NO. 5 TO THE
NOBLE DRILLING CORPORATION THRIFT PLAN
Pursuant to the provisions of Section 13.1 thereof, the Noble Drilling
Corporation Thrift Plan, as amended and restated effective as of August 1,
1989, is hereby amended by restating the first sentence of Section 2.9 thereof
in its entirety to read as follows:
"Compensation" shall mean the total taxable income of a Participant
paid by the Company with respect to a given Plan Year, exclusive of
overtime (other than overtime paid to Participants who are field
hourly Employees), bonuses, allowances, commissions, deferred
compensation payments and any other extraordinary remuneration,
increased by the Participant's Salary Reduction Savings, if any, and
any salary reduction amounts elected by the Participant for the
purchase of benefits pursuant to a cafeteria plan (within the meaning
of Section 125(d) of the Code).
IN WITNESS WHEREOF, this Amendment has been executed this 27th day of
April, 1995, to be effective as of May 1, 1995.
NOBLE DRILLING CORPORATION
By /s/ JAMES C. DAY
------------------------------
Name: James C. Day
Title: Chairman of the Board,
President and Chief
Executive Officer
-1-
<PAGE> 1
EXHIBIT 10.2
NOBLE DRILLING CORPORATION
RETIREMENT RESTORATION PLAN
THIS RETIREMENT RESTORATION PLAN, made and executed at Houston, Texas,
by NOBLE DRILLING CORPORATION, a Delaware corporation (the "Company"),
WITNESSETH THAT:
WHEREAS, the Company has heretofore established for the benefit of its
employees a qualified defined benefit pension plan known as the Noble Drilling
Corporation Salaried Employees' Retirement Plan (the "Retirement Plan"); and
WHEREAS, the Company has heretofore participated in an unfunded excess
benefit plan established by Noble Affiliates, Inc. known as the Restoration of
Retirement Income Plan for Certain Participants in the Noble Affiliates
Retirement Plan (the "Prior Plan"); and
WHEREAS, the Company now desires to terminate its participation in the
Prior Plan and to establish a separate unfunded nonqualified retirement plan to
supplement the benefits payable under the Retirement Plan to certain key
employees of the Company and its participating affiliates whose benefits
otherwise payable under the Retirement Plan have been reduced because of the
maximum compensation and maximum benefit limitations imposed under the
Retirement Plan in order to comply with the requirements of the Internal
Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the premises the Company hereby
terminates its participation in the Prior Plan and establishes a supplemental
retirement plan to provide benefits and be administered in accordance with the
following:
Section 1. Definitions. Unless the context clearly indicates
otherwise, when used in this Plan:
(a) "Code" means the Internal Revenue Code of 1986,
as amended.
(b) "Committee" means the committee designated pursuant
to Plan Section 3 to administer this Plan.
(c) "Company" means Noble Drilling Corporation, a
Delaware corporation.
(d) "Employer" includes the Company and any other
incorporated or unincorporated organization which may adopt both the
Retirement Plan and this Plan.
(e) "Participant" means any employee of an Employer (i)
who is a participant in the Retirement Plan, and (ii) whose annual
base salary from an Employer is at least $150,000.
(f) "Plan" means this Noble Drilling Corporation
Retirement Restoration Plan as in effect from time to time.
(g) "Retirement Plan" means the Noble Drilling
Corporation Salaried Employees' Retirement Plan as in effect from time
to time.
<PAGE> 2
Section 2. Nature of Plan. This Plan is an unfunded plan maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees and does not qualify under the
provisions of Section 401 of the Code.
Section 3. Plan Administration. This Plan shall be administered by
the Committee appointed to administer the Retirement Plan. The Committee shall
have discretionary and final authority to interpret and implement the
provisions of the Plan, including without limitation, authority to determine
eligibility for benefits under the Plan. The Committee shall act by a majority
of its members at the time in office and such action may be taken either by a
vote at a meeting or in writing without a meeting. The Committee may adopt
such rules and procedures for the administration of the Plan as are consistent
with the terms hereof and shall keep adequate records of its proceedings and
acts. Every interpretation, choice, determination or other exercise by the
Committee of any power or discretion given either expressly or by implication
to it shall be conclusive and binding upon all parties having or claiming to
have an interest under the Plan or otherwise directly or indirectly affected by
such action, without restriction, however, on the right of the Committee to
reconsider and redetermine such action. The Employers shall indemnify and hold
harmless each member of the Committee and each director, officer and employee
of an Employer against any claim, cost, expense (including attorneys' fees),
judgment or liability (including any sum paid in settlement of a claim with the
approval of the Company) arising out of any act or omission to act as a member
of the Committee or any other act or omission to act relating to this Plan,
except in the case of such person's fraud or willful misconduct.
Section 4. Amount of Benefits. If a Participant or beneficiary of a
Participant receives or commences receiving benefits under the Retirement Plan,
then such Participant or beneficiary shall be entitled to receive benefits
under this Plan which are actuarially equivalent to the excess, if any, of:
(a) the value of the benefits which would have been
payable to such Participant or beneficiary under the Retirement Plan
if the provisions of the Retirement Plan were administered without
regard to (i) the maximum amount of compensation limitation imposed
under the Retirement Plan in order to comply with Section 401(a)(17)
of the Code, and (ii) the maximum amount of retirement income
limitation imposed under the Retirement Plan in order to comply with
Section 415 of the Code, over
(b) the value of the benefits which are actually payable
to such Participant or beneficiary under the provisions of the
Retirement Plan.
For purposes of this Plan, the value of benefits and the amounts payable under
alternate forms of benefits shall be determined using the actuarial assumptions
being used under the Retirement Plan for such purposes.
Section 5. Payment of Benefits. The benefits payable to a Participant
or beneficiary of a Participant under this Plan shall be paid or commence being
paid, as the case may be, concurrently with the payment or the commencement of
the payment of benefits to such Participant or beneficiary under the Retirement
Plan, and shall be paid to such Participant or beneficiary in such form
available under the Retirement Plan as shall be selected by the Committee in
its absolute discretion.
Section 6. Source of Benefits. All benefits payable under this Plan
to or with respect to a Participant who was an employee of an Employer shall be
paid from the general assets of such Employer. If the benefits payable to or
with respect to a Participant under this Plan are
<PAGE> 3
attributable to periods of employment with more than one Employer, the amount
payable to or with respect to such Participant shall be apportioned among and
paid by the Employers who employed such Participant in such proportions as
shall be determined by the Committee in its absolute discretion. No provision
of this Plan shall be deemed or construed to create a trust fund of any kind or
to grant to any Participant or beneficiary of a Participant any property right
or beneficial ownership interest of any kind in the assets of an Employer. To
the extent that any Participant or beneficiary of a Participant acquires a
right to receive payments from an Employer pursuant to this Plan, such right
shall be no greater than the right of any unsecured general creditor of such
Employer.
Section 7. Amendment and Termination. The Board of Directors of the
Company shall have the right and power at any time and from time to time to
amend this Plan, in whole or in part, on behalf of all Employers, and at any
time to terminate this Plan or any Employer's participation hereunder. Any
amendment to or termination of this Plan shall be made by or pursuant to a
resolution duly adopted by the Board of Directors of the Company, and shall be
evidenced by such resolution or by a written instrument executed by such person
as the Board of Directors of the Company shall authorize for such purpose. Any
provision of this Plan to the contrary notwithstanding, no amendment to or
termination of this Plan shall reduce or eliminate an Employer's obligation for
the payment of benefits accrued under this Plan as of the date of such
amendment or termination, such benefits to be determined as if the Retirement
Plan had terminated on such date.
Section 9. Spendthrift Provision. No right or interest under this
Plan of a Participant or beneficiary of a Participant may be assigned,
transferred or alienated, in whole or in part, either directly or by operation
of law, and no such right or interest shall be liable for or subject to any
debt, obligation or liability of such Participant or beneficiary.
Section 10. Employment Noncontractual. The establishment of this
Plan shall not enlarge or otherwise affect the terms of any Participant's
employment with an Employer, and such Employer may terminate the employment of
such Participant as freely and with the same effect as if this Plan had not
been established.
Section 11. Adoption by Other Employers. This Plan may be adopted by
any Employer participating in the Retirement Plan, such adoption to be
effective as of the date specified by such Employer at the time of adoption.
Section 12. Claims Procedure. If any person (hereinafter called the
"Claimant") feels that he or she is being denied a benefit to which he or she
is entitled under this Plan, such Claimant may file a written claim for said
benefit with the Committee. Within sixty days following the receipt of such
claim the Committee shall determine and notify the Claimant as to whether he or
she is entitled to such benefit. Such notification shall be in writing and, if
denying the claim for benefit, shall set forth the specific reason or reasons
for the denial, make specific reference to the pertinent provisions of this
Plan, and advise the Claimant that he or she may, within sixty days following
the receipt of such notice, in writing request to appear before the Committee
or its designated representative for a hearing to review such denial. Any such
hearing shall be scheduled at the mutual convenience of the Committee or its
designated representative and the Claimant, and at any such hearing the
Claimant and/or his or her duly authorized representative may examine any
relevant documents and present evidence and arguments to support the granting
of the benefit being claimed. The final decision of the Committee with respect
to the claim being reviewed shall be made within sixty days following the
hearing thereon, and the Committee shall in writing notify the Claimant of said
final decision, again specifying the reasons therefor and the pertinent
provisions of this Plan upon
<PAGE> 4
which said final decision is based. The final decision of the Committee shall
be conclusive and binding upon all parties having or claiming to have an
interest in the matter being reviewed.
Section 13. Applicable Law. This Plan shall be governed and
construed in accordance with the internal laws (and not the principles relating
to conflicts of laws) of the State of Texas, except where superseded by federal
law.
IN WITNESS WHEREOF, this Plan has been executed on this 27th day of
April, 1995.
NOBLE DRILLING CORPORATION
By /s/ JAMES C. DAY
-----------------------------------
Name: James C. Day
Title: Chairman of the Board,
President and Chief
Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-30-1995
<CASH> 74,475
<SECURITIES> 53,145
<RECEIVABLES> 64,608
<ALLOWANCES> 0
<INVENTORY> 14,590
<CURRENT-ASSETS> 228,011
<PP&E> 836,222
<DEPRECIATION> (340,484)
<TOTAL-ASSETS> 731,618
<CURRENT-LIABILITIES> 75,904
<BONDS> 126,546
<COMMON> 8,319
0
6,090
<OTHER-SE> 510,346
<TOTAL-LIABILITY-AND-EQUITY> 731,618
<SALES> 85,096
<TOTAL-REVENUES> 85,096
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<OTHER-EXPENSES> 19,332
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<INTEREST-EXPENSE> (3,024)
<INCOME-PRETAX> 1,059
<INCOME-TAX> (1,720)
<INCOME-CONTINUING> (3,331)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,331)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> .00
</TABLE>
