EX-99.1 2 h88665a1ex99-1.txt FINANCIAL STATEMENT 1 EXHIBIT 99.1 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE DECEMBER 31, 2000 AND 1999 2 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE --------------------------------------------------------------------------------
PAGE Report of Independent Accountants 1 Financial Statements: Statements of net assets available for benefits at December 31, 2000 and 1999 2 Statements of changes in net assets available for benefits for the years ended December 31, 2000 and 1999 3 Notes to financial statements 4 - 10 Supplemental Schedule*: Form 5500 - Schedule of Assets (Held At End of Year) (Schedule I) 11
* Other schedules required by Section 2520.103-10 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted since they are not applicable. 3 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and the Employee Benefits Committee of the Noble Drilling Corporation 401(k) Savings Plan In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Noble Drilling Corporation 401(k) Savings Plan (the Plan) at December 31, 2000 and 1999, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets (Held At End of Year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. PRICEWATERHOUSECOOPERS LLP Houston, Texas June 8, 2001 4 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2000 AND 1999 --------------------------------------------------------------------------------
December 31, ---------------------------------- 2000 1999 Assets: Investments, at fair value: Noble Drilling Corporation common stock $ 21,623,247 $ 18,853,988 Collective Investment Fund 4,049,511 3,106,013 Mutual funds 15,020,843 12,224,233 Contributions receivable: Participants 429,882 298,385 Noble Drilling Corporation 223,282 164,076 Dividends and interest receivable 25,395 7,996 Participant loans 1,637,842 1,106,274 Loan interest receivable 11,932 6,813 ------------ ------------ 43,021,934 35,767,778 Liabilities: Trust fees payable 13,030 11,839 ------------ ------------ Net assets available for benefits $ 43,008,904 $ 35,755,939 ============ ============
The accompanying notes are an integral part of these financial statements. - 2 - 5 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED DECEMBER 31, 2000 AND 1999 --------------------------------------------------------------------------------
2000 1999 Additions attributed to: Interest and dividend income $ 2,026,133 $ 720,489 Net appreciation on investments 3,391,926 13,625,751 Contributions: Participants 4,329,001 3,596,764 Employer 1,740,805 1,750,634 ------------ ------------ Total additions 11,487,865 19,693,638 ------------ ------------ Deductions attributed to: Withdrawals (4,279,002) (5,169,322) Administrative and investment expenses (178,619) (140,069) ------------ ------------ Total deductions (4,457,621) (5,309,391) Net increase in net assets available for benefits before rollovers from other plans 7,030,244 14,384,247 Rollovers from other plans 222,721 383,969 ------------ ------------ Net increase in net assets available for benefits 7,252,965 14,768,216 Net assets available for benefits, beginning of year 35,755,939 20,987,723 ------------ ------------ Net assets available for benefits, end of year $ 43,008,904 $ 35,755,939 ============ ============
The accompanying notes are an integral part of these financial statements. - 3 - 6 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 -------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN The following brief description of the provisions of the Noble Drilling Corporation 401(k) Savings Plan (the Plan) is provided for general information purposes only. Participants should refer to the plan document for a more complete description of the Plan's provisions. GENERAL Noble Drilling Corporation (the Company) established the Noble Drilling Corporation Thrift Plan (the Thrift Plan) effective January 1, 1986. Prior to October 1, 1985, the Company was a wholly-owned subsidiary of Noble Affiliates, Inc. (NAI). Effective as of that date, the Company was recapitalized, and its common stock was distributed to the shareholders of NAI in a tax-free spin-off. The Company's employees had participated in the NAI Thrift and Profit Sharing Plan (the NAI Plan) prior to October 1, 1985 and continued to participate in the NAI Plan through December 31, 1985. Participants in the NAI Plan carried over certain service, eligibility and vesting benefits upon entering the Plan. The Plan is a defined contribution plan. All domestic and expatriate employees are eligible to enroll in the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended, and is administered by the Employee Benefits Committee of the Company, whose members are appointed by the Company's Board of Directors. Charles Schwab Trust Company, Inc. is the Plan Trustee and Milliman & Robertson, Inc. is the Plan's recordkeeper. Under the terms of the Plan, the Trustee, on behalf of the Plan, acquires, holds and disposes of securities, including the common stock of the Company owned by the Plan. CONTRIBUTIONS Participants may contribute on a pre-tax basis up to 12% (up to a limit of $10,500 and $10,000 for 2000 and 1999, respectively) of their base compensation to the Plan. On April 26, 2000, the Board of Directors of Noble Drilling Corporation approved an increase in the maximum participant pre-tax contribution rate from 12% to 19% (subject to the aforementioned aggregate statutory limits) effective August 1, 2000. - 4 - 7 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 -------------------------------------------------------------------------------- The Plan provides for the following amounts of employer matching contributions based on the participant's years of vesting service:
PERCENTAGE OF MATCHING CONTRIBUTION PARTICIPANT'S PARTICIPANT'S CONTRIBUTION LIMITED TO THE FOLLOWING YEARS OF VESTING MATCHED BY PERCENTAGE OF SERVICE THE COMPANY PARTICIPANT'S COMPENSATION Less than 15 70% 6% 15 or more 100% 6%
The Plan provides that matching contributions are made in the form of cash or the Company's common stock. Pass-through voting rights for shares of common stock of the Company are credited to a participant's account, whether or not vested. VESTING A participant's contributions are 100% vested at all times. Participants become fully vested in the Company's matching contributions upon five years of credited service. Also, a participant becomes fully vested in the Company's matching contributions, regardless of years of service, if employment is terminated due to normal retirement, total disability or death. In May 1996, in connection with the acquisition of Chiles Offshore Corporation by the Company, the net assets available for benefits of the Chiles Offshore Corporation 401(k) Plan (Chiles) were merged into the Plan. Chiles participants become vested in the Company's contributions and the related earnings of such contributions after attainment of the years of service specified below:
VESTED AND NONFORFEITABLE YEARS PERCENTAGE OF EMPLOYER'S OF SERVICE CONTRIBUTION INTO THE PLAN 1 20% 2 40% 3 60% 4 80% 5 100%
In general, a participant will be deemed to have completed a "year of service" for each calendar year during which the participant completes at least 1,000 hours of service. TERMINATION The Company reserves the right to amend or terminate the Plan, subject to the provisions of ERISA. Upon notice of termination or permanent suspension of contributions, the accounts of all participants affected thereby will become fully vested and in the event of termination, will be distributed in accordance with the provisions of the Plan. - 5 - 8 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 -------------------------------------------------------------------------------- LOANS A participant has the ability to borrow funds from his or her vested pre-tax and rollover amounts. A loan is secured by the participant's account balance and bears interest at a fixed rate of prime plus 1%. Interest rates on loans outstanding range from 7.0% to 10.5%. A participant may borrow a maximum amount equal to the lesser of (i) 50% of that participant's vested account balance under the Plan or (ii) $50,000, reduced by the excess, if any, of the highest outstanding loan balance outstanding in the previous year over the loan balance currently outstanding. The loans are repayable within five years unless used to acquire a principal residence, subject to the approval of the Employee Benefits Committee. Repayment of the principal and interest of a loan is invested according to the participant's current investment directions for future pre-tax contributions to the Plan. Upon leaving the Company, the Plan participant has 90 days to repay the outstanding loan balance, with a lump sum payment. In the event the loan is not paid within that time period, the loan balance will be defaulted and become taxable to the participant. During 2000 and 1999, $1,075,822 and $760,048, respectively, in new loans were made to participants. WITHDRAWALS Withdrawals are permitted in the event of termination of employment, retirement, permanent disability, death or financial hardship, as defined in the Plan. In-service withdrawals may be made from a participant's after-tax contribution or rollover account. Additionally, vested participants may make in-service withdrawals from the Company's matching account. PARTICIPANT ACCOUNTS Separate accounts are maintained for each participant. Participant accounts are credited with pre-tax contributions, after-tax contributions, rollover contributions, the Company's matching contributions and an allocation of investment earnings and losses. Furthermore, participant accounts are adjusted for withdrawals and transfers among investment options, if any. Participants have an option as to the manner in which their contributions may be invested. Separate funds are maintained and participants may direct their investments in 1% increments. A brief description of the Plan's investment options follows. For a detailed description of investment options and risk profiles, refer to the respective fund's prospectus. - 6 - 9 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 --------------------------------------------------------------------------------
FUND INVESTMENTS Morley Institutional Investors' Guaranteed investment contracts, Fund (Morley) bank investment contracts and money-market instruments. PIMCO Total Return Institutional United States government Shares (PIMCO) securities, corporate bonds, mortgage related securities and money-market instruments. Alliance Growth & Income Class A Common stocks and convertible Fund (Alliance) securities. Columbia Balanced Fund (Columbia) Common stocks of medium-sized established and growth companies. Vanguard Index 500 Fund Common stocks of companies (Vanguard) included in Standard & Poor's 500 index. Janus Fund (Janus) Common stocks of large established domestic companies. Turner Midcap Growth Fund Common stocks of medium-sized (Turner) growth companies. Brandywine Fund (Brandywine) Common stocks of small to medium-sized companies that are expected to demonstrate growth in earnings and revenue. Franklin Small Cap Growth I Common stocks of small-sized Class A Fund (Franklin) growth companies. Common stocks and debt Janus Overseas Fund (Janus securities of companies and Overseas) governments outside the United States. Fund ND Noble Drilling Corporation common stock
Unallocated forfeitures are maintained in the Fund ND and the Morley Institutional Investors' Fund. Unallocated forfeitures are segregated from all other participant records. Unallocated forfeitures of $73,619 and $91,212 at December 31, 2000 and 1999, respectively, may be used to reduce future Company matching contributions. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The Plan's financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. - 7 - 10 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 -------------------------------------------------------------------------------- INVESTMENTS Investments traded on national securities exchanges are valued at closing prices on the last business day of the year; investments traded on the over-the-counter market are valued at an average of the last reported bid and ask prices. The investment in the bank commingled fund (short-term investments) is highly liquid; therefore, the fair value approximates cost. The cost of investments sold is determined on the basis of average cost. Shares in the Collective Investment Fund are valued at the fair value of the fund's underlying net assets as determined by the quoted closing price for those securities for which market quotations are available or with respect to other assets, fair value as determined in good faith by the fund manager. Investments in Mutual Funds are valued on the basis of net asset value as reported by the respective Mutual Fund companies. Purchases and sales of securities are reflected on a trade-date basis. Dividend income is recorded on the ex-dividend date. Income from other investments is recorded as earned on an accrual basis. The Plan presents in the statement of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. EXPENSES Plan administration expenses are paid by the Plan, unless paid by the Company, at the Company's sole discretion. For the years ended December 31, 2000 and 1999, administrative expenses of $178,619 and $140,069, respectively, were paid by the Plan. EXCESS CONTRIBUTIONS REFUNDABLE TO EMPLOYEES Excess contributions refundable to highly compensated employees represent the refunds necessary to meet certain nondiscrimination provisions of the Internal Revenue Code (the Code). There were no excess contributions refundable to employees for the years ended December 31, 2000 and 1999. USE OF ESTIMATES The preparation of the Plan's financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan administrator to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period, and when applicable, disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. - 8 - 11 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 -------------------------------------------------------------------------------- CONCENTRATIONS OF CREDIT RISK Certain financial instruments potentially subject the Plan to concentrations of credit risk. These financial instruments consist of Noble Drilling Corporation common stock and various mutual funds and collective instruments. The Plan does not obtain or require collateral for these instruments. Changes in the economic environment have a direct impact on the market value of these instruments. It is reasonably possible that changes in the economic environment will occur in the near term and that such changes will have a material effect on the market value of the instruments included in the Plan. 3. TAX STATUS The Plan obtained its latest determination letter on October 27, 1995, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. 4. RELATED PARTIES The Trustee is authorized to invest in securities under its control. Transactions resulting in Plan assets being transferred to, or used by, a related party are prohibited under ERISA unless a specific exemption exists. As of December 31, 2000 and 1999 and for the years then ended, there were no transactions with any "party-in-interest" as defined by ERISA for which there was not a specific exemption. - 9 - 12 NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 -------------------------------------------------------------------------------- 5. INVESTMENTS The following presents investments that represent five percent or more of the Plan's net assets:
DECEMBER 31, ---------------------------------- 2000 1999 Noble Drilling Corporation common stock, 496,874 and 575,694 shares, respectively $ 21,623,247 $ 18,853,988 Brandywine Fund, 116,499 and 64,674 shares, respectively 3,424,343 2,773,216 Dodge & Cox Balanced Fund, 0 and 27,542 shares, respectively 0 1,809,772 Morley Institutional Investors' Fund, 180,028 and 146,947 shares, respectively 4,049,511 3,106,013 Vanguard Index 500 Fund, 46,039 and 42,239 shares, respectively 5,610,569 5,716,163 Columbia Balanced Fund, 99,363 and 0 shares, respectively 2,279,191 0
During 2000 and 1999, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated/(depreciated) in value as follows:
YEAR ENDED DECEMBER 31, ----------------------------------- 2000 1999 Common stock $ 5,780,363 $ 11,794,225 Mutual funds (2,645,903) 1,650,644 Collective Investment Fund 257,466 180,882 ------------ ------------ $ 3,391,926 $ 13,625,751 ============ ============
As of December 31, 2000 and 1999, the Plan held no nonparticipant directed investments. - 10 - 13 SCHEDULE I NOBLE DRILLING CORPORATION 401(K) SAVINGS PLAN SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2000 --------------------------------------------------------------------------------
(c) DESCRIPTION ------------------------------------------ NUMBER OF (e) (b) SHARES/UNITS (d) CURRENT (a) IDENTITY OF ISSUE ASSET TYPE OF INTEREST COST VALUE * Noble Drilling Corporation Common stock 496,874 $11,090,391 $ 21,623,247 Morley Institutional Investors' Fund Collective Investment Fund 180,028 3,768,771 4,049,511 Vanguard Index 500 Fund Mutual fund 46,039 5,299,906 5,610,569 Brandywine Fund Mutual fund 116,499 4,152,963 3,424,343 PIMCO Total Return Institutional Shares Mutual fund 144,291 1,487,585 1,499,296 * Participant loans Loans, interest rates ranging from 7.0% - 10.5% 1,637,842 1,637,842 Alliance Growth & Income Class A Fund Mutual fund 48,678 190,968 184,976 Columbia Balanced Fund Mutual fund 99,363 2,546,053 2,279,191 Franklin Small Cap Growth I Class A Fund Mutual fund 2,963 138,500 120,151 Janus Fund Mutual fund 19,482 854,965 648,550 Janus Overseas Fund Mutual fund 31,813 1,094,214 844,322 Turner Midcap Growth Fund Mutual fund 13,379 493,568 409,445 ------------ ------------ Total assets held for investment purposes $31,117,884 $ 42,331,443 =========== ============
* Indicates party-in-interest transaction, for which a statutory exemption exists. - 11 - 14 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-43183) and Forms S-8 (Nos. 33-3289, 33-15269, 33-18966, 33-46724, 33-50270, 33-50272, 33-62394, 33-57675, 333-25857, 333-17407, 333-80511 and 333-53912) of Noble Drilling Corporation of our report dated June 8, 2001 relating to the financial statements and supplemental schedule, which appears in this Form 10-K/A. PRICEWATERHOUSECOOPERS LLP Houston, Texas June 28, 2001