Employee Benefit Plans

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

Employee Benefit Plans

Note 15— Employee Benefit Plans

Defined Benefit Plans

Noble Drilling (Land Support) Limited (“NDLS”), an indirect, wholly-owned subsidiary of Noble, 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-US plan”). Since May 2022, the NDLS pension trustees and covenant advisors have been communicating with Noble to understand the impact of the Rig Transaction and merger with Maersk Drilling and to negotiate appropriate mitigation including buyout of the Scheme to cover the pension obligations. The Pension Regulators advised on December 15, 2022 that it did not intend to investigate the transaction unless Noble and the pension trustees were unable to agree on mitigation or there was a material change to circumstances. Noble has provided a company guarantee from Noble Corporation plc to cover the full section 75 debts of NDLS and Noble Resources Limited (“NRL”), the two sponsoring entities of the pension scheme, and believes this is an appropriate mitigation to support the pension liabilities.

In addition to the non-US plan discussed above, we have a US noncontributory defined benefit pension plan that covers certain salaried employees and a US 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 US plans”). These plans are governed by the Noble Drilling Employees’ Retirement Trust (the “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 US plans when required. The benefit amount that can be covered by the qualified US plans is limited under ERISA and the Internal Revenue Code of 1986. Therefore, we maintain an unfunded, non-qualified excess benefit plan designed to maintain benefits for specified employees at the formula level in the qualified salaried US plan. We refer to the qualified US plans and the excess benefit plan collectively as the “US plans.”

During the fourth quarter of 2016, we approved amendments, effective as of December 31, 2016, to our non-US and US defined benefit plans. With these amendments, employees and alternate payees will accrue no future benefits under the plans after December 31, 2016. However, these amendments will not affect any benefits earned through that date.

A reconciliation of the changes in projected benefit obligations (“PBO”) for our non-US and US plans is as follows:

	Successor								Predecessor
					Period From				Period From
					February 6, 2021				January 1, 2021
	Year Ended				through				through
	December 31, 2022				December 31, 2021				February 5, 2021
	Non-US		US		Non-US		US		Non-US		US
Benefit obligation at beginning of period	$	63,066	$	243,538	$	63,729	$	256,417	$	67,943	$	266,090
Interest cost	1,368		6,753		1,228		5,993		97		615
Actuarial loss (gain)	(19,328)		(63,739)		1,548		(6,465)		(4,366)		(6,491)
Benefits paid	(2,041)		(9,772)		(2,456)		(7,199)		(138)		(1,515)
Settlements and curtailments	—		(342)		—		(5,208)		—		(2,282)
Foreign exchange rate changes	(6,090)		—		(983)		—		193		—
Benefit obligation at end of period	$	36,975	$	176,438	$	63,066	$	243,538	$	63,729	$	256,417

A reconciliation of the changes in fair value of plan assets is as follows:

	Successor								Predecessor
					Period From				Period From
					February 6, 2021				January 1, 2021
	Year Ended				through				through
	December 31, 2022				December 31, 2021				February 5, 2021
	Non-US		US		Non-US		US		Non-US		US
Fair value of plan assets at beginning of period	$	78,465	$	226,830	$	79,146	$	221,743	$	83,808	$	222,417
Actual return on plan assets	(28,402)		(43,354)		2,998		12,254		(4,763)		838
Employer contributions	—		376		—		5,240		—		2,285
Benefits paid	(2,041)		(9,772)		(2,456)		(7,199)		(138)		(1,515)
Plan participants’ contributions	—		(342)		—		(5,208)		—		(2,282)
Foreign exchange rate changes	(7,380)		—		(1,223)		—		239		—
Fair value of plan assets at end of period	$	40,642	$	173,738	$	78,465	$	226,830	$	79,146	$	221,743

The funded status of the plans is as follows:

	Successor
	Year Ended December 31,				Year Ended December 31,
	2022				2021
	Non-US		US		Non-US		US
Funded status	$	3,667	$	(2,700)	$	15,399	$	(16,708)

Amounts recognized in the Consolidated Balance Sheets consist of:

	Successor
	Year Ended December 31,				Year Ended December 31,
	2022				2021
	Non-US		US		Non-US		US
Other assets (noncurrent)	$	3,667	$	2,722	$	15,399	$	971
Other liabilities (current)	—		(205)		—		(67)
Other liabilities (noncurrent)	—		(5,217)		—		(17,612)
Net amount recognized	$	3,667	$	(2,700)	$	15,399	$	(16,708)

Amounts recognized in AOCI consist of:

	Successor
	As of December 31, 2022				As of December 31, 2021
	Non-US		US		Non-US		US
Net actuarial (gain) loss	$	9,963	$	(14,158)	$	(369)	$	(6,496)
Deferred income tax (asset) liability	(2,425)		2,973		112		1,364
Accumulated other comprehensive (income) loss	$	7,538	$	(11,185)	$	(257)	$	(5,132)

Pension costs include the following components:

	Successor								Predecessor
					Period From				Period From
					February 6, 2021				January 1, 2021
	Year Ended				through				through				Year Ended
	December 31, 2022				December 31, 2021				February 5, 2021				December 31, 2020
	Non-US		US		Non-US		US		Non-US		US		Non-US		US
Interest cost	1,368		6,753		1,228		5,993		97		615		1,877		7,567
Return on plan assets	(1,431)		(12,581)		(845)		(11,648)		(85)		(1,239)		(1,649)		(11,676)
Amortization of prior service cost	—		—		—		—		1		—		10		—
Recognized net actuarial loss	—		(22)		—		—		—		281		—		2,866
Settlement and curtailment (gain) loss	—		(121)		—		(575)		—		301		9		154
Net pension benefit cost (gain) loss	$	(63)	$	(5,971)	$	383	$	(6,230)	$	13	$	(42)	$	247	$	(1,089)

There are zero estimated net actuarial losses and prior service costs for the non-US plan and the US plans that will be amortized from AOCI into net periodic pension cost in 2023.

During the years ended December 31, 2022, 2021 and 2020, we adopted the Retirement Plan (“RP”) mortality tables with the Mortality Projection (“MP”) scale as issued by the Society of Actuaries for each of the respective years. The RP 2022, 2021 and 2020 mortality tables represent the new standard for defined benefit mortality assumptions due to adjusted life expectancies. The adoption of the updated mortality tables and the mortality improvement scales increased our pension liability on our US plans by approximately $0.9 million and $0.7 million as of December 31, 2022 and 2021, respectively, and decreased our pension liability by approximately $1.7 million as of December 31, 2020.

During the fourth quarter of 2018, the UK High Court made a judgement confirming that UK pension schemes are required to equalize male and female members’ benefits for the effect of guaranteed minimum pensions (“GMP”). We have accounted for the impact of the GMP equalization as a plan amendment to our non-US plan, and the impact is included as a prior service cost as of December 31, 2020, which will be amortized over the average life expectancy of the members at that date.

Defined Benefit Plans—Disaggregated Plan Information

Disaggregated information regarding our non-US and US plans is summarized below:

	Successor
	Year Ended				Year Ended
	December 31, 2022				December 31, 2021
	Non-US		US		Non-US		US
Projected benefit obligation	$	36,975	$	176,438	$	63,066	$	243,538
Accumulated benefit obligation	36,975		176,438		63,066		243,538
Fair value of plan assets	40,642		173,738		78,465		226,830

The following table provides information related to those plans in which the PBO exceeded the fair value of the plan assets at December 31, 2022 and 2021. The PBO is the actuarially computed present value of earned benefits based on service to date and includes the estimated effect of any future salary increases. Employees and alternate payees have no longer accrued future benefits under the plans since December 31, 2017.

	Successor
	Year Ended				Year Ended
	December 31, 2022				December 31, 2021
	Non-US		US		Non-US		US
Projected benefit obligation	$	—	$	151,564	$	—	$	207,059
Fair value of plan assets	—		146,144		—		189,382

The PBO for the unfunded excess benefit plan was $0.9 million at December 31, 2022 as compared to $1.5 million in 2021, and is included under “US” in the above tables.

The following table provides information related to those plans in which the accumulated benefit obligation (“ABO”) exceeded the fair value of plan assets at December 31, 2022 and 2021. The ABO is the actuarially computed present value of earned benefits based on service to date, but differs from the PBO in that it is based on current salary levels. Employees and alternate payees have no longer accrued future benefits under the plans since December 31, 2016.

	Successor
	Year Ended				Year Ended
	December 31, 2022				December 31, 2021
	Non-US		US		Non-US		US
Accumulated benefit obligation	$	—	$	151,564	$	—	$	207,059
Fair value of plan assets	—		146,144		—		189,382

The ABO for the unfunded excess benefit plan was $0.9 million at December 31, 2022 as compared to $1.5 million in 2021, and is included under “US” in the above tables.

Defined Benefit Plans—Key Assumptions

The key assumptions for the plans are summarized below:

	Successor				Predecessor
			Period From		Period From
			February 6, 2021		January 1, 2021
	Year Ended		through		through
	December 31, 2022		December 31, 2021		February 5, 2021
	Non-US	US	Non-US	US	Non-US	US
Weighted-average assumptions used to determine benefit obligations:
Discount Rate	5.00%	5.17% - 5.27%	1.80%	2.63% -2.89%	1.80%	1.92% - 2.77%
Rate of compensation increase	N/A	N/A	N/A	N/A	N/A	N/A

	Successor		Predecessor
		Period From	Period From
		February 6, 2021	January 1, 2021
	Year Ended	through	through	Year Ended
	December 31, 2022	December 31, 2021	February 5, 2021	December 31, 2020
	Non-US	Non-US	Non-US	Non-US
Weighted-average assumptions used to determine periodic benefit cost:
Discount Rate	1.80%	1.80%	1.80%	2.10%
Expected long-term return on assets	2.00%	1.20%	1.20%	2.90%
Rate of compensation increase	N/A	N/A	N/A	N/A

	Successor		Predecessor
		Period From	Period From
		February 6, 2021	January 1, 2021
	Year Ended	through	through	Year Ended
	December 31, 2022	December 31, 2021	February 5, 2021	December 31, 2020
	US	US	US	US
Weighted-average assumptions used to determine periodic benefit cost:
Discount Rate	2.63% - 2.89%	1.92% - 2.77%	1.82% - 2.60%	2.56% - 3.32%
Expected long-term return on assets	5.00% - 5.80%	5.00% - 5.80%	5.10% - 6.10%	5.40% -6.30%
Rate of compensation increase	N/A	N/A	N/A	N/A

The discount rates used to calculate the net present value of future benefit obligations for our US plans is based on the average of current rates earned on long-term bonds that receive a Moody’s rating of “Aa” or better. We have determined that the timing and amount of expected cash outflows on our plans reasonably match this index. For our non-US plan, the discount rate used to calculate the net present value of future benefit obligations is determined by using a yield curve of high quality bond portfolios with an average maturity approximating that of the liabilities.

In developing the expected long-term rate of return on assets, we considered the current level of expected returns on risk free investments (primarily government bonds), the historical level of risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class. The expected return for each

asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return on assets for the portfolio. To assist us with this analysis, we employ third-party consultants for our US and non-US plans that use a portfolio return model.

Defined Benefit Plans—Plan Assets

Non-US Plan. As of December 31, 2022, the NDLS pension Scheme targets an asset allocation of 20.0% return-seeking securities (growth) and 80.0% in debt securities (matching) and adopts a de-risking strategy whereby the level of investment risk reduces as the Scheme’s funding level improves. The overall investment objective of the Scheme, as adopted by the Scheme’s Trustees, is to reach a fully funded position on the agreed de-risking basis of gilts - 0.20% per annum. The objectives within the Scheme’s overall investment strategy is to outperform the cash + 4% per annum long term objective for growth assets and to sufficiently hedge interest rate and inflation risk within the matching portfolio in relation to the Scheme’s liabilities. By achieving these objectives, the Trustees believe the Scheme will be able to avoid significant volatility in the contribution rate and provide sufficient assets to cover the Scheme’s benefit obligations. To achieve this the Trustees have given Mercer, the appointed investment manager, full discretion in the day-to-day management of the Scheme’s assets and implementation of the de-risking strategy, who in turn invests in multiple underlying investment managers where appropriate. The Trustees meet with Mercer periodically to review and discuss their investment performance.

The actual fair values of the non-US plan are as follows:

Successor:	As of December 31, 2022
			Estimated Fair Value Measurements
	Carrying Amount		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	271	$	271	$	—	$	—
Equity securities:
International companies	5,421		5,421		—		—
Fixed income securities:
Corporate bonds	34,950		34,950		—		—
Total	$	40,642	$	40,642	$	—	$	—

Successor:	As of December 31, 2021
			Estimated Fair Value Measurements
	Carrying Amount		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	938	$	938	$	—	$	—
Equity securities:
International companies	10,546		10,546		—		—
Fixed income securities:
Corporate bonds	66,981		66,981		—		—
Total	$	78,465	$	78,465	$	—	$	—

US Plans. The fundamental objective of the US plan is to provide the capital assets necessary to meet the financial obligations made to plan participants. In order to meet this objective, the Investment Policy Statement depicts how the investment assets of the plan are to be managed in accordance with the overall target asset allocation of approximately 38.9% equity securities, 59.9% fixed income securities, and 1.2% in cash and equivalents. The target asset allocation is intended to generate sufficient capital to meet plan obligations and provide a portfolio rate of return equal to or greater than the return realized using appropriate blended, market benchmark over a full market cycle (usually a five to seven year

time period). Actual allocations may deviate from the target range, however any deviation from the target range of asset allocations must be approved by the Trust’s governing committee.

For investments in mutual funds, the assets of the Trust are subject to the guidelines and limits imposed by such mutual fund’s prospectus and the other governing documentation at the fund level.

No shares of Noble were included in equity securities at either December 31, 2022 or 2021.

The actual fair values of US plan assets are as follows:

Successor:	As of December 31, 2022
			Estimated Fair Value Measurements
	Carrying Amount		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	3,902	$	3,902	$	—	$	—
Equity securities:
United States	37,555		—		37,555		—
Fixed income securities:
Corporate bonds	100,513		96,962		3,551		—
Treasury bonds	31,768		31,768		—		—
Total	$	173,738	$	132,632	$	41,106	$	—

Successor:	As of December 31, 2021
			Estimated Fair Value Measurements
	Carrying Amount		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	3,718	$	3,718	$	—	$	—
Equity securities:
United States	86,237		—		86,237		—
International	—		—		—		—
Fixed income securities:
Corporate bonds	103,504		100,342		3,162		—
Treasury bonds	33,371		33,371		—		—
Total	$	226,830	$	137,431	$	89,399	$	—

Defined Benefit Plans—Cash Flows

In 2022, we made no contributions to our non-US plan and contributions of $0.4 million to our US plans. We made no contributions to our non-US plan in 2021. During the 2021 Predecessor period from January 1, 2021 to February 5, 2021 and the 2021 Successor period from February 6, 2021 to December 31, 2021, we made contributions of $2.3 million and $5.2 million, respectively, to our US plans. We expect our aggregate minimum contributions to our non-US and US plans in 2023, subject to applicable law, to be zero and $0.1 million, respectively. We continue to monitor and evaluate funding options based upon market conditions and may increase contributions at our discretion.

The following table summarizes our estimated benefit payments at December 31, 2022:

			Payments by Period
	Total		2023		2024		2025		2026		2027		Thereafter
Estimated benefit payments
Non-US plans	$	23,240	$	2,059	$	2,129	$	2,183	$	2,226	$	2,313	$	12,330
US plans	110,564		10,036		10,214		10,612		10,887		11,093		57,722
Total estimated benefit payments	$	133,804	$	12,095	$	12,343	$	12,795	$	13,113	$	13,406	$	70,052

Other Benefit Plans. We sponsored a 401(k) Restoration Plan, which is a nonqualified, unfunded employee benefit plan under which specified employees may elect to defer compensation in excess of amounts deferrable under our 401(k) savings plan. At December 31, 2021, our liability for the 401(k) Restoration Plan was $2.8 million, and is included in “Accrued payroll and related costs.” In early 2022, the Noble Cayman Board of Directors approved the termination of the 401(k) Restoration Plan, following which Noble distributed all benefits of the plan during the second quarter of 2022. No liabilities remained in the plan as of December 31, 2022. We do not provide post-retirement benefits (other than pensions) or any post-employment benefits to our employees.

In 2005, we enacted a profit sharing plan, the Noble Services Company LLC Profit Sharing Plan, which covers eligible employees, as defined in the plan. Participants in the plan become fully vested in the plan after three years of service. On January 1, 2019, the 401(k) savings plan and the profit sharing plan were merged into the Noble Drilling Services Inc. 401(k) and Profit Sharing Plan. We sponsor other retirement, health and welfare plans and a 401(k) savings plan as well as international savings plans for the benefit of our employees. The contributions to these plans aggregated approximately $34.2 million, $29.8 million, $1.6 million and $24.9 million for the year ended December 31, 2022, the period from February 6, 2021 to December 31, 2021, the period from January 1 through February 5, 2021 and the year ended December 31, 2020, respectively.

Profit sharing contributions are discretionary, require Board of Directors approval and are made in the form of cash. Contributions recorded related to this plan totaled zero, zero, zero and $2.4 million, respectively, for the year ended December 31, 2022, the period from February 6, 2021 to December 31, 2021, the period from January 1 through February 5, 2021 and the year ended December 31, 2020.