Seadrill (Seadrill) Interest Coverage

: 3.67 (As of Dec. 2023)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Seadrill's Operating Income for the three months ended in Dec. 2023 was $55 Mil. Seadrill's Interest Expense for the three months ended in Dec. 2023 was $-15 Mil. Seadrill's interest coverage for the quarter that ended in Dec. 2023 was 3.67. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Seadrill's Interest Coverage or its related term are showing as below:

SDRL' s Interest Coverage Range Over the Past 10 Years
Min: 5.75 Med: 5.75 Max: 5.84
Current: 5.84

SDRL's Interest Coverage is ranked worse than
53.68% of 760 companies
in the Oil & Gas industry
Industry Median: 6.67 vs SDRL: 5.84

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Seadrill Interest Coverage Historical Data

The historical data trend for Seadrill's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Seadrill Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

N/A

5.75

Seadrill Quarterly Data
	Dec19	Dec20	Jun21	Sep21	Dec21	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage								N/A	3.13	10.17	7.47	3.67

Competitive Comparison

For the Oil & Gas Drilling subindustry, Seadrill's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Seadrill Interest Coverage Distribution

For the Oil & Gas industry and Energy sector, Seadrill's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Seadrill's Interest Coverage falls into.

Seadrill Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Seadrill's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Seadrill's Interest Expense was $-59 Mil. Its Operating Income was $339 Mil. And its Long-Term Debt & Capital Lease Obligation was $608 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	339	/	-59
	=	5.75

Seadrill's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Seadrill's Interest Expense was $-15 Mil. Its Operating Income was $55 Mil. And its Long-Term Debt & Capital Lease Obligation was $608 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	55	/	-15
	=	3.67

The higher the ratio, the stronger the company's Financial Strength is.

Seadrill (NYSE:SDRL) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Seadrill Interest Coverage Related Terms

Thank you for viewing the detailed overview of Seadrill's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Seadrill (Seadrill) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Seadrill Ltd (NYSE:SDRL) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

SDRLo:Sweden SDRL:Norway SDRMo:UK P4F:Germany

Address

566 Chiswick High Road, Chiswick Business Park, Building 11, 2nd Floor, London, GBR, W4 5YS

Website

https://www.seadrill.com

Seadrill Ltd is an offshore drilling contractor company. It engages in providing worldwide offshore drilling services to the oil and gas industry. Its primary business is the ownership and operation of drillships, semi-submersible rigs, and jack-up rigs for operations in shallow to ultra-deepwater areas in both benign and harsh environments. It has three segments Harsh environment, Floaters and Jackups.