Common-Size Income Statement
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- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Devon Energy Corp., common-size consolidated income statement
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Revenue Composition Trends
- The proportion of oil, gas, and NGL sales as a percentage of total revenues exhibited variability, increasing from 58.55% in 2018 to a peak of 78.08% in 2021, before declining to 73.46% in 2022. In contrast, marketing and midstream revenues showed a steady decrease over the period, falling from 41.45% in 2018 to 29.97% in 2022. The derivatives related to oil, gas, and NGL were negative in 2019 and 2021, indicating losses in those years, while positive in 2020 but remained a small component compared to total revenues.
- Cost Structure and Profitability
- Cost of revenues as a percentage of revenues declined notably from 61.38% in 2018 to 44.74% in 2022, reflecting improved cost efficiency or margin expansion. Specifically, both production expenses and marketing and midstream expenses showed a downward trend in terms of percentage of revenues. Production expenses decreased from -20.73% in 2018 to -14.59% in 2022, and marketing and midstream expenses dropped from -40.65% to -30.15% over the same period. These reductions contributed to a marked increase in gross profit percentage, which rose from 38.62% in 2018 to 55.26% in 2022, illustrating enhanced gross margin performance.
- Operating Expenses and Other Charges
- Exploration expenses remained relatively low and stable, fluctuating mildly around zero with a small peak at -3.46% in 2020. Depreciation, depletion, and amortization showed a pronounced peak in 2020 at -26.93%, followed by a significant decline to -11.6% by 2022. Asset impairments were substantially high in 2020 at -55.78% but were absent in other years, skewing operating results negatively in that year. General and administrative expenses steadily decreased as a proportion of revenues from -6.06% in 2018 to -2.06% in 2022, indicating improving overhead cost management. Restructuring and transaction costs appeared mostly in earlier years, diminishing by 2022. Incremental new items such as estimated future obligations under a performance guarantee appeared starting 2021 but remained minor relative to revenues.
- Operating Income and Earnings Performance
- Operating income demonstrated considerable volatility, showing a low point in 2020 of -58.41% of revenues, likely impacted by the large asset impairments and other cost pressures. By 2022, operating income had recovered strongly to 42.17%, surpassing prior year levels. Earnings from continuing operations before income taxes followed a similar pattern, with a negative value in 2020 (-64%), but rebounding to 40.56% in 2022. Net earnings from continuing operations also mirrored this recovery trend, transitioning from a substantial loss of -52.67% in 2020 to a gain of 31.49% in 2022.
- Tax and Net Earnings Trends
- Income tax expense was variable, with a benefit observed in 2020 (+11.33%) and an expense in 2022 (-9.07%), indicating changing effective tax rates or tax impacts from earnings fluctuations. Net earnings including discontinued operations declined sharply into negative territory in 2019 and 2020, with a trough at -55.32% in 2020, but returned positive in 2021 and 2022, reaching 31.49%. Net earnings attributable to noncontrolling interests were relatively small but consistently negative over the period, while net earnings attributable to Devon showed a comparable magnitude and trend to the net earnings overall.
- Financing Costs and Interest
- Interest expense based on debt outstanding decreased steadily from -2.78% in 2018 to -1.93% in 2022, reflecting either lower debt levels or improved interest rates. Net financing costs likewise declined from -5.53% in 2018 to -1.61% in 2022, supporting improved net profitability. Gains or losses on early retirement of debt were only recorded in 2018 and 2021, with a small positive gain in 2021.