Name: Devon Energy Corp. (NYSE:DVN) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Devon Energy Corp., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Oil, gas and NGL sales	14,082)	9,531)	2,695)	3,809)	6,285)
Oil, gas and NGL derivatives	(658)	(1,544)	155)	(454)	—)
Marketing and midstream revenues	5,745)	4,219)	1,978)	2,865)	4,449)
Revenues	19,169)	12,206)	4,828)	6,220)	10,734)
Production expenses	(2,797)	(2,131)	(1,123)	(1,197)	(2,225)
Marketing and midstream expenses	(5,780)	(4,238)	(2,013)	(2,812)	(4,363)
Cost of revenues	(8,577)	(6,369)	(3,136)	(4,009)	(6,588)
Gross profit	10,592)	5,837)	1,692)	2,211)	4,146)
Exploration expenses	(29)	(14)	(167)	(58)	(177)
Depreciation, depletion and amortization	(2,223)	(2,158)	(1,300)	(1,497)	(1,658)
Asset impairments	—)	—)	(2,693)	—)	(156)
Asset dispositions	44)	168)	1)	48)	263)
General and administrative expenses	(395)	(391)	(338)	(475)	(650)
Restructuring and transaction costs	—)	(258)	(49)	(84)	(114)
Estimated future obligation under a performance guarantee	144)	18)	—)	—)	—)
Ukraine charitable pledge	(20)	—)	—)	—)	—)
Asset retirement obligation accretion	(25)	(28)	(20)	(21)	(59)
Severance and other non-income tax refunds	5)	39)	40)	—)	—)
Other	(9)	14)	14)	17)	(81)
Other, net	95)	43)	34)	(4)	(140)
Operating income (loss)	8,084)	3,227)	(2,820)	141)	1,514)
Interest based on debt outstanding	(370)	(388)	(259)	(260)	(298)
Gain (loss) on early retirement of debt	—)	30)	—)	—)	(312)
Interest income	38)	2)	12)	33)	—)
Other	23)	27)	(23)	(23)	16)
Financing costs, net	(309)	(329)	(270)	(250)	(594)
Earnings (loss) from continuing operations before income taxes	7,775)	2,898)	(3,090)	(109)	920)
Income tax (expense) benefit	(1,738)	(65)	547)	30)	(156)
Net earnings (loss) from continuing operations	6,037)	2,833)	(2,543)	(79)	764)
Net earnings (loss) from discontinued operations, net of income taxes	—)	—)	(128)	(274)	2,460)
Net earnings (loss)	6,037)	2,833)	(2,671)	(353)	3,224)
Net earnings attributable to noncontrolling interests	(22)	(20)	(9)	(2)	(160)
Net earnings (loss) attributable to Devon	6,015)	2,813)	(2,680)	(355)	3,064)

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).

The financial performance from 2018 to 2022 is characterized by a significant V-shaped recovery in both revenue and net income, following a period of substantial volatility. Total revenues experienced a sharp decline from 10.7 billion USD in 2018 to a low of 4.8 billion USD in 2020, before surging to 19.2 billion USD by 2022. This trajectory was primarily driven by the volatility in oil, gas, and NGL sales, which grew from 2.7 billion USD in 2020 to 14.1 billion USD in 2022.

Revenue and Gross Profitability: A strong correlation exists between total revenues and gross profit. Gross profit plummeted from 4.1 billion USD in 2018 to 1.7 billion USD in 2020, reflecting the contraction in commodity sales. However, a rapid expansion occurred in subsequent years, with gross profit reaching 10.6 billion USD in 2022. The cost of revenues did not increase proportionally with the revenue surge in 2021 and 2022, indicating a significant expansion in gross margins.
Operating Income and Non-Cash Charges: Operating income demonstrated extreme fluctuations, swinging from a loss of 2.8 billion USD in 2020 to a gain of 8.1 billion USD in 2022. The 2020 operating loss was heavily influenced by a non-cash asset impairment charge of 2.7 billion USD. In contrast, the 2021 and 2022 periods saw a reduction in exploration expenses and a stabilization of depreciation, depletion, and amortization costs relative to the scale of operations, contributing to the recovery of operating margins.
Operational Expense Management: General and administrative expenses showed a consistent downward trend, decreasing from 650 million USD in 2018 to 395 million USD in 2022. This reduction in overhead, occurring simultaneously with a massive increase in total revenue, suggests a significant improvement in operational efficiency and cost discipline over the five-year period.
Financing and Taxation: Financing costs remained relatively stable, fluctuating between 250 million USD and 594 million USD annually. The impact of income taxes shifted from a benefit in 2020 (547 million USD) to a substantial expense in 2022 (1.7 billion USD), mirroring the transition from net losses to high profitability.
Net Earnings Trends: Net earnings attributable to the company followed the operational trend, moving from a loss of 2.7 billion USD in 2020 to a record profit of 6.0 billion USD in 2022. While 2018 earnings were bolstered by discontinued operations, the 2022 results reflect a fundamental increase in the profitability of continuing operations.

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