Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Devon Energy Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net earnings (loss)	6,037)	2,833)	(2,671)	(353)	3,224)
Net (earnings) loss from discontinued operations, net of income taxes	—)	—)	128)	274)	(2,460)
Depreciation, depletion and amortization	2,223)	2,158)	1,300)	1,497)	1,658)
Asset impairments	—)	—)	2,693)	—)	156)
Leasehold impairments	12)	4)	152)	18)	95)
Accretion (amortization) of liabilities	(31)	(27)	32)	33)	61)
Total (gains) losses on commodity derivatives	658)	1,544)	(155)	454)	(608)
Cash settlements on commodity derivatives	(1,356)	(1,462)	316)	166)	(84)
Gains on asset dispositions	(44)	(168)	(1)	(48)	(263)
Deferred income tax expense (benefit)	1,179)	49)	(328)	(25)	226)
Share-based compensation	88)	99)	88)	115)	161)
Early retirement of debt	—)	(30)	—)	—)	312)
Other	(10)	15)	5)	(6)	(107)
Accounts receivable	(142)	(526)	231)	(3)	88)
Other current assets	(119)	30)	(97)	(7)	(128)
Other long-term assets	90)	12)	(9)	17)	(28)
Accounts payable and revenues and royalties payable	152)	539)	(109)	(46)	153)
Other current liabilities	(97)	(18)	(68)	(66)	(150)
Other long-term liabilities	(110)	(153)	(43)	23)	(78)
Changes in assets and liabilities, net	(226)	(116)	(95)	(82)	(143)
Adjustments to reconcile net earnings (loss) to net cash from operating activities	2,493)	2,066)	4,135)	2,396)	(996)
Net cash from operating activities	8,530)	4,899)	1,464)	2,043)	2,228)
Capital expenditures	(2,542)	(1,989)	(1,153)	(1,910)	(2,451)
Acquisitions of property and equipment	(2,583)	(18)	(8)	(31)	(55)
Divestitures of property and equipment	39)	79)	34)	390)	1,013)
WPX acquired cash	—)	344)	—)	—)	—)
Distributions from investments	39)	35)	—)	—)	—)
Contributions to investments	(76)	(25)	—)	—)	—)
Net cash from investing activities	(5,123)	(1,574)	(1,127)	(1,551)	(1,493)
Repayments of long-term debt	—)	(1,243)	—)	(162)	(922)
Early retirement of debt	—)	(59)	—)	—)	(304)
Repurchases of common stock	(718)	(589)	(38)	(1,849)	(2,956)
Dividends paid on common stock	(3,379)	(1,315)	(257)	(140)	(149)
Contributions from noncontrolling interests	—)	4)	21)	116)	—)
Distributions to noncontrolling interests	(30)	(21)	(14)	—)	—)
Acquisition of noncontrolling interests	—)	(24)	—)	—)	—)
Shares exchanged for tax withholdings and other	(86)	(45)	(18)	(26)	(55)
Net cash from financing activities	(4,213)	(3,292)	(306)	(2,061)	(4,386)
Operating activities	—)	—)	(110)	28)	476)
Investing activities	—)	—)	481)	2,472)	2,548)
Financing activities	—)	—)	—)	(1,578)	183)
Effect of exchange rate changes on cash	—)	—)	(9)	45)	—)
Net change in cash, cash equivalents and restricted cash of discontinued operations	—)	—)	362)	967)	3,207)
Effect of exchange rate changes on cash, continuing operations	(11)	1)	—)	—)	206)
Net change in cash, cash equivalents and restricted cash	(817)	34)	393)	(602)	(238)
Cash, cash equivalents and restricted cash at beginning of period	2,271)	2,237)	1,844)	2,446)	2,684)
Cash, cash equivalents and restricted cash at end of period	1,454)	2,271)	2,237)	1,844)	2,446)

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).

Net earnings (loss): The company experienced significant volatility in net earnings from 2018 through 2022. Starting with a strong profit of $3.2 billion in 2018, it swung to losses in 2019 and 2020, registering -$353 million and -$2.7 billion respectively. Recovery ensued with a net income of $2.8 billion in 2021, followed by a substantial increase to $6 billion in 2022, indicating strong profitability rebound and growth.
Net earnings (loss) from discontinued operations: Discontinued operations showed large negative impact in 2018 (-$2.46 billion) but shifted to positive contributions in 2019 and 2020 ($274 million and $128 million), after which data is missing. This suggests divestiture or major restructuring affecting earnings during those years.
Depreciation, depletion, and amortization: This expense showed a decreasing trend during 2018-2020 from $1.66 billion to $1.3 billion, then increased sharply in 2021 and 2022 up to $2.2 billion, possibly reflecting expanded asset base or updated valuation methods.
Asset and leasehold impairments: Asset impairments were notable in 2018 ($156 million) and spiked markedly in 2020 to $2.7 billion, suggesting significant write-downs that year. Leasehold impairments peaked in 2020 as well with $152 million, but remained relatively minor in other years, indicating targeted asset reviews or industry-related pressures during 2020.
Accretion (amortization) of liabilities: Values were positive and declining from 2018 to 2020, then turned negative in 2021 and 2022 (-$27 million and -$31 million), possibly reflecting changes in liability management or adjustments in obligations.
Gains/losses on commodity derivatives and cash settlements: Total gains/losses on commodity derivatives swung from a gain of $608 million in 2018 to a loss of $454 million in 2019, fluctuated thereafter, and rose to $1.5 billion loss in 2021 before improving to a loss of $658 million in 2022. Cash settlements followed a different pattern with losses increasing in 2020 ($316 million) and turning into large inflows in 2021 and 2022 (-$1.4 billion and -$1.3 billion negative cash settlements), indicating significant volatility in commodity hedging impacts.
Deferred income tax expense (benefit): This line showed fluctuating patterns with expense in 2018 ($226 million), benefits in 2019 and 2020 (-$25 million and -$328 million), and then increasing expenses in 2021 and 2022 ($49 million and $1.2 billion), reflecting changes in tax positions due to earnings volatility and possible tax strategy shifts.
Share-based compensation: Compensation costs declined steadily from $161 million in 2018 to $88 million in 2022, indicating potential cost control or changes in share-based benefit programs.
Working capital components and changes: Accounts receivable and other current assets showed fluctuating and sometimes negative changes indicating cash flow timing or collection issues. Accounts payable and related liabilities grew notably in 2021 ($539 million) but moderated in 2022, suggesting increased payables or operational scaling that year. The overall net changes in assets and liabilities have been consistently negative, reflecting cash outflows for working capital needs.
Cash flows from operating activities: Operating cash flow started at $2.2 billion in 2018, dipped to $1.5 billion in 2020, then surged to $4.9 billion in 2021 and $8.5 billion in 2022, reflecting strong operational cash generation correlated with the rebound in net earnings.
Capital expenditures and investment activities: Capital expenditures decreased from $2.45 billion in 2018 to a low of $1.15 billion in 2020, then increased again to $2.5 billion in 2022. Acquisition of property and equipment was low until a significant increase in 2022 to $2.58 billion, suggesting major investment or expansion efforts. Divestitures remained relatively small. Net cash from investing activities showed persistent outflows, especially large in 2022 (-$5.1 billion), consistent with increased asset purchases and investments.
Financing activities: Financing cash flows showed large outflows in most years, particularly in 2018 and 2021 with repayments, debt retirements, stock repurchases, and heavy dividend payments. Dividends escalated significantly in 2021 and 2022 to $1.3 billion and $3.4 billion respectively, indicating an aggressive capital return strategy. Overall, net cash from financing activities remained negative, highlighting substantial cash deployed to investors and debt reduction.
Cash and cash equivalents: The cash balance at the beginning of periods gradually declined from $2.68 billion in 2018 to $1.45 billion by the end of 2022. Net changes in cash were negative or low in most years except for a notable positive change in 2020. The downward trend in ending cash balances despite increasing cash from operations suggests aggressive reinvestment and shareholder distributions.
Summary: Overall, the financial data reveals a company that moved through a challenging period around 2019-2020, marked by losses and large impairments, followed by a robust recovery in earnings and cash flow in 2021 and 2022. Operational cash generation improved markedly, supporting increased capital expenditures and substantial returns to shareholders through dividends and stock repurchases. The investment in property and equipment intensified sharply in 2022, likely reflecting growth initiatives. Liquidity management appears cautious with a decline in cash reserves, balanced by strong operating inflows and proactive financing to reduce debt burden. The volatility in derivative gains and commodity-related settlements underscores the industry's exposure to commodity price fluctuations affecting earnings and cash flow volatility.

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Devon Energy Corp. (NYSE:DVN)

Cash Flow Statement