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

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.

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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).

Operating cash flow demonstrated significant growth and volatility over the five-year period, reflecting a strong recovery following a trough in 2020. Net earnings shifted from substantial losses in 2019 and 2020 to record highs by 2022, reaching 6.04 billion US dollars. This recovery was mirrored in the net cash from operating activities, which expanded from 1.46 billion US dollars in 2020 to 8.53 billion US dollars in 2022.

Operating Cash Flow Dynamics: The reconciliation of net earnings to operating cash flow was heavily influenced by non-cash charges and commodity volatility. Depreciation, depletion, and amortization served as a consistent positive adjustment, increasing from 1.66 billion US dollars in 2018 to 2.22 billion US dollars in 2022. A significant asset impairment of 2.69 billion US dollars in 2020 indicates a period of substantial asset devaluation. Additionally, commodity derivative settlements showed high variability, reflecting active hedging strategies to mitigate price fluctuations.
Investing Activities and Capital Deployment: Investing cash outflows remained relatively stable between 2018 and 2021, typically ranging between 1.1 billion and 1.6 billion US dollars. However, 2022 saw a dramatic increase in investing outflows to 5.12 billion US dollars. This spike was primarily driven by a surge in the acquisition of property and equipment, which rose to 2.58 billion US dollars in 2022, compared to only 8 million US dollars in 2020.
Financing and Shareholder Returns: A pivot in capital allocation strategy is observed between 2018 and 2022. In 2018, share repurchases were the dominant method of returning value, totaling 2.96 billion US dollars. By 2022, the emphasis shifted heavily toward dividends, which climbed from 149 million US dollars in 2018 to 3.38 billion US dollars. Debt management remained a priority in specific intervals, with a notable repayment of 1.24 billion US dollars in long-term debt occurring in 2021.
Liquidity and Cash Position: The overall cash position experienced a gradual decline over the period. Cash, cash equivalents, and restricted cash began at 2.68 billion US dollars in 2018 and ended at 1.45 billion US dollars in 2022. The net change in cash was negative in four of the five years analyzed, largely due to the combination of aggressive shareholder distributions and the intensified capital expenditure program initiated in 2022.

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