Devon Energy (DVN) 8-K Devon Energy Announces Three-Year Outlook and Detailed 2018 Guidance; Reports Fourth Quarter Earnings Results

Exhibit 99.3

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED COMPREHENSIVE STATEMENTS OF EARNINGS

	Quarter ended December 31, 2017
	Full Cost			Changes			Successful Efforts
	(millions)
Upstream revenues	$	1,333			—		$	1,333
Marketing and midstream revenues		2,650			—			2,650
Total revenues		3,983			—			3,983
Production expenses		463			—			463
Exploration expenses		—			171			171
Marketing and midstream expenses		2,378			—			2,378
Depreciation, depletion and amortization		417			111			528
Asset impairments		8			—			8
Asset dispositions		1			(19	)		(18	)
General and administrative expenses		174			48			222
Financing costs, net		124			2			126
Other expenses		15			(10	)		5
Total expenses		3,580			303			3,883
Earnings before income taxes		403			(303	)		100
Income tax benefit		(191	)		(13	)		(204	)
Net earnings		594			(290	)		304
Net earnings attributable to noncontrolling interests		121			—			121
Net earnings attributable to Devon	$	473			(290	)	$	183
Net earnings per share attributable to Devon:
Basic	$	0.90		$	(0.55	)	$	0.35
Diluted	$	0.89		$	(0.54	)	$	0.35
Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. Accordingly, the company also uses the measures of core earnings and core earnings per share attributable to Devon. Devon believes thesenon-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes thesenon-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The table below summarizes the effects of these items on fourth-quarter 2017 earnings.
Earnings attributable to Devon (GAAP)	$	0.89		$	(0.54	)	$	0.35
Adjustments:
Asset dispositions		—			(0.02	)		(0.02	)
Asset and exploration impairments		0.01			0.17			0.18
U.S. tax reform		(0.21	)��		—			(0.21	)
Deferred tax asset valuation allowance		0.04			0.14			0.18
Fair value changes in financial instruments and foreign currency		0.06			—			0.06
Legal entity restructuring		(0.16	)		—			(0.16	)
Core earnings attributable to Devon(Non-GAAP)(1)	$	0.63		$	(0.25	)	$	0.38
(1)   Thisnon-GAAP measure is not an alternative to the GAAP measure, and you should not consider thisnon-GAAP measure in isolation or as a substitute for analysis of our results as reported under GAAP. This measure is additional disclosure regarding thenon-GAAP measures used, including reconciliations to their most directly comparable GAAP measure.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Quarter Ended December 31, 2017
	Full Cost			Changes			Successful Efforts
	(millions)
Cash flows from operating activities:
Net earnings	$	594			(290	)	$	304
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation, depletion and amortization		417			111			528
Exploratory dry hole expense and unproved leasehold impairments		—			139			139
Asset impairments		8			—			8
Gains and losses on asset sales		1			(19	)		(18	)
Deferred income tax benefit		(232	)		(13	)		(245	)
Commodity derivatives		57			—			57
Cash settlements on commodity derivatives		10			—			10
Other derivatives and financial instruments		7			—			7
Cash settlements on other derivatives and financial instruments		(6	)		—			(6	)
Asset retirement obligation accretion		15			—			15
Share-based compensation		36			11			47
Other		26			(10	)		16
Net change in working capital		(73	)		—			(73	)
Change in long-term other assets		(58	)		—			(58	)
Change in long-term other liabilities		(6	)		—			(6	)
Net cash from operating activities		796			(71	)		725
Cash flows from investing activities:
Capital expenditures		(871	)		72			(799	)
Acquisitions of property, equipment and businesses		(7	)		—			(7	)
Divestitures of property and equipment		102			(1	)		101
Other		(7	)		—			(7	)
Net cash from investing activities		(783	)		71			(712	)
Cash flows from financing activities:
Borrowings of long-term debt, net of issuance costs		168			—			168
Repayments of long-term debt		(168	)		—			(168	)
Issuance of subsidiary units		15			—			15
Dividends paid on common stock		(32	)		—			(32	)
Contributions from noncontrolling interests		10			—			10
Distributions to noncontrolling interests		(107	)		—			(107	)
Shares exchanged for tax withholdings		(1	)		—			(1	)
Net cash from financing activities		(115	)		—			(115	)
Effect of exchange rate changes on cash		(6	)		—			(6	)
Net change in cash and cash equivalents		(108	)		—			(108	)
Cash and cash equivalents at beginning of period		2,781			—			2,781
Cash and cash equivalents at end of period	$	2,673			—		$	2,673

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31, 2017
	Full Cost		Changes			Successful Efforts
	(millions, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	2,673		—		$	2,673
Accounts receivable		1,670		—			1,670
Other current assets		448		—			448
Total current assets		4,791		—			4,791
Oil and gas property and equipment, based on successful efforts accounting, net		9,702		3,616			13,318
Midstream and other property and equipment, net		7,853		—			7,853
Total property and equipment, net		17,555		3,616			21,171
Goodwill		3,964		(1,581	)		2,383
Other long-term assets		1,896		—			1,896
Total assets	$	28,206		2,035		$	30,241
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	819		—		$	819
Revenues and royalties payable		1,180		—			1,180
Short-term debt		115		—			115
Other current liabilities		1,201		—			1,201
Total current liabilities		3,315		—			3,315
Long-term debt		10,291		—			10,291
Asset retirement obligations	��	1,113		—			1,113
Other long-term liabilities		583		—			583
Deferred income taxes		434		401			835
Equity:
Common stock, $0.10 par value. Authorized 1.0 billion shares; issued 525 million shares in 2017		53		—			53
Additionalpaid-in capital		7,206		127			7,333
Retained earnings		44		658			702
Accumulated other comprehensive earnings		317		849			1,166
Total stockholders’ equity attributable to Devon		7,620		1,634			9,254
Noncontrolling interests		4,850		—			4,850
Total equity		12,470		1,634			14,104
Total liabilities and equity	$	28,206		2,035		$	30,241

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED COMPREHENSIVE STATEMENTS OF EARNINGS

	2017, under Successful Efforts
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Full Year
	(millions, except per share amounts)
Upstream revenues	$	1,541		$	1,332		$	1,101		$	1,333		$	5,307
Marketing and midstream revenues		2,010			1,927			2,055			2,650			8,642
Total revenues		3,551			3,259			3,156			3,983			13,949
Production expenses		457			455			448			463			1,823
Exploration expenses		95			57			57			171			380
Marketing and midstream expenses		1,814			1,714			1,824			2,378			7,730
Depreciation, depletion and amortization		528			506			512			528			2,074
Asset impairments		7			—			2			8			17
Asset dispositions		(3	)		(27	)		(169	)		(18	)		(217	)
General and administrative expenses		233			214			203			222			872
Financing costs, net		128			116			128			126			498
Other expenses		(33	)		(20	)		(76	)		5			(124	)
Total expenses		3,226			3,015			2,929			3,883			13,053
Earnings before income taxes		325			244			227			100			896
Income tax expense (benefit)		8			(1	)		15			(204	)		(182	)
Net earnings		317			245			212			304			1,078
Net earnings attributable to noncontrolling interests		14			26			19			121			180
Net earnings attributable to Devon	$	303		$	219		$	193		$	183		$	898
Net earnings per share attributable to Devon:
Basic	$	0.58		$	0.41		$	0.37		$	0.35		$	1.71
Diluted	$	0.58		$	0.41		$	0.37		$	0.35		$	1.70
Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. Accordingly, the company also uses the measures of core earnings and core earnings per share attributable to Devon. Devon believes thesenon-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes thesenon-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The table below summarizes the effects of these items on 2017 quarterly earnings.
Earnings attributable to Devon (GAAP)	$	0.58		$	0.41		$	0.37		$	0.35		$	1.70
Adjustments:
Asset dispositions		(0.01	)		(0.03	)		(0.21	)		(0.02	)		(0.26	)
Asset and exploration impairments		0.06			0.02			0.02			0.18			0.27
U.S. tax reform		—			—			—			(0.21	)		(0.21	)
Deferred tax asset valuation allowance		(0.19	)		(0.10	)		(0.04	)		0.18			(0.14	)
Fair value changes in financial instruments and foreign currency		(0.31	)		(0.20	)		0.07			0.06			(0.38	)
Legal entity restructuring		—			—			—			(0.16	)		(0.16	)
Early retirement of debt		—			(0.01	)		—			—			(0.01	)
Core earnings attributable to Devon(Non-GAAP)(1)	$	0.13		$	0.09		$	0.21		$	0.38		$	0.81
(1)   Thisnon-GAAP measure is not an alternative to the GAAP measure, and you should not consider thisnon-GAAP measure in isolation or as a substitute for analysis of our results as reported under GAAP. This measure is additional disclosure regarding thenon-GAAP measures used, including reconciliations to their most directly comparable GAAP measure.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	2017, under Successful Efforts
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Full Year
	(millions)
Cash flows from operating activities:
Net earnings	$	317		$	245		$	212		$	304		$	1,078
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation, depletion and amortization		528			506			512			528			2,074
Exploratory dry hole expense and unproved leasehold impairments		42			22			16			139			219
Asset impairments		7			—			2			8			17
Gains and losses on asset sales		(3	)		(27	)		(169	)		(18	)		(217	)
Deferred income tax benefit		(12	)		(13	)		(24	)		(245	)		(294	)
Commodity derivatives		(232	)		(126	)		144			57			(157	)
Cash settlements on commodity derivatives		8			11			24			10			53
Other derivatives and financial instruments		(9	)		16			9			7			23
Cash settlements on other derivatives and financial instruments		(2	)		2			—			(6	)		(6	)
Asset retirement obligation accretion		17			14			16			15			62
Share-based compensation		55			53			43			47			198
Other		(6	)		(48	)		(84	)		16			(122	)
Net change in working capital		15			72			7			(73	)		21
Change in long-term other assets		1			9			2			(58	)		(46	)
Change in long-term other liabilities		20			2			(10	)		(6	)		6
Net cash from operating activities		746			738			700			725			2,909
Cash flows from investing activities:
Capital expenditures		(653	)		(649	)		(658	)		(799	)		(2,759	)
Acquisitions of property, equipment and businesses		(20	)		(13	)		(6	)		(7	)		(46	)
Divestitures of property and equipment		32			76			208			101			417
Proceeds from sale of investment		190			—			—			—			190
Other		(3	)		(1	)		(1	)		(7	)		(12	)
Net cash from investing activities		(454	)		(587	)		(457	)		(712	)		(2,210	)
Cash flows from financing activities:
Borrowings of long-term debt, net of issuance costs		813			982			413			168			2,376
Repayments of long-term debt		(587	)		(792	)		(571	)		(168	)		(2,118	)
Payment of installment payable		(250	)		—			—			—			(250	)
Early retirement of debt		—			(6	)		—			—			(6	)
Issuance of subsidiary units		55			17			414			15			501
Dividends paid on common stock		(32	)		(33	)		(30	)		(32	)		(127	)
Contributions from noncontrolling interests		21			8			18			10			57
Distributions to noncontrolling interests		(81	)		(82	)		(84	)		(107	)		(354	)
Shares exchanged for tax withholdings		(61	)		(3	)		(3	)		(1	)		(68	)
Other		(2	)		—			—			—			(2	)
Net cash from financing activities		(124	)		91			157			(115	)		9
Effect of exchange rate changes on cash		(8	)		8			12			(6	)		6
Net change in cash and cash equivalents		160			250			412			(108	)		714
Cash and cash equivalents at beginning of period		1,959			2,119			2,369			2,781			1,959
Cash and cash equivalents at end of period	$	2,119		$	2,369		$	2,781		$	2,673		$	2,673