Devon Energy (DVN) 8-K Devon Energy Reports Fourth-Quarter and Full-Year 2019 Financial and Operational Results

Exhibit 99.3

SUPPLEMENTAL TABLES

FOURTH-QUARTER AND FULL-YEAR 2019

TABLE OF CONTENTS:	PAGE:
Income Statement		2
Cash Flow Statement		3
Balance Sheet		4
Production by Asset		5
Capital, Costs Incurred and Reserves Reconciliation		6
Well Activity by Asset		7
Realized Price by Asset		8
Per-Unit Cash Margin by Asset		9
Non-GAAP Core Earnings		10
Non-GAAP EBITDAX, Net Debt and Free Cash Flow		11

CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except per share amounts)	2019															2018
	Quarter 4			Quarter 3			Quarter 2			Quarter 1			Full Year			Quarter 4
Upstream revenues (1)	$	919		$	1,046		$	1,076		$	314		$	3,355		$	2,416
Marketing and midstream revenues		670			700			730			765			2,865			1,114
Total revenues		1,589			1,746			1,806			1,079			6,220			3,530
Production expenses(2)		324			294			296			283			1,197			295
Exploration expenses		29			18			7			4			58			24
Marketing and midstream expenses		665			684			713			750			2,812			1,105
Depreciation, depletion and amortization		382			381			374			360			1,497			318
Asset dispositions		—			(1	)		(2	)		(45	)		(48	)		(242	)
General and administrative expenses		119			107			114			135			475			136
Financing costs, net		64			60			66			60			250			59
Restructuring and transaction costs		11			10			12			51			84			6
Other expenses		16			3			7			(22	)		4			30
Total expenses		1,610			1,556			1,587			1,576			6,329			1,731
Earnings (loss) from continuing operations before income taxes		(21	)		190			219			(497	)		(109	)		1,799
Income tax expense (benefit)		(33	)		54			68			(119	)		(30	)		421
Net earnings (loss) from continuing operations		12			136			151			(378	)		(79	)		1,378
Net earnings (loss) from discontinued operations, net of taxes		(652	)		(27	)		344			61			(274	)		(229	)
Net earnings (loss)		(640	)		109			495			(317	)		(353	)		1,149
Net earnings attributable to noncontrolling interests		2			—			—			—			2			—
Net earnings (loss) attributable to Devon	$	(642	)	$	109		$	495		$	(317	)	$	(355	)	$	1,149
Basic net earnings (loss) per share:
Continuing operations	$	0.03		$	0.34		$	0.37		$	(0.89	)	$	(0.21	)	$	3.00
Discontinued operations		(1.73	)		(0.07	)		0.83			0.15			(0.68	)		(0.50	)
Basic net earnings (loss) per share	$	(1.70	)	$	0.27		$	1.20		$	(0.74	)	$	(0.89	)	$	2.50
Diluted net earnings (loss) per share:
Continuing operations	$	0.03		$	0.34		$	0.37		$	(0.89	)	$	(0.21	)	$	2.98
Discontinued operations		(1.73	)		(0.07	)		0.82			0.15			(0.68	)		(0.50	)
Diluted net earnings (loss) per share	$	(1.70	)	$	0.27		$	1.19		$	(0.74	)	$	(0.89	)	$	2.48
Weighted average common shares outstanding:
Basic		383			397			415			434			407			459
Diluted		385			399			417			434			407			462

(1) UPSTREAM REVENUES
(in millions)	2019													2018
	Quarter 4			Quarter 3		Quarter 2		Quarter 1			Full Year			Quarter 4
Oil, gas and NGL sales	$	1,035		$	919	$	936	$	919		$	3,809		$	983
Derivative cash settlements		42			71		23		34			170			(16	)
Derivative valuation changes		(158	)		56		117		(639	)		(624	)		1,449
Upstream revenues	$	919		$	1,046	$	1,076	$	314		$	3,355		$	2,416

(2) PRODUCTION EXPENSES
(in millions)	2019										2018
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Full Year		Quarter 4
Lease operating expense	$	120	$	118	$	114	$	110	$	462	$	125
Gathering, processing & transportation		131		112		111		109		463		105
Production taxes		69		58		64		60		251		61
Property taxes		4		6		7		4		21		4
Production expenses	$	324	$	294	$	296	$	283	$	1,197	$	295

2

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)	2019
	Quarter 4			Quarter 3			Quarter 2			Quarter 1			Full Year
Cash flows from operating activities:
Net earnings (loss)	$	(640	)	$	109		$	495		$	(317	)	$	(353	)
Reconciliation of net earnings (loss) to net cash from operating activities:
Net (earnings) loss from discontinued operations, net of income taxes		652			27			(344	)		(61	)		274
Depreciation, depletion and amortization		382			381			374			360			1,497
Leasehold impairments		3			13			1			1			18
Accretion on discounted liabilities		8			8			8			9			33
Total (gains) losses on commodity derivatives		116			(127	)		(140	)		605			454
Cash settlements on commodity derivatives		41			71			23			31			166
Gains on asset dispositions		—			(1	)		(2	)		(45	)		(48	)
Deferred income tax expense (benefit)		(27	)		52			65			(115	)		(25	)
Share-based compensation		24			24			23			44			115
Other		2			2			4			(14	)		(6	)
Changes in assets and liabilities, net		18			36			(75	)		(61	)		(82	)
Net cash from operating activities - continuing operations		579			595			432			437			2,043
Cash flows from investing activities:
Capital expenditures		(408	)		(526	)		(486	)		(490	)		(1,910	)
Acquisitions of property and equipment		(3	)		(5	)		(13	)		(10	)		(31	)
Divestitures of property and equipment		43			9			28			310			390
Net cash from investing activities - continuing operations		(368	)		(522	)		(471	)		(190	)		(1,551	)
Cash flows from financing activities:
Repayments of long-term debt		—			—			—			(162	)		(162	)
Repurchases of common stock		(103	)		(560	)		(187	)		(999	)		(1,849	)
Dividends paid on common stock		(34	)		(35	)		(37	)		(34	)		(140	)
Contributions from noncontrolling interests		116			—			—			—			116
Shares exchanged for tax withholdings and other		(3	)		(1	)		(3	)		(19	)		(26	)
Net cash from financing activities - continuing operations		(24	)		(596	)		(227	)		(1,214	)		(2,061	)
Net change in cash, cash equivalents and restricted cash of continuing operations		187			(523	)		(266	)		(967	)		(1,569	)
Cash flows from discontinued operations:
Operating activities		(8	)		(95	)		190			(59	)		28
Investing activities		—			(5	)		2,536			(59	)		2,472
Financing activities		—			(1,571	)		—			(7	)		(1,578	)
Effect of exchange rate changes on cash		9			(3	)		38			1			45
Net change in cash, cash equivalents and restricted cash of discontinued operations		1			(1,674	)		2,764			(124	)		967
Net change in cash, cash equivalents and restricted cash		188			(2,197	)		2,498			(1,091	)		(602	)
Cash, cash equivalents and restricted cash at beginning of period		1,656			3,853			1,355			2,446			2,446
Cash, cash equivalents and restricted cash at end of period	$	1,844		$	1,656		$	3,853		$	1,355		$	1,844
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	1,464		$	1,375		$	3,470		$	1,327		$	1,464
Cash restricted for discontinued operations		380			280			370			—			380
Restricted cash included in other current assets		—			1			13			28			—
Total cash, cash equivalents and restricted cash	$	1,844		$	1,656		$	3,853		$	1,355		$	1,844

3

CONSOLIDATED BALANCE SHEETS

(in millions)	December 31,			December 31,
	2019			2018
Current assets:
Cash and cash equivalents	$	1,464		$	2,414
Cash restricted for discontinued operations		380			—
Accounts receivable		832			812
Current assets associated with discontinued operations		896			331
Other current assets		279			880
Total current assets		3,851			4,437
Oil and gas property and equipment, based on successful efforts accounting, net		7,558			7,430
Other property and equipment, net		1,035			1,032
Total property and equipment, net		8,593			8,462
Goodwill		753			753
Right-of-use assets		243			—
Other long-term assets		196			276
Long-term assets associated with discontinued operations		81			5,638
Total assets	$	13,717		$	19,566
Current liabilities:
Accounts payable	$	428		$	530
Revenues and royalties payable		730			722
Short-term debt		—			162
Current liabilities associated with discontinued operations		459			492
Other current liabilities		310			320
Total current liabilities		1,927			2,226
Long-term debt		4,294			4,292
Lease liabilities		244			—
Asset retirement obligations		380			468
Other long-term liabilities		426			411
Long-term liabilities associated with discontinued operations		185			2,454
Deferred income taxes		341			529
Stockholders’ equity:
Common stock		38			45
Additionalpaid-in capital		2,735			4,486
Retained earnings		3,148			3,650
Accumulated other comprehensive earnings (loss)		(119	)		1,027
Treasury stock, at cost, 1.0 million shares in 2018		—			(22	)
Total stockholders’ equity attributable to Devon		5,802			9,186
Noncontrolling interests		118			—
Total equity		5,920			9,186
Total liabilities and equity	$	13,717		$	19,566
Common shares outstanding		382			450

4

PRODUCTION TREND

	2019								2018
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Oil (MBbls/d)
Delaware Basin		84		70		67		60		45
STACK		27		32		31		32		31
Powder River Basin		20		18		15		15		13
Eagle Ford		23		22		23		25		30
Other		6		6		6		6		6
New Devon		160		148		142		138		125
Divest assets		3		3		2		3		7
Total		163		151		144		141		132
Natural gas liquids (MBbls/d)
Delaware Basin		32		28		27		23		18
STACK		30		37		40		35		37
Powder River Basin		2		2		2		2		2
Eagle Ford		9		11		12		12		15
Other		1		1		1		1		1
New Devon		74		79		82		73		73
Divest assets		—		—		—		1		1
Total		74		79		82		74		74
Gas (MMcf/d)
Delaware Basin		234		167		158		146		127
STACK		295		317		313		333		343
Powder River Basin		28		28		22		18		20
Eagle Ford		76		75		81		83		95
Other		1		1		1		1		2
New Devon		634		588		575		581		587
Divest assets		3		3		3		7		14
Total		637		591		578		588		601
Total oil equivalent (MBoe/d)
Delaware Basin		154		127		120		107		84
STACK		107		121		124		123		126
Powder River Basin		27		25		21		21		18
Eagle Ford		45		45		49		50		61
Other		7		7		7		7		6
New Devon		340		325		321		308		295
Divest assets		3		3		3		5		11
Total		343		328		324		313		306

	2019									2018
	Quarter 4		Quarter  3		Quarter 2		Quarter  1			Quarter  4
Barnett divest assets (discontinued operations)
Oil (MBbls/d)		—		—		1		1			1
Natural gas liquids (MBbls/d)		30		30		30		30	��		31
Gas (MMcf/d)		408		414		420		432			443
Total oil equivalent (MBoe/d)		98		100		100		103			105

5

CAPITAL EXPENDITURES

(in millions)	2019								2018
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin	$	170	$	262	$	235	$	240	$	253
STACK		38		67		94		112		195
Powder River Basin		89		89		87		48		56
Eagle Ford		65		90		53		48		32
Other		11		11		9		9		6
New Devon upstream capital		373		519		478		457		542
Divest assets upstream capital - US		1		1		3		3		3
Total upstream capital		374		520		481		460		545
Land and other acquisitions		3		12		14		7		35
Other		14		30		22		6		6
Total capital	$	391	$	562	$	517	$	473	$	586

COSTS INCURRED

(in millions)

	Year Ended December 31,
	2019		2018
Property acquisition costs:
Proved properties	$	—	$	2
Unproved properties		35		70
Exploration costs		312		679
Development costs		1,499		1,505
Costs incurred	$	1,846	$	2,256

RESERVES RECONCILIATION

	Oil (MMBbls)			Gas (Bcf)			NGL (MMBbls)			Total (MMBoe)
As of December 31, 2018:
Proved developed		196			1,427			166			600
Proved undeveloped		100			375			61			223
Total Proved		296			1,802			227			823
Revisions due to prices		(7	)		(86	)		(6	)		(28	)
Revisions other than price		(13	)		(50	)		(9	)		(31	)
Extensions and discoveries		76			269			39			160
Purchase of reserves		3			7			1			6
Production		(55	)		(219	)		(28	)		(119	)
Sale of reserves		(24	)		(102	)		(13	)		(54	)
As of December 31, 2019:
Proved developed		198			1,344			167			589
Proved undeveloped		78			277			44			168
Total Proved		276			1,621			211			757

6

GROSS OPERATED SPUDS

	2019								2018
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin		24		38		23		39		31
STACK		—		4		16		18		17
Powder River Basin		19		14		17		9		12
Eagle Ford		25		18		31		12		5
New Devon		68		74		87		78		65

GROSS OPERATED WELLSTIED-IN

	2019								2018
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin		36		34		28		25		27
STACK		9		16		21		29		25
Powder River Basin		19		18		6		3		8
Eagle Ford		21		—		9		18		10
New Devon		85		68		64		75		70

NET OPERATED WELLSTIED-IN

	2019								2018
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin		25		30		24		18		21
STACK		7		7		14		20		18
Powder River Basin		15		6		12		2		6
Eagle Ford		11		—		4		9		5
New Devon		58		43		54		49		50

AVERAGE LATERAL LENGTH

(based on wellstied-in)

	2019								2018
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin		8,000’		9,700’		7,500’		8,500’		8,800’
STACK		11,200’		9,600’		9,000’		9,000’		8,400’
Powder River Basin		9,700’		9,500’		9,500’		10,000’		9,500’
Eagle Ford		6,600’		N/A		6,000’		6,000’		6,500’
New Devon		8,400’		9,600’		8,000’		8,000’		8,400’

7

BENCHMARK PRICES

(average prices)

	2019								2018
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	57.02	$	56.34	$	59.85	$	54.88	$	58.80
Natural Gas ($/Mcf) - Henry Hub	$	2.50	$	2.23	$	2.64	$	3.15	$	3.65
NGL ($/Bbl) - Mont Belvieu Blended	$	18.69	$	16.18	$	19.05	$	22.94	$	26.30

REALIZED PRICES

	2019										2018
	Quarter 4		Quarter 3		Quarter 2			Quarter 1			Quarter 4
Oil (Per Bbl)
Delaware Basin	$	56.23	$	53.85	$	55.54		$	49.48		$	49.04
STACK		55.71		54.47		57.67			52.82			58.83
Powder River Basin		52.02		52.50		56.79			49.21			55.62
Eagle Ford		55.11		57.77		61.60			59.45			65.46
Other		56.52		54.57		56.12			48.77			48.09
New Devon		55.46		54.43		57.17			51.99			56.08
U.S. divest assets		52.21		52.79		53.01			45.60			49.94
Realized price without hedges		55.41		54.40		57.11			51.83			55.77
Cash settlements		1.48		2.18		(0.41	)		3.65			0.79
Realized price, including cash settlements	$	56.89	$	56.58	$	56.70		$	55.48		$	56.56
Natural gas liquids (Per Bbl)
Delaware Basin	$	13.30	$	10.27	$	13.77		$	17.64		$	21.24
STACK		17.47		12.61		15.55			18.43			22.57
Powder River Basin		17.36		15.01		17.74			19.64			22.76
Eagle Ford		18.84		13.77		15.84			19.77			23.90
Other		14.49		12.79		9.80			11.94			16.26
New Devon		15.81		12.02		15.00			18.33			22.42
U.S. divest assets		N/M		12.50		20.40			21.36			17.12
Realized price without hedges		15.79		12.02		15.00			18.36			22.32
Cash settlements		1.75		2.55		1.40			0.67			0.25
Realized price, including cash settlements	$	17.54	$	14.57	$	16.40		$	19.03		$	22.57
Gas (Per Mcf)
Delaware Basin	$	1.22	$	0.90	$	(0.05	)	$	1.84		$	1.68
STACK		1.81		1.54		1.74			2.76			2.94
Powder River Basin		2.51		1.96		2.16			2.92			3.85
Eagle Ford		2.52		2.26		2.56			3.39			3.82
Other		0.88		0.99		0.21			1.10			1.28
New Devon		1.71		1.47		1.37			2.62			2.84
U.S. divest assets		N/M		2.56		2.33			2.30			2.01
Realized price without hedges		1.70		1.47		1.38			2.62			2.82
Cash settlements		0.13		0.41		0.34			(0.31	)		(0.49	)
Realized price, including cash settlements	$	1.83	$	1.88	$	1.72		$	2.31		$	2.33
Total oil equivalent (Per Boe)
Delaware Basin	$	35.05	$	33.48	$	33.94		$	33.92		$	33.30
STACK		24.28		22.07		23.96			26.65			29.40
Powder River Basin		42.45		41.20		45.44			41.69			46.27
Eagle Ford		36.51		35.10		37.50			39.41			44.20
Other		47.99		46.41		47.43			42.03			41.53
New Devon		32.72		30.32		31.68			32.60			34.85
U.S. divest assets		43.20		45.35		44.71			35.49			36.82
Realized price without hedges		32.82		30.47		31.79			32.65			34.92
Cash settlements		1.32		2.34		0.79			1.22			(0.56	)
Realized price, including cash settlements	$	34.14	$	32.81	$	32.58		$	33.87		$	34.36

8

BENCHMARK PRICES

(average prices)

	2019								2018
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	57.02	$	56.34	$	59.85	$	54.88	$	58.80
Natural Gas ($/Mcf) - Henry Hub	$	2.50	$	2.23	$	2.64	$	3.15	$	3.65
NGL ($/Bbl) - Mont Belvieu Blended	$	18.69	$	16.18	$	19.05	$	22.94	$	26.30

FIELD-LEVEL CASH MARGIN (per Boe)

	2019												2018
	Quarter 4			Quarter 3			Quarter 2			Quarter 1			Quarter 4
Delaware Basin
Realized price	$	35.05		$	33.48		$	33.94		$	33.92		$	33.30
Lease operating expenses		(3.36	)		(4.17	)		(4.33	)		(4.58	)		(6.03	)
Gathering, processing & transportation		(2.59	)		(2.20	)		(2.31	)		(2.23	)		(2.06	)
Production & property taxes		(2.80	)		(2.69	)		(2.84	)		(2.72	)		(2.73	)
Field-level cash margin	$	26.30		$	24.42		$	24.46		$	24.39		$	22.48
STACK
Realized price	$	24.28	��	$	22.07		$	23.96		$	26.65		$	29.40
Lease operating expenses		(2.24	)		(2.08	)		(1.84	)		(1.87	)		(1.84	)
Gathering, processing & transportation		(5.98	)		(5.05	)		(5.10	)		(5.18	)		(4.62	)
Production & property taxes		(1.00	)		(0.86	)		(1.25	)		(1.33	)		(1.30	)
Field-level cash margin	$	15.06		$	14.08		$	15.77		$	18.27		$	21.64
Powder River Basin
Realized price	$	42.45		$	41.20		$	45.44		$	41.69		$	46.27
Lease operating expenses		(5.00	)		(7.28	)		(6.95	)		(8.00	)		(6.58	)
Gathering, processing & transportation		(3.40	)		(2.07	)		(1.71	)		(1.70	)		(1.89	)
Production & property taxes		(5.19	)		(4.73	)		(4.99	)		(4.97	)		(5.39	)
Field-level cash margin	$	28.86		$	27.12		$	31.79		$	27.02		$	32.41
Eagle Ford
Realized price	$	36.51		$	35.10		$	37.50		$	39.41		$	44.20
Lease operating expenses		(4.52	)		(3.20	)		(2.85	)		(2.81	)		(2.69	)
Gathering, processing & transportation		(6.52	)		(5.93	)		(5.59	)		(5.84	)		(5.72	)
Production & property taxes		(1.75	)		(1.95	)		(2.43	)		(2.23	)		(2.44	)
Field-level cash margin	$	23.72		$	24.02		$	26.63		$	28.53		$	33.35
Other
Realized price	$	47.99		$	46.41		$	47.43		$	42.03		$	41.53
Lease operating expenses		(15.63	)		(15.06	)		(20.34	)		(17.05	)		(17.29	)
Gathering, processing & transportation		(0.22	)		(0.29	)		(0.09	)		(0.31	)		(0.22	)
Production & property taxes		(2.55	)		(3.30	)		(4.33	)		(3.28	)		(3.73	)
Field-level cash margin	$	29.59		$	27.76		$	22.67		$	21.39		$	20.29
New Devon - Total
Realized price	$	32.72		$	30.32		$	31.68		$	32.60		$	34.85
Lease operating expenses		(3.55	)		(3.73	)		(3.66	)		(3.72	)		(3.85	)
Gathering, processing & transportation		(4.19	)		(3.74	)		(3.80	)		(3.92	)		(3.85	)
Production & property taxes		(2.28	)		(2.06	)		(2.34	)		(2.25	)		(2.25	)
Field-level cash margin	$	22.70		$	20.79		$	21.88		$	22.71		$	24.90

9

NON-GAAP FINANCIAL MEASURES

This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.

CORE EARNINGS

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 these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on fourth-quarter 2019 earnings.

	Quarter Ended December 31, 2019
(in millions, except per share amounts)	Before-tax			After-tax			After Noncontrolling Interests			Per Diluted Share
Continuing Operations
Net earnings (GAAP)	$	(21	)	$	12		$	10		$	0.03
Adjustments:
Asset and exploration impairments		3			3			3			0.01
Deferred tax asset valuation allowance		—			(2	)		(2	)		(0.01	)
Fair value changes in financial instruments		159			121			121			0.31
Restructuring and transaction costs		11			8			8			0.02
Core earnings (Non-GAAP)	$	152		$	142		$	140		$	0.36
Discontinued Operations
Net loss (GAAP)	$	(724	)	$	(652	)	$	(652	)	$	(1.73	)
Adjustments:
Asset dispositions		—			54			54			0.14
Asset and exploration impairments		748			586			586			1.55
Deferred tax asset valuation allowance		—			1			1			0.01
Foreign currency and other		(5	)		(4	)		(4	)		(0.01	)
Restructuring and transaction costs		4			3			3			0.01
Core loss (Non-GAAP)	$	23		$	(12	)	$	(12	)	$	(0.03	)
Total
Net loss (GAAP)	$	(745	)	$	(640	)	$	(642	)	$	(1.70	)
Adjustments:
Continuing Operations		173			130			130			0.33
Discontinued Operations		747			640			640			1.70
Core earnings (Non-GAAP)	$	175		$	130		$	128		$	0.33

10

EBITDAX

Devon believes EBITDAX provides information useful in assessing operating and financial performance across periods. Devon computes EBITDAX as net earnings from continuing operations before income tax expense; financing costs, net; exploration expenses; depreciation, depletion and amortization; asset impairments; asset disposition gains and losses;non-cash share-based compensation;non-cash valuation changes for derivatives and financial instruments; restructuring and transaction costs; accretion on discounted liabilities; and other items not related to normal operations. EBITDAX as defined by Devon may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net earnings from continuing operations.

(in millions)	Q4’19			Q3’19			Q2’19			Q1’19			2019
Net earnings (loss) (GAAP)	$	(640	)	$	109		$	495		$	(317	)	$	(353	)
Net (earnings) loss from discontinued operations, net of tax		652			27			(344	)		(61	)		274
Financing costs, net		64			60			66			60			250
Income tax expense (benefit)		(33	)		54			68			(119	)		(30	)
Exploration expenses		29			18			7			4			58
Depreciation, depletion and amortization		382			381			374			360			1,497
Asset dispositions		—			(1	)		(2	)		(45	)		(48	)
Share-based compensation		19			20			21			23			83
Derivative and financial instrumentnon-cash valuation changes		159			(57	)		(117	)		638			623
Restructuring and transaction costs		11			10			12			51			84
Accretion on discounted liabilities and other		14			5			8			(22	)		5
EBITDAX (Non-GAAP)	$	657		$	626		$	588		$	572		$	2,443

NET DEBT

Devon defines net debt as debt less cash, cash equivalents and cash restricted for discontinued operations. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash from Devon to repay debt.

(in millions)	December 31, 2019			December 31, 2015
Total debt (GAAP)	$	4,294		$	13,032
Less:
Cash and cash equivalents		(1,464	)		(2,310	)
Cash restricted for discontinued operations		(380	)		—
Net debt (Non-GAAP)	$	2,450		$	10,722

FREE CASH FLOW

Devon defines free cash flow as total operating cash flow less capital expenditures. Devon believes that free cash flow provides a useful measure of available cash generated by operating activities for other investing and financing activities.

(in millions)	Quarter Ended December 31, 2019
Total operating cash flow (GAAP)	$	579
Less capital expenditures:
Capital expenditures		(408	)
Free cash flow (Non-GAAP)	$	171

11

GUIDANCE

FIRST-QUARTER AND FULL-YEAR 2020

PRODUCTION GUIDANCE

	Quarter 1				Full Year
	Low		High		Low		High
Oil (MBbls/d)		158		163		161		163
Natural gas liquids (MBbls/d)		72		76		72		76
Gas (MMcf/d)		590		620		570		600
Total oil equivalent (MBoe/d)		328		342		328		339

PRICE REALIZATIONS GUIDANCE

	Quarter 1						Full Year
	Low			High			Low			High
Oil - % of WTI		95	%		100	%		95	%		100	%
NGL - realized price	$	13.00		$	15.00		$	13.00		$	15.00
Natural gas - % of Henry Hub		55	%		65	%		50	%		70	%

OTHER GUIDANCE ITEMS

	Quarter 1						Full Year
($ millions, except Boe and %)	Low			High			Low			High
Marketing & midstream operating profit	$	(5	)	$	5		$	(10	)	$	10
LOE & GP&T per BOE(1)	$	8.10	(1)	$	8.30	(1)	$	8.00	(1)	$	8.20	(1)
Production & property taxes as % of upstream sales		7.8	%		8.0	%		7.8	%		8.0	%
Exploration expenses	$	5		$	10		$	15		$	25
Depreciation, depletion and amortization	$	400		$	425		$	1,600		$	1,700
General & administrative expenses	$	110		$	120		$	360		$	400
Financing costs, net	$	60		$	70		$	250		$	270
Other expenses	$	10		$	20		$	40		$	50
Current income tax rate from continuing operations		0	%		0	%		0	%		0	%
Deferred income tax rate from continuing operations		20	%		30	%		20	%		30	%
Total income tax rate from continuing operations		20	%		30	%		20	%		30	%

 (1) In the first quarter 2020 and full-year 2020, Devon expects to incur approximately $15 million and $65 million of minimum volume commitments related to its STACK asset. These commitments are expected to impact GP&T rates by approximately $0.55 per Boe in 2020. These commitments will expire at the end of 2020.

 Note: In the first quarter of 2020, Devon expects to pay approximately $200 million for income taxes and other minor expenses related to its divested  Canadian operations. These payments will be represented in discontinued operations.

CAPITAL EXPENDITURES GUIDANCE
	Quarter 1				Full Year
(in millions)		Low		High		Low		High
Upstream capital	$	420	$	470	$	1,700	$	1,850
Other		5		10		20		30
Total	$	425	$	480	$	1,720	$	1,880

1

Oil Commodity Hedges

	Price Swaps			Price Collars
Period	Volume (Bbls/d)	Weighted Average Price ($/Bbl)		Volume (Bbls/d)	Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q1-Q4 2020	14,750	$	58.34	52,500	$	51.69	$	61.74
Q1-Q4 2021	1,750	$	55.04	7,500	$	50.07	$	60.07

Oil Basis Swaps

Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q1-Q4 2020	Argus MEH		10,000	$	3.38
Q1-Q4 2020	Midland Sweet		3,000	$	1.11
Q1-Q4 2020	NYMEX Roll		52,000	$	0.37
Q1-Q4 2021	Midland Sweet		1,000	$	1.25

Natural Gas Commodity Hedges - Henry Hub

	Price Swaps			Price Collars
Period	Volume (MMBtu/d)	Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)	Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)
Q1-Q4 2020	81,600	$	2.77	50,250	$	2.63	$	2.96
Q1-Q4 2021	—		—	7,500	$	2.08	$	2.58

Natural Gas Basis Swaps

Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q1-Q4 2020	Panhandle Eastern Pipe Line		30,000	$	(0.47	)
Q1-Q4 2020	El Paso Natural Gas		45,000	$	(0.70	)
Q1-Q4 2020	Houston Ship Channel		18,352	$	(0.01	)

NGL Commodity Hedges

		Price Swaps
Period	Product	Volume (Bbls/d)		Weighted Average     Price ($/Bbl)
Q1-Q4 2020	Natural Gasoline		1,000	$	44.84
Q1-Q4 2020	Normal Butane		1,500	$	23.56
Q1-Q4 2020	Propane		4,500	$	25.18

Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC first of the month Henry Hub index. Devon’s NGL derivatives settle against the average of the prompt month OPIS Mont Belvieu, Texas index. Commodity hedge positions are shown as of February 6, 2020.

2