Devon Energy (DVN) 8-K Devon Energy Reports 46 Percent Increase in Operating Cash Flow and Record Free Cash Flow Generation in Third-Quarter 2021

Exhibit 99.2

Devon Energy Third-Quarter 2021

Supplemental Tables

TABLE OF CONTENTS:	PAGE:
Income Statement		2
Supplemental Information for Income Statement		3
Cash Flow Statement		4
Balance Sheet		5
Production by Asset		6
Capital and Well Activity by Asset		7
Realized Price by Asset		8
Per-Unit Cash Margin by Asset		9
Non-GAAP Core Earnings (Loss), Non-GAAP EBITDAX and Net Debt		10
Net Debt-to-EBITDAX, Free Cash Flow, Reinvestment Rate and Variable Dividend		11

1

CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except per share amounts)	2021									2020
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Oil, gas and NGL sales	$	2,635		$	2,154		$	1,757		$	786		$	678
Oil, gas and NGL derivatives (1)		(335	)		(703	)		(528	)		(117	)		(87	)
Marketing and midstream revenues		1,166			966			821			611			476
Total revenues		3,466			2,417			2,050			1,280			1,067
Production expenses (2)		555			513			458			271			271
Exploration expenses		3			3			3			4			39
Marketing and midstream expenses		1,165			965			842			618			478
Depreciation, depletion and amortization		578			536			467			301			299
Asset impairments		—			—			—			27			—
Asset dispositions		—			(87	)		(32	)		(1	)		—
General and administrative expenses		95			94			107			82			75
Financing costs, net (3)		86			80			77			70			66
Restructuring and transaction costs		18			23			189			17			32
Other, net		2			(14	)		(29	)		1			—
Total expenses		2,502			2,113			2,082			1,390			1,260
Earnings (loss) from continuing operations before income taxes		964			304			(32	)		(110	)		(193	)
Income tax expense (benefit)		120			43			(248	)		(37	)		(90	)
Net earnings (loss) from continuing operations		844			261			216			(73	)		(103	)
Net earnings (loss) from discontinued operations, net of taxes		—			—			—			(25	)		13
Net earnings (loss)		844			261			216			(98	)		(90	)
Net earnings attributable to noncontrolling interests		6			5			3			4			2
Net earnings (loss) attributable to Devon	$	838		$	256		$	213		$	(102	)	$	(92	)
Basic net earnings (loss) per share:
Continuing operations	$	1.24		$	0.38		$	0.33		$	(0.20	)	$	(0.29	)
Discontinued operations		—			—			—			(0.07	)		0.04
Basic net earnings (loss) per share	$	1.24		$	0.38		$	0.33		$	(0.27	)	$	(0.25	)
Diluted net earnings (loss) per share:
Continuing operations	$	1.24		$	0.38		$	0.32		$	(0.20	)	$	(0.29	)
Discontinued operations		—			—			—			(0.07	)		0.04
Diluted net earnings (loss) per share	$	1.24		$	0.38		$	0.32		$	(0.27	)	$	(0.25	)
Weighted average common shares outstanding:
Basic		677			677			654			383			383
Diluted		679			679			656			383			383

2

SUPPLEMENTAL INFORMATION FOR CONSLIDATED STATEMENTS OF EARNINGS

(1) OIL, GAS AND NGL DERIVATIVES
(in millions)	2021									2020
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Derivative cash settlements	$	(370	)	$	(367	)	$	(232	)	$	(27	)	$	10
Derivative valuation changes		35			(336	)		(296	)		(90	)		(97	)
Oil, gas and NGL derivatives	$	(335	)	$	(703	)	$	(528	)	$	(117	)	$	(87	)

(2) PRODUCTION EXPENSES
(in millions)	2021						2020
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Lease operating expense	$	215	$	210	$	199	$	91	$	100
Gathering, processing & transportation		157		147		129		130		125
Production taxes		176		143		117		47		42
Property taxes		7		13		13		3		4
Production expenses	$	555	$	513	$	458	$	271	$	271

(3) FINANCING COSTS, NET
(in millions)	2021									2020
	Quarter 3			Quarter 2			Quarter 1			Quarter 4		Quarter 3
Interest based on outstanding debt	$	93		$	98		$	105		$	65	$	65
Gain on early retirement of debt		—			(10	)		(20	)		—		—
Interest income		(1	)		—			(1	)		—		(5	)
Other		(6	)		(8	)		(7	)		5		6
Financing costs, net	$	86		$	80		$	77		$	70	$	66

3

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)	2021									2020
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Cash flows from operating activities:
Net earnings (loss)	$	844		$	261		$	216		$	(98	)	$	(90	)
Adjustments to reconcile net earnings (loss) to net cash from operating activities:
Net (earnings) loss from discontinued operations, net of income taxes		—			—			—			25			(13	)
Depreciation, depletion and amortization		578			536			467			301			299
Asset impairments		—			—			—			27			—
Leasehold impairments		1			1			1			3			36
(Amortization) accretion of liabilities		(7	)		(7	)		(7	)		8			8
Total losses on commodity derivatives		335			703			528			117			87
Cash settlements on commodity derivatives		(370	)		(367	)		(232	)		(27	)		10
Gains on asset dispositions		—			(87	)		(32	)		(1	)		—
Deferred income tax expense (benefit)		119			24			(243	)		(17	)		—
Share-based compensation		19			20			41			18			31
Early retirement of debt		—			(10	)		(20	)		—			—
Other		11			2			—			—			1
Changes in assets and liabilities, net		68			17			(127	)		2			58
Net cash from operating activities—continuing operations		1,598			1,093			592			358			427
Cash flows from investing activities:
Capital expenditures		(474	)		(504	)		(499	)		(217	)		(204	)
Acquisitions of property and equipment		(10	)		(5	)		—			(3	)		—
Divestitures of property and equipment		1			49			15			5			1
WPX acquired cash		—			—			344			—			—
Distributions from equity method investments		9			8			10			—			—
Net cash from investing activities—continuing operations		(474	)		(452	)		(130	)		(215	)		(203	)
Cash flows from financing activities:
Repayments of long-term debt		—			(710	)		(533	)		—			—
Early retirement of debt		—			(32	)		(27	)		—			—
Dividends paid on common stock		(329	)		(229	)		(203	)		(138	)		(43	)
Contributions from noncontrolling interests		1			3			—			9			1
Distributions to noncontrolling interests		(6	)		(5	)		(4	)		(4	)		(4	)
Acquisition of noncontrolling interests		—			—			(24	)		—			—
Shares exchanged for tax withholdings and other		(3	)		(9	)		(33	)		(1	)		—
Net cash from financing activities—continuing operations		(337	)		(982	)		(824	)		(134	)		(46	)
Effect of exchange rate changes on cash—continuing		(5	)		2			3			—			—
Net change in cash, cash equivalents and restricted cash of continuing operations		782			(339	)		(359	)		9			178
Cash flows from discontinued operations:
Operating activities		—			—			—			19			45
Investing activities		—			—			—			310			1
Effect of exchange rate changes on cash		—			—			—			2			4
Net change in cash, cash equivalents and restricted cash of discontinued operations		—			—			—			331			50
Net change in cash, cash equivalents and restricted cash		782			(339	)		(359	)		340			228
Cash, cash equivalents and restricted cash at beginning of period		1,539			1,878			2,237			1,897			1,669
Cash, cash equivalents and restricted cash at end of period	$	2,321		$	1,539		$	1,878		$	2,237		$	1,897
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	2,144		$	1,348		$	1,683		$	2,047		$	1,707
Restricted cash		177			191			195			190			190
Total cash, cash equivalents and restricted cash	$	2,321		$	1,539		$	1,878		$	2,237		$	1,897

4

CONSOLIDATED BALANCE SHEETS

(in millions)	September 30, 2021			December 31, 2020
Current assets:
Cash, cash equivalents and restricted cash	$	2,321		$	2,237
Accounts receivable		1,517			601
Income tax receivable		80			174
Other current assets		309			248
Total current assets		4,227			3,260
Oil and gas property and equipment, based on successful efforts accounting, net		13,613			4,436
Other property and equipment, net		1,465			957
Total property and equipment, net		15,078			5,393
Goodwill		753			753
Right-of-use assets		244			223
Investments		388			12
Other long-term assets		367			271
Total assets	$	21,057		$	9,912
Current liabilities:
Accounts payable	$	537		$	242
Revenues and royalties payable		1,443			662
Other current liabilities		1,525			536
Total current liabilities		3,505			1,440
Long-term debt		6,492			4,298
Lease liabilities		256			246
Asset retirement obligations		462			358
Other long-term liabilities		1,281			551
Stockholders’ equity:
Common stock		68			38
Additional paid-in capital		8,206			2,766
Retained earnings		750			208
Accumulated other comprehensive loss		(100	)		(127	)
Total stockholders’ equity attributable to Devon		8,924			2,885
Noncontrolling interests		137			134
Total equity		9,061			3,019
Total liabilities and equity	$	21,057		$	9,912
Common shares outstanding		677			382

5

PRODUCTION TREND

	2021						2020
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Oil (MBbls/d)
Delaware Basin		213		191		172		99		77
Anadarko Basin		14		17		13		16		19
Williston Basin		39		46		44		—		—
Eagle Ford		20		18		16		18		22
Powder River Basin		14		16		17		16		21
Other		3		3		6		7		7
Total		303		291		268		156		146
Natural gas liquids (MBbls/d)
Delaware Basin		100		82		60		43		38
Anadarko Basin		25		26		21		25		30
Williston Basin		9		9		8		—		—
Eagle Ford		11		9		6		9		11
Powder River Basin		3		3		3		3		3
Other		—		—		1		—		1
Total		148		129		99		80		83
Gas (MMcf/d)
Delaware Basin		578		513		471		267		239
Anadarko Basin		219		225		200		233		242
Williston Basin		59		61		49		—		—
Eagle Ford		67		59		47		60		73
Powder River Basin		19		21		21		22		23
Other		1		2		3		2		3
Total		943		881		791		584		580
Total oil equivalent (MBoe/d)
Delaware Basin		409		358		310		186		155
Anadarko Basin		75		80		68		81		89
Williston Basin		58		66		61		—		—
Eagle Ford		42		37		30		37		46
Powder River Basin		20		22		23		22		28
Other		4		4		7		7		8
Total		608		567		499		333		326

6

CAPITAL EXPENDITURES

(in millions)	2021						2020
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Delaware Basin	$	363	$	394	$	355	$	153	$	179
Anadarko Basin		15		11		13		3		1
Williston Basin		13		19		20		—		—
Eagle Ford		34		36		29		2		1
Powder River Basin		15		5		27		22		11
Other		2		2		3		3		3
Total upstream capital	$	442	$	467	$	447	$	183	$	195
Midstream		11		22		24		3		7
Other		28		20		16		3		5
Total capital	$	481	$	509	$	487	$	189	$	207

SUPPLEMENTAL INFORMATION FOR UPSTREAM CAPITAL EXPENDITURES

GROSS OPERATED SPUDS
	2021						2020
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Delaware Basin		50		55		60		21		35
Anadarko Basin		9		8		8		—		—
Williston Basin		—		—		7		—		—
Eagle Ford		10		11		14		—		—
Powder River Basin		9		1		—		2		—
Total		78		75		89		23		35

GROSS OPERATED WELLS TIED-IN
	2021						2020
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Delaware Basin		52		88		52		23		32
Anadarko Basin		4		6		—		—		—
Williston Basin		4		13		—		—		—
Eagle Ford		19		9		12		—		—
Powder River Basin		2		—		10		2		9
Total		81		116		74		25		41

AVERAGE LATERAL LENGTH
(based on wells tied-in)	2021						2020
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Delaware Basin		9,700’		10,000’		10,000’		9,800’		9,900’
Anadarko Basin		9,200’		9,600’		—		—		—
Williston Basin		9,600’		10,000’		—		—		—
Eagle Ford		6,300’		5,600’		4,400’		—		—
Powder River Basin		10,500’		—		9,800’		13,600’		9,800’
Total		8,900’		9,600’		9,100’		10,100’		9,900’

7

REALIZED PRICING

BENCHMARK PRICES
(average prices)	2021						2020
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	70.64	$	66.04	$	57.87	$	42.65	$	40.86
Natural Gas ($/Mcf) - Henry Hub	$	4.02	$	2.83	$	2.71	$	2.67	$	1.98
NGL ($/Bbl) - Mont Belvieu Blended	$	36.85	$	28.54	$	25.81	$	20.01	$	16.69

REALIZED PRICES
	2021									2020
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Oil (Per Bbl)
Delaware Basin	$	68.44		$	63.93		$	56.07		$	40.67		$	39.19
Anadarko Basin		69.11			63.51			55.86			40.34			37.88
Williston Basin		66.60			62.00			52.74			—			—
Eagle Ford		68.32			64.04			54.90			37.83			33.68
Powder River Basin		65.81			62.36			53.77			36.42			35.39
Other		75.68			72.85			55.65			39.93			37.33
Realized price without hedges		68.19			63.63			55.28			39.84			37.56
Cash settlements		(10.60	)		(13.29	)		(9.13	)		(1.83	)		0.65
Realized price, including cash settlements	$	57.59		$	50.34		$	46.15		$	38.01		$	38.21
Natural gas liquids (Per Bbl)
Delaware Basin	$	31.34		$	23.81		$	26.25		$	13.67		$	11.49
Anadarko Basin		33.20			25.55			23.14			15.65			12.68
Williston Basin		19.36			14.76			18.51			—			—
Eagle Ford		32.80			25.46			24.44			15.66			13.74
Powder River Basin		40.66			35.46			30.19			19.39			13.10
Other		54.51			41.19			31.86			24.24			21.74
Realized price without hedges		31.25			23.89			25.01			14.77			12.36
Cash settlements		(0.45	)		(0.25	)		(0.20	)		(0.01	)		(0.30	)
Realized price, including cash settlements	$	30.80		$	23.64		$	24.81		$	14.76		$	12.06
Gas (Per Mcf)
Delaware Basin	$	3.58		$	2.31		$	3.19		$	1.51		$	1.11
Anadarko Basin		4.05			3.15			2.49			2.29			1.66
Williston Basin		0.65			(1.60	)		(0.48	)		—			—
Eagle Ford		4.08			3.25			3.15			2.38			1.95
Powder River Basin		4.15			3.54			5.27			2.70			1.94
Other		2.60			2.74			2.57			2.87			1.52
Realized price without hedges		3.55			2.35			2.84			1.96			1.48
Cash settlements		(0.78	)		(0.15	)		(0.15	)		0.00			0.06
Realized price, including cash settlements	$	2.77		$	2.20		$	2.69		$	1.96		$	1.54
Total oil equivalent (Per Boe)
Delaware Basin	$	48.29		$	42.84		$	40.95		$	26.94		$	24.00
Anadarko Basin		35.62			30.34			25.35			19.79			16.81
Williston Basin		48.55			43.98			40.79			—			—
Eagle Ford		47.40			42.84			38.90			25.97			22.78
Powder River Basin		55.93			52.55			47.58			31.08			29.83
Other		70.49			65.37			50.58			37.67			34.15
Realized price without hedges		47.08			41.75			39.14			25.63			22.60
Cash settlements		(6.60	)		(7.11	)		(5.17	)		(0.86	)		0.33
Realized price, including cash settlements	$	40.48		$	34.64		$	33.97		$	24.77		$	22.93

8

ASSET MARGINS

BENCHMARK PRICES
(average prices)	2021						2020
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	70.64	$	66.04	$	57.87	$	42.65	$	40.86
Natural Gas ($/Mcf) - Henry Hub	$	4.02	$	2.83	$	2.71	$	2.67	$	1.98
NGL ($/Bbl) - Mont Belvieu Blended	$	36.85	$	28.54	$	25.81	$	20.01	$	16.69

PER-UNIT CASH MARGIN BY ASSET (per Boe)
	2021									2020
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Delaware Basin
Realized price	$	48.29		$	42.84		$	40.95		$	26.94		$	24.00
Lease operating expenses		(3.52	)		(3.91	)		(3.97	)		(2.38	)		(3.00	)
Gathering, processing & transportation		(2.18	)		(2.06	)		(1.96	)		(2.40	)		(2.68	)
Production & property taxes		(3.31	)		(3.08	)		(2.95	)		(2.08	)		(1.80	)
Field-level cash margin	$	39.28		$	33.79		$	32.07		$	20.08		$	16.52
Anadarko Basin
Realized price	$	35.62		$	30.34		$	25.35		$	19.79		$	16.81
Lease operating expenses		(2.58	)		(2.96	)		(3.82	)		(2.57	)		(2.16	)
Gathering, processing & transportation		(6.14	)		(6.06	)		(6.31	)		(8.39	)		(7.39	)
Production & property taxes		(1.70	)		(1.46	)		(1.21	)		(0.55	)		(0.54	)
Field-level cash margin	$	25.20		$	19.86		$	14.01		$	8.28		$	6.72
Williston Basin
Realized price	$	48.55		$	43.98		$	40.79		$	—		$	—
Lease operating expenses		(5.83	)		(4.87	)		(5.13	)		—			—
Gathering, processing & transportation		(2.13	)		(1.86	)		(2.14	)		—			—
Production & property taxes		(4.47	)		(4.27	)		(3.82	)		—			—
Field-level cash margin	$	36.12		$	32.98		$	29.70		$	—		$	—
Eagle Ford
Realized price	$	47.40		$	42.84		$	38.90		$	25.97		$	22.78
Lease operating expenses		(3.43	)		(3.47	)		(3.89	)		(2.79	)		(2.47	)
Gathering, processing & transportation		(4.17	)		(5.56	)		(6.73	)		(5.89	)		(4.73	)
Production & property taxes		(1.99	)		(1.93	)		(1.71	)		(0.16	)		(0.92	)
Field-level cash margin	$	37.81		$	31.88		$	26.57		$	17.13		$	14.66
Powder River Basin
Realized price	$	55.93		$	52.55		$	47.58		$	31.08		$	29.83
Lease operating expenses		(8.09	)		(6.65	)		(7.45	)		(5.47	)		(5.41	)
Gathering, processing & transportation		(2.93	)		(3.02	)		(2.66	)		(3.01	)		(2.30	)
Production & property taxes		(6.73	)		(6.10	)		(5.48	)		(3.91	)		(3.49	)
Field-level cash margin	$	38.18		$	36.78		$	31.99		$	18.69		$	18.63
Other
Realized price	$	70.49		$	65.37		$	50.58		$	37.67		$	34.15
Lease operating expenses		(16.42	)		(16.69	)		(17.15	)		(15.35	)		(19.92	)
Gathering, processing & transportation		(0.35	)		(0.58	)		(0.62	)		(0.59	)		(0.51	)
Production & property taxes		(4.19	)		(5.25	)��		(4.60	)		(3.38	)		(3.62	)
Field-level cash margin	$	49.53		$	42.85		$	28.21		$	18.35		$	10.10
Devon - Total
Realized price	$	47.08		$	41.75		$	39.14		$	25.63		$	22.60
Lease operating expenses		(3.85	)		(4.06	)		(4.44	)		(2.97	)		(3.32	)
Gathering, processing & transportation		(2.81	)		(2.85	)		(2.87	)		(4.23	)		(4.17	)
Production & property taxes		(3.25	)		(3.05	)		(2.88	)		(1.66	)		(1.52	)
Field-level cash margin	$	37.17		$	31.79		$	28.95		$	16.77		$	13.59

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NON-GAAP MEASURES

(all monetary values in millions, except per share amounts)

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 (loss) and core earnings (loss) 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 third-quarter 2021 earnings.

	Quarter Ended September 30, 2021
	Before-tax			After-tax			After Noncontrolling Interests			Per Diluted Share
Total
Earnings (GAAP)	$	964		$	844		$	838		$	1.24
Adjustments:
Asset and exploration impairments		1			1			1			0.00
Deferred tax asset valuation allowance		—			(101	)		(101	)		(0.15	)
Fair value changes in financial instruments and foreign currency		(31	)		(23	)		(23	)		(0.04	)
Restructuring and transaction costs		18			18			18			0.03
Core earnings (Non-GAAP)	$	952		$	739		$	733		$	1.08

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.

	YTD ‘21			Q3 ‘21			Q2 ‘21			Q1 ‘21
Net earnings (GAAP)	$	1,321		$	844		$	261		$	216
Financing costs, net		243			86			80			77
Income tax expense (benefit)		(85	)		120			43			(248	)
Exploration expenses		9			3			3			3
Depreciation, depletion and amortization		1,581			578			536			467
Asset dispositions		(119	)		—			(87	)		(32	)
Share-based compensation		58			18			20			20
Derivative and financial instrument non-cash valuation changes		597			(35	)		336			296
Restructuring and transaction costs		230			18			23			189
Accretion on discounted liabilities and other		(41	)		2			(14	)		(29	)
EBITDAX (Non-GAAP)	$	3,794		$	1,634		$	1,201		$	959
Annualized EBITDAX (Non-GAAP)	$	5,059

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.

	September 30, 2021			June 30, 2021
Total debt (GAAP)	$	6,492		$	6,502
Less:
Cash, cash equivalents and restricted cash		(2,321	)		(1,539	)
Net debt (Non-GAAP)	$	4,171		$	4,963

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NET DEBT-TO-EBITDAX

Devon defines net debt-to-EBITDAX as net debt divided by an annualized EBITDAX measure. Due to the merger with WPX closing in the first quarter of 2021, Devon has shown the first nine months of 2021 EBITDAX annualized divided by net debt to show a more meaningful net debt-to-EBITDAX measure. Devon believes this ratio provides information useful to investors in assessing the company’s credit position and debt leverage.

	Quarter Ended September 30, 2021
Net debt (Non-GAAP)	$	4,171
EBITDAX (Sep. 30, 2021 YTD annualized) (Non-GAAP)	$	5,059
Net debt-to-EBITDAX (Non-GAAP)		0.8

FREE CASH FLOW AND ADJUSTED FREE CASH FLOW

Devon defines free cash flow as total operating cash flow less capital expenditures, and Devon defines adjusted free cash flow as free cash flow less cash restructuring and transaction costs. Devon believes that free cash flow and adjusted free cash flow provide a useful measure of available cash generated by operating activities for other investing and financing activities.

	Quarter Ended September 30, 2021			Quarter Ended June 30, 2021			Quarter Ended March 31, 2021			Quarter Ended December 31, 2020
Total operating cash flow (GAAP)	$	1,598		$	1,093		$	592		$	358
Less capital expenditures:
Capital expenditures		(474	)		(504	)		(499	)		(217	)
Free cash flow (Non-GAAP)		1,124			589			93			141
Cash restructuring and transaction costs (Non-GAAP)		14			23			167			17
Adjusted free cash flow (Non-GAAP)	$	1,138		$	612		$	260		$	158

REINVESTMENT RATE

Devon defines reinvestment rate as accrued capital expenditures divided by operating cash flow. Devon believes this measure provides useful information to our investors as an indicator of the capital demands of our business relative to the cash flow generated from normal business operations.

	Quarter Ended September 30, 2021
Capital expenditures (accrued)	$	481
Operating cash flow		1,598
Reinvestment rate (Non-GAAP)		30	%

VARIABLE DIVIDEND CALCULATION

Devon may pay a variable dividend up to 50 percent of its excess cash flow. Each quarter’s excess cash flow is computed as adjusted cash flow less capital expenditures and the fixed dividend.

	Quarter Ended September 30, 2021
Operating cash flow (GAAP)	$	1,598
Changes in assets and liabilities, net		(68	)
Cash from operations before balance sheet changes (Non-GAAP)		1,530
Cash restructuring and transaction costs (Non-GAAP)		14
Adjusted cash flow (Non-GAAP)		1,544
Capital expenditures (Accrued)		(481	)
Adjusted free cash flow (Non-GAAP)		1,063
Fixed quarterly dividend ($0.11/share)		(74	)
Excess free cash flow (Non-GAAP)		989
50% Pay out (Board Discretion: Up to 50%)		50	%
Total variable dividend	$	494

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FOURTH-QUARTER 2021 GUIDANCE

PRODUCTION GUIDANCE
	Quarter 4
	Low		High
Oil (MBbls/d)		293		298
Natural gas liquids (MBbls/d)		140		145
Gas (MMcf/d)		900		950
Total oil equivalent (MBoe/d)		583		601

CAPITAL EXPENDITURES GUIDANCE
	Quarter 4
(in millions)	Low		High
Upstream capital	$	440	$	490
Midstream capital		15		25
Other capital		10		20
Total capital	$	465	$	535

PRICE REALIZATIONS GUIDANCE
	Quarter 4
	Low			High
Oil - % of WTI		90	%		100	%
NGL - % of WTI		42	%		47	%
Natural gas - % of Henry Hub		80	%		90	%

OTHER GUIDANCE ITEMS
	Quarter 4
($ millions, except Boe and %)	Low			High
Marketing & midstream operating profit	$	(10	)	$	10
LOE & GP&T per BOE	$	6.25		$	6.75
Production & property taxes as % of upstream sales		7.0	%		7.5	%
Exploration expenses	$	—		$	5
Depreciation, depletion and amortization	$	550		$	600
General & administrative expenses	$	90		$	100
Cash financing costs, net	$	90		$	100
Other expenses	$	—		$	10
Current income tax rate		0	%		0	%
Deferred income tax rate		20	%		30	%
Total income tax rate		20	%		30	%

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CONTINGENT PAYMENTS FOR BARNETT SHALE DIVESTITURE (4-year period beginning in 2021)

WTI Threshold		WTI Annual Earnout Amount		Henry Hub Threshold		Henry Hub Annual Earnout Amount
$	50.00	$	10,000,000	$	2.75	$	20,000,000
$	55.00	$	12,500,000	$	3.00	$	25,000,000
$	60.00	$	15,000,000	$	3.25	$	35,000,000
$	65.00	$	20,000,000	$	3.50	$	45,000,000

2021 & 2022 HEDGING POSITIONS

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)
Q4 2021		66,460	$	41.24		48,250	$	38.82	$	48.82
Q1-Q4 2022		26,112	$	43.75		22,501	$	48.36	$	58.58

	Price Swaptions				Price Call Options
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Price ($/Bbl)
Q4 2021		—	$	—		5,000	$	39.50
Q1-Q4 2022		10,000	$	46.67		—	$	—

Oil Basis Swaps
Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q4 2021	Midland Sweet		23,000	$	0.84
Q4 2021	BRENT/WTI Spread		1,000	$	(8.00	)
Q4 2021	Guernsey Light Sweet		4,000	$	(1.49	)
Q4 2021	NYMEX Roll		13,000	$	0.39
Q1-Q4 2022	BRENT/WTI Spread		1,000	$	(7.75	)
Q1-Q4 2022	NYMEX Roll		29,000	$	0.45

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)
Q4 2021		254,000	$	2.63		133,000	$	2.55	$	3.05
Q1-Q4 2022		3,452	$	2.85		149,274	$	2.71	$	3.44

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2021 & 2022 HEDGING POSITIONS (continued)

	Price Swaptions				Price Call Options
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Price ($/ MMBtu)
Q4 2021		—	$	—		50,000	$	2.68
Q1-Q4 2022		100,000	$	2.70		—	$	—

Natural Gas Basis Swaps
Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q4 2021	El Paso Natural Gas		35,000	$	(0.92	)
Q4 2021	WAHA		80,000	$	(0.65	)
Q1-Q4 2022	WAHA		70,000	$	(0.57	)

NGL Commodity Hedges
		Price Swaps
Period	Product	Volume (Bbls/d)		Weighted Average Price ($/Bbl)
Q4 2021	Natural Gasoline		1,000	$	47.57
Q4 2021	Normal Butane		1,000	$	31.40
Q4 2021	Propane		1,000	$	27.88

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 October 28, 2021.

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