Devon Energy Reports Second-Quarter 2009 Results; $314 Million Net Earnings Driven by Record Production
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For the six months ended
Earnings
Devon's second-quarter 2009 financial results were impacted by certain
items securities analysts typically exclude from their published estimates.
Excluding the adjusting items, Devon earned
Production Growth in All Geographic Areas
Combined oil, gas and natural gas liquids production averaged 719 thousand Boe per day in the second quarter of 2009. This is the highest average daily production of any quarter in Devon's history and compares with 643 thousand Boe per day in the second quarter of 2008. Average daily production in the second quarter increased five percent sequentially, compared with 685 thousand Boe per day produced in the first quarter of 2009.
The 12 percent increase in year-over-year second-quarter production was
driven by growth in all major operating segments. U.S. onshore natural gas
production led by the Barnett Shale field in
Despite the strong production growth, revenues from oil, gas and natural
gas liquids sales decreased 58 percent to
Devon's average realized price for natural gas decreased 70 percent in the
second quarter of 2009 compared to the second quarter of 2008, to
Climbing Jackfish Production Leads Operations Highlights
Devon drilled 198 wells (197 successful) in the second quarter of 2009 compared to 494 wells (483 successful) drilled in the second quarter of 2008. The company has reduced drilling activity and related capital expenditures in response to declines in natural gas and oil prices. In spite of the lower activity levels, Devon achieved several notable operational accomplishments in the second quarter:
-- Devon continued to ramp up production from its 100 percent-owned
Jackfish oil sands project in Alberta in the second quarter of 2009.
Oil production at Jackfish averaged 28,000 barrels per day in June.
Production hit a peak rate of 33,000 barrels per day during June,
nearing its design capacity of 35,000 barrels per day.
-- Construction of Jackfish 2, a nearly identical second phase of the
project, is now about 40 percent complete. Devon commenced drilling
the first producing wells for Jackfish 2 in July 2009 .
-- Devon maintained a four-rig drilling program in the Cana-Woodford
Shale play in western Oklahoma in the second quarter of 2009 and added
13 new wells to production. The company increased its average net
production from the Cana-Woodford to 34 million cubic feet of gas
equivalent per day in the second quarter. This is a 10-fold increase
compared with the second quarter of 2008. Devon is adding two
additional drilling rigs in the third quarter.
-- At Groesbeck in east Texas , Devon drilled another high-volume well in
the Nan-Su-Gail field in the second quarter. The Hill-Crenshaw 3H (100
percent working interest) had a 24-hour initial production test of 18
million cubic feet of gas per day.
-- Also in east Texas , Devon continued evaluating its Haynesville Shale
acreage in the greater Carthage area. The company has substantially
de-risked 74,000 of its 110,000 net acres within the Carthage area and
has identified roughly 800 Haynesville drilling locations on this
acreage. The company believes this 74,000 net acres has resource
potential of more than three trillion cubic feet of natural gas
equivalent. Devon is now drilling a well in San Augustine County as
the company also evaluates its acreage in the southern region of the
Haynesville Shale.
Marketing and Midstream Profit Reflects Lower Prices
Marketing and midstream operating profit was
Positive Cost Comparisons Continue
Continuing a trend evidenced in the first quarter of 2009, expenses in
several important categories decreased in the second quarter. Compared with
the second quarter of 2008, quarterly unit lease operating expenses (LOE)
decreased by 15 percent to
Depreciation, depletion and amortization (DD&A) of oil and gas properties
decreased 35 percent to
General and administrative expenses (G&A) increased two percent to
Retaining Liquidity and Financial Strength
Second-quarter 2009 cash flow before balance sheet changes totaled
Items Excluded from Published Earnings Estimates
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. These items and their effects upon reported earnings for the second quarter of 2009 were as follows:
Items affecting continuing operations-
-- A change in the fair value of oil and natural gas derivative
instruments decreased second-quarter earnings by $101 million pre-tax
($65 million after tax).
-- A change in the fair value of other financial instruments increased
second-quarter earnings by $5 million pre-tax ($4 million after tax).
-- Employee severance costs associated with consolidation of the Gulf and
International operations decreased second-quarter net earnings by $33
million pre-tax ($21 million after tax).
Items affecting discontinued operations-
-- A post-closing adjustment from the divestiture of West African assets
in 2008 resulted in a second-quarter gain of $17 million pre-tax ($17
million after tax).
The following tables summarize the effects of these items on second-quarter earnings and income taxes.
Summary of Items Typically Excluded by Securities Analysts (in millions)
Quarter Ended June 30, 2009
Continuing Operations
Cash Flow
Before
Balance
Pre-tax Income Tax Effect After tax Sheet
Earnings ----------------- Earnings Changes
Effect Current Deferred Total Effect Effect
------ ------- -------- ----- ------ ------
Change in
fair value of
oil and gas
derivative
instruments $(101) - (36) (36) (65) -
Change in
fair value
of other
financial
instruments 5 - 1 1 4 -
Employee
severance
costs from
consolidation
of operations (33) (12) - (12) (21) (11)
---- ---- ---- ---- --- ---
Totals $(129) (12) (35) (47) (82) (11)
------ ----- ---- ---- ---- ---- ----
Discontinued Operations
Cash Flow
Before
Balance
Pre-tax Income Tax Effect After tax Sheet
Earnings ----------------- Earnings Changes
Effect Current Deferred Total Effect Effect
------ ------- -------- ----- ------ ------
Post-closing
adjustment on
sale of
West African
assets $17 - - - 17 -
---- ---- ---- ---- ---- ----
In aggregate, these items decreased second-quarter 2009 net earnings by
Conference Call to be Webcast Today
Devon will discuss its second-quarter 2009 financial and operating results
in a conference call webcast today. The webcast will begin at
This press release includes "forward-looking statements" as defined by the
Devon Energy Corporation is anOklahoma City -based independent energy company engaged in oil and gas exploration and production. Devon is the largest U.S.-based independent oil and gas producer and is included in theS&P 500 Index. For more information about Devon, please visit our website at www.devonenergy.com. PRODUCTION (net of royalties) Quarter Ended Six Months Ended Excludes discontinued June 30, June 30, operations ------------ ------------ 2009 2008 2009 2008 ---- ---- ---- ---- Total Period Production ----------------------- Natural Gas (Bcf) U.S. Onshore 183.2 162.3 364.2 314.8 U.S. Offshore 10.5 14.2 21.3 32.5 ---- ---- ---- ---- Total U.S. 193.7 176.5 385.5 347.3 Canada 60.1 53.0 112.8 104.7 International 0.3 0.4 0.6 1.0 ------------- --- --- --- --- Total Natural Gas 254.1 229.9 498.9 453.0 ----------------- ----- ----- ----- ----- Oil (MMBbls) U.S. Onshore 2.9 2.8 5.9 5.7 U.S. Offshore 1.2 1.8 2.3 3.6 --- --- --- --- Total U.S. 4.1 4.6 8.2 9.3 Canada 6.6 5.3 12.9 9.9 International 4.7 3.3 7.9 8.1 ------------- --- --- --- --- Total Oil 15.4 13.2 29.0 27.3 ------------- ---- ---- ---- ---- Natural Gas Liquids (MMBbls) U.S. Onshore 6.4 5.8 12.6 11.6 U.S. Offshore 0.2 0.2 0.4 0.4 --- --- --- --- Total U.S. 6.6 6.0 13.0 12.0 Canada 1.0 1.0 2.0 1.9 International - - - - ------------- --- --- --- --- Total Natural Gas Liquids 7.6 7.0 15.0 13.9 ----------------- --- --- ---- ---- Oil Equivalent (MMBoe) U.S. Onshore 39.9 35.7 79.2 69.7 U.S. Offshore 3.1 4.4 6.2 9.4 --- --- --- --- Total U.S. 43.0 40.1 85.4 79.1 Canada 17.6 15.1 33.7 29.4 International 4.8 3.3 8.0 8.3 ------------- --- --- --- --- Total Oil Equivalent 65.4 58.5 127.1 116.8 ------------- ---- ---- ----- ----- Average Daily Production ------------------------ Natural Gas (MMcf) U.S. Onshore 2,013.1 1,783.0 2,012.4 1,729.7 U.S. Offshore 115.5 156.1 117.4 178.7 ----- ----- ----- ----- Total U.S. 2,128.6 1,939.1 2,129.8 1,908.4 Canada 660.2 582.6 623.0 575.0 International 3.2 4.8 3.3 5.4 ------------- --- --- --- --- Total Natural Gas 2,792.0 2,526.5 2,756.1 2,488.8 ----------------- ------- ------- ------- ------- Oil (MBbls) U.S. Onshore 32.0 30.9 32.5 31.0 U.S. Offshore 13.0 19.9 12.5 19.9 ---- ---- ---- ---- Total U.S. 45.0 50.8 45.0 50.9 Canada 72.1 58.0 71.3 54.7 International 52.3 35.8 43.4 44.6 ------------- ---- ---- ---- ---- Total Oil 169.4 144.6 159.7 150.2 --------- ----- ----- ----- ----- Natural Gas Liquids (MBbls) U.S. Onshore 70.8 64.1 69.7 63.7 U.S. Offshore 2.0 2.1 2.2 2.0 --- --- --- --- Total U.S. 72.8 66.2 71.9 65.7 Canada 11.1 10.7 10.8 10.8 International - - - - ------------- --- --- --- --- Total Natural Gas Liquids 83.9 76.9 82.7 76.5 ----------------- ---- ---- ---- ---- Oil Equivalent (MBoe) U.S. Onshore 438.2 392.2 437.6 382.9 U.S. Offshore 34.2 48.0 34.3 51.7 ---- ---- ---- ---- Total U.S. 472.4 440.2 471.9 434.6 Canada 193.3 165.8 185.9 161.3 International 52.8 36.6 43.9 45.6 ------------- ---- ---- ---- ---- Total Oil Equivalent 718.5 642.6 701.7 641.5 ----------------- ----- ----- ----- ----- BENCHMARK PRICES Quarter Ended Six Months Ended (average prices) June 30, June 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Natural Gas ($/Mcf) - Henry Hub $3.51 $10.94 $4.21 $9.49 Oil ($/Bbl) -West Texas Intermediate (Cushing) $59.83 $124.28 $51.51 $110.98 -------------------------------- ----- ------- ------ ------- REALIZED PRICES (excludes the effects of unrealized gains and losses from hedging) Quarter Ended June 30, 2009 Oil Gas NGLs Total (Per (Per (Per (Per Bbl) Mcf) Bbl) Boe) ------ ------ ------ ------ U.S. Onshore $54.66 $2.75 $20.81 $19.98 U.S. Offshore $56.44 $3.76 $23.69 $35.49 Total U.S. $55.18 $2.81 $20.89 $21.10 Canada $48.14 $3.25 $30.99 $30.85 International $56.03 $4.24 $- $55.71 ------------- ------ ----- --- ------ Realized price without hedges $52.44 $2.91 $22.24 $26.27 Cash settlements $- $0.45 $- $1.75 ---------------- --- ----- --- ----- Realized price, including cash settlements $52.44 $3.36 $22.24 $28.02 ------------------------------ ------ ----- ------ ------ Quarter Ended June 30, 2008 Oil Gas NGLs Total (Per (Per (Per (Per Bbl) Mcf) Bbl) Boe) ------- ------- ------- ------- U.S. Onshore $120.69 $9.40 $50.56 $60.51 U.S. Offshore $125.24 $11.43 $53.63 $91.38 Total U.S. $122.47 $9.56 $50.66 $63.88 Canada $94.35 $9.76 $75.10 $72.14 International $119.87 $11.00 $- $118.70 ------------------ ------- ------ --- ------- Realized price without hedges $110.56 $9.61 $54.08 $69.14 Cash settlements $(0.01) $(1.32) $- $(5.18) ---------------- ------- ------- --- ------- Realized price, including cash settlements $110.55 $8.29 $54.08 $63.96 ------------------------------ ------- ----- ------ ------ Six Months Ended June 30, 2009 Oil Gas NGLs Total (Per (Per (Per (Per Bbl) Mcf) Bbl) Boe) ------ ------ ------ ------ U.S. Onshore $44.67 $3.09 $19.16 $20.57 U.S. Offshore $49.69 $4.46 $21.96 $34.85 Total U.S. $46.07 $3.16 $19.24 $21.61 Canada $38.19 $3.82 $28.52 $29.11 International $50.10 $3.85 $- $49.76 ------------------------------- ------ ----- -- ------ Realized price without hedges $43.65 $3.31 $20.45 $25.36 Cash settlements $- $0.47 $- $1.83 ---------------- --- ----- --- ----- Realized price, including cash settlements $43.65 $3.78 $20.45 $27.19 ------------------------------ ------ ----- ------ ------ Six Months Ended June 30, 2008 Oil Gas NGLs Total (Per (Per (Per (Per Bbl) Mcf) Bbl) Boe) ----- ----- ------ ------ U.S. Onshore $107.15 $8.26 $47.65 $53.91 U.S. Offshore $112.07 $9.94 $51.77 $79.52 Total U.S. $109.08 $8.42 $47.78 $56.95 Canada $84.16 $8.66 $68.86 $64.01 International $105.63 $9.56 $- $104.68 --------------- ------- ----- --- ------- Realized price without hedges $98.98 $8.48 $50.76 $62.12 Cash settlements $- $(0.69) $- $(2.67) ---------------- --- ------ --- ------ Realized price, including cash settlements $98.98 $7.79 $50.76 $59.45 ------------------------------ ------ ----- ------ ------ CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per Quarter Ended Six Months Ended share amounts) June 30, June 30, ----------- ------------ 2009 2008 2009 2008 ---- ---- ---- ---- Revenues -------- Oil sales $808 $1,455 $1,262 $2,705 Gas sales 740 2,210 1,653 3,840 NGL sales 170 379 306 707 Net gain (loss) on oil and gas derivative financial instruments 13 (1,215) 167 (2,003) Marketing and midstream revenues 359 719 730 1,274 ----------------------- --- --- --- ----- Total revenues 2,090 3,548 4,118 6,523 ----------------------- ----- ----- ----- ----- Expenses and other income, net ------------------------------ Lease operating expenses 510 537 1,034 1,043 Production taxes 47 176 89 310 Marketing and midstream operating costs and expenses 234 515 463 897 Depreciation, depletion and amortization of oil and gas properties 494 762 1,093 1,499 Depreciation and amortization of non-oil and gas properties 74 62 144 119 Accretion of asset retirement obligation 24 22 48 44 General and administrative expenses 182 180 348 328 Interest expense 90 90 173 192 Change in fair value of other financial instruments (10) (40) (15) (24) Reduction of carrying value of oil and gas properties - - 6,516 - Other expense (income), net 20 (17) 27 (38) --------------------------- --- --- --- --- Total expenses and other income, net 1,665 2,287 9,920 4,370 ----------------------------- ----- ----- ----- ----- Earnings (loss) from continuing operations before income taxes 425 1,261 (5,802) 2,153 ------------------------------- --- ----- ------- ----- Income tax expense (benefit) --------------------------- Current 51 414 53 517 Deferred 77 253 (2,194) 391 -------- -- --- ------- --- Total income tax expense (benefit) 128 667 (2,141) 908 ----------------------------- --- --- ------- --- Earnings (loss) from continuing operations 297 594 (3,661) 1,245 ------------------------------- --- --- ------- ----- Discontinued operations ----------------------- Earnings from discontinued operations before income taxes 17 851 16 1,040 Income tax expense - 144 - 235 ------------------ --- --- --- --- Earnings from discontinuing operations 17 707 16 805 -------------------------------- --- --- --- --- Net earnings (loss) 314 1,301 (3,645) 2,050 Preferred stock dividends - 3 - 5 ------------------------- --- --- --- --- Net earnings (loss) applicable to common stockholders $314 $1,298 $(3,645) $2,045 ------------------------------ ---- ------ ------- ------ Basic net earnings (loss) per share Earnings (loss) from continuing operations $0.67 $1.33 $(8.25) $2.80 Earnings from discontinued operations $0.04 $1.58 $0.04 $1.80 -------------------------- ----- ----- ----- ----- Net earnings (loss) $0.71 $2.91 $(8.21) $4.60 ------------------ ----- ----- ------- ----- Diluted net earnings (loss) per share Earnings (loss) from continuing operations $0.66 $1.31 $(8.25) $2.76 Earnings from discontinued operations $0.04 $1.57 $0.04 $1.79 -------------------------- ----- ----- ----- ----- Net earnings (loss) $0.70 $2.88 $(8.21) $4.55 ------------------ ----- ----- ------- ----- CONSOLIDATED BALANCE SHEETS (in millions) June 30, December 31, 2009 2008 ---- ---- Assets (Audited) ------ --------- Current assets -------------- Cash and cash equivalents $648 $379 Accounts receivable 1,318 1,412 Income taxes receivable 27 334 Derivative financial instruments, at fair value 226 282 Other current assets 358 277 ----------------------- --- --- Total current assets 2,577 2,684 ----------------------- ----- ----- Property and equipment, at cost, based on the full cost method of accounting for oil and gas properties ($4,298 and$4,551 excluded from amortization in 2009 and 2008, respectively) 59,086 55,664 Less accumulated depreciation, depletion and amortization 40,999 32,683 ---------------------------------------- ------ ------ Property and equipment, net 18,087 22,981 --------------------------- ------ ------ Goodwill 5,710 5,579 Other long-term assets, including$180 million and$199 million at fair value in 2009 and 2008, respectively 683 664 ------------------------------ --- --- Total Assets $27,057 $31,908 ------------ ------- ------- Liabilities and Stockholders' Equity ------------------------------------ Current liabilities ------------------- Accounts payable - trade $1,074 $1,825 Revenues and royalties due to others 377 496 Short-term debt 1,508 180 Current portion of asset retirement obligation, at fair value 175 138 Accrued expenses and other current liabilities 358 496 ---------------------------------- --- --- Total current liabilities 3,492 3,135 ---------------------------------- ----- ----- Long-term debt 5,849 5,661 Asset retirement obligation, at fair value 1,411 1,347 Other long-term liabilities 1,036 1,026 Deferred income taxes 1,587 3,679 --------------------- ----- ----- Stockholders' equity -------------------- Common stock 44 44 Additional paid-in capital 6,363 6,257 Retained earnings 6,589 10,376 Accumulated other comprehensive income 686 383 -------------------------------------- --- --- Total Stockholders' Equity 13,682 17,060 -------------------------- ------ ------ Total Liabilities and Stockholders' Equity $27,057 $31,908 ------------------------------------------ ------- ------- Common Shares Outstanding 444 444 ------------------------- --- --- CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Six Months Ended June 30, ------------------------- 2009 2008 Cash Flows From Operating Activities ---- ---- ------------------------------------ Net (loss) earnings $(3,645) $2,050 Earnings from discontinued operations, net of tax (16) (805) Adjustments to reconcile (loss) earnings from continuing operations to net cash provided by operating activities: Depreciation, depletion and amortization 1,237 1,618 Deferred income tax (benefit) expense (2,194) 391 Reduction of carrying value of oil and gas properties 6,516 - Net unrealized loss on oil and gas derivative financial instruments 65 1,692 Other noncash charges 134 122 Net increase in working capital (89) (132) Decrease (increase) in long-term other assets 43 (37) Increase in long-term other liabilities 19 181 -------------------------------- --- --- Cash provided by operating activities - continuing operations 2,070 5,080 Cash provided by operating activities - discontinued operations 7 106 -------------------------- --- --- Net cash provided by operating activities $2,077 $5,186 ------------------------------ ------ ------ Cash Flows From Investing Activities ------------------------------------ Proceeds from sales of property and equipment 2 108 Capital expenditures (3,201) (3,870) Purchases of short-term investments - (50) Sales of long-term and short-term investments 4 295 ----------------------------------- --- --- Cash used in investing activities - continuing operations (3,195) (3,517) Cash provided by investing activities - discontinued operations 2 1,712 -------------------------- --- ----- Net cash used in investing activities $(3,193) $(1,805) ------------------------------------- ------- ------- Cash Flows From Financing Activities ------------------------------------ Proceeds from borrowing of long-term debt, net of issuance costs 1,187 - Credit facility repayments - (3,070) Credit facility borrowings - 1,620 Net commercial paper borrowings (repayments) 325 (1,004) Debt repayments (1) (47) Redemption of preferred stock - (150) Proceeds from stock option exercises 9 104 Repurchases of common stock - (252) Dividends paid on common and preferred stock (142) (146) Excess tax benefits related to share-based compensation 5 55 ------------------------------ --- --- Net cash provided by (used in) financing activities $1,383 $(2,890) ------------------------------- ------ ------- Effect of exchange rate changes on cash 5 (19) ------------------------------- --- --- Net increase in cash and cash equivalents 272 472 Cash and cash equivalents at beginning of period (including assets held for sale) 384 1,373 ------------------------------- --- ----- Cash and cash equivalents at end of period (including assets held for sale) $656 $1,845 =================================== ==== ====== DRILLING ACTIVITY Quarter Ended Six Months Ended June 30, June 30, -------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Exploration Wells Drilled ------------------------- U.S. 2 8 9 17 Canada 7 7 29 58 International - 1 1 7 ------------- --- --- --- --- Total 9 16 39 82 ----- --- --- --- --- Exploration Wells Success Rate ------------------------------ U.S. 50% 88% 78% 71% Canada 100% 86% 100% 95% International - 0% 0% 0% ------------- --- --- --- --- Total 89% 81% 92% 82% ----- --- --- --- --- Development Wells Drilled ------------------------- U.S. 160 405 454 777 Canada 22 61 143 259 International 7 12 13 22 ------------- --- --- --- --- Total 189 478 610 1,058 ----- --- --- --- ----- Development Wells Success Rate ------------------------------ U.S. 100% 98% 99% 98% Canada 100% 100% 99% 100% International 100% 92% 100% 91% ------------- --- --- --- --- Total 100% 98% 99% 98% ----- --- --- --- --- Total Wells Drilled ------------------- U.S. 162 413 463 794 Canada 29 68 172 317 International 7 13 14 29 ------------- --- --- --- --- Total 198 494 649 1,140 ----- --- --- --- ----- Total Wells Success Rate ------------------------ U.S. 99% 98% 99% 98% Canada 100% 99% 99% 99% International 100% 85% 93% 69% ------------- --- --- --- --- Total 99% 98% 99% 97% ----- --- --- --- --- June 30, ------------- 2009 2008 ---- ---- Number of Company Operated Rigs Running --------------------------------------- U.S. 23 79 Canada 1 12 International - 1 ------------- --- --- Total 24 92 ----- --- --- CAPITAL EXPENDITURES (in millions) Quarter EndedJune 30, 2009 U.S. U.S. Onshore Offshore Canada International Total --------- --------- ------ ------------- ----- Capital Expenditures -------------------- Exploration $25 31 19 53 $128 Development 409 119 149 43 720 ----------- --- --- --- -- --- Exploration and development capital $434 150 168 96 $848 Capitalized G&A 104 Capitalized interest 21 Discontinued operations - Midstream capital 62 Other capital 24 ------------- -- Total Capital Expenditures $1,059 ------------- ------ CAPITAL EXPENDITURES (in millions) Six Months EndedJune 30, 2009 U.S. U.S. Onshore Offshore Canada International Total --------- --------- ------ ------------- ----- Capital Expenditures -------------------- Exploration $50 114 69 109 $342 Development 1,130 238 379 60 1,807 ----------- ----- --- --- -- ----- Exploration and development capital $1,180 352 448 169 $2,149 Capitalized G&A 208 Capitalized interest 46 Discontinued operations 4 Midstream capital 150 Other capital 44 ------------- -- Total Capital Expenditures $2,601 ------------- ------ NON-GAAP FINANCIAL MEASURESThe United States Securities and Exchange Commission has adopted disclosure requirements for public companies such as Devon concerning Non- GAAP financial measures. (GAAP refers to generally accepted accounting principles.) The company must reconcile the Non-GAAP financial measure to related GAAP information. Cash flow before balance sheet changes is a Non- GAAP financial measure. Devon believes cash flow before balance sheet changes is relevant because it is a measure of cash available to fund the company's capital expenditures, dividends and to service its debt. Cash flow before balance sheet changes is also used by certain securities analysts as a measure of Devon's financial results. RECONCILIATION TO GAAP INFORMATION (in millions) Quarter Ended Six Months Ended June 30, June 30, ---------------- ------------ 2009 2008 2009 2008 ---- ---- ---- ---- Net Cash Provided By Operating Activities (GAAP) $1,030 $2,931 $2,077 $5,186 ------------------------------ ------ ------ ------ ------ Changes in assets and liabilities - continuing operations 81 (365) 27 2 Changes in assets and liabilities - discontinued operations (2) 124 (7) 61 ----------------------------------- --- --- --- --- Cash flow before balance sheet changes (Non-GAAP) $1,109 $2,690 $2,097 $5,249 -------------------------------------- ------ ------ ------ ------ Devon believes that using net debt for the calculation of "net debt to adjusted capitalization" provides a better measure than using debt. Devon defines net debt as debt less cash and cash equivalents. Devon believes that because cash can be used to repay indebtedness, netting cash and cash equivalents against debt provides a clearer picture of the future demands on cash to repay debt. RECONCILIATION TO GAAP INFORMATION (in millions) June 30, ------------------ 2009 2008 ---- ---- Total debt (GAAP) $7,357 $5,450 Adjustments: Cash and cash equivalents 648 1,838 -------------------------- --- ----- Net Debt (Non-GAAP) $6,709 $3,612 -------------------------- ------ ------ Total debt $7,357 $5,450 Stockholders' equity 13,682 23,433 -------------------------- ------ ------ Total Capitalization (GAAP) $21,039 $28,883 -------------------------- ------- ------- Net debt $6,709 $3,612 Stockholders' equity 13,682 23,433 -------------------------- ------ ------ Adjusted Capitalization (Non-GAAP) $20,391 $27,045 -------------------------- ------- -------
SOURCEDevon Energy Corporation /CONTACT: Media, Chip Minty, +1-405-228-8647, or Investors,Zack Hager , +1-405-552-4526, both ofDevon Energy Corporation / /Company News On-Call: http://www.prnewswire.com/comp/118040.html/ /Web Site: http://www.devonenergy.com /