Devon Energy Corp New — Income Statement, Cash Flows & Balance Sheet
Is Devon profitable?
Devon remains solidly profitable, though earnings have declined as the commodity price environment softened.
| Metric | 2023 | 2024 | 2025 | Change (2024→2025) |
|---|---|---|---|---|
| Oil, gas & NGL sales ($M) | $10,791 | $11,176 | $11,223 | +$47 (+0.4%) |
| Net earnings attributable to Devon ($M) | $3,747 | $2,891 | $2,642 | -$249 (-8.6%) |
| Diluted EPS | $5.84 | $4.56 | $4.17 | -$0.39 (-8.6%) |
| Effective tax rate | 18% | 21% | 23% | +2 pts |
Core oil and gas revenue was essentially flat, but net earnings continued a two-year slide driven by rising costs and a higher tax rate. Devon is still generating well over $2.6 billion in annual profit.
A $254 million asset impairment in 2025 dragged reported earnings below the underlying run rate.
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Asset impairments ($M) | $0 | $254 | +$254 |
| Asset dispositions gain ($M) | -$11 (loss) | +$343 (gain) | +$354 |
Devon wrote down two headquarters real estate assets in early 2025, but also sold its Matterhorn pipeline investment for a $342 million pre-tax gain. These two items largely offset each other, so the underlying business trend is cleaner than the headline numbers suggest.
Does Devon generate cash?
Devon is a strong cash generator — operating cash flow held steady while capital spending actually declined slightly.
| Metric ($M) | 2023 | 2024 | 2025 | Change (2024→2025) |
|---|---|---|---|---|
| Operating cash flow | $6,544 | $6,600 | $6,711 | +$111 (+1.7%) |
| Capital expenditures (organic) | $3,883 | $3,645 | $3,592 | -$53 (-1.5%) |
| Free cash flow (approx.) | ~$2,661 | ~$2,955 | ~$3,119 | +$164 |
Even as net income fell, operating cash flow nudged higher, reflecting the non-cash nature of the impairment charge and strong depreciation add-backs. Free cash flow (operating cash minus organic capex) improved meaningfully.
Devon returned over $1.6 billion to shareholders in 2025 through dividends and buybacks, though the variable dividend was sharply reduced.
| Capital Return ($M) | 2023 | 2024 | 2025 | Change |
|---|---|---|---|---|
| Dividends paid | $1,858 | $937 | $619 | -$318 |
| Share repurchases | $979 | $1,057 | $1,050 | -$7 |
| Total returned | $2,837 | $1,994 | $1,669 | -$325 |
The dividend decline reflects the wind-down of Devon's variable dividend component — total per-share payouts fell sharply from 2023's highs. The fixed dividend was actually raised to $0.24/quarter in 2025.
How strong is Devon's balance sheet?
Devon reduced its long-term debt in 2025 and carries a conservative leverage ratio, leaving ample financial flexibility.
| Metric ($M) | Dec 31, 2024 | Dec 31, 2025 | Change |
|---|---|---|---|
| Total debt | $8,883 | $8,389 | -$494 |
| Long-term debt | $8,398 | $7,391 | -$1,007 |
| Cash & equivalents | $811 | $1,384 | +$573 |
| Debt-to-capitalization ratio | — | 24.8% | Well below 65% covenant |
Devon retired $485 million of senior notes early and ended the year with meaningfully more cash on hand, putting its debt-to-capitalization ratio well inside the required limit. A $3 billion undrawn revolving credit facility provides an additional buffer.
The balance sheet carries notable upcoming maturities and legacy liabilities worth watching.
| Item | Amount |
|---|---|
| Term loan due 2026 | $1,000M |
| Notes due 2027 | $463M |
| East Bay decommissioning liability (net) | ~$25M accrued; total ~$190M contingent |
| Pension underfunding | $169M |
The $1 billion term loan matures in late 2026, which coincides with a pending all-stock merger with Coterra announced in February 2026. The East Bay legacy decommissioning obligation introduces some cost uncertainty, though Devon expects bond recoveries to cover the bulk of the estimated cost.