EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Devon Energy Corp., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net operating profit after taxes (NOPAT)¹	7,447)	3,160)	(2,522)	57)	1,250)
Cost of capital²	23.38%	22.64%	20.54%	17.99%	19.43%
Invested capital³	19,717)	16,727)	7,866)	10,964)	15,392)

Economic profit⁴	2,838)	(627)	(4,137)	(1,916)	(1,741)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 7,447 – 23.38% × 19,717 = 2,838

Download chart

Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Devon Energy Corp. economic profit increased from 2020 to 2021 and from 2021 to 2022.

Devon Energy Corp., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net earnings (loss) attributable to Devon	6,015)	2,813)	(2,680)	(355)	3,064)
Deferred income tax expense (benefit)¹	1,179)	49)	(328)	(25)	226)
Increase (decrease) in allowance for doubtful accounts²	2)	(4)	3)	2)	(3)
Increase (decrease) in restructuring liabilities³	(34)	(23)	151)	(21)	13)
Increase (decrease) in equity equivalents⁴	1,147)	22)	(174)	(44)	236)
Interest based on debt outstanding	370)	388)	259)	260)	298)
Interest expense, operating lease liability⁵	1)	—)	—)	—)	18)
Adjusted interest based on debt outstanding	371)	388)	259)	260)	316)
Tax benefit of interest based on debt outstanding⁶	(78)	(82)	(54)	(55)	(66)
Adjusted interest based on debt outstanding, after taxes⁷	293)	307)	205)	206)	250)
Interest income	(38)	(2)	(12)	(33)	—)
Investment income, before taxes	(38)	(2)	(12)	(33)	—)
Tax expense (benefit) of investment income⁸	8)	—)	3)	7)	—)
Investment income, after taxes⁹	(30)	(2)	(9)	(26)	—)
(Income) loss from discontinued operations, net of tax¹⁰	—)	—)	128)	274)	(2,460)
Net income (loss) attributable to noncontrolling interest	22)	20)	9)	2)	160)
Net operating profit after taxes (NOPAT)	7,447)	3,160)	(2,522)	57)	1,250)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in restructuring liabilities.

⁴ Addition of increase (decrease) in equity equivalents to net earnings (loss) attributable to Devon.

⁵ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 21 × 2.80% = 1

⁶ 2022 Calculation
Tax benefit of interest based on debt outstanding = Adjusted interest based on debt outstanding × Statutory income tax rate
= 371 × 21.00% = 78

⁷ Addition of after taxes interest expense to net earnings (loss) attributable to Devon.

⁸ 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 38 × 21.00% = 8

⁹ Elimination of after taxes investment income.

¹⁰ Elimination of discontinued operations.

Download chart

Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Devon Energy Corp. NOPAT increased from 2020 to 2021 and from 2021 to 2022.

Devon Energy Corp., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Income tax expense (benefit)	1,738)	65)	(547)	(30)	156)
Less: Deferred income tax expense (benefit)	1,179)	49)	(328)	(25)	226)
Add: Tax savings from interest based on debt outstanding	78)	82)	54)	55)	66)
Less: Tax imposed on investment income	8)	—)	3)	7)	—)
Cash operating taxes	629)	97)	(167)	43)	(4)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Download chart

Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Devon Energy Corp. cash operating taxes increased from 2020 to 2021 and from 2021 to 2022.

Devon Energy Corp., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Short-term debt	251)	—)	—)	—)	162)
Current finance lease liabilities	8)	8)	8)	7)	—)
Long-term debt	6,189)	6,482)	4,298)	4,294)	5,785)
Long-term finance lease liabilities	249)	247)	244)	240)	—)
Operating lease liability¹	21)	23)	3)	14)	338)
Total reported debt & leases	6,718)	6,760)	4,553)	4,555)	6,285)
Stockholders’ equity attributable to Devon	11,167)	9,262)	2,885)	5,802)	9,186)
Net deferred tax (assets) liabilities²	1,463)	280)	(16)	341)	877)
Allowance for doubtful accounts³	9)	7)	11)	8)	8)
Restructuring liabilities⁴	115)	149)	172)	21)	63)
Equity equivalents⁵	1,587)	436)	167)	370)	948)
Accumulated other comprehensive (income) loss, net of tax⁶	116)	132)	127)	119)	(1,027)
Noncontrolling interests	129)	137)	134)	118)	—)
Adjusted stockholders’ equity attributable to Devon	12,999)	9,967)	3,313)	6,409)	9,107)
Invested capital	19,717)	16,727)	7,866)	10,964)	15,392)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of restructuring liabilities.

⁵ Addition of equity equivalents to stockholders’ equity attributable to Devon.

⁶ Removal of accumulated other comprehensive income.

Download chart

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Devon Energy Corp. invested capital increased from 2020 to 2021 and from 2021 to 2022.

Devon Energy Corp., cost of capital calculations

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	37,428)	37,428)	÷	43,937)	=	0.85	0.85	×	26.65%	=	22.70%
Debt and finance lease liabilities³	6,488)	6,488)	÷	43,937)	=	0.15	0.15	×	5.75% × (1 – 21.00%)	=	0.67%
Operating lease liability⁴	21)	21)	÷	43,937)	=	0.00	0.00	×	2.80% × (1 – 21.00%)	=	0.00%
Total:	43,937)					1.00					23.38%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	35,767)	35,767)	÷	43,689)	=	0.82	0.82	×	26.65%	=	21.82%
Debt and finance lease liabilities³	7,899)	7,899)	÷	43,689)	=	0.18	0.18	×	5.74% × (1 – 21.00%)	=	0.82%
Operating lease liability⁴	23)	23)	÷	43,689)	=	0.00	0.00	×	1.30% × (1 – 21.00%)	=	0.00%
Total:	43,689)					1.00					22.64%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	14,626)	14,626)	÷	20,246)	=	0.72	0.72	×	26.65%	=	19.25%
Debt and finance lease liabilities³	5,617)	5,617)	÷	20,246)	=	0.28	0.28	×	5.85% × (1 – 21.00%)	=	1.28%
Operating lease liability⁴	3)	3)	÷	20,246)	=	0.00	0.00	×	2.90% × (1 – 21.00%)	=	0.00%
Total:	20,246)					1.00					20.54%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	8,699)	8,699)	÷	14,336)	=	0.61	0.61	×	26.65%	=	16.17%
Debt and finance lease liabilities³	5,623)	5,623)	÷	14,336)	=	0.39	0.39	×	5.85% × (1 – 21.00%)	=	1.81%
Operating lease liability⁴	14)	14)	÷	14,336)	=	0.00	0.00	×	3.20% × (1 – 21.00%)	=	0.00%
Total:	14,336)					1.00					17.99%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	13,267)	13,267)	÷	19,571)	=	0.68	0.68	×	26.65%	=	18.07%
Debt and finance lease liabilities³	5,965)	5,965)	÷	19,571)	=	0.30	0.30	×	5.34% × (1 – 21.00%)	=	1.29%
Operating lease liability⁴	338)	338)	÷	19,571)	=	0.02	0.02	×	5.34% × (1 – 21.00%)	=	0.07%
Total:	19,571)					1.00					19.43%

Based on: 10-K (reporting date: 2018-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Devon Energy Corp., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	2,838)	(627)	(4,137)	(1,916)	(1,741)
Invested capital²	19,717)	16,727)	7,866)	10,964)	15,392)
Performance Ratio
Economic spread ratio³	14.39%	-3.75%	-52.60%	-17.47%	-11.31%
Benchmarks
Economic Spread Ratio, Competitors⁴
Chevron Corp.	5.65%	-3.42%	-17.57%	-12.85%	—
ConocoPhillips	13.33%	-0.61%	-19.25%	-0.60%	—
Exxon Mobil Corp.	8.58%	0.16%	-23.07%	-5.90%	—
Marathon Petroleum Corp.	12.04%	-2.49%	-26.48%	-3.25%	—
Occidental Petroleum Corp.	7.39%	-4.69%	-33.69%	-10.78%	—
Valero Energy Corp.	11.48%	-1.27%	-17.08%	-3.42%	—

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 2,838 ÷ 19,717 = 14.39%

⁴ Click competitor name to see calculations.

Download chart

Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Devon Energy Corp. economic spread ratio improved from 2020 to 2021 and from 2021 to 2022.

Devon Energy Corp., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	2,838)	(627)	(4,137)	(1,916)	(1,741)
Revenues	19,169)	12,206)	4,828)	6,220)	10,734)
Performance Ratio
Economic profit margin²	14.80%	-5.14%	-85.69%	-30.80%	-16.22%
Benchmarks
Economic Profit Margin, Competitors³
Chevron Corp.	5.09%	-4.25%	-36.69%	-17.99%	—
ConocoPhillips	12.83%	-1.02%	-52.13%	-1.07%	—
Exxon Mobil Corp.	6.39%	0.16%	-35.39%	-7.01%	—
Marathon Petroleum Corp.	4.72%	-1.32%	-26.63%	-2.15%	—
Occidental Petroleum Corp.	11.35%	-10.50%	-119.69%	-44.48%	—
Valero Energy Corp.	3.24%	-0.50%	-10.78%	-1.29%	—

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × 2,838 ÷ 19,169 = 14.80%

³ Click competitor name to see calculations.

Download chart

Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Devon Energy Corp. economic profit margin improved from 2020 to 2021 and from 2021 to 2022.

Devon Energy Corp. (NYSE:DVN)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin