Devon Energy Corporation

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
Stephens Inc	Ben Wyatt	ben.wyatt@stephens.com
Susquehanna Financial Group	Biju Perincheril	biju.perincheril@sig.com
Johnson Rice & Company	Charles Meade	cmeade@jrco.com
Cowen & Company	Charles Robertson	charles.robertson@cowen.com
Piper Jaffray	David Kistler	david.w.kistler@simmonspjc.com
Wells Fargo Securities	David Tameron	david.tameron@wellsfargo.com
GMP Securities	Derrick Whitfield	dwhitfield@gmpsecurities.com
Credit Suisse	Edward Westlake	edward.westlake@credit-suisse.com
IBERIA Capital Partners	Eric Fox	eric.fox@iberiabank.com
Alembic Global Advisors	James Sullivan	james.sullivan@alembicglobal.com
KLR Group	John Gerdes	jjg@klrgroup.com
Jefferies	Jonathan D. Wolff	jwolff@jefferies.com
Raymond James	Kevin Smith	kevin.smith@raymondjames.com
Nomura Research	Lloyd Byrne	lloyd.byrne@nomura.com
Seaport Global Securities	Michael Kelly	mkelly@seaportglobal.com
Mitsubishi UFJ Securities (USA)	Michael McAllister	mmcallister@us.sc.mufg.jp
Wolfe Research	Paul Sankey	psankey@wolferesearch.com
Scotia Howard Weil	Peter Kissel	peter.kissel@scotiabank.com
BMO Capital Markets	Phillip Jungwirth	phillip.jungwirth@bmo.com
Capital One Securities	Phillips Johnston	phillips.johnston@capitalone.com
Deutsche Bank Research	Ryan Todd	ryan.todd@db.com
RBC Capital Markets	Scott Hanold	scott.hanold@rbccm.com
Evercore ISI	Stephen Richardson	stephen.richardson@evercoreisi.com
Guggenheim Securities	Subash Chandra	subash.chandra@guggenheimpartners.com
Wunderlich Securities	Vedran Vuk	vedranvuk@wundernet.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	222	434	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	(1,032)	(2,225)	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	(378)	45	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	26,237	23,297	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	0.84%	1.86%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	(15,392)	(1,148)	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	-6,944.28%	-264.39%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	3.78%	4.06%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	7.98%	9.43%
Enterprise value	EV_Market	23,637	33,029	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	23,160	32,080
Long-Run Growth	g = IR x ROIC	-58.67%	-4.93%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	2.70%	6.35%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	90.01%	72.85%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	1.87	3.14	-25.87%	9.31%	365.50%	7.06%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	6.92	13.43	-25.87%	9.31%	365.50%	7.06%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	106.64	76.07	-25.87%	9.31%	365.50%	7.06%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	-22.90	-14.84	-25.87%	9.31%	365.50%	7.06%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	69.32	49.44	-25.87%	9.31%	365.50%	7.06%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	0.90	1.42	-25.87%	9.31%	365.50%	7.06%