Debt And Related Expenses

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt and Related Expenses

13.Debt and Related Expenses

See below for a summary of debt instruments and balances. The notes and debentures are senior, unsecured obligations of Devon.

	March 31, 2022			December 31, 2021
8.25% due August 1, 2023	$	242		$	242
5.25% due September 15, 2024		472			472
5.85% due December 15, 2025		485			485
7.50% due September 15, 2027		73			73
5.25% due October 15, 2027		390			390
5.875% due June 15, 2028		325			325
4.50% due January 15, 2030		585			585
7.875% due September 30, 2031		675			675
7.95% due April 15, 2032		366			366
5.60% due July 15, 2041		1,250			1,250
4.75% due May 15, 2042		750			750
5.00% due June 15, 2045		750			750
Net premium (discount) on debentures and notes		137			149
Debt issuance costs		(29	)		(30	)
Total long-term debt	$	6,471		$	6,482

Retirement of Senior Notes

In the first quarter of 2021, Devon redeemed $43 million of the 6.00% senior notes due 2022, $175 million of the 5.875% senior notes due 2028 and $315 million of the 4.50% senior notes due 2030. In the first quarter of 2021, Devon recognized $20 million of gains on early retirement of debt, consisting of $47 million of non-cash premium accelerations, partially offset by $27 million of cash retirement costs. The gain on early retirement is included in net financing costs in the consolidated comprehensive statements of earnings.

Credit Lines

Devon has a $3.0 billion Senior Credit Facility. As of March 31, 2022, Devon had no outstanding borrowings under the Senior Credit Facility and had issued $2 million in outstanding letters of credit under this facility. The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon’s ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65%. Under the terms of the credit agreement, total capitalization is adjusted to add back

non-cash financial write-downs such as impairments. As of March 31, 2022, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 24.7%.

Net Financing Costs

The following schedule includes the components of net financing costs.

	Three Months Ended March 31,
	2022			2021
Interest based on debt outstanding	$	92		$	105
Gain on early retirement of debt		—			(20	)
Interest income		(1	)		(1	)
Other		(6	)		(7	)
Total net financing costs	$	85		$	77