Segment Information

9 Months Ended

Sep. 30, 2011

17. Segment Information

Devon manages its North American onshore operations through distinct operating segments, or divisions, which are defined primarily by geographic areas. For financial reporting purposes, Devon aggregates its United States divisions into one reporting segment due to the similar nature of the businesses. However, Devon's Canadian and International divisions are reported as separate reporting segments primarily due to significant differences in the respective regulatory environments.

	U.S.	Canada	International	Total
	(In millions)
As of September 30, 2011:
Current assets (1)	$ 2,556	$ 7,025	$ 26	$ 9,607
Property and equipment, net	15,639	7,531	—	23,170
Goodwill	3,046	2,905	—	5,951
Other assets	662	365	111	1,138
Total assets	$ 21,903	$ 17,826	$ 137	$ 39,866

Current liabilities	$ 5,321	$ 660	$ 50	$ 6,031
Long-term debt	4,734	1,235	—	5,969
Asset retirement obligations	593	867	—	1,460
Other liabilities	426	67	2	495
Deferred income taxes	3,486	1,323	—	4,809
Stockholders' equity	7,343	13,674	85	21,102
Total liabilities and stockholders' equity	$ 21,903	$ 17,826	$ 137	$ 39,866

____________________________

(1) Current assets in the Canadian segment include $6.1 billion of cash, cash equivalents and short-term investments that were generated from Devon's International offshore divestiture program and have not been repatriated to the United States. Accordingly, no current United States income taxes have been recorded or paid on these amounts.

	U.S.	Canada	Total
	(In millions)
Three Months Ended September 30, 2011:
Revenues:
Oil, gas and NGL sales	$ 1,406	$ 705	$ 2,111
Oil, gas and NGL derivatives	738	—	738
Marketing and midstream revenues	586	67	653
Total revenues	2,730	772	3,502
Expenses and other, net:
Lease operating expenses	236	239	475
Taxes other than income taxes	96	12	108
Marketing and midstream operating costs and expenses	457	58	515
Depreciation, depletion and amortization of oil and gas properties	302	202	504
Depreciation and amortization of non-oil and gas properties	57	5	62
Accretion of asset retirement obligations	9	14	23
General and administrative expenses	99	39	138
Restructuring costs	(3)	—	(3)
Interest expense	60	44	104
Interest-rate and other financial instruments	38	2	40
Other, net	—	(2)	(2)
Total expenses and other, net	1,351	613	1,964
Earnings from continuing operations before income taxes	1,379	159	1,538
Income tax expense (benefit):
Current	(240)	(8)	(248)
Deferred	698	48	746
Total income tax expense	458	40	498
Earnings from continuing operations	$ 921	$ 119	$ 1,040

Capital expenditures, continuing operations	$ 1,556	$ 394	$ 1,950

	U.S.	Canada	Total
	(In millions)
Three Months Ended September 30, 2010:
Revenues:
Oil, gas and NGL sales	$ 1,104	$ 579	$ 1,683
Oil, gas and NGL derivatives	214	(5)	209
Marketing and midstream revenues	432	29	461
Total revenues	1,750	603	2,353
Expenses and other, net:
Lease operating expenses	208	207	415
Taxes other than income taxes	85	10	95
Marketing and midstream operating costs and expenses	314	22	336
Depreciation, depletion and amortization of oil and gas properties	234	163	397
Depreciation and amortization of non-oil and gas properties	60	6	66
Accretion of asset retirement obligations	8	13	21
General and administrative expenses	97	34	131
Restructuring costs	63	—	63
Interest expense	36	47	83
Interest-rate and other financial instruments	55	1	56
Other, net	(7)	(2)	(9)
Total expenses and other, net	1,153	501	1,654
Earnings from continuing operations before income taxes	597	102	699
Income tax expense (benefit):
Current	(349)	39	(310)
Deferred	590	(10)	580
Total income tax expense	241	29	270
Earnings from continuing operations	$ 356	$ 73	$ 429

Capital expenditures, continuing operations	$ 1,358	$ 308	$ 1,666

	U.S.	Canada	Total
	(In millions)
Nine Months Ended September 30, 2011:
Revenues:
Oil, gas and NGL sales	$ 4,056	$ 2,115	$ 6,171
Oil, gas and NGL derivatives	986	—	986
Marketing and midstream revenues	1,563	149	1,712
Total revenues	6,605	2,264	8,869
Expenses and other, net:
Lease operating expenses	668	684	1,352
Taxes other than income taxes	297	39	336
Marketing and midstream operating costs and expenses	1,178	126	1,304
Depreciation, depletion and amortization of oil and gas properties	853	578	1,431
Depreciation and amortization of non-oil and gas properties	174	17	191
Accretion of asset retirement obligations	26	43	69
General and administrative expenses	284	119	403
Restructuring costs	(2)	—	(2)
Interest expense	137	133	270
Interest-rate and other financial instruments	31	2	33
Other, net	(6)	(8)	(14)
Total expenses and other, net	3,640	1,733	5,373
Earnings from continuing operations before income taxes	2,965	531	3,496
Income tax expense (benefit):
Current	(293)	(8)	(301)
Deferred	2,041	143	2,184
Total income tax expense	1,748	135	1,883
Earnings from continuing operations	$ 1,217	$ 396	$ 1,613

Capital expenditures, before revision of future asset retirement obligations	$ 4,305	$ 1,260	$ 5,565
Revision of future asset retirement obligations	5	14	19
Capital expenditures, continuing operations	$ 4,310	$ 1,274	$ 5,584

	U.S.	Canada	Total
	(In millions)
Nine Months Ended September 30, 2010:
Revenues:
Oil, gas and NGL sales	$ 3,618	$ 1,917	$ 5,535
Oil, gas and NGL derivatives	871	3	874
Marketing and midstream revenues	1,300	96	1,396
Total revenues	5,789	2,016	7,805
Expenses and other, net:
Lease operating expenses	675	596	1,271
Taxes other than income taxes	258	30	288
Marketing and midstream operating costs and expenses	935	78	1,013
Depreciation, depletion and amortization of oil and gas properties	743	506	1,249
Depreciation and amortization of non-oil and gas properties	173	19	192
Accretion of asset retirement obligations	33	38	71
General and administrative expenses	303	96	399
Restructuring costs	55	—	55
Interest expense	121	159	280
Interest-rate and other financial instruments	121	—	121
Other, net	(36)	2	(34)
Total expenses and other, net	3,381	1,524	4,905
Earnings from continuing operations before income taxes	2,408	492	2,900
Income tax expense (benefit):
Current	496	200	696
Deferred	404	(55)	349
Total income tax expense	900	145	1,045
Earnings from continuing operations	$ 1,508	$ 347	$ 1,855

Capital expenditures, before revision of future asset retirement obligations	$ 3,547	$ 1,452	$ 4,999
Revision of future asset retirement obligations	72	122	194
Capital expenditures, continuing operations	$ 3,619	$ 1,574	$ 5,193

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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