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Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
6.
Income Taxes

The following table presents Devon’s total income tax expense and a reconciliation of its effective income tax rate to the U.S. statutory income tax rate.

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2025

 

2024

 

2025

 

2024

 

Earnings before income taxes

 

$

912

 

$

1,064

 

$

2,719

 

$

2,872

 

 

 

 

 

 

 

 

 

 

 

Current income tax expense (benefit)

 

$

(44

)

$

75

 

$

278

 

$

340

 

Deferred income tax expense

 

 

263

 

 

164

 

 

322

 

 

243

 

Total income tax expense

 

$

219

 

$

239

 

$

600

 

$

583

 

 

 

 

 

 

 

 

 

 

 

U.S. statutory income tax rate

 

 

21

%

 

21

%

 

21

%

 

21

%

State income taxes

 

 

2

%

 

3

%

 

2

%

 

2

%

Other

 

 

1

%

 

(2

%)

 

(1

%)

 

(3

%)

Effective income tax rate

 

 

24

%

 

22

%

 

22

%

 

20

%

 

On July 4, 2025, OBBB was signed into law. In addition to other provisions, OBBB includes permanent reinstatement of 100% bonus depreciation and the expensing of domestic research costs beginning in 2025 and allows for the deduction of intangible drilling costs as part of the computation of the CAMT beginning in 2026. Accordingly, Devon’s third quarter 2025 income tax expense included a current tax benefit of approximately $155 million and a corresponding deferred tax expense associated with the deferral of income taxes resulting from the enactment of OBBB.