EX-99.2 3 cortevaq12021enr.htm EX-99.2 Document
A-1
Corteva, Inc.
Consolidated Statements of Operations
(Dollars in millions, except per share amounts)


Three Months Ended March 31,
20212020
Net sales$4,178 $3,956 
Cost of goods sold2,420 2,269 
Research and development expense281 280 
Selling, general and administrative expenses733 757 
Amortization of intangibles183 163 
Restructuring and asset related charges - net100 70 
Other income — net337 1 
Interest expense7 10 
Income from continuing operations before income taxes791 408 
Provision for income taxes on continuing operations178 127 
Income from continuing operations after income taxes613 281 
(Loss) income from discontinued operations after income taxes(10)1 
Net income603 282 
Net income attributable to noncontrolling interests3 10 
Net income attributable to Corteva$600 $272 
Basic earnings per share of common stock:
Basic earnings per share of common stock from continuing operations$0.82 $0.36 
Basic loss per share of common stock from discontinued operations(0.01)— 
Basic earnings per share of common stock$0.81 $0.36 
Diluted earnings per share of common stock:
Diluted earnings per share of common stock from continuing operations$0.81 $0.36 
Diluted loss per share of common stock from discontinued operations(0.01)— 
Diluted earnings per share of common stock$0.80 $0.36 
Average number of shares outstanding used in earnings per share (EPS) calculation (in millions)
  Basic743.4749.9
  Diluted749.6752.5





A-2
Corteva, Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions, except share amounts)
March 31, 2021December 31, 2020March 31, 2020
Assets
Current assets
Cash and cash equivalents$2,404 $3,526 $1,963 
Marketable securities114 269 10 
Accounts and notes receivable, net6,792 4,926 6,775 
Inventories4,321 4,882 4,401 
Other current assets1,405 1,165 1,530 
Total current assets15,036 14,768 14,679 
Investment in nonconsolidated affiliates64 66 64 
Property, plant and equipment - net of accumulated depreciation (March 31, 2021 - $3,874; December 31, 2020 - $3,857; March 31, 2020 - $3,406)4,299 4,396 4,358 
Goodwill10,146 10,269 10,027 
Other intangible assets10,584 10,747 11,241 
Deferred income taxes433 464 273 
Other assets1,987 1,939 2,336 
Total Assets$42,549 $42,649 $42,978 
Liabilities and Equity
Current liabilities
Short-term borrowings and finance lease obligations$1,250 $3 $1,996 
Accounts payable3,098 3,615 3,021 
Income taxes payable165 123 143 
Deferred revenue2,247 2,662 1,996 
Accrued and other current liabilities2,239 2,145 2,043 
Total current liabilities8,999 8,548 9,199 
Long-Term Debt1,102 1,102 614 
Other Noncurrent Liabilities
Deferred income tax liabilities902 893 911 
Pension and other post employment benefits - noncurrent4,954 5,176 6,186 
Other noncurrent obligations1,814 1,867 1,989 
Total noncurrent liabilities8,772 9,038 9,700 
Commitments and contingent liabilities
Stockholders' equity
Common stock, $0.01 par value; 1,666,667,000 shares authorized;
issued at March 31, 2021 - 738,321,000; December 31, 2020 - 743,458,000; and March 31, 2020 - 748,369,000		7 7 7 
Additional paid-in capital27,630 27,707 27,906 
Retained earnings / (accumulated deficit)268 — (155)
Accumulated other comprehensive loss(3,367)(2,890)(3,933)
Total Corteva stockholders' equity24,538 24,824 23,825 
Noncontrolling interests240 239 254 
Total equity24,778 25,063 24,079 
Total Liabilities and Equity$42,549 $42,649 $42,978 

A-3
Corteva, Inc.
Consolidated Statement of Cash Flows
(Dollars in millions, except per share amounts)

Three Months Ended
March 31,
20212020
Operating activities
Net income$603 $282 
Adjustments to reconcile net income to cash used for operating activities:
Depreciation and amortization304 283 
Provision for deferred income tax47 26 
Net periodic pension and OPEB benefit, net
(318)(85)
Pension and OPEB contributions(84)(95)
Net loss on sales of property, businesses, consolidated companies, and investments— 46 
Restructuring and asset related charges - net100 70 
Other net loss54 138 
Changes in assets and liabilities - net
Accounts and notes receivable(2,012)(1,685)
Inventories467 398 
Accounts Payable(448)(557)
Deferred revenue(401)(575)
Other assets and liabilities(262)(176)
Cash used for operating activities(1,950)(1,930)
Investing activities
Capital expenditures(137)(128)
Proceeds from sales of property, businesses, and consolidated companies - net of cash divested20 11 
Purchases of investments(40)(67)
Proceeds from sales and maturities of investments194 58 
Other investing activities - net(1)(4)
Cash provided by (used for) investing activities36 (130)
Financing activities
Net change in borrowings (less than 90 days) 828 1,619 
Proceeds from debt419 875 
Payments on debt— (1)
Repurchase of common stock(350)(50)
Proceeds from exercise of stock options38 14 
Dividends paid to stockholders(97)(97)
Other financing activities(17)(16)
Cash provided by financing activities821 2,344 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(50)(117)
(Decrease)/increase in cash, cash equivalents and restricted cash(1,143)167 
Cash, cash equivalents and restricted cash at beginning of period3,873 2,173 
Cash, cash equivalents and restricted cash at end of period$2,730 $2,340 

A-4
Corteva, Inc.
Consolidated Segment Information
(Dollars in millions, except per share amounts)

Three Months Ended March 31,
SEGMENT NET SALES - SEED20212020
    Corn$1,888 $1,864 
    Soybean177 181 
    Other oilseeds296 248 
    Other131 162 
Seed$2,492 $2,455 
Three Months Ended March 31,
SEGMENT NET SALES - CROP PROTECTION20212020
    Herbicides$986 $823 
    Insecticides385 378 
    Fungicides261 229 
    Other54 71 
Crop Protection$1,686 $1,501 
Three Months Ended March 31,
GEOGRAPHIC NET SALES - SEED20212020
North America 1
$1,210 $1,290 
EMEA 2
947 881 
Latin America
274 216 
Asia Pacific
61 68 
Rest of World 3
1,282 1,165 
Net Sales$2,492 $2,455 
Three Months Ended March 31,
GEOGRAPHIC NET SALES - CROP PROTECTION20212020
North America 1
$533 $475 
EMEA 2
655 586 
Latin America
244 218 
Asia Pacific
254 222 
Rest of World 3
1,153 1,026 
Net Sales$1,686 $1,501 
1. Reflects U.S. & Canada
2. Reflects Europe, Middle East, and Africa
3. Reflects EMEA, Latin America, and Asia Pacific



A-5
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
Three Months Ended March 31,
2021
Net Sales (GAAP)$4,178 
Less: Impacts from Currency and Portfolio(25)
Organic Sales (Non-GAAP)$4,203 
Three Months Ended March 31,
OPERATING EBITDA20212020
Seed$617 $581 
Crop Protection321 238 
Corporate Expenses(34)(25)
Operating EBITDA (Non-GAAP)$904 $794 
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS AFTER INCOME TAXES TO OPERATING EBITDAThree Months Ended March 31,
20212020
Income from continuing operations after income taxes (GAAP)$613 $281 
Provision for income taxes on continuing operations178 127 
Income from continuing operations before income taxes (GAAP)791 408 
Depreciation and amortization304 283 
Interest income(21)(18)
Interest expense7 10 
Exchange losses - net1
35 61 
Non-operating benefits - net2
(311)(73)
Mark-to-market gains on certain foreign currency contracts not designated as hedges3
(1)
Significant items charge4
100 123 
Operating EBITDA (Non-GAAP)$904 $794 

1.Refer to page A-12 for pre-tax and after tax impacts of exchange losses - net.
2.Non-operating benefits—net consists of non-operating pension and other post-employment benefit (OPEB) (benefits) costs, tax indemnification adjustments, environmental remediation and legal costs associated with legacy EID businesses and sites. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense.
3.Effective January 1, 2021, on a prospective basis, the company excludes net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. There was no activity in the three months ended March 31, 2020.
4.Refer to page A-8 for pre-tax and after tax impacts of significant items.

A-6
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)

PRICE - VOLUME - CURRENCY ANALYSIS
REGION
Q1 2021 vs. Q1 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
North America$(22)(1)%$(30)(2)%1 %(3)%1 %— %
EMEA
135 9 %86 6 %3 %3 %3 %— %
Latin America
84 19 %166 38 %14 %24 %(19)%— %
Asia Pacific
25 9 %26 9 %3 %6 %4 %(4)%
Rest of World244 11 %278 13 %5 %8 %(1)%(1)%
Total$222 6 %$248 6 %3 %3 %— %— %
SEED
Q1 2021 vs. Q1 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
North America$(80)(6)%$(84)(7)%(1)%(6)%1 %— %
EMEA
66 7 %47 5 %3 %2 %2 %— %
Latin America
58 27 %104 48 %9 %39 %(21)%— %
Asia Pacific
(7)(10)%(5)(7)%5 %(12)%(3)%— %
Rest of World117 10 %146 13 %5 %8 %(3)%— %
Total$37 2 %$62 3 %2 %1 %(1)%— %
CROP PROTECTION
Q1 2021 vs. Q1 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
North America58 12 %$54 11 %6 %5 %1 %— %
EMEA
69 12 %39 7 %3 %4 %5 %— %
Latin America
26 12 %62 28 %18 %10 %(16)%— %
Asia Pacific
32 14 %31 14 %2 %12 %5 %(5)%
Rest of World127 12 %132 13 %6 %7 %— %(1)%
Total$185 12 %$186 12 %6 %6 %1 %(1)%

A-7
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SEED PRODUCT LINE
Q1 2021 vs. Q1 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
Corn$24 1 %$43 2 %2 %— %(1)%— %
Soybeans(4)(2)%(7)(4)%(4)%— %2 %— %
Other oilseeds48 19 %54 22 %4 %18 %(3)%— %
Other(31)(19)%(28)(17)%(5)%(12)%(2)%— %
Total $37 2 %$62 3 %2 %1 %(1)%— %
CROP PROTECTION PRODUCT LINE
Q1 2021 vs. Q1 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
Herbicides$163 20 %$142 17 %5 %12 %3 %— %
Insecticides7 2 %15 4 %8 %(4)%(2)%— %
Fungicides32 14 %43 19 %5 %14 %(1)%(4)%
Other(17)(24)%(14)(20)%(1)%(19)%(4)%— %
Total$185 12 %$186 12 %6 %6 %1 %(1)%

1.Organic sales is defined as price and volume and excludes currency and portfolio impacts.



A-8
Corteva, Inc.
Significant Items
(Dollars in millions, except per share amounts)
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX)
Three Months Ended March 31,
20212020
Seed$(21)$(10)
Crop Protection(32)(71)
Corporate(47)(42)
Total significant items before income taxes$(100)$(123)
SIGNIFICANT ITEMS - PRE-TAX, AFTER TAX, AND EPS IMPACTS
Pre-tax
After tax4
($ Per Share)
202120202021202020212020
1st Quarter
Restructuring and asset related charges, net 1
$(100)$(70)$(77)$(57)$(0.10)$(0.08)
Loss on divestiture 2
— (53)— (43)— (0.06)
Income tax items 3
— — — (19)— (0.02)
1st Quarter — Total
$(100)$(123)$(77)$(119)$(0.10)$(0.16)


1.First quarter 2021 includes restructuring and asset related charges of $(100). The charges primarily relate to a $(89) charge associated with the 2021 Restructuring Actions and a $(7) charge related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits.

First quarter 2020 includes restructuring and asset related charges of $(70). The charge included a $(63) charge related to the Execute to Win Productivity Program, a $(10) charge related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits, and a $3 asset related benefit associated with the DowDuPont Synergy Program.

2.First quarter 2020 includes a loss of $(53) included in other income - net related to the sale of the La Porte site, for which the company signed an agreement during the first quarter 2020, and closed during the first quarter of 2021.

3.First quarter 2020 includes an after tax charge related to the impact of a state tax valuation allowance in the U.S. based on a change in judgment about the realizability of a deferred tax asset.

4.Unless specifically addressed in notes above, the income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.



A-9
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
Operating Earnings Per Share (Non-GAAP)
Operating earnings per share is defined as earnings per share from continuing operations – diluted, excluding non-operating benefits - net, amortization of intangibles (existing as of Separation), net unrealized gain or loss from mark-to-market activity on certain foreign currency derivative instruments that do not qualify for hedge accounting, and significant items.
Three Months Ended March 31,
2021202020212020
$$EPS (diluted)EPS (diluted)
Net income from continuing operations attributable to Corteva (GAAP)$610 $271 $0.81 $0.36 
Less: Non-operating benefits - net, after tax 1
237 57 0.31 0.08 
Less: Amortization of intangibles (existing as of Separation), after tax(143)(114)(0.19)(0.15)
Less: Mark-to-market gains on certain foreign currency contracts not designated as hedges, after tax2
1 — 
Less: Significant items charge, after tax(77)(119)(0.10)(0.16)
Operating Earnings (Non-GAAP)$592 $447 $0.79 $0.59 

1.Non-operating benefits—net consists of non-operating pension and other post-employment benefit (OPEB) benefits (costs), tax indemnification adjustments, and environmental remediation and legal costs associated with legacy EID businesses and sites. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense.
2.Effective January 1, 2021, on a prospective basis, the company excludes net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. There was no activity in the three months ended March 31, 2020.




A-10
Corteva, Inc.
Operating EBITDA to Operating Earnings Per Share
(Dollars in millions, except per share amounts)

Operating EBITDA to Operating Earnings Per Share
Three Months Ended
March 31,
20212020
Operating EBITDA (Non-GAAP)1
$904 $794 
Depreciation(121)(120)
Interest Income21 18 
Interest Expense(7)(10)
Provision for income taxes on continuing operations before significant items, non-operating benefits - net, amortization of intangibles (existing as of Separation), mark-to-market gains on certain foreign currency contracts not designated as hedges, and exchange gains/(losses), net (Non-GAAP)1
(162)(147)
Base income tax rate from continuing operations (Non-GAAP)1
20.3 %21.6 %
Exchange losses - net, after tax2
(40)(78)
Net income attributable to non-controlling interests(3)(10)
Operating Earnings (Non-GAAP)1
$592 $447 
Diluted Shares (in millions)749.6 752.5 
Operating Earnings Per Share (Non-GAAP)1
$0.79 $0.59 

1.     Refer to pages A-5 through A-9 and A-11 for Non-GAAP reconciliations.
2.     Refer to page A-12 for pre-tax and after tax impacts of exchange gains (losses) - net.




A-11
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)

Reconciliation of Base Income Tax Rate to Effective Income Tax Rate
Base income tax rate is defined as the effective income tax rate less the effect of exchange (losses) gains, significant items, amortization of intangibles (existing as of Separation), mark-to-market gains on certain foreign currency contracts not designated as hedges, and non-operating benefits - net.
Three Months Ended
March 31,
20212020
Income from continuing operations before income taxes (GAAP)
$791 $408 
Add: Significant items - charge 1
100 123 
           Non-operating benefits - net(311)(73)
           Amortization of intangibles (existing as of Separation)183 163 
  Mark-to-market gains on certain foreign currency contracts not designated as hedges2
(1)
Less: Exchange losses, net3
(35)(61)
Income from continuing operations before income taxes, significant items, non-operating benefits - net, amortization of intangibles (existing as of Separation), mark-to-market gains on certain foreign currency contracts not designated as hedges, and exchange losses, net (Non-GAAP)
$797 $682 
Provision for income taxes on continuing operations (GAAP)
$178 $127 
Add: Tax benefits on significant items charge1
23 4 
          Tax expenses on non-operating benefits - net(74)(16)
          Tax benefits on amortization of intangibles (existing as of Separation)40 49 
  Tax benefits on mark-to-market gains on certain foreign currency contracts not designated as hedges2
— 
          Tax expenses on exchange losses, net3
(5)(17)
Provision for income taxes on continuing operations before significant items, non-operating benefits - net, amortization of intangibles (existing as of Separation), mark-to-market gains on certain foreign currency contracts not designated as hedges, and exchange losses, net (Non-GAAP)
$162 $147 
Effective income tax rate (GAAP)
22.5 %31.1 %
Significant items, non-operating benefits, amortization of intangibles (existing as of Separation), and mark-to-market gains on certain foreign currency contracts not designated as hedges effect(0.6)%(4.7)%
Tax rate from continuing operations before significant items, non-operating benefits - net, amortization of intangibles (existing as of Separation), and mark-to-market gains on certain foreign currency contracts not designated as hedges21.9 %26.4 %
Exchange losses, net effect3
(1.6)%(4.8)%
Base income tax rate from continuing operations (Non-GAAP)
20.3 %21.6 %
1. See Significant Items table for further detail.
2. Effective January 1, 2021, on a prospective basis, the company excludes net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. There was no activity in the three months ended March 31, 2020.
3. See page A-12 for further details of exchange gains (losses).



A-12
Corteva, Inc.
(Dollars in millions, except per share amounts)

Exchange Gains/Losses
The company routinely uses foreign currency exchange contracts to offset its net exposures, by currency, related to the foreign currency-denominated monetary assets and liabilities. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes on net monetary asset positions. The hedging program gains (losses) are largely taxable (tax deductible) in the United States (U.S.), whereas the offsetting exchange gains (losses) on the remeasurement of the net monetary asset positions are often not taxable (tax deductible) in their local jurisdictions. The net pre-tax exchange gains (losses) are recorded in other income (expense) - net and the related tax impact is recorded in provision for (benefit from) income taxes on continuing operations in the Consolidated Statements of Operations.
Three Months Ended
March 31,
20212020
Subsidiary Monetary Position Loss
Pre-tax exchange losses$(51)$(226)
Local tax (expenses) benefits (1)23 
Net after tax impact from subsidiary exchange losses$(52)$(203)
Hedging Program Gain
Pre-tax exchange gains$16 $165 
Tax expenses(4)(40)
Net after tax impact from hedging program exchange gains$12 $125 
Total Exchange Loss
Pre-tax exchange losses$(35)$(61)
Tax expenses(5)(17)
Net after tax exchange losses$(40)$(78)
As shown above, the "Total Exchange Loss" is the sum of the "Subsidiary Monetary Position Loss" and the "Hedging Program Gain."