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Segment Reporting (Notes)
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block] SEGMENT INFORMATION

In connection with the Internal Reorganizations and the Corteva Distribution, the company realigned its reporting structure and changed the manner in which the chief operating decision maker (“CODM”) allocates resources and assesses performance. As a result, new operating segments were created, Seed and Crop Protection. The segment reporting changes were retrospectively applied to all periods presented.

Segment operating EBITDA is the primary measure of segment profitability used by Corteva’s CODM. For purposes of the three and six months ended June 30, 2018 and the six months ended June 30, 2019, segment operating EBITDA is calculated on a pro forma basis, as this is the manner in which the CODM assesses performance and allocates resources. The company defines segment operating EBITDA as earnings (i.e., income from continuing operations before income taxes) before interest, depreciation, amortization, corporate expenses, non-operating costs-net and foreign exchange gains (losses), excluding the impact of significant items. Non-operating costs-net consists of non-operating pension and other post-employment benefit (OPEB) costs, environmental remediation and legal costs associated with legacy EID businesses and sites.

Pro forma adjustments used in the calculation of pro forma segment operating EBITDA were determined in accordance with Article 11 of Regulation S-X. These adjustments give effect to the Merger, the Business Realignment, Internal Reorganization, the debt redemptions/repayments discussed in Note 17 - Short-Term Borrowings, Long-Term Debt and Available Credit Facilities, to the interim Consolidated Financial Statements and the Corteva Distribution as if they had been consummated on January 1, 2016.

Corporate Profile
The company conducts its global operations through the following reportable segments:

Seed
The company’s seed segment is a global leader in developing and supplying advanced germplasm and traits that produce optimum yield for farms around the world. The segment is a leader in many of the company’s key seed markets, including North America corn and soybeans, Europe corn and sunflower, as well as Brazil, India, South Africa and Argentina corn. The segment offers trait technologies that improve resistance to weather, disease, insects and weeds, and trait technologies that enhance food and nutritional characteristics, and also provides digital solutions that assist farmer decision-making with a view to optimize product selection and, ultimately, maximize yield and profitability. The segment competes in a wide variety of agricultural markets.

Crop Protection
The crop protection segment serves the global agricultural input industry with products that protect against weeds, insects and other pests, and disease, and that improve overall crop health both above and below ground via nitrogen management and seed-applied technologies. The segment is a leader in global herbicides, insecticides, below-ground nitrogen stabilizers and pasture and range management herbicides.

Three Months Ended June 30,
(In millions)
Seed
Crop Protection
Total
2019
 

 

 

Net sales
$
3,699

$
1,857

$
5,556

Segment operating EBITDA
$
1,036

$
450

$
1,486

Segment assets1,2
$
26,623

$
13,205

$
39,828

 




 
2018
 

 

 

Net sales
$
3,864

$
1,867

$
5,731

Pro forma segment operating EBITDA
$
1,158

$
423

$
1,581

Segment assets1
$
34,703

$
9,738

$
44,441

1.
Segment assets at December 31, 2018 were $29,286 million and $9,346 million for Seed and Crop Protection, respectively. The reduction in segment assets between June 30, 2018 and December 31, 2018 was driven by the goodwill impairment recorded in the third quarter of 2018.
2. On June 1, 2019, as a result of changes in reportable segments, $3,382 million of goodwill was reallocated from the Seed reportable segment to the Crop Protection reportable segment.  This change was not reflected in segment assets prior to June 1, 2019.     

Six Months Ended June 30,
(In millions)
Seed
Crop Protection
Total
2019
 

 

 

Net sales
$
5,666

$
3,286

$
8,952

Pro forma segment operating EBITDA
$
1,361

$
670

$
2,031

 
 
 
 
2018
 

 

 

Net sales
$
6,165

$
3,360

$
9,525

Pro forma segment operating EBITDA
$
1,598

$
746

$
2,344



Reconciliation to interim Consolidated Financial Statements
Income (loss) from continuing operations after income taxes to segment operating EBITDA

(In millions)
Three Months Ended
June 30,
Six Months Ended
June 30,
2019
2018 1
2019 1
2018 1
Income (loss) from continuing operations after income taxes
$
483

$
375

$
299

$
(63
)
Provision for (benefit from) income taxes on continuing operations
270

(67
)
203

(179
)
Income (loss) from continuing operations before income taxes
753

308

502

(242
)
Depreciation and amortization
227

237

485

452

Interest income
(17
)
(24
)
(33
)
(51
)
Interest expense
34

88

93

169

Exchange losses - net 2
32

1

59

66

Non-operating benefits - net
(32
)
(55
)
(74
)
(106
)
Significant items
455

203

640

507

Pro forma adjustments3
—

786

298

1,478

Corporate expenses
34

37

61

71

Segment operating EBITDA
$
1,486

$
1,581

$
2,031

$
2,344

1.
Periods prior to March 31, 2019 are on a pro forma basis, prepared in accordance with Article 11 of Regulation S-X.
2.
Excludes a $(50) million foreign exchange loss for the six months ended June 30, 2018 related to adjustments to foreign currency exchange contracts as a result of U.S. tax reform, as it is included within significant items. See Note 9 - Supplementary Information for additional information.
3.
Refer to page 64 for further details of pro forma adjustments.

Segment assets to total assets (in millions)
June 30, 2019
December 31, 2018
June 30, 2018
Total segment assets
$
39,828

$
38,632

$
44,441

Corporate assets
4,170

4,417

5,094

Assets related to discontinued operations1
—

65,634

66,594

Total assets
$
43,998

$
108,683

$
116,129


1.
See Note 5 - Divestitures and Other Transactions for additional information on discontinued operations.

Significant Pre-tax (Charges) Benefits Not Included in Pro Forma Segment Operating EBITDA
The three and six months ended June 30, 2019 and 2018, respectively, included the following significant pre-tax (charges) benefits which are excluded from pro forma segment operating EBITDA:

(In millions)
Three Months Ended
June 30,
Six Months Ended
June 30,
2019
2018
2019
2018
As Reported
Pro Forma
Pro Forma
Pro Forma
Seed 1,2,3
$
(101
)
$
(37
)
$
(152
)
$
(83
)
Crop Protection 4,5
(2
)
24

(25
)
12

Corporate 6,7,8,9
(352
)
(190
)
(463
)
(436
)
Total
$
(455
)
$
(203
)
$
(640
)
$
(507
)
1.
Includes restructuring and asset related charges of $(49) million and $(76) million for the three and six months ended June 30, 2019, respectively, and $(37) million and $(83) million for the three and six months ended June 30, 2018, respectively. The charges for 2019 relate to the Synergy Program and the DowDuPont Agriculture Division Restructuring Program. The charges for 2018 related to the Synergy Program.
2.
Includes a $(24) million loss recorded in other income - net for the six months ended June 30, 2019 related to Historical Dow’s sale of a joint venture related to synergy actions.
3.
Includes a charge of $(52) million included in cost of goods sold for the three and six months ended June 30, 2019 related to the amortization on the inventory that was stepped up to fair value in connection with the Merger.
4.
Includes restructuring and asset related charges of $(2) million and $(25) million for the three and six months ended June 30, 2019, respectively, and $(12) million for the six months ended June 30, 2018. The charges for 2019 relate to the Synergy Program and the DowDuPont Agriculture Division Restructuring Program. The charges for 2018 related to the Synergy Program.
5.
Includes a $24 million gain recorded in other income - net for the three and six months ended June 30, 2018, related to an asset sale.
6.
Includes restructuring and asset related charges of $(9) million and $(20) million for the three and six months ended June 30, 2019, respectively, and $(64) million and $(136) million for the three and six months ended June 30, 2018, respectively. The charges for 2019 and 2018 related to the Synergy Program.
7.
Includes integration and separation costs of $(330) million and $(430) million for the three and six months ended June 30, 2019. Includes integration costs of $(126) million and $(250) million for the three and six months ended June 30, 2018, respectively.
8.
Includes a $(13) million loss included in loss on early extinguishment of debt for the three and six months ended June 30, 2019 related to the difference between the redemption price and the par value of the Make Whole Notes and Term Loan Facility, partially offset by the write-off of unamortized step-up related to the fair value step-up of EID’s debt.
9.
Includes $(50) million foreign exchange loss for the six months ended June 30, 2018 related to adjustments to foreign currency exchange contracts as a result of U.S. tax reform.