Revenue (Notes)

9 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

REVENUE

Revenue Recognition

Products

Substantially all of Corteva's revenue is derived from product sales. Product sales consist of sales of Corteva's products to farmers, distributors, and manufacturers. Corteva considers purchase orders, which in some cases are governed by master supply agreements, to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year. However, the company has some long-term contracts which can span multiple years.

Revenue from product sales is recognized when the customer obtains control of the company's product, which occurs at a point in time according to shipping terms. Payment terms are generally less than one year from invoicing. The company elected the practical expedient and does not adjust the promised amount of consideration for the effects of a significant financing component when the company expects it will be one year or less between when a customer obtains control of the company's product and when payment is due. The company has elected to recognize shipping and handling activities when control has transferred to the customer as an expense in cost of goods sold. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. In addition, the company elected the practical expedient to expense any costs to obtain contracts as incurred, as the amortization period for these costs would have been one year or less.

The transaction price includes estimates of variable consideration, such as rights of return, rebates, and discounts, that are reductions in revenue. All estimates are based on the company's historical experience, anticipated performance, and the company's best judgment at the time the estimate is made. Estimates of variable consideration included in the transaction price utilize either the expected value method or most likely amount depending on the nature of the variable consideration. These estimates are reassessed each reporting period and are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur upon resolution of uncertainty associated with the variable consideration. The majority of contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as quantity times price per unit. For contracts with multiple performance obligations, the company allocates the transaction price to each performance obligation based on the relative standalone selling price. The standalone selling price is the observable price which depicts the price as if sold to a similar customer in similar circumstances.

Licenses of Intellectual Property

Corteva enters into licensing arrangements with customers under which it licenses its intellectual property. Revenue from the majority of intellectual property licenses is derived from sales-based royalties. Revenue for licensing agreements that contain sales-based royalties is recognized at the later of (i) when the subsequent sale occurs or (ii) when the performance obligation to which some or all of the royalty has been allocated is satisfied.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. The company applies the practical expedient to disclose the transaction price allocated to the remaining performance obligations for only those contracts with an original duration of one year or more. The transaction price allocated to remaining performance obligations with an original duration of more than one year related to material rights granted to customers for contract renewal options were $122 million, $115 million and $114 million at September 30, 2021, December 31, 2020 and September 30, 2020, respectively. The company expects revenue to be recognized for the remaining performance obligations over the next one year to six years.

Contract Balances

Contract liabilities primarily reflect deferred revenue from prepayments under contracts with customers where the company receives advance payments for products to be delivered in future periods. Corteva classifies deferred revenue as current or noncurrent based on the timing of when the company expects to recognize revenue. Contract assets primarily include amounts related to conditional rights to consideration for completed performance not yet invoiced. Accounts receivable are recorded when the right to consideration becomes unconditional.

Contract Balances	September 30, 2021		December 31, 2020		September 30, 2020
(In millions)
Accounts and notes receivable - trade1	$	4,744	$	3,917	$	4,638
Contract assets - current2	$	24	$	22	$	21
Contract assets - noncurrent3	$	60	$	54	$	52
Deferred revenue - current	$	692	$	2,662	$	402
Deferred revenue - noncurrent4	$	111	$	116	$	106

1.Included in accounts and notes receivable - net in the interim Consolidated Balance Sheets.

2.Included in other current assets in the interim Consolidated Balance Sheets.

3.Included in other assets in the interim Consolidated Balance Sheets.

4.Included in other noncurrent obligations in the interim Consolidated Balance Sheets.

Revenue recognized during the nine months ended September 30, 2021 and 2020 from amounts included in deferred revenue at the beginning of the period was $2,454 million and $2,195 million, respectively.

Disaggregation of Revenue

Corteva's operations are classified into two reportable segments: Seed and Crop Protection. The company disaggregates its revenue by major product line and geographic region, as the company believes it best depicts the nature, amount and timing of its revenue and cash flows. Net sales by major product line are included below:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Corn	$	437	$	303	$	4,505	$	4,224
Soybean	157		116		1,494		1,382
Other oilseeds	94		62		661		529
Other	50		42		350		381
Seed	738		523		7,010		6,516
Herbicides	782		583		2,737		2,315
Insecticides	416		395		1,261		1,218
Fungicides	339		261		911		714
Other	96		101		257		247
Crop Protection	1,633		1,340		5,166		4,494
Total	$	2,371	$	1,863	$	12,176	$	11,010

.

Sales are attributed to geographic regions based on customer location. Net sales by geographic region and segment are included below:

Seed	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
North America1	$	168	$	97	$	4,482	$	4,290
EMEA2	153		117		1,398		1,262
Latin America	334		246		842		668
Asia Pacific	83		63		288		296
Total	$	738	$	523	$	7,010	$	6,516

Crop Protection	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
North America1	$	422	$	390	$	1,693	$	1,528
EMEA2	237		198		1,304		1,163
Latin America	763		559		1,361		1,086
Asia Pacific	211		193		808		717
Total	$	1,633	$	1,340	$	5,166	$	4,494

1.Represents U.S. & Canada.

2.Europe, Middle East, and Africa ("EMEA").