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MarketScreener Homepage  >  Equities  >  Nyse  >  Corteva, Inc.    CTVA

CORTEVA, INC.

(CTVA)
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Corteva : Press Release ()

11/19/2020 | 05:17am EST

News Release 3Q & YTD2020

Corteva Reports Third Quarter and Year-to-Date 2020 Results - Affirms 2020 Guidance

Company Delivers Year-to-Date Sales and Earnings Increases over Prior Year

WILMINGTON, Del., November 4, 2020 - Corteva, Inc. (NYSE: CTVA) ("Corteva" or the "Company") today reported financial results for the third quarter and nine months ended September 30, 2020.

3Q 2020 Results Overview

Net Sales

EPS

Loss from Cont. Ops.

(After Tax)

GAAP

$1.86 B

$(0.52)

$(390)M

vs. 3Q 2019

(3)%

+25%

+26%

Organic Sales1

Operating EPS1

Operating EBITDA1

NON-GAAP

$2.07 B

$(0.39)

$(179) M

vs. 3Q 2019

+9%

Flat

+14%

  • Net sales for third quarter 2020 were down 3% versus prior year. Organic sales1 grew 9%. Volume and price improvement on continued penetration of new products were more than offset by the impact of currency and seasonal shifts in Seed.
  • Crop Protection net sales grew 9% and organic1 sales increased 21% with sales gains in every region except North America3. Volume and price improvement were primarily driven by the continued adoption of new Crop Protection products in Latin America, Asia Pacific, and EMEA3.
  • A return to a normalized North America3 season drove lower Seed volumes in third quarter 2020, resulting in lower year-over-year sales in Seed, with net sales decreases of 23%, down 14% on an organic1 basis.
  • GAAP loss and earnings per share (EPS) from continuing operations were $(390) million and $(0.52) for the third quarter 2020, respectively.
  • Operating EBITDA1 was a loss of $(179) million, improved 14% versus prior year. Operating EBITDA margin1 improved 120 basis points. Volume gains and favorable mix in Crop Protection, coupled with execution on synergies and productivity, more than offset timing shifts in Seed and currency headwinds to drive margin expansion.
  • Merger cost synergies and productivity were approximately $40 million for the third quarter and remain on track to be $230 million for the full year. SG&A expense as a percentage of sales improved 175 bps on currency, ongoing productivity, cost controls, and lower commissions.
  • The Company continues to maintain a strong liquidity position - and took further action during the quarter to strengthen its cash flow focus, improving net working capital turns 7% versus prior year.

YTD 2020 Results Overview

Net Sales

EPS

Income from Cont.

Ops. (After Tax)

GAAP

$11.0 B

$0.85

$657 M

vs. YTD 20192

+1%

+963%

+866%

Organic Sales1

Operating EPS1

Operating EBITDA1

NON-GAAP

$11.52 B

$1.46

$1.85 B

vs. YTD 20192

+6%

+7%

+5%

1. Organic sales, Operating EPS, Pro Forma Operating EPS, Operating EBITDA and Pro Forma Operating EBITDA, Operating EBITDA Margin and Pro Forma Operating EBITDA Margin are non-GAAP measures. See page A-6 for further discussion. 2. Year-to-date 2019 GAAP information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X.Non-GAAP measures for these periods are reconciled to the GAAP pro forma measure. 3. North America is defined as U.S. and Canada. EMEA is defined as Europe, Middle East and Africa. 4. Enlist E3™ soybeans are jointly developed by Dow AgroSciences and MS Technologies™

News Release 3Q & YTD2020

"Corteva's performance year to date in 2020 reflects the strong and consistent execution from our global team. We delivered sales and earnings growth during the first three quarters of the year despite continued market volatility and uncertainty. Our portfolio of new technology was a critical driver in this progress, as we delivered volume and price improvements in almost all regions through the launch and ramp-up of our new Seed and Crop Protection products, including Enlist E3™4, Qrome®, Inatreq™, Arylex™ and Rinskor™, as well as continued demand for key differentiated technologies such as our supply- constrained Spinosyns. In Seed, our price for value strategy resulted in margin expansion, even in the face of ongoing challenges and competitive pressures. Additionally, we continued to fortify our already strong balance sheet and liquidity position by preserving cash and implementing further actions to reduce costs and optimize productivity. Reflecting our commitments on disciplined capital allocation and strong cash generation, we are accelerating our continued actions to return cash to shareholders - as evidenced by our decision to pull forward our previously announced share buyback.

We affirmed our full year guidance for 2020 - and remain confident in the path we have outlined. Our teams around the world are tightly managing all levers as we focus on finishing 2020 strong - and, as we look ahead to 2021, ensuring we are best positioned to maximize the potential of our industry-leading innovation pipeline and global distribution system while continuing to drive margin enhancement, accelerate productivity improvement and deliver increased value for our shareholders."

  • James C. Collins, Jr., Corteva Chief Executive Officer

Company Updates

Price for Value Strategy Strengthens Competitive Position Globally

Corteva is strengthening its position in key Seed markets through its superior product performance and price for value strategy. Building on the ongoing ramp-up of Qrome® in North America, Corteva has driven year-to-date Seed price increases in Asia Pacific, Latin America and EMEA3 on the strength of its product portfolio.

Driving Additional Progress on Accelerated Enlist E3™4 Launch

The Company continues to rapidly ramp-up its Enlist E3™4 technology - and has implemented changes to its Seed production plan to meet expected demand in 2021. With strong early orders as an indicator of adoption increases, Corteva remains confident in its market penetration expectations.

Previously Approved Capacity Expansion on Track to Accelerate Growth

Corteva continues to drive sales growth on its supply- constrained, high-margin Spinosyns insecticides. Year-to- date overall insecticide sales increased 5%, driven by continued capacity expansion progress. These actions are expected to enable $1 billion in sales of Spinosyns insecticides by 2023, an expected 30% increase over 2020 estimates.

Crop Protection Manufacturing Actions Target Cost Improvements

The Company continues to further streamline its global manufacturing footprint through the shutdown of non- competitive facilities and strategic changes to product supply arrangements. These actions, which are included in its ongoing productivity program, are expected to deliver $150 million in incremental savings by the end of 2022.

Sustaining Operational Efficiencies Gained Through COVID-19 Response

In response to the COVID-19 pandemic, Corteva implemented targeted spending actions to address near- term market volatility. These actions have delivered $50 million in cost savings through third quarter 2020, which helped to offset strategic investments during this period. Corteva expects to keep most of these structural cost controls in place into 2021.

Driving Ongoing Progress on Cost and Productivity Commitments

Continued progress on cost and productivity commitments, resulted in $170 million in cost synergies and productivity savings delivered year to date in 2020. The Company remains on track to achieve its cost and productivity targets for the full year 2020.

Accelerated Remuneration Actions Demonstrate Strong Focus on Shareholders

Corteva has returned more than $370 million to shareholders through the end of September in the form of quarterly dividends and share repurchases. Based upon underlying operational performance, the Company expects to make solid progress on the authorized share repurchase program by the end of the year. With the additional focus, the Company now expects to complete the repurchase program by the end of 2021, six months ahead of the initial timeline.

2

News Release 3Q & YTD2020

Summary of Third Quarter 2020

For the third quarter ended September 30, 2020, net sales declined 3% versus the same period last year, as organic sales1 increased 9%.

Volume increased 7% versus the prior-year period. Gains were driven primarily by continued adoption of new Crop Protection products, and were partially offset by the impact of seasonally lower Seed volumes due to a more normalized planting season in North America as compared to the prior-year period.

Local price increased 2% versus third quarter 2019. Higher prices in Latin America were more than offset by the impact of currency, which represented a headwind of 11% globally. Currency mitigation and new products drove price gains in Latin America, EMEA3, and Asia Pacific.

GAAP loss from continuing operations after income taxes was $(390) million in third quarter 2020. Operating EBITDA1 for the third quarter was a loss of $(179) million, a 14% improvement compared to the same period last year. Volume gains and favorable mix in Crop Protection, coupled with ongoing cost synergies and productivity efforts, more than offset currency and the impact of timing shifts in Seed.

The Company continues to drive working capital and productivity improvements, with a focus on cash flow. As a result, Corteva delivered a 7% improvement in Net Working Capital turns.

($ in millions,

3Q

3Q

%

%

except where noted)

2020

2019

Change

Organic Change1

Net Sales

$1,863

$1,911

(3)%

9%

North America

$487

$623

(22)%

(22)%

EMEA

$315

$305

3%

7%

Latin America

$805

$762

6%

30%

Asia Pacific

$256

$221

16%

20%

Summary of Year to Date 2020

For the year-to-date period ended September 30, 2020, net sales increased 1% versus prior year, with an organic sales1 increase of 6%.

Volume increased 4% versus the year-ago period. Year-to- date volume gains reflect increased demand for new products globally and volume growth attributable to the recovery of planted area in North America.

Local price increased 2% versus the prior-year period, with price increases in most regions. Currency

represented a headwind of 4%, driven primarily by the impact of the Brazilian Real.

GAAP income from continuing operations after income taxes was $657 million year to date in 2020. Operating EBITDA1 for the year-to-date period was $1.85 billion, an increase of 5% as compared to the same period last year on a pro forma basis. Favorable mix and volume gains, coupled with ongoing productivity actions, more than offset the unfavorable impact of currency.

($ in millions,

YTD

YTD

%

%

except where noted)

2020

2019

Change

Organic Change1

Net Sales

$11,010

$10,863

1%

6%

North America

$5,818

$5,800

--%

1%

EMEA

$2,425

$2,336

4%

8%

Latin America

$1,754

$1,780

(1)%

17%

Asia Pacific

$1,013

$947

7%

13%

3

News Release 3Q & YTD 2020

Crop Protection Summary

Crop Protection net sales were $1.3 billion in the third quarter of 2020, up from $1.2 billion in the year-ago period. Gains were driven by a 16% increase in volume and a 5% increase in local price, partially offset by an 11% decline in currency and a 1% impact from portfolio.

Volume gains were primarily driven by a strong start to the Latin America season. This impact was coupled with strong demand for new products globally, including EnlistTM and RinskorTM herbicides and IsoclastTM and PyraxaltTM insecticides.

Local price rose due to increases in Latin America to offset currency. Unfavorable currency impacts were led by the Brazilian Real. The portfolio impact was driven by the strategic divestiture of an off-patent product.

Segment operating EBITDA was $130 million in the third quarter of 2020, up from $119 million in the year-ago period. Volume gains, favorable mix, and ongoing cost synergies and productivity efforts more than offset the unfavorable impact of currency and increased investment in R&D.

($ in millions,

3Q

3Q

%

%

except where noted)

2020

2019

Change

Organic Change1

North America

$390

$397

(2)%

(2)%

EMEA

$198

$183

8%

8%

Latin America

$559

$491

14%

43%

Asia Pacific

$193

$159

21%

27%

Total 3Q Crop

$1,340

$1,230

9%

21%

Protection Net Sales

Crop Protection net sales were $4.5 billion for the first nine months of 2020, approximately flat compared to the first nine months of 2019. The change was driven by a 5% increase in volume and a 2% increase in local price, which was more than offset by a 6% decline in currency and a 1% impact from portfolio.

The increase in volume was driven by strong demand for new products globally, including RinskorTM, ArylexTM, and EnlistTM herbicides and IsoclastTM insecticide. The increase in local price was driven by increases in Latin America to offset currency. Unfavorable currency impacts were led by the Brazilian Real. Pricing gains from new

product launches were partially offset by increased grower incentive program discounts in North America. The portfolio impact was driven by divestitures of off- patent products in Asia Pacific and North America.

Segment operating EBITDA was $677 million for the first nine months of 2020, down from pro forma segment operating EBITDA of $789 million for the first nine months of 2019. Sales from new products and ongoing cost synergies and productivity efforts were more than offset by higher input costs, the unfavorable impact of currency and increased investment in R&D.

($ in millions,

YTD

YTD

%

%

except where noted)

2020

2019

Change

Organic Change1

North America

$1,528

$1,562

(2)%

(1)%

EMEA

$1,163

$1,136

2%

6%

Latin America

$1,086

$1,144

(5)%

15%

Asia Pacific

$717

$674

6%

12%

Total YTD Crop

$4,494

$4,516

0%

7%

Protection Net Sales

4

News Release 3Q & YTD 2020

Seed Summary

Seed net sales were $523 million in third quarter 2020, down from $681 million in same quarter last year. The decrease was driven by an 11% decline in volume, a 9% decline in currency, and a 3% decline in local price.

The decrease in volume was the effect of timing shifts in North America due to the unprecedented weather impacts in the year-ago period, which shifted Seed sales from the second quarter 2019 to the third quarter 2019. The impact of timing was partially offset by strong summer and early safrinha sales in Latin America. Unfavorable currency impacts were led by the Brazilian Real. The decline in local price was primarily due to the delay in

timing of 2019 Seed sales, coupled with the end-of- season customer settlements in North America.

Segment operating EBITDA was $(282) million in the third quarter of 2020, a 4% improvement compared to segment operating EBITDA of $(295) million in the prior-year period. Ongoing cost synergies and productivity efforts, lower bad debt expense, and lower commissions more than offset volume and price declines and the unfavorable impact of currency.

($ in millions,

3Q

3Q

%

%

except where noted)

2020

2019

Change

Organic Change1

North America

$97

$226

(57)%

(55)%

EMEA

$117

$122

(4)%

6%

Latin America

$246

$271

(9)%

7%

Asia Pacific

$63

$62

2%

2%

Total 3Q

$523

$681

(23)%

(14)%

Seed Net Sales

Seed net sales were $6.5 billion for the first nine months of 2020, up from $6.3 billion in the first nine months of 2019. The increase was driven by a 4% increase in volume and a 2% increase in local price, partially offset by a 3% decline in currency.

Seed reported price and volume gains in all regions, led by strong summer and early safrinha sales in Latin America and share gains in EMEA. Global corn price increased 2% and North America soybean price increased 1% versus the year-ago period. Unfavorable currency impacts were led by the Brazilian Real.

Segment operating EBITDA was approximately $1.3 billion for the first nine months of 2020, up 18% from pro forma segment operating EBITDA of approximately $1.1 billion for the first nine months of 2019. Favorable mix, volume gains, and ongoing cost synergies and productivity efforts more than offset the unfavorable impact of currency, higher commissions, and input costs from lower yields on corn.

($ in millions,

YTD

YTD

%

%

except where noted)

2020

2019

Change

Organic Change1

North America

$4,290

$4,238

1%

2%

EMEA

$1,262

$1,200

5%

11%

Latin America

$668

$636

5%

20%

Asia Pacific

$296

$273

8%

14%

Total YTD

$6,516

$6,347

3%

6%

Seed Net Sales

5

News Release 3Q & YTD 2020

Outlook

The Company affirmed its previously provided guidance for the full year 2020. Corteva expects net sales growth of 1-2% for the year. Operating EBITDA1 is expected to be in the range of $1.9 billion to $2 billion and operating EPS1 range is expected to be between $1.25 and $1.45 per share.

Corteva is not able to reconcile its forward-looking non- GAAP financial measures to its most comparable U.S. GAAP financial measures, as it is unable to predict with reasonable certainty items outside of its control, such as significant items, without unreasonable effort. This outlook does not contemplate any operational disruptions, significant changes in customers' demand or ability to pay, or further acceleration of currency impacts resulting from the COVID-19 pandemic or political instability.

Third Quarter Conference Call

The Company will host a live webcastof its third quarter earnings conference call with investors to discuss its results and outlook tomorrow, November 5, 2020, at 9:00 a.m. ET.

About Corteva Agriscience

The slide presentation that accompanies the conference call is posted on the Company's Investor Events and Presentations page. A replay of the webcast will also be available on the Investor Events and Presentations page.

Corteva, Inc. (NYSE: CTVA) is a publicly traded, global pure-play agriculture company that provides farmers around the world with the most complete portfolio in the industry - including a balanced and diverse mix of seed, crop protection and digital solutions focused on maximizing productivity to enhance yield and profitability. With some of the most recognized brands in agriculture and an industry-leading product and technology pipeline well positioned to drive growth, the Company is committed to working with stakeholders throughout the food system as it fulfils its promise to enrich the lives of those who produce and those who consume, ensuring progress for generations to come. Corteva became an independent public company on June 1, 2019, and was previously the Agriculture Division of DowDuPont. More information can be found at www.corteva.com.

Follow Corteva on Facebook, Instagram, LinkedIn, Twitterand YouTube.

Cautionary Statement About Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and may be identified by their use of words like "guidance", "plans," "expects," "will," "anticipates," "believes," "intends," "projects," "estimates," "outlook," or other words of similar meaning. All statements that address expectations or projections about the future, including statements about Corteva's strategy for growth, product development, regulatory approval, market position, anticipated benefits of recent acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures, and financial results, as well as expected benefits from, the separation of Corteva from DowDuPont, are forward- looking statements.

Forward-looking statements are based on certain assumptions and expectations of future events which may not be accurate or realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond Corteva's control. While the list of factors presented below is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Corteva's business, results of operations and financial condition. Some of the important factors that could cause Corteva's actual results to differ materially from those projected in any such forward-looking statements include: (i) failure to successfully develop and commercialize Corteva's pipeline; (ii) effect of competition and consolidation in Corteva's industry; (iii) failure to obtain or maintain the necessary regulatory approvals for some Corteva's products; (iv) failure to enforce Corteva's intellectual property rights or defend against intellectual property claims asserted by others; (v) effect of competition from manufacturers of generic products; (vi) impact of Corteva's dependence on third parties with respect to certain of its raw materials or licenses and commercialization; (vii) costs of complying with evolving regulatory requirements and the effect of actual or alleged violations of environmental laws or permit requirements; (viii) effect of the degree of public understanding and acceptance or perceived public acceptance of Corteva's biotechnology and other agricultural products; (ix) effect of changes in agricultural and related policies of governments and international organizations; (x) effect of industrial espionage and other disruptions to Corteva's supply chain, information technology or network systems; (xi) competitor's establishment of an intermediary platform for distribution of Corteva's products; (xii) effect of volatility in Corteva's input costs; (xiii) failure to raise capital through the capital markets or short-term borrowings on terms acceptable to Corteva; (xiv) failure of Corteva's customers to pay their debts to Corteva, including customer financing programs; (xv) failure to realize the anticipated benefits of the internal reorganizations taken by DowDuPont in connection with the spin-off of Corteva, including failure to benefit from significant cost synergies; (xvi) risks related to the indemnification obligations of legacy EID liabilities in connection with the separation of Corteva; (xvii) increases in pension and other post-employment benefit plan funding obligations; (xviii) effect of compliance with environmental laws and requirements and adverse judgments on litigation; (xix) risks related to Corteva's global operations; (xx) effect of climate change and unpredictable seasonal and weather factors; (xxi) effect of counterfeit products; (xxii) failure to effectively manage acquisitions, divestitures, alliances and other portfolio actions; (xxiii) risks related to non-cash charges from impairment of goodwill or intangibles assets; (xxiv) risks related to COVID-19; (xxv) risks related to oil and commodity markets; and (xxvi) other risks related to the Separation from DowDuPont. Additionally, there may be other risks and uncertainties that Corteva is unable to currently identify or that Corteva does not currently expect to have a material impact on its business. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of Corteva's management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Corteva disclaims and does not undertake any obligation to update or revise any forward-looking statement, except as required by applicable law. A detailed discussion of some of the significant risks and uncertainties which may cause results and events to differ materially from such forward-looking statements or other estimates is included in the "Risk Factors" section of Corteva's Annual Report on Form 10-K, as modified by subsequent Quarterly Reports on Forms 10-Q and Current Reports on Form 8-K.

6

News Release 3Q & YTD 2020

Corteva Unaudited Pro Forma Financial Information

In order to provide the most meaningful comparison of results of operations, supplemental unaudited pro forma financial information for the first half of 2019 has been included in this presentation. This presentation presents the pro forma results of Corteva, after giving effect to events that are (1) directly attributable to the merger of DuPont and Dow, debt retirement transactions related to paying off or retiring portions of Historical DuPont's existing debt liabilities, and the separation and distribution to DowDuPont stockholders of all the outstanding shares of Corteva common stock; (2) factually supportable and (3) with respect to the pro forma statements of income, expected to have a continuing impact on the consolidated results. Refer to Corteva's Form 10 registration statement filed on May 6, 2019, which can be found on the investors section of the Corteva website, for further details on the above transactions. The pro forma financial statements were prepared in accordance with Article 11 of Regulation S-X, and are presented for informational purposes only, and do not purport to represent what the results of operations would have been had the above actually occurred on the dates indicated, nor do they purport to project the results of operations for any future period or as of any future date.

Regulation G (Non-GAAP Financial Measures)

This earnings release includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. These measures may include organic sales, organic growth (including by segment and region), operating EBITDA, pro forma operating EBITDA, operating EBITDA margin, pro forma operating EBITDA margin, operating earnings per share, pro forma operating earnings per share, base tax rate, and pro forma base tax rate. Management uses these measures internally for planning and forecasting, including allocating resources and evaluating incentive compensation. Management believes that these non-GAAP measures best reflect the ongoing performance of the Company during the periods presented and provide more relevant and meaningful information to investors as they provide insight with respect to ongoing operating results of the Company and a more useful comparison of year over year results. These non-GAAP measures supplement the Company's U.S. GAAP disclosures and should not be viewed as an alternative to U.S. GAAP measures of performance. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Reconciliations for these non-GAAP measures to U.S. GAAP are provided in the Selected Financial Information and Non-GAAP Measures starting on page A-6 of the Financial Statement Schedules. For first quarter and prior year, these non-GAAP measures are being reconciled to a pro forma GAAP financial measure prepared and presented in accordance with Article 11 of Regulation S-X. See Article 11 Pro Forma Combined Statements of Operations starting on page A-17 of the Financial Statement Schedules.

Corteva is not able to reconcile its forward-lookingnon-GAAP financial measures to their most comparable U.S. GAAP financial measures, as it is unable to predict with reasonable certainty items outside of the company's control, such as Significant Items, without unreasonable effort. For Significant items reported in the periods presented, refer to page A-6 of the Financial Statement Schedules. Beginning January 1, 2020, the company presents accelerated prepaid royalty amortization expense as a significant item. Accelerated prepaid royalty amortization represents the noncash charge associated with the recognition of upfront payments made to Monsanto in connection with the Company's non-exclusive license in the United States and Canada for Monsanto's Genuity® Roundup Ready 2 Yield® Roundup Ready 2 Xtend® herbicide tolerance traits. During the five-yearramp-up period of Enlist E3TM, Corteva is expected to significantly reduce the volume of products with the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits beginning in 2021, with expected minimal use of the trait platform after the completion of the ramp-up.

Organic sales is defined as price and volume and excludes currency and portfolio impacts. Operating EBITDA is defined as earnings (i.e., income from continuing operations before income taxes) before interest, depreciation, amortization, non-operating benefits , net and foreign exchange gains (losses) net, excluding the impact of significant items (including goodwill impairment charges). Non-operating benefits, net consists of non-operating pension and other post-employment benefit (OPEB) credits, tax indemnification adjustments, environmental remediation and legal costs associated with legacy businesses and sites of Historical DuPont. 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. Operating EBITDA margin is defined as Operating EBITDA as a percentage of net sales. Operating earnings per share are defined as "Earnings per common share from continuing operations - diluted" excluding the after-tax impact of significant items (including goodwill impairment charges), the after- tax impact of non-operating benefits, net, and the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont. Although amortization of the Company's intangible assets is excluded from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in amortization of additional intangible assets. Base tax rate is defined as the effective tax rate excluding the impacts of foreign exchange gains (losses) net, non-operating benefits, net, amortization of intangibles as of the Separation from DowDuPont, and significant items (including goodwill impairment charges). The first half of 2019 is on a pro forma basis as discussed above in the paragraph 'Corteva Unaudited Pro Forma Financial Information'.

  • TM SM Trademarks and service marks of Dow AgroSciences, DuPont or Pioneer, and their affiliated companies or their respective owners.
    • # #

11/04/20

Media Contact:

Investor Contact:

Gregg Schmidt

Megan Britt

+1 302-485-3260

+1 302-485-3279

gregg.m.schmidt@corteva.com

megan.britt@corteva.com

7

A-1

Corteva, Inc.

Consolidated Statements of Operations

(Dollars in millions, except per share amounts)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Net sales

$

1,863

$

1,911

$

11,010

$

10,863

Cost of goods sold

1,297

1,349

6,395

6,607

Research and development expense

284

289

837

857

Selling, general and administrative expenses

597

646

2,319

2,318

Amortization of intangibles

162

100

501

314

Restructuring and asset related charges - net

49

46

298

167

Integration and separation costs

-

152

-

694

Other income - net

30

59

120

90

Loss on early extinguishment of debt

-

-

-

13

Interest expense

11

19

35

112

(Loss) income from continuing operations before income taxes

(507)

(631)

745

(129)

(Benefit from) provision for income taxes on continuing operations

(117)

(104)

88

99

(Loss) income from continuing operations after income taxes

(390)

(527)

657

(228)

Income (loss) from discontinued operations after income taxes

-

22

1

(695)

Net (loss) income

(390)

(505)

658

(923)

Net income (loss) attributable to noncontrolling interests

2

(11)

18

15

Net (loss) income attributable to Corteva

$

(392)

$

(494)

$

640

$

(938)

Basic (loss) earnings per share of common stock:

Basic (loss) earnings per share of common stock from continuing operations

$

(0.52)

$

(0.69)

$

0.85

$

(0.32)

Basic earnings (loss) per share of common stock from discontinued operations

-

0.03

-

(0.93)

Basic (loss) earnings per share of common stock

$

(0.52)

$

(0.66)

$

0.85

$

(1.25)

Diluted (loss) earnings per share of common stock:

Diluted (loss) earnings per share of common stock from continuing operations

$

(0.52)

$

(0.69)

$

0.85

$

(0.32)

Diluted earnings (loss) per share of common stock from discontinued operations

-

0.03

-

(0.93)

Diluted (loss) earnings per share of common stock

$

(0.52)

$

(0.66)

$

0.85

$

(1.25)

Average number of shares outstanding used in earnings per share (EPS)

calculation (in millions)

Basic

749.5

749.5

749.5

749.4

Diluted

749.5

749.5

752.0

749.4

A-2

Corteva, Inc.

Condensed Consolidated Balance Sheets (Dollars in millions, except share amounts)

September 30,

December 31,

September 30,

2020

2019

2019

Assets

Current assets

Cash and cash equivalents

$

2,768

$

1,764

$

1,980

Marketable securities

152

5

117

Accounts and notes receivable, net

5,627

5,528

6,574

Inventories

4,374

5,032

4,403

Other current assets

1,167

1,190

1,043

Total current assets

14,088

13,519

14,117

Investment in nonconsolidated affiliates

62

66

70

Property, plant and equipment, net of accumulated depreciation

September 30, 2020 - $3,712 ; December 31, 2019 - $3,326 and

4,273

4,546

4,503

September 30, 2019 - $3,186

Goodwill

10,110

10,229

10,168

Other intangible assets

10,914

11,424

11,667

Deferred income taxes

289

287

270

Other assets

1,954

2,326

2,440

Total Assets

$

41,690

$

42,397

$

43,235

Liabilities and Equity

Current liabilities

Short-term borrowings and finance lease obligations

$

2,142

$

7

$

3,604

Accounts payable

2,994

3,702

3,014

Income taxes payable

168

95

126

Accrued and other current liabilities

2,430

4,434

2,249

Total current liabilities

7,734

8,238

8,993

Long-Term Debt

1,102

115

116

Other Noncurrent Liabilities

Deferred income tax liabilities

740

920

1,328

Pension and other post employment benefits - noncurrent

5,904

6,377

5,405

Other noncurrent obligations

1,864

2,192

2,132

Total noncurrent liabilities

9,610

9,604

8,981

Commitments and contingent liabilities

Stockholders' equity

Common stock, $0.01 par value; 1,666,667,000 shares authorized; issued

at September 30, 2020 - 747,492,000, December 31, 2019 - 748,577,000,

7

7

7

and September 30, 2019 - 748,390,000

Additional paid-in capital

27,895

27,997

28,072

Accumulated deficit

-

(425)

(397)

Accumulated other comprehensive loss

(3,796)

(3,270)

(2,667)

Total Corteva stockholders' equity

24,106

24,309

25,015

Noncontrolling interests

240

246

246

Total equity

24,346

24,555

25,261

Total Liabilities and Equity

$

41,690

$

42,397

$

43,235

A-3

Corteva, Inc.

Condensed Consolidated Statement of Cash Flows

(Dollars in millions, except per share amounts)

Nine Months Ended

September 30,

2020

20191

Operating activities

Net income (loss)

$

658

$

(923)

Adjustments to reconcile net income (loss) to cash used for operating activities:

Depreciation and amortization

868

1,310

Benefit from deferred income tax

(153)

(427)

Net periodic pension benefit

(306)

(208)

Pension contributions

(53)

(109)

Net loss (gain) on sales of property, businesses, consolidated companies, and investments

29

(69)

Restructuring and asset related charges - net

298

284

Amortization of inventory step-up

-

272

Goodwill impairment charge

-

1,102

Loss on early extinguishment of debt

-

13

Other net loss

240

184

Changes in operating assets and liabilities - net

(2,818)

(3,732)

Cash used for operating activities

(1,237)

(2,303)

Investing activities

Capital expenditures

(301)

(1,015)

Proceeds from sales of property, businesses, and consolidated companies - net of cash divested

22

142

Acquisitions of businesses - net of cash acquired

-

(9)

Investments in and loans to nonconsolidated affiliates

(1)

(10)

Proceeds from sales of ownership interests in nonconsolidated affiliates

-

21

Purchases of investments

(656)

(133)

Proceeds from sales and maturities of investments

498

42

Other investing activities - net

(7)

(2)

Cash used for investing activities

(445)

(964)

Financing activities

Net change in borrowings (less than 90 days)

1,582

1,729

Proceeds from debt

2,434

1,001

Payments on debt

(879)

(6,803)

Repurchase of common stock

(83)

(25)

Proceeds from exercise of stock options

19

43

Dividends paid to stockholders

(291)

(97)

Payments for acquisition of subsidiary's interest from the non-controlling interest

(60)

-

Distributions to DowDuPont

-

(317)

Cash transferred to DowDuPont at Internal Reorganizations

-

(2,053)

Contributions from Dow and DowDuPont

-

7,396

Debt extinguishment costs

-

(79)

Other financing activities

(27)

(34)

Cash provided by financing activities

2,695

761

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(64)

(118)

Increase (decrease) in cash, cash equivalents and restricted cash

949

(2,624)

Cash, cash equivalents and restricted cash at beginning of period

2,173

5,024

Cash, cash equivalents and restricted cash at end of period

$

3,122

$

2,400

1. The cash flows for the nine months ended September 30, 2019 includes cash flows of historical DuPont's ECP and Specialty Products Business.

A-4

Corteva, Inc.

Pro Forma Consolidated Statements of Operations1

(Dollars in millions, except per share amounts)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

20192

Net sales

$

1,863

$

1,911

$

11,010

$

10,863

Cost of goods sold

1,297

1,349

6,395

6,418

Research and development expense

284

289

837

857

Selling, general and administrative expenses

597

646

2,319

2,321

Amortization of intangibles

162

100

501

314

Restructuring and asset related charges - net

49

46

298

167

Integration and separation costs

-

152

-

582

Other income - net

30

59

120

90

Loss on early extinguishment of debt

-

-

-

13

Interest expense

11

19

35

67

(Loss) income from continuing operations before income taxes

(507)

(631)

745

214

(Benefit from) provision for income taxes on continuing operations

(117)

(104)

88

146

(Loss) income from continuing operations after income taxes

(390)

(527)

657

68

Net income (loss) from continuing operations attributable to noncontrolling

2

(11)

18

10

interests

Net (loss) income from continuing operations attributable to Corteva

$

(392)

$

(516)

$

639

$

58

Basic (loss) earnings per share of common stock from continuing

operations

$

(0.52)

$

(0.69)

$

0.85

$

0.08

Diluted (loss) earnings per share of common stock from continuing

operations

$

(0.52)

$

(0.69)

$

0.85

$

0.08

Average number of shares outstanding used in earnings per share (EPS)

calculation (in millions)

Basic

749.5

749.5

749.5

749.4

Diluted

749.5

749.5

752.0

749.4

  1. See Article 11 Pro Forma Combined Statement of Operations on page A-17.
  2. Period is presented on a Pro Forma Basis, prepared in accordance with Article 11 of Regulation S-X.

A-5

Corteva, Inc.

Consolidated Segment Information

(Dollars in millions, except per share amounts)

SEGMENT NET SALES - SEED

Corn

$

Soybean

Other oilseeds

Other

Seed

$

SEGMENT NET SALES - CROP PROTECTION

Herbicides

$

Insecticides

Fungicides

Other

Crop Protection

$

GEOGRAPHIC NET SALES - SEED

North America 2

$

EMEA 3

Latin America

Asia Pacific

Rest of World 4

Net Sales

$

GEOGRAPHIC NET SALES - CROP PROTECTION

North America 2

$

EMEA 3

Latin America

Asia Pacific

Rest of World 4

Net Sales

$

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

303

$

372

$

4,224

$

4,149

116

168

1,382

1,297

62

44

529

469

42

97

381

432

523

$

681

$

6,516

$

6,347

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

20191

2020

20191

583

$

574

$

2,315

$

2,338

395

330

1,218

1,158

261

245

714

767

101

81

247

253

1,340

$

1,230

$

4,494

$

4,516

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

97

$

226

$

4,290

$

4,238

117

122

1,262

1,200

246

271

668

636

63

62

296

273

426

455

2,226

2,109

523

$

681

$

6,516

$

6,347

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

390

$

397

$

1,528

$

1,562

198

183

1,163

1,136

559

491

1,086

1,144

193

159

717

674

950

833

2,966

2,954

1,340

$

1,230

$

4,494

$

4,516

  1. Prior periods have been reclassified to conform to current period presentation.
  2. Reflects U.S. & Canada
  3. Reflects Europe, Middle East, and Africa
  4. Reflects EMEA, Latin America, and Asia Pacific

A-6

Corteva, Inc.

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

OPERATING EBITDA

As Reported

As Reported

As Reported

Pro Forma

Seed

$

(282)

$

(295)

$

1,255

$

1,066

Crop Protection

130

119

677

789

Corporate Expenses

(27)

(31)

(81)

(92)

Operating EBITDA (Non-GAAP)

$

(179)

$

(207)

$

1,851

$

1,763

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

RECONCILIATION OF INCOME (LOSS) FROM CONTINUING

OPERATIONS AFTER INCOME TAXES TO OPERATING

EBITDA

As Reported

As Reported

As Reported

Pro Forma

(Loss) income from continuing operations after income taxes

$

(390)

$

(527)

$

657

$

68

(GAAP)

(Benefit from) provision for income taxes on continuing operations

(117)

(104)

88

146

(Loss) income from continuing operations before income taxes

(GAAP)

(507)

(631)

745

214

Depreciation and amortization

285

226

868

711

Interest income

(11)

(13)

(38)

(46)

Interest expense

11

19

35

67

Exchange losses (gains) - net1

67

(22)

127

37

Non-operating benefits - net2

(73)

(32)

(237)

(106)

Significant items charge3

49

246

351

886

Operating EBITDA (Non-GAAP)

(179)

(207)

1,851

1,763

  1. Refer to page A-16 for pre-tax and after tax impacts of exchange losses - net. The three and nine months ended September 30, 2019, on an operating basis (Non-GAAP), exclude a $(33) exchange loss associated with the devaluation of the Argentine peso, as it is included within significant items.
  2. Non-operatingbenefits-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. Refer to page A-11 for pre-tax and after tax impacts of significant items.

A-7

Corteva, Inc.

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

PRICE - VOLUME - CURRENCY ANALYSIS

REGION

Q3 2020 vs. Q3 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

North America

$

(136)

(22)

%

$

(134)

(22)

%

(4)

%

(18)

%

-

%

-

%

EMEA

10

3 %

22

7 %

4 %

3 %

(4)%

- %

Latin America

43

6

%

230

30

%

5

%

25

%

(24)

%

-

%

Asia Pacific

35

16 %

44

20 %

1 %

19 %

(1)%

(3)%

Rest of World

88

7

%

296

23

%

5

%

18

%

(15)

%

(1)

%

Total

$

(48)

(3)%

$

162

9 %

2 %

7 %

(11)%

(1)%

SEED

Q3 2020 vs. Q3 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

North America

$

(129)

(57)

%

$

(125)

(55)

%

(11)

%

(44)

%

(2)

%

-

%

EMEA

(5)

(4)%

7

6 %

6 %

- %

(10)%

- %

Latin America

(25)

(9)

%

19

7

%

(2)

%

9

%

(16)

%

-

%

Asia Pacific

1

2 %

1

2 %

(1)%

3 %

- %

- %

Rest of World

(29)

(6)

%

27

6

%

-

%

6

%

(12)

%

-

%

Total

$

(158)

(23)%

$

(98)

(14)%

(3)%

(11)%

(9)%

- %

CROP PROTECTION

Q3 2020 vs. Q3 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

North America

$

(7)

(2)

%

$

(9)

(2)

%

1

%

(3)

%

-

%

-

%

EMEA

15

8 %

15

8 %

4 %

4 %

- %

- %

Latin America

68

14

%

211

43

%

9

%

34

%

(29)

%

-

%

Asia Pacific

34

21 %

43

27 %

3 %

24 %

(1)%

(5)%

Rest of World

117

14

%

269

32

%

7

%

25

%

(17)

%

(1)

%

Total

$

110

9 % $

260

21 %

5 %

16 %

(11)%

(1)%

A-8

Corteva, Inc.

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

SEED PRODUCT LINE

Q3 2020 vs. Q3 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

Corn

$

(69)

(18)

%

$

(30)

(8)

%

(2)

%

(6)

%

(10)

%

-

%

Soybeans

(52)

(31)%

(33)

(20)%

14 %

(34)%

(11)%

- %

Other oilseeds

18

41

%

20

45

%

36

%

9

%

(4)

%

-

%

Other

(55)

(57)%

(55)

(56)%

(58)%

2 %

(1)%

- %

Total

$

(158)

(23)

%

$

(98)

(14)

%

(3)

%

(11)

%

(9)

%

-

%

CROP PROTECTION PRODUCT LINE

Q3 2020 vs. Q3 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

Herbicides2

$

9

2

%

$

62

11

%

-

%

11

%

(8)

%

(1)

%

Insecticides2

65

20 %

99

30 %

4 %

26 %

(10)%

- %

Fungicides2

16

7

%

74

30

%

10

%

20

%

(23)

%

-

%

Other2

20

25 %

25

31 %

24 %

7 %

(6)%

- %

Total

$

110

9

%

$

260

21

%

5

%

16

%

(11)

%

(1)

%

A-9

Corteva, Inc.

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

PRICE - VOLUME - CURRENCY ANALYSIS

REGION

Nine Months 2020 vs. Nine Months 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

North America

$

18

-

%

$

45

1

%

-

%

1

%

(1)

%

-

%

EMEA

89

4 %

195

8 %

2 %

6 %

(4)%

- %

Latin America

(26)

(1)

%

296

17

%

6

%

11

%

(18)

%

-

%

Asia Pacific

66

7 %

119

13 %

2 %

11 %

(4)%

(2)%

Rest of World

129

3

%

610

12

%

4

%

8

%

(9)

%

-

%

Total

$

147

1 % $

655

6 %

2 %

4 %

(4)%

(1)%

SEED

Nine Months 2020 vs. Nine Months 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

North America

$

52

1

%

$

65

2

%

1

%

1

%

(1)

%

-

%

EMEA

62

5 %

126

11 %

4 %

7 %

(6)%

- %

Latin America

32

5

%

124

20

%

5

%

15

%

(15)

%

-

%

Asia Pacific

23

8 %

37

14 %

6 %

8 %

(6)%

- %

Rest of World

117

6

%

287

14

%

5

%

9

%

(8)

%

-

%

Total

$

169

3 % $

352

6 %

2 %

4 %

(3)%

- %

CROP PROTECTION

Nine Months 2020 vs. Nine Months 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

North America

$

(34)

(2)

%

$

(20)

(1)

%

(1)

%

-

%

-

%

(1)

%

EMEA

27

2 %

69

6 %

1 %

5 %

(3)%

(1)%

Latin America

(58)

(5)

%

172

15

%

7

%

8

%

(20)

%

-

%

Asia Pacific

43

6 %

82

12 %

- %

12 %

(3)%

(3)%

Rest of World

12

-

%

323

11

%

3

%

8

%

(10)

%

(1)

%

Total

$

(22)

- % $

303

7 %

2 %

5 %

(6)%

(1)%

A-10

Corteva, Inc.

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

SEED PRODUCT LINE

Nine Months 2020 vs. Nine Months 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

Corn

$

75

2

%

$

211

5

%

2

%

3

%

(3)

%

-

%

Soybeans

85

7 %

106

8 %

3 %

5 %

(1)%

- %

Other oilseeds

60

13

%

78

17

%

10

%

7

%

(4)

%

-

%

Other

(51)

(12)%

(43)

(10)%

(11)%

1 %

(2)%

- %

Total

$

169

3

%

$

352

6

%

2

%

4

%

(3)

%

-

%

CROP PROTECTION PRODUCT LINE

Nine Months 2020 vs. Nine Months 2019

Percent Change Due To:

Net Sales Change

Organic Change 1 (Non-

(GAAP)

GAAP)

Local Price &

Portfolio /

$

%

$

%

Product Mix

Volume

Currency

Other

Herbicides2

$

(23)

(1)

%

$

111

5

%

1

%

4

%

(5)

%

(1)

%

Insecticides2

60

5 %

137

12 %

4 %

8 %

(6)%

(1)%

Fungicides2

(53)

(7)

%

46

6

%

2

%

4

%

(11)

%

(2)

%

Other2

(6)

(2)%

9

4 %

5 %

(1)%

(6)%

- %

Total

$

(22)

-

%

$

303

7

%

2

%

5

%

(6)

%

(1)

%

  1. Organic sales is defined as price and volume and excludes currency and portfolio impacts.
  2. Prior periods have been reclassified to conform to current period presentation.

A-11

Corteva, Inc.

Significant Items

(Dollars in millions, except per share amounts)

SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX)

Three Months Ended

September 30,

20202019

Nine Months Ended

September 30,

20202019

As Reported

As Reported

As Reported

Pro Forma

Seed

$

(9)

$

(62)

$

(154)

$

(214)

Crop Protection

(40)

1

(151)

(24)

Corporate

-

(185)

(46)

(648)

Total significant items before income taxes

$

(49)

$

(246)

$

(351)

$

(886)

SIGNIFICANT ITEMS - PRE-TAX, AFTER TAX, AND EPS IMPACTS

Pre-tax

After tax9

($ Per Share)

2020

2019

2020

2019

2020

2019

1st Quarter

As Reported

Pro Forma

As Reported

Pro Forma

As Reported

Pro Forma

Integration costs 1

$

-

$

(100)

$

-

$

(16)

$

-

$

(0.02)

Restructuring and asset related charges, net 2

(70)

(61)

(57)

(53)

(0.08)

(0.07)

Loss on divestiture 3

(53)

(24)

(43)

(24)

(0.06)

(0.03)

Income tax items 4

-

-

(19)

-

(0.02)

-

1st Quarter - Total

$

(123)

$

(185)

$

(119)

$

(93)

$

(0.16)

$

(0.12)

2nd Quarter

As Reported

As Reported

As Reported

As Reported

As Reported

As Reported

Integration and separation costs 1

$

-

$

(330)

$

-

$

(436)

$

-

$

(0.58)

Restructuring and asset related charges, net 2

(179)

(60)

(143)

(48)

(0.19)

(0.06)

Amortization of inventory step up 5

-

(52)

-

(41)

-

(0.06)

Loss on early extinguishment of debt 6

-

(13)

-

(10)

-

(0.01)

Income tax items 4

-

-

29

-

0.04

-

2nd Quarter - Total

$

(179)

$

(455)

$

(114)

$

(535)

$

(0.15)

$

(0.71)

3rd Quarter

As Reported

As Reported

As Reported

As Reported

As Reported

As Reported

Integration and separation costs 1

$

-

$

(152)

$

-

$

(119)

$

-

$

(0.16)

Restructuring and asset related charges, net 2

(49)

(46)

(27)

(34)

(0.04)

(0.04)

Amortization of inventory step up 5

-

(15)

-

(15)

-

(0.02)

Argentina currency devaluation 7

-

(33)

-

(38)

-

(0.05)

Income tax items4

-

-

-

38

-

0.05

3rd Quarter - Total

$

(49)

$

(246)

$

(27)

$

(168)

$

(0.04)

$

(0.22)

Year-to-date Total 8

$

(351)

$

(886)

$

(260)

$

(796)

$

(0.35)

$

(1.06)

1. Integration and separation costs includes costs incurred to prepare for and close the Merger, post-Merger integration expenses, and costs incurred to prepare for the Business Separations. These costs primarily consist of financial advisory, information technology, legal, accounting, consulting and other professional advisory fees associated with the preparation and execution of these activities. For periods prior to Q2 2019, this includes only integration costs.

The after-tax charge for the third quarter of 2019 includes a net tax benefit of $13 related to application of the U.S. Tax Reform's foreign tax provisions.

The after-tax charge for the second quarter of 2019 includes a net tax charge of $(114) related to U.S. state blended tax rate changes associated with the Internal Reorganizations and a net tax charge of $(96) related to application of the U.S. Tax Reform's foreign tax provisions.

A-12

Corteva, Inc.

Significant Items

(Dollars in millions, except per share amounts)

The after-tax charge for the first quarter of 2019 includes a net tax charge of $(32) related to U.S. state blended tax rate changes associated with the Internal Reorganizations and a tax benefit of $102 related to an internal legal entity restructuring associated with the Internal Reorganizations.

  1. Third quarter, second quarter and first quarter 2020 included restructuring and asset related charges of $(49), $(179) and $(70), respectively. The charge for the third quarter included a $(30) 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 $(9) charge associated with the DowDuPont Synergy Program. The charge for the second quarter included a $(41) charge related to the Execute to Win Productivity Program and a $(138) charge related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits. The charge for the first quarter 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.
    The after-tax charge for the third quarter of 2020 includes a net tax benefit of $11 related to a change in estimate on the full year impact of The Act's foreign provisions.
    Third quarter, second quarter, and first quarter 2019 included restructuring and asset related charges of $(46), $(60) and $(61), respectively. The charge for the third quarter included a $(54) non-cash asset impairment related to certain intangible assets that primarily relate to heritage Dow AgroSciences intangibles previously acquired from Cooperativa Central de Pesquisa Agrícola's ("Coodetec"), classified as developed technology, other intangible assets and in-process research and development ("IPR&D"), partially offset by a benefit of $8 million associated with the DowDuPont Cost Synergy Program. The charge for the first and second quarter is primarily related to the DowDuPont Cost Synergy Program.
  2. First quarter 2020 includes a loss of $(53) included in other income - net related to the expected sale of the La Porte site, for which the company signed an agreement during the first quarter 2020.
    First quarter 2019 includes a loss of $(24) included in other income - net related to DAS's sale of a joint venture related to synergy actions.
  3. Second quarter 2020 reflects a benefit of $29 due to an elective change in accounting method that alters the 2019 impact of the business separation on the 2017 Tax Cuts and Jobs Act's foreign tax provisions. 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.
    Third quarter 2019 includes an after tax benefit related to the Swiss Tax Reform.
  4. Third quarter and second quarter 2019 includes amortization of inventory step up of $(15) and $(52), respectively, included in cost of goods sold related to the amortization of the inventory step-up in connection with the Merger.
  5. Second quarter 2019 includes a loss on the early extinguishment of debt of $(13) 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 unamortized step-up related to the fair value step-up of EID's debt.
  6. Third quarter 2019 includes a $(33) loss included in other income - net associated with remeasuring the company's Argentine Peso net monetary assets, resulting from an unexpected August primary election result in Argentina. Throughout the three months ended September 30, 2019, the Argentine Peso dropped approximately a third of its value against the U.S. dollar and in September of 2019, the country's central bank announced new restrictions on foreign currency transactions. The after tax charge of $(38) includes a tax valuation allowance recorded against the net deferred tax asset position of an Argentine legal entity.
  7. Earnings per share for the year may not equal the sum of quarterly earnings per share due to the changes in average share calculations.
  8. 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-13

Corteva, Inc.

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

Operating (Loss) Earnings Per Share (Non-GAAP)

Operating (loss) 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), and significant items.

Three Months Ended

September 30,

2020

2019

2020

2019

$

$

EPS (diluted)

EPS (diluted)

Net loss from continuing operations attributable to Corteva

(GAAP)

$

(392)

$

(516)

$

(0.52)

$

(0.69)

Less: Non-operating benefits - net, after tax 1

56

23

0.08

0.03

Less: Amortization of intangibles (existing as of

Separation), after tax

(126)

(80)

(0.17)

(0.11)

Less: Significant items charge, after tax

(27)

(168)

(0.04)

(0.22)

Operating Loss (Non-GAAP)

$

(295)

$

(291)

$

(0.39)

$

(0.39)

Net income from continuing operations attributable to Corteva (GAAP)

Less: Non-operating benefits - net, after tax 1

Less: Amortization of intangibles (existing as of Separation), after tax

Less: Significant items charge, after tax

Operating Earnings (Non-GAAP)

Nine Months Ended

September 30,

2020

20192

2020

20192

$

$

EPS (diluted)

EPS (diluted)

639

$

58

$

0.85

$

0.08

$

180

84

0.24

0.11

(377)

(250)

(0.50)

(0.33)

(260)

(796)

(0.35)

(1.06)

$

1,096

$

1,020

$

1.46

$

1.36

  1. Non-operatingbenefits-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. Period is presented on a Pro Forma Basis, prepared in accordance with Article 11 of Regulation S-X.

A-14

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

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

As Reported

As Reported

As Reported

Pro Forma

Operating EBITDA (Non-GAAP)1

$

(179)

$

(207)

1,851

1,763

Depreciation

(123)

(126)

(367)

(397)

Interest Income

11

13

38

46

Interest Expense

(11)

(19)

(35)

(67)

Benefit from (provision for) income taxes on continuing

operations before significant items, non-operating

benefits - net, amortization of intangibles (existing as of

Separation), and exchange gains/(losses), net (Non-

GAAP)1

58

40

(249)

(265)

Base income tax rate from continuing operations (Non-

19.2 %

11.8 %

16.7 %

19.7 %

GAAP)1

Exchange (losses) gains - net, after tax2

(49)

(3)

(124)

(50)

Net (income) loss attributable to non-controlling

interests

(2)

11

(18)

(10)

Operating (Loss) Earnings (Non-GAAP)1

$

(295)

$

(291)

$

1,096

$

1,020

Diluted Shares (in millions)

749.5

749.5

752.0

749.4

Operating (Loss) Earnings Per Share (Non-GAAP)1

$

(0.39)

$

(0.39)

$

1.46

$

1.36

  1. Refer to pages A-6,A-7,A-8,A-9, and A-10 for Non-GAAP reconciliations.
  2. Refer to page A-16 for pre-tax and after tax impacts of exchange gains (losses) - net.

A-15

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), and non-operating benefits - net.

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

As Reported

As Reported

As Reported

Pro Forma

(Loss) income from continuing operations before income taxes (GAAP)

$

(507)

$

(631)

$

745

$

214

Add: Significant items - charge 1

49

246

351

886

Non-operating benefits - net

(73)

(32)

(237)

(106)

Amortization of intangibles (existing as of Separation)

162

100

501

314

Less: Exchange (losses) gains, net2, 3

(67)

22

(127)

(37)

(Loss) income from continuing operations before income taxes, significant

items, non-operating benefits - net, amortization of intangibles (existing as of

Separation), and exchange (losses) gains, net (Non-GAAP)

$

(302)

$

(339)

$

1,487

$

1,345

(Benefit from) provision for income taxes on continuing operations (GAAP)

$

(117)

$

(104)

88

$

146

Add: Tax benefits on significant items charge1

22

78

91

90

Tax expenses on non-operating benefits - net

(17)

(9)

(57)

(22)

Tax benefits on amortization of intangibles (existing as of Separation)

36

20

124

64

Tax benefits (expenses) on exchange (losses) gains, net2

18

(25)

3

(13)

(Benefit from) provision for income taxes on continuing operations before

significant items, non-operating benefits - net, amortization of intangibles

(existing as of Separation), and exchange (losses) gains, net (Non-GAAP)

$

(58)

$

(40)

$

249

$

265

Effective income tax rate (GAAP)

23.1

%

16.5

%

11.8

%

68.2

%

Significant items, non-operating benefits, and amortization of intangibles

(existing as of Separation) effect

(2.5)

%

(11.8)

%

6.3

%

(46.9)

%

Tax rate from continuing operations before significant items, non-operating benefits - net, and amortization of intangibles (existing as of Separation)

Exchange (losses) gains, net effect2

Base income tax rate from continuing operations (Non-GAAP)

  1. See Significant Items table for further detail.
  2. See page A-16 for further details of exchange gains (losses).

20.6

%

4.7

%

18.1

%

21.3

%

(1.4)%

7.1 %

(1.4)%

(1.6)%

19.2

%

11.8

%

16.7

%

19.7

%

3. Pre-tax exchange gains (losses), net for the three and nine months ended September 30, 2019, on an operating basis (Non-GAAP), excludes a $(33) exchange loss associated with the devaluation of the Argentine peso, as it is included within significant items.

A-16

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

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Subsidiary Monetary Position Loss

Pre-tax exchange losses

$

(61)

$

(33)

$

(300)

$

(26)

Local tax benefits (expenses)

16

(12)

44

(15)

Net after tax impact from subsidiary exchange losses

$

(45)

$

(45)

$

(256)

$

(41)

Hedging Program (Loss) Gain

Pre-tax exchange (losses) gains

$

(6)

$

55

$

173

$

(11)

Tax benefits (expenses)

2

(13)

(41)

2

Net after tax impact from hedging program exchange (losses) gains

$

(4)

$

42

$

132

$

(9)

Total Exchange (Loss) Gain

Pre-tax exchange (losses) gains1

$

(67)

$

22

$

(127)

$

(37)

Tax benefits (expenses)

18

(25)

3

(13)

Net after tax exchange losses

$

(49)

$

(3)

$

(124)

$

(50)

As shown above, the "Total Exchange (Loss) Gain" is the sum of the "Subsidiary Monetary Position Loss" and the "Hedging Program (Loss) Gain."

1. Pre-tax exchange (losses) gains, net for the three and nine months ended September 30, 2019, on an operating earnings basis (Non- GAAP), excludes a $(33) exchange loss associated with the devaluation of the Argentine peso.

A-17

Corteva, Inc.

Article 11 Pro Forma Combined Statement of Operations

(Dollars in millions, except per share amounts)

Nine Months Ended

September 30, 2019

Adjustments

As Reported

Debt

Separations

Pro Forma

Corteva

Merger1

Retirement2

Related3

Corteva

Net sales

$

10,863

$

-

$

-

$

-

$

10,863

Cost of goods sold

6,607

(205)

-

16

6,418

Research and development expense

857

-

-

-

857

Selling, general and administrative expenses

2,318

-

-

3

2,321

Amortization of intangibles

314

-

-

-

314

Restructuring and asset related charges - net

167

-

-

-

167

Integration and separation costs

694

-

-

(112)

582

Other income - net

90

-

-

-

90

Loss on early extinguishment of debt

13

-

-

13

Interest expense

112

-

(45)

-

67

(Loss) income from continuing operations before

income taxes

(129)

205

45

93

214

Provision for income taxes on continuing operations

99

36

10

1

146

(Loss) income from continuing operations after

income taxes

(228)

169

35

92

68

Net income from continuing operations attributable to

noncontrolling interests

10

-

-

-

10

Net (loss) income from continuing operations

attributable to Corteva

$

(238)

$

169

$

35

$

92

$

58

Basic (loss) earnings per share of common stock

from continuing operations

$

(0.32)

$

0.08

Diluted (loss) (loss) earnings per share of common

stock from continuing operations

$

(0.32)

$

0.08

Average number of shares outstanding used in

earnings per share (EPS) calculation (in millions):

Basic

749.4

749.4

Diluted

749.4

749.4

  1. Related to the amortization of EID's agriculture business' inventory step-up recognized in connection with the Merger, as the incremental amortization is directly attributable to the Merger and will not have a continuing impact.
  2. Represents removal of interest expense related to the debt redemptions/repayments.
  3. Adjustments directly attributable to the separations and distributions of Corteva, Inc. include the following: removal of Telone® Soil Fumigant business ("Telone®") results (as Telone® did not transfer to Corteva as part of the common control combination of DAS); impact from the distribution agreement entered into between Corteva and Dow that allows for Corteva to become the exclusive distributor of Telone® products for Dow; elimination of one-time transaction costs directly attributable to the Corteva Distribution; the impact of certain manufacturing, leasing and supply agreements entered into in connection with the Corteva Distribution; and the related tax impacts of these items.

Disclaimer

Corteva Inc. published this content on 05 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 November 2020 10:16:01 UTC


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Financials (USD)
Sales 2020 13 984 M - -
Net income 2020 583 M - -
Net cash 2020 1 710 M - -
P/E ratio 2020 47,2x
Yield 2020 1,26%
Capitalization 31 030 M 31 030 M -
EV / Sales 2020 2,10x
EV / Sales 2021 1,99x
Nbr of Employees 21 000
Free-Float 99,9%
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Technical analysis trends CORTEVA, INC.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 41,33 $
Last Close Price 41,65 $
Spread / Highest target 32,1%
Spread / Average Target -0,76%
Spread / Lowest Target -42,4%
EPS Revisions
Managers and Directors
NameTitle
James C. Collins Chief Executive Officer & Director
Gregory R. Page Non-Executive Chairman
Gregory R. Friedman Chief Financial Officer & Executive Vice President
Debra King Chief Information Officer & Senior Vice President
Sam Eathington Chief Technology Officer & Senior Vice President
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