Corteva Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-38710

Corteva, Inc.

(Exact Name of Registrant as Specified in Its Charter)



Delaware					82-4979096
(State or other Jurisdiction of Incorporation or Organization)				(I.R.S. Employer Identification No.)
974 Centre Road,	Wilmington,	Delaware	19805	(302)	485-3000
(Address of Principal Executive Offices) (Zip Code)				(Registrant’s Telephone Number, including area code)

Commission File Number 1-815

E. I. du Pont de Nemours and Company

(Exact Name of Registrant as Specified in Its Charter)



Delaware					51-0014090
(State or other Jurisdiction of Incorporation or Organization)				(I.R.S. Employer Identification No.)
974 Centre Road,	Wilmington,	Delaware	19805	(302)	485-3000
(Address of Principal Executive Offices) (Zip Code)				(Registrant’s Telephone Number, including area code)

Securities registered pursuant to Section 12(b) of the Act for Corteva, Inc.:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CTVA	New York Stock Exchange

Securities registered pursuant to Section 12(b) of the Act for E. I. du Pont de Nemours and Company:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
$3.50 Series Preferred Stock	CTAPrA	New York Stock Exchange
$4.50 Series Preferred Stock	CTAPrB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Corteva, Inc. Yes x No o

E. I. du Pont de Nemours and Company Yes x No o

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)

Corteva, Inc. Yes x No o

E. I. du Pont de Nemours and Company Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Corteva, Inc.	Large Accelerated Filer	x	Accelerated Filer o	Non-Accelerated Filer	o	Smaller reporting company o	Emerging growth company o

E. I. du Pont de Nemours and Company	Large Accelerated Filer	o	Accelerated Filer o	Non-Accelerated Filer	x	Smaller reporting company o	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Corteva, Inc. ☐

E. I. du Pont de Nemours and Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Corteva, Inc. Yes ☐ No x

E. I. du Pont de Nemours and Company Yes ☐ No x

Corteva, Inc. had 748,370,000 shares of common stock, par value $0.01 per share, outstanding at April 30, 2020.

E. I. du Pont de Nemours and Company had 200 shares of common stock, par value $0.30 per share, outstanding at April 30, 2020, all of which are held by Corteva, Inc.

E. I. du Pont de Nemours and Company meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q (as modified by a grant of no-action relief dated February 12, 2018) and is therefore filing this form with reduced disclosure format.

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CORTEVA, INC.

E. I. DU PONT DE NEMOURS AND COMPANY

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		Page
Explanatory Note
Part I	Financial Information

Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Statements of Operations	3
	Consolidated Statements of Comprehensive (Loss) Income	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Cash Flows	6
	Consolidated Statements of Equity	7
	Notes to the Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
	Cautionary Statements About Forward-Looking Statements	41
	Recent Developments	42
	Overview	43
	Selected Financial Data	44
	Results of Operations	45
	Supplemental Unaudited Pro Forma Financial Information	48
	Recent Accounting Pronouncements	49
	Segment Reviews	50
	Non-GAAP Financial Measures	51
	Liquidity & Capital Resources	54
	Contractual Obligations	56

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 4.	Controls and Procedures	57

Part II	Other Information

Item 1.	Legal Proceedings	58
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 5.	Other Information	61
Item 6.	Exhibits	62
Exhibit Index		62
Signature		63
Consolidated Financial Statements of E.I. du Pont de Nemours and Company (Unaudited)		64

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Explanatory Note

On June 1, 2019, Corteva, Inc. became an independent, publicly traded company through the previously announced separation (the “Separation”) of the agriculture business of DowDuPont. The separation was effectuated through a pro rata distribution (the “Corteva Distribution”) of all of the then-issued and outstanding shares of common stock, par value $0.01 per share, of Corteva, Inc., which was then a wholly-owned subsidiary of DowDuPont, to holders of record of DowDuPont common stock as of the close of business on May 24, 2019.

Corteva owns 100% of the outstanding common stock of EID, and EID owns, directly or indirectly, 100% of DAS. EID is a subsidiary of Corteva, Inc. and continues to be a reporting company, subject to the requirements of the Securities Exchange Act of 1934, as amended.

Unless otherwise indicated or the context otherwise requires, references in this Quarterly Report on Form 10-Q to:

• "Corteva" or "the company" refers to Corteva, Inc. and its consolidated subsidiaries (including EID);

• "EID" refers to E. I. du Pont de Nemours and Company and its consolidated subsidiaries or E. I. du Pont de Nemours and Company excluding its consolidated subsidiaries, as the context may indicate;

• "DowDuPont" refers to DowDuPont Inc., and its subsidiaries prior to the Separation of Corteva defined below;

• "Historical Dow" refers to the Dow Chemical Company and its consolidated subsidiaries prior to the Internal Reorganization defined below;

• "Historical DuPont" refers to EID prior to the Internal Reorganization, defined below;

• "Internal Reorganizations" refers to the series of internal reorganization and realignment steps undertaken by EID and Historical Dow to realign its business into three groups: agriculture, materials science and specialty products. These steps include:


1.	the April 1, 2019 transfer of the assets and liabilities aligned with EID’s material science businesses including EID’s ethylene and ethylene copolymers business, excluding its ethylene acrylic elastomers business, (“EID ECP”) to DowDuPont, which were ultimately conveyed by DowDuPont to Dow;


2.	the May 1, 2019 distribution of EID legal entities containing the assets and liabilities of EID’s specialty products business (the “EID Specialty Products Entities”) to DowDuPont;


3.	the May 2, 2019 conveyance of Dow Ag Entities to EID; and


4.	the May 31, 2019 contribution of EID to Corteva, Inc. Refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2019 for further information.

• "Dow Distribution" refers to the separation of DowDuPont's materials science business into a separate and independent public company, effective as of 5:00 pm ET on April 1, 2019, by way of a distribution of Dow Inc. through a pro rata dividend in-kind of all of the then-issued and outstanding shares of Dow’s common stock, par value $0.01 per share, to holders of DowDuPont's common stock, as of the close of business on March 21, 2019;

• "Distributions" refers to the Dow Distribution and the Corteva Distribution;

• "Merger” refers to the all-stock merger of equals strategic combination between Historical Dow and EID;

• "Merger Effectiveness Time” refers to August 31, 2017 at 11:59 pm ET;

• "Dow" refers to Dow Inc. after the Dow Distribution;

• "DuPont" refers to DuPont de Nemours, Inc. after the Separation of Corteva; and

• "DAS" refers to the agriculture business of Historical Dow, Dow AgroSciences.

On June 1, 2019, DowDuPont Inc. changed its registered name to DuPont de Nemours, Inc. Beginning on June 3, 2019, Corteva's common stock is traded on the New York Stock Exchange under the ticker symbol "CTVA".

This Quarterly Report on Form 10-Q is a combined report being filed separately by Corteva, Inc. and EID. The information in this Quarterly Report on Form 10-Q is equally applicable to Corteva, Inc. and EID, except where otherwise indicated.

The separate EID financial statements and footnotes for areas that differ from Corteva, are included within this Quarterly Report on Form 10-Q and begin on page 64. Footnotes of EID that are identical to that of Corteva are cross-referenced accordingly.

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PART I. FINANCIAL INFORMATION

Item 1.
CONSOLIDATED FINANCIAL STATEMENTS

Corteva, Inc.

Consolidated Statements of Operations (Unaudited)



(In millions, except per share amounts)	Three Months Ended March 31,
	2020		2019
Net sales	$	3,956	$	3,396
Cost of goods sold	2,269		2,211
Research and development expense	280		299
Selling, general and administrative expenses	757		735
Amortization of intangibles	163		101
Restructuring and asset related charges - net	70		61
Integration and separation costs	—		212
Other income - net	1		31
Interest expense	10		59
Income (loss) from continuing operations before income taxes	408		(251		)
Provision for (benefit from) income taxes on continuing operations	127		(67		)
Income (loss) from continuing operations after income taxes	281		(184		)
Income from discontinued operations after income taxes	1		360
Net income	282		176
Net income attributable to noncontrolling interests	10		12
Net income attributable to Corteva	$	272	$	164
Basic earnings per share of common stock:
Basic earnings (loss) per share of common stock from continuing operations	$	0.36	$	(0.26	)
Basic earnings per share of common stock from discontinued operations	—		0.48
Basic earnings per share of common stock	$	0.36	$	0.22
Diluted earnings per share of common stock:
Diluted earnings (loss) per share of common stock from continuing operations	$	0.36	$	(0.26	)
Diluted earnings per share of common stock from discontinued operations	—		0.48
Diluted earnings per share of common stock	$	0.36	$	0.22

See Notes to the Consolidated Financial Statements beginning on page 8.

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Corteva, Inc.

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)



(In millions)	Three Months Ended March 31,
	2020			2019
Net income	$	282		$	176
Other comprehensive loss - net of tax:
Cumulative translation adjustments	(672		)	(72		)
Adjustments to pension benefit plans	—			(3		)
Adjustments to other benefit plans	3			—
Derivative instruments	6			1
Total other comprehensive loss	(663		)	(74		)
Comprehensive (loss) income	(381		)	102
Comprehensive income attributable to noncontrolling interests - net of tax	10			12
Comprehensive (loss) income attributable to Corteva	$	(391	)	$	90

See Notes to the Consolidated Financial Statements beginning on page 8.

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Corteva, Inc.

Condensed Consolidated Balance Sheets (Unaudited)



(In millions, except share amounts)	March 31, 2020			December 31, 2019			March 31, 2019
Assets
Current assets
Cash and cash equivalents	$	1,963		$	1,764		$	1,759
Marketable securities	10			5			5
Accounts and notes receivable - net	6,775			5,528			6,507
Inventories	4,401			5,032			5,019
Other current assets	1,530			1,190			1,318
Assets of discontinued operations - current	—			—			9,453
Total current assets	14,679			13,519			24,061
Investment in nonconsolidated affiliates	64			66			77
Property, plant and equipment - net of accumulated depreciation (March 31, 2020 - $3,406; December 31, 2019 - $3,326; March 31, 2019 - $2,970)	4,358			4,546			4,521
Goodwill	10,027			10,229			10,203
Other intangible assets	11,241			11,424			11,961
Deferred income taxes	273			287			294
Other assets	2,336			2,326			2,368
Assets of discontinued operations - non-current	—			—			56,617
Total Assets	$	42,978		$	42,397		$	110,102
Liabilities and Equity
Current liabilities
Short-term borrowings and finance lease obligations	$	1,996		$	7		$	3,201
Accounts payable	3,021			3,702			3,120
Income taxes payable	143			95			195
Accrued and other current liabilities	4,039			4,434			4,061
Liabilities of discontinued operations - current	—			—			3,501
Total current liabilities	9,199			8,238			14,078
Long-Term Debt	614			115			6,297
Other Noncurrent Liabilities
Deferred income tax liabilities	911			920			1,523
Pension and other post employment benefits - noncurrent	6,186			6,377			5,554
Other noncurrent obligations	1,989			2,192			2,064
Liabilities of discontinued operations - non-current	—			—			5,512
Total noncurrent liabilities	9,700			9,604			20,950
Commitments and contingent liabilities
Stockholders’ equity
Common stock, $0.01 par value; 1,666,667,000 shares authorized; issued at March 31, 2020 - 748,369,000; and December 31, 2019 - 748,577,000	7			7
Additional paid-in capital	27,906			27,997
Divisional equity							78,005
Accumulated deficit	(155		)	(425		)
Accumulated other comprehensive loss	(3,933		)	(3,270		)	(3,434		)
Total Corteva stockholders’ equity	23,825			24,309			74,571
Noncontrolling interests	254			246			503
Total equity	24,079			24,555			75,074
Total Liabilities and Equity	$	42,978		$	42,397		$	110,102

See Notes to the Consolidated Financial Statements beginning on page 8.

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Corteva, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)



(In millions)	Three Months Ended March 31,
	2020			2019
Operating activities
Net income	$	282		$	176
Adjustments to reconcile net income to cash used for operating activities:
Depreciation and amortization	283			726
Provision for (benefit from) deferred income tax	26			(220		)
Net periodic pension benefit	(102		)	(75		)
Pension contributions	(28		)	(50		)
Net loss (gain) on sales of property, businesses, consolidated companies and investments	46			(65		)
Restructuring and asset related charges - net	70			106
Amortization of inventory step-up	—			205
Other net loss	138			92
Changes in operating assets and liabilities - net	(2,645		)	(2,436		)
Cash used for operating activities	(1,930		)	(1,541		)
Investing activities
Capital expenditures	(128		)	(663		)
Proceeds from sales of property, businesses and consolidated companies - net of cash divested	11			125
Proceeds from sales of ownership interests in nonconsolidated affiliates	—			21
Purchases of investments	(67		)	(16		)
Proceeds from sales and maturities of investments	58			36
Other investing activities - net	(4		)	(5		)
Cash used for investing activities	(130		)	(502		)
Financing activities
Net change in borrowings (less than 90 days)	1,619			814
Proceeds from debt	875			1,000
Payments on debt	(1		)	(284		)
Repurchase of common stock	(50		)	—
Proceeds from exercise of stock options	14			35
Dividends paid to stockholders	(97		)	—
Distributions to DowDuPont	—			(317		)
Contributions from Dow	—			88
Other financing activities	(16		)	(24		)
Cash provided by financing activities	2,344			1,312
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(117		)	20
Increase (decrease) in cash, cash equivalents and restricted cash	167			(711		)
Cash, cash equivalents and restricted cash at beginning of period	2,173			5,024
Cash, cash equivalents and restricted cash at end of period¹	$	2,340		$	4,313

^1. See page 19 for reconciliation of cash and cash equivalents and restricted cash presented in interim Condensed Consolidated Balance Sheets to total cash, cash equivalents and restricted cash presented in the interim Condensed Consolidated Statements of Cash Flows.

See Notes to the Consolidated Financial Statements beginning on page 8.

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Corteva, Inc.

Consolidated Statements of Equity (Unaudited)



(In millions)	Common Stock		Additional Paid-in Capital		Divisional Equity			Retained Earnings (Accumulated deficit)		Accumulated Other Comp Loss			Treasury Stock		Non-controlling Interests			Total Equity
2019
Balance at January 1, 2019	$	—	$	—	$	78,020		$	—	$	(3,360	)	$	—	$	493		$	75,153
Net income					164										12			176
Other comprehensive loss										(74		)						(74		)
Distributions to DowDuPont					(317		)											(317		)
Issuance of DowDuPont stock					35													35
Share-based compensation					18													18
Contributions from Dow					88													88
Other - net					(3		)								(2		)	(5		)
Balance at March 31, 2019	$	—	$	—	$	78,005		$	—	$	(3,434	)	$	—	$	503		$	75,074



(In millions)	Common Stock		Additional Paid-in Capital			Divisional Equity	(Accumulated deficit) Retained Earnings			Accumulated Other Comp Loss			Treasury Stock		Non-controlling Interests			Total Equity
2020
Balance at January 1, 2020	$	7	$	27,997			$	(425	)	$	(3,270	)	$	—	$	246		$	24,555
Net income							272								10			282
Other comprehensive loss										(663		)						(663		)
Common dividends ($0.13 per share)			(97		)													(97		)
Issuance of Corteva stock			14															14
Share-based compensation			2															2
Common Stock Repurchase			(50		)													(50		)
Other - net			40				(2		)						(2		)	36
Balance at March 31, 2020	$	7	$	27,906			$	(155	)	$	(3,933	)	$	—	$	254		$	24,079

See Notes to the Consolidated Financial Statements beginning on page 8.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



	Corteva, Inc.
	Notes to the Consolidated Financial Statements (Unaudited)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. Results for interim periods should not be considered indicative of results for a full year. These interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in the company’s Annual Report on Form 10-K for the year ended December 31, 2019, collectively referred to as the “2019 Annual Report.” The interim Consolidated Financial Statements include the accounts of the company and all of its subsidiaries in which a controlling interest is maintained.

Basis of Presentation

Certain reclassifications of prior year's data have been made to conform to current year's presentation. On April 1, 2019, EID completed the transference of the assets and liabilities aligned with EID’s materials science business, including EID’s ethylene and ethylene copolymers business, excluding its ethylene acrylic elastomers business, (“EID ECP”) to separate legal entities (the “Materials Science Entities”) that were ultimately conveyed by DowDuPont to Dow. On May 1, 2019, EID completed the transfer of the assets and liabilities aligned with the EID’s specialty products business to separate legal entities (“EID Specialty Products Entities”), which were then distributed to DowDuPont.

In accordance with GAAP, the financial position and results of operations of EID ECP and the EID Specialty Products Entities are presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. The sum of the individual earnings per share amounts from continuing operations and discontinued operations may not equal the total company earnings per share amounts due to rounding. The cash flows, comprehensive (loss) income, and equity related to EID ECP and the EID Specialty Products Entities have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows, Consolidated Statements of Comprehensive Income (Loss), and Consolidated Statements of Equity, respectively, for all periods presented. Amounts related to EID ECP and the EID Specialty Products Entities are consistently included or excluded from the Notes to the interim Consolidated Financial Statements based on the respective financial statement line item. See Note 3 - Divestitures and Other Transactions, for additional information.

Prior to the Corteva Distribution, these combined financial statements were derived from the consolidated financial statements and accounting records of EID as well as the carve-out financial statements of DAS. The DAS carve-out financial statements reflect the historical results of operations, financial position, and cash flows of Historical Dow's Agricultural Sciences Business and include allocations of certain expenses for services from Historical Dow, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, ethics and compliance, shared services, employee benefits and incentives, insurance, and stock-based compensation. These expenses were allocated on the basis of direct usage when identifiable, with the remainder allocated under the basis of headcount or other measures. Beginning in the second quarter 2019, the financial statements are presented on a consolidated basis.

The company's Condensed Consolidated Balance Sheets at March 31, 2020 and December 31, 2019 consist of Corteva, Inc. and its consolidated subsidiaries. The company's Condensed Consolidated Balance Sheet at March 31, 2019 consists of the combined balances of Historical EID and DAS. The Balance Sheets will be referred to as the "Condensed Consolidated Balance Sheets" throughout this document.

The company's Consolidated Statements of Operations (the "Consolidated Statements of Operations") for all periods prior to April 30, 2019 consist of the combined results of operations for Historical EID and DAS. The Consolidated Statements of Operations for all periods after May 1, 2019 represent the consolidated balances of the company. Intercompany balances and transactions with Historical EID and DAS have been eliminated.

During the first quarter 2020, the company recorded an increase of $40 million to Additional Paid-in Capital relating to net assets recorded as transferred as part of the 2019 Internal Reorganizations that were retained.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2 - RECENT ACCOUNTING GUIDANCE

Recently Adopted Accounting Guidance

In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326): Credit Losses - Measurement of Credit Losses on Financial Statements, which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The amortized cost basis of financial assets should be reduced by expected credit losses to present the net carrying value in the financial statements at the amount expected to be collected. The measurement of expected credit losses is based on past events, historical experience, current conditions and forecasts that affect the collectability of the financial assets. Additionally, credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses.

The company adopted the guidance in the first quarter of 2020. The primary impact of adoption related to the credit losses on accounts and notes receivable, which is applied using a cumulative-effect adjustment in the period of adoption, and prior periods are not restated. The adoption of ASU 2016-13 did not have a material impact on the company’s financial position, results of operations or cash flows. See Note 10 - Accounts and Notes Receivable - Net, to the Consolidated Financial Statements for additional information.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, which provides guidance on whether certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. Accordingly, this amendment added unit of account guidance in Topic 606 when an entity is assessing whether the collaborative arrangement, or a part of the arrangement, is within the scope of Topic 606. In addition, the amendment provides certain guidance on presenting the collaborative arrangement transaction together with Topic 606. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and early adoption is permitted. This ASU is to be applied retrospectively to the date of initial application of Topic 606. The company adopted this guidance on January 1, 2020 and it did not have a material impact on the company’s financial position, results of operations or cash flows.

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848), which provides companies with optional financial reporting alternatives to reduce the cost and complexity associated with the accounting for contracts and hedging relationships affected by reference rate reform. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. The adoption of ASU 2020-04 did not have a material impact on the company's financial position, results of operations or cash flows, and will apply to future changes.

Accounting Guidance Issued But Not Adopted as of March 31, 2020

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which was part of the FASB’s Simplification Initiative to identify, evaluate, and improve areas of U.S. GAAP for which cost and complexity can be reduced, while maintaining or improving the usefulness of the information provided to users of financial statements. This ASU amends ASC 740, Income Taxes, by removing certain exceptions to the general principles, and clarifying and amending current guidance. The new standard is effective for fiscal years, and periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, however all amended guidance must be adopted in the same period and should be reflected as of the beginning of the annual period if initially adopted and applied during an interim period. The company is currently evaluating the impact of adopting this guidance.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 - DIVESTITURES AND OTHER TRANSACTIONS

Separation Agreements

In connection with the Distributions, DuPont, Corteva, and Dow (together, the “Parties” and each a “Party”) have entered into certain agreements to effect the Separation, provide for the allocation of DowDuPont’s assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) among the Parties, and provide a framework for Corteva's relationship with Dow and DuPont following the separations and Distributions (collectively, the "Separation Agreements"). For further details on the Separation Agreements, refer to the 2019 Annual Report.

DuPont

Pursuant to the Separation Agreements, DuPont and Corteva indemnifies the other against certain litigation, environmental, tax, workers' compensation and other liabilities that arose prior to the Corteva Distribution. The term of this indemnification is generally indefinite and includes defense costs and expenses, as well as monetary and non-monetary settlements and judgments. In connection with the recognition of liabilities related to these matters, the company records an indemnification asset when recovery is deemed probable. At March 31, 2020, the indemnification assets are $25 million within accounts and notes receivable - net and $54 million within other assets in the interim Condensed Consolidated Balance Sheet. At March 31, 2020, the indemnification liabilities are $8 million within accrued and other current liabilities and $69 million within other noncurrent obligations in the interim Condensed Consolidated Balance Sheet.

Dow

Pursuant to the Separation Agreements, Dow and Corteva indemnifies the other against certain litigation, environmental, tax and other liabilities that arose prior to the Corteva Distribution. The term of this indemnification is generally indefinite and includes defense costs and expenses, as well as monetary and non-monetary settlements and judgments. In connection with the recognition of liabilities related to these matters, the company records an indemnification asset when recovery is deemed probable. At March 31, 2020, the indemnification assets are $30 million within accounts and notes receivable - net in the interim Condensed Consolidated Balance Sheet. At March 31, 2020, the indemnification liabilities are $158 million within accrued and other current liabilities and $13 million within other noncurrent obligations in the interim Condensed Consolidated Balance Sheet.

EID ECP Divestiture

As discussed in Note 1 - Summary of Significant Accounting Policies, on April 1, 2019, EID completed the transfer of the entities and related assets and liabilities of EID ECP to Dow.

As a result, the financial results of EID ECP are reflected as discontinued operations, as summarized below:



(In millions)	Three Months Ended March 31, 2019
Net sales	$	362
Cost of goods sold	259
Research and development expense	4
Selling, general and administrative expenses	9
Amortization of intangibles	23
Restructuring and asset related charges - net	2
Integration and separation costs	44
Other income - net	2
Income from discontinued operations before income taxes	23
Provision for income taxes on discontinued operations	4
Income from discontinued operations after income taxes	$	19

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents the depreciation, amortization of intangibles, and capital expenditures of the discontinued operations related to EID ECP:



(In millions)	Three Months Ended March 31, 2019
Depreciation	$	28
Amortization of intangibles	$	23
Capital expenditures	$	16

The carrying amount of major classes of assets and liabilities classified as assets and liabilities of discontinued operations at March 31, 2019 related to EID ECP consist of the following:



(In millions)	March 31, 2019
Cash and cash equivalents	$	32
Accounts and notes receivable - net	221
Inventories	448
Other current assets	25
Total current assets of discontinued operations	726
Investment in nonconsolidated affiliates	109
Property, plant and equipment - net	753
Goodwill	3,585
Other intangible assets	1,118
Deferred income taxes	15
Other assets	5
Non-current assets of discontinued operations	5,585
Total assets of discontinued operations

Price	-0.00	EPS	-1
Shares	750	P/E	0
MCap	-0	P/FCF	0
Net Debt	-2,284	EBIT	-873
TEV	-2,284	TEV/EBIT	3
TTM 2019-09-30, in MM, except price, ratios

8-K	2020-08-05	Earnings, Exhibits
8-K	2020-05-13
8-K	2020-05-06
8-K	2020-04-28
8-K	2020-02-21
8-K	2020-02-21
8-K	2020-02-17
8-K	2020-01-30
8-K	2019-10-31
8-K	2019-10-10
8-K	2019-08-15
8-K	2019-08-01
8-K	2019-08-01
8-K	2019-06-25
8-K	2019-06-01
8-K	2019-05-31
8-K	2019-05-31
8-K	2019-05-09

EX-10.1	corteva-3312020xex101.htm
EX-10.2	corteva-3312020xex102.htm
EX-10.3	corteva-3312020xex103.htm
EX-10.4	corteva-3312020xex104.htm
EX-10.5	corteva-3312020xex105.htm
EX-31.1	corteva-3312020xex311.htm
EX-31.2	corteva-3312020xex312.htm
EX-32.1	corteva-3312020xex321.htm
EX-32.2	corteva-3312020xex322.htm

10-Q	2020-03-31	Filed 2020-05-07
10-Q	2019-03-31	Filed 2019-05-31



Note		Page
1	Summary of Significant Accounting Policies	9
2	Recent Accounting Guidance	10
3	Divestitures and Other Transactions	11
4	Revenue	14
5	Restructuring and Asset Related Charges - Net	16
6	Related Parties	18
7	Supplementary Information	18
8	Income Taxes	20
9	Earnings Per Share of Common Stock	20
10	Accounts and Notes Receivable - Net	21
11	Inventories	22
12	Other Intangible Assets	23
13	Short-Term Borrowings, Long-Term Debt and Available Credit Facilities	23
14	Commitments and Contingent Liabilities	25
15	Stockholders' Equity	30
16	Pension Plans and Other Post Employment Benefits	32
17	Financial Instruments	33
18	Fair Value Measurements	37
19	Segment Information	39

CTVA 10Q Quarterly Report

Corteva Earnings 2020-03-31