Corteva, Inc. [CTVA] Filings

10-Q 1 dd-20220630.htm 10-Q dd-20220630

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 June 30, 2022


☐			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.)

9330 Zionsville Road,

Indianapolis,

Indiana

46268

(833)

267-8382

974 Centre Road,

Wilmington,

Delaware

19805

(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.)

9330 Zionsville Road,

Indianapolis,

Indiana

46268

(833)

267-8382

974 Centre Road,

Wilmington,

Delaware

19805

(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.

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Corteva, Inc.

Yes

E. I. du Pont de Nemours and Company

Yes

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

E. I. du Pont de Nemours and Company

Yes

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

Accelerated Filer o

Non-Accelerated Filer

Smaller reporting company o

Emerging growth company o

E. I. du Pont de Nemours and Company

Large Accelerated Filer

Accelerated Filer o

Non-Accelerated Filer

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.			o
E. I. du Pont de Nemours and Company			o

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

Corteva, Inc.

Yes

E. I. du Pont de Nemours and Company

Yes

Corteva, Inc. had 718,600,000 shares of common stock, par value $0.01 per share, outstanding at July 29, 2022.

E. I. du Pont de Nemours and Company had 200 shares of common stock, par value $0.30 per share, outstanding at July 29, 2022, 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 Income (Loss)	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Equity	7
	Notes to the Interim Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
	Cautionary Statements About Forward-Looking Statements	42
	Recent Developments	43
	Overview	44
	Results of Operations	45

	Recent Accounting Pronouncements	49
	Segment Reviews	49
	Non-GAAP Financial Measures	53
	Liquidity & Capital Resources	54
	Critical Accounting Estimates	57
	Contractual Obligations	58

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58
Item 4.	Controls and Procedures	59

Part II	Other Information

Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 5.	Other Information	62
Item 6.	Exhibits	63
Exhibit Index		63
Signature		64
Consolidated Financial Statements of E.I. du Pont de Nemours and Company (Unaudited)		65

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Explanatory Note

Corteva owns 100% of the outstanding common stock of EID (defined below). 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 Historical DuPont and Historical Dow to realign its business into three groups: agriculture, materials science and specialty products. As part of the Internal Reorganization:

1.the assets and liabilities aligned with EID’s material science business were transferred or conveyed to separate legal entities that were ultimately conveyed by DowDuPont to Dow on April 1, 2019;

2.the assets and liabilities of EID’s specialty products business were transferred or conveyed to separate legal entities that were ultimately distributed to DowDuPont on May 1, 2019;

3.the conveyance of Historical Dow's agriculture business to EID on May 2, 2019; and

4.the contribution of EID to Corteva, Inc. on May 31, 2019. Refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2021 for further information.

• "Dow Distribution" refers to the separation of DowDuPont's materials science business into a separate and independent public company, 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 Inc.’s common stock;

• "Merger” refers to the all-stock merger of equals strategic combination between Historical Dow and Historical DuPont on August 31, 2017;

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

• "DuPont" refers to DuPont de Nemours, Inc. after the Separation of Corteva (on June 1, 2019, DowDuPont Inc. changed its registered name to DuPont de Nemours, Inc.);

• "Separation" or "Separation of Corteva" refers to June 1, 2019, when Corteva, Inc. became an independent, publicly
traded company;

• "Corteva Distribution" refers to the pro rata distribution of all of the then-issued and outstanding shares of Corteva, Inc.'s common stock on June 1, 2019, which was then a wholly-owned subsidiary of DowDuPont, to holders of DowDuPont's common stock as of the close of business on May 24, 2019;

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

• “Letter Agreement” refers to the Letter Agreement executed by DuPont and Corteva on June 1, 2019, which sets forth certain additional terms and conditions related to the Separation, including certain limitations on each party’s ability to transfer certain businesses and assets to third parties without assigning certain of such party’s indemnification obligations under the Corteva Separation Agreement to the other party to the transferee of such businesses and assets or meeting certain other alternative conditions.

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 65. 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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net sales	$	6,252	$	5,627	$	10,853	$	9,805
Cost of goods sold	3,323		3,010		6,047		5,430
Research and development expense	296		293		564		574
Selling, general and administrative expenses	1,017		998		1,752		1,731
Amortization of intangibles	179		180		358		363
Restructuring and asset related charges - net	143		135		148		235
Other income - net	49		298		66		635
Interest expense	16		7		25		14
Income (loss) from continuing operations before income taxes	1,327		1,302		2,025		2,093
Provision for (benefit from) income taxes on continuing operations	325		284		446		462
Income (loss) from continuing operations after income taxes	1,002		1,018		1,579		1,631
(Loss) income from discontinued operations after income taxes	(30)		(45)		(40)		(55)
Net income (loss)	972		973		1,539		1,576
Net income (loss) attributable to noncontrolling interests	3		3		6		6
Net income (loss) attributable to Corteva	$	969	$	970	$	1,533	$	1,570
Basic earnings (loss) per share of common stock:
Basic earnings (loss) per share of common stock from continuing operations	$	1.38	$	1.37	$	2.17	$	2.19
Basic earnings (loss) per share of common stock from discontinued operations	(0.04)		(0.06)		(0.06)		(0.07)
Basic earnings (loss) per share of common stock	$	1.34	$	1.31	$	2.11	$	2.12
Diluted earnings (loss) per share of common stock:
Diluted earnings (loss) per share of common stock from continuing operations	$	1.37	$	1.37	$	2.16	$	2.18
Diluted earnings (loss) per share of common stock from discontinued operations	(0.04)		(0.06)		(0.05)		(0.07)
Diluted earnings (loss) per share of common stock	$	1.33	$	1.31	$	2.11	$	2.11

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

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Corteva, Inc.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)


(In millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income (loss)	$	972	$	973	$	1,539	$	1,576
Other comprehensive income (loss) - net of tax:
Cumulative translation adjustments	(426)		243		(335)		(160)
Adjustments to pension benefit plans	7		8		15		16
Adjustments to other benefit plans	—		(160)		3		(317)
Unrealized gain (loss) on investments	—		—		—		10
Derivative instruments	17		31		(8)		96
Total other comprehensive income (loss)	(402)		122		(325)		(355)
Comprehensive income (loss)	570		1,095		1,214		1,221
Comprehensive income (loss) attributable to noncontrolling interests - net of tax	3		3		6		6
Comprehensive income (loss) attributable to Corteva	$	567	$	1,092	$	1,208	$	1,215

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

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Corteva, Inc.

Consolidated Balance Sheets (Unaudited)


(In millions, except share amounts)	June 30, 2022		December 31, 2021		June 30, 2021
Assets
Current assets
Cash and cash equivalents	$	2,401	$	4,459	$	2,861
Marketable securities	254		86		39
Accounts and notes receivable - net	6,947		4,811		6,792
Inventories	4,184		5,180		3,541
Other current assets	978		1,010		1,052

Total current assets	14,764		15,546		14,285
Investment in nonconsolidated affiliates	93		76		68
Property, plant and equipment	8,532		8,364		8,343
Less: Accumulated depreciation	4,232		4,035		4,002
Net property, plant and equipment	4,300		4,329		4,341
Goodwill	9,987		10,107		10,207
Other intangible assets	9,673		10,044		10,413
Deferred income taxes	449		438		442
Other assets	1,640		1,804		1,740

Total Assets	$	40,906	$	42,344	$	41,496
Liabilities and Equity
Current liabilities
Short-term borrowings and finance lease obligations	$	712	$	17	$	677
Accounts payable	3,567		4,126		3,070
Income taxes payable	383		146		234
Deferred revenue	740		3,201		748
Accrued and other current liabilities	2,454		2,068		2,523

Total current liabilities	7,856		9,558		7,252
Long-term debt	1,283		1,100		1,101
Other noncurrent liabilities
Deferred income tax liabilities	1,165		1,220		935
Pension and other post employment benefits - noncurrent	2,838		3,124		4,767
Other noncurrent obligations	1,693		1,719		1,816

Total noncurrent liabilities	6,979		7,163		8,619
Commitments and contingent liabilities
Stockholders’ equity
Common stock, $0.01 par value; 1,666,667,000 shares authorized; issued at June 30, 2022 - 719,320,000; December 31, 2021 - 726,527,000; and June 30, 2021 - 734,421,000	7		7		7
Additional paid-in capital	27,795		27,751		27,682

Retained earnings	1,252		524		941
Accumulated other comprehensive income (loss)	(3,223)		(2,898)		(3,245)
Total Corteva stockholders’ equity	25,831		25,384		25,385
Noncontrolling interests	240		239		240
Total equity	26,071		25,623		25,625
Total Liabilities and Equity	$	40,906	$	42,344	$	41,496

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

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Corteva, Inc.

Consolidated Statements of Cash Flows (Unaudited)


(In millions)	Six Months Ended June 30,
	2022		2021
Operating activities
Net income (loss)	$	1,539	$	1,576
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:
Depreciation and amortization	609		617
Provision for (benefit from) deferred income tax	(79)		124
Net periodic pension and OPEB benefit, net	(138)		(641)
Pension and OPEB contributions	(113)		(149)
Net (gain) loss on sales of property, businesses, consolidated companies and investments	(1)		(1)
Restructuring and asset related charges - net	148		235
Other net loss	99		143
Changes in assets and liabilities, net
Accounts and notes receivable	(2,331)		(1,957)
Inventories	905		1,334
Accounts payable	(488)		(525)
Deferred revenue	(2,450)		(1,931)
Other assets and liabilities	679		532
Cash provided by (used for) operating activities	(1,621)		(643)
Investing activities
Capital expenditures	(318)		(269)
Proceeds from sales of property, businesses and consolidated companies - net of cash divested	12		26

Investments in and loans to nonconsolidated affiliates	(6)		(1)

Purchases of investments	(236)		(56)
Proceeds from sales and maturities of investments	93		285
Other investing activities, net	20		(2)
Cash provided by (used for) investing activities	(435)		(17)
Financing activities
Net change in borrowings (less than 90 days)	325		254
Proceeds from debt	772		419
Payments on debt	(204)		—
Repurchase of common stock	(600)		(550)
Proceeds from exercise of stock options	62		66
Dividends paid to stockholders	(203)		(192)


Other financing activities, net	(46)		(24)
Cash provided by (used for) financing activities	106		(27)
Effect of exchange rate changes on cash, cash equivalents and restricted cash equivalents	(116)		(14)
Increase (decrease) in cash, cash equivalents and restricted cash equivalents	(2,066)		(701)
Cash, cash equivalents and restricted cash equivalents at beginning of period