Corteva, Inc. [CTVA] Filings

10-Q 1 ctva-20220930.htm 10-Q ctva-20220930

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 September 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.

Table of Contents

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 714,492,000 shares of common stock, par value $0.01 per share, outstanding at October 28, 2022.

E. I. du Pont de Nemours and Company had 200 shares of common stock, par value $0.30 per share, outstanding at October 28, 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.

Table of Contents

CORTEVA, INC.

E. I. DU PONT DE NEMOURS AND COMPANY

Table of Contents


		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)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
	Cautionary Statements About Forward-Looking Statements	44
	Recent Developments	45
	Overview	46
	Results of Operations	47

	Recent Accounting Pronouncements	51
	Segment Reviews	51
	Non-GAAP Financial Measures	55
	Liquidity & Capital Resources	57
	Critical Accounting Estimates	60
	Contractual Obligations	60

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	60
Item 4.	Controls and Procedures	61

Part II	Other Information

Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 5.	Other Information	65
Item 6.	Exhibits	66
Exhibit Index		66
Signature		67
Consolidated Financial Statements of E.I. du Pont de Nemours and Company (Unaudited)		68

Table of Contents

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 68. Footnotes of EID that are identical to that of Corteva are cross-referenced accordingly.

Table of Contents

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales	$	2,777	$	2,371	$	13,630	$	12,176
Cost of goods sold	1,879		1,558		7,926		6,988
Research and development expense	312		297		876		871
Selling, general and administrative expenses	657		672		2,409		2,403
Amortization of intangibles	178		180		536		543
Restructuring and asset related charges - net	152		26		300		261
Other income - net	23		378		89		1,013
Interest expense	18		8		43		22
Income (loss) from continuing operations before income taxes	(396)		8		1,629		2,101
Provision for (benefit from) income taxes on continuing operations	(74)		(28)		372		434
Income (loss) from continuing operations after income taxes	(322)		36		1,257		1,667
(Loss) income from discontinued operations after income taxes	(6)		(4)		(46)		(59)
Net income (loss)	(328)		32		1,211		1,608
Net income (loss) attributable to noncontrolling interests	3		2		9		8
Net income (loss) attributable to Corteva	$	(331)	$	30	$	1,202	$	1,600
Basic earnings (loss) per share of common stock:
Basic earnings (loss) per share of common stock from continuing operations	$	(0.45)	$	0.05	$	1.73	$	2.25
Basic earnings (loss) per share of common stock from discontinued operations	(0.01)		(0.01)		(0.06)		(0.08)
Basic earnings (loss) per share of common stock	$	(0.46)	$	0.04	$	1.67	$	2.17
Diluted earnings (loss) per share of common stock:
Diluted earnings (loss) per share of common stock from continuing operations	$	(0.45)	$	0.05	$	1.72	$	2.23
Diluted earnings (loss) per share of common stock from discontinued operations	(0.01)		(0.01)		(0.06)		(0.08)
Diluted earnings (loss) per share of common stock	$	(0.46)	$	0.04	$	1.66	$	2.15

See Notes to the Interim Consolidated Financial Statements beginning on page 9.

Table of Contents

Corteva, Inc.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)


(In millions)	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss)	$	(328)	$	32	$	1,211	$	1,608
Other comprehensive income (loss) - net of tax:
Cumulative translation adjustments	(533)		(264)		(868)		(424)
Adjustments to pension benefit plans	113		10		128		26
Adjustments to other benefit plans	1		(157)		4		(474)
Unrealized gain (loss) on investments	—		—		—		10
Derivative instruments	50		11		42		107
Total other comprehensive income (loss)	(369)		(400)		(694)		(755)
Comprehensive income (loss)	(697)		(368)		517		853
Comprehensive income (loss) attributable to noncontrolling interests - net of tax	3		2		9		8
Comprehensive income (loss) attributable to Corteva	$	(700)	$	(370)	$	508	$	845

See Notes to the Interim Consolidated Financial Statements beginning on page 9.

Table of Contents

Corteva, Inc.

Consolidated Balance Sheets (Unaudited)


(In millions, except share amounts)	September 30, 2022		December 31, 2021		September 30, 2021
Assets
Current assets
Cash and cash equivalents	$	2,199	$	4,459	$	2,779
Marketable securities	119		86		103
Accounts and notes receivable - net	6,273		4,811		5,818
Inventories	5,415		5,180		4,417
Other current assets	1,039		1,010		1,029

Total current assets	15,045		15,546		14,146
Investment in nonconsolidated affiliates	91		76		67
Property, plant and equipment	8,444		8,364		8,270
Less: Accumulated depreciation	4,259		4,035		3,960
Net property, plant and equipment	4,185		4,329		4,310
Goodwill	9,791		10,107		10,130
Other intangible assets	9,461		10,044		10,225
Deferred income taxes	407		438		448
Other assets	1,671		1,804		1,796

Total Assets	$	40,651	$	42,344	$	41,122
Liabilities and Equity
Current liabilities
Short-term borrowings and finance lease obligations	$	1,576	$	17	$	1,372
Accounts payable	4,140		4,126		3,512
Income taxes payable	227		146		95
Deferred revenue	860		3,201		692
Accrued and other current liabilities	2,115		2,068		2,134

Total current liabilities	8,918		9,558		7,805
Long-term debt	1,277		1,100		1,101
Other noncurrent liabilities
Deferred income tax liabilities	1,123		1,220		930
Pension and other post employment benefits - noncurrent	2,628		3,124		4,583
Other noncurrent obligations	1,621		1,719		1,724

Total noncurrent liabilities	6,649		7,163		8,338
Commitments and contingent liabilities
Stockholders’ equity
Common stock, $0.01 par value; 1,666,667,000 shares authorized; issued at September 30, 2022 - 716,225,000; December 31, 2021 - 726,527,000; and September 30, 2021 - 730,267,000	7		7		7
Additional paid-in capital	27,815		27,751		27,712

Retained earnings	614		524		666
Accumulated other comprehensive income (loss)	(3,592)		(2,898)		(3,645)
Total Corteva stockholders’ equity	24,844		25,384		24,740
Noncontrolling interests	240		239		239
Total equity	25,084		25,623		24,979
Total Liabilities and Equity	$	40,651	$	42,344	$	41,122

See Notes to the Interim Consolidated Financial Statements beginning on page 9.

Table of Contents

Corteva, Inc.

Consolidated Statements of Cash Flows (Unaudited)


(In millions)	Nine Months Ended September 30,
	2022		2021
Operating activities
Net income (loss)	$	1,211	$	1,608
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:
Depreciation and amortization	919		926
Provision for (benefit from) deferred income tax	(149)		151
Net periodic pension and OPEB benefit, net	(155)		(959)
Pension and OPEB contributions	(147)		(202)
Net (gain) loss on sales of property, businesses, consolidated companies and investments	(17)		(1)
Restructuring and asset related charges - net	300		261
Other net loss	181		117
Changes in assets and liabilities, net
Accounts and notes receivable	(1,814)		(1,116)
Inventories	(466)		375
Accounts payable	202		(41)
Deferred revenue	(2,311)		(1,945)
Other assets and liabilities	100		7
Cash provided by (used for) operating activities	(2,146)		(819)
Investing activities
Capital expenditures	(460)		(413)
Proceeds from sales of property, businesses and consolidated companies - net of cash divested	46		53

Investments in and loans to nonconsolidated affiliates	(9)		(3)

Purchases of investments	(314)		(147)
Proceeds from sales and maturities of investments