2023
Annual
Report
A year of
progress
and
execution
Contents
Financial Highlights
To our Stockholders
Governance Structure
A Commitment to
Food, Fuel and Farmers
Highlights in Innovation
Form 10-K for the Year Ended
December 31, 2023
(with selected financial exhibits)
Stockholder Reference Information
General Information and
Investor Relations Information
1
3
5
7
8
11
2023
Financial Highlights
Amounts in millions except for per share amounts
2023
2022
Net Sales
Income from Continuing Operations after Tax
Operating EBITDA1
GAAP Earnings Per Share
Operating Earnings Per Share1
Dividends Declared Per Share
$
$
$
$
$
$
17,226
941
3,381
1.30
2.69
0.62
$
$
$
$
$
$
17,455
1,216
3,224
1.66
2.67
0.58
1. Operating EPS and Operating EBITDA are non-GAAP measures. See pages 44-46 of the Form 10-K and the Appendix of this document for further discussion. 2. North America is defined
as U.S. and Canada. EMEA is defined as Europe, Middle East and Africa. The information provided herein contains certain estimates and 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 “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 financial results or outlook; strategy for growth; product development; regulatory approvals; market position; capital allocation strategy; liquidity; environmental, social
and governance (“ESG”) targets; the anticipated benefits of acquisitions, restructuring actions, or cost savings initiatives; and the outcome of contingencies, such as litigation and
environmental matters, are forward-looking statements. 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 is
included in the “Risk Factors” section of Corteva’s Annual Report on Form 10-K, as modified by its subsequent SEC filings.
2023 ANNUAL REPORT
1
$8,590$2,822Crop Protection$5,768Seed$3,906$2,269Crop Protection$1,637Seed$3,367$1,745Crop Protection$1,622Seed$1,363$918Crop Protection$445Seed$17,226$3,367EMEA2$3,906Latin America$8,590North America2$1,363Asia Pacific$17,226$7,754Crop Protection$9,472SeedNET SALES BY SEGMENT 2023(dollars in millions)NET SALES BY REGION 2023(dollars in millions)REGIONAL SALES BY SEGMENT 2023(dollars in millions)EMEA2North America2LatinAmericaAsiaPacific’23$17,226’22$17,455OPERATING EBITDA1(dollars in millions)’23$3,381’22$3,224NET SALES(dollars in millions) To our
Stockholders
We write this letter at a pivotal time, as the world faces the intertwined challenges of
a growing population, climate change and in some regions, the tragic disruption of
armed conflict. Food—availability, accessibility, quality—is an inextricable link between
each of these.
As a technology company, we also measure performance
through our advancements: in 2023, we launched more
than 400 new products. In Seed alone, we introduced 300
new hybrids or varieties —next generation technology like
Optimum® Gly canola, Vorceed® Enlist® corn and 41 new
trait or stack registration approvals. In Crop Protection,
we launched about 140 new products and two new active
ingredients: Adavelt™ and Reklemel™, the latter being a first
of its kind, selective nematicide that also is compatible with
beneficial soil organisms.
As we look to 2024 and beyond, we are optimistic: the
industry outlook for 2024 is stable, with constructive
fundamentals. The seed market, in particular, is healthy, with
strong demand for the leading-edge technology Corteva is
known for. Our technology plans for this year include more
than 300 new seed hybrids and varieties, ensuring that our
seed pipeline will remain the best in the industry. In crop
protection, our differentiated portfolio, strengthened by our
industry-leading biologicals expertise, will continue to create
new pathways to value creation.
And so, as we commemorate our fifth year as a standalone
public company, we will continue our focus on controlling the
controllables, delivering groundbreaking technology to our
customers and generating consistent, incremental value for
our stockholders.
On behalf of our employees, Board and management team,
we thank you for your continued support of our company.
More than any other time in our history, we need to produce
more high-quality, affordable, nutritious food. But today,
crops are becoming harder to grow, and that food is harder
to get to the people who need it most. The world should
be giving farmers more tools and means to meet these
challenges, rather than, as in many regions around the world,
taking them away.
In fact, technology has the power today to help farmers grow
more crops—without adding land to production, and while
helping mitigate the impacts of climate change. For example,
this year, despite severe drought conditions in many parts of
the country, American farmers set a corn production record
of 15.3 billion bushels—at record yields of about 177 bu/acre.
Corteva played a role: our innovative technology is used
widely across the American corn belt.
Corteva technology has other, wide-ranging benefits
that help drive yield—seeds designed to be more drought
tolerant, herbicides that meet stringent regulatory standards
on soil biodiversity while effectively managing pests, and
insecticides that target damaging nematodes without
affecting soil health.
Farmers around the world appreciate the critical role
technology plays in modern agriculture. We are optimistic
that, as its benefits begin to be more widely understood,
others will join them, and us.
A Strong Foundation, A Bright Future
This year, 2024, Corteva turns five. Over this relatively short
period of time, together with our nearly 23,000 employees
around the world, we have built one of the most competitively
advantaged agricultural technology portfolios in the industry.
Our three-year performance speaks for itself: since the start of
2021, we have grown Operating EBITDA a total of $1.3 billion;
overall, Operating EBITDA margins are also up approximately
500 basis points. We saw this trajectory continue in 2023,
which, despite some industry-wide crop protection challenges,
proved to be another year of Operating EBITDA growth and
margin expansion. We ended the year with no net debt and an
extremely strong cash position, with $1.2 billion in free cash flow.
This strength gives us flexibility and optionality as we evaluate
options to continue to create and grow shareholder value.
Gregory R. Page
Non-Executive
Chair of the Board
Chuck Magro
Chief Executive Officer
2023 ANNUAL REPORT
3
Governance
Structure
Executive Leadership Team
(As of February 8, 2024)
Chuck Magro
Chief Executive Officer,
Corteva, Inc.
Brook Cunningham
Senior Vice President,
Chief Strategy Officer
Timothy Glenn
Executive Vice President,
Seed Business Unit
Dave Anderson
Executive Vice President,
Chief Financial Officer
Board of Directors
Gregory R. Page1,2
Non-Executive Chairman
of the Board, Corteva, Inc.
Retired Chairman and
Chief Executive Officer,
Cargill, Inc.
Lamberto Andreotti3,4
Retired Chairman and
Chief Executive Officer,
Bristol-Myers Squibb
Klaus A. Engel, Ph.D.1,2
Retired Chief Executive
Officer, Evonik Industries
AG
David C. Everitt2,4
Retired President,
Agricultural and Turf
Division, Deere & Co.
Audrey Grimm
Senior Vice President,
Chief HR & Diversity Officer
Robert King
Executive Vice President,
Crop Protection
Business Unit
(As of February 8, 2024)
Samuel Eathington, Ph.D.
Executive Vice President,
Chief Technology and
Digital Officer
Cornel Fuerer
Senior Vice President,
General Counsel
Chuck Magro
Chief Executive Officer,
Corteva, Inc.
Janet P. Giesselman2,4
Retired President & General
Manager, Dow Oil & Gas
Marcos M. Lutz3,4
Chief Executive Officer,
Ultrapar Participações S.A.
Karen H. Grimes1,3
Retired Partner, Senior
Managing Director & Equity
Portfolio Manager, Wellington
Management Company
Michael O. Johanns2,4
Retired United States
Senator, Nebraska, and
former U.S. Secretary of
Agriculture
Rebecca B. Liebert, Ph.D.3,4
President and Chief
Executive Officer, The
Lubrizol Corporation
Nayaki R. Nayyar1,2
Chief Executive Officer,
Securonix, Inc.
Kerry J. Preete3,4
Retired Executive Vice
President and Chief
Strategy Officer,
Monsanto Company
Patrick J. Ward1,3
Retired Chief Financial
Officer, Cummins Inc.
1. Audit Committee 2. Governance and Compliance Committee 3. People and Compensation Committee 4. Sustainability and Innovation Committee
2023 ANNUAL REPORT
5
A Commitment to
Food, Fuel and Farmers
Last year, American farmers produced more than 550 million
tons of corn, wheat, soybeans, rice, fruit, and vegetables,
once again making the American farm the most productive
in the world. The food they produce is part of a complex,
global system that helps feed not only 330 million Americans,
but also more than eight billion people around the world.
Despite these incredible achievements, the reality is that
hunger remains a devastating reality for far too many.
Currently, nearly 780 million people—9.2% of the world’s
population—are food insecure.1
Changes in our climate have led to extreme weather and
the rapid spread of pests and disease, exacerbating the
situation. According to the U.S. National Institute of Food
and Agriculture, between 20-40% of crops globally are lost
every year to pests alone. Adding to the challenge is that
less farmland is available today than in generations past –
meaning farmers are being asked to feed billions more
people on the same amount of land.
Protecting against Pests & Diseases
As changing weather persists, today’s farmers are
being faced with new and rapidly evolving pests
and diseases. Parasitic nematodes alone have been
attributed to crop losses totaling over $150 billion
per year. Safe and effective crop protection
innovations have never been more important.2
What’s the solution? There are many. But we believe a big
part of the answer is innovation. Innovation is what has
enabled American farmers, despite the increasing challenges
they face, to produce 300% more per acre today than
they did 70 years ago. From drought-resistant seeds to
insecticides that better protect soil while still ridding crops
of pernicious pests, precision farming practices have allowed
hundreds of millions of acres to remain out of production,
and in turn, delivered significant energy, biodiversity and
climate benefits.
The agricultural innovations that have enabled this success
are the direct result of decades of research and testing and
hundreds of millions of dollars of investment by companies
like ours. At Corteva, we are doing our part: in 2023, we
increased our research and development budget to bolster
our leading capabilities in core areas of advanced plant
breeding, biotechnology, and crop protection, and we’re
working to accelerate the pace of needed innovation in
meaningful ways:
• Collaborating with technology landscaping partners and
investing in early-stage innovation to complement our
pipeline strategy.
• Leveraging decision-science capabilities including
automation, artificial intelligence, machine learning,
and predictive modeling to unlock new value from our
seed and crop protection products.
• Leaning into novel game-changing technologies like
gene editing that are accessible and affordable, with
broad applications to benefit farmers and societies
around the globe.
• Leading the way in developing the next generation of
safe and effective crop protection tools—that are not
only effective in protecting against deadly pests, weeds
and diseases, but at the same time preserve soil health
and protect the surrounding ecosystem—helping farmers
get the most out of every acre.
But innovation is only useful if it's available. And today, in
the United States, a single crop protection product takes
an average of 13 years to reach market, a biotech trait
takes almost 16 years, and a new seed product can take
seven years.
This is why, as we continue to make robust and strategic
investments in our R&D pipeline, we are also advocating for
policies that incentivize and protect continued, long-term
investments in next generation technologies—like gene
editing—that are so critical to the future of agriculture, and
the future of the world around us.
Investing for the Future
Corteva invests nearly $4 million every day in research
and development. We have more than 5,000 scientists,
100 research sites and 2,000 testing locations
worldwide. Together, we are focused on providing the
sustainable and differentiated solutions that our
customers expect from us.
1. © 2024 Action Against Hunger USA: World Hunger Facts: https://www.actionagainsthunger.org/the-hunger-crisis/world-hunger-facts/
2. “Nematodes: A Threat to Sustainability of Agriculture”: https://www.sciencedirect.com/science/article/pii/S1878029615005472
2023 ANNUAL REPORT
7
Highlights
in Innovation
150
new crop
protection
product
registrations
New crop
protection launches
including Adavelt™ active, a novel fungicide,
and Reklemel™ active, a first-of-its-kind,
selective nematicide. In total, we obtained
more than 150 new crop protection product
registrations and launched 140 new products
in 2023. 100% of actives in our crop protection
pipeline meet our sustainability criteria.
Leveraged our
leading germplasm
with multiple technologies to drive
the future of new cropping systems
such as reduced stature corn.
Contributed to
renewable energy use
such as our multi-year collaboration with Bunge
and Chevron involving a new double cropping
system in the southern U.S. that has the potential
to significantly increase the availability of
plant-based oil feedstocks for the biofuel market.
An additional partnership with Bunge to optimize
the nutritional profile for soybean meal aligns with
our commitment to sustainable innovation and
driving greater value opportunities for livestock
producers and row crop farmers.
#1
selling soybean
technology
in the U.S.
Increased market penetration
of Enlist E3® soybeans
which officially became the #1 selling
soybean technology in the U.S. Our Enlist®
weed control system is critical to facilitating
the significant reduction in royalty expenses
that we expect to be a significant value
catalyst going forward.
Products with TM and ® are trademarks of Corteva Agriscience and its affiliated companies. The transgenic soybean event in Enlist E3® soybeans is jointly developed and owned by Corteva Agriscience LLC and M.S. Technologies LLC.
8
CORTEVA AGRISCIENCE
300~
new
hybrids
varieties
Continued leadership
in seed innovation
through the launch of Optimum® Gly
canola to deliver enhanced weed control,
and two new corn traits, Vorceed® Enlist® and
PowerCore® Enlist® Refuge Advanced®.
This is in addition to ~300 new hybrids/
varieties and 41 new trait/stack registration
approvals that are well positioned to drive
new levels of global productivity.
Progressed our position on
the path to royalty neutrality
through strategic licensing and partnership
decisions. We anticipate reaching royalty
neutrality by the end of the decade and,
over time, expect to become a significant
licensor of our technology across soybeans,
corn, canola and other crops.
Continued our
commitment to gene editing
focusing on the next generation of plant
breeding innovation that can unlock
unlimited potential to benefit the future of
food and farming. The technology behind
the early-stage concept announced in
2023 brings added protection to elite corn
hybrids grown in North America, with the
potential to scale to other crops and diseases
in a myriad of geographies.
Expanded our
biologicals business
through acquisitions of Symborg
and Stoller, reflecting our commitment
to providing farmers with a wide
range of choices and tools to increase
yield sustainably.
2023 ANNUAL REPORT
9
THIS PAGE INTENTIONALLY LEFT BLANK
10
CORTEVA AGRISCIENCE
2023
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
___________________________________________________________________________
Commission File Number 001-38710
Corteva, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or other Jurisdiction of Incorporation or Organization)
82-4979096
(I.R.S. Employer Identification No.)
9330 Zionsville Road, Indianapolis, Indiana
46268
974 Centre Road, Wilmington, Delaware 19805
(Address of Principal Executive Offices) (Zip Code)
(833) 267-8382
(Registrant’s Telephone Number, including
area code)
Commission File Number 1-815
EIDP, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or other Jurisdiction of Incorporation or Organization)
51-0014090
(I.R.S. Employer Identification No.)
9330 Zionsville Road, Indianapolis, Indiana
46268
974 Centre Road, Wilmington, Delaware 19805
(Address of Principal Executive Offices) (Zip Code)
(833) 267-8382
(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 EIDP, Inc.:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
$3.50 Series Preferred Stock
$4.50 Series Preferred Stock
CTAPrA
CTAPrB
New York Stock Exchange
New York Stock Exchange
No securities are registered pursuant to Section 12(g) of the Act.
_____________________________________________________
Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act).
Corteva, Inc.
EIDP, Inc.
Yes x No o
Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Corteva, Inc.
EIDP, Inc.
Yes o No x
Yes o No x
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.
EIDP, Inc.
Yes x No o
Yes x No o
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 files).
Corteva, Inc.
EIDP, Inc.
Yes x No o
Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company," and
"emerging growth company" in Rule 12b-2 of the Exchange Act.
Corteva, Inc.
EIDP, Inc.
Large Accelerated
Filer
Large Accelerated
Filer
x Accelerated Filer o
o Accelerated Filer o
Non-Accelerated
Filer
Non-Accelerated
Filer
o
x
Smaller reporting
company o
Emerging growth
company o
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.
EIDP, Inc.
o
o
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public
accounting firm that prepared or issued its audit report.
Corteva, Inc.
EIDP, Inc.
Yes x No o
Yes x No o
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements.
Corteva, Inc.
EIDP, Inc.
o
o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Corteva, Inc.
EIDP, Inc.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Corteva, Inc.
EIDP, Inc.
o
o
Yes o No x
Yes o No x
The aggregate market value of voting stock of Corteva, Inc. held by non-affiliates of the registrant (excludes outstanding shares
beneficially owned by directors and officers and treasury shares) as of June 30, 2023 was $40.6 billion.
As of February 1, 2024, 701,783,000 shares of Corteva, Inc's common stock, $0.01 par value, were outstanding.
As of February 1, 2024, all of EIDP, Inc.’s issued and outstanding common stock, comprised of 200 shares, $0.30 par value per share,
is held by Corteva, Inc.
EIDP, Inc. meets the conditions set forth in General Instruction I(1)(a), (b) and (d) of Form 10-K (as modified by a grant of no-action
relief dated February 12, 2018) and is therefore filing this form with reduced disclosure format.
Information pertaining to certain Items in Part III of this report is incorporated herein by reference to portions of Corteva, Inc.'s definitive
2022 Annual Meeting Proxy Statement to be filed within 120 days after the end of the year covered by this Annual Report on Form 10-K,
pursuant to Regulation 14A (the Proxy).
Documents Incorporated by Reference
CORTEVA, INC.
Form 10-K
Table of Contents
Explanatory Note
PART I
Item 1.
Business
Item 1A.
Item 1B.Unre
Item 1C.Cy
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Risk Factors
solved Staff Comments
bersecurity
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
[Reserved]
Management's Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A.
Controls and Procedures
Item 9B.Ot
Item 9C.Di
her Information
sclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Item 15.
Exhibits and Financial Statement Schedules
Item 16.
SIGNATURES
Form 10-K Summary
EIDP, Inc. Financial Statements and Supplementary Data
Page
2
3
12
24
24
25
26
28
28
29
30
61
62
62
63
64
64
65
66
66
67
67
68
F-83
71
F-70
1
Explanatory Note
This Annual Report on Form 10-K is a combined report being filed separately by Corteva, Inc. and EIDP, Inc.
("EIDP"). Corteva, Inc. owns all of the common equity interests in EIDP, and EIDP meets the conditions set forth in General
Instruction I(1)(a), (b) and (d) of Form 10-K and is therefore filing its information within this Form 10-K with the reduced
disclosure format. Each of Corteva, Inc. and EIDP is filing on its own behalf the information contained in this report that relates
to itself, and neither company makes any representation as to information relating to the other company. Where information or
an explanation is provided that is substantially the same for each company, such information or explanation has been combined
in this report. Where information or an explanation is not substantially the same for each company, separate information and
explanation has been provided. In addition, separate consolidated financial statements for each company, along with notes to
the consolidated financial statements, are included in this report.
The primary differences between Corteva and EIDP's financial statements relate to EIDP's Preferred Stock - $4.50 Series and
EIDP's Preferred Stock - $3.50 Series, a related party loan between EIDP and Corteva, Inc. and the associated tax deductible
interest expense for EIDP, a Master In-House Banking Agreement between EIDP and Corteva, Inc., including certain
consolidated subsidiaries, and the capital structure of Corteva. Inc. (See EIDP's Note 1 - Basis of Presentation to EIDP's
Consolidated Financial Statements, for additional information for above items). The separate EIDP financial statements and
footnotes for areas that differ from Corteva, are included within this Annual Report on Form 10-K and begin on page F-74.
Footnotes of EIDP that are identical to that of Corteva are cross-referenced accordingly.
2
Part I
ITEM 1. BUSINESS
Unless otherwise indicated or the context otherwise requires, references in this Annual Report on Form 10-K to:
•
•
•
•
•
•
•
•
"Corteva" or "the company" refers to Corteva, Inc. and its consolidated subsidiaries (including EIDP);
"EIDP" refers to EIDP, Inc. (formerly known as E. I. du Pont de Nemours and Company) and its consolidated
subsidiaries or EIDP, Inc. excluding its consolidated subsidiaries, as the context may indicate;
"DowDuPont" refers to DowDuPont Inc. and its subsidiaries prior to the Separation (as defined below) of Corteva;
"Historical Dow" refers to The Dow Chemical Company and its consolidated subsidiaries prior to the Internal
Reorganization as defined below;
"Historical DuPont" and "Historical EID" refers to EIDP prior to the Internal Reorganization (as defined below);
"Dow" refers to Dow Inc. after The Dow Distribution (as defined below);
"DuPont" refers to DuPont de Nemours, Inc. after the Separation of Corteva; and
"Merger" refers to the all-stock merger of equals strategic combination between Historical Dow and Historical
DuPont.
Background
Corteva is a leading global provider of seed and crop protection solutions focused on the agriculture industry and contributing
to a healthier, more secure and sustainable food supply. Corteva was incorporated in Delaware in March 2018 and maintains its
business headquarters in Indianapolis, Indiana. With one of the broadest and most productive new product pipelines in the
agriculture industry, Corteva is focused on progressing science-based innovations, which aim to deliver a wide range of
improved agriculture products and services to its customers. The company leverages its rich heritage of scientific achievement
to advance its robust innovation pipeline and continue to shape the future of responsible agriculture. New products are crucial to
solving farmers’ productivity challenges amid a growing global population while addressing natural resistance, regulatory
changes, safety requirements and competitive dynamics. The company’s investment in technology-based and solution-based
product offerings allows it to meet farmers’ evolving needs while ensuring that its investments generate sufficient returns.
Meanwhile, through Corteva’s unique routes to market, the company continues to work face-to-face with farmers around the
world to understand their needs.
The company's broad portfolio of agriculture solutions fuels farmer productivity in approximately 125 countries. See Note 22 -
Geographic Information, to the Consolidated Financial Statements for details on the location of the company's sales and
property.
On June 1, 2019, Corteva, Inc. became an independent, publicly traded company through the completed separation (the
“Separation”) of the agriculture business of DuPont de Nemours, Inc. (formerly known as DowDuPont Inc.) (“DuPont” or
"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 of Corteva, Inc.
As a result of the Internal Reorganization (defined below), on May 31, 2019, EIDP was contributed to Corteva, Inc. and, as a
result, Corteva, Inc. owns 100% of the outstanding common stock of EIDP. Shares of EIDP preferred stock, $3.50 Series and
$4.50 Series, issued and outstanding immediately prior to the Separation remain issued and outstanding and were unaffected by
the Separation. EIDP 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. Prior to March 31, 2019, Corteva, Inc. had engaged in no business operations
and had no assets or liabilities of any kind, other than those incident to its formation.
Internal Reorganizations and Business Separations
Subsequent to the Merger, Historical Dow and EIDP engaged in a series of internal reorganization and realignment steps to
realign their businesses into three subgroups: agriculture, materials science and specialty products ("Internal Reorganization").
On April 1, 2019, DowDuPont completed the separation of its materials science business into a separate and independent public
company by way of a distribution of Dow common stock, to holders of DowDuPont's common stock (the “Dow Distribution”
and together with the Corteva Distribution, the “Distributions”).
On April 1, 2019, Historical Dow entities, which held certain assets and liabilities aligned with Historical Dow’s agriculture
business and the assets and liabilities associated with its specialty products business, respectively, were transferred and
conveyed to DowDuPont.
3
ITEM 1. BUSINESS, continued
Part I
On April 1, 2019 and May 1, 2019, EIDP’s materials science and specialty products entities, along with their respective assets
and liabilities, were conveyed to Dow and DowDuPont, respectively. On May 2, 2019, DowDuPont conveyed Historical Dow
agricultural entities to EIDP.
On May 6, 2019, the Board of Directors of DowDuPont approved the distribution of all the then issued and outstanding shares
of common stock of Corteva, Inc., then a wholly-owned subsidiary of DowDuPont, to DowDuPont stockholders. On May 31,
2019, DowDuPont contributed EIDP to Corteva, Inc. and on June 1, 2019, the Separation was completed. Corteva, Inc.'s
common stock began trading on the New York Stock Exchange under the ticker symbol "CTVA" on June 3, 2019.
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. The
Parties entered into the following agreements:
•
•
•
•
•
Separation and Distribution Agreement - Effective April 1, 2019, the Parties entered into an agreement that sets forth,
among other things, the principal transactions necessary to effect the Distributions, as well as the agreements that
govern certain aspects of the Parties’ ongoing relationships after the completion of the Distributions (the "Corteva
Separation Agreement").
Tax Matters Agreement - The Parties entered into an agreement effective as of April 1, 2019, as amended on June 1,
2019, that governs their respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax
attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters
regarding taxes.
Employee Matters Agreement - The Parties entered into an agreement effective as of April 1, 2019, that identifies
employees and employee-related liabilities (and attributable assets) allocated (either retained, transferred and accepted,
or assigned and assumed, as applicable) to the Parties as part of the Distributions.
Intellectual Property Cross-License Agreement - Effective as of April 1, 2019 Corteva and Dow, and effective June 1,
2019, Corteva and DuPont, entered into Intellectual Property Cross-License Agreements. The Intellectual Property
Cross-License Agreements set forth the terms and conditions under which the applicable Parties may use in their
respective businesses, following each of the Distributions, certain know-how (including trade secrets), copyrights, and
software, and certain patents and standards, allocated to another Party pursuant to the Corteva Separation Agreement.
Letter Agreement - Effective as of June 1, 2019 DuPont and Corteva entered into a Letter Agreement. The Letter
Agreement 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.
Business Segments
The company’s operations are managed through two reportable segments: seed and crop protection. The seed segment develops
and supplies commercial seed combining superior germplasm with advanced traits to produce high yield potential for farmers
around the world. The crop protection segment supplies products to protect crop yields against weeds, insects and disease,
enabling farmers to achieve optimal results. The combination of these leading platforms creates one of the broadest portfolios of
agriculture solutions in the industry. Additional information with respect to business segment results is included in Item 7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations, on page 40 of this report and Note
23 - Segment Information, to the Consolidated Financial Statements.
4
ITEM 1. BUSINESS, continued
Part I
Seed
The seed segment is a global leader in developing and supplying commercial seed combining advanced germplasm and traits
that produce optimum yield for farms around the world. The company’s seed segment is a leader in many key seed markets,
including North America corn and soybeans, Europe corn and sunflower, as well as Brazil, India, South Africa and Argentina
corn. The company offers trait technologies that improve resistance to weather, disease, insects and enhance food and
nutritional characteristics, herbicides used to control weeds, and digital solutions that assist farmer decision-making to help
maximize yield and profitability.
A summary of the seed segment’s net sales by major product line and geographic region (based on customer location) are as
follows:
2023 Net Sales by
Product Line
Other Oilseeds
Other
Soybean
Corn
2023 Net Sales by
Geographic Region
Asia Pacific
Latin America
Europe,
Middle East
and Africa
("EMEA")
U.S. &
Canada
("North
America")
Products and Brands
The seed segment’s major brands and technologies, by key product line, are listed below:
Seed Solutions Brands
Seed Solutions Traits and
Technologies
OtherLu
Pioneer® seeds; Brevant® seeds; Dairyland Seed®; Hoegemeyer® hybrids; Nutech® seed; Seed
Consultants®; AgVenture® brand; Cordius®, Licensing Division of Corteva Agriscience, DUO®
hybrid corn, NEXSEM® corn, NordTM semillas; PhytoGen® cotton; Pannar™ brand corn
ENLIST™ corn; ENLIST E3™ soybeans; ENLIST™ cotton; Enlist™ weed control system;
EXZACT® Precision Technology; Herculex™ Insect Protection; Herculex™ XTRA Insect
Protection; Leptra® insect protection technology offering protection against above ground pests;
PowerCore® corn, PowerCore® Ultra corn, PowerCore® Enlist™ corn, PowerCore® Ultra Enlist™
corn, POWERCORE® trait
technology family of products; Optimum® AcreMax® family of
products offering above and below ground insect protection; REFUGE ADVANCED® trait
technology; SMARTSTAX® trait technology; NEXERA® canola trait; Omega-9 Oils; Pioneer®
brand Optimum® AQUAmax® products; Pioneer® brand A-Series soybeans; Pioneer® brand
Plenish® high oleic soybeans; ExpressSun™ herbicide tolerant trait; Pioneer Protector® products
for canola, sunflower and sorghum; Pioneer MAXIMUS® rapeseed hybrids; Qrome® corn;
Clearfield® canola; PROPOUND™ advanced canola meal; Vorceed™ Enlist™ products;
Conkesta®; Conkesta E3® soybeans; WideStrike™ Insect Protection; WideStrike™ 3 Insect
Protection; Inzen® trait; BOLT® technology; STS® herbicide tolerant trait; MAXIMUS® canola
hybrids; CottonBest® program; Brevant™ Protector products; Optimum® GLY herbicide tolerance
trait Optimum® AcreMax® insect protection; Optimum® AcreMax® Leptra® insect protection;
Optimum® AcreMax® Xtra insect protection; Optimum® AcreMax® XTreme insect protection;
Bovalta® BMR products; Optimum® Intrasect® insect protection; Optimum® Leptra® insect
protection
miGEN™ seed treatments; Lumisena™; Lumiverd™; Lumiscend™; Lumiscend™ Pro;
Lumisure®; Lumiflex™; Lumiante™; LumiTreo™; Dermacor™ X-100; Vertisan® ST;
Lumiderm®; Lumivia™ CPL; Lumivia™ and Lumialza®
5
ITEM 1. BUSINESS, continued
Part I
In connection with the validation of breeding plans and large-scale product development timelines focused on rapidly ramping
up differentiated technology solutions, in 2019 the company began accelerating the ramp up of the Enlist E3TM trait platform in
the company’s soybean portfolio mix across all brands, including Pioneer® brands. During the five year ramp-up period, the
company began 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 Roundup Ready 2 Yield® and Roundup Ready 2
Xtend® traits thereafter for the remaining term of the non-exclusive license with the Monsanto Company. Refer to Prepaid
Royalties within the Critical Accounting Estimates section on page 55 for additional information.
Distribution
The seed segment has a diverse worldwide network which markets and distributes the company’s brands to customers,
primarily through the company’s multi-channel, multi-brand strategy, which includes four differentiated channels: Pioneer
agency model, regional brands, retail brands, as well as third parties through licensing and distribution channels.
The Pioneer agency model
is unique to Corteva and represents sales made directly to farmers via independent sales
representatives. Through this agency model, the company interacts directly with farmers at multiple points in the growing
season, from prior to planting all the way through harvest. These regular interactions enable the company to provide the advice
and service farmers need while giving the company real-time insights into the customers’ future ordering decisions. The
company’s regional brands connect to customers through regional brand employees and farmer-dealer networks. Retail brands
provide a one-stop shop for seed and chemistry solutions and may include sales to distributors, agricultural cooperatives, and
dealers. Finally, Corteva out-licenses traits and germplasm to third parties.
Key Raw Materials
The key raw materials for seed include corn and soybean seeds. To produce high-quality seeds, the company contracts with
third-party growers globally. Corteva focuses on production close to the customer to provide the seed product, which is suitable
for that region and its weed, insect and disease challenges, weather, soil and other conditions. The company conditions and
packages the seeds using its own plants and third-party contract manufacturers. By striking a balance between owning
production facility assets directly and contracting with third-party growers, the company believes it is best able to maintain
flexibility to react to demand changes unique to each geography while minimizing costs. The company seeks to collaborate with
strategic seed growers and share its digital agronomy and product management knowledge with them. The company’s third-
party growers are an important part of its supply chain. Corteva provides them with rigorous training, planning tools and access
to a system that tests and advances products matched to specific geographic needs.
The seed segment's research and development ("R&D") and supply chain groups work seamlessly to select and maintain
product characteristics that enhance the quality of its seed products and solutions. Corteva focuses on customer-driven
innovation to deliver superior germplasm and trait technologies. With its large sets of digitized data and its seed field
management solution, the company can manage its field operations efficiently and draw insights from data quickly and
effectively. This allows the company’s supply chain to react quickly to changing customer needs and provides R&D with
tremendous amounts of data to analyze and incorporate into resource allocation decisions. The company continues to invest in
and build capabilities that drive value via data digitization and analytics that enable it to create an even more responsive and
efficient answer to customer needs.
Crop Protection
The crop protection segment serves the global agricultural input industry with products that protect against weeds, insects and
other pests, and disease, and that improve overall crop health both above and below ground via nitrogen management and seed-
applied technologies. The segment's crop protection solutions and digital solutions provide farmers the tools they need to
improve productivity and profitability, and help keep fields free of weeds, insects and diseases. The company is a leader in
global herbicides, insecticides, nitrogen stabilizers, pasture and range management herbicides and biologicals.
6
ITEM 1. BUSINESS, continued
Part I
A summary of the crop protection segment’s net sales by major product line and geographic region (based on customer
location) are as follows:
2023 Net Sales by Product
Line
Other
Fungicides
Insecticides
2023 Net Sales by
Geographic Region
Asia Pacific
Herbicides
Latin America
North America
EMEA
Products and Brands
The crop protection segment’s major brands and technologies, by key product line, are listed below:
Insect and Nematode Management CLOSER™; DELEGATE®; INTREPID®; ISOCLAST™; EXALT™; PEXALON™;
SALIBRO™;
SENTRICON®;
Reklemel™;
JEMVELVA™; RADIANT™;
OPTIMUM®;
VYDATE®;
TRANSFORM™;
PYRAXALT™; QALCOVA™;
ENTRUST® SC; GF-120™; and TRACER™
APROACH PRIMA®; VESSARYA®; APROACH®; APROACH POWER®; VIOVAN®;
TALENDO™; VERBEN®, EQUATION PRO®; EQUATION CONTACT®; ZORVEC™;
INATREQ™; CURZATE™; TANOS®, BIMTM MAX; BEAMTM; FONTELIS™;
ACANTO™; GALILEO®; VERPIXOTM; and ZETIGOTM PRM
control
PINDAR®
IGO®; ARYLEX®; ENLIST™ weed
system; ENLIST ONE™;
BROADWAY™; RINSKOR™; MUSTANG®; GALLANT™; VERDICT®; KERB®;
PIXXARO®; QUELEX™; KORVETTO®; REXADE™; GALLERY®; SNAPSHOT®;
GRANITE®;
WIDEMATCH®;
VIPER®;
PERFECTMATCH®; CLINCHER™; GARLON™; TORDON™; REMEDY™;
PASTAR™; SONIC®; TEXARO®; KEYSTONE®; PACTO®; LIGATE®; DIMENSION®;
TOPSHOT™; RICER®;
JAGUAR™; AGIXATM,
LOYANT™; ROYANT™;
NOVIXID®, NOVLECT™; REALM® Q; LONTREL®; GRAZON®; PAXEO®;
RESICORE®; SPIDER®; STARANETM; and SURESTART®
INSTINCT®; N-SERVE® Nitrogen Stabilizer
BELKAR®;
GT;
NDVisor™
Disease Management
Weed ControlAR
Nitrogen Management
OtherLA
Key Raw Materials
The key raw materials and supplies for crop protection include chlorinated pyridines derivatives, specialty intermediates and
technical grade active ingredients, chlorine, and seed treatments. Typically, the company purchases major raw materials through
long-term contracts with multiple suppliers, which sometimes require minimum purchase commitments. Certain important raw
materials are supplied by a few major suppliers. The company expects the markets for its raw materials to remain balanced. The
company relies on contract manufacturers, both domestically and internationally, to produce certain inputs or key components
for its product formulations. These inputs are sourced globally and the company generally formulates its products close to its
end customers. Shifts in customer demand, reduced local availability of raw materials, and/or production capacity constraints
may, at times, necessitate sourcing from an alternative geography. The company strives to maintain multiple high-quality
supply sources for each input.
7
ITEM 1. BUSINESS, continued
Part I
Corteva’s supply chain strategy involves managing global supplies of active and intermediate ingredients sourced regionally
with global best practices and oversight. Corteva’s supply strategy includes a robust and flexible global footprint to meet future
portfolio growth. The company’s supply chain also provides competitive advantages including reducing time to meet customer
requirements in regions while minimizing costs through the value chain.
Seasonality
Corteva’s sales are generally strongest in the first half of the calendar year, which aligns with the planting and growing season
in the northern hemisphere. The company typically generates about 65 percent of its sales in the first half of the calendar year,
driven by northern hemisphere seed and crop protection sales. The company generates about 35 percent of its sales in the
second half of the calendar year, led by seed sales in the southern hemisphere. The seasonality in sales impacts both the seed
and crop protection segments. The company’s direct distribution channel, where products are shipped to farmers, is more
affected by planting delays than its competitors. Generally speaking, unfavorable weather slows the planting season and can
affect the company’s quarterly results and sales mix. Severe unfavorable weather, however, can impact overall sales. Accounts
receivable tends to be higher during the first half of the year, consistent with the peak sales period in the northern hemisphere,
with cash collection focused in the fourth quarter.
Human Capital Management
Corteva aims to attract the best employees, to retain those employees through offering career development and training
opportunities while also prioritizing their safety and wellness in an inclusive and productive work environment. The company’s
strong employee base of approximately 22,500 employees, along with its commitment to Corteva’s core values, is a key
element to the success of its business.
Workforce Composition. As of December 31, 2023, the company globally employs approximately 22,500 employees. In order
to address regional specific customer needs within its global business, the company has a geographically diverse employee base
with 46%, 22%, 19%, and 13% located in North America, Latin America, EMEA, and Asia-Pacific regions, respectively.
Approximately 2% of the workforce is unionized in the United States and another 12% participate in work councils and
collective bargaining arrangements outside the United States. In 2023, the company did not experience any work stoppages due
to strike or lockouts.
Safety. Living safely is one of the company’s core values by which the company manages its business. The company has
implemented safety programs and management practices to promote a culture of safety to protect its employees, as well as the
environment. This includes required trainings for employees, as well as specific qualifications and certifications for certain
operational employees.
Inclusion. The company has a robust inclusion, diversity, and equity (“ID&E”) vision and strategy, based upon the belief that
embracing diversity and inclusion benefits the company by creating a workforce with a greater variety of skills and perspectives
as a result of their differentiated backgrounds and experiences. Specific ID&E initiatives are identified and tracked to create a
culture of belonging that is designed to create an environment where the best talent is attracted, retained, and engaged.
Management is expected to support specific inclusion initiatives for their respective geographies and business, as applicable, in
order to build a more inclusive working environment for the benefit of all employees. Critical to creating this environment are
company-sponsored employee business resource groups (“BRGs”) that support and promote certain mutual objectives of both
the employee and the company, including community engagement and the professional development of employees. The BRGs
are open to all employees and provide a space where employees can foster connections within a supportive environment. The
company maintains nine global BRGs, each led by a member of the company’s senior leadership: Disability Awareness
Network; Global African Heritage Alliance; Global Indigenous Peoples Alliance; Growing Asian Impact Network; Latin
Network; Pride (LGBTQ+); Professional Learning Acceleration Network; Veteran’s Network; and Women’s Inclusion
Network.
The company monitors its recruitment and talent development processes, in order to prevent and detect inequities and
potentially discriminatory practices that could negatively impact the creation of an inclusive culture and the retention of key
talent for our leadership pipeline. The company reviews its ID&E efforts through periodic engagement surveys and other
measures. The results of the company’s efforts, along with its ID&E strategy, are reviewed periodically with the company’s
management, and through annual reviews of the company’s leadership pipelines and ID&E programs with the People and
Compensation Committee of the Board of Directors.
8
ITEM 1. BUSINESS, continued
Part I
Experienced Management. The company believes its management team has the experience necessary to effectively execute its
strategy and advance its product pipelines and technology. The company's chief executive officer and business presidents have
an average of approximately 25 years of agriculture experience and are supported by an experienced and talented management
team who is dedicated to maintaining and expanding its position as a global force in the agriculture industry.
Intellectual Property
Corteva considers its intellectual property estate, which includes patents, trade secrets, trademarks and copyrights, in the
aggregate, to constitute a valuable asset of Corteva and actively seeks to secure intellectual property rights as part of an overall
strategy to protect its investment in innovations and maximize the results of its research and development program. While the
company believes that its intellectual property estate, taken as a whole, provides a competitive advantage in many of its
businesses, no single patent, trademark, license or group of related patents or licenses is in itself essential to the company as a
whole or to any of the company’s segments.
Trade secrets are an important element of the company's intellectual property. Many of the processes used to make Corteva
products are kept as trade secrets which, from time to time, may be licensed to third parties. Corteva vigilantly protects all of its
intellectual property including its trade secrets. When the company discovers that its trade secrets have been unlawfully taken, it
reports the matter to governmental authorities for investigation and potential criminal action, as appropriate. In addition, the
company takes measures to mitigate any potential impact, which may include civil actions seeking redress, restitution and/or
damages based on loss to the company and/or unjust enrichment.
Patents & Trademarks. Corteva continually applies for and obtains U.S. and foreign patents and has access to a large patent
portfolio, both owned and licensed. Corteva’s rights under these patents and licenses, as well as the products made and sold
under them, are important to the company in the aggregate. The protection afforded by these patents varies based on country,
scope of individual patent coverage, as well as the availability of legal remedies in each country. This significant patent estate
may be leveraged to align with the company’s strategic priorities within and across product lines. At December 31, 2023, the
company owned about 5,900 U.S. patents and about 11,500 active patents outside of the U.S.
Remaining life of granted patents owned as of December 31, 2023:
Approximate U.S.
Approximate Other Countries
Within 5 years1,0002,000
6 to 10 years2,0003,600
11 to 15 years1,9005,500
16 to 20 years1,000
Total5,90011,500
4
00
In addition to its owned patents, the company owns over 4,400 patent applications.
The company also owns or has licensed a substantial number of trade names, trademarks and trademark registrations in the
United States and other countries, including approximately 12,200 registrations and 1,000 pending trademark applications in a
number of jurisdictions.
In addition, the company holds multiple long-term biotechnology trait licenses from third parties in the normal course of
business. Most corn hybrids and soybean varieties sold to customers contain biotechnology traits licensed from third parties
under these long-term licenses.
Competition
The company competes with producers of seed germplasm, trait developers, and crop protection products on a global basis. The
global market for products within the industry is highly competitive and the company believes competition has and will
continue to intensify. Corteva competes based on germplasm and trait leadership, price, quality and cost competitiveness and
the offering of a holistic solution. The company’s key competitors include BASF, Bayer, FMC, Syngenta and ChemChina, as
well as companies trading in generic crop protection chemicals and regional seed companies.
9
ITEM 1. BUSINESS, continued
Part I
Environmental Matters
Information related to environmental matters is included in several areas of this report: (1) Environmental Proceedings
beginning on page 27; (2) Management's Discussion and Analysis of Financial Condition and Results of Operations beginning
on pages 58-60; and (3) Note 2 - Summary of Significant Accounting Policies, and Note 16 - Commitments and Contingent
Liabilities, to the Consolidated Financial Statements.
Regulatory Considerations
Our seed and crop protection products and operations are subject to certain approval procedures, manufacturing requirements
and environmental protection laws and regulations in the jurisdictions in which we operate. We evaluate and test products
throughout the research and development phases, and each new technology undergoes further rigorous scientific studies and
tests to validate that the product can be used effectively and that use of the technology is safe for humans and animals and does
not cause undue harm to the environment when used in accordance with the directions for use.
The regulatory approval processes and procedures globally are becoming increasingly more complex, which has resulted in
additional testing needs, longer approval timelines that are difficult to predict, and higher development and maintenance costs.
We continue to invest on an ongoing basis to keep dossiers current, respond to regulators and meet evolving regulatory
standards required by global regulatory frameworks. Failure to comply with these regulations or future regulatory bans and
requirements related to our products and their use may materially impact our financial performance. The increase in timelines
for regulatory approvals may result in the company not achieving its sustainability targets, or its anticipated returns on research
and development investments.
Regulation of Genetically Modified Organisms (“GMOs”) and Gene Editing
Genetically modified seed products are subject to regulatory approval processes and procedures. For example, in the United
States, the Coordinated Framework for Regulation of Biotechnology governs genetically modified or gene edited organisms,
using existing U.S. legislation and legal authorities on food, feed and environmental safety. Plant GMOs are regulated by the
U.S. Department of Agriculture’s (the “USDA”) Animal and Plant Health Inspection Service (the “APHIS”) under the Plant
Protection Act. The APHIS assesses the trait to ensure that the trait will not pose a plant pest and is not a noxious weed. GMOs
in food are regulated by the Food and Drug Administration (the “FDA”) under the Federal Food, Drug, and Cosmetic Act (the
“FFDCA”). The FDA ensures that the food is safe for food and feed. Pesticides and microorganisms containing GMOs are
regulated by the Environmental Protection Agency (the “EPA”) pursuant to the Federal Insecticide, Fungicide and Rodenticide
Act (the “FIFRA”) and the Toxic Substances Control Act. The EPA assesses the trait or the stack containing the traits to ensure
that there is no unreasonable adverse effect to the environment.
Other countries also have rigorous approval processes, procedures, and scientific testing requirements for the cultivation or
import of genetically modified seed products and gene editing technology. In the United States and other countries that have
functioning regulatory systems, a rigorous scientific review is conducted by these agencies to demonstrate that genetically
modified and gene edited products are as safe as traditionally bred, non-biotech/GMO counterparts for food, feed and the
environment. Various countries in EMEA, Latin America, and Asia Pacific have banned GMOs entirely.
Regulation of Crop Protection Products
Globally, manufacturers of crop protection products, including herbicides, fungicides and insecticides are required to submit an
application/dossier and obtain government regulatory approval prior to selling products in a particular country. In the United
States, the EPA is responsible for registering and overseeing the approval and marketing of pesticides, pursuant to the FIFRA,
the FFDCA and the Food Quality Protection Act. Also, the USDA and the FDA monitor levels of pesticide residue that is
allowed on or in crops. Already registered pesticides are required to be re-registered every 15 years to ensure that those
products continue to meet the rigorous safety standards set by the regulators. The EPA reevaluates pesticide tolerances at least
every 10 years, taking into account ecological and human health risks, in addition to cumulative risks as a result of multiple
routes and sources of exposure.
Beginning in January 2022, before registering any new conventional pesticide active ingredient, the EPA evaluates the potential
effects on listed species and their designated critical habitats under the Endangered Species Act (the “ESA”). The EPA also has
initiated such evaluations for certain other active ingredients in response to existing or threatened litigation. Where the EPA
determines that a pesticide in the registration and re-evaluation processes “may affect” a listed species, the EPA must consult
with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service. As part of its approval, registration, and
reevaluation processes, the EPA may impose certain use restrictions on crop protection products under the ESA. Under the
10
ITEM 1. BUSINESS, continued
Part I
citizen suit provisions, the ESA also includes citizen suit provisions that allow the public to bring suit in court against federal
agencies when they believe a listed species is not being adequately protected by the EPA. FIFRA contains similar provisions
that allow the public to challenge an EPA’s registration decision. These lawsuits may subject products to additional use
limitations and labeling requirements and further studies, as well as result in registrations being revoked, in whole or in part.
The company's European operations are subject to the European chemical regulation REACH (“Registration, Evaluation,
Authorisation, and Restriction of Chemicals”) and the CLP (“Classification, Labeling, and Packaging of Substances and
Mixtures”). Other jurisdictions also have rigorous approval processes, procedures and scientific testing requirements for the
approval of crop protection products. We continue to monitor legislative and regulatory developments related to pollution and
other environmental health and safety matters.
Available Information
The company's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to
those reports are accessible on Corteva's website at http://investors.corteva.com by clicking on the section labeled "Financial
Information", then on "SEC Filings." These reports are made available, without charge, as soon as is reasonably practicable
after the company files or furnishes them electronically with the Securities and Exchange Commission. No portion of the
company's website mentioned in this report, or the materials contained on it, have been made part of this annual report on Form
10-K or incorporated herein by reference, unless such incorporation is specifically mentioned herein.
11
ITEM 1A. RISK FACTORS
Risks Related to our Industry
Part I
Corteva may not be able to obtain or maintain the necessary regulatory approvals for some of its products, including its
seed and crop protection products, which could restrict its ability to sell those products in some markets.
Regulatory and legislative requirements affect the development, manufacture and distribution of Corteva’s products, including
the testing and planting of seeds containing Corteva’s biotechnology traits and the import of crops grown from those seeds, and
non-compliance can harm Corteva’s sales and profitability.
Seed products incorporating biotechnology derived traits and crop protection products must be extensively tested for safety,
efficacy and environmental impact before they can be registered for production, use, sale or commercialization in a given
market. In certain jurisdictions, Corteva must periodically renew its approvals for both biotechnology and crop protection
products, which typically require Corteva to demonstrate compliance with then-current standards which generally are more
stringent since the prior registration. The regulatory approvals process is lengthy, costly, complex and in some markets
unpredictable, with requirements that can vary by product, technology, industry and country. The regulatory approvals process
for products that incorporate novel modes of action or new technologies can be particularly unpredictable and uncertain due to
the then-current state of regulatory guidelines and objectives, as well as governmental policy considerations and non-
governmental organization and other stakeholder considerations. The uncertainty and increased length of regulatory approvals
may reduce Corteva’s return on its research and development investments, and impede its ability to meet sales, profitability, or
sustainability metrics.
Furthermore, the detection of biotechnology traits or chemical residues from a crop protection product not approved in the
country in which Corteva sells or cultivates its product, or in a country to which Corteva imports its product, may affect
Corteva’s ability to supply or export its products, or even result in crop destruction, product recalls or trade disruption, which
could result in lawsuits and termination of licenses related to biotechnology traits and raw material supply agreements. Delays
in obtaining regulatory approvals to import, including those related to the importation of crops grown from seeds containing
certain traits or treated with specific chemicals, may influence the rate of adoption of new products in globally traded crops.
Additionally, the regulatory environment may be impacted by the activities of non-governmental organizations and special
interest groups and stakeholder reaction to actual or perceived impacts of new and existing technology, products or processes
on safety, health and the environment. Obtaining and maintaining regulatory approvals requires submitting a significant amount
of information and data, which may require participation from technology providers. Regulatory standards and trial procedures
are continuously changing. In addition, Corteva has seen an increase in recent years in the number of lawsuits filed by those
who identify themselves as public or environmental interest groups seeking to invalidate pesticide product registrations and/or
challenge the way federal or state governmental entities apply the rules and regulations governing pesticide produce use. The
pace of change together with the lack of regulatory harmony could result in unintended noncompliance. Responding to these
changes and meeting existing and new requirements may involve significant costs or capital expenditures or require changes in
business practice that could result in reduced profitability. The failure to receive necessary permits or approvals could have
near- and long-term effects on Corteva’s ability to produce and sell some current and future products.
The successful development and commercialization of Corteva's pipeline products will be necessary for Corteva's
growth.
Corteva uses advanced breeding technologies to produce hybrids and varieties with superior performance in farmers’ fields and
uses biotechnology to introduce traits that enhance specific characteristics of its crops. Corteva also uses advanced analytics,
software tools, mobile communications and new planting and monitoring equipment to provide agronomic recommendations to
growers. Additionally, Corteva conducts research into biological and chemical products to protect farmers’ crops from pests
and diseases and enhance plant productivity.
New product concepts may be abandoned for many reasons, including greater anticipated development costs, technical
difficulties, lack of efficacy, regulatory obstacles or inability to market under regulatory frameworks, competition, inability to
prove the original concept, lack of demand and the need to divert focus, from time to time, to other initiatives with perceived
opportunities for better returns. The processes of active ingredient development or discovery, breeding, biotechnology trait
discovery and development and trait integration are lengthy, and a very small percentage of the chemicals, genes and
germplasm Corteva tests is selected for commercialization. Furthermore, the length of time and the risk associated with the
breeding and biotech pipelines are interlinked because both are required as a package for commercial success in markets where
12
ITEM 1A. RISK FACTORS, continued
Part I
biotech traits are approved for growers, since seed hybrids and varieties could require modification to tolerate higher doses and/
or new varieties of herbicides and pesticides as weeds and insects develop resistance. Commercial transitions to the company’s
new technologies can take several years to complete, and weed and insect resistance may develop faster than Corteva can
respond with new technologies or enhancements to existing technologies. In countries where biotech traits are not approved for
widespread use, Corteva’s seed sales depend on the quality of its germplasm. While initial commercialization efforts have been
promising, there are no guarantees that anticipated levels of product acceptability within Corteva's markets will be achieved or
that higher quality products will not be developed by Corteva's competitors in the future.
Speed in discovering, developing, protecting and responding to new technologies, including artificial intelligence and new
technology-based distribution channels that accelerate Corteva’s product development timelines and could facilitate its ability
to engage with customers and end users, and bringing related products to market is a significant competitive advantage.
Commercial success frequently depends on being the first company to the market, and many of Corteva’s competitors are also
making considerable investments in similar new biotechnology products, improved germplasm products, biological and
chemical products and agronomic recommendation products.
The degree of public understanding and acceptance or perceived public acceptance of Corteva’s biotechnology and
other agricultural products and technologies can affect Corteva’s sales and results of operations by affecting planting
approvals, regulatory requirements and customer purchase decisions.
Concerns and claims regarding the safe use of seeds with biotechnology traits and crop protection products in general, and their
potential impact on health and the environment reflect a growing trend in societal demands for increasing levels of product
safety and environmental protection. These include concerns and claims that increased use of crop protection products, drift,
inversion, volatilization and the use of biotechnology traits meant to reduce the resistance of weeds or pests to control by crop
protection products, could increase or accelerate such resistance and otherwise negatively impact health and the environment.
These and other concerns could manifest themselves in stockholder proposals, preferred purchasing, delays or failures in
obtaining or retaining regulatory approvals, delayed product launches, lack of market acceptance, product discontinuation,
litigation, continued pressure for and adoption of more stringent regulatory intervention, termination of raw material supply
agreements and legal claims. These and other concerns could also influence public perceptions, the viability or continued sales
of certain of Corteva’s products, Corteva’s reputation and the cost to comply with regulations. As a result, such concerns could
have a material adverse effect on Corteva’s business, results of operations, financial condition and cash flows.
Changes in agricultural and related policies of governments and international organizations may prove unfavorable.
In many markets there are various pressures to reduce government subsidies to farmers, which may inhibit the growth in these
markets of products used in agriculture. In addition, government programs that create incentives for farmers, including those
established by the U.S. Farm Bill, may be modified or discontinued. However, it is difficult to predict accurately whether, and if
so when, such changes will occur. Corteva expects that the policies of governments and international organizations will
continue to affect the planting choices made by growers as well as the income available to growers to purchase products used in
agriculture and, accordingly, the operating results of the agriculture industry.
The costs of complying with evolving regulatory requirements could negatively impact Corteva’s business, results of
operations and financial condition. Actual or alleged violations of environmental laws or permit requirements could
result in restrictions or prohibitions on plant operations, substantial civil or criminal sanctions, as well as the assessment
of strict liability and/or joint and several liability.
Corteva is subject to extensive federal, state, local and foreign laws, regulations, rules and ordinances relating to pollution,
protection of the environment, waste water discharges, the generation, storage, handling, transportation, treatment, disposal and
remediation of hazardous substances and waste materials and the use of genetically modified seeds and crop protection active
ingredients by growers.
Environmental and health and safety laws, regulations and standards, including those with respect to PFAS and other
substances, expose Corteva to the risk of substantial costs and liabilities, including liabilities associated with Corteva’s business
and the discontinued and divested businesses and operations of EIDP. As is typical for businesses like Corteva’s, soil and
groundwater contamination has occurred in the past at certain sites and may be identified at other sites in the future. Disposal of
waste from Corteva’s business at off-site locations also exposes it to potential remediation costs. Consistent with past practice,
Corteva is continuing to monitor, investigate and remediate soil and groundwater contamination at several of these sites.
13
ITEM 1A. RISK FACTORS, continued
Part I
Costs and capital expenditures relating to environmental, health or safety matters are subject
to evolving regulatory
requirements and depend on the timing of the promulgation and enforcement of specific standards which impose the
requirements. Moreover, changes in environmental regulations, including those related to climate change, could inhibit or
interrupt Corteva’s operations, or require modifications to its facilities in the future. Accordingly, environmental, health or
safety regulatory matters could result in significant unanticipated costs or liabilities, which may be materially higher than
Corteva’s accruals.
Climate change and unpredictable seasonal and weather factors could impact Corteva’s sales and earnings.
The agriculture industry is subject to seasonal and weather factors, which can vary unpredictably from period to period.
Weather factors can affect the presence of disease and pests on a regional basis and, accordingly, can positively or adversely
affect the demand for crop protection products, including the mix of products used or the level of returns. The weather also can
affect supply chains and the quality, volume and cost of seed produced for sale as well as demand and product mix. Seed yields
can be higher or lower than planned, which could lead to higher inventory and related write-offs. Climate change may increase
the frequency or intensity of extreme weather such as storms, floods, heat waves, droughts and other events that could affect the
quality, volume and cost of seed produced for sale as well as demand and product mix. Climate change may also affect the
availability and suitability of arable land and contribute to unpredictable shifts in the average growing season and types of crops
produced.
Corteva’s business is subject to various competition and antitrust, rules and regulations around the world, and as the
size of its business grows, scrutiny of its business by legislators and regulators in these areas may intensify.
On July 9, 2021, President Biden issued an executive order promoting competition in the American economy. The order
encouraged further examination and efforts by U.S. regulatory agencies to avoid market concentrations for agricultural inputs,
that could challenge the survival of family farms. The executive order also directs the U.S. Secretary of Agriculture to take
action to ensure that the intellectual property system, while still incentivizing innovation, does not also unnecessarily reduce
competition in seed and other agricultural input markets beyond what is reasonably contemplated by the U.S. Patent Act and
propose strategies for addressing those concerns across intellectual property, antitrust, and other relevant laws. While the
ultimate impact of the executive order will depend on the actions ultimately resulting from the U.S. regulatory authorities,
actions taken by such authorities may increase the regulation and regulatory costs associated with the agriculture industry in the
future and restrict the company from pursuing certain growth opportunities, including mergers and acquisitions.
Scrutiny from regulators in the U.S. and abroad may intensify as Corteva’s business presence grows. This scrutiny and related
investigations, even when not resulting in an enforcement action, may result in damage to a company’s reputation, significant
defense expense, as well as become a distraction to management. Antitrust and competition enforcement actions, including the
current FTC and related state attorney general lawsuits pending against Corteva, may result in regulators imposing fines,
penalties, or restrictions on a company’s business practices in a manner that may significantly impact its results of operations.
Corteva participates in an industry that is highly competitive and has undergone consolidation, which could increase
competitive pressures.
Corteva currently faces significant competition in the markets in which it operates. In most segments of the market, the number
of products available to the grower is steadily increasing as new products are introduced. At the same time, certain products are
coming off patent and are thus available to generic manufacturers for production and commercialization. Upon the loss or
expiration of patent protection for one of Corteva’s products or of a product that Corteva licenses, or upon the “at- risk” launch
(despite pending patent infringement litigation against the generic product) by a generic manufacturer of a generic version of
one of Corteva’s patented products or of a product that Corteva licenses, Corteva can lose a major portion of revenues for that
product, which can have a material adverse effect on Corteva’s business. Additionally, data analytic tools and web-based new
direct purchase models offer increased transparency and comparability, which creates price pressures. Corteva cannot predict
the pricing or promotional actions of its competitors. Aggressive marketing or pricing by Corteva’s competitors could adversely
affect Corteva’s business, results of operations and financial conditions. As a result, Corteva continues to face significant
competitive challenges.
14
ITEM 1A. RISK FACTORS, continued
Part I
Corteva’s sales to its customers may be adversely affected should a company successfully establish an intermediary
platform for the sale of Corteva’s products or otherwise position itself between Corteva and its customers.
Corteva services customers in part through the Pioneer direct sales channel in key agricultural geographies, including the
United States. In addition, Corteva supplements this approach with strong retail channels, including distributors, agricultural
cooperatives and dealers, and with digital and data solutions that assist farmer decision-making with a view to optimize their
product selection and maximize their yield and profitability. While Corteva expects its indirect channels will extend its reach
and increase exposure of its products to other potential customers, including smaller farmers or farmers in less concentrated
areas, there can be no assurance that Corteva will be successful in this regard. If a competitor were to successfully establish an
intermediary platform for distribution of Corteva’s products, it may disrupt Corteva’s distribution model and inhibit Corteva’s
ability to provide a complete go-to-market strategy covering the direct, dealer and retail channels. In such a circumstance,
Corteva’s sales may be adversely affected.
Risks Related to Our Operations
Corteva is dependent on its relationships or contracts with third parties with respect to certain of its raw materials or
licenses and commercialization.
limited to, supply agreements,
Corteva is dependent on third parties in the research, development and commercialization of its products and enters into
transactions including, but not
licensing agreements, and manufacturing agreements in
connection with Corteva’s business. The majority of Corteva’s corn hybrids and soybean varieties sold to customers contain
biotechnology traits that Corteva licenses from third parties under long-term licenses. If Corteva loses its rights under such
licenses, it could negatively impact Corteva’s ability to obtain future licenses on competitive terms, commercialize new
products and generate sales from existing products. Corteva may elect to out-license its technology, including germplasm.
There can be no guarantee that such out-licensing will not ultimately strengthen Corteva’s competition thereby adversely
impacting Corteva’s results of operations.
While Corteva relies heavily on third parties for multiple aspects of its business and commercialization activities, Corteva does
not control many aspects of such third parties’ activities. Third parties may not complete activities on schedule or in accordance
with Corteva’s expectations. Failure by one or more of these third parties to meet their contractual or other obligations to
Corteva or to comply with applicable laws or regulations, or any disruption in the relationship between Corteva and one or
more of these third parties could delay or prevent the development, approval or commercialization of Corteva’s products and
could also result in non-compliance or reputational harm, all with potential negative implications for Corteva’s business.
In addition, Corteva’s agreements with third parties may obligate it to meet certain contractual or other obligations to third
parties. For example, Corteva may be obligated to meet certain thresholds or abide by certain boundary conditions. If Corteva
were to fail to meet such obligations to the third parties, its relationship with such third parties may be disrupted. Such a
disruption could negatively impact certain of Corteva’s licenses on which it depends, could cause reputational harm, and could
negatively affect Corteva’s business, results of operations and financial condition.
Volatility in Corteva’s input costs, which include raw materials and production costs, could have a significant impact on
Corteva’s business, results of operations and financial condition.
Corteva’s input costs are variable based on the costs associated with production or with raw materials Corteva uses. For
example, Corteva’s production costs vary, especially on a seasonal basis where changes in weather influence supply and
demand. In addition, Corteva’s manufacturing processes consume significant amounts of raw materials, the costs of which are
subject to worldwide supply and demand as well as other factors beyond Corteva’s control. Corteva refers to these costs
collectively as input costs. Significant variations in input costs affect Corteva’s operating results from period to period.
When possible, Corteva purchases raw materials through negotiated long-term contracts to minimize the impact of price
fluctuations. Corteva also enters into over-the-counter and exchange traded derivative commodity instruments to hedge its
exposure to price fluctuations on certain purchases. In addition, Corteva takes actions to offset the effects of higher input costs
through selling price increases, productivity improvements and cost reduction programs. Success in offsetting higher input costs
with price increases is largely influenced by competitive and economic conditions and could vary significantly depending on
the market served. If Corteva is not able to fully offset the effects of higher input costs, it could have a significant impact on its
financial results.
15
ITEM 1A. RISK FACTORS, continued
Part I
Our business, financial condition and results of operations could be materially affected by disruptions in the global
economy caused by geopolitical and military conflicts.
The global economy has been negatively impacted by the military conflict between Russia and Ukraine. While we have
concluded our business activities in Russia, we have experienced shortages in materials, the inability to insure shipments, and
increased costs for transportation, energy, and raw material and other inputs due in part to the negative impact of the Russia-
Ukraine military conflict on the global economy. Further escalation of the military conflict or related geopolitical tensions,
including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, further
supply disruptions, and changes to foreign exchange rates and financial markets, any of which may adversely affect our
business and supply chains. Such geopolitical instability and uncertainty has negatively impacted our ability to sell to, ship
products to, collect payments from, and support customers in certain regions. Logistics restrictions, including closures of air
space and shipping ports, the reduction of the availability of farmable land, and the destruction of facilities could further
increase these adverse impacts and negatively impact demand for our products in the region.
Similar or more severe disruptions, trade barriers, business risks, asset seizures, and volatility in foreign exchange and financial
markets could occur if tensions or conflicts between China and Taiwan, or other countries, escalate, or if the United States
would become a party to such a military conflict. Currently, a material portion of the company’s crop protection inputs are
sourced directly or indirectly from China. While the company utilizes dual- or multi- source supply chains to minimize business
disruptions, these strategies may not be adequate to address the scope of disruptions created by such a conflict. Further
escalation or expansion of economic disruption or in the scope of global or regional conflicts could have a material adverse
effect on our results of operations.
Corteva’s business, results of operations and financial condition could be adversely affected by environmental, litigation
and other commitments and contingencies.
As a result of Corteva’s operations, including past operations and those related to divested businesses and discontinued
operations of EIDP, Corteva incurs environmental operating costs for pollution abatement activities including waste collection
and disposal, installation and maintenance of air pollution controls and wastewater treatment, emissions testing and monitoring
and obtaining permits. Corteva also incurs environmental operating costs related to environmental related research and
development activities including environmental field and treatment studies as well as toxicity and degradation testing to
evaluate the environmental impact of products and raw materials. In addition, Corteva maintains and periodically reviews and
adjusts its accruals for probable environmental remediation and restoration costs.
Corteva expects to continue to incur environmental operating costs since it will operate global manufacturing, product handling
and distribution facilities that are subject to a broad array of environmental laws and regulations. These rules are subject to
change by the implementing governmental agency, which Corteva monitors closely. Corteva’s environmental policy requires
that its operations fully meet or exceed legal and regulatory requirements. In addition, Corteva expects to continue certain
voluntary programs, and could consider additional voluntary actions, to reduce air emissions, minimize the generation of
hazardous waste, decrease the volume of water use and discharges, increase the efficiency of energy use and reduce the
generation of persistent, bioaccumulative and toxic materials. Costs to comply with complex environmental
laws and
regulations, as well as internal voluntary programs and goals, are significant and Corteva expects these costs will continue to be
significant for the foreseeable future. Over the long-term, such expenditures are subject to considerable uncertainty and could
fluctuate significantly.
Corteva accrues for environmental matters when it is probable that a liability has been incurred and the amount can be
reasonably estimated. As remediation activities vary substantially in duration and cost from site to site, it is difficult to develop
precise estimates of future site remediation costs. Corteva expects to base such estimates on several factors, including the
complexity of the geology, the nature and extent of contamination, the type of remedy, the outcome of discussions with
regulatory agencies and other Potentially Responsible Parties (“PRPs”) at multi-party sites and the number of, and financial
viability of, other PRPs. Considerable uncertainty exists with respect to environmental remediation costs and, under adverse
changes in circumstances, the potential liability may be materially higher than Corteva’s accruals.
Corteva faces risks arising from various unasserted and asserted litigation matters arising out of the normal course of its current
and former business operations, including intellectual property, commercial, product liability, environmental and antitrust
lawsuits. Corteva has noted a trend in public and private suits being filed on behalf of states, counties, cities and utilities
16
ITEM 1A. RISK FACTORS, continued
Part I
alleging harm to the general public and the environment, including waterways and watersheds. Claims alleging harm to the
public and the environment may be brought against Corteva, notwithstanding years of scientific evidence and regulatory
determinations supporting the safety of crop protection products. The litigation involving Monsanto’s Roundup® non-selective
glyphosate containing weedkiller products has resulted in negative publicity and sentiment and may lead to similar suits with
respect to glyphosate-containing products and/or other established crop protection products. Claims and allegations that
Corteva’s products or products that Corteva manufactures or markets on behalf of third parties are not safe could result in
litigation, damage to Corteva’s reputation and have a material adverse effect on Corteva’s business. It is not possible to predict
the outcome of these various proceedings and any potential impact on Corteva. An adverse outcome in any one or more of these
matters may result in losses not fully covered by Corteva's insurance policies, and could be material to Corteva's financial
results. Various factors or developments can lead to changes in current estimates of liabilities. Such factors and developments
may include, but are not limited to, additional data, safety or risk assessments, as well as a final adverse judgment, significant
settlement or changes in applicable law. A future adverse ruling or unfavorable development could result in future charges that
could have a material adverse effect on Corteva.
The company, pursuant to the respective Separation Agreements, is entitled to cost sharing and indemnification from
Chemours, Dow and DuPont, as applicable, for certain litigation, environmental, workers’ compensation and other liabilities
related to its historical operations. In connection with the recognition of liabilities related to these matters, Corteva records an
indemnification asset when recovery is deemed probable. These estimates of recovery are subject to various factors and
developments that could result in differences from future estimates or the actual recovery. As of December 31, 2023, the
indemnification assets pursuant to the Chemours Separation Agreement and the Corteva Separation Agreement are in aggregate
$104 million within accounts and notes receivable - net and $366 million within other assets in the company’s Consolidated
Balance Sheet. Any failure by, or inability to pay, these liabilities in line with the indemnification provisions of the Separation
Agreements may have a material adverse effect on Corteva and its financial condition and results of operations.
In the ordinary course of business, Corteva may make certain commitments, including representations, warranties and
indemnities relating to current and past operations, including those related to divested businesses and issue guarantees of third-
party obligations. If Corteva were required to make payments as a result, they could exceed the amounts accrued, thereby
adversely affecting Corteva’s financial condition and results of operations.
Corteva’s operations outside the United States are subject to risks and restrictions, which could negatively affect
Corteva’s business, results of operations and financial condition.
Corteva’s operations outside the United States are subject to risks and restrictions, including fluctuations in foreign-currency
exchange rates; inflation; exchange and price control regulations; corruption risks; competitive restrictions; changes in local
political or economic conditions; import and trade restrictions; import or export licensing requirements and trade policy; and
other potentially detrimental domestic and foreign governmental practices or policies affecting U.S. companies doing business
abroad. In addition, Corteva’s international operations are sometimes in countries with unstable governments, economic or
fiscal challenges, military or political conflicts, local epidemics or pandemics, significant levels of crime and organized crime,
or developing legal systems. This may increase the risk to the company's employees, subcontractors or other parties, and to
other liabilities, such as property loss or damage to the company's products, and may affect Corteva's ability to safely operate
in, or import into, or receive raw materials from these countries.
Additionally, Corteva’s ability to export its products and its sales outside the United States has been, and may continue to be
adversely affected by significant changes in trade, tax or other policies, including the risk that other countries may retaliate
through the imposition of their own trade restrictions and/or increased tariffs in response to substantial changes to U.S. trade
and tax policies.
Although Corteva has operations throughout the world, Corteva’s sales outside the United States in 2023 were principally to
customers in Brazil, Eurozone countries, and Canada. Further, Corteva’s largest currency exposures are the Brazilian Real,
Canadian dollar, South African Rand, Swiss franc, European Euro ("EUR") and Argentine peso. Inflation, market uncertainty or
an economic downturn in these geographic areas could reduce demand for Corteva’s products and result in decreased sales
volume, which could have a negative impact on Corteva’s results of operations. In addition, changes in exchange rates may
affect Corteva’s results of operations, financial condition and cash flows in future periods. Corteva actively manages currency
exposures that are associated with net monetary asset positions and committed purchases.
17
ITEM 1A. RISK FACTORS, continued
Part I
Failure to effectively manage acquisitions, divestitures, alliances, restructurings, cost savings initiatives and other
portfolio actions may not have the results anticipated.
From time to time Corteva evaluates acquisition candidates that may strategically fit Corteva’s business and/or growth
objectives. If Corteva is unable to successfully integrate and develop acquired businesses, including its acquisitions and growth
in biologicals, Corteva could fail to achieve expected increases in revenues and operating results, as well as anticipated
synergies and cost savings which could have a material adverse effect on Corteva’s financial results. Corteva continually
reviews its portfolio of assets for contributions to its objectives and alignment with its strategy. However, Corteva may not be
successful in separating underperforming or non-strategic assets and gains or losses on the divestiture of, or lost operating
income from, such assets, which may affect Corteva’s earnings. Moreover, Corteva might incur asset impairment charges
related to acquisitions or divestitures that reduce its earnings. In addition, if the execution of these transactions, initiatives, or
portfolio actions is not successful, it could adversely impact Corteva’s financial condition, cash flows and results of operations.
Corteva’s business, results of operations and financial condition could be adversely affected by industrial espionage and
other disruptions to its supply chain, information technology or network systems.
Business and/or supply chain disruptions, plant and/or power outages and information technology system and/or network
disruptions, regardless of cause including acts of sabotage, employee error or other actions, geo-political activity, military
conflict, local epidemics or pandemics, weather events and natural disasters could seriously harm Corteva’s operations as well
as the operations of its customers and suppliers. For example, a pandemic in locations where Corteva has significant operations,
sales, or key suppliers could have a material adverse effect on Corteva’s results of operations. In addition, terrorist attacks and
natural disasters have increased stakeholder concerns about the security and safety of chemical production and distribution.
Business and/or supply chain disruptions may also be caused by security breaches, which could include, for example,
ransomware attacks and attacks on information technology and infrastructure by hackers, viruses, breaches due to employee
error or actions or other disruptions. Corteva and/or its suppliers may fail to effectively prevent, detect and recover from these
or other security breaches and, as a consequence, such breaches could result in misuse of Corteva’s assets, business disruptions,
loss of property including trade secrets and confidential business information, legal claims or proceedings, reporting errors,
processing inefficiencies, negative media attention, loss of sales and interference with regulatory and data privacy compliance.
Like most major corporations, Corteva is the target of industrial espionage, including cyber-attacks, from time to time. Corteva
has determined that these incidents have resulted, and could result in the future, in unauthorized parties gaining access to certain
confidential business information. However, to date, Corteva has not experienced any material financial impact, changes in the
competitive environment or impact on business operations from these events. Although management does not believe that
Corteva has experienced any material
including
cybersecurity incidents, there can be no assurance that Corteva will not suffer such losses in the future.
losses to date related to industrial espionage and security breaches,
Corteva actively manages the risks within its control that could lead to business disruptions and security breaches. As these
threats continue to evolve, particularly around cybersecurity and artificial intelligence, Corteva may be required to expend
significant resources to enhance its control environment, processes, practices and other protective measures. Despite these
efforts, such events could also have a material adverse effect on Corteva’s business, financial condition, results of operations
and reputation. Additionally, any losses from such an event may be excluded from, or in excess of the coverages provided by
Corteva's insurance policies.
Corteva’s customers may be unable to pay their debts to Corteva, which could adversely affect Corteva’s results.
Corteva offers its customers financing programs with credit terms generally less than one year from invoicing in alignment with
the growing season. Due to these credit practices as well as the seasonality of Corteva’s operations, Corteva may need to issue
short-term debt at certain times of the year to fund its cash flow requirements. Corteva’s customers may be exposed to a variety
of conditions that could adversely affect their ability to pay their debts. For example, customers in economies experiencing an
economic downturn or in a region experiencing adverse growing conditions may be unable to repay their obligations to
Corteva, which could adversely affect Corteva’s results.
18
ITEM 1A. RISK FACTORS, continued
Part I
Corteva’s liquidity, business, results of operations and financial condition could be impaired if it is unable to raise
capital through the capital markets or short-term debt borrowings.
Any limitation on Corteva’s ability to raise money in the capital markets or through short-term debt borrowings could have a
substantial negative effect on Corteva’s liquidity. Corteva’s ability to affordably access the capital markets and/or borrow short-
term debt in amounts adequate to finance its activities could be impaired as a result of a variety of factors, including factors that
are not specific to Corteva, such as a severe disruption of the financial markets and, in the case of debt securities or borrowings,
interest rate fluctuations. Due to the seasonality of Corteva’s business and the credit programs Corteva may offer its customers,
net working capital investment and corresponding debt levels will fluctuate over the course of the year.
Corteva regularly extends credit to its customers to enable them to purchase seeds or crop protection products at the beginning
of the growing season. The customer receivables may be used as collateral for short-term financing programs. Any material
adverse effect upon Corteva’s ability to own or sell such customer receivables, including seasonal factors that may impact the
amount of customer receivables Corteva owns, may materially impact Corteva’s access to capital.
Corteva has additional agreements with financial institutions to establish programs that provide financing for select customers
of Corteva’s seed and crop protection products in the United States, Latin America, Europe and Asia. The programs are
renewed on an annual basis. In most cases, Corteva guarantees the extension of such credit to such customers. If Corteva is
unable to renew these agreements or access the debt markets to support customer financing, Corteva’s sales may be negatively
impacted, which could result in increased borrowing needs to fund working capital.
Corteva’s earnings, operations and business, among other things, will impact its credit ratings, costs and availability of
financing. There can be no assurance that Corteva or EIDP will maintain its current or prospective credit ratings. A decrease in
the ratings assigned to Corteva or EIDP by the ratings agencies may negatively impact Corteva’s liquidity, access to the debt
capital markets and increase Corteva’s cost of borrowing and the financing of its seasonal working capital.
Increases in pension and other post-employment benefit plan funding obligations may adversely affect Corteva’s results
of operations, liquidity or financial condition.
Through Corteva's ownership of EIDP, Corteva maintains EIDP defined benefit pension and other post-employment benefit
plans. For some of these plans, including EIDP’s principal U.S. pension plan, Corteva continues as sponsor for the entire plan
regardless of whether participants, including retirees, are or were associated with EIDP’s agriculture business. Corteva uses
many assumptions in calculating its expected future payment obligations under these plans. Significant adverse changes in
credit or market conditions could result in actual rates of returns on pension investments being lower than assumed. In addition,
expected future payment obligations may be adversely impacted by changes in assumptions regarding participants, including
retirees. In 2024, Corteva expects to contribute approximately $50 million to its pension plans other than the principal U.S.
pension plan, and about $115 million for its other post-employment benefit ("OPEB") plans. While not anticipated for 2024,
Corteva may make potential discretionary contributions to the principal U.S. pension plan. Corteva, furthermore, may be
required to make significant contributions to its pension plans in the future, which could adversely affect Corteva’s results of
operations, liquidity and financial condition.
Sentiment towards climate change and other environmental, social and governance matters could adversely affect our
stock price, results of operations, and access to capital.
Since 2020, Corteva has maintained certain commitments, aspirations, targets and initiatives as part of its sustainability
programs. Execution of these strategies and the achievements of Corteva’s sustainability aspirations and goals are subject to
risk and uncertainties, many of which are out of its control. Failure to achieve its sustainability aspirations and goals within the
currently projected costs and expected timeframes could damage Corteva’s reputation, customer and investor relationships, or
its access to financing. Further, given investors' increased focus related to sustainability matters, such a failure could cause
stockholders to reduce their ownership holdings, all of which, in turn could adversely affect Corteva’s business, financial
condition, results of operations and cash flows and reduce its stock price.
19
ITEM 1A. RISK FACTORS, continued
Part I
Global or regional health pandemics or epidemics could negatively impact the company's business, financial condition
and results of operations.
Corteva's business, financial condition, and results of operations could be negatively impacted by pandemics or epidemics. The
severity, magnitude and duration of the pandemics is uncertain, rapidly changing and difficult to predict. Future pandemics or
epidemics and resulting illness, travel restrictions and workforce disruptions could impact Corteva's global supply chain, its
operations and its routes to market or those of its suppliers, co-manufacturers, or customers/distributors. These disruptions or
the company's failure to effectively respond to them could increase product or distribution costs, alter the timing of recognizing
manufacturing costs, or impact the delivery of products to customers or their ability to pay.
Government-pandemic or epidemic responses, including stay at home orders, can significantly impact other economic activity
and markets around the world. Future outbreaks or pandemics could negatively impact the company's business, financial
condition, and results of operations in numerous ways, including but not limited to increased market volatility that impacts the
company's hedging, financial forecasting, and liquidity, including its access to capital markets and delays or modifications to
the company's strategic plans and productivity initiatives.
Risks Related to Our Intellectual Property
Enforcing Corteva’s intellectual property rights, or defending against intellectual property claims asserted by others,
could materially affect Corteva’s business, results of operations and financial condition.
Intellectual property rights, including patents, plant variety protection, trade secrets, confidential information, trademarks, trade
names and other forms of trade dress, are important to Corteva’s business. Corteva endeavors to protect its intellectual property
rights in jurisdictions in which its products are produced or used and in jurisdictions into which its products are imported.
However, Corteva may be unable to obtain protection for its intellectual property in key jurisdictions. Further, changes in
government policies and regulations, including changes made in reaction to pressure from non-governmental organizations, or
the public generally, could impact the extent of intellectual property protection afforded by such jurisdictions.
Corteva has designed and implemented internal controls to restrict use of, access to and distribution of its intellectual property.
Despite these precautions, Corteva’s intellectual property is vulnerable to infringement, misappropriation and other
unauthorized access, including through employee or licensee error or actions, theft and cybersecurity incidents, and other
security breaches. When unauthorized access and use or counterfeit products are discovered, Corteva reports such situations to
governmental authorities for investigation, as appropriate, and takes measures to mitigate any potential impact. Protecting
intellectual property related to biotechnology is particularly challenging because theft is difficult to detect and biotechnology
can be self-replicating.
Competitors are increasingly challenging intellectual property positions and the outcomes can be highly uncertain. Third parties
may claim Corteva’s products violate their intellectual property rights. Defending such claims, even those without merit, could
be time-consuming and expensive. In addition, any such claim could result in Corteva’s having to enter into license agreements,
develop non-infringing products or engage in litigation that could be costly. If challenges are resolved adversely, it could
negatively impact Corteva’s ability to obtain licenses on competitive terms, develop and commercialize new products and
generate sales from existing products.
In addition, because of the rapid pace of technological change, the confidentiality of patent applications in some jurisdictions
and/or the uncertainty in predicting the outcome of complex proceedings relating to ownership and the scope of patents relating
to certain emerging technologies, competitors may be issued patents related to Corteva’s business unexpectedly. These patents
could reduce the value of Corteva’s commercial or pipeline products or, to the extent they cover key technologies on which
Corteva has relied, require Corteva to seek to obtain licenses (and Corteva cannot ensure it would be able to obtain such a
license on acceptable terms) or cease using the technology, no matter how valuable to Corteva’s business.
Legislation and jurisprudence on patent protection is evolving and changes in laws could affect Corteva’s ability to obtain or
maintain patent protection for, and otherwise enforce Corteva’s patents related to, its products.
20
ITEM 1A. RISK FACTORS, continued
Corteva’s business may be adversely affected by the availability of counterfeit products.
Part I
A counterfeit product is one that has been deliberately and fraudulently mislabeled as to its identity and source. A counterfeit
Corteva product, therefore, is one manufactured by someone other than Corteva, but which appears to be the same as an
authentic Corteva product. The prevalence of counterfeit products is a significant and growing industry-wide issue due to a
variety of factors, including, but not limited to, the following: the widespread use of the Internet, which has greatly facilitated
the ease by which counterfeit products can be advertised, purchased and delivered to individual consumers; the availability of
sophisticated technology that makes it easier for counterfeiters to make counterfeit products; and the relatively modest risk of
penalties faced by counterfeiters compared to the large profits that can be earned by them from the sale of counterfeit products.
Further, laws against counterfeiting vary greatly from country to country, and the enforcement of existing laws varies greatly
from jurisdiction to jurisdiction. For example, in some countries, counterfeiting is not a crime; in others, it may result in only
minimal sanctions. In addition, those involved in the distribution of counterfeit products use complex transport routes to evade
customs controls by disguising the true source of their products.
Corteva’s global reputation makes its products prime targets for counterfeiting organizations. Counterfeit products pose a risk
to consumer health and safety because of the conditions under which they are manufactured (often in unregulated, unlicensed,
uninspected and unsanitary sites) as well as the lack of regulation of their contents. Failure to mitigate the threat of counterfeit
products, which is exacerbated by the complexity of the supply chain, could adversely impact Corteva’s business by, among
other things, causing the loss of consumer confidence in Corteva’s name and in the integrity of its products, potentially
resulting in lost sales and an increased threat of litigation.
Corteva undertakes significant efforts to counteract the threats associated with counterfeit products, including, among other
things, working with regulatory authorities and multinational coalitions to combat the counterfeiting of products and supporting
efforts by law enforcement authorities to prosecute counterfeiters; assessing new and existing technologies to seek to make it
more difficult for counterfeiters to copy Corteva’s products and easier for consumers to distinguish authentic from counterfeit
products; working diligently to raise public awareness about the dangers of counterfeit products; working collaboratively with
wholesalers, customs offices and law enforcement agencies to increase inspection coverage, monitor distribution channels and
improve surveillance of distributors; and working with other members of an international trade association of agrochemical
companies to promote initiatives to combat counterfeiting activity. No assurance can be given, however, that Corteva’s efforts
and the efforts of others will be entirely successful, and the presence of counterfeit products may continue to increase.
Restrictions under the intellectual property cross-license agreements limit Corteva’s ability to develop and
commercialize certain products and services and/or prosecute, maintain and enforce certain intellectual property.
The company is dependent to a certain extent on DuPont and Dow to maintain and enforce certain of the intellectual property
licensed under the Intellectual Property Cross-License Agreements. For example, DuPont and Dow are responsible for filing,
prosecuting and maintaining (at their respective discretion) patents on trade secrets and know-how that they each respectively
license to Corteva. They also have the first right to enforce their respective trade secrets and know-how licensed to Corteva. If
DuPont or Dow, as applicable, fails to fulfill its obligations or chooses to not enforce the licensed patents, trade secrets or
know-how under the Intellectual Property Cross-License Agreements, the company may not be able to prevent competitors
from making, using and selling competitive products and services.
In addition, Corteva’s use of the intellectual property licensed to it under the Intellectual Property Cross-License Agreements is
restricted to certain fields, which could limit Corteva’s ability to develop and commercialize certain products and services. For
example, the licenses granted to Corteva under the agreement will not extend to all fields of use that the company may decide to
enter into in the future. These restrictions may make it more difficult, time consuming and/or expensive for Corteva to develop
and commercialize certain new products and services, or may result in certain of its products or services being later to market
than those of its competitors.
21
ITEM 1A. RISK FACTORS, continued
Risks Related to The Separation
Part I
In connection with the Separation the company has assumed, and agreed to indemnify DuPont and Dow for, certain
liabilities. If the company is required to make payments pursuant to these indemnities, the company may need to divert
cash to meet those obligations and its financial results could be negatively impacted. In addition, DuPont and Dow will
indemnify Corteva for certain liabilities. These indemnities may not be sufficient to insure the company against the full
amount of liabilities it incurs, and DuPont and/or Dow, and/or their historical separated businesses, may not be able to
satisfy their indemnification obligations in the future.
Pursuant to the Separation Agreement, the Employee Matters Agreement and the Tax Matters Agreement with DuPont and
Dow, the company agreed to assume, and indemnify DuPont and Dow for, certain liabilities for uncapped amounts, which may
include, among other items, associated defense costs, settlement amounts and judgments, as discussed further in Note 15 -
Commitments and Contingent Liabilities, to the Consolidated Financial Statements and Part I - Item 3 - Legal Proceedings.
Payments pursuant to these indemnities may be significant and could negatively impact the company’s business, particularly
indemnities relating to certain litigation for Historical DuPont operations or its actions that could impact the tax-free nature of
the Corteva Distribution. Third parties could also seek to hold the company responsible for any of the liabilities allocated to
DuPont and Dow, including those related to DowDuPont’s specialty products and/or materials science businesses, respectively,
and those related to discontinued and/or divested businesses and operations of Historical Dow, which have been allocated to
Dow. DuPont and/or Dow, as applicable, will agree to indemnify Corteva for such liabilities, but such indemnities may not be
sufficient to protect the company against the full amount of such liabilities. In addition, DuPont and/or Dow, as applicable, may
not be able to fully satisfy their indemnification obligations with respect to the liabilities the company incurs. Even if the
company ultimately succeeds in recovering from DuPont and/or Dow, as applicable, any amounts for which the company is
held liable, the company may be temporarily required to bear these losses itself. Each of these risks could negatively affect the
company’s business, financial condition, results of operations and cash flows.
Additionally, the company generally has assumed and is responsible for the payment of its share of (i) certain liabilities of
DowDuPont relating to, arising out of or resulting from certain general corporate matters of DowDuPont, (ii) certain liabilities
of Historical DuPont relating to, arising out of or resulting from general corporate matters of Historical DuPont and
discontinued and/or divested businesses and operations of Historical DuPont, including its spin-off of Chemours, and (iii)
certain separation expenses not otherwise allocated to DuPont or Dow (or allocated specifically to Corteva) pursuant to the
Corteva Separation Agreement, and third parties could seek to hold Corteva responsible for DuPont’s or Dow’s share of any
such liabilities. For more information, see Note 15 - Commitments and Contingent Liabilities, to the Consolidated Financial
Statements and Part I - Item 3 - Legal Proceedings. DuPont and/or Dow, as applicable, will indemnify Corteva for their share of
any such liabilities; however, such indemnities may not be sufficient to protect Corteva against the full amount of such
liabilities, and/or DuPont and/or Dow may not be able to fully satisfy their respective indemnification obligations. In addition,
even if the company ultimately succeeds in recovering from DuPont and/or Dow any amounts for which the company is held
liable in excess of its agreed share, the company may be temporarily required to bear these losses itself and may not be able to
fully insure itself to cover these risks. Each of these risks could materially affect the company’s business, financial condition,
results of operations and cash flows.
The Separation and related transactions may expose Corteva to potential liabilities arising out of state and federal
fraudulent conveyance laws
Although the company received a solvency opinion from an investment bank confirming that the company and DuPont were
each adequately capitalized following the Distribution, the Separation could be challenged under various state and federal
fraudulent conveyance laws. In connection with fraudulent conveyances or transfers are generally defined to include transfers
made or obligations incurred with the actual intent to hinder, delay or defraud current or future creditors or transfers made or
obligations incurred for less than reasonably equivalent value when the debtor was insolvent, or that rendered the debtor
insolvent, inadequately capitalized or unable to pay its debts as they become due. Any unpaid creditor could claim that DuPont
did not receive fair consideration or reasonably equivalent value in the Separation and Corteva Distribution, and that the
Separation and Corteva Distribution left DuPont insolvent or with unreasonably small capital or that DuPont intended or
believed it would incur debts beyond its ability to pay such debts as they matured. Additionally, under its indemnity provisions
of the Separation Agreement, the company could find its liabilities increased as a result of a court concluding that Historical
DuPont, Historical Dow or DowDuPont executed a fraudulent conveyance in connection with divestitures and spin-offs of any
one of their historical operations, including Chemours. If a court were to agree with such a plaintiff, then such court could void
the Separation and Distribution as a fraudulent transfer or impose substantial liabilities on Corteva, which could materially
22
ITEM 1A. RISK FACTORS, continued
Part I
adversely affect its financial condition and results of operations. Among other things, the court could return some of Corteva’s
assets or shares of Corteva common stock to DuPont, provide DuPont with a claim for money damages against Corteva in an
amount equal to the difference between the consideration received by DuPont and the fair market value of Corteva at the time
of the Corteva Distribution, or require Corteva to fund liabilities of other companies involved in the Internal Reorganization for
the benefit of creditors.
The Distribution is also subject to review under state corporate Distribution statutes. Under the Delaware General Corporation
Law (the “DGCL”), a corporation may only pay dividends to its stockholders either (i) out of its surplus (net assets minus
capital) or (ii) if there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year. Although the Distribution was made out of DowDuPont’s surplus and the company received an opinion
that DowDuPont has adequate surplus under Delaware law to declare the dividend of Corteva common stock in connection with
the Corteva Distribution, there can be no assurance that a court will not later determine that some or all of the Corteva
Distribution was unlawful.
The company is subject to continuing contingent tax-related liabilities of DowDuPont following the Distribution.
There are several significant areas where the liabilities of DowDuPont may become Corteva’s obligations either in whole or in
part. For example, under the Code and the related rules and regulations, each corporation that was a member of DowDuPont’s
consolidated tax reporting group during any taxable period or portion of any taxable period ending on or before the effective
time of the Distribution is jointly and severally liable for the U.S. federal income tax liability of the entire consolidated tax
reporting group for such taxable period. Additionally, to the extent that any subsidiary of Corteva was included in the
consolidated tax reporting group of either Historical DuPont or Historical Dow for any taxable period or portion of any taxable
period ending on or before the effective date of the Merger, such subsidiary is jointly and severally liable for the U.S. federal
income tax liability of the entire consolidated tax reporting group of Historical DuPont or Historical Dow, as applicable, for
such taxable period. In connection with the Distributions, on April 1, 2019, the company entered into the Tax Matters
Agreement with DuPont and Dow that allocates the responsibility for prior period consolidated taxes among Corteva, DuPont
and Dow. If DuPont or Dow were unable to pay any prior period taxes for which it is responsible, however, the company could
be required to pay the entire amount of such taxes, and such amounts could be significant. Other provisions of federal, state,
local, or foreign law may establish similar liability for other matters, including laws governing tax-qualified pension plans, as
well as other contingent liabilities.
23
Part I
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management and Strategy. The company’s risk management programs for cybersecurity are integrated into the company’s
enterprise risk management and general compliance programs and processes.
Our cybersecurity program utilizes a layered, defense-in-depth strategy to identify and mitigate cybersecurity threats. The
company’s information security team is responsible for the day-to-day management of the company’s global information
security program, which includes defining policies and procedures to safeguard our information systems and data, conducting
vulnerability, threat and third-party information security assessments, information security event management (i.e., responding
to ransomware and other cyber-attacks, business continuity and recovery), evaluating external cyber intelligence, supporting
industry cybersecurity efforts and working with governmental agencies. The global information security team also develops
training for personnel (e.g., employees and contractors) with access to Corteva’s system to support adherence to the company’s
policies and procedures, along with increasing awareness of cyber-related risk. The personnel training includes, but is not
limited to, mandatory onboarding training, phishing simulations with automated remediation training, table-top incident
response exercises, and educational intranet posting and email campaigns.
Our Enterprise Risk Management Committee, which includes the company’s Chief Information Officer (“CIO”) and Chief
Information Security Officer (“CISO”), independently assesses and monitors the effectiveness of the company’s cybersecurity
risk management programs and strategies. The company’s internal audit function also performs independent reviews and
validation of the various programs, including policies and procedures as determined by their annual risk assessment.
The company leverages the U.S. Department of Commerce’s National Institute of Standards and Technology (“NIST”)
Cybersecurity Framework (“Framework”) as the foundation of its global information security program. The NIST Framework
provides standards, guidelines, and practices for organizations to better manage and reduce cybersecurity risk and is designed to
foster risk and cybersecurity management communications amongst both internal and external organizational stakeholders. The
company’s information security team works with independent, third-party consultants annually to assess the maturity of the
company’s cybersecurity program within the NIST Framework and to develop strategic areas of focus for the company’s
programs commensurate with the company’s business objectives.
As part of the company’s global information security program, we leverage both internal and external assessments and
partnerships with industry leaders to help approach information security company-wide. Additionally, the company maintains a
comprehensive program that defines standards for the planning, sourcing, management, and oversight of third-party
relationships and third-party access to its system, facilities, and/or confidential or proprietary data.
Cybersecurity incidents may create risk to the company that may impact its reputation, financial performance, ability to operate
safely or at all, and the value of its intellectual property. Like most major corporations, the company is the target of industrial
espionage, including cyberattacks, from time to time. The company has determined that these incidents have resulted, and could
result in the future, in unauthorized parties gaining access to certain confidential business information. However, to date,
Corteva has not experienced any known cybersecurity incidents that have materially affected the company, including the
company's results of operations and financial condition, changes in the competitive environment, business operations and
strategy. Although management does not believe that Corteva has experienced any material
losses to date related to
cybersecurity incidents, there can be no assurance that Corteva will not suffer such losses in the future. For more information on
potential risk related to cybersecurity incidents, including intellectual property theft and operational disruption, please see “Item
1A – Risk Factors” of this report.
Governance. The company’s Audit Committee and Governance and Compliance Committee provide board oversight of
company cybersecurity risks. The Audit Committee conducts a minimum of two cybersecurity program updates per year,
including a review of capital spend, budget, and staffing, as well as quarterly reports on cybersecurity threats and key risk
indicators related to the company’s progress on risk mitigation activities. The Governance and Compliance Committee, as part
of its oversight for the enterprise risk management program company-wide, reviews and ensures that the company’s oversight
24
Part I
and governance structure related to company risks, including cybersecurity risks, remains appropriate and that risks are
appropriately managed.
The company’s CIO oversees the company’s information technology programs and investments. The company’s CISO reports
to the CIO and oversees the company’s information security programs. The company’s CIO has over 30 years of information
technology experience, including nine years in various information technology leadership roles. Our CIO holds a bachelor of
science and master of science degrees in organizational communications as well as an M.B.A. in information technology. The
company’s CISO has over thirty years of experience in information security and is a Certified Information Security Manager®
(CISM®), a Certified Data Privacy Solutions Engineer™ (CDPSE®), as well as being Certified in Risk and Information Systems
Control® (CRISC®). Our CISO holds a bachelor of science degree in electric engineering as well as an M.B.A. in operations,
technology.
Both the CIO and CISO regularly report to the Audit Committee, Board and Governance and Compliance Committee, on the
company’s identification, prevention, detection, mitigation and remediation of cybersecurity risks and incidents. In 2023, the
Board reviewed the company’s cybersecurity program and maturity assessment, while the Audit Committee provided regular
oversight of cybersecurity risks, with cybersecurity discussions and dashboard reviews of key performance indicators and risks
at five committee meetings during the course of the year. With respect to specific incidents, the company leverages an incident
response framework to elevate and evaluate specific incidents to the CIO and CISO, along with the company’s senior
leadership, including the finance and legal functions. In the event of a potentially material cybersecurity incident, the Audit
Committee would be immediately notified and briefed.
ITEM 2. PROPERTIES
The company operates out of its headquarters in Indianapolis, Indiana. It also maintains a global business center in Johnston,
Iowa, for its seed business. Its manufacturing, processing, marketing and research and development facilities, as well as
regional purchasing offices and distribution centers, are located throughout the world. The company has 99 manufacturing sites
in the following geographic regions:
Number of Sites
Seed
Total
Crop
North America1
EMEA2
Latin America
Asia Pacific
Total
1. North America consists of U.S. & Canada.
2. Europe, Middle East, and Africa ("EMEA").
7
14
8
6
35
40
8
13
3
64
47
22
21
9
99
The company's principal sites include facilities which, in the opinion of management, are suitable and adequate for their use and
have sufficient capacity for the company's current needs and expected near-term growth. Properties are primarily owned by the
company; however, certain properties are leased. No title examination of the properties has been made for the purpose of this
report and certain properties are shared with other tenants under long-term leases.
25
ITEM 3. LEGAL PROCEEDINGS
Part I
The company is subject to various legal proceedings, including, but not limited to, product liability, intellectual property,
antitrust, commercial, property damage, personal injury, environmental and regulatory matters arising out of the normal course
of its current businesses or legacy EIDP businesses unrelated to Corteva’s current businesses but allocated to Corteva as part of
the Separation of Corteva from DuPont.
Often these proceedings raise complex factual and legal issues, which are subject to risks and uncertainties and which could
require significant amounts of senior leadership team’s time. Litigation and other claims, along with regulatory proceedings,
against the company could also materially adversely affect its operations, reputation, and/or result in the incurrence of
unexpected expenses and liability. Even when the company believes liabilities are not expected to be material or the probability
of loss or of an adverse unappealable final judgment is remote, the company may consider settlement of these matters, and may
enter into settlement agreements, if it believes settlement is in the best interest of the company, including avoidance of future
distraction and litigation defense cost, and its shareholders. Information regarding certain of these matters is set forth below and
in Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements.
Litigation related to Corteva’s current businesses
Federal Trade Commission Investigation
On September 29, 2022, the FTC, along with ten state attorneys general, filed a lawsuit against Corteva and another competitor
alleging the parties engaged in unfair methods of competition, unlawful conditioning of payments, unreasonably restrained
trade, and have an unlawful monopoly (the “FTC lawsuit”). In December 2022, two additional state attorneys general joined the
FTC lawsuit, and another state attorney general filed a separate lawsuit against Corteva and another competitor based on the
allegations set forth in the FTC lawsuit. Several proposed private class action lawsuits alleging anticompetitive conduct based
on the allegations set forth in the FTC lawsuit were centralized into a multi-district litigation in the U.S. District Court for the
Middle District of North Carolina in February 2023. Further information with respect to these proceedings is set forth under
“Federal Trade Commission Investigation” in in Note 16 - Commitments and Contingent Liabilities, to the Consolidated
Financial Statements.
Lorsban® Lawsuits
As of December 31, 2023, there were pending personal injury and remediation lawsuits filed against the former Dow
Agrosciences LLC in California alleging injuries related to exposure to, or contamination by, chlorpyrifos, the active ingredient
in Lorsban®, an insecticide used by commercial farms for field fruit, nut and vegetable crops. Corteva ended its production of
Lorsban® in 2020. Further information with respect to these proceedings is set forth under “Lorsban® Lawsuits” in Note 16 -
Commitments and Contingent Liabilities, to the Consolidated Financial Statements.
Inari Disputes
On September 27, 2023, Corteva filed a lawsuit in Delaware federal court against Inari Agriculture, Inc. and Inari Agriculture.
N.V. (collectively “Inari”) asserting claims of Plant Variety Protection infringement, indirect patent infringement, breach of
contract, and civil conversion. Corteva’s lawsuit alleges Inari illegally obtained various varieties of seed technologies from a
seed depository and illegally transported them abroad for the purpose of performing gene editing on the technologies and then
filing a patent for such technologies. In December 2023, Inari filed a motion to dismiss the complaint.
Bayer Disputes
In August 2022, Corteva filed a lawsuit against Bayer CropScience LLP and Monsanto Company (collectively “Bayer”) in
federal court in Delaware for alleged infringement of Corteva’s patented AAD-1 herbicide resistance technology used in
Enlist® corn. The complaint for this lawsuit was amended to include additional patents that are closely related to this patented
technology for soybeans. Corteva seeks to enjoin Bayer from continuing to infringe, as well as appropriate monetary damages.
Bayer has filed an answer to the complaint and has asserted various affirmative defenses including invalidity. In August 2023,
the court issued a decision adopting Corteva’s claim construction for all five disputed patent terms subject to this litigation.
In December 2023, the Patent Trial and Appeal Board ("PTAB") authorized an Inter Partes Review (“IPR”) proceeding initiated
by Bayer to review the patentability of three patents subject to the AAD-1 litigation. Inari is seeking to join the IPR proceeding.
An oral hearing will occur before the PTAB in September 2024 with decisions expected by December 2024. Corteva holds
numerous additional patents covering its Enlist® traits or Enlist® weed control system. Therefore, the IPR process is not
expected to impact our ability to license and protect Enlist E3® traits. Corteva's AAD-1 lawsuit is stayed during pendency of
the IPR.
26
ITEM 3. LEGAL PROCEEDINGS, continued
Part I
In October 2023, the U.S. Patent and Trademark Office granted an ex parte reexamination of the patent for AAD-1 herbicide
resistance technology used in Enlist® corn based upon Inari’s petition for review. Inari alleges the AAD-1 patent is not
patentably distinct from another Corteva patent for maize technology, and therefore not valid unless Corteva files a terminal
disclaimer giving up its patent term adjustment for the AAD-1 technology, which would result in the AAD-1 patent expiring in
May 2025.
In August 2022, Bayer filed breach of contract/declaratory judgment lawsuit in Delaware state court against Corteva relating to
an agrobacterium cross-license agreement and E3® soybeans. Bayer alleges that Corteva practiced two Bayer patents in
developing E3® soybeans, and therefore, is entitled to royalties pursuant to the terms of the cross-license agreement. Further
information with respect to these proceedings is set forth under “Bayer Dispute” in Note 16 - Commitments and Contingent
Liabilities, to the Consolidated Financial Statements.
In October 2022, Corteva filed a lawsuit against Bayer in Delaware state court seeking a declaration that, under the terms of
Corteva’s licensing agreement and the law, Bayer is not entitled to collect patent royalties on the Roundup Ready® Corn 2 trait
after Bayer’s U.S. patent protection expires. In March 2023, Bayer’s motion to dismiss the complaint was denied. Discussions
continue between Bayer and Corteva to seek a resolution to these disputes.
Litigation related to legacy EIDP businesses unrelated to Corteva’s current businesses
As discussed below and in Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements,
certain of the environmental proceedings and litigation allocated to Corteva as part of the Separation from DuPont relate to the
legacy EIDP businesses, including their use of PFOA, which, for purposes of this report, means collectively perfluorooctanoic
acid and its salts, including the ammonium salt and does not distinguish between the two forms, and PFAS, which means per-
and polyfluoroalkyl substances,
including PFOA, PFOS (perfluorooctanesulfonic acid), GenX and other perfluorinated
chemicals and compounds ("PFCs"). This litigation includes multiple natural resource damage lawsuits across the United States
filed by municipalities and alleging PFOA contamination, as well as, lawsuits by four municipalities in the Netherlands filed
complaints alleging contamination of land and groundwater resulting from the emission of PFOA and GenX by Corteva,
DuPont and Chemours.
In addition to the matters set forth in Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial
Statements, on March 25, 2019, the New Jersey Department of Environmental Protection (“NJDEP”) issued a Statewide PFAS
Directive to several companies, including Chemours, DuPont, and EIDP. The Directive seeks information relating to the use
and environmental release of PFAS and PFAS-replacement chemicals at and from two former EIDP sites in New Jersey,
Chambers Works and Parlin, and a funding source for costs related to the NJDEP’s investigation of PFAS issues and PFAS
testing and remediation.
On January 22, 2021, Chemours, DuPont, Corteva and EIDP entered into a binding memorandum of understanding containing a
settlement to resolve legal disputes related to Chemours' responsibility for litigation and environmental liabilities allocated to it,
and to establish a cost sharing arrangement and escrow account to be used to support and manage potential future legacy PFAS
liabilities arising out of pre-July 1, 2015 conduct (the “MOU”). See Note 16 - Commitments and Contingent Liabilities, to the
Consolidated Financial Statements for further discussion.
Other Environmental Proceedings
The company believes it is remote that the following matters will have a material impact on its financial position, liquidity or
results of operations. The matters below involve the potential for $1 million or more in monetary fines and are included per
Item 103(3)(c)(iii) of Regulation S-K of the Securities Exchange Act of 1934, as amended.
Related to Corteva’s current businesses
Nebraska Department of Environment and Energy, AltEn Facility
The EPA and the Nebraska Department of Environment and Energy (“NDEE”) are pursuing investigations, response and
removal actions, litigation and enforcement action related to an ethanol plant located near Mead, Nebraska and owned and
operated by AltEn LLC (“AltEn”). Corteva is one of six seed companies, who were customers of AltEn (collectively, the
"Facility Response Group"), participating in the NDEE’s Voluntary Cleanup Program to address certain interim remediation
needs at the site. Further information with respect to these proceedings is set forth under “Nebraska Department of Environment
and Energy, AltEn Facility” in Note 15 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements.
27
ITEM 3. LEGAL PROCEEDINGS, continued
Related to legacy EIDP businesses unrelated to Corteva’s current businesses
Part I
Divested Neoprene Facility, La Place, Louisiana - EPA Compliance Inspection
In 2016, the EPA conducted a focused compliance investigation at the Denka Performance Elastomer LLC (“Denka”) neoprene
manufacturing facility in La Place, Louisiana. EIDP sold the neoprene business, including this manufacturing facility, to Denka
in the fourth quarter of 2015. In the spring of 2017, the EPA, the DOJ, the Louisiana Department of Environmental Quality,
EIDP and Denka began discussions relating to the inspection conclusions and allegations of noncompliance arising under the
Clean Air Act, including leak detection and repair. These discussions, which include potential settlement options, continue.
Under the Separation Agreement, DuPont is defending and indemnifying the company in this matter.
New Jersey Directive Pompton Lakes
On March 27, 2019, the NJDEP issued to Chemours and EIDP a Natural Resource Damages Directive relating to chemical
contamination (non-PFAS) at and around EIDP’s former Pompton Lakes facility in New Jersey. The Directive alleges that this
contamination has harmed the natural resources of New Jersey. It seeks $125,000 as reimbursement for the cost of preparing a
natural resource damages assessment, which the State will use to determine the extent of such damage and the amount it expects
to seek to restore the affected natural resources to their pre-damage state.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Part II
Market for Registrant's Common Equity and Related Stockholder Matters
The company's common stock is listed on the New York Stock Exchange, Inc. (symbol: CTVA). The number of record holders
of common stock was approximately 66,000 at February 1, 2024.
During 2023 and 2022, the company paid four quarterly dividends on its common stock. See the below table for dividend
information for each quarter during 2023 and 2022.
Fourth Quarter$
Third Quarter
Second Quarter
First Quarter
Total$
2023
2022
0.16 $
0.16
0.15
0.15
0.62 $
0.15
0.15
0.14
0.14
0.58
See Part III, Item 11. Executive Compensation for information relating to the company’s equity compensation plans.
28
Part II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES, continued
Issuer Purchases of Equity Securities
The following table summarizes information with respect to the company's purchase of its common stock during the three
months ended December 31, 2023:
Month
November 2023
December 2023
Fourth quarter 2023
Total Number of
Shares Purchased
Average Price Paid
per Share
2,150,483
1,545,477
3,695,960 $
46.58
45.04
45.94
Total Number of Shares
Purchased as Part of
the Company's Publicly
Announced Share
Buyback Program1
Approximate Value of
Shares that May Yet Be
Purchased Under the
Program1
(Dollars in millions)
2,150,483
1,545,477
3,695,960 $
1,570
1,500
1,500
1. On September 13, 2022, Corteva, Inc. announced that its Board of Directors authorized a $2 billion share repurchase program to purchase Corteva, Inc.'s
common stock, par value $0.01 per share, without an expiration date. The timing, price and volume of purchases will be based on market conditions, relevant
securities laws and other factors.
Stock Performance Graph
The following graph illustrates the cumulative total return to Corteva stockholders following the completion of the Separation
and beginning as of the closing price of its first NYSE listing date, June 3, 2019. The Chart compares the cumulative total
return of Corteva’s common stock with the S&P 500 Stock Index and the S&P 500 Chemicals Index.
6/3/2019
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
Corteva
S&P 500 Index
S&P 500 Chemicals Index
$
100 $
100
100
120 $
119
112
161 $
141
129
198 $
181
160
249 $
149
139
205
188
151
The chart depicts a hypothetical $100 investment in each of the Corteva common stock, the S&P 500 Index and the S&P 500
Chemicals Index as of the closing price on June 3, 2019 and illustrates the value of each investment over time (assuming the
reinvestment of dividends) until December 31, 2023.
ITEM 6. [RESERVED]
Not applicable.
29
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
CAUTIONARY STATEMENTS ABOUT FORWARD-LOOKING STATEMENTS
This report contains certain estimates and 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 “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 financial results or outlook; strategy for growth; product development;
regulatory approvals; market position; capital allocation strategy; liquidity; environmental, social and governance (“ESG”)
targets and initiatives; the anticipated benefits of acquisitions, restructuring actions, or cost savings initiatives; and the outcome
of contingencies, such as litigation and environmental matters, are forward-looking statements.
Forward-looking statements and other estimates are based on certain assumptions and expectations of future events which may
not be accurate or realized. Forward-looking statements and other estimates 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 obtain or
maintain the necessary regulatory approvals for some of Corteva’s products; (ii) failure to successfully develop and
commercialize Corteva’s pipeline; (iii) effect of the degree of public understanding and acceptance or perceived public
acceptance of Corteva’s biotechnology and other agricultural products; (iv) effect of changes in agricultural and related policies
of governments and international organizations; (v) costs of complying with evolving regulatory requirements and the effect of
actual or alleged violations of environmental laws or permit requirements; (vi) effect of climate change and unpredictable
seasonal and weather factors; (vii) failure to comply with competition and antitrust laws; (viii) effect of competition in
Corteva's industry; (ix) competitor’s establishment of an intermediary platform for distribution of Corteva's products; (x) impact
of Corteva's dependence on third parties with respect to certain of its raw materials or licenses and commercialization; (xi)
effect of volatility in Corteva's input costs; (xii) risk related to geopolitical and military conflict; (xiii) risks related to
environmental litigation and the indemnification obligations of legacy EIDP liabilities in connection with the separation of
Corteva; (xiv) risks related to Corteva's global operations; (xv) failure to effectively manage acquisitions, divestitures, alliances,
restructurings, cost savings initiatives, and other portfolio actions; (xvi) effect of industrial espionage and other disruptions to
Corteva’s supply chain, information technology or network systems; (xvii) failure of Corteva’s customers to pay their debts to
Corteva, including customer financing programs; (xviii) failure to raise capital through the capital markets or short-term
borrowings on terms acceptable to Corteva; (xix) increases in pension and other post-employment benefit plan funding
obligations; (xx) capital markets sentiment towards ESG matters; (xxi) risks related to pandemics or epidemics; (xxii) Corteva’s
intellectual property rights or defense against intellectual property claims asserted by others; (xxiii) effect of counterfeit
products; (xxiv) Corteva’s dependence on intellectual property cross-license agreements; and (xxv) 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 or other estimate, 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 is included in the section titled “Risk Factors” (Part I, Item 1A of this Form 10-K).
30
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Overview
Refer to pages 3 - 4 for a discussion of the DowDuPont Merger, the Internal Reorganizations, and the business separations.
The following is a summary of results from continuing operations for the year ended December 31, 2023:
•
•
•
•
•
The company reported net sales of $17,226 million, a decrease of 1 percent versus the year ended December 31, 2022,
reflecting a 10 percent decrease in volume and a 1 percent unfavorable impact from currency, partially offset by a 7
percent price increase and a 3 percent favorable portfolio and other impact.
Cost of goods sold ("COGS") totaled $9,920 million, down from $10,436 million for the year ended December 31,
2022, primarily driven by lower volumes, ongoing cost and productivity actions and a decrease in royalty expense,
partially offset by higher input costs, which are primarily macro-economic driven.
Restructuring and asset related charges - net were $336 million, a decrease from $363 million for the year ended
December 31, 2022. The year ended December 31, 2023 primarily included $217 million related to asset related
charges, including non-cash impairment charges of $152 million, and contract termination charges associated with the
Crop Protection Operations Strategy Restructuring Program, charges of $72 million of non-cash accelerated prepaid
royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance
traits and $42 million related to severance and related benefit costs, asset related charges and contract termination
charges associated with the 2022 Restructuring Actions.
Income from continuing operations after income taxes was $941 million, as compared to $1,216 million for the year
ended December 31, 2022.
Operating EBITDA was $3,381 million, which improved from $3,224 million for the year ended December 31, 2022,
primarily driven by price execution and productivity actions, partially offset by lower volumes coupled with cost and
currency headwinds. Refer to page 44 for further discussion of the company's Non-GAAP financial measures.
In addition to the financial highlights above, the following events occurred during the year ended December 31, 2023:
•
•
The company returned approximately $1.2 billion to shareholders during the year ended December 31, 2023 under its
previously announced share repurchase programs and through common stock dividends.
On July 21, 2023, the company's Board of Directors approved a 6.7 percent increase in the quarterly common stock
dividend from $0.15 per share to $0.16 per share.
Priorities
The company continues to believe the following priorities will create significant value for its customers and shareholders over
the mid-term:
•
•
•
Accelerate performance and growth through a value creation network focused on four key catalysts: (1) portfolio
simplification that prioritizes core markets and crops, in which we deliver top tier technology to our customers, (2) a
continued move towards royalty neutrality, (3) improve our product mix to focus on differentiation and yield
advantage, and (4) operational improvements focused on driving price and productivity.
Increased investment in our industry-leading innovation pipeline focused on delivering even greater value and
productivity to growers through more differentiated and sustainably advantaged solutions, which in turn promise to
strengthen global food security and help address the impacts of climate change.
Deploy capital with discipline by balancing investment, growth, M&A opportunities and returning cash to
shareholders.
31
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Analysis of Operations
Acquisitions
On March 1, 2023, Corteva completed its previously announced acquisition of all the outstanding equity interests in Stoller
Group Inc. (“Stoller”), one of the largest independent companies in the Biologicals industry, and Quorum Vital Investment,
S.L. and its affiliates (“Symborg”), an expert in microbiological technologies. The purchase price for Stoller and Symborg was
$1,220 million, inclusive of a working capital adjustment, and $370 million, respectively. These acquisitions supplement the
crop protection business with additional biological tools that complement evolving farming practices. See Note 4 - Business
Combinations, to the Consolidated Financial Statements, for additional information.
Crop Protection Operations Strategy Restructuring Program
On November 5, 2023, management of the company approved a plan to further optimize its Crop Protection network of
manufacturing and external partners (the "Crop Protection Operations Strategy Restructuring Program"). The plan includes the
exit of the company’s production activities at its site in Pittsburg, California, as well as ceasing operations in select
manufacturing lines at other locations.
The company expects to record aggregate pre-tax restructuring and asset related charges of $410 million to $460 million,
comprised of $70 million to $90 million of severance and related benefit costs, $320 million to $340 million of asset-related
and impairment charges and $20 million to $30 million of costs related to contract terminations. Reductions in workforce are
subject to local regulatory requirements.
Future cash payments related to these charges are anticipated to be $90 million to $120 million, which primarily relate to the
payment of severance and related benefits and contract terminations. During the year ended December 31, 2023, the company
paid $3 million associated with these charges. The restructuring actions associated with these charges are expected to be
substantially complete in 2024.
During the year ended December 31, 2023, the company recorded pre-tax restructuring and asset related charges of $229
million consisting of $217 million and $12 million recognized in restructuring and asset related charges – net and cost of goods
sold, respectively, in the company’s Consolidated Statement of Operations, which primarily related to asset-related charges and
contract termination charges. Asset-related charges include non-cash impairments charges of $152 million, which were
recognized during the year ended December 31, 2023 and consisted of $92 million and $60 million relating to operating lease
assets and property, plant and equipment, respectively, associated with the exit of the company’s production activities at its site
in Pittsburg, California.
The Crop Protection Operations Strategy Restructuring Program is expected to contribute to the company’s ongoing cost and
productivity improvement efforts through achieving an estimated $100 million of savings on a run rate basis by 2025. Future
actions by the company or changes in circumstances from current assumptions, including any site disposition gains or losses,
may cause actual results and future cash payments to differ. See Note 6 - Restructuring and Asset Related Charges - Net, to the
Consolidated Financial Statements for additional information.
2022 Restructuring Actions
In connection with the company’s shift to a global business unit model during 2022, the company assessed its business
priorities and operational structure to maximize the customer experience and deliver on growth and earnings potential. As a
result of this assessment, the company committed to restructuring actions during the second quarter of 2022, which included the
company’s Russia Exit (collectively the “2022 Restructuring Actions”). Through the year ended December 31, 2023, the
company recorded pre-tax restructuring and other charges of $373 million inception-to-date under the 2022 Restructuring
Actions, consisting of $131 million of severance and related benefit costs, $116 million of asset related charges, $67 million of
costs related to contract terminations (including early lease terminations) and $59 million of other charges. The company does
not anticipate any additional material charges from the 2022 Restructuring Actions as actions associated with this charge are
substantially complete.
Cash payments related to these charges are anticipated to be up to $210 million, of which approximately $150 million has been
paid through December 31, 2023, and primarily relate to the payment of severance and related benefits, contract terminations
and other charges.
32
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
The total pre-tax restructuring and other charges recognized through the year ended December 31, 2023 included $53 million
associated with the Russia Exit. The Russia Exit pre-tax restructuring charges consisted of $6 million of severance and related
benefit costs, $6 million of asset related charges, and $30 million of costs related to contract terminations (including early lease
terminations). Other pre-tax charges associated with the Russia Exit were recorded to cost of goods sold and other income
(expense) – net in the Consolidated Statement of Operations, relating to inventory write-offs of $3 million and settlement costs
of $8 million, respectively.
The 2022 Restructuring Actions are expected to contribute to the company’s ongoing cost and productivity improvement efforts
through achieving an estimated $210 million to $220 million of savings on a run rate basis by 2025. See Note 6 - Restructuring
and Asset Related Charges - Net, to the Consolidated Financial Statements for additional information.
Share Buyback Plan
On September 13, 2022, Corteva, Inc. announced that its Board of Directors authorized a $2 billion share repurchase program
to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2022 Share Buyback Plan").
The timing, price and volume of purchases will be based on market conditions, relevant securities laws and other factors. In
connection with the 2022 Share Buyback Plan, the company repurchased and retired 10,026,000 shares in the open market for a
cost (excluding excise taxes) of $500 million during the year ended December 31, 2023.
On August 5, 2021, Corteva, Inc. announced that its Board of Directors authorized a $1.5 billion share repurchase program to
purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2021 Share Buyback Plan").
The company completed the 2021 Share Buyback Plan during the first quarter of 2023 and repurchased and retired 4,098,000,
17,425,000 and 5,572,000 shares in the open market for a total cost of $250 million, $1 billion, and $250 million during the
years ended December 31, 2023, 2022 and 2021, respectively.
On June 26, 2019, Corteva, Inc. announced that its Board of Directors authorized a $1 billion share repurchase program to
purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2019 Share Buyback Plan").
The company completed the 2019 Share Buyback Plan during the third quarter of 2021 and repurchased and retired 24,705,000
shares between the years ended December 31, 2019 and 2021 in the open market.
2021 Restructuring Actions
During the first quarter of 2021, Corteva approved restructuring actions designed to right-size and optimize footprint and
organizational structure according to the business needs in each region with the focus on driving continued cost improvement
and productivity. Through the year ended December 31, 2023, the company recorded net pre-tax restructuring charges of $167
million inception-to-date under the 2021 Restructuring Actions, consisting of $70 million of severance and related benefit costs,
$45 million of asset related charges, $12 million of asset retirement obligations and $40 million of costs related to contract
terminations (contract terminations includes early lease terminations). Actions associated with the 2021 Restructuring Actions
were substantially complete by the end of 2021. The company expected the 2021 Restructuring Actions to contribute to the
company’s ongoing cost and productivity improvement efforts and achieve an estimated $70 million of savings on a run rate
basis by 2023, which was achieved. See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial
Statements, for additional information.
Results of Operations
Net Sales
(In millions)
Net Sales$
17,226 $
17,455 $
15,655
For the Year Ended December 31,
2022
2021
2023
2023 versus 2022
Net sales were $17,226 million for the year ended December 31, 2023, compared to $17,455 million for the year ended
December 31, 2022. The decrease was primarily driven by a 10 percent decrease in volume versus the prior year and a 1 percent
unfavorable impact from currency, partially offset by a 7 percent increase in price and a 3 percent favorable portfolio and other
impact. Volume declines were driven by strategic product exits, crop protection channel inventory destocking, delayed farmer
purchases, lower corn planted area in EMEA, reduced summer corn planted area and lower expected Safrinha corn planted area
in Brazil, and the Russia Exit, partially offset by increased corn acres in North America. The unfavorable currency impacts
33
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
were led by the Turkish Lira, Canadian Dollar and Chinese Renminbi. Price gains were driven by continued execution on the
company's price for value strategy, strong demand for new technology and strong execution in response to cost inflation led by
EMEA, partially offset by challenging market dynamics in Latin America and North America. The portfolio and other impact
was driven by the biologicals acquisitions and the sale of seeds already under production in Russia when the decision to exit the
country was made and that the company was contractually required to purchase.
2022 versus 2021
Net sales were $17,455 million for the year ended December 31, 2022, compared to $15,655 million for the year ended
December 31, 2021. The increase was primarily driven by a 10 percent increase in price and a 5 percent increase in volume
versus the prior year period, partially offset by a 3 percent unfavorable currency impact and 1 percent unfavorable portfolio
impact. Price gains were driven by the continued execution on the company's price for value strategy with strong execution
across all regions in response to cost inflation, and recovery of higher input costs. The increase in volume was driven by
continued penetration of new products and gains in all regions, partially offset by reduced corn acres in North America and
supply constraints in North America canola. The unfavorable currency impacts were led by the Turkish Lira and the Euro,
partially offset by the Brazilian Real. The portfolio impact was driven by a divestiture in Asia Pacific.
(In millions)
Worldwide
North America
EMEA
Latin America
Asia Pacific
(in millions)
North America$
EMEA
Latin America
Asia Pacific
Total
(in millions)
North America$
EMEA
Latin America
Asia Pacific
Total$
1,800
For the Year Ended December 31,
2022
2023
2021
Net Sales
17,226
$
8,590
3,367
3,906
1,363
% of Net
Sales
Net Sales
17,455
8,294
3,256
4,445
1,460
100 % $
50 %
19 %
23 %
8 %
% of Net
Sales
Net Sales
15,655
7,536
3,123
3,545
1,451
100 % $
48 %
19 %
25 %
8 %
% of Net
Sales
100 %
48 %
20 %
23 %
9 %
Year Ended December 31,
2023 vs. 2022
Net Sales Change
$%
P
Price &Po
roduct Mix
Percent Change Due To:
Volume
Currency
rtfolio /
Other
296
$
111
(539)
(97)
(229)
4 %
3 %
(12)%
(7)%7
(1)%7
6 %
19 %(11)%
2 %
%
%(10)%
(2)%
(
(25)%
(9)%(5)%
— %
8)%
3 %
— %
(
1)%
— %
3 %
8 %
3 %
Year Ended December 31,
2022 vs. 2021
Net Sales Change
$%
P
Price &Po
roduct Mix
Percent Change Due To:
Volume
Currency
rtfolio /
Other
758
133
900
9
10 %8
4 %
25 %16
1 %
11 %
%2
10 %8
%7
7 %2
10 %5
%
%
%2
%
%
— %— %
(14)%
%— %
(6)%(2)%
(3)%
— %
(1)%
34
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Part II
COGS
(In millions)
COGS
For the Year Ended December 31,
2022
2021
2023
$
9,920 $
10,436 $
9,220
2023 versus 2022
COGS was $9,920 million (58 percent of net sales) for the year ended December 31, 2023 compared to $10,436 million (60
percent of net sales) for the year ended December 31, 2022. The decrease was primarily driven by lower volumes, ongoing cost
and productivity actions and a decrease in royalty expense, partially offset by higher input costs, which are primarily macro-
economic driven. The macro-economic driven trends are due to inflationary pressures impacting raw material inputs, which are
expected to improve in 2024.
2022 versus 2021
COGS was $10,436 million (60 percent of net sales) for the year ended December 31, 2022 compared to $9,220 million (59
percent of net sales) for the year ended December 31, 2021. The increase was primarily driven by increased volumes in crop
protection, and higher input costs, freight and logistics, which were primarily market-driven. The increases were partially offset
by ongoing cost and productivity actions and a favorable impact from currency.
Research and Development Expense ("R&D")
(In millions)
R&D$
1,337 $
1,216 $
For the Year Ended December 31,
2022
2021
2023
1,187
2023 versus 2022
R&D expense was $1,337 million (8 percent of net sales) for the year ended December 31, 2023 and $1,216 million (7 percent
of net sales) for the year ended December 31, 2022. The increase in R&D expense is in support of the company’s long-term
growth plans and was primarily driven by an increase in salaries due to higher headcount and the associated spending on field,
lab and facilities, and third-party research costs. The increase was partially offset by a decrease in variable compensation.
2022 versus 2021
R&D expense was $1,216 million (7 percent of net sales) for the year ended December 31, 2022 and $1,187 million (8 percent
of net sales) for the year ended December 31, 2021. The increase was primarily driven by an increase in variable compensation
and spending on field, lab and facilities supplies used in projects, partially offset by favorable currency.
Selling, General and Administrative Expenses ("SG&A")
(In millions)
SG&A
For the Year Ended December 31,
2022
2021
2023
$
3,176 $
3,173 $
3,209
2023 versus 2022
SG&A was $3,176 million (18 percent of net sales) for the year ended December 31, 2023 and $3,173 million (18 percent of
net sales) for the year ended December 31, 2022. The flat results were primarily driven by incremental costs from the Stoller
and Symborg acquisitions, an unfavorable impact relating to deferred compensation plans due to market improvements and an
increase in bad debt expense, partially offset by a decrease in selling expense, variable compensation, functional spend,
commissions and consulting fees.
2022 versus 2021
SG&A was $3,173 million (18 percent of net sales) for the year ended December 31, 2022 and $3,209 million (20 percent of
net sales) for the year ended December 31, 2021. The decrease was primarily driven by favorable currency, lower functional
spend and enterprise resource planning ("ERP") costs, and the favorable impact relating to deferred compensation plans due to
market declines, partially offset by an increase in commissions expense, selling expense, travel and consulting fees.
35
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
Part II
OPERATIONS, continued
Amortization of Intangibles
(In millions)
Amortization of Intangibles
For the Year Ended December 31,
2022
2023
2021
$
683 $
702 $
722
2023 versus 2022
Intangible asset amortization was $683 million for the year ended December 31, 2023 and $702 million for the year ended
December 31, 2022. The decrease was primarily driven by the expiration of the favorable supply contracts in the fourth quarter
of 2022, at which point the contracts became fully amortized, partially offset by amortization relating to the intangible assets
recognized in connection with the Stoller and Symborg acquisitions.
2022 versus 2021
Intangible asset amortization was $702 million for the year ended December 31, 2022 and $722 million for the year ended
December 31, 2021. The decrease was primarily driven by the expiration of the favorable supply contracts on November 1,
2022, at which point the contracts became fully amortized.
See Note 13 - Goodwill and Other Intangible Assets, to the Consolidated Financial Statements, for additional information.
Restructuring and Asset Related Charges - Net
(In millions)
Restructuring and Asset Related Charges - Net
For the Year Ended December 31,
2022
2023
2021
$
336 $
363 $
289
2023
Restructuring and asset related charges - net were $336 million for the year ended December 31, 2023, which was primarily
comprised of a $217 million charge related to the Crop Protection Operations Strategy Restructuring Program, a $72 million net
charge related to non-cash accelerated prepaid royalty amortization expense related to the Roundup Ready 2 Yield® and
Roundup Ready 2 Xtend® herbicide tolerance traits and $42 million related to severance and related benefit costs, asset related
charges and contract termination charges (including early lease terminations) associated with the 2022 Restructuring Actions.
The $217 million net charge associated with the Crop Protection Operations Strategy Restructuring Program was primarily
comprised of $214 million of asset related charges, which includes non-cash impairment charges of $152 million consisting of
$92 million and $60 million related to operating lease assets and property, plant and equipment, respectively, associated with
the exit of the company’s production activities at its site in Pittsburg, California.
2022
Restructuring and asset related charges - net were $363 million for the year ended December 31, 2022, which was primarily
comprised of a $272 million net charge related to the 2022 Restructuring Actions and $109 million of restructuring and asset
related charges - net from non-cash accelerated prepaid royalty amortization expense related to the Roundup Ready 2 Yield®
and Roundup Ready 2 Xtend® herbicide tolerance traits. The $272 million net charge associated with the 2022 Restructuring
Actions was comprised of $111 million of severance and related benefit costs, $104 million of asset related charges and $57
million of costs related to contract terminations (including early lease terminations). These charges were partially offset by a
benefit associated with previous restructuring programs.
2021
Restructuring and asset related charges - net were $289 million for the year ended December 31, 2021, which was primarily
comprised of a $167 million net charge related to the 2021 Restructuring Actions and $125 million of restructuring and asset
related charges - net from non-cash accelerated prepaid royalty amortization expense related to the Roundup Ready 2 Yield®
and Roundup Ready 2 Xtend® herbicide tolerance traits. The $167 million net charge associated with the 2021 Restructuring
Actions was comprised of $74 million of severance and related benefit costs, $45 million of asset related charges, $6 million of
asset retirement obligations and $42 million of costs related to contract terminations (including early lease terminations).
See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements for additional
information.
36
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
Part II
OPERATIONS, continued
Other Income (Expense) - Net
(In millions)
Other Income (Expense) - Net
For the Year Ended December 31,
2022
2023
2021
$
(448) $
(60) $
1,348
2023 versus 2022
Other income (expense) - net was $(448) million and $(60) million for the years ended December 31, 2023 and 2022,
respectively. Higher other expense was primarily driven by an increase in net exchange losses and estimated settlement reserves
and an increase in non-operating pension and other post-employment costs in the current period versus a benefit in the prior
period. Higher other expense was partially offset by an increase in interest income and the absence of charges incurred in 2022
relating to certain legal matters and losses associated with a previously held equity investment.
2022 versus 2021
Other income (expense) - net was $(60) million for the year ended December 31, 2022 and $1,348 million for the year ended
December 31, 2021. The change was primarily driven by a decrease in non-operating pension and other post-employment
benefit credits due to the prior year impact of the December 2020 OPEB plan amendments, an increase in net exchange losses,
estimated settlement reserves, the Employee Retention Credit pursuant to the Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act as enhanced by the Consolidated Appropriations Act (“CAA”) and American Rescue Plan Act (“ARPA”)
recognized in 2021 and losses associated with a previously held equity investment. The increases are partially offset by a
decrease in loss on sale of receivables, an increase in interest income and the absence of charges related to an officer
indemnification payment and a contract termination with a third-party service provider that were recognized in 2021.
See Note 7 - Supplementary Information, to the Consolidated Financial Statements for additional information.
Interest Expense
(In millions)
Interest Expense$
For the Year Ended December 31,
2022
2023
2021
233 $
79 $
30
2023 versus 2022
Interest expense was $233 million and $79 million for the years ended December 31, 2023 and 2022, respectively. The change
was primarily driven by higher interest rates, the issuance of Senior Notes in connection with the May 2023 Debt Offering, and
an increase in short term borrowings.
2022 versus 2021
Interest expense was $79 million and $30 million for the years ended December 31, 2022 and 2021, respectively. The change
was primarily driven by higher interest rates on seasonal short-term borrowings and new foreign currency borrowings.
Provision for (Benefit from) Income Taxes on Continuing Operations
(In millions)
Provision for (Benefit from) Income Taxes on Continuing Operations
Effective Tax Rate
$
For the Year Ended December 31,
2022
2023
2021
$
152
13.9 %14.7
210
$
%
524
22.3 %
2023
For the year ended December 31, 2023, the company’s effective tax rate of 13.9 percent on pre-tax income from continuing
operations of $1,093 million was favorably impacted by a $(65) million benefit related to U.S. tax credits for increasing
research activities, changes to deferred taxes and a tax currency change for legal entities within Switzerland in the amount of
$(62) million and $(24) million, respectively, as well as favorable geographic mix of earnings. These items were partially offset
by the unfavorable tax impact of certain net exchange losses recognized on the re-measurement of the net monetary asset
positions, which were not deductible in their local jurisdictions, a $46 million charge associated with intellectual property
realignment, and a $32 million charge associated with repatriation of cash held outside of the U.S. primarily from current year
earnings.
37
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
2022
For the year ended December 31, 2022, the company’s effective tax rate of 14.7 percent on pre-tax income from continuing
operations of $1,426 million was favorably impacted by tax benefits relating to the establishment of deferred taxes in
connection with the impact of a change in a U.S. legal entity's tax characterization, a worthless stock deduction in the U.S., and
the release of a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil in the amount
of $(55) million, $(42) million and $(36) million, respectively. These items were partially offset by the unfavorable tax impact
of certain net exchange losses recognized on the re-measurement of the net monetary asset positions which were not deductible
in their local jurisdictions, and a $24 million charge associated with repatriation of cash held outside of the U.S. primarily from
current year earnings.
2021
For the year ended December 31, 2021, the company’s effective tax rate of 22.3 percent on pre-tax income from continuing
operations of $2,346 million was unfavorably impacted by the tax impact of certain net exchange losses recognized on the re-
measurement of the net monetary asset positions which were not deductible in their local jurisdictions, the tax impact of income
from pension and other post-employment benefits, and a $23 million charge associated with repatriation of cash held outside of
the U.S. These items were partially offset by the impacts of favorable geographic mix of earnings and a $(57) million benefit
related to U.S. tax credits for increasing research activities.
Income (loss) from Discontinued Operations After Income Taxes
(In millions)
Income (loss) from Discontinued Operations After Income Taxes
For the Year Ended December 31,
2022
2023
2021
$
(194) $
(58) $
(53)
2023
Income (loss) from discontinued operations after income taxes was $(194) million for the year ended December 31, 2023,
which was primarily comprised of charges associated with the settlement of certain PFAS related legal matters that are subject
to the MOU with Chemours and DuPont, including the Nationwide Water District Settlement and the State of Ohio for natural
resources damage claims, and charges associated with PFAS environmental remediation activities primarily at Chemours'
Fayetteville Works facility.
2022
Income (loss) from discontinued operations after income taxes was $(58) million for the year ended December 31, 2022, which
was primarily comprised of charges pursuant to the MOU with Chemours and DuPont, relating to PFAS environmental
remediation activities primarily at Chemours' Fayetteville Works facility and adjustments of certain prior year tax positions for
previously divested businesses.
2021
Income (loss) from discontinued operations after income taxes was $(53) million for the year ended December 31, 2021, which
was primarily comprised of charges relating to PFAS environmental remediation activities at the Chemours Fayetteville Works
facility and the settlement with the State of Delaware for PFAS related natural resource damage claims.
See Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for further discussion.
EIDP Analysis of Operations
As discussed in Note 1 - Basis of Presentation, to the EIDP Consolidated Financial Statements, EIDP is a subsidiary of Corteva,
Inc. and continues to be a reporting company, subject to the requirements of the Exchange Act. The below relates to EIDP only
and is presented to provide an Analysis of Operations, only for the differences between EIDP and Corteva, Inc.
Interest Expense
2023 versus 2022
EIDP’s interest expense was $253 million and $124 million for the years ended December 31, 2023 and 2022, respectively. The
change was primarily driven by the items noted on page 37, under the header “Interest Expense – 2023 versus 2022,” and lower
average borrowings on the related party loan between EIDP and Corteva, Inc. See Note 2 - Related Party Transactions, to the
EIDP Consolidated Financial Statements for further information.
38
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
2022 versus 2021
EIDP’s interest expense was $124 million and $80 million for the years ended December 31, 2022 and 2021, respectively. The
change was primarily driven by the items noted on page 37, under the header “Interest Expense – 2022 versus 2021,” partially
offset by lower interest expense incurred on the related party loan between EIDP and Corteva, Inc. See Note 2 - Related Party
Transactions, to the EIDP Consolidated Financial Statements for further information.
Provision for (Benefit from) Income Taxes on Continuing Operations
2023
For the year ended December 31, 2023, EIDP had an effective tax rate of 13.7 percent on pre-tax income from continuing
operations of $1,073 million, driven by the items noted on page 37, under the header “Provision for (Benefit from) Income
Taxes on Continuing Operations - 2023 and a tax benefit related to the interest expense incurred on the related party loan
between EIDP and Corteva, Inc. See Note 3 - Income Taxes, to the EIDP Consolidated Financial Statements for further
information.
2022
For the year ended December 31, 2022, EIDP had an effective tax rate of 14.4 percent on pre-tax income from continuing
operations of $1,381 million, driven by the items noted on page 38, under the header “Provision for (Benefit from) Income
Taxes on Continuing Operations - 2022 and a tax benefit related to the interest expense incurred on the related party loan
between EIDP and Corteva, Inc. See Note 3 - Income Taxes, to the EIDP Consolidated Financial Statements for further
information.
2021
For the year ended December 31, 2021, EIDP had an effective tax rate of 22.2 percent on pre-tax income from continuing
operations of $2,296 million, driven by the items noted on page 38, under the header “Provision for (Benefit from) Income
Taxes on Continuing Operations - 2021” and a tax benefit related to the interest expense incurred on the related party loan
between EIDP and Corteva, Inc. See Note 3 - Income Taxes, to the EIDP Consolidated Financial Statements for further
information.
Corporate Outlook - 2024
The global outlook for agriculture remains constructive overall in 2024. There was record-setting demand for grain, oilseeds
and biofuels in 2023 and we expect that to continue to grow in 2024. On-farm demand remains steady and overall strong. The
Crop Protection industry is working to rebalance after the significant destocking in 2023, however we expect the industry to
modestly improve as the imbalance between product going into the channel and on-farm consumption returns to alignment.
The company expects net sales to be in the range of $17.4 billion and $17.7 billion. Operating EBITDA is expected to be in the
range of $3.5 billion and $3.7 billion. Operating Earnings Per Share is expected to be in the range of $2.70 and $2.90 per share,
which reflects higher earnings, partially offset by interest expense and a higher base tax rate. Cash provided by operating
activities - continuing operations is expected to be in the range of $2.1 billion and $2.6 billion. Free cash flow is expected to be
in the range of $1.5 billion and $2.0 billion. Refer to further discussion of Non-GAAP metrics on pages 44 - 46.
The above outlook does not contemplate any extreme weather events, operational disruptions, significant changes in customers'
demand or ability to pay or further acceleration of currency and inflation impacts resulting from macro-economic driven trends.
Corteva is not able to reconcile its forward-looking non-GAAP financial measures, except Free Cash Flow, to its 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 (refer to page 45 for Significant Items recorded in the years
ended December 31, 2022, 2021 and 2020). However, during 2023, the company committed to restructuring activities to
optimize the Crop Protection network of manufacturing and external partners, which are expected to be substantially complete
in 2024. The company expects to record approximately $180 million to $230 million net pre-tax restructuring charges during
2024 for these activities. See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements,
for additional information. Additionally, beginning January 1, 2020, the company recognizes non-cash accelerated prepaid
royalty amortization expense as a restructuring and asset related charge. For further discussion of accelerated prepaid royalty
amortization refer to the Company's Critical Accounting Estimates for Prepaid Royalties on page 55.
39
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Reconciliation of Forward-Looking Cash Provided by (Used for) Operating Activities – Continuing Operations to Free
Cash Flow1
(In millions)
Year Ended December 31, 20241
End
Low EndHigh
Cash provided by (used for ) operating activities - continuing operations
Less: Capital expenditures
Free Cash Flow (Non-GAAP)
$
$
2,130 $
(630)
1,500 $
2,630
(630)
2,000
1. This represents the reconciliation of the company’s range provided for its forward-looking non-GAAP financial measure relating to Free Cash Flow. Refer to
further discussion of Non-GAAP metrics on pages 44 - 46.
Recent Accounting Pronouncements
See Note 3 - Recent Accounting Guidance, to the Consolidated Financial Statements for a description of recent accounting
pronouncements.
Segment Reviews
The company operates in two reportable segments: seed and crop protection. The company’s seed segment is a global leader in
developing and supplying advanced germplasm and traits that produce optimum yield for farms around the world. The segment
offers trait technologies that improve resistance to weather, disease, insects and enhance food and nutritional characteristics,
herbicides used to control weeds, and digital solutions that assist farmer decision-making with a view to optimize product
selection and, ultimately, help maximize yield and profitability. The segment competes in a wide variety of agricultural
markets. The crop protection segment serves the global agricultural input industry with products that protect against weeds,
insects and other pests, and disease, and that improve overall crop health both above and below ground via nitrogen
management and seed-applied technologies. The segment offers crop protection solutions and digital solutions that provide
farmers the tools they need to improve productivity and profitability, and help keep fields free of weeds, insects and diseases.
The segment is a leader in global herbicides, insecticides, nitrogen stabilizers, pasture and range management herbicides and
biologicals.
Summarized below are comments on individual segment net sales and segment operating EBITDA for the years ended
December 31, 2023, 2022 and 2021. The company defines segment operating EBITDA as earnings (loss) (i.e., income (loss)
from continuing operations before income taxes) before interest, depreciation, amortization, corporate expenses, non-operating
benefits (costs), foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain
foreign currency derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items.
Non-operating benefits (costs) consists of non-operating pension and OPEB credits (costs), tax indemnification adjustments,
environmental remediation and legal costs associated with legacy EIDP businesses and sites, and the 2021 officer
indemnification payment. 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. See Note 23 - Segment Information, to the Consolidated Financial Statements for
details related to significant pre-tax benefits (costs) excluded from segment operating EBITDA. All references to prices are
based on local price unless otherwise specified.
A reconciliation of segment operating EBITDA to income (loss) from continuing operations after income taxes for the years
ended December 31, 2023, 2022 and 2021 is included in Note 23 - Segment Information, to the Consolidated Financial
Statements.
Seed
In millions
Net sales$
9,472 $
Segment operating EBITDA
For the Year Ended December 31,
2022
2023
2021
8,979 $
8,402
$
2,117 $
1,656 $
1,512
40
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Part II
Seed
In millions
North America
EMEA
Latin America
Asia Pacific
Total
Seed
In millions
Corn
Soybeans
Other oilseeds
Other
Total
Seed
In millions
North America
EMEA
Latin America
Asia Pacific
Total
Seed
In millions
Corn
Soybeans
Other oilseeds
Other
Total
$
$
$
$
$
$
$
$
2023 vs. 2022
Net Sales Change
%
$
Percent Change Due To:
Price &Po
Product Mix
Volume
Currency
rtfolio /
Other
590
13
(121)
11
493
11 %9
1 %
(7)%
3 %
5 %
%3
26 %
11 %
14 %
13 %
%
(19)%
(22)%
(4)%
(6)%
(1)%— %
(10)%
4 %
(7)%— %
(2)%
4 %
— %
— %
2023 vs. 2022
Net Sales Change
%
$
492
48
(6)
(41)
493
2022 vs. 2021
Net Sales Change
%
$
174
10
338
55
577
Price &Po
Product Mix
14 %
7 %
23 %
%
13 %
8 %
3 %
(1)%
(8)%7
5 %
Price &Po
Product Mix
6 %
11 %2
18 %4
%
9 %
3 %
1 %
24 %
15 %12
7 %
Percent Change Due To:
Volume
Currency
rtfolio /
Other
(4)%
(4)%
(21)%
(15)%
(6)%
(2)%— %
— %
(7)%
— %
(2)%
— %
4 %
— %
— %
Percent Change Due To:
Volume
Currency
rtfolio /
Other
(2)%
%
%2
11 %
— %
(1)%
(13)%
%
(8)%— %
(2)%
— %
1 %
— %
— %
2022 vs. 2021
Net Sales Change
%
$
337
242
(38)
36
577
6 %
15 %
(5)%8
8 %
7 %
Price &Po
Product Mix
9 %
11 %5
Percent Change Due To:
Volume
Currency
rtfolio /
Other
(1)%
(2)%
— %
%(1)%
(
7 %
— %
— %
9)%
(3)%
(2)%
— %
— %
— %
%(4)%
4 %
9 %
Seed
Seed net sales were $9,472 million in 2023, up 5 percent from $8,979 million in 2022. The sales increase was driven by a 13
percent increase in price, partially offset by a 6 percent decline in volume and a 2 percent unfavorable currency impact.
The increase in price was broad-based and driven by strong demand for top technology and operational execution globally, with
global corn and soybean prices up 14 percent and 7 percent, respectively. Pricing actions more than offset currency impacts in
EMEA. The decline in volume was driven by the 2022 decision to exit Russia, lower corn planted area in EMEA, reduced
summer corn planted area and lower expected Safrinha corn planted area in Brazil, partially offset by increased corn acres in
North America. Unfavorable currency impacts were led by the Turkish Lira and the Canadian Dollar.
Seed operating EBITDA was $2,117 million in 2023, up 28 percent from $1,656 million in 2022. Price execution, reduction of
net royalty expense, and ongoing cost and productivity actions more than offset higher commodity and input costs, lower
volumes, and the unfavorable impact of currency. Segment operating EBITDA margin improved by approximately 390 basis
points versus the prior-year period.
41
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Seed net sales were $8,979 million in 2022, up 7 percent from $8,402 million in 2021. The increase was driven by a 9 percent
increase in price, partially offset by a 2 percent unfavorable currency impact.
The increase in price was driven by strong execution globally, led by North America and Latin America, with global corn and
soybean prices up 9 percent and 11 percent, respectively. Volume gains in Latin America corn and North America soybeans
were offset by reduced corn acres in North America and supply constraints in North America canola. Enlist E3TM soybean
market penetration reached over 45 percent of total North American acres. Unfavorable currency impacts were led by the
Turkish Lira and the Euro, partially offset by the Brazilian Real.
Seed operating EBITDA was $1,656 million in 2022, up 10 percent from $1,512 million in 2021. Price execution and ongoing
cost and productivity actions more than offset higher input and freight costs, the unfavorable impact of currency, lower volumes
in North America, and increased investment in R&D. Segment operating EBITDA margin improved by approximately 45 basis
points versus the prior-year period.
Crop ProtectionFo
In millions
Net sales$
7,754 $
Segment operating EBITDA
Crop Protection2023 vs. 2022
In millions
North America
EMEA
Latin America
Asia Pacific
Total
Crop Protection2023 vs. 2022
In millions
Herbicides
Insecticides
Fungicides
Other
Total
Crop Protection2022 vs. 2021
In millions
North America
EMEA
Latin America
Asia Pacific
Total
$
$
$
$
$
$
(294)
98
(418)
(108)
(722)
(557)
(233)
(338)
406
(722)
8,476 $
7,253
Net Sales Change
%
$
r the Year Ended December 31,
2023
2022
2021
$
1,374 $
1,684 $
1,202
Price &Po
Product Mix
— %
12 %
(4)%
4 %
%
(9)%
6 %
(16)%
(11)%
(9)%2
Percent Change Due To:
Volume
Currency
rtfolio /
Other
(10)%
(4)%
(26)%
(10)%
(14)%
— %
(4)%2 %
2 %
(5)%
(1)%
1 %
12 %
— %
4 %
Net Sales Change
%
$
Price &Po
Product Mix
1 %
2 %
3 %
Percent Change Due To:
Volume
Currency
(12)%
(12)%
(25)%
(14)%
(1)%
(1)%
(1)%
%
(1)%
%(5)%1
%
(12)%
(13)%
(23)%
67 %1
(9)%2
rtfolio /
Other
— %
(2)%
— %
70 %
4 %
rtfolio /
Other
Percent Change Due To:
Volume
Currency
10 %
15 %
10 %2
(1)%
(1)%— %
(14)%
%
(5)%
— %
— %
(3)%
%(3)%
— %
Net Sales Change
%
$
584
123
562
(46)
1,223
Price &Po
Product Mix
%
7 %
14 %
%
11 %9
23 %14
8 %
26 %
(4)%5
17 %
42
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Crop Protection2022 vs. 2021
Percent Change Due To:
In millions
Herbicides
Insecticides
Fungicides
Other
Total
Net Sales Change
%
$
Price &Po
Product Mix
Volume
Currency
$
$
776
101
140
206
1,223
20 %15
6 %
11 %6
52 %7
17 %
%8
7 %
%
%
11 %9
%
3 %
10 %
47 %
(3)%
(4)%
(3)%
(2)%
%(3)%
— %
rtfolio /
Other
— %
— %
(2)%
— %
Crop Protection
Crop protection net sales were $7,754 million in 2023, down 9 percent from $8,476 million in 2022. The decrease was driven
by a 14 percent decrease in volume and a 1 percent unfavorable impact from currency, partially offset by a 4 percent favorable
impact from portfolio and a 2 percent increase in price.
The decrease in volume was driven by strategic product exits, channel inventory destocking, and delayed farmer purchases. The
increase in price was led by EMEA, and mostly reflected pricing for the value of our differentiated technology, including new
products, and currency in EMEA, partially offset by challenging market dynamics in Latin America and North America.
Unfavorable currency impacts were led by the Turkish Lira and Chinese Renminbi. The portfolio impact was driven by the
Biologicals acquisitions, which added approximately $420 million of net sales.
Segment Operating EBITDA was $1,374 million in 2023, down 18 percent from $1,684 million from 2022. Pricing execution,
productivity actions, and the favorable impact from the Biologicals acquisitions were more than offset by lower volumes,
higher input costs, and the unfavorable impact of currency. Segment operating EBITDA margin declined by 215 basis points
versus the prior-year period.
Crop protection net sales were $8,476 million in 2022, up 17 percent from $7,253 million in 2021. The increase was driven by
an 11 percent increase in price and a 9 percent increase in volumes. These gains were partially offset by a 3 percent unfavorable
currency impact.
The increase in price, led by North America and Latin America, reflected pricing for higher raw material and logistical costs
and the value of our differentiated technology. The increase in volume was driven by continued penetration of new products,
including EnlistTM and ArylexTM herbicides and IsoclastTM insecticide, with new product sales up 33 percent compared to the
same period last year. Unfavorable currency impacts were led by the Euro and the Turkish Lira, partially offset by the Brazilian
Real.
Segment Operating EBITDA was $1,684 million in 2022, up 40 percent from $1,202 million from 2021. Pricing and volume
gains and productivity actions more than offset higher input costs, including raw material costs, and the unfavorable impact of
currency. Segment operating EBITDA margin improved by approximately 330 basis points versus the prior-year period largely
driven by pricing execution and new and differentiated technology.
43
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Non-GAAP Financial Measures
The company presents certain financial measures that do not conform to U.S. GAAP and are considered non-GAAP measures.
These measures include Operating EBITDA and operating earnings (loss) per share. 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 below.
Operating EBITDA is defined as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before
interest, depreciation, amortization, non-operating benefits (costs), foreign exchange gains (losses), and net unrealized gain or
loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting,
excluding the impact of significant items. Non-operating benefits (costs) consists of non-operating pension and OPEB credits
(costs), tax indemnification adjustments, environmental remediation and legal costs associated with legacy businesses and sites,
and the 2021 officer indemnification payment. 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 earnings (loss) per share is defined as "earnings (loss) per
common share from continuing operations - diluted" excluding the after-tax impact of significant items, the after-tax impact of
non-operating benefits (costs), the after-tax impact of amortization expense associated with intangible assets existing as of the
Separation from DowDuPont, and the after-tax impact of net unrealized gain or loss from mark-to-market activity for certain
foreign currency derivative instruments that do not qualify for hedge accounting. 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. Net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative
instruments that do not qualify for hedge accounting represents the non-cash net gain (loss) from changes in fair value of certain
undesignated foreign currency derivative contracts. Upon settlement, which is within the same calendar year of execution of the
contract, the realized gain (loss) from the changes in fair value of the non-qualified foreign currency derivative contracts will be
reported in the relevant non-GAAP financial measures, allowing quarterly results to reflect the economic effects of the foreign
currency derivative contracts without the resulting unrealized mark to fair value volatility.
The company also uses Free Cash Flow as a non-GAAP measure to evaluate and discuss its liquidity position and ability to
generate cash. Free Cash Flow is defined as cash provided by (used for) operating activities – continuing operations, less capital
expenditures. Management believes that Free Cash Flow provides investors with meaningful information regarding the
company’s ongoing ability to generate cash through core operations, and the company’s ability to service its indebtedness, pay
dividends (when declared), make share repurchases, and meet its ongoing cash needs for its operations. The company made the
decision, which was retrospectively applied, to adjust the presentation of the Consolidated Statement of Cash Flows to
separately show the cash provided by (used for) operating activities – discontinued operations, which was previously presented
within cash provided by (used for) operating activities. See Note 1 – Background and Basis of Presentation, to the Consolidated
Financial Statements, for additional information. As a result, the definition for Free Cash Flow was revised to utilize cash
provided by (used for) operating activities – continuing operations. The change in definition did not have a material impact to
prior years’ Free Cash Flow. Management made this decision to better present the liquidity generated from the company’s
ongoing business operations. Under the revised definition, Free Cash Flow was $307 million and $2,196 million for the years
ended December 31, 2022 and 2021, respectively.
44
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Reconciliation of Income (Loss) from Continuing Operations after Income Taxes to Operating EBITDA
Part II
(In millions)
Income (loss) from continuing operations after income taxes
Provision for (benefit from) income taxes on continuing operations
Income (loss) from continuing operations before income taxes
Depreciation and amortization
Interest income
Interest expense
Exchange (gains) losses
Non-operating (benefits) costs 1
Mark-to-market (gains) losses on certain foreign currency contracts not
designated as hedges
Significant items (benefit) charge
Operating EBITDA (Non-GAAP)
$
$
Year Ended December 31,
2022
2021
2023
941 $
152
1,093
1,211
(283)
233
397
151
—
579
3,381 $
1,216 $
210
1,426
1,223
(124)
79
229
(111)
—
502
3,224 $
1,822
524
2,346
1,243
(77)
30
54
(1,256)
—
236
2,576
1. The year ended December 31, 2021 includes non-cash benefits related to the 2020 OPEB Plan Amendments. Refer to Note 18 - Pension Plans and Other
Post-Employment Benefits, to the Consolidated Financial Statements, for additional information.
Significant Items
(In millions)
Restructuring and asset related charges - net
Estimated settlement expense 1
Inventory write-offs 2
Spare parts write-off 3
(Gain) loss on sale of business, assets and equity investments 2
Settlement costs associated with the Russia Exit 2
Seed sale associated with Russia Exit 2,4
Acquisition-related costs 5
Employee Retention Credit
Equity securities mark-to-market gain
Contract termination
AltEn facility remediation charges
Total pretax significant items (benefit) charge
Total tax (benefit) charge impact of significant items 6
Tax only significant item (benefit) charge 7
Total significant items (benefit) charge, net of tax
Year Ended December 31,
2022
2021
2023
$
$
336 $
204
7
12
(14)
—
(18)
45
(3)
—
—
10
579
(131)
(45)
403 $
363 $
87
33
—
(10)
8
(3)
—
(9)
—
—
33
502
(102)
(133)
267 $
289
—
—
—
—
—
—
—
(60)
(47)
54
—
236
(51)
(9)
176
1. Consists of estimated Lorsban® related charges.
2. Incremental gains (losses) associated with activities related to the 2022 Restructuring Actions.
3. Incremental loss associated with activities related to the Crop Protection Operations Strategy Restructuring Program.
4. Includes a benefit of $18 million and $3 million for the years ended December 31, 2023 and 2022, respectively, relating to the sale of seeds already under
production in Russia when the decision to exit the country was made and that the company was contractually required to purchase. It consists of $71 million
and $8 million of net sales and $53 million and $5 million of cost of goods sold for the years ended December 31, 2023 and 2022, respectively.
5. Relates to acquisition-related costs, including transaction and third-party integration costs associated with the completed acquisitions of Stoller and Symborg
as well as the recognition of the inventory fair value step-up. See Note 4 - Business Combinations, to the Consolidated Financials Statements, for additional
information.
6. Unless specifically addressed 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.
7. The tax only significant item benefit for the year ended December 31, 2023 relates to the impact of changes to deferred taxes and a tax currency change for
legal entities within Switzerland of $(62) million and $(24) million, respectively, as well as adjustments due to intellectual property realignment of $46
million and a change in estimate related to a worthless stock deduction in the U.S. The tax only significant item benefit for the year ended December 31,
2022 relates to the impact of a change in a U.S. legal entity's tax characterization, resulting in the establishment of deferred taxes, the release of a valuation
45
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
allowance recorded against the net deferred tax asset position of a legal entity in Brazil and a worthless stock deduction in the U.S. of $(55) million, $(36)
million, and $(42) million, respectively. The tax only significant item benefit for the year ended December 31, 2021 reflects a net benefit for the impact of
changes in valuation allowances recorded against the net deferred tax asset positions of two legal entities in Brazil of $(57) million and $44 million, as well
as an adjustment related to the impacts of Swiss Tax Reform of $4 million.
Reconciliation of Income (Loss) from Continuing Operations Attributable to Corteva and Earnings (Loss) Per Share of
Common Stock from Continuing Operations - Diluted to Operating Earnings (Loss) and Operating Earnings (Loss) Per
Share
(In millions)
Income (loss) from continuing operations attributable to Corteva common
stockholders
Less: Non-operating benefits (costs), after tax
Less: Amortization of intangibles (existing as of Separation), after tax
Less: Mark-to-market gains (losses) on certain foreign currency contracts not
designated as hedges, after tax
Less: Significant items benefit (charge), after tax
Operating Earnings (Loss) (Non-GAAP)
$
$
Year Ended December 31,
2022
2021
2023
929 $
(111)
(471)
—
(403)
1,914 $
1,205 $
80
(542)
—
(267)
1,934 $
1,812
955
(562)
—
(176)
1,595
Year Ended December 31,
2022
2021
2023
Earnings (loss) per share of common stock from continuing operations
attributable to Corteva common stockholders - diluted$
1.30 $
Less: Non-operating benefits (costs), after tax
Less: Amortization of intangibles (existing as of Separation), after tax
Less: Mark-to-market gains (losses) on certain foreign currency contracts not
designated as hedges, after tax
Less: Significant items benefit (charge), after tax
Operating Earnings (Loss) Per Share (Non-GAAP)
Diluted Shares Outstanding (in millions)
$
1.66 $
2.44
(0.16)
(0.66)
—
(0.57)
2.69 $
711.9
0.11
(0.75)
—
(0.37)
2.67 $
724.5
1.29
(0.76)
—
(0.24)
2.15
741.6
Reconciliation of Cash Provided by (Used for) Operating Activities – Continuing Operations to Free Cash Flow
(In millions)
Cash provided by (used for) operating activities - continuing operations
Less: Capital expenditures
Free Cash Flow (Non-GAAP)
Year Ended December 31,
2022
2021
2023
$
$
1,809 $
(595)
1,214 $
912 $
(605)
307 $
2,769
(573)
2,196
Liquidity & Capital Resources
The company continually reviews its sources of liquidity and debt portfolio and occasionally may make adjustments to one or
both to ensure adequate liquidity.
(Dollars in millions)
Cash, cash equivalents and marketable securities
Total debt
December 31, 2023 December 31, 2022
3,315
$
1,307
$
2,742 $
2,489 $
46
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
The company's credit ratings impact its access to the debt capital markets and cost of capital. The company remains committed
to a strong financial position and strong investment-grade rating. The company's long-term and short-term credit ratings
assigned to EIDP are as follows:
Standard & Poor's1
Moody’s Investors ServiceA3
Fitch Ratings1
Long-term
A-
A
Short-term
A-2St
P-2St
F1
Outlook
able
able
Stable
1. In addition, Corteva, Inc. has been assigned a long-term issuer credit rating of A- with Stable outlook by Standard & Poor's and an Issuer Default Rating of
A with Stable outlook by Fitch Ratings.
The company believes its ability to generate cash from operations and access to capital markets and commercial paper markets
will be adequate to meet anticipated cash requirements to fund its operations, including seasonal working capital, capital
spending, dividend payments, share repurchases and pension obligations. Corteva's strong financial position, liquidity and credit
ratings will provide access as needed to capital markets and commercial paper markets to fund seasonal working capital needs.
The company's liquidity needs can be met through a variety of sources, including cash provided by operating activities,
commercial paper, syndicated credit lines, bilateral credit lines, long-term debt markets, bank financing and committed
receivable repurchase facilities. Corteva considers the borrowing costs and lending terms when selecting the source to fund its
operations and working capital needs.
The company had access to approximately $6.0 billion at December 31, 2023 and 2022 in committed and uncommitted unused
credit lines, which includes the uncommitted revolving credit lines relating to the Foreign Currency Loans. These facilities
provide support to meet the company’s short-term liquidity needs and for general corporate purposes, which may include
funding of discretionary and non-discretionary contributions to certain benefit plans, severance payments, repayment and
refinancing of debt, working capital, capital expenditures, repurchases and redemptions of securities, funding of acquisitions
and funding Corteva's costs and expenses. These facilities are provided to the company by highly rated and well capitalized
global financial institutions.
In May 2023, the company issued $600 million of 4.50 percent Senior Notes due in 2026 and $600 million of 4.80 percent
Senior Notes due in 2033 (the “May 2023 Debt Offering”).
In January 2023, the company amended and restated its May 2022 364-day revolving credit agreement (the “364-Day
Revolving Credit Facility”) increasing the facility amount to $1 billion and extending the expiration date to January 2024.
Borrowings under the 364-Day Revolving Credit Facility have an interest rate equal to Adjusted Term SOFR, which is Term
SOFR plus 0.10 percent, plus the applicable margin. The 364-Day Revolving Credit Facility includes a provision under which
the company may convert any advances outstanding prior to the maturity date into term loans having a maturity date up to one
year later. In February 2023, the company drew down $1 billion under the 364-Day Revolving Credit Facility, which was used
for general corporate purposes, including funding seasonal working capital needs, capital spending, dividend payments, share
repurchases and to partially fund the Stoller and Symborg acquisitions. In May 2023, the company repaid the $1 billion loan
using the proceeds from the May 2023 Debt Offering and subsequently, in July 2023, reduced the available credit from $1
billion to $500 million. In January 2024, the company amended and restated the 364-Day Revolving Credit Facility to extend
the expiration date to February 26, 2024. The 364-Day Revolving Credit Facility contains customary representations and
warranties, affirmative and negative covenants and events of default that are typical for companies with similar credit ratings.
Additionally, the 364-Day Revolving Credit Facility contains a financial covenant requiring that the ratio of total indebtedness
to total capitalization for Corteva and its consolidated subsidiaries not exceed 0.60. At December 31, 2023, the company was in
compliance with these covenants.
In May 2022, EIDP entered into a $3 billion, 5 year revolving credit facility and a $2 billion, 3-year revolving credit facility
(the "Revolving Credit Facilities”) expiring in May 2027 and May 2025, respectively. Borrowings under the revolving credit
facilities have an interest rate equal to Adjusted Term SOFR, which is Term SOFR plus 0.10 percent, plus the applicable
margin. The Revolving Credit Facilities may serve as a substitute to the company's commercial paper program, and can be used
from time to time, for general corporate purposes including, but not limited to, the funding of seasonal working capital needs.
The Revolving Credit Facilities contain customary representations and warranties, affirmative and negative covenants and
events of default that are typical for companies with similar credit ratings. Additionally, the Revolving Credit Facilities contain
47
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
a financial covenant requiring that the ratio of total indebtedness to total capitalization for Corteva and its consolidated
subsidiaries not exceed 0.60. At December 31, 2023, the company was in compliance with these covenants.
In May 2020, EIDP issued $500 million of 1.70 percent Senior Notes due 2025 and $500 million of 2.30 percent Senior Notes
due 2030 (the May 2020 Debt Offering). The proceeds of this offering were used for general corporate purposes.
The company enters into short-term and long-term foreign currency loans from time-to-time by accessing uncommitted
revolving credit lines to fund working capital needs of foreign subsidiaries in the normal course of business (“Foreign Currency
Loans”). Interest rates are variable and determined at the time of borrowing. Total unused bank credit lines on the Foreign
Currency Loans at December 31, 2023 was approximately $50 million. The company’s long-term Foreign Currency Loans have
varying maturities throughout 2024.
The company's indenture covenants include customary limitations on liens, sale and leaseback transactions, and mergers and
consolidations affecting manufacturing plants, mineral producing properties or research facilities located in the U.S. and the
consolidated subsidiaries owning such plants, properties and facilities subject to certain limitations. The outstanding long-term
debt also contains customary default provisions.
In September 2023 and in accordance with the Nationwide Water District Settlement, Chemours, DuPont and Corteva
established a settlement fund (the “Water District Settlement Fund”) and collectively contributed $1.185 billion, with Chemours
contributing 50 percent, and DuPont and Corteva collectively contributing the remaining 50 percent pursuant to the terms of the
Letter Agreement. The settling companies utilized the balance in the MOU Escrow Account, along with amounts previously
expected to be contributed to the MOU Escrow Account in 2023, among other sources, to make their respective contributions to
the Water District Settlement Fund. Refer to Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial
Statements, for additional information.
The company has meaningful seasonal working capital needs based in part on providing financing to its customers. Working
capital is funded through multiple methods including cash, commercial paper, a receivable repurchase facility, the Revolving
Credit Facilities, the 364-day Revolving Credit Facility, and factoring.
In May 2023, in line with seasonal working capital requirements, the company entered into a committed receivable repurchase
facility of up to $500 million (the "2023 Repurchase Facility") which expired in December 2023. Under the 2023 Repurchase
Facility, Corteva sold a portfolio of available and eligible outstanding customer notes receivables to participating institutions
and simultaneously agreed to repurchase at a future date.
The company has factoring agreements with third-party financial institutions to sell its trade receivables under both recourse
and non-recourse agreements in exchange for cash proceeds in an effort to reduce its receivables risk. For arrangements that
include an element of recourse, the company provides a guarantee of the trade receivables in the event of customer default.
Refer to Note 10 - Accounts and Notes Receivable - Net, to the Consolidated Financial Statements for more information.
The company also organizes agreements with third-party financial institutions who directly provide financing for select
customers of its seed and crop protection products in each region. Terms of the third-party loans are less than a year and
programs are renewed on an annual basis. In some cases, the company guarantees a portion of the extension of such credit to
such customers. Refer to Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for
more information on the company’s guarantees.
The company's cash, cash equivalents and marketable securities at December 31, 2023 and 2022 are $2.7 billion and $3.3
billion, respectively, of which $2.2 billion and $2.0 billion, respectively, was held by subsidiaries in foreign countries, including
United States territories. Cash, cash equivalents and marketable securities are concentrated subject to local restrictions with
highly rated and well capitalized global financial institutions. The underlying credit worthiness and exposures to these
counterparties are monitored on a regular basis in line with the company’s overall risk management procedures. Upon actual
repatriation, such earnings could be subject to withholding taxes, foreign and/or U.S. state income taxes, and taxes resulting
from the impact of foreign currency movements. The cash held by foreign subsidiaries is generally used to finance the
subsidiaries' operational activities and future foreign investments. At December 31, 2023, management believed that sufficient
liquidity is available in the U.S. with global operating cash flows, borrowing capacity from existing committed credit facilities,
and access to capital markets and commercial paper markets
48
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
Part II
OPERATIONS, continued
Summary of Cash Flows
(Dollars in millions)
Cash provided by (used for) operating activities – continuing operations
For the Year Ended December 31,
2021
2022
2023
$
1,809 $
912 $
2,769
Cash provided by (used for) operating activities – continuing operations for the year ended December 31, 2023 was $1,809
million compared to $912 million for the year ended December 31, 2022. The change was primarily driven by favorable
changes in receivables due to lower crop protection sales and higher collections as well as favorable changes in inventories due
to higher seed sales and lower crop protection purchases. Partially offsetting these sources of cash were lower accounts payable
driven by higher payments to third-party growers and higher seed production costs and the timing of payments to lenders for
providing financing to select customers.
Cash provided by (used for) operating activities – continuing operations for the year ended December 31, 2022 was $912
million compared to $2,769 million for the year ended December 31, 2021. The change was primarily driven by higher earnings
offset by changes in working capital primarily driven by an increase in inventories reflecting a rebuild of safety stocks to
support growth, higher input and commodity costs as well as the impact from market volatility, higher receivables from revenue
growth and changes in deferred revenue due to lower increases in prepayments from customers.
(Dollars in millions)
Cash provided by (used for) operating activities – discontinued operations $
For the Year Ended December 31,
2021
2022
2023
(40) $
(40) $
(42)
Cash provided by (used for) operating activities – discontinued operations for the years ended December 31, 2023 and 2022
was $(40) million. The cash outflows were primarily related to PFAS activities that are subject to the MOU with Chemours and
DuPont associated with environmental remediation activities primarily at Chemours’ Fayetteville Works facility and certain
legal matters, which were paid in 2023.
Cash provided by (used for) operating activities – discontinued operations for the year ended December 31, 2022 was $(40)
million compared to $(42) million for the year ended December 31, 2021. The change was primarily related to PFAS activities
that are subject to the MOU with Chemours and DuPont associated with environmental remediation activities primarily at
Chemours’ Fayetteville Works facility and certain legal matters, which were paid in 2022.
(Dollars in millions)
Cash provided by (used for) investing activities
For the Year Ended December 31,
2021
2022
2023
$
(1,987) $
(632) $
(362)
Cash provided by (used for) investing activities was $(1,987) million for the year ended December 31, 2023 compared to
$(632) million for the year ended December 31, 2022. The change was primarily due to the acquisitions of Stoller and Symborg
and lower proceeds from sales and maturities of investments, partially offset by lower purchases of investments and the
proceeds from the settlement of the net investment hedge.
Cash provided by (used for) investing activities was $(632) million for the year ended December 31, 2022 compared to $(362)
million for the year ended December 31, 2021. The change was primarily due to higher purchases of investments, lower
proceeds from sales and maturities of investments, escrow funding associated with acquisitions and higher capital expenditures.
Capital expenditures totaled $595 million, $605 million, and $573 million for the years ended December 31, 2023, 2022 and
2021, respectively. The company expects 2024 capital expenditures to be approximately $630 million.
49
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
(Dollars in millions)
Cash provided by (used for) financing activities
For the Year Ended December 31,
2021
2022
2023
$
(99) $
(1,180) $
(1,266)
Cash provided by (used for) financing activities was $(99) million for the year ended December 31, 2023 compared to $(1,180)
million for the year ended December 31, 2022. The change was primarily due to the May 2023 Debt Offering and higher
borrowings to fund working capital needs, capital spending, dividend payments, share repurchases and to partially fund the
Stoller and Symborg acquisitions. The change was also driven by lower share repurchases.
Cash provided by (used for) financing activities was $(1,180) million for the year ended December 31, 2022 compared to
$(1,266) million for the year ended December 31, 2021. The change was primarily due to higher borrowings partially offset by
higher repurchases of common stock, lower proceeds from stock options and higher dividends paid to stockholders.
During 2023, the company's Board of Directors authorized and paid quarterly dividends on its common stock of $0.15 in the
first and second quarters and $0.16 in third and fourth quarters, respectively.
On September 13, 2022, Corteva, Inc. announced that its Board of Directors authorized a $2 billion share repurchase program
to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2022 Share Buyback Plan").
The timing, price and volume of purchases in connection with the 2022 Share Buyback Plan will be based on market
conditions, relevant securities laws and other factors. In connection with the 2022 Share Buyback Plan, the company
repurchased and retired 10,026,000 shares in the open market for a cost (excluding excise taxes) of $500 million during the year
ended December 31, 2023.
On August 5, 2021, the company's Board of Directors authorized a $1.5 billion share repurchase program to purchase Corteva,
Inc.'s common stock, par value $0.01 per share, without an expiration date (“2021 Share Buyback Plan”). The company
completed the 2021 Share Buyback Plan during the first quarter of 2023 and repurchased and retired 4,098,000, 17,425,000 and
5,572,000 shares in the open market for a total cost of $250 million, $1 billion, and $250 million during the years ended
December 31, 2023, 2022 and 2021, respectively.
On June 26, 2019, the company's Board of Directors authorized a $1 billion share repurchase program to purchase Corteva,
Inc.'s common stock, par value $0.01 per share, without an expiration date ("2019 Share BuyBack Plan"). The company
completed the 2019 Share Buyback Plan during the third quarter of 2021 and repurchased and retired 24,705,000 shares
between the years ended December 31, 2019 and 2021 in the open market. See Note 17 - Stockholders' Equity, to the
Consolidated Financial Statements, for additional information related to the share buyback plans.
For the full year 2024, the company expects repurchases of approximately $1.0 billion under the 2022 Share Buyback Plan
discussed above. The total amount, timing, price and volume of purchases will be based on market conditions, relevant
securities laws and other market and company specific factors.
EIDP Liquidity Discussion
As discussed in Note 1 - Basis of Presentation, to the EIDP Consolidated Financial Statements, EIDP is a subsidiary of Corteva,
Inc. and continues to be a reporting company, subject to the requirements of the Exchange Act. The below relates to EIDP only
and is presented to provide a Liquidity discussion, only for the differences between EIDP and Corteva, Inc.
Cash provided by (used for) operating activities - continuing operations
EIDP’s cash provided by (used for) operating activities - continuing operations for the year ended December 31, 2023 was
$1,408 million compared to $879 million for the year ended December 31, 2022. The change was primarily driven by the items
noted on page 49, under the header "Cash provided by (used for) operating activities - continuing operations," as well as
changes in the balance of the related party Master In-House Banking Agreement where EIDP and Corteva, Inc. are Participating
Companies.
EIDP’s cash provided by (used for) operating activities - continuing operations for the year ended December 31, 2022 was $879
million compared to $2,731 million for the year ended December 31, 2021. The change was primarily driven by the items noted
on page 49, under the header "Cash provided by (used for) operating activities - continuing operations."
50
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Cash provided by (used for) operating activities - discontinued operations
EIDP’s cash provided by (used for) operating activities - discontinued operations for the year ended December 31, 2023 was
$(40) million compared to $(40) million for the year ended December 31, 2022. The change was primarily driven by the items
noted on page 49, under the header "Cash provided by (used for) operating activities - discontinued operations."
EIDP’s cash provided by (used for) operating activities - discontinued operations for the year ended December 31, 2022 was
$(40) million compared to $(42) million for the year ended December 31, 2021. The change was primarily driven by the items
noted on page 49, under the header "Cash provided by (used for) operating activities - discontinued operations."
Cash provided by (used for) investing activities
EIDP’s cash provided by (used for) investing activities for the year ended December 31, 2023 was $(1,987) million compared
to $(632) million for the year ended December 31, 2022. The change was primarily driven by the items noted on page 49, under
the header "Cash provided by (used for) investing activities."
EIDP’s cash provided by (used for) investing activities for the year ended December 31, 2022 was $(632) million compared to
$(362) million for the year ended December 31, 2021. The change was primarily driven by the items noted on page 49, under
the header "Cash provided by (used for) investing activities."
Cash provided by (used for) financing activities
EIDP’s cash provided by (used for) financing activities was $302 million for the year ended December 31, 2023 compared to
$(1,147) million for the year ended December 31, 2022. The change was primarily due to the May 2023 Debt Offering and
higher borrowings to fund working capital needs, capital spending, dividend payments and to partially fund the Stoller and
Symborg acquisitions. The change was also driven by lower payments on related party debt.
EIDP’s cash provided by (used for) financing activities was $(1,147) million for the year ended December 31, 2022 compared
to $(1,228) million for the year ended December 31, 2021. The change was primarily driven by higher borrowings partially
offset by higher payments on debt.
See Note 2 - Related Party Transactions, to the EIDP Consolidated Financial Statements for further information on the related
party loan between EIDP and Corteva, Inc.
Critical Accounting Estimates
The company's significant accounting policies are more fully described in Note 2 - Summary of Significant Accounting
Policies, to the Consolidated Financial Statements. Management believes that the application of these policies on a consistent
basis enables the company to provide the users of the financial statements with useful and reliable information about the
company's operating results and financial condition.
The preparation of the Consolidated Financial Statements in conformity with generally accepted accounting principles
("GAAP") in the United States of America requires management to make estimates and assumptions that affect the reported
amounts, including, but not limited to, receivable and inventory valuations, impairment of tangible and intangible assets, long-
term employee benefit obligations, income taxes, environmental matters and litigation. Management's estimates are based on
historical experience, facts and circumstances available at the time and various other assumptions that are believed to be
reasonable. The company reviews these matters and reflects changes in estimates as appropriate. Management believes that the
following represent the more critical judgment areas in the application of the company's accounting policies which could have a
material effect on the company's financial position, liquidity or results of operations.
Pension Plans and Other Post-Employment Benefits
Accounting for employee benefit plans involves assumptions and estimates. Discount rate and expected long-term rate of return
on plan assets are two critical assumptions in measuring the cost and benefit obligation of the company's pension and OPEB
plans. Management reviews these two key assumptions when plans are re-measured. These and other assumptions are updated
periodically to reflect the actual experience and expectations on a plan specific basis as appropriate. As permitted by GAAP,
actual results that differ from the assumptions are accumulated on a plan by plan basis and to the extent that such differences
exceed 10 percent of the greater of the plan's benefit obligation or the applicable plan assets, the excess is amortized over the
average remaining service period of active employees or the average remaining life expectancy of plan participants if all or
almost all of a plan’s participants are inactive.
51
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Most of the company's benefit obligation for pensions and OPEB are attributable to the U.S. benefit plans. For U.S. benefit
plans, the single equivalent discount rate is developed by matching the expected cash flow of the benefit plans to a yield curve
constructed from a portfolio of high quality fixed-income instruments provided by the plans' actuaries as of the measurement
date. The company measures the service and interest cost components utilizing a full yield curve approach by applying the
specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.
For the non-U.S. benefit plans, the company primarily utilizes prevailing long-term high quality corporate bond indices to
determine the discount rate, applicable to each country, at the measurement date. The weighted average discount rates used in
developing the expected 2024 net periodic pension and OPEB costs were 4.97 percent and 4.92 percent, respectively.
For the U.S. plan, the company establishes strategic asset allocation percentage targets and appropriate benchmarks for
significant asset classes with the aim of achieving a prudent balance between return and risk. Where appropriate, asset-liability
studies are also taken into consideration. The expected long-term rate of return on plan assets is based upon historical real
returns (net of inflation) for the asset classes covered by the investment policy, expected performance, and projections of
inflation and interest rates over the long-term period during which benefits are payable to plan participants. In determining the
2023 net periodic pension cost in the U.S., an assumption of 4.50 percent for expected long-term rate of return on plan assets
was used. After re-evaluating the current strategic asset allocation and recent market conditions, the company kept the expected
long-term rate of return on plan assets assumption at 4.50 percent to be used in determining the 2024 net periodic pension cost
in the U.S. Consistent with prior years, the expected long-term rate of return on plan assets in the U.S. reflects the asset
allocation of the plan and the effect of the company's active management of the plan's assets. For the non-U.S. plans, the
strategic asset allocations are selected in accordance with the laws and practices for each country.
In determining annual expense for the principal U.S. pension plan, the company uses a market-related value of assets rather
than its fair value. Accordingly, there may be a lag in recognition of changes in market valuation. As a result, changes in the fair
value of assets are not immediately reflected in the company's calculation of net periodic pension cost. For the years ended
December 31, 2023 and 2022, the market-related value of assets is calculated by averaging market returns over 36 months.
The following table shows the market-related value and fair value of plan assets for the principal U.S. pension plan:
(Dollars in billions)
Market-related value of assets
Fair value of plan assets
December 31,
2023
December 31,
2022
December 31,
2021
$
11.9 $
11.4
13.6 $
12.3
17.2
17.5
For plans other than the principal U.S. pension plan, pension expense is determined using the fair value of assets.
The following table highlights the potential impact on the company's pre-tax earnings due to changes in certain key assumptions
with respect to the company's pension and OPEB plans, based on assets and liabilities at December 31, 2023:
Pre-tax Earnings Benefit (Charge)
(Dollars in millions)
Discount rate
Expected rate of return on plan assets
1/4 Percentage
Point
Increase
1/4 Percentage
Point
Decrease
$
(15) $
29
18
(29)
Additional information with respect to pension and OPEB expenses, liabilities and assumptions is discussed under "Long-Term
Employee Benefits" beginning on page 57 and in Note 18 - Pension Plans and Other Post-Employment Benefits, to the
Consolidated Financial Statements.
Environmental Matters
Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the
liability can be reasonably estimated. At December 31, 2023, the company had accrued obligations of $501 million for probable
environmental remediation and restoration costs, including $55 million for the remediation of Superfund sites. As remediation
activities vary substantially in duration and cost from site to site, it is difficult to develop precise estimates of future site
remediation costs. The company's estimates are based on a number of factors, including the complexity of the geology, the
nature and extent of contamination, the type of remedy, the outcome of discussions with regulatory agencies and other
52
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Potentially Responsible Parties ("PRPs") at multi-party sites and the number of and financial viability of other PRPs. Therefore,
considerable uncertainty exists with respect
to environmental remediation and costs, and, under adverse changes in
circumstances, it is reasonably possible that the ultimate cost with respect to these particular matters could range up to
approximately $655 million above the accrued obligations amount. Consequently, it is reasonably possible that environmental
remediation and restoration costs in excess of amounts accrued could have a material impact on the company’s results of
operations, financial condition and cash flows. It is the opinion of the company’s management, however, that the possibility is
remote that costs in excess of the range disclosed will have a material impact on the company’s results of operations, financial
condition or cash flows. For further discussion, see "Environmental Matters" section on page 58 and Note 16 - Commitments
and Contingent Liabilities, to the Consolidated Financial Statements.
Legal Contingencies
The company's results of operations could be affected by significant litigation adverse to the company, including product
liability claims, patent infringement and antitrust claims, and claims for third-party property damage or personal injury
stemming from alleged environmental torts. The company records accruals for legal matters when the information available
indicates that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
Management makes adjustments to these accruals to reflect the impact and status of negotiations, settlements, rulings, advice of
counsel and other information and events that may pertain to a particular matter. Predicting the outcome of claims and lawsuits
and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to vary materially from
estimates. In making determinations of likely outcomes of litigation matters, management considers many factors. These factors
include, but are not limited to, the nature of specific claims including unasserted claims, the company's experience with similar
types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the
matter through alternative dispute resolution mechanisms, and the matter's current status. Considerable judgment is required in
determining whether to establish a litigation accrual when an adverse judgment is rendered against the company in a court
proceeding. In such situations, the company will not recognize a loss if, based upon a thorough review of all relevant facts and
information, management believes that it is probable that the pending judgment will be successfully overturned on appeal. A
detailed discussion of significant litigation matters is contained in Note 16 - Commitments and Contingent Liabilities, to the
Consolidated Financial Statements.
Indemnification Assets
The company has entered into various agreements where the company is indemnified for certain liabilities by DuPont, Dow and
Chemours. 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. In assessing the probability of recovery, the
company considers the contractual rights under the separation agreements and any potential credit risk. Future events, such as
potential disputes related to recovery as well as the solvency of DuPont, Dow and/or Chemours, could cause the
indemnification assets to have a lower value than anticipated and recorded. The company evaluates the recovery of the
indemnification assets recorded when events or changes in circumstances indicate the carrying values may not be fully
recoverable. See Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for additional
information related to indemnifications.
Income Taxes
The breadth of the company's operations and the global complexity of tax regulations require assessments of uncertainties and
judgments in estimating taxes the company will ultimately pay. The final taxes paid are dependent upon many factors, including
negotiations with taxing authorities in various jurisdictions, outcomes of tax litigation and resolution of disputes arising from
federal, state and international tax audits in the normal course of business. The resolution of these uncertainties may result in
adjustments to the company's tax assets and tax liabilities. It is reasonably possible that changes to the company’s global
unrecognized tax benefits could be significant; however, due to the uncertainty regarding the timing of completion of audits and
possible outcomes, a current estimate of the range of increases or decreases that may occur within the next twelve months
cannot be made.
Deferred income taxes result from differences between the financial and tax basis of the company's assets and liabilities and are
adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred
tax assets when it is more likely than not that a tax benefit will not be realized. Significant judgment is required in evaluating
the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is
dependent on generating future taxable income, as well as successful implementation of various tax planning strategies. For
53
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
example, changes in facts and circumstances that alter the probability that the company will realize deferred tax assets could
result in recording a valuation allowance, thereby reducing the deferred tax asset and generating a deferred tax expense in the
relevant period. In some situations, these changes could be material.
At December 31, 2023, the company had a net deferred tax liability balance of $315 million, inclusive of a valuation allowance
of $510 million. Realization of deferred tax assets is expected to occur over an extended period of time. As a result, changes in
tax laws, assumptions with respect to future taxable income, and tax planning strategies could result in adjustments to deferred
tax assets.
See Note 8 - Income Taxes, to the Consolidated Financial Statements, for additional information.
Valuation of Assets and Impairment Considerations
The assets and liabilities of acquired businesses are measured at their estimated fair values at the dates of acquisition. The
excess of the purchase price over the estimated fair value of the net assets acquired, including identified intangible assets, is
recorded as goodwill. The determination and allocation of fair value to the assets acquired and liabilities assumed is based on
various assumptions and valuation methodologies requiring considerable management judgment, including estimates based on
historical information, current market data and future expectations. The principal assumptions utilized in the company's
valuation methodologies include revenue growth rates, EBITDA margin estimates, royalty rates, and discount rates. Although
the estimates are deemed reasonable by management based on information available at the dates of acquisition, those estimates
are inherently uncertain.
Assessment of the potential impairment of goodwill, other intangible assets, property, plant and equipment, investments in
nonconsolidated affiliates, and other assets is an integral part of the company's normal ongoing review of operations. Testing
for potential impairment of these assets is significantly dependent on numerous assumptions and reflects management's best
estimates at a particular point in time. The dynamic economic environment in which the company's segments operate, and key
economic and business assumptions with respect to projected selling prices, market growth and inflation rates, can significantly
affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results.
Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and
magnitude of impairments, as well as the time in which such impairments are recognized. In addition, the company continually
reviews its portfolio of assets to ensure they are achieving their greatest potential and are aligned with the company's growth
strategy. Strategic decisions involving a particular group of assets may trigger an assessment of the recoverability of the related
assets. Such an assessment could result in impairment losses.
The company tests goodwill and other indefinite-lived intangible assets for impairment annually (during the fourth quarter), or
more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of a reporting
unit has declined below its carrying value. Goodwill is evaluated for impairment using qualitative and / or quantitative testing
procedures. The company performs goodwill impairment testing at the reporting unit level, which is defined as the operating
segment or one level below the operating segment. One level below the operating segment, or component, is a business in
which discrete financial information is available and regularly reviewed by segment management. The company aggregates
certain components into reporting units based on economic similarities. The company’s reporting units included seed, crop
protection and digital until its April 2022 implementation of a global business unit organization model (“BU Reorganization”),
after which its reporting units are seed and crop protection. The BU Reorganization resulted in the company’s digital reporting
unit being merged into the seed and crop protection reporting units with the goodwill relating to the former digital reporting unit
being reassigned to the seed and crop protection reporting units using a relative fair value allocation approach.
For purposes of goodwill impairment testing, the company has the option to first perform qualitative testing to determine
whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors
assessed at the company level include GDP growth rates, long-term commodity prices, equity and credit market activity,
discount rates, and overall financial performance. Qualitative factors assessed at the reporting unit level include changes in
industry and market structure, competitive environments, planned capacity and new product launches, cost factors such as raw
material prices, and financial performance of the reporting unit. If the company chooses not to complete a qualitative
assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the carrying value of
a reporting unit exceeds its estimated fair value, additional quantitative testing is required.
54
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
If additional quantitative testing is required, the reporting unit’s fair value is compared with its carrying amount, and an
impairment charge, if any, is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value,
limited to the amount of goodwill associated with the reporting unit. The company determines fair values for each of the
reporting units using a discounted cash flow model (a form of the income approach), utilizing Level 3 unobservable inputs, or
the market approach.
Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an
appropriate risk-adjusted rate. The company’s significant assumptions in these analyses include future cash flow projections,
weighted average cost of capital, the terminal growth rate and the tax rate. The company’s estimates of future cash flows are
based on current regulatory and economic climates, recent operating results, and assumed business strategy from a market
participant perspective and includes an estimate of long-term future growth rates based on such strategy. Actual results may
differ from those assumed in the company’s forecasts. The company derives its discount rates using a capital asset pricing
model and analyzes published rates for industries relevant to its reporting units to estimate the cost of equity financing. The
company uses discount rates that are commensurate with the risks and uncertainty inherent in the respective reporting units and
in its internally developed forecasts. Under the market approach, the company uses metrics of publicly traded companies or
historically completed transactions for comparable companies.
As a result of the BU Reorganization, the company determined that a triggering event had occurred during the second quarter of
2022 that required an interim impairment assessment as of April 1, 2022. The interim impairment assessment was performed on
the seed, crop protection, and the former digital reporting units immediately prior to the BU Reorganization and for the seed
and crop protection reporting units immediately after the BU Reorganization resulting in no goodwill impairment charges.
Qualitative interim impairment assessments were performed for the seed and crop protection reporting units as of April 1, 2022.
Based on the qualitative assessment performed, it was more likely than not that the fair value of each reporting unit exceeded
the carrying value and therefore a quantitative test was not performed.
A quantitative impairment assessment was performed for the former digital reporting unit as of April 1, 2022 using a
combination of the discounted cash flow model (a form of the income approach) and the market approach. The discount rate
used in the company’s valuation was 19.0 percent.
Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of
factors including actual operating results. It is reasonably possible that the judgments and estimates described above could
change in future periods. The company believes the current assumptions and estimates utilized are both reasonable and
appropriate. Based on the quantitative annual goodwill impairment analyses performed in the fourth quarter 2023, which were
performed using the income approach, the company concluded the fair value of each of the reporting units exceeded their
respective carrying values by more than 50.0 percent, and no goodwill impairment charge was necessary. The discount rate
used in the company’s valuations was 10.3 percent.
Prepaid Royalties
The company’s seed segment currently has certain third-party biotechnology trait license agreements, which require up-front
and variable payments subject to the licensor meeting certain conditions. These payments are reflected as other current assets
and other assets and are amortized to cost of goods sold as seeds containing the respective trait technology are utilized over the
term of the license. The rate of royalty amortization expense recognized is based on the company’s strategic plans which
include various assumptions and estimates including product portfolio, market dynamics, farmer preferences, growth rates and
projected planted acres. Changes in factors and assumptions included in the strategic plans, including potential changes to the
product portfolio in favor of internally developed biotechnology, could impact the rate of recognition of the relevant prepaid
royalty.
At December 31, 2023, the balance of prepaid royalties reflected in other current assets and other assets was approximately
$105 million and $25 million, respectively. The majority of the balance of prepaid royalties in other current assets relates to the
company’s wholly owned subsidiary, Pioneer Hi-Bred International, Inc.’s (“Pioneer”) non-exclusive license in the United
States and Canada for the Monsanto Company's Genuity® Roundup Ready 2 Yield® glyphosate tolerance trait and Roundup
Ready 2 Xtend® glyphosate and dicamba tolerance trait for soybeans (“Roundup Ready 2 License Agreement”). The prepaid
royalty asset relates to a series of up-front, fixed and variable royalty payments to utilize the traits in Pioneer’s soybean product
mix. The company’s historical expectation was that the technology licensed under the Roundup Ready 2 License Agreement
55
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
would be used as the primary herbicide tolerance trait platform in the Pioneer® brand soybean through the term of the
agreement. DAS, the agriculture business of Historical Dow, and MS Technologies, L.L.C. jointly developed and own the
Enlist E3TM herbicide tolerance trait for soybeans, which provides tolerance to 2, 4-D choline in Enlist Duo® and Enlist One®
herbicides, as well as glyphosate and glufosinate herbicides. In connection with the validation of breeding plans and large-scale
product development timelines, during 2019 the company committed to accelerate the ramp up of the Enlist E3TM trait platform
in the company’s soybean portfolio mix across all brands, including Pioneer® brands. During the five-year ramp-up period, the
company has begun 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 thereafter for the remainder
of the Roundup Ready 2 License Agreement (the “Transition Plan”). As of December 31, 2023, Enlist E3TM trait platform has
grown to 58 percent of our soybean portfolio. Royalty expense has therefore significantly increased through higher amortization
of the prepaid royalty.
In connection with the departure from these traits in the company's product portfolio, beginning January 1, 2020 the company
presents and discloses the accelerated prepaid royalty amortization expense as a component of restructuring and asset related
charges - net in the Consolidated Statement of Operations. The accelerated prepaid royalty amortization expense represents the
difference between the rate of amortization based on the revised number of units expected to contain the Roundup Ready 2
Yield® and Roundup Ready 2 Xtend® trait technology and the per unit cash rate per the Roundup Ready 2 License Agreement.
For the year ended December 31, 2023, the company recognized charges of $72 million in restructuring and asset related
charges - net in the Consolidated Statement of Operations from non-cash accelerated prepaid royalty amortization expense. The
expected non-cash accelerated prepaid royalty amortization expense estimated for 2024 is approximately $60 million.
Further changes in factors and assumptions associated with usage of the trait platform licensed under the Roundup Ready 2
License Agreement, including the Transition Plan, could further impact the rate of recognition of the prepaid royalty and
Consolidated Statement of Operations presentation of the accelerated prepaid royalty amortization expense.
Off-Balance Sheet Arrangements
Certain Guarantee Contracts
Information with respect to the company's guarantees is included in Note 16 - Commitments and Contingent Liabilities, to the
the company has not made significant payments to satisfy guarantee
Consolidated Financial Statements. Historically,
obligations; however, the company believes it has the financial resources to satisfy these guarantees.
MOU Escrow Contributions
On January 22, 2021, Chemours, DuPont, Corteva and EIDP entered into a binding memorandum of understanding containing a
settlement to resolve legal disputes originating from the Delaware Litigation and Pending Arbitration, and to establish a cost
sharing arrangement for potential future legacy per- and polyfluoroalkyl substances (“PFAS”) liabilities arising out of pre-July
1, 2015 conduct (the “MOU”). Under the terms of the MOU, Corteva’s estimated aggregate share of the potential $2 billion is
approximately $600 million. In order to support and manage any potential future PFAS liabilities, the parties have also agreed
to establish an escrow account ("MOU Escrow Account"). The MOU provides that contributions to the MOU Escrow Account
will be made by Chemours, DuPont and Corteva, annually over an eight-year period through 2028. Over this period, Chemours
will deposit a total of $500 million in the account and DuPont and Corteva, together, will deposit an additional $500 million
pursuant to the terms of the Letter Agreement. Additionally, if on December 31, 2028, the balance of the MOU Escrow
Account (including interest) is less than $700 million, Chemours will make 50% of the deposits and DuPont and Corteva,
together, will make 50% of the deposits necessary to restore the balance of the escrow account to $700 million pursuant to the
terms of the Letter Agreement.
The company made its annual installment deposits due to the MOU Escrow Account through December 31, 2022 and waived
the contributions due in 2023 and 2024 pursuant to the supplemental agreement to the MOU executed by Chemours, DuPont
and Corteva provided certain conditions are met. Refer to Note 16 - Commitments and Contingent Liabilities, to the
Consolidated Financial Statements, for further details on the MOU and funding of the MOU Escrow Account.
Contractual Obligations
Our principal commitments consist of long-term debt, operating and finance lease obligations and environmental remediation
obligations. Refer to Note 15 - Short-Term Borrowings, Long-Term Debt and Available Credit Facilities, Note 14 – Leases, and
Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, respectively, for further
discussion.
56
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Information related to the company's other significant contractual obligations are summarized in the following table:
(Dollars in millions)
Expected cumulative cash requirements for interest payments
through maturity
Purchase obligations1
License agreements2, 3
Other liabilities2, 4
Total 5
Total at
December 31, 2023
2024
2025 and
beyond
Payments Due In
$
$
546 $
2,184
48
271
3,049 $
94 $
629
24
28
775 $
452
1,555
24
243
2,274
1. Represents enforceable and legally binding agreements in excess of $1 million to purchase goods or services that specify fixed or minimum quantities; fixed,
minimum or variable price provisions; and the approximate timing of the agreement.
2. Included in the Consolidated Financial Statements.
3. Represents undiscounted remaining payments under Pioneer license agreements (approximately $45 million on a discounted basis).
4. Includes liabilities related to employee-related benefits other than pension and other post-employment benefits, asset retirement obligations and other
noncurrent liabilities.
5. Due to uncertainty regarding the completion of tax audits and possible outcomes, the timing of certain payments of obligations related to unrecognized tax
benefits cannot be made and have been excluded from the table above. See Note 8 - Income Taxes, to the Consolidated Financial Statements, for additional
detail.
The company expects to meet its contractual obligations through its normal sources of liquidity and believes it has the financial
resources to satisfy the contractual obligations that arise in the ordinary course of business.
Long-Term Employee Benefits
The company has various obligations to its employees and retirees. The company maintains retirement-related programs in
many countries that have a long-term impact on the company's earnings and cash flows. These plans are typically defined
benefit pension plans, as well as medical, dental and life insurance benefits for pensioners and survivors and disability benefits
for employees ("other post-employment benefits" or "OPEB"). Substantially all of the company's worldwide benefit obligation
for pensions and OPEB obligations are attributable to the U.S. benefit plans.
Pension coverage for employees of the company's non-U.S. consolidated subsidiaries is provided, to the extent deemed
appropriate, through separate plans. The company regularly explores alternative solutions to meet its global pension obligations
in the most cost effective manner possible as demographics, life expectancy and country-specific pension funding rules change.
Where permitted by applicable law, the company reserves the right to change, modify or discontinue its plans that provide
pension, medical, dental, life insurance and disability benefits.
Benefits under defined benefit pension plans are based primarily on years of service and employees' pay near retirement. In
November 2016, the company announced changes to the U.S. pension and OPEB plans, and on November 30, 2018, the
company froze the pay and service amounts used to calculate pension benefits for active employees who participate in the U.S.
pension plans, resulting in the participants no longer accruing additional benefits. In addition to the changes to the U.S. pension
plans, OPEB eligible employees who were under the age of 50 as of November 30, 2018 will not receive post-employment
medical, dental and life insurance benefits. The majority of employees hired in the U.S. on or after January 1, 2007 are not
eligible to participate in the pension and post-employment medical, dental and life insurance plans, but receive benefits in the
defined contribution plans.
In December 2020, the company amended its retiree medical, dental and life insurance plans resulting in the company no longer
providing retiree dental and life insurance benefits effective January 1, 2022 and Corteva’s portion of the cost of non-Medicare
retiree medical coverage no longer being adjusted for cost increases, which capped the Corteva cost at the level as of December
31, 2021 ("2020 OPEB Plan Amendments"). As a result of these changes, the company recorded a $939 million decrease in
OPEB benefit obligations as of December 31, 2020 with a corresponding prior service benefit within other comprehensive
income (loss) for the year ended December 31, 2020. A substantial amount of the prior service benefit within other
comprehensive income (loss) in 2020 was recognized in other income (expense) - net in the Consolidated Statement of
Operations during 2021 with the remainder recognized during 2022.
Pension benefits are paid primarily from trust funds established to comply with applicable laws and regulations. The actuarial
assumptions and procedures utilized are reviewed periodically by the plans' actuaries to provide reasonable assurance that there
57
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
will be adequate funds for the payment of benefits. The company did not make contributions to the principal U.S. pension plan
for the years ended December 31, 2023, 2022 or 2021.
Funding for each pension plan other than the principal U.S. pension plan is governed by the rules of the sovereign country in
which it operates. Thus, there is not necessarily a direct correlation between pension funding and pension expense. In general,
however, improvements in plans' funded status tends to moderate subsequent funding needs. The company contributed $5
million, $6 million, and $8 million to its funded pension plans other than the principal U.S. pension plan for the years ended
December 31, 2023, 2022 and 2021, respectively.
U.S. pension benefits that exceed federal limitations are covered by separate unfunded plans and these benefits are paid to
pensioners and survivors from operating cash flows. The company's remaining pension plans with no plan assets are paid from
operating cash flows. The company made benefit payments of $47 million, $53 million, and $41 million to its unfunded plans
for the years ended December 31, 2023, 2022 and 2021, respectively.
The company's OPEB plans are unfunded and the cost of the approved claims is paid from operating cash flows. Pre-tax cash
requirements to cover actual net claims costs and related administrative expenses were $97 million, $122 million, and $198
million for the years ended December 31, 2023, 2022 and 2021, respectively. Changes in cash requirements reflect the net
impact of per capita health care cost, demographic changes, plan amendments and changes in participant premiums, co-pays
and deductibles.
In 2024, the company expects to contribute approximately $50 million to its pension plans other than the principal U.S. pension
plan and approximately $115 million to its OPEB plans. The company does not anticipate making contributions to its principal
U.S. pension plan in 2024.
The company's income can be significantly affected by pension and defined contribution benefits as well as OPEB costs. The
following table summarizes the extent to which the company's income (loss) from continuing operations before income taxes
for the years ended December 31, 2023, 2022 and 2021 was affected by pre-tax charges related to long-term employee benefits:
(Dollars in millions)
Net periodic benefit (credit) cost - pension and OPEB
Defined contributions
Long-term employee benefit plan (credit) charges - continuing operations
For the Year Ended December 31,
2023
2022
2021
$
$
138 $
146
284 $
(142) $
(1,292)
133
125
(9) $
(1,167)
The above (credit) charges for pension and OPEB are determined as of the beginning of each period. Long-term employee
benefit plan (credits) costs were $284 million and $(9) million for the years ended December 31, 2023 and 2022, respectively.
The change is mainly due to an increase in discount rates and a decrease in asset returns due to lower pension plan assets. See
"Pension Plans and Other Post-Employment Benefits" under the Critical Accounting Estimates section beginning on page 51 of
this report for additional information on determining annual expense.
For 2024, long-term employee benefit costs are expected to increase by approximately $30 million. The change is mainly due to
a decrease in asset values.
Environmental Matters
The company operates global manufacturing, product handling and distribution facilities that are subject to a broad array of
environmental laws and regulations. Such rules are subject to change by the implementing governmental agency, and the
company monitors these changes closely. Company policy requires that all operations fully meet or exceed legal and regulatory
requirements. In addition, the company implements voluntary programs to reduce air emissions, minimize the generation of
hazardous waste, decrease the volume of water use and discharges, increase the efficiency of energy use and reduce the
generation of persistent, bioaccumulative and toxic materials. Management has noted a global upward trend in the amount and
complexity of proposed chemicals regulation. The costs to comply with complex environmental laws and regulations, as well as
internal voluntary programs and goals, are significant and will continue to be significant for the foreseeable future.
58
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
Pre-tax environmental expenses charged to income (loss) from continuing operations before income taxes are summarized
below:
(Dollars in millions)
Environmental operating costs
Environmental remediation costs1
For the Year Ended December 31,
2022
2021
2023
$
$
178 $
47
225 $
154 $
84
238 $
144
46
190
1. Environmental remediation costs include costs that are subject to the $200 million threshold and sharing arrangements as discussed in Note 16 -
Commitments and Contingent Liabilities, to the Consolidated Financial Statements, under the header Corteva Separation Agreement.
Environmental Operating Costs
As a result of its operations, the company incurs costs for pollution abatement activities including waste collection and disposal,
installation and maintenance of air pollution controls and wastewater treatment, emissions testing and monitoring, and obtaining
permits. The company also incurs costs related to environmental related research and development activities including
environmental field and treatment studies as well as toxicity and degradation testing to evaluate the environmental impact of
products and raw materials.
About 85 percent of total pre-tax environmental operating costs charged to income (loss) from continuing operations for the
year ended December 31, 2023 resulted from operations in the U.S. Based on existing facts and circumstances, management
does not believe that year-over-year changes, if any, in environmental operating costs charged to current operations will have a
material impact on the company's financial position, liquidity or results of operations. Annual expenditures in the near term are
not expected to vary significantly from the range of such expenditures experienced in the past few years. Longer term,
expenditures are subject to considerable uncertainty and may fluctuate significantly.
Remediation Accrual
Changes in the remediation accrual balance are summarized below:
(Dollars in millions)
Balance at December 31, 2021
Remediation payments
Net increase in remediation accrual 1
Net change, indemnification 2
Balance at December 31, 2022
Remediation payments
Net increase in remediation accrual 1
Net change, indemnification 2
Balance at December 31, 20233
$
$
$
452
(49)
84
25
512
(50)
47
(8)
501
1. Excludes indemnified remediation obligations.
2. Represents the net change in indemnified remediation obligations based on activity as well as the removal from EIDP's accrued remediation liabilities of
obligations that have been fully transferred to Chemours and DuPont. Pursuant to the Chemours Separation Agreement and subsequent MOU, and the
Corteva Separation Agreement, as discussed in Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, EIDP is
indemnified by Chemours and DuPont for certain environmental matters.
3. Includes accrued obligations of $145 million due in the next twelve months with the remainder being due subsequent to 2024.
Considerable uncertainty exists with respect to environmental remediation costs and, under adverse changes in circumstances,
the potential liability may range up to approximately $655 million above the amount accrued as of December 31, 2023.
However, based on existing facts and circumstances, management does not believe that any loss, in excess of amounts accrued,
related to remediation activities at any individual site will have a material impact on the financial position, liquidity or results of
operations of the company. Refer to Note 16 – Commitments and Contingent Liabilities for further details on the company’s
accrued obligations at December 31, 2023.
As of December 31, 2023, the company has been notified of potential liability under the Comprehensive Environmental
Response, Compensation and Liability Act ("Superfund") or similar state laws at about 505 sites around the U.S., including
59
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
approximately 110 sites for which the company does not believe it has liability based on current information. Active
remediation is under way at approximately 60 of the about 505 sites. In addition, the company has resolved its liability at about
210 sites, either by completing remedial actions with other PRPs or by participating in "de minimis buyouts" with other PRPs
whose waste, like the company's, represented only a small fraction of the total waste present at a site. There were two new
notices in 2023 and none in 2022.
Environmental Capital Expenditures
the company’s internal
Capital expenditures for environmental projects, either required by law or necessary to meet
environmental goals, were approximately $10 million for the year ended December 31, 2023. The company currently estimates
expenditures for environmental-related capital projects to be approximately $15 million in 2024.
Climate Change
The company believes that climate change is an important global environmental concern that presents risks and opportunities,
of which the Sustainability and Innovation Committee of the Board of Directors maintains oversight. Management regularly
assesses and manages climate-related issues. Across its business, individuals who are responsible for climate-related initiatives
may have annual performance goals tied to the delivery of projects related to these initiatives.
Continuing political and social attention to climate change and its impacts has resulted in regulatory and market-based
approaches to limit greenhouse gas emissions. The company believes there is a way forward for sustainable climate change
mitigation that both enables farmers to meet the demands of a growing population and secures the economic future for the vast
majority of the world’s population who depend on agriculture for their livelihoods.
Extreme and volatile weather due to climate change may have an adverse impact on our customers’ ability to use the company's
products and seed supply, potentially reducing sales volumes, revenues and margins. The company continuously evaluates
opportunities for existing and new product and service offerings to meet the anticipated demands of climate-smart agriculture
and mitigate the impact of extreme and volatile weather. The company integrates processes for identifying, assessing and
managing climate-related risk into its enterprise risk management program.
The company completed a non-financial materiality assessment and identified short-, medium- and long-term climate-related
risks and opportunities. The results of this assessment are integrated into the company's businesses, strategy and financial
planning. Corteva has an established climate strategy, including commitments to reduce greenhouse gas emissions. The
company is seeking ways to reduce its impact and providing tools and incentives for customers to do the same. Corteva
champions climate positive agriculture, utilizing carbon storage and other means to remove carbon from the atmosphere without
sacrificing farmer productivity or ongoing profitability.
While Corteva is working to reduce its role in the emission of greenhouse gasses, it also invests in enabling innovation that can
create a more resilient agriculture value chain. The company engages with multiple stakeholders and partners around the globe
regarding our innovations and actionable ideas to help safeguard the health and well-being of the planet and its people.
60
Part II
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The company’s global operations are exposed to financial market risks relating to fluctuations in foreign currency exchange
rates, commodity prices, and interest rates. The company has established a variety of programs including the use of derivative
instruments and other financial instruments to manage the exposure to financial market risks as to minimize volatility of
financial results. In the ordinary course of business, the company enters into derivative instruments to hedge its exposure to
foreign currency and commodity price risks under established procedures and controls. For additional information on these
derivatives and related exposures, see Note 20 - Financial Instruments, to the Consolidated Financial Statements. Decisions
regarding whether or not to hedge a given commitment are made on a case-by-case basis, taking into consideration the amount
and duration of the exposure, market volatility and economic trends. Foreign currency exchange contracts may be used, from
time to time, to manage near-term foreign currency cash requirements.
Foreign Currency Exchange Rate Risks
The company has significant international operations resulting in a large number of currency transactions that result from
international sales, purchases, investments and borrowings. The primary currencies for which the company has an exchange
rate exposure are the Brazilian Real, European Euro ("EUR"), Swiss franc, Canadian dollar and Argentine peso. The company
uses foreign exchange contracts, where possible, to offset its net exposures, by currency, related to the foreign currency
denominated monetary assets and liabilities of its operations. The company also uses foreign currency exchange contracts to
offset a portion of the company's exposure to certain forecasted transactions, investment in foreign subsidiaries, as well as the
translation of foreign currency-denominated earnings and uses commodity contracts to offset risks associated with foreign
currency devaluation in certain countries. In addition to the contracts disclosed in Note 20 - Financial Instruments, to the
Consolidated Financial Statements, from time to time, the company may enter into foreign currency exchange contracts to
establish with certainty the U.S. dollar ("USD") amount of future firm commitments denominated in a foreign currency.
The following table illustrates the fair values of outstanding foreign currency contracts at December 31, 2023 and 2022, and the
effect on fair values of a hypothetical adverse change in the foreign exchange rates that existed at December 31, 2023 and 2022.
The sensitivities for foreign currency contracts are based on a 10 percent adverse change in foreign exchange rates.
(Dollars in millions)
Foreign currency contracts
Fair Value
(Liability)/Asset
Fair Value
Sensitivity
2023
2022
2023
2022
$
22 $
25 $
(492) $
(208)
The potential gain/loss in value for each risk management portfolio described above would be offset in part by changes in the
value of the underlying exposure.
Concentration of Credit Risk
The company maintains cash and cash equivalents, marketable securities, derivatives and certain other financial instruments
with various financial institutions. These financial institutions are generally highly rated and geographically dispersed and the
company has a policy to limit the dollar amount of credit exposure with any one institution.
As part of the company's financial risk management processes, it continuously evaluates the relative credit standing of all of the
financial institutions that service Corteva and monitors actual exposures versus established limits. The company has not
sustained credit losses from instruments held at financial institutions.
The company's sales are not materially dependent on any single customer. Credit risk associated with its receivables balance is
representative of the geographic, industry and customer diversity associated with the company's global product lines.
The company also maintains strong credit controls in evaluating and granting customer credit. As a result, it may require that
customers provide some type of financial guarantee in certain circumstances. Length of terms for customer credit varies by
region.
61
Part II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required by this Item are included herein, commencing on page F-1 of this
report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
62
Part II
ITEM 9A. CONTROLS AND PROCEDURES
Corteva, Inc.
a)
Evaluation of Disclosure Controls and Procedures
The company maintains a system of disclosure controls and procedures to give reasonable assurance that information
required to be disclosed in the company's reports filed or submitted under the Securities Exchange Act of 1934
("Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the Securities and Exchange Commission. These controls and procedures also give reasonable assurance that
information required to be disclosed in such reports is accumulated and communicated to management to allow timely
decisions regarding required disclosures.
As of December 31, 2023, the company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"),
together with management, conducted an evaluation of the effectiveness of the company's disclosure controls and
procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, the CEO and CFO
concluded that these disclosure controls and procedures are effective.
b)
Changes in Internal Control over Financial Reporting
There have been no changes in the company's internal control over financial reporting that occurred during the quarter
ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, the company's
internal control over financial reporting.
Management’s assessment of the effectiveness of the company’s internal control over financial reporting as of
December 31, 2023 excluded the Stoller and Symborg acquisitions, which were completed in March 2023. Total assets,
excluding goodwill and other intangible assets, and net sales of Stoller and Symborg represent approximately 1 percent
and 2 percent, respectively, of the company’s consolidated assets and net sales, as of and for the year ended
December 31, 2023. This exclusion is in accordance with the guidelines established by the Securities and Exchange
Commission.
The effectiveness of our internal control over financial reporting as of December 31, 2023, has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in the Report of Independent
Registered Public Accounting Firm contained in our 2023 Annual Report, which is also incorporated herein by reference.
EIDP, Inc.
a)
Evaluation of Disclosure Controls and Procedures
EIDP maintains a system of disclosure controls and procedures to give reasonable assurance that information required to
be disclosed in EIDP's reports filed or submitted under the Securities Exchange Act of 1934 ("Exchange Act") is
recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities
and Exchange Commission. These controls and procedures also give reasonable assurance that information required to
be disclosed in such reports is accumulated and communicated to management to allow timely decisions regarding
required disclosures.
As of December 31, 2023, EIDP's CEO and CFO,
together with management, conducted an evaluation of the
effectiveness of EIDP's disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Exchange
Act. Based on that evaluation, the CEO and CFO concluded that these disclosure controls and procedures are effective.
b)
Changes in Internal Control over Financial Reporting
There have been no changes in EIDP's internal control over financial reporting that occurred during the quarter ended
December 31, 2023 that have materially affected, or are reasonably likely to materially affect, EIDP's internal control
over financial reporting.
63
Part II
Management’s assessment of the effectiveness of the company’s internal control over financial reporting as of
December 31, 2023 excluded the Stoller and Symborg acquisitions, which were completed in March 2023. Total assets,
excluding goodwill and other intangible assets, and net sales of Stoller and Symborg represent approximately 1 percent
and 2 percent, respectively, of the company’s consolidated assets and net sales, as of and for the year ended
December 31, 2023. This exclusion is in accordance with the guidelines established by the Securities and Exchange
Commission.
The effectiveness of our internal control over financial reporting as of December 31, 2023, has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in the Report of Independent
Registered Public Accounting Firm contained in our 2023 Annual Report, which is also incorporated herein by reference.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
64
Part III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information with respect to this Item is incorporated herein by reference to the Proxy, including information within the sections
entitled, "Election of Directors," and "Corporate Governance."
The company has adopted a Code of Financial Ethics for its CEO, CFO, and Controller that may be accessed from the
company's website at www.corteva.com by clicking on "Investors" and then "Corporate Governance." Any amendments to, or
waiver from, any provision of the code will be posted on the company's website at the above address.
Executive Officers of the Registrant
Our executive officers serve at the discretion of the Board of Directors. The names of our executive officers and their ages,
titles, and biographies as of February 8, 2024 are set forth below:
Charles V. Magro, age 54, was named Chief Executive Officer and director of Corteva effective November 2021. Prior to
joining Corteva, Mr. Magro served as President and CEO of Nutrien Ltd. from the company’s launch in 2018 until April 2021.
From 2014 to 2018, he served as President and CEO of Agrium Inc., which merged with Potash Corporation of Saskatchewan
Inc. to create Nutrien Ltd. As President and CEO of Nutrien Ltd., Mr. Magro led more than 27,000 employees to achieve best-
in-class engagement, top safety performance and exceptional business results. While at Nutrien he also led the company
through numerous M&A transactions thereby, expanding its global footprint. Prior to this role, Mr. Magro held a variety of
other key leadership positions with the company, including Chief Operating Officer, Chief Risk Officer, Executive Vice
President of Corporate Development, and Vice President of Manufacturing. He joined Agrium Inc. in 2009 following a
productive career with NOVA Chemicals Corp. Mr. Magro has served on the board of directors of Ingredion Inc., a global
provider of ingredient solutions to the food and beverage manufacturing industry since May 2022. Mr. Magro previously served
on the Canada Pension Plan Investment Board from 2018 until March 2022.
David J. Anderson, age 74, was named Executive Vice President and Chief Financial Officer of Corteva effective April 2021.
Mr. Anderson is an experienced Chief Financial Officer, with a career spanning a number of diverse global companies across a
range of industries. Prior to joining Corteva in April 2021, Mr. Anderson was interim chief financial officer at Criteo S.A. from
May 2020 to August 2020, which he joined after serving as chief financial officer and chief operating officer at Nielsen
Holdings plc from September 2018 to December 2019. He previously served as executive vice president and chief financial
officer of Alexion Pharmaceuticals from December 2016 to August 2017, which he joined following his tenure of more than a
decade as the chief financial officer for Honeywell. Prior to that, Mr. Anderson was the chief financial officer for ITT, Inc.,
Newport News Shipbuilding Inc., and RJR Nabisco, Inc. Mr. Anderson previously served on the boards of American Electric
Power from 2011 through June 2022 and Cardinal Health from April 2014 to September 2018.
including sales, marketing,
Timothy P. Glenn, age 57, was named Executive Vice President, Seed Business Unit of Corteva effective April 2022. A global
agricultural industry leader, Mr. Glenn has more than three decades of experience across all facets of business leadership for
integrated operations, and commercial effectiveness. Mr. Glenn
seeds and crop protection,
previously served as Executive Vice President, Chief Commercial Officer of Corteva from 2018 to April 2022. Prior to this, he
served as Vice President, Global Seed Business Platform of DowDuPont Inc. since 2017. From 2015 to 2017, Mr. Glenn served
as President, DuPont Crop Protection, and from 2014 to 2015, he served as vice president, integrated operations and
commercial effectiveness for DuPont Pioneer. He previously held other leadership positions at DuPont Pioneer, including
regional business director, Latin America and Canada, after rejoining DuPont Pioneer in 2006 as director, North America
Marketing. In 1997, he joined Dow AgroSciences as corn product manager, Mycogen Seeds, and served in sales and business
leadership roles in the crop protection and seeds businesses of Dow AgroSciences. He first
joined Pioneer Hi-Bred
International, Inc. in 1991, and held a variety of marketing roles in seed markets around the world. Mr. Glenn is a member of
the Iowa Business Council and currently serves as chair of both the Food Bank of Iowa and the Iowa Business Education
Alliance board of directors.
Robert King, age 53, was named Executive Vice President, Crop Protection Business Unit of Corteva effective April 2022. Mr.
King is a highly experienced executive in the specialty chemicals and agriculture industry. Prior to joining Corteva, Mr. King
served as Senior Vice President and Chief Integrated Supply Chain Officer at Nouryon from December 2020 to March 2022,
where he spearheaded the global and cross-business integration of the company’s supply chain. From December 2019 to
December 2020, he previously served as Vice President of Global Operations for PPG’s industrial segment. Mr. King was also
the Vice President of Global Supply Chain from July 2018 to December 2019 for Nutrien Ltd., where he worked for five years
65
Part III
and was appointed to lead the centralization of the company’s supply chain. Prior to this, he served as a Regional Manager at
Nutrien Ltd. and as the Vice President of Nitrogen Operations and Services at Agrium Inc. in Canada before the company
became Nutrien in July 2018. Mr. King started his career at Celanese Corp., where he worked for nearly two decades and held
management roles around the world.
Dr. Samuel Eathington, age 55, was named Executive Vice President, Chief Technology and Digital Officer of Corteva
effective April 2022, where he is responsible for leading the company’s global research and development organization, building
and expanding its industry-leading pipeline, and overseeing all aspects of Corteva’s digital farming strategy and investments.
He joined Corteva in November 2020 and served as senior vice president, chief technology officer from January 2021 until
April 2022. A recognized leader in agricultural innovation, Dr. Eathington served as chief science officer of The Climate
Corporation (part of the crop science division of Bayer AG) from December 2015 until April 2020. Prior to assuming that role,
Dr. Eathington spent 19 years with Monsanto Corporation, rising through the ranks in quantitative traits and molecular breeding
to become vice president, global plant breeding beginning in February 2011.
Cornel B. Fuerer, age 57, was named Senior Vice President, General Counsel and Secretary of Corteva effective May 2019,
where he is responsible for legal, compliance, and public affairs. Mr. Fuerer previously served as general counsel of the
agriculture division of DowDuPont Inc. since June 2018 and prior to that served as associate general counsel supporting the
agriculture division of DowDuPont after their merger in September 2017. From 2013 to 2017, he served as associate general
counsel of DuPont with responsibility for the legal affairs of DuPont’s agriculture business and from 2012 to 2013 he served as
the corporate secretary of DuPont. From 2007 to 2012, Mr. Fuerer served as the vice president, general counsel and company
secretary of Solae, a food ingredients joint venture between DuPont and Bunge. After joining DuPont in 1995 as an attorney in
Geneva, Switzerland, he served in various legal roles in Hong Kong and Wuppertal, Germany until his appointment at Solae in
2007.
Audrey Grimm, age 43, was named Senior Vice President and Chief Human Resources and Diversity Officer of Corteva
effective March 2022. Since 2021 she served as Vice President, Europe, Middle East and Africa (EMEA) HR, with added
responsibility for the company’s global culture and Inclusion, Diversity & Equity efforts, and before that as HR Director for the
EMEA region from 2017 to 2021. Ms. Grimm spent her early career with Dow Chemical, where she held series of progressive
HR roles leading to her appointment as Vice President, HR of the Agricultural division of Dow Chemical in 2015.
Brian Titus, age 51, was named Vice President, Controller and Principal Accounting Officer of Corteva effective May 2019.
Mr. Titus previously served as the controller and principal accounting officer of the agriculture division of DowDuPont Inc.
since February 2019. Prior to this, he was general auditor of DuPont since August 2015 and previously served as the director of
corporate accounting from 2014 to 2015 and global finance leader of DuPont Crop Protection from 2013 to 2014. Prior to
joining DuPont’s corporate accounting group in 2010, he spent 14 years in public accounting, primarily with
PricewaterhouseCoopers LLP, providing audit and transactional support services. Mr. Titus is a certified public accountant.
ITEM 11. EXECUTIVE COMPENSATION
Information related to executive compensation and the company's equity compensation plans is contained in the definitive
Proxy Statement for the 2024 Annual Meeting of Stockholders of Corteva, Inc. and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Information with respect to beneficial ownership of Corteva, Inc. common stock by each director, executive officer, and all
directors and executive officers of the Company as a group is contained in the definitive Proxy Statement for the 2024 Annual
Meeting of Stockholders of Corteva, Inc. and is incorporated herein by reference.
Information relating to any person who beneficially owns in excess of 5 percent of the total outstanding shares of Corteva, Inc.
common stock is contained in the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders of Corteva, Inc. and
is incorporated herein by reference.
66
Part III
Information with respect to compensation plans under which equity securities are authorized for issuance is contained in the
definitive Proxy Statement for the 2024 Annual Meeting of Stockholders of Corteva, Inc. and is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information with respect to this Item is incorporated herein by reference to the definitive Proxy Statement for the 2024 Annual
Meeting of Stockholders of Corteva, Inc., including information within the sections entitled, "Certain Relationships and Related
Transactions", and "Director Independence."
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information with respect to this Item is incorporated herein by reference to the definitive Proxy Statement for the 2024 Annual
Meetings of Stockholders of Corteva, Inc., including information within the section entitled, “Ratification of Independent
Registered Public Accounting Firm.”
67
Part IV
ITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
Financial Statements, Financial Statement Schedules and Exhibits:
1.
2.
3.
4.
Corteva Financial Statements (See the Index to the Consolidated Financial Statements on page F-1 of this
report).
Corteva Financial Statement Schedule (presented below)
EIDP Financial Statements (Starting on page F-74 of this report).
EIDP Financial Statement Schedule (presented below)
Schedule II—Valuation and Qualifying Accounts (Corteva, Inc. and EIDP)
(Dollars in millions)
For the Year Ended December 31,
2022
2023
2021
Accounts Receivable—Allowance for Doubtful Receivables
Balance at beginning of period
Additions charged to expenses
Deductions from reserves1
Balance at end of period
Deferred Tax Assets—Valuation Allowance
Balance at beginning of period
Additions charged to expenses
Purchase Accounting Adjustments
Deductions from reserves2
Balance at end of period
$
$
$
$
194 $
24
(13)
205 $
210 $
3
(19)
194 $
342 $
366 $
225
8
(65)
87
—
(111)
510 $
342 $
208
6
(4)
210
453
97
—
(184)
366
1. Deductions include write-offs, recoveries collected and currency translation adjustments.
2. Deductions include currency translation adjustments.
Financial Statement Schedules listed under the Securities and Exchange Commission ("SEC") rules but not included in this
report are omitted because they are not applicable or the required information is shown in the Consolidated Financial
Statements or notes thereto.
68
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES, continued
5.
Exhibits
Part IV
The following list of exhibits includes both exhibits submitted with this Form 10-K as filed with the SEC and those
incorporated by reference to other filings:
Exhibit
Number
2.1
3.1
3.2
3.3
3.4
4.1
4.2
10.1*
10.2*
10.3*
Description
Separation and Distribution Agreement by and among DuPont Inc., Dow Inc. and Corteva, Inc. (incorporated by reference to Exhibit No. 2.1 to
Amendment 3 to Corteva’s Registration Statement on Form 10 (Commission file number 001-38710), filed on April 16, 2019).
Amended and Restated Certificate of Incorporation of Corteva, Inc. (incorporated by reference to Exhibit No. 3.1 to Corteva’s Current Report
on Form 8-K (Commission file number 001-38710), filed on June 3, 2019.
Amended and Restated Bylaws of Corteva, Inc. (incorporated by reference to Exhibit No. 3.1 to Corteva’s Current Report on Form 8-K
(Commission file number 001-38710), filed on October 10, 2019.
Amended and Restated Certificate of Incorporation of EIDP, Inc. (incorporated by reference to Exhibit No. 3.3 to Corteva’s and EIDP’s
Quarterly Report on Form 10-Q (Commission file numbers 001-38710 and 001-00815), filed on May 4, 2023)
Amended and Restated Bylaws of EIDP, Inc. (incorporated by reference to Exhibit 3.2 to EIDP's Current Report on Form 8-K (Commission file
number 1-815) dated September 1, 2017).
Description of Corteva, Inc. registered securities (incorporated by reference from Exhibit 4.1 to the Company’s Annual Report on Form 10-K
(Commission file number 001-38710) filed February 14, 2020).
Description of E. I. du Pont de Nemours and Company registered securities (incorporated by reference from Exhibit 4.2 to the Company’s
Annual Report on Form 10-K (Commission file number 001-38710) filed February 14, 2020).
Amended and Restated Tax Matters Agreement, effective as of June 1, 2019 by and among DowDuPont Inc., Dow Inc. and Corteva, Inc.
(incorporated by reference to Exhibit 10.3 of Corteva’s Current Report on Form 8-K (Commission file number 001-38710) filed on June 3,
2019).
Employee Matters Agreement by and among DowDuPont Inc., Dow Inc., and Corteva, Inc. (incorporated by reference to Exhibit No. 10.2 to
Amendment 3 to Corteva’s Registration Statement on Form 10 (Commission file number 001-38710), filed on April 16, 2019).
SpecCo/AgCo Intellectual Property Cross-License Agreement, effective as of June 1, 2019, by and among DowDuPont Inc., Corteva, Inc. and
the other parties identified therein (incorporated by reference to Exhibit 10.1 to Corteva’s Current Report on Form 8-K (Commission file
number 001-38710), filed on June 3, 2019).
10.4*
Intellectual Property Cross-License Agreement by and between Corteva, Inc. and Dow Inc. (incorporated by reference to Exhibit No. 10.4 to
Amendment 3 to Corteva’s Registration Statement on Form 10 (Commission file number 001-38710), filed on April 16, 2019).
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
Corteva, Inc. 2019 Omnibus Incentive Plan. (incorporated by reference to Exhibit No. 10.5 to Corteva’s Registration Statement on Form 10
(Commission file number 001-38710), filed on May 6, 2019).
Separation Agreement by and between E. I. du Pont de Nemours and Company and The Chemours Company (incorporated by reference to
Exhibit 2.1 to E. I. du Pont de Nemours and Company's Current Report on Form 8-K (Commission file number 1-815) dated July 8, 2015).
Amendment No. 1 to Separation Agreement by and between E. I. du Pont de Nemours and Company and The Chemours Company, dated
August 24, 2017 (incorporated by reference to Exhibit 2.1 to E. I. du Pont de Nemours and Company's Current Report on Form 8-K
(Commission file number 1-815) dated August 25, 2017).
Tax Matters Agreement by and between E. I. du Pont de Nemours and Company and The Chemours Company (incorporated by reference to
Exhibit 2.2 to E. I. du Pont de Nemours and Company's Current Report on Form 8-K (Commission file number 1-815) dated July 8, 2015).
Amended and Restated Management Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to Corteva’s and EIDP’s
Quarterly Report on Form 10-Q (Commission file numbers 001-38710 and 001-00815), filed on August 4, 2023).
The E. I. du Pont de Nemours and Company Stock Accumulation and Deferred Compensation Plan for Directors, (incorporated by reference to
Exhibit 4.4 to DowDuPont Inc. Registration Statement on Form S-8 (Commission file number 333-220324) filed September 1, 2017.)
E. I. du Pont de Nemours and Company's Pension Restoration Plan, as last amended effective June 29, 2015 (incorporated by reference to
Exhibit 10.3 to E. I. du Pont de Nemours and Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended
June 30, 2015).
E. I. du Pont de Nemours and Company’s Rules for Lump Sum Payments, as last amended effective May 15, 2014 (incorporated by reference
to Exhibit 10.4 to E. I. du Pont de Nemours and Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period
ended June 30, 2015).
E. I. du Pont de Nemours and Company’s Retirement Savings Restoration Plan, as last amended effective May 15, 2014. (incorporated by
reference to Exhibit 10.08 to E. I. du Pont de Nemours and Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the
period ended June 30, 2014).
69
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES, continued
Part IV
10.14
10.15
10.16
10.17*
10.18*
10.19
10.20
10.21
10.22
10.23
10.24
21
23.1
23.2
31.1
31.2
32.1
32.2
E. I. du Pont de Nemours and Company’s Retirement Income Plan for Directors, as last amended January 2011 (incorporated by reference to
Exhibit 10.9 to E. I. du Pont de Nemours and Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended
March 31, 2012).
Supplemental Agreement to the Memorandum of Understanding between The Chemours Company, Corteva, Inc., E. I. du Pont de Nemours and
Company and DuPont de Nemours, Inc., dated September 5, 2023 (incorporated by reference to Exhibit 10.1 to Corteva’s Quarterly Report on
Form 10-Q (Commission file number 001-38710), filed on November 9, 2023).
Corteva, Inc. Severance Plan (incorporated by reference to Exhibit 10.2 to Corteva’s Current Report on Form 8-K (Commission file
number 001-38710), filed on October 28, 2021).
Letter Agreement effective as of June 1, 2019 by and between DowDuPont Inc. and Corteva, Inc. (incorporated by reference to Exhibit 10.2 to
Corteva's Current Report on Form 8-K (Commission file number 001-38710) filed June 3, 2019)
Memorandum of Understanding, dated January 22, 2021, by and among The Chemours Company, Corteva, Inc., E. I. du Pont de Nemours and
Company and DuPont de Nemours, Inc. (incorporated by reference from the Form 8-K (Commission file number 001-38710) filed January 22,
2021)
Form of Award Terms for Options granted under the Corteva, Inc. 2019 Omnibus Incentive Plan for U.S. grantees (incorporated by reference
from Exhibit 10.2 to the Company’s Quarterly Report Form 10-Q (Commission file number 001-38710) filed May 7, 2020).
Form of Award Terms for Performance Stock Units granted under the Corteva, Inc. 2019 Omnibus Incentive Plan for U.S. grantees
(incorporated by reference from Exhibit 10.3 to the Company’s Quarterly Report Form 10-Q (Commission file number 001-38710) filed May 5,
2022).
Form of Award Terms for Restricted Stock Units granted under the Corteva, Inc. 2019 Omnibus Incentive Plan for U.S. grantees (incorporated
by reference from Exhibit 10.1 to the Company’s Quarterly Report Form 10-Q (Commission file number 001-38710) filed May 5, 2022).
Form of Special CFO RSU Agreement (incorporated by reference from Exhibit 10.1 to Corteva’s Current Report on Form 8-K (Commission
file number 001-38710) filed April 6, 2021).
Corteva, Inc. Global Omnibus Employee Stock Purchase Plan (incorporated by reference from Exhibit 4.3 to Corteva’s Registration Statement
on Form S-8 (Commission file number 333-249887), filed November 5, 2020).
Amendment to EIDP, Inc.’s Retirement Savings Restoration Plan. (incorporated by reference to Exhibit No. 10.2 to Corteva’s and EIDP’s
Quarterly Report on Form 10-Q (Commission file numbers 001-38710 and 001-00815), filed on August 4, 2023
Subsidiaries of the Registrant.
Consent of Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP - Corteva, Inc.
Consent of Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP - EIDP, Inc.
Rule 13a-14(a)/15d-14(a) Certification of the company’s and EIDP’s Principal Executive Officer.
Rule 13a-14(a)/15d-14(a) Certification of the company’s and EIDP’s Principal Financial Officer.
Section 1350 Certification of the company’s and EIDP’s Principal Executive Officer. The information contained in this Exhibit shall not be
deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant
under the Securities Act of 1933, as amended.
Section 1350 Certification of the company’s and EIDP’s Principal Financial Officer. The information contained in this Exhibit shall not be
deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant
under the Securities Act of 1933, as amended.
97
Corteva, Inc. Clawback Policy
101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the
Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File – The Cover Page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101.INS)
* Upon request of the U.S. Securities and Exchange Commission (the "SEC"), Corteva hereby undertakes to furnish supplementally a copy of any omitted
schedule or exhibit to such agreement; provided, however, that Corteva may omit confidential information pursuant to Item 601(b)(10) or request confidential
treatment pursuant to Rule 24b-2 of the Exchange Act of any schedule or exhibit so furnished.
70
Corteva
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
February 8, 2024
Corteva, Inc.
By:
/s/ Brian Titus
Brian Titus
Vice President, Controller
(Principal Accounting Officer)
_____________________________________________
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant in the capacities and on the dates indicated:
71
Signature
Title(s)
Date
/s/ Charles V. Magro
Charles V. Magro
/s/ Gregory R. Page
Gregory R. Page
/s/ Lamberto Andreotti
Lamberto Andreotti
/s/ David C. Everitt
David C. Everitt
/s/ Klaus A. Engel
Klaus A. Engel
/s/ Michael O. Johanns
Michael O. Johanns
/s/ Janet P. Giesselman
Janet P. Giesselman
/s/ Karen H. Grimes
Karen H. Grimes
/s/ Rebecca B. Liebert
Rebecca B. Liebert
/s/ Marcos M. Lutz
Marcos M. Lutz
/s/ Nayaki R. Nayyar
Nayaki R. Nayyar
/s/ Kerry J. Preete
Kerry J. Preete
/s/ Patrick J. Ward
Patrick J. Ward
/s/ David J. Anderson
David J. Anderson
Chief Executive Officer and Director
(Principal Executive Officer)
February 8, 2024
Non-Executive Chairman of the Board of
Directors and Director
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
February 8, 2024
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
72
EIDP, Inc.
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
February 8, 2024
EIDP, Inc.
By:
/s/ Brian Titus
Brian Titus
Vice President, Controller
(Principal Accounting Officer)
_____________________________________________
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant in the capacities and on the dates indicated:
Signature
Title(s)
Date
/s/ Charles V. Magro
Charles V. Magro
/s/ David J. Anderson
David J. Anderson
Chief Executive Officer and Director
(Principal Executive Officer)
February 8, 2024
Executive Vice President,
Chief Financial Officer and Director
(Principal Financial Officer)
February 8, 2024
73
[THIS PAGE INTENTIONALLY LEFT BLANK]
Corteva, Inc.
Index to the Consolidated Financial Statements
Management's Reports on Responsibility for Financial Statements and Internal Control over
Financial ReportingF-2
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)F-3
Consolidated Financial Statements:
Consolidated Statements of Operations for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022, and
2021
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Equity for the years ended December 31, 2023, 2022, and 2021
Notes to the Consolidated Financial Statements
Page(s)
F-5
F-6
F-7
F-8
F-9
F-10
F-1
Management's Reports on Responsibility for Financial Statements and
Internal Control over Financial Reporting
Management's Report on Responsibility for Financial Statements
Management is responsible for the Consolidated Financial Statements and the other financial information contained in this
Annual Report on Form 10-K. The financial statements have been prepared in accordance with generally accepted accounting
principles in the United States of America ("GAAP") and are considered by management to present fairly the company's
financial position, results of operations and cash flows. The financial statements include some amounts that are based on
management's best estimates and judgments. The financial statements have been audited by the company's independent
registered public accounting firm, PricewaterhouseCoopers LLP. The purpose of their audit is to express an opinion as to
whether the Consolidated Financial Statements included in this Annual Report on Form 10-K present fairly, in all material
respects, the company's financial position, results of operations and cash flows in conformity with GAAP. Their report is
presented on the following pages.
Management's Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting as
defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The company's internal control over
financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP. The company's internal control over
financial reporting includes those policies and procedures that:
i.
ii.
iii.
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company;
provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and that receipts and expenditures of the
company are being made only in accordance with authorization of management and directors of the company; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or
disposition of the company's assets that could have a material effect on the financial statements.
Internal control over financial reporting has certain inherent limitations which may not prevent or detect misstatements. In
addition, changes in conditions and business practices may cause variation in the effectiveness of internal controls.
Management assessed the effectiveness of the company's internal control over financial reporting as of December 31, 2023,
based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal
Control-Integrated Framework (2013). Based on its assessment and those criteria, management concluded that the company
maintained effective internal control over financial reporting as of December 31, 2023. Management’s assessment of the
effectiveness of the company’s internal control over financial reporting as of December 31, 2023 excluded the Stoller and
Symborg acquisitions, which were completed in March 2023. Total assets, excluding goodwill and other intangible assets, and
net sales of Stoller and Symborg represent approximately 1 percent and 2 percent, respectively, of the company’s consolidated
assets and net sales, as of and for the year ended December 31, 2023. This exclusion is in accordance with the guidelines
established by the Securities and Exchange Commission.
PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the effectiveness of the company's
internal control over financial reporting as of December 31, 2023, as stated in their report, which is presented on the following
pages.
Charles V. Magro
Chief Executive Officer and Director
David J. Anderson
Executive Vice President and
Chief Financial Officer
February 8, 2024
F-2
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Corteva, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Corteva, Inc. and its subsidiaries (the “Company”) as of
December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income (loss), equity and
cash flows for each of the three years in the period ended December 31, 2023, including the related notes and schedule of
valuation and qualifying accounts for each of the three years in the period ended December 31, 2023 appearing under Item 15
(collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over
financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express
opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
As described in Management’s Report on Internal Control over Financial Reporting, management has excluded the Stoller
Group, Inc. (“Stoller”) and Quorum Vital Investment, S.L. and its affiliates (“Symborg”) businesses from its assessment of
internal control over financial reporting as of December 31, 2023 because they were acquired by the Company in purchase
business combinations during 2023. We have also excluded the Stoller and Symborg businesses from our audit of internal
control over financial reporting. These businesses, each of which is wholly owned, comprised, in the aggregate, total assets
excluding goodwill and other intangible assets, and total net sales excluded from management’s assessment and our audit of
internal control over financial reporting of approximately 1 percent and 2 percent, respectively, of the related consolidated
financial statement amounts as of and for the year ended December 31, 2023.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
F-3
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill (Seed Reporting Unit) Impairment Assessment
As described in Notes 2 and 13 to the consolidated financial statements, the Company’s consolidated goodwill balance was
$10.6 billion as of December 31, 2023, and the goodwill associated with the seed reporting unit was $5.4 billion. Management
tests goodwill for impairment at the reporting unit level at least annually, or more frequently when events or changes in
circumstances indicate it is more likely than not that the fair value of a reporting unit has declined below its carrying value.
Management performs an annual goodwill impairment test in the fourth quarter. If management chooses not to complete a
qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the
carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required. Management
performed quantitative testing on its seed reporting unit and determined that no goodwill impairment existed in 2023.
Management determined fair value for the seed reporting unit using a discounted cash flow model. Management’s significant
assumptions in this analysis included future cash flow projections, the weighted average cost of capital, the terminal growth
rate, and the tax rate.
The principal considerations for our determination that performing procedures relating to the seed reporting unit goodwill
impairment assessment is a critical audit matter are (i) the significant judgment by management when developing the fair value
of the seed reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and
evaluating management’s significant assumptions related to projected revenue, the weighted average cost of capital, and the
terminal value; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s goodwill impairment assessment, including controls over the valuation of the seed reporting unit. These
procedures also included, among others, (i) testing management’s process for developing the fair value estimate; (ii) evaluating
the appropriateness of the discounted cash flow model; (iii) testing the completeness, accuracy, and relevance of underlying
data used in the discounted cash flow model; and (iv) evaluating the reasonableness of significant assumptions used by
management related to projected revenue,
the weighted average cost of capital, and the terminal value. Evaluating
management’s assumptions related to projected revenue and the terminal value involved evaluating whether the assumptions
used by management were reasonable considering (i) the current and past performance of the reporting unit; (ii) the consistency
with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas
of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s
discounted cash flow model and the weighted average cost of capital and terminal value assumptions.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 8, 2024
We have served as the Company’s or its predecessor's auditor since 1946.
F-4
Corteva, Inc.
Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Net sales
Cost of goods sold
Research and development expense
Selling, general and administrative expenses
Amortization of intangibles
Restructuring and asset related charges - net
Other income (expense) - net
Interest expense
Income (loss) from continuing operations before income taxes
Provision for (benefit from) income taxes on continuing operations
Income (loss) from continuing operations after income taxes
Income (loss) from discontinued operations after income taxes
Net income (loss)
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to Corteva
Basic earnings (loss) per share of common stock:
Basic earnings (loss) per share of common stock from continuing operations
Basic earnings (loss) per share of common stock from discontinued operations
Basic earnings (loss) per share of common stock$
1.04 $
1.59
Diluted earnings (loss) per share of common stock:
Diluted earnings (loss) per share of common stock from continuing operations
Diluted earnings (loss) per share of common stock from discontinued operations
Diluted earnings (loss) per share of common stock$
1.03 $
1.58
For the Year Ended December 31,
2022
2023
2021
$
$
$
$
17,226 $
9,920
1,337
3,176
683
336
(448)
233
1,093
152
941
(194)
747
12
735 $
1.31 $
(0.27)
1.30 $
(0.27)
17,455 $
10,436
1,216
3,173
702
363
(60)
79
1,426
210
1,216
(58)
1,158
11
1,147 $
1.67 $
(0.08)
$
1.66 $
(0.08)
$
15,655
9,220
1,187
3,209
722
289
1,348
30
2,346
524
1,822
(53)
1,769
10
1,759
2.46
(0.07)
2.39
2.44
(0.07)
2.37
See Notes to the Consolidated Financial Statements beginning on page F-10.
F-5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Corteva, Inc.
Consolidated Financial Statements
(In millions)
Net income (loss)
Other comprehensive income (loss) - net of tax:
Cumulative translation adjustments
Adjustments to pension benefit plans
Adjustments to other benefit plans
Unrealized gain (loss) on investments
Derivative instruments
Total other comprehensive income (loss)
Comprehensive income (loss)
Comprehensive income (loss) attributable to
noncontrolling interests - net of tax
Comprehensive income (loss) attributable to Corteva
$
For the Year Ended December 31,
2022
2021
2023
$
747 $
1,158 $
1,769
425
(190)
29
—
(135)
129
876
(340)
233
191
—
8
92
1,250
12
864 $
11
1,239 $
(573)
1,037
(621)
10
139
(8)
1,761
10
1,751
See Notes to the Consolidated Financial Statements beginning on page F-10.
F-6
CONSOLIDATED BALANCE SHEETS
Corteva, Inc.
Consolidated Financial Statements
(In millions, except share and per share amounts)
December 31, 2023 December 31, 2022
Assets
Current assets
Cash and cash equivalents$
Marketable securities
Accounts and notes receivable - net
Inventories
Other current assets
Total current assets
Investment in nonconsolidated affiliates
Property, plant and equipment
Less: Accumulated depreciation
Net property, plant and equipment
Goodwill
Other intangible assets
Deferred income taxes
Other assets
Total Assets
Current liabilities
Liabilities and Equity
Short-term borrowings and finance lease obligations
Accounts payable
Income taxes payable
Deferred revenue
Accrued and other current liabilities
Total current liabilities
Long-term debt
Other noncurrent liabilities
Deferred income tax liabilities
Pension and other post-employment benefits
Other noncurrent obligations
Total noncurrent liabilities
Commitments and contingent liabilities
Stockholders’ equity
Common stock, $0.01 par value; 1,666,667,000 shares authorized;
issued at December 31, 2023 - 701,260,000 and December 31, 2022 - 713,419,000
Additional paid-in capital
Retained earnings (accumulated deficit)
Accumulated other comprehensive income (loss)
Total Corteva stockholders’ equity
Noncontrolling interests
Total equity
Total Liabilities and Equity
2,644 $
98
5,488
6,899
1,131
16,260
115
8,956
4,669
4,287
10,605
9,626
584
1,519
42,996 $
198 $
4,280
174
3,406
2,351
10,409
2,291
899
2,467
1,651
7,308
7
27,748
(41)
(2,677)
25,037
242
25,279
42,996 $
3,191
124
5,701
6,811
968
16,795
102
8,551
4,297
4,254
9,962
9,339
479
1,687
42,618
24
4,895
183
3,388
2,254
10,744
1,283
1,119
2,255
1,676
6,333
7
27,851
250
(2,806)
25,302
239
25,541
42,618
$
$
$
See Notes to the Consolidated Financial Statements beginning on page F-10.
F-7
CONSOLIDATED STATEMENTS OF CASH FLOWS
Corteva, Inc.
Consolidated Financial Statements
(In millions)
Operating activities
Net income (loss)
(Income) loss from discontinued operations after income taxes
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:
Depreciation and amortization
Provision for (benefit from) deferred income tax
Net periodic pension and OPEB (credits) costs
Pension and OPEB contributions
Net (gain) loss on sales of property, businesses, consolidated companies, and investments
Restructuring and asset related charges - net
Other net loss
Changes in assets and liabilities, net
Accounts and notes receivable
Inventories
Accounts payable
Deferred revenue
Other assets and liabilities
Cash provided by (used for) operating activities - continuing operations
Cash provided by (used for) operating activities - discontinued operations
Cash provided by (used for) operating activities
Investing activities
Capital expenditures
Proceeds from sales of property, businesses, and consolidated companies - net of cash divested
Acquisitions of businesses - net of cash acquired
Escrow funding associated with acquisitions
Investments in and loans to nonconsolidated affiliates
Purchases of investments
Proceeds from sales and maturities of investments
Proceeds from settlement of net investment hedge
Other investing activities, net
Cash provided by (used for) investing activities
Financing activities
Net change in borrowings (less than 90 days)
Proceeds from debt
Payments on debt
Repurchase of common stock
Proceeds from exercise of stock options
Dividends paid to stockholders
Other financing activities, net
Cash provided by (used for) financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash equivalents
Increase (decrease) on cash, cash equivalents and restricted cash equivalents
Cash, cash equivalents and restricted cash equivalents at beginning of period
Cash, cash equivalents and restricted cash equivalents at end of period1
Supplemental cash flow information
Cash paid during the period for
Interest, net of amounts capitalized
Income taxes
$
$
For the Year Ended December 31,
2022
2023
2021
$
747 $
1,158 $
1,769
194
58
53
1,211
(438)
138
(149)
(22)
336
578
358
57
(663)
(11)
(527)
1,809
(40)
1,769
(595)
57
(1,456)
—
(32)
(148)
147
42
(2)
(1,987)
1,223
(288)
(142)
(182)
(18)
363
305
(993)
(1,715)
807
194
142
912
(40)
872
(605)
73
—
(36)
(12)
(344)
295
—
(3)
(632)
(6)
3,429
(2,309)
(756)
31
(439)
(49)
(99)
(143)
(460)
3,618
3,158 $
(13)
1,358
(1,140)
(1,000)
88
(418)
(55)
(1,180)
(278)
(1,218)
4,836
3,618 $
1,243
199
(1,292)
(247)
(21)
289
154
(113)
(422)
526
574
57
2,769
(42)
2,727
(573)
75
—
—
(4)
(204)
345
—
(1)
(362)
13
419
(421)
(950)
100
(397)
(30)
(1,266)
(136)
963
3,873
4,836
234 $
535
75 $
467
30
341
1. See page F-26 for reconciliation of cash and cash equivalents and restricted cash equivalents presented in the Consolidated Balance Sheets to total cash, cash
equivalents and restricted cash equivalents presented in the Consolidated Statements of Cash Flows.
See Notes to the Consolidated Financial Statements beginning on page F-10.
F-8
CONSOLIDATED STATEMENTS OF EQUITY
Corteva, Inc.
Consolidated Financial Statements
(In millions)
Balance at January 1, 2021
Net income (loss)
Other comprehensive income (loss)
Share-based compensation
Common dividends ($0.54 per share)
Repurchase of common stock
Issuance of Corteva stock
Other - net
Balance at December 31, 2021
Net income (loss)
Other comprehensive income (loss)
Share-based compensation
Common dividends ($0.58 per share)
Repurchase of common stock
Issuance of Corteva stock
Other - net
Balance at December 31, 2022
Net income (loss)
Other comprehensive income (loss)
Share-based compensation
Common dividends ($0.62 per share)
Repurchase of common stock
Issuance of Corteva stock
Other - net
Balance at December 31, 2023
Accumulat
ed Other
Comp
Income
(Loss)
Non-
controlling
Interests
Total
Equity
Additional
Paid-in
Capital
"APIC"
7 $ 27,707 $
Retained
Earnings
(Accum
Deficit)
Common
Stock
$
— $
(2,890) $
(8)
1,759
(3)
(300)
(932)
59
(97)
(18)
100
$
7 $ 27,751 $
524 $
(2,898) $
92
(2,806) $
129
1,147
(2)
(418)
(1,000)
(1)
250 $
735
(2)
(439)
(585)
12
88
$
7 $ 27,851 $
28
(171)
40
$
7 $ 27,748 $
(41) $
(2,677) $
239 $
10
(10)
239 $
11
(11)
239 $
12
(9)
242 $
25,063
1,769
(8)
56
(397)
(950)
100
(10)
25,623
1,158
92
10
(418)
(1,000)
88
(12)
25,541
747
129
26
(439)
(756)
40
(9)
25,279
See Notes to the Consolidated Financial Statements beginning on page F-10.
F-9
Corteva, Inc.
Notes to the Consolidated Financial Statements
Table of Contents
Note
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Background and Basis of Presentation
Summary of Significant Accounting Policies
Recent Accounting Guidance
Business Combinations
Revenue
Restructuring and Asset Related Charges - Net
Supplementary InformationF-25
Income Taxes
Earnings Per Share of Common Stock
Accounts and Notes Receivable - Net
InventoriesF-32
Property, Plant and Equipment
Goodwill and Other Intangible Assets
Leases
Short-Term Borrowings, Long-Term Debt and Available Credit Facilities
Commitments and Contingent Liabilities
Stockholders' Equity
Pension Plans and Other Post-Employment Benefits
Stock-Based Compensation
Financial InstrumentsF-60
Fair Value Measurements
Geographic InformationF-66
Segment InformationF-67
Page
F-11
F-12
F-17
F-18
F-19
F-22
F-26
F-30
F-31
F-32
F-32
F-34
F-35
F-37
F-46
F-49
F-58
F-65
F-10
NOTE 1 - BACKGROUND AND BASIS OF PRESENTATION
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Corteva, Inc. is a leading global provider of seed and crop protection solutions focused on the agriculture industry. The
company intends to leverage its rich heritage of scientific achievement to advance its robust innovation pipeline and continue to
shape the future of responsible agriculture. The company's broad portfolio of agriculture solutions fuels farmer productivity
around the globe. Corteva has two reportable segments: seed and crop protection. See Note 23 - Segment Information, to the
Consolidated Financial Statements, for additional information on the company's reportable segments.
Throughout these financial statements, except as otherwise noted by the context, the terms "Corteva" or "company" used herein
mean Corteva, Inc. and its consolidated subsidiaries (including EIDP) and the term “EIDP” used herein means EIDP, Inc.
(formerly known as E. I. du Pont de Nemours and Company) and its consolidated subsidiaries or EIDP, Inc. excluding its
consolidated subsidiaries, as the context may indicate.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements contained in this Annual Report were prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") for all periods presented and include the accounts of the
company, its majority owned subsidiaries over which the company exercises control. The Consolidated Financial Statements
and other financial information included in this Annual Report, unless otherwise specified, have been presented to separately
show the effects of discontinued operations.
The company made the decision, which was retrospectively applied, to adjust the presentation of the Consolidated Statement of
Cash Flows to separately show the cash provided by (used for) operating activities – discontinued operations, which was
previously presented within cash provided by (used for) operating activities. See Note 16 – Commitments and Contingent
Liabilities, to the Consolidated Financial Statements, for additional information on discontinued operations activities.
On June 1, 2019, Corteva, Inc. became an independent, publicly traded company through the completed separation (the
“Separation”) of the agriculture business of DuPont de Nemours, Inc. (formerly known as DowDuPont Inc.) (“DowDuPont” or
“DuPont”). The separation was effectuated through a pro rata distribution (the “Corteva Distribution”) of all of the then-issued
and outstanding shares of common stock of Corteva, Inc.
Subsequent to the Merger, Historical Dow and EIDP engaged in a series of internal reorganization and realignment steps to
realign their businesses into three subgroups: agriculture, materials science and specialty products ("Internal Reorganization").
On April 1, 2019, DowDuPont completed the separation of its materials science business into a separate and independent public
company by way of a distribution of Dow common stock to holders of DowDuPont's common stock (the “Dow Distribution”
and together with the Corteva Distribution, the “Distributions”).
On April 1, 2019, Historical Dow entities, which held certain assets and liabilities aligned with Historical Dow’s agriculture
business and the assets and liabilities associated with its specialty products business, respectively, were transferred and
conveyed to DowDuPont.
On April 1, 2019 and May 1, 2019, EIDP’s materials science and specialty products entities, along with their respective assets
and liabilities, were conveyed to Dow and DowDuPont, respectively. On May 2, 2019, DowDuPont conveyed Historical Dow
agricultural entities to EIDP.
On May 6, 2019, the Board of Directors of DowDuPont approved the distribution of all the then issued and outstanding shares
of common stock of Corteva, Inc., then a wholly-owned subsidiary of DowDuPont, to DowDuPont stockholders. On May 31,
2019, DowDuPont contributed EIDP to Corteva, Inc. and on June 1, 2019, the Separation was completed. Information related to
the Corteva Distribution and its effect on the company's financial statements is discussed throughout these Notes to the
Consolidated Financial Statements.
Since 2018, Argentina has been considered a hyper-inflationary economy under U.S. GAAP and therefore the U.S. Dollar
(“USD”) is the functional currency for our related subsidiaries. Argentina contributes 4 percent and 3 percent to the company's
annual net sales and segment operating EBITDA, respectively. The company remeasures net monetary assets and translates the
financial statements utilizing the official Argentine Peso (“Peso”) to USD exchange rate. The ability to draw down Peso cash
balances is limited at this time due to government restrictions and market availability of U.S. Dollars. The devaluation of the
Peso relative to the USD over the last several years has resulted in the recognition of exchange losses (refer to Note 7 –
Supplementary Information, to the Consolidated Financial Statements). As of December 31, 2023, a further 10 percent
deterioration in the official Peso to USD exchange rate would reduce the USD value of our net monetary assets and negatively
F-11
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
impact pre-tax earnings by approximately $10 million. The company will continue to assess the implications to its operations
and financial reporting.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Consolidated Financial Statements include the accounts of the company and subsidiaries in which a controlling interest is
maintained. For those consolidated subsidiaries in which the company's ownership is less than 100 percent, the outside
stockholders' interests are shown as noncontrolling interests. Investments in affiliates over which the company has the ability to
exercise significant influence but does not have a controlling interest are accounted for under the equity method.
The company is also involved with certain joint ventures accounted for under the equity method of accounting that are variable
interest entities ("VIEs"). The company is not the primary beneficiary, as the nature of the company's involvement with each
VIE does not provide it the power to direct the VIE's significant activities. Future events may require these VIEs to be
consolidated if the company becomes the primary beneficiary. At December 31, 2023 and 2022, the maximum exposure to loss
related to the nonconsolidated VIEs is not considered material to the Consolidated Financial Statements.
Use of Estimates in Financial Statement Preparation
The preparation of financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. The company’s consolidated
financial statements include amounts that are based on management’s best estimates and judgments. Actual results could differ
from those estimates.
Cash and Cash Equivalents
Cash equivalents represent investments with maturities of three months or less from time of purchase. They are carried at cost
plus accrued interest.
Restricted Cash Equivalents
Restricted cash equivalents primarily consist of trust assets and contributions to the escrow accounts for the settlement of
certain legal matters and the settlement of legacy PFAS matters and the associated qualified spend. Corteva classifies restricted
cash equivalents as current or noncurrent based on the nature of the restrictions, which are included in other current assets and
other assets, respectively, in the Consolidated Balance Sheets. See Note 7 - Supplementary Information, to the Consolidated
Financial Statements, for further information.
Marketable Securities
Marketable securities represent investments in fixed and floating rate financial instruments with maturities greater than three
months and up to twelve months at time of purchase. Investments classified as held-to-maturity are recorded at amortized cost.
The carrying value approximates fair value due to the short-term nature of the investments. Investments classified as debt
securities that are available-for-sale are carried at estimated fair value with unrealized gains and losses recorded as a component
of accumulated other comprehensive income (loss) or current period earnings if an allowance for credit losses has been
established. The cost of investments sold is determined by specific identification.
Fair Value Measurements
Under the accounting guidance for fair value measurements and disclosures, a fair value hierarchy was established that
prioritizes the inputs to valuation techniques used to measure fair value. A financial instrument's level within the fair value
hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The company uses the following hierarchy to classify assets and liabilities measured at fair value:
Level 1 – Quoted market prices in active markets for identical assets or liabilities.
Level 2 – Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for
identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as
interest rate and yield curves, and market-corroborated inputs).
Level 3 – Unobservable inputs for the asset or liability, which are valued based on management's estimates of assumptions
that market participants would use in pricing the asset or liability.
F-12
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Foreign Currency Translation
The company's worldwide operations utilize the USD or a related foreign currency as the functional currency, where applicable.
The company identifies its separate and distinct foreign entities and groups the foreign entities into two categories: 1) extension
of the parent or foreign subsidiaries operating in a hyper-inflationary environment (USD functional currency) and 2) self-
contained (related foreign functional currency). If a foreign entity does not align with either category, factors are evaluated and
a judgment is made to determine the functional currency.
For foreign entities where the USD is the functional currency, all foreign currency-denominated asset and liability amounts are
re-measured into USD at end-of-period exchange rates, except for inventories, prepaid expenses, property, plant and equipment,
goodwill and other intangible assets, which are re-measured at historical rates. Foreign currency income and expenses are re-
measured at average exchange rates in effect during each month, except for expenses related to balance sheet amounts re-
measured at historical exchange rates. Exchange gains and losses arising from re-measurement of foreign currency-
denominated monetary assets and liabilities are included in income in the period in which they occur.
For foreign entities where a related foreign currency is the functional currency, assets and liabilities denominated in the related
foreign currencies are translated into USD at end-of-period exchange rates and the resultant translation adjustments are
reported, net of their related tax effects, as a component of accumulated other comprehensive income (loss) in equity. Assets
and liabilities denominated in other than the functional currency are re-measured into the functional currency prior to translation
into USD and the resultant exchange gains or losses are included in income in the period in which they occur. Income and
expenses are translated into USD at average exchange rates in effect during each month.
The company changes the functional currency of its separate and distinct foreign entities only when significant changes in
economic facts and circumstances indicate clearly that the functional currency has changed.
Inventories
The company's inventories are valued at the lower of cost or net realizable value. Elements of cost in inventories include raw
materials, direct labor and manufacturing overhead. Stores and supplies are valued at cost or net realizable value, whichever is
lower; cost is generally determined by the average cost method.
As of December 31, 2023, approximately 60% and 40% of the company's inventories were accounted for under the first-in,
first-out ("FIFO") and average cost methods, respectively. As of December 31, 2022, approximately 55% and 45% of the
company's inventories were accounted for under the FIFO and average cost methods, respectively. Inventories accounted for
under the FIFO method are primarily comprised of products with shorter shelf lives such as seeds. See Note 11 - Inventories, to
the Consolidated Financial Statements, for further information.
The company establishes an obsolescence reserve for inventory based upon quality considerations and assumptions about future
demand and market conditions.
Property, Plant and Equipment
Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is based on the estimated service
lives of depreciable assets and is calculated using the straight-line method. Fully depreciated assets are retained in property and
accumulated depreciation accounts until they are removed from service. When assets are surrendered, retired, sold, or otherwise
disposed of, their gross carrying values and related accumulated depreciation are removed from the Consolidated Balance
Sheets and included in determining gain or loss on such disposals. See Note 12 – Property, Plant and Equipment, to the
Consolidated Financial Statements, for further information.
Goodwill and Other Intangible Assets
The company records goodwill when the purchase price of a business acquisition exceeds the estimated fair value of net
identified tangible and intangible assets acquired. Goodwill is tested for impairment at the reporting unit level at least annually,
or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than
not declined below its carrying value. The company performs an annual goodwill impairment test in the fourth quarter.
When testing goodwill for impairment, the company has the option to first perform qualitative testing to determine whether it is
more likely than not that the fair value of a reporting unit is less than its carrying value. If the company chooses not to complete
a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the
carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required. If additional
quantitative testing is required, the reporting unit's fair value is compared with its carrying amount, and an impairment charge,
if any, is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, limited to the amount
of goodwill associated with the reporting unit. The company determines fair values for each of the reporting units using a
F-13
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
discounted cash flow model (a form of the income approach) or the market approach. Under the income approach, fair value is
determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. The
company's significant assumptions in this analysis include future cash flow projections, weighted average cost of capital, the
terminal growth rate, and the tax rate. Under the market approach, the company uses metrics of publicly traded companies or
historically completed transactions for comparable companies. See Note 13 - Goodwill and Other Intangible Assets, to the
Consolidated Financial Statements, for further information on goodwill.
Indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently
when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value
exceeds fair value. The company performs an impairment assessment using the multi-period excess earnings method (a form of
the income approach) using Level 3 inputs within the fair value hierarchy. The significant assumptions used in the calculation
include future cash flow projections, the discount rate, and the terminal growth rate. These significant assumptions involve
management judgment and estimates relating to future operating performance and economic conditions that may differ from
actual cash flows.
Definite-lived intangible assets are amortized over their estimated useful lives, generally on a straight-line basis for periods
ranging primarily from 2 years to 25 years. The company continually evaluates the reasonableness of the useful lives of these
assets. Once these assets are no longer considered held and used, they are removed from the Consolidated Balance Sheets.
Acquisitions
Acquisitions are recorded using the acquisition method of accounting and recognizes and measures the identifiable assets
acquired and liabilities assumed as of the acquisition date at fair value, where applicable. The excess, if any, of total
consideration transferred in a business combination over the fair value of identifiable assets acquired and liabilities assumed is
recognized as goodwill. Costs incurred as a result of a business combination other than costs related to the issuance of debt or
equity securities are recorded in the period the costs are incurred. The company includes the operating results of acquired
entities from their respective dates of acquisition.
Leases
The company determines whether an arrangement is a lease at the inception of the arrangement based on the terms and
conditions in the contract. A contract contains a lease if there is an identified asset and the company has the right to control the
asset. Operating lease right-of-use ("ROU") assets are included in other assets on the company’s Consolidated Balance Sheets.
Operating lease liabilities are included in accrued and other current liabilities and other noncurrent obligations on the
company’s Consolidated Balance Sheets. Finance lease assets are included in property, plant and equipment on the company’s
Consolidated Balance Sheets. Finance lease liabilities are included in short-term borrowings and finance lease obligations and
long-term debt on the company’s Consolidated Balance Sheets.
Operating lease ROU assets represent the company’s right to use an underlying asset for the lease term and lease liabilities
represent the company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities
are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the
company’s leases do not provide the lessor's implicit rate,
the
commencement date in determining the present value of lease payments. Lease terms include options to extend the lease when
it is reasonably certain those options will be exercised. Leases with an initial term of 12 months or less are not recorded on the
balance sheet. The company recognizes lease expense for these leases on a straight-line basis over the lease term.
the company uses its incremental borrowing rate at
The company has lease agreements with lease and non-lease components, which are accounted for as a single lease component
for all asset classes. In the Consolidated Statements of Operations, lease expense for operating leases is recognized on a
straight-line basis over the lease term. For finance leases, interest expense is recognized on the lease liability and the ROU asset
is amortized over the lease term. See Note 14 - Leases, to the Consolidated Financial Statements, for further information.
Impairment of Long-Lived Assets
The company evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances
indicate the carrying value may not be recoverable. The carrying value of a long-lived asset group is considered impaired when
the total projected undiscounted cash flows from the assets are separately identifiable and are less than its carrying value. In that
event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset group.
The company's fair value methodology is an estimate of fair market value which is made based on prices of similar assets or
other valuation methodologies including present value techniques. Long-lived assets to be disposed of by sale, if material, are
classified as held for sale and reported at the lower of carrying amount or fair value less cost to sell, and depreciation is ceased.
Long-lived assets to be disposed of other than by sale are classified as held and used until they are disposed of and reported at
the lower of carrying amount or fair value. Depreciation is recognized over the remaining useful life of the assets.
F-14
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Derivative Instruments
Derivative instruments are reported in the Consolidated Balance Sheets at their fair values. The company utilizes derivatives to
manage exposures to foreign currency exchange rates and commodity prices. Changes in the fair values of derivative
instruments that are not designated as hedges are recorded in current period earnings. For derivative instruments designated as
cash flow hedges, the gain (loss) is reported in accumulated other comprehensive income (loss) until it is cleared to earnings
during the same period in which the hedged item affects earnings. For derivative instruments designated as net investment
hedges, the gain (loss) is reported within accumulated other comprehensive income (loss) until the subsidiary is divested.
In the event that a derivative designated as a hedge of a firm commitment or an anticipated transaction is terminated prior to the
maturation of the hedged transaction, the net gain or loss in accumulated other comprehensive income (loss) generally remains
in accumulated other comprehensive income (loss) until the item that was hedged affects earnings. If a hedged transaction
matures, or is sold, extinguished, or terminated prior to the maturity of a derivative designated as a hedge of such transaction,
gains or losses associated with the derivative through the date the transaction matured are included in the measurement of the
hedged transaction and the derivative is reclassified as for trading purposes. Derivatives designated as hedges of anticipated
transactions are reclassified as for trading purposes if the anticipated transaction is no longer probable.
The company included foreign currency exchange contract settlements within cash flows from operating activities, regardless of
hedge accounting qualification. See Note 20 - Financial Instruments, to the Consolidated Financial Statements, for additional
discussion regarding the company's objectives and strategies for derivative instruments.
Environmental Matters
Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the
liability can be reasonably estimated. These accruals are adjusted periodically as assessment and remediation efforts progress or
as additional technical or legal information becomes available. Accruals for environmental liabilities are included in the
Consolidated Balance Sheets in accrued and other current liabilities and other noncurrent obligations at undiscounted amounts.
Accruals for related insurance or other third-party recoveries for environmental liabilities are recorded when it is probable that a
recovery will be realized and are included in the Consolidated Balance Sheets as accounts and notes receivable - net.
Environmental costs are capitalized if the costs extend the life of the property, increase its capacity, and/or mitigate or prevent
contamination from future operations. Environmental costs are also capitalized in recognition of legal asset retirement
obligations resulting from the acquisition, construction and/or normal operation of a long-lived asset. Costs related to
environmental contamination treatment and cleanup are charged to expense. Estimated future incremental operations,
maintenance and management costs directly related to remediation are accrued when such costs are probable and reasonably
estimable.
Revenue Recognition
The company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects
the consideration which the company expects to receive in exchange for those goods or services. To determine the revenue
recognition for an arrangement considered to be a contract with a customer, the company performs the following five steps: (1)
identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction
price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as)
the entity satisfies a performance obligation. See Note 5 - Revenue, to the Consolidated Financial Statements, for additional
information on revenue recognition.
Prepaid Royalties
The company currently has certain third-party biotechnology trait license agreements, which require up-front and variable
payments subject to the licensor meeting certain conditions. These payments are reflected as other current assets and other
assets in the Consolidated Balance Sheets and are amortized to cost of goods sold in the Consolidated Statement of Operations
as seeds containing the respective trait technology are utilized over the life of the license. The rate of royalty amortization
expense recognized is based on the company’s strategic plans which include various assumptions and estimates including
product portfolio, market dynamics, farmer preferences, growth rates and projected planted acres. Changes in factors and
assumptions included in the strategic plans, including potential changes to the product portfolio in favor of internally developed
biotechnology, could impact the rate of recognition of the relevant prepaid royalty.
At December 31, 2023, the balance of prepaid royalties reflected in other current assets and other assets in the Consolidated
Balance Sheets was approximately $105 million and $25 million, respectively. The majority of the balance of prepaid royalties
in other current assets relates to the company’s wholly owned subsidiary, Pioneer Hi-Bred International, Inc.’s (“Pioneer”) non-
exclusive license in the United States and Canada for the Monsanto Company's Genuity® Roundup Ready 2 Yield® glyphosate
F-15
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
tolerance trait and Roundup Ready 2 Xtend® glyphosate and dicamba tolerance trait for soybeans (“Roundup Ready 2 License
Agreement”). Each of these licensed technologies are now trademarks of the Bayer Group, which acquired the Monsanto
Company in 2018. The prepaid royalty asset relates to a series of up-front, fixed and variable royalty payments to utilize the
traits in Pioneer’s soybean product mix. The company’s historical expectation was that the technology licensed under the
Roundup Ready 2 License Agreement would be used as the primary herbicide tolerance trait platform in the Pioneer® brand
soybean through the term of the agreement. DAS and MS Technologies, L.L.C. jointly developed and own the Enlist E3TM
herbicide tolerance trait for soybeans which provides tolerance to 2, 4-D choline in Enlist Duo® and Enlist One® herbicides, as
well as glyphosate and glufosinate herbicides. In connection with the validation of breeding plans and large-scale product
development timelines, during 2019 the company committed to accelerate the ramp up of the Enlist E3TM trait platform in the
company’s soybean portfolio mix across all brands, including Pioneer® brands. During the five-year ramp-up period, the
company has began to significantly reduce the volume of products with the Roundup Ready 2 Yield® and Roundup Ready 2
Xtend® herbicide tolerance traits, with expected minimal use of the trait platform thereafter for the remainder of the Roundup
Ready 2 License Agreement (the “Transition Plan”). The rate of royalty expense has therefore increased significantly through
higher amortization of the prepaid royalty as fewer seeds containing the respective trait are expected to be utilized.
In connection with the departure from these traits, beginning January 1, 2020 the company presents and discloses the non-cash
accelerated prepaid royalty amortization expense as a component of restructuring and asset related charges - net, in the
Consolidated Statement of Operations. The accelerated prepaid royalty amortization expense represents the difference between
the rate of amortization based on the revised number of units expected to contain the Roundup Ready 2 Yield® and Roundup
Ready 2 Xtend® trait technology and the variable cash rate per the Roundup Ready 2 License Agreement.
Further changes in factors and assumptions associated with usage of the trait platform licensed under the Roundup Ready 2
License Agreement, including the Transition Plan, could further impact the rate of recognition of the prepaid royalty and
Consolidated Statement of Operations presentation of the accelerated prepaid royalty amortization expense.
Cost of Goods Sold
Cost of goods sold primarily includes the cost of manufacture and delivery, ingredients or raw materials, direct salaries, wages
and benefits and overhead, non-capitalizable costs associated with capital projects, royalties and other operational expenses. No
amortization of intangibles is included within cost of goods sold.
Research and Development
Research and development costs are expensed as incurred. Research and development expense includes costs (primarily
consisting of employee costs, materials, contract services, research agreements, and other external spend) relating to the
discovery and development of new products.
Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily include selling and marketing expenses, commissions, functional costs,
and business management expenses.
Litigation and Other Contingencies
Accruals for legal matters and other contingencies are recorded when it is probable that a liability has been incurred and the
amount of the liability can be reasonably estimated. Legal costs, such as outside counsel fees and expenses, are charged to
expense in the period incurred.
Severance Costs
Severance benefits are provided to employees under the company's ongoing benefit arrangements. Severance costs are accrued
when management commits to a plan of termination and it becomes probable that employees will be entitled to benefits at
amounts that can be reasonably estimated.
Insurance/Self-Insurance
The company self-insures certain risks where permitted by law or regulation, including workers' compensation, vehicle liability
and employee related benefits. Liabilities associated with these risks are estimated in part by considering historical claims
experience, demographic factors and other actuarial assumptions. For other risks, the company uses a combination of insurance
and self-insurance, reflecting comprehensive reviews of relevant risks. A receivable for an insurance recovery is generally
recognized when the loss has occurred and collection is considered probable.
F-16
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Income Taxes
The company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases
of assets and liabilities using enacted tax rates. The effect of a change in tax rates on deferred tax assets or liabilities is
recognized in income in the period that includes the enactment date.
The company recognizes the financial statement effects of an uncertain income tax position when it is more likely than not,
based on the technical merits, that the position will be sustained upon examination. The current portion of uncertain income tax
positions is included in income taxes payable or income tax receivable, and the long-term portion is included in other
noncurrent obligations or other noncurrent assets in the Consolidated Balance Sheets.
Income tax related penalties are included in the provision for (benefit from) income taxes in the Consolidated Statements of
Operations. Interest accrued related to unrecognized tax benefits is included within the provision for (benefit from) income
taxes from continuing operations in the Consolidated Statements of Operations.
Earnings per Common Share
The calculation of earnings per common share is based on the weighted-average number of the company’s common shares
outstanding for the applicable period. The calculation of diluted earnings per common share reflects the effect of all potential
common shares that were outstanding during the respective periods, unless the effect of doing so is antidilutive.
NOTE 3 - RECENT ACCOUNTING GUIDANCE
Recently Adopted Accounting Guidance
In September 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update ("ASU")
2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This
ASU includes amendments that require a buyer in supplier finance programs to disclose key terms of the programs and related
obligations, including a rollforward of such obligations. This guidance is effective for fiscal years beginning after December 15,
2022, including interim periods within those fiscal years, except for the rollforward requirements, which are effective for fiscal
years beginning after December 15, 2023, and early adoption is permitted. Retrospective application to all periods in which a
balance sheet is presented is required, except for the rollforward requirement, which will be applied prospectively. The
company adopted this guidance on January 1, 2023 which resulted in certain disclosures being added relating to supplier
financing programs and related obligations. See Note 16 – Commitments and Contingent Liabilities, to the Consolidated
Financial Statements, for additional information.
Accounting Guidance Issued But Not Adopted as of December 31, 2023
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The
ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as reconciling items that
meet a quantitative threshold. Further, the ASU requires additional disclosures on income tax expense and taxes paid, net of
refunds received, by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024 on a
prospective basis with the option to apply it retrospectively. Early adoption is permitted. The adoption of this guidance will
result in the company being required to include enhanced income tax related disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment
Disclosures. This ASU includes amendments that expand the existing reportable segment disclosure requirements and requires
disclosure of (i) significant expense categories and amounts by reportable segment as well as the segment’s profit or loss
measure(s) that are regularly provided to the chief operating decision maker (the “CODM”) to allocate resources and assess
performance; (ii) how the CODM uses each reported segment profit or loss measure to allocate resources and assess
performance; (iii) the nature of other segment balances contributing to reported segment profit or loss that are not captured
within segment revenues or expenses; and (iv) the title and position of the individual or name of the group or committee
identified as the CODM. This guidance requires retrospective application to all prior periods presented in the financial
statements and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning
after December 15, 2024. Early adoption is permitted. The adoption of this guidance will result in the company being required
to include enhanced disclosures relating to its reportable segments.
In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60):
Recognition and Initial Measurement. The amendments in this ASU are intended to facilitate consistency in the application of
accounting guidance upon the formation of entities qualifying as joint ventures. It generally requires the use of business
combinations accounting at the joint venture formation date, which would result in the contributed assets/liabilities being
F-17
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
revalued to fair value and potentially result in the recognition of goodwill and other intangibles on the joint venture’s financial
statements. It does not alter the ongoing accounting for the joint venture’s operations. This guidance is effective for joint
ventures with formation dates on or after January 1, 2025. Prospective application is required, with early adoption permitted.
Retrospective application can be elected for joint ventures formed before January 1, 2025. The company does not expect the
impact of adoption to be material.
NOTE 4 - BUSINESS COMBINATIONS
On March 1, 2023 ("Acquisition Date"), Corteva completed its previously announced acquisitions of all the outstanding equity
interests in Stoller Group, Inc. (“Stoller”), one of the largest independent companies in the Biologicals industry, and Quorum
Vital Investment, S.L. and its affiliates (“Symborg”), an expert in microbiological technologies. The purchase price for Stoller
and Symborg was $1,220 million, inclusive of a working capital adjustment, and $370 million, respectively. These acquisitions
supplement the crop protection business with additional biological tools that complement evolving farming practices.
The operating results of Stoller and Symborg, since the Acquisition Date, did not have a material impact to the company's
Consolidated Financial Statements for the year ended December 31, 2023. Additionally, supplemental pro forma information
have not been presented since the reported amounts in the company's Consolidated Financial Statements for the current period
and comparative prior periods would not be materially different had these acquisitions occurred as of January 1, 2022.
Purchase Price Allocation
The company performed a preliminary purchase price allocation and assessment of the fair value of the assets acquired and
liabilities assumed as of the Acquisition Date. The company continues to evaluate aspects of net working capital and income tax
related amounts and will finalize the purchase price allocation as it obtains the information necessary to complete the valuation
during the measurement period. The effect of measurement period adjustments to the estimated fair values will be reflected as if
the adjustments had been completed on the Acquisition Date.
The following table summarizes the preliminary purchase price allocation to the assets acquired and liabilities assumed for the
Stoller and Symborg acquisitions, as of the Acquisition Date:
(In millions)
Assets
Cash and cash equivalents$
Accounts and notes receivable
Inventories
Other current assets
Property, plant and equipment
Goodwill
Other intangible assets
Deferred income taxes
Other assets
Total assets acquired
Liabilities
Short-term borrowings
Accounts payable
Income taxes payable
Accrued and other current liabilities
Long-term debt
Deferred income tax liabilities
Other noncurrent obligations
Total liabilities assumed$
Net assets acquired$
Stoller1
Symborg1
$
97 $
243
81
9
71
383
645
10
5
1,544 $
59
25
2
65
2
150
21
324 $
1,220 $
—
17
10
2
3
129
300
—
1
462
—
13
—
4
—
74
1
92
370
1. Includes preliminary measurement period adjustments, which were not material.
The significant fair value adjustments included in the preliminary purchase price allocation are discussed below.
F-18
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Inventories
Acquired inventories in connection with the acquisition of Stoller and Symborg are primarily comprised of finished goods and
raw materials. The fair value of finished goods was calculated as the estimated selling price, adjusted for costs of the selling
effort and a reasonable profit allowance relating to the selling effort. The fair value of raw materials and supplies was
determined based on replacement cost which approximates historical carrying value. The fair value step-up was recognized
within cost of goods sold, in the Consolidated Statements of Operations, as the inventory was sold.
Property, Plant & Equipment
Property, plant and equipment associated with Stoller is comprised of $31 million of machinery and equipment, $31 million of
buildings, $7 million of land and land improvements, and $2 million of construction in progress. The preliminary estimated fair
value was primarily determined using a market approach for land and certain types of equipment, and a replacement cost
approach for the remaining depreciable property, plant and equipment. The market approach for certain types of equipment
represents a sale comparison that measures the value of an asset through an analysis of sales and offerings of comparable assets.
The replacement cost approach used for all other depreciable property, plant and equipment measures the value of an asset by
estimating the cost to acquire or construct comparable assets and adjust for age and condition of the asset.
Goodwill
The excess of the consideration for Stoller and Symborg over the preliminary net fair value of assets acquired and liabilities
assumed resulted in the recognition of goodwill, which has been assigned to the crop protection reporting unit. Goodwill
associated with these acquisitions is attributable to the assembled workforce and expanding the company’s addressable market
position. None of the goodwill recognized will be deductible for income tax purposes.
Other Intangible Assets
In connection with the acquisitions of Stoller and Symborg, the company recorded certain intangible assets, as shown in the
table below, representing the preliminary fair values at the Acquisition Date.
Intangible Assets
(in millions)
Fair Value
StollerSymborg
Weighted-Average
Amortization
Period (Years)
Fair Value
Weighted-Average
Amortization
Period (Years)
Intangible assets with finite lives:
Customer-related
Developed technology
Trademarks/ trade names
$
Total other intangible assets with finite lives
$
Intangible assets with infinite lives:
IPR&D
Total other intangible assets with indefinite
lives
Total intangible assets
$
$
495
106
44
645
—
—
645
13 $
13
15
13 $
—
— $
$
—
238
57
295
5
5
300
—
12
12
12
—
—
The preliminary customer-related and in-process research and development (“IPR&D”) intangible asset’s fair values were
determined using the multi-period excess earnings method. The preliminary developed technology fair values were determined
utilizing the relief from royalty method for Stoller and the multi-period excess earnings method for Symborg. The trademark/
trade name fair values were determined utilizing the relief from royalty method.
NOTE 5 - REVENUE
Revenue Recognition
Products
Substantially all of Corteva's revenue is derived from product sales, which consist of sales of Corteva's products to farmers,
distributors, and manufacturers. Corteva considers purchase orders, which in some cases are governed by master supply
agreements, to be a contract with a customer. Contracts with customers are considered to be short-term when the time between
order confirmation and satisfaction of the performance obligations is equal to or less than one year. However, the company has
some long-term contracts which can span multiple years.
F-19
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Revenue from product sales is recognized when the customer obtains control of the company's product, which occurs at a point
in time according to shipping terms. Payment terms are generally less than one year from invoicing. The company elected the
practical expedient and does not adjust the promised amount of consideration for the effects of a significant financing
component when the company expects it will be one year or less between when a customer obtains control of the company's
product and when payment is due. When the company performs shipping and handling activities after the transfer of control to
the customer (e.g., when control transfers prior to or at shipment), these are considered fulfillment activities, and accordingly,
the costs are accrued when the related revenue is recognized. Taxes collected from customers relating to product sales and
remitted to governmental authorities are excluded from revenues. In addition, the company elected the practical expedient to
expense any costs to obtain contracts as incurred, as the amortization period for these costs would have been one year or less.
The transaction price includes estimates of variable consideration, such as rights of return, rebates, and discounts, that are
reductions in revenue. All estimates are based on the company's historical experience, anticipated performance, and the
company's best judgment at the time the estimate is made. Estimates of variable consideration included in the transaction price
primarily utilize the expected value method based on historical experience. These estimates are reassessed each reporting period
and are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized
will not occur upon resolution of uncertainty associated with the variable consideration. The majority of contracts have a single
performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as quantity times
price per unit. For contracts with multiple performance obligations, the company allocates the transaction price to each
performance obligation based on the relative standalone selling price. The standalone selling price is the observable price which
depicts the price as if sold to a similar customer in similar circumstances.
Licenses of Intellectual Property
Corteva enters into licensing arrangements with customers under which it licenses its intellectual property. Revenue from the
majority of intellectual property licenses is derived from sales-based royalties. Revenue for licensing agreements that contain
sales-based royalties is recognized at the later of (i) when the subsequent sale occurs or (ii) when the performance obligation to
which some or all of the royalty has been allocated is satisfied.
Remaining Performance Obligations
Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied performance
obligations. The company applies the practical expedient
to disclose the transaction price allocated to the remaining
performance obligations for only those contracts with an original duration of more than one year. The transaction price
allocated to remaining performance obligations with an original duration of more than one year related to material rights
granted to customers for contract renewal options were $134 million and $131 million at December 31, 2023 and December 31,
2022, respectively. The company expects revenue to be recognized for the remaining performance obligations evenly over the
period of one year to six years.
Contract Balances
Contract liabilities primarily reflect deferred revenue from prepayments under contracts with customers where the company
receives advance payments for products to be delivered in future periods. Corteva classifies deferred revenue as current or
noncurrent based on the timing of when the company expects to recognize revenue. Contract assets primarily include amounts
related to conditional rights to consideration for completed performance not yet invoiced. Accounts receivable are recorded
when the right to consideration becomes unconditional.
Contract Balances
(In millions)
Accounts and notes receivable - trade1
Contract assets - current2
Contract assets - noncurrent3
Deferred revenue - current
Deferred revenue - noncurrent4
1. Included in accounts and notes receivable - net in the Consolidated Balance Sheets.
2. Included in other current assets in the Consolidated Balance Sheets.
3. Included in other assets in the Consolidated Balance Sheets.
4. Included in other noncurrent obligations in the Consolidated Balance Sheets.
December 31, 2023 December 31, 2022
$
4,329 $
27
67
3,406
108
4,261
26
64
3,388
107
Revenue recognized during the year ended December 31, 2023, 2022, and 2021 from amounts included in deferred revenue at
the beginning of the period was $3,342 million, $3,150 million, and $2,613 million, respectively.
F-20
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Disaggregation of Revenue
Corteva's operations are classified into two reportable segments: Seed and Crop Protection. The company disaggregates its
revenue by major product line and geographic region, as the company believes it best depicts the nature, amount and timing of
its revenue and cash flows. Net sales by major product line are included below:
(In millions)
Corn
Soybean
Other oilseeds
Other
Seed
Herbicides
Insecticides
Fungicides
Other
Crop Protection
Total
For the Year Ended December 31,
2022
2023
2021
6,447 $
1,858
708
459
9,472
4,034
1,598
1,112
1,010
7,754
17,226 $
5,955 $
1,810
714
500
8,979
4,591
1,831
1,450
604
8,476
17,455 $
5,618
1,568
752
464
8,402
3,815
1,730
1,310
398
7,253
15,655
$
$
Sales are attributed to geographic regions based on customer location. Net sales by geographic region and segment are included
below:
Seed
(In millions)
North America1
EMEA2
Latin America
Asia Pacific
Total
Crop ProtectionFo
(In millions)
North America1
EMEA2
Latin America
Asia Pacific
Total
For the Year Ended December 31,
2022
2023
2021
5,768 $
1,622
1,637
445
9,472 $
5,178 $
1,609
1,758
434
8,979 $
r the Year Ended December 31,
2023
2022
2021
2,822 $
1,745
2,269
918
7,754 $
3,116 $
1,647
2,687
1,026
8,476 $
5,004
1,599
1,420
379
8,402
2,532
1,524
2,125
1,072
7,253
$
$
$
$
1. Represents U.S. & Canada.
2. Europe, Middle East, and Africa ("EMEA").
Refer to Note 22 - Geographic Information for the breakout of consolidated net sales by geographic area.
F-21
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
NOTE 6 - RESTRUCTURING AND ASSET RELATED CHARGES - NET
Crop Protection Operations Strategy Restructuring Program
On November 5, 2023, management of the company approved a plan to further optimize its Crop Protection network of
manufacturing and external partners (the "Crop Protection Operations Strategy Program"). The plan includes the exit of the
company’s production activities at its site in Pittsburg, California, as well as ceasing operations in select manufacturing lines at
other locations.
The company expects to record aggregate pre-tax restructuring and asset related charges of $410 million to $460 million,
comprised of $70 million to $90 million of severance and related benefit costs, $320 million to $340 million of asset-related
and impairment charges and $20 million to $30 million of costs related to contract terminations. Reductions in workforce are
subject to local regulatory requirements. Asset-related charges include non-cash impairments charges of $152 million, which
were recognized during the year ended December 31, 2023 and consisted of $92 million and $60 million relating to operating
lease assets and property, plant and equipment, respectively, associated with the exit of the company’s production activities at
its site in Pittsburg, California.
Future cash payments related to these charges are anticipated to be $90 million to $120 million, which primarily relate to the
payment of severance and related benefits and contract terminations. During the year ended December 31, 2023, the company
paid $3 million associated with these charges. The restructuring actions associated with these charges are expected to be
substantially complete in 2024.
The charges of $217 million related to the Crop Protection Operations Strategy Program for the year ended December 31, 2023
impacted the crop protection segment. This amount excludes charges relating to spare parts write-offs, which also impacted the
crop protection segment, included in cost of goods sold, in the company’s Consolidated Statement of Operations. See Note 23 –
Segment Information, to the Consolidated Financial Statements, for additional information.
The following table is a summary of charges incurred related to the Crop Protection Strategy Operations Program for the year
ended December 31, 2023:
(In millions)
Asset related charges1
Contract termination charges
Total restructuring and asset related charges - net2
For the Year Ended
December 31, 2023
$
$
214
3
217
1. Asset-related charges includes impairment charges related to operating lease assets and property, plant and equipment, as noted above.
2. This amount excludes charges relating to spare parts write-offs included in cost of goods sold, in the company’s Consolidated Statement of Operations, as
noted above.
A reconciliation of the December 31, 2022 to the December 31, 2023 liability balances related to the Crop Protection
Operations Strategy Program is summarized below:
(In millions)
Balance at December 31, 2022
Charges to income from continuing operations
Payments
Asset write-offs
Balance at December 31, 2023
$
$
Asset Related1
Contract Termination
Total
— $
214
—
(214)
— $
— $
3
(3)
—
— $
—
217
(3)
(214)
—
1. Asset-related charges includes impairment charges related to operating lease assets and property, plant and equipment, as noted above.
F-22
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
2022 Restructuring Actions
In connection with the company’s shift to a global business unit model during 2022, the company assessed its business
priorities and operational structure to maximize the customer experience and deliver on growth and earnings potential. As a
result of this assessment, the company committed to restructuring actions during the second quarter of 2022, which included the
company’s separate announcement to withdraw from Russia (“Russia Exit”) (collectively the “2022 Restructuring Actions”).
Through the year ended December 31, 2023, the company recorded net pre-tax restructuring and other charges of $373 million
inception-to-date under the 2022 Restructuring Actions, consisting of $131 million of severance and related benefit costs, $116
million of asset related charges, $67 million of costs related to contract terminations (including early lease terminations) and
$59 million of other charges. The company does not anticipate any additional material charges from the 2022 Restructuring
Actions as actions associated with this charge are substantially complete.
Cash payments related to these charges are anticipated to be up to $210 million, of which approximately $150 million has been
paid through December 31, 2023, and primarily relate to the payment of severance and related benefits, contract terminations
and other charges. The restructuring actions associated with these charges are substantially complete.
The total net pre-tax restructuring and other charges recognized through the year ended December 31, 2023 included $53
million associated with the Russia Exit. The Russia Exit net pre-tax restructuring charges consisted of $6 million of severance
and related benefit costs, $6 million of asset related charges, and $30 million of costs related to contract terminations (including
early lease terminations). Other pre-tax charges associated with the Russia Exit were recorded to cost of goods sold and other
income (expense) – net in the Consolidated Statement of Operations, relating to inventory write-offs of $3 million and
settlement costs of $8 million, respectively.
The charges related to the 2022 Restructuring Actions related to the segments, as well as corporate expenses, for the years
ended December 31, 2023 and 2022 were as follows:
(In millions)
Seed
Crop Protection
Corporate expenses
Total1
For the Year Ended December 31,
2023
2022
$
$
17 $
5
20
42 $
120
41
111
272
1. This amount excludes other pre-tax charges recorded during the years ended December 31, 2023 and 2022 impacting the Seed segment. These charges
consisted of inventory write-offs and gains (losses) on sale of businesses, assets and equity investments and settlement costs associated with the Russia Exit,
which are included in cost of goods sold and other income (expense) - net, in the company's Consolidated Statement of Operations, respectively. See Note 23
- Segment Information, to the Consolidated Financial Statements, for additional information.
The following table is a summary of charges incurred related to the 2022 Restructuring Actions for the years ended December
31, 2023 and 2022:
(In millions)
Severance and related benefit costs$
Asset related charges12
Contract termination charges1
Total restructuring and asset related charges - net2
For the Year Ended December 31,
2023
2022
20 $
10
42 $
111
104
57
272
$
1. Contract terminations includes early lease terminations.
2. This amount excludes other pre-tax charges recorded during the year ended December 31, 2023 and 2022 included in cost of goods sold and other income
(expense) – net, in the company’s Consolidated Statement of Operations, as noted above.
F-23
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
A reconciliation of the December 31, 2022 to the December 31, 2023 liability balances related to the 2022 Restructuring
Actions is summarized below:
(In millions)
Balance at December 31, 2022
Charges to income from continuing operations
Payments
Asset write-offs
Balance at December 31, 2023
Severance and Related
Benefit Costs
Asset Related
Contract
Termination1
Total
$
$
71 $
20
(43)
—
48 $
— $
12
—
(11)
1 $
12 $
10
(13)
—
9 $
83
42
(56)
(11)
58
1. The liability for contract terminations includes lease obligations. The cash impact of these obligations are substantially complete.
2021 Restructuring Actions
During the first quarter of 2021, Corteva approved restructuring actions designed to right-size and optimize its footprint and
organizational structure according to the business needs in each region with the focus on driving continued cost improvement
and productivity. Through the year ended December 31, 2023, the company recorded net pre-tax restructuring charges of $167
million inception-to-date under the 2021 Restructuring Actions, consisting of $70 million of severance and related benefit costs,
$45 million of asset related charges, $12 million of asset retirement obligations and $40 million of costs related to contract
terminations (including early lease terminations). The company does not anticipate any additional material charges from the
2021 Restructuring Actions as actions associated with this charge were substantially complete by the end of 2021.
The charges related to the 2021 Restructuring Actions related to the segments, as well as corporate expenses, for the years
ended December 31, 2023, 2022 and 2021 were as follows:
(In millions)
Seed
Crop Protection
Corporate expenses
Total$
For the Year Ended December 31,
2022
2023
2021
$
— $
6
1
7 $
(1) $
(1)
(5)
(7) $
31
55
81
167
The following table is a summary of charges incurred related to the 2021 Restructuring Actions for the years ended December
31, 2023, 2022 and 2021:
(In millions)
Severance and related benefit costs$
Asset related charges
Contract termination charges
Total restructuring and asset related charges - net
$
For the Year Ended December 31,
2022
2023
2021
1 $
6
—
7 $
(5) $
—
(2)
(7) $
74
51
42
167
Other Asset Related Charges
For the years ended December 31, 2023, 2022, and 2021 the company recognized $72 million, $109 million, and $125 million
respectively, in restructuring and asset related charges - net in the Consolidated Statements of Operations, from non-cash
accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide
tolerance traits.
F-24
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
NOTE 7 - SUPPLEMENTARY INFORMATION
Other Income (Expense) - NetFo
(In millions)
Interest income
Equity in earnings (losses) of affiliates - net
Net gain (loss) on sales of businesses and other assets1
Net exchange gains (losses)2
Non-operating pension and other post-employment benefit credits (costs)3
Miscellaneous income (expenses) - net4
Other income (expense) - net
r the Year Ended December 31,
2023
2022
2021
283 $
124 $
10
22
(397)
(119)
(247)
(448) $
20
18
(229)
163
(156)
(60) $
77
14
21
(54)
1,318
(28)
1,348
$
$
1. The years ended December 31, 2022 and 2021 include a gain of $15 million and $19 million, respectively, relating to the sale of a business in the crop
protection segment.
2. Includes net pre-tax exchange gains (losses) of $(284) million, $(110) million and $(67) million associated with the devaluation of the Argentine peso for the
years ended December 31, 2023, 2022 and 2021, respectively.
3. Includes non-service related components of net periodic benefit credits (costs) (interest cost, expected return on plan assets, amortization of unrecognized
gain (loss), amortization of prior service benefit and settlement gain (loss)).
4. Includes losses from sale of receivables, tax indemnification adjustments related 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, and other items. The years ended December 31, 2023, 2022, and 2021 also
includes an Employee Retention Credit pursuant to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act as enhanced by the Consolidated
Appropriations Act (“CAA”) and American Rescue Plan Act (“ARPA”). The years ended December 31, 2023 and 2022 also includes estimated settlement
reserves and gains (losses) associated with the sale of businesses, assets and equity investments. The year ended December 31, 2022 also includes legal
accruals and settlement cost associated with the Russia Exit. The year ended December 31, 2021 also includes a charge related to a contract termination with
a third-party service provider, a gain from the remeasurement of an equity investment and an officer indemnification payment. See Note 23 - Segment
Information, to the Consolidated Financial Statements, for additional information on significant items.
The following table summarizes the impacts of the company's foreign currency hedging program on the company's results of
operations. 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.
For the Year Ended December 31,
2022
2021
2023
$
$
$
$
$
$
(371) $
55
(316) $
(26) $
7
(19) $
(397) $
62
(335) $
(217) $
(10)
(227) $
(12) $
5
(7) $
(229) $
(5)
(234) $
(72)
(30)
(102)
18
(4)
14
(54)
(34)
(88)
(In millions)
Subsidiary Monetary Position Gain (Loss)
Pre-tax exchange gain (loss)
Local tax (expenses) benefits
Net after-tax impact from subsidiary exchange gain (loss)
Hedging Program Gain (Loss)
Pre-tax exchange gain (loss)
Tax (expenses) benefits
Net after-tax impact from hedging program exchange gain (loss)
Total Exchange Gain (Loss)
Pre-tax exchange gain (loss)
Tax (expenses) benefits
Net after-tax exchange gain (loss)
F-25
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Cash, cash equivalents and restricted cash equivalents
The following table provides a reconciliation of cash and cash equivalents and restricted cash equivalents presented in the
Consolidated Balance Sheets to the total cash, cash equivalents and restricted cash equivalents presented in the Consolidated
Statements of Cash Flows. Corteva classifies restricted cash equivalents as current or noncurrent based on the nature of the
restrictions, which are included in other current assets and other assets, respectively, in the Consolidated Balance Sheets.
(In millions)
December 31, 2023
December 31, 2022
Cash and cash equivalents$
Restricted cash equivalents
Total cash, cash equivalents and restricted cash equivalents
$
2,644 $
514
3,158 $
3,191
427
3,618
Restricted cash equivalents primarily relates to a trust funded by EIDP for cash obligations under certain non-qualified benefit
and deferred compensation plans due to the Merger, which was a change in control event, and contributions to escrow accounts
established for the settlement of certain legal matters and the settlement of legacy PFAS matters and the associated qualified
spend. All of the company's restricted cash equivalents are classified as current as of December 31, 2023 and 2022, except for
the contributions to the escrow account established for the settlement of legacy PFAS matters and the associated qualified
spend, which was classified as noncurrent at December 31, 2022.
Accounts payable
Accounts payable was $4,280 million and $4,895 million at December 31, 2023 and 2022, respectively. Accounts payable -
trade, which is a component of accounts payable, was $2,952 million and $3,717 million at December 31, 2023 and 2022,
respectively. Included in accounts payable – trade was seed grower compensation of approximately $560 million and $470
million at December 31, 2023 and 2022, respectively, which is measured at fair value using level 2 inputs for each period
presented. Accrued discounts and rebates, which is a component of accounts payable, was approximately $1,170 million and
$1,030 million at December 31, 2023 and 2022, respectively. No other components of accounts payable were more than 5
percent of total current liabilities.
NOTE 8 - INCOME TAXES
Domestic and foreign components of the income (loss) from continuing operations before income taxes and the provision for
(benefit from) current and deferred tax expense (benefit) are shown below:
Geographic Allocation of Income (Loss) and Provision for (Benefit
from) Income Taxes
(In millions)
Income (loss) from continuing operations before income taxes
For the Year Ended December 31,
2021
2022
2023
Domestic
Foreign
Income (loss) from continuing operations before income taxes
Current tax expense (benefit)
143 $
65 $
Federal$
State and local
Foreign
Total current tax expense (benefit)
Deferred tax expense (benefit)
Federal$
State and local
Foreign
Total deferred tax expense (benefit)$
Provision for (benefit from) income taxes on continuing operations
Net income (loss) from continuing operations after taxes
$
$
$
$
(414) $
1,507
1,093 $
40
407
590 $
(326) $
(50)
(62)
(438) $
152
941 $
(1) $
1,427
1,426 $
21
403
489 $
(170) $
(39)
(70)
(279) $
210
1,216 $
941
1,405
2,346
(13)
6
329
322
164
55
(17)
202
524
1,822
F-26
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
The effective income tax rate applicable to income (loss) from continuing operations before income taxes was different from
the statutory U.S. federal income tax rate due to the factors listed in the following table:
Reconciliation to U.S. Statutory Rate
Statutory U.S. federal income tax rate
Effective tax rates on international operations - net1
Acquisitions, divestitures and ownership restructuring activities2
U.S. research and development credit
Exchange gains/losses3
State and local incomes taxes - net0.9
Impact of Swiss Tax Changes4
Excess tax benefits/deficiencies from stock compensation
Tax settlements and expiration of statute of limitations
Repatriation of foreign earnings5
Other – net(0.1)
Effective tax rate on income from continuing operations
For the Year Ended December 31,
2021
2022
2023
21.0 %
(1.8)
3.6
(5.9)
2.0
(7.9)
(0.5)
(0.3)
2.9
13.9 %
21.0 %21.0 %
(3.5)
(5.4)
(2.2)
3.7
0.3
—
(0.7)
0.1
1.7
(0.3)
14.7 %
(2.5)
(0.1)
(2.4)
1.9
2.1
0.2
(0.2)
—
1.0
1.3
22.3 %
1. Includes the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with
these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S.
GAAP results. Includes a tax benefit of $(36) million for the year ended December 31, 2022, relating to the release of a valuation allowance recorded against
the net deferred tax asset position of a legal entity in Brazil.
2. Includes net tax charge of $46 million for the year ended December 31, 2023, associated with intellectual property realignment. Includes net tax benefits of
$(55) million and $(42) million for the year ended December 31, 2022, related to deferred tax assets established upon change in a U.S. entity's tax
characterization, and a worthless stock deduction on Company's investment in a subsidiary after a change in the entity's legal structure, respectively.
3. Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized. Further
information about the company's foreign currency hedging program is included in Note 7 - Supplementary Information, and Note 20 - Financial Instruments,
under the heading Foreign Currency Risk.
4. Includes net tax benefits of $(62) million and $(24) million for the year ended December 31, 2023, related to changes in deferred taxes and a tax currency
change, respectively.
5. Includes the effect of withholding tax on distribution of foreign earnings to the U.S., net of U.S. foreign tax credits.
Significant components of the company's net deferred tax asset (liability) were attributable to:
Deferred Tax Balances at December 31,
(In millions)
Property$
Operating loss and tax credit carryforwards1
Accrued employee benefits
Other accruals and reserves
Intangibles
Inventory
Research and development capitalization
Investments
Unrealized exchange gains/losses
Other – net
Subtotal
Valuation allowances2
Total$
Net Deferred Tax Asset (Liability)
2,229 $
2,544 $
1,942 $
2,582
$
$
2023
2022
Assets
Liabilities
Assets
— $
539
703
603
—
193
607
39
—
55
2,739 $
(510)
353 $
—
—
—
2,153
—
—
—
38
—
2,544 $
—
Liabilities
447
—
—
—
2,106
—
—
—
— $
363
680
545
—
198
418
40
—
40
2,284 $
(342)
29
—
2,582
—
(315)
$
(640)
1. Primarily related to tax loss and credit carryforwards from operations in the United States, Switzerland, and Spain.
2. During the year ended December 31, 2023, the company adjusted the valuation allowances recorded against the net deferred tax asset position of various
legal entities, the largest of which relates to legal entities in Switzerland and Argentina.
F-27
Details of the company’s operating loss and tax credit carryforwards are shown in the following table:
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Operating Loss and Tax Credit Carryforwards
(In millions)
Operating loss carryforwards
Expire within 5 years$
Expire after 5 years or indefinite expiration
Total operating loss carryforwards
Tax credit carryforwards
Expire within 5 years$
Expire after 5 years or indefinite expiration
Total tax credit carryforwards
Total Operating Loss and Tax Credit Carryforwards
Deferred Tax Asset
2023
2022
103 $
303
406 $
59 $
74
133 $
539 $
$
$
$
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
Total Gross Unrecognized Tax Benefits
(In millions)
Total unrecognized tax benefits as of beginning of period
Decreases related to positions taken on items from prior years
Increases related to positions taken on items from prior years
Increases related to positions taken in the current year
Settlement of uncertain tax positions with tax authorities
Decreases due to expiration of statutes of limitations
Exchange (gain) loss
Total unrecognized tax benefits as of end of period
Total unrecognized tax benefits that, if recognized, would impact the
effective tax rate
Total amount of interest and penalties (benefits) recognized in provision for
(benefit from) income taxes on continuing operations
Total accrual for interest and penalties associated with unrecognized tax
benefits at end of period
$
$
$
$
$
For the Year Ended December 31,
2021
2022
2023
357 $
—
23
16
(4)
(2)
—
390 $
173 $
1 $
11 $
377 $
(3)
4
11
(24)
(5)
(3)
357 $
139 $
1 $
13 $
127
158
285
15
63
78
363
395
(7)
13
9
(17)
(16)
—
377
157
1
11
Each year the company files hundreds of tax returns in the various national, state and local income taxing jurisdictions in which
it operates. These tax returns are subject to examination and possible challenge by the tax authorities. Positions challenged by
the tax authorities may be settled or appealed by the company. As a result, there is an uncertainty in income taxes recognized in
the company's financial statements in accordance with accounting for income taxes and accounting for uncertainty in income
taxes. It is reasonably possible that changes to the company’s global unrecognized tax benefits could be significant; however,
due to the uncertainty regarding the timing of completion of audits and possible outcomes, a current estimate of the range of
increases or decreases that may occur within the next twelve months cannot be made. As of December 31, 2023, the company
has made advance deposits of approximately $90 million to a foreign taxing authority, partially as a prerequisite to petition the
court related to an open tax examination. These payments are accounted for as a prepaid asset, included in other assets in the
Consolidated Balance Sheets.
F-28
Tax years that remain subject to examination for the company’s major tax jurisdictions are shown below:
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Tax Years Subject to Examination by Major Tax Jurisdiction at December 31, 2023
Jurisdiction
Argentina2017
Brazil2018
Canada
China2014
France
India2022
Italy2017
Switzerland
United States:
Federal income tax2012
State and local income tax2012
Earliest
Open Year
2016
2021
2018
Undistributed earnings of foreign subsidiaries and related companies that are deemed to be indefinitely invested amounted to
$4,240 million at December 31, 2023. Distributions of profits from non-U.S. subsidiaries are subject to certain taxes upon
repatriation, primarily where foreign withholding taxes apply; these taxes are partially offset by U.S. foreign tax credits. The
company is asserting indefinite reinvestment related to certain investments in foreign subsidiaries. Determination of the amount
of unrecognized deferred tax liability related to indefinitely reinvested profits is not feasible primarily due to our legal entity
structure and the complexity of U.S. and local tax laws.
For periods between the Merger on August 31, 2017, and the Corteva Distribution, Corteva and its subsidiaries were included in
DowDuPont's consolidated federal income tax group and consolidated tax return. Generally, the consolidated tax liability of the
DowDuPont U.S. tax group for each year was apportioned among the members of the consolidated group based on each
member’s separate taxable income. Corteva, DuPont and Dow intend that to the extent federal and/or state corporate income tax
liabilities are reduced through the utilization of tax attributes of the other, settlement of any receivable and payable generated
from the use of the other party’s sub-group attributes will be in accordance with a tax sharing agreement and/or Tax Matters
Agreement. See Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements for further
information related to indemnifications between Corteva, DuPont and Dow.
On August 16, 2022, the U.S. federal government enacted the Inflation Reduction Act of 2022 (“the Act”). The Act includes tax
provisions, among other things, which implement (i) a 15 percent minimum tax on book income of certain large corporations;
(ii) a one percent excise tax on net stock repurchases; and (iii) several tax incentives to promote clean energy. The Act did not
have a material impact on the company’s financial position, results of operations or cash flows.
In December 2021, the Organization for Economic Cooperation and Development ("OECD") released the Pillar Two Model
rules (also referred to as the global minimum tax or Global Anti-Base Erosion "GloBE" rules), which were designed to ensure
multinational enterprises pay a certain level of tax within every jurisdiction they operate. Several jurisdictions in which we
operate have enacted these rules, with a January 1, 2024 effective date. The company is monitoring developments and
evaluating the potential
tax charge as a result of
implementation of these rules.
the company does not anticipate a material
impact. At
this time,
F-29
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
NOTE 9 - EARNINGS PER SHARE OF COMMON STOCK
The following tables provide earnings per share calculations for the periods indicated below:
Net Income (Loss) for Earnings Per Share Calculations - Basic and Diluted
(In millions)
For the Year Ended December 31,
2022
2023
2021
Income (loss) from continuing operations after income taxes$
Net income (loss) attributable to continuing operations noncontrolling interests
Income (loss) from continuing operations available to Corteva common stockholders
Income (loss) from discontinued operations available to Corteva common stockholders
Net income (loss) available to common stockholders
$
941 $
12
929
(194)
735 $
1,216 $
11
1,205
(58)
1,147 $
1,822
10
1,812
(53)
1,759
Earnings (Loss) Per Share Calculations - Basic
(Dollars per share)
Earnings (loss) per share of common stock from continuing operations
Earnings (loss) per share of common stock from discontinued operations
Earnings (loss) per share of common stock$
1.04 $
1.59 $
2.39
Earnings (Loss) Per Share Calculations - Diluted
(Dollars per share)
For the Year Ended December 31,
2022
2021
2023
$
1.31 $
(0.27)
1.67 $
(0.08)
2.46
(0.07)
For the Year Ended December 31,
2022
2021
2023
Earnings (loss) per share of common stock from continuing operations
$
1.30 $
1.66 $
Earnings (loss) per share of common stock from discontinued operations
Earnings (loss) per share of common stock$
1.58 $
1.03 $
(0.27)
(0.08)
2.37
2.44
(0.07)
Share Count Information
(Shares in millions)
Weighted-average common shares - basic
Plus dilutive effect of equity compensation plans1
Weighted-average common shares - diluted
Potential shares of common stock excluded from EPS calculations2
For the Year Ended December 31,
2022
2023
2021
709.0
2.9
711.9
2.3
720.8
3.7
724.5
1.5
735.9
5.7
741.6
2.8
1. Diluted earnings (loss) per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the
potential common shares would have an anti-dilutive effect.
2. These outstanding potential shares of common stock relating to stock options, restricted stock units and performance-based restricted stock units were
excluded from the calculation of diluted earnings (loss) per share because (i) the effect of including them would have been anti-dilutive; and (ii) the
performance metrics have not yet been achieved for the outstanding potential shares relating to performance-based restricted stock units, which are deemed
to be contingently issuable.
F-30
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
NOTE 10 - ACCOUNTS AND NOTES RECEIVABLE - NET
(In millions)
Accounts receivable – trade1
Notes receivable – trade1,2
Other3
December 31,
2023
December 31,
2022
$
4,210 $
119
1,159
4,168
93
1,440
Total accounts and notes receivable - net$
5,488 $
5,701
1. Accounts and notes receivable – trade are net of allowances of $205 million and $194 million at December 31, 2023 and 2022, respectively.
2. Notes receivable – trade primarily consists of receivables for deferred payment loan programs for the sale of seed and crop protection products to customers.
These loans have terms of one year or less and are primarily concentrated in North America. The company maintains a rigid pre-approval process for
extending credit to customers in order to manage overall risk and exposure associated with credit losses. As of December 31, 2023 and 2022, there were no
significant impairments related to current loan agreements.
3. Other includes receivables in relation to indemnification assets, value added tax, general sales tax and other taxes. No individual group represents more than
5 percent of total current assets. In addition, Other includes amounts due from nonconsolidated affiliates of $131 million and $148 million as of December
31, 2023 and 2022, respectively.
Accounts and notes receivable are carried at the expected amount to be collected, which approximates fair value. The company
establishes the allowance for doubtful receivables using a loss-rate method where the loss rate is developed using past events,
historical experience, current conditions and forecasts that affect the collectability of the financial assets.
The following table summarizes changes in the allowance for doubtful receivables for the years ended December 31, 2023 and
2022 respectively:
(In millions)
Balance at December 31, 2021
Net provision for credit losses
Other - net of write-offs charged against allowance
Balance at December 31, 2022
Net provision for credit losses
Other - net of write-offs charged against allowance
Balance at December 31, 2023
$
$
$
210
(13)
(3)
194
11
—
205
The company enters into various factoring agreements with third-party financial institutions to sell its trade receivables under
both recourse and non-recourse agreements in exchange for cash proceeds. These financing arrangements result in a transfer of
the company's receivables and risks to the third-party. As these transfers qualify as true sales under the applicable accounting
guidance, the receivables are derecognized from the Consolidated Balance Sheets upon transfer, and the company receives a
payment for the receivables from the third-party within a mutually agreed upon time period. For arrangements involving an
element of recourse, which is typically provided through a guarantee of accounts in the event of customer default, the guarantee
obligation is measured using market data from similar transactions and reported as a current liability in the Consolidated
Balance Sheets.
Trade receivables sold under these agreements were $112 million, $134 million, and $272 million for the years ended
December 31, 2023, 2022 and 2021, respectively. The trade receivables sold that remained outstanding under these agreements
which include an element of recourse as of December 31, 2023 and 2022 were $2 million and $37 million, respectively. The net
proceeds received were included in cash provided by (used for) operating activities, in the Consolidated Statements of Cash
Flows. The difference between the carrying amount of the trade receivables sold and the sum of the cash received is recorded as
a loss on sale of receivables in other income (expense) - net in the Consolidated Statements of Operations. The loss on sale of
receivables were $17 million, $19 million, and $54 million for the years ended December 31, 2023, 2022 and 2021,
respectively. See Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for additional
information on the company’s guarantees.
F-31
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
NOTE 11 - INVENTORIES
(In millions)
Finished products
Semi-finished products
Raw materials and supplies
Total inventories
NOTE 12 - PROPERTY, PLANT AND EQUIPMENT
(In millions)
Land and land improvements$
Buildings
Machinery and equipment
Construction in progress
Total property, plant and equipment
Accumulated depreciation
Total property, plant and equipment - net$
December 31, 2023
December 31, 2022
$
$
3,273 $
2,775
851
6,899 $
3,260
2,689
862
6,811
December 31, 20231
December 31, 2022
440 $
1,671
6,315
530
8,956
(4,669)
4,287 $
416
1,541
6,077
517
8,551
(4,297)
4,254
1. Includes property, plant and equipment acquired in connection with the Stoller and Symborg acquisitions, which were completed on March 1, 2023. See
Note 4 – Business Combinations, to the Consolidated Financial Statements, for additional information.
Buildings, machinery and equipment and land improvements are depreciated over useful lives on a straight-line basis ranging
from 2 to 25 years. Capitalizable costs associated with computer software for internal use are amortized on a straight-line basis
over 2 to 7 years.
(In millions)
Depreciation expense$
528 $
521 $
521
NOTE 13 - GOODWILL AND OTHER INTANGIBLE ASSETS
For the Year Ended December 31,
2022
2021
2023
Goodwill
The following table summarizes changes in the carrying amount of goodwill by segment for the years ended December 31,
2022 and 2023, respectively.
(In millions)
Balance as of December 31, 2021
Currency translation adjustment
Other goodwill adjustments1
Balance as of December 31, 2022
Acquisitions2
Currency translation adjustment
Balance as of December 31, 2023
Crop Protection
Seed
Total
$
$
$
4,672 $
5,435 $
10,107
(63)
9
4,618 $
512
53
5,183 $
(72)
(19)
5,344 $
—
78
5,422 $
(135)
(10)
9,962
512
131
10,605
1. Consists primarily of the goodwill included in the sale of a business in the crop protection segment and reallocation of the former digital reporting unit
goodwill between the seed and the crop protection segments.
2. On March 1, 2023, the company completed the acquisitions of Stoller and Symborg, which are included in the crop protection segment. See Note 4 –
Business Combinations, to the Consolidated Financial Statements, for additional information.
The company tests goodwill and other indefinite-lived intangible assets for impairment annually (during the fourth quarter), or
more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of a reporting
unit has declined below its carrying value. Goodwill is evaluated for impairment using qualitative and / or quantitative testing
procedures. The company performs goodwill impairment testing at the reporting unit level, which is defined as the operating
F-32
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
segment or one level below the operating segment. One level below the operating segment, or component, is a business in
which discrete financial information is available and regularly reviewed by segment management. The company aggregates
certain components into reporting units based on economic similarities.
In April 2022,
the company implemented a global business unit organization model ("BU Reorganization"). The BU
Reorganization did not have a material impact to the company’s historical reportable segments’ financial measures and had no
impact on our determination of operating segments. However, it did result in the company’s digital reporting unit being merged
into the seed and crop protection reporting units with the goodwill relating to the former digital reporting unit being reassigned
to the seed and crop protection reporting units using a relative fair value allocation approach. As a result of the BU
Reorganization, the company determined that a triggering event had occurred during the second quarter of 2022 that required an
interim impairment assessment as of April 1, 2022. The interim impairment assessment was performed for the seed, crop
protection, and the former digital reporting units immediately prior to the BU Reorganization and for the seed and crop
protection reporting units immediately after the BU Reorganization resulting in no goodwill impairment charges.
The company performed annual quantitative testing on all of its reporting units and determined that no goodwill impairments
existed in 2023 and 2022. As of December 31, 2023, accumulated impairment losses on goodwill were $4,503 million.
Other Intangible Assets
The gross carrying amounts and accumulated amortization of other intangible assets by major class are as follows:
(In millions)
Intangible assets subject to amortization
(finite-lived):
Germplasm
Customer-related
Developed technology
Trademarks/trade names
Other2
Total other intangible assets with finite lives
Intangible assets not subject to amortization
(indefinite-lived):
IPR&D
Total other intangible assets with indefinite lives
Total other intangible assets
December 31, 20231
Accumulated
Amortization
Gross
December 31, 2022
Accumulated
Amortization
Net
Net
Gross
$
6,291 $
2,427
1,849
2,111
395
13,073
(1,081) $
(734)
(1,004)
(339)
(294)
(3,452)
5,210 $
1,693
845
1,772
101
9,621
6,291 $
1,912
1,485
2,009
395
12,092
(826) $
(585)
(830)
(251)
(271)
(2,763)
5,465
1,327
655
1,758
124
9,329
5
5
$ 13,078 $
—
—
(3,452) $
5
5
10
10
9,626 $ 12,102 $
—
—
(2,763) $
10
10
9,339
1. Includes the intangible assets acquired in connection with the Stoller and Symborg acquisitions, which were completed on March 1, 2023. See Note 4 –
Business Combinations, to the Consolidated Financial Statements, for additional information.
2. Primarily consists of sales and farmer networks, marketing and manufacturing alliances and noncompetition agreements.
The aggregate pre-tax amortization expense from continuing operations for finite-lived intangible assets was $683 million, $702
million, and $722 million, for the years ended December 31, 2023, 2022, and 2021, respectively.
Total estimated amortization expense for the next five fiscal years is as follows:
(In millions)
2024
2025
2026
2027
2028
$
683
646
636
576
554
F-33
NOTE 14 - LEASES
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
The company has operating and finance leases for real estate, transportation, certain machinery and equipment, and information
technology assets. The company’s leases have remaining lease terms of approximately 1 to 39 years. For purposes of
calculating operating lease liabilities, lease terms may be deemed to include options to extend the lease when it is reasonably
certain that the company will exercise that option. Some leasing arrangements require variable payments that are dependent on
usage, output, or may vary for other reasons, such as insurance and tax payments. The variable lease payments are not presented
as part of the initial ROU asset or lease liability.
Certain of the company's leases include residual value guarantees. These residual value guarantees are based on a percentage of
the lessor's asset acquisition price and the amount of such guarantee generally declines over the course of the lease term. The
portion of residual value guarantees that are probable of payment are included in the related lease liability. At December 31,
2023, the company has future maximum payments for residual value guarantees in operating leases of $207 million with final
expirations through 2032. The company's lease agreements do not contain any material restrictive covenants.
The components of lease cost for the years ended December 31, 2023, 2022 and 2021 were as follows:
(In millions)
Operating lease cost
Finance lease cost
Amortization of right-of-use assets
Total finance lease cost
Short-term lease cost
Variable lease cost
Total lease cost
For the Year Ended December 31,
2022
2023
2021
$
$
169 $
1
1
23
11
204 $
152 $
1
1
18
8
179 $
158
1
1
14
8
181
Supplemental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021 was as follows:
(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
For the Year Ended December 31,
2022
2021
2023
Operating cash outflows from operating leases
Financing cash outflows from finance leases
$
$
169 $
1 $
155 $
1 $
169
1
New leases entered into during the years ended December 31, 2023 and 2022 were not material, on an individual basis.
Supplemental balance sheet information related to leases is as follows:
(In millions)
Operating Leases
Operating lease right-of-use assets1
Current operating lease liabilities2
Noncurrent operating lease liabilities3
Total operating lease liabilities
Finance Leases
Property, plant, and equipment, gross
Accumulated depreciation
Property, plant, and equipment, net
Short-term borrowings and finance lease obligations
Long-Term Debt
Total finance lease liabilities
1. Included in other assets in the Consolidated Balance Sheet.
2. Included in accrued and other current liabilities in the Consolidated Balance Sheet.
3. Included in other noncurrent obligations in the Consolidated Balance Sheet.
F-34
December 31, 2023
December 31, 2022
$
$
$
$
412 $
131
355
486 $
14 $
(13)
1
1
1
2 $
460
119
331
450
14
(11)
3
1
2
3
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
The company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate
is readily determinable.
Lease Term and Discount Rate
Weighted-average remaining lease term (years)
Operating leases6.63
Financing leases
Weighted average discount rate
Operating leases2.98
Financing leases
Maturities of lease liabilities are as follows:
Maturity of Lease Liabilities at December 31, 2023
(In millions)
2024
2025
2026
2027
2028
2029 and thereafter
Total lease payments
Less: Interest
Present value of lease liabilities$
486 $
2
December 31, 2023
December 31, 2022
1.36
%
3.29 %
7.19
2.36
3.14 %
3.29 %
Operating
Leases
Financing
Leases
$
139 $
108
87
54
43
99
530
44
NOTE 15 - SHORT-TERM BORROWINGS, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES
The following tables summarize Corteva's short-term borrowings and finance lease obligations and long-term debt:
Short-term borrowings and finance lease obligations
(In millions)
Other loans - various currencies$
Long-term debt payable within one year
Finance lease obligations payable within one year
Total short-term borrowings and finance lease obligations
Long-Term Debt
(In millions)
Promissory notes and debentures:
Maturing in 2025
Maturing in 2026
Maturing in 2030
Maturing in 2033
Other loans:
Foreign currency loans, various rates and maturities
Medium-term notes, varying maturities through 2041
Finance lease obligations
Less: Unamortized debt discount and issuance costs
Less: Long-term debt due within one year
Total$
2,291
$
$
December 31, 2023
December 31, 2022
1 $
196
1
198 $
December 31, 2023
December 31, 2022
Amount
Weighted
Average Rate
Weighted
Average Rate
500
600
500
600
196
106
1
16
196
1.70 % $
4.50 %
2.30 %
4.80 %
14.80 %
5.34 %
$
Amount
500
—
500
—
181
107
2
7
—
1,283
1.70 %
2.30 %
14.80 %
4.27 %
Principal payments of long-term debt are $196 million, $500 million and $600 million for debt maturing in 2024, 2025 and
2026, respectively.
F-35
1
1
—
—
—
—
2
—
23
—
1
24
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
The estimated fair value of the company's short-term and long-term borrowings, including interest rate financial instruments
was determined using Level 2 inputs within the fair value hierarchy, as described in Note 2 - Summary of Significant
Accounting Policies. Based on quoted market prices for the same or similar issues, or on current rates offered to the company
for debt of the same remaining maturities, the fair value of the company's short-term borrowings and finance lease obligations
was approximately carrying value.
The fair value of the company's long-term borrowings, including long-term debt due within one year, was $2,434 million and
$1,172 million at December 31, 2023 and 2022, respectively.
Debt Offering
In May 2023, the company issued $600 million of 4.50 percent Senior Notes due in 2026 and $600 million of 4.80 percent
Senior Notes due in 2033 (the “May 2023 Debt Offering”). The proceeds of this offering are intended to be used for general
corporate purposes, which may include funding of working capital, capital expenditures and share repurchases.
Foreign Currency Loans
The company enters into short-term and long-term foreign currency loans from time-to-time by accessing uncommitted
revolving credit lines to fund working capital needs of foreign subsidiaries in the normal course of business ("Foreign Currency
Loans"). Interest rates are variable and determined at the time of borrowing. Total unused bank credit lines on the Foreign
Currency Loans at December 31, 2023 was approximately $50 million. The company's long-term Foreign Currency Loans have
varying maturities throughout 2024.
Available Committed Credit Facilities
The following table summarizes the company's credit facilities:
Committed and Available Credit Facilities at December 31, 2023
(In millions)
Revolving Credit Facility
Revolving Credit Facility
364-Day Revolving Credit Facility
Effective Date
Committed
Credit
Credit
Available
May 2022 $
3,000 $
May 2022
January 2023
2,000
500
3,000
2,000
500
Maturity Date
Interest
May 2027
Floating Rate
May 2025
Floating Rate
January 2024
Floating Rate
Total Committed and Available Credit Facilities$
5,500
$
5,500
Revolving Credit Facilities
In May 2022, EIDP entered into a $3 billion, 5 year revolving credit facility and a $2 billion, 3-year revolving credit facility
(the "Revolving Credit Facilities”) expiring in May 2027 and May 2025, respectively. Borrowings under the revolving credit
facilities have an interest rate equal to Adjusted Term SOFR, which is Term SOFR plus 0.10 percent, plus the applicable
margin. The Revolving Credit Facilities may serve as a substitute to the company's commercial paper program, and can be used
from time to time, for general corporate purposes including, but not limited to, the funding of seasonal working capital needs.
The Revolving Credit Facilities contain customary representations and warranties, affirmative and negative covenants and
events of default that are typical for companies with similar credit ratings. Additionally, the Revolving Credit Facilities contain
a financial covenant requiring that the ratio of total indebtedness to total capitalization for Corteva and its consolidated
subsidiaries not exceed 0.60. At December 31, 2023, the company was in compliance with these covenants.
364-Day Revolving Credit Facilities
In January 2023, the company amended and restated its May 2022 364-day revolving credit agreement (the “364-Day
Revolving Credit Facility”) increasing the facility amount to $1 billion and extending the expiration date to January 2024.
Borrowings under the 364-Day Revolving Credit Facility have an interest rate equal to Adjusted Term SOFR, which is Term
SOFR plus 0.10 percent, plus the applicable margin. The 364-Day Revolving Credit Facility includes a provision under which
the company may convert any advances outstanding prior to the maturity date into term loans having a maturity date up to one
year later. In February 2023, the company drew down $1 billion under the 364-Day Revolving Credit Facility, which was used
for general corporate purposes, including funding seasonal working capital needs, capital spending, dividend payments, share
repurchases and to partially fund the Stoller and Symborg acquisitions. In May 2023, the company repaid the $1 billion loan
using the proceeds from the May 2023 Debt Offering and subsequently, in July 2023, reduced the available credit from $1
billion to $500 million. In January 2024, the company amended and restated the 364-Day Revolving Credit Facility to extend
the expiration date to February 26, 2024. The 364-Day Revolving Credit Facility contains customary representations and
warranties, affirmative and negative covenants and events of default that are typical for companies with similar credit ratings.
Additionally, the 364-Day Revolving Credit Facility contains a financial covenant requiring that the ratio of total indebtedness
F-36
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
to total capitalization for Corteva and its consolidated subsidiaries not exceed 0.60. At December 31, 2023, the company was in
compliance with these covenants.
Uncommitted Credit Facilities and Outstanding Letters of Credit
Unused bank credit lines on uncommitted credit facilities were $523 million at December 31, 2023. These lines are available to
support short-term liquidity needs and general corporate purposes, including letters of credit. Outstanding letters of credit were
$143 million at December 31, 2023. These letters of credit support commitments made in the ordinary course of business.
NOTE 16 - COMMITMENTS AND CONTINGENT LIABILITIES
Guarantees
Indemnifications
In connection with acquisitions and divestitures, the company has indemnified respective parties against certain liabilities that
may arise in connection with these transactions and business activities prior to the completion of the transactions. The term of
these indemnifications, which typically pertain to environmental, tax and product liabilities, is generally indefinite. In addition,
the company indemnifies its duly elected or appointed directors and officers to the fullest extent permitted by Delaware law,
against liabilities incurred as a result of their activities for the company, such as adverse judgments relating to litigation matters.
If the indemnified party were to incur a liability or have a liability increase as a result of a successful claim, pursuant to the
terms of the indemnification, the company would be required to reimburse the indemnified party. The maximum amount of
potential future payments is generally unlimited. See below for additional
information relating to the indemnification
obligations under the Chemours Separation Agreement and the Corteva Separation Agreement.
Obligations for Supplier Finance Programs
The company enters into supplier finance programs with various finance providers in which the company agrees to pay the
stated amount of confirmed invoices from participating suppliers by the original maturity date. The company or the financial
provider may terminate the agreement upon providing at least thirty days’ written notice. The payment terms that the company
has with its finance providers under supplier finance programs are less than one year. At December 31, 2023 and 2022, the
outstanding obligations under supplier finance programs was approximately $115 million and $220 million, respectively, and
included within accounts payable in the interim Consolidated Balance Sheets.
Obligations for Customers and Other Third Parties
The company has directly guaranteed various debt obligations under agreements with third parties related to customers and
other third parties. At December 31, 2023 and 2022, the company had directly guaranteed $84 million and $88 million,
respectively, of such obligations. These amounts represent the maximum potential amount of future (undiscounted) payments
that the company could be required to make under the guarantees in the event of default by the guaranteed party. Of the
maximum future payments at December 31, 2023, approximately $15 million had terms greater than one year. The maximum
future payments include $2 million and $16 million of guarantees related to the various factoring agreements that the company
enters into with third-party financial institutions to sell its trade receivables at December 31, 2023 and 2022, respectively. See
Note 10 - Accounts and Notes Receivable - Net, to the Consolidated Financial Statements, for additional information.
The maximum future payments also include agreements with lenders to establish programs that provide financing for select
customers. The terms of the guarantees are equivalent to the terms of the customer loans that are primarily made to finance
customer invoices. The total amounts owed from customers to the lenders relating to these agreements was $187 million and
$202 million at December 31, 2023 and 2022, respectively.
The company assesses the payment/performance risk by assigning default rates based on the duration of the guarantees. These
default rates are assigned based on the external credit rating of the counterparty or through internal credit analysis and historical
default history for counterparties that do not have published credit ratings. For counterparties without an external rating or
available credit history, a cumulative average default rate is used.
Indemnifications under Separation Agreements
The company has entered into various agreements where the company is indemnified for certain liabilities. The term of this
indemnification is generally indefinite, with exceptions, 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.
F-37
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Chemours/Performance Chemicals
Pursuant to the Chemours Separation Agreement resulting from the 2015 spin-off of the Performance Chemicals segment from
Historical DuPont, Chemours indemnifies the company against certain litigation, environmental, workers' compensation and
other liabilities that arose prior to the distribution.
In 2017, the Chemours Separation Agreement was amended to provide for a limited sharing of potential future liabilities related
to alleged historical releases of perfluorooctanoic acids and its ammonium salts (“PFOA”) for a five-year period that began on
July 6, 2017. In addition, in 2017, Chemours and EIDP settled multi-district litigation in the U.S. District Court for the Southern
District of Ohio (“Ohio MDL”), resolving claims of about 3,550 plaintiffs alleging injury from exposure to PFOA in drinking
water as a result of the historical manufacture or use of PFOA at the Washington Works plant outside Parkersburg, West
Virginia. This plant was previously owned and/or operated by the performance chemicals segment of EIDP and is now owned
and/or operated by Chemours.
On May 13, 2019, Chemours filed suit in the Delaware Court of Chancery against DuPont, EIDP, and Corteva, seeking, among
other things, to limit its responsibility for the litigation and environmental liabilities allocated to and assumed by Chemours
under the Chemours Separation Agreement (the “Delaware Litigation”). On March 30, 2020, the Court of Chancery granted a
motion to dismiss. On December 15, 2020, the Delaware Supreme Court affirmed the judgment of the Court of Chancery.
Meanwhile, a confidential arbitration process regarding the same and other claims proceeded (the “Arbitration”).
On January 22, 2021, Chemours, DuPont, Corteva and EIDP entered into a binding memorandum of understanding containing a
settlement to resolve legal disputes originating from the Delaware Litigation and Arbitration, and to establish a cost sharing
arrangement and escrow account to be used to support and manage potential future legacy per- and polyfluoroalkyl substances
(“PFAS”) liabilities arising out of pre-July 1, 2015 conduct (the “MOU”). The MOU replaced the 2017 amendment to the
Chemours Separation Agreement. According to the terms of the cost sharing arrangement within the MOU, Corteva and
DuPont together, on one hand, and Chemours, on the other hand, agreed to a 50-50 split of certain qualified expenses related to
PFAS liabilities incurred over a term not to exceed twenty years or $4 billion of qualified spend and escrow account
contributions (see below for discussion of the escrow account) in the aggregate. DuPont’s and Corteva’s 50% share under the
MOU will be limited to $2 billion, including qualified expenses and escrow contributions. These expenses and escrow account
contributions will be subject to the existing Letter Agreement, under which DuPont and Corteva will each bear 50% of the first
$300 million (up to $150 million each), and thereafter DuPont bears 71% and Corteva bears the remaining 29%. Under the
terms of the MOU, Corteva’s estimated aggregate share of the potential $2 billion is approximately $600 million.
In order to support and manage any potential future PFAS liabilities, the parties also agreed to establish an escrow account
("MOU Escrow Account"). The MOU provides that (1) no later than each of September 30, 2021 and September 30, 2022,
Chemours shall deposit $100 million into an escrow account and DuPont and Corteva shall together deposit $100 million in the
aggregate into an escrow account and (2) no later than September 30 of each subsequent year through and including 2028,
Chemours shall deposit $50 million into an escrow account and DuPont and Corteva shall together deposit $50 million in the
aggregate into an escrow account. Subject to the terms and conditions set forth in the MOU, each party may be permitted to
defer funding in any year (excluding 2021). Over this period, Chemours will deposit a total of $500 million in the account and
DuPont and Corteva will deposit an additional $500 million pursuant to the terms of the Letter Agreement. Additionally, if on
December 31, 2028, the balance of the escrow account (including interest) is less than $700 million, Chemours will make 50%
of the deposits and DuPont and Corteva together will make 50% of the deposits necessary to restore the balance of the escrow
account to $700 million pursuant to the terms of the Letter Agreement. Such payments will be made in a series of consecutive
annual equal installments commencing on September 30, 2029, pursuant to the escrow account replenishment terms as set forth
in the MOU. The MOU provides that no withdrawals from the MOU Escrow Account can be made before year six, except to
fund mutually agreed upon third-party settlements in excess of $125 million. Starting with year six, withdrawals can only be
made to fund qualified spend if the parties’ aggregate qualified spend in that particular year is greater than $200 million.
Beginning with year 11, the amounts in the MOU Escrow Account can be used to fund any qualified spend. The company made
its annual installment deposits due to the MOU Escrow Account through December 31, 2022.
In connection with the Nationwide Water District Settlement (as defined below under the caption “Other PFOA Matters”), the
MOU was supplemented to waive funding due to the MOU Escrow Account by Chemours, DuPont and Corteva for 2023
provided that each party fully funds its portion of the Nationwide Water District Settlement and said settlement
is
consummated. In the event the Nationwide Water District Settlement is not consummated, Chemours, DuPont and Corteva will
redeposit into the MOU Escrow Account the cash each withdrew to partially fund its respective contribution to the Water
District Settlement Fund. The funding obligation to the MOU Escrow Account with respect to 2024 and due September 30,
2024 will be waived if (i) between October 1, 2023 and September 30, 2024, the parties have entered into settlement
F-38
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
agreements resolving liabilities under the MOU that in the aggregate exceed $100 million; (ii) each company has fully funded
its respective share, in accordance with the MOU, of such settlements; and (iii) such settlements are consummated.
After the term of this arrangement, Chemours’ indemnification obligations under the original 2015 Chemours Separation
Agreement, would continue unchanged, subject in each case to certain exceptions set out in the MOU. Under the MOU,
Chemours waived specified claims regarding the construct of its 2015 spin-off transaction, and the parties dismissed the
Pending Arbitration regarding those claims. Additionally, the parties have agreed to resolve the Ohio MDL PFOA personal
injury litigation (as discussed below). The parties are expected to cooperate in good faith to enter into additional agreements
reflecting the terms set forth in the MOU.
Corteva Separation Agreement
On April 1, 2019, in connection with the Dow Distribution, Corteva, DuPont and Dow entered into the Corteva Separation
Agreement, the Tax Matters Agreement, the Employee Matters Agreement, and certain other agreements (collectively, the
“Corteva Separation Agreements”). The Corteva Separation Agreements allocate among Corteva, DuPont and Dow assets,
employees, certain liabilities and obligations (including its investments, property and employee benefits and tax-related assets
and liabilities) among the parties and provides for indemnification obligation among the parties. Under the Corteva Separation
Agreements, DuPont will indemnify Corteva against certain litigation, environmental, tax, workers' compensation and other
liabilities that arose prior to the Corteva Distribution and Dow indemnifies Corteva against certain litigation, environmental,
tax, workers' compensation and other liabilities that relate to the Historical Dow business, and Corteva indemnifies DuPont and
Dow for certain liabilities.
Under the Corteva Separation Agreement, certain legacy EIDP liabilities from discontinued and/or divested operations and
businesses of EIDP (including Performance Chemicals) (a “stray liability”) were allocated to Corteva or DuPont. For those
stray liabilities allocated to Corteva and DuPont (which may include a specified amount of liability associated with that
liability), Corteva and DuPont are responsible for liabilities in an amount up to that specified amount plus an additional $200
million each. Once each company has met the $200 million threshold, Corteva and DuPont will share future liabilities
proportionally on the basis of 29% and 71%, respectively; provided, however, that for PFAS, DuPont managed such liabilities
with Corteva and DuPont sharing the costs on a 50% - 50% basis starting from $1 and up to $300 million (with such amount, up
to $150 million, to be credited to each company’s $200 million threshold) and once the $300 million threshold was met, the
companies share proportionally on the basis of 29% and 71% respectively, subject to a $1 million de minimis requirement. The
aggregate amount of cash remitted by Corteva has exceeded the stray liability thresholds, including PFAS, noted above.
At December 31, 2023 and December 31, 2022, the indemnification assets were $44 million and $31 million, respectively,
within accounts and notes receivable - net and $104 million and $105 million, respectively, within other assets in the
Consolidated Balance Sheets. At December 31, 2023 and December 31, 2022, the indemnification liabilities were $30 million
and $31 million, respectively, within accrued and other current liabilities and $106 million and $115 million, respectively,
within other noncurrent obligations in the Consolidated Balance Sheets.
Discontinued Operations Activity
For the year ended December 31, 2023 and 2022, the company recorded charges of $194 million and $58 million, to income
(loss) from discontinued operations after income taxes, in the Consolidated Statement of Operations. The after-tax charges
recognized during the year ended December 31, 2023 included approximately $175 million associated with the settlement of
certain legacy PFAS related legal matters that are subject to the MOU, including the Nationwide Water District Settlement and
the State of Ohio related to natural resource damage claims, and charges associated with environmental remediation activities
primarily at Chemours' Fayetteville Works facility. The after-tax charges recognized during the year ended December 31, 2022
primarily related to charges of $36 million associated with environmental remediation activities primarily at Chemours'
Fayetteville Works facility for estimated costs for off-site water systems and on-site surface water and groundwater remediation
to address and abate PFAS discharges arising out of pre-July 1, 2015 conduct. The increase is the result of changes in
Chemours’ environmental remediation activities at the site under the Consent Order between Chemours and the NC DEQ. The
after-tax charges recognized during the year ended December 31, 2022 also includes charges of $13 million related to the
adjustment of certain prior year tax positions for previously divested businesses.
Litigation
The company is subject to various legal proceedings, including, but not limited to, product liability, intellectual property,
antitrust, commercial, property damage, personal injury, environmental and regulatory matters arising out of the normal course
of its current businesses or legacy EIDP businesses unrelated to Corteva’s current businesses but allocated to Corteva as part of
the separation of Corteva from DuPont. It is not possible to predict the outcome of these various proceedings, as considerable
uncertainty exists. The company records accruals for legal matters when the information available indicates that it is probable
that a liability has been incurred and the amount of the loss can be reasonably estimated. Accruals may reflect the impact and
F-39
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
status of negotiations, settlements, rulings, advice from counsel and other information and events that may pertain to a
particular matter. For the litigation matters discussed below, management believes that it is reasonably possible that the
company could incur liabilities in excess of amounts accrued, the ultimate liability for which could be material to the results of
operations and the cash flows in the period recognized. However, the company is unable to estimate the possible loss beyond
amounts accrued due to various reasons, including, among others, that the underlying matters are either in early stages and/or
have significant factual issues to be resolved. In addition, even when the company believes it has substantial defenses, the
company may consider settlement of matters if it believes it is in the best interest of the company.
Lorsban® Lawsuits
As of December 31, 2023, there were pending personal injury lawsuits filed and additional asserted claims against the former
Dow Agrosciences LLC, alleging injuries related to chlorpyrifos exposure, the active ingredient in Lorsban®, an insecticide
used by commercial farms for field fruit, nut and vegetable crops. Corteva ended its production of Lorsban® in 2020.
Chlorpyrifos products are restricted-use pesticides, which are not available for purchase or use by the general public, and may
only be sold to, and used by, certified applicators or someone under the certified applicator's direct supervision. These lawsuits
do not relate to Dursban®, a residential type chlorpyrifos product that was authorized for indoor purposes, which was
discontinued over two decades ago prior to the Merger and Corteva’s formation and Separation. Claimants allege personal
injury, including autism, developmental delays and/or decreased neurologic function, resulting from farm worker exposure and
bystander drift and in utero exposure to chlorpyrifos. Certain claimants have also put forth remediation claims due to alleged
property contamination from chlorpyrifos. As of December 31, 2023, an accrual has been established for the estimated
resolution of certain claims.
Federal Trade Commission Investigation
On May 26, 2020, Corteva received a subpoena from the Federal Trade Commission (“FTC”) directing it to submit documents
pertaining to its crop protection products generally, as well as business plans, rebate programs, offers, pricing and marketing
materials specifically related to its acetochlor, oxamyl, rimsulfuron and other related products in order to determine whether
Corteva engaged in unfair methods of competition through anticompetitive conduct. Corteva has fully cooperated with all
requests related to this subpoena. On September 29, 2022, the FTC, along with ten state attorneys general in California,
Colorado, Illinois, Indiana, Iowa, Minnesota, Nebraska, Oregon, Wisconsin, and Texas, filed a lawsuit against Corteva and
another competitor alleging the parties engaged in unfair methods of competition, unlawful conditioning of payments,
unreasonably restrained trade, and have an unlawful monopoly (the “FTC lawsuit”). In December 2022, attorneys general in
Tennessee and Washington joined the FTC lawsuit and the Arkansas state attorney general filed a separate lawsuit against
Corteva and another competitor based on the allegations set forth in the FTC lawsuit. Several proposed private class action
lawsuits were also filed in federal court alleging anticompetitive conduct based on the allegations set forth in the FTC lawsuit.
In February 2023, most of these private lawsuits were centralized into a multi-district litigation in the U.S. District Court for the
Middle District of North Carolina. Corteva expects to continue a meritorious defense of its business practices.
Bayer Dispute
In August 2022, Bayer filed a breach of contract/declaratory judgment lawsuit in Delaware state court against Corteva relating
to an agrobacterium cross-license agreement and E3® soybeans. Bayer alleges that Corteva practiced two Bayer patents in
developing E3® soybeans, and therefore, is entitled to royalties pursuant to the terms of the cross-license agreement. In April
2023, Corteva's motion to dismiss the complaint on the basis that, under the terms of the cross-license agreement and the law,
E3® soybeans cannot infringe expired patents was denied. At that time the court also denied Bayer’s motion to dismiss our
invalidity counterclaim. The trial date is expected to be set for mid-2025.
Litigation related to legacy EIDP businesses unrelated to Corteva’s current businesses
For purposes of this report, the term PFOA means collectively perfluorooctanoic acid and its salts, including the ammonium salt
and does not distinguish between the two forms, and PFAS, including PFOA, PFOS (perfluorooctanesulfonic acid), GenX and
other perfluorinated chemicals and compounds ("PFCs").
EIDP is a party to various legal proceedings relating to the use of PFOA by its former Performance Chemicals segment for
which potential liabilities would be subject to the cost sharing arrangement under the MOU as long as it remains effective.
F-40
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Leach Settlement and Ohio MDL Settlement
EIDP has residual liabilities under its 2004 settlement of a West Virginia state court class action, Leach v. EIDP, which alleged
that PFOA from EIDP’s former Washington Works facility had contaminated area drinking water supplies and affected the
health of area residents. The settlement class has about 80,000 members. In addition to relief that was provided to class
members years ago, the settlement requires EIDP to continue providing PFOA water treatment to six area water districts and
private well users and to fund, through an escrow account, up to $235 million for a medical monitoring program for eligible
class members. As of December 31, 2023, approximately $2 million had been disbursed from the account since its
establishment in 2012 and the remaining balance is approximately $1 million.
The Leach settlement permits class members to pursue personal injury claims for six health conditions (and no others) that an
expert panel appointed under the settlement reported in 2012 had a “probable link” (as defined in the settlement) with PFOA:
pregnancy-induced hypertension, including preeclampsia; kidney cancer; testicular cancer; thyroid disease; ulcerative colitis;
and diagnosed high cholesterol. After the panel reported its findings, approximately 3,550 personal injury lawsuits were filed in
federal and state courts in Ohio and West Virginia and consolidated in multi-district litigation in the U.S. District Court for the
Southern District of Ohio (“Ohio MDL”). The Ohio MDL was settled in early 2017 for approximately $670 million in cash,
with Chemours and EIDP (without indemnification from Chemours) each paying half.
Post-MDL Settlement PFOA Personal Injury Claims
The 2017 Ohio MDL settlement did not resolve claims of plaintiffs who did not have claims in the Ohio MDL or whose claims
are based on diseases first diagnosed after February 11, 2017. The first was a consolidated trial of two cases; the first, a kidney
cancer case, which resulted in a hung jury, while the second, Travis and Julie Abbott v. E. I. du Pont de Nemours and Company
(the “Abbott Case”), a testicular cancer case, resulted in a jury verdict of $40 million in compensatory damages and $10 million
for loss of consortium, plus interest. The loss of consortium award was subsequently reduced to $250,000 in accordance with
state law limitations. Following entry of the judgment by the court, EIDP filed post-trial motions to reduce the verdict, and to
appeal the verdict on the basis of procedural and substantive legal errors made by the trial court. After the denial of the
company’s petition seeking review by the U.S. Supreme Court, the judgement, inclusive of interest, was paid on November 30,
2023, with EIDP's share being approximately $6 million.
In January 2021, Chemours, DuPont and Corteva agreed to settle the remaining approximately 95 matters, as well as unfiled
matters, remaining in the Ohio MDL, with the exception of the Abbott Case, for $83 million, with Chemours contributing $29
million to the settlement, and DuPont and Corteva contributing $27 million each. The company paid $27 million during the
year ended December 31, 2021. As agreed to in the settlement, the plaintiffs' counsel filed a motion to dissolve the MDL. In
August 2022, further ruling on the motion to dissolve the Ohio MDL was delayed by the district court pending the outcome of
the Abbott Case by the U.S. Sixth Circuit Court of Appeals. As of December 31, 2023, 33 plaintiffs purporting to be Leach
class members have filed personal injury cases, which are expected to proceed in the Ohio MDL.
Other PFOA Matters
EIDP is a party to other PFOA lawsuits involving claims for property damage, medical monitoring and personal injury. Defense
costs and any future liabilities that may arise out of these lawsuits are subject to the MOU and the cost sharing arrangement
disclosed above. Under the MOU, fraudulent conveyance claims associated with these matters are not qualified expenses,
unless Corteva, Inc. and EIDP would prevail on the merits of these claims.
EIDP did not make firefighting foams, PFOS, or PFOS products. While EIDP made surfactants and intermediaries that some
manufacturers used in making foams, which may have contained PFOA as an unintended byproduct or an impurity, EIDP’s
products were not formulated with PFOA, nor was PFOA an ingredient of these products. EIDP has never made or sold PFOA
as a commercial product.
In March 2023, the U.S. Environmental Protection Agency ("EPA") published proposed rules establishing a maximum
contaminate level of four parts per trillion for PFOA in drinking water. If such rules are adopted, a legal mandate with respect
to acceptable PFOA levels in drinking water would be established.
Aqueous Firefighting Foams. Approximately 6,200 cases have been filed against 3M and other defendants, including EIDP and
Chemours, and some including Corteva and DuPont, alleging PFOS or PFOA environmental contamination and/or personal
injury from the use of aqueous firefighting foams. The vast majority of these cases have been transferred to a multi-district
litigation proceeding in federal district court in South Carolina (“SC MDL”). Approximately 4,800 of the cases in the SC MDL
were filed on behalf of firefighters who allege personal injuries (primarily prostate, kidney and testicular cancer) as a result of
exposure to aqueous firefighting foams (“AFFF”). Most of these recent cases assert claims that the EIDP and Chemours
separation constituted a fraudulent conveyance. Discovery is expected to take place in the first half of 2024 for potential
bellwether cases. On June 1, 2023, approximately 700 AFFF cases filed relating to U.S. public water systems were included as
F-41
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
part of the Nationwide Water District Settlement (as defined below). Additionally, in December 2023, a class action was filed
in Canada against 3M and other defendants, including EIDP and Chemours, alleging PFOS and PFOA environmental
contamination and personal injury from use of AFFF.
Nationwide Water District Settlement. On June 1, 2023, Corteva, EIDP, Inc., DuPont, and Chemours (collectively, the “settling
companies”) entered into a binding agreement in principle to comprehensively resolve all drinking water claims related to
PFAS of a defined class of U.S. public water systems that serve the vast majority of the United States population, including, but
not limited to the AFFF claims in the SC MDL. The federal district court in South Carolina (the “SC Court”) granted
preliminary approval of the class settlement on August 22, 2023 (the “Nationwide Water District Settlement”). PFAS, as
defined in the settlement, includes PFOA and HFPO-DA, among a broad range of fluorinated organic substances.
Under the Nationwide Water District Settlement, in September 2023 the settling companies established a settlement fund (the
“Water District Settlement Fund”) and collectively contributed $1.185 billion with Chemours contributing 50 percent, and
DuPont and Corteva collectively contributing the remaining 50 percent pursuant to the terms of the Letter Agreement. The
settling companies utilized the balance in the MOU Escrow Account, along with amounts previously expected to be contributed
to the MOU Escrow Account in 2023, among other sources, to make their respective contributions to the Water District
Settlement Fund. In exchange for the payment to the Water District Settlement Fund, the settling companies will receive a
complete release of the claims described below from the Class (as defined below).
The class represented by the Nationwide Water District Settlement is composed of all Public Water Systems, as defined in 42
U.S.C. § 300f, with a current detection of PFAS or that are currently required to monitor for PFAS under the Environmental
Protection Agency’s Fifth Unregulated Contaminant Monitoring Rule (“UCMR 5”) or other applicable federal or state law (the
“Class”). Approximately 88 percent of the U.S. is served by systems required to test under UCMR 5. The Class does not
include water systems owned and operated by a State or the United States government; small systems that have not detected the
presence of PFAS and are not currently required to monitor for it under federal or state requirements; and, unless they otherwise
request to be included, water systems in the lower Cape Fear River Basin of North Carolina.
The Nationwide Water District Settlement addresses the timing and logistics of the settlement payment and conditions under
which the settlement might not proceed, including a walk-away right that enables the settling companies to terminate the
settlement if more than a confidential, agreed number of class members opt out. A fairness hearing ahead of final approval of
the settlement took place on December 14, 2023. As part of the final approval process, the SC Court will establish a timetable
for notice to class members, for hearings on approval, and for class members to opt out of the settlement. A court-appointed
claims administrator, under the oversight of a court-appointed special master, will be responsible for the management,
allocation and distribution of the Water District Settlement Fund. Class counsel, subject to the settling companies’ consent, will
nominate the persons who, if approved by the SC Court, will serve as claims administrator and special master.
The total number of requests for exclusion (“opt-outs”) remains under review by the Notice Administrator. It is expected that
approximately 1,000 water districts may have opted-out of the settlement while most public water districts (approximately 93
percent of the Class) remain in the class settlement. The deadline for water districts to withdraw their request for exclusion is
March 1, 2024 and opt-outs remain subject to a court review process for compliance with other settlement terms. The company
continues to support this Nationwide Water District Settlement and final approval by the SC Court is expected to occur in the
first quarter of 2024.
The Nationwide Water District Settlement was entered into solely by way of compromise and settlement and is not in any way
an admission of liability or fault by Corteva or EIDP. As of December 31, 2023, an accrual has been established for this
settlement. If a settlement does not receive final approval, and plaintiffs elect to pursue their claims in court, the settling
companies will continue to assert their strong legal defenses in pending litigation.
New Jersey. In late March of 2019, the New Jersey State Attorney General filed four lawsuits against EIDP, Chemours, and
others alleging that operations at and discharges from former EIDP sites in New Jersey (Chambers Works, Pompton Lakes,
Parlin and Repauno) damaged the State’s natural resources. Two of these lawsuits (those involving the Chambers Works and
Parlin sites) allege contamination from PFAS. The Ridgewood Water District in New Jersey filed suit in the first quarter 2019
against EIDP, Chemours, and others alleging losses related to the investigation, remediation and monitoring of polyfluorinated
surfactants, including PFOA, in water supplies. DuPont and Corteva were subsequently added as defendants to these lawsuits.
These lawsuits include claims under the New Jersey Industrial Site Recovery Act (“ISRA”) and for fraudulent conveyance.
Beginning in April 2023, the lawsuits have been stayed subject to a court appointed mediation.
EIDP and Chemours are also defendants in two lawsuits by a private water utility provider in New Jersey and New York
alleging damages from PFAS releases into the environment, that impacted water sources that the utilities use to provide water,
F-42
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
as well as products liability, negligence, nuisance, and trespass claims. The court dismissed the New York plaintiff's trespass
claims and limited plaintiffs’ nuisance claims to abatement damages.
Ohio. EIDP is a defendant in two lawsuits, including an action by the State of Ohio based on alleged damage to natural
resources. The natural resources damage claim was settled in December 2023 for $110 million and is pending final approval
under Ohio's judicial consent order process. If approved, Corteva’s share of the settlement under the MOU will be
approximately $16 million. The third lawsuit, a putative nationwide class action ("the Hardwick Class Action") brought on
behalf of anyone who has detectable levels of PFAS in their blood serum seeks declaratory and injunctive relief, including the
establishment of a “PFAS Science Panel.” In March 2022, the trial court certified a class covering anyone subject to Ohio laws
having minimal levels of PFOA plus at least one other PFAS in their blood. In December 2023, the Sixth Circuit Court of
Appeals dismissed the Hardwick Class Action due to lack of standing by Mr. Hardwick. The plaintiff's petition for an en banc
review of the dismissal was denied in January 2024.
New York. EIDP is a defendant in about 45 lawsuits, including a putative class action (the "Baker Class Action"), brought by
persons who live in and around Hoosick Falls, New York. These lawsuits assert claims for medical monitoring, property
damage and personal injury based on alleged PFOA releases from manufacturing facilities owned and operated by co-
defendants in Hoosick Falls. The lawsuits allege that EIDP and others supplied materials used at these facilities resulting in
PFOA air and water contamination. A court approved settlement was reached between the plaintiffs and the other co-defendants
regarding the Baker Class Action case. In September 2022, the class certification of the Baker Class Action was granted, with
the court certifying three separate classes consisting of a private well property damage class, a medical monitoring class and a
nuisance class. EIDP will challenge the certification, and continue to defend itself on the merits of the case, while seeking an
out of court resolution. With the settlement of approximately 30 of the personal injury lawsuits, an accrual was established for
this matter as of December 31, 2023.
EIDP is also one of more than 10 defendants in a lawsuit brought by the Town of East Hampton, New York alleging PFOA and
PFOS contamination of the town’s well water. Additionally, EIDP along with Chemours and others, have been named
defendants in complaints filed by 20 water districts in Nassau County, New York alleging that the drinking water they provide
to customers is contaminated with PFAS and seeking reimbursement for clean-up costs. The water district complaints also
include allegations of fraudulent transfer.
Other Natural Resource Damage Cases. In addition to the natural resource cases in New Jersey and New York, 24 states and 3
U.S. territories, have filed lawsuits against EIDP, Chemours, and others, claiming, among other things, PFC (including PFOA)
contamination of groundwater and drinking water. Certain cases also name DuPont and Corteva as defendants and include
claims of fraudulent conveyance. The complaints seek reimbursement for past and future costs to investigate and remediate the
alleged contamination and compensation for the loss of value and use of the state’s natural resources. Due to overlapping AFFF
allegations, virtually all of these cases have been transferred, or are pending transfer to the SC MDL. These cases are largely in
the discovery phase. While the recent mediation of the natural resource case in North Carolina concluded without resolution,
discussions continue between the parties to seek a resolution. Mediation for cases in New Jersey are ongoing.
On July 13, 2021, Chemours, DuPont, EIDP and Corteva entered into a settlement agreement with the State of Delaware
reflecting the companies' and the State's agreement to settle and fully resolve claims alleged against the companies regarding
their historical Delaware operations, manufacturing, use and disposal of all chemical compounds, including PFAS. Under the
settlement, if the companies, individually or jointly, within 8 years of the settlement, enter into a proportionally similar
agreement to settle or resolve claims of another state for PFAS-related natural resource damages, for an amount greater than
$50 million, the companies shall make a supplemental payment directly to the Natural Resources and Sustainability Trust (the
“NRS Trust”) in an amount equal to such other states’ recovery in excess of $50 million ("Supplemental Payment").
Supplemental Payment(s), if any, will not exceed $25 million in the aggregate. All amounts paid by the companies under the
settlement are subject to the MOU and the Corteva Separation Agreement. Due to the settlement of natural resource damages
claims with the State of Ohio, the one-time Supplemental Payment will be triggered when the settlement is approved under the
Ohio judicial consent order process, with Corteva’s share under the MOU being approximately $4 million. Under the
settlement, if the state sues other parties and those parties seek contribution from the companies, the companies will have
protection from contribution up to the amounts previously paid under the settlement agreement. The companies will also
receive a credit up to the amount of the payment if the state seeks natural resource damage claims against the companies outside
the scope of the settlement’s release of claims.
Netherlands.
In April 2021, four municipalities in The Netherlands filed complaints alleging contamination of land and
groundwater resulting from the emission of PFOA and GenX by Corteva, DuPont and Chemours. The municipalities seek to
recover costs incurred due to the alleged emissions, including damages for investigation costs, construction project delays,
depreciation of land, soil remediation, liabilities to contractors, and attorneys’ fees. In September 2023, the court entered a
F-43
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
second interlocutory judgment, ruling, inter alia, that defendants were liable to the municipalities for PFOA emissions during a
certain time period, and the removal costs of deposited emissions on the municipalities land infringes their property rights by an
objective standard. While the parties continue to seek a resolution to these matters, a separate hearing related to damages is
expected to be scheduled for the first half of 2024. Additionally, the Office of Public Prosecutor in The Netherlands opened a
criminal investigation against certain Dutch subsidiaries of Chemours and Historical DuPont, as well as each subsidiary's
directors, alleging unlawful PFOA and GenX emissions from Chemours' Dordrecht facility.
Carpet Mill Cases. The city of Rome, GA and Centre, Alabama water district alleged defendants, including EIDP, Chemours,
other chemical suppliers and large carpet mills, discharged PFAS in their industrial wastewater, and that this wastewater after
treatment, resulted in PFAS contamination of drinking water supplies. The city of Rome sought damages for the cost of the
installation of a water treatment system capable of removing PFCs from the water, injunctive relief requiring the defendants to
clean up the contamination in the river ways, and punitive damages. Additionally, the city of Rome sent a demand to EIDP
asserting damages for the construction of a new utilities wastewater treatment system and upgrades to the city's water treatment
system, along with future monitoring costs. The City of Rome case has been settled and an accrual was established as of
December 31, 2023. The Centre Alabama water district carpet case has been stayed by the SC MDL. Numerous carpet
manufacturers, their alleged suppliers and former suppliers, including EIDP and Chemours, and certain municipal or utility
defendants are also subject to several lawsuits in Georgia and Alabama, alleging negligence, nuisance and trespass related to the
release of PFOA, and requesting injunctive relief related to PFOA contamination.
Fayetteville Works Facility, North Carolina
Prior to the separation of Chemours, EIDP introduced GenX as a polymerization processing aid and a replacement for PFOA at
the Fayetteville Works facility in Bladen County, North Carolina. The facility is now owned and operated by Chemours, which
continues to manufacture and use GenX. In June 2022, the EPA issued a final health advisory for drinking water related to
GenX. In July 2022, Chemours filed a petition in federal court for review of the EPA's GenX compounds health advisory.
At December 31, 2023, several actions are pending in federal court against Chemours and EIDP relating to PFC discharges
from the Fayetteville Works facility. One of these is a consolidated putative class action that asserts claims for medical
monitoring and property damage on behalf of putative classes of property owners and residents in areas near or who draw
drinking water from the Cape Fear River. Another action is a consolidated action brought by various North Carolina water
authorities, including the Cape Fear Public Utility Authority (“CFPUA”) and Brunswick County, that seek actual and punitive
damages as well as injunctive relief. In a state court action approximately 100 private property owners near the Fayetteville
Works facility filed a complaint against Chemours and EIDP in May 2020. The plaintiffs seek compensatory and punitive
damages for their claims of private nuisance, trespass, negligence and property damage allegedly caused by release of certain
PFCs. In March 2023, CFPUA filed a Delaware Chancery Court action claiming the spin-off of Chemours and the Dow and
historical DuPont merger were unlawful and should be voided, so CFPUA is not precluded from recovering amounts its entitled
in its pending litigation. EIDP filed a motion to dismiss the Delaware Chancery Court action based upon failure to state a claim
under Delaware law in June 2023, along with a counterclaim in October 2023. CFPUA’s motion to stay the case was granted in
January 2024.
Generally, site-related expenses related to GenX claims are subject to the cost sharing arrangements as defined in the MOU.
Environmental
Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the
liability can be reasonably estimated based on current law and existing technologies. These obligations are included in accrued
and other current liabilities and other noncurrent obligations in the Consolidated Balance Sheet. It is reasonably possible that
environmental remediation and restoration costs in excess of amounts accrued could have a material impact on the company’s
results of operations, financial condition and cash flows. Inherent uncertainties exist in these estimates primarily due to
unknown conditions, changing governmental regulations and legal standards regarding liability, and emerging remediation
technologies for handling site remediation and restoration.
For a discussion of the allocation of environmental liabilities under the Chemours Separation Agreement and the Corteva
Separation Agreement, see page F-38.
F-44
The accrued environmental obligations and indemnification assets include the following:
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
(In millions)
Environmental Remediation Stray Liabilities
As of December 31, 2023
Indemnification
Asset
Accrual
balance3
Potential exposure
above amount
accrued3
Chemours related obligations - subject to indemnity1,2
Other discontinued or divested businesses obligations1
$
150 $
44
150 $
65
Environmental remediation liabilities primarily related to DuPont -
subject to indemnity from DuPont2
Environmental remediation liabilities not subject to indemnity
Indemnification liabilities related to the MOU4
279 $
Total$
501 $
59
—
26
63
106
117
286
198
63
78
29
654
1. Represents liabilities that are subject to the $200 million threshold and sharing arrangements as discussed on page F-39, under the header "Corteva
Separation Agreement."
2. The company has recorded an indemnification asset related to these accruals, including $31 million related to the Superfund sites.
3. Accrual balance represents management’s best estimate of the costs of remediation and restoration, although it is reasonably possible that the potential
exposure, as indicated, could range above the amounts accrued, as there are inherent uncertainties in these estimates. Accrual balance includes $55 million
for remediation of Superfund sites. Amounts do not include possible impacts from the remediation elements of the EPAs October 2021 PFAS Strategic
Roadmap (as applicable), except as disclosed on page F-44 relating to Chemours' remediation activities at the Fayetteville Works Facility pursuant to the
Consent Order with the North Carolina Department of Environmental Quality ("NC DEQ").
4. Represents liabilities that are subject to the $150 million threshold and sharing agreements as discussed on page F-38, under the header "Chemours /
Performance Chemicals."
Chambers Works, New Jersey
On January 28, 2022, the State of New Jersey filed a request for a preliminary injunction against EIDP and Chemours seeking
the establishment of a Remediation Funding Source (“RFS”) in an amount exceeding $900 million for environmental
remediation at EIDP’s former Chambers Works facility in New Jersey. The RFS primarily relates to non-PFAS remediation,
which is not subject to the MOU. Chemours has accepted indemnity and defense for these matters, while reserving rights and
declining EIDP’s demand relating to the ISRA and fraudulent transfer matters as alleged under the existing New Jersey natural
resource lawsuits discussed on page F-42. Further ruling on this proceeding has been stayed subject to court appointed
mediation.
Nebraska Department of Environment and Energy, AltEn Facility
The EPA and the Nebraska Department of Environment and Energy (“NDEE”) are pursuing investigations, response and
removal actions, litigation and enforcement action related to an ethanol plant located near Mead, Nebraska and owned and
operated by AltEn LLC (“AltEn”). The agencies have alleged violations under the Resource Conservation and Recovery Act
(“RCRA”) and other federal and state laws stemming from AltEn’s lack of compliance with the terms and conditions of its
operating permits and other regulatory requirements. Corteva is one of six seed companies, who were customers of AltEn
(collectively, the "Facility Response Group"), participating in the NDEE’s Voluntary Cleanup Program to address certain
interim remediation needs at the site. In February 2022, the Facility Response Group, filed a lawsuit against AltEn and certain
of its affiliates to preserve certain contractual and common law indemnification claims. As of December 31, 2023, an accrual
was established for Corteva’s estimated voluntary contribution to the solid waste and wastewater remedial action plans for the
AltEn location.
F-45
NOTE 17 - STOCKHOLDERS' EQUITY
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Common Stock
Set forth below is a reconciliation of common stock share activity for the years ended December 31, 2023, 2022, and 2021:
Shares of common stock
Balance December 31, 2020
Issued
Repurchased and retired
Balance December 31, 2021
Issued
Repurchased and retired
Balance December 31, 2022
Issued
Repurchased and retired
Balance December 31, 2023
Issued
743,458,000
4,019,000
(20,950,000)
726,527,000
4,317,000
(17,425,000)
713,419,000
1,965,000
(14,124,000)
701,260,000
Share Buyback Plan
On September 13, 2022, Corteva, Inc. announced that its Board of Directors authorized a $2 billion share repurchase program
to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2022 Share Buyback Plan").
The timing, price and volume of purchases will be based on market conditions, relevant securities laws and other factors. In
connection with the 2022 Share Buyback Plan, the company repurchased and retired 10,026,000 shares in the open market for a
cost (excluding excise taxes) of $500 million during the year ended December 31, 2023.
On August 5, 2021, Corteva, Inc. announced that its Board of Directors authorized a $1.5 billion share repurchase program to
purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2021 Share Buyback Plan").
The company completed the 2021 Share Buyback Plan during the first quarter of 2023 and repurchased and retired 4,098,000,
17,425,000 and 5,572,000 shares in the open market for a total cost of $250 million, $1 billion, and $250 million during the
years ended December 31, 2023, 2022 and 2021, respectively.
On June 26, 2019, Corteva, Inc. announced that its Board of Directors authorized a $1 billion share repurchase program to
purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2019 Share Buyback Plan").
The company completed the 2019 Share Buyback Plan during the third quarter of 2021 and repurchased and retired 24,705,000
shares between the years ended December 31, 2019 and 2021 in the open market.
Shares repurchased pursuant to Corteva's share buyback plans are immediately retired upon repurchase. Repurchased common
stock is reflected as a reduction of stockholders' equity. The company's accounting policy related to its share repurchases is to
reduce its common stock based on the par value of the shares and to reduce its retained earnings for the excess of the repurchase
price over the par value. When Corteva has an accumulated deficit balance, the excess over the par value is applied to APIC.
When Corteva has retained earnings, the excess is charged entirely to retained earnings.
Noncontrolling Interest
Corteva, Inc. owns 100 percent of the outstanding common shares of EIDP. However, EIDP has preferred stock outstanding to
third parties which is accounted for as a non-controlling interest in Corteva's Consolidated Balance Sheets. Each share of EIDP
Preferred Stock - $4.50 Series and EIDP Preferred Stock - $3.50 Series issued and outstanding at the effective date of the
Corteva Distribution remains issued and outstanding as to EIDP and was unaffected by the Corteva Distribution.
Below is a summary of the EIDP Preferred Stock at December 31, 2023 and 2022 which is classified as noncontrolling interests
in the Corteva Consolidated Balance Sheets.
(Shares in thousands)
Authorized
$4.50 Series, callable at $120
$3.50 Series, callable at $102
Number of Shares
23,000
1,673
700
F-46
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Other Comprehensive Income (Loss)
The changes and after-tax balances of components comprising accumulated other comprehensive income (loss) are summarized
below:
(In millions)
2021
Balance January 1, 2021
Other comprehensive income (loss) before
reclassifications
Amounts reclassified from accumulated
other comprehensive income (loss)
Net other comprehensive income (loss)
Balance December 31, 2021
2022
Other comprehensive income (loss) before
reclassifications
Amounts reclassified from accumulated
other comprehensive income (loss)
Net other comprehensive income (loss)
Balance December 31, 2022
2023
Other comprehensive income (loss) before
reclassifications
Amounts reclassified from accumulated
other comprehensive income (loss)
Net other comprehensive income (loss)
Cumulative
Translation
Adjustment1
Derivative
Instruments
Pension
Benefit Plans
Other
Benefit Plans
Unrealized
Gain (Loss) on
Investments
Total
$
(1,970) $
(67) $
(1,433) $
590 $
(10) $ (2,890)
(573)
143
996
25
3
594
—
(573)
(2,543) $
$
(4)
139
72 $
41
1,037
(396) $
(646)
(621)
(31) $
(340)
—
(340)
63
(55)
8
213
20
233
190
1
191
(602)
7
10
(8)
— $ (2,898)
—
—
—
126
(34)
92
$
(2,883) $
80 $
(163) $
160 $
— $ (2,806)
425
—
425
(123)
(12)
(135)
(188)
(2)
(190)
38
(9)
29
—
—
—
152
(23)
129
Balance December 31, 2023
$
(2,458) $
(55) $
(353) $
189 $
— $ (2,677)
1. The cumulative translation adjustment gains for the year ended December 31, 2023 was primarily driven by the weakening of the U.S. Dollar (“USD”)
against the Swiss Franc ("CHF"), Brazilian Real ("BRL") and European Euro ("EUR"). The cumulative translation adjustment losses for the year ended
December 31, 2022 was primarily driven by the strengthening of the U.S. Dollar (“USD”) against the European Euro ("EUR"), Indian Rupee (“INR”), South
African Rand (“ZAR”) and Philippine Peso (“PHP”). The cumulative translation adjustment losses for the year ended December 31, 2021 was primarily
driven by the strengthening of the U.S. Dollar ("USD") against the European Euro ("EUR"), Swiss franc ("CHF") and Turkish Lira (“TRY”).
The tax (expense) benefit on the net activity related to each component of other comprehensive income (loss) was as follows:
For the Year Ended December 31,
2022
2021
2023
60
(9)
3 $
(68)
(56)
$
101 $
(121) $
(41)
(319)
188
(172)
(In millions)
Derivative instruments$
Pension benefit plans - net
50 $
Other benefit plans - net
(Provision for) benefit from income taxes related to other comprehensive
income (loss) items
F-47
A summary of the reclassifications out of accumulated other comprehensive income (loss) is provided as follows:
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
(In millions)
Derivative Instruments1:
Amortization of pension benefit plans:
Prior service (benefit) cost3,4
Actuarial (gains) losses3,4
Settlement (gain) loss3,4
Amortization of other benefit plans:
Prior service (benefit) cost3,4
Actuarial (gains) losses3,4
Curtailment (gain) loss
Unrealized (Gain) Loss on Investments4
Total reclassifications for the period, after-tax
For the Year Ended December 31,
2022
2021
2023
$
Tax (benefit) expense2
After-tax $
$
Total before tax
Tax (benefit) expense2
After-tax $
$
Total before tax
Tax (benefit) expense2
After-tax $
$
Tax (benefit) expense2
After-tax $
$
(8) $
(4)
(12) $
(3) $
—
—
(3)
1
(2) $
(2) $
(10)
—
(12)
3
(9) $
— $
—
— $
(23) $
(63) $
8
(55) $
(3) $
3
25
25
(5)
20 $
(1) $
2
—
1
—
1 $
— $
—
— $
(34) $
(13)
9
(4)
(2)
55
1
54
(13)
41
(922)
81
(1)
(842)
196
(646)
7
—
7
(602)
1. Reflected in cost of goods sold in the Consolidated Statements of Operations.
2. Reflected in provision for (benefit from) income taxes from continuing operations in the Consolidated Statements of Operations.
3. These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit (credit) cost of the company's
pension and other benefit plans. See Note 18 - Pension Plans and Other Post-Employment Benefits, to the Consolidated Financial Statements, for additional
information.
4. Reflected in other income (expense) - net in the Consolidated Statements of Operations.
F-48
NOTE 18 - PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
The company offers various long-term benefits to its employees. Where permitted by applicable law, the company reserves the
right to change, modify or discontinue the plans.
Defined Benefit Pension Plans
The company has both funded and unfunded noncontributory defined benefit pension plans covering employees in the U.S. and
non-U.S. countries. The principal U.S. pension plan is the largest pension plan held by Corteva. Effective January 1, 2007, most
new hires were no longer eligible to participate in the U.S. defined benefit pension plans. On November 30, 2018, the company
froze the pay and service amounts used to calculate the pension benefits for active employees who participate in the pension
plan. As a result, no participants are currently accruing additional benefits in the pension plan.
The company's funding policy is consistent with the funding requirements of federal laws and regulations. Pension coverage for
employees of the company's non-U.S. consolidated subsidiaries is provided, to the extent deemed appropriate, through separate
plans. Obligations under such plans are funded by depositing funds with trustees, covered by insurance contracts, or remain
unfunded.
The company made total contributions of $52 million, $60 million, and $49 million to its pension plans other than the principal
U.S. pension plan for the years ended December 31, 2023, 2022 and 2021, respectively. Corteva expects to contribute
approximately $50 million to its pension plans other than the principal U.S. pension plan in 2024. The company does not
anticipate making contributions to its principal U.S pension plan in 2024.
In August 2022, the company transferred approximately $1.1 billion of certain benefit obligations and associated plan assets in
the principal U.S. pension plan (the “Plan”) to an insurance company through the purchase of a nonparticipating group annuity
contract (“Annuity Purchase”). The company recorded a non-cash, pre-tax settlement charge of approximately $25 million in
other income (expense) – net in the Consolidated Statements of Operations for the year ended December 31, 2022 and
corresponding adjustment to accumulated other comprehensive income (loss) in the Consolidated Balance Sheets at December
31, 2022 due to the Annuity Purchase. The Annuity Purchase resulted in a remeasurement of the Plan as of August 31, 2022
and the company updated the weighted average discount rate used in developing the 2022 net periodic pension (credit) costs at
December 31, 2021 from 2.82 percent to 4.60 percent. Due to the remeasurement, the company recorded a pre-tax actuarial gain
of approximately $110 million to accumulated other comprehensive income (loss) in the Consolidated Balance Sheets at
December 31, 2022.
The weighted-average assumptions used to determine pension plan obligations for all pension plans are summarized in the table
below:
Weighted-Average Assumptions used to Determine Benefit Obligations
Discount rate
Rate of increase in future compensation levels1
December 31, 2023 December 31, 2022
5.17 %
4.97 %
2.87 %2.83 %
1. The rate of compensation increase excludes U.S. pension plans since the employees who participate in the U.S. pension plans no longer accrue additional
benefits for future service and eligible compensation.
The weighted-average assumptions used to determine net periodic benefit costs for all pension plans are summarized in the
table below:
Weighted-Average Assumptions used to Determine Net Periodic
Benefit Cost
For the Year Ended December 31,
2022
2021
2023
Discount rate
Rate of increase in future compensation levels1
Expected long-term rate of return on plan assets
5.17 %3.33
2.83 %
4.55 %4.51
%
2.55 %
%
2.44 %
2.54 %
5.73 %
1. The rate of compensation increase excludes U.S. pension plans since the employees who participate in the U.S. pension plans no longer accrue additional
benefits for future service and eligible compensation.
Other Post-Employment Benefits
The company has historically provided medical, dental and life insurance benefits to certain pensioners and survivors. The
majority of U.S. employees hired on or after January 1, 2007, and eligible employees under the age of 50 as of November 30,
2018, are not eligible to participate in the post-employment medical, dental and life insurance plans. Substantially all of the cost
and liabilities for these retiree benefit plans are attributable to the U.S. benefit plans. The non-Medicare eligible retiree medical
plan is contributory with costs shared between the company and pensioners and survivors. For Medicare eligible pensioners and
F-49
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
survivors, Corteva provides a company-funded Health Reimbursement Arrangement ("HRA"). In December 2020, the company
amended its retiree medical, dental and life insurance plans resulting in the company no longer providing retiree dental and life
insurance benefits effective January 1, 2022 and Corteva’s portion of the cost of non-Medicare retiree medical coverage no
longer being adjusted for cost increases, which capped the Corteva cost at the level in effect as of December 31, 2021 ("2020
OPEB Plan Amendments"). As a result of these changes, the company recorded a $939 million decrease in other post-
employment benefits ("OPEB") benefit obligations as of December 31, 2020 with a corresponding prior service benefit within
other comprehensive income for the year ended December 31, 2020. A substantial amount of the prior service benefit within
other comprehensive income (loss) in 2020 was recognized in other income (expense) - net in the Consolidated Statement of
Operations during 2021 with the remainder recognized during 2022.
The company also provides disability benefits to employees. In most countries, employee disability benefit plans are insured. In
the U.S., these plans are generally self-insured. Obligations and expenses for self-insured plans are reflected in the change in
projected benefit obligations table on page F-51.
The company's OPEB plans are unfunded and the cost of the approved claims is paid from operating cash flows. Pre-tax cash
requirements to cover actual net claims costs and related administrative expenses were $97 million, $122 million, and $198
million for the years ended December 31, 2023, 2022 and 2021, respectively. Changes in cash requirements reflect the net
impact of per capita health care costs, demographic changes, plan amendments and changes in participant premiums, co-
payments and deductibles. In 2024, the company expects to contribute approximately $115 million for its OPEB plans.
The weighted-average assumptions used to determine benefit obligations for OPEB plans are summarized in the table below:
Weighted-Average Assumptions used to Determine Benefit Obligations
Discount rate
December 31, 2023 December 31, 2022
4.92 %5.09 %
The weighted-average assumptions used to determine net periodic benefit costs for the OPEB plans are summarized in the table
below:
Weighted-Average Assumptions used to Determine Net Periodic
Benefit Cost
For the Year Ended December 31,
2022
2021
2023
Discount rate
5.09 %2.59
%
2.09 %
As of December 31, 2023, 2022 and 2021, health care cost trend rates do not impact the benefit obligations for the OPEB plans
because of the 2020 OPEB Plan Amendments.
Assumptions
For the U.S. plan, the company determines the expected long-term rate of return on plan assets by performing a detailed
analysis of key economic and market factors driving historical returns for each asset class and formulating a projected return
based on factors in the current environment. Factors considered include, but are not limited to, inflation, real economic growth,
interest rate yield, interest rate spreads, and other valuation measures and market metrics. The expected long-term rate of return
for each asset class is then weighted based on the strategic asset allocation approved by the governing body for the plan. The
company's historical experience with the pension fund asset performance is also considered. For non-U.S. plans, assumptions
reflect economic assumptions applicable to each country.
In the U.S., Corteva calculates service costs and interest costs by applying individual spot rates from a yield curve (based on
high-quality corporate bond yields) to the separate expected cash flows components of service cost and interest cost. Service
cost and interest cost for all other plans are determined based on the single equivalent discount rates derived in determining
those plan obligations.
For U.S. benefit plans, the discount rates utilized to measure the pension and other post-employment benefit obligations are
based on the yield of high-quality corporate fixed income investments at the measurement date. Future expected actuarially
determined cash flows are individually discounted at the spot rates under the Aon AA_Above Median yield curve (based on
high-quality corporate bond yields) to arrive at the plan’s obligations as of the measurement date. For non-U.S. benefit plans,
historically the company utilized prevailing long-term high quality corporate bond indices to determine the discount rate,
applicable to each country, at the measurement date.
F-50
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
The company adopts the most recently published mortality tables and mortality improvement scale released by the Society of
Actuaries in measuring its U.S. pension and other post-employment benefit obligations. The effect of these adoptions is
amortized into net periodic benefit cost for the years following the adoption.
Summarized information on the company's pension and other post-employment benefit plans is as follows:
Change in Projected Benefit Obligations, Plan Assets and Funded Status
(In millions)
Change in benefit obligations:
Benefit obligation at beginning of the period
Service cost
Interest cost
Plan participants' contributions
Actuarial (gain) loss
Benefits paid
Other1
Effect of foreign exchange rates
Benefit obligations at end of the period
Change in plan assets:
Fair value of plan assets at beginning of the
period
Actual return on plan assets
Employer contributions
Plan participants' contributions
Benefits paid
Other1
Effect of foreign exchange rates
Fair value of plan assets at end of the period
Funded status
U.S. plan with plan assets
Non-U.S. plans with plan assets
All other plans 2,3
Funded status at end of the period
Defined Benefit Pension Plans
Other Post-Employment Benefits
For the Year Ended December 31, For the Year Ended December 31,
2023
2022
2023
2022
$
$
$
$
$
$
13,982 $
18
690
1
311
(1,304)
(257)
(1)
13,440 $
12,584 $
661
52
1
(1,304)
(257)
18
11,755 $
(1,336) $
(43)
(306)
(1,685) $
19,775 $
20
505
1
(3,759)
(1,460)
(1,080)
(20)
13,982 $
17,827 $
(2,765)
60
1
(1,460)
(1,080)
1
12,584 $
(1,050) $
(30)
(318)
(1,398) $
1,021 $
1
49
20
(49)
(117)
—
—
925 $
— $
—
97
20
(117)
—
—
— $
— $
—
(925)
(925) $
1,362
1
26
20
(246)
(142)
—
—
1,021
—
—
122
20
(142)
—
—
—
—
—
(1,021)
(1,021)
1. Primarily relates to transfers of certain benefit obligations and related assets associated with the principal U.S. pension plan to an insurance company through
the purchase of nonparticipating group annuity contracts.
2. As of December 31, 2023 and 2022, $155 million and $182 million, respectively, of the benefit obligations are supported by funding under the Trust
agreement, defined in the "Trust Assets" section below.
3. Includes pension plans maintained around the world where funding is not customary.
F-51
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
(In millions)
Amounts recognized in the Consolidated Balance Sheets:
Other assets
Accrued and other current liabilities
Pension and other post-employment benefits - noncurrent
Net amount recognized
Pretax amounts recognized in accumulated other
comprehensive income (loss):
Net gain (loss)
Prior service benefit (cost)
Pretax balance in accumulated other comprehensive income
(loss) at end of year
Defined Benefit Pension
Plans
Other Post-Employment
Benefits
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
$
$
$
$
2 $
(31)
(1,656)
(1,685) $
3 $
(35)
(1,366)
(1,398) $
— $
(114)
(811)
(925) $
—
(132)
(889)
(1,021)
(487) $
22
(238) $
23
238 $
14
(465) $
(215) $
252 $
198
16
214
The loss related to the change in pension and OPEB plan benefit obligations for the period ended December 31, 2023 is mainly
due to the reduction in the discount rate.
The accumulated benefit obligation for all pension plans was $13.4 billion and $14.0 billion at December 31, 2023 and 2022,
respectively.
Pension Plans with Projected Benefit Obligations in Excess of Plan Assets
(In millions)
Projected benefit obligations
Fair value of plan assets
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets
(In millions)
Accumulated benefit obligations
Fair value of plan assets
December 31, 2023 December 31, 2022
$
13,262 $
11,575
13,832
12,430
December 31, 2023 December 31, 2022
$
13,155 $
11,488
13,676
12,290
F-52
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
(In millions)
Defined Benefit Pension Plans
Other Post-Employment Benefits
For the Year Ended December 31, For the Year Ended December 31,
Components of net periodic benefit (credit) cost
and amounts recognized in other comprehensive
income (loss)
Net Periodic Benefit (Credit) Cost:
Service cost
Interest cost
Expected return on plan assets
Amortization of unrecognized loss (gain)
Amortization of prior service (benefit) cost
Curtailment (gain) loss
Settlement loss
Net periodic benefit (credit) cost - Total
Changes in plan assets and benefit obligations
recognized in other comprehensive income
(loss):
Net gain (loss)
Amortization of unrecognized (gain) loss
Prior service benefit (cost)
Amortization of prior service (benefit) cost
$
$
$
Curtailment (gain) loss
Settlement loss
Effect of foreign exchange rates
Total benefit (loss) recognized in other
comprehensive income (loss), attributable to
Corteva$
Total recognized in net periodic benefit (credit)
cost and other comprehensive income (loss)
2023
2022
2021
2023
2022
2021
18 $
690
(605)
—
(3)
—
—
100 $
20 $
505
(720)
3
(3)
—
25
(170) $
25 $
364
(915)
55
(2)
—
1
(472) $
1 $
49
—
(10)
(2)
—
—
38 $
1 $
26
—
2
(1)
—
—
28 $
(255) $
—
274 $
3
1,284 $
55
49 $
(10)
246 $
2
—
(3)
—
—
8
—
(3)
—
25
2
15
(2)
—
1
3
—
(2)
—
—
1
—
(1)
—
—
—
1
21
—
81
(922)
(1)
—
(820)
33
81
—
(922)
(1)
—
—
(250) $
301 $
1,356 $
38 $
247 $
(809)
$
(350) $
471 $
1,828 $
— $
219 $
11
Estimated Future Benefit Payments
The estimated future benefit payments, reflecting expected future service, as appropriate, are presented in the following table:
Defined Benefit
Pension Plans
Other Post-
Employment Benefits
113
106
99
93
86
344
841
1,251 $
1,214
1,182
1,149
1,112
4,994
Estimated Future Benefit Payments at December 31, 2023
(In millions)
2024
2025
2026
2027
2028
Years 2029-2033
Total$
10,902 $
$
F-53
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Plan Assets
All pension plan assets in the U.S. are invested through a single master trust fund. The general principles guiding U.S. pension
asset investment policies are those embodied in the Employee Retirement Income Security Act of 1974 ("ERISA"). These
principles include discharging Corteva's investment responsibilities for the exclusive benefit of plan participants and in
accordance with the "prudent expert" standard and other ERISA rules and regulations. Corteva establishes strategic asset
allocation percentage targets and appropriate benchmarks for significant asset classes with the aim of achieving a prudent
balance between return and risk. The strategic asset allocation for this trust fund is approved by the Pension Investment
Committee. Strategic asset allocations in other countries are selected in accordance with the laws and practices of those
countries. Where appropriate, asset liability studies are utilized in this process.
U.S. plan assets are managed by investment professionals employed by Corteva, and plan assets for non-U.S. plans are
managed by professional
investment firms unrelated to the company. Corteva's pension investment professionals have
discretion to manage the assets within established asset allocation ranges approved by the Pension Investment Committee.
Additionally, pension trust funds are permitted to enter into certain contractual arrangements generally described as
"derivatives." Derivatives are primarily used to reduce specific market risks, hedge currency and adjust portfolio duration and
asset allocation in a cost-effective manner.
The weighted-average target allocation for plan assets of the company's pension plans is summarized as follows:
Target Allocation for Plan Assets
Asset Category
U.S. equity securities
Non-U.S. equity securities
Fixed income securities
Hedge funds
Private market securities11
Real estate
Cash and cash equivalents2
Total
December 31, 2023 December 31, 2022
9 %
5
64
2
7
100 %
8 %
7
64
3
11
6
1
100 %
U.S. equity investments are primarily large-cap companies. Non-U.S. equity securities include varying market capitalization
levels. Fixed income securities include corporate-issued, government-issued and asset-backed securities of both U.S. and non-
U.S. issuers. Corporate debt investments include a range of credit risk and industry diversification. U.S. fixed income
investments are weighted heavier than non-U.S. fixed income securities. Other investments include cash and cash equivalents,
hedge funds, real estate and private market securities such as interests in private equity and venture capital partnerships.
Fair value calculations may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the
company believes its valuation methods are appropriate and consistent with other market participants, the use of different
methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value
measurement at the reporting date.
For pension plan assets classified as Level 1 measurements (measured using quoted prices in active markets), total fair value is
either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on
which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without
consideration of transaction costs.
For pension plan assets classified as Level 2 measurements, where the security is frequently traded in less active markets, fair
value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the
price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market
inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance and quality checks.
For derivative assets and liabilities, standard industry models are used to calculate the fair value of the various financial
instruments based on significant observable market inputs, such as foreign exchange rates, commodity prices, swap rates,
interest rates and implied volatilities obtained from various market sources.
For pension plan assets classified as Level 3 measurements, total fair value is based on significant unobservable inputs
including assumptions where there is little, if any, market activity for the investment. Investment managers, fund managers, or
investment contract issuers provide valuations of the investment on a monthly or quarterly basis. These valuations are reviewed
for reasonableness based on applicable sector, benchmark and company performance. Adjustments to valuations are made
F-54
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
where appropriate. Where available, audited financial statements are obtained and reviewed for the investments as support for
the manager’s investment valuation.
The tables below present the fair values of the company's pension assets by level within the fair value hierarchy, as described in
Note 2 - Summary of Significant Accounting Policies:
Basis of Fair Value Measurements
For the year ended December 31, 2023
(In millions)
Cash and cash equivalents
U.S. equity securities 1
Non-U.S. equity securities
Debt – government-issued
Debt – corporate-issued
Debt – asset-backed
Hedge funds
Private market securities
Real estate funds
Other
Subtotal
Investments measured at net asset value
Debt - government issued
Debt - corporate-issued
U.S. equity securities
Non-U.S. equity securities
Hedge funds
Private market securities
Real estate funds
Total
Level 1
Level 2
Level 3
$
1,148 $
1,108
1,148 $
1,106
— $
1
441
1,601
3,908
637
5
6
52
55
439
—
—
—
—
—
—
—
—
1,601
3,906
637
2
—
—
—
—
1
2
—
2
—
3
6
52
55
$
8,961 $
2,693 $
6,147 $
121
42
3
19
21
143
1,928
768
2,924
315
(445)
Total investments measured at net asset value
Other items to reconcile to fair value of plan assets
$
Pension trust receivables 2
Pension trust payables 3
Total$
11,755
1. The Corteva pension plans directly held $204 million (approximately 2 percent of total plan assets) of Corteva, Inc. common stock at December 31, 2023.
2. Primarily receivables for investments securities sold.
3. Primarily payables for investment securities purchased.
F-55
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Basis of Fair Value Measurements
For the year ended December 31, 2022
(In millions)
Total
Level 1
Level 2
Level 3
Cash and cash equivalents$
U.S. equity securities1
Non-U.S. equity securities
Debt – government-issued
Debt – corporate-issued
Debt – asset-backed
Hedge funds
Private market securities
Real estate funds
Derivatives – asset position
Other
Subtotal
1,348
$
1,200
806
1,669
3,822
695
3
4
132
2
62
1,348 $
1,195
806
—
—
—
—
—
—
—
—
— $
2
—
1,669
3,822
695
—
—
—
2
—
$
9,743 $
3,349 $
6,190 $
—
3
—
—
—
—
3
4
132
—
62
204
Investments measured at net asset value
Debt - government issued
Debt - corporate-issued
U.S. equity securities
Non-U.S. equity securities
Hedge funds
Private market securities
Real estate funds
Total investments measured at net asset value$
3,085
Other items to reconcile to fair value of plan assets
Pension trust receivables2
Pension trust payables3
Total$
12,584
35
3
20
20
347
1,991
669
161
(405)
1. The Corteva pension plans directly held $250 million (approximately 2 percent of total plan assets) of Corteva, Inc. common stock at December 31, 2022.
2. Primarily receivables for investments securities sold.
3. Primarily payables for investment securities purchased.
F-56
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
The following table summarizes the changes in fair value of Level 3 pension plan assets for the years ended December 31, 2023
and 2022:
Fair Value Measurement of
Level 3 Pension Plan Assets
(In millions)
Balance at January 1, 2022
Actual return on assets:
Relating to assets sold during the
year ended December 31, 2022
Relating to assets held at
December 31, 2022
Purchases, sales and settlements, net
Transfers in or out of Level 3, net
Balance at December 31, 2022
Actual return on assets:
Relating to assets sold during the
year ended December 31, 2023
Relating to assets held at
December 31, 2023
Purchases, sales and settlements, net
Transfers in or out of Level 3, net
U.S. equity
securities
Non-U.S.
equity
securities
Debt –
corporate
-issued
Hedge
funds
Private
market
securities
Real
estate
Other
Total
$
4 $
— $
2 $
— $
3 $
26 $
75 $
110
1
—
(2)
—
$
3 $
(1)
—
(1)
—
—
(15)
(13)
1
12
— $
(9)
10
1
—
13
—
—
— $
—
(5)
7
—
—
(8)
—
11
(9)
—
—
10
—
—
8
(1)
99
132 $
(1)
(12)
—
62 $
3 $
4 $
—
—
—
—
—
2
—
—
—
—
(24)
(35)
(21)
4
(13)
2
(23)
9
(14)
122
204
(10)
(13)
(41)
(19)
Balance at December 31, 2023
$
1 $
2 $
2 $
3 $
6 $
52 $
55 $
121
Trust Assets
EIDP entered into a trust agreement in 2013 (as amended and restated in 2017, "the Trust") that established and requires EIDP
to fund the Trust for cash obligations under certain non-qualified benefit and deferred compensation plans upon a change in
control event as defined in the Trust agreement. Under the Trust agreement, the consummation of the Merger was a change in
control event and resulted in a contribution to the Trust by EIDP. Additionally, the Separation resulted in Corteva transferring a
portion of the balance of the Trust to DuPont at the Separation date. During the years ended December 31, 2023 and 2022, $47
million and $58 million, respectively, was distributed to EIDP according to the Trust agreement, and at December 31, 2023 and
2022, the balance in the Trust was $214 million and $251 million, respectively. The Trust Assets are classified as current
restricted cash equivalents and included within other current assets in the Consolidated Balance Sheets. See Note 7 -
Supplementary Information, to the Consolidated Financial Statements, for further information.
Defined Contribution Plans
Corteva provides defined contribution benefits to its employees. The most significant is the U.S. Retirement Savings Plan ("the
Plan"), which covers almost all of the U.S. full-service employees. This Plan includes a non-leveraged Employee Stock
Ownership Plan ("ESOP"). Employees are not required to participate in the ESOP and those who do are free to diversify out of
the ESOP. The purpose of the Plan is to provide retirement savings benefits for employees and to provide employees an
opportunity to become stockholders of the company. The Plan is a tax qualified contributory profit sharing plan, with cash or
deferred arrangement and any eligible employee of Corteva may participate. Currently, Corteva contributes 100 percent of the
first 6 percent of the employee's contribution election and also contributes 3 percent of each eligible employee's eligible
compensation regardless of the employee's contribution.
Corteva's contributions to the Plan were $101 million, $97 million, and $63 million for the years ended December 31, 2023,
2022 and 2021, respectively. Corteva's matching contributions vest immediately upon contribution. The 3 percent nonmatching
company contribution vests after employees complete three years of service. In addition, Corteva made contributions to other
defined contribution plans of $45 million, $36 million, and $29 million for the years ended December 31, 2023, 2022 and 2021,
respectively.
F-57
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
NOTE 19 - STOCK-BASED COMPENSATION
Prior to the Corteva Distribution, Corteva employees held equity awards, including stock options, share appreciation rights
(“SARs”), restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”), which were denominated in
DowDuPont common stock and, in some cases, in Dow Inc. common stock, and which had originally been issued under the
DuPont Equity and Incentive Plan ("EIP"), the Dow Chemical Company 2012 Stock Incentive Plan or the Dow Chemical
Company 1988 Award and Option Plan.
As discussed in Note 16 - Commitments and Contingent Liabilities, on April 1, 2019 the company entered into an employee
matters agreement (the "EMA") with DuPont and Dow that identifies employees and employee-related liabilities (and
attributable assets) to be allocated (either retained, transferred and accepted, or assigned and assumed, as applicable) to the
Parties as part of the Distributions and describes when and how the relevant transfers and assignments will occur. With some
exceptions, the EMA provides for the equitable adjustment of existing equity incentive compensation awards denominated in
the common stock of DowDuPont to reflect the occurrence of the Distributions.
In connection with the Separation on June 1, 2019, outstanding DowDuPont-denominated stock options, SARs, RSU and PSU
awards were converted into Corteva-denominated awards under the “Employer Method,” or into both DuPont-denominated
awards and Corteva-denominated awards under the “Shareholder Method,” using a formula designed to preserve the intrinsic
value of the awards immediately prior to and subsequent to the Corteva Separation. The awards have the same terms and
conditions under the applicable plans and award agreements prior to the Separation transactions. The conversions of equity
awards did not have a material impact to the company’s consolidated financial statements.
On June 1, 2019 (“Adoption Date”), in connection with the Separation, the Omnibus Incentive Plan (the "OIP") became
effective. Under the OIP, the company may grant incentive awards, including stock options (both “incentive stock options” and
nonqualified stock options), share appreciation rights, restricted shares, restricted stock units, other share-based awards and
cash awards, to its and its subsidiaries’ eligible employees, non-employee directors, independent contractors and consultants
following the Separation until the tenth anniversary of the Adoption Date, subject to an aggregate limit and annual individual
limits. Under the OIP, the maximum number of shares reserved for the grant or settlement of awards is 20 million shares,
excluding shares underlying certain exempt awards, such as the awards converted to Corteva-denominated awards pursuant to
the Separation. At December 31, 2023, approximately 10 million shares were authorized for future grants under the OIP. The
company generally satisfies stock option exercises and the vesting of RSUs and PSUs with newly issued shares of Corteva
common stock, although RSU awards granted under Historical Dow plans in certain countries are settled in cash.
The compensation committee determines the long-term incentive mix, including stock options, RSUs and PSUs and may
authorize new grants annually. The company estimates expected forfeitures.
The total stock-based compensation cost included in income (loss) from continuing operations before income taxes within the
Consolidated Statement of Operations was $54 million, $55 million, and $79 million for the years ended December 31, 2023,
2022 and 2021, respectively. The income tax benefits related to stock-based compensation arrangements were $(10) million,
$(10) million, and $(15) million for the years ended December 31, 2023, 2022 and 2021, respectively.
Stock Options
The exercise price of shares subject to option is equal to the market price of the company's common stock on the date of grant.
All options vest serially over a period of three years. Stock option awards granted under the OIP between June 2019 and 2023
expire 10 years after the grant date. Stock option awards granted under the EIP (previous plan) between 2016 and May 2019
expire 10 years after the grant date. Stock option awards granted under the Historical Dow plans subsequent to 2013 expire 10
years after the grant date.
To measure the fair value of the awards on the date of grant, the company used the Black-Scholes option pricing model and the
assumptions set forth in the below table. The weighted-average grant-date fair value of options granted for the years ended
December 31, 2023, 2022 and 2021 was $21.42, $14.12 and $11.77, respectively.
F-58
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Weighted-Average Assumptions
Dividend yield0.96
Expected volatility
Risk-free interest rate
Expected life of stock options granted during period
(years)
For the Year ended December 31,
2022
2023
2021
%1.09
31.07 %
4.1 %1.9
%
28.95 %29.44 %
%
6.0
6.0
1.14 %
1.0 %
6.0
The company determined the dividend yield by dividing the annualized dividend on Corteva’s Common Stock by the option
exercise price. A historical daily measurement of volatility is determined based on the expected life of the option granted. For
the years ended December 31, 2023, 2022 and 2021, the measurement of volatility is based on the average volatility of eight of
Corteva's peer companies. Corteva's peer volatility is based on the historical volatility of each business respectively. The risk-
free interest rate is determined by reference to the yield on an outstanding U.S. Treasury note with a term equal to the expected
life of the option granted. Expected life is determined by utilizing the simplified method for estimating expected term.
The following table summarizes stock option activity for year ended December 31, 2023:
Stock Options
For the Year Ended December 31, 2023
Outstanding at January 1, 2023
Granted
Exercised
Forfeited/Expired
Outstanding at December 31, 2023
Exercisable at December 31, 2023
Number of
Shares
(in thousands)
Weighted
Average
Exercise Price
(per share)
4,225 $
298
(547)
(60)
3,916 $
3,255 $
39.13
62.29
33.81
39.86
41.61
38.91
Weighted
Average
Remaining
Contractual
Term (in years)
Aggregate
Intrinsic Value
(in thousands)
5.37 $
82,917
4.99 $
4.32 $
30,060
29,735
The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between the closing
stock price on the last trading day of the period ended December 31, 2023 and the exercise price, multiplied by the number of
in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money
options at period end. The total intrinsic value of options exercised for the years ended December 31, 2023, 2022 and 2021
were $14 million, $43 million, and $43 million, respectively. The company recognized tax benefits from options exercised for
the years ended December 31, 2023, 2022 and 2021 of $(3) million, $(8) million and $(8) million, respectively.
As of December 31, 2023, $6 million of total unrecognized pre-tax compensation expense related to nonvested stock options is
expected to be recognized over a weighted-average period of about 1.1 years.
Restricted Stock Units and Performance Share Units
RSUs granted serially vest over 3 years. Upon vesting, these RSUs convert one-for-one to Corteva Common Stock. A
retirement-eligible employee retains any granted awards upon retirement for one year provided the employee has rendered at
least six months of service following the grant date. Additional RSUs are also granted periodically to key senior management
employees. These RSUs generally vest over periods ranging from 3 years to 5 years. The fair value of all stock-settled RSUs is
based upon the market price of the underlying common stock as of the grant date.
The company grants PSUs to senior leadership. In 2023, there were 284,174 PSUs granted. Vesting for PSUs granted in 2023
and 2022 is partially based on the realization of the Company’s improvement of its Return on Net Assets (“RONA”) and
Operating Earnings Per Share ("EPS") during the Performance Period. Vesting for PSUs granted in 2021 is partially based on
the realization of the Company’s improvement of its Return on Invested Capital (“ROIC”) and Operating EPS during the
Performance Period. Performance and payouts are determined independently for each metric. The actual award, delivered in
Corteva Common Stock, can range from zero percent to 200 percent of the original grant. The weighted-average grant date fair
value of the PSUs granted in 2023 of $62.29 was based upon the market price of the underlying common stock as of the grant
date.
F-59
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Nonvested awards of RSUs and PSUs are shown below.
RSUs & PSUs
Nonvested at January 1, 2023
Granted
Vested
Forfeited
Nonvested at December 31, 2023
For the Year Ended December 31, 2023
Number of Shares
(in thousands)
Weighted Average Grant
Date Fair Value
(per share)
3,955 $
1,309
(1,501)
(267)
3,496 $
43.56
62.22
38.48
39.36
53.05
The total fair value of stock units vested for the years ended December 31, 2023, 2022 and 2021 was $58 million, $88 million
and $56 million, respectively. The weighted-average grant-date fair value of stock units granted for the years ended December
31, 2023, 2022 and 2021 was $62.22, $51.99 and $45.30, respectively.
As of December 31, 2023, $60 million of total unrecognized pre-tax compensation expense related to RSUs and PSUs is
expected to be recognized over a weighted average period of 1.14 years.
NOTE 20 - FINANCIAL INSTRUMENTS
At December 31, 2023 and 2022, the company had $1,746 million and $2,296 million, respectively, of held-to-maturity
securities (primarily time deposits and money market funds) classified as cash equivalents in the Consolidated Balance Sheets,
as these securities had maturities of three months or less at the time of purchase; $98 million and $124 million at December 31,
2023 and 2022, respectively, of held-to-maturity securities (primarily time deposits and foreign government bonds) classified as
marketable securities in the Consolidated Balance Sheets, as these securities had maturities of more than three months to less
than one year at the time of purchase; and $55 million and $27 million at December 31, 2023 and 2022, respectively, of held-to-
maturity securities (primarily foreign government bonds) classified as marketable securities and included in other assets in the
Consolidated Balance Sheets, as these securities had maturities of more than one year at the time of purchase. The company’s
investments in held-to-maturity securities are held at amortized cost, which approximates fair value. The company’s held-to-
maturity securities relating to investments in foreign government bonds at December 31, 2023 and available-for-sale securities
sold during the year ended December 31, 2021 are discussed further in the “Debt Securities” section.
Derivative Instruments
Objectives and Strategies for Holding Derivative Instruments
In the ordinary course of business, the company enters into contractual arrangements (derivatives) to reduce its exposure to
foreign currency and commodity price risks. The company has established a variety of derivative programs to be utilized for
financial risk management. These programs reflect varying levels of exposure coverage and time horizons based on an
assessment of risk.
Derivative programs have procedures and controls and are approved by the Corporate Financial Risk Management Committee,
consistent with the company's financial risk management policies and guidelines. Derivative instruments used are forwards,
options, futures and swaps. The company has not designated any non-derivatives as hedging instruments.
The company's financial risk management procedures also address counterparty credit approval, limits and routine exposure
monitoring and reporting. The counterparties to these contractual arrangements are major financial institutions and major
commodity exchanges, and multinational grain exporters. The company is exposed to credit
losses in the event of
nonperformance by these counterparties. The company utilizes collateral support annex agreements with certain counterparties
to limit its exposure to credit losses. The company anticipates performance by counterparties to these contracts and therefore no
material loss is expected. Market and counterparty credit risks associated with these instruments are regularly reported to
management.
F-60
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
The aggregate notional amounts for the company's derivative instruments that are designated and not designated as hedging
instruments was a net buy (sell) position of $(1,600) million and $2,559 million at December 31, 2023 and 2022, respectively.
Foreign Currency Risk
The company's objective in managing exposure to foreign currency fluctuations is to reduce earnings and cash flow volatility
associated with foreign currency rate changes and to mitigate the exposure of certain investments in foreign subsidiaries against
changes in the Euro/USD exchange rate. Accordingly, the company enters into various contracts that change in value as foreign
exchange rates change to protect the value of its existing foreign currency-denominated assets, liabilities, commitments,
investments and cash flows.
The company uses foreign currency exchange contracts to offset its net exposures, by currency, related to the foreign currency
denominated monetary assets and liabilities of its operations. The primary business objective of this hedging program is to
maintain an approximately balanced position in foreign currencies so that exchange gains and losses resulting from exchange
rate changes, after related tax effects, are minimized. The company also uses foreign currency exchange contracts to offset a
portion of the company's exposure to certain forecasted transactions as well as the translation of foreign currency-denominated
earnings. The company also uses commodity contracts to offset risks associated with foreign currency devaluation in certain
countries.
Commodity Price Risk
Commodity price risk management programs serve to reduce exposure to price fluctuations on purchases of inventory such as
corn and soybeans. The company enters into over-the-counter and exchange-traded derivative commodity instruments to hedge
the commodity price risk associated with agricultural commodity exposures.
Derivatives Designated as Cash Flow Hedges
Commodity Contracts
The company enters into over-the-counter and exchange-traded derivative commodity instruments, including options, futures
and swaps, to hedge the commodity price risk associated with agriculture commodity exposures.
While each risk management program has a different time maturity period, most programs currently do not extend beyond the
next two years. Cash flow hedge results are reclassified into earnings during the same period in which the related exposure
impacts earnings. Reclassifications are made sooner if it appears that a forecasted transaction is probable of not occurring.
The following table summarizes the after-tax effect of commodity contract cash flow hedges on accumulated other
comprehensive income (loss):
(In millions)
Beginning balance$
Additions and revaluations of derivatives designated as cash flow hedges
Clearance of hedge results to earnings
Ending balance$
For the Year Ended December 31,
2023
2022
2021
55 $
(87)
(39)
(71) $
47 $
102
(94)
55 $
(16)
92
(29)
47
At December 31, 2023, an after-tax net loss of $58 million is expected to be reclassified from accumulated other comprehensive
income (loss) into earnings over the next twelve months.
Foreign Currency Contracts
The company enters into forward contracts to hedge the foreign currency risk associated with forecasted transactions within
certain foreign subsidiaries.
While each risk management program has a different time maturity period, most programs currently do not extend beyond the
next two years. Cash flow hedge results are reclassified into earnings during the same period in which the related exposure
impacts earnings. Reclassifications are made sooner if it appears that a forecasted transaction is not probable of occurring.
F-61
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
The following table summarizes the after-tax effect of foreign currency cash flow hedges on accumulated other comprehensive
income (loss):
(In millions)
Beginning balance$
10 $
32 $
Additions and revaluations of derivatives designated as cash flow hedges
Clearance of hedges results to earnings
Ending balance$
For the Year Ended December 31,
2023
2022
2021
(36)
27
1 $
(61)
39
10 $
(17)
24
25
32
At December 31, 2023, an after-tax net gain of $1 million is expected to be reclassified from accumulated other comprehensive
income (loss) into earnings over the next twelve months.
Derivatives Designated as Net Investment Hedges
Foreign Currency Contracts
The company had designated €450 million of forward contracts to exchange EUR as net investment hedges. The purpose of
these forward contracts is to mitigate foreign exchange exposure related to a portion of the company’s Euro net investments in
certain foreign subsidiaries against changes in Euro/USD exchange rates. These hedges expired and were settled in March
2023.
Prior to maturity, the company had elected to apply the spot method in testing for effectiveness of the hedging relationship.
Derivatives not Designated in Hedging Relationships
Foreign Currency Contracts
The company uses foreign exchange contracts to reduce its net exposure, by currency, related to foreign currency-denominated
monetary assets and liabilities of its operations so that exchange gains and losses resulting from exchange rate changes are
minimized. The netting of such exposures precludes the use of hedge accounting; however, the required revaluation of the
forward contracts and the associated foreign currency-denominated monetary assets and liabilities intends to achieve a minimal
earnings impact, after taxes. The company also uses foreign currency exchange contracts to offset a portion of the company’s
exposure to the translation of certain foreign currency-denominated earnings so that gains and losses on the contracts offset
changes in the USD value of the related foreign currency-denominated earnings over the relevant aggregate period.
Commodity Contracts
The company utilizes options, futures and swaps that are not designated as hedging instruments to reduce exposure to
commodity price fluctuations on purchases of inventory such as corn and soybeans. The company uses commodity contracts to
offset a portion of the company’s exposure to commodity price fluctuations so that gains and losses on the contracts offset
changes in the commodity price over the relevant aggregate period. The company uses forward agreements, with durations less
than one year, to buy and sell USD priced commodities in order to reduce its exposure to currency devaluation for a portion of
its local currency cash balances. Counterparties to the forward sales agreements are multinational grain exporters and subject to
the company’s financial risk management procedures.
Fair Value of Derivative Instruments
Asset and liability derivatives subject to an enforceable master netting arrangement with the same counterparty are presented on
a net basis in the Consolidated Balance Sheets.
F-62
The presentation of the company's derivative assets and liabilities is as follows:
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Balance Sheet Location
Gross
December 31, 2023
Counterparty
and Cash
Collateral
Netting1
Net Amounts Included in
the Consolidated Balance
Sheet
(In millions)
Asset derivatives:
Derivatives designated as
hedging instruments:
Foreign currency contracts
Commodity Contracts
Other current assets
Other current assets
Derivatives not designated as
hedging instruments:
Foreign currency contracts
Commodity Contracts
Other current assets
Other current assets
Total asset derivatives
Liability derivatives:
Derivatives designated as
hedging instruments:
$
— $
3
83
2
$
88 $
Foreign currency contracts
Commodity Contracts
Accrued and other current liabilities $
Accrued and other current liabilities
23 $
6
Derivatives not designated as
hedging instruments:
Foreign currency contracts
Commodity contractsAc
Accrued and other current liabilities
crued and other current liabilities
38
8
Total liability derivatives
$
75 $
— $
—
(33)
—
(33) $
— $
—
(33)
—
(33) $
—
3
50
2
55
23
6
5
8
42
Balance Sheet Location
Gross
December 31, 2022
Counterparty
and Cash
Collateral
Netting1
Net Amounts Included in
the Consolidated Balance
Sheet
(In millions)
Asset derivatives:
Derivatives designated as
hedging instruments:
Foreign currency contracts
Commodity Contracts
Other current assets
Other current assets
Derivatives not designated as
hedging instruments:
Foreign currency contracts
Other current assets
Total asset derivatives
$
$
41 $
4
51
96 $
Liability derivatives:
Derivatives designated as
hedging instruments:
Foreign currency contracts
Commodity contracts
Accrued and other current liabilities $
Accrued and other current liabilities
9 $
3
Derivatives not designated as
hedging instruments:
Foreign currency contracts
Accrued and other current liabilities
Total liability derivatives
58
70 $
$
— $
—
(40)
(40) $
— $
—
(40)
(40) $
41
4
11
56
9
3
18
30
1. Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting
arrangements between the company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
F-63
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Effect of Derivative Instruments
(In millions)
Derivatives designated as hedging instruments:
Net investment hedges:
Foreign currency contracts$
Cash flow hedges:
Foreign currency contracts
Commodity contracts
Total derivatives designated as hedging instruments$
1. OCI is defined as other comprehensive income (loss).
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign currency contracts2
Commodity contracts2
Total derivatives designated as hedging instruments
Derivatives not designated as hedging instruments:
Foreign currency contracts3
Foreign currency contracts2
Commodity contracts2,4
Commodity contracts3
Total derivatives not designated as hedging instruments
Total derivatives
Amount of Gain (Loss) Recognized in OCI1 - Pre-Tax
For the Year Ended December 31,
2022
2023
2021
— $
28 $
(54)
(123)
(177) $
(90)
130
68 $
37
27
129
193
Amount of Gain (Loss) Recognized in Income - Pre-Tax1
For the Year Ended December 31,
2022
2023
2021
$
$
(41) $
49
8
(28)
(77)
(20)
2
(123)
(115) $
(59) $
122
63
(12)
(6)
(21)
—
(39)
24 $
(29)
42
13
18
(14)
(18)
—
(14)
(1)
1. For cash flow hedges, this represents the portion of the gain (loss) reclassified from accumulated OCI into income during the period.
2. Recorded in cost of goods sold, in the Consolidated Statement of Operations.
3. Recognized in other income (expense) - net, in the Consolidated Statement of Operations. Note that the net loss from foreign currency contracts was partially
offset by the related gain on the foreign currency-denominated monetary assets and liabilities of the company's operations. See Note 7 - Supplementary
Information, to the Consolidated Financial Statements for additional information.
4. The net gain (loss) relating to commodity contracts that are not designated as hedging instruments that were recorded in cost of goods sold, in the
Consolidated Statement of Operations, are mostly offset by the related net gain (loss) on third-party grower contracts denominated as liabilities.
Debt Securities
The company’s debt securities include foreign government bonds classified as held-to-maturity securities at December 31, 2023
and 2022. The company’s investments in held-to-maturity securities are held at amortized cost, which approximates fair value,
and are held by certain foreign subsidiaries in which the USD is the functional currency. The company's investments in debt
securities at December 31, 2023 with a contractual maturity within one year and between one to five years was $85 million and
$55 million, respectively.
During 2021, the company sold its U.S. treasuries classified as available-for-sale securities. The estimated fair value of the
available-for-sale securities that were sold in 2021 was determined using Level 1 inputs within the fair value hierarchy. Level 1
measurements were based on quoted market prices in active markets for identical assets and liabilities. The available-for-sale
securities that were sold in 2021 were held by certain foreign subsidiaries in which the USD is not the functional currency. The
fluctuations in foreign exchange were initially recorded in accumulated other comprehensive income (loss) within the
Consolidated Statements of Equity and subsequently reclassified to earnings when sold. The gains and losses on these securities
offset a portion of the foreign exchange fluctuations in earnings for the company.
F-64
The following table provides the investing results from available-for-sale securities for the year ended December 31, 2021:
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Investing ResultsFo
(In millions)
Proceeds from sales of available-for-sale securities
Gross realized losses$
NOTE 21 - FAIR VALUE MEASUREMENTS
r the Year Ended December 31,
2021
$
226
(7)
The table below summarizes the basis used to measure certain assets and liabilities relating to marketable securities and
derivative assets and liabilities at fair value on a recurring basis.
Significant Other Observable Inputs
(In millions)
Assets at fair value:
Marketable securities
Derivatives relating to:1
Foreign currency
Commodity Contracts
Total assets at fair value$
Liabilities at fair value:
Derivatives relating to:1
Foreign currency
Commodity contracts
Total liabilities at fair value$
December 31, 2023
Level 2
December 31, 2022
Level 2
$
98 $
83
5
186 $
61
14
75 $
124
92
4
220
67
3
70
1. See Note 20 - Financial Instruments, to the Consolidated Financial Statements, for the classification of derivatives in the Consolidated Balance Sheets.
For assets and liabilities classified as Level 1 measurements (measured using quoted prices in active markets), total fair value is
either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on
which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without
consideration of transaction costs.
For assets and liabilities classified as Level 2 measurements, where the security is frequently traded in less active markets, fair
value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the
price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability, or by
using observable market data points of similar, more liquid securities to imply the price. For time deposits classified as held-to-
maturity investments and reported at amortized cost, fair value is based on an observable interest rate for similar securities.
Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance and quality
checks.
For derivative assets and liabilities, standard industry models are used to calculate the fair value of the various financial
instruments based on significant observable market inputs, such as foreign exchange rates, commodity prices, swap rates and
implied volatilities obtained from various market sources. Market inputs are obtained from well-established and recognized
vendors of market data and subjected to tolerance/quality checks.
For all other assets and liabilities for which observable inputs are used, fair value is derived through the use of fair value
models, such as a discounted cash flow model or other standard pricing models. See Note 20 - Financial Instruments, to the
Consolidated Financial Statements, for further information on the types of instruments used by the company for risk
management.
There were no transfers between Levels 1 and 2 during the years ended December 31, 2023 and 2022.
For assets classified as Level 3 measurements, the fair value is based on significant unobservable inputs including assumptions
where there is little, if any, market activity. The fair value of the company’s interests held in trade receivable conduits is
determined by calculating the expected amount of cash to be received using the key input of anticipated credit losses in the
F-65
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
portfolio of receivables sold that have not yet been collected. Given the short-term nature of the underlying receivables,
discount rate and prepayments are not factors in determining the fair value of the interests.
Fair Value Measurements on a Nonrecurring Basis
As part of the Crop Protection Operations Strategy Restructuring Program, the company plans to exit its production activities at
its site in Pittsburg, California, as well as cease operations in select manufacturing lines at other locations. As a result, the
company recognized a pre-tax non-cash impairment charge of $152 million to restructuring and asset related charges – net, in
the Consolidated Statement of Operations, consisting of a charge of $92 million and $60 million relating to operating lease
assets and property, plant and equipment, respectively, which were classified as Level 3 measurements using unobservable
inputs.
See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements, for additional
information.
NOTE 22 - GEOGRAPHIC INFORMATION
Sales are attributed to geographic areas based on customer location; long-lived assets are attributed to geographic areas based
on asset location.
(In millions)
United States
Canada
EMEA
Latin America1
Asia Pacific
Total
Net Sales
For the Year Ended December 31,
2022
7,783 $
7,553 $
2021
2023
807
3,367
3,906
1,363
17,226 $
741
3,256
4,445
1,460
17,455 $
$
$
1. Net sales for Brazil for the years ended December 31, 2023, 2022 and 2021 were $2,523 million, $3,137 million and $2,315 million, respectively.
(In millions)
United States
Canada
EMEA
Latin America
Asia Pacific
Total
Net Property
As of December 31,
2022
2023
2021
$
$
2,922 $
119
548
608
90
4,287 $
2,992 $
116
538
506
102
4,254 $
6,782
754
3,123
3,545
1,451
15,655
3,051
114
566
468
130
4,329
F-66
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
NOTE 23 - SEGMENT INFORMATION
Corteva’s reportable segments reflects the manner in which its chief operating decision maker ("CODM") allocates resources
and assesses performance, which is at the operating segment level (seed and crop protection). For purposes of allocating
resources to the segments and assessing segment performance, segment operating EBITDA is the primary measure used by
Corteva’s CODM. The company defines segment operating EBITDA as earnings (loss) (i.e., income (loss) from continuing
operations before income taxes) before interest, depreciation, amortization, corporate expenses, non-operating (benefits) costs,
foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency
derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items. Non-operating
(benefits) costs consists of non-operating pension and other post-employment benefit
tax
indemnification adjustments, environmental remediation and legal costs associated with legacy EIDP businesses and sites, and
the 2021 officer indemnification payment. 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. Net unrealized gain or loss from mark-to-market activity for certain foreign
currency derivative instruments that do not qualify for hedge accounting represents the non-cash net gain (loss) from changes in
fair value of certain undesignated foreign currency derivative contracts. Upon settlement, which is within the same calendar
year of execution of the contract, the realized gain (loss) from the changes in fair value of the non-qualified foreign currency
derivative contracts will be reported in the respective segment results to reflect the economic effects of the foreign currency
derivative contracts without the resulting unrealized mark to fair value volatility.
(OPEB) credits (costs),
Corporate Profile
The company conducts its global operations through the following reportable segments:
Seed
The company’s seed segment is a global leader in developing and supplying advanced germplasm and traits that produce
optimum yield for farms around the world. The segment is a leader in many of the company’s key seed markets, including
North America corn and soybeans, Europe corn and sunflower, as well as Brazil, India, South Africa and Argentina corn. The
segment offers trait technologies that improve resistance to weather, disease, insects and enhance food and nutritional
characteristics, herbicides used to control weeds, and digital solutions that assist farmer decision-making to help maximize yield
and profitability.
Crop Protection
The crop protection segment serves the global agricultural input industry with products that protect against weeds, insects and
other pests, and disease, and that improve overall crop health both above and below ground via nitrogen management and seed-
applied technologies. The segment offers crop protection solutions and digital solutions that provide farmers the tools they need
to improve productivity and profitability, and help keep fields free of weeds, insects and diseases. The segment is a leader in
global herbicides, insecticides, nitrogen stabilizers, pasture and range management herbicides and biologicals.
F-67
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
$
(In millions)
As of and for the Year Ended December 31, 2023
Net sales
Segment operating EBITDA
Depreciation and amortization
Segment assets
Investments in nonconsolidated affiliates
Purchases of property, plant and equipment
As of and for the Year Ended December 31, 2022
Net sales
Segment operating EBITDA
Depreciation and amortization
Segment assets
Investments in nonconsolidated affiliates
Purchases of property, plant and equipment
As of and for the Year Ended December 31, 2021
Net sales
Segment operating EBITDA
Depreciation and amortization
Segment assets
Investments in nonconsolidated affiliates
Purchase of property, plant and equipment
Seed
Crop Protection
Total
9,472 $
2,117
814
22,732
39
332
8,979
1,656
839
22,952
35
225
8,402
1,512
866
23,270
29
237
7,754 $
1,374
397
15,004
76
263
8,476
1,684
384
14,097
67
380
7,253
1,202
377
12,428
47
336
17,226
3,491
1,211
37,736
115
595
17,455
3,340
1,223
37,049
102
605
15,655
2,714
1,243
35,698
76
573
Reconciliation to Consolidated Financial Statements
Income (loss) from continuing operations after income taxes to
segment operating EBITDAFo
(In millions)
Income (loss) from continuing operations after income taxes
Provision for (benefit from) income taxes on continuing operations
Income (loss) from continuing operations before income taxes
$
Depreciation and amortization
Interest income
Interest expense
Exchange (gains) losses - net
Non-operating (benefits) costs - net1
Mark-to-market (gains) losses on certain foreign currency contracts
not designated as hedges
Significant items
Corporate expenses
r the Year Ended December 31,
2023
2022
2021
941 $
152
1,093
1,211
(283)
233
397
151
—
579
110
1,216 $
210
1,426
1,223
(124)
79
229
(111)
—
502
116
1,822
524
2,346
1,243
(77)
30
54
(1,256)
—
236
138
2,714
Segment operating EBITDA
$
3,491 $
3,340 $
1. The year ended December 31, 2021 includes non-cash benefits related to the 2020 OPEB Plan Amendments. Refer to Note 18 - Pension Plans and Other
Post-Employment Benefits, to the Consolidated Financial Statements, for additional information.
Segment assets to total assets (in millions)
December 31, 2023
December 31, 2022
Total segment assets
Corporate assets
Total assets
$
$
37,736 $
5,260
42,996 $
37,049
5,569
42,618
F-68
Corteva, Inc.
Notes to the Consolidated Financial Statements (continued)
Significant Pre-tax (Charges) Benefits Not Included in Segment Operating EBITDA
The years ended December 31, 2023, 2022 and 2021, respectively, included the following significant pre-tax (charges) benefits
which are excluded from segment operating EBITDA:
$
(In millions)
For the Year Ended December 31, 2023
Restructuring and asset related charges - net 1
Estimated settlement expense 2
Inventory write-offs 3
Spare parts write-off 4
Gain (loss) on sale of business, assets and equity investments 3
Employee Retention Credit
AltEn facility remediation charges
Seed sale associated with Russia Exit 3,5
Acquisition-related costs 6
Total$
Seed
Crop Protection Corporate
Total
(86) $
—
(7)
—
4
—
(10)
18
—
(81) $
(228) $
(204)
—
(12)
10
3
—
—
(45)
(476) $
(22) $
—
—
—
—
—
—
—
—
(22) $
(336)
(204)
(7)
(12)
14
3
(10)
18
(45)
(579)
(In millions)
Seed
Crop Protection Corporate
Total
For the Year Ended December 31, 2022
Restructuring and asset related charges - net 1
Estimated settlement expense 2
Inventory write-offs 3
Gain (loss) on sale of business, assets and equity investments 3
Settlement costs associated with Russia Exit 3
Employee Retention Credit
AltEn facility remediation charges
Seed sale associated with Russia Exit 3,5
Total$
(In millions)
For the Year Ended December 31, 2021
Restructuring and asset related charges - net 1
Equity securities mark-to-market gain (loss)
Employee Retention Credit
Contract termination
Total$
$
(228) $
—
(37) $
(87)
(98) $
—
(33)
(5)
(8)
6
(33)
3
—
15
—
3
—
—
—
—
—
—
—
—
(363)
(87)
(33)
10
(8)
9
(33)
3
(298) $
(106) $
(98) $
(502)
Seed
Crop Protection Corporate
Total
$
(152) $
47
37
(30)
(98) $
(59) $
—
23
(24)
(60) $
(78) $
—
—
—
(78) $
(289)
47
60
(54)
(236)
1. Includes restructuring plans and asset related charges as well as accelerated prepaid amortization expense. See Note 6 - Restructuring and Asset Related
Charges - Net, to the Consolidated Financial Statements, for additional information.
2. Consists of estimated Lorsban® related charges.
3. Incremental gains (losses) associated with activities related to the 2022 Restructuring Actions.
4. Incremental loss associated with activities related to the Crop Protection Operations Strategy Restructuring Program.
5. Includes a benefit of $18 million and $3 million for the years ended December 31, 2023 and 2022, respectively, relating to the sale of seeds already under
production in Russia when the decision to exit the country was made and that the Company was contractually required to purchase. It consists of $71 million
and $8 million of net sales and $53 million and $5 million of cost of goods sold for the years ended December 31, 2023 and 2022, respectively.
6. Relates to acquisition-related costs, including transaction and third-party integration costs associated with the completed acquisitions of Stoller and Symborg
as well as the recognition of the inventory fair value step-up. See Note 4 - Business Combinations, to the Consolidated Financial Statements, for additional
information.
F-69
EIDP, Inc.
Index to the Consolidated Financial Statements
Management's Reports on Responsibility for Financial Statements and Internal Control over
Financial ReportingF-71
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)F-72
Consolidated Financial Statements:
Consolidated Statements of Operations for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and
2021
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Equity for the years ended December 31, 2023, 2022, and 2021
Notes to the Consolidated Financial Statements
Page(s)
F-74
F-75
F-76
F-77
F-78
F-79
F-70
Management's Reports on Responsibility for Financial Statements and
Internal Control over Financial Reporting
Management's Report on Responsibility for Financial Statements
Management is responsible for the Consolidated Financial Statements and the other financial information contained in this
Annual Report on Form 10-K. The financial statements have been prepared in accordance with generally accepted accounting
principles in the United States of America ("GAAP") and are considered by management to present fairly EIDP's financial
position, results of operations and cash flows. The financial statements include some amounts that are based on management's
best estimates and judgments. The financial statements have been audited by EIDP's independent registered public accounting
firm, PricewaterhouseCoopers LLP. The purpose of their audit is to express an opinion as to whether the Consolidated Financial
Statements included in this Annual Report on Form 10-K present fairly, in all material respects, EIDP's financial position,
results of operations and cash flows in conformity with GAAP. Their report is presented on the following pages.
Management's Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting as
defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. EIDP's internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP. EIDP's internal control over financial
reporting includes those policies and procedures that:
i.
ii.
iii.
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of EIDP;
provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and that receipts and expenditures of EIDP
are being made only in accordance with authorization of management and directors of EIDP; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or
disposition of EIDP's assets that could have a material effect on the financial statements.
Internal control over financial reporting has certain inherent limitations which may not prevent or detect misstatements. In
addition, changes in conditions and business practices may cause variation in the effectiveness of internal controls.
Management assessed the effectiveness of EIDP's internal control over financial reporting as of December 31, 2023, based on
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-
Integrated Framework (2013). Based on its assessment and those criteria, management concluded that EIDP maintained
effective internal control over financial reporting as of December 31, 2023. Management’s assessment of the effectiveness of
EIDP’s internal control over financial reporting as of December 31, 2023 excluded the Stoller and Symborg acquisitions, which
were completed in March 2023. Total assets, excluding goodwill and other intangible assets, and net sales of Stoller and
Symborg represent approximately 1 percent and 2 percent, respectively, of EIDP’s consolidated assets and net sales, as of and
for the year ended December 31, 2023. This exclusion is in accordance with the guidelines established by the Securities and
Exchange Commission.
PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the effectiveness of EIDP's
internal control over financial reporting as of December 31, 2023, as stated in their report, which is presented on the following
pages.
Charles V. Magro
Chief Executive Officer and Director
David J. Anderson
Executive Vice President,
Chief Financial Officer and Director
February 8, 2024
F-71
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of EIDP, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of EIDP, Inc. and its subsidiaries (the “Company”) as of
December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income (loss), equity and
cash flows for each of the three years in the period ended December 31, 2023, including the related notes and schedule of
valuation and qualifying accounts for each of the three years in the period ended December 31, 2023 appearing under Item 15
(collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over
financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express
opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
As described in Management’s Report on Internal Control over Financial Reporting, management has excluded the Stoller
Group, Inc. (“Stoller”) and Quorum Vital Investment, S.L. and its affiliates (“Symborg”) businesses from its assessment of
internal control over financial reporting as of December 31, 2023 because they were acquired by the Company in purchase
business combinations during 2023. We have also excluded the Stoller and Symborg businesses from our audit of internal
control over financial reporting. These businesses, each of which is wholly owned, comprised, in the aggregate, total assets,
excluding goodwill and other intangible assets, and total net sales excluded from management’s assessment and our audit of
internal control over financial reporting of approximately 1 percent and 2 percent, respectively, of the related consolidated
financial statement amounts as of and for the year ended December 31, 2023.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
F-72
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill (Seed Reporting Unit) Impairment Assessment
As described in Notes 2 and 13 to the Corteva, Inc. consolidated financial statements, the Company’s consolidated goodwill
balance was $10.6 billion as of December 31, 2023, and the goodwill associated with the seed reporting unit was $5.4 billion.
Management tests goodwill for impairment at the reporting unit level at least annually, or more frequently when events or
changes in circumstances indicate it is more likely than not that the fair value of a reporting unit has declined below its carrying
value. Management performs an annual goodwill impairment test in the fourth quarter. If management chooses not to complete
a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the
carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required. Management
performed quantitative testing on its seed reporting unit and determined that no goodwill impairment existed in 2023.
Management determined fair value for the seed reporting unit using a discounted cash flow model. Management’s significant
assumptions in this analysis included future cash flow projections, the weighted average cost of capital, the terminal growth
rate, and the tax rate.
The principal considerations for our determination that performing procedures relating to the seed reporting unit goodwill
impairment assessment is a critical audit matter are (i) the significant judgment by management when developing the fair value
of the seed reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and
evaluating management’s significant assumptions related to projected revenue, the weighted average cost of capital, and the
terminal value; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s goodwill impairment assessment, including controls over the valuation of the seed reporting unit. These
procedures also included, among others, (i) testing management’s process for developing the fair value estimate; (ii) evaluating
the appropriateness of the discounted cash flow model; (iii) testing the completeness, accuracy, and relevance of underlying
data used in the discounted cash flow model; and (iv) evaluating the reasonableness of significant assumptions used by
management related to projected revenue,
the weighted average cost of capital, and the terminal value. Evaluating
management’s assumptions related to projected revenue and the terminal value involved evaluating whether the assumptions
used by management were reasonable considering (i) the current and past performance of the reporting unit; (ii) the consistency
with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas
of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s
discounted cash flow model and the weighted average cost of capital and terminal value assumptions.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 8, 2024
We have served as the Company’s auditor since 1946.
F-73
EIDP, Inc.
Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
For the Year Ended December 31,
2022
2023
2021
Net sales$
15,655
17,455 $
17,226 $
Cost of goods sold
Research and development expense
Selling, general and administrative expenses
Amortization of intangibles
Restructuring and asset related charges - net
Other income (expense) - net
Interest expense
Income (loss) from continuing operations before income taxes
Provision for (benefit from) income taxes on continuing operations
Income (loss) from continuing operations after income taxes
Income (loss) from discontinued operations after income taxes
Net income (loss)
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to EIDP, Inc.
$
9,920
1,337
3,176
683
336
(448)
253
1,073
147
926
(194)
732
2
730 $
10,436
1,216
3,173
702
363
(60)
124
1,381
199
1,182
(58)
1,124
1
1,123 $
9,220
1,187
3,209
722
289
1,348
80
2,296
512
1,784
(53)
1,731
—
1,731
See Notes to the Consolidated Financial Statements beginning on page F-79.
F-74
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
EIDP, Inc.
Consolidated Financial Statements
(In millions)
Net income (loss)
Other comprehensive income (loss) - net of tax:
Cumulative translation adjustments
Adjustments to pension benefit plans
Adjustments to other benefit plans
Unrealized gain (loss) on investments
Derivative instruments
Total other comprehensive income (loss)
Comprehensive income (loss)
Comprehensive income (loss) attributable to
noncontrolling interests - net of tax
Comprehensive income (loss) attributable to EIDP, Inc.
$
For the Year Ended December 31,
2022
2023
2021
$
732 $
1,124 $
425
(190)
29
—
(135)
129
861
2
859 $
(340)
233
191
—
8
92
1,216
1
1,215 $
1,731
(573)
1,037
(621)
10
139
(8)
1,723
—
1,723
See Notes to the Consolidated Financial Statements beginning on page F-79.
F-75
CONSOLIDATED BALANCE SHEETS
EIDP, Inc.
Consolidated Financial Statements
(In millions, except share and per share amounts)
December 31, 2023 December 31, 2022
Assets
Current assets
Cash and cash equivalents$
Marketable securities
Accounts and notes receivable - net
Inventories
Other current assets
Total current assets
Investment in nonconsolidated affiliates
Property, plant and equipment
Less: Accumulated depreciation
Net property, plant and equipment
Goodwill
Other intangible assets
Deferred income taxes
Other assets
Total Assets
Current liabilities
Liabilities and Equity
Short-term borrowings and finance lease obligations
Accounts payable
Income taxes payable
Deferred revenue
Accrued and other current liabilities
Total current liabilities
Long-term debt
Long-term debt - Related party
Other noncurrent liabilities
Deferred income tax liabilities
Pension and other post-employment benefits
Other noncurrent obligations
Total noncurrent liabilities
Commitments and contingent liabilities
Stockholders’ equity
Preferred stock, without par value – cumulative; 23,000,000 shares authorized;
issued at December 31, 2023 and December 31, 2022:
$4.50 Series – 1,673,000 shares (callable at $120)
$3.50 Series – 700,000 shares (callable at $102)
Common stock, $0.30 par value; 1,800,000,000 shares authorized; 200
issued at December 31, 2023 and December 31, 2022
Additional paid-in capital
Retained earnings (accumulated deficit)
Accumulated other comprehensive income (loss)
Total EIDP, Inc. stockholders’ equity
Noncontrolling interests
Total equity
Total Liabilities and Equity
2,644 $
98
5,488
6,899
1,131
16,260
115
8,956
4,669
4,287
10,605
9,626
584
1,896
43,373 $
198 $
4,280
174
3,406
2,347
10,405
2,291
—
899
2,467
1,651
7,308
169
70
—
24,349
3,747
(2,677)
25,658
2
25,660
43,373 $
3,190
124
5,701
6,812
968
16,795
102
8,551
4,297
4,254
9,962
9,339
479
1,687
42,618
24
4,895
183
3,388
2,258
10,748
1,283
789
1,119
2,255
1,675
7,121
169
70
—
24,284
3,031
(2,806)
24,748
1
24,749
42,618
$
$
$
See Notes to the Consolidated Financial Statements beginning on page F-79.
F-76
CONSOLIDATED STATEMENTS OF CASH FLOWS
EIDP, Inc.
Consolidated Financial Statements
(In millions)
Operating activities
Net income (loss)
(Income) loss from discontinued operations after income taxes
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:
Depreciation and amortization
Provision for (benefit from) deferred income tax
Net periodic pension and OPEB (credits) costs
Pension and OPEB contributions
Net (gain) loss on sales of property, businesses, consolidated companies, and investments
Restructuring and asset related charges - net
Other net loss
Changes in assets and liabilities, net
Accounts and notes receivable
Inventories
Accounts payable
Deferred Revenue
Other assets and liabilities
Cash provided by (used for) operating activities - continuing operations
Cash provided by (used for) operating activities - discontinued operations
Cash provided by (used for) operating activities
Investing activities
Capital expenditures
Proceeds from sales of property, businesses, and consolidated companies - net of cash divested
Acquisitions of businesses - net of cash acquired
Escrow funding associated with acquisitions
Investments in and loans to nonconsolidated affiliates
Purchases of investments
Proceeds from sales and maturities of investments
Proceeds from settlement of net investment hedge
Other investing activities, net
Cash provided by (used for) investing activities
Financing activities
Net change in borrowings (less than 90 days)
Proceeds from related party debt
Payments on related party debt
Proceeds from debt
Payments on debt
Proceeds from exercise of stock options
Other financing activities, net
Cash provided by (used for) financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash equivalents
Increase (decrease) in cash, cash equivalents and restricted cash equivalents
Cash, cash equivalents and restricted cash equivalents at beginning of period
Cash, cash equivalents and restricted cash equivalents at end of period
Supplemental cash flow information
Cash paid during the period for
Interest, net of amounts capitalized1
Income taxes
$
$
For the Year Ended December 31,
2022
2023
2021
$
732 $
194
1,124 $
58
1,731
53
1,211
(438)
138
(149)
(22)
336
578
358
57
(663)
(11)
(913)
1,408
(40)
1,368
(595)
57
(1,456)
—
(32)
(148)
147
42
(2)
(1,987)
1,223
(288)
(142)
(182)
(18)
363
305
(993)
(1,715)
807
194
143
879
(40)
839
(605)
73
—
(36)
(12)
(344)
295
—
(3)
(632)
(6)
29
(818)
3,429
(2,309)
31
(54)
302
(143)
(460)
3,618
3,158 $
(13)
48
(1,422)
1,358
(1,140)
88
(66)
(1,147)
(278)
(1,218)
4,836
3,618 $
1,243
199
(1,292)
(247)
(21)
289
154
(113)
(422)
526
574
57
2,731
(42)
2,689
(573)
75
—
—
(4)
(204)
345
—
(1)
(362)
13
52
(1,349)
419
(421)
100
(42)
(1,228)
(136)
963
3,873
4,836
234 $
535
75 $
467
30
341
1. Reflects interest, net of amounts capitalized, paid to external parties. For information associated with interest paid on related party debt refer to EIDP's Note
2 - Related Party Transactions, of the EIDP Consolidated Financial Statements.
See Notes to the Consolidated Financial Statements beginning on page F-79.
F-77
CONSOLIDATED STATEMENTS OF EQUITY
EIDP, Inc.
Consolidated Financial Statements
Preferred
Stock
Common
Stock
$
239 $
Additional
Paid-in
Capital
"APIC"
— $ 24,049 $
Retained
Earnings
(Accum
Deficit)
(In millions)
Balance at January 1, 2021
Net income (loss)
Other comprehensive income (loss)
Share-based compensation
Preferred dividends ($4.50 Series - $4.50
per share, $3.50 Series - $3.50 per share)
Issuance of Corteva Stock
Other - net
Balance at December 31, 2021
Net income (loss)
Other comprehensive income (loss)
Share-based compensation
Preferred dividends ($4.50 Series - $4.50
per share, $3.50 Series - $3.50 per share)
Issuance of Corteva Stock
Other - net
Balance at December 31, 2022
Net income (loss)
Other comprehensive income (loss)
Share-based compensation
Preferred dividends ($4.50 Series - $4.50
per share, $3.50 Series - $3.50 per share)
Issuance of Corteva Stock
Other - net
Balance at December 31, 2023
59
100
(12)
$
239 $
— $ 24,196 $
12
88
(12)
$
239 $
— $ 24,284 $
28
40
(3)
$
239 $
— $ 24,349 $
Accumulat
ed Other
Comp
Income
(Loss)
Non-
controllin
g Interests
Total
Equity
203 $
(2,890) $
(8)
(2,898) $
92
(2,806) $
129
1,731
(3)
(10)
1
1,922 $
1,123
(2)
(10)
(2)
3,031 $
730
(2)
(10)
(2)
3,747 $
(2,677) $
— $ 21,601
1,731
(8)
56
(10)
100
(11)
— $ 23,459
1,124
92
10
1
(10)
88
(14)
1 $ 24,749
732
2
129
26
(10)
40
(1)
(6)
2 $ 25,660
See Notes to the Consolidated Financial Statements beginning on page F-79.
F-78
EIDP, Inc.
Notes to the Consolidated Financial Statements
Table of Contents
Note
1
2
3
4
Basis of Presentation
Related Party Transactions
Income Taxes
Segment InformationF-83
Page
F-81
F-82
F-82
F-79
NOTE 1 - BASIS OF PRESENTATION
EIDP, Inc.
Notes to the Consolidated Financial Statements (continued)
Corteva, Inc. owns 100% of the outstanding common stock of EIDP. EIDP is a subsidiary of Corteva, Inc. and continues to be a
reporting company, subject to the requirements of the Exchange Act. The primary differences between Corteva, Inc. and EIDP
are outlined below:
•
•
•
Preferred Stock - EIDP has preferred stock outstanding to third parties which is accounted for as a noncontrolling
interest at the Corteva, Inc. level. Each share of EIDP Preferred Stock - $4.50 Series and EIDP Preferred Stock -
$3.50 Series issued and outstanding at the effective date of the Corteva Distribution remains issued and outstanding as
to EIDP and was unaffected by the Corteva Distribution.
Related Party Loan - EIDP engaged in a series of debt redemptions during the second quarter of 2019 that were
partially funded through an intercompany loan from Corteva, Inc. This was eliminated in consolidation at the Corteva,
Inc. level but remains on EIDP's financial statements at the standalone level (including the associated interest).
Capital Structure - At December 31, 2023, Corteva, Inc.'s capital structure consists of 701,260,000 issued shares of
common stock, par value $0.01 per share.
The accompanying footnotes relate to EIDP only, and not to Corteva, Inc., and are presented to show differences between EIDP
and Corteva, Inc.
For the footnotes listed below, refer to the footnotes from the Corteva 10-K:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Note 1 - Background and Basis of Presentation - refer to page F-11 of the Corteva, Inc. Consolidated Financial
Statements
Note 2 - Summary of Significant Accounting Policies - refer to page F-12 of the Corteva, Inc. Consolidated Financial
Statements
Note 3 - Recent Accounting Guidance - refer to page F-17 of the Corteva, Inc. Consolidated Financial Statements
Note 4 - Business Combinations - refer to page F-18 of the Corteva, Inc. Consolidated Financial Statements
Note 5 - Revenue - refer to page F-19 of the Corteva, Inc. Consolidated Financial Statements
Note 6 - Restructuring and Asset Related Charges - Net - refer to page F-22 of the Corteva, Inc. Consolidated
Financial Statements
Note 7 - Supplementary Information - refer to page F-25 of the Corteva, Inc. Consolidated Financial Statements
Note 8 - Income Taxes - Differences exist between Corteva, Inc. and EIDP; refer to EIDP Note 3 - Income Taxes, of
the EIDP Consolidated Financial Statements, below
Note 9 - Earnings Per Share of Common Stock - Not applicable for EIDP
Note 10 - Accounts and Notes Receivable - Net - refer to page F-31 of the Corteva, Inc. Consolidated Financial
Statements
Note 11 - Inventories - refer to page F-32 of the Corteva, Inc. Consolidated Financial Statements
Note 12 - Property, Plant and Equipment - refer to page F-32 of the Corteva, Inc. Consolidated Financial Statements
Note 13 - Goodwill and Other Intangible Assets - refer to page F-32 of the Corteva, Inc. Consolidated Financial
Statements
Note 14 - Leases - refer to page F-34 of the Corteva, Inc. Consolidated Financial Statements
Note 15 - Long-Term Debt and Available Credit Facilities - refer to page F-35 of the Corteva, Inc. Consolidated
Financial Statements. In addition, EIDP has a related party loan payable to Corteva, Inc.; refer to EIDP Note 2 -
Related Party Transactions, of the EIDP Consolidated Financial Statements, below
Note 16 - Commitments and Contingent Liabilities - refer to page F-37 of the Corteva, Inc. Consolidated Financial
Statements
Note 17 - Stockholders' Equity - refer to page F-46 of the Corteva, Inc. Consolidated Financial Statements
Note 18 - Pension Plans and Other Post-Employment Benefits - refer to page F-49 of the Corteva, Inc. Consolidated
Financial Statements
Note 19 - Stock-Based Compensation - refer to page F-58 of the Corteva, Inc. Consolidated Financial Statements
Note 20 - Financial Instruments - refer to page F-60 of the Corteva, Inc. Consolidated Financial Statements
Note 21 - Fair Value Measurements - refer to page F-65 of the Corteva, Inc. Consolidated Financial Statements
Note 22 - Geographic Information - refer to page F-66 of the Corteva, Inc. Consolidated Financial Statements
Note 23 - Segment Information - Differences exist between Corteva, Inc. and EIDP; refer to EIDP Note 4 - Segment
Information, of the EIDP Consolidated Financial Statements, below
F-80
EIDP, Inc.
Notes to the Consolidated Financial Statements (continued)
NOTE 2 - RELATED PARTY TRANSACTIONS
Transactions with Corteva
In the second quarter of 2019, EIDP entered into a related party revolving loan from Corteva, Inc., with a maturity date in 2024.
The company repaid the outstanding related party revolving loan balance during the fourth quarter of 2023. As of December 31,
2022, the outstanding related party revolving loan balance was $789 million (which approximates fair value) with an interest
rate of 6.52%. The balance at December 31, 2022 is reflected as long-term debt - related party on EIDP's Consolidated Balance
Sheet. Additionally, EIDP has incurred tax deductible interest expense of $20 million, $46 million and $50 million and paid
interest of $40 million, $48 million and $51 million for the years ended December 31, 2023, 2022 and 2021, respectively,
associated with the related party loan to Corteva, Inc.
EIDP and Corteva, including certain consolidated subsidiaries (collectively the “Participating Companies”), are party to a
Master In-House Banking Agreement, which established banking arrangements to facilitate the management of the cash and
liquidity needs of the Participating Companies. As of December 31, 2023, EIDP had receivables from Corteva, Inc. of
$377 million included in other assets in the Consolidated Balance Sheets related to this agreement.
As of December 31, 2023 and 2022, EIDP had payables to Corteva, Inc. of $30 million and $31 million, respectively, included
in accrued and other current liabilities, and $106 million and $115 million, respectively, included in other noncurrent
obligations in the Consolidated Balance Sheets, related to Corteva's indemnification liabilities to Dow and DuPont per the
Separation Agreements (refer to page F-39 of the Corteva, Inc. Consolidated Financial Statements for further details of the
Separation Agreements).
NOTE 3 - INCOME TAXES
Refer to page F-26 of the Corteva, Inc. Consolidated Financial Statements for discussion of tax items that do not differ between
Corteva, Inc. and EIDP.
Geographic Allocation of Income (Loss) and Provision for (Benefit
from) Income Taxes
(In millions)
Income (loss) from continuing operations before income taxes
For the Year Ended December 31,
2021
2022
2023
Domestic
Foreign
Income (loss) from continuing operations before income taxes$
Current tax expense (benefit)
138 $
56 $
Federal$
State and local
Foreign
Total current tax expense (benefit)
Deferred tax expense (benefit)
Federal$
State and local
Foreign
Total deferred tax expense (benefit)$
Provision for (benefit from) income taxes on continuing operations
Net income (loss) from continuing operations
$
1,073
(434) $
1,507
$
40
407
585 $
(326) $
(50)
(62)
(438) $
147
926 $
$
$
(46) $
1,427
1,381 $
19
403
478 $
(170) $
(39)
(70)
(279) $
199
1,182 $
892
1,404
2,296
(23)
4
329
310
164
55
(17)
202
512
1,784
F-81
EIDP, Inc.
Notes to the Consolidated Financial Statements (continued)
Reconciliation to U.S. Statutory Rate
Statutory U.S. federal income tax rate
Effective tax rates on international operations - net1
Acquisitions, divestitures and ownership restructuring activities2
U.S. research and development credit
Exchange gains/losses3
State and local income taxes - net0.9
Impact of Swiss Tax Changes4
Excess tax benefits/deficiencies from stock compensation
Tax settlements and expiration of statute of limitations
Repatriation of foreign earnings5
Other – net0.2
Effective tax rate
For the Year Ended December 31,
2021
2022
2023
21.0 %
(1.9)
3.6
(6.0)
2.0
(8.0)
(0.6)
(0.4)
2.9
13.7 %
21.0 %21.0 %
(3.6)
(5.5)
(2.3)
3.8
0.2
—
(0.7)
0.1
1.7
(0.3)
14.4 %22.2 %
(2.6)
(0.1)
(2.5)
1.9
2.2
0.2
(0.2)
—
1.0
1.3
1. Includes the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with
these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S.
GAAP results. Includes a tax benefit of $(36) million for the year ended December 31, 2022, relating to the release of a valuation allowance recorded against
the net deferred tax asset position of a legal entity in Brazil.
2. Includes a tax charge of $46 million for the year ended December 31, 2023 associated with intellectual property realignment. Includes net tax benefits of
$(55) million and $(42) million for the year ended December 31, 2022, related to deferred tax assets established upon change in a U.S. entity's tax
characterization, and a worthless stock deduction on Company's investment in a subsidiary after a change in the entity's legal structure, respectively.
3. Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized. Further
information about the company's foreign currency hedging program is included in Note 7 - Supplementary Information, and Note 20 - Financial Instruments,
under the heading Foreign Currency Risk.
4. Includes net tax benefits of $(62) million and $(24) million for the year ended December 31, 2023, related to changes in deferred taxes and a tax currency
change, respectively.
5. Includes the effect of withholding tax on distribution of foreign earnings to the U.S., net of U.S. foreign tax credits.
NOTE 4 - SEGMENT INFORMATION
There are no differences in reporting structure or segments between Corteva, Inc. and EIDP. In addition, there are no
differences between Corteva, Inc. and EIDP segment net sales, segment operating EBITDA, segment assets, or significant items
by segment; refer to page F-67 of the Corteva, Inc. Consolidated Financial Statements for background information on the
segments as well as further details regarding segment metrics. The tables below reconcile income (loss) from continuing
operations after income taxes to segment operating EBITDA, as differences exist between Corteva, Inc. and EIDP.
Reconciliation to Consolidated Financial Statements
Income (loss) from continuing operations after income taxes to
segment operating EBITDA
(In millions)
Income (loss) from continuing operations after income taxes$
Provision for (benefit from) income taxes on continuing operations
Income (loss) from continuing operations before income taxes
Depreciation and amortization
Interest income
Interest expense
Exchange losses - net
Non-operating (benefits) costs - net1
Mark-to-market (gains) losses on certain foreign currency contracts not
designated as hedges
Significant items
Corporate expenses
Segment operating EBITDA
$
For the Year Ended December 31,
2023
2022
2021
926
$
147
1,073
1,211
(283)
253
397
151
—
579
110
3,491 $
1,182 $
199
1,381
1,223
(124)
124
229
(111)
—
502
116
3,340 $
1,784
512
2,296
1,243
(77)
80
54
(1,256)
—
236
138
2,714
1. The year ended December 31, 2021 includes non-cash benefits related to the 2020 OPEB Plan Amendments. Refer to Note 18 - Pension Plans and Other
Post-Employment Benefits, to the Consolidated Financial Statements, for additional information.
F-82
EIDP, Inc.
Notes to the Consolidated Financial Statements (continued)
ITEM 16. FORM 10-K SUMMARY
Not applicable.
F-83
[THIS PAGE INTENTIONALLY LEFT BLANK]
APPENDIX
Regulation G (Non-GAAP Financial Measures)
This report includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. These measures may include Operating EBITDA
and Operating EBITDA margin. 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 below or on pages 44-46 of the 2023 Annual
Report on Form 10-K.
Operating EBITDA is defined as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization,
non-operating benefits (costs), foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency
derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items. Non-operating benefits (costs) consists of
non-operating pension and other post-employment benefit (OPEB) credits (costs), tax indemnification adjustments, environmental remediation and legal
costs associated with legacy businesses and sites of Historical DuPont and the 2021 officer indemnification payment. 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 (loss) per share is defined as “earnings (loss) per common share from continuing operations – diluted” excluding the after-tax impact of
significant items, the after tax impact of non-operating benefits (costs), the after-tax impact of amortization expense associated with intangible assets
existing as of the Separation from DowDuPont, and the after-tax impact of net unrealized gain or loss from mark-to-market activity for certain foreign
currency derivative instruments that do not qualify for hedge accounting. 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. Net unrealized gain or loss from mark-to-market activity for certain foreign currency
derivative instruments that do not qualify for hedge accounting represents the non-cash net gain (loss) from changes in fair value of certain undesignated
foreign currency derivative contracts. Upon settlement, which is within the same calendar year of execution of the contract, the net gain (loss) from the
changes in fair value of the non-qualified foreign currency derivative contracts will be reported in relevant non-GAAP financial measures, allowing quarterly
results to reflect the economic effects of the foreign currency derivative contracts without the resulting unrealized mark to fair value volatility.
The company also uses Free Cash Flow as a non-GAAP measure to evaluate and discuss its liquidity position and ability to generate cash. Free Cash Flow is
defined as cash provided by (used for) operating activities – continuing operations, less capital expenditures. Cash provided by (used for) operating activities
– continuing operations for the year ended December 31, 2023 was $1,809 million. Management believes that Free Cash Flow provides investors with
meaningful information regarding the company’s ongoing ability to generate cash through core operations, and the company’s ability to service its
indebtedness, pay dividends (when declared), make share repurchases, and meet its ongoing cash needs for its operations. The company made the decision,
which was retrospectively applied, to adjust the presentation of the Consolidated Statement of Cash Flows to separately show the cash provided by (used
for) operating activities – discontinued operations, which was previously presented within cash provided by (used for) operating activities. See Note 1
– Background and Basis of Presentation, to the Consolidated Financial Statements in the 2023 Annual Report on Form 10-K, for additional information. As a
result, the definition for Free Cash Flow was revised to utilize cash provided by (used for) operating activities – continuing operations. The change in definition
did not have a material impact to prior years’ Free Cash Flow. Management made this decision to better present the liquidity generated from the company’s
ongoing business operations. Under the revised definition, Free Cash Flow was $307 million and $2,196 million for the years ended December 31, 2022 and 2021,
respectively.
APPENDIX
Non-GAAP Calculation of Corteva Operating EBITDA
Twelve Months Ended December 31,
In millions
2023
2022
2021
2020
As Reported
Margin %
As Reported
Margin %
As Reported
Margin %
As Reported
Margin %
Income (loss) from continuing operations, net of tax (GAAP)
$
941
5.5% $
1,216
7.0% $
1,822
11.6% $
756
5.3%
Provision for (benefit from) income taxes on continuing
operations
Income (loss) from continuing operations before income
taxes (GAAP)
152
0.9%
210
1.2%
524
3.3%
(81)
-0.6%
$
1,093
6.3% $
1,426
8.2% $
2,346
15.0% $
675
4.7%
+ Depreciation and Amortization
- Interest income
+ Interest expense
+ / - Exchange (gains) losses
+ / - Non-operating (benefits) costs
+ / - Mark-to-market (gains) losses on certain foreign
currency contracts not designated as hedges1
+ / - Significant items (benefit) charge
1,211
(283)
233
397
151
–
579
7.0%
-1.6%
1.4%
2.3%
0.9%
–%
3.4%
1,223
(124)
79
229
(111)
–
502
7.0%
-0.7%
0.5%
1.3%
1,243
(77)
30
54
7.9%
-0.5%
0.2%
0.3%
1,177
(56)
45
174
8.3%
-0.4%
0.3%
1.2%
-0.6%
(1,256)
-8.0%
(316)
-2.2%
–%
2.9%
–
236
–%
1.5%
388
2.7%
Corteva Operating EBITDA / EBITDA Margin (Non-GAAP) 2,3
$
3,381
19.6% $
3,224
18.5% $
2,576
16.5% $
2,087
14.7%
1. Effective January 1, 2021, on a prospective basis, the company excludes net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments
that do not qualify for hedge accounting. For the twelve months ended December 31, 2020, the unrealized mark-to-market (loss) gain was $0.
2. Corteva Operating EBITDA is defined as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, non-oper-
ating benefits (costs), foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not
qualify for hedge accounting, excluding the impact of significant items. Non-operating benefits (costs) consists of non-operating pension and other post-employment benefit (OPEB)
credits (costs), tax indemnification adjustments, and environmental remediation and legal costs associated with legacy 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. The EBITDA margin percentages are determined by dividing amounts in the table above for the twelve months ended December 31, 2023, 2022, 2021 and 2020 by net sales of
$17,226 million, $17,455 million, $15,655 million and $14,217 million, respectively. Margin percentages may not foot, due to rounding.
General Information
WEBSITE:
PHONE:
investors.corteva.com
+1 (302) 485-3400
Transfer Agent and Stockholder Services
Computershare
PO BOX 505000
Louisville, KY 40233-5000, USA
PHONE:
+1 (833) 388-2882 (Toll-Free in the U.S. and Canada)
+1 (781) 575-3120 (Outside of U.S. and Canada)
+1 (800) 231-5469 (Hearing Impaired)
WEBSITE:
computershare.com/investor
EMAIL:
shareholder@computershare.com
For more information on Stockholder Services, please contact
Corteva’s transfer agent or visit the Stockholder Services page on
Corteva’s Investor Relations website at investors.corteva.com
TM ® Trademarks of Corteva Agriscience and its affiliated companies. Enlist Duo® and Enlist One® herbicides are not registered for sale or use in all states or counties. Contact your state pesticide
regulatory agency to determine if a product is registered for sale or use in your area. Enlist Duo and Enlist One are the only 2,4-D products authorized for use with Enlist crops. Consult Enlist herbicide
labels for weed species controlled. Always read and follow label directions. The transgenic soybean event in Enlist E3® soybeans is jointly developed and owned by Corteva Agriscience LLC and MS
Technologies, LLC. Liberty®, LibertyLink® and the Water Droplet Design are registered trademarks of BASF. ®Roundup and Roundup Ready are registered trademarks of Bayer Group. © 2024 Corteva.
Corteva, Inc.
Indianapolis, IN 46268, U.S.A.
Investor Relations
investors.corteva.com
TM