WILMINGTON, Del., Aug. 1,
2019 /PRNewswire/ -- Corteva, Inc. (NYSE: CTVA) today reported
financial results for the quarter ended June
30, 2019 and provided updated guidance for the full
year.
Commenting on the Company's second quarter 2019 performance,
Chief Executive Officer Jim Collins
said, "On June 1, 2019, we completed
an important separation milestone, becoming a global, standalone,
pure-play agriculture company - taking this step during an
extraordinary period in our industry. In our initial quarter as a
standalone company, we delivered technology-driven, organic growth
in nearly all regions despite continued pressure from the
unprecedented weather events that challenged near-term market
conditions in North America."
Collins continued, "We remain committed to executing on our
priorities and adjusting our actions focused on delivering
continuous value for our customers and shareholders. We are
delivering on our cost synergy targets, with an additional
$200 million realized in the first
half, and we continue to demonstrate our commitment to
customer-centered innovation through the acceleration of new
product launches that are helping to address real-time challenges
facing growers around the world."
Summary of Second Quarter 2019
Weather-related planting delays and lower than expected planted
area in corn, soybeans, and canola pressured sales in North America, and together with an
unfavorable currency impact, drove a decrease in net sales of
3 percent in the second quarter 2019 versus the same period
last year. Organic sales1 growth in Latin America was driven by strong early
demand for Crop Protection products, while EMEA2 and
Asia Pacific organic growth was
primarily driven by strong demand for new products, including
Isoclast™ insecticide,
Zorvec™ fungicide and
Arylex™ herbicide.
Local price declined 1 percent in the second quarter 2019 versus
the year-ago period, with price gains in Rest of World2
more than offset by decreases in North
America due to higher replant in corn and competitive
pricing pressure on soybeans. Volumes were essentially flat versus
the prior-year period due to 5 percent lower volumes in
North America on weather-related
impacts, offset by performance across the Rest of the
World2 on volume growth of 14 percent led by
Latin America on pre-season early
demand. Currency represented a headwind of 2 percent compared with
the same quarter last year, with impacts driven predominately by
the Euro.
GAAP net income from continuing operations totaled $0.5 billion in the second quarter 2019, down
50 percent versus the same quarter last year on a pro forma
basis. Operating EBITDA1 for the second quarter 2019 was
$1.5 billion, a decrease of
6 percent as compared to the same period last year on a pro
forma basis. Improvement in Crop Protection segment operating
EBITDA from new products and cost savings from synergies were more
than offset by currency impacts, lower Seed results due to
competitive pricing pressure in soybeans, higher replant in corn
and lower Seed margins.
Summary of First Half 2019
Net sales for the first half 2019 were $9 billion, down 6
percent as compared to the prior-year period. Volumes were
down 3 percent, with gains in Latin
America, EMEA and Asia
Pacific more than offset by the declines in North America. Price was flat for the period,
with price improvements primarily due to strong demand for new
products offset by North America.
Currency was a headwind of 3 percent compared with the prior-year
period.
Pro forma net income from continuing operations totaled
$0.6 billion for the first half 2019,
down 48 percent versus the same period last year. Pro forma
operating EBITDA1 for the first half 2019 was
$2 billion, down 13 percent as compared to the prior-year
period. Declines in Crop Protection and Seed were primarily due to
lower sales from the impact of weather delays and reduced planted
area in North America, competitive
pricing pressure, lower margins and currency offsetting cost
savings from synergies.
The Company reported GAAP EPS from continuing operations of
$0.63, with operating EPS1
of $1.42 for the second quarter 2019.
Pro forma GAAP EPS for the first half 2019 was $0.77 with pro forma operating EPS1 of
$1.75.
($ in
millions)
|
2Q
2019
|
2Q
2018
|
%
Change
|
%
Organic
Change(1)
|
|
1H
2019
|
1H
2018
|
%
Change
|
%
Organic
Change(1)
|
Net
Sales
|
$
|
5,556
|
|
$
|
5,731
|
|
(3)
|
%
|
(1)
|
%
|
|
$
|
8,952
|
|
$
|
9,525
|
|
(6)
|
%
|
(3)
|
%
|
North
America
|
3,785
|
|
4,126
|
|
(8)
|
%
|
(8)
|
%
|
|
5,177
|
|
5,897
|
|
(12)
|
%
|
(12)
|
%
|
Rest of
World
|
1,771
|
|
1,605
|
|
10
|
%
|
17
|
%
|
|
3,775
|
|
3,628
|
|
4
|
%
|
12
|
%
|
EMEA
|
667
|
|
687
|
|
(3)
|
%
|
6
|
%
|
|
2,031
|
|
2,083
|
|
(2)
|
%
|
7
|
%
|
Latin
America
|
653
|
|
487
|
|
34
|
%
|
39
|
%
|
|
1,018
|
|
859
|
|
19
|
%
|
25
|
%
|
Asia
Pacific
|
451
|
|
431
|
|
5
|
%
|
10
|
%
|
|
726
|
|
686
|
|
6
|
%
|
12
|
%
|
($ in millions,
except where noted)
|
2Q
2019
|
2Q
2018
(3)
|
%
Change
|
|
1H
2019
(3)
|
1H
2018
(3)
|
%
Change
|
GAAP Net income
from Continuing
Operations
|
$
|
483
|
|
$
|
968
|
|
(50)
|
%
|
|
$
|
595
|
|
$
|
1,145
|
|
(48)
|
%
|
Operating EBITDA
(1)
|
1,452
|
|
1,544
|
|
(6)
|
%
|
|
1,970
|
|
2,273
|
|
(13)
|
%
|
GAAP EPS from
Continuing Operations
($/share)
|
$
|
0.63
|
|
$
|
1.29
|
|
(51)
|
%
|
|
$
|
0.77
|
|
$
|
1.50
|
|
(49)
|
%
|
Operating EPS
(1) ($/share)
|
$
|
1.42
|
|
$
|
1.56
|
|
(9)
|
%
|
|
$
|
1.75
|
|
$
|
2.22
|
|
(21)
|
%
|
Outlook
Corteva revised its full year guidance of pro forma operating
EBITDA2 to a range of $1.9
billion to $2.05 billion. Net
sales for the full year are expected to be down about 3
percent.
Commenting on the Company's outlook, Collins said, "Despite the
first-half challenges, we continue to see strength across our
global business. Looking ahead to the second-half, we expect
ongoing, solid adoption for high-demand products and anticipate
continued ramp-up of recent product launches to continue driving
high-value sales globally. We remain focused on delivering
cost-synergy commitments and expect to see ongoing improvements
from productivity actions in the second half. Overall, we remain
firm in executing against our plans, capitalizing on the strength
of our industry-leading product portfolio and business model in the
face of a historic external environment."
Company Updates
- Share Repurchase Program and Quarterly Dividend: On
June 26, 2019, Corteva announced the
authorization of a $1 billion share
repurchase program and its first common stock dividend. The share
repurchase program is expected to be completed in three years. The
inaugural quarterly common stock dividend is expected to return
~$400 million to shareholders
annually. Collectively, these announcements reinforce the Company's
ongoing commitment to return value to shareholders.
- Enlist E3TM(4) Licensing Update: In the
second quarter 2019, Corteva sold more than 150,000 units of Enlist
E3TM soybeans in North
America and began recognizing licensing income related to
the proprietary trait technology for over 100 executed licenses to
date. Enlist E3TM soybeans are estimated to be on
greater than 10 percent of North American planted soybean acres in
2020.
- Label Expansion for Transform® WG
insecticide: On July 12, Corteva
Agriscience announced the fully restored and expanded federal label
from the U.S. Environmental Protection Agency for
Transform® WG insecticide with Isoclast™ active. Eight
new crops, including corn and alfalfa, are on the expanded label,
which also restores the previously labeled use for soybeans and
cotton - and provides farmers with a distinct mode of action in the
management of destructive insects. In the second quarter 2019,
Isoclast™ insecticide sales were approximately
$40 million, a more than 70 percent
increase from prior year.
Crop Protection Results
Net
Sales
($ in
millions)
|
2Q
2019
|
2Q
2018
|
%
Change
|
%
Organic
Change (1)
|
|
1H
2019
|
1H
2018
|
%
Change
|
%
Organic
Change (1)
|
North
America
|
$
|
686
|
|
$
|
847
|
|
(19)
|
%
|
(18)
|
%
|
|
$
|
1,165
|
|
$
|
1,419
|
|
(18)
|
%
|
(17)
|
%
|
Rest of
World
|
1,171
|
|
1,020
|
|
15
|
%
|
21
|
%
|
|
2,121
|
|
1,941
|
|
9
|
%
|
17
|
%
|
EMEA
|
393
|
|
420
|
|
(6)
|
%
|
1
|
%
|
|
953
|
|
994
|
|
(4)
|
%
|
5
|
%
|
Latin
America
|
466
|
|
316
|
|
47
|
%
|
52
|
%
|
|
653
|
|
481
|
|
36
|
%
|
43
|
%
|
Asia
Pacific
|
312
|
|
284
|
|
10
|
%
|
15
|
%
|
|
515
|
|
466
|
|
11
|
%
|
16
|
%
|
Total Crop
Protection
Net Sales
|
$
|
1,857
|
|
$
|
1,867
|
|
(1)
|
%
|
3
|
%
|
|
$
|
3,286
|
|
$
|
3,360
|
|
(2)
|
%
|
3
|
%
|
Crop Protection net sales were $1.9
billion in the second quarter 2019, down 1 percent from the
second quarter 2018. A 3 percent increase in volume was more than
offset by a 4 percent decline in currency. Rest of World organic
growth was 21 percent compared to the prior-year period.
Volume growth in the segment was primarily driven by strong
early demand for spinosyns insecticides and seed applied
technologies in Latin America, and
sales from new products, including ZorvecTM fungicide,
IsoclastTM insecticide and ArylexTM
herbicide, which increased 73 percent from prior year. This growth
was partially offset by the impacts of wet weather in North America, which negatively impacted corn
and soybean herbicide and nitrogen stabilizer applications.
Unfavorable currency impacts were driven predominately by the
Euro.
Crop Protection operating EBITDA was $0.5
billion in the second quarter 2019, up 6 percent from the
second quarter 2018 on a pro forma basis. Cost synergies, ongoing
cost reductions and sales from new products more than offset the
unfavorable impact of currency.
Crop Protection net sales were $3.3
billion for the first six months of 2019, down
2 percent from the prior-year period. The decrease was
primarily due to a 5 percent decline from currency, partially
offset by a 2 percent increase in local price and a 1 percent
increase in volume. Rest of World organic growth was 17 percent
compared to the prior-year period.
Unfavorable currency impacts primarily due to the Euro were
partially offset by increases in local price. The increase in
volume was driven by sales from new product launches, including
ZorvecTM fungicide and IsoclastTM
insecticide, which increased 56 percent for the first half, and
strong early demand for spinosyns insecticides in Latin America, partially offset by the impacts
of wet weather in North
America.
Crop Protection pro forma operating EBITDA was $0.7 billion for the first six months of 2019,
down 10 percent from the first six months of 2018. The
unfavorable impact of currency, volume declines in North America and higher input costs more than
offset cost synergies and ongoing cost reductions.
Seed Results
Net
Sales
($ in
millions)
|
2Q
2019
|
2Q
2018
|
%
Change
|
%
Organic
Change (1)
|
|
1H
2019
|
1H
2018
|
%
Change
|
%
Organic
Change (1)
|
North
America
|
$
|
3,099
|
|
$
|
3,279
|
|
(5)
|
%
|
(5)
|
%
|
|
$
|
4,012
|
|
$
|
4,478
|
|
(10)
|
%
|
(10)
|
%
|
Rest of
World
|
600
|
|
585
|
|
3
|
%
|
10
|
%
|
|
1,654
|
|
1,687
|
|
(2)
|
%
|
7
|
%
|
EMEA
|
274
|
|
267
|
|
3
|
%
|
13
|
%
|
|
1,078
|
|
1,089
|
|
(1)
|
%
|
9
|
%
|
Latin
America
|
187
|
|
171
|
|
9
|
%
|
13
|
%
|
|
365
|
|
378
|
|
(3)
|
%
|
2
|
%
|
Asia
Pacific
|
139
|
|
147
|
|
(5)
|
%
|
—
|
%
|
|
211
|
|
220
|
|
(4)
|
%
|
3
|
%
|
Total Seed Net
Sales
|
$
|
3,699
|
|
$
|
3,864
|
|
(4)
|
%
|
(3)
|
%
|
|
$
|
5,666
|
|
$
|
6,165
|
|
(8)
|
%
|
(5)
|
%
|
Seed net sales were $3.7 billion
in the second quarter 2019, down 4 percent from the second quarter
2018. The decrease was primarily due to a 2 percent decline in
local price, a 1 percent decline in currency, and a 1 percent
decline in volume. Rest of World organic growth was 10 percent
compared to the prior-year period.
The decrease in local price was driven by competitive pressure
in soybeans in North America, as
well as an increase in corn seed replant in the U.S. Unfavorable
currency impacts were due primarily to the Euro. The decline in
volume was driven by significant weather-related planting delays
and flooding in North America,
leading to a reduction in expected planted acres for corn,
soybeans, and canola. Volume declines were partially offset by corn
sales recovered from the first quarter weather-related delays and a
change in the route-to-market in several markets, coupled with
increased demand in EMEA for corn and sunflower seed, as well as
strong early demand for corn seed in Latin America.
Seed pro forma operating EBITDA was $1.0
billion in the second quarter 2019, a decline of 11 percent
compared to the second quarter 2018 on a pro forma basis.
Competitive pricing pressure and lower margins more than offset
cost synergies in R&D and ongoing cost reductions.
Seed net sales were $5.7 billion
for the first six months of 2019, down 8 percent from the first six
months of 2018. The decrease was primarily due to a 4 percent
decline in volume, a 3 percent decline in currency, and a 1 percent
decline in local price. Rest of World organic growth was 7 percent
compared to the prior-year period.
The decline in volume was driven by weather-related impacts in
North America and the impact of
early deliveries of corn seed in the fourth quarter 2018, which
were partially offset by favorable corn seed demand in EMEA.
Unfavorable currency impacts were driven predominately by the Euro.
The decrease in local price was driven by the impact of the North
American market.
Seed pro forma operating EBITDA was $1.4
billion for the first six months of 2019, a decline of
15 percent compared to the first six months of 2018 on a pro
forma basis. Volume declines in North
America, competitive pricing pressure and the unfavorable
impact of currency more than offset cost synergies in R&D and
ongoing cost reductions.
Second Quarter Conference Call
The Company will host a live webcast of its second quarter
earnings conference call with investors to discuss its results and
outlook today at 9:00 a.m. ET. The
slide presentation that accompanies the conference call will be
posted on the Company's Investor Events and Presentations page. A
replay of the webcast will also be available on the Investor Events
and Presentations page.
About Corteva Agriscience
Corteva Agriscience is a publicly traded, global pure-play
agriculture company that provides farmers around the world with the
most complete portfolio in the industry - including a balanced and
diverse mix of seed, crop protection and digital solutions focused
on maximizing productivity to enhance yield and profitability. With
some of the most recognized brands in agriculture and an
industry-leading product and technology pipeline well positioned to
drive growth, the Company is committed to working with stakeholders
throughout the food system as it fulfills its promise to enrich the
lives of those who produce and those who consume, ensuring progress
for generations to come. Corteva Agriscience became an independent
public company on June 1, 2019, and
was previously the Agriculture Division of DowDuPont. More
information can be found at www.corteva.com.
Follow Corteva Agriscience on Facebook, Instagram, LinkedIn,
Twitter and YouTube.
Cautionary Statement About Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and Section 27A of the Securities Act of 1933, as
amended, which are intended to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and may be identified by
their use of words like "plans," "expects," "will," "anticipates,"
"believes," "intends," "projects," "estimates" or other words of
similar meaning. All statements that address expectations or
projections about the future, including statements about Corteva's
strategy for growth, product development, regulatory approval,
market position, anticipated benefits of recent acquisitions,
timing of anticipated benefits from restructuring actions, outcome
of contingencies, such as litigation and environmental matters,
expenditures, and financial results, as well as expected benefits
from, the separation of Corteva from DuPont, are forward-looking
statements.
Forward-looking statements are based on certain assumptions and
expectations of future events which may not be accurate or
realized. Forward-looking statements also involve risks and
uncertainties, many of which are beyond Corteva's control. While
the list of factors presented below is considered representative,
no such list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Consequences of material differences in
results as compared with those anticipated in the forward-looking
statements could include, among other things, business disruption,
operational problems, financial loss, legal liability to third
parties and similar risks, any of which could have a material
adverse effect on Corteva's business, results of operations and
financial condition. Some of the important factors that could cause
Corteva's actual results to differ materially from those projected
in any such forward-looking statements include: (i) effect of
competition and consolidation in Corteva's industry; (ii) failure
to successfully develop and commercialize Corteva's pipeline; (iii)
failure to obtain or maintain the necessary regulatory approvals
for some Corteva's products; (iv) failure to enforce Corteva's
intellectual property rights or defend against intellectual
property claims asserted by others; (v) effect of competition from
manufacturers of generic products; (vi) impact of Corteva's
dependence on third parties with respect to certain of its raw
materials or licenses and commercialization; (vii) costs of
complying with evolving regulatory requirements and the effect of
actual or alleged violations of environmental laws or permit
requirements; (viii) effect of the degree of public understanding
and acceptance or perceived public acceptance of Corteva's
biotechnology and other agricultural products; (ix) effect of
changes in agricultural and related policies of governments and
international organizations; (x) effect of disruptions to Corteva's
supply chain, information technology or network systems; (xi)
competitor's establishment of an intermediary platform for
distribution of Corteva's products; (xii) effect of volatility in
Corteva's input costs; (xiii) failure to raise capital through the
capital markets or short-term borrowings on terms acceptable to
Corteva; (xiv) failure of Corteva's customers to pay their debts to
Corteva, including customer financing programs; (xv) failure to
realize the anticipated benefits of the internal reorganizations
taken by DowDuPont in connection with the spin-off of Corteva;
(xvi) failure to benefit from significant cost synergies and risks
related to the indemnification obligations of legacy DuPont
liabilities in connection with the separation of Corteva; (xvii)
increases in pension and other post-employment benefit plan funding
obligations; (xviii) effect of compliance with environmental laws
and requirements and adverse judgments on litigation; (xix) risks
related to Corteva's global operations; (xx) effect of climate
change and unpredictable seasonal and weather factors; (xxi) effect
of counterfeit products; (xxii) failure to effectively manage
acquisitions, divestitures, alliances and other portfolio actions;
and (xxiii) risks related to the discontinuation of LIBOR.
Additionally, there may be other risks and uncertainties that
Corteva is unable to currently identify or that Corteva does not
currently expect to have a material impact on its business.
Where, in any forward-looking statement, an expectation or belief
as to future results or events is expressed, such expectation or
belief is based on the current plans and expectations of Corteva's
management and expressed in good faith and believed to have a
reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished.
Corteva disclaims and does not undertake any obligation to update
or revise any forward-looking statement, except as required by
applicable law. A detailed discussion of some of the significant
risks and uncertainties which may cause results and events to
differ materially from such forward-looking statements is included
in the "Risk Factors" section of Exhibit 99.1 of Amendment No. 4 to
Corteva's Registration Statement on Form 10 and of Corteva's
Quarterly Report on Form 10-Q for the period ended March 31, 2019, as modified by subsequent reports
on Form 10-Q and Current Reports on Form 8-K.
Corteva Unaudited Pro Forma Financial Information
In
order to provide the most meaningful comparison of results of
operations, supplemental unaudited pro forma financial information
for the first quarter of 2019 and prior has been included in this
presentation. This presentation presents the pro forma results of
Corteva, after giving effect to events that are (1) directly
attributable to the Merger, the divestiture of Historical DuPont's
specialty products and materials science businesses, the receipt of
Dow AgroSciences, debt retirement transactions related to paying
off or retiring portions of E. I. du Pont de Nemours and Company
("Historical DuPont")'s existing debt liabilities, and the
separation and distribution to DowDuPont stockholders of all the
outstanding shares of Corteva common stock; (2) factually
supportable and (3) with respect to the pro forma statements of
income, expected to have a continuing impact on the consolidated
results. Refer to Amendment No. 4 of Corteva's registration
statement on Form 10 filed on May 6,
2019, which can be found on the investors section of the
Corteva website, for further details on the above transactions. The
pro forma financial statements were prepared in accordance with
Article 11 of Regulation S-X, and are presented for informational
purposes only, and do not purport to represent what the results of
operations would have been had the above actually occurred on the
dates indicated, nor do they purport to project the results of
operations for any future period or as of any future date.
Non-GAAP Financial Measures
This earnings release
includes information that does not conform to U.S. GAAP and are
considered non-GAAP measures. These measures include organic sales,
operating EBITDA, pro forma operating EBITDA, segment operating
EBITDA, pro forma segment operating EBITDA, operating earnings per
share, and pro forma operating earnings per share. Management
believes that these non-GAAP measures best reflect the ongoing
performance of the Company during the periods presented and provide
more relevant and meaningful information to investors as they
provide insight with respect to ongoing operating results of the
Company and a more useful comparison of year over year results.
These non-GAAP measures supplement the Company's U.S. GAAP
disclosures and should not be viewed as an alternative to U.S. GAAP
measures of performance. Furthermore, such non-GAAP measures may
not be consistent with similar measures provided or used by other
companies. Reconciliations for these non-GAAP measures to U.S. GAAP
are provided in the Selected Financial Information and Non-GAAP
Measures starting on page 13. These non-GAAP measures are
being reconciled to a pro forma GAAP financial measure prepared and
presented in accordance with Article 11 of Regulation S-X.
See Article 11 Pro Forma Combined Statements of Operations starting
on page 21.
Corteva does not provide forward-looking U.S. GAAP financial
measures or a reconciliation of forward-looking non-GAAP financial
measures to the most comparable U.S. GAAP financial measures on a
forward-looking basis because the company is unable to predict with
reasonable certainty the ultimate outcome of pending litigation,
unusual gains and losses, foreign currency exchange gains or losses
and potential future asset impairments, as well as discrete taxable
events, without unreasonable effort. These items are uncertain,
depend on various factors, and could have a material impact on U.S.
GAAP results for the guidance period.
Organic sales is defined as price and volume and excludes
currency and portfolio impacts. Operating EBITDA is defined as
earnings (i.e., income from continuing operations before income
taxes) before interest, depreciation, amortization, non-operating
costs, net and foreign exchange gains (losses), excluding the
impact of adjusted significant items. Non-operating costs, net
consists of non-operating pension and other post-employment benefit
(OPEB) costs, environmental remediation and legal costs associated
with legacy businesses and sites of Historical DuPont. Segment
Operating EBITDA is defined as Operating EBITDA excluding corporate
expenses. Operating earnings and operating earnings per share are
defined as "Earnings per common share from continuing operations -
diluted" excluding the after-tax impact of significant items, the
after-tax impact of non-operating costs, net, and the after-tax
impact of amortization expense associated with intangible assets
existing as of the Separation from DowDuPont. Although amortization
of the Company's intangible assets is excluded from these non-GAAP
measures, management believes it is important for investors to
understand that such intangible assets contribute to revenue
generation. Amortization of intangible assets that relate to past
acquisitions will recur in future periods until such intangible
assets have been fully amortized.
® TM SM Trademarks and service marks of Dow
AgroSciences, DuPont or Pioneer, and their affiliated companies or
their respective owners.
Corteva,
Inc.
|
Consolidated
Statements of Operations
|
(Dollars in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net
sales
|
$
|
5,556
|
|
|
$
|
5,731
|
|
|
$
|
8,952
|
|
|
$
|
9,525
|
|
Cost of goods
sold
|
3,047
|
|
|
3,687
|
|
|
5,258
|
|
|
6,439
|
|
Research and
development expense
|
269
|
|
|
354
|
|
|
568
|
|
|
685
|
|
Selling, general and
administrative expenses
|
937
|
|
|
965
|
|
|
1,672
|
|
|
1,714
|
|
Amortization of
intangibles
|
113
|
|
|
107
|
|
|
214
|
|
|
196
|
|
Restructuring and
asset related charges - net
|
60
|
|
|
101
|
|
|
121
|
|
|
231
|
|
Integration and
separation costs
|
330
|
|
|
249
|
|
|
542
|
|
|
444
|
|
Other income -
net
|
—
|
|
|
128
|
|
|
31
|
|
|
111
|
|
Loss on early
extinguishment of debt
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
Interest
expense
|
34
|
|
|
88
|
|
|
93
|
|
|
169
|
|
Income (loss) from
continuing operations before income taxes
|
753
|
|
|
308
|
|
|
502
|
|
|
(242)
|
|
Provision for
(benefit from) income taxes on continuing operations
|
270
|
|
|
(67)
|
|
|
203
|
|
|
(179)
|
|
Income (loss) from
continuing operations after income taxes
|
483
|
|
|
375
|
|
|
299
|
|
|
(63)
|
|
(Loss) Income from
discontinued operations after income taxes
|
(1,077)
|
|
|
323
|
|
|
(717)
|
|
|
674
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
(594)
|
|
|
698
|
|
|
(418)
|
|
|
611
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests
|
14
|
|
|
4
|
|
|
26
|
|
|
24
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to Corteva
|
$
|
(608)
|
|
|
$
|
694
|
|
|
$
|
(444)
|
|
|
$
|
587
|
|
|
|
|
|
|
|
|
|
Basic (loss)
earnings per share of common stock:
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share of common stock from continuing operations
|
$
|
0.63
|
|
|
$
|
0.49
|
|
|
$
|
0.37
|
|
|
$
|
(0.11)
|
|
Basic (loss) earnings
per share of common stock from discontinued operations
|
(1.44)
|
|
|
0.43
|
|
|
(0.96)
|
|
|
0.89
|
|
Basic (loss)
earnings per share of common stock1
|
$
|
(0.81)
|
|
|
$
|
0.92
|
|
|
$
|
(0.59)
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per share of common stock:
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share of common stock from continuing
operations
|
$
|
0.63
|
|
|
$
|
0.49
|
|
|
$
|
0.37
|
|
|
$
|
(0.11)
|
|
Diluted (loss)
earnings per share of common stock from discontinued
operations
|
(1.44)
|
|
|
0.43
|
|
|
(0.96)
|
|
|
0.89
|
|
Diluted (loss)
earnings per share of common stock1
|
$
|
(0.81)
|
|
|
$
|
0.92
|
|
|
$
|
(0.59)
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in earnings per share (EPS)
calculation2
|
|
|
|
|
|
|
|
Basic
|
749.4
|
|
749.4
|
|
749.4
|
|
749.4
|
Diluted
|
750.0
|
|
749.4
|
|
749.7
|
|
749.4
|
1.
|
The sum of the
individual earnings per share amounts from continuing operations
and discontinued operations may not equal the total company
earnings per share amounts due to rounding.
|
2.
|
On June 1, 2019,
DuPont de Nemours, Inc. ("DuPont") distributed 748,815,000 shares
of Corteva, Inc. common stock to holders of its common stock. Basic
and diluted (loss) earnings per common share for the three and six
months ended June 30, 2018 were calculated using the shares
distributed on June 1, 2019 plus 582,000 of additional shares in
which accelerated vesting conditions have been met.
|
Corteva,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Dollars in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
June
30,
2019
|
|
December
31,
2018
|
|
June
30,
2018
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,077
|
|
|
$
|
2,270
|
|
|
$
|
2,696
|
|
Marketable
securities
|
|
6
|
|
|
5
|
|
|
49
|
|
Accounts and notes
receivable, net
|
|
7,434
|
|
|
5,260
|
|
|
7,331
|
|
Inventories
|
|
3,918
|
|
|
5,310
|
|
|
4,362
|
|
Other current
assets
|
|
1,086
|
|
|
1,038
|
|
|
1,181
|
|
Assets of
discontinued operations
|
|
—
|
|
|
9,089
|
|
|
9,022
|
|
Total current
assets
|
|
14,521
|
|
|
22,972
|
|
|
24,641
|
|
Investment in
nonconsolidated affiliates
|
|
64
|
|
|
138
|
|
|
195
|
|
Property, plant and
equipment, net of accumulated depreciation
(June 30, 2019
- $3,207, December 31, 2018 - $2,796 and June 30, 2018
$2,598)
|
|
4,543
|
|
|
4,544
|
|
|
4,463
|
|
Goodwill
|
|
10,249
|
|
|
10,193
|
|
|
14,612
|
|
Other intangible
assets
|
|
11,832
|
|
|
12,055
|
|
|
12,318
|
|
Deferred income
taxes
|
|
325
|
|
|
304
|
|
|
419
|
|
Other
assets
|
|
2,464
|
|
|
1,932
|
|
|
1,909
|
|
Assets of
discontinued operations - noncurrent
|
|
—
|
|
|
56,354
|
|
|
57,381
|
|
Total
Assets
|
|
$
|
43,998
|
|
|
$
|
108,492
|
|
|
$
|
115,938
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Short-term borrowings
and capital lease obligations
|
|
$
|
2,058
|
|
|
$
|
2,154
|
|
|
$
|
3,715
|
|
Accounts
payable
|
|
3,139
|
|
|
3,798
|
|
|
3,629
|
|
Income taxes
payable
|
|
282
|
|
|
186
|
|
|
249
|
|
Accrued and other
current liabilities
|
|
3,135
|
|
|
4,005
|
|
|
2,689
|
|
Liabilities of
discontinued operations
|
|
—
|
|
|
3,167
|
|
|
2,767
|
|
Total current
liabilities
|
|
8,614
|
|
|
13,310
|
|
|
13,049
|
|
Long-term borrowings
and capital lease obligations
|
|
117
|
|
|
5,784
|
|
|
9,736
|
|
Other Noncurrent
Liabilities
|
|
|
|
|
|
|
Deferred income tax
liabilities
|
|
1,430
|
|
|
1,480
|
|
|
1,387
|
|
Pension and other
post employment benefits - noncurrent
|
|
5,538
|
|
|
5,677
|
|
|
6,474
|
|
Other noncurrent
obligations
|
|
2,156
|
|
|
1,795
|
|
|
1,960
|
|
Liabilities of
discontinued operations - noncurrent
|
|
—
|
|
|
5,293
|
|
|
5,629
|
|
Total noncurrent
liabilities
|
|
9,241
|
|
|
20,029
|
|
|
25,186
|
|
|
|
|
|
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Common stock, $0.01
par value; 1,666,666,667 shares authorized;
issued at June 30,
2019, December 31, 2018, and June 30, 2018 - 748,815,000
|
|
7
|
|
|
—
|
|
|
—
|
|
Additional paid-in
capital
|
|
28,157
|
|
|
—
|
|
|
—
|
|
Divisional
equity
|
|
—
|
|
|
78,020
|
|
|
79,390
|
|
Retained
earnings
|
|
97
|
|
|
—
|
|
|
—
|
|
Accumulated other
comprehensive loss
|
|
(2,375)
|
|
|
(3,360)
|
|
|
(2,185)
|
|
Total Corteva
stockholders' equity
|
|
25,886
|
|
|
74,660
|
|
|
77,205
|
|
Noncontrolling
interests
|
|
257
|
|
|
493
|
|
|
498
|
|
Total
equity
|
|
26,143
|
|
|
75,153
|
|
|
77,703
|
|
Total Liabilities
and Equity
|
|
$
|
43,998
|
|
|
$
|
108,492
|
|
|
$
|
115,938
|
|
Corteva,
Inc.
|
Pro Forma
Consolidated Statements of Operations1
|
(Dollars in
millions, except per share amounts)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June
30,
|
|
2019
2
|
|
2018
|
|
2019
|
|
2018
|
Net
sales
|
$
|
5,556
|
|
|
$
|
5,731
|
|
|
$
|
8,952
|
|
|
$
|
9,525
|
|
Cost of goods
sold
|
3,047
|
|
|
3,024
|
|
|
5,069
|
|
|
5,155
|
|
Research and
development expense
|
269
|
|
|
353
|
|
|
568
|
|
|
684
|
|
Selling, general and
administrative expenses
|
937
|
|
|
966
|
|
|
1,675
|
|
|
1,715
|
|
Amortization of
intangibles
|
113
|
|
|
107
|
|
|
214
|
|
|
196
|
|
Restructuring and
asset related charges - net
|
60
|
|
|
101
|
|
|
121
|
|
|
231
|
|
Integration and
separation costs
|
330
|
|
|
126
|
|
|
430
|
|
|
250
|
|
Other income -
net
|
—
|
|
|
128
|
|
|
31
|
|
|
111
|
|
Loss on early
extinguishment of debt
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
Interest
expense
|
34
|
|
|
21
|
|
|
48
|
|
|
38
|
|
Income from
continuing operations before income taxes
|
753
|
|
|
1,161
|
|
|
845
|
|
|
1,367
|
|
Provision for income
taxes on continuing operations
|
270
|
|
|
193
|
|
|
250
|
|
|
222
|
|
Income from
continuing operations after income taxes
|
483
|
|
|
968
|
|
|
595
|
|
|
1,145
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to noncontrolling
interests
|
13
|
|
|
5
|
|
|
21
|
|
|
18
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Corteva
|
$
|
470
|
|
|
$
|
963
|
|
|
$
|
574
|
|
|
$
|
1,127
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock from continuing operations
|
$
|
0.63
|
|
|
$
|
1.29
|
|
|
$
|
0.77
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share of common stock from continuing operations
|
$
|
0.63
|
|
|
$
|
1.29
|
|
|
$
|
0.77
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in earnings per share (EPS)
calculation 3
|
|
|
|
|
|
|
|
Basic
|
749.4
|
|
|
749.4
|
|
|
749.4
|
|
|
749.4
|
|
Diluted
|
750.0
|
|
|
749.4
|
|
|
749.7
|
|
|
749.4
|
|
1.
|
See Article 11 Pro
Forma Combined Statements of Operations beginning on page
21.
|
2.
|
The three months
ended June 30, 2019 are on an as reported basis.
|
3.
|
On June 1, 2019,
DuPont de Nemours, Inc. ("DuPont") distributed 748,815,000 shares
of Corteva, Inc. common stock to holders of its common stock. Basic
and diluted (loss) earnings per common share for the three and six
months ended June 30, 2018 were calculated using the shares
distributed on June 1, 2019.
|
Corteva,
Inc.
|
Consolidated
Segment Information
|
(Dollars in
millions)
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
SEGMENT NET SALES -
SEED
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Corn
|
|
$
|
2,309
|
|
|
$
|
2,248
|
|
|
$
|
3,777
|
|
|
$
|
3,945
|
|
Soybean
|
|
998
|
|
|
1,214
|
|
|
1,129
|
|
|
1,395
|
|
Other oilseeds
|
|
200
|
|
|
194
|
|
|
425
|
|
|
457
|
|
Other
|
|
192
|
|
|
208
|
|
|
335
|
|
|
368
|
|
Seed
|
|
$
|
3,699
|
|
|
$
|
3,864
|
|
|
$
|
5,666
|
|
|
$
|
6,165
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
SEGMENT NET SALES -
CROP PROTECTION
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Herbicides
|
|
$
|
1,044
|
|
|
$
|
1,068
|
|
|
$
|
1,815
|
|
|
$
|
1,931
|
|
Insecticides
|
|
459
|
|
|
448
|
|
|
836
|
|
|
777
|
|
Fungicides
|
|
302
|
|
|
269
|
|
|
522
|
|
|
547
|
|
Other
|
|
52
|
|
|
82
|
|
|
113
|
|
|
105
|
|
Crop
Protection
|
|
$
|
1,857
|
|
|
$
|
1,867
|
|
|
$
|
3,286
|
|
|
$
|
3,360
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
GEOGRAPHIC NET SALES
- SEED
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
North America
1
|
|
$
|
3,099
|
|
|
$
|
3,279
|
|
|
$
|
4,012
|
|
|
$
|
4,478
|
|
EMEA
2
|
|
274
|
|
|
267
|
|
|
1,078
|
|
|
1,089
|
|
Asia
Pacific
|
|
139
|
|
|
147
|
|
|
211
|
|
|
220
|
|
Latin
America
|
|
187
|
|
|
171
|
|
|
365
|
|
|
378
|
|
Rest of
World
|
|
600
|
|
|
585
|
|
|
1,654
|
|
|
1,687
|
|
Net
Sales
|
|
$
|
3,699
|
|
|
$
|
3,864
|
|
|
$
|
5,666
|
|
|
$
|
6,165
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
GEOGRAPHIC NET SALES
- CROP PROTECTION
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
North America
1
|
|
$
|
686
|
|
|
$
|
847
|
|
|
$
|
1,165
|
|
|
$
|
1,419
|
|
EMEA
2
|
|
393
|
|
|
420
|
|
|
953
|
|
|
994
|
|
Asia
Pacific
|
|
312
|
|
|
284
|
|
|
515
|
|
|
466
|
|
Latin
America
|
|
466
|
|
|
316
|
|
|
653
|
|
|
481
|
|
Rest of
World
|
|
1,171
|
|
|
1,020
|
|
|
2,121
|
|
|
1,941
|
|
Net
Sales
|
|
$
|
1,857
|
|
|
$
|
1,867
|
|
|
$
|
3,286
|
|
|
$
|
3,360
|
|
|
|
|
|
|
|
|
|
|
1.
Reflects U.S. & Canada
|
|
|
|
|
|
|
|
|
2.
Reflects Europe, Middle East, and Africa
|
|
|
|
|
|
|
|
|
Corteva,
Inc.
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
SEGMENT OPERATING
EBITDA
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
Seed
|
|
$
|
1,036
|
|
|
$
|
1,158
|
|
|
$
|
1,361
|
|
|
$
|
1,598
|
|
Crop
Protection
|
|
450
|
|
|
423
|
|
|
670
|
|
|
746
|
|
Segment Operating
EBITDA
|
|
$
|
1,486
|
|
|
$
|
1,581
|
|
|
$
|
2,031
|
|
|
$
|
2,344
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
RECONCILIATION OF
INCOME FROM CONTINUING OPERATIONS
AFTER INCOME TAXES TO OPERATING EBITDA
|
|
As
Reported
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
Pro forma income from
continuing operations after income taxes (GAAP)
|
|
$
|
483
|
|
|
$
|
968
|
|
|
$
|
595
|
|
|
$
|
1,145
|
|
Provision for income
taxes on continuing operations
|
|
270
|
|
|
193
|
|
|
250
|
|
|
222
|
|
Pro forma income
from continuing operations before income taxes
(GAAP)
|
|
753
|
|
|
1,161
|
|
|
845
|
|
|
1,367
|
|
Depreciation and
amortization
|
|
227
|
|
|
237
|
|
|
485
|
|
|
452
|
|
Interest
income
|
|
(17)
|
|
|
(24)
|
|
|
(33)
|
|
|
(51)
|
|
Interest
expense
|
|
34
|
|
|
21
|
|
|
48
|
|
|
38
|
|
Exchange losses -
net
|
|
32
|
|
|
1
|
|
|
59
|
|
|
66
|
|
Non-operating
benefits - net1
|
|
(32)
|
|
|
(55)
|
|
|
(74)
|
|
|
(106)
|
|
Significant items
charge
|
|
455
|
|
|
203
|
|
|
640
|
|
|
507
|
|
Operating EBITDA
(Non GAAP)
|
|
1,452
|
|
|
1,544
|
|
|
1,970
|
|
|
2,273
|
|
Corporate
expenses
|
|
34
|
|
|
37
|
|
|
61
|
|
|
71
|
|
Segment Operating
EBITDA (Non GAAP)
|
|
$
|
1,486
|
|
|
$
|
1,581
|
|
|
$
|
2,031
|
|
|
$
|
2,344
|
|
1.
|
Non-operating (benefit) costs—net consists
of non-operating pension and other post-employment
benefit (OPEB) (benefit) costs, environmental remediation and legal
costs associated with legacy businesses and sites of Historical
DuPont.
|
Corteva,
Inc.
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
PRICE - VOLUME -
CURRENCY ANALYSIS
|
REGION
|
|
|
|
Q2 2019 vs. Q2
2018
|
Percent Change Due
To:
|
|
Net Sales
Growth
(GAAP)
|
Organic Growth
(Non-
GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(341)
|
|
(8)
|
%
|
$
|
(323)
|
|
(8)
|
%
|
(3)
|
%
|
(5)
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
(20)
|
|
(3)
|
%
|
39
|
|
6
|
%
|
1
|
%
|
5
|
%
|
(9)
|
%
|
—
|
%
|
Asia
Pacific
|
20
|
|
5
|
%
|
42
|
|
10
|
%
|
7
|
%
|
3
|
%
|
(5)
|
%
|
—
|
%
|
Latin
America
|
166
|
|
34
|
%
|
189
|
|
39
|
%
|
2
|
%
|
37
|
%
|
(5)
|
%
|
—
|
%
|
Rest of
World
|
166
|
|
10
|
%
|
270
|
|
17
|
%
|
3
|
%
|
14
|
%
|
(7)
|
%
|
—
|
%
|
Total
|
$
|
(175)
|
|
(3)
|
%
|
$
|
(53)
|
|
(1)
|
%
|
(1)
|
%
|
—
|
%
|
(2)
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
SEED
|
|
|
|
|
|
|
|
|
|
Q2 2019 vs. Q2
2018
|
Percent Change Due
To:
|
|
Net Sales
Growth
(GAAP)
|
Organic Growth
(Non-
GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(180)
|
|
(5)
|
%
|
$
|
(167)
|
|
(5)
|
%
|
(2)
|
%
|
(3)
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
7
|
|
3
|
%
|
35
|
|
13
|
%
|
(1)
|
%
|
14
|
%
|
(10)
|
%
|
—
|
%
|
Asia
Pacific
|
(8)
|
|
(5)
|
%
|
(1)
|
|
—
|
%
|
1
|
%
|
(1)
|
%
|
(5)
|
%
|
—
|
%
|
Latin
America
|
16
|
|
9
|
%
|
23
|
|
13
|
%
|
(1)
|
%
|
14
|
%
|
(4)
|
%
|
—
|
%
|
Rest of
World
|
15
|
|
3
|
%
|
57
|
|
10
|
%
|
—
|
%
|
10
|
%
|
(7)
|
%
|
—
|
%
|
Total
|
$
|
(165)
|
|
(4)
|
%
|
$
|
(110)
|
|
(3)
|
%
|
(2)
|
%
|
(1)
|
%
|
(1)
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
CROP
PROTECTION
|
|
Q2 2019 vs. Q2
2018
|
Percent Change Due
To:
|
|
Net Sales
Growth
(GAAP)
|
Organic Growth
(Non-
GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(161)
|
|
(19)
|
%
|
$
|
(156)
|
|
(18)
|
%
|
(5)
|
%
|
(13)
|
%
|
—
|
%
|
(1)
|
%
|
EMEA
|
(27)
|
|
(6)
|
%
|
4
|
|
1
|
%
|
2
|
%
|
(1)
|
%
|
(7)
|
%
|
—
|
%
|
Asia
Pacific
|
28
|
|
10
|
%
|
43
|
|
15
|
%
|
11
|
%
|
4
|
%
|
(5)
|
%
|
—
|
%
|
Latin
America
|
150
|
|
47
|
%
|
166
|
|
52
|
%
|
3
|
%
|
49
|
%
|
(5)
|
%
|
—
|
%
|
Rest of
World
|
151
|
|
15
|
%
|
213
|
|
21
|
%
|
5
|
%
|
16
|
%
|
(6)
|
%
|
—
|
%
|
Total
|
$
|
(10)
|
|
(1)
|
%
|
$
|
57
|
|
3
|
%
|
—
|
%
|
3
|
%
|
(4)
|
%
|
—
|
%
|
Corteva,
Inc.
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
PRICE - VOLUME -
CURRENCY ANALYSIS
|
REGION
|
|
|
|
First Half 2019
vs. First Half 2018
|
Percent Change Due
To:
|
|
Net Sales Growth
(GAAP)
|
Organic Growth
(Non-GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(720)
|
|
(12)
|
%
|
$
|
(690)
|
|
(12)
|
%
|
(2)
|
%
|
(10)
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
(52)
|
|
(2)
|
%
|
143
|
|
7
|
%
|
1
|
%
|
6
|
%
|
(9)
|
%
|
—
|
%
|
Asia
Pacific
|
40
|
|
6
|
%
|
80
|
|
12
|
%
|
7
|
%
|
5
|
%
|
(6)
|
%
|
—
|
%
|
Latin
America
|
159
|
|
19
|
%
|
214
|
|
25
|
%
|
4
|
%
|
21
|
%
|
(6)
|
%
|
—
|
%
|
Rest of
World
|
147
|
|
4
|
%
|
437
|
|
12
|
%
|
3
|
%
|
9
|
%
|
(8)
|
%
|
—
|
%
|
Total
|
$
|
(573)
|
|
(6)
|
%
|
$
|
(253)
|
|
(3)
|
%
|
—
|
%
|
(3)
|
%
|
(3)
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
SEED
|
|
|
|
|
|
|
|
|
|
First Half 2019
vs. First Half 2018
|
Percent Change Due
To:
|
|
Net Sales Growth
(GAAP)
|
Organic Growth
(Non-GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(466)
|
|
(10)
|
%
|
$
|
(450)
|
|
(10)
|
%
|
(2)
|
%
|
(8)
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
(11)
|
|
(1)
|
%
|
98
|
|
9
|
%
|
1
|
%
|
8
|
%
|
(10)
|
%
|
—
|
%
|
Asia
Pacific
|
(9)
|
|
(4)
|
%
|
6
|
|
3
|
%
|
2
|
%
|
1
|
%
|
(7)
|
%
|
—
|
%
|
Latin
America
|
(13)
|
|
(3)
|
%
|
8
|
|
2
|
%
|
—
|
%
|
2
|
%
|
(5)
|
%
|
—
|
%
|
Rest of
World
|
(33)
|
|
(2)
|
%
|
112
|
|
7
|
%
|
1
|
%
|
6
|
%
|
(9)
|
%
|
—
|
%
|
Total
|
$
|
(499)
|
|
(8)
|
%
|
$
|
(338)
|
|
(5)
|
%
|
(1)
|
%
|
(4)
|
%
|
(3)
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
CROP
PROTECTION
|
|
First Half 2019
vs. First Half 2018
|
Percent Change Due
To:
|
|
Net Sales Growth
(GAAP)
|
Organic Growth
(Non-GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(254)
|
|
(18)
|
%
|
$
|
(240)
|
|
(17)
|
%
|
(2)
|
%
|
(15)
|
%
|
(1)
|
%
|
—
|
%
|
EMEA
|
(41)
|
|
(4)
|
%
|
45
|
|
5
|
%
|
1
|
%
|
4
|
%
|
(9)
|
%
|
—
|
%
|
Asia
Pacific
|
49
|
|
11
|
%
|
74
|
|
16
|
%
|
9
|
%
|
7
|
%
|
(5)
|
%
|
—
|
%
|
Latin
America
|
172
|
|
36
|
%
|
206
|
|
43
|
%
|
6
|
%
|
37
|
%
|
(7)
|
%
|
—
|
%
|
Rest of
World
|
180
|
|
9
|
%
|
325
|
|
17
|
%
|
4
|
%
|
13
|
%
|
(8)
|
%
|
—
|
%
|
Total
|
$
|
(74)
|
|
(2)
|
%
|
$
|
85
|
|
3
|
%
|
2
|
%
|
1
|
%
|
(5)
|
%
|
—
|
%
|
Corteva,
Inc.
|
Significant
Items
|
(Dollars in
millions, except per share amounts)
|
|
SIGNIFICANT ITEMS BY
SEGMENT (PRE-TAX)
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
As
Reported
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
Seed
|
$
|
(101)
|
|
|
$
|
(37)
|
|
|
$
|
(152)
|
|
|
$
|
(83)
|
|
Crop
Protection
|
(2)
|
|
|
24
|
|
|
(25)
|
|
|
12
|
|
Corporate
|
(352)
|
|
|
(190)
|
|
|
(463)
|
|
|
(436)
|
|
Total significant
items before income taxes
|
$
|
(455)
|
|
|
$
|
(203)
|
|
|
$
|
(640)
|
|
|
$
|
(507)
|
|
|
|
|
|
|
|
|
|
SIGNIFICANT ITEMS -
PRE-TAX, AFTER-TAX AND EPS IMPACTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
After-tax
|
|
($ Per
Share)1
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
1st
Quarter
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
Integration costs
1
|
$
|
(100)
|
|
|
$
|
(124)
|
|
|
$
|
(16)
|
|
|
$
|
(93)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.12)
|
|
Restructuring and
asset related charges, net 2
|
(61)
|
|
|
(130)
|
|
|
(53)
|
|
|
(100)
|
|
|
(0.07)
|
|
|
(0.13)
|
|
Loss on divestiture
3
|
(24)
|
|
|
—
|
|
|
(24)
|
|
|
—
|
|
|
(0.03)
|
|
|
—
|
|
Income tax items
4
|
—
|
|
|
(50)
|
|
|
—
|
|
|
(102)
|
|
|
—
|
|
|
(0.14)
|
|
1st Quarter -
Total
|
$
|
(185)
|
|
|
$
|
(304)
|
|
|
$
|
(93)
|
|
|
$
|
(295)
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.39)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
Actual
|
|
Pro
Forma
|
|
Actual
|
|
Pro
Forma
|
|
Actual
|
|
Pro
Forma
|
Integration and
separation costs 1
|
$
|
(330)
|
|
|
$
|
(126)
|
|
|
$
|
(436)
|
|
|
$
|
(97)
|
|
|
$
|
(0.58)
|
|
|
$
|
(0.13)
|
|
Restructuring and
asset related charges, net 2
|
(60)
|
|
|
(101)
|
|
|
(48)
|
|
|
(81)
|
|
|
(0.06)
|
|
|
(0.11)
|
|
Gain on sale of
assets 5
|
—
|
|
|
24
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
0.03
|
|
Amortization of
inventory step up 6
|
(52)
|
|
|
—
|
|
|
(41)
|
|
|
—
|
|
|
(0.06)
|
|
|
—
|
|
Loss on early
extinguishment of debt 7
|
(13)
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
(0.01)
|
|
|
—
|
|
Income tax
items
|
—
|
|
|
—
|
|
|
—
|
|
|
(7)
|
|
|
—
|
|
|
(0.01)
|
|
2nd Quarter -
Total
|
$
|
(455)
|
|
|
$
|
(203)
|
|
|
$
|
(535)
|
|
|
$
|
(166)
|
|
|
$
|
(0.71)
|
|
|
$
|
(0.22)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date Total
8
|
$
|
(640)
|
|
|
$
|
(507)
|
|
|
$
|
(628)
|
|
|
$
|
(461)
|
|
|
$
|
(0.84)
|
|
|
$
|
(0.62)
|
|
1.
|
Integration costs is
included in "Integration and separation costs" on Statement of
Operations. Beginning in Q2 2019, this includes both
integration and separation costs.
|
2.
|
Second quarter and
first quarter 2019 included restructuring and asset related charges
of $(60) million and $(61) million, respectively.
The charge for the second quarter is related to the DowDuPont Cost
Synergy Program. The charge for the first quarter related
primarily to the DowDuPont Cost Synergy Program and the DowDuPont
Agriculture Division Restructuring Program.
|
|
Second quarter and
first quarter 2018 included restructuring and asset related charges
of $(101) million and $(130) million, respectively.
The charges in the first half of 2018 related to the DowDuPont Cost
Synergy Program.
|
3.
|
First quarter 2019
included a loss of $(24) million included in other income -
net related to Historical Dow's sale of a joint venture related to
synergy actions.
|
4.
|
First quarter 2018
includes a $(50) million foreign exchange loss related to
adjustments to foreign currency exchange contracts as a result of
U.S. tax reform.
|
5.
|
Second quarter 2018
includes a gain of $24 million included in other income - net
related to an asset sale.
|
6.
|
Second quarter 2019
includes amortization of inventory step up of $(52) million
included in cost of goods sold related to the amortization of the
inventory step-up in connection with the Merger.
|
7.
|
Second quarter 2019
includes a loss on the early extinguishment of debt of
$(13) million related to the difference between the redemption
price and the par value of the Make Whole Notes and Term Loan
Facility, partially offset by the write-off of unamortized step-up
related to the fair value step-up of EID's debt.
|
8.
|
Earnings per share
for the year may not equal the sum of quarterly earnings per share
due to the changes in average share calculations.
|
Corteva,
Inc.
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
Operating Earnings
Per Share
|
|
|
|
|
|
|
|
|
Operating earnings
per share is defined as earnings per share from continuing
operations – diluted, excluding non-operating benefits - net,
amortization of intangibles (existing as of Separation), and
significant items.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
|
2019
|
|
20182
|
|
2019
|
|
20182
|
Operating Earnings
(Non-GAAP)
|
|
$
|
|
$
|
|
EPS
(diluted)
|
|
EPS
(diluted)
|
Pro forma net income
from continuing operations
attributable to Corteva (GAAP)
|
|
$
|
470
|
|
|
$
|
963
|
|
|
0.63
|
|
|
1.29
|
|
Less: Non-operating
benefits - net, after tax 1
|
|
30
|
|
|
43
|
|
|
0.04
|
|
|
0.06
|
|
Less: Amortization of
intangibles (existing as of
Separation), after tax
|
|
(89)
|
|
|
(86)
|
|
|
(0.12)
|
|
|
(0.11)
|
|
Less: Significant
items charge, after tax
|
|
(535)
|
|
|
(166)
|
|
|
(0.71)
|
|
|
(0.22)
|
|
Operating Earnings
(Non-GAAP)
|
|
$
|
1,064
|
|
|
$
|
1,172
|
|
|
$
|
1.42
|
|
|
$
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings
Per Share
|
|
|
|
|
|
|
|
|
Operating earnings
per share is defined as earnings per share from continuing
operations – diluted, excluding non-operating benefit - net,
amortization of intangibles (existing as of Separation), and
significant items.
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30,
|
|
|
20192
|
|
20182
|
|
20192
|
|
20182
|
Operating Earnings
(Non-GAAP)
|
|
$
|
|
$
|
|
EPS
(diluted)
|
|
EPS
(diluted)
|
Pro forma net income
from continuing operations
attributable to Corteva (GAAP)
|
|
574
|
|
|
1,127
|
|
|
0.77
|
|
|
1.50
|
|
Less: Non-operating
benefits - net, after tax 1
|
|
61
|
|
|
83
|
|
|
0.08
|
|
|
0.11
|
|
Less: Amortization of
intangibles (existing as of
Separation), after tax
|
|
(170)
|
|
|
(156)
|
|
|
(0.22)
|
|
|
(0.21)
|
|
Less: Significant
items charge, after tax
|
|
(628)
|
|
|
(461)
|
|
|
(0.84)
|
|
|
(0.62)
|
|
Operating Earnings
(Non-GAAP)
|
|
$
|
1,311
|
|
|
$
|
1,661
|
|
|
$
|
1.75
|
|
|
$
|
2.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Non-operating
benefits—net consists of non-operating pension and other
post-employment benefit (OPEB) (benefit) costs, environmental
remediation and legal costs associated with legacy businesses and
sites of Historical DuPont.
|
2.
|
Periods are presented
on a Pro Forma Basis
|
Corteva,
Inc.
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions)
|
|
Reconciliation of
Base Income Tax Rate to Effective Income Tax Rate
|
Base income tax rate
is defined as the effective income tax rate less the effect of
exchange gains (losses), significant items, amortization of
intangibles (existing as of Separation), and non-operating benefits
- net.
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
Income from
continuing operations before income taxes (GAAP)
|
$
|
753
|
|
|
$
|
1,161
|
|
|
$
|
845
|
|
|
$
|
1,367
|
|
Add:
Significant items - charge 1
|
455
|
|
|
203
|
|
|
640
|
|
|
507
|
|
Non-operating benefits - net
|
(32)
|
|
|
(55)
|
|
|
(74)
|
|
|
(106)
|
|
Amortization of intangibles (existing as of Separation)
|
113
|
|
|
107
|
|
|
214
|
|
|
196
|
|
Less: Exchange losses,
net
|
(32)
|
|
|
(1)
|
|
|
(59)
|
|
|
(66)
|
|
Income from
continuing operations before income taxes, significant items,
non-
operating benefits - net, merger-related amortization step up, and
exchange
losses (Non-GAAP)
|
$
|
1,321
|
|
|
$
|
1,417
|
|
|
$
|
1,684
|
|
|
$
|
2,030
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes on continuing operations (GAAP)
|
$
|
270
|
|
|
$
|
193
|
|
|
$
|
250
|
|
|
$
|
222
|
|
Add: Tax
(expenses) benefits on significant items charge
|
(80)
|
|
|
37
|
|
|
12
|
|
|
46
|
|
Tax expenses on non-operating benefits - net
|
(2)
|
|
|
(12)
|
|
|
(13)
|
|
|
(23)
|
|
Tax benefits on amortization of intangibles (existing as of
Separation)
|
24
|
|
|
21
|
|
|
44
|
|
|
40
|
|
Tax benefits (expenses) on exchange gains/losses
|
18
|
|
|
(44)
|
|
|
12
|
|
|
14
|
|
Operating provision
for income taxes on continuing earnings, excluding
exchange losses (Non-GAAP)
|
$
|
230
|
|
|
$
|
195
|
|
|
$
|
305
|
|
|
$
|
299
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate (GAAP)
|
35.9
|
%
|
|
16.6
|
%
|
|
29.6
|
%
|
|
16.2
|
%
|
Significant items,
non-operating benefits, and amortization of intangibles
(existing as of Separation) effect
|
(19.4)
|
%
|
|
0.3
|
%
|
|
(11.6)
|
%
|
|
(1.7)
|
%
|
Tax rate, from
continuing operations before significant items, non-operating
benefits - net, and amortization of intangibles (existing as of
Separation)
|
16.5
|
%
|
|
16.9
|
%
|
|
18.0
|
%
|
|
14.5
|
%
|
Exchange gains
(losses) effect
|
0.9
|
%
|
|
(3.1)
|
%
|
|
0.1
|
%
|
|
0.2
|
%
|
Operating income tax
rate from continuing operations (Non-GAAP)
|
17.4
|
%
|
|
13.8
|
%
|
|
18.1
|
%
|
|
14.7
|
%
|
|
|
|
|
|
|
|
|
1. See Significant Items
table for further detail.
|
|
Corteva,
Inc.
|
(Dollars in
millions, except per share amounts)
|
|
Exchange
Gains/Losses
|
|
|
|
|
|
|
|
|
The company routinely
uses forward exchange contracts to offset its net exposures, by
currency, related to the foreign currency denominated monetary
assets and liabilities of its operations. 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. The net pre-tax exchange gains
and losses are recorded in other income - net and the related tax
impact is recorded in provision for (benefit from) income taxes on
the Consolidated Statements of Operations.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Subsidiary
Monetary Position Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
gains (losses)
|
|
$
|
17
|
|
|
$
|
(178)
|
|
|
$
|
7
|
|
|
$
|
(62)
|
|
Local tax benefits
(expenses)
|
|
7
|
|
|
(3)
|
|
|
(3)
|
|
|
13
|
|
Net after-tax impact
from subsidiary exchange gains
(losses)
|
|
$
|
24
|
|
|
$
|
(181)
|
|
|
$
|
4
|
|
|
$
|
(49)
|
|
|
|
|
|
|
|
|
|
|
Hedging Program
(Loss) Gain
|
|
|
|
|
|
|
|
|
Pre-tax exchange
(losses) gains
|
|
$
|
(49)
|
|
|
$
|
177
|
|
|
$
|
(66)
|
|
|
$
|
(4)
|
|
Tax benefits
(expenses)
|
|
11
|
|
|
(41)
|
|
|
15
|
|
|
1
|
|
Net after-tax impact
from hedging program exchange
losses
|
|
$
|
(38)
|
|
|
$
|
136
|
|
|
$
|
(51)
|
|
|
$
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Total Exchange
Loss
|
|
|
|
|
|
|
|
|
Pre-tax exchange
losses
|
|
$
|
(32)
|
|
|
$
|
(1)
|
|
|
$
|
(59)
|
|
|
$
|
(66)
|
|
Tax benefits
(expenses)
|
|
18
|
|
|
(44)
|
|
|
12
|
|
|
14
|
|
Net after-tax
exchange losses
|
|
$
|
(14)
|
|
|
$
|
(45)
|
|
|
$
|
(47)
|
|
|
$
|
(52)
|
|
|
|
|
|
|
|
|
|
|
As shown above, the
"Total Exchange Gain (Loss)" is the sum of the "Subsidiary Monetary
Position Gain (Loss)" and the "Hedging Program Gain
(Loss)."
|
|
|
|
|
|
|
|
|
|
Corteva,
Inc.
|
Article 11 Pro
Forma Combined Statement of Operations
|
(Dollars in
millions)
|
|
|
Three Months
Ended
June 30,
2018
|
|
As Reported
Corteva
|
|
Adjustments
|
|
Pro Forma
Corteva
|
|
|
Merger1
|
|
Debt
Retirement2
|
|
Separations
Related3
|
|
Net
sales
|
$
|
5,731
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,731
|
|
Cost of goods
sold
|
3,687
|
|
|
(676)
|
|
|
—
|
|
|
13
|
|
|
3,024
|
|
Research and
development expense
|
354
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
353
|
|
Selling, general and
administrative expenses
|
965
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
966
|
|
Amortization of
intangibles
|
107
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
Restructuring and
asset related charges - net
|
101
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101
|
|
Integration and
separation costs
|
249
|
|
|
—
|
|
|
—
|
|
|
(123)
|
|
|
126
|
|
Other income
(expense) - net
|
128
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
|
|
|
|
|
|
—
|
|
Interest
expense
|
88
|
|
|
—
|
|
|
(67)
|
|
|
—
|
|
|
21
|
|
Income (loss) from
continuing operations before
income taxes
|
308
|
|
|
676
|
|
|
67
|
|
|
110
|
|
|
1,161
|
|
Provision for
(benefit from) income taxes on continuing
operations
|
(67)
|
|
|
130
|
|
|
15
|
|
|
115
|
|
|
193
|
|
Income (loss) from
continuing operations after
income taxes
|
375
|
|
|
546
|
|
|
52
|
|
|
(5)
|
|
|
968
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
attributable to noncontrolling interests
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
attributable to Corteva
|
$
|
370
|
|
|
$
|
546
|
|
|
$
|
52
|
|
|
$
|
(5)
|
|
|
$
|
963
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share of common stock
from continuing operations
|
$
|
0.49
|
|
|
|
|
|
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share of common stock
from continuing operations
|
$
|
0.49
|
|
|
|
|
|
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in
earnings per share (EPS) calculation:
|
|
|
|
|
|
|
|
|
|
Basic
|
749.4
|
|
|
|
|
|
|
|
749.4
|
|
Diluted
|
749.4
|
|
|
|
|
|
|
|
749.4
|
|
1.
|
Related to the
amortization of Historical DuPont's agriculture business'
inventory step-up recognized in connection with the
Merger, as the incremental amortization is directly attributable to
the Merger and will not have a continuing impact.
|
2.
|
Represents a
reduction of interest expense of $67 million for the three months
ended June 30, 2018 related to the amortization of the fair value
adjustment to Historical DuPont's long-term debt.
|
3.
|
Adjustments directly
attributable to the separations and distributions of Corteva Inc.
includes the following: elimination of the Telone balances that
will not transfer to Corteva as a result of the distribution
agreement; elimination of one-time transaction costs directly
attributable to the distribution; elimination of the impact of
certain manufacturing, leasing and supply agreements entered into
in connection with the separation; and the related tax
impacts.
|
Corteva,
Inc.
|
Article 11 Pro
Forma Combined Statement of Operations
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30,
2019
|
|
As Reported
Corteva
|
|
Adjustments
|
|
Pro Forma
Corteva
|
|
|
Merger1
|
|
Debt
Retirement2
|
|
Separations
Related3
|
|
Net
sales
|
$
|
8,952
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,952
|
|
Cost of goods
sold
|
5,258
|
|
|
(205)
|
|
|
|
|
16
|
|
|
5,069
|
|
Research and
development expense
|
568
|
|
|
|
|
|
|
|
|
568
|
|
Selling, general and
administrative expenses
|
1,672
|
|
|
|
|
|
|
3
|
|
|
1,675
|
|
Amortization of
intangibles
|
214
|
|
|
|
|
|
|
|
|
214
|
|
Restructuring and
asset related charges - net
|
121
|
|
|
|
|
|
|
|
|
121
|
|
Integration and
separation costs
|
542
|
|
|
|
|
|
|
(112)
|
|
|
430
|
|
Other income
(expense) - net
|
31
|
|
|
|
|
|
|
|
|
31
|
|
Loss on early
extinguishment of debt
|
13
|
|
|
|
|
|
|
|
|
13
|
|
Interest
expense
|
93
|
|
|
|
|
(45)
|
|
|
|
|
48
|
|
Income (loss) from
continuing operations before
income taxes
|
502
|
|
|
205
|
|
|
45
|
|
|
93
|
|
|
845
|
|
Provision for
(benefit from) income taxes on continuing
operations
|
203
|
|
|
36
|
|
|
10
|
|
|
1
|
|
|
250
|
|
Income (loss) from
continuing operations after
income taxes
|
299
|
|
|
169
|
|
|
35
|
|
|
92
|
|
|
595
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
attributable to noncontrolling interests
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
attributable to Corteva
|
$
|
278
|
|
|
$
|
169
|
|
|
$
|
35
|
|
|
$
|
92
|
|
|
$
|
574
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share of common stock
from continuing operations
|
$
|
0.37
|
|
|
|
|
|
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share of common stock
from continuing operations
|
$
|
0.37
|
|
|
|
|
|
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in
earnings per share (EPS) calculation:
|
|
|
|
|
|
|
|
|
|
Basic
|
749.4
|
|
|
|
|
|
|
|
|
749.4
|
|
Diluted
|
749.7
|
|
|
|
|
|
|
|
|
749.7
|
|
1.
|
Related to the
amortization of Historical DuPont's agriculture business'
inventory step-up recognized in connection with the
Merger, as the incremental amortization is directly attributable to
the Merger and will not have a continuing impact.
|
2.
|
Represents a
reduction of interest expense of 45 million for the six months
ended June 30, 2019 related to the amortization of the fair value
adjustment to Historical DuPont's long-term debt.
|
3.
|
Adjustments directly
attributable to the separations and distributions of Corteva Inc.
includes the following: elimination of the Telone balances that
will not transfer to Corteva as a result of the distribution
agreement; elimination of one-time transaction costs directly
attributable to the distribution; elimination of the impact of
certain manufacturing, leasing and supply agreements entered into
in connection with the separation; and the related tax
impacts.
|
Corteva,
Inc.
|
Article 11 Pro
Forma Combined Statement of Operations
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30,
2018
|
|
As Reported
Corteva
|
|
Adjustments
|
|
Pro Forma
Corteva
|
|
|
Merger1
|
|
Debt
Retirement2
|
|
Separations
Related3
|
|
Net
sales
|
$
|
9,525
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,525
|
|
Cost of goods
sold
|
6,439
|
|
|
(1,315)
|
|
|
—
|
|
|
31
|
|
|
5,155
|
|
Research and
development expense
|
685
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
684
|
|
Selling, general and
administrative expenses
|
1,714
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1,715
|
|
Amortization of
intangibles
|
196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
Restructuring and
asset related charges - net
|
231
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
231
|
|
Integration and
separation costs
|
444
|
|
|
—
|
|
|
—
|
|
|
(194)
|
|
|
250
|
|
Other income
(expense) - net
|
111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Interest
expense
|
169
|
|
|
—
|
|
|
(131)
|
|
|
—
|
|
|
38
|
|
Income (loss) from
continuing operations before
income taxes
|
(242)
|
|
|
1,315
|
|
|
131
|
|
|
163
|
|
|
1,367
|
|
Provision for
(benefit from) income taxes on continuing
operations
|
(179)
|
|
|
240
|
|
|
31
|
|
|
130
|
|
|
222
|
|
Income (loss) from
continuing operations after
income taxes
|
(63)
|
|
|
1,075
|
|
|
100
|
|
|
33
|
|
|
1,145
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
attributable to noncontrolling interests
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
attributable to Corteva
|
$
|
(81)
|
|
|
$
|
1,075
|
|
|
$
|
100
|
|
|
$
|
33
|
|
|
$
|
1,127
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share of common stock
from continuing operations
|
$
|
(0.11)
|
|
|
|
|
|
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share of common stock
from continuing operations
|
$
|
(0.11)
|
|
|
|
|
|
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in
earnings per share (EPS) calculation:
|
|
|
|
|
|
|
|
|
|
Basic
|
749.4
|
|
|
|
|
|
|
|
|
749.4
|
|
Diluted
|
749.4
|
|
|
|
|
|
|
|
|
749.4
|
|
1.
|
Related to the
amortization of Historical DuPont's agriculture business'
inventory step-up recognized in connection with the
Merger, as the incremental amortization is directly attributable to
the Merger and will not have a continuing impact.
|
2.
|
Represents a
reduction of interest expense of $131 million for the six months
ended June 30, 2018 related to the amortization of the fair value
adjustment to Historical DuPont's long-term debt.
|
3.
|
Adjustments directly
attributable to the separations and distributions of Corteva Inc.
includes the following: elimination of the Telone balances that
will not transfer to Corteva as a result of the distribution
agreement; elimination of one-time transaction costs directly
attributable to the distribution; elimination of the impact of
certain manufacturing, leasing and supply agreements entered into
in connection with the separation; and the related tax
impacts.
|
(1) Organic sales, Operating EPS, Pro Forma Operating EPS,
Operating EBITDA, Pro Forma Operating EBITDA, Segment Operating
EBITDA and Pro Forma Segment Operating EBITDA are non-GAAP
measures. See page 7 for further discussion.
(2) North America is defined as
U.S. and Canada. Rest of World is
defined as EMEA, Latin America and
Asia Pacific. EMEA is defined as Europe, Middle
East and Africa.
(3) First quarter 2019 and prior year GAAP information is on a
pro forma basis and was determined in accordance with Article 11 of
Regulation S-X. Non-GAAP measures for these periods are
reconciled to the GAAP pro forma measure. See page 7 for further
discussion.
(4) Enlist E3™ soybeans are jointly developed by Dow
AgroSciences and MS Technologies™
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SOURCE Corteva, Inc.