WILMINGTON, Del., Oct. 31, 2019 /PRNewswire/ -- Corteva, Inc.
(NYSE: CTVA) today reported financial results for the quarter ended
September 30, 2019 and provided
guidance for the full year.
For the quarter, net sales declined 2% versus the same period
last year, with flat organic sales1. Favorable impacts
from shifts of soybean and corn sales into the third quarter,
driven by delayed planting in North
America3, were more than offset by shifts of Crop
Protection sales in Latin
America.
Local price declined 3% in the third quarter 2019 versus the
same period last year, driven by North
America. Higher replant in soybeans and corn, coupled with
increased grower incentive discounts, contributed to the
decline.
Volumes increased 3% versus the same period last year, as
delayed North America planting
shifted second quarter sales into the third quarter. This volume
growth was partially offset by declines in Latin America, where early demand for Crop
Protection products shifted sales into the second quarter and
delays in the Brazil soybean
season shifted Crop Protection sales into the fourth quarter.
Currency represented a headwind of 2%, primarily due to the
Brazilian Real and Euro.
GAAP loss from continuing operations after income taxes was
$(527) million in the quarter.
Operating EBITDA1 was a loss of $(207) million, an improvement of 18% as compared
to the same period last year on a pro forma basis2.
Improvement in Seed operating EBITDA due to timing shifts in
North America and cost savings
from synergies was partially offset by lower Crop Protection
operating EBITDA, due to timing of sales in Latin America.
The Company reported a loss $(0.69) for GAAP EPS from continuing operations
and a loss of $(0.39) for operating
EPS1 for the third quarter 2019.
Financial Highlights
GAAP
|
Net
Sales
|
EPS
|
Loss From Cont.
Ops. (AT)
|
|
$1.91
B
|
$(0.69)
|
$(527
M)
|
v. 3Q
20182
|
(2%)
|
+90%6
|
+90%6
|
Non-GAAP
|
Organic
Sales1
|
Operating
EPS1
|
Operating
EBITDA1
|
|
$1.94
B
|
$(0.39)
|
$(207
M)
|
v. 3Q
20182
|
-%
|
+35%
|
+18%
|
|
1. Organic sales,
Operating EPS, Pro Forma Operating EPS, Operating EBITDA and Pro
Forma Operating EBITDA are non-GAAP measures. See page 5 for
further discussion. 2. First Quarter 2019 and prior year GAAP
information is on a pro forma basis and was determined in
accordance with Article 11 of Regulation S-X. Non-GAAP measures for
these periods are reconciled to the GAAP pro forma measure.
3. North America is defined as U.S. and Canada. EMEA is defined as
Europe, Middle East and Africa. 4. Enlist E3™ soybeans are jointly
developed by Dow AgroSciences and MS Technologies™ 5. The company
does not provide the most comparable GAAP measure on a
forward-looking basis. See page 5 for further discussion. 6.
Improvement over prior year for Loss from Continuing Operations
After Income Taxes and GAAP EPS is primarily due to the absence of
a goodwill impairment charge recognized in the third quarter
2018. See page 1 of the Financial Statement Schedules for
further disclosure.
|
Summary of Third Quarter 2019
($ in millions,
except
where noted)
|
3Q
2019
|
3Q
2018
|
%
Change
|
%
Organic
Change1
|
Net
Sales
|
$1,911
|
$1,947
|
(2)%
|
- %
|
North
America
|
$623
|
$537
|
16%
|
16%
|
EMEA
|
$305
|
$296
|
3%
|
8%
|
Latin
America
|
$762
|
$875
|
(13)%
|
(11)%
|
Asia
Pacific
|
$221
|
$239
|
(8)%
|
(6)%
|
($ in millions,
except where
noted)
|
3Q
2019
|
3Q
20182
|
%
Change
|
GAAP Loss from
Continuing
Operations After Income
Taxes
|
$(527)
|
$(5,336)
|
90%6
|
Operating
EBITDA1
|
$(207)
|
$(251)
|
18%
|
GAAP EPS from
Continuing
Operations ($/share)
|
$(0.69)
|
$(7.13)
|
90%6
|
Operating
EPS1 ($/share)
|
$(0.39)
|
$(0.60)
|
35%
|
"Our teams around the globe delivered an extraordinary effort in
the quarter to support our customers in the face of numerous
challenges. Corteva achieved solid earnings improvement relative to
the prior year and made ongoing progress on our priorities for
shareholder value creation, including securing new product
registrations, driving continued synergy and productivity
improvements, and returning cash to shareholders. We remain focused
on driving operational discipline and committed to setting the
stage for solid net sales and operating earnings growth in
2020."
– James C. Collins, Jr., Corteva
Chief Executive Officer
Company Updates
- 2020 Launch of Key Seed Products: Corteva recently
launched the 2020 sales season in North
America3. Expanded launch of new
Qrome® products are expected to provide low single digit
price uplift in corn, given demonstrated yield advantages. In
soybeans, the new Enlist E3TM4 offerings are expected to
scale to 10% of North America
acres with continued licensing opportunities.
- New Investment Authorized to Expand Spinosyns Capacity:
Corteva's Board of Directors recently authorized an investment to
increase Spinosyns fermentation capacity by 30% to address global
market growth in insecticides that handle chewing insects in
specialty and row crops. The additional capacity will be staged to
come online over the next few years and will generate
>$100 million of annual operating
EBITDA1 at maturity.
- Delivering on Commitment to Return Cash to Shareholders:
Corteva took two critical next steps related to shareholder
remuneration commitments as it intends to return approximately
$220 million to shareholders by the
end of the year. The Company repurchased shares in the quarter as
part of its $1 billion share
repurchase program and in October declared its second continuous
quarterly dividend since spin.
Crop Protection Summary
Crop Protection net sales were $1.2
billion in the third quarter, down from $1.4 billion in the same quarter last year. The
decrease was due to a 9% decline in volume, a 2% decline in local
price, and a 1% decline from currency.
The volume decline was driven by early demand for Spinosyns
insecticides and seed applied technologies in Latin America, where approximately
$80 million of sales shifted into the
second quarter and a delayed soybean season in Brazil shifted sales into the fourth quarter.
These shifts more than offset the approximate $65 million improvement in new product sales,
driven by EMEA, versus the same quarter last year. The decrease in
local price was driven by grower incentive discounts in
North America. Unfavorable
currency impacts were primarily due to the Brazilian Real and
Euro.
Crop Protection operating EBITDA was $119
million, down 25% from the same period last year. Volume
declines in Latin America, grower
incentive discounts in North
America, and currency more than offset cost synergies, sales
from new products, and ongoing productivity.
($ in millions,
except
where noted)
|
3Q
2019
|
3Q
2018
|
%
Change
|
%
Organic
Change1
|
|
|
|
|
|
North
America
|
$397
|
$425
|
(7)%
|
(7)%
|
EMEA
|
183
|
163
|
12%
|
16%
|
Latin
America
|
491
|
621
|
(21)%
|
(20)%
|
Asia
Pacific
|
159
|
187
|
(15)%
|
(14)%
|
Total
Crop
Protection Net
Sales
|
$1,230
|
$1,396
|
(12)%
|
(11)%
|
Seed Summary
Seed net sales were $681 million
in the third quarter, up from $551
million in the same quarter last year. The increase was due
to a 31% increase in volume, partially offset by a 5% decline in
local price and a 2% decline from currency.
Strong volume growth was driven by significant weather-related
planting delays in North America
in the first half of the year, which shifted soybean and corn seed
sales into the third quarter. The decline in local price resulted
from competitive pricing pressure in soybeans in the U.S. and
increased soybean and corn replant in North America, which was partially offset by
mix improvement in Latin America.
Unfavorable currency impacts were primarily due to the Brazilian
Real.
Seed operating EBITDA was a loss of $(295) million, compared to a loss of
$(372) million in the same period
last year. Volume gains from delayed seed sales in North America, cost synergies, and ongoing
productivity more than offset decreases in local price and the
unfavorable impact of currency.
($ in millions,
except
where noted)
|
3Q
2019
|
3Q
2018
|
%
Change
|
%
Organic Change
(1)
|
|
|
|
|
|
North
America
|
$226
|
$112
|
102%
|
102%
|
EMEA
|
122
|
133
|
(8)%
|
(3)%
|
Latin
America
|
271
|
254
|
7%
|
9%
|
Asia
Pacific
|
62
|
52
|
19%
|
23%
|
Total Seed Net
Sales
|
$681
|
$551
|
24%
|
26%
|
Outlook
The Company affirmed 2019 guidance for net sales and expects
operating EBITDA at approximately $1.9
billion, which is the lower end of the previously
communicated range of $1.9 billion to
$2.05 billion. The Company now
expects to deliver at the lower end of the previously communicated
range largely due to further negative impact of currency. The
Company revised its full-year operating EPS range, now expected to
be between $1.20 and $1.26 per share. Using the mid-point, this
represents a $0.04 improvement over
the mid-point of the prior guidance.
Corteva is not able to reconcile its forward-looking non-GAAP
financial measures to its most comparable U.S. GAAP financial
measures, as it is unable to predict with reasonable certainty
items outside of its control, such as significant items, without
unreasonable effort.
Third Quarter Conference Call
The Company will host a live webcast of its third quarter
earnings conference call with investors to discuss its results and
outlook today, October 31, 2019, at
9:00 a.m. ET. The slide presentation
that accompanies the conference call is 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, Inc. (NYSE: CTVA) 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 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 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 "guidance", "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 June 30, 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 of DuPont and Dow, debt retirement
transactions related to paying off or retiring portions of
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
Corteva's Form 10 registration statement 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.
Regulation G (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, operating EBITDA margin, pro forma operating EBITDA margin,
operating earnings per share, pro forma operating earnings per
share, base tax rate, and pro forma base tax rate. 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 5 of the Financial Statement Schedules.
For first quarter and prior year, 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 14 of the Financial Statement Schedules.
Corteva is not able to reconcile its forward-looking non-GAAP
financial measures to their 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. For Significant items reported
in the periods presented, refer to page 8 of the Financial
Statement Schedules.
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
benefits , net and foreign exchange gains (losses), excluding the
impact of significant items (including goodwill impairment
charges). Non-operating benefits, net consists of non-operating
pension and other post-employment benefit (OPEB) credits, tax
indemnification adjustments, environmental remediation and legal
costs associated with legacy businesses and sites of Historical
DuPont. 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 per share are defined
as "Earnings per common share from continuing operations - diluted"
excluding the after-tax impact of significant items (including
goodwill impairment charges), the after-tax impact of non-operating
benefits, 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. Any future acquisitions may result in amortization
of additional intangible assets. Base tax rate is defined as the
effective tax rate excluding the impacts of foreign exchange gains
(losses), non-operating benefits, net, amortization of intangibles
as of the Separation from DowDuPont, and significant items
(including goodwill impairment charges). All periods for the
first quarter of 2019 and prior are on a pro forma basis as
discussed above in the paragraph 'Corteva Unaudited Pro Forma
Financial Information'.
® TM SM Trademarks and service marks of Dow AgroSciences, DuPont
or Pioneer, and their affiliated companies or their respective
owners.
1
|
Corteva,
Inc.
|
Consolidated
Statements of Operations
|
(Dollars in
millions, except per share amounts)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net
sales
|
$
|
1,911
|
|
|
$
|
1,947
|
|
|
$
|
10,863
|
|
|
$
|
11,472
|
|
|
Cost of goods
sold
|
1,349
|
|
|
1,485
|
|
|
6,607
|
|
|
7,924
|
|
|
Research and
development expense
|
289
|
|
|
325
|
|
|
857
|
|
|
1,010
|
|
|
Selling, general and
administrative expenses
|
646
|
|
|
633
|
|
|
2,318
|
|
|
2,347
|
|
|
Amortization of
intangibles
|
100
|
|
|
88
|
|
|
314
|
|
|
284
|
|
|
Restructuring and
asset related charges - net
|
46
|
|
|
235
|
|
|
167
|
|
|
466
|
|
|
Integration and
separation costs
|
152
|
|
|
253
|
|
|
694
|
|
|
697
|
|
|
Goodwill impairment
charge
|
—
|
|
|
4,503
|
|
|
—
|
|
|
4,503
|
|
|
Other income -
net
|
59
|
|
|
7
|
|
|
90
|
|
|
118
|
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
Interest
expense
|
19
|
|
|
82
|
|
|
112
|
|
|
251
|
|
|
Loss from
continuing operations before income taxes
|
(631)
|
|
|
(5,650)
|
|
|
(129)
|
|
|
(5,892)
|
|
|
(Benefit from)
provision for income taxes on continuing operations
|
(104)
|
|
|
(8)
|
|
|
99
|
|
|
(187)
|
|
|
Loss from
continuing operations after income taxes
|
(527)
|
|
|
(5,642)
|
|
|
(228)
|
|
|
(5,705)
|
|
|
Income (loss) from
discontinued operations after income taxes
|
22
|
|
|
526
|
|
|
(695)
|
|
|
1,200
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
(505)
|
|
|
(5,116)
|
|
|
(923)
|
|
|
(4,505)
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to noncontrolling interests
|
(11)
|
|
|
5
|
|
|
15
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to Corteva
|
$
|
(494)
|
|
|
$
|
(5,121)
|
|
|
$
|
(938)
|
|
|
$
|
(4,534)
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share of common stock:
|
|
|
|
|
|
|
|
|
Basic loss per share
of common stock from continuing operations
|
$
|
(0.69)
|
|
|
$
|
(7.54)
|
|
|
$
|
(0.32)
|
|
|
$
|
(7.64)
|
|
|
Basic earnings (loss)
per share of common stock from discontinued
operations
|
0.03
|
|
|
0.71
|
|
|
(0.93)
|
|
|
1.59
|
|
|
Basic loss per
share of common stock
|
$
|
(0.66)
|
|
|
$
|
(6.83)
|
|
|
$
|
(1.25)
|
|
|
$
|
(6.05)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share of common stock:
|
|
|
|
|
|
|
|
|
Diluted loss per
share of common stock from continuing operations
|
$
|
(0.69)
|
|
|
$
|
(7.54)
|
|
|
$
|
(0.32)
|
|
|
$
|
(7.64)
|
|
|
Diluted earnings
(loss) per share of common stock from discontinued
operations
|
0.03
|
|
|
0.71
|
|
|
(0.93)
|
|
|
1.59
|
|
|
Diluted loss per
share of common stock
|
$
|
(0.66)
|
|
|
$
|
(6.83)
|
|
|
$
|
(1.25)
|
|
|
$
|
(6.05)
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in earnings per share (EPS)
calculation (in millions)1
|
|
|
|
|
|
|
|
|
Basic
|
749.5
|
|
749.4
|
|
749.4
|
|
749.4
|
|
Diluted
|
749.5
|
|
749.4
|
|
749.4
|
|
749.4
|
|
|
1. 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 nine months ended September 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.
|
2
|
Corteva,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Dollars in
millions, except per share amounts)
|
|
|
|
September
30,
2019
|
|
December
31,
2018
|
|
September
30,
2018
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,980
|
|
|
$
|
2,270
|
|
|
$
|
1,657
|
|
Marketable
securities
|
|
117
|
|
|
5
|
|
|
142
|
|
Accounts and notes
receivable, net
|
|
6,574
|
|
|
5,260
|
|
|
6,547
|
|
Inventories
|
|
4,403
|
|
|
5,310
|
|
|
4,898
|
|
Other current
assets
|
|
1,043
|
|
|
1,038
|
|
|
1,041
|
|
Assets of
discontinued operations - current
|
|
—
|
|
|
9,089
|
|
|
9,055
|
|
Total current
assets
|
|
14,117
|
|
|
22,972
|
|
|
23,340
|
|
Investment in
nonconsolidated affiliates
|
|
70
|
|
|
138
|
|
|
144
|
|
Property, plant and
equipment, net of accumulated depreciation (September 30, 2019 - $3,186, December 31, 2018 -
$2,796 and September 30,
2018- $2,694)
|
|
4,503
|
|
|
4,544
|
|
|
4,384
|
|
Goodwill
|
|
10,168
|
|
|
10,193
|
|
|
10,203
|
|
Other intangible
assets
|
|
11,667
|
|
|
12,055
|
|
|
12,138
|
|
Deferred income
taxes
|
|
270
|
|
|
304
|
|
|
366
|
|
Other
assets
|
|
2,440
|
|
|
1,932
|
|
|
1,888
|
|
Assets of
discontinued operations - noncurrent
|
|
—
|
|
|
56,545
|
|
|
57,185
|
|
Total
Assets
|
|
$
|
43,235
|
|
|
$
|
108,683
|
|
|
$
|
109,648
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Short-term borrowings
and finance lease obligations
|
|
$
|
3,604
|
|
|
$
|
2,154
|
|
|
$
|
4,371
|
|
Accounts
payable
|
|
3,014
|
|
|
3,798
|
|
|
3,642
|
|
Income taxes
payable
|
|
126
|
|
|
186
|
|
|
224
|
|
Accrued and other
current liabilities
|
|
2,249
|
|
|
4,005
|
|
|
2,117
|
|
Liabilities of
discontinued operations - current
|
|
—
|
|
|
3,167
|
|
|
2,888
|
|
Total current
liabilities
|
|
8,993
|
|
|
13,310
|
|
|
13,242
|
|
Long-Term
Debt
|
|
116
|
|
|
5,784
|
|
|
10,215
|
|
Other Noncurrent
Liabilities
|
|
|
|
|
|
|
Deferred income tax
liabilities
|
|
1,328
|
|
|
1,480
|
|
|
1,594
|
|
Pension and other
post employment benefits - noncurrent
|
|
5,405
|
|
|
5,677
|
|
|
5,267
|
|
Other noncurrent
obligations
|
|
2,132
|
|
|
1,795
|
|
|
1,799
|
|
Liabilities of
discontinued operations - noncurrent
|
|
—
|
|
|
5,484
|
|
|
5,532
|
|
Total noncurrent
liabilities
|
|
8,981
|
|
|
20,220
|
|
|
24,407
|
|
|
|
|
|
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Common stock, $0.01
par value; 1,666,666,667 shares authorized;
issued at September 30, 2019 - 748,390,000
|
|
7
|
|
|
—
|
|
|
—
|
|
Additional paid-in
capital
|
|
28,072
|
|
|
—
|
|
|
—
|
|
Divisional
equity
|
|
—
|
|
|
78,020
|
|
|
73,767
|
|
Accumulated
deficit
|
|
(397)
|
|
|
—
|
|
|
—
|
|
Accumulated other
comprehensive loss
|
|
(2,667)
|
|
|
(3,360)
|
|
|
(2,271)
|
|
Total Corteva
stockholders' equity
|
|
25,015
|
|
|
74,660
|
|
|
71,496
|
|
Noncontrolling
interests
|
|
246
|
|
|
493
|
|
|
503
|
|
Total
equity
|
|
25,261
|
|
|
75,153
|
|
|
71,999
|
|
Total Liabilities
and Equity
|
|
$
|
43,235
|
|
|
$
|
108,683
|
|
|
$
|
109,648
|
|
3
|
Corteva,
Inc.
|
Pro Forma
Consolidated Statements of Operations1
|
(Dollars in
millions, except per share amounts)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September
30,
|
|
2019
2
|
|
2018
|
|
2019
|
|
2018
|
Net
sales
|
$
|
1,911
|
|
|
$
|
1,947
|
|
|
$
|
10,863
|
|
|
$
|
11,472
|
|
Cost of goods
sold
|
1,349
|
|
|
1,388
|
|
|
6,418
|
|
|
6,543
|
|
Research and
development expense
|
289
|
|
|
324
|
|
|
857
|
|
|
1,008
|
|
Selling, general and
administrative expenses
|
646
|
|
|
633
|
|
|
2,321
|
|
|
2,348
|
|
Amortization of
intangibles
|
100
|
|
|
88
|
|
|
314
|
|
|
284
|
|
Restructuring and
asset related charges - net
|
46
|
|
|
235
|
|
|
167
|
|
|
466
|
|
Integration and
separation costs
|
152
|
|
|
134
|
|
|
582
|
|
|
384
|
|
Goodwill impairment
charge
|
—
|
|
|
4,503
|
|
|
—
|
|
|
4,503
|
|
Other income -
net
|
59
|
|
|
7
|
|
|
90
|
|
|
118
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
Interest
expense
|
19
|
|
|
13
|
|
|
67
|
|
|
51
|
|
(Loss) income from
continuing operations before income taxes
|
(631)
|
|
|
(5,364)
|
|
|
214
|
|
|
(3,997)
|
|
(Benefit from)
provision for income taxes on continuing operations
|
(104)
|
|
|
(28)
|
|
|
146
|
|
|
194
|
|
(Loss) income from
continuing operations after income taxes
|
(527)
|
|
|
(5,336)
|
|
|
68
|
|
|
(4,191)
|
|
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations attributable to noncontrolling
interests
|
(11)
|
|
|
5
|
|
|
10
|
|
|
23
|
|
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations attributable to Corteva
|
$
|
(516)
|
|
|
$
|
(5,341)
|
|
|
$
|
58
|
|
|
$
|
(4,214)
|
|
|
|
|
|
|
|
|
|
Basic (loss)
earnings per share of common stock from continuing
operations
|
$
|
(0.69)
|
|
|
$
|
(7.13)
|
|
|
$
|
0.08
|
|
|
$
|
(5.62)
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per share of common stock from continuing
operations
|
$
|
(0.69)
|
|
|
$
|
(7.13)
|
|
|
$
|
0.08
|
|
|
$
|
(5.62)
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in earnings per share
(EPS) calculation (in millions) 3
|
|
|
|
|
|
|
|
Basic
|
749.5
|
|
|
749.4
|
|
|
749.4
|
|
|
749.4
|
|
Diluted
|
749.5
|
|
|
749.4
|
|
|
749.4
|
|
|
749.4
|
|
|
1. See Article
11 Pro Forma Combined Statements of Operations beginning on page
14.
|
2. The three
months ended September 30, 2019 are on an as reported
basis.
|
3. On June 1,
2019, 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 nine months ended
September 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.
|
4
|
Corteva,
Inc.
|
Consolidated
Segment Information
|
(Dollars in
millions)
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
SEGMENT NET SALES -
SEED
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Corn
|
|
$
|
372
|
|
|
$
|
344
|
|
|
$
|
4,149
|
|
|
$
|
4,289
|
|
Soybean
|
|
168
|
|
|
54
|
|
|
1,297
|
|
|
1,449
|
|
Other oilseeds
|
|
44
|
|
|
57
|
|
|
469
|
|
|
514
|
|
Other
|
|
97
|
|
|
96
|
|
|
432
|
|
|
464
|
|
Seed
|
|
$
|
681
|
|
|
$
|
551
|
|
|
$
|
6,347
|
|
|
$
|
6,716
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
SEGMENT NET SALES -
CROP PROTECTION
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Herbicides
|
|
$
|
584
|
|
|
$
|
648
|
|
|
$
|
2,399
|
|
|
$
|
2,579
|
|
Insecticides
|
|
322
|
|
|
334
|
|
|
1,158
|
|
|
1,111
|
|
Fungicides
|
|
254
|
|
|
292
|
|
|
776
|
|
|
839
|
|
Other
|
|
70
|
|
|
122
|
|
|
183
|
|
|
227
|
|
Crop
Protection
|
|
$
|
1,230
|
|
|
$
|
1,396
|
|
|
$
|
4,516
|
|
|
$
|
4,756
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
GEOGRAPHIC NET SALES
- SEED
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
North America
1
|
|
$
|
226
|
|
|
$
|
112
|
|
|
$
|
4,238
|
|
|
$
|
4,590
|
|
EMEA
2
|
|
122
|
|
|
133
|
|
|
1,200
|
|
|
1,222
|
|
Asia
Pacific
|
|
62
|
|
|
52
|
|
|
273
|
|
|
272
|
|
Latin
America
|
|
271
|
|
|
254
|
|
|
636
|
|
|
632
|
|
Rest of World
3
|
|
455
|
|
|
439
|
|
|
2,109
|
|
|
2,126
|
|
Net
Sales
|
|
$
|
681
|
|
|
$
|
551
|
|
|
$
|
6,347
|
|
|
$
|
6,716
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
GEOGRAPHIC NET SALES
- CROP PROTECTION
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
North America
1
|
|
$
|
397
|
|
|
$
|
425
|
|
|
$
|
1,562
|
|
|
$
|
1,844
|
|
EMEA
2
|
|
183
|
|
|
163
|
|
|
1,136
|
|
|
1,157
|
|
Asia
Pacific
|
|
159
|
|
|
187
|
|
|
674
|
|
|
653
|
|
Latin
America
|
|
491
|
|
|
621
|
|
|
1,144
|
|
|
1,102
|
|
Rest of World
3
|
|
833
|
|
|
971
|
|
|
2,954
|
|
|
2,912
|
|
Net
Sales
|
|
$
|
1,230
|
|
|
$
|
1,396
|
|
|
$
|
4,516
|
|
|
$
|
4,756
|
|
|
|
|
|
|
|
|
|
|
1.
Reflects U.S. & Canada
|
2. Reflects Europe, Middle East, and
Africa
|
3. Reflects EMEA, Latin America, and
Asia Pacific
|
5
|
Corteva,
Inc.
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
OPERATING
EBITDA
|
|
As
Reported
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
Seed
|
|
$
|
(295)
|
|
|
$
|
(372)
|
|
|
$
|
1,066
|
|
|
$
|
1,226
|
|
Crop
Protection
|
|
119
|
|
|
159
|
|
|
789
|
|
|
905
|
|
Corporate
Expenses
|
|
(31)
|
|
|
(38)
|
|
|
(92)
|
|
|
(109)
|
|
Operating EBITDA
(Non-GAAP)
|
|
$
|
(207)
|
|
|
$
|
(251)
|
|
|
$
|
1,763
|
|
|
$
|
2,022
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 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
|
(Loss) income from
continuing operations after income taxes
(GAAP)
|
|
$
|
(527)
|
|
|
$
|
(5,336)
|
|
|
$
|
68
|
|
|
$
|
(4,191)
|
|
(Benefit from)
provision for income taxes on continuing operations
|
|
(104)
|
|
|
(28)
|
|
|
146
|
|
|
194
|
|
(Loss) income from
continuing operations before income taxes
(GAAP)
|
|
(631)
|
|
|
(5,364)
|
|
|
214
|
|
|
(3,997)
|
|
Depreciation and
amortization
|
|
226
|
|
|
215
|
|
|
711
|
|
|
667
|
|
Interest
income
|
|
(13)
|
|
|
(12)
|
|
|
(46)
|
|
|
(63)
|
|
Interest
expense
|
|
19
|
|
|
13
|
|
|
67
|
|
|
51
|
|
Exchange (gains)
losses - net
|
|
(22)
|
|
|
74
|
|
|
37
|
|
|
140
|
|
Non-operating
benefits - net1
|
|
(32)
|
|
|
(49)
|
|
|
(106)
|
|
|
(155)
|
|
Goodwill impairment
charge
|
|
—
|
|
|
4,503
|
|
|
—
|
|
|
4,503
|
|
Significant items
charge
|
|
246
|
|
|
369
|
|
|
886
|
|
|
876
|
|
Operating EBITDA
(Non-GAAP)
|
|
(207)
|
|
|
(251)
|
|
|
1,763
|
|
|
2,022
|
|
|
1.
Non-operating benefits—net consists of non-operating pension and
other post-employment benefit (OPEB) (benefit) costs, tax
indemnification adjustments, environmental remediation and legal
costs associated with legacy EID 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.
|
6
|
Corteva,
Inc.
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
PRICE - VOLUME -
CURRENCY ANALYSIS
|
REGION
|
|
|
|
Q3 2019 vs. Q3
2018
|
Percent Change Due
To:
|
|
Net Sales
Change
(GAAP)
|
Organic Change
1
(Non-GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
86
|
|
16
|
%
|
$
|
86
|
|
16
|
%
|
(15)
|
%
|
31
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
9
|
|
3
|
%
|
22
|
|
8
|
%
|
1
|
%
|
7
|
%
|
(5)
|
%
|
—
|
%
|
Asia
Pacific
|
(18)
|
|
(8)
|
%
|
(14)
|
|
(6)
|
%
|
(4)
|
%
|
(2)
|
%
|
(2)
|
%
|
—
|
%
|
Latin
America
|
(113)
|
|
(13)
|
%
|
(101)
|
|
(11)
|
%
|
4
|
%
|
(15)
|
%
|
(2)
|
%
|
—
|
%
|
Rest of
World
|
(122)
|
|
(9)
|
%
|
(93)
|
|
(7)
|
%
|
2
|
%
|
(9)
|
%
|
(2)
|
%
|
—
|
%
|
Total
|
$
|
(36)
|
|
(2)
|
%
|
$
|
(7)
|
|
—
|
%
|
(3)
|
%
|
3
|
%
|
(2)
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
SEED
|
|
|
|
|
|
|
|
|
|
Q3 2019 vs. Q3
2018
|
Percent Change Due
To:
|
|
Net Sales
Change
(GAAP)
|
Organic Change
1
(Non-GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
114
|
|
102
|
%
|
$
|
114
|
|
102
|
%
|
(63)
|
%
|
165
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
(11)
|
|
(8)
|
%
|
(5)
|
|
(3)
|
%
|
2
|
%
|
(5)
|
%
|
(5)
|
%
|
—
|
%
|
Asia
Pacific
|
10
|
|
19
|
%
|
12
|
|
23
|
%
|
5
|
%
|
18
|
%
|
(4)
|
%
|
—
|
%
|
Latin
America
|
17
|
|
7
|
%
|
21
|
|
9
|
%
|
14
|
%
|
(5)
|
%
|
(2)
|
%
|
—
|
%
|
Rest of
World
|
16
|
|
4
|
%
|
28
|
|
7
|
%
|
10
|
%
|
(3)
|
%
|
(3)
|
%
|
—
|
%
|
Total
|
$
|
130
|
|
24
|
%
|
$
|
142
|
|
26
|
%
|
(5)
|
%
|
31
|
%
|
(2)
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
CROP
PROTECTION
|
|
Q3 2019 vs. Q3
2018
|
Percent Change Due
To:
|
|
Net Sales
Change
(GAAP)
|
Organic Change
1
(Non-GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(28)
|
|
(7)
|
%
|
$
|
(28)
|
|
(7)
|
%
|
(3)
|
%
|
(4)
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
20
|
|
12
|
%
|
27
|
|
16
|
%
|
—
|
%
|
16
|
%
|
(4)
|
%
|
—
|
%
|
Asia
Pacific
|
(28)
|
|
(15)
|
%
|
(26)
|
|
(14)
|
%
|
(6)
|
%
|
(8)
|
%
|
(1)
|
%
|
—
|
%
|
Latin
America
|
(130)
|
|
(21)
|
%
|
(122)
|
|
(20)
|
%
|
(1)
|
%
|
(19)
|
%
|
(1)
|
%
|
—
|
%
|
Rest of
World
|
(138)
|
|
(14)
|
%
|
(121)
|
|
(12)
|
%
|
(1)
|
%
|
(11)
|
%
|
(2)
|
%
|
—
|
%
|
Total
|
$
|
(166)
|
|
(12)
|
%
|
$
|
(149)
|
|
(11)
|
%
|
(2)
|
%
|
(9)
|
%
|
(1)
|
%
|
—
|
%
|
7
|
Corteva,
Inc.
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
PRICE - VOLUME -
CURRENCY ANALYSIS
|
REGION
|
|
|
|
Nine Months 2019
vs. Nine Months 2018
|
Percent Change Due
To:
|
|
Net Sales
Change
(GAAP)
|
Organic Change
1
(Non-GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(634)
|
|
(10)
|
%
|
$
|
(606)
|
|
(10)
|
%
|
(3)
|
%
|
(7)
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
(43)
|
|
(2)
|
%
|
164
|
|
7
|
%
|
1
|
%
|
6
|
%
|
(9)
|
%
|
—
|
%
|
Asia
Pacific
|
22
|
|
2
|
%
|
66
|
|
7
|
%
|
4
|
%
|
3
|
%
|
(5)
|
%
|
—
|
%
|
Latin
America
|
46
|
|
3
|
%
|
114
|
|
7
|
%
|
4
|
%
|
3
|
%
|
(4)
|
%
|
—
|
%
|
Rest of
World
|
25
|
|
—
|
%
|
344
|
|
6
|
%
|
2
|
%
|
4
|
%
|
(6)
|
%
|
—
|
%
|
Total
|
$
|
(609)
|
|
(5)
|
%
|
$
|
(262)
|
|
(2)
|
%
|
—
|
%
|
(2)
|
%
|
(3)
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
SEED
|
|
|
|
|
|
|
|
|
|
Nine Months 2019
vs. Nine Months 2018
|
Percent Change Due
To:
|
|
Net Sales
Change
(GAAP)
|
Organic Change
1
(Non-GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(352)
|
|
(8)
|
%
|
$
|
(338)
|
|
(8)
|
%
|
(4)
|
%
|
(4)
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
(22)
|
|
(2)
|
%
|
93
|
|
7
|
%
|
1
|
%
|
6
|
%
|
(9)
|
%
|
—
|
%
|
Asia
Pacific
|
1
|
|
—
|
%
|
18
|
|
6
|
%
|
2
|
%
|
4
|
%
|
(6)
|
%
|
—
|
%
|
Latin
America
|
4
|
|
1
|
%
|
29
|
|
5
|
%
|
6
|
%
|
(1)
|
%
|
(4)
|
%
|
—
|
%
|
Rest of
World
|
(17)
|
|
(1)
|
%
|
140
|
|
6
|
%
|
3
|
%
|
3
|
%
|
(7)
|
%
|
—
|
%
|
Total
|
$
|
(369)
|
|
(5)
|
%
|
$
|
(198)
|
|
(3)
|
%
|
(1)
|
%
|
(2)
|
%
|
(2)
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
CROP
PROTECTION
|
|
Nine Months 2019
vs. Nine Months 2018
|
Percent Change Due
To:
|
|
Net Sales
Change
(GAAP)
|
Organic Change
1
(Non-GAAP)
|
Local Price
&
|
|
|
Portfolio
/
|
|
$
|
%
|
$
|
%
|
Product
Mix
|
Volume
|
Currency
|
Other
|
North
America
|
$
|
(282)
|
|
(15)
|
%
|
$
|
(268)
|
|
(15)
|
%
|
(2)
|
%
|
(13)
|
%
|
—
|
%
|
—
|
%
|
EMEA
|
(21)
|
|
(2)
|
%
|
71
|
|
6
|
%
|
1
|
%
|
5
|
%
|
(8)
|
%
|
—
|
%
|
Asia
Pacific
|
21
|
|
3
|
%
|
48
|
|
7
|
%
|
4
|
%
|
3
|
%
|
(4)
|
%
|
—
|
%
|
Latin
America
|
42
|
|
4
|
%
|
85
|
|
8
|
%
|
2
|
%
|
6
|
%
|
(4)
|
%
|
—
|
%
|
Rest of
World
|
42
|
|
1
|
%
|
204
|
|
7
|
%
|
2
|
%
|
5
|
%
|
(6)
|
%
|
—
|
%
|
Total
|
$
|
(240)
|
|
(5)
|
%
|
$
|
(64)
|
|
(1)
|
%
|
1
|
%
|
(2)
|
%
|
(4)
|
%
|
—
|
%
|
|
1. Organic
sales is defined as price and volume and excludes currency and
portfolio impacts.
|
8
|
Corteva,
Inc.
|
Significant
Items
|
(Dollars in
millions, except per share amounts)
|
|
SIGNIFICANT ITEMS BY
SEGMENT (PRE-TAX)
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
As
Reported
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
Seed
|
$
|
(62)
|
|
|
$
|
(190)
|
|
|
$
|
(214)
|
|
|
$
|
(249)
|
|
Crop
Protection
|
1
|
|
|
(30)
|
|
|
(24)
|
|
|
(42)
|
|
Corporate
|
(185)
|
|
|
(149)
|
|
|
(648)
|
|
|
(585)
|
|
Total significant
items before income taxes
|
$
|
(246)
|
|
|
$
|
(369)
|
|
|
$
|
(886)
|
|
|
$
|
(876)
|
|
SIGNIFICANT ITEMS -
PRE-TAX, AFTER-TAX AND EPS IMPACTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
After-tax9
|
|
($ Per
Share)10
|
|
|
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
|
As
Reported
|
|
Pro
Forma
|
|
As
Reported
|
|
Pro
Forma
|
|
As
Reported
|
|
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
4
|
—
|
|
|
—
|
|
|
—
|
|
|
(7)
|
|
|
—
|
|
|
(0.01)
|
|
2nd Quarter -
Total
|
$
|
(455)
|
|
|
$
|
(203)
|
|
|
$
|
(535)
|
|
|
$
|
(166)
|
|
|
$
|
(0.71)
|
|
|
$
|
(0.22)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
As
Reported
|
|
Pro
Forma
|
|
As
Reported
|
|
Pro
Forma
|
|
As
Reported
|
|
Pro
Forma
|
Integration and
separation costs 1
|
$
|
(152)
|
|
|
$
|
(134)
|
|
|
$
|
(119)
|
|
|
$
|
(162)
|
|
|
$
|
(0.16)
|
|
|
$
|
(0.22)
|
|
Restructuring and
asset related charges,
net 2
|
(46)
|
|
|
(235)
|
|
|
(34)
|
|
|
(192)
|
|
|
(0.04)
|
|
|
(0.26)
|
|
Amortization of
inventory step up 6
|
(15)
|
|
|
—
|
|
|
(15)
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
Argentina currency
devaluation 8
|
(33)
|
|
|
—
|
|
|
(38)
|
|
|
—
|
|
|
(0.05)
|
|
|
—
|
|
Income tax
items4
|
—
|
|
|
—
|
|
|
38
|
|
|
(2)
|
|
|
0.05
|
|
|
—
|
|
3rd Quarter -
Total
|
$
|
(246)
|
|
|
$
|
(369)
|
|
|
$
|
(168)
|
|
|
$
|
(356)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.48)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date Total
10
|
$
|
(886)
|
|
|
$
|
(876)
|
|
|
$
|
(796)
|
|
|
$
|
(817)
|
|
|
$
|
(1.06)
|
|
|
$
|
(1.09)
|
|
|
1. Integration
and separation costs is included in "Integration and separation
costs" on the Consolidated Statement of Operations. Beginning in Q2
2019, this includes both integration and separation
costs. Included in the after-tax charges are net tax charges
of $(32) million and $(114) million related to U.S. state blended
tax rate changes associated with the Business Separations for the
first and second quarter 2019, respectively. Also, included
in the after-tax charges are a net tax charge of $(96) million and
a net tax benefit of $13 million related to application of the U.S.
tax reform's foreign tax provisions for the second and third
quarter 2019, respectively, and a tax benefit of $102 million
related to an internal legal entity restructuring associated with
the Business Separations for the second quarter 2019.
|
|
2. Third
quarter, second quarter, and first quarter 2019 included
restructuring and asset related charges of $(46) million, $(60)
million and $(61) million, respectively. The charge for the
third quarter included a $(54) million non-cash asset impairment
related to certain intangible assets that primarily relate to
heritage Dow AgroSciences intangibles previously acquired
from Cooperativa Central de Pesquisa Agrícola's ("Coodetec"),
classified as developed technology, other intangible assets and
in-process research and development ("IPR&D"), partially offset
by a benefit of $8 million associated with the DowDuPont Cost
Synergy Program. The charge for the first and second quarter
is primarily related to the DowDuPont Cost Synergy
Program.
|
|
Third quarter, second
quarter, and first quarter 2018 included restructuring and asset
related charges of $(235) million, $(101) million and $(130)
million, respectively. The charges for the first and second
quarter primarily related to the DowDuPont Cost Synergy
Program. The charges for the third quarter included a $(109)
million charge related to the DowDuPont Cost Synergy Program, an
$(85) million non-cash asset impairment related to certain
IPR&D intangibles, and a $(41) million other than temporary
non-cash impairment related to an investment in nonconsolidated
affiliates in China.
|
|
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 pre-tax foreign
exchange loss related to adjustments to foreign currency exchange
contracts as a result of U.S. tax reform and a $(64) million after
tax charge related to effects of U.S. tax reform.
|
|
Second quarter 2018
relates to effects of U.S. tax reform.
|
|
Third quarter 2018
includes an after tax benefit related to the impacts of a tax
valuation allowance recorded against the net deferred tax asset
position of a Brazilian legal entity ($75 million expense), a tax
charge related to an internal legal entity restructuring associated
with the Business Separations ($25 million expense), and U.S. Tax
Reform ($16 million expense), which were almost entirely offset by
the impact of the company's discretionary pension contribution in
2018 which was deducted on a 2017 tax return ($114 million
benefit).
|
|
Third quarter 2019
includes an after tax benefit related to Swiss Tax
Reform.
|
|
5. Second
quarter 2018 includes a gain of $24 million included in other
income - net related to an asset sale.
|
|
6. Third
quarter and second quarter 2019 include amortization of inventory
step up of $(15) million and $(52) million, respectively, 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
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. Third
quarter 2019 includes a $(33) million loss included in other income
- net associated with remeasuring the company's Argentine Peso net
monetary assets, resulting from an unexpected August primary
election result in Argentina. Throughout the three months
ended September 30, 2019, the Argentine Peso dropped approximately
a third of its value against the U.S. dollar and in September of
2019, the country's central bank announced new restrictions on
foreign currency transactions. The after tax charge of $(38)
million includes a tax valuation allowance recorded against the net
deferred tax asset position of an Argentine legal
entity.
|
|
9. Unless
specifically addressed in notes 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.
|
|
10. Earnings per
share for the year may not equal the sum of quarterly earnings per
share due to rounding and the changes in average share
calculations.
|
10
|
Corteva,
Inc.
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
Operating (Loss)
Earnings Per Share (Non-GAAP)
|
|
|
|
|
|
|
|
|
Operating earnings
(loss) per share is defined as earnings per share from continuing
operations – diluted, excluding non-operating benefits - net,
amortization of intangibles (existing as of Separation),
significant items, and goodwill impairment
charges.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
|
2019
|
|
20182
|
|
2019
|
|
20182
|
|
|
$
|
|
$
|
|
EPS
(diluted)
|
|
EPS
(diluted)
|
Net loss from
continuing operations attributable to Corteva
(GAAP)
|
|
$
|
(516)
|
|
|
$
|
(5,341)
|
|
|
(0.69)
|
|
|
(7.13)
|
|
Less: Non-operating
benefits - net, after tax 1
|
|
23
|
|
|
38
|
|
|
0.03
|
|
|
0.05
|
|
Less: Amortization of
intangibles (existing as of
Separation), after tax
|
|
(80)
|
|
|
(71)
|
|
|
(0.11)
|
|
|
(0.09)
|
|
Less: Goodwill
impairment charge, after tax
|
|
—
|
|
|
(4,503)
|
|
|
—
|
|
|
(6.01)
|
|
Less: Significant
items charge, after tax
|
|
(168)
|
|
|
(356)
|
|
|
(0.22)
|
|
|
(0.48)
|
|
Operating Loss
(Non-GAAP)
|
|
$
|
(291)
|
|
|
$
|
(449)
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.60)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
20192
|
|
20182
|
|
20192
|
|
20182
|
|
|
$
|
|
$
|
|
EPS
(diluted)
|
|
EPS
(diluted)
|
Net income (loss)
from continuing operations
attributable to Corteva (GAAP)
|
|
58
|
|
|
(4,214)
|
|
|
0.08
|
|
|
(5.62)
|
|
Less: Non-operating
benefits - net, after tax 1
|
|
84
|
|
|
121
|
|
|
0.11
|
|
|
0.16
|
|
Less: Amortization of
intangibles (existing as of
Separation), after tax
|
|
(250)
|
|
|
(227)
|
|
|
(0.33)
|
|
|
(0.30)
|
|
Less: Goodwill
impairment charge, after tax
|
|
—
|
|
|
(4,503)
|
|
|
—
|
|
|
(6.01)
|
|
Less: Significant
items charge, after tax
|
|
(796)
|
|
|
(817)
|
|
|
(1.06)
|
|
|
(1.09)
|
|
Operating Earnings
(Non-GAAP)
|
|
$
|
1,020
|
|
|
$
|
1,212
|
|
|
$
|
1.36
|
|
|
$
|
1.62
|
|
|
1.
Non-operating benefits—net consists
of non-operating pension and other post-employment
benefit (OPEB) (benefit) costs, tax indemnification adjustments,
and environmental remediation and legal costs associated with
legacy EID 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.
|
2. Periods are
presented on a Pro Forma Basis
|
11
|
Corteva,
Inc.
|
Operating EBITDA
to Operating Earnings Per Share
|
(Dollars in
millions, except per share amounts)
|
|
Operating EBITDA
to Operating Earnings Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
As
Reported
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
Operating EBITDA
(Non-GAAP)1
|
|
$
|
(207)
|
|
|
$
|
(251)
|
|
|
1,763
|
|
|
2,022
|
|
Depreciation
|
|
(126)
|
|
|
(127)
|
|
|
(397)
|
|
|
(383)
|
|
Interest
Income
|
|
13
|
|
|
12
|
|
|
46
|
|
|
63
|
|
Interest
Expense
|
|
(19)
|
|
|
(13)
|
|
|
(67)
|
|
|
(51)
|
|
Benefit from
(provision for) income taxes on
operating earnings, excluding exchange losses
(Non-GAAP)
|
|
40
|
|
|
9
|
|
|
(265)
|
|
|
(290)
|
|
Base income tax rate
from continuing operations
(Non-GAAP)1
|
|
11.8
|
%
|
|
2.4
|
%
|
|
19.7
|
%
|
|
17.6
|
%
|
Exchange losses -
net, after tax
|
|
(3)
|
|
|
(74)
|
|
|
(50)
|
|
|
(126)
|
|
Net loss (income)
attributable to non-controlling
interests
|
|
11
|
|
|
(5)
|
|
|
(10)
|
|
|
(23)
|
|
Operating (Loss)
Earnings (Non-GAAP)1
|
|
$
|
(291)
|
|
|
$
|
(449)
|
|
|
$
|
1,020
|
|
|
$
|
1,212
|
|
Diluted Shares (in
millions)
|
|
749.5
|
|
|
749.4
|
|
|
749.4
|
|
|
749.4
|
|
Operating (Loss)
Earnings Per Share (Non-
GAAP)1
|
|
$
|
(0.39)
|
|
|
$
|
(0.60)
|
|
|
$
|
1.36
|
|
|
$
|
1.62
|
|
|
1. Refer to
pages 5, 10, and 12 for Non-GAAP reconciliations.
|
12
|
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,
goodwill impairment charges, amortization of intangibles (existing
as of Separation), and non-operating benefits - net.
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
As
Reported
|
|
Pro
Forma
|
|
Pro
Forma
|
|
Pro
Forma
|
(Loss) income from
continuing operations before income taxes (GAAP)
|
$
|
(631)
|
|
|
$
|
(5,364)
|
|
|
$
|
214
|
|
|
$
|
(3,997)
|
|
Add:
Significant items - charge 1
|
246
|
|
|
369
|
|
|
886
|
|
|
876
|
|
Goodwill impairment charge
|
—
|
|
|
4,503
|
|
|
—
|
|
|
4,503
|
|
Non-operating benefits - net
|
(32)
|
|
|
(49)
|
|
|
(106)
|
|
|
(155)
|
|
Amortization of intangibles (existing as of Separation)
|
100
|
|
|
88
|
|
|
314
|
|
|
284
|
|
Less: Exchange gains (losses), net
2
|
22
|
|
|
(74)
|
|
|
(37)
|
|
|
(140)
|
|
(Loss) income from
continuing operations before income taxes,
significant items, goodwill impairment charges, non-operating
benefits -
net, amortization of intangibles (existing as of Separation),
and
exchange losses, net (Non-GAAP)
|
$
|
(339)
|
|
|
$
|
(379)
|
|
|
$
|
1,345
|
|
|
$
|
1,651
|
|
|
|
|
|
|
|
|
|
(Benefit from)
provision for income taxes on continuing operations
(GAAP)
|
$
|
(104)
|
|
|
$
|
(28)
|
|
|
$
|
146
|
|
|
$
|
194
|
|
Add: Tax
benefits on significant items charge
|
78
|
|
|
13
|
|
|
90
|
|
|
59
|
|
Tax expenses on goodwill impairment charge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Tax expenses on non-operating benefits - net
|
(9)
|
|
|
(11)
|
|
|
(22)
|
|
|
(34)
|
|
Tax benefits on
amortization of intangibles (existing as of Separation)
|
20
|
|
|
17
|
|
|
64
|
|
|
57
|
|
Tax (expenses) benefits on exchange gains (losses), net
|
(25)
|
|
|
—
|
|
|
(13)
|
|
|
14
|
|
(Benefit from)
provision for income taxes on operating earnings,
excluding exchange gains (losses), net (Non-GAAP)
|
$
|
(40)
|
|
|
$
|
(9)
|
|
|
$
|
265
|
|
|
$
|
290
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate (GAAP)
|
16.5
|
%
|
|
0.5
|
%
|
|
68.2
|
%
|
|
(4.9)
|
%
|
Significant items,
goodwill impairment charge, non-operating benefits,
and amortization of intangibles (existing as of Separation)
effect
|
(11.8)
|
%
|
|
1.5
|
%
|
|
(46.9)
|
%
|
|
23.2
|
%
|
Tax rate from
continuing operations before significant items, goodwill
impairment charge, non-operating benefits - net, and amortization
of
intangibles (existing as of Separation)
|
4.7
|
%
|
|
2.0
|
%
|
|
21.3
|
%
|
|
18.3
|
%
|
Exchange gains
(losses), net effect
|
7.1
|
%
|
|
0.4
|
%
|
|
(1.6)
|
%
|
|
(0.7)
|
%
|
Base income tax rate
from continuing operations (Non-GAAP)
|
11.8
|
%
|
|
2.4
|
%
|
|
19.7
|
%
|
|
17.6
|
%
|
|
|
|
|
|
|
|
|
1. See Significant Items
table for further detail.
|
2. Pre-tax exchange gains
(losses), net for the three and nine months ended September 30,
2019, on an operating earnings basis (Non-GAAP), exclude a $(33)
million exchange loss associated with the devaluation of the
Argentine peso. Pre-tax exchange loss, net for the nine months
ended September 30, 2018, on an operating earnings basis
(Non-GAAP), excludes a $(50) million exchange loss related to
adjustments to foreign currency exchange contracts as a result of
U.S. tax reform.
|
13
|
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
continuing operations in the Consolidated Statements of
Operations.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Subsidiary
Monetary Position Loss
|
|
|
|
|
|
|
|
|
Pre-tax exchange
losses
|
|
$
|
(33)
|
|
|
$
|
(105)
|
|
|
$
|
(26)
|
|
|
$
|
(217)
|
|
Local tax (expenses)
benefits
|
|
(12)
|
|
|
7
|
|
|
(15)
|
|
|
32
|
|
Net after-tax impact
from subsidiary exchange losses
|
|
$
|
(45)
|
|
|
$
|
(98)
|
|
|
$
|
(41)
|
|
|
$
|
(185)
|
|
|
|
|
|
|
|
|
|
|
Hedging Program
Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
gains (losses)
|
|
$
|
55
|
|
|
$
|
31
|
|
|
$
|
(11)
|
|
|
$
|
77
|
|
Tax (expenses)
benefits
|
|
(13)
|
|
|
(7)
|
|
|
2
|
|
|
(18)
|
|
Net after-tax impact
from hedging program exchange
gains (losses)
|
|
$
|
42
|
|
|
$
|
24
|
|
|
$
|
(9)
|
|
|
$
|
59
|
|
|
|
|
|
|
|
|
|
|
Total Exchange
(Loss) Gain
|
|
|
|
|
|
|
|
|
Pre-tax exchange
gains (losses) 1
|
|
$
|
22
|
|
|
$
|
(74)
|
|
|
$
|
(37)
|
|
|
$
|
(140)
|
|
Tax (expenses)
benefits
|
|
(25)
|
|
|
—
|
|
|
(13)
|
|
|
14
|
|
Net after-tax
exchange losses
|
|
$
|
(3)
|
|
|
$
|
(74)
|
|
|
$
|
(50)
|
|
|
$
|
(126)
|
|
|
|
|
|
|
|
|
|
|
As shown above, the
"Total Exchange (Loss) Gain" is the sum of the "Subsidiary Monetary
Position Loss" and the "Hedging
Program Gain (Loss)."
|
|
1. Pre-tax
exchange gains (losses), net for the three and nine months ended
September 30, 2019, on an operating earnings basis (Non-GAAP),
exclude a $(33) million exchange loss associated with the
devaluation of the Argentine peso. Pre-tax exchange loss, net for
the nine months ended September 30, 2018, on an operating earnings
basis (Non-GAAP), excludes a $(50) million exchange loss related to
adjustments to foreign currency exchange contracts as a result of
U.S. tax reform.
|
14
|
Corteva,
Inc.
|
Article 11 Pro
Forma Combined Statement of Operations
|
(Dollars in
millions, except per share amounts)
|
|
|
|
Three Months
Ended
September 30,
2018
|
|
|
As
Reported
Corteva
|
|
Adjustments
|
|
Pro Forma
Corteva
|
|
|
|
Merger1
|
|
Debt
Retirement2
|
|
Separations
Related3
|
|
|
Net
sales
|
$
|
1,947
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,947
|
|
Cost of goods
sold
|
1,485
|
|
|
(109)
|
|
|
—
|
|
|
12
|
|
|
1,388
|
|
Research and
development expense
|
325
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
324
|
|
Selling, general and
administrative expenses
|
633
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
633
|
|
Amortization of
intangibles
|
88
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88
|
|
Restructuring and
asset related charges - net
|
235
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235
|
|
Integration and
separation costs
|
253
|
|
|
—
|
|
|
—
|
|
|
(119)
|
|
|
134
|
|
Goodwill impairment
charge
|
4,503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,503
|
|
Other income -
net
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Interest
expense
|
82
|
|
|
—
|
|
|
(69)
|
|
|
—
|
|
|
13
|
|
(Loss) income from
continuing operations
before income taxes
|
(5,650)
|
|
|
109
|
|
|
69
|
|
|
108
|
|
|
(5,364)
|
|
(Benefit from)
provision for income taxes on
continuing operations
|
(8)
|
|
|
24
|
|
|
15
|
|
|
(59)
|
|
|
(28)
|
|
(Loss) income from
continuing operations after
income taxes
|
(5,642)
|
|
|
85
|
|
|
54
|
|
|
167
|
|
|
(5,336)
|
|
Net income from
continuing operations attributable
to noncontrolling interests
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
attributable to Corteva
|
$
|
(5,647)
|
|
|
$
|
85
|
|
|
$
|
54
|
|
|
$
|
167
|
|
|
$
|
(5,341)
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share of common stock from
continuing operations
|
$
|
(7.54)
|
|
|
|
|
|
|
|
|
$
|
(7.13)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share of common stock from
continuing operations
|
$
|
(7.54)
|
|
|
|
|
|
|
|
|
$
|
(7.13)
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in
earnings per share (EPS) calculation (in
millions):
|
|
|
|
|
|
|
|
|
|
Basic
|
749.4
|
|
|
|
|
|
|
|
749.4
|
|
Diluted
|
749.4
|
|
|
|
|
|
|
|
749.4
|
|
|
1. Related to
the amortization of EID'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
removal of interest expense related to the debt
redemptions/repayments.
|
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.
|
15
|
Corteva,
Inc.
|
Article 11 Pro
Forma Combined Statement of Operations
|
(Dollars in
millions, except per share amounts)
|
|
|
Nine Months
Ended
September 30,
2019
|
|
|
As
Reported
Corteva
|
|
Adjustments
|
|
Pro Forma
Corteva
|
|
|
|
Merger1
|
|
Debt
Retirement2
|
|
Separations
Related3
|
|
|
Net
sales
|
$
|
10,863
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,863
|
|
Cost of goods
sold
|
6,607
|
|
|
(205)
|
|
|
—
|
|
|
16
|
|
|
6,418
|
|
Research and
development expense
|
857
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
857
|
|
Selling, general and
administrative expenses
|
2,318
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
2,321
|
|
Amortization of
intangibles
|
314
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
314
|
|
Restructuring and
asset related charges - net
|
167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
Integration and
separation costs
|
694
|
|
|
—
|
|
|
—
|
|
|
(112)
|
|
|
582
|
|
Other income -
net
|
90
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
Loss on early
extinguishment of debt
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
Interest
expense
|
112
|
|
|
—
|
|
|
(45)
|
|
|
—
|
|
|
67
|
|
(Loss) income from
continuing operations
before income taxes
|
(129)
|
|
|
205
|
|
|
45
|
|
|
93
|
|
|
214
|
|
Provision for income
taxes on continuing
operations
|
99
|
|
|
36
|
|
|
10
|
|
|
1
|
|
|
146
|
|
(Loss) income from
continuing operations after
income taxes
|
(228)
|
|
|
169
|
|
|
35
|
|
|
92
|
|
|
68
|
|
Net income from
continuing operations attributable
to noncontrolling interests
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations
attributable to Corteva
|
$
|
(238)
|
|
|
$
|
169
|
|
|
$
|
35
|
|
|
$
|
92
|
|
|
$
|
58
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
earnings per share of common
stock from continuing operations
|
$
|
(0.32)
|
|
|
|
|
|
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per share of common
stock from continuing operations
|
$
|
(0.32)
|
|
|
|
|
|
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in
earnings per share (EPS) calculation (in
millions):
|
|
|
|
|
|
|
|
|
|
Basic
|
749.4
|
|
|
|
|
|
|
|
|
749.4
|
|
Diluted
|
749.4
|
|
|
|
|
|
|
|
|
749.4
|
|
|
1. Related to
the amortization of EID'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
removal of interest expense related to the debt
redemptions/repayments.
|
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.
|
16
|
Corteva,
Inc.
|
Article 11 Pro
Forma Combined Statement of Operations
|
(Dollars in
millions, except per share amounts)
|
|
|
Nine Months
Ended
September 30,
2018
|
|
|
As
Reported
Corteva
|
|
Adjustments
|
|
Pro Forma
Corteva
|
|
|
|
Merger1
|
|
Debt
Retirement2
|
|
Separations
Related3
|
|
|
Net
sales
|
$
|
11,472
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,472
|
|
Cost of goods
sold
|
7,924
|
|
|
(1,424)
|
|
|
—
|
|
|
43
|
|
|
6,543
|
|
Research and
development expense
|
1,010
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
1,008
|
|
Selling, general and
administrative expenses
|
2,347
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2,348
|
|
Amortization of
intangibles
|
284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
284
|
|
Restructuring and
asset related charges - net
|
466
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
466
|
|
Integration and
separation costs
|
697
|
|
|
—
|
|
|
—
|
|
|
(313)
|
|
|
384
|
|
Goodwill impairment
charge
|
4,503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,503
|
|
Other income -
net
|
118
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
Interest
expense
|
251
|
|
|
—
|
|
|
(200)
|
|
|
—
|
|
|
51
|
|
Loss from
continuing operations before
income taxes
|
(5,892)
|
|
|
1,424
|
|
|
200
|
|
|
271
|
|
|
(3,997)
|
|
(Benefit from)
provision for income taxes on
continuing operations
|
(187)
|
|
|
264
|
|
|
46
|
|
|
71
|
|
|
194
|
|
Loss from
continuing operations after income
taxes
|
(5,705)
|
|
|
1,160
|
|
|
154
|
|
|
200
|
|
|
(4,191)
|
|
Net income from
continuing operations attributable
to noncontrolling interests
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations
attributable to Corteva
|
$
|
(5,728)
|
|
|
$
|
1,160
|
|
|
$
|
154
|
|
|
$
|
200
|
|
|
$
|
(4,214)
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share of common stock from
continuing operations
|
$
|
(7.64)
|
|
|
|
|
|
|
|
|
$
|
(5.62)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share of common stock from
continuing operations
|
$
|
(7.64)
|
|
|
|
|
|
|
|
|
$
|
(5.62)
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in
earnings per share (EPS) calculation (in
millions):
|
|
|
|
|
|
|
|
|
|
Basic
|
749.4
|
|
|
|
|
|
|
|
|
749.4
|
|
Diluted
|
749.4
|
|
|
|
|
|
|
|
|
749.4
|
|
|
1. Related to
the amortization of EID'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
removal of interest expense related to the debt
redemptions/repayments.
|
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.
|
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SOURCE Corteva, Inc.