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| Name | Symbol | Market | Type |
|---|---|---|---|
| EIDP Inc | NYSE:CTA-B | NYSE | Preference Share |
| Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.05 | -0.07% | 72.97 | 73.50 | 72.92 | 72.92 | 981 | 18:00:07 |
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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82-4979096
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(State or other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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974 Centre Road,
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Wilmington,
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Delaware
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19805
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(302)
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485-3000
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(Address of Principal Executive Offices) (Zip Code)
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(Registrant’s Telephone Number, including area code)
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Delaware
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51-0014090
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(State or other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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974 Centre Road,
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Wilmington,
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Delaware
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19805
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(302)
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485-3000
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(Address of Principal Executive Offices) (Zip Code)
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(Registrant’s Telephone Number, including area code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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CTVA
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New York Stock Exchange
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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$3.50 Series Preferred Stock
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CTAPrA
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New York Stock Exchange
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$4.50 Series Preferred Stock
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CTAPrB
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New York Stock Exchange
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Corteva, Inc.
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Large Accelerated Filer
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x
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Accelerated Filer o
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Non-Accelerated Filer
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o
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Smaller reporting company o
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Emerging growth company o
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E. I. du Pont de Nemours and Company
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Large Accelerated Filer
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o
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Accelerated Filer o
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Non-Accelerated Filer
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x
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Smaller reporting company o
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Emerging growth company o
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1.
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the April 1, 2019 transfer of the assets and liabilities aligned with EID’s material science businesses including EID’s ethylene and ethylene copolymers business, excluding its ethylene acrylic elastomers business, (“EID ECP”) to DowDuPont, which were ultimately conveyed by DowDuPont to Dow;
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2.
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the May 1, 2019 distribution of EID legal entities containing the assets and liabilities of EID’s specialty products business (the “EID Specialty Products Entities”) to DowDuPont;
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3.
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the May 2, 2019 conveyance of Historical Dow's agriculture business ("Dow Ag Entities") to EID; and
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4.
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the May 31, 2019 contribution of EID to Corteva, Inc. Refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2019 for further information.
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Item 1.
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CONSOLIDATED FINANCIAL STATEMENTS
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(In millions, except per share amounts)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
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2020
|
2019
|
2020
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2019
|
||||||||
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Net sales
|
$
|
5,191
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$
|
5,556
|
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$
|
9,147
|
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$
|
8,952
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Cost of goods sold
|
2,829
|
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3,047
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5,098
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5,258
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||||
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Research and development expense
|
273
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269
|
|
553
|
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568
|
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||||
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Selling, general and administrative expenses
|
965
|
|
937
|
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1,722
|
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1,672
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||||
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Amortization of intangibles
|
176
|
|
113
|
|
339
|
|
214
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||||
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Restructuring and asset related charges - net
|
179
|
|
60
|
|
249
|
|
121
|
|
||||
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Integration and separation costs
|
—
|
|
330
|
|
—
|
|
542
|
|
||||
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Other income - net
|
89
|
|
—
|
|
90
|
|
31
|
|
||||
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Loss on early extinguishment of debt
|
—
|
|
13
|
|
—
|
|
13
|
|
||||
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Interest expense
|
14
|
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34
|
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24
|
|
93
|
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||||
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Income from continuing operations before income taxes
|
844
|
|
753
|
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1,252
|
|
502
|
|
||||
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Provision for income taxes on continuing operations
|
78
|
|
270
|
|
205
|
|
203
|
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||||
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Income from continuing operations after income taxes
|
766
|
|
483
|
|
1,047
|
|
299
|
|
||||
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(Loss) income from discontinued operations after income taxes
|
—
|
|
(1,077
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)
|
1
|
|
(717
|
)
|
||||
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Net income (loss)
|
766
|
|
(594
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)
|
1,048
|
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(418
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)
|
||||
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Net income attributable to noncontrolling interests
|
6
|
|
14
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16
|
|
26
|
|
||||
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Net income (loss) attributable to Corteva
|
$
|
760
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$
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(608
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)
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$
|
1,032
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$
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(444
|
)
|
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Basic earnings (loss) per share of common stock:
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||||||||
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Basic earnings per share of common stock from continuing operations
|
$
|
1.01
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$
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0.63
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$
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1.37
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$
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0.37
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Basic loss per share of common stock from discontinued operations
|
—
|
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(1.44
|
)
|
—
|
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(0.96
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)
|
||||
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Basic earnings (loss) per share of common stock
|
$
|
1.01
|
|
$
|
(0.81
|
)
|
$
|
1.37
|
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$
|
(0.59
|
)
|
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Diluted earnings (loss) per share of common stock:
|
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||||||||
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Diluted earnings per share of common stock from continuing operations
|
$
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1.01
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$
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0.63
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$
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1.37
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$
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0.37
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Diluted loss per share of common stock from discontinued operations
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—
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(1.44
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)
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—
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(0.96
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)
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||||
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Diluted earnings (loss) per share of common stock
|
$
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1.01
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$
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(0.81
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)
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$
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1.37
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$
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(0.59
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)
|
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(In millions)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
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2020
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2019
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2020
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2019
|
||||||||
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Net income (loss)
|
$
|
766
|
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$
|
(594
|
)
|
$
|
1,048
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$
|
(418
|
)
|
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Other comprehensive income (loss) - net of tax:
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Cumulative translation adjustments
|
97
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(102
|
)
|
(575
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)
|
(174
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)
|
||||
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Adjustments to pension benefit plans
|
(6
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)
|
11
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(6
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)
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8
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||||
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Adjustments to other benefit plans
|
(1
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)
|
(86
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)
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2
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(86
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)
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||||
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Derivative instruments
|
(2
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)
|
22
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4
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23
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||||
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Total other comprehensive income (loss)
|
88
|
|
(155
|
)
|
(575
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)
|
(229
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)
|
||||
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Comprehensive income (loss)
|
854
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(749
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)
|
473
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(647
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)
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||||
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Comprehensive income attributable to noncontrolling interests - net of tax
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6
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14
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16
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26
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Comprehensive income (loss) attributable to Corteva
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$
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848
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$
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(763
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)
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$
|
457
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$
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(673
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)
|
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(In millions, except share amounts)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
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Assets
|
|
|
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|
||||
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Current assets
|
|
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||||
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Cash and cash equivalents
|
$
|
2,809
|
|
$
|
1,764
|
|
$
|
2,077
|
|
|
Marketable securities
|
60
|
|
5
|
|
6
|
|
|||
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Accounts and notes receivable - net
|
6,772
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|
5,528
|
|
7,434
|
|
|||
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Inventories
|
3,589
|
|
5,032
|
|
3,918
|
|
|||
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Other current assets
|
1,192
|
|
1,190
|
|
1,010
|
|
|||
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Total current assets
|
14,422
|
|
13,519
|
|
14,445
|
|
|||
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Investment in nonconsolidated affiliates
|
62
|
|
66
|
|
64
|
|
|||
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Property, plant and equipment - net of accumulated depreciation (June 30, 2020 - $3,565; December 31, 2019 - $3,326; June 30, 2019 - $3,207)
|
4,293
|
|
4,546
|
|
4,543
|
|
|||
|
Goodwill
|
10,069
|
|
10,229
|
|
10,249
|
|
|||
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Other intangible assets
|
11,070
|
|
11,424
|
|
11,832
|
|
|||
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Deferred income taxes
|
290
|
|
287
|
|
325
|
|
|||
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Other assets
|
1,974
|
|
2,326
|
|
2,464
|
|
|||
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Total Assets
|
$
|
42,180
|
|
$
|
42,397
|
|
$
|
43,922
|
|
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Liabilities and Equity
|
|
|
|
|
|
||||
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Current liabilities
|
|
|
|
|
|
||||
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Short-term borrowings and finance lease obligations
|
$
|
1,529
|
|
$
|
7
|
|
$
|
2,058
|
|
|
Accounts payable
|
2,891
|
|
3,702
|
|
3,139
|
|
|||
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Income taxes payable
|
369
|
|
95
|
|
282
|
|
|||
|
Accrued and other current liabilities
|
2,740
|
|
4,434
|
|
3,135
|
|
|||
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Total current liabilities
|
7,529
|
|
8,238
|
|
8,614
|
|
|||
|
Long-Term Debt
|
1,102
|
|
115
|
|
117
|
|
|||
|
Other Noncurrent Liabilities
|
|
|
|
|
|
||||
|
Deferred income tax liabilities
|
752
|
|
920
|
|
1,430
|
|
|||
|
Pension and other post employment benefits - noncurrent
|
6,039
|
|
6,377
|
|
5,538
|
|
|||
|
Other noncurrent obligations
|
1,957
|
|
2,192
|
|
2,156
|
|
|||
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Total noncurrent liabilities
|
9,850
|
|
9,604
|
|
9,241
|
|
|||
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Commitments and contingent liabilities
|
|
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||||||
|
Stockholders’ equity
|
|
|
|
|
|
||||
|
Common stock, $0.01 par value; 1,666,667,000 shares authorized;
issued at June 30, 2020 - 748,485,000; December 31, 2019 - 748,577,000; and June 30, 2019 - 748,815,000
|
7
|
|
7
|
|
7
|
|
|||
|
Additional paid-in capital
|
27,891
|
|
27,997
|
|
28,081
|
|
|||
|
Retained earnings / (accumulated deficit)
|
508
|
|
(425
|
)
|
97
|
|
|||
|
Accumulated other comprehensive loss
|
(3,845
|
)
|
(3,270
|
)
|
(2,375
|
)
|
|||
|
Total Corteva stockholders’ equity
|
24,561
|
|
24,309
|
|
25,810
|
|
|||
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Noncontrolling interests
|
240
|
|
246
|
|
257
|
|
|||
|
Total equity
|
24,801
|
|
24,555
|
|
26,067
|
|
|||
|
Total Liabilities and Equity
|
$
|
42,180
|
|
$
|
42,397
|
|
$
|
43,922
|
|
|
(In millions)
|
Six Months Ended
June 30, |
|||||
|
|
2020
|
20191
|
||||
|
Operating activities
|
|
|
||||
|
Net income (loss)
|
$
|
1,048
|
|
$
|
(418
|
)
|
|
Adjustments to reconcile net income (loss) to cash used for operating activities:
|
|
|
|
|
||
|
Depreciation and amortization
|
583
|
|
1,084
|
|
||
|
Benefit from deferred income tax
|
(136
|
)
|
(473
|
)
|
||
|
Net periodic pension benefit
|
(202
|
)
|
(146
|
)
|
||
|
Pension contributions
|
(39
|
)
|
(92
|
)
|
||
|
Net loss (gain) on sales of property, businesses, consolidated companies and investments
|
30
|
|
(67
|
)
|
||
|
Restructuring and asset related charges - net
|
249
|
|
238
|
|
||
|
Amortization of inventory step-up
|
—
|
|
257
|
|
||
|
Goodwill impairment charge
|
—
|
|
1,102
|
|
||
|
Loss on early extinguishment of debt
|
—
|
|
13
|
|
||
|
Other net loss
|
185
|
|
172
|
|
||
|
Changes in operating assets and liabilities - net
|
(2,587
|
)
|
(2,758
|
)
|
||
|
Cash used for operating activities
|
(869
|
)
|
(1,088
|
)
|
||
|
Investing activities
|
|
|
|
|||
|
Capital expenditures
|
(202
|
)
|
(834
|
)
|
||
|
Proceeds from sales of property, businesses and consolidated companies - net of cash divested
|
18
|
|
125
|
|
||
|
Acquisitions of businesses - net of cash acquired
|
—
|
|
(9
|
)
|
||
|
Proceeds from sales of ownership interests in nonconsolidated affiliates
|
—
|
|
21
|
|
||
|
Purchases of investments
|
(361
|
)
|
(13
|
)
|
||
|
Proceeds from sales and maturities of investments
|
298
|
|
37
|
|
||
|
Other investing activities - net
|
(5
|
)
|
(1
|
)
|
||
|
Cash used for investing activities
|
(252
|
)
|
(674
|
)
|
||
|
Financing activities
|
|
|
|
|||
|
Net change in borrowings (less than 90 days)
|
966
|
|
173
|
|
||
|
Proceeds from debt
|
2,434
|
|
1,001
|
|
||
|
Payments on debt
|
(879
|
)
|
(6,803
|
)
|
||
|
Repurchase of common stock
|
(50
|
)
|
—
|
|
||
|
Proceeds from exercise of stock options
|
17
|
|
39
|
|
||
|
Dividends paid to stockholders
|
(194
|
)
|
—
|
|
||
|
Payment for acquisition of subsidiary's interest from the non-controlling interest
|
(60
|
)
|
—
|
|
||
|
Distributions to DowDuPont
|
—
|
|
(317
|
)
|
||
|
Cash transferred to DowDuPont at Internal Reorganizations
|
—
|
|
(2,053
|
)
|
||
|
Contributions from Dow and DowDuPont
|
—
|
|
7,396
|
|
||
|
Debt extinguishment costs
|
—
|
|
(79
|
)
|
||
|
Other financing activities
|
(20
|
)
|
(42
|
)
|
||
|
Cash provided by (used for) financing activities
|
2,214
|
|
(685
|
)
|
||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(95
|
)
|
(64
|
)
|
||
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
998
|
|
(2,511
|
)
|
||
|
Cash, cash equivalents and restricted cash at beginning of period
|
2,173
|
|
5,024
|
|
||
|
Cash, cash equivalents and restricted cash at end of period2
|
$
|
3,171
|
|
$
|
2,513
|
|
|
(In millions)
|
Common Stock
|
Additional Paid-in Capital
|
Divisional Equity
|
Retained Earnings (Accumulated deficit)
|
Accumulated Other Comp (Loss) Income
|
Non-controlling Interests
|
Total Equity
|
||||||||||||||
|
2019
|
|
|
|
|
|
|
|
||||||||||||||
|
Balance at January 1, 2019
|
$
|
—
|
|
$
|
—
|
|
$
|
78,020
|
|
$
|
—
|
|
$
|
(3,360
|
)
|
$
|
493
|
|
$
|
75,153
|
|
|
Net income
|
|
|
|
|
164
|
|
|
|
|
|
12
|
|
176
|
|
|||||||
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(74
|
)
|
|
|
(74
|
)
|
|||||||
|
Distributions to DowDuPont
|
|
|
|
|
(317
|
)
|
|
|
|
|
|
|
(317
|
)
|
|||||||
|
Issuance of DowDuPont stock
|
|
|
|
|
35
|
|
|
|
|
|
|
|
35
|
|
|||||||
|
Share-based compensation
|
|
|
|
|
18
|
|
|
|
|
|
|
|
18
|
|
|||||||
|
Contributions from Dow
|
|
|
|
|
88
|
|
|
|
|
|
|
|
88
|
|
|||||||
|
Other - net
|
|
|
|
|
(3
|
)
|
|
|
|
|
(2
|
)
|
(5
|
)
|
|||||||
|
Balance at March 31, 2019
|
$
|
—
|
|
$
|
—
|
|
$
|
78,005
|
|
$
|
—
|
|
$
|
(3,434
|
)
|
$
|
503
|
|
$
|
75,074
|
|
|
Net (loss) income
|
|
|
(805
|
)
|
197
|
|
|
14
|
|
(594
|
)
|
||||||||||
|
Other comprehensive loss
|
|
|
|
|
(155
|
)
|
|
(155
|
)
|
||||||||||||
|
Common dividends ($0.13 per share)
|
|
|
|
(97
|
)
|
|
|
(97
|
)
|
||||||||||||
|
Contributions from DowDuPont
|
|
|
7,308
|
|
|
|
|
7,308
|
|
||||||||||||
|
Issuance of DowDuPont stock
|
|
|
4
|
|
|
|
|
4
|
|
||||||||||||
|
Share-based compensation
|
|
11
|
|
44
|
|
|
|
|
55
|
|
|||||||||||
|
Impact of Internal Reorganizations
|
|
|
(56,479
|
)
|
|
1,214
|
|
(231
|
)
|
(55,496
|
)
|
||||||||||
|
Reclassification of Divisional Equity to APIC
|
7
|
|
28,070
|
|
(28,077
|
)
|
|
|
|
—
|
|
||||||||||
|
Other
|
|
|
|
(3
|
)
|
|
(29
|
)
|
(32
|
)
|
|||||||||||
|
Balance at June 30, 2019
|
$
|
7
|
|
$
|
28,081
|
|
$
|
—
|
|
$
|
97
|
|
$
|
(2,375
|
)
|
$
|
257
|
|
$
|
26,067
|
|
|
(In millions)
|
Common Stock
|
Additional Paid-in Capital
|
Divisional Equity
|
(Accumulated deficit) Retained Earnings
|
Accumulated Other Comp (Loss) Income
|
Non-controlling Interests
|
Total Equity
|
||||||||||||
|
2020
|
|
|
|
|
|
|
|
|
|||||||||||
|
Balance at January 1, 2020
|
$
|
7
|
|
$
|
27,997
|
|
|
$
|
(425
|
)
|
$
|
(3,270
|
)
|
$
|
246
|
|
$
|
24,555
|
|
|
Net income
|
|
|
|
|
|
272
|
|
|
|
10
|
|
282
|
|
||||||
|
Other comprehensive loss
|
|
|
|
|
|
|
|
(663
|
)
|
|
|
(663
|
)
|
||||||
|
Common dividends ($0.13 per share)
|
|
(97
|
)
|
|
|
|
|
(97
|
)
|
||||||||||
|
Issuance of Corteva stock
|
|
14
|
|
|
|
|
|
14
|
|
||||||||||
|
Share-based compensation
|
|
2
|
|
|
|
|
|
2
|
|
||||||||||
|
Common Stock Repurchase
|
|
(50
|
)
|
|
|
|
|
(50
|
)
|
||||||||||
|
Other - net
|
|
|
40
|
|
|
(2
|
)
|
|
|
(2
|
)
|
36
|
|
||||||
|
Balance at March 31, 2020
|
$
|
7
|
|
$
|
27,906
|
|
|
$
|
(155
|
)
|
$
|
(3,933
|
)
|
$
|
254
|
|
$
|
24,079
|
|
|
Net income
|
|
|
|
760
|
|
|
6
|
|
766
|
|
|||||||||
|
Other comprehensive income
|
|
|
|
|
88
|
|
|
88
|
|
||||||||||
|
Common dividends ($0.13 per share)
|
|
|
|
(97
|
)
|
|
|
(97
|
)
|
||||||||||
|
Issuance of Corteva stock
|
|
3
|
|
|
|
|
|
3
|
|
||||||||||
|
Share-based compensation
|
|
19
|
|
|
|
|
|
19
|
|
||||||||||
|
Acquisition of a noncontrolling interest in consolidated subsidiaries
|
|
(37
|
)
|
|
|
|
(15
|
)
|
(52
|
)
|
|||||||||
|
Other - net
|
|
|
|
|
|
|
(5
|
)
|
(5
|
)
|
|||||||||
|
Balance at June 30, 2020
|
$
|
7
|
|
$
|
27,891
|
|
|
$
|
508
|
|
$
|
(3,845
|
)
|
$
|
240
|
|
$
|
24,801
|
|
|
|
Corteva, Inc.
|
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
|
|
|
Note
|
|
Page
|
|
(In millions)
|
Six Months Ended
June 30, 2019 |
||
|
Net sales
|
$
|
362
|
|
|
Cost of goods sold
|
259
|
|
|
|
Research and development expense
|
4
|
|
|
|
Selling, general and administrative expenses
|
9
|
|
|
|
Amortization of intangibles
|
23
|
|
|
|
Restructuring and asset related charges - net
|
2
|
|
|
|
Integration and separation costs
|
44
|
|
|
|
Other income - net
|
2
|
|
|
|
Income from discontinued operations before income taxes
|
23
|
|
|
|
Provision for income taxes on discontinued operations
|
4
|
|
|
|
Income from discontinued operations after income taxes
|
$
|
19
|
|
|
(In millions)
|
Six Months Ended
June 30, 2019 |
||
|
Depreciation
|
$
|
28
|
|
|
Amortization of intangibles
|
$
|
23
|
|
|
Capital expenditures
|
$
|
16
|
|
|
(In millions)
|
Three Months Ended
June 30, 2019 |
Six Months Ended
June 30, 2019 |
||||
|
Net sales
|
$
|
1,214
|
|
$
|
5,030
|
|
|
Cost of goods sold
|
817
|
|
3,352
|
|
||
|
Research and development expense
|
51
|
|
204
|
|
||
|
Selling, general and administrative expenses
|
172
|
|
573
|
|
||
|
Amortization of intangibles
|
66
|
|
267
|
|
||
|
Restructuring and asset related charges - net
|
72
|
|
115
|
|
||
|
Integration and separation costs
|
89
|
|
253
|
|
||
|
Goodwill impairment
|
1,102
|
|
1,102
|
|
||
|
Other (expense) income - net
|
(82
|
)
|
38
|
|
||
|
Loss from discontinued operations before income taxes
|
(1,237
|
)
|
(798
|
)
|
||
|
Provision for income taxes on discontinued operations
|
6
|
|
104
|
|
||
|
Loss from discontinued operations after income taxes
|
$
|
(1,243
|
)
|
$
|
(902
|
)
|
|
(In millions)
|
Three Months Ended
June 30, 2019 |
Six Months Ended
June 30, 2019 |
||||
|
Depreciation
|
$
|
65
|
|
$
|
281
|
|
|
Amortization of intangibles
|
$
|
66
|
|
$
|
267
|
|
|
Capital expenditures
|
$
|
58
|
|
$
|
481
|
|
|
Contract Balances
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
(In millions)
|
|||||||||
|
Accounts and notes receivable - trade1
|
$
|
5,787
|
|
$
|
4,396
|
|
$
|
6,102
|
|
|
Contract assets - current2
|
$
|
21
|
|
$
|
20
|
|
$
|
19
|
|
|
Contract assets - noncurrent3
|
$
|
51
|
|
$
|
49
|
|
$
|
48
|
|
|
Deferred revenue - current4
|
$
|
431
|
|
$
|
2,584
|
|
$
|
583
|
|
|
Deferred revenue - noncurrent5
|
$
|
109
|
|
$
|
108
|
|
$
|
118
|
|
|
1.
|
Included in accounts and notes receivable - net in the interim Condensed Consolidated Balance Sheets.
|
|
2.
|
Included in other current assets in the interim Condensed Consolidated Balance Sheets.
|
|
3.
|
Included in other assets in the interim Condensed Consolidated Balance Sheets.
|
|
4.
|
Included in accrued and other current liabilities in the interim Condensed Consolidated Balance Sheets.
|
|
5.
|
Included in other noncurrent obligations in the interim Condensed Consolidated Balance Sheets.
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
(In millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Corn
|
$
|
2,057
|
|
$
|
2,309
|
|
$
|
3,921
|
|
$
|
3,777
|
|
|
Soybean
|
1,085
|
|
998
|
|
1,266
|
|
1,129
|
|
||||
|
Other oilseeds
|
219
|
|
200
|
|
467
|
|
425
|
|
||||
|
Other
|
177
|
|
192
|
|
339
|
|
335
|
|
||||
|
Seed
|
3,538
|
|
3,699
|
|
5,993
|
|
5,666
|
|
||||
|
Herbicides1
|
909
|
|
1,003
|
|
1,732
|
|
1,764
|
|
||||
|
Insecticides1
|
445
|
|
452
|
|
823
|
|
828
|
|
||||
|
Fungicides1
|
224
|
|
302
|
|
453
|
|
522
|
|
||||
|
Other1
|
75
|
|
100
|
|
146
|
|
172
|
|
||||
|
Crop Protection
|
1,653
|
|
1,857
|
|
3,154
|
|
3,286
|
|
||||
|
Total
|
$
|
5,191
|
|
$
|
5,556
|
|
$
|
9,147
|
|
$
|
8,952
|
|
|
1.
|
Prior periods have been reclassified to conform to current period presentation.
|
|
Crop Protection
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
(In millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
North America1
|
$
|
663
|
|
$
|
686
|
|
$
|
1,138
|
|
$
|
1,165
|
|
|
EMEA2
|
379
|
|
393
|
|
965
|
|
953
|
|
||||
|
Latin America
|
309
|
|
466
|
|
527
|
|
653
|
|
||||
|
Asia Pacific
|
302
|
|
312
|
|
524
|
|
515
|
|
||||
|
Total
|
$
|
1,653
|
|
$
|
1,857
|
|
$
|
3,154
|
|
$
|
3,286
|
|
|
1.
|
Represents U.S. & Canada.
|
|
2.
|
Europe, Middle East, and Africa ("EMEA").
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||
|
(In millions)
|
2020
|
2020
|
||||
|
Seed
|
$
|
—
|
|
$
|
3
|
|
|
Crop Protection
|
37
|
|
55
|
|
||
|
Corporate expenses
|
4
|
|
46
|
|
||
|
Total
|
$
|
41
|
|
$
|
104
|
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||
|
(In millions)
|
2020
|
2020
|
||||
|
Severance and related benefit costs
|
$
|
4
|
|
$
|
46
|
|
|
Asset related charges
|
37
|
|
58
|
|
||
|
Total restructuring and asset related charges - net
|
$
|
41
|
|
$
|
104
|
|
|
(In millions)
|
Severance and Related Benefit Costs
|
Asset Related
|
Total
|
||||||
|
Balance at December 31, 2019
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Charges to income from continuing operations for the six months ended June 30, 2020
|
46
|
|
58
|
|
104
|
|
|||
|
Payments
|
(2
|
)
|
(2
|
)
|
(4
|
)
|
|||
|
Asset write-offs
|
—
|
|
(52
|
)
|
(52
|
)
|
|||
|
Balance at June 30, 2020
|
$
|
44
|
|
$
|
4
|
|
$
|
48
|
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
(In millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Seed
|
$
|
(3
|
)
|
$
|
49
|
|
$
|
(6
|
)
|
$
|
73
|
|
|
Crop Protection
|
3
|
|
2
|
|
3
|
|
29
|
|
||||
|
Corporate expenses
|
—
|
|
9
|
|
—
|
|
20
|
|
||||
|
Total
|
$
|
—
|
|
$
|
60
|
|
$
|
(3
|
)
|
$
|
122
|
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||
|
(In millions)
|
2019
|
2020
|
2019
|
||||||
|
Severance and related benefit costs
|
$
|
—
|
|
$
|
—
|
|
$
|
14
|
|
|
Contract termination charges
|
49
|
|
—
|
|
69
|
|
|||
|
Asset related (benefits) charges
|
11
|
|
(3
|
)
|
39
|
|
|||
|
Total restructuring and asset related charges (benefits) - net
|
$
|
60
|
|
$
|
(3
|
)
|
$
|
122
|
|
|
(In millions)
|
Severance and Related Benefit Costs
|
Costs Associated with Exit and Disposal Activities1
|
Total
|
||||||
|
Balance at December 31, 2019
|
$
|
29
|
|
$
|
40
|
|
$
|
69
|
|
|
Payments
|
(13
|
)
|
(1
|
)
|
(14
|
)
|
|||
|
Balance at June 30, 2020
|
$
|
16
|
|
$
|
39
|
|
$
|
55
|
|
|
1.
|
Relates primarily to contract terminations charges.
|
|
Other Income - Net
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
(In millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Interest income
|
$
|
9
|
|
$
|
17
|
|
$
|
27
|
|
$
|
33
|
|
|
Equity in losses of affiliates - net
|
(2
|
)
|
(5
|
)
|
(3
|
)
|
(5
|
)
|
||||
|
Net gain (loss) on sales of businesses and other assets1
|
16
|
|
2
|
|
(30
|
)
|
(11
|
)
|
||||
|
Net exchange gains (losses)
|
1
|
|
(32
|
)
|
(60
|
)
|
(59
|
)
|
||||
|
Non-operating pension and other post employment benefit credit2
|
91
|
|
46
|
|
182
|
|
97
|
|
||||
|
Miscellaneous expenses - net3
|
(26
|
)
|
(28
|
)
|
(26
|
)
|
(24
|
)
|
||||
|
Other income - net
|
$
|
89
|
|
$
|
—
|
|
$
|
90
|
|
$
|
31
|
|
|
1.
|
The six months ended June 30, 2020 includes a loss of $(53) million relating to the expected sale of the La Porte site, for which the company signed an agreement in 2020. The six months ended June 30, 2019 includes a loss of $(24) million relating to DAS’s sale of a joint venture related to synergy actions.
|
|
2.
|
Includes non-service related components of net periodic benefit credits (costs) (interest cost, expected return on plan assets, amortization of unrecognized (gain) loss, amortization of prior service benefit and settlement (loss) gain).
|
|
3.
|
Miscellaneous expenses - net, includes losses related to loss on sale of receivables, bank charges and other items.
|
|
(In millions)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Subsidiary Monetary Position (Losses) Gains
|
|
|
|
|
||||||||
|
Pre-tax exchange (losses) gains
|
$
|
(13
|
)
|
$
|
17
|
|
$
|
(239
|
)
|
$
|
7
|
|
|
Local tax benefits (expenses)
|
5
|
|
7
|
|
28
|
|
(3
|
)
|
||||
|
Net after-tax impact from subsidiary exchange (losses) gains
|
$
|
(8
|
)
|
$
|
24
|
|
$
|
(211
|
)
|
$
|
4
|
|
|
|
|
|
|
|
||||||||
|
Hedging Program Gains (Losses)
|
|
|
|
|
||||||||
|
Pre-tax exchange gains (losses)
|
$
|
14
|
|
$
|
(49
|
)
|
$
|
179
|
|
$
|
(66
|
)
|
|
Tax (expenses) benefits
|
(3
|
)
|
11
|
|
(43
|
)
|
15
|
|
||||
|
Net after-tax impact from hedging program exchange gains (losses)
|
$
|
11
|
|
$
|
(38
|
)
|
$
|
136
|
|
$
|
(51
|
)
|
|
|
|
|
|
|
||||||||
|
Total Exchange Gains (Losses)
|
|
|
|
|
||||||||
|
Pre-tax exchange gains (losses)
|
$
|
1
|
|
$
|
(32
|
)
|
$
|
(60
|
)
|
$
|
(59
|
)
|
|
Tax benefits (expenses)
|
2
|
|
18
|
|
(15
|
)
|
12
|
|
||||
|
Net after-tax exchange gains (losses)
|
$
|
3
|
|
$
|
(14
|
)
|
$
|
(75
|
)
|
$
|
(47
|
)
|
|
(In millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
Cash and cash equivalents
|
$
|
2,809
|
|
$
|
1,764
|
|
$
|
2,077
|
|
|
Restricted cash
|
362
|
|
409
|
|
436
|
|
|||
|
Total cash, cash equivalents and restricted cash
|
$
|
3,171
|
|
$
|
2,173
|
|
$
|
2,513
|
|
|
Net Income (Loss) for Earnings Per Share Calculations - Basic and Diluted
|
Three Months Ended
June 30 |
Six Months Ended
June 30 |
||||||||||
|
(In millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Income from continuing operations after income taxes
|
$
|
766
|
|
$
|
483
|
|
$
|
1,047
|
|
$
|
299
|
|
|
Net income attributable to continuing operations noncontrolling interests
|
6
|
|
13
|
|
16
|
|
21
|
|
||||
|
Income from continuing operations available to Corteva common stockholders
|
760
|
|
470
|
|
1,031
|
|
278
|
|
||||
|
(Loss) income from discontinued operations, net of tax
|
—
|
|
(1,077
|
)
|
1
|
|
(717
|
)
|
||||
|
Net income attributable to discontinued operations noncontrolling interests
|
—
|
|
1
|
|
—
|
|
5
|
|
||||
|
(Loss) income from discontinued operations available to Corteva common stockholders
|
—
|
|
(1,078
|
)
|
1
|
|
(722
|
)
|
||||
|
Net income (loss) available to common stockholders
|
$
|
760
|
|
$
|
(608
|
)
|
$
|
1,032
|
|
$
|
(444
|
)
|
|
Earnings (Loss) Per Share Calculations - Basic
|
Three Months Ended
June 30 |
Six Months Ended
June 30 |
||||||||||
|
(Dollars per share)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Earnings per share of common stock from continuing operations
|
$
|
1.01
|
|
$
|
0.63
|
|
$
|
1.37
|
|
$
|
0.37
|
|
|
Loss per share of common stock from discontinued operations
|
—
|
|
(1.44
|
)
|
—
|
|
(0.96
|
)
|
||||
|
Earnings (loss) per share of common stock
|
$
|
1.01
|
|
$
|
(0.81
|
)
|
$
|
1.37
|
|
$
|
(0.59
|
)
|
|
Earnings (Loss) Per Share Calculations - Diluted
|
Three Months Ended
June 30 |
Six Months Ended
June 30 |
||||||||||
|
(Dollars per share)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Earnings per share of common stock from continuing operations
|
$
|
1.01
|
|
$
|
0.63
|
|
$
|
1.37
|
|
$
|
0.37
|
|
|
Loss per share of common stock from discontinued operations
|
—
|
|
(1.44
|
)
|
—
|
|
(0.96
|
)
|
||||
|
Earnings (loss) per share of common stock
|
$
|
1.01
|
|
$
|
(0.81
|
)
|
$
|
1.37
|
|
$
|
(0.59
|
)
|
|
Share Count Information
|
Three Months Ended
June 30 |
Six Months Ended
June 30 |
||||||
|
(Shares in millions)
|
2020
|
2019
|
2020
|
2019
|
||||
|
Weighted-average common shares - basic1
|
749.2
|
|
749.4
|
|
749.6
|
|
749.4
|
|
|
Plus dilutive effect of equity compensation plans2
|
2.4
|
|
0.6
|
|
2.4
|
|
0.3
|
|
|
Weighted-average common shares - diluted
|
751.6
|
|
750.0
|
|
752.0
|
|
749.7
|
|
|
Potential shares of common stock excluded from EPS calculations3
|
11.9
|
|
7.8
|
|
11.0
|
|
7.8
|
|
|
1.
|
Share amounts for all periods prior to the Corteva Distribution were based on 748.8 million shares of Corteva, Inc. common stock distributed to holders of DowDuPont's common stock on June 1, 2019, plus 0.6 million of additional shares in which accelerated vesting conditions have been met.
|
|
2.
|
Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect.
|
|
3.
|
These outstanding potential shares of common stock relating to stock options, restricted stock units and performance-based restricted stock units were excluded from the calculation of diluted earnings per share because the effect of including them would have been anti-dilutive.
|
|
(In millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
Accounts receivable – trade1
|
$
|
4,396
|
|
$
|
4,225
|
|
$
|
4,811
|
|
|
Notes receivable – trade1,2
|
1,391
|
|
171
|
|
1,291
|
|
|||
|
Other3
|
985
|
|
1,132
|
|
1,332
|
|
|||
|
Total accounts and notes receivable - net
|
$
|
6,772
|
|
$
|
5,528
|
|
$
|
7,434
|
|
|
1.
|
Accounts receivable – trade and notes receivable - trade are net of allowances of $207 million at June 30, 2020, $174 million at December 31, 2019, and $152 million at June 30, 2019. The allowance at June 30, 2020 is equal to the expected credit losses and was developed using a loss-rate method. The allowance at December 31, 2019 and June 30, 2019 is equal to the estimated uncollectible amounts and is based on historical collection experience, current economic and market conditions, and review of the current status of customers' accounts.
|
|
2.
|
Notes receivable – trade primarily consists of receivables for deferred payment loan programs for the sale of seed products to customers. These loans have terms of one year or less and are primarily concentrated in North America. The company maintains a rigid pre-approval process for extending credit to customers in order to manage overall risk and exposure associated with credit losses. As of June 30, 2020, December 31, 2019, and June 30, 2019 there were no significant impairments related to current loan agreements.
|
|
3.
|
Other includes receivables in relation to indemnification assets, value added tax, general sales tax and other taxes. No individual group represents more than 10 percent of total receivables. In addition, Other includes amounts due from nonconsolidated affiliates of $114 million, $119 million, and $126 million as of June 30, 2020, December 31, 2019, and June 30, 2019, respectively.
|
|
(In millions)
|
|||
|
Balance at December 31, 2019
|
$
|
174
|
|
|
Additions charged to expenses
|
124
|
|
|
|
Write-offs charged against allowance
|
(6
|
)
|
|
|
Recoveries collected
|
(78
|
)
|
|
|
Other
|
(7
|
)
|
|
|
Balance at June 30, 2020
|
$
|
207
|
|
|
(In millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
Finished products
|
$
|
1,831
|
|
$
|
2,684
|
|
$
|
2,103
|
|
|
Semi-finished products
|
1,364
|
|
1,850
|
|
1,373
|
|
|||
|
Raw materials and supplies
|
394
|
|
498
|
|
442
|
|
|||
|
Total inventories
|
$
|
3,589
|
|
$
|
5,032
|
|
$
|
3,918
|
|
|
(In millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||||||||||||||||||||
|
|
Gross
|
Accumulated
Amortization
|
Net
|
Gross
|
Accumulated
Amortization
|
Net
|
Gross
|
Accumulated
Amortization
|
Net
|
||||||||||||||||||
|
Intangible assets subject to amortization (Definite-lived):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Germplasm1
|
$
|
6,265
|
|
$
|
(190
|
)
|
$
|
6,075
|
|
$
|
6,265
|
|
$
|
(63
|
)
|
$
|
6,202
|
|
|
|
|
||||||
|
Customer-related
|
1,961
|
|
(322
|
)
|
1,639
|
|
1,977
|
|
(268
|
)
|
1,709
|
|
$
|
1,981
|
|
$
|
(211
|
)
|
$
|
1,770
|
|
||||||
|
Developed technology
|
1,463
|
|
(462
|
)
|
1,001
|
|
1,463
|
|
(370
|
)
|
1,093
|
|
1,467
|
|
(297
|
)
|
1,170
|
|
|||||||||
|
Trademarks/trade names
|
161
|
|
(85
|
)
|
76
|
|
166
|
|
(86
|
)
|
80
|
|
166
|
|
(83
|
)
|
83
|
|
|||||||||
|
Favorable supply contracts
|
475
|
|
(255
|
)
|
220
|
|
475
|
|
(207
|
)
|
268
|
|
475
|
|
(159
|
)
|
316
|
|
|||||||||
|
Other2
|
405
|
|
(227
|
)
|
178
|
|
404
|
|
(213
|
)
|
191
|
|
429
|
|
(218
|
)
|
211
|
|
|||||||||
|
Total other intangible assets with finite lives
|
10,730
|
|
(1,541
|
)
|
9,189
|
|
10,750
|
|
(1,207
|
)
|
9,543
|
|
4,518
|
|
(968
|
)
|
3,550
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Intangible assets not subject to amortization (Indefinite-lived):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
IPR&D
|
10
|
|
—
|
|
10
|
|
10
|
|
—
|
|
10
|
|
146
|
|
—
|
|
146
|
|
|||||||||
|
Germplasm1
|
|
|
|
|
|
|
6,265
|
|
—
|
|
6,265
|
|
|||||||||||||||
|
Tradename
|
1,871
|
|
—
|
|
1,871
|
|
1,871
|
|
—
|
|
1,871
|
|
1,871
|
|
—
|
|
1,871
|
|
|||||||||
|
Total other intangible assets
|
1,881
|
|
—
|
|
1,881
|
|
1,881
|
|
—
|
|
1,881
|
|
8,282
|
|
—
|
|
8,282
|
|
|||||||||
|
Total
|
$
|
12,611
|
|
$
|
(1,541
|
)
|
$
|
11,070
|
|
$
|
12,631
|
|
$
|
(1,207
|
)
|
$
|
11,424
|
|
$
|
12,800
|
|
$
|
(968
|
)
|
$
|
11,832
|
|
|
1.
|
Beginning on October 1, 2019, the company changed its indefinite life assertion of the germplasm assets to definite lived with a useful life of 25 years. This change is the result of a more focused development effort of new seed products coupled with an intent to out license select germplasm on a non-exclusive basis. Prior to changing the useful life of the germplasm assets, the company tested the assets for impairment under ASC 350 - Intangibles, Goodwill and Other, concluding the assets were not impaired.
|
|
2.
|
Primarily consists of sales and farmer networks, marketing and manufacturing alliances and noncompetition agreements.
|
|
Short-term borrowings and finance lease obligations
|
|
|
|
||||||
|
(In millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
Commercial paper
|
$
|
671
|
|
$
|
—
|
|
$
|
1,107
|
|
|
Repurchase facility
|
800
|
|
—
|
|
777
|
|
|||
|
Other loans - various currencies
|
55
|
|
2
|
|
154
|
|
|||
|
Long-term debt payable within one year
|
1
|
|
1
|
|
2
|
|
|||
|
Finance lease obligations payable within one year
|
2
|
|
4
|
|
18
|
|
|||
|
Total short-term borrowings and finance lease obligations
|
$
|
1,529
|
|
$
|
7
|
|
$
|
2,058
|
|
|
Long-Term Debt
|
|
||||||||||||||
|
(In millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||||||||
|
Amount
|
Weighted Average Rate
|
Amount
|
Weighted Average Rate
|
Amount
|
Weighted Average Rate
|
||||||||||
|
Promissory notes and debentures:
|
|
|
|
|
|
|
|||||||||
|
Maturing in 2025
|
$
|
500
|
|
1.70
|
%
|
$
|
—
|
|
—
|
%
|
$
|
—
|
|
—
|
%
|
|
Maturing in 2030
|
500
|
|
2.30
|
%
|
|
|
|
|
|||||||
|
Other loans:
|
|
|
|
|
|
|
|||||||||
|
Foreign currency loans, various rates and maturities
|
1
|
|
|
2
|
|
|
3
|
|
|
||||||
|
Medium-term notes, varying maturities through 2041
|
109
|
|
0.20
|
%
|
109
|
|
1.61
|
%
|
110
|
|
2.17
|
%
|
|||
|
Finance lease obligations
|
5
|
|
|
5
|
|
|
6
|
|
|
||||||
|
Less: Unamortized debt discount and issuance costs
|
12
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Less: Long-term debt due within one year
|
1
|
|
|
1
|
|
|
2
|
|
|
||||||
|
Total
|
$
|
1,102
|
|
|
|
$
|
115
|
|
|
$
|
117
|
|
|
||
|
|
As of June 30, 2020
|
||||||||
|
(In millions)
|
Indemnification Asset
|
Accrual balance3
|
Potential exposure above amount accrued3
|
||||||
|
Environmental Remediation Stray Liabilities
|
|
|
|
||||||
|
Chemours related obligations - subject to indemnity1,2
|
$
|
158
|
|
$
|
158
|
|
$
|
289
|
|
|
Other discontinued or divested businesses obligations1
|
|
|
88
|
|
222
|
|
|||
|
|
|
|
|
||||||
|
Environmental remediation liabilities primarily related to DuPont - subject to indemnity from DuPont2
|
34
|
|
34
|
|
62
|
|
|||
|
|
|
|
|
||||||
|
Environmental remediation liabilities not subject to indemnity
|
|
|
70
|
|
47
|
|
|||
|
Total
|
$
|
192
|
|
$
|
350
|
|
$
|
620
|
|
|
1.
|
Represents liabilities that are subject the $200 million thresholds and sharing arrangements as discussed on page 27, under Corteva Separation Agreement.
|
|
2.
|
The company has recorded an indemnification asset related to these accruals, including $30 million related to the Superfund sites.
|
|
3.
|
Accrual balance represents management’s best estimate of the costs of remediation and restoration, although it is reasonably possible that the potential exposure, as indicated, could range above the amounts accrued, as there are inherent uncertainties in these estimates.
|
|
Shares of common stock
|
Issued
|
|
|
Balance January 1, 2020
|
748,577,000
|
|
|
Issued
|
1,773,000
|
|
|
Repurchased and retired
|
(1,865,000
|
)
|
|
Balance June 30, 2020
|
748,485,000
|
|
|
Shares in thousands
|
Number of Shares
|
|
Authorized
|
23,000
|
|
$4.50 Series, callable at $120
|
1,673
|
|
$3.50 Series, callable at $102
|
700
|
|
(In millions)
|
Cumulative Translation Adjustment1
|
Derivative Instruments
|
Pension Benefit Plans
|
Other Benefit Plans
|
Total
|
||||||||||
|
2019
|
|
|
|
|
|
||||||||||
|
Balance January 1, 2019
|
$
|
(2,793
|
)
|
$
|
(26
|
)
|
$
|
(620
|
)
|
$
|
79
|
|
$
|
(3,360
|
)
|
|
Other comprehensive (loss) income before reclassifications
|
(174
|
)
|
12
|
|
6
|
|
(85
|
)
|
(241
|
)
|
|||||
|
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
11
|
|
2
|
|
(1
|
)
|
12
|
|
|||||
|
Net other comprehensive (loss) income
|
(174
|
)
|
23
|
|
8
|
|
(86
|
)
|
(229
|
)
|
|||||
|
Impact of Internal Reorganizations
|
1,113
|
|
—
|
|
101
|
|
—
|
|
1,214
|
|
|||||
|
Balance June 30, 2019
|
$
|
(1,854
|
)
|
$
|
(3
|
)
|
$
|
(511
|
)
|
$
|
(7
|
)
|
$
|
(2,375
|
)
|
|
|
|
|
|
|
|
||||||||||
|
2020
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Balance January 1, 2020
|
$
|
(1,944
|
)
|
$
|
2
|
|
$
|
(1,247
|
)
|
$
|
(81
|
)
|
$
|
(3,270
|
)
|
|
Other comprehensive (loss) income before reclassifications
|
(575
|
)
|
(22
|
)
|
(9
|
)
|
2
|
|
(604
|
)
|
|||||
|
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
26
|
|
3
|
|
—
|
|
29
|
|
|||||
|
Net other comprehensive (loss) income
|
(575
|
)
|
4
|
|
(6
|
)
|
2
|
|
(575
|
)
|
|||||
|
Balance June 30, 2020
|
$
|
(2,519
|
)
|
$
|
6
|
|
$
|
(1,253
|
)
|
$
|
(79
|
)
|
$
|
(3,845
|
)
|
|
1.
|
The cumulative translation adjustment loss for the six months ended June 30, 2019 was primarily driven by the weakening of the European Euro (“EUR”) against the USD. The cumulative translation adjustment loss for the six months ended June 30, 2020 was primarily driven by the weakening of the Brazilian Real (“BRL”) and the South African Rand (“ZAR”) against the USD.
|
|
(In millions)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Derivative instruments
|
$
|
(3
|
)
|
$
|
(4
|
)
|
$
|
2
|
|
$
|
(7
|
)
|
|
Pension benefit plans - net
|
1
|
|
11
|
|
(3
|
)
|
4
|
|
||||
|
Other benefit plans - net
|
—
|
|
29
|
|
—
|
|
29
|
|
||||
|
(Provision for) benefit from income taxes related to other comprehensive (loss) income items
|
$
|
(2
|
)
|
$
|
36
|
|
$
|
(1
|
)
|
$
|
26
|
|
|
(In millions)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Derivative Instruments1:
|
$
|
28
|
|
$
|
8
|
|
$
|
35
|
|
$
|
12
|
|
|
Tax benefit2
|
(7
|
)
|
(2
|
)
|
(9
|
)
|
(1
|
)
|
||||
|
After-tax
|
$
|
21
|
|
$
|
6
|
|
$
|
26
|
|
$
|
11
|
|
|
Amortization of pension benefit plans:
|
|
|
|
|
||||||||
|
Prior service benefit3
|
$
|
(1
|
)
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
—
|
|
|
Actuarial losses3
|
1
|
|
—
|
|
2
|
|
1
|
|
||||
|
Settlement loss3
|
1
|
|
1
|
|
3
|
|
1
|
|
||||
|
Total before tax
|
1
|
|
1
|
|
4
|
|
2
|
|
||||
|
Tax benefit2
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
||||
|
After-tax
|
$
|
1
|
|
$
|
1
|
|
$
|
3
|
|
$
|
2
|
|
|
Amortization of other benefit plans:
|
|
|
|
|
||||||||
|
Actuarial gains3
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
—
|
|
$
|
(1
|
)
|
|
Total before tax
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
||||
|
Tax benefit
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
|
After-tax
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
—
|
|
$
|
(1
|
)
|
|
Total reclassifications for the period, after-tax
|
$
|
22
|
|
$
|
6
|
|
$
|
29
|
|
$
|
12
|
|
|
1.
|
Reflected in cost of goods sold.
|
|
2.
|
Reflected in provision for (benefit from) income taxes from continuing operations.
|
|
3.
|
These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit (credit) cost of the company's pension and other benefit plans. See Note 16 - Pension Plans and Other Post Employment Benefits, for additional information.
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||
|
(In millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Defined Benefit Pension Plans:
|
|
|
|
|
||||||||
|
Service cost
|
$
|
8
|
|
$
|
12
|
|
$
|
13
|
|
$
|
32
|
|
|
Interest cost
|
140
|
|
199
|
|
281
|
|
407
|
|
||||
|
Expected return on plan assets
|
(249
|
)
|
(282
|
)
|
(500
|
)
|
(586
|
)
|
||||
|
Amortization of unrecognized loss
|
1
|
|
1
|
|
2
|
|
2
|
|
||||
|
Amortization of prior service benefit
|
(1
|
)
|
—
|
|
(1
|
)
|
—
|
|
||||
|
Settlement/curtailment loss (gain)
|
1
|
|
(1
|
)
|
3
|
|
(1
|
)
|
||||
|
Net periodic benefit credit - Total
|
$
|
(100
|
)
|
$
|
(71
|
)
|
$
|
(202
|
)
|
$
|
(146
|
)
|
|
Less: Discontinued operations1
|
—
|
|
(9
|
)
|
—
|
|
(17
|
)
|
||||
|
Net periodic benefit credit - Continuing operations
|
$
|
(100
|
)
|
$
|
(62
|
)
|
$
|
(202
|
)
|
$
|
(129
|
)
|
|
Other Post Employment Benefits:
|
|
|
|
|
||||||||
|
Service cost
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
$
|
3
|
|
|
Interest cost
|
17
|
|
22
|
|
33
|
|
45
|
|
||||
|
Amortization of unrecognized gain
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
||||
|
Net periodic benefit cost - Continuing operations
|
$
|
17
|
|
$
|
22
|
|
$
|
34
|
|
$
|
47
|
|
|
1.
|
Includes non-service related components of net periodic benefit credit of $(16) million and $(37) million for the three and six months ended June 30, 2019, respectively.
|
|
Notional Amounts
(In millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
Derivatives designated as hedging instruments:
|
|
|
|
||||||
|
Foreign currency contracts
|
$
|
721
|
|
$
|
—
|
|
$
|
—
|
|
|
Commodity contracts
|
$
|
165
|
|
$
|
570
|
|
$
|
76
|
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||
|
Foreign currency contracts
|
$
|
770
|
|
$
|
582
|
|
$
|
1,558
|
|
|
Commodity contracts
|
$
|
19
|
|
$
|
—
|
|
$
|
38
|
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
(In millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Beginning balance
|
$
|
(15
|
)
|
$
|
(25
|
)
|
$
|
2
|
|
$
|
(26
|
)
|
|
Additions and revaluations of derivatives designated as cash flow hedges
|
(22
|
)
|
16
|
|
(44
|
)
|
12
|
|
||||
|
Clearance of hedge results to earnings
|
21
|
|
6
|
|
26
|
|
11
|
|
||||
|
Ending balance
|
$
|
(16
|
)
|
$
|
(3
|
)
|
$
|
(16
|
)
|
$
|
(3
|
)
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||
|
(In millions)
|
2020
|
2020
|
||||
|
Beginning balance
|
$
|
16
|
|
$
|
—
|
|
|
Additions and revaluations of derivatives designated as cash flow hedges
|
3
|
|
19
|
|
||
|
Ending balance
|
$
|
19
|
|
$
|
19
|
|
|
|
|
June 30, 2020
|
||||||||
|
(In millions)
|
Balance Sheet Location
|
Gross
|
Counterparty and Cash Collateral Netting1
|
Net Amounts Included in the Condensed Consolidated Balance Sheet
|
||||||
|
Asset derivatives:
|
|
|
|
|
||||||
|
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||
|
Foreign currency contracts
|
Other current assets
|
$
|
19
|
|
$
|
—
|
|
$
|
19
|
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|||||
|
Foreign currency contracts
|
Other current assets
|
101
|
|
(57
|
)
|
44
|
|
|||
|
Total asset derivatives
|
|
$
|
120
|
|
$
|
(57
|
)
|
$
|
63
|
|
|
|
|
|
|
|
||||||
|
Liability derivatives:
|
|
|
|
|
|
|||||
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
|
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
65
|
|
$
|
(56
|
)
|
$
|
9
|
|
|
Total liability derivatives
|
|
$
|
65
|
|
$
|
(56
|
)
|
$
|
9
|
|
|
|
|
December 31, 2019
|
||||||||
|
(In millions)
|
Balance Sheet Location
|
Gross
|
Counterparty and Cash Collateral Netting1
|
Net Amounts Included in the Condensed Consolidated Balance Sheet
|
||||||
|
Asset derivatives:
|
|
|
|
|
||||||
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|||||
|
Foreign currency contracts
|
Other current assets
|
$
|
25
|
|
$
|
(18
|
)
|
$
|
7
|
|
|
Total asset derivatives
|
|
$
|
25
|
|
$
|
(18
|
)
|
$
|
7
|
|
|
|
|
|
|
|
||||||
|
Liability derivatives:
|
|
|
|
|
|
|||||
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
|
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
43
|
|
$
|
(16
|
)
|
$
|
27
|
|
|
Total liability derivatives
|
|
$
|
43
|
|
$
|
(16
|
)
|
$
|
27
|
|
|
|
|
June 30, 2019
|
||||||||
|
(In millions)
|
Balance Sheet Location
|
Gross
|
Counterparty and Cash Collateral Netting1
|
Net Amounts Included in the Condensed Consolidated Balance Sheet
|
||||||
|
Asset derivatives:
|
|
|
|
|
||||||
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|||||
|
Foreign currency contracts
|
Other current assets
|
$
|
36
|
|
$
|
(33
|
)
|
$
|
3
|
|
|
Total asset derivatives
|
|
$
|
36
|
|
$
|
(33
|
)
|
$
|
3
|
|
|
|
|
|
|
|
||||||
|
Liability derivatives:
|
|
|
|
|
|
|||||
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
|
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
48
|
|
$
|
(27
|
)
|
$
|
21
|
|
|
Total liability derivatives
|
|
$
|
48
|
|
$
|
(27
|
)
|
$
|
21
|
|
|
1.
|
Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
|
|
Amount of (Loss) Gain Recognized in OCI1 - Pre-Tax
|
|||||||||||
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
(In millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||||
|
Net Investment Hedges:
|
|
|
|
|
||||||||
|
Foreign currency contracts
|
$
|
(5
|
)
|
$
|
—
|
|
$
|
4
|
|
$
|
—
|
|
|
Cash flow hedges:
|
|
|
|
|
||||||||
|
Foreign currency contracts
|
4
|
|
—
|
|
23
|
|
—
|
|
||||
|
Commodity contracts
|
(26
|
)
|
18
|
|
(60
|
)
|
19
|
|
||||
|
Total derivatives designated as hedging instruments
|
(27
|
)
|
18
|
|
(33
|
)
|
19
|
|
||||
|
Total derivatives
|
$
|
(27
|
)
|
$
|
18
|
|
$
|
(33
|
)
|
$
|
19
|
|
|
1.
|
OCI is defined as other comprehensive income (loss).
|
|
|
Amount of Gain (Loss) Recognized in Income - Pre-Tax1
|
|||||||||||
|
(In millions)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||||
|
Cash flow hedges:
|
|
|
|
|
||||||||
|
Commodity contracts2
|
$
|
(28
|
)
|
$
|
(8
|
)
|
$
|
(35
|
)
|
$
|
(12
|
)
|
|
Total derivatives designated as hedging instruments
|
(28
|
)
|
(8
|
)
|
(35
|
)
|
(12
|
)
|
||||
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||||
|
Foreign currency contracts3
|
14
|
|
(49
|
)
|
179
|
|
(66
|
)
|
||||
|
Foreign currency contracts2
|
17
|
|
—
|
|
17
|
|
—
|
|
||||
|
Commodity contracts2
|
1
|
|
2
|
|
10
|
|
8
|
|
||||
|
Total derivatives not designated as hedging instruments
|
32
|
|
(47
|
)
|
206
|
|
(58
|
)
|
||||
|
Total derivatives
|
$
|
4
|
|
$
|
(55
|
)
|
$
|
171
|
|
$
|
(70
|
)
|
|
1.
|
For cash flow hedges, this represents the portion of the gain (loss) reclassified from accumulated OCI into income during the period.
|
|
2.
|
Recorded in cost of goods sold.
|
|
3.
|
Gain recognized in other income - net was partially offset by the related gain on the foreign currency-denominated monetary assets and liabilities of the company's operations. See Note 7 - Supplementary Information, for additional information.
|
|
June 30, 2020
|
Significant Other Observable Inputs (Level 2)
|
||
|
(In millions)
|
|||
|
Assets at fair value:
|
|
||
|
Cash equivalents and restricted cash equivalents1
|
$
|
2,073
|
|
|
Marketable securities
|
60
|
|
|
|
Derivatives relating to:2
|
|
||
|
Foreign currency
|
120
|
|
|
|
Total assets at fair value
|
$
|
2,253
|
|
|
Liabilities at fair value:
|
|
||
|
Derivatives relating to:2
|
|
||
|
Foreign currency
|
65
|
|
|
|
Total liabilities at fair value
|
$
|
65
|
|
|
December 31, 2019
|
Significant Other Observable Inputs (Level 2)
|
||
|
(In millions)
|
|||
|
Assets at fair value:
|
|
||
|
Cash equivalents and restricted cash equivalents1
|
$
|
1,293
|
|
|
Marketable securities
|
5
|
|
|
|
Derivatives relating to:2
|
|
||
|
Foreign currency
|
25
|
|
|
|
Total assets at fair value
|
$
|
1,323
|
|
|
Liabilities at fair value:
|
|
||
|
Derivatives relating to:2
|
|
|
|
|
Foreign currency
|
43
|
|
|
|
Total liabilities at fair value
|
$
|
43
|
|
|
June 30, 2019
|
Significant Other Observable Inputs (Level 2)
|
||
|
(In millions)
|
|||
|
Assets at fair value:
|
|
||
|
Cash equivalents and restricted cash equivalents1
|
$
|
1,389
|
|
|
Marketable securities
|
6
|
|
|
|
Derivatives relating to:2
|
|
||
|
Foreign currency
|
36
|
|
|
|
Total assets at fair value
|
$
|
1,431
|
|
|
Liabilities at fair value:
|
|
||
|
Derivatives relating to:2
|
|
||
|
Foreign currency
|
48
|
|
|
|
Total liabilities at fair value
|
$
|
48
|
|
|
1.
|
Time deposits included in cash and cash equivalents and money market funds included in other current assets in the interim Condensed Consolidated Balance Sheets are held at amortized cost, which approximates fair value.
|
|
1.
|
Segment assets at December 31, 2019 were $25,387 million and $13,492 million for Seed and Crop Protection, respectively.
|
|
For the Six Months Ended June 30,
(In millions)
|
Seed
|
Crop Protection
|
Total
|
||||||
|
2020
|
|
|
|
|
|
|
|||
|
Net sales
|
$
|
5,993
|
|
$
|
3,154
|
|
$
|
9,147
|
|
|
Segment operating EBITDA
|
$
|
1,537
|
|
$
|
547
|
|
$
|
2,084
|
|
|
|
|
|
|
|
|
||||
|
2019
|
|
|
|
|
|
|
|||
|
Net sales
|
$
|
5,666
|
|
$
|
3,286
|
|
$
|
8,952
|
|
|
Pro forma segment operating EBITDA
|
$
|
1,361
|
|
$
|
670
|
|
$
|
2,031
|
|
|
Income from continuing operations after income taxes to segment operating EBITDA
(In millions)
|
Three Months Ended
June 30, |
Six Months Ended
June 30,
|
||||||||||
|
2020
|
2019
|
2020
|
2019 1
|
|||||||||
|
Income from continuing operations after income taxes
|
$
|
766
|
|
$
|
483
|
|
$
|
1,047
|
|
$
|
299
|
|
|
Provision for income taxes on continuing operations
|
78
|
|
270
|
|
205
|
|
203
|
|
||||
|
Income from continuing operations before income taxes
|
844
|
|
753
|
|
1,252
|
|
502
|
|
||||
|
Depreciation and amortization
|
300
|
|
227
|
|
583
|
|
485
|
|
||||
|
Interest income
|
(9
|
)
|
(17
|
)
|
(27
|
)
|
(33
|
)
|
||||
|
Interest expense
|
14
|
|
34
|
|
24
|
|
93
|
|
||||
|
Exchange (gains) losses - net
|
(1
|
)
|
32
|
|
60
|
|
59
|
|
||||
|
Non-operating benefits - net
|
(91
|
)
|
(32
|
)
|
(164
|
)
|
(74
|
)
|
||||
|
Significant items
|
179
|
|
455
|
|
302
|
|
640
|
|
||||
|
Pro forma adjustments
|
|
|
|
298
|
|
|||||||
|
Corporate expenses
|
29
|
|
34
|
|
54
|
|
61
|
|
||||
|
Segment operating EBITDA
|
$
|
1,265
|
|
$
|
1,486
|
|
$
|
2,084
|
|
$
|
2,031
|
|
|
1.
|
Period is presented on a pro forma basis, prepared in accordance with Article 11 of Regulation S-X.
|
|
Segment assets to total assets (in millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
Total segment assets
|
$
|
37,390
|
|
$
|
38,879
|
|
$
|
39,828
|
|
|
Corporate assets
|
4,790
|
|
3,518
|
|
4,094
|
|
|||
|
Total assets
|
$
|
42,180
|
|
$
|
42,397
|
|
$
|
43,922
|
|
|
(In millions)
|
Seed
|
Crop Protection
|
Corporate
|
Total
|
||||||||
|
For the Three Months Ended June 30, 2020
|
|
|
|
|
||||||||
|
Restructuring and Asset Related Charges - Net 1
|
$
|
(135
|
)
|
$
|
(40
|
)
|
$
|
(4
|
)
|
$
|
(179
|
)
|
|
Total
|
$
|
(135
|
)
|
$
|
(40
|
)
|
$
|
(4
|
)
|
$
|
(179
|
)
|
|
(In millions)
|
Seed
|
Crop Protection
|
Corporate
|
Total
|
||||||||
|
For the Three Months Ended June 30, 2019
|
|
|
|
|
||||||||
|
Restructuring and Asset Related Charges - Net 1
|
$
|
(49
|
)
|
$
|
(2
|
)
|
$
|
(9
|
)
|
$
|
(60
|
)
|
|
Integration and Separation Costs 2
|
—
|
|
—
|
|
(330
|
)
|
(330
|
)
|
||||
|
Amortization of inventory step up3
|
(52
|
)
|
—
|
|
—
|
|
(52
|
)
|
||||
|
Loss on early extinguishment of debt4
|
—
|
|
—
|
|
(13
|
)
|
(13
|
)
|
||||
|
Total
|
$
|
(101
|
)
|
$
|
(2
|
)
|
$
|
(352
|
)
|
$
|
(455
|
)
|
|
(In millions)
|
Seed
|
Crop Protection
|
Corporate
|
Total
|
||||||||
|
For the Six Months Ended June 30, 2020
|
|
|
|
|
||||||||
|
Restructuring and Asset Related Charges - Net 1
|
$
|
(145
|
)
|
$
|
(58
|
)
|
$
|
(46
|
)
|
$
|
(249
|
)
|
|
Loss on Divestiture5
|
—
|
|
(53
|
)
|
—
|
|
(53
|
)
|
||||
|
Total
|
$
|
(145
|
)
|
$
|
(111
|
)
|
$
|
(46
|
)
|
$
|
(302
|
)
|
|
(In millions)
|
Seed
|
Crop Protection
|
Corporate
|
Total
|
||||||||
|
For the Six Months Ended June 30, 20197
|
|
|
|
|
||||||||
|
Restructuring and Asset Related Charges - Net 1
|
$
|
(76
|
)
|
$
|
(25
|
)
|
$
|
(20
|
)
|
$
|
(121
|
)
|
|
Integration and Separation Costs 2
|
—
|
|
—
|
|
(430
|
)
|
(430
|
)
|
||||
|
Amortization of inventory step up3
|
(52
|
)
|
—
|
|
—
|
|
(52
|
)
|
||||
|
Loss on early extinguishment of debt4
|
—
|
|
—
|
|
(13
|
)
|
(13
|
)
|
||||
|
Loss on Divestiture6
|
(24
|
)
|
—
|
|
—
|
|
(24
|
)
|
||||
|
Total
|
$
|
(152
|
)
|
$
|
(25
|
)
|
$
|
(463
|
)
|
$
|
(640
|
)
|
|
1.
|
Includes Board approved restructuring plans and asset related charges as well as accelerated prepaid amortization expense. See Note 5 - Restructuring and Asset Related Charges - Net, for additional information.
|
|
2.
|
Integration and separation costs include costs incurred to prepare for and close the Merger, post-Merger integration expenses, and costs incurred to prepare for the Business Separations.
|
|
3.
|
Includes a charge related to the amortization of the inventory that was stepped up to fair value in connection with the Merger.
|
|
4.
|
Includes a loss on 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.
|
|
5.
|
Includes a loss recorded in other income - net related to the expected sale of the La Porte site.
|
|
6.
|
Includes a loss recorded in other income - net related to DAS’s sale of a joint venture related to synergy actions.
|
|
7.
|
Period is presented on a pro forma basis, prepared in accordance with Article 11 of Regulation S-X.
|
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
•
|
The company reported net sales of $5,191 million, down 7 percent versus the same quarter last year, reflecting a 4 percent decrease in volume, a 3 percent decline in currency, and 1 percent impact in portfolio, partially offset by a 1 percent increase in price.
|
|
•
|
Cost of goods sold ("COGS") totaled $2,829 million in the second quarter of 2020, down from $3,047 million in the second quarter of 2019, primarily driven by currency benefits, lower volumes, $52 million of amortization of inventory step-up included in the three months ended June 30, 2019 and ongoing cost synergies and productivity efforts.
|
|
•
|
Restructuring and asset related charges - net were $179 million in the second quarter of 2020, an increase from $60 million in the second quarter 2019. The three months ended June 30, 2020 included $138 million of non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits.
|
|
•
|
There were no integration and separation costs in the second quarter of 2020, as compared to $330 million in the second quarter of 2019.
|
|
•
|
The provision for income taxes for the three months ended June 30, 2020 includes a tax benefit of $51 million to provision for income taxes on continuing operations related to a return to accrual adjustment associated with an elective change in accounting method for the 2019 tax year impact of the 2017 Tax Cuts and Jobs Act 's (“The Act”) foreign tax provisions.
|
|
•
|
Income from continuing operations after income taxes was $766 million, as compared to income of $483 million in the same quarter last year.
|
|
•
|
Operating EBITDA was $1,236 million, down from $1,452 million for the three months ended June 30, 2019. Volume declines, higher selling, general and administrative expense ("SG&A") and the unfavorable impact of currency more than offset the positive impact of price increases and ongoing cost synergies and productivity efforts. Refer to page 59 for further discussion of the company's Non-GAAP financial measures.
|
|
•
|
The company reported net sales of $9,147 million, up 2 percent versus the same period last year, reflecting a 4 percent increase in volume and a 1 percent increase in local price, partially offset by a 3 percent decline in currency.
|
|
•
|
COGS totaled $5,098 million in the six months ended 2020, down from $5,258 million in the six months ended 2019, primarily driven by the $257 million of amortization of inventory step-up included in the six months ended June 30, 2019, currency benefits and ongoing cost synergies and productivity efforts.
|
|
•
|
Restructuring and asset related charges - net were $249 million in the six months ended 2020, an increase from $121 million in the six months ended 2019. The six months ended June 30, 2020 included $148 million of non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits.
|
|
•
|
There were no integration and separation costs in the six months ended 2020, as compared to $542 million in the six months ended 2019.
|
|
•
|
The provision for income taxes for the six months ended June 30, 2020 includes a tax benefit of $51 million to provision for income taxes on continuing operations related to a return to accrual adjustment associated with an elective change in accounting method for the 2019 tax year impact of the 2017 Tax Cuts and Jobs Act 's (“The Act”) foreign tax provisions.
|
|
•
|
Income from continuing operations after income taxes was $1,047 million, as compared to income of $299 million in the same period last year.
|
|
•
|
Operating EBITDA was $2,030 million, up from $1,970 million for the six months ended June 30, 2019. Price and volume gains in seed and ongoing cost synergies and productivity efforts more than offset the unfavorable impacts of currency and geographic and product mix in crop protection. Refer to page 59 for further discussion of the company's Non-GAAP financial measures.
|
|
•
|
The company realized cost synergies and productivity savings of approximately $130 million for the six months ended June 30, 2020.
|
|
In millions, except per share amounts
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Net sales
|
$
|
5,191
|
|
$
|
5,556
|
|
$
|
9,147
|
|
$
|
8,952
|
|
|
|
|
|
|
|
||||||||
|
Cost of goods sold
|
$
|
2,829
|
|
$
|
3,047
|
|
$
|
5,098
|
|
$
|
5,258
|
|
|
Percent of net sales
|
54
|
%
|
55
|
%
|
56
|
%
|
59
|
%
|
||||
|
|
|
|
|
|
||||||||
|
Research and development expense
|
$
|
273
|
|
$
|
269
|
|
$
|
553
|
|
$
|
568
|
|
|
Percent of net sales
|
5
|
%
|
5
|
%
|
6
|
%
|
6
|
%
|
||||
|
|
|
|
|
|
||||||||
|
Selling, general and administrative expenses
|
$
|
965
|
|
$
|
937
|
|
$
|
1,722
|
|
$
|
1,672
|
|
|
Percent of net sales
|
19
|
%
|
17
|
%
|
19
|
%
|
19
|
%
|
||||
|
|
|
|
|
|
||||||||
|
Effective tax rate on continuing operations
|
9.2
|
%
|
35.9
|
%
|
16.4
|
%
|
40.4
|
%
|
||||
|
|
|
|
|
|
||||||||
|
Income from continuing operations after income taxes
|
$
|
766
|
|
$
|
483
|
|
$
|
1,047
|
|
$
|
299
|
|
|
|
|
|
|
|
||||||||
|
Income from continuing operations available to Corteva common stockholders
|
$
|
760
|
|
$
|
470
|
|
$
|
1,031
|
|
$
|
278
|
|
|
|
|
|
|
|
||||||||
|
Basic earnings per share of common stock from continuing operations
|
$
|
1.01
|
|
$
|
0.63
|
|
$
|
1.37
|
|
$
|
0.37
|
|
|
Diluted earnings per share of common stock from continuing operations
|
$
|
1.01
|
|
$
|
0.63
|
|
$
|
1.37
|
|
$
|
0.37
|
|
|
|
Three Months Ended
June 30, |
|||||||||
|
|
2020
|
2019
|
||||||||
|
|
Net Sales
($ Millions)
|
%
|
Net Sales
($ Millions) |
%
|
||||||
|
Worldwide
|
$
|
5,191
|
|
100
|
%
|
$
|
5,556
|
|
100
|
%
|
|
North America1
|
3,566
|
|
69
|
%
|
3,785
|
|
68
|
%
|
||
|
EMEA2
|
643
|
|
12
|
%
|
667
|
|
12
|
%
|
||
|
Latin America
|
515
|
|
10
|
%
|
653
|
|
12
|
%
|
||
|
Asia Pacific
|
467
|
|
9
|
%
|
451
|
|
8
|
%
|
||
|
|
Q2 2020 vs. Q2 2019
|
Percent Change Due To:
|
|||||||||||
|
|
Net Sales Change
|
Local Price &
|
|
|
Portfolio /
|
||||||||
|
$ In millions
|
$
|
%
|
Product Mix
|
Volume
|
Currency
|
Other
|
|||||||
|
North America1
|
$
|
(219
|
)
|
(6
|
)%
|
—
|
%
|
(5
|
)%
|
(1
|
)%
|
—
|
%
|
|
EMEA2
|
(24
|
)
|
(4
|
)%
|
3
|
%
|
—
|
%
|
(7
|
)%
|
—
|
%
|
|
|
Latin America
|
(138
|
)
|
(21
|
)%
|
4
|
%
|
(11
|
)%
|
(14
|
)%
|
—
|
%
|
|
|
Asia Pacific
|
16
|
|
4
|
%
|
2
|
%
|
8
|
%
|
(5
|
)%
|
(1
|
)%
|
|
|
Total
|
$
|
(365
|
)
|
(7
|
)%
|
1
|
%
|
(4
|
)%
|
(3
|
)%
|
(1
|
)%
|
|
1.
|
Represents U.S. & Canada.
|
|
2.
|
Europe, Middle East, and Africa ("EMEA").
|
|
|
Six Months Ended
June 30, |
|||||||||
|
|
2020
|
2019
|
||||||||
|
|
Net Sales
($ Millions)
|
%
|
Net Sales
($ Millions) |
%
|
||||||
|
Worldwide
|
$
|
9,147
|
|
100
|
%
|
$
|
8,952
|
|
100
|
%
|
|
North America1
|
5,331
|
|
58
|
%
|
5,177
|
|
58
|
%
|
||
|
EMEA2
|
2,110
|
|
23
|
%
|
2,031
|
|
23
|
%
|
||
|
Latin America
|
949
|
|
11
|
%
|
1,018
|
|
11
|
%
|
||
|
Asia Pacific
|
757
|
|
8
|
%
|
726
|
|
8
|
%
|
||
|
1.
|
Represents U.S. & Canada.
|
|
2.
|
Europe, Middle East, and Africa ("EMEA").
|
|
Unaudited Pro Forma Statement of Operations
|
Six Months Ended June 30, 2019
|
||||||||||||||
|
(In millions, except per share amounts)
|
Corteva
|
Merger 1
|
Debt Retirement 2
|
Separations Related 3
|
Pro Forma
|
||||||||||
|
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 - net
|
31
|
|
—
|
|
—
|
|
—
|
|
31
|
|
|||||
|
Loss on early extinguishment of debt
|
13
|
|
—
|
|
|
|
—
|
|
13
|
|
|||||
|
Interest expense
|
93
|
|
—
|
|
(45
|
)
|
—
|
|
48
|
|
|||||
|
Income from continuing operations before income taxes
|
502
|
|
205
|
|
45
|
|
93
|
|
845
|
|
|||||
|
Provision for income taxes on continuing operations
|
203
|
|
36
|
|
10
|
|
1
|
|
250
|
|
|||||
|
Income from continuing operations after income taxes
|
299
|
|
169
|
|
35
|
|
92
|
|
595
|
|
|||||
|
Net income from continuing operations attributable to noncontrolling interests
|
21
|
|
—
|
|
—
|
|
—
|
|
21
|
|
|||||
|
Net income from continuing operations attributable to Corteva
|
$
|
278
|
|
$
|
169
|
|
$
|
35
|
|
$
|
92
|
|
$
|
574
|
|
|
|
|||||||||||||||
|
Per share common data
|
|
||||||||||||||
|
Earnings per share of common stock from continuing operations - basic
|
$
|
0.77
|
|
||||||||||||
|
Earnings per share of common stock from continuing operations - diluted
|
$
|
0.77
|
|
||||||||||||
|
|
|||||||||||||||
|
Weighted-average common shares outstanding - basic
|
749.4
|
|
|||||||||||||
|
Weighted-average common shares outstanding - diluted
|
749.7
|
|
|||||||||||||
|
1.
|
Represents the removal of 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: removal of Telone®; impact from the distribution agreement entered into between Corteva and Dow that allows for Corteva to become the exclusive distributor of Telone® products for Dow; elimination of one-time transaction costs directly attributable to the Corteva Distribution; the impact of certain manufacturing, leasing and supply agreements entered into in connection with the Corteva Distribution; and the related tax impacts of these items.
|
|
1.
|
The six months ended June 30, 2019 is presented on a Pro Forma Basis, prepared in accordance with Article 11 of Regulation S-X.
|
|
Seed
|
First Half 2020 vs. First Half 2019
|
Percent Change Due To:
|
|||||||||||
|
|
Net Sales Change
|
Local Price &
|
|
|
Portfolio /
|
||||||||
|
$ In millions
|
$
|
%
|
Product Mix
|
Volume
|
Currency
|
Other
|
|||||||
|
North America
|
$
|
181
|
|
5
|
%
|
1
|
%
|
4
|
%
|
—
|
%
|
—
|
%
|
|
EMEA
|
67
|
|
6
|
%
|
4
|
%
|
7
|
%
|
(5
|
)%
|
—
|
%
|
|
|
Latin America
|
57
|
|
16
|
%
|
9
|
%
|
20
|
%
|
(13
|
)%
|
—
|
%
|
|
|
Asia Pacific
|
22
|
|
10
|
%
|
8
|
%
|
9
|
%
|
(7
|
)%
|
—
|
%
|
|
|
Total
|
$
|
327
|
|
6
|
%
|
2
|
%
|
6
|
%
|
(2
|
)%
|
—
|
%
|
|
Crop Protection
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
In millions
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Net sales
|
$
|
1,653
|
|
$
|
1,857
|
|
$
|
3,154
|
|
$
|
3,286
|
|
|
Segment Operating EBITDA 1
|
$
|
309
|
|
$
|
450
|
|
$
|
547
|
|
$
|
670
|
|
|
1.
|
The six months ended June 30, 2019 is presented on a Pro Forma Basis, prepared in accordance with Article 11 of Regulation S-X.
|
|
Crop Protection
|
Q2 2020 vs. Q2 2019
|
Percent Change Due To:
|
|||||||||||
|
|
Net Sales Change
|
Local Price &
|
|
|
Portfolio /
|
||||||||
|
$ In millions
|
$
|
%
|
Product Mix
|
Volume
|
Currency
|
Other
|
|||||||
|
North America
|
$
|
(23
|
)
|
(3
|
)%
|
1
|
%
|
(3
|
)%
|
—
|
%
|
(1
|
)%
|
|
EMEA
|
(14
|
)
|
(4
|
)%
|
1
|
%
|
—
|
%
|
(4
|
)%
|
(1
|
)%
|
|
|
Latin America
|
(157
|
)
|
(34
|
)%
|
5
|
%
|
(25
|
)%
|
(14
|
)%
|
—
|
%
|
|
|
Asia Pacific
|
(10
|
)
|
(3
|
)%
|
(1
|
)%
|
4
|
%
|
(5
|
)%
|
(1
|
)%
|
|
|
Total
|
$
|
(204
|
)
|
(11
|
)%
|
2
|
%
|
(7
|
)%
|
(5
|
)%
|
(1
|
)%
|
|
Crop Protection
|
First Half 2020 vs. First Half 2019
|
Percent Change Due To:
|
|||||||||||
|
|
Net Sales Change
|
Local Price &
|
|
|
Portfolio /
|
||||||||
|
$ In millions
|
$
|
%
|
Product Mix
|
Volume
|
Currency
|
Other
|
|||||||
|
North America
|
$
|
(27
|
)
|
(2
|
)%
|
(1
|
)%
|
—
|
%
|
—
|
%
|
(1
|
)%
|
|
EMEA
|
12
|
|
1
|
%
|
1
|
%
|
5
|
%
|
(4
|
)%
|
(1
|
)%
|
|
|
Latin America
|
(126
|
)
|
(19
|
)%
|
5
|
%
|
(11
|
)%
|
(13
|
)%
|
—
|
%
|
|
|
Asia Pacific
|
9
|
|
2
|
%
|
—
|
%
|
8
|
%
|
(4
|
)%
|
(2
|
)%
|
|
|
Total
|
$
|
(132
|
)
|
(4
|
)%
|
1
|
%
|
—
|
%
|
(4
|
)%
|
(1
|
)%
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
(In millions)
|
As Reported
|
As Reported
|
As Reported
|
Pro Forma
|
||||||||
|
Income from continuing operations after income taxes
|
$
|
766
|
|
$
|
483
|
|
$
|
1,047
|
|
$
|
595
|
|
|
Provision for income taxes on continuing operations
|
78
|
|
270
|
|
205
|
|
250
|
|
||||
|
Income from continuing operations before income taxes
|
844
|
|
753
|
|
1,252
|
|
845
|
|
||||
|
Depreciation and amortization
|
300
|
|
227
|
|
583
|
|
485
|
|
||||
|
Interest income
|
(9
|
)
|
(17
|
)
|
(27
|
)
|
(33
|
)
|
||||
|
Interest expense
|
14
|
|
34
|
|
24
|
|
48
|
|
||||
|
Exchange (gains) losses - net
|
(1
|
)
|
32
|
|
60
|
|
59
|
|
||||
|
Non-operating benefits - net
|
(91
|
)
|
(32
|
)
|
(164
|
)
|
(74
|
)
|
||||
|
Significant items charge
|
179
|
|
455
|
|
302
|
|
640
|
|
||||
|
Operating EBITDA (Non-GAAP)
|
$
|
1,236
|
|
$
|
1,452
|
|
$
|
2,030
|
|
$
|
1,970
|
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
(In millions)
|
As Reported
|
As Reported
|
As Reported
|
Pro Forma
|
||||||||
|
Integration and separation costs
|
$
|
—
|
|
$
|
(330
|
)
|
$
|
—
|
|
$
|
(430
|
)
|
|
Restructuring and asset related charges - net
|
(179
|
)
|
(60
|
)
|
(249
|
)
|
(121
|
)
|
||||
|
Loss on divestiture
|
—
|
|
—
|
|
(53
|
)
|
(24
|
)
|
||||
|
Amortization of inventory step-up
|
—
|
|
(52
|
)
|
—
|
|
(52
|
)
|
||||
|
Loss on early extinguishment of debt
|
—
|
|
(13
|
)
|
—
|
|
(13
|
)
|
||||
|
Total pretax significant items charge
|
(179
|
)
|
(455
|
)
|
(302
|
)
|
(640
|
)
|
||||
|
Total tax benefit (provision) impact of significant items1
|
36
|
|
(80
|
)
|
59
|
|
12
|
|
||||
|
Tax only significant item benefit2
|
29
|
|
—
|
|
10
|
|
—
|
|
||||
|
Total significant items charge, after tax
|
$
|
(114
|
)
|
$
|
(535
|
)
|
$
|
(233
|
)
|
$
|
(628
|
)
|
|
1.
|
The tax benefit impact of significant items for the three months ended June 30, 2019 includes a net tax charge of $(114) million related to U.S. state blended tax rate changes associated with the Business Separations and a net tax charge of $(96) million related to application of the The Act's foreign tax provisions. In addition to the items noted above, the tax benefit impact of significant items for the six months ended June 30, 2019 includes a net tax charge of $(32) million related to U.S. state blended tax rate changes associated with the Internal Reorganizations and a tax benefit of $102 million related to an internal legal entity restructuring associated with the Internal Reorganizations. Unless specifically addressed above, the income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.
|
|
2.
|
The tax only significant item benefits are primarily related to a benefit due to an elective change in accounting method that alters the 2019 impact of the business separation on The Act's foreign tax provisions and a state tax valuation allowance in the U.S. based on a change in judgment about the realizability of a deferred tax asset.
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
(In millions)
|
As Reported
|
As Reported
|
As Reported
|
Pro Forma
|
||||||||
|
Income from continuing operations attributable to Corteva
|
$
|
760
|
|
$
|
470
|
|
$
|
1,031
|
|
$
|
574
|
|
|
Less: Non-operating benefits - net, after tax
|
67
|
|
30
|
|
124
|
|
61
|
|
||||
|
Less: Amortization of intangibles (existing as of Separation), after tax
|
(137
|
)
|
(89
|
)
|
(251
|
)
|
(170
|
)
|
||||
|
Less: Significant items charge, after tax
|
(114
|
)
|
(535
|
)
|
(233
|
)
|
(628
|
)
|
||||
|
Operating Earnings (Non-GAAP)
|
$
|
944
|
|
$
|
1,064
|
|
$
|
1,391
|
|
$
|
1,311
|
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
|
As Reported
|
As Reported
|
As Reported
|
Pro Forma
|
||||||||
|
Earnings per share of common stock from continuing operations - diluted
|
$
|
1.01
|
|
$
|
0.63
|
|
$
|
1.37
|
|
$
|
0.77
|
|
|
Less: Non-operating benefits - net, after tax
|
0.09
|
|
0.04
|
|
0.16
|
|
0.08
|
|
||||
|
Less: Amortization of intangibles (existing as of Separation), after tax
|
(0.19
|
)
|
(0.12
|
)
|
(0.33
|
)
|
(0.22
|
)
|
||||
|
Less: Significant items charge, after tax
|
(0.15
|
)
|
(0.71
|
)
|
(0.31
|
)
|
(0.84
|
)
|
||||
|
Operating Earnings Per Share (Non-GAAP)
|
$
|
1.26
|
|
$
|
1.42
|
|
$
|
1.85
|
|
$
|
1.75
|
|
|
Diluted Shares Outstanding (in millions)
|
751.6
|
|
750.0
|
|
752.0
|
|
749.7
|
|
||||
|
(Dollars in millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
Cash, cash equivalents and marketable securities
|
$
|
2,869
|
|
$
|
1,769
|
|
$
|
2,083
|
|
|
Total debt
|
$
|
2,631
|
|
$
|
122
|
|
$
|
2,175
|
|
|
|
|
Payments Due In
|
|||||||||||||
|
(Dollars in millions)
|
Total at June 30, 2020
|
Remainder 2020
|
2021 - 2022
|
2023 - 2024
|
2025 and beyond
|
||||||||||
|
Long-Term debt1
|
$
|
1,110
|
|
$
|
—
|
|
$
|
1
|
|
$
|
—
|
|
$
|
1,109
|
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
Item 1.
|
LEGAL PROCEEDINGS
|
|
•
|
Current and future COVID-19 outbreaks and resulting illness, travel restrictions and workforce disruptions could impact Corteva's global supply chain, its operations and its routes to market or those of its suppliers, co-manufacturers, or customers/distributors. These disruptions or the company's failure to effectively respond to them could increase product or distribution costs, alter the timing of recognizing manufacturing costs, or impact the delivery of products to customers.
|
|
•
|
Government or regulatory responses to pandemics could negatively impact the company's business. Mandatory lockdowns or other restrictions on operations in certain countries have temporarily disrupted the company's ability to operate or distribute its products in these markets. Continuation or expansion of these disruptions could materially adversely impact the company's operations and results.
|
|
•
|
Reductions to the company’s forecasted profitability and continued global economic decline could trigger potential impairment of the carrying value of goodwill or other indefinite and definite-lived intangible assets.
|
|
•
|
The instability or unavailability of a farm workforce to harvest agricultural products could impact the company's customers’ ability to monetize their crop and potentially impact the collection of the company's customer receivables.
|
|
•
|
Continued commodity cost volatility is expected and the company's commodity hedging activities may not sufficiently offset this volatility. Depressed commodity prices may increase the insolvency risk of Corteva's customers in the longer-term, along with reducing the demand for Corteva's products.
|
|
•
|
Disruptions or uncertainties related to the COVID-19 outbreak for a sustained period of time could result in delays or modifications to the company's strategic plans and productivity initiatives.
|
|
•
|
Increased volatility and pricing in the capital and commercial paper markets may reoccur and impact the company's access to preferred sources of liquidity resulting in higher borrowing costs. The company cannot assure investors that additional liquidity will be readily available or available on favorable terms.
|
|
•
|
Increased market volatility may bring unprecedented market conditions making it difficult for the company to adequately forecast customer demand.
|
|
Item 6.
|
EXHIBITS
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
|
|
Separation and Distribution Agreement by and among DuPont Inc., Dow Inc. and Corteva, Inc. (incorporated by reference to Exhibit No. 2.1 to Amendment 3 to Corteva’s Registration Statement on Form 10, filed on April 16, 2019).
|
|
|
|
|
|
|
|
Amended and Restated Certificate of Incorporation of Corteva, Inc. (incorporated by reference to Exhibit No. 3.1 to Corteva’s Current Report on Form 8-K (Commission file number 001-38710), filed on June 3, 2019.
|
|
|
|
|
|
|
|
Amended and Restated Bylaws of Corteva, Inc. (incorporated by reference to Exhibit No. 3.1 to Corteva’s Current Report on Form 8-K (Commission file number 001-38710), filed on October 10, 2019.
|
|
|
|
|
|
|
|
Amended and Restated Certificate of Incorporation of E.I. du Pont de Nemours and Company (incorporated by reference to Exhibit 3.1 to E.I. du Pont de Nemours and Company’s Current Report on Form 8-K (Commission file number 1-815) dated September 1, 2017).
|
|
|
|
|
|
|
|
Amended and Restated Bylaws of E.I. du Pont de Nemours and Company (incorporated by reference to Exhibit 3.2 to E.I. du Pont de Nemours and Company's Current Report on Form 8-K (Commission file number 1-815) dated September 1, 2017).
|
|
|
|
|
|
|
4
|
|
Corteva agrees to provide the Commission, on request, copies of instruments defining the rights of holders of long-term debt of Corteva and its subsidiaries.
|
|
|
|
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of the company’s and EID’s Principal Executive Officer.
|
|
|
|
|
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of the company’s and EID’s Principal Financial Officer.
|
|
|
|
|
|
|
|
Section 1350 Certification of the company’s and EID’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
|
|
|
|
|
Section 1350 Certification of the company’s and EID’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File – The Cover Page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101.INS)
|
|
|
CORTEVA, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
Date:
|
August 6, 2020
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Brian Titus
|
|
|
|
|
|
|
|
Brian Titus
|
|
|
|
Vice President, Controller
|
|
|
|
(Principal Accounting Officer)
|
|
|
E. I. du Pont de Nemours and Company
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
Date:
|
August 6, 2020
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Brian Titus
|
|
|
|
|
|
|
|
Brian Titus
|
|
|
|
Vice President, Controller
|
|
|
|
(Principal Accounting Officer)
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
(In millions, except per share amounts)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Net sales
|
$
|
5,191
|
|
$
|
5,556
|
|
$
|
9,147
|
|
$
|
8,952
|
|
|
Cost of goods sold
|
2,829
|
|
3,047
|
|
5,098
|
|
5,258
|
|
||||
|
Research and development expense
|
273
|
|
269
|
|
553
|
|
568
|
|
||||
|
Selling, general and administrative expenses
|
965
|
|
937
|
|
1,722
|
|
1,672
|
|
||||
|
Amortization of intangibles
|
176
|
|
113
|
|
339
|
|
214
|
|
||||
|
Restructuring and asset related charges - net
|
179
|
|
60
|
|
249
|
|
121
|
|
||||
|
Integration and separation costs
|
—
|
|
330
|
|
—
|
|
542
|
|
||||
|
Other income - net
|
89
|
|
—
|
|
90
|
|
31
|
|
||||
|
Loss on early extinguishment of debt
|
—
|
|
13
|
|
—
|
|
13
|
|
||||
|
Interest expense
|
45
|
|
64
|
|
87
|
|
123
|
|
||||
|
Income from continuing operations before income taxes
|
813
|
|
723
|
|
1,189
|
|
472
|
|
||||
|
Provision for income taxes on continuing operations
|
71
|
|
263
|
|
190
|
|
196
|
|
||||
|
Income from continuing operations after income taxes
|
742
|
|
460
|
|
999
|
|
276
|
|
||||
|
(Loss) income from discontinued operations after income taxes
|
—
|
|
(1,077
|
)
|
1
|
|
(717
|
)
|
||||
|
Net income (loss)
|
742
|
|
(617
|
)
|
1,000
|
|
(441
|
)
|
||||
|
Net income attributable to noncontrolling interests
|
3
|
|
9
|
|
11
|
|
19
|
|
||||
|
Net income (loss) attributable to E. I. du Pont de Nemours and Company
|
$
|
739
|
|
$
|
(626
|
)
|
$
|
989
|
|
$
|
(460
|
)
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
(In millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||
|
Net income (loss)
|
$
|
742
|
|
$
|
(617
|
)
|
$
|
1,000
|
|
$
|
(441
|
)
|
|
Other comprehensive income (loss) - net of tax:
|
|
|
|
|
|
|
||||||
|
Cumulative translation adjustments
|
97
|
|
(102
|
)
|
(575
|
)
|
(174
|
)
|
||||
|
Adjustments to pension benefit plans
|
(6
|
)
|
11
|
|
(6
|
)
|
8
|
|
||||
|
Adjustments to other benefit plans
|
(1
|
)
|
(86
|
)
|
2
|
|
(86
|
)
|
||||
|
Derivative instruments
|
(2
|
)
|
22
|
|
4
|
|
23
|
|
||||
|
Total other comprehensive income (loss)
|
88
|
|
(155
|
)
|
(575
|
)
|
(229
|
)
|
||||
|
Comprehensive income (loss)
|
830
|
|
(772
|
)
|
425
|
|
(670
|
)
|
||||
|
Comprehensive income attributable to noncontrolling interests - net of tax
|
3
|
|
9
|
|
11
|
|
19
|
|
||||
|
Comprehensive income (loss) attributable to E. I. du Pont de Nemours and Company
|
$
|
827
|
|
$
|
(781
|
)
|
$
|
414
|
|
$
|
(689
|
)
|
|
(In millions, except share amounts)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
Assets
|
|
|
|
|
|
||||
|
Current assets
|
|
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
2,809
|
|
$
|
1,764
|
|
$
|
2,077
|
|
|
Marketable securities
|
60
|
|
5
|
|
6
|
|
|||
|
Accounts and notes receivable - net
|
6,772
|
|
5,528
|
|
7,441
|
|
|||
|
Inventories
|
3,589
|
|
5,032
|
|
3,918
|
|
|||
|
Other current assets
|
1,192
|
|
1,190
|
|
1,010
|
|
|||
|
Total current assets
|
14,422
|
|
13,519
|
|
14,452
|
|
|||
|
Investment in nonconsolidated affiliates
|
62
|
|
66
|
|
64
|
|
|||
|
Property, plant and equipment - net of accumulated depreciation (June 30, 2020 - $3,565; December 31, 2019 - $3,326; June 30, 2019 - $3,207)
|
4,293
|
|
4,546
|
|
4,543
|
|
|||
|
Goodwill
|
10,069
|
|
10,229
|
|
10,249
|
|
|||
|
Other intangible assets
|
11,070
|
|
11,424
|
|
11,832
|
|
|||
|
Deferred income taxes
|
290
|
|
287
|
|
325
|
|
|||
|
Other assets
|
1,974
|
|
2,326
|
|
2,464
|
|
|||
|
Total Assets
|
$
|
42,180
|
|
$
|
42,397
|
|
$
|
43,929
|
|
|
Liabilities and Equity
|
|
|
|
|
|
||||
|
Current liabilities
|
|
|
|
|
|
||||
|
Short-term borrowings and finance lease obligations
|
$
|
1,529
|
|
$
|
7
|
|
$
|
2,058
|
|
|
Accounts payable
|
2,891
|
|
3,702
|
|
3,139
|
|
|||
|
Income taxes payable
|
369
|
|
95
|
|
282
|
|
|||
|
Accrued and other current liabilities
|
2,743
|
|
4,440
|
|
3,048
|
|
|||
|
Total current liabilities
|
7,532
|
|
8,244
|
|
8,527
|
|
|||
|
Long-Term Debt
|
1,102
|
|
115
|
|
117
|
|
|||
|
Long-Term Debt - Related Party
|
3,842
|
|
4,021
|
|
4,160
|
|
|||
|
Other Noncurrent Liabilities
|
|
|
|
|
|
||||
|
Deferred income tax liabilities
|
752
|
|
920
|
|
1,430
|
|
|||
|
Pension and other post employment benefits - noncurrent
|
6,039
|
|
6,377
|
|
5,538
|
|
|||
|
Other noncurrent obligations
|
1,957
|
|
2,192
|
|
2,156
|
|
|||
|
Total noncurrent liabilities
|
13,692
|
|
13,625
|
|
13,401
|
|
|||
|
Commitments and contingent liabilities
|
|
|
|
||||||
|
Stockholders’ equity
|
|
|
|
|
|
||||
|
Preferred stock, without par value – cumulative; 23,000,000 shares authorized;
issued at June 30, 2020, December 31, 2019, and June 30, 2019:
|
|
|
|
||||||
|
$4.50 Series – 1,673,000 shares (callable at $120)
|
169
|
|
169
|
|
169
|
|
|||
|
$3.50 Series – 700,000 shares (callable at $102)
|
70
|
|
70
|
|
70
|
|
|||
|
Common stock, $0.30 par value; 1,800,000,000 shares authorized; issued at June 30, 2020 - 200, December 31, 2019 - 200, and June 30, 2019 - 200
|
—
|
|
—
|
|
—
|
|
|||
|
Additional paid-in capital
|
23,981
|
|
23,958
|
|
23,947
|
|
|||
|
Retained earnings / (accumulated deficit)
|
580
|
|
(406
|
)
|
172
|
|
|||
|
Accumulated other comprehensive loss
|
(3,845
|
)
|
(3,270
|
)
|
(2,375
|
)
|
|||
|
Total E. I. du Pont de Nemours and Company stockholders’ equity
|
20,955
|
|
20,521
|
|
21,983
|
|
|||
|
Noncontrolling interests
|
1
|
|
7
|
|
18
|
|
|||
|
Total equity
|
20,956
|
|
20,528
|
|
22,001
|
|
|||
|
Total Liabilities and Equity
|
$
|
42,180
|
|
$
|
42,397
|
|
$
|
43,929
|
|
|
|
Six Months Ended
June 30, |
|||||
|
(In millions)
|
2020
|
20191
|
||||
|
Operating activities
|
|
|
||||
|
Net income (loss)
|
$
|
1,000
|
|
$
|
(441
|
)
|
|
Adjustments to reconcile net income (loss) to cash used for operating activities:
|
|
|
|
|
||
|
Depreciation and amortization
|
583
|
|
1,084
|
|
||
|
Benefit from deferred income tax
|
(136
|
)
|
(473
|
)
|
||
|
Net periodic pension benefit
|
(202
|
)
|
(146
|
)
|
||
|
Pension contributions
|
(39
|
)
|
(92
|
)
|
||
|
Net loss (gain) on sales of property, businesses, consolidated companies, and investments
|
30
|
|
(67
|
)
|
||
|
Restructuring and asset related charges - net
|
249
|
|
238
|
|
||
|
Amortization of inventory step-up
|
—
|
|
257
|
|
||
|
Goodwill impairment charge
|
—
|
|
1,102
|
|
||
|
Loss on early extinguishment of debt
|
—
|
|
13
|
|
||
|
Other net loss
|
185
|
|
172
|
|
||
|
Changes in operating assets and liabilities - net
|
(2,590
|
)
|
(2,754
|
)
|
||
|
Cash used for operating activities
|
(920
|
)
|
(1,107
|
)
|
||
|
Investing activities
|
|
|
|
|||
|
Capital expenditures
|
(202
|
)
|
(834
|
)
|
||
|
Proceeds from sales of property, businesses, and consolidated companies - net of cash divested
|
18
|
|
125
|
|
||
|
Acquisitions of businesses - net of cash acquired
|
—
|
|
(9
|
)
|
||
|
Proceeds from sales of ownership interests in nonconsolidated affiliates
|
—
|
|
21
|
|
||
|
Purchases of investments
|
(361
|
)
|
(13
|
)
|
||
|
Proceeds from sales and maturities of investments
|
298
|
|
37
|
|
||
|
Other investing activities - net
|
(5
|
)
|
(1
|
)
|
||
|
Cash used for investing activities
|
(252
|
)
|
(674
|
)
|
||
|
Financing activities
|
|
|
|
|||
|
Net change in borrowings (less than 90 days)
|
966
|
|
173
|
|
||
|
Proceeds from related party debt
|
67
|
|
4,160
|
|
||
|
Payments on related party debt
|
(246
|
)
|
—
|
|
||
|
Proceeds from debt
|
2,434
|
|
1,001
|
|
||
|
Payments on debt
|
(879
|
)
|
(6,803
|
)
|
||
|
Proceeds from exercise of stock options
|
17
|
|
39
|
|
||
|
Payment for acquisition of subsidiary's interest from the non-controlling interest
|
(60
|
)
|
—
|
|
||
|
Distributions to DowDuPont
|
—
|
|
(317
|
)
|
||
|
Cash transferred to DowDuPont at Internal Reorganization
|
—
|
|
(2,053
|
)
|
||
|
Contributions from Dow and DowDuPont
|
—
|
|
3,255
|
|
||
|
Debt extinguishment costs
|
—
|
|
(79
|
)
|
||
|
Other financing activities
|
(34
|
)
|
(42
|
)
|
||
|
Cash provided by financing activities
|
2,265
|
|
(666
|
)
|
||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(95
|
)
|
(64
|
)
|
||
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
998
|
|
(2,511
|
)
|
||
|
Cash, cash equivalents and restricted cash at beginning of period
|
2,173
|
|
5,024
|
|
||
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
3,171
|
|
$
|
2,513
|
|
|
(In millions)
|
Preferred Stock
|
Common Stock
|
Add. Paid-in Capital
|
Divisional Equity
|
Retained Earnings (Accumulated deficit)
|
Accum. Other Comp Loss
|
Non-controlling Interests
|
Total Equity
|
||||||||||||||||
|
2019
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Balance at January 1, 2019
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
78,259
|
|
$
|
—
|
|
$
|
(3,360
|
)
|
$
|
254
|
|
$
|
75,153
|
|
|
Net income
|
|
|
|
|
|
|
166
|
|
|
|
|
|
10
|
|
176
|
|
||||||||
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(74
|
)
|
|
|
(74
|
)
|
||||||||
|
Preferred dividends ($4.50 Series - $1.125 per share, $3.50 Series - $0.875 per share)
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
(2
|
)
|
||||||||
|
Distributions to DowDuPont
|
|
|
|
|
|
|
(317
|
)
|
|
|
|
|
|
|
(317
|
)
|
||||||||
|
Issuance of DowDuPont stock
|
|
|
|
|
|
|
35
|
|
|
|
|
|
|
|
35
|
|
||||||||
|
Share-based compensation
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
18
|
|
||||||||
|
Contributions from Dow
|
|
|
|
|
|
|
88
|
|
|
|
|
|
|
|
88
|
|
||||||||
|
Other - net
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
(3
|
)
|
||||||||
|
Balance at March 31, 2019
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
78,244
|
|
$
|
—
|
|
$
|
(3,434
|
)
|
$
|
264
|
|
$
|
75,074
|
|
|
Net (loss) income
|
|
|
|
(806
|
)
|
180
|
|
|
9
|
|
(617
|
)
|
||||||||||||
|
Other comprehensive loss
|
|
|
|
|
|
(155
|
)
|
|
(155
|
)
|
||||||||||||||
|
Preferred dividends ($4.50 Series - $1.125 per share, $3.50 Series - $0.875 per share)
|
|
|
|
|
(5
|
)
|
|
|
(5
|
)
|
||||||||||||||
|
Contributions from DowDuPont
|
|
|
|
3,168
|
|
|
|
|
3,168
|
|
||||||||||||||
|
Issuance of DowDuPont stock
|
|
|
|
4
|
|
|
|
|
4
|
|
||||||||||||||
|
Share-based compensation
|
|
|
11
|
|
44
|
|
|
|
|
55
|
|
|||||||||||||
|
Impact of Internal Reorganizations
|
|
|
|
(56,479
|
)
|
|
1,214
|
|
(231
|
)
|
(55,496
|
)
|
||||||||||||
|
Reclassification of Divisional Equity to APIC
|
239
|
|
|
23,936
|
|
(24,175
|
)
|
|
|
|
—
|
|
||||||||||||
|
Other - net
|
|
|
|
|
(3
|
)
|
|
(24
|
)
|
(27
|
)
|
|||||||||||||
|
Balance at June 30, 2019
|
$
|
239
|
|
$
|
—
|
|
$
|
23,947
|
|
$
|
—
|
|
$
|
172
|
|
$
|
(2,375
|
)
|
$
|
18
|
|
$
|
22,001
|
|
|
(In millions)
|
Preferred Stock
|
Common Stock
|
Add. Paid-in Capital
|
Divisional Equity
|
(Accumulated deficit) Retained Earnings
|
Accum. Other Comp Loss
|
Non-controlling Interests
|
Total Equity
|
||||||||||||||
|
2020
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Balance at January 1, 2020
|
$
|
239
|
|
$
|
—
|
|
$
|
23,958
|
|
|
$
|
(406
|
)
|
$
|
(3,270
|
)
|
$
|
7
|
|
$
|
20,528
|
|
|
Net income
|
|
|
|
|
|
|
|
250
|
|
|
|
8
|
|
258
|
|
|||||||
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(663
|
)
|
|
|
(663
|
)
|
|||||||
|
Preferred dividends ($4.50 Series - $1.125 per share, $3.50 Series - $0.875 per share)
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
(2
|
)
|
|||||||
|
Issuance of Corteva stock
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
14
|
|
|||||||
|
Share-based compensation
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
2
|
|
|||||||
|
Other - net
|
|
|
|
|
32
|
|
|
(2
|
)
|
|
|
|
|
30
|
|
|||||||
|
Balance at March 31, 2020
|
$
|
239
|
|
$
|
—
|
|
$
|
24,004
|
|
|
$
|
(158
|
)
|
$
|
(3,933
|
)
|
$
|
15
|
|
$
|
20,167
|
|
|
Net income
|
|
|
|
|
739
|
|
|
3
|
|
742
|
|
|||||||||||
|
Other comprehensive income
|
|
|
|
|
|
88
|
|
|
88
|
|
||||||||||||
|
Preferred dividends ($4.50 Series - $1.125 per share, $3.50 Series - $0.875 per share)
|
|
|
|
|
(3
|
)
|
|
|
(3
|
)
|
||||||||||||
|
Issuance of Corteva stock
|
|
|
3
|
|
|
|
|
|
3
|
|
||||||||||||
|
Share-based compensation
|
|
|
19
|
|
|
|
|
|
19
|
|
||||||||||||
|
Acquisition of a noncontrolling interest in consolidated subsidiaries
|
|
|
(37
|
)
|
|
|
|
(15
|
)
|
(52
|
)
|
|||||||||||
|
Other - net
|
|
|
(8
|
)
|
|
2
|
|
|
(2
|
)
|
(8
|
)
|
||||||||||
|
Balance at June 30, 2020
|
$
|
239
|
|
$
|
—
|
|
$
|
23,981
|
|
|
$
|
580
|
|
$
|
(3,845
|
)
|
$
|
1
|
|
$
|
20,956
|
|
|
|
E. I. du Pont de Nemours and Company
|
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
|
|
|
Note
|
|
Page
|
|
1
|
||
|
2
|
||
|
3
|
||
|
•
|
Preferred Stock - EID has preferred stock outstanding to third parties which is accounted for as a non-controlling interest at the Corteva, Inc. level. Each share of EID Preferred Stock - $4.50 Series and EID Preferred Stock - $3.50 Series issued and outstanding at the effective date of the Corteva Distribution remains issued and outstanding as to EID and was unaffected by the Corteva Distribution.
|
|
•
|
Related Party Loan - EID engaged in a series of debt redemptions during the second quarter of 2019 that were partially funded through an intercompany loan from Corteva, Inc. This was eliminated in consolidation at the Corteva, Inc. level but remains on EID's financial statements at the standalone level (including the associated interest).
|
|
•
|
Capital Structure - At June 30, 2020, Corteva, Inc.'s capital structure consists of 748,485,000 issued shares of common stock, par value $0.01 per share.
|
|
•
|
Note 1 - Summary of Significant Accounting Policies - refer to page 9 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 2 - Recent Accounting Guidance - refer to page 10 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 3 - Divestitures and Other Transactions - refer to page 11 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 4 - Revenue - refer to page 14 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 5 - Restructuring and Asset Related Charges - Net - refer to page 16 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 6 - Related Parties - Differences exist between Corteva, Inc. and EID; refer to EID Note 2 - Related Party Transactions, below
|
|
•
|
Note 7 - Supplementary Information - refer to page 18 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 8 - Income Taxes - refer to page 20 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 9 - Earnings Per Share of Common Stock - Not applicable for EID
|
|
•
|
Note 10 - Accounts and Notes Receivable - Net - refer to page 22 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 11 - Inventories - refer to page 23 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 12 - Other Intangible Assets - refer to page 23 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 13 - Short-Term Borrowings, Long-Term Debt and Available Credit Facilities - refer to page 24 of the Corteva, Inc. interim Consolidated Financial Statements. In addition, EID has a related party loan payable to Corteva, Inc.; refer to EID Note 2 - Related Party Transactions, below
|
|
•
|
Note 14 - Commitments and Contingent Liabilities - refer to page 26 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 15 - Stockholders' Equity - refer to page 31 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 16 - Pension Plans and Other Post Employment Benefits - refer to page 34 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 17 - Financial Instruments - refer to page 35 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 18 - Fair Value Measurements - refer to page 40 of the Corteva, Inc. interim Consolidated Financial Statements
|
|
•
|
Note 19 - Segment Information - Differences exist between Corteva, Inc. and EID; refer to EID Note 3 - Segment Information, below
|
|
Income (loss) from continuing operations after income taxes to segment operating EBITDA
(In millions)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
2020
|
2019
|
2020
|
2019 1
|
|||||||||
|
Income from continuing operations after income taxes
|
$
|
742
|
|
$
|
460
|
|
$
|
999
|
|
$
|
276
|
|
|
Provision for income taxes on continuing operations
|
71
|
|
263
|
|
190
|
|
196
|
|
||||
|
Income from continuing operations before income taxes
|
813
|
|
723
|
|
1,189
|
|
472
|
|
||||
|
Depreciation and amortization
|
300
|
|
227
|
|
583
|
|
485
|
|
||||
|
Interest income
|
(9
|
)
|
(17
|
)
|
(27
|
)
|
(33
|
)
|
||||
|
Interest expense
|
45
|
|
64
|
|
87
|
|
123
|
|
||||
|
Exchange (gains) losses - net
|
(1
|
)
|
32
|
|
60
|
|
59
|
|
||||
|
Non-operating benefits - net
|
(91
|
)
|
(32
|
)
|
(164
|
)
|
(74
|
)
|
||||
|
Significant items
|
179
|
|
455
|
|
302
|
|
640
|
|
||||
|
Pro forma adjustments
|
|
|
|
298
|
|
|||||||
|
Corporate expenses
|
29
|
|
34
|
|
54
|
|
61
|
|
||||
|
Segment operating EBITDA
|
$
|
1,265
|
|
$
|
1,486
|
|
$
|
2,084
|
|
$
|
2,031
|
|
|
1.
|
Period is presented on a pro forma basis, prepared in accordance with Article 11 of Regulation S-X.
|
|
Segment assets to total assets (in millions)
|
June 30, 2020
|
December 31, 2019
|
June 30, 2019
|
||||||
|
Total segment assets
|
$
|
37,390
|
|
$
|
38,879
|
|
$
|
39,828
|
|
|
Corporate assets
|
4,790
|
|
3,518
|
|
4,101
|
|
|||
|
Total assets
|
$
|
42,180
|
|
$
|
42,397
|
|
$
|
43,929
|
|
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