WILMINGTON, Del., Jan. 30, 2020 /PRNewswire/ -- Corteva, Inc. (NYSE: CTVA) today reported financial results for the quarter ended December 31, 2019 and the full year 2019. The Company also provided 2020 guidance.
Full Year 2019 Results Overview
GAAP |
Net Sales |
EPS |
Income from Cont. Ops. (After |
$13.8 B |
$0.02 |
$26 M |
|
v. FY 20182 |
(3%) |
+100%6 |
+101%6 |
Non-GAAP |
Organic Sales1 |
Operating EPS1 |
Operating EBITDA1 |
$14.3 B |
$1.43 |
$2.0 B |
|
v. FY 20182 |
-% |
(6)% |
(4)% |
- Full year reported net sales for 2019 were $13.8 billion, down 3% versus the prior year, driven by currency.
- GAAP earnings per share (EPS) from continuing operations were $0.02 for the full year – and GAAP income from continuing operations after taxes was $26 million.
- Outside of North America,3 net sales in 2019 grew 1%, with an increase of 1% in Crop Protection and flat Seed sales. New product sales led to Rest of World organic sales1 growth of 7% in Crop Protection and 6% in Seed.
- Operating EBITDA1 was $2.0 billion, down 4% versus prior year, as weather-related declines in North America and currency impacts were partially offset by cost savings, gain on divestitures, and contribution from new products.
- Merger cost synergies were approximately $350 million for 2019, on track to deliver $1.2 billion by 2021.
- Corteva returned approximately $220 million to shareholders in 2019, in line with previous commitments.
"Our results show that we capitalized on the strength of our product pipeline to realize above-market organic growth especially outside of North America. We also delivered on our cost-synergy commitments and intensified our productivity actions. In our first six months as a stand-alone company, we demonstrated our collective strengths and our ability to navigate unprecedented market conditions to finish strong."
"As we look forward, we expect more normal weather conditions in North America will set the stage for further performance improvements. We remain committed to driving shareholder value and financial results consistent with our stated priorities," said James C. Collins, Jr., Corteva Chief Executive Officer
Company Updates
- Enlist E3™ Soybean Launch Accelerated: Corteva is accelerating the ramp-up of its Enlist E3™4 soybeans, as well as its Enlist One® and Enlist Duo® herbicides, in the U.S. and Canada. Solid commercial and research performance results for the system in 2019 support acceleration. More than 20 additional licensees have been signed in the fourth quarter for a total of 120 licensees.
- Conkesta Insect Control Trait Receives China Approval: Corteva received import authorization from China for the Conkesta™ soybean insect control trait in the fourth quarter. The trait approval had been in progress in China since 2014. The receipt of China import approval is a necessary step for commercialization of Conkesta E3™ in Latin America, which is on track for the early 2020s.
- Crop Protection Asset Sales Demonstrate Best-Owner Model: Corteva agreed to sell Chlorpyrifos assets in India; Bensulfuron-Methyl assets in Asia Pacific (excluding China); Quinoxyfen business assets; and a selection of U.S. herbicide brands during the fourth quarter. These actions are aligned with the Company's commitment to driving an active portfolio management approach focused on margin expansion and shareholder value creation.
1. Organic sales, Operating EPS, Pro Forma Operating EPS, Operating EBITDA and Pro Forma Operating EBITDA are non-GAAP measures. See page 6 for further discussion. 2. First Quarter 2019 and prior year GAAP information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X. Non-GAAP measures for these periods are reconciled to the GAAP pro forma measure. 3. North America is defined as U.S. and Canada. EMEA is defined as Europe, Middle East and Africa. 4. Enlist E3™ soybeans are jointly developed by Dow AgroSciences and MS Technologies™ 5. The company does not provide the most comparable GAAP measure on a forward-looking basis. See page 6 for further discussion. 6. Full year 2019 improvement over prior year for Loss from Continuing Operations After Income Taxes and GAAP EPS is primarily due to the absence of a goodwill impairment charge recognized in the third quarter 2018. See page 3 of the Financial Statement Schedules for further disclosure. |
4Q 2019 Results Overview
GAAP |
Net Sales |
EPS |
Loss From Cont. Ops. (AT) |
$3.0 B |
$(0.06) |
$(42) M |
|
v. 4Q 2018 |
+6% |
+94% |
+94% |
Non-GAAP |
Organic Sales1 |
Operating EPS1 |
Operating EBITDA1 |
$3.1 B |
$0.07 |
$224 M |
|
v. 4Q 2018 |
9% |
+170% |
+348% |
Summary of Fourth Quarter 2019
For the fourth quarter ended December 31, 2019, reported net sales increased 6% versus the same period last year, with organic sales1 increases of 9%.
Volumes increased 6% versus the prior-year period. Volume gains in both segments were driven primarily by North America as a result of stronger sales in multi-channel seed brands; penetration of EnlistTM herbicides in preparation for the 2020 planting season; and sales of new products in Latin America and EMEA3.
Local price increased 3% versus the prior-year period, with higher prices in Latin America due to favorable mix from PowerCore Ultra® sales. Currency was a headwind of 3%, primarily from the Brazilian Real.
The Company achieved approximately $50 million in merger-related synergies in the quarter.
GAAP loss from continuing operations after income taxes was $(42) million for the fourth quarter. Operating EBITDA1 was $224 million, a $174 million improvement versus the same period last year on a pro forma basis2.
Crop Protection operating EBITDA improvement reflects merger-related cost synergies, gains on divestitures, and higher sales. Seed Operating EBITDA improvement reflects pricing gains resulting from favorable mix, merger-related cost synergies and continued productivity.
The Company reported a loss of $(0.06) for GAAP EPS from continuing operations and operating EPS1 of $0.07 for the fourth quarter 2019.
($ in millions, except |
FY 2019 |
FY 2018 |
% Change |
% Organic Change1 |
Net Sales |
$13,846 |
$14,287 |
(3)% |
- % |
North America |
$6,929 |
$7,412 |
(7)% |
(6)% |
EMEA |
$2,740 |
$2,765 |
(1)% |
7% |
Latin America |
$2,889 |
$2,817 |
3% |
8% |
Asia Pacific |
$1,288 |
$1,293 |
- % |
3% |
($ in millions, except |
4Q 2019 |
4Q 2018 |
% Change |
% Organic Change1 |
Net Sales |
$2,983 |
$2,815 |
6% |
9% |
North America |
$1,129 |
$978 |
15% |
16% |
EMEA |
$404 |
$386 |
5% |
7% |
Latin America |
$1,109 |
$1,083 |
2% |
8% |
Asia Pacific |
$341 |
$368 |
(7)% |
(6)% |
Crop Protection Summary
Crop Protection net sales were $6.3 billion in 2019, down from $6.4 billion in 2018. The decrease was due to a 3% decline in currency and a 1% impact from portfolio, partially offset by a 1% increase in volume. Local price was flat.
Unfavorable currency impacts were primarily due to the Brazilian Real and the Euro. Volume gains driven by new product launches – including EnlistTM and ArylexTM herbicides, as well as IsoclastTM insecticide – were partially offset by unfavorable weather in North America, which resulted in lost spring applications.
Pricing gains from new product launches were offset by increased grower incentive program discounts in North America. The portfolio impact was driven by divestitures in North America and Asia Pacific.
Despite sales declines in 2019, Crop Protection pro forma operating EBITDA was $1.1 billion in 2019, essentially flat with 2018. Volume declines in North America, the unfavorable impact of currency and higher input costs more than offset cost synergies, sales from new products and ongoing productivity.
($ in millions, except |
FY 2019 |
FY 2018 |
% Change |
% Organic Change1 |
North America |
$2,205 |
$2,438 |
(10)% |
(9)% |
EMEA |
$1,362 |
$1,357 |
- % |
7% |
Latin America |
$1,759 |
$1,715 |
3% |
8% |
Asia Pacific |
$930 |
$935 |
(1)% |
3% |
Total FY Crop |
$6,256 |
$6,445 |
(3)% |
1% |
Crop protection net sales for the fourth quarter of 2019 were $1.7 billion, up 3% versus the prior-year period. The increase was due to an 8% increase in volume, which was partially offset by a 3% decline in currency, 1% decline in local price and 1% impact from portfolio.
Volume gains were primarily driven by new product launches, including EnlistTM herbicide, coupled with a strong demand for insecticides in Latin America. Unfavorable currency impacts were primarily due to the Brazilian Real.
Pricing gains from new product launches were more than offset by increased grower incentive program discounts in North America. The portfolio impact was driven by divestitures in North America and Asia Pacific.
Crop Protection operating EBITDA was $277 million in the fourth quarter, up from $169 million in the same quarter last year. Cost synergies, gains on divestitures, and volume gains more than offset increased selling costs and the impact of portfolio changes.
($ in millions, except |
4Q 2019 |
4Q 2018 |
% Change |
% Organic Change1 |
North America |
$643 |
$594 |
8% |
9% |
EMEA |
$226 |
$200 |
13% |
16% |
Latin America |
$615 |
$613 |
- % |
7% |
Asia Pacific |
$256 |
$282 |
(9)% |
(7)% |
Total 4Q Crop |
$1,740 |
$1,689 |
3% |
7% |
Seed Summary
Seed net sales were approximately $7.6 billion in 2019, down from $7.8 billion in 2018. The decrease was due to a 2% decline in currency and a 1% decline in volume. Local price was flat.
Unfavorable currency impacts were primarily due to the Brazilian Real, Eastern European currencies, and the Euro. Volume gains in corn in EMEA were more than offset by significant weather-related planting delays in North America, leading to a reduction in planted area for soybeans, and multi-channel and multi-brand rationalization impacts in North America.
Competitive pricing pressure in soybeans in the U.S. and increased soybean and corn replant in North America were offset by favorable mix and continued penetration of PowerCore Ultra® in Latin America.
Seed pro forma operating EBITDA was $1.0 billion in 2019, down 9% vs. the prior year. Competitive pricing pressure, the unfavorable impact of currency, increased commissions and input costs, and volume declines more than offset cost synergies and ongoing productivity.
($ in millions, except |
FY 2019 |
FY 2018 |
% Change |
% Organic Change (1) |
North America |
$4,724 |
$4,974 |
(5)% |
(5)% |
EMEA |
$1,378 |
$1,408 |
(2)% |
6% |
Latin America |
$1,130 |
$1,102 |
3% |
7% |
Asia Pacific |
$358 |
$358 |
- % |
4% |
Total FY |
$7,590 |
$7,842 |
(3)% |
(1)% |
Seed net sales were $1.2 billion in the fourth quarter of 2019, up from $1.1 billion in the same quarter last year. The increase was due to an 8% increase in local price and a 5% increase in volume, partially offset by a 3% decline in currency.
The increase in local price was primarily driven by favorable mix in Latin America from PowerCore Ultra® and in North America due to pricing gains in corn and licensing incomes. Volume gains were driven by increased deliveries of multi-channel brands in North America.
Unfavorable currency impacts were largely driven by the Brazilian Real.
Seed operating EBITDA was a seasonal loss of $(26) million for the fourth quarter of 2019, as compared to a loss of $(87) million in the same quarter last year. Pricing gains on favorable mix and cost synergies and ongoing productivity were partially offset by higher input costs driven by higher royalties and lower production yields.
($ in millions, except |
4Q 2019 |
4Q 2018 |
% Change |
% Organic Change (1) |
North America |
$486 |
$384 |
27% |
26% |
EMEA |
$178 |
$186 |
(4)% |
(3)% |
Latin America |
$494 |
$470 |
5% |
11% |
Asia Pacific |
$85 |
$86 |
(1)% |
(4)% |
Total 4Q |
$1,243 |
$1,126 |
10% |
13% |
Outlook
The Company provided guidance5 for full year 2020 net sales of approximately $14.5 billion and expects operating EBITDA of approximately $2.2 billion for the same period. The Company's operating EPS range is expected to be between $1.45 and $1.55 per share.
Corteva is not able to reconcile its forward-looking non-GAAP financial measures to its most comparable U.S. GAAP financial measures, as it is unable to predict with reasonable certainty items outside of its control, such as significant items, without unreasonable effort.
Fourth Quarter Conference Call
The Company will host a live webcast of its fourth quarter and full-year earnings conference call with investors to discuss its results and outlook today, January 30, 2020, at 9:00 a.m. ET. The slide presentation that accompanies the conference call is posted on the Company's Investor Events and Presentations page. A replay of the webcast will also be available on the Investor Events and Presentations page.
About Corteva Agriscience
Corteva, Inc. (NYSE: CTVA) is a publicly traded, global pure-play agriculture company that provides farmers around the world with the most complete portfolio in the industry – including a balanced and diverse mix of seed, crop protection and digital solutions focused on maximizing productivity to enhance yield and profitability. With some of the most recognized brands in agriculture and an industry-leading product and technology pipeline well positioned to drive growth, the Company is committed to working with stakeholders throughout the food system as it fulfills its promise to enrich the lives of those who produce and those who consume, ensuring progress for generations to come. Corteva became an independent public company on June 1, 2019, and was previously the Agriculture Division of DowDuPont. More information can be found at www.corteva.com.
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Cautionary Statement About Forward-Looking Statements
This communication contains estimates and forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and may be identified by their use of words like "guidance", "plans," "expects," "will," "anticipates," "believes," "intends," "projects," "estimates" or other words of similar meaning. All statements that address expectations or projections about the future, including statements about Corteva's strategy for growth, product development, regulatory approval, market position, anticipated benefits of recent acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures, and financial results, as well as expected benefits from, the separation of Corteva from DuPont, are forward-looking statements.
Forward-looking statements and other estimates are based on certain assumptions and expectations of future events which may not be accurate or realized. Forward-looking statements and other estimates also involve risks and uncertainties, many of which are beyond Corteva's control. While the list of factors presented below is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in our forward-looking statements and other estimates could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Corteva's business, results of operations and financial condition. Some of the important factors that could cause Corteva's actual results to differ materially from those projected in any such forward-looking statements or estimates include: (i) effect of competition and consolidation in Corteva's industry; (ii) failure to successfully develop and commercialize Corteva's pipeline; (iii) failure to obtain or maintain the necessary regulatory approvals for some Corteva's products; (iv) failure to enforce Corteva's intellectual property rights or defend against intellectual property claims asserted by others; (v) effect of competition from manufacturers of generic products; (vi) impact of Corteva's dependence on third parties with respect to certain of its raw materials or licenses and commercialization; (vii) costs of complying with evolving regulatory requirements and the effect of actual or alleged violations of environmental laws or permit requirements; (viii) effect of the degree of public understanding and acceptance or perceived public acceptance of Corteva's biotechnology and other agricultural products; (ix) effect of changes in agricultural and related policies of governments and international organizations; (x) effect of disruptions to Corteva's supply chain, information technology or network systems; (xi) competitor's establishment of an intermediary platform for distribution of Corteva's products; (xii) effect of volatility in Corteva's input costs; (xiii) failure to raise capital through the capital markets or short-term borrowings on terms acceptable to Corteva; (xiv) failure of Corteva's customers to pay their debts to Corteva, including customer financing programs; (xv) failure to realize the anticipated benefits of the internal reorganizations taken by DowDuPont in connection with the spin-off of Corteva; (xvi) failure to benefit from significant cost synergies and risks related to the indemnification obligations of legacy DuPont liabilities in connection with the separation of Corteva; (xvii) increases in pension and other post-employment benefit plan funding obligations; (xviii) effect of compliance with environmental laws and requirements and adverse judgments on litigation; (xix) risks related to Corteva's global operations; (xx) effect of climate change and unpredictable seasonal and weather factors; (xxi) effect of counterfeit products; (xxii) failure to effectively manage acquisitions, divestitures, alliances and other portfolio actions; and (xxiii) risks related to our estimates with respect to goodwill and intangible assets.
Additionally, there may be other risks and uncertainties that Corteva is unable to currently identify or that Corteva does not currently expect to have a material impact on its business. Where, in any forward-looking statement or other estimate, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of Corteva's management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Corteva disclaims and does not undertake any obligation to update or revise any forward-looking statement or other estimate, except as required by applicable law. A detailed discussion of some of the significant risks and uncertainties which may cause results and events to differ materially from such forward-looking statements and estimates is included in the "Risk Factors" section of Exhibit 99.1 of Amendment No. 4 to Corteva's Registration Statement on Form 10 and of Corteva's Quarterly Report on Form 10-Q for the period ended September 30, 2019, as modified by subsequent reports on Form 10-Q, 10-K and Current Reports on Form 8-K.
Corteva Unaudited Pro Forma Financial Information
In order to provide the most meaningful comparison of results of operations, supplemental unaudited pro forma financial information for the first quarter of 2019 and prior has been included in this presentation. This presentation presents the pro forma results of Corteva, after giving effect to events that are (1) directly attributable to the merger of DuPont and Dow, debt retirement transactions related to paying off or retiring portions of Historical DuPont's existing debt liabilities, and the separation and distribution to DowDuPont stockholders of all the outstanding shares of Corteva common stock; (2) factually supportable and (3) with respect to the pro forma statements of income, expected to have a continuing impact on the consolidated results. Refer to Corteva's Form 10 registration statement filed on May 6, 2019, which can be found on the investors section of the Corteva website, for further details on the above transactions. The pro forma financial statements were prepared in accordance with Article 11 of Regulation S-X, and are presented for informational purposes only, and do not purport to represent what the results of operations would have been had the above actually occurred on the dates indicated, nor do they purport to project the results of operations for any future period or as of any future date.
Regulation G (Non-GAAP Financial Measures)
This earnings release includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. These measures include organic sales, operating EBITDA, pro forma operating EBITDA, operating EBITDA margin, pro forma operating EBITDA margin, operating earnings per share, pro forma operating earnings per share, base tax rate, and pro forma base tax rate. Management believes that these non-GAAP measures best reflect the ongoing performance of the Company during the periods presented and provide more relevant and meaningful information to investors as they provide insight with respect to ongoing operating results of the Company and a more useful comparison of year over year results. These non-GAAP measures supplement the Company's U.S. GAAP disclosures and should not be viewed as an alternative to U.S. GAAP measures of performance. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Reconciliations for these non-GAAP measures to U.S. GAAP are provided in the Selected Financial Information and Non-GAAP Measures starting on page 5 of the Financial Statement Schedules. For first quarter and prior year, these non-GAAP measures are being reconciled to a pro forma GAAP financial measure prepared and presented in accordance with Article 11 of Regulation S-X. See Article 11 Pro Forma Combined Statements of Operations starting on page 15 of the Financial Statement Schedules.
Corteva is not able to reconcile its forward-looking non-GAAP financial measures to their most comparable U.S. GAAP financial measures, as it is unable to predict with reasonable certainty items outside of the company's control, such as Significant Items, without unreasonable effort. For Significant items reported in the periods presented, refer to page 8 of the Financial Statement Schedules. Beginning January 1, 2020, the company will present accelerated prepaid royalty amortization expense as a significant item. Accelerated prepaid royalty amortization represents the noncash charge associated with the recognition of upfront payments made to Monsanto in connection with the Company's non-exclusive license in the United States and Canada for Monsanto's Genuity® Roundup Ready 2 Yield® Roundup Ready 2 Xtend® herbicide tolerance traits. During the five-year ramp-up period of Enlist E3TM, Corteva is expected to significantly reduce the volume of products with the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits beginning in 2021, with expected minimal use of the trait platform after the completion of the ramp-up.
Organic sales is defined as price and volume and excludes currency and portfolio impacts. Operating EBITDA is defined as earnings (i.e., income from continuing operations before income taxes) before interest, depreciation, amortization, non-operating benefits , net and foreign exchange gains (losses), excluding the impact of significant items (including goodwill impairment charges). Non-operating benefits, net consists of non-operating pension and other post-employment benefit (OPEB) credits, tax indemnification adjustments, environmental remediation and legal costs associated with legacy businesses and sites of Historical DuPont. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense. Operating EBITDA margin is defined as Operating EBITDA as a percentage of net sales. Operating earnings per share are defined as "Earnings per common share from continuing operations - diluted" excluding the after-tax impact of significant items (including goodwill impairment charges), the after-tax impact of non-operating benefits, net, and the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont. Although amortization of the Company's intangible assets is excluded from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in amortization of additional intangible assets. Base tax rate is defined as the effective tax rate excluding the impacts of foreign exchange gains (losses), non-operating benefits, net, amortization of intangibles as of the Separation from DowDuPont, and significant items (including goodwill impairment charges). All periods for the first quarter of 2019 and prior are on a pro forma basis as discussed above in the paragraph 'Corteva Unaudited Pro Forma Financial Information'.
® TM SM Trademarks and service marks of Dow AgroSciences, DuPont or Pioneer, and their affiliated companies or their respective owners.
1 |
|||||||||||||||
Corteva, Inc. |
|||||||||||||||
Consolidated Statements of Operations |
|||||||||||||||
(Dollars in millions, except per share amounts) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net sales |
$ |
2,983 |
$ |
2,815 |
$ |
13,846 |
$ |
14,287 |
|||||||
Cost of goods sold |
1,968 |
2,024 |
8,575 |
9,948 |
|||||||||||
Research and development expense |
290 |
345 |
1,147 |
1,355 |
|||||||||||
Selling, general and administrative expenses |
747 |
694 |
3,065 |
3,041 |
|||||||||||
Amortization of intangibles |
161 |
107 |
475 |
391 |
|||||||||||
Restructuring and asset related charges - net |
55 |
228 |
222 |
694 |
|||||||||||
Integration and separation costs |
50 |
295 |
744 |
992 |
|||||||||||
Goodwill impairment charge |
— |
— |
— |
4,503 |
|||||||||||
Other income - net |
125 |
131 |
215 |
249 |
|||||||||||
Loss on early extinguishment of debt |
— |
81 |
13 |
81 |
|||||||||||
Interest expense |
24 |
86 |
136 |
337 |
|||||||||||
Loss from continuing operations before income taxes |
(187) |
(914) |
(316) |
(6,806) |
|||||||||||
(Benefit from) provision for income taxes on continuing operations |
(145) |
156 |
(46) |
(31) |
|||||||||||
Loss from continuing operations after income taxes |
(42) |
(1,070) |
(270) |
(6,775) |
|||||||||||
Income (loss) from discontinued operations after income taxes |
24 |
548 |
(671) |
1,748 |
|||||||||||
Net loss |
(18) |
(522) |
(941) |
(5,027) |
|||||||||||
Net income attributable to noncontrolling interests |
3 |
9 |
18 |
38 |
|||||||||||
Net loss attributable to Corteva |
$ |
(21) |
$ |
(531) |
$ |
(959) |
$ |
(5,065) |
|||||||
Basic loss per share of common stock: |
|||||||||||||||
Basic loss per share of common stock from continuing operations |
$ |
(0.06) |
$ |
(1.44) |
$ |
(0.38) |
$ |
(9.08) |
|||||||
Basic earnings (loss) per share of common stock from discontinued |
0.03 |
0.73 |
(0.90) |
2.32 |
|||||||||||
Basic loss per share of common stock |
$ |
(0.03) |
$ |
(0.71) |
$ |
(1.28) |
$ |
(6.76) |
|||||||
Diluted loss per share of common stock: |
|||||||||||||||
Diluted loss per share of common stock from continuing operations |
$ |
(0.06) |
$ |
(1.44) |
$ |
(0.38) |
$ |
(9.08) |
|||||||
Diluted earnings (loss) per share of common stock from discontinued |
0.03 |
0.73 |
(0.90) |
2.32 |
|||||||||||
Diluted loss per share of common stock |
$ |
(0.03) |
$ |
(0.71) |
$ |
(1.28) |
$ |
(6.76) |
|||||||
Average number of shares outstanding used in earnings per share (EPS) |
|||||||||||||||
Basic |
749.6 |
749.4 |
749.5 |
749.4 |
|||||||||||
Diluted |
749.6 |
749.4 |
749.5 |
749.4 |
|||||||||||
1. |
On June 1, 2019, DuPont de Nemours, Inc. ("DuPont") distributed 748,815,000 shares of Corteva, Inc. common stock to holders of its common stock. Basic and diluted (loss) earnings per common share for the three and twelve months ended December 31, 2018 were calculated using the shares distributed on June 1, 2019 plus 582,000 of additional shares in which accelerated vesting conditions have been met. |
2 |
|||||||||
Corteva, Inc. |
|||||||||
Condensed Consolidated Balance Sheets |
|||||||||
(Dollars in millions, except per share amounts) |
|||||||||
December 31, 2019 |
December 31, 2018 |
||||||||
Assets |
|||||||||
Current assets |
|||||||||
Cash and cash equivalents |
$ |
1,764 |
$ |
2,270 |
|||||
Marketable securities |
5 |
5 |
|||||||
Accounts and notes receivable, net |
5,528 |
5,260 |
|||||||
Inventories |
5,032 |
5,310 |
|||||||
Other current assets |
1,190 |
1,038 |
|||||||
Assets of discontinued operations - current |
— |
9,089 |
|||||||
Total current assets |
13,519 |
22,972 |
|||||||
Investment in nonconsolidated affiliates |
66 |
138 |
|||||||
Property, plant and equipment, net of accumulated depreciation |
4,546 |
4,544 |
|||||||
Goodwill |
10,229 |
10,193 |
|||||||
Other intangible assets |
11,424 |
12,055 |
|||||||
Deferred income taxes |
287 |
304 |
|||||||
Other assets |
2,326 |
1,932 |
|||||||
Assets of discontinued operations - noncurrent |
— |
56,545 |
|||||||
Total Assets |
$ |
42,397 |
$ |
108,683 |
|||||
Liabilities and Equity |
|||||||||
Current liabilities |
|||||||||
Short-term borrowings and finance lease obligations |
$ |
7 |
$ |
2,154 |
|||||
Accounts payable |
3,702 |
3,798 |
|||||||
Income taxes payable |
95 |
186 |
|||||||
Accrued and other current liabilities |
4,434 |
4,005 |
|||||||
Liabilities of discontinued operations - current |
— |
3,167 |
|||||||
Total current liabilities |
8,238 |
13,310 |
|||||||
Long-Term Debt |
115 |
5,784 |
|||||||
Other Noncurrent Liabilities |
|||||||||
Deferred income tax liabilities |
920 |
1,480 |
|||||||
Pension and other post employment benefits - noncurrent |
6,377 |
5,677 |
|||||||
Other noncurrent obligations |
2,192 |
1,795 |
|||||||
Liabilities of discontinued operations - noncurrent |
— |
5,484 |
|||||||
Total noncurrent liabilities |
9,604 |
20,220 |
|||||||
Commitments and contingent liabilities |
|||||||||
Stockholders' equity |
|||||||||
Common stock, $0.01 par value; 1,666,667,000 shares authorized; |
7 |
— |
|||||||
Additional paid-in capital |
27,997 |
— |
|||||||
Divisional equity |
— |
78,020 |
|||||||
Accumulated deficit |
(425) |
— |
|||||||
Accumulated other comprehensive loss |
(3,270) |
(3,360) |
|||||||
Total Corteva stockholders' equity |
24,309 |
74,660 |
|||||||
Noncontrolling interests |
246 |
493 |
|||||||
Total equity |
24,555 |
75,153 |
|||||||
Total Liabilities and Equity |
$ |
42,397 |
$ |
108,683 |
3 |
|||||||||||||||
Corteva, Inc. |
|||||||||||||||
Pro Forma Consolidated Statements of Operations1 |
|||||||||||||||
(Dollars in millions, except per share amounts) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2019 2 |
2018 |
2019 |
2018 |
||||||||||||
Net sales |
$ |
2,983 |
$ |
2,815 |
$ |
13,846 |
$ |
14,287 |
|||||||
Cost of goods sold |
1,968 |
1,906 |
8,386 |
8,449 |
|||||||||||
Research and development expense |
290 |
344 |
1,147 |
1,352 |
|||||||||||
Selling, general and administrative expenses |
747 |
694 |
3,068 |
3,042 |
|||||||||||
Amortization of intangibles |
161 |
107 |
475 |
391 |
|||||||||||
Restructuring and asset related charges - net |
55 |
228 |
222 |
694 |
|||||||||||
Integration and separation costs |
50 |
187 |
632 |
571 |
|||||||||||
Goodwill impairment charge |
— |
— |
— |
4,503 |
|||||||||||
Other income - net |
125 |
131 |
215 |
249 |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
13 |
— |
|||||||||||
Interest expense |
24 |
25 |
91 |
76 |
|||||||||||
(Loss) income from continuing operations before income taxes |
(187) |
(545) |
27 |
(4,542) |
|||||||||||
(Benefit from) provision for income taxes on continuing operations |
(145) |
201 |
1 |
395 |
|||||||||||
(Loss) income from continuing operations after income taxes |
(42) |
(746) |
26 |
(4,937) |
|||||||||||
Net income from continuing operations attributable to noncontrolling |
3 |
6 |
13 |
29 |
|||||||||||
Net (loss) income from continuing operations attributable to Corteva |
$ |
(45) |
$ |
(752) |
$ |
13 |
$ |
(4,966) |
|||||||
Basic (loss) earnings per share of common stock from continuing |
$ |
(0.06) |
$ |
(1.00) |
$ |
0.02 |
$ |
(6.63) |
|||||||
Diluted (loss) earnings per share of common stock from continuing |
$ |
(0.06) |
$ |
(1.00) |
$ |
0.02 |
$ |
(6.63) |
|||||||
Average number of shares outstanding used in earnings per share |
|||||||||||||||
Basic |
749.6 |
749.4 |
749.5 |
749.4 |
|||||||||||
Diluted |
749.6 |
749.4 |
749.5 |
749.4 |
|||||||||||
1. |
See Article 11 Pro Forma Combined Statements of Operations beginning on page 15. |
2. |
The three months ended December 31, 2019 are on an as reported basis. |
3. |
On June 1, 2019, DuPont distributed 748,815,000 shares of Corteva, Inc. common stock to holders of its common stock. Basic and diluted (loss) earnings per common share for the three and twelve months ended December 31, 2018 were calculated using the shares distributed on June 1, 2019 plus 582,000 of additional shares in which accelerated vesting conditions have been met. |
4 |
||||||||||||||||
Corteva, Inc. |
||||||||||||||||
Consolidated Segment Information |
||||||||||||||||
(Dollars in millions) |
||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
SEGMENT NET SALES - SEED |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Corn |
$ |
962 |
$ |
891 |
$ |
5,111 |
$ |
5,180 |
||||||||
Soybean |
74 |
45 |
1,371 |
1,494 |
||||||||||||
Other oilseeds |
92 |
93 |
561 |
607 |
||||||||||||
Other |
115 |
97 |
547 |
561 |
||||||||||||
Seed |
$ |
1,243 |
$ |
1,126 |
$ |
7,590 |
$ |
7,842 |
||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
SEGMENT NET SALES - CROP PROTECTION |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Herbicides |
$ |
871 |
$ |
836 |
$ |
3,270 |
$ |
3,415 |
||||||||
Insecticides |
494 |
395 |
1,652 |
1,506 |
||||||||||||
Fungicides |
305 |
303 |
1,081 |
1,142 |
||||||||||||
Other |
70 |
155 |
253 |
382 |
||||||||||||
Crop Protection |
$ |
1,740 |
$ |
1,689 |
$ |
6,256 |
$ |
6,445 |
||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
GEOGRAPHIC NET SALES - SEED |
2019 |
2018 |
2019 |
2018 |
||||||||||||
North America 1 |
$ |
486 |
$ |
384 |
$ |
4,724 |
$ |
4,974 |
||||||||
EMEA 2 |
178 |
186 |
1,378 |
1,408 |
||||||||||||
Asia Pacific |
85 |
86 |
358 |
358 |
||||||||||||
Latin America |
494 |
470 |
1,130 |
1,102 |
||||||||||||
Rest of World 3 |
757 |
742 |
2,866 |
2,868 |
||||||||||||
Net Sales |
$ |
1,243 |
$ |
1,126 |
$ |
7,590 |
$ |
7,842 |
||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
GEOGRAPHIC NET SALES - CROP PROTECTION |
2019 |
2018 |
2019 |
2018 |
||||||||||||
North America 1 |
$ |
643 |
$ |
594 |
$ |
2,205 |
$ |
2,438 |
||||||||
EMEA 2 |
226 |
200 |
1,362 |
1,357 |
||||||||||||
Asia Pacific |
256 |
282 |
930 |
935 |
||||||||||||
Latin America |
615 |
613 |
1,759 |
1,715 |
||||||||||||
Rest of World 3 |
1,097 |
1,095 |
4,051 |
4,007 |
||||||||||||
Net Sales |
$ |
1,740 |
$ |
1,689 |
$ |
6,256 |
$ |
6,445 |
||||||||
1. Reflects U.S. & Canada |
||||||||||||||||
2. Reflects Europe, Middle East, and Africa |
||||||||||||||||
3. Reflects EMEA, Latin America, and Asia Pacific |
5 |
||||||||||||||||||||||
Corteva, Inc. |
||||||||||||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||||||||||||
(Dollars in millions, except per share amounts) |
||||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||||||||
OPERATING EBITDA |
As Reported |
Pro Forma |
Pro Forma |
Pro Forma |
||||||||||||||||||
Seed |
$ |
(26) |
$ |
(87) |
$ |
1,040 |
$ |
1,139 |
||||||||||||||
Crop Protection |
277 |
169 |
1,066 |
1,074 |
||||||||||||||||||
Corporate Expenses |
(27) |
(32) |
(119) |
(141) |
||||||||||||||||||
Operating EBITDA (Non-GAAP) |
$ |
224 |
$ |
50 |
$ |
1,987 |
$ |
2,072 |
||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||||||||
RECONCILIATION OF (LOSS) INCOME FROM CONTINUING |
As Reported |
Pro Forma |
Pro Forma |
Pro Forma |
||||||||||||||||||
(Loss) income from continuing operations after income taxes |
$ |
(42) |
$ |
(746) |
$ |
26 |
$ |
(4,937) |
||||||||||||||
(Benefit from) provision for income taxes on continuing operations |
(145) |
201 |
1 |
395 |
||||||||||||||||||
(Loss) income from continuing operations before income taxes |
(187) |
(545) |
27 |
(4,542) |
||||||||||||||||||
Depreciation and amortization |
289 |
242 |
1,000 |
909 |
||||||||||||||||||
Interest income |
(13) |
(23) |
(59) |
(86) |
||||||||||||||||||
Interest expense |
24 |
25 |
91 |
76 |
||||||||||||||||||
Exchange losses (gains) - net1 |
29 |
(63) |
66 |
77 |
||||||||||||||||||
Non-operating benefits - net2 |
(23) |
(56) |
(129) |
(211) |
||||||||||||||||||
Goodwill impairment charge |
— |
— |
— |
4,503 |
||||||||||||||||||
Significant items charge3 |
105 |
470 |
991 |
1,346 |
||||||||||||||||||
Operating EBITDA (Non-GAAP) |
224 |
50 |
1,987 |
2,072 |
||||||||||||||||||
1. |
Refer to page 14 for pre-tax and after tax impacts of exchange losses (gains) - net. |
2. |
Non-operating benefits—net consists of non-operating pension and other post-employment benefit (OPEB) (benefits) costs, tax indemnification adjustments, environmental remediation and legal costs associated with legacy EID businesses and sites. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense. |
3. |
Refer to page 8 for pre-tax and after tax impacts of significant items. |
6 |
||||||||||||||||||
Corteva, Inc. |
||||||||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||||||||
(Dollars in millions, except per share amounts) |
||||||||||||||||||
PRICE - VOLUME - CURRENCY ANALYSIS |
||||||||||||||||||
REGION |
||||||||||||||||||
Q4 2019 vs. Q4 2018 |
Percent Change Due To: |
|||||||||||||||||
Net Sales Change |
Organic Change 1 |
Local Price |
Portfolio / |
|||||||||||||||
$ |
% |
$ |
% |
Product Mix |
Volume |
Currency |
Other |
|||||||||||
North America |
$ |
151 |
15 |
% |
$ |
156 |
16 |
% |
2 |
% |
14 |
% |
— |
% |
(1) |
% |
||
EMEA |
18 |
5 |
% |
25 |
7 |
% |
4 |
% |
3 |
% |
(2) |
% |
— |
% |
||||
Asia Pacific |
(27) |
(7) |
% |
(23) |
(6) |
% |
(2) |
% |
(4) |
% |
1 |
% |
(2) |
% |
||||
Latin America |
26 |
2 |
% |
95 |
8 |
% |
4 |
% |
4 |
% |
(6) |
% |
— |
% |
||||
Rest of World |
17 |
1 |
% |
97 |
5 |
% |
3 |
% |
2 |
% |
(4) |
% |
— |
% |
||||
Total |
$ |
168 |
6 |
% |
$ |
253 |
9 |
% |
3 |
% |
6 |
% |
(3) |
% |
— |
% |
||
SEED |
||||||||||||||||||
Q4 2019 vs. Q4 2018 |
Percent Change Due To: |
|||||||||||||||||
Net Sales Change |
Organic Change 1 |
Local Price |
Portfolio / |
|||||||||||||||
$ |
% |
$ |
% |
Product Mix |
Volume |
Currency |
Other |
|||||||||||
North America |
$ |
102 |
27 |
% |
$ |
100 |
26 |
% |
10 |
% |
16 |
% |
— |
% |
1 |
% |
||
EMEA |
(8) |
(4) |
% |
(7) |
(3) |
% |
(1) |
% |
(2) |
% |
(1) |
% |
— |
% |
||||
Asia Pacific |
(1) |
(1) |
% |
(4) |
(4) |
% |
(2) |
% |
(2) |
% |
3 |
% |
— |
% |
||||
Latin America |
24 |
5 |
% |
53 |
11 |
% |
12 |
% |
(1) |
% |
(6) |
% |
— |
% |
||||
Rest of World |
15 |
2 |
% |
42 |
6 |
% |
7 |
% |
(1) |
% |
(4) |
% |
— |
% |
||||
Total |
$ |
117 |
10 |
% |
$ |
142 |
13 |
% |
8 |
% |
5 |
% |
(3) |
% |
— |
% |
||
CROP PROTECTION |
||||||||||||||||||
Q4 2019 vs. Q4 2018 |
Percent Change Due To: |
|||||||||||||||||
Net Sales Change |
Organic Change 1 |
Local Price |
Portfolio / |
|||||||||||||||
$ |
% |
$ |
% |
Product Mix |
Volume |
Currency |
Other |
|||||||||||
North America |
$ |
49 |
8 |
% |
$ |
56 |
9 |
% |
(4) |
% |
13 |
% |
— |
% |
(1) |
% |
||
EMEA |
26 |
13 |
% |
32 |
16 |
% |
9 |
% |
7 |
% |
(3) |
% |
— |
% |
||||
Asia Pacific |
(26) |
(9) |
% |
(19) |
(7) |
% |
(2) |
% |
(5) |
% |
1 |
% |
(3) |
% |
||||
Latin America |
2 |
— |
% |
42 |
7 |
% |
(1) |
% |
8 |
% |
(7) |
% |
— |
% |
||||
Rest of World |
2 |
— |
% |
55 |
5 |
% |
1 |
% |
4 |
% |
(4) |
% |
(1) |
% |
||||
Total |
$ |
51 |
3 |
% |
$ |
111 |
7 |
% |
(1) |
% |
8 |
% |
(3) |
% |
(1) |
% |
7 |
||||||||||||||||||
Corteva, Inc. |
||||||||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||||||||
(Dollars in millions, except per share amounts) |
||||||||||||||||||
PRICE - VOLUME - CURRENCY ANALYSIS |
||||||||||||||||||
REGION |
||||||||||||||||||
Twelve Months 2019 vs. Twelve Months 2018 |
Percent Change Due To: |
|||||||||||||||||
Net Sales Change |
Organic Change 1 |
Local Price & |
Portfolio / |
|||||||||||||||
$ |
% |
$ |
% |
Product Mix |
Volume |
Currency |
Other |
|||||||||||
North America |
$ |
(483) |
(7) |
% |
$ |
(448) |
(6) |
% |
(2) |
% |
(4) |
% |
(1) |
% |
— |
% |
||
EMEA |
(25) |
(1) |
% |
189 |
7 |
% |
2 |
% |
5 |
% |
(8) |
% |
— |
% |
||||
Asia Pacific |
(5) |
— |
% |
43 |
3 |
% |
2 |
% |
1 |
% |
(3) |
% |
— |
% |
||||
Latin America |
72 |
3 |
% |
208 |
8 |
% |
4 |
% |
4 |
% |
(5) |
% |
— |
% |
||||
Rest of World |
42 |
1 |
% |
440 |
7 |
% |
3 |
% |
4 |
% |
(6) |
% |
— |
% |
||||
Total |
$ |
(441) |
(3) |
% |
$ |
(8) |
— |
% |
— |
% |
— |
% |
(3) |
% |
— |
% |
||
SEED |
||||||||||||||||||
Twelve Months 2019 vs. Twelve Months 2018 |
Percent Change Due To: |
|||||||||||||||||
Net Sales Change |
Organic Change 1 |
Local Price & |
Portfolio / |
|||||||||||||||
$ |
% |
$ |
% |
Product Mix |
Volume |
Currency |
Other |
|||||||||||
North America |
$ |
(250) |
(5) |
% |
$ |
(237) |
(5) |
% |
(2) |
% |
(3) |
% |
— |
% |
— |
% |
||
EMEA |
(30) |
(2) |
% |
85 |
6 |
% |
1 |
% |
5 |
% |
(8) |
% |
— |
% |
||||
Asia Pacific |
— |
— |
% |
14 |
4 |
% |
2 |
% |
2 |
% |
(4) |
% |
— |
% |
||||
Latin America |
28 |
3 |
% |
82 |
7 |
% |
8 |
% |
(1) |
% |
(4) |
% |
— |
% |
||||
Rest of World |
(2) |
— |
% |
181 |
6 |
% |
4 |
% |
2 |
% |
(6) |
% |
— |
% |
||||
Total |
$ |
(252) |
(3) |
% |
$ |
(56) |
(1) |
% |
— |
% |
(1) |
% |
(2) |
% |
— |
% |
||
CROP PROTECTION |
||||||||||||||||||
Twelve Months 2019 vs. Twelve Months 2018 |
Percent Change Due To: |
|||||||||||||||||
Net Sales Change |
Organic Change 1 |
Local Price & |
Portfolio / |
|||||||||||||||
$ |
% |
$ |
% |
Product Mix |
Volume |
Currency |
Other |
|||||||||||
North America |
$ |
(233) |
(10) |
% |
$ |
(211) |
(9) |
% |
(3) |
% |
(6) |
% |
— |
% |
(1) |
% |
||
EMEA |
5 |
— |
% |
104 |
7 |
% |
2 |
% |
5 |
% |
(7) |
% |
— |
% |
||||
Asia Pacific |
(5) |
(1) |
% |
29 |
3 |
% |
3 |
% |
— |
% |
(3) |
% |
(1) |
% |
||||
Latin America |
44 |
3 |
% |
126 |
8 |
% |
1 |
% |
7 |
% |
(5) |
% |
— |
% |
||||
Rest of World |
44 |
1 |
% |
259 |
7 |
% |
2 |
% |
5 |
% |
(5) |
% |
(1) |
% |
||||
Total |
$ |
(189) |
(3) |
% |
$ |
48 |
1 |
% |
— |
% |
1 |
% |
(3) |
% |
(1) |
% |
||
1. |
Organic sales is defined as price and volume and excludes currency and portfolio impacts. |
8 |
|||||||||||||||||||||||||||||||||||||
Corteva, Inc. |
|||||||||||||||||||||||||||||||||||||
Significant Items |
|||||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share amounts) |
|||||||||||||||||||||||||||||||||||||
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) |
|||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||||||||||||||||||
As Reported |
Pro Forma |
Pro Forma |
Pro Forma |
||||||||||||||||||||||||||||||||||
Seed |
$ |
(90) |
$ |
(150) |
$ |
(304) |
$ |
(399) |
|||||||||||||||||||||||||||||
Crop Protection |
1 |
(16) |
(23) |
(58) |
|||||||||||||||||||||||||||||||||
Corporate |
(16) |
(304) |
(664) |
(889) |
|||||||||||||||||||||||||||||||||
Total significant items before income taxes |
$ |
(105) |
$ |
(470) |
$ |
(991) |
$ |
(1,346) |
|||||||||||||||||||||||||||||
SIGNIFICANT ITEMS - PRE-TAX, AFTER TAX, AND EPS IMPACTS |
|||||||||||||||||||||||||||||||||||||
Pre-tax |
After tax10 |
($ Per Share)11 |
|||||||||||||||||||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||||||||||||||||
1st Quarter |
Pro Forma |
Pro Forma |
Pro Forma |
Pro Forma |
Pro Forma |
Pro Forma |
|||||||||||||||||||||||||||||||
Integration costs 1 |
$ |
(100) |
$ |
(124) |
$ |
(16) |
$ |
(93) |
$ |
(0.02) |
$ |
(0.12) |
|||||||||||||||||||||||||
Restructuring and asset related charges, |
(61) |
(130) |
(53) |
(100) |
(0.07) |
(0.13) |
|||||||||||||||||||||||||||||||
Loss on divestiture 3 |
(24) |
— |
(24) |
— |
(0.03) |
— |
|||||||||||||||||||||||||||||||
Income tax items 4 |
— |
(50) |
— |
(102) |
— |
(0.14) |
|||||||||||||||||||||||||||||||
1st Quarter - Total |
$ |
(185) |
$ |
(304) |
$ |
(93) |
$ |
(295) |
$ |
(0.12) |
$ |
(0.39) |
|||||||||||||||||||||||||
2nd Quarter |
As |
Pro Forma |
As Reported |
Pro Forma |
As Reported |
Pro Forma |
|||||||||||||||||||||||||||||||
Integration and separation costs 1 |
$ |
(330) |
$ |
(126) |
$ |
(436) |
$ |
(97) |
$ |
(0.58) |
$ |
(0.13) |
|||||||||||||||||||||||||
Restructuring and asset related charges, |
(60) |
(101) |
(48) |
(81) |
(0.06) |
(0.11) |
|||||||||||||||||||||||||||||||
Gain on sale of assets 5 |
— |
24 |
— |
19 |
— |
0.03 |
|||||||||||||||||||||||||||||||
Amortization of inventory step up 6 |
(52) |
— |
(41) |
— |
(0.06) |
— |
|||||||||||||||||||||||||||||||
Loss on early extinguishment of debt 7 |
(13) |
— |
(10) |
— |
(0.01) |
— |
|||||||||||||||||||||||||||||||
Income tax items 4 |
— |
— |
— |
(7) |
— |
(0.01) |
|||||||||||||||||||||||||||||||
2nd Quarter - Total |
$ |
(455) |
$ |
(203) |
$ |
(535) |
$ |
(166) |
$ |
(0.71) |
$ |
(0.22) |
|||||||||||||||||||||||||
3rd Quarter |
As |
Pro Forma |
As Reported |
Pro Forma |
As Reported |
Pro Forma |
|||||||||||||||||||||||||||||||
Integration and separation costs 1 |
$ |
(152) |
$ |
(134) |
$ |
(119) |
$ |
(162) |
$ |
(0.16) |
$ |
(0.22) |
|||||||||||||||||||||||||
Restructuring and asset related charges, |
(46) |
(235) |
(34) |
(192) |
(0.04) |
(0.26) |
|||||||||||||||||||||||||||||||
Amortization of inventory step up 6 |
(15) |
— |
(15) |
— |
(0.02) |
— |
|||||||||||||||||||||||||||||||
Argentina currency devaluation 8 |
(33) |
— |
(38) |
— |
(0.05) |
— |
|||||||||||||||||||||||||||||||
Income tax items4 |
— |
— |
38 |
(2) |
0.05 |
— |
|||||||||||||||||||||||||||||||
3rd Quarter - Total |
$ |
(246) |
$ |
(369) |
$ |
(168) |
$ |
(356) |
$ |
(0.22) |
$ |
(0.48) |
|||||||||||||||||||||||||
4th Quarter |
As |
Pro Forma |
As Reported |
Pro Forma |
As Reported |
Pro Forma |
|||||||||||||||||||||||||||||||
Integration and separation costs 1 |
$ |
(50) |
$ |
(187) |
$ |
20 |
$ |
(147) |
$ |
0.03 |
$ |
(0.20) |
|||||||||||||||||||||||||
Restructuring and asset related charges, |
(55) |
(228) |
(42) |
(172) |
(0.06) |
(0.23) |
|||||||||||||||||||||||||||||||
Loss on divestiture 3 |
— |
(2) |
— |
(3) |
— |
— |
|||||||||||||||||||||||||||||||
Loss on deconsolidation of subsidiary 9 |
— |
(53) |
— |
(41) |
— |
(0.05) |
|||||||||||||||||||||||||||||||
Income tax items4 |
— |
— |
34 |
(274) |
0.05 |
(0.37) |
|||||||||||||||||||||||||||||||
4th Quarter - Total |
$ |
(105) |
$ |
(470) |
$ |
12 |
$ |
(637) |
$ |
0.02 |
$ |
(0.85) |
|||||||||||||||||||||||||
Year-to-date Total 11 |
$ |
(991) |
$ |
(1,346) |
$ |
(784) |
$ |
(1,454) |
$ |
(1.04) |
$ |
(1.94) |
|||||||||||||||||||||||||
9 |
|
1. |
Integration and separation costs is included in "Integration and separation costs" on the Consolidated Statement of Operations. Beginning in Q2 2019, this includes both integration and separation costs. |
The after tax benefit for the fourth quarter of 2019 includes a net tax benefit of $48 related to application of the U.S. Tax Reform's foreign tax provisions. |
|
The after tax charge for the third quarter of 2019 includes a net tax benefit of $13 related to application of the U.S. Tax Reform's foreign tax provisions. |
|
The after tax charge for the second quarter of 2019 includes a net tax charge of $(114) related to U.S. state blended tax rate changes associated with the Business Separations and a net tax charge of $(96) related to application of the U.S. Tax Reform's foreign tax provisions. |
|
The after tax charge for the first quarter of 2019 includes a net tax charge of $(32) related to U.S. state blended tax rate changes associated with the Business Separations and a tax benefit of $102 related to an internal legal entity restructuring associated with the Business Separations. |
|
2. |
Fourth quarter, third quarter, second quarter, and first quarter 2019 included restructuring and asset related charges of $(55), $(46), $(60) and $(61), respectively. The charge for the fourth quarter included a $(90) non-cash intangible asset impairment charge as a result of the company's decision to accelerate the ramp up of the Enlist E3TM trait platform in the company's soybean portfolio mix across all brands, including Pioneer brands, over the next five years with minimal use of the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® traits thereafter for the remainder of the Roundup Ready 2 License Agreement. This charge was partially offset by a benefit of $22 associated with the DowDuPont Cost Synergy Program and a benefit of $13 associated with the DowDuPont Agriculture Division Restructuring Program. The charge for the third quarter included a $(54) non-cash asset impairment related to certain intangible assets that primarily relate to heritage Dow AgroSciences intangibles previously acquired from Cooperativa Central de Pesquisa Agrícola's ("Coodetec"), classified as developed technology, other intangible assets and in-process research and development ("IPR&D"), partially offset by a benefit of $8 associated with the DowDuPont Cost Synergy Program. The charge for the first and second quarter is primarily related to the DowDuPont Cost Synergy Program. |
Fourth quarter, third quarter, second quarter, and first quarter 2018 included restructuring and asset related charges of $(228), $(235), $(101) and $(130), respectively. The charges for the first and second quarter primarily related to the DowDuPont Cost Synergy Program. The charges for the third quarter included a $(109) charge related to the DowDuPont Cost Synergy Program, an $(85) non-cash asset impairment related to certain IPR&D intangibles, and a $(41) other than temporary non-cash impairment related to an investment in nonconsolidated affiliates in China. The charges for the fourth quarter consisted of a $(144) charge related to the DowDuPont Cost Synergy Program and an $(84) charge related to the DowDuPont Agriculture Division Restructuring Program. |
|
3. |
First quarter 2019 included a loss of $(24) included in other income - net related to Historical Dow's sale of a joint venture related to synergy actions. |
Fourth quarter 2018 includes a $(2) loss related to an asset sale. |
|
4. |
Fourth quarter 2019 includes an after tax benefit related to the impact of the release of a tax valuation allowance recorded against the net deferred tax asset position of a Swiss legal entity. |
Third quarter 2019 includes an after tax benefit related to Swiss Tax Reform. |
|
Fourth quarter 2018 relates to effects of U.S. tax reform. |
|
Third quarter 2018 includes an after tax benefit related to the impacts of a tax valuation allowance recorded against the net deferred tax asset position of a Brazilian legal entity ($75 expense), a tax charge related to an internal legal entity restructuring associated with the Business Separations ($25 expense), and U.S. Tax Reform ($16 expense), which were almost entirely offset by the impact of the company's discretionary pension contribution in 2018 which was deducted on a 2017 tax return ($114 benefit). |
|
Second quarter 2018 relates to effects of U.S. tax reform. |
|
First quarter 2018 includes a $(50) pre-tax foreign exchange loss related to adjustments to foreign currency exchange contracts as a result of U.S. tax reform and a $(64) after tax charge related to effects of U.S. tax reform. |
|
5. |
Second quarter 2018 includes a gain of $24 included in other income - net related to an asset sale. |
6. |
Third quarter and second quarter 2019 include amortization of inventory step up of $(15) and $(52), respectively, included in cost of goods sold related to the amortization of the inventory step-up in connection with the Merger. |
10 |
|
7. |
Second quarter 2019 includes a loss on the early extinguishment of debt related to the difference between the redemption price and the par value of the Make Whole Notes and Term Loan Facility, partially offset by the write-off of unamortized step-up related to the fair value step-up of EID's debt. |
8. |
Third quarter 2019 includes a $(33) loss included in other income - net associated with remeasuring the company's Argentine Peso net monetary assets, resulting from an unexpected August primary election result in Argentina. Throughout the three months ended September 30, 2019, the Argentine Peso dropped approximately a third of its value against the U.S. dollar and in September of 2019, the country's central bank announced new restrictions on foreign currency transactions. The after tax charge of $(38) includes a tax valuation allowance recorded against the net deferred tax asset position of an Argentine legal entity. |
9. |
Fourth quarter 2018 includes a loss related to the deconsolidation of a subsidiary. |
10. |
Unless specifically addressed in notes above, the income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. |
11. |
Earnings per share for the year may not equal the sum of quarterly earnings per share due to rounding and the changes in average share calculations. |
11 |
||||||||||||||||
Corteva, Inc. |
||||||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||||||
(Dollars in millions, except per share amounts) |
||||||||||||||||
Operating Earnings (Loss) Per Share (Non-GAAP) |
||||||||||||||||
Operating earnings (loss) per share is defined as earnings per share from continuing operations – diluted, excluding non-operating benefits - net, amortization of intangibles (existing as of Separation), significant items, and goodwill impairment charges. |
||||||||||||||||
Three Months Ended |
||||||||||||||||
2019 |
20182 |
2019 |
20182 |
|||||||||||||
$ |
$ |
EPS (diluted) |
EPS (diluted) |
|||||||||||||
Net loss from continuing operations attributable to |
$ |
(45) |
$ |
(752) |
$ |
(0.06) |
$ |
(1.00) |
||||||||
Less: Non-operating benefits - net, after tax 1 |
16 |
44 |
0.02 |
0.06 |
||||||||||||
Less: Amortization of intangibles (existing as of |
(126) |
(86) |
(0.17) |
(0.11) |
||||||||||||
Less: Significant items benefit (charge), after tax |
12 |
(637) |
0.02 |
(0.85) |
||||||||||||
Operating Earnings (Loss) (Non-GAAP) |
$ |
53 |
$ |
(73) |
$ |
0.07 |
$ |
(0.10) |
||||||||
Twelve Months Ended |
||||||||||||||||
20192 |
20182 |
20192 |
20182 |
|||||||||||||
$ |
$ |
EPS (diluted) |
EPS (diluted) |
|||||||||||||
Net income (loss) from continuing operations attributable to Corteva (GAAP) |
$ |
13 |
$ |
(4,966) |
$ |
0.02 |
$ |
(6.63) |
||||||||
Less: Non-operating benefits - net, after tax 1 |
100 |
165 |
0.13 |
0.22 |
||||||||||||
Less: Amortization of intangibles (existing as of Separation), after tax |
(376) |
(313) |
(0.50) |
(0.42) |
||||||||||||
Less: Goodwill impairment charge, after tax |
— |
(4,503) |
— |
(6.01) |
||||||||||||
Less: Significant items charge, after tax |
(784) |
(1,454) |
(1.04) |
(1.94) |
||||||||||||
Operating Earnings (Non-GAAP) |
$ |
1,073 |
$ |
1,139 |
$ |
1.43 |
$ |
1.52 |
||||||||
1. |
Non-operating benefits—net consists of non-operating pension and other post-employment benefit (OPEB) benefits (costs), tax indemnification adjustments, and environmental remediation and legal costs associated with legacy EID businesses and sites. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense. |
2. |
Periods are presented on a Pro Forma Basis, prepared in accordance with Article 11 of Regulation S-X. |
12 |
||||||||||||||||
Corteva, Inc. |
||||||||||||||||
Operating EBITDA to Operating Earnings Per Share |
||||||||||||||||
(Dollars in millions, except per share amounts) |
||||||||||||||||
Operating EBITDA to Operating Earnings (Loss) Per Share |
||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
As Reported |
Pro Forma |
Pro Forma |
Pro Forma |
|||||||||||||
Operating EBITDA (Non-GAAP)1 |
$ |
224 |
$ |
50 |
1,987 |
2,072 |
||||||||||
Depreciation |
(128) |
(135) |
(525) |
(518) |
||||||||||||
Interest Income |
13 |
23 |
59 |
86 |
||||||||||||
Interest Expense |
(24) |
(25) |
(91) |
(76) |
||||||||||||
(Provision for) benefit from income taxes on continuing |
(15) |
35 |
(280) |
(255) |
||||||||||||
Base income tax rate from continuing operations |
17.6 |
% |
40.2 |
% |
19.6 |
% |
16.3 |
% |
||||||||
Exchange losses - net, after tax2 |
(14) |
(15) |
(64) |
(141) |
||||||||||||
Net income attributable to non-controlling interests |
(3) |
(6) |
(13) |
(29) |
||||||||||||
Operating Earnings (Loss) (Non-GAAP)1 |
$ |
53 |
$ |
(73) |
$ |
1,073 |
$ |
1,139 |
||||||||
Diluted Shares (in millions) |
749.6 |
749.4 |
749.5 |
749.4 |
||||||||||||
Operating Earnings (Loss) Per Share (Non-GAAP)1 |
$ |
0.07 |
$ |
(0.10) |
$ |
1.43 |
$ |
1.52 |
||||||||
1. |
Refer to pages 5, 11, and 13 for Non-GAAP reconciliations. |
2. |
Refer to page 14 for pre-tax and after tax impacts of exchange gains (losses) - net. |
13 |
|||||||||||||||
Corteva, Inc. |
|||||||||||||||
Reconciliation of Non-GAAP Measures |
|||||||||||||||
(Dollars in millions) |
|||||||||||||||
Reconciliation of Base Income Tax Rate to Effective Income Tax Rate |
|||||||||||||||
Base income tax rate is defined as the effective income tax rate less the effect of exchange gains (losses), significant items, goodwill impairment charges, amortization of intangibles (existing as of Separation), and non-operating benefits - net. |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
As Reported |
Pro Forma |
Pro Forma |
Pro Forma |
||||||||||||
(Loss) income from continuing operations before income taxes (GAAP) |
$ |
(187) |
$ |
(545) |
$ |
27 |
$ |
(4,542) |
|||||||
Add: Significant items - charge 1 |
105 |
470 |
991 |
1,346 |
|||||||||||
Goodwill impairment charge |
— |
— |
— |
4,503 |
|||||||||||
Non-operating benefits - net |
(23) |
(56) |
(129) |
(211) |
|||||||||||
Amortization of intangibles (existing as of Separation) |
161 |
107 |
475 |
391 |
|||||||||||
Less: Exchange (losses) gains, net 2 |
(29) |
63 |
(66) |
(77) |
|||||||||||
Income (loss) from continuing operations before income taxes, significant items, goodwill impairment charges, non-operating benefits - net, amortization of intangibles (existing as of Separation), and exchange (gains) losses, net (Non-GAAP) |
$ |
85 |
$ |
(87) |
$ |
1,430 |
$ |
1,564 |
|||||||
(Benefit from) provision for income taxes on continuing operations (GAAP) |
$ |
(145) |
$ |
201 |
$ |
1 |
$ |
395 |
|||||||
Add: Tax benefits (expenses) on significant items charge |
117 |
(167) |
207 |
(108) |
|||||||||||
Tax expenses on goodwill impairment charge |
— |
— |
— |
— |
|||||||||||
Tax expenses on non-operating benefits - net |
(7) |
(12) |
(29) |
(46) |
|||||||||||
Tax benefits on amortization of intangibles (existing as of |
35 |
21 |
99 |
78 |
|||||||||||
Tax benefits (expenses) on exchange gains (losses), net |
15 |
(78) |
2 |
(64) |
|||||||||||
Provision for (benefit from) income taxes on continuing operations before significant items, goodwill impairment charges, non-operating benefits - net, amortization of intangibles (existing as of Separation), and exchange (gains) losses, net (Non-GAAP) |
$ |
15 |
$ |
(35) |
$ |
280 |
$ |
255 |
|||||||
Effective income tax rate (GAAP) |
77.5 |
% |
(36.9) |
% |
3.7 |
% |
(8.7) |
% |
|||||||
Significant items, goodwill impairment charge, non-operating benefits, and amortization of intangibles (existing as of Separation) effect |
(77.5) |
% |
(142.3) |
% |
16.7 |
% |
30.2 |
% |
|||||||
Tax rate from continuing operations before significant items, goodwill impairment charge, non-operating benefits - net, and amortization of intangibles (existing as of Separation) |
— |
% |
(179.2) |
% |
20.4 |
% |
21.5 |
% |
|||||||
Exchange gains (losses), net effect |
17.6 |
% |
219.4 |
% |
(0.8) |
% |
(5.2) |
% |
|||||||
Base income tax rate from continuing operations (Non-GAAP) |
17.6 |
% |
40.2 |
% |
19.6 |
% |
16.3 |
% |
|||||||
1. See Significant Items table for further detail. |
|||||||||||||||
2. Pre-tax exchange gains (losses), net for the twelve months ended December 31, 2019, on an operating earnings basis |
14 |
||||||||||||||||
Corteva, Inc. |
||||||||||||||||
(Dollars in millions, except per share amounts) |
||||||||||||||||
Exchange Gains/Losses |
||||||||||||||||
The company routinely uses foreign currency exchange contracts to offset its net exposures, by currency, related to the foreign currency-denominated monetary assets and liabilities. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes on net monetary asset positions. The hedging program gains (losses) are largely taxable (tax deductible) in the United States (U.S.), whereas the offsetting exchange gains (losses) on the remeasurement of the net monetary asset positions are often not taxable (tax deductible) in their local jurisdictions. The net pre-tax exchange gains (losses) are recorded in other income (expense) - net and the related tax impact is recorded in provision for (benefit from) income taxes on continuing operations in the Consolidated Statements of Operations. |
||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Subsidiary Monetary Position Gain (Loss) |
||||||||||||||||
Pre-tax exchange gains (losses) |
$ |
18 |
$ |
(4) |
$ |
(8) |
$ |
(221) |
||||||||
Local tax benefits (expenses) |
4 |
(63) |
(11) |
(31) |
||||||||||||
Net after tax impact from subsidiary exchange gains |
$ |
22 |
$ |
(67) |
$ |
(19) |
$ |
(252) |
||||||||
Hedging Program (Loss) Gain |
||||||||||||||||
Pre-tax exchange (losses) gains |
$ |
(47) |
$ |
67 |
$ |
(58) |
$ |
144 |
||||||||
Tax benefits (expenses) |
11 |
(15) |
13 |
(33) |
||||||||||||
Net after tax impact from hedging program exchange |
$ |
(36) |
$ |
52 |
$ |
(45) |
$ |
111 |
||||||||
Total Exchange (Loss) Gain |
||||||||||||||||
Pre-tax exchange (losses) gains 1 |
$ |
(29) |
$ |
63 |
$ |
(66) |
$ |
(77) |
||||||||
Tax benefits (expenses) |
15 |
(78) |
2 |
(64) |
||||||||||||
Net after tax exchange losses |
$ |
(14) |
$ |
(15) |
$ |
(64) |
$ |
(141) |
||||||||
As shown above, the "Total Exchange (Loss) Gain" is the sum of the "Subsidiary Monetary Position Loss" and the "Hedging Program Gain (Loss)." |
||||||||||||||||
1. Pre-tax exchange (losses) gains, net for the twelve months ended December 31, 2019, on an operating earnings basis |
15 |
|||||||||||||||||||||
Corteva, Inc. |
|||||||||||||||||||||
Article 11 Pro Forma Combined Statement of Operations |
|||||||||||||||||||||
(Dollars in millions, except per share amounts) |
|||||||||||||||||||||
Three Months Ended December 31, 2018 |
|||||||||||||||||||||
As |
Adjustments |
Pro Forma |
|||||||||||||||||||
Merger1 |
Debt |
Separations |
|||||||||||||||||||
Net sales |
$ |
2,815 |
$ |
— |
$ |
— |
$ |
— |
$ |
2,815 |
|||||||||||
Cost of goods sold |
2,024 |
(130) |
— |
12 |
1,906 |
||||||||||||||||
Research and development expense |
345 |
— |
— |
(1) |
344 |
||||||||||||||||
Selling, general and administrative expenses |
694 |
— |
— |
— |
694 |
||||||||||||||||
Amortization of intangibles |
107 |
— |
— |
— |
107 |
||||||||||||||||
Restructuring and asset related charges - net |
228 |
— |
— |
— |
228 |
||||||||||||||||
Integration and separation costs |
295 |
— |
— |
(108) |
187 |
||||||||||||||||
Other income - net |
131 |
— |
— |
— |
131 |
||||||||||||||||
Loss on early extinguishment of debt |
81 |
— |
(81) |
— |
— |
||||||||||||||||
Interest expense |
86 |
— |
(61) |
— |
25 |
||||||||||||||||
Loss from continuing operations before |
(914) |
130 |
142 |
97 |
(545) |
||||||||||||||||
Provision for income taxes on continuing |
156 |
31 |
32 |
(18) |
201 |
||||||||||||||||
Loss from continuing operations after income |
(1,070) |
99 |
110 |
115 |
(746) |
||||||||||||||||
Net income from continuing operations attributable |
6 |
— |
— |
— |
6 |
||||||||||||||||
Net loss from continuing operations |
$ |
(1,076) |
$ |
99 |
$ |
110 |
$ |
115 |
$ |
(752) |
|||||||||||
Basic loss per share of common stock from |
$ |
(1.44) |
$ |
(1.00) |
|||||||||||||||||
Diluted loss per share of common stock from |
$ |
(1.44) |
$ |
(1.00) |
|||||||||||||||||
Average number of shares outstanding used in |
|||||||||||||||||||||
Basic |
749.4 |
749.4 |
|||||||||||||||||||
Diluted |
749.4 |
749.4 |
|||||||||||||||||||
1. |
Related to the amortization of EID's agriculture business' inventory step-up recognized in connection with the Merger, as the incremental amortization is directly attributable to the Merger and will not have a continuing impact. |
2. |
Represents removal of interest expense related to the debt redemptions/repayments and the removal of loss on extinguishment of debt related to the difference between the redemption price and the par value of the Make Whole Notes, the Term Loan Facility, and the SMR Notes, partially offset by the write-off of unamortized step-up related to the fair value step-up of EID's debt. |
3. |
Adjustments directly attributable to the separations and distributions of Corteva, Inc. include the following: removal of Telone® Soil Fumigant business ("Telone®") results (as Telone® did not transfer to Corteva as part of the common control combination of DAS); 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. |
16 |
|||||||||||||||||||
Corteva, Inc. |
|||||||||||||||||||
Article 11 Pro Forma Combined Statement of Operations |
|||||||||||||||||||
(Dollars in millions, except per share amounts) |
|||||||||||||||||||
Twelve Months Ended December 31, 2019 |
|||||||||||||||||||
As |
Adjustments |
Pro Forma |
|||||||||||||||||
Merger1 |
Debt |
Separations |
|||||||||||||||||
Net sales |
$ |
13,846 |
$ |
— |
$ |
— |
$ |
— |
$ |
13,846 |
|||||||||
Cost of goods sold |
8,575 |
(205) |
— |
16 |
8,386 |
||||||||||||||
Research and development expense |
1,147 |
— |
— |
— |
1,147 |
||||||||||||||
Selling, general and administrative expenses |
3,065 |
— |
— |
3 |
3,068 |
||||||||||||||
Amortization of intangibles |
475 |
— |
— |
— |
475 |
||||||||||||||
Restructuring and asset related charges - net |
222 |
— |
— |
— |
222 |
||||||||||||||
Integration and separation costs |
744 |
— |
— |
(112) |
632 |
||||||||||||||
Other income - net |
215 |
— |
— |
— |
215 |
||||||||||||||
Loss on early extinguishment of debt |
13 |
— |
— |
— |
13 |
||||||||||||||
Interest expense |
136 |
— |
(45) |
— |
91 |
||||||||||||||
(Loss) income from continuing operations |
(316) |
205 |
45 |
93 |
27 |
||||||||||||||
(Benefit from) provision for income taxes on |
(46) |
36 |
10 |
1 |
1 |
||||||||||||||
(Loss) income from continuing operations after |
(270) |
169 |
35 |
92 |
26 |
||||||||||||||
Net income from continuing operations attributable |
13 |
— |
— |
— |
13 |
||||||||||||||
Net (loss) income from continuing operations |
$ |
(283) |
$ |
169 |
$ |
35 |
$ |
92 |
$ |
13 |
|||||||||
Basic (loss) earnings per share of common |
$ |
(0.38) |
$ |
0.02 |
|||||||||||||||
Diluted (loss) earnings per share of common |
$ |
(0.38) |
$ |
0.02 |
|||||||||||||||
Average number of shares outstanding used in |
|||||||||||||||||||
Basic |
749.5 |
749.5 |
|||||||||||||||||
Diluted |
749.5 |
749.5 |
|||||||||||||||||
1. |
Related to the amortization of EID's agriculture business' inventory step-up recognized in connection with the Merger, as the incremental amortization is directly attributable to the Merger and will not have a continuing impact. |
2. |
Represents removal of interest expense related to the debt redemptions/repayments. |
3. |
Adjustments directly attributable to the separations and distributions of Corteva, Inc. include the following: removal of Telone® Soil Fumigant business ("Telone®") results (as Telone® did not transfer to Corteva as part of the common control combination of DAS); 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. |
17 |
|||||||||||||||||||
Corteva, Inc. |
|||||||||||||||||||
Article 11 Pro Forma Combined Statement of Operations |
|||||||||||||||||||
(Dollars in millions, except per share amounts) |
|||||||||||||||||||
Twelve Months Ended December 31, 2018 |
|||||||||||||||||||
As |
Adjustments |
Pro Forma |
|||||||||||||||||
Merger1 |
Debt |
Separations |
|||||||||||||||||
Net sales |
$ |
14,287 |
$ |
— |
$ |
— |
$ |
— |
$ |
14,287 |
|||||||||
Cost of goods sold |
9,948 |
(1,554) |
— |
55 |
8,449 |
||||||||||||||
Research and development expense |
1,355 |
— |
— |
(3) |
1,352 |
||||||||||||||
Selling, general and administrative expenses |
3,041 |
— |
— |
1 |
3,042 |
||||||||||||||
Amortization of intangibles |
391 |
— |
— |
— |
391 |
||||||||||||||
Restructuring and asset related charges - net |
694 |
— |
— |
— |
694 |
||||||||||||||
Integration and separation costs |
992 |
— |
— |
(421) |
571 |
||||||||||||||
Goodwill impairment charge |
4,503 |
— |
— |
— |
4,503 |
||||||||||||||
Other income - net |
249 |
— |
— |
— |
249 |
||||||||||||||
Loss on early extinguishment of debt |
81 |
— |
(81) |
— |
— |
||||||||||||||
Interest expense |
337 |
— |
(261) |
— |
76 |
||||||||||||||
Loss from continuing operations before |
(6,806) |
1,554 |
342 |
368 |
(4,542) |
||||||||||||||
(Benefit from) provision for income taxes on |
(31) |
295 |
78 |
53 |
395 |
||||||||||||||
Loss from continuing operations after income |
(6,775) |
1,259 |
264 |
315 |
(4,937) |
||||||||||||||
Net income from continuing operations attributable |
29 |
— |
— |
— |
29 |
||||||||||||||
Net loss from continuing operations |
$ |
(6,804) |
$ |
1,259 |
$ |
264 |
$ |
315 |
$ |
(4,966) |
|||||||||
Basic loss per share of common stock from |
$ |
(9.08) |
$ |
(6.63) |
|||||||||||||||
Diluted loss per share of common stock from |
$ |
(9.08) |
$ |
(6.63) |
|||||||||||||||
Average number of shares outstanding used in |
|||||||||||||||||||
Basic |
749.4 |
749.4 |
|||||||||||||||||
Diluted |
749.4 |
749.4 |
|||||||||||||||||
1. |
Related to the amortization of EID's agriculture business' inventory step-up recognized in connection with the Merger, as the incremental amortization is directly attributable to the Merger and will not have a continuing impact. |
2. |
Represents removal of interest expense related to the debt redemptions/repayments and the removal of loss on extinguishment of debt related to the difference between the redemption price and the par value of the Make Whole Notes, the Term Loan Facility, and the SMR Notes, partially offset by the write-off of unamortized step-up related to the fair value step-up of EID's debt. |
3. |
Adjustments directly attributable to the separations and distributions of Corteva, Inc. include the following: removal of Telone® Soil Fumigant business ("Telone®") results (as Telone® did not transfer to Corteva as part of the common control combination of DAS); 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. |
SOURCE Corteva, Inc.
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