CTA-PB

Business Context and Reporting Period

This Form 10-K is a combined annual report for Corteva, Inc. (CTVA) and its wholly-owned subsidiary, EIDP, Inc. (formerly E. I. du Pont de Nemours and Company), for the fiscal year ended December 31, 2024. Corteva is a leading global provider of Seed and Crop Protection solutions, operating through two reportable segments: Seed and Crop Protection. EIDP serves as the holding company for Corteva's operations and retains certain legacy liabilities and preferred stock obligations.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Decline: Net sales decreased 2% to $16.9 billion, driven by a 1% price decrease and 3% unfavorable currency impact, partially offset by a 2% volume increase.
• Profitability: Income from continuing operations after taxes declined 8% to $863 million. The effective tax rate increased significantly to 32.3% (from 13.9% in 2023), largely due to a $120 million valuation allowance charge in Brazil.
• Segment Performance:
  • Seed: Net sales increased 1% to $9.5 billion; Operating EBITDA increased 5% to $2.2 billion, driven by pricing gains and reduced royalty expenses.
  • Crop Protection: Net sales decreased 5% to $7.4 billion; Operating EBITDA decreased 7% to $1.3 billion, impacted by competitive pricing and currency headwinds.
• Restructuring: Restructuring and asset-related charges totaled $288 million, a decrease from $336 million in 2023. This includes charges related to the Crop Protection Operations Strategy Restructuring Program and accelerated amortization of prepaid royalties.
• Capital Allocation: The company returned approximately $1.5 billion to shareholders via dividends and share repurchases. A new $3 billion share repurchase program was authorized in November 2024.

Guidance, Outlook, and Risks

• Outlook: Management expects 2025 capital expenditures to be approximately $600 million. The company anticipates repurchasing approximately $1 billion of stock in 2025 under existing programs.
• Internal Control Weakness (EIDP): EIDP identified a material weakness in internal controls regarding the classification of intercompany cash flows with Corteva. This resulted in a restatement of EIDP's 2023 and 2024 interim cash flow statements. The weakness does not impact Corteva's consolidated financial statements.
• Legal and Environmental Contingencies:
  • PFAS Litigation: Significant ongoing litigation regarding PFAS contamination (e.g., Nationwide Water District Settlement, Ohio MDL). Corteva has accrued $478 million for environmental remediation, with potential exposure up to $600 million above accrued amounts.
  • Intellectual Property: Ongoing disputes with Bayer regarding Enlist traits and Roundup Ready royalties, and with Inari regarding seed technology patents.
  • Antitrust: The FTC and multiple state attorneys general have filed lawsuits alleging anticompetitive conduct in the Crop Protection segment.
• Operational Risks: Exposure to weather patterns, climate change, geopolitical conflicts (impacting supply chains and trade), and input cost volatility.

Investor Verification Checklist

• Restatement Impact: Verify the specific impact of the EIDP cash flow restatement on standalone EIDP liquidity metrics, noting it does not affect Corteva's consolidated results.
• Tax Rate Volatility: Review the $120 million Brazil valuation allowance charge and its potential recurrence or reversal in future periods.
• PFAS Liability Exposure: Assess the adequacy of the $478 million environmental accrual against the disclosed potential exposure range and ongoing settlement negotiations.
• Restructuring Progress: Monitor the execution of the Crop Protection Operations Strategy Restructuring Program and the realization of the estimated $180 million in run-rate savings by 2027.
• Share Repurchase Execution: Track the utilization of the new $3 billion buyback authorization and the remaining capacity under the 2022 program.