Corteva, Inc. — 2022 Form 10-K Summary
Business context and reporting period
This is Corteva’s combined annual report with subsidiary EIDP, Inc., for the fiscal year ended December 31, 2022—not a quarterly filing. Corteva is a global agricultural inputs company operating in approximately 140 countries through its Seed and Crop Protection segments. Amounts below are in U.S. dollars; financial results are Corteva consolidated unless otherwise noted.
Financial performance and liquidity
| Metric | 2022 | 2021 |
|---|---|---|
| Net sales | $17.455 billion | $15.655 billion |
| Income from continuing operations | $1.216 billion | $1.822 billion |
| Net income attributable to Corteva | $1.147 billion | $1.759 billion |
| Diluted GAAP EPS | $1.58 | $2.37 |
| Operating EBITDA (non-GAAP) | $3.224 billion | $2.576 billion |
| Operating EPS (non-GAAP) | $2.67 | $2.15 |
| Cash from operating activities | $872 million | $2.727 billion |
| Capital expenditures | $605 million | $573 million |
| Cash, cash equivalents and marketable securities | $3.315 billion | $4.545 billion |
| Total debt | $1.307 billion | $1.117 billion |
Sales rose 11%: price increased 10% and volume 5%, partly offset by 3% unfavorable currency and 1% unfavorable portfolio impact. Cost of goods sold was $10.436 billion, or 60% of sales, versus $9.220 billion, or 59%, in 2021. Seed sales were $8.979 billion (+7%) and segment operating EBITDA was $1.656 billion (+10%); Crop Protection sales were $8.476 billion (+17%) and segment operating EBITDA was $1.684 billion (+40%). Segment EBITDA margins improved approximately 45 basis points in Seed and 330 basis points in Crop Protection.
Operating EBITDA and operating EPS are non-GAAP measures. The segment operating EBITDA total was $3.340 billion; it differs from company Operating EBITDA, which excludes corporate expenses. Lower 2022 GAAP income chiefly reflects the unusually large prior-year non-operating pension and OPEB credits, alongside higher restructuring charges, exchange losses and estimated settlement reserves. Operating cash flow fell substantially, driven mainly by working-capital investment: inventories increased to $6.811 billion from $5.180 billion and receivables also rose.
At year-end, current assets were $16.795 billion and current liabilities $10.744 billion. The company reported approximately $6.0 billion of available committed and uncommitted credit lines and said liquidity, operating cash generation and market access should meet anticipated needs. It was in compliance with its credit-facility debt-to-capital covenant. Cash and marketable securities held by foreign subsidiaries totaled approximately $2.0 billion.
Material changes versus 2021
- Revenue increased 11%, supported by pricing and growth in both segments; Crop Protection grew faster than Seed.
- GAAP income from continuing operations decreased to $1.216 billion from $1.822 billion, while non-GAAP Operating EBITDA increased to $3.224 billion from $2.576 billion.
- Operating cash flow declined to $872 million from $2.727 billion, with higher inventory and receivables among the principal factors.
- Cash and marketable securities declined by $1.230 billion; total debt increased by $190 million.
- Corteva recorded $363 million of restructuring and asset-related charges, including $272 million tied to 2022 restructuring actions and $109 million of non-cash accelerated prepaid royalty amortization.
- The company returned approximately $1.4 billion to shareholders through repurchases and dividends. Its annual dividend rose to $0.58 per share from $0.54.
Outlook, commentary and risks
For 2023, management forecast net sales of $18.1–$18.4 billion, Operating EBITDA of $3.4–$3.6 billion and Operating EPS of $2.70–$2.90. The outlook assumes robust agricultural demand and healthy farmer finances, but excludes the expected Stoller and Symborg acquisitions, with an aggregate purchase price of $1.6 billion, as well as extreme weather, significant operational disruptions or further material currency and inflation effects. Management expected 2023 capital expenditures of approximately $650 million and long-term employee benefit costs to increase by about $300 million.
The 2022 restructuring actions, including the Russia exit, were expected to result in total net pre-tax restructuring and other charges of $350–$420 million, with $180–$210 million of cash payments; approximately $90 million had been paid by year-end. Actions were expected to be substantially complete in 2023 and generate estimated annualized savings of $210–$220 million by 2025. Management also cited persistent input-cost and logistics pressures, though inflationary pressure could ease year over year later in 2023.
Key risks include regulatory approval delays or restrictions on seed traits and crop protection products; weather and climate variability; input-cost, supply-chain, foreign-exchange and geopolitical shocks; competition and antitrust actions; customer credit and seasonal working-capital needs; and litigation and environmental liabilities. The FTC and state attorneys general filed antitrust claims in 2022, with related private litigation consolidated in 2023. Legacy PFAS matters remain significant: Corteva estimated its aggregate share of potential MOU expenses and escrow contributions at approximately $600 million. Environmental remediation accruals were $512 million, and the company disclosed that costs could be as much as approximately $600 million above accruals under adverse circumstances. Recovery of indemnification assets depends in part on counterparties’ ability to pay.
Most important facts for investors to verify
- Whether revenue growth, pricing and segment margin improvement can continue as input, freight and currency pressures evolve.
- How working capital—especially inventories and receivables—converts to cash, and whether operating cash flow recovers from the 2022 decline.
- Progress against the 2023 sales, EBITDA and EPS outlook, including the exclusions and assumptions underlying the guidance.
- Actual restructuring cash costs and delivery of the projected savings, as well as acquisition closing costs and performance.
- Developments and potential financial exposure from the FTC litigation, Lorsban claims, PFAS matters and other environmental proceedings, including indemnification recoveries.
- The assumptions supporting goodwill valuations: goodwill was approximately $10.0 billion, including $5.3 billion in Seed; the auditor identified the Seed impairment assessment as a critical audit matter, although no impairment was recorded.