Corteva Inc
For the period ended Dec 31, 2023. Filed Feb 8, 2024.
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FY2023 · Filed Feb 8, 2024
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Income Taxes
NOTE 3 - INCOME TAXES
Refer to page F-26 of the Corteva, Inc. Consolidated Financial Statements for discussion of tax items that do not differ between Corteva, Inc. and EIDP.
| Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes | For the Year Ended December 31, | ||
|---|---|---|---|
| (In millions) | 2023 | 2022 | 2021 |
| Income (loss) from continuing operations before income taxes | |||
| Domestic | $(434) | $(46) | $892 |
| Foreign | 1,507 | 1,427 | 1,404 |
| Income (loss) from continuing operations before income taxes | $1,073 | $1,381 | $2,296 |
| Current tax expense (benefit) | |||
| Federal | $138 | $56 | $(23) |
| State and local | 40 | 19 | 4 |
| Foreign | 407 | 403 | 329 |
| Total current tax expense (benefit) | $585 | $478 | $310 |
| Deferred tax expense (benefit) | |||
| Federal | $(326) | $(170) | $164 |
| State and local | (50) | (39) | 55 |
| Foreign | (62) | (70) | (17) |
| Total deferred tax expense (benefit) | $(438) | $(279) | $202 |
| Provision for (benefit from) income taxes on continuing operations | 147 | 199 | 512 |
| Net income (loss) from continuing operations | $926 | $1,182 | $1,784 |
| Reconciliation to U.S. Statutory Rate | For the Year Ended December 31, | ||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| Statutory U.S. federal income tax rate | 21.0% | 21.0% | 21.0% |
| Effective tax rates on international operations - net1 | (1.9) | (3.6) | (2.6) |
| Acquisitions, divestitures and ownership restructuring activities2 | 3.6 | (5.5) | (0.1) |
| U.S. research and development credit | (6.0) | (2.3) | (2.5) |
| Exchange gains/losses3 | 2.0 | 3.8 | 1.9 |
| State and local income taxes - net | 0.9 | 0.2 | 2.2 |
| Impact of Swiss Tax Changes4 | (8.0) | — | 0.2 |
| Excess tax benefits/deficiencies from stock compensation | (0.6) | (0.7) | (0.2) |
| Tax settlements and expiration of statute of limitations | (0.4) | 0.1 | — |
| Repatriation of foreign earnings5 | 2.9 | 1.7 | 1.0 |
| Other – net | 0.2 | (0.3) | 1.3 |
| Effective tax rate | 13.7% | 14.4% | 22.2% |
Includes the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S. GAAP results. Includes a tax benefit of $(36) million for the year ended December 31, 2022, relating to the release of a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil.
Includes a tax charge of $46 million for the year ended December 31, 2023 associated with intellectual property realignment. Includes net tax benefits of $(55) million and $(42) million for the year ended December 31, 2022, related to deferred tax assets established upon change in a U.S. entity's tax characterization, and a worthless stock deduction on Company's investment in a subsidiary after a change in the entity's legal structure, respectively.
Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized. Further information about the company's foreign currency hedging program is included in Note 7 - Supplementary Information, and Note 20 - Financial Instruments, under the heading Foreign Currency Risk.
Includes net tax benefits of $(62) million and $(24) million for the year ended December 31, 2023, related to changes in deferred taxes and a tax currency change, respectively.
Includes the effect of withholding tax on distribution of foreign earnings to the U.S., net of U.S. foreign tax credits.
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