Corteva Inc

Previous wording

This report contains certain 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 “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates,” “outlook,” or other words of similar meaning. All statements that address expectations or projections about the future, including statements about Corteva’s financial results or outlook; strategy for growth; product development; regulatory approvals; market position; capital allocation strategy; liquidity; environmental, social and governance (“ESG”) targets and initiatives; the anticipated benefits of acquisitions, restructuring actions, or cost savings initiatives; and the outcome of contingencies, such as litigation and environmental matters, are forward-looking statements.

Current wording

This report contains certain 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 “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates,” “outlook,” or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company’s financial results or outlook; strategy for growth; product development; regulatory approvals; market position; capital allocation strategy; liquidity; sustainability commitments and strategies; the anticipated benefits of acquisitions, restructuring actions, or cost savings initiatives; and the outcome of contingencies, such as litigation and environmental matters, are forward-looking statements.

Previous wording

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 the forward-looking statements 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 include: (i) failure to obtain or maintain the necessary regulatory approvals for some of Corteva’s products; (ii) failure to successfully develop and commercialize Corteva’s pipeline; (iii) effect of the degree of public understanding and acceptance or perceived public acceptance of Corteva’s biotechnology and other agricultural products; (iv) effect of changes in agricultural and related policies of governments and international organizations; (v) costs of complying with evolving regulatory requirements and the effect of actual or alleged violations of environmental laws or permit requirements; (vi) effect of climate change and unpredictable seasonal and weather factors; (vii) failure to comply with competition and antitrust laws; (viii) effect of competition in Corteva's industry; (ix) competitor’s establishment of an intermediary platform for distribution of Corteva's products; (x) impact of Corteva's dependence on third parties with respect to certain of its raw materials or licenses and commercialization; (xi) effect of volatility in Corteva's input costs; (xii) risk related to geopolitical and military conflict; (xiii) risks related to environmental litigation and the indemnification obligations of legacy EIDP liabilities in connection with the separation of Corteva; (xiv) risks related to Corteva's global operations; (xv) failure to effectively manage acquisitions, divestitures, alliances, restructurings, cost savings initiatives, and other portfolio actions; (xvi) effect of industrial espionage and other disruptions to Corteva’s supply chain, information technology or network systems; (xvii) failure of Corteva’s customers to pay their debts to Corteva, including customer financing programs; (xviii) failure to raise capital through the capital markets or short-term borrowings on terms acceptable to Corteva; (xix) increases in pension and other post-employ…

Excerpt shortened here; the source contains the full paragraph.

Current wording

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 the company'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 the forward-looking statements 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 the company's business, results of operations and financial condition. Some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements include: (i) failure to obtain or maintain the necessary regulatory approvals for some of the company's products; (ii) failure to successfully develop and commercialize the company's pipeline; (iii) effect of the degree of public understanding and acceptance or perceived public acceptance of the company's biotechnology and other agricultural products; (iv) effect of changes in agricultural and related policies of governments and international organizations; (v) costs of complying with evolving regulatory requirements and the effect of actual or alleged violations of environmental laws or permit requirements; (vi) effect of climate change and unpredictable seasonal and weather factors; (vii) failure to comply with competition and antitrust laws; (viii) effect of competition in the company's industry; (ix) competitor’s establishment of an intermediary platform for distribution of the company's products; (x) risk related to geopolitical and military conflict; (xi) effect of volatility in the company's input costs; (xii) risks related to the company's global operations; (xiii) effect of industrial espionage and other disruptions to the company's supply chain, information technology or network systems; (xiv) risks related to environmental litigation and the indemnification obligations of legacy EIDP liabilities in connection with the separation of Corteva; (xv) impact of the company's dependence on third parties with respect to certain of its raw materials or licenses and commercialization; (xvi) failure of the company's customers to pay their debts to the company, including customer financing programs; (xvii) failure to effectively manage acquisitions, divestitures, alliances, restructurings, cost savings initiatives, and other portfolio actions; (xviii) failure to raise capital through the capital markets or short-term borrowings on terms acceptable to t…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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, 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 is included in the section titled “Risk Factors” (Part I, Item 1A of this Form 10-K).

Current wording

Additionally, there may be other risks and uncertainties that the company is unable to currently identify or that the company 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 the company'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. The company disclaims and does not undertake any obligation to update or revise any forward-looking statement, 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 is included in the section titled “Risk Factors” (Part I, Item 1A of this Form 10-K).

Previous wording

•The company reported net sales of $17,226 million, a decrease of 1 percent versus the year ended December 31, 2022, reflecting a 10 percent decrease in volume and a 1 percent unfavorable impact from currency, partially offset by a 7 percent price increase and a 3 percent favorable portfolio and other impact.

Current wording

•The company reported net sales of $16,908 million, a decrease of 2 percent versus the year ended December 31, 2023, reflecting a 1 percent decrease in price, and a 3 percent unfavorable currency impact, partially offset by a 2 percent increase in volume.

Previous wording

•Cost of goods sold ("COGS") totaled $9,920 million, down from $10,436 million for the year ended December 31, 2022, primarily driven by lower volumes, ongoing cost and productivity actions and a decrease in royalty expense, partially offset by higher input costs, which are primarily macro-economic driven.

Current wording

•Cost of goods sold ("COGS") totaled $9,529 million, down from $9,920 million for the year ended December 31, 2023, primarily driven by favorable currency effects, ongoing cost and productivity actions, Crop Protection raw material deflation and a reduction in Seed royalty expense, with a partial offset from increased commodity prices.

Previous wording

•Restructuring and asset related charges - net were $336 million, a decrease from $363 million for the year ended December 31, 2022. The year ended December 31, 2023 primarily included $217 million related to asset related charges, including non-cash impairment charges of $152 million, and contract termination charges associated with the Crop Protection Operations Strategy Restructuring Program, charges of $72 million of non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits and $42 million related to severance and related benefit costs, asset related charges and contract termination charges associated with the 2022 Restructuring Actions.

Current wording

•Restructuring and asset related charges - net were $288 million, a decrease from $336 million for the year ended December 31, 2023. The charges for the year ended December 31, 2024 primarily relate to asset related charges, severance and related benefit costs, contract termination charges, and decommissioning and demolition costs associated with the Crop Protection Operations Strategy Restructuring Program and non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits.

Previous wording

•Income from continuing operations after income taxes was $941 million, as compared to $1,216 million for the year ended December 31, 2022.

Current wording

•Income from continuing operations after income taxes was $863 million, as compared to $941 million for the year ended December 31, 2023.

Previous wording

•Operating EBITDA was $3,381 million, which improved from $3,224 million for the year ended December 31, 2022, primarily driven by price execution and productivity actions, partially offset by lower volumes coupled with cost and currency headwinds. Refer to page 44 for further discussion of the company's Non-GAAP financial measures.

Current wording

•Operating EBITDA was $3,376 million, down from $3,381 million for the year ended December 31, 2023, primarily driven by competitive Crop Protection pricing and continued investment in Seed research and development, partially offset by Seed pricing gains, the reduction of royalty expense and ongoing cost and productivity actions. Refer to page 44 for further discussion of the company's Non-GAAP financial measures.

Previous wording

•The company returned approximately $1.2 billion to shareholders during the year ended December 31, 2023 under its previously announced share repurchase programs and through common stock dividends.

Current wording

•The company returned approximately $1.5 billion to shareholders during the year ended December 31, 2024 under its previously announced share repurchase programs and through common stock dividends.

Previous wording

•On July 21, 2023, the company's Board of Directors approved a 6.7 percent increase in the quarterly common stock dividend from $0.15 per share to $0.16 per share.

Current wording

•On July 29, 2024, the company's Board of Directors approved a 6.25 percent increase in the quarterly common stock dividend from $0.16 per share to $0.17 per share.

Previous wording

The company continues to believe the following priorities will create significant value for its customers and shareholders over the mid-term:

Current wording

The company believes the following priorities will continue to create significant value for its customers and shareholders over the mid-term:

Previous wording

•Accelerate performance and growth through a value creation network focused on four key catalysts: (1) portfolio simplification that prioritizes core markets and crops, in which we deliver top tier technology to our customers, (2) a continued move towards royalty neutrality, (3) improve our product mix to focus on differentiation and yield advantage, and (4) operational improvements focused on driving price and productivity.

Current wording

•Focus on Execution– the company will focus on a value creation framework and its four key catalysts: (1) the delivery of top tier technology in our prioritized core markets and crops while achieving best-in-class cost performance; (2) a continued move towards Seed royalty neutrality; (3) a continued improvement in our product mix to strengthen focus on differentiation and yield advantage; and (4) operational improvements focused on driving price and productivity improvements.

Previous wording

•Increased investment in our industry-leading innovation pipeline focused on delivering even greater value and productivity to growers through more differentiated and sustainably advantaged solutions, which in turn promise to strengthen global food security and help address the impacts of climate change.

Current wording

•Deliver Innovation to Farmers, Faster – Corteva aims to deliver greater value and productivity to growers through more differentiated and sustainably advantaged solutions, which in turn promise to strengthen global food security and help farmers address the impacts of climate change.

Previous wording

•Deploy capital with discipline by balancing investment, growth, M&A opportunities and returning cash to shareholders.

Current wording

•Deploy capital with discipline– the company aims to prioritize investment, growth, M&A opportunities and returning cash to shareholders.

Previous wording

On March 1, 2023, Corteva completed its previously announced acquisition of all the outstanding equity interests in Stoller Group Inc. (“Stoller”), one of the largest independent companies in the Biologicals industry, and Quorum Vital Investment, S.L. and its affiliates (“Symborg”), an expert in microbiological technologies. The purchase price for Stoller and Symborg was $1,220 million, inclusive of a working capital adjustment, and $370 million, respectively. These acquisitions supplement the crop protection business with additional biological tools that complement evolving farming practices. See Note 4 - Business Combinations, to the Consolidated Financial Statements, for additional information.

Current wording

On March 1, 2023, Corteva completed its acquisitions of all the outstanding equity interests in Stoller Group Inc. (“Stoller”), one of the largest independent companies in the Biologicals industry, and Quorum Vital Investment, S.L. and its affiliates (“Symborg”), an expert in microbiological technologies. The purchase price for Stoller and Symborg was $1,220 million, inclusive of a working capital adjustment, and $370 million, respectively. These acquisitions supplement the Crop Protection business with additional biological tools that complement evolving farming practices. See Note 4 - Business Combinations, to the Consolidated Financial Statements, for additional information.

Previous wording

On November 5, 2023, management of the company approved a plan to further optimize its Crop Protection network of manufacturing and external partners (the "Crop Protection Operations Strategy Restructuring Program"). The plan includes the exit of the company’s production activities at its site in Pittsburg, California, as well as ceasing operations in select manufacturing lines at other locations.

Current wording

On November 5, 2023, management of the company approved a plan to further optimize its Crop Protection network of manufacturing and external partners (the "Crop Protection Operations Strategy Restructuring Program"). The plan includes the exit of the company’s production activities at its site in Pittsburg, California, as well as ceasing operations in select manufacturing lines at other locations. In October 2024, management of the company amended the Crop Protection Operations Strategy Restructuring Program to include updates to its previous estimates and decommissioning and demolition costs associated with the ceasing of operations, primarily at the Pittsburg, California site.

Previous wording

The company expects to record aggregate pre-tax restructuring and asset related charges of $410 million to $460 million, comprised of $70 million to $90 million of severance and related benefit costs, $320 million to $340 million of asset-related and impairment charges and $20 million to $30 million of costs related to contract terminations. Reductions in workforce are subject to local regulatory requirements.

Current wording

The company expects to record aggregate pre-tax restructuring and asset related charges of $650 million to $700 million, comprised of $85 million to $105 million of severance and related benefit costs, $320 million to $340 million of asset-related and impairment charges, and $245 million to $255 million of costs related to exiting the company's production activities and ceasing operations (inclusive of contract terminations and decommissioning and demolition costs). Decommissioning and demolition costs are expensed on an as-incurred basis. Reductions in workforce are subject to local regulatory requirements. Through the year ended December 31, 2024, the company recorded net pre-tax restructuring and asset related charges of $461 million inception-to-date under the Crop Protection Operations Strategy Restructuring Program, consisting of $91 million of severance and related benefit costs, $327 million of asset-related and impairment charges, $10 million of decommissioning and demolition costs and $33 million of costs related to contract terminations.

Previous wording

Future cash payments related to these charges are anticipated to be $90 million to $120 million, which primarily relate to the payment of severance and related benefits and contract terminations. During the year ended December 31, 2023, the company paid $3 million associated with these charges. The restructuring actions associated with these charges are expected to be substantially complete in 2024.

Current wording

Cash payments related to these charges are anticipated to be $330 million to $360 million, which primarily relate to the payment of severance and related benefits, decommissioning and demolition costs and contract terminations. Through December 31, 2024, the company paid $64 million associated with these charges. The restructuring actions associated with these charges are expected to be substantially complete by the end of 2026.

Previous wording

The Crop Protection Operations Strategy Restructuring Program is expected to contribute to the company’s ongoing cost and productivity improvement efforts through achieving an estimated $100 million of savings on a run rate basis by 2025. Future actions by the company or changes in circumstances from current assumptions, including any site disposition gains or losses, may cause actual results and future cash payments to differ. See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements for additional information.

Current wording

The Crop Protection Operations Strategy Restructuring Program is expected to contribute to the company’s ongoing cost and productivity improvement efforts through achieving an estimated $180 million of savings on a run rate basis by 2027. Future actions by the company or changes in circumstances from current assumptions, including any site disposition gains or losses, may cause actual results and future cash payments to differ. See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements, for additional information.

Previous wording

In connection with the company’s shift to a global business unit model during 2022, the company assessed its business priorities and operational structure to maximize the customer experience and deliver on growth and earnings potential. As a result of this assessment, the company committed to restructuring actions during the second quarter of 2022, which included the company’s Russia Exit (collectively the “2022 Restructuring Actions”). Through the year ended December 31, 2023, the company recorded pre-tax restructuring and other charges of $373 million inception-to-date under the 2022 Restructuring Actions, consisting of $131 million of severance and related benefit costs, $116 million of asset related charges, $67 million of costs related to contract terminations (including early lease terminations) and $59 million of other charges. The company does not anticipate any additional material charges from the 2022 Restructuring Actions as actions associated with this charge are substantially complete.

Current wording

In connection with the company’s shift to a global business unit model during 2022, the company assessed its business priorities and operational structure to maximize the customer experience and deliver on growth and earnings potential. As a result of this assessment, the company committed to restructuring actions during the second quarter of 2022, which included the company’s separate announcement to withdraw from Russia ("Russia Exit") (collectively the “2022 Restructuring Actions”). The actions associated with this program are substantially complete.

Previous wording

On September 13, 2022, Corteva, Inc. announced that its Board of Directors authorized a $2 billion share repurchase program to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2022 Share Buyback Plan"). The timing, price and volume of purchases will be based on market conditions, relevant securities laws and other factors. In connection with the 2022 Share Buyback Plan, the company repurchased and retired 10,026,000 shares in the open market for a cost (excluding excise taxes) of $500 million during the year ended December 31, 2023.

Current wording

On September 13, 2022, Corteva, Inc. announced that its Board of Directors authorized a $2 billion share repurchase program to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2022 Share Buyback Plan"). The timing, price and volume of purchases will be based on market conditions, relevant securities laws and other factors. In connection with the 2022 Share Buyback Plan, the company repurchased and retired 17,909,000 and 10,026,000 shares in the open market and through privately-negotiated transactions for a cost (excluding excise taxes) of $1 billion and $500 million during the years ended December 31, 2024 and 2023, respectively.

Previous wording

Net sales were $17,226 million for the year ended December 31, 2023, compared to $17,455 million for the year ended December 31, 2022. The decrease was primarily driven by a 10 percent decrease in volume versus the prior year and a 1 percent unfavorable impact from currency, partially offset by a 7 percent increase in price and a 3 percent favorable portfolio and other impact. Volume declines were driven by strategic product exits, crop protection channel inventory destocking, delayed farmer purchases, lower corn planted area in EMEA, reduced summer corn planted area and lower expected Safrinha corn planted area in Brazil, and the Russia Exit, partially offset by increased corn acres in North America. The unfavorable currency impacts

Current wording

Net sales were $17,226 million for the year ended December 31, 2023, compared to $17,455 million for the year ended December 31, 2022. The decrease was primarily driven by a 10 percent decrease in volume versus the prior year and a 1 percent unfavorable impact from currency, partially offset by a 7 percent increase in price and a 3 percent favorable portfolio and other impact. Volume declines were driven by strategic product exits, Crop Protection channel inventory destocking, delayed farmer purchases, lower corn planted area in EMEA, reduced summer corn planted area and lower expected Safrinha corn planted area in Brazil, and the Russia Exit, partially offset by increased corn acres in North America. The unfavorable currency impacts were led by the Turkish Lira, Canadian Dollar and Chinese Renminbi. Price gains were driven by continued execution on the company's price for value strategy, strong demand for new technology and strong execution in response to cost inflation led by EMEA, partially offset by challenging market dynamics in Latin America and North America. The portfolio and other impact was driven by the biologicals acquisitions and the sale of seeds already under production in Russia when the decision to exit the country was made and that the company was contractually required to purchase.

Previous wording

COGS was $9,920 million (58 percent of net sales) for the year ended December 31, 2023 compared to $10,436 million (60 percent of net sales) for the year ended December 31, 2022. The decrease was primarily driven by lower volumes, ongoing cost and productivity actions and a decrease in royalty expense, partially offset by higher input costs, which are primarily macro-economic driven. The macro-economic driven trends are due to inflationary pressures impacting raw material inputs, which are expected to improve in 2024.

Current wording

COGS was $9,920 million (58 percent of net sales) for the year ended December 31, 2023 compared to $10,436 million (60 percent of net sales) for the year ended December 31, 2022. The decrease was primarily driven by lower volumes, ongoing cost and productivity actions and a decrease in royalty expense, partially offset by higher input costs, which are primarily macro-economic driven. The macro-economic driven trends are due to inflationary pressures impacting raw material inputs, which were expected to improve in 2024.

Previous wording

R&D expense was $1,216 million (7 percent of net sales) for the year ended December 31, 2022 and $1,187 million (8 percent of net sales) for the year ended December 31, 2021. The increase was primarily driven by an increase in variable compensation and spending on field, lab and facilities supplies used in projects, partially offset by favorable currency.

Current wording

R&D expense was $1,402 million (8 percent of net sales) for the year ended December 31, 2024 and $1,337 million (8 percent of net sales) for the year ended December 31, 2023. The increase in R&D expense is in support of the company’s long-term growth plans and was primarily driven by an increase in salaries due to higher headcount, variable compensation and contractor costs, partially offset by favorable currency impacts.

Previous wording

SG&A was $3,176 million (18 percent of net sales) for the year ended December 31, 2023 and $3,173 million (18 percent of net sales) for the year ended December 31, 2022. The flat results were primarily driven by incremental costs from the Stoller and Symborg acquisitions, an unfavorable impact relating to deferred compensation plans due to market improvements and an increase in bad debt expense, partially offset by a decrease in selling expense, variable compensation, functional spend, commissions and consulting fees.

Current wording

SG&A expenses were $3,176 million (18 percent of net sales) for the year ended December 31, 2023 and $3,173 million (18 percent of net sales) for the year ended December 31, 2022. The flat results were primarily driven by incremental costs from the Stoller and Symborg acquisitions, an unfavorable impact relating to deferred compensation plans due to market improvements and an increase in bad debt expense, partially offset by a decrease in selling expense, variable compensation, functional spend, commissions and consulting fees.

Previous wording

Restructuring and asset related charges - net were $363 million for the year ended December 31, 2022, which was primarily comprised of a $272 million net charge related to the 2022 Restructuring Actions and $109 million of restructuring and asset related charges - net from non-cash accelerated prepaid royalty amortization expense related to the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits. The $272 million net charge associated with the 2022 Restructuring Actions was comprised of $111 million of severance and related benefit costs, $104 million of asset related charges and $57 million of costs related to contract terminations (including early lease terminations). These charges were partially offset by a benefit associated with previous restructuring programs.

Current wording

Restructuring and asset related charges - net were $336 million for the year ended December 31, 2022, which was primarily comprised of a $272 million net charge related to the 2022 Restructuring Actions and $109 million of restructuring and asset related charges - net from non-cash accelerated prepaid royalty amortization expense related to the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits. The $272 million net charge associated with the 2022 Restructuring Actions was comprised of $111 million of severance and related benefit costs, $104 million of asset related charges and $57 million of costs related to contract terminations (including early lease terminations). These charges were partially offset by a benefit associated with previous restructuring programs.

Previous wording

Other income (expense) - net was $(448) million and $(60) million for the years ended December 31, 2023 and 2022, respectively. Higher other expense was primarily driven by an increase in net exchange losses and estimated settlement reserves and an increase in non-operating pension and other post-employment costs in the current period versus a benefit in the prior period. Higher other expense was partially offset by an increase in interest income and the absence of charges incurred in 2022 relating to certain legal matters and losses associated with a previously held equity investment.

Current wording

Other income (expense) - net was $(448) million for the year ended December 31, 2023 and $(60) million for the year ended December 31, 2022. Higher other expense was primarily driven by an increase in net exchange losses and estimated settlement reserves and an increase in non-operating pension and other post-employment costs in the current period versus a benefit in the

Previous wording

Interest expense was $79 million and $30 million for the years ended December 31, 2022 and 2021, respectively. The change was primarily driven by higher interest rates on seasonal short-term borrowings and new foreign currency borrowings.

Current wording

Interest expense was $233 million and $233 million for the years ended December 31, 2024 and 2023, respectively. The impact of lower short-term borrowings and lower interest rates was offset by higher interest related to the senior notes issued in 2023 and higher foreign currency borrowings.

Previous wording

For the year ended December 31, 2021, the company’s effective tax rate of 22.3 percent on pre-tax income from continuing operations of $2,346 million was unfavorably impacted by the tax impact of certain net exchange losses recognized on the re-measurement of the net monetary asset positions which were not deductible in their local jurisdictions, the tax impact of income from pension and other post-employment benefits, and a $23 million charge associated with repatriation of cash held outside of the U.S. These items were partially offset by the impacts of favorable geographic mix of earnings and a $(57) million benefit related to U.S. tax credits for increasing research activities.

Current wording

For the year ended December 31, 2024, the company’s effective tax rate of 32.3 percent on pre-tax income from continuing operations of $1,275 million was unfavorably impacted by a $120 million charge on the establishment of a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil, unfavorable geographic mix of earnings, a $22 million charge associated with repatriation of cash held outside of the U.S. primarily from current year earnings, and the unfavorable tax impact of certain net exchange losses recognized on the re-measurement of the net monetary asset positions. These items were partially offset by a $(59) million benefit related to U.S. tax credits for increasing research activities and $(32) million in net tax benefits associated with changes to deferred taxes and accruals for certain prior year tax positions.

Previous wording

EIDP’s interest expense was $124 million and $80 million for the years ended December 31, 2022 and 2021, respectively. The change was primarily driven by the items noted on page 37, under the header “Interest Expense – 2022 versus 2021,” partially offset by lower interest expense incurred on the related party loan between EIDP and Corteva, Inc. See Note 2 - Related Party Transactions, to the EIDP Consolidated Financial Statements for further information.

Current wording

EIDP’s interest expense was $233 million and $253 million for the years ended December 31, 2024 and 2023, respectively. The change was primarily driven by the items noted on page 37, under the header “Interest Expense – 2024 versus 2023,” and lower average borrowings on the related party loan between EIDP and Corteva, Inc., as the loan was repaid in the fourth quarter of 2023. See Note 2 - Related Party Transactions, to the EIDP Consolidated Financial Statements, for further information.

Previous wording

Summarized below are comments on individual segment net sales and segment operating EBITDA for the years ended December 31, 2023, 2022 and 2021. The company defines segment operating EBITDA as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, corporate expenses, non-operating benefits (costs), foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items. Non-operating benefits (costs) consists of non-operating pension and OPEB credits (costs), tax indemnification adjustments, environmental remediation and legal costs associated with legacy EIDP businesses and sites, and the 2021 officer indemnification payment. 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. See Note 23 - Segment Information, to the Consolidated Financial Statements for details related to significant pre-tax benefits (costs) excluded from segment operating EBITDA. All references to prices are based on local price unless otherwise specified.

Current wording

Summarized below are comments on individual segment net sales and segment operating EBITDA for the years ended December 31, 2024, 2023 and 2022. The company defines segment operating EBITDA as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, corporate expenses, non-operating benefits (costs), foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items. Non-operating benefits (costs) consists of non-operating pension and OPEB credits (costs), tax indemnification adjustments and environmental remediation and legal costs associated with legacy 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. See Note 23 - Segment Information, to the Consolidated Financial Statements, for details related to significant pre-tax benefits (costs) excluded from segment operating EBITDA. All references to prices are based on local price unless otherwise specified.

Previous wording

Crop protection net sales were $8,476 million in 2022, up 17 percent from $7,253 million in 2021. The increase was driven by an 11 percent increase in price and a 9 percent increase in volumes. These gains were partially offset by a 3 percent unfavorable currency impact.

Current wording

Crop Protection net sales were $7,363 million in 2024, down 5 percent from $7,754 million in 2023. The sales decrease was driven by a 5 percent decrease in price and a 3 percent unfavorable impact from currency, partially offset by a 3 percent increase in volume.

Previous wording

Crop protection net sales were $7,754 million in 2023, down 9 percent from $8,476 million in 2022. The decrease was driven by a 14 percent decrease in volume and a 1 percent unfavorable impact from currency, partially offset by a 4 percent favorable impact from portfolio and a 2 percent increase in price.

Current wording

Crop Protection net sales were $7,754 million in 2023, up 9 percent from $8,476 million in 2022. The decrease was driven by a 14 percent decrease in volume and a 1 percent unfavorable impact from currency, partially offset by a 4 percent favorable impact from portfolio and a 2 percent increase in price.

Previous wording

The decrease in volume was driven by strategic product exits, channel inventory destocking, and delayed farmer purchases. The increase in price was led by EMEA, and mostly reflected pricing for the value of our differentiated technology, including new products, and currency in EMEA, partially offset by challenging market dynamics in Latin America and North America. Unfavorable currency impacts were led by the Turkish Lira and Chinese Renminbi. The portfolio impact was driven by the Biologicals acquisitions, which added approximately $420 million of net sales.

Current wording

The decrease in volume was driven by strategic product exits, channel inventory destocking, and delayed farmer purchases. The increase in price was led by EMEA, and mostly reflected pricing for the value of our differentiated technology, including new products, and currency in EMEA, partially offset by challenging market dynamics in Latin America and North America. Unfavorable currency impacts were led by the Turkish Lira and Chinese Renminbi. The portfolio impact was driven by the Stoller and Symborg acquisitions, which added approximately $420 million of net sales.

Previous wording

Segment Operating EBITDA was $1,374 million in 2023, down 18 percent from $1,684 million from 2022. Pricing execution, productivity actions, and the favorable impact from the Biologicals acquisitions were more than offset by lower volumes, higher input costs, and the unfavorable impact of currency. Segment operating EBITDA margin declined by 215 basis points versus the prior-year period.

Current wording

Segment Operating EBITDA was $1,374 million in 2023, down 18 percent from $1,684 million in 2022. Pricing execution, productivity actions, and the favorable impact from the Stoller and Symborg acquisitions were more than offset by lower volumes, higher input costs, and the unfavorable impact of currency. Segment operating EBITDA margin declined by 215 basis points versus the prior-year period.

Previous wording

Operating EBITDA is defined as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, non-operating benefits (costs), foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items. Non-operating benefits (costs) consists of non-operating pension and OPEB credits (costs), tax indemnification adjustments, environmental remediation and legal costs associated with legacy businesses and sites, and the 2021 officer indemnification payment. 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 earnings (loss) per share is defined as "earnings (loss) per common share from continuing operations - diluted" excluding the after-tax impact of significant items, the after-tax impact of non-operating benefits (costs), the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont, and the after-tax impact of net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. 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. Net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting represents the non-cash net gain (loss) from changes in fair value of certain undesignated foreign currency derivative contracts. Upon settlement, which is within the same calendar year of execution of the contract, the realized gain (loss) from the changes in fair value of the non-qualified foreign currency derivative contracts will be reported in the relevant non-GAAP financial measures, allowing quarterly results to reflect the economic effects of the foreign currency derivative contracts without the resulting unrealized mark to fair value volatility.

Current wording

Operating EBITDA is defined as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, non-operating benefits (costs), foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items. Non-operating benefits (costs) consists of non-operating pension and OPEB credits (costs), tax indemnification adjustments and environmental remediation and legal costs associated with legacy 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. Operating earnings (loss) per share is defined as "earnings (loss) per common share from continuing operations - diluted" excluding the after-tax impact of significant items, the after-tax impact of non-operating benefits (costs), the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont, and the after-tax impact of net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. 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. Net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting represents the non-cash net gain (loss) from changes in fair value of certain undesignated foreign currency derivative contracts. Upon settlement, which is within the same calendar year of execution of the contract, the realized gain (loss) from the changes in fair value of the non-qualified foreign currency derivative contracts will be reported in the relevant non-GAAP financial measures, allowing quarterly results to reflect the economic effects of the foreign currency derivative contracts without the resulting unrealized mark to fair value volatility.

Previous wording

The company also uses Free Cash Flow as a non-GAAP measure to evaluate and discuss its liquidity position and ability to generate cash. Free Cash Flow is defined as cash provided by (used for) operating activities – continuing operations, less capital expenditures. Management believes that Free Cash Flow provides investors with meaningful information regarding the company’s ongoing ability to generate cash through core operations, and the company’s ability to service its indebtedness, pay dividends (when declared), make share repurchases, and meet its ongoing cash needs for its operations. The company made the decision, which was retrospectively applied, to adjust the presentation of the Consolidated Statement of Cash Flows to separately show the cash provided by (used for) operating activities – discontinued operations, which was previously presented within cash provided by (used for) operating activities. See Note 1 – Background and Basis of Presentation, to the Consolidated Financial Statements, for additional information. As a result, the definition for Free Cash Flow was revised to utilize cash provided by (used for) operating activities – continuing operations. The change in definition did not have a material impact to prior years’ Free Cash Flow. Management made this decision to better present the liquidity generated from the company’s ongoing business operations. Under the revised definition, Free Cash Flow was $307 million and $2,196 million for the years ended December 31, 2022 and 2021, respectively.

Current wording

The company also uses Free Cash Flow as a non-GAAP measure to evaluate and discuss its liquidity position and ability to generate cash. Free Cash Flow is defined as cash provided by (used for) operating activities – continuing operations, less capital expenditures. Management believes that Free Cash Flow provides investors with meaningful information regarding the company’s ongoing ability to generate cash through core operations, and the company’s ability to service its indebtedness, pay dividends (when declared), make share repurchases, and meet its ongoing cash needs for its operations. During the fourth quarter of 2023, the company made the decision, which was retrospectively applied, to adjust the presentation of the Consolidated Statement of Cash Flows to separately show the cash provided by (used for) operating activities – discontinued operations, which was previously presented within cash provided by (used for) operating activities. See Note 1 – Background and Basis of Presentation, to the Consolidated Financial Statements, for additional information. As a result, the definition for Free Cash Flow was revised to utilize cash provided by (used for) operating activities – continuing operations. The change in definition did not have a material impact to prior years’ Free Cash Flow. Management made this decision to better present the liquidity generated from the company’s ongoing business operations. Under the revised definition, Free Cash Flow was $307 million for the year ended December 31, 2022.

Previous wording

The tax only significant item benefit for the year ended December 31, 2023 relates to the impact of changes to deferred taxes and a tax currency change for legal entities within Switzerland of $(62) million and $(24) million, respectively, as well as adjustments due to intellectual property realignment of $46 million and a change in estimate related to a worthless stock deduction in the U.S. The tax only significant item benefit for the year ended December 31, 2022 relates to the impact of a change in a U.S. legal entity's tax characterization, resulting in the establishment of deferred taxes, the release of a valuation

Current wording

The tax only significant item charge for the year ended December 31, 2024 relates to the establishment of a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil (Seed business) in the amount of $120 million, as well as a change in estimate related to intellectual property realignment. The tax only significant item benefit for the year ended December 31, 2023 relates to the impact of changes to deferred taxes and a tax currency change for legal entities within Switzerland of $(62) million and $(24) million, respectively, as well as adjustments due to intellectual property realignment of $46 million and a change in estimate related to a worthless stock deduction in the U.S. The tax only significant item benefit for the year ended December 31, 2022 relates to the impact of a change in a U.S. legal entity's tax characterization, resulting in the establishment of deferred taxes, the release of a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil (Crop Protection Business) and a worthless stock deduction in the U.S. of $(55) million, $(36) million, and $(42) million, respectively.

Previous wording

The company believes its ability to generate cash from operations and access to capital markets and commercial paper markets will be adequate to meet anticipated cash requirements to fund its operations, including seasonal working capital, capital spending, dividend payments, share repurchases and pension obligations. Corteva's strong financial position, liquidity and credit ratings will provide access as needed to capital markets and commercial paper markets to fund seasonal working capital needs. The company's liquidity needs can be met through a variety of sources, including cash provided by operating activities, commercial paper, syndicated credit lines, bilateral credit lines, long-term debt markets, bank financing and committed receivable repurchase facilities. Corteva considers the borrowing costs and lending terms when selecting the source to fund its operations and working capital needs.

Current wording

The company believes its ability to generate cash from operations and access to capital markets and commercial paper markets will be adequate to meet anticipated cash requirements to fund its operations, including seasonal working capital, capital spending, dividend payments, share repurchases, pension obligations and litigation costs, net of recoveries. Corteva's strong financial position, liquidity and credit ratings will provide access as needed to capital markets and commercial paper markets to fund seasonal working capital needs. The company's liquidity needs can be met through a variety of sources, including cash provided by operating activities, commercial paper, syndicated credit lines, bilateral credit lines, long-term debt markets, bank financing and committed receivable repurchase facilities. Corteva considers the borrowing costs and lending terms when selecting the source to fund its operations and working capital needs.

Previous wording

The company had access to approximately $6.0 billion at December 31, 2023 and 2022 in committed and uncommitted unused credit lines, which includes the uncommitted revolving credit lines relating to the Foreign Currency Loans. These facilities provide support to meet the company’s short-term liquidity needs and for general corporate purposes, which may include funding of discretionary and non-discretionary contributions to certain benefit plans, severance payments, repayment and refinancing of debt, working capital, capital expenditures, repurchases and redemptions of securities, funding of acquisitions and funding Corteva's costs and expenses. These facilities are provided to the company by highly rated and well capitalized global financial institutions.

Current wording

The company had access to approximately $6.3 billion and $6.0 billion at December 31, 2024 and 2023 in committed and uncommitted unused credit lines, which includes the uncommitted revolving credit lines relating to the Foreign Currency Loans. These facilities provide support to meet the company’s short-term liquidity needs and for general corporate purposes, which may include funding of discretionary and non-discretionary contributions to certain benefit plans, severance payments, repayment and refinancing of debt, working capital, capital expenditures, repurchases and redemptions of securities, funding of acquisitions and funding Corteva's costs and expenses, including the settlement of litigation. These facilities are provided to the company by highly rated and well capitalized global financial institutions.