Corteva(US:CTVA)2024-11-07 22:19Part I Financial Information Item 1. Consolidated Financial Statements (Unaudited) Presents Corteva's unaudited interim consolidated financial statements for the three and nine months ended September 30, 2024 Consolidated Statements of Operations Details Corteva's consolidated statements of operations, including net sales, income, and earnings per share trends for the reported periods Consolidated Statements of Operations Highlights (in millions, except per share amounts) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $2,326 | $2,590 | $12,930 | $13,519 | | Income (loss) from continuing operations | $(519) | $(315) | $913 | $1,172 | | Net income (loss) | $(521) | $(318) | $958 | $998 | | Net income (loss) attributable to Corteva | $(524) | $(321) | $948 | $988 | | Diluted earnings (loss) per share | $(0.76) | $(0.45) | $1.35 | $1.39 | Consolidated Balance Sheets Summarizes Corteva's financial position, detailing assets, liabilities, and equity as of September 30, 2024, and December 31, 2023 Consolidated Balance Sheet Summary (in millions) | Metric | Sep 30, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :--- | :--- | :--- | :--- | | Total current assets | $15,649 | $16,260 | $16,333 | | Total Assets | $41,908 | $42,996 | $43,110 | | Total current liabilities | $10,424 | $10,409 | $10,348 | | Total Liabilities | $16,929 | $17,717 | $17,643 | | Total Corteva stockholders' equity | $24,737 | $25,037 | $25,226 | Consolidated Statements of Cash Flows Outlines Corteva's cash flow activities, including operating, investing, and financing, for the nine months ended September 30, 2024 Consolidated Cash Flow Summary (in millions) | Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Cash used for operating activities | $(2,028) | $(2,604) | | Cash used for investing activities | $(466) | $(1,773) | | Cash provided by financing activities | $2,137 | $3,603 | | Increase (decrease) in cash | $(402) | $(842) | Notes to the Interim Consolidated Financial Statements (Unaudited) Provides detailed information on accounting policies, revenue recognition, restructuring, contingent liabilities, debt, and segment performance - The company finalized the purchase price allocation for the 2023 acquisitions of Stoller and Symborg in the first quarter of 2024 with no material adjustments32 - The company repurchased and retired 13.8 million shares for $750 million during the nine months ended September 30, 2024, under its $2 billion share buyback plan137 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, segment results, restructuring programs, liquidity, and the full-year 2024 outlook Recent Developments Highlights ongoing restructuring programs and share repurchase activities, detailing expected charges and savings - The Crop Protection Operations Strategy Restructuring Program is expected to record aggregate pre-tax charges of $650 million to $700 million and achieve an estimated $180 million of savings on a run rate basis by 2027189191 - The 2022 Restructuring Actions are expected to achieve an estimated $210 million to $220 million of savings on a run rate basis by 2025194 Results of Operations Analyzes net sales and operating EBITDA changes for Q3 and nine months ended September 30, 2024, driven by price, volume, and currency Net Sales Change Analysis - Q3 2024 vs Q3 2023 | Region | Net Sales Change (%) | Price & Product Mix (%) | Volume (%) | Currency (%) | | :--- | :--- | :--- | :--- | :--- | | Total | (10)% | (8)% | 3% | (5)% | Net Sales Change Analysis - Nine Months 2024 vs 2023 | Region | Net Sales Change (%) | Price & Product Mix (%) | Volume (%) | Currency (%) | | :--- | :--- | :--- | :--- | :--- | | Total | (4)% | —% | (2)% | (2)% | Corporate Outlook Presents Corteva's full-year 2024 projections for net sales, operating EBITDA, operating EPS, and free cash flow Full-Year 2024 Outlook | Metric | Expected Range | | :--- | :--- | | Net Sales | $17.0B - $17.2B | | Operating EBITDA | $3.35B - $3.45B | | Operating EPS | $2.50 - $2.60 | | Free Cash Flow | $1.5B - $2.0B | Segment Reviews Reviews the performance of Seed and Crop Protection segments, detailing sales and operating EBITDA changes for Q3 2024 Seed Segment Performance (Q3 2024 vs Q3 2023) | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $691M | $878M | -21% | | Segment Operating EBITDA | $(320)M | $(138)M | -132% | Crop Protection Segment Performance (Q3 2024 vs Q3 2023) | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,635M | $1,712M | -4% | | Segment Operating EBITDA | $246M | $184M | +34% | Liquidity & Capital Resources Details Corteva's cash position, debt levels, credit access, and cash flow from operations for the first nine months of 2024 - The company had access to approximately $6.2 billion in committed and uncommitted unused credit lines at September 30, 2024269 - Cash used for operating activities for the first nine months of 2024 was $(1,871) million, an improvement from $(2,574) million in the same period of 2023, driven by favorable working capital changes278 - The company returned approximately $1.1 billion to shareholders during the first nine months of 2024 through share repurchases and dividends197 Item 3. Quantitative and Qualitative Disclosures About Market Risk Refers to prior disclosures for detailed information on market risk exposures and financial instrument management Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2024, with no material changes - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of September 30, 2024295 - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2024295 Part II Other Information Item 1. Legal Proceedings Details ongoing legal proceedings, including FTC investigations, product liability lawsuits, patent disputes, and legacy PFAS litigation - The Federal Trade Commission (FTC) and several state attorneys general have filed a lawsuit against Corteva alleging anticompetitive business practices300 - Corteva faces pending personal injury and remediation lawsuits related to chlorpyrifos, the active ingredient in its former insecticide product, Lorsban®301 - The company is engaged in multiple patent and contract disputes with competitors Bayer and Inari concerning herbicide resistance technologies and soybean traits302304308 - Significant litigation related to legacy EIDP businesses, particularly concerning PFOA and PFAS contamination, is subject to a cost-sharing memorandum of understanding (MOU) with Chemours and DuPont310312 Item 1A. Risk Factors States no material changes to the risk factors previously disclosed in the most recent Annual Report on Form 10-K Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details share repurchases during Q3 2024, including shares bought back and remaining authorization under the buyback program Issuer Purchases of Equity Securities (Q3 2024) | Month | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining under Program (in millions) | | :--- | :--- | :--- | :--- | | July 2024 | 1,929,167 | $53.58 | $897 | | August 2024 | 2,792,563 | $52.51 | $750 | | Total | 4,721,730 | $52.95 | $750 | Consolidated Financial Statements of EIDP, Inc. (Unaudited) Presents separate unaudited financial statements for EIDP, Inc., a Corteva subsidiary, with key differences from consolidated results Notes to the EIDP Interim Consolidated Financial Statements Clarifies differences between EIDP and Corteva financials, including preferred stock, related-party loans, and cash management agreements - Primary differences between Corteva and EIDP financials are EIDP's outstanding preferred stock, a related-party loan from Corteva (repaid in Q4 2023), and a different capital structure341 - EIDP and Corteva are party to a Master In-House Banking Agreement for cash and liquidity management. As of September 30, 2024, EIDP had a receivable from Corteva of $1,505 million under this agreement346