Corteva(US:CTVA)2025-08-07 21:03Part I Financial Information Item 1. Consolidated Financial Statements (Unaudited) Corteva reported increased net sales and net income for Q2 and H1 2025, with total assets at $41.76 billion and improved cash flow from operations Consolidated Statements of Operations Highlights (In millions, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $6,456 | $6,112 | $10,873 | $10,604 | | Income from continuing operations | $1,382 | $1,056 | $2,049 | $1,432 | | Net income attributable to Corteva | $1,314 | $1,053 | $1,966 | $1,472 | | Diluted EPS from continuing operations | $2.02 | $1.51 | $2.98 | $2.03 | | Diluted EPS | $1.92 | $1.51 | $2.87 | $2.10 | Consolidated Balance Sheet Highlights (In millions) | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total current assets | $16,004 | $15,097 | $15,359 | | Total Assets | $41,759 | $40,825 | $41,464 | | Total current liabilities | $9,516 | $10,386 | $8,953 | | Total equity | $26,151 | $24,030 | $25,421 | Consolidated Statement of Cash Flows Highlights (In millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash from operating activities | $(1,162) | $(2,158) | | Cash from investing activities | $(198) | $(305) | | Cash from financing activities | $187 | $1,518 | | Increase (decrease) in cash | $(1,105) | $(1,017) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management reported increased Q2 2025 net sales and Operating EBITDA, driven by volume, pricing, and cost savings Recent Developments The company is executing a restructuring program for cost savings and continued share repurchases - The Crop Protection Operations Strategy Restructuring Program is expected to result in aggregate pre-tax charges of $650 million to $700 million, with anticipated run-rate savings of $180 million by 2027213215 - Through Q2 2025, the company has recorded $566 million in pre-tax charges and made $116 million in cash payments related to the restructuring program, which is expected to be substantially complete by the end of 2026213214 - In the first six months of 2025, Corteva repurchased and retired a total of 8.1 million shares for approximately $520 million under its 2024 and 2022 Share Buyback Plans216217 Results of Operations Net sales increased for Q2 and H1 2025, driven by volume and price gains, with improved COGS percentage Net Sales Change Analysis (Q2 2025 vs. Q2 2024) | Region | Net Sales Change ($M) | % Change | Price & Product Mix | Volume | Currency | | :--- | :--- | :--- | :--- | :--- | :--- | | North America | $229 | 5% | 2% | 4% | (1)% | | EMEA | $74 | 11% | 4% | 9% | (2)% | | Latin America | $22 | 3% | (7)% | 18% | (8)% | | Asia Pacific | $19 | 5% | 4% | 2% | (1)% | | Total | $344 | 6% | 1% | 6% | (1)% | Net Sales Change Analysis (H1 2025 vs. H1 2024) | Region | Net Sales Change ($M) | % Change | Price & Product Mix | Volume | Currency | | :--- | :--- | :--- | :--- | :--- | :--- | | North America | $352 | 5% | 2% | 4% | (1)% | | EMEA | $(37) | (2)% | 2% | 1% | (5)% | | Latin America | $(51) | (4)% | (6)% | 12% | (10)% | | Asia Pacific | $5 | 1% | 3% | 0% | (2)% | | Total | $269 | 3% | 1% | 4% | (2)% | - Cost of Goods Sold (COGS) as a percentage of net sales decreased from 52% to 49% for the six months ended June 30, 2025, driven by cost actions, raw material deflation, and lower net royalty expense229 - Restructuring charges decreased to $79 million in Q2 2025 from $92 million in Q2 2024, primarily related to the Crop Protection Operations Strategy Restructuring Program235 Segment Reviews Seed and Crop Protection segments increased Q2 2025 net sales and operating EBITDA, driven by volume and pricing Seed Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $4,537M | $4,331M | +5% | | Operating EBITDA | $1,863M | $1,698M | +10% | - Seed segment growth in Q2 was driven by a 3% increase in both volume and price, led by increased corn area and share gains in North America262263 Crop Protection Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,919M | $1,781M | +8% | | Operating EBITDA | $334M | $255M | +31% | - Crop Protection Q2 sales growth was driven by an 11% volume increase, primarily from demand for new products in Latin America, which offset a 2% price decline269270 Non-GAAP Financial Measures Non-GAAP Operating EBITDA and EPS increased for Q2 and H1 2025, reflecting improved business performance Reconciliation to Operating EBITDA (In millions) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Income from continuing operations before income taxes (GAAP) | $1,804 | $1,338 | $2,588 | $1,820 | | Adjustments | $360 | $579 | $765 | $1,131 | | Operating EBITDA (Non-GAAP) | $2,164 | $1,917 | $3,353 | $2,951 | Reconciliation to Operating EPS | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Diluted EPS from continuing operations (GAAP) | $2.02 | $1.51 | $2.98 | $2.03 | | Adjustments | $0.18 | $0.32 | $0.35 | $0.69 | | Operating EPS (Non-GAAP) | $2.20 | $1.83 | $3.33 | $2.72 | Liquidity & Capital Resources Corteva maintains strong liquidity with $2.14 billion cash and credit access, returning capital to shareholders Liquidity Position (In millions) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents and marketable securities | $2,141 | $3,169 | | Total debt | $3,629 | $2,703 | - The company has access to approximately $6.2 billion in committed and uncommitted unused credit lines as of June 30, 2025288 - In May 2025, the company issued $500 million of 5.125% Senior Notes due in 2032 to repay maturing debt292 - The Board of Directors increased the quarterly dividend by 5.9% to $0.18 per share, payable in September 2025303 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company manages market risks like foreign currency and commodity price fluctuations using derivatives - The company manages foreign currency and commodity price risks through derivative instruments313 Item 4. Controls and Procedures Corteva's disclosure controls were effective; EIDP remediated its material weakness in internal control - Corteva, Inc.'s management concluded that its disclosure controls and procedures were effective as of June 30, 2025316 - EIDP, Inc. has remediated the material weakness in internal control over financial reporting related to the classification of intercompany cash flows, which was identified in the 2024 Annual Report320321 Part II Other Information Item 1. Legal Proceedings Corteva is involved in various legal proceedings, including patent disputes and legacy PFAS liabilities - Corteva is engaged in ongoing patent and contract litigation with competitors Bayer and Inari concerning herbicide resistance technology (AAD-1) and soybean traits (E3®)326327330 - The company faces significant litigation related to legacy EIDP liabilities, including numerous lawsuits concerning PFAS contamination and natural resource damages109334 - A proposed Judicial Consent Order (NJ Statewide Settlement) with New Jersey aims to resolve all outstanding legacy claims in the state, including those related to PFAS and four former DuPont sites127335 - The EPA has designated PFOA and PFAS as hazardous substances under CERCLA and has asserted claims against DuPont, EIDP, and Corteva for cleanup and restoration costs at several sites340 Item 1A. Risk Factors New risk factor: potential delays in regulatory approvals due to U.S. agency funding and staff reductions - A new risk factor highlights that funding and staff reductions at U.S. regulatory agencies (EPA, USDA, FDA) could delay product approvals and commercialization timelines342343 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Corteva repurchased 3.78 million shares for $250 million in Q2 2025; $2.98 billion remains for buybacks Issuer Purchases of Equity Securities (Q2 2025) | Month | Total Shares Purchased | Average Price Paid per Share | Approximate Value Remaining Under Program ($M) | | :--- | :--- | :--- | :--- | | April 2025 | 936,031 | $58.97 | $3,175 | | May 2025 | 2,291,981 | $67.85 | $3,019 | | June 2025 | 553,909 | $70.95 | $2,980 | | Total | 3,781,921 | $66.11 | $2,980 | Consolidated Financial Statements of EIDP, Inc. (Unaudited) EIDP, Inc. Financial Statements EIDP's financials align with Corteva's, differing in equity and intercompany transactions, and cash flow restatement - EIDP's financial statements are substantially similar to Corteva's, with primary differences in equity structure (EIDP has preferred stock) and the treatment of intercompany transactions with its parent, Corteva, Inc366 - EIDP restated its interim Consolidated Statement of Cash Flows for the six months ended June 30, 2024, to reclassify $723 million from operating activities to investing activities related to an intercompany banking arrangement368369 - Beginning in Q4 2024, amounts due from Parent Corteva, Inc. under the Master In-House Banking Agreement are classified within EIDP's equity, reflecting a change in repayment intent. EIDP also issued $888 million in dividends to its Parent in the first half of 2025370