EX-99.2 3 cortevaq22021enr.htm EX-99.2 Document
A-1
Corteva, Inc.
Consolidated Statements of Operations
(Dollars in millions, except per share amounts)


Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Net sales$5,627 $5,191 $9,805 $9,147 
Cost of goods sold3,010 2,829 5,430 5,098 
Research and development expense293 273 574 553 
Selling, general and administrative expenses998 965 1,731 1,722 
Amortization of intangibles180 176 363 339 
Restructuring and asset related charges - net135 179 235 249 
Other income — net298 89 635 90 
Interest expense7 14 14 24 
Income from continuing operations before income taxes1,302 844 2,093 1,252 
Provision for income taxes on continuing operations284 78 462 205 
Income from continuing operations after income taxes1,018 766 1,631 1,047 
(Loss) income from discontinued operations after income taxes(45)— (55)1 
Net income973 766 1,576 1,048 
Net income attributable to noncontrolling interests3 6 6 16 
Net income attributable to Corteva$970 $760 $1,570 $1,032 
Basic earnings per share of common stock:
Basic earnings per share of common stock from continuing operations$1.37 $1.01 $2.19 $1.37 
Basic loss per share of common stock from discontinued operations(0.06)— (0.07)— 
Basic earnings per share of common stock$1.31 $1.01 $2.12 $1.37 
Diluted earnings per share of common stock:
Diluted earnings per share of common stock from continuing operations$1.37 $1.01 $2.18 $1.37 
Diluted loss per share of common stock from discontinued operations(0.06)— (0.07)— 
Diluted earnings per share of common stock$1.31 $1.01 $2.11 $1.37 
Average number of shares outstanding used in earnings per share (EPS) calculation (in millions)
  Basic737.3749.2740.3749.6
  Diluted743.3751.6746.4752.0





A-2
Corteva, Inc.
Consolidated Balance Sheets
(Dollars in millions, except share amounts)
June 30, 2021December 31, 2020June 30, 2020
Assets
Current assets
Cash and cash equivalents$2,861 $3,526 $2,809 
Marketable securities39 269 60 
Accounts and notes receivable, net6,792 4,926 6,772 
Inventories3,541 4,882 3,589 
Other current assets1,052 1,165 1,192 
Total current assets14,285 14,768 14,422 
Investment in nonconsolidated affiliates68 66 62 
Property, plant and equipment8,343 8,253 7,858 
Less: Accumulated depreciation4,002 3,857 3,565 
Net property, plant and equipment4,341 4,396 4,293 
Goodwill10,207 10,269 10,069 
Other intangible assets10,413 10,747 11,070 
Deferred income taxes442 464 290 
Other assets1,740 1,939 1,974 
Total Assets$41,496 $42,649 $42,180 
Liabilities and Equity
Current liabilities
Short-term borrowings and finance lease obligations$677 $3 $1,529 
Accounts payable3,070 3,615 2,891 
Income taxes payable234 123 369 
Deferred revenue748 2,662 431 
Accrued and other current liabilities2,523 2,145 2,309 
Total current liabilities7,252 8,548 7,529 
Long-Term Debt1,101 1,102 1,102 
Other Noncurrent Liabilities
Deferred income tax liabilities935 893 752 
Pension and other post employment benefits - noncurrent4,767 5,176 6,039 
Other noncurrent obligations1,816 1,867 1,957 
Total noncurrent liabilities8,619 9,038 9,850 
Commitments and contingent liabilities
Stockholders' equity
Common stock, $0.01 par value; 1,666,667,000 shares authorized;
issued at June 30, 2021 - 734,421,000; December 31, 2020 - 743,458,000; and June 30, 2020 - 748,485,000		7 7 7 
Additional paid-in capital27,682 27,707 27,891 
Retained earnings 941 — 508 
Accumulated other comprehensive loss(3,245)(2,890)(3,845)
Total Corteva stockholders' equity25,385 24,824 24,561 
Noncontrolling interests240 239 240 
Total equity25,625 25,063 24,801 
Total Liabilities and Equity$41,496 $42,649 $42,180 

A-3
Corteva, Inc.
Consolidated Statement of Cash Flows
(Dollars in millions, except per share amounts)

Six Months Ended
June 30,
20212020
Operating activities
Net income$1,576 $1,048 
Adjustments to reconcile net income to cash used for operating activities:
Depreciation and amortization617 583 
Provision for (benefit from) deferred income tax124 (136)
Net periodic pension and OPEB benefit, net
(641)(168)
Pension and OPEB contributions(149)(167)
Net (gain) loss on sales of property, businesses, consolidated companies, and investments(1)30 
Restructuring and asset related charges - net235 249 
Other net loss143 185 
Changes in assets and liabilities - net
Accounts and notes receivable(1,957)(1,712)
Inventories1,334 1,271 
Accounts Payable(525)(717)
Deferred revenue(1,931)(2,147)
Other assets and liabilities532 812 
Cash used for operating activities(643)(869)
Investing activities
Capital expenditures(269)(202)
Proceeds from sales of property, businesses, and consolidated companies - net of cash divested26 18 
Investments in and loans to nonconsolidated affiliates(1)— 
Purchases of investments(56)(361)
Proceeds from sales and maturities of investments285 298 
Other investing activities - net(2)(5)
Cash used for investing activities(17)(252)
Financing activities
Net change in borrowings (less than 90 days) 254 966 
Proceeds from debt419 2,434 
Payments on debt— (879)
Repurchase of common stock(550)(50)
Proceeds from exercise of stock options66 17 
Dividends paid to stockholders(192)(194)
Payments for acquisition of subsidiary's interest from the non-controlling interest— (60)
Other financing activities(24)(20)
Cash (used for) provided by financing activities(27)2,214 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(14)(95)
(Decrease)/increase in cash, cash equivalents and restricted cash(701)998 
Cash, cash equivalents and restricted cash at beginning of period3,873 2,173 
Cash, cash equivalents and restricted cash at end of period$3,172 $3,171 

A-4
Corteva, Inc.
Consolidated Segment Information
(Dollars in millions, except per share amounts)

Three Months Ended June 30,Six Months Ended June 30,
SEGMENT NET SALES - SEED2021202020212020
    Corn$2,180 $2,057 $4,068 $3,921 
    Soybean1,160 1,085 1,337 1,266 
    Other oilseeds271 219 567 467 
    Other169 177 300 339 
Seed$3,780 $3,538 $6,272 $5,993 
Three Months Ended June 30,Six Months Ended June 30,
SEGMENT NET SALES - CROP PROTECTION2021202020212020
    Herbicides$969 $909 $1,955 $1,732 
    Insecticides460 445 845 823 
    Fungicides311 224 572 453 
    Other107 75 161 146 
Crop Protection$1,847 $1,653 $3,533 $3,154 
Three Months Ended June 30,Six Months Ended June 30,
GEOGRAPHIC NET SALES - SEED2021202020212020
North America 1
$3,104 $2,903 $4,314 $4,193 
EMEA 2
298 264 1,245 1,145 
Latin America
234 206 508 422 
Asia Pacific
144 165 205 233 
Rest of World 3
676 635 1,958 1,800 
Net Sales$3,780 $3,538 $6,272 $5,993 
Three Months Ended June 30,Six Months Ended June 30,
GEOGRAPHIC NET SALES - CROP PROTECTION2021202020212020
North America 1
$738 $663 $1,271 $1,138 
EMEA 2
412 379 1,067 965 
Latin America
354 309 598 527 
Asia Pacific
343 302 597 524 
Rest of World 3
1,109 990 2,262 2,016 
Net Sales$1,847 $1,653 $3,533 $3,154 
1. Reflects U.S. & Canada
2. Reflects Europe, Middle East, and Africa
3. Reflects EMEA, Latin America, and Asia Pacific



A-5
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
20212021
Net Sales (GAAP)$5,627 $9,805 
Less: Impacts from Currency and Portfolio130 105 
Organic Sales (Non-GAAP)$5,497 $9,700 
Three Months Ended June 30,Six Months Ended June 30,
OPERATING EBITDA2021202020212020
Seed$1,123 $956 $1,740 $1,537 
Crop Protection370 309 691 547 
Corporate Expenses(32)(29)(66)(54)
Operating EBITDA (Non-GAAP)$1,461 $1,236 $2,365 $2,030 
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS AFTER INCOME TAXES TO OPERATING EBITDAThree Months Ended June 30,Six Months Ended June 30,
2021202020212020
Income from continuing operations after income taxes (GAAP)$1,018 $766 $1,631 $1,047 
Provision for income taxes on continuing operations284 78 462 205 
Income from continuing operations before income taxes (GAAP)1,302 844 2,093 1,252 
Depreciation and amortization313 300 617 583 
Interest income(18)(9)(39)(27)
Interest expense7 14 14 24 
Exchange losses (gains) - net1
14 (1)49 60 
Non-operating benefits - net2
(315)(91)(626)(164)
Mark-to-market losses on certain foreign currency contracts not designated as hedges3
23 22 
Significant items charge4
135 179 235 302 
Operating EBITDA (Non-GAAP)$1,461 $1,236 $2,365 $2,030 

1.Refer to page A-14 for pre-tax and after tax impacts of exchange losses - net.
2.Non-operating benefits—net consists of non-operating pension and other post-employment benefit (OPEB) (benefits) costs, tax indemnification adjustments, environmental remediation and legal costs associated with legacy EID 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.
3.Effective January 1, 2021, on a prospective basis, the company excludes net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. For the three and six months ended June 30, 2020, the unrealized mark-to-market gain was $27 million.
4.Refer to page A-10 for pre-tax and after tax impacts of significant items.

A-6
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)

PRICE - VOLUME - CURRENCY ANALYSIS
REGION
Q2 2021 vs. Q2 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
North America$276 8 %$227 6 %— %6 %2 %— %
EMEA
67 10 %23 4 %5 %(1)%6 %— %
Latin America
73 14 %55 11 %6 %5 %3 %— %
Asia Pacific
20 4 %— — %2 %(2)%5 %(1)%
Rest of World160 10 %78 5 %4 %1 %5 %— %
Total$436 8 %$305 6 %1 %5 %2 %— %
SEED
Q2 2021 vs. Q2 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
North America$201 7 %$163 6 %— %6 %1 %— %
EMEA
34 13 %24 9 %10 %(1)%4 %— %
Latin America
28 14 %20 10 %10 %— %4 %— %
Asia Pacific
(21)(13)%(26)(16)%— %(16)%3 %— %
Rest of World41 6 %18 3 %7 %(4)%3 %— %
Total$242 7 %$181 5 %1 %4 %2 %— %
CROP PROTECTION
Q2 2021 vs. Q2 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
North America$75 11 %$64 10 %2 %8 %1 %— %
EMEA
33 9 %(1)— %2 %(2)%9 %— %
Latin America
45 15 %35 11 %3 %8 %4 %— %
Asia Pacific
41 14 %26 9 %3 %6 %7 %(2)%
Rest of World119 12 %60 6 %2 %4 %7 %(1)%
Total$194 12 %$124 8 %3 %5 %4 %— %

A-7
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SEED PRODUCT LINE
Q2 2021 vs. Q2 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
Corn$123 6 %$96 5 %3 %2 %1 %— %
Soybeans75 7 %66 6 %(2)%8 %1 %— %
Other oilseeds52 24 %32 15 %4 %11 %9 %— %
Other(8)(5)%(13)(7)%(5)%(2)%2 %— %
Total $242 7 %$181 5 %1 %4 %2 %— %
CROP PROTECTION PRODUCT LINE
Q2 2021 vs. Q2 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
Herbicides$60 7 %$24 3 %2 %1 %4 %— %
Insecticides15 3 %(2)(1)%2 %(3)%4 %— %
Fungicides87 39 %72 32 %4 %28 %9 %(2)%
Other32 43 %30 40 %6 %34 %3 %— %
Total$194 12 %$124 8 %3 %5 %4 %— %




A-8
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
PRICE - VOLUME - CURRENCY ANALYSIS
REGION
First Half 2021 vs. First Half 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
North America$254 5 %$197 4 %— %4 %1 %— %
EMEA
202 10 %109 5 %4 %1 %5 %— %
Latin America
157 17 %221 23 %9 %14 %(6)%— %
Asia Pacific
45 6 %26 3 %2 %1 %5 %(2)%
Rest of World404 11 %356 9 %5 %4 %2 %— %
Total$658 7 %$553 6 %2 %4 %1 %— %
SEED
First Half 2021 vs. First Half 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
North America$121 3 %$79 2 %(1)%3 %1 %— %
EMEA
100 9 %71 6 %5 %1 %3 %— %
Latin America
86 20 %124 29 %9 %20 %(9)%— %
Asia Pacific
(28)(12)%(31)(13)%2 %(15)%1 %— %
Rest of World158 9 %164 9 %5 %4 %— %— %
Total$279 5 %$243 4 %1 %3 %1 %— %
CROP PROTECTION
First Half 2021 vs. First Half 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
North America$133 12 %$118 10 %3 %7 %2 %— %
EMEA
102 11 %38 4 %2 %2 %7 %— %
Latin America
71 13 %97 18 %9 %9 %(5)%— %
Asia Pacific
73 14 %57 11 %3 %8 %6 %(3)%
Rest of World246 12 %192 10 %4 %6 %3 %(1)%
Total$379 12 %$310 10 %4 %6 %3 %(1)%


A-9
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SEED PRODUCT LINE
First Half 2021 vs. First Half 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
Corn$147 4 %$139 4 %3 %1 %— %— %
Soybeans71 6 %59 5 %(2)%7 %1 %— %
Other oilseeds100 21 %86 18 %4 %14 %3 %— %
Other(39)(12)%(41)(12)%(5)%(7)%— %— %
Total $279 5 %$243 4 %1 %3 %1 %— %
CROP PROTECTION PRODUCT LINE
First Half 2021 vs. First Half 2020Percent Change Due To:
Net Sales Change (GAAP)
Organic Change 1 (Non-GAAP)
Local Price &Portfolio /
$%$%Product MixVolumeCurrencyOther
Herbicides$223 13 %$166 10 %4 %6 %3 %— %
Insecticides22 3 %13 2 %5 %(3)%1 %— %
Fungicides119 26 %115 25 %4 %21 %4 %(3)%
Other15 10 %16 11 %3 %8 %(1)%— %
Total$379 12 %$310 10 %4 %6 %3 %(1)%

1.Organic sales is defined as price and volume and excludes currency and portfolio impacts.

A-10
Corteva, Inc.
Significant Items
(Dollars in millions, except per share amounts)
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX)
Three Months Ended June 30, Six Months Ended June 30,
2021202020212020
Seed$(115)$(135)$(136)$(145)
Crop Protection(11)(40)(43)(111)
Corporate(9)(4)(56)(46)
Total significant items before income taxes$(135)$(179)$(235)$(302)
SIGNIFICANT ITEMS - PRE-TAX, AFTER TAX, AND EPS IMPACTS
Pre-tax
After tax5
($ Per Share)
202120202021202020212020
1st Quarter
Restructuring and asset related charges, net 1
$(100)$(70)$(77)$(57)$(0.10)$(0.08)
Loss on divestiture 2
— (53)— (43)— (0.06)
Income tax items 3
— — — (19)— (0.02)
1st Quarter — Total
$(100)$(123)$(77)$(119)$(0.10)$(0.16)
2nd Quarter
Restructuring and asset related charges, net 1
(135)(179)(107)(143)(0.14)(0.19)
Income tax items 3
— — — 29 — 0.04 
2nd Quarter — Total
$(135)$(179)$(107)$(114)$(0.14)$(0.15)
Year-to-date Total 4
$(235)$(302)$(184)$(233)$(0.25)$(0.31)


1.First and second quarter 2021 included restructuring and asset related charges of $(100) and $(135), respectively. The charges for the second quarter primarily relate to a $(21) charge associated with the 2021 Restructuring Actions and a $(112) charge related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits. The charges for the first quarter primarily relate to a $(89) charge associated with the 2021 Restructuring Actions and a $(7) charge related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits.

First quarter and second quarter 2020 included restructuring and asset related charges of $(70) and $(179), respectively. The charge for the second quarter included a $(41) charge related to the Execute to Win Productivity Program and a $(138) charge related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits. The charge for the first quarter included a $(63) charge related to the Execute to Win Productivity Program, a $(10) charge related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits, and a $3 asset related benefit associated with the DowDuPont Synergy Program.

2.First quarter 2020 included a loss of $(53) included in other income - net related to the sale of the La Porte site, for which the company signed an agreement during the first quarter 2020, and closed during the first quarter of 2021.

3.Second quarter 2020 reflected a benefit of $29 due to an elective change in accounting method that altered the 2019 impact of the business separation on the 2017 Tax Cuts and Jobs Act's foreign tax provisions. First quarter 2020 included an after tax charge related to the impact of a state tax valuation allowance in the U.S. based on a change in judgment about the realizability of a deferred tax asset.

4.Earnings per share for the year may not equal the sum of quarterly earnings per share due to the changes in average share calculations.

5.Unless specifically addressed in notes above, the income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.



A-11
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
Operating Earnings Per Share (Non-GAAP)
Operating earnings per share is defined as earnings per share from continuing operations – diluted, excluding non-operating benefits - net, amortization of intangibles (existing as of Separation), net unrealized gain or loss from mark-to-market activity on certain foreign currency derivative instruments that do not qualify for hedge accounting, and significant items.
Three Months Ended June 30,
2021202020212020
$$EPS (diluted)EPS (diluted)
Net income from continuing operations attributable to Corteva (GAAP)$1,015 $760 $1.37 $1.01 
Less: Non-operating benefits - net, after tax 1
237 67 0.320.09 
Less: Amortization of intangibles (existing as of Separation), after tax(140)(137)(0.19)(0.19)
Less: Mark-to-market losses on certain foreign currency contracts not designated as hedges, after tax2
(18)(0.02)
Less: Significant items charge, after tax(107)(114)(0.14)(0.15)
Operating Earnings (Non-GAAP)$1,043 $944 $1.40 $1.26 
Six Months Ended June 30,
2021202020212020
$$EPS (diluted)EPS (diluted)
Net income from continuing operations attributable to Corteva (GAAP)$1,625 $1,031 $2.18 $1.37 
Less: Non-operating benefits - net, after tax 1
474 124 0.64 0.16 
Less: Amortization of intangibles (existing as of Separation), after tax(283)(251)(0.38)(0.33)
Less: Mark-to-market losses on certain foreign currency contracts not designated as hedges, after tax2
(17)(0.02)
Less: Significant items charge, after tax(184)(233)(0.25)(0.31)
Operating Earnings (Non-GAAP)$1,635 $1,391 $2.19 $1.85 

1.Non-operating benefits—net consists of non-operating pension and other post-employment benefit (OPEB) benefits (costs), tax indemnification adjustments, and environmental remediation and legal costs associated with legacy EID 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.
2.Effective January 1, 2021, on a prospective basis, the company excludes net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. For the three and six months ended June 30, 2020, the unrealized mark-to-market gain was $27 million.




A-12
Corteva, Inc.
Operating EBITDA to Operating Earnings Per Share
(Dollars in millions, except per share amounts)

Operating EBITDA to Operating Earnings Per Share
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Operating EBITDA (Non-GAAP)1
$1,461 $1,236 $2,365 $2,030 
Depreciation(133)(124)(254)(244)
Interest Income18 9 39 27 
Interest Expense(7)(14)(14)(24)
Provision for income taxes on continuing operations before significant items, non-operating benefits - net, amortization of intangibles (existing as of Separation), mark-to-market losses on certain foreign currency contracts not designated as hedges, and exchange gains/(losses), net (Non-GAAP)1
(278)(160)(440)(307)
Base income tax rate from continuing operations (Non-GAAP)1
20.8 %14.5 %20.6 %17.2 %
Exchange (losses) gains - net, after tax2
(15)3 (55)(75)
Net income attributable to non-controlling interests(3)(6)(6)(16)
Operating Earnings (Non-GAAP)1
$1,043 $944 $1,635 $1,391 
Diluted Shares (in millions)743.3 751.6 746.4 752.0 
Operating Earnings Per Share (Non-GAAP)1
$1.40 $1.26 $2.19 $1.85 

1.     Refer to pages A-5 through A-9 and A-11 through A-13 for Non-GAAP reconciliations.
2.     Refer to page A-14 for pre-tax and after tax impacts of exchange (losses) gains - net.




A-13
Corteva, Inc.
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)

Reconciliation of Base Income Tax Rate to Effective Income Tax Rate
Base income tax rate is defined as the effective income tax rate less the effect of exchange (losses) gains, significant items, amortization of intangibles (existing as of Separation), mark-to-market gains on certain foreign currency contracts not designated as hedges, and non-operating benefits - net.
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Income from continuing operations before income taxes (GAAP)
$1,302 $844 $2,093 $1,252 
Add: Significant items - charge 1
135 179 235 302 
           Non-operating benefits - net(315)(91)(626)(164)
           Amortization of intangibles (existing as of Separation)180 176 363 339 
  Mark-to-market losses on certain foreign currency contracts not designated as
  hedges2
23 22 
Less: Exchange (losses) gains, net3
(14)1 (49)(60)
Income from continuing operations before income taxes, significant items, non-operating benefits - net, amortization of intangibles (existing as of Separation), mark-to-market losses on certain foreign currency contracts not designated as hedges, and exchange (losses) gains, net (Non-GAAP)
$1,339 $1,107 $2,136 $1,789 
Provision for income taxes on continuing operations (GAAP)
$284 $78 $462 $205 
Add: Tax benefits on significant items charge1
28 65 51 69 
          Tax expenses on non-operating benefits - net(78)(24)(152)(40)
          Tax benefits on amortization of intangibles (existing as of Separation)40 39 80 88 
  Tax benefits on mark-to-market losses on certain foreign currency contracts not
  designated as hedges2
5 5 
          Tax expenses on exchange (losses) gains, net3
(1)2 (6)(15)
Provision for income taxes on continuing operations before significant items, non-operating benefits - net, amortization of intangibles (existing as of Separation), mark-to-market losses on certain foreign currency contracts not designated as hedges, and exchange (losses) gains, net (Non-GAAP)
$278 $160 $440 $307 
Effective income tax rate (GAAP)
21.8 %9.2 %22.1 %16.4 %
Significant items, non-operating benefits, amortization of intangibles (existing as of Separation), and mark-to-market losses on certain foreign currency contracts not designated as hedges effect(0.8)%5.1 %(0.7)%2.2 %
Tax rate from continuing operations before significant items, non-operating benefits - net, amortization of intangibles (existing as of Separation), and mark-to-market losses on certain foreign currency contracts not designated as hedges21.0 %14.3 %21.4 %18.6 %
Exchange (losses) gains, net effect3
(0.2)%0.2 %(0.8)%(1.4)%
Base income tax rate from continuing operations (Non-GAAP)
20.8 %14.5 %20.6 %17.2 %
1. See Significant Items table for further detail.
2. Effective January 1, 2021, on a prospective basis, the company excludes net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. For the three and six months ended June 30, 2020, the unrealized mark-to-market gain was $27 million.
3. See page A-14 for further details of exchange (losses) gains.



A-14
Corteva, Inc.
(Dollars in millions, except per share amounts)

Exchange Gains/Losses
The company routinely uses foreign currency exchange contracts to offset its net exposures, by currency, related to the foreign currency-denominated monetary assets and liabilities. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes on net monetary asset positions. The hedging program gains (losses) are largely taxable (tax deductible) in the United States (U.S.), whereas the offsetting exchange gains (losses) on the remeasurement of the net monetary asset positions are often not taxable (tax deductible) in their local jurisdictions. The net pre-tax exchange gains (losses) are recorded in other income (expense) - net and the related tax impact is recorded in provision for (benefit from) income taxes on continuing operations in the Consolidated Statements of Operations.
Three Months Ended
June 30, 		Six Months Ended
June 30,
2021202020212020
Subsidiary Monetary Position Gain (Loss)
Pre-tax exchange gains (losses)$36 $(13)$(15)$(239)
Local tax (expenses) benefits (13)5 (14)28 
Net after tax impact from subsidiary exchange gains (losses)$23 $(8)$(29)$(211)
Hedging Program (Loss) Gain
Pre-tax exchange (losses) gains$(50)$14 $(34)$179 
Tax benefits (expenses)12 (3)8 (43)
Net after tax impact from hedging program exchange (losses) gains$(38)$11 $(26)$136 
Total Exchange (Loss) Gain
Pre-tax exchange (losses) gains$(14)$1 $(49)$(60)
Tax (expenses) benefits(1)2 (6)(15)
Net after tax exchange (losses) gains$(15)$3 $(55)$(75)
As shown above, the "Total Exchange (Loss) Gain" is the sum of the "Subsidiary Monetary Position Gain (Loss)" and the "Hedging Program (Loss) Gain."