QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
(State or other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||
(Address of Principal Executive Offices) (Zip Code) | (Registrant’s Telephone Number, including area code) | ||||||
(State or other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||
(Address of Principal Executive Offices) (Zip Code) | (Registrant’s Telephone Number, including area code) | ||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Corteva, Inc. | x | Accelerated Filer o | Non-Accelerated Filer | o | Smaller reporting company o | Emerging growth company o | |
E. I. du Pont de Nemours and Company | Large Accelerated Filer | o | Accelerated Filer o | x | Smaller reporting company o | Emerging growth company o | |
Page | |||
1. | the April 1, 2019 transfer of the assets and liabilities aligned with EID’s material science businesses including EID’s ethylene and ethylene copolymers business, excluding its ethylene acrylic elastomers business, (“EID ECP”) to DowDuPont, which were ultimately conveyed by DowDuPont to Dow; |
2. | the May 1, 2019 distribution of EID legal entities containing the assets and liabilities of EID’s specialty products business (the “EID Specialty Products Entities”) to DowDuPont; |
3. | the May 2, 2019 conveyance of Dow Ag Entities to EID; and |
4. | the May 31, 2019 contribution of EID to Corteva, Inc. Refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2019 for further information. |
Item 1. | CONSOLIDATED FINANCIAL STATEMENTS |
(In millions, except per share amounts) | Three Months Ended March 31, | |||||
2020 | 2019 | |||||
Net sales | $ | $ | ||||
Cost of goods sold | ||||||
Research and development expense | ||||||
Selling, general and administrative expenses | ||||||
Amortization of intangibles | ||||||
Restructuring and asset related charges - net | ||||||
Integration and separation costs | ||||||
Other income - net | ||||||
Interest expense | ||||||
Income (loss) from continuing operations before income taxes | ( | ) | ||||
Provision for (benefit from) income taxes on continuing operations | ( | ) | ||||
Income (loss) from continuing operations after income taxes | ( | ) | ||||
Income from discontinued operations after income taxes | ||||||
Net income | ||||||
Net income attributable to noncontrolling interests | ||||||
Net income attributable to Corteva | $ | $ | ||||
Basic earnings per share of common stock: | ||||||
Basic earnings (loss) per share of common stock from continuing operations | $ | $ | ( | ) | ||
Basic earnings per share of common stock from discontinued operations | ||||||
Basic earnings per share of common stock | $ | $ | ||||
Diluted earnings per share of common stock: | ||||||
Diluted earnings (loss) per share of common stock from continuing operations | $ | $ | ( | ) | ||
Diluted earnings per share of common stock from discontinued operations | ||||||
Diluted earnings per share of common stock | $ | $ | ||||
(In millions) | Three Months Ended March 31, | |||||
2020 | 2019 | |||||
Net income | $ | $ | ||||
Other comprehensive loss - net of tax: | ||||||
Cumulative translation adjustments | ( | ) | ( | ) | ||
Adjustments to pension benefit plans | ( | ) | ||||
Adjustments to other benefit plans | ||||||
Derivative instruments | ||||||
Total other comprehensive loss | ( | ) | ( | ) | ||
Comprehensive (loss) income | ( | ) | ||||
Comprehensive income attributable to noncontrolling interests - net of tax | ||||||
Comprehensive (loss) income attributable to Corteva | $ | ( | ) | $ | ||
(In millions, except share amounts) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Assets | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | $ | $ | ||||||
Marketable securities | |||||||||
Accounts and notes receivable - net | |||||||||
Inventories | |||||||||
Other current assets | |||||||||
Assets of discontinued operations - current | |||||||||
Total current assets | |||||||||
Investment in nonconsolidated affiliates | |||||||||
Property, plant and equipment - net of accumulated depreciation (March 31, 2020 - $3,406; December 31, 2019 - $3,326; March 31, 2019 - $2,970) | |||||||||
Goodwill | |||||||||
Other intangible assets | |||||||||
Deferred income taxes | |||||||||
Other assets | |||||||||
Assets of discontinued operations - non-current | |||||||||
Total Assets | $ | $ | $ | ||||||
Liabilities and Equity | |||||||||
Current liabilities | |||||||||
Short-term borrowings and finance lease obligations | $ | $ | $ | ||||||
Accounts payable | |||||||||
Income taxes payable | |||||||||
Accrued and other current liabilities | |||||||||
Liabilities of discontinued operations - current | |||||||||
Total current liabilities | |||||||||
Long-Term Debt | |||||||||
Other Noncurrent Liabilities | |||||||||
Deferred income tax liabilities | |||||||||
Pension and other post employment benefits - noncurrent | |||||||||
Other noncurrent obligations | |||||||||
Liabilities of discontinued operations - non-current | |||||||||
Total noncurrent liabilities | |||||||||
Commitments and contingent liabilities | |||||||||
Stockholders’ equity | |||||||||
Common stock, $0.01 par value; 1,666,667,000 shares authorized; issued at March 31, 2020 - 748,369,000; and December 31, 2019 - 748,577,000 | |||||||||
Additional paid-in capital | |||||||||
Divisional equity | |||||||||
Accumulated deficit | ( | ) | ( | ) | |||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ( | ) | |||
Total Corteva stockholders’ equity | |||||||||
Noncontrolling interests | |||||||||
Total equity | |||||||||
Total Liabilities and Equity | $ | $ | $ | ||||||
(In millions) | Three Months Ended March 31, | |||||
2020 | 2019 | |||||
Operating activities | ||||||
Net income | $ | $ | ||||
Adjustments to reconcile net income to cash used for operating activities: | ||||||
Depreciation and amortization | ||||||
Provision for (benefit from) deferred income tax | ( | ) | ||||
Net periodic pension benefit | ( | ) | ( | ) | ||
Pension contributions | ( | ) | ( | ) | ||
Net loss (gain) on sales of property, businesses, consolidated companies and investments | ( | ) | ||||
Restructuring and asset related charges - net | ||||||
Amortization of inventory step-up | ||||||
Other net loss | ||||||
Changes in operating assets and liabilities - net | ( | ) | ( | ) | ||
Cash used for operating activities | ( | ) | ( | ) | ||
Investing activities | ||||||
Capital expenditures | ( | ) | ( | ) | ||
Proceeds from sales of property, businesses and consolidated companies - net of cash divested | ||||||
Proceeds from sales of ownership interests in nonconsolidated affiliates | ||||||
Purchases of investments | ( | ) | ( | ) | ||
Proceeds from sales and maturities of investments | ||||||
Other investing activities - net | ( | ) | ( | ) | ||
Cash used for investing activities | ( | ) | ( | ) | ||
Financing activities | ||||||
Net change in borrowings (less than 90 days) | ||||||
Proceeds from debt | ||||||
Payments on debt | ( | ) | ( | ) | ||
Repurchase of common stock | ( | ) | ||||
Proceeds from exercise of stock options | ||||||
Dividends paid to stockholders | ( | ) | ||||
Distributions to DowDuPont | ( | ) | ||||
Contributions from Dow | ||||||
Other financing activities | ( | ) | ( | ) | ||
Cash provided by financing activities | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ||||
Increase (decrease) in cash, cash equivalents and restricted cash | ( | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | ||||||
Cash, cash equivalents and restricted cash at end of period1 | $ | $ | ||||
(In millions) | Common Stock | Additional Paid-in Capital | Divisional Equity | Retained Earnings (Accumulated deficit) | Accumulated Other Comp Loss | Treasury Stock | Non-controlling Interests | Total Equity | ||||||||||||||||
2019 | ||||||||||||||||||||||||
Balance at January 1, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||
Net income | ||||||||||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | ||||||||||||||||||||
Distributions to DowDuPont | ( | ) | ( | ) | ||||||||||||||||||||
Issuance of DowDuPont stock | ||||||||||||||||||||||||
Share-based compensation | ||||||||||||||||||||||||
Contributions from Dow | ||||||||||||||||||||||||
Other - net | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||
(In millions) | Common Stock | Additional Paid-in Capital | Divisional Equity | (Accumulated deficit) Retained Earnings | Accumulated Other Comp Loss | Treasury Stock | Non-controlling Interests | Total Equity | ||||||||||||||
2020 | ||||||||||||||||||||||
Balance at January 1, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||
Net income | ||||||||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | ||||||||||||||||||
Common dividends ($0.13 per share) | ( | ) | ( | ) | ||||||||||||||||||
Issuance of Corteva stock | ||||||||||||||||||||||
Share-based compensation | ||||||||||||||||||||||
Common Stock Repurchase | ( | ) | ( | ) | ||||||||||||||||||
Other - net | ( | ) | ( | ) | ||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||
Corteva, Inc. | ||
Notes to the Consolidated Financial Statements (Unaudited) | ||
Note | Page | |
(In millions) | Three Months Ended March 31, 2019 | ||
Net sales | $ | ||
Cost of goods sold | |||
Research and development expense | |||
Selling, general and administrative expenses | |||
Amortization of intangibles | |||
Restructuring and asset related charges - net | |||
Integration and separation costs | |||
Other income - net | |||
Income from discontinued operations before income taxes | |||
Provision for income taxes on discontinued operations | |||
Income from discontinued operations after income taxes | $ | ||
(In millions) | Three Months Ended March 31, 2019 | ||
Depreciation | $ | ||
Amortization of intangibles | $ | ||
Capital expenditures | $ | ||
(In millions) | March 31, 2019 | ||
Cash and cash equivalents | $ | ||
Accounts and notes receivable - net | |||
Inventories | |||
Other current assets | |||
Total current assets of discontinued operations | |||
Investment in nonconsolidated affiliates | |||
Property, plant and equipment - net | |||
Goodwill | |||
Other intangible assets | |||
Deferred income taxes | |||
Other assets | |||
Non-current assets of discontinued operations | |||
Total assets of discontinued operations | $ | ||
Short-term borrowings and finance lease obligations | |||
Accounts payable | |||
Income tax payable | |||
Accrued and other current liabilities | |||
Total current liabilities of discontinued operations | |||
Long-term Debt | |||
Deferred income tax liabilities | |||
Pension and other post employment benefits - noncurrent | |||
Other noncurrent obligations | |||
Non-current liabilities of discontinued operations | |||
Total liabilities of discontinued operations | $ | ||
(In millions) | Three Months Ended March 31, 2019 | ||
Net sales | $ | ||
Cost of goods sold | |||
Research and development expense | |||
Selling, general and administrative expenses | |||
Amortization of intangibles | |||
Restructuring and asset related charges - net | |||
Integration and separation costs | |||
Other income - net | |||
Income from discontinued operations before income taxes | |||
Provision for income taxes on discontinued operations | |||
Income from discontinued operations after income taxes | $ | ||
(In millions) | Three Months Ended March 31, 2019 | ||
Depreciation | $ | ||
Amortization of intangibles | $ | ||
Capital expenditures | $ | ||
(In millions) | March 31, 2019 | ||
Cash and cash equivalents | $ | ||
Marketable securities | |||
Accounts and notes receivable - net | |||
Inventories | |||
Other current assets | |||
Total current assets of discontinued operations | |||
Investment in nonconsolidated affiliates | |||
Property, plant and equipment - net | |||
Goodwill | |||
Other intangible assets | |||
Deferred income taxes | |||
Other assets | |||
Non-current assets of discontinued operations | |||
Total assets of discontinued operations | $ | ||
Short-term borrowings and finance lease obligations | |||
Accounts payable | |||
Income taxes payable | |||
Accrued and other current liabilities | |||
Total current liabilities of discontinued operations | |||
Long-term Debt | |||
Deferred income tax liabilities | |||
Pension and other post employment benefits - noncurrent | |||
Other noncurrent obligations | |||
Non-current liabilities of discontinued operations | |||
Total liabilities of discontinued operations | $ | ||
Contract Balances | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
(In millions) | |||||||||
Accounts and notes receivable - trade1 | $ | $ | $ | ||||||
Contract assets - current2 | $ | $ | $ | ||||||
Contract assets - noncurrent3 | $ | $ | $ | ||||||
Deferred revenue - current4 | $ | $ | $ | ||||||
Deferred revenue - noncurrent5 | $ | $ | $ | ||||||
1. | Included in accounts and notes receivable - net in the interim Condensed Consolidated Balance Sheets. |
2. | Included in other current assets in the interim Condensed Consolidated Balance Sheets. |
3. | Included in other assets in the interim Condensed Consolidated Balance Sheets. |
4. |
5. | Included in other noncurrent obligations in the interim Condensed Consolidated Balance Sheets. |
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Corn | $ | $ | ||||
Soybean | ||||||
Other oilseeds | ||||||
Other | ||||||
Seed | ||||||
Herbicides | ||||||
Insecticides | ||||||
Fungicides | ||||||
Other | ||||||
Crop Protection | ||||||
Total | $ | $ | ||||
Seed | Three Months Ended March 31, | |||||
(In millions) | 2020 | 2019 | ||||
North America1 | $ | $ | ||||
EMEA2 | ||||||
Latin America | ||||||
Asia Pacific | ||||||
Total | $ | $ | ||||
Crop Protection | Three Months Ended March 31, | |||||
(In millions) | 2020 | 2019 | ||||
North America1 | $ | $ | ||||
EMEA2 | ||||||
Latin America | ||||||
Asia Pacific | ||||||
Total | $ | $ | ||||
1. | Represents U.S. & Canada. |
2. | Europe, Middle East, and Africa ("EMEA"). |
Three Months Ended March 31, | |||
(In millions) | 2020 | ||
Seed | $ | ||
Crop Protection | |||
Corporate expenses | |||
Total | $ | ||
(In millions) | Severance and Related Benefit Costs | Asset Related Charges | Total | ||||||
Balance at December 31, 2019 | $ | $ | $ | ||||||
Charges to income from continuing operations for the three months ended March 31, 2020 | |||||||||
Asset write-offs | ( | ) | ( | ) | |||||
Balance at March 31, 2020 | $ | $ | $ | ||||||
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Seed | $ | ( | ) | $ | ||
Crop Protection | ||||||
Corporate expenses | ||||||
Total | $ | ( | ) | $ | ||
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Severance and related benefit costs | $ | $ | ||||
Contract termination charges | ||||||
Asset related (benefits) charges | ( | ) | ||||
Total restructuring and asset related (benefits) charges - net | $ | ( | ) | $ | ||
(In millions) | Severance and Related Benefit Costs | Costs Associated with Exit and Disposal Activities1 | Asset Related (Benefits) Charges | Total | ||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ||||||||
Payments | ( | ) | ( | ) | ||||||||
Asset write-offs | ( | ) | ( | ) | ||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | ||||||||
1. | Relates primarily to contract terminations charges. |
Other Income - Net | Three Months Ended March 31, | |||||
(In millions) | 2020 | 2019 | ||||
Interest income | $ | $ | ||||
Equity in losses of affiliates - net | ( | ) | ||||
Net loss on sales of businesses and other assets1 | ( | ) | ( | ) | ||
Net exchange losses | ( | ) | ( | ) | ||
Non-operating pension and other post employment benefit credit2 | ||||||
Miscellaneous income (expenses) - net | ||||||
Other income - net | $ | $ | ||||
1. | Includes a loss of $( |
2. | Includes non-service related components of net periodic benefit credits (costs) (interest cost, expected return on plan assets, amortization of unrecognized (gain) loss, and settlement loss). |
(In millions) | Three Months Ended March 31, | |||||
2020 | 2019 | |||||
Subsidiary Monetary Position Losses | ||||||
Pre-tax exchange losses | $ | ( | ) | $ | ( | ) |
Local tax benefits (expenses) | ( | ) | ||||
Net after-tax impact from subsidiary exchange losses | $ | ( | ) | $ | ( | ) |
Hedging Program Gains (Losses) | ||||||
Pre-tax exchange gains (losses) | $ | $ | ( | ) | ||
Tax (expenses) benefits | ( | ) | ||||
Net after-tax impact from hedging program exchange gains (losses) | $ | $ | ( | ) | ||
Total Exchange Losses | ||||||
Pre-tax exchange losses | $ | ( | ) | $ | ( | ) |
Tax expenses | ( | ) | ( | ) | ||
Net after-tax exchange losses | $ | ( | ) | $ | ( | ) |
(In millions) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Cash and cash equivalents | $ | $ | $ | ||||||
Restricted cash | |||||||||
Total cash, cash equivalents and restricted cash | |||||||||
Cash and cash equivalents of discontinued operations1 | |||||||||
Restricted cash of discontinued operations2 | |||||||||
Total cash, cash equivalents and restricted cash | $ | $ | $ | ||||||
1. | Refer to Note 3 - Divestitures and Other Transactions, for additional information. |
2. | Amount included in other current assets within assets of discontinued operations - current. Refer to Note 3 - Divestitures and Other Transactions, for additional information. |
Net Income for Earnings Per Share Calculations - Basic and Diluted | Three Months Ended March 31 | |||||
(In millions) | 2020 | 2019 | ||||
Income (loss) from continuing operations after income taxes | $ | $ | ( | ) | ||
Net income attributable to continuing operations noncontrolling interests | ||||||
Income (loss) from continuing operations available to Corteva common stockholders | ( | ) | ||||
Income from discontinued operations, net of tax | ||||||
Net income attributable to discontinued operations noncontrolling interests | ||||||
Income from discontinued operations available to Corteva common stockholders | ||||||
Net income available to common stockholders | $ | $ | ||||
Earnings Per Share Calculations - Basic | Three Months Ended March 31 | |||||
(Dollars per share) | 2020 | 2019 | ||||
Earnings (loss) per share of common stock from continuing operations | $ | $ | ( | ) | ||
Earnings per share of common stock from discontinued operations | ||||||
Earnings per share of common stock | $ | $ | ||||
Earnings Per Share Calculations - Diluted | Three Months Ended March 31 | |||||
(Dollars per share) | 2020 | 2019 | ||||
Earnings (loss) per share of common stock from continuing operations | $ | $ | ( | ) | ||
Earnings per share of common stock from discontinued operations | ||||||
Earnings per share of common stock | $ | $ | ||||
Share Count Information | Three Months Ended March 31 | |||
(Shares in millions) | 2020 | 2019 | ||
Weighted-average common shares - basic1 | ||||
Plus dilutive effect of equity compensation plans2 | ||||
Weighted-average common shares - diluted | ||||
Potential shares of common stock excluded from EPS calculations3 | ||||
1. | Share amounts for all periods prior to the Corteva Distribution were based on |
2. | Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. |
3. | These outstanding potential shares of common stock were excluded from the calculation of diluted earnings per share because the effect of including them would have been anti-dilutive. |
(In millions) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Accounts receivable – trade1 | $ | $ | $ | ||||||
Notes receivable – trade2 | |||||||||
Other3 | |||||||||
Total accounts and notes receivable - net | $ | $ | $ | ||||||
1. | Accounts receivable – trade is net of allowances of $ |
2. | Notes receivable – trade primarily consists of receivables for deferred payment loan programs for the sale of seed products to customers. These loans have terms of one year or less and are primarily concentrated in North America. The company maintains a rigid pre-approval process for extending credit to customers in order to manage overall risk and exposure associated with credit losses. As of March 31, 2020, December 31, 2019, and March 31, 2019 there were no additional exposures requiring a reserve in excess of what is already reserved, nor were there any significant impairments related to current loan agreements. |
3. | Other includes receivables in relation to indemnification assets, value added tax, general sales tax and other taxes. No individual group represents more than 10 percent of total receivables. In addition, Other includes amounts due from nonconsolidated affiliates of $ |
(In millions) | |||
Balance at December 31, 2019 | $ | ||
Additions charged to expenses | |||
Write-offs charged against allowance | ( | ) | |
Recoveries collected | ( | ) | |
Balance at March 31, 2020 | $ | ||
(In millions) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Finished products | $ | $ | $ | ||||||
Semi-finished products | |||||||||
Raw materials and supplies | |||||||||
Total inventories | $ | $ | $ | ||||||
(In millions) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||||||||||||||||||||
Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||||
Intangible assets subject to amortization (Definite-lived): | |||||||||||||||||||||||||||
Germplasm1 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||
Customer-related | ( | ) | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
Developed technology | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Trademarks/trade names | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Favorable supply contracts | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Other2 | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Total other intangible assets with finite lives | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Intangible assets not subject to amortization (Indefinite-lived): | |||||||||||||||||||||||||||
IPR&D | — | — | — | ||||||||||||||||||||||||
Germplasm1 | — | ||||||||||||||||||||||||||
Trademarks / trade names | — | — | — | ||||||||||||||||||||||||
Other | — | — | — | ||||||||||||||||||||||||
Total other intangible assets | — | — | — | ||||||||||||||||||||||||
Total | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||
1. | Beginning on October 1, 2019, the company changed its indefinite life assertion of the germplasm assets to definite lived with a useful life of 25 years. This change is the result of a more focused development effort of new seed products coupled with an intent to out license select germplasm on a non-exclusive basis. Prior to changing the useful life of the germplasm assets, the company tested the assets for impairment under ASC 350 - Intangibles, Goodwill and Other, concluding the assets were not impaired. |
2. | Primarily consists of sales and farmer networks, marketing and manufacturing alliances and noncompetition agreements. |
Short-term borrowings and finance lease obligations | |||||||||
(In millions) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Commercial paper | $ | $ | $ | ||||||
Repurchase facility | |||||||||
Other loans - various currencies | |||||||||
Long-term debt payable within one year | |||||||||
Finance lease obligations payable within one year | |||||||||
Total short-term borrowings and finance lease obligations | $ | $ | $ | ||||||
As of March 31, 2020 | |||||||||
(In millions) | Indemnification Asset | Accrual balance3 | Potential exposure above amount accrued3 | ||||||
Environmental Remediation Stray Liabilities | |||||||||
Chemours related obligations - subject to indemnity1,2 | $ | $ | $ | ||||||
Other discontinued or divested businesses obligations1 | |||||||||
Environmental remediation liabilities primarily related to DuPont - subject to indemnity from DuPont2 | |||||||||
Environmental remediation liabilities not subject to indemnity | |||||||||
Total | $ | $ | $ | ||||||
1. | Represents liabilities that are subject the $ |
2. | The company has recorded an indemnification asset related to these accruals, including $ |
3. | Accrual balance represents management’s best estimate of the costs of remediation and restoration, although it is reasonably possible that the potential exposure, as indicated, could range above the amounts accrued, as there are inherent uncertainties in these estimates. |
Shares of common stock | Issued | |
Balance January 1, 2020 | ||
Issued | ||
Repurchased and retired | ( | ) |
Balance March 31, 2020 | ||
Shares in thousands | Number of Shares |
Authorized | |
$4.50 Series, callable at $120 | |
$3.50 Series, callable at $102 | |
(In millions) | Cumulative Translation Adjustment1 | Derivative Instruments | Pension Benefit Plans | Other Benefit Plans | Total | ||||||||||
2019 | |||||||||||||||
Balance January 1, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||
Other comprehensive loss before reclassifications | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||
Net other comprehensive (loss) income | ( | ) | ( | ) | ( | ) | |||||||||
Balance March 31, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||
2020 | |||||||||||||||
Balance January 1, 2020 | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Other comprehensive (loss) income before reclassifications | ( | ) | ( | ) | ( | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||
Net other comprehensive (loss) income | ( | ) | ( | ) | |||||||||||
Balance March 31, 2020 | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
1. | The cumulative translation adjustment loss for the three months ended March 31, 2019 was primarily driven by strengthening of the USD against the European Euro (“EUR”) and the Brazilian Real (“BRL”). The cumulative translation adjustment loss for the three months ended March 31, 2020 was primarily driven by strengthening of the USD against the BRL and the South African Rand ("ZAR"). |
(In millions) | Three Months Ended March 31, | |||||
2020 | 2019 | |||||
Derivative instruments | $ | $ | ( | ) | ||
Pension benefit plans - net | ( | ) | ( | ) | ||
Benefit from (provision for) income taxes related to other comprehensive income (loss) items | $ | $ | ( | ) | ||
(In millions) | Three Months Ended March 31, | |||||
2020 | 2019 | |||||
Derivative Instruments1: | $ | $ | ||||
Tax (benefit) expense2 | ( | ) | ||||
After-tax | $ | $ | ||||
Amortization of pension benefit plans: | ||||||
Actuarial losses3 | $ | |||||
Settlement loss3 | ||||||
Total before tax | ||||||
Tax benefit2 | ( | ) | ||||
After-tax | $ | $ | ||||
Total reclassifications for the period, after-tax | $ | $ | ||||
1. | Reflected in cost of goods sold. |
2. | Reflected in provision for (benefit from) income taxes from continuing operations. |
3. |
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Defined Benefit Pension Plans: | ||||||
Service cost | $ | $ | ||||
Interest cost | ||||||
Expected return on plan assets | ( | ) | ( | ) | ||
Amortization of unrecognized loss | ||||||
Settlement loss | ||||||
Net periodic benefit credit - Total | $ | ( | ) | $ | ( | ) |
Less: Discontinued operations1 | ( | ) | ||||
Net periodic benefit credit - Continuing operations | $ | ( | ) | $ | ( | ) |
Other Post Employment Benefits: | ||||||
Service cost | $ | $ | ||||
Interest cost | ||||||
Net periodic benefit cost - Continuing operations | $ | $ | ||||
1. |
Notional Amounts (In millions) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Derivatives designated as hedging instruments: | |||||||||
Foreign currency contracts | $ | $ | $ | ||||||
Commodity contracts | $ | $ | $ | ||||||
Derivatives not designated as hedging instruments: | |||||||||
Foreign currency contracts | $ | $ | $ | ||||||
Commodity contracts | $ | $ | $ | ||||||
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Beginning balance | $ | $ | ( | ) | ||
Additions and revaluations of derivatives designated as cash flow hedges | ( | ) | ( | ) | ||
Clearance of hedge results to earnings | ||||||
Ending balance | $ | ( | ) | $ | ( | ) |
Three Months Ended March 31, | |||
(In millions) | 2020 | ||
Beginning balance | $ | ||
Additions and revaluations of derivatives designated as cash flow hedges | |||
Ending balance | $ | ||
March 31, 2020 | ||||||||||
(In millions) | Balance Sheet Location | Gross | Counterparty and Cash Collateral Netting1 | Net Amounts Included in the Condensed Consolidated Balance Sheet | ||||||
Asset derivatives: | ||||||||||
Derivatives designated as hedging instruments: | ||||||||||
Foreign currency contracts | Other current assets | $ | $ | $ | ||||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Other current assets | ( | ) | |||||||
Total asset derivatives | $ | $ | ( | ) | $ | |||||
Liability derivatives: | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Accrued and other current liabilities | $ | $ | ( | ) | $ | ||||
Total liability derivatives | $ | $ | ( | ) | $ | |||||
1. | Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty. |
December 31, 2019 | ||||||||||
(In millions) | Balance Sheet Location | Gross | Counterparty and Cash Collateral Netting1 | Net Amounts Included in the Condensed Consolidated Balance Sheet | ||||||
Asset derivatives: | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Other current assets | $ | $ | ( | ) | $ | ||||
Total asset derivatives | $ | $ | ( | ) | $ | |||||
Liability derivatives: | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Accrued and other current liabilities | $ | $ | ( | ) | $ | ||||
Total liability derivatives | $ | $ | ( | ) | $ | |||||
1. | Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty. |
March 31, 2019 | ||||||||||
(In millions) | Balance Sheet Location | Gross | Counterparty and Cash Collateral Netting1 | Net Amounts Included in the Condensed Consolidated Balance Sheet | ||||||
Asset derivatives: | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Other current assets | $ | $ | ( | ) | $ | ||||
Total asset derivatives | $ | $ | ( | ) | $ | |||||
Liability derivatives: | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Accrued and other current liabilities | $ | $ | ( | ) | $ | ||||
Total liability derivatives | $ | $ | ( | ) | $ | |||||
1. | Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty. |
Amount of (Loss) Gain Recognized in OCI1 - Pre-Tax | ||||||
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Derivatives designated as hedging instruments: | ||||||
Net Investment Hedges: | ||||||
Foreign currency contracts | $ | $ | ||||
Cash flow hedges: | ||||||
Foreign currency contracts | $ | |||||
Commodity contracts | ( | ) | $ | |||
Total derivatives designated as hedging instruments | ( | ) | ||||
Total derivatives | $ | ( | ) | $ | ||
1. | OCI is defined as other comprehensive income (loss). |
Amount of Gain (Loss) Recognized in Income - Pre-Tax1 | ||||||
(In millions) | Three Months Ended March 31, | |||||
2020 | 2019 | |||||
Derivatives designated as hedging instruments: | ||||||
Cash flow hedges: | ||||||
Commodity contracts2 | $ | ( | ) | $ | ( | ) |
Total derivatives designated as hedging instruments | ( | ) | ( | ) | ||
Derivatives not designated as hedging instruments: | ||||||
Foreign currency contracts3 | ( | ) | ||||
Commodity contracts2 | ||||||
Total derivatives not designated as hedging instruments | ( | ) | ||||
Total derivatives | $ | $ | ( | ) | ||
1. | For cash flow hedges, this represents the portion of the gain (loss) reclassified from accumulated OCI into income during the period. |
2. | Recorded in cost of goods sold. |
3. | Gain recognized in other income - net was partially offset by the related gain on the foreign currency-denominated monetary assets and liabilities of the company's operations. See Note 7 - Supplementary Information, for additional information. |
March 31, 2020 | Significant Other Observable Inputs (Level 2) | ||
(In millions) | |||
Assets at fair value: | |||
Cash equivalents and restricted cash equivalents1 | $ | ||
Marketable securities | |||
Derivatives relating to:2 | |||
Foreign currency | |||
Total assets at fair value | $ | ||
Liabilities at fair value: | |||
Derivatives relating to:2 | |||
Foreign currency | |||
Total liabilities at fair value | $ | ||
December 31, 2019 | Significant Other Observable Inputs (Level 2) | ||
(In millions) | |||
Assets at fair value: | |||
Cash equivalents and restricted cash equivalents1 | $ | ||
Marketable securities | |||
Derivatives relating to:2 | |||
Foreign currency | |||
Total assets at fair value | $ | ||
Liabilities at fair value: | |||
Derivatives relating to:2 | |||
Foreign currency | |||
Total liabilities at fair value | $ | ||
March 31, 2019 | Significant Other Observable Inputs (Level 2) | ||
(In millions) | |||
Assets at fair value: | |||
Cash equivalents and restricted cash equivalents1 | $ | ||
Marketable securities | |||
Derivatives relating to:2 | |||
Foreign currency | |||
Total assets at fair value | $ | ||
Liabilities at fair value: | |||
Derivatives relating to:2 | |||
Foreign currency | |||
Total liabilities at fair value | $ | ||
1. | Time deposits included in cash and cash equivalents and money market funds included in other current assets in the interim Condensed Consolidated Balance Sheets are held at amortized cost, which approximates fair value. |
As of and for the Three Months Ended March 31, (In millions) | Seed | Crop Protection | Total | ||||||
2020 | |||||||||
Net sales | $ | $ | $ | ||||||
Segment operating EBITDA | $ | $ | $ | ||||||
Segment assets1,2 | $ | $ | $ | ||||||
2019 | |||||||||
Net sales | $ | $ | $ | ||||||
Pro forma segment operating EBITDA | $ | $ | $ | ||||||
Segment assets1 | $ | $ | $ | ||||||
1. | Segment assets at December 31, 2019 were $ |
Income (loss) from continuing operations after income taxes to segment operating EBITDA (In millions) | Three Months Ended March 31, | |||||
2020 | 2019 1 | |||||
Income (loss) from continuing operations after income taxes | $ | $ | ( | ) | ||
Provision for (benefit from) income taxes on continuing operations | ( | ) | ||||
Income (loss) from continuing operations before income taxes | ( | ) | ||||
Depreciation and amortization | ||||||
Interest income | ( | ) | ( | ) | ||
Interest expense | ||||||
Exchange losses - net | ||||||
Non-operating benefits - net | ( | ) | ( | ) | ||
Significant items | ||||||
Pro forma adjustments | ||||||
Corporate expenses | ||||||
Segment operating EBITDA | $ | $ | ||||
1. | Period is presented on a pro forma basis, prepared in accordance with Article 11 of Regulation S-X. |
Segment assets to total assets (in millions) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Total segment assets | $ | $ | $ | ||||||
Corporate assets | |||||||||
Assets related to discontinued operations1 | |||||||||
Total assets | $ | $ | $ | ||||||
1. | See Note 3 - Divestitures and Other Transactions for additional information on discontinued operations. |
(In millions) | Seed | Crop Protection | Corporate | Total | ||||||||
For the Three Months Ended March 31, 2020 | ||||||||||||
Restructuring and Asset Related Charges - Net 1 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Loss on Divestiture2 | — | ( | ) | — | ( | ) | ||||||
Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(In millions) | Seed | Crop Protection | Corporate | Total | ||||||||
For the Three Months Ended March 31, 2019 | ||||||||||||
Restructuring and Asset Related Charges - Net 1 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Integration Costs 3 | — | — | ( | ) | ( | ) | ||||||
Loss on Divestiture 4 | ( | ) | — | — | ( | ) | ||||||
Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
1. | Includes Board approved restructuring plans and asset related charges as well as accelerated prepaid amortization expense. See Note 5 - Restructuring and Asset Related Charges - Net, for additional information. |
2. |
3. | Integration costs include costs incurred to prepare for and close the Merger as well as post-Merger integration expenses. |
4. | Includes a loss recorded in other income - net related to DAS’s sale of a joint venture related to synergy actions. |
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | The company reported net sales of $3,956 million, up 16 percent versus the same quarter last year, reflecting a 17 percent increase in volume and a 3 percent increase in local price, partially offset by a 3 percent decline in currency and a 1 percent impact from portfolio. |
• | Cost of goods sold ("COGS") totaled $2,269 million in the first quarter of 2020, up from $2,211 million in the first quarter of 2019, primarily driven by increased volumes. The three months ended March 31, 2019 included $205 million of amortization of inventory step-up. |
• | Restructuring and asset related charges - net were $70 million in the first quarter of 2020, an increase from $61 million in the first quarter 2019. |
• | There were no integration and separation costs in the first quarter of 2020, as compared to $212 million in the first quarter of 2019. |
• | Income from continuing operations after income taxes was $281 million, as compared to a loss of $(184) million in the same quarter last year. |
• | Operating EBITDA was $794 million, up from $518 million for the three months ended March 31, 2019, as volume increases from strong early demand in North America and Europe, price increases for new products and ongoing cost-improvement actions more than offset currency headwinds. Refer to page 51 for further discussion of the company's Non-GAAP financial measures. |
• | The company realized cost synergies of approximately $70 million for the three months ended March 31, 2020. |
• | The company repurchased $50 million of shares as part of the $1 billion share repurchase program announced in the second quarter of 2019. |
• | The company announced it is suspending its full year 2020 Corporate Outlook in light of the COVID-19 crisis and volatility it is creating in the global markets. Refer to page 60 for further discussion. |
In millions, except per share amounts | Three Months Ended March 31, | |||||
2020 | 2019 | |||||
Net sales | $ | 3,956 | $ | 3,396 | ||
Cost of goods sold | $ | 2,269 | $ | 2,211 | ||
Percent of net sales | 57 | % | 65 | % | ||
Research and development expense | $ | 280 | $ | 299 | ||
Percent of net sales | 7 | % | 9 | % | ||
Selling, general and administrative expenses | $ | 757 | $ | 735 | ||
Percent of net sales | 19 | % | 22 | % | ||
Effective tax rate on continuing operations | 31.1 | % | 26.7 | % | ||
Income (loss) from continuing operations after income taxes | $ | 281 | $ | (184 | ) | |
Income (loss) from continuing operations available to Corteva common stockholders | $ | 271 | $ | (192 | ) | |
Basic earnings (loss) per share of common stock from continuing operations | $ | 0.36 | $ | (0.26 | ) | |
Diluted earnings (loss) per share of common stock from continuing operations | $ | 0.36 | $ | (0.26 | ) | |
Three Months Ended March 31, | ||||||||||
2020 | 2019 | |||||||||
Net Sales ($ Millions) | % | Net Sales ($ Millions) | % | |||||||
Worldwide | $ | 3,956 | 100 | % | $ | 3,396 | 100 | % | ||
North America | 1,765 | 45 | % | 1,392 | 41 | % | ||||
EMEA | 1,467 | 37 | % | 1,364 | 40 | % | ||||
Latin America | 434 | 11 | % | 365 | 11 | % | ||||
Asia Pacific | 290 | 7 | % | 275 | 8 | % | ||||
Q1 2020 vs. Q1 2019 | Percent Change Due To: | ||||||||||||
Net Sales Change | Local Price & | Portfolio / | |||||||||||
$ In millions | $ | % | Product Mix | Volume | Currency | Other | |||||||
North America | $ | 373 | 27 | % | 2 | % | 26 | % | — | % | (1 | )% | |
EMEA | 103 | 8 | % | 2 | % | 9 | % | (3 | )% | — | % | ||
Latin America | 69 | 19 | % | 11 | % | 19 | % | (11 | )% | — | % | ||
Asia Pacific | 15 | 5 | % | 2 | % | 8 | % | (3 | )% | (2 | )% | ||
Total | $ | 560 | 16 | % | 3 | % | 17 | % | (3 | )% | (1 | )% | |
Unaudited Pro Forma Statement of Operations | Three Months Ended March 31, 2019 | ||||||||||||||
(In millions, except per share amounts) | Corteva | Merger 1 | Debt Retirement 2 | Separations Related 3 | Pro Forma | ||||||||||
Net sales | $ | 3,396 | $ | — | $ | — | $ | — | $ | 3,396 | |||||
Cost of goods sold | 2,211 | (205 | ) | — | 16 | 2,022 | |||||||||
Research and development expense | 299 | — | — | — | 299 | ||||||||||
Selling, general and administrative expenses | 735 | — | — | 3 | 738 | ||||||||||
Amortization of intangibles | 101 | — | — | — | 101 | ||||||||||
Restructuring and asset related charges - net | 61 | — | — | — | 61 | ||||||||||
Integration and separation costs | 212 | — | — | (112 | ) | 100 | |||||||||
Other income - net | 31 | — | — | — | 31 | ||||||||||
Interest expense | 59 | — | (45 | ) | — | 14 | |||||||||
(Loss) income from continuing operations before income taxes | (251 | ) | 205 | 45 | 93 | 92 | |||||||||
Benefit from income taxes on continuing operations | (67 | ) | 36 | 10 | 1 | (20 | ) | ||||||||
(Loss) income from continuing operations after income taxes | (184 | ) | 169 | 35 | 92 | 112 | |||||||||
Net income from continuing operations attributable to noncontrolling interests | 8 | — | — | — | 8 | ||||||||||
Net (loss) income from continuing operations attributable to Corteva | $ | (192 | ) | $ | 169 | $ | 35 | $ | 92 | $ | 104 | ||||
Per share common data | |||||||||||||||
Earnings per share of common stock from continuing operations - basic | $ | 0.14 | |||||||||||||
Earnings per share of common stock from continuing operations - diluted | $ | 0.14 | |||||||||||||
Weighted-average common shares outstanding - basic | 749.4 | ||||||||||||||
Weighted-average common shares outstanding - diluted | 749.4 | ||||||||||||||
1. | Represents the removal of amortization of EID’s agriculture business’ inventory step-up recognized in connection with the Merger, as the incremental amortization is directly attributable to the Merger and will not have a continuing impact. |
2. | Represents removal of interest expense related to the debt redemptions/repayments. |
3. | Adjustments directly attributable to the separations and distributions of Corteva, Inc. include the following: removal of Telone® Soil Fumigant business (“Telone®”) results (as Telone® did not transfer to Corteva as part of the common control combination of DAS); impact from the distribution agreement entered into between Corteva and Dow that allows for Corteva to become the exclusive distributor of Telone® products for Dow; elimination of one-time transaction costs directly attributable to the Corteva Distribution; the impact of certain manufacturing, leasing and supply agreements entered into in connection with the Corteva Distribution; and the related tax impacts of these items. |
Seed | Three Months Ended March 31, | |||||
In millions | 2020 | 2019 | ||||
Net sales | $ | 2,455 | $ | 1,967 | ||
Segment operating EBITDA 1 | $ | 581 | $ | 325 | ||
1. | The three months ended March 31, 2019 is presented on a Pro Forma Basis, prepared in accordance with Article 11 of Regulation S-X. |
Seed | Q1 2020 vs. Q1 2019 | Percent Change Due To: | |||||||||||
Net Sales Change | Local Price & | Portfolio / | |||||||||||
$ In millions | $ | % | Product Mix | Volume | Currency | Other | |||||||
North America | $ | 377 | 41 | % | 4 | % | 37 | % | — | % | — | % | |
EMEA | 77 | 10 | % | 3 | % | 10 | % | (3 | )% | — | % | ||
Latin America | 38 | 21 | % | 16 | % | 14 | % | (9 | )% | — | % | ||
Asia Pacific | (4 | ) | (6 | )% | 5 | % | (7 | )% | (4 | )% | — | % | |
Total | $ | 488 | 25 | % | 5 | % | 22 | % | (2 | )% | — | % | |
Crop Protection | Three Months Ended March 31, | |||||
In millions | 2020 | 2019 | ||||
Net sales | $ | 1,501 | $ | 1,429 | ||
Segment Operating EBITDA 1 | $ | 238 | $ | 220 | ||
1. | The three months ended March 31, 2019 is presented on a Pro Forma Basis, prepared in accordance with Article 11 of Regulation S-X. |
Crop Protection | Q1 2020 vs. Q1 2019 | Percent Change Due To: | |||||||||||
Net Sales Change | Local Price & | Portfolio / | |||||||||||
$ In millions | $ | % | Product Mix | Volume | Currency | Other | |||||||
North America | $ | (4 | ) | (1 | )% | (4 | )% | 5 | % | — | % | (2 | )% |
EMEA | 26 | 5 | % | — | % | 9 | % | (4 | )% | — | % | ||
Latin America | 31 | 17 | % | 6 | % | 24 | % | (13 | )% | — | % | ||
Asia Pacific | 19 | 9 | % | 1 | % | 13 | % | (2 | )% | (3 | )% | ||
Total | $ | 72 | 5 | % | — | % | 10 | % | (4 | )% | (1 | )% | |
Three Months Ended March 31, | ||||||
2020 | 2019 | |||||
(In millions) | As Reported | Pro Forma | ||||
Income from continuing operations after income taxes | $ | 281 | $ | 112 | ||
Provision for (benefit from) income taxes on continuing operations | 127 | (20 | ) | |||
Income from continuing operations before income taxes | 408 | 92 | ||||
Depreciation and amortization | 283 | 258 | ||||
Interest income | (18 | ) | (16 | ) | ||
Interest expense | 10 | 14 | ||||
Exchange losses - net | 61 | 27 | ||||
Non-operating benefits - net | (73 | ) | (42 | ) | ||
Significant items charge | 123 | 185 | ||||
Operating EBITDA (Non-GAAP) | $ | 794 | $ | 518 | ||
Three Months Ended March 31, | ||||||
2020 | 2019 | |||||
(In millions) | As Reported | Pro Forma | ||||
Integration costs | $ | — | $ | (100 | ) | |
Restructuring and asset related charges - net | (70 | ) | (61 | ) | ||
Loss on divestitures | (53 | ) | (24 | ) | ||
Total pretax significant items charge | (123 | ) | (185 | ) | ||
Total tax benefit impact of significant items1 | 23 | 92 | ||||
Tax only significant item charge2 | (19 | ) | — | |||
Total significant items charge, after tax | $ | (119 | ) | $ | (93 | ) |
1. | The tax benefit impact of significant items for the three months ended March 31, 2019 includes a net tax charge of $(32) million related to U.S. state blended tax rate changes associated with the Internal Reorganizations and a net tax benefit of $102 million related to an internal legal entity restructuring associated with the Internal Reorganizations. Unless specifically addressed 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. |
2. | The three months ended March 31, 2020 includes an after tax charge related to the impact of a state tax valuation allowance in the US based on a change in judgment about the realizability of a deferred tax asset. |
Three Months Ended March 31, | ||||||
2020 | 2019 | |||||
(In millions) | As Reported | Pro Forma | ||||
Income from continuing operations attributable to Corteva | $ | 271 | $ | 104 | ||
Less: Non-operating benefits - net, after tax | 57 | 31 | ||||
Less: Amortization of intangibles (existing as of Separation), after tax | (114 | ) | (81 | ) | ||
Less: Significant items charge, after tax | (119 | ) | (93 | ) | ||
Operating Earnings (Non-GAAP) | $ | 447 | $ | 247 | ||
Three Months Ended March 31, | ||||||
2020 | 2019 | |||||
As Reported | Pro Forma | |||||
Earnings per share of common stock from continuing operations - diluted | $ | 0.36 | $ | 0.14 | ||
Less: Non-operating benefits - net, after tax | 0.08 | 0.04 | ||||
Less: Amortization of intangibles (existing as of Separation), after tax | (0.15 | ) | (0.11 | ) | ||
Less: Significant items charge, after tax | (0.16 | ) | (0.12 | ) | ||
Operating Earnings Per Share (Non-GAAP) | $ | 0.59 | $ | 0.33 | ||
Diluted Shares Outstanding (in millions) | 752.5 | 749.4 | ||||
(Dollars in millions) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Cash, cash equivalents and marketable securities | $ | 1,973 | $ | 1,769 | $ | 1,764 | |||
Total debt | $ | 2,610 | $ | 122 | $ | 9,498 | |||
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 1. | LEGAL PROCEEDINGS |
• | Current and future COVID-19 outbreaks and resulting illness, travel restrictions and workforce disruptions could impact Corteva's global supply chain, its operations and its routes to market or those of its suppliers, co-manufacturers, or customers/distributors. These disruptions or the company's failure to effectively respond to them could increase product or distribution costs, alter the timing of recognizing manufacturing costs, or impact the delivery of products to customers. |
• | Government or regulatory responses to pandemics could negatively impact the company's business. Mandatory lockdowns or other restrictions on operations in certain countries have temporarily disrupted the company's ability to operate or distribute its products in these markets. Continuation or expansion of these disruptions could materially adversely impact the company's operations and results. |
• | Reductions to the company’s forecasted profitability and continued global economic decline could trigger potential impairment of the carrying value of goodwill or other indefinite and definite-lived intangible assets. |
• | The instability or unavailability of a farm workforce to harvest agricultural products could impact the company's customers’ ability to monetize their crop and potentially impact the collection of the company's customer receivables. |
• | Continued commodity cost volatility is expected and the company's commodity hedging activities may not sufficiently offset this volatility. Depressed commodity prices may increase the insolvency risk of Corteva's customers in the longer-term, along with reducing the demand for Corteva's products. |
• | The company expects to be negatively impacted by foreign currency exchange rates, as a result of a generally stronger U.S. dollar relative to other currencies in the countries in which the company operates, which could adversely affect the company's reported results of operations and financial condition. |
• | Disruptions or uncertainties related to the COVID-19 outbreak for a sustained period of time could result in delays or modifications to the company's strategic plans and productivity initiatives. |
• | Increased volatility and pricing in the capital and commercial paper markets may continue to impact, the company's access to preferred sources of liquidity resulting in higher borrowing costs. The company cannot assure investors that additional liquidity will be readily available or available on favorable terms. |
• | Increased market volatility may bring unprecedented market conditions making it difficult for the company to adequately forecast customer demand. |
Month | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of the Company's Publicly Announced Share Buyback Program1 | Approximate Value of Shares that May Yet Be Purchased Under the Programs(1) (Dollars in millions) | ||||||
February 2020 | 320,477 | $ | 31.22 | 320,477 | ||||||
March 20202 | 1,544,335 | $ | 25.90 | 1,544,335 | ||||||
Total | 1,864,812 | 1,864,812 | $ | 925 | ||||||
1. | On June 26, 2019, Corteva, Inc. announced that its Board of Directors authorized a $1 billion share repurchase program to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date. The timing, price and volume of purchases will be based on market conditions, relevant securities laws and other factors. |
2. | The last purchase was completed on March 10, 2020. |
Item 6. | EXHIBITS |
Exhibit Number | Description | |
Separation and Distribution Agreement by and among DuPont Inc., Dow Inc. and Corteva, Inc. (incorporated by reference to Exhibit No. 2.1 to Amendment 3 to Corteva’s Registration Statement on Form 10, filed on April 16, 2019). | ||
Amended and Restated Certificate of Incorporation of Corteva, Inc. (incorporated by reference to Exhibit No. 3.1 to Corteva’s Current Report on Form 8-K (Commission file number 001-38710), filed on June 3, 2019. | ||
Amended and Restated Bylaws of Corteva, Inc. (incorporated by reference to Exhibit No. 3.1 to Corteva’s Current Report on Form 8-K (Commission file number 001-38710), filed on October 10, 2019. | ||
Amended and Restated Certificate of Incorporation of E.I. du Pont de Nemours and Company (incorporated by reference to Exhibit 3.1 to E.I. du Pont de Nemours and Company’s Current Report on Form 8-K (Commission file number 1-815) dated September 1, 2017). | ||
Amended and Restated Bylaws of E.I. du Pont de Nemours and Company (incorporated by reference to Exhibit 3.2 to E.I. du Pont de Nemours and Company's Current Report on Form 8-K (Commission file number 1-815) dated September 1, 2017). | ||
4 | Corteva agrees to provide the Commission, on request, copies of instruments defining the rights of holders of long-term debt of Corteva and its subsidiaries. | |
Master Repurchase Agreement by and among Cooperatieve Rabobank, U.A. (New York Branch), MUFG Bank, Ltd. (New York Branch), Standard Chartered Bank (New York Branch), and PHI Financial Services, Inc. dated as of February 11, 2020. | ||
Master Framework Agreement by and among Cooperatieve Rabobank, U.A. (New York Branch), MUFG Bank, Ltd. (New York Branch), Standard Chartered Bank (New York Branch), and PHI Financial Services, Inc. dated as of February 11, 2020. | ||
Form of Award Terms for Options granted under the Corteva, Inc. 2019 Omnibus Incentive Plan for U.S. grantees. | ||
Form of Award Terms for Performance Stock Units granted under the Corteva, Inc. 2019 Omnibus Incentive Plan for U.S. grantees. | ||
Form of Award Terms for Restricted Stock Units granted under the Corteva, Inc. 2019 Omnibus Incentive Plan for U.S. grantees. | ||
Rule 13a-14(a)/15d-14(a) Certification of the company’s and EID’s Principal Executive Officer. | ||
Rule 13a-14(a)/15d-14(a) Certification of the company’s and EID’s Principal Financial Officer. | ||
Section 1350 Certification of the company’s and EID’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended. | ||
Section 1350 Certification of the company’s and EID’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended. | ||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File – The Cover Page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101.INS) | |
CORTEVA, INC. | ||
(Registrant) | ||
Date: | May 7, 2020 | |
By: | /s/ Brian Titus | |
Brian Titus | ||
Vice President, Controller | ||
(Principal Accounting Officer) | ||
E. I. du Pont de Nemours and Company | ||
(Registrant) | ||
Date: | May 7, 2020 | |
By: | /s/ Brian Titus | |
Brian Titus | ||
Vice President, Controller | ||
(Principal Accounting Officer) | ||
Three Months Ended March 31, | ||||||
(In millions, except per share amounts) | 2020 | 2019 | ||||
Net sales | $ | $ | ||||
Cost of goods sold | ||||||
Research and development expense | ||||||
Selling, general and administrative expenses | ||||||
Amortization of intangibles | ||||||
Restructuring and asset related charges - net | ||||||
Integration and separation costs | ||||||
Other income - net | ||||||
Interest expense | ||||||
Income (loss) from continuing operations before income taxes | ( | ) | ||||
Provision for (benefit from) income taxes on continuing operations | ( | ) | ||||
Income (loss) from continuing operations after income taxes | ( | ) | ||||
Income from discontinued operations after income taxes | ||||||
Net income | ||||||
Net income attributable to noncontrolling interests | ||||||
Net income attributable to E. I. du Pont de Nemours and Company | $ | $ | ||||
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Net income | $ | $ | ||||
Other comprehensive loss - net of tax: | ||||||
Cumulative translation adjustments | ( | ) | ( | ) | ||
Adjustments to pension benefit plans | ( | ) | ||||
Adjustments to other benefit plans | ||||||
Derivative instruments | ||||||
Total other comprehensive loss | ( | ) | ( | ) | ||
Comprehensive (loss) income | ( | ) | ||||
Comprehensive income attributable to noncontrolling interests - net of tax | ||||||
Comprehensive (loss) income attributable to E. I. du Pont de Nemours and Company | $ | ( | ) | $ | ||
(In millions, except share amounts) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Assets | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | $ | $ | ||||||
Marketable securities | |||||||||
Accounts and notes receivable - net | |||||||||
Inventories | |||||||||
Other current assets | |||||||||
Assets of discontinued operations - current | |||||||||
Total current assets | |||||||||
Investment in nonconsolidated affiliates | |||||||||
Property, plant and equipment - net of accumulated depreciation (March 31, 2020 - $3,406; December 31, 2019 - $3,326; March 31, 2019 - $2,970) | |||||||||
Goodwill | |||||||||
Other intangible assets | |||||||||
Deferred income taxes | |||||||||
Other assets | |||||||||
Assets of discontinued operations - non-current | |||||||||
Total Assets | $ | $ | $ | ||||||
Liabilities and Equity | |||||||||
Current liabilities | |||||||||
Short-term borrowings and finance lease obligations | $ | $ | $ | ||||||
Accounts payable | |||||||||
Income taxes payable | |||||||||
Accrued and other current liabilities | |||||||||
Liabilities of discontinued operations - current | |||||||||
Total current liabilities | |||||||||
Long-Term Debt | |||||||||
Long-Term Debt - Related Party | |||||||||
Other Noncurrent Liabilities | |||||||||
Deferred income tax liabilities | |||||||||
Pension and other post employment benefits - noncurrent | |||||||||
Other noncurrent obligations | |||||||||
Liabilities of discontinued operations - non-current | |||||||||
Total noncurrent liabilities | |||||||||
Commitments and contingent liabilities | |||||||||
Stockholders’ equity | |||||||||
Preferred stock, without par value – cumulative; 23,000,000 shares authorized; issued at March 31, 2020, December 31, 2019, and March 31, 2019: | |||||||||
$4.50 Series – 1,673,000 shares (callable at $120) | |||||||||
$3.50 Series – 700,000 shares (callable at $102) | |||||||||
Common stock, $0.30 par value; 1,800,000,000 shares authorized; issued at March 31, 2020 - 200, December 31, 2019 - 200, and March 31, 2019 - 100 | |||||||||
Additional paid-in capital | |||||||||
Divisional equity | |||||||||
Accumulated deficit | ( | ) | ( | ) | |||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ( | ) | |||
Total E. I. du Pont de Nemours and Company stockholders’ equity | |||||||||
Noncontrolling interests | |||||||||
Total equity | |||||||||
Total Liabilities and Equity | $ | $ | $ | ||||||
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Operating activities | ||||||
Net income | $ | $ | ||||
Adjustments to reconcile net income to cash used for operating activities: | ||||||
Depreciation and amortization | ||||||
Provision for (benefit from) deferred income tax | ( | ) | ||||
Net periodic pension benefit | ( | ) | ( | ) | ||
Pension contributions | ( | ) | ( | ) | ||
Net loss (gain) on sales of property, businesses, consolidated companies, and investments | ( | ) | ||||
Restructuring and asset related charges - net | ||||||
Amortization of inventory step-up | ||||||
Other net loss | ||||||
Changes in operating assets and liabilities - net | ( | ) | ( | ) | ||
Cash used for operating activities | ( | ) | ( | ) | ||
Investing activities | ||||||
Capital expenditures | ( | ) | ( | ) | ||
Proceeds from sales of property, businesses, and consolidated companies - net of cash divested | ||||||
Proceeds from sales of ownership interests in nonconsolidated affiliates | ||||||
Purchases of investments | ( | ) | ( | ) | ||
Proceeds from sales and maturities of investments | ||||||
Other investing activities - net | ( | ) | ( | ) | ||
Cash used for investing activities | ( | ) | ( | ) | ||
Financing activities | ||||||
Net change in borrowings (less than 90 days) | ||||||
Payments on related party debt | ( | ) | ||||
Proceeds from debt | ||||||
Payments on debt | ( | ) | ( | ) | ||
Proceeds from exercise of stock options | ||||||
Distributions to DowDuPont | ( | ) | ||||
Contributions from Dow | ||||||
Other financing activities | ( | ) | ( | ) | ||
Cash provided by financing activities | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ||||
Increase (decrease) in cash, cash equivalents and restricted cash | ( | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||
(In millions) | Preferred Stock | Common Stock | Add. Paid-in Capital | Divisional Equity | Retained Earnings (Accumulated deficit) | Accum. Other Comp Loss | Treasury Stock | Non-controlling Interests | Total Equity | ||||||||||||||||||
2019 | |||||||||||||||||||||||||||
Balance at January 1, 2019 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||
Net income | |||||||||||||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | |||||||||||||||||||||||
Preferred dividends ($4.50 Series - $1.125 per share, $3.50 Series - $0.875 per share) | ( | ) | ( | ) | |||||||||||||||||||||||
Distributions to DowDuPont | ( | ) | ( | ) | |||||||||||||||||||||||
Share-based compensation | |||||||||||||||||||||||||||
Issuance of DowDuPont stock | |||||||||||||||||||||||||||
Contributions from Dow | |||||||||||||||||||||||||||
Other - net | ( | ) | ( | ) | |||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||
(In millions) | Preferred Stock | Common Stock | Add. Paid-in Capital | Divisional Equity | (Accumulated deficit) Retained Earnings | Accum. Other Comp Loss | Treasury Stock | Non-controlling Interests | Total Equity | ||||||||||||||||
2020 | |||||||||||||||||||||||||
Balance at January 1, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||
Net income | |||||||||||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | |||||||||||||||||||||
Preferred dividends ($4.50 Series - $1.125 per share, $3.50 Series - $0.875 per share) | ( | ) | ( | ) | |||||||||||||||||||||
Issuance of Corteva stock | |||||||||||||||||||||||||
Share-based compensation | |||||||||||||||||||||||||
Other - net | ( | ) | |||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||
E. I. du Pont de Nemours and Company | ||
Notes to the Consolidated Financial Statements (Unaudited) | ||
• | Preferred Stock - EID has preferred stock outstanding to third parties which is accounted for as a non-controlling interest at the Corteva, Inc. level. Each share of EID Preferred Stock - $4.50 Series and EID Preferred Stock - $3.50 Series issued and outstanding at the effective date of the Corteva Distribution remains issued and outstanding as to EID and was unaffected by the Corteva Distribution. |
• | Related Party Loan - EID engaged in a series of debt redemptions during the second quarter of 2019 that were partially funded through an intercompany loan from Corteva, Inc. This was eliminated in consolidation at the Corteva, Inc. level but remains on EID's financial statements at the standalone level (including the associated interest). |
• | Capital Structure - At March 31, 2020, Corteva, Inc.'s capital structure consists of |
• | Note 1 - Summary of Significant Accounting Policies - refer to page 9 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 2 - Recent Accounting Guidance - refer to page 10 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 3 - Divestitures and Other Transactions - refer to page 11 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 4 - Revenue - refer to page 14 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 5 - Restructuring and Asset Related Charges - Net - refer to page 16 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 6 - Related Parties - Differences exist between Corteva, Inc. and EID; refer to EID Note 2 - Related Party Transactions, below |
• | Note 7 - Supplementary Information - refer to page 18 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 8 - Income Taxes - refer to page 20 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 9 - Earnings Per Share of Common Stock - N/A for EID |
• | Note 10 - Accounts and Notes Receivable - Net - refer to page 21 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 11 - Inventories - refer to page 22 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 12 - Other Intangible Assets - refer to page 23 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 13 - Short-Term Borrowings, Long-Term Debt and Available Credit Facilities - refer to page 23 of the Corteva, Inc. interim Consolidated Financial Statements. In addition, EID has a related party loan payable to Corteva, Inc.; refer to EID Note 2 - Related Party Transactions, below |
• | Note 14 - Commitments and Contingent Liabilities - refer to page 25 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 15 - Stockholders' Equity - refer to page 30 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 16 - Pension Plans and Other Post Employment Benefits - refer to page 32 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 17 - Financial Instruments - refer to page 33 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 18 - Fair Value Measurements - refer to page 37 of the Corteva, Inc. interim Consolidated Financial Statements |
• | Note 19 - Segment Information - Differences exist between Corteva, Inc. and EID; refer to EID Note 3 - Segment Information, below |
Income (loss) from continuing operations after income taxes to segment operating EBITDA (In millions) | Three Months Ended March 31, | |||||
2020 | 2019 1 | |||||
Income (loss) from continuing operations after income taxes | $ | $ | ( | ) | ||
Provision for (benefit from) income taxes on continuing operations | ( | ) | ||||
Income (loss) from continuing operations before income taxes | ( | ) | ||||
Depreciation and amortization | ||||||
Interest income | ( | ) | ( | ) | ||
Interest expense | ||||||
Exchange losses - net | ||||||
Non-operating benefits - net | ( | ) | ( | ) | ||
Significant items | ||||||
Pro forma adjustments | ||||||
Corporate expenses | ||||||
Segment operating EBITDA | $ | $ | ||||
1. | Period is presented on a pro forma basis, prepared in accordance with Article 11 of Regulation S-X. |
Dated as of | February 11, 2020 | |
Between | Coöperatieve Rabobank, U.A., New York Branch, MUFG Bank, Ltd., New York Branch, Standard Chartered Bank, acting through its New York branch, HSBC Bank USA, N.A. | |
and | PHI Financial Services, Inc. | |
1. | Applicability |
2. | Definitions |
(a) | “Act of Insolvency”, with respect to any party, (i) the commencement by such party as debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or similar law, or such party seeking the appointment or election of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property, or the convening of any meeting of creditors for purposes of commencing any such case or proceeding or seeking such an appointment or election, (ii) the commencement of any such case or proceeding against such party, or another seeking such an appointment or election, or the filing against a party of an application for a protective decree under the provisions of the Securities Investor Protection Act of 1970, which (A) is consented to or not timely contested by such party, (B) results in the entry of an order for relief, such an appointment or election, the issuance of such a protective decree or the entry of an order having a similar effect, or (C) is not dismissed within 15 days, (iii) the making by such party of a general assignment for the benefit of creditors, or (iv) the admission in writing by such party of such party’s inability to pay such party’s debts as they become due; |
(b) | “Additional Purchased Securities”, Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof; |
(c) | “Buyer’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Buyer’s Margin Percentage to the Repurchase Price for such Transaction as of such date; |
(d) | “Buyer’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Seller’s Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction; |
(e) | “Confirmation”, the meaning specified in Paragraph 3(b) hereof; |
(f) | “Income”, with respect to any Security at any time, any principal thereof and all interest, dividends or other distributions thereon; |
(g) | “Margin Deficit”, the meaning specified in Paragraph 4(a) hereof; |
(h) | “Margin Excess”, the meaning specified in Paragraph 4(b) hereof; |
(i) | “Margin Notice Deadline”, the time agreed to by the parties in the relevant Confirmation, Annex I hereto or otherwise as the deadline for giving notice requiring same-day satisfaction of margin maintenance obligations as provided in Paragraph 4 hereof (or, in the absence of any such agreement, the deadline for such purposes established in accordance with market practice); |
(j) | “Market Value”, with respect to any Securities as of any date, the price for such Securities on such date obtained from a generally recognized source agreed to by the parties or the most recent closing bid quotation from such a source, plus accrued Income to the extent not included therein (other than any Income credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to market practice for such Securities); |
(k) | “Price Differential”, with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction); |
(l) | “Pricing Rate”, the per annum percentage rate for determination of the Price Differential; |
(m) | “Prime Rate”, the prime rate of U.S. commercial banks as published in The Wall Street Journal (or, if more than one such rate is published, the average of such rates); |
(n) | “Purchase Date”, the date on which Purchased Securities are to be transferred by Seller to Buyer; |
(o) | “Purchase Price”, (i) on the Purchase Date, the price at which Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree oth-erwise, such price increased by the amount of any cash transferred by Buyer to Seller pur-suant to Paragraph 4(b) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller’s obligations under clause (ii) of Paragraph 5 hereof; |
(p) | “Purchased Securities”, the Securities transferred by Seller to Buyer in a Transaction here-under, and any Securities substituted therefor in accordance with Paragraph 9 hereof. The term “Purchased Securities” with respect to any Transaction at any time also shall include Additional Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities returned pursuant to Paragraph 4(b) hereof; |
(q) | “Repurchase Date”, the date on which Seller is to repurchase the Purchased Securities from Buyer, including any date determined by application of the provisions of Paragraph 3(c) or 11 hereof; |
(r) | “Repurchase Price”, the price at which Purchased Securities are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination; |
(s) | “Seller’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Seller’s Margin Percentage to the Repurchase Price for such Transaction as of such date; |
(t) | “Seller’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and Seller or, in the absence |
3. | Initiation; Confirmation; Termination |
(a) | An agreement to enter into a Transaction may be made orally or in writing at the initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller. |
(b) | Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed, shall promptly deliver to the other party a written confirmation of each Transaction (a “Confirmation”). The Confirmation shall describe the Purchased Securities (including CUSIP number, if any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent with this Agreement. The Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with respect to the Transaction to which the Confirmation relates, unless with respect to the Confirmation specific objection is made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation and this Agreement, this Agreement shall prevail. |
(c) | In the case of Transactions terminable upon demand, such demand shall be made by Buyer or Seller, no later than such time as is customary in accordance with market practice, by telephone or otherwise on or prior to the business day on which such termination will be effective. On the date specified in such demand, or on the date fixed for termination in the case of Transactions having a fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Securities and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to an account of Buyer. |
4. | Margin Maintenance |
(a) | If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”), then Buyer may by notice to Seller require Seller in such Transactions, at Seller’s option, to transfer to Buyer cash or additional Securities reasonably acceptable to Buyer (“Additional Purchased Securities”), so that the cash and aggregate Market Value of the Purchased Securities, including any such Additional Purchased Securities, will thereupon equal or exceed such aggregate Buyer’s Margin Amount (decreased by the amount of any Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller). |
(b) | If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller’s Margin Amount for all such Transactions at such time (a “Margin Excess”), then Seller may by notice to Buyer require Buyer in such Transactions, at Buyer’s option, to transfer cash or Purchased Securities to Seller, so that the aggregate Market Value of the Purchased Securities, after deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed such aggregate Seller’s Margin Amount (increased by the amount of any Margin Excess as of such date arising from any Transactions in which such Seller is acting as Buyer). |
(c) | If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph at or before the Margin Notice Deadline on any business day, the party receiving such notice shall transfer cash or Additional Purchased Securities as provided in such subparagraph no later than the close of business in the relevant market on such day. If any such notice is given after the Margin Notice Deadline, the party receiving such notice shall transfer such cash or Securities no later than the close of business in the relevant market on the next business day following such notice. |
(d) | Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions as shall be agreed upon by Buyer and Seller. |
(e) | Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions). |
(f) | Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised whenever such a Margin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated without regard to any other Transaction outstanding under this Agreement). |
5. | Income Payments |
6. | Security Interest |
7. | Payment and Transfer |
8. | Segregation of Purchased Securities |
Required Disclosure for Transactions in Which the Seller Retains Custody of the Purchased Securities Seller is not permitted to substitute other securities for those subject to this Agreement and therefore must keep Buyer’s securities segregated at all times, unless in this Agreement Buyer grants Seller the right to substitute other securities. If Buyer grants the right to substitute, this means that Buyer’s securities will likely be commingled with Seller’s own securities during the trading day. Buyer is advised that, during any trading day that Buyer’s securities are commingled with Seller’s securities, they [will]* [may]** be subject to liens granted by Seller to [its clearing bank]* [third parties]** and may be used by Seller for deliveries on other securities transactions. Whenever the securities are commingled, Seller’s ability to resegregate substitute securities for Buyer will be subject to Seller’s ability to satisfy [the clearing]* [any]** lien or to obtain substitute securities. |
9. | Substitution |
(a) | Seller may, subject to agreement with and acceptance by Buyer, substitute other Securities for any Purchased Securities. Such substitution shall be made by transfer to Buyer of such other Securities and transfer to Seller of such Purchased Securities. After substitution, the substituted Securities shall be deemed to be Purchased Securities. |
(b) | In Transactions in which Seller retains custody of Purchased Securities, the parties expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph, to have agreed to and accepted in this Agreement substitution by Seller of other Securities for Purchased Securities; provided, however, that such other Securities shall have a Market Value at least equal to the Market Value of the Purchased Securities for which they are substituted. |
10. | Representations |
11. | Events of Default |
(a) | The nondefaulting party may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). The nondefaulting party shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting party of the exercise of such option as promptly as practicable. |
(b) | In all Transactions in which the defaulting party is acting as Seller, if the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, (i) the defaulting party’s obligations in such Transactions to repurchase all Purchased Securities, |
(c) | In all Transactions in which the defaulting party is acting as Buyer, upon tender by the nondefaulting party of payment of the aggregate Repurchase Prices for all such Transactions, all right, title and interest in and entitlement to all Purchased Securities subject to such Transactions shall be deemed transferred to the nondefaulting party, and the defaulting party shall deliver all such Purchased Securities to the nondefaulting party. |
(d) | If the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the nondefaulting party, without prior notice to the defaulting party, may: |
(i) | as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, any or all Purchased Securities subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such Purchased Securities in an amount equal to the price therefor on such date, obtained from a generally recognized source or the most recent closing bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and |
(ii) | as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, securities (“Replacement Securities”) of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the nondefaulting party as required hereunder or (B) in its sole discretion elect, in lieu of purchasing Replacement Securities, to be deemed to have purchased Replacement Securities at the price therefor on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source. |
(e) | As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the nondefaulting party for any excess of the price paid (or deemed paid) by the nondefaulting party for Replacement Securities over the Repurchase Price for the Purchased Securities replaced thereby and for any amounts payable by the defaulting party under Paragraph 5 hereof or otherwise hereunder. |
(f) | For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of which the defaulting party is acting as Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exercise or deemed exercise by the nondefaulting party of the option referred to in sub-paragraph (a) of this Paragraph. |
(g) | The defaulting party shall be liable to the nondefaulting party for (i) the amount of all reasonable legal or other expenses incurred by the nondefaulting party in connection with or as a result of an |
(h) | To the extent permitted by applicable law, the defaulting party shall be liable to the non-defaulting party for interest on any amounts owing by the defaulting party hereunder, from the date the defaulting party becomes liable for such amounts hereunder until such amounts are (i) paid in full by the defaulting party or (ii) satisfied in full by the exercise of the nondefaulting party’s rights hereunder. Interest on any sum payable by the defaulting party to the nondefaulting party under this Paragraph 11(h) shall be at a rate equal to the greater of the Pricing Rate for the relevant Transaction or the Prime Rate. |
(i) | The nondefaulting party shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law. |
12. | Single Agreement |
13. | Notices and Other Communications |
14. | Entire Agreement; Severability |
15. | Non-assignability; Termination |
(a) | The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by either party without the prior written consent of the other party, and any such assignment without the prior written consent of the other party shall be null and void. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. This Agreement may be terminated by either party upon giving written notice to the other, except that this Agreement shall, notwithstanding such notice, remain applicable to any Transactions then outstanding. |
(b) | Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning, charging or otherwise dealing with all or any part of its interest in any sum payable to it under Paragraph 11 hereof. |
16. | Governing Law |
17. | No Waivers, Etc. |
18. | Use of Employee Plan Assets |
(a) | Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition. |
(b) | By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent to Buyer that since the date of Seller’s latest such financial statements, there has been no material adverse change in Seller’s financial condition which Seller has not dis-closed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any out-standing Transaction involving a Plan Party. |
19. | Intent |
(a) | The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of Securities subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). |
(b) | It is understood that either party’s right to liquidate Securities delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended. |
(c) | The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). |
(d) | It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDI-CIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA). |
20. | Disclosure Relating to Certain Federal Protections |
(a) | in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder. |
(b) | in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SPA will not provide protection to the other party with respect to any Transaction hereunder; and |
(c) | in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable. |
By: | /s/ Vikram Malkani |
Name:Vikram Malkani | |
Title:Managing Director | |
By: | /s/ David Epstein |
Name:David Epstein | |
Title:Vice President | |
By: | /s/ Thomas Giuntini |
Name:Thomas Giuntini | |
Title:Managing Director | |
By: | /s/ Philip Panaino |
Name:Philip Panaino | |
Title:Managing Director | |
By: | /s/ Lauren Steiner |
Name:Lauren Steiner | |
Title:Vice President | |
By: | /s/ Timothy Glenn |
Name:Timothy Glenn | |
Title:President | |
Dated: | [Date] |
To: | PHI Financial Services, Inc. (“Counterparty”) |
Attention: | Documentation |
From: | Coöperatieve Rabobank, U.A., New York Branch (“Rabobank”), as Agent for itself and for MUFG Bank, Ltd., New York Branch (“MUFG”), Standard Chartered Bank, a bank organized and existing under the laws of England and Wales, acting through its New York branch, (“Standard Chartered”) and HSBC Bank USA, N.A., a national banking association organized under the laws of the United States (“HSBC”) |
2. | General Terms: |
Purchase Date: | [Date] |
Purchase Price: | $[ ] |
Buyers: | [Rabobank, MUFG, Standard Chartered and HSBC collectively.] |
Seller: | Counterparty |
Agent: | Rabobank |
Purchased Securities: | Set forth on attached Portfolio Schedule |
Pricing Rate | [ ] |
Repurchase Date: | [Date]1 |
Repurchase Price: | $[ ] |
Price Differential | $[ ] |
3. Security interest: | In accordance with and subject to the terms of the Master Repurchase Agreement, Seller hereby grants to Agent, for the benefit of the Buyers, a first priority security interest in all of Seller’s right, title and interest in and to all loans identified in the Portfolio Schedule applicable to the Transaction evidenced by this Confirmation, all rights to payment arising thereunder, all instruments that may from time to time evidence such loans and all rights arising under the loan agreements governing such loans, whether now existing or hereafter arising, and all proceeds thereof (collectively, the “Collateral”), to secure the Seller’s obligations under the Transaction Agreements (the “Secured Obligations”). Nothing in this paragraph shall be construed as limiting or otherwise modifying the provisions of Paragraph 6 of the Master Repurchase Agreement. |
4. Governing law: | Unless otherwise provided in the Master Repurchase Agreement (in which case the law so specified shall govern), this Confirmation shall be governed by and construed in accordance with the laws as specified in the Master Repurchase Agreement. |
□ | Portfolio Schedule for New Transaction. In accordance with and subject to the terms and conditions of the Master Repurchase Agreement, this schedule constitutes the “Portfolio Schedule” for the Transaction evidenced by Confirmation to which this schedule is attached. |
□ | Amendment and Restatement of Portfolio Schedule. Further reference is made to the Confirmation dated as of __________, entered into in accordance with the Master Repurchase Agreement by Seller and each of the Buyers set forth in such Confirmation. In accordance with and subject to the terms and conditions of the Master Repurchase Agreement, Seller hereby amends and restates the Portfolio Schedule to such Confirmation in its entirety with the information set forth below. |
Loan Balance | # of Loans | Aggregate Market Value | % of Portfolio Market Value | Average Market Value |
0 to 10,000 | ||||
10,001 to 25,000 | ||||
25,001 to 50,000 | ||||
50,001 to 100,000 | ||||
100,001 to 250,000 | ||||
250,001 to 500,000 | ||||
500,001 to 1,000,000 | ||||
1,000,001+ | ||||
CBR Score | # of Loans | % of Loans in Portfolio | Aggregate Market Value | % of Portfolio Market Value |
1-550 | ||||
551-600 | ||||
601-650 | ||||
651-700 | ||||
701-750 | ||||
751-800 | ||||
801+ | ||||
No Score | ||||
Debtor Type | # of Loans | % of Loans in Portfolio | Aggregate Market Value | % of Portfolio Market Value |
Corporation | ||||
Estate (Executor) | ||||
General Partnership | ||||
Individual | ||||
LLC | ||||
LLP | ||||
LP | ||||
Trust | ||||
Unknown | ||||
Loan ID No. | Debtor Type | CBR Score | Origination Date | Maturity Date | Interest Rate | Loan Balance | Market Value |
1. | Interpretation. |
7. | Payment To Agent; Several Obligations And Certain Calculations. |
Coöperatieve Rabobank, U.A., New York Branch | |||
245 Park Avenue | |||
New York, New York 10167 | |||
Attention: | |||
E-Mail: | |||
Coöperatieve Rabobank, U.A., New York Branch | |||
245 Park Avenue | |||
New York, New York 10167 | |||
Attention: | |||
E-Mail: | |||
MUFG Bank, Ltd. | |||
1251 Avenue of the Americas | |||
New York, New York 10020-1104 | |||
Attention: | |||
E-Mail: | |||
The Bank of Tokyo-Mitsubishi UFJ, Ltd. | |||
1251 Avenue of the Americas | |||
New York, NY 10020-1104 | |||
Attention: | |||
E-Mail: | |||
Standard Chartered Bank 2700 Post Oak Boulevard 21st Floor Houston, TX 77056 Attention: Email: |
Standard Chartered Bank 1095 Avenue of the Americas New York, New York 10003 Attention: Email: |
HSBC Securities (USA) Inc. 452 Fifth Avenue New York, New York 10018 Attention : Email : |
PHI Financial Services, Inc. | ||||
7100 NW 62nd Avenue | ||||
P.O. Box 1050 | ||||
Johnston, Iowa 50131 | ||||
Attention: | ||||
E-Mail: | ||||
E. I. du Pont de Nemours and Company | ||||
974 Centre Road | ||||
Chestnut Run Plaza 730/5218 | ||||
Wilmington, Delaware 19805 | ||||
Attention: | ||||
E-Mails: | ||||
Coöperatieve Rabobank, U.A., New York Branch | |
By: | /s/ Vikram Malkani |
Name: | Vikram Malkani |
Title: | Managing Director |
By: | /s/ David Epstein |
Name: | David Epstein |
Title: | Vice President |
MUFG Bank, Ltd., New York Branch | |
By: | /s/ Thomas Giuntini |
Name: | Thomas Giuntini |
Title: | Managing Director |
Standard Chartered Bank, acting through its New York branch | |
By: | /s/ Philip Panaino |
Name: | Philip Panaino |
Title: | Managing Director |
HSBC Bank USA, N.A. | |
By: | /s/ Lauren Steiner |
Name: | Lauren Steiner |
Title: | Vice President |
PHI Financial Services, Inc. | |
By: | /s/ Timothy A. Johnson |
Name: | Timothy A. Johnson |
Title: | Vice President & Treasurer |
□ | Portfolio Schedule for New Transaction. In accordance with and subject to the terms and conditions of the Master Repurchase Agreement, this schedule constitutes the “Portfolio Schedule” for the Transaction evidenced by Confirmation to which this schedule is attached. |
□ | Amendment and Restatement of Portfolio Schedule. Further reference is made to the Confirmation dated as of __________, entered into in accordance with the Master Repurchase Agreement by Seller and each of the Buyers set forth in such Confirmation. In accordance with and subject to the terms and conditions of the Master Repurchase Agreement, Seller hereby amends and restates the Portfolio Schedule to such Confirmation in its entirety with the information set forth below. |
Loan Balance | # of Loans | Aggregate Market Value | % of Portfolio Market Value | Average Market Value |
0 to 10,000 | ||||
10,001 to 25,000 | ||||
25,001 to 50,000 | ||||
50,001 to 100,000 | ||||
100,001 to 250,000 | ||||
250,001 to 500,000 | ||||
500,001 to 1,000,000 | ||||
1,000,001+ | ||||
CBR Score | # of Loans | % of Loans in Portfolio | Aggregate Market Value | % of Portfolio Market Value |
1-550 | ||||
551-600 | ||||
601-650 | ||||
651-700 | ||||
701-750 | ||||
751-800 | ||||
801+ | ||||
No Score | ||||
Debtor Type | # of Loans | % of Loans in Portfolio | Aggregate Market Value | % of Portfolio Market Value |
Corporation | ||||
Estate (Executor) | ||||
General Partnership | ||||
Individual | ||||
LLC | ||||
LLP | ||||
LP | ||||
Trust | ||||
Unknown | ||||
Loan ID No. | Debtor Type | CBR Score | Origination Date | Maturity Date | Interest Rate | Loan Balance | Market Value |
Introduction / Grant of Award | You have been granted stock options under the Corteva, Inc. 2019 Omnibus Incentive Plan (“Plan”), subject to the following Award Terms. This grant is also subject to the terms of the Plan, which is hereby incorporated by reference. However, to the extent that an Award Term conflicts with the Plan, the Plan shall govern. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in these Award Terms, including any appendices to these Award Terms (hereinafter, collectively referred to as the “Agreement”). A copy of the Plan, and other Plan-related materials, such as the Plan prospectus, are available at: www.benefits.ml.com |
Grant Award Acceptance | You must expressly accept the terms and conditions of your Award as set forth in this Agreement. To accept, log on to Merrill Lynch Benefits OnLine at www.benefits.ml.com, select Equity Plan > Grant Information > Pending Acceptance. If you do not accept your Award in the manner instructed by the Company, your Award will be subject to cancellation. |
Date of Grant | DATE (“Date of Grant”) |
Type of Options | Non-qualified stock options (“Options”) |
Exercise Price | $XX.XX |
Expiration Date | The Options will expire on [the day prior to the 10th anniversary of the Date of Grant] (“Expiration Date”), unless the Options expire or otherwise terminate at an earlier date pursuant to this Agreement. |
Vesting Schedule | Except as otherwise provided in this Agreement, the Options will vest and become exercisable as follows: One-third (1/3) of the Options (rounded to a whole number of shares) will vest and become exercisable on [1st anniversary of Date of Grant]. One-third (1/3) of the Options (rounded to a whole number of shares) will vest and become exercisable on [2nd anniversary of Date of Grant]. The remaining Options will vest and become exercisable on [3rd anniversary of Date of Grant]. |
Under 55/10 Rule | If you terminate employment after attainment of age 55 with at least 10 years of service and you are an active employee for six months following the Date of Grant, any unvested Options as of the date of termination will continue to vest in accordance with the Vesting Schedule set forth above for one year after the date of your termination of employment and all other remaining unvested Options will be forfeited. Vested Options will be exercisable through the date that is one year after the date of your termination of employment, or, if earlier, the Expiration Date. After that date, all unexercised Options, whether or not vested, will expire. | |
Due to Involuntary Termination Giving Rise to Severance Benefits, Divestiture to Entity Less Than 50% Owned by Corteva, Inc. or Voluntary Termination with Good Reason | Any unvested Options as of the date of termination will continue to vest in accordance with the Vesting Schedule set forth above for one year after the date of your termination of employment. When one year from the termination date of employment is reached, all other remaining unvested Options will be forfeited. Vested Options will be exercisable through the date that is one year after the date of your termination of employment, or, if earlier, the Expiration Date. After that date, all unexercised Options, whether or not vested, will expire. | |
Due to Death or Disability | Any unvested Options as of the date of termination will be automatically vested. Vested Options will be exercisable through the date that is two years after the date of your termination of employment, or, if earlier, the Expiration Date. After that date, all unexercised Options will expire. | |
Due to Any Other Reason (such as Cause; voluntary termination; involuntary termination without cause) | Vested Options must be exercised by the date on which you terminate employment. After that date, all Options, whether or not vested, will expire. | |
For purposes of this Agreement, transfer of employment among the Company and any of its Affiliates is not a termination of employment. | ||
Restricted Conduct | If you engage in any of the conduct described in subparagraphs (i) through (iv) below for any reason, in addition to all other remedies in law and/or equity available to the Company: (1) you shall forfeit all Options (whether or not vested) and shall immediately pay to the Company, with respect to previously exercised Options, an amount equal to (x) the per share Fair Market Value of the Common Stock on the date on which the Common Stock was issued with respect to the applicable previously exercised Options times (y) the number of Shares underlying such previously exercised Options, without regard to any Tax-Related Items (as defined below) that may have been deducted from such amount; (2) the Company shall be entitled to monetary damages incurred as a result of such conduct; (3) the Company shall be entitled to injunctions, both preliminary and permanent, enjoining or restraining such conduct; and (4) the Company shall be entitled to all reasonable sums and costs, including attorneys’ fees, incurred to defend or enforce the provisions of this Agreement. |
Applicable Policies | This Award shall be subject to the Company’s clawback policy; the Corteva, Inc. Insider Trading Policy, including the anti-hedging and anti-pledging provisions thereunder; and/or share ownership guidelines (in each case as they may be amended from time to time), the terms of which are incorporated herein by reference. |
Repayment/ | Any benefits you may receive hereunder shall be subject to repayment or |
Forfeiture | forfeiture as may be required to comply with the requirements of the U.S. Securities and Exchange Commission or any applicable law, including the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any securities exchange on which the Shares are traded, as may be in effect from time to time. |
Exercise Methods | There are four exercise methods from which to choose. Due to local legal requirements, not all methods are available in all countries. |
Withholding | You acknowledge that the Company or, if different, your employer (the “Employer”) (1) make no representations or undertakings regarding the treatment of any income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Plan and legally applicable to you (“Tax-Related Items”) in connection with any aspect of the Options, including, but not limited to, the grant, vesting or exercise of the Options, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Options to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
Non-transferability | You may not transfer these Options, except by will or laws of descent and distribution. The Options are exercisable during your lifetime only by you or your guardian or legal representative. |
Severability | The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. |
Waiver | You acknowledge that a waiver by the Company or breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant. |
Privacy | In relation to this Agreement, the Company may collect, use, transfer and share your personal information, such as your name, contact information and banking information. The Company may share personal information with its Affiliates and selected third parties outside of your country of residence, including the United States, which may have data protection rules that are different from those of your country, to perform this Agreement and for purposes consistent with our privacy statement: https://www.corteva.com/privacy.html. |
Imposition of Other | The Company reserves the right to impose other requirements on your |
Requirements | participation in this Agreement, on the Options and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
Introduction | You have been granted performance-based Restricted Stock Units (“Units”) under the Corteva, Inc. 2019 Omnibus Incentive Plan (“Plan”), subject to the following Award Terms. This grant is also subject to the terms of the Plan, which is hereby incorporated by reference. However, to the extent that an Award Term conflicts with the Plan, the Plan shall govern. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in these Award Terms, including any appendices to these Award Terms (hereinafter, collectively referred to as the “Agreement”). A copy of the Plan, and other Plan-related materials, such as the Plan prospectus, are available at: www.benefits.ml.com |
Acceptance | You must expressly accept the terms and conditions of your Award as set forth in this Agreement. To accept, log on to Merrill Lynch Benefits OnLine at www.benefits.ml.com, select Equity Plan > Grant Information > Pending Acceptance. If you do not accept your Units in the manner instructed by the Company, your Units will be subject to cancellation. |
Dividend Equivalents | Dividends payable on the Shares represented by your Units (including whole and fractional Units) will be allocated to your account in the form of Units based upon the closing Share price on the date of the dividend payment. Such Units will be subject to the vesting terms set forth below and all other terms set forth in the Agreement. Dividend equivalent units will be determined after the end of the applicable performance period (“Performance Period”) and credited to your account at that time based on the performance-adjusted number of Units in your account. Dividend equivalent units will be calculated by taking the final performance-adjusted Units and calculating the dividend equivalent units for the first dividend payment date for the Performance Period. The resulting number of dividend equivalent units from the first dividend payment date will be added to the final performance-adjusted number of Units before calculating the dividend equivalent units for the second dividend payment date during the Performance Period. This process will be repeated for each subsequent dividend payment date during the Performance Period. |
Performance Period | January [Year of Grant] - December [Year of Grant Plus Two Years] |
Vesting Terms | You may not sell, gift, or otherwise transfer or dispose of any of the Units. |
Performance Metrics | The total number of Units subject to the Award that will be eligible to vest will be based upon the attainment level of the performance goals related to the Company’s (a) Return on Invested Capital (“ROIC”) (as defined below) and (b) Operating Earnings Per Share (“EPS”) Growth (as defined below), in each case, during the Performance Period. The performance attainment level and percent of target payout will be determined independently for each metric, and the two metrics will be weighted differently in determining the final total number of Units that are eligible to vest (the “Final Award”). The ROIC performance goal is weighted at 50% and the Operating EPS Growth performance goal is weighted at 50%. |
ROIC Payout % x Target Award x 50% | + | Operating EPS Growth Payout % x Target Award x 50% | = | Final Award |
Performance | ROIC Average (%) | ROIC Payout % |
Below Threshold | ||
Threshold | ||
Target | ||
Maximum | ||
• | Based on the table above, the Company’s average ROIC during the Performance Period is translated into a percentage payout (of the target) for 50% of the Units subject to the Award. |
A = | Operating Earnings Per Share as reported at the end of a fiscal year, minus Operating Earnings Per Share as reported at the end of the prior fiscal year |
B = | A / Operating Earnings Per Share as reported at the end of the prior fiscal year |
Performance | Operating EPS Growth Average | Operating EPS Growth Payout % |
Below Threshold | ||
Threshold | ||
Target | ||
Maximum | ||
• | Based on the table above, the Company’s average Operating EPS Growth during the Performance Period is translated into a percentage payout (of the target) for 50% of the Units subject to the Award. |
Adjustment | The Committee, in its sole and absolute discretion, may make appropriate and equitable adjustments to the performance goal measurement or the method applied to calculate such measurement or determine the underlying performance metric, in the event of or in connection with, among other items: (i) tax adjustments, (ii) a merger or acquisition or any similar event affecting the Shares or other securities of the Company, (iii) debt incurred relative to pension funding (whether required or driven by de-risking strategies), (iv) the impact of any new accounting standards, and (v) items associated with discontinued operations. |
Payment | Within 70 days following the last day of the Performance Period, vested Units (including dividend equivalents accruing after the end of the Performance Period and prior to the payment date), if any, will be paid to you or your estate, as applicable, in one Share for each whole Unit and a cash payment for any fraction of a Unit. The value of each fractional Unit will be based on the average of the high and low sale prices of Shares as reported on the Composite Tape of the New York Stock Exchange as of the effective date of payment. |
the Code | The Units are intended to be exempt from or compliant with Section 409A of the Code and the U.S. Treasury Regulations relating thereto so as not to subject you to the payment of additional taxes and interest under Section 409A of the Code or other adverse tax consequences. In furtherance of this intent, the provisions of this Agreement will be interpreted, operated, and administered in a manner consistent with these intentions. The Committee may modify the terms of this Agreement, the Plan or both, without your consent, in the manner that the Committee may determine to be necessary or advisable in order to comply with Section 409A of the Code or to mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply under Section 409A of the Code if compliance is not practical. This section does not create an obligation on the part of the Company to modify the terms of this Agreement or the Plan and does not guarantee that the Units or the delivery of Shares upon vesting/settlement of the Units will not be subject to taxes, interest and penalties or any other adverse tax consequences under Section 409A of the Code. In no event whatsoever shall the Company be liable to any party for any additional tax, interest or penalties that may be imposed on you by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. |
Under 55/10 Rule, Due to Disability or Death, Divestiture to Entity Less Than 50% Owned by the Company, or Involuntary Termination Giving Rise to Severance Benefits | If you are an active employee for six months following the Date of Grant and terminate employment (i) after attainment of age 55 with at least 10 years of service; or due to (ii) disability; (iii) death; (iv) liquidation, dissolution or divestiture to an entity less than 50% owned by the Company; or (v) an involuntary termination by the Company or, if different, your employer (the “Employer”) which gives rise to the payment of severance benefits under a plan maintained by the Company, the Units will remain subject to the Vesting Terms and will be paid in accordance with the Payment terms above. However, the number of Units will be prorated based on the number of months you were employed from the Date of Grant through the end of the Performance Period. | |
Due to Any Other Reason (including for Cause; Voluntary Termination; or Involuntary Termination Without Severance Benefits) | Units will be forfeited as of the date on which you terminate employment. | |
Restricted Conduct | If you engage in any of the conduct described in subparagraphs (i) through (v) below for any reason, in addition to all remedies in law and/or equity available to the Company or any Subsidiary or Affiliate, you shall forfeit all Units. For purposes of subparagraphs (i) through (v) below, “Company” shall mean Corteva, Inc. and/or any of its Subsidiaries or Affiliates. |
Applicable Policies | This Award shall be subject to the Company’s clawback policy; the Corteva, Inc. Insider Trading Policy, including the anti-hedging and anti-pledging provisions thereunder; and/or share ownership guidelines, if any, (in each case as they may be amended from time to time), the terms of which are incorporated herein by reference. |
Forfeiture | Any benefits you may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with the requirements of the U.S. Securities and Exchange Commission or any applicable law, including the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any securities exchange on which the Shares are traded, as may be in effect from time to time. |
Withholding | You acknowledge that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Plan and legally applicable to you (“Tax-Related Items”) in connection with any aspect of the Units, including, but not limited to, the grant, vesting or settlement of the Units, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalent units; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Units to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
Severability | The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. |
Waiver | You acknowledge that a waiver by the Company or breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant. |
Privacy | In relation to this Agreement, the Company may collect, use, transfer and share your personal information, such as your name, contact information and banking information. The Company may share personal information with its Affiliates and selected third parties outside of your country of residence, including the United States, which may have data protection rules that are different from those of your country, to perform this Agreement and for purposes consistent with our privacy statement: https://www.corteva.com/privacy.html. |
Market Abuse Laws | You may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the Shares are listed and in applicable jurisdictions including the United States and your country or your broker's country, if different, which may affect your ability to accept, acquire, sell or otherwise dispose of Shares, rights to Shares (e.g., Units) or rights linked to the value of Shares under the Plan during such times as you are considered to have "inside information" regarding the Company (as defined by Applicable Laws). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (a) disclosing the inside information to any third party and (b) "tipping" third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Corteva, Inc Insider Trading Policy. You acknowledge that it is your responsibility to comply with any applicable restrictions, and you should speak to your personal advisor on this matter. |
Other Requirements | The Company reserves the right to impose other requirements on your participation in this Agreement, on the Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
of Award | You have been granted time-vested Restricted Stock Units under the Corteva, Inc. 2019 Omnibus Incentive Plan (“Plan”), subject to the following Award Terms. This grant is also subject to the terms of the Plan, which is hereby incorporated by reference. However, to the extent that an Award Term conflicts with the Plan, the Plan shall govern. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in these Award Terms, including any appendices to these Award Terms (hereinafter, collectively referred to as the “Agreement”). A copy of the Plan, and other Plan-related materials, such as the Plan prospectus, are available at: www.benefits.ml.com |
Acceptance | You must expressly accept the terms and conditions of your Award as set forth in this Agreement. To accept, log on to Merrill Lynch Benefits OnLine at www.benefits.ml.com, select Equity Plan > Grant Information > Pending Acceptance. |
Dividend Equivalents | Dividends payable on the Shares represented by your Restricted Stock Units (including whole and fractional Restricted Stock Units) will be allocated to your account in the form of additional Restricted Stock Units based upon the closing Share price on the date of the dividend payment. Dividend Equivalents will not vest until such time as the underlying Award vests. |
Restricted Period | You may not sell, gift, or otherwise transfer or dispose of any of the Restricted Stock Units during the “Restricted Period.” The Restricted Period commences on the Date of Grant and lapses as set forth herein. |
Under 55/10 Rule | If you terminate employment after attainment of age 55 with at least 10 years of service and you are an active employee for six months following the Date of Grant, the Restricted Stock Units will remain subject to the Restricted Period set forth above for one year from the termination date of employment. When one year from the termination date of employment is reached, all other remaining unvested units will be forfeited. | |
Due to Disability, or Death | The Restricted Period on all units will lapse. | |
Due to Involuntary Termination Giving Rise to Severance Benefits or Divestiture to Entity Less Than 50% Owned by Corteva, Inc. | The Restricted Stock Units will remain subject to the Restricted Period set forth above for one year from the termination date of employment. When one year from the termination date of employment is reached, all other remaining unvested units will be forfeited. | |
Due to Any Other Reason (such as voluntary termination, involuntary termination without severance benefits, or for Cause) | Restricted Stock Units that are subject to a Restricted Period will be forfeited. | |
Payment | In the case of termination due to involuntary termination giving rise to severance benefits or divestiture to an entity less than 50% owned by Corteva, Inc. which occurs on or following the attainment of age 55 with at least 10 years of Service, Restricted Stock Units shall be paid to you when the Restricted Period lapses in accordance with the schedule set forth under “Restricted Period.” In the case of termination due to involuntary termination giving rise to severance benefits or divestiture to an entity less than 50% owned by Corteva, Inc. which occurs prior to attainment of age 55 with at least 10 years of Service or due to Disability or death, Restricted Stock Units shall be paid to you or your estate, as applicable, within seventy days of the date on which the Restricted Period lapses as a result of the termination. Restricted Stock Units are payable in one Share for each whole Restricted Stock Unit and a cash payment for any fraction of a Restricted Stock Unit. The value of each fractional Restricted Stock Unit will be based on the average of the high and low sale price of Shares as reported on the effective date of payment. |
of the Code | To the extent that an amount that is considered “nonqualified deferred compensation” subject to Section 409A of the Code (“deferred compensation”) is payable on, or by reference to, the date of your termination of employment, no amounts shall be paid hereunder on account thereof unless such termination of employment constitutes a “separation from service,” within the meaning of Section 409A of the Code. If you are a “specified employee,” within the meaning of Section 409A of the Code, no amount that is deferred compensation shall be paid or delivered, on , or by reference to, the date of your separation from service, earlier than the date that is six months after such separation from service. Amounts otherwise payable during that six-month period shall be paid on the date that is six months and one day after your separation from service. If an amount that constitutes deferred compensation is payable upon a Disability that does not constitute a "disability" within the meaning of Section 409A of the Code, it shall be paid to you when the Restricted Period lapses in accordance with the schedule set forth under “Restricted Period.” |
Restricted Conduct | If you engage in any of the conduct described in subparagraphs (i) through (v) below for any reason, in addition to all remedies in law and/or equity available to the Company: (1) you shall forfeit all Restricted Stock Units (whether or not vested) and shall immediately pay to the Company, with respect to previously vested Restricted Stock Units, a cash amount equal to the Fair Market Value of the Stock plus the cash payment for any fraction of a Restricted Stock Unit received, without regard to any Tax-Related Items (as defined below) that may have been deducted from such amount; (2) the Company shall be entitled to monetary damages incurred as a result of such conduct; (3) the Company shall be entitled to injunctions, both preliminary and permanent, enjoining or restraining such conduct; and (4) the Company shall be entitled to all reasonable sums and costs, including attorneys’ fees, incurred to defend or enforce the provisions of this Agreement. |
Applicable Policies | This Award shall be subject to the Company’s clawback policy; Corteva, Inc. Insider Trading Policy, including the anti-hedging and anti-pledging provisions thereunder; and/or share ownership guidelines (in each case as they may be amended from time to time), the terms of which are incorporated herein by reference. |
Forfeiture | Any benefits you may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with the requirements of the U.S. Securities and Exchange Commission or any applicable law, including the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any securities exchange on which the Shares are traded, as may be in effect from time to time. |
Withholding | You acknowledge that the Company or, if different, your employer (the “Employer”) (1) make no representations or undertakings regarding the treatment of any income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Plan and legally applicable to you (“Tax-Related Items”) in connection with any aspect of the Restricted Stock Units, including, but not limited to, the grant, vesting or settlement of the Restricted Stock Units, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Restricted Stock Units to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
Severability | The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. |
Waiver | You acknowledge that a waiver by the Company or breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant. |
Privacy | In relation to this Agreement, the Company may collect, use, transfer and share your personal information, such as your name, contact information and banking information. The Company may share personal information with its Affiliates and selected third parties outside of your country of residence, including the United States, which may have data protection rules that are different from those of your country, to perform this Agreement and for purposes consistent with our privacy statement: https://www.corteva.com/privacy.html. |
Market Abuse Laws | You may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the Shares are listed and in applicable jurisdictions including the United States and your country or your broker's country, if different, which may affect your ability to accept, acquire, sell or otherwise dispose of Shares, rights to Shares (e.g., Restricted Stock Units) or rights linked to the value of Shares under the Plan during such times as you are considered to have "inside information" regarding the Company (as defined by Applicable Laws). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (a) disclosing the inside information to any third party and (b) "tipping" third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Corteva, Inc. Insider Trading Policy. You acknowledge that it is your responsibility to comply with any applicable restrictions, and you should speak to your personal advisor on this matter. |
Requirements | The Company reserves the right to impose other requirements on your participation in this Agreement, on the Restricted Stock Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
1. | I have reviewed this report on Form 10-Q for the period ended March 31, 2020 of Corteva, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 7, 2020 | |||
By: | /s/ James C. Collins, Jr. | |||
James C. Collins, Jr. | ||||
Chief Executive Officer | ||||
1. | I have reviewed this report on Form 10-Q for the period ended March 31, 2020 of E. I. du Pont de Nemours and Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 7, 2020 | |||
By: | /s/ James C. Collins, Jr. | |||
James C. Collins, Jr. | ||||
Chief Executive Officer | ||||
1. | I have reviewed this report on Form 10-Q for the period ended March 31, 2020 of Corteva, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 7, 2020 | |||
By: | /s/ Gregory R. Friedman | |||
Gregory R. Friedman | ||||
Executive Vice President and Chief Financial Officer | ||||
1. | I have reviewed this report on Form 10-Q for the period ended March 31, 2020 of E. I. du Pont de Nemours and Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 7, 2020 | |||
By: | /s/ Gregory R. Friedman | |||
Gregory R. Friedman | ||||
Executive Vice President and Chief Financial Officer | ||||
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ James C. Collins, Jr. |
James C. Collins, Jr. |
Chief Executive Officer |
May 7, 2020 |
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of E. I. du Pont de Nemours and Company. |
/s/ James C. Collins, Jr. |
James C. Collins, Jr. |
Chief Executive Officer |
May 7, 2020 |
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Gregory R. Friedman |
Gregory R. Friedman |
Chief Financial Officer |
May 7, 2020 |
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of E. I. du Pont de Nemours and Company. |
/s/ Gregory R. Friedman |
Gregory R. Friedman |
Chief Financial Officer |
May 7, 2020 |
Earnings Per Share Net Income for Earnings Per Share Calculations - Basic and Diluted (Details) - USD ($) $ in Millions |
3 Months Ended | ||||
|---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
||||
| Earnings Per Share [Abstract] | |||||
| Income (loss) from continuing operations after income taxes | $ 281 | $ (184) | [1] | ||
| Net income Attributable to Noncontrolling Interest, Continuing Operations | 10 | 8 | |||
| Net income (loss) from Continuing Operations Available to Common Shareholders | 271 | (192) | |||
| Income from discontinued operations after income taxes | 1 | 360 | |||
| Income from Discontinued Operations, Attributable to Noncontrolling Interest | 0 | 4 | |||
| Net Income from Discontinued Operations Available to Common Shareholders | 1 | 356 | |||
| Net income Available to Common Stockholders | $ 272 | $ 164 | |||
| |||||
Segment Reporting Segment Reconciliation (Details) - USD ($) $ in Millions |
3 Months Ended | ||||
|---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
||||
| Segment Reporting Information [Line Items] | |||||
| Income (loss) from Continuing Operations After Taxes | $ 281 | $ (184) | [1] | ||
| Provision for (benefit from) income taxes on continuing operations | 127 | (67) | [1] | ||
| Income (loss) from continuing operations before income taxes | 408 | (251) | [1] | ||
| Depreciation and Amortization | 283 | 258 | [1] | ||
| Interest income | 18 | 16 | |||
| Interest Expense | 10 | 59 | [1] | ||
| Exchange losses - net | (61) | (27) | |||
| Non-operating benefits - net | (73) | (42) | [1] | ||
| Significant Items | 123 | 185 | [1] | ||
| Pro forma adjustments | [1] | 298 | |||
| Corporate Expenses | 25 | 27 | [1] | ||
| Segment operating EBITDA | 819 | 545 | [1] | ||
| Segment Reconciling Items [Member] | |||||
| Segment Reporting Information [Line Items] | |||||
| Interest income | (18) | (16) | [1] | ||
| Exchange losses - net | 61 | 27 | [1] | ||
| Significant Items | $ (123) | $ (185) | |||
| |||||
Restructuring and Asset Related Charges Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring and Asset Related Charges - Net | $ 70 | $ 61 |
| Reduced Employee Expenses [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Accelerated Prepaid Royalty Amortization Expense | $ 10 | |
Financial Instruments Fair Value of Derivatives (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
||
|---|---|---|---|---|---|
| Derivative Instruments, Gain (Loss) [Line Items] | |||||
| Derivative Asset, Gross | $ 266 | $ 25 | $ 45 | ||
| Derivative Asset, Counterparty and Cash Collateral Netting | [1] | (110) | (18) | (11) | |
| Derivative Asset, Net | 156 | 7 | 34 | ||
| Derivative Liability, Gross | 108 | 43 | 10 | ||
| Derivative Liability, Counterparty and Cash Collateral Netting | [1] | (103) | (16) | (10) | |
| Derivative Liability, Net | 5 | 27 | 0 | ||
| Designated as Hedging Instrument [Member] | Foreign Currency Contract [Member] | Other Current Assets [Member] | |||||
| Derivative Instruments, Gain (Loss) [Line Items] | |||||
| Derivative Asset, Gross | 36 | ||||
| Derivative Asset, Counterparty and Cash Collateral Netting | [1] | 0 | |||
| Derivative Asset, Net | 36 | ||||
| Not Designated as Hedging Instrument [Member] | Foreign Currency Contract [Member] | Other Current Assets [Member] | |||||
| Derivative Instruments, Gain (Loss) [Line Items] | |||||
| Derivative Asset, Gross | 230 | 25 | 45 | ||
| Derivative Asset, Counterparty and Cash Collateral Netting | [1] | (110) | (18) | (11) | |
| Derivative Asset, Net | 120 | 7 | 34 | ||
| Not Designated as Hedging Instrument [Member] | Foreign Currency Contract [Member] | Accrued and Other Current Liabilities [Member] | |||||
| Derivative Instruments, Gain (Loss) [Line Items] | |||||
| Derivative Liability, Gross | 108 | 43 | 10 | ||
| Derivative Liability, Counterparty and Cash Collateral Netting | [1] | (103) | (16) | (10) | |
| Derivative Liability, Net | $ 5 | $ 27 | $ 0 | ||
| |||||
Supplementary Information Foreign Currency Exchange Gain (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
| Foreign Currency Exchange Gain (Loss) [Line Items] | ||
| Pre-tax exchange (losses) gains - net | $ (61) | $ (27) |
| Foreign Currency Transaction (Loss) Gain Tax (Expense) Benefit | (17) | (6) |
| Foreign Currency Transaction (Loss) Gain After Tax | (78) | (33) |
| Subsidiary Monetary Position | ||
| Foreign Currency Exchange Gain (Loss) [Line Items] | ||
| Pre-tax exchange (losses) gains - net | (226) | (10) |
| Foreign Currency Transaction (Loss) Gain Tax (Expense) Benefit | 23 | (10) |
| Foreign Currency Transaction (Loss) Gain After Tax | (203) | (20) |
| Hedging Program [Member] | ||
| Foreign Currency Exchange Gain (Loss) [Line Items] | ||
| Pre-tax exchange (losses) gains - net | 165 | (17) |
| Foreign Currency Transaction (Loss) Gain Tax (Expense) Benefit | (40) | 4 |
| Foreign Currency Transaction (Loss) Gain After Tax | $ 125 | $ (13) |
Fair Value Measurements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value of Assets and Liabilities Measured on Recurring Basis |
2. See Note 17 - Financial Instruments for the classification of derivatives in the interim Condensed Consolidated Balance Sheets.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingent Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Environmental Loss Contingencies by Site [Table Text Block] |
3. Accrual balance represents management’s best estimate of the costs of remediation and restoration, although it is reasonably possible that the potential exposure, as indicated, could range above the amounts accrued, as there are inherent uncertainties in these estimates.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Operations - USD ($) $ in Millions |
3 Months Ended | ||||
|---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
||||
| Net Sales | $ 3,956 | $ 3,396 | |||
| Cost of Goods Sold | 2,269 | 2,211 | |||
| Research and Development Expense | 280 | 299 | |||
| Selling, General and Administrative Expenses | 757 | 735 | |||
| Amortization of Intangible Assets | 163 | 101 | |||
| Restructuring and Asset Related Charges - Net | 70 | 61 | |||
| Integration and Separation Costs | 0 | 212 | |||
| Other income - net | 1 | 31 | |||
| Interest Expense | 10 | 59 | [1] | ||
| Income (loss) from continuing operations before income taxes | 408 | (251) | [1] | ||
| Provision for (benefit from) income taxes on continuing operations | 127 | (67) | [1] | ||
| Income (loss) from continuing operations after income taxes | 281 | (184) | [1] | ||
| Income from discontinued operations after income taxes | 1 | 360 | |||
| Net income | 282 | 176 | |||
| Net income attributable to noncontrolling interests | 10 | 12 | |||
| Net income attributable to company | $ 272 | $ 164 | |||
| Basic earnings (loss) per share of common stock from continuing operations | $ 0.36 | $ (0.26) | |||
| Basic earnings per share of common stock from discontinued operations | 0 | 0.48 | |||
| Basic earnings per share of common stock | 0.36 | 0.22 | |||
| Diluted earnings (loss) per share of common stock from continuing operations | 0.36 | (0.26) | |||
| Diluted earnings per share of common stock from discontinued operations | 0 | 0.48 | |||
| Diluted earnings per share of common stock | $ 0.36 | $ 0.22 | |||
| EID [Member] | |||||
| Net Sales | $ 3,956 | $ 3,396 | |||
| Cost of Goods Sold | 2,269 | 2,211 | |||
| Research and Development Expense | 280 | 299 | |||
| Selling, General and Administrative Expenses | 757 | 735 | |||
| Amortization of Intangible Assets | 163 | 101 | |||
| Restructuring and Asset Related Charges - Net | 70 | 61 | |||
| Integration and Separation Costs | 0 | 212 | |||
| Other income - net | 1 | 31 | |||
| Interest Expense | 42 | 59 | |||
| Income (loss) from continuing operations before income taxes | 376 | (251) | |||
| Provision for (benefit from) income taxes on continuing operations | 119 | (67) | |||
| Income (loss) from continuing operations after income taxes | 257 | (184) | |||
| Income from discontinued operations after income taxes | 1 | 360 | |||
| Net income | 258 | 176 | |||
| Net income attributable to noncontrolling interests | 8 | 10 | |||
| Net income attributable to company | $ 250 | $ 166 | |||
| |||||
Commitments and Contingent Liabilities |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS AND CONTINGENT LIABILITIES Guarantees Indemnifications In connection with acquisitions and divestitures as of March 31, 2020, the company has indemnified respective parties against certain liabilities that may arise in connection with these transactions and business activities prior to the completion of the transactions. The term of these indemnifications, which typically pertain to environmental, tax and product liabilities, is generally indefinite. In addition, the company indemnifies its duly elected or appointed directors and officers to the fullest extent permitted by Delaware law, against liabilities incurred as a result of their activities for the company, such as adverse judgments relating to litigation matters. If the indemnified party were to incur a liability or have a liability increase as a result of a successful claim, pursuant to the terms of the indemnification, the company would be required to reimburse the indemnified party. The maximum amount of potential future payments is generally unlimited. See pages 26 and 11 for additional information relating to the indemnification obligations under the Chemours Separation Agreement and the Corteva Separation Agreement. Obligations for Customers and Other Third Parties The company has directly guaranteed various debt obligations under agreements with third parties related to customers and other third parties. At March 31, 2020, December 31, 2019 and March 31, 2019, the company had directly guaranteed $90 million, $97 million, and $294 million, respectively, of such obligations. These amounts represent the maximum potential amount of future (undiscounted) payments that the company could be required to make under the guarantees in the event of default by the guaranteed party. Of the total maximum future payments at March 31, 2020, less than $1 million had terms greater than a year. The maximum future payments also include $17 million, $16 million, and $12 million of guarantees related to the various factoring agreements that the company enters into with its customer to sell its trade receivables at March 31, 2020, December 31, 2019 and March 31, 2019, respectively. See Note 10 - Accounts and Notes Receivable, Net, for additional information. The maximum future payments include agreements with lenders to establish programs that provide financing for select customers. The terms of the guarantees are equivalent to the terms of the customer loans that are primarily made to finance customer invoices. The total accounts receivable balance outstanding on these agreements was $125 million, $27 million and $63 million at March 31, 2020, December 31, 2019 and March 31, 2019, respectively. The company assesses the payment/performance risk by assigning default rates based on the duration of the guarantees. These default rates are assigned based on the external credit rating of the counterparty or through internal credit analysis and historical default history for counterparties that do not have published credit ratings. For counterparties without an external rating or available credit history, a cumulative average default rate is used. Litigation The company is subject to various legal proceedings, including, but not limited to, product liability, intellectual property, antitrust, commercial, property damage, personal injury, environmental and regulatory matters arising out of the normal course of its current businesses or legacy EID businesses unrelated to Corteva’s current businesses but allocated to Corteva as part of the separation of Corteva from DuPont. It is not possible to predict the outcome of these various proceedings. Although considerable uncertainty exists, management does not anticipate that the ultimate disposition of these matters will have a material adverse effect on the company's results of operations, consolidated financial position or liquidity. However, the ultimate liabilities could be material to results of operations and the cash flows in the period recognized. Indemnifications under Separation Agreements The company has entered into various agreements where the company is indemnified for certain liabilities. In connection with the recognition of liabilities related to these matters, the company records an indemnification asset when recovery is deemed probable. See Note 3 - Divestitures and Other Transactions, for additional information related to indemnifications. Chemours/Performance Chemicals On July 1, 2015, EID completed the separation of its Performance Chemicals segment through the spin-off of all of the issued and outstanding stock of The Chemours Company (the "Chemours Separation"). In connection with the Chemours Separation, EID and The Chemours Company ("Chemours") entered into a Separation Agreement (the "Chemours Separation Agreement"). Pursuant to the Chemours Separation Agreement and the amendment to the Chemours Separation Agreement, Chemours indemnifies the company against certain litigation, environmental, workers' compensation and other liabilities that arose prior to the distribution. The term of this indemnification is generally indefinite and includes defense costs and expenses, as well as monetary and non-monetary settlements and judgments. Concurrent with the MDL Settlement (as discussed below), EID and Chemours amended the Chemours Separation Agreement to provide for a limited sharing of potential future PFOA liabilities for five years, which began on July 6, 2017. During the five years, Chemours will annually pay the first $25 million of future PFOA liabilities and, if that amount is exceeded, EID will pay any excess amount up to the next $25 million, with Chemours annually bearing any excess liabilities above that amount. At the end of the five years, this limited sharing agreement will expire, and Chemours’ indemnification obligations under the Chemours Separation Agreement will continue unchanged. As part of this amendment, Chemours also agreed that it would not contest its liability for PFOA liabilities on the basis of certain ostensible defenses it had previously raised, including defenses relating to punitive damages, and would waive any such defenses with respect to PFOA liabilities. Chemours has, however, retained defenses as to whether any particular PFOA claim is within the scope of the indemnification provisions of the Chemours Separation Agreement. There have been no charges incurred by the company under this amendment through March 31, 2020. On May 13, 2019, Chemours filed a complaint in the Delaware Court of Chancery ("Chancery Court") against DuPont, Corteva, and EID alleging, among other things, that the litigation and environmental liabilities allocated to Chemours under the Chemours Separation Agreement were underestimated and asking that the Court either limit the amount of Chemours’ indemnification obligations or, alternatively, order the return of the $3.91 billion dividend Chemours paid to EID prior to its separation. On June 3, 2019, the defendants moved to dismiss the complaint on the grounds that the Chemours Separation Agreement requires arbitration of all disputes relating to that agreement. On March 30, 2020, the Chancery Court granted the motion to dismiss made by DuPont, Corteva, and EID. Chemours filed its notice of appeal of the Chancery Court's decision on April 17, 2020. The company believes the probability of liability with respect to Chemours' suit continues to be remote. For additional information regarding environmental indemnification, see discussion on page 29. At March 31, 2020, the indemnification assets pursuant to the Chemours Separation Agreement are $60 million within accounts and notes receivable - net and $294 million within other assets along with the corresponding liabilities of $60 million within accrued and other current liabilities and $294 million within other noncurrent obligations in the interim Condensed Consolidated Balance Sheet. Corteva Separation Agreement On April 1, 2019, in connection with the Dow Distribution, Corteva, DuPont and Dow entered into the Corteva Separation Agreement, the Tax Matters Agreement, the Employee Matters Agreement, and certain other agreements (collectively, the “Corteva Separation Agreements”). The Corteva Separation Agreements allocate among Corteva, DuPont and Dow certain liabilities and obligations among the parties and provides for indemnification obligation among the parties. Under the Corteva Separation Agreements, DuPont will indemnify Corteva against certain litigation, environmental, workers' compensation and other liabilities that arose prior to the Corteva Distribution and (ii) Dow indemnifies Corteva against certain litigation and other liabilities that relate to the Historical Dow business, but were transferred over as part of DAS, and Corteva indemnifies DuPont and Dow for certain liabilities. The term of this indemnification is generally indefinite with exceptions, and includes defense costs and expenses, as well as monetary and non-monetary settlements and judgments. See Note 3 - Divestitures and Other Transactions, for additional information relating to the Separation DuPont Under the Corteva Separation Agreement, certain legacy EID liabilities from discontinued and/or divested operations and businesses of EID (including Performance Chemicals) (a “stray liability”) were allocated to Corteva or DuPont. For those stray liabilities allocated to Corteva (which may include a specified amount of liability associated with that liability), Corteva is responsible for liabilities in an amount up to that specified amount plus an additional $200 million and, for those stray liabilities allocated to DuPont (which may include a specified amount of liability associated with that liability), DuPont is responsible for liabilities up to a specified amount plus an additional $200 million. Once each company has met the $200 million threshold, Corteva and DuPont will share future liabilities proportionally on the basis of 29% and 71%, respectively; provided, however, that for PFAS, DuPont will manage such liabilities with Corteva and DuPont sharing the costs on a 50% - 50% basis starting from $1 and up to $300 million (with such amount, up to $150 million, to be credited to each company’s $200 million threshold) and once the $300 million threshold is met, then the companies will share proportionally on the basis of 29% and 71% respectively, subject to a $1 million de minimis requirement. Litigation related to legacy EID businesses unrelated to Corteva’s current businesses While it is reasonably possible that the company could incur liabilities related to the litigation related to legacy EID businesses, unrelated to Corteva's current business, as described below, any such liabilities are not expected to be material. PFAS, PFOA, PFOS and Other Related Liabilities For purposes of this report, the term PFOA means collectively perfluorooctanoic acid and its salts, including the ammonium salt and does not distinguish between the two forms, and PFAS, which means per- and polyfluoroalkyl substances, including PFOA, PFOS (perfluorooctanesulfonic acid), GenX and other perfluorinated chemicals and compounds ("PFCs"). EID is a party to various legal proceedings relating to the use of PFOA by its former Performance Chemicals segment. While it is reasonably possible that EID could incur liabilities related to PFOA in excess of amounts accrued, any such liabilities are not expected to be material. As discussed, EID is indemnified by Chemours under the Chemours Separation Agreement, as amended. The company has recorded a liability of $20 million and an indemnification asset of $20 million at March 31, 2020, related to testing drinking water in and around certain former EID sites and offering treatment or an alternative supply of drinking water if tests indicate the presence of PFOA in drinking water at or greater than the national health advisory level established from time to time by the EPA. Leach Settlement and MDL Settlement EID has residual liabilities under its 2004 settlement of a West Virginia state court class action, Leach v. EID, which alleged that PFOA from EID’s former Washington Works facility had contaminated area drinking water supplies and affected the health of area residents. The settlement class has about 80,000 members. In addition to relief that was provided to class members years ago, the settlement requires EID to continue providing PFOA water treatment to six area water districts and private well users and to fund, through an escrow account, up to $235 million for a medical monitoring program for eligible class members. As of March 31, 2020, approximately $2 million had been disbursed from the account since its establishment in 2012 and the remaining balance is approximately $1 million. The Leach settlement permits class members to pursue personal injury claims for six health conditions (and no others) that an expert panel appointed under the settlement reported in 2012 had a “probable link” (as defined in the settlement) with PFOA: pregnancy-induced hypertension, including preeclampsia; kidney cancer; testicular cancer; thyroid disease; ulcerative colitis; and diagnosed high cholesterol. After the panel reported its findings, approximately 3,550 personal injury lawsuits were filed in federal and state courts in Ohio and West Virginia and consolidated in multi-district litigation in the U.S. District Court for the Southern District of Ohio (“MDL”). The MDL was settled in early 2017 for $670.7 million in cash, with Chemours and EID (without indemnification from Chemours) each paying half. Post-MDL Settlement PFOA Personal Injury Claims The MDL settlement did not resolve claims of plaintiffs who did not have claims in the MDL or whose claims are based on diseases first diagnosed after February 11, 2017. At March 31, 2020, approximately 60 lawsuits were pending alleging personal injury, mostly kidney or testicular cancer, from exposure to PFOA through air or water, with nearly all part of the MDL or were not filed on behalf of Leach class members. The first two trials concluded in February 2020. The first trial, a kidney cancer case, resulted in a hung jury, while the second, a testicular cancer case, resulted in a jury verdict of $40 million in compensatory damages and $10 million for loss of consortium. Following entry of the judgment by the court, EID intends to file post-trial motions to reduce the verdict, and to appeal the verdict on the basis of procedural and substantive legal errors made by the trial court. EID believes the merits of the appeal will be successful in reducing the jury verdict or eliminating its liability, in whole or part. Six additional cases are scheduled for trial in August 2020. Other PFOA Matters EID is a party to other PFOA lawsuits that do not involve claims for personal injury. Chemours, pursuant to the Chemours Separation Agreement, is generally defending and indemnifying, with reservation, EID but Chemours has refused the tender of Corteva, Inc.'s defense in the limited actions in which Corteva, Inc. has been named. Chemours has refused to indemnify Corteva, Inc. and EID against any fraudulent conveyance claims associated with these matters. Corteva believes that Chemours is obligated to indemnify Corteva, Inc. under the Chemours Separation Agreement. New York. EID is a defendant in about 60 lawsuits, including a putative class action, brought by persons who live in and around Hoosick Falls, New York. These lawsuits assert claims for medical monitoring and property damage based on alleged PFOA releases from manufacturing facilities owned and operated by co-defendants in Hoosick Falls and allege that EID and 3M supplied some of the materials used at these facilities. EID is also one of more than ten defendants in a lawsuit brought by the Town of East Hampton, New York alleging PFOA and PFOS contamination of the town’s well water. Additionally, EID was served with complaints filed by six water districts in Nassau County, New York alleging that the drinking water they provide to customers is contaminated with PFAS and seeking reimbursement for clean-up costs. New Jersey. At March 31, 2020, two lawsuits were pending, one brought by a local water utility and the second a putative class action, against EID alleging that PFOA from EID’s former Chambers Works facility contaminated drinking water sources. The putative class action was voluntarily dismissed without prejudice by the plaintiff. In late March of 2019, the New Jersey State Attorney General filed four lawsuits against EID, Chemours, 3M and others alleging that operations at and discharges from former EID sites in New Jersey (Chambers Works, Pompton Lakes, Parlin and Repauno) damaged the State’s natural resources. Two of these lawsuits (those involving the Chambers Works and Parlin sites) allege contamination from PFAS. The Ridgewood Water District in New Jersey filed suit in the first quarter 2019 against EID, 3M, Chemours, and Dyneon alleging losses related to the investigation, remediation and monitoring of polyfluorinated surfactants, including PFOA, in water supplies. Alabama / Others. EID is one of more than thirty defendants in a lawsuit by the Alabama water utility alleging contamination from PFCs, including PFOA, used by co-defendant carpet manufacturers to make their products more stain and grease resistant. In addition, the states of Michigan, New Hampshire, South Dakota, and Vermont recently filed lawsuits against EID, Chemours, 3M and others, claiming, among other things, PFC (including PFOA) contamination of groundwater and drinking water. The complaints seek reimbursement for past and future costs to investigate and remediate the alleged contamination and compensation for the loss of value and use of the state’s natural resources. Ohio. EID is a defendant in three lawsuits: an action by the State of Ohio based on alleged damage to natural resources, a putative nationwide class action brought on behalf of anyone who has detectable levels of PFAS in their blood serum, and an action by the City of Dayton claiming losses related to the investigation, remediation and monitoring of PFAS in water supplies. Aqueous Firefighting Foams. Approximately 530 cases have been filed against 3M and other defendants, including EID and Chemours, and more recently also including Corteva and DuPont, alleging PFOS or PFOA contamination of soil and groundwater from the use of aqueous firefighting foams. Most of those cases claim some form of property damage and seek to recover the costs of responding to this contamination and damages for the loss of use and enjoyment of property and diminution in value. Most of these cases have been transferred to a multidistrict litigation proceeding in federal district court in South Carolina. Approximately 180 of these personal injury cases were filed on behalf of firefighters who allege personal injuries (primarily, thyroid disease and kidney, testicular and other cancers) as a result of aqueous firefighting foams. Most of these recent cases assert claims that the EID and Chemours separation constituted a fraudulent conveyance. While Chemours is defending EID for all claims except those for fraudulent conveyance, it has declined defense and indemnity to Corteva on all claims. EID did not make firefighting foams, PFOS, or PFOS products. While EID made surfactants and intermediaries that some manufacturers used in making foams, which may have contained PFOA as an unintended byproduct or an impurity, EID’s products were not formulated with PFOA, nor was PFOA an ingredient of these products. EID has never made or sold PFOA as a commercial product. Fayetteville Works Facility, North Carolina Prior to the separation of Chemours, EID introduced GenX as a polymerization processing aid and a replacement for PFOA at the Fayetteville Works facility in Bladen County, North Carolina. The facility is now owned and operated by Chemours, which continues to manufacture and use GenX. In 2017, the facility became and continues to be the subject of inquiries and government investigations relating to the alleged discharge of GenX and certain similar compounds into the air and Cape Fear River. EID was served with subpoenas relating to these discharges and in the second quarter 2018, received a subpoena expanding the scope to any PFCs discharged from the Fayetteville Works facility into the Cape Fear River. It is possible that these ongoing inquiries and investigations could result in penalties or sanctions, or that additional litigation will be instituted against Chemours, EID, or both. EID continues to cooperate with the U.S. Attorney’s Office. At March 31, 2020, several actions are pending in federal court against Chemours and EID relating to PFC discharges from the Fayetteville Works facility. One of these is a consolidated putative class action that asserts claims for medical monitoring and property damage on behalf of putative classes of property owners and residents in areas near or who draw drinking water from the Cape Fear River. Another action is a consolidated action brought by various North Carolina water authorities, including the Cape Fear Public Utility Authority and Brunswick County, that seek actual and punitive damages as well as injunctive relief. The other action is on behalf of about 100 plaintiffs who own wells and property near the Fayetteville Works facility. The plaintiffs seek damages for nuisance allegedly caused by releases of certain PFCs from the site. The plaintiffs’ claims for medical monitoring, punitive damages, public nuisance, trespass, unjust enrichment, failure to warn, and negligent manufacture have all been dismissed. The company has an indemnification claim against Chemours with respect to current and future inquiries and claims, including lawsuits, related to the foregoing. At March 31, 2020, Chemours, with reservations, is defending and indemnifying EID in the pending civil actions. Environmental Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on current law and existing technologies. At March 31, 2020, the company had accrued obligations of $359 million for probable environmental remediation and restoration costs, including $51 million for the remediation of Superfund sites. These obligations are included in accrued and other current liabilities and other noncurrent obligations in the interim Condensed Consolidated Balance Sheet. This is management’s best estimate of the costs for remediation and restoration with respect to environmental matters for which the company has accrued liabilities, although it is reasonably possible that the ultimate cost with respect to these particular matters could range up to $630 million above the amount accrued at March 31, 2020. Consequently, it is reasonably possible that environmental remediation and restoration costs in excess of amounts accrued could have a material impact on the company’s results of operations, financial condition and cash flows. Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing governmental regulations and legal standards regarding liability, and emerging remediation technologies for handling site remediation and restoration. For a discussion of the allocation of environmental liabilities under the Chemours Separation Agreement and the Corteva Separation Agreement, see the previous discussion on page 26. The above noted $359 million accrued obligations includes the following:
3. Accrual balance represents management’s best estimate of the costs of remediation and restoration, although it is reasonably possible that the potential exposure, as indicated, could range above the amounts accrued, as there are inherent uncertainties in these estimates.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Cash Flows - USD ($) $ in Millions |
3 Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|||||||
| Cash used for operating activities | ||||||||
| Net income | $ 282 | $ 176 | ||||||
| Depreciation and Amortization | 283 | 258 | [1] | |||||
| Provision for (Benefit from) Deferred Income Tax | 26 | (220) | ||||||
| Net Periodic Pension Benefit | (102) | (75) | ||||||
| Pension Contributions | (28) | (50) | ||||||
| Net loss (gain) on sales of property, businesses, consolidated companies, and investments | 46 | (65) | ||||||
| Restructuring and Asset Related Charges - Net | 70 | 61 | ||||||
| Amortization of inventory step-up | 0 | 205 | ||||||
| Other net loss | 138 | 92 | ||||||
| Changes in operating assets and liabilities - net | (2,645) | (2,436) | ||||||
| Cash used for operating activities | (1,930) | (1,541) | ||||||
| Cash used for investing activities | ||||||||
| Capital expenditures | (128) | (663) | ||||||
| Proceeds from the sale of property, businesses, and consolidated companies, net of cash divested | 11 | 125 | ||||||
| Proceeds from sales of ownership interests in nonconsolidated affiliates | 0 | 21 | ||||||
| Purchases of investments | (67) | (16) | ||||||
| Proceeds from Sale and Maturities of Investments | 58 | 36 | ||||||
| Other investing activities - net | (4) | (5) | ||||||
| Cash used for investing activities | (130) | (502) | ||||||
| Cash provided by financing activities | ||||||||
| Net change in borrowings (less than 90 days) | 1,619 | 814 | ||||||
| Proceeds from debt | 875 | 1,000 | ||||||
| Payments on Debt | (1) | (284) | ||||||
| Payments for Repurchase of Common Stock | (50) | 0 | ||||||
| Proceeds from Stock Options Exercised | 14 | 35 | ||||||
| Payments of Dividends | (97) | 0 | ||||||
| Distributions to DowDuPont | 0 | (317) | ||||||
| Contributions from Dow | 0 | 88 | ||||||
| Other financing activities | (16) | (24) | ||||||
| Cash provided by financing activities | 2,344 | 1,312 | ||||||
| Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (117) | 20 | ||||||
| Increase (Decrease) in Cash, Cash Equivalents, Restricted Cash | 167 | (711) | ||||||
| Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total Company, Beginning of Period | 2,173 | 5,024 | ||||||
| Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total Company, End of Period | 2,340 | [2] | 4,313 | |||||
| EID [Member] | ||||||||
| Cash used for operating activities | ||||||||
| Net income | 258 | 176 | ||||||
| Depreciation and Amortization | 283 | 258 | ||||||
| Provision for (Benefit from) Deferred Income Tax | 26 | (220) | ||||||
| Net Periodic Pension Benefit | (102) | (75) | ||||||
| Pension Contributions | (28) | (50) | ||||||
| Net loss (gain) on sales of property, businesses, consolidated companies, and investments | 46 | (65) | ||||||
| Restructuring and Asset Related Charges - Net | 70 | 61 | ||||||
| Amortization of inventory step-up | 0 | 205 | ||||||
| Other net loss | 138 | 92 | ||||||
| Changes in operating assets and liabilities - net | (2,613) | (2,436) | ||||||
| Cash used for operating activities | (1,922) | (1,541) | ||||||
| Cash used for investing activities | ||||||||
| Capital expenditures | (128) | (663) | ||||||
| Proceeds from the sale of property, businesses, and consolidated companies, net of cash divested | 11 | 125 | ||||||
| Proceeds from sales of ownership interests in nonconsolidated affiliates | 0 | 21 | ||||||
| Purchases of investments | (67) | (16) | ||||||
| Proceeds from Sale and Maturities of Investments | 58 | 36 | ||||||
| Other investing activities - net | (4) | (5) | ||||||
| Cash used for investing activities | (130) | (502) | ||||||
| Cash provided by financing activities | ||||||||
| Net change in borrowings (less than 90 days) | 1,619 | 814 | ||||||
| Repayments of Related Party Debt | (148) | 0 | ||||||
| Proceeds from debt | 875 | 1,000 | ||||||
| Payments on Debt | (1) | (284) | ||||||
| Proceeds from Stock Options Exercised | 14 | 35 | ||||||
| Distributions to DowDuPont | 0 | (317) | ||||||
| Contributions from Dow | 0 | 88 | ||||||
| Other financing activities | (23) | (24) | ||||||
| Cash provided by financing activities | 2,336 | 1,312 | ||||||
| Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (117) | 20 | ||||||
| Increase (Decrease) in Cash, Cash Equivalents, Restricted Cash | 167 | (711) | ||||||
| Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total Company, Beginning of Period | 2,173 | 5,024 | ||||||
| Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total Company, End of Period | 2,340 | 4,313 | ||||||
| Total company [Member] | ||||||||
| Cash used for operating activities | ||||||||
| Depreciation and Amortization | 283 | 726 | ||||||
| Restructuring and Asset Related Charges - Net | 70 | 106 | ||||||
| Total company [Member] | EID [Member] | ||||||||
| Cash used for operating activities | ||||||||
| Depreciation and Amortization | 283 | 726 | ||||||
| Restructuring and Asset Related Charges - Net | $ 70 | $ 106 | ||||||
| ||||||||
Fair Value Measurements |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Text Block] | FAIR VALUE MEASUREMENTS The following tables summarize the basis used to measure certain assets and liabilities at fair value on a recurring basis:
2. See Note 17 - Financial Instruments for the classification of derivatives in the interim Condensed Consolidated Balance Sheets.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||