Stockholders' Equity

9 Months Ended

Sep. 30, 2020

Stockholders' Equity Note Disclosure [Text Block]

STOCKHOLDERS' EQUITY

Common Stock

On June 1, 2019, Corteva, Inc.'s common stock was distributed to DowDuPont stockholders by way of a pro rata distribution. Each DowDuPont stockholder received one share of Corteva, Inc. common stock for every three shares of DowDuPont common stock held at the close of business on May 24, 2019, the record date of distribution. Corteva, Inc.'s common stock began trading the "regular way" under the ticker symbol "CTVA" on June 3, 2019, the first business day after June 1, 2019. The number of Corteva, Inc. common shares issued on June 1, 2019 was 748,815,000 (par value of $0.01 per share). Information related to the Corteva Distribution and its effect on the company's financial statements are discussed throughout these Notes to the interim Consolidated Financial Statements.

Set forth below is a reconciliation of common stock share activity:


Shares of common stock			Issued
Balance January 1, 2020			748,577,000
Issued			1,940,000
Repurchased and retired			(3,025,000)
Balance September 30, 2020			747,492,000

Share Buyback Plan

On June 26, 2019, Corteva, Inc. announced that the Board of Directors of Corteva, Inc. 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.

During the three months ended September 30, 2020, the company purchased and retired 1,160,000 shares in the open market for a total cost of $33 million. During the nine months ended September 30, 2020, the company purchased and retired 3,025,000 shares in the open market for a total cost of $83 million.

During the three months ended September 30, 2019, the company purchased and retired 824,000 shares in the open market for a total cost of $25 million.

Shares repurchased pursuant to Corteva's share buyback plan are immediately retired upon purchase. Repurchased common stock is reflected as a reduction of stockholders' equity. The company's accounting policy related to its share repurchases is to reduce its common stock based on the par value of the shares and to reduce its retained earnings for the excess of the repurchase price over the par value. When Corteva has an accumulated deficit balance, the excess over the par value is applied to additional paid-in capital. When Corteva has retained earnings, the excess is charged entirely to retained earnings.

Noncontrolling Interest

In June 2020, the company completed the acquisition of the remaining 46.5 percent interest in the Phytogen Seed Company, LLC joint venture from J. G. Boswell Company. As the purchase of the remaining interest did not result in a change of control, the difference between the carrying value of the noncontrolling interest and the consideration paid, net of taxes was recorded within equity.

Corteva, Inc. owns 100% of the outstanding common shares of EID. However, EID has preferred stock outstanding to third parties which is accounted for as a non-controlling interest in Corteva's interim Condensed Consolidated Balance Sheets. 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.

Below is a summary of the EID Preferred Stock at September 30, 2020, December 31, 2019, and September 30, 2019, which is classified as noncontrolling interests in Corteva's interim Condensed Consolidated Balance Sheets.


Shares in thousands			Number of Shares
Authorized			23,000
$4.50 Series, callable at $120			1,673
$3.50 Series, callable at $102			700

Other Comprehensive (Loss) Income

The changes and after-tax balances of components comprising accumulated other comprehensive loss are summarized below:


(In millions)	Cumulative Translation Adjustment1		Derivative Instruments		Pension Benefit Plans		Other Benefit Plans		Total
2019
Balance January 1, 2019	$	(2,793)	$	(26)	$	(620)	$	79	$	(3,360)
Other comprehensive (loss) income before reclassifications	(471)		11		9		(85)		(536)
Amounts reclassified from accumulated other comprehensive loss	—		12		4		(1)		15
Net other comprehensive (loss) income	(471)		23		13		(86)		(521)
Impact of Internal Reorganizations	1,123		—		91		—		1,214
Balance September 30, 2019	$	(2,141)	$	(3)	$	(516)	$	(7)	$	(2,667)

2020
Balance January 1, 2020	$	(1,944)	$	2	$	(1,247)	$	(81)	$	(3,270)
Other comprehensive (loss) income before reclassifications	(507)		(23)		(10)		2		(538)
Amounts reclassified from accumulated other comprehensive loss	—		7		4		1		12
Net other comprehensive (loss) income	(507)		(16)		(6)		3		(526)

Balance September 30, 2020	$	(2,451)	$	(14)	$	(1,253)	$	(78)	$	(3,796)

1.The cumulative translation adjustment loss for the nine months ended September 30, 2019 was primarily driven by the strengthening of the USD against the Brazilian Real (“BRL”), the European Euro (“EUR”) and the South African Rand (“ZAR”). The cumulative translation adjustment loss for the nine months ended September 30, 2020 was primarily driven by strengthening of the USD against the Brazilian Real ("BRL") and the South African Rand ("ZAR").

The tax benefit (expense) on the net activity related to each component of other comprehensive (loss) income was as follows:


(In millions)	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Derivative instruments	$	4	$	1	$	6	$	(6)
Pension benefit plans - net	—		—		(3)		4
Other benefit plans - net	—		—		—		29

(Provision for) benefit from income taxes related to other comprehensive (loss) income items	$	4	$	1	$	3	$	27

A summary of the reclassifications out of accumulated other comprehensive loss is provided as follows:


(In millions)	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Derivative Instruments1:	$	(22)	$	1	$	13	$	13
Tax benefit2	3		—		(6)		(1)
After-tax	$	(19)	$	1	$	7	$	12
Amortization of pension benefit plans:
Prior service benefit3	$	—	$	—	$	(1)	$	—
Actuarial losses3	1		1		3		2

Settlement loss3	—		1		3		2
Total before tax	1		2		5		4
Tax benefit2	—		—		(1)		—
After-tax	$	1	$	2	$	4	$	4
Amortization of other benefit plans:

Actuarial gains3	$	1	$	—	$	1	$	(1)

Total before tax	1		—		1		(1)
Tax benefit2	—		—		—		—
After-tax	$	1	$	—	$	1	$	(1)



Total reclassifications for the period, after-tax	$	(17)	$	3	$	12	$	15

1.Reflected in cost of goods sold.

2.Reflected in provision for (benefit from) income taxes from continuing operations.

3.These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit (credit) cost of the company's pension and other benefit plans. See Note 16 - Pension Plans and Other Post Employment Benefits, for additional information.