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EID Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Geographic Allocation of Income and Provision for Income Taxes


Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes	For the Year Ended December 31,
(In millions)	2020		2019		2018
Income (loss) from continuing operations before income taxes
Domestic	$	(83)	$	(1,352)	$	(5,040)
Foreign	758		1,036		(1,766)
Income (loss) from continuing operations before income taxes	$	675	$	(316)	$	(6,806)
Current tax expense (benefit)
Federal	$	28	$	(11)	$	(112)
State and local	9		1		(32)
Foreign	222		317		446
Total current tax expense	$	259	$	307	$	302
Deferred tax (benefit) expense
Federal	$	(116)	$	(392)	$	(124)
State and local	27		156		(39)
Foreign	(251)		(117)		(170)
Total deferred tax benefit	$	(340)	$	(353)	$	(333)
Benefit from income taxes on continuing operations	(81)		(46)		(31)
Net income (loss) from continuing operations after taxes	$	756	$	(270)	$	(6,775)

Reconciliation to US Statutory Rate


Reconciliation to U.S. Statutory Rate	For the Year Ended December 31,
	2020		2019		2018
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
Effective tax rates on international operations - net 1	(13.9)		(18.4)		0.4
Acquisitions, divestitures and ownership restructuring activities 2, 3, 4	(0.3)		(10.7)		(2.3)
U.S. research and development credit	(2.9)		7.0		0.1
Exchange gains/losses 5	3.5		(1.8)		(1.3)
SAB 118 Impact of Enactment of U.S. Tax Reform6	—		—		(3.0)
State and local incomes taxes - net	4.0		3.2		0.5
Impact of Swiss Tax Reform7	(27.0)		11.9		—
Excess tax benefits/deficiencies from stock compensation	1.0		(0.6)		0.1
Tax settlements and expiration of statute of limitations	0.4		3.9		(0.1)

Goodwill impairment 8	—		—		(15.2)
Other - net	2.2		(0.9)		0.3
Effective tax rate on income from continuing operations	(12.0)	%	14.6	%	0.5	%

1. Includes the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S. GAAP results. Includes a tax benefit of $(51) million for the year ended December 31, 2020, related to a return to accrual adjustment associated with an elective change in accounting method for the 2019 tax year impact of The Act's foreign tax provisions.

2. See Notes 4 - Common Control Business Combination, and Note 5 - Divestitures and Other Transactions, to the Consolidated Financial Statements, for additional information.

3. Includes a net tax charge of $50 million related to repatriation activities to facilitate the Business Separations for the year ended December 31, 2018.

4. Includes a net tax charge of $25 million for the year ended December 31, 2018 related to an internal legal entity restructuring associated with the Business Separations.

5. Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized. Further information about the company's foreign currency hedging program is included in Note 9 - Supplementary Information, and Note 22 - Financial Instruments, under the heading Foreign Currency Risk.

6. Reflects a net tax charge of $164 million associated with the company's completion of the accounting for the tax effects of The Act for the year ended December 31, 2018.

7. Reflects tax benefits of $(182) million primarily driven by the recognition of an elective cantonal component of the recent enactment of the Federal Act on Tax Reform and AHV Financing ("Swiss Tax Reform") for the year ended December 31, 2020. Reflects tax benefits of $(38) million associated with the enactment of the Federal Act on Tax Reform and AHV Financing ("Swiss Tax Reform"), for the year ended December 31, 2019.

8. Reflects the impact of the non-tax-deductible, non-cash impairment charge for the agriculture reporting unit and corresponding $75 million tax charge associated with a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil for the year ended December 31, 2018.

EID [Member]

Geographic Allocation of Income and Provision for Income Taxes


Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes	For the Year Ended December 31,
(In millions)	2020		2019		2018
Income (loss) from continuing operations before income taxes
Domestic	$	(183)	$	(1,458)	$	(5,040)
Foreign	758		1,036		(1,766)
Income (loss) from continuing operations before income taxes	$	575	$	(422)	$	(6,806)
Current tax expense (benefit)
Federal	$	8	$	(11)	$	(112)
State and local	5		1		(32)
Foreign	222		317		446
Total current tax expense	$	235	$	307	$	302
Deferred tax (benefit) expense
Federal	$	(116)	$	(417)	$	(124)
State and local	27		156		(39)
Foreign	(251)		(117)		(170)
Total deferred tax benefit	$	(340)	$	(378)	$	(333)
Benefit from income taxes on continuing operations	(105)		(71)		(31)
Net income (loss) from continuing operations	$	680	$	(351)	$	(6,775)

Reconciliation to US Statutory Rate


Reconciliation to U.S. Statutory Rate	For the Year Ended December 31,
	2020		2019		2018
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
Effective tax rates on international operations - net 1	(16.4)		(13.8)		0.4
Acquisitions, divestitures and ownership restructuring activities 2, 3, 4	(0.3)		(8.0)		(2.3)
U.S. research and development credit	(3.4)		5.2		0.1
Exchange gains/losses 5	4.1		(1.3)		(1.3)
State and local income taxes - net	4.2		3.0		0.5
SAB 118 Impact of Enactment of U.S. Tax Reform6	—		—		(3.0)
Impact of Swiss Tax Reform7	(31.7)		8.9		—
Excess tax benefits/deficiencies from stock compensation	1.2		(0.5)		0.1
Tax settlements and expiration of statute of limitations	0.4		2.9		(0.1)

Goodwill impairment 8	—		—		(15.2)
Other - net	2.6		(0.6)		0.3
Effective tax rate	(18.3)	%	16.8	%	0.5	%

1. Includes the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S. GAAP results. Includes a tax benefit of $(51) million for the year ended December 31, 2020, related to a return to accrual adjustment associated with an elective change in accounting method that alters the 2019 impact of The Act's foreign tax provisions.

2. See Notes 4 - Common Control Business Combination, and Note 5 - Divestitures and Other Transactions, of the Corteva, Inc. Consolidated Financial Statements for additional information.

3. Includes a net tax charge of $50 million related to repatriation activities to facilitate the Business Separations for the year ended December 31, 2018.

4. Includes a net tax charge of $25 million for the year ended December 31, 2018 related to an internal legal entity restructuring associated with the Business Separations.

6. Reflects a net tax charge of $232 million associated with the company's completion of the accounting for the tax effects of The Act for the year ended December 31, 2018.