Corteva Inc

NOTE 23 -SEGMENT INFORMATION

Corteva’s reportable segments reflect the manner in which its chief operating decision maker ("CODM") allocates resources and assesses performance, which is at the operating segment level (Seed and Crop Protection). The company's CODM is the Chief Executive Officer. The primary measure used by Corteva's CODM for purposes of allocating resources to the segments and assessing segment performance is segment operating EBITDA.

Segment operating EBITDA is primarily utilized in the annual planning and monthly forecasting processes. On a monthly basis, the CODM considers variances between comparable prior year actual results and current year actual or forecasted results when evaluating the company's success in delivering its innovative proprietary technology to farmers and monitoring of expected savings from cost and productivity actions. The CODM also utilizes segment operating EBITDA when evaluating the impacts of market-driven trends on segment performance, such as input costs and inflationary and currency impacts.

The company defines segment operating EBITDA as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, corporate expenses, non-operating (benefits) costs, foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items. Non-operating (benefits) costs consists of non-operating pension and other post-employment benefit (OPEB) credits (costs), tax indemnification adjustments and environmental remediation and legal costs associated with legacy businesses and sites. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense. Net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting represents the non-cash net gain (loss) from changes in fair value of certain undesignated foreign currency derivative contracts. Upon settlement, which is within the same calendar year of execution of the contract, the realized gain (loss) from the changes in fair value of the non-qualified foreign currency derivative contracts will be reported in the respective segment results to reflect the economic effects of the foreign currency derivative contracts without the resulting unrealized mark to fair value volatility.

Corporate Profile

The company conducts its global operations through the following reportable segments:

Seed

The company’s Seed segment is a global leader in developing and supplying advanced germplasm and traits that produce optimum yield for farms around the world. The segment is a leader in many of the company’s key seed markets, including North America corn and soybeans, Europe corn and sunflower, as well as Brazil, India, South Africa and Argentina corn. The segment offers trait technologies that improve resistance to weather, disease, insects and enhance food and nutritional characteristics, herbicides used to control weeds, and digital solutions that assist farmer decision-making to help maximize yield and profitability.

The Crop Protection segment serves the global agricultural input industry with products that protect against weeds, insects and other pests, and disease, and that improve overall crop health both above and below ground via nitrogen management and seed-applied technologies. The segment offers crop protection solutions and digital solutions that provide farmers the tools they need to improve productivity and profitability, and help keep fields free of weeds, insects and diseases. The segment is a leader in global herbicides, insecticides, nitrogen stabilizers, pasture and range management herbicides and biologicals.

Reconciliation of Segment Profitability

1. Other expenses consisted primarily of selling, general and administrative expenses and research and development expense, net of depreciation add-back.

Reconciliation to Consolidated Financial Statements

Significant Pre-tax (Charges) Benefits Not Included in Segment Operating EBITDA

The years ended December 31, 2024, 2023 and 2022, respectively, included the following significant pre-tax (charges) benefits which are excluded from segment operating EBITDA:

1. Includes restructuring plans and asset related charges as well as accelerated prepaid amortization expense. See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements, for additional information.

2. Consists of estimated Lorsban® related charges.

3. Incremental gains (losses) associated with activities related to the 2022 Restructuring Actions.

4. Incremental loss associated with activities related to the Crop Protection Operations Strategy Restructuring Program.

5. Includes a benefit of $18 million and $3 million for the years ended December 31, 2023 and 2022, respectively, relating to the sale of seeds already under production in Russia when the decision to exit the country was made and that the Company was contractually required to purchase. It consists of $71 million and $8 million of net sales and $53 million and $5 million of cost of goods sold for the years ended December 31, 2023 and 2022, respectively.

6. Relates to acquisition-related costs, including transaction and third-party integration costs associated with the completed acquisitions of Stoller and Symborg as well as the recognition of the inventory fair value step-up. See Note 4 - Business Combinations, to the Consolidated Financial Statements, for additional information.

7. Includes proceeds received related to prior significant items.

Explanatory Note

During management’s review of the financial results for the fourth quarter of 2024, a material misclassification in the EIDP, Inc. Statements of Cash Flows was identified. Beginning in the fourth quarter of 2023, and continuing into each of the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2024 (collectively, the “Affected Periods”), cash outflows covering intercompany activities with Corteva, Inc., EIDP’s parent company (“Parent”), were incorrectly reflected within “Cash provided by (used for) operating activities – continuing operations” rather than “Cash provided by (used for) investing and financing activities.” There was no impact to EIDP’s Consolidated Statements of Operations, Consolidated Balance Sheets, Consolidated Statements of Comprehensive Income (Loss) or Consolidated Statements of Equity in any of the Affected Periods noted above. The impacts are discussed in further detail in EIDP Note 1 – Basis of Presentation, of the EIDP Consolidated Financial Statements. Management of EIDP has also reassessed its internal control over financial reporting and disclosure controls and procedures and determined that they were not effective as of December 31, 2023 and continue to be ineffective at December 31, 2024 as a result of a material weakness related to the lack of design and maintenance of effective controls to evaluate the appropriate cash flow classification for intercompany transactions between EIDP and Corteva, Inc., as further described in Part II, Item 9A – Controls and Procedures, and Management’s Report on Internal Control over Financial Reporting, of this Annual Report on Form 10-K.

Index to the Consolidated Financial Statements