Corteva Inc

Results of Operations

Net Sales

Net sales were $4,417 million and $4,492 million for the three months ended March 31, 2025 and 2024, respectively. The decrease was primarily driven by a 5% unfavorable currency impact partially offset by a 2% increase in volume and a 1% increase in price. Improvements in volume were driven by Crop Protection in most regions due to demand for new products and biologicals, while Seed experienced volume growth in North America from increased corn area that was more than offset by seasonal timing shifts in EMEA and planted area shifts in Latin America. The improvement in pricing was driven by Seed, led by favorable product mix and continued execution on the company's price for value strategy in most regions, partially offset by a decline in Crop Protection pricing due to competitive market dynamics globally. The unfavorable currency impacts were led by the Brazilian Real, Turkish Lira and Euro.

1. Represents U.S. & Canada.

2. Europe, Middle East and Africa ("EMEA").

Cost of Goods Sold ("COGS")

COGS was $2,342 million (53 percent of net sales) and $2,550 million (57 percent of net sales) for the three months ended March 31, 2025 and 2024, respectively. The improvement was driven byongoing cost and productivity actions, Crop Protection raw material deflation, lower commodity prices, a reduction in net royalty expense and favorable currency effects, with a partial offset from higher volumes and higher Seed production costs.

Research and Development Expense ("R&D")

R&D expense was $335 million (8 percent of net sales) and $332 million (7 percent of net sales) for the three months ended March 31, 2025 and 2024, respectively. The increase in R&D expense is in support of the company’s long-term growth plans and was primarily driven by higher salaries due to higher headcount, partially offset by favorable currency impacts.

Selling, General and Administrative Expenses ("SG&A")

SG&A expenses were $751 million (17 percent of net sales) and $736 million (16 percent of net sales) for the three months ended March 31, 2025 and 2024, respectively. The increase was primarily driven by an increase in commissions and bad debt expense, partially offset byfavorable currency impacts.

Amortization of Intangibles

Intangible asset amortization was $162 million and $177 million for the three months ended March 31, 2025 and 2024, respectively. As certain intangible assets became fully amortized subsequent to the end of the prior year period, amortization expense decreased in the current year period.

Restructuring and Asset Related Charges - Net

Restructuring and asset related charges - net were $22 million and $75 million for the three months ended March 31, 2025 and 2024, respectively. The charges in both the first quarter of 2025 and the first quarter of 2024 primarily relate to charges associated with the Crop Protection Operations Strategy Restructuring Program, consisting of severance and related benefit costs and asset related charges, while the first quarter of 2025 also includes decommissioning and demolition costs under the program. The charges in the first quarter of 2024 also include non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits, which as of the end of the second quarter of 2024 was complete.

See Note 4 - Restructuring and Asset Related Charges - Net, to the interim Consolidated Financial Statements, for additional information.

Other Income (Expense) - Net

Other income (expense) - net was $15 million and $(99) million for the three months ended March 31, 2025 and 2024, respectively. Higher other income was driven by the absence of charges related to estimated settlement reserves and prior year indemnification adjustments under the Tax Matters Agreement, as well as a lower net exchange loss and lower non-operating pension and other post employment benefit costs. These favorable changes were partially offset by the one-time receipt of an indemnification payment negotiated with the former Stoller owners during the first quarter of 2024.

See Note 5 - Supplementary Information, to the interim Consolidated Financial Statements, for additional information.

Interest Expense

Interest expense was $36 million and $41 million for the three months ended March 31, 2025 and 2024, respectively. The change was primarily driven by lower short-term borrowings and lower interest rates.

Provision for (Benefit from) Income Taxes on Continuing Operations

The company’s provision for income taxes on continuing operations was $117 million for the three months ended March 31, 2025 on pre-tax income from continuing operations of $784 million, resulting in an effective tax rate of 14.9 percent. The effective tax rate was favorably impacted by a $55 million deferred tax benefit associated with a change in a legal entity’s U.S. tax characterization, as well as net tax benefits associated with changes in accruals for certain prior year tax positions. Those favorable impacts were partially offset by withholding taxes on repatriation of cash held outside of the U.S. primarily from current year earnings.

The company's provision for income taxes on continuing operations was $106 million for the three months ended March 31, 2024 on pre-tax income from continuing operations of $482 million, resulting in an effective tax rate of 22.0 percent. The effective tax rate was unfavorably impacted by geographic mix of earnings, as well as withholding taxes on repatriation of cash held outside of the U.S. primarily from current year earnings. Those unfavorable impacts were partially offset by net tax benefits associated with changes in accruals for certain prior year tax positions.

Income (Loss) from Discontinued Operations After Tax

Income (loss) from discontinued operations after tax was $(11) million and $47 million for the three months ended March 31, 2025 and 2024, respectively. The result for the three months ended March 31, 2025 was driven by charges recognized relating to the MOU with Chemours and DuPont, relating to PFAS environmental remediation activities primarily at Chemours' Fayetteville Works facility, along with other environmental matters. The after-tax benefit recognized during the three months ended March 31, 2024 was primarily related to a favorable adjustment of certain prior year tax positions for previously divested businesses. The benefit was partially offset by charges recognized relating to the MOU with Chemours and DuPont, relating to PFAS environmental remediation activities primarily at Chemours' Fayetteville Works facility.

Refer to Note 12 - Commitments and Contingent Liabilities, to the interim Consolidated Financial Statements, for additional information.

EIDP Analysis of Operations

As discussed in EIDP Note 1 - Basis of Presentation, to the EIDP interim Consolidated Financial Statements, EIDP is a subsidiary of Corteva, Inc. and continues to be a reporting company, subject to the requirements of the Exchange Act. The below relates to EIDP only and is presented to provide an Analysis of Operations, only for the differences between EIDP and Corteva, Inc.

Other Income (Expense) - Net

EIDP's other income (expense) - net was $15 million and $(92) million for the three months ended March 31, 2025 and 2024, respectively. The change was primarily driven by the items noted above, under the header "Other Income (Expense) - Net."

See EIDP Note 2 - Related Party Transactions, to the EIDP interim Consolidated Financial Statements, for further information.

Provision for (Benefit from) Income Taxes on Continuing Operations

EIDP’s provision for income taxes on continuing operations was $117 million for the three months ended March 31, 2025 on pre-tax income from continuing operations of $784 million, resulting in an effective tax rate of 14.9 percent. EIDP’s provision for income taxes on continuing operations was $108 million for the three months ended March 31, 2024 on pre-tax income from continuing operations of $489 million, resulting in an effective tax rate of 22.1 percent.

EIDP’s effective tax rates for the three months ended March 31, 2025 and 2024 were driven by the items noted above, under the header “Provision for (Benefit from) Income Taxes on Continuing Operations.”

See EIDP Note 2 - Related Party Transactions, to the interim EIDP Consolidated Financial Statements, for further information.