Corteva, Inc. (CTVA) FY 2023 MD&A

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENTS ABOUT FORWARD-LOOKING STATEMENTS

This report contains certain estimates and forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates,” “outlook,” or other words of similar meaning. All statements that address expectations or projections about the future, including statements about Corteva’s financial results or outlook; strategy for growth; product development; regulatory approvals; market position; capital allocation strategy; liquidity; environmental, social and governance (“ESG”) targets and initiatives; the anticipated benefits of acquisitions, restructuring actions, or cost savings initiatives; and the outcome of contingencies, such as litigation and environmental matters, are forward-looking statements.

Forward-looking statements and other estimates are based on certain assumptions and expectations of future events which may not be accurate or realized. Forward-looking statements and other estimates also involve risks and uncertainties, many of which are beyond Corteva’s control. While the list of factors presented below is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Corteva’s business, results of operations and financial condition. Some of the important factors that could cause Corteva’s actual results to differ materially from those projected in any such forward-looking statements include: (i) failure to obtain or maintain the necessary regulatory approvals for some of Corteva’s products; (ii) failure to successfully develop and commercialize Corteva’s pipeline; (iii) effect of the degree of public understanding and acceptance or perceived public acceptance of Corteva’s biotechnology and other agricultural products; (iv) effect of changes in agricultural and related policies of governments and international organizations; (v) costs of complying with evolving regulatory requirements and the effect of actual or alleged violations of environmental laws or permit requirements; (vi) effect of climate change and unpredictable seasonal and weather factors; (vii) failure to comply with competition and antitrust laws; (viii) effect of competition in Corteva's industry; (ix) competitor’s establishment of an intermediary platform for distribution of Corteva's products; (x) impact of Corteva's dependence on third parties with respect to certain of its raw materials or licenses and commercialization; (xi) effect of volatility in Corteva's input costs; (xii) risk related to geopolitical and military conflict; (xiii) risks related to environmental litigation and the indemnification obligations of legacy EIDP liabilities in connection with the separation of Corteva; (xiv) risks related to Corteva's global operations; (xv) failure to effectively manage acquisitions, divestitures, alliances, restructurings, cost savings initiatives, and other portfolio actions; (xvi) effect of industrial espionage and other disruptions to Corteva’s supply chain, information technology or network systems; (xvii) failure of Corteva’s customers to pay their debts to Corteva, including customer financing programs; (xviii) failure to raise capital through the capital markets or short-term borrowings on terms acceptable to Corteva; (xix) increases in pension and other post-employment benefit plan funding obligations; (xx) capital markets sentiment towards ESG matters; (xxi) risks related to pandemics or epidemics; (xxii) Corteva’s intellectual property rights or defense against intellectual property claims asserted by others; (xxiii) effect of counterfeit products; (xxiv) Corteva’s dependence on intellectual property cross-license agreements; and (xxv) other risks related to the Separation from DowDuPont.

Additionally, there may be other risks and uncertainties that Corteva is unable to currently identify or that Corteva does not currently expect to have a material impact on its business. Where, in any forward-looking statement or other estimate, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of Corteva’s management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Corteva disclaims and does not undertake any obligation to update or revise any forward-looking statement, except as required by applicable law. A detailed discussion of some of the significant risks and uncertainties which may cause results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” (Part I, Item 1A of this Form 10-K).

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Overview

Refer to pages 3 - 4 for a discussion of the DowDuPont Merger, the Internal Reorganizations, and the business separations.

The following is a summary of results from continuing operations for the year ended December 31, 2023:

•The company reported net sales of $17,226 million, a decrease of 1 percent versus the year ended December 31, 2022, reflecting a 10 percent decrease in volume and a 1 percent unfavorable impact from currency, partially offset by a 7 percent price increase and a 3 percent favorable portfolio and other impact.

•Cost of goods sold ("COGS") totaled $9,920 million, down from $10,436 million for the year ended December 31, 2022, primarily driven by lower volumes, ongoing cost and productivity actions and a decrease in royalty expense, partially offset by higher input costs, which are primarily macro-economic driven.

•Restructuring and asset related charges - net were $336 million, a decrease from $363 million for the year ended December 31, 2022. The year ended December 31, 2023 primarily included $217 million related to asset related charges, including non-cash impairment charges of $152 million, and contract termination charges associated with the Crop Protection Operations Strategy Restructuring Program, charges of $72 million of non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits and $42 million related to severance and related benefit costs, asset related charges and contract termination charges associated with the 2022 Restructuring Actions.

•Income from continuing operations after income taxes was $941 million, as compared to $1,216 million for the year ended December 31, 2022.

•Operating EBITDA was $3,381 million, which improved from $3,224 million for the year ended December 31, 2022, primarily driven by price execution and productivity actions, partially offset by lower volumes coupled with cost and currency headwinds. Refer to page 44 for further discussion of the company's Non-GAAP financial measures.

In addition to the financial highlights above, the following events occurred during the year ended December 31, 2023:

•The company returned approximately $1.2 billion to shareholders during the year ended December 31, 2023 under its previously announced share repurchase programs and through common stock dividends.

•On July 21, 2023, the company's Board of Directors approved a 6.7 percent increase in the quarterly common stock dividend from $0.15 per share to $0.16 per share.

Priorities

The company continues to believe the following priorities will create significant value for its customers and shareholders over the mid-term:

•Accelerate performance and growth through a value creation network focused on four key catalysts: (1) portfolio simplification that prioritizes core markets and crops, in which we deliver top tier technology to our customers, (2) a continued move towards royalty neutrality, (3) improve our product mix to focus on differentiation and yield advantage, and (4) operational improvements focused on driving price and productivity.

•Increased investment in our industry-leading innovation pipeline focused on delivering even greater value and productivity to growers through more differentiated and sustainably advantaged solutions, which in turn promise to strengthen global food security and help address the impacts of climate change.

•Deploy capital with discipline by balancing investment, growth, M&A opportunities and returning cash to shareholders.

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Analysis of Operations

Acquisitions

On March 1, 2023, Corteva completed its previously announced acquisition of all the outstanding equity interests in Stoller Group Inc. (“Stoller”), one of the largest independent companies in the Biologicals industry, and Quorum Vital Investment, S.L. and its affiliates (“Symborg”), an expert in microbiological technologies. The purchase price for Stoller and Symborg was $1,220 million, inclusive of a working capital adjustment, and $370 million, respectively. These acquisitions supplement the crop protection business with additional biological tools that complement evolving farming practices. See Note 4 - Business Combinations, to the Consolidated Financial Statements, for additional information.

Crop Protection Operations Strategy Restructuring Program

On November 5, 2023, management of the company approved a plan to further optimize its Crop Protection network of manufacturing and external partners (the "Crop Protection Operations Strategy Restructuring Program"). The plan includes the exit of the company’s production activities at its site in Pittsburg, California, as well as ceasing operations in select manufacturing lines at other locations.

The company expects to record aggregate pre-tax restructuring and asset related charges of $410 million to $460 million, comprised of $70 million to $90 million of severance and related benefit costs, $320 million to $340 million of asset-related and impairment charges and $20 million to $30 million of costs related to contract terminations. Reductions in workforce are subject to local regulatory requirements.

Future cash payments related to these charges are anticipated to be $90 million to $120 million, which primarily relate to the payment of severance and related benefits and contract terminations. During the year ended December 31, 2023, the company paid $3 million associated with these charges. The restructuring actions associated with these charges are expected to be substantially complete in 2024.

During the year ended December 31, 2023, the company recorded pre-tax restructuring and asset related charges of $229 million consisting of $217 million and $12 million recognized in restructuring and asset related charges – net and cost of goods sold, respectively, in the company’s Consolidated Statement of Operations, which primarily related to asset-related charges and contract termination charges. Asset-related charges include non-cash impairments charges of $152 million, which were recognized during the year ended December 31, 2023 and consisted of $92 million and $60 million relating to operating lease assets and property, plant and equipment, respectively, associated with the exit of the company’s production activities at its site in Pittsburg, California.

The Crop Protection Operations Strategy Restructuring Program is expected to contribute to the company’s ongoing cost and productivity improvement efforts through achieving an estimated $100 million of savings on a run rate basis by 2025. Future actions by the company or changes in circumstances from current assumptions, including any site disposition gains or losses, may cause actual results and future cash payments to differ. See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements for additional information.

2022 Restructuring Actions

In connection with the company’s shift to a global business unit model during 2022, the company assessed its business priorities and operational structure to maximize the customer experience and deliver on growth and earnings potential. As a result of this assessment, the company committed to restructuring actions during the second quarter of 2022, which included the company’s Russia Exit (collectively the “2022 Restructuring Actions”). Through the year ended December 31, 2023, the company recorded pre-tax restructuring and other charges of $373 million inception-to-date under the 2022 Restructuring Actions, consisting of $131 million of severance and related benefit costs, $116 million of asset related charges, $67 million of costs related to contract terminations (including early lease terminations) and $59 million of other charges. The company does not anticipate any additional material charges from the 2022 Restructuring Actions as actions associated with this charge are substantially complete.

Cash payments related to these charges are anticipated to be up to $210 million, of which approximately $150 million has been paid through December 31, 2023, and primarily relate to the payment of severance and related benefits, contract terminations and other charges.

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The total pre-tax restructuring and other charges recognized through the year ended December 31, 2023 included $53 million associated with the Russia Exit. The Russia Exit pre-tax restructuring charges consisted of $6 million of severance and related benefit costs, $6 million of asset related charges, and $30 million of costs related to contract terminations (including early lease terminations). Other pre-tax charges associated with the Russia Exit were recorded to cost of goods sold and other income (expense) – net in the Consolidated Statement of Operations, relating to inventory write-offs of $3 million and settlement costs of $8 million, respectively.

The 2022 Restructuring Actions are expected to contribute to the company’s ongoing cost and productivity improvement efforts through achieving an estimated $210 million to $220 million of savings on a run rate basis by 2025. See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements for additional information.

Share Buyback Plan

On September 13, 2022, Corteva, Inc. announced that its Board of Directors authorized a $2 billion share repurchase program to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2022 Share Buyback Plan"). The timing, price and volume of purchases will be based on market conditions, relevant securities laws and other factors. In connection with the 2022 Share Buyback Plan, the company repurchased and retired 10,026,000 shares in the open market for a cost (excluding excise taxes) of $500 million during the year ended December 31, 2023.

On August 5, 2021, Corteva, Inc. announced that its Board of Directors authorized a $1.5 billion share repurchase program to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2021 Share Buyback Plan"). The company completed the 2021 Share Buyback Plan during the first quarter of 2023 and repurchased and retired 4,098,000, 17,425,000 and 5,572,000 shares in the open market for a total cost of $250 million, $1 billion, and $250 million during the years ended December 31, 2023, 2022 and 2021, respectively.

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 ("2019 Share Buyback Plan"). The company completed the 2019 Share Buyback Plan during the third quarter of 2021 and repurchased and retired 24,705,000 shares between the years ended December 31, 2019 and 2021 in the open market.

2021 Restructuring Actions

During the first quarter of 2021, Corteva approved restructuring actions designed to right-size and optimize footprint and organizational structure according to the business needs in each region with the focus on driving continued cost improvement and productivity. Through the year ended December 31, 2023, the company recorded net pre-tax restructuring charges of $167 million inception-to-date under the 2021 Restructuring Actions, consisting of $70 million of severance and related benefit costs, $45 million of asset related charges, $12 million of asset retirement obligations and $40 million of costs related to contract terminations (contract terminations includes early lease terminations). Actions associated with the 2021 Restructuring Actions were substantially complete by the end of 2021. The company expected the 2021 Restructuring Actions to contribute to the company’s ongoing cost and productivity improvement efforts and achieve an estimated $70 million of savings on a run rate basis by 2023, which was achieved. See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements, for additional information.

Results of Operations

Net Sales

2023 versus 2022

Net sales were $17,226 million for the year ended December 31, 2023, compared to $17,455 million for the year ended December 31, 2022. The decrease was primarily driven by a 10 percent decrease in volume versus the prior year and a 1 percent unfavorable impact from currency, partially offset by a 7 percent increase in price and a 3 percent favorable portfolio and other impact. Volume declines were driven by strategic product exits, crop protection channel inventory destocking, delayed farmer purchases, lower corn planted area in EMEA, reduced summer corn planted area and lower expected Safrinha corn planted area in Brazil, and the Russia Exit, partially offset by increased corn acres in North America. The unfavorable currency impacts

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were led by the Turkish Lira, Canadian Dollar and Chinese Renminbi. Price gains were driven by continued execution on the company's price for value strategy, strong demand for new technology and strong execution in response to cost inflation led by EMEA, partially offset by challenging market dynamics in Latin America and North America. The portfolio and other impact was driven by the biologicals acquisitions and 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.

2022 versus 2021

Net sales were $17,455 million for the year ended December 31, 2022, compared to $15,655 million for the year ended December 31, 2021. The increase was primarily driven by a 10 percent increase in price and a 5 percent increase in volume versus the prior year period, partially offset by a 3 percent unfavorable currency impact and 1 percent unfavorable portfolio impact. Price gains were driven by the continued execution on the company's price for value strategy with strong execution across all regions in response to cost inflation, and recovery of higher input costs. The increase in volume was driven by continued penetration of new products and gains in all regions, partially offset by reduced corn acres in North America and supply constraints in North America canola. The unfavorable currency impacts were led by the Turkish Lira and the Euro, partially offset by the Brazilian Real. The portfolio impact was driven by a divestiture in Asia Pacific.

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COGS

2023 versus 2022

COGS was $9,920 million (58 percent of net sales) for the year ended December 31, 2023 compared to $10,436 million (60 percent of net sales) for the year ended December 31, 2022. The decrease was primarily driven by lower volumes, ongoing cost and productivity actions and a decrease in royalty expense, partially offset by higher input costs, which are primarily macro-economic driven. The macro-economic driven trends are due to inflationary pressures impacting raw material inputs, which are expected to improve in 2024.

2022 versus 2021

COGS was $10,436 million (60 percent of net sales) for the year ended December 31, 2022 compared to $9,220 million (59 percent of net sales) for the year ended December 31, 2021. The increase was primarily driven by increased volumes in crop protection, and higher input costs, freight and logistics, which were primarily market-driven. The increases were partially offset by ongoing cost and productivity actions and a favorable impact from currency.

Research and Development Expense ("R&D")

2023 versus 2022

R&D expense was $1,337 million (8 percent of net sales) for the year ended December 31, 2023 and $1,216 million (7 percent of net sales) for the year ended December 31, 2022. The increase in R&D expense is in support of the company’s long-term growth plans and was primarily driven by an increase in salaries due to higher headcount and the associated spending on field, lab and facilities, and third-party research costs. The increase was partially offset by a decrease in variable compensation.

2022 versus 2021

R&D expense was $1,216 million (7 percent of net sales) for the year ended December 31, 2022 and $1,187 million (8 percent of net sales) for the year ended December 31, 2021. The increase was primarily driven by an increase in variable compensation and spending on field, lab and facilities supplies used in projects, partially offset by favorable currency.

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

2023 versus 2022

SG&A was $3,176 million (18 percent of net sales) for the year ended December 31, 2023 and $3,173 million (18 percent of net sales) for the year ended December 31, 2022. The flat results were primarily driven by incremental costs from the Stoller and Symborg acquisitions, an unfavorable impact relating to deferred compensation plans due to market improvements and an increase in bad debt expense, partially offset by a decrease in selling expense, variable compensation, functional spend, commissions and consulting fees.

2022 versus 2021

SG&A was $3,173 million (18 percent of net sales) for the year ended December 31, 2022 and $3,209 million (20 percent of net sales) for the year ended December 31, 2021. The decrease was primarily driven by favorable currency, lower functional spend and enterprise resource planning ("ERP") costs, and the favorable impact relating to deferred compensation plans due to market declines, partially offset by an increase in commissions expense, selling expense, travel and consulting fees.

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Amortization of Intangibles

2023 versus 2022

Intangible asset amortization was $683 million for the year ended December 31, 2023 and $702 million for the year ended December 31, 2022. The decrease was primarily driven by the expiration of the favorable supply contracts in the fourth quarter of 2022, at which point the contracts became fully amortized, partially offset by amortization relating to the intangible assets recognized in connection with the Stoller and Symborg acquisitions.

2022 versus 2021

Intangible asset amortization was $702 million for the year ended December 31, 2022 and $722 million for the year ended December 31, 2021. The decrease was primarily driven by the expiration of the favorable supply contracts on November 1, 2022, at which point the contracts became fully amortized.

See Note 13 - Goodwill and Other Intangible Assets, to the Consolidated Financial Statements, for additional information.

Restructuring and Asset Related Charges - Net

2023

Restructuring and asset related charges - net were $336 million for the year ended December 31, 2023, which was primarily comprised of a $217 million charge related to the Crop Protection Operations Strategy Restructuring Program, a $72 million net charge related to non-cash accelerated prepaid royalty amortization expense related to the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits and $42 million related to severance and related benefit costs, asset related charges and contract termination charges (including early lease terminations) associated with the 2022 Restructuring Actions. The $217 million net charge associated with the Crop Protection Operations Strategy Restructuring Program was primarily comprised of $214 million of asset related charges, which includes non-cash impairment charges of $152 million consisting of $92 million and $60 million related to operating lease assets and property, plant and equipment, respectively, associated with the exit of the company’s production activities at its site in Pittsburg, California.

2022

Restructuring and asset related charges - net were $363 million for the year ended December 31, 2022, which was primarily comprised of a $272 million net charge related to the 2022 Restructuring Actions and $109 million of restructuring and asset related charges - net from non-cash accelerated prepaid royalty amortization expense related to the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits. The $272 million net charge associated with the 2022 Restructuring Actions was comprised of $111 million of severance and related benefit costs, $104 million of asset related charges and $57 million of costs related to contract terminations (including early lease terminations). These charges were partially offset by a benefit associated with previous restructuring programs.

2021

Restructuring and asset related charges - net were $289 million for the year ended December 31, 2021, which was primarily comprised of a $167 million net charge related to the 2021 Restructuring Actions and $125 million of restructuring and asset related charges - net from non-cash accelerated prepaid royalty amortization expense related to the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits. The $167 million net charge associated with the 2021 Restructuring Actions was comprised of $74 million of severance and related benefit costs, $45 million of asset related charges, $6 million of asset retirement obligations and $42 million of costs related to contract terminations (including early lease terminations).

See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements for additional information.

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Other Income (Expense) - Net

2023 versus 2022

Other income (expense) - net was $(448) million and $(60) million for the years ended December 31, 2023 and 2022, respectively. Higher other expense was primarily driven by an increase in net exchange losses and estimated settlement reserves and an increase in non-operating pension and other post-employment costs in the current period versus a benefit in the prior period. Higher other expense was partially offset by an increase in interest income and the absence of charges incurred in 2022 relating to certain legal matters and losses associated with a previously held equity investment.

2022 versus 2021

Other income (expense) - net was $(60) million for the year ended December 31, 2022 and $1,348 million for the year ended December 31, 2021. The change was primarily driven by a decrease in non-operating pension and other post-employment benefit credits due to the prior year impact of the December 2020 OPEB plan amendments, an increase in net exchange losses, estimated settlement reserves, the Employee Retention Credit pursuant to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act as enhanced by the Consolidated Appropriations Act (“CAA”) and American Rescue Plan Act (“ARPA”) recognized in 2021 and losses associated with a previously held equity investment. The increases are partially offset by a decrease in loss on sale of receivables, an increase in interest income and the absence of charges related to an officer indemnification payment and a contract termination with a third-party service provider that were recognized in 2021.

See Note 7 - Supplementary Information, to the Consolidated Financial Statements for additional information.

Interest Expense

2023 versus 2022

Interest expense was $233 million and $79 million for the years ended December 31, 2023 and 2022, respectively. The change was primarily driven by higher interest rates, the issuance of Senior Notes in connection with the May 2023 Debt Offering, and an increase in short term borrowings.

2022 versus 2021

Interest expense was $79 million and $30 million for the years ended December 31, 2022 and 2021, respectively. The change was primarily driven by higher interest rates on seasonal short-term borrowings and new foreign currency borrowings.

Provision for (Benefit from) Income Taxes on Continuing Operations

2023

For the year ended December 31, 2023, the company’s effective tax rate of 13.9 percent on pre-tax income from continuing operations of $1,093 million was favorably impacted by a $(65) million benefit related to U.S. tax credits for increasing research activities, changes to deferred taxes and a tax currency change for legal entities within Switzerland in the amount of $(62) million and $(24) million, respectively, as well as favorable geographic mix of earnings. These items were partially offset by the unfavorable tax impact of certain net exchange losses recognized on the re-measurement of the net monetary asset positions, which were not deductible in their local jurisdictions, a $46 million charge associated with intellectual property realignment, and a $32 million charge associated with repatriation of cash held outside of the U.S. primarily from current year earnings.

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2022

For the year ended December 31, 2022, the company’s effective tax rate of 14.7 percent on pre-tax income from continuing operations of $1,426 million was favorably impacted by tax benefits relating to the establishment of deferred taxes in connection with the impact of a change in a U.S. legal entity's tax characterization, a worthless stock deduction in the U.S., and the release of a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil in the amount of $(55) million, $(42) million and $(36) million, respectively. These items were partially offset by the unfavorable tax impact of certain net exchange losses recognized on the re-measurement of the net monetary asset positions which were not deductible in their local jurisdictions, and a $24 million charge associated with repatriation of cash held outside of the U.S. primarily from current year earnings.

2021

For the year ended December 31, 2021, the company’s effective tax rate of 22.3 percent on pre-tax income from continuing operations of $2,346 million was unfavorably impacted by the tax impact of certain net exchange losses recognized on the re-measurement of the net monetary asset positions which were not deductible in their local jurisdictions, the tax impact of income from pension and other post-employment benefits, and a $23 million charge associated with repatriation of cash held outside of the U.S. These items were partially offset by the impacts of favorable geographic mix of earnings and a $(57) million benefit related to U.S. tax credits for increasing research activities.

Income (loss) from Discontinued Operations After Income Taxes

2023

Income (loss) from discontinued operations after income taxes was $(194) million for the year ended December 31, 2023, which was primarily comprised of charges associated with the settlement of certain PFAS related legal matters that are subject to the MOU with Chemours and DuPont, including the Nationwide Water District Settlement and the State of Ohio for natural resources damage claims, and charges associated with PFAS environmental remediation activities primarily at Chemours' Fayetteville Works facility.

2022

Income (loss) from discontinued operations after income taxes was $(58) million for the year ended December 31, 2022, which was primarily comprised of charges pursuant to the MOU with Chemours and DuPont, relating to PFAS environmental remediation activities primarily at Chemours' Fayetteville Works facility and adjustments of certain prior year tax positions for previously divested businesses.

2021

Income (loss) from discontinued operations after income taxes was $(53) million for the year ended December 31, 2021, which was primarily comprised of charges relating to PFAS environmental remediation activities at the Chemours Fayetteville Works facility and the settlement with the State of Delaware for PFAS related natural resource damage claims.

See Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for further discussion.

EIDP Analysis of Operations

As discussed in Note 1 - Basis of Presentation, to the EIDP 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.

Interest Expense

2023 versus 2022

EIDP’s interest expense was $253 million and $124 million for the years ended December 31, 2023 and 2022, respectively. The change was primarily driven by the items noted on page 37, under the header “Interest Expense – 2023 versus 2022,” and lower average borrowings on the related party loan between EIDP and Corteva, Inc. See Note 2 - Related Party Transactions, to the EIDP Consolidated Financial Statements for further information.

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2022 versus 2021

EIDP’s interest expense was $124 million and $80 million for the years ended December 31, 2022 and 2021, respectively. The change was primarily driven by the items noted on page 37, under the header “Interest Expense – 2022 versus 2021,” partially offset by lower interest expense incurred on the related party loan between EIDP and Corteva, Inc. See Note 2 - Related Party Transactions, to the EIDP Consolidated Financial Statements for further information.

Provision for (Benefit from) Income Taxes on Continuing Operations

2023

For the year ended December 31, 2023, EIDP had an effective tax rate of 13.7 percent on pre-tax income from continuing operations of $1,073 million, driven by the items noted on page 37, under the header “Provision for (Benefit from) Income Taxes on Continuing Operations - 2023 and a tax benefit related to the interest expense incurred on the related party loan between EIDP and Corteva, Inc. See Note 3 - Income Taxes, to the EIDP Consolidated Financial Statements for further information.

2022

For the year ended December 31, 2022, EIDP had an effective tax rate of 14.4 percent on pre-tax income from continuing operations of $1,381 million, driven by the items noted on page 38, under the header “Provision for (Benefit from) Income Taxes on Continuing Operations - 2022 and a tax benefit related to the interest expense incurred on the related party loan between EIDP and Corteva, Inc. See Note 3 - Income Taxes, to the EIDP Consolidated Financial Statements for further information.

2021

For the year ended December 31, 2021, EIDP had an effective tax rate of 22.2 percent on pre-tax income from continuing operations of $2,296 million, driven by the items noted on page 38, under the header “Provision for (Benefit from) Income Taxes on Continuing Operations - 2021” and a tax benefit related to the interest expense incurred on the related party loan between EIDP and Corteva, Inc. See Note 3 - Income Taxes, to the EIDP Consolidated Financial Statements for further information.

Corporate Outlook - 2024

The global outlook for agriculture remains constructive overall in 2024. There was record-setting demand for grain, oilseeds and biofuels in 2023 and we expect that to continue to grow in 2024. On-farm demand remains steady and overall strong. The Crop Protection industry is working to rebalance after the significant destocking in 2023, however we expect the industry to modestly improve as the imbalance between product going into the channel and on-farm consumption returns to alignment.

The company expects net sales to be in the range of $17.4 billion and $17.7 billion. Operating EBITDA is expected to be in the range of $3.5 billion and $3.7 billion. Operating Earnings Per Share is expected to be in the range of $2.70 and $2.90 per share, which reflects higher earnings, partially offset by interest expense and a higher base tax rate. Cash provided by operating activities - continuing operations is expected to be in the range of $2.1 billion and $2.6 billion. Free cash flow is expected to be in the range of $1.5 billion and $2.0 billion. Refer to further discussion of Non-GAAP metrics on pages 44 - 46.

The above outlook does not contemplate any extreme weather events, operational disruptions, significant changes in customers' demand or ability to pay or further acceleration of currency and inflation impacts resulting from macro-economic driven trends. Corteva is not able to reconcile its forward-looking non-GAAP financial measures, except Free Cash Flow, to its most comparable U.S. GAAP financial measures, as it is unable to predict with reasonable certainty items outside of the company’s control, such as Significant Items, without unreasonable effort (refer to page 45 for Significant Items recorded in the years ended December 31, 2022, 2021 and 2020). However, during 2023, the company committed to restructuring activities to optimize the Crop Protection network of manufacturing and external partners, which are expected to be substantially complete in 2024. The company expects to record approximately $180 million to $230 million net pre-tax restructuring charges during 2024 for these activities. See Note 6 - Restructuring and Asset Related Charges - Net, to the Consolidated Financial Statements, for additional information. Additionally, beginning January 1, 2020, the company recognizes non-cash accelerated prepaid royalty amortization expense as a restructuring and asset related charge. For further discussion of accelerated prepaid royalty amortization refer to the Company's Critical Accounting Estimates for Prepaid Royalties on page 55.

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Reconciliation of Forward-Looking Cash Provided by (Used for) Operating Activities – Continuing Operations to Free Cash Flow1

1.This represents the reconciliation of the company’s range provided for its forward-looking non-GAAP financial measure relating to Free Cash Flow. Refer to further discussion of Non-GAAP metrics on pages 44 - 46.

Recent Accounting Pronouncements

See Note 3 - Recent Accounting Guidance, to the Consolidated Financial Statements for a description of recent accounting pronouncements.

Segment Reviews

The company operates in two reportable segments: seed and crop protection. 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 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 with a view to optimize product selection and, ultimately, help maximize yield and profitability. The segment competes in a wide variety of agricultural markets. 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.

Summarized below are comments on individual segment net sales and segment operating EBITDA for the years ended December 31, 2023, 2022 and 2021. 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 OPEB credits (costs), tax indemnification adjustments, environmental remediation and legal costs associated with legacy EIDP businesses and sites, and the 2021 officer indemnification payment. 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. See Note 23 - Segment Information, to the Consolidated Financial Statements for details related to significant pre-tax benefits (costs) excluded from segment operating EBITDA. All references to prices are based on local price unless otherwise specified.

A reconciliation of segment operating EBITDA to income (loss) from continuing operations after income taxes for the years ended December 31, 2023, 2022 and 2021 is included in Note 23 - Segment Information, to the Consolidated Financial Statements.

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Seed

Seed net sales were $9,472 million in 2023, up 5 percent from $8,979 million in 2022. The sales increase was driven by a 13 percent increase in price, partially offset by a 6 percent decline in volume and a 2 percent unfavorable currency impact.

The increase in price was broad-based and driven by strong demand for top technology and operational execution globally, with global corn and soybean prices up 14 percent and 7 percent, respectively. Pricing actions more than offset currency impacts in EMEA. The decline in volume was driven by the 2022 decision to exit Russia, lower corn planted area in EMEA, reduced summer corn planted area and lower expected Safrinha corn planted area in Brazil, partially offset by increased corn acres in North America. Unfavorable currency impacts were led by the Turkish Lira and the Canadian Dollar.

Seed operating EBITDA was $2,117 million in 2023, up 28 percent from $1,656 million in 2022. Price execution, reduction of net royalty expense, and ongoing cost and productivity actions more than offset higher commodity and input costs, lower volumes, and the unfavorable impact of currency. Segment operating EBITDA margin improved by approximately 390 basis points versus the prior-year period.

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Seed net sales were $8,979 million in 2022, up 7 percent from $8,402 million in 2021. The increase was driven by a 9 percent increase in price, partially offset by a 2 percent unfavorable currency impact.

The increase in price was driven by strong execution globally, led by North America and Latin America, with global corn and soybean prices up 9 percent and 11 percent, respectively. Volume gains in Latin America corn and North America soybeans were offset by reduced corn acres in North America and supply constraints in North America canola. Enlist E3TM soybean market penetration reached over 45 percent of total North American acres. Unfavorable currency impacts were led by the Turkish Lira and the Euro, partially offset by the Brazilian Real.

Seed operating EBITDA was $1,656 million in 2022, up 10 percent from $1,512 million in 2021. Price execution and ongoing cost and productivity actions more than offset higher input and freight costs, the unfavorable impact of currency, lower volumes in North America, and increased investment in R&D. Segment operating EBITDA margin improved by approximately 45 basis points versus the prior-year period.

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Crop Protection

Crop protection net sales were $7,754 million in 2023, down 9 percent from $8,476 million in 2022. The decrease was driven by a 14 percent decrease in volume and a 1 percent unfavorable impact from currency, partially offset by a 4 percent favorable impact from portfolio and a 2 percent increase in price.

The decrease in volume was driven by strategic product exits, channel inventory destocking, and delayed farmer purchases. The increase in price was led by EMEA, and mostly reflected pricing for the value of our differentiated technology, including new products, and currency in EMEA, partially offset by challenging market dynamics in Latin America and North America. Unfavorable currency impacts were led by the Turkish Lira and Chinese Renminbi. The portfolio impact was driven by the Biologicals acquisitions, which added approximately $420 million of net sales.

Segment Operating EBITDA was $1,374 million in 2023, down 18 percent from $1,684 million from 2022. Pricing execution, productivity actions, and the favorable impact from the Biologicals acquisitions were more than offset by lower volumes, higher input costs, and the unfavorable impact of currency. Segment operating EBITDA margin declined by 215 basis points versus the prior-year period.

Crop protection net sales were $8,476 million in 2022, up 17 percent from $7,253 million in 2021. The increase was driven by an 11 percent increase in price and a 9 percent increase in volumes. These gains were partially offset by a 3 percent unfavorable currency impact.

The increase in price, led by North America and Latin America, reflected pricing for higher raw material and logistical costs and the value of our differentiated technology. The increase in volume was driven by continued penetration of new products, including EnlistTM and ArylexTM herbicides and IsoclastTM insecticide, with new product sales up 33 percent compared to the same period last year. Unfavorable currency impacts were led by the Euro and the Turkish Lira, partially offset by the Brazilian Real.

Segment Operating EBITDA was $1,684 million in 2022, up 40 percent from $1,202 million from 2021. Pricing and volume gains and productivity actions more than offset higher input costs, including raw material costs, and the unfavorable impact of currency. Segment operating EBITDA margin improved by approximately 330 basis points versus the prior-year period largely driven by pricing execution and new and differentiated technology.

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Non-GAAP Financial Measures

The company presents certain financial measures that do not conform to U.S. GAAP and are considered non-GAAP measures. These measures include Operating EBITDA and operating earnings (loss) per share. Management uses these measures internally for planning and forecasting, including allocating resources and evaluating incentive compensation. Management believes that these non-GAAP measures best reflect the ongoing performance of the company during the periods presented and provide more relevant and meaningful information to investors as they provide insight with respect to ongoing operating results of the company and a more useful comparison of year-over-year results. These non-GAAP measures supplement the company's U.S. GAAP disclosures and should not be viewed as an alternative to U.S. GAAP measures of performance. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Reconciliations for these non-GAAP measures to U.S. GAAP are provided below.

Operating EBITDA is defined as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, 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 OPEB credits (costs), tax indemnification adjustments, environmental remediation and legal costs associated with legacy businesses and sites, and the 2021 officer indemnification payment. 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. Operating earnings (loss) per share is defined as "earnings (loss) per common share from continuing operations - diluted" excluding the after-tax impact of significant items, the after-tax impact of non-operating benefits (costs), the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont, and the after-tax impact of net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. Although amortization of the company's intangible assets is excluded from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in amortization of additional intangible assets. 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 relevant non-GAAP financial measures, allowing quarterly results to reflect the economic effects of the foreign currency derivative contracts without the resulting unrealized mark to fair value volatility.

The company also uses Free Cash Flow as a non-GAAP measure to evaluate and discuss its liquidity position and ability to generate cash. Free Cash Flow is defined as cash provided by (used for) operating activities – continuing operations, less capital expenditures. Management believes that Free Cash Flow provides investors with meaningful information regarding the company’s ongoing ability to generate cash through core operations, and the company’s ability to service its indebtedness, pay dividends (when declared), make share repurchases, and meet its ongoing cash needs for its operations. The company made the decision, which was retrospectively applied, to adjust the presentation of the Consolidated Statement of Cash Flows to separately show the cash provided by (used for) operating activities – discontinued operations, which was previously presented within cash provided by (used for) operating activities. See Note 1 – Background and Basis of Presentation, to the Consolidated Financial Statements, for additional information. As a result, the definition for Free Cash Flow was revised to utilize cash provided by (used for) operating activities – continuing operations. The change in definition did not have a material impact to prior years’ Free Cash Flow. Management made this decision to better present the liquidity generated from the company’s ongoing business operations. Under the revised definition, Free Cash Flow was $307 million and $2,196 million for the years ended December 31, 2022 and 2021, respectively.

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Reconciliation of Income (Loss) from Continuing Operations after Income Taxes to Operating EBITDA

1.    The year ended December 31, 2021 includes non-cash benefits related to the 2020 OPEB Plan Amendments. Refer to Note 18 - Pension Plans and Other Post-Employment Benefits, to the Consolidated Financial Statements, for additional information.

Significant Items

1.Consists of estimated Lorsban® related charges.

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

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

4.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.

5.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 Financials Statements, for additional information.

6.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.

7.The tax only significant item benefit for the year ended December 31, 2023 relates to the impact of changes to deferred taxes and a tax currency change for legal entities within Switzerland of $(62) million and $(24) million, respectively, as well as adjustments due to intellectual property realignment of $46 million and a change in estimate related to a worthless stock deduction in the U.S. The tax only significant item benefit for the year ended December 31, 2022 relates to the impact of a change in a U.S. legal entity's tax characterization, resulting in the establishment of deferred taxes, the release of a valuation

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allowance recorded against the net deferred tax asset position of a legal entity in Brazil and a worthless stock deduction in the U.S. of $(55) million, $(36) million, and $(42) million, respectively. The tax only significant item benefit for the year ended December 31, 2021 reflects a net benefit for the impact of changes in valuation allowances recorded against the net deferred tax asset positions of two legal entities in Brazil of $(57) million and $44 million, as well as an adjustment related to the impacts of Swiss Tax Reform of $4 million.

Reconciliation of Income (Loss) from Continuing Operations Attributable to Corteva and Earnings (Loss) Per Share of Common Stock from Continuing Operations - Diluted to Operating Earnings (Loss) and Operating Earnings (Loss) Per Share

Reconciliation of Cash Provided by (Used for) Operating Activities – Continuing Operations to Free Cash Flow

Liquidity & Capital Resources

The company continually reviews its sources of liquidity and debt portfolio and occasionally may make adjustments to one or both to ensure adequate liquidity.

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The company's credit ratings impact its access to the debt capital markets and cost of capital. The company remains committed to a strong financial position and strong investment-grade rating. The company's long-term and short-term credit ratings assigned to EIDP are as follows:

1.In addition, Corteva, Inc. has been assigned a long-term issuer credit rating of A- with Stable outlook by Standard & Poor's and an Issuer Default Rating of A with Stable outlook by Fitch Ratings.

The company believes its ability to generate cash from operations and access to capital markets and commercial paper markets will be adequate to meet anticipated cash requirements to fund its operations, including seasonal working capital, capital spending, dividend payments, share repurchases and pension obligations. Corteva's strong financial position, liquidity and credit ratings will provide access as needed to capital markets and commercial paper markets to fund seasonal working capital needs. The company's liquidity needs can be met through a variety of sources, including cash provided by operating activities, commercial paper, syndicated credit lines, bilateral credit lines, long-term debt markets, bank financing and committed receivable repurchase facilities. Corteva considers the borrowing costs and lending terms when selecting the source to fund its operations and working capital needs.

The company had access to approximately $6.0 billion at December 31, 2023 and 2022 in committed and uncommitted unused credit lines, which includes the uncommitted revolving credit lines relating to the Foreign Currency Loans. These facilities provide support to meet the company’s short-term liquidity needs and for general corporate purposes, which may include funding of discretionary and non-discretionary contributions to certain benefit plans, severance payments, repayment and refinancing of debt, working capital, capital expenditures, repurchases and redemptions of securities, funding of acquisitions and funding Corteva's costs and expenses. These facilities are provided to the company by highly rated and well capitalized global financial institutions.

In May 2023, the company issued $600 million of 4.50 percent Senior Notes due in 2026 and $600 million of 4.80 percent Senior Notes due in 2033 (the “May 2023 Debt Offering”).

In January 2023, the company amended and restated its May 2022 364-day revolving credit agreement (the “364-Day Revolving Credit Facility”) increasing the facility amount to $1 billion and extending the expiration date to January 2024. Borrowings under the 364-Day Revolving Credit Facility have an interest rate equal to Adjusted Term SOFR, which is Term SOFR plus 0.10 percent, plus the applicable margin. The 364-Day Revolving Credit Facility includes a provision under which the company may convert any advances outstanding prior to the maturity date into term loans having a maturity date up to one year later. In February 2023, the company drew down $1 billion under the 364-Day Revolving Credit Facility, which was used for general corporate purposes, including funding seasonal working capital needs, capital spending, dividend payments, share repurchases and to partially fund the Stoller and Symborg acquisitions. In May 2023, the company repaid the $1 billion loan using the proceeds from the May 2023 Debt Offering and subsequently, in July 2023, reduced the available credit from $1 billion to $500 million. In January 2024, the company amended and restated the 364-Day Revolving Credit Facility to extend the expiration date to February 26, 2024. The 364-Day Revolving Credit Facility contains customary representations and warranties, affirmative and negative covenants and events of default that are typical for companies with similar credit ratings. Additionally, the 364-Day Revolving Credit Facility contains a financial covenant requiring that the ratio of total indebtedness to total capitalization for Corteva and its consolidated subsidiaries not exceed 0.60. At December 31, 2023, the company was in compliance with these covenants.

In May 2022, EIDP entered into a $3 billion, 5 year revolving credit facility and a $2 billion, 3-year revolving credit facility (the "Revolving Credit Facilities”) expiring in May 2027 and May 2025, respectively. Borrowings under the revolving credit facilities have an interest rate equal to Adjusted Term SOFR, which is Term SOFR plus 0.10 percent, plus the applicable margin. The Revolving Credit Facilities may serve as a substitute to the company's commercial paper program, and can be used from time to time, for general corporate purposes including, but not limited to, the funding of seasonal working capital needs. The Revolving Credit Facilities contain customary representations and warranties, affirmative and negative covenants and events of default that are typical for companies with similar credit ratings. Additionally, the Revolving Credit Facilities contain

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a financial covenant requiring that the ratio of total indebtedness to total capitalization for Corteva and its consolidated subsidiaries not exceed 0.60. At December 31, 2023, the company was in compliance with these covenants.

In May 2020, EIDP issued $500 million of 1.70 percent Senior Notes due 2025 and $500 million of 2.30 percent Senior Notes due 2030 (the May 2020 Debt Offering). The proceeds of this offering were used for general corporate purposes.

The company enters into short-term and long-term foreign currency loans from time-to-time by accessing uncommitted revolving credit lines to fund working capital needs of foreign subsidiaries in the normal course of business (“Foreign Currency Loans”). Interest rates are variable and determined at the time of borrowing. Total unused bank credit lines on the Foreign Currency Loans at December 31, 2023 was approximately $50 million. The company’s long-term Foreign Currency Loans have varying maturities throughout 2024.

The company's indenture covenants include customary limitations on liens, sale and leaseback transactions, and mergers and consolidations affecting manufacturing plants, mineral producing properties or research facilities located in the U.S. and the consolidated subsidiaries owning such plants, properties and facilities subject to certain limitations. The outstanding long-term debt also contains customary default provisions.

In September 2023 and in accordance with the Nationwide Water District Settlement, Chemours, DuPont and Corteva established a settlement fund (the “Water District Settlement Fund”) and collectively contributed $1.185 billion, with Chemours contributing 50 percent, and DuPont and Corteva collectively contributing the remaining 50 percent pursuant to the terms of the Letter Agreement. The settling companies utilized the balance in the MOU Escrow Account, along with amounts previously expected to be contributed to the MOU Escrow Account in 2023, among other sources, to make their respective contributions to the Water District Settlement Fund. Refer to Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for additional information.

The company has meaningful seasonal working capital needs based in part on providing financing to its customers. Working capital is funded through multiple methods including cash, commercial paper, a receivable repurchase facility, the Revolving Credit Facilities, the 364-day Revolving Credit Facility, and factoring.

In May 2023, in line with seasonal working capital requirements, the company entered into a committed receivable repurchase facility of up to $500 million (the "2023 Repurchase Facility") which expired in December 2023. Under the 2023 Repurchase Facility, Corteva sold a portfolio of available and eligible outstanding customer notes receivables to participating institutions and simultaneously agreed to repurchase at a future date.

The company has factoring agreements with third-party financial institutions to sell its trade receivables under both recourse and non-recourse agreements in exchange for cash proceeds in an effort to reduce its receivables risk. For arrangements that include an element of recourse, the company provides a guarantee of the trade receivables in the event of customer default. Refer to Note 10 - Accounts and Notes Receivable - Net, to the Consolidated Financial Statements for more information.

The company also organizes agreements with third-party financial institutions who directly provide financing for select customers of its seed and crop protection products in each region. Terms of the third-party loans are less than a year and programs are renewed on an annual basis. In some cases, the company guarantees a portion of the extension of such credit to such customers. Refer to Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for more information on the company’s guarantees.

The company's cash, cash equivalents and marketable securities at December 31, 2023 and 2022 are $2.7 billion and $3.3 billion, respectively, of which $2.2 billion and $2.0 billion, respectively, was held by subsidiaries in foreign countries, including United States territories. Cash, cash equivalents and marketable securities are concentrated subject to local restrictions with highly rated and well capitalized global financial institutions. The underlying credit worthiness and exposures to these counterparties are monitored on a regular basis in line with the company’s overall risk management procedures. Upon actual repatriation, such earnings could be subject to withholding taxes, foreign and/or U.S. state income taxes, and taxes resulting from the impact of foreign currency movements. The cash held by foreign subsidiaries is generally used to finance the subsidiaries' operational activities and future foreign investments. At December 31, 2023, management believed that sufficient liquidity is available in the U.S. with global operating cash flows, borrowing capacity from existing committed credit facilities, and access to capital markets and commercial paper markets

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Summary of Cash Flows

Cash provided by (used for) operating activities – continuing operations for the year ended December 31, 2023 was $1,809 million compared to $912 million for the year ended December 31, 2022. The change was primarily driven by favorable changes in receivables due to lower crop protection sales and higher collections as well as favorable changes in inventories due to higher seed sales and lower crop protection purchases. Partially offsetting these sources of cash were lower accounts payable driven by higher payments to third-party growers and higher seed production costs and the timing of payments to lenders for providing financing to select customers.

Cash provided by (used for) operating activities – continuing operations for the year ended December 31, 2022 was $912 million compared to $2,769 million for the year ended December 31, 2021. The change was primarily driven by higher earnings offset by changes in working capital primarily driven by an increase in inventories reflecting a rebuild of safety stocks to support growth, higher input and commodity costs as well as the impact from market volatility, higher receivables from revenue growth and changes in deferred revenue due to lower increases in prepayments from customers.

Cash provided by (used for) operating activities – discontinued operations for the years ended December 31, 2023 and 2022 was $(40) million. The cash outflows were primarily related to PFAS activities that are subject to the MOU with Chemours and DuPont associated with environmental remediation activities primarily at Chemours’ Fayetteville Works facility and certain legal matters, which were paid in 2023.

Cash provided by (used for) operating activities – discontinued operations for the year ended December 31, 2022 was $(40) million compared to $(42) million for the year ended December 31, 2021. The change was primarily related to PFAS activities that are subject to the MOU with Chemours and DuPont associated with environmental remediation activities primarily at Chemours’ Fayetteville Works facility and certain legal matters, which were paid in 2022.

Cash provided by (used for) investing activities was $(1,987) million for the year ended December 31, 2023 compared to $(632) million for the year ended December 31, 2022. The change was primarily due to the acquisitions of Stoller and Symborg and lower proceeds from sales and maturities of investments, partially offset by lower purchases of investments and the proceeds from the settlement of the net investment hedge.

Cash provided by (used for) investing activities was $(632) million for the year ended December 31, 2022 compared to $(362) million for the year ended December 31, 2021. The change was primarily due to higher purchases of investments, lower proceeds from sales and maturities of investments, escrow funding associated with acquisitions and higher capital expenditures.

Capital expenditures totaled $595 million, $605 million, and $573 million for the years ended December 31, 2023, 2022 and 2021, respectively. The company expects 2024 capital expenditures to be approximately $630 million.

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Cash provided by (used for) financing activities was $(99) million for the year ended December 31, 2023 compared to $(1,180) million for the year ended December 31, 2022. The change was primarily due to the May 2023 Debt Offering and higher borrowings to fund working capital needs, capital spending, dividend payments, share repurchases and to partially fund the Stoller and Symborg acquisitions. The change was also driven by lower share repurchases.

Cash provided by (used for) financing activities was $(1,180) million for the year ended December 31, 2022 compared to $(1,266) million for the year ended December 31, 2021. The change was primarily due to higher borrowings partially offset by higher repurchases of common stock, lower proceeds from stock options and higher dividends paid to stockholders.

During 2023, the company's Board of Directors authorized and paid quarterly dividends on its common stock of $0.15 in the first and second quarters and $0.16 in third and fourth quarters, respectively.

On September 13, 2022, Corteva, Inc. announced that its Board of Directors authorized a $2 billion share repurchase program to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date ("2022 Share Buyback Plan"). The timing, price and volume of purchases in connection with the 2022 Share Buyback Plan will be based on market conditions, relevant securities laws and other factors. In connection with the 2022 Share Buyback Plan, the company repurchased and retired 10,026,000 shares in the open market for a cost (excluding excise taxes) of $500 million during the year ended December 31, 2023.

On August 5, 2021, the company's Board of Directors authorized a $1.5 billion share repurchase program to purchase Corteva, Inc.'s common stock, par value $0.01 per share, without an expiration date (“2021 Share Buyback Plan”). The company completed the 2021 Share Buyback Plan during the first quarter of 2023 and repurchased and retired 4,098,000, 17,425,000 and 5,572,000 shares in the open market for a total cost of $250 million, $1 billion, and $250 million during the years ended December 31, 2023, 2022 and 2021, respectively.

On June 26, 2019, the company's 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 ("2019 Share BuyBack Plan"). The company completed the 2019 Share Buyback Plan during the third quarter of 2021 and repurchased and retired 24,705,000 shares between the years ended December 31, 2019 and 2021 in the open market. See Note 17 - Stockholders' Equity, to the Consolidated Financial Statements, for additional information related to the share buyback plans.

For the full year 2024, the company expects repurchases of approximately $1.0 billion under the 2022 Share Buyback Plan discussed above. The total amount, timing, price and volume of purchases will be based on market conditions, relevant securities laws and other market and company specific factors.

EIDP Liquidity Discussion

As discussed in Note 1 - Basis of Presentation, to the EIDP 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 a Liquidity discussion, only for the differences between EIDP and Corteva, Inc.

Cash provided by (used for) operating activities - continuing operations

EIDP’s cash provided by (used for) operating activities - continuing operations for the year ended December 31, 2023 was $1,408 million compared to $879 million for the year ended December 31, 2022. The change was primarily driven by the items noted on page 49, under the header "Cash provided by (used for) operating activities - continuing operations," as well as changes in the balance of the related party Master In-House Banking Agreement where EIDP and Corteva, Inc. are Participating Companies.

EIDP’s cash provided by (used for) operating activities - continuing operations for the year ended December 31, 2022 was $879 million compared to $2,731 million for the year ended December 31, 2021. The change was primarily driven by the items noted on page 49, under the header "Cash provided by (used for) operating activities - continuing operations."

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Cash provided by (used for) operating activities - discontinued operations

EIDP’s cash provided by (used for) operating activities - discontinued operations for the year ended December 31, 2023 was $(40) million compared to $(40) million for the year ended December 31, 2022. The change was primarily driven by the items noted on page 49, under the header "Cash provided by (used for) operating activities - discontinued operations."

EIDP’s cash provided by (used for) operating activities - discontinued operations for the year ended December 31, 2022 was $(40) million compared to $(42) million for the year ended December 31, 2021. The change was primarily driven by the items noted on page 49, under the header "Cash provided by (used for) operating activities - discontinued operations."

Cash provided by (used for) investing activities

EIDP’s cash provided by (used for) investing activities for the year ended December 31, 2023 was $(1,987) million compared to $(632) million for the year ended December 31, 2022. The change was primarily driven by the items noted on page 49, under the header "Cash provided by (used for) investing activities."

EIDP’s cash provided by (used for) investing activities for the year ended December 31, 2022 was $(632) million compared to $(362) million for the year ended December 31, 2021. The change was primarily driven by the items noted on page 49, under the header "Cash provided by (used for) investing activities."

Cash provided by (used for) financing activities

EIDP’s cash provided by (used for) financing activities was $302 million for the year ended December 31, 2023 compared to $(1,147) million for the year ended December 31, 2022. The change was primarily due to the May 2023 Debt Offering and higher borrowings to fund working capital needs, capital spending, dividend payments and to partially fund the Stoller and Symborg acquisitions. The change was also driven by lower payments on related party debt.

EIDP’s cash provided by (used for) financing activities was $(1,147) million for the year ended December 31, 2022 compared to $(1,228) million for the year ended December 31, 2021. The change was primarily driven by higher borrowings partially offset by higher payments on debt.

See Note 2 - Related Party Transactions, to the EIDP Consolidated Financial Statements for further information on the related party loan between EIDP and Corteva, Inc.

Critical Accounting Estimates

The company's significant accounting policies are more fully described in Note 2 - Summary of Significant Accounting Policies, to the Consolidated Financial Statements. Management believes that the application of these policies on a consistent basis enables the company to provide the users of the financial statements with useful and reliable information about the company's operating results and financial condition.

The preparation of the Consolidated Financial Statements in conformity with generally accepted accounting principles ("GAAP") in the United States of America requires management to make estimates and assumptions that affect the reported amounts, including, but not limited to, receivable and inventory valuations, impairment of tangible and intangible assets, long-term employee benefit obligations, income taxes, environmental matters and litigation. Management's estimates are based on historical experience, facts and circumstances available at the time and various other assumptions that are believed to be reasonable. The company reviews these matters and reflects changes in estimates as appropriate. Management believes that the following represent the more critical judgment areas in the application of the company's accounting policies which could have a material effect on the company's financial position, liquidity or results of operations.

Pension Plans and Other Post-Employment Benefits

Accounting for employee benefit plans involves assumptions and estimates. Discount rate and expected long-term rate of return on plan assets are two critical assumptions in measuring the cost and benefit obligation of the company's pension and OPEB plans. Management reviews these two key assumptions when plans are re-measured. These and other assumptions are updated periodically to reflect the actual experience and expectations on a plan specific basis as appropriate. As permitted by GAAP, actual results that differ from the assumptions are accumulated on a plan by plan basis and to the extent that such differences exceed 10 percent of the greater of the plan's benefit obligation or the applicable plan assets, the excess is amortized over the average remaining service period of active employees or the average remaining life expectancy of plan participants if all or almost all of a plan’s participants are inactive.

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Most of the company's benefit obligation for pensions and OPEB are attributable to the U.S. benefit plans. For U.S. benefit plans, the single equivalent discount rate is developed by matching the expected cash flow of the benefit plans to a yield curve constructed from a portfolio of high quality fixed-income instruments provided by the plans' actuaries as of the measurement date. The company measures the service and interest cost components utilizing a full yield curve approach by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. For the non-U.S. benefit plans, the company primarily utilizes prevailing long-term high quality corporate bond indices to determine the discount rate, applicable to each country, at the measurement date. The weighted average discount rates used in developing the expected 2024 net periodic pension and OPEB costs were 4.97 percent and 4.92 percent, respectively.

For the U.S. plan, the company establishes strategic asset allocation percentage targets and appropriate benchmarks for significant asset classes with the aim of achieving a prudent balance between return and risk. Where appropriate, asset-liability studies are also taken into consideration. The expected long-term rate of return on plan assets is based upon historical real returns (net of inflation) for the asset classes covered by the investment policy, expected performance, and projections of inflation and interest rates over the long-term period during which benefits are payable to plan participants. In determining the 2023 net periodic pension cost in the U.S., an assumption of 4.50 percent for expected long-term rate of return on plan assets was used. After re-evaluating the current strategic asset allocation and recent market conditions, the company kept the expected long-term rate of return on plan assets assumption at 4.50 percent to be used in determining the 2024 net periodic pension cost in the U.S. Consistent with prior years, the expected long-term rate of return on plan assets in the U.S. reflects the asset allocation of the plan and the effect of the company's active management of the plan's assets. For the non-U.S. plans, the strategic asset allocations are selected in accordance with the laws and practices for each country.

In determining annual expense for the principal U.S. pension plan, the company uses a market-related value of assets rather than its fair value. Accordingly, there may be a lag in recognition of changes in market valuation. As a result, changes in the fair value of assets are not immediately reflected in the company's calculation of net periodic pension cost. For the years ended December 31, 2023 and 2022, the market-related value of assets is calculated by averaging market returns over 36 months.

The following table shows the market-related value and fair value of plan assets for the principal U.S. pension plan:

For plans other than the principal U.S. pension plan, pension expense is determined using the fair value of assets.

The following table highlights the potential impact on the company's pre-tax earnings due to changes in certain key assumptions with respect to the company's pension and OPEB plans, based on assets and liabilities at December 31, 2023:

Additional information with respect to pension and OPEB expenses, liabilities and assumptions is discussed under "Long-Term Employee Benefits" beginning on page 57 and in Note 18 - Pension Plans and Other Post-Employment Benefits, to the Consolidated Financial Statements.

Environmental Matters

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. At December 31, 2023, the company had accrued obligations of $501 million for probable environmental remediation and restoration costs, including $55 million for the remediation of Superfund sites. As remediation activities vary substantially in duration and cost from site to site, it is difficult to develop precise estimates of future site remediation costs. The company's estimates are based on a number of factors, including the complexity of the geology, the nature and extent of contamination, the type of remedy, the outcome of discussions with regulatory agencies and other

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Potentially Responsible Parties ("PRPs") at multi-party sites and the number of and financial viability of other PRPs. Therefore, considerable uncertainty exists with respect to environmental remediation and costs, and, under adverse changes in circumstances, it is reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately $655 million above the accrued obligations amount. 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. It is the opinion of the company’s management, however, that the possibility is remote that costs in excess of the range disclosed will have a material impact on the company’s results of operations, financial condition or cash flows. For further discussion, see "Environmental Matters" section on page 58 and Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements.

Legal Contingencies

The company's results of operations could be affected by significant litigation adverse to the company, including product liability claims, patent infringement and antitrust claims, and claims for third-party property damage or personal injury stemming from alleged environmental torts. The company records accruals for legal matters when the information available indicates that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Management makes adjustments to these accruals to reflect the impact and status of negotiations, settlements, rulings, advice of counsel and other information and events that may pertain to a particular matter. Predicting the outcome of claims and lawsuits and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to vary materially from estimates. In making determinations of likely outcomes of litigation matters, management considers many factors. These factors include, but are not limited to, the nature of specific claims including unasserted claims, the company's experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative dispute resolution mechanisms, and the matter's current status. Considerable judgment is required in determining whether to establish a litigation accrual when an adverse judgment is rendered against the company in a court proceeding. In such situations, the company will not recognize a loss if, based upon a thorough review of all relevant facts and information, management believes that it is probable that the pending judgment will be successfully overturned on appeal. A detailed discussion of significant litigation matters is contained in Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements.

Indemnification Assets

The company has entered into various agreements where the company is indemnified for certain liabilities by DuPont, Dow and Chemours. The term of this indemnification is generally indefinite and includes defense costs and expenses, as well as monetary and non-monetary settlements and judgments. In connection with the recognition of liabilities related to these matters, the company records an indemnification asset when recovery is deemed probable. In assessing the probability of recovery, the company considers the contractual rights under the separation agreements and any potential credit risk. Future events, such as potential disputes related to recovery as well as the solvency of DuPont, Dow and/or Chemours, could cause the indemnification assets to have a lower value than anticipated and recorded. The company evaluates the recovery of the indemnification assets recorded when events or changes in circumstances indicate the carrying values may not be fully recoverable. See Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for additional information related to indemnifications.

Income Taxes

The breadth of the company's operations and the global complexity of tax regulations require assessments of uncertainties and judgments in estimating taxes the company will ultimately pay. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions, outcomes of tax litigation and resolution of disputes arising from federal, state and international tax audits in the normal course of business. The resolution of these uncertainties may result in adjustments to the company's tax assets and tax liabilities. It is reasonably possible that changes to the company’s global unrecognized tax benefits could be significant; however, due to the uncertainty regarding the timing of completion of audits and possible outcomes, a current estimate of the range of increases or decreases that may occur within the next twelve months cannot be made.

Deferred income taxes result from differences between the financial and tax basis of the company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income, as well as successful implementation of various tax planning strategies. For

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example, changes in facts and circumstances that alter the probability that the company will realize deferred tax assets could result in recording a valuation allowance, thereby reducing the deferred tax asset and generating a deferred tax expense in the relevant period. In some situations, these changes could be material.

At December 31, 2023, the company had a net deferred tax liability balance of $315 million, inclusive of a valuation allowance of $510 million. Realization of deferred tax assets is expected to occur over an extended period of time. As a result, changes in tax laws, assumptions with respect to future taxable income, and tax planning strategies could result in adjustments to deferred tax assets.

See Note 8 - Income Taxes, to the Consolidated Financial Statements, for additional information.

Valuation of Assets and Impairment Considerations

The assets and liabilities of acquired businesses are measured at their estimated fair values at the dates of acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired, including identified intangible assets, is recorded as goodwill. The determination and allocation of fair value to the assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, including estimates based on historical information, current market data and future expectations. The principal assumptions utilized in the company's valuation methodologies include revenue growth rates, EBITDA margin estimates, royalty rates, and discount rates. Although the estimates are deemed reasonable by management based on information available at the dates of acquisition, those estimates are inherently uncertain.

Assessment of the potential impairment of goodwill, other intangible assets, property, plant and equipment, investments in nonconsolidated affiliates, and other assets is an integral part of the company's normal ongoing review of operations. Testing for potential impairment of these assets is significantly dependent on numerous assumptions and reflects management's best estimates at a particular point in time. The dynamic economic environment in which the company's segments operate, and key economic and business assumptions with respect to projected selling prices, market growth and inflation rates, can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized. In addition, the company continually reviews its portfolio of assets to ensure they are achieving their greatest potential and are aligned with the company's growth strategy. Strategic decisions involving a particular group of assets may trigger an assessment of the recoverability of the related assets. Such an assessment could result in impairment losses.

The company tests goodwill and other indefinite-lived intangible assets for impairment annually (during the fourth quarter), or more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit has declined below its carrying value. Goodwill is evaluated for impairment using qualitative and / or quantitative testing procedures. The company performs goodwill impairment testing at the reporting unit level, which is defined as the operating segment or one level below the operating segment. One level below the operating segment, or component, is a business in which discrete financial information is available and regularly reviewed by segment management. The company aggregates certain components into reporting units based on economic similarities. The company’s reporting units included seed, crop protection and digital until its April 2022 implementation of a global business unit organization model (“BU Reorganization”), after which its reporting units are seed and crop protection. The BU Reorganization resulted in the company’s digital reporting unit being merged into the seed and crop protection reporting units with the goodwill relating to the former digital reporting unit being reassigned to the seed and crop protection reporting units using a relative fair value allocation approach.

For purposes of goodwill impairment testing, the company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed at the company level include GDP growth rates, long-term commodity prices, equity and credit market activity, discount rates, and overall financial performance. Qualitative factors assessed at the reporting unit level include changes in industry and market structure, competitive environments, planned capacity and new product launches, cost factors such as raw material prices, and financial performance of the reporting unit. If the company chooses not to complete a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required.

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If additional quantitative testing is required, the reporting unit’s fair value is compared with its carrying amount, and an impairment charge, if any, is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the amount of goodwill associated with the reporting unit. The company determines fair values for each of the reporting units using a discounted cash flow model (a form of the income approach), utilizing Level 3 unobservable inputs, or the market approach.

Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. The company’s significant assumptions in these analyses include future cash flow projections, weighted average cost of capital, the terminal growth rate and the tax rate. The company’s estimates of future cash flows are based on current regulatory and economic climates, recent operating results, and assumed business strategy from a market participant perspective and includes an estimate of long-term future growth rates based on such strategy. Actual results may differ from those assumed in the company’s forecasts. The company derives its discount rates using a capital asset pricing model and analyzes published rates for industries relevant to its reporting units to estimate the cost of equity financing. The company uses discount rates that are commensurate with the risks and uncertainty inherent in the respective reporting units and in its internally developed forecasts. Under the market approach, the company uses metrics of publicly traded companies or historically completed transactions for comparable companies.

As a result of the BU Reorganization, the company determined that a triggering event had occurred during the second quarter of 2022 that required an interim impairment assessment as of April 1, 2022. The interim impairment assessment was performed on the seed, crop protection, and the former digital reporting units immediately prior to the BU Reorganization and for the seed and crop protection reporting units immediately after the BU Reorganization resulting in no goodwill impairment charges.

Qualitative interim impairment assessments were performed for the seed and crop protection reporting units as of April 1, 2022. Based on the qualitative assessment performed, it was more likely than not that the fair value of each reporting unit exceeded the carrying value and therefore a quantitative test was not performed.

A quantitative impairment assessment was performed for the former digital reporting unit as of April 1, 2022 using a combination of the discounted cash flow model (a form of the income approach) and the market approach. The discount rate used in the company’s valuation was 19.0 percent.

Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods. The company believes the current assumptions and estimates utilized are both reasonable and appropriate. Based on the quantitative annual goodwill impairment analyses performed in the fourth quarter 2023, which were performed using the income approach, the company concluded the fair value of each of the reporting units exceeded their respective carrying values by more than 50.0 percent, and no goodwill impairment charge was necessary. The discount rate used in the company’s valuations was 10.3 percent.

Prepaid Royalties

The company’s seed segment currently has certain third-party biotechnology trait license agreements, which require up-front and variable payments subject to the licensor meeting certain conditions. These payments are reflected as other current assets and other assets and are amortized to cost of goods sold as seeds containing the respective trait technology are utilized over the term of the license. The rate of royalty amortization expense recognized is based on the company’s strategic plans which include various assumptions and estimates including product portfolio, market dynamics, farmer preferences, growth rates and projected planted acres. Changes in factors and assumptions included in the strategic plans, including potential changes to the product portfolio in favor of internally developed biotechnology, could impact the rate of recognition of the relevant prepaid royalty.

At December 31, 2023, the balance of prepaid royalties reflected in other current assets and other assets was approximately $105 million and $25 million, respectively. The majority of the balance of prepaid royalties in other current assets relates to the company’s wholly owned subsidiary, Pioneer Hi-Bred International, Inc.’s (“Pioneer”) non-exclusive license in the United States and Canada for the Monsanto Company's Genuity® Roundup Ready 2 Yield® glyphosate tolerance trait and Roundup Ready 2 Xtend® glyphosate and dicamba tolerance trait for soybeans (“Roundup Ready 2 License Agreement”). The prepaid royalty asset relates to a series of up-front, fixed and variable royalty payments to utilize the traits in Pioneer’s soybean product mix. The company’s historical expectation was that the technology licensed under the Roundup Ready 2 License Agreement

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would be used as the primary herbicide tolerance trait platform in the Pioneer® brand soybean through the term of the agreement. DAS, the agriculture business of Historical Dow, and MS Technologies, L.L.C. jointly developed and own the Enlist E3TM herbicide tolerance trait for soybeans, which provides tolerance to 2, 4-D choline in Enlist Duo® and Enlist One® herbicides, as well as glyphosate and glufosinate herbicides. In connection with the validation of breeding plans and large-scale product development timelines, during 2019 the company committed to accelerate the ramp up of the Enlist E3TM trait platform in the company’s soybean portfolio mix across all brands, including Pioneer® brands. During the five-year ramp-up period, the company has begun to significantly reduce the volume of products with the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits beginning in 2021, with expected minimal use of the trait platform thereafter for the remainder of the Roundup Ready 2 License Agreement (the “Transition Plan”). As of December 31, 2023, Enlist E3TM trait platform has grown to 58 percent of our soybean portfolio. Royalty expense has therefore significantly increased through higher amortization of the prepaid royalty.

In connection with the departure from these traits in the company's product portfolio, beginning January 1, 2020 the company presents and discloses the accelerated prepaid royalty amortization expense as a component of restructuring and asset related charges - net in the Consolidated Statement of Operations. The accelerated prepaid royalty amortization expense represents the difference between the rate of amortization based on the revised number of units expected to contain the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® trait technology and the per unit cash rate per the Roundup Ready 2 License Agreement. For the year ended December 31, 2023, the company recognized charges of $72 million in restructuring and asset related charges - net in the Consolidated Statement of Operations from non-cash accelerated prepaid royalty amortization expense. The expected non-cash accelerated prepaid royalty amortization expense estimated for 2024 is approximately $60 million.

Further changes in factors and assumptions associated with usage of the trait platform licensed under the Roundup Ready 2 License Agreement, including the Transition Plan, could further impact the rate of recognition of the prepaid royalty and Consolidated Statement of Operations presentation of the accelerated prepaid royalty amortization expense.

Off-Balance Sheet Arrangements

Certain Guarantee Contracts

Information with respect to the company's guarantees is included in Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements. Historically, the company has not made significant payments to satisfy guarantee obligations; however, the company believes it has the financial resources to satisfy these guarantees.

MOU Escrow Contributions

On January 22, 2021, Chemours, DuPont, Corteva and EIDP entered into a binding memorandum of understanding containing a settlement to resolve legal disputes originating from the Delaware Litigation and Pending Arbitration, and to establish a cost sharing arrangement for potential future legacy per- and polyfluoroalkyl substances (“PFAS”) liabilities arising out of pre-July 1, 2015 conduct (the “MOU”). Under the terms of the MOU, Corteva’s estimated aggregate share of the potential $2 billion is approximately $600 million. In order to support and manage any potential future PFAS liabilities, the parties have also agreed to establish an escrow account ("MOU Escrow Account"). The MOU provides that contributions to the MOU Escrow Account will be made by Chemours, DuPont and Corteva, annually over an eight-year period through 2028. Over this period, Chemours will deposit a total of $500 million in the account and DuPont and Corteva, together, will deposit an additional $500 million pursuant to the terms of the Letter Agreement. Additionally, if on December 31, 2028, the balance of the MOU Escrow Account (including interest) is less than $700 million, Chemours will make 50% of the deposits and DuPont and Corteva, together, will make 50% of the deposits necessary to restore the balance of the escrow account to $700 million pursuant to the terms of the Letter Agreement.

The company made its annual installment deposits due to the MOU Escrow Account through December 31, 2022 and waived the contributions due in 2023 and 2024 pursuant to the supplemental agreement to the MOU executed by Chemours, DuPont and Corteva provided certain conditions are met. Refer to Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for further details on the MOU and funding of the MOU Escrow Account.

Contractual Obligations

Our principal commitments consist of long-term debt, operating and finance lease obligations and environmental remediation obligations. Refer to Note 15 - Short-Term Borrowings, Long-Term Debt and Available Credit Facilities, Note 14 – Leases, and Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, respectively, for further discussion.

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Information related to the company's other significant contractual obligations are summarized in the following table:

1.Represents enforceable and legally binding agreements in excess of $1 million to purchase goods or services that specify fixed or minimum quantities; fixed, minimum or variable price provisions; and the approximate timing of the agreement.

2.Included in the Consolidated Financial Statements.

3.    Represents undiscounted remaining payments under Pioneer license agreements (approximately $45 million on a discounted basis).

4.    Includes liabilities related to employee-related benefits other than pension and other post-employment benefits, asset retirement obligations and other noncurrent liabilities.

5.    Due to uncertainty regarding the completion of tax audits and possible outcomes, the timing of certain payments of obligations related to unrecognized tax benefits cannot be made and have been excluded from the table above. See Note 8 - Income Taxes, to the Consolidated Financial Statements, for additional detail.

The company expects to meet its contractual obligations through its normal sources of liquidity and believes it has the financial resources to satisfy the contractual obligations that arise in the ordinary course of business.

Long-Term Employee Benefits

The company has various obligations to its employees and retirees. The company maintains retirement-related programs in many countries that have a long-term impact on the company's earnings and cash flows. These plans are typically defined benefit pension plans, as well as medical, dental and life insurance benefits for pensioners and survivors and disability benefits for employees ("other post-employment benefits" or "OPEB"). Substantially all of the company's worldwide benefit obligation for pensions and OPEB obligations are attributable to the U.S. benefit plans.

Pension coverage for employees of the company's non-U.S. consolidated subsidiaries is provided, to the extent deemed appropriate, through separate plans. The company regularly explores alternative solutions to meet its global pension obligations in the most cost effective manner possible as demographics, life expectancy and country-specific pension funding rules change. Where permitted by applicable law, the company reserves the right to change, modify or discontinue its plans that provide pension, medical, dental, life insurance and disability benefits.

Benefits under defined benefit pension plans are based primarily on years of service and employees' pay near retirement. In November 2016, the company announced changes to the U.S. pension and OPEB plans, and on November 30, 2018, the company froze the pay and service amounts used to calculate pension benefits for active employees who participate in the U.S. pension plans, resulting in the participants no longer accruing additional benefits. In addition to the changes to the U.S. pension plans, OPEB eligible employees who were under the age of 50 as of November 30, 2018 will not receive post-employment medical, dental and life insurance benefits. The majority of employees hired in the U.S. on or after January 1, 2007 are not eligible to participate in the pension and post-employment medical, dental and life insurance plans, but receive benefits in the defined contribution plans.

In December 2020, the company amended its retiree medical, dental and life insurance plans resulting in the company no longer providing retiree dental and life insurance benefits effective January 1, 2022 and Corteva’s portion of the cost of non-Medicare retiree medical coverage no longer being adjusted for cost increases, which capped the Corteva cost at the level as of December 31, 2021 ("2020 OPEB Plan Amendments"). As a result of these changes, the company recorded a $939 million decrease in OPEB benefit obligations as of December 31, 2020 with a corresponding prior service benefit within other comprehensive income (loss) for the year ended December 31, 2020. A substantial amount of the prior service benefit within other comprehensive income (loss) in 2020 was recognized in other income (expense) - net in the Consolidated Statement of Operations during 2021 with the remainder recognized during 2022.

Pension benefits are paid primarily from trust funds established to comply with applicable laws and regulations. The actuarial assumptions and procedures utilized are reviewed periodically by the plans' actuaries to provide reasonable assurance that there

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will be adequate funds for the payment of benefits. The company did not make contributions to the principal U.S. pension plan for the years ended December 31, 2023, 2022 or 2021.

Funding for each pension plan other than the principal U.S. pension plan is governed by the rules of the sovereign country in which it operates. Thus, there is not necessarily a direct correlation between pension funding and pension expense. In general, however, improvements in plans' funded status tends to moderate subsequent funding needs. The company contributed $5 million, $6 million, and $8 million to its funded pension plans other than the principal U.S. pension plan for the years ended December 31, 2023, 2022 and 2021, respectively.

U.S. pension benefits that exceed federal limitations are covered by separate unfunded plans and these benefits are paid to pensioners and survivors from operating cash flows. The company's remaining pension plans with no plan assets are paid from operating cash flows. The company made benefit payments of $47 million, $53 million, and $41 million to its unfunded plans for the years ended December 31, 2023, 2022 and 2021, respectively.

The company's OPEB plans are unfunded and the cost of the approved claims is paid from operating cash flows. Pre-tax cash requirements to cover actual net claims costs and related administrative expenses were $97 million, $122 million, and $198 million for the years ended December 31, 2023, 2022 and 2021, respectively. Changes in cash requirements reflect the net impact of per capita health care cost, demographic changes, plan amendments and changes in participant premiums, co-pays and deductibles.

In 2024, the company expects to contribute approximately $50 million to its pension plans other than the principal U.S. pension plan and approximately $115 million to its OPEB plans. The company does not anticipate making contributions to its principal U.S. pension plan in 2024.

The company's income can be significantly affected by pension and defined contribution benefits as well as OPEB costs. The following table summarizes the extent to which the company's income (loss) from continuing operations before income taxes for the years ended December 31, 2023, 2022 and 2021 was affected by pre-tax charges related to long-term employee benefits:

The above (credit) charges for pension and OPEB are determined as of the beginning of each period. Long-term employee benefit plan (credits) costs were $284 million and $(9) million for the years ended December 31, 2023 and 2022, respectively. The change is mainly due to an increase in discount rates and a decrease in asset returns due to lower pension plan assets. See "Pension Plans and Other Post-Employment Benefits" under the Critical Accounting Estimates section beginning on page 51 of this report for additional information on determining annual expense.

For 2024, long-term employee benefit costs are expected to increase by approximately $30 million. The change is mainly due to a decrease in asset values.

Environmental Matters

The company operates global manufacturing, product handling and distribution facilities that are subject to a broad array of environmental laws and regulations. Such rules are subject to change by the implementing governmental agency, and the company monitors these changes closely. Company policy requires that all operations fully meet or exceed legal and regulatory requirements. In addition, the company implements voluntary programs to reduce air emissions, minimize the generation of hazardous waste, decrease the volume of water use and discharges, increase the efficiency of energy use and reduce the generation of persistent, bioaccumulative and toxic materials. Management has noted a global upward trend in the amount and complexity of proposed chemicals regulation. The costs to comply with complex environmental laws and regulations, as well as internal voluntary programs and goals, are significant and will continue to be significant for the foreseeable future.

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Pre-tax environmental expenses charged to income (loss) from continuing operations before income taxes are summarized below:

1.Environmental remediation costs include costs that are subject to the $200 million threshold and sharing arrangements as discussed in Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, under the header Corteva Separation Agreement.

Environmental Operating Costs

As a result of its operations, the company incurs costs for pollution abatement activities including waste collection and disposal, installation and maintenance of air pollution controls and wastewater treatment, emissions testing and monitoring, and obtaining permits. The company also incurs costs related to environmental related research and development activities including environmental field and treatment studies as well as toxicity and degradation testing to evaluate the environmental impact of products and raw materials.

About 85 percent of total pre-tax environmental operating costs charged to income (loss) from continuing operations for the year ended December 31, 2023 resulted from operations in the U.S. Based on existing facts and circumstances, management does not believe that year-over-year changes, if any, in environmental operating costs charged to current operations will have a material impact on the company's financial position, liquidity or results of operations. Annual expenditures in the near term are not expected to vary significantly from the range of such expenditures experienced in the past few years. Longer term, expenditures are subject to considerable uncertainty and may fluctuate significantly.

Remediation Accrual

Changes in the remediation accrual balance are summarized below:

1.Excludes indemnified remediation obligations.

2.Represents the net change in indemnified remediation obligations based on activity as well as the removal from EIDP's accrued remediation liabilities of obligations that have been fully transferred to Chemours and DuPont. Pursuant to the Chemours Separation Agreement and subsequent MOU, and the Corteva Separation Agreement, as discussed in Note 16 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, EIDP is indemnified by Chemours and DuPont for certain environmental matters.

3.Includes accrued obligations of $145 million due in the next twelve months with the remainder being due subsequent to 2024.

Considerable uncertainty exists with respect to environmental remediation costs and, under adverse changes in circumstances, the potential liability may range up to approximately $655 million above the amount accrued as of December 31, 2023. However, based on existing facts and circumstances, management does not believe that any loss, in excess of amounts accrued, related to remediation activities at any individual site will have a material impact on the financial position, liquidity or results of operations of the company. Refer to Note 16 – Commitments and Contingent Liabilities for further details on the company’s accrued obligations at December 31, 2023.

As of December 31, 2023, the company has been notified of potential liability under the Comprehensive Environmental Response, Compensation and Liability Act ("Superfund") or similar state laws at about 505 sites around the U.S., including

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approximately 110 sites for which the company does not believe it has liability based on current information. Active remediation is under way at approximately 60 of the about 505 sites. In addition, the company has resolved its liability at about 210 sites, either by completing remedial actions with other PRPs or by participating in "de minimis buyouts" with other PRPs whose waste, like the company's, represented only a small fraction of the total waste present at a site. There were two new notices in 2023 and none in 2022.

Environmental Capital Expenditures

Capital expenditures for environmental projects, either required by law or necessary to meet the company’s internal environmental goals, were approximately $10 million for the year ended December 31, 2023. The company currently estimates expenditures for environmental-related capital projects to be approximately $15 million in 2024.

Climate Change

The company believes that climate change is an important global environmental concern that presents risks and opportunities, of which the Sustainability and Innovation Committee of the Board of Directors maintains oversight. Management regularly assesses and manages climate-related issues. Across its business, individuals who are responsible for climate-related initiatives may have annual performance goals tied to the delivery of projects related to these initiatives.

Continuing political and social attention to climate change and its impacts has resulted in regulatory and market-based approaches to limit greenhouse gas emissions. The company believes there is a way forward for sustainable climate change mitigation that both enables farmers to meet the demands of a growing population and secures the economic future for the vast majority of the world’s population who depend on agriculture for their livelihoods.

Extreme and volatile weather due to climate change may have an adverse impact on our customers’ ability to use the company's products and seed supply, potentially reducing sales volumes, revenues and margins. The company continuously evaluates opportunities for existing and new product and service offerings to meet the anticipated demands of climate-smart agriculture and mitigate the impact of extreme and volatile weather. The company integrates processes for identifying, assessing and managing climate-related risk into its enterprise risk management program.

The company completed a non-financial materiality assessment and identified short-, medium- and long-term climate-related risks and opportunities. The results of this assessment are integrated into the company's businesses, strategy and financial planning. Corteva has an established climate strategy, including commitments to reduce greenhouse gas emissions. The company is seeking ways to reduce its impact and providing tools and incentives for customers to do the same. Corteva champions climate positive agriculture, utilizing carbon storage and other means to remove carbon from the atmosphere without sacrificing farmer productivity or ongoing profitability.

While Corteva is working to reduce its role in the emission of greenhouse gasses, it also invests in enabling innovation that can create a more resilient agriculture value chain. The company engages with multiple stakeholders and partners around the globe regarding our innovations and actionable ideas to help safeguard the health and well-being of the planet and its people.

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