What changed in this filing

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Item 1. Business

2022-02-10 compared with 2021-02-11 · 104 added, 263 removed, 280 unchanged (57% of the section changed)

BUSINESS, continued

In 2020, Corteva announced the launch of Brevant™ seeds in the U.S.

for sale exclusively through retail locations in the Midwest and Eastern Corn Belt starting with 2021 planting.

As a global brand, Brevant™ seeds, which was originally launched in Latin America, Canada, and select European countries in 2018, provides farmers a greater choice with a high-performance retail solution.

Brevant™ provides multiple seed offerings including corn, soybeans, sunflowers and canola.

In connection with the validation of breeding plans and large-scale product development timelines focused on rapidly ramping up differentiated technology solutions, during the fourth quarter of 2019, the company began accelerating the ramp up of the Enlist E3 TM trait platform in the company’s soybean portfolio mix across all brands, including Pioneer ® brands, over the subsequent five years.

During the ramp-up period, the company is expected 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 Roundup Ready 2 Yield ® and Roundup Ready 2 Xtend ® traits thereafter for the remaining term of the non-exclusive license with the Monsanto Company.

Refer to Prepaid Royalties within the Critical Accounting Estimates section on page 71 for additional information.

In 2019, Corteva received import authorization from China for the Conkesta™ soybean insect control trait.

The trait approval had been in progress in China since 2014.

The receipt of China import approval is a necessary step for commercialization of Conkesta E3™ in Latin America, which the company is expecting the latter part of 2021, pending additional regulatory approvals.

In 2019, the company launched Qrome ® corn products in U.S.

Pioneer ® brands.

Qrome ® products offer growers high yield potential insect control options to help drive productivity for their operations by combining top-tier genetics and strong defensive traits.

In 2020, Qrome ® products were expanded to the U.S.

multi-channel and Canada Pioneer ® brands.

The company acquired exclusive rights to the Clearfield ® canola production system in North America from BASF in 2019.

The Clearfield ® canola trait provides non-genetically modified tolerance to imidazolinone herbicides.

Clearfield ® canola in the Pioneer ® and Nexera ® brands were already highly established in the market and integrated into the company’s breeding, production and commercial processes.

In addition, the company creates digital tools that provide both farmers and internal sales resources with platforms to support agronomic and operational decision-making, particularly in the areas of product selection, targeted crop protection application, and financial analysis, designed to help maximize yield and profitability.

The seed segment has a diverse worldwide network which markets and distributes the company’s brands to customers, primarily through the company’s multi-channel, multi-brand strategy, which includes four differentiated channels:

Pioneer agency model, regional brands, retail brands, as well as third parties through licensing and distribution channels.

The Pioneer agency model is unique to Corteva and represents sales made directly to farmers via independent sales representatives.

Through this agency model, the company interacts directly with farmers at multiple points in the growing season, from prior to planting all the way through harvest.

These regular interactions enable the company to provide the advice and service farmers need while giving the company real-time insights into the customers’ future ordering decisions.

The company’s regional brands connect to customers through regional brand employees and farmer-dealer networks.

Retail brands provide a one-stop shop for seed and chemistry solutions and may include sales to distributors, agricultural cooperatives, and dealers.

Finally, Corteva out-licenses traits and germplasm to third parties.

Key Raw Materials

The key raw materials for seed include corn and soybean seeds.

To produce high-quality seeds, the company contracts with third party growers globally.

Corteva focuses on production close to the customer to provide the seed product, which is suitable for that region and its weed, insect and disease challenges, weather, soil and other conditions.

The company conditions and packages the seeds using its own plants and third-party contract manufacturers.

By striking a balance between owning production facility assets directly and contracting with third party growers, the company believes it is best able to maintain flexibility to react to demand changes unique to each geography while minimizing costs.

The company seeks to collaborate with strategic seed growers and share its digital agronomy and product management knowledge with them.

The company’s third-party growers are an important part of its supply chain.

Corteva provides them with rigorous training, planning tools and access to a system that tests and advances products matched to specific geographic needs.

BUSINESS, continued

The seed segment's R&D and supply chain groups work seamlessly to select and maintain product characteristics that enhance the quality of its seed products and solutions.

Corteva focuses on customer-driven innovation to deliver superior germplasm and trait technologies.

With its large sets of digitized data and its seed field management solution, the company can manage its field operations efficiently and draw insights from data quickly and effectively.

This allows the company’s supply chain to react quickly to changing customer needs and provides R&D with tremendous amounts of data to analyze and incorporate into resource allocation decisions.

The company continues to invest in and build capabilities that drive value via data digitization and analytics that enable it to create an even more responsive and efficient answer to customer needs.

Crop Protection

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 company offers crop protection solutions that provide farmers the tools they need to improve productivity and profitability, and help keep fields free of weeds, insects and diseases.

The company is a leader in global herbicides, insecticides, nitrogen stabilizers and pasture and range management herbicides.

Details on the crop protection segment’s net sales by major product line and geographic region (based on customer location) are as follows:

BUSINESS, continued

Products and Brands

The crop protection segment’s major brands and technologies, by key product line, are listed below:

Insect and Nematode Management CLOSER™;

ENTRUST ® SC;

Disease Management APROACH™ PRIMA;

APROACH POWER™;

EQUATION PRO ® ;

EQUATION CONTACT ® ;

TANOS™, FONTELIS™;

and GALILEO ®

Weed Control ARIGO ® ;

ENLIST™ weed control system;

WIDEATTACK ® ;

WIDEMATCH ® ;

PERFECTMATCH ® ;

DIMENSION ® ;

SURESTART ® ;

Nitrogen Management INSTINCT™;

N-SERVE® Nitrogen Stabilizer

Key Raw Materials

The key raw materials and supplies for crop protection include chlorinated pyridines derivatives, specialty intermediates and technical grade active ingredients, chlorine, and seed treatments.

Typically, the company purchases major raw materials through long-term contracts with multiple suppliers, which sometimes require minimum purchase commitments.

Certain important raw materials are supplied by a few major suppliers.

The company expects the markets for its raw materials to remain balanced, though pricing may be volatile given the current state of the global economy.

The company relies on contract manufacturers, both domestically and internationally, to produce certain inputs or key components for its product formulations.

These inputs are typically sourced close to where the company ultimately formulates and sells its products.

The company strives to maintain multiple high-quality supply sources for each input.

Corteva’s supply chain strategy will involve managing global supplies of active and intermediate ingredients sourced regionally with global best practices and oversight.

Corteva’s supply strategy includes a robust and flexible global footprint to meet future portfolio growth.

The company’s supply chain also provides competitive advantages including reducing time to meet customer requirements in regions while minimizing costs through the value chain.

Corteva’s sales are generally strongest in the first half of the calendar year, which aligns with the planting and growing season in the northern hemisphere.

The company typically generates about 65 percent of its sales in the first half of the calendar year, driven by northern hemisphere seed and crop protection sales.

The company generates about 35 percent of its sales in the second half of the calendar year, led by seed sales in the southern hemisphere.

The seasonality in sales impacts both the seed and crop protection segments.

The company’s direct distribution channel, where products are shipped to farmers, is more affected by planting delays than its competitors.

Generally speaking, unfavorable weather slows the planting season and can affect the company’s quarterly results and sales mix.

Severe unfavorable weather, however, can impact overall sales.

Accounts receivable tends to be higher during the first half of the year, consistent with the peak sales period in the northern hemisphere, with cash collection focused in the fourth quarter.

Human Capital Management

Corteva aims to attract the best employees, to retain those employees through offering career development and training opportunities while also prioritizing their safety and wellness in an inclusive and productive work environment.

The company’s strong employee base of approximately 21,000 employees, along with its commitment to Corteva’s core values, is a key element to the success of its business.

BUSINESS, continued

Workforce Composition.

As of December 31, 2020, the company globally employs approximately 21,000 employees.

In order to address regional specific customer needs within its global business, the company has a geographically diverse employee base with 50%, 16%, 16%, 14% and 4% located in North America, Latin America, Europe, Asia-Pacific and Africa regions, respectively.

Approximately 1% of the workforce is unionized in the United States and another 10% participate in work councils and collective bargaining arrangements outside the United States.

In 2020, the company did not experience any work stoppages due to strike or lockouts.

Living safely is one of the company’s core values by which the company manages its business.

The company has implemented safety programs and management practices to promote a culture of safety to protect its employees, as well as the environment.

This includes required trainings for employees, as well as specific qualifications and certifications for certain operational employees.

The company has a robust inclusion, diversity, and equity (“ID&E”) vision and strategy, based upon the company’s belief that embracing diversity and inclusion benefits the company by creating a workforce with a greater variety of skills and perspectives as a result of their differentiated backgrounds and experiences.

Specific ID&E initiatives are identified and tracked to create a culture of belonging where a diverse population of employees are attracted, retained, and engaged.

Management is expected to support specific diversity initiatives for their respective geographies and business, as applicable, in order to build a more representative workforce.

Critical to creating this environment are company-sponsored employee business resource groups (“BRGs”) that support and promote certain mutual objectives of both the employee and the company, including community engagement and the professional development of employees.

The BRGs provide a space where employees can foster connections within a supportive environment.

As of the 2020 year-end, the company had eight global BRGs, each lead by a member of the company’s executive leadership team:

Disability Awareness Network;

Global African Heritage Alliance;

Growing Asian Impact Network;

Latin Network;

Pride (LGBTQ);

Professional Learning Acceleration Network;

Veteran’s Network;

and Women’s Inclusion Network.

The company is focused on recruitment of diverse candidates and on internal talent development of its diverse leaders so that they can advance their careers and move into leadership positions within the company.

The company monitors its diversity and inclusion efforts through periodic engagement surveys and other measures.

The results of the company’s efforts, along with its ID&E strategy, are expected to be reviewed periodically with the company’s management, and through regular reviews of the company’s leadership pipelines with the People and Compensation Committee of the Board of Directors.

Experienced Management.

The company believes its management team has the experience necessary to effectively execute its strategy and advance its product pipelines and technology.

The company's chief executive officer and executive vice presidents have an average approximately 26 years of agriculture experience and are supported by an experienced and talented management team who is dedicated to maintaining and expanding its position as a global force in the agriculture industry.

BUSINESS, continued

Intellectual Property

Corteva considers its intellectual property estate, which includes patents, trade secrets, trademarks and copyrights, in the aggregate, to constitute a valuable asset of Corteva and actively seeks to secure intellectual property rights as part of an overall strategy to protect its investment in innovations and maximize the results of its research and development program.

While the company believes that its intellectual property estate, taken as a whole, provides a competitive advantage in many of its businesses, no single patent, trademark, license or group of related patents or licenses is in itself essential to the company as a whole or to any of the company’s segments.

Trade secrets are an important element of the company's intellectual property.

Many of the processes used to make Corteva products are kept as trade secrets which, from time to time, may be licensed to third parties.

Corteva vigilantly protects all of its intellectual property including its trade secrets.

When the company discovers that its trade secrets have been unlawfully taken, it reports the matter to governmental authorities for investigation and potential criminal action, as appropriate.

In addition, the company takes measures to mitigate any potential impact, which may include civil actions seeking redress, restitution and/or damages based on loss to the company and/or unjust enrichment.

Patents & Trademarks:

Corteva continually applies for and obtains U.S.

and foreign patents and has access to a large patent portfolio, both owned and licensed.

Corteva’s rights under these patents and licenses, as well as the products made and sold under them, are important to the company in the aggregate.

The protection afforded by these patents varies based on country, scope of individual patent coverage, as well as the availability of legal remedies in each country.

This significant patent estate may be leveraged to align with the company’s strategic priorities within and across product lines.

At December 31, 2020, the company owned about 5,400 U.S.

patents and about 10,500 active patents outside of the U.S.

Remaining life of granted patents owned as of December 31, 2020:

Approximate U.S.

Approximate Other Countries

Within 5 years 600 1,100

6 to 10 years 1,300 3,500

11 to 16 years 2,200 5,600

16 to 20 years 1,300 300

Total 5,400 10,500

In addition to its owned patents, the company owns over 6,400 patent applications.

The company also owns or has licensed a substantial number of trade names, trademarks and trademark registrations in the United States and other countries, including approximately 12,500 registrations and pending trademark applications in a number of jurisdictions.

In addition, the company holds multiple long-term biotechnology trait licenses from third parties as a normal course of business.

Most corn hybrids and soybean varieties sold to customers contain biotechnology traits licensed from third parties under these long-term licenses.

The company competes with producers of seed germplasm, trait developers, and crop protection products on a global basis.

The global market for products within the industry is highly competitive and the company believes competition has and will continue to intensify with industry consolidation.

Corteva competes based on germplasm and trait leadership, price, quality and cost competitiveness and the offering of a holistic solution.

The company’s key competitors include BASF, Bayer, FMC and ChemChina, as well as companies trading in generic crop protection chemicals and regional seed companies.

Environmental Matters

Information related to environmental matters is included in several areas of this report:

(1) Environmental Proceedings beginning on page 29, (2) Management's Discussion and Analysis of Financial Condition and Results of Operations beginning on pages 69, 75-77 and (3) Note 2 - Summary of Significant Accounting Policies, and Note 18 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements.

BUSINESS, continued

Regulatory Considerations

Our seed and crop protection products and operations are subject to certain approval procedures, manufacturing requirements and environmental protection laws and regulations in the jurisdictions in which we operate.

We evaluate and test products throughout the research and development phases, and each new technology undergoes further rigorous scientific studies and tests to ensure that the product can be used effectively and that use of the technology is safe for humans and animals and does not cause undue harm to the environment.

The regulatory approval processes and procedures globally are increasingly more complex, which has resulted in additional tests, time investment and higher development and maintenance costs.

We continue to invest on an ongoing basis to keep dossiers current, respond to regulators and meet regulatory standards required by global regulatory frameworks.

Failure to comply with these regulations or future regulatory bans and restrictions on our products and their use may materially impact our financial performance.

We evaluate and test products throughout the research and development phases, and each new technology undergoes further rigorous scientific studies and tests to validate that the product can be used effectively and that use of the technology is safe for humans and animals and does not cause undue harm to the environment when used in accordance with the directions for use.

The regulatory approval processes and procedures globally are becoming increasingly more complex, which has resulted in additional testing needs, difficult to predict and longer approval timelines, and higher development and maintenance costs.

We continue to invest on an ongoing basis to keep dossiers current, respond to regulators and meet evolving regulatory standards required by global regulatory frameworks.

Failure to comply with these regulations or future regulatory bans and requirements related to our products and their use may materially impact our financial performance.

The increase in timelines for regulatory approvals may result in the company not achieving its sustainability targets, or its anticipated returns on research and development investments.

Regulation of Genetically Modified Organisms (“GMOs”)

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In the United States and other countries that have functioning regulatory systems, a rigorous scientific review is conducted by these agencies to demonstrate that genetically modified products are as safe as traditionally bred, non-biotech/GMO counterparts for food, feed and the environment.

Various countries in EMEA;

Latin America, and Asia have banned GMOs entirely.

Various countries in EMEA, Latin America, and Asia have banned GMOs entirely.

Regulation of Crop Protection Products

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Already registered pesticides are required to be re-registered every 15 years to ensure that those products continue to meet the rigorous safety standards set by the regulators.

The EPA reevaluates pesticide tolerances every 10 years, taking into account ecological and human health risks, in addition to cumulative risks as a result of multiple routes of and sources of exposure.

Our European operations are subject to the European chemical regulation REACH (“Registration, Evaluation, Authorisation, and Restriction of Chemicals”) and the CLP (“Classification, Labeling, and Packaging of Substances and Mixtures”).

The EPA reevaluates pesticide tolerances at least every 10 years, taking into account ecological and human health risks, in addition to cumulative risks as a result of multiple routes of and sources of exposure.

As of January 2022, before registering any new conventional pesticide active ingredient, the EPA will evaluate the potential effects on listed species and their designated critical habitats under the Endangered Species Act (the “ESA”).

EPA also has initiated such evaluations for certain other active ingredients in response to existing or threatened litigation.

Where the EPA determines that a pesticide in the registration and re-evaluation processes “may affect” a listed species, the EPA must consult with the U.S.

Fish and Wildlife Service and the National Marine Fisheries Service.

As part of its approval, registration, and reevaluation processes, the EPA may impose certain use restrictions on crop protection products under the ESA.

Under the citizen suit provisions, the ESA also includes citizen suit provisions that allow the public to bring suit in court against federal agencies when they believe a listed species is not being adequately protected by the EPA.

The company's European operations are subject to the European chemical regulation REACH (“Registration, Evaluation, Authorisation, and Restriction of Chemicals”) and the CLP (“Classification, Labeling, and Packaging of Substances and Mixtures”).

Other jurisdictions also have rigorous approval processes, procedures and scientific testing requirements for the approval of crop protection products.

We continue to follow legislative and regulatory developments related to pollution and other environmental health and safety matters.

We continue to monitor legislative and regulatory developments related to pollution and other environmental health and safety matters.

European Farm to Fork Strategy

In October 2021, a majority of the European Parliament adopted the Farm to Fork Strategy setting forth the European Union’s plans to increase organic farming.

As part of this strategy, the E.U.

Commission has set aggressive 2030 targets to reduce by 50% the use and risk of chemical pesticides and the use of more hazardous pesticides by 50%.

Additionally, as part of this strategy, the E.U.

Commission is targeting having 25% of the European Union’s agricultural land under organic farming by

BUSINESS, continued

Commission is also expected to propose mandatory front-of-pack nutrition labelling and develop a food labelling framework covering the nutritional, climate, environmental and social aspects of food products.

While the company has a growing product portfolio supportive to organic agriculture, the implementation of this strategy may decrease the size of the market for its products within the European Union.

Available Information

The company's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are accessible on Corteva's website at http://www.corteva.com/ by clicking on the section labeled "Investors", then on "Financial Information." These reports are made available, without charge, as soon as is reasonably practicable after the company files or furnishes them electronically with the SEC.

No portion of the company's website, or the materials contained on it, have been made part of this annual report on Form 10-K or incorporated herein by reference, unless such incorporation is specifically mentioned herein.

The company's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are accessible on Corteva's website at http://investors.corteva.com by clicking on the section labeled "Financial Information", then on "SEC Filings." These reports are made available, without charge, as soon as is reasonably practicable after the company files or furnishes them electronically with the Securities and Exchange Commission.

No portion of the company's website mentioned in this report, or the materials contained on it, have been made part of this annual report on Form 10-K or incorporated herein by reference, unless such incorporation is specifically mentioned herein.

Risks Related to our Industry

Corteva may not be able to obtain or maintain the necessary regulatory approvals for some of its products, including its seed and crop protection products, which could restrict its ability to sell those products in some markets.

Regulatory and legislative requirements affect the development, manufacture and distribution of Corteva’s products, including the testing and planting of seeds containing Corteva’s biotechnology traits and the import of crops grown from those seeds, and non-compliance can harm Corteva’s sales and profitability.

Seed products incorporating biotechnology derived traits and crop protection products must be extensively tested for safety, efficacy and environmental impact before they can be registered for production, use, sale or commercialization in a given market.

In certain jurisdictions, Corteva must periodically renew its approvals for both biotechnology and crop protection products, which typically require Corteva to demonstrate compliance with then-current standards which generally are more stringent since the prior registration.

The regulatory approvals process is lengthy, costly, complex and in some markets unpredictable, with requirements that can vary by product, technology, industry and country.

The regulatory approvals process for products that incorporate novel modes of action or new technologies can be particularly unpredictable and uncertain due to the then-current state of regulatory guidelines and objectives, as well as governmental policy considerations and non-governmental organization and other stakeholder considerations.

The successful development and commercialization of Corteva’s pipeline products, including Enlist E3™ and Conkesta E3® soybeans, will be necessary for Corteva’s growth.

The successful development and commercialization of Corteva's pipeline products will be necessary for Corteva's growth.

Corteva uses advanced breeding technologies to produce hybrids and varieties with superior performance in farmers’ fields and uses biotechnology to introduce traits that enhance specific characteristics of its crops.

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Commercial success frequently depends on being the first company to the market, and many of Corteva’s competitors are also making considerable investments in similar new biotechnology products, improved germplasm products, biological and chemical products and agronomic recommendation products.

The regulatory approvals process is lengthy, costly, complex and in some markets unpredictable, with requirements that can vary by product, technology, industry and country.

The regulatory approvals process for products that incorporate novel modes of action or new technologies can be particularly unpredictable and uncertain due to the then-current state of regulatory guidelines and objectives, as well as governmental policy considerations and non- governmental organization and other stakeholder considerations.

The uncertainty and increased length of regulatory approvals may reduce Corteva’s return on its research and development investments, and impede its ability to meet sales, profitability, or sustainability metrics.

Furthermore, the detection of biotechnology traits or chemical residues from a crop protection product not approved in the country in which Corteva sells or cultivates its product, or in a country to which Corteva imports its product, may affect Corteva’s ability to supply its products or export its products, or even result in crop destruction, product recalls or trade disruption, which could result in lawsuits and termination of licenses related to biotechnology traits and raw material supply agreements.

Delays in obtaining regulatory approvals to import, including those related to the importation of crops grown from

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seeds containing certain traits or treated with specific chemicals, may influence the rate of adoption of new products in globally traded crops.

Additionally, the regulatory environment may be impacted by the activities of non-governmental organizations and special interest groups and stakeholder reaction to actual or perceived impacts of new and existing technology, products or processes on safety, health and the environment.

Obtaining and maintaining regulatory approvals requires submitting a significant amount of information and data, which may require participation from technology providers.

Regulatory standards and trial procedures are continuously changing.

In addition, Corteva has seen an increase in recent years in the number of lawsuits filed by those who identify themselves as public or environmental interest groups seeking to invalidate pesticide product registrations and/or challenge the way federal or state governmental entities apply the rules and regulations governing pesticide produce use.

The pace of change together with the lack of regulatory harmony could result in unintended noncompliance.

Responding to these changes and meeting existing and new requirements may involve significant costs or capital expenditures or require changes in business practice that could result in reduced profitability.

The failure to receive necessary permits or approvals could have near- and long-term effects on Corteva’s ability to produce and sell some current and future products.

The degree of public understanding and acceptance or perceived public acceptance of Corteva’s biotechnology and other agricultural products and technologies can affect Corteva’s sales and results of operations by affecting planting approvals, regulatory requirements and customer purchase decisions.

Concerns and claims regarding the safe use of seeds with biotechnology traits and crop protection products in general, their potential impact on health and the environment, and the perceived impacts of biotechnology on health and the environment, reflect a growing trend in societal demands for increasing levels of product safety and environmental protection.

These include concerns and claims that increased use of crop protection products, drift, inversion, volatilization and the use of biotechnology

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traits meant to reduce the resistance of weeds or pests to control by crop protection products, could increase or accelerate such resistance and otherwise negatively impact health and the environment.

These include concerns and claims that increased use of crop protection products, drift, inversion, volatilization and the use of biotechnology traits meant to reduce the resistance of weeds or pests to control by crop protection products, could increase or accelerate such resistance and otherwise negatively impact health and the environment.

These and other concerns could manifest themselves in stockholder proposals, preferred purchasing, delays or failures in obtaining or retaining regulatory approvals, delayed product launches, lack of market acceptance, product discontinuation, continued pressure for and adoption of more stringent regulatory intervention and litigation, termination of raw material supply agreements and legal claims.

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As a result, Corteva continues to face significant competitive challenges.

Delays in obtaining regulatory approvals to import, including those related to the importation of crops grown from seeds containing certain traits or treated with specific chemicals, may influence the rate of adoption of new products in globally traded crops.

Obtaining and maintaining regulatory approvals requires submitting a significant amount of information and data, which may require participation from technology providers.

Regulatory standards and trial procedures are continuously changing.

The pace of change together with the lack of regulatory harmony could result in unintended noncompliance.

The failure to receive necessary permits or approvals could have near- and long-term effects on Corteva’s ability to produce and sell some current and future products.

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Corteva’s business may be materially affected by competition from manufacturers of generic products.

Competition from manufacturers of generic products is a challenge for Corteva’s branded products around the world, and the loss or expiration of intellectual property rights can have a significant adverse effect on Corteva’s revenues.

The date at which generic competition commences may be different from the date that the patent or regulatory exclusivity expires.

The date at which

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generic competition commences may be different from the date that the patent or regulatory exclusivity expires.

However, upon the loss or expiration of patent protection for one of Corteva’s products or of a product that Corteva licenses, or upon the “at- risk” launch (despite pending patent infringement litigation against the generic product) by a generic manufacturer of a generic version of one of Corteva’s patented products or of a product that Corteva licenses, Corteva can lose a major portion of revenues for that product, which can have a material adverse effect on Corteva’s business.

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Costs and capital expenditures relating to environmental, health or safety matters are subject to evolving regulatory requirements and depend on the timing of the promulgation and enforcement of specific standards which impose the requirements.

Moreover, changes in environmental regulations could inhibit or interrupt Corteva’s operations, or require modifications to its facilities.

Moreover, changes in environmental regulations, including those related to climate change, could inhibit or interrupt Corteva’s operations, or require modifications to its facilities in the future.

Accordingly, environmental, health or safety regulatory matters could result in significant unanticipated costs or liabilities, which may be materially higher than Corteva’s accruals.

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Climate change may also affect the availability and suitability of arable land and contribute to unpredictable shifts in the average growing season and types of crops produced.

Reduction in ethanol demand driven by declines in crude oil and gasoline consumption could negatively impact demand for corn, which can negatively impact the company's business, financial condition and results of operations.

During 2020 global and U.S.

crude oil price benchmarks suffered record declines in demand resulting from the COVID-19 pandemic stay-at-home orders and over-supply due to price disputes between Russia and Saudi Arabia.

ethanol producers have shut down their facilities and declared “force majeure” on shipments for corn purchases due to depressed demand.

Similar trends with respect to bio-fuels, like ethanol, are occurring globally.

Approximately one-third of U.S.

corn has been historically used in the production of ethanol for gasoline.

However, U.S.

ethanol supplies bottomed at approximately 53% of its pre-COVID-19 U.S.

lockdown levels in April 2020 and have not yet rebounded to pre-COVID lockdown levels.

This lost corn utilization to manufacture ethanol may add to ending corn inventory stock.

Continued declines in the demand for corn, or over-supply, will negatively impact our business, financial condition, and results of operations.

Corteva’s business is subject to various competition and antitrust, rules and regulations around the world, and as the size of its business grows, scrutiny of its business by legislators and regulators in these areas may intensify.

On July 9, 2021, President Biden issued an executive order promoting competition in the American economy.

The order encouraged further examination and efforts by U.S.

regulatory agencies to avoid market concentrations for agricultural inputs, that could challenge the survival of family farms.

The executive order also directs the U.S.

Secretary of Agriculture to take action to ensure that the intellectual property system, while still incentivizing innovation, does not also unnecessarily reduce competition in seed and other agricultural input markets beyond what is reasonably contemplated by the U.S.

Patent Act and propose strategies for addressing those concerns across intellectual property, antitrust, and other relevant laws.

While the ultimate impact of the executive order will depend on the actions ultimately resulting from the U.S.

regulatory authorities, actions taken by such authorities may increase the regulation and regulatory costs associated with the agriculture industry in the future and restrict the company from pursuing certain growth opportunities, including mergers and acquisitions.

Scrutiny from regulators in the U.S.

and abroad may intensify as Corteva’s business presence grows.

This scrutiny and related investigations, even when not resulting in an enforcement action, may result in damage to a company’s reputation, significant

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defense expense, as well as become a distraction to management.

Antitrust and competition enforcement actions may result in regulators imposing fines, penalties, or restrictions on a company’s business practices in a manner that may significantly impact its results of operations.

Corteva’s sales to its customers may be adversely affected should a company successfully establish an intermediary platform for the sale of Corteva’s products or otherwise position itself between Corteva and its customers.

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Corteva’s business, results of operations and financial condition could be adversely affected by industrial espionage and other disruptions to its supply chain, information technology or network systems.

Business and/or supply chain disruptions, plant and/or power outages and information technology system and/or network disruptions, regardless of cause including acts of sabotage, employee error or other actions, geo-political activity, local epidemics or pandemics, weather events and natural disasters could seriously harm Corteva’s operations as well as the operations of its customers and suppliers.

Business and/or supply chain disruptions, plant and/or power outages and information technology system and/or network disruptions, regardless of cause including acts of sabotage, employee error or other actions, geo-political activity, military conflict, local epidemics or pandemics, weather events and natural disasters could seriously harm Corteva’s operations as well as the operations of its customers and suppliers.

For example, a pandemic in locations where Corteva has significant operations, sales, or key suppliers could have a material adverse effect on Corteva’s results of operations.

In addition, terrorist attacks and natural disasters have increased stakeholder concerns about the security and safety of chemical production and distribution.

Business and/or supply chain disruptions may also be caused by security breaches, which could include, for example, attacks on information technology and infrastructure by hackers, viruses, breaches due to employee error or actions or other disruptions.

Business and/or supply chain disruptions may also be caused by security breaches, which could include, for example, ransomware attacks and attacks on information technology and infrastructure by hackers, viruses, breaches due to employee

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secrets and confidential business information, legal claims or proceedings, reporting errors, processing inefficiencies, negative media attention, loss of sales and interference with regulatory compliance.

error or actions or other disruptions.

Corteva and/or its suppliers may fail to effectively prevent, detect and recover from these or other security breaches and, as a consequence, such breaches could result in misuse of Corteva’s assets, business disruptions, loss of property including trade secrets and confidential business information, legal claims or proceedings, reporting errors, processing inefficiencies, negative media attention, loss of sales and interference with regulatory and data privacy compliance.

Like most major corporations, Corteva is the target of industrial espionage, including cyber-attacks, from time to time.

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If Corteva is not able to fully offset the effects of higher input costs, it could have a significant impact on its financial results.

Corteva may be unable to achieve all the benefits that it expects to achieve from future restructuring and other cost savings initiatives, which may adversely affect Corteva’s results and negatively affect the value of Corteva common stock.

Restructurings, cost savings programs, synergy expectations and other similar initiatives can be complex, costly and time-consuming processes.

Management may face significant challenges in implementing or realizing the expected benefits from these programs, many of which may be beyond the control of management, including, without limitation:

• difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects;

• the possibility of faulty assumptions underlying expectations regarding the integration or separation process, including with respect to the intended tax efficient transactions;

• unanticipated issues in integrating, replicating or separating information technology, communications programs, financial procedures and operations, and other systems, procedures and policies;

• addressing differences in business culture and retaining key personnel;

• unanticipated changes in applicable laws and regulations;

• managing tax costs or inefficiencies associated with integrating the operations of Corteva and the intended tax efficient separation transactions;

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• coordinating geographically separate organizations;

• failing to successfully optimize Corteva’s facilities footprint and operational programs;

• failing to otherwise integrate EID’s or DAS’s respective agriculture businesses, including their technology platforms.

Some of these factors are outside of Corteva’s control and any one of them could result in increased costs and diversion of management’s time and energy, as well as decreases in the amount of expected revenue which could materially impact Corteva’s business, financial condition and results of operations.

If the anticipated benefits and cost savings from restructurings, cost saving initiatives or transactions are not realized fully or take longer to realize than expected, the value of Corteva’s common stock, revenues, levels of expenses and results of operations may be affected adversely.

There can be no assurance that Corteva will be able to sustain any or all the cost savings generated from its restructurings or cost savings initiatives.

Corteva’s liquidity, business, results of operations and financial condition could be impaired if it is unable to raise capital through the capital markets or short-term debt borrowings.

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If Corteva is unable to renew these agreements or access the debt markets to support customer financing, Corteva’s sales may be negatively impacted, which could result in increased borrowing needs to fund working capital.

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Corteva’s earnings, operations and business, among other things, will impact its credit ratings, costs and availability of financing.

A decrease in the ratings assigned to Corteva or EID by the ratings agencies may negatively impact Corteva’s access to the debt capital markets and increase Corteva’s cost of borrowing and the financing of its seasonal working capital.

There can be no assurance that Corteva or EID will maintain its current or prospective credit ratings.

Any actual or anticipated changes or downgrades in such credit ratings may have a negative impact on Corteva’s liquidity, capital position or access to capital markets.

A decrease in the ratings assigned to Corteva or EID by the ratings agencies may negatively impact Corteva’s liquidity, access to the debt capital markets and increase Corteva’s cost of borrowing and the financing of its seasonal working capital.

Corteva’s customers may be unable to pay their debts to Corteva, which could adversely affect Corteva’s results.

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Increases in pension and other post-employment benefit plan funding obligations may adversely affect Corteva’s results of operations, liquidity or financial condition.

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Through Corteva's ownership of EID, Corteva maintains EID defined benefit pension and other post-employment benefit plans.

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pension plan, and about $140 million for its other post-employment benefit ("OPEB") plans.

Additionally, Corteva may make potential discretionary contributions to the principal U.S.

pension plan in 2021.

While not anticipated for 2022, Corteva may make potential discretionary contributions to the principal U.S.

pension plan.

Corteva, furthermore, may be required to make significant contributions to its pension plans in the future, which could adversely affect Corteva’s results of operations, liquidity and financial condition.

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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.

Corteva expects to base such estimates on several 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 Potentially Responsible Parties (“PRPs”) at multi-party sites and the number of, and financial viability of, other PRPs.

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viability of, other PRPs.

Considerable uncertainty exists with respect to environmental remediation costs and, under adverse changes in circumstances, the potential liability may be materially higher than Corteva’s accruals.

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Various factors or developments can lead to changes in current estimates of liabilities.

Such factors and developments may include, but are not limited to, additional data, safety or risk assessments, as well as a final adverse judgment, significant

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settlement or changes in applicable law.

Such factors and developments may include, but are not limited to, additional data, safety or risk assessments, as well as a final adverse judgment, significant settlement or changes in applicable law.

A future adverse ruling or unfavorable development could result in future charges that could have a material adverse effect on Corteva.

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Corteva’s operations outside the United States are subject to risks and restrictions, including fluctuations in foreign-currency exchange rates;

exchange control regulations;

exchange and price control regulations;

corruption risks;

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Further, Corteva’s largest currency exposures are the Brazilian Real, Swiss franc, European Euro ("EUR"), and Canadian dollar.

Market uncertainty or an economic downturn in these geographic areas could reduce demand for Corteva’s products and result in decreased sales volume, which could have a negative impact on Corteva’s results of operations.

Inflation, market uncertainty or an economic downturn in these

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geographic areas could reduce demand for Corteva’s products and result in decreased sales volume, which could have a negative impact on Corteva’s results of operations.

In addition, changes in exchange rates may affect Corteva’s results of operations, financial condition and cash flows in future periods.

Corteva actively manages currency exposures that are associated with net monetary asset positions and committed purchases.

Failure to effectively manage acquisitions, divestitures, alliances and other portfolio actions could adversely impact Corteva’s future results.

Failure to effectively manage acquisitions, divestitures, alliances, restructurings, cost savings initiatives and other portfolio actions may not have the results anticipated.

From time to time Corteva evaluates acquisition candidates that may strategically fit Corteva’s business and/or growth objectives.

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Moreover, Corteva might incur asset impairment charges related to acquisitions or divestitures that reduce its earnings.

In addition, if the execution or implementation of acquisitions, divestitures, alliances, joint ventures and other portfolio actions is not successful, it could adversely impact Corteva’s financial condition, cash flows and results of operations.

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In addition, if the execution of these transactions, initiatives, or portfolio actions is not successful, it could adversely impact Corteva’s financial condition, cash flows and results of operations.

Sentiment towards climate change and other environmental, social and governance (“ESG”) matters could adversely affect our stock price, results of operations, and access to capital.

Since 2020, Corteva has announced sustainability goals, including adopting its greenhouse gas emission reduction strategy and targets for 2030 and inclusion, diversity and equity goals for 2026.

Execution of these strategies and the achievements of Corteva’s sustainability goals is subject to risk and uncertainties, many of which are out of its control.

Failure to achieve its sustainability goals within the currently projected costs and expected timeframes could damage Corteva’s reputation, customer and investor relationships, or its access to financing.

Further, given investors' increased focus related to ESG matters, such a failure could cause stockholders to reduce their ownership holdings, all of which, in turn could adversely affect Corteva’s business, financial condition, results of operations and cash flows and reduce its stock price.

Global or regional health pandemics or epidemics, including COVID-19, could negatively impact the company's business, financial condition and results of operations.

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These relative differences could widen and further adversely impact our results of operations and financial condition.

COVID-19 and the related government-imposed restrictions, including stay at home orders, has significantly impacted other economic activity and markets around the world, which could negatively impact the company's business, financial condition, and results of operations in numerous ways, including but not limited to those outlined below:

Increased market volatility resulting from COVID-19 disruptions has also limited the availability of certain manufacturing inputs.

Current and future COVID-19 outbreaks and resulting illness, travel restrictions and workforce disruptions could impact Corteva's global supply chain, its operations and its routes to market or those of its suppliers, co-manufacturers, or customers/distributors.

These disruptions or the company's failure to effectively respond to them could increase product or distribution costs, alter the timing of recognizing manufacturing costs, or impact the delivery of products to customers.

COVID-19 and the related government-imposed restrictions, including stay at home orders, has significantly impacted other economic activity and markets around the world.

Future outbreaks or pandemics could negatively impact the company's business, financial condition, and results of operations in numerous ways, including but not limited to those outlined below:

• Government or regulatory responses to pandemics could negatively impact the company's business.

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• The instability or unavailability of a farm workforce to harvest agricultural products could impact the company's customers’ ability to monetize their crop and potentially impact the collection of the company's customer receivables.

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• Continued commodity cost volatility is expected and the company's commodity hedging activities may not sufficiently offset this volatility.

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• Disruptions or uncertainties related to the COVID-19 outbreak for a sustained period of time could result in delays or modifications to the company's strategic plans and productivity initiatives.

• Increased volatility and pricing in the capital and commercial paper markets may reoccur and impact the company's access to preferred sources of liquidity resulting in higher borrowing costs.

• Increased volatility and pricing in the capital and commercial paper markets may re-occur and impact the company's access to preferred sources of liquidity resulting in higher borrowing costs.

The company cannot assure investors that additional liquidity will be readily available or available on favorable terms.

• Increased market volatility may bring unprecedented market conditions making it difficult for the company to adequately forecast customer demand or price its products.

Therefore, the impact of the recent COVID-19 outbreak and the unprecedented economic conditions resulting from it will have on the company's consolidated results of operations is uncertain, but could still negatively impact the company's business operations, financial performance and results of operations in the future.

Corteva’s business or stock price could be negatively affected as a result of actions of activist stockholders.

Corteva's board of directors and management value constructive input from our stockholders and are committed to acting in the best interests of all our stockholders.

However, Corteva may be subject to actions or proposals from stockholders or others that may not align with its business strategies or the interests of our other stockholders.

The company recently received a notice from Starboard Value and Opportunity Master Fund Ltd.

(“Starboard”) of its intention to nominate eight director candidates for election to the company’s board of directors at the company’s 2021 Annual Meeting of Stockholders.

Starboard has also made public statements calling for changes to our management.

Responding to these actions by Starboard and potential actions by other activist stockholders could be costly and time-consuming, disrupt the company's operations and divert the attention of its board of directors, management and our employees.

A contested election with respect to the company's directors could also require the company to incur substantial legal, public relations and other advisory fees and proxy solicitation expenses.

In addition, perceived uncertainties as to Corteva's future direction, strategy or leadership created

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as a consequence of activist stockholder initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, customers, employees, suppliers and other strategic partners.

The perceived uncertainties as to the company’s future direction, strategy or leadership, also could cause our stock price to experience periods of volatility.

Therefore, the result of the company’s consolidated results of operations in face of the ongoing COVID-19 outbreak, or another pandemic, and the unprecedented economic conditions which can result therefrom may negatively impact the company's business operations, financial performance and results of operations in the future.

If we are unable to recruit and retain key personnel, our business may be harmed.

Much of Corteva’s future success depends on the continued service, availability and performance of our senior management and highly-skilled personnel across all levels of the organization.

Corteva’s senior management has acquired specialized knowledge and skills with respect to its business, and the loss of any of these individuals could harm its business, especially if we are not successful in developing adequate succession plans.

Our efforts to attract, develop, integrate and retain highly skilled employees with appropriate qualifications may be compounded by difficulties in recruiting, hiring and retaining urgently needed specialized employees at a regional level where there may be significant competition between employers.

If we are unable to continue to successfully attract, retain, and develop key personnel, our business may be harmed.

Risks Related to Our Intellectual Property

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In addition, because of the rapid pace of technological change, the confidentiality of patent applications in some jurisdictions and/or the uncertainty in predicting the outcome of complex proceedings relating to ownership and the scope of patents relating to certain emerging technologies, competitors may be issued patents related to Corteva’s business unexpectedly.

These patents could reduce the value of Corteva’s commercial or pipeline products or, to the extent they cover key technologies on which Corteva has relied, require Corteva to seek to obtain licenses (and Corteva cannot ensure it would be able to obtain such a license on acceptable terms) or cease using the technology, no matter how valuable to Corteva’s business.

These patents could reduce the value of Corteva’s commercial or pipeline products or, to the extent they cover key technologies on which

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Corteva has relied, require Corteva to seek to obtain licenses (and Corteva cannot ensure it would be able to obtain such a license on acceptable terms) or cease using the technology, no matter how valuable to Corteva’s business.

Legislation and jurisprudence on patent protection is evolving and changes in laws could affect Corteva’s ability to obtain or maintain patent protection for, and otherwise enforce Corteva’s patents related to, its products.

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In addition, those involved in the distribution of counterfeit products use complex transport routes to evade customs controls by disguising the true source of their products.

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Corteva’s global reputation makes its products prime targets for counterfeiting organizations.

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These restrictions may make it more difficult, time consuming and/or expensive for Corteva to develop and commercialize certain new products and services, or may result in certain of its products or services being later to market than those of its competitors.

Risks Related to The Separation

The company may be unable to achieve some or all of the benefits that it expected to achieve from the Separation from DowDuPont.

Corteva continues to, among other things, focus its financial and operational resources on its specific business, growth profile and strategic priorities, guide its processes and infrastructure to focus on its core strengths, maintain a capital structure designed to meet its specific needs and more effectively respond to agricultural industry dynamics, all of which are benefits the company expected to achieve from its Separation.

However, the company may be unable to fully achieve some or all of these benefits.

For example, in order to position itself for the Separation and Distribution, the company undertook a series of strategic, structural and process realignment and restructuring actions within its operations.

These actions may not provide the benefits the company expected, and could lead to disruption of operations, loss of, or inability to recruit, key personnel needed to operate and grow its businesses following the Separation, weakening of its internal standards, controls or procedures and impairment of its key customer and supplier relationships.

If the company fails to achieve some or all of the benefits that it expected to achieve as an independent company, or does not achieve them in the time expected, its business, financial condition and results of operations could be materially and adversely affected.

Further, the company’s business traditionally was operated under the umbrella of DowDuPont’s corporate organization, with portions of its businesses being integrated with the businesses of Historical DuPont and Historical Dow.

This integration has

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historically permitted its business (or portions thereof) to enjoy economies of scope and scale in costs, employees, vendor relationships and customer relationships, both as part of the DowDuPont organization and within the Historical DuPont and Historical Dow internal corporate structures.

The loss of these benefits could have a material adverse effect on the company’s business, results of operations and financial condition.

Risks Related to The Separation

In connection with the Separation the company has assumed, and agreed to indemnify DuPont and Dow for, certain liabilities.

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Any unpaid creditor could claim that DuPont did not receive fair consideration or reasonably equivalent value in the Separation and Corteva Distribution, and that the Separation and Corteva Distribution left DuPont insolvent or with unreasonably small capital or that DuPont intended or believed it would incur debts beyond its ability to pay such debts as they matured.

Additionally, under its indemnity provisions of the Separation Agreement, the company could find its liabilities increased as a result of a court concluding that Historical

Additionally, under its indemnity provisions of the Separation Agreement, the company could find its liabilities increased as a result of a court concluding that Historical DuPont, Historical Dow or DowDuPont executed a fraudulent conveyance in connection with divestitures and spin-offs of any one of their historical operations, including Chemours.

If a court were to agree with such a plaintiff, then such court could void the Separation and Distribution as a fraudulent transfer or impose substantial liabilities on Corteva, which could materially

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What changed 10-K

Item 1. Business