CORTEVA, INC. 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 aboutCorteva's strategy for growth, product development, regulatory approval, market position, liquidity, anticipated benefits of recent acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures, and financial results, as well as its expectations related to its separation ofCorteva from DowDuPont and the agreements related thereto, 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 beyondCorteva'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 onCorteva's business, results of operations and financial condition. Some of the important factors that could causeCorteva'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 ofCorteva's products; (ii) failure to successfully develop and commercializeCorteva's pipeline; (iii) effect of the degree of public understanding and acceptance or perceived public acceptance ofCorteva's biotechnology and other agricultural products; (iv) effect of changes in agricultural and related policies of governments and international organizations; (v) effect of competition and consolidation inCorteva's industry; (vi) effect of competition from manufacturers of generic products; (vii) costs of complying with evolving regulatory requirements and the effect of actual or alleged violations of environmental laws or permit requirements; (viii) effect of climate change and unpredictable seasonal and weather factors; (ix) risks related to oil and commodity markets; (x) competitor's establishment of an intermediary platform for distribution ofCorteva's products; (xi) impact ofCorteva's dependence on third parties with respect to certain of its raw materials or licenses and commercialization; (xii) effect of industrial espionage and other disruptions toCorteva's supply chain, information technology or network systems; (xiii) effect of volatility inCorteva's input costs; (xiv) failure to realize the anticipated benefits of the internal reorganizations taken by DowDuPont in connection with the spin-off ofCorteva and other cost savings initiatives; (xv) failure to raise capital through the capital markets or short-term borrowings on terms acceptable toCorteva ; (xvi) failure ofCorteva's customers to pay their debts toCorteva , including customer financing programs; (xvii) increases in pension and other post-employment benefit plan funding obligations; (xviii) risks related to the indemnification obligations of legacy EID liabilities in connection with the separation ofCorteva ; (xix) effect of compliance with laws and requirements and adverse judgments on litigation; (xx) risks related toCorteva's global operations; (xxi) failure to effectively manage acquisitions, divestitures, alliances and other portfolio actions; (xxii) risks related to COVID-19; (xxiii) risks related to activist stockholders; (xxiv)Corteva's intellectual property rights or defend against intellectual property claims asserted by others; (xxv) effect of counterfeit products; (xxvi)Corteva's dependence on intellectual property cross-license agreements; (xxvii) other risks related to the separation from DowDuPont; (xxviii) risks related to the Biden executive orderPromoting Competition in the American Economy; and (xxix) risks associated with our CEO transition, including failure to timely identify a successor CEO. Additionally, there may be other risks and uncertainties thatCorteva is unable to currently identify or thatCorteva 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 ofCorteva'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 or other estimates is included in the "Risk Factors" section ofCorteva's 2020 Annual Report, as modified by subsequent Quarterly Reports on Forms 10-Q and Current Reports on Form 8-K. 42 -------------------------------------------------------------------------------- Table of Contents Recent Developments COVID-19 Pandemic OnMarch 11, 2020 , theWorld Health Organization ("WHO") declared the novel coronavirus disease ("COVID-19") a pandemic. The global health crisis caused by COVID-19 and the related government actions and stay at home orders have negatively impacted economic activity and increased political instability across the globe. Since the crisis beganCorteva has engaged its global Integrated Health Services Pandemic & Infectious Disease Team to take actions and implement guidelines and protocols in response to the COVID-19 pandemic described in its 2020 Annual Report, Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, COVID-19 Pandemic. When COVID-19 is demonstrably contained, the company anticipates a rebound in economic activity, depending on the rate, pace, and effectiveness of the containment efforts deployed by various national, state, and local governments, vaccination rates, and the ability of COVD-19 variants to overcome containment efforts, available vaccines, and medical treatments.Corteva will continue to actively monitor the situation and may take further actions altering its business operations that it determines are in the best interests of its stakeholders, or as required by federal, state, or local authorities. It is not clear what the potential effects any such alterations or modifications may have on the company's business, including the effects on its customers, employees, and prospects, or on its financial results for 2021 and beyond. With the ongoing volatility in global markets, the company will continue to monitor various factors that could impact earnings and cash flows of the business, including, but not limited to the inflation of, or unavailability of raw material inputs and transportation and logistics services, currency fluctuations, expectations of future planted area (as influenced by consumer demand, ethanol markets and government policies and regulations), trade and purchasing of commodities globally and relative commodity prices. 2021 Restructuring Actions OnFebruary 1, 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. As a result of these actions, the company expects to record total pre-tax restructuring charges of approximately$130 million to$170 million , comprised of approximately$40 million to$50 million of severance and related benefit costs,$40 million to$60 million of asset related charges,$10 million to$15 million of asset retirement obligations and$40 million to$45 million of costs related to contract terminations (contract terminations includes early lease terminations). Future cash payments related to this charge are anticipated to be approximately$80 million to$100 million , primarily related to the payment of severance and related benefits, asset retirement obligations, and costs related to contract terminations. The restructuring actions associated with this charge are expected to be substantially complete in 2021. During the six months endedJune 30, 2021 , the company recorded pre-tax charges of$110 million , recognized in restructuring and asset related charges - net in the company's interim Consolidated Statement of Operations, primarily related to the payment of severance and related benefits and contract termination charges. The 2021 Restructuring Actions are expected to contribute to the company's ongoing cost and productivity improvement efforts through achieving an estimated$70 million of savings on a run rate basis by 2023. See Note 5 - Restructuring and Asset Related Charges - Net, to the interim Consolidated Financial Statements for additional information. Share Buyback Plan OnAugust 5, 2021 ,Corteva, Inc. announced that its Board of Directors authorized a$1.5 billion share repurchase program to purchaseCorteva, Inc.'s common stock, par value$0.01 per share, without an expiration date. The timing, price and volume of purchases will be based on market conditions, relevant securities laws and other factors. OnJune 26, 2019 ,Corteva, Inc. announced that its Board of Directors authorized a$1 billion share repurchase program to purchaseCorteva, Inc.'s common stock, par value$0.01 per share, without an expiration date. The company expects to complete the share repurchase program in 2021. The timing, price and volume of purchases will be based on market conditions, relevant securities laws and other factors. During the three and six months endedJune 30, 2021 , the company purchased and retired 4,324,000 shares and 11,970,000 shares, respectively, in the open market for a total cost of$200 million and$550 million , respectively. During the six months endedJune 30, 2020 , the company purchased and retired 1,865,000 shares in the open market for a total cost of$50 million . 43
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Overview
The following is a summary of results from continuing operations for the three
months ended
•The company reported net sales of
•Cost of goods sold ("COGS") totaled $3,010 million in the second quarter of
2021, up from $2,829 million in the second quarter of 2020, primarily driven by
increased volumes and higher input costs, freight and logistics, which are
primarily market-driven, partially offset by ongoing cost and productivity
actions.
•Restructuring and asset related charges - net were $135 million in the second
quarter of 2021, a decrease from $179 million in the second quarter of 2020. The
charges for the three months ended June 30, 2021 primarily relate to $112
million of non-cash accelerated prepaid royalty amortization expense related to
Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits,
and $21 million related to severance and related benefit costs, and asset
related charges associated with 2021 Restructuring Actions.
•The provision for income taxes for the three months ended
•Income from continuing operations after income taxes was
•Operating EBITDA was$1,461 million for the three months endedJune 30, 2021 , up from$1,236 million for the three months endedJune 30, 2020 primarily driven by volume gains and strong price execution, which more than offset cost headwinds. The company experienced cost headwinds in the quarter including higher input costs, freight and logistics, which are primarily market-driven, and higher commission expense. The headwinds are partially offset by the company's ongoing execution on its productivity programs. Refer to page 56 for further discussion of the company's Non-GAAP financial measures.
The following is a summary of results from continuing operations for the six
months ended
•The company reported net sales of
•COGS totaled$5,430 million in the six months ended 2021, up from$5,098 million in the six months ended 2020, primarily driven by increased volumes and higher input costs, freight and logistics, which are primarily market-driven, partially offset by ongoing cost and productivity actions. •Restructuring and asset related charges - net were$235 million in the six months ended 2021, a decrease from$249 million in the six months ended 2020. The charges for the six months endedJune 30, 2021 primarily relate to$119 million of non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits, and$110 million relate to severance and related benefit costs and asset related charges, and contract termination charges associated with 2021 Restructuring Activities. •The provision for income taxes for the six months endedJune 30, 2021 includes net tax benefits of$25 million associated with changes in accruals for certain prior year tax positions in various jurisdictions.
•Income from continuing operations after income taxes was
•Operating EBITDA was$2,365 million , up from$2,030 million for the six months endedJune 30, 2020 , primarily driven by strong price execution, volume gains, and favorable mix, which more than offset cost headwinds. The company experienced cost headwinds in the quarter, including higher input costs, freight and logistics, which are primarily market-driven, and higher commission expense. The headwinds are partially offset by the company's ongoing execution on its productivity programs. Refer to page 56 for further discussion of the company's Non-GAAP financial measures. 44 -------------------------------------------------------------------------------- Table of Contents In addition to the financial highlights above, the following events occurred during or subsequent to the six months endedJune 30, 2021 :
•The company returned approximately
•OnAugust 5, 2021 ,Corteva, Inc. announced that its Board of Directors authorized a$1.5 billion share repurchase program to purchaseCorteva, Inc.'s common stock, par value$0.01 per share, without an expiration date. The timing, price and volume of purchases will be based on market conditions, relevant securities laws and other factors. •OnJuly 21, 2021 , the company's Board of Directors approved an increase in the common stock dividend of$0.13 per share to$0.14 per share. 45
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Selected Financial Data
Three Months Ended Six Months Ended
In millions, except per share amounts June 30 ,
2021 2020 2021 2020
Net sales $ 5,627 $ 5,191 $ 9,805 $ 9,147
Cost of goods sold $ 3,010 $ 2,829 $ 5,430 $ 5,098
Percent of net sales 53 % 54 % 55 % 56 %
Research and development expense$ 293 $ 273 $ 574 $ 553 Percent of net sales 5 % 5 % 6 % 6 % Selling, general and administrative expenses$ 998 $ 965 $ 1,731 $ 1,722 Percent of net sales 18 % 19 % 18 % 19 %
Effective tax rate on continuing operations 21.8 % 9.2 %
22.1 % 16.4 %
Income from continuing operations after income taxes$ 1,018 $ 766
Income from continuing operations available to Corteva common stockholders$ 1,015 $ 760
Basic earnings per share of common stock from continuing operations$ 1.37 $ 1.01 $ 2.19 $ 1.37 Diluted earnings per share of common stock from continuing operations$ 1.37 $ 1.01 $ 2.18 $ 1.37 46
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Table of Contents Results of OperationsNet Sales Net sales were$5,627 million and$5,191 million for the three months endedJune 30, 2021 and 2020, respectively. The increase was primarily driven by a 5 percent increase in volume versus the prior year period. Volume increases were driven by seasonal timing and increased soybean acres inNorth America , together with continued adoption of new technology in both segments. Currency and local price represented increases of 2 percent and 1 percent, respectively. Three Months Ended June 30, 2021 2020 Net Sales Net Sales ($ Millions) % ($ Millions) % Worldwide$ 5,627 100 %$ 5,191 100 % North America1 3,842 68 % 3,566 69 % EMEA2 710 13 % 643 12 % Latin America 588 10 % 515 10 % Asia Pacific 487 9 % 467 9 % Q2 2021 vs. Q2 2020 Percent Change Due To: Net Sales Change Local Price & Portfolio / $ In millions $ % Product Mix Volume Currency Other North America1 $ 276 8 % - % 6 % 2 % - % EMEA2 67 10 % 5 % (1) % 6 % - % Latin America 73 14 % 6 % 5 % 3 % - % Asia Pacific 20 4 % 2 % (2) % 5 % (1) % Total $ 436 8 % 1 % 5 % 2 % - % 1.RepresentsU.S. &Canada . 2.Europe,Middle East , andAfrica ("EMEA"). Net sales were$9,805 million and$9,147 million for the six months endedJune 30, 2021 and 2020, respectively. The increase was primarily driven by a 4 percent increase in volume versus the prior-year period. Gains were driven by the continued penetration of new products and strong execution globally. Local price and currency represented increases of 2 percent and 1 percent, respectively. Six Months Ended June 30, 2021 2020 Net Sales Net Sales ($ Millions) % ($ Millions) % Worldwide$ 9,805 100 %$ 9,147 100 % North America1 5,585 57 % 5,331 58 % EMEA2 2,312 24 % 2,110 23 % Latin America 1,106 11 % 949 11 % Asia Pacific 802 8 % 757 8 % 47
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First Half 2021 vs. First Half
2020 Percent Change Due To:
Net Sales Change Local Price & Portfolio /
$ In millions $ % Product Mix Volume Currency Other
North America1 $ 254 5 % - % 4 % 1 % - %
EMEA2 202 10 % 4 % 1 % 5 % - %
Latin America 157 17 % 9 % 14 % (6) % - %
Asia Pacific 45 6 % 2 % 1 % 5 % (2) %
Total $ 658 7 % 2 % 4 % 1 % - %
1.Represents U.S. & Canada .
2.Europe, Middle East , and Africa ("EMEA").
Cost of Goods Sold
COGS was $3,010 million (53 percent of net sales) and $2,829 million (54 percent
of net sales) for the three months ended June 30, 2021 and 2020, respectively.
The increase was primarily driven by higher input costs, freight and logistics,
which are primarily market-driven, an increase in volumes in both crop
protection and seed and unfavorable currency, offset by ongoing cost and
productivity actions. The market driven trends are expected to continue as
global supply chains and logistics remain constrained across industries.
COGS was $5,430 million (55 percent of net sales) and $5,098 million (56 percent
of net sales) for the six months ended June 30, 2021 and 2020, respectively. The
increase was primarily driven by higher input costs, freight and logistics,
which are primarily market-driven, an increase in volumes in both crop
protection and seed and unfavorable currency. The increases in costs are
partially offset by ongoing cost and productivity actions. The market-driven
trends are expected to continue as global supply chains and logistics remain
constrained across industries.
Research and Development Expense
R&D expense was
R&D expense was
Selling, General and Administrative Expenses SG&A expenses were$998 million (18 percent of net sales) and$965 million (19 percent of net sales) for the three months endedJune 30, 2021 and 2020, respectively. The increase was primarily driven by increases in commission expense and unfavorable currency, partially offset by lower bad debt expense and ongoing cost and productivity actions taken to curtail spending. SG&A expenses were$1,731 million (18 percent of net sales) and$1,722 million (19 percent of net sales) for the six months endedJune 30, 2021 and 2020, respectively. The increase was primarily driven by higher commission expense, unfavorable currency, and selling expenses to drive sales, partially offset by lower bad debt expense, functional spend, and travel expense due to COVID-19 related restrictions put into place late in the first quarter of 2020. Amortization of Intangibles Intangible asset amortization was$180 million and$176 million for the three months endedJune 30, 2021 and 2020, respectively, and$363 million and$339 million for the six months endedJune 30, 2021 and 2020, respectively. The increase was primarily driven by amortization of the trade name asset that was changed from indefinite lived intangible asset to definite lived in the fourth quarter of 2020. See Note 11 - Other Intangible Assets, to the interim Consolidated Financial Statements for additional information. 48 -------------------------------------------------------------------------------- Table of Contents Restructuring and Asset Related Charges - Net Restructuring and asset related charges - net were$135 million and$179 million for the three months endedJune 30, 2021 and 2020, respectively. The charges in the second quarter of 2021 primarily relate to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits under the Execute to Win Productivity Program and severance and related benefit costs, asset related charges, and contract termination charges associated with 2021 Restructuring Actions. The charges in the second quarter of 2020 related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits and severance and related benefit costs and asset related charges under the Execute to Win Productivity Program. Restructuring and asset related charges - net were$235 million and$249 million for the six months endedJune 30, 2021 and 2020, respectively. The charges in the first half of 2021 primarily related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits under the Execute to Win Productivity Program and severance and related benefit costs, asset related charges, and contract termination charges associated with 2021 Restructuring Actions. The charges in the first half of 2020 primarily related to non-cash accelerated prepaid royalty amortization expense related to Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits and asset related charges and severance and related benefit costs under the Execute to Win Productivity Program.
See Note 5 - Restructuring and Asset Related Charges, Net, to the interim Consolidated Financial Statements for additional information.
Other Income - Net Other income - net was$298 million and$89 million for the three months endedJune 30, 2021 and 2020, respectively. The increase was primarily due to an increase in non-operating pension and other post-employment benefit credit, driven by theDecember 2020 OPEB plan amendments as discussed in the 2020 Annual Report. The increase was partially offset by a net exchange loss during the three months endedJune 30, 2021 compared to a net exchange gain during the three months endedJune 30, 2020 . Other income - net was$635 million and$90 million for the six months endedJune 30, 2021 and 2020, respectively. The increase was primarily due to an increase in non-operating pension and other post-employment benefit credit, driven by theDecember 2020 OPEB plan amendments as discussed in the 2020 Annual Report. In addition, Other income - net for the six months endedJune 30, 2020 includes a$(53) million loss on the sale of the La Porte site. The company routinely uses forward exchange contracts to offset its net exposures, by currency denominated monetary assets and liabilities of its operations. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes. The net pre-tax exchange gains and losses are recorded in other income - net and the related tax impact is recorded in provision for (benefit from) income taxes on continuing operations in the interim Consolidated Statement of Operations.
See Note 6 - Supplementary Information, to the interim Consolidated Financial Statements for additional information.
Interest Expense Interest expense was$7 million and$14 million for the three months endedJune 30, 2021 and 2020, respectively, and$14 million and$24 million for the six months endedJune 30, 2021 and 2020, respectively. The change was primarily driven by lower average commercial paper balances and lower interest rates, partially offset by higher average long-term borrowings. Provision for Income Taxes on Continuing Operations The company's provision for income taxes on continuing operations was$284 million for the three months endedJune 30, 2021 on pre-tax income from continuing operations of$1,302 million , resulting in an effective tax rate of 21.8 percent. The effective tax rate was unfavorably impacted by geographic mix of earnings. Those unfavorable impacts were partially offset by$18 million of net tax benefits associated with changes in accruals for certain prior year tax positions in various jurisdictions, as well as tax benefits related to the issuance of stock-based compensation. The company's provision for income taxes on continuing operations was$78 million for the three months endedJune 30, 2020 on pre-tax income from continuing operations of$844 million , resulting in an effective tax rate of 9.2 percent. The effective tax rate was favorably impacted by geographic mix of earnings,$20 million of net tax benefits associated with changes in accruals for certain prior year tax positions in various jurisdictions, which includes a tax benefit of$14 million related to a return to accrual adjustment to reflect a change in estimate on the impact of a tax law enactment in a foreign jurisdiction. In addition, during the three months endedJune 30, 2020 , the company recognized a tax benefit of$51 million to provision for income 49 -------------------------------------------------------------------------------- Table of Contents taxes on continuing operations related to a return to accrual adjustment associated with an elective change in accounting method for the 2019 tax year impact of the 2017 Tax Cuts and Jobs Act's ("The Act") foreign tax provisions. The company's provision for income taxes on continuing operations was$462 million for the six months endedJune 30, 2021 on pre-tax income from continuing operations of$2,093 million , resulting in an effective tax rate of 22.1 percent. The effective tax rate 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 tax-deductible in their local jurisdictions, as well as geographic mix of earnings. Those unfavorable impacts were partially offset by$25 million of net tax benefits associated with changes in accruals for certain prior year tax positions in various jurisdictions, as well as tax benefits related to the issuance of stock-based compensation. The company's provision for income taxes on continuing operations was$205 million for the six months endedJune 30, 2020 on pre-tax income from continuing operations of$1,252 million , resulting in an effective tax rate of 16.4%. The effective tax rate was favorably impacted by geographic mix of earnings,$18 million of net tax benefits associated with changes in accruals for certain prior year tax positions in various jurisdictions, which includes a tax benefit of$14 million related to a return to accrual adjustment to reflect a change in estimate on the impact of a tax law enactment in a foreign jurisdiction. In addition, during the six months endedJune 30, 2020 , the company recognized a tax benefit of$51 million to provision for income taxes on continuing operations related to a return to accrual adjustment associated with an elective change in accounting method for the 2019 tax year impact of the The Act's foreign tax provisions. The effective tax rate was unfavorably impacted by the tax impact of certain net exchange losses recognized on the re-measurement of the net monetary asset positions which were not tax-deductible in their local jurisdictions, as well as tax charges related to the issuance of stock-based compensation. (Loss) Income from Discontinued Operations After Tax (Loss) income from discontinued operations after tax was$(45) million and$(55) million for the three and six months endedJune 30, 2021 , respectively, and$0 million and$1 million for the three and six months endedJune 30, 2020 . The three and six months endedJune 30, 2021 primarily reflects charges relating to PFAS environmental remediation activities for legacy operations at the Fayetteville Works facility and the settlement with theState of Delaware for PFAS related natural resource damage claims. Refer to Note 3 - Divestitures and Other Transactions, to the interim Consolidated Financial Statements for additional information. EID Analysis of Operations As discussed in Note 1 - Basis of Presentation, to the EID interim Consolidated Financial Statements, EID is a subsidiary ofCorteva, Inc. and continues to be a reporting company, subject to the requirements of the Exchange Act. The below relates to EID only and is presented to provide an Analysis of Operations, only for the differences betweenEID and Corteva, Inc. Interest Expense EID's interest expense was$20 million and$45 million for the three months endedJune 30, 2021 , respectively, and$42 million and$87 million for the six months endedJune 30, 2021 and 2020, respectively. The change was primarily driven by the items noted on page 49, under the header "Interest Expense," and by lower average borrowings on the related party loan betweenEID and Corteva, Inc. See Note 2 - Related Party Transactions, to the EID interim Consolidated Financial Statements for further information. Provision for Income Taxes on Continuing Operations EID's provision for income taxes on continuing operations was$281 million for the three months endedJune 30, 2021 on pre-tax income from continuing operations of$1,289 million , resulting in an effective tax rate of 21.8 percent. EID's provision for income taxes on continuing operations was$71 million for the three months endedJune 30, 2020 on pre-tax income from continuing operations of$813 million , resulting in an effective tax rate of 8.7 percent. EID's provision for income taxes on continuing operations was$455 million for the six months endedJune 30, 2021 on pre-tax income from continuing operations of$2,065 million , resulting in an effective tax rate of 22.0 percent. EID's provision for income taxes on continuing operations was$190 million for the six months endedJune 30, 2020 on pre-tax income from continuing operations of$1,189 million , resulting in an effective tax rate of 16.0 percent. EID's effective tax rates for the three and six months endedJune 30, 2021 and 2020 were driven by the items noted on page 49, under the header "Provision for Income Taxes on Continuing Operations" and a tax benefit related to the interest expense incurred on the related party loan betweenEID and Corteva, Inc. See Note 2 - Related Party Transactions, to the EID interim Consolidated Financial Statements for further information. 50
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Corporate Outlook The company is increasing its net sales outlook for 2021 and expects an approximate 7 - 8 percent increase in net sales. Additionally, the company is increasing earnings expectations for 2021 and expects an increase in Operating EBITDA and Operating Earnings Per Share of 20 - 25 percent and 33 - 40 percent, respectively.Corteva is not able to reconcile its forward-looking non-GAAP financial measures to its most comparableU.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 57 for Significant Items recorded in the three and six months endedJune 30, 2021 and 2020). During 2021, the company expects to record$130 million to$170 million for the 2021 Restructuring Actions and approximately$130 million for non-cash accelerated prepaid royalty amortization expense as restructuring and asset related charges. See Note 5 - Restructuring and Asset Related Charges - Net, to the interim Consolidated Financial Statements for additional information on the company's 2021 Restructuring Actions and accelerated prepaid royalty amortization. Recent Accounting Pronouncements See Note 2 - Recent Accounting Guidance, to the interim Consolidated Financial Statements for a description of recent accounting pronouncements. 51
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Segment Reviews The company operates in two reportable segments: Seed and Crop Protection.
Seed
The company's seed segment is a global leader in developing and supplying advanced germplasm and traits that produce optimum yield for farms around the world. The segment is a leader in many of the company's key seed markets, includingNorth America corn and soybeans,Europe corn and sunflower, as well asBrazil ,India ,South Africa andArgentina corn. The segment offers trait technologies that improve resistance to weather, disease, insects and herbicides used to control weeds, and trait technologies that enhance food and nutritional characteristics. In addition, the segment provides digital solutions that assist farmer decision-making with a view to optimize product selection and, ultimately, help maximize yield and profitability. 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 segment 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 segment is a leader in global herbicides, insecticides, nitrogen stabilizers and pasture and range management herbicides. Summarized below are comments on individual segment net sales and segment operating EBITDA for the three and six months endedJune 30, 2021 compared with the same period in 2020. The company defines segment operating EBITDA as earnings (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, corporate expenses, non-operating costs-net, 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 costs-net consists of non-operating pension and other post-employment benefit (OPEB) credits, tax indemnification adjustments and environmental remediation and legal costs associated with legacy EID businesses and sites. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, betweenCorteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense. BeginningJanuary 1, 2021 , the company excludes net unrealized gains or losses from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. See Note 18 - Segment Information, to the interim Consolidated Financial Statements for details related to significant pre-tax benefits (charges) 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 from continuing
operations after income taxes for the three and six months ended
Three Months Ended Six Months Ended
Seed June 30, June 30,
In millions 2021 2020 2021 2020
Net sales $ 3,780 $ 3,538 $ 6,272 $ 5,993
Segment operating EBITDA $ 1,123 $ 956 $ 1,740 $ 1,537
Seed Q2 2021 vs. Q2 2020 Percent Change Due To:
Net Sales Change Local Price & Portfolio /
$ In millions $ % Product Mix Volume Currency Other
North America $ 201 7 % - % 6 % 1 % - %
EMEA 34 13 % 10 % (1) % 4 % - %
Latin America 28 14 % 10 % - % 4 % - %
Asia Pacific (21) (13) % - % (16) % 3 % - %
Total $ 242 7 % 1 % 4 % 2 % - %
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Seed Q2 2021 vs. Q2 2020 Percent Change Due To:
Net Sales Change Local Price & Portfolio /
$ In millions $ % Product Mix Volume Currency Other
Corn $ 123 6 % 3 % 2 % 1 % - %
Soybeans 75 7 % (2) % 8 % 1 % - %
Other oilseeds 52 24 % 4 % 11 % 9 % - %
Other (8) (5) % (5) % (2) % 2 % - %
Total $ 242 7 % 1 % 4 % 2 % - %
First Half 2021 vs. First Half
Seed 2020 Percent Change Due To:
Net Sales Change Local Price & Portfolio /
$ In millions $ % Product Mix Volume Currency Other
North America $ 121 3 % (1) % 3 % 1 % - %
EMEA 100 9 % 5 % 1 % 3 % - %
Latin America 86 20 % 9 % 20 % (9) % - %
Asia Pacific (28) (12) % 2 % (15) % 1 % - %
Total $ 279 5 % 1 % 3 % 1 % - %
First Half 2021 vs. First Half
Seed 2020 Percent Change Due To:
Net Sales Change Local Price & Portfolio /
$ In millions $ % Product Mix Volume Currency Other
Corn $ 147 4 % 3 % 1 % - % - %
Soybeans 71 6 % (2) % 7 % 1 % - %
Other oilseeds 100 21 % 4 % 14 % 3 % - %
Other (39) (12) % (5) % (7) % - % - %
Total $ 279 5 % 1 % 3 % 1 % - %
Seed
Seed net sales were $3,780 million in the second quarter of 2021, up 7 percent
from $3,538 million in the second quarter of 2020. The increase was due to a 4
percent increase in volume, a 2 percent favorable impact from currency and a 1
percent increase in local price.
Higher volumes were driven by more normalized delivery timing in North America
compared to the prior-year period, coupled with increased soybean acreage in
North America . In addition, the company delivered $80 million in sales in the
second quarter primarily due to robust early demand for corn in Latin America .
This increase was also driven by canola growth in Canada , which represents early
settlement of the season compared to the year-ago period. Favorable currency
impacts were primarily driven by the Canadian Dollar. The increase in local
price was led by strong execution in Latin America and EMEA.
Segment operating EBITDA was $1,123 million in the second quarter of 2021, up 17
percent from $956 million in the second quarter of 2020. Volume gains, lower
royalties, reduced bad debt expense, ongoing cost and productivity actions, and
continued price execution more than offset higher input costs from unfavorable
yields on European corn and sunflower. Segment operating EBITDA margin improved
by more than 260 basis points versus the prior-year period.
Seed net sales were $6,272 million for the first six months of 2021, up 5
percent from $5,993 million for the first six months of 2020. The increase was
due to a 3 percent increase in volume, a 1 percent increase in local price and a
1 percent favorable impact from currency.
The increase in volume was driven by higher soybean sales in
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Table of Contents currency impacts primarily from the Canadian Dollar and the Euro more than offset unfavorable impacts from the Brazilian Real.
Segment operating EBITDA was$1,740 million for the first six months of 2021, up 13 percent from$1,537 million for the first six months of 2020. Continued price execution, lower royalties, lower bad debt expense, volume gains, and ongoing cost and productivity actions more than offset higher input costs from unfavorable yields on European corn and sunflower and higher freight costs. Segment operating EBITDA margin improved by more than 200 basis points versus the prior-year period. Three Months Ended Six Months Ended Crop Protection June 30, June 30, In millions 2021 2020 2021 2020 Net sales$ 1,847 $ 1,653 $ 3,533 $ 3,154 Segment Operating EBITDA$ 370 $ 309 $ 691 $ 547 Crop Protection Q2 2021 vs. Q2 2020 Percent Change Due To: Net Sales Change Local Price & Portfolio / $ In millions $ % Product Mix Volume Currency Other North America $ 75 11 % 2 % 8 % 1 % - % EMEA 33 9 % 2 % (2) % 9 % - % Latin America 45 15 % 3 % 8 % 4 % - % Asia Pacific 41 14 % 3 % 6 % 7 % (2) % Total $ 194 12 % 3 % 5 % 4 % - % Crop Protection Q2 2021 vs. Q2 2020 Percent Change Due To: Net Sales Change Local Price & Portfolio / $ In millions $ % Product Mix Volume Currency Other Herbicides $ 60 7 % 2 % 1 % 4 % - % Insecticides 15 3 % 2 % (3) % 4 % - % Fungicides 87 39 % 4 % 28 % 9 % (2) % Other 32 43 % 6 % 34 % 3 % - % Total $ 194 12 % 3 % 5 % 4 % - % First Half 2021 vs. First Half Crop Protection 2020 Percent Change Due To: Net Sales Change Local Price & Portfolio / $ In millions $ % Product Mix Volume Currency Other North America $ 133 12 % 3 % 7 % 2 % - % EMEA 102 11 % 2 % 2 % 7 % - % Latin America 71 13 % 9 % 9 % (5) % - % Asia Pacific 73 14 % 3 % 8 % 6 % (3) % Total $ 379 12 % 4 % 6 % 3 % (1) % First Half 2021 vs. First Half Crop Protection 2020 Percent Change Due To: Net Sales Change Local Price & Portfolio / $ In millions $ % Product Mix Volume Currency Other Herbicides $ 223 13 % 4 % 6 % 3 % - % Insecticides 22 3 % 5 % (3) % 1 % - % Fungicides 119 26 % 4 % 21 % 4 % (3) % Other 15 10 % 3 % 8 % (1) % - % Total $ 379 12 % 4 % 6 % 3 % (1) % 54
-------------------------------------------------------------------------------- Table of Contents Crop Protection Crop protection net sales were$1,847 million in the second quarter of 2021, up 12 percent from$1,653 million in the second quarter of 2020. The increase was due to a 5 percent increase in volume, a 4 percent favorable impact from currency and a 3 percent increase in local price. The increase in volume was driven by continued penetration of new products, including ArylexTM herbicide and PyraxaltTM insecticide, coupled by early demand inLatin America , which shifted approximately$50 million in sales from the third quarter. These volume gains were partially offset by an approximate$60 million impact from our decision to phase out select low-margin products. Favorable currency impacts were primarily from the Euro. The increase in local price was driven by strategic price increases inNorth America , coupled with strong price execution globally. Segment operating EBITDA was$370 million in the second quarter of 2021, up 20 percent from$309 million in the second quarter of 2020. Volume gains from new products, continued pricing execution, productivity, and favorable impacts from currency more than offset higher input costs, including raw material costs. Segment operating EBITDA margin improved by more than 130 basis points versus the prior-year period. Crop protection net sales were$3,533 million for the first six months of 2021, up 12 percent from$3,154 million for the first six months of 2020. The increase was due to a 6 percent increase in volume, a 4 percent increase in local price and a 3 percent favorable impact from currency, partially offset by a 1 percent unfavorable portfolio impact. Volume gains were led by continued penetration of new products, including ArylexTM and EnlistTM herbicides and Pyraxalt™ insecticide. These volume gains were partially offset by an approximate$130 million impact from our decision to phase out select low-margin products. The increase in local price was primarily driven by gains inLatin America andNorth America . Favorable currency impacts primarily from the Euro more than offset unfavorable impacts from the Brazilian Real. The portfolio impact was driven by prior-year divestitures inAsia Pacific . Segment operating EBITDA was$691 million for the first six months of 2021, up 26 percent from$547 million for the first six months of 2020. Favorable mix, continued penetration of new products, and ongoing cost and productivity actions more than offset higher input costs, including raw material costs. Segment operating EBITDA margin improved by more than 220 basis points versus the prior-year period. 55
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Non-GAAP Financial Measures The company presents certain financial measures that do not conform toU.S. GAAP and are considered non-GAAP measures. These measures include Operating EBITDA and operating earnings 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'sU.S. GAAP disclosures and should not be viewed as an alternative toU.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 toU.S. GAAP are provided below. Operating EBITDA is defined as earnings (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, non-operating (benefits) costs - net, 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 - net consists of non-operating pension and OPEB credits, tax indemnification adjustments and environmental remediation and legal costs associated with legacy businesses and sites of Historical DuPont. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, betweenCorteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense. Operating earnings per share is defined as "Earnings per common share from continuing operations - diluted" excluding the after-tax impact of significant items, the after-tax impact of non-operating (benefits) costs - net, 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.
Reconciliation of Income from Continuing Operations after Income Taxes to Operating EBITDA
Three Months Ended Six Months Ended
June 30, June 30,
(In millions) 2021 2020 2021 2020
Income from continuing operations after income taxes (GAAP)
$ 1,018 $ 766 $ 1,631 $ 1,047 Provision for income taxes on continuing operations 284 78 462 205 Income from continuing operations before income taxes (GAAP) 1,302 844 2,093 1,252 Depreciation and amortization 313 300 617 583 Interest income (18) (9) (39) (27) Interest expense 7 14 14 24 Exchange losses (gains) - net 14 (1) 49 60 Non-operating benefits - net (315)
(91) (626) (164)
Mark-to-market losses on certain foreign currency contracts not designated as hedges1 23 22 Significant items charge 135 179 235 302 Operating EBITDA (Non-GAAP)$ 1,461 $
1,236
1.EffectiveJanuary 1, 2021 , on a prospective basis, the company excludes net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. For the three and six months endedJune 30, 2020 , the unrealized mark-to-market gain was$27 million . 56
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Significant Items
Three Months Ended Six Months Ended
June 30, June 30,
(In millions) 2021 2020 2021 2020
Restructuring and asset related charges - net
- - - (53)
Total pretax significant items charge (135) (179) (235) (302)
Total tax benefit impact of significant items1 28 36 51 59
Tax only significant item benefit2 - 29 - 10
Total significant items charge, after tax
1.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. 2.The tax only significant item benefits for the three and six months endedJune 30, 2020 are primarily related to a benefit due to an elective change in accounting method that alters the 2019 impact of the business separation on The Act's foreign tax provisions and a state tax valuation allowance in theU.S. based on a change in judgment about the realizability of a deferred tax asset.
Reconciliation of Income from Continuing Operations Attributable to
Three Months Ended Six Months Ended
June 30, June 30,
(In millions) 2021 2020 2021 2020
Income from continuing operations attributable to
Corteva (GAAP) $ 1,015 $ 760 $ 1,625 $ 1,031
Less: Non-operating benefits - net, after tax 237 67 474 124
Less: Amortization of intangibles (existing as of
Separation), after tax (140) (137) (283) (251)
Less: Mark-to-market losses on certain foreign currency contracts not designated as hedges, after tax1
(18) (17)
Less: Significant items charge, after tax (107) (114) (184) (233)
Operating Earnings (Non-GAAP) $ 1,043 $ 944 $ 1,635 $ 1,391
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Earnings per share of common stock from continuing operations - diluted (GAAP)
$ 1.37 $ 1.01 $ 2.18 $ 1.37 Less: Non-operating benefits - net, after tax 0.32 0.09 0.64 0.16 Less: Amortization of intangibles (existing as of Separation), after tax (0.19)
(0.19) (0.38) (0.33)
Less: Mark-to-market losses on certain foreign currency contracts not designated as hedges, after tax1
(0.02) (0.02)
Less: Significant items charge, after tax (0.14) (0.15) (0.25) (0.31)
Operating Earnings Per Share (Non-GAAP) $ 1.40 $ 1.26 $ 2.19 $ 1.85
Diluted Shares Outstanding (in millions) 743.3 751.6 746.4 752.0
1.EffectiveJanuary 1, 2021 , on a prospective basis, the company excludes net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. For the three and six months endedJune 30, 2020 , the unrealized mark-to-market gain was$27 million . 57 -------------------------------------------------------------------------------- Table of Contents Liquidity and Capital Resources Information related to the company's liquidity and capital resources can be found in the company's 2020 Annual Report, Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Liquidity & Capital Resources. The discussion below provides the updates to this information for the six months endedJune 30, 2021 . (In millions) June 30, 2021 December 31, 2020 June 30, 2020 Cash, cash equivalents and marketable securities $ 2,900 $ 3,795 $ 2,869 Total debt $ 1,778 $ 1,105 $ 2,631 The company's cash, cash equivalents and marketable securities atJune 30, 2021 ,December 31, 2020 , andJune 30, 2020 were$2,900 million ,$3,795 million and$2,869 million , respectively. Total debt atJune 30, 2021 ,December 31, 2020 , andJune 30, 2020 was$1,778 million ,$1,105 million , and$2,631 million , respectively. The increase in debt balances fromDecember 31, 2020 was primarily due to funding the company's seasonal working capital needs and capital expenditures. See further information in Note 12 - Short-Term Borrowings, Long-Term Debt and Available Credit Facilities, to the interim Consolidated Financial Statements. 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, funding of the MOU escrow account, 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. During the six months endedJune 30, 2021 , the company has experienced increased operating costs for freight and raw materials. The company also has experienced increased costs for materials used in various capital expenditures and capacity expansion projects. The increases in costs have been due, in part to, inflation and the rising demand from the economic recovery from the lifting of COVID-19 pandemic restrictions and government stimulus in some regions, while the supply for certain materials have not returned to pre-pandemic levels. The company expects this trend to continue as global supply chains and logistics remain constrained across industries. The company had access to approximately$6.4 billion atJune 30, 2021 ,$6.4 billion atDecember 31, 2020 , and$6.3 billion atJune 30, 2020 , in committed and uncommitted unused credit lines. In addition to the unused credit facilities, the company has a$1 billion 2021 Repurchase Facility (as defined below). 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 nondiscretionary contributions to certain benefit plans, severance payments, repayment and refinancing of debt, working capital, capital expenditures, repurchases and redemptions of securities, and fundingCorteva's costs and expenses. InMarch 2020 , the company drew down$500 million under the three year revolving credit facility to finance its short term liquidity needs as a result of the volatility and increased borrowing costs of commercial paper resulting from the unstable market conditions caused by the COVID-19 pandemic, and repaid that borrowing in full inJune 2020 . 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. The Revolving Credit Facilities also contain a financial covenant requiring that the ratio of total indebtedness to total capitalization forCorteva and its consolidated subsidiaries not exceed 0.60. AtJune 30, 2021 the company was in compliance with these covenants. InMay 2020 , EID issued$500 million of 1.70 percent Senior Notes due 2025 and$500 million of 2.30 percent Senior Notes due 2030 (theMay 2020 Debt Offering). The proceeds of this offering are intended to be used for general corporate purposes. 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 theU.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. 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, the 2021 Repurchase Facility, the Revolving Credit Facilities, and factoring. 58 -------------------------------------------------------------------------------- Table of Contents InFebruary 2021 , in line with seasonal working capital requirements, the company entered into a committed receivable repurchase agreement of up to$1.0 billion (the "2021 Repurchase Facility"), which expires inDecember 2021 . Under the 2021 Repurchase Facility,Corteva may sell a portfolio of available and eligible outstanding customer notes receivables to participating institutions and simultaneously agree to repurchase at a future date. See further discussion of this facility in Note 12 - Short-Term Borrowings, Long-Term Debt and Available Credit Facilities, to the interim Consolidated Financial Statements. 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 9 - Accounts and Notes Receivable - Net, to the interim Consolidated Financial Statements for more information. The company also organizes agreements with third-party financial institutionswho directly provide financing for select customers of the company's 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 13 - Commitments and Contingent Liabilities, to the interim Consolidated Financial Statements for more information on the company's guarantees. The company's cash, cash equivalents and marketable securities atJune 30, 2021 ,December 31, 2020 , andJune 30, 2020 are$2.9 billion ,$3.8 billion , and$2.9 billion respectively, of which$2.7 billion ,$3.1 billion , and$2.7 billion atJune 30, 2021 ,December 31, 2020 , andJune 30, 2020 , respectively, was held by subsidiaries in foreign countries, includingUnited States territories. The 2017 Tax Cuts and Jobs Act ("The Act") required companies to pay a one-time transition tax on the untaxed earnings of foreign subsidiaries. Upon actual repatriation, such earnings could be subject to withholding taxes, foreign and/orU.S. state income taxes, and taxes resulting from the impact of foreign currency movements. The Act also introduced a 100 percent dividends received deduction regarding earnings of foreign subsidiaries. The cash held by foreign subsidiaries is generally used to finance the subsidiaries' operational activities and future foreign investments. AtJune 30, 2021 , management believed that sufficient liquidity is available in theU.S. with global operating cash flows, borrowing capacity from existing committed credit facilities, and access to capital markets and commercial paper markets. Summary of Cash Flows Cash used for operating activities was$643 million for the six months endedJune 30, 2021 compared to$869 million for the six months endedJune 30, 2020 . The change in cash used for operating activities was driven by higher earnings partially offset by changes in working capital. Cash used for investing activities was$17 million for the six months endedJune 30, 2021 compared to$252 million for the six months endedJune 30, 2020 . The change was primarily due to lower purchases of investments, partly offset by higher capital expenditures. The company is increasing its expected 2021 capital expenditures to$600 -$650 million , which is primarily driven by increases in costs for materials used in various capital expenditures and capacity expansion projects. Cash (used for) provided by financing activities was$(27) million for the six months endedJune 30, 2021 compared to$2.2 billion for the six months endedJune 30, 2020 . The change was primarily due to lower borrowings partially offset by higher repurchases ofCorteva common stock. InJanuary 2021 , the company's Board of Directors authorized a common stock dividend of$0.13 per share, payable onMarch 15, 2021 , to the shareholders of record onMarch 1, 2021 . InApril 2021 , the company's Board of Directors authorized a common stock dividend of$0.13 per share, payable onJune 15, 2021 , to the shareholders of record onMay 14, 2021 . InJuly 2021 , the company's Board of Directors approved an increase in the common stock dividend of$0.13 per share to$0.14 per share. InJuly 2021 , the company's Board of Directors authorized a common stock dividend of$0.14 per share, payable onSeptember 15, 2021 , to the shareholders of record onAugust 13, 2021 . OnAugust 5, 2021 , the company's Board of Directors authorized a$1.5 billion share repurchase program to purchaseCorteva, Inc.'s common stock, par value$0.01 per share, without an expiration date. OnJune 26, 2019 , the company's Board of Directors authorized a$1 billion share repurchase program to purchaseCorteva, Inc.'s common stock, par value$0.01 per share, without an expiration date. The company repurchased$850 million under its share buyback plan since the Corteva Distribution and expects to complete the program in 2021. For the full year 2021, the company expects to repurchase at least$850 million under the share buyback plans 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. 59
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During the three and six months endedJune 30, 2021 , the company purchased and retired 4,324,000 shares and 11,970,000 shares, respectively, in the open market for a total cost of$200 million and$550 million , respectively. During the six months endedJune 30, 2020 , the company purchased and retired 1,865,000 shares for a total cost of$50 million . See Note 14 - Stockholders' Equity, to the interim Consolidated Financial Statements for additional information related to the share buyback plan. EID Liquidity Discussion As discussed in Note 1 - Basis of Presentation, to the EID interim Consolidated Financial Statements, EID is a subsidiary ofCorteva, Inc. and continues to be a reporting company, subject to the requirements of the Exchange Act. The below relates to EID only and is presented to provide a Liquidity discussion for the differences betweenEID and Corteva, Inc. Cash used for operating activities EID's cash used for operating activities was$663 million and$920 million for the six months endedJune 30, 2021 and 2020, respectively. The change was primarily driven by the items above under the header, "Summary of Cash Flow". Cash provided by financing activities EID's cash (used for) provided by financing activities was$(7) million for the six months endedJune 30, 2021 compared to$2,265 million for the six months endedJune 30, 2020 . The change was primarily driven by lower proceeds from issuance of long-term debt and higher payments on long-term debt on related party debt.
See Note 2 - Related Party Transactions, to the EID interim Consolidated
Financial Statements for further information on the related party loan between
Guarantees and Off-Balance Sheet Arrangements For detailed information related to Guarantees, Indemnifications, and Obligations for Equity Affiliates and Others, see the company's 2020 Annual Report, Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Off-Balance Sheet Arrangements and Note 13 - Commitments and Contingent Liabilities, to the interim Consolidated Financial Statements. Contractual Obligations Information related to the company's contractual obligations atDecember 31, 2020 can be found on page 73 of the company's 2020 Annual Report. There have been no material changes to the company's contractual obligations outside the ordinary course of business from those reported in the company's 2020 Annual Report.
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