XML 41 R19.htm IDEA: XBRL DOCUMENT
v3.20.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”) was enacted. The Act reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent, required companies to pay a one-time transition tax (“transition tax”) on earnings of certain foreign subsidiaries that were previously tax deferred, created new provisions related to foreign sourced earnings, eliminated the domestic manufacturing deduction and moved to a territorial system. At December 31, 2017, the Company had not completed its accounting for the tax effects of The Act; however, as described below, the company made a reasonable estimate of the effects on its existing deferred tax balances and the one-time transition tax. In accordance with Staff Accounting Bulletin 118 ("SAB 118"), income tax effects of The Act were refined upon obtaining, preparing, or analyzing additional information during the measurement period. At December 31, 2018, the company had completed its accounting for the tax effects of The Act. •As a result of The Act, the company remeasured its U.S. federal deferred income tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21 percent. The company recorded a cumulative benefit of $(2,847) million (which includes a $(34) million benefit in the year ended December 31, 2018) to benefit from income taxes on continuing operations with respect to the remeasurement of the company's deferred tax balances. Of the $(34) million benefit, $(114) million relates to the company's discretionary pension contribution in 2018, which was deducted on a 2017 tax return. The remaining charges relate to purchase accounting adjustments made throughout 2018. •The Act requires a mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits (“E&P”), which results in a one-time transition tax. The company recorded a cumulative charge of $928 million (which includes a $182 million charge in the year ended December 31, 2018) to benefit from income taxes on continuing operations with respect to the one-time transition tax. •In the year ended December 31, 2018, the company recorded a $16 million charge to benefit from income taxes on continuing operations associated with an indirect impact of The Act related to prepaid tax on the intercompany sale of inventory. For tax years beginning after December 31, 2017, The Act introduces new provisions for U.S. taxation of certain global intangible low-taxed income (“GILTI”). The company has made the policy election to record any liability associated with GILTI in the period in which it is incurred.
Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes | For the Year Ended December 31,
(In millions) | 2020 | 2019 | 2018
Income (loss) from continuing operations before income taxes |  |  |
Domestic | $ | (83) |  | $ | (1,352) |  | $ | (5,040) |
Foreign | 758 |  | 1,036 |  | (1,766) |
Income (loss) from continuing operations before income taxes | $ | 675 |  | $ | (316) |  | $ | (6,806) |
Current tax expense (benefit) |  |  |
Federal | $ | 28 |  | $ | (11) |  | $ | (112) |
State and local | 9 |  | 1 |  | (32) |
Foreign | 222 |  | 317 |  | 446 |
Total current tax expense | $ | 259 |  | $ | 307 |  | $ | 302 |
Deferred tax (benefit) expense |  |  |
Federal | $ | (116) |  | $ | (392) |  | $ | (124) |
State and local | 27 |  | 156 |  | (39) |
Foreign | (251) |  | (117) |  | (170) |
Total deferred tax benefit | $ | (340) |  | $ | (353) |  | $ | (333) |
Benefit from income taxes on continuing operations | (81) |  | (46) |  | (31) |
Net income (loss) from continuing operations after taxes | $ | 756 |  | $ | (270) |  | $ | (6,775) |
Reconciliation to U.S. Statutory Rate | For the Year Ended December 31,
| 2020 | 2019 | 2018
Statutory U.S. federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | %
Effective tax rates on international operations - net 1 | (13.9) |  | (18.4) |  | 0.4 |
Acquisitions, divestitures and ownership restructuring activities 2, 3, 4 | (0.3) |  | (10.7) |  | (2.3) |
U.S. research and development credit | (2.9) |  | 7.0 |  | 0.1 |
Exchange gains/losses 5 | 3.5 |  | (1.8) |  | (1.3) |
SAB 118 Impact of Enactment of U.S. Tax Reform 6 | — |  | — |  | (3.0) |
State and local incomes taxes - net | 4.0 |  | 3.2 |  | 0.5 |
Impact of Swiss Tax Reform 7 | (27.0) |  | 11.9 |  | — |
Excess tax benefits/deficiencies from stock compensation | 1.0 |  | (0.6) |  | 0.1 |
Tax settlements and expiration of statute of limitations | 0.4 |  | 3.9 |  | (0.1) |
Goodwill impairment 8 | — |  | — |  | (15.2) |
Other - net | 2.2 |  | (0.9) |  | 0.3 |
Effective tax rate on income from continuing operations | (12.0) | % | 14.6 | % | 0.5 | %
1. Includes the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S. GAAP results. Includes a tax benefit of $(51) million for the year ended December 31, 2020, related to a return to accrual adjustment associated with an elective change in accounting method for the 2019 tax year impact of The Act's foreign tax provisions. 2. See Notes 4 - Common Control Business Combination, and Note 5 - Divestitures and Other Transactions, to the Consolidated Financial Statements, for additional information. 3. Includes a net tax charge of $50 million related to repatriation activities to facilitate the Business Separations for the year ended December 31, 2018. 4. Includes a net tax charge of $25 million for the year ended December 31, 2018 related to an internal legal entity restructuring associated with the Business Separations. 5. Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized. Further information about the company's foreign currency hedging program is included in Note 9 - Supplementary Information, and Note 22 - Financial Instruments, under the heading Foreign Currency Risk. 6. Reflects a net tax charge of $164 million associated with the company's completion of the accounting for the tax effects of The Act for the year ended December 31, 2018. 7. Reflects tax benefits of $(182) million primarily driven by the recognition of an elective cantonal component of the recent enactment of the Federal Act on Tax Reform and AHV Financing ("Swiss Tax Reform") for the year ended December 31, 2020. Reflects tax benefits of $(38) million associated with the enactment of the Federal Act on Tax Reform and AHV Financing ("Swiss Tax Reform"), for the year ended December 31, 2019. 8. Reflects the impact of the non-tax-deductible, non-cash impairment charge for the agriculture reporting unit and corresponding $75 million tax charge associated with a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil for the year ended December 31, 2018.
Deferred Tax Balances at December 31 | 2020 | 2019
(In millions) | Assets | Liabilities | Assets | Liabilities
Property | $ | — |  | $ | 170 |  | $ | — |  | $ | 369 |
Tax loss and credit carryforwards 1 | 497 |  | — |  | 761 |  | — |
Accrued employee benefits | 1,415 |  | — |  | 1,717 |  | — |
Other accruals and reserves | 238 |  | — |  | 135 |  | — |
Intangibles | — |  | 2,418 |  | — |  | 2,738 |
Inventory | 127 |  | — |  | 25 |  | — |
Research and development capitalization | 186 |  | — |  | 131 |  | — |
Investments | 56 |  | — |  | 53 |  | — |
Unrealized exchange gains/losses | 2 |  | — |  | — |  | 39 |
Other – net | 91 |  | — |  | 148 |  | — |
Subtotal | $ | 2,612 |  | $ | 2,588 |  | $ | 2,970 |  | $ | 3,146 |
Valuation allowances 2 | (453) |  | — |  | (457) |  | — |
Total | $ | 2,159 |  | $ | 2,588 |  | $ | 2,513 |  | $ | 3,146 |
Net Deferred Tax Liability | $ | (429) |  |  | $ | (633) |  |
1. Primarily related to the realization of recorded tax benefits on tax loss and credit carryforwards from operations in the United States, Brazil, and Spain. 2. During the year ended December 31, 2020, the company established a $19 million state tax valuation allowance in the U.S. based on a change in judgement about the realizability of a deferred tax asset. During the year ended December 31, 2019, the company released a valuation allowance against the net deferred tax asset position of a legal entity in Switzerland in connection with an internal merger, resulting in a tax benefit of $(34) million. During the year ended December 31, 2018, the company established a full valuation allowance against the net deferred tax asset position of a legal entity in Brazil due to revised financial projections, resulting in tax expense of $75 million. See Note 15 - Goodwill and Other Intangible Assets, to the Consolidated Financial Statements, for additional information. However, it is reasonably possible that sufficient positive evidence required to release all, or a portion, of certain valuation allowance in certain jurisdictions will exist within the next 12 months.
Operating Loss and Tax Credit Carryforwards | Deferred Tax Asset
(In millions) | 2020 | 2019
Operating loss carryforwards |  |
Expire within 5 years | $ | 99 |  | $ | 131 |
Expire after 5 years or indefinite expiration | 343 |  | 400 |
Total operating loss carryforwards | $ | 442 |  | $ | 531 |
Tax credit carryforwards |  |
Expire within 5 years | $ | 14 |  | $ | 30 |
Expire after 5 years or indefinite expiration | 41 |  | 200 |
Total tax credit carryforwards | $ | 55 |  | $ | 230 |
Total Operating Loss and Tax Credit Carryforwards | $ | 497 |  | $ | 761 |
Total Gross Unrecognized Tax Benefits | For the Year Ended December 31,
(In millions) | 2020 | 2019 | 2018
Total unrecognized tax benefits as of beginning of period | $ | 426 |  | $ | 749 |  | $ | 741 |
Decreases related to positions taken on items from prior years | (14) |  | (167) |  | (44) |
Increases related to positions taken on items from prior years | 5 |  | 77 |  | 74 |
Increases related to positions taken in the current year | 6 |  | 54 |  | 9 |
Settlement of uncertain tax positions with tax authorities | (18) |  | (9) |  | (13) |
Impact of Internal Reorganizations | — |  | (278) |  | — |
Decreases due to expiration of statutes of limitations | (7) |  | — |  | (5) |
Exchange loss (gain) | (3) |  | — |  | (13) |
Total unrecognized tax benefits as of end of period | $ | 395 |  | $ | 426 |  | $ | 749 |
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate | $ | 156 |  | $ | 188 |  | $ | 45 |
Total amount of interest and penalties (benefits) recognized in provision for (benefit from) income taxes on continuing operations | $ | (2) |  | $ | (4) |  | $ | 11 |
Total accrual for interest and penalties associated with unrecognized tax benefits at end of period | $ | 18 |  | $ | 24 |  | $ | 45 |
Each year the company files hundreds of tax returns in the various national, state and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the tax authorities. Positions challenged by the tax authorities may be settled or appealed by the company. As a result, there is an uncertainty in income taxes recognized in the company's financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes. It is reasonably possible that changes to the company’s global unrecognized tax benefits could be significant; however, due to the uncertainty regarding the timing of completion of audits and possible outcomes, a current estimate of the range of increases or decreases that may occur within the next twelve months cannot be made. Tax years that remain subject to examination for the company’s major tax jurisdictions are shown below:
Tax Years Subject to Examination by Major Tax Jurisdiction at December 31, | Earliest Open Year
Jurisdiction
Argentina | 2014
Brazil | 2014
Canada | 2012
China | 2008
France | 2017
India | 2007
Italy | 2015
Switzerland | 2015
United States: |
Federal income tax | 2012
State and local income tax | 2001
Undistributed earnings of foreign subsidiaries and related companies that are deemed to be indefinitely invested amounted to $4,130 million at December 31, 2020. As a result of the Act, distributions of profits from non-U.S. subsidiaries are not expected to cause a significant incremental U.S. tax impact in the future; however, those distributions may still be subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply. The company is asserting indefinite reinvestment related to certain investments in foreign subsidiaries. Determination of the amount of unrecognized deferred tax liability related to indefinitely reinvested profits is not feasible primarily due to our legal entity structure and the complexity of U.S. and local tax laws. For periods between the Merger Effectiveness Time and the Corteva Distribution, Corteva and its subsidiaries were included in DowDuPont's consolidated federal income tax group and consolidated tax return. Generally, the consolidated tax liability of the DowDuPont U.S. tax group for each year was apportioned among the members of the consolidated group based on each member’s separate taxable income. Corteva, DuPont and Dow intend that to the extent Federal and/or State corporate income tax liabilities are reduced through the utilization of tax attributes of the other, settlement of any receivable and payable generated from the use of the other party’s sub-group attributes will be in accordance with a tax sharing agreement and/or tax matters agreement. See Note 5 - Divestitures and Other Transactions, to the Consolidated Financial Statements for further information related to indemnifications between Corteva, Dow and DuPont.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration