Corteva Stock

Good afternoon, and thank you for joining us. I'm Rafa Soares, Head of Investor Relations for Corteva. It's great to have you here today. We have prepared presentation slides to supplement our remarks during this meeting, which are posted on the Investor Relations section of the Corteva website and through the link to our webcast.

We will open this afternoon with remarks from Luke Kissam, Chief Executive Officer; Luke will be followed by Dr. Reza Rasoulpour, Chief Technology Officer; and Brook Cunningham, Chief Commercial Officer. After the short break, we will hear from Ralph Ford, Chief Integrated Operations Officer; and finally, Jeff Rudolph Chief Financial Officer, who will outline our financial framework. We will then conclude the day with a Q&A session with all the leaders.

During this meeting, we will make forward-looking statements, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties including, but not limited to those discussed at this meeting and in the Risk Factors section of reports filed with the SEC. We do not undertake any duty to update any forward-looking statement.

Please note in today's presentation, we will be making reference to certain non-GAAP financial measures. Reconciliations of non-GAAP measures can be found at the end of this presentation or in other investor materials available in our Investor Relations website.

Welcome to Corteva's 2026 Investor Day.

[Presentation]

Please welcome Chief Executive Officer, Luther Kissam.

All right. Somebody all tell me we need to get excited and have a little excitement this afternoon after sitting through the longest lunch break in the history of New York, I hope everybody is excited. That saw we're trying to do the best we could there. But good afternoon, everybody. Thank all of you for coming. We really appreciate it. My name is Luke Kissam, and I'm honored to be here with you today as we begin the next chapter at Corteva. A chapter that we expect to be defined by innovation, improved execution and an unwavering commitment to our stakeholders.

I grew up around farming, and I learned early on in my life that farming is synonymous with optimism. Farmers work really hard. They plant their seeds every year and they pray for rain. They make decisions with uncertainties like weather, commodity prices, pest and weed resistance and input costs circling all around them. Yet every year at the end of that season, they harvest their crop and they feed the world. That's a noble profession, and we're honored to be able to help them toward that cause. Corteva's story doesn't begin today. The business has been around for years, and it's always focused on improving its portfolio, expanding margins and launching solutions to meet the needs of growers. What we're talking about today is how we build on that past success. In a little while, Reza's going to talk about our innovation pipeline. Brook and Ralph are going to talk about how we're going to execute effectively and turn that pipeline in its sustainable and profitable growth. Jeff is then going to walk through what that means from a financial standpoint and how we think about capital deployment. My job is pretty easy. I'm just supposing to explain how all that fits together and why I believe that this business can create consistent long-term value for our stakeholders.

Let me start with the messages I want you to take away from the day. First, Corteva is a pure-play crop protection company with a history of successful execution. Second, innovation provides the opportunity for our sustained growth. The problems that farmers face today are getting harder and harder to solve. Corteva can deliver solutions that have better economics for the farmer and for Corteva, and that capability is a huge competitive advantage. Third, customer focus turns innovation into adoption and value capture. We have to understand the needs of the grower and solve those problems in a way that works in the real world. Fourth, execution turns innovation, innovative solutions into results. and disciplined capital allocation drives future growth and increasing returns for our stakeholders. That's the Corteva system. We innovate, we execute, we allocate capital with discipline and we do it over again and again and again, always with a focus on our growers and our stakeholders.

Now look, competitive pressure is real. Farm economics matter. Channel inventory and routes to market matter. Regulations always change. We understand all that. But Corteva has the ability to innovate, execute and allocate capital effectively enough to grow in that environment. The purpose of today is for us to tell you why. We're a team of approximately 9,000 colleagues in 110 countries who wake up every day thinking about agriculture. They're supported by 25 R&D facilities in more than 8,000 patents. As you can see from these charts, Corteva has a balanced portfolio. We're not a one-trick pony. We're not dependent on any one geography, one crop, one segment or one active ingredient. And that balance is critical because products evolve and grower needs change over time. Our goal will be to keep that portfolio balanced, relevant differentiated and aligned with the needs of growers.

Now since 2020, this has been a tough market, but the business has delivered good results. Driven by new products, revenue has increased by over $1 billion, while EBITDA margins expanded by approximately 250 basis points on a segment basis. During that same period, Corteva improved the quality of its portfolio as well. We exited approximately $0.5 billion of low-margin products and replace them with new solutions that demanded higher margins. We invested in an industry-leading biologicals platform, which helped increase the percentage of our portfolio that is differentiated from 45% to approximately 65% of revenue. And finally, we increased our investment in R&D.

As shown on Slide 10, as you can see, we must continue to get better because farming is getting harder and harder. The world needs more agricultural output, but the land base is fixed or shrinking. Weather and climate stress are putting pressure on yield. You have resistance and pest shifts require product replacement and new modes actions and regulations continue to tighten all over the world. Farmers need better solutions to these increasingly complex challenges, and Corteva has always excelled in an environment like that. We've had a history of innovation success. Corteva launched 7 new actives in the past 10 years. That's more than anybody else in the industry. And those actives are contributing approximately $1.4 billion of revenue in 2026 at average margin 10 to 15 percentage points higher than the overall portfolio average. Going forward, we have 12 new solutions poised to launch over the next decade, 5 of which are biologicals. These 12 novel solutions have the potential to create approximately $4 billion of peak revenue while meeting our margin and profit expectations for differentiated products.

So let's take a high-level look at this portfolio on page 12. Every crop protection company eventually faces some combination of product maturity, competitive pressure, resistance or regulatory change, an innovative organization replaces older products with newer and better solutions. To be successful, that pipeline has to launch solutions to problems that the growers are facing and the grower has to see an economic benefit in that solution versus the alternative. And the girl has to be willing to pay a price consistent with the producers' profit and return expectations. And that's exactly what this pipeline represents. The pipeline is balanced. It's not one product, one crop or one geography. It's a multiyear multi-segment innovation strategy, and it's focused on some of the toughest problems that growers face. It's important to note that this innovation is not all invented by Corteva.

Strong innovation companies are intentional about where they invent, where they partner and where they acquire capabilities. We're agnostic as to where the idea came from. For example, our acquisition of Biotelliga strengthened our capabilities in fungal biology, biocontrol as well as natural product discovery. Our collaboration on [ immasoxefin ] will expand our ability to provide growers with advanced weed control solutions with effectiveness against some of the most difficult herbicide-resistant weeds out there. and our recently announced joint venture with Global Chem will combine each company's complementary strengths to accelerate innovations in crop protection. Our goal is to access the best means of innovation to provide value for our farmers and our stakeholders, whether that comes from our own R&D, partnerships or targeted acquisitions.

As you can see on Slide 13, our approach has been and will continue to be to focus resources where differentiated solutions matter and where the value we create justifies the investment. That gets back to the grower being able to calculate the benefit of Corteva's solution versus the alternative and being willing to pay for that solution. Our objective will be to sell value-based solutions, not products. We'll combine that focus on differentiated solutions with an enterprise-wide focus on low cost and productivity improvements. That type of focus on execution leads to structural cost savings that compound over time. Ralph is going to share some really good examples of that in his presentation.

This operating system has allowed Corteva to lead the industry in margin expansion through the ag cycle. As I mentioned earlier, Corteva expanded EBITDA margins by about 250 basis points since 2020. And we've reinvested those additional profits into further portfolio and productivity improvements. We know how to do what needs to be done. We've proven that this playbook works. The opportunity is to make it work better, make it work faster and make it work more consistently. The question that I think about often is, if I had $1, where would I put it? Here's what I know. We're going to continue to invest to operate this business safely and reliably. We're going to continue to invest in projects that enable us to improve productivity and operate more efficiently and effectively. We must continue to fund innovation that drives organic growth. And we will return cash to shareholders via dividends and targeted stock buybacks.

And finally, we'll pursue accretive acquisitions and partnerships that accelerate or derisk our strategy. And we're going to do all of that while maintaining an investment-grade balance sheet. We're going to allocate every dollar in a way that will strengthen the business, improve returns and create value for our stakeholders.

Now strategy is only good as a team that executed and the culture that they help create. The management team that you see on Slide 15 is built for the opportunities that lie ahead. Each one is talented and brings relevant and diverse experiences across chemicals, agriculture and industrials. We are all aligned on our strategy and the culture that we need to cultivate in order to win in any market condition. We also have a very talented Board that understands its role in governance and takes that role very seriously. Their expertise and experience dovetail perfectly with our strategy. Good governance creates clarity, accountability and discipline. And that's exactly what we have at Corteva.

As you can see on Slide 16, our strategy is pretty clear. Innovation creates the opportunity. Execution turns opportunity into profitable growth, and disciplined capital allocation turns profitable growth into sustainable value. We start by understanding what farmers need, higher yields, better economics, resistance management, sustainability and simplicity, innovation provides those solutions. But innovation only creates value when it solves a real problem and a grower can readily see the benefit in that solution over the alternative. That means focusing on markets where farmers can pay a price for that differentiated solution that is consistent with our profit and return expectations. We do that by bringing chemistry biologicals and Seed Applied Technologies together into solutions that deliver better outcomes for that grower. That translates into more profit per acre for that grower and for Corteva. Then we must see continuous improvement in the execution across our enterprise. That mindset has to be embedded in our DNA. It means getting products registered quickly, launching successfully, manufacturing reliably, servicing customers well and relentlessly pursuing productivity improvements. Then we've got to be great stewards of our capital.

So the strategy is pretty simple: solve the hardest girl problems, commercialize differentiated solutions, operate with discipline and efficiency and allocate capital like owners. Investors have many choices in where they can invest. Let me close by telling you what they can expect of an investment in Corteva. Corteva is a global crop protection company with a balanced portfolio and a history of top-tier performance through the cycle. We have a proven track record and a playbook that works. Second, we have a robust pipeline of solutions to some of the toughest issues farmers are facing, and Reza is going to share those with you in a second.

Third, cost discipline and productivity are part of our DNA. We have a continuous improvement mindset and a list of opportunities for productivity and margin gains. We're committed to an investment-grade balance sheet and strong cash flow generation that should provide financial flexibility. And fifth, we will be disciplined and intentional with our capital deployment. Jeff is going to review the market assumptions with you that we included in the forecast in his presentation.

But let me address pricing for a second. Since 2023, this business has experienced sustained pricing headwinds, essentially wiping out the pricing gains achieved during the COVID years. Recently, a manufacturer announced a price reduction in North America on an older herbicide used in corn and soybeans. I'd tell you that both those points so that you realize this, pricing pressure is real, but it's not new. Producers have always manage product life cycles in a way that they think is best for them. How we anticipate and react to those actions has always been critical and will always be critical in how we manage our business and deliver value to our stakeholders. That's why I focus so much today on innovation and productivity. Our playbook allows us to outperform in any pricing environment. Innovation will lead to differentiated solutions that low-cost producers can't legally copy or technically replicate. A focus on productivity across the enterprise drive structural cost savings. That allows us to match a lower price if we choose to do so. And we might do that if we don't yet have a differentiated solution for an application but still want to provide options for the grower or if we want to protect shelf space with the distribution.

My point is that we don't need pricing tailwinds to deliver the 3-year plan that we're sharing today. We're assuming an annual pricing headwind of roughly 1% in our assumptions. In spite of that, at the midpoint, we expect to deliver approximately 6% compounded annual EBITDA growth by 2029, with around 150 basis points of margin improvement and around $2.4 billion of cumulative cash flow from operations. Now our job is to take the opportunity that innovation provides sprinkling, excellence in execution and add a little disciplined capital allocation and turn these opportunities and to outsize returns for our shareholders.

Thank you for joining us here today. Thanks for listening, and I look forward to your questions later on.

[Presentation]

Please welcome Chief Technology Officer, Reza Rasoulpour.

Good afternoon. My name is Reza. I'm CTO for Corteva, and I'm really excited to be here with you to share how Corteva's R&D engine creates value.

At the end of the day, standing here in New York City, I want you to appreciate that farming is hard. Farmers have huge complexities facing them. And today, I'm going to share with you some examples of how the challenges of the future cannot be solved with yesterday's solutions. Our strategy is a simple one. deliver the innovation that solves the problem for a grower that they cannot solve in any other way because when we create value for that grower that they can see and are willing to pay for, then we share in that value.

So let me start with the case study to exemplify this point, and we're going to go to Asia, where 90% of global rights production occurs, and I'm going to introduce you to this little insect here, the brown plant hopper. Due to macro trends of pest pressure evolving, resistance developing weather changes, this pest can cause significant damage, up to $2 billion of losses in India alone. And if you look at the picture at the top right, you can see how significant of an issue this would be on a rest field. It's a productivity problem. But it's also a grower livelihood problem and a food security problem. This is the sweet spot where Corteva R&D delivers with unique solutions like Pyraxalt. It breaks resistance, provides superior control that you can see and gives farmers a truly new solution for a problem that existing chemistries simply cannot solve.

And that's the broader message I want you to take away today. Generic products have place, but they are limited because they replicate tools that already exist. They do not provide the new modes of action needed to overcome resistance and address evolving past pressures. This is where we focus. As nature creates these greater grower challenges through these macro trends, we provide a new solution to these emerging problems. The more of these foundational challenges in agriculture compound, there's an increased need for innovation, and these unmet needs are where we focus.

So if you look at these 4 different areas, our R&D engine is aligned to these areas of disease control, insect control, weed control and plant performance more than $100 billion of opportunity, addressable market opportunities on this slide. Note that you don't see biologicals or seed treatment called out separately because for R&D, it's integrated into how we deliver solutions to our farmer customers. Within these 4 areas, we focus on that intersection between the unmet grower need and our ability to deliver a differentiated solution. That's how we stay laser-focused, keep the customer at the center of our R&D engine. We transform innovation into customer value by solving problems no one else can in those 4 areas. We do this through internal and external innovation. Some key capabilities that make us different from the competition, our microbial discovery platform, our integrated development platform and our predictive safety platforms.

So today, I'm going to cover 5 things. The first one, I'm going to share with you our track record. Secondly, I'm going to talk about these differentiated technologies and how they provide value. Then we're going to go and I'm going to share with you some case studies from around the world to show you how our solution is better than the next alternative that a grower has. And then finally, we're going to end with our pipeline and the value created. So look, R&D is hard. This isn't just about discovering things. It's about taking candidates to a decade of testing and regulatory to bring them to the market. Therefore, a key performance indicator of any R&D organization is how many actives have you launched. We've launched 7 in the last decade. That's more than the competition, and we do this and deliver value to the growers.

So if you move to the middle, these aren't just launches for their own sake. We've translated those actives into $1.4 billion of 2026 estimated revenue. And importantly, we've taken those actives and the other actives within our portfolio, mix them together to come up with our new formulations. We've launched over 1,000 new products since 2020. That has also translated into 3,200 regulatory approvals from our global teams and 3,800 new patents in order to protect our innovation.

Now what we're poised to do in the future, it's even more impressive. We're sitting on an $11 billion pipeline. That's up $2 billion since 2023. And that's coming from pipeline advancements, expansion into new markets, new opportunities. We're poised to launch 12 new actives in the next decade, 7 conventionals and 5 biologicals. And our R&D efficiency, which we're measuring as the pipeline value over our R&D spend is 2x the competitor average. So this is not just science for science sake, it's not a science for our folks. This is about creating value time and time again.

So how do we do it? What's our secret sauce? I'm going to share with you 3 key platforms that we use to discover, develop and deliver our actives and turn them into solutions. Let's start on the left with Discovery. Finding a new active is not like looking for one grain of sand in an hour glass. It's like finding one grain of sand on the entire planet. So how does anyone do that? Will they modify existing actives, maybe they take a protein and they do a lot of hit on it, maybe they look at pharma data. Well, the way that we do it is a very unique way. We use our proprietary microbial discovery library. These are 700,000 strains unique to us. It's a unique source of inspiration. Think of it as our own private beach. No one else has access.

So through this, we discover natural products. We use that inspiration to inspire us for our conventional chemistry. And I want you to appreciate that without a novel source of inspiration, it is difficult to discover something truly new something that creates differentiated value instead of just another me too. That's one reason why we have a clear advantage against the competition regardless of if they're based in the Americas, in Europe or in China. Because the size and scale of this library, AI is so critical, and it allows us to go faster. Proprietary AI tools help us sift through this sand, 1,000 times faster than we could a few years ago. That's taking us from weeks to clicks. And we do this at 3x higher success rate.

Now discovery is only the first part of the process. We need to move on to development. That's the platform in the middle. Our development scales from fermentation to formulation to global field characterization, identifying the crops, the markets, the formulations where our products can provide the most value. This is a highly automated and integrated platform within Corteva. Again, AI helps, allows us to go 2x faster in formulation development from 12 to 6 months and 2.5x faster with our proprietary fermentation capabilities. That enables biologicals like the spinosyns franchise, Nutricia, Inatreq.

Now moving on to our third platform Look, we have to deliver the products, right? So safety expectations for human health, environmental stewardship, regulatory standards, societal expectations, these are all increasing. That is why predictive safety is baked in to the earliest stages of our process. It's designing, developing adaptives. And that's important because your regulatory right, you can get products on market faster and you can stay on market longer. AI, again, helps us. We go 12x faster in Safety Assessment than before from 6 years to 6 months and 5x more actionable safety insights. That helps us pivot deface or derisk our pipeline. So together, these platforms work in a really integrated way, which segments us from the industry.

Now I want to show you the results of this R&D engine in practice. I'm going to go through an example from each one of our 4 segments, and we're going to start on the top left corner of our R&D engine with disease control. So this is Haviza. Haviza is going to set the new standard in Asian soybean rust control. Brazil is the largest soybean producer in the world with over 49 million hectares, that's about 120 million acres dedicated to soybean production. Asian soybean rust has decimated these crops with losses of up to 80% and 90%. So virtually, every hectare in Brazil is treated to protect against this disease.

On the left, you see untreated soybeans and significant damage related to that. In the middle is the best current competitor standard, and Haviza is over on the right. Have Visa delivered superior control compared to anything else on the market and provides a consistent and durable yield bump of more than 2%. We expect to launch this product in the next few years, and it has the peak revenue potential of over $500 million. This is important because it solves a problem and it strengthens our disease control franchise, building off of Inatreq and Adavelt.

We're now going to move on to our next segment, and I'm going to introduce you to Varpelgo. Varpelgo our next-generation insecticide blockbuster. Building on the foundations of our natural product spinosyns franchise. This nature-inspired active is a broad-spectrum product, and it could only have been crafted from within our R&D engine. On the top left, you see untreated tomatoes with a lot of chewing pest damage from the tomato leaf liner to Absolute. Hopefully, you learned something today to absolute. It's a great test.

In the middle is our best competitor product. Now that one is better than untreated certainly better than generics, but there still is quite a lot of damage. And that will reduce tomato quality and yield. On the right is Varpelgo. We're launching this in early 2030s, and it's a dual-use product for both foliar application and seed treatment. It's really broad spectrum, targeting over 70 crops in over 40 countries. And you can see some examples of that in the bottom. The breadth of this active on lots of different tests in cabbage in the U.S., rice in Vietnam and seed treatment in corn and wheat at over 700 million peak revenue, Varpelgo is going to have industry-leading performance against generics and competitor actives due to its novel motive action and it also has an excellent bean [indiscernible] safety profile.

In our next segment, we're going to talk about weed control. This is a discovery active. We're going to launch sometime in the next decade, but it's another really good example of how we're using nature to solve problems created by nature with resistant weeds. On the left is Water hemp. It's in North America, and it's developed resistance to all generic modes of action. In the middle is a high rate of a competitor standard chemistry. You see that it knocks down some of those weeds, but many of those are still standing. And that's going to compete for the natural resources that whatever grower wants to grow in that field will have. So it's going to hinder the yield of whatever crop the grower wants.

On the right is Corteva's nature-inspired solution. And you can see how clean that field is, controlling those resistant weeds very effectively. This came from our microbial discovery platform. It helped us identify something truly new to solve future challenges. New modes of action come from novel sources of inspiration. Our last segment is planned performance. And I'm going to tell you about a product that's launched, but it's ramping up, Nutricia N. This is a nature derived product. That's a microbe that helps plants use resources more efficiently. The top you see potatoes that are grown in Germany under a standard fertilizer program.

In the middle, we added 25% extra fertilizer just for the experiment. And on the right is that standard fertilizer program with Nutricia, Nutricia gave us 3 tons more potatoes per hectare. It even beat that middle panel of 25% extra fertilizer by 2x, helping the growers get more from the resources they're already using. In the bottom are some examples of yield improvement across a wide range of other crops. Over 4 tons per hectare and onions, almost 3 bags per hectare improvement in soybeans, 2.5 tons per hectare yield in grapes and over 460 kilograms per hectare more in coffee, and I really appreciate that because I love coffee. This is the type of solution that's targeted towards our mega trends, helping growers get more out of less with an integrated field program. It's expected to be more than $300 million as it ramps up.

So across disease, insect, weed control and plant performance. These 4 examples help illustrate how we translate differentiated science into grower value. And the common trend -- the common threat across this is very simple. When the challenge is new, the answer is not generics. It's differentiated innovation. And these are just 4 examples from our broader Corteva pipeline. Here's our Corteva pipeline. This is the most detailed version of the pipeline that we've shared in a long time. And you can see $11 billion of value across disease, insect, weed control and plant performance. We're poised to launch 12 actives from this pipeline over the next decade. I don't want you to take a step back and appreciate the breadth and depth of the pipeline. Vertically across discovery, development, launch, ramp up life cycle management and horizontally across our indication areas and also our crops or geographies, or technology types.

Integrated in this pipeline are our nature derived, those are the leaf actives. Our nature inspired. Those are the hand holding the leaf actives, and they work together with conventional actives to solve grower problems. Looking over to the right, life cycle management is really important. It's how any crop protection R&D company operates. It's how we extend the life and value of launch factors by combining them together through additional crops, geographies, formulations and applications. The bottom line message here is we have a rich pipeline with many opportunities across multiple crops and time horizons to consistently deliver value for Corteva. Now this pipeline also includes external innovation, and we've talked about that. So let's double-click into a couple of those.

We think about external innovation in 3 ways. The first is Corteva catalyst. Through catalysts, we target investments with critical starts and companies working in novel, potentially disruptive spaces. Biotelliga that Luke and I mentioned is a great example. If I was giving this presentation a few months ago, Biotelliga would have been part of catalyst. But since June, we acquired Biotelliga, bringing both the people and the technology into Corteva. The second is out-licensing. Some technologies may not fit within our internal efforts, but it could create value to other markets. So for example, we have 2 actives that didn't hit our investment hurdle rates and we monetize them to another company for them to develop. And then 2 other actives were actually better fits in the adjacent spaces of animal health.

The first one is a collaborative R&D effort we've engaged with Merck Animal Health. And the second is a partnership with a global animal health company that resulted in a product we launched a few years ago. Now the third place of external innovation is in-licensing. Not every great idea originates from inside Corteva, bringing external actives or technologies in combining them with our development and formulation capabilities, we create broader value for everyone and provide growers with a lot of choice. Together, catalyst out licensing, in-licensing that give us flexibility, ways to maximize the value of our innovation wherever it originates. And the bottom line is we leverage this external innovation in our R&D engine to maximize the value for Corteva, which requires disciplined innovation management, and you see the result of that discipline in the efficiency of our R&D engine.

Our R&D engine has led to an $11 billion pipeline. And if you look on the left, compared externally to shared competitor values, our pipeline is 1/3 larger than the competitor average. Now it's not the biggest. But what's critically important is our R&D spend is 1/3 lower than competitor average. That leads to R&D efficiency, that pipeline value over R&D spend, and we're over 2x better than average at 22x. So the bottom line message is this. This comes from thoughtful and disciplined choices. This does not come from the products of silos or bureaucracy. These are our fantastic R&D scientists from around the world working together an intentional collaboration. And that unified R&D organization is laser focused on one thing: creating differentiated solutions to solve significant problems for growers around the world and create value for them because when we create value for our farmer customers, we know we can share in that value.

In closing, Corteva is positioned to lead the next generation of crop health innovation. We have a proven ability to translate innovation into value. Our R&D platforms give us a real edge to enable and accelerate this pipeline, and it fuels us to get to that next stage of growth for our company. The challenges that growers face , these are not temporary challenges. These are systemic and structural. The matter trends of pest pressure evolving. These are going to require new solutions that generic tools of the past simply cannot solve. These are really hard problems, but we're up to the challenge. That's why I'm so optimistic about our future. We've built the systems and the pipeline to deliver the products to solve these hard problems. And that's our sweet spot. That's why we're so excited to serve our grower customers and the next generation of technology from our Corteva R&D engine. Thank you very much.

Please welcome Chief Commercial Officer, Brook Cunningham.

Good afternoon, everyone. I'm Book Cunningham. It is a genuine pleasure to be with you all here today. You've just heard Reza talk about the science. Why our innovation engine is the best in the industry, incredibly difficult to build and even harder to replicate. My job as Chief Commercial Officer, is to talk about what happens next because great science only creates value when it solves a real problem for a customer, and that customer sees enough value to pay a premium [indiscernible] season after season. That's what our commercial organization does. We translate innovation into customer value into financial results. And here's what I want you all to take away today.

Our commercial model is built to drive growth and margin expansion through the cycle in a way that is structurally advantaged over our peers, not by predicting them, but by building an engine that performs in all of them. good markets and difficult ones, changing weather, competitive pressure, shifting farmer economics, we can't control any of those things. What we can control is where we compete, how we compete, and how effectively we turn that innovation into value. And as the only stand-alone R&D crop protection company of global scale, we can see market movement sooner, make choices faster and reallocate resources more aggressively because Crop Protection is our entire business, not 1 unit inside a much larger company.

Over the next 20 minutes, I'll show you why these factors differentiate Corteva today and how we're evolving it to extend that leadership in tomorrow. Today, I'm going to cover 5 key things. First of all, we operate in a structurally growing market that needs innovation. The world keeps asking agriculture to produce more food, feed and fuel, while producing it's getting harder. That creates sustained demand for differentiated technology, as we heard from Reza earlier. Second, as you heard Luke mention, our portfolio is deliberately balanced across crops and geographies, and it's increasingly differentiated. Together, those 2 things position us to grow above the market and expand margins through the cycle.

Third, we're disciplined about where we compete and how we win. We segment intentionally. We concentrate resources on the crops, the customers and the markets where we can create the most value and we tailor our route to market country by country. And then we generate demand where it actually matters at the farm gate. Fourth, we're getting faster and more deliberate about how we manage innovation across that entire life cycle Reza talked about earlier, reaching peak revenue sooner, sustaining it longer and capturing more of each technology's lifetime value. And finally, the idea that connects everything. Commercial insight powers our innovation flywheel. Farming reshapes our R&D priorities, R&D creates differentiated technology, commercial turns that technology into cash, and then we reinvest that cash into the next wave of innovation.

Let's start with the market because I want to be really clear about something. Demand for new crop protection innovation is structural and 4 forces are driving it. The first is population growth. As we saw in the video earlier, the world is on track to add another 2 billion people over the next 2-plus decades, and we have to feed all of them using roughly the same amount of arable land. Second, pest and disease pressure is increasing. Climate change is moving past into new regions. They're reproducing faster, they're evolving faster and resistance continues to build. As Reza explained, that creates sustained demand for new modes of action in conventional chemistry and biologicals. The third is regulation. The requirements and costs of bringing new chemistry to market continues to rise. And at the same time, demand is increasing for biologicals and naturally derived chemistry with greener profiles and lower use rates. And fourth, consumer preferences are constantly changing from higher protein diets to biofuels to food produce with more [ novel ] plant health solutions.

Those forces don't create demand for just any product. They create demand for innovative solutions. And the ability to serve that demand exists across our entire portfolio, conventional chemistry, biologicals and Seed Applied Technology, all working together as a complementary system. Take a look at where the value is growing. Biologicals, 6% to 8%; Seed Applied Technology, 3% to 5%; and conventional crop protection continues to grow off of a very large base. Within that market, we've made an intentional choice around where we want to compete. That's novel chemistry, differentiated formulations and technologies that solve important problems for growers and therefore command premium view. The large off-patent molecules that generics chase, that's not our target market. We choose the geographies, the crops and the customer segments where our innovation gives us the right to win. This next chart gets to the heart of why we grow through the cycle.

Let's start with the sales mix on the left. As Luke mentioned, no single crop geography or technology carries this company. We're globally diversified across both key crop and non-crop markets where we hold global leadership positions, including a landed pastureland, [indiscernible] geography in a no other as often accelerating. The balance alone doesn't create market leadership, differentiation and deep customer and crop segmentation do, and we make hard choices around where we compete. We play where we can win and when market dynamics shift, we move faster than our peers. When a market becomes generic dominated and we can't create differentiated value. We redeploy those resources to some where they can earn more. As proof from 2022 to 2024, we were the first amongst our peers to exit roughly $500 million of lower-margin genericized products. And at the same time, we kept investing in innovation.

In 2020, differentiated products represented about 45% of our mix. Today, it's 65%, and we expect to sustain roughly that level through the back half of the decade. In 2025 alone, we registered more than 144 new crop protection products. Now look at the right-hand side of the chart. That's where you can see the strategy working. That's our price and volume growth against the average of our crop protection peers. And importantly, it spans the entire cycle we've slipped through, the scarcity and boom of '21 and '22, the destocking that followed and the stabilization since. Through that cycle, we performed better than the peer average. Not just when conditions were good, we outgrew through the destocking downturn as well. That's the difference between a business that rides the cycle and one that's built to outperform it. Differentiation creates durable growth and margin resilience. That creates the capacity to reinvest. That flywheel is starting to turn.

Now once we've chosen a to compete, then comes how we win. In a market defined by change, scale matters, but so do people, culture, speed and the ability to make choices ahead of our competition. Corteva has all of them. First, and I might be biased here, but I believe we have the best people and culture in the agriculture industry. Our commercial teams are highly respected for their technical expertise, long-term customer relationships and a reputation for always doing what's right for farmers. Second, we bring that integrated solution, conventional chemistry, Seed Applied Technology and biologicals focused on solving farmers' biggest pain points to drive their ROI. That includes both our proprietary technology and those of third-party innovators who are increasingly seeking out partnerships with Corteva for our global reach, our regulatory capabilities, and the ability to work together to get new innovation into the hands of farmers faster.

And we combine these technologies with agronomic expertise across the season. The result is a solution built to optimize the grower's ROI. That's what creates loyalty. Next, we tailor the route to market by country based on the reality of what works best, both for our customers and for our channel partners. And increasingly, we're using new tools like AI to strengthen our model and make us even more efficient. Things like removing the low-value sales and marketing activity that consumes our people's time so they can spend it more where they create value out in the field with customers. And putting AI-driven intelligence and digital tools into the hands of our field teams will enable sharper competitive intelligence, customer targeting, pricing and agronomic decisions at the acre. You combine that with our ability to move faster than our peers as a stand-alone CP company, and it will translate into better growth, stronger mix, more resilient margins and better returns on innovation.

And all of that ultimately has to show up at one place at the farm gate. This is where our commercial model creates real value and where I believe it becomes particularly difficult to replicate. Our demand generation engine has 3 parts. First, integrated sales and agronomy teams focus on one outcome, grower ROI; second, we have a differentiated and integrated portfolio; and third, prescriptive full season crop health program supported by digital tools and financing. You put those together and you create demand that repeats because it's based on demonstrated economic value to a farmer, not a promotion or a price cut.

Let me bring that to life with a few examples from our recent customer excellent pilots in Asia. In blueberries, high-touch grower engagement, pulled our integrated chemistry plus biologicals portfolio through in new ways. Sales grew 26% year-over-year, with biologicals up 41% in that customer group. In potatoes, sharper segmentation by farmer crop and geography drove 8% sales growth and a whole acre solutions selling, combining nutritionals, plant growth regulators and chemistry grew sales 13% and expanded our large grower professional base by 66%, 3 different crops, 3 different pilots, 1 commercial discipline. Understand the customer deeply, solve a significant problem, improve the ROI. And when you do that well, growers come back.

On-farm demand generation in collaboration with our channel partners is a model that works for all parties and that we're working to scale across the globe. Of course, having great technology isn't enough. You have to extract its full value, and that requires accelerating our launch capabilities and managing innovation across its entire life cycle. Think about the value curve of any technology. At launch, we have patent protection. So the objective is simple: go broad, go hard, go fast, secure broad use labels across crops and geographies launch more differentiated formulations earlier and use licensing and co-marketing to maximize our reach. The goal is to reach peak revenue faster and sustain it longer.

As the patent matures, we defend that premium through new formulations, mixtures and claims that extend the value of the active ingredient. And eventually, every molecule reaches commoditization. That's the moment that generics are waiting for. But we don't wait for them. We move ahead of the curve. By then, we've already been managing the asset toward that moment for years. This includes reducing our cost position per unit to be increasingly competitive via continuous productivity. Ralph is going to take us through that a bit later. We continue bringing differentiated mixtures to market. We had a license where it creates value, and we harvest the remaining economics. And when the returns no longer justify the resources, we exit cleanly. That is our answer to generic pressure. Extract more value earlier and for longer and then redeploy that capital to the next wave of innovation. Same asset deliberately managed at every stage. That's how you turn a successful product into compounding value rather than a spike followed by a decline.

You can see that same engine here applied to our medium-term pipeline. Launches ramp, peak and overlap, each new wave builds on the last while post-patent formulations continue defending the value underneath. The result is roughly $800 million of incremental top line growth in 2029 versus 2026, a 16% average CAGR through 2029 and [ RLX ] and Rinskor score together exceeding $1 billion in annual sales by 2019. Not one launch wave after overlapping wave.

Now let me take that commercial model around the world and show you how differently we apply it market by market. We'll start here at home in the U.S. A roughly $15 billion addressable market, where we generate about $2 billion -- $2.5 billion in revenue. Here, we serve 2 very different customer bases. Large broad acre farms producing storable commodities like corn, soybeans and cereals, primarily through a 3-step channel and land and pasture and high-value specialty operations, primarily through a 2-step channel. What's changing following the separation from [indiscernible] is really important. First, we have greater commercial freedom. We can build deep higher value channel relationships without the perceived conflict of Pioneer. We can simplify sales roles and increase the amount of time my people spend directly with customers. I expect our call frequency per customer to roughly double, now focused exclusively on Crop Protection.

Pioneer remains exclusive with our next biologicals brand. But beyond that relationship, separation creates new opportunities to accelerate including a larger presence with channel partners responding to increasing grower demand for plant performance solutions. We also gained greater freedom to operate and Seed Applied Technology to work with new seed companies and other new partners while remaining Vylor's preferred supplier, and we'll continue to grow in our non-crop businesses as well. That includes land and pasture where we're a global leader in environmental solutions, so specialty business, which provides attractive growth outside of the ag cycle. The principle is the same. Deep customer relationships plus premium technology creates the opportunity for additional share.

Now Brazil, a roughly $14 billion addressable market, about $8 billion in the north and $6 million in the South. Where we generate approximately $1.7 billion in revenue today. But North and South Brazil are fundamentally different markets. So we don't treat them the same, and we continue to proactively evolve our model in response to a rapidly changing competitive landscape. In the north, mega-scale broad acre growers produce soy, corn and cotton, often double cropping in a single season. There, we go direct. Our direct sales access program gives strategically segmented large and mega growers a tailored experience, focused on customers who value technology and are willing to pay for it.

In 2025, our differentiated mega grower model achieved a 61% year-over-year increase in sales, while our personally model delivered a 40% increase in sales. Innovative credit and barter deepened our customer engagement and now support roughly 1/3 of our total Brazil revenue. In the South, the structure is completely different. Smaller farms, higher-value crops and perennial production. So there, we built a distribution network that effectively operates as an arm's length extension of Corteva. Emblemas are our preferred regional distributors. Escalas are our selected cooperative partners, both highly value differentiated technology. This partnership structure enabled us to achieve a 57% increase in sales with our Emblemas in 2025. Those are choices turned into actions and segmentation turned into growth.

And beneath both models is a fit-for-purpose portfolio, new innovation like Haviza, expanded biologicals led by Nutricia and selected post-patent formulations that bridge us to the next generation of active ingredients. Same country, very different customers and very different routes to market. But one principle understand where value is created and you build the commercial model around it.

The same principle applies across the rest of the world where one playbook would fail. We don't use one. In EMEA, regulation and market structure shape the opportunity. In Northern Europe, we're growing in cereals with new lower use rate technologies as incumbent products face regulatory pressure. In Central and Eastern Europe, dedicated on farm teams generate demand at the farm gate and lock in purchase commitments ahead of the season. In Asia Pacific, we've continued to evolve our routes to market ahead of peers. In China, we reduced our sales territory by 60% in 2026 and redeployed those resources against fewer higher-value crops where we saw a greater opportunity for penetration and value creation. We took steps out of the channel. We began co-marketing with dealer partners and noncore markets, and we in-licensed local Chinese technologies to close important portfolio gaps by crop.

India required a completely different answer. There, we moved ahead of peers away from super distributors and built our own on-farm demand generation organization for greater control over our own growth. That paid off as our competitors struggled and some had to exit India entirely. Different countries, different channels, different customer structures, but one common commercial discipline, make deliberate choices around where to play and then build the model required to win there, which brings me back to where I started, the flywheel. If you remember one thing from my presentation, remember this loop. Our commercial teams work shoulder to shoulder with growers. They see the problems today's technology doesn't solve. Those insights help determine where R&D places its bets. And then R&D creates new active ingredients, formulations and mixtures.

Commercial takes those technologies to market to maximize their value across the life cycle and the cash that generates funds the next wave, both our own R&D and third-party innovation we're bringing into our portfolio. That is how the returns compound. And it's why I don't think of the commercial organization is the last step in the innovation process. It really sits at the center of the flywheel with the grower. We help determine what customers need, we translate it into value and that value funds what comes next. That's the difference between selling products and building a solutions-driven growth engine. We choose where to compete, we win through integrated solutions. We manage the full life cycle of every asset, and we reinvest in the next wave. That's how we grow through cycles, not by predicting them, but by building a system that performs in all of them. Thank you.

We will now take a short break. Our program will resume in 15 minutes.

[Break]

Please welcome Chief Integrated Operations Officer, Ralph Ford.

Good afternoon, and thank you for joining us. Innovation is the foundation of Corteva's growth. The innovation only creates value where it can be manufactured competitively, scaled reliably, protected from disruption and continuously optimized throughout its life cycle. That is the role of operating -- integrated operations. Our objective is to safely build the industry's most competitive, reliable and resilient system for bringing innovation to farmers around the world.

Achieving that requires deliberate choices across our footprint, sourcing strategy, technology, operating model and ways of working while continuously balancing cost, resilience and life cycle value creation. Over time, those choices have strengthened productivity, improved resilience, and enhanced our ability to make better, faster decisions across the enterprise. As molecules evolve from launch to maturity, we adapt our operating strategy, optimize performance profitability and cash generation. This is why we view integrated operations not as a support function, but as a strategic capability and a durable competitive advantage. Built on a foundation of operational excellence, our platform protects innovation, supports growth, strengthens margins improves cash generation and only converts innovation into sustainable shareholder value. Today, I'll show how this platform has evolved, how it creates value across the life cycle of a molecule and why it positions Corteva for long-term competitive advantage.

This slide summarizes the 4 ideas that define our integrated operations platform. First, integrated operations brings together all facets of operations into one agile platform, procurement, manufacturing, supply chain, logistics, technology and our external partners operate as an integrated system to maintain resilience. Second, we have transitioned from heritage setups to world-class systems and processes. We did not simply optimize the structures we inherited. We challenged them. We relooked at the network and the way work gets done and built a platform designed around the needs of the enterprise. Third, we drive strategic planning for every molecule throughout its life cycle. We continuously evaluate technology, sourcing, footprint, capacity, cost and supply choices to create value and build resilience. And fourth, flawless execution and productivity are embedded in our DNA. They are not stand-alone programs. They shape how we operate every day.

Together, these 4 elements allow operational excellence to convert innovation into shareholder value. This journey has been intentional and has touched every part of our operating system. We began with suboptimized active ingredient and formulation and packaging footprint, including multiple uncompetitive sites. We exited high-cost facilities, and optimize the balance of our internal and external network. We also moved from independent functions that were not optimized to support business to unified functions operating toward common goals and objectives. This shift created clear enterprise ports and faster, more coordinated decisions, removing duplication of work. Our sourcing model evolved from molecule-based sourcing and complex supplier relationship management to a more robust and balanced program, designed to maximize value and sustain a competitive cost position, leveraging our total buy across the enterprise.

At the same time, we moved from segment-specific molecule improvement initiatives to value-driven prioritization based on business impact. We replaced siloed work processes with value-based processes, optimized across the platform. The result is lower cost, greater resilience and a competitive advantage that last. This is more than a set projects and initiatives. It's a fundamentally different way of operating that creates the same results and value.

Let's talk about what this looks like today. Our platform combines a structural foundation with a proven execution model. The structural foundation is our network and operational excellence. We use an [indiscernible] internal external network aligned with strategic priorities, and we execute efficiently while advancing technology to drive down cost. Network optimization and operational excellence gives us the flexibility and capability that creates options. The execution model is built on optimized systems and processes. It partners with our structural foundation to protect margin and supply through disruption tariffs and generic competition. It also creates a leaner model that generates recurring cost savings and list margin over time.

These elements reinforce one another. The network enables supply resilience, the operating system powers the productivity engine. Resiliency and productivity are not competing objectives, managed together they drive stronger margin and cash flow performance. The platform gets stronger over time, not because market conditions improve, but because we continuously improve the way we operate. The platform is anchored by 2 complementary networks. Our active ingredient network is optimized the Safeguard intellectual property, create resiliency and ensure cost competitiveness across Corteva manufacturing sites and strategic partners. It protects the technology and process knowledge that differentiate our innovation, while giving us the flexibility to choose the right internal or external route. This applies us globally with the right flexibility and cost position.

Our formulation and packaging network is designed to be close to end markets and customers. That proximity creates efficient, reliable supply chains, which allows us to respond quickly to changing farmer demand in the regions and reduce our logistics cost and complexity. Across both networks, the priorities are consistent, protect IP and cost competitiveness through strategic partnerships, build resilience through diversified supply unlock value through strategic sourcing excellence, capture competitive input cost and drive productivity through value-based operational excellence. Two networks, one integrated platform and supply that stays low cost and resilient while moving quickly when demand shifts.

Now let's turn to the results, these changes to our platform have been delivering. At our 2024 Investor Day, we committed to approximately $300 million of run rate EBITDA improvement through cost actions by 2027. We are on track to deliver that commitment. More importantly, the platform continues to identify additional opportunities. We now see another $200 million of recurring savings by 2029, bringing the total run rate opportunity for 2024 through 2029 to approximately $500 million. These results are enabled by strategic sourcing, footprint optimization life cycle cost reduction, operational excellence and disciplined value-based decision-making. The additional $200 million requires no new capital and reflects permanent productivity gains embedded in our sourcing, technology, operations and operating model, creating lasting shareholder value.

Looking forward, we will continue deploying value-driven supply strategies across the life cycle and benchmarking our operating model and ways of working. The strongest proof point is that the capability itself is becoming more productive over time. One of the biggest advantages of our platform is the ability to manage the economics of every molecule throughout its full life cycle. We have a consistent playbook that has proven to work for both new and mature molecules. We drive value in 3 connected areas. Technology continuously improves molecule inflation and packaging processes. The supply network places components in the right locations, protect intellectual property and cost competitiveness. Strategic sourcing leverages scale across active ingredients, raw materials, formulations and packaging. The way we drive value changes with the needs of the molecule.

At launch, we established a cost advantage and designed the optimal state. As the molecule scales, we improve yields, reduce cycle times and waste and continuously improve the process. We align the footprint with strategic priorities, run operations at peak efficiency, unlock value through category management and build strategic supplier partnerships. This is not a onetime intervention. It is a repeatable operating discipline designed to sustain a structurally advantaged cost position. Our cultural foundation is operational excellence. And that culture helps us maximize the value of every molecule.

Now let's see how the play work works to drive results with a real life example based upon one of our new molecules. We begin to launch with a clear view of the desired cost position. As volume ramps, technology, operational excellence and strategic sourcing work together, to drive the unit cost down while revenue grows towards peak. In this real life example, unit cost reduces by more than 80%. The primary reduction comes from technology and operational excellence, including [indiscernible] advancements that protect intellectual property, higher yields, shorter cycle times and fewer all-spec batches. The remaining savings comes from strategic sourcing, including more multi-sourcing of intermediates and raw materials. As a molecule grows, [ Greggory ] management leverages scale to drive value. The business impact goes beyond margin. Lower cost allows us to serve a broader customer base within existing markets and can support additional applications. That increases the revenue opportunity and list peak value.

That is why productivity is not separate for [indiscernible]. By improving the economics from launch through peak, the productivity engine helps unlock growth and extends the value created by innovation. The same philosophy applies to a post-patent molecule, but the value creation focus areas change. After patent exploration, the productivity engine helps keep the product profitable as revenue changes and generic competition increases. In this real-life example, unit cost declines by more than 40% since play book was applied. The primary reduction comes from strategic sourcing. We increased multisourcing, resource to qualified suppliers and extend beyond the molecule itself to the formulation level. The remaining savings come from network optimization. We consolidate volume into the lowest cost, highest capability sites and optimize the balance between internal and external production.

These actions are enabled by capabilities built over many years, supplier relationships, sourcing knowledge, network flexibility and a clear understanding where your value is created. That experience allows us to continue improving the economics of a molecule even after patents expire. It is how mature products remain attractive businesses and continue creating value for shareholders.

Let me close by bringing the pieces together. What does the integrated operations platform do? It protects innovation and intellectual property after commercialization, it creates resiliency through footprint and strategic sourcing, and it drives cost down throughout every phase of the product life cycle. Why is that valuable? Because the process is repeatable and continuous. It builds revenue and margin potential, even in down markets. It broadens customer reach through cost efficiency and helps ensure local supply for farmers. The new molecules that Reza talked about will be able to be placed in the same playbook to optimize the value from the innovation. And why is it unique? We use a proactive model to reach a structurally advantaged cost position. Our so focus on crop protection gives us the freedom to optimize for one business and our speed of decision-making is designed to meet the pace required to compete in this market.

This advantage did not happen because markets improved or because of one initiative. It was built through deliberate choices about footprint, sourcing, technology, productivity, where to invest and where not to invest. Integrated operations protects and extends innovation throughout the life cycle. It is an operating capability that has been built, strengthened through intentional actions, proven their results, in position to create value for Corteva, our partners and farmers for years to come. That is a powerful combination and is one of the reasons I am confident in the future of Corteva.

Thank you. Now I'll turn it over to Jeff.

Please welcome Chief Financial Officer, Jeff Rudolph.

Okay. Let's bring this home. Well, good afternoon, everyone. It's an honor to be with you, and it's really great to see some familiar faces. So over the course of today's presentation, you've heard why Corteva is well positioned for the future. You've heard about the strength of our portfolio. The depth of innovation pipeline and the opportunities we see ahead.

My goal is straightforward, to explain how those strengths translate into earnings growth, cash generation and long-term shareholder value. The investment case for Corteva is not only that we become more focused business following the separation. Focus absolutely matters. It sharpens accountability, speed's decisions and allows us to direct resources towards the areas that we believe generate the highest returns. But focus by itself is not our end goal. Our ultimate goal is superior long-term value creation. So when I step back and look at Corteva's stand-alone company, I believe we have a unique combination of differentiators. We are the industry's only scaled pure-play crop protection company with an innovation engine capable of driving growth. an operating model that creates self-help margin expansion and a disciplined approach to capital allocation.

The financial framework I'll walk through today is really the economic output of those strengths. At the center of our financial framework is a clear model. Innovation drives growth, commercial and operational excellence, convert that growth into earnings, margin improvement and cash flow and disciplined capital allocation compound those returns over time. In simple financial terms, our responsibility is not to simply generate more revenue. It is to ensure that more of each incremental dollar of revenue drops to the bottom line and converts to cash.

So let me touch on a few key messages that I want you to take away from this section. First, we began with a strong track record. We have a demonstrated model built on innovation, portfolio choices and operating discipline that can deliver advantaged financial performance even in a challenging market environment. Second, our differentiated portfolio and pipeline provide diversity and balance and support profitable growth. We are not relying on a single product, region or even market recovery to deliver our framework. Third, operating discipline is what turns innovation into margin expansion and cash flow. Mix improvement, productivity and a fit-for-purpose cost structure are embedded in how we plan to run the company. And fourth, an investment-grade balance sheet and disciplined capital allocation gives us the flexibility to invest for growth while also returning capital to shareholders. Those 4 elements connect the strategy you've heard today from Luke and the team to the financial outcomes we expect through 2029 and ultimately underpin our ability to deliver value creation.

Now before discussing where we're going, it's important to understand what we have already accomplished. Since 2020, net sales have grown by more than $1 billion to just shy of $8 billion in total revenue for 2026 on a historical reported segment basis. Operating EBITDA has increased from roughly $1 billion to approximately $1.4 billion, and EBITDA margin has improved by approximately 250 basis points. And these results did not come from an easy operating environment. We navigated inflation, supply chain disruption, regulatory changes and competitive pressure across the industry. Yet, we continue to grow earnings and improve the quality of the portfolio, which we believe is a real differentiator versus industry peers and provides credibility to the model, we believe can work in varying market conditions. Several choices got us here, and all of them were deliberate.

New product sales have increased by around $1 billion since 2020 as a result of the continued penetration of products like [indiscernible], Rinskor and Zorvec. Prior acquisitions have established us as a market leader in biologicals, which have annual sales of more than $500 million for 2026. And at the same time, we made deliberate choices to exit approximately $0.5 billion of low-margin products where differentiation and returns were limited. Those exits reduced reported sales over this time period, but more importantly, they improved portfolio quality, margins and economic return.

We also maintained a disciplined focus on cost and productivity with approximately $200 million of expected savings in 2026 versus 2024 levels, about $100 million per year has been our rhythm, and we aren't done, as you just heard from Ralph. The important point is not simply that we grew. It is how we grew. Innovation improved portfolio quality, portfolio actions, concentrated resources on more attractive opportunities. Productivity improved cost competitiveness. Together, those choices drove stronger margins and a more durable earnings base. And when we compare our performance with the broader industry, the same pattern is evident, which you'll see on this next slide here. We captured reported revenue growth largely in line with peer average, and this was accomplished despite the strategic portfolio exits. And at the same time, we expanded the exposure we said to biologicals and more differentiated technologies.

But we supported margin improvement through disciplined cost actions and productivity. We'll continue to invest in the future with meaningful increases in annual R&D investment since 2020. That combination produced substantial margin outperformance relative to peers over the period shown, approximately 600 basis points to be specific. Again, largely due to our intentional and proactive approach to taking the necessary actions to enhance our portfolio with more differentiated solutions and ultimately drive profitability. Continuous improvement actions define who we are at Corteva. These are not onetime programs. They are embedded in our culture and how we plan to execute on our commitments. Markets will continue to fluctuate. Crop prices will move up and down. Weather, channel conditions and regulatory environments will change. Our objective is to build a business where an increasing share of value creation comes from the factors within our control: scaling innovation, portfolio quality, commercial and operational execution and capital discipline.

That is why the track record matters. It gives us evidence and confidence that our model works through the cycle and not only when market conditions are favorable. Another important strength of Corteva is the balance and diversification of our portfolio. As a stand-alone pure-play crop protection company with nearly $8 billion in revenue, we have meaningful positions across herbicides, insecticides, fungicides, biologicals and innovative solutions, including seed treatment. We are balanced across geographies, and we serve a broad range of crops and production systems. That balance reduces our exposure to any single crop, region, indication, regulatory outcome or product life cycle while also providing necessary scale. As an example, approximately 60% of our current revenue comes from crops outside of corn and soybeans. This provides multiple avenues for growth and supports a more durable earnings profile. We're not underwriting the future of Corteva to one molecule or one market outcome. We are building from a base of a broad portfolio with multiple sources of value creation potential.

Touching now on the high-level summary of our assumptions regarding the market outlook. Now you've heard from Luke and Brook, but to reiterate, we assume that the crop protection industry returns to a more historical growth norm with expected future growth at the low single-digit rate annually for the all-in crop protection market. Within that, biologicals and Seed Applied Technologies are expected to grow faster than conventional crop protection, which clearly benefits Corteva, given the advantage and growing positions we have in those parts of our portfolio. We assume on-farm demand remains steady. Pricing largely stabilizes over the planning period. and currency remains constant versus our preliminary 2027 outlook rates.

In other words, the framework does not require a cyclical recovery or an improved market. It largely reflects the continuation of the current backdrop where we have proven we can execute and drive earnings and margin growth. Now as a leadership team in a considerable time pressure testing these assumptions, we examine the factors that matter most to achieving the framework. And what became clear is that the biggest drivers of revenue and profit growth remain largely what is within our control, innovation, portfolio quality, productivity and execution. Those are the areas where we believe we can create the greatest value.

Let's now turn to the financial framework through 2029 on a stand-alone basis. So before diving in, let me just do some quick math for you. Let me summarize how we go from a segment level result in 2026 to stand-alone for Corteva which you likely saw in an earlier slide of mind. For revenue, stand-alone adds approximately $100 million in annual top line as a result of seed treatment sales to Vylor that are now treated as third-party sales given we will remain a preferred supplier. On EBITDA, segment level EBITDA is reduced by approximately $100 million due to our share of the Heritage Corporate segment within historical Corteva reporting. In addition, there are modest dissynergies impacting Corteva's prospective results.

And so with that, let's dive into the '29 framework. We expect net sales to increase from approximately $7.8 billion in 2026 to a range of approximately $8.4 billion to $8.7 billion by 2029. At the midpoint, that represents a compound annual growth rate of approximately 3%. We expect stand-alone operating EBITDA to increase from approximately [ $1.3 billion ] in 2026, to a range of $1.45 billion to $1.65 billion by 2029. At the midpoint, that represents a compound annual growth rate of 6%, with EBITDA margin surpassing 18% on a stand-alone basis by 2029.

Now what should stand out is that EBITDA is expected to grow roughly twice as fast as revenue. That is a result of our differentiated portfolio supported by new product growth, complemented by productivity and disciplined cost management. In other words, we're not just growing. We're improving the quality of growth. Importantly, these outcomes are the result of choices, choices about where to invest, where to compete, how to allocate capital and where we believe we can create the highest returns. New products and biological support revenue growth and improved mix. Cost of goods sold productivity expands gross profit. SG&A discipline provides operating leverage and ability to reinvest in R&D. Together, those drivers allow a mid-single-digit EBITDA growth rate to emerge from a lower top line growth rate.

So let's unpack the revenue growth assumptions a bit more on the next slide. The largest positive contributor is new products, with approximately $800 million in top line improvement during the planning period. Recent launches will continue to expand globally, while additional technologies enter the market through 2029. Notably, we expect to launch Haviza in 2028, which will result in new product growth to be more weighted toward the latter part of our planning period. Biologicals provide the second major growth lever. We expect double-digit volume growth across regions for this part of our portfolio, led by continued expansion in Brazil with product Nutricia, a novel biological solution powered by a patented bacterium to drive yield across many crops. As these 2 platforms become a larger share of our total company sales, they improved both the growth profile and margin profile of the company. The base business column reflects the normal realities of crop protection and how we manage our portfolio.

For instance, the impact reflects cannibalization from new product launches and normal life cycle fade. This is not new. It is planned for. And while we are expecting pricing to large stabilize across the globe, we realistic and expecting some lingering price pressure in pockets of the market. framework, we're assuming price is down about 1% per year through 2029. We are not minimizing those headwinds. We have incorporated them into the framework. Our confidence comes from the fact that growth from new products and biologicals is expected to more than offset those pressures and produce positive overall growth. That is what a healthy innovation-driven portfolio should do. It should replenish the base, improve the mix and create a longer runway for profitable growth.

Turning now to EBITDA. Similar to revenue, new products and biologicals are a significant driver, with approximately $450 million of combined incremental profit expected through 2029. Biologicals growth will support EBITDA improvement given they are not only growing faster, but they also carry attractive incremental economics. As they become a larger share of their portfolio, they have a disproportionate positive impact on EBITDA growth. We also expect more than $200 million of net cost of goods sold improvement from productivity initiatives across manufacturing, sourcing and supply chain, which also takes into consideration the net impact of remaining headwinds from inflation and tariffs, which will mostly impact 2027. Those positive contributors are partially offset by the base business pressure that I previously explained, including new product cannibalization and lingering price headwinds.

SG&A and R&D expense is expected to increase over the planning period as a result of intentional investments in commercial enablement and R&D. Despite the increases in SG&A, we do expect SG&A as a percentage of sales to improve over the plan period as we continue to drive a fit-for-purpose cost infrastructure.

Now specific to R&D, we estimate annual spend to be in the range of 6% to 7% of sales to support pipeline advancement and launch activities. That reinvestment in the business is important. We intend to fund the capabilities required to sustain innovation and commercialize the pipeline while still expanding margins. The EBITDA bridge there reflects a model we have already demonstrated can be successful. Growth platforms improved mix, productivity, lower structural costs and a portion of those benefits, it's reinvested to support the next wave of growth and enable our commercial and R&D teams to continue to deliver. Strong EBITDA growth and operating discipline matters because it ultimately supports cash generation. And we believe Corteva is well positioned to do just that. By 2029, we expect to generate approximately $2.2 billion to $2.6 billion of cumulative cash flow from operations. That cash generation gives us meaningful financial flexibility.

Our first priority is to reinvest in the business and sustain the assets and capabilities required to compete. We expect approximately 25% of the cash shown to support sustaining capital expenditures. This amounts to approximately 2% to 3% of revenue per year invested in CapEx, which is likely lower than the typical industry average as a result of the proactive and intentional actions we have taken as part of our integrated operations strategy. that Ralph just covered. On our dividend, it doesn't define us, but it is an attractive element of our valuation, and we are committed to growing it over time. The remaining cash flows after CapEx and dividend is significant, approximately $1.2 billion to $1.4 billion on a cumulative basis through 2029, which provides significant headroom for targeted M&A and share repurchases.

Our approach to M&A will be disciplined. We will focus on strategic fit and clear returns that are accretive to our hurdle rates, including opportunities that strengthen innovation, add differentiated capabilities or accelerating access to attractive markets where differentiation is ultimately rewarded. Equally important are the opportunities we choose not to pursue. The objective is not doing M&A for the sake of M&A. The objective is creating value and returns that exceed our hurdle rates. We will allocate capital to the opportunities that offer the highest returns, whether that's investing in the business, pursuing strategic M&A where we're purchasing our own shares. And when excess capital exists beyond those needs, we remain committed to returning it to shareholders.

Now all of this is underpinned by a very strong balance sheet that we firmly believe is a strategic asset and a competitive advantage of the company. And we remain committed to an investment-grade rating. Initial low leverage gives us flexibility to act with swiftness on growth opportunities. And the derisking of the heritage pension liability, further strengthens the financial foundation of the company. We will still be a seasonal business so is commercial paper remains important to fund working capital levels throughout the year.

Okay. So let's wrap up on this last slide. If there's one thing we want you to take away from today's discussion. It's that Corteva enters this next chapter from a position of strength. And what gives us confidence is not simply our position of strength today. but the momentum we see in customer-centric innovation, portfolio quality, earnings growth and cash generation. As we look ahead, we believe there are 3 reasons to be confident in this opportunity. First, we have a differentiated innovation engine that is creating meaningful runway for growth backed by an industry-leading pipeline, R&D capabilities and commercial value capture. The portfolio is becoming more differentiated more technology driven and increasingly weighted towards the areas of the market where we can help solve some of the toughest challenges farmers face.

Second, we have a disciplined operating model. Our expectation for margin expansion and cash generation is not based on optimism. It is based on the same operating principles that have driven our leading performance over the last several years. And third, we have significant financial flexibility. A strong balance sheet and robust cash generation give us the ability to invest for growth, pursue accretive opportunities and return capital to shareholders. all while maintaining a position of financial strength. We believe the strategy is clear. The financial framework is credible. And the priorities are well understood by the organization.

Now it's our job to execute. Thank you for your time. We appreciate your interest in Corteva, and we look forward to Q&A. And I think with that, Rafa, I'm handing it back to you for Q&A instructions.

Please welcome back Luke Kissam, Reza Rasoulpour, Brooke Cunningham and Ralph Ford.

Thank you. We will now begin our Q&A session. We'll be taking questions for the next 30 minutes. [Operator Instructions]

With that, let's begin. Chris?

Chris Parkinson, Wolfe Research. Just a curiosity, the negative 1% pricing embedded in the 3-year outlook. Is that a functionality of just what's been going on in the market the last couple of years and perhaps underpinning and conservatism. Does that embed the fact that you do have rising transportation logistics costs, energy costs, you name it in terms of some of the people that have been causing those pricing pressures? I would just love -- you've been back at this now for a couple of months. So I'd just love to hear your actual thought process underpinning those assumptions.

A couple of months. I'm going to export, right? I'll take a I'll let Brook add some color. I think we built that in if you really look over the last 3 years, you've seen much more significant price increase. And so I wouldn't say we're calling the bottom, but we're calling moderating of the price reduction that we see. If you look at some molecules around -- it's been in pockets. Pricing has been in pockets as opposed to what we're seeing today. And we expect those pockets to continue a little bit, but things that we think we can control. Brook?

No. Well said. I mean we track where the pricing indexes are for some of those key competitors. We've seen the declines moderating over the course of the last several quarters. we're just being realistic about the fact we've still got pretty intense competition in a number of our key markets. We've seen pricing pressure in North America. As Luke mentioned earlier, on one particular molecule, Brazil remains an intensely competitive market. So I think we're just trying to be realistic about what we're facing, but really stay focused on that life cycle management to make sure we're continuing to replenish with new innovation that's coming in that drives a 10% to 15% margin benefit for us above the average of our portfolio and circling out or cycling out those lower-margin products.

Kevin, please?

It's Kevin McCarthy with Vertical Research Partners. Maybe for Reza, can you comment on what percentage of your R&D budget is dedicated to molecules with new modes of action? And more broadly, I'd just be interested to hear anyone's thoughts here about percentage of the current portfolio that's on patents and off patent and how that's expected to evolve over time.

Yes. So from a pipeline standpoint, everything that we look at, if it's not a brand new mode of action, it's an underutilized mode of action or may be underutilized for our particular segments. So 100% of it is either a new mode of action, a underutilized mode of action or something that we think is attractive for our particular portfolio. We did some math actually just last week to think of how many new modes of action do we have within our pipeline because there's a lot in that early stage that is confidential, and we have 28 new modes of action within our pipeline.

Do you want to comment on the percent that is patented or not patented that revenue?

Yes. So 65% of our portfolio is patented or differentiated, and the remaining is off patent.

Dave?

Dave Begleiter, Deutsche Bank. Luke, one of your primary U.S. competitors has had some challenges in the last few years, the stock doing 90% the last 3 years. I'm sorry, one of your primary [indiscernible] challenging. So what the primary differentiating factors between you and that competitor that will differentiate your performance versus theirs going forward?

So I think it's a lot of things we talked about today. Number one, our pipeline has been better and is better, number one. Number two, from a commercial standpoint, Brooks Group has flexed that muscle on going to the -- you saw how she talked about going to the various segments and how she sold differently around the world, they know how to do that. That's not a new muscle for us. We know how to do that. So they've done a good job there.

And then I think more importantly, are just as important is the productivity improvement, where we've really been focusing on that productivity improvement. And I want to be clear about that. That wasn't productivity to get to a number. That was productivity to get better. And so that journey never ends. I mean in 2029, we're going to come back, and we're going to be looking at more productivity improvement. That's what we have to do to compete in this business. So I think -- look, it's the pipeline. And it's also the portfolio as a balanced portfolio, we weren't -- we're not a one trade pony. And so we've got a balanced portfolio. We've got the muscle -- commercial muscle that we flex on a real basis, a great pipeline that we've proven in the past that we have going forward and the productivity improvements that I think is embedded in this company's DNA.

And Luke, if I could just add if I think the balance sheet is the other one, right? I mean, you just heard our comments, I mean, it's -- it's a real strategic asset of the company. We're benefiting from the Heritage-Corteva organization and the position of strength that we're coming into. So that gives us a lot of capacity to go out and act decisively when we need to from a growth at standpoint.

Edlain Rodriguez, Mizuho. So if you become a pure-play Crop Protection company no longer attached to a seed company, can you talk about what you think you lose as well as what you think you can on being a stand-alone company?

Yes. What I think we gain is we gain a focus. We gain a focus on crop protection. So we're not -- that capital dollar is not competitive for the seed. We're able to grow our crop protection productivity improvements. Brook has turned loose per team into the market to sell only crop protection without worrying about how that may or may not impact seed or seed portfolio. So I think that focus in capital allocation in people development and how we go to the market is a very positive change for us.

I was talking to somebody earlier, somebody asked me a question we lose that bundle that you can sell with seeding crops, and we've been training the market since 1995 that the bundle is a good thing. So we're the first really the lead to make that change. I believe the thesis is correct that will enable us to do it, but the proof is going to be in the pudding. So we've got to be able to execute this strategy. We've got to drive our cost down. We've got to bring those products out to the market, and we got to focus 100% on the crop protection needs of those growers. And if we do that, we're going to be successful. And I think we're going to prove that thesis to be correct.

I can add just a couple of things to that to you. talking an example from a gross perspective, our Seed Applied Technology portfolio. That's a huge market. really good margins for us. And we have an opportunity to materially grow in that space beyond just selling to Vylor now, which will continue to be a preferred partner for us, but we have much more opportunity in to operate in that space. That perceived conflict with Pioneer when it comes to channel partners was also very real. There's a Coke Pepsi situation that can exist with a lot of these channel partners. So that gives us a lot more freedom to operate to go out and broaden and deepen our relationships with the channel as well as some of our competitors are making other decisions to go different directions. So we really do think that there is benefit to that fit and focus that he's thinking about.

Kristen Owen from Oppenheimer. I did want to follow up on that Seed Applied Technology business because the growth rates there, I expect it to be maybe a little bit conservative from what you've presented today. meaning higher than what you presented today. So if you could follow up on that. And then, Brook, my actual question is also for you. Just given the complexity of the commercial organization. Maybe help us understand how you keep cost of that under control? Because I look at that and I think, gee, that's a lot of people, that's a lot of differentiated strategy. Where do we see the synergy in the commercial market?

Yes. No, it's a good question. It's something we have to look at continually where we have to look at our cost. It's a process that we're going through again right now where you have to look market by market to understand whether you still have the right operating model. There are some places like in Brazil where, for example, in North 30% or 35% of our business direct to grower. That makes sense there. There are other markets where it wouldn't make sense at all for us to go direct because it would be way too you think about a market like India or China, for example, where you have millions and millions farmers would be impossible to do.

So we have to calibrate every couple of years on whether or not we've got that correct model in each market. And there are benchmarks that we can look at from a cost to serve perspective that we do look at. But it's a constantly evolving process.

And I think one of the opportunities going forward is going to be that we take what we've done in the integrated operations and apply that across our sales and marketing organization and think about the different tools that we have to use. That may not reduce the cost as much as it will increase the effectiveness of what we're spending, if that makes sense. So I'm really anxious about the opportunities we have there and really, really, really equipping work and her team with those type of tools because I think you'll see some significant improvements.

Josh Spector with UBS. I wanted to ask about the overall guidance. And I mean this was asked earlier in Vylor as well. I mean if you add together the Vilar and new Corteva targets, you have $4.1 billion. The guidance for Corteva hole is $4.2 billion a big message with earnings was that there's no dissynergies anymore. It's like $25 million. What's the disconnect? Are you guys changing anything with your outlook for crop chems within Corteva for this year? Or is this all rounding? How would you explain it?

Yes, Josh, great question. and trust that we looked at this 10 different ways when we were pulling the materials together for the 2 companies. So there's no change in guide for the company. The $4.2 billion is still the guide. I think what you're seeing, Josh, is just the mechanism presentation, there's some rounding in there. If we're 1 3 [indiscernible] and Vylor, if they're somewhere around their number it's all in the rounding. So I don't think anything that we're walking back from the combined guidance of the company and we still see a there relatively neutral dis-synergies on a combined basis.

Now Corteva going forward, we have residual modest dissynergies that we think are quite modest and manageable, and we're going to work to reduce those over time. Now that's not incorporated in our framework, but we think there's an opportunity to do that. Once we get going and evaluate the future cost structure in some of those areas where we have duplication. But unequivocally, there's no change in that $4.2 billion. It's just, I think, how things have come together from presentation purposes.

Frank Mitsch, Fermium Research. A follow-up and then an actual question. which is a great way to actually get 2 questions in, but that's fine. So the comment was made that the Crop Protection salesperson was cognizant walking into an account that they might not sell a product because it would conflict on the seed side and so forth. I'm curious as how pervasive was it?

Yes. I think it was different. It's -- you got to sometimes it's easier to sell seed than it is to sell crop protection. If you walk in, so what do you -- and you've got one is going to make x amount of money and one is going to make wine of money. You got -- what are you going to sell? You're going to sell the one that creates the biggest profit and that's where your focus is going to be. That's what turns that focus on, okay? And that's really what I'm talking about. It's the focus of that salesperson in the field and what they're selling 100%.

All right. The district manager wasn't slapping somebody.

No. Nobody is slapping everybody. We're a great, happy family. We love everybody. They're our biggest customer, man. I want them to be hugely successful. We're good.

Love it. And then I thought it was very striking the slide that showed the R&D efficacy relative to the peers. I mean, very striking. Now you mentioned you guys had 7 active over the last decade. I think the next leading 1 had 5 or something like that. what are they doing wrong? I mean, don't they -- what are they doing wrong if they're that much more inefficient on the R&D side?

Well, I don't know what they're doing wrong. But what I would say is what we're doing right because I don't work with them, I don't work for them. I had some of the things that we do really well. is we have teams that are really focused globally on driving for what is the highest quality opportunity in front. So you see an organization of folks who have grown up trying to work as hard as they can to keep that customer problem at the center of the table.

So it's not a question of lots of layers of organization, not a question of bureaucacy or a hierarchy. That's the way that we operate and operate in a way of continuous improvement. I think our size and our agility honestly does help us in this regard. And as we continue to help grow the organization and create those solutions to grow the overall company, we need to make sure that we hang on to that.

[indiscernible] is the mother of invention, okay? We've got to be more agile, to be successful. And we've got to be more intentional about the bets we're making to be successful. That's why AI that Reza talked to you about, we're going to have to expand that and be more successful on that because -- and look, there are going to be times if you look in the next decade in 2030 and beyond, we've got some big launches coming up. And we're going to have to find ways to have more formulation work done in the '28, '29 period to be ready for those launches. So we got to find money to do that and be even more intention. So that's going to be a focus for ours going forward.

Arun Viswanathan, RBC. My question is around a point you made that channel inventories matter. Your primary competitor did have low visibility or limited visibility into their channel. I think that was one of the reasons that they -- we're not able to foresee some of the destocking. Could you describe maybe your own communication with your channel partners? How do you get a really good look into the channel inventory situation? And then going forward, as you bring on these new molecules arguably, is your exposure to maybe distribution, especially in Latin America going to increase and maybe exacerbate that problem? Or maybe you can just elaborate on how you get the visibility into the channel?

Yes. So it's different by market, the level of visibility and true data that we have is different by market, but we're talking to our channel partners every single day. And so we -- between Ralph's team, my team, we're keeping a really close pulse on where things are. There's also something that's just embedded in our culture that's different than some of our competitors, where we make very intentional choices not to the channel, particularly when it comes to year-end in order to make numbers. want to make sure that we have a healthy channel level. It's good for our channel partners. We're getting a lot better themselves at managing their own inventory levels because cost of capital is where it is.

But it's also really important for us to make sure that we don't have 1 year be successful at the expense of another. So again, there's that data sources that we use. They're different by market, but it's that constant conversations that we're having with the partners to make sure that we're comfortable with where our levels are on a molecule-by-molecule basis. but a lot of it really does come down to culture as well. We just don't -- it's just not something that we believe in doing so it doesn't work out.

So we're tracking the volume that we're selling. We're tracking the volume that our customers may be importing into that country. We're tracking information for pounds on the ground that we do to triangulate all that. AI is going to be a real positive tool a powerful tool to help us do that.

The channel doesn't want to have a lot of inventory. They don't want to buy on what Brook, I think I'm right in saying this. We're seeing the channel make later and later or more in-time purchases than maybe they did 2 or 3 years ago, that helps some as well. But the stocking of the channel is something to keep the level of supply in the channel and the clarity of that is something that causes me to lose sleep at night sometimes. That is the -- one of the biggest worries that I see because you saw in there what happened at [ Kobe ]. You saw the supply went up. It was false, and all of a sudden, you got a destocking and you live through that price. And we just -- we can't do that. We need to operate more efficiently and more effectively, and that's what our plan is.

Ben Theurer of Barclays. Just coming back on like the drivers of growth and the offsets. So we talk about and look at the new products that come in biologicals. It seems like you expect at least on the top line outperformance in the new products, what is basically eaten away by base products coming down? What gives you confidence that to be the case? Or are you seeing any risks at the base products that are you currently having as they run off patents maybe decline faster? And with that, the impact on EBITDA would be obviously exacerbated.

So when it comes to the base decline, it's something that we have been doing for years and years. So this life cycle management process something that's new. And so we have pretty good calibration in terms of what our cannibalization rates are when we have new products coming out market and what that typically takes up of our existing base. It's something that, as we mentioned, we need to accelerate and do even better with our life cycle management the more we prepare in advance for a molecule coming off patent with new formulations, new mixtures, broadening of labels.

Going back to what Ralph was talking about in terms of getting that unit cost down, that opens up new markets where we can go and take a look at it with a fresh lens say, okay, we can enter Vietnam now where we can go into Japan because we weren't able to before as a result of our cost position. So we have a lot of years of data on it. We have -- which is what gives us confidence in the cannibalization rates that Jeff put forward. But we also have, I think, an opportunity to do that even better through even getting even better with our life cycle management process.

Yes. One thing I want to add, I'm going to ask Reza to talk about this for a second, is that this is not like the pharma industry. So when you have a patent cliff in pharma, that active ingredient goes bam, it's gone, right? Because the pharma company is selling the active ingredient to the consumer. We're not selling the active ingredient or the mode of action. We are selling a mixture of many of them.

So Reza, can you talk about that just a little bit because I think that helps explain your question.

Yes. And I think that's exactly the situation. So if you think about -- we've launched 7 actives in the last 10 years, but we've launched just since we've been together in 2020, over 1,000 new products. So a lot of that is the fact that farmer is different than the way that we work. We don't sell our actives to customers, they're formulations. And so we see those patent opportunities coming. We have a playbook for which we play out, and it's a playbook that's based on new formulations, what is the market, what is our cost situation? Have we done everything within Ralph shop to drive the active ingredient costs down? And then can we deliver something novel to a formulation that can get us a formulation patent. And that's really critical because that gets a lot more gas in the tank with products that are active that have already gone off market because you're making new formulations and new solutions. And that's really what we sell.

Yes. Matthew DeYoe with Bank of America. Haviza, very important launch for you. But you already have an agreement with a peer for Asian soybean rust. And it's kind of already a pretty competitive market, right? Everybody's kind of got an Asian soybean rust product. So how do you frame $500 million? And what happens to your existing agreement on fluindapyr? How does that translate into a -- is that a lack of a cost now? Or is it just going to be a new strategy where you have Haviza in certain markets, you have a fluindapyr appeared agreement with different markets. Like how do you navigate that?

Yes. So as we think about the value of visa, again, we're not selling the active, we're selling the formulation. So we have 2 primary formulations that are coming out, one for the North and one for the South. And they have very different issues. And I want to talk about -- in Brazil, yes, sorry. North Brazil and South Brazil. Yes. Thank you.

And so in North Brazil, we have a product, [ Victoria Pro ]. And what's really key about this is it doesn't only control Asian soybean rust. It's a combination of actives that also controls a lot of late cycle diseases. So it's a combination of Asian soybean rust and control of late-cycle diseases like anthracnose and other things that creates that additional value because a grower in Brazil, they're going to apply for over 4x in a particular season on soybeans. This allows them to simplify their portfolio, and that's the benefit that we're going to get from it. One really exciting thing about [indiscernible] is it's a totally novel formulation. It's actually to granules that are extruded that could never have been mixed together because they don't have shelf stability. We package it together by putting these granules together and makes it simple for the grower. They just dump it in the tank for their tank mix, but it creates an opportunity for value that wouldn't have been created any other way. So it's really differentiated based upon the other products on the market, not just for ASR, but also for this late cycle disease.

It's 2 for questions. It's really the same question. Talk about how you're generating a lot of cash, strong balance sheet, talking about M&A versus buybacks. What sort of view on the industry? Is it going to be initiates going to consolidate something you're expecting something that's going to be important part of the industry. And then as thinking about that to train excitement, do you really want to lean more towards lot of buybacks out of the gate? Or do you want to have some dry powder for M&A later? How are you thinking about it?

Yes. So we're looking at whatever we think at this time, can create the best shareholder value for our stakeholders. That's what we're looking at. What can we do to create highest value. I think, first of all, we've always got to invest to run our assets safely and efficiently. Number one, we've got to be a reliable supplier to all of our customers. If we do that, we got to get care and we can't have an outage. So one, we got to be reliable and we got to be flexible.

Two, we're going to continue to invest in innovation. That's what we're going to do. We've talked this entire presentation about innovation. If we don't invest in innovation, all of you to walk up here and just beat me, okay? We're going to invest in new products and drive new solutions. The third thing is we're going to have a dividend. I think it's important to have a dividend because -- and so does our Board, but because we believe that shows a discipline to our shareholders.

And so then what's left is the flexibility to buy back stock or buy a business that derisk or buy an asset or buy a technology or buy something that's got a derisk, but it's kind of fit within our strategy, okay? We're not going to do M&A for M&A's sake. And we're also -- just because we have a good balance sheet, doesn't mean we need to run out and spend like a drunk sailers. We need to be focused and intentional with that bill set to ensure that it maintains the value of the asset that it is for us today. So that's the balance. We're going to try to play. I know that's not the perfect answer for you, but we're going to return cash to shareholders where that's appropriate, and we're going to invest in the business, which is appropriate as well.

Just follow up, by the way, this is Joel Jackson from BMO for the transcript writers. Do you have an urgency to maybe want to do a strong buyback like October 2 to get going? That's one of the means if you want to get it.

Yes. So if you look, the fact of the matter is all been in a closed period in October so we're going to report some time in November. So we'll see where we go from there. And we've got a board meeting in late October. So we'll have a plan coming out there after we announce our earnings for the third quarter.

Jeff Zekauskas, JPMorgan. A 2-part question. When you talk about the $200 million that you might be able to save in the future. Is that really from the outsourcing of actives to Asian manufacture either contract or maybe you have a different arrangement? And maybe if you can give us an idea of how much of your actives are made in Asia now, and how much might be made 3 years from now? And then the second part is really for Luke. There's such an emphasis on innovation in the future. And you've out-licensed molecules from FMC. And when you think about the risks of industry fragmentation over time, is the general strategy of the company more in an out-licensing direction or more looking around for what businesses can be consolidated

Okay. Ralph, do you want to take that first piece?

Yes. So for the $200 million when you think about that, it's not just outsourcing that's driven it, right? So we have a big focus on technology improvements. So working with Reza's team in R&D on how can we improve the chemistry route to drive more differentiation there. We have supply programs across every molecule looking at how to improve yield, where we're currently manufacturing it. And so you see carry through that. You also see when we change a chemistry route, sometimes that means we have to do a reregistration. So there's timing of that when it hits and so we can predict the timing of when are we going to be able to shift to that lower cost. And so that's how we can look at that $200 million and be with high certainty. This is what we're going to be able to deliver in that time frame.

Looking at the balance of where do we produce in Asia. It's about 1/3 today. It's about 1/3 a day that we can go, but we also have multi-sourcing where we can shift to different locations. And so we do have that flexibility to be able to -- from a geopolitical standpoint, manage risk. And we will be looking at -- we have some external manufacturers within Europe that we're going to shift some supply to Asia to get better cost position there. But the $200 million is not really reliant on having changed a lot of our footprint balance.

So the out-licensing of the in-licensing, Jeff, we really are agnostic, okay? So if there's an opportunity to partner with other multinational corporations that have innovation, we're open to do that. We will in-license products. You saw what we did with [ romesoxafhin ]. We'll have other products like that. I like those kind of deals. They provide us a little more surety and less cost so that resin and his team can be looking at microbials and biologicals and other areas like that. So I like that aspect of it.

If we can -- what we'll have to do and we have that new product, when we have that did, we're going to launch. If there is a partner that can help us put it on more acres sooner and we make more money and hit maximum revenue in a shorter period of time, we welcome that opportunity. okay? So we're open for business. I guess, Jeff, is the best way for me to describe it. That's how we're looking at it. To me, it's what's going to drive the highest EBITDA growth for this company over time.

[indiscernible] from KeyBanc Capital Markets. Can you talk a little bit about how you see the outlook for the next few years as well as into the 2030s for some of your key products right now? So spinosyns well as the lease herbicide. And specifically on the Varpelgo active, you mentioned that was built on the spinosyn platform. So is it kind of a successor? And when you're talking about $700 million in sales, is a lot of cannibalization of the $1 billion franchise? Or is it $700 million cure addition?

Do you want to talk about Varpelgo?

Yes, we can start with Varpelgo. So Varpelgo is built off of the spinosyn franchise. It has a slightly different mode of action than spinosyns and has a slightly different profile. So there may be some opportunities as we get to launches with formulations where Varpelgo may be better fit for us than spinosyns at that time, depending on where spinosyns sits, but there's also new markets and new opportunities and new crops that Varpelgo provides for itself, which is why it has such an upside. In addition to that, Varpelgo works excellently for seed treatment solutions. Well, so as you think about seed treatment that's another major area of growth for Varpelgo.

In terms of just broader market outlook, I mean we continue to see very strong demand from -- or demand for differentiated technology. We do have a number of different molecules that are coming off patent the course of the next decade, of course, and it's nothing that's new for us. We have to constantly be managing the life cycle of each one of those assets as they come off patent. And as you saw, we have 12 new molecules that will be coming online 7 from a traditional chemistry and then 5 on the biological side as well over that time period. So it's something we're obviously very aware of. We're planning actively for.

But from a pharma perspective, from a channel partner perspective, we aren't seeing any decline. We're only seeing an increase in demand for technology because we've got climate change because we had increasing resistance issues. And those resistance issues are just going to get worse, to be honest, over time, with the proliferation of generics that we've seen come into certain markets when you don't have the right stewardship around that, particularly in markets like Brazil, where you have 7, 8 different iterations of insects that will come through in any given year, that resistance rate goes up really quickly.

If I can just take it back at a high level, the question that some people have asked me and that you're really asking about is we got a bucket of water here, right? And that new innovation pours more water in the top of that bucket. But there's a leak in the bottom of that bucket and water is coming out of that bucket. The question is how much volume or how much revenue is coming out of that bucket and how fast is it coming out? How much new innovation that we pour in the top of that bucket to keep it good and level and keep it higher? And how many mixtures and new formulations are we able to use to plug the bottom of that, so more to doesn't come out.

That's what everybody -- and I'm struggling on how to explain it in because it's not something where we say in 2028, we're going to lose x so we got to replace it with x plus 2. If it was that easy, I'd have a -- we had a slide up here on the presentation. So we need to take that back and come up with a way to explain it to you in a way that you understand the model and understand what we're working with and give us some time on that, but I understand what everybody is asking. We're trying to explain it, but it's -- you want more definitive numbers, and that's hard to do.

We have time to one last question.

Just 2 quick clarifications. Jeff, you talked about $100 million plus up because of the sales to Vylor, but that seems like a very small number for your seed coating treatment sales to Vylor. If I just think about their acres of corn and soy, I mean that's like under $2 an acre. So what is the actual -- what are your, I guess, seed coating sales to Vylor? And what's the delta between the 100 and what the actual number is?

Yes. Yes, definitely. Good question. So mean today, our seed treatment business before separation, it's roughly $400 million. So now we've got about $0.5 billion portfolio, so good size. What we supply to Vylor, right, was more substantial on an intercompany basis. But some of the things that we had to do as part of the separation is realign who is the best party to serve that end customer. In North America, we have downstream business to -- at the farm level reps, what have you. And [indiscernible] in the future was not best positioned to do that. So there was some repositioning of who's supplying who through this and the net number was 100. So think about the Vylor sales as a bigger number, but there's an offset that netted out to a $100 million improvement all in for us.

Okay. And then just on your cost savings bumping from $300 million to $500 million, what is actually going to run through the '26 number? So what incrementally from here going forward, the $500 million do we add for the next couple of years?

Yes. So the way we think about it is the productivity is pretty programmatic, right? It's about $100 million per year, Duffy, as you think about just the forward look. The one thing to keep in mind is $300 million gross productivity for '27, '28, '29 combined. We've got a slight offset to that. So it's a net -- a little bit better than $200 million net cost improvement because we have some [ Azul ] inflation and tariff impact, which is mostly going to impact '27. So I think '28 and '29, you'll see more of that gross productivity fall to the bottom line, where we'll see more acceleration towards that 6% growth rate on a planning period basis.

Okay. Thank you very much for the questions. So we'll now conclude the Q&A, and I will turn over to Luke for final.

Yes, thank you. First of all, I just -- I want to thank everybody for coming. This has been a long day for you all, and I appreciate everybody hanging in here with us through the day. We really appreciate your interest. I hope you saw the excitement that this team has for the opportunities that lie ahead. We appreciate all your questions, and we're looking forward to talking to you even more as we go through this '29 and get us off to a great space. So thank you all very much. Good job.

Good morning, and thank you for joining us. I'm Kim Booth, Head of Investor Relations for Vylor. It's great to have you here today. We have prepared presentation slides to supplement our remarks during this call, which are currently posted on the Investor Relations section of the Corteva website and through the link to our webcast.

We'll open up this morning hearing from Chuck Magro, Chief Executive Officer. Chuck will be followed by Sam Eathington, Chief Technology Officer; and Judd O'Connor, Chief Commercial and Operations Officer. After a short break, David Johnson, Chief Financial Officer, will speak to our financial framework before we proceed to a Q&A session with all the leaders.

During this call, we will make forward-looking statements, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties and our actual results could materially differ from these statements due to these risks and uncertainties, including, but not limited to, those discussed on this call and in the Risk Factors section of Vylor's Form 10 filed with the SEC. We do not undertake any duty to update any forward-looking statement. Please note in today's presentation, we'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found at the end of this presentation or in other investor materials available on our Investor Relations website. Welcome to Vylor's 2026 Investor Day.

[Presentation]

Please welcome Chief Executive Officer, Chuck Magro.

Well, good morning, everyone. Thanks for being here with us today. Welcome to Vylor's first Investor Day. It's been a year since we announced the separation, and it's -- we're delighted to be here with you. I think it's truly a milestone for the company, but I also believe it's a milestone for the industry. Vylor is a global advanced seeding genetics company built on more than a century of science and innovation. The name itself is derived from the word valor, acknowledging the generations of employees and farmers whose ingenuity and hard work have fed the world. feeding and fueling the world is core to who we are. The most important message I want you to take away with today is that Vylor is not a traditional seed company. It's a high-margin growth platform with a proven track record, entering a new growth business with several new product and market launches, and a deep competitive moat. This should lead to a margin and cash profile that is set to grow for the next decade or more. Today, we plan to share with you a new 3-year financial framework that is exciting and value enhancing by itself. But we're also going to share with you a decade-plus growth algorithm that could add a couple of billion dollars of bottom line growth from monetizing our proprietary next-gen technology all starting next year. This is a structural shift, from product to platform from seed seller to technology provider.

But let's start from the beginning. For those new to our story, seed is arguably the most important and perhaps the most emotional decision a farmer makes every year. Why? Seed determines yield and yield determines profit on a farm. Seed is also different from every other crop input, it gets better every year because we breed better versions every year. In fact, approximately 300 new hybrids and varieties are introduced annually. I can't think of too many other businesses where customers prepay to ensure they get the very best technology for the next year. And that's exactly what happens at Vylor. In fact, last year, we collected about $3 billion in seed prepayment in the fall. That's about 60% of our spring sales. A few things to call out on this chart. Today, Vylor has about $10 billion in revenues and 27% EBITDA margins, impressive numbers. But perhaps more impressive, it has market-leading positions in almost all major regions around the world, a $19 billion technology pipeline, which Sam will unpack for you next, which is the deepest and strongest pipeline we have ever had and twice as effective as anyone in the industry. All of this is backstopped by more than 8,000 patents.

So I think we're starting the Vylor journey today. from a real position of strength. But if you look back at the results over the past 5 years, I think we've had a pretty good track record. We launched over 1,700 new products, more than doubling our annual operating EBITDA -- that's a 17% CAGR. We've also grown our EBITDA margins by more than 1,000 basis points since 2020, a remarkable feat for sure. Now the drivers of this transformation, they are both cultural and structural. Culturally, we are focused on controlling our controllables. This is a mantra we have inside of the company. which is now firmly ingrained in our culture. But what is perhaps even more important are the structural changes we made to the business over the past few years. We moved from being a net in-license rose technology to a net out licensor of seed technology. In fact, we improved our net royalty position by over $500 million in the 5-year time frame. And this year, we will be net positive for the first time in our history, truly transformational. And we believe we're just getting started. And Vylor was built for this agricultural market, where seed and genetics are critical to solving some of the world's toughest challenges.

First, global food security. The world is adding nearly 2 billion people in the next 25 years, and it's getting more difficult to grow food, not easier. How do we increase production to feed all these people? We think the answer is science and technology. Changing weather patterns. Rising temperatures mean more drought, more floods, new pass suites and disease, we are seeing stress in all regions around the world today. In fact, the top 3 hottest summers ever were all posted this decade. Again, we think the answer is science and technology. And finally, the energy transition away from fossil fuels. Biofuels need to be part of the solution here and many governments around the world understand this. Global biofuel demand is on track to double in the next decade, creating significant opportunity for agriculture, for farmers and for Vylor. There are very few companies with the science and innovation capabilities to help solve these generational challenges. Vylor is one of them. I hope my now you're starting to see why Vylor is a special and unique company would allow me to be more specific. Our competitive moat is both deep and durable.

First and foremost, it starts with our genetic history and capability. Our proprietary genetic library is the foundation of all of it, built literally over a century. Germplasm is the primary driver of yield performance and ours is among the most elite in the world. And you just can't buy or build these advantages quickly. This is a simple biological fact, creating a significant barrier to entry. Finally, it's exceptionally difficult to replicate at a global scale, particularly when you combine our data, our AI capabilities, breeding and production infrastructure, our pharma relationships and routes to market. Seed is a living thing, breeding better versions of it and then scaling it around the world, literally takes years. Second, seed needs to be able to perform locally. So you need the global R&D infrastructure, reading and production footprint to be able to sell seat around the world. Our global footprint is the product of more than a century of investment and optimization, including about 200 facilities around the world.

We've also built a network of assets, expertise and partnerships that include over 19,000 contracted seed production growers, making us one of the largest contract farmers on the planet. Just a quick comment on AI. We've been deploying AI tools for years across the company. And as you might expect, we're seeing some of the biggest benefits in R&D with dramatically reduced discovery cycle times. Simply put, AI allows us to process more information, make faster decisions and scale programs quicker, which is exactly what you want in a long-cycle R&D process like agriculture. But beyond R&D, we're using AI to optimize our assets at scale. We've deployed 14 digital twins across the operations and supply chain that have already generated more than $100 million in cost savings. And commercially, last year, we introduced you all to Carl. That's our Gen AI tool for our Pioneer reps. Carl has decades of data available and is getting better every day. We do plan to share more about Carl's progress in 2027 with you. What sets while part is our ability to connect our data and AI from discovery all the way to the farmer acre, bringing value to farmers and sharpening our competitive edge along the way.

And finally, I believe one of the biggest competitive advantages we have is the ability to bring our technology to farmers through multiple channels, including direct to farmers through the iconic Pioneer model. as well as through conventional distribution channels and now through our new licensing business. But Pioneer isn't just a channel for us. It's one of the most important strategic assets we have. It's incredibly powerful, trusted relationships with farmers that makes us so unique. The relationship is not transactional. It's personal. Our Net Promoter Scores are the highest in the industry. In fact, our North American customer retention rate is about 90%, which is pretty hard to beat. Today, we have leading positions in almost all markets where we choose to play with the exception of soybeans in Brazil. We're changing that by leveraging the success we had with soybeans in the U.S. We've recently launched Conkesta, which is gaining market share very quickly in Brazil.

And we have line of sight to be a top 2 soybean player in that market by the end of the decade. But please look at the right-hand side of this chart, which is one of the most important takeaways from today's discussion. This is a summary of our core portfolio pipeline. Sam will cover this in detail but here are my takeaways. Starting next year, in addition to our hybrid wheat platform, which we'll launch in 2027, we will bring approximately 11 new corn and soybean technology platforms into the market over the next decade. These will be proprietary, first-of-their-kind next-generation science and performance, which in several cases, will literally redefine the market. These platforms are essentially royalty-free, and we will make many of them available for licensing. This is more than we've ever launched and more importantly, more than any of our peer has planned. Let me give you one example in the core market, which we will bring very soon in 2028. We expect to launch the first of its kind, what we call yield and yield stability trade that has the potential to deliver a meaningful step change in yield performance. It is the first biotech trait exclusively for yield.

Nothing like it exists in commercial agriculture today, and we believe that this innovation can redefine the yield frontier, establishing a new benchmark for what top-performing corn can achieve. We've gotten to this point after more than a decade of R&D and product testing, billions of investment, and we are literally testing the bounds of science. So with this as the foundation for Vylor future, let's talk about growth, both the short-term growth and longer term. Vylor has a clean growth algorithm, and it starts with doing the basics well. We bring better seed to farmers every year through continuous genetic gain and plant breeding with our customers getting the majority of that value through their yield benefit. We are also focusing on controlling our controllables. Productivity, deploying AI and automation to ensure we have the most efficient seed selling business on the planet. We also expect our corn and soybean portfolios to continue to lead the market with the technology pipeline I just summarized. But beyond our core business, we also have some very exciting growth prospects. It starts with licensing. This is our newest business, primarily corn and soybeans in the Americas, I'd say to start.

We're expecting to cross $0.5 billion in gross licensing income in 2027 and over $1 billion by 2035 and approach $2 billion by 2040. More on that in just a minute. Next year, we will launch our proprietary hybrid wheat technology platform. starting in the U.S., but then quickly moving around the world. Another $1 billion revenue opportunity, most likely by the end of next decade, this could prove to be a conservative estimate, and I'll explain more. Then there is the biofuel opportunity. There are lots of estimates about the potential size of the opportunity, but one thing to remember, the transportation and aviation fuel market is bigger than the entire corn and soybean market. This could be an additional structural demand driver for agricultural crops, an important source of income for farmers, and a nice value add for Vylor. Finally, we are actively pursuing other crops that we do not participate in today to determine the long-term value potential. With the advent now of gene editing and our full range of capabilities in this area, some more traditional crops are poised to be disrupted. We plan to be the disruptor. We will pick our crops in our markets, and we'll have more to talk about that in the months to come.

Let's deep dive on licensing. As I said, the most important incremental short-term value driver for Vylor. As licensing scales, we see so many benefits. Starting with more choices for farmers around the world, but also more support for the independent seed companies, higher returns for farmers as well as Vylor and lower capital intensity. In the Americas alone, across corn and soybeans, that's a $4 billion market today, consisting of over 100 independent companies in the U.S. alone. And we're one of only a few players positioned to take advantage of the market need. And that market is expected to grow in the next decade. Historically, we've monetized innovation primarily through selling seed. Going forward, we will increasingly look to licensing our genetics and traits across the industry. And we will eventually include opportunities in hybrid wheat, gene editing and adjacent crops. We see licensing as incremental because it targets acres and customers we don't work with today. It allows us to gain attractive returns on our IP library across third-party channels, geographies, cropping systems without the full working capital investment of branded seed.

And I'll repeat again by 2035, we're expecting to generate about $1 billion of licensing revenue, which could grow to $2 billion by 2040. The key point is this, over time, we will look a lot less like a traditional ag company and more like a biotech or IP-driven platform. Over time, this becomes a core earnings driver, a margin expander and a valuation catalyst. So if licensing is the new business for Vylor, hybrid wheat is essentially a new core crop for us. It represents a major new global technology platform. I consider this to be the third leg to our stool after corn and soybeans. Wheat is one of the largest crops in the world, nearly 550 million acres globally and 20% of the calories consumed. But historically, it's lacked meaningful innovation. It's largely grown the way our grandparents grew at 50 years ago. You can see on this chart how it's lagged hybrid corn. It's quite shocking. Our proprietary technology platform is about to change, all of that. We believe we can improve the economics of growing wheat for farmers and, very importantly, make a step change in global food security along with it. Our technology will provide a 10% to 20% yield improvement at launch with an increasing rate of performance thereafter, higher profit for farmers, a global solution and as a non-GMO technology, regulatory reviews will not be as lengthy.

It's also important to note that the hybrid wheat is not required to deliver our 2029 financials. This, to us, is a slightly longer-term growth platform, and it extends the durability and the duration of our growth story, a $1 billion revenue opportunity for us by the second half of next decade. In fact, we're only targeting about $100 million in sales by the end of this decade but then a nice ramp up to $0.5 billion by 2035. I should say Vylor and our predecessor companies have been working to develop this technology for about 15 years. So even though we are poised to disrupt the wheat market next year, we've been working on this for a very long time. Let's pivot from our products and markets to quickly discuss one of the most exciting scientific capabilities of our time, which will soon underpin much of what we do as a company. I've said it before, and I'll say it again because I truly believe that we are at an inflection point in the evolution of seed technology.

Gene editing is the most important advancement in agriculture in decades. Gene editing is not GMO. They are very different. In gene editing, we adjust the genetics of the plants, just as nature does over time in all living things. I call it the acceleration of nature. Gene editing is faster and more precise, which allows us to solve agricultural problems quicker, which the world needs today more than ever. One key point here, even though we have one of the largest patent estates in crop gene editing, we expect the technology to become widely available. But a critical nuance is you need something good to edit. We like to say, you can't gene edit bad germplasm into good germplasm. My point is simple. Gene editing science is extremely powerful but it's the germplasm that determines how much value you get from it.

We are planning to launch our first gene-edited corn hybrid across multiple regions later this decade. It will be a multi disease-resistant corn. Look at this comparison on the left. Today, North American corn growers lose about $1 billion in annual yield to disease. And they usually spend about $35 an acre to get some level of protection but it is expensive protection. We think gene editing can protect yields and reduce costs for farmers in the near future. And finally, strategically, we believe that our gene editing capability will allow us to enter new crop markets over time, and we are busy studying this right now. Let me give you one example, bananas. They are the world's most produced fruit globally consumed by 1 billion people today, the global retail market size, $125 billion, that's bigger than the U.S. soybean market at about $50 billion. So Banana is our big business. You can imagine the value of preventing bananas from browning. It's a game changer. You can see in the picture on the right, a gene-edited nonbrowning banana. We are involved with a small company called Tropic that is working to make that happen.

Let me wrap up with a few comments about capital allocation. Our thinking is relatively straightforward. We are a growth company with a long-term investment horizon. We also expect to have significant financial strength and flexibility. As such, we will have the ability to invest in growth and return capital consistently to shareholders. When it comes to returning capital to shareholders, we plan to have a modest dividend that will grow with earnings over time. But I would say that the dividend doesn't define us. But it is an important part of the capital we will return to shareholders. Our more preferred method to return capital will be by share buybacks. We're anticipating that our Board will authorize a new 3-year, $3 billion share repurchase program in the weeks following the official separation. It confirms our long-standing commitment to returning cash to shareholders. A couple of comments on M&A, if I may. As CEO, I always want the option to buy something instead of building it if that creates more value. We have a fantastic technology pipeline and the organic growth algorithm is very exciting. But I expect going forward, we will use M&A in new target areas we are building out more than we have in the past.

We will, of course, remain disciplined and very focused on our strategic plans but we are seeing more opportunities than we have in the past, and we are actively pursuing several Okay. Let's quickly get to the financials. Today, we're introducing a new financial framework through 2029. It's consistent with our past. It's simple and it's already all in flight. And all of this is organic growth, meaning it excludes any potential M&A. Let me start with the targets, 3% to 4% revenue growth, 7% to 8% EBITDA growth at the midpoint. EBITDA margins touching 30% by the end of the decade and a free cash flow conversion of 60% or better. The framework is a straightforward 1,2,3. One, continued strong market performance of our core business by rolling out our next-gen corn and soybean portfolios and bringing value to farmers along the way. Two, continued operational excellence and controlling our controllables. Our goal is to more than offset the rising cost of production, including inflation with productivity. And three, increased licensing in our corn and soybean business, especially North American core and Brazil soybeans, both are scaling now. We also expect to invest about 10% of sales and research and development. And we are making the necessary investments in wheat, licensing and gene editing in this 3-year time period to set up the next decade of growth, which you can see on the right-hand side of this chart should be at least as strong as the short-term numbers through 2029. And David will share more of this soon.

Finally, I'd be remiss if I didn't take a moment to acknowledge our proven and well-established leadership team, with the experience alignment and execution capabilities to deliver on the opportunity set ahead, with a demonstrated track record of delivering results. Collectively, this team has seen it all, and we are excited to start the next chapter of Vylor together. So let me quickly summarize. Vylor is a unique growth platform and it lies at the intersection of agriculture, science and intellectual property. We have multiple growth drivers, deep competitive moats and a long-term innovation leadership. The combination of licensing a new business, hybrid wheat, a new crop. Gene editing, a new science and biofuels, a new market creates a clear path to sustain value creation. We are all now focused on execution. We're becoming something different at Vylor, a technology platform built on genetics, powered by AI and monetized through IP. That's where the Vylor opportunity lies. Thank you very much, and I'll turn it over to Sam.

[Presentation]

Please welcome Chief Technology Officer, Sam Eathington.

Awesome. Good morning, everyone, and it's a real privilege and honor to be here talking to you about R&D at Vylor. So as you heard from Chuck, we have world-class innovation that would deliver both short-term and long-term growth, and we're committed to leading in new areas like gene editing. So let's take a look at how our R&D engine is poised to solve the agriculture's biggest problems and create new value for farmers and for our shareholders.

So for 100 years, we've led agriculture innovation. From the first commercial hybrid corn to spearheading the use of computers and genomics information in our plant breeding programs. Our first mover advantage is the foundation of Vylor going forward. Now our heritage has a strong track record of delivery, right? Since 2020, we've launched more than 1,700 new products across our 10 crops, including 5 technology platforms in corn and soybeans. Improved yield potential by more than 5%, and we've grown our IP estate to more than 8,000 patents and have the largest gene editing IP's portfolio in agriculture. This track record has allowed us to more than double our operating EBITDA and grown our EBITDA margins by more than 1,000 basis points since 2020. As we look forward, the scientific discipline and track record that we have will continue to put us in a leadership position. So in addition to the 300-plus new products that we launch every year, we will deliver a decade of innovation launching 12 new technology platforms across corn, soybean and wheat, the most in our history and more than any of our competitors.

Together, our germplasm performance in these new technology platforms drive our core business growth, plus a $2 billion licensing opportunity by 2020. And our leadership in gene editing sets Vylor up to grow in our current row crops and expand into new areas. So let's dig a little deeper into that. So wherever they farm and whatever they grow, farmers face pressures, right, from insect problems, weeds, disease, abiotic stress. There's almost $3 billion of global crop production is lost annually to these factors. In Vylor, we believe we have the pipeline of innovation to consolidate these generational challenges using advanced genetics across breeding, biotechnology and gene editing. And since we are a pure-play advanced genetics company, every dollar invested, every one of our scientists is focused on these solutions. And that focus is one of our key advantages. Our innovation pipeline has grown almost $4 billion since 2023. As projected to deliver a record of almost $19 billion in estimated peak net trade revenue by the end of the next decade, with accretive value actually increasing over 55%.

Our growth is driven by new science that's bringing novel technology for insect, disease and weed control. And in addition, we're launching the first-ever technology that helps farmers with extreme weather events, while increasing the yield potential of their crops. Over the next decade, Vylor will launch 12 new technology platforms in corn, soy and wheat. This includes biotech traits that reset the genetic control for major insect pests like fall armyworm and corn root worm across the Americas. The industry's first yield and yield stability technology. The industry's first multi-disease resistant corn with gene editing, which we'll call MDR and our own proprietary hybrid wheat breeding system. All these products are in field testing now. They're all in regulatory trials. They're all on track for commercial launch. None of this depends on us developing new science and the technology already works. And finally, we'll continue to bring new innovation in our other crops also. Just as an example, we recently launched our pod shatter tolerant canola. Now central to our value is our commitment to be disciplined in our ongoing investment and innovation.

At Corteva, our seed business made more than $10 of revenue for every dollar we invested in R&D. That's almost twice the return on investment compared to the other major ag companies. As we look forward, Vylor's innovation pipeline will continue this trend of having the highest return on investment as an advanced seed and genetics company with approximately $19 of peak sales revenue where every dollar invested in R&D, 2.5x what the peer average is. And we've achieved this ROI leadership position by investing in the highest priority research, leveraging external innovation launching products that make a difference and a focused investment in automation and nearly 150 advanced decision-making tools, including almost 100 AI models running in our programs. And because we're focused exclusively on advanced genetics, every R&D dollar goes to these solutions. We have the world's most elite germplasm pool, right? It consists of about 25,000 active corn in breads. These brands have been selected from more than 20 million inbreds over 100 years of corn breeding. And each year, our breeders create roughly 1 million new inbreds to identify a few hundred that are lead enough to be used in commercial products.

Vylor's plant breeding program is powered by billions of genetic insights and hundreds of millions of field insights, all streamlined by large-scale automation and AI models. Again, allowing us to consistently launch more than 300 new products every year. Every new class of products that we launch has higher yield potential than the prior class. This delivers more value to our farmers. And at Vylor, we capture about 1/3 of this new value, and we do this every year, every year. So here's a few examples. So Pioneer corn hybrid, 13 777, right? It's a blockbuster product we launched in 2025. It contains technology called PowerCore and the list, and it yields about 32 bushels per acre more than PIONEER 1151, which was a blockbuster product we launched in 2015. So if you think about it, our plant breeding programs and our biotech traits over the -- over that 10-year period, added about $300 in increased value on [indiscernible] corn seed. It's also kind of cool that 13777 is superior to a hybrid called 1197. And PIONEER 1197 was the first corn hybrid to break the 600-bushel per acre yield barrier. And we have these yield improvements across all of our crops.

In the case of soybeans in North America, we've increased yields by more than 8 bushels per acre in the last 10 years, which translates over $90 of increased value on a bag of soybean seeds. Now every year, we measure our improved yield performance and we see no sign of our annual yield increase in yield to be slowing down. So this means that the future products we launch will have increased yield more value to farmers, more value to Vylor. So now as we look back at the last 7 years, right, our top corn and soybean products have had a sustained yield advantage over our competition. We've had over a 6-bushel breaker yield advantage in corn and nearly 3 bushels per acre more yield in soybeans. And this is across more than 175,000 cumulative head-to-head comparisons, right? Our top 40 corn products went about 64% of the time in those trials. And our top 40 soybean products win about 70% of the time in head-to-head trials. And in both of these crops, we've actually seen our yield advantage increase in the last couple of years. Given the continual annual increase I talked about on the last slide, we expect this continued yield advantage versus our competition in our portfolio of top corn and soybean products.

Now what's exciting, though, as we look forward. I'm excited about 2 technologies that we're bringing to the market to increase that performance advantage. First, we're going to launch the industry's first ever Yield & Yield Stability biotech gene and corn. It adds on average 3 bushels of corn per acre. We've tested this biotech trait for 11 years, over 300 locations in North America and South America and dozens of elite hybrid combinations. I can tell you this is a real step change in yield performance that we will add to all global corn hybrids where biotech is approved. It's essentially jumping our yield performance ahead by 1 to 2 years. And then we get to add on our gene editing platform. We're field testing the last 2 years has demonstrated multiple gene edits with 4 to 8 bushels per acre yield improvement in our elite corn germplasm. This is, again, jumping our yield performance ahead by multiple years. And we're already seeing this year's trials looks like they're going to deliver the same results again. And what's exciting about that is it's just the beginning of our large-scale generative breeding program, and we're already seeing these very positive results.

And with gene editing offering a broader where-to-play opportunity in both crops and geographies, it's easy to see how Vylor's technology can increase agriculture productivity on a global scale. So backed by our strong genetics, our biotech traits and our gene editing platform, we will double our annual yield improvement, delivering more value to farmers and the Vylor. So now let's switch over to wheat, right? We leveraged our genetic knowledge and the capabilities to build a better proprietary hybrid wheat system we call Expedite. We've got 3 years of large-scale field testing across more than 60 locations, and we've seen a consistent 10% yield increase over the best variety of wheat products in the market. And in stress growing conditions, we see up to 20% yield improvement. And for a year like this where it's dry in the western market, that's a real advantage for growers. And what's interesting is our hybrid wheat shows these yield advantages without changing agronomic practices. A farmer doesn't have to increase their fertilizer or water. They don't have to apply additional crop protection sprays or they don't have to change their seating rates.

Many have tried hybrid wheat. Some continue to try using other sterile systems. Even at Corteva, we tried a lot of different systems in our programs, but really been quite limited in their success. And so as a proof point, right, we've seen competitor hybrid wheat products that yield no more than elite varietal wheat. So what do we have? We have a leading North America wheat germplasm program. We've got a superior hybrid wheat breeding system that we can deploy across all wheat classes globally. It works in all the genetics and all the environments we've tested. It allows us to increase parent seed 2x faster than competing technology, and it's scalable and it's reliable which allows us to increase annual yield improvement in wheat via our plant breeding program. So we're now preparing to launch. Our first North America launches will be hard red winter in 2027. And we'll follow that by soft red winter in '29 and hard red spring in 2030.

But at the same time, we're exploring global deployment of this technology, including in Europe and India, where we already have breeding activities underway. And we really do see this as the beginning of a new era where technology will significantly improve global wheat production, and we will become a third core crop of our business. Now while delivering yield is critically important to farmers, is equally important is protecting this yield and simplifying the farming systems. Our biotech program is now delivering distinct never before seeing scientific solutions in corn and soybeans. Over the next decade, we will launch 7 new technology platforms in corn. We're $6 billion to $7 billion in peak net trade revenue, giving us licensing opportunities and flexibility with our proprietary technology platforms in germplasm. Now corn rootworm and fall armyworm represent 2 of the biggest insect problems in corn. It causes billions of dollars of damage every year across the globe.

And we're introducing novel technology to manage these pests that will reset the durability clock for farmers providing them decades of sustained insect control and superior products in the marketplace. We'll start in North America, where we're building off a very successful platforms of PowerCore, Chrome and Bore seed, right? Our next-generation insect control platforms will enable us to have broader licensing. We'll introduce 2 novel traits for corn or control, both of which are non-BT modes of action. And this non-BT mode of action really matters because it gives farmers that durability of resistance that stack BT products can no longer deliver. In Latin America, we're moving towards the planned launch of a Bravo, which will offer farmers Lebadopterand control through 2 new proprietary modes of action. We'll then build on this platform with additional proprietary traits bringing 4 novel modes of action for fall army worm control to the market. And these platforms will provide farmers with best-in-class solutions but they'll also include our Yield & Yield stability, our MDR and our reduced stature corn technology, all of which bring additional value to growers.

In soybeans, we will launch 4 new technology platforms were $3 billion to $3.5 billion in peak net trade revenue. In North America, we're building on the success of Enlist E3 soybeans. The system has reached trait penetration over 65% of the acres. And we're seeing a clear 3 to 3.5 bushel per acre yield advantage in our lit Z-Series soybeans over our competition including -- this includes a yield lead in head-to-head trials against every competing in soybean trait system on the market today. We're now focused on expanding weed control flexibility for farmers through additional modes of actions for herbicide tolerance, and we have multiple paths to bring different combinations to the market. In Brazil, our Conkesta E3 soybean, our insect control soybean has grown a double-digit market share in just a few short years. We're building on the success of Conkesta E3 by accelerating the launch of our next-generation insect control soybean technology due to some favorable regulatory progress we've made. Brazilian farmers will soon have access to the broadest soybean insect control solution ever introduced in the country, and that will be combined with technology for weed control.

In addition, we're developing the industry's first Asian soybean rust resistant trait for Latin America. This innovation targets one of the regions most costly soybean diseases which threatens billions of dollars of value through yield loss and disease management expenses. These solutions will all contain MDR technology, providing more disease resistance in Latin America for farmers. Essentially, Vylor will be launching the most effective insect and herbicide technology platforms in both North America and Latin American markets. So now let's switch to gene editing. This is a technology that will transform agriculture production at a scale larger than biotechnology. As regulatory policy advances around the world, we see an expanded where-to-play opportunity in both new markets and new crops. And our Gen lytics ecosystem has put us in a clear leadership position.

Our focus on AI has accelerated the scale, speed and accuracy of our gene editing program. We've already predicted over 20 million different gene edits in our elite germplasm. We've expanded our platform to 16 different crops. We've more than doubled the number of genes we are targeting. And our ability to transform hundreds of elite corn and soybean lines means we deliver these gene edits directly into industry-leading germplasm, which ultimately turns out to create more on-farm yield. We actually had the best mega plexing system in the market. Recently, we just proved we could make 100 changes at one time with our gene editing platform. And combined with our proprietary CRISPR-Cas system we can essentially add any DNA sequence in any of our elite germplasm that we want to change. We have a new external innovation investment program, we're going to call that Vylor Edge. This will continue to expand our collaboration with global scientific community. And to date, we've completed more than 40 external collaborations, all of which enhance our capabilities and the products we deliver.

So now let's look at 2 examples of how we use this technology. So first, we've taken a pretty unique approach. We've actually integrated gene editing directly into our industry-leading plant being program. This way, we're leveraging our let global germplasm pool, our testing at scale and our genomics capabilities. You combine that with our gene editing system. We're now creating never before seeing genetic variation within elite breeding populations. And the power of this integration is our ability to edit hundreds of genes in the most elite corn inbreds in the world. This is all guided by the power of our AI tools, and gene editing is already advancing through our plant breeding pipeline. This creates new products with higher yield improvements that we believe will expand our product advantage. And this complete integration gives us a real competitive advantage. With the results we've seen to date in both yield improvement, along with other traits like standability, drought tolerance, geographic expansion of germplasm, we will double the annual rate of yield improvement in our products.

Just like the opportunities in hybrid wheat and biofuels, we see the future opportunities being unlocked in other row crops and in other crops adjacent to what we work on today. And as I said, this is just the beginning of what this science will do. The second example, we're using gene editing to really simplify disease management. Farmer doesn't know what disease they'll have to deal with. It varies year-to-year, field to field, both in presence and intensity. Our MDR corn protects against 3 full-year diseases and improve tolerance to a major stock run. There is no equivalent multi-disease resistance platform anywhere else in the industry. This really is a Vylor only product category, and we do have products actually ready to launch. In 2019, U.S. corn farmers lost over $1 billion in commodity value to the full year disease is a great lease spot, northern corn leaf blight and Southern Rust, all combined. While last year, U.S. corn farmers lost almost $2.5 billion of commodity value to Southern Rust alone. MDR offers that protection for what a farmer faces. As an example, in certain fields last year, that protection translated to 40 bushels per acre more yield by protecting against Southern Rust. And I can tell you, this is one of the most exciting wide-scale technologies I've seen since the introduction of biotech crops.

Again, we're building on our foundational advantages in scale, information and disease screening. We built a pipeline with 10 additional disease targets and more than 20 additional genes already identified. These new disease resistance genes will be added, providing the broader management of more disease and expand the global deployment of this technology. In the future, farmers won't be forced to select them on products for what potential disease they might see in their field, they will have that yield protection built into the bag of seed. Giving farmers peace of mind that their yield is protected regardless of what disease the season brings. As we've proven this success in corn, we're now extending this concept to other crops. We're already building our first-generation MDR system in soybeans, and we're conducting early testing in other crops. And I believe this management platform holds tremendous potential across not only our core portfolio but adjacent crops.

So let me wrap up why we're the clear leaders in both seeds and advanced genetics. We're a pure-play advanced genetics company well positioned to deliver near-term and long-term growth by solving global agriculture problems. Over the next decade, we'll launch 12 new technology platforms that bring unique and proprietary solutions to farmers around the world. From enhanced insect control to higher yield, to build in disease management to our new wheat hybrid breeding system. These platforms already exist in our field testing program, and we will launch the first hybrid wheat product next year. Our $19 billion pipeline is backed by industry-leading germplasm and our proprietary biotech solutions, in many cases, never before seeing solutions.

Finally, our disciplined approach to innovation continues to translate into an increased valuation of our pipeline and the industry's best ROI on every dollar invested in R&D. And so our commitment to solving global agriculture problems, coupled with our strong legacy of innovation, gives us the confidence we will extend our current leadership and we'll shape the future of gene editing. Thank you very much. And now let me turn it over to Judd.

Please welcome Chief Commercial and Operations Officer, Judd O'Connor.

Well, good morning. I'm Jude O'Connor. I'm excited to take you through a little closer look at our seed business. Today, I'll focus on how Vylor combines leading innovation, scaled operations, trusted brands and expanding licensing opportunities to create durable value. The story is simple. This is a proven core, a larger addressable market ahead and multiple paths to compound growth over time. The seed market is already an attractive and resilient value pool, supported by continued demand for crop outputs and consistent planted area. Farmers continue to prioritize seed performance because seed is one of the most important decisions they make each season. better genetics and technologies can translate directly into better economics.

Today, the traditional row crop seed market represents roughly a $60 billion grower-level opportunity, and we see that expanding roughly $75 billion by 2035. We expect to achieve above-market growth primarily through new technologies, new geographies and licensing, which I'll cover in more detail over the next 20 minutes or so. And as Sam and Chuck talked about, we see expanding opportunities to drive additional growth through hybrid wheat, gene editing and adjacent genetic opportunities that were not captured in this figure. This expanded opportunity is where we're focused on building an advanced genetics business that can scale innovation across crops, geographies, routes to market and partners. Let me briefly highlight our full operating model from R&D through production and commercialization, internally what we call One Seed. And why it's such a strong driver of performance at Vylor. It starts with R&D where more than 100 years of breeding expertise, superior germplasm and proprietary traits helped deliver year-over-year yield and productivity gains. Equally important, we design products with scalability in mind, ensuring strong performance not only in research plots but also in real-world production environments.

Our pipeline flows into our global production network, where we operate at significant scale. Our total production capacity is over 100 million units. And 85% of that is internally owned and operated by Vylor and we have the ability to leverage parent lines across geographies. This network gives us reliable, high-quality supply while allowing us to move seed efficiently around the world to support our global footprint. On the commercial side, our direct and trusted pharma relationships give us a stronger demand signal and help us align inventory more precisely to market needs. The result is a system that creates value for farmers through innovation, yield improvement and dependable seed quality while creating value for Vylor through pricing power, recurring revenue, high returns on capital and attractive margins. Unlike commodity grand production, where farmers make planning decisions based on current market conditions, seed production requires years of advanced planning.

First, we need to produce parent seed then use that apparency to produce commercial seed that we treat and condition, putting a bag to be sold to farmers. That means we forecast demand well before the crop is ultimately sold. This long planning cycle requires a highly coordinated supply chain design and ensure farmers have access to the right products when they're ready to plant in specific seasons and geographies around the world. In short, our end-to-end on seat approach connects innovation to execution. It's our integrated model that enables us to consistently create value, helping us to drive more than $500 million in productivity gains in the last 5 years. Sam discussed our R&D capabilities and strategy at length. So I'm going to talk a little bit more about our Global Watch seed operations and commercial strategy. At the core, Vylor is a seed operations network that is deeply embedded, highly scaled and very difficult to replicate. Seed production starts in the field where we plant, grow and harvest seed with an intense focus on quality and productivity per acre. We use data capture to enable decision insights for fields as well as our supply chain and plant processes.

Because seed is a biological product, we contract with growers to produce it, and we operate in an environment influenced by input costs, weather and commodity markets. Field costs our are our largest expense. We compensate growers based on the market value of green, plus a contracted premium for participating in an extremely intensive program to produce high-quality seed. That means driving yield and productivity per acre is one of the most important ways we manage cost, improve reliability and create value for customers and for Vylor. We grew this through a global grower network built over a century with strong local relationships, top-tier producers who understand the precision required in seed production. We currently have about 19,000 contract growers, forming over 1.5 million acres, making us one of the largest farmers in the world. Our field teams work closely with growers to use data and AI to drive decisions on planting, field management and harvest drive yield, quality and supply reliability. From there, we transition into plant operations where we condition, treat, package and distribute seed with a focus on scale, efficiency and consistent delivery.

What differentiates us is how tightly integrated field and plant systems are, and they're increasingly connected through AI, precision and automation. We leverage our R&D capabilities through One Seed operating model for intelligent design to ensure scalability and to match products to specific production growers in targeted environments, optimizing production allocation, improving yield and reliability. It's these technologies that have driven significant productivity gains, primarily field level improvements where we see the greatest opportunity. Looking ahead, our very intentional investment in AI and automation, yield optimization and more precise demand planning should make this system even stronger. This is not just a strong network today. It's a durable competitive moat with 200 R&D production and commercial locations around the world, plus the largest grower network all working together to serve as a core driver of long-term growth and value creation.

Our route-to-market strategy has been built around one principle. We want to meet customers where they are with the right offering for how they prefer to buy. This strategy is enabled by an industry-leading brand portfolio that lets us serve different customer segments without forcing a one-size-fits-all model. While the specifics of each route to market vary by geography, this slide reflects our overall strategy. We offer choices in our own brands, the 3 sections shown on the left as well as offering our technology through licensing. Let me start with our own brands. Our flagship Pioneer brand is global, high-touch, performance led, it's deep agronomic support and a century of innovation. This route-to-market represents about 1/3 of the U.S. seed market and about 80% of our global revenue today. Pioneer remains a powerful advantage, representing more than 75% of Vylor's corn and soybean sold globally and holding leading positions across major corn markets. In North America, Pioneer is the #1 corn and soybean brand. And more than half of customers have been with us for more than 8 years. In the U.S. specifically, we have grown 5 points a share in corn and 12 points a share in soybeans versus our primary competitor over the past 5 years.

As we look ahead, our target is to hold market share and volume growing primarily through technology mix. Next, another 1/3 of the market prefers to purchase through retail. We serve this market by complementing Pioneer with Brevant, our full-service retail brand in roughly a dozen countries. Brevant offers premium products, technology and broad access through a traditional retail model. Brevant has rapidly grown, representing about 10% of our global seed revenue today. We launched Brevant globally in 2019, in the U.S. in 2020, where we have consistently grown our share of shelf, and we're already at over 10% of corn retail position. We expect to continue to grow our share and volume through 2030 as well as technology mix. And the last third portion of the market for our branded business are those farmers who prefer to buy a local regional brand. At the regional level, we maintain a strong portfolio of local and distribution brands that combine global capability with local knowledge, relationships and very tailored service. This represents about 10% of our global seed revenue today, includes brands like Hoegemeyer, Fiegen cotton seed, Pinar and more.

As agriculture evolves, we continue to evolve our family of brands to improve efficiency and customer focus. On the right, we also extend our reach through trait and germplasm licensing available through our new Vylor One licensing business. Here, we give access to our technology through a large network of third-party seed companies. We're on target to reach $2 billion in out-licensing revenue by 2040. I'll speak more about that here shortly. Across these pathways, the model is complementary rather than competing, maximizing customer choice while expanding our reach. The outcome is a differentiated customer experience, backed by strong brands, segmentation, deep relationships and product performance. The model supports strong margin and aligns closely with our market route-to-market strategy. Together, these brands allow us to serve customers through the channel that best fits their brine preference while continuing to deliver technology, service and performance.

The broader point is that adoption is not driven by product alone. It's driven by the combination of product performance, brand trust, channel fit and consistent customer success. Moving to our corn business because this is one of the areas I'm absolutely most excited about. Today, we hold the #1 brand position in corn in both the U.S. and globally. As we've shared, that leadership is built on decades of investments in germplasm, world-class breeding capabilities, strong commercial execution and a portfolio of products like chrome worsen in PowerCore that consistently delivers value farmers across diverse environments. Our corn lineup continues to perform at a high level, providing farmers with industry-leading yield potential, agronomic performance and proven protection against key production challenges. This current success gives us a clear path toward trade independence and a strong foundation for what comes next.

Over the next decade, we will introduce 7 new corn platforms across approximately 90% of the Americas corn market beginning with our next-gen above for North America and Bravo, which was built specifically for the challenges that Latin America farmers face. Our pipeline is the strongest in our history. It includes solutions to help you protect against insects, weed pressure, manage increasingly variable weather condition and provides new approaches to disease protection that bring more value directly into the seed. Together, these technologies are intended to extend the performance of our germplasm and create differentiated solutions for farmers across major corn-producing regions. The market opportunity is substantial. These platforms create opportunities not only to improve farmer outcomes, but also to strengthen our competitive position across both our branded and licensed seed markets. As we introduce new generations of products, we'll continue to layer additional innovations into the portfolio, expanding the value proposition for customers while improving the durability and longevity of our technologies.

Importantly, this strategy is not about launching individual products. It's about building a connected portfolio of technology platforms. We will execute a disciplined commercialization approach, beginning with validation, demonstration activities followed by targeted market introductions and broader expansion across the Americas. This phased approach allows us to build competence, generate strong farmer experiences and capture the full value of these innovations at scale. Each new platform strengthens our branded business, expands licensing opportunities, enhances royalty potential and supports our expectation of generating more than $2 billion in incremental value by 2035 on -- the pipeline is more than our next wave of innovation. It is the foundation for the next decade of growth, value creation and leadership in corn, enabling us to shift from a trait purchaser to a trade provider. Turning to soybeans. We're on track, executing the plan we shared at our last Investor Day. The Enlist E3 system has been one of the most impactful seed technologies of this decade since launching in the U.S. in 2019. Enlist E3 has seen rapid farmer adoption because the value proposition is clear, it's practical and it's former preferred.

Today, Enlist E3 is the #1 herbicide tolerant soybean trait in the U.S. with roughly 65% penetration. Farmers value the system because it's easy to use. It provides near 0 volatility, reduces drift potential and offers a wider application window. It fits real-world conditions. But what really sets us apart is our superior record-setting germplasm developed over decades and delivering over 3 bushels per acre yield advantage, which just translates into higher ROI for farmers. We've shifted our offering to 100% Vylor germplasm, which will continue to give us a competitive advantage in the marketplace. This leadership is supported by a strong go-to-market model across Vylor owned brands and more than 100 additional seed brands through out-licensing. More than 95% of our seed portfolio contains the trait, making North America a proven leader at scale and a consistent revenue generator. In Latin America, the opportunity is about unlocking growth in Vylor's largest expansion market. Farmers there face increasing insect pressure and more complex weed challenges which play directly to the strength of Enlist E3 and Conkesta E3. Together, these technologies bring multiple modes of action for insect control and strong win management, creating a compelling performance advantage.

Coupled with elite germplasm, we expect penetration in Brazil to grow from less than 5% to more than 30% at peak. We're already making excellent progress, and we will achieve double-digit penetration in this 2026 market year. Our go-to-market approach is tailored to the region where the majority of farmers purchased through multiplier networks. So broad out-licensing to leading genetic suppliers is critical. When you step back, we have a proven U.S. market leader in a large Latin America growth opportunity. Both are supported by strong technology, flexible access and continued innovation. And today, as Sam explained, we're laying the foundation to maintain and expand that leadership. We will leverage our market-leading and Enlist E3 platform with herbicide innovations that cement our leadership in North America and through our germplasm and an early launch of our effective broad-spectrum insect control package in Latin America. We will accelerate growth, both through direct sales and through licensing.

Beyond corn and soybeans, Vylor can extend its R&D, biotech, digital and commercial capabilities into high-value regional crops. The strategy is very selective. We focus where we already have strong positions where farmers need are clear and where innovation can create attractive returns. Across wheat, sunflower, mustard, canola and cotton, we see more than 100 million acres of opportunity in key geographies. Looking at wheat. We have great experience with breeding and producing wheat. We've established market leadership where we have chosen to participate. And we see tremendous opportunity to expand segments, leveraging our proprietary expedite hybrid wheat breeding system. We'll be launching hybrids in hard red winter wheat next year in 2027, soft red winter in 2029 and Hardwood Spring in 2030, bringing farmers up to 10% to 20% yield gains in these new segments. Our hybrid wheat will be first available to growers through our Pioneer brand, first in the U.S. and then we expand -- expect to expand geographies as well as offer through our licensing business.

In sunflower, we're strengthening our hybrid performance and farmer ROI in Europe in the Black Sea region, while using differentiated defensive traits to protect yield. In mustard, a leading oilseed crop in India, we launched the first herbicide-tolerant mustard in 2026 and continue to bring and evaluate biofuel opportunities. In canola, we're capturing biofuel growth through breeding leadership while advancing next-generation traits such as pod shatter resistance to improve yield and reduce harvest risk. In cotton, our [indiscernible] and breeding engine support a strong #2 position in the U.S. with advanced traits, improving competitiveness and market share. We see tremendous opportunity for some of these crops to produce renewable feedstock to meet the 80 billion-gallon renewable fuel demand expected by 2050. We're leveraging our leading positions in crops, we know well to create additional value, and we already have well-established partnerships in the biofuel space with BP through our Atlas joint venture, which launched earlier this year and winter Conola in the U.S. through a partnership with Bunge, Chevron Ag renewables.

The broader point is that Vylor can leverage the strength of its corn and soybean platforms to deepen farmer relationships and capture additional value in more crops and in more geographies. Licensing is a critical part of how we improve returns on our investments and accelerate growth. We start from a powerful foundation more than 100 years of seed experience and the most complete and competitive pipeline of genetics, traits and technologies in our history. That pipeline is increasingly commercial ready with finished products that can be deployed through our own brands and through licensing partners. Our strategy is very deliberate and tailored by market. In the core Americas, licensing complements our branded business by expanding reach, increasing penetration and capturing value beyond the customers that we serve directly. Across Europe, Africa and Asia Pacific, we are more targeted, tailoring the model by crop and market dynamics across corn, oilseeds, soybean, hybrid wheat and other opportunities. A key enabler is our growing network of independent seed company licensees, supported by dedicated management teams that help partners succeed locally. This is not a one-size-fits-all model. We customize by crop technology and geography to align the right products and traits with the needs of each market.

Over time, the licensing pipeline evolves from technology access in the late 20s to mix evolution into the early 2030s to broader global expansion by 2035 and beyond. We should hit $500 million in gross licensing income by next year. By 2035, we are targeting over $1 billion in licensing income position. And by 2040, we expect annual license revenue of approximately $2 billion. Overall, licensing extends the reach of our technology, improves our R&D ROI and creates a higher margin growth stream through royalties and licensing income. To summarize quickly, Vylor is a proven seed and genetics engine with multiple paths to value creation, leveraging our proven core, larger addressable market ahead and multiple paths to compound growth over time. First, innovation-driven products and solutions, world-class R&D and proprietary germplasm give us a deep pipeline of technology.

Second, our global production network, scale and operational excellence allows us to deliver reliable, high-quality seed to farmers. Third, commercial execution excellence, trusted relationships, superior insights, help drive and create value through our established brands. And fourth, licensing and partnerships expand royalty and licensing opportunities and unlock additional growth beyond our owned channels. Together, these 4 value drivers reinforce one another through our One Seed approach, creating a resilient business today and a larger growth opportunity ahead. Thanks, and I think we're getting ready for break.

We will now take a short break. Our program will resume in 15 minutes.

[Break]

Please welcome Chief Financial Officer, David Johnson.

All right. Good morning, everyone. You've heard Vylor is one of the strongest technology portfolios in agriculture, an advantaged commercial model and meaningful opportunities to create value over the coming decade. I'll bring these pieces together in the financial framework for sustainable growth expanding profitability and strong cash generation. Pro forma 2026 net sales effect to be approximately $10 billion with $10 billion of that being product sales and $400 million of that in licensing income. Product sales are anchored by our leadership position in corn and soybeans, supported by complementary positions in other oilseeds and regional crops.

Licensing extends that model by allowing Vylor to monetize intellectual property across the broader industry with attractive economics and limited incremental capital. Our model creates multiple opportunities to capture value from every innovation Vylor develops. Geographically, approximately 80% of our sales are in Americas with our leading positions in North and South America, with the remaining 20% generated across the rest of the world. Our starting point is strong. and the growth algorithm is meant to build on our foundation in a disciplined manner. Turning to the next slide. Our financial framework through 2029 is grounded in realistic assumptions and is based on strategies already underway across the business. We're targeting net sales of approximately $11.2 to $11.9 billion by 2029. And representing roughly 3% to 4% annual growth at the midpoint. Importantly, we expect our revenue growth to translate into even faster earnings growth. We're targeting operating EBITDA approximately $3.3 billion to $3.7 billion by 2029, representing a 7% to 8% compound annual growth rate over the period at the midpoint. That operating leverage expands margins from 27% today to around 30% by 2029. That operating leverage expand -- the expands margin from 27% to 30% by 2029, reflecting consistent price for value, growing licensing income, share gains in attractive markets and approximately 60% free cash flow conversion.

We have some assumptions on our 3-year framework. The framework assumes seed plant area and crop commodity prices are stable. On-farm demand and competition remains steady and global trade policy and export access remained consistent. And importantly, we're not dependent on any regulatory approvals to execute on our framework. Slide 51 bridges from approximately $10.4 billion of pro forma 2026 net sales to approximately $11.2 billion to $11.9 billion in 2029. Growth comes from multiple sources. Price mix is supported by best-in-class germplasm, new trait introductions and expanding technology portfolio. The focus remains on capturing value tied to productivity gains for growers, not broad market price increases. Volume growth is supported by share gains in attractive markets and the cadence of new product introductions. Licensing income adds a layer of growth as technology adoption licensing agreements and next negation platforms expand. Currency is the only meaningful offset, and we're not assuming a benefit from exchange rate movements.

We have a modest headwind baked into 2027, and then we hold currency rates consistent through 2029. Taken together, these drivers support a 2029 revenue range of approximately $11.2 billion to $11.9 billion, representing a 3% to 4% annual growth over the planning period. As revenue expands, we also expect meaningful operating leverage across the business. Let me walk through how that translates into our EBITDA outlook. Revenue growth is certainly important, but ultimately, our objective is to translate that growth into expanding profitability and stronger returns for shareholders. Beginning with approximately $2.8 billion of pro forma operating EBITDA in 2026, we see clear path forward approximately $3.3 billion to $3.7 billion by 2029. This represents a 7% compound annual growth rate at the midpoint. Our outlook reflects both the increasing quality of our revenue mix and the continued discipline with which we manage the cost structure of our business. Continued value capture, disciplined commercial execution, and new technology adoption all contribute to higher earnings from our core operations.

While we expect to realize ongoing cost savings throughout the organization, we'll also continue investing in yield productivity digital tools and operational improvements that strengthen the base business over the long term. Our objective is to grow revenue faster than our overhead base, creating operating leverage that can be reinvested into the next generation of innovation while maintaining a balanced SG&A and R&D profile as a percentage of sales. The result is an operating EBITDA margin improving from approximately 27% in 2026 to 30% by 2029. As we think about the long-term growth algorithm for Vylor, it's important to recognize that our business is fundamentally different from many other agricultural companies. The value created by better genetics, superior germplasm, a differentiated trade technology has consistently allowed the seed industry to earn appropriate returns on innovation. Over the last decade, we've demonstrated approximately 2% to 3% annual price mix improvement, reflecting the value farmers place on technologies that improve yield potential simplified weed control and enhance overall foreign profitability.

Looking forward, we believe that opportunity continues. It's important to emphasize what sits behind that assumption. It's price supported by measurable improvements in foreign productivity. You heard Sam reference a specific corn hybrid that delivered more than $300 of incremental value per bag between 2015 and 2025. Over that same 10-year period, the price of the bag increased by approximately $100, meaning growers retain roughly 2/3 of the value created. Every year, our breeding programs continue delivering strong germ plasma. Every product cycle introduces additional technology, better trade packages and improve agronomic performance. And together, those factors as to consistently deliver greater value to farmers. That's why we describe this as our price for value strategy. We believe the most sustainable pricing power comes from helping customers generate higher productivity, and stronger returns on every acre they plant. Farmers continue to prioritize yield because it remains the single biggest driver of farm productivity and profitability. Even during periods of commodity volatility, investing in superior genetics author remains one of the highest return decisions a farmer can make.

Supporting that innovation engine is approximately $1 billion of annual research and development investment. We view R&D not simply as an expense, that is one of our highest return capital allocation decisions, as you heard from Sam earlier today. So when we talk about Vylor as an innovation-led growth company, that is the core of the argument. The business creates value through science has multiple ways to monetize that value. Turning to Slide 54. One of the most compelling aspects of Vylor's financial outlook is a structural transformation occurring within our licensing portfolio. Historically, our business operated much like the rest of the seed industry. We developed differentiated products, but we also paid significant royalties to access third-party technologies. In fact, as recently as 2020, we were a net in-licenser of approximately $700 million annually. Since then, you've seen that headwind steadily improve. By 2025, we've reduced our net licensing expense to roughly $120 million. And beginning in 2026, we expect to become a net licensing income business for the first time.

More importantly, we believe this is just the beginning. By 2030, we expect that to be a net license income position of approximately $300 million and by 2035, we believe that number can approach $100 -- $1 billion annually. This isn't simply a financial objective. It's a direct result of technologies that are already being adopted in the marketplace. Today, approximately 65% of U.S. soybean acres utilizing list technology, demonstrating the strength of our trade portfolio and the value farmers continue to see from the platform. We're also making meaningful progress in Latin America. Brazil remains one of the largest long-term opportunities for soybean technology adoption. And in 2026, and expect more than 10% of Brazilian soybean acres to utilize Enlist technology. While still early relative to the U.S., we believe this represents the beginning of a multiyear adoption curve that can become an increasingly important contributor of future licensing income.

Another important driver is the continued expansion of our licensing network. Today, we have more than 120 licensees globally, extending the reach of our technology well beyond our own branded seed business. Every additional license expands the acreage on which our intellectual property can generate returns, while requiring very little incremental commercial infrastructure. This is one of the defining characteristics of our business model. Looking ahead, innovation continues to expand the opportunity. Our triple-stack corn licensing platform, launching in the U.S. beginning in 2027, is expected to contribute approximately $40 million of incremental licensing income by 2029 with additional upside as adoption broadens over time. The strategic importance of this inflection is significant. Licensing improvement supports margin expansion, enhances the return on R&D and increases the scalability of the model. In short, licensing turns innovation to a broader capital-light profit stream. Over time, that creates a more powerful earnings algorithm for Vylor.

Moving to Slide 55. Cash flow seasonality is an important feature of the business for investors to understand. Agriculture has always been a highly seasonal industry, and Vylor is no exception. The majority of our sales occurred during the Northern Hemisphere planting season, while cash naturally follows the commercial cycle. As a result, working capital build during the first half of the year as we produce inventory, distribute product and support our customers. That working capital then converted into cash during the second half of the year as collections accelerate, and we begin to receive orders and prepayments for the next growing season. It's a pattern investors are already familiar with across the seed industry, and it is one we manage carefully through disciplined inventory planning and a strong balance sheet. The key point is that seasonality is a normal feature of our business. This means liquidity and balance sheet flexibility are important. At the same time, our business has demonstrated strong collections and a predictable cash conversion pattern by year-end. Over a full year, we continue to expect approximately 60% of EBITDA to free cash flow conversion, reflecting the attractive economics of our business model.

Slide 56 moves from earnings growth to cash generation to capital deployment. For 2027 through 2029, Vylor expects cash flow from operations of approximately $7 billion to $8 billion and cumulative free cash flow of approximately $5.5 billion to $6.5 billion. As mentioned earlier, free cash flow is expected to be heavily weighted to the fourth quarter, consistent with the seasonal working capital profile of the business. On uses of cash, the company expects a balanced approach. Roughly 20% is expected to support capital expenditures, roughly 15% dividend and approximately 65% for M&A and share repurchases. First, the company will continue to invest in the business. That includes capital expenditures to support the operating model and the commitment to R&D at approximately 10% of sales. Second, Vylor expects to return capital through dividends with a commitment to grow the dividend over time. And third, Vylor expects to return excess cash through disciplined share repurchases and will also maintain the flexibility to pursue strategic M&A. The company is committed to maintaining a healthy balance sheet with approximately 60% free cash flow conversion and a strong investment grade rating that supports flexibility and seasonal working capital needs.

The framework is intended to be balanced. It supports innovation, preserves financial flexibility and provides a clear path for shareholder returns. The balance is particularly important for our long cycle innovation business such as ours. Let's discuss what the M&A approach looks like for Vylor. Our objective is to enhance the innovation pipeline and growth potential of our business. The key areas of focus are wheat, adjacent crops and gene editing. These priorities align directly with the company's innovation-led strategy. We becomes the third leg of the stool and strengthens the core. Adjacent crops can expand the addressable market and gene editing can accelerate the pace of innovation and create new value for growers. The approach can include acquisitions and partnerships, but the criteria will remain consistent. Targeted and capability-driven, return focused and disciplined on valuation. Financially, opportunities need to support above-market revenue growth and create value above the company's hurdle rate. So M&A is part of the framework. It is not the foundation of the framework. The base case is built on organic growth, licensing, productivity and disciplined execution. Strategic M&A is an additional lever when it strengthens the model and meets our financial criteria.

Let me wrap up. We believe Vylor enters the next chapter of the business model that combines attractive growth characteristics with disciplined financial execution. Our outlook calls for approximately 3% to 4% annual sales growth at the midpoint, supported by leading-edge technology, continued value capture, expanding licensing income and steady market share gains across key geographies. Just as importantly, we expect that growth to translate into even faster earnings expansion. Through continued business mix improvement, growing licensing revenue and disciplined cost management, we're targeting 7% to 8% annual operating EBITDA growth at the midpoint, resulting in meaningful margin expansion over the planning period. At the same time, the business is expected to generate strong cash flow approximately 60% free cash flow conversion, providing the flexibility to continue investing in innovation while maintaining a balanced approach to capital allocation.

One of the most important takeaways is that this framework has built on multiple, complementary drivers of value creation. Innovation remains at the center of the story. It drives yields and benefits for our customers, expands our licensing opportunities, strengthens our competitive position and ultimately supports sustainable earnings and cash flow growth. Taken together, we believe these financial targets reflect a company with a clear strategy, a differentiated portfolio and a disciplined operating model that positions Vylor to deliver attractive long-term returns for shareholders. With that, I'll turn it back to Kim.

Please welcome Vice President, Investor Relations and FP&A, Kim Booth and please welcome back to the stage, Chuck Magro, Sam Ethington and Judd O'Connor.

We made it to everyone's favorite, the question-and-answer section. We'll be doing this for about a half hour. We have 2 mic runners in the room. So just raise your hands, introduce yourselves, and we'll try to get to as many people as possible. If I can do 2 things at the same time, I'm also going to be monitoring online questions. So if you're on the webcast and want to submit a question, we can do that as well. So we'll take the first question. Edlain?

Edlain Rodriguez, Mizuho Securities. Chuck, can you talk about the news from yesterday with California, potential impact of that? So that's one. And then two, and I think in the beginning, you talked about how law is going to be different from a normal ad companies. Like how should we think about how should Vylor in terms of in what lens is not chemicals, not ag, like what are you thinking, where the Vylor is.

Okay. Thanks, Edlain. I like the second question better than the first. Look, okay, so let's go back a year, right? When we first announced the separation, it was driven by an extensive review by the Board of Directors and the management team. And we believe that we're separating because it's going to make 2 very strong financially capable companies. We believe it's the right thing to do for all stakeholders, and it was a strategic business set of decisions. So when you think about what happened yesterday, let me just cut to the chase so we can get on to the second question. We absolutely reject all the allegation by the state attorneys general, and we do plan to defend the separation. And right now, we're expecting to separate these 2 companies on October 1.

And now what I will say, because I don't want to cut you too short is we issued a pretty extensive press release last night and then our brief as well. So I think that you should read that information. But for us right now, our planning hasn't changed. We're going to defend ourselves against the allegation and we plan to separate October 1. Let's talk about your second question in terms of the valuation. So us as operators, we have to give you our perspective, our plans and the financial numbers. You have to decide how much that's worth. But when I look at it, and I've been asked this question for the last year, I've done a lot of thinking, there really is nothing like our company that in the industry. When you start thinking about a pure-play advanced seed and genetics company, but you look at the future where I think there's going to be more value ascribed to genetic engineering. And we're seeing it in Sam's shop every day.

And then this last past the summer, I spent a lot of time traveling through Southeast Asia, Latin America through the United States, I've talked to our licensing -- our potential licensing customers, farmers, the channel partners, I'm more convinced today that the separation is the right business decision for both companies than even a year ago. So let's get to the final thought on my views on valuation. So how much is a company worth that is going to grow bottom line, high single digits, margins approaching 30% and converting 60% at least minimum to cash? That fits in a pretty special class when I think about it. And then if you think what that's backstopped by, we announced these, what I call the 11 plus 1. So we're going to disrupt the wheat business, which is the largest plant area crop in the world, and we're going to maintain our global leadership with that pipeline Sam described so nicely today in corn and soybeans.

And then with the gene editing capability we have, we could probably add new crops to that. But we're probably not going to be the seed seller for some of these things, right? So we're going to look, if you fast forward over the next period of time, and it is going to take us time. We're going to be monetizing our IP at a faster rate. And so these new adjacent spaces that we've talked about, I think, are going to be smart, small acquisitions, but it's really to advance the science. I don't really see us get entering the seed because we won't need to, if we do the IP right. So I'll leave you with those thoughts that this is a classic growth compounding company. I think backstop by technology that is already proven around the world and the next level of our technology is even more exciting.

Great. Thanks, Chuck. Next question Kristen?

Kristen Owen from Oppenheimer. Two for me. First, we spent a lot of time talking about the competitive moat -- so when you're thinking about the out-licensing opportunity, whether it's through 2035 or 2040. Can you give us a look under the hood, how much of that is a reflection of share shift, growth through the new platforms. Just help us understand how you're thinking about the competitive dynamics of existing traits available versus new traits from these platforms.

And are you speaking in terms of the licensing opportunity?

Specifically around licensing things.

So let's unpack this, right? We're very excited that we worked the last 5 or 7 years to get to neutral. But that still has about $400 million of out-licensing revenue but about $400 million of licensing expenses today. And what we're finding is we have more demand from these independent seed companies and we have supply. And recall the situation in early February, where we finally have freedom to operate when it comes to corn. So the growth opportunity now is think about it as $1 billion net between now and 2035. So call it, 9 years.

About 1/3 of that is simply not paying somebody else royalties. So then you start thinking about, okay, if that's $300 million or $400 million, you're talking $600 million or $700 million of out-licensing growth over that period of time. over 9 years, it's $65 million, $70 million a year in a market that is $4 billion and still growing. So my view is that this is very doable. I think it's actually quite modest. And 1/3 of it is simply not paying somebody else royalty expenses. David, what did I miss?

Yes. So we -- again, we did put out the number on the slides with $300 million for the end of the decade. We have built in a $200 million improvement into the 3-year framework. So we've gone from 0 to 200 and Chuck is absolutely right. A large portion of the improvement will be expense reduction been the near term 3 years, we will actually see a little bit higher expenses. As we move to corn, we have to pay those licensing costs. And when we move to our technology, again later in the decade, early next decade, that's where we see the acceleration of the improvement, I guess, is the way I would describe it, between the $300 million, say, in 2030 to the $1 billion in 2035.

Great. I take another question? Dave?

Dave Begleiter, Deutsche Bank. Chuck, the next 3 years is pretty well documented. But it looks like you have higher view, higher forecast beyond 2029. So how is the inflection point looking in your mind for that 2030 to 2034, the next 3 or 4 years on a sales and EBITDA basis and get to double-digit plus EBITDA growth in that next tranche of a period of time.

Let's talk about that in 2 years. But you're right on the concept. So when we think about this 3-year plan, let's talk about what it doesn't include. It doesn't include wheat. It doesn't include gene editing. And the MDR itself, how do you value something that can drive that sort of protection. So that's going to open up, I think, a lot of licensing opportunity. Even the YS isn't coming into later in the plan. So the next couple of years are sort of what we've had in its extension and then entering the licensing business.

But then as we get this decade, early next decade, I do think there's an opportunity, and we're not prepared to make any commitments today or anything like that, where we see, at least what we're saying is at least equivalent growth, but it could be higher. And it's going to be based on, okay, can we really disrupt the wheat market and how quickly can we move that technology around the world? And then once we have full freedom to operate in gene editing, I think that resets genetic gain. Sam said it, right? Conceptually, if you can double genetic gain and you can drive that kind of value for farmers, there's going to be a value for Vylor. And so how we share that we'll talk about in the future, but there is a world where the 2030s are more exciting than what we've seen as Corteva [indiscernible] in the last few years.

Great. Thank you. We'll take another question.

Ben Theurer from Barclays. Chuck, actually coming back on the gene editing point, and you've talked about this as being more of a 2030 period. Tell us where you stand compared to your competitors today? And how we should think about the ramp as we move forward, particularly with the opportunities in new markets where GMO might not be an opportunity but gene editing could be an opportunity for growth?

Let Sam talk about where we are in the pipeline and what we expect to launch, and then I can come back and give you sort of a perspective on the business value.

Yes. So as we've said, we spend about 10% of revenue in R&D, so roughly about $1 billion. We've allocated that to not only our plant rating germplasm program, but our biotech traits and then our gene editing program. We have given numbers on how much we do on each one of those. But if you look at our Gen-lytics platform numbers, I'd say those are clearly leadership positions in the industry when you look at the scale we're doing, the AI we're doing, the amount of stuff we're testing and pushing in the field. And what's pretty cool is MDR is first wave of products, but we have a whole pipeline of improvements coming through our breeding program that are for yield, drought, standability, we're changing germplasm deployment strategies as you name it. So quite a bit more to come there as we get into that next -- early part of the next decade.

And then let me -- I'll just be very quick with this. So from a gene editing perspective, you can't talk about our launches until you talk about global policy, right? So Europe, Parliament made the right decision, in our view, they're going to go all in when it comes to gene editing. It's very positive framework. They're going to need a couple of years for each country to implement their laws within that framework. Our technology Sam tells me almost every day.

The MDR it's ready to go. It's ready to go. So we conceptually could have MDR corn in Europe by 2028, 2029. Wouldn't that be interesting that, that technology is in Europe before it's in the United States because we're an exporting country in the United States when it comes to corn. So these are the things we're trying to figure out. Now we export a very small amount of corn today. And so -- and that's going to drive the decision that we have to make on, okay, can we do stewarded launches and control the technology. But we are looking at every option possible to get this technology in the hands of global farmers. American farmers, European farmers, Latin American farmers because I think once they see it, it resets the performance of next-gen corn, and it is that powerful. So I think we enter the market 2028, 2029. That's why it's not in David's numbers. But then as it scales, it could be very impactful.

Sam, just to dive a little bit into the science for a second. We got a question online about the Yield & Yield stability trait and whether or not it was truly incremental or if it was somehow just cannibalizing what we normally see from an annual genetic gain perspective.

No, it's truly incremental. We've tested it across, like I said, dozens of different genetic backgrounds. And so our plant readers are giving us our annual 1.5% yield increase. this just stacks right on top of it, and we see that in all of our trials.

Great. We'll take another question in the room. Kevin?

Kevin McCarthy of Vertical Research Partners. Two questions. First one is on wheat, Chuck, can you just elaborate on the commercial opportunity there as you see it across value per acre and the acreage ramp. Also curious on the licensing opportunity in wheat. And then the second question is on gene editing, you talked a little bit about this in your prepared remarks, Chuck, but to the extent that Gene editing is a force multiplier of sorts for quality germplasm. Does it make sense for Vylor to acquire more germplasm perhaps in the fruits and vegetables arena?

Okay. So on wheat, we're very excited about this technology, just to cut to the chase, Kevin, we'd say at scale, and it's going to take us some time. This is going to look like a global high-performing soybean business. And it's going to give farmers that option to plant whether they want as a double cropping system or as a summer crop, they're going to have economic real economic trade-offs now that they can make, which is super exciting for companies like us that are trying to bring farmers more options for their farming practices. So that's how we see it.

It's going to start in the U.S. I think Sam and Judd both covered '28, '27, '29 and then '30, the different varieties. At the same time, we're looking at other large markets. So LatAm is a large market. India is a massive market, of course, Europe. A lot of the germplasm pools are readily available, and there's no competitive difference. The elite varieties, there's not one major leader today because it didn't have the hybridization. So we think we can sort of access, acquire partner to get the germplasm, and we're doing that now. We're scaling exceptionally quickly. And so more to come on the rest of the world roll out. But the germplasm will not be our restrictor, I think it will be -- the technology is so different and so powerful. We only want to bring it into markets where we can protect the IP. So that will be 1 of the key determining factors.

Now in areas where we don't want to enter as Vylor, we may license the IP as well and just clip a coupon when it comes to the royalty. All that -- so we're doing a complete global look. So we'll have more to say next year on that. On the germplasm potential for M&A, yes. So we think that if we're going to enter one of the areas -- and I keep referring to fruits and vegetables, and my example was bananas, but there are other row crops that are low technology today. Think about rice, think about cotton. And we're really good at row crops. So it's not a foregone conclusion we're going to go all that way. But one way to enter it is to acquire a small company that has a relatively elite germplasm that we can edit or partner with. It might not be full M&A. There's no reason why we have to actually acquire the whole company. I think in this world, cross-licensing partnerships, Sam and Judd have been doing this for a very long time. We use the umbrella of M&A, but it might not be full acquisitions.

We're also being asked about weak margins and with or without biotech, if there would be some equivalency with what we're seeing on corn and soybeans.

I think the soybean is a good proxy for today.

Great. We'll take another question. Jeff?

Jeff Zekauskas, JPMorgan. Two questions. Your forecast for EBITDA growth of $2.8 billion in 2026. Is that a diminished forecast internally? Or is that at the lower end of a range. And then secondly, what's the relationship in general between your EBITDA projections and grain prices? Do you see the EBITDA projections as independent? Or are you assuming flat grain prices? Or can you talk about those 2 variables?

I'll handle the first one. Yes. So on the $2.8 billion, that is full includes corporate expenses. It's not a segment reporting look. And so it is actually apples-to-apples once you break out roughly half the corporate expenses that will accrue to each business.

Okay. And then Jeff, the way we think about our EBITDA projections, it's a combination of healthy farm economics. So whatever you define that as we're seeing share growth. And I think Judd covered that pretty well for corn and soybeans. So we've seen some share growth. And it's primarily in, I'd say the channels where we're underrepresented, right? So the retail distribution channel, our Brevant offering and then licensing. So I think our EBITDA is not directly related to the way you describe it is grain pricing because we're using our technology and our access to different channels, and we're growing volume in those channels.

When we look at how grain pricing is related on a percentage of revenue, the best way we can look at it from a farmer economics, we have been flat for some time. Farmer has been flat for some time at around 15%. We probably would expect that to continue again as long as we're bringing genetic gain every year to the farm.

Great. We'll take another question. Joel?

A couple of questions. First on reduced stature corn. Obviously, one of your major competitors is really gung hu, it's a blockbuster, it's [indiscernible] I'm thinking about some of your comments on reduced stature corn a couple of years ago, it seems that this is a smaller part of your deck. Maybe talk about your views on that versus your competitor and the future of corn? And then second question would be on the [indiscernible], it seems like, again, with your main competitor, it seems like they're a bit slower in rolling out some of their new soybean technologies. How do you think about that competitively? And if there's more room for you to gain share in the next few years?

Do you want to talk about how we're seeing reduced corn?

Yes. So great. Thanks, Joel. Reduced stature corn for us, I think did it nicely. It's -- we kind of see that 10%, 15% niche market at the end of the day. We've got a number of gene edits and conventional products in our pipeline that we've been looking at, and we'll continue to look at them. But we do see a little bit of shift. MDR actually changes one of the value propositions, right? Because part of the whole story was in-season access, expand spray capabilities. And now all of a sudden, you reduced the amount of spraying you need because you've built that into the seed, it fundamentally changes some of the value and acre opportunity for that concept. So we'll continue to move it forward. We'll bring it out with our technologies that are in above and below with MDR within timing's right.

And then our view of soy. So look, if you step back and look at licensing, we think the major growth of the net $1 billion by '35 will be U.S. corn and LatAm soy, okay? So we're already at 65% total market penetration with Enlist E3. But that wasn't your question, but I just want to set the stage that the growth platforms are going to come, I think, from those 2. So what do we do with U.S. soybeans when we're already #1? Well, 2 years ago, in anticipation of competitive products, we launched Z Series, right? So it's brand new, in 2022, I think, was the first season or 2023. And so now we've got 3 or 4 years of breeding for Z-Series already and still no new competitive products. So by the time they come to the market, we're going to have 6, 7 years of breeding a Z Series, which is already the market leader.

So we feel very good about our sort of chances to maintain U.S. leadership when it comes to performance of the germplasm. So then let's talk about herbicide protection because it's also an important dimension. I'm not sure exactly when they're going to come into the market and when they're going to reach penetration. But we still have one of the most competitive and I'd say the best herbicide platforms in the market today. And then our next-gen herbicide technology will be available, let's just call it, early 30s. So as the competitors are ramping, we're going to bring our next-gen herbicide technology into the U.S. So as long as we keep breeding Z-Series properly, I think we're going to have a nice germplasm yield advantage. And then our next-gen herbicide protection for the U.S. will come in the early '30s.

Thanks. We'll take another question, Chris, in the front.

Sorry. It seems like MDR is ready to go in terms of the gene editing side. Chuck, you gave an interview or a partial interview you're talking about strawberries and you mentioned bananas today. But when you think about the rest of the tangible addressable market for gene editing, how large is it how are you focusing the R&D dollars? I mean, over the last several decades, we've always heard, this is not from people in your position. Is it value? Is it shelf life? Is it -- it sounds like disease is a huge part of this could you just offer some insights in terms of how you're focusing those dollars on harnessing the market?

Yes, Sam would say not enough. And he's probably right, to be honest. Look, we're not going to walk away from our core corn and soybean portfolio. We're very proud of it. We built it over a century, and we think there's a lot of opportunity to continue to grow and scale it around the world. Then the next, I call it the third leg is wheat. And we're investing quite a bit, and we and that will start to move, as we've already talked about. But we are studying which crops, whether they're broad acre or fruits and veggies, that gene editing can potentially tilt the value scale towards the genetics. And we could either enter a licensing model, a royalty model or a seed selling model.

We don't have more to share with you at this point, Chris. But when you start looking at the addressable markets, they are as big or bigger than the ones we're into today. So there is a construct that the addressable market for Vylor is much, much larger than what Judd put on his slide, the future will be $75 billion. At one incarnation of that slide, we've tried to put a number on it. And we just didn't feel comfortable enough to put it out there yet, but it's significantly larger, but we also don't know where we want to play yet. So first has to come strategy, then we'll fill in the gaps on the addressable market. But the exciting part is as Sam said very nicely today, we are one of only a few companies that can actually disrupt some of these traditional crops. And the question for, I think, the Board and the management team is, okay, we're not going to do them all. We're not going to spread ourselves too thin, which ones can move the needle for shareholders.

Great. Take another question. Josh?

Josh Spector with UBS. I wanted to follow up on some of the licensing questions. And really specifically, I think in your comments, you seem to be talking about $100 million of incremental revenue opportunity perhaps this year into next year. Is that the main driver then over the next 3 years as that revenue drop through and then the costs start to fall off post 2030?

And then related with this is that $4 billion market, what has that been growing at over the last decade for corn and soy and how would you expect that to grow over the next decade?

So for the first question, we have built into the 3-year framework, a net improvement of $200 million. If you broke that down to the 2 components, it would be about $300 million of revenue and $100 million of increased expense as we transition into more corn. And to your point then, the reason why we accelerate even more beyond 2030 is then we will be reducing those expenses, and we will see an acceleration between 30% and 35%, which will be more balanced between revenue and cost in that time period.

And then, Josh, the licensing market, don't forget the way we define it is corn soybeans in the Americas. And I'd say that because of that and there's new planet area coming in, in Latin America, the growth rate is slightly above. So certainly, our growth rates we've seen, for example, just in the U.S. So we would say that and we don't want to provide a number quite yet because we're doing some ticking and time of the final numbers. But the $4 billion, if you fast forward out to 2040, it's up significantly. It could be up 15% or more.

Great. I'll take another question. Matt, if we can get the mic to you.

I have 2 quickly. Matthew DeYeo from Bank of America. David, just on working capital requirements in the balance sheet, right? Like how do we think about stand-alone Vylor, CP needs, maybe absolute dollar, if you look at like June 30, September 30. How does that actually build in GoPro or ebb, I guess? And then the EBITDA CAGR of 7% to 8%, it based on assumptions like a little bit of cost to productivity tailwind expected. Can you break those 2 out between cost inflation expected versus productivity expected? Because the next 3 years feels like a little bit more of an inflation backdrop than what we've had over the last few. And how that plays out ultimately kind of sets the tone for leverage, obviously.

Okay. So for the first question, if you look at the way, I would say, Corteva in total, the balance sheet kind of goes through the different quarters where Q3 is always where we have the highest kind of net debt position. And in Q4, we see the influx of the additional cash, particularly for Vylor. You're going to see that same just at a different level for Vylor. So again, we will see building that working capital through the year. Q3 will be our highest. We use commercial paper.

So you will see the commercial paper balance be at its highest level at the end -- and then we have this influx of several billion dollars at the end of Q4. That same kind of dynamic will happen with this business. Over time, if we start balancing more licensing and some of these other businesses in different hemispheres and what have you, over time, we hope to kind of normalize that a little bit more, but it's going to be with us for quite some time. And then on your EBITDA question, yes, it's a very good observation. We did not really build in a headwind or a tailwind for, I would call net productivity for the manufacturing base. We built in about $200 million of productivity but we did offset that with $200 million worth additional expenses. To your point, we are farmers. And so we've seen some increases in some of those expenses. And so in the framework we saw it would be prudent to balance that out in the initial guide .

Next question, Frank?

Frank Mitch from Fermium Research. Chuck, you -- if I look at the slide on uses of cash, $27 million to $29 million it looks like roughly $5 billion could be a portion of the share buybacks and M&A. Obviously, that $3 billion share buyback program is not set in stone. You might come short of it, you might increase it. But would you -- just thinking broadly, would you be disappointed if you didn't spend at least $2 billion on M&A over that 3-year period? How should we think about how you're looking at that? And then Sam, I was struck by the assertion that -- or the numbers that you've increased the pipeline by $4 billion over the last 3 years. Can you give some big buckets on that eye-poppin number.

Yes, Frank. So you got to remember, right now, we don't have a Vylor board that's constituted, right? So they need to do their job. I don't want to tie their hands, but we did say that we do expect a $3 billion buyback to be approved. So and we are pretty good at honoring those things when they come up. I think Corteva has, I think, proven that. I won't be disappointed because I never set a target to spend money. I set targets to create value. Now with that said, we are building an M&A group inside of Vylor, so that's the last remaining piece I need for my executive leadership team. So we'll be hiring an individual. The individual will be announced soon, and they'll be an external hire.

And I think it is important and to start with the executive in charge of that, work with the Board. But as I've said before, we're going to be disciplined. We're going to stay focused. I think that's going to be more bolt-on M&A. So nothing huge or transformational at this point that we can see. But an important part, I think, of the -- both the science and the commercial advancement of Vylor's full opportunity.

Yes. And just real quick on the portfolio valuation increase. It's really driven by some of the technologies we showed. So as we get our next-generation above ground and below ground North America, our next 2 generations in Latin America corn and [indiscernible] , those have all advanced further down the pipeline much closer to commercialization. Same thing with the soybean next-generation insect right? So those are those products right there are really big products for us that increases our value.

Great. So we're going to close out the Q&A session. If you didn't get your question in, feel free to speak to the leaders over lunch. I'm going to ask now for David, Sam and Judd to come off the stage with me, and we're going to have Chuck leave us with a few closing remarks. Thank you.

I'll be very, very quick. And first of all, I should have maybe said this so we started this, the entire Vylor leadership team is here. So we're going to spend a little bit of time with you. So please take the time if you didn't get your questions answered, if you want to know how things are going. These are the folks that run the company. I'd like to give you just a final -- a few final thoughts. I do think that we've got this point over a lot of thought and looking at the future value of both Crop Protection and genetics and seed. And Vylor is a pretty interesting opportunity, right? It's the only global pure-play genetics platform out there. And I do think it has a unique ability to drive long-term value. But the foundations are things that you should be very familiar with.

Corn and soybeans, relationships with farmers. I know lots of companies in the industry talk about relationships in this industry, if you have a farming background it is the difference maker for sure. And we have so many relationships with farmers that go back decades, and that pioneer channel is very special and very unique. When I look ahead though, the growth is going to be slightly different for our company. It's going to be licensing. So we're going to enter a new business. It's a business we've been in. We've dipped our toe in, but we're really excited, and we finally have the technology platform, I think, to drive value for farmers. And then hybrid wheat. Literally, we've been working on this for 15 years. It's on the doorstep and I think it's going to be a disruptive technology and go a long step forward to global food security as well.

We didn't talk a lot today about biofuels. I think the opportunity is exciting. Everybody seems to be working on it. We'll be ready when the market moves. But if you look at what's happening around the world, it's pretty interesting, right? India went to E20. Brazil has got E32 now on a temporary basis, and hopefully, the U.S. will move to E15. So these are all positive direction, I think, for agriculture and farming. Our goal is very simple. We're trying to be the best agricultural innovation company out there. Hopefully, you saw some of that today, and we look forward to updating you in the future. Thank you.

Hello, everyone. Thank you for joining us, and welcome to the Corteva Agriscience Second Quarter 2026 Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Kim Booth, Head of Investor Relations. Kim, please go ahead.

Good morning, and welcome to Corteva's Second Quarter and First Half 2026 Earnings Conference Call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer; and David Johnson, Executive Vice President and Chief Financial Officer. Additionally, Judd O’'Connor, Executive Vice President, Seed Business Unit; Robert King, Executive Vice President and Strategic Adviser as well as Luke Kissam, future CEO for New Corteva will join the Q&A session.

We have prepared presentation slides to supplement our remarks during this call, which are posted on the Investor Relations section of the Corteva website and through the link to our webcast.

During this call, we will make forward-looking statements, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, including, but not limited to, those discussed on this call and in the Risk Factors section of our reports filed with the SEC. We do not undertake any duty to update any forward-looking statements.

Please note in today's presentation, we'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in our earnings press release and related schedules along with our supplemental financial summary slide deck available on our Investor Relations website.

It's now my pleasure to turn the call over to Chuck.

Thanks, Kim. Good morning, everyone, and thanks for joining us. The headline for this quarter is straightforward, we are delivering strong results, we are raising our full year outlook and we are on track to complete our separation on October 1. The first half of 2026 demonstrated the resilience of our 2 businesses: the value of our technology portfolio and the execution discipline of our teams around the world.

In the first half, net sales increased 4%. Operating EBITDA increased 10%. And operating EPS increased 14%. These results reflect strong execution in both Seed and Crop Protection despite a dynamic operating environment. In Seed, farmers continue to place a premium on technologies that improve productivity and returns. That is reflected in the continued demand we are seeing for our latest genetics and trade offerings and the growing contribution from our new licensing business. We saw organic growth across all regions in the first half, which speaks to the durability and the basic need of that technology demand.

Crop Protection also performed well this half. Volume gains on new products, which are becoming a larger part of the business every year, remain robust and pricing of these products was essentially flat in the first half, which we consider a success in this environment.

Even in markets where pricing remains competitive, our teams are delivering productivity improvements and demonstrating operating discipline that allows us to continue expanding margins and improving earnings quality. The strategy we have deployed in Crop Protection for several years, building a more differentiated portfolio supported by innovation and commercial excellence while proactively reducing our cost of production is working. And we continue to strengthen our pipeline, particularly in nature-based products. You can find details in the deck about a recent acquisition that expands our capabilities in that area as well as industry recognition for some of our crop health innovations.

So Corteva's first half performance was a result of execution. It was driven by technology adoption and being nimble in the market through productivity improvements, licensing growth, operational discipline and, of course, strong execution. Across the company, our teams have done an excellent job balancing separation-related work while maintaining focus on customers.

What we are seeing today is the outcome of deliberate actions we have been making for several years. We have invested in differentiated technology. We have strengthened our germplasm portfolio. We have expanded our trade capabilities. We have built one of the strongest innovation pipelines in agriculture, and we have stayed disciplined on productivity, cost management and asset optimization. Today, those investments are translating into measurable outcomes.

What is particularly important is that these results are being achieved in a market that is increasingly rewarding innovation. Farmers around the world continue to make investment decisions based on productivity, yield potential and return on investment. That is exactly where Corteva is strongest. And while the external environment will always be dynamic, considering weather, currency, trade flows or geopolitical uncertainty, the fundamentals that matter most remain healthy. Global demand for food, feed and biofuels continues to grow. Crop prices are up. However, farmer margins remain tight, so they continue to prioritize value-driven investments while remaining cautious on discretionary spending.

Our technology portfolio is aligned with the needs of our customers, who are looking for ways to produce more while using resources more efficiently. That is supporting confidence in our business. As we look ahead, we remain confident in our outlook while continuing to monitor several external factors, including ongoing pricing pressure in pockets of the Crop Protection market. What gives us confidence is that the factors within our control continue to perform well. So while we remain realistic about external risks, we entered the second half with a favorable outlook, a healthy respect for the market environment and confidence in our ability to deliver the commitments reflected in our updated guidance.

As a result of our first half performance and confidence in the second half, we are increasing our full year outlook. We now expect operating EBITDA of $4.1 billion to $4.3 billion and operating EPS of $3.60 to $3.80 per share. At the midpoint, that represents approximately 9% EBITDA growth and 11% EPS growth versus last year. This is because multiple parts of our business are performing well, strong technology adoption, new product momentum, growth in licensing, productivity gains and cost discipline. And looking beyond 2026, the long-term opportunities for both businesses become even more attractive. You'll hear more from us on that in September.

Turning to the separation. Our message remains simple. We are on track in executing according to plan on time and under budget. Over the first half of the year, we achieved several important milestones. We announced Luke as the CEO of New Corteva, and he is here with us today for the Q&A session. We introduced Vylor as the name of the future advanced seed and genetics company, completed key leadership appointments, publicly filed the Form 10, appointed both Boards of Directors and engaged with credit rating agencies regarding our planned capital structures. These milestones represent significant progress and provide confidence that both organizations will be fully prepared to operate independently.

Regarding dyssynergies, I'm happy to report that on a run rate basis, we've largely offset the impact of separation. This is the result of a lot of hard work from our employees and ensuring we're setting up 2 org structures in the most efficient way possible, placing time, money and resources where they matter the most and giving both companies the flexibility they need to excel on their own. We'll see something in the range of a $25 million headwind this year due to the timing of the separation activities, but this is a great result overall.

Looking ahead, several important steps remain. We expect amendments to the Form 10, finalization of the capital structures, completion of the remaining IT separation activities, effectiveness of the Form 10 and we will be holding our Investor Day events on September 15 in New York. Assuming completion of those final milestones, we are targeting October 1 as the separation date with Vylor beginning operations as a separate public company.

While separation activities have remained a major focus for management, I want to emphasize something that I believe is important. We have maintained our performance while simultaneously preparing to launch 2 public companies. That speaks to the strength of our organization and the commitment of our people. Teams across the company have managed the complexity of separation work while continuing to innovate, serve customers, drive productivity and deliver strong financial results.

As we enter the second half of the year, our priorities are clear: first, continue executing for our customers; second, deliver on the commitments reflected in our increased guidance; and third, complete the separation efficiently and successfully, which will help position both companies for successful futures. Thank you to our employees, customers, partners and shareholders for their support.

Before I turn the call over to David, I want to make a personal observation. This is my final earnings call as CEO of the combined Corteva organization before our planned separation. When I look at where the company stands today, I'm incredibly proud of what our teams have accomplished. We have strengthened our portfolio, built industry-leading innovation, improved execution, expanded margins and position both future companies for success. Coming into 2026, since the year Corteva was formed in 2019, we had already improved operating EBITDA by $1.7 billion with over 750 basis points of margin enhancement, all while investing nearly $9 billion in R&D, which is just astonishing to think about what it is going to do to help transform the future of agriculture.

And finally, we returned close to $8 billion of cash to shareholders in that same time frame. I'm confident in the leadership teams that will guide both organizations forward, I'm confident in the opportunities ahead for both new Corteva and Vylor, and I'm confident that the work we have done over the last several years has created a strong foundation for long-term value creation.

With that, I'll turn the call over to David.

Thanks, Chuck, and welcome, everyone. Let's begin on Slide 6 and with our first half financial performance. Overall, we delivered a strong first half with continued execution across both Seed and Crop Protection, translating into higher sales, meaningful EBITDA growth and nearly 200 basis points of margin expansion.

For the quarter, net sales were $6.4 billion, while operating EBITDA increased 4% to $2.3 billion. As I mentioned during our first quarter call, our business results are best reviewed and has. Looking at the first half, net sales increased 4% to $11.3 billion, while organic sales grew 2%. Margin expanded to 32.8%, driven by continued value capture in Seed, productivity improvements across both businesses and disciplined cost management.

Within Seed, organic sales improved across every region, led by North America and EMEA, reflecting continued demand for our differentiated technology portfolio, our focus on capturing value and increase our licensing income. As expected, Crop Protection pricing remained under pressure due to competitive market dynamics, particularly in Latin America. However, strong adoption of new products continue to drive volume growth, helping partially offset pricing pressure.

These commercial gains, combined with productivity improvements, favorable royalty performance and lower input costs drove operating EBITDA to $3.7 billion, an increase of 10% over prior year. Importantly, both businesses contributed to margin expansion, demonstrating that our strategy continues to balance growth with disciplined execution.

Turning to Slide 7. This bridge highlights the key drivers behind the first half EBITDA improvement. Operating EBITDA increased approximately $350 million year-over-year to $3.7 billion. Price and mix contributed nearly $100 million as we continued executing our value-based pricing strategy in Seed, although those gains were partially offset by competitive Crop Protection pricing.

Volume added roughly $40 million, reflecting strong North America Seed demand and high single-digit growth in Crop Protection new products. Cost performance remained the largest contributor, adding more than $160 million through lower input costs, manufacturing efficiencies and continued productivity initiatives. In addition, currency provided an approximately $85 million benefit during the first half, primarily driven by the euro. One additional contributor was approximately $90 million of improved Seed net royalties, reflecting lower royalty expense together with higher royalty income as we expect to be net royalty positive this year. Overall, we're continuing to demonstrate that disciplined execution and technology leadership can drive meaningful earnings growth even in a dynamic pricing environment.

Let's move to Slide 8. The first half demonstrated strong execution across both businesses. Seed organic sales increased low single digits as North America Seed continue to benefit from market penetration and strong customer demand for our differentiated technology portfolio, coupled with increased royalty income. Crop Protection pricing declined low single digits, consistent with our expectations, while volumes increased low single digits, primarily on demand for our new products.

Productivity initiatives lower input costs and favorable currency all contributed to first half margin expansion. Looking ahead to the second half, our assumptions remain largely unchanged. We expect Brazil corn area to remain approximately flat. Within Seed, we continue to expect low single-digit organic sales growth. Within Crop Protection, volumes are expected to grow at a high single-digit rate led by continued adoption of new products, while pricing is anticipated to decline in the low to mid-single digits.

We also expect productivity savings to continue contributing during the second half while recognizing the potential impact from geopolitical uncertainty and ongoing foreign exchange movements. Overall, the first half performance provides a strong foundation as we move through the balance of the year. As a reminder, we anticipate a typical seasonal earnings pattern in the second half with the third quarter operating EBITDA loss in the range of what we saw in 2024 and all second half earnings delivered in the fourth quarter. Overall, we expect second half EBITDA to be about flat compared to last year as the net impact of tariffs, dissynergies and the Middle East conflict are all weighted to the back half of the year.

Let's turn to Slide 9. Given the strength of our first half execution, we are raising our outlook for the full year. We now expect operating EBITDA between $4.1 billion and $4.3 billion, representing approximately 9% growth at the midpoint versus last year. This outlook reflects broad-based organic sales growth across the portfolio, together with additional benefits from the controllable actions we've consistently discussed throughout this year, including productivity, cost management and continued operational execution.

We're also increasing our operating EBITDA margin outlook to a range of 22.5% to 23.5%, reflecting continued sales growth and disciplined cost management.

Finally, we've raised our operating EPS guidance to a range of $3.60 to $3.80 per share, an increase of 11% at the midpoint versus last year. While higher net interest expense partially offset some of the EBITDA improvement, we continue to expect another year of strong earnings growth and margin expansion. Overall, the updated guidance reflects our strong first half performance and confidence in our expectations for the balance of the year.

Turning to our key takeaways. First, we delivered a strong first half through continued commercial execution across both Seed and Crop Protection. As expected, first half cash flow was impacted by the Bayer agreement, onetime separation items and the pension contribution announced last quarter. Absent these items, we would expect full year free cash flow conversion to be in line with our midterm target discussed at the 2024 Investor Day.

Second, our growth platforms of disciplined execution on controllable actions translate directly into meaningful EBITDA and margin expansion.

Third, based on this performance and our confidence in the second half, we're raising our full year guidance for operating EBITDA, margins and EPS.

Finally, we're progressing as planned toward the targeted October 1 separation, and we've largely offset the impact of dyssynergies on a run rate basis. We're confident both businesses will begin the next chapter from positions of financial strength and operational momentum.

Now let's turn the call back over to Kim.

Thanks, David. I'd like to briefly highlight a few things about our upcoming Investor Days. On September 15, we'll host separate Investor Day events for both Vylor and Corteva at the New York Stock Exchange. Both events will be webcasted and registration is currently open. These events will provide investors with a deeper look at each company's strategy, innovation pipeline, long-term financial framework and capital allocation priorities as they prepare to operate as independent public companies. We believe these sessions will provide additional insight into the value-creation opportunities for both organizations, and we encourage everyone to join us by registering today through the links on the Events and Presentations page of our website.

Now let's move on to your questions. I would like to remind you that our cautions on forward-looking statements and non-GAAP measures apply to both our prepared remarks and the following Q&A. Operator, please provide the Q&A instructions.

[Operator Instructions] Your first question comes from the line of Vincent Andrews with Morgan Stanley.

Wondering if we could talk a little bit about in the Seed business for the second half of the year. I see in the slide, you're expecting flat corn acres. So I'm kind of wondering, is that what you're seeing in the order book? Is that sort of an El Niño kind of assumption? So what's driving that? And then also, from a pricing and mix perspective, what you're anticipating, particularly as it relates to Conkesta penetration?

Vincent, thanks for your question. Yes, for the second half of the year, obviously, North America -- the Northern Hemisphere is really wrapped up. It's all about what happens in Latin America and particularly in Brazil. From an acre perspective or a planted area perspective, we have typically seen low single-digit safrinha's expansion on a year-over-year basis for the last several years, 3, 4, 5 years in a row.

We could still see that, but we also could see it flatten out a little bit in 2027. Obviously, we'll have sales orders come in at the end of this year, fourth quarter. Our order book is on pace with -- well, it's actually ahead of the market a little bit at this point in time. So we feel quite confident. Our product portfolio feels good. We're in a good position. We've had strong pricing in Latin America in particular. So all in, as we go into the second half of the year and order book in the fourth quarter for safrinha for execution in that planning window, January, February, March. We feel like we're in a very strong position and yes. We just -- we feel like we're in a real good spot.

Conkesta.

And Conkesta. Yes, we've had good momentum with Conkesta. We think we're going to be high single digits, low double digits in terms of penetration in the market with Conkesta E3 in 2027. And so yes, on plan and continue to be very optimistic about the performance of that product.

Your next question comes from the line of David Begleiter with Deutsche Bank.

Your next question comes from the line of Chris Parkinson with Wolfe Research.

Great. I'm going to switch to my conversation to Luke, if I may. Given this is kind of your first interaction with investors regarding the kind of further longer-term outlook of Corteva, I'm just kind of curious on what you're the most excited about in terms of the market, in terms of what you think you can do with the company's narrative? Is this going to be a focus primarily on R&D pipeline value, new product intros, leadership? Is it going to be about balance between CPC biological, Seed treatments, margin opportunities? I would just want to hear how you're thinking about it on a preliminary basis and how we should triangulate those thoughts into the CMD.

Yes. Thanks, Chris. I appreciate it. No, I'm very excited. I think the first thing I would say is the #1 strength at Corteva is our people. There's a great team, many of those grew up on or around farm, so they understand the challenges that the customers face every day and they get excited about waking up every day solving those problems.

You talked about a portfolio. And from a portfolio standpoint, 2/3 of our current portfolio is a differentiated technology. And we're not dependent on any one active, any one segment, any one crop or any one geography. So I love the diversity of the portfolio, and I love the fact that the bulk of it is differentiated product. That is a real competitive advantage. When you add biologicals to the portfolio position, that gives us the ability to blend natural and synthetic solutions to solve growers' problems.

And in our pipeline, I can't emphasize how strong I think our pipeline is. It's the best crop protection pipeline in the business with 7 new actives coming into that market over the next decade. I feel like I've been drinking from a water hose for the first month or so. And if I ever need to pick me up, I want over our greenhouses. And I'll look at the results of the R&D. And there, you can see the incredible resorts. Those people are delivering against targeted tests, target weaves, targeted diseases, and it just gets you excited and want to come back to the office, roll up your sleeves and get after it.

So we look forward to sharing more details about the R&D and our strategy with you at our Investor Day in September 15 and look forward to seeing all of you in person there.

Your next question comes from the line of Joel Jackson with BMO Capital Markets.

Chuck, Luke, rest of the team, look, I know you're doing your Capital Markets Day in 1.5 months, but Chuck, Luke, team, what I noticed is if I take your, Chuck, your prior guidance targets for 2027, about $4.4 billion EBITDA at the midpoint, you did $4.2 billion this year, you $4.3 billion this year. It's about a 5% growth rate. I would like to know if you can talk as much as you can right now, is that what you're thinking about now mid-single-digit growth into next year? Tell me why that's right or wrong? What we should think about a little bit of preview ahead of September, I guess.

Joel, so look, maybe I'll start and then David can fill in some of the numbers. So not a lot has changed with our original thinking from earlier in the year. $4.2 billion, so if you look at the updated guide, $4.2 billion fits us very comfortably into that 2024 original communication around 2027, which you rightly called out, was $4.4 billion. So our growth rates are in the range where we've communicated they would be. I'd say we're a little ahead of our original plan in 2026. And if you look at the growth, what pleases me the most is where it's coming from.

It's the core parts of our business, right? So in Seed, it is -- licensing is literally 3 years ahead of our original plan, which is pretty astonishing, considering that as a brand-new business for us. And then if you look at Crop Protection, that new product portfolio that we've been talking about for some time, it's going to touch $2 billion this year in revenue. And the margin profile and how we priced it is really, really strong.

So these are the things that are leading the growth for Corteva combined. And then, of course, you know the company, we're really focused on cost and productivity. It's part of our DNA. It needs to be in this industry. So when I look at it, I'd say that our growth rates are exactly where we thought they were, but probably trending a little ahead of our original plan.

David, anything to add?

Yes, Joel. And if you remember, the $4.4 billion was a $1 billion increase over period of time. And we always said it was going to be a little bit more front-end loaded mainly because of our cost and productivity that we expected in the first couple of years. As Chuck has mentioned, we do feel like we are certainly ahead of where we expected to be on net royalties. So we'll take that in consideration when looking into what our guide is for '27. But I think we feel comfortable with the $4.4 billion at this point in time.

The other thing I will mention, too, is I know some people were concerned about the impact of net synergies and separation costs and all that against our long-term target of the $4.4 billion. As we articulated earlier today, we feel like we're tracking pretty close to flat or within plus or minus the millions of dollars that would be within our typical guide range. So we feel really strong about the $4.4 billion.

Right. And then one last comment, Joel. So in September, both companies will provide 2029 financial framework. So you're going to be able to kind of follow along with sort of where Corteva is leaving off where new Corteva and Vylor are kind of taking over. And I think when you look at that and you put it all together, there's going to be a lot to like there. So hopefully, you can join us.

Your next question comes from the line of Kevin McCarthy with Vertical Research Partners.

This is Matt Hettwer on for Kevin McCarthy. In Crop Protection, organic sales were down about 6%, but on a product line basis, it looks like the trend was lower among herbicides, insecticides and fungicides with the difference made up by substantial growth in the other category. Can you unpack the underlying sales trends for those products? And maybe comment on what kind of trajectory we can expect for them in the back half?

Yes. Matt, it's Chuck. So let me start with the overall Crop Protection market, if I can. I'd say, look, again, there's not a lot here that's changed in our view of the overall market fundamentals. The Crop Protection market, we still think is improving, especially if you look at 2025 was essentially flat versus the prior 2 years. And this year, we said that the market would grow low single digits. And that's still our view. Now the growth is slow. It's a little bumpy. But we're seeing, I think, what we wanted to see.

And we always said that most likely in '26, it was going to be a year of volume growth with low single digit down in pricing. And so not to get too much into the indications, but that's essentially what we're seeing. We probably have a bit more competitive pressure in Brazil for lots of different reasons, but that market is, of course, well supplied. It's one of the markets that's growing. So there's a focus area there. And maybe 1 or 2 other pockets around the world.

But there's nothing here that we would say is outside of our planning horizon in terms of a structural change. In fact, when you look at Chinese exports into Brazil, they're essentially stable. They're not going down, but they're certainly not going up. And I'd say the same is true for Chinese exports going into the United States. So all in all, I think that the market is recovering. We'll save 2027 comments for the Investor Day.

And then when I look at the indications, the only thing I'll draw you to is that we probably have, in our portfolio and others, certain AIs that are coming off patent. And then what we've done, so in anticipation of some of these molecules, which have been well communicated, we've really redone the cost structure. And so when that happens, what we do is we have -- we're going to see competitive tension, we lower our price. But if you look at the margin profile of Crop Protection, it's actually up this quarter in this first half. So that's sort of the product life strategy that we've had, we've deployed.

And then when you look forward to the new products, Luke already mentioned it, we've got 7 new actives coming into the market in the next decade. The first one will be in Brazil, where we are seeing some pricing tension. It will be Haviza, which we consider to be a blockbuster fungicide, and we're just really excited to put that into the market in the next couple of years. So hopefully, that helps you.

Your next question comes from the line of David Begleiter with Deutsche Bank.

Chuck, just on the North American growing season, any share gains you can point to either corn or soybeans that you benefited from this year?

Chuck should take that question, David?

Yes, David, from a share perspective, we feel pretty confident that we've picked up a little bit of share in [indiscernible]. Obviously, our price value capture strategy and being premium in the market, but we still feel like we've picked up some share a little bit in Pioneer, but particularly with our retail brand and a bigger share of shelf in Brevant.

On the soy side, we feel like we picked up share both in the Western corn belt. So I think Mississippi West and the Eastern Corn Belt, Mississippi East with the Pioneer brand on hot pocket in the south in the delta where Dicamba and the return of the Dicamba label has certainly been a challenge, particularly with cotton in that geography. And so we feel like we gave up a little bit of share there. All in all, in soy, I think we're going to end up pretty flat. In corn, I believe we've picked up a ticket share.

Your next question comes from the line of Frank Mitsch with Fermium Research.

Luke, I wanted to come back to the CPC side of things where you mentioned that 2/3 of the products are differentiated. I am looking at -- obviously, pricing was down low single digits in the first half. The expectation is that pricing is going to be down low to mid-single digits in the second half. So I was wondering if you could kind of parse out as you look at your CPC portfolio, what's going on with the differentiated side in terms of pricing? Where -- can you kind of square why we're seeing the price degradation as much as we are given that 2/3 is differentiated?

Yes. Frank, it's Chuck. I'll take that question. So if you think about what happened in the first half, you're right, we're down low single digits, something like 3%. It was within our expectations. I think it's important to call out Europe and the U.S. were essentially flat. And then if you look at our new products, so what we would define as a new products, the portfolio that I mentioned will approach about $2 billion of revenue this year. Their prices are essentially flat and volume up high single digit. So what we're seeing is exactly what we would expect in the overall pipeline, right? We're seeing the growth coming from the newer products. But the rest of the market is under some competitive pressure because you've got a well-supplied market overall.

And so when we look at that, just to answer your question directly, we did move pricing for the second half to -- from low single digits down to mid-single digits down. Really, that is driven by what we're seeing in Brazil and perhaps 1 or 2 other pockets around. And it's not uniform that we're seeing it in pre-emergent herbicide would be one of the larger areas. And then I think there's some other items going on when it looks -- when we look at weather, when you think about fungicide application in markets that are very, very dry, for example, in Europe and parts of the United States, we're probably not going to have the same demand that we have for fungicide because of El Niño weather phenomenon that we're seeing.

But overall, I'd say we're still expecting that for our business, we will be able to grow our EBITDA led by volume with the mid-single-digit pricing down in the second half. And David, something like low single-digit EBITDA growth, I think, in the...

I think those molecules, certainly the ones that are perhaps more under price pressure is the fact that the team through their ongoing strategy over the last several years is well ahead of the cost structure. So when you look at those particular pieces of the business, it enables us to grow our EBITDA dollars and year-over-year, last year was a growth year. This year, I expect it to be a growth year, first half was a good start to that.

Your next question comes from the line of Kristen Owen with Oppenheimer.

I wanted to continue to pull at this sort of price versus volume piece here in Seed because I noticed in the deck, you're talking about organic volume growth in the back half of the year, not necessarily a price versus volume breakdown. Maybe I'm reading too much into this. But thinking into Capital Markets Day. I'm wondering if we can sort of parse out understanding how much of the price that we're seeing is coming from this greater mix of out-licensing and how much of that offset is what we would normally see in the volume line? And should we be thinking about that KPI sort of transitioning from price and volume to this more combined organic view?

Judd?

Yes. So Kristen, thanks for the question. Let me try to tease this out in the second half of the year. Maybe start with, our Seed business is really a strong first half business. So the second half of the year is significantly less, and it really is all encompassing around Brazil. So how you think about our price and mix versus that volume piece from a from a volume piece in the second half of the year, again, this is a Brazil market, a little bit of South Africa market, which our business is doing very well there. And it really depends on when farmers are ready to take seed in that fourth quarter.

We've got that forecasted to be relatively flat on a year-over-year basis at this point in time. We don't think we're going to have as big of an expansion of planted area in safrinha that we've seen in the last few years. So that will have a bit of an impact on volume. But in terms of the price/mix perspective, I mean, it's all about bringing new products into the market and putting those 2 products in the hands and farmers. And then in fact, then certainly allow us to share in a piece of that additional value that we're bringing to them. So I hope I answered your question. I think mix price versus what we've seen in the last couple of years, but maybe David, if you have anything to add?

Sure, Judd. And Kristen, as Judd mentioned, just to remind everyone that the second half of the year is about 27% of our total top line. So it is very much a first half business. When you look at what we projected for the second half, the difference between volume and price, it's about 50-50. So we are seeing a slight gain in price and a slight gain in volume over the back half of the year.

Your next question comes from the line of Matt DeYoe with Bank of America.

This is Fabian Humanas on for Matt. As we think about order patterns at this point last year, you had roughly 90% of Brazil summer orders in and about 40% of safrinha in hand, which was ahead of historical pace. As we fast forward to today? Where do your order book stand versus the historical trends? And what are the drivers?

Yes, thanks for the question. And certainly, last year, at this point in time, we did have very, very strong orders on the books. As we sit here today, we're ahead of the market in terms of what the overall orders in the market are. So we feel great about our position from a competitive standpoint. But there are some things in -- particularly in Brazil that are having growers make those decisions closer to planning time. One, credit is tough; two, get some impact from fuel and fertilizer prices. And so it's putting some stress on margins. So we feel confident in our order book, we feel confident in our share position. And our product portfolio is as good as it's ever been in Brazil for both summer and for safrinha.

So I guess in terms of how we think about wrapping up those orders, what comes into the fourth quarter and then having that summer crop planted and that safrinha on the books, we feel like we're in a very strong competitive position. But I do have to be very transparent. Credit is tight for the Brazilian farmer right now. And so we're just going to have to continue to manage them side by side.

Your next question comes from the line of Joshua Spector with UBS.

This is Lucas Beaumont on for Josh. I just wanted to follow up on your comments around sort of the split in the second half between 3Q and 4Q. So pointing to sort of the third quarter of 2026, you've kind of indicated a loss in the third quarter of about $190 million, which would then stead imply about $690 million in EBITDA growth in the fourth quarter. That balance there is just sort of much more fourth quarter lighter than what we've seen over the past 4 to 5 years. So could you just expand for some of the drivers there of the timing shift? And how you sort of see the upside and downside risks? And just to pair that relative to your confidence in the second half overall.

Yes, sure. I'll take that question. So if you step back and you look at where our second half guide is in aggregate, then I'll go through between the Q3 and Q4 timing. We do have it flat versus 2025, which is around $500 million. And if you recall, our second half in 2025 was up 16% versus 2024. So we are comparing against a pretty strong half at about $500 million. So when you look at overall, $4.2 billion is our full year guide, $500 million in the second half. It is by far a very small half for us.

When you look at where we're seeing the year-over-year changes, we do have some unfavorable price and costs built into the second half. Unfavorable costs, mainly that residual dyssynergy number that we talked about, the $25 million, a little bit due to logistics and freight costs. We're offsetting that by volume in both businesses and slight favorable currency. So the other thing I would like to point out is when you look at our guide today, our second half is about 12% of our full year guide, and that's very much in line with the past 4 years or so, which was about 13%.

So when you stay at a very high level, I think our first, second half is very well balanced between our assumptions. But then the timing between Q3 and Q4, we did say Q3 is probably more likely to be that around $100 million loss where it was a couple of years ago. I would say that or a lower number is a little bit more common than what we had last year because we had some favorable timing of safrinha into Q3, so on and so forth. So I would say it's very typical look at our the way that the split of the business will be. And I'd also say that some of those additional costs, like the net dyssynergies or whatever, some of that will be weighted in Q3. So just to summarize, when you look at second half, we feel it's balanced. It is a small half $5 million here, there's a 1% growth. And then we do feel like that timing between Q3 and Q4 will be more like it was a couple of years ago.

Your next question comes from the line of Ben Theurer with Barclays.

Just picking up on that, I wanted to dig a little bit deeper into some of the productivity savings and just lower cost that you've highlighted. I mean, first half clearly was a big driver here. You've just talked about the second half. But as we look at the setup where you stand right now and as you think about the next coming years, where do you believe on a separate basis are the big advantages between what is Vylor and what is then the new Corteva for incremental productivity savings and/or lower input cost to further drive margin expansion?

So if you step back and you think about our last 3-year guide during our last Investor Day, we had articulated about $1 billion of growth productivity cost benefits and net about $700 million. Some of that was due to commodities. So you see the commodities come down. We saw that in the first couple of years. That's probably one element you won't see us in our next 3-year plan. But what you will see is a continuation of really productivity in both businesses. So we're seeing it in Seed. We continue to see it in CP. I think you've seen that we've announced some additional footprint actions and restructuring and so on and so forth, particularly in CP. So you'll see those benefits continue in the next 3-year plan.

Yes. Ben, maybe just a couple of other comments. So we think that the separation is going to afford both companies with the opportunity to take our cost and productivity work to the next level. And the proof point, I think, is just look at the annual dyssynergy number, we thought it was going to be $100 million, which would have been on the low side of any separation that we've studied. And now we're saying it's closer to the $25 million range. The reason that is, is because we've been able to kind of find the integration costs and at the same time, kind of work through those.

So I think you have to tune into September to kind of hear the rest of the story. But we would expect that what we've been able to do at Corteva, both companies will be able to kind of continue this journey, and there will be new and different opportunities for us.

Your next question comes from the line of Patrick Cunningham with Citi.

This is Rachel on for Patrick. How should we think about your normalized free cash flow levels maybe next year compared to be $2.1 billion to $2.3 billion framework you laid out at the last Investor Day. Are there any offsets separation-related costs that we should be mindful of?

Yes. Thanks for the question. And we would expect that our -- if you looked at what our company would have on a combined basis, we'd be well within those targets that we set kind of the 45% to 50% of EBITDA for free cash flow. For this year, obviously, a little bit, if you look at our first half and you look at operating cash flow, we are down a couple billion dollars, the most of that being the $1.1 billion that we contributed to the pension plan, the Bayer agreement, restructuring and so on. If you back out those kind of unusual items, this year probably would have been around the 46% range. So well within our typical range that we communicated.

Your next question comes from the line of Arun Viswanathan with RBC Capital Markets.

Great. Congrats on all the progress towards the spin. I guess my question is just could you just provide us maybe an updated view on some broad strokes for fiscal '27 I know that, obviously, you did have an operating plan at your Investor Day that you presented a few years ago. But -- are many of those assumptions still valid? I imagine they are, but maybe if there's any updates you could provide at this point, that would be helpful.

Yes. Sure. So I think we're still operating in the same environment that we had communicated. So if you look at the agricultural backdrop, there's puts and takes, but we referenced in some of the prepared remarks, we're still seeing very strong global demand for grains and oilseeds. Crop prices are actually a little bit up year-over-year. Yes, we have to watch farmer margins. Judd called out the Brazilian farmer. They are wrestling with higher interest rates, some currency issues. But overall, I'd say the agricultural complex is more or less what we expected to see when we put the original 2024 plan in place.

Then if you look at the 2 halves of the company, I think, again, we've communicated this already today, we're seeing growth where we wanted to see it, which is on our growth platforms. Crop Protection, new products. Biologicals, those are the areas that I think we wanted to see growth, and we're starting to -- again, we're seeing continued really good performance in most of those areas.

And then in Seed, it's been the story of entering the licensing business. And that's several years ahead of plan. So overall, the operating environment that we originally communicated through 2027 feels on balance that things are where we expected them to be from an external perspective. Internally, I think we're performing better than that. David said, we're a little ahead on cost and productivity. I already mentioned, we're a little ahead in licensing. And our new products are really being well received in the marketplace.

So I'd say on balance, the company is slightly ahead in the backdrop of the market is more or less what we would have expected.

Your next question comes from the line of Edlain Rodriguez with Mizuho.

This is on Crop Protection. In Latin America, we're definitely seeing the pressure is not abating at all. the competitive pressure pricing. Is the high single-digit price decline in the new normal? Or do you expect pressure to moderate as we get into next year because maybe farm economics gets better? What are you thinking in terms of pricing pressure in Latin America?

Yes. Edlain, so we don't think that the high single-digit pricing pressure is the new normal in Brazil. In fact, I'd say the market, when we look at, as I mentioned, the imports into the country, the channel, I should say, we had very good volumes in the first half of the year, there is growing demand for crop protection in the market. There's growing acres, but there's also increasing in disease and pest pressure.

So the fundamentals of Brazil sometimes are hard to kind of pinpoint specifically, but it is a well-supplied market, but it is a market that is growing. I think when you look at Corteva specifically, our portfolio, and I've already alluded to this, there were some portfolio specific items that we simply had a few products. One was a pre-emergent herbicide that a couple of years ago came off patent. We were really anticipating that we were going to see generic pressure. And we went really to work on our cost structure.

And what we found is that we had to, of course, lower our prices because there's generics in the marketplace. But if you look at our margins, we've been able to maintain margins and share. And that's the playbook that we have to use as a company, right? We don't want to play in the generics part of the market. But when our technology comes off patent, we are prepared to play. And that's exactly what we've been able to do.

So I actually think that when you start thinking about -- when you look at our Crop Protection pricing, but you look at our margins, that's the full story that you have to consider here because this is going to be part of the playbook. And so when you fast forward that, we mentioned we like our portfolio we have one of the best new pipelines coming into the market. We've got 7 new actives in the next decade. So Visa will be next. These will have pricing premiums based on the market that we can see.

But the market is dynamic. Farmers are under some more pressure than other parts of the world. But they are using the product. The underlying demand is quite strong. And the channel is healthy right now, but we wouldn't say it's oversupplied. Now it's ready for the next season, so it needs to go to ground now. But all indications are that we're going to have a very solid volume market in Brazil. and we are going to continue to see some pricing. The one thing I would say is that we're not expecting price recovery in Brazil in 2026. But we can still compete quite nicely with our portfolio and our production base, of course, and how we go to market.

We have reached the end of our Q&A session. I will now turn the call back to Chuck Magro for closing remarks.

Thank you. I'd like to just take a minute to thank Robert King for his Crop Protection leadership over the past 4 years. It's remarkable he's been with us 4 years. Robert has led, of course, the Crop Protection business over that time. And he's also led the company's charge in safety and operational excellence. And I think when I look at Corteva today, especially the Crop Protection business, we are a much better company because of his leadership. And so this will be Robert's last earnings call. We certainly wish him the very best in his next chapter. And I just wanted to make those final comments before I turn it back over to Kim.

Great. So thanks again for everyone joining the call and for your interest in Corteva.

[indiscernible] Right. I think we'll get started. It is with great pleasure that not one, but 2 days in a row, I get to kick off my conference with the 2 most successful DuPont spins of all time. This is obviously my favorite. Don't tell John Kemp upstairs. This time is Corteva, ticker CTVA. Today with us, we have David Johnson, who's the CFO and future CFO of Vylor, the seed spin -- seed and technology, I suppose we should say; and Sam Eathington, who's the Chief Technology Officer, and I think they added digital into your job title as well recently. So obviously, a lot going on, and I'm looking forward to discussing that.

I've had the pleasure of knowing both David and Sam for many years, and I look forward to nerding out for the next half an hour on agriculture. Nothing gets my day started better than that. And I think when I sit down, we have some good news to share with the crowd. So I'm going to drop the prepared questions. So we are joking. I personally thank Chuck for going over to Europe right now and talking to make sure the EU has now officially announced it is, I'd say, beginning to implement the approval of gene editing. Samuel and I were just speaking. This is something we've waited for -- maybe longer for me, 10 years. It's amazing how things can take that long. I'm feeling a little older. I've wife and kids now.

But I would love to start off with that, what it means to you, what it means to Vylor. Perhaps what it opens up in terms of the Vylor thesis. Obviously, there's a lot going on and we can circle back. But I'd love to hear your initial thoughts on what I perceive it as a great announcement.

Yes. No, great. And thanks, Chris, for hosting us. Yes, it is pretty exciting. Just a couple of hours ago, the EU Parliament actually voted to accept their -- what they call their NGT. So that's their gene editing policy. And this really starts the opportunity to bring gene edited products, not only just for importation, but actually cultivation now in the European market. So think about that.

They've had a GMO ban for 30-plus years. And now they're actually getting on board with really the technology and the opportunities that gene editing unlocks. And so we still got about 2 years of grinding through the implementation phase. So there's a lot of stuff that still has to be written and how it gets done, but this is a huge step forward versus like what we were saying like 10 years ago when they basically banned gene editing also, which was a real slowdown to the technology and the opportunity.

What it really means to us is we've got a strong footprint over there in agriculture seeds. So both our Corn and our Oilseed Rape business, for example, we've got gene-edited products in corn. For example, one we talk about is our multi-disease resistant product, where we've used gene editing to enhance the disease resistance that's already in corn, but we made it really a complete package so that a grower doesn't have to choose, am I going to select a hybrid that's resistant to Southern rust or one that's resistant to gray leaf spot or something else. And each year, they're trying to make that choice. If they're wrong, then they've got to go out and manage that field differently.

And so we've been testing this concept now for about 5 or 6 years. We actually have a nice pipeline of multiple genes and concepts ready to go. And just to give you an example, last year, U.S. had a really big southern rust infestation. And farmers were spraying fields sometimes twice. If they didn't spray, sometimes they're losing up to 80 bushels of yield per acre in their corn crop. This is like in my home state in Illinois. And our disease super locust actually looked outstanding. And we had lots of trials where it was 40 to 50 bushels above the control.

So think about that being available in your seed and you don't have to worry about how to spray, when to spray, what to spray for. All that decision is really simply, you just buy the right seed upfront. We can now bring that technology in theory to Europe. right? So bringing really enhanced genetic technology to Europe in corn and oilseed rate that just we couldn't do before.

So it's a pretty exciting time for the seed industry, I'd say. It's a great move for where Vylor is going. Gene editing is going to be core to who we are. And I think if you think about the bigger picture, a lot of countries look to Europe for the regulatory standards. So this really changes the conversation what's going on in China, for example, which is still we need approval because our grain moves around the world. So we got to have import approval. So we still got some work to do. But this really helps with the conversation in a lot of countries.

I think for those who like pictures, a couple of quarters ago, we actually had a picture of a one that had our gene edits in and one that didn't. And if you look at that picture, it's pretty clear that the technology capabilities.

One of the things I just wanted to very quickly go over and understanding we're pulling a bit of an audible this morning based on the positive news flow. But could you just remind people in the audience and perhaps on this webcast today, what gene editing actually is, what it's different than GMOs in terms of the old school nomenclature. And then also, it's -- I don't want to spoil it, but you also have a very unique standing in terms of your intellectual property that has been long-standing, in some cases, multi-decades long, in some cases, within the last decade. So you're very firmly well positioned in this. And I'd love for you to share your thoughts on that as well?

Great. So yes, good call out. We tend to sometimes forget where we're at. So GMOs, so genetically modified organisms really back in the '90s was created. And this is where we took DNA from a different species and put it into a row crop. So think about corn and soybeans. This is how we got glyphosate resistance, insect resistance. We took genes from other species and moved those across into corn and soy, cotton as an example.

In gene editing, we only work with the genes and the variation that's already in that species, right? So we're not transgenic. We're not bringing in genes from other species. It's already there. So think about our corn disease, super locust, those genes are already in corn somewhere around the world, right? All we did was use this technology to find them and then quickly integrase them and move them into our germplasm. So something we could have done with plant breeding.

And this is what's really helped in the conversation in Europe is, look, you could do this with plant breeding. It's just now we can do it a lot faster, a lot cleaner, a lot better than what we could have done through traditional plant breeding procedures. So that's been really the shift and the change. Now it gets a little muddy sometimes because you could use gene editing to do GMOs and all sorts of things. But the simplest way is there's no foreign DNA. It's really -- it's within the genetics that species already has.

I would just remind people in the audience, the first GMO crop that went for cultivation was in 1997, I believe, is Roundup Ready canola. And so this is now probably perhaps one of the largest technological evolutions that we've seen in almost 30 years. So...

We will do -- the interesting thing is -- we can do stuff with gene editing. We were not successful at doing with GMOs. For example, there are no GMO disease control products in the marketplace, right? We all spend a lot of money working on yield and stress in GMOs and very little success in that technology. Yet we see in gene editing already success in disease. We see products coming through our pipeline already with yield enhancements and improvements we've never seen before. We think there's opportunities we think about insect control. There's people working on herbicide control, so -- or we control with herbicides.

So I think it's just actually going to open up the space of what genetics can solve. And then you start rolling into -- it's a cheaper cost structure, right? If we don't have to go through all the regulatory hurdles and burdens that we do today, we can actually work on additional product concepts. So there's a lot of concepts we leave behind because the return on them is just not there. So it's going to be more concepts, more crops, more geography. So it really expands our where to play as an industry.

I think, Craig, one other point I want to make, whenever you think about Corteva itself, you have to have that base germplasm. So all this technology is fantastic, but you have to have something to edit. And so when you look at something like Pioneer, which is going to be 100 years this year, it is this year, so 100 years of germplasm. So when we look at our IP and what do we think is one of the most important assets we have as Corteva, it's starting with that germplasm and then that allows or enables a lot of this technology.

And on the IP front, we branded this GenLytix as the ecosystem that we're calling it. In September, we'll update you. It's amazing just in the last 2 years how much it's expanded. But a lot of IP. We're also doing lots of license. We have a lot of collaborations. We have a lot of third-party investment opportunities. So we're taking a very broad look at the technology, including a number of things we're doing with social acceptance and really helping people feel like we're transparent and explaining what's going on and not be afraid of the technology.

So let's take a step back to let -- well, it's still integral to it. Let's take a step back to last September when you announced the spin. So David, I suppose we could focus this initially with you and Sam, obviously, feel free to chime in with anything incremental. But what was the initial thesis 12 months ago in terms of where we stand today, you're going to do a couple of CMDs in September, basically year-end. Can you just talk about what you think, especially in your new role, what the thesis is on the Seed business for those of us that have covered this as an integrated company, whether pre-DowDuPont or after as Corteva? Could you highlight a few thoughts there, perhaps integrate what gene editing means to that what I perceive as optionality? I would love to hear your thoughts on that.

Sure. And thank you for the question. I think when we think about the independent seed company or we like to call it the genetics company going forward because I think our aperture or thought process is a little bit broader than what the business is today. But for me, it's all around strategic kind of just focusing in on those growth opportunities around Gene Editing, our Licensing business, some very exciting things like hybrid wheat, all these new opportunities we have.

I look at it as more of a focus ability to have the separate company. I think there are some value unlocks that might be a little bit surprising to people. But whenever you look at Corteva today, by and large, the businesses are operating differently even within the Corteva business today. Because when you look at CP, it's essentially a global specialty chemical company with an R&D element to it. So it operates as a global functional business.

When you look at Seed business, it's a very regional business. When you look at Sam's R&D operation, it's many, many locations in every region around the world because you have to be able to develop and produce within that region. So when I talk about value unlock for Seed and CP, it's getting these organizational structures and the operations around that focus around either a global functional business or this regional business. And quite frankly, Corteva today had some costs to keep that together. So I think that's a pretty exciting element.

I think the other one is just focus on capital deployment and what we can do there. I think whenever you look at 2 separate businesses, I mean, I do believe in the CP business, there's going to be opportunities for more collaborations, more opportunities in that market that maybe as a combined Corteva business, we'd focus a little bit more on the Seed business given the returns and so on and so forth. So I think the jump balls for capital would typically go to like the Seed business. I don't think that's appropriate. I think it's better whenever it's separate.

And then for us, we don't know this yet, but as a separate seed company, I mean, could there be more independent seed companies that would be very much more interested in being part of Vylor. I think that that's an opportunity. And then just seeing how far we can go with adjacencies and what have you, whenever you think about gene editing broader than just row crops. So I think around strategic focus, capital deployment and a little bit of a value unlock are the main items I think about whenever we think about the separation.

And Sam, when we take -- once again, take a step back and we look at the initial Vylor thesis and Seed, there's also a lot. I don't want to dismiss anything that's going on the GMO side. You've been working for once again, perhaps well over a decade likely to further enhance the E3 platform. There are some things in terms of replacements for the Qrome platform, triple stacks contested on Brazil. There's -- I don't want to take away from the excitement that you likely contain there as well. So I'd love to hear your initial thesis on that opportunity as well and then perhaps you can branch off from there?

Yes. No, great. And it's easy to sometimes lose that. But if you just roll the clock back, right, as a company, we in-licensed most of our biotechnology traits. We paid a lot of royalties. We've been shifting that over time to where it's moving more to what's our own either co-developed or proprietary traits. This will bring royalties down to essentially neutral to positive this year.

And as we look forward, we're actually moving to a higher percentage of proprietary developed traits. So you mentioned we have a replacement for -- in Latin America, Conkesta is an insect control trait. That's a really, really important trait down there. We've just launched it a few years ago. We'll be a mid-teen percent already of market share on that trait. And we've already got the next-generation biotech trait ready to go that enhances durability and scope of that insect control looks fabulous. It's in the field. It's in varieties. We're testing it, et cetera, right? So that's already there.

Same thing on the corn side, right? So you mentioned we have platforms like Qrome insect control. We've got Vorceed. We're now going to a new triple. But we've got actually new genes for aboveground and belowground insect control for North American market and aboveground control for our Latin American market. And so these will now be 100% proprietary. They're kind of unique. In some cases, we got some of the genes out of actually ferns. So a lot of the history has been some sort of bacterial gene, maybe 1 or 2 RNAi genes, and we actually are going to be bringing some of the first genes from ferns out into the marketplace.

And so those give us all sorts of new things to think about, what stack combinations do we want, how do we want to out-license those traits to other companies, and how do we want to deploy them in the market? And so that base of germplasm and biotech traits, we just see it getting stronger and stronger all the way out into the middle part of the next decade. And then we get to build on hybrid wheat, biofuels, gene editing, adjacent spaces. So why we feel really good about where Vylor is going.

And just you mentioned -- well, first of all, I just want to take a step back for something once again for those that aren't aware of it. Please correct me if I'm a little bit off, but you were coming from a negative $850 million plus/minus...

Like $700 million when we spun...

When you spun, okay.

Yes. And then if you look at today, we're going to be neutral this year. We actually said we're going to be slightly positive this year. So you think about that margin journey over a fairly short period of time. That's why you see the margins of the business going up into the upper 20s. And then we also said that by mid-next decade, we expect it to be like a $1 billion opportunity for Vylor. So...

One of the things you did even prior to these announcements in terms of the biotech optionality and out-licensing was there was a litigation with Bayer, which obviously has lasted a very, very long time. It was something that most of us just read once a year on Page 210 of the 10-K, took some notes, asked him a few questions and moved on. Could you basically speak to what that -- it seems like you've done a lot of cleaning up for this thesis and for the spin. If you could take a step back and share your thoughts on that as well, it would be greatly appreciated?

So when you think about the Bayer agreement, it did a few things for us. One, it gave us a little bit more certainty about certain molecules after patent, so post-patent opportunities there. So that enabled us to do a few things. We're able to introduce some new products like the triples literally in the next 2 years versus when we thought it would be early 2030s, okay? So that was a big move up for us for that opportunity.

I think on the other side, part of that equation is reducing the net in-licensing expense. So that was one that we saw a benefit also with that agreement. And that's why we're now saying that we're going to be positive this year, Chris, which would be about $120-plus million better than last year. So a really nice increase in margin. And I think just generally speaking, it reduces the uncertainty and puts everything kind of behind us whenever it comes to our relationship with Bayer.

Yes, I think you hit it well. Just it removes some uncertainty. It gave us some clear path of what we could do with some products. It was financially a good deal for Corteva and Vylor and made sense to sort of clean up some of the paths.

In terms of just perhaps wrapping with this topic, and we can move on to a few other exciting things. When you take a step back and look at -- and I'm not asking you to preview September, if you're not. But when you take a step back and you look at the gene editing optionality in terms of you've had this pendulum, you're swinging thus far very slightly into positive territory this year. There's still some net licensee payments going on for sure. And now you have this wonderful GMO portfolio is step 1. And then kind of the step 2 in terms of really getting that pendulum into positive territory for you on the gene editing side. Could you speak to just perhaps kind of the balance of those 2 things? Are they roughly equal? Is it too early to tell? I would love to hear your thoughts in terms of just the longer-term trajectory without putting any dates on it?

In the simplest way, I'd put it this way that we're still really very much a GMO sort of value equation even well into the early part of the next decade, right, mid-decade, which means we have time to keep building all the gene editing stuff on top. From a research point of view, since we're thinking about 10 years out, we've made a much harder shift to how much is gene editing and how much is GMO. But at the product commercial space, it will be very heavy GMO and germplasm still for another 5, 8 years.

So plenty of runway on that even well without the gene editing, if we could still call it optionality perhaps. But the pathway -- the initial pathway that you've been discussing is basically GMO?

Yes.

Got it.

And the way I'd like to think about it, Chris, when you think about the near-term financials, like the next several years, 3, 4 years, whatever, a lot of that is always somewhat predetermined. We're talking about net licensing improvement. We will still have our price mix, we believe, because Sam's group will continue to have improved yields that we're able to price off of and productivity improvement. So I'd like to think the near term, that playbook, very similar to what we've seen in the last several years.

Now when you start talking about the mid-2030s, I know that's a long time for some of us, but that's when we start to see probably a real, I would say, hybrid wheat will be starting to become more material into the P&L. I would say things like biofuels, when you start thinking about the SAF requirements in Europe and some of the joint ventures we have made and what have you, we should see more of a material kind of accretion to the P&L in the mid-2030s for that. And then this continuation of the net out-licensing, we'll probably continue to see that through 2035. Then probably gene editing and what have you is kind of even beyond that. So I'd like to think of it in 3 time phases. I think the one very proven model we've had for a short period of time, we should see that as improvements year-over-year through the early 2030s.

Expectations on that, I think, 3 times in the last 18 months. So I think we...

It's a little conservative sometimes.

I'll take it. All right. So let's move on to the thesis. I mean one of the things -- one of the biggest debates, and I don't want to lead you in terms of the actual numbers, but one of the biggest debates has been the dissynergies between the 2 platforms and this belief that, "Oh, everything has to be the integrated model", which in my defense, I never was with that, even when you didn't like. So I take a step back and look at this. I don't want you to give a number, but just how confident are you in terms of just breaking out? You already indicated that there are 2 separate R&D facilities, 2 separate teams. How should we think about that from both of your perspectives?

Yes. This is one of my favorite questions, I will say, because I think a lot of people are a little skeptical about how much we said it would cost to separate and then how much dissynergies we would have because of separation. We've talked a little bit about it already. The R&D facilities are separate. There's literally no overlap in operations whatsoever. There is a little bit in commercial, but not the feet on the street. It's more the management layers and so on and so forth.

So when we think about it, we initially said we'd have a net $100 million of net EBITDA dis-synergies. And then we recently said we'd be a little bit favorable to that. And we start talking about what does that mean? The increased cost side is going to be there. We're going to have 2 boards. We have 2 executive teams. We have some more IT licensing costs, like all these sort of things will still be there, although maybe a little bit less than what we initially thought, Chris.

But really where we're making it up is on the opportunities to, again, rightsize both businesses to their operating model, like I had mentioned before. We also said during our last earnings call, right before that, we had initiated a new restructuring program to be able to handle kind of how we're going to get these work structures put together. So as we went through splitting out the 20-some thousand people and we get this work structures, we are able to save some of that money. And so we will give an updated number at our next earnings call, but I would say that we're trending pretty significantly favorable to that initial estimate.

I always find it ironic that when Corteva was created, you divested Stine and not a single sellsider wrote a note and said, "Oh my gosh, the R&D dissynergies that's in there is like what one, make any sense. So that seems like it's going on track as well. Is there anything else -- just before we kind of shift topics, is there anything else that you're -- there's obviously a lot to be excited about, but that particularly excites you about. Sam, you've obviously been behind a lot of the launches that have enabled Corteva to steal a lot of market share. But is there anything that's particularly exciting that we haven't yet discussed here today?

I mean, look, I wouldn't ignore our hybrid wheat product. It's a pretty incredible technology and where it's going. And look, I've worked on hybrid wheat multiple times in my career, and there's always been this challenge of can you get a system that's consistent that you can actually make hybrids, produce seed at the right cost, get the purity and quality that a grower needs. And that's always been the limit of the hybrid wheat system.

We spent decades solving that, and we continue to look outstanding, like we can really produce hybrids, they yield more, and we're running towards a launch here in '27. And so it will take a little time, obviously, to change the market, build the market, think about where to deploy that and use that around the world. But if you look at what 100 years of hybrid corn did, we're just about ready to unlock the same thing in wheat. And so it's pretty cool. And now you start to say, "Gosh, if hybrid wheat is the base, well, what do we get to do with gene editing and wheat and what do we get to do with seed treatments and wheat?" And who knows? Maybe we'll get back to GMOs in wheat. So it's really building a whole new pillar for a crop that's on 500-plus million acres around the world.

It's lucrative. So that was going to be my next question. You've highlighted that it's roughly $1 billion opportunity, which is fantastic. And I can tell you from spending some time with Chuck over the years. He -- when I asked a similar question, "Hey, what are people not talking about?" #1 response. So perhaps I need to write a little bit more.

One of the other things that is fascinating about the industry is -- we got back to it at the beginning of this -- beginning of this conversation, but breeding is kind of still the core. And having the base germplasm and the varieties and the hybrids matters more than what most investors believe, and I've been discussing that since 15 years ago. So one -- and perhaps it's maybe in my eyes, the first innovation in this. I'm sure there have been 20 in the last 10 years or so.

But AI has the potential potentially to shorten a lot of breeding cycles. It seems as though you have, based on your library, a tremendous, let's say, competitive boat and optionality yourself in terms of -- because you have the access to the history. But all others, I'm sure, are going to pop up and this and that and say, "Well, now we can basically try to catch them and run you down." How would you perceive that as an opportunity? Would you be perhaps willing to share a risk or 2? However you're thinking about it would be great?

So maybe to unpack that. So there's -- as you mentioned, there's a tremendous amount of knowledge that we have. I mean, we're 100 years of corn breeding history. We genotype 1 billion markers a year. So we understand the genetics on that stuff. We're running 15 million yield plots on this stuff every year. Like we characterize and understand this germplasm at the genetic level and at the phenotypic plant level, like you can't imagine, right? It's one of the world's class, biggest things out there.

And so then you get to add on, "Okay, so how do I use AI to enhance all that?" And we've been running a very large AI program in R&D. David sometimes criticizes me for how much I spend on it. But we've been pouring a lot to -- even historically, things like machine learning languages were -- have been around a long time. They're very powerful, what we can do in the plant breeding program. And now you look at the generative AI sort of stuff, it's even more interesting.

We've actually enabled teams to run whole new breeding concepts. We actually have AI agents that are plant breeders, like they are running plant breeding programs, right? And so you think about how fast they can make decisions and use all this information available to them, it's pretty cool, and we're watching what they can do and how they can do it. And then you throw on there gene editing. And I think this is something that maybe gets missed a little bit is the interplay between AI and gene editing, right?

Because all of a sudden, it's like I can use AI to, today, we can, for example, with 95% accuracy, predict the gene expression change based on the gene edits we're going to make now up from our AI agents, right? And so upfront, our geneticists and breeders are designing how they want those genes changed and what genes to work with and then how to use AI to design the actual gene edited construct. And then on the back end, you're sorting through genetic variability and complexity that you've never seen before with AI.

So we've used it really end-to-end. We're seeing some incredible uplifts in efficiencies and capabilities and what I would say, building the types of products and the product selection that we're getting. We still yield test. We still got to go out in the field and prove it actually works at yields, it looks right, it behaves right. If farmer is going to be happy with it, we don't skip that stage, right? And we still got regulatory in a lot of cases to deal with. But the front end and the power of the pipeline are just getting ramped up. When you think about that combination of your germplasm capabilities and knowledge with gene editing and with AI, it's a nice little triple plus up that's hard to replicate.

And just add one thing, too, then whenever you decide what you do want to produce, the ability to produce at scale, there's very few companies that can do that. And then we're also using AI to help us when's the best way to produce seed, where, when, so on and so forth. So I think that's a capability of Vylor going forward that a lot of people miss out. They always spend a lot of time on the gene edits or the DMO or the new hybrids or whatever, but how do you actually get to market that whole kind of piece of our business is a capability, like I said, probably only 2 companies can do in the world.

Yes. We have a complete digital twin of our seed manufacturing process.

I tried to keep you and Bayer separated today. You're upstairs, they're downstairs, a safe distance. First of all, thank you. But I want to give you the opportunity to answer one last question, and its' very simple, but I want to give you an open floor. When you think about the opportunities for Vylor, what does it look like 5 years ago, 10 years ago? I feel like you already hit a couple of highlights, but what's your vision once this was publicly announced last September?

For me, I go back to that short, medium, long term. And so whenever Chuck talks about an overall genetics company kind of thinking a little bit differently, I think that's kind of where my mind goes. So near term, maybe not a lot of difference, although pretty exciting and continuing the journey we're on. But kind of the mid-decade starting to think of a third crop like wheat, starting to think about things like SAF and all these different fuel options and what have you, I think that's super exciting and then gene editing beyond that. So to me, I think it's a pretty bright future.

Yes. I think David said it well. And look, as a plant breeder geneticist, I wish I was 20 years younger because I think when we get 5, 10, 15, 20 years out, we're going to look back up gene editing what it did to this entire plant space, animal space and say, "Oh, look what it just did?" assuming we get all the regulatory and social stuff worked out, which we're working hard on. But the opportunity that's in the genetics of species to unlock that, I mean, we've got tools we just never had before and capabilities we never had before.

I mean we're creating plant breeding genetic populations we never -- the world has never seen, right? I mean that's where we're at today and what this innovation is doing. So who knows what it's going to unlock, but it's going to be pretty amazing.

As long as you promise not to change your GICS code to like biologics or anything in health care, will be good. I'm looking forward to covering it. Thank you so much.

Thank you.

Thank you, all.

All right. Our next fireside is going to be with Corteva. We have Chuck and we have David for a fireside chat. Please submit questions on the app. We're at a very interesting time for Corteva. They're expecting to split -- are going to split up later this year. The seed company is going to be Vylor. Corteva is going to be New Corteva and happy to have the team here.

So Chuck, Dave, why don't we maybe just do a state of the union, what's going on at Corteva and looking into the breakup later this year?

Okay. Well, hi, everyone. Nice to see you all. Hopefully, you're having a good conference. Let's start with the quarter. Overall, we were very pleased with the first quarter. We saw double-digit growth and growth basically across the board when it comes to both businesses, Crop Protection and Seed. And I'd say a pretty clean growth when it comes to price volume, we also have good mix improvement, lower costs.

So overall, in almost every region of the world, we're seeing very good growth. We held our guide. I think that's important. We don't typically raise our guide in Q1, and we're feeling very comfortable at the $4.1 billion. I'd say the agricultural backdrop is still relatively mixed. Really good growth in demand when it comes to grains and oilseeds. Even for biofuels, which will be a record demand again in 2026 versus 2025 and 2025 was a record. So very good growth.

Crop prices are up a little bit, which I think is helping farmer economics. And I'd say, generally speaking, most of the farmers that we're talking to are focused on maximizing productivity and yield. I did mention in the first quarter call that our top corn hybrids, for example, were completely sold out in the spring. So farmers are looking for technology to drive yield and productivity, which is what we would expect them to do.

So I'd say the year is shaping up probably a little better than we thought. The first quarter doesn't make the year. The first half is really, really important. Our order book looks good for both seed and CP. So that is coming together pretty nicely.

Shifting gears to the separation. I'd say everything is on track for a fourth quarter separation. And we've been pretty busy, as you saw some of the announcements. We filed the initial Form 10 with the SEC, which was a lot of effort. We announced the new CEO for New Corteva come October 1. Luke Kissam joined the company on June 1, and we announced the 2 executive leadership teams.

Just this week, we announced the 2 headquarters, which I think is important for our employees to understand that. And then we announced the name of the seed business and the genetics company, and it's -- we're going to name the company Vylor. So we've been pretty active. But I'd say, so far, no showstoppers, things are looking good. The ag fundamentals are something we're keeping an eye on. And so far, the business is performing very, very well.

We'll work top next that. We'll work top down a bit. We're obviously in a very volatile environment. We've only seen crop prices start to move more recently, but encouraging. What's kind of your view on corn acres, costs in this environment?

Yes. So we actually saw the week of our earnings corn futures touched $5. And usually, there would be some bullishness in the market at $5. And of course, given the Middle East conflict that we're seeing with elevated energy pricing, we're seeing higher fertilizer and fuel pricing at the farm level.

Now our view, as I mentioned already, is that farmers have seen this market condition before. I'm not suggesting for a second that there isn't challenges because there are, but it is a sustainable market set of conditions, and they'll farm like this. And so from a planted area perspective, Joel, to answer your question, we're expecting about 95 million acres of corn in the U.S., 85 million acres of soybeans. So that's 180 million acres that get planted. That's the mix. We're seeing the right behaviors when it comes to applications for pre-emergent sprays, and I've already mentioned the need for technology in seed.

Overall, what we're watching carefully is most farmers already had their fertilizer sourced for the spring. So I don't think there was a planting decision because of higher energy prices that have shifted in North America. So we're going to probably see that the first time in LatAm. And so that's the one area that we're watching with elevated energy pricing, what happens in LatAm. And our view is that we're probably going to see 1 million or 2 million hectares of incremental soybean production, just more land going into production.

And the safrinha crop, which is considered a secondary discretionary crop, it's a corn crop, could be flat or modestly down. And that's the one area that we're watching quite carefully. And there's a little bit of time before we will know that. But overall, I'd say that the impact of sort of the higher energy is being reflected in higher fertilizer and fuel input costs.

Okay. You're probably getting very close to putting out Brazilian seed price cards. How is that going?

We are getting very close. Okay. So look, in corn, what I would say is our order book looks great, first of all. We did mention that if you expect the acres to be somewhat flat year-over-year, and our price cards will come out, but we're expecting a modest price increase in the corn technology as we price for value with our normal strategy.

In soybeans, it's really interesting, right? That's probably one of the largest opportunities that Corteva has today because we actually have a very -- if you look at our seed business around the world, we're either #1 or #2 in every major markets we operate in, in corn and soybeans. And we're building a really interesting and exciting licensing business around the world.

The soybean market in LatAm is the one that we are underrepresented and so therefore, the largest opportunity. And we're rolling out our Conkesta E3 technology. So the same technology that we had in the U.S. We're bringing that down to Latin America. And we're seeing just huge demand for that. So this year will be the year where we actually cross double-digit market penetration for the technology itself.

From a pricing perspective, I'd say we're consistent with the market. The market is probably a little less than corn. So I'd say somewhere around flat to slightly up. But we're seeing very good demand for our next generation of technology. And that's the opportunity. If you recall, what we said is we'd like to have about 1/3 of the Brazilian soybean market by the end of the decade. So that's where a lot of our growth is going to come from. We're pretty excited about that.

Can you walk through the bridge for '26. I know you held your guidance the other week. You also said things are trending a little bit better than that, but you wait until August to update -- to give a little more official numbers. But can you talk about the bridge in '26? So moving parts, what's been a little bit better, what's been a little bit worse? So far this year?

I handle that, Joel. So thank you very much for having us. When we step back and look at the pricing, we just talked about that, our initial estimates were low single-digit up in seed and low single-digit down in CP. And I think generally speaking, that's still our outlook at this point in time.

When you look at volumes, Q1 was very strong volumes. You saw that in seed, but we believe some of that is just timing. We had some Q4 volume that moved into Q1. And we always have this volume component depending on weather between March and April. April is always our largest month. So it's always a little bit difficult when you look at Q1 in isolation. That being said, CP, new products were up 20%. I think the other thing that's really important about that is we're seeing pricing to be stable, if not up a little bit in new products in CP. So I think that's just, again, reflecting the need for technology and people willing to pay for technology.

So I think the volume price more or less Joel, pretty much in line where we thought. When you start looking at things like cost, we had a very good start of the year in productivity. So I think if that's one element that could be a little bit favorable going in. However, we are looking at this Iran conflict. We mentioned that, that could be a $40 million kind of headwind in the back half of the year. We also said that there could be some upsides in things like our tariff number that we had relatively put in. And we do think currency, we showed that is favorable in Q1, probably a little bit favorable to where we were.

And then we also talked a little bit about royalties. And we said that going into the year, royalty neutral was where we expected. And right now, we think that might be a little bit favorable. So you add all that together early in the year, we feel pretty good with our guide and the midpoint being up 7%.

Yes. Fair enough. And maybe we can talk about also you signed the agreement a few months ago with Bayer. Talk about how that changed some of your plans or acceleration plans on the out-licensing?

Yes. So this is probably one of the more exciting growth platforms we have in the seed side of the house. If I just distill it to the highest level, the corn soybean addressable market for licensing in the Americas is about $4 billion. And we have a very small part of that. And as David just mentioned, this will be the first year we're sort of royalty positive, which we're very excited. It is a milestone for us. So what we think our journey is now is to create about $1 billion of net licensing revenue over the next decade in corn and soybeans only in the Americas. So really significant growth.

The agreement that we finalized with Bayer, which I think is good for both companies, really allows us to access a part of the market many years earlier than we thought we could, which is what we call the triples, which is herbicide protection and then aboveground and belowground insect protection in corn. It's about 1/3 of the U.S. corn market, very, very lucrative market. So what we -- the reason we're going to be royalty positive this year is because we're able to at least sell some of that. We have more demand than we have supply today because we now we have to create the parent seed to be able to sell to our licensees. There's about 100 licensees we're working with across the United States. But $1 billion over the next decade is sort of the bottom line for the licensing business. So it's a pretty exciting growth trajectory.

I will make one caveat. We're also launching hybrid wheat in 2027 in the United States. We're getting started on that. So if you think about that, there's been a lot of R&D effort to try to hybridize wheat. And if you recall, we hybridized corn about 100 years ago, Pioneer did that. And so I think we've cracked the code. We've got some phenomenal technology. That is another $1 billion of growth opportunity, probably not in the next decade, probably in the next 10 to 15 years as we ramp that up and we take that technology around the world. So that's sort of the growth trajectory that we've got for Vylor for the seed business now is $1 billion of out-licensing and $1 billion of wheat over the next 15 years or so.

And also this year, like you updated a bit on the CP market, talking about how with what's going on in the war conflict, you've seen maybe the price of generics, the cost of generics go up, maybe it's early days you said. Can you talk about that a little bit and seeing if that's maybe going to help lessen some generic pressures?

It's very early days. I'll just caveat it, footnote it, however else you have to describe it. 1 or 2 data points is hard to say a trend yet. But what we're finding, the March data that we referred to on the earnings call was we're seeing higher pricing because of higher energy pricing coming out of Brazil for actives. And what that's prompting is several of the active suppliers from China have increased pricing. And David referenced the impact on our P&L, most likely in the second half of the year being about $20 million on the CP side.

But at the same time, we're seeing a slowdown in some of these actives entering Brazil, which I think will have some supply-demand tightening effect, but probably not until the earliest late this year, and it could even go into 2027 because there's inventory in the channel, of course, and all of those good things. So we're not declaring victory by any stretch of the imagination right now, but the trend line seems constructive and it's something we're watching very, very carefully. And I think that, that's what the market needs. And then -- and so if you think through our assumption for CP is we -- the CP industry over the last 3 years has been challenged. I don't think that's any secret.

Last year was the first year where the industry was flat, and we declared that victory because the prior 2 years were down. We always thought that 2026 for CP for the industry would be a return to growth year, really driven by volume with negative pricing. And so if we can see some stabilization in price in LatAm, I think that sets up maybe even a further recovery in 2027 for the global CP industry.

So you would have thought '26 would be more L, but maybe there's a chance it may be -- do you call it a V, whatever we call it.

I don't know if I'm really good with the letter.

I don't know.

I just think that the trend line is slightly better than we thought, especially -- and we need to see how we get into the second half of the year. And how long does this higher energy continue because there are pros and cons to that. But the one thing it will do is it will elevate actives coming out of that part of the world. And then I think there will be a supply-demand adjustment because of that.

Think of things in the competitive landscape in '27. On the seed side, one of your competitors is starting to put out a couple of blockbusters in their terms. They've got the short stature corn Preceon, you've got your own competitive responses. You've got Vyconic soybeans, it will be small. What do you think about the competitive landscape in seeds? How does it look a bit different next year? Or does it look different at all?

Yes. Look, the seed landscape is always competitive. There's a lot of great players with tons of phenomenal technology. And there are some new technology coming in, but we'll have ours as well. So our reduced corn will be available into the market most likely 2028 is sort of our time line. We've got a natural version, and we've got a gene-edited version. So depending on which way the market takes us, we'll be ready when the market is ready for reduced corn.

I don't think it's going to be a switch where the entire U.S. market is going to switch to reduced corn. I think it's a new cropping system. And because it's a new cropping system, it's going to take a little bit of time for folks to get comfortable with. But I really like our lineup. I would say that our seed pipeline has probably never been as strong as it is today. Even well before my time, the veterans of our company would say we have got a phenomenal lineup. And so I think our whole mission is just to keep driving genetic gain.

We're placing a significant amount of capital bet on the advent of gene edited technology, which if you've heard me talk before, we fundamentally believe that, that could be more impactful, more powerful than biotechnology was 25 years ago, not to oversell it, but I don't know if we've seen the limits on what gene edited technology can do. We're seeing higher yields. I think we're able to bring more disease resistance into the genome. We think we can bring insect resistance into the genome. And we can also make healthier, more nutritious food with the manipulation of the genome.

So there's a lot to like here when it comes to gene-edited technology. We are one of the leading patent estate holders in the world. We've made an early bet and the first corn hybrid that we will bring into the market, we're very excited about this will be what we call a disease super locus -- it will be a gene edited corn hybrid that will have significant disease resistance built into the genome, and we're going to bring that into market in 2028 and put that in the hands of growers around the world.

In fact, let's talk about gene editing because is it such a way -- is it going to be in a way that we're going to change how we develop innovation, new products, revenue models? How does Vylor have to adapt? Please go do it by the way.

Okay. Good question, Joel. Look, I think the short answer is we're not sure yet. The traditional way that we price for our seed is we price for value. So we've got this massive breeding machine on the seed side of the house, we spend $1 billion a year in R&D. It's enormous. And what that gives us is it allows us to drive genetic gain on the farm every single year. And what -- the way we price for the seed is if we give a farmer 3 bushels per acre, we want to share that disproportionately to the favor of the farmer, but we price for that genetic gain.

So now you have to think about, okay, well, what happens if we were able to really crack that model where we're not getting 3, but we're getting a lot more than that. What happens if we can eliminate complete fungicide application sprays. That's worth incrementally more. We're not sure how to price for that yet. We're obviously talking to our customers. We're running some models. But I think that, that is just a win-win for us as a technology company, but more importantly, for farmers. If we can drive up profit per acre that significantly and then allow them to enter new markets. So think about biofuels.

With gene edited technology, driving -- as we talked about last night, driving the oil content, for example, up very significantly. We can have multiple sources of revenues for farmers. Yes, we'll get paid for that, but it diversifies their business, and it allows them to make more profit per acre with the modification of the genetics. I think that is huge. And that's not only a win for us and a win for farmers. I think it takes global food security to the next level, which is really why our company exists today.

Okay. Let's talk about the breakup a bit. Maybe you can give a bit about.

It's not a breakup, it's a separation.

It's a separation. Okay.

We still like each other.

Okay. Can you talk about some of the rationale for the separation?

Okay. Well, I think, this is probably old news by now when it comes to the separation, but it's a leading question.

It is.

Okay. Look, I think when we started to look at this some time ago, we were looking at the future of crop protection and where the industry most likely is going to head. And we were looking at the future of the seed technology business, and we just talked about gene editing and new technology that we're able to kind of undertake there. Both of them are very exciting futures with significant growth opportunities, but the overlap is becoming less and less today. And so -- and you've got this company that we built and the decision to create Corteva is absolutely the right decision at the right time.

And the reason I say that is if you just look at the Enlist platform, which is a proprietary herbicide technology platform, it's created enormous amount of value for farmers and for our stakeholders. But when you think about the future now and what it's going to take to be successful in the kind of the next gen of technology, those are primarily going to be more open source technology and farmers are going to need multiple modes of action. The days of having sort of one herbicide tolerant technology in a set of genetics, they're long gone now. And so you're going to have to have multiple modes of action, which means that the industry is going to have to collaborate more together. That's our thesis. And so how do you do that? And so how do you and if you think about what it takes to invent a biotech trait today, it's hundreds of millions of dollars and 15 years of development and regulatory. To develop a new active ingredients, it's almost the same amount of money and it's close to 12 years to get it developed and bringing it to the market.

So that's a lot of risk for companies to take. And we think that when we separate, there'll be more opportunities to partner like-for-like companies and derisk some of this innovation, which I think will bring costs down for us and at the farm level. And this is super important. So the reason that we're separating isn't one thing, and it certainly wasn't to create some short-term lift. We think that the path for the 2 companies fundamentally are not going to overlap as much. And it's going to actually open up other partnerships and availability in terms of working with other companies to leverage the strengths of either company.

So that was the thesis, Joel. And I think when I -- after we announced the separation, I went on the road and I went through Latin America and I went through Europe and then, of course, through the United States, and I checked with our channel partners and our farmer customers, they see this as a nonevent. They just want access to the best technology, whether it's in one company or not, they're really indifferent about. So I think that from a customer perspective, this is going to be neutral, maybe even positive. And for us to unlock value, I think there's going to be a lot of great opportunity here.

And I mean the synergies kind of low, I mean, decent. And I think there were some doubts you could hold it there, but you've been able to. Maybe talk about some of the work on that.

Yes. So I'll handle that one. So when we first announced our separation, it was -- we said we had put in a net dis-synergy number of $100 million. So -- and I think in some cases, some people were thinking as a little skeptical was pretty low. I think it's a reflection on the fact that the businesses today do operate somewhat separately, and I'll go through some of the examples.

The seed business today is very much a local regional business. And when you look at the CP business, it's fundamentally a global functional business. And so when you think about how you operate that under one umbrella as Corteva, we had a layer of management and so on and so forth to keep the glue together, to keep those businesses together.

So as we start looking at how do we take our 22,000 employees and frame and purpose-built organizations, we found opportunities to save some money that said that we don't need that glue anymore, and then we can make these organizations very specific to the needs of those individual businesses. So when you look at that, we know that the non-headcount number will be a dis-synergy. We have certain corporate costs and so on and so forth that will be more expensive.

But as we sit here today, we're about halfway through 6-plus months in. We're saying that we're actually trending a little favorable to that net $100 million number. So we feel really good about that. And probably one other thing, too, Joel. We said on timing, I think a lot of folks were a little bit skeptical again about how fast we could do this. And I said we're right on target. And the reason why we're able to do that, when you think about separations, some of the longer lead time items usually are things like systems that we already had our ERP system separate. And in some cases, there might be co-minglement around manufacturing or what have you.

Our manufacturing is 100% completely separate. And so when we're looking through the details, there's really literally a handful of agreements that we're going to need between the 2 businesses to go forward.

Thinking about the separation, a couple of things. So on the CP side, so in the Pioneer channel, you do a bit of CP. Talk about the opportunity might be to do a little more CP in the channel -- in the Pioneer channel and maybe open the door up to even more from third parties?

Yes. So the way the Pioneer agency model works, it's a direct-to-farmer model. So we have local independent business owners that are pioneer reps, and we allow them access to our seed technology and they work directly with farmers to sell seed. But a lot of these are really good business people and they sell many other things. So they will -- about 20% to 25% of them will sell crop protection. They usually don't do the order fulfillment. They usually work with a local retailer in some capacity. And the model I'm describing is an American model. It's a U.S.-based model. And of course, our crop protection would be part of that.

But we've never ever mandated even inside of Corteva that they can only do this or that with CP. We just don't feel that, that is for us to do. We want the Pioneer agents first to focus on seed. But if they want to do something else, obviously, they can sell our crop protection, we would allow that and help them, but they can sell every other crop protection as well.

So once we separate, I don't think there's a lot of change here on either side of the house necessarily initially. But I think where you're going, Joel, is that you've got to imagine that what we have in the United States is we have a relationship with about -- well, the top growers in the U.S. with about 65 million acres that grow corn and soybeans every year. And these relationships run deep. They're strong.

So the question is, okay, well, should we, as a seed company then invite others to have access to that channel. And how do -- is that good for farmers? Is that good for the Pioneer reps? Is that good for Vylor? And so those are interesting questions that are in the early days today. We'll probably have a little bit more to talk about that in September. But it is an interesting -- when you think about that channel and how powerful it could be, what could go through that channel, it has some interesting questions. But these are just, I'd say, today, musings more than anything. What we're going to really focus on right now is making sure that we're putting the best seed in the hands of growers so that they can produce really high-quality crops.

Okay. So you're separating BASF is separating Crop Science. Bayer could separate their crop science. FMC has got lots of stuff going on, maybe they'll start separating some assets from themselves as they try to shore up their balance sheet. So the world that we know it in this landscape could be a lot different in 2, 3, 4 years or it will be. How do you see that? And how do you think of, I guess, New Corteva, the CP space of pure play being an aggregator, being aggregated, like what will its role be in that new world? I know it's for Luke to answer, but he's not here.

Here. I don't want to speak for Luke. But let me tell you how to set up what we're going to give Luke. We're going to give Luke a ton of options and strength is how I would describe it. So the first thing I need to say right upfront is we plan to do nothing that will impact the separation. So our first job is to deliver 2026 the way we've committed it. And the other first job is to separate in the fourth quarter. So that's really, really important. Beyond that, though, David is going to ensure that both companies have very strong balance sheets, and we've already committed to being investment grade on both sides of the house.

So by definition, our Crop Protection business will have the financial strength, and it's got very good margins. It generates a lot of free cash flow, and it's going to have a wonderful balance sheet. So it will have the strength to grow. Now my view is that the primary mechanism for growth in CP will be through that multibillion-dollar pipeline that we've already invested in. And just to talk a little bit about the CP pipeline is in the next decade, we have 7 new active ingredients that will come into the market.

So not quite one a year, but one every year in a little bit. Plus we have an entire biologicals portfolio on top of that, those 7 actives, those 7 actives are chemical actives to bring into the market. So when I start thinking about the growth for New Corteva, I think it's going to be organically driven for the record. But if it chooses to participate in M&A because there's a consolidation event or there's portfolio of assets available, it will have the strength to do that, for sure.

Okay. And just the new world order of CP and C companies, do you have any thoughts on that?

No. I think it's all natural and healthy on what's happening across the industry. I certainly believe that my view is that the 2 halves of our company, so Corteva and Vylor are going to be very, very well positioned. I do think the industry needs to collaborate more together. I've said it many, many times, I come out of the commodity world where in the commodity world because costs are so important, the industry is just naturally built to collaborate more together. What I find a little odd in this industry is that there's more tension when it comes to sharing and collaborating in areas where it makes sense. And it's usually to derisk technology because technology is so darn expensive to bring to market.

So I'm hoping that with the adjustments that are being made that the industry will find a way to co-collaborate on big technology to allow productivity and cost to come through to farmers. That's my vision of the future.

On the Department put out a statement this week about wanting everybody to share IP and be more collaborative. Is that the way you interpret it?

Look, I think that certainly, when it comes to our seed technology, there's already a lot of commercial relationships. So as I mentioned, right now, we license our seed technology to 100 licensees in the United States. So there's lots of access to the best technology. We also spend $1 billion a year to continue that to ensure that, that technology in the seed side is the best it can be. And so it's one of these interesting things, right, is if you're going to make an investment like that, you need to be able to have a sufficient return.

But we do make the technology available to those that want to license it and want to brand it as their own. And I think that allows for us to have large companies that are innovating. We have smaller companies that are innovating and we have companies that don't have the innovation engine, but want access to the latest and greatest.

So certainly, we're supportive of all of those things. We think it is very, very important that we have a highly competitive industry, access to technology, where we don't want the industry to go, though, is where we have companies that have not invested the money into the innovation and then they try to access it inappropriately.

Have you thought about the dividend structures of the 2 separate entities?

Yes. So we -- one thing I should mention is in September, mid-September, we're going to have 2 Investor Days, one for each company. And during that period of time, we'll be giving an outlook out to 2029 with the financials. We'll also be going through and basically deciding what the capital deployment strategy will be for each company. Right now, Joel, we've really been spending our time on capital structure. Like Chuck mentioned, we expect both companies to have an investment-grade metrics for both.

I think you saw the announcement that we invested $1.5 billion essentially into our pension plan that would have remained or will remain with New Corteva. So that derisks a lot of liabilities on that side of the balance sheet. So that's really where we're spending the time. But I think the more important thing is Corteva has a very strong balance sheet today. So both companies, we expect to have strong balance sheets going forward, which I think will give them the flexibility to do whatever they want whenever it comes to capital deployment.

You talk a little more about hybrid wheat. You're rolling out -- I think there's also another competitor KWS rolling out some next year. Can you think about the hybrid wheat has been a tough nut to crack for ever. Talk about why it's been hard and now you and another player are trying to get in the market, what's going to be like?

Yes. So the challenge is, obviously, the companies that are working on this understand hybridization. But the challenge has been that the hybridization models that exist today prior to our technology have been cumbersome. And what that means is then that the cost to produce the seed is very expensive. So then once we try to get an appropriate margin and we have to price that at the farm level, a farmer is looking at the yield advantage and the price that they're paying and it doesn't work.

So it's not like we haven't been able to -- we haven't tried, but we've never been able to make the economics work at the farm level. So what's different? So we have now a proprietary production system for our hybrid wheat, and it's the first of its kind, and we have patented it. And what that's going to allow us to do is -- so the very first set of hybrids that we're producing right now is showing 10% to 15% yield improvement in wheat production. And you got to think about that for a minute, right? That's the worst it's ever going to be because it's the first hybrid coming out of the pipeline. So it's just going to get better from there with breeding. It's really powerful.

But the difference is the cost of production is lower. So we're able to charge an appropriate price at the farm level where a farmer can look at it and the economics will make sense. And so what we're hoping for is if they see a higher yield and then most importantly, a higher profit per acre, they'll invest in that seed technology because it's better for them.

And so we're going to roll this out in 2027. It's going to be a small launch. And then we're going to take this technology, I'd say, around the world, but only around the world where we can have the IP protected. So there are some parts of the world that don't protect the IP, just like corn and soybeans, we won't sell in that area. We may sell the seed when we have access to the right germplasm, but we may just license the IP to other germplasm holders in other parts of the world. And so that's the work that's underway right now. But it's a pretty exciting future for us.

And then if you think about why it's so important, so wheat is the largest row crop in the world. And it's also 20% of the calories we consume as humanity. So it can go a long way. Yes, we talk about profit and we talk about yield at the farm level, but this can move the needle when it comes to global food security because the most insecure parts of the world actually rely on wheat more than others. So this is an area where we can really move the needle, I think, with feeding people.

I have a different question. And thinking about your separation, I mean, what should like high-quality seed -- pure-play seed company top innovator. What type of multiple should that company trade at? And then what type of multiple should a high-quality CP company like New Corteva trade at, you think on the market?

Yes. So I'm not going to give you a number. Joel, that's your job.

First 2 numbers.

But let me just say this. Okay. So for Vylor, what we're going to try to articulate for you in September is a company that is going to grow the bottom line at mid-to-high single digits. It's going to have like 25% plus EBITDA margins, and it's going to convert an awful lot of its EBITDA to cash flow. You can put the multiple on that. To me, it's a pretty special business.

But at the same time, if you look about the CP business, it's a chemical -- it's a specialty chemical business that has a large part of its portfolio protected by IP and innovation. So I would take the specialty multiple and start looking up from whatever that is because it's got the IP around it. And it's got a pipeline around it, and it's going to invest about 6% to 7% of its revenue in R&D and create next-generation technology.

So the answer is more higher. But we also recognize that our jobs as officers of these companies are to execute and to deliver. You guys will decide how much it's worth. But to me, the opportunity for both is going to be very, very exciting.

Thank you, gentlemen.

Thank you.

Thank you.

Hello, everyone. Thank you for joining us, and welcome to Corteva Agriscience Q1 2026 Earnings Call. [Operator Instructions]

I will now hand the conference over to Kim Booth, VP of Investor Relations. Please go ahead.

Good morning, and welcome to Corteva's First Quarter 2026 Earnings Conference Call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer; and David Johnson, Executive Vice President and Chief Financial Officer. Additionally, Judd O'Connor, Executive Vice President, Seed Business Unit; and Robert King, Executive Vice President, Crop Protection Business Unit, will join the Q&A session. We have prepared presentation slides to supplement our remarks during this call, which are posted on the Investor Relations section of the Corteva website and through the link to our webcast.

During this call, we will make forward-looking statements, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, including, but not limited to, those discussed on this call and in the Risk Factors section of our reports filed with the SEC. We do not undertake any duty to update any forward-looking statements.

Please note, in today's presentation, we'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in our earnings press release and related schedules, along with our supplemental financial summary slide deck available on our Investor Relations website.

It's now my pleasure to turn the call over to Chuck.

Thanks, Kim. Good morning, everyone, and thanks for joining us today. Spring is always a busy and exciting time for agriculture, and this year is no exception. Planting in the Northern Hemisphere is proceeding well. The weather has cooperated for the most part, and we are well positioned with technology that is in high demand. However, farmers remain cautious and value driven. Crop mix and technology choices are increasingly strategic aligning acreage and input decisions towards crops with the best demand signals. Overall, strong crop acreage is supporting strong Seed and Crop Protection volume demand. There are some back half risks we are monitoring, and we will discuss those today, but let's start with the quarter.

Both Seed and CP delivered healthy double-digit EBITDA gains with all-in benefits on price/mix, volume, cost and currency. Year-over-year, Corteva delivered a 21% increase in Q1 EBITDA and over 200 basis points of margin expansion driven by our core portfolio, our growth platforms and focused cost execution. While some of Seed's strong North American volume performance can be attributed to timing shift, price/mix gains in every region are a clear signal that regardless of tight margins, farmers continue to plant our latest hybrids and varieties in order to increase yield per acre and their own profitability.

Volume gains in Crop Protection across all regions were driven by double-digit gains in new products and spinosyns, reflecting continued demand for our premium technologies. This performance allows us to reaffirm our full year guidance, which we announced in February. It also allows us to derisk the second half of the year slightly. David will explain more.

Factored into our guidance is the fact that farmers in the U.S. are expecting to shift planted area from corn to soybeans, resulting in a projected 3% to 4% reduction in corn acres. And if current trends hold, Enlist beans will be planted on about 65% of all U.S. soybean acres in 2026. As it approaches maturity, Enlist is the #1 selling soybean technology in the U.S.

As you know, our focus is now set on becoming the leading provider of soybean technology in Brazil, the largest soybean market on the planet. Our branded corn business already holds the #1 position in Brazil, and we are confident our licensing model for soybeans will allow us to efficiently gain share in this critical market. We're making great strides on that front, and we're expecting trait penetration to cross into double digit this year.

With regards to the Middle East conflict, although we have minimal commercial presence in the area, we're monitoring the situation closely. Given what we know today, while we're keeping an eye on any feedstock exposure to our supply base, the main impact for Corteva is currently related to increases in oil prices. However, given typical inventory cycle turns, we believe the 2026 impact is manageable within our current guidance range. David will get into the details, but we're also seeing some favorability on the tariff front from what we communicated in February.

Globally, from an overall industry perspective, we continue to see mixed fundamentals. Record demand for grains and oilseeds continues and farmers are investing in premium Seed and Crop Protection technologies to enhance and protect their yields. Overall, crop prices have increased from a year ago but margins are still tight as large global crop production and geopolitical uncertainty continues to weigh on the market, and several farmer input costs such as fertilizer and fuel have been impacted by higher oil prices.

Our latest view on the Crop Protection market for the full year assumes modest growth with low single-digit volume gains more than offsetting slightly negative pricing. For Corteva, we expect mid-single-digit volume gains more than offsetting low single-digit pricing headwinds.

So as we sit here today at the beginning of May, I'm pleased with our first quarter performance. As we all know, the first quarter doesn't dictate the full year in agriculture, but I'd say the first half is playing out a little better than expected. We're showing good progress on our growth platforms, and I believe we have the appropriate level of attention on improving our cost position through our controllable levers. Crossing the milestone of royalty neutrality into royalty positive later this year is a monumental accomplishment and a sign of what's to come. We already have over 100 independent seed company licensees for PowerCore Enlist corn and Enlist E3 soybeans. These self-help levers continue to drive value creation for the company and provide meaningful margin enhancement through the ag cycle.

Let me also give you a quick update on our separation. First, we remain on track for a separation sometime in the fourth quarter and we're trending favorably against our estimated $100 million of net dis-synergy estimate. As you will have seen a few weeks ago, we announced the new CEO for the company that will become Corteva home to our CP business. Luke Kissam is an experienced CEO with a proven track record of delivering results, and we're pleased he'll be joining the company on June 1. We also announced the 2 executive leadership teams for the new companies both which include a mix of existing and new members, but all of whom are aligned to our culture and values. As such, they share a passion for agriculture, science and innovation as well as the commitment to the teams that they will lead and the employees, customers and shareholders they will serve.

In addition, we filed our initial Form 10 with the Securities and Exchange Commission with the intention of having a public filing later in the second quarter. And last but not least, earlier this week, we announced the name of the future pure-play global advanced seed and genetics company. When we started thinking of a new name for our new company, we knew we wanted to honor the legacy of the generations of employees and farmers whose ingenuity and hard work have fed the world. It made us an undisputed leader in solving some of the world's biggest challenges, including food and energy security. We wanted to ensure that the technology that stands our company apart was reflected in the brand with a look and feel that was modern and tech forward, but still rooted in the conviction that science and innovation can change the world for the better.

I'm therefore pleased to introduce the combination of our efforts, Vylor. The name itself is derived from the word valor, again, acknowledging the generations whose work made Vylor possible. We will talk more about this at our September Investor Day event, but Vylor's success will be driven by industry-leading germplasm, biotech and gene editing capabilities as well as a world-class pipeline that includes an exciting new licensing business, proprietary hybrid wheat technology launching next year, and a next-gen biofuels development program. And with a nod towards the future, Vylor reflects our passion, our ambition and our shared determination to advance agriculture to, maybe one day, opportunities beyond row crops.

So you can see that this year is off to a busy start as we work to get this separation across the finish line while ensuring our customers continue to get the level of performance and support they have come to expect from Corteva.

Before I turn it over to David, I'd like to take a minute to honor the fact that just a few weeks ago, Pioneer turned 100, an iconic brand, if there ever was one. In 1926, Pioneer and its hybrid corn didn't just change agriculture, it changed the world. And we're about to do it again. And just like last time, we will do it with groundbreaking technologies from gene editing to hybrid wheat to safe, effective, sustainable Crop Protection products, including biologicals. It's easy to lose sight of accomplishments when we're so focused on the critical task at hand, but a milestone like this deserves to be celebrated.

Lastly, I want to take a moment to recognize our employees for staying focused on what matters most, executing for our customers, while managing a significant number of competing priorities during the quarter.

David, over to you.

Thanks, Chuck, and welcome, everyone, to the call. Let's start on Slide 6, which provides the financial results for the first quarter.

Results for the quarter were strong, led by an expected timing shift from fourth quarter, an early-season start in Seed deliveries and Crop Protection volume gains in all regions. Organic sales were up 7% compared to last year, with Seed up 9% and Crop Protection up 4%. Currency was a tailwind to the top line at 4% of sales, in line with expectations.

Seed price/mix was up 3% in the quarter, with gains in all regions as we continue to price for value. Seed volumes was up 6% compared to the prior year, volume shifts in North America from fourth quarter 2025 were expected. And we also had an early start to the North America season due to favorable weather. In addition, we saw continued growth in our Brevant retail brand.

Crop Protection price was down 2% as expected, driven by competitive market dynamics, primarily in Latin America. Crop Protection volume was up 6%, with gains in every region. Notably, new products and spinosyns delivered double-digit volume gains in the quarter.

As mentioned before, it's more meaningful to look at our business by half. Timing shifts between the first and second quarter are routine in our industry, while performance in Northern and Southern Hemisphere is more complete when looking at the 6-month period.

Operating EBITDA was up 21% over last year. Operating EBITDA margin of over 29% was up 240 basis points, driven by organic sales growth and continued cost savings from productivity.

Moving on to Slide 7 for a summary of the first quarter operating EBITDA performance. Operating EBITDA was up nearly $250 million to over $1.4 billion. Volume gains, price and mix, currency and cost benefits more than offset headwinds from higher selling expenses. Seed continues to make progress on its path to becoming a royalty positive later this year with another $30 million decrease in net royalty expense this quarter. This improvement was driven by lower royalty expense on certain in-licensed traits. Seed and Crop Protection combined to deliver roughly $70 million in productivity and input cost benefits, including lower Seed commodity costs.

In the first quarter, SG&A was up compared to prior year, driven by unfavorable currency, bad debt, higher commission from sales increases and higher compensation and functional spend. We expect first half SG&A as a percentage of sales to be relatively flat compared to the first half of 2025. Currency was roughly $60 million tailwind on EBITDA, primarily driven by the euro. Both Seed and Crop Protection had an impressive first quarter and delivered double-digit EBITDA growth and meaningful margin expansion.

Moving to Slide 8. Let me briefly reaffirm our full year 2026 guidance. We continue to expect operating EBITDA in the range of $4 billion to $4.2 billion, with margins of 22% to 23%, and operating EPS of $3.45 to $3.70, representing approximately 7% growth at the midpoint. This outlook is underpinned by broad-based organic growth, supported by continued execution on our controllable levers. While we are seeing some favorable signs from an early start to the Northern Hemisphere season, we will have a better view in a few months if we foresee any changes to our full year expectations.

With that, let's go to Slide 9 and transition to the key assumptions for the first half and second half of the year. Starting with the first half, our performance was driven by strong execution in North American Seed. Overall price/mix is expected to be roughly flat with Seed up low single digits offset by low single-digit declines in Crop Protection. We continue to keep an eye on broader ag input pricing but believe the majority of U.S. inputs have already been purchased for the season and will not be impacted by recent price increases. We are also seeing meaningful benefits from productivity and lower input costs in the first half, which is helping support margin expansion. At the same time, SG&A is expected to increase modestly versus the prior year from higher commissions and bad debt. From a currency standpoint, we're seeing a benefit in the first half, primarily driven by the euro.

Turning to the second half. We expect continued momentum driven by volume growth in Crop Protection, particularly in Latin America, with our biologicals portfolio contributing more meaningfully as it is weighted to the back half. On the Seed side, we see a stable demand environment, supported by stable corn acreage in Brazil. From a price/mix perspective, Seed is expected to improve low to mid-single digits, while Crop Protection pricing remains pressured with low single-digit declines year-over-year. Productivity will continue in the second half across both businesses. We also expect to see the net impact of tariffs and higher oil prices show up more meaningfully in the back half of the year, aligned with Crop Protection inventory turns.

As a reminder, tariffs are included in our guide and are trending slightly better than expected, while higher oil prices are driving a $40 million headwind also included in guide with active mitigation underway. And finally, currency is expected to be a tailwind in the second half as well driven by exposure to the Brazilian real.

With that, let's go to Slide 10 and summarize the key takeaways. First, we delivered a strong start to the year with first quarter performance ahead of expectations driven by continued organic growth across both Seed and Crop Protection. This reflects the strength of our portfolio and continued execution of our price for value strategy. We're seeing clear benefits from our focus on controllables with input cost savings and productivity improvements translating into meaningful margin expansion in the quarter. In addition, we made solid progress this quarter on our path to becoming royalty positive.

We also remain on track to return significant capital to shareholders, including a plan to complete approximately $500 million of share repurchases in the first half of the year. As expected, first quarter cash flow was impacted by the Bayer agreement and separation items. Absent these items, we would expect our full year free cash flow conversion to be in line with our mid-term target discussed at the 2024 Investor Day. And we are reaffirming our outlook, which reflects continued growth in sales, EBITDA and margin for the full year. This is supported by strong demand for our differentiated technology and disciplined operational execution across the business.

Finally, we remain on track with the separation, announcing many key milestones over the last several weeks. We recently filed our initial Form 10 and expect to have a public filing towards the end of the second quarter. Due to regulatory requirements, the separation is being treated as a reverse spin-off in the Form 10 and New Corteva presented as discontinued operation. We expect onetime costs to be approximately $350 million, consistent with external benchmark ranges with the majority expected to be incurred during the second half of the year. We are also seeing some favorability in our previous estimate of $100 million in net dis-synergies, with $50 million included in our 2026 guidance.

And finally, I wanted to share an important update regarding our ongoing capital structure setup. Last week, the Board approved a $1.5 billion discretionary contribution to the U.S. pension plan. This decision is a strategic part of our broader capital structure setup aimed at positioning both companies for long-term success. By taking this step, we are ensuring that each entity develops a strong investment-grade credit profile on a stand-alone basis, which is made possible by the strength of Corteva's balance sheet today.

With that, let me turn it back to Kim.

Thanks, David. Now let's move on to your questions. I would like to remind you that our cautions on forward-looking statements and non-GAAP measures apply to both our prepared remarks and the following Q&A.

Operator, please provide the Q&A instructions.

[Operator Instructions] Your first question comes from the line of Chris Parkinson with Wolfe Research.

Chuck, obviously, there's a lot going on this year in terms of the world of agriculture between yourself, Syngenta, BASF. And the numbers have kind of spoken for themselves thus far. But in terms of your competitive positioning as a company within the industry, and I don't care if you want to focus on the Seed side of it, or the Crop Protection side of it, but everybody is kind of touting their portfolio and how it's best. Where do you think investors should be focusing the vast majority of their time into the second half? Where is the most optionality? What should we be the most enthusiastic about? I'd love to hear your perspective on that in terms of the trajectory of the company for the next few years.

Chris, it's a great question. And I'll give you some thoughts today. But of course, this is going to be the entire focus of the Investor Day that we have planned for September 15 in New York, and both companies will lay out actually multiyear financial and strategic plans. So that's my plug for the morning is please dial in for that.

But let me just give you some thinking. So look, I think from an overall perspective, Corteva laid out the 3-year plan. We're well on track. Some could say even we're trending slightly better than that. And if you come down to why that is, there are really two big levers that we're pulling, right? So we're using our technology, and we're developing the new technology and putting it into the hands of farmers. And let me unpack that in just a minute. And then I think we've been one of the first in our industry to really go after cost productivity. I'd say with a very set of disciplined processes internally, and that's created an awful lot of value. And the last 3-year plan we put in place, there was $1 billion of cost, and we're trending a little ahead of that.

But beyond that, then just to answer your question, look, we would stack up our technology and our pipeline on both sides of the house to anybody in the industry. In fact, I'd say in many ways we're leading. And if you just look at New Corteva or the Crop Protection business, we've talked about the size of the portfolio. And if you think through that in the next decade, we're going to have something like 7 new active ingredients plus a whole host of new biologicals. In fact, we're going to roll out our first biocontrol, which would be kind of the one of the first in the industries with the efficacy that we think we have. So there's just lots of excitement there.

And then you know we made the investment a few years ago in biologicals. And today, our CP business would be one of the leaders there. So there's a lot to like on the portfolio. The separation, I think, is going to open more doors for the Crop Protection business. But I'd say that our portfolio is extremely strong in CP.

When you look on the other side of the house, when it comes to now Vylor, so no more SpinCo, which I think is one of my favorite things of this call today, you think how we're going to grow the Seed business in the future. It's going to come down from out-licensing. And this is the first year that we're going to be royalty positive, and that's new information for this morning. And we were thinking we would be royalty neutral. But with the Bayer agreement that we signed back in February, we're seeing just very strong demand for our corn and soybean technology. And we said last quarter that, that would be about $1 billion of incremental revenue over the next decade or so. So pretty sizable growth from licensing just our bread and butter, which is corn and soybeans.

On top of that, you've got the hybrid wheat program, another $1 billion opportunity. It may be a little longer term, but $1 billion opportunity, nevertheless, with our own proprietary sterility system and we're going to take that technology globally. Beyond that then, and we'll talk -- this is where the commercial has to be for September, the gene editing and biotech capabilities that we have today especially gene editing capabilities, we feel we can go beyond corn and soybeans and potentially wheat to other row crops and even potentially beyond that. And that's the information that we're going to share in September and kind of our longer-term growth strategy. But even the core growth that we just said, if you start thinking about that what it looks like from a growth perspective, I think Vylor is a classic growth compounder when you look at its margins, its conversion to free cash flow and its top and bottom line growth.

Your next question comes from the line of Vincent Andrews with Morgan Stanley.

Chuck, in the press release, you talked about -- you kind of teased us with the idea that the S&D environment in crop chemicals is starting to improve, that was development out of China. So I'm wondering if you could speak to that. And when you think that might manifest itself in your results, it doesn't seem like you're putting anything into the back half of the year for it.

Yes, Vincent. So look, we all know where we are in the global CP industry cycle. If you think about 2025, that was the first year we were actually flat, and we were sort of celebrating that we saw a flat market because the prior 2 years, 2024 and 2023, they were pretty tough in this industry. And then in February, when we gave our annual guide, we said, hey, 2026, our view is that it will be the first year in several that we'll see the industry return to growth. But don't get excited because it's going to be modest, and we said low single digits. We're still of that view. So the macro perspective for us has not changed. We think globally, the crop protection industry will grow slightly in 2026, but it's a lot better than where it's been.

So what's driving our conviction on that? Well, there's a couple of things. We're seeing a few changes with higher energy and oil pricing around the world now that is adding cost inflation to AI production in the low production jurisdictions around the world, namely India and China. And so we are seeing price increases actually for certain AIs. The other thing, of course, we're finding is that we are seeing a slight slowdown in China exports into Brazil. And it is slight and I wouldn't say that you can say it's a trend yet because the data is pretty recent as of March, but it is certainly a good data point.

So when we add it all up, we start to think about, okay, well, what is the impact? For 2026, I'd say the impact is probably minimal, just to be very candid with you, because Brazil has their inventories, I think that they're going to need for at least most of the year. But this could be a positive sign as we get kind of late 2026 and as we enter 2027 first half. So that's kind of how we see the industry shaping up is a return to slow growth, and there's some positive signs out of China when it comes to sort of the cost of their AIs and what's coming into Brazil, that's giving us some hope.

And then, yes, there are -- and we mentioned this in February, that China put also some export controls of VAT back on, which is also causing, I think it's about an 8% price increase for certain amounts of AI. So another positive data point, Vincent.

Your next question comes from the line of Joel Jackson with BMO Capital Markets.

A couple of questions sort of together. Can you just first talk about how much of earnings from Q4 got pushed into Q1? And then I know you don't like, Chuck, to change your guidance in May for a year until the season is over for North America. But can you like -- it looks like if you look at the puts -- can you talk about the bridge for '26 and what's changed since you thought a few months ago? FX seems a bit better. You talked about royalties being a bit better, you talked about energy cost being a bit worse. Can you maybe just give us the high-level buckets of what's better and worse versus what you saw a few months ago?

Yes, Joel, I'll have David answer those questions. But you're right. Look, in agriculture, we're still planting right now. There's not much difference between what we know in February and what we know at the end of the first quarter. So we usually do not adjust guidance. We think about our business squarely first half, second half, and we will make the necessary adjustments after Q2. But I'd say that overall, there's puts and takes, David will walk you through all of those. But overall, the year is shaping up to be a little better than we expected in February.

David, over to you.

Yes. So I would say, when you look at the amount that went into the first quarter. Obviously, we had that in our original bridge. So whenever you think about kind of where we are vis-a-vis our original assumptions, we're pretty much in line for that. So obviously, Q1, a very strong start. We did say that even though we look at our businesses in halves that we do expect the first half to be up more than we had originally expected. So we had expected that both halves would be fairly flat from a year-over-year percentage increase. So around that 7% kind of a number. But right now, we expect the first half to be a little bit stronger than that.

When you look at the actual bridge items. And actually, I think, you laid them out very well, Joel. I mean, I think currency is likely to be a little bit favorable, I think when you look at where we are with our royalty journey, that's probably going to be a little favorable than our original assessment. But there are things like the Iran conflict adding to inflation and so on and so forth, mainly in the back half of the year. We've sized that up as a negative $40 million kind of number right now. Tariffs, we expect to be slightly favorable. So you add all that together, and these are pretty minor puts and takes when you think of a $4-plus billion kind of an outlook number.

So that's where we are at this point in time. Again, we'll look at these items. We'll also look at things like our interest expense, tax rates and all that sort of thing because I do feel like we're a little bit favorable, probably on the lower end on our tax rate assumptions also.

Your next question comes from the line of David Begleiter with Deutsche Bank.

Chuck, I know you mentioned input costs wouldn't impact U.S. farmers this year, but looking to next year, do we expect any impact on the farmer behavior buying decisions given what you've seen on the cost side?

Yes. David, so I think that the thing that if we start with what we've seen this year, and it's interesting if you look at the futures pricing, clearly, the market right now is actually calling for a bit more corn area to be planted. And our order book would reflect dimensions of that for sure. And as we said already in the prepared remarks, the majority of U.S. farmers already had fertilizer for the season. So we don't anticipate that what we've seen with higher energy prices today have or will impact U.S. planting decisions.

Now higher fuel pricing on the farm is certainly stressing farmers in the U.S., but I'd say around the world as well. But David had mentioned this already, we are watching this for the second half in Latin America, because if higher energy prices persist, I think it could impact not only the amount of area that's planted but also what is planted in Brazil specifically. And so we're just trying to understand what that is, right now, we're not overly concerned. Our second half forecast is around flat area, I think, for safrinha, and this is an uncertainty that we're monitoring.

So now if you fast forward, okay, well, what happens in the U.S. second half of the year, potentially into 2027. There's a lot of puts and takes that could get us to the situation. But I would say -- the one thing that we're quite confident in the United States is that you're going to see 180 million acres planted of corn and soybeans. And it's going to be determined on in terms of energy prices, fertilizer availability and cost as well as the futures pricing to determine sort of what that mix looks like.

But right now, I'd say that, that's some of the things and the dynamics that we're watching, but it's way too early for us to talk about the next U.S. season, but those are some of the things that will, I think, determine. For this year, I think we're still very comfortable with 95 million acres of corn and around 85 million acres of soybeans being planted. That would be sort of directional on what we're thinking about for this spring.

Your next question comes from the line of Kevin McCarthy with Vertical Research Partners.

Chuck, I was wondering if you might walk us through some of the next mileposts that you're most focused on in terms of the pending separation. Nice to see the new name, Vylor, and the new management as well. It sounds like a Form-10 is coming over the next month or 2. But more interested on kind of the operational side. Maybe you can elaborate on what you're able to do, if anything, to attack the dis-synergies pre-spin versus post-spin and other sort of mileposts that you need to pass prior to the Capital Markets Day?

Kevin, yes, I'll start, and then David can add some of the details here. So the bottom line is there's been no surprises so far in the separation process. Lots of moving parts. We have literally hundreds of people that are doing two jobs right now separating and taking care of their customers, but so far, so good. We are on track for Q4, and that's still feeling very, very good. And as David mentioned, the net dis-synergies were probably trending a little bit better than the $100 million, and we've got the $50 million built into the guide.

We did have some very important milestones in Q1, so we announced Luke Kissam as the new Corteva CEO, which we're delighted that he's joining us. And then we have the two executive leadership teams now. And then we filed the initial Form 10. And as you mentioned, we have a name now for the seed and genetics company, Vylor. So we still have some headquarter decisions to make, where we're going to base our operations. So that will be in the second quarter. We'll have the public filing, I think, David, in the second quarter as well, and David can unpack that for you. And then in the second half of the year, we will announce the Board of Directors for both companies, finalize the capital structure, I believe. And then September 15, I hope will be the highlight where both companies will introduce the management team. And like I already said, the strategic and financial plans.

David, what did I miss?

No, you hit just about everything there Chuck. But I'll give, maybe, a little bit more color on the net dis-synergies. When we first initially came out, we said about $100 million. And when you look at that and break it down into two kind of major categories, there's an outside spend component of that. So think about IT costs, corporate costs, external public company costs, those sort of things. And those are trending pretty much where we expected, and that will be a dis-synergies. There's just more costs whenever you separate the businesses for some of these elements.

So then you get down to the other side of the house, which is more organizational structure, these sort of things. And a lot of the heavy lifting in the separation, I would say, other than IT in the last couple of months was really getting our org structure appropriate for both businesses. We've talked about this before where the New Corteva business is basically operated as a global functional business. And by large amount, when we look at the Seed business, it's much more of a regional business.

So we had talked about having a certain layer of management, what have you to kind of keep that together as Corteva. Well, as we've unwound that, we have now implemented a restructuring program, which we talked about, about $80 million that we took a hit in Q1, that is all in effect to get these two org structures appropriate for both businesses. So when you add that all up, that's probably where we're a little bit favorable than our original estimates as we're still working through it, as you can imagine, splitting 22,000-plus people in the two organizations, that's a lot of work, but that's really where a lot of the heavy lifting has been recently.

Your next question comes from the line of Jeff Zekauskas with JPMorgan.

The first quarter was a little bit puzzling because corn volumes were up 7% and soybeans were down, but all things being equal, soybean acres should be up this year and corn acres down, so why was corn up and soy down? And for Dave, I think you said you're going to -- there was no free cash flow slide. And I think you were -- you plan to contribute $1.5 billion to your pension plan, which comes out of cash flow from operations. So are you giving an adjusted number for free cash flow? And in the first quarter, you used, I think, $700 million more cash flow than you did last year. Can you break that up into pieces and explain it?

So we'll have Judd answer the corn, soy question. And David can handle the free cash flow. Go ahead, Judd.

Yes. Thanks, Jeff, for the question. And maybe just touch base on both of them. Obviously, North America in particular, is a first half business versus a first quarter business that March 31, April 1 date, 1 week of deliveries can make a big swing. We did have some volume of corn that came out of fourth quarter 2025, just because we didn't get as much into fourth quarter '25 as we had typically in prior years. And then on the soy volume side, we'll just have to wait and see. We don't see any -- from an order book standpoint, we're in a solid position. It's just the timing between first quarter, second quarter, and we'll know more, obviously, in terms of where we're exactly at the half.

But no red flags, crop is going in the ground well. We're a little bit ahead for both corn planting as well as soy planting. I feel like we have a very strong position from a corn share perspective. And soy acres, we believe, are going to be up and that we're going to be participating on our share of those acres. So let us get through planting, we'll be able to give you the full story.

Yes. And on free cash flow, we always said going into this year that free cash flow was going to be a little bit unusual because we would have some discrete elements regarding our capital allocation and so on and so forth, mainly setting up the two structures going forward. When you look at Q1, the $700 million, by and large, the biggest impact of that is the Bayer agreement that we paid out in Q1. And then we also said from an operational side, I think the most important side is the business itself is still right in that 40% to 50%, 45% at the midpoint conversion rate. But as we go forward, to your point, we will have elements of spend like the onetime separation costs that we outlined, the $350 million. We had the Bayer agreement, we'll have the $1.5 billion in the pension, which that is on a pretax basis. So when you look at the tax savings on that is about $290 million.

Your next question comes from the line of Duffy Fischer from Goldman Sachs.

I want to drill down on Latin America and kind of the upcoming season. So you're holding your expectation for corn acres flat. But if you look nitrogen is what's really ripped in the last couple of months, which makes soy more favorable, all else equal, relative to corn. So what's the logic in holding that?

And then two, if you move 1 million acres from corn to soy in Latin America, we know kind of the rule of thumb in North America, but what would that do to your P&L in Latin America? And then just a third one, as working capital has become, or bad debts have become a little bit of an issue in North America. How are you thinking about that for Latin America? How much working capital are you willing to put out this year, let's say, relative to last year?

Yes, Duffy, I'll take the first couple of pieces here, and then I think David can touch base on the bad debt question. First of all, from a safrinha perspective, it's a bit different in Latin America, particularly Brazil than it is in North America. North America, it's corn acre or soy acre. In Latin America, the safrinha acre goes after the soy acre and the timing of that crop. So it's a double-crop system. So when we say we're flat with safrinha, that's really -- we've continued to expand that second corn crop following soybeans, geez, for the last 8 or 10 years in a row. This year, with fertilizer prices, we're looking at it saying, we could have a flat year and not actually expand the area.

But from an acreage planted standpoint, it's a bit of a blue ocean in that we're only still with safrinha corn, second winter corn on a fraction of the soy acres. On the soy, corn shift, obviously, I think we've shared the North America number. I don't have the Latin America number, but it would be materially less than 1 million acre shift in Latin America. It would be much less than North America. David?

Yes. So when we look at kind of our -- what are we offering in Latin America regarding mainly credit terms and what have you, given interest rates and such. I think that's where we rely a little bit on our barter program, which we believe is #1 in the industry. It's growing. I think it's really good for us. When you look at the two businesses, they are a little bit different because in Seed, we still do get some prepayments of cash going into the season. And for CP, when we look at where we are going to increase credit offerings and so on and so forth. We're very, I would say, strategic customer by customer as to how we're going to go about that.

And as we sit here today, I think we've done a really good job of balancing that. We did talk about a little bit more bad debt this particular quarter. So when you look at our SG&A being up roughly $100 million in this first quarter, and we can unpack that, if you want. But about 25% of that was bad debt. As we sit here today, though, our past due as a percentage of sales is very much in line, if not a little bit favorable to where we were at this point last year. So it is something that we talk about, I would say, on a regular basis, the commercial teams, along with the treasury teams and we tried to thread the needle between balancing risk and opportunities by customer.

Your next question comes from the line of Joshua Spector with UBS.

This is Lucas Beaumont on for Josh. So I just wanted to go back to the crop chem kind of volume acceleration in the second half that you're expecting there, where you're looking for volumes to kind of move up from low single digits in the first half to high single digits as we get into the second half of the year. So could you just kind of give us a bit more detail on where you see that coming from product-wise and regionally? And just how would you compare kind of your growth there to what you're expecting for the market there in the second half?

This is Robert. I'll jump in on that one. So when we talk about second half of the year and the volume increase that we think we'll see as compared to what you saw first half or first quarter. It's primarily Latin America driven. Keep in mind that more acres are going into production again this year. As Judd talked about, safrinha could be flat, but those acres will get planted into a crop, and that still takes Crop Protection into it.

The second thing on it is we have biologicals in that area that continues to grow, and we have some key products there, Utrisha and BlueN being one that's a nitrogen generator for the plants. And keep in mind, fertilizer pricing as it is today, especially ammonia, urea pricing, this is an alternative. And so we're looking to continue to grow that, and we've seen double-digit growth this last year as well.

So between biologicals in Latin America, between -- add to it the growth that we saw in the first half or first quarter of spinosyns because we're seeing increased pest there, and then just the overall addition of demand from more land and the tropical climate of resistance continuing to grow. That's really what's driving us in the second half to get the double-digit growth for Crop Protection.

Your next question comes from the line of Kristen Owen with Oppenheimer.

A little bit different take on what's going on in the Middle East and how that influences your business. Chuck, you noted the forward curve calling for more corn acres. We've obviously had this significant shift in the global biofuels backdrop, not just here in the U.S., but Brazil, Argentina, Indonesia, really as a factor for mitigating that energy cost inflation. I'm wondering if you can talk about how you're thinking about this impact on your business, if you're seeing maybe some incremental interest in the new production system platform and winter canola, just how the biofuels backdrop is maybe changing how you're thinking about exiting '26 into 2027?

Thank you for the question. So we're very excited about sort of the momentum that's gaining literally around the world on biofuels, both traditional biofuels and I'd say next gen. It's a little too early to call it a structural change yet. But if you look what's happening, so this year, we're expecting to have another record demand year for biofuels globally. Last year was also a record, and I think that we're going to see even more demand if energy prices stay elevated globally.

So just to go around the world quickly. Brazil is moving to E32 and they're going to consume more of their domestic corn crop than they ever have, which I think structurally is going to be great for farming in Brazil and, of course, help with energy costs in that country. Southeast Asia, as you mentioned, have lofty goals to be a leader literally in next-generation aviation fuel. And if they hit their goal, that's going to drive a lot of crop demand.

And then here in the U.S. I think we're close to an E15 year-round mandate. We still need to get that across the line, but it makes a lot of strategic and economic sense and certainly would help farming. In fact, our view would be if we get to E15, it could consume up to another 15% of the U.S. corn crop. So that would be very good, I think, for U.S. farmers.

So there's a lot here to like we think that we're going to see continued growth. And then if you look at our program, and maybe I'll have Judd just speak to it a little bit. We have one of the leading biofuel crop development programs with multiple partners around the world, literally. So Judd, maybe over to you.

Yes. Thanks, Chuck. And maybe just talk near term as we're getting ready in the south of the U.S. to harvest roughly 100,000 acres of crop that went in last fall focused with Bunge and Chevron, sustainable aviation fuel. The crop looks good agronomically, yields look like they're going to be in a favorable position. Farmers are going to be profitable with it. And with that program our retention rate with the farmers that have dove in and taken on this new cropping system has been over 90%. So if a farmer tries it once they've built it into their program, and it's working very well for them. So we're excited about that. We're going to expand somewhere north of 400,000 acres next year. So material growth over the last 3 years as we've proven out the concept.

And I don't know that maybe you've seen the most recent announcement we've had with our JV, 50:50 JV with BP in Latin America, expanding mustard crops in Latin America, looking at a number of other crops as well, winter canola, sunflower. And we're just getting started with that with just a short list of employees that are standing that up. We'll have crop that starts to go in the ground in 2027 in a more material way, and we'll keep you informed on that. But very excited about our internal platform around biofuels and what the next 10 years, 5 years can look like there. So thanks for that question.

Your next question comes from the line of Ben Theurer with Barclays.

Just wanted to follow up a little bit on the separation, and you've talked about the capital structure for the two new businesses. So I just wanted to understand what are like kind of like the considerations you're putting into place as it relates to the level of capitalization or the level of leverage in between the Crop Protection versus then the new company, the Seed company, how we should think about this and then ultimately, your ability to really engage in what you've talked about like scaling the business into Seed, but also on the CP side. So just that capital split, how should we think about this? What is your current target?

Yes. So right now, publicly, we've addressed that we would like both companies to have investment-grade metrics from a credit standpoint. And I think we're in pretty good shape being able to hit those targets given how the strength of the overall Corteva balance sheet. So really, when the Board does final approval towards the actual split date, I think our major considerations are going to be, one, as we talked about where the liabilities sit, liabilities are going to stay with the company that they're in today.

So one of the elements we were able to address here and we announced today was the fact that the pension will be staying with New Corteva, and we're able to put this discretionary, I would say, $1.5 billion payment in to ensure that the funding level makes sense. So when you look beyond that, you're really just talking about cash levels and financial debt levels of the two. Both will be set up, I think, not only for investment-grade metrics, but we will also be, I think, in an opportunity to actually be on the offensive when it goes and they'll have plenty of strategic opportunities that they'll be able to execute on.

Your next question comes from the line of Laurence Alexander with Jefferies.

This is Kevin Estok on for Laurence. So just back to the spin-off. So you guys called out $100 million in dis-synergies. And just -- can you walk through what remains to be sort of absorbed post-spin? And I guess sort of related, how each company's eventual stand-alone margin profile would compare to today?

Yes. So when you look at -- I think the fortunate situation for us in going into this spin is pretty much the way that we've been segment reporting will be the way that the business will be portrayed going forward. The only other adjustments there will be how are those corporate costs allocated between the two different businesses. And then you start looking at two other elements, one being net dis-synergies and which business do they go on. And we already talked about our opportunity to reduce that as much as possible. We're working very hard on that. And then the final element is, are there any agreements with any kind of shift between the two businesses.

I think as we sit here today, there aren't any really material kind of shifts between the two businesses when it comes to operating ongoing business. It really will come down to the split of the corporate costs and where we land on that dis-synergies between the two businesses. So I think what's fortunate for us, things like the margin profile of the businesses and certain things like that are not going to change when you look at it post-split.

Your next question comes from the line of Arun Viswanathan from RBC Capital Markets.

Maybe I can just get your thoughts on the competitive environment in Seed. Your main competitor, I guess, has been potentially a little bit strapped in the last few years, but they do have some new products coming out over the next few years. Do you view that as potentially a competitive threat or that reemerges? Or maybe do you feel like the pipeline at Corteva, maybe you can just discuss some of the pipeline projects you guys have as well that would maybe offset that. I know you've talked about short stature corn in the past and wheat as well. But anything else you'd highlight?

Yes, Arun, this is Judd. Thanks for the question. And maybe just walk through kind of what our view of the world internally is for the next 5-year window and then speak a little bit about the competitive environment.

Obviously, there's a lot of good competitors in the market we're banging away with them at the farm gate each and every day. It all starts with germplasm. Our corn germplasm is as good as I've seen it in my 27, 28 years with the career -- with the company and continues to improve. The rate of genetic gain that our R&D team is bringing is tremendous and the funnel. And just in terms of the diversity of germplasm genetics, being able to fill all of our brands and licensing is fantastic.

Our Z-Series soybeans has been the best class of soybeans we had brought to the market and continues to improve. We've still got about -- well, we've settled in around 65% plus of Enlist penetration from a market perspective. Obviously, there's going to be some new competitive entrants in that space. Our germplasm is where it starts. The herbicide platform is important, but we got some other folks in the market that are catching up to where we've been with Enlist, and so we'll compete accordingly.

If you recall, when we brought Enlist into the market, we had some material market share gains, but it wasn't this flip of the switch. When Enlist came or when Dicamba exited the market until they got their most recent label back, there wasn't this big switch, right? It's a lot about germplasm and yield and will continue to be.

We've got next-gen above-ground coming in 2030, in North America, next-gen above-ground coming in 2030, in Latin America. 2030, 2031 will have above and below ground. Brand-new novel mode of action, proprietary, fully proprietary traits for Vylor. And so I feel as good as I've ever felt about our product portfolio. Our competitors aren't going to stop. Certainly, they're going to continue to work at it as well, but we've had a really good 5-year run and I see the next 5 years being very similar. We've got a lot of things going in the right direction for us.

Your final question comes from the line of Patrick Cunningham with Citi.

So your differentiation mix of patented products within CP sits at roughly 65%. What's the target percentage for this mix by the end of the decade? And what are the most meaningful patent clips we should be mindful of?

Patrick, this is Robert. Yes, good observation. We're running about 2/3, a little bit north of 2/3 today on the portfolio being differentiated and as you look at our pipeline that's coming and how we think we'll continue to evolve. Our new products are going to be pushing $2 billion in revenue this year and continuing to grow. And we like what we've got there, Arylex, Rinskor are still not at their peak and are going to continue. They'll outpace Enlist, once they get to their peak revenue. And then we got more coming, as Chuck talked about, at least 7 actives that will hit market over the next decade.

And your specific question by the end of this decade, Haviza will come out. That's going to be a blockbuster in Latin America for Asia soybean rust. And then we've got some biologicals coming as well. So we expect it will continue to grow is the short answer. How far does it go? We've got to model a few things out, obviously, but it will continue to increase slightly from where it is today as we approach the end of the decade. And that, added in with the biologicals, is going to give us a whole lot of strength as we look at that value proposition at the farm gate.

We have reached the end of the Q&A session. I will now pass the call back to Kim Booth for closing remarks.

All right. Thanks for joining the call and for your interest in Corteva. And we hope you have a safe and wonderful day.

This concludes today's call. Thank you for attending. You may now disconnect.

Welcome back, everyone. Delighted to have both the CEO and CFO, Chuck Magro and David Johnson from Corteva with us this morning. I'm going to let Chuck and David make some comments. But in general, it's a pleasure to have you here. Always plenty of going on -- plenty of things going on with Corteva, but clearly, interest and diligence has been heightened with the planned breakup of the Seed and the chemical business. But I will -- I'll hand it over to you if you want to make some opening comments, and then we can kind of get it going.

Sure. Well, first of all, Matt, the first time we've done this, right?

Yes. No, I know.

It's great to be here. Thanks for having us. Maybe I'll just make 3 high-level comments, if I could. So 2025 was a pretty strong year for Corteva. Both of our business saw top and bottom line growth. We generated a little bit better cash than we thought. And we think that 2026 will be another year of growth on top of what we delivered in 2025. So I think from our perspective, the strategies that we've employed, if you look at where the growth is coming from, it's coming from organic growth in our -- what we call our growth platform. So think about in Seed, our out-licensing strategy, which is going to be a multi-decade strategy where we think we can capture a lot of value for our shareholders with our differentiated technology. Biologicals, we'd like that business to be $1 billion in the future. It's about half that now, and it's growing significantly above the market. And then in our CP products. And hopefully, in the next year or 2, that portfolio of products could cross $2 billion of revenue.

So we've got a lot of forward momentum, I think, in some of the high-technology parts of the Corteva portfolio. And we think that 2026 will be a significant growth year on top of what we delivered in '25.

Beyond that, then, yes, we've got this little thing called the separation that we announced last October. We're going to separate into 2, I think, market-leading world-class companies. One will be focused in crop protection and one will be focused in advanced genetics or Seed technology. The tagline for today is we're on schedule to separate in the second half of 2026. We expect that to be sometime in the fourth quarter. And we communicated that we think we could do that for total dis-synergies of approximately $100 million per year at a run rate basis. $50 million is actually built into our '26 guide. and we're on budget for that as well. So nothing of significance to report yet.

In the first half of this year, we will announce headquarters, senior leadership teams, the CEO of new Corteva. And then, of course, we'll start to think through the capital structure and balance sheets and all of that. And David is here, and he can unpack all that for you.

So that's what I wanted to cover today, Matt, at a high level. '25 was strong. I think '26 will continue that journey. We're within the 2027 framework that we outlined a year ago, and the separation is on track.

Well, David, I don't know if you want to make any comments.

Just adding to Chuck, I'll maybe go through the numbers real quick to recap '25 since we did have such a, we think, a really good '25. We like to talk about it a lot, Matt. So I'll say we ended up at $3.85 billion of EBITDA last year, which was up 14% over prior year. So again, we feel really strong performance there. We'd like to say we control the controllables. So I think that was a big element of our performance last year of productivity and making sure all that hits the bottom line. When you look at our EBITDA margins, we've expanded those about 215 basis points last year. So we're now up to like 22.1%. If you really go back in history when Corteva started, it was more like 14%. So we're on that journey, and we feel like we're starting to hit that area that we feel really good about.

And then both businesses, as Chuck said, grew EBITDA last year. And I know CP grew 6% last year, which we feel is really strong and shows the power of not only that business, but the productivity, the new products, the biologicals. And then our Seed business grew 19% last year. So I think last year in total, really strong. And Chuck had mentioned the strong cash flow, $2.9 billion, and we converted over 75%-ish or so of EBITDA to free cash flow. And we deployed $1.5 billion of that in buybacks and dividends. So again, really strong '25 and '26.

As Chuck mentioned, we're expecting about 7% increase in EBITDA with both businesses growing again this year. And probably one of the more exciting things for us is we expect our net royalty position to be neutral in 2026. And if anyone has been with us for a little while, that's about 2 years before we thought it would be. If you go back 5 years or so, that number was like negative $700 million. So that journey continues, and we feel good about that. As Chuck mentioned, we did build in $50 million in net dissynergies into the number. And I know tariffs are probably something on top of mind right now. We did build in an incremental $80 million of tariff impact in the '26. We feel about 70% of that is already either in our inventory or it's outside the U.S. And then, of course, we're evaluating the residual amount of that.

Right. Having both of you up here, I'm going to cater most of the conversation to longer-term dynamics and strategy, I guess. But we are 2/3 into the quarter. Can you update a little bit as to what you're seeing in ag markets so far, especially North America as it relates to CP and Seed uptake? Start there, I guess.

Yes. So one of the things we like to talk about, obviously, to is we like to look at our business in halves. I know everyone is very focused on the quarters. But the reason why we like to talk about half is for our business, there's an element between March and April during the season in the U.S. where you have Seed deliveries are very highly dependent on weather and so on and so forth. So we can have a significant movement between March and April, which really in the bigger picture doesn't really mean anything. It's just a timing issue.

So where we look at right now, our bookings continue to be strong. I think that farmers are still prioritizing their Seed purchase, which is their most important purchase they make in the year. And when you look at the amount of technology in the Seed and the amount of prepays in Q4 is like a precursor to people wanting to get in line to make sure they can secure those seeds that they want, the highest technology. We do invest like almost $1 billion just in Seed to make sure we're delivering new technology every year.

And the one other thing I'll mention about that Seed purchase is Seed is the only crop input that actually gets better every year. So I know there's been a lot of discussions around Seed inputs and the cost and what have you. But when you look at the Seed, we expect it to perform better every year and really it's just a value capture on our side. And in CP, the pest issue still becomes an issue, weeds and so on and so forth. So I think farmers do want to protect their crop. It's really important even in these times. And at the end of the day, I would say we're well on the way and very much in line with our expectations.

Maybe we start with CP then, given what you just left off. What's the path here for the industry? Because I mean, you made some I don't know, critical but honest comments as it relates to the future competitive landscape, commoditization of certain aspects. How does this change the way -- I mean, obviously, I know how it change the way you're competing, you're splitting the company. But when you think about the path forward for Corteva pro forma, the CP company, like how does the landscape change fundamentally for you?

Sure. So look, we didn't split the company because we're worried about CP. I'll just be very clear on that. In fact, we're quite optimistic about the future of the CP industry. If you look at what's happening, Matt, demand for crop protection is still growing, and we expect it to continue to grow. And when we think about it, we are at what I would call a cyclical trough right now. It's not demand-driven. Demand has been steady and increasing. It is supply driven. And farmers are using more of the product every year because they need to because of the environmental pressures that they have growing the crop and protecting it.

So this is a situation where I think we've seen time and time again in a cyclical industry. And I think that the industry is poised for growth, to be candid with you. And what we wanted to do with the separation is allow a pure-play company, which this will be, to be able to participate in that growth in whatever capacity it chooses to do so.

Just to give you my view on the market. So differentiation of technology is absolutely critical, and it was going to get more critical in the future. And if you look at what we did over the last few years with our portfolio is we deemphasized the commodity part. In fact, we exited about 20% of our actives over the last 5 years, and we sort of doubled down on the new technology. And we've got a $9 billion pipeline in this business right now with half or a dozen actives and even more biological products that will come to the market in the next period of time. So the setup for our business is really strong.

I think from an industry perspective, it will return to growth. And what we said for 2026 is most likely the market will grow. That's our expectation. That's our call for 2026. It will be driven by volume. We're seeing strong demand essentially around the world, but there's going to be some continued headwinds, I think, in price, but volume should more than offset it. And everybody is sort of thinking about, okay, what's happening from China's perspective, right? Is China just going to commoditize this business just like it has in several other commodity chemical businesses. And my view is that there has been a time and place for generics coming from China and India, and there always will be. But I don't see a structural change happening. I think that what we're seeing is that demand is growing. And of course, the supply on the generic side is there. But really where things get exciting is on the differentiation. And there's still a premium for differentiated technology because of resistance issues in the crop.

So I think if you start to think through this, and then we mentioned on the earnings call when we did the fourth quarter, even China is starting to put early signs of export controls. There's -- they put the export tax back on. There's a little bit of consolidation happening in CP in China. And all these things, I think, are good signs for the health of the industry. So we're optimistic that we're at a point here where we expect 2026 to grow. And we see this as a cyclical trough, not a structural change.

Okay. I mean you touched a little bit on this, right? But the competition from China. So obviously, the focus is on active innovation and product differentiation. Does it make it harder as a loan CP business, if your core portfolio is increasingly under pressure to find the money to drive the innovation? Does it change the way the returns are built for this product? Because you've got a situation where synthetics take years to bring to market. Biologics are maybe fast tracking that, and I want to talk a little bit about that clearly, and we have a whole panel today on that topic specifically. But -- how does it change the return on this 10-year investment cycle in general and how you think about investing in new actives?

Yes, it's a great question. I think if you were starting up a global crop protection business today, it'd be a tough investment thesis. But we have increased the amount of investment we've put into both sides of our businesses. Since we launched as a separate company, we've taken up our percentage of revenue that's going to R&D up. And so for the Crop Protection business, we're between 6% and 6.5% of revenue. As I mentioned, it's a $9 billion pipeline today. It has actives throughout the pipeline in different stages of market readiness. And we're really excited about the future, right? And we've got a blockbuster product that hopefully will get approval this year for Brazil Asian soybean rust. It's a product -- an active called Haviza. That's going to be huge. It's going to be beneficial for Brazilian farmers, of course, great for global food security, but really good for the crop protection business. And behind that, there's many other products that we're preparing for market.

So to your question, I think for us, we've never pulled back in R&D. We've always been really a deep believer that what we can do better than anyone else is bring differentiated CP technology. And we've decided not to play in the middle. We exited our glyphosate business as an example, 3 years ago, right? Because it's been commoditized and there's lots of players, and we don't have a lot of differentiation there. So we're clearly going to play in a subset of the global CP market that is big, growing and exciting, and we can get premiums for. And we've got the R&D engine and capability and skill set globally to do that. But there are very few companies on the planet that can do what we can do.

Yes. And Matt, I would just reference, too, our results last year with our new products growing high single digits, which helped generate that EBITDA growth as we're investing in R&D. To me, that's the formula, along with Chuck, making sure that pipeline doesn't have any we'll say, like pockets or kind of issues going in any particular time. And I think the team has done a really good job with that.

One last comment, Matt. You mentioned it. It's expensive and timely to bring a new active to the market. My view is that where the industry is starting to take shape, and you can see with some of the announcements and changes across the industry, more collaboration and working together to derisk this for agriculture and for farming is mission-critical for the industry. So separating the 2 companies, this was top of mind for me to help make this decision. I think more consolidation could happen. I'm not going to count on it. But what will definitely happen is more collaboration when it comes to innovation because it is expensive and timely to bring these products to market. And if you can share that risk, you can bring a better product at a lower cost to farmers. That's critical.

Yes. I think you spoke a bit to my point, I guess, as well. So I was thinking about it as well, if you spent 6% of your sales to R&D and all of a sudden, your sales are down considerably because of pressures business, then your R&D becomes a bigger function overall. But you touched on Haviza and the company has some very nice fungicide products coming, right? Haviza, Adavelt, another one that we've been looking for. So if the CP market is flat over the next 2 years, maybe not a safe assumption, but let's just call it flat. What should Corteva's growth rate be as you layer in these new products and as sales pipeline starts to accrue a little bit more?

It sounds like a CFO question.

I knew that was coming, actually. I felt it coming this way. Yes, no, to me, like the market did not grow last year, right, but we did. So I think, again, I keep going back to the same thing around new product growth and what have you. In our guide for this year, we have 7% growth. When you put that down in between the 2 businesses growing, we said probably of the total growth in dollars, probably 1/3 of that goes to CP. So you're going to have about the same type of growth that we saw in 2026 versus -- that we saw in 2025. And if you start going into 2027, I'd say that has a slight uplift. But as you know, these products do take time over time. And then there's always -- there could be something falling off at the same time. So it is a little bit of a portfolio effect. So I would say that mid-single-digit growth in EBITDA, maybe a little bit higher than that as we get a little bit later in the decade.

Okay. All right. I appreciate that. To move to the Seed side. And I talked to Ken from Nutrien a little bit this morning on it. But what do you make of the longer-term profile of like the U.S. soybean farmer? And I mean that in so much as Brazil is obviously stepping into the market in a bigger way, supplanting a lot of like the traditional trade route for the U.S. soybean. We've seen consternation domestically as it relates to planting decisions. Our own strategist thinks that farmers probably plant more corn this year than they would normally because of fear that they're not going to have a market to sell their soybeans. Maybe that's overexaggerated, maybe that's not. There'll be new markets. We'll find different paths. But what do you see here? Because clearly, the soybean is being used as a trade tool and you have the leading soy technology in the market.

Let's start with, I think, the basics. So U.S. agriculture is still one of the market leaders in the world. My assumption for the foreseeable future is U.S. agriculture will continue to lead the world or be among the leaders. There will be 180 million acres planted of corn and soybeans. The mix will shift based on market opportunity and margins. But I don't see less planted area in the United States. It's still one of the most productive producing countries in the world, and I expect that to continue.

I also expect soybeans will end up in China. Is there a political narrative around it? Of course, there is. But China needs the product. Can they get it all from Brazil? We can debate that. But even if they could, U.S. soybeans would end up in Mexico or Europe or Egypt or where they go today, and the trade patterns would adjust. So I wouldn't count out the U.S. soybean producer whatsoever.

Now let's just look at it. I also believe that what is needed is that look what happened over the last 20 years in corn in the United States. That's the case study, right? They used to rely so much on exports. Now corn is essentially a domestic consumed crop. And so what's it going to take to get soybeans to be less reliant on export markets in the U.S. It's going to require policy and innovation. Those are the 2 pillars that were -- and Corteva is all in on the innovation, right? We need biofuel a biofuel mandate, and we need to be able to have U.S. farmers have another revenue source by investing in biofuel technology. So think about sustainable aviation, biodiesel. These are things that I think can consume a lot of oil in the United States, and we would then be less reliant on export markets.

And there's really positive momentum going from a policy perspective, and I expect that this will happen over time. And it won't just be for soybeans, but it will be for other crops as well like canola and mustard. And so there's going to be a really great opportunity, I think, here for U.S. farmers to have diversified revenue sources, be less reliant on external markets, potentially get a premium uplift, and it's a win-win for everyone. But I don't think that, that comes just because we're worried that the rest of the world won't buy U.S. soybeans. I think we're going to do both, and I think that the prospects are going to be quite positive for U.S. farming.

Okay. I appreciate that. To build on it, right, so what's next after the Enlist E3? It seems like you're partnering now with BASF. So if we think about kind of the traits, tolerance, where does this product ultimately go?

Yes. So Enlist E3 has been, by every definition, a massive success. The technology today is on 65% of soybean acres in the United States. And now we're taking that same investment thesis, and we're moving it to the world's largest soybean market, which is Brazil. And we have a very small market share there. So the significant growth in the playbook that we have used in the United States is going to be used in Brazil, and we're seeing great momentum there.

But the next technology iteration or the next-gen technology for our soybean technology will have most likely the relationship that we've built with BASF, their PPO technology built into it. It will be our HT4 next-gen technology. It's well under development right now. We expect that to be in the market, call it, early next decade. And so we've got a great long-term investment thesis around building our -- continuing to build and develop our market leadership in terms of soybeans.

And I think that the other thing that we need to think through, it's not just the trait technology, right? The reason that Enlist is a winner in the United States is, yes, we have the trait technology, but we also have the best germplasm in the world, and we've been doing this for 100 years, right? So Pioneer turns 100 in 2026. We have that kind of history, and we're the only company that has that kind of history. And if you look at our new, what we call Z-Series soybeans, we had the world record at almost 220 bushels an acre. So we know that the genetics in our soybeans are superior. And so it's the combination of the germplasm plus the trait because growers what they need, especially right now when market conditions are tough, they need every bushel they can get to pencil out their business plans.

And so I think what we've demonstrated with the Z-Series Enlist technology is that this has been really, really valuable. I was on a farm last summer and one of our larger soybean farmers who farm 15,000 acres, all he planted was our Z-Series technology. I couldn't believe it. Usually, they diversify, right? But he says, we're going all in because we've never seen performance like that.

Yes. I'd also say Pioneer sounds like a good pro forma Seed company name. I don't know.

You sound like about 10,000 employees.

I know how -- I mean, you talked a little bit about this, like you almost kind of preanswered my next question. But your #1 competitor is releasing Vyconic, right? It's probably the first credible threat you've had as it relates to Enlist and what has just been, to your point, like a blockbuster product. So how do you defend as Corteva?

Yes. So first of all, Enlist is the technology. We do license it. It's readily available. We have about 100 licensees that purchase that technology. So growers and our retail channel partners can get it from multiple places. And there's lots of competition in the industry. But yes, one of our peers are bringing in their next-gen soybeans. And that's going to give them, among other things, the 2,4-D trait resistance, which is what Enlist has today. So then if you -- the way I think about it, and it's a simple way to think about it is if they now have what we have in terms of technology trait protection, it's going to come down to the underlying genetics because that's what drives yield and who's going to win on the genetic gain.

And when we look at that, like I mentioned, the Z-Series technology, we rolled that out 2 years ago. And before that, the market leader was our A-Series, and we're seeing -- farmers are seeing 2 to 3 bushels an acre on top of the best already. So I'm sure they're going to have a great technology and a platform, and I'm not talking anything negative, but I like our chances as long as we keep investing in that pipeline and able to drive genetic gain through our breeding program. And we've been doing this for 100 years. So I like our chances.

Yes. Kind of the last maybe -- the last topic on seeds, but hybrid wheat, right? Clearly, team Corteva is very excited about it. The TAM itself is massive. So how do we size the opportunity for Corteva revenues in a world where you have a product with a pretty significant advantage and the TAM is this large. And so how does this scale over time because I know it will take time. And what are like the stage gates? What should we look at for broader adoption? When we say this market has agreed to it or et cetera? How do we gauge progress?

Yes. So we are very excited about hybrid wheat. So we're going to try to do to wheat that we did to corn 100 years ago and hybridize it. And we've got a proprietary production system that we've put a lot of IP around because, look, hybrid wheat has been sort of the holy grail. People have tried to do it for 25 years, and there are hybrid wheat systems out there, but they're not as stable and they cost a lot of money. And then when you try to price the Seed, farmers can't afford it even though they get a yield improvement. So for us, the trick is we've got a very stable system, and we're going to be able to provide them a really phenomenal product, like we are seeing 20% yields under stress environments. And that's the worst product we will have because it's the first one coming out of our pipeline, our breeding pipeline.

So you can imagine where this goes in the future. It's going to be a huge step forward for farmer profitability and global food security because wheat is the largest row crop in the planet. There's over 0.5 billion acres around the world. And it is still -- from a consumption of calories, it's 20% of humanity's calories still. So this crop is large and it's global. And we finally, I think, have got -- we've cracked the code when it comes to a hybridized production system that we can give value to farmers and price for it.

So the opportunity, the way we've sized it up, and we're going to give more definition at our Investor Day event in September. But the way we think about this is, this is a $1 billion revenue opportunity, most likely in the next decade or so because it will need the ramp. Now we are launching this in the U.S. in 2027. So American farmers will have the first technology available to them in 2027, and then we're going to rapidly move it around the world. We may sell Seed around the world, but we may just license the IP because there's a lot of germplasm pools for wheat that are public and that other companies own, and we may not want to sort of enter the Seed business, but actually just get paid technology royalty premiums. So we're making that decision based on each market around the world. So we're going to go to the market with a multi-strategy of seeds -- of selling either our branded Seed white label or generic seeds or a royalty, and it will be market dependent, Matt.

Okay. The last 10 minutes, I'll kind of move to the breakup. On the dissynergy side, right, there's some skepticism around the size. You hear people kind of say, maybe it's going to be larger, right, particularly given the R&D component to it. And how -- as one company, you sit here and you say, I have a farmer who has a problem, I can say, is it best addressed at Seed or chemical level, and I can make that call early. Is there a world where now 2 independent companies competing for a solution set to a problem creates more inefficiencies? How do you build confidence that the costs aren't higher as it relates to R&D and innovation?

So we've done a lot of work, as you can imagine, with a lot of teams as we've been going through. I think one of the reasons there might be that perception is not everyone understands how separate the businesses are already today. So I know in a lot of cases during spin, some of the larger cost elements might be like splitting operations and this sort of thing. We have absolute 0 overlap between our operations. And that's because the CP business fundamentally is a global kind of functional business. So when you think about production and all that, whether it's our production or we're in-sourcing from other people, it's a global supply chain.

Seed is very regional. We actually produce Seed around the world for local markets and so on and so forth. So there's very little cost, no cost actually on the production side of overlap. We will have the traditional kind of dis-synergies around, yes, we'll have to have 2 boards. We'll have 2 leadership teams, so on and so forth. So you will have some of that. But when you get down to really the R&D, R&D is fundamentally pretty separate today. So you have the Seed R&D is more focused in Iowa. You have the CP R&D, which is all chemical based, more or less, is more in Indiana. So they're pretty separate today.

Now there is some overlap of some knowledge bases around microbials and all these sort of things that we need to make sure that both businesses will have access to over time, which we're working through that, something that you would probably do anyhow if you were a third party and be able to share technology. So really, from that standpoint, there's very little. So I feel really strongly confident in that $100 million net dissynergy number because we did say net dissynergy because there are opportunities for us to be a little bit more efficient as we build up 2 purpose-built structures just for each business. And I think at the end of the day, it will net to that $100 million or perhaps even lower than that.

Okay. I will open it up in case anybody from the audience has a specific question. I don't want this to be -- I know everybody gets a little shy. So -- here we go. We got one. Wait the mic is coming.

I'd be curious to know kind of what your thoughts are around artificial intelligence and how it can improve your discovery and really shrink that time from discovery. You still have to go through the expensive development and regulatory process. But does the ability of basically custom designing molecules now, maybe with some forethought into safety and regulatory, how is that going to change kind of your strategy? How -- and your thought process?

Yes, it's a great question, and it's live and active right now, and we're just scratching the surface. But what we're finding is that we're deploying AI tools in the discovery process, both in the chemical, biological and even in picking selections for new traits in the Seed side. And what we're finding is that the precision is transformational to be very candid with you. We can pick an active ingredient, for example, out of our huge library of material, almost 1,000x faster now. And so what used to be -- the way I look at it as an analogy is we used to be trying to find a needle in a haystack literally with the amount of compounds we have to comb through, and it was very manually based.

Now with AI, it's like having a massive magnet that can actually just suck the needle out of the haystack. And that's what's happening. We have several of our new products that are in different stages of the pipeline that were selected with our AI tools. So it's literally game changing and the models are getting better every day. So we're really excited about this. Now we've been deploying AI tools in R&D, in the discovery part of the process for many years. And I think what we're finding right now is they're just getting better and better.

The other area that we're deploying AI, the regulatory submission paperwork, it's astronomical. Sometimes it's like literally thousands of pages. And the AI tools are helping us collect the data, draft the documents, and we're saving a lot of sort of man hours, people hours to prepare the regulatory submissions, which can take an awful long time. And we're deploying AI tools in the regulatory submission work now, and that has been a huge time saver. So I do think that the regulatory process from discovery through regulatory approval, it is -- the biology is always going to be the limiting effect. But I think AI is going to really compress the time lines for us, especially if you start thinking about mentioned with our germplasm and the size of the molecular libraries that we have, deploying the AI tools now, I think it's going to make us much more effective.

I think one other thing I'll add is maybe not in R&D, but on the production of Seed, if you can think about how many farms around the world and what have you, it takes to actually produce the Seed that we sell every year. And a lot of times, you have to think about that 3 years in advance as to what you're going to produce, what type of hybrids and all this sort of thing, when you're going to produce, what type of farmer, what's the weather like, so on and so forth. We're applying AI models on that to make it more efficient for us as we produce Seed. So when you see some of the cost savings you see in each business, one element of that is us deploying AI in those areas.

I'm happy you asked the question, yes, because we've got -- we'll have Ashish up talk on biologics, and that's going to be a topic. We have a Seed panel, obviously, we'll talk because I mean, AI has certainly been an adopter -- Seed tech has been an early adopter of AI, but it seems like iterative advancements now are just so progressive that the rate of innovation is going to be pretty astonishing. So I'm happy the question was asked and you were able to talk to it. I guess with only 2 minutes left, I mean, as you look at your role in pro forma Seed co, like what are you most looking forward to? Freeing the business up?

Yes. Look, so we've got a phenomenal franchise that we've talked about Pioneer in 100 years. It's hard to pinpoint just one thing I'm excited about with the Seed side of the business. I am going to miss the chemical side, though, as a chemical engineer, I have a first love in that. And so they're going to have a great future as well. But for me, I'd say if there's one thing I'd had to pick, Matt, it would be, look, this out-licensing strategy is new and exciting, and we started 5 years ago when we were sort of on a net basis in the hole by $700 million or $800 million, right? And then David communicated just today that this year, we will be neutral. So in 5 years, we've sort of got to neutrality. And then the future now is to be net positive. And in our fourth quarter call, we said we think that could be a $1 billion opportunity for us in the next decade.

And now that we've got freedom to operate in soybeans, we've talked about Enlist and moving the Enlist technology to Brazil, which will be a huge part of the licensing strategy. Then we have corn entering all the various large markets of corn out-licensing. We have our own canola technology. So for markets like Canada, a little bit in the U.S., Europe and Australia, where we'll be licensing our canola technology and then wheat.

So you start thinking about this. I see this -- so I see wheat as sort of the third leg to our stool and then you have the licensing business being this really, really high-margin business, complete technology where we don't actually have to sell the product and we get an incremental return on that investment that's already been made in our branded technology. That is the multiplying effect, I think, for the Seed business going forward.

Yes. We get questions around does the breakup call into any question, just the strategic merit of the merger in its own. And I think Enlist and the out-licensing program has been in and of itself, almost a defining feature that was unlocked from that.

Yes. In fact, we would not be able to separate because we wouldn't have 2 global leading platforms to be able to do this with. So I think the merger was the right call at the right time. I think our performance speaks for itself as Corteva. But this is about the future, driving value creation and innovation in both businesses. And I'm pretty excited that both will be global market leaders in their own right.

Well, we'll end it there. Chuck and David, thank you for spending the last 40 minutes with me up on stage and look forward to following you as the year progresses.

Thanks, Matt.

Thanks.

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to Corteva Agriscience 4Q 2025 Earnings. [Operator Instructions]

I would now like to turn the call over to Kim Booth, VP, Investor Relations. Please go ahead.

Good morning, and welcome to Corteva's Fourth Quarter 2025 Earnings Conference Call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer; and David Johnson, Executive Vice President and Chief Financial Officer. Additionally, Judd O'Connor, Executive Vice President, Seed Business Unit; and Robert King, Executive Vice President, Crop Protection business unit, will join the Q&A session.

We have prepared presentation slides to supplement our remarks during this call, which are posted on the Investor Relations section of the Corteva website and through the link to our webcast.

During this call, we will make forward-looking statements, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, including, but not limited to, those discussed on this call and in the Risk Factors section of our reports filed with the SEC. We do not undertake any duty to update any forward-looking statements.

Please note in today's presentation, we'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in our earnings press releases and related schedules along with our supplemental financial summary slide deck available on our Investor Relations website.

It's now my pleasure to turn the call over to Chuck.

Thanks, Kim. Good morning, everyone, and thanks for joining us. I hope your year is off to a great start. Before we get into our results, I'd like to provide a quick update on our separation and what you can expect this year. It is still early in our overall planning, but we remain on track for a second half separation, most likely sometime in the fourth quarter.

Now for some details. Over the past several months, a subset of our Board has been very busy with a global CEO search for new Corteva. We are making good progress and expect to make an announcement on that in the first half. At or around the same time, we intend to launch the official name and brand identity of SpinCo, which is very exciting for me at least and will really bring this transition to life. As we progress into the latter part of the first half, we'll be announcing the core executive leadership teams for both companies, we'll be working with the credit agencies on our capital structure submissions, and we will likely have filed the initial and first amendment of our Form 10 with the SEC.

The second half is where we'll essentially be getting the separation to the finish line. We expect to go effective on the Form 10, announce our Board appointments and receive the final approval on the capital structures of the 2 companies. We'll also be completing the separation of our IT systems.

And last but not least, we currently expect to hold our Investor Day events in mid-September.

As for net dissynergies, we are still estimating roughly $100 million, $50 million of which is built into this year's guide. We'll keep you informed on our progress on a timely basis over the coming months. So now let's move to our financial performance. Let me start by saying by all accounts, 2025 was a strong year for Corteva. Our results for the fourth quarter were in line with our expectations. With the exception of outperformance on our controllables and even stronger cash flow generation than we anticipated. We grew the top line low single digits while improving operating EBITDA, low double digits, leading to over 200 basis points of margin expansion, pushing us over the 22% mark for the first time as a public company. This is a testament to growing demand of our technology, exceptional performance of our dedicated commercial teams and combined with disciplined execution on operational efficiency in both businesses.

Our Seed business performed well again this year with organic growth in every region as well as share gains in both corn and soybeans. Seed delivered about $340 million of net cost improvements as well as $90 million in royalty improvement, reflecting our growing position in North America corn and progress in soybean licensing in Brazil. As noted last quarter, we're expecting to cross double-digit trade penetration for Conkesta this year in Brazil, the largest soybean market on the planet with over 300 basis points of margin expansion this year alone and our out-licensing business just catching its stride, I have to say it's fun to imagine what things might look like in another few years with our growth platforms, including gene editing in hybrid wheat really starting to take off.

Our Crop Protection business is also performing well delivering top and bottom line growth as well as margin expansion this year and what I'd still describe as less than ideal market conditions. As we updated you last quarter, this business already has an incredible $9 billion pipeline of differentiated technologies. But in order to remain ahead of the curve, we are in the process of ongoing asset and sourcing optimization. For the full year, our CP business generated over $300 million of productivity and cost benefits, which improves our resilience as we make our way towards what we still expect to be improving market conditions in 2026.

From an industry perspective, the overall ag fundamentals remain mixed. We're still seeing record demand for food and fuel and major crop inventories are within normal ranges despite large crops in Brazil and North America. Farmers continue to prioritize top Tier C technologies while managing tighter margins. Given the high corn area in the U.S. last year, it's logical to assume we'll see a few million acres shift back to soybeans in 2026, all of which is factored into our guide.

In the Crop Protection market, most notable is that we are expecting modest growth in 2026, something we haven't seen in a while. Although we continue to experience competitive pricing dynamics in some major markets, including Latin America and Asia Pacific, underlying farmer demand in terms of applications remains consistent with historical levels. So what does all this mean for 2026? We are reiterating our preliminary operating EBITDA midpoint of $4.1 billion, which is 7% growth versus the prior year. Included in that estimate is momentum in our Seed Licensing business, growth in Crop Protection volumes driven by new products and biologicals and productivity benefits in both businesses. It's still quite early in the year with winter still firmly in place but we feel good about how 2026 is shaping up.

Now before I turn the call over to David, I'd like to address some new developments since we last spoke in November. We recently reached a comprehensive resolution with Bayer related to our seed freedom to operate. Not only does this agreement allow SpinCo to remain focused on its forward trajectory and value creation opportunities, including continued investment in innovation, it also provides business certainty from ongoing litigation. We are pleased to have reached an agreement, which solidifies the use of existing technology rights in our own corn, canola and cotton product portfolios, including our own germplasm.

As a result of this resolution and the progress we've been making across the broader out-licensing spectrum, we now expect to achieve royalty neutrality in 2026, which is 2 years ahead of our most recent expectations. In North America, this agreement will accelerate the introduction of existing Corteva proprietary triple-stack corn technologies for licensing. We now expect to be licensing as early as 2027, an acceleration of 5 years. This resolution also facilitates the introduction of our third gen aboveground trait platform in North America corn, which will be available for branded sales and licensing by the end of the decade. This is an acceleration of 2 years.

Finally, this resolution includes a new licensing arrangement, which allows us to expand our addressable market by entering the cotton licensing market in the U.S., a space in which we do not currently participate. Leveraging our strong 2025 free cash flow, we committed to a payment of $610 million, which was largely completed last month. However, over the course of the next 10 years, we believe this agreement will generate about $1 billion of aggregate earnings upside for Corteva across our corn, cotton and canola portfolios through both out-licensing and branded sales.

In summary, we consider this resolution to be a win for our long-term strategic objectives. But more importantly, this is a win for farmers and for agriculture at large as this resolution strengthens competition and offers farmers more choices when making purchasing decisions.

Getting back to 2026, let me wrap up by saying what I say to our employees. We are one team until we're not. Based on our latest time line, we'll spend more time together than apart in 2026, and we're going to stay focused on controlling the controllables. Our intended separation is about sharpening focus, accelerating innovation and unlocking value that has been earned through performance, and we are committed to delivering results like this past year throughout this transition period.

With that, I'll turn the call over to David.

Thanks, Chuck, and welcome, everyone, to the call. Let's start on Slide 7, which provides the financial results for the fourth quarter, second half and full year. While it's more meaningful to look at our business in halves, I'll briefly touch on the quarter.

Sales and operating EBITDA for the quarter were down versus prior year, largely due to lower volume in Seed and Crop Protection, coupled with higher compensation expense. While it's worth knowing that the fourth quarter of 2024 was a record quarter for Corteva and this year was the second highest fourth quarter on record for us as a public company. Organic sales for the quarter were down 4% compared to prior year. Crop Protection saw volume and price declines of 2% and 1%, respectively. Price declines were largely due to competitive pricing dynamics in Latin America and in line with expectations. Volume declines in Crop Protection were primarily driven by a seasonal shift and timing for North America to first half 2026 along with timing of fungicide demand in Latin America.

Seed had pricing gains of 3% versus prior year, evidencing our price for value strategy with volumes declined 8%, largely due to timing shift of safrinha sales into the third quarter of 2025 and the shift of North America deliveries into the first half of 2026 as a result of freight optimization and weather across the Midwest.

Looking back at the second half, sales were up 4%, and operating EBITDA was up 16% driven by better price and mix in Seed, continued execution on controlling the controllables and volume gains in both segments. Organic sales were up 2% compared to prior year. Crop Protection saw volume growth of 1%, offset by price declines of 2%, largely driven by competitive pricing in Latin America. Seed had price, mix and volume gains of 3% and 2%, respectively, versus prior year.

Focusing on the full year. Organic sales were up 4% over last year with growth in both Seed and Crop Protection. A continuation of our price for value strategy along with increased corn acres in North America and Latin America drove Seed price/mix and volume gains of 3% and 2%.

Crop Protection price was down 2% for the year as expected, driven by competitive market dynamics, mostly in Brazil. Crop Protection volume was up 5%, but gains in nearly every region. Notably, new products have strong demand and biologicals delivered double-digit volume gains compared to prior year.

Operating EBITDA was up 14% over prior year. Operating EBITDA margins of over 22% was up about 215 basis points, driven by organic sales growth coupled with significant benefits from lower input cost and productivity.

Moving on to Slide 8 for a summary of the year. Operating EBITDA was up more than [ $470 ] million to $3.85 billion. Price and mix volume gains and cost benefits more than offset currency headwinds. Seed continues to make progress on its path to royalty neutrality with about $90 million in reduced net royalty expense. This improvement was driven by increased out-licensing income in North American corn and lower royalty expense in soybeans. We finished the year with a net royalty expense position of around $120 million.

Seed and Crop Protection combined to deliver over $650 million in net cost improvement, including lower seed commodity costs, raw material deflation and continued productivity actions. SG&A for the year was up compared to prior year driven by higher commissions and compensation expense. The increased investment in R&D aligns with our target just over 8% of sales for the full year. As expected, currency was $217 million headwind on EBITDA, driven by the Brazil real, Canadian dollar and Turkish lira. Both Seed and Crop Protection finished the year with impressive EBITDA growth and meaningful margin expansion over prior year. Together, this translated to over 22% operating EBITDA margin.

In addition, free cash flow has improved by about $1.2 billion from prior year to $2.9 billion. This is driven by our increased EBITDA, lower cash taxes and working capital discipline.

With that, let's go to Slide 9 in transition to the updated outlook for 2026 and the key metrics we are tracking. Our updated 2026 guidance reflects the continued momentum from our 2025 performance and continued confidence in delivering on productivity and cost benefits.

2026 operating EBITDA is expected to be in the range of $4 billion and $4.2 billion or approximately 7% improvement over prior year at the midpoint. This would post at the low end of the 2027 EBITDA framework we outlined in our last Investor Day. Meaningful margin expansion is expected to be driven by organic sales growth, together with benefits from improved net royalty expense and productivity actions.

Operating EPS is expected to be in the range of $3.45 to $3.70 per share, an increase of 7% at the midpoint, which reflects higher earnings growth and lower average share count, partially offset by higher net interest expense. Free cash flow in 2026 will be impacted by separation items and the Bayer agreement. Absent these, we would be in line with our long-term target we communicated at our 2024 Investor Day. We remain committed to returning cash to shareholders as we progress through the separation. We announced the first quarter dividend last week, and we are targeting about $500 million of share repurchases in the first half of 2026.

Turning to Slide 10. in the 2026 operating EBITDA bridge, growing from approximately $3.8 billion in 2025 to $4.1 billion at the midpoint. Total company pricing is expected to be slightly up with pricing gains in Seed partially offset by declines in Crop Protection. While we expect the Crop Protection market to grow, we expect prices to be down low single digits for the year. We are expecting volumes to be relatively flat in Seed as North America share gains are expected to be offset by the corn to soy planted area shift, and have a full year under our Brazil soybean shift to licensing.

Crop Protection volume is expected to be up mid-single digits, driven by demand for new products and biologicals, which are expected to outperform the rest of the portfolio. We expect approximately $120 million improvement in net royalty expense driven by the continued ramp-up of Conkesta E3 soybeans and PowerCore Enlist corn licensing. We expect to deliver around $200 million of productivity savings in 2026, partially offset by approximately $80 million in tariffs.

SG&A and R&D as a percentage of sales are expected to be relatively flat with 2025 levels. Keep in mind, this includes approximately $50 million of net dissynergies. We are expecting a currency tailwind versus 2025. This is largely driven by the Brazilian real, euro and Canadian dollar. The appreciating foreign currencies are expected to translate to a low single-digit tailwind on net sales and approximately $75 million tailwind on operating EBITDA. Together, this translates to approximately 7% operating EBITDA growth at the midpoint and about 50 basis points of margin expansion.

Regarding the timing of sales and earnings in 2026, we are expecting about 60% of sales and roughly 85% of EBITDA to be delivered in the first half of the year.

With that, let's go to Slide 11 and summarize the key takeaways for the year. 2025 was a record year for Corteva with strong organic growth across both Crop Protection and Seed. Performance was driven by volume, favorable mix and continued adoption of our differentiated technologies. In Crop Protection, demand for our novel modes of action and biologicals remain strong, while Seed benefited from our price for value strategy and solid execution across key markets. Importantly, this growth reflects underlying demand and execution.

We also delivered record free cash flow in 2025 driven primarily by higher earnings and working capital improvements. Tighter operational discipline and greater year-end cash collections improved cash conversion. As a result, we returned approximately $1.5 billion to shareholders in fiscal 2025 through a combination of dividends and share repurchases. Our capital allocation priorities remain unchanged, investing in the business, maintaining a strong balance sheet for Corteva and the future independent companies, and returning excess cash to shareholders in a disciplined manner. Looking ahead, our 2026 guidance reflects growth in sales, operating EBITDA and margins. We expect continued demand from our differentiated technology, supported by our innovation pipeline and ongoing productivity and cost actions.

With that, let me turn it back to Kim.

Thanks, David. Now let's move on to your questions. I would like to remind you that our cautions on forward-looking statements and non-GAAP measures apply to both our prepared remarks and the following Q&A.

Operator, please provide the Q&A instructions.

[Operator Instructions] Your first question comes from the line of Chris Parkinson with Wolfe Research.

Chuck, could you just kind of help us break down Slide 27 a little bit more with the Bayer litigation. It seems like there are 2 or 3 key buckets of what this accelerates as it leads into the chart that you published across triples, insect resistance and cotton. I'd love to hear if it actually affects the acceleration of E3 or Conkesta in terms of the next-gen stuff.

So I'd love to hear the breakdown of that. And then also in that chart, do you assume any gene editing assumptions? Or is that purely a corollary of what was announced yesterday evening?

So let me start, and then I'm going to have Judd unpack some of the finer details. So first, we're very pleased with the agreement. And I personally view this as being extremely strategic in terms of what our overall licensing ambitions can be. And so this is a comprehensive agreement. We've been working with Bayer for quite some time. These things are very scientifically based. They're very -- there's a lot of legal precedent here for us to work through.

But I'd say what the agreement does is it provides 2 broad things. The first is we now have freedom to operate and an increased access to the licensing market, which is extremely important to us. You know our ambition when it comes to our licensing business, and it's really centered around the expectation to accelerate our corn licensing business to as early as 2027, which is years ahead of our original plans. We're also going to enter the cotton licensing market, another big opportunity for Corteva.

But I'd say more importantly, this is great for farmers and for agriculture in general because it's going to give our farmer customers simply just more choice. So now we're going to have a strong licensing portfolio for soybeans, for corn and for cotton. And if you look at it financially, the big picture, it really does set us on a path, as we said today, to deliver about $1 billion in licensing income in the next decade.

The second thing that this does, this agreement does is it resolves all the outstanding litigation with Bayer. And I think that's very helpful from a clarity and risk management perspective. So that's what this agreement is intended to do. Like I said, I'm very pleased with the agreement.

Judd, do you want to just talk about some of the finer details?

Yes. Thanks, Chuck, and thanks, Chris, for the question. And I think Chuck captured it all extremely well. And we're still needing to bring product through the R&D pipeline, but maybe let me touch on it.

One, we've got freedom to operate in canola in specific markets around the world where that's very important to us. Number two, we're going to be able to bring, as you see here, triple-stack options into the market 5 years earlier than what our previous plan was with complete freedom to operate and the ability to line up and provide additional volumes with our licensees that we've got tremendous amount of demand building with licensees today. Number three, we get to bring our next proprietary third-gen above-ground product 2 years forward into the marketplace. We also provided Bayer license for Enlist cotton. They provided us an opportunity to license their HT4, and this provides us an opportunity to license in cotton, which we had no freedom to do previously.

So comprehensively it creates a tremendous amount of opportunity for us to continue to accelerate our ambitions in this space. We've got our germplasm funnel that has continued to widen, so that we've got the -- or the germplasm that we need to be able to provide these traits. And it just puts us in a really great spot. It's a great investment for all of our constituents, whether that be farmers or whether it be investors, whether that be our licensees if we work closely with them going forward. And we're excited to be able to put the certainty and freedom to operate in the hands of our R&D team so they can start streamlining the lines that they're bringing forward as well. So thanks.

Your next question comes from the line of Vincent Andrews with Morgan Stanley.

Some more clarification on the Bayer agreement. Firstly, it sounds like there is some existing licensing expense that was going through the income statement that with the payment of the $610 million, you will no longer expend. So number one, is that true? And can you tell us how much it is? And whether you had contemplated that back in October when you gave the original guidance?

And then secondarily, you referenced HT4 having a license on that from Bayer. Can you clarify whether in future years, if you do elect to use that, whether you'll have to pay any per acre royalties today or in the future for that? Or is that all encompassed in the $610 million and you kind of have an all you can eat on that?

Okay, Vincent, this is David. I'll handle the first part of that question. Perhaps Judd can follow up with the end. So in our current guide, we have $120 million of net royalty benefit in '26. A portion of that is the fact that there were some Bayer royalties that we will not be paying now in '26 and '27, so that's what accelerated us to a net neutral position in '26, which is 2 years ahead.

The rest of the benefit of the entire overall agreement is really later past 2027 when it adds over $100 million a year. And that gets more into the freedom to operate and more on the offensive on the licensing income piece.

Your next question comes from the line of Joel Jackson.

So maybe I'd jump in here. Joel, thanks for just a little bit of time to answer Vincent's -- the second piece of Vincent's questions on access to HT4. Does that come royalty-free? No, it doesn't come royalty free. I mean we would have a royalty that's associated with that as they would with the license that we would provide reciprocally with them. So -- but it puts us in a really good position with certainty as terms of path forward and making sure that we can continue to bring our products in the marketplace. So, thanks.

I'll ask my question now. So I just want to follow up on that a bit, too. I went back to your Investor Day deck from late 2024. And if I compare your -- how you're showing you're going from a net outflow payer of royalties to becoming positive, and I look at that chart versus the chart you presented last night in your deck, it looks the same through 2030, and now you show a 2035 where it's $1 billion.

I'm just trying to reconcile that with statements that you're pulling forward things to this decade, from after next decade, you're pointing 2 years forward, 5 years forward. But it looks the same through 2030 and more incremental 2031, 2032, 2033, 2034, 2035. Can you reconcile that, please?

Joel, look, I'd have to look at the details that you're going back to the Investor Day, but it should not be the same. The acceleration that this agreement gives us is pretty powerful. When we were thinking about our original royalty journey, we were really talking about soybeans and then corn starting in late next decade. And now we're talking about corn starting now, basically in 2027, and then the introduction of cotton now.

So when you put all that together, I think that what you're going to see is that we've really put our licensing business in a much higher gear than what we could have done absence of clarity around this comprehensive agreement. So we'll have to go back and we'll look at the numbers. But the acceleration from a freedom to operate is real, and it's pulling our corn in many cases, many years ahead, and it's also opening up the door on cotton. I think the other thing is this does not contemplate wheat. So if you start thinking about that, and we've said that our hybrid wheat opportunity combined with our branded business and our licensing opportunity, it would be $1 billion of revenue.

So when you start thinking about this strategically as Corteva and then soon to be SpinCo, this provides a huge amount of value creation for our shareholders. The licensing opportunities continue to grow. And as Judd mentioned, even today, we have more demand than we have supply. So this was a matter of clearing up the access to the freedom to operate. And now that we have that, we can set our R&D and our commercial teams to meet the growing demand that we have for soybeans for cotton, for corn and soon-to-be wheat.

Your next question comes from the line of Kevin McCarthy with Vertical Research.

Maybe a 2-part question on the subject of gene editing. As we follow the regulatory developments in Europe, it seems as though there is a developing regulatory framework whereby Europe could open its market to gene-edited seeds.

So the first part would be, do you expect that to happen in 2026? And what might it mean for Corteva over the medium to long term?

Then secondly, I think one of your gene-edited products is multi-disease resistant corn. I was wondering if you could just provide an update on that product for the U.S. market and when we might expect commercialization of MDR?

Kevin, sure. So look, we're -- if you step back and you look at the global regulatory framework, we're seeing very good progress on support for gene editing around the world. In fact, most of the major producing countries now have policies firmly in place.

To your question with the EU, in December, there was an agreement with the EU framework. It still needs to be formally adopted by parliament and the council, and we are expecting that, hopefully, soon, I'd say, by the first half of this year. And we are very supportive of what we've seen so far. We think it's science-based. We think that it's going to be quite practical and it's going to allow us to bring much better crop technology to European farmers and really help, I think the EU from an overall food security and self-sufficiency perspective.

And the regulatory framework that is being proposed, I think we'll have some areas where it will actually be a simplified process, which will allow us to get, I think, products to market a lot more quickly.

Now we still need China approval. It's probably one of the last remaining significant import markets that we need approval. And we're very hopeful that we'll get that soon. If you think about gene editing, and you know you've heard me talk about this before, there's probably no more important technology right now that we can bring to market to help farmers. And if you start thinking about how thin farmers' margins are right now, this technology can go a lot way to helping farmers improve their profitability.

Now to your second question around our products. So that's right. We have a gene-edited fungal disease-resistant corn hybrid, we call it a disease super locus. And I've seen the test plots, it continues to look fantastic in our test fields. And we will be able to bring that to the market most likely within a year or 2 after receiving our overall regulatory approvals and we're pretty excited about that. We'll first bring it to the U.S. market, but then we'll quickly move that technology around the world.

Your next question comes from the line of David Begleiter with Deutsche Bank.

Chuck, can you discuss your U.S. order book for the upcoming year? And how the pressure on farmers is manifesting itself into this year's buying activities?

Sure. Well, why don't we start with Seed, and then Robert can talk about CP. Go ahead, Judd.

Yes. Thanks for the question. Our order books are very strong at this point in time. Our prepay that we've collected is on par with prior year. And our cash credit mix is very, very similar, plus or minus 1 point or 2. So we feel really good about the position we're in. I guess, translation may be what's your guess on corn acres. I'd say it's February. There's still snow on the ground and that corn versus soy mix, it's going to shift a little bit. There'd be a little bit of weight towards some more soy acres in space of corn. It's all very well manageable and within the guide that we've provided. But feel really good about the start to the year, both with our direct Pioneer as well as our Brevant retail brands.

David, it's Robert for Crop Protection, very similar story, very strong order books across the Northern Hemisphere. Europe is in full swing, and North America is moving. As we look into January, we're having a strong movement now. Keep in mind, both of these markets this last year grew a few temps, and that momentum continues as we're moving forward here. So thank you.

Your next question comes from the line of Joshua Spector with UBS.

I wanted to ask on free cash flow. Obviously, really strong performance last year. I mean how are you thinking about the conversion into 2026? Is there something one-off last year that gives back? Or is this something that you guys build on top of?

Thank you, Josh, for the question. And we obviously had a very strong end of the year with free cash flow. Some of that was, as Judd had mentioned, we did have favorable cash credit mix at the end of the year. So that was certainly a benefit. It's something that we don't count on every year. So that's probably one element year-over-year, which should be a little bit of a tailwind into '25 and the headwind into '26.

When you look at the really -- the major portion of why we were favorable is our working capital management. And where we ended this particular year was down probably 300 to 400 basis points lower than typical in our net working capital as a percentage of sales. So I would say the teams did a really good job. That's also reflected in the fact that in Seed, we had very strong sales and what have you. So our inventories are lower than typical.

So I would say going into '26, absent any type of onetime items, and I'll go into those in a little bit more detail, we would be in the range that we articulated during our Investor Day. So free cash flow, about 45% to 50%. And you might ask if that have definitely a few points lower than '25, I would say most of that is because of working capital gain back to normal. So call it another 200 or 300 basis points as a percentage of sales.

But this year, when we actually show the number, we will have a few unusual items. We will have the Bayer agreement, which will be an offset to the free cash flow number. As we get later in the year, we will be looking at separation type items. So we will be going into onetime separation cost and we'll likely also want some flexibility because we're committed to have 2 strong investment-grade balance sheet for the separated companies. So we want flexibility to make sure that we're handling that appropriately and that both companies are set up for success in the future.

Your next question comes from the line of Jeff Zekauskas with JPMorgan.

A 2-part question. First, your overall revenues in the fourth quarter were roughly flat year-over-year, down a tiny bit, but your SG&A and R&D really jumped. SG&A went from $735 million to $860 million, up about $125 million. R&D was up $50 million. What happened? Why are those numbers so unusually high? And then secondly, can you give us an idea of where you stand with Conkesta soybeans in Brazil? Where is your share? Or what are your revenues? What share do you expect for next year? What kind of revenues do you expect?

Okay. Yes. So I'll handle the first part of the question, and I'm assuming Judd will handle the second part of your question.

So on SG&A, R&D, as you can see throughout the year, we have increased our R&D. As a percentage of sales, in total we're up about 8%. And certainly, that's not really much timing on sales or fourth quarter. So you've seen that build throughout the year.

On SG&A, as we mentioned in the opening comments, we do have some additional compensation expense, variable compensation expenses sort of items that hit in Q4, also hit in other quarters, but it was probably a little bit more impactful in Q4, especially against the small revenue number.

And Judd?

Yes. And Jeff, as far as E3 Conkesta, [ CE3 ] in Latin America, and particularly in Brazil, we're going to finish the year after just getting started in this space and going through our multipliers and licensing model, somewhere in mid-single digits in 2025. We expect to double or more than double that going into 2026. We will be completely out of our vertically branded business and be 100% focused on licensing through multipliers, and we believe we're going to be in the mid-teens plus for 2026.

So a lot of momentum. We've advanced a number of new genetic platforms and feel really good about how that transition is going.

Your next question comes from the line of Aleksey Yefremov with KeyBanc Capital Markets.

Could you just call on your CP business, what share of your business will be off patent versus patent and new products in '26, given that there is quite a bit of difference between growth in these 2 categories.

Aleksey, this is Robert. We will remain about flat to what we've been in the past. Keep in mind, we're about 2/3 differentiated on our overall portfolio now, getting good growth out of our new products and biologicals. But we don't have any major shifts coming off patent, like in the industry, there are some big molecules coming off, but we don't play in those markets. So we should be stable, much like you've seen this past year from a portfolio standpoint.

I would keep in mind that there's a few things coming to play, though, that are going to help us out a little bit more. And we're waiting on registration, but we hope to have [ Visa ] launch latter part of this year, which will augment that differentiated portfolio. And remember, this is a fungicide that attacks Asian soybean rust, and we're expecting big things out of that molecule as we move forward. Thank you for the question.

Your next question comes from the line of Duffy Fischer with Goldman Sachs.

With '25 in the rearview mirror, can you just go by your major crops on Seed in major geographies where you saw either market share gains or if there were any market share losses? And then just I wanted to clarify, on the deal with Bayer, they don't get access to your Enlist in soybeans, is that correct?

Yes. Thank you, Duffy. So maybe just walk around the world a bit. From a North America perspective, we were able to continue to pick up share in corn and in soy. As we go into Latin America, we picked up mid-single-digit share in summer. We picked up mid-single-digit share plus in safrinha, tremendous amount of momentum and share in that Brazilian market as well. And as you look at other markets around the world, we had some nice recovery in India in the rainy corn season market, and we saw some nice share gains in sunflower and corn in EMEA. So we had positive impacts in almost all regions around the world.

Now in terms of the Bayer agreement, E3 on soy was not part of those discussions at this point in time. Obviously, we have a number of places that we worked with Bayer across, but that was another part of it. So thanks for that question.

Your next question comes from the line of Kristen Owen with Oppenheimer.

I wanted to ask about the 2026 EBITDA guide. You're in line with the $4.1 billion that you gave us earlier last year. But it seems like maybe some moving pieces around with the pull forward of net royalties, maybe the push in volume from 4Q into 1Q. So can you help us sort of frame what the upside case and downside case look like in this bridge?

And I do actually have a follow-up on Brazil Conkesta, if I could ask quickly. Just with the economics, how we should see that show up, that doubling in market share, how we see that show up in the EBITDA bridge as well.

Okay, Kristen. So we'll have Judd answer that. David will take the guide question, but let me just give you my perspective, and I guess my philosophy. We're sitting here in February. It's appropriate, I think, given that outside and in the corn belt, we have a lot of snow. The ground is still frozen, and we are literally weeks, if not a bit more than that, away from putting a crop in the ground. So we are usually, at this point, looking at the market conditions and needing to see what happens from a crop perspective, but it is generally our philosophy not to do too much with a guide in February.

Now we can talk about the ups and downs. So go ahead, David.

Yes. Maybe it would be helpful to just kind of reiterate what we have in the guide and then we can go from there. So when we look at the $4.1 billion, it is up 7% from the midpoint. The other interesting thing is that is the beginning or the low end of our 2027 range, which would be a year early. So I think all are very positive.

I think the other couple of takeaways. One, we are going to show growth in both Seed and CP, very much like we were able to do in 2025. And 2/3 of the EBITDA increase year-over-year will accrue to the Seed business and about 1/3 of CP, again, very similar to what we've seen. So when I think about the bridge and the different elements of the bridge, right now, we have the price impact would be more or less similar to 2025. So low single-digit seed increases. We have increased royalty income. That will be partially offset by the low single-digit CP declines. So not much of a major difference from 2025.

We already talked a little bit about net royalties, but that will be a positive. We expect somewhere in the range of $120 million versus the $90 million in 2025. The volume impact in 2026, right now, we have it in as fairly flat for Seed. Again, that's mainly due to the acreage differences between corn and soy in the U.S. that shift. And then CP more or less is forecasted to have a similar benefit in '26 as we continue to see growth in new products and biologicals.

Probably the major difference between our bridge in '26 versus '25 would be on the cost improvements. And we still have $200 million built in for cost improvements in '26, then '25, we benefit pretty significantly. About half of our $665 million was really a commodity impact that we do not have included in 2026. We think that's going to be flat in 2026. So that's a major difference there. And we also have an $80 million kind of headwind in our -- in tariffs.

So those are the major elements. And then when you go to other, if you look at other between the 2, they're about the same. So when I think about it, price is fairly balanced, royalty is definitely a positive story. The volume is probably the one that you could argue one way or the other at whether or not we're being conservative or not, but it's very early in the season to be able to make that termination. And we'll keep an eye on being able to offset tariffs and include additional cost improvements. One other element we did include, and we put this in the notes is we have $50 million of dissynergies in our number in 2026, which obviously, we would not have had in '25.

Conkesta?

Yes. And maybe just a follow-up on the Conkesta question. So for 2026, overall earnings for Seed in Brazil are up significantly. The Conkesta transition and the additional share is certainly a big part of it. That also is part of that $120 million that's in the plan that David just mentioned as well.

Your next question comes from Laurence Alexander with Jefferies.

This is Carol Jiang on for Laurence Alexander. Actually, my question has been asked already. But just a follow-up on the tariff estimation. You estimate $8 million impact from incremental global tariff in 2026. Does this figure also account for the potential secondary effects such as increased dumping of generic product in non-tariff market like Brazil?

Yes. I think -- I believe the question is does this include secondary impacts like impacts from Brazil? Is that the question?

Yes, just the $80 million figure.

Yes, the estimate that we've got on the Crop Protection primarily is where the tariffs all are -- is encompassing everything we've got for the entire business. So it includes all companies, including -- all countries including Brazil.

If it's helpful, almost all of it is CP and almost all of it is China, actives coming in to the United States.

That's the biggest part.

That is, by far, the biggest part of the tariff impact.

Correct.

Your next question comes from the line of Arun Viswanathan with RBC.

Most of my questions have been answered as well, but I guess I'll just ask on the $200 million productivity benefits. You guys have obviously been very successful the last few years, bringing up your margins and executing on that productivity. Is that kind of -- maybe you could break that out between Seed and CP if that's relevant. And then is that kind of an ongoing -- how do we think about the ongoing productivity opportunity? Where are you kind of in that journey? I know there's been a lot of discussion about that in the past, but maybe you can just kind of give us some updated thoughts?

Yes, sure. No problem. So yes, the $200 million is split somewhat equally between the 2 different businesses. And the way I look at that is it is a running rate. There's opportunities every year in seed, in production and how we go and grow the seed with our farmers, how efficient we can be there. In Crop Protection, typically, your normal productivity year-over-year improvement.

I would say beyond that, though, there is further elements in crop when they look at footprint and different optimization opportunities in the future.

I think the one thing to call out is when we gave our financial framework for 2027, we said it would be about $700 million of net productivity and cost improvement, and we had almost that last year. So obviously, with David's communication today around another couple of hundred million on a gross basis. So call it -- he did outline some of the other headwinds we have. So if you call that $100 million net, and that's only in 2026, and then if you play the framework forward into 2027, we're going to far and exceed the original $700 million that we put into our financial framework. We probably overachieved a little bit in '25, but I think '26 and the pipeline that we've got for cost and productivity is still very healthy across the company, and it is more or less split between Seed and CP.

Your next question comes from the line of Patrick Cunningham with Citi.

As we look at the Latin American CP market for 2026, does the current channel inventory position support a return to more normalized purchasing patterns? Or should we anticipate continued volatility in some of the order timing? And have you seen any further impact or improvement of credit and liquidity concerns for farmers in the region?

Patrick, this is Robert. I'll take that one. As far as LatAm goes, we're expecting the year as we move into this year, crops are in the ground now. And looking at 2026, we're going to continue to see pricing pressures in LatAm. We expect volume growth to take place there, much like this year, more lands going in and the pest and resistance pressures continue to build. So we expect growth to continue to happen there. Pricing pressures, like I said, will continue. And that just has to do with there is more than enough supply in the market nowadays. And so that will eventually tighten back up and from a channel standpoint, the channels are about normal right now for this time of year, We need to let the year play out for the rest of the season to see where we land there.

From a farmer standpoint, to touch on that just a little bit. Farmers in Latin America are stressed, very high interest rates, commodity price is a little bit suppressed, but they're still making money by and large. Cash flow is tight for them. And we've been working through a lot of those things with them. Keep in mind, you will have seen that our barter program this year between crop and seed will be near $1 billion in total for revenue there. And so we're doing things to help mitigate risk and to help manage that with farmers. And we think we're in a pretty good position as we head in '26 to have another good year there in a market that is challenged.

Your next question comes from the line of Matthew DeYoe with Bank of America.

You talked openly about kind of the initial days of the announced spin that Seed would be looking to expand beyond corn and soy. And I know you have the hybrid wheat coming out next year, which is obviously exciting. And you're talking a little bit about cotton on the back of the Bayer agreement. But what -- how do you prioritize the new markets? Are there anything beyond that? Are you looking at fruits and veggies more broadly? Do you need acquisitions to get to where you think you want to be in 5, 10 years in the Seed business from a portfolio perspective?

Yes, Matt, let me give you a teaser, but I want you to join us in September when we do our Investor Day for both companies just prior to our separation. So I won't tell you the whole story. But look, I think from a Seed perspective, we have a lot of opportunity in our core businesses. And Judd just articulated a little bit here on this call. So we think there's room to grow in corn and soybeans. And with the agreement now that we have in place, the seed licensing business, I think, is going to be just a great growth platform for us going forward.

I think then we've talked about cotton. So that's another new market for us, and we've already covered gene editing. I think gene editing, the capability, if we can provide differentiated technology from our innovation in gene editing, we will consider what I would consider to be tangential or adjacent crops, but we won't go there unless we believe we can provide something that is unique and special to the market.

And right now, as we said, our short-term focus is Seed licensing in cotton and corn and in soybeans and then entering the hybrid wheat market. We're going to do that conventionally, but also with gene-edited hybrid wheat. And that market is the largest row crop market on the planet, 20% of our calories are still consumed there as humanity. And we've got lots of new technology coming in with our proprietary traits as well.

So I think we've got a lot to keep our plates full right now. But with the advent of gene editing and as we get more comfortable with the acceptance of the science around the world, which certainly looks to me like that's what's happening, it should open up other markets for us in the future.

Your next question comes from the line of Mike Sison with Wells Fargo.

Just a quick follow-up on Crop Protection. It looks like you expect the markets to rebound in '26 versus '25. Anything in particular that gives you confidence there? The double-digit volume growth you have for the year seems to be more biologics and strong demand for new products. And then just a quick follow-up on Brazil pricing pressure in Crop Protection. Is it stabilized, getting worse, getting better? Just curious on that.

Michael, this is Robert again. Let's talk about CP markets for 2026. We expect to see modest growth in the overall CP market around the world this year. It will be volume will continue to grow. There's going to be some pricing pressures against that. But by and large, we're seeing positive signs around the world. And earlier question this morning about how things looking in Northern Hemisphere on the order books, and like I said, they're strong. So the year started really well from that standpoint.

Specific to Brazil, when you think about pricing there and when do they stabilize, et cetera, a couple of things happening in Brazil. When you look at the overall market, there is ample supply of product coming in. And so that is a lot of more generics, in formulated generics, but nevertheless, a lot of supply. But when you think about the differentiated products, we're still seeing a need for that technology and farmers are demanding that. And keep in mind, for us, again, 2/3 differentiated around the world. For us, those products command about a 10% to 15% higher margin than the rest of the portfolio.

So yes, we think there continues to be some pricing pressures there from some of the big molecules. But we have a good portfolio to combat that, and we think we're in a pretty good place from a business standpoint as we head into 2026.

Your next question comes from the line of Edlain Rodriguez with Mizuho.

A quick one. This is a follow-up to the CP question. Like the competitive pricing pressure we're seeing in Brazil and in some parts of Asia, can we ever see that happening in North America or Europe again, like how well protected all these markets from the generics?

Yes, Edlain, look, let me take a stab at that one. I think, look, the businesses, the markets are just fundamentally different. They're structurally built differently the way the farmers buy their channel partners, the infrastructure that's in each of the countries or the regions are different. And we -- no market is immune to having generics, right? Generics have been part of the global CP market as long as I've been around and will always be, and they're in all the markets.

I think that what's unique is what's happening in Brazil right now. And look, Brazil is going to grow and there's more area going into production, as we've already said. But I think what we're seeing is that the channel is being a bit more responsible. It looks to us like the channel is functioning still relatively normally. There's a lot of product currently going to ground. But it is a well-supplied market because of the way that they allow their imports.

Now what we haven't talked about, I think, specific to Brazil is a lot of this product is coming from China. And it looks to us like China may be taking early steps to control some of their exports. They just repealed their export VAT. So that's going to drive up the cost to export outside -- from China into Brazil that we think is constructive for the market overall. We're starting to see M&A actually from some of the generics in China. I think that will be constructive overall.

So I think that when you start thinking about this, we are comfortable that 2026, and I'm going to talk about globally, 2026, we should see some slow growth, which is a lot better than we've seen in the last 3 years. And 2025 was better than '24, right? It was a flat market driven by volume. But as Robert said, our planning assumption today is some headwinds when it comes to pricing in Brazil. But the rest of the markets, I think, are going to be quite healthy.

I will turn the call back over to Kim Booth, VP, Investor Relations, for closing remarks.

Great. Well, thanks for joining and for your interest in Corteva. And we hope you have a safe and wonderful day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin and I will be your conference operator today. At this time, I would like to welcome everyone to the Corteva Agriscience Third Quarter 2025 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Kim Booth, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to Corteva's Third Quarter 2025 Earnings Conference Call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer; and David Johnson, Executive Vice President and Chief Financial Officer. Additionally, Judd O'Connor, Executive Vice President, Seed Business Unit; and Robert King, Executive Vice President, Crop Protection business unit, will join the Q&A session.

We have prepared presentation slides to supplement our remarks during this call, which are posted on the Investor Relations section of the Corteva website and through the link to our webcast. During this call, we will make forward-looking statements, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, included, but not limited to, those discussed on this call and in the Risk Factors section of our reports filed with the SEC. We do not undertake any duty to update any forward-looking statements.

Please note in today's presentation, we'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in our earnings press releases and related schedules along with our supplemental financial summary slide deck available on our Investor Relations website.

It's now my pleasure to turn the call over to Chuck.

Thanks, Kim. Good morning, everyone, and thanks for joining us. Before we get into our solid third quarter results, I'd like to address our October 1 announcement on our intent to separate into 2 public companies. This proactive strategic decision is rooted in our belief that separating our Seed and Crop Protection businesses now allows both to be better positioned to achieve their maximum long-term growth potential in the future. Bringing these businesses together 6 years ago, was undoubtedly the right thing to do as demonstrated by our strong track record, including this most recent quarter. We have clearly been among the market leaders, but we have an obligation to look ahead past the short term and ensure both companies are able to pursue their distinct opportunities to the fullest extent.

So it's not that we believe things aren't going well today. They are. It's that we believe things could be even better in the future as 2 separate companies. It's really that straightforward. As we said last month, the seed genetics landscape is changing due to new technologies like gene editing and artificial intelligence, which opens new markets and opportunities for companies with scalable ag science capabilities. At the same time, rising pest and disease pressures and changing weather patterns have driven a shift from single to multiple modes of action in crop protection, including biological solutions. As a result, the market has gradually transitioned away from integrated proprietary models to more open-source licensing with collaborations now driving innovation success.

As a result, industry players are increasingly open to working together, which also allows them to share resources and reduce risk. And importantly, it allows us to get affordable top technologies into the hands of farmers. So we are looking ahead with excitement and optimism, comforted by the fact that both of these businesses are leaders in their markets today and will remain so in the future. It's early days, but the process remains on schedule for a second half 2026 separation. Our Board has initiated a global CEO search for Corteva and we will provide updates on the separation along the way, but our goal right now is to deliver a strong 2025 and 2026.

So let's now move to our current financial performance. Our results for the third quarter were largely in line with our own expectations, with the exception of outperformance on our controllables and strong early safrinha seed demand in Brazil. Operationally, we continue to execute well with double-digit operating EBITDA gains in both businesses, and we're now expecting to deliver over $600 million in controllable benefits this year, a notable improvement from our prior estimate of $530 million. In fact, this year's 9-month earnings performance is already ahead of full year 2024.

Our Seed business is performing well again this year, including $200 million of productivity and deflation benefits as well as $90 million in royalty improvement, reflecting our leading position in North America corn and progress in soybean out-licensing in Brazil. Importantly, we now expect to cross double-digit trade penetration for Conkesta next year in Brazil, the largest soybean market on the planet. Capturing price for value in most regions as well as meaningful share gains in North America is a testament to the high return on investment our technologies provide to farmers. In 2026, we will roll out several hundred new hybrids and varieties around the world, once again, helping farmers increase yield and productivity.

Finally, let me remind you that seed is the only crop input that gets better and better every year, allowing the farmer a solid return on their investment.

The Crop Protection business has also delivered solid earnings and margin growth so far this year. Led by demand for our differentiated technology, we are expecting full year EBITDA to be up high single digits this year. We continue to see volume gains and we remain committed to our strategy of focusing on differentiated and new technologies, which carry a premium in the market. Today, we're also announcing a brand name for our new next-gen insecticide active, Varpelgo, for chewing pests in fruits and vegetables, row crops and rice. Expected to launch in the early 2030s and cross $750 million in revenues at its peak, this represents the latest addition to the Corteva portfolio of trusted crop protection active ingredients inspired by nature and globally recognized for their more environmentally friendly profiles.

Included in our $9 billion Crop Protection Technology pipeline are billion-dollar product families and biologicals in all 3 chemistry indications as well as what we view to be a significant value unlock in our Seed Applied Technology business as a result of the separation.

In like seed, our Crop Protection business is generating substantial value through its focus on controllables which drove over $250 million of benefits in the first 9 months of the year. From an industry perspective, the overall ag market fundamentals remain mixed. We're still seeing record demand for food and fuel and major crop inventories are within normal ranges despite large crops in Brazil and North America.

Farmers continue to prioritize top-tier seed technologies while managing tighter margins. In the crop protection market, although we continue to experience competitive pricing dynamics in some major markets, underlying farmer demand in terms of applications remain on track with historical levels.

In other words, when farmers have crop problems, they spray with the best solution they can find. So what does all this mean for the remainder of the year? We are raising our full year operating EBITDA range to $3.8 billion to $3.9 billion, which at the midpoint translates to 14% growth versus the prior year. This update reflects growth of our new technologies, our outperformance on controllable levers, a more favorable currency impact and our latest expectations on our fourth quarter performance in Brazil.

One quick note. We look at our business by halves, not quarters. It's one reason why we don't provide quarterly guidance. Farmers plan their purchases and business by halves and weather or other uncontrollable factors often move orders, sales and shipping between quarters.

Looking at this year, the halves really do tell a story. In the first half of this year, our operating EBITDA was up 14%, while our second half is expected to be up 17%, both really strong performances. On full year EBITDA margin, we're now expecting improvement of over 160 basis points and a solid step towards our goal of 24% at the midpoint by 2027. A quick reminder. When Corteva launched in 2019, our margins were below 15%. Finally, it's also important to note that we're still expecting a free cash flow conversion rate in the range of 50% for the year as well as $1 billion in share repurchases this year.

Now let's move to the first look at how we're thinking about 2026. From a macro perspective, we're anticipating a continuation of record demand for grains, oilseeds, meat and biofuels. On-farm demand is expected to remain steady, and farmers will continue to prioritize top-tier technologies in order to maximize their yields. A farmer seed selection is particularly critical and is nondiscretionary when compared to other crop inputs. Given the high corn area in the U.S. this year, it's logical to assume we'll see a couple of million acres shift back to soybeans in 2026. With the overhang of global trade uncertainty, it would be premature to discuss how large a shift might be, but we do not consider it to be disruptive to our planning assumptions given our market-leading position on both crops now.

Global trade discussions remain dynamic. However, last week, China committed to buying 12 million metric tons of soybeans this season, followed by at least 25 million metric tons per year for the next 3 years. We will continue to monitor the situation, but this should be welcome news for U.S. farmers. Perhaps most notable is that we are now expecting low single-digit growth in the crop protection industry including high single-digit growth in biologicals. This would be a good first step in the overall return to a healthy CP market. With the exception of Latin America, where we expect competitive pressure to keep prices flat to modestly down, we see overall CP market pricing stabilizing in 2026.

Turning back to Corteva. What continues to set us apart is the strength of our portfolio, a continued focus on execution and increased investment in innovation. The introduction of hundreds of new products is expected to continue to drive solid returns for farmers and thus, a premium in the market and contribute to our volume growth. We're also expecting a continuation of sizable productivity benefits in both businesses, a defining characteristic of our margin enhancement journey.

Overall, when considering the market backdrop in 2026 as well as the growth opportunities we have in motion, we're currently anticipating full year operating EBITDA in the range of $4.1 billion which translate to mid-single-digit growth year-over-year, and we'll provide a more detailed view in early February when we issue formal guidance.

Let me wrap up by saying that we built a foundation of strength that gives us the ability to shape the next chapter of value creation on our own terms. Our intended separation is about sharpening focus, accelerating innovation and unlocking value that's been earned through performance. And we are committed to delivering results like this past quarter throughout this transition period.

And with that, let me turn it over to David.

Thanks, Chuck, and welcome, everyone, to the call. Let's start on Slide 7, which provides the financial results for the quarter and year-to-date. Sales and operating EBITDA for both the quarter and year-to-date were up versus prior year driven by continued execution on controlling the controllables and an early start to the Latin America safrinha season.

Briefly touching on the quarter, organic sales were up 11% compared to prior year with gains in both Seed and Crop Protection. Value capture remains steady overall as improved execution in seed was balanced by continued pressure in Crop Protection. Third quarter volumes were up 12%. We see gains in Latin America and EMEA, coupled with Crop Protection volume growth led by North America and Latin America. Top line growth and meaningful cost improvement translated into positive operating EBITDA in the quarter versus a loss in prior year and over 600 basis points of margin expansion compared to prior year.

Focusing on year-to-date, organic sales were up 6% over last year, again, with growth in both Seed and Crop Protection. A continuation of the price for value strategy along with increased corn acres in North America and Latin America drove seed price mix and volume gains of 3% and 4%, respectively.

Crop Protection price was down 2% year-to-date as expected, driven by competitive market dynamics, mostly in Brazil. Crop Protection volume was up 7%, but gains in nearly every region. Notably, new products and biologicals delivered double-digit volume gains compared to prior year. Operating EBITDA was up 19% over prior year, operating EBITDA margin of over 25% was up about 320 basis points driven by organic sales growth, coupled with significant benefits from lower input costs and productivity.

Moving on to Slide 8 for a summary of the year-to-date operating EBITDA performance. Operating EBITDA was up more than $550 million to just over $3.4 billion. Price and mix, volume gains and cost benefits more than offset currency headwinds. Seed continues to make progress on its path to royalty neutrality with about $90 million in reduced net royalty expense. This improvement was driven by increased out-licensing income in North American corn and lower royalty expense in soybeans. By the end of the year, we expect our net royalty expense position to be around $120 million.

Season Crop Protection combined to deliver over $500 million in productivity and cost benefits, including lower seed commodity costs, raw material deflation and continued productivity actions. Year-to-date SG&A was up compared to prior year, driven by higher commissions and compensation expense. The increased investment in R&D aligns with our target and is on track to reach 8% of sales for the full year.

As expected, currency was roughly $170 million headwind on EBITDA, driven by the Brazilian real, Turkish lira and Canadian dollar. Both Seed and Crop Protection continue to have an impressive year-to-date performance, expand on their double-digit EBITDA growth while providing meaningful margin expansion over prior year. In addition, free cash flow has improved over $917 million from the prior year. This was driven by our increased EBITDA, lower cash taxes and lower capital expenditures.

With that, let's go to Slide 9 in transition to the updated outlook for the full year. Our updated '25 guidance reflects the strength of our year-to-date performance and continued confidence in delivering the fourth quarter. As a reminder, in the second half of 2024, we delivered $425 million of EBITDA, with all of that earned in the fourth quarter when we achieved $525 million, largely due to a near record crop protection quarter. This year, that risk is reduced as a portion of those earnings have already been realized in the third quarter.

For the second half of 2025, we still expect approximately 17% growth over prior year. As Chuck mentioned, we now expect operating EBITDA in the range of $3.8 billion to $3.9 billion, representing 14% growth at the midpoint. This increase is driven by broad-based organic sales growth and incremental cost improvement benefits across both businesses. As a result, we now expect operating EBITDA margin expansion of approximately 165 basis points.

We are also raising our operating EPS guide to $3.25 to $3.35 per share, up 28% at the midpoint versus last year. This reflects stronger EBITDA performance and lower-than-expected net interest expense and foreign exchange losses.

Finally, we are reconfirming our free cash flow guidance of approximately $1.9 billion with cash conversion rate of about 50%. This improvement is primarily driven by earnings growth.

With that, let's go to Slide 10 and summarize the key takeaways. First, while we still have an important quarter of the year left to go, we delivered a strong third quarter and year-to-date performance ahead of expectations. Organic sales growth was driven by our leading corn portfolio in North America and Latin America, combined with broad-based volume growth for Crop Protection. We delivered about $500 million in cost savings from lower Seed and Crop Protection raw material costs along with productivity gains. The combination of organic sales growth in both business units, $90 million in net royalty improvement and enhancements in product mix contributed to about 320 basis point margin expansion over prior year.

In addition, free cash flow has improved over $970 million from the prior year. This was driven by our increased EBITDA, lower cash taxes and lower capital expenditures.

With that, let's go to Slide 9 in transition to the updated outlook for the full year. Our updated '25 guidance reflects the strength of our year-to-date performance and continued confidence in delivering the fourth quarter. As a reminder, in the second half of 2024, we delivered $425 million of EBITDA. With all of that earned in the fourth quarter when we achieved $525 million, largely due to a near record crop protection quarter. This year, that risk is reduced as a portion of those earnings have already been realized in the third quarter.

For the second half of 2025, we still expect approximately 17% growth over prior year. As Chuck mentioned, we now expect operating EBITDA in the range of $3.8 billion to $3.9 billion, representing 14% growth at the midpoint. This increase is driven by broad-based organic sales growth and incremental cost improvement benefits across both businesses. As a result, we now expect operating EBITDA margin expansion of approximately 165 basis points. We are also raising our operating EPS guide to $3.25 to $3.35 per share, up 28% at the midpoint versus last year. This reflects stronger EBITDA performance and lower-than-expected net interest expense and foreign exchange losses. Finally, we are reconfirming our free cash flow guidance of approximately $1.9 billion with cash conversion rate of about 50%. This improvement is primarily driven by earnings growth.

With that, let's go to Slide 10 and summarize the key takeaways. First, while we still have an important quarter of the year left to go, we delivered a strong third quarter and year-to-date performance ahead of expectations. Organic sales growth was driven by our leading corn portfolio in North America and Latin America, combined with broad-based volume growth for Crop Protection. We delivered about $500 million in cost savings from lower Seed and Crop Protection raw material costs along with productivity gains. The combination of organic sales growth in both business units net royalty improvement and enhancements in product mix contributed to about 320 basis point margin expansion over prior year.

Given our strong year-to-date performance and continued confidence in the fourth quarter, we raised our full year 2025 outlook across our key financial metrics.

And finally, we remain on track for $1 billion of share repurchases in 2025. This, along with the dividend, translates to roughly $1.5 billion of cash returned to shareholders during 2025, a testimony to the strength of our balance sheet and cash flow outlook.

With that, let me turn it back to Kim.

Thanks, David. Now let's move on to your questions. I would like to remind you that our cautions on forward-looking statements and non-GAAP measures apply to both our prepared remarks and the following Q&A.

Operator, please provide the Q&A instructions.

[Operator Instructions]

Your first question comes from the line of Chris Parkinson of Wolfe Research.

Chuck, I thought you guys have a pretty interesting setup between Slides 25 and -- through 27. In terms of the why now and your preliminary remarks even on this call, what do you think is the most missed of what you've laid out? Is it the baseline CPC pipeline where you've got the new actives? Is it the balance between the plant health and biologicals? Is it the Spinosyn franchise as a percent of the insecticides, which has been pretty successful? I mean what would be the things that you would say like, "Hey, this is what the independent company actually needs to focus on and further differentiate itself from both a growth and a margin perspective on a go-forward basis?"

Chris. So look, I think we've been pretty consistent with our messaging. If you look at the last 5 years, our Crop Protection business has been among the leaders. We're up about 200 basis points. I'm rounding, I think it's about 160 basis points, a little bit more after the third quarter now. And we have one of the best and the deepest R&D pipelines out there, and we put the number out actually at our last Investor Day of $9 billion. And then we just announced today some new products, some new actives coming into the marketplace.

And if you referenced Spinosyn. So Spinosyn is a franchise product for us. It's still growing. It's a microbial and it will get close to $900 million in revenue this year. And so we like that product a lot. But we also have these newer products that are really driving the landscape, I think, for our business.

But look, I think that it's more of the same. Our strategy for Crop Protection was defined 4 years ago. And it was really simple, right? It was really to drive differentiated technology in the hands of farmers. And so we made decisions back then to reduce the more commoditized part of our portfolio. We exited some geographies. And I think the proof has been pretty evident of the results there.

As a separate independent company, so to get to your question, what we think will happen now is that there's simply going to be more doors that will open for this business. And the example that we gave even on my prepared remarks this morning is on Seed Applied Technology, which is a $0.5 billion business for Crop Protection. But we know that there will be some more seed companies that will do business with our Crop Protection -- independent Crop Protection business when they separate. The other thing I would say is that when you look at how we go to market with the different channels, we think that there'll be more retailers and co-ops around the world that will do more business.

So the strategy for Crop Protection will not change. The formula is working, and we're winning when it comes to that formula. But I think there'll simply be more opportunities. And then when it comes to margin, as I mentioned, we're already up a couple of hundred basis points, and we've already committed in terms of 2027 to have that business at 20% EBITDA margins.

And then just before we separate, there's going to be 2 Investor Days, one for each business. And I would expect at that meeting, we will give you kind of a margin trajectory post 2027 for each business, and we would expect continued growth. But don't forget, this is an innovation company, and we're also committed to keeping our R&D at that 6% to 7% of revenue because we think that, that has been a winning formula. So hopefully, that helps you.

Your next question comes from the line of Vincent Andrews of Morgan Stanley.

Maybe just sticking on Crop Protection and ahead of the separation next year. Chuck, do you think there's any further pruning of the AI portfolio that you want to do? Or is there anything you want to maybe add into it? Whether it be on a wholly owned basis or a JV basis? Or just are you comfortable with everything that you have at this point or areas that you'd want to add to or subtract from?

Yes. So good morning Vincent. We like our portfolio a lot. We've invested in it heavily. I think if you look at what's been coming into the market with our new products, Rinskor, Arylex, Reklemel, these are all new actives within the last few years or so and then the new products that we're bringing into the market in late this decade, early next decade. But look, we're always looking at partnering with other companies whether that's full M&A or collaborations or R&D relationships in terms of joint ventures because I think that more is needed in the industry. And I've said that many times that this is an industry that needs to work together because, look, we've got real issues when it comes to disease and insect resistance in terms of what we're seeing around the world, and it is getting more expensive to bring new actives into the marketplace.

So collaborations help everyone. They help each company and they actually help the farmer in terms of bringing affordable next-generation technology to the marketplace. So we would be open, but that's not because we don't like our portfolio. In fact, we think that our portfolio, as I've mentioned already this morning is quite strong.

Your next question comes from the line of Kevin McCarthy, Vertical Research.

Chuck, can you discuss how credit market conditions are evolving for growers in Latin America and what that means for Corteva in the industry? One of your peers highlighted this issue recently, and I'd love to get your perspective on it.

Yes, this is David. I'll probably take that call. So when you look at overall, and I'll say, Latin America, primarily Brazil and Argentina, we are seeing an industry that's seeing higher cost to borrow and leverage customers, and there are increased bankruptcies. I think when you look at Corteva, we're managing this risk very well, and our losses have been very minimal. So when you look at our past dues, for instance, this year versus last year, as a percent of AR, we're actually a couple of hundred basis points better than we were last year. And we've also spent a lot of time really de-risking our overall AR balance.

So when you look at our exposure to folks like the national distributors is very minimal compared to perhaps the industry. And then in addition, we're a pretty big user, and I think we have a very robust barter system, which helps us yet again reduce our exposure and about 40% of our total sales in Brazil is on the barter system. So I think when you look at the mitigation actions we've made, I think our exposure and our actual, so far, our performance has been very strong.

Yes, Kevin, maybe if I could. So I think David hit these points, but it's worth saying again, I think our go-to-market strategy, especially in Latin America, as well as how we barter to risk manage. I think those are 2 differentiating factors for Corteva that we found as part of our overall risk management framework for that part of the world.

Your next question comes from the line of Joel Jackson of BMO Capital Markets.

Maybe a 2-parter. Have you had any time or ability to get or better take on what your dis-synergy cost -- dissynergies might be? I think you projected early on, maybe a sub-hundred million dollars dissynergies. And then have you thought about what you might do into the split? Might you look at what you may do for buybacks, would you continue the current rate in the first half of the year or into the split -- next year into the split? What are you thinking about that? Or do you want to keep the balance sheet sort of, I don't know, stable is the right way to say up until the split?

Yes. So this is David. Maybe I'll handle the second question first. When you look at our expectations for cash flow this year, we said $1.9 billion. I would say, as a lot of people know that it's really that fourth quarter that's critical to see how our full year ends up. And I would say that if we end up having a typical credit mix situation in this year vis-a-vis other years, we'll likely be north of that $1.9 billion number. So again, strong cash flow, strong position.

I think whenever it comes to any capital deployment items for 2026, we'll update everyone during our February call when we go into more detail around our guide for 2026. And I think it's reasonable to expect. We'll also want to make sure that we have the proper capital structures for both businesses as we go into the split.

When you look at where we are regarding our separation, our separation management team is up and running. So we have numerous teams looking at every function. And again, looking at exactly detailed plans around what those dis-synergies might be, our initial estimates were, as you pointed out, $80 million to $100 million. And the teams are working very hard to make sure that we minimize that number. So again, we'll be providing more details in February. And again, that's only because we'll have much more detail at that point in time to share with everyone.

Yes. And then, Joel, just on the 2025 share buyback, we're committed to complete the $1 billion that we communicated earlier this year.

Next question comes from the line of David Begleiter of Deutsche Bank.

Chuck, just on biologicals, they will be a key part of the new CP story. Year-to-date, your sales are up about 7%. So why are they growing faster for you guys right now, do you think?

Yes. So David, thanks for the question. First of all, I'd say we're very pleased with the growth and the progress in biologicals. When we first entered the market and when we did the M&A, we were in that neighborhood of about $400 million of revenue. And I think this year, it's going to be closer to $600 million of revenue. So very strong growth considering the overall market backdrop in crop protection.

The other thing that we're very pleased with is that some of these products now are moving nicely around the world. And we've just launched the biologicals business in a branded way in North America, and this spring was the first year that we've done that, and we're seeing really good success, I think, for U.S. farmers trying this new technology. And then also progress with some new technology actually going into Brazil and in Europe.

So I think it takes a little bit of time to move these products around the world, and that probably is some of the reason why we've seen the growth rates the way they are. But overall, I'd say we're very pleased with our biologicals performance, what farmers are seeing on the field and how we're moving these products around the world. So we would expect to see next year continued strong, high single, low double-digit growth rates in biologicals for the foreseeable future.

Your next question comes from the line of Josh Spector of UBS.

I was wondering if you could just dial in a little bit on crop chems and pricing specifically. So you relative to your peers, it doesn't seem like you're changing your expectation on crop chem pricing in the second half. So I wanted to confirm that first.

And then second, just thinking about your comments around '26, is it too early to call that we're going to see low single-digit growth in crop chemicals? Or why do you have the confidence to be doing that now?

Okay. I'll have Robert talk about second half pricing, and then I can come back with 2026. Go ahead, Robert.

Yes, second half pricing is, as you've seen, year-to-date, where we are down low single digits. We expect we'll finish about there overall as we finish the year. But the big driver in the second half is Brazil. And actually, there's an improvement or good news story happening here because we expect Brazil to be mid-single digits in the rest of the year and that's in comparison to high single-digit loss last year. And so continuing to improve there, and we expect to continue to do that as it gets into '26.

By and large, the rest of the regions are running about flat. And so thinking about crop price into the future, we think these trends continue to move in that direction as we continue to get more and more new products into the channel, as Chuck talked about.

And then just, Josh, on your question on '26. So yes, look, it is a little early. We need to finish 2025 in Latin America. But here's how we're viewing it. I guess it's an early look on Crop Protection globally. '25 we expect to be flat, which is better than the last few years. Robert already mentioned. So LatAm, Brazil specifically, probably down mid-single digit, but that's much better than being down high single digits the year before. And then next year, as we move into 2026, we expect Brazil still to be down, but low single digits. So the trend line is improving.

Overall, though, for the Crop Protection market for 2026, we think it's going to be better than 2025, and it's really going to be driven by volume growth with pricing stabilizing everywhere around the world, perhaps except for Brazil, which we've already talked about.

So what gives us confidence? It's a really good question. And the way I think about this is, look, on-farm applications around the world are strong. We can see it. We can see the product coming out of the channel consistently around the world. And channel inventory is more or less are in healthy normal ranges. And then China. So China from a generic or commoditized product perspective, prices have been stable now for some time.

So there is stability in the crop protection industry. The area that gives us less confidence, we've already called it out, is Brazil, in Brazil pricing. Volume has been pretty healthy because there's been new acreage put into production and farmers have a need for the product, and they're using it. We just need to see the trajectory on pricing sort of stabilize and hopefully return to some sort of positive growth in the future.

So when we put it all together, I think it's -- right now, it's a reasonable assumption to say that 2026, the global crop protection industry will return to, we'll call it, low single-digit growth.

Question comes from the line of Jeff Zekauskas of JPMorgan.

Diamide pricing is falling and your insecticide pricing seems to be moving lower. I'm wondering about how do you see the effect of price pressure in chemicals like Rynaxypyr affecting your Spinosyns. And how do you see that price pressure affecting your volumes? Did Spinosyns grow this year in volume terms? And is that the area where you're most worried about price pressure next year in crop chemicals?

Yes. So maybe Robert can talk about volume and then I can come back and give you some thoughts on sort of the pricing dynamics. So go ahead, Robert.

Jeff, good question in relation to how our portfolio fits into the overall market and specifically insecticides. We've had some setbacks this year around weather in some areas and our portfolio is not immune to pricing pressures, albeit it's a premium products. And when you think about the generics, right, they set the floor. And so we do feel pricing pressures, but our volumes continue to grow. And some really good things happening in this area that I'll call your attention to and you brought up Spinosyns.

We expect Spinosyns to finish up near $900 million for a single molecule this year. That's a 5% organic growth in a market that's flat. And so we continue to see good things out of our Spinosyns. Specifically for Spinosyns versus some of the other generics is, it's a rotation partner. Resistance builds quickly in some of these areas. And so the demand for Spinosyns, we expect to continue because of that.

A few other things happened in this area that I just should bring your attention to. New products at Pyraxalt, Reklemel, these things are up a 30% combined on a year-over-year basis year-to-date. And we expect these things to continue from a growth in our insecticide portfolio, and Spinosyns will lead the way.

Yes. Jeff, just a few more comments. So I think Robert covered it well. If you think about what happens on the field, the diamides and the spinosyns are actually complementary. Farmers usually rotate them because of insect resistance issues. So we don't really think that there are competitive products. Now Robert said, our Spinosyns business is growing, and we like the trajectory. But from a pricing perspective, the floor is set by more commoditized insecticides. So we're not immune to that dynamic.

But the one interesting thing about spinosyns to just differentiate it from some others, this is a microbial. It's not chemical. So what that means is it's a living organism, and it's very difficult to replicate. In fact, if you don't have the strain, you would have to go find the strain inside of nature, and it won't have the same efficacy because we've been engineering that microbial for almost 20 years. So even though that this product family has been off patent, we've been able to command a premium into the marketplace because it's a microbial that's used in a rotational application usually for farmers around the world. So hopefully, that helps.

Question comes from the line of Laurence Alexander of Jefferies.

This is Dan Rizzo, on for Laurence. You mentioned that free cash flow is being driven by earnings growth. I was just -- going to ask how we should think about working capital and particularly as maybe a percent of sales over the long term kind of on an annual basis?

Yes, it's a good question. And when you look at so far, our performance this year, you will see that a lot of our year-over-year improvement has been driven by working capital. You'll see a little bit more increase in receivables, obviously, due to our volume and sales increases and then the little decline in inventory. Typically, in Q4, we will end up building some inventory, and we expect that to be again this year. And that's why we're in that $1.9 billion, perhaps north of that for our free cash flow.

When you look at the overall working capital as a percentage of sales, I would say that if you take probably an average over the last couple of years is a pretty typical area for us to be. Maybe if you go back further than that, it isn't. So I would say if you take the last couple of years, the working capital sales is a good indication of what our plans will be going forward.

Your next question comes from the line of Duffy Fischer of Goldman Sachs.

Question on seeds. Now that we're kind of through the season, I was hoping you could give me a view on how you did market share-wise in the northern hemisphere on the big crops: corn, soy, cotton, canola. And then I thought I heard you make a comment about Conkesta in Latin America, but I missed that. How fast is that growing? Or how big do you believe that will be next year?

Go ahead, Judd.

Yes. Thanks, Duffy. So from a market share perspective, we do feel very confident that we were able to pick up some share. At the same time, we held price mainly through mix here in corn, did that across brands and feel very good about our product performance going into '26.

On soy, we picked up even more share than we believe we did in corn. We need to finalize all this yet with acres. But directionally, we're very confident that we've had a strong year. And it's really based on germplasm and the performance of our products.

Now in terms of Conkesta, as we think about where we're at with that today in 2026 -- or 2025, 8% to 10% of the market; 2026, we're going to get we're going to get into double digits; and as we get to 2030, we could be 1/3 of the market in Brazil with E3 and Conkesta. So like the growth, like what the next few years looks like in that space.

Your next question comes from the line of Arun Viswanathan of RBC Capital Markets.

I guess just focusing on the margins. It looks like you've had very strong performance. When you started this journey, you were in the mid-teens across both businesses and then we hit the high teens and low 20s and now you're kind of mid-20s across the whole company with up to 30% in Seed. So I guess, do you see continued margin growth as you move into '26? And what will be driving that? Is it kind of across the board price volume and cost gains? Or would it be mostly driven by cost? And maybe you can also weave in if there's any royalty considerations we should take in there?

Yes. Thank you. Yes, look, we're very proud of the margin journey. It's been a company-wide effort and initiative for several years. And just to get to the point of your question, we do think that the journey will continue. In fact, we've set public targets out to 2027 of about 24% at the midpoint. So we still got some room to go.

We've been on that trajectory of, I'll say, at 100 to 150 basis points per year, and we think that's as good of approximation as we can give you. It will be across both Seed and CP. And the drivers are sort of spread. Our new products, whether it's new seed hybrid and varieties or if it's new products in Crop Protection will be a major driver. I'd say seed out-licensing as well, very high-margin opportunity in business. And as we move towards royalty neutrality and then royalty income post 2028, we think that will be a major contributor to our margins over time.

And then cost and productivity. When you think about -- when we laid out our targets for 2027 of $1 billion of EBITDA growth in 3 years, about $700 million with cost productivity and deflation, and we're trending a little better than that, and we probably will do better than the $700 million on a net basis. So I think that, that is also a major focus for the company. And one of the core competencies that I think we have as an organization is to always strive for improved cost efficiencies across the company.

Your next question comes from the line of Aleksey Yefremov of KeyBanc.

So you're showing in your CP business, 65% of the portfolio is differentiated. Could you talk about the remaining 35%? How are these products competitively positioned in this possibly more competitive world?

Yes, Aleksey, thanks for the question. The portfolio, as you know, we started in 2022, beginning to work on getting it to where we are today with about 2/3 of it differentiated. And that does drive a premium in the market, and it's higher technology that's adding value to the farmers. The balance of that is what we call not differentiated, but that doesn't mean it's commodity generic. It is still a formulated product that is normally in the price ladder, brand ladder type of setup to where it's sometimes a lower price point, not the premium product, but it still is bringing value on the farm.

So our overall scheme for our portfolio and how we shape it is we don't intend to play in the commodity generic type molecules. We want to play in that upper end because as an innovation company, that's how we fit into this overall agricultural economy. So I'll leave it there. I hope that helps a little bit.

Your next question comes from the line of Kristen Owen of Oppenheimer.

Nice dovetail into a more strategic question that I wanted to ask you. Just ahead of the split next year, I did want to talk about maybe some of the digital assets that you've compiled over the last several years, whether it's the things that you've built yourself like CARL or the ones that you've acquired and built on like the granular assets. How integrated are those platforms when we think about seed versus CP? And are there investments that you need to make in your digital infrastructure over the coming 6 to 9 months to support those stand-alone businesses?

Yes. Thanks for the question, Kristen. So yes, this is a very good focus area for us. Our digital support systems are integrated. And so we are going to have to -- and it's part of the $80 million to $100 million of dis-synergies that David has already called out, but a percentage of that will be to separate those businesses to ensure -- to separate that business to ensure that both Seed and CP have the AI and the digital support that they need because I think one of the major reasons we've been able to drive productivity and cost reduction as well as the speed of innovation and the high return on investment we have with our R&D dollars is because we've made strategic investments in this area, and we don't want to lose that capability.

So right now, inside of Corteva, that is in one group, and we'll have to separate that quite carefully. We're confident we've already done a lot of work in this area, and it is included in the $80 million to $100 million of dis-synergies, but it will be an area that we'll have to make sure that before we launch both companies, that they have the digital assets that they need to continue with their strategic journeys that they're both on.

Your next question comes from the line of Matthew DeYoe of Bank of America.

Two ones for me, I guess. First on CP. Even if we assume pretty chunky margins for price/mix, it seems like incremental margins on volumes for chems were really strong. I guess why may that -- I guess, why would that be? And then I have a feeling -- I know how you're going to answer this, Chuck. But if we look like, I don't know, call it, 15 years down the road for seeds, given the lower barriers to entry with gene editing, is it possible that the seed company business model just looks over time more similar to like a CPG company like L'Oreal or Pepsi that becomes an acquirer and marketer of smaller technology brands? And like how do you -- or how does that kind of jive with R&D and how you think about budgeting, but I'll leave it there?

Yes. Matt, so we only caught -- sorry, the second part of your question on gene editing, which I can certainly answer. Was there a CP question before that?

Yes. I was just looking at the incremental margins in -- for volumes because obviously, CP EBITDA was up a lot and price/mix was a bit of a headwind, but it seems like the volume incrementals are big?

So let me take the gene editing question, I'll have Robert deal with the incremental margin volume question. So look, looking 15 years out, for me, is very exciting when it comes to this technology. In fact, we put a slide in the appendix of our first gene-edited corn hybrid, which we call a disease super locus on Slide 29. I'd encourage you all to have a look at it. This is just scratching the surface, I think, on the full power of the technology. But we do not think that it will become a disruptive technology beyond sort of what can be done inside of the lab.

What do I mean by that? If you look at what is going to be needed to be successful, the gene editing capability, we believe, will be readily available. In fact, we license our gene editing tools to many companies around the world, and we encourage that kind of competition. It is important from an innovation perspective. I think where the differentiation will be will be on the germplasm because you need something great to edit. And so the capability to gene edit plus the germplasm, plus if you think about how we go to market around the world, we have to be able to produce seed in every region around the planet where we're going to sell. And that capability is really expensive and very difficult.

And so when you start thinking about this, where I think that this leads is that there could be great new technology that's being invented, and we really hope that there is. But then what it will lead to is probably more partnerships because of access to germplasm and then just the sheer supply chain production capability that's going to be required. But it is going to be, I think, a very powerful technology in the future. And I think it will transform how farmers actually farm and what we're able to do to help farmers. So that's the question on gene editing.

Maybe Robert, on incremental margin volume, if you can answer that.

Yes, thanks. Our journey, as Chuck stated earlier, started back in 2022 when we began to change our strategy and focusing in on profitability and overall financial health of the CP business. And we've had some great inroads there of improving the financial health of this business to where it is today. And that was on the backs of a couple of areas.

One, you touched on it of mix, price volume trade-offs and what that -- how that impacts us. And I'll draw your attention to 2 areas there that we've talked about quite extensively around our growth levers, but let me go into how that impacts margin. Our new products and our biologicals portfolios is 2 areas that typically have a 10% to 15% margin advantage over your traditional portfolio. And these are areas that are growing faster than the rest of our business. They're both in the double-digit growth year-to-date. And as Chuck talked earlier about biologicals into the future, we're excited about the continued growth there.

And then our new products that we've recently put into the market, Rinskor and Arylex are growing at a rapid rate. These 2, just to put in perspective, will be larger than Enlist. In 2027, we expect the 2 combined to be about $1 billion in revenue, and that's not their top side. So when you look at our mix of the portfolio, that will continue to help our margins because of this differentiation that we supply and that price for value that we're adding to that farmer.

The second thing around it is just the great work, the operations teams and the network optimization that has been taking place when we talk about our footprint optimization, year-to-date, we'll have delivered about $200 million in productivity for this year alone. And that work has a work plan that will carry us out past 2027, and we are on track to deliver the commitments that we gave Investor Day for the cost savings as well. So you put those 2 together and those compound to get to the bottom line of impacting that margin and continue to grow our EBITDA, and we're excited about the future of it.

Your next question comes from the line of Patrick Cunningham of Citi.

Could you provide an update on hybrid wheat or double cropping systems, whether it's progress in commercialization, expanded pilot programs or any milestones that we should be modeling over the next 1.5 years?

Yes. So as you know, we're pretty excited about our hybrid wheat technology. And the way I think about this is this could certainly be the third leg to our stool. We're already market leaders in corn and soybeans. And if you add wheat over the next decade or so, it's a pretty powerful combination. We have said that we believe this is a $1 billion revenue opportunity in the next decade.

So this is kind of the year 3 of our plant trials. I'd say all systems go for a launch in 2027. We're seeing consistently a 10% to 15% yield improvement, which will be really exciting for farmers. And don't forget that the first hybrids we put into the market will probably be the worst ones we put into the market because they're coming first into the pipeline.

So what I'd say is that there'll be, I think, small amounts of availability in 2027 ramping up. But as we get out to the next -- the middle of next decade, we think that this will have a similar margin profile as corn and soybeans for us. So pretty exciting for us, a yield improvement for farmers overall. And this is an important crop, right? It's the largest row crop in the world, and it still accounts for 20% of the calories we consume. So very important for society when it comes to food security.

Your next question comes from the line of Edlain Rodriguez of Mizuho.

Chuck, so as farmers are likely to shift some acreage from corn to soy, can you please remind us of the potential impact on Corteva? And do you feel that you're well positioned to easily offset any headwind from there?

Yes. Sure, Edlain. So the sensitivity that we've normally given is about $10 million of EBITDA for every 1 million acres that shifts from corn to soybeans. It's included in our thinking of the $4.1 billion. It's a little too early for us to say exactly how many acres are going to shift because we've got lots of time here for farmers to make that choice. But it would be logical to assume that from the 98-or-so million acres of corn, we're going to see less than that in 2026, assuming the trade routes and the export markets still stay open. So there's still some uncertainty there. But overall, what we've given you in terms of our first look when it comes to 2026 EBITDA, that's all factored in, but it's about $10 million of EBITDA for every 1 million acre shift.

Your next question comes from the line of Ben Theurer of Barclays.

Just coming back to the spin. And obviously, we've talked about the seed business and the opportunities from growing through gene editing and M&A, et cetera. But when we look at the Crop Protection business, how would you see -- with biologicals within that segment, how would you see the opportunities and the likelihood of you being as well active here on potentially M&A to add to the portfolio without just sticking to the internal pipeline?

Yes. Very good question. So this is an area where I think we have been active over the last couple of years in terms of M&A. The biologicals industry just as a whole is more fragmented, and there are smaller companies doing really great things. It could be that we would get more active from an M&A perspective and just outright acquire them or it could be either commercial or R&D collaborations because we already do a lot of that through our R&D and our commercial organization.

So all of those options are on the table. I would suspect that as the company separates, they will even be more focused on growing their biologicals portfolio because it's been such an important part of that business that I think you're going to see all of these things kind of accelerate over time, M&A and technological and commercial partnerships.

There are no further questions at this time. And with that, I will turn the call back to Kim Booth for closing remarks. Please go ahead.

Great. Thanks for joining and for your interest in Corteva, and we hope you have a safe and wonderful day.

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Corteva Investor Call. [Operator Instructions] It is now my pleasure to turn the call over to Kim Booth, Vice President of Investor Relations. Kim, please go ahead.

Good morning, everyone, and welcome to our call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer; David Johnson, Chief Financial Officer, will join Chuck for the Q&A session. We have prepared presentation slides to supplement our remarks, which are posted on the Investor Relations section of the Corteva website and through the link to our webcast.

During this call, we will make forward-looking statements, which are based on our current expectations and assumptions about the future and, therefore, subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, including, but not limited to, those discussed on this call and in the Risk Factors section of our reports filed with the SEC.

We do not undertake any duty to update any forward-looking statements. During today's presentation, we'll refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP measures are available on our Investor Relations website.

It's now my pleasure to turn the call over to Chuck.

Good morning, everyone, and thanks for joining us today to discuss the next chapter in our company journey. Before we start, I would like to clarify a few things upfront. First, our 2025 full year guide remains intact. There are normal puts and takes, but overall, our year is unfolding as expected.

Second, we remain on track to deliver our 2027 financial framework. Our first look at 2026 EBITDA has us rolling up to $4.1 billion at the midpoint, consistent with expectations. And third, our announcement today is driven by our focus on delivering long-term value. We see this as beyond 2027. What I mean by this is there are no surprises leading to our separation, as we'll discuss in a minute.

Now let's get to today's announcement. Let's start with a quick look back. Since the creation of Corteva as a stand-alone public company in 2019, we have built an organization that leads the world in agriculture technology. We increased our annual operating EBITDA by an 11% CAGR and grew our EBITDA margins more than 700 basis points, a remarkable feat and a testament to our focus on technology development and controlling the controllables.

And through the first half of 2025 we've returned $7 billion in cash to shareholders. In the same time period, we delivered a TSR of about 200%.

Driven by our world-class R&D organization, we launched about 500 new products in any given year, putting critically needed technology into the hands of farmers. Our CP new products alone are expected to deliver over $0.5 billion of additional revenue within our financial framework period. We are a leader in biologicals and have other exciting new growth platforms coming online including biofuels, hybrid wheat and gene editing, which together we described at our last Investor Day as being a multibillion-dollar incremental revenue stream.

Our track record has been consistent and strong. This performance is due to many things, not the least of which is our employees who come to work every day with a passion for and deep belief in the mission of agriculture. I have always thought our people are the best in the industry. But it also reflects a series of proactive and, frankly, at times difficult actions taken over the years to strengthen our business.

We simplified our portfolio and exited certain geographies. We invested in biologicals. We cut costs. We work to optimize our manufacturing footprint, and we invested in R&D even when our margins lagged our peers. Our Board and management team have always prided themselves on being and staying ahead of the curve and we believe we're about to demonstrate this forward thinking once again.

Corteva today comprises 2 efficient, effective and focused operating models with strong records of growth and margin improvement. These 2 market-leading businesses are both farmer-centric with technology and innovation at their core. Both are focused on improving yields on farms around the world. So we begin in both cases from a position of strength.

As you will have seen this morning, we announced a plan to separate Corteva into 2 new companies, one comprising our current CP business and the other our Seed business. The decision to act now is rooted in a few core beliefs on the part of the Board and the management team. First and foremost, as a farmer-centric organization, today, we appreciate that our customers want and need choice across their input decisions, including Seed and CP. Over the mid and long term, the best way maybe I can even say the only way for this company to preserve and expand that choice and keep putting innovative, effective, sustainable solutions into the hands of farmers around the world is to give both businesses the freedom to operate without having to look out for the other.

Second, we believe that the recipe for success in the future will be different from what it is today. This includes not only the way that 2 businesses choose to innovate but how they operate within their respective value chains and also how they make themselves even more cost efficient. For example, the continued success of our SpinCo business will be predicated upon sustained investment in advanced genetics and further capitalizing on our unique route to market.

At New Corteva, success will be built upon an optimized supply chain new level of operational excellence and the ability to invest in next generation of sustainable differentiated innovation, including biologicals and other nature-based products. And third, we believe separation will give both businesses the corporate currency and balance sheets to invest in long-term organic and inorganic growth to capitalize on market opportunities, all of which will be backed by targeted investment grade credit ratings.

And of course, a separation will allow these businesses to maximize long-term value, certainly for our shareholders. but also for farmers, customers and our employees. We expect this to be a low complexity transaction and any dis-synergies it presents to be manageable and ultimately outweighed by mid- and long-term opportunities.

We did not make this decision quickly or take it lightly. But as I said earlier, we have a history of moving before the market, and we believe we are doing so again. I want to stress as strongly as I can that this is not about the business 6 years ago or even today, this is about tomorrow. Let's talk a little bit about why this is true. First, a discussion of the markets for both businesses.

Let's start with New Corteva. Our view of the Crop Protection market hasn't really changed. We all know recent conditions have been tough and this market has always been competitive, but we still believe the market will return to growth in the near future. As many of you know, our CP business has largely outperformed in the market through the recent period of intense market competition.

We've seen 5 consecutive quarters of volume gains and flat pricing in our CP new products in the first half of 2025. The market is improving. Importantly, the CP market also needs and still values effective, differentiated technology as we see in the rapidly expanding biological segment and price premiums for patented technology.

And as a result, the things we've been highlighting over the past year or 2, including our CP new products and biologicals, should allow new Corteva to continue to grow above the market and improve its margin profile in the near term. So again, while our view of the CP industry is mostly unchanged, what has changed is what we think will be needed over the next few years and beyond for it to remain a global leader.

Specifically, we firmly believe CP industry players will need to innovate and compete differently than they did just a few years ago or even today, a pure-play company will be best equipped to fulfill the mandate for this mission. Also, the technology advantage New Corteva enjoys, coupled with its laser-focused on operational excellence will continue to be a competitive strength, helping it to remain one of the premier players in the global market.

Being a pure-play Crop Protection business will give new Corteva the flexibility to further optimize its manufacturing and supply costs, develop deeper collaborations and partnerships on innovation and drive more effective channel management in ways that are simply less feasible as part of an integrated Corteva today.

Looking forward, the prospects of plant genetics are almost limitless. Perhaps it's not surprising to say that we know more about crop genetic science today than any other time in human history. The application of AI tools will give us the ability to accelerate new innovation, which when combined with advanced genetics could unlock new opportunities across numerous species.

This is why we believe that the continued success of SpinCo will be predicated upon sustained investment in advanced genetics. That is unlocking a plants genetic code to unleash previously unreachable breakthroughs to accelerate the pace of innovation. And as a pure-play crop genetics company, SpinCo could go beyond its corn and soybean core into other row crops, even expanding into other areas like fruits and vegetables.

SpinCo will also look to expand on new opportunities in wheat, cotton, rice and other products where genetics can play a transformative role. In other words, we could see SpinCo playing in a vastly expanded addressable market. All of this on top of its unrivaled direct route to market will lead SpinCo to deliver its next phase of above-market innovation-driven growth and shareholder returns.

While there are benefits to an integrated or technology systems approach like we have today with Enlist, when we look ahead 10 or 15 years after the current systems evolve into next-generation solutions, the future looks different. We believe tomorrow systems will be open or multi-source licensing agreements with multiple modes of action.

Farmers will need these systems due to rapidly growing crop resistance and environmental challenges, insects, weeds, disease and so on, presented by changing weather patterns. And as we noted earlier, farmers want choices. In other words, integration is no longer a prerequisite or a predictor of success. The facts on the ground have changed such that we believe it may actually constrain long-term value creation.

And now I'd like to spend a little time on the future of each company. Again, let's start with New Corteva. A pure play New Corteva will be a global leader in differentiated sustainable crop health solutions that help farmers protect yields. Today, it is #4 in the global CP market with one of the broadest and deepest portfolios in the industry and home to one of the largest biological businesses in the world. Biologicals continue to be the fastest-growing segment in the Crop Protection market.

And as you know, is one of our growth platforms. We anticipate $1 billion in revenue by the end of the decade, essentially doubling the size of our biologicals business. Today, New Corteva boasts a $9 billion pipeline and launches more than 150 new products every year. Its current pipeline includes new blockbuster molecules like Haviza, for which we're targeting a 2026 launch and anticipating peak revenue of more than $0.5 billion.

This is a differentiated novel fungicide that will help soybean farmers in Brazil, combat Asian soybean rust. A multibillion-dollar pest problem there. Our existing CP business has been ahead of the curve over the past 6 years, anticipating and successfully navigating shifts in trends in the market.

As a result, our EBITDA margins have increased 180 basis points since 2020, while many of our peers have seen margins decline in the same period. Looking ahead, given the realities of the regulatory landscape, life cycle management and overall competitiveness of the market, New Corteva will need to intensify its cost focus in order to accelerate performance while continuing to innovate. This calculus is more easily achieved in a stand-alone company structure.

Finally, as a stand-alone company, New Corteva could very well have the best balance sheet in the CP industry. Its capital allocation priorities and targeted investment-grade credit rating will fit a business model designed to deliver consistent growth over time and support future capital needs, including organic investment and differentiated technology and advanced sustainable solutions as well as disciplined accretive M&A focused on expanding positions in high-value markets.

For SpinCo, simply put, it's the best seed business in the world. I'd like to think of it as a red diamond of agriculture, a true rare jewel. Pioneer's century-long track record is unmatched in the industry, thanks in large part to its unique germplasm and century of breeding expertise. And SpinCo continues to expand in market positions to its full-service retail brand, Brevant, regional anchor brands and growing out-licensing business. SpinCo is and will continue to be a classic growth compounder with a direct channel that quite honestly can't be replicated.

Its performance since 2020 has been nothing short of exceptional. A 16% EBITDA CAGR and over 1,000 basis points of margin expansion. This is due not only to demand for its technology but how effective this business has been in holding down costs, cutting where it needed to cut, investing only when it was smart to invest.

So the business today already stands apart, especially given the scarcity of genetics players with global reach, and we're now taking this a step further to make it the only pure-play global company singularly focused on advanced crop genetics. This business today strives to be first or a strong second in every market it participates in. And in the most important market, it has already achieved that goal, but the strong foundation it has in corn and soybeans, it's that much easier to expand into other targeted markets in the future.

SpinCo is already a leader in gene editing, which promises to be one of the most transformative technologies our industry has ever seen, a position that should allow it to expand its offerings beyond row crops. An example of our advanced genetics capability is our new hybrid wheat technology. Corteva scientists crack the genetic code in ways no one else could. And as a result, this new offering will launch in 2027.

This hybrid wheat technology is expected to increase yields by 10% to up to 20% to start with, which will have significant impact for both farmers and the world's wheat supply. We believe that this is a multibillion-dollar revenue opportunity for SpinCo another profitable option for farmers and a meaningful step towards global food security.

SpinCo's commitment to being an industry leader in advanced genetics and capturing market share in areas like out-licensing, gene editing, hybrid wheat and biofuels will require disciplined capital allocation priorities, including targeted M&A opportunities in high-growth segments, which we expect will further maximize returns to shareholders.

Both companies will continue to be well positioned to capitalize on the growing demand for food and energy, notably grains, oilseeds and biofuels and for the top-tier technologies that help farmers maximize and protect yield, sustainability, crop health, all despite tough environmental pressures. From an organizational perspective, the employees of both companies will benefit from businesses unified by a single vision with a focused strategy and priorities, unhindered by other considerations. Decision-making and other processes should get simpler and faster, meaning both companies are able to be nimble and move more quickly.

We believe that what was true 6 years ago will not be true 6 years from today, and this company has a mandate to evolve ahead of the market, moving before it does. We strongly believe that in the long term, the value of these businesses are able to create for our shareholders as 2 stand-alone companies will be greater than the value, we would be able to create as an integrated company.

As we noted, the 2 new companies will each have tailored capital allocation strategies designed to maximize growth and value creation, supported by investment-grade credit ratings. The strong balance sheet position that Corteva prides itself on today will be passed on to both new companies. Both companies will be built for growth, and both will have distinct corporate currencies, allowing them to make long-term capital decisions, which will allow them to continue to lead the industry.

Finally, we announced this morning that upon separation, Greg Page, our current Chair, will become Chair of New Corteva, while I will become CEO of SpinCo. These moves reflect the Board's intention to ensure both companies have continuity and leadership in that each benefit from our respective experience and expertise. We will announce the remainder of the top leadership positions in the coming months.

In closing, let me summarize this discussion in the transaction at a high level. We intend the separation to qualify as a tax-free spin-off for U.S. tax purposes and are proceeding accordingly with the Form 10 registration process with the SEC. As mentioned, we are targeting capital structures that maintain investment-grade credit ratings for both companies, they are both expected to have ample discretionary cash flow to invest in organic growth, return capital to shareholders and consider strategic M&A transactions.

Legacy liabilities, including the historical DuPont pension plan and our PFAS obligations will be retained by New Corteva as part of the transaction. As it pertains to recent coverage of possible new Crop Protection product liability contingencies, I can confidently say there is nothing new here. We're expecting low separation complexity, which should minimize disruption across the organization over the coming months.

This is due in part to the investments we made over the past several years including New Corteva's ERP system. As a result, we expect the impact of dis-synergies to be manageable. Our current estimates are somewhere in the range of $80 million to $100 million. In particular, we believe any commercial dis-synergies associated with today's integrated model will be neutralized or offset by an unencumbered focus on each company's respective channel and strengthen relationships they will have with their industry partners.

We expect the separation to be completed in the second half of 2026. Finally, we believe both new companies have earned their place in the market and that the value they create will accrue to shareholders, farmers and society at large. I often say that our future will be even brighter than our past. I have never felt more strongly about that than I do today. Thank you, and I'll turn the call back over to Kim.

Thanks, Chuck. Now let's move on to your questions. I would like to remind you that our cautions on forward-looking statements and non-GAAP measures apply to both our prepared remarks and the following Q&A. Operator, please provide the Q&A instructions.

[Operator Instructions] And our first question comes from the line of Chris Parkinson with Wolfe Research.

Awesome. Chuck, you hit on this $80 million to $100 million of potential estimated dis-synergies. Can you just break those down between how your thought process evolves on the R&D side versus what I'd characterize as more of the commercial side? And what would you say to those who say, oh, my gosh, you have to have Seed and Crop Protection chemicals together because that's in the gold standard. I mean what would you -- what would your kind of defined response be?

Chris, this is David. I think I will handle the $80 million to $100 million, and then maybe Chuck can follow up. But it's just an initial estimate? I mean we've done a lot of benchmarks, and we started doing some work. And as you can imagine, costs like corporate costs, perhaps some commercial management costs on and so forth, we baked into the $80 million to $100 million.

I will say that we are going to look to manage that number as closely as possible. As we work on [ org ] designs that are specific for each business. We will be very cognizant of making sure we're as efficient as possible and look to minimize this impact. And probably the other most important thing for at least the '26 outlook, is we have incorporated that into our outlook. So the $4.1 billion would include any of these additional costs at this point in time.

Yes. Chris, let me just take the integration question. So look, fair point, certainly, there are benefits to having an integrated model, especially when it comes to Seed and CP. But we all know that no structure or business model is perfect and there's always trade-offs, right? The 2 areas where we've invested the most time and I'd say, resourcing for our integrated model is really on technology. You said R&D today and commercially.

So if you think about technology, it's pretty interesting, right? Because if you -- the perfect example we can give you is Enlist. And by every dimension, it's been a success. It's $2 billion of revenue. But that was created, if you -- if I can take you back, that was created by 2 companies down another company, right? So it's been a while since we've had invention inside of one company to do technology integration the way it's been done.

In fact, we think that there are more opportunities because the market and the way resistance issues are just escalating exponentially around the world, we're going to need to have more collaborations and partnership more than we've ever had before and these systems are going to become what I call open source or multi-modes of action.

And let me just take you to the next generation for Corteva, right? So the next generation for soybeans is HT4. We haven't named it officially yet. And it is the combination of Corteva and others technology, and that will launch in the early 2030s. So think about that for a minute. We've already made and decided on the next technology platform that will take us out 15 years. And that is a system that because of resistance issues is multi-company and multimode of action.

So when I look at this, I don't see any downside around -- in fact, I see more upside around having more collaborations in the industry on technology as long as the science is sound. So then if you fast forward and you think through the commercial integration, this is an area where I would say for Corteva, we've been at this for 6 years. And so we've got a lot of experience on what works and what doesn't. And I'd say today, we're basically at an inflection point where most of our markets are still separate commercially, especially our large markets, for example, in the U.S., we don't have a lot of overlap in our sales force.

And if you look at the Pioneer agency model, it's actually a pretty small percentage that actually sell CP. And there's reasons for that, right? If you think about CP and Seed, just put everything on the table, these are fundamentally different businesses, they have different technologies. Their channels to market are very different. CP primarily goes through the retail distribution channel and Seed go through multichannels, but primarily direct and then look at their supply chains, right?

CP is a global supply chain where scale and size matters. And in Seed, the regional supply chains because we're talking about biology. So when we put it all together, and we've studied this very rigorously, the Board has went through a fulsome process here. When we look ahead to the future and what both of these companies need to do to be successful, we feel that there are more benefits for having 2 publicly traded companies in having an integrated model.

Your next question comes from the line of Vincent Andrews with Morgan Stanley.

Chuck, thank you for all the comments. I think you addressed a lot of the things investors have been asking about over the last week or so. One thing that you could touch on a little bit, though, is the timeline on the Spin. The second half of 2026, depending on how you want to think about it, is less than a year away or a little bit more than a year away, which is a faster timeline than a lot of spins.

So can you talk to what's going to allow you to do that and your confidence in achieving that timeline? And maybe if you have, at this moment, any idea of what the goalpost on that will be in terms of getting Form 10s out and so forth?

Yes, Vincent, this is David. I think I'll start and then maybe Chuck will follow up. But we are starting the Form 10 process right now. So we will give you an update as to when that's actually going to be probably in the early part of 2026. Probably the one reason why we have in the accelerated timeline is just all the work that has been done previously.

So when you look at typical spend, some of the longer lead time items would be things like legal anti separation, system separation and so on. Over the last 3-plus years, we've invested in a new system primarily for the CP business. So the CP business, other than biologicals is all on one ERP brand-new system. And at the point in time when we implemented that system, we also had to split the legal entities.

So a lot of those things that would typically take a long time in the separation have primarily been done. And as Chuck said, some of our channels and commercial teams are somewhat separate already today.

Our next question comes from the line of David Begleiter with Deutsche Bank.

Chuck, Seeds will be a pretty unique business from a publicly traded standpoint. How did you and your team go about looking at peers and comparable companies in trying to assess the value of a publicly traded Seed business.

David, it's a good question. And I'd say we're still at fairly early stages. But when we did look at the phrase, I used was growth compounders in the prepared remarks, I think our Seed business lines up almost perfectly, right? So if you think about this business, first of all, there is a scarcity premium for it.

It's really one of a kind when it comes to having the genetic science capability that it has with the global reach. And so that is, I think, very interesting, I think, for shareholders. If you look at how it's grown double-digit CAGR EBITDA over the last 5 years is pretty impressive. Its free cash flow generation will be very strong, so I think when we look at -- and then of course, if you look at EBITDA margins, I think when you line all of that up, this will be a business that will have quite a bit of scarcity value and perform against those metrics.

Now look, the story here, though, and I just want to reiterate because I think it's important, is when you start thinking about what happened over the last 6 years with Corteva, we have seen our multiple increase but we've been at it for 6 years. And it's taken some time because shareholders needed to see sort of how the company would perform across and through different market environments and also to see a track record of execution.

So when I look at both businesses, I know your question was centered on the Seed business but when I look at both businesses, they both have very similar characteristics when it comes to growth opportunities, and they have meaningful self-help levers, and they both have very solid innovation pipelines. I think their path to success are going to be slightly different. That's why we're talking about separation.

But the value pools that each will access, I think, are large. And so what we think will happen is, over time, we have to execute well, tell the story about what each is going to need to be successful longer term. But we do think over time, the market will come to understand that and value it.

Our next question comes from the line of Kevin McCarthy with Vertical Research Partners.

Chuck, can you comment on what intercompany agreements you might envision? I'm just thinking about whether or not you need to do anything with regard to Seed treatments, transition services agreements or other agreements that shareholders should be keeping in mind, at least any preliminary thoughts there would be helpful.

Yes. Kevin, there's a lot of work underway actually right now in that specific regard. And I think at the right point, we'll be able to give you a more fulsome lift. But the areas where I've called out that we do have some integration those make the most sense to have some sort of ongoing relationships so that we don't destroy value.

And the best examples I can give you there will most likely be in the biologicals area. So biologicals, the business itself is going to go to New Corteva. So think about the CP business. But there's a lot of really interesting research and development and technology evolvement in -- that will require both. So there will be most likely an R&D partnership of some type. And when I look at the pipeline in biologicals, it's super impressive.

We have more than a dozen new products in the pipeline that we want to make sure come to market because farmers will need access to that. And so that's one area. You called out the other one, Seed Applied Technologies. So that is a Crop Protection business. It's slightly over $0.5 billion today in revenue and the largest customer, of course, is our Seed business.

And so there'll be an arrangement there that we think we can put with a simple commercial agreement. But again, when I look at it and I look forward, I think then our CP business will actually have more opportunity to sell it to Seed Applied Technology to other seed companies, and there are hundreds of them around the world.

And so I think that this will open up doors for our Crop Protection business, but still allow our Seed business to have access to some great technology.

Our next question comes from the line of Joel Jackson with BMO Capital Markets.

[Technical Difficulty] a question, Chuck, obviously, you and the team have looked at quantitatively some of the parts, what a split could do. I mean you've laid out the different futures, the divergent future of the 2 businesses. But how do you justify the math on the new companies when -- could you not have achieved the things you wanted inside of the current bundled company as opposed to trying to create value by splitting it and taking a bit of a risk and some costs on what the new multiples on the new stand-alones might be?

Yes. So look, I think you have to remember why we're doing this. So when I look at the market today, the formula that we've had, I think, has been the right formula for the time. And over time, I think we've seen our multiple expand, and we have created value that way.

This is not about today, and it's not certainly about the last 6 years. This is about what we see coming. And when I look at the future, and you have to remember, right, our development time lines are long, right? We're in a market that we need to look out 10 years plus. That's just the research and development and the time line it takes to bring technology into the marketplace.

So this is a long-term decision that we are making. But when I look at it and if you just start looking at the parts, so if you look at New Corteva, to me, it's one of the best Crop Protection businesses out there. Today, it's #4 in the world. It has one of the largest biologicals businesses and a strong innovation pipeline. I referenced $9 billion.

And in the markets that we've just went through, which have been challenging in the Crop Protection industry, this business has outperformed. And so I think that it's going to launch with a position of strength. And then we said we're also going to ensure that it has a very strong balance sheet.

And so it will be able to do things in the marketplace and it will have its own corporate currency, if I can use that phrase, to really use that current, use the balance sheet and its free cash flow, I think, to act strategically. And that's going to take some time, but I think that there is value to unlock in that regard.

Then if you look at our Seed business, I talked already about the scarcity about how special this is. I do think this is a rare jewel in our industry for sure. And what we want to do with that business is, look, if you look at the science of biotechnology and genetic engineering today, we put that really focused on corn and soybeans.

And today, we're a market leader, and we think that tomorrow, we're going to still remain a strong competitor in those areas. And our pipeline would reflect that. But now we're trying to open up new addressable markets, and that's going to take us to require to allocate capital slightly differently.

And so this business will probably headed down a different path. So could all of this be done together, we don't think so. And then if you think about the global Crop Protection market, nothing I'm going to say here should be new to you, but the market has been competitive, and it's been well supplied. And we think that, that is going to continue. Now we still think that the market will return to growth. We've been clear with that.

But what the New Corteva business will need to do is take another level of productivity and cost efficiency. And that will be more difficult to do inside of our corporate structure today. So when we look at all the pros and cons and we weigh the balance of risk, it becomes very clear when we fast forward through the next 5 or 6 years that putting these 2 companies on their own paths for value creation will be the right path to go forward.

And there's always risk with these transactions but as David highlighted, the ERPs are already separate. The legal entities more or less are already separate. And a lot of the internal operations are already separate. So from a complexity perspective, nothing is risk free, but when we balance the risk scale, we are certain that we're making the right decision this morning.

Our next question comes from the line of Matthew DeYoe with Bank of America.

Yes. It's [indiscernible] filling in for Matt. Just wanted to ask a little bit on gene editing because that's been the trend where there have been expectations it could actually weigh on PE growth as you use that as a tool to fight diseases. And from what I recall, Corteva's response in the past couple of years has been that being an integrated company, you were best equipped to decide what are the most value for.

I guess, you and the farmers, meaning, in some cases, you will decide to fight the disease through continued R&D in -- for pesticides, in some cases, you would decide to shift that to gene editing like you do with your new seeds here. So how will this play out actually when there are 2 separate companies?

And how can the 2 companies avoid cannibalization essentially and competition where they'll both go after the same pathogens, but with 2 different types to fight them?

Well, I think what will naturally happen, whether we are together or separate, I think the best technology will win. And that's the way this industry has always -- it's always been in this industry. And so I really see no change. If you think about what we're trying to accomplish with gene editing, it's always started with if there is a problem, a disease and insect some sort of pressure that a farmer is feeling on a crop, the best solution, the most efficient solution is to attempt to design a seed that can withstand it.

And we've been very clear with our messaging that gene editing is going to open up a different level of toolkit for our scientists to try to do that with seed genetics. But when that is not possible, and there is disease-resistant issues or movement around the world from climate change, then we revert back to looking at both chemical and biological solutions. And I don't see any change here.

So when we get the freedom to operate from a gene editing perspective, I think what you'll see is SpinCo scientists will do their very best to use that technology to design the next generation of seed. But look at biotechnology. Biotechnology has been out there for 25 years to more than that, and we are still using more Crop Protection today than we ever have.

Why is that? The seeds are clearly better, but because we're racing up against mother nature. And that's what we expect will happen. So my view is that both will have to head down an R&D differentiation of technology. Both will be needed for farmers. And so this does not change that perspective. And in my view, because there'll be 2 separate companies, they may even have more collaboration and partnership opportunities because they're separate.

Our next question comes from the line of Joshua Spector with UBS.

This is Lucas Beaumont on for Josh. So I mean, one of the primary investor concerns here has really just been on the potential for the existence of hidden not currently recognized liabilities in the existing business that's going to come out as part of this process over time that's potentially driving the move.

So I mean, it looks like anything there would go to the CP business, New Corteva as that's retaining sort of the legacy business and liability structure. I guess, can you just explicitly confirm for us that there's no surprises coming here?

Yes. So this is David. So yes, definitely. So there are no surprises on the CP product liability contingencies, as Chuck earlier commented on. I think for us; it's a strong industrial logic as to why we're doing the separation. When you look at the litigation as it stands today, we expect our CP obligations will stay with CP along with the historical DuPont pension plan and our PFAS obligations.

Seed obligations will stay with Seed. So today, when you look at these obligations around the DuPont pension and PFAS, they're in Corteva today and they will remain in new Corteva in the future.

Our next question comes from the line of Duffy Fischer with Goldman Sachs.

So just a couple of questions around CP. So one, do you think this move would allow another round of consolidation in CP. Obviously, the EU blocked one round of consolidation when DowDuPont happened in the spin stuff that FMC. So does that get better?

And then two, just when you look historically, I would argue your CP business has piggybacked off of seeds pretty significantly over the last decade. You're creating a #4 company if you go back and it's a little outdated to the GE you always got in the top 3, do you see a line of sight for this business to become top 3 without consolidation and if not in kind of a business that's becoming more generic and more Chinese driven over time, how does the #4 guy compete?

Yes. So look, difficult to say on whether we'll see another wave of consolidation. And I will just be explicit. It's not really the primary driver of our separation. But if you look at the global Crop Protection industry, there's been a lot of shifts over the last 5 years, right? The market is well supplied. You referenced it.

We have low-cost producers now in China and it's a competitive market. Nothing I'm saying should be a surprise to you. When we fast forward, okay, so what do we think is necessary and needed to be successful. We're going to need global reach and scale we're going to need very low cost, so cost competitive will be even more important in the future.

But the market still values differentiation. And that is an important, I think, statement I'd like to make, but partnerships and collaborations, I think, will become mission critical. And why do I say that? I don't think -- because of the regulatory time lines and the expense to bring new actives into the market now, not all CP companies can be all things to all customers.

They're going to have to make capital decisions and make bigger bets because it's so expensive to bring new technology into the market. And so can consolidation help with that? Yes, I think it can. So to your question about our business, when I look at the last 5 years, what is our business done?

Our CP business has increased margins by almost 200 basis points. And how have they done it, right? They've taken out significant costs, and they've really moved towards more differentiation. And I think if you compare that to others in our industry, who probably has sizable margin compression. So I think the business, its formula that it has today is a success.

And going forward, if we give that business a very good balance sheet and its ability to generate solid free cash flow, I think it will determine its own future when it comes to how it wants to participate in the market but I'll say that it will have a lot of strategic opportunity.

Our next question comes from the line of Frank Mitsch with Fermium Research.

I'm curious, coming back to the legacy liability questions and putting it all on New Corteva, we just saw DuPont is planning on splitting up, forming 2 companies, and they are going to split their legacy liabilities equally according to EBITDA.

I'm curious as to why that route wasn't chosen. I mean, admittedly, Corteva's combined EBITDAs are modestly higher than DuPont's, but I'm just curious as to why the decision was not made to split the legacy liabilities between the 2 new pending entities.

Yes. So this is David. I'll answer that question. I think the short answer is because we don't really have to. If you look at our MOU and our separation agreements, there are provisions for separation. And in those provisions for separation, there are minimum EBITDA levels.

And so when you look at what those EBITDA levels are, the New Corteva EBITDA levels will be above those minimum EBITDA levels. So there's really no reason to split them. As we also feel like it's easier as one entity to manage those liabilities versus 2 entities.

Our next question comes from the line of Jeff Zekauskas with JPMorgan.

Just for purposes of clarification. So New Corteva will have no claim on the cash flows of SpinCo for the satisfaction of any of PFAS liabilities, nor will DuPont as you've structured it?

I think that would be the intention, yes. I think as Chuck mentioned and we mentioned in our opening comments, we're in a fortunate position that our balance sheet strength right now will be allocated and we'll have flexibility to make sure that both companies have an ample cash flow and strong balance sheet, investment grade to meet their future obligations.

Yes. I think that just to be simple with this is that the CP obligations that we have today will remain with New Corteva, including the historical DuPont pension and PFAS liabilities. We can do that because the size of the EBITDA and free cash flow that the company will generate meets the agreement intention and then the seed obligations that we do have will remain in Seed.

And so that's how these companies when we do separate how they'll be responsible for their respective liabilities.

Our next question comes from the line of Edlain Rodriguez with Mizuho.

I mean my recollection might be wrong. But if I remember that from your time at Agrium like you believe it made sense to have retail and wholesale business because you believe in the whole synergistic combination of the businesses. Like why is that -- why is this one so different that you don't believe that the farmers value having both businesses as a one-stop shop.

Look, you're going way back in history, and I guess I would just say, I think, going forward, when I look at the markets, the future of agriculture is going to get more high technology. I do believe that when I think through where I think both CP needs to go to be successful and where the Seed business needs to go successful, they're on -- clearly on different paths.

When you think about what CP is dealing with right now and where that will go, you're going to need to be very low cost, super-efficient world-scale production with these global supply chains that can innovate and that can innovate and partner to get the product into market. The patent lives are getting less and less so you have to go big very quickly.

All of this leads me down the path of that this business is going to just have more optionality separate, whereas with Seed, I think where we're going to take it is -- it's going to be a crop genetics company that we're going to use the science in terms of gene editing, biotechnology to really take this to the next level of seed design.

And so those paths are just distinct and different. And then when I look inside of the corporate structure that we've built, as I've said, we're running 2 essentially separate businesses today, and that has -- it's a bit cumbersome and it has some efficiencies.

And the only way to unlock that efficiency is to separate them. Your reference back -- I'll just take you back to where you referenced, what we're talking about is almost a decade ago, right? And agriculture and the agriculture markets have evolved substantially from that period of time.

So much so to the point where, yes, I do believe differently than I did a decade ago.

Our next question comes from the line of Aleksey Yefremov with KeyBanc Capital Markets.

I wanted to follow up on the commercial side. What percent of your sales force now overlap and sell both CP and Seeds in terms of headcount or dollars spent? And how would that have to be changed?

Yes. So a very small amount. It depends around the world in -- for example, in the U.S. they are essentially separate sales organizations and then, of course, we have the Pioneer channel. And then around the world, I'd say the area that we have the most integration would most likely be in some of the markets in Latin America.

And then the rest of the world is sort of somewhere in between those 2 bookends. But none of this is something that can't be done either commercially through co-selling agreements or with direct sales organizations. It's been contemplated into the dis-synergy number. So the $80 million to $100 million just by that sheer number alone when we've looked at market benchmarks is sort of on the low end of what it would take.

And so you can see that from a commercial dis-synergy perspective, there's not really a lot of incremental costs that we're going to have to undertake to properly put these businesses into the market.

And our final question comes from the line of Laurence Alexander with Jefferies.

This is Daniel Rizzo on for Lawrence. I don't know if I missed this, but with the royalty revenue stream that was going to become positive within a few years, I was wondering how that's going to be split between the 2 companies.

It will not be. The royalty is all Seed. So when we talk about our journey to royalty neutrality, which we should hit somewhere around 2028 we are only talking about our Seed royalty. And so that will not be split.

I will now hand the call back over to Kim Booth for closing remarks.

Great. Well, that will conclude today's call. We thank you for joining and for your interest in Corteva. And we hope you have a safe and wonderful day.

Thank you again for joining us today's -- on today's presentation. You may now disconnect.