Item 1. FINANCIAL STATEMENTS

Qnity Electronics, Inc.

Consolidated Statements of Operations (Unaudited)

			Three Months Ended June 30,						Six Months Ended June 30,
In millions, except per share amounts			2026			2025			2026			2025
Net sales			$	1,429		$	1,170		$	2,744		$	2,288
Cost of sales			763			630			1,460			1,217
Research and development expenses			98			88			192			172
Selling, general and administrative expenses			200			154			373			294
Amortization of intangibles			50			50			102			105
Transformation, integration and other charges (Note 4)			42			2			70			19
Equity in earnings of nonconsolidated affiliates			11			13			24			22
Interest expense			61			—			122			—
Other income (expense) - net			(27)			(4)			(32)			(2)
Income before income taxes			$	199		$	255		$	417		$	501
Provision for income taxes			63			57			119			104
Net income			$	136		$	198		$	298		$	397
Net income attributable to noncontrolling interests			12			10			23			16
Net income available for Qnity common stockholders			$	124		$	188		$	275		$	381
Per common share data:
Earnings per common share - basic			$	0.59		$	0.90		$	1.31		$	1.82
Earnings per common share - diluted			$	0.59		$	0.90		$	1.31		$	1.82
Weighted-average common shares outstanding - basic			209.5			209.4			209.6			209.4
Weighted-average common shares outstanding - diluted			210.2			209.4			210.3			209.4

See Notes to the Consolidated Financial Statements.

Qnity Electronics, Inc.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

			Three Months Ended June 30,						Six Months Ended June 30,
In millions			2026			2025			2026			2025
Net income			$	136		$	198		$	298		$	397
Other comprehensive (loss) income, net of tax
Cumulative translation adjustments			(6)			176			(58)			232
Pension benefit plans			—			1			(1)			(1)
Total other comprehensive (loss) income			$	(6)		$	177		$	(59)		$	231
Comprehensive income			$	130		$	375		$	239		$	628
Comprehensive income attributable to noncontrolling interests, net of tax			11			15			20			24
Comprehensive income attributable to Qnity			$	119		$	360		$	219		$	604

See Notes to the Consolidated Financial Statements.

Qnity Electronics, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

In millions			June 30, 2026			December 31, 2025
Assets
Current Assets
Cash and cash equivalents			$	961		$	915
Accounts and notes receivable - net			1,138			992
Inventories - net			730			661
Prepaid and other current assets			67			70
Total current assets			$	2,896		$	2,638
Property, plant and equipment - net of accumulated depreciation (June 30, 2026 - 1,511; December 31, 2025 - 1,450)			1,777			1,701
Other Assets
Goodwill			7,518			7,522
Other intangible assets			1,015			1,111
Investments and noncurrent receivables			427			402
Deferred income tax assets			38			42
Deferred charges and other assets			660			654
Total other assets			$	9,658		$	9,731
Total Assets			$	14,331		$	14,070
Liabilities and Equity
Current Liabilities
Short-term borrowings			$	23		$	24
Accounts payable			790			680
Income taxes payable			120			150
Accrued and other current liabilities			509			502
Total current liabilities			$	1,442		$	1,356
Long-Term Debt			3,997			4,003
Other Noncurrent Liabilities
Deferred income tax liabilities			228			273
Pensions and other post-employment benefits - noncurrent			80			80
Other noncurrent obligations			1,038			992
Total other noncurrent liabilities			$	1,346		$	1,345
Total Liabilities			$	6,785		$	6,704
Commitments and contingent liabilities (Note 13)
Stockholders' Equity
Common stock (authorized 1,666,666,667 shares of $0.01 par value each; issued 2026: 209,334,927 shares; 2025: 209,479,173 shares)			2			2
Preferred stock (authorized 1 share of $1.50 million par value each; issued 2026: 1 share; 2025: 1 share)			2			2
Additional paid-in capital			7,266			7,286
Retained earnings			260			18
Accumulated other comprehensive loss			(269)			(213)
Total Qnity equity			$	7,261		$	7,095
Noncontrolling interests			285			271
Total equity			$	7,546		$	7,366
Total Liabilities and Equity			$	14,331		$	14,070

See Notes to the Consolidated Financial Statements.

Qnity Electronics, Inc.

Consolidated Statements of Cash Flows (Unaudited)

			Six Months Ended June 30,
In millions			2026			2025
Operating Activities
Net income			$	298		$	397
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment			93			81
Amortization of definite-lived intangible assets			102			105
Stock-based compensation			25			8
Credit for deferred income tax and other tax related items			(30)			(29)
Net gain on sales of assets			(5)			—
Restructuring and asset related charges - net			—			19
Net periodic pension benefit cost			2			3
Periodic benefit plan contributions			(3)			(2)
Earnings of nonconsolidated affiliates less dividends received			(24)			(22)
Other net loss			14			—
Changes in assets and liabilities:
Accounts and notes receivable			(152)			(28)
Inventories			(77)			(41)
Other assets			(13)			(4)
Accounts payable			134			48
Accrued and other current liabilities			(10)			(28)
Other noncurrent liabilities			44			16
Income tax liabilities			(22)			(43)
Cash provided by operating activities			$	376		$	480
Investing Activities
Capital expenditures			(212)			(153)
Proceeds and adjustments to proceeds from sales of property and businesses, net of cash divested			6			—
Other investing activities, net			1			—
Cash used for investing activities			$	(205)		$	(153)
Financing Activities
Repayments on long-term debt			(12)			—
Repurchases of common stock			(50)			—
Employee taxes paid for share-based payment arrangements			(7)			—
Distributions to noncontrolling interests			(6)			(8)
Dividends paid to stockholders			(34)			—
Net transfers to Parent			—			(322)
Cash used for financing activities			$	(109)		$	(330)
Effect of exchange rate changes on cash and cash equivalents			(16)			16
Increase in cash and cash equivalents			$	46		$	13
Cash and cash equivalents at beginning of period			$	915		$	166
Cash and cash equivalents at end of period			$	961		$	179

See Notes to the Consolidated Financial Statements.

Qnity Electronics, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

For the three months ended June 30, 2026 and 2025

In millions			Common Stock			Preferred Stock			Additional Paid-in Capital			Retained Earnings			Parent Company Net Investment			Accumulated Other Comp (Loss) Income			Non-controlling Interests			Total Equity
Balance at March 31, 2025			$	—		$	—		$	—		$	—		$	11,146		$	(363)		$	256		$	11,039
Net income			—			—			—			—			188			—			10			198
Other comprehensive income			—			—			—			—			—			172			5			177
Distributions to noncontrolling interests			—			—			—			—			—			—			(3)			(3)
Net transfers to Parent			—			—			—			—			(213)			—			—			(213)
Balance at June 30, 2025			$	—		$	—		$	—		$	—		$	11,121		$	(191)		$	268		$	11,198
Balance at March 31, 2026			$	2		$	2		$	7,276		$	170		$	—		$	(264)		$	275		$	7,461
Net income			—			—			—			124			—			—			12			136
Other comprehensive loss			—			—			—			—			—			(5)			(1)			(6)
Dividends ($0.08 per common share)			—			—			—			(34)			—			—			—			(34)
Stock-based compensation			—			—			13			—			—			—			—			13
Common stock repurchased			—			—			(25)			—			—			—			—			(25)
Separation-related adjustments			—			—			2			—			—			—			—			2
Other			—			—			—			—			—			—			(1)			(1)
Balance at June 30, 2026			$	2		$	2		$	7,266		$	260		$	—		$	(269)		$	285		$	7,546

See Notes to the Consolidated Financial Statements.

Qnity Electronics, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

For the six months ended June 30, 2026 and 2025

In millions			Common Stock			Preferred Stock			Additional Paid-in Capital			Retained Earnings			Parent Company Net Investment			Accumulated Other Comp (Loss) Income			Non-controlling Interests			Total Equity
Balance at December 31, 2024			$	—		$	—		$	—		$	—		$	11,058		$	(414)		$	252		$	10,896
Net income			—			—			—			—			381			—			16			397
Other comprehensive income			—			—			—			—			—			223			8			231
Distributions to noncontrolling interests			—			—			—			—			—			—			(8)			(8)
Net transfers to Parent			—			—			—			—			(318)			—			—			(318)
Balance at June 30, 2025			$	—		$	—		$	—		$	—		$	11,121		$	(191)		$	268		$	11,198
Balance at December 31, 2025			$	2		$	2		$	7,286		$	18		$	—		$	(213)		$	271		$	7,366
Net income			—			—			—			275			—			—			23			298
Other comprehensive loss			—			—			—			—			—			(56)			(3)			(59)
Dividends ($0.08 per common share)			—			—			—			(34)			—			—			—			(34)
Stock-based compensation			—			—			18			—			—			—			—			18
Distributions to noncontrolling interests			—			—			—			—			—			—			(6)			(6)
Common stock repurchased			—			—			(50)			—			—			—			—			(50)
Separation-related adjustments			—			—			12			—			—			—			—			12
Other			—			—			—			1			—			—			—			1
Balance at June 30, 2026			$	2		$	2		$	7,266		$	260		$	—		$	(269)		$	285		$	7,546

See Notes to the Consolidated Financial Statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Table of Contents

Note						Page
1			Basis of Presentation			13
2			Recent Accounting Guidance			13
3			Revenue			14
4			Transformation, Integration and Other Charges			16
5			Relationship with DuPont			17
6			Supplementary Information			19
7			Income Taxes			19
8			Earnings Per Share Calculations			20
9			Inventories - net			21
10			Nonconsolidated Affiliates			21
11			Goodwill and Other Intangible Assets			21
12			Short-term Borrowings, Long-Term Debt and Available Credit Facilities			22
13			Commitments and Contingent Liabilities			23
14			Stockholders' Equity			24
15			Pension Plans			25
16			Stock-Based Compensation			25
17			Financial Instruments			26
18			Fair Value Measurements			27
19			Segment Information			28

NOTE 1 - BASIS OF PRESENTATION

Organization and Description of Business

Qnity Electronics, Inc. ("Qnity" or the "Company") is one of the largest global leaders in materials and solutions for the semiconductor and electronics industries. The Company empowers its customers’ technology roadmaps to enable advancements in megatrends such as artificial intelligence, high-performance computing and advanced connectivity. Qnity partners with leading semiconductor and advanced device manufacturers to address complex challenges and develop solutions that facilitate next-generation technological innovations.

Prior to November 1, 2025, the Company was wholly owned by DuPont de Nemours, Inc. (“DuPont” or "Parent"). On November 1, 2025 (the "Separation and Distribution Date"), Qnity was separated from DuPont into an independent publicly traded company (the "Separation") through a pro-rata distribution of one share of Qnity common stock for every two shares of DuPont common stock held at the close of business on the record date of October 22, 2025 (the "Distribution"). As a result of the Distribution, as of the Separation and Distribution Date, Qnity became an independent, publicly traded company, and Qnity common stock commenced trading on the New York Stock Exchange under the symbol "Q" at the start of trading on November 3, 2025.

Basis of Presentation

Prior to the Separation on November 1, 2025, Qnity had operated as a part of DuPont; consequently, stand-alone interim financial statements were not historically prepared for Qnity. For the period subsequent to November 1, 2025, the financial statements are presented on a consolidated basis as the Company became a standalone public company. In the opinion of management, the accompanying unaudited interim Consolidated Financial Statements reflect all adjustments (including normal recurring adjustments) which are considered necessary for the fair statement of the results for the periods presented. The unaudited interim Consolidated Financial Statements include the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. Results from interim periods should not be considered indicative of results for the full year. These unaudited interim Consolidated Financial Statements should also be read in conjunction with the audited annual Consolidated Financial Statements and notes thereto for the year ended December 31, 2025, collectively referred to as the “2025 Annual Financial Statements” as contained in the Company’s Annual Report on Form 10-K (the "Annual Report") filed on February 26, 2026 with the U.S. Securities and Exchange Commission (“SEC”) pursuant to the Securities Exchange Act of 1934, as amended.

Beginning in fiscal 2026, the Company presents costs incurred in connection with a multi‑year transformation plan, designed to strengthen operational productivity, enhance commercial and innovation excellence, and optimize the Company’s presence in key markets, within a single operating expense line titled “Transformation, integration and other charges” in the Consolidated Statements of Operations. The transformation plan does not represent a company‑wide restructuring event; rather, it consists of a series of discrete initiatives, including IT independence and other separation‑related activities, integration efforts, and productivity programs.

Consistent with the update above, we combined our historical “Restructuring and other asset related charges - net” and “Acquisition, integration and separation costs” into the expense caption, “Transformation, integration and other charges” to simplify our presentation and better reflect how management evaluates these activities. Prior period amounts presented in this Quarterly Report on Form 10-Q have been recast to conform to the current period presentation. This change in presentation did not affect total operating expenses, operating income, net income, earnings per share, or cash flows for any period presented.

NOTE 2 - RECENT ACCOUNTING GUIDANCE

Recently Adopted Accounting Guidance

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09") to improve transparency and disclosure requirements for the rate reconciliation, income taxes paid and other tax disclosures. The amendments in ASU 2023-09 are effective for annual fiscal years beginning after December 15, 2024, on a prospective basis. The disclosures were implemented as required for the year-ended December 31, 2025 in the Company's Annual Report.

In December 2025, the FASB issued Accounting Standards Update No. 2025-12, "Codification Improvements", which addresses stakeholders' feedback on the Accounting Standards Codification and makes other incremental improvements to generally accepted accounting principles. Specifically, Issue 10 of ASU 2025-12 added a clarification within ASC 505-30 to provide a policy election to permit the excess of repurchase price over par value in a stock repurchase transaction to be accounted for entirely as a reduction in additional paid-in capital when the repurchased shares are retired. The Company adopted Issue 10 of ASU 2025-12 during the quarter ended March 31, 2026.

Accounting Guidance Issued But Not Adopted at June 30, 2026

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, "Income Statement: Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures" ("ASU 2024-03") to improve disclosures about the nature of expenses within line items on the statements of operations. The amendments in ASU 2024-03 are effective for the Company's 2027 annual report and subsequent interim periods; however, early adoption is permitted. The amendments can be applied prospectively or retrospectively to all periods presented. The Company is currently evaluating the impact of adopting this guidance.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”) to modernize the accounting for internal-use software costs and improve operability of the guidance across different software development project stages. The amendments in ASU 2025-06 are effective for the Company’s 2028 annual and quarterly reports; however, early adoption is permitted. The amendments can be applied prospectively, retrospectively, or using a modified transition approach. The Company is currently evaluating the impact of adopting this guidance.

NOTE 3 - REVENUE

Revenue Recognition

Products

Substantially all of Qnity’s revenue is derived from product sales. Product sales consist of sales of Qnity’s products to supply manufacturers and distributors. Qnity considers purchase orders, which in some cases are governed by master supply agreements, to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year.

Net sales to Samsung Electronics Co., Ltd accounted for 9% and 10% of total net sales for the three months ended June 30, 2026 and 2025, respectively, and 10% of total net sales for the six months ended June 30, 2026 and 2025. Additionally, net sales to Taiwan Semiconductor Manufacturing Company Limited (TSMC) accounted for 8% of total net sales for both the three months ended June 30, 2026 and 2025, and 8% of total net sales for both the six months ended June 30, 2026 and 2025. The majority of revenues for both customers relate to the Semiconductor Technologies segment.

Disaggregation of Revenue

The Company disaggregates its revenue from contracts with customers by segment and geographic region, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows.

Net Sales by Segment			Three Months Ended June 30,						Six Months Ended June 30,
In millions			2026			2025			2026			2025
Semiconductor Technologies			$	744		$	644		$	1,466		$	1,288
Interconnect Solutions			685			526			1,278			1,000
Total			$	1,429		$	1,170		$	2,744		$	2,288

Net Sales by Segment by Geographic Region			Three Months Ended June 30,
2026									2025
Semiconductor Technologies			Interconnect Solutions			Total			Semiconductor Technologies			Interconnect Solutions			Total
In millions
Americas:			$	84		$	101		$	185		$	77		$	83		$	160
United States			84			88			172			76			75			151
Other Americas 1			—			13			13			1			8			9
EMEA 2			55			50			105			51			44			95
Asia Pacific:			605			534			1,139			516			399			915
China			195			283			478			169			219			388
Rest of Asia Pacific:			410			251			661			347			180			527
South Korea			171			31			202			147			27			174
Taiwan			156			66			222			133			44			177
Other			83			154			237			67			109			176
Total			$	744		$	685		$	1,429		$	644		$	526		$	1,170

Net Sales by Segment by Geographic Region			Six Months Ended June 30,
2026									2025
Semiconductor Technologies			Interconnect Solutions			Total			Semiconductor Technologies			Interconnect Solutions			Total
In millions
Americas:			$	162		$	194		$	356		$	143		$	161		$	304
United States			161			172			333			141			146			287
Other Americas 1			1			22			23			2			15			17
EMEA 2			106			101			207			100			87			187
Asia Pacific:			1,198			983			2,181			1,045			752			1,797
China			400			513			913			374			410			784
Rest of Asia Pacific:			798			470			1,268			671			342			1,013
South Korea			335			61			396			287			50			337
Taiwan			307			119			426			254			80			334
Other			156			290			446			130			212			342
Total			$	1,466		$	1,278		$	2,744		$	1,288		$	1,000		$	2,288

1.Includes Canada and Latin America.

2.Europe, Middle East and Africa.

Contract Balances

From time to time, the Company enters into arrangements in which it receives payments from customers based upon contractual billing schedules. The Company records accounts receivables when the right to consideration becomes unconditional. Contract liabilities primarily reflect deferred revenue from advance payment for product that the Company has received from customers. The Company classifies deferred revenue as current or noncurrent based on the timing of when the Company expects to recognize revenue.

Revenue recognized from amounts included in contract liabilities at the beginning of the period were insignificant for the three and six months ended June 30, 2026 and 2025. The Company did not recognize any asset impairment charges related to contract assets during the periods. The Company will begin recognizing its deferred revenue when the project associated with the revenue that was deferred is completed and commercial production begins, currently expected in 2027.

Contract Balances			June 30, 2026			December 31, 2025
In millions
Accounts receivable - trade 1			$	772		$	656
Deferred revenue - current 2			$	3		$	1
Deferred revenue - noncurrent 3			$	44		$	46

1.Included in "Accounts and notes receivable - net" in the interim Condensed Consolidated Balance Sheets.

2.Included in "Accrued and other current liabilities" in the interim Condensed Consolidated Balance Sheets.

3.Included in "Other noncurrent obligations" in the interim Condensed Consolidated Balance Sheets.

NOTE 4 - TRANSFORMATION, INTEGRATION AND OTHER CHARGES

In February 2026, Qnity launched a multi‑year transformation plan designed to strengthen operational productivity, enhance commercial and innovation excellence and optimize the Company’s presence in key markets. Costs incurred under this plan primarily comprise external consulting and separation services, severance, asset‑related charges, and program‑related operating costs.

As further discussed in Note 1, beginning in the first quarter of 2026, the Company combined its historical “Restructuring and asset‑related charges – net” financial‑statement line item with its historical “Acquisition, integration and separation costs” into a single operating expense caption titled “Transformation, integration and other charges.” This represents a presentation change only, and does not represent a change in accounting principle. Consistent with SEC interim reporting requirements, prior‑period amounts presented herein have been recast to conform to the current‑period presentation. Although restructuring is no longer presented as a separate financial‑statement line item, the Company continues to monitor these charges as a discrete component of the new combined operating expense caption.

The following table represents reclassification of prior-period amounts to Transformation, integration and other charges:

Reclassification of Prior-Period Amounts			Three Months Ended June 30, 2025			Six Months Ended June 30, 2025
In millions
Restructuring and asset related charges – net			$	2		$	19
Acquisition, integration and separation costs			—			—
Transformation, integration and other charges (recast)			$	2		$	19

The following table presents the components of Transformation, integration and other charges by major cost category. Amounts include costs recognized under ASC 420 (exit and disposal activities), ASC 712 (compensation – nonretirement postemployment benefits), ASC 360 (asset impairments), and other transformation and integration costs.

Transformation, Integration and Other Charges by Cost Category			Three Months Ended June 30,						Six Months Ended June 30,
In millions			2026			2025			2026			2025
Pre-Separation restructuring programs****1
Severance			$	1		$	2		$	—		$	19
Total Pre-Separation restructuring programs			$	1		$	2		$	—		$	19
Qnity Transformation Plan
IT independence 2			$	24		$	—		$	48		$	—
Transformation initiative charges2			8			—			10			—
Integration and other 2			3			—			6			—
Severance 3			2			—			2			—
Asset related charges 4			4			—			4			—
Total Qnity Transformation Plan			$	41		$	—		$	70		$	—
Total Transformation, integration and other charges			$	42		$	2		$	70		$	19

1. This activity represents charges and credits related to DuPont-approved restructuring programs initiated prior to the Separation.

2. Charges primarily consist of external advisory services, professional fees, program management costs, internal program labor, and other operating expenses that are incremental and directly attributable to the Company’s transformation and separation activities. Internal program labor represents payroll costs for employees predominantly dedicated to the transformation and separation initiatives and reflects costs that are incremental to the Company’s normal operating activities.

3. Severance costs represent employee‑related termination benefits associated with workforce actions taken under the Company’s transformation plan, which are intended to drive structural cost reductions and operational efficiencies.

4. Asset related charges represent non-cash charges associated with the write-off or impairment of assets no longer expected to provide future economic benefit as a result of the Company's transformation initiatives.

Refer to Note 19 for the disaggregation of Transformation, integration and other charges incurred by segment. The Company expects the majority of the remaining cash outflows of the program to be incurred in the next two years.

Exit and Disposal Activities

Qnity Transformation Plan

The Company incurred severance and asset-related charges associated with organizational redesign actions under its transformation plan in the amount of $2 million and $4 million, respectively, for both the three and six months ended June 30, 2026. These actions are part of the Company’s multi-year initiative to improve operational efficiency and optimize its cost structure and are distinct from the DuPont-approved restructuring programs discussed below. The severance-related costs are expected to be primarily cash expenditures, while the asset-related charges are non-cash in nature. The severance-related cash payments are generally expected to be made within 12 months of recognition. The total liability associated with these exit activities was $2 million as of June 30, 2026, recorded in “Accrued and other current liabilities” in the interim Condensed Consolidated Balance Sheets.

Pre‑Separation restructuring programs

Exit and disposal activities charges were $1 million and $2 million for the three months ended June 30, 2026 and 2025, respectively, and charges of zero and $19 million for the six months ended June 30, 2026 and 2025, respectively. The entirety of these amounts relates to DuPont‑approved restructuring programs that were initiated prior to the Separation. The total liability associated with these exit activities was $2 million as of June 30, 2026, recorded in “Accrued and other current liabilities” in the interim Condensed Consolidated Balance Sheets.

NOTE 5 - RELATIONSHIP WITH DUPONT

Prior to the Separation, Qnity had been managed and operated in the normal course with other businesses of DuPont. Accordingly, certain shared costs had been allocated to Qnity and reflected as expenses in the stand-alone Consolidated Financial Statements. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the pre-Separation expenses attributable to Qnity for purposes of the stand-alone financial statements. The expenses reflected in the Consolidated Financial Statements may not be indicative of expenses that will be incurred by Qnity in the future. All transactions with DuPont prior to the Separation approximate prices at cost.

Corporate Expense Allocations

Qnity’s Consolidated Statements of Operations for periods prior to the Separation included general corporate expenses of DuPont for services provided by DuPont for certain support functions that were provided on a centralized basis prior to the Separation. These costs were allocated using relevant allocation methods, primarily based on sales metrics.

Corporate expense allocations during the three and six months ended June 30, 2025 were recorded in the unaudited interim Consolidated Statements of Operations within the following captions:

In millions			Three Months Ended June 30, 2025			Six Months Ended June 30, 2025
Selling, general and administrative expenses			$	57		$	110
Cost of sales			9			17
Research and development expenses			9			19
Transformation, integration and other charges1			—			11
Total corporate expense allocations			$	75		$	157

1. Refer to Note 4 for additional information.

Parent Company Equity

Net transfers to Parent are included within Parent company net investment on the unaudited interim Consolidated Statements of Changes in Equity. The components of the net transfers to Parent are as follows:

In millions			Three Months Ended June 30, 2025			Six Months Ended June 30, 2025
Cash pooling and general financing activities			$	(61)		$	(28)
Less: Corporate cost allocations			75			157
Less: Taxes deemed settled with Parent			77			133
Total net transfers to Parent per unaudited interim Consolidated Statements of Changes in Equity			$	(213)		$	(318)
Stock-based compensation and other noncash transfers (to) from Parent			(5)			(4)
Net transfers to Parent per unaudited interim Consolidated Statements of Cash Flows			$	(218)		$	(322)

NOTE 6 - SUPPLEMENTARY INFORMATION

Other Income (Expense) - Net			Three Months Ended June 30,						Six Months Ended June 30,
In millions			2026			2025			2026			2025
Net gain on sales of assets			$	5		$	—		$	5		$	—
Non-operating pension credits			1			—			2			—
Interest income			4			—			7			2
Foreign exchange (losses) gains - net			—			(5)			(7)			(5)
Indirect legacy (costs) benefits - net			(42)			—			(45)			—
Miscellaneous income (expense) - net			5			1			6			1
Other income (expense) - net			$	(27)		$	(4)		$	(32)		$	(2)

Accrued and Other Current Liabilities

In millions			June 30, 2026			December 31, 2025
Accrued payroll			$	149		$	162
Current indemnification liabilities1			178			183
Other 2			182			157
Total accrued and other current liabilities			$	509		$	502

1. Related to current portion of indemnification liabilities, primarily to DuPont.

2. No other component of “Accrued and other current liabilities” was more than 5% of total current liabilities at June 30, 2026 and December 31, 2025.

Operating Leases

Supplemental balance sheet information related to leases was as follows:

In millions			June 30, 2026			December 31, 2025
Operating Leases
Operating lease right-of-use assets 1			$	497		$	493
Current operating lease liabilities 2			44			43
Noncurrent operating lease liabilities 3			463			455
Total operating lease liabilities			$	507		$	498

1.Included in "Deferred charges and other assets" in the interim Condensed Consolidated Balance Sheets.

2.Included in "Accrued and other current liabilities" in the interim Condensed Consolidated Balance Sheets.

3.Included in "Other noncurrent obligations" in the interim Condensed Consolidated Balance Sheets.

NOTE 7 - INCOME TAXES

During the periods presented in the unaudited interim Consolidated Financial Statements prior to the Separation, Qnity did not file separate tax returns in the U.S. for federal, certain state and local tax purposes, nor in foreign tax jurisdictions, as Qnity was included in the tax grouping of DuPont and its affiliate entities within the respective jurisdictions. The provision for income taxes included in these unaudited interim Consolidated Financial Statements has been calculated using the separate return basis, as if Qnity filed separate tax returns.

Each year, the Company files hundreds of tax returns in the various national, state, and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the tax authorities. The Company has ongoing federal, state, and international income tax audits in various jurisdictions and evaluates uncertain tax positions that may be challenged by local tax authorities. As a result, there is an uncertainty in income taxes recognized in the Company’s financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes. The ultimate resolution of such uncertainties is not expected to have a material impact on the Company's interim results of operations.

The Company's effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to attributes. The tax provision for the second quarter ended June 30, 2026 resulted in an effective tax rate of 31.7% on pretax income of $199 million, compared with an effective tax rate of 22.4% on pretax income of $255 million for the second quarter ended June 30, 2025. The increase in the effective tax rate in the second quarter of 2026 relates to taxes related to prior year uncertain tax positions for which the Company is indemnified, a non-deductible indemnification accrual recorded for the State of North Carolina litigation, a limitation on the deductibility of interest expense, and higher tax costs on the remittance of foreign earnings, partially offset by a reduction in foreign tax costs. The tax provision for the six months ended June 30, 2026 resulted in an effective tax rate of 28.5% on pre-tax income of $417 million, compared with an effective tax rate of 20.8%, on pre-tax income of $501 million for the six months ended June 30, 2025. The increase in the effective tax rate in 2026 relates to a limitation on the deductibility of interest expense, taxes related to prior year uncertain tax positions for which we are indemnified, higher tax costs on the remittance of foreign earnings, and a non-deductible indemnification accrual recorded for the State of North Carolina litigation, partially offset by a reduction in foreign tax costs.

On July 4, 2025, the One Big Beautiful Bill Act (“the Act”) was enacted. The Act includes a broad range of tax reform provisions, including modifications and enhancements to the domestic and international provisions of the Tax Cuts and Jobs Act. Among other changes, the Act allows for immediate expensing of domestic research and development expenditures, revises provisions around foreign-sourced earnings and revises the corporate interest limitation rules. The legislation has multiple effective dates, with certain provisions having become effective in fiscal 2025 and the majority becoming effective in fiscal 2026. The Company has considered the impact of the enacted provisions in its consolidated tax provision as of June 30, 2026. The legislation did not have a material impact on our income tax expense or effective tax rate for this quarter. The Company continues to evaluate the broader effects of the legislation as further guidance is issued.

NOTE 8 - EARNINGS PER SHARE CALCULATIONS

On the Separation and Distribution Date, approximately 209 million shares of the Company's common stock, par value $0.01 per share, were distributed to DuPont shareholders of record as of October 22, 2025. This share amount was utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Separation as all common stock was owned by DuPont prior to the Separation. For all periods presented prior to the Separation, it is assumed that there are no dilutive equity instruments as there were no equity awards of Qnity outstanding prior to the Separation. Therefore, the calculation of basic and diluted earnings per share is the same. Subsequent to the Separation, actual basic and diluted share counts were utilized for the calculation.

Net Income for Earnings Per Share Calculations - Basic & Diluted			Three Months Ended June 30,						Six Months Ended June 30,
In millions, except per share amounts			2026			2025			2026			2025
Net income			$	136		$	198		$	298		$	397
Net income attributable to noncontrolling interests			12			10			23			16
Net income attributable to common stockholders			$	124		$	188		$	275		$	381
Earnings attributable to common stockholders - basic			$	0.59		$	0.90		$	1.31		$	1.82
Earnings attributable to common stockholders - diluted			$	0.59		$	0.90		$	1.31		$	1.82

Share Count Information			Three Months Ended June 30,						Six Months Ended June 30,
In millions, except per share amounts			2026			2025			2026			2025
Weighted-average shares of common stock - basic			209.5			209.4			209.6			209.4
Plus dilutive effect of equity compensation plans			0.7			—			0.7			—
Weighted-average shares of common stock - diluted			210.2			209.4			210.3			209.4
Stock options, restricted stock units, and performance-based restricted stock units excluded from EPS calculations			0.1			—			0.2			—

NOTE 9 - INVENTORIES - NET

In millions			June 30, 2026			December 31, 2025
Finished goods			$	311		$	292
Work in process			243			221
Raw materials			173			145
Supplies			31			27
Less: Inventory reserves			28			24
Total inventories - net			$	730		$	661

NOTE 10 - NONCONSOLIDATED AFFILIATES

Qnity’s investments in companies accounted for using the equity method (“nonconsolidated affiliates”) are recorded in “Investments and noncurrent receivables” in the interim Condensed Consolidated Balance Sheets. Investments in nonconsolidated affiliates were $410 million and $386 million at June 30, 2026 and December 31, 2025, respectively.

At June 30, 2026 and December 31, 2025, Qnity had a note payable to HD MicroSystems LLC, a nonconsolidated affiliate, (the “Related Party Note Payable”) of $79 million and $53 million, respectively. This Related Party Note Payable arises from an arrangement in which Qnity manages the daily domestic cash position resulting from the normal cash operations of HD MicroSystems LLC. Under this arrangement, both parties may loan funds to one another based on the cash position of HD MicroSystems LLC.

The Related Party Note Payable is short-term in nature and bears an interest rate equal to the average daily rate during the preceding month, plus any applicable commission and fee percentage payable to Qnity for its support of the cash management program. The balance of this Related Party Note Payable and the related interest payable is included within “Accounts Payable” in the interim Condensed Consolidated Balance Sheets.

Sales to nonconsolidated affiliates represented less than 1% of total net sales for each of the three and six months ended June 30, 2026 and 2025. Purchases from nonconsolidated affiliates represented less than 2% of "Cost of sales" for each of the three and six months ended June 30, 2026, and less than 1% for each of the three and six months ended June 30, 2025. The Company maintained an ownership interest in three nonconsolidated affiliates at June 30, 2026.

NOTE 11 - GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes changes in the carrying amount of goodwill during the six months ended June 30, 2026.

In millions			Semiconductor Technologies			Interconnect Solutions						Total
Balance at December 31, 2025			$	4,542		$	2,980					$	7,522
Currency translation adjustment			(4)			—						(4)
Balance at June 30, 2026			$	4,538		$	2,980					$	7,518

Other Intangible Assets

The gross carrying amounts and accumulated amortization of other intangible assets with finite lives, by major class are as follows:

			June 30, 2026									December 31, 2025
In millions			Gross Carrying Amount			Accumulated Amortization			Net			Gross Carrying Amount			Accumulated Amortization			Net
Other intangible assets:
Developed technology			$	546		$	(378)		$	168		$	544		$	(349)		$	195
Trademarks/tradenames			55			(40)			15			55			(38)			17
Customer-related			2,094			(1,262)			832			2,125			(1,226)			899
Total other intangible assets			$	2,695		$	(1,680)		$	1,015		$	2,724		$	(1,613)		$	1,111

The following table provides the net carrying value of other intangible assets by segment:

Net Other Intangibles			June 30, 2026			December 31, 2025
In millions
Semiconductor Technologies			$	237		$	264
Interconnect Solutions			778			847
Total			$	1,015		$	1,111

Total estimated amortization expense for the remainder of 2026 and the five succeeding fiscal years is as follows:

Estimated Amortization Expense
In millions
Remainder of 2026			$	99
2027			$	170
2028			$	144
2029			$	110
2030			$	89
2031			$	89

NOTE 12 - SHORT-TERM BORROWINGS, LONG-TERM DEBT, AND AVAILABLE CREDIT FACILITIES

A summary of Qnity's short-term borrowings, long-term debt and available credit facilities can be found in Note 14 to the Consolidated Financial Statements included in the Company's Annual Report. If applicable, updates have been included in the respective section below.

Short-term Borrowings

Long-term debt due within one year was $23 million and $24 million at June 30, 2026 and December 31, 2025, respectively. These balances are presented net of current portion of unamortized debt issuance cost and are recorded in "Short-term borrowings" in the interim Condensed Consolidated Balance Sheets.

Long-Term Debt

Long-term debt at June 30, 2026 and December 31, 2025 was $3,997 million and $4,003 million, respectively. The estimated fair value of the Company's long-term borrowings was determined using Level 2 inputs within the fair value hierarchy. Based on quoted market prices for the same or similar issues, or on current rates offered to the Company for debt of the same remaining maturities, the fair value of the Company's long-term borrowings, including long-term debt due within one year, was $4,107 million and $4,154 million at June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026, the Company was in compliance with all applicable covenants included in the terms of its debt arrangements.

Senior Secured Credit Facilities

On October 31, 2025 in connection with the Separation, the Company entered into a credit agreement (the "Credit Agreement") providing for (a) a five-year revolving credit facility in the aggregate committed amount of $1.25 billion (up to $100 million of such revolving facility is available for the issuance of letters of credit) (the "Senior Secured Revolving Facility"), and (b) a seven-year term loan facility in the aggregate principal amount of $2.35 billion (the "Senior Secured Term Loan Facility" and, together with the Senior Secured Revolving Facility, the "Senior Secured Credit Facilities"). The borrowings under the Senior Secured Credit Facilities bear interest at a rate per annum equal to either of the following, plus, in each case, an applicable margin: (a) the base rate or (b) term Secured Overnight Financing Rate ("SOFR").

Subsequent to the quarter ended June 30, 2026, on July 1, 2026 (the "Repricing Closing Date"), the Company entered into the first amendment to the Credit Agreement (the "First Amendment"). The First Amendment reduced the applicable margin on term SOFR borrowings under the Senior Secured Term Loan Facility from 2.00% to 1.75%, with no material changes to principal, maturity, amortization, or covenant structure. In connection with the repricing, the repriced borrowings under the Senior Secured Term Loan Facility are subject to a 1.00% premium on certain prepayments, repayments, and amendments constituting a “Repricing Event” occurring on or prior to the date that is six (6) months after the Repricing Closing Date. The Company will account for the amendment primarily as a debt modification.

Committed Credit Facilities and Outstanding Letters of Credit

The Company's $1,250 million Senior Secured Revolving Facility matures October 2030. As of June 30, 2026, there were no drawings on the facility, and outstanding letters of credit under the facility were approximately $12 million.

Uncommitted Credit Facilities and Outstanding Letters of Credit

Unused bank credit lines on uncommitted credit facilities were approximately $133 million at June 30, 2026. These lines are available to support short-term liquidity needs and general corporate purposes including letters of credit. Outstanding letters of credit and credit lines under these uncommitted credit facilities were approximately $24 million at June 30, 2026. These letters of credit support commitments made in the ordinary course of business.

NOTE 13 - COMMITMENTS AND CONTINGENT LIABILITIES

Litigation Matters

In the normal course of business, the Company is involved from time to time in various arbitrations, lawsuits, claims and other actions with respect to patent infringement claims, employment claims, including alleged wage and hour violations, and commercial claims.

The Company accrues for such matters where losses are deemed probable and reasonably estimable. There are other matters involving the Company for which a loss is deemed remote or reasonably possible, and, as a result, associated accruals have not been established. It is reasonably possible that some of these matters could result in future payments or costs in excess of the amounts accrued at June 30, 2026, but such excess amounts cannot be reasonably estimated. It is the opinion of the Company’s management that the possibility is remote that the aggregate of all such claims and lawsuits will have a material adverse impact on the results of operations, financial condition and cash flows of the Company.

Certain Indemnification Obligations to DuPont

A summary of indemnification obligations to DuPont can be found in Note 15 to the Consolidated Financial Statements included in the Company's Annual Report. If applicable, updates have been included in the respective section below.

As of June 30, 2026, the Company maintains indemnification liabilities related to the legacy liabilities detailed above of $99 million within “Accrued and other current liabilities” and $154 million within “Other noncurrent obligations” within the Condensed Consolidated Balance Sheets. As of December 31, 2025, the Company maintained indemnification liabilities related to these legacy liabilities of $80 million within “Accrued and other current liabilities” and $110 million within “Other noncurrent obligations” within the Condensed Consolidated Balance Sheets. It is reasonably possible that the potential exposure of these indemnifications could range up to approximately $100 million above the amount accrued at June 30, 2026. It is also possible that the Company could incur additional costs or losses that may be material to its financial condition and its cash flows beyond those amounts accrued for or believed to be reasonably possible at this time. Such excess amounts cannot be reasonably estimated.

Liabilities under the MOU

As of June 30, 2026, DuPont has borne Qualified Spend of approximately $745 million and has recorded an indemnification liability for probable and reasonably estimable future Qualified Spend under the Memorandum of Understanding ("MOU") of $217 million. Qnity maintains an indemnification liability for such probable and reasonably estimable future Qualified Spend of $88 million which represents the Applicable Qnity Percentage (the portion for which we have been contractually allocated, and directly pay or indemnify DuPont) of 44% of DuPont's after-tax liability.

New Jersey

On August 3, 2025, DuPont, together with Chemours and Corteva and its subsidiary, EIDP, agreed to a proposed Judicial Consent Order (the “Consent Order”) with the State of New Jersey to resolve outstanding claims by the state pending against the companies related to legacy use of a wide variety of substances of concern for an aggregate cash settlement payment to the state of $875 million, payable over a period of 25 years. As of June 30, 2026, DuPont maintains a pre-tax charge of $177 million related to the proposed Consent Order. The Company maintains an indemnification liability of $66 million for our contractually allocated portion of the recorded pre-tax charge. Additionally, DuPont recorded interest accretion of $11 million to date as of June 30, 2026, resulting in a liability of $188 million as of June 30, 2026. Qnity has recorded $4 million for its contractually allocated portion of this accreted interest. We will share in the ongoing costs of maintaining a reserve fund in the event the remedial funding source for a site has been exhausted and the party responsible is not otherwise performing the required remediation.

State of North Carolina and Municipalities

DuPont, together with Chemours and Corteva/EIDP, is a defendant in litigation brought by the Attorney General of the State of North Carolina and certain municipalities, including Cumberland County, in the vicinity of the Fayetteville Works site. As of June 30, 2026 DuPont established a $125 million accrual in connection with these matters. Accordingly, the Company has established an indemnification liability of $43 million, as of June 30, 2026, for our contractually allocated after-tax portion of DuPont’s charge for these matters.

Other

DuPont has recorded liabilities related to business and operations, historical activities of DuPont, including environmental liabilities, and its present and former subsidiaries, for which the Company maintains an indemnification liability of $52 million and $46 million for its contractually allocated portion as of June 30, 2026 and December 31, 2025, respectively.

NOTE 14 - STOCKHOLDERS' EQUITY

Share Repurchase Authorization

On February 20, 2026, the Company's Board of Directors approved a share repurchase authorization of up to $500 million of common stock (the "$500M Authorization"). Under the $500M Authorization, repurchases of common stock may be effected from time to time, either on the open market (including pre-set trading plans) or other transactions in accordance with applicable securities laws. The $500M Authorization has no expiration date and will terminate once the authorized amount of shares have been repurchased and retired or when terminated by the Board of Directors. The timing and amount of repurchases under the program will depend on a variety of factors. During the three months ended June 30, 2026, the Company repurchased 183,107 shares under the $500M Authorization for $25 million at an average share price of $136.51 per share. During the six months ended June 30, 2026, the Company repurchased 402,688 shares under the $500M Authorization for $50 million at an average share price of $124.12 per share. All shares repurchased under the $500M Authorization have been retired. The aggregate amount of common stock available for repurchase under the $500M Authorization as of June 30, 2026 was $450 million.

Accumulated Other Comprehensive Loss

The following tables summarize the activity related to each component of accumulated other comprehensive loss ("AOCL") for the six months ended June 30, 2026 and 2025:

Accumulated Other Comprehensive Loss						Cumulative Translation Adj			Pension						Total
In millions
2025
Balance at January 1, 2025						$	(435)		$	21					$	(414)
Other comprehensive income						224			(1)						223
Balance at June 30, 2025						$	(211)		$	20					$	(191)
2026
Balance at January 1, 2026						$	(221)		$	8					$	(213)
Other comprehensive loss						(55)			(1)						(56)
Balance at June 30, 2026						$	(276)		$	7					$	(269)

The tax effects on the net activity related to each component of other comprehensive loss were immaterial for each of the three and six months ended June 30, 2026 and 2025.

NOTE 15 - PENSION PLANS

A summary of the Company's pension plans and other post-employment benefits can be found in Note 18 to the Consolidated Financial Statements included in the Company's Annual Report.

The following sets forth the components of the Company's net periodic benefit costs for defined benefit pension plans:

Net Periodic Benefit Costs for All Significant Plans			Three Months Ended June 30,						Six Months Ended June 30,
In millions			2026			2025			2026			2025
Service cost			$	2		$	1		$	4		$	2
Interest cost			4			2			8			3
Expected return on plan assets			(5)			(1)			(9)			(2)
Amortization of unrecognized net gain			—			—			(1)			—
Net periodic benefit costs - total			$	1		$	2		$	2		$	3

The net periodic benefit costs, other than the service cost component, are included in "Other income (expense) - net" in the unaudited interim Consolidated Statements of Operations.

NOTE 16 - STOCK-BASED COMPENSATION

A summary of the Company's stock-based compensation plans can be found in Note 19 to the Consolidated Financial Statements included in the Company's Annual Report.

In connection with the Separation, the Company adopted the Qnity Electronics, Inc. Equity and Incentive Plan ("EIP"). Under the EIP, the Company may grant options, stock appreciation rights ("SARs"), restricted shares, restricted stock units ("RSUs"), share bonuses, other share-based awards, cash awards, conversion awards, each as defined in the EIP, or any combination of the foregoing. Under the EIP, a maximum of 16 million shares of common stock are available for award as of June 30, 2026.

Qnity recognized share-based compensation expense of $15 million and $4 million for the three months ended June 30, 2026 and 2025, respectively, and $25 million and $8 million for the six months ended June 30, 2026 and 2025, respectively. The income tax benefits related to stock-based compensation arrangements were $3 million and $1 million for the three months ended June 30, 2026 and 2025, respectively, and $5 million and $2 million for the six months ended June 30, 2026 and 2025, respectively.

In the first quarter of 2026, the Company granted 0.3 million RSUs and 0.1 million performance based stock units ("PSUs"). The weighted-average fair values per share associated with the grants were $126.70 per RSU and $191.69 per PSU. There was minimal activity in the second quarter of 2026.

NOTE 17 - FINANCIAL INSTRUMENTS

The following table summarizes the fair value of financial instruments at June 30, 2026 and December 31, 2025:

Fair Value of Financial Instruments			June 30, 2026												December 31, 2025
In millions			Cost			Gain			Loss			Fair Value			Cost			Gain			Loss			Fair Value
Cash equivalents			$	120		$	—		$	—		$	120		$	143		$	—		$	—		$	143
Derivatives relating to:
Foreign currency 1, 2			—			1			(17)			(16)			—			14			—			14
Total derivatives			$	—		$	1		$	(17)		$	(16)		$	—		$	14		$	—		$	14

1.Classified as "Prepaid and other current assets" and "Accrued and other current liabilities" in the Condensed Consolidated Balance Sheets.

2.Presented net of cash collateral where master netting arrangements allow.

Derivative Instruments

Objectives and Strategies for Holding Derivative Instruments

In the ordinary course of business, the Company may enter into contractual arrangements (derivatives) to reduce its exposure to foreign currency, interest rate and commodity price risks. Derivative programs have procedures and controls and are approved by the Corporate Financial Risk Management Committee, consistent with the Company's financial risk management policies and guidelines. These programs reflect varying levels of exposure coverage and time horizons based on an assessment of risk.

The Company's financial risk management procedures also address counterparty credit approval, limits and routine exposure monitoring and reporting. The counterparties to these contractual arrangements are major financial institutions and major commodity exchanges. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company utilizes collateral support annex agreements with certain counterparties to limit its exposure to credit losses. The Company anticipates performance by counterparties to these contracts and therefore no material loss is expected. Market and counterparty credit risks associated with these instruments are regularly reported to management.

The notional amounts of the Company's derivative instruments were as follows:

Notional Amounts			June 30, 2026			December 31, 2025
In millions
Derivatives not designated as hedging instruments:
Foreign currency contracts 1			$	(1,189)		$	(1,046)

1.Presented net of contracts bought and sold.

Derivatives not Designated in Hedging Relationships

Foreign Currency Contracts

The Company routinely uses forward exchange contracts to reduce its net exposure, by currency, related to foreign currency-denominated monetary assets and liabilities of its operations so that exchange gains and losses resulting from exchange rate changes are minimized. The netting of such exposures precludes the use of hedge accounting; however, the required revaluation of the forward contracts and the associated foreign currency-denominated monetary assets and liabilities intends to achieve a minimal earnings impact, after taxes. The Company also uses foreign currency exchange contracts to offset a portion of the Company's exposure to certain foreign currency-denominated revenues so that gains and losses on the contracts offset changes in the USD value of the related foreign currency-denominated revenues.

Foreign currency derivatives not designated as hedges are used to offset foreign exchange gains or losses resulting from the underlying exposures of foreign currency-denominated assets and liabilities. The amount charged on a pre-tax basis related to foreign currency derivatives not designated as hedges, which was included in “Other income (expense) - net” in the interim Consolidated Statements of Operations, were losses of $4 million and zero for the three months ended June 30, 2026 and 2025, respectively, and $30 million and zero for the six months ended June 30, 2026 and 2025, respectively.

NOTE 18 - FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

The following tables summarize the basis used to measure certain assets and liabilities at fair value on a recurring basis:

Basis of Fair Value Measurements on a Recurring Basis of Significant Other Observable Inputs (Level 2)			June 30, 2026			December 31, 2025
In millions
Assets at fair value:
Cash equivalents 1			$	120		$	143
Derivatives relating to: 2
Foreign currency contracts 3			3			16
Total assets at fair value			$	123		$	159
Liabilities at fair value:
Derivatives relating to: 2
Foreign currency contracts 3			19			2
Total liabilities at fair value			$	19		$	2

1. Time deposits included in "Cash and cash equivalents" in the interim Condensed Consolidated Balance Sheets are held at amortized cost, which approximates fair value.

2. See Note 17 for the classification of derivatives in the interim Condensed Consolidated Balance Sheets.

3. Asset and liability derivatives subject to an enforceable master netting arrangement with the same counterparty are presented on a net basis in the interim Condensed Consolidated Balance Sheets. The offsetting counterparty and cash collateral netting amounts for foreign currency contracts were $2 million and zero respectively, for both assets and liabilities as of June 30, 2026. The offsetting counterparty and cash collateral netting amounts were $2 million and zero, respectively, for assets and liabilities as of December 31, 2025.

For assets and liabilities classified as Level 2 measurements, where the security is frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability, or by using observable market data points of similar, more liquid securities to imply the price. For time deposits classified as held-to-maturity investments and reported at amortized cost, fair value is based on an observable interest rate for similar securities. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance and quality checks.

For derivative assets and liabilities, standard industry models are used to calculate the fair value of the various financial instruments based on significant observable market inputs, such as foreign exchange rates, commodity prices, swap rates, interest rates and implied volatility obtained from various market sources. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance/quality checks.

There were no transfers between Levels 1 and 2 during the three or six months ended June 30, 2026, and 2025.

NOTE 19 - SEGMENT INFORMATION

The Company's segments are aligned with the market verticals they serve, while maintaining integration and innovation strengths within strategic value chains. The Company's Chief Executive Officer is its Chief Operating Decision Maker ("CODM"). Effective in the first quarter of 2025, in anticipation of the Separation, DuPont and Qnity realigned their segment structure. As a result of this realignment, Qnity consists of two operating and reportable segments: Semiconductor Technologies (“Semi”) and Interconnect Solutions (“ICS”). All periods presented have been adjusted to conform to the current segment reporting structure. This realignment is consistent with how the CODM now assesses performance. Major products by segment include: Semi (which includes chemical mechanical planarization (“CMP”) pads and slurries, photoresists, functional sub-layers, advanced overcoats, post-CMP cleaners, post-Etch residue removers and emerging cleans) and ICS (which includes copper pillar plating, copper redistribution layer, solder bump plating, under bump metallization, photoresists, packaging dielectrics, gap fillers, phase change, specialty thermal interface materials, thermally conductive insulators, copper plating solutions, dry film photoresists, laminates and polyimide films). The Company operates globally in substantially all of its product lines. Transfers of products between operating segments are generally valued at cost, to the extent such transfers are applicable.

The Company's measure of profit/loss for segment reporting purposes is Adjusted Operating EBITDA as this is the manner in which the CODM assesses performance and allocates resources. The CODM utilizes Adjusted Operating EBITDA to assess financial performance and allocate resources by comparing actual results to historical and previously forecasted results. The Company defines Adjusted Operating EBITDA as earnings (i.e., “Income (loss) before income taxes”) before interest, depreciation, amortization, non-operating pension and other post-employment benefits / charges, foreign exchange gains / losses, indirect legacy costs, and adjusted for significant items. Reconciliations of these measures are provided on the following pages.

Segment Net Sales, Significant Segment Expenses and Segment Adjusted Operating EBITDA			Three Months Ended June 30,
2026						2025
Semiconductor Technologies			Interconnect Solutions			Semiconductor Technologies			Interconnect Solutions
(In millions)
Segment net sales			$	744		$	685		$	644		$	526
Less 1:
Cost of sales			$	380		$	381		$	324		$	306
Selling, general and administrative expenses			86			94			69			72
Research and development expenses			62			37			56			31
Amortization of intangibles & other segment items 2			11			35			13			37
Add:
Equity in earnings of nonconsolidated affiliates			$	12		$	(1)		$	13		$	—
Depreciation and amortization 3			36			60			31			57
Segment Adjusted Operating EBITDA			$	253		$	197		$	226		$	137

Segment Net Sales, Significant Segment Expenses and Segment Adjusted Operating EBITDA			Six Months Ended June 30,
2026						2025
Semiconductor Technologies			Interconnect Solutions			Semiconductor Technologies			Interconnect Solutions
(In millions)
Segment net sales			$	1,466		$	1,278		$	1,288		$	1,000
Less 1:
Cost of sales			$	739		$	716		$	631		$	586
Selling, general and administrative expenses			160			174			133			138
Research and development expenses			122			70			109			62
Amortization of intangibles & other segment items 2			24			72			26			79
Add:
Equity in earnings of nonconsolidated affiliates			$	25		$	(1)		$	24		$	(2)
Depreciation and amortization 3			70			121			60			118
Segment Adjusted Operating EBITDA			$	516		$	366		$	473		$	251

1.The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

2.Other segment items include immaterial other gains or losses and miscellaneous income and expenses.

3.Depreciation is a reconciling item to Segment Adjusted Operating EBITDA as it is included within "Cost of sales", "Selling, general and administrative expenses" and "Research and development expenses".

Reconciliation of Segment Adjusted Operating EBITDA to Income Before Income Taxes						Three Months Ended June 30,						Six Months Ended June 30,
In millions						2026			2025			2026			2025
Semiconductor Technologies Segment Adjusted Operating EBITDA						$	253		$	226		$	516		$	473
Interconnect Solutions Segment Adjusted Operating EBITDA						197			137			366			251
Total Segment Adjusted Operating EBITDA						$	450		$	363		$	882		$	724
+			Corporate Adjusted Operating EBITDA 1			$	(19)		$	(9)		$	(40)		$	(15)
-			Depreciation and amortization			97			92			195			186
+			Interest income 2, 3			4			—			7			—
-			Interest expense			61			—			122			—
+			Non-operating pension credits 3			1			—			2			—
+			Foreign exchange (losses) gains - net 3			—			(5)			(7)			(5)
+			Indirect legacy (costs) benefits - net 3			(42)			—			(45)			—
+			Significant items charge			(37)			(2)			(65)			(17)
Income before income taxes						$	199		$	255		$	417		$	501

1.Corporate includes certain enterprise and governance activities including non-allocated corporate overhead costs and support functions, leveraged services, and other costs not absorbed by reportable segments.

2.The six months ended June 30, 2025 excludes accrued interest income earned on employee retention credits.

3.Included in "Other income (expense) - net."

The following tables summarize the pre-tax impact of significant items by segment that are excluded from Adjusted Operating EBITDA above:

Significant Items by Segment for the Three Months Ended June 30, 2026			Semiconductor Technologies			Interconnect Solutions			Corporate			Total
In millions
Transformation, integration, and other charges 1			$	(4)		$	(3)		$	(35)		$	(42)
Gain on sale of assets 2			—			—			5			5
Total			$	(4)		$	(3)		$	(30)		$	(37)

1. See Note 4 for additional information.

2. The gain on sale of assets was attributable to the sale of land during the three months ended June 30, 2026.

Significant Items by Segment for the Three Months Ended June 30, 2025			Semiconductor Technologies			Interconnect Solutions			Corporate			Total
In millions
Transformation, integration, and other charges 1			$	(1)		$	—		$	(1)		$	(2)
Total			$	(1)		$	—		$	(1)		$	(2)

1. See Note 4 for additional information.

Significant Items by Segment for the Six Months Ended June 30, 2026			Semiconductor Technologies			Interconnect Solutions			Corporate			Total
In millions
Transformation, integration, and other charges 1			$	(4)		$	(2)		$	(64)		$	(70)
Gain on sale of assets 2			—			—			5			5
Total			$	(4)		$	(2)		$	(59)		$	(65)

1. See Note 4 for additional information.

2. The gain on sale of assets was attributable to the sale of land during the six months ended June 30, 2026.

Significant Items by Segment for the Six Months Ended June 30, 2025			Semiconductor Technologies			Interconnect Solutions			Corporate			Total
In millions
Transformation, integration, and other charges 1			$	(3)		$	(4)		$	(12)		$	(19)
Employee Retention Credit 2			1			—			1			2
Total			$	(2)		$	(4)		$	(11)		$	(17)

1. See Note 4 for additional information.

2. Reflects the accrued interest earned on employee retention credits and is recorded in “Interest income” within the “Other income (expense) - net” line item in the Company’s unaudited interim Consolidated Statements of Operations

Segment and Corporate Information			Semiconductor Technologies			Interconnect Solutions			Corporate			Total
In millions
As of June 30, 2026
Total Assets			$	7,194		$	5,689		$	1,448		$	14,331
Investment in nonconsolidated affiliates			$	400		$	10		$	—		$	410
As of December 31, 2025
Total Assets			$	7,022		$	5,594		$	1,454		$	14,070
Investment in nonconsolidated affiliates			$	375		$	11		$	—		$	386

Capital Expenditure Reconciliation to Unaudited Interim Consolidated Financial Statements			Three Months Ended June 30,						Six Months Ended June 30,
In millions			2026			2025			2026			2025
Semiconductor Technologies			$	76		$	33		$	125		$	57
Interconnect Solutions			27			24			41			44
Corporate			14			5			25			8
Segment and Corporate Totals			$	117		$	62		$	191		$	109
Accrual to cash adjustment 1			(27)			(13)			21			44
Total			$	90		$	49		$	212		$	153

1.Reflects the incremental cash spent or unpaid on capital expenditures; total capital expenditures are presented on a cash basis.