Qnity Electronics, Inc.

Liquidity & Capital Resources

Historically, the Electronics business, as managed by DuPont, has generated positive cash flows from operations. A majority of such cash flows was transferred to DuPont in connection with our participation in DuPont’s cash pooling arrangements to manage liquidity and fund operations, the effect of which is presented as net parent investment in our unaudited interim Combined Financial Statements. Our cash and cash equivalents as of September 30, 2025 reflected on the unaudited interim Combined Balance Sheets represent cash on hand at certain foreign entities as a result of local requirements.

Upon Separation, we ceased participation in DuPont cash pooling arrangements and our cash and cash equivalents will be held and used solely for our own operations. Our capital structure, long-term commitments and sources of liquidity will change meaningfully from our historical practices.

We believe our existing cash and cash flows generated from operations and indebtedness incurred in conjunction with the Separation discussed in detail below and anticipated domestic cash and cash equivalents we will retain at the completion of the Separation will be responsive to the needs of our current and planned operations for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of our cash flow from operations, indebtedness incurred in conjunction with the Separation and issuances of equity securities or debt offerings, as needed.

Cash flows from operating, investing and financing activities are provided in the tables that follow. Individual amounts in the unaudited interim Combined Statements of Cash Flows exclude the effect of exchange rate impacts on cash and cash equivalents, which are presented separately in the cash flows. Thus, the amounts presented in the following operating, investing and financing activities tables reflect changes in balances from period to period adjusted for these effects.

Summary of Cash Flows

Our cash flows from operating, investing and financing activities, as reflected in the unaudited interim Combined Statements of Cash Flows, are summarized in the following table.

Cash Flows from Operating Activities

In the first nine months of 2025, cash provided by operating activities was $782 million, compared with $775 million in the same period last year. The increase in cash provided by operating activities is primarily due to higher earnings, partially offset by an increase in net cash used for working capital. Changes in working capital were primarily driven by higher trade receivables from increased sales and higher inventory based on volume growth, partially offset by higher accounts payable resulting from purchases to support higher volumes.

The table below reflects net working capital:

Cash Flows from Investing Activities

In the first nine months of 2025, cash used for investing activities was $214 million, compared with $133 million in the first nine months of 2024. The increase in cash used for investing activities is attributable to higher capital expenditures.

Cash Flows from Financing Activities

In the first nine months of 2025, cash used for financing activities was $616 million compared with $624 million in the same period last year. The decrease in cash used for financing activities is primarily attributable to cash proceeds from the issuance of long-term debt, partially offset by a decrease in net transfers (to) from Parent and payments for debt issuance costs.

Material Cash Requirements

In the normal course of business, we enter into contracts and commitments that oblige us to make payments in the future. Information regarding our obligations under lease, debt, commitments and pensions and are provided in Note 6, Note 12, Note 13 and Note 15, respectively, in the unaudited Combined Financial Statements for the three and nine months ended September 30, 2025 and 2024.

As a result of the Separation, as discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Stand-Alone Company Expenses”, we will incur costs related to operating as a stand-alone public company and our costs under the Separation Agreements including certain cost sharing arrangements as well as indemnification obligations. While these costs are expected to be significant and we are not able to predict the full extent or timing of our future obligations, we expect the generation of cash from operations and the ability to access the debt capital markets and other sources of liquidity will continue to provide sufficient liquidity and financial flexibility to meet our obligations, and those of our subsidiaries, as they come due.

Debt

We have historically relied, via DuPont, on cash from operating activities and access to the debt capital markets and other sources of liquidity to fund our operations.

As of October 31, 2025 we have incurred indebtedness in an aggregate principal amount of $4.1 billion. We believe that our financing arrangements, future cash from operations, and access to capital markets will provide adequate resources to fund our future cash flow needs. On August 15, 2025, we issued $1 billion aggregate principal amount of 5.750% senior secured notes due 2032 (the "Senior Secured Notes") and $750 million aggregate principal amount of 6.250% senior unsecured notes due 2033 (the "Senior Unsecured Notes" and, together with the Senior Secured Notes, the "Notes").

On October 31, 2025 we entered into (a) the Senior Secured Revolving Facility in the aggregate committed amount of $1.25 billion (up to $100 million of the Senior Secured Revolving Facility will be available for the issuance of letters of credit), and (b) the Senior Secured Term Loan Facility in the aggregate principal amount of $2.35 billion. The Senior Secured Revolving Facility was not utilized at the consummation of the Separation, other than with respect to the issuance of letters of credit. The Notes and the Senior Secured Credit Facilities include various customary covenants including those relating to debt incurrence, liens, restricted payments, assets sales, and transactions with affiliates, changes in control, and mergers or sales of all or substantially all of our assets. See Note 12 to the unaudited interim Combined Financial Statements for additional information.

We expect to rely on cash from our own operating activities, borrowings available under our Senior Secured Revolving Facility, and access to the capital markets to fund our operations. The servicing of this debt will be supported, in part, by cash flows from our existing operations. The cost and availability of debt financing will be influenced by our future credit ratings and market conditions.

Dividends

On November 12, 2025, the Company announced that its Board of Directors declared a quarterly dividend of $0.06 per share payable on December 15, 2025, to stockholders of record on November 28, 2025.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, see Note 2 to the unaudited interim Combined Financial Statements.

Critical Accounting Estimates

There have been no material changes in our critical accounting estimates from those disclosed under the heading "Critical Accounting Estimates" in our Information Statement, dated October 15, 2025, filed as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on October 15, 2025.