Qnity Electronics, Inc.

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:

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.

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 nexttwo 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 ofzero 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.