Solstice Advanced Materials Inc.
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 30, 2026
SOLS$58.00+5.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0002064953-26-000047
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0002064953-26-000087
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 91 previous paragraphs and 115 current paragraphs.
55 unchanged; 31 reworded; 23 added; 4 removed; 1 previous and 6 current paragraphs rearranged.
Tables are not compared: 9 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
Proposed Acquisition of Element Solutions Inc
Current report
On July 6, 2026, Solstice entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire Element Solutions Inc (“Element Solutions”) in a cash-and-stock transaction pursuant to which Element Solutions stockholders will receive, for each share of Element Solutions common stock, $10.00 in cash and 0.500 shares of Solstice common stock. The transactions contemplated pursuant to the Merger Agreement are referred to as the “Transactions”.
Current report
In connection with entering into the Merger Agreement, Solstice entered into a commitment letter providing among other things, financing for the Transactions in the form of an initial $4.685 billion bridge commitment from Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC. Solstice intends to obtain permanent debt financing in the form of a senior secured term loan B facility and unsecured notes in public or private offering(s) prior to the closing of the Transactions. Solstice intends to use any such financing in addition to cash from its balance sheet to fund the cash consideration payable at closing of the Transactions. The receipt of financing by Solstice is not a condition to Solstice’s obligation to consummate the Transactions.
Current report
See Note 16 – Subsequent Events for additional information regarding the Transactions.
Current report
Organization Information
Current report
In connection with the Spin-off from Honeywell, Solstice entered into a Tax Matters Agreement with Honeywell. If the Merger Agreement is terminated under certain specified circumstances, including pursuant to a competing proposal or in the event that Honeywell revokes its consent pursuant to the Tax Matters Agreement entered into between the Company and Honeywell, or otherwise seeks to prohibit the Mergers, the Company may be required to pay Element Solutions a termination fee of $385.0 million or $513 million. If the Merger Agreement is terminated under certain specified circumstances, Element Solutions may be required to pay the Company a termination fee of $376.0 million.
Current report
Net sales increased by $115 million or 11% primarily due to volume growth of $58 million and favorable pricing of $31 million in the RAS segment, as well as volume growth of $14 million and favorable pricing of $6 million in the ESM segment.
Current report
NM - not meaningful
Current report
The following sets forth the net sales for our RAS segment for the six months ended June 30, 2026 and 2025.
Current report
RAS net sales increased by $94 million or 13% primarily driven by volume growth of $58 million, mainly as a result of the ongoing transition to LGWP refrigerants and volume increases in nuclear. Favorable pricing of $31 million also contributed to the increase, primarily driven by higher pricing in the stationary end market.
Current report
Segment Adjusted EBITDA decreased by $18 million or 6% and Segment Adjusted EBITDA margin decreased 6% primarily driven by timing of current year plant turnaround activity and production incentive credits in the prior year. These decreases were partially offset by volume growth and favorable pricing.
Current report
Segment Adjusted EBITDA decreased by $26 million or 5% and Segment Adjusted EBITDA margin decreased 6% primarily driven by inflation of raw material costs and higher R&D expenses.
Current report
The following sets forth the net sales for our ESM segment for the six months ended June 30, 2026 and 2025.
Current report
ESM net sales increased by $21 million or 8%. The increase was primarily driven by volume growth of $14 million, mainly due to volume increases in electronic materials related to stronger memory demand in the semiconductor end market. Favorable pricing of $6 million also contributed to the increase.
Current report
ESM net sales increased by $41 million or 8%. The increase was primarily driven by volume growth of $26 million, mainly due to volume increases in electronic materials related to stronger memory demand in the semiconductor end market. Favorable currency translation impacts on net sales of $9 million and favorable pricing of $6 million also contributed to the increase.
Current report
Segment Adjusted EBITDA increased by $18 million or 17% and Segment Adjusted EBITDA margin increased 2% primarily driven by volume growth in Electronic Materials, improved pricing, and productivity.
Current report
Financing Relating to the Proposed Acquisition of Element Solutions
Current report
In connection with entering into the Merger Agreement, the Company entered into a commitment letter (the “Commitment Letter”), dated as of July 6, 2026, with Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC (together, the “Commitment Parties”), pursuant to which, among other things, the Commitment Parties agreed to provide a first lien senior secured 364-day bridge term loan credit facility in an aggregate principal amount of up to $4.685 billion (the “Bridge Facility”). The Bridge Facility has been syndicated to a group of lenders consisting of a majority of the Company’s existing lenders under the Revolving Credit Facility. The Commitment Letter also provides for a $1.0 billion backstop senior secured revolving credit facility (the “Backstop Revolving Facility” and together with the Bridge Facility, the “Facilities”), which will only be established in the event that a proposed amendment to the Company’s Credit Agreement to permit the Bridge Facility does not become effective on or prior to the closing of the Transactions. On July 24, 2026, the Company entered into an amendment to the Credit Agreement to allow, among other things, for the provision of $4.685 billion in bridge financing to the Company and certain other transactions in connection with the Merger Agreement. As a result, the Backstop Revolving Facility will not be established.
Current report
The Bridge Commitment Letter also contemplates that the Company will seek to obtain permanent financing in the form of a senior secured term loan B facility and unsecured notes in public or private offering(s) prior to the closing of the Transactions (collectively, the “Permanent Financing”). The Bridge Facility is intended to be available to the Company to finance, together with other sources of funds, the acquisition, the refinancing of certain existing indebtedness of Element Solutions and related fees and expenses in connection with the Transactions, in the event that the Company has not obtained the Permanent Financing on or prior to the closing of the Transactions. Commitments under the Bridge Facility will be reduced by the amount of any Permanent Financing as well as certain other events. The receipt of financing by the Company is not a condition to the Company’s obligation to consummate the Transactions.
Current report
The Facilities are subject to customary conditions precedent to funding, including the consummation of the Transactions in all material respects in accordance with the terms of the Merger Agreement and other customary funding conditions for facilities of this type, and contain customary representations, warranties, covenants and indemnification provisions for transactions of this nature.
Current report
Dividends
Current report
On July 24, 2026, the Company entered into an amendment to the Credit Agreement to allow, among other things, for the provision of $4.685 billion in bridge financing to the Company and certain other transactions in connection with the Merger Agreement.
Current report
Credit Support
Removed paragraphs (4)
Previous report
Spin-off from Honeywell
Previous report
Segment Adjusted EBITDA decreased by $8 million or 3% and Segment Adjusted EBITDA margin decreased 5% primarily driven by lower margins due to refrigerant mix and higher production costs.
Previous report
ESM net sales increased by $19 million or 7%. The increase was primarily driven by volume growth of $13 million, mainly due to volume increases in electronic materials, partially offset by volume declines in performance chemicals. Currency translation favorably impacted net sales by $7 million.
Previous report
Parent Company Credit Support
Reworded paragraphs (31)
Previous wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of Solstice Advanced Materials Inc. and its consolidated subsidiaries (“Solstice,” “Solstice Advanced Materials,” “we,” “us,” “our,” or the “Company”) for the three months ended March 31, 2026. The financial information as of March 31, 2026 should be read in conjunction with the Consolidated Financial Statements for the year ended December 31, 2025, contained in our 2025 Annual Report on Form 10-K.
Current wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of Solstice Advanced Materials Inc. and its consolidated subsidiaries (“Solstice,” “Solstice Advanced Materials,” “we,” “us,” “our,” or the “Company”) for the three and six months ended June 30, 2026. The financial information as of June 30, 2026 should be read in conjunction with the Consolidated Financial Statements for the year ended December 31, 2025, contained in our 2025 Annual Report on Form 10-K.
Previous wording
On October 30, 2025 (“the “Spin-off date”), Honeywell International Inc. (“Honeywell”) completed the Spin-off of Solstice by means of a pro rata distribution (the “Distribution”), which was intended to be tax-free for U.S. federal tax purposes, of all of the issued and outstanding Solstice Advanced Materials common shares to Honeywell’s shareowners of record as of the close of business on October 17, 2025 (the “Record Date”), at which time each holder of Honeywell's common shares received one Solstice Advanced Materials common share for every four Honeywell common shares held as of the close of business on the Record Date, resulting in the Distribution of 158,727,456 of the Company’s common shares to Honeywell shareowners. Upon completion of the Distribution, on October 30, 2025, the Company commenced “regular way” trading as an independent public company under the ticker symbol “SOLS” on The Nasdaq Stock Market (“Nasdaq”). Following the Distribution, Honeywell did not own any Solstice Advanced Materials common shares.
Current wording
On October 30, 2025 (“the “Spin-off date”), Honeywell International Inc. (“Honeywell”) completed the Spin-off of Solstice by means of a pro rata distribution (the “Distribution”), which was intended to be tax-free for U.S. federal tax purposes, of all of the issued and outstanding Solstice Advanced Materials common shares to Honeywell’s shareowners of record as of the close of business on October 17, 2025 (the “Record Date”), at which time each holder of Honeywell's common shares received one Solstice Advanced Materials common share for every four Honeywell common shares held as of the close of business on the Record Date, resulting in the Distribution of 158,727,456 of the Company’s common shares to Honeywell shareowners. Upon completion of the Distribution, on October 30, 2025, the Company commenced “regular way” trading as an independent public company under the ticker symbol “SOLS” on The Nasdaq Stock Market (“Nasdaq”). Following the Distribution, Honeywell does not beneficially own any Solstice Advanced Materials common shares.
Previous wording
The Company classifies certain expenses related to the Spin-off, as well as acquisitions and divestitures (if any) as Transaction-related costs in the Consolidated Statements of Operations. The Transaction-related costs related to the Spin-off include one-time and non-recurring expenses associated with the separation and stand-up of functions required to operate as a standalone public entity. These non-recurring costs primarily relate to legal, accounting, consulting and other professional service fees, system implementation costs, business and facilities separation, marketing development related to our brand and other matters. These costs are expected to continue through at least fiscal year 2026.
Current wording
The Company classifies certain expenses related to the Spin-off, as well as related to potential or completed acquisitions and divestitures (if any) as Transaction-related costs in the Consolidated Statements of Operations. The Transaction-related costs related to the Spin-off include one-time and non-recurring expenses associated with the separation and stand-up of functions required to operate as a standalone public entity. These non-recurring costs primarily relate to legal, accounting, consulting and other professional service fees, system implementation costs, business and facilities separation, marketing development related to our brand and other matters.
Previous wording
Research and development expenses increased by $6 million or 26% driven by continued investment in innovation across the portfolio of offerings such as Spectra Y and next-generation molecules; Selling, general and administrative expenses increased by $15 million or 16% driven by an increase in employee-related expenses, primarily in connection with corporate functions and additional headcount necessary to operate as an independent public company; Transaction-related costs decreased by $5 million driven by a decrease in professional advisory services fees incurred after the Spin-off; Other expense (income) had an unfavorable change of $4 million driven primarily by lower income from equity method investments and foreign currency losses in the current period compared to gains in the prior period; and Interest and other financial charges increased by $28 million driven by the issuance of debt in connection with the Spin-off in the second half of 2025.
Current wording
Research and development expenses increased by $2 million or 11% driven by continued investment in innovation across the portfolio of offerings such as Spectra Y and next-generation molecules; Selling, general and administrative expenses increased by $18 million or 17% driven by an increase in employee-related expenses, primarily in connection with additional headcount necessary to operate as an independent public company; Transaction-related costs decreased by $6 million or 18% driven by a decrease in professional advisory services fees incurred after the Spin-off, partially offset by expenses incurred in connection with potential strategic transactions; Other expense (income) had a favorable change of $4 million driven primarily by lower foreign currency losses in the current period compared to the prior period; and Interest and other financial charges increased by $22 million driven by the issuance of debt in connection with the Spin-off in the second half of 2025.
Previous wording
Income tax expense decreased by $16 million. The effective tax rate in 2026 was lower than the effective tax rate in 2025 as a result of nondeductible transaction costs and discrete tax adjustments related to restructuring in advance of the Spin-off from Honeywell in the prior-year period. See Note 5 - Income Taxes of the Notes to the Consolidated Financial Statements for additional information on the effective tax rate.
Current wording
Income tax expense decreased by $59 million. The effective tax rate in 2026 was lower than the effective tax rate in 2025 as a result of nondeductible transaction costs and incremental frictional tax costs related to the Spin-off from Honeywell in the prior-year period. See Note 5 – Income Taxes of the Notes to the Consolidated Financial Statements for additional information on the effective tax rate.
Previous wording
Net sales increased by $94 million or 10% primarily due to volume growth of $37 million, favorable pricing of $22 million and favorable foreign currency translation impacts of $16 million in the RAS segment, as well as volume growth of $13 million and favorable currency translation impacts of $7 million in the ESM segment.
Current wording
Net sales increased by $209 million or 11% primarily due to volume growth of $95 million, favorable pricing of $52 million and favorable foreign currency impacts of $22 million in the RAS segment, as well as volume growth of $26 million, favorable foreign currency impacts of $9 million and favorable pricing of $6 million in the ESM segment.
Previous wording
Cost of product and services sold increased by $98 million or 17% primarily driven by volume increases and inflation in raw materials in both the RAS and ESM segments.
Current wording
Cost of product and services sold increased by $205 million or 16% primarily driven by volume increases and inflation in raw materials in both the RAS and ESM segments.
Previous wording
The following table sets forth the net sales, Segment Adjusted EBITDA, and Segment Adjusted EBITDA margin amounts for our RAS segment for the three months ended March 31, 2026 and 2025.
Current wording
The following table sets forth the net sales, Segment Adjusted EBITDA, and Segment Adjusted EBITDA margin amounts for our RAS segment for the three and six months ended June 30, 2026 and 2025.
Previous wording
The following table sets forth the reported and organic net sales growth in our RAS segment’s net sales for the three months ended March 31, 2026.
Current wording
The following table sets forth the reported and organic net sales growth in our RAS segment’s net sales for the three and six months ended June 30, 2026 compared with the prior year periods.
Previous wording
RAS net sales increased by $75 million or 12% primarily driven by volume growth of $37 million, mainly as a result of the ongoing transition to LGWP refrigerants and volume increases in nuclear, partially offset by volume declines in building solutions and intermediates due to lower demand in the construction end market. Favorable pricing of $22 million and favorable currency translation impacts on net sales of $16 million also contributed to the increase.
Current wording
RAS net sales increased by $169 million or 12% primarily driven by volume growth of $95 million, mainly as a result of the ongoing transition to LGWP refrigerants and volume increases in nuclear. Favorable pricing of $52 million, primarily driven by higher pricing in the stationary end market, and favorable currency translation impacts on net sales of $22 million also contributed to the increase.
Previous wording
The following table sets forth the net sales, Segment Adjusted EBITDA, and Segment Adjusted EBITDA margin amounts for our ESM segment for the three months ended March 31, 2026 and 2025.
Current wording
The following table sets forth the net sales, Segment Adjusted EBITDA, and Segment Adjusted EBITDA margin amounts for our ESM segment for the three and six months ended June 30, 2026 and 2025.
Previous wording
The following table sets forth the reported and organic net sales growth in our ESM segment’s net sales for the three months ended March 31, 2026.
Current wording
The following table sets forth the reported and organic net sales growth in our ESM segment’s net sales for the three and six months ended June 30, 2026 compared with the prior year periods.
Previous wording
Segment Adjusted EBITDA increased by $5 million or 10% primarily driven by demand growth in electronic materials. Segment Adjusted EBITDA margin remained relatively flat.
Current wording
Segment Adjusted EBITDA increased by $12 million or 24% and Segment Adjusted EBITDA margin increased 3% primarily driven by volume growth in Electronic Materials and productivity.
Previous wording
Corporate and All Other costs increased by $20 million or 62% for the three months ended March 31, 2026 compared to the prior year due to an increase in selling, general and administrative expenses, primarily in connection with corporate functions and additional headcount necessary to operate as an independent public company.
Current wording
Corporate and All Other costs increased by $8 million or 18% and $28 million or 36% for the three and six months ended June 30, 2026 compared to the prior year periods, respectively, due to an increase in selling, general and administrative expenses, primarily due to higher employee-related expenses as a result of additional headcount necessary to operate as an independent public company.
Previous wording
Adjusted EBITDA and Adjusted EBITDA margin: The Company defines Adjusted EBITDA as net income excluding income taxes, depreciation, amortization, interest and other financial charges, remeasurement of foreign currencies, stock-based compensation expense, nonoperating pension expense (income), transaction-related costs, repositioning charges, asset retirement obligations accretion, asset impairment charges, litigation costs and insurance settlements (net of recoveries), gains and losses on disposal of assets, and certain other items that are otherwise of an unusual or non-recurring nature. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by Net sales. We believe these measures are useful to investors as they provide greater transparency with respect to supplemental information used by management in its financial and operational decision making, as well as understanding ongoing operating trends. The table below reconciles Net income, the most directly comparable U.S. GAAP measure, to the Company’s non-GAAP measure of Adjusted EBITDA for the three months ended March 31, 2026 and 2025.
Current wording
Adjusted EBITDA and Adjusted EBITDA margin: The Company defines Adjusted EBITDA as net income excluding income taxes, depreciation, amortization, interest and other financial charges, remeasurement of foreign currencies, stock-based compensation expense, nonoperating pension expense (income), transaction-related costs, repositioning charges, asset retirement obligations accretion, asset impairment charges, litigation costs and insurance settlements (net of recoveries), gains and losses on disposal of assets, and certain other items that are otherwise of an unusual or non-recurring nature. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by Net sales. We believe these measures are useful to investors as they provide greater transparency with respect to supplemental information used by management in its financial and operational decision making, as well as understanding ongoing operating trends. The table below reconciles Net income, the most directly comparable U.S. GAAP measure, to the Company’s non-GAAP measure of Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025.
Previous wording
In connection with the Spin-off, we entered into certain third-party debt arrangements, as described below, and as of October 30, 2025, we no longer participate in Honeywell’s centralized cash management program. Our liquidity after the Spin-off depends on our operating cash flows, available cash balances, access to our credit facilities and our ability to access capital markets. We believe that our existing cash and cash equivalents, combined with our expected operating cash flows and available credit facilities (as discussed below) will be sufficient to meet our anticipated cash needs for at least the next 12 months.
Current wording
In connection with the Spin-off, we entered into certain third-party debt arrangements, as described below, and as of October 30, 2025, we no longer participate in Honeywell’s centralized cash management program. Our liquidity after the Spin-off depends on our operating cash flows, available cash balances, access to our credit facilities and our ability to access capital markets. We believe that our existing cash and cash equivalents, combined with our expected operating cash flows and available credit facilities (as discussed below) will be sufficient to meet our anticipated cash needs for at least the next 12 months. We expect to incur additional debt in connection with the Transactions, as described below.
Previous wording
On April 27, 2026, the Company announced that the Board of Directors declared a dividend of $0.075 per share of common stock outstanding, payable on June 10, 2026, to shareowners of record as of May 27, 2026. The Company currently expects to continue returning cash to shareowners through quarterly dividends, although payment of dividends remains subject to determination and declaration by the Board of Directors and there can be no assurance that the Company will continue to pay any dividends.
Current wording
On July 17, 2026, the Company announced that the Board of Directors declared a quarterly dividend of $0.075 per share of common stock outstanding, payable on September 10, 2026, to shareowners of record as of August 27, 2026. The Company currently expects to continue returning cash to shareowners through quarterly dividends, although payment of dividends remains subject to determination and declaration by the Board of Directors and there can be no assurance that the Company will continue to pay any dividends.
Previous wording
On October 29, 2025, the Company entered into a credit agreement (the “Credit Agreement”), which provides for (i) a seven-year senior secured first-lien term B loan facility in an aggregate principal amount of $1.0 billion (the “Term Loan Facility”) and (ii) a five-year senior secured first-lien revolving credit facility with aggregate commitments of $1.0 billion (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”).
Current wording
On October 29, 2025, the Company entered into a credit agreement (as amended, the “Credit Agreement”), which provides for (i) a seven-year senior secured first-lien term B loan facility in an aggregate principal amount of $1.0 billion (the “Term Loan Facility”) and (ii) a five-year senior secured first-lien revolving credit facility with aggregate commitments of $1.0 billion (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”).
Previous wording
The Company may voluntarily prepay borrowings under the Credit Agreement without premium or penalty, subject to a 1.00% prepayment premium in connection with certain repricing transactions with respect to the Term Loan Facility in the first six months after the effective date of the Credit Agreement and customary “breakage” costs with respect to SOFR loans. The Company may also reduce the commitments under the Revolving Credit Facility, in whole or in part, in each case, subject to certain minimum amounts and increments.
Current wording
The Company may voluntarily prepay borrowings under the Credit Agreement without premium or penalty, subject to customary “breakage” costs with respect to SOFR loans. The Company may also reduce the commitments under the Revolving Credit Facility, in whole or in part, in each case, subject to certain minimum amounts and increments.
Previous wording
As of March 31, 2026, there were no outstanding borrowings under the Revolving Credit Facility, the interest rate on the Term Loan Facility was 5.42%, and there were $263 million of unused letters of credit issued under the Sidecar LC Facilities.
Current wording
As of June 30, 2026, there were no outstanding borrowings under the Revolving Credit Facility, the interest rate on the Term Loan Facility was 5.41%, and there were $276 million of unused letters of credit issued under the Sidecar LC Facilities.
Previous wording
Credit Facility requiring the maintenance of certain financial ratios (as set forth in the Credit Agreement). As of March 31, 2026, the Company was in compliance with all of the financial covenants required by the Credit Agreement.
Current wording
The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type. In addition, the Credit Agreement also contains financial covenants for the benefit of the lenders under the Revolving Credit Facility requiring the maintenance of certain financial ratios (as set forth in the Credit Agreement). As of June 30, 2026, the Company was in compliance with all of the financial covenants required by the Credit Agreement.
Previous wording
Summarized cash flow information for the three months ended March 31, 2026 and 2025 is as follows:
Current wording
Summarized cash flow information for the six months ended June 30, 2026 and 2025 is as follows:
Previous wording
Net cash provided by operating activities was $199 million for the three months ended March 31, 2026 compared to $160 million in the prior-year period. The increase was due to greater working capital inflow, primarily driven by lower inventories from destocking of certain RAS products, collections from certain customers, as well as higher income tax liabilities due to timing, partially offset by the release of customer rebates. This increase was partially offset by lower net income.
Current wording
Net cash provided by operating activities was $461 million for the six months ended June 30, 2026 compared to $310 million in the prior-year period. The increase was due to greater working capital inflow, primarily driven by inventory reduction, primarily in the RAS segment.
Previous wording
Net cash used for investing activities was $77 million for the three months ended March 31, 2026 compared to $39 million in the prior-year period. The increase was driven by higher capital expenditures, primarily from the expansion of manufacturing facilities within our ESM segment, and the impact in the prior year of proceeds from the sale of certain assets.
Current wording
Net cash used for investing activities was $215 million for the six months ended June 30, 2026 compared to $118 million in the prior-year period. The increase was driven by higher capital expenditures, primarily from the expansion of manufacturing facilities within our ESM segment, and the impact in the prior year of proceeds from the sale of certain assets.
Previous wording
Net cash used for financing activities was $15 million for the three months ended March 31, 2026 compared to $118 million in the prior-year period. The decrease was driven by the absence of net transfers to Honeywell in the current period compared to the prior-year period. Quarterly dividend payments to shareowners were $12 million during the three months ended March 31, 2026.
Current wording
Net cash used for financing activities was $31 million for the six months ended June 30, 2026 compared to $12 million in the prior-year period. The increase was driven by dividend payments to shareowners of $24 million, partially offset by the absence of net transfers to Honeywell in the current period compared to the prior-year period.
Previous wording
As of March 31, 2026 and December 31, 2025, our cash and cash equivalents totaled $642 million and $534 million, respectively. We believe that we have sufficient liquidity based on our current cash position, expected operating cash flows and availability under our Credit Facilities to meet our expected payments related to our cash requirements for at least the next 12 months.
Current wording
As of June 30, 2026 and December 31, 2025, our cash and cash equivalents totaled $750 million and $534 million, respectively. We believe that we have sufficient liquidity based on our current cash position, expected operating cash flows and availability under our Credit Facilities to meet our expected payments related to our cash requirements for at least the next 12 months.
Previous wording
Cash and cash equivalents held by Solstice Advanced Materials’ foreign subsidiaries were $403 million and $363 million as of March 31, 2026 and December 31, 2025, respectively.
Current wording
Cash and cash equivalents held by Solstice Advanced Materials’ foreign subsidiaries were $485 million and $363 million as of June 30, 2026 and December 31, 2025, respectively.
Previous wording
Our capital expenditures primarily consist of continuing investments to maintain the safety and reliability of our existing operations, additional investments in new and existing facilities to support new production introduction and capacity expansion to grow our business. For the three months ended March 31, 2026 and 2025, our capital expenditures incurred were $82 million and $62 million, respectively. The increase was primarily driven by projects to support new products and solutions for our electronic materials and advanced fiber offerings. For the year ending December 31, 2026, we expect that our capital expenditures will be between $400 million and $425 million.
Current wording
Our capital expenditures primarily consist of continuing investments to maintain the safety and reliability of our existing operations, additional investments in new and existing facilities to support new production introduction and capacity expansion to grow our business. For the six months ended June 30, 2026 and 2025, our capital expenditures incurred were $186 million and $138 million, respectively. The increase was primarily driven by projects to support new products and solutions for our electronic materials and advanced fiber offerings. For the year ending December 31, 2026, we expect that our capital expenditures will be between $420 million and $440 million.
Previous wording
Honeywell agreed to provide us support through certain parent company performance guarantees that will remain in place during a transition period of up to 24 months following the Spin-off and as guarantor of or obligor for certain letters of credit and other credit support instruments that have been issued on our behalf during a transition period of up to 12 months following the Spin-off.
Current wording
Following the Spin-off, Honeywell had agreed to provide us support through certain parent company performance guarantees that would remain in place during a transition period of up to 24 months and as guarantor of or obligor for certain letters of credit and other credit support instruments that were issued on our behalf during a transition period of up to 12 months. Effective the second quarter of 2026, we no longer require credit support from Honeywell for letters of credit and other credit support instruments.
Previous wording
We maintain agreements with unaffiliated third-party financial institutions that offer voluntary supply chain financing (“SCF”) programs to our suppliers. The SCF programs enable suppliers, at their sole discretion, to sell their receivables to third-party financial institutions in order to receive payment on receivables earlier than the negotiated commercial terms between us and our suppliers. We had $98 million outstanding obligations related to our SCF programs as of both March 31, 2026 and December 31, 2025.
Current wording
We maintain agreements with unaffiliated third-party financial institutions that offer voluntary supply chain financing (“SCF”) programs to our suppliers. The SCF programs enable suppliers, at their sole discretion, to sell their receivables to third-party financial institutions in order to receive payment on receivables earlier than the negotiated commercial terms between us and our suppliers. We had $118 million and $98 million outstanding obligations related to our SCF programs as of June 30, 2026 and December 31, 2025, respectively.
Previous wording
There were no material changes during the three months ended March 31, 2026 to the items disclosed as critical accounting estimates in Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report on Form 10-K.
Current wording
There were no material changes during the three and six months ended June 30, 2026 to the items disclosed as critical accounting estimates in Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report on Form 10-K.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Cost of product and services sold increased by $107 million or 16% primarily driven by volume increases and inflation in raw materials in the RAS segment.
Current report — wording carried from elsewhere
The following table sets forth the factors contributing to year-over-year changes in our net sales for the six months ended June 30, 2026.
Current report — wording carried from elsewhere
A discussion of Net sales by reportable segment can be found under the “Segment Results” section within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Current report — wording carried from elsewhere
Research and development expenses increased by $8 million or 18% driven by continued investment in innovation across the portfolio of offerings such as Spectra Y and next-generation molecules; Selling, general and administrative expenses increased by $32 million or 16% driven by an increase in employee-related expenses, primarily in connection with additional headcount necessary to operate as an independent public company; Transaction-related costs decreased by $11 million or 18% driven by a decrease in professional advisory services fees incurred after the Spin-off, partially offset by expenses incurred in connection with potential strategic transactions; Other expense (income) remained relatively flat; and Interest and other financial charges increased by $50 million driven by the issuance of debt in connection with the Spin-off in the second half of 2025.
Current report — wording carried from elsewhere
Income tax expense decreased by $75 million. The effective tax rate in 2026 was lower than the effective tax rate in 2025 as a result of nondeductible transaction costs and incremental frictional tax costs related to the Spin-off from Honeywell in the prior-year period. See Note 5 – Income Taxes of the Notes to the Consolidated Financial Statements for additional information on the effective tax rate.
Current report — wording carried from elsewhere
Other adjustments primarily consisted of gains and losses from disposal of long-lived assets, remeasurement of foreign currencies, environmental reserves, asset retirement obligations, nonoperating pension expense (income), and certain legal costs, net of recoveries.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type. In addition, the Credit Agreement also contains financial covenants for the benefit of the lenders under the Revolving