ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and related notes to enhance the understanding of the Company’s operations and present business environment. Components of management’s discussion and analysis of financial condition and results of operations include:
• Overview
• Analysis of Operations
• Result of Operations
• Segment Results
• Outlook
• Liquidity and Capital Resources
• Recent Accounting Pronouncements
• Critical Accounting Estimates
• Long-Term Employee Benefits
• Environmental Matters
OVERVIEW
As of December 31, 2025, the Company has $1.7 billion of net working capital and $0.7 billion in cash and cash equivalents. The Company expects its cash and cash equivalents, cash generated from operations, and ability to access the debt capital markets to provide sufficient liquidity and financial flexibility to meet the liquidity requirements associated with its continued operations. The Company continually assesses its liquidity position, including possible sources of incremental liquidity, in light of the current economic environment, capital market conditions and Company performance.
Electronics Separation
On November 1, 2025, the Company completed the separation of its semiconductor and interconnect solutions businesses, (the "Electronics Business" and the separation of the Electronics Business, the “Electronics Separation”) into an independent public company, Qnity Electronics, Inc. (“Qnity”), by way of the distribution to DuPont's stockholders of record as of October 22, 2025, of all the issued and outstanding common stock of Qnity on November 1, 2025 (the “Qnity Distribution”). As a result, the financial results of the divested Electronics Business are reflected in DuPont's Consolidated Financial Statements as discontinued operations, along with comparative periods.
Aramids Divestiture
On August 29, 2025, DuPont announced a definitive agreement to sell the Aramids business (the “Aramids Divestiture”) to Arclin, a portfolio company of an affiliate of TJC LP, (“TJC”), in return for pre-tax cash proceeds of approximately $1.2 billion, subject to customary transaction adjustments, a note receivable in the principal amount of $300 million and a non-controlling common equity interest (the "Aramids Equity Consideration"), valued at $325 million in the future Arclin holding company that will hold the Arclin global materials business and the Aramids business being divested. The transaction is expected to close around the end of the first quarter 2026, subject to customary closing conditions and receipt of regulatory approvals. As a result, the financial results of the Aramids business being divested are reflected in DuPont's Consolidated Financial Statements as discontinued operations, along with comparative periods.
2025 Segment Realignments
Effective in the first quarter of 2025, in preparation for the Electronics Separation, the Company realigned its management and reporting structure. This realignment resulted in a change in reportable segments in the first quarter of 2025 which changed the manner in which the Company reported financial results by segment, (the "Q1 2025 Segment Realignment"). As a result, starting in the first quarter of 2025 and until the Electronics Separation, the businesses separated as part of the Electronics Separation were reported separately from the Industrials businesses of DuPont.
Effective in the fourth quarter of 2025, following the Electronics Separation, the Company realigned its management and reporting structure. This realignment resulted in a change in reportable segments which changed the manner in which the Company reports its financial results (the "Q4 2025 Segment Realignment"), creating two new reportable segments: Healthcare & Water Technologies and Diversified Industrials. The results of operations discussion included in Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as the segment information in the Consolidated Financial Statements, are reflective of the impact of the Q4 2025 Segment Realignment and reflect the two segment reporting structure for all periods presented.
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Mobility & Materials Divestitures
On November 1, 2022, DuPont completed the previously announced divestiture of the majority of the historical Mobility & Materials segment, including the Engineering Polymers business line and select product lines within the Advanced Solutions and Performance Resins business lines (the “M&M Divestiture”). On February 18, 2022, the Company announced that its Board of Directors approved of the divestiture of the Delrin ® acetal homopolymer (H-POM) business (the "Delrin ® Divestiture"). On November 1, 2023, the Company closed the sale of the Delrin ® business to TJC LP ("TJC"), (the “Delrin ® Divestiture”). DuPont received cash proceeds of approximately $1.28 billion, which includes certain customary transaction adjustments, a note receivable of $350 million and acquired a 19.9 percent noncontrolling equity interest in Derby Group Holdings LLC, (“Derby”). The customary transaction adjustments related to $27 million of cash transferred with the Delrin ® Divestiture for which DuPont was reimbursed at closing resulting in net cash proceeds of $1.25 billion. TJC, through its subsidiaries, holds the 80.1 percent controlling interest in Derby. The Delrin ® Divestiture together with the of the majority of the historic Mobility & Materials segment in 2022 (collectively the "M&M " and the businesses in scope for the M&M collectively the "M&M Businesses") represent a strategic shift that has a major impact on DuPont's operations and results.
The M&M Divestitures, Aramids Divestiture, and Electronics Separation represent strategic shifts with related major impacts on DuPont's operations and results and are reported as discontinued operations.
The Consolidated Financial Statements present the financial position of DuPont as of December 31, 2025 and 2024, the results of operations of DuPont for the years ended December 31, 2025, 2024 and 2023, and the Consolidated Statements of Cash Flows giving effect to the M&M Divestiture, Aramids Divestiture, and Electronics Separation as if each had occurred on January 1, 2023, with the historical financial results of the businesses divested as part of the aforementioned divestitures (the "M&M Businesses", “Aramids Business”, and “Electronics Business”) reflected as discontinued operations, as applicable. The comprehensive income related to the M&M Businesses, Aramids Business, and Electronics Business has not been segregated and are included in the Consolidated Statements of Comprehensive Income, for the years ended December 31, 2025, 2024 and 2023, as applicable. Unless otherwise indicated, the information in the Notes to the Consolidated Financial Statements refer only to DuPont's continuing operations and do not include discussion of balances or activity of discontinued operations
Sinochem Acquisition
On October 10, 2025, DuPont completed the acquisition of Sinochem (Ningbo) RO Memtech Co., Ltd. ("Sinochem") for a net purchase price of $56 million (the “Sinochem Acquisition”). Sinochem is a reverse osmosis manufacturer located in China and the Asia Pacific region. Sinochem is part of Water Technologies within the Healthcare & Water Technologies segment. See Note 3 to the Consolidated Financial Statements for additional information.
Donatelle Acquisition
On July 28, 2024, DuPont completed the acquisition of Donatelle Plastics, LLC ("Donatelle"), for a net purchase price of $365 million (the "Donatelle Acquisition") which includes immaterial adjustments for acquired cash and net working capital. The net purchase price also included the estimated fair value for a contingent earn-out liability of $40 million. Donatelle is a medical device company specializing in the design, development and manufacture of medical components and devices. Donatelle is part of Healthcare Technologies within the Healthcare & Water Technologies segment. See Note 3 to the Consolidated Financial Statements for additional information.
Spectrum Acquisition
On August 1, 2023, the Company completed the acquisition of Spectrum Plastics Group (“Spectrum”) from AEA Investors (the “Spectrum Acquisition”). Spectrum manufactures flexible packaging products, plastic and silicone extrusions, and components for the industrial, food and medical business sectors throughout the United States and international markets. Spectrum is primarily reported in the Healthcare Technologies business within the Healthcare & Water Technologies segment. The net purchase price was approximately $1,781 million, including a net upward adjustment of approximately $43 million for acquired cash and net working capital, among other items. See Note 3 to the Consolidated Financial Statements for additional information.
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ANALYSIS OF OPERATIONS
Qnity Distribution
In connection with the Qnity Distribution, DuPont has entered into certain agreements that provide for the allocation of DuPont’s assets, employees, liabilities and obligations among DuPont and Qnity, and provides a framework for DuPont’s relationship with Qnity following the Distributions. In connection with the Electronics Separation, effective November 1, 2025, DuPont and/or certain of its affiliates entered into certain agreements with Qnity and/or certain of its affiliates, including each of the following:
• Separation and Distribution Agreement - entered into a Separation and Distribution Agreement (the "Electronics Separation and Distribution Agreement") that sets forth, among other things, the agreements between the Company and Qnity regarding the principal transactions necessary to effect the Qnity Distribution. It also sets forth other agreements that govern certain aspects of the Company’s and Qnity’s ongoing relationship after the completion of the Qnity Distribution.
• Tax Matters Agreement - entered into a Tax Matters Agreement with Qnity (the “Electronics Tax Matters Agreement”). The Electronics Tax Matters Agreement governs the Company’s and Qnity’s respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.
• Employee Matters Agreement - entered into an Employee Matters Agreement with Qnity (the “Employee Matters Agreement”). The Employee Matters Agreement identifies employees and employee-related liabilities (and attributable assets) contractually allocated (either retained, transferred and accepted, or assigned and assumed, as applicable) to the Company and Qnity as part of the Distribution and describes when and how the relevant transfers and assignments occur or will occur.
• Intellectual Property Cross-License Agreement - entered into an Intellectual Property Cross-License Agreement with Qnity, effective as of November 1, 2025 (the “IP Cross-License Agreement”). The IP Cross-License Agreement sets forth the terms and conditions pursuant to which the Company and Qnity may use, following the Distribution, certain patents, know-how (including trade secrets), copyrights and software contractually allocated to the other party under the Electronics Separation and Distribution Agreement in the conduct of their respective businesses and natural evolutions thereof. The Company also licenses to Qnity certain engineering, safety, health and environmental standards that are contractually allocated to the Company under the Electronics Separation and Distribution Agreement and used by Qnity’s businesses as of the Distribution.
• Transition Services Agreement - entered into Transition Services Agreements with Qnity (the “Transition Services Agreements”). Pursuant to the Transition Services Agreements, the Company is providing certain transitional services to Qnity and Qnity is providing certain transitional services to the Company. The companies will reimburse each other for services provided.
• Legacy Liabilities Assignment Agreement - The Company entered into an assignment agreement with Qnity, effective as of November 1, 2025 (the “Legacy Liabilities Assignment Agreement”). Pursuant to the Legacy Liabilities Assignment Agreement, the Applicable Percentage (as defined in the Electronics Separation and Distribution Agreement) of any Legacy Liabilities (as defined in that certain Letter Agreement, dated as of June 1, 2019, by and between the Company (f/k/a DowDuPont Inc.) and Corteva, Inc. (the “Letter Agreement”) and any funding obligations of the Company under that certain Memorandum of Understanding, dated as of January 22, 2021, by and among the Company, Corteva, Inc., E. I. du Pont de Nemours and Company and The Chemours Company (the "MOU"), including with respect to the funding of the escrow account thereunder, will be contractually allocated to Qnity (and for which Qnity will indemnify the Company). For more information on the Letter Agreement and the MOU, see the discussion in Note 16 to the Consolidated Financial Statements.
On December 2, 2025, DuPont and Qnity determined and agreed, pursuant to the Electronics Separation and Distribution Agreement, dated as of November 1, 2025, that the Applicable Percentage (as defined in the Electronics Separation and Distribution Agreement) of DuPont is 56 percent and of Qnity is 44 percent.
Post Electronics Separation Capital Structure
In connection with the Electronics Separation, Qnity paid a cash distribution to DuPont of approximately $4.1 billion. See Note 15 to the Consolidated Financial Statements for more information. DuPont undertook a series of transactions to achieve its intended post-Electronics Separation capital structure by, among other actions, repaying approximately $4.0 billion aggregate principal amount of its senior notes. For more information, see the discussion below of Liquidity & Capital Resources within Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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Dividends
The Company’s Board of Directors authorized and the Company paid cash dividends on its outstanding common stock in each calendar quarter of 2025 and 2024. See Part II, Item 5 for information on cash distributions.
Share Buyback Programs
In the third quarter of 2023, DuPont entered into a $2 billion ASR which completed in the first quarter of 2024, repurchasing 27.9 million shares at an average price of $71.67 per share. This $2 billion ASR transaction completed DuPont's $5 billion share repurchase program announced in 2022.
In the first quarter 2024, the Company’s Board of Directors approved a $1 billion share repurchase program The Company completed a $500 million ASR transaction in the second quarter of 2024 under the program, repurchasing 6.9 million shares at an average price of $71.96 per share. The $500 million authority remaining under the program expired on June 30, 2025.
In the fourth quarter of 2025, the Company’s Board of Directors approved a new share repurchase authorization of up to $2 billion of common stock (the “$2B Authorization”). Under the $2B Authorization, repurchases may be made from time to time on the open market at prevailing market prices or in privately negotiated transactions off market, including accelerated share repurchase (“ASR”) transactions. The $2B Authorization will terminate once the authorized amount of shares have been repurchased and retired or when terminated by the Board of Directors. In the fourth quarter of 2025, DuPont entered into an ASR agreement with one counterparty for repurchase of about $500 million of common stock ("Q4 2025 ASR Transaction"). DuPont paid an aggregate of $500 million to the counterparty, whereby the counterparty is required to deliver a variable number of shares to the Company. DuPont received initial deliveries of 10.2 million shares of DuPont common stock at a price per share of $39.15, which were retired immediately and recorded as an increase to accumulated deficit of $400 million. In January 2026, the Q4 2025 ASR Transaction was completed. The settlement resulted in the delivery of approximately 2 million shares of DuPont common stock, which were retired immediately and will be recorded as an increase to accumulated deficit in the first quarter of 2026. In total, the Company repurchased 12.2 million shares at an average price of $40.89 per share under the Q4 2025 ASR Transaction.
See the discussion under Liquidity and Capital Resources starting on page 44 for more information.
The Inflation Reduction Act of 2022 introduced a 1 percent nondeductible excise tax imposed on the net value of certain stock repurchases made after December 31, 2022. The net value is determined by the fair market value of the stock repurchased during the tax year, reduced by the fair market value of stock issued during the tax year. The Company recorded total excise tax of $4 million and $8 million, respectively, as an increase to accumulated deficit for the years ended December 31, 2025 and 2024, reflected within stockholders' equity and a corresponding liability within "Accounts Payable" in the Consolidated Balance Sheets as of December 31, 2025 and 2024.
Interest Rate Swap Agreements
I n the second quarter of 2022, the Company entered into fixed-to-floating interest rate swap agreements (the “2022 Swaps”) with an aggregate notional principal amount totaling $1.0 billion to hedge changes in the fair value of the Company’s fixed-rate notes due 2038 attributable to interest rate change movements. These swaps effectively convert interest on the hedged portion of the 2038 Notes to a floating rate based on the Secured Overnight Financing Rate ("SOFR") through November 2032. The 2022 Swaps expire on November 15, 2032 and are carried at fair value. At inception, the 2022 Swaps were designated as a hedge.
On June 5, 2024, DuPont issued a notice of redemption to the bond trustee with respect to a partial redemption of $650 million aggregate principal amount of its 2038 Notes in accordance with their terms. The redemption was effective on June 15, 2024. As a result of the announced redemption, the Company dedesignated the current hedging relationship. At the time of dedesignation, the total amount recorded as a cumulative fair value basis adjustment on the 2038 Notes was a loss of $81 million of which $32 million was recognized as a component of the loss from partial extinguishment of debt recorded in "Sundry income (expense) – net" in the Consolidated Statements of Operations. The remaining $49 million basis adjustment is amortized to "Interest expense" in the Consolidated Statements of Operations over the remaining term of the 2038 Notes. The basis adjustment amortization recorded to "Interest expense" in the Consolidated Statement of Operations for the year ended December 31, 2024 was $1 million.
Similarly, in November 2025 DuPont redeemed an additional $226 million aggregate principal of its 2038 Notes in accordance with their terms and the special mandatory redemption feature of the Debt Exchange. Refer to Note 15 to the Consolidated Financial Statement for additional information on the Debt Exchange. At the time of the redemption, the total amount recorded as a cumulative fair value basis adjustment on the 2038 notes was a loss of $46 million, of which $11 million was recognized as a component of the loss from partial extinguishment of debt recorded in “Sundry income (expense) – net” in the Consolidated
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Statements of Operations. As a result of the accelerated redemption, the fair value basis adjustment equaled approximately $35 million and the basis adjustment amortization recorded to "Interest expense" in the Consolidated Statement of Operations for the year ended December 31, 2025, was $2 million.
Following its actions in the fourth quarter 2025 to achieve its post-Electronics Separation capital structure $774 million aggregate principal amount of the Company's 2038 Notes remained outstanding. To align the swap notional amount with the remaining debt, on November 3, 2025, the Company settled 23 percent of the notional of the 2022 Swaps related to the 2038 Notes for $10 million, representing the allocated fair value at settlement inclusive of accrued interest.
In November 2025, the Company redesignated 77 percent of the original 2022 Swaps as a partial-term fair value hedge of the remaining $774 million of the 2038 Notes through November 2032. No changes were made to the swap terms in connection with the redesignation. Upon redesignation, changes in the fair value of the hedging instruments and the hedged portion of the debt attributable to changes in the benchmark interest rate are recorded in "Interest expense" in the Consolidated Statements of Operations. As of December 31, 2025, the only interest rate swaps outstanding are the redesignated 77 percent portion of the 2022 Swaps. The hedging instrument is presented at fair value within “Other noncurrent obligations,” with accrued interest presented in “Accrued and other current liabilities” in the Consolidated Statements of Operations.
In addition to the 2022 Swaps, the Company entered into two forward‑starting fixed‑to‑floating interest rate swap agreements in June 2024 (the “2024 Swaps”) that were not designated as hedging instruments. The Company settled 30 percent of the 2024 Swap notional related to the 2048 Notes in September 2025 for approximately $20 million, representing the allocated fair value at the time of settlement. In November 2025, the Company settled the remaining 70 percent of the 2024 Swap notional related to the 2048 Notes and 100 percent of the 2024 Swap notional related to the 2038 Notes for a total of $92 million, also representing their respective fair values at the time of settlement.
Gains and losses related to interest rate swaps not designated as hedges, including the non‑designated periods of the 2022 Swaps and the 2024 Swaps, were recorded in “Sundry income (expense) – net” in the Consolidated Statements of Operations. The Company recognized a gain of $31 million for the year ended December 31, 2025 and a loss of $138 million for the year ended December 31, 2024. Cash flows associated with the settlement of non‑designated swaps are reflected within “Cash provided by operating activities – continuing operations” in the Consolidated Statements of Cash Flows.
See Note 21 of the Consolidated Financial Statements for additional information.
Restructuring Programs
Transformational Separation-Related Restructuring Program
In March 2025, the Company approved targeted restructuring actions to streamline, right-size and optimize specific organizational structures in preparation for the planned separation of the future Electronics company and the future New DuPont company, (the "Transformational Separation-Related Restructuring Program"). The Company recorded pre-tax restructuring charges of $69 million inception-to-date, consisting of severance and related benefit costs of $52 million, $12 million of asset related charges and $5 million of accelerated restricted stock compensation expense. Total liabilities related to the Transformational Separation-Related Restructuring Program were $34 million at December 31, 2025 recognized in "Accrued and other current liabilities" in the Consolidated Balance Sheets. The Company expects the program to be completed in 2026.
2023-2024 Restructuring Program
In December 2023, the Company approved targeted restructuring actions to capture near-term cost reductions due to macroeconomic factors as well as to further simplify certain organizational structures following the Spectrum acquisition and Delrin ® Divestiture (the "2023-2024 Restructuring Program"). DuPont recorded a pre-tax charge related to the 2023-2024 Restructuring Program in the amount of $147 million inception-to-date, recognized in "Restructuring and asset related charges – net" in the Company's Consolidated Statements of Operations, comprised of $89 million of severance and related benefit costs and asset related charges of $58 million. At December 31, 2025, total liabilities related to the 2023-2024 Restructuring Program were $10 million for severance and related benefit costs, recognized in "Accrued and other current liabilities" in the Consolidated Balance Sheets.
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2022 Restructuring Program
In October 2022, the Company approved targeted restructuring actions to capture near-term cost reductions and to further simplify certain organizational structures following the M&M Divestitures (the "2022 Restructuring Program"). The Company recorded a pre-tax charge related to the 2022 Restructuring Program in the amount of $69 million inception-to-date, comprised of $55 million of severance and related benefit costs and asset related charges of $14 million. The Company recorded pre-tax restructuring $2 million for the year ended December 31, 2024 and charges of $10 million for the year ended December 31, 2023.
Cost Sharing MOU
On January 22, 2021, the Company, Corteva, EIDP and Chemours entered into a binding Memorandum of Understanding (the “MOU”), pursuant to which the parties have agreed to share certain costs associated with potential future liabilities related to alleged historical releases of certain PFAS arising out of pre-July 1, 2015 conduct (“eligible PFAS costs”) until the earlier to occur of (i) December 31, 2040, (ii) the day on which the aggregate amount of qualified spend (as defined in the MOU) is equal to $4 billion or (iii) a termination in accordance with the terms of the MOU. The parties have agreed that, during the term of this sharing arrangement, Chemours will bear 50 percent of any qualified spend and the Company and Corteva shall together bear 50 percent of any qualified spend. As of December 31, 2025, the Company has recorded an indemnification liability of $185 million in connection with the cost sharing arrangement related to future eligible PFAS costs. This excludes amounts related to the State of New Jersey matters discussed in Note 16 to the Consolidated Financial Statements.
Pursuant to the Legacy Liabilities Assignment Agreement, 44% of any funding obligations of the Company under the MOU will be contractually allocated to Qnity (and for which Qnity will indemnify the Company).
Total pre-tax charges of $235 million, $46 million and $487 million related to the MOU are reflected as a loss from discontinued operations for the year ended December 31, 2025, 2024 and 2023, respectively, in the Company's Consolidated Statements of Operations.
The increase in pre-tax charges for the year ended December 31, 2025 compared to 2024 is primarily driven by the proposed Judicial Consent Order with the State of New Jersey (the "NJ Settlement"), agreed by Chemours, Corteva and DuPont in August 2025. The NJ Settlement is pending final judicial order. DuPont recorded a pre-tax charge of $186 million in 2025.
The decrease in pre-tax charges for the year ended December 31, 2024 compared to 2023 is primarily driven by the definitive agreement reached in June 2023 by Chemours, Corteva, EIDP and DuPont to comprehensively resolve all PFAS-related claims of a defined class of U.S. public water systems, (the “Water District Settlement Agreement”) for $1.185 billion in cash to be paid to a Qualified Settlement Fund, (the “Water District Settlement Fund”). The settlement became final in the second quarter 2024 and the Company’s total contribution, including interest, of $408 million was paid in 2024.
See Note 16 to the Consolidated Financial Statements for additional information.
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RESULTS OF OPERATIONS
Summary of Sales Results
For the Years Ended December 31,
In millions
Net sales
Sales Variances by Segment and Geographic Region - As Reported
For the Year Ended December 31, 2025
For the Year Ended December 31, 2024
Percentage change from prior year
Local Price & Product Mix
Currency
Volume
Portfolio & Other
Total
Local Price & Product Mix
Currency
Volume
Portfolio & Other
Total
Healthcare & Water Technologies
Diversified Industrials
Total
U.S. & Canada
EMEA 1
Asia Pacific
Latin America
Total
1. Europe, Middle East and Africa.
2025 versus 2024
The Company reported net sales for the year ended December 31, 2025 of $6.8 billion, up 2 percent from $6.7 billion for the year ended December 31, 2024, due to a 3 percent increase in volume partially offset by a 1 percent decrease due to local price and product mix. The volume increase was driven by Healthcare & Water Technologies (up 7 percent) partially offset by Diversified Industrials (down 1 percent). Local price and product mix was flat within Healthcare & Water Technologies and down 1 percent in Diversified Industrials.
2024 versus 2023
The Company reported net sales for the year ended December 31, 2024 of $6.7 billion, up 2 percent from $6.6 billion for the year ended December 31, 2023, due to a 4 percent increase in portfolio partially offset by a 2 percent decrease in volume. The volume decrease was driven by Healthcare & Water Technologies (down 6 percent) partially offset by Diversified Industrials (up 1 percent). Portfolio increased within Healthcare & Water Technologies (up 8 percent) and in Diversified Industrials (up 1 percent).
Cost of Sales
Cost of sales was $4.5 billion for both the year ended December 31, 2025 and December 31, 2024. Cost of sales for the year ended December 31, 2025 primarily reflects increased sales volume mostly offset by productivity initiatives.
Cost of sales as a percentage of net sales for the year ended December 31, 2025 was 65 percent compared with 67 percent for the year ended December 31, 2024.
For the year ended December 31, 2024, cost of sales was $4.5 billion, up from $4.4 billion for the year ended December 31, 2023. Cost of sales increased for the year ended December 31, 2024 primarily due to increased sales volume and lower raw material, logistics and energy costs.
Cost of sales as a percentage of net sales for the years ended December 31, 2024 and December 31, 2023 was flat at 67 percent.
Research and Development Expense ("R&D")
R&D expense was $193 million for the year ended December 31, 2025, down from $203 million for the year ended December 31, 2024 and up from $192 million for the year ended December 31, 2023. R&D as a percentage of net sales was consistent at 3 percent for the years ended December 31, 2025, 2024 and 2023.
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Selling, General and Administrative Expenses ("SG&A")
For the year ended December 31, 2025, SG&A expenses totaled $1,019 million, up from $976 million in the year ended December 31, 2024 and $891 million for the year ended December 31, 2023. SG&A as a percentage of net sales was 15 percent for the years ended December 31, 2025 and 2024 and 13 percent for the year ended December 31, 2023.
The increase in SG&A cost in 2025 compared to 2024 was primarily due to higher personnel related expenses and growth investments. The increase in SG&A costs in 2024 compared with 2023 was primarily due to higher variable compensation and incremental cost from the Spectrum Acquisition and Donatelle Acquisition.
Amortization of Intangibles
Amortization of intangibles was $291 million, $294 million and $267 million for the years ended December 31, 2025, 2024 and 2023, respectively. The slight decrease in amortization of intangibles in 2025 compared to 2024 was primarily due to the absence of amortization in 2025 from fully amortized assets partially offset by the amortization of the intangible assets acquired in the Donatelle Acquisition in the third quarter of 2024. The increase in amortization of intangibles in 2024 compared to 2023 was primarily due to the amortization of the intangible assets acquired in the Spectrum Acquisition in the third quarter of 2023. See Note 14 to the Consolidated Financial Statements for additional information on intangible assets.
Restructuring and Asset Related Charges - Net
Restructuring and asset related charges - net were $151 million, $57 million and $99 million for the years ended December 31, 2025, 2024 and 2023, respectively. For the years ended December 31, 2025 and 2024, DuPont recorded a pre-tax charge related to the Transformational Separation-Related Restructuring Program in the amount of $69 million . For the years ended December 31, 2024 and 2023, DuPont recorded a pre-tax charge related to the 2023-2024 Restructuring Program in the amount of $59 million and $89 million, respectively . For the year ended December 31, 2024, DuPont recorded a pre-tax benefit related to the 2022 Restructuring Program in the amount of $2 million and for the year ended December 31, 2023, DuPont recorded a pre-tax charge related to the 2022 Restructuring Program of $10 million .
During the fourth quarter of 2025, due to the changes in facts and circumstances relevant to potential impairment triggers, the Company performed an impairment analysis on certain fixed assets and equity method investments. After the Electronics Separation, the Company evaluated a previously capitalized consolidation system due to uncertainties around implementation timing, as well as potential developments and changes to technologies in the marketplace and concluded the use of the consolidation system could no longer be considered probable. As a result, due to the specificity of the design related to the system, the Company determined that the uncompleted system had a fair value of zero and recorded a pre-tax charge of $73 million in "Restructuring and asset related charges - net" in the Consolidated Statement of Operations for the year ended December 31, 2025.
As a result of the aforementioned analysis, the Company recorded an additional pre-tax, non-cash impairment charges of $10 million to write-down the value of a certain equity method investment. The charge was recognized in “Restructuring and asset related charges-net” in Consolidated Statements of Operations for the year ended December 31, 2025.
See Note 6 to the Consolidated Financial Statements for additional information. Inventory write-offs associated with restructuring programs are recorded to "Cost of sales” in the Consolidated Statements of Operations.
Goodwill Impairment Charges
For the years ended December 31, 2025 and 2024, there were no goodwill impairment charges related to continuing operations. For the year ended December 31, 2023, there was a goodwill impairment charge of $668 million related to the Diversified Industrials segment. See Note 14 to the Consolidated Financial Statements for additional information.
For the year ended December 31, 2025, there was a goodwill impairment charge of $768 million related to the Aramids Business which is presented in discontinued operations. For the year ended December 31, 2023, there was an impairment charge of $136 million related to the Aramids Business which is presented in discontinued operations.
Acquisition, Integration and Separation Costs
Acquisition, integration and separation costs were $203 million, $90 million and $19 million for the years ended December 31, 2025, 2024 and 2023, respectively. Acquisition, integration and separation costs primarily consist of financial advisory, information technology, legal, accounting, consulting, other professional advisory fees and other contractual transaction payments. For the year ended December 31, 2025, these costs were primarily related to the Electronics Separation and preparations for the Aramids Divestiture. For the year ended December 31, 2024, these costs were primarily related to the Electronics Separation. For the year ended December 31, 2023, these costs were primarily related to Spectrum Acquisition.
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Equity in (Loss) Earnings of Nonconsolidated Affiliates
The Company's share of the loss of nonconsolidated affiliates was $7 million and $6 million and for the years ended December 31, 2025 and 2024, respectively. The Company's share of the earnings of nonconsolidated affiliates was $1 million for the year ended December 31, 2023. The decrease in earnings of nonconsolidated affiliates for the year ended December 31, 2025 and 2024 compared to 2023 is primarily due to adding Derby Group Holdings LLC as a nonconsolidated affiliate in November 2023.
Sundry Income (Expense) - Net
Sundry income (expense) - net includes a variety of income and expenses such as foreign currency exchange gains or losses, interest income, dividends from investments, gains and losses on sales of investments, losses on debt extinguishments and assets, non-operating pension and other post-employment benefit plan credits or costs, interest rate swap mark-to-market adjustments, interest rate swap net interest settlement and certain litigation matters. "Sundry income (expense) – net" for the year ended December 31, 2025 was $14 million of income compared with $111 million of expense and $80 million of income in the years ended December 31, 2024 and 2023, respectively.
The year ended December 31, 2025 included a $31 million net gain related to interest rate swap activity including mark-to-market adjustments and $98 million of interest income, partially offset by $114 million loss on debt extinguishment. The increase in interest income period over period is due to activity surrounding the Electronics Separation, including proceeds from the Notes that were invested prior to the separation date and distributions that were invested after the separation date.
The year ended December 31, 2024 included a $138 million net loss related to interest rate swap activity including mark-to-market adjustments and a $74 million loss on debt extinguishment, partially offset by $74 million of interest income. The decrease in interest income period over period is due to the decreased cash balance in 2024.
The year ended December 31, 2023 included interest income of $155 million and a $11 million net gain on divestiture and sales of other assets, primarily related to a land sale within Healthcare & Water Technologies segment, partially offset by foreign currency exchange losses of $77 million.
See Note 7 to the Consolidated Financial Statements for additional information.
Interest Expense
Interest expense was $313 million, $366 million, and $396 million for the years ended December 31, 2025, 2024 and 2023, respectively. The decrease in interest expense in 2025 compared to 2024 is primarily due to the changes in capital structure during 2025, partially offset by commercial paper borrowings. For more information see the discussion below of Liquidity & Capital Resources within Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The decrease in interest expense in 2024 compared to 2023 is primarily due to the absence of interest expense on the $300 million floating-rate long-term senior unsecured notes that matured in November 2023 and the partial redemption of $650 million aggregate principal amount of the 2038 notes during the second quarter 2024, partially offset by a reduction in capitalized interest.
Refer to Note 15 to the Consolidated Financial Statements for additional information.
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Provision for (benefit from) Income Taxes on Continuing Operations
The Company's effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to tax attributes. For the year ended December 31, 2025, the Company's effective tax rate was 51.0 percent on pre-tax income from continuing operations of $200 million. The effective tax rate for the year ended December 31, 2025, was principally driven by U.S. taxation of foreign operations, the geographic mix of earnings and the tax impacts of separation costs.
For the year ended December 31, 2024, the Company's effective tax rate was 182.1 percent on pre-tax income from continuing operations of $117 million. The effective tax rate for the year ended December 31, 2024, was principally driven by the geographic mix of earnings offset by the U.S. taxation of foreign operations as well as certain discrete tax expenses, including the settlement in the second quarter of an international tax audit for which the Company is partially indemnified. In addition, there was a $103 million tax expense recorded in connection with an internal restructuring.
For the year ended December 31, 2023, the Company's effective tax rate was 77.7 percent on pre-tax loss from continuing operations of $279 million. The effective tax rate differential was principally the result of $324 million tax benefit recorded in connection with an internal restructuring, partially offset by the non-tax-deductible goodwill impairment charge of $140 million in the fourth quarter of 2023.
The underlying factors affecting the Company’s overall tax rate are summarized in Note 8 to the Consolidated Financial Statements.
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SEGMENT RESULTS
The revenues and certain expenses of the M&M Divestitures, Aramids Business, and Electronics Business are classified as discontinued operations in the current and historical periods.
The costs of the M&M Businesses, Aramids Business, and Electronics Business that are classified as discontinued operations include only direct operating expenses incurred by the businesses. Indirect costs, such as those related to corporate and shared service functions previously allocated to the M&M Businesses, Aramids Business, and Electronics Business, do not meet the criteria for discontinued operations and are reported within continuing operations. A portion of these indirect costs include costs related to activities the Company will or continues to undertake post-closing of the M&M Divestitures, Aramids Divestiture, and Electronics Separation, and for which it is or will be reimbursed (“Future Reimbursable Indirect Costs”). Future Reimbursable Indirect Costs are reported within continuing operations in Corporate but are excluded from Operating EBITDA as defined below. The remaining portion of these indirect costs are not subject to future reimbursement (“Stranded Costs”). Stranded Costs are reported within continuing operations in Corporate and are included within Operating EBITDA.
On August 1, 2023, the Company completed the previously announced Spectrum Acquisition. Spectrum is primarily reported in the Healthcare Technologies business within the Healthcare & Water Technologies segment.
On July 28, 2024, DuPont completed the Donatelle Acquisition. Donatelle is part of Healthcare Technologies within the Healthcare & Water Technologies segment .
On October 10, 2025, the Company completed the Sinochem Acquisition. Sinochem is a reverse osmosis manufacturer located in China and the Asia Pacific region. Sinochem is part of Water Technologies within the Healthcare & Water Technologies segment.
Effective in the fourth quarter of 2025, following the Electronics Separation, the Company realigned its management and reporting structure. This realignment resulted in a change in reportable segments which changed the manner in which the Company reports its financial results, creating two new reportable segments: Healthcare & Water Technologies and Diversified Industrials. The results of operations discussion included in Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as the segment information in the Consolidated Financial Statements, are reflective of the impact of the Q4 2025 Segment Realignment. The Consolidated Financial Statements reflect the two segment reporting structure for all periods presented.
The Company's measure of profit/loss for segment reporting purposes is Operating EBITDA as this is the manner in which the Company's chief operating decision maker ("CODM") assesses performance and allocates resources. The Company defines Operating EBITDA as earnings (i.e., “Income from continuing operations before income taxes") before interest, depreciation, amortization, non-operating pension / other post-employment benefits (“OPEB”) / charges, and foreign exchange gains / losses, excluding future reimbursable indirect costs, remediation costs associated with divested businesses, and is adjusted for significant items.
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HEALTHCARE & WATER TECHNOLOGIES
Healthcare & Water Technologies
For the Years Ended December 31,
In millions
Net sales
Operating EBITDA
Equity earnings
Healthcare & Water Technologies
For the Years Ended December 31,
Percentage change from prior year
Change in Net Sales from Prior Period due to:
Local price & product mix
Currency
Volume
Portfolio & other
Total
2025 Versus 2024
Healthcare & Water Technologies net sales were $3,233 million for the year ended December 31, 2025, up 9 percent from $2,976 million for the year ended December 31, 2024. Net sales increased due to a 7 percent increase in volume, a 1 percent increase in portfolio actions, and a 1 percent favorable currency impact. Within Healthcare Technologies, volume gains were driven by broad-based growth led by medical packaging and biopharma. Within Water Technologies, volume gains were driven by strength in industrial and municipal water markets.
Operating EBITDA was $972 million for the year ended December 31, 2025, up 15 percent compared with $844 million for the year ended December 31, 2024 primarily due to volume growth and productivity, partially offset by growth investments.
2024 Versus 2023
Healthcare & Water Technologies net sales were $2,976 million for the year ended December 31, 2024, up 2% percent from $2,919 million for the year ended December 31, 2023. Net sales increased due to an 8 percent increase in portfolio offset by a 6 percent decline in volume. Healthcare & Water Technologies had volume declines mainly due to channel inventory destocking, primarily in medical packaging products within healthcare markets and water distributor inventory destocking from weaker industrial demand in China. The portfolio impact reflects the August 2023 acquisition of Spectrum and the July 2024 acquisition of Donatelle.
Operating EBITDA was $844 million for the year ended December 31, 2024, down 3% percent compared with $866 million for the year ended December 31, 2023 primarily due to driven by decreased volumes and higher variable compensation offset by productivity and savings from restructuring actions.
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DIVERSIFIED INDUSTRIALS
Diversified Industrials
For the Years Ended December 31,
In millions
Net sales
Operating EBITDA
Equity earnings
Diversified Industrials
For the Years Ended December 31,
Percentage change from prior year
Change in Net Sales from Prior Period due to:
Local price & product mix
Currency
Volume
Portfolio & other
Total
2025 Versus 2024
Diversified Industrials net sales were $3,616 million for the year ended December 31, 2025, down 3 percent from $3,743 million for the year ended December 31, 2024 due to a 1 percent declines in volume, local price and product mix, and portfolio actions. The decline in volume was driven by Building Technologies, partially offset by increase in volumes for Industrial Technologies. Building Technologies volume declines were due to ongoing weakness in construction markets. Industrial Technologies volume increases were led by growth in aerospace markets, automotive and consumer goods packaging. The portfolio decline related to exit of the Tedlar ® business from participation in the photovoltaic end market in late 2024.
Operating EBITDA was $800 million for the year ended December 31, 2025, down 5 percent compared with $839 million for the year ended December 31, 2024 driven by the impact of volume declines, with some offset from cost productivity.
2024 Versus 2023
Diversified Industrials net sales were $3,743 million for the year ended December 31, 2024, up 1 percent from $3,695 million for the year ended December 31, 2023 due to a 1 percent increase in volume and a 1 percent increase in portfolio actions, partially offset by a 1 percent unfavorable currency impact. Volume increases were primarily due to increases in volumes for Industrial Technologies mainly due to growth in automotive and aerospace markets, as well as volume growth in consumer product packaging. The small portfolio increase reflects the non-healthcare portion of the August 2023 Spectrum acquisition within Industrial Technologies. The unfavorable currency impact is primarily driven by the Japanese yen and Chinese yen, partially offset by the Euro.
Operating EBITDA was $839 million for the year ended December 31, 2024, up 6% percent compared with $792 million for the year ended December 31, 2023 driven by increased sales volumes and a positive portfolio impact partially offset by an unfavorable currency.
2026 OUTLOOK
For the full year 2026, the Company expects continued growth within Healthcare driven by broad-based strength in medical packaging applications and medical devices. In Water, the Company expects continued growth primarily driven by demand for reverse osmosis and ion exchange within industrial and municipal water markets. Within Building Technologies, after a year of market declines, the Company expects 2026 to be about flat, on stabilization within US construction markets. In Industrial Technologies, the Company expects low-single digit growth year over year driven by strength in aerospace and demand recovery within markets served by DuPont's remaining industrial-based product lines.
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LIQUIDITY & CAPITAL RESOURCES
The Company continually reviews its sources of liquidity and debt portfolio and may make adjustments to one or both to ensure adequate liquidity and increase the Company’s optionality and financing efficiency as it relates to financing cost and balancing terms/maturities. The Company’s primary source of incremental liquidity is cash flows from operating activities. Management expects 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 the Company’s and its subsidiaries' obligations as they come due. However, DuPont is unable to predict the extent of macroeconomic related impacts which depend on uncertain and unpredictable future developments. In light of this uncertainty, the Company has taken steps to further ensure liquidity and capital resources, as discussed below.
In millions
December 31, 2025
December 31, 2024
Cash and cash equivalents
Total debt
The Company's cash and cash equivalents at December 31, 2025 and December 31, 2024 were $0.7 billion and $1.8 billion, respectively, of which $0.6 billion at December 31, 2025 and $1.1 billion at December 31, 2024 were held by subsidiaries in foreign countries, including United States territories. For each of its foreign subsidiaries, the Company makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States. The decrease in cash and cash equivalents at December 31, 2025 compared to December 31, 2024 was due to cash balance transferred to Qnity at separation, cash used to fund the $500 million ASR entered in the fourth quarter 2025, transaction costs related to the Electronics Separation, fees paid on the transactions discussed below under Debt Exchange , Consent Solicitation and Tender Offer , the Sinochem Acquisition and general corporate purposes. Refer to subsequent paragraphs for further discussion of the drivers of the change in cash and cash equivalents.
Total debt at December 31, 2025 and 2024 was $3.2 billion and $7.2 billion, respectively. The decrease was primarily due to the repayment of 2025 Notes of $1,850 million due in November 2025, the partial redemption of New Notes (as defined below) triggered by the Special Mandatory Redemption Event and the partial redemption of 2048 Notes as part of the Tender Offer (as defined below) partially offset by commercial paper borrowings.
As of December 31, 2025, the Company is contractually obligated to make future cash payments of $3.2 billion and $2.1 billion associated with principal and interest, respectively, on debt obligations. Related to the principal, all payments will be due subsequent to 2026. Related to interest, $165 million will be due in the next twelve months and the remainder will be due subsequent to 2026. The majority of interest obligations will be due in 2031 or later.
2024 Capital Structure Actions
On June 5, 2024, DuPont issued a notice of redemption to the bond trustee with respect to a partial redemption of $650 million aggregate principal amount of its 2038 Notes (the "2038 Notes"), in accordance with their terms. The partial redemption occurred on June 15, 2024, at the redemption price set forth in the indenture of the 2038 Notes. The Company funded the repayment with cash on hand. As a result of the early redemption of the debt, for the year ended December 31, 2024, the Company incurred a loss of approximately $74 million, which consisted of the redemption premium, write-off of the deferred debt issuance costs and the basis adjustment from fair value hedge accounting on the 2022 Swaps associated with this borrowing. See Note 21 for further detail on the 2022 Swaps.
Debt Exchange
In September 2025, in connection with the Electronics Separation, DuPont announced the commencement of offers to exchange any and all of its outstanding (i) 4.725% Notes due 2028, (ii) 5.319% Notes due 2038 and (iii) 5.419% Notes due 2048 (respectively, the “2028 Notes”, the “2038 Notes” and the “2048 Notes” and collectively, the “Existing Notes”) for new notes to be issued by DuPont (respectively, the “2028 New Notes”, the “2038 New Notes” and the “2048 New Notes” and collectively, the “New Notes” and the exchanges of notes collectively, the "Exchange Offers"). DuPont solicited consents from eligible holders of each series of Existing Notes (collectively, the "Consent Solicitations") to adopt certain proposed amendments to the indenture governing the Existing Notes to eliminate substantially all of the restrictive covenants and amend certain other provisions in such indenture with respect to each series of Existing Notes. The Exchange Offers expired on September 30, 2025 with all validly tendered 2028 Notes accepted for exchange, totaling approximately $1.58 billion, representing 70.42% of the outstanding amount. Therefore, sufficient consent was validly obtained on the 2028 Notes, and the proposed amendments were adopted. Sufficient consents to the proposed amendments were not received for the 2038 and 2048 Notes. The exchange offer was settled in October 2025 and in connection with the settlement of the Exchange Offers, DuPont issued $1.58 billion aggregate principal amount of the 2028 New Notes in exchange for the 2028 Notes tendered and accepted by DuPont, approximately $226 million aggregate principal amount of 2038 New Notes in exchange for the 2038 Notes tendered and accepted by DuPont and approximately $295 million aggregate principal amount of 2048 New Notes in exchange for the 2048 Notes tendered and accepted by DuPont.
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Upon the completion of the Electronics Separation, the special mandatory redemption event was triggered under each series of New Notes (the "Special Mandatory Redemption Event"). As a result, DuPont was required to redeem $900 million principal amount of the 2028 New Notes, approximately $226 million principal amount of the 2038 New Notes and approximately $295 million principal amount of the 2048 New Notes (such redemption the "Special Mandatory Redemption"). The Company sent redemption notices to the holders of the New Notes on November 3, 2025 and the Special Mandatory Redemption was completed on November 7, 2025.
Consent Solicitation and Tender Offer
In November 2025, DuPont entered into a transaction support agreement (the “Transaction Support Agreement”) with certain noteholders (the “Supporting Holders”) that beneficially own $649 million (or approximately 83.9%) of the 2038 Notes and $1,118 million (or approximately 60.25%) of the 2048 Notes. DuPont agreed to launch and the Supporting Holders agreed to provide their consents with respect to their 2038 Notes and 2048 Notes in support of a solicitation of consents (the “Consent Solicitation”) with respect to the adoption of certain proposed amendments to the Indenture governing the applicable series of 2038 Notes and 2048 Notes and to tender $1,029 million aggregate principal amount of their 2048 Notes into a tender offer (the “Tender Offer”) to purchase for cash up to $739 million aggregate principal amount of the 2048 Notes (the "Tender Cap") at a purchase price equal to $1,000 per $1,000 aggregate principal amount of 2048 Notes plus accrued and unpaid interest (if any) thereon to, but excluding, the applicable settlement date of the Tender Offer. The requisite consents to adopt the proposed amendments were received and the Tender Offer was completed in November 2025. As a result of the Tender Offer, in November 2025, DuPont settled $739 million aggregate principal of the 2048 Notes.
The Exchange Offers and Consent Solicitation were accounted for as debt modifications and all creditor fees paid were capitalized and were set to amortize as an adjustment to “Interest expense” in the Consolidated Statement of Operations over the remaining term of the Existing Notes and New Notes. As a result of the Special Mandatory Redemption Event and Tender Offer, the respective Existing Notes and New Notes redeemed were derecognized at their carrying value. Related to the above activities, the Company incurred a loss of approximately $114 million to “Sundry income (expense) – net” in the Consolidated Statements of Operations, which consisted of the redemption premium, third party fees, write-off of deferred debt issuance costs, including capitalized creditor fees incurred as part of the Exchange Offers and Consent Solicitation and the basis adjustment from fair value hedge accounting on the Company’s interest rate swap agreements associated with the redeemed bonds.
Revolving Credit Facilities
In May 2025, the Company entered into a $1 billion 364-day revolving credit facility (the "2025 $1B Revolving Credit Facility"). The Company held another $1 billion 364-day revolving credit facility that expired in May 2025. There were no drawdowns of either facility during year ended December 31, 2025. The 2025 $1B 364-Day Revolving Credit Facility will be used for general corporate purposes.
In May 2025, the Company amended its $2.5 billion 5-year revolving credit facility (the "Five-Year Revolving Credit Facility") to extend the maturity date to April 2028. In addition, the committed credit amount under the Five-Year Revolving Credit Facility decreased to $2.0 billion upon the occurrence of the Electronics Separation.
The following table summarizes the Company's credit facilities:
Committed and Available Credit Facilities at December 31, 2025
In millions
Effective Date
Committed Credit
Credit Available
Maturity Date
Interest
Five-Year Revolving Credit Facility 1
April 2022
April 2028
Floating Rate
2025 $1B Revolving Credit Facility 2
May 2025
May 2026
Floating Rate
Total Committed and Available Credit Facilities
1. The Five-Year Revolving Credit Facility is generally expected to remain undrawn and serve as a backstop to the Company’s commercial paper and letter of credit issuance.
2. The 2025 $1B Revolving Credit Facility is available to be used for general corporate purposes. The Company intends to enter into a new 364-day revolving credit facility in the second quarter 2026.
In November 2023, the $300 million Floating Rate Senior Unsecured Notes matured and was repaid at par plus the accrued and unpaid interest. The Company funded the repayment with cash on hand.
In November 2025, the $1,850 million Fixed Rate Senior Unsecured Notes matured and was repaid at par plus the accrued and unpaid interest. The Company funded the repayment with cash proceeds from the Electronics Separation.
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Commercial Paper
In 2025 upon occurrence of the Electronics Separation, the Company reduced its authorized commercial paper program to $2,000 million from $2,500 million. At December 31, 2025, the Company had $60 million outstanding of commercial paper. At December 31, 2024 and 2023, the Company had no outstanding commercial paper.
New Jersey Settlement Agreement
The NJ Settlement is subject to the entry of a Judicial Consent Order ("JCO") by the Court. It is payable over 25 year. DuPont's initial payment will be due within 30 days of the entry of the JCO. See Note 16 to the Consolidated Financial Statements for additional information.
Sinochem Acquisition
On October 10, 2025, DuPont completed the Sinochem acquisition for a net purchase price of $56 million. The Company utilized existing cash balances to complete the acquisition.
Donatelle Acquisition
On July 28, 2024, DuPont completed the Donatelle Acquisition for a net purchase price of $365 million, which included the estimated fair value for a contingent earn-out liability of $40 million. The Company utilized existing cash balances to complete the acquisition.
Spectrum Acquisition
On August 1, 2023, the Company completed the Spectrum Acquisition for a net purchase price of approximately $1,781 million, including a net upward adjustment of approximately $43 million for acquired cash and net working capital, among other items. The Company utilized existing cash balances to complete the acquisition.
Water District Settlement Agreement
The Company utilized the MOU escrow account balance of approximately $100 million and cash on hand to make its $400 million contribution to the Water District Settlement Fund. The judgment became final in April 2024, therefore the $400 million contribution, plus interest, to the Water District Settlement Fund is reflected as a cash outflow within "Cash Flows from Discontinued Operations" during the year ended December 31, 2024. See Note 16 to the Consolidated Financial Statements for additional information.
Delrin ® Divestiture
On November 1, 2023, the Company closed the sale of the Delrin ® business to TJC LP ("TJC"), (the “Delrin ® Divestiture”). DuPont received cash proceeds of approximately $1.28 billion, which includes certain customary transaction adjustments, a note receivable of $350 million and acquired a 19.9 percent noncontrolling equity interest in Derby Group Holdings LLC, (“Derby”). The customary transaction adjustments include $27 million of cash transferred with the Delrin ® Divestiture for which DuPont was reimbursed at closing resulting in net cash proceeds of $1.25 billion. TJC, through its subsidiaries, holds the 80.1 percent controlling interest in Derby. See Note 4 to the Consolidated Financial Statements for additional information.
Credit Ratings
The Company's credit ratings impact its access to the debt capital markets and cost of capital. The Company remains committed to maintaining a strong financial position with a balanced financial policy focused on maintaining a strong investment-grade rating and driving shareholder value and remuneration. At January 31, 2026, DuPont's credit ratings were as follows:
Credit Ratings
Long-Term Rating
Short-Term Rating
Outlook
Standard & Poor’s
BBB+
Stable
Moody’s Investors Service
Baa1
Stable
Fitch Ratings
BBB+
Stable
The Company's indenture covenants include customary limitations on liens, sale and leaseback transactions, and mergers and consolidations, subject to certain limitations. The Five-Year Revolving Credit Facility and the 364-Day Revolving Credit Facility contain a financial covenant, typical for companies with similar credit ratings, requiring that the ratio of Total Indebtedness to Total Capitalization for the Company and its consolidated subsidiaries not exceed 0.60. At December 31, 2025, the Company was in compliance with this financial covenant.
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Summary of Cash Flows
The Company’s cash flows from operating, investing and financing activities, as reflected in the Consolidated Statements of Cash Flows, are summarized in the following table.
Cash Flow Summary
(In millions) For the years ended December 31,
Cash provided by (used for) from continuing operations:
Operating activities
Investing activities
Financing activities
Cash provided by discontinued operations
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Cash Flows provided by Operating Activities - Continuing Operations
Cash provided by operating activities of continuing operations was $560 million, $765 million and $845 million for the years ended December 31, 2025, 2024 and 2023, respectively. Cash provided by operating activities decreased in 2025 compared with 2024, primarily from cash paid to settle interest rate swaps, fees paid on the Debt Exchange, Consent Solicitation and Tender Offer and cash used by working capital. Cash provided by operating activities decreased in 2024 compared with 2023, primarily from higher net loss from continuing operations partially offset by improvements in net working capital.
The table below reflects net working capital on a continuing operations basis:
Net Working Capital
December 31, 2025
December 31, 2024
In millions (except ratio)
Current assets
Current liabilities
Net working capital
Current ratio
Cash Flows used for/provided by Investing Activities - Continuing Operations
Cash used for investing activities of continuing operations was $374 million and $562 million in 2025 and 2024, respectively, compared to cash provided by investing activities of $481 million in 2023. The decrease in cash used for investing activities in 2025 versus 2024 is primarily attributable to change in cash paid for acquisitions in each year partially offset by higher capital expenditures.
The change in cash used for investing activities in 2024 versus cash provided by investing activities in 2023 is primarily attributable to the absence of proceeds received from sales and maturity of investments and absence of proceeds from the Delrin ® Divestiture partially offset by less cash used for acquisitions in 2024. Cash provided by investing activities in 2023 is primarily attributable to the proceeds received from sales and maturity of investments and proceeds from the Delrin ® Divestiture partially offset by the cash paid for Spectrum acquisition and capital expenditures.
Capital expenditures totaled $333 million, $285 million and $302 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company expects 2026 capital expenditures to be about $320 million. The Company may adjust its spending throughout the year as economic conditions develop.
Cash Flows used for Financing Activities - Continuing Operations
Cash used for financing activities of continuing operations in 2025 was $1,750 million compared to cash used for financing activities of $1,826 million and $2,956 million in 2024 and 2023, respectively . The decrease in cash used for financing activities in 2025 versus the 2024 is primarily attributable to the $4.1 billion cash distribution from Qnity largely offsetting higher payments on long-term debt during 2025 and cash transferred as part of the Qnity Distribution. The decrease in cash used in 2024 versus 2023 is primarily attributable to the decrease in share buyback activities partially offset by increased payments on long-term debt.
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Cash Flows provided by Discontinued Operations
Cash provided by discontinued operations for the years ended December 31, 2025, 2024 and 2023 was $421 million, $774 million and $698 million, respectively. The activity for the year ended December 31, 2025, 2024 and 2023 Consolidated Statements of Cash Flows present the cash flows of the Aramids Business and the Electronics Business as discontinued operations. The activity for the year ended December 31, 2023, Consolidated Statements of Cash Flows present the cash flows of Delrin ® as discontinued operations. Cash used from discontinued operations includes MOU activity, refer to Note 4 to the Consolidated Financial Statements for additional information.
Dividends
The following table provides dividends paid to common shareholders for the years ended December 31, 2025, 2024 and 2023:
Dividends Paid
December 31, 2025
December 31, 2024
December 31, 2023
In millions
Dividends paid, per common share
Dividends paid to common stockholders
Share Buyback Programs
In the third quarter of 2023, DuPont entered into a $2 billion ASR which it completed in the first quarter of 2024, repurchasing 27.9 million shares at an average price of $71.67 per share. This $2 billion ASR transaction completed DuPont's $5 billion share repurchase program announced in 2022.
In the first quarter 2024, the Company’s Board of Directors approved a $1 billion share repurchase program The Company completed a $500 million ASR transaction in the second quarter of 2024 under the program, repurchasing 6.9 million shares at an average price of $71.96 per share. The $500 million authority remaining under the program expired on June 30, 2025.
In November 2025, the Company's Board of Directors approved a new share repurchase authorization of up to $2 billion of common stock (the “$2B Authorization”). Under the $2B Authorization, repurchases may be made from time to time on the open market at prevailing market prices or in privately negotiated transactions off market, which may include accelerated share repurchase transactions. The $2B Authorization will terminate once the authorized amount of shares have been repurchased and retired or when terminated by the Board of Directors. The timing and number of shares to be repurchased will depend on factors such as the share price, economic and market conditions, and corporate and regulatory requirements.
In the fourth quarter of 2025, DuPont entered into an ASR agreement with one counterparty for repurchase of about $500 million of common stock ("Q4 2025 ASR Transaction"). DuPont paid an aggregate of $500 million to the counterparty, whereby the counterparty is required to deliver a variable number of shares to the Company. DuPont received initial deliveries of 10.2 million shares of DuPont common stock at a price per share of $39.15, which were retired immediately and recorded as an increase to accumulated deficit of $400 million. In January 2026, the Q4 2025 ASR Transaction was completed. The settlement resulted in the delivery of approximately 2 million shares of additional DuPont common stock, which were retired immediately and will be recorded as an increase to accumulated total deficit in the first quarter of 2026. In total, the Company repurchased 12.2 million shares at an average price of $40.89 per share under the Q4 2025 ASR Transaction.
The Inflation Reduction Act of 2022 introduced a 1 percent nondeductible excise tax imposed on the net value of certain stock repurchases made after December 31, 2022. The net value is determined by the fair market value of the stock repurchased during the tax year, reduced by the fair market value of stock issued during the tax year. The Company recorded total excise tax of $4 million and $8 million, respectively, as an increase to accumulated deficit for the years ended December 31, 2025 and 2024.
See Part II, Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities and Note 18 to the Consolidated Financial Statements, for additional information.
Pension and Other Post-Employment Plans
The Company's funding policy is to contribute to defined benefit pension plans based on pension funding laws and local country requirements. Contributions exceeding funding requirements may be made at the Company's discretion. The Company expects to contribute approximately $55 million to its pension plans in 2026. The amount and timing of the Company’s actual future contributions will depend on applicable funding requirements, discount rates, investment performance, plan design, and various other factors, separations and distributions. See Note 19 to the Consolidated Financial Statements for additional information concerning the Company’s pension plans.
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As of December 31, 2025, the Company is contractually obligated to make future cash contributions of $479 million related to pension and other post-employment benefit plans. $55 million will be due in the next twelve months and the remainder will be due subsequent to 2026 with the majority due subsequent to 2030.
Restructuring
In March 2025, the Company approved targeted restructuring actions to streamline, right-size and optimize specific organizational structures in preparation for the Electronics Separation and the post-separation DuPont company. The total expected pre-tax restructuring charges under the program, beginning in the first quarter of 2025 and continuing through 2026, are expected to be $90 million. The Company recorded pre-tax restructuring charges of $69 million inception-to-date, consisting of severance and related benefit costs of $52 million, asset related charges of $12 million and $5 million of accelerated stock compensation expense. Total liabilities related to the Transformational Separation-Related Restructuring Program were $34 million at December 31, 2025 recognized in "Accrued and other current liabilities" in the Consolidated Balance Sheets. The Company expects the program to be completed in 2026.
In December 2023, the Company approved targeted restructuring actions to capture near-term cost reductions due to macroeconomic factors as well as to further simplify certain organizational structures following the Spectrum acquisition and Delrin ® Divestiture (the "2023-2024 Restructuring Program"). For the years ended December 31, 2023 through December 31, 2025, DuPont recorded a pre-tax charge related to the 2023-2024 Restructuring Program in the amount of $147 million, recognized in "Restructuring and asset related charges – net" in the Company's Consolidated Statements of Operations, comprised of $89 million of severance and related benefit costs and asset related charges of $58 million. At December 31, 2025, total liabilities related to the 2023-2024 Restructuring Program were $10 million for severance and related benefit costs, recognized in "Accrued and other current liabilities" in the Consolidated Balance Sheets. Inventory write-offs for plant line closures in connection with the 2023-2024 Restructuring Program were $25 million in "Cost of sales" within the Consolidated Statements of Operations for the year ended December 31, 2025.
In October 2022, the Company approved targeted restructuring actions to capture near-term cost reductions and to further simplify certain organizational structures following the M&M Divestitures (the "2022 Restructuring Program"). For the years ended December 31, 2023 through December 31, 2025, DuPont recorded a pre-tax charge related to the 2022 Restructuring Program in the amount of $69 million, recognized in "Restructuring and asset related charges – net" in the Company's Consolidated Statements of Operations, comprised of severance and related benefit costs. Actions related to the 2022 Restructuring Program are complete.
See Note 6 to the Consolidated Financial Statements for more information on the Company's restructuring programs.
Other Off-balance Sheet Arrangements
The MOU Cost Sharing Agreement
In connection with the cost sharing arrangement entered into as part of the MOU, the companies agreed to establish an escrow account to support and manage potential future eligible PFAS costs. Subject to the terms of the arrangement, contributions to the escrow account will be made annually by Chemours, DuPont and Corteva through 2028. Over such period, Chemours will deposit a total of $500 million into the account and DuPont and Corteva, together, will deposit an additional $500 million pursuant to the terms of their existing Letter Agreement. DuPont's aggregate escrow deposits of $35 million, not including interest, at December 31, 2025, are reflected in "Restricted cash and cash equivalents" on the Consolidated Balance Sheets.
Contingent upon the entry of the JCO related to the NJ Settlement, DuPont and Corteva will purchase Chemours’ interest in future, if any, insurance proceeds related to PFAS claims. DuPont and Corteva will make the purchase by contributing a total of $150 million ($106.5 million from DuPont, $43.5 million from Corteva) into an escrow fund ("NJ Escrow") to be applied to Chemours’ share of the NJ settlement.
NJ Settlement payments or releases from the NJ Escrow to make Settlement payments, as applicable, shall be deemed credited against each of DuPont, Corteva and Chemours’s respective PFAS MOU escrow obligations for that year. Each of DuPont, Corteva and Chemours’s 2025 PFAS MOU escrow funding obligation is suspended until the first payment of the NJ Settlement. See Note 16 to the Consolidated Financial Statements for more information.
As of December 31, 2025, the Company expects to make cash payments related to qualified PFAS spend of $32 million in the next twelve months. Additional information regarding the MOU and funding of the escrow account can be found in Note 16 to the Consolidated Financial Statements.
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Pursuant to the Legacy Liabilities Assignment Agreement, 44% of any funding obligations of the Company under the MOU, including with respect to the funding of the escrow account thereunder, will be contractually allocated to Qnity (and for which Qnity will indemnify the Company).
As of June 30, 2023, DuPont had deposited an aggregate of $100 million into the MOU Escrow Account all of which it used to fund in part its $400 million contribution to the Water District Settlement Fund. The judgment became final in April 2024, therefore $400 million contribution, plus interest, to the Water District Settlement Fund is reflected as a cash outflow within cash flows from discontinued operations during the year ended December 31, 2024. See Note 16 to the Consolidated Financial Statements for more information.
Other Contractual Obligations
Purchase obligations represent enforceable and legally binding agreements in excess of $1 million to purchase goods or services that specify fixed or minimum quantities; fixed minimum or variable price provisions; and the approximate timing of the agreement. As of December 31, 2025, the Company is contractually obligated to make future cash payments of $81 million related to purchase obligations, of which $59 million will be due in the next twelve months and the remainder will be due subsequent to 2026.
Lease obligations represent future finance and operating lease payments. As of December 31, 2025, obligations of future lease payments are $235 million, of which $57 million will be due in the next twelve months and remainder will be due subsequent to 2026.
Environmental remediation obligations represent costs for remediation and restoration with respect to environmental matters and Non-PFAS clean-up responsibilities. As of December 31, 2025, the Company is contractually obligated to make future cash payments of $119 million, of which $35 million will be due in the next twelve months and remainder will be due subsequent to 2026. See Note 16 to the Consolidated Financial Statements for more information.
Other miscellaneous obligations include liabilities related to deferred compensation and other noncurrent liabilities. As of December 31, 2025, the Company is contractually obligated to make future cash payments of $71 million related to other miscellaneous obligations, the majority of which is due subsequent to 2026.
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RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 to the Consolidated Financial Statements for a description of recent accounting pronouncements.
CRITICAL ACCOUNTING ESTIMATES
The Company's significant accounting policies are more fully described in Note 1 to the Consolidated Financial Statements. Management believes that the application of these policies on a consistent basis enables the Company to provide the users of the financial statements with useful and reliable information about the Company's operating results and financial condition.
The preparation of the Consolidated Financial Statements in conformity with generally accepted accounting principles ("GAAP") in the United States of America requires management to make estimates and assumptions that affect the reported amounts, including, but not limited to, receivable and inventory valuations, impairment of tangible and intangible assets, long-term employee benefit obligations, income taxes, restructuring liabilities, environmental matters and litigation. Management's estimates are based on historical experience, facts and circumstances available at the time and various other assumptions that are believed to be reasonable. The Company reviews these matters and reflects changes in estimates as appropriate. Management believes that the following represent some of the more critical judgment areas in the application of the Company's accounting policies which could have a material effect on the Company's financial position, liquidity or results of operations.
Pension Plans and Other Post-Employment Benefits
Accounting for employee benefit plans involves numerous assumptions and estimates. Discount rate and expected return on plan assets are two critical assumptions in measuring the cost and benefit obligation of the Company's pension plans. Management reviews these two key assumptions when plans are re-measured. These and other assumptions are updated periodically to reflect the actual experience and expectations on a plan specific basis as appropriate. As permitted by GAAP, actual results that differ from the assumptions are accumulated on a plan-by-plan basis and to the extent that such differences exceed 10 percent of the greater of the plan's benefit obligation or the applicable plan assets, the excess is amortized over the average remaining service period of active employees or the average remaining life expectancy of the inactive participants if all or almost all of a plan’s participants are inactive.
For the majority of the benefit plans, the Company utilizes the Aon AA corporate bond yield curves to determine the discount rate, applicable to each country, at the measurement date.
The Company establishes strategic asset allocation percentage targets and appropriate benchmarks for significant asset classes in accordance with the laws and practices of those countries. Where appropriate, asset-liability studies are also taken into consideration. For plans, the long-term expected return on plan assets is determined using the fair value of assets.
The following table highlights the potential impact on the Company's pre-tax earnings due to changes in certain key assumptions with respect to the Company's pension and OPEB plans based on assets and liabilities on a continuing operations basis at December 31, 2025:
Pre-tax Earnings Benefit (Charge)
(Dollars in millions)
1/4 Percentage
Point
Increase
1/4 Percentage
Point
Decrease
Discount rate
Expected rate of return on plan assets
Additional information with respect to pension plans, liabilities and assumptions is discussed under "Long-term Employee Benefits" and in Note 19 to the Consolidated Financial Statements.
Legal Commitments and Contingencies
The Company's results of operations could be affected by significant litigation adverse to the Company, including product liability claims, patent infringement and antitrust claims, and claims for third-party property damage or personal injury stemming from alleged environmental torts. The Company records accruals for legal matters, including its obligations under the MOU as impacted by the Letter Agreement, when the information available indicates that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Management makes adjustments to these accruals to reflect the impact and status of negotiations, settlements, rulings, advice of counsel and other information and events that may pertain to a particular matter. Predicting the outcome of claims and lawsuits and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to vary materially from estimates. In making determinations of likely outcomes of matters, management considers many factors. These factors include, but are not limited to, the nature of specific including unasserted , the Company's experience with similar types of , the jurisdiction in which the matter
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is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative dispute resolution mechanisms, and the matter's current status. Considerable judgment is required in determining whether to establish a litigation accrual when an adverse judgment is rendered against the Company in a court proceeding. In such situations, the Company will not recognize a loss if, based upon a thorough review of all relevant facts and information, management believes that it is probable that the pending judgment will be successfully overturned on appeal. A detailed discussion of significant litigation matters is contained in Note 16 to the Consolidated Financial Statements.
Income Taxes
The breadth of the Company's operations and divestiture activity and the global complexity of tax regulations require assessments of uncertainties and judgments in estimating taxes the Company will ultimately pay. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions, outcomes of tax litigation and resolution of disputes arising from federal, state and international tax audits in the normal course of business. The resolution of these uncertainties may result in adjustments to the Company's tax assets and tax liabilities. It is reasonably possible that changes to the Company’s global unrecognized tax benefits could be significant; however, due to the uncertainty regarding the timing of completion of audits and the possible outcomes, a current estimate of the range of increases or decreases that may occur within the next twelve months cannot be made. 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. The impact, if any, of these audits to the Company’s unrecognized tax benefits is not estimable.
Deferred income taxes result from differences between the financial and tax basis of the Company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income, as well as successful implementation of various tax planning strategies. For example, changes in facts and circumstances that alter the probability that the Company will realize deferred tax assets could result in recording a valuation allowance, thereby reducing the deferred tax asset and generating a deferred tax expense in the relevant period. In some situations, these changes could be material.
At December 31, 2025, the Company had a net deferred tax liability balance of $123 million, net of a valuation allowance of $664 million. Realization of deferred tax assets is expected to occur over an extended period of time. As a result, changes in tax laws, assumptions with respect to future taxable income, and tax planning strategies could result in adjustments to deferred tax assets. See Note 8 to the Consolidated Financial Statements for additional details related to the deferred tax liability balance.
The Inflation Reduction Act of 2022 ("IRA") was signed into law on August 16, 2022 and is effective to applicable corporations beginning in 2023. The IRA introduced a new 15 percent corporate alternative minimum tax (“CAMT”), based on adjusted financial statement income of certain large corporations. Applicable corporations will be allowed to claim a credit for the minimum tax paid against regular tax in future years. The Company is an applicable corporation subject to the CAMT requirements however, the Company did not incur a CAMT liability for 2025 and 2024. The IRA also established an excise tax that imposes a 1 percent surcharge on stock repurchases, effective January 1, 2023. Refer to Note 18 to the Consolidated Financial Statements for further information on the 1 percent surcharge on stock repurchases.
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 Company believes that the overall impact of the Act will not be material to its ongoing effective tax rate.
The OECD issued new administrative guidance, on January 5, 2026, with respect to Pillar 2 which modifies key aspects of the framework for countries to enact in their own laws. The package introduces simplifications and new safe harbors for U.S. and other multinational companies where domestic and international tax systems meet robust requirements to coexist with Pillar 2 which would fully exempt U.S.-parented groups from the application of two of the three Pillar 2 top up taxes. The package also extends the current Transitional Country-by-Country Reporting (CbCR) Safe Harbor by one year, through the end of fiscal year of 2027. We will continue to monitor U.S. and international legislative developments, including further announcements on the Side-by-Side package, to assess any potential impacts on our operations.
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Assessments of Long-Lived Assets and Goodwill
Assessment of the potential impairment of goodwill, other intangible assets, property, plant and equipment, investments in nonconsolidated affiliates, and other assets is an integral part of the Company's normal ongoing review of operations. Testing for potential impairment of these assets is significantly dependent on numerous assumptions and reflects management's best estimates at a particular point in time. The dynamic economic environments in which the Company's diversified product lines operate, and key economic and product line assumptions with respect to projected selling prices, market growth and inflation rates, can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Ch anges in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized. In addition, the Company continually reviews its diverse portfolio of assets to ensure they are achieving their greatest potential and are aligned with the Company's growth strategy. Strategic decisions involving a particular group of assets may trigger an assessment of the recoverability of the related assets. Such an assessment could result in .
The Company performs its annual goodwill impairment testing during the fourth quarter, or more frequently when events or changes in circumstances indicate that the fair value is below carrying value, at the reporting unit level which is defined as the operating segment or one level below the operating segment. One level below the operating segment, or component, is a business in which discrete financial information is available and regularly reviewed by segment management. The Company aggregates certain components into reporting units based on economic similarities. The Company has eight reporting units.
For purposes of goodwill impairment testing, the Company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value . The qualitative evaluation is an assessment of factors, including reporting unit or asset specific operating results and cost factors, as well as industry, market and macroeconomic conditions, to determine whether it is more likely than not that the fair value of a reporting unit or asset is less than the respective carrying amount, including goodwill. If the Company chooses not to complete a qualitative assessment for a given reporting unit or if the initial qualitative assessment indicates that it is more likely than not that t he carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required.
If additional quantitative testing is performed, an impairment loss is recognized when the amount by which the carrying value of the reporting unit exceeds its fair value, limited to the amount of goodwill at the reporting unit. The Company determines fair values for each of the reporting units using a combination of the income approach and market approach.
Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. The Company uses internal forecasts to estimate future cash flows and includes an estimate of long-term future growth rates based on its most recent views of the long-term outlook for each reporting unit. Discounted cash flow valuations are completed using the following key assumptions, some of which are considered significant, including Level 3 unobservable inputs : projected revenue growth, EBITDA margin, capital expenditures, weighted average cost of capital, terminal growth rate, and the tax rate. These key assumptions are determined through evaluation of the reporting unit as a whole, underlying business fundamentals and industry risk. The Company derives its discount rates using a capital asset pricing model and analyzing published rates for industries relevant to its reporting units to estimate the cost of equity financing. The Company uses discount rates that are commensurate with the risks and uncertainty inherent in the respective reporting units and in its internally developed forecasts.
Under the market approach, the Company applies the Guideline Public Company Method ("GPCM") utilizing Level 3 unobservable inputs . Selected peer sets are based on close competitors, publicly traded companies and reviews of analysts' reports, public filings, and industry research. In selecting the EBITDA multiples and determining the fair value, the Company considers the size, growth, and profitability of each reporting unit versus the relevant guideline public companies. When applicable, third-party purchase offers may be utilized to measure fair value.
Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods.
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Goodwill Impairment Testing at October 1, 2025
In the fourth quarter of 2025, at October 1, the Company performed its annual goodwill impairment testing by applying the qualitative assessment to three of its reporting units and the quantitative assessment to two reporting units. The Company considered various qualitative factors that would have affected the estimated fair value of the reporting units, and the results of the qualitative assessments indicated that it is not more likely than not that the fair values of the reporting units were less than their carrying values. For the reporting units tested under the quantitative assessment, the results indicated that the estimated fair values of the reporting units exceeded their carrying values. These reporting units are sensitive to changes in the significant assumptions used in the analysis, including projected revenue growth, EBITDA margins, weighted average costs of capital and terminal growth rates.
Goodwill Impairment Testing Q1 2025 Segment Realignment
As part of the Q1 2025 Segment Realignment, the Company assessed and re-defined certain reporting units effective March 1, 2025, including reallocation of goodwill on a relative fair value basis, as applicable, to reporting units impacted. A combination of quantitative and qualitative goodwill impairment analyses was then performed for reporting units impacted by this new structure. As a result of the analysis performed after the Q1 2025 Segment Realignment, the Company concluded that the carrying amount of the Aramids reporting unit within the former IndustrialsCo segment exceeded its fair value resulting in a non-cash goodwill impairment charge of $768 million. The Company’s significant assumptions in the analysis include projected revenue growth, EBITDA margins, weighted average costs of capital and terminal growth rates and projected EBITDA and derived multiples from comparable market transactions for the market approach. As a result of the first quarter 2025 impairment charges, there is no remaining goodwill within the Aramids reporting unit.
Impairment and Disposals of Long-Lived Assets and Impairment of Indefinite-Lived Intangible Assets
The Company evaluates the carrying value of long-lived assets (collectively the “asset group”) to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable. The Company tests its indefinite-lived intangible assets for impairment during the fourth quarter, or more frequently when events or changes in circumstances indicate that the fair value is below carrying value. The carrying value of a long-lived asset group is considered impaired when the anticipated future undiscounted cash flows to be derived from the asset group are less than its carrying value. Indefinite-lived intangible assets are considered impaired when their carrying value exceeds their fair value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset group. Fair value of the asset group is determined using a combination of a discounted cash flow model and/or market approach. Long-lived assets to be disposed of by sale, if material, are classified as held for sale and reported at the lower of carrying amount or fair value less cost to sell, and depreciation is ceased. Long-lived assets to be disposed of other than by sale are classified as held and used until they are disposed of. Depreciation is recognized over the remaining useful life of the assets.
As part of the 2025 Segment Realignment, the Company identified a triggering event within the Aramids business and assessed the indefinite-lived intangible assets and the long-lived assets of certain groups for impairment, noting no impairments were identified.
During the third quarter of 2025, in connection with the announcement of the Aramids Divestiture and due to the changes in facts and circumstances relevant to potential impairment triggers, the Company performed an impairment analysis on the Aramids business asset group. As a result of the analysis performed, the Company recorded pre-tax, non-cash impairment charges of $51 million to write-down the value of certain equity method investments. In addition, the Company determined that the estimated fair value of the Aramids business, less costs to sell, was lower than its carrying value and recorded a $437 million loss from classification to held for sale and a corresponding valuation allowance during the third quarter of 2025. The Company revised the estimated fair value, less costs to sell, of the Aramids business in the fourth quarter of 2025 and recorded an additional $7 million loss as a result of foreign currency changes among others. The Company will continue to revise the estimated fair value, less costs to sell, of the Aramids business between signing and the expected closing in 2026 to account for factors such as final selling costs, market changes affecting the seller note, currency fluctuations, and the finalization of the allocation of sales proceeds for tax purposes among others and any updates will impact the valuation allowance.
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LONG-TERM EMPLOYEE BENEFITS
The Company has various obligations to its employees and retirees. The Company maintains retirement-related programs in many countries that have a long-term impact on the Company's earnings and cash flows. These plans are typically defined benefit pension plans. The Company has a few medical, dental and life insurance benefits for employees, pensioners and survivors and for employees (other post-employment benefits or "OPEB" plans).
Pension coverage for employees of the Company's non-U.S. consolidated subsidiaries is provided, to the extent deemed appropriate, through separate plans. The Company regularly explores alternative solutions to meet its global pension obligations in the most cost-effective manner possible as demographics, life expectancy and country-specific pension funding rules change. Where permitted by applicable law, the Company reserves the right to change, modify or discontinue its plans that provide pension, medical, dental and life insurance. Benefits under defined benefit pension plans are based primarily on years of service and employees' pay near retirement.
Pension benefits are paid primarily from trust funds established to comply with applicable laws and regulations of the sovereign country in which the pension plan operates. Unless required by law, the Company does not make contributions that are in excess of tax-deductible limits. The actuarial assumptions and procedures utilized are reviewed periodically by the plans' actuaries to provide reasonable assurance that there will be adequate funds for the payment of benefits. Thus, there is not necessarily a direct correlation between pension funding and pension expense. In general, however, improvements in plans' funded status tends to moderate subsequent funding needs.
The Company contributed $6 million to its funded pension plans for the year ended December 31, 2025. The Company contributed $5 million and $9 million to its funded pension plans for the years ended December 31, 2024 and 2023, respectively. All values within this "Long-Term Employee Benefits" section are inclusive of balances and activity associated with discontinued operations.
The Company does maintain one U.S. pension benefit plan. This plan is a separate unfunded plan and these benefits are paid to employees from operating cash flows. The Company's remaining pension plans with no plan assets are paid from operating cash flows. The Company made benefit payments of $49 million, $46 million, and $57 million to its unfunded plans, including OPEB plans, for the years ended December 31, 2025, 2024 and 2023, respectively.
In 2026, the Company expects to contribute approximately $55 million to its funded pension plans and its remaining plans with no plan assets. The amount and timing of actual future contributions will depend on applicable funding requirements, discount rates, investment performance, plan design, and various other factors.
The Company's income can be affected by pension and defined contribution charges/(benefits) as well as OPEB costs. The following table summarizes the extent to which the Company's income for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 was affected by pre-tax charges related to long-term employee benefits, which include defined contributions and net periodic benefit costs (credits):
For the Years Ended
In millions
December 31, 2025
December 31, 2024
December 31, 2023
Long-term employee benefit plan charges
The above charges (benefit) for pension and OPEB are determined as of the beginning of each period. See "Pension Plans and Other Post-Employment Benefits" under the Critical Accounting Estimates section of this report for additional information on determining annual expense.
For 2026, long term employee benefit expense is expected to increase by about $12 million compared to 2025. The increase is mainly due to higher expected net periodic benefit costs.
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ENVIRONMENTAL MATTERS
The Company operates global manufacturing, facilities that are subject to a broad array of environmental laws and regulations. Such rules are subject to change by the implementing governmental agency, and the Company monitors these changes closely. Company policy requires that all operations meet or exceed legal and regulatory requirements.
In addition, the Company implements various voluntary programs to reduce its environmental footprint, which include initiatives to reduce air emissions, and greenhouse gas ("GHG") emissions, minimize the generation of hazardous waste, decrease the volume of water used and discharged, increase the efficiency of energy use, and seek to avoid, eliminate or minimize substances of concerns.
The Company incurs, and expects to incur for the foreseeable future, costs to comply with complex environmental laws and regulations, as well as internal voluntary programs and goals, such as DuPont’s sustainability strategy. Based on existing facts and circumstances, management does not believe that year-over-year changes, if any, in environmental expenses charged to current operations will have a material impact on the Company's financial position, liquidity or results of operations. Annual expenditures in the near term are not expected to vary significantly from the range of such expenditures experienced in the past few years. Longer term, expenditures are subject to considerable uncertainty and may fluctuate significantly.
In addition, significant differences in regional or national approaches could present challenges in a global marketplace.
Environmental Operating Costs
As a result of its operations, the Company incurs costs for pollution abatement activities including waste collection and disposal, installation and maintenance of air pollution controls and wastewater treatment, emissions testing and monitoring, and obtaining permits. The Company also incurs costs related to environmental related research and development activities including environmental field and treatment studies as well as toxicity and degradation testing to evaluate the environmental impact of products and raw materials.
Environmental Remediation
The Company has incurred environmental remediation costs, including indemnification remediation costs of $25 million, $21 million and $69 million, for the years ended December 31, 2025, 2024 and 2023, respectively.
Changes in the remediation accrual balance are summarized below:
In millions
Balance at December 31, 2023
Remediation payments 1
Net increase in remediation accrual 1
Net change, indemnification 2
Balance at December 31, 2024
Remediation payments 1
Net increase in remediation accrual 1
Net change, indemnification 2
Transferred to Qnity 3
Balance at December 31, 2025
1. Excludes indemnification remediation obligations and payments.
2. Represents the net change in indemnified remediation obligations based on activity pursuant to the DWDP Separation and Distribution Agreement and Letter Agreement as discussed below and in Note 16 to the Consolidated Financial Statements. This is not inclusive of the environmental accrual related to eligible PFAS costs associated with the MOU of $134 million and $146 million as of December 31, 2025 and 2024, respectively.
3. Pursuant the Legacy Liabilities Assignment Agreement, certain sites and their respective liabilities were transferred to Qnity on November 1, 2025.
Considerable uncertainty exists with respect to environmental remediation costs, and, under adverse changes in circumstances, the potential liability may range up to $271 million above the amount accrued as of December 31, 2025. However, based on existing facts and circumstances, management does not believe that any loss, in excess of amounts accrued, related to remediation activities at any individual site will have a material impact on the financial position, liquidity or results of operations of the Company.
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Pursuant to the DWDP Separation and Distribution Agreement and the Letter Agreement discussed in Note 16 to the Consolidated Financial Statements, the Company indemnifies Dow and Corteva for certain environmental matters. The Company has recorded an indemnification liability of $87 million corresponding to the Company's accrual balance related to these matters at December 31, 2025. The indemnification liability is included in the total remediation accrual liability of $119 million.
Environmental Capital Expenditures
Capital expenditures for environmental projects, either required by law or necessary to meet the Company’s internal environmental goals, were $7 million for the year ended December 31, 2025. The Company currently estimates expenditures for environmental-related capital projects to be approximately $8 million in 2026.
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