RESTRUCTURING, TRANSFORMATION, IMPAIRMENT, AND OTHER EXIT COSTS

GOODWILL AND OTHER INTANGIBLE ASSET IMPAIRMENTS

In fiscal 2026, we recorded a $1,500.0 million non-cash goodwill impairment charge related to our North America Pet reporting unit

and $302.9 million of non-cash impairment charges related to our Nudges, Uncle Toby’s, and True Chews brand intangible assets. In

fiscal 2024, we recorded a $117.1 million non-cash goodwill impairment charge related to our Latin America reporting unit and

$103.1 million of non-cash impairment charges related to our Top Chews, True Chews, and EPIC brand intangible assets. Please see

Note 6 for additional information.

VALUATION LOSS ON HELD FOR SALE BUSINESS

In fiscal 2026, we recorded a $1,031.8 million non-cash pre-tax valuation loss related to the planned divestiture of our Brazil business.

Please see Note 3 for additional information.

RESTRUCTURING AND TRANSFORMATION INITIATIVES

We view our restructuring and transformation activities as actions that help us meet our long-term growth targets and are evaluated

against internal rate of return and net present value targets. Each project normally takes one to two years to complete. At completion

(or as each major stage is completed in the case of multi-year programs), the project begins to deliver cash savings and/or reduced

depreciation. These activities result in various restructuring and transformation costs, including asset write-offs, exit charges including

severance, contract termination fees, and decommissioning and other costs. Accelerated depreciation associated with restructured

assets, as used in the context of our disclosures regarding restructuring activity, refers to the increase in depreciation expense caused

by shortening the useful life or updating the salvage value of depreciable fixed assets to coincide with the end of production under an

approved restructuring plan. Any impairment of the asset is recognized immediately in the period the plan is approved.

Restructuring and transformation charges recorded in fiscal 2026 were as follows:


In Millions
Supply chain actions	$95.4
Charges associated with restructuring and transformation actions previously announced	60.1
Total restructuring and transformation charges	$155.5

In fiscal 2026, we approved a multi-year organizational initiative to increase the competitiveness of our supply chain. We expect to

incur approximately $101 million of restructuring charges related to these actions, of which approximately $33 million will be cash.

These charges are expected to consist of approximately $66 million of net asset write-offs and $35 million of other costs, including

severance. We recognized $71.0 million of asset write-offs and $24.4 million of other costs in fiscal 2026. We expect these actions to

be completed by the end of fiscal 2029.

Certain actions are subject to union negotiations and works council consultations, where required.

We paid net $92.5 million of cash related to restructuring actions in fiscal 2026. We paid net $13.2 million of cash in fiscal 2025.

Restructuring and transformation charges recorded in fiscal 2025 were as follows:


In Millions
Global transformation initiative	$70.1
Charges associated with restructuring actions previously announced	17.4
Total restructuring and transformation charges	$87.5

Restructuring charges recorded in fiscal 2024 were as follows:


In Millions
Commercial strategy actions	$18.6
Charges associated with restructuring actions previously announced	20.2
Total restructuring charges	$38.8

Restructuring, transformation and impairment charges are classified in our Consolidated Statements of (Loss) Earnings as follows:


	Fiscal Year
In Millions	2026	2025	2024
Restructuring, transformation, impairment, and other exit costs	$2,970.8	$78.3	$241.4
Cost of sales	19.4	9.2	17.6
Total restructuring, transformation, and impairment charges	$2,990.2	$87.5	$259.0

The roll forward of our restructuring, transformation, and other exit cost reserves, included in other current liabilities, is as follows:


In Millions	Severance	Other Exit Costs	Total
Reserve balance as of May 28, 2023	$47.6	$0.1	$47.7
Reserve 2024 charges, including foreign currency translation	—	0.1	0.1
Utilized in fiscal 2024	(32.8)	(0.2)	(33.0)
Reserve balance as of May 26, 2024	14.8	—	14.8
Reserve 2025 charges, including foreign currency translation	70.1	—	70.1
Utilized in fiscal 2025	(7.8)	—	(7.8)
Reserve balance as of May 25, 2025	77.1	—	77.1
Reserve 2026 charges, including foreign currency translation	4.7	3.7	8.4
Utilized in fiscal 2026	(35.6)	—	(35.6)
Reserve balance as May 31, 2026	$46.2	$3.7	$49.9

The charges recognized in the roll forward of our reserves for restructuring, transformation, and other exit costs do not include items

charged directly to expense (e.g., asset write-offs, asset impairment charges, and the gain or loss on the sale of restructured assets) and

other periodic exit costs recognized as incurred, as those items are not reflected in our restructuring, transformation, and other exit cost

reserves on our Consolidated Balance Sheets.