On July 31, 2025, the Company’s Board of Directors (the “Board”) approved a three-year productivity program to drive future growth and support the Company’s 2030 strategy (the “Strategic Growth and Productivity Program”). The program includes initiatives to better align the Company’s organizational structure to support its strategic initiatives, optimize the Company’s global supply chain to drive agility and efficiencies and simplify and streamline its organizational structure to reduce overhead costs.

On April 30, 2026, the Company’s Board approved an expansion of the program to continue to align the Company’s operations to drive future growth and support the Company’s 2030 strategy.

The Strategic Growth and Productivity Program is estimated to result in cumulative pre-tax charges, once all initiatives are approved and implemented, totaling between $350 and $550. These pre-tax charges are currently estimated to be comprised of the following: employee-related costs, including severance and other termination benefits (70% to 80%) and asset-related costs and other charges (20% to 30%), which include accelerated depreciation, asset write-downs, contract termination and other exit costs. It is estimated that approximately 80% to 90% of the charges will result in cash expenditures and substantially all charges resulting from the program will be incurred by December 31, 2028.

It is estimated that the cumulative pre-tax charges, once all projects are approved and implemented, will relate to initiatives undertaken in North America (5% to 10%), Latin America (15% to 20%), Europe, Middle East & Africa (“EMEA”) (25% to 30%), Asia Pacific (10% to 15%), Hill’s Pet Nutrition (10% to 15%) and Corporate (20% to 25%).

For the three and six months ended June 30, 2026, charges resulting from the Strategic Growth and Productivity Program are reflected in the income statement as follows:


	Three Months Ended June 30, 2026		Six Months Ended June 30, 2026
Gross Profit	$	2	$	2
Selling, general and administrative expenses	7		13
Other (income) expense, net	120		285
Non-service related postretirement costs	—		5

Total Strategic Growth and Productivity Program, pre-tax	$	129	$	305

Total Strategic Growth and Productivity Program, after-tax	$	104	$	242

Restructuring and related implementation charges are recorded in the Corporate segment as these initiatives are predominantly centrally directed and controlled and are not included in internal measures of segment operating performance.

Total charges incurred for the Strategic Growth and Productivity Program relate to initiatives undertaken by the following reportable operating segments and Corporate:


	Three Months Ended June 30, 2026		Six Months Ended June 30, 2026		Program-to-date Accumulated Charges

North America	5	%	10	%	10	%
Latin America	35	%	15	%	14	%
Europe, Middle East & Africa	20	%	25	%	25	%
Asia Pacific	3	%	2	%	2	%
Hill’s Pet Nutrition	21	%	21	%	20	%
Corporate	16	%	27	%	29	%
Total	100	%	100	%	100	%

Since the inception of the Strategic Growth and Productivity Program, the Company has incurred cumulative pre-tax charges of $318 ($253 after-tax) in connection with the implementation of various projects as follows:


	Three Months Ended June 30, 2026
	Employee-Related Costs		Asset-Related Costs & Other		Total
Balance at March 31, 2026	$	155	$	9	$	164
Charges	111		18		129
Cash payments	(51)		(6)		(57)
Charges against assets and liabilities	—		(3)		(3)
Foreign exchange	(5)		—		(5)

Balance at June 30, 2026	$	210	$	18	$	228


	Six Months Ended June 30, 2026
	Employee-Related Costs		Asset-Related Costs & Other		Total
Balance at December 31, 2025	$	6	$	4	$	10
Charges	276		29		305
Cash payments	(53)		(11)		(64)
Charges against assets and liabilities	(5)		(4)		(9)
Foreign exchange	(14)		—		(14)

Balance at June 30, 2026	$	210	$	18	$	228

Employee-Related Costs primarily include severance and other termination benefits and are calculated based on long-standing benefit practices, written severance policies, local statutory requirements and, in certain cases, voluntary termination arrangements. Employee-Related Costs also include postretirement benefit enhancements of $5 for the six months ended June 30, 2026, which are reflected as Charges against assets and liabilities within Employee-Related Costs in the preceding table as the corresponding balance sheet amounts are reflected as an increase in postretirement liabilities.