XML 19 R2.htm IDEA: XBRL DOCUMENT v3.6.0.2
CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Thousands, $ in Millions
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Statement [Abstract]      
Revenue $ 4,888 $ 4,765 $ 4,785
Costs and expenses:      
Cost of Sales [1] 1,666 1,738 1,717
Selling, general and administrative expenses [1] 1,364 1,532 1,643
Research and development expenses [1] 376 364 396
Amortization of intangible assets [1] 85 61 60
Restructuring charges and certain acquisition-related costs 5 320 25
Interest expense, net of capitalized interest 166 124 117
Other (income)/deductions––net (2) 81 7
Income before provision for taxes on income [2] 1,228 545 820
Provision for taxes on income [3],[4],[5] 409 206 233
Net income before allocation to noncontrolling interests 819 339 587
Less: Net (loss)/income attributable to noncontrolling interests (2) 0 4
Net income attributable to Zoetis $ 821 $ 339 $ 583
Earnings per share attributable to Zoetis Inc. stockholders:      
Basic (in dollars per share) $ 1.66 $ 0.68 $ 1.16
Diluted (in dollars per share) $ 1.65 $ 0.68 $ 1.16
Weighted-average common shares outstanding:      
Basic (in shares) 495,715 499,707 501,055
Diluted (in shares) 498,225 502,019 502,025
Dividends declared per common share $ 0.390 $ 0.344 $ 0.299
[1] Exclusive of amortization of intangible assets, except as disclosed in Note 3. Significant Accounting Policies—Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets.
[2] Defined as income before provision for taxes on income.
[3] In 2014, the Provision for taxes on income reflects the following:•tax expense related to an $8 million discrete tax item during the first quarter of 2014 related to an intercompany inventory adjustment;•U.S. tax expense of approximately $2 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas;•tax expense related to changes in uncertain tax positions (see D. Tax Contingencies);•U.S. tax benefit related to U.S. Research and Development Tax Credit which was extended on December 19, 2014, and the U.S. Domestic Production Activities deduction; and•tax benefit related to the changes in valuation allowances and the resolution of other tax items.
[4] In 2015, the Provision for taxes on income reflects the following:•the change in the jurisdictional mix of earnings, which includes the impact of the location of earnings from (i) operations and (ii) restructuring charges related to the operational efficiency initiative and supply network strategy, as well as repatriation costs. The jurisdictional mix of earnings can vary as a result of repatriation decisions and as a result of operating fluctuations in the normal course of business, the impact of non-deductible items and the extent and location of other income and expense items, such as restructuring charges/(benefits), asset impairments and gains and losses on asset divestitures;•the tax expense related to the non-deductible revaluation of the net monetary assets in Venezuela to the SIMADI exchange rate recorded in the fourth quarter of 2015;•tax expense related to the changes in valuation allowances and the resolution of other tax items;•tax expense related to changes in uncertain tax positions (see D. Tax Contingencies);•a $9 million discrete tax benefit recorded in the first quarter of 2015 related to a revaluation of deferred taxes as a result of a change in tax rates;•a $6 million discrete tax benefit recorded in the second quarter of 2015 related to prior period tax adjustments; and•U.S. tax benefit related to U.S. Research and Development Tax Credit which was permanently extended on December 18, 2015, and the U.S. Domestic Production Activities deduction.
[5] In 2016, the Provision for taxes on income reflects the following:•the change in the jurisdictional mix of earnings, which includes the impact of the location of earnings from (i) operations and (ii) restructuring charges related to the operational efficiency initiative and supply network strategy, as well as repatriation costs. The jurisdictional mix of earnings can vary as a result of repatriation decisions and as a result of operating fluctuations in the normal course of business, the impact of non-deductible items and the extent and location of other income and expense items, such as restructuring charges/(benefits), asset impairments and gains and losses on asset divestitures;•U.S. tax benefit related to U.S. Research and Development Tax Credit and the U.S. Domestic Production Activities deduction;•a $15 million discrete tax benefit recorded in the fourth quarter of 2016 related to prior period tax adjustments;•a $10 million discrete tax benefit recorded in the first quarter of 2016 related to a revaluation of deferred taxes as a result of a change in statutory tax rates;•a $7 million discrete tax benefit related to the impact of a new accounting standard adopted in 2016 requiring the excess tax benefits for share-based payments to be recognized as a component of Provision for taxes on income;•a $2 million discrete tax benefit related to a revaluation of the company’s deferred tax assets and liabilities using the tax rates expected to be in place going forward;•a net tax expense of approximately $35 million mainly recorded in the first half of 2016 related to the impact of the European Commission’s negative decision on the excess profits rulings in Belgium. This net charge represents the recovery of prior tax benefits for the periods 2013 through 2015 offset by the revaluation of the company’s deferred tax assets and liabilities using the rates expected to be in place at the time of the reversal and without consideration of implementation of any future operational changes, and does not include any benefits associated with a successful appeal of the decision;•tax expense related to the changes in valuation allowances and the resolution of other tax items;•tax expense related to changes in uncertain tax positions (see D. Tax Contingencies).