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CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Thousands, $ in Millions
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Statement [Abstract]      
Revenues $ 5,825 $ 5,307 $ 4,888
Costs and expenses:      
Cost of Sales [1] 1,911 1,775 1,666
Selling, general and administrative expenses [1] 1,484 1,334 1,364
Research and development expenses [1] 432 382 376
Amortization of intangible assets 117 91 85
Restructuring charges and certain acquisition-related costs 68 19 5
Interest expense, net of capitalized interest 206 175 166
Other (income)/deductions––net (83) 6 (2)
Income before provision for taxes on income [2] 1,690 1,525 1,228
Provision for taxes on income [3],[4],[5] 266 663 409
Net income before allocation to noncontrolling interests 1,424 862 819
Less: Net loss attributable to noncontrolling interests (4) (2) (2)
Net income attributable to Zoetis $ 1,428 $ 864 $ 821
Earnings per share attributable to Zoetis Inc. stockholders:      
Basic (in dollars per share) $ 2.96 $ 1.76 $ 1.66
Diluted (in dollars per share) $ 2.93 $ 1.75 $ 1.65
Weighted-average common shares outstanding:      
Basic (in shares) 483,063 489,918 495,715
Diluted (in shares) 486,898 493,161 498,225
Dividends declared per common share $ 0.542 $ 0.441 $ 0.390
[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 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 initiative, 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 remeasurement of deferred taxes as a result of a change in statutory tax rates;•a $7 million discrete tax benefit recorded in 2016 related to the excess tax benefits for share-based compensation payments;•a $2 million discrete tax benefit related to a remeasurement 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 remeasurement 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; and•tax expense related to changes in uncertain tax positions (see D. Tax Contingencies).
[4] In 2017, 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;•a $212 million net discrete provisional tax expense recorded in the fourth quarter of 2017, related to the impact of the Tax Act enacted on December 22, 2017, including a one-time mandatory deemed repatriation tax, partially offset by a net tax benefit related to the remeasurement of the deferred tax assets and liabilities, as of the date of enactment, due to the reduction in the U.S. federal corporate tax rate;•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 2017 related to the effective settlement of certain issues with U.S. and non-U.S. tax authorities;•a $9 million discrete tax benefit recorded in 2017 related to the excess tax benefits for share-based compensation payments; •a $3 million discrete tax benefit recorded in the first quarter of 2017 related to a remeasurement of the company’s deferred tax assets and liabilities using the tax rates expected to be in place going forward;•tax expense related to the changes in valuation allowances and the resolution of other tax items; and•tax expense related to changes in uncertain tax positions (see D. Tax Contingencies).
[5] In 2018, 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 operations and repatriation costs. The jurisdictional mix of earnings can vary as a result of repatriation decisions, 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 gains and losses on asset divestitures;•the reduction of the U.S. federal corporate income tax rate, from 35% to 21%, effective January 1, 2018, pursuant to the Tax Act;•a $45 million net tax benefit recorded in 2018, associated with a measurement-period adjustment to the one-time mandatory deemed repatriation tax on the company’s undistributed non-U.S. earnings pursuant to the Tax Act;•a $23 million discrete tax benefit recorded in 2018 related to the favorable impact of certain tax accounting method changes;•a $15 million discrete tax benefit recorded in 2018 related to the excess tax benefits for share-based compensation payments;•a $5 million discrete tax benefit recorded in 2018 related to a remeasurement of deferred tax assets and liabilities as a result of a change in non-U.S. statutory tax rates;•U.S. tax benefit related to U.S. Research and Development Tax Credit;•tax expense related to the changes in valuation allowances and the resolution of other tax items; and•tax expense related to changes in uncertain tax positions (see D. Tax Contingencies).