Segment Information (Tables)

9 Months Ended

Sep. 30, 2023

Schedule of Selected Income Statement Information by Segment


	Earnings						Depreciation and Amortization(a)
	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
(MILLIONS OF DOLLARS)	2023			2022			2023		2022
U.S.
Revenue	$	3,344		$	3,201
Cost of sales	645			587
Gross profit	2,699			2,614
Gross margin	80.7		%	81.7		%
Operating expenses	602			578
Other (income)/deductions-net	—			(6)
U.S. Earnings	2,097			2,042			$	58	$	40

International
Revenue(b)	2,929			2,780
Cost of sales	912			809
Gross profit	2,017			1,971
Gross margin	68.9		%	70.9		%
Operating expenses	473			456
Other (income)/deductions-net	1			(5)
International Earnings	1,543			1,520			67		62

Total operating segments	3,640			3,562			125		102

Other business activities	(354)			(315)			24		21
Reconciling Items:
Corporate	(722)			(771)			95		99
Purchase accounting adjustments	(124)			(120)			118		120
Acquisition-related costs	(8)			(4)			—		—
Certain significant items(c)	45			(10)			—		—
Other unallocated	(191)			(278)			3		4
Total Earnings(d)	$	2,286		$	2,064		$	365	$	346

(a) Certain production facilities are shared. Depreciation and amortization is allocated to the reportable operating segments based on estimates of where the benefits of the related assets are realized.

(b) Revenue denominated in euros was $627 million and $590 million for the nine months ended September 30, 2023 and 2022, respectively.

(c) For the nine months ended September 30, 2023, primarily consisted of a gain on the sale of a majority interest in our pet insurance business, partially offset by employee termination costs related to organizational structure refinements and certain asset impairment charges related to our precision animal health and diagnostics businesses.

For the nine months ended September 30, 2022, primarily represents inventory and asset impairment charges related to the consolidation of manufacturing sites in China as well as employee termination and exit costs associated with cost-reduction and productivity initiatives in certain international markets.

(d) Defined as income before provision for taxes on income.