ZOETIS INC., 10-K filed on 2/13/2025
Annual Report
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Cover - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Feb. 07, 2025
Jun. 30, 2024
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2024    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 001-35797    
Entity Registrant Name Zoetis Inc.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 46-0696167    
Entity Address, Address Line One 10 Sylvan Way,    
Entity Address, City or Town Parsippany,    
Entity Address, State or Province NJ    
Entity Address, Postal Zip Code 07054    
City Area Code 973    
Local Phone Number 822-7000    
Title of 12(b) Security Common Stock, $0.01 par value per share    
Trading Symbol ZTS    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction [Flag] false    
Entity Shell Company false    
Entity Public Float     $ 78,673
Entity Common Stock, Shares Outstanding   447,791,917  
Documents Incorporated by Reference Portions of the registrant’s Proxy Statement for the 2025 Annual Meeting of Shareholders (hereinafter referred to as the “2025 Proxy Statement”) are incorporated into Part III of this Form 10-K.    
Amendment Flag false    
Document Fiscal Year Focus 2024    
Document Fiscal Period Focus FY    
Entity Central Index Key 0001555280    
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Audit Information
 12 Months Ended
Dec. 31, 2024
Auditor Information [Abstract]  
Auditor Location Short Hills, NJ
Auditor Name KPMG LLP
Auditor Firm ID 185
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CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Thousands, $ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Income Statement [Abstract]      
Revenues $ 9,256 $ 8,544 $ 8,080
Costs and expenses:      
Cost of Sales [1] 2,719 2,561 2,454
Selling, general and administrative expenses [1] 2,318 2,151 2,009
Research and development expenses [1] 686 614 539
Amortization of intangible assets 141 149 150
Interest expense, net of capitalized interest 225 239 221
Other (income)/deductions––net (19) (159) 40
Income before provision for taxes on income [2] 3,133 2,936 2,656
Provision for taxes on income 637 596 545
Net income before allocation to noncontrolling interests 2,496 2,340 2,111
Less: Net income/(loss) attributable to noncontrolling interests 10 (4) (3)
Net income attributable to Zoetis Inc. $ 2,486 $ 2,344 $ 2,114
Earnings per share attributable to Zoetis Inc. stockholders:      
Basic (in dollars per share) $ 5.47 $ 5.08 $ 4.51
Diluted (in dollars per share) $ 5.47 $ 5.07 $ 4.49
Weighted-average common shares outstanding:      
Basic (in shares) 454,200 461,172 468,891
Diluted (in shares) 454,848 462,269 470,385
Dividends declared per common share $ 1.796 $ 1.557 $ 1.350
Restructuring Charges And Acquisition And Divestiture Related Costs $ 53 $ 53 $ 11
[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.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Statement of Comprehensive Income [Abstract]      
Net income before allocation to noncontrolling interests $ 2,496 $ 2,340 $ 2,111
Other comprehensive loss, net of tax(a):      
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax [1] 4 (5) 86
Unrecognized net gains/(losses) on derivative instruments [1] 44 (23) 36
Foreign currency translation adjustments, net [1] (147) 0 (188)
Benefit plans: Actuarial gain/(loss), net [1] (2) 6 13
Total other comprehensive loss, net of tax [1] (101) (22) (53)
Comprehensive income before allocation to noncontrolling interests 2,395 2,318 2,058
Less: Comprehensive income/(loss) attributable to noncontrolling interests 10 (4) (3)
Comprehensive income attributable to Zoetis Inc. $ 2,385 $ 2,322 $ 2,061
[1] Presented net of reclassification adjustments, which are not material in any period presented. Reclassification adjustments related to benefit plans are generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, general and administrative expenses, and/or Research and development expenses, as appropriate, in the Consolidated Statements of Income.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, Tax $ 0 $ 2 $ 6
Cash Flow Hedging      
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax 1 (2) 26
Net Investment Hedging      
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax $ 13 $ (7) $ 11
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CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Assets    
Cash and cash equivalents [1] $ 1,987 $ 2,041
Accounts receivable, less allowance for doubtful accounts of $18 in 2024 and 2023 1,316 1,304
Inventories 2,306 2,564
Other current assets 377 434
Total current assets 5,986 6,343
Property, plant and equipment, less accumulated depreciation of $2,635 in 2024 and $2,594 in 2023 3,391 3,204
Operating lease right-of-use assets 219 230
Goodwill 2,724 2,759
Identifiable intangible assets, less accumulated amortization 1,127 1,338
Noncurrent deferred tax assets 540 206
Other noncurrent assets 250 206
Total assets 14,237 14,286
Liabilities and Equity    
Short-term borrowings 0 3
Current portion of long-term debt 1,350 0
Accounts payable 433 411
Dividends payable 224 198
Accrued expenses 746 683
Accrued compensation and related items 441 382
Income taxes payable 93 110
Other current liabilities 125 102
Total current liabilities 3,412 1,889
Long-term debt, net of discount and issuance costs 5,220 6,564
Noncurrent deferred tax liabilities 167 146
Operating lease liabilities 174 188
Other taxes payable 272 271
Other noncurrent liabilities 222 237
Total liabilities 9,467 9,295
Common stock, $0.01 par value: 6,000,000,000 authorized, 501,891,243 and 501,891,243 shares issued; 448,473,073 and 458,367,358 shares outstanding at December 31, 2024 and 2023, respectively 5 5
Treasury stock, at cost, 53,418,170 and 43,523,885 shares of common stock at December 31, 2024 and 2023, respectively (7,445) (5,597)
Additional paid-in capital 1,182 1,133
Retained earnings 11,968 10,295
Accumulated other comprehensive loss (940) (839)
Stockholders' Equity Attributable to Parent 4,770 4,997
Stockholders' Equity Attributable to Noncontrolling Interest 0 (6)
Total equity 4,770 4,991
Total liabilities and equity $ 14,237 $ 14,286
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 6,000,000,000 6,000,000,000
[1] As of December 31, 2024 and 2023, includes $2 million, of restricted cash.
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Accounts Receivable, Allowance for Credit Loss, Current $ 18 $ 18
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment $ 2,635 $ 2,594
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 6,000,000,000 6,000,000,000
Common stock, shares issued 501,891,243 501,891,243
Common stock, shares outstanding 448,473,073 458,367,358
Treasury Stock, Common, Shares 53,418,170 43,523,885
Restricted cash $ 2 $ 2
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CONSOLIDATED STATEMENTS OF EQUITY - USD ($)
$ in Millions
Total
Common Stock
 [1]
Treasury Stock
 [1]
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Equity Attributable to Noncontrolling Interests
Share Repurchase Program
Treasury Stock, Common, Shares 29,300,000              
Common stock, shares outstanding 501,900,000              
Beginning balance at Dec. 31, 2021 $ 4,544 $ 5 $ (2,952) $ 1,068 $ 7,186 $ (764) $ 1  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income/(loss) 2,111       2,114   (3)  
Other comprehensive loss $ (53) [2]         (53) 0  
Stock-based compensation 0              
Treasury Stock, Shares, Acquired 700,000             9,500,000
Share-based compensation awards [3] $ 23   7 17 (1)      
Share repurchase program 0              
Treasury stock acquired [4] $ (1,594)   (1,594)          
Employee benefit plan contribution from Pfizer Inc. [5] 3     3        
Dividends declared (631)       (631)      
Ending balance at Dec. 31, 2022 $ 4,403 5 (4,539) 1,088 8,668 (817) (2)  
Treasury Stock, Common, Shares 38,100,000              
Common stock, shares outstanding 501,900,000              
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income/(loss) $ 2,340       2,344   (4)  
Other comprehensive loss $ (22) [2]         (22) 0  
Stock-based compensation 0              
Treasury Stock, Shares, Acquired 900,000             6,300,000
Share-based compensation awards [3] $ 88   44 45 (1)      
Share repurchase program 0              
Treasury stock acquired [4] $ (1,102)   (1,102)          
Dividends declared (716)       (716)      
Ending balance at Dec. 31, 2023 $ 4,991 5 (5,597) 1,133 10,295 (839) (6)  
Treasury Stock, Common, Shares 43,523,885              
Common stock, shares outstanding 501,891,243              
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income/(loss) $ 2,496           10  
Other comprehensive loss $ (101) [2]         (101) 0  
Noncontrolling Interest, Decrease from Deconsolidation [5]             $ (4)  
Treasury Stock, Shares, Acquired 600,000             10,500,000
Consolidation of a noncontrolling interest [5] $ (4)              
Share-based compensation awards [3] 65   17 49 (1)      
Treasury stock acquired [4] (1,865)   (1,865)          
Dividends declared (812)       (812)      
Ending balance at Dec. 31, 2024 $ 4,770 $ 5 $ (7,445) $ 1,182 $ 11,968 $ (940)    
Treasury Stock, Common, Shares 53,418,170              
Common stock, shares outstanding 501,891,243              
[1] $4,050 
[2] Presented net of reclassification adjustments, which are not material in any period presented. Reclassification adjustments related to benefit plans are generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, general and administrative expenses, and/or Research and development expenses, as appropriate, in the Consolidated Statements of Income.
[3] Includes the issuance of shares of Zoetis Inc. common stock and the reacquisition of shares of treasury stock associated with exercises of employee share-based awards. Also includes the reacquisition of shares of treasury stock associated with the vesting of employee share-based awards to satisfy tax withholding requirements. For additional information, see Note 15. Share-based Payments and Note 16. Stockholders' Equity.
[4] Reflects the acquisition of treasury shares in connection with the share repurchase program. For 2024 and 2023, includes excise tax accrued on net share repurchases. For additional information, see Note 16. Stockholders' Equity.
[5] Represents contributed capital from Pfizer Inc. associated with service credit continuation for certain Zoetis Inc. employees in Pfizer Inc.'s U.S. qualified defined benefit and U.S. retiree medical plans. See Note 14. Benefit Plans.
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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Operating Activities      
Net income before allocation to noncontrolling interests $ 2,496 $ 2,340 $ 2,111
Adjustments to reconcile net income before noncontrolling interests to net cash provided by/(used in) operating activities      
Depreciation and amortization expense [1],[2] 497 491 465
Share-based compensation expense 74 60 62
Asset write-offs and asset impairments 31 46 53
Net loss/(gain) on sales of assets 23 (118) 0
Provision for losses on inventory 97 115 76
Deferred taxes (338) (61) (286)
Settlement of derivative contracts 0 0 114
Employee benefit plan contribution from Pfizer Inc. 0 0 3
Other non-cash adjustments (6) (8) 13
Other changes in assets and liabilities, net of acquisitions and divestitures:      
Accounts receivable (61) (102) (137)
Inventories (40) (361) (486)
Other assets 52 (95) 35
Accounts payable 31 13 (29)
Other liabilities 114 67 (180)
Other tax accounts, net (17) (34) 98
Net cash provided by operating activities 2,953 2,353 1,912
Investing Activities      
Capital expenditures (655) (732) (586)
Acquisitions, net of cash acquired (8) (155) (312)
Purchase of investments (5) (4) (9)
Net proceeds from sale of assets 1 4 1
Proceeds from derivative instrument activity, net 62 12 23
Proceeds from sale of businesses, net of cash sold 293 96 0
Other investing activities (3) 2 0
Net cash used in investing activities (315) (777) (883)
Financing Activities      
(Decrease)/increase in short-term borrowings, net (3) 1 2
Principal payments on long-term debt 0 (1,350) 0
Proceeds from issuance of long-term debt—senior notes, net of discount 0 0 1,348
Payment of debt issuance costs 0 0 (10)
Payment of consideration related to previous acquisitions (5) (3) (1)
Share-based compensation-related proceeds, net of taxes paid on withholding shares (8) 27 (38)
Purchases of treasury stock (1,858) (1,092) (1,594)
Cash dividends paid (786) (692) (611)
Net cash used in financing activities (2,660) (3,109) (904)
Effect of exchange-rate changes on cash and cash equivalents (32) (7) (29)
Net (decrease)/increase in cash and cash equivalents (54) (1,540) 96
Cash and cash equivalents at beginning of period 1,987 [3] 2,041 [3] 3,581
Cash paid during the period for:      
Income taxes 892 754 638
Interest, net of capitalized interest 274 295 242
Non-cash transactions:      
Capital expenditures 3 2 3
Dividends payable 224 198 174
Excise tax accrued on net share repurchases, not paid $ 17 $ 10 $ 0
[1] 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.
[2] Defined as income before provision for taxes on income.
[3] As of December 31, 2024 and 2023, includes $2 million, of restricted cash.
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Business Description
 12 Months Ended
Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business Description
1. Business Description
Zoetis Inc. (including its subsidiaries, collectively, Zoetis, the company, we, us or our) is a global leader in the animal health industry, focused on the discovery, development, manufacture and commercialization of medicines, vaccines, diagnostic products and services, biodevices, genetic tests and precision animal health. We organize and operate our business in two geographic regions: the United States (U.S.) and International.
We directly market our products in approximately 45 countries across North America, Europe, Africa, Asia, Australia and South America. Our products are sold in more than 100 countries, including developed markets and emerging markets. We have a diversified business, marketing products across eight core species: dogs, cats and horses (collectively, companion animals) and cattle, swine, poultry, fish and sheep (collectively, livestock); and within seven major product categories: parasiticides, vaccines, dermatology, anti-infectives, pain and sedation, other pharmaceutical and animal health diagnostics. On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets, and, as a result, our major product categories no longer include the category of medicated feed additives. See Note 5. Acquisitions and Divestitures.
We were incorporated in Delaware in July 2012 and prior to that the company was a business unit of Pfizer Inc. (Pfizer).
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Basis of Presentation
 12 Months Ended
Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
2. Basis of Presentation
The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). For subsidiaries operating outside the United States, the consolidated financial information is included as of and for the fiscal year ended November 30 for each year presented. All significant intercompany balances and transactions between the legal entities that comprise Zoetis have been eliminated
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Significant Accounting Policies
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Significant Accounting Policies
3. Significant Accounting Policies
Recently Adopted Accounting Standards
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new guidance requires expanded annual and interim disclosures for significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. We adopted this guidance as of January 1, 2024, which resulted in additional disclosures in the notes to our consolidated financial statements that we applied retrospectively to all prior periods presented. See Note 19. Segment Information.
Recently Issued Accounting Standards
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax disclosures. The new guidance requires standardized categories for the effective tax rate reconciliation, disaggregation of income taxes paid and other income tax-related disclosures. This update is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact that the new guidance will have on our notes to the consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires a public business entity to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our notes to the consolidated financial statements.
Estimates and Assumptions
In preparing the consolidated financial statements, we use certain estimates and assumptions that affect reported amounts and disclosures, including amounts recorded in connection with acquisitions. These estimates and underlying assumptions can impact all elements of our consolidated financial statements. For example, in the Consolidated Statements of Income, estimates are used when accounting for deductions from revenue (such as rebates, sales allowances, product returns and discounts), determining cost of sales, allocating cost in the form of depreciation and amortization, and estimating restructuring charges and the impact of contingencies. On the Consolidated Balance Sheets, estimates are used in determining the valuation and recoverability of assets, such as accounts receivables, inventories, fixed assets, goodwill and other identifiable intangible assets, and estimates are used in determining the reported amounts of liabilities, such as taxes payable, uncertain tax positions, benefit obligations, the impact of contingencies, deductions from revenue and restructuring reserves, all of which also impact the Consolidated Statements of Income.
Our estimates are often based on complex judgments, probabilities and assumptions that we believe to be reasonable but that can be inherently uncertain and unpredictable. If our estimates and assumptions are not representative of actual outcomes, our results could be materially impacted.
As future events and their effects cannot be determined with precision, our estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. We are subject to risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in competition, litigation, legislation and regulations. We regularly evaluate our estimates and assumptions using historical experience and expectations about the future. We adjust our estimates and
assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in our consolidated financial statements on a prospective basis unless they are required to be treated retrospectively under relevant accounting standards. It is possible that others, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.
Acquisitions
Our consolidated financial statements include the operations of acquired businesses from the date of acquisition. We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of acquired in-process research and development (IPR&D) be recorded on the balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When we acquire net assets that do not constitute a business as defined in U.S. GAAP, no goodwill is recognized.
Amounts recorded for acquisitions can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Leases
We determine if a contract contains a lease at inception. Leases are recorded as a right of use asset, as of the lease commencement date, in an amount equal to the present value of future payments over the lease term. A corresponding lease liability is also recorded. We have elected not to recognize right of use assets and lease liabilities for short-term leases of vehicles and equipment with a lease term of twelve months or less.
Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise. The present value of future payments is discounted using the rate implicit in the lease, when available. When the implicit rate is not available, as is frequently the case with our lease portfolio, the present value is calculated using our incremental borrowing rate, which is determined on the commencement date. The incremental borrowing rate represents the rate of interest that we would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. As we do not borrow on a collateralized basis, our non-collateralized borrowing rate is used as an input in deriving the incremental borrowing rate.
Our lease portfolio primarily consists of operating leases, in which fixed lease payments are recognized on a straight-line basis over the lease term. Operating lease assets are recorded within Operating lease right of use assets with the corresponding operating lease liabilities recorded within Other current liabilities and Operating lease liabilities on the Consolidated Balance Sheets. Finance lease assets are recorded within Other noncurrent assets with the corresponding finance lease liabilities recorded within Other current liabilities and Other noncurrent liabilities on the Consolidated Balance Sheets. Variable payments are recognized in the period incurred. Variable lease payments include real estate taxes and charges for other non-lease services due to lessors that are not dependent on an index or rate and utilization based charges associated with fleet vehicles.
Our real estate and fleet lease contracts may include fixed consideration attributable to both lease and non-lease components, including non-lease services provided by the vendor, which are accounted for as a single fixed minimum payment. For leases of certain classes of machinery and equipment, contract consideration is allocated to lease and non-lease components on the basis of relative standalone price.
Foreign Currency Translation
For most of our international operations, local currencies have been determined to be the functional currencies. We translate functional currency assets and liabilities to their U.S. dollar equivalents at exchange rates in effect at the balance sheet date and we translate functional currency income and expense amounts to their U.S. dollar equivalents at average exchange rates for the period. The U.S. dollar effects that arise from changing translation rates are recorded in Other comprehensive income/(loss), net of tax. The effects of converting non-functional currency assets and liabilities into the functional currency are recorded in Other (income)/deductions––net. For operations in highly inflationary economies, we translate monetary items at rates in effect at the balance sheet date, with translation adjustments recorded in Other (income)/deductions––net, and we translate non-monetary items at historical rates.
Revenue, Deductions from Revenue and the Allowance for Doubtful Accounts
We recognize revenue from product sales when control of the goods has transferred to the customer, which is typically once the goods have shipped and the customer has assumed title. Revenue reflects the total consideration to which we expect to be entitled (i.e., the transaction price), in exchange for products sold, after considering various types of variable consideration including rebates, sales allowances, product returns and discounts.
Variable consideration is estimated and recorded at the time that related revenue is recognized. Our estimates reflect the amount by which we expect variable consideration to impact revenue recognized and are generally based on contractual terms or historical experience, adjusted as necessary to reflect our expectations about the future. Our customer payment terms generally range from 30 to 90 days.
Estimates of variable consideration utilize a complex series of judgments and assumptions to determine the amount by which we expect revenue to be reduced, for example;
•for sales returns, we perform calculations in each market that incorporate the following, as appropriate: local returns policies and practices; historic returns as a percentage of revenue; estimated shelf life by product; an estimate of the amount of time between shipment and return or lag time; and any other factors that could impact the estimate of future returns, product recalls, discontinuation of products or a changing competitive environment; and
•for revenue incentives, we use our historical experience with similar incentives programs to estimate the impact of such programs on revenue for the current period.
Although the amounts recorded for these deductions from revenue are dependent on estimates and assumptions, historically our adjustments to actual results have not been material. The sensitivity of our estimates can vary by program, type of customer and geographic location.
Accruals for deductions from revenue are recorded as either a reduction in Accounts receivable or within Accrued expenses, depending on the nature of the contract and method of expected payment. Amounts recorded as a reduction in Accounts receivable as of December 31, 2024 and 2023 are
approximately $257 million and $301 million, respectively. As of December 31, 2024, and 2023, accruals for deductions from revenue included in Accrued expenses are approximately $344 million and $323 million, respectively.
A deferral of revenue may be required in the event that we have not satisfied all customer obligations for which we have been compensated. The transaction price is allocated to the individual performance obligations on the basis of relative stand-alone selling price, which is typically based on actual sales prices. Revenue associated with unsatisfied performance obligations are contract liabilities is recorded within Other current liabilities and Other noncurrent liabilities. Recognition of revenue occurs once control of the underlying products has transferred to the customer. Contract liabilities reflected within Other current liabilities as of December 31, 2023 and subsequently recognized as revenue during 2024 were approximately $4 million. Contract liabilities as of December 31, 2024 were approximately $18 million.
We do not disclose the transaction price allocated to unsatisfied performance obligations related to contracts with an original expected duration of one year or less, or for contracts for which we recognize revenue in line with our right to invoice the customer. Estimated future revenue expected to be generated from long-term contracts with unsatisfied performance obligations as of December 31, 2024 is not material.
Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenue. Shipping and handling costs incurred after control of the purchased product has transferred to the customer are accounted for as a fulfillment cost, within Selling, general and administrative expenses.
We also record estimates for bad debts. We periodically assess the adequacy of the allowance for doubtful accounts by evaluating the collectability of outstanding receivables based on factors such as past due history, historical and expected collection patterns, the financial condition of our customers, the robust nature of our credit and collection practices and the economic environment.
Amounts recorded for sales deductions and bad debts can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Cost of Sales and Inventories
Inventories are carried at the lower of cost or net realizable value. The cost of finished goods, work-in-process and raw materials is determined using average actual cost. We regularly review our inventories for impairment and adjustments are recorded when necessary.
Selling, General and Administrative Expenses
Selling, general and administrative costs are expensed as incurred. Among other things, these expenses include the internal and external costs of marketing, advertising, and shipping and handling as well as certain costs related to business technology, facilities, legal, finance, human resources, business development, public affairs and procurement, among others.
Advertising expenses relating to production costs are expensed as incurred, and the costs of space in publications are expensed when the related advertising occurs. Advertising and promotion expenses totaled approximately $302 million in 2024, $281 million in 2023 and $287 million in 2022.
Shipping and handling costs totaled approximately $107 million in 2024, $101 million in 2023 and $82 million in 2022.
Research and Development Expenses
Research and development (R&D) costs are expensed as incurred. Research is the effort associated with the discovery of new knowledge that will be useful in developing a new product or in significantly improving an existing product. Development is the implementation of the research findings. Before a compound receives regulatory approval, we record upfront and milestone payments made by us to third parties under licensing arrangements as expense. Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved. Once a compound receives regulatory approval in a major market, we record any milestone payments in Identifiable intangible assets, less accumulated amortization and, unless the assets are determined to have an indefinite life, we amortize them on a straight-line basis over the remaining agreement term or the expected product life cycle, whichever is shorter.
Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets
Long-lived assets include:
•    Goodwill—goodwill represents the excess of the consideration transferred for an acquired business over the assigned values of its net assets. Goodwill is not amortized.
•    Identifiable intangible assets, less accumulated amortization—these acquired assets are recorded at our cost. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. Identifiable intangible assets with indefinite lives that are associated with marketed products are not amortized until a useful life can be determined. Identifiable intangible assets associated with IPR&D projects are not amortized until regulatory approval is obtained. The useful life of an amortizing asset generally is determined by identifying the period in which substantially all of the cash flows are expected to be generated.
•    Property, plant and equipment, less accumulated depreciation––these assets are recorded at our cost and are increased by the cost of any significant improvements after purchase. Property, plant and equipment assets, other than land and construction-in-progress, are depreciated on a straight-line basis over the estimated useful life of the individual assets. Depreciation begins when the asset is ready for its intended use. For tax purposes, accelerated depreciation methods are used as allowed by tax laws.
Amortization expense related to finite-lived identifiable intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property are included in Amortization of intangible assets as they benefit multiple business functions. Amortization expense related to intangible assets that are associated with a single function and depreciation of property, plant and equipment are included in Cost of sales, Selling, general and administrative expenses and Research and development expenses, as appropriate.
We review all of our long-lived assets for impairment indicators throughout the year and we perform detailed testing whenever impairment indicators are present. In addition, we perform impairment testing for goodwill and indefinite-lived assets at least annually. When necessary, we record charges for impairments. Specifically:
•    For finite-lived identifiable intangible assets, such as developed technology rights, and for other long-lived assets, such as property, plant and equipment, whenever impairment indicators are present, we calculate the undiscounted value of the projected cash flows associated with the asset, or asset group, and compare this estimated amount to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate.
•    For indefinite-lived identifiable intangible assets, such as brands and IPR&D assets, we test for impairment at least annually, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If we conclude it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the indefinite-lived intangible asset with its carrying value is performed. If the fair value is less than the carrying amount, an impairment loss is recognized. We record an impairment loss, if any, for the excess of book value over fair value. In addition, in all cases of an impairment review other than for IPR&D assets, we re-evaluate whether continuing to characterize the asset as indefinite-lived is appropriate.
•    For goodwill, we test for impairment on at least an annual basis, or more frequently if necessary, either by assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or by performing a periodic quantitative assessment. If we choose to perform a qualitative analysis and conclude it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative fair value test is performed. We determine the implied fair value of goodwill by subtracting the fair value of all the identifiable net assets other than goodwill from the fair value of the reporting unit and record an impairment loss for the excess, if any, of book value of goodwill over the implied fair value. In 2024 we performed a periodic quantitative impairment assessment as of September 30, 2024, which did not result in the impairment of goodwill associated with any of our reporting units. In 2023, we performed a qualitative impairment assessment as of September 30, 2023, which did not result in the impairment of goodwill associated with any of our reporting units.
Impairment reviews can involve a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Software Capitalization and Depreciation
We capitalize certain costs incurred in connection with obtaining or developing internal-use software, including payroll and payroll-related costs for employees who are directly associated with the internal-use software project, external direct costs of materials and services and interest costs while developing the software. Capitalized software costs are included in Property, plant and equipment and are amortized using the straight-line method over the estimated useful life of 5 to 10 years. Capitalization of such costs ceases when the project is substantially complete and ready for its intended purpose. Costs incurred during the preliminary project and post-implementation stages, as well as software maintenance and training costs, are expensed in the period in which they are incurred. The company capitalized $18 million and $35 million of internal-use software for the years ended December 31, 2024 and 2023, respectively. Depreciation expense for capitalized software was $61 million in 2024, $75 million in 2023 and $69 million in 2022.
In addition, we capitalize qualifying implementation costs under cloud computing arrangements (“CCA”). The capitalized CCA implementation costs are allocated between Other current assets and Other noncurrent assets on the accompanying Consolidated Balance Sheets based on the expected period that amortization will be recognized. CCA implementation costs are amortized using the straight-line method over the expected term of the related service contract.
Restructuring Charges and Certain Acquisition and Divestiture-Related Costs
We may incur restructuring charges in connection with acquisitions when we implement plans to restructure and integrate the acquired operations or in connection with cost-reduction and productivity initiatives. Included in Restructuring charges and certain acquisition and divestiture-related costs are all restructuring charges and certain costs associated with acquiring and integrating an acquired business and divesting and disintegrating divested businesses. Transaction costs and integration costs are expensed as incurred. Termination costs are a significant component of restructuring charges and are generally recorded when the actions are probable and estimable.
Amounts recorded for restructuring charges and other associated costs can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Earnings per Share
Basic earnings per share is computed by dividing net income attributable to Zoetis by the weighted-average number of common shares outstanding during the period. Diluted earnings per share adjusts the weighted-average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options, restricted stock units, and performance-vesting restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method.
Cash Equivalents
Cash equivalents include items almost as liquid as cash, such as money market funds, certificates of deposit and time deposits with maturity periods of three months or less when purchased.
Fair Value
Certain assets and liabilities are required to be measured at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, we use fair value extensively in the initial recognition of net assets acquired in a business combination. Fair value is estimated using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer.
When estimating fair value, depending on the nature and complexity of the asset or liability, we may use one or all of the following approaches:
•    Income approach, which is based on the present value of a future stream of net cash flows.
•    Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.
•    Cost approach, which is based on the cost to acquire or construct comparable assets less an allowance for functional and/or economic obsolescence.
These fair value methodologies depend on the following types of inputs:
•    Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).
•    Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable (Level 2 inputs).
•    Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).
A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Accounts Receivable
The recorded amounts of accounts receivable approximate fair value because of their relatively short-term nature. As of December 31, 2024 and 2023, Accounts receivable, less allowance for doubtful accounts, of $1,316 million and $1,304 million, respectively, includes approximately $79 million and $58 million, respectively, of other receivables, such as trade notes receivable and royalty receivables, among others.
Deferred Tax Assets and Liabilities and Income Tax Contingencies
Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates and laws. We provide a valuation allowance when we believe that our deferred tax assets are not recoverable based on an assessment of estimated future taxable income that incorporates ongoing, prudent and feasible tax planning strategies.
We account for income tax contingencies using a benefit recognition model. If we consider that a tax position is more likely than not to be sustained upon audit, based solely on the technical merits of the position, we recognize the benefit. We measure the benefit by determining the amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. Under the benefit recognition model, if the initial assessment fails to result in the recognition of a tax benefit, we regularly monitor our position and subsequently recognize the tax benefit: (i) if there are changes in tax law, analogous case law or there is new information that sufficiently raise the likelihood of prevailing on the technical merits of the position to more likely than not; (ii) if the statute of limitations expires; or (iii) if there is a completion of an audit resulting in a favorable settlement of that tax year with the appropriate agency. We regularly re-evaluate our tax positions based on the results of audits of federal, state and foreign income tax filings, statute of limitations expirations, changes in tax law or receipt of new information that would either increase or decrease the technical merits of a position relative to the “more-likely-than-not” standard. Liabilities associated with uncertain tax positions are classified as current only when we expect to pay cash within the next 12 months. Interest and penalties, if any, are recorded in Provision for taxes on income and are classified on our Consolidated Balance Sheets with the related tax liability.
Amounts recorded for valuation allowances and income tax contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Benefit Plans
All dedicated benefit plans are pension plans. For our dedicated benefit plans, we recognize the overfunded or underfunded status of defined benefit plans as an asset or liability on the Consolidated Balance Sheets and the obligations generally are measured at the actuarial present value of all benefits attributable to employee service rendered, as provided by the applicable benefit formula. Pension obligations may include assumptions such as long-term rate of return on plan assets, expected employee turnover, participant mortality, and future compensation levels. Plan assets are measured at fair value. Net periodic benefit costs are recognized, as required, into Cost of sales, Selling, general and administrative expenses and Research and development expenses, as appropriate.
Amounts recorded for benefit plans can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Asset Retirement Obligations
We record accruals for the legal obligations associated with the retirement of tangible long-lived assets, including obligations under the doctrine of promissory estoppel and those that are conditioned upon the occurrence of future events. These obligations generally result from the acquisition, construction, development and/or normal operation of long-lived assets. We recognize the fair value of these obligations in the period in which they are incurred by increasing the carrying amount of the related asset. Over time, we recognize expense for the accretion of the liability and for the amortization of the asset.
As of December 31, 2024 and 2023, accruals for asset retirement obligations are $23 million and $28 million, respectively, and are included in Other noncurrent liabilities.
Amounts recorded for asset retirement obligations can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Legal and Environmental Contingencies
We are subject to numerous contingencies arising in the ordinary course of business, such as product liability and other product-related litigation, commercial litigation, patent litigation, environmental claims and proceedings, government investigations and guarantees and indemnifications. We record accruals for these contingencies to the extent that we conclude that a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, we accrue that amount. Alternatively, when no amount within a range of loss appears to be a better estimate than any other amount, we accrue the lowest amount in the range. We record anticipated recoveries under existing insurance contracts when recovery is assured.
Amounts recorded for contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Share-Based Payments
Our compensation programs can include share-based payment plans. All grants under share-based payment programs are accounted for at fair value and such amounts generally are amortized on a straight-line basis over the vesting term to Cost of sales, Selling, general and administrative expenses, and Research and development expenses, as appropriate. We include the impact of estimated forfeitures when determining share-based compensation expense.
Amounts recorded for share-based compensation can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
v3.25.0.1
Revenue
 12 Months Ended
Dec. 31, 2024
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue
4. Revenue
A. Revenue from Product Sales
We offer a diversified portfolio of products which allows us to capitalize on local and regional customer needs. Generally, our products are promoted to veterinarians and livestock producers by our sales organization which includes sales representatives and technical and veterinary operations specialists, and then sold directly by us or through distributors, retailers or e-commerce outlets. The depth of our product portfolio enables us to address the varying needs of customers in different species and geographies. Many of our top-selling product lines are distributed across both of our operating segments, leveraging our R&D operations and manufacturing and supply chain network.
Over the course of our history, we have focused on developing a diverse portfolio of animal health products, including medicines, vaccines and diagnostics, complemented by biodevices, genetic tests and a range of services. We refer to all different brands of a particular product, or its dosage forms for all species, as a product line. We have approximately 300 comprehensive product lines, including products for both companion animals and livestock within each of our major product categories.
In the first quarter of 2024, we modified the list of major product categories to include a category for pain and sedation products, which were previously included within other pharmaceutical products. The prior period presentation has been revised to reflect the new product category.
On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets, and, as a result, our major product categories no longer include the category of medicated feed additives. See Note 5. Acquisitions and Divestitures.
Our major product categories are:
•parasiticides: products that prevent or eliminate external and internal parasites such as fleas, ticks, lice and worms;
•vaccines: biological preparations that help prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response;
•dermatology: products that relieve itch associated with allergic conditions and atopic dermatitis;
•anti-infectives: products that prevent, kill or slow the growth of bacteria, fungi or protozoa;
•pain and sedation: products that alleviate pain, primarily associated with osteoarthritis and postoperative pain;
•other pharmaceutical: antiemetic, reproductive and oncology products; and
•animal health diagnostics: testing and analysis of blood, urine and other animal samples and related products and services, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services and blood glucose monitors.
Our remaining revenue is derived from other non-pharmaceutical product categories, such as nutritionals, as well as products and services in biodevices, genetic tests and precision animal health.
Our companion animal products help extend and improve the quality of life for pets; increase convenience and compliance for pet owners; and help veterinarians improve the quality of their care and the efficiency of their businesses. Growth in the companion animal medicines, vaccines and diagnostics sector is driven by economic development, related increases in disposable income and increases in pet ownership and spending on pet care. Companion animals are also living longer, deepening the human-animal bond, receiving increased medical treatment and benefiting from advances in animal health medicine, vaccines and diagnostics.
Our livestock products primarily help prevent or treat diseases and conditions to allow veterinarians and producers to care for their animals and to enable the cost-effective production of safe, high-quality animal protein. Human population growth and increasing standards of living are
important long-term growth drivers for our livestock products in three major ways. First, population growth and increasing standards of living drive demand for improved nutrition, particularly through increased consumption of animal protein. Second, population growth leads to greater natural resource constraints driving a need for enhanced productivity. Finally, as standards of living improve and the global chain faces increased scrutiny, there is more focus on food quality, safety, and reliability of supply.
The following tables present our revenue disaggregated by geographic area, species, and major product category:
Revenue by geographic area
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
United States$5,074 $4,555 $4,313 
Australia319 323 289 
Brazil414 393 330 
Canada277 255 238 
Chile123 140 141 
China270 320 382 
France156 142 126 
Germany225 202 176 
Italy129 121 111 
Japan147 158 173 
Mexico169 162 136 
Spain130 122 118 
United Kingdom314 277 235 
Other developed markets564 512 468 
Other emerging markets865 784 758 
9,176 8,466 7,994 
Contract manufacturing & human health80 78 86 
Total Revenue$9,256 $8,544 $8,080 
Revenue exceeded $100 million in thirteen countries outside the U.S. in 2024 and twelve countries outside the U.S. in 2023 and 2022. The U.S. was the only country to contribute more than 10% of total revenue in each year.
Revenue by major species
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
U.S.
Companion animal$4,054 $3,529 $3,341 
Livestock1,020 1,026 972 
5,074 4,555 4,313 
International
Companion animal2,224 2,047 1,862 
Livestock1,878 1,864 1,819 
4,102 3,911 3,681 
Total
Companion animal6,278 5,576 5,203 
Livestock2,898 2,890 2,791 
Contract manufacturing & human health80 78 86 
Total Revenue$9,256 $8,544 $8,080 
Revenue by species
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Companion Animal:
Dogs and Cats$5,993 $5,291 $4,939 
Horses285 285 264 
6,278 5,576 5,203 
Livestock:
Cattle1,531 1,503 1,440 
Poultry527 524 476 
Swine516 543 565 
Fish242 220 212 
Sheep and other82 100 98 
2,898 2,890 2,791 
Contract manufacturing & human health80 78 86 
Total Revenue$9,256 $8,544 $8,080 
Revenue by product category
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Parasiticides$2,153 $1,947 $1,860 
Vaccines1,827 1,771 1,718 
Dermatology1,655 1,427 1,329 
Anti-infectives1,100 1,057 1,081 
Pain and sedation851 602 420 
Other pharmaceuticals658 678 623 
Animal health diagnostics386 376 353 
Medicated feed additives293 354 360 
Other non-pharmaceuticals253 254 250 
9,176 8,466 7,994 
Contract manufacturing & human health80 78 86 
Total Revenue$9,256 $8,544 $8,080 
B. Other Revenue Information
Significant Customers
We primarily sell our companion animal products to veterinarians or to third-party veterinary distributors that typically then sell our products to veterinarians, and in each case, veterinarians then typically sell our products to pet owners. In certain markets, we also sell certain companion animal products through retail and e-commerce outlets. We sell our livestock products primarily to veterinarians and livestock producers, including beef and dairy farmers as well as pork and poultry operations, in addition to third-party veterinary distributors and retail outlets who then typically sell the products to livestock producers. Sales to our largest customer, a U.S. veterinary distributor, represented approximately 14% of total revenue for 2024, 15% of total revenue for 2023 and 14% of total revenue for 2022.
v3.25.0.1
Acquisitions and Divestitures
 12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions and Divestitures
5. Acquisitions and Divestitures
A. Acquisitions
During 2023, we acquired 100% of the issued share capital of PetMedix Ltd (PetMedix), a privately held research and development stage animal health biopharmaceutical company based in the U.K., which develops antibody-based therapeutics for companion animals. The purchase price included upfront cash consideration of $111 million, excluding $19 million of cash acquired, $5 million in cash withheld for customary post-closing adjustments, and contingent consideration up to $100 million based on the achievement of certain milestones. There are additional contingent payments to be made to the seller upon receipt of payments from a third party related to a preexisting collaboration arrangement between PetMedix and the third party. The initial fair value assessment of the contingent consideration and additional contingent payments is not material and the transaction did not have a material impact on our consolidated financial statements. We also completed the acquisition of adivo GmbH (adivo), a privately held research and development stage animal health biopharmaceutical company based in Germany. The transaction did not have a material impact on our consolidated financial statements.
During 2022, we completed the acquisition of Basepaws, a privately held petcare genetics company based in the U.S., which provides pet owners with genetic tests, analytics and early health risk assessments that can help manage the health, wellness and quality of care for their pets and helps Zoetis identify solutions to complex diseases by informing our research and innovation. We also completed the acquisition of NewMetrica, a privately held company based in Scotland, that provides scientifically-developed instruments to measure quality of life in companion animals. These transactions did not have a material impact on our consolidated financial statements.
During 2021, we entered into an agreement to acquire Jurox, a privately held animal health company based in Australia, which develops, manufactures and markets a wide range of veterinary medicines for treating companion animals and livestock. On September 30, 2022, after satisfying all customary closing conditions, including clearance from the Australian Competition and Consumer Commission, we completed the acquisition of Jurox. We acquired 100% of the outstanding shares for an aggregate cash purchase price of $226 million, which was adjusted to $240 million for cash and working capital and other adjustments as of the closing date. Net cash consideration transferred to the seller was $215 million during 2022 and $5 million during 2023. The transaction was accounted for as a business combination, with the assets acquired and liabilities assumed measured at their respective acquisition date fair values. The valuation was finalized during 2023. The table below presents the final fair values allocated to the assets and liabilities of Jurox as of the acquisition date:
(MILLIONS OF DOLLARS)Amounts
Cash and cash equivalents$20 
Accounts receivable8 
Inventories(a)
21 
Other current assets1 
Property, plant and equipment(b)
25 
Identifiable intangible assets(c)
135 
Other noncurrent assets7 
Accounts payable2 
Other current liabilities12 
Other noncurrent liabilities1 
Total net assets acquired202 
Goodwill(d)
38 
Total consideration$240 
(a)        Acquired inventory is comprised of finished goods, work in process and raw materials. The fair value of finished goods was determined based on net realizable value adjusted for the costs of the selling effort, a reasonable profit allowance for the selling effort, and estimated holding costs. The fair value of work in process was determined based on net realizable value adjusted for costs to complete the manufacturing process, costs of the selling effort, a reasonable profit allowance for the remaining manufacturing and selling effort, and an estimate of holding costs. The fair value of raw materials was determined to approximate book value.
(b)    Property, plant and equipment is comprised of buildings, machinery and equipment, land, construction in progress and furniture and fixtures. The fair value was primarily determined using a reproduction/replacement cost approach which measures the value of an asset by estimating the cost to acquire or construct comparable assets adjusted for age and condition of the asset.
(c)    Identifiable intangible assets consist of developed technology rights. The fair value of identifiable intangible assets was determined using the income approach, which includes a forecast of expected future cash flows. For additional information regarding identifiable intangible assets, see Note 13. Goodwill and Other Intangible Assets.
(d)        Goodwill represents the excess of consideration transferred over the fair values of the assets acquired and liabilities assumed. It is allocated to our International segment and is primarily attributable to cost and revenue synergies including market share capture, elimination of cost redundancies and gain of cost efficiencies, and intangible assets such as assembled workforce which are not separately recognizable. The primary strategic purpose of the acquisition was to enhance the company’s existing product portfolio.
B. Divestitures
On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets to Phibro Animal Health for an estimated net purchase price of $309 million, including $6 million of estimated post-closing adjustments subject to finalization. We received $303 million sales proceeds as of the end of the reporting period, less cash sold of $11 million resulting in $292 million net sales proceeds. We have determined that this divestiture does not qualify for reporting as a discontinued operation, as it does not represent a strategic shift that has or will have a major effect on our operations and/or financial results. We recorded a net pre-tax loss of $25 million within Other (income)/deductions—net, inclusive of costs to sell and foreign currency translation losses reclassified out of accumulated other comprehensive income into earnings.
As of the disposal date, the carrying amounts of the following major assets and liabilities were derecognized from our consolidated balance sheets:
October 31,
(MILLIONS OF DOLLARS)2024
Assets
Inventories$154 
Other current assets3 
Property, plant and equipment, less accumulated depreciation108 
Operating lease right-of-use assets2 
Goodwill(a)
12 
Identifiable intangible assets, less accumulated amortization26 
Noncurrent deferred tax assets2 
Other noncurrent assets9 
Total Assets$316 
Liabilities
Accounts payable$3 
Accrued expenses3 
Accrued compensation and related items2 
Other noncurrent liabilities8 
Total Liabilities$16 
(a) Net of $12 million loss recognized during 2024.
During 2023, we received net cash proceeds of $93 million ($99 million sales proceeds, net of cash sold of $6 million) for the sale of a majority interest in our pet insurance business, Pumpkin Insurance Services. We recorded a net pre-tax gain of $101 million within Other (income)/deductions—net, which includes $24 million related to the remeasurement of our retained noncontrolling investment to fair value. We also completed the divestiture of Performance Livestock Analytics, part of our precision animal health business. This transaction did not have a material impact on our consolidated financial statements.
v3.25.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
 12 Months Ended
Dec. 31, 2024
Restructuring and Related Activities [Abstract]  
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
6. Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures
In connection with our cost-reduction/productivity initiatives, we typically incur restructuring costs and charges associated with workforce reductions and site closings. In connection with our acquisition and divestiture activities, we typically incur costs and charges associated with executing the transactions. Acquisition activity may also include integrating the acquired operations, which may include expenditures for consulting and the integration of systems and processes, product transfers and restructuring the company, which may include charges related to employees, assets, and activities that will not continue in the company. Divestiture activity may also include costs to separate the divested operations, which may include expenditures for consulting and the disintegration of systems and processes, transfer costs, and restructuring charges, which may include charges related to employees, assets and activities that will not continue in the company's ongoing operations. All operating functions can be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as functions such as business technology, shared services and corporate operations.
The components of costs incurred in connection with restructuring initiatives, acquisitions, divestitures and cost-reduction/productivity initiatives are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Restructuring charges and certain acquisition and divestiture-related costs:
Acquisition-related costs(a)
$1 $7 $5 
Divestiture-related costs(b)
16 — — 
Restructuring charges(c)(d):
Employee termination costs36 41 3 
Asset impairment charges— 1 2 
Exit costs— 4 1 
Total Restructuring charges and certain acquisition and divestiture-related costs
$53 $53 $11 
(a)    Acquisition-related costs represent external, incremental costs directly related to integrating acquired businesses and primarily include expenditures for consulting and the integration of systems and processes, as well as product transfer costs as well as transaction costs that represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services.
(b)    Divestiture-related costs consisted of costs related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets.
(c)    The restructuring charges for the year ended December 31, 2024 primarily consisted of employee termination costs related to organizational structure refinements, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
    The restructuring charges for the year ended December 31, 2023 primarily consisted of employee termination and exit costs related to organizational structure refinements and other cost-reduction and productivity initiatives.
    The restructuring charges for the year ended December 31, 2022 primarily relates to employee termination and exit costs associated with cost-reduction and productivity initiatives in certain international markets, as well as asset impairment charges primarily related to the consolidation of manufacturing sites in China.
(d)    The restructuring charges are associated with the following:
•For the year ended December 31, 2024, Manufacturing/research/corporate of $14 million, U.S. of $7 million and International of $15 million.
•For the year ended December 31, 2023, Manufacturing/research/corporate of $22 million and International of $21 million.
•For the year ended December 31, 2022, Manufacturing/research/corporate of $2 million and International of $4 million.
The components of, and changes in, our restructuring accruals are as follows:
EmployeeAsset
TerminationImpairmentExit
(MILLIONS OF DOLLARS)CostsChargesCostsAccrual
Balance, December 31, 2021$23 $— $2 $25 
Provision3 2 1 6 
Non-cash activity— (2)— (2)
Utilization and other(a)
(12)— (2)(14)
Balance, December 31, 2022$14 $— $1 $15 
Provision41 1 4 46 
Non-cash activity— (1)— (1)
Utilization and other(a)
(23)— (2)(25)
Balance, December 31, 2023(b)
$32 $— $3 $35 
Provision43 — — 43 
Reserve adjustment(7)— — (7)
Utilization and other(a)
(42)— (1)(43)
Balance, December 31, 2024(b)(c)
$26 $— $2 $28 
(a)    Includes adjustments for foreign currency translation.
(b)    At December 31, 2024 and 2023, included in Accrued Expenses ($26 million) and Other noncurrent liabilities ($2 million and $9 million, respectively).
(c)    Includes contractual obligations of $28 million, of which payments are expected to be approximately $26 million in 2025 and $2 million thereafter.
v3.25.0.1
Other (Income)/Deductions - Net
 12 Months Ended
Dec. 31, 2024
Other Income and Expenses [Abstract]  
Other (Income)/Deductions - Net
7. Other (Income)/Deductions—Net
The components of Other (income)/deductions—net follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Royalty-related income(a)
$(5)$(37)$(4)
Interest income(106)(105)(50)
Identifiable intangible asset impairment charges(b)
15 35 39 
Other asset impairment charges— 1 7 
Net loss/(gain) on sale of businesses(c)
23 (101)— 
Foreign currency loss(d)
50 47 62 
Other, net4 1 (14)
Other (income)/deductions—net$(19)$(159)$40 
(a)    For 2023, primarily associated with a settlement received from a third-party for underpayment of royalties related to prior periods.
(b)    For 2024, primarily represents asset impairment charges related to our aquaculture business.
For 2023, primarily represents certain asset impairment charges related to our precision animal health and diagnostics businesses.
For 2022, primarily represents asset impairment charges related to customer relationships and developed technology rights in our diagnostics, poultry, cattle and swine businesses.
(c)    For 2024, primarily represents a net loss related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. For additional information, see Note 5. Acquisitions and Divestitures.
    For 2023, primarily relates to the gain on sale of a majority interest in our pet insurance business. For additional information, see Note 5. Acquisitions and Divestitures.
(d)    Primarily driven by costs related to hedging and exposures to certain developed and emerging market currencies.
v3.25.0.1
Tax Matters
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Tax Matters
8. Tax Matters
A. Taxes on Income
The income tax provision in the Consolidated Statements of Income includes tax costs and benefits, such as uncertain tax positions, repatriation decisions and audit settlements, among others.
The components of Income before provision for taxes on income follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
United States$1,867 $1,636 $1,645 
International1,266 1,300 1,011 
Income before provision for taxes on income$3,133 $2,936 $2,656 
The components of Provision for taxes on income based on the location of the taxing authorities follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
United States:
Current income taxes:
Federal$645 $341 $514 
State and local65 35 81 
Deferred income taxes:
Federal(297)(40)(198)
State and local(42)25 (49)
Total U.S. tax provision371 361 348 
International:
Current income taxes265 281 235 
Deferred income taxes1 (46)(38)
Total international tax provision266 235 197 
Provision for taxes on income$637 $596 $545 
Tax Rate Reconciliation
The reconciliation of the U.S. statutory income tax rate to our effective tax rate follows:
Year Ended December 31,
202420232022
U.S. statutory income tax rate21 %21 %21 %
State and local taxes, net of federal benefits0.6 1.6 0.9 
Unrecognized tax benefits and tax settlements and resolution of certain tax positions(a)
0.4 0.9 0.1 
Foreign Derived Intangible Income(1.5)(0.7)(0.2)
U.S. Research and Development Tax Credit (0.6)(0.7)(0.7)
Share-based payments(0.2)(0.3)(0.6)
Non-deductible / non-taxable items0.2 0.2 0.1 
Taxation of non-U.S. operations0.2 (0.8)(0.4)
All other—net0.2 (0.9)0.3 
Effective tax rate 20.3 %20.3 %20.5 %
(a)    For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see C. Tax Contingencies.
Our effective income tax rate was 20.3%, 20.3% and 20.5% in 2024, 2023 and 2022, respectively.
The effective tax rate for 2024, as compared to 2023, was primarily attributable to the favorable impact of a higher benefit in the U.S. related to foreign-derived intangible income and lower net discrete tax expenses, offset by a less favorable jurisdictional mix of earnings (which includes the impact of the location of earnings, repatriation costs and Pillar Two global minimum tax). Jurisdictional mix of earnings can vary depending on repatriation decisions, operating fluctuations in the normal course of business and the impact of non-deductible items and non-taxable items.
The global minimum tax provisions (Pillar Two) resulting from the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting project are effective beginning in 2024 and the impact of these provisions is included in our effective tax rate for 2024.
The lower effective tax rate for 2023, as compared to 2022, was primarily attributable to a higher benefit in the U.S. related to foreign-derived intangible income, a more favorable jurisdictional mix of earnings (which includes the impact of the location of earnings and repatriation costs), partially offset by a higher net discrete tax expense in 2023, mainly related to changes to prior years’ tax positions. Jurisdictional mix of earnings can vary depending on repatriation decisions, operating fluctuations in the normal course of business and the impact of non-deductible items and non-taxable items.
In 2022 and 2024, the company implemented an initiative to maximize its cash position in the U.S. This initiative resulted in a tax benefit in the U.S. in connection with a prepayment from a related foreign entity in Belgium which qualifies as foreign-derived intangible income; however, the 2022 income tax benefit was deferred to 2023 and 2024 and the 2024 income tax benefit was deferred to 2025 and 2026. A portion of the 2022 benefit was recognized during 2024. The remaining deferred benefit is included in Other current assets on our Consolidated Balance Sheets as of December 31, 2024 in the amount of $43 million.
B. Deferred Taxes
Deferred taxes arise as a result of basis differentials between financial statement accounting and tax amounts.
The components of our deferred tax assets and liabilities follow:
As of December 31,
20242023
(MILLIONS OF DOLLARS)Assets (Liabilities)
Prepaid/deferred items$219 $72 
Inventories21 30 
Capitalized research and development for tax301 224 
Identifiable intangible assets(103)(154)
Property, plant and equipment(179)(199)
Employee benefits74 62 
Restructuring and other charges10 (1)
Legal and product liability reserves14 12 
Net operating loss/credit carryforwards139 133 
Unremitted earnings(3)(4)
All other3 16 
Subtotal496 191 
Valuation allowance(123)(131)
Net deferred tax asset/(liability)(a)(b)
$373 $60 
(a)    The change in the total net deferred tax asset/(liability) from December 31, 2023 to December 31, 2024 is primarily attributable to an increase in deferred tax assets related to (i) prepaid/deferred items as a result of a prepayment from a related foreign entity in Belgium; and (ii) the capitalization and amortization of research and development costs for U.S. tax purposes, as well as a decrease in deferred tax liabilities related to identifiable intangible assets.
(b)    In 2024, included in Noncurrent deferred tax assets ($540 million) and Noncurrent deferred tax liabilities ($167 million). In 2023, included in Noncurrent deferred tax assets ($206 million) and Noncurrent deferred tax liabilities ($146 million).
We have carryforwards, primarily related to net operating losses, which are available to reduce future foreign, U.S. federal, and U.S. state income taxes payable with either an indefinite life or expiring at various times from 2025 to 2044.
Valuation allowances are provided when we believe that our deferred tax assets are not recoverable based on an assessment of estimated future taxable income that incorporates ongoing, prudent and feasible tax planning strategies. On the basis of this evaluation, as of December 31, 2024 and 2023, a valuation allowance of $123 million and $131 million, respectively, has been recorded to reflect only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as projections for growth.
In general, it is our practice and intention to permanently reinvest the majority of the earnings of the company’s non-U.S. subsidiaries. As of December 31, 2024, the cumulative amount of such undistributed earnings was approximately $8.5 billion, for which we have not provided U.S. and local income taxes, such as U.S. state income taxes, local withholding taxes, and taxes on currency gains and losses. Since these earnings are intended to be indefinitely reinvested overseas as of December 31, 2024, we cannot predict the time or manner of a potential repatriation. As such, other than the deferred tax liability associated with the one-time mandatory deemed repatriation tax on such undistributed earnings imposed by the Tax Cuts and Jobs Act of 2017, it is not practicable to estimate the additional deferred tax liability associated with the potential repatriation of the unremitted earnings.
C. Tax Contingencies
We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statute of limitations expire. We treat these events as discrete items in the period of resolution.
For a description of our accounting policies associated with accounting for income tax contingencies, see Note 3. Significant Accounting Policies: Deferred Tax Assets and Liabilities and Income Tax Contingencies. For a description of the risks associated with estimates and assumptions, see Note 3. Significant Accounting Policies: Estimates and Assumptions.
Uncertain Tax Positions
As tax law is complex and often subject to varied interpretations, it is uncertain whether some of our tax positions will be sustained upon audit. As of December 31, 2024, 2023 and 2022, we had approximately $214 million, $209 million and $192 million, respectively, in net liabilities associated with uncertain tax positions, excluding associated interest and penalties. As of December 31, 2024, 2023 and 2022, we had approximately $1 million,
$0 million and $11 million, respectively, in assets associated with uncertain tax benefits recorded in Noncurrent deferred tax assets and Other noncurrent assets.
•Tax liabilities associated with uncertain tax positions represent unrecognized tax benefits, which arise when the estimated benefit recorded in our financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. These unrecognized tax benefits relate primarily to issues common among multinational corporations. Substantially all of these unrecognized tax benefits, if recognized, would impact our effective income tax rate.
The reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:
(MILLIONS OF DOLLARS)202420232022
Balance, January 1$(209)$(194)$(189)
Increases based on tax positions taken during a prior period(a)
(1)(27)(20)
Decreases based on tax positions taken during a prior period(a)
— 20 9 
Increases based on tax positions taken during the current period(a)
(7)(13)(4)
Settlements1 — 7 
Lapse in statute of limitations(a)
3 5 3 
Balance, December 31(b)
$(213)$(209)$(194)
(a)    Primarily included in Provision for taxes on income.
(b)    In 2024, included in Other taxes payable ($213 million). In 2023, included in Other taxes payable ($209 million). In 2022, included in Noncurrent deferred tax assets and Other noncurrent assets ($2 million) and Other taxes payable ($192 million).
•Interest related to our unrecognized tax benefits is recorded in accordance with the laws of each jurisdiction and is recorded in Provision for taxes on income in our Consolidated Statements of Income. We recorded net interest expense of $12 million, $10 million and $4 million in 2024, 2023 and 2022, respectively. Gross accrued interest totaled $37 million, $26 million and $16 million as of December 31, 2024, 2023 and 2022, respectively, and were included in Other taxes payable. As of December 31, 2024, 2023 and 2022, gross accrued penalties totaled $1 million, $1 million and $3 million, respectively, and were included in Other taxes payable.
Status of Tax Audits and Potential Impact on Accruals for Uncertain Tax Positions
We are subject to taxation in the U.S. including various states, and foreign jurisdictions. The U.S. is one of our major tax jurisdictions, and we are currently under income tax audit by the U.S. Internal Revenue Service (IRS) for tax years 2017 through 2018. For U.S. state tax purposes, tax years 2017 through 2024 are open for examination. In July 2024, the IRS issued Notices of Proposed Adjustment (NOPA) related to the one-time mandatory deemed repatriation tax incurred on the 2018 U.S. Federal Income Tax return. In September 2024, the IRS issued a Revenue Agent Report (RAR) for the adjustments identified in the NOPA and a protest was filed with the IRS on November 15, 2024. As of December 31, 2024, the additional tax liability, based on the income adjustment proposed by the IRS under the RAR, is approximately $450 million, excluding interest and penalties.
Based on current facts and circumstances, we disagree with the IRS' position and will defend our position taken on the 2018 U.S. Federal Income tax return. We believe the amount previously accrued related to this uncertain tax position remains appropriate, but we will continue to evaluate the adequacy of our tax reserve as the audit progresses. However, the outcome of the tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are not consistent with management's expectations, we could be required to adjust our provision for income taxes and this amount could be material to our financial statements.
In addition to the open audit years in the U.S., we have open audit years in other major foreign tax jurisdictions, such as Canada (2021-2024), Asia-Pacific (2015-2024, primarily reflecting Australia, China and Japan), Europe (2012-2024, primarily reflecting France, Germany, Italy, Spain and the U.K.) and Latin America (2016-2024, primarily reflecting Brazil and Mexico).
Any settlements or statute of limitations expirations could result in a significant decrease in our uncertain tax positions. We do not expect that within the next twelve months any of our gross unrecognized tax benefits, exclusive of interest, could significantly decrease as a result of settlements with taxing authorities or the expiration of the statutes of limitations. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and any variation from such estimates could materially affect our financial statements in the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution. Finalizing audits with the relevant taxing authorities can include formal administrative and legal proceedings, and, as a result, it is difficult to estimate the timing and range of possible change related to our uncertain tax positions, and such changes could be significant.
v3.25.0.1
Financial Instruments
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Financial Instruments
9. Financial Instruments
A. Debt
Credit Facilities
In December 2022, we entered into an amended and restated revolving credit agreement with a syndicate of banks providing for a multi-year $1.0 billion senior unsecured revolving credit facility (the credit facility), which expires in December 2027. Subject to certain conditions, we have the right to increase the credit facility up to $1.5 billion. The credit facility contains a financial covenant requiring us to not exceed a maximum total leverage ratio (the ratio of consolidated net debt as of the end of the period to consolidated Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) for such period) of 3.50:1. Upon entering into a material acquisition, the maximum total leverage ratio increases to 4.00:1, and extends until the fourth full consecutive fiscal quarter ended immediately following the consummation of a material acquisition. In addition, the credit facility contains other customary covenants.
We were in compliance with all financial covenants as of December 31, 2024 and 2023. There were no amounts drawn under the credit facility as of December 31, 2024 and 2023.
We have additional lines of credit and other credit arrangements with a group of banks and other financial intermediaries for general corporate purposes. We maintain cash and cash equivalent balances in excess of our outstanding short-term borrowings. As of December 31, 2024, we had access to $50 million of lines of credit which expire at various times and are generally renewed annually. As of December 31, 2024 we had no borrowings outstanding related to these facilities and $3 million borrowings outstanding related to these facilities as of December 31, 2023.
Commercial Paper Program
In February 2013, we entered into a commercial paper program with a capacity of up to $1.0 billion. As of December 31, 2024 and 2023, there was no commercial paper outstanding under this program.
Senior Notes and Other Long-Term Debt
On November 8, 2022, we issued $1.35 billion aggregate principal amount of our senior notes (2022 senior notes), with an original issue discount of $2 million. These notes are comprised of $600 million aggregate principal amount of 5.400% senior notes due 2025 and $750 million aggregate principal amount of 5.600% senior notes due 2032. On February 1, 2023, the net proceeds were used to redeem in full, upon maturity, the $1.35 billion aggregate principal amount of our 3.250% 2013 senior notes due 2023.
Our senior notes are governed by an indenture and supplemental indentures (collectively, the indenture) between us and Deutsche Bank Trust Company Americas, as trustee. The indenture contains certain covenants, including limitations on our and certain of our subsidiaries' ability to incur liens or engage in sale lease-back transactions. The indenture also contains restrictions on our ability to consolidate, merge or sell substantially all of our assets. In addition, the indenture contains other customary terms, including certain events of default, upon the occurrence of which the senior notes may be declared immediately due and payable.
Pursuant to the indenture, we are able to redeem the senior notes of any series, in whole or in part, at any time by paying a “make whole” premium, plus accrued and unpaid interest to, but excluding, the date of redemption. Upon the occurrence of a change of control of us and a downgrade of the senior notes below an investment grade rating by each of Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, we are, in certain circumstances, required to make an offer to repurchase all of the outstanding senior notes at a price equal to 101% of the aggregate principal amount of the senior notes together with accrued and unpaid interest to, but excluding, the date of repurchase.
The components of our long-term debt are as follows:
As of December 31,
(MILLIONS OF DOLLARS)20242023
4.500% 2015 senior notes due 2025
$750 $750 
5.400% 2022 senior notes due 2025
600 600 
3.000% 2017 senior notes due 2027
750 750 
3.900% 2018 senior notes due 2028
500 500 
2.000% 2020 senior notes due 2030
750 750 
5.600% 2022 senior notes due 2032
750 750 
4.700% 2013 senior notes due 2043
1,150 1,150 
3.950% 2017 senior notes due 2047
500 500 
4.450% 2018 senior notes due 2048
400 400 
3.000% 2020 senior notes due 2050
500 500 
6,650 6,650 
Unamortized debt discount / debt issuance costs(54)(60)
Less current portion of long-term debt1,350 — 
Cumulative fair value adjustment for interest rate swap contracts(26)(26)
Long-term debt, net of discount and issuance costs$5,220 $6,564 
The fair value of our long-term debt was $6,097 million and $6,319 million as of December 31, 2024 and 2023, respectively, and has been determined using a third-party model that uses significant inputs derived from, or corroborated by, observable market data and Zoetis’ credit rating (Level 2 inputs). See Note 3. Significant Accounting Policies— Fair Value.
The following table provides the principal amount of debt outstanding as of December 31, 2024 by scheduled maturity date. The table also provides the expected interest payments on these borrowings as of December 31, 2024.
After
(MILLIONS OF DOLLARS)202520262027202820292029Total
Maturities$1,350 $— $750 $500 $— $4,050 $6,650 
Interest payments $272 $206 $206 $183 $164 $1,863 $2,894 
Interest Expense
Interest expense, net of capitalized interest, was $225 million, $239 million and $221 million for 2024, 2023 and 2022, respectively. Capitalized interest expense was $39 million, $27 million and $21 million for 2024, 2023 and 2022, respectively.
B. Derivative Financial Instruments
Foreign Exchange Risk
A significant portion of our revenue, earnings and net investment in foreign affiliates is exposed to changes in foreign exchange rates. We seek to manage our foreign exchange risk, in part, through operational means, including managing same-currency revenue in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. Depending on market conditions, foreign exchange risk is also managed through the use of various derivative financial instruments. These derivative financial instruments serve to manage the exposure of our net investment in certain foreign operations to changes in foreign exchange rates and protect net income against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.
All derivative financial instruments used to manage foreign currency risk are measured at fair value and are reported as assets or liabilities on the Consolidated Balance Sheets. The derivative financial instruments primarily offset exposures in the Australian dollar, British pound, Canadian dollar, Chinese renminbi, euro and Norwegian krone. Changes in fair value are reported in earnings or in Accumulated other comprehensive loss, depending on the nature and purpose of the financial instrument, as follows:
•For foreign currency forward-exchange contracts not designated as hedging instruments, we recognize the gains and losses that are used to offset the same foreign currency assets or liabilities immediately into earnings along with the earnings impact of the items they generally offset. These contracts essentially take the opposite currency position of that reflected in the month-end balance sheet to counterbalance the effect of any currency movement. The vast majority of the foreign currency forward-exchange contracts mature within 60 days and all mature within three years.
•For foreign exchange derivative instruments that are designated as hedging instruments against our net investment in foreign operations, changes in the fair value are recorded as a component of cumulative translation adjustment within Accumulated other comprehensive loss and reclassified into earnings when the foreign investment is sold or substantially liquidated. These instruments include cross-currency interest rate swaps and foreign currency forward-exchange contracts. Gains and losses excluded from the assessment of hedge effectiveness are recognized in earnings (Interest expense—net of capitalized interest). The cash flows from these contracts are reflected within the investing section of our Consolidated Statements of Cash Flows. These contracts have varying maturities of up to three years.
Interest Rate Risk
The company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rates and to reduce its overall cost of borrowing.
•In anticipation of issuing fixed-rate debt, we may use forward-starting interest rate swaps that are designated as cash flow hedges to hedge against changes in interest rates that could impact expected future issuances of debt. Unrealized gains or losses on the forward-starting interest rate swaps are reported in Accumulated other comprehensive loss and are recognized in earnings over the life of the future fixed rate notes. When the company discontinues hedge accounting because it is no longer probable that an anticipated transaction will occur within the originally expected period of execution, or within an additional two-month period thereafter, changes to fair value accumulated in other comprehensive income are recognized immediately in earnings.
•During the period from 2019 to 2022, we entered into forward-starting interest rate swaps with an aggregate notional value of $650 million. We designated these swaps as cash flow hedges against interest rate exposure related principally to the issuance of fixed-rate debt to refinance our 3.250% 2013 senior notes due 2023. Upon issuance of our 2022 senior notes, we terminated these contracts and received $114 million in cash from the counterparties for settlement, included in Net cash provided by operating activities in the Consolidated Statements of Cash Flows. The settlement amount, which represented the fair value of the contracts at the time of termination, was recorded in Accumulated other comprehensive loss, and will be amortized into income over the life of the 5.600% 2022 senior notes due 2032.
•As of December 31, 2024, we had outstanding forward-starting interest rate swaps, having an effective date and mandatory termination date in March 2026, to hedge against interest rate exposure related principally to the anticipated future issuance of fixed-rate debt to be used primarily to refinance our 4.500% 2015 senior notes due 2025.
•We may use fixed-to-floating interest rate swaps that are designated as fair value hedges to hedge against changes in the fair value of certain fixed-rate debt attributable to changes in the benchmark the Secured Overnight Financing Rate (SOFR). These derivative instruments effectively convert a portion of the company’s long-term debt from fixed-rate to floating-rate debt based on the daily SOFR rate plus a spread. Gains or losses on the fixed-to-floating interest rate swaps due to changes in SOFR are recorded in Interest expense, net of capitalized interest. Changes in the fair value of the fixed-to-floating interest rate swaps are offset by changes in the fair value of the underlying fixed-rate debt. As of December 31, 2024, we had outstanding fixed-to-floating interest rate swaps that correspond to a portion of the 3.900% 2018 senior notes due 2028 and the 2.000% 2020 senior notes due 2030. The amounts recorded during 2024 for changes in the fair value of these hedges are not material to our consolidated financial statements.
During the first quarter of 2023, we executed amendments to certain of our interest rate swap contract, which changed the floating rate index from LIBOR to SOFR. These amendments did not have a material impact on our consolidated financial statements.
Outstanding Positions
The aggregate notional amount of derivative instruments are as follows:
Notional
As of December 31,
(MILLIONS)20242023
Derivatives not Designated as Hedging Instruments
     Foreign currency forward-exchange contracts$2,070 $1,948 
Derivatives Designated as Hedging Instruments
     Foreign exchange derivative instruments (in foreign currency):
         Euro800 650 
         Danish krone475 600 
         Swiss franc25 25 
     Forward-starting interest rate swaps $300 $100 
     Fixed-to-floating interest rate swap contracts$250 $250 
Fair Value of Derivative Instruments
The classification and fair values of derivative instruments are as follows:
Fair Value of Derivatives
As of December 31,
(MILLIONS OF DOLLARS)Balance Sheet Location20242023
Derivatives Not Designated as Hedging Instruments:
   Foreign currency forward-exchange contractsOther current assets$18 $11 
   Foreign currency forward-exchange contractsOther current liabilities (6)(11)
Total derivatives not designated as hedging instruments12 — 
Derivatives Designated as Hedging Instruments:
   Forward-starting interest rate swap contractsOther non-current assets$26 $12 
   Foreign exchange derivative instrumentsOther current assets55 5 
   Foreign exchange derivative instrumentsOther non-current assets4 11 
   Foreign exchange derivative instrumentsOther current liabilities— (20)
   Foreign exchange derivative instrumentsOther non-current liabilities— (1)
   Fixed-to-floating interest rate swap contractsOther non-current liabilities(26)(26)
Total derivatives designated as hedging instruments59 (19)
Total derivatives$71 $(19)
The company’s derivative transactions are subject to master netting agreements that mitigate credit risk by permitting net settlement of transactions with the same counterparty. The company also has collateral security agreements with certain of its counterparties. Under these collateral security agreements either party is required to post cash collateral when the net fair value of derivative instruments covered by the collateral agreement exceeds contractually established thresholds. At December 31, 2024, there was $51 million of collateral received and $20 million posted related to derivative instruments recorded in Other current liabilities and Other current assets, respectively. At December 31, 2023, there was $13 million of collateral received and $33 million of collateral posted related to derivative instruments recorded in Other current liabilities and Other current assets, respectively.
We use a market approach in valuing financial instruments on a recurring basis. Our derivative financial instruments are measured at fair value on a recurring basis using Level 2 inputs in the calculation of fair value. See Note 3. Significant Accounting Policies— Fair Value.
The amounts of net losses on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions - net, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Foreign currency forward-exchange contracts$(11)$(25)
These amounts were substantially offset in Other (income)/deductions—net by the effect of changing exchange rates on the underlying foreign currency exposures.
The amounts of unrecognized net gains/(losses) on interest rate swap contracts, recorded, net of tax, in Accumulated other comprehensive loss, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Forward starting interest rate swap contracts$11 $2 
Foreign exchange derivative instruments$44 $(23)
Gains on interest rate swap contracts, recognized within Interest expense, net of capitalized interest, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Foreign exchange derivative instruments$17 $19 
The net amount of deferred losses related to derivative instruments designated as cash flow hedges that is expected to be reclassified from Accumulated other comprehensive loss into earnings over the next 12 months is not material.
v3.25.0.1
Leases
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Leases
10. Leases
We have facilities and vehicles under various non-cancellable operating leases with third parties and an equipment finance lease with a third party. The operating leases generally have remaining terms ranging from 1 to 14 years, inclusive of renewal options that are reasonably certain of exercise. The finance lease has a remaining term of 29 years.
Supplemental information for our lease portfolio is as follows:
As of December 31,
(MILLIONS OF DOLLARS, EXCEPT LEASE TERM AND DISCOUNT RATE AMOUNTS)20242023
Supplemental Balance Sheet information:
Operating lease right-of-use assets$219 $230 
Finance lease right of use assets (in Other noncurrent assets)
9 9 
Total lease assets$228 $239 
Lease liabilities:
Operating lease liabilities - current (in Other current liabilities)
$51 $48 
Finance lease liabilities - current (in Other current liabilities)
1 1 
Operating lease liabilities - noncurrent174 188 
Finance lease liabilities - noncurrent (in Other noncurrent liabilities)
7 8 
Total lease liabilities$233 $245 
Weighted-average remaining lease term—operating leases (years)6.577.26
Weighted-average remaining lease term—finance leases (years)29.1930.27
Weighted-average discount rate—operating leases3.65 %3.41 %
Weighted-average discount rate—finance leases4.97 %4.99 %
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Supplemental Income Statement information for operating leases:
Operating lease expense$59 $56 $51 
Variable lease costs18 20 12 
Short-term lease costs not included in the measurement of lease liabilities13 11 12 
Supplemental Income Statement information for finance leases:
Amortization of right-of-use assets1 1 — 
Total lease costs$91 $88 $75 
Supplemental Cash Flow information for leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows – operating leases$61 $57 $51 
Financing cash flows – finance leases1 — — 
Lease obligations obtained in exchange for right-of-use assets - operating (non-cash)46 73 99 
Lease obligations obtained in exchange for right-of-use assets – finance (non-cash)— 9 — 
Future minimum lease payments under non-cancellable lease contracts as of December 31, 2024 are as follows:
TotalLess:
AfterLeaseImputed
(MILLIONS OF DOLLARS)202520262027202820292029PaymentsInterestTotal
Operating leases$59 $50 $39 $29 $18 $63 $258 $(33)$225 
Finance leases$1 $1 $1 $1 $1 $7 $12 $(4)$8 
Leases
10. Leases
We have facilities and vehicles under various non-cancellable operating leases with third parties and an equipment finance lease with a third party. The operating leases generally have remaining terms ranging from 1 to 14 years, inclusive of renewal options that are reasonably certain of exercise. The finance lease has a remaining term of 29 years.
Supplemental information for our lease portfolio is as follows:
As of December 31,
(MILLIONS OF DOLLARS, EXCEPT LEASE TERM AND DISCOUNT RATE AMOUNTS)20242023
Supplemental Balance Sheet information:
Operating lease right-of-use assets$219 $230 
Finance lease right of use assets (in Other noncurrent assets)
9 9 
Total lease assets$228 $239 
Lease liabilities:
Operating lease liabilities - current (in Other current liabilities)
$51 $48 
Finance lease liabilities - current (in Other current liabilities)
1 1 
Operating lease liabilities - noncurrent174 188 
Finance lease liabilities - noncurrent (in Other noncurrent liabilities)
7 8 
Total lease liabilities$233 $245 
Weighted-average remaining lease term—operating leases (years)6.577.26
Weighted-average remaining lease term—finance leases (years)29.1930.27
Weighted-average discount rate—operating leases3.65 %3.41 %
Weighted-average discount rate—finance leases4.97 %4.99 %
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Supplemental Income Statement information for operating leases:
Operating lease expense$59 $56 $51 
Variable lease costs18 20 12 
Short-term lease costs not included in the measurement of lease liabilities13 11 12 
Supplemental Income Statement information for finance leases:
Amortization of right-of-use assets1 1 — 
Total lease costs$91 $88 $75 
Supplemental Cash Flow information for leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows – operating leases$61 $57 $51 
Financing cash flows – finance leases1 — — 
Lease obligations obtained in exchange for right-of-use assets - operating (non-cash)46 73 99 
Lease obligations obtained in exchange for right-of-use assets – finance (non-cash)— 9 — 
Future minimum lease payments under non-cancellable lease contracts as of December 31, 2024 are as follows:
TotalLess:
AfterLeaseImputed
(MILLIONS OF DOLLARS)202520262027202820292029PaymentsInterestTotal
Operating leases$59 $50 $39 $29 $18 $63 $258 $(33)$225 
Finance leases$1 $1 $1 $1 $1 $7 $12 $(4)$8 
v3.25.0.1
Inventories
 12 Months Ended
Dec. 31, 2024
Inventory Disclosure [Abstract]  
Inventories
11. Inventories
The components of inventory follow:
As of December 31,
(MILLIONS OF DOLLARS)20242023
Finished goods$996 $1,147 
Work-in-process933 966 
Raw materials and supplies377 451 
Inventories$2,306 $2,564 
v3.25.0.1
Property, Plant and Equipment
 12 Months Ended
Dec. 31, 2024
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
12. Property, Plant and Equipment
The components of property, plant and equipment follow:
Useful LivesAs of December 31,
(MILLIONS OF DOLLARS)(Years)20242023
Land—$28 $25 
Buildings
33
1,292 1,316 
Machinery, equipment and fixtures
3 - 20
3,353 3,372 
Construction-in-progress—1,353 1,085 
6,026 5,798 
Less: Accumulated depreciation2,635 2,594 
Property, plant and equipment$3,391 $3,204 
Depreciation expense was $327 million in 2024, $306 million in 2023 and $272 million in 2022.
v3.25.0.1
Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
13. Goodwill and Other Intangible Assets
A. Goodwill
The components of, and changes in, the carrying amount of goodwill follow:
(MILLIONS OF DOLLARS)U.S.InternationalTotal
Balance, December 31, 2022$1,485 $1,261 $2,746 
Additions(a)
24 14 38 
Transfers/Adjustments(b)
25 (34)(9)
Other(c)
(2)(14)(16)
Balance, December 31, 2023$1,532 $1,227 $2,759 
Other(c)
(17)(18)(35)
Balance, December 31, 2024$1,515 $1,209 $2,724 
(a)     Primarily relates to the acquisitions of PetMedix and adivo. See Note 5. Acquisitions and Divestitures.
(b)     Primarily relates to asset transfers from international markets to the U.S.
(c)     Includes adjustments for foreign currency translation.
For 2024, also includes adjustments for the derecognition of goodwill of $24 million related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. See Note 5. Acquisitions and Divestitures.
For 2023, also includes the sale of a majority interest in our pet insurance business within our U.S. segment.
The gross goodwill balance was $3,260 million as of December 31, 2024 and $3,295 million as of December 31, 2023. Accumulated goodwill impairment losses were $536 million as of December 31, 2024 and 2023.
B. Other Intangible Assets
The components of identifiable intangible assets follow:
As of December 31, 2024As of December 31, 2023
IdentifiableIdentifiable
GrossIntangible Assets,GrossIntangible Assets,
CarryingAccumulatedLess AccumulatedCarryingAccumulatedLess Accumulated
(MILLIONS OF DOLLARS)AmountAmortizationAmortizationAmountAmortizationAmortization
Finite-lived intangible assets:
Developed technology rights(a)
$1,891 $(1,175)$716 $1,986 $(1,101)$885 
Brands and tradenames(a)
367 (246)121 383 (246)137 
Other278 (197)81 270 (190)80 
Total finite-lived intangible assets2,536 (1,618)918 2,639 (1,537)1,102 
Indefinite-lived intangible assets:
Brands and tradenames(a)
66 — 66 88 — 88 
In-process research and development136 — 136 141 — 141 
Product rights7 — 7 7 — 7 
Total indefinite-lived intangible assets209 — 209 236 — 236 
Identifiable intangible assets$2,745 $(1,618)$1,127 $2,875 $(1,537)$1,338 
Developed Technology Rights
Developed technology rights represent the amortized cost associated with developed technology, which has been acquired from third parties and which can include the right to develop, use, market, sell and/or offer for sale the product, compounds and intellectual property that we have acquired with respect to products, compounds and/or processes that have been completed. These assets include technologies related to the care and treatment of dogs, cats, horses, cattle, swine, poultry, fish and sheep.
Brands and Tradenames
Brands and tradenames represent the amortized or unamortized cost associated with product name recognition, as the products themselves do not receive patent protection. The most significant finite-lived brands and tradenames are related to Abaxis, Platinum Performance, and Lutalyse. The most significant indefinite-lived brands and tradenames were acquired from SmithKlineBeecham and the Linco family of products.
In-Process Research and Development
IPR&D assets represent R&D assets that have not yet received regulatory approval in a major market. The majority of these IPR&D assets were acquired in connection with our acquisition of two research and development stage animal health biopharmaceutical companies, PetMedix and adivo.
IPR&D assets are required to be classified as indefinite-lived assets until the successful completion or abandonment of the associated R&D effort. Accordingly, during the development period after the date of acquisition, these assets will not be amortized until approval is obtained in a major market, typically either the U.S., U.K. or the EU, or in a series of other countries, subject to certain specified conditions and management judgment. At that time, we will determine the useful life of the asset, reclassify the asset out of IPR&D and begin amortization. If the associated R&D effort is abandoned, the related IPR&D assets will be written-off and we will record an impairment charge.
There can be no certainty that IPR&D assets ultimately will yield a successful product.
Product Rights
Product rights represent product registration and application rights that were acquired from Pfizer in 2014.
C. Amortization
The weighted average life of our total finite-lived intangible assets is approximately 8.2 years. Total amortization expense for finite-lived intangible assets was $170 million in 2024, $185 million in 2023 and $193 million in 2022.
The annual amortization expense expected for the years 2025 through 2029 is as follows:
(MILLIONS OF DOLLARS)20252026202720282029
Amortization expense$154 $147 $143 $114 $77 
v3.25.0.1
Benefit Plans
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Benefit Plans
14. Benefit Plans
Pension expense associated with the U.S. and certain significant international locations totaled $7 million in 2024, $6 million in 2023 and $12 million in 2022.
A.    International Pension Plans
Information about the dedicated pension plans is provided in the tables below.
Obligations and Funded Status––Dedicated Plans
The following table provides an analysis of the changes in the benefit obligations, plan assets and funded status of our dedicated pension plans (including those transferred to us):
As of and for the
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Change in benefit obligation:
Projected benefit obligation, beginning$129 $122 
Service cost5 5 
Interest cost5 5 
Changes in actuarial assumptions and other9 (4)
Settlements and curtailments(2)— 
Benefits paid(4)(3)
Adjustments for foreign currency translation(5)5 
Other––net(1)(1)
Benefit obligation, ending136 129 
Change in plan assets:
Fair value of plan assets, beginning86 78 
Actual return on plan assets12 3 
Company contributions6 6 
Settlements and curtailments(3)— 
Benefits paid(4)(3)
Adjustments for foreign currency translation(3)2 
Other––net— — 
Fair value of plan assets, ending94 86 
Funded status—Projected benefit obligation in excess of plan assets at end of year(a)
$(42)$(43)
(a) Included in Other noncurrent liabilities.
Changes in the benefit obligation resulted in a net loss of $9 million in 2024 and a net gain of $4 million in 2023.
Actuarial gains were $3 million ($2 million, net of tax) at December 31, 2024 and $4 million ($4 million, net of tax) at December 31, 2023. The actuarial gains and losses primarily represent the cumulative difference between the actuarial assumptions and actual return on plan assets, changes in discount rates and changes in other assumptions used in measuring the benefit obligations. These actuarial gains and losses are recognized in Accumulated other comprehensive loss. The actuarial losses will be amortized into net periodic benefit costs over an average period of 9.8 years.
Information related to the funded status of selected plans follows:
As of December 31,
(MILLIONS OF DOLLARS)20242023
Pension plans with an accumulated benefit obligation in excess of plan assets:
Fair value of plan assets$9 $8 
Accumulated benefit obligation50 45 
Pension plans with a projected benefit obligation in excess of plan assets:
Fair value of plan assets9 64 
Projected benefit obligation55 109 
Net Periodic Benefit Costs––Dedicated Plans
The following table provides the net periodic benefit cost associated with dedicated pension plans (including those transferred to us):
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Service cost$5 $5 $6 
Interest cost5 5 2 
Expected return on plan assets(4)(4)(3)
Amortization of net losses— — 1 
Settlement and curtailments (gains) / losses1 — — 
Net periodic benefit cost$7 $6 $6 
Actuarial Assumptions––Dedicated Plans
The following table provides the weighted average actuarial assumptions for the dedicated pension plans (including those transferred to us):
As of December 31,
(PERCENTAGES)202420232022
Weighted average assumptions used to determine benefit obligations:
Discount rate3.5 %4.2 %3.7 %
Rate of compensation increase3.5 %3.6 %3.5 %
Cash balance credit interest rate1.7 %1.6 %1.7 %
Weighted average assumptions used to determine net benefit cost for the year ended December 31:
Discount rate4.2 %3.7 %1.4 %
Expected return on plan assets4.6 %4.7 %3.3 %
Rate of compensation increase3.6 %3.5 %3.4 %
Cash balance credit interest rate1.6 %1.7 %1.5 %
The assumptions above are used to develop the benefit obligations at the end of the year and to develop the net periodic benefit cost for the following year. Therefore, the assumptions used to determine the net periodic benefit cost for each year are established at the end of each previous year, while the assumptions used to determine the benefit obligations are established at each year-end. The net periodic benefit cost and the benefit obligations are based on actuarial assumptions that are reviewed on an annual basis. The assumptions are revised based on an annual evaluation of long-term trends, as well as market conditions that may have an impact on the cost of providing retirement benefits.
Actuarial and other assumptions for pension plans can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For a description of the risks associated with estimates and assumptions, see Note 3. Significant Accounting Policies—Estimates and Assumptions.
Plan Assets—Dedicated Plans
The components of plan assets follow:
As of December 31,
(MILLIONS OF DOLLARS)20242023
Cash and cash equivalents$1 $1 
Equity securities: Equity commingled funds37 34 
Debt securities: Government bonds46 40 
Other investments10 11 
Total(a)
$94 $86 
(a)    Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 3. Significant Accounting Policies—Fair Value). Investment plan assets are valued using Level 1 or Level 2 inputs.
A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Note 3. Significant Accounting Policies—Estimates and Assumptions.
Specifically, the following methods and assumptions were used to estimate the fair value of our pension assets:
•    Equity commingled funds––observable market prices (Level 1).
•    Government bonds and other investments––principally observable market prices (Level 2).
The long-term target asset allocations and the percentage of the fair value of plans assets for dedicated benefit plans follow:
As of December 31,
Target allocation
percentagePercentage of Plan Assets
(PERCENTAGES)202420242023
Cash and cash equivalents
0-10%
1.4 %1.7 %
Equity securities
0-60%
39.2 %39.4 %
Debt securities
15-100%
48.4 %46.9 %
Other investments
0-100%
11.0 %12.0 %
Total
100%
100 %100 %
Zoetis utilizes long-term asset allocation ranges in the management of our plans’ invested assets. Long-term return expectations are developed with input from outside investment consultants based on the company’s investment strategy, which takes into account historical experience, as well as the impact of portfolio diversification, active portfolio management, and the investment consultant’s view of current and future economic and financial market conditions. As market conditions and other factors change, the targets may be adjusted accordingly and actual asset allocations may vary from the target allocations.
The long-term asset allocation ranges reflect the asset class return expectations and tolerance for investment risk within the context of the respective plans’ long-term benefit obligations. These ranges are supported by an analysis that incorporates historical and expected returns by asset class, as well as volatilities and correlations across asset classes and our liability profile. This analysis, referred to as an asset-liability analysis, also provides an estimate of expected returns on plan assets, as well as a forecast of potential future asset and liability balances.
The investment consultants review investment performance with Zoetis on a quarterly basis in total, as well as by asset class, relative to one or more benchmarks.
Cash Flows—Dedicated Plans
Our plans are generally funded in amounts that are at least sufficient to meet the minimum requirements set forth in applicable employee benefit laws and local tax and other laws.
We expect to contribute approximately $6 million to our dedicated pension plans in 2025. Benefit payments are expected to be approximately $6 million for 2025, $10 million for 2026, $7 million for 2027, $6 million for 2028 and $13 million for 2029. Benefit payments are expected to be approximately $51 million in the aggregate for the five years thereafter. These expected benefit payments reflect the future plan benefits subsequent to 2025 projected to be paid from the plans or from the general assets of Zoetis entities under the current actuarial assumptions used for the calculation of the projected benefit obligation and, therefore, actual benefit payments may differ from projected benefit payments.
B.    Postretirement Plans
Postretirement benefit expense associated with these U.S. retiree medical plans totaled $0 million per year in 2024 and 2023, and $4 million in 2022.
C.    Defined Contribution Plans
Zoetis has a voluntary defined contribution plan, the Zoetis Savings Plan (ZSP) that allows participation by substantially all U.S. employees. Zoetis matches 100% of employee contributions, up to a maximum of 5% of each employee’s eligible compensation. The ZSP also includes a profit-sharing feature that provides for an additional contribution ranging between 0 and 8 percent of each employee’s eligible compensation. All eligible employees receive the profit-sharing contribution regardless of the amount they choose to contribute to the ZSP. The profit-sharing contribution is a discretionary amount provided by Zoetis and is determined on an annual basis. Employees can direct their contributions and the company's matching and profit-sharing contributions into any of the funds offered. These funds provide participants with a cross section of investing options, including the Zoetis stock fund. The matching and profit-sharing contributions are cash funded.
Employees are permitted to diversify all or any portion of their company matching or profit-sharing contribution. Once the contributions have been paid, Zoetis has no further payment obligations. Contribution expense, associated with the ZSP, totaled $79 million in 2024, $69 million in 2023 and $57 million in 2022.
Employees in the U.S. who meet certain eligibility requirements participate in a supplemental (non-qualified) savings plan sponsored by Zoetis. The cost/(benefit) of the supplemental savings plan was $3 million in 2024, $11 million in 2023 and $(9) million in 2022. Benefit payments for this plan are expected to be approximately $5 million in 2025 and $43 million thereafter.
v3.25.0.1
Share-Based Payments
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Share-Based Payments
15. Share-based Payments
The Zoetis 2013 Equity and Incentive Plan, Amended and Restated as of May 19, 2022 (Equity Plan), provides long-term incentives to our employees and non-employee directors. The principal types of share-based awards available under the Equity Plan may include, but are not limited to, stock options, restricted stock and restricted stock units (RSUs), deferred stock units (DSUs), performance-vesting restricted stock units (PSUs), and other equity-based or cash-based awards.
Thirty million shares of stock were approved and registered with the Securities and Exchange Commission for grants to participants under the Equity Plan. The shares reserved may be used for any type of award under the Equity Plan. At December 31, 2024, the aggregate number of remaining shares available for future grant under the Equity Plan was approximately 13 million shares.
A. Share-Based Compensation Expense
The components of share-based compensation expense follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Stock options / stock appreciation rights$11 $8 $10 
RSUs / DSUs42 37 34 
PSUs21 15 18 
Share-based compensation expense—total(a)
$74 $60 $62 
Tax benefit for share-based compensation expense(9)(8)(8)
Share-based compensation expense, net of tax$65 $52 $54 
(a)    For each of the years ended December 31, 2024, 2023 and 2022, we capitalized up to $1 million of share-based compensation expense to inventory.
B. Stock Options
Stock options represent the right to purchase shares of our common stock within a specified period of time at a specified price. The exercise price for a stock option will be not less than 100% of the fair market value of the common stock as of the NYSE market close on the date of grant. Stock options granted may include those intended to be “incentive stock options” within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986 (the Code).
Stock options are accounted for using a fair-value-based method at the date of grant in the Consolidated Statements of Income. The values determined through this fair-value-based method generally are amortized on a straight-line basis over the vesting term.
Eligible employees may receive Zoetis stock option awards. Zoetis stock option awards granted prior to 2023 generally vest after three years of continuous service from the date of grant and have a contractual term of 10 years while stock option awards granted in and after 2023 are subject to graded vesting over three years from the date of grant and have a contractual term of 10 years.
The fair-value-based method for valuing each Zoetis stock option grant on the grant date uses the Black-Scholes-Merton option-pricing model, which incorporates a number of valuation assumptions noted in the following table, shown at their weighted-average values:
Year Ended December 31,
202420232022
Expected dividend yield(a)
0.87 %0.92 %0.64 %
Risk-free interest rate(b)
4.06 %3.84 %1.81 %
Expected stock price volatility(c)
26.99 %28.63 %27.64 %
Expected term(d) (years)
4.14.24.9
(a)    Determined using a constant dividend yield during the expected term of the Zoetis stock option.
(b)     Determined using the interpolated yield on U.S. Treasury zero-coupon issues.
(c)     Determined using an equal weighting between historical volatility of the Zoetis stock price and implied volatility. The selection of the blended historical and implied volatility approach was based on our assessment that this calculation of expected volatility is more representative of future stock price trends.
(d)     Determined using expected exercise and post-vesting termination patterns.
The following table provides an analysis of stock option activity for the year ended December 31, 2024:
Weighted-Average Remaining Contractual Term
Aggregate Intrinsic Value(a)
Weighted-Average
SharesExercise Price(Years)(Millions)
Outstanding, December 31, 20231,526,502 $119.13 
Granted276,086 195.49 
Exercised(315,736)64.82 
Forfeited(38,903)182.58 
Outstanding, December 31, 20241,447,949 $143.83 6.0$43,065,332 
Exercisable, December 31, 2024846,647 $112.36 4.4$42,923,962 
(a)    Market price of underlying Zoetis common stock less exercise price.
As of December 31, 2024, there was approximately $11 million of unrecognized compensation costs related to nonvested stock options, which will be recognized over an expected remaining weighted-average period of eight months.
The following table summarizes data related to stock option activity:
Year Ended/As of December 31,
(MILLIONS OF DOLLARS, EXCEPT PER STOCK OPTION AMOUNTS)202420232022
Weighted-average grant date fair value per stock option$50.77 $43.56 $51.13 
Aggregate intrinsic value on exercise40 81 31 
Cash received upon exercise20 42 15 
Tax benefits realized related to exercise 17 17 19 
C. Restricted Stock Units (RSUs)
Restricted stock units represent the right to receive a share of our common stock that is subject to a risk of forfeiture until the restrictions lapse at the end of the vesting period subject to the recipient's continued employment. RSUs accrue dividend equivalent units and are paid in shares of our common stock upon vesting (or cash determined by reference to the value of our common stock).
RSUs are accounted for using a fair-value-based method that utilizes the closing price of Zoetis common stock on the date of grant. Zoetis RSUs granted prior to 2023 generally vest after three years of continuous service from the grant date while RSUs granted in and after 2023 are subject to graded vesting over three years. These values are amortized on a straight-line basis over the vest terms.
The following table provides an analysis of RSU activity for the year ended December 31, 2024:
Weighted-Average
RSUsGrant Date Fair Value
Nonvested, December 31, 2023655,851 $173.49 
Granted256,149 194.75 
Vested(324,151)165.08 
Reinvested dividend equivalents6,288 182.21 
Forfeited(38,031)182.84 
Nonvested, December 31, 2024556,106 $187.61 
As of December 31, 2024, there was approximately $45 million of unrecognized compensation costs related to nonvested RSUs, which will be recognized over an expected remaining weighted-average period of eight months.
D. Deferred Stock Units (DSUs)
Deferred stock units, which were granted to non-employee compensated Directors in 2013 and 2014, represent the right to receive shares of our common stock at a future date. The DSU awards will be automatically settled and paid in shares within 60 days following the Director’s separation from service on the Board of Directors.
DSUs are accounted for using a fair-value-based method that utilizes the closing price of Zoetis common stock on the date of grant. DSUs vested immediately as of the grant date and the values were expensed at the time of grant into Selling, general and administrative expenses.
For the years ended December 31, 2024 and 2023, there were no DSUs granted. As of December 31, 2024 and 2023, there were 66,318 and 65,654 DSUs outstanding, respectively, including dividend equivalents.
E. Performance-Vesting Restricted Stock Units (PSUs)
Performance-vesting restricted stock units, which are granted to eligible senior management, represent the right to receive a share of our common stock that is subject to a risk of forfeiture until the restrictions lapse, which include continued employment through the end of the vesting period and the attainment of performance goals. PSUs represent the right to receive shares of our common stock in the future (or cash determined by reference to the value of our common stock).
PSUs are accounted for using a Monte Carlo simulation model. The units underlying the PSUs will be earned and vested over a three-year performance period, based upon the total shareholder return of the company in comparison to the total shareholder return of the companies comprising the S&P 500 index at the start of the performance period, excluding companies that during the performance period are acquired or are no longer publicly traded (Relative TSR). The weighted-average fair value was estimated based on volatility assumptions of Zoetis common stock and an average of peer companies, which were 26.2% and 30.6%, respectively, in 2024, and 38.1% and 40.9%, respectively, in 2023. Depending on the company’s Relative TSR performance at the end of the performance period, the recipient may earn between 0% and 200% of the target number of
units. Vested units, including dividend equivalent units, are paid in shares of the company’s common stock. PSU values are amortized on a straight-line basis over the vesting term.
The following table provides an analysis of PSU activity for the year ended December 31, 2024:
Weighted-Average
PSUsGrant Date Fair Value
Nonvested, December 31, 2023251,780 $228.99 
Granted101,099 268.71 
Vested(82,688)213.05 
Reinvested dividend equivalents2,742 243.86 
Forfeited(16,366)248.41 
Nonvested, December 31, 2024256,567 $248.68 
Shares issued, December 31, 2024
78,230 $208.87 
As of December 31, 2024, there was approximately $27 million of unrecognized compensation costs related to nonvested PSUs, which will be recognized over an expected remaining weighted-average period of 1.2 years.
F. Other Equity-Based or Cash-Based Awards
Our Compensation Committee is authorized to grant awards in the form of other equity-based awards or other cash-based awards, as deemed to be consistent with the purposes of the Equity Plan.
v3.25.0.1
Stockholders' Equity
 12 Months Ended
Dec. 31, 2024
Equity, Attributable to Parent [Abstract]  
Stockholders' Equity
16. Stockholders' Equity
Zoetis is authorized to issue 6 billion shares of common stock and 1 billion shares of preferred stock.
In December 2021, our Board of Directors authorized a $3.5 billion multi-year share repurchase program. This program was completed as of December 31, 2024. In August 2024, our Board of Directors authorized a new multi-year share repurchase program of up to $6 billion of our outstanding common stock. As of December 31, 2024, there was $5.6 billion remaining under this authorization. Purchases of Zoetis shares may be made at the discretion of management, depending on market conditions and business needs.
Accumulated other comprehensive loss
Changes, net of tax, in accumulated other comprehensive loss, excluding noncontrolling interest, follow:
Currency Translation AdjustmentsBenefit PlansAccumulated Other
Cash Flow Net InvestmentOther CurrencyActuarialComprehensive
(MILLIONS OF DOLLARS)HedgesHedgesTranslation Adj(Losses)/GainsLoss
Balance, December 31, 2021$4 $5 $(756)$(17)$(764)
Other comprehensive gain/(loss), net of tax86 36 (188)13 

(53)
Balance, December 31, 202290 41 (944)(4)(817)
Other comprehensive (loss)/gain, net of tax(5)(23)— 6 (22)
Balance, December 31, 202385 18 (944)2 (839)
Other comprehensive gain/(loss), net of tax4 44 (147)(2)

(101)
Balance, December 31, 2024$89 $62 $(1,091)$— $(940)
v3.25.0.1
Earnings Per Share
 12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
Earnings per Share
17. Earnings per Share
The following table presents the calculation of basic and diluted earnings per share:
Year Ended December 31,
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)202420232022
Numerator
Net income before allocation to noncontrolling interests$2,496 $2,340 $2,111 
Less: net income/(loss) attributable to noncontrolling interests10 (4)(3)
Net income attributable to Zoetis Inc.$2,486 $2,344 $2,114 
Denominator
Weighted-average common shares outstanding454.200 461.172 468.891 
Common stock equivalents: stock options, RSUs, DSUs and PSUs0.648 1.097 1.494 
Weighted-average common and potential dilutive shares outstanding454.848 462.269 470.385 
Earnings per share attributable to Zoetis Inc. stockholders—basic$5.47 $5.08 $4.51 
Earnings per share attributable to Zoetis Inc. stockholders—diluted$5.47 $5.07 $4.49 
The number of stock options outstanding under the company's Equity Plan that were excluded from the computation of diluted earnings per share, as the effect would have been antidilutive, were not material for the years ended December 31, 2024, 2023 and 2022.
v3.25.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
18. Commitments and Contingencies
We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business. For a discussion of our tax contingencies, see Note 8. Tax Matters.
A. Legal Proceedings
Our non-tax contingencies include, among others, the following:
•    Product liability and other product-related litigation, which can include injury, consumer, off-label promotion, antitrust and breach of contract claims.
•    Commercial and other matters, which can include product-pricing claims and environmental claims and proceedings.
•    Patent litigation, which typically involves challenges to the coverage and/or validity of our patents or those of third parties on various products or processes.
•    Government investigations, which can involve regulation by national, state and local government agencies in the U.S. and in other countries.
Certain of these contingencies could result in losses, including damages, fines and/or civil penalties, and/or criminal charges, which could be substantial.
We believe that we have strong defenses in these types of matters, but litigation is inherently unpredictable and excessive verdicts do occur. We do not believe that any of these matters will have a material adverse effect on our financial position. However, we could incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations or cash flows in the period in which the amounts are paid.
We have accrued for losses that are both probable and reasonably estimable. Substantially all of these contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. Consequently, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but the assessment process relies on estimates and assumptions that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.
Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions.
The principal matters to which we are a party are discussed below. In determining whether a pending matter is significant for financial reporting and disclosure purposes, we consider both quantitative and qualitative factors in order to assess materiality, such as, among other things, the amount of damages and the nature of any other relief sought in the proceeding, if such damages and other relief are specified; our view of the merits of the claims and of the strength of our defenses; whether the action purports to be a class action and our view of the likelihood that a class will be certified by the court; the jurisdiction in which the proceeding is pending; any experience that we or, to our knowledge, other companies have had in similar proceedings; whether disclosure of the action would be important to a reader of our financial statements, including whether disclosure might change a reader’s judgment about our financial statements in light of all of the information about the company that is available to the reader; the potential impact of the proceeding on our reputation; and the extent of public interest in the matter. In addition, with respect to patent matters, we consider, among other things, the financial significance of the product protected by the patent.
Ulianopolis, Brazil
In February 2012, the Municipality of Ulianopolis (State of Para, Brazil) filed a complaint against Fort Dodge Saúde Animal Ltda. (FDSAL), a Zoetis entity, and five other large companies alleging that waste sent to a local waste incineration facility for destruction, but that was not ultimately destroyed as the facility lost its operating permit, caused environmental impacts requiring cleanup.
The Municipality is seeking recovery of cleanup costs purportedly related to FDSAL's share of all waste accumulated at the incineration facility awaiting destruction, and compensatory damages to be allocated among the six defendants. We believe we have strong arguments against the claim, including defense strategies against any claim of joint and several liability.
At the request of the Municipal prosecutor, in April 2012, the lawsuit was suspended for one year. Since that time, the prosecutor has initiated investigations into the Municipality's actions in the matter as well as the efforts undertaken by the six defendants to remove and dispose of their individual waste from the incineration facility. On October 3, 2014, the Municipal prosecutor announced that the investigation remained ongoing and outlined the terms of a proposed Term of Reference (a document that establishes the minimum elements to be addressed in the preparation of an Environmental Impact Assessment), under which the companies would be liable to withdraw the waste and remediate the area.
On March 5, 2015, we presented our response to the prosecutor’s proposed Term of Reference, arguing that the proposed terms were overly general in nature and expressing our interest in discussing alternatives to address the matter. The prosecutor agreed to consider our request to engage a technical consultant to conduct an environmental diagnostic of the contaminated area. On May 29, 2015, we, in conjunction with the other defendant companies, submitted a draft cooperation agreement to the prosecutor, which outlined the proposed terms and conditions for the engagement of a technical consultant to conduct the environmental diagnostic. On August 19, 2016, the parties and the prosecutor agreed to engage the services of a third-party consultant to conduct a limited environmental assessment of the site. The site assessment was conducted during June 2017, and a written report summarizing the results of the assessment was provided to the parties and the prosecutor in November 2017. The report noted that waste is still present on the site and that further (Phase II) environmental assessments are needed before a plan to manage that remaining waste can be prepared. On April 1, 2019, the defendants met with the Prosecutor to discuss the conclusions set forth in the written report. Following that discussion, on April 10, 2019, the Prosecutor issued a procedural order requesting that the defendants prepare and submit a technical proposal outlining the steps needed to conduct the additional Phase II environmental assessments. The defendants presented the technical proposal to the Prosecutor on October 21, 2019. On March 3, 2020, the Prosecutor notified the defendants that he submitted the proposal to the Ministry of the Environment for its review and consideration by the Prosecutor. On July 15, 2020, the Prosecutor recommended certain amendments to the proposal for the Phase II testing. On
September 28, 2020, the parties and the Prosecutor agreed to the final terms and conditions concerning the cooperation agreement with respect to the Phase II testing. Phase II testing began the week of October 14, 2024, and the consultant will provide a report upon completion of the testing.
Belgium Excess Profit Tax Regime
On February 14, 2019, the General Court of the European Union (General Court) annulled the January 11, 2016 decision of the European Commission (EC) that selective tax advantages granted by Belgium under its “excess profit” tax scheme constitute illegal state aid. As a result of the 2016 decision, the company recorded a net tax charge of approximately $35 million in the first half of 2016. After several appeals and judgements, on September 20, 2023, the General Court confirmed the decision of the EC that the Belgium excess profit tax scheme constitutes illegal state aid. We have filed an appeal of the General Court’s decision. The company has not reflected any potential benefits in its consolidated financial statements as a result of the 2019 annulment. We will continue to monitor the developments of the appeal and its ultimate resolution.
B. Guarantees and Indemnifications
In the ordinary course of business and in connection with the sale of assets and businesses, we indemnify our counterparties against certain liabilities that may arise in connection with the transaction or related to activities prior to the transaction. These indemnifications typically pertain to environmental, tax, employee and/or product-related matters and patent-infringement claims. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we would be required to reimburse the loss. These indemnifications are generally subject to threshold amounts, specified claim periods and other restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of December 31, 2024, recorded amounts for the estimated fair value of these indemnifications were not material.
C. Purchase Commitments
As of December 31, 2024, we have agreements totaling $512 million to purchase goods and services, as well as commitments for capital expenditures, that are enforceable and legally binding and include amounts relating to contract manufacturing, information technology services and site acquisitions deemed reasonably likely to occur. Payments for these obligations are expected to be approximately $210 million in 2025 and $302 million thereafter.
v3.25.0.1
Segment Information
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Information
19. Segment Information
A. Segment Information
We manage our operations through two geographic regions. Each operating segment has responsibility for its commercial activities. Within each of these operating segments, we offer a diversified product portfolio, including parasiticides, vaccines, dermatology, anti-infectives, pain and sedation, other pharmaceutical and animal health diagnostics, for both companion animal and livestock customers.
On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets, and, as a result, our major product categories no longer include the category of medicated feed additives. See Note 5. Acquisitions and Divestitures.
Operating Segments
Our operating segments are the U.S. and International. The chief operating decision maker (CODM), our Chief Executive Officer and Chief Financial Officer, uses the information provided to compare segment performance with segment resource requests and allocates human and capital resources based on segment’s actual results and expected future results.
Other Costs and Business Activities
Certain costs are not allocated to our operating segment results, such as costs associated with the following:
•    Other business activities, includes our CSS contract manufacturing results, our human health business, and expenses associated with our dedicated veterinary medicine research and development organization, research alliances, U.S. regulatory affairs and other operations focused on the development of our products. Other R&D-related costs associated with non-U.S. market and regulatory activities are generally included in the international commercial segment.
•    Corporate, includes enabling functions such as information technology, facilities, legal, finance, human resources, business development, certain diagnostic costs and communications, among others. These costs also include certain compensation costs, certain procurement costs and other miscellaneous operating expenses not charged to our operating segments, as well as interest income and expense.
•    Certain transactions and events such as (i) Purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment; (ii) Acquisition and divestiture-related activities, where we incur costs associated with acquiring and integrating newly acquired businesses, such as transaction costs and integration costs as well as divestiture-related costs; and (iii) Certain significant items, which comprise substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis, such as restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition, certain asset impairment charges, certain legal and commercial settlements and the impact of divestiture-related gains and losses.
•Other unallocated includes (i) certain overhead expenses associated with our global manufacturing operations not charged to our operating segments; (ii) certain costs associated with finance that specifically support our global manufacturing operations; (iii) certain supply chain and global logistics costs; and (iv) certain procurement costs.
Segment Assets
We manage our assets on a total company basis, not by operating segment. Therefore, our CODM does not regularly review any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Total assets were approximately $14.2 billion and $14.3 billion at December 31, 2024 and 2023, respectively.
Selected Statement of Income Information                                
Earnings
Depreciation and Amortization(a)
Year Ended December 31,Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022202420232022
U.S.
Revenue$5,074 $4,555 $4,313 
Cost of Sales936 900 803 
Gross Profit4,138 3,655 3,510 
    Gross Margin81.6 %80.2 %81.4 %
Operating expenses(b)
805 786 765 
Other (income)/deductions-net(3)6 (18)
U.S. Earnings3,336 2,863 2,763 $85 $80 $55 
International
Revenue(c)
4,102 3,911 3,681 
Cost of Sales1,312 1,234 1,083 
Gross Profit2,790 2,677 2,598 
    Gross Margin68.0 %68.4 %70.6 %
Operating expenses(b)
671 638 611 
Other (income)/deductions-net1 2 (3)
International Earnings2,118 2,037 1,990 96 92 86 
Total operating segments5,454 4,900 4,753 181 172 141 
Other business activities
(562)(496)(424)43 33 28 
Reconciling Items:
Corporate
(1,213)(1,042)(1,073)128 128 132 
Purchase accounting adjustments
(140)(159)(160)140 153 159 
Acquisition and divestiture-related costs
(18)(9)(5)— — — 
Certain significant items(d)
(79)33 (56)— — — 
Other unallocated
(309)(291)(379)5 5 5 
Total Earnings(e)
$3,133 $2,936 $2,656 $497 $491 $465 
(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)    Operating expenses primarily consisted of field selling, advertising and promotions, other marketing expenses, and freight and logistics costs.
(c) Revenue denominated in euros was $937 million in 2024, $853 million in 2023 and $774 million in 2022.
(d)    For 2024, certain significant items primarily consisted of employee termination costs related to organizational structure refinements, a net loss related to the sale
of our medicated feed additive product portfolio, certain water soluble products and related assets, as well as asset impairment charges related to our aquaculture business, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
For 2023, certain significant items primarily consisted of a gain on the sale of a majority interest in our pet insurance business of $101 million, partially offset by employee termination and exit costs related to organizational structure refinements of $43 million and certain asset impairment charges primarily related to our precision animal health and diagnostics businesses of $24 million.
For 2022, certain significant items primarily represents inventory and asset impairment charges related to customer relationships, developed technology rights and property, plant and equipment in our diagnostics, poultry, cattle and swine businesses and the consolidation of manufacturing sites in China of $47 million, as well as employee termination and exit costs associated with cost-reduction and productivity initiatives in certain international markets of $4 million.
(e)    Defined as income before provision for taxes on income.
B. Geographic Information
Property, plant and equipment, less accumulated depreciation, by geographic region follow:
As of December 31,
(MILLIONS OF DOLLARS)20242023
U.S.$2,249 $2,092 
International1,142 1,112 
Property, plant and equipment, less accumulated depreciation$3,391 $3,204 
v3.25.0.1
Schedule II - Valuation and Qualifying Accounts
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Schedule II - Valuation and Qualifying Accounts
Schedule II—Valuation and Qualifying Accounts
Balance,Balance,
Beginning ofEnd of
(MILLIONS OF DOLLARS)PeriodAdditionsDeductionsPeriod
Year Ended December 31, 2024
Allowance for doubtful accounts$18 $3 $(3)$18 
Year Ended December 31, 2023
Allowance for doubtful accounts$19 $— $(1)$18 
Year Ended December 31, 2022
Allowance for doubtful accounts$17 $4 $(2)$19 
v3.25.0.1
Pay vs Performance Disclosure - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Pay vs Performance Disclosure      
Net Income (Loss) Attributable to Parent $ 2,486 $ 2,344 $ 2,114
v3.25.0.1
Insider Trading Arrangements
 3 Months Ended
Dec. 31, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.25.0.1
Insider Trading Policies and Procedures
 12 Months Ended
Dec. 31, 2024
Insider Trading Policies and Procedures [Line Items]  
Insider Trading Policies and Procedures Adopted true
v3.25.0.1
Cybersecurity Risk Management and Strategy Disclosure
 12 Months Ended
Dec. 31, 2024
Cybersecurity Risk Management, Strategy, and Governance [Line Items]  
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block]
As a global leader in animal health, we are reliant on complex information systems and digital solutions that make us inherently vulnerable to malicious cyber intrusion and attack. In addition, we have expanded our data and digital capabilities including in our diagnostics portfolio, and as a result, there could be an increased likelihood of a cyberattack or breach of security that could negatively impact us or our customers. Despite the presence of these risks, to date, the identified risks of cybersecurity threats (including as a result of any previous cybersecurity incidents) have not materially affected, and are not reasonably likely to materially affect, us or our business strategy, results of operations, or financial condition. For a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see our risk factors under Part 1. Item 1A. Risk Factors in this Annual Report on Form 10-K.
Cybersecurity Program
As part of our risk management processes, we have an enterprise-wide cybersecurity program aligned to the NIST Cybersecurity Framework (CSF). Our program is a risk-based program designed to protect our information systems through multiple defenses and layers of security, commonly referred to as a “Defense in Depth” approach. Key elements of our program include:
Independent Third-Party Assessments
We engage an independent third party to conduct comprehensive assessments of our cybersecurity program approximately every 18 months. This independent third-party assessment includes an evaluation of our cybersecurity controls based on the CSF.
Training
We have an information security training program that includes: monthly awareness articles, a phishing training program (with reports reviewed by the Executive Team), and required and optional training modules in our Learning Management System.
Incident Response Procedure
We have a 24/7 managed Security Operations Center (SOC) for escalation of any critical events, including cybersecurity incidents. In the event of an incident, we use an Incident Response procedure leveraging NIST Standard 800-61 standards that we have customized for Zoetis. Additionally, we have in place disaster recovery and business continuity practices designed to provide for continuous business operations for our customers in the event of a cybersecurity incident. While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured.
Third Party Onboarding
We depend on third parties and applications on virtualized (cloud) infrastructure to operate and support our information systems and have a third-party risk management program and assessment process for onboarding third parties.
Cybersecurity Risk Management Processes Integrated [Flag] true
Cybersecurity Risk Management Processes Integrated [Text Block]
As part of our risk management processes, we have an enterprise-wide cybersecurity program aligned to the NIST Cybersecurity Framework (CSF). Our program is a risk-based program designed to protect our information systems through multiple defenses and layers of security, commonly referred to as a “Defense in Depth” approach. Key elements of our program include:
Independent Third-Party Assessments
We engage an independent third party to conduct comprehensive assessments of our cybersecurity program approximately every 18 months. This independent third-party assessment includes an evaluation of our cybersecurity controls based on the CSF.
Training
We have an information security training program that includes: monthly awareness articles, a phishing training program (with reports reviewed by the Executive Team), and required and optional training modules in our Learning Management System.
Incident Response Procedure
We have a 24/7 managed Security Operations Center (SOC) for escalation of any critical events, including cybersecurity incidents. In the event of an incident, we use an Incident Response procedure leveraging NIST Standard 800-61 standards that we have customized for Zoetis. Additionally, we have in place disaster recovery and business continuity practices designed to provide for continuous business operations for our customers in the event of a cybersecurity incident. While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured.
Third Party Onboarding
We depend on third parties and applications on virtualized (cloud) infrastructure to operate and support our information systems and have a third-party risk management program and assessment process for onboarding third parties.
Cybersecurity Risk Management Third Party Engaged [Flag] true
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] true
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] false
Cybersecurity Risk Board of Directors Oversight [Text Block]
Management’s Role in Risk Oversight
Our information security team includes our Executive Vice President, Chief Digital & Technology Officer and our Head of Technology Risk, Compliance and Chief Information Security Officer. Our Executive Vice President, Chief Digital and Technology Officer has over 20 years of information technology experience. Prior to Zoetis, he was the VP, Information Technology at Biogen, overseeing all aspects of Infrastructure, IT Operations, and Enterprise Architecture globally and held various corporate leadership roles at Eli Lilly and Company, including Head of IT Infrastructure and Enabling Functions. He holds a bachelor's degree in information systems and a master of business administration degree. Our Head of Technology Risk, Compliance and Chief Information Security Officer has 37 years of experience in Life Sciences Information Technology, including over 20 years of experience in information security and holds bachelor’s degrees in computer science and biology.
We have established a cybersecurity governance program with clear roles for the executive management team as well as oversight by the Board of Directors and the Audit Committee. The Zoetis information security team provides regular cyber threat intelligence briefings to management and provides updates to our senior executives on the status of the Company’s security measures and our efforts to identify and mitigate risks from cybersecurity threats. The Zoetis information security team also works closely with the Zoetis Legal team, including the Chief Privacy Officer, to further enhance incident response procedures. For example, we have a corporate crisis management plan in place to govern our response to corporate crises, which could include cyber incidents, and we conduct periodic simulated programs to ensure readiness. This plan also includes a standard framework for categorization of incidents based on risk level and severity, and requires escalation to Zoetis senior management and/or the Audit Committee of the Board of Directors if certain severity levels are met.
Role of the Board of Directors and Committees
The Board of Directors maintains an active role in the oversight of material risks. The Board of Directors utilizes its various Committees to oversee certain key risks, and has delegated responsibility to the Audit Committee for oversight of the Company’s enterprise risk management process and information security risk management program. Management, with oversight from the Zoetis Board of Directors, is responsible for the Company’s assessment and management of exposure to risk. The Audit Committee of the Board of Directors is also responsible for oversight of compliance with disclosure requirements under applicable laws and regulations, and would be consulted prior to the disclosure of any material cybersecurity incident.
The Zoetis information security team regularly provides an information security dashboard to the Audit Committee, covering the most active and relevant threats to Zoetis, relevant trends, and any notable events. The Zoetis information security team regularly presents updates to the Audit Committee with respect to the information security program, including the status of our security measures and our efforts to identify and mitigate information security risks. The Audit Committee also regularly reviews certain data privacy and cybersecurity metrics as part of the compliance update presented to the Audit Committee.
In addition, the Chief Information Security Officer presents updates at least annually to the Board of Directors with respect to the information security program, including the results of our independent, third-party assessment. The Board of Directors also participates in annual table-top exercises involving simulated data security incidents and the Company’s responses to those incidents.
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] The Board of Directors utilizes its various Committees to oversee certain key risks, and has delegated responsibility to the Audit Committee for oversight of the Company’s enterprise risk management process and information security risk management program. Management, with oversight from the Zoetis Board of Directors, is responsible for the Company’s assessment and management of exposure to risk. The Audit Committee of the Board of Directors is also responsible for oversight of compliance with disclosure requirements under applicable laws and regulations, and would be consulted prior to the disclosure of any material cybersecurity incident.
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block] The Zoetis information security team regularly presents updates to the Audit Committee with respect to the information security program, including the status of our security measures and our efforts to identify and mitigate information security risks. The Audit Committee also regularly reviews certain data privacy and cybersecurity metrics as part of the compliance update presented to the Audit Committee.
In addition, the Chief Information Security Officer presents updates at least annually to the Board of Directors with respect to the information security program, including the results of our independent, third-party assessment. The Board of Directors also participates in annual table-top exercises involving simulated data security incidents and the Company’s responses to those incidents.
Cybersecurity Risk Role of Management [Text Block]
Our information security team includes our Executive Vice President, Chief Digital & Technology Officer and our Head of Technology Risk, Compliance and Chief Information Security Officer. Our Executive Vice President, Chief Digital and Technology Officer has over 20 years of information technology experience. Prior to Zoetis, he was the VP, Information Technology at Biogen, overseeing all aspects of Infrastructure, IT Operations, and Enterprise Architecture globally and held various corporate leadership roles at Eli Lilly and Company, including Head of IT Infrastructure and Enabling Functions. He holds a bachelor's degree in information systems and a master of business administration degree. Our Head of Technology Risk, Compliance and Chief Information Security Officer has 37 years of experience in Life Sciences Information Technology, including over 20 years of experience in information security and holds bachelor’s degrees in computer science and biology.
We have established a cybersecurity governance program with clear roles for the executive management team as well as oversight by the Board of Directors and the Audit Committee. The Zoetis information security team provides regular cyber threat intelligence briefings to management and provides updates to our senior executives on the status of the Company’s security measures and our efforts to identify and mitigate risks from cybersecurity threats. The Zoetis information security team also works closely with the Zoetis Legal team, including the Chief Privacy Officer, to further enhance incident response procedures. For example, we have a corporate crisis management plan in place to govern our response to corporate crises, which could include cyber incidents, and we conduct periodic simulated programs to ensure readiness. This plan also includes a standard framework for categorization of incidents based on risk level and severity, and requires escalation to Zoetis senior management and/or the Audit Committee of the Board of Directors if certain severity levels are met.
Cybersecurity Risk Management Positions or Committees Responsible [Flag] true
Cybersecurity Risk Management Positions or Committees Responsible [Text Block] Our information security team includes our Executive Vice President, Chief Digital & Technology Officer and our Head of Technology Risk, Compliance and Chief Information Security Officer.We have established a cybersecurity governance program with clear roles for the executive management team as well as oversight by the Board of Directors and the Audit Committee. The Zoetis information security team provides regular cyber threat intelligence briefings to management and provides updates to our senior executives on the status of the Company’s security measures and our efforts to identify and mitigate risks from cybersecurity threats. The Zoetis information security team also works closely with the Zoetis Legal team, including the Chief Privacy Officer, to further enhance incident response procedures.
Cybersecurity Risk Management Expertise of Management Responsible [Text Block] Our Executive Vice President, Chief Digital and Technology Officer has over 20 years of information technology experience. Prior to Zoetis, he was the VP, Information Technology at Biogen, overseeing all aspects of Infrastructure, IT Operations, and Enterprise Architecture globally and held various corporate leadership roles at Eli Lilly and Company, including Head of IT Infrastructure and Enabling Functions. He holds a bachelor's degree in information systems and a master of business administration degree. Our Head of Technology Risk, Compliance and Chief Information Security Officer has 37 years of experience in Life Sciences Information Technology, including over 20 years of experience in information security and holds bachelor’s degrees in computer science and biology.
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] This plan also includes a standard framework for categorization of incidents based on risk level and severity, and requires escalation to Zoetis senior management and/or the Audit Committee of the Board of Directors if certain severity levels are met.
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] true
v3.25.0.1
Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Recently Adopted Accounting Standards and Recently Issued Accounting Standards
Recently Adopted Accounting Standards
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new guidance requires expanded annual and interim disclosures for significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. We adopted this guidance as of January 1, 2024, which resulted in additional disclosures in the notes to our consolidated financial statements that we applied retrospectively to all prior periods presented. See Note 19. Segment Information.
Recently Issued Accounting Standards
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax disclosures. The new guidance requires standardized categories for the effective tax rate reconciliation, disaggregation of income taxes paid and other income tax-related disclosures. This update is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact that the new guidance will have on our notes to the consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires a public business entity to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our notes to the consolidated financial statements.
Estimates and Assumptions
Estimates and Assumptions
In preparing the consolidated financial statements, we use certain estimates and assumptions that affect reported amounts and disclosures, including amounts recorded in connection with acquisitions. These estimates and underlying assumptions can impact all elements of our consolidated financial statements. For example, in the Consolidated Statements of Income, estimates are used when accounting for deductions from revenue (such as rebates, sales allowances, product returns and discounts), determining cost of sales, allocating cost in the form of depreciation and amortization, and estimating restructuring charges and the impact of contingencies. On the Consolidated Balance Sheets, estimates are used in determining the valuation and recoverability of assets, such as accounts receivables, inventories, fixed assets, goodwill and other identifiable intangible assets, and estimates are used in determining the reported amounts of liabilities, such as taxes payable, uncertain tax positions, benefit obligations, the impact of contingencies, deductions from revenue and restructuring reserves, all of which also impact the Consolidated Statements of Income.
Our estimates are often based on complex judgments, probabilities and assumptions that we believe to be reasonable but that can be inherently uncertain and unpredictable. If our estimates and assumptions are not representative of actual outcomes, our results could be materially impacted.
As future events and their effects cannot be determined with precision, our estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. We are subject to risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in competition, litigation, legislation and regulations. We regularly evaluate our estimates and assumptions using historical experience and expectations about the future. We adjust our estimates and
assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in our consolidated financial statements on a prospective basis unless they are required to be treated retrospectively under relevant accounting standards. It is possible that others, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.
Acquisitions
Acquisitions
Our consolidated financial statements include the operations of acquired businesses from the date of acquisition. We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of acquired in-process research and development (IPR&D) be recorded on the balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When we acquire net assets that do not constitute a business as defined in U.S. GAAP, no goodwill is recognized.
Amounts recorded for acquisitions can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Lessee, Leases [Policy Text Block]
Leases
We determine if a contract contains a lease at inception. Leases are recorded as a right of use asset, as of the lease commencement date, in an amount equal to the present value of future payments over the lease term. A corresponding lease liability is also recorded. We have elected not to recognize right of use assets and lease liabilities for short-term leases of vehicles and equipment with a lease term of twelve months or less.
Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise. The present value of future payments is discounted using the rate implicit in the lease, when available. When the implicit rate is not available, as is frequently the case with our lease portfolio, the present value is calculated using our incremental borrowing rate, which is determined on the commencement date. The incremental borrowing rate represents the rate of interest that we would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. As we do not borrow on a collateralized basis, our non-collateralized borrowing rate is used as an input in deriving the incremental borrowing rate.
Our lease portfolio primarily consists of operating leases, in which fixed lease payments are recognized on a straight-line basis over the lease term. Operating lease assets are recorded within Operating lease right of use assets with the corresponding operating lease liabilities recorded within Other current liabilities and Operating lease liabilities on the Consolidated Balance Sheets. Finance lease assets are recorded within Other noncurrent assets with the corresponding finance lease liabilities recorded within Other current liabilities and Other noncurrent liabilities on the Consolidated Balance Sheets. Variable payments are recognized in the period incurred. Variable lease payments include real estate taxes and charges for other non-lease services due to lessors that are not dependent on an index or rate and utilization based charges associated with fleet vehicles.
Our real estate and fleet lease contracts may include fixed consideration attributable to both lease and non-lease components, including non-lease services provided by the vendor, which are accounted for as a single fixed minimum payment. For leases of certain classes of machinery and equipment, contract consideration is allocated to lease and non-lease components on the basis of relative standalone price.
Foreign Currency Translation
Foreign Currency Translation
For most of our international operations, local currencies have been determined to be the functional currencies. We translate functional currency assets and liabilities to their U.S. dollar equivalents at exchange rates in effect at the balance sheet date and we translate functional currency income and expense amounts to their U.S. dollar equivalents at average exchange rates for the period. The U.S. dollar effects that arise from changing translation rates are recorded in Other comprehensive income/(loss), net of tax. The effects of converting non-functional currency assets and liabilities into the functional currency are recorded in Other (income)/deductions––net. For operations in highly inflationary economies, we translate monetary items at rates in effect at the balance sheet date, with translation adjustments recorded in Other (income)/deductions––net, and we translate non-monetary items at historical rates.
Revenue, Deductions form Revenue and the Allowance for Doubtful Accounts
Revenue, Deductions from Revenue and the Allowance for Doubtful Accounts
We recognize revenue from product sales when control of the goods has transferred to the customer, which is typically once the goods have shipped and the customer has assumed title. Revenue reflects the total consideration to which we expect to be entitled (i.e., the transaction price), in exchange for products sold, after considering various types of variable consideration including rebates, sales allowances, product returns and discounts.
Variable consideration is estimated and recorded at the time that related revenue is recognized. Our estimates reflect the amount by which we expect variable consideration to impact revenue recognized and are generally based on contractual terms or historical experience, adjusted as necessary to reflect our expectations about the future. Our customer payment terms generally range from 30 to 90 days.
Estimates of variable consideration utilize a complex series of judgments and assumptions to determine the amount by which we expect revenue to be reduced, for example;
•for sales returns, we perform calculations in each market that incorporate the following, as appropriate: local returns policies and practices; historic returns as a percentage of revenue; estimated shelf life by product; an estimate of the amount of time between shipment and return or lag time; and any other factors that could impact the estimate of future returns, product recalls, discontinuation of products or a changing competitive environment; and
•for revenue incentives, we use our historical experience with similar incentives programs to estimate the impact of such programs on revenue for the current period.
Although the amounts recorded for these deductions from revenue are dependent on estimates and assumptions, historically our adjustments to actual results have not been material. The sensitivity of our estimates can vary by program, type of customer and geographic location.
Accruals for deductions from revenue are recorded as either a reduction in Accounts receivable or within Accrued expenses, depending on the nature of the contract and method of expected payment. Amounts recorded as a reduction in Accounts receivable as of December 31, 2024 and 2023 are
approximately $257 million and $301 million, respectively. As of December 31, 2024, and 2023, accruals for deductions from revenue included in Accrued expenses are approximately $344 million and $323 million, respectively.
A deferral of revenue may be required in the event that we have not satisfied all customer obligations for which we have been compensated. The transaction price is allocated to the individual performance obligations on the basis of relative stand-alone selling price, which is typically based on actual sales prices. Revenue associated with unsatisfied performance obligations are contract liabilities is recorded within Other current liabilities and Other noncurrent liabilities. Recognition of revenue occurs once control of the underlying products has transferred to the customer. Contract liabilities reflected within Other current liabilities as of December 31, 2023 and subsequently recognized as revenue during 2024 were approximately $4 million. Contract liabilities as of December 31, 2024 were approximately $18 million.
We do not disclose the transaction price allocated to unsatisfied performance obligations related to contracts with an original expected duration of one year or less, or for contracts for which we recognize revenue in line with our right to invoice the customer. Estimated future revenue expected to be generated from long-term contracts with unsatisfied performance obligations as of December 31, 2024 is not material.
Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenue. Shipping and handling costs incurred after control of the purchased product has transferred to the customer are accounted for as a fulfillment cost, within Selling, general and administrative expenses.
We also record estimates for bad debts. We periodically assess the adequacy of the allowance for doubtful accounts by evaluating the collectability of outstanding receivables based on factors such as past due history, historical and expected collection patterns, the financial condition of our customers, the robust nature of our credit and collection practices and the economic environment.
Amounts recorded for sales deductions and bad debts can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Cost of Sales and Inventories
Cost of Sales and Inventories
Inventories are carried at the lower of cost or net realizable value. The cost of finished goods, work-in-process and raw materials is determined using average actual cost. We regularly review our inventories for impairment and adjustments are recorded when necessary.
Selling, General and Administrative Expenses
Selling, General and Administrative Expenses
Selling, general and administrative costs are expensed as incurred. Among other things, these expenses include the internal and external costs of marketing, advertising, and shipping and handling as well as certain costs related to business technology, facilities, legal, finance, human resources, business development, public affairs and procurement, among others.
Advertising expenses relating to production costs are expensed as incurred, and the costs of space in publications are expensed when the related advertising occurs. Advertising and promotion expenses totaled approximately $302 million in 2024, $281 million in 2023 and $287 million in 2022.
Shipping and handling costs totaled approximately $107 million in 2024, $101 million in 2023 and $82 million in 2022.
Research and Development Expenses
Research and Development Expenses
Research and development (R&D) costs are expensed as incurred. Research is the effort associated with the discovery of new knowledge that will be useful in developing a new product or in significantly improving an existing product. Development is the implementation of the research findings. Before a compound receives regulatory approval, we record upfront and milestone payments made by us to third parties under licensing arrangements as expense. Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved. Once a compound receives regulatory approval in a major market, we record any milestone payments in Identifiable intangible assets, less accumulated amortization and, unless the assets are determined to have an indefinite life, we amortize them on a straight-line basis over the remaining agreement term or the expected product life cycle, whichever is shorter.
Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets
Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets
Long-lived assets include:
•    Goodwill—goodwill represents the excess of the consideration transferred for an acquired business over the assigned values of its net assets. Goodwill is not amortized.
•    Identifiable intangible assets, less accumulated amortization—these acquired assets are recorded at our cost. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. Identifiable intangible assets with indefinite lives that are associated with marketed products are not amortized until a useful life can be determined. Identifiable intangible assets associated with IPR&D projects are not amortized until regulatory approval is obtained. The useful life of an amortizing asset generally is determined by identifying the period in which substantially all of the cash flows are expected to be generated.
•    Property, plant and equipment, less accumulated depreciation––these assets are recorded at our cost and are increased by the cost of any significant improvements after purchase. Property, plant and equipment assets, other than land and construction-in-progress, are depreciated on a straight-line basis over the estimated useful life of the individual assets. Depreciation begins when the asset is ready for its intended use. For tax purposes, accelerated depreciation methods are used as allowed by tax laws.
Amortization expense related to finite-lived identifiable intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property are included in Amortization of intangible assets as they benefit multiple business functions. Amortization expense related to intangible assets that are associated with a single function and depreciation of property, plant and equipment are included in Cost of sales, Selling, general and administrative expenses and Research and development expenses, as appropriate.
We review all of our long-lived assets for impairment indicators throughout the year and we perform detailed testing whenever impairment indicators are present. In addition, we perform impairment testing for goodwill and indefinite-lived assets at least annually. When necessary, we record charges for impairments. Specifically:
•    For finite-lived identifiable intangible assets, such as developed technology rights, and for other long-lived assets, such as property, plant and equipment, whenever impairment indicators are present, we calculate the undiscounted value of the projected cash flows associated with the asset, or asset group, and compare this estimated amount to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate.
•    For indefinite-lived identifiable intangible assets, such as brands and IPR&D assets, we test for impairment at least annually, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If we conclude it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the indefinite-lived intangible asset with its carrying value is performed. If the fair value is less than the carrying amount, an impairment loss is recognized. We record an impairment loss, if any, for the excess of book value over fair value. In addition, in all cases of an impairment review other than for IPR&D assets, we re-evaluate whether continuing to characterize the asset as indefinite-lived is appropriate.
•    For goodwill, we test for impairment on at least an annual basis, or more frequently if necessary, either by assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or by performing a periodic quantitative assessment. If we choose to perform a qualitative analysis and conclude it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative fair value test is performed. We determine the implied fair value of goodwill by subtracting the fair value of all the identifiable net assets other than goodwill from the fair value of the reporting unit and record an impairment loss for the excess, if any, of book value of goodwill over the implied fair value. In 2024 we performed a periodic quantitative impairment assessment as of September 30, 2024, which did not result in the impairment of goodwill associated with any of our reporting units. In 2023, we performed a qualitative impairment assessment as of September 30, 2023, which did not result in the impairment of goodwill associated with any of our reporting units.
Impairment reviews can involve a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Software Capitalization and Depreciation
Software Capitalization and Depreciation
We capitalize certain costs incurred in connection with obtaining or developing internal-use software, including payroll and payroll-related costs for employees who are directly associated with the internal-use software project, external direct costs of materials and services and interest costs while developing the software. Capitalized software costs are included in Property, plant and equipment and are amortized using the straight-line method over the estimated useful life of 5 to 10 years. Capitalization of such costs ceases when the project is substantially complete and ready for its intended purpose. Costs incurred during the preliminary project and post-implementation stages, as well as software maintenance and training costs, are expensed in the period in which they are incurred. The company capitalized $18 million and $35 million of internal-use software for the years ended December 31, 2024 and 2023, respectively. Depreciation expense for capitalized software was $61 million in 2024, $75 million in 2023 and $69 million in 2022.
In addition, we capitalize qualifying implementation costs under cloud computing arrangements (“CCA”). The capitalized CCA implementation costs are allocated between Other current assets and Other noncurrent assets on the accompanying Consolidated Balance Sheets based on the expected period that amortization will be recognized. CCA implementation costs are amortized using the straight-line method over the expected term of the related service contract.
Restructuring Charges and Certain Acquisition-Related Costs
Restructuring Charges and Certain Acquisition and Divestiture-Related Costs
We may incur restructuring charges in connection with acquisitions when we implement plans to restructure and integrate the acquired operations or in connection with cost-reduction and productivity initiatives. Included in Restructuring charges and certain acquisition and divestiture-related costs are all restructuring charges and certain costs associated with acquiring and integrating an acquired business and divesting and disintegrating divested businesses. Transaction costs and integration costs are expensed as incurred. Termination costs are a significant component of restructuring charges and are generally recorded when the actions are probable and estimable.
Amounts recorded for restructuring charges and other associated costs can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Earnings per Share
Earnings per Share
Basic earnings per share is computed by dividing net income attributable to Zoetis by the weighted-average number of common shares outstanding during the period. Diluted earnings per share adjusts the weighted-average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options, restricted stock units, and performance-vesting restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method.
Cash Equivalents
Cash Equivalents
Cash equivalents include items almost as liquid as cash, such as money market funds, certificates of deposit and time deposits with maturity periods of three months or less when purchased.
Fair Value
Fair Value
Certain assets and liabilities are required to be measured at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, we use fair value extensively in the initial recognition of net assets acquired in a business combination. Fair value is estimated using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer.
When estimating fair value, depending on the nature and complexity of the asset or liability, we may use one or all of the following approaches:
•    Income approach, which is based on the present value of a future stream of net cash flows.
•    Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.
•    Cost approach, which is based on the cost to acquire or construct comparable assets less an allowance for functional and/or economic obsolescence.
These fair value methodologies depend on the following types of inputs:
•    Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).
•    Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable (Level 2 inputs).
•    Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).
A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Accounts Receivable
Accounts Receivable
The recorded amounts of accounts receivable approximate fair value because of their relatively short-term nature. As of December 31, 2024 and 2023, Accounts receivable, less allowance for doubtful accounts, of $1,316 million and $1,304 million, respectively, includes approximately $79 million and $58 million, respectively, of other receivables, such as trade notes receivable and royalty receivables, among others.
Deferred Tax Assets and Liabilities and Income Tax Contingencies ferred Tax Assets and Liabilities and Income Tax Contingencies
Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates and laws. We provide a valuation allowance when we believe that our deferred tax assets are not recoverable based on an assessment of estimated future taxable income that incorporates ongoing, prudent and feasible tax planning strategies.
We account for income tax contingencies using a benefit recognition model. If we consider that a tax position is more likely than not to be sustained upon audit, based solely on the technical merits of the position, we recognize the benefit. We measure the benefit by determining the amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. Under the benefit recognition model, if the initial assessment fails to result in the recognition of a tax benefit, we regularly monitor our position and subsequently recognize the tax benefit: (i) if there are changes in tax law, analogous case law or there is new information that sufficiently raise the likelihood of prevailing on the technical merits of the position to more likely than not; (ii) if the statute of limitations expires; or (iii) if there is a completion of an audit resulting in a favorable settlement of that tax year with the appropriate agency. We regularly re-evaluate our tax positions based on the results of audits of federal, state and foreign income tax filings, statute of limitations expirations, changes in tax law or receipt of new information that would either increase or decrease the technical merits of a position relative to the “more-likely-than-not” standard. Liabilities associated with uncertain tax positions are classified as current only when we expect to pay cash within the next 12 months. Interest and penalties, if any, are recorded in Provision for taxes on income and are classified on our Consolidated Balance Sheets with the related tax liability.
Amounts recorded for valuation allowances and income tax contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
B
Benefit Plans
Benefit Plans
All dedicated benefit plans are pension plans. For our dedicated benefit plans, we recognize the overfunded or underfunded status of defined benefit plans as an asset or liability on the Consolidated Balance Sheets and the obligations generally are measured at the actuarial present value of all benefits attributable to employee service rendered, as provided by the applicable benefit formula. Pension obligations may include assumptions such as long-term rate of return on plan assets, expected employee turnover, participant mortality, and future compensation levels. Plan assets are measured at fair value. Net periodic benefit costs are recognized, as required, into Cost of sales, Selling, general and administrative expenses and Research and development expenses, as appropriate.
Amounts recorded for benefit plans can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Asset Retirement Obligations
Asset Retirement Obligations
We record accruals for the legal obligations associated with the retirement of tangible long-lived assets, including obligations under the doctrine of promissory estoppel and those that are conditioned upon the occurrence of future events. These obligations generally result from the acquisition, construction, development and/or normal operation of long-lived assets. We recognize the fair value of these obligations in the period in which they are incurred by increasing the carrying amount of the related asset. Over time, we recognize expense for the accretion of the liability and for the amortization of the asset.
As of December 31, 2024 and 2023, accruals for asset retirement obligations are $23 million and $28 million, respectively, and are included in Other noncurrent liabilities.
Amounts recorded for asset retirement obligations can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Legal and Environmental Contingencies
Legal and Environmental Contingencies
We are subject to numerous contingencies arising in the ordinary course of business, such as product liability and other product-related litigation, commercial litigation, patent litigation, environmental claims and proceedings, government investigations and guarantees and indemnifications. We record accruals for these contingencies to the extent that we conclude that a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, we accrue that amount. Alternatively, when no amount within a range of loss appears to be a better estimate than any other amount, we accrue the lowest amount in the range. We record anticipated recoveries under existing insurance contracts when recovery is assured.
Amounts recorded for contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Our non-tax contingencies include, among others, the following:
•    Product liability and other product-related litigation, which can include injury, consumer, off-label promotion, antitrust and breach of contract claims.
•    Commercial and other matters, which can include product-pricing claims and environmental claims and proceedings.
•    Patent litigation, which typically involves challenges to the coverage and/or validity of our patents or those of third parties on various products or processes.
•    Government investigations, which can involve regulation by national, state and local government agencies in the U.S. and in other countries.
Certain of these contingencies could result in losses, including damages, fines and/or civil penalties, and/or criminal charges, which could be substantial.
We believe that we have strong defenses in these types of matters, but litigation is inherently unpredictable and excessive verdicts do occur. We do not believe that any of these matters will have a material adverse effect on our financial position. However, we could incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations or cash flows in the period in which the amounts are paid.
We have accrued for losses that are both probable and reasonably estimable. Substantially all of these contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. Consequently, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but the assessment process relies on estimates and assumptions that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.
Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions.
The principal matters to which we are a party are discussed below. In determining whether a pending matter is significant for financial reporting and disclosure purposes, we consider both quantitative and qualitative factors in order to assess materiality, such as, among other things, the amount of damages and the nature of any other relief sought in the proceeding, if such damages and other relief are specified; our view of the merits of the claims and of the strength of our defenses; whether the action purports to be a class action and our view of the likelihood that a class will be certified by the court; the jurisdiction in which the proceeding is pending; any experience that we or, to our knowledge, other companies have had in similar proceedings; whether disclosure of the action would be important to a reader of our financial statements, including whether disclosure might change a reader’s judgment about our financial statements in light of all of the information about the company that is available to the reader; the potential impact of the proceeding on our reputation; and the extent of public interest in the matter. In addition, with respect to patent matters, we consider, among other things, the financial significance of the product protected by the patent.
Share-Based Payments
Share-Based Payments
Our compensation programs can include share-based payment plans. All grants under share-based payment programs are accounted for at fair value and such amounts generally are amortized on a straight-line basis over the vesting term to Cost of sales, Selling, general and administrative expenses, and Research and development expenses, as appropriate. We include the impact of estimated forfeitures when determining share-based compensation expense.
Amounts recorded for share-based compensation can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Foreign Exchange and Interest Rate Risk A significant portion of our revenue, earnings and net investment in foreign affiliates is exposed to changes in foreign exchange rates. We seek to manage our foreign exchange risk, in part, through operational means, including managing same-currency revenue in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. Depending on market conditions, foreign exchange risk is also managed through the use of various derivative financial instruments. These derivative financial instruments serve to manage the exposure of our net investment in certain foreign operations to changes in foreign exchange rates and protect net income against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.For foreign currency forward-exchange contracts not designated as hedging instruments, we recognize the gains and losses that are used to offset the same foreign currency assets or liabilities immediately into earnings along with the earnings impact of the items they generally offset. These contracts essentially take the opposite currency position of that reflected in the month-end balance sheet to counterbalance the effect of any currency movement. The vast majority of the foreign currency forward-exchange contracts mature within 60 days and all mature within three years.
Guarantees and Indemnifications
In the ordinary course of business and in connection with the sale of assets and businesses, we indemnify our counterparties against certain liabilities that may arise in connection with the transaction or related to activities prior to the transaction. These indemnifications typically pertain to environmental, tax, employee and/or product-related matters and patent-infringement claims. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we would be required to reimburse the loss. These indemnifications are generally subject to threshold amounts, specified claim periods and other restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of December 31, 2024, recorded amounts for the estimated fair value of these indemnifications were not material.
Tax Contingencies
We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statute of limitations expire. We treat these events as discrete items in the period of resolution.
For a description of our accounting policies associated with accounting for income tax contingencies, see Note 3. Significant Accounting Policies: Deferred Tax Assets and Liabilities and Income Tax Contingencies. For a description of the risks associated with estimates and assumptions, see Note 3. Significant Accounting Policies: Estimates and Assumptions.
v3.25.0.1
Revenue (Tables)
 12 Months Ended
Dec. 31, 2024
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue from External Customers by Geographic Areas
Revenue by geographic area
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
United States$5,074 $4,555 $4,313 
Australia319 323 289 
Brazil414 393 330 
Canada277 255 238 
Chile123 140 141 
China270 320 382 
France156 142 126 
Germany225 202 176 
Italy129 121 111 
Japan147 158 173 
Mexico169 162 136 
Spain130 122 118 
United Kingdom314 277 235 
Other developed markets564 512 468 
Other emerging markets865 784 758 
9,176 8,466 7,994 
Contract manufacturing & human health80 78 86 
Total Revenue$9,256 $8,544 $8,080 
Revenue from External Customers by Major Species
Revenue by major species
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
U.S.
Companion animal$4,054 $3,529 $3,341 
Livestock1,020 1,026 972 
5,074 4,555 4,313 
International
Companion animal2,224 2,047 1,862 
Livestock1,878 1,864 1,819 
4,102 3,911 3,681 
Total
Companion animal6,278 5,576 5,203 
Livestock2,898 2,890 2,791 
Contract manufacturing & human health80 78 86 
Total Revenue$9,256 $8,544 $8,080 
Revenue from External Customers by Species
Revenue by species
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Companion Animal:
Dogs and Cats$5,993 $5,291 $4,939 
Horses285 285 264 
6,278 5,576 5,203 
Livestock:
Cattle1,531 1,503 1,440 
Poultry527 524 476 
Swine516 543 565 
Fish242 220 212 
Sheep and other82 100 98 
2,898 2,890 2,791 
Contract manufacturing & human health80 78 86 
Total Revenue$9,256 $8,544 $8,080 
Schedule of Significant Product Revenues
Revenue by product category
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Parasiticides$2,153 $1,947 $1,860 
Vaccines1,827 1,771 1,718 
Dermatology1,655 1,427 1,329 
Anti-infectives1,100 1,057 1,081 
Pain and sedation851 602 420 
Other pharmaceuticals658 678 623 
Animal health diagnostics386 376 353 
Medicated feed additives293 354 360 
Other non-pharmaceuticals253 254 250 
9,176 8,466 7,994 
Contract manufacturing & human health80 78 86 
Total Revenue$9,256 $8,544 $8,080 
v3.25.0.1
Acquisitions and Divestitures (Tables)
 12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Schedule of Business Acquisitions, by Acquisition The table below presents the final fair values allocated to the assets and liabilities of Jurox as of the acquisition date:
(MILLIONS OF DOLLARS)Amounts
Cash and cash equivalents$20 
Accounts receivable8 
Inventories(a)
21 
Other current assets1 
Property, plant and equipment(b)
25 
Identifiable intangible assets(c)
135 
Other noncurrent assets7 
Accounts payable2 
Other current liabilities12 
Other noncurrent liabilities1 
Total net assets acquired202 
Goodwill(d)
38 
Total consideration$240 
(a)        Acquired inventory is comprised of finished goods, work in process and raw materials. The fair value of finished goods was determined based on net realizable value adjusted for the costs of the selling effort, a reasonable profit allowance for the selling effort, and estimated holding costs. The fair value of work in process was determined based on net realizable value adjusted for costs to complete the manufacturing process, costs of the selling effort, a reasonable profit allowance for the remaining manufacturing and selling effort, and an estimate of holding costs. The fair value of raw materials was determined to approximate book value.
(b)    Property, plant and equipment is comprised of buildings, machinery and equipment, land, construction in progress and furniture and fixtures. The fair value was primarily determined using a reproduction/replacement cost approach which measures the value of an asset by estimating the cost to acquire or construct comparable assets adjusted for age and condition of the asset.
(c)    Identifiable intangible assets consist of developed technology rights. The fair value of identifiable intangible assets was determined using the income approach, which includes a forecast of expected future cash flows. For additional information regarding identifiable intangible assets, see Note 13. Goodwill and Other Intangible Assets.
(d)        Goodwill represents the excess of consideration transferred over the fair values of the assets acquired and liabilities assumed. It is allocated to our International segment and is primarily attributable to cost and revenue synergies including market share capture, elimination of cost redundancies and gain of cost efficiencies, and intangible assets such as assembled workforce which are not separately recognizable. The primary strategic purpose of the acquisition was to enhance the company’s existing product portfolio.
Disposal Groups, Including Discontinued Operations
As of the disposal date, the carrying amounts of the following major assets and liabilities were derecognized from our consolidated balance sheets:
October 31,
(MILLIONS OF DOLLARS)2024
Assets
Inventories$154 
Other current assets3 
Property, plant and equipment, less accumulated depreciation108 
Operating lease right-of-use assets2 
Goodwill(a)
12 
Identifiable intangible assets, less accumulated amortization26 
Noncurrent deferred tax assets2 
Other noncurrent assets9 
Total Assets$316 
Liabilities
Accounts payable$3 
Accrued expenses3 
Accrued compensation and related items2 
Other noncurrent liabilities8 
Total Liabilities$16 
(a) Net of $12 million loss recognized during 2024.
v3.25.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Tables)
 12 Months Ended
Dec. 31, 2024
Restructuring and Related Activities [Abstract]  
Schedule of Restructuring and Related Costs
The components of costs incurred in connection with restructuring initiatives, acquisitions, divestitures and cost-reduction/productivity initiatives are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Restructuring charges and certain acquisition and divestiture-related costs:
Acquisition-related costs(a)
$1 $7 $5 
Divestiture-related costs(b)
16 — — 
Restructuring charges(c)(d):
Employee termination costs36 41 3 
Asset impairment charges— 1 2 
Exit costs— 4 1 
Total Restructuring charges and certain acquisition and divestiture-related costs
$53 $53 $11 
(a)    Acquisition-related costs represent external, incremental costs directly related to integrating acquired businesses and primarily include expenditures for consulting and the integration of systems and processes, as well as product transfer costs as well as transaction costs that represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services.
(b)    Divestiture-related costs consisted of costs related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets.
(c)    The restructuring charges for the year ended December 31, 2024 primarily consisted of employee termination costs related to organizational structure refinements, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
    The restructuring charges for the year ended December 31, 2023 primarily consisted of employee termination and exit costs related to organizational structure refinements and other cost-reduction and productivity initiatives.
    The restructuring charges for the year ended December 31, 2022 primarily relates to employee termination and exit costs associated with cost-reduction and productivity initiatives in certain international markets, as well as asset impairment charges primarily related to the consolidation of manufacturing sites in China.
(d)    The restructuring charges are associated with the following:
•For the year ended December 31, 2024, Manufacturing/research/corporate of $14 million, U.S. of $7 million and International of $15 million.
•For the year ended December 31, 2023, Manufacturing/research/corporate of $22 million and International of $21 million.
•For the year ended December 31, 2022, Manufacturing/research/corporate of $2 million and International of $4 million.
The components of, and changes in, our restructuring accruals are as follows:
EmployeeAsset
TerminationImpairmentExit
(MILLIONS OF DOLLARS)CostsChargesCostsAccrual
Balance, December 31, 2021$23 $— $2 $25 
Provision3 2 1 6 
Non-cash activity— (2)— (2)
Utilization and other(a)
(12)— (2)(14)
Balance, December 31, 2022$14 $— $1 $15 
Provision41 1 4 46 
Non-cash activity— (1)— (1)
Utilization and other(a)
(23)— (2)(25)
Balance, December 31, 2023(b)
$32 $— $3 $35 
Provision43 — — 43 
Reserve adjustment(7)— — (7)
Utilization and other(a)
(42)— (1)(43)
Balance, December 31, 2024(b)(c)
$26 $— $2 $28 
(a)    Includes adjustments for foreign currency translation.
(b)    At December 31, 2024 and 2023, included in Accrued Expenses ($26 million) and Other noncurrent liabilities ($2 million and $9 million, respectively).
(c)    Includes contractual obligations of $28 million, of which payments are expected to be approximately $26 million in 2025 and $2 million thereafter.
v3.25.0.1
Other (Income)/Deductions - Net Other (Income)/Deductions - Net (Tables)
 12 Months Ended
Dec. 31, 2024
Other Income and Expenses [Abstract]  
Components of Other (Income)/Deductions—Net
The components of Other (income)/deductions—net follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Royalty-related income(a)
$(5)$(37)$(4)
Interest income(106)(105)(50)
Identifiable intangible asset impairment charges(b)
15 35 39 
Other asset impairment charges— 1 7 
Net loss/(gain) on sale of businesses(c)
23 (101)— 
Foreign currency loss(d)
50 47 62 
Other, net4 1 (14)
Other (income)/deductions—net$(19)$(159)$40 
(a)    For 2023, primarily associated with a settlement received from a third-party for underpayment of royalties related to prior periods.
(b)    For 2024, primarily represents asset impairment charges related to our aquaculture business.
For 2023, primarily represents certain asset impairment charges related to our precision animal health and diagnostics businesses.
For 2022, primarily represents asset impairment charges related to customer relationships and developed technology rights in our diagnostics, poultry, cattle and swine businesses.
(c)    For 2024, primarily represents a net loss related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. For additional information, see Note 5. Acquisitions and Divestitures.
    For 2023, primarily relates to the gain on sale of a majority interest in our pet insurance business. For additional information, see Note 5. Acquisitions and Divestitures.
(d)    Primarily driven by costs related to hedging and exposures to certain developed and emerging market currencies.
v3.25.0.1
Tax Matters (Tables)
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign
The components of Income before provision for taxes on income follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
United States$1,867 $1,636 $1,645 
International1,266 1,300 1,011 
Income before provision for taxes on income$3,133 $2,936 $2,656 
Schedule Of Components Of Provision For Income Taxes
The components of Provision for taxes on income based on the location of the taxing authorities follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
United States:
Current income taxes:
Federal$645 $341 $514 
State and local65 35 81 
Deferred income taxes:
Federal(297)(40)(198)
State and local(42)25 (49)
Total U.S. tax provision371 361 348 
International:
Current income taxes265 281 235 
Deferred income taxes1 (46)(38)
Total international tax provision266 235 197 
Provision for taxes on income$637 $596 $545 
Schedule of Effective Income Tax Rate Reconciliation
The reconciliation of the U.S. statutory income tax rate to our effective tax rate follows:
Year Ended December 31,
202420232022
U.S. statutory income tax rate21 %21 %21 %
State and local taxes, net of federal benefits0.6 1.6 0.9 
Unrecognized tax benefits and tax settlements and resolution of certain tax positions(a)
0.4 0.9 0.1 
Foreign Derived Intangible Income(1.5)(0.7)(0.2)
U.S. Research and Development Tax Credit (0.6)(0.7)(0.7)
Share-based payments(0.2)(0.3)(0.6)
Non-deductible / non-taxable items0.2 0.2 0.1 
Taxation of non-U.S. operations0.2 (0.8)(0.4)
All other—net0.2 (0.9)0.3 
Effective tax rate 20.3 %20.3 %20.5 %
(a)    For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see C. Tax Contingencies.
Schedule of Deferred Tax Assets and Liabilities
The components of our deferred tax assets and liabilities follow:
As of December 31,
20242023
(MILLIONS OF DOLLARS)Assets (Liabilities)
Prepaid/deferred items$219 $72 
Inventories21 30 
Capitalized research and development for tax301 224 
Identifiable intangible assets(103)(154)
Property, plant and equipment(179)(199)
Employee benefits74 62 
Restructuring and other charges10 (1)
Legal and product liability reserves14 12 
Net operating loss/credit carryforwards139 133 
Unremitted earnings(3)(4)
All other3 16 
Subtotal496 191 
Valuation allowance(123)(131)
Net deferred tax asset/(liability)(a)(b)
$373 $60 
(a)    The change in the total net deferred tax asset/(liability) from December 31, 2023 to December 31, 2024 is primarily attributable to an increase in deferred tax assets related to (i) prepaid/deferred items as a result of a prepayment from a related foreign entity in Belgium; and (ii) the capitalization and amortization of research and development costs for U.S. tax purposes, as well as a decrease in deferred tax liabilities related to identifiable intangible assets.
(b)    In 2024, included in Noncurrent deferred tax assets ($540 million) and Noncurrent deferred tax liabilities ($167 million). In 2023, included in Noncurrent deferred tax assets ($206 million) and Noncurrent deferred tax liabilities ($146 million).
Schedule of Unrecognized Tax Benefits Roll Forward
The reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:
(MILLIONS OF DOLLARS)202420232022
Balance, January 1$(209)$(194)$(189)
Increases based on tax positions taken during a prior period(a)
(1)(27)(20)
Decreases based on tax positions taken during a prior period(a)
— 20 9 
Increases based on tax positions taken during the current period(a)
(7)(13)(4)
Settlements1 — 7 
Lapse in statute of limitations(a)
3 5 3 
Balance, December 31(b)
$(213)$(209)$(194)
(a)    Primarily included in Provision for taxes on income.
(b)    In 2024, included in Other taxes payable ($213 million). In 2023, included in Other taxes payable ($209 million). In 2022, included in Noncurrent deferred tax assets and Other noncurrent assets ($2 million) and Other taxes payable ($192 million).
v3.25.0.1
Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments
The components of our long-term debt are as follows:
As of December 31,
(MILLIONS OF DOLLARS)20242023
4.500% 2015 senior notes due 2025
$750 $750 
5.400% 2022 senior notes due 2025
600 600 
3.000% 2017 senior notes due 2027
750 750 
3.900% 2018 senior notes due 2028
500 500 
2.000% 2020 senior notes due 2030
750 750 
5.600% 2022 senior notes due 2032
750 750 
4.700% 2013 senior notes due 2043
1,150 1,150 
3.950% 2017 senior notes due 2047
500 500 
4.450% 2018 senior notes due 2048
400 400 
3.000% 2020 senior notes due 2050
500 500 
6,650 6,650 
Unamortized debt discount / debt issuance costs(54)(60)
Less current portion of long-term debt1,350 — 
Cumulative fair value adjustment for interest rate swap contracts(26)(26)
Long-term debt, net of discount and issuance costs$5,220 $6,564 
Schedule of Maturities of Long-term Debt
The following table provides the principal amount of debt outstanding as of December 31, 2024 by scheduled maturity date. The table also provides the expected interest payments on these borrowings as of December 31, 2024.
After
(MILLIONS OF DOLLARS)202520262027202820292029Total
Maturities$1,350 $— $750 $500 $— $4,050 $6,650 
Interest payments $272 $206 $206 $183 $164 $1,863 $2,894 
Schedule of Derivative Instruments
The aggregate notional amount of derivative instruments are as follows:
Notional
As of December 31,
(MILLIONS)20242023
Derivatives not Designated as Hedging Instruments
     Foreign currency forward-exchange contracts$2,070 $1,948 
Derivatives Designated as Hedging Instruments
     Foreign exchange derivative instruments (in foreign currency):
         Euro800 650 
         Danish krone475 600 
         Swiss franc25 25 
     Forward-starting interest rate swaps $300 $100 
     Fixed-to-floating interest rate swap contracts$250 $250 
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The classification and fair values of derivative instruments are as follows:
Fair Value of Derivatives
As of December 31,
(MILLIONS OF DOLLARS)Balance Sheet Location20242023
Derivatives Not Designated as Hedging Instruments:
   Foreign currency forward-exchange contractsOther current assets$18 $11 
   Foreign currency forward-exchange contractsOther current liabilities (6)(11)
Total derivatives not designated as hedging instruments12 — 
Derivatives Designated as Hedging Instruments:
   Forward-starting interest rate swap contractsOther non-current assets$26 $12 
   Foreign exchange derivative instrumentsOther current assets55 5 
   Foreign exchange derivative instrumentsOther non-current assets4 11 
   Foreign exchange derivative instrumentsOther current liabilities— (20)
   Foreign exchange derivative instrumentsOther non-current liabilities— (1)
   Fixed-to-floating interest rate swap contractsOther non-current liabilities(26)(26)
Total derivatives designated as hedging instruments59 (19)
Total derivatives$71 $(19)
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The amounts of net losses on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions - net, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Foreign currency forward-exchange contracts$(11)$(25)
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss)
The amounts of unrecognized net gains/(losses) on interest rate swap contracts, recorded, net of tax, in Accumulated other comprehensive loss, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Forward starting interest rate swap contracts$11 $2 
Foreign exchange derivative instruments$44 $(23)
Schedule of Net Investment Hedges, Statements of Financial Performance and Financial Position, Location
Gains on interest rate swap contracts, recognized within Interest expense, net of capitalized interest, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Foreign exchange derivative instruments$17 $19 
v3.25.0.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Lease, Cost
Supplemental information for our lease portfolio is as follows:
As of December 31,
(MILLIONS OF DOLLARS, EXCEPT LEASE TERM AND DISCOUNT RATE AMOUNTS)20242023
Supplemental Balance Sheet information:
Operating lease right-of-use assets$219 $230 
Finance lease right of use assets (in Other noncurrent assets)
9 9 
Total lease assets$228 $239 
Lease liabilities:
Operating lease liabilities - current (in Other current liabilities)
$51 $48 
Finance lease liabilities - current (in Other current liabilities)
1 1 
Operating lease liabilities - noncurrent174 188 
Finance lease liabilities - noncurrent (in Other noncurrent liabilities)
7 8 
Total lease liabilities$233 $245 
Weighted-average remaining lease term—operating leases (years)6.577.26
Weighted-average remaining lease term—finance leases (years)29.1930.27
Weighted-average discount rate—operating leases3.65 %3.41 %
Weighted-average discount rate—finance leases4.97 %4.99 %
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Supplemental Income Statement information for operating leases:
Operating lease expense$59 $56 $51 
Variable lease costs18 20 12 
Short-term lease costs not included in the measurement of lease liabilities13 11 12 
Supplemental Income Statement information for finance leases:
Amortization of right-of-use assets1 1 — 
Total lease costs$91 $88 $75 
Supplemental Cash Flow information for leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows – operating leases$61 $57 $51 
Financing cash flows – finance leases1 — — 
Lease obligations obtained in exchange for right-of-use assets - operating (non-cash)46 73 99 
Lease obligations obtained in exchange for right-of-use assets – finance (non-cash)— 9 — 
Lessee, Operating Lease, Liability, Maturity
Future minimum lease payments under non-cancellable lease contracts as of December 31, 2024 are as follows:
TotalLess:
AfterLeaseImputed
(MILLIONS OF DOLLARS)202520262027202820292029PaymentsInterestTotal
Operating leases$59 $50 $39 $29 $18 $63 $258 $(33)$225 
Finance leases$1 $1 $1 $1 $1 $7 $12 $(4)$8 
Finance Lease, Liability, to be Paid, Maturity
Future minimum lease payments under non-cancellable lease contracts as of December 31, 2024 are as follows:
TotalLess:
AfterLeaseImputed
(MILLIONS OF DOLLARS)202520262027202820292029PaymentsInterestTotal
Operating leases$59 $50 $39 $29 $18 $63 $258 $(33)$225 
Finance leases$1 $1 $1 $1 $1 $7 $12 $(4)$8 
v3.25.0.1
Inventories (Tables)
 12 Months Ended
Dec. 31, 2024
Inventory Disclosure [Abstract]  
Components of Inventory
The components of inventory follow:
As of December 31,
(MILLIONS OF DOLLARS)20242023
Finished goods$996 $1,147 
Work-in-process933 966 
Raw materials and supplies377 451 
Inventories$2,306 $2,564 
v3.25.0.1
Property, Plant and Equipment (Tables)
 12 Months Ended
Dec. 31, 2024
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment The components of property, plant and equipment follow:
Useful LivesAs of December 31,
(MILLIONS OF DOLLARS)(Years)20242023
Land—$28 $25 
Buildings
33
1,292 1,316 
Machinery, equipment and fixtures
3 - 20
3,353 3,372 
Construction-in-progress—1,353 1,085 
6,026 5,798 
Less: Accumulated depreciation2,635 2,594 
Property, plant and equipment$3,391 $3,204 
v3.25.0.1
Goodwill and Other Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Changes in the Carrying Amount of Goodwill
The components of, and changes in, the carrying amount of goodwill follow:
(MILLIONS OF DOLLARS)U.S.InternationalTotal
Balance, December 31, 2022$1,485 $1,261 $2,746 
Additions(a)
24 14 38 
Transfers/Adjustments(b)
25 (34)(9)
Other(c)
(2)(14)(16)
Balance, December 31, 2023$1,532 $1,227 $2,759 
Other(c)
(17)(18)(35)
Balance, December 31, 2024$1,515 $1,209 $2,724 
(a)     Primarily relates to the acquisitions of PetMedix and adivo. See Note 5. Acquisitions and Divestitures.
(b)     Primarily relates to asset transfers from international markets to the U.S.
(c)     Includes adjustments for foreign currency translation.
For 2024, also includes adjustments for the derecognition of goodwill of $24 million related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. See Note 5. Acquisitions and Divestitures.
For 2023, also includes the sale of a majority interest in our pet insurance business within our U.S. segment.
Components of Identifiable Intangible Assets
The components of identifiable intangible assets follow:
As of December 31, 2024As of December 31, 2023
IdentifiableIdentifiable
GrossIntangible Assets,GrossIntangible Assets,
CarryingAccumulatedLess AccumulatedCarryingAccumulatedLess Accumulated
(MILLIONS OF DOLLARS)AmountAmortizationAmortizationAmountAmortizationAmortization
Finite-lived intangible assets:
Developed technology rights(a)
$1,891 $(1,175)$716 $1,986 $(1,101)$885 
Brands and tradenames(a)
367 (246)121 383 (246)137 
Other278 (197)81 270 (190)80 
Total finite-lived intangible assets2,536 (1,618)918 2,639 (1,537)1,102 
Indefinite-lived intangible assets:
Brands and tradenames(a)
66 — 66 88 — 88 
In-process research and development136 — 136 141 — 141 
Product rights7 — 7 7 — 7 
Total indefinite-lived intangible assets209 — 209 236 — 236 
Identifiable intangible assets$2,745 $(1,618)$1,127 $2,875 $(1,537)$1,338 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
The annual amortization expense expected for the years 2025 through 2029 is as follows:
(MILLIONS OF DOLLARS)20252026202720282029
Amortization expense$154 $147 $143 $114 $77 
Schedule of Acquired Finite-Lived Intangible Assets by Major Class
The components of identifiable intangible assets follow:
As of December 31, 2024As of December 31, 2023
IdentifiableIdentifiable
GrossIntangible Assets,GrossIntangible Assets,
CarryingAccumulatedLess AccumulatedCarryingAccumulatedLess Accumulated
(MILLIONS OF DOLLARS)AmountAmortizationAmortizationAmountAmortizationAmortization
Finite-lived intangible assets:
Developed technology rights(a)
$1,891 $(1,175)$716 $1,986 $(1,101)$885 
Brands and tradenames(a)
367 (246)121 383 (246)137 
Other278 (197)81 270 (190)80 
Total finite-lived intangible assets2,536 (1,618)918 2,639 (1,537)1,102 
Indefinite-lived intangible assets:
Brands and tradenames(a)
66 — 66 88 — 88 
In-process research and development136 — 136 141 — 141 
Product rights7 — 7 7 — 7 
Total indefinite-lived intangible assets209 — 209 236 — 236 
Identifiable intangible assets$2,745 $(1,618)$1,127 $2,875 $(1,537)$1,338 
v3.25.0.1
Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan
The following table provides an analysis of the changes in the benefit obligations, plan assets and funded status of our dedicated pension plans (including those transferred to us):
As of and for the
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Change in benefit obligation:
Projected benefit obligation, beginning$129 $122 
Service cost5 5 
Interest cost5 5 
Changes in actuarial assumptions and other9 (4)
Settlements and curtailments(2)— 
Benefits paid(4)(3)
Adjustments for foreign currency translation(5)5 
Other––net(1)(1)
Benefit obligation, ending136 129 
Change in plan assets:
Fair value of plan assets, beginning86 78 
Actual return on plan assets12 3 
Company contributions6 6 
Settlements and curtailments(3)— 
Benefits paid(4)(3)
Adjustments for foreign currency translation(3)2 
Other––net— — 
Fair value of plan assets, ending94 86 
Funded status—Projected benefit obligation in excess of plan assets at end of year(a)
$(42)$(43)
(a) Included in Other noncurrent liabilities.
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets
Information related to the funded status of selected plans follows:
As of December 31,
(MILLIONS OF DOLLARS)20242023
Pension plans with an accumulated benefit obligation in excess of plan assets:
Fair value of plan assets$9 $8 
Accumulated benefit obligation50 45 
Pension plans with a projected benefit obligation in excess of plan assets:
Fair value of plan assets9 64 
Projected benefit obligation55 109 
Schedule of Net Benefit Costs
The following table provides the net periodic benefit cost associated with dedicated pension plans (including those transferred to us):
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Service cost$5 $5 $6 
Interest cost5 5 2 
Expected return on plan assets(4)(4)(3)
Amortization of net losses— — 1 
Settlement and curtailments (gains) / losses1 — — 
Net periodic benefit cost$7 $6 $6 
Schedule of Assumptions Used
The following table provides the weighted average actuarial assumptions for the dedicated pension plans (including those transferred to us):
As of December 31,
(PERCENTAGES)202420232022
Weighted average assumptions used to determine benefit obligations:
Discount rate3.5 %4.2 %3.7 %
Rate of compensation increase3.5 %3.6 %3.5 %
Cash balance credit interest rate1.7 %1.6 %1.7 %
Weighted average assumptions used to determine net benefit cost for the year ended December 31:
Discount rate4.2 %3.7 %1.4 %
Expected return on plan assets4.6 %4.7 %3.3 %
Rate of compensation increase3.6 %3.5 %3.4 %
Cash balance credit interest rate1.6 %1.7 %1.5 %
Schedule of Allocation of Plan Assets
The components of plan assets follow:
As of December 31,
(MILLIONS OF DOLLARS)20242023
Cash and cash equivalents$1 $1 
Equity securities: Equity commingled funds37 34 
Debt securities: Government bonds46 40 
Other investments10 11 
Total(a)
$94 $86 
(a)    Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 3. Significant Accounting Policies—Fair Value). Investment plan assets are valued using Level 1 or Level 2 inputs.
Schedule Of Percentage Of Allocation Of Plan Assets
The long-term target asset allocations and the percentage of the fair value of plans assets for dedicated benefit plans follow:
As of December 31,
Target allocation
percentagePercentage of Plan Assets
(PERCENTAGES)202420242023
Cash and cash equivalents
0-10%
1.4 %1.7 %
Equity securities
0-60%
39.2 %39.4 %
Debt securities
15-100%
48.4 %46.9 %
Other investments
0-100%
11.0 %12.0 %
Total
100%
100 %100 %
v3.25.0.1
Share-Based Payments (Tables)
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Components of Share-based Compensation Expense
The components of share-based compensation expense follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022
Stock options / stock appreciation rights$11 $8 $10 
RSUs / DSUs42 37 34 
PSUs21 15 18 
Share-based compensation expense—total(a)
$74 $60 $62 
Tax benefit for share-based compensation expense(9)(8)(8)
Share-based compensation expense, net of tax$65 $52 $54 
(a)    For each of the years ended December 31, 2024, 2023 and 2022, we capitalized up to $1 million of share-based compensation expense to inventory.
Share-based Payment Awards, Stock Options, Valuation Assumptions
The fair-value-based method for valuing each Zoetis stock option grant on the grant date uses the Black-Scholes-Merton option-pricing model, which incorporates a number of valuation assumptions noted in the following table, shown at their weighted-average values:
Year Ended December 31,
202420232022
Expected dividend yield(a)
0.87 %0.92 %0.64 %
Risk-free interest rate(b)
4.06 %3.84 %1.81 %
Expected stock price volatility(c)
26.99 %28.63 %27.64 %
Expected term(d) (years)
4.14.24.9
(a)    Determined using a constant dividend yield during the expected term of the Zoetis stock option.
(b)     Determined using the interpolated yield on U.S. Treasury zero-coupon issues.
(c)     Determined using an equal weighting between historical volatility of the Zoetis stock price and implied volatility. The selection of the blended historical and implied volatility approach was based on our assessment that this calculation of expected volatility is more representative of future stock price trends.
(d)     Determined using expected exercise and post-vesting termination patterns.
Stock Option Activity
The following table provides an analysis of stock option activity for the year ended December 31, 2024:
Weighted-Average Remaining Contractual Term
Aggregate Intrinsic Value(a)
Weighted-Average
SharesExercise Price(Years)(Millions)
Outstanding, December 31, 20231,526,502 $119.13 
Granted276,086 195.49 
Exercised(315,736)64.82 
Forfeited(38,903)182.58 
Outstanding, December 31, 20241,447,949 $143.83 6.0$43,065,332 
Exercisable, December 31, 2024846,647 $112.36 4.4$42,923,962 
(a)    Market price of underlying Zoetis common stock less exercise price.
As of December 31, 2024, there was approximately $11 million of unrecognized compensation costs related to nonvested stock options, which will be recognized over an expected remaining weighted-average period of eight months.
The following table summarizes data related to stock option activity:
Year Ended/As of December 31,
(MILLIONS OF DOLLARS, EXCEPT PER STOCK OPTION AMOUNTS)202420232022
Weighted-average grant date fair value per stock option$50.77 $43.56 $51.13 
Aggregate intrinsic value on exercise40 81 31 
Cash received upon exercise20 42 15 
Tax benefits realized related to exercise 17 17 19 
Restricted Stock Units (RSUs)
The following table provides an analysis of RSU activity for the year ended December 31, 2024:
Weighted-Average
RSUsGrant Date Fair Value
Nonvested, December 31, 2023655,851 $173.49 
Granted256,149 194.75 
Vested(324,151)165.08 
Reinvested dividend equivalents6,288 182.21 
Forfeited(38,031)182.84 
Nonvested, December 31, 2024556,106 $187.61 
Performance-based Units Activity (PSUs)
The following table provides an analysis of PSU activity for the year ended December 31, 2024:
Weighted-Average
PSUsGrant Date Fair Value
Nonvested, December 31, 2023251,780 $228.99 
Granted101,099 268.71 
Vested(82,688)213.05 
Reinvested dividend equivalents2,742 243.86 
Forfeited(16,366)248.41 
Nonvested, December 31, 2024256,567 $248.68 
Shares issued, December 31, 2024
78,230 $208.87 
v3.25.0.1
Stockholders' Equity (Tables)
 12 Months Ended
Dec. 31, 2024
Equity, Attributable to Parent [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)
Changes, net of tax, in accumulated other comprehensive loss, excluding noncontrolling interest, follow:
Currency Translation AdjustmentsBenefit PlansAccumulated Other
Cash Flow Net InvestmentOther CurrencyActuarialComprehensive
(MILLIONS OF DOLLARS)HedgesHedgesTranslation Adj(Losses)/GainsLoss
Balance, December 31, 2021$4 $5 $(756)$(17)$(764)
Other comprehensive gain/(loss), net of tax86 36 (188)13 

(53)
Balance, December 31, 202290 41 (944)(4)(817)
Other comprehensive (loss)/gain, net of tax(5)(23)— 6 (22)
Balance, December 31, 202385 18 (944)2 (839)
Other comprehensive gain/(loss), net of tax4 44 (147)(2)

(101)
Balance, December 31, 2024$89 $62 $(1,091)$— $(940)
v3.25.0.1
Earnings Per Share (Tables)
 12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
Basic and Diluted Earnings Per Share
The following table presents the calculation of basic and diluted earnings per share:
Year Ended December 31,
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)202420232022
Numerator
Net income before allocation to noncontrolling interests$2,496 $2,340 $2,111 
Less: net income/(loss) attributable to noncontrolling interests10 (4)(3)
Net income attributable to Zoetis Inc.$2,486 $2,344 $2,114 
Denominator
Weighted-average common shares outstanding454.200 461.172 468.891 
Common stock equivalents: stock options, RSUs, DSUs and PSUs0.648 1.097 1.494 
Weighted-average common and potential dilutive shares outstanding454.848 462.269 470.385 
Earnings per share attributable to Zoetis Inc. stockholders—basic$5.47 $5.08 $4.51 
Earnings per share attributable to Zoetis Inc. stockholders—diluted$5.47 $5.07 $4.49 
v3.25.0.1
Segment Information (Tables)
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Schedule of Selected Income Statement Information by Segment
Selected Statement of Income Information                                
Earnings
Depreciation and Amortization(a)
Year Ended December 31,Year Ended December 31,
(MILLIONS OF DOLLARS)202420232022202420232022
U.S.
Revenue$5,074 $4,555 $4,313 
Cost of Sales936 900 803 
Gross Profit4,138 3,655 3,510 
    Gross Margin81.6 %80.2 %81.4 %
Operating expenses(b)
805 786 765 
Other (income)/deductions-net(3)6 (18)
U.S. Earnings3,336 2,863 2,763 $85 $80 $55 
International
Revenue(c)
4,102 3,911 3,681 
Cost of Sales1,312 1,234 1,083 
Gross Profit2,790 2,677 2,598 
    Gross Margin68.0 %68.4 %70.6 %
Operating expenses(b)
671 638 611 
Other (income)/deductions-net1 2 (3)
International Earnings2,118 2,037 1,990 96 92 86 
Total operating segments5,454 4,900 4,753 181 172 141 
Other business activities
(562)(496)(424)43 33 28 
Reconciling Items:
Corporate
(1,213)(1,042)(1,073)128 128 132 
Purchase accounting adjustments
(140)(159)(160)140 153 159 
Acquisition and divestiture-related costs
(18)(9)(5)— — — 
Certain significant items(d)
(79)33 (56)— — — 
Other unallocated
(309)(291)(379)5 5 5 
Total Earnings(e)
$3,133 $2,936 $2,656 $497 $491 $465 
(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)    Operating expenses primarily consisted of field selling, advertising and promotions, other marketing expenses, and freight and logistics costs.
(c) Revenue denominated in euros was $937 million in 2024, $853 million in 2023 and $774 million in 2022.
(d)    For 2024, certain significant items primarily consisted of employee termination costs related to organizational structure refinements, a net loss related to the sale
of our medicated feed additive product portfolio, certain water soluble products and related assets, as well as asset impairment charges related to our aquaculture business, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
For 2023, certain significant items primarily consisted of a gain on the sale of a majority interest in our pet insurance business of $101 million, partially offset by employee termination and exit costs related to organizational structure refinements of $43 million and certain asset impairment charges primarily related to our precision animal health and diagnostics businesses of $24 million.
For 2022, certain significant items primarily represents inventory and asset impairment charges related to customer relationships, developed technology rights and property, plant and equipment in our diagnostics, poultry, cattle and swine businesses and the consolidation of manufacturing sites in China of $47 million, as well as employee termination and exit costs associated with cost-reduction and productivity initiatives in certain international markets of $4 million.
(e)    Defined as income before provision for taxes on income.
Long-lived Assets by Geographic Areas
Property, plant and equipment, less accumulated depreciation, by geographic region follow:
As of December 31,
(MILLIONS OF DOLLARS)20242023
U.S.$2,249 $2,092 
International1,142 1,112 
Property, plant and equipment, less accumulated depreciation$3,391 $3,204 
v3.25.0.1
Business Description (Details)
Dec. 31, 2024
geographicRegion
country
specie
product_category
Product Information [Line Items]  
Number of regional segments | geographicRegion 2
Number of countries in which entity markets products 45
Number of core animal species | specie 8
Number of major product categories | product_category 7
Product  
Product Information [Line Items]  
Number of countries in which entity markets products 100
v3.25.0.1
Significant Accounting Policies (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Significant Accounting Policies [Line Items]      
Revenue recognized throughout 2024 $ 4    
Contract liabilities 18    
Advertising and promotion expenses 302 $ 281 $ 287
Cost of sales [1] 2,719 2,561 2,454
Capitalized internal use software 18 35  
Depreciation expense 61 75 69
Accounts receivable, less allowance for doubtful accounts 1,316 1,304  
Other receivables $ 79 58  
Percentage of being realized upon settlement 50.00%    
Accruals for asset retirement obligations, non current $ 23 28  
Accounts Receivable      
Significant Accounting Policies [Line Items]      
Accruals for sales deductions $ 257 301  
Minimum      
Significant Accounting Policies [Line Items]      
Customer payment terms 30 days    
Minimum | Software Development      
Significant Accounting Policies [Line Items]      
Estimated useful life (in years) 5 years    
Maximum      
Significant Accounting Policies [Line Items]      
Customer payment terms 90 days    
Maximum | Software Development      
Significant Accounting Policies [Line Items]      
Estimated useful life (in years) 10 years    
Other current liabilities      
Significant Accounting Policies [Line Items]      
Accruals for sales deductions $ 344 323  
Shipping and Handling [Member]      
Significant Accounting Policies [Line Items]      
Cost of sales $ 107 $ 101 $ 82
[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.
v3.25.0.1
Revenue - Revenue by Geographic Area (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2024
USD ($)
country
Dec. 31, 2023
USD ($)
country
Dec. 31, 2022
USD ($)
country
Revenue from External Customer [Line Items]      
Revenues $ 9,256 $ 8,544 $ 8,080
Revenue by country, exceeded $ 100 $ 100  
Revenue by country, exceeded, number of countries | country 13 12 12
Contract Manufacturing and Human Health Diagnostics [Member]      
Revenue from External Customer [Line Items]      
Revenues $ 80 $ 78 $ 86
United States      
Revenue from External Customer [Line Items]      
Revenues 5,074 4,555 4,313
AUSTRALIA      
Revenue from External Customer [Line Items]      
Revenues 319 323 289
BRAZIL      
Revenue from External Customer [Line Items]      
Revenues 414 393 330
CANADA      
Revenue from External Customer [Line Items]      
Revenues 277 255 238
CHILE      
Revenue from External Customer [Line Items]      
Revenues 123 140 141
CHINA      
Revenue from External Customer [Line Items]      
Revenues 270 320 382
FRANCE      
Revenue from External Customer [Line Items]      
Revenues 156 142 126
GERMANY      
Revenue from External Customer [Line Items]      
Revenues 225 202 176
ITALY      
Revenue from External Customer [Line Items]      
Revenues 129 121 111
JAPAN      
Revenue from External Customer [Line Items]      
Revenues 147 158 173
MEXICO      
Revenue from External Customer [Line Items]      
Revenues 169 162 136
SPAIN      
Revenue from External Customer [Line Items]      
Revenues 130 122 118
UNITED KINGDOM      
Revenue from External Customer [Line Items]      
Revenues 314 277 235
Other developed markets      
Revenue from External Customer [Line Items]      
Revenues 564 512 468
Other emerging markets      
Revenue from External Customer [Line Items]      
Revenues 865 784 758
Total Geographical Area      
Revenue from External Customer [Line Items]      
Revenues $ 9,176 $ 8,466 $ 7,994
v3.25.0.1
Revenue - Revenue by Major Species (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Revenue from External Customer [Line Items]      
Revenues $ 9,256 $ 8,544 $ 8,080
Operating Segments | United States Segment      
Revenue from External Customer [Line Items]      
Revenues 5,074 4,555 4,313
Operating Segments | International Segment      
Revenue from External Customer [Line Items]      
Revenues [1] 4,102 3,911 3,681
Livestock      
Revenue from External Customer [Line Items]      
Revenues 2,898 2,890 2,791
Livestock | United States Segment      
Revenue from External Customer [Line Items]      
Revenues 1,020 1,026 972
Livestock | International Segment      
Revenue from External Customer [Line Items]      
Revenues 1,878 1,864 1,819
Companion Animal      
Revenue from External Customer [Line Items]      
Revenues 6,278 5,576 5,203
Companion Animal | United States Segment      
Revenue from External Customer [Line Items]      
Revenues 4,054 3,529 3,341
Companion Animal | International Segment      
Revenue from External Customer [Line Items]      
Revenues 2,224 2,047 1,862
Contract Manufacturing and Human Health Diagnostics [Member]      
Revenue from External Customer [Line Items]      
Revenues $ 80 $ 78 $ 86
[1] Operating expenses primarily consisted of field selling, advertising and promotions, other marketing expenses, and freight and logistics costs.
(c) Revenue denominated in euros was $937 million in 2024, $853 million in 2023 and $774 million in 2022.
v3.25.0.1
Revenue - Revenue by Species (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Revenue from External Customer [Line Items]      
Revenues $ 9,256 $ 8,544 $ 8,080
Cattle      
Revenue from External Customer [Line Items]      
Revenues 1,531 1,503 1,440
Swine      
Revenue from External Customer [Line Items]      
Revenues 516 543 565
Poultry      
Revenue from External Customer [Line Items]      
Revenues 527 524 476
Fish      
Revenue from External Customer [Line Items]      
Revenues 242 220 212
Other      
Revenue from External Customer [Line Items]      
Revenues 82 100 98
Livestock      
Revenue from External Customer [Line Items]      
Revenues 2,898 2,890 2,791
Dogs and Cats      
Revenue from External Customer [Line Items]      
Revenues 285 285 264
Horses      
Revenue from External Customer [Line Items]      
Revenues 5,993 5,291 4,939
Companion Animal      
Revenue from External Customer [Line Items]      
Revenues 6,278 5,576 5,203
Contract Manufacturing and Human Health Diagnostics [Member]      
Revenue from External Customer [Line Items]      
Revenues $ 80 $ 78 $ 86
v3.25.0.1
Revenue - Revenue by Product (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Revenue from External Customer [Line Items]      
Revenues $ 9,256 $ 8,544 $ 8,080
Vaccines      
Revenue from External Customer [Line Items]      
Revenues 1,827 1,771 1,718
Other pharmaceuticals      
Revenue from External Customer [Line Items]      
Revenues 658 678 623
Dermatology [Member]      
Revenue from External Customer [Line Items]      
Revenues 1,655 1,427 1,329
Anti-infectives      
Revenue from External Customer [Line Items]      
Revenues 1,100 1,057 1,081
Parasiticides      
Revenue from External Customer [Line Items]      
Revenues 2,153 1,947 1,860
Other non-pharmaceuticals      
Revenue from External Customer [Line Items]      
Revenues 253 254 250
Medicated feed additives      
Revenue from External Customer [Line Items]      
Revenues 293 354 360
Animal health diagnostics      
Revenue from External Customer [Line Items]      
Revenues 386 376 353
Total Products and Services      
Revenue from External Customer [Line Items]      
Revenues 9,176 8,466 7,994
Contract Manufacturing and Human Health Diagnostics [Member]      
Revenue from External Customer [Line Items]      
Revenues 80 78 86
Pain & Sedation      
Revenue from External Customer [Line Items]      
Revenues $ 851 $ 602 $ 420
v3.25.0.1
Revenue - Other Revenue Information (Details) - product_category
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Concentration Risk [Line Items]      
Number of Comprehensive Product Lines 300    
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Largest Customer [Member]      
Concentration Risk [Line Items]      
Concentration risk, percentage 14.00% 15.00% 14.00%
v3.25.0.1
Acquisitions and Divestitures (Details) - USD ($)
$ in Millions
 12 Months Ended
Oct. 31, 2024
Aug. 03, 2023
Sep. 30, 2022
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Sep. 30, 2024
Business Acquisition [Line Items]              
Gain (Loss) on Disposition of Business       $ (23) $ 101 $ 0  
Proceeds from sale of businesses, net of cash sold       293 $ 96 $ 0  
Gain (Loss) On Disposition Of Business, Remeasurement Of Retained Noncontrolling Investment       24      
Gain (Loss) On Disposition Of Asset, Goodwill Allocation       12      
Disposal Group, Disposed of by Sale, Not Discontinued Operations              
Business Acquisition [Line Items]              
Disposal Group, Including Discontinued Operation, Inventory, Current $ 154            
Disposal Group, Including Discontinued Operation, Other Assets, Current 3            
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Noncurrent 108            
Disposal Group, Including Discontinued Operation, Operating Lease, Right-Of-Use Asset, Noncurrent 2            
Disposal Group, Including Discontinued Operation, Goodwill, Noncurrent 12            
Disposal Group, Including Discontinued Operation, Intangible Assets, Noncurrent 26            
Disposal Group, Including Discontinued Operation, Deferred Tax Assets 2            
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent 9            
Disposal Group, Including Discontinued Operation, Assets 316            
Disposal Group, Including Discontinued Operation, Accounts Payable, Current 3            
Disposal Group, Including Discontinued Operation, Accrued Liabilities, Current 3            
Disposal Group, Including Discontinued Operation, Employee Related, Current 2            
Disposal Group, Including Discontinued Operation, Other Liabilities, Noncurrent 8            
Disposal Group, Including Discontinued Operation, Liabilities 16            
Pumpkin Insurance Services              
Business Acquisition [Line Items]              
Amount to be received under agreement       99      
Cash Divested from Deconsolidation       6      
Gain (Loss) on Disposition of Business       101      
Proceeds from sale of businesses, net of cash sold       93      
Medicated feed additives              
Business Acquisition [Line Items]              
Divestiture Of Business, Price Of Divestiture, Expected       309      
Divestiture Of Business, Contingent Consideration Adjustments       6      
Amount to be received under agreement       303      
Cash Divested from Deconsolidation       11      
Gain (Loss) on Disposition of Business       (25)      
Proceeds from sale of businesses, net of cash sold $ 292            
Jurox              
Business Acquisition [Line Items]              
Business Acquisition, Percentage of Voting Interests Acquired             100.00%
Payments to Acquire Businesses, Net of Cash Acquired     $ 215        
Business Combination, Consideration Transferred     240        
Business Combination, Price of Acquisition, Expected     226        
Cash paid to shareholders     240        
Business Combination, Consideration Transferred, Outstanding       $ 5      
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents     20        
Accounts receivable     8        
Inventories     21        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other     1        
Property, plant and equipment     25        
Identifiable intangible assets     135        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets     7        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable     2        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other     12        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other     1        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net     202        
Goodwill     $ 38        
PetMedix Ltd.              
Business Acquisition [Line Items]              
Business Acquisition, Percentage of Voting Interests Acquired       100.00%      
Payments to Acquire Businesses, Net of Cash Acquired   $ 111          
Cash Acquired from Acquisition   19          
Business Combination, Consideration Transferred, Cash Withheld For Post-Closing Adjustments   5          
Business Combination, Consideration Transferred   $ 100          
v3.25.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives - Components of Costs Incurred (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]      
Asset write-offs and asset impairments $ 31 $ 46 $ 53
Exit costs [1],[2] 0 4 1
Restructuring And Related Activities, Divestiture Related Cost 16 0 0
Restructuring Charges And Acquisition And Divestiture Related Costs 53 53 11
Restructuring charges 43 46 6
Manufacturing, Research, Corporate      
Restructuring Cost and Reserve [Line Items]      
Restructuring charges 14 22 2
Manufacturing, Research, Corporate | United States      
Restructuring Cost and Reserve [Line Items]      
Restructuring charges 7    
Manufacturing, Research, Corporate | International      
Restructuring Cost and Reserve [Line Items]      
Restructuring charges 15 21 4
Employee Severance      
Restructuring Cost and Reserve [Line Items]      
Employee termination costs [1],[2] 36 41 3
Restructuring charges 43 41 3
Facility Closing      
Restructuring Cost and Reserve [Line Items]      
Asset write-offs and asset impairments 0 1 2
Restructuring charges 0 1 2
Acquisition-related costs      
Restructuring Cost and Reserve [Line Items]      
Acquisition-related costs $ 1 $ 7 $ 5
[1] The restructuring charges are associated with the following:
•For the year ended December 31, 2024, Manufacturing/research/corporate of $14 million, U.S. of $7 million and International of $15 million.
•For the year ended December 31, 2023, Manufacturing/research/corporate of $22 million and International of $21 million.
•For the year ended December 31, 2022, Manufacturing/research/corporate of $2 million and International of $4 million.
[2] The restructuring charges for the year ended December 31, 2024 primarily consisted of employee termination costs related to organizational structure refinements, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
    The restructuring charges for the year ended December 31, 2023 primarily consisted of employee termination and exit costs related to organizational structure refinements and other cost-reduction and productivity initiatives.
    The restructuring charges for the year ended December 31, 2022 primarily relates to employee termination and exit costs associated with cost-reduction and productivity initiatives in certain international markets, as well as asset impairment charges primarily related to the consolidation of manufacturing sites in China.
v3.25.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives - Restructuring Benefits and Charges (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Restructuring Reserve [Roll Forward]      
Beginning balance $ 35 [1] $ 15 $ 25
Provision/(benefit) 43 46 6
Non-cash activity   1 2
Utilization and other [2] (43) (25) (14)
Reserve adjustment (7)    
Ending balance $ 28 [1] 35 [1] 15
Restructuring Incurred Cost Statement Of Income Or Comprehensive Income Extensible Enumeration Not Disclosed Flag Provision    
Other current liabilities      
Restructuring Reserve [Roll Forward]      
Accrued expenses $ 26    
Other non-current liabilities      
Restructuring Reserve [Roll Forward]      
Other noncurrent liabilities 2 9  
Employee Severance      
Restructuring Reserve [Roll Forward]      
Beginning balance 32 [1] 14 23
Provision/(benefit) 43 41 3
Non-cash activity   0  
Utilization and other [2] (42) (23) (12)
Reserve adjustment (7)    
Ending balance 26 [1] 32 [1] 14
Exit Costs      
Restructuring Reserve [Roll Forward]      
Beginning balance 3 [1] 1 2
Provision/(benefit) 0 4 1
Non-cash activity   0 0
Utilization and other [2] (1) (2) (2)
Reserve adjustment 0    
Ending balance 2 [1] 3 [1] 1
Facility Closing      
Restructuring Reserve [Roll Forward]      
Provision/(benefit) 0 1 2
Non-cash activity   $ 1 $ 2
Reserve adjustment 0    
Employee Severance and Exit Costs      
Restructuring Reserve [Roll Forward]      
Contractual obligation 28    
Payments expected in 2025 26    
Payments expected thereafter $ 2    
[1] At December 31, 2024 and 2023, included in Accrued Expenses ($26 million) and Other noncurrent liabilities ($2 million and $9 million, respectively).
[2] Includes adjustments for foreign currency translation.
v3.25.0.1
Other (Income)/Deductions - Net Other (Income)/Deductions - Net (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Other Income and Expenses [Abstract]      
Royalty-related income $ (5) $ (37) $ (4)
Interest income (106) (105) (50)
Identifiable intangible asset impairment charges 15 35 39
Other asset impairment charges 0 1 7
Foreign currency loss [1] 50 47 62
Other, net 4 1 (14)
Other (income)/deductions—net (19) (159) 40
Gain (Loss) on Disposition of Business $ 23 $ (101) $ 0
[1] Primarily driven by costs related to hedging and exposures to certain developed and emerging market currencies.
v3.25.0.1
Tax Matters (Taxes on Income) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Taxes on Income [Line Items]      
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest [1] $ 3,133 $ 2,936 $ 2,656
Deferred income taxes:      
Total U.S. tax provision 637 596 545
International:      
Discrete tax benefit recorded related to prior period tax adjustments [2] $ 1 $ 27 $ 20
U.S. statutory income tax rate 21.00% 21.00% 21.00%
State and local taxes, net of federal benefits 0.60% 1.60% 0.90%
Unrecognized tax benefits and tax settlements and resolution of certain tax positions [3] 0.40% 0.90% 0.10%
Foreign Derived Intangible Income (1.50%) (0.70%) (0.20%)
U.S. Research and Development Tax Credit and U.S. Domestic Production Activities deduction (0.60%) (0.70%) (0.70%)
Stock-based compensation (0.20%) (0.30%) (0.60%)
Non-deductible / non-taxable items 0.20% 0.20% 0.10%
Taxation of non-U.S. operations 0.20% (0.80%) (0.40%)
All other—net 0.20% (0.90%) 0.30%
Effective tax rate 20.30% 20.30% 20.50%
Effective Income Tax Rate Reconciliation, FDII, Amount $ 43    
International      
International:      
Total international tax provision 266 $ 235 $ 197
United States      
Deferred income taxes:      
Total U.S. tax provision 371 361 348
United States      
Taxes on Income [Line Items]      
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest 1,867 1,636 1,645
Current income taxes:      
Federal 645 341 514
State and local 65 35 81
Deferred income taxes:      
Federal (297) (40) (198)
State and local (42) 25 (49)
International      
Taxes on Income [Line Items]      
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest 1,266 1,300 1,011
International:      
Current income taxes 265 281 235
Deferred income taxes $ 1 $ (46) $ (38)
[1] Defined as income before provision for taxes on income.
[2] Primarily included in Provision for taxes on income.
[3] For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see C. Tax Contingencies.
v3.25.0.1
Tax Matters (Deferred Taxes) (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Taxes on Income [Line Items]        
Unrecognized Tax Benefits $ 213 [1] $ 209 [1] $ 194 [1] $ 189
Prepaid/deferred items 219 72    
Inventories 21 30    
Capitalized research and development for tax 301 224    
Identifiable intangible assets (103) (154)    
Property, plant and equipment (179) (199)    
Employee benefits 74 62    
Restructuring and other charges 10 (1)    
Legal and product liability reserves 14 12    
Net operating loss/credit carryforwards 139 133    
Unremitted earnings (3) (4)    
All other 3      
All other   16    
Subtotal 496 191    
Valuation allowance 123 131    
Deferred Tax Assets, Net [2],[3] 373 60    
Noncurrent deferred tax assets 540 206    
Noncurrent deferred tax liabilities 167 146    
Cumulative amount of undistributed earnings 8,500      
Noncurrent Deferred Tax Assets        
Taxes on Income [Line Items]        
Unrecognized Tax Benefits     2  
Other Taxes Payable        
Taxes on Income [Line Items]        
Unrecognized Tax Benefits $ 213 $ 209 $ 192  
[1] In 2024, included in Other taxes payable ($213 million). In 2023, included in Other taxes payable ($209 million). In 2022, included in Noncurrent deferred tax assets and Other noncurrent assets ($2 million) and Other taxes payable ($192 million).
[2] In 2024, included in Noncurrent deferred tax assets ($540 million) and Noncurrent deferred tax liabilities ($167 million). In 2023, included in Noncurrent deferred tax assets ($206 million) and Noncurrent deferred tax liabilities ($146 million).
[3] The change in the total net deferred tax asset/(liability) from December 31, 2023 to December 31, 2024 is primarily attributable to an increase in deferred tax assets related to (i) prepaid/deferred items as a result of a prepayment from a related foreign entity in Belgium; and (ii) the capitalization and amortization of research and development costs for U.S. tax purposes, as well as a decrease in deferred tax liabilities related to identifiable intangible assets.
v3.25.0.1
Tax Matters (Tax Contingencies) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Income Tax Contingency [Line Items]      
Net liabilities associated with uncertain tax positions $ 214 $ 209 $ 192
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance, January 1 (209) [1] (194) [1] (189)
Increases based on tax positions taken during a prior period [2] (1) (27) (20)
Decreases based on tax positions taken during a prior period [2] 0 20 9
Increases based on tax positions taken during the current period [2] (7) (13) (4)
Settlements 1 0 7
Lapse in statute of limitations 3 5 3
Balance, December 31 [1] (213) (209) (194)
Net interest expense 12 10 4
Gross accrued interest 37 26 16
Gross accrued penalties 1 1 3
Other Noncurrent Assets [Member]      
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance, January 1 0 (11)  
Balance, December 31 (1) 0 (11)
Noncurrent Deferred Tax Assets      
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance, January 1   (2)  
Balance, December 31     (2)
Other Taxes Payable      
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance, January 1 (209) (192)  
Balance, December 31 $ (213) $ (209) $ (192)
[1] In 2024, included in Other taxes payable ($213 million). In 2023, included in Other taxes payable ($209 million). In 2022, included in Noncurrent deferred tax assets and Other noncurrent assets ($2 million) and Other taxes payable ($192 million).
[2] Primarily included in Provision for taxes on income.
v3.25.0.1
Financial Instruments (Credit Facilities) (Details)
Dec. 31, 2024
USD ($)
Dec. 31, 2023
USD ($)
Line of Credit Facility [Line Items]    
Line of credit facility, maximum borrowing capacity $ 50,000,000  
Revolving Credit Facility    
Line of Credit Facility [Line Items]    
Revolving credit facility, current borrowing capacity 1,000,000,000.0  
Line of credit facility, maximum borrowing capacity 1,500,000,000  
Borrowings outstanding $ 0  
Line Of Credit For General Corporate Purpose    
Line of Credit Facility [Line Items]    
Borrowings outstanding   $ 3,000,000
Operational Efficiency    
Line of Credit Facility [Line Items]    
Maximum total leverage ratio 3.50  
Maximum total leverage ratio, next 12 months 4.00  
v3.25.0.1
Financial Instruments (Commercial Paper Program and Other Short-Term Borrowings) (Details) - USD ($)
Dec. 31, 2024
Feb. 28, 2013
Short-term Debt [Line Items]    
Commercial paper issued under program $ 0  
Commercial Paper    
Short-term Debt [Line Items]    
Capacity of commercial paper program   $ 1,000,000,000.0
v3.25.0.1
Financial Instruments (Senior Notes and Other Long-Term Debt) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Feb. 01, 2023
Nov. 08, 2022
Sep. 12, 2017
Nov. 13, 2015
Jan. 28, 2013
Debt Instrument [Line Items]              
Debt, principal amount $ 6,650 $ 6,650          
Current portion of long-term debt $ 1,350 0          
Financial Instruments
9. Financial Instruments
A. Debt
Credit Facilities
In December 2022, we entered into an amended and restated revolving credit agreement with a syndicate of banks providing for a multi-year $1.0 billion senior unsecured revolving credit facility (the credit facility), which expires in December 2027. Subject to certain conditions, we have the right to increase the credit facility up to $1.5 billion. The credit facility contains a financial covenant requiring us to not exceed a maximum total leverage ratio (the ratio of consolidated net debt as of the end of the period to consolidated Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) for such period) of 3.50:1. Upon entering into a material acquisition, the maximum total leverage ratio increases to 4.00:1, and extends until the fourth full consecutive fiscal quarter ended immediately following the consummation of a material acquisition. In addition, the credit facility contains other customary covenants.
We were in compliance with all financial covenants as of December 31, 2024 and 2023. There were no amounts drawn under the credit facility as of December 31, 2024 and 2023.
We have additional lines of credit and other credit arrangements with a group of banks and other financial intermediaries for general corporate purposes. We maintain cash and cash equivalent balances in excess of our outstanding short-term borrowings. As of December 31, 2024, we had access to $50 million of lines of credit which expire at various times and are generally renewed annually. As of December 31, 2024 we had no borrowings outstanding related to these facilities and $3 million borrowings outstanding related to these facilities as of December 31, 2023.
Commercial Paper Program
In February 2013, we entered into a commercial paper program with a capacity of up to $1.0 billion. As of December 31, 2024 and 2023, there was no commercial paper outstanding under this program.
Senior Notes and Other Long-Term Debt
On November 8, 2022, we issued $1.35 billion aggregate principal amount of our senior notes (2022 senior notes), with an original issue discount of $2 million. These notes are comprised of $600 million aggregate principal amount of 5.400% senior notes due 2025 and $750 million aggregate principal amount of 5.600% senior notes due 2032. On February 1, 2023, the net proceeds were used to redeem in full, upon maturity, the $1.35 billion aggregate principal amount of our 3.250% 2013 senior notes due 2023.
Our senior notes are governed by an indenture and supplemental indentures (collectively, the indenture) between us and Deutsche Bank Trust Company Americas, as trustee. The indenture contains certain covenants, including limitations on our and certain of our subsidiaries' ability to incur liens or engage in sale lease-back transactions. The indenture also contains restrictions on our ability to consolidate, merge or sell substantially all of our assets. In addition, the indenture contains other customary terms, including certain events of default, upon the occurrence of which the senior notes may be declared immediately due and payable.
Pursuant to the indenture, we are able to redeem the senior notes of any series, in whole or in part, at any time by paying a “make whole” premium, plus accrued and unpaid interest to, but excluding, the date of redemption. Upon the occurrence of a change of control of us and a downgrade of the senior notes below an investment grade rating by each of Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, we are, in certain circumstances, required to make an offer to repurchase all of the outstanding senior notes at a price equal to 101% of the aggregate principal amount of the senior notes together with accrued and unpaid interest to, but excluding, the date of repurchase.
The components of our long-term debt are as follows:
As of December 31,
(MILLIONS OF DOLLARS)20242023
4.500% 2015 senior notes due 2025
$750 $750 
5.400% 2022 senior notes due 2025
600 600 
3.000% 2017 senior notes due 2027
750 750 
3.900% 2018 senior notes due 2028
500 500 
2.000% 2020 senior notes due 2030
750 750 
5.600% 2022 senior notes due 2032
750 750 
4.700% 2013 senior notes due 2043
1,150 1,150 
3.950% 2017 senior notes due 2047
500 500 
4.450% 2018 senior notes due 2048
400 400 
3.000% 2020 senior notes due 2050
500 500 
6,650 6,650 
Unamortized debt discount / debt issuance costs(54)(60)
Less current portion of long-term debt1,350 — 
Cumulative fair value adjustment for interest rate swap contracts(26)(26)
Long-term debt, net of discount and issuance costs$5,220 $6,564 
The fair value of our long-term debt was $6,097 million and $6,319 million as of December 31, 2024 and 2023, respectively, and has been determined using a third-party model that uses significant inputs derived from, or corroborated by, observable market data and Zoetis’ credit rating (Level 2 inputs). See Note 3. Significant Accounting Policies— Fair Value.
The following table provides the principal amount of debt outstanding as of December 31, 2024 by scheduled maturity date. The table also provides the expected interest payments on these borrowings as of December 31, 2024.
After
(MILLIONS OF DOLLARS)202520262027202820292029Total
Maturities$1,350 $— $750 $500 $— $4,050 $6,650 
Interest payments $272 $206 $206 $183 $164 $1,863 $2,894 
Interest Expense
Interest expense, net of capitalized interest, was $225 million, $239 million and $221 million for 2024, 2023 and 2022, respectively. Capitalized interest expense was $39 million, $27 million and $21 million for 2024, 2023 and 2022, respectively.
B. Derivative Financial Instruments
Foreign Exchange Risk
A significant portion of our revenue, earnings and net investment in foreign affiliates is exposed to changes in foreign exchange rates. We seek to manage our foreign exchange risk, in part, through operational means, including managing same-currency revenue in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. Depending on market conditions, foreign exchange risk is also managed through the use of various derivative financial instruments. These derivative financial instruments serve to manage the exposure of our net investment in certain foreign operations to changes in foreign exchange rates and protect net income against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.
All derivative financial instruments used to manage foreign currency risk are measured at fair value and are reported as assets or liabilities on the Consolidated Balance Sheets. The derivative financial instruments primarily offset exposures in the Australian dollar, British pound, Canadian dollar, Chinese renminbi, euro and Norwegian krone. Changes in fair value are reported in earnings or in Accumulated other comprehensive loss, depending on the nature and purpose of the financial instrument, as follows:
•For foreign currency forward-exchange contracts not designated as hedging instruments, we recognize the gains and losses that are used to offset the same foreign currency assets or liabilities immediately into earnings along with the earnings impact of the items they generally offset. These contracts essentially take the opposite currency position of that reflected in the month-end balance sheet to counterbalance the effect of any currency movement. The vast majority of the foreign currency forward-exchange contracts mature within 60 days and all mature within three years.
•For foreign exchange derivative instruments that are designated as hedging instruments against our net investment in foreign operations, changes in the fair value are recorded as a component of cumulative translation adjustment within Accumulated other comprehensive loss and reclassified into earnings when the foreign investment is sold or substantially liquidated. These instruments include cross-currency interest rate swaps and foreign currency forward-exchange contracts. Gains and losses excluded from the assessment of hedge effectiveness are recognized in earnings (Interest expense—net of capitalized interest). The cash flows from these contracts are reflected within the investing section of our Consolidated Statements of Cash Flows. These contracts have varying maturities of up to three years.
Interest Rate Risk
The company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rates and to reduce its overall cost of borrowing.
•In anticipation of issuing fixed-rate debt, we may use forward-starting interest rate swaps that are designated as cash flow hedges to hedge against changes in interest rates that could impact expected future issuances of debt. Unrealized gains or losses on the forward-starting interest rate swaps are reported in Accumulated other comprehensive loss and are recognized in earnings over the life of the future fixed rate notes. When the company discontinues hedge accounting because it is no longer probable that an anticipated transaction will occur within the originally expected period of execution, or within an additional two-month period thereafter, changes to fair value accumulated in other comprehensive income are recognized immediately in earnings.
•During the period from 2019 to 2022, we entered into forward-starting interest rate swaps with an aggregate notional value of $650 million. We designated these swaps as cash flow hedges against interest rate exposure related principally to the issuance of fixed-rate debt to refinance our 3.250% 2013 senior notes due 2023. Upon issuance of our 2022 senior notes, we terminated these contracts and received $114 million in cash from the counterparties for settlement, included in Net cash provided by operating activities in the Consolidated Statements of Cash Flows. The settlement amount, which represented the fair value of the contracts at the time of termination, was recorded in Accumulated other comprehensive loss, and will be amortized into income over the life of the 5.600% 2022 senior notes due 2032.
•As of December 31, 2024, we had outstanding forward-starting interest rate swaps, having an effective date and mandatory termination date in March 2026, to hedge against interest rate exposure related principally to the anticipated future issuance of fixed-rate debt to be used primarily to refinance our 4.500% 2015 senior notes due 2025.
•We may use fixed-to-floating interest rate swaps that are designated as fair value hedges to hedge against changes in the fair value of certain fixed-rate debt attributable to changes in the benchmark the Secured Overnight Financing Rate (SOFR). These derivative instruments effectively convert a portion of the company’s long-term debt from fixed-rate to floating-rate debt based on the daily SOFR rate plus a spread. Gains or losses on the fixed-to-floating interest rate swaps due to changes in SOFR are recorded in Interest expense, net of capitalized interest. Changes in the fair value of the fixed-to-floating interest rate swaps are offset by changes in the fair value of the underlying fixed-rate debt. As of December 31, 2024, we had outstanding fixed-to-floating interest rate swaps that correspond to a portion of the 3.900% 2018 senior notes due 2028 and the 2.000% 2020 senior notes due 2030. The amounts recorded during 2024 for changes in the fair value of these hedges are not material to our consolidated financial statements.
During the first quarter of 2023, we executed amendments to certain of our interest rate swap contract, which changed the floating rate index from LIBOR to SOFR. These amendments did not have a material impact on our consolidated financial statements.
Outstanding Positions
The aggregate notional amount of derivative instruments are as follows:
Notional
As of December 31,
(MILLIONS)20242023
Derivatives not Designated as Hedging Instruments
     Foreign currency forward-exchange contracts$2,070 $1,948 
Derivatives Designated as Hedging Instruments
     Foreign exchange derivative instruments (in foreign currency):
         Euro800 650 
         Danish krone475 600 
         Swiss franc25 25 
     Forward-starting interest rate swaps $300 $100 
     Fixed-to-floating interest rate swap contracts$250 $250 
Fair Value of Derivative Instruments
The classification and fair values of derivative instruments are as follows:
Fair Value of Derivatives
As of December 31,
(MILLIONS OF DOLLARS)Balance Sheet Location20242023
Derivatives Not Designated as Hedging Instruments:
   Foreign currency forward-exchange contractsOther current assets$18 $11 
   Foreign currency forward-exchange contractsOther current liabilities (6)(11)
Total derivatives not designated as hedging instruments12 — 
Derivatives Designated as Hedging Instruments:
   Forward-starting interest rate swap contractsOther non-current assets$26 $12 
   Foreign exchange derivative instrumentsOther current assets55 5 
   Foreign exchange derivative instrumentsOther non-current assets4 11 
   Foreign exchange derivative instrumentsOther current liabilities— (20)
   Foreign exchange derivative instrumentsOther non-current liabilities— (1)
   Fixed-to-floating interest rate swap contractsOther non-current liabilities(26)(26)
Total derivatives designated as hedging instruments59 (19)
Total derivatives$71 $(19)
The company’s derivative transactions are subject to master netting agreements that mitigate credit risk by permitting net settlement of transactions with the same counterparty. The company also has collateral security agreements with certain of its counterparties. Under these collateral security agreements either party is required to post cash collateral when the net fair value of derivative instruments covered by the collateral agreement exceeds contractually established thresholds. At December 31, 2024, there was $51 million of collateral received and $20 million posted related to derivative instruments recorded in Other current liabilities and Other current assets, respectively. At December 31, 2023, there was $13 million of collateral received and $33 million of collateral posted related to derivative instruments recorded in Other current liabilities and Other current assets, respectively.
We use a market approach in valuing financial instruments on a recurring basis. Our derivative financial instruments are measured at fair value on a recurring basis using Level 2 inputs in the calculation of fair value. See Note 3. Significant Accounting Policies— Fair Value.
The amounts of net losses on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions - net, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Foreign currency forward-exchange contracts$(11)$(25)
These amounts were substantially offset in Other (income)/deductions—net by the effect of changing exchange rates on the underlying foreign currency exposures.
The amounts of unrecognized net gains/(losses) on interest rate swap contracts, recorded, net of tax, in Accumulated other comprehensive loss, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Forward starting interest rate swap contracts$11 $2 
Foreign exchange derivative instruments$44 $(23)
Gains on interest rate swap contracts, recognized within Interest expense, net of capitalized interest, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20242023
Foreign exchange derivative instruments$17 $19 
The net amount of deferred losses related to derivative instruments designated as cash flow hedges that is expected to be reclassified from Accumulated other comprehensive loss into earnings over the next 12 months is not material.
            
Senior Notes              
Debt Instrument [Line Items]              
Debt, purchase price percent due to downgrade of investment grade             101.00%
Senior Notes | 3.900% 2018 senior notes due 2028              
Debt Instrument [Line Items]              
Debt, principal amount $ 500 500          
Debt, stated interest percentage rate         3.90%    
Senior Notes | 4.450% 2018 senior notes due 2048              
Debt Instrument [Line Items]              
Debt, principal amount 400 400          
Debt, stated interest percentage rate         4.45%    
Senior Notes | 3.000% 2017 senior notes due 2027              
Debt Instrument [Line Items]              
Debt, principal amount 750 750          
Debt, stated interest percentage rate         3.00%    
Senior Notes | 3.950% 2017 senior notes due 2047              
Debt Instrument [Line Items]              
Debt, principal amount 500 500          
Debt, stated interest percentage rate         3.95%    
Senior Notes | Senior Notes 2.000% Due 2030              
Debt Instrument [Line Items]              
Debt, principal amount 750 750          
Debt, stated interest percentage rate         2.00%    
Senior Notes | Senior Notes 3.000% Due 2050              
Debt Instrument [Line Items]              
Debt, principal amount 500 500          
Debt, stated interest percentage rate         3.00%    
Senior Notes | 3.250% 2013 senior notes due 2023              
Debt Instrument [Line Items]              
Debt, principal amount     $ 1,350        
Debt, stated interest percentage rate             3.25%
Senior Notes | 4.500% 2015 senior notes due 2025              
Debt Instrument [Line Items]              
Debt, principal amount 750 750          
Debt, stated interest percentage rate           4.50%  
Senior Notes | 4.700% 2013 senior notes due 2043              
Debt Instrument [Line Items]              
Debt, principal amount 1,150 1,150          
Debt, stated interest percentage rate             4.70%
Senior Notes | 2022 Senior Notes              
Debt Instrument [Line Items]              
Debt, principal amount       $ 1,350      
Debt, unamortized discount       $ 2      
Senior Notes | 5.600% Senior Notes Due 2032              
Debt Instrument [Line Items]              
Debt, principal amount 750 750          
Debt, stated interest percentage rate       5.60%      
Senior Notes | 5.400% Senior Notes Due 2025              
Debt Instrument [Line Items]              
Debt, principal amount $ 600 $ 600          
Debt, stated interest percentage rate       5.40%      
v3.25.0.1
Financial Instruments (Schedule of Long-term Debt) (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Feb. 01, 2023
Sep. 12, 2017
Nov. 13, 2015
Jan. 28, 2013
Debt Instrument [Line Items]            
Debt, principal amount $ 6,650 $ 6,650        
Unamortized debt discount / debt issuance costs (54) (60)        
Less current portion of long-term debt 1,350 0        
Cumulative fair value adjustment for interest rate swap contracts (26) (26)        
Long-term debt, net of discount and issuance costs 5,220 6,564        
Senior Notes | 3.250% 2013 senior notes due 2023            
Debt Instrument [Line Items]            
Debt, stated interest percentage rate           3.25%
Debt, principal amount     $ 1,350      
Senior Notes | 4.500% 2015 senior notes due 2025            
Debt Instrument [Line Items]            
Debt, stated interest percentage rate         4.50%  
Debt, principal amount 750 750        
Senior Notes | 3.000% 2017 senior notes due 2027            
Debt Instrument [Line Items]            
Debt, stated interest percentage rate       3.00%    
Debt, principal amount 750 750        
Senior Notes | 3.900% 2018 senior notes due 2028            
Debt Instrument [Line Items]            
Debt, stated interest percentage rate       3.90%    
Debt, principal amount 500 500        
Senior Notes | 4.700% 2013 senior notes due 2043            
Debt Instrument [Line Items]            
Debt, stated interest percentage rate           4.70%
Debt, principal amount 1,150 1,150        
Senior Notes | 3.950% 2017 senior notes due 2047            
Debt Instrument [Line Items]            
Debt, stated interest percentage rate       3.95%    
Debt, principal amount 500 500        
Senior Notes | 4.450% 2018 senior notes due 2048            
Debt Instrument [Line Items]            
Debt, stated interest percentage rate       4.45%    
Debt, principal amount 400 400        
Fair Value, Inputs, Level 2            
Debt Instrument [Line Items]            
Fair value, debt instrument $ 6,097 $ 6,319        
v3.25.0.1
Financial Instruments (Fair Value of Debt) (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Fair Value, Inputs, Level 2    
Debt Instrument [Line Items]    
Fair value, debt instrument $ 6,097 $ 6,319
v3.25.0.1
Financial Instruments (Long-term Debt Maturity) (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Maturities    
2025 $ 1,350  
2026 0  
2027 750  
2028 500  
2029 0  
After 2029 4,050  
Total 6,650 $ 6,650
Interest payments    
2025 272  
2026 206  
2027 206  
2028 183  
2029 164  
After 2029 1,863  
Total $ 2,894  
v3.25.0.1
Financial Instruments (Interest Expense) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Debt Disclosure [Abstract]      
Interest expense, net of capitalized interest $ 225 $ 239 $ 221
Capitalized interest expense $ 39 $ 27 $ 21
v3.25.0.1
Financial Instruments (Foreign Exchange Risk) (Details)
€ in Millions, kr in Millions, SFr in Millions, $ in Millions
Dec. 31, 2024
USD ($)
Dec. 31, 2024
EUR (€)
Dec. 31, 2024
DKK (kr)
Dec. 31, 2024
CHF (SFr)
Dec. 31, 2023
USD ($)
Dec. 31, 2023
EUR (€)
Dec. 31, 2023
DKK (kr)
Dec. 31, 2023
CHF (SFr)
Cross-currency interest rate swap contracts                
Derivative [Line Items]                
Aggregate notional amount $ 250 € 800 kr 475 SFr 25 $ 250 € 650 kr 600 SFr 25
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Forward                
Derivative [Line Items]                
Aggregate notional amount $ 2,070       $ 1,948      
v3.25.0.1
Financial Instruments (Interest Rate Risk) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Sep. 12, 2017
Nov. 13, 2015
Derivative Instruments and Hedging Activities Disclosures [Line Items]        
Less current portion of long-term debt $ 1,350 $ 0    
Debt, principal amount 6,650 6,650    
Derivative, Cash Received on Hedge 114      
Senior Notes | 4.500% 2015 senior notes due 2025        
Derivative Instruments and Hedging Activities Disclosures [Line Items]        
Debt, stated interest percentage rate       4.50%
Debt, principal amount 750 750    
Senior Notes | Senior Notes 2.000% Due 2030        
Derivative Instruments and Hedging Activities Disclosures [Line Items]        
Debt, stated interest percentage rate     2.00%  
Debt, principal amount 750 750    
Senior Notes | Senior Notes 3.000% Due 2050        
Derivative Instruments and Hedging Activities Disclosures [Line Items]        
Debt, stated interest percentage rate     3.00%  
Debt, principal amount $ 500 $ 500    
v3.25.0.1
Financial Instruments (Derivative Notional Amounts) (Details)
€ in Millions, kr in Millions, SFr in Millions, $ in Millions
Dec. 31, 2024
USD ($)
Dec. 31, 2024
EUR (€)
Dec. 31, 2024
DKK (kr)
Dec. 31, 2024
CHF (SFr)
Dec. 31, 2023
USD ($)
Dec. 31, 2023
EUR (€)
Dec. 31, 2023
DKK (kr)
Dec. 31, 2023
CHF (SFr)
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments                
Derivative [Line Items]                
Derivative, notional amount $ 2,070       $ 1,948      
Cross-currency interest rate swap contracts                
Derivative [Line Items]                
Derivative, notional amount 250 € 800 kr 475 SFr 25 250 € 650 kr 600 SFr 25
Interest Rate Swap                
Derivative [Line Items]                
Derivative, notional amount 300       $ 100      
Interest Rate Swap | Derivatives Designated as Hedging Instruments                
Derivative [Line Items]                
Derivative, notional amount $ 650              
v3.25.0.1
Financial Instruments (Fair Value of Derivative Instruments) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Derivatives, Fair Value [Line Items]      
Total foreign currency forward-exchange contracts $ (71) $ 19  
Unrecognized net gains/(losses) on derivative instruments [1] 44 (23) $ 36
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments      
Derivatives, Fair Value [Line Items]      
Total foreign currency forward-exchange contracts (12) 0  
Gain (loss) on derivative contracts not designated as hedging instruments $ (11) (25)  
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments | Maximum      
Derivatives, Fair Value [Line Items]      
Derivative, Term of Contract 3 years    
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments | Minimum      
Derivatives, Fair Value [Line Items]      
Derivative, Term of Contract 60 days    
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments | Other current assets      
Derivatives, Fair Value [Line Items]      
Derivative Asset, Fair Value, Gross Asset $ 18 11  
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments | Other current liabilities      
Derivatives, Fair Value [Line Items]      
Foreign currency forward-exchange contracts 6 11  
Forward Starting Interest Rate Swap Contract [Member] | Derivatives Designated as Hedging Instruments | Other Noncurrent Assets [Member]      
Derivatives, Fair Value [Line Items]      
Total foreign currency forward-exchange contracts (26) (12)  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments      
Derivatives, Fair Value [Line Items]      
Unrecognized net gains/(losses) on derivative instruments 44 (23)  
Gains/(losses) on derivative instruments 17 19  
Collateral received 20 33  
Additional Collateral, Aggregate Fair Value $ 51 13  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Maximum      
Derivatives, Fair Value [Line Items]      
Derivative, Term of Contract 3 years    
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Other current assets      
Derivatives, Fair Value [Line Items]      
Derivative Asset, Fair Value, Gross Asset $ 55 5  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Other current liabilities      
Derivatives, Fair Value [Line Items]      
Foreign currency forward-exchange contracts 0 (20)  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Other Noncurrent Assets [Member]      
Derivatives, Fair Value [Line Items]      
Derivative Asset, Fair Value, Gross Asset 4 11  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Other non-current liabilities      
Derivatives, Fair Value [Line Items]      
Foreign currency forward-exchange contracts 0 (1)  
Forward starting interest rate swap contracts | Derivatives Designated as Hedging Instruments      
Derivatives, Fair Value [Line Items]      
Foreign currency forward-exchange contracts 59 19  
Unrecognized net gains/(losses) on derivative instruments 11 2  
zts_FixedtoFloatInterestRateSwap | Derivatives Designated as Hedging Instruments | Other non-current liabilities      
Derivatives, Fair Value [Line Items]      
Derivative Asset, Fair Value, Gross Asset $ (26) $ (26)  
[1] Presented net of reclassification adjustments, which are not material in any period presented. Reclassification adjustments related to benefit plans are generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, general and administrative expenses, and/or Research and development expenses, as appropriate, in the Consolidated Statements of Income.
v3.25.0.1
Leases (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Lessee, Lease, Description [Line Items]      
Operating lease right of use assets $ 219 $ 230  
Finance Lease, Right-of-Use Asset, after Accumulated Amortization 9 9  
Lease, Right-Of-Use Asset 228 239  
Operating lease liabilities - current (in Other current liabilities) 51 48  
Operating lease liabilities - noncurrent $ 174 $ 188  
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Other noncurrent liabilities Other noncurrent liabilities  
Finance Lease, Liability, Current $ 1 $ 1  
Finance Lease, Liability, Noncurrent 7 8  
Lease, Liability 233 245  
Operating lease expense 59 56 $ 51
Variable lease payments not included in the measurement of lease liabilities 18 20 12
Short-term lease payments not included in the measurement of lease liabilities 13 11 12
Finance Lease, Right-of-Use Asset, Amortization 1 1 0
Cash paid for amounts included in the measurement of lease liabilities:      
Operating cash flows – operating leases 61 57 51
Financing cash flows – finance leases 1 0 0
Lease obligations obtained in exchange for right-of-use assets - operating (non-cash) 46 73 99
Lease obligations obtained in exchange for right-of-use assets – finance (non-cash) $ 0 $ 9 0
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Other noncurrent assets Other noncurrent assets  
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Other current liabilities Other current liabilities  
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Other current liabilities Other current liabilities  
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Other noncurrent liabilities Other noncurrent liabilities  
Lease, Cost $ 91 $ 88 $ 75
Total operating lease liabilities $ 225    
Weighted-average remaining lease term—operating leases (years) 6 years 6 months 25 days 7 years 3 months 3 days  
Finance Lease, Weighted Average Remaining Lease Term 29 years 2 months 8 days 30 years 3 months 7 days  
Weighted-average discount rate—operating leases 3.65% 3.41%  
Finance Lease, Weighted Average Discount Rate, Percent 4.97% 4.99%  
2025 $ 59    
2026 50    
2027 39    
2028 29    
2029 18    
After 2025 63    
Total Lease Payments 258    
Less: Imputed Interest (33)    
Less: Imputed Interest (4)    
Finance Lease, Liability 8    
Finance Lease, Liability, to be Paid 12    
Finance Lease, Liability, to be Paid, after Year Five 7    
Finance Lease, Liability, to be Paid, Year Five 1    
Finance Lease, Liability, to be Paid, Year Four 1    
Finance Lease, Liability, to be Paid, Year Three 1    
Finance Lease, Liability, to be Paid, Year Two 1    
Finance Lease, Liability, to be Paid, Year One $ 1    
Minimum      
Lessee, Lease, Description [Line Items]      
Lessee, Operating Lease, Term of Contract 1 year    
Maximum      
Lessee, Lease, Description [Line Items]      
Lessee, Operating Lease, Term of Contract 14 years    
Lessee, Finance Lease, Remaining Lease Term 29 years    
v3.25.0.1
Inventories (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Inventory Disclosure [Abstract]    
Finished goods $ 996 $ 1,147
Work-in-process 933 966
Raw materials and supplies 377 451
Inventories $ 2,306 $ 2,564
v3.25.0.1
Property, Plant and Equipment (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]      
Land $ 28 $ 25  
Buildings 1,292 1,316  
Machinery, equipment and fixtures 3,353 3,372  
Construction-in-progress 1,353 1,085  
Total property, plant and equipment, gross 6,026 5,798  
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment 2,635 2,594  
Property, plant and equipment 3,391 3,204  
Depreciation expense $ 327 $ 306 $ 272
Building | Minimum      
Property, Plant and Equipment [Line Items]      
Estimated useful life (in years) 33 years    
Machinery and Equipment | Minimum      
Property, Plant and Equipment [Line Items]      
Estimated useful life (in years) 3 years    
Machinery and Equipment | Maximum      
Property, Plant and Equipment [Line Items]      
Estimated useful life (in years) 20 years    
v3.25.0.1
Goodwill and Other Intangible Assets (Goodwill) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Goodwill [Roll Forward]    
Beginning balance $ 2,759 $ 2,746
Additions / Adjustments   38
Goodwill, Transfers   (9)
Other (35) (16)
Ending balance 2,724 2,759
Adjustments for the derecognition of goodwill related to the sale 24  
United States    
Goodwill [Roll Forward]    
Beginning balance 1,532 1,485
Additions / Adjustments   24
Goodwill, Transfers   25
Other (17) (2)
Ending balance 1,515 1,532
International    
Goodwill [Roll Forward]    
Beginning balance 1,227 1,261
Additions / Adjustments   14
Goodwill, Transfers   (34)
Other (18) (14)
Ending balance $ 1,209 $ 1,227
v3.25.0.1
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]    
Gross goodwill $ 3,260 $ 3,295
Accumulated goodwill impairment losses $ 536  
v3.25.0.1
Goodwill and Other Intangible Assets (Finite-lived and Indefinite-lived Intangible Assets) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Finite-lived intangible assets, Gross Carrying Amount $ 2,536 $ 2,639  
Finite-lived intangible assets, Accumulated Amortization (1,618) (1,537)  
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization 918 1,102  
Indefinite-lived intangible assets: 209 236  
Intangible Assets, Gross Carrying Amount 2,745 2,875  
Identifiable Intangible Assets, Less Accumulated Amortization $ 1,127 1,338  
Weighted average life our finite lived intangible assets 8 years 2 months 12 days    
Amortization expense of finite-lived intangible assets $ 170 185 $ 193
2025 154    
2026 147    
2027 143    
2028 114    
2029 77    
Brands and tradenames(a)      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Indefinite-lived intangible assets: 66 88  
In Process Research and Development      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Indefinite-lived intangible assets: 136 141  
Product rights      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Indefinite-lived intangible assets: 7 7  
Developed Technology Rights      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Finite-lived intangible assets, Gross Carrying Amount 1,891 1,986  
Finite-lived intangible assets, Accumulated Amortization (1,175) (1,101)  
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization 716 885  
Brands and tradenames(a)      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Finite-lived intangible assets, Gross Carrying Amount 367 383  
Finite-lived intangible assets, Accumulated Amortization (246) (246)  
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization 121 137  
Other Intangible Assets      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Finite-lived intangible assets, Gross Carrying Amount 278 270  
Finite-lived intangible assets, Accumulated Amortization (197) (190)  
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization $ 81 $ 80  
v3.25.0.1
Benefit Plans (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Defined Benefit Plan Disclosure [Line Items]      
Actuarial losses $ 3 $ 4  
Actuarial losses, net of tax 2 4  
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
Service cost 5 5 $ 6
Interest cost 5 5 2
Expected return on plan assets (4) (4) (3)
Amortization of net losses 0 0 1
Settlement and curtailments (gains) / losses 1 0 0
Net periodic benefit cost 7 6 6
Company contributions 6 6  
Contribution expense $ 79 69 57
Matching percentage 100.00%    
Maximum matching percentage 5.00%    
Additional contribution percentage, minimum 0.00%    
Additional contribution percentage, maximum 8.00%    
Pension Plan      
Defined Benefit Plan Disclosure [Line Items]      
Pension and other postretirement benefit expense $ 7 6 12
Other Pension Plan, Postretirement or Supplemental Plans      
Defined Benefit Plan Disclosure [Line Items]      
Pension and other postretirement benefit expense 3 11 (9)
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
2025 5    
Defined Benefit Plan, Expected Future Benefit Payment, Thereafter 43    
United States      
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
Postretirement benefit expense $ 0 $ 0 $ 4
Foreign Plan      
Defined Benefit Plan Disclosure [Line Items]      
Period of amortization 9 years 9 months 18 days    
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
Expected contribution in 2025 $ 6    
2025 6    
2026 10    
2027 7    
2028 6    
2029 13    
Thereafter $ 51    
v3.25.0.1
Benefit Plans Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]      
Projected benefit obligation, beginning $ 129 $ 122  
Service cost 5 5 $ 6
Interest cost 5 5 2
Changes in actuarial assumptions and other 9 (4)  
Settlements and curtailments (2) 0  
Benefits paid (4) (3)  
Adjustments for foreign currency translation (5) 5  
Other––net (1) (1)  
Benefit obligation, ending 136 129 122
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of plan assets, beginning 86 [1] 78  
Actual return on plan assets 12 3  
Company contributions 6 6  
Settlements and curtailments (3) 0  
Benefits paid (4) (3)  
Adjustments for foreign currency translation (3) 2  
Other––net 0 0  
Fair value of plan assets, ending 94 [1] 86 [1] $ 78
Funded status—Projected benefit obligation in excess of plan assets at end of year [2] $ (42) $ (43)  
[1] Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 3. Significant Accounting Policies—Fair Value). Investment plan assets are valued using Level 1 or Level 2 inputs.
[2] .
v3.25.0.1
Benefit Plans Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Pension plans with an accumulated benefit obligation in excess of plan assets:    
Fair value of plan assets $ 9 $ 8
Accumulated benefit obligation 50 45
Pension plans with a projected benefit obligation in excess of plan assets:    
Projected benefit obligation 55 109
Pension Plan    
Pension plans with a projected benefit obligation in excess of plan assets:    
Fair value of plan assets $ 9 $ 64
v3.25.0.1
Benefit Plans Schedule of Assumptions Used (Details)
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Weighted average assumptions used to determine benefit obligations: [Abstract]      
Discount rate 3.50% 4.20% 3.70%
Rate of compensation increase 3.50% 3.60% 3.50%
Cash balance credit interest rate 1.70% 1.60% 1.70%
Weighted average assumptions used to determine net benefit cost for the year ended December 31:      
Discount rate 4.20% 3.70% 1.40%
Expected return on plan assets 4.60% 4.70% 3.30%
Rate of compensation increase 3.60% 3.50% 3.40%
Cash balance credit interest rate 1.60% 1.70% 1.50%
v3.25.0.1
Benefit Plans Schedule of Allocation of Plan Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Defined Benefit Plan Disclosure [Line Items]      
Plan assets $ 94 [1] $ 86 [1] $ 78
Cash and cash equivalents      
Defined Benefit Plan Disclosure [Line Items]      
Plan assets 1 1  
Equity securities: Equity commingled funds      
Defined Benefit Plan Disclosure [Line Items]      
Plan assets 37 34  
Debt securities: Government bonds      
Defined Benefit Plan Disclosure [Line Items]      
Plan assets 46 40  
Other investments      
Defined Benefit Plan Disclosure [Line Items]      
Plan assets $ 10 $ 11  
[1] Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 3. Significant Accounting Policies—Fair Value). Investment plan assets are valued using Level 1 or Level 2 inputs.
v3.25.0.1
Benefit Plans Schedule Of Percentage Of Allocation Of Plan Assets Table (Details)
Dec. 31, 2024
Dec. 31, 2023
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 100.00%  
Cash and cash equivalents, percentage 1.40% 1.70%
Equity securities, percentage 39.20% 39.40%
Debt securities, percentage 48.40% 46.90%
Other investments, percentage 11.00% 12.00%
Total, percentage 100.00% 100.00%
Maximum | Cash and cash equivalents    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 10.00%  
Maximum | Equity securities: Equity commingled funds    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 60.00%  
Maximum | Debt securities: Government bonds    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 100.00%  
Maximum | Other investments    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 100.00%  
Minimum | Cash and cash equivalents    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 0.00%  
Minimum | Equity securities: Equity commingled funds    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 0.00%  
Minimum | Debt securities: Government bonds    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 15.00%  
Minimum | Other investments    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 0.00%  
v3.25.0.1
Share-Based Payments (Narrative) (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Shares of stock approved and registered with the SEC 30,000,000    
Shares available for future grant 13,000,000    
Period following separation service 60 days    
Expected stock price volatility [1] 26.99% 28.63% 27.64%
Stock Options      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Exercise price percentage of the fair market value price at date of grant 100.00%    
Award vesting period (in years) 3 years    
Contractual term (in years) 10 years    
Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax $ 11    
Weighted-average period over which RSU cost is expected to be recognized (in years) 8 months    
Restricted Stock Units (RSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting period (in years) 3 years    
Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax $ 45    
Weighted-average period over which RSU cost is expected to be recognized (in years) 8 months    
Granted (in shares) 256,149    
Shares outstanding 324,151    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value $ 194.75    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number 556,106 655,851  
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Graded Vesting Period 3 years    
Deferred Stock Units (DSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Granted (in shares) 0    
Shares outstanding 66,318 65,654  
PSUs      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax $ 27    
Weighted-average period over which RSU cost is expected to be recognized (in years) 1 year 2 months 12 days    
Granted (in shares) 101,099    
Shares outstanding 82,688    
Expected stock price volatility 26.20% 38.10%  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value $ 268.71    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number 256,567 251,780  
PSUs | Peer Companies      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected stock price volatility 30.60% 40.90%  
PSUs | Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Percentage of target units 0.00%    
PSUs | Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Percentage of target units 200.00%    
[1] Determined using an equal weighting between historical volatility of the Zoetis stock price and implied volatility. The selection of the blended historical and implied volatility approach was based on our assessment that this calculation of expected volatility is more representative of future stock price trends.
v3.25.0.1
Share-Based Payments (Components of share-based compensation expense) (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense—total [1] $ 74 $ 60 $ 62
Tax benefit for share-based compensation expense (9) (8) (8)
Share-based compensation expense, net of tax 65 52 54
Share-based compensation expense capitalized (less than) $ 1 1 1
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price $ 195.49    
Deferred Stock Units (DSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Granted (in shares) 0    
Stock options / stock appreciation rights      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense $ 11 8 10
RSUs / DSUs      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense [2] $ 42 37 34
PSUs      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Granted (in shares) 101,099    
Share-based compensation expense $ 21 $ 15 $ 18
[1] For each of the years ended December 31, 2024, 2023 and 2022, we capitalized up to $1 million of share-based compensation expense to inventory
[2]
v3.25.0.1
Share-Based Payments (Stock option valuation assumptions) (Details)
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]      
Expected dividend yield [1] 0.87% 0.92% 0.64%
Risk-free interest rate [2] 4.06% 3.84% 1.81%
Expected stock price volatility [3] 26.99% 28.63% 27.64%
Expected term (in years) [4] 4 years 1 month 6 days 4 years 2 months 12 days 4 years 10 months 24 days
[1] Determined using a constant dividend yield during the expected term of the Zoetis stock option.
[2] Determined using the interpolated yield on U.S. Treasury zero-coupon issues.
[3] Determined using an equal weighting between historical volatility of the Zoetis stock price and implied volatility. The selection of the blended historical and implied volatility approach was based on our assessment that this calculation of expected volatility is more representative of future stock price trends.
[4] Determined using expected exercise and post-vesting termination patterns.
v3.25.0.1
Share-Based Payments (Stock option activity) (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Shares      
Outstanding, Beginning Balance (in shares) 1,526,502    
Granted (in shares) 276,086    
Exercised (in shares) (315,736)    
Forfeited (in shares) (38,903)    
Outstanding, Ending Balance (in shares) 1,447,949 1,526,502  
Weighted-average Exercise Price Per Share      
Outstanding, Beginning Balance (in dollars per share) $ 119.13    
Granted (in dollars per share) 195.49    
Exercised (in dollars per share) 64.82    
Forfeited (in dollars per share) 182.58    
Outstanding, Ending Balance (in dollars per share) $ 143.83 $ 119.13  
Outstanding, Weighted-average Remaining Contractual Term (in years) 6 years    
Outstanding, Aggregate Intrinsic Value [1] $ 43,065,332    
Exercisable, December 31, 2024 846,647    
Exercisable, Weighted Average Exercise Price Per Share $ 112.36    
Exercisable, Weighted Average Remaining Contractual Term (in years) 4 years 4 months 24 days    
Vested and expected to vest, Aggregate Intrinsic Value [1] $ 42,923,962    
Weighted-average grant date fair value per stock option $ 50.77 $ 43.56 $ 51.13
Aggregate intrinsic value on exercise $ 40 $ 81 $ 31
Cash received upon exercise 20 42 15
Share-based Payment Arrangement, Exercise of Option, Tax Benefit $ 17 $ 17 $ 19
[1] Market price of underlying Zoetis common stock less exercise price.
v3.25.0.1
Share-Based Payments (Nonvested restricted stock activity) (Details) - Restricted Stock Units (RSUs)
 12 Months Ended
Dec. 31, 2024
$ / shares
shares
RSUs  
Nonvested, Beginning Balance (in shares) | shares 655,851
Granted (in shares) | shares 256,149
Vested (in shares) | shares (324,151)
Reinvested dividend equivalents (in shares) | shares 6,288
Forfeited (in shares) | shares (38,031)
Nonvested, Ending Balance (in shares) | shares 556,106
Weighted Average Grant Date Fair Value Per Share  
Nonvested, Beginning Balance (in dollars per share) | $ / shares $ 173.49
Granted (in dollars per share) | $ / shares 194.75
Vested (in dollars per share) | $ / shares 165.08
Reinvested dividend equivalents (in dollars per share) | $ / shares 182.21
Forfeited (in dollars per share) | $ / shares 182.84
Nonvested, Ending Balance (in dollars per share) | $ / shares $ 187.61
v3.25.0.1
Share-Based Payments (Performance Share Awards (PSAs) Activity) (Details) - PSUs
 12 Months Ended
Dec. 31, 2024
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Shares, Issued | shares 78,230
RSUs  
Nonvested, Beginning Balance (in shares) | shares 251,780
Granted (in shares) | shares 101,099
Vested (in shares) | shares (82,688)
Reinvested dividend equivalents (in shares) | shares 2,742
Forfeited (in shares) | shares (16,366)
Nonvested, Ending Balance (in shares) | shares 256,567
Weighted Average Grant Date Fair Value Per Share  
Nonvested, Beginning Balance (in dollars per share) | $ / shares $ 228.99
Granted (in dollars per share) | $ / shares 268.71
Vested (in dollars per share) | $ / shares 213.05
Reinvested dividend equivalents (in dollars per share) | $ / shares 243.86
Forfeited (in dollars per share) | $ / shares 248.41
Nonvested, Ending Balance (in dollars per share) | $ / shares 248.68
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ / shares $ 208.87
v3.25.0.1
Stockholders' Equity - Changes in Common Shares and Treasury Stock (Details) - USD ($)
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Class of Stock [Line Items]      
Common stock, shares authorized 6,000,000,000 6,000,000,000  
Preferred stock, authorized (in shares) 1,000,000,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]      
Beginning Balance 501,891,243 501,900,000 501,900,000
Stock-based compensation   0 0
Share repurchase program   0 0
Treasury Stock (600,000) (900,000) (700,000)
Ending Balance 501,891,243 501,891,243 501,900,000
December 2021 Share Repurchase Program [Member]      
Class of Stock [Line Items]      
Shares authorized under repurchase program $ 3,500,000,000    
August 2024 Share Repurchase Program      
Class of Stock [Line Items]      
Shares authorized under repurchase program $ 6,000,000,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]      
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased 5,600,000,000    
Share Repurchase Program      
Increase (Decrease) in Stockholders' Equity [Roll Forward]      
Treasury Stock (10,500,000) (6,300,000) (9,500,000)
v3.25.0.1
Stockholders' Equity - Accumulated other comprehensive income/ (loss) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Beginning balance $ (839)      
Other comprehensive gain/(loss), net of tax [1] (101) $ (22) $ (53)  
Ending balance (940) (839)    
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest 4,770 4,991 4,403 $ 4,544
Accumulated Other Comprehensive (Loss)/ Income        
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Other comprehensive gain/(loss), net of tax (101) (22) (53)  
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest (940) (839) (817) (764)
Derivatives Net Unrealized Losses        
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Other comprehensive gain/(loss), net of tax 4 (5) 86  
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest 89 85 90 $ 4
Accumulated Other Comprehensive Income (Loss), Derivative Qualifying as Hedge, Excluded Component, Including Portion Attributable to Noncontrolling Interest [Member]        
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Beginning balance 18 41 5  
Other comprehensive gain/(loss), net of tax 44 (23) 36  
Ending balance 62 18 41  
Currency Translation Adjustment, Net Unrealized Losses        
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Beginning balance (944) (944) (756)  
Other comprehensive gain/(loss), net of tax (147) 0 (188)  
Ending balance (1,091) (944) (944)  
Benefit Plans, Actuarial Gains/ (Losses)        
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Beginning balance 2 (4) (17)  
Other comprehensive gain/(loss), net of tax (2) 6 13  
Ending balance $ 0 $ 2 $ (4)  
[1] Presented net of reclassification adjustments, which are not material in any period presented. Reclassification adjustments related to benefit plans are generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, general and administrative expenses, and/or Research and development expenses, as appropriate, in the Consolidated Statements of Income.
v3.25.0.1
Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Numerator      
Net income before allocation to noncontrolling interests $ 2,496 $ 2,340 $ 2,111
Less: net income/(loss) attributable to noncontrolling interests 10 (4) (3)
Net income attributable to Zoetis Inc. $ 2,486 $ 2,344 $ 2,114
Denominator      
Weighted-average common shares outstanding 454,200 461,172 468,891
Common stock equivalents: stock options, RSUs, DSUs and PSUs 648 1,097 1,494
Weighted-average common and potential dilutive shares outstanding 454,848 462,269 470,385
Earnings per share attributable to Zoetis Inc. stockholders—basic (in dollars per share) $ 5.47 $ 5.08 $ 4.51
Earnings per share attributable to Zoetis stockholders—diluted (in dollars per share) $ 5.47 $ 5.07 $ 4.49
v3.25.0.1
Commitments and Contingencies (Details)
$ in Millions
 1 Months Ended 6 Months Ended
Apr. 30, 2012
Jun. 30, 2016
USD ($)
Feb. 29, 2012
defendant
Ulianopolis, Brazil      
Loss Contingencies [Line Items]      
Number of additional defendants     5
Number of claims seeking damages     6
Number of years lawsuit suspended 1 year    
European Commission      
Loss Contingencies [Line Items]      
Income Tax Examination, Penalties and Interest Expense | $   $ 35  
v3.25.0.1
Commitments and Contingencies - Purchase Commitments (Details)
$ in Millions
Dec. 31, 2024
USD ($)
Loss Contingencies [Line Items]  
Purchase Obligation, to be Paid, Year One $ 210
Purchase Obligation 512
Long Term Purchase Commitment  
Loss Contingencies [Line Items]  
Purchase Obligation $ 302
v3.25.0.1
Segment Information (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2024
USD ($)
segment
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Segment Reporting Information [Line Items]      
Number of Operating Segments | segment 2    
Assets $ 14,237 $ 14,286  
Impairment Charges      
Segment Reporting Information [Line Items]      
Restructuring and Other Cost Productivity Charges 24   $ 47
Segment Reconciling Items | Zoetis Initiatives      
Segment Reporting Information [Line Items]      
Restructuring and Other Cost Productivity Charges $ 43 $ 4  
v3.25.0.1
Segment Information - Income Statement Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Segment Reporting Information [Line Items]      
Revenues $ 9,256 $ 8,544 $ 8,080
Segment Reconciling Items | Zoetis Initiatives      
Segment Reporting Information [Line Items]      
Restructuring and Other Cost Productivity Charges 43 4  
International Segment | Operating Segments      
Segment Reporting Information [Line Items]      
Revenues [1] 4,102 3,911 3,681
International Segment | Euro Member Countries, Euro | Operating Segments      
Segment Reporting Information [Line Items]      
Revenues $ 937 $ 853 $ 774
[1] Operating expenses primarily consisted of field selling, advertising and promotions, other marketing expenses, and freight and logistics costs.
(c) Revenue denominated in euros was $937 million in 2024, $853 million in 2023 and $774 million in 2022.
v3.25.0.1
Segment Information - Income Statement (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Segment Reporting Information [Line Items]      
Revenues $ 9,256 $ 8,544 $ 8,080
Cost of Sales [1] 2,719 2,561 2,454
Other (income)/deductions-net 19 159 (40)
Earnings [2] 3,133 2,936 2,656
Depreciation and Amortization [2],[3] 497 491 465
Property, plant and equipment, less accumulated depreciation 3,391 3,204  
Gain (Loss) on Disposition of Business (23) 101 0
Pumpkin Insurance Services      
Segment Reporting Information [Line Items]      
Gain (Loss) on Disposition of Business 101    
Other business activities      
Segment Reporting Information [Line Items]      
Earnings (562) (496) (424)
Depreciation and Amortization [3] 43 33 28
United States      
Segment Reporting Information [Line Items]      
Revenues 5,074 4,555 4,313
Property, plant and equipment, less accumulated depreciation 2,249 2,092  
International      
Segment Reporting Information [Line Items]      
Property, plant and equipment, less accumulated depreciation 1,142 1,112  
Operating Segments      
Segment Reporting Information [Line Items]      
Earnings 5,454 4,900 4,753
Depreciation and Amortization [3] 181 172 141
Operating Segments | United States Segment      
Segment Reporting Information [Line Items]      
Revenues 5,074 4,555 4,313
Cost of Sales 936 900 803
Gross Profit $ 4,138 $ 3,655 $ 3,510
Gross Margin 81.60% 80.20% 81.40%
Operating expenses $ 805 $ 786 $ 765
Other (income)/deductions-net (3) 6 (18)
Earnings 3,336 2,863 2,763
Depreciation and Amortization [3] 85 80 55
Operating Segments | International Segment      
Segment Reporting Information [Line Items]      
Revenues [4] 4,102 3,911 3,681
Cost of Sales 1,312 1,234 1,083
Gross Profit $ 2,790 $ 2,677 $ 2,598
Gross Margin 68.00% 68.40% 70.60%
Operating expenses $ 671 $ 638 $ 611
Other (income)/deductions-net 1 2 (3)
Earnings 2,118 2,037 1,990
Depreciation and Amortization [3] 96 92 86
Corporate, Non-Segment      
Segment Reporting Information [Line Items]      
Earnings (1,213) (1,042) (1,073)
Depreciation and Amortization [3] 128 128 132
Segment Reconciling Items      
Segment Reporting Information [Line Items]      
Purchase accounting adjustments, earnings (140) (159) (160)
Purchase accounting adjustments, depreciation and amortization [3] 140 153 159
Certain significant items, earnings [5] (79) 33 (56)
Certain significant items, depreciation and amortization [3],[5] 0 0 0
Other unallocated, earnings (309) (291) (379)
Other unallocated, deprecation and amortization [3] 5 5 5
Business Combination, Acquisition And Divesture Related Costs (18) (9) (5)
Acquisition And Divestiture Depreciation, Depletion and Amortization [3] $ 0 $ 0 $ 0
[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] 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.
[4] Operating expenses primarily consisted of field selling, advertising and promotions, other marketing expenses, and freight and logistics costs.
(c) Revenue denominated in euros was $937 million in 2024, $853 million in 2023 and $774 million in 2022.
[5] For 2024, certain significant items primarily consisted of employee termination costs related to organizational structure refinements, a net loss related to the sale
of our medicated feed additive product portfolio, certain water soluble products and related assets, as well as asset impairment charges related to our aquaculture business, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
For 2023, certain significant items primarily consisted of a gain on the sale of a majority interest in our pet insurance business of $101 million, partially offset by employee termination and exit costs related to organizational structure refinements of $43 million and certain asset impairment charges primarily related to our precision animal health and diagnostics businesses of $24 million.
For 2022, certain significant items primarily represents inventory and asset impairment charges related to customer relationships, developed technology rights and property, plant and equipment in our diagnostics, poultry, cattle and swine businesses and the consolidation of manufacturing sites in China of $47 million, as well as employee termination and exit costs associated with cost-reduction and productivity initiatives in certain international markets of $4 million.
v3.25.0.1
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Balance, Beginning of Period $ 18 $ 19 $ 17
Additions 3 0 4
Deductions (3) (1) (2)
Balance, End of Period $ 18 $ 18 $ 19