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CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Thousands, $ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Statement [Abstract]      
Revenues $ 6,260 $ 5,825 $ 5,307
Costs and expenses:      
Cost of Sales [1] 1,992 1,911 1,775
Selling, general and administrative expenses [1] 1,638 1,484 1,334
Research and development expenses [1] 457 432 382
Amortization of intangible assets 155 117 91
Restructuring charges and certain acquisition-related costs 51 68 19
Interest expense, net of capitalized interest 223 206 175
Other (income)/deductions––net (57) (83) 6
Income before provision for taxes on income [2] 1,801 1,690 1,525
Provision for taxes on income [3],[4] 301 266 663
Net income before allocation to noncontrolling interests 1,500 1,424 862
Less: Net loss attributable to noncontrolling interests 0 (4) (2)
Net income attributable to Zoetis $ 1,500 $ 1,428 $ 864
Earnings per share attributable to Zoetis Inc. stockholders:      
Basic (in dollars per share) $ 3.14 $ 2.96 $ 1.76
Diluted (in dollars per share) $ 3.11 $ 2.93 $ 1.75
Weighted-average common shares outstanding:      
Basic (in shares) 478,128 483,063 489,918
Diluted (in shares) 481,787 486,898 493,161
Dividends declared per common share $ 0.692 $ 0.542 $ 0.441
[1]
Exclusive of amortization of intangible assets, except as disclosed in Note 3. Significant Accounting Policies—Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets.
[2]
Defined as income before provision for taxes on income.
[3]
In 2017, the Provision for taxes on income reflects the following:
the change in the jurisdictional mix of earnings, which includes the impact of the location of earnings from (i) operations and (ii) restructuring charges related to the operational efficiency initiative and supply network strategy, as well as repatriation costs. The jurisdictional mix of earnings can vary as a result of repatriation decisions and as a result of operating fluctuations in the normal course of business, the impact of non-deductible items and the extent and location of other income and expense items, such as restructuring charges/(benefits), asset impairments and gains and losses on asset divestitures;
a $212 million net discrete provisional tax expense recorded in the fourth quarter of 2017, related to the impact of the Tax Act enacted on December 22, 2017, including a one-time mandatory deemed repatriation tax, partially offset by a net tax benefit related to the remeasurement of the deferred tax assets and liabilities, as of the date of enactment, due to the reduction in the U.S. federal corporate tax rate;
U.S. tax benefit related to U.S. Research and Development Tax Credit and the U.S. Domestic Production Activities deduction;
a $15 million discrete tax benefit recorded in the fourth quarter of 2017 related to the effective settlement of certain issues with U.S. and non-U.S. tax authorities;
a $9 million discrete tax benefit recorded in 2017 related to the excess tax benefits for share-based compensation payments;
a $3 million discrete tax benefit recorded in the first quarter of 2017 related to a remeasurement of the company’s deferred tax assets and liabilities using the tax rates expected to be in place going forward;
tax expense related to the changes in valuation allowances and the resolution of other tax items; and
tax expense related to changes in uncertain tax positions (see D. Tax Contingencies).
[4]
In 2019, the Provision for taxes on income reflects the following:
the change in the jurisdictional mix of earnings, which includes the impact of the location of earnings from operations and repatriation costs. The jurisdictional mix of earnings can vary as a result of repatriation decisions, operating fluctuations in the normal course of business, the impact of non-deductible items, and the extent and location of other income and expense items, such as gains and losses on asset divestitures;
the impact of the GILTI tax, a new provision of the Tax Act, which became effective for the company in the first quarter of 2019;
a $20 million discrete tax benefit recorded in 2019 related to the excess tax benefits for share-based compensation payments;
an $18 million discrete tax benefit related to the changes in valuation allowances;
a $14 million net discrete tax benefit recorded in the third quarter of 2019, due to a change in tax basis related to purchase accounting;
a $12 million net discrete tax benefit recorded in 2019, related to changes in various other tax items;
an $8 million discrete tax benefit recorded in 2019 related to a remeasurement of deferred tax assets and liabilities as a result of a change in U.S. and non-U.S. statutory tax rates;
U.S. tax benefit related to U.S. Research and Development Tax Credit; and
tax expense related to changes in uncertain tax positions (see D. Tax Contingencies).
(b)  
In 2018, the Provision for taxes on income reflects the following:
the change in the jurisdictional mix of earnings, which includes the impact of the location of earnings from operations and repatriation costs. The jurisdictional mix of earnings can vary as a result of repatriation decisions, operating fluctuations in the normal course of business, the impact of non-deductible items, and the extent and location of other income and expense items, such as gains and losses on asset divestitures;
the reduction of the U.S. federal corporate income tax rate, from 35% to 21%, effective January 1, 2018, pursuant to the Tax Act;
a $45 million net tax benefit recorded in 2018, associated with a measurement-period adjustment to the one-time mandatory deemed repatriation tax on the company’s undistributed non-U.S. earnings pursuant to the Tax Act;
a $23 million discrete tax benefit recorded in 2018 related to the favorable impact of certain tax accounting method changes;
a $15 million discrete tax benefit recorded in 2018 related to the excess tax benefits for share-based compensation payments;
a $5 million discrete tax benefit recorded in 2018 related to a remeasurement of deferred tax assets and liabilities as a result of a change in non-U.S. statutory tax rates;
U.S. tax benefit related to U.S. Research and Development Tax Credit;
tax expense related to the changes in valuation allowances and the resolution of other tax items; and
tax expense related to changes in uncertain tax positions (see D. Tax Contingencies).