Zoetis Announces Second Quarter 2026 Results

Zoetis Announces Second Quarter 2026 Results

* Revenue Flat at $2.5 Billion and Net Income of $691 Million, or $1.65 per Diluted Share, Decreasing 5% and Increasing 1%, Respectively, on a Reported Basis

• Adjusted Net Income of $781 Million, or Adjusted Diluted EPS of $1.87

* Revenue and Adjusted Net Income Declined 1% and 2%, Respectively, on an Organic Operational Basis

* Revises Full Year 2026 Revenue Guidance to $9.120 - $9.320 Billion to Organic Operational Revenue Growth of (3)% to (1)%

* Revises Full Year 2026 Adjusted Net Income Guidance to Organic Operational Growth of (9)% to (5)%

• Revises Guidance for Adjusted Diluted EPS to $6.15 - $6.25

Zoetis Inc. (NYSE:ZTS), the world's leading animal health company, today reported its financial results for the second quarter of 2026.

The company reported revenue of $2.5 billion for the second quarter of 2026, flat compared with the second quarter of 2025, decreasing 1% on an organic operational(1) basis. Net income for the second quarter of 2026 was $691 million, or $1.65 per diluted share, decreasing 5% and growing 1%, respectively, on a reported basis.

Adjusted net income(2) for the second quarter of 2026 was $781 million, or $1.87 per diluted share, decreasing 1% and increasing 5%, respectively, on a reported basis, decreasing 2% and increasing 4%, respectively, on an organic operational basis. Adjusted net income for the second quarter of 2026 excludes the net impact of $90 million for purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items.

"Second quarter results reflected a more pressured Companion Animal market, as lower clinic visits and pet owner price sensitivity reduced demand across parts of our portfolio and heightened competition in key categories," said Kristin Peck, Chief Executive Officer of Zoetis. "At the same time, these dynamics reinforce the enduring attractiveness of the markets Zoetis has helped define and advance. We are adapting our commercial strategy to the marketplace in front of us, deploying targeted investments, accelerating innovation, and pursuing business development to strengthen our position in areas aligned with the future of animal health. We also continue to benefit from the breadth of our diversified portfolio, including strength in Livestock and Diagnostics. As we advance our robust pipeline, including more than 12 potential blockbusters over the coming years, we are acting with urgency and remain confident in the long-term fundamentals of animal health and in Zoetis' ability to compete, lead, and create shareholder value."

SEGMENT HIGHLIGHTS

Zoetis organizes and manages its commercial operations across two segments: United States (U.S.) and International. Within these segments, the company delivers a diverse portfolio of products for companion animals and livestock, tailored to local trends and customer needs. In the second quarter of 2026:

* Revenue in the U.S. segment totaled $1.3 billion, decreasing 7% on both a reported and an organic operational basis relative to the second quarter of 2025. Companion animal product sales decreased 11% due to continued softer end-market demand. The company's key dermatology franchise and Simparica Trio(®) faced persistent macro-driven price sensitivity and heightened competitive pressure. Also contributing to the decline was the impact of generic competition on the Cerenia(® )and Convenia(®) brands, as well as lower sales of Librela(®). Sales of livestock products increased 23% on both a reported and organic operational basis in the quarter, supported by strength across cattle and poultry. Cattle performance was underpinned by favorable producer economics in beef cattle and supply timing. Poultry performance benefited from increased vaccine sales tied to disease outbreak activity.

* Revenue in the International segment was $1.2 billion, increasing 8% on a reported basis and 6% on an organic operational basis compared with the second quarter of 2025. Companion animal product sales grew 8% on a reported basis and 5% on an organic operational basis, led by the company's parasiticides portfolio, including Simparica Trio, along with contributions from Revolution(®) and Stronghold(®). Also contributing to growth was companion animal diagnostics, as well as osteoarthritis (OA) pain with the launch of Lenivia(®) and Portela™, the company's long-acting monoclonal antibody pain products that provide dogs and cats with up to three months of pain relief. These gains were partially offset by lower sales of key dermatology products as well as challenging market conditions impacting the broader portfolio. Sales of livestock products grew 8% on a reported basis and 6% on an organic operational basis, driven by growth in cattle and poultry.

INVESTMENTS IN GROWTH

Zoetis continued to advance innovation across its diversified portfolio, including a pipeline with more than 12 potential blockbuster(3) candidates in areas such as chronic kidney disease, oncology, cardiology, anxiety and obesity. During the quarter, the company advanced major-market approvals, expanded access to industry-leading treatments in new geographies, enhanced diagnostics capabilities, and delivered solutions to support customers facing emerging and transboundary infectious disease threats. Together, these efforts reflect Zoetis' focus on translating science, global scale and customer insights into solutions that improve the health of companion animals and livestock around the world.

Delivering on Commitment to Innovation

Zoetis is executing on its commitment to deliver a significant approval in a major market every year for the next several years. In July, the company received marketing authorization from the European Commission for Poulvac(®) Procerta(®) HVT-ND. This approval reinforces Zoetis’ focus on ensuring a stable and reliable protein supply, helping protect poultry production against Newcastle and Marek’s disease.

Lenivia and Portela, long-acting monoclonal antibody therapies providing dogs and cats with up to three months of OA pain relief from a single injection, launched in Canada and the EU and were approved in Great Britain. Lenivia was also approved in Switzerland.

Supporting Prevention and Treatment of New World Screwworm

With New World screwworm now confirmed in the United States, Zoetis has been well prepared to support customers’ prevention and treatment strategies. Dectomax(®)-CA1, the first parasite control product to receive FDA conditional approval for the prevention and treatment of New World screwworm myiasis in beef cattle, together with Dectomax(®), received emergency use authorization in the U.S. for prevention of infestations in swine, sheep, deer, horses, lactating and dry dairy cows, and dairy replacement heifers. This response underscores Zoetis’ long-standing support for a One Health approach and its ability to deliver targeted solutions when disease threats affect animals, customers, and the broader food supply.

Additional approvals from the quarter include:

* Vanguard(®) crLyme received a label update in the U.S. for effectiveness against subclinical arthritis caused by Borrelia burgdorferi, representing a significant pipeline acceleration.

* Bonqat(®), an oral medication to help alleviate acute anxiety and fear associated with transportation and veterinary visits in cats, was approved in China.

* Synovex(®) One Grower gained an expanded label approval in the U.S. to increase the rate of weight gain in growing beef steers and heifers in dry lots or on pasture with insufficient forage.

* Suvaxyn(®) PRRS Needle-Free Microdose, a vaccine that helps prevent porcine reproductive and respiratory syndrome, was approved in the EU. This approval includes a needle free intramuscular administration claim and a new multidose presentation.

* Fostera(®) Gold PVC MH Flex, a vaccine to help prevent infection from Mycoplasma hyopneumoniae and Porcine circovirus, was approved in Japan.

Accelerating Diagnostics Capabilities

In July, Zoetis completed the acquisition of VitalRADS, a veterinary teleradiology services platform. This milestone advances Zoetis’ strategic pursuit of opportunities that unlock new sources of growth by expanding its Global Diagnostics offering with around-the-clock access to board-certified veterinary specialists through a cloud-based teleradiology platform. The acquisition will extend Zoetis’ capabilities beyond in-vitro testing into veterinary imaging interpretation and advance its vision of a more complete end-to-end Virtual Reference Lab.

Zoetis also expanded the capabilities of Vetscan Opticell™, making it the first and only point of care hematology analyzer to offer cellular hemoglobin mean – previously available only in reference laboratories. This expansion adds greater diagnostic depth in clinics and delivers value to veterinary teams through time, cost, and space savings.

Together, these investments strengthen Zoetis’ diagnostics capabilities and reinforce the company’s differentiated position in animal health with scale across both diagnostics and therapeutics.

Advancing Sustainability in Animal Health for a Better Future

In June, Zoetis published its 2025 Sustainability Report, marking the completion of its initial Driven to Care aspirations set in 2021 and introducing the strategy’s next phase, with an even sharper focus across Communities, Animals and the Planet. The report also highlighted that the Zoetis Foundation fulfilled its commitment to distribute $35 million in grants from 2021 to 2025, helping strengthen the animal health ecosystem by advancing opportunities for veterinary professionals and livestock farmers.

FINANCIAL GUIDANCE

Zoetis is providing updated guidance based on the current operating environment.

* Revenue of $9.120 billion to $9.320 billion (organic operational growth of (3)% to (1)%)

• Reported net income of $2.330 billion to $2.380 billion

* Adjusted net income of $2.570 billion to $2.620 billion (organic operational growth of (9)% to (5)%)

• Reported diluted EPS of $5.55 to $5.65

• Adjusted diluted EPS of $6.15 to $6.25

This guidance reflects foreign exchange rates as of July 21, 2026. Additional details on guidance are included in the financial tables and will be discussed on the company's conference call.

WEBCAST & CONFERENCE CALL DETAILS

Zoetis will host a webcast and conference call today at 8:30 a.m. ET to review second quarter 2026 results, discuss financial guidance and respond to questions from financial analysts. The live webcast and corresponding slides can be accessed by visiting https://investor.zoetis.com/events-presentations . A replay of the webcast will be available following the event.

About Zoetis

Zoetis is the world’s leading animal health company, driven by a singular purpose: to nurture our world and humankind by advancing care for animals. With a legacy of nearly 75 years, Zoetis continues to pioneer ways to predict, prevent, detect, and treat animal illness, supporting veterinarians, livestock producers, and pet owners in over 100 countries. We integrate deep scientific expertise, data-driven R&D, advanced manufacturing, and commercial excellence to deliver meaningful innovation across medicines, vaccines, diagnostics, biopharmaceuticals, and digital solutions. Guided by our vision to be the most trusted and valued animal health company, Zoetis is committed to setting new standards for the future of animal care through innovation, customer obsession, and purpose-driven colleagues. To learn more, visit Zoetis.com.

(1 )Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures.

(2 )Adjusted net income and its components and adjusted diluted earnings per share (non-GAAP financial measures) are defined as reported net income and reported diluted earnings per share, excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items.

(3) A blockbuster has annual sales of at least $100 million.

DISCLOSURE NOTICES

Forward-Looking Statements: This press release contains forward-looking statements, which reflect the current views of Zoetis with respect to: business plans or prospects, future operating or financial performance, future guidance, future operating models; R&D costs; timing and likelihood of success; expectations regarding products, product approvals or products under development and expected timing of product launches; expectations regarding competing products; expectations regarding financial impact of divestitures; disruptions in our global supply chain; expectations regarding the performance of acquired companies and our ability to integrate new businesses; expectations regarding the financial impact of acquisitions; future use of cash, dividend payments and share repurchases; foreign exchange rates, tax rates, tariffs, changes in tax regimes and laws and any changes thereto; possible impacts of the Fiscal Year Alignment; and other future events. These statements are not guarantees of future performance or actions. Forward-looking statements are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, or if management's underlying assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. Forward-looking statements speak only as of the date on which they are made. Zoetis expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A further list and description of risks, uncertainties and other matters can be found in our most recent Annual Report on Form 10-K, including in the sections thereof captioned “Forward-Looking Statements and Factors That May Affect Future Results” and “Item 1A. Risk Factors,” in our Quarterly Reports on Form 10-Q and in our Current Reports on Form 8-K. These filings and subsequent filings are available online at www.sec.gov , www.zoetis.com , or on request from Zoetis.

Use of Non-GAAP Financial Measures: We use non-GAAP financial measures, such as adjusted net income, adjusted diluted earnings per share, operational results (which exclude the impact of foreign exchange) and organic operational results (which exclude the impact of foreign exchange and certain acquisitions and divestitures), to assess and analyze our results and trends and to make financial and operational decisions. We believe these non-GAAP financial measures are also useful to investors because they provide greater transparency regarding our operating performance. The non-GAAP financial measures included in this press release should not be considered alternatives to measurements required by GAAP, such as net income, operating income, and earnings per share, and should not be considered measures of liquidity. These non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. Reconciliations of non-GAAP financial measures and the most directly comparable GAAP financial measures are included in the tables accompanying this press release and are posted on our website at www.zoetis.com .

Internet Posting of Information: We routinely post information that may be important to investors on the 'Investor Relations' section of our website at www.zoetis.com , as well as on LinkedIn , Facebook , X (formerly Twitter) (link) and YouTube . We encourage investors and potential investors to consult our website regularly and to follow us on social media for company news and information.

ZTS-COR

ZTS-IR

ZTS-FIN ZOETIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

See Notes to Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for notes (1) and (2).

See Notes to Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for notes (1) and (2).

ZOETIS INC.

NOTES TO RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

CERTAIN LINE ITEMS

(UNAUDITED)

(millions of dollars)

(1) Acquisition and divestiture-related costs include the following: Three Months Ended   Six Months Ended June 30,   June 30, 2026   2025   2026   2025 Acquisition-related costs((a)) $ 2   $ 1   $ 4   $ 1 Total acquisition and divestiture-related costs—pre-tax   2     1     4     1 Income taxes((b))   —     —     1     — Total acquisition and divestiture-related costs—net of tax $ 2   $ 1   $ 3   $ 1 (a) Acquisition-related costs represent external, incremental costs that directly relate to transacting and integrating businesses, included in Restructuring charges and certain acquisition and divestiture-related costs. (b) Included in Provision for taxes on income. Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction's applicable tax rate.

For the three and six months ended June 30, 2025, primarily consisted of employee termination costs related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, included in Restructuring charges and certain acquisition and divestiture-related costs. (b) Represents costs related to our multi-year business process transformation program, which includes the implementation of a new enterprise resource planning (ERP) system, related digital technology solutions and other related costs, included in Selling, general and administrative expenses and Cost of sales. This comprehensive program is a major global and cross-functional company-wide effort that we believe will transform how we work across our business and contribute to all of our strategic priorities. Due to the nature, scope and magnitude of this investment, these costs are incremental transformational costs that are far in excess of the historical normal level of spending to support operations and are not expected to recur in the foreseeable future. (c) Represents certain asset impairment charges related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, included in Restructuring charges and certain acquisition and divestiture-related costs, as well as charges related to our aquaculture product portfolio included in Other (income)/deductions–net. (d) Represents a net loss related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets sold in 2024, included in Other (income)/deductions–net. (e) Included in Provision for taxes on income. Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction's applicable tax rate.

ZOETIS INC.

ADJUSTED SELECTED COSTS, EXPENSES AND INCOME((a))

(UNAUDITED)

(millions of dollars) Three Months Ended June 30,   % Change 2026   2025   Reported Change     Foreign Exchange   Operational((b))     Divestitures   Organic Operational((c)) Adjusted cost of sales   $ 669     $ 661     1 %     3 %   (2 )% as a percent of revenue     27.1 %     26.7 %   NA     NA   NA Adjusted SG&A expenses     586       603     (3 )%     1 %   (4 )% Adjusted R&D expenses     173       165     5 %     1 %   4 % Adjusted net income     781       791     (1 )%     1 %   (2 )%     — %   (2 )% Six Months Ended June 30,   % Change 2026   2025   Reported Change     Foreign Exchange   Operational((b))     Divestitures   Organic Operational((c)) Adjusted cost of sales   $ 1,307     $ 1,278     2 %     6 %   (4 )% as a percent of revenue     27.6 %     27.4 %   NA     NA   NA Adjusted SG&A expenses     1,171       1,168     — %     2 %   (2 )% Adjusted R&D expenses     352       327     8 %     2 %   6 % Adjusted net income     1,427       1,424     — %     1 %   (1 )%     — %   (1 )% (a) Adjusted cost of sales, adjusted selling, general, and administrative (SG&A) expenses, adjusted research and development (R&D) expenses, and adjusted net income (non-GAAP financial measures) are defined as the corresponding reported U.S. GAAP income statement line items excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items. These adjusted income statement line item measures are not, and should not be viewed as, substitutes for the corresponding U.S. GAAP line items. The corresponding GAAP line items and reconciliations of reported to adjusted information are provided in Condensed Consolidated Statements of Income and Reconciliation of GAAP Reported to Non-GAAP Adjusted Information. (b) Operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange. (c) Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures.

ZOETIS INC.

2026 GUIDANCE Selected Line Items Full Year 2026 Full Year 2026

(millions of dollars, except per share amounts) as of August 6, 2026 as of May 7, 2026

Reconciliations of 2026 reported guidance to 2026 adjusted guidance follows: (millions of dollars, except per share amounts) Reported Certain significant items and acquisition and divestiture-related costs((d)) Purchase accounting Adjusted((b)) Cost of sales as a percentage of revenue ~ 29.2% ~ (0.2%)   ~ 29.0% SG&A expenses $2,350 to $2,400 ~ $(12) ~ $(8) $2,330 to $2,380 R&D expenses $722 to $732   ~ $(2) $720 to $730 Interest expense and other (income)/deductions-net ~ $215     ~ $215 Effective tax rate ~ 20.6% ~ (0.1%)   ~ 20.5% Diluted EPS $5.55 to $5.65 ~ $0.38 ~ $0.22 $6.15 to $6.25 Net income attributable to Zoetis $2,330 to $2,380 ~ $150 ~ $90 $2,570 to $2,620 (a) Organic operational results (a non-GAAP financial measure) excludes the impact of foreign exchange and certain acquisitions and divestitures. (b) Adjusted net income and its components and adjusted diluted EPS are defined as reported U.S. GAAP net income and its components and reported diluted EPS excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items. Adjusted cost of sales, adjusted SG&A expenses, adjusted R&D expenses, and adjusted interest expense and other (income)/deductions-net are income statement line items prepared on the same basis, and, therefore, components of the overall adjusted income measure. Despite the importance of these measures to management in goal setting and performance measurement, adjusted net income and its components and adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. Because of the non-standardized definitions, adjusted net income and its components and adjusted diluted EPS (unlike U.S. GAAP net income and its components and diluted EPS) may not be comparable to the calculation of similar measures of other companies. Adjusted net income and its components and adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance. Adjusted net income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS. (c) We do not provide a reconciliation of forward-looking non-GAAP adjusted net income operational results to the most directly comparable U.S. GAAP reported financial measure because we are unable to calculate with reasonable certainty the foreign exchange impact of unusual gains and losses, acquisition and divestiture-related expenses, potential future asset impairments and other certain significant items, without unreasonable effort. The foreign exchange impacts of these items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period. (d) Primarily includes certain nonrecurring costs related to acquisitions, divestitures and other charges.

ZOETIS INC. CONSOLIDATED REVENUE BY SEGMENT((a)) AND SPECIES (UNAUDITED) (millions of dollars)

CONSOLIDATED REVENUE BY SEGMENT((a)) AND SPECIES

(UNAUDITED)

ZOETIS INC.

CONSOLIDATED REVENUE BY KEY INTERNATIONAL MARKETS

(UNAUDITED)

ZOETIS INC. SEGMENT((a)) EARNINGS (UNAUDITED) (millions of dollars)

Three Months Ended June 30,   % Change 2026   2025   Reported Change     Foreign Exchange   Operational((b)) U.S.: Revenue $ 1,266   $ 1,356   (7 )% — % (7 )% Cost of Sales   214     208   3 % — % 3 % Gross Profit   1,052     1,148   (8 )% — % (8 )% Gross Margin   83.1 %   84.7 % Operating Expenses   215     218   (1 )% — % (1 )% Other (income)/deductions-net   —     —   * * * U.S. Earnings $ 837   $ 930   (10 )% — % (10 )% International: Revenue $ 1,173   $ 1,085   8 % 3 % 5 % Cost of Sales   340     321   6 % 4 % 2 % Gross Profit   833     764   9 % 3 % 6 % Gross Margin   71.0 %   70.4 % Operating Expenses   172     171   1 % 3 % (2 )% Other (income)/deductions-net   —     1   * * * International Earnings $ 661   $ 592   12 % 4 % 8 % Total Reportable Segments $ 1,498   $ 1,522   (2 )% 1 % (3 )% Other business activities((c))   (135 )   (129 ) 5 % Reconciling Items: Corporate((d))   (315 )   (324 ) (3 )% Purchase accounting adjustments((e))   (30 )   (33 ) (9 )% Acquisition and divestiture-related costs((f))   (2 )   (1 ) * Certain significant items((g))   (81 )   (48 ) 69 % Other unallocated((h))   (69 )   (75 ) (8 )% Total Earnings((i)) $ 866   $ 912   (5 )% (a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K. (b) Operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange. (c) Other business activities includes the research and development costs managed by our research and development organization, as well as our contract manufacturing business and human health business. (d) Corporate includes, among other things, certain costs associated with information technology, administration expenses, interest income and expense, certain compensation costs and other costs not charged to our operating segments. (e) Purchase accounting adjustments include certain charges related to the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment not charged to our operating segments. (f) Acquisition and divestiture-related costs include costs associated with acquiring and integrating newly acquired businesses, such as transaction costs and integration costs, as well as costs associated with divesting and disintegrating a portion of our business. (g) Certain significant items includes 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 items primarily include certain asset impairment charges, restructuring charges and implementation costs associated with cost-reduction/productivity initiatives that are not associated with an acquisition, costs related to our business process transformation program, as well as the impact of divestiture gains and losses. (h) Includes overhead expenses associated with our global manufacturing and supply operations not directly attributable to an operating segment, as well as certain procurement costs. (i) Defined as income before provision for taxes on income. * Calculation not meaningful. ZOETIS INC. SEGMENT((a)) EARNINGS (UNAUDITED) (millions of dollars) Six Months Ended June 30,   % Change 2026   2025   Reported Change     Foreign Exchange   Operational((b)) U.S.: Revenue $ 2,356   $ 2,539   (7 )% — % (7 )% Cost of Sales   408     407   — % — % — % Gross Profit   1,948     2,132   (9 )% — % (9 )% Gross Margin   82.7 %   84.0 % Operating Expenses   414     423   (2 )% — % (2 )% Other (income)/deductions-net   —     —   * * * U.S. Earnings $ 1,534   $ 1,709   (10 )% — % (10 )% International: Revenue $ 2,322   $ 2,070   12 % 5 % 7 % Cost of Sales   674     616   9 % 6 % 3 % Gross Profit   1,648     1,454   13 % 4 % 9 % Gross Margin   71.0 %   70.2 % Operating Expenses   347     334   4 % 5 % (1 )% Other (income)/deductions-net   1     1   * * * International Earnings $ 1,300   $ 1,119   16 % 5 % 11 % Total Reportable Segments $ 2,834   $ 2,828   — % 2 % (2 )% Other business activities((c))   (276 )   (262 ) 5 % Reconciling Items: Corporate((d))   (630 )   (602 ) 5 % Purchase accounting adjustments((e))   (58 )   (65 ) (11 )% Acquisition and divestiture-related costs((f))   (4 )   (1 ) * Certain significant items((g))   (108 )   (54 ) * Other unallocated((h))   (134 )   (159 ) (16 )% Total Earnings((i)) $ 1,624   $ 1,685   (4 )% (a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K. (b) Operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange. (c) Other business activities includes the research and development costs managed by our research and development organization, as well as our contract manufacturing business and human health business. (d) Corporate includes, among other things, certain costs associated with information technology, administration expenses, interest income and expense, certain compensation costs and other costs not charged to our operating segments. (e) Purchase accounting adjustments include certain charges related to the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment not charged to our operating segments. (f) Acquisition and divestiture-related costs include costs associated with acquiring and integrating newly acquired businesses, such as transaction costs and integration costs, as well as costs associated with divesting and disintegrating a portion of our business. (g) Certain significant items includes 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 items primarily include certain asset impairment charges, restructuring charges and implementation costs associated with cost-reduction/productivity initiatives that are not associated with an acquisition, costs related to our business process transformation program, as well as the impact of divestiture gains and losses. (h) Includes overhead expenses associated with our global manufacturing and supply operations not directly attributable to an operating segment, as well as certain procurement costs. (i) Defined as income before provision for taxes on income. * Calculation not meaningful.

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nick.soonthornchai@zoetis.com (mailto:nick.soonthornchai@zoetis.com)

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