- First Quarter 2014 Revenue of $1.1
Billion Increased 1%, Compared to First Quarter 2013
- First Quarter 2014 Reported Net
Income of $155 Million, or Diluted EPS of $0.31, Increased 11%,
Compared to First Quarter 2013
- First Quarter 2014 Adjusted Net
Income of $191 Million, or Adjusted Diluted EPS1 of
$0.38, Increased 7% and 6%, Respectively, Compared to First Quarter
2013
- Company Reaffirms Full-Year 2014
Adjusted Diluted EPS1 Guidance of $1.48 -
$1.54
Zoetis Inc. (NYSE:ZTS) today reported its financial results for
the first quarter of 2014. The company reported revenue of $1.1
billion for the first quarter of 2014, an increase of 1% from the
first quarter of 2013. Revenue reflected an operational2 increase
of 4%, with foreign currency having a negative impact of 3
percentage points.
Net income for the first quarter of 2014 was $155 million, or
$0.31 per diluted share, an increase of 11%, compared to the first
quarter of 2013. Adjusted net income1 for the first quarter of 2014
was $191 million, or $0.38 per diluted share, an increase of 7% and
6%, respectively, compared to the first quarter of 2013. Adjusted
net income1 for the first quarter of 2014 excludes the net impact
of $36 million, or $0.07 per diluted share, for purchase accounting
adjustments, acquisition-related costs and certain significant
items.
EXECUTIVE COMMENTARY
"We began the year with 4% operational growth in revenue,
adjusted net income growing faster than sales, and we remain
confident in meeting our financial objectives for the year," said
Zoetis Chief Executive Officer Juan Ramón Alaix. “Despite some
challenges in the first quarter, we grew sales operationally in
three of our regional segments and across all our major species.
Our performance in the U.S. and across emerging markets helped
offset an operational decline in certain developed markets in
Europe and Asia-Pacific," said Alaix.
“The depth and diversity of our product portfolio remain core
strengths of our business, helping to minimize any challenges that
may occur within a single species, geography, product line or
therapeutic area,” said Alaix. “With our focus on innovative new
medicines and product lifecycle development, we have seen continued
adoption of new products and services in a number of new
markets.”
“In the first quarter, we continued to demonstrate an ability to
grow adjusted earnings faster than sales despite a higher tax rate,
cold weather in the U.S. impacting sales, and increased interest
expense,” said Glenn David, Senior Vice President of Finance
Operations and Acting Chief Financial Officer of Zoetis. “Given our
continued confidence in our business model, we are reaffirming our
guidance for the full year.”
QUARTERLY HIGHLIGHTS
Zoetis organizes and manages its business across four regional
operating segments: the United States (U.S.); Europe/Africa/Middle
East (EuAfME); Canada/Latin America (CLAR); and Asia/Pacific
(APAC). Within each of these regional segments, the company
delivers a diverse portfolio of products for livestock and
companion animals tailored to local trends and customer needs.
Effective this quarter, the company realigned its segment
reporting with respect to its Client Supply Services organization
(CSS), which provides contract manufacturing services to third
parties. The revenue and earnings associated with CSS are now
reported within other business activities, separate from the four
reportable segments. In 2013, CSS results were reported in the
EuAfME segment. The current presentation of segments is more
reflective of the company’s commercial business since CSS operates
differently from the company’s commercial operations within the
geographic segments. First quarter results for 2014 and 2013
reflect the new segment structure.
In the first quarter of 2014:
- Revenue in the U.S. was $479 million,
an increase of 6% compared to the first quarter of 2013. Sales of
livestock products grew 7%. Cattle products showed a significant
increase during the quarter based on improved market conditions.
Poultry product sales grew across the therapeutic areas and
benefited from new vaccines. And, swine products benefited from
continued growth in new products, tempered by the effect of Porcine
Epidemic Diarrhea virus (PEDv). Sales of companion animal products
grew 3% driven by the introduction of APOQUEL®; this growth was
tempered by a reduced number of pet owners visiting clinics due to
extreme winter weather, as well as a favorable impact in the
year-ago quarter due to a competitor supply issue.
- Revenue in EuAfME was $270 million, a
decrease of 4% operationally compared to the first quarter of 2013.
Sales of livestock products decreased 6% operationally. This is
primarily driven by a decline in the UK associated with one-time
impacts in the quarter; a decline in poultry products related to
regulatory issues that have been resolved; and a decline in swine
products linked to reductions in the use of anti-infectives. These
overall livestock declines were partially offset by growth of
cattle products in emerging markets. Sales of companion animal
products increased 1% operationally, primarily driven by the launch
of APOQUEL® in Germany and the UK, and the sale of parasiticides in
France, Italy and emerging markets.
- Revenue in CLAR was $168 million, an
increase of 10% operationally compared to the first quarter of
2013. Sales of livestock products grew 9% operationally, driven
largely by poultry products in Brazil, and cattle and swine product
sales across other Latin American markets. Sales of companion
animal products grew 15% operationally, primarily related to the
continued increase in medicalization rates in Brazil, Mexico and
Argentina.
- Revenue in APAC was $169 million, an
increase of 4% operationally compared to the first quarter of 2013.
Sales of livestock products grew 7% operationally, driven primarily
by sales of swine products in China and Japan, poultry products in
India, and cattle products in China; this growth was slightly
offset by a decline in cattle product sales in Japan, New Zealand
and Australia. Sales of companion animal products declined 2%
operationally largely due to declines in Australia.
Zoetis continues to drive demand and strengthen its diverse
portfolio of products through product lifecycle development, strong
customer relationships and access to new markets and technologies.
The company is focused on improving the performance and delivery of
its current product lines; expanding product indications across
species; pursuing approvals in new geographies; and developing
innovative medicines, treatments and solutions for emerging
diseases and unmet customer needs. Some recent examples
include:
- Expanding the
portfolio’s reach – Zoetis continues to support the launch
of new products in new markets and to expand the geographic reach
and lifecycle of its portfolio. APOQUEL® (oclacitinib tablet)
continues its rollout in the U.S., UK, Germany and certain other
markets. The product is approved for the control of pruritus
associated with allergic dermatitis and the control of atopic
dermatitis in dogs at least 12 months of age. Strong customer
demand has been outpacing initial supply and the company has
implemented plans to manage the situation. Separately, recently
launched vaccines like BOVISHIELD GOLD ONESHOT™, which helps
prevent certain bovine respiratory diseases, and FOSTERA™ PCV and
FOSTERA™ PRRS, which help prevent certain diseases in swine,
expanded into new geographies in Canada, Latin America, and
Thailand, respectively, in the first quarter.
- Advancing
standards of care – As a world leader in animal health,
Zoetis continues to partner with organizations that are advancing
and harmonizing the standard of care in markets around the world.
In April, Zoetis joined with the World Small Animal Veterinary
Association to form the African Small Companion Animal Network
(AFSCAN). AFSCAN will strive to build a network of companion animal
veterinarians, associations and specialist groups working together
to improve veterinary care in sub-Saharan Africa. Zoetis became the
sole animal health industry member of the AFSCAN Board.
FINANCIAL GUIDANCE AND
COMMENTARY
Zoetis's guidance for full-year 2014 reflects the company's
confidence in the diversity of its portfolio, the strength of its
business model, and its view of the evolving market conditions for
animal health products this year.
Zoetis reaffirmed its financial guidance for full year 2014:
- Revenue of between $4.65 billion to
$4.75 billion
- Reported diluted EPS for the full year
of between $1.15 to $1.21 per share
- Adjusted diluted EPS1 for the full year
between $1.48 to $1.54 per share
Additional guidance on other items such as expenses and
effective tax rate is included in the financial tables and will be
discussed on the company's conference call this morning.
WEBCAST & CONFERENCE CALL
DETAILS
Zoetis will host a webcast and conference call at 8:30 a.m.
(EDT) today, during which company executives will review first
quarter financial results and respond to questions from financial
analysts. Investors and the public may access the live webcast by
visiting the Zoetis website at
http://www.zoetis.com/events-and-presentations. A replay of the
webcast will be archived and made available on May 6, 2014.
About Zoetis
Zoetis (zô-EH-tis) is the leading animal health company,
dedicated to supporting its customers and their businesses.
Building on more than 60 years of experience in animal health,
Zoetis discovers, develops, manufactures and markets veterinary
vaccines and medicines, complemented by diagnostic products and
genetic tests and supported by a range of services. In 2013, the
company generated annual revenue of $4.6 billion. With
approximately 9,800 employees worldwide at the beginning of 2014,
Zoetis has a local presence in approximately 70 countries,
including 28 manufacturing facilities in 11 countries. Its products
serve veterinarians, livestock producers and people who raise and
care for farm and companion animals in 120 countries. For more
information, visit www.zoetis.com.
1 Adjusted net income and adjusted diluted earnings per share
(non-GAAP financial measures) are defined as reported net income
attributable to Zoetis and reported diluted earnings per share,
excluding purchase accounting adjustments, acquisition-related
costs and certain significant items.
2 Operational revenue growth is defined as revenue growth
excluding the impact of foreign exchange.
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, expectations
regarding products, future use of cash and dividend payments, 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 Annual Report on Form 10-K for the fiscal year ended
December 31, 2013, including in the sections thereof captioned
“Forward-Looking Information 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 and
adjusted diluted earnings per share, to assess and analyze our
operational 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. Reconciliation of non-GAAP financial
measures and 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 in
the 'Investors' section of our website at www.zoetis.com, on our Facebook page at
http://www.facebook.com/zoetis and on Twitter @zoetis. We encourage
investors and potential investors to consult our website regularly
and to follow us on Facebook and Twitter for important information
about us.
ZOETIS INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME(a)
(UNAUDITED)
(millions of dollars, except per share
data)
First Quarter % Incr./ 2014 2013 (Decr.)
Revenue $ 1,097 $ 1,090 1 Costs and expenses: Cost of sales(b) 379
402 (6 ) Selling, general and administrative expenses(b) 356 357 —
Research and development expenses(b) 87 90 (3 ) Amortization of
intangible assets(c) 15 15 — Restructuring charges and certain
acquisition-related costs 3 7 (57 ) Interest expense 29 22 32 Other
(income)/deductions–net 1 5 (80 ) Income before provision for taxes
on income 227 192 18 Provision for taxes on income 72 52 38 Net
income before allocation to noncontrolling interests 155 140 11
Less: Net income/(loss) attributable to noncontrolling interests —
— — Net income attributable to Zoetis $ 155 $ 140 11
Earnings per share—basic $ 0.31 $ 0.28 11 Earnings per
share—diluted $ 0.31 $ 0.28 11 Weighted-average shares used
to calculate earnings per share (in thousands) Basic 500,231
500,000 Diluted 500,702 500,111 (a) The condensed
consolidated statements of income present the three months ended
March 30, 2014 and March 31, 2013. Subsidiaries operating outside
the United States are included for the three months ended February
23, 2014 and February 24, 2013. (b) Exclusive of
amortization of intangible assets, except as discussed in footnote
(c) below. (c)
Amortization expense related to
finite-lived acquired intangible assets that contribute to our
ability to sell, manufacture, research, market and distribute
products, compounds and intellectual property is included in
Amortization of intangible assets as these intangible assets
benefit multiple business functions. Amortization expense related
to acquired intangible assets that are associated with a single
function is included in Cost of sales, Selling, general and
administrative expenses or Research and development expenses, as
appropriate.
Certain amounts and percentages may reflect rounding
adjustments.
ZOETIS INC.
RECONCILIATION OF GAAP REPORTED TO
NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars, except per share
data)
Quarter ended March 30, 2014
GAAPReported(1)
PurchaseAccountingAdjustments
Acquisition-RelatedCosts(2)
CertainSignificantItems(3)
Non-GAAPAdjusted(a)
Revenue
$ 1,097 $ — $ — $ — $ 1,097 Cost of sales(b)
379 (1 ) — (3 ) 375 Gross profit
718 1 — 3 722
Selling, general and administrative expenses(b)
356 1 — (30
) 327 Research and development expenses(b)
87 — — — 87
Amortization of intangible assets(c)
15 (12 ) — — 3
Restructuring charges and certain acquisition-related costs
3 — (2 ) (1 ) — Interest expense
29 — — — 29 Other
(income)/deductions–net
1 — — (2 ) (1 ) Income before
provision for taxes on income
227 12 2 36 277 Provision for
taxes on income
72 4 1 9 86 Net income attributable to
Zoetis
155 8 1 27 191 Earnings per common share attributable
to Zoetis–diluted(d)
0.31 0.02 — 0.05 0.38 Quarter
ended March 31, 2013
GAAPReported(1)
PurchaseAccountingAdjustments
Acquisition-RelatedCosts(2)
CertainSignificantItems(3)
Non-GAAPAdjusted(a)
Revenue
$ 1,090 $ — $ — $ — $ 1,090 Cost of sales(b)
402 (1 ) — (3 ) 398 Gross profit
688 1 — 3 692
Selling, general and administrative expenses(b)
357 — — (35
) 322 Research and development expenses(b)
90 — — — 90
Amortization of intangible assets(c)
15 (11 ) — — 4
Restructuring charges and certain acquisition-related costs
7 — (6 ) (1 ) — Interest expense
22 — — — 22 Other
(income)/deductions–net
5 — — (3 ) 2 Income before provision
for taxes on income
192 12 6 42 252 Provision for taxes on
income
52 4 2 15 73 Net income attributable to Zoetis
140 8 4 27 179
Earnings per common share attributable to
Zoetis–diluted(d)
0.28 0.02 0.01 0.05 0.36 (a) Non-GAAP adjusted
net income and its components and non-GAAP adjusted diluted EPS are
not, and should not be viewed as, substitutes for U.S. GAAP net
income and its components and diluted EPS. Despite the importance
of these measures to management in goal setting and performance
measurement, non-GAAP adjusted net income and its components and
non-GAAP 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, non-GAAP adjusted net income and
its components and non-GAAP 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. Non-GAAP adjusted net income and its components and
non-GAAP adjusted diluted EPS are presented solely to permit
investors to more fully understand how management assesses
performance. (b) Exclusive of amortization of intangible
assets, except as discussed in footnote (c) below. (c)
Amortization expense related to
finite-lived acquired intangible assets that contribute to our
ability to sell, manufacture, research, market and distribute
products, compounds and intellectual property is included in
Amortization of intangible assets as these intangible assets
benefit multiple business functions. Amortization expense related
to acquired intangible assets that are associated with a single
function is included in Cost of sales, Selling, general and
administrative expenses or Research and development expenses, as
appropriate.
(d) EPS amounts may not add due to rounding.
See Notes to Reconciliation of GAAP
Reported to Non-GAAP Adjusted Information for notes (1), (2) and
(3).
Certain amounts may reflect rounding adjustments.
ZOETIS INC. NOTES TO RECONCILIATION OF GAAP REPORTED TO
NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS (UNAUDITED)
(millions of dollars) (1) The condensed consolidated
statements of income present the three months ended March 30, 2014
and March 31, 2013. Subsidiaries operating outside the United
States are included for the three months ended February 23, 2014
and February 24, 2013. (2) Acquisition-related costs include
the following: First Quarter 2014 2013
Integration costs(a) $ 2 $ 4 Restructuring charges(b) — 2 Total
acquisition-related costs—pre-tax 2 6 Income taxes(c) 1 2 Total
acquisition-related costs—net of tax $ 1 $ 4 (a)
Integration costs represent external,
incremental costs directly related to integrating acquired
businesses and primarily include expenditures for consulting and
the integration of systems and processes. Included in Restructuring
charges and certain acquisition-related costs.
(b)
Restructuring charges are associated with
employees, assets and activities that will not continue with the
company. Included in Restructuring charges and certain
acquisition-related costs.
(c)
Included in Provision for taxes on
income.
(3) Certain significant items include the following:
First Quarter 2014 2013 Restructuring charges(a) $ —
$ 1 Implementation costs and additional depreciation—asset
restructuring(b) 1 2 Certain asset impairment charges(c) — 1
Stand-up costs(d) 33 34 Other(e) 2 4 Total certain significant
items—pre-tax 36 42 Income taxes(f) 9 15 Total certain significant
items—net of tax $ 27 $ 27 (a)
Represents restructuring charges incurred
for our cost-reduction/productivity initiatives. Included in
Restructuring charges and certain acquisition-related costs.
(b)
Related to our cost-reduction/productivity
initiatives. Included in Restructuring charges and certain
acquisition-related costs for the three months ended March 30, 2014
and included in Selling, general and administrative expenses for
the three months ended March 31, 2013.
(c)
Included in Other
(income)/deductions—net.
(d)
Represents certain nonrecurring costs
related to becoming an independent public company, such as new
branding (including changes to the manufacturing process for
required new packaging), the creation of standalone systems and
infrastructure, site separation, and certain legal registration and
patent assignment costs. Included in Cost of sales ($3 million) and
Selling, general and administrative expenses ($30 million) for the
three months ended March 30, 2014. Included in Cost of sales ($2
million) and Selling, general and administrative expenses ($32
million) for the three months ended March 31, 2013.
(e) For the three months ended March 30, 2014, represents a
pension plan settlement charge related to the divestiture of a
manufacturing plant ($4 million) partially offset by an insurance
recovery of litigation related charges ($2 million income). For the
three months ended March 31, 2013, primarily relates to a change in
estimate related to transitional manufacturing purchase agreements
associated with divestitures. (f)
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 AND
EXPENSES(a)
(UNAUDITED)
(millions of dollars)
% Change First Quarter (Favorable)/Unfavorable
2014 2013 Total
ForeignExchange
Operational Adjusted cost of sales(a) $ 375 $ 398 (6 )% (4
)% (2 )% As a percent of revenue 34.2 % 36.5 % NA NA NA Adjusted
SG&A expenses(a) 327 322 2 % (2 )% 4 % Adjusted R&D
expenses(a) 87 90 (3 )% (1 )% (2 )% Total $ 789
$ 810 (3 )% (3 )% — % (a)
Adjusted cost of sales, adjusted selling, general, and
administrative (SG&A) expenses and adjusted research and
development (R&D) expenses are defined as the corresponding
reported U.S. generally accepted accounting principles (GAAP)
income statement line items excluding purchase accounting
adjustments, acquisition-related costs, and certain significant
items. Reconciliations of certain reported to adjusted information
for the three months ended March 30, 2014 and March 31, 2013 are
provided in the materials accompanying this report. These adjusted
income statement line item measures are not, and should not be
viewed as, substitutes for the corresponding U.S. GAAP line items.
ZOETIS INC.
2014 GUIDANCE
Selected Line Items Revenue $4,650 to $4,750
million Adjusted cost of sales as a percentage of revenue(a)
Approximately 35.5% Adjusted SG&A expenses(a) $1,430 to $1,480
million Adjusted R&D expenses(a) $390 to $405 million Adjusted
interest expense and other (income)/deductions(a) Approximately
$105 million Effective tax rate on adjusted income(a) Approximately
29% Adjusted diluted EPS(a) $1.48 to $1.54 Certain significant
items(b) and acquisition-related costs $165 to $185 million
Reported diluted EPS $1.15 to $1.21 A reconciliation
of 2014 adjusted net income and adjusted diluted EPS guidance to
2014 reported net income attributable to Zoetis and reported
diluted EPS attributable to Zoetis common shareholders guidance
follows: Full-Year 2014 Guidance (millions of
dollars, except per share amounts) Net Income Diluted EPS
Adjusted net income/diluted EPS(a) guidance ~$740 - $770 ~$1.48 -
$1.54 Purchase accounting adjustments ~(30) ~(0.06) Certain
significant items(b) and acquisition-related costs ~(125 - 140)
~(0.25 - 0.28) Reported net income attributable to Zoetis/diluted
EPS guidance ~$580 - $610 ~$1.15 - $1.21
(a)
Adjusted net income and its components and
adjusted diluted EPS are defined as reported U.S. generally
accepted accounting principles (GAAP) net income and its components
and reported diluted EPS excluding purchase accounting adjustments,
acquisition-related costs and certain significant items. Adjusted
cost of sales, adjusted selling, general and administrative
(SG&A) expenses, adjusted research and development (R&D)
expenses, adjusted interest expense and adjusted other
(income)/deductions 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.
(b) Primarily includes certain nonrecurring costs related to
becoming an independent public company, such as new branding
(including changes to the manufacturing process for required new
packaging), the creation of standalone systems and infrastructure,
site separation, certain legal registration and patent assignment
costs, and restructuring and other charges.
ZOETIS INC.
CONSOLIDATED REVENUE BY SEGMENT(a) AND
SPECIES
(UNAUDITED)
(millions of dollars)
First Quarter % Change 2014 2013 Total
ForeignExchange
Operational
Revenue: Livestock $ 706 $ 703 — % (4 )%
4 % Companion Animal 380 376 1 % (2 )% 3 % Contract Manufacturing
11 11 — % (3 )% 3 %
Total Revenue $ 1,097
$ 1,090 1 % (3 )%
4 % U.S. Livestock $ 263
$ 245 7 % — % 7 % Companion Animal 216 209 3 % — % 3 %
Total
U.S. Revenue $ 479 $ 454 6
% — % 6 % EuAfME
Livestock $ 181 $ 192 (6 )% — % (6 )% Companion Animal 89 87 2 % 1
% 1 %
Total EuAfME Revenue $ 270 $
279 (3 )% 1 % (4
)% CLAR Livestock $ 135 $ 139 (3 )% (12 )% 9 %
Companion Animal 33 32 3 % (12 )% 15 %
Total CLAR Revenue
$ 168 $ 171 (2 )%
(12 )% 10 % APAC
Livestock $ 127 $ 127 — % (7 )% 7 % Companion Animal 42 48 (13 )%
(11 )% (2 )%
Total APAC Revenue $ 169 $
175 (3 )% (7 )% 4
% Livestock: Cattle $ 391 $ 390
— % (3 )% 3 % Swine 160 155 3 % (3 )% 6 % Poultry 135 133 2 % (4 )%
6 % Other 20 25 (20 )% (8 )% (12 )%
Total Livestock Revenue
$ 706 $ 703 — % (4
)% 4 % Companion Animal: Horses
$ 43 $ 42 2 % (5 )% 7 % Dogs and Cats 337 334 1 % (1 )% 2 %
Total Companion Animal Revenue $ 380 $
376 1 % (2 )% 3 %
(a) For a description of each segment, see Note 18A
to Zoetis's consolidated and combined financial statements included
in Zoetis's Form 10-K for the year ended December 31, 2013.
Beginning in the first quarter of 2014, contract manufacturing is
presented separately and we have revised our segment results for
the comparable 2013 period. Certain amounts and percentages
may reflect rounding adjustments.
ZOETIS INC.
SEGMENT EARNINGS(a)
(UNAUDITED)
(millions of dollars)
First Quarter % Change 2014 2013 Total
ForeignExchange
Operational U.S. $ 278 $ 234 19 % — % 19 % EuAfME 112 114 (2
)% — % (2 )% CLAR 64 52 23 % 12 % 11 % APAC 66 75 (12
)% (10 )% (2 )% Total Reportable Segments 520 475 9 % (1 )% 10 %
Other business activities(b) (72 ) (71 ) 1 % Reconciling
Items: Corporate(c) (125 ) (116 ) 8 % Purchase accounting
adjustments(d) (12 ) (12 ) — % Acquisition-related costs(e) (2 ) (6
) (67 )% Certain significant items(f) (36 ) (42 ) (14 )% Other
unallocated(g) (46 ) (36 ) 28 %
Total Earnings(h)
$ 227 $ 192 18
% (a) For a description of each segment, see
Note 18A to Zoetis's consolidated and combined financial statements
included in Zoetis's Form 10-K for the year ended December 31,
2013. Beginning in the first quarter of 2014, contract
manufacturing is included in other business activities and we have
revised our segment results for the comparable 2013 period.
(b) Other business activities reflect the research and development
costs managed by our Research and Development organization as well
as our contract manufacturing business. (c) Corporate
includes, among other things, administration expenses, interest
expense, certain compensation and other costs not charged to our
operating segments. (d) Purchase accounting adjustments
include certain charges related to intangible assets and property,
plant and equipment not charged to our operating segments.
(e) Acquisition-related costs can include costs associated with
acquiring, integrating and restructuring newly acquired businesses,
such as transaction costs, integration costs, restructuring charges
and additional depreciation associated with asset restructuring.
(f)
Certain significant items are 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 costs related
to becoming an independent public company, restructuring charges
and implementation costs associated with our
cost-reduction/productivity initiatives that are not associated
with an acquisition and the impact of divestiture-related gains and
losses.
(g) Includes overhead expenses associated with our
manufacturing operations not directly attributable to an operating
segment. (h) Defined as income before provision for taxes on
income. Certain amounts and percentages may reflect rounding
adjustments.
Zoetis Inc.Media:Bill Price,
1-973-443-2742william.price@zoetis.comorElinore White,
1-973-443-2835elinore.y.white@zoetis.comorInvestor:John O'Connor, 1-973-822-7088
Zoetis (NYSE:ZTS)
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From Jun 2024 to Jul 2024
Zoetis (NYSE:ZTS)
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From Jul 2023 to Jul 2024