Zoetis Comments on European Commission Decision Regarding Belgium Tax Rulings; Provides Preliminary Update of Financial Guida...
January 12 2016 - 8:00AM
Business Wire
Zoetis Inc. (NYSE:ZTS) provided the following statement
concerning the European Commission’s decision regarding existing
tax rulings in Belgium, and gave its implications for the company’s
financial guidance for 2016 and 2017:
Zoetis is disappointed with the European Commission’s
announcement regarding Belgium’s tax rulings and its implications
for Zoetis. The company complies with all tax laws and has relied
on these long-standing agreements in Belgium for its financial
plans and business operations, including supply chain,
manufacturing, R&D and international sales organizations in
Belgium. Zoetis disagrees with the decision and plans to
appeal.
Preliminary Update on Financial Impact to Guidance for 2016
and 2017As a result of the decision by the European Commission,
Zoetis is providing a preliminary view of its impact on Zoetis, if
it is upheld on appeal.
Zoetis does not expect the European Commission’s decision to
have an impact on the company’s 2015 results. However, as a result
of the ruling, the company expects to record a one-time, net tax
charge in the first quarter of 2016, which is expected to be
approximately $35 million to $45 million, based on preliminary
estimates. This estimate does not include any benefits associated
with a successful appeal of the decision, nor does it reflect
guidance we expect to receive from the Belgian government on
the methodology or timing of the recovery of prior tax benefits.
This net tax charge relates to the periods 2013 through 2015, which
includes the revaluation of the company’s deferred tax assets and
liabilities using the rates expected to be in place at the time of
the reversal.
In addition, the company’s effective tax rate on adjusted income
would now be expected to increase from its prior guidance of 28% in
2016 to approximately 33% in 2016. As a result of this change, the
company is updating certain elements of its 2016 and 2017 guidance
solely to reflect the Commission’s decision:
- Increases Effective Tax Rate on
Adjusted Income from 28% to approximately 33% for 2016
- Reduces Adjusted Diluted EPS by $0.13
for 2016
- Reduces GAAP Reported Diluted EPS by a
range of $0.20 - $0.22 for 2016, reflecting the expected net tax
charge
Zoetis has been aware of the European Commission’s review of
such arrangements in Belgium since the Commission’s investigation
began in early 2015. While the company did not expect such a
negative decision, it has been assessing options to mitigate the
potential impact on Zoetis. The company expects its guidance for
2017 to reflect the benefit of certain actions that could mitigate
this impact on future results:
- For 2017, the company expects an
effective tax rate on adjusted income of approximately 30% and a
reduction in its GAAP reported and adjusted EPS guidance range of
approximately $0.06 per share to reflect the Commission’s
decision.
Zoetis will provide a full update of its 2016 and 2017 guidance
when it reports fourth quarter and full year 2015 results on
February 16, 2016.
About ZoetisZoetis (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
2014, the company generated annual revenue of $4.8 billion. With
approximately 10,000 employees worldwide at the beginning of 2015,
Zoetis serves veterinarians, livestock producers and people who
raise and care for farm and companion animals with sales of its
products in 120 countries. For more information, visit
www.zoetis.com.
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, expectations regarding products,
future use of cash and dividend payments, tax rate, and other
future events. In particular, this press release contains forward
looking statements that reflect the current views of Zoetis with
respect to our tax rate and tax regimes, changes in the tax regimes
in other jurisdictions and challenges to our efforts to mitigate
the impact of tax decisions such as the recent one by the European
Commission. 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, 2014, 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160112005789/en/
ZoetisMedia ContactsBill
Price, 973-443-2742William.price@zoetis.comorElinore White,
973-443-2835Elinore.y.white@zoetis.comorInvestor ContactsJohn O’Connor,
973-822-7088john.oconnor@zoetis.comorSteve Frank,
973-822-7141steve.frank@zoetis.com
Zoetis (NYSE:ZTS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Zoetis (NYSE:ZTS)
Historical Stock Chart
From Jul 2023 to Jul 2024