Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Mar. 19, 2014 | Jun. 30, 2013 |
Document Document and Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'Q4 | ' | ' |
Trading Symbol | 'ZTS | ' | ' |
Entity Registrant Name | 'Zoetis Inc. | ' | ' |
Entity Central Index Key | '0001555280 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Non-accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 500,729,429 | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $15,445 |
CONSOLIDATED_AND_COMBINED_STAT
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (USD $) | 12 Months Ended | |||||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Income Statement [Abstract] | ' | ' | ' | |||
Revenue | $4,561 | [1] | $4,336 | [1] | $4,233 | [1],[2] |
Costs and expenses: | ' | ' | ' | |||
Cost of sales(b) | 1,669 | [3] | 1,563 | [3] | 1,652 | [2],[3] |
Selling, general and administrative expenses(b) | 1,613 | [3] | 1,470 | [3] | 1,453 | [2],[3] |
Research and development expenses(b) | 399 | [3] | 409 | [3] | 427 | [2],[3] |
Amortization of intangible assets | 60 | 64 | 69 | [2] | ||
Restructuring charges and certain acquisition-related costs | 26 | 135 | 154 | [2] | ||
Interest expense, net of capitalized interest | 113 | 31 | 36 | [2] | ||
Other (income)/deductions––net | -9 | -46 | 48 | [2] | ||
Income before provision for taxes on income | 690 | [4],[5],[6] | 710 | [4],[5],[6] | 394 | [2],[4],[5],[6] |
Provision for taxes on income | 187 | [4],[6],[7] | 274 | [4],[6],[7] | 146 | [2],[4],[6],[7] |
Net income before allocation to noncontrolling interests | 503 | 436 | 248 | [2],[8] | ||
Net income/(loss) attributable to noncontrolling interests | -1 | 0 | 3 | [2] | ||
Net income attributable to Zoetis | $504 | $436 | $245 | [2] | ||
Earnings per share attributable to Zoetis Inc. stockholders: | ' | ' | ' | |||
Basic (in dollars per share) | $1.01 | $0.87 | $0.49 | [2] | ||
Diluted (in dollars per share) | $1.01 | $0.87 | $0.49 | [2] | ||
Weighted-average common shares outstanding(c): | ' | ' | ' | |||
Basic (in shares) | 500,002 | 500,000 | [9] | 500,000 | [2],[9] | |
Diluted (in shares) | 500,317 | 500,000 | [9] | 500,000 | [2],[9] | |
Dividends declared per common share | $0.27 | $0 | $0 | |||
[1] | Revenue denominated in euros were $693 million in 2013, $639 million in 2012, and $710 million in 2011. | |||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||
[3] | Exclusive of amortization of intangible assets, except as disclosed in Note 4. Significant Accounting Policies—Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets. | |||||
[4] | In 2012, the Provision for taxes on income reflects the following:•U.S. tax benefits of approximately $29.3 million, representing tax and interest, resulting from a multi-year settlement with the U.S. Internal Revenue Service with respect to audits for the years 2006 through 2008, and international tax benefits of approximately $2.7 million, representing tax and interest, resulting from the resolution of certain tax positions pertaining to prior years with various foreign tax authorities and from the expiration of certain statutes of limitations;•U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes);•The expiration of the U.S. Research and Development Tax Credit on December 31, 2011; and•Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | |||||
[5] | Defined as income before provision for taxes on income. | |||||
[6] | In 2013, the Provision for taxes on income reflects the following:•U.S. tax expense of approximately $3 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes);•U.S. tax benefit related to U.S. Research and Development Tax Credit which was retroactively extended on January 3, 2013, and the U.S. Domestic Production Activities deduction;•Tax expense of approximately $25 million related to the establishment of valuation allowance; and •Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | |||||
[7] | In 2011, the Provision for taxes on income reflects the following:•U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside of the United States that will not be indefinitely reinvested overseas; and •U.S. tax benefits of approximately $9.5 million, representing tax and interest, resulting from the tax benefit recorded in connection with the settlement of certain audits with the U.S. Internal Revenue Service. | |||||
[8] | Includes impacts from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||
[9] | The weighted average shares outstanding for both basic and diluted earnings per share for the years ended December 31, 2012 and 2011 was calculated using 500Â million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the initial public offering, which was completed on February 6, 2013. There were no Zoetis restricted stock units, deferred stock units, stock options or performance shares outstanding prior to the initial public offering. |
CONSOLIDATED_AND_COMBINED_STAT1
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Statement of Comprehensive Income [Abstract] | ' | ' | ' | |||
Net income before allocation to noncontrolling interests | $503 | $436 | $248 | [1],[2] | ||
Other comprehensive income/(loss), net of tax and reclassification adjustments(b): | ' | ' | ' | |||
Foreign currency translation adjustments, net | -54 | [3] | -93 | [3] | 4 | [1],[3] |
Benefit plans: Actuarial gains/(losses), net | -2 | [3] | 1 | [3] | 5 | [1],[3] |
Total other comprehensive income/(loss), net of tax | -56 | -92 | 9 | [1] | ||
Comprehensive income before allocation to noncontrolling interests | 447 | 344 | 257 | [1] | ||
Comprehensive income/(loss) attributable to noncontrolling interests | -1 | 0 | 3 | [1] | ||
Comprehensive income attributable to Zoetis | $448 | $344 | $254 | [1] | ||
[1] | Includes impacts from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||
[3] | Presented net of reclassification adjustments and tax impacts, which are not significant 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 and combined statements of income. |
CONSOLIDATED_AND_COMBINED_BALA
CONSOLIDATED AND COMBINED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Assets | ' | ' | ||
Cash and cash equivalents | $610 | [1] | $317 | [1] |
Accounts receivable, less allowance for doubtful accounts of $31 in 2013 and $49 in 2012 | 1,138 | [1] | 900 | [1] |
Inventories | 1,293 | [1] | 1,345 | [1] |
Current deferred tax assets | 97 | [1] | 101 | [1] |
Other current assets | 219 | [1] | 201 | [1] |
Total current assets | 3,357 | [1] | 2,864 | [1] |
Property, plant and equipment, less accumulated depreciation of $1,028 in 2013 and $1,011 in 2012 | 1,295 | [1] | 1,241 | [1] |
Goodwill | 982 | [1] | 985 | [1] |
Identifiable intangible assets, less accumulated amortization | 803 | [1] | 868 | [1] |
Noncurrent deferred tax assets | 63 | [1] | 216 | [1] |
Other noncurrent assets | 58 | [1] | 88 | [1] |
Total assets | 6,558 | [1] | 6,262 | [1] |
Liabilities and Equity | ' | ' | ||
Short-term borrowings, including current portion of allocated long-term debt in 2012 | 15 | [1] | 73 | [1] |
Accounts payable | 506 | [1] | 319 | [1] |
Accrued compensation and related items | 229 | [1] | 194 | [1] |
Income taxes payable | 40 | [1] | 30 | [1] |
Dividends payable | 36 | [1] | 0 | [1] |
Other current liabilities | 589 | [1] | 507 | [1] |
Total current liabilities | 1,415 | [1] | 1,123 | [1] |
Long-term debt, net of discount | 3,642 | [1] | 0 | [1] |
Allocated long-term debt | 0 | [1] | 509 | [1] |
Noncurrent deferred tax liabilities | 322 | [1] | 323 | [1] |
Other taxes payable | 49 | [1] | 159 | [1] |
Other noncurrent liabilities | 168 | [1] | 107 | [1] |
Total liabilities | 5,596 | [1] | 2,221 | [1] |
Commitments and contingencies | ' | [1] | ' | [1] |
Business unit equity | 0 | [1] | 4,183 | [1] |
Common stock, $0.01 par value: 5,000 authorized, 500 issued and outstanding | 5 | [1] | 0 | [1] |
Additional paid-in capital | 878 | [1] | 0 | [1] |
Retained earnings | 276 | [1] | 0 | [1] |
Accumulated other comprehensive loss | -219 | [1] | -157 | [1] |
Total Zoetis Inc. equity | 940 | [1] | 4,026 | [1] |
Equity attributable to noncontrolling interests | 22 | [1] | 15 | [1] |
Total equity | 962 | [1] | 4,041 | [1] |
Total liabilities and equity | $6,558 | [1] | $6,262 | [1] |
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
CONSOLIDATED_AND_COMBINED_BALA1
CONSOLIDATED AND COMBINED BALANCE SHEETS (PARENTHETICAL) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Allowance for doubtful accounts | $31 | $49 |
Accumulated depreciation | $1,028 | $1,011 |
Common stock, par value (in dollars per share) | $0.01 | ' |
Common stock, shares authorized | 5,000,000,000 | ' |
Common stock, shares issued | 500,007,428 | ' |
Common stock, shares outstanding | 500,007,428 | ' |
CONSOLIDATED_AND_COMBINED_STAT2
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY (USD $) | Total | Business Unit Equity | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comp. Income/(Loss) | Equity Attributable to Noncontrolling Interests | ||||
In Millions, unless otherwise specified | |||||||||||
Beginning balance at Dec. 31, 2010 | $3,344 | $3,418 | [1] | ' | $0 | $0 | ($74) | ' | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ||||
Comprehensive income | 257 | [2] | 245 | [1] | ' | ' | ' | 9 | 3 | ||
Share-based compensation expense | 19 | 19 | [1] | ' | ' | ' | ' | ' | |||
Investment in Jilin Pfizer Guoyuan Animal Health Co., Ltd. | 16 | ' | ' | ' | ' | ' | 16 | ||||
Dividends declared and paid | -416 | -416 | [1] | ' | ' | ' | ' | ' | |||
Net transfers between Pfizer and noncontrolling interests | 0 | 3 | [1] | ' | ' | ' | ' | -3 | |||
Net transfers - Pfizer | [1] | 516 | 516 | ' | ' | ' | ' | ' | |||
Ending balance at Dec. 31, 2011 | 3,736 | 3,785 | [1] | ' | ' | 0 | -65 | 16 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ||||
Comprehensive income | 344 | 436 | [1] | ' | ' | ' | -92 | ' | |||
Share-based compensation expense | 28 | 28 | [1] | ' | ' | ' | ' | ' | |||
Dividends declared and paid | -63 | -63 | [1] | ' | ' | ' | ' | ' | |||
Net transfers between Pfizer and noncontrolling interests | 0 | 1 | [1] | ' | ' | ' | ' | -1 | |||
Net transfers - Pfizer | -4 | -4 | [1] | ' | ' | ' | ' | ' | |||
Ending balance at Dec. 31, 2012 | 4,041 | [3] | 4,183 | ' | ' | 0 | -157 | 15 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ||||
Comprehensive income | 447 | 94 | [1] | ' | ' | 410 | -56 | -1 | |||
Share-based compensation expense | 43 | 3 | [1] | ' | 40 | ' | ' | ' | |||
Dividends declared and paid | -134 | ' | ' | ' | -134 | ' | ' | ||||
Net transfers - Pfizer | -271 | -271 | [1] | ' | ' | ' | ' | ' | |||
Separation adjustments(c) | [4] | 445 | 414 | [1] | ' | 29 | ' | -6 | 8 | ||
Employee benefit plan contribution from Pfizer Inc.(d) | [5] | 2 | ' | ' | 2 | ' | ' | ' | |||
Reclassification of net liability due to Pfizer Inc.(e) | [6] | -60 | -60 | [1] | ' | ' | ' | ' | ' | ||
Consideration paid to Pfizer Inc. in connection with the Separation(f) | [7] | -3,551 | ' | ' | -3,551 | ' | ' | ' | |||
Issuance of common stock to Pfizer Inc. in connection with the Separation and relassification of Business Unit Equity(f) | [7] | 0 | -4,363 | [1] | 5 | [8] | 4,358 | ' | ' | ' | |
Ending balance at Dec. 31, 2013 | $962 | [3] | ' | $5 | [8] | $878 | $276 | ($219) | $22 | ||
[1] | All amounts associated with Business Unit Equity relate to periods prior to the Separation. See Note 2A. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offerb The Separation. | ||||||||||
[2] | Includes impacts from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | ||||||||||
[3] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. | ||||||||||
[4] | For additional information, see Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange OfferbAdjustments Associated with the Separation. | ||||||||||
[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. | ||||||||||
[6] | Represents the reclassification of the Receivable from Pfizer Inc. and the Payable to Pfizer Inc. from Business Unit Equity as of the Separation date. See Note 2A. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offerb The Separation. | ||||||||||
[7] | Reflects the Separation transaction. See Note 2A. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offerb The Separation. | ||||||||||
[8] | As of DecemberB 31, 2013, there were 500,007,428 outstanding shares of common stock. |
CONSOLIDATED_AND_COMBINED_STAT3
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY (PARENTHETICAL) | Dec. 31, 2013 |
Statement of Stockholders' Equity [Abstract] | ' |
Common Stock, Shares, Outstanding | 500,007,428 |
CONSOLIDATED_AND_COMBINED_STAT4
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Operating Activities | ' | ' | ' | |||
Net income before allocation to noncontrolling interests | $503 | $436 | $248 | [1],[2] | ||
Adjustments to reconcile net income before noncontrolling interests to net cash provided by/(used in) operating activities | ' | ' | ' | |||
Depreciation and amortization expense | 209 | [3] | 200 | [3] | 205 | [3] |
Share-based compensation expense | 43 | 28 | 19 | |||
Asset write-offs and asset impairments | 15 | 10 | 78 | |||
Deferred taxes | 23 | -74 | 65 | |||
Employee benefit plan contribution from Pfizer Inc. | 2 | 0 | 0 | |||
Other non-cash adjustments | -10 | 3 | -1 | |||
Other changes in assets and liabilities, net of acquisitions and divestitures and transfers with Pfizer Inc. [Abstract] | ' | ' | ' | |||
Accounts receivable | -99 | -65 | -85 | |||
Inventories | -104 | -318 | 40 | |||
Other assets | -24 | -5 | 11 | |||
Accounts payable | -82 | 96 | -16 | |||
Other liabilities | 196 | 62 | -15 | |||
Other tax accounts, net | 9 | 81 | -52 | |||
Net cash provided by operating activities | 681 | 454 | 497 | |||
Investing Activities | ' | ' | ' | |||
Purchases of property, plant and equipment | -184 | -126 | -135 | |||
Net proceeds from sales of assets | 9 | 3 | 34 | |||
Acquisitions, net of cash acquired | -4 | 0 | -345 | |||
Other investing activities | 0 | -12 | -3 | |||
Net cash used in investing activities | -179 | -135 | -449 | |||
Financing Activities | ' | ' | ' | |||
Allocated principal payments on long-term debt | 0 | 0 | -143 | |||
Increase in short-term borrowings, net | 16 | 0 | 0 | |||
Proceeds from issuance of long-term debtbsenior notes, net of discount and fees | 2,625 | 0 | 0 | |||
Consideration paid to Pfizer Inc. in connection with the Separation(a) | -2,559 | [4] | 0 | [4] | 0 | [4] |
Cash dividends paid(b) | -98 | [5] | -63 | [5] | -416 | [5] |
Other net financing activities with Pfizer Inc. | -184 | -15 | 529 | |||
Net cash used in financing activities | -200 | -78 | -30 | |||
Effect of exchange-rate changes on cash and cash equivalents | -9 | -3 | -2 | |||
Net increase in cash and cash equivalents | 293 | 238 | 16 | |||
Cash and cash equivalents at beginning of period | 317 | [6] | 79 | 63 | ||
Cash and cash equivalents at end of period | 610 | [6] | 317 | [6] | 79 | |
Cash paid during the period for: | ' | ' | ' | |||
Income taxes | 134 | 276 | 142 | |||
Interest, net of capitalized interest | 60 | 31 | 37 | |||
Non-cash transactions: | ' | ' | ' | |||
Contingent purchase price consideration | 3 | 0 | 0 | |||
Dividends declared, not paid | 36 | 0 | 0 | |||
Zoetis Inc. senior notes transferred to Pfizer Inc. in connection with the Separation(c) | $992 | [7] | $0 | [7] | $0 | [7] |
[1] | Includes impacts from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||
[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] | Reflects the Separation transaction. Amount is net of the non-cash portion. See Note 2A. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer: The Separation. | |||||
[5] | For the twelve months ended DecemberB 31, 2012 and December 31, 2011, reflects payments to other non-Zoetis Pfizer Inc. entities. | |||||
[6] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. | |||||
[7] | Reflects the non-cash portion of the Separation transaction. See Note 2A. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer: The Separation. |
Business_Description_Notes
Business Description (Notes) | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization | ' |
Business Description | |
Zoetis Inc. (collectively, Zoetis, the company, we, us or our) is a global leader in the discovery, development, manufacture and commercialization of animal health medicines and vaccines, with a focus on both livestock and companion animals. We organize and operate our business in four geographic regions: the United States (U.S.); Europe/Africa/Middle East (EuAfME); Canada/Latin America (CLAR); and Asia/Pacific (APAC). | |
We market our products in more than 120 countries, including developed markets and emerging markets. Our revenue is mostly generated in the U.S. and EuAfME. We have a diversified business, marketing products across eight core species: cattle, swine, poultry, sheep and fish (collectively, livestock) and dogs, cats and horses (collectively, companion animals); and within five major product categories: anti-infectives, vaccines, parasiticides, medicated feed additives and other pharmaceuticals. |
Separation_Activities_and_Init
Separation Activities and Initial Public Offering (Notes) | 12 Months Ended | |
Dec. 31, 2013 | ||
Separation Activities and Initial Public Offering [Abstract] | ' | |
The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer | ' | |
The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer | ||
Pfizer Inc. (Pfizer) formed Zoetis to acquire, own and operate the animal health business of Pfizer. On June 24, 2013, Pfizer completed an exchange offer resulting in the full separation of Zoetis from Pfizer. For additional information, see E. Exchange Offer. | ||
A. | The Separation | |
In the first quarter of 2013, through a series of steps (collectively, the Separation), Pfizer transferred to us its subsidiaries holding substantially all of the assets and liabilities of its animal health business. In exchange, we transferred to Pfizer: (i) all of the issued and outstanding shares of our Class A common stock; (ii) all of the issued and outstanding shares of our Class B common stock; (iii) $1.0 billion in senior notes (see C. Senior Notes Offering below); and (iv) an amount of cash equal to substantially all of the net proceeds received in the senior notes offering (approximately $2.5 billion). | ||
B. | Adjustments Associated with the Separation | |
In connection with the Separation, certain animal health assets and liabilities included in the pre-Separation balance sheet were retained by Pfizer and certain non-animal health assets and liabilities (not included in the pre-Separation balance sheet) were transferred to Zoetis. The adjustments to the historical balance sheet of Zoetis (collectively, the Separation Adjustments) representing approximately $445 million of net liabilities retained by Pfizer, were primarily related to the following: | ||
• | The removal of inventories (approximately $74 million), property, plant and equipment (approximately $28 million) and miscellaneous other net liabilities (approximately $21 million) associated with certain non-dedicated manufacturing sites that were retained by Pfizer; | |
• | The addition of property, plant and equipment (approximately $56 million) associated with a non-dedicated manufacturing site that was transferred to us by Pfizer (and then leased back to Pfizer under operating leases), and the removal of the inventory (approximately $46 million) and net other assets (approximately $4 million) at that site as these assets were retained by Pfizer; | |
• | The addition of net defined benefit plan liabilities (approximately $21 million) and deferred compensation liabilities (approximately $4 million); | |
• | The elimination of (i) noncurrent deferred tax assets (some of which were included within noncurrent deferred tax liabilities due to jurisdictional netting) related to net operating loss and tax credit carryforwards; (ii) net tax liabilities associated with uncertain tax positions; (iii) noncurrent deferred tax liabilities related to deferred income taxes on unremitted earnings; and (iv) other allocated net tax assets, all of which (approximately $49 million in net tax asset accounts) were retained by Pfizer; | |
• | The addition of (i) noncurrent deferred tax assets (approximately $8 million, some of which were included within noncurrent deferred tax liabilities due to jurisdictional netting) related to net benefit plan liabilities transferred to us by Pfizer; (ii) noncurrent deferred tax assets (approximately $2 million) related to net operating loss and tax credit carryforwards; and (iii) noncurrent deferred tax liabilities (approximately $2 million) related to property, plant and equipment transferred to us by Pfizer; | |
• | The elimination of allocated long-term debt (approximately $582 million), allocated accrued interest payable (approximately $16 million) and allocated unamortized deferred debt issuance costs (approximately $2 million) that were retained by Pfizer; | |
• | Certain net financial assets retained by Pfizer (approximately $45 million); | |
• | The removal of cash (approximately $7 million), inventories (approximately $5 million), property, plant and equipment (approximately $8 million), miscellaneous other assets (approximately $3 million) and other miscellaneous liabilities (approximately $2 million) associated with non-U.S. Pfizer businesses that did not transfer to us from Pfizer; | |
• | The addition of net receivables from Pfizer (approximately $5 million) associated with certain foreign taxes directly resulting from certain aspects of the Separation that were the responsibility of Pfizer under the terms of the tax matters agreement, see Note 8B. Tax Matters— Tax Matters Agreement; | |
• | The addition of (i) inventory (approximately $15 million); (ii) net deferred tax assets (approximately $1 million); and (iii) miscellaneous other assets (approximately $5 million) transferred to us by Pfizer, and the removal of (i) property, plant and equipment (approximately $2 million); (ii) miscellaneous other liabilities (approximately $57 million), and (iii) the elimination of prepaid taxes (approximately $4 million) that were retained by Pfizer; and | |
• | The addition of net benefit plan liabilities (approximately $21 million) associated with certain international plans that will be transferred from Pfizer to Zoetis in 2014. See Note 12. Benefit Plans. | |
The Separation Adjustment associated with Accumulated Other Comprehensive Income reflects the accumulated currency translation adjustment based on the actual legal entity structure of Zoetis. | ||
C. | Senior Notes Offering | |
In connection with the Separation, on January 28, 2013, we issued $3.65 billion aggregate principal amount of our senior notes in a private placement, with an original issue discount of $10 million. For additional information, see Note 10A. Financial Instruments— Debt. | ||
D. | Initial Public Offering (IPO) | |
After the Separation, on February 6, 2013, an IPO of 99,015,000 shares of our Class A common stock (including the exercise of the underwriters' over-allotment option) at a price of $26.00 per share was completed. Pfizer retained the net proceeds from the IPO. | ||
Immediately following the IPO, there were 99,015,000 outstanding shares of Class A common stock and 400,985,000 outstanding shares of Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Following the IPO, Pfizer owned all of the outstanding shares of our Class B common stock, all of which was converted to Class A common stock in connection with the Exchange Offer. See E. Exchange Offer. There are no longer any shares of our Class B common stock outstanding. | ||
In connection with the IPO, we entered into certain agreements that provide a framework for an ongoing relationship with Pfizer. For additional information, see Note 17B. Transactions and Agreements with Pfizer— Agreements with Pfizer. | ||
E. | Exchange Offer | |
On May 22, 2013, Pfizer announced an exchange offer (the Exchange Offer) whereby Pfizer shareholders could exchange a portion of Pfizer common stock for Zoetis common stock. The Exchange Offer was completed on June 24, 2013, resulting in the full separation of Zoetis and the disposal of Pfizer's entire ownership and voting interest in Zoetis. |
Basis_of_Presentation_Notes
Basis of Presentation (Notes) | 12 Months Ended | |
Dec. 31, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Basis of Presentation | ' | |
Basis of Presentation | ||
The consolidated and combined financial statements have been 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 and combined 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. For the years ended December 31, 2012 and 2011, balances due to or due from Pfizer have been presented as a component of Business unit equity. For those subsidiaries included in these consolidated and combined financial statements where our ownership is less than 100%, the minority interests have been shown in equity as Equity attributable to noncontrolling interests. | ||
On January 31, 2011 (the acquisition date), Pfizer completed the tender offer for the outstanding shares of common stock of King Pharmaceuticals, Inc. (King), including the King Animal Health business (KAH), and acquired approximately 92.5% of King’s outstanding shares. On February 28, 2011, Pfizer acquired all of the remaining shares of King. Commencing from the acquisition date, our combined financial statements include the assets, liabilities, operations and cash flows associated with KAH. As a result, and in accordance with our domestic and international reporting periods, our combined financial statements for the year ended December 31, 2011 reflect approximately eleven months of the U.S. operations of KAH and approximately ten months of the international operations of KAH. For additional information, see Note 5A. Acquisitions, Divestitures and Certain Investments—Acquisition of King Animal Health. | ||
A. | Basis of Presentation Prior to the Separation | |
Prior to the Separation, the combined financial statements were derived from the consolidated financial statements and accounting records of Pfizer and included allocations for direct costs and indirect costs attributable to the operations of the animal health business of Pfizer. The pre-Separation financial statements and activities do not purport to reflect what the results of operations, comprehensive income/(loss), financial position, equity or cash flows would have been had we operated as an independent public company during the periods presented. | ||
• | The combined statements of income for the years ended December 31, 2012 and 2011, and the pre-Separation period included in the consolidated statement of income for the year ended December 31, 2013, include allocations from certain support functions (Enabling Functions) that are provided on a centralized basis within Pfizer, such as expenses for business technology, facilities, legal, finance, human resources, and, to a lesser extent, business development, public affairs and procurement, among others, as Pfizer does not routinely allocate these costs to any of its business units. These allocations are based on either a specific identification basis or, when specific identification is not practicable, proportional allocation methods (e.g., using third-party sales, headcount, etc.), depending on the nature of the services. | |
Costs associated with business technology, facilities and human resources were allocated primarily using proportional allocation methods and, for legal and finance, primarily using specific identification. In all cases, for support function costs where proportional allocation methods were used, we determined whether the costs are primarily influenced by headcount (such as a significant majority of facilities and human resources costs) or by the size of the business (such as most business technology costs), and we also determined whether the associated scope of those services provided are global, regional or local. Based on those analyses, the costs were allocated based on our share of worldwide revenue, domestic revenue, international revenue, regional revenue, country revenue, worldwide headcount, country headcount or site headcount, as appropriate. | ||
As a result, costs associated with business technology and legal that were not specifically identified were mostly allocated based on revenue drivers and, to a lesser extent, based on headcount drivers; costs associated with finance that were not specifically identified were all allocated based on revenue drivers; and costs associated with facilities and human resources that were not specifically identified were predominantly allocated based on headcount drivers. | ||
• | The combined statements of income for the years ended December 31, 2012 and 2011, and the pre-Separation period included in the consolidated statement of income for the year ended December 31, 2013, include allocations of certain manufacturing and supply costs incurred by manufacturing plants that are shared with other Pfizer business units. These costs may include manufacturing variances and changes in the standard costs of inventory, among others, as Pfizer does not routinely allocate these costs to any of its business units. These allocations are based on either a specific identification basis or, when specific identification is not practicable, proportional allocation methods, such as animal health identified manufacturing costs, depending on the nature of the costs. | |
• | The combined statements of income for the years ended December 31, 2012 and 2011, and the pre-Separation period included in the consolidated statement of income for the year ended December 31, 2013, also include allocations from Pfizer for restructuring charges, integration costs, additional depreciation associated with asset restructuring and implementation costs, as Pfizer does not routinely allocate these costs to any of its business units. For additional information about allocations of restructuring charges and other costs associated with acquisitions and cost-reduction/productivity initiatives, see Note 6. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives. | |
• | The combined statements of income for the years ended December 31, 2012 and 2011, and the pre-Separation period included in the consolidated statement of income for the year ended December 31, 2013, include an allocation of share-based compensation expense and certain other compensation expense items, such as certain fringe benefit expenses, maintained on a centralized basis within Pfizer, as Pfizer does not routinely allocate these costs to any of its business units. For additional information about allocations of share-based payments, see Note 15. Share-Based Payments. | |
• | The combined balance sheets as of December 31, 2012 and 2011 reflects all of the assets and liabilities of Pfizer that are either specifically identifiable or are directly attributable to Zoetis and its operations. For benefit plans, the combined balance sheet only includes the assets and liabilities of benefit plans dedicated to animal health employees. For debt, see below. | |
• | The combined balance sheets as of December 31, 2012 and 2011 includes an allocation of long-term debt from Pfizer that was issued to partially finance the acquisition of Wyeth (including Fort Dodge Animal Health (FDAH)). The debt and associated interest-related expenses, including the effect of hedging activities, have been allocated on a pro-rata basis using the deemed acquisition cost of FDAH as a percentage of the total acquisition cost of Wyeth. No other allocations of debt have been made as none are specifically related to our operations. | |
The allocated expenses from Pfizer include the items noted below for the pre-Separation period in 2013 and years ended December 31, 2012 and 2011. | ||
• | Enabling Functions operating expenses––$11 million, $310 million and $335 million in 2013, 2012 and 2011, respectively ($1 million and $3 million in 2012 and 2011, respectively, in Cost of sales; $11 million, $254 million and $268 million in 2013, 2012, and 2011, respectively, in Selling, general and administrative expenses; and $55 million and $64 million in 2012 and 2011, respectively, in Research and development expenses). | |
• | PGS manufacturing costs—approximately $25 million and $34 million in 2012 and 2011, respectively (in Cost of sales). | |
• | Restructuring charges and certain acquisition-related costs—$57 million and $70 million in 2012 and 2011, respectively (in Restructuring charges and certain acquisition-related costs). | |
• | Other costs associated with cost reduction/productivity initiatives—additional depreciation associated with asset restructuring—$2 million, $13 million and $20 million in 2013, 2012, and 2011, respectively ($2 million, $4 million and $1 million in 2013, 2012 and 2011, respectively, in Selling, general and administrative expenses and $9 million and $19 million in 2012 and 2011, respectively, in Research and development expenses). | |
• | Other costs associated with cost reduction/productivity initiatives—implementation costs—$1 million and $9 million in 2013 and 2012, respectively ($1 million and $8 million in 2013 and 2012, respectively, in Selling, general and administrative expenses and $1 million in 2012 in Research and development expenses). | |
• | Share-based compensation expense—approximately $3 million, $33 million and $25 million in 2013, 2012, and 2011, respectively ($1 million, $7 million and $5 million in 2013, 2012 and 2011, respectively, in Cost of sales; $2 million, $21 million and $16 million in 2013, 2012 and 2011, respectively, in Selling, general and administrative expenses; and $5 million and $4 million in 2012 and 2011, respectively, in Research and development expenses). | |
• | Transaction costs—approximately $2 million in 2011 (in Restructuring charges and certain acquisition-related costs). | |
• | Compensation-related expenses—approximately $1 million, $12 million and $6 million 2013, 2012 and 2011, respectively ($5 million and $2 million in 2012 and 2011, respectively, in Cost of sales; $1 million, $5 million and $3 million in 2013, 2012 and 2011, respectively, in Selling, general and administrative expenses; and $2 million and $1 million in 2012 and 2011, respectively, in Research and development expenses). | |
• | Interest expense—approximately $2 million, $31 million and $36 million in 2013, 2012 and 2011, respectively. | |
The income tax provision in the combined statement of income for the periods prior to the Separation was calculated as if Zoetis filed a separate return. | ||
Management believes that the allocations are a reasonable reflection of the services received or the costs incurred on behalf of Zoetis and its operations and that the combined statements of income for the years ended December 31, 2012 and 2011 and the pre-Separation period included in the consolidated statement of income for the year ended December 31, 2013 reflect all of the costs of the animal health business of Pfizer. | ||
Prior to the Separation, we participated in Pfizer's centralized cash management system and generally all excess cash was transferred to Pfizer on a daily basis. Cash disbursements for operations and/or investing activities were funded as needed by Pfizer. We had also participated in Pfizer's centralized hedging and offsetting programs. As such, in the combined statements of income for the years ended December 31, 2012 and 2011, we include the impact of Pfizer's derivative financial instruments used for offsetting changes in foreign currency rates, net of the related foreign exchange gains and losses for the portion that is deemed to be associated with the animal health operations. Such gains and losses were not material to the combined financial statements for the periods presented. | ||
All balances and transactions among Zoetis and Pfizer and its subsidiaries, which can include dividends as well as other activities, are shown in Business unit equity in the combined balance sheets for the years ended December 31, 2012 and 2011. As the books and records of Zoetis were not kept on a separate company basis, the determination of the average net balance due to or from Pfizer is not practicable. | ||
B. | Basis of Presentation After the Separation | |
The consolidated financial statements as of and for the year ended December 31, 2013 comprise the following: (i) the results of operations, comprehensive income, and cash flow amounts for the period prior to the Separation (see above), which includes allocations for direct costs and indirect costs attributable to the operations of the animal health business; and (ii) the amounts for the period after the Separation, which reflect the results of operations, comprehensive income, financial position, equity and cash flows resulting from our operation as an independent public company. | ||
The income tax provision prepared after the Separation is based on the actual legal entity structure of Zoetis, with certain accommodations pursuant to a tax matters agreement. For additional information, see Note 19B. Transactions and Agreements with Pfizer— Agreements with Pfizer. |
Significant_Accounting_Policie
Significant Accounting Policies (Notes) | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Significant Accounting Policies | ' | |
Significant Accounting Policies | ||
New Accounting Standards | ||
In 2013, we adopted guidance issued by the Financial Accounting Standards Board that simplifies how an entity tests indefinite-lived intangibles for impairment. The amended guidance allows companies to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The adoption of this guidance had no impact on our financial position and results of operations. | ||
Estimates and Assumptions | ||
In preparing the consolidated and combined 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 and combined financial statements. For example, in the consolidated and combined statements of income, in addition to estimates used in determining the allocations of costs and expenses from Pfizer, 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 and combined 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, benefit obligations, the impact of contingencies, deductions from revenue and restructuring reserves, all of which also impact the consolidated and combined 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 and combined 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 and combined 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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
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 record revenue from product sales when the goods are shipped and title and risk of loss passes to the customer. At the time of sale, we also record estimates for a variety of deductions from revenue, such as rebates, sales allowances, product returns and discounts. Sales deductions are estimated and recorded at the time that related revenue is recorded except for sales incentives, which are estimated and recorded at the time the related revenue is recorded or when the incentive is offered, whichever is later. As applicable, our estimates are generally based on contractual terms or historical experience, adjusted as necessary to reflect our expectations about the future. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenue. | ||
As of December 31, 2013 and 2012, accruals for sales deductions included in Other current liabilities are approximately $153 million and $126 million, respectively. | ||
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 heavily 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 market. 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 $143 million in 2013, $141 million in 2012 and $134 million in 2011. | ||
Shipping and handling costs totaled approximately $60 million in 2013, $59 million in 2012 and $66 million in 2011. | ||
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 impairment indicators exist, by first 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. If we 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. We performed a qualitative assessment, as of September 29, 2013, to determine whether it is more likely than not that the respective fair values of our reporting units are less than their carrying amounts, including goodwill. Based on that assessment, we determined that this condition does not exist for all reporting units and concluded that goodwill was not impaired. | |
Impairment reviews can involve a complex series of judgments about future events and uncertainties and can rely heavily 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 $35 million and $3 million of internal-use software for the years ended December 31, 2013 and 2012, respectively. Depreciation expense for capitalized software was $2 million per year in 2013, 2012 and 2011. | ||
Restructuring Charges and Certain Acquisition-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-related costs are all restructuring charges and certain costs associated with acquiring and integrating an acquired business. 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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Earnings per Share | ||
The weighted average common shares outstanding for both basic and diluted earnings per share for the years ended December 31, 2012 and 2011 was calculated using an aggregate of 500 million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the IPO. There were no Zoetis restricted stock units, stock options or performance shares outstanding prior to the IPO. | ||
Cash Equivalents | ||
Cash equivalents include items almost as liquid as cash, such as certificates of deposit and time deposits with maturity periods of three months or less when purchased. | ||
Significant investing activities that affect recognized property, plant and equipment, but that do not result in cash receipts or cash payments in the period are not included in the consolidated and combined statements of cash flows. Purchases of property, plant and equipment in Other current liabilities or Accounts payable at December 31, 2013 and 2012 were $16 million and $14 million, respectively, and were insignificant at December 31, 2011. | ||
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 heavily 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, 2013 and 2012, Accounts receivable, less allowance for doubtful accounts, of $1,138 million and $900 million, respectively, includes approximately $65 million and $43 million 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 and combined balance sheet 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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Benefit Plans | ||
Prior to the Separation from Pfizer, employees who met certain eligibility requirements participated in various defined benefit pension plans and postretirement plans administered and sponsored by Pfizer. Generally, most of our employees were eligible to participate in Pfizer’s pension plans. The combined statements of income for the years ended December 31, 2012 and 2011 and the pre-Separation period included in the consolidated statement of income for the year ended December 31, 2013, included all of the benefit plan expenses attributable to the animal health operations of Pfizer, including expenses associated with pension plans, postretirement plans and defined contribution plans. The expenses included allocations of direct expenses, as well as expenses that were deemed attributable to the animal health operations. The combined balance sheet as of December 31, 2012 included the benefit plan assets and liabilities of only those plans that were dedicated to animal health employees. The consolidated balance sheet as of December 31, 2013 includes those dedicated plans, as well as the benefit plan assets and liabilities that were transferred to Zoetis from Pfizer as part of the Separation. All dedicated benefit plans are pension plans. | ||
For the dedicated plans, we recognize the overfunded or underfunded status of defined benefit plans as an asset or liability on the consolidated and combined 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 heavily 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, 2013 and 2012, accruals for direct asset retirement obligations included in Other current liabilities are $0.1 million and $0.2 million, respectively, and included in Other noncurrent liabilities are $12 million and $15 million, respectively. | ||
Amounts recorded for asset retirement obligations can result from a complex series of judgments about future events and uncertainties and can rely heavily 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 heavily 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. | ||
Amounts recorded for share-based compensation can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Business Unit Equity | ||
Total business unit equity represents Pfizer’s equity investment in Zoetis and the net amounts due to or due from Pfizer. Recorded amounts reflect capital contributions and/or dividends, as well as the results of operations and other comprehensive income/(loss) for periods prior to the IPO. | ||
Reclassifications | ||
Interest expense, net of capitalized interest previously presented as a component of Other (income)/deductions, net, is currently presented separately in the consolidated and combined statements of income. |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures Acquisition and Divestitures (Notes) | 12 Months Ended | |
Dec. 31, 2013 | ||
Acquisitions and Divestitures [Abstract] | ' | |
Acquisition And Divestiture Activities [Text Block] | ' | |
Acquisitions, Divestitures and Certain Investments | ||
A. Acquisition of King Animal Health | ||
Description of the Transaction and Fair Value of Consideration Transferred | ||
On January 31, 2011 (the acquisition date), Pfizer completed its tender offer for the outstanding shares of common stock of King, including KAH, at a purchase price of $14.25 per share in cash and acquired approximately 92.5% of the outstanding shares. On February 28, 2011, Pfizer acquired all of the remaining shares of King for $14.25 per share in cash. As a result, the total fair value of consideration transferred by Pfizer for King was approximately $3.6 billion in cash ($3.2 billion, net of cash acquired), of which we estimate that approximately $345 million relates to KAH. | ||
In 2011, from the acquisition date of January 31, 2011, KAH contributed $329 million in revenue. We are unable to provide the results of operations attributable to KAH as those operations were substantially integrated by mid-2011. | ||
B. Divestitures | ||
On October 15, 2009, Pfizer acquired all the outstanding equity of Wyeth, including FDAH. In connection with the regulatory approval process of that acquisition, we were required to divest certain animal health assets: | ||
• | In 2010, we sold certain animal health products in Europe, including intellectual property rights exclusive to Europe as well as a manufacturing facility and finished goods inventory. The product portfolio was composed of both livestock and companion animal products from both legacy Wyeth and legacy Pfizer. In connection with this divestiture, we entered into transitional manufacturing service agreements with the buyer, which included certain purchasing and investment commitments related to the divested manufacturing facility. The incremental charges associated with these commitments were included in Cost of sales ($20 million in 2011) and Other (income)/deductions—net ($7 million in 2011). | |
• | In mid-2013, and as a result of a government-mandated sale, we sold certain product rights acquired from legacy Wyeth in Brazil. The proceeds from the sale were approximately $6 million, net of transactions costs, and we recognized a $6 million gain in Other (income)/deductions––net on the sale. | |
All of the divestiture transactions required transitional supply and service agreements, including technology transfers, where necessary and appropriate, as well as other customary ancillary agreements. | ||
C. Certain Investments | ||
Formation of Jilin Pfizer Guoyuan Animal Health Co., Ltd. | ||
In October 2011, Pfizer and Jilin Guoyuan Animal Health Company, Ltd. created a new company, Jilin Pfizer Guoyuan Animal Health Co., Ltd. (Jilin), which will focus on swine vaccine development and commercialization in China. In exchange for payments of approximately $14 million, we acquired a 45% equity interest in Jilin. We have determined that Jilin is a variable interest entity and that Zoetis is the primary beneficiary of Jilin since Zoetis (i) has the power to direct the activities of Jilin that most significantly impact Jilin’s economic performance, (ii) has the right to appoint the majority of the Board of Directors and (iii) has the obligation to absorb losses of Jilin that could potentially be significant to Jilin and the right to receive benefits from Jilin that could potentially be significant to Jilin. As such, since the formation of Jilin, we have included all of the operating results, assets, liabilities and cash flows of Jilin in our consolidated and combined financial statements. The 55% interest held by Jilin Guoyuan Animal Health Company is reflected in our consolidated and combined balance sheet as a noncontrolling interest. In connection with this investment, we recorded approximately $3 million in Identifiable intangible assets, consisting of a manufacturing license and an industrial land-use right in China, and approximately $10 million in Goodwill. |
Restructuring_Charges_and_Othe
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Notes) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||||||||||
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives | ' | ||||||||||||||||||||
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives | |||||||||||||||||||||
We incurred significant costs in connection with Pfizer’s cost-reduction initiatives (several programs initiated since 2005), and the acquisitions of FDAH on October 15, 2009 and KAH on January 31, 2011. | |||||||||||||||||||||
For example: | |||||||||||||||||||||
• | in connection with the cost-reduction/productivity initiatives, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems; and | ||||||||||||||||||||
• | in connection with our acquisition activity, we typically incur costs and charges associated with executing the transactions, integrating the acquired operations, which may include expenditures for consulting and the integration of systems and processes, product transfers and restructuring the consolidated company, which may include charges related to employees, assets and activities that will not continue in the consolidated company. | ||||||||||||||||||||
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 and cost-reduction/productivity initiatives follow: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||||||||||
Restructuring charges and certain acquisition-related costs: | |||||||||||||||||||||
Integration costs(a) | $ | 21 | $ | 26 | $ | 30 | |||||||||||||||
Restructuring charges (benefits)(b): | |||||||||||||||||||||
Employee termination costs | (23 | ) | 49 | 53 | |||||||||||||||||
Accelerated depreciation | 5 | — | — | ||||||||||||||||||
Asset impairment charges | 19 | 4 | — | ||||||||||||||||||
Exit costs | 4 | (1 | ) | 1 | |||||||||||||||||
Total direct | 26 | 78 | 84 | ||||||||||||||||||
Transaction costs(c) | — | — | 2 | ||||||||||||||||||
Integration costs(a) | — | 21 | 41 | ||||||||||||||||||
Restructuring charges(b): | |||||||||||||||||||||
Employee termination costs | — | 19 | 20 | ||||||||||||||||||
Asset impairment charges | — | 10 | 7 | ||||||||||||||||||
Exit costs | — | 7 | — | ||||||||||||||||||
Total allocated | — | 57 | 70 | ||||||||||||||||||
Total Restructuring charges and certain acquisition-related costs | 26 | 135 | 154 | ||||||||||||||||||
Other costs associated with cost-reduction/productivity initiatives: | |||||||||||||||||||||
Additional depreciation associated with asset restructuring––direct(d) | 1 | 11 | 9 | ||||||||||||||||||
Additional depreciation associated with asset restructuring––allocated(d) | 2 | 13 | 20 | ||||||||||||||||||
Implementation costs––direct(e) | — | — | 3 | ||||||||||||||||||
Implementation costs––allocated(e) | 1 | 9 | — | ||||||||||||||||||
Total costs associated with restructuring, acquisitions and cost-reduction/productivity initiatives | $ | 30 | $ | 168 | $ | 186 | |||||||||||||||
(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, as well as product transfer costs. | ||||||||||||||||||||
(b) | The restructuring charges (benefits) for the year ended December 31, 2013 are primarily related to the following: | ||||||||||||||||||||
• | When we were a business unit of Pfizer, we announced a restructuring plan related to our operations in Europe. In connection with these actions, we recorded a pre-tax charge of $27 million to recognize employee termination costs. As a result of becoming an independent public company (no longer being a majority-owned subsidiary of Pfizer) and related economic consideration, we revisited this restructuring action and decided to no longer implement this restructuring plan. As such, we reversed the existing reserve of $27 million in the second quarter of 2013. | ||||||||||||||||||||
• | We recorded asset impairment charges related to one of our manufacturing facilities of $17 million. | ||||||||||||||||||||
• | We recorded restructuring charges related to the exiting of certain leased manufacturing and research facilities and recorded employee termination expenses of $2 million, exit costs of $4 million, and accelerated depreciation of $5 million. | ||||||||||||||||||||
The direct restructuring charges (benefits) are associated with the following: | |||||||||||||||||||||
• | For the year ended December 31, 2013––EuAfME ($4 million), CLAR ($4 million) and manufacturing/research/corporate ($3 million income). | ||||||||||||||||||||
• | For the year ended December 31, 2012—EuAfME ($51 million), CLAR ($3 million), APAC ($1 million income) and manufacturing/research/corporate ($1 million income). | ||||||||||||||||||||
• | For the year ended December 31, 2011––U.S. ($2 million), EuAfME ($33 million), CLAR ($2 million), APAC ($2 million income) and manufacturing/research/corporate ($19 million). | ||||||||||||||||||||
(c) | Transaction costs represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services. | ||||||||||||||||||||
(d) | Additional depreciation associated with asset restructuring represents the impact of changes in the estimated lives of assets involved in restructuring actions. In 2013, included in Cost of sales ($1 million) and Selling, general and administrative expenses ($2 million). For 2012, included in Cost of sales ($10 million), Selling, general and administrative expenses ($5 million) and Research and development expenses ($9 million). For 2011, included in Cost of sales ($6 million), Selling, general and administrative expenses ($4 million) and Research and development expenses ($19 million). | ||||||||||||||||||||
(e) | Implementation costs—allocated represent external, incremental costs directly related to implementing cost reduction/productivity initiatives, and primarily include expenditures related to system and process standardization and the expansion of shared services. Included in Selling, general and administrative expenses. | ||||||||||||||||||||
The components of and changes in our direct restructuring accruals follow: | |||||||||||||||||||||
Employee | Asset | ||||||||||||||||||||
Termination | Impairment | Accelerated | Exit | ||||||||||||||||||
(MILLIONS OF DOLLARS) | Costs | Charges | Depreciation | Costs | Accrual | ||||||||||||||||
Balance, December 31, 2010 | $ | 90 | $ | — | $ | — | $ | 11 | $ | 101 | |||||||||||
Provision/(Benefit) | 53 | — | — | 1 | 54 | ||||||||||||||||
Utilization and other(a) | (73 | ) | — | — | (1 | ) | (74 | ) | |||||||||||||
Balance, December 31, 2011 | 70 | — | — | 11 | 81 | ||||||||||||||||
Provision/(Benefit) | 49 | 4 | — | (1 | ) | 52 | |||||||||||||||
Utilization and other(a) | (51 | ) | (4 | ) | — | (4 | ) | (59 | ) | ||||||||||||
Balance, December 31, 2012(b) | 68 | — | — | 6 | 74 | ||||||||||||||||
Provision/(Benefit) | (23 | ) | 19 | 5 | 4 | 5 | |||||||||||||||
Utilization and other(a) | (16 | ) | — | (4 | ) | (20 | ) | ||||||||||||||
Non-cash activity | — | (19 | ) | (5 | ) | — | (24 | ) | |||||||||||||
Separation adjustment(c) | (14 | ) | — | — | — | (14 | ) | ||||||||||||||
Balance, December 31, 2013(b) | $ | 15 | $ | — | $ | — | $ | 6 | $ | 21 | |||||||||||
(a) | Includes adjustments for foreign currency translation. | ||||||||||||||||||||
(b) | At December 31, 2013 and 2012, included in Other current liabilities ($13 million and $63 million, respectively) and Other noncurrent liabilities ($8 million and $11 million, respectively). | ||||||||||||||||||||
(c) | See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation. |
Other_IncomeDeductions_Net_Not
Other (Income)/Deductions - Net (Notes) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Other Income and Expenses [Abstract] | ' | ||||||||||||
Other (Income)/Deductions - Net | ' | ||||||||||||
Other (Income)/Deductions—Net | |||||||||||||
The components of Other (income)/deductions—net follow: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
Royalty-related income | $ | (23 | ) | $ | (32 | ) | $ | (26 | ) | ||||
Identifiable intangible asset impairment charges(a) | 1 | 5 | 69 | ||||||||||
Net gain on sale of assets(b) | (6 | ) | — | — | |||||||||
Certain legal matters, net(c) | 1 | (19 | ) | — | |||||||||
Foreign currency (gain)/loss(d) | 20 | — | (1 | ) | |||||||||
Other, net | (2 | ) | — | 6 | |||||||||
Other (income)/deductions—net | $ | (9 | ) | $ | (46 | ) | $ | 48 | |||||
(a) | In 2012, the intangible asset impairment charges include (i) approximately $2 million of finite-lived companion animal developed technology rights; (ii) approximately $1 million of finite-lived trademarks related to genetic testing services; and (iii) approximately $2 million of finite-lived patents related to poultry technology. The asset impairment charges for 2012 reflect, among other things, loss of revenue as a result of negative market conditions and, with respect to the poultry technology, a re-assessment of economic viability. In 2011, the asset impairment charges include (i) approximately $30 million of finite-lived intangible assets related to parasiticides technology as a result of declining gross margins and increased competition; (ii) approximately $12 million of finite-lived intangible assets related to equine influenza and tetanus technology due to third-party supply issues; (iii) approximately $10 million of finite-lived intangible assets related to genetic testing services that did not find consumer acceptance; and (iv) approximately $17 million related to IPR&D projects (acquired from Vetnex in 2010 and from FDAH in 2009), as a result of the termination of the development programs due to a re-assessment of economic viability. | ||||||||||||
(b) | For 2013, represents the net gain on the government-mandated sale of certain product rights in Brazil that were acquired with the FDAH acquisition in 2009. | ||||||||||||
(c) | For 2012, represents income from a favorable legal settlement related to an intellectual property matter ($14 million) and a change in estimate for an environmental-related reserve due to a favorable settlement ($7 million income) partially offset by litigation-related charges ($2 million). | ||||||||||||
(d) | For 2013, includes a foreign currency loss of $9 million incurred in the first quarter of 2013 related to the Venezuela currency devaluation in February 2013 and other foreign currency losses in the fourth quarter of 2013 primarily related to Argentina. |
Income_Taxes_Notes
Income Taxes (Notes) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
Tax Matters | |||||||||||||
A. Taxes on Income | |||||||||||||
As of the Separation date, we operate under a new standalone legal entity structure. In connection with the Separation, adjustments have been made to the income tax accounts. See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation. | |||||||||||||
For the periods prior to the Separation presented in the combined financial statements, Zoetis did not generally file separate tax returns since Zoetis was generally included in the tax grouping of other Pfizer entities within the respective entity’s tax jurisdiction. The income tax provision included in these combined financial statements has been calculated using the separate return basis, as if Zoetis filed a separate tax return. | |||||||||||||
The components of Income before provision for taxes on income follow: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
United States | $ | 238 | $ | 340 | $ | (239 | ) | ||||||
International | 452 | 370 | 633 | ||||||||||
Income before provision for taxes on income(a)(b) | $ | 690 | $ | 710 | $ | 394 | |||||||
The components of Provision for taxes on income based on the location of the taxing authorities follow: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
United States: | |||||||||||||
Current income taxes: | |||||||||||||
Federal | $ | 63 | $ | 132 | $ | (3 | ) | ||||||
State and local | 12 | 5 | (1 | ) | |||||||||
Deferred income taxes: | |||||||||||||
Federal | 10 | (7 | ) | (19 | ) | ||||||||
State and local | 2 | 11 | (3 | ) | |||||||||
Total U.S. tax provision/(benefit) | 87 | 141 | (26 | ) | |||||||||
International: | |||||||||||||
Current income taxes | 89 | 211 | 85 | ||||||||||
Deferred income taxes | 11 | (78 | ) | 87 | |||||||||
Total international tax provision | 100 | 133 | 172 | ||||||||||
Provision for taxes on income(a)(b)(c) | $ | 187 | $ | 274 | $ | 146 | |||||||
(a) | In 2013, the Provision for taxes on income reflects the following: | ||||||||||||
• | U.S. tax expense of approximately $3 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes); | ||||||||||||
• | U.S. tax benefit related to U.S. Research and Development Tax Credit which was retroactively extended on January 3, 2013, and the U.S. Domestic Production Activities deduction; | ||||||||||||
• | Tax expense of approximately $25 million related to the establishment of valuation allowance; and | ||||||||||||
• | Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | ||||||||||||
(b) | In 2012, the Provision for taxes on income reflects the following: | ||||||||||||
• | U.S. tax benefits of approximately $29.3 million, representing tax and interest, resulting from a multi-year settlement with the U.S. Internal Revenue Service with respect to audits for the years 2006 through 2008, and international tax benefits of approximately $2.7 million, representing tax and interest, resulting from the resolution of certain tax positions pertaining to prior years with various foreign tax authorities and from the expiration of certain statutes of limitations; | ||||||||||||
• | U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes); | ||||||||||||
• | The expiration of the U.S. Research and Development Tax Credit on December 31, 2011; and | ||||||||||||
• | Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | ||||||||||||
(c) | In 2011, the Provision for taxes on income reflects the following: | ||||||||||||
• | U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside of the United States that will not be indefinitely reinvested overseas; and | ||||||||||||
• | U.S. tax benefits of approximately $9.5 million, representing tax and interest, resulting from the tax benefit recorded in connection with the settlement of certain audits with the U.S. Internal Revenue Service. | ||||||||||||
Tax Rate Reconciliation | |||||||||||||
The reconciliation of the U.S. statutory income tax rate to our effective tax rate follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
U.S. statutory income tax rate | 35 | % | 35 | % | 35 | % | |||||||
State and local taxes, net of federal benefits | 1 | 1.7 | (0.2 | ) | |||||||||
Taxation of non-U.S. operations(a)(b)(c) | (6.7 | ) | 5.6 | 2.7 | |||||||||
Unrecognized tax benefits and tax settlements and resolution of certain tax positions(d) | 1.1 | (4.1 | ) | (2.4 | ) | ||||||||
U.S. healthcare legislation(e) | — | (0.4 | ) | 0.3 | |||||||||
U.S. Research and Development Tax Credit and U.S. Domestic Production Activities deduction(f) | (1.2 | ) | (0.3 | ) | (2.3 | ) | |||||||
Non-deductible / non-taxable items(g) | 0.5 | 0.8 | 2.1 | ||||||||||
All other—net | (2.6 | ) | 0.3 | 1.9 | |||||||||
Effective tax rate | 27.1 | % | 38.6 | % | 37.1 | % | |||||||
(a) | For taxation of non-U.S. operations, this rate impact reflects the income tax rates and relative earnings in the locations where we do business outside of the United States, together with the cost of repatriation decisions, as well as changes in uncertain tax positions not included in the reconciling item called “Unrecognized tax benefits and tax settlements and resolution of certain tax positions”: (i) the jurisdictional mix of earnings is a component of our effective tax rate each year as tax rates outside of the U.S. are generally lower than the U.S. statutory income tax rate. The rate impact of the jurisdictional mix of earnings is influenced by the specific location of non-U.S. earnings and the level of such earnings as compared to our total earnings. This rate impact is then offset or more than offset by the cost of repatriation decisions and other U.S. tax implications of our foreign operations, which may significantly impact the taxation of non-U.S. operations; and (ii) the impact of changes in uncertain tax positions not included in the reconciling item called “Unrecognized tax benefits and tax settlements and resolution of certain tax positions” is a component of our effective tax rate each year that can result in either an increase or decrease to our effective tax rate. The jurisdictional mix of earnings, which includes the impact of the location of earnings as well as repatriation costs, can vary as a result of the 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, asset impairments and gains and losses on asset divestitures. | ||||||||||||
(b) | The rate impact of taxation of non-U.S. operations was a decrease to our effective tax rate in 2013 due to (i) the jurisdictional mix of earnings as tax rates outside of the United States are generally lower than the U.S. statutory income tax rate; and (ii) incentive tax rulings in Belgium effective December 1, 2012 and in Singapore effective October 29, 2012. The rate impact of taxation of non-U.S. operations was an increase to our effective tax rate in 2012 and 2011 due to (i) the cost of repatriation decisions and other U.S. tax implications that more than offset the impact of the generally lower tax rates outside of the United States; (ii) the tax impact of non-deductible items in those jurisdictions; and (iii) the tax impact of changes in uncertain tax positions related to our non-U.S. operations. | ||||||||||||
(c) | In 2013, the impact to the rate due to increases in uncertain tax positions was more than offset by the jurisdictional mix of earnings and other U.S. tax implications of our foreign operations described in the above footnotes. The increase in the rate in 2012 as compared to 2011 is primarily due to increases in uncertain tax positions (see D. Tax Contingencies, for current and prior period increases to uncertain tax positions), of which a significant portion relates to our non-U.S. operations. | ||||||||||||
(d) | For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see A. Taxes on Income and D. Tax Contingencies. | ||||||||||||
(e) | The decrease in the rate in 2012 primarily relates to the tax benefit recorded in connection with the establishment of deferred income tax assets related to the Medicare Part D subsidy for retiree prescription drug coverage. | ||||||||||||
(f) | In 2013, the decrease in the rate was due to the benefit associated with the U.S. Research and Development Tax Credit. In 2012, no benefit from the U.S. Research and Development Tax Credit was reflected as the credit expired on December 31, 2011 and was not extended until January 2013. In all years, we received a benefit from the U.S. Domestic Production Activities deduction. | ||||||||||||
(g) | Non-deductible items include meals and entertainment expenses. | ||||||||||||
B. | Tax Matters Agreement | ||||||||||||
In connection with the Separation, we entered into a tax matters agreement with Pfizer that governs the parties' respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes. For additional information, see below and Note 17B. Transactions and Agreements with Pfizer—Agreements with Pfizer. | |||||||||||||
In connection with this agreement and the Separation, the activity in our income tax accounts reflects Separation Adjustments, including significant adjustments to the deferred income tax asset and liability accounts and the tax liabilities associated with uncertain tax positions. For additional information, see below and Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer—Adjustments Associated with the Separation. | |||||||||||||
In general, under the agreement: | |||||||||||||
• | Pfizer will be responsible for any U.S. federal, state, local or foreign income taxes and any U.S. state or local non-income taxes (and any related interest, penalties or audit adjustments and including those taxes attributable to our business) reportable on a consolidated, combined or unitary return that includes Pfizer or any of its subsidiaries (and us and/or any of our subsidiaries) for any periods or portions thereof ending on or prior to December 31, 2012. We will be responsible for the portion of any such taxes for periods or portions thereof beginning on or after January 1, 2013, as would be applicable to us if we filed the relevant tax returns on a standalone basis. | ||||||||||||
• | We will be responsible for any U.S. federal, state, local or foreign income taxes and any U.S. state or local non-income taxes (and any related interest, penalties or audit adjustments) that are reportable on returns that include only us and/or any of our subsidiaries, for all tax periods whether before or after the completion of the Separation. | ||||||||||||
• | Pfizer will be responsible for certain specified foreign taxes directly resulting from certain aspects of the Separation. | ||||||||||||
We will not generally be entitled to receive payment from Pfizer in respect of any of our tax attributes or tax benefits or any reduction of taxes of Pfizer. Neither party's obligations under the agreement will be limited in amount or subject to any cap. The agreement also assigns responsibilities for administrative matters, such as the filing of returns, payment of taxes due, retention of records and conduct of audits, examinations or similar proceedings. In addition, the agreement provides for cooperation and information sharing with respect to tax matters. | |||||||||||||
Pfizer will be primarily responsible for preparing and filing any tax return with respect to the Pfizer affiliated group for U.S. federal income tax purposes and with respect to any consolidated, combined, unitary or similar group for U.S. state or local or foreign income tax purposes or U.S. state or local non-income tax purposes that includes Pfizer or any of its subsidiaries, including those that also include us and/or any of our subsidiaries. We will generally be responsible for preparing and filing any tax returns that include only us and/or any of our subsidiaries. | |||||||||||||
The party responsible for preparing and filing a given tax return will generally have exclusive authority to control tax contests related to any such tax return. | |||||||||||||
C. 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: | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
(MILLIONS OF DOLLARS) | Assets (Liabilities) | ||||||||||||
Prepaid/deferred items | $ | 59 | $ | 69 | |||||||||
Inventories | 29 | 9 | |||||||||||
Intangibles | (111 | ) | (187 | ) | |||||||||
Property, plant and equipment | (92 | ) | (61 | ) | |||||||||
Employee benefits | 11 | 54 | |||||||||||
Restructuring and other charges | 4 | 27 | |||||||||||
Legal and product liability reserves | 13 | 20 | |||||||||||
Net operating loss/credit carryforwards | 30 | 219 | |||||||||||
Unremitted earnings | (3 | ) | (86 | ) | |||||||||
All other | (10 | ) | (3 | ) | |||||||||
Subtotal | (70 | ) | 61 | ||||||||||
Valuation allowance | (107 | ) | (69 | ) | |||||||||
Net deferred tax liability(a)(b) | $ | (177 | ) | $ | (8 | ) | |||||||
(a) | 2013 vs. 2012-The significant increase in the total net deferred tax liability from December 31, 2012 to December 31, 2013 is primarily attributable to the Separation Adjustments, predominantly related to deferred tax assets associated with net operating loss/credit carryforwards and deferred tax liabilities associated with unremitted earnings that were retained by Pfizer, partially offset by an increase in valuation allowances representing the amounts determined to be unrecoverable. See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation. | ||||||||||||
(b) | In 2013, included in Current deferred tax assets ($97 million), Noncurrent deferred tax assets ($63 million), Other current liabilities ($15 million) and Noncurrent deferred tax liabilities ($322 million). In 2012, included in Current deferred tax assets ($101 million), Noncurrent deferred tax assets ($216 million), Other current liabilities ($2 million) and Noncurrent deferred tax liabilities ($323 million). | ||||||||||||
We have carryforwards, primarily related to net operating losses, which are available to reduce future foreign and U.S. state income taxes payable with either an indefinite life or expiring at various times from 2014 to 2033. | |||||||||||||
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, 2013, a valuation allowance of $107 million has been recorded to record 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, 2013, the cumulative amount of such undistributed earnings was $1.2 billion, for which we have not provided U.S. federal income and foreign withholding taxes. As these earnings are intended to be indefinitely reinvested overseas, as of December 31, 2013, we cannot predict the time or manner of such potential repatriation. As such, it is not practicable to estimate the amount of the deferred tax liability associated with these unremitted earnings due to the complexity of its hypothetical calculation. | |||||||||||||
D. 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 4. 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 4. 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, 2013 and 2012, we had approximately $44 million and $112 million, respectively, in net liabilities associated with uncertain tax positions, excluding associated interest: | |||||||||||||
• | Tax assets associated with uncertain tax positions primarily represent our estimate of the potential tax benefits in one tax jurisdiction that could result from the payment of income taxes in another tax jurisdiction. These potential benefits generally result from cooperative efforts among taxing authorities, as required by tax treaties to minimize double taxation, commonly referred to as the competent authority process. The recoverability of these assets, which we believe to be more likely than not, is dependent upon the actual payment of taxes in one tax jurisdiction and, in some cases, the successful petition for recovery in another tax jurisdiction. As of December 31, 2013 and 2012, we had approximately $1 million and $32 million, respectively, in assets associated with uncertain tax positions recorded in 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) | 2013 | 2012 | 2011 | ||||||||||
Balance, January 1 | $ | (144 | ) | $ | (114 | ) | $ | (93 | ) | ||||
Adjustments associated with the Separation(a) | 115 | — | — | ||||||||||
Acquisitions(b) | — | — | (19 | ) | |||||||||
Increases based on tax positions taken during a prior period(c) | (2 | ) | (2 | ) | — | ||||||||
Decreases based on tax positions taken during a prior period(c)(d) | — | 40 | 1 | ||||||||||
Decreases based on cash payments for a prior period | 1 | 3 | 7 | ||||||||||
Increases based on tax positions taken during the current period(c) | (16 | ) | (73 | ) | (10 | ) | |||||||
Decreases based on tax positions taken during the current period | — | — | — | ||||||||||
Lapse in statute of limitations | 1 | 2 | — | ||||||||||
Balance, December 31(e) | $ | (45 | ) | $ | (144 | ) | $ | (114 | ) | ||||
(a) | The significant decrease in the total gross unrecognized tax benefits from December 31, 2012 to December 31, 2013 is primarily attributable to the elimination of net tax liabilities associated with uncertain tax positions that were retained by Pfizer. See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation. | ||||||||||||
(b) | The amount in 2011 primarily relates to the acquisition of KAH. | ||||||||||||
(c) | Primarily included in Provision for taxes on income. | ||||||||||||
(d) | In all years, the decreases are primarily a result of effectively settling certain issues with the U.S. and non-U.S. tax authorities. See A. Tax Matters—Taxes on Income. | ||||||||||||
(e) | In 2013, included in Noncurrent deferred tax assets ($6 million) and Other taxes payable ($39 million). In 2012, included in Noncurrent deferred tax assets ($6 million) and Other taxes payable ($138 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 and combined statements of income. In 2013, we recorded a net interest expense of $3 million; in 2012, we recorded a net interest expense of $1 million; and in 2011, interest expense was de minimis. Gross accrued interest totaled $11 million and $17 million as of December 31, 2013 and 2012, respectively, and were included in Other taxes payable. Accrued penalties are not significant. | ||||||||||||
Status of Tax Audits and Potential Impact on Accruals for Uncertain Tax Positions | |||||||||||||
We are subject to taxation in the United States including various states, and foreign jurisdictions. The United States is one of our major tax jurisdictions. The 2013 tax year is our only open audit year for U.S. Federal tax purposes (see B. Tax Matters Agreement for years prior to 2013). With respect to the United States, state tax years 2006-2011 are currently under audit. | |||||||||||||
In addition to the open audit years in the United States, we have open audit years in other major foreign tax jurisdictions, such as Canada (2009-2013), Asia-Pacific (2008-2013 primarily reflecting Australia, Japan, and Korea), Europe (2009-2013, primarily reflecting the United Kingdom, France, Italy, Spain and Germany) and Latin America (2005-2013, 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. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income/(Loss) (Notes) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||
Changes, net of tax, in accumulated other comprehensive loss follow: | |||||||||||||
Currency Translation | Accumulated | ||||||||||||
Adjustment | Benefit Plans | Other | |||||||||||
Net Unrealized | Actuarial | Comprehensive | |||||||||||
(MILLIONS OF DOLLARS) | Losses | Gains/(Losses) | Loss | ||||||||||
Balance, December 31, 2010 | $ | (63 | ) | $ | (11 | ) | $ | (74 | ) | ||||
Other comprehensive loss, net of tax | 4 | 5 | 9 | ||||||||||
Balance, December 31, 2011 | (59 | ) | (6 | ) | (65 | ) | |||||||
Other comprehensive loss, net of tax | (93 | ) | 1 | (92 | ) | ||||||||
Balance, December 31, 2012 | (152 | ) | (5 | ) | (157 | ) | |||||||
Other comprehensive loss, net of tax | (54 | ) | (2 | ) | (56 | ) | |||||||
Separation adjustments(a) | (6 | ) | — | (6 | ) | ||||||||
Balance, December 31, 2013 | $ | (212 | ) | $ | (7 | ) | $ | (219 | ) | ||||
(a) | See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation. |
Financial_Instruments_Notes
Financial Instruments (Notes) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Financial Instruments [Abstract] | ' | ||||||||||||||||||||||||||||
Financial Instruments | ' | ||||||||||||||||||||||||||||
Financial Instruments | |||||||||||||||||||||||||||||
The combined balance sheet for the year ended December 31, 2012 includes the financial assets and liabilities that are directly attributable to the animal health operations of Pfizer, except that the combined balance sheet also includes an allocation of long-term debt from Pfizer, see Note 3. Basis of Presentation. | |||||||||||||||||||||||||||||
A. | Debt | ||||||||||||||||||||||||||||
Credit Facilities | |||||||||||||||||||||||||||||
In December 2012, we entered into a revolving credit agreement with a syndicate of banks providing for a five-year $1.0 billion senior unsecured revolving credit facility (the credit facility), which became effective in February 2013 upon the completion of the IPO and expires in December 2017. Subject to certain conditions, we have the right to increase the credit facility to 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 4.35:1 for fiscal year 2013, 3.95:1 for fiscal year 2014, 3.50:1 for fiscal year 2015 and 3.00:1 thereafter. The credit facility also contains a financial covenant requiring that we maintain a minimum interest coverage ratio (the ratio of EBITDA at the end of the period to interest expense for such period) of 3.50:1. In addition, the credit facility contains other customary covenants. We were in compliance with all financial covenants as of December 31, 2013. There were no borrowings outstanding as of December 31, 2013. | |||||||||||||||||||||||||||||
We have additional lines of credit 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, 2013, we had access to $69 million of lines of credit which expire at various times through 2016. As of December 31, 2013, we had $15 million of short-term borrowings outstanding and $2 million of long-term borrowings outstanding related to these facilities. | |||||||||||||||||||||||||||||
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, 2013, no commercial paper has been issued under this program. | |||||||||||||||||||||||||||||
Short-Term Borrowings | |||||||||||||||||||||||||||||
There were short-term borrowings of $15 million as of December 31, 2013 (see A. Credit Facilities). As of December 31, 2012 the current portion of allocated debt from Pfizer was $73 million. The weighted-average interest rate on short-term borrowings outstanding, including the current portion of allocated debt, was 5.7% and 3.7% as of December 31, 2013 and December 31, 2012, respectively. | |||||||||||||||||||||||||||||
Senior Notes Offering and Other Long-Term Debt | |||||||||||||||||||||||||||||
On January 28, 2013, we issued $3.65 billion aggregate principal amount of our senior notes (the senior notes offering) in a private placement, with an original issue discount of $10 million. The senior notes are comprised of $400 million aggregate principal amount of our 1.150% senior notes due 2016, $750 million aggregate principal amount of our 1.875% senior notes due 2018, $1.35 billion aggregate principal amount of our 3.250% senior notes due 2023 and $1.15 billion aggregate principal amount of our 4.700% senior notes due 2043. | |||||||||||||||||||||||||||||
We sold $2.65 billion aggregate principal amount of our senior notes through the initial purchasers in the senior notes offering and Pfizer transferred $1.0 billion aggregate principal amount of our senior notes to certain of the initial purchasers, who sold such senior notes in the senior notes offering. | |||||||||||||||||||||||||||||
The senior notes are governed by an indenture and supplemental indenture (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-leaseback 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, 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. Pursuant to our tax matters agreement with Pfizer, we will not be permitted to redeem the 2023 notes pursuant to this optional redemption provision, except under limited circumstances. 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. | |||||||||||||||||||||||||||||
In connection with the senior notes offering, we entered into a registration rights agreement (Registration Rights Agreement) with the representatives of the initial purchasers of the senior notes. Pursuant to the terms of the Registration Rights Agreement, we were obligated, among other things, to use our commercially reasonable efforts to file a registration statement with the Securities and Exchange Commission (SEC) enabling holders of the senior notes to exchange the privately placed notes for publicly registered notes with substantially the same terms. We filed the registration statement with the SEC on September 13, 2013, the SEC declared the registration statement effective on September 24, 2013, and the exchange offer was completed on October 31, 2013. | |||||||||||||||||||||||||||||
The components of our long-term debt follow: | |||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | |||||||||||||||||||||||||||
Allocated long-term debt | $ | — | $ | 509 | |||||||||||||||||||||||||
Lines of credit | 2 | — | |||||||||||||||||||||||||||
1.150% Senior Notes due 2016 | 400 | — | |||||||||||||||||||||||||||
1.875% Senior Notes due 2018 | 750 | — | |||||||||||||||||||||||||||
3.250% Senior Notes due 2023 | 1,350 | — | |||||||||||||||||||||||||||
4.700% Senior Notes due 2043 | 1,150 | — | |||||||||||||||||||||||||||
3,652 | 509 | ||||||||||||||||||||||||||||
Unamortized debt discount | (10 | ) | — | ||||||||||||||||||||||||||
Long-term debt / Allocated long-term debt | $ | 3,642 | $ | 509 | |||||||||||||||||||||||||
As of December 31, 2013, the fair value of our long-term debt was $3,526 million and has been determined using a third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data and Zoetis’ credit rating (Level 2 inputs). At December 31, 2012, the fair value of our allocated long-term debt was $732 million, and has been determined using a third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data and Pfizer’s credit rating (Level 2 inputs). See Note 4. Significant Accounting Policies— Fair Value. The fair value of the allocated long-term debt as of December 31, 2012 does not purport to reflect the fair value that might have been determined if Zoetis had operated as an independent public company for the periods presented or if we had used Zoetis’ credit rating in the calculation. | |||||||||||||||||||||||||||||
The principal amount of long-term debt outstanding as of December 31, 2013 matures in the following years: | |||||||||||||||||||||||||||||
After | |||||||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2014 | 2015 | 2016 | 2017 | 2018 | 2018 | Total | ||||||||||||||||||||||
Maturities | $ | — | $ | — | $ | 401 | $ | 1 | $ | 750 | $ | 2,500 | $ | 3,652 | |||||||||||||||
Interest Expense | |||||||||||||||||||||||||||||
Interest expense, net of capitalized interest, was $113 million for 2013, $31 million for 2012 and $36 million for 2011. Capitalized interest expense was $3 million for the year ended December 31, 2013. We did not have capitalized interest expense for the years ended December 31, 2012 and 2011. | |||||||||||||||||||||||||||||
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. Prior to the IPO, as a business unit of Pfizer and under Pfizer's global cash management system, our foreign exchange risk was managed through Pfizer. Following the Separation, 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 derivative financial instruments. These financial instruments serve to protect net income against the impact of the translation into U.S. dollars of certain foreign exchange-denominated transactions. As of December 31, 2013, the aggregate notional amount of foreign exchange derivative financial instruments offsetting foreign currency exposures was $1.4 billion. The derivative financial instruments primarily offset exposures in the euro, the Brazilian real and the Australian dollar. The vast majority of the foreign exchange derivative financial instruments mature within 60 days and all mature within 180 days. | |||||||||||||||||||||||||||||
All derivative contracts used to manage foreign currency risk are measured at fair value and are reported as assets or liabilities on the consolidated balance sheet. The company has not designated the foreign currency forward-exchange contracts as hedging instruments. We recognize the gains and losses on forward-exchange contracts 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. | |||||||||||||||||||||||||||||
Fair Value of Derivative Instruments | |||||||||||||||||||||||||||||
The location and fair values of derivative instruments not designated as hedging instruments at December 31, 2013 are as follows: | |||||||||||||||||||||||||||||
Fair Value of | |||||||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | Balance Sheet Location | Derivatives | |||||||||||||||||||||||||||
Foreign currency forward-exchange contracts | Other current assets | $ | 10 | ||||||||||||||||||||||||||
Foreign currency forward-exchange contracts | Other current liabilities | (5 | ) | ||||||||||||||||||||||||||
Total foreign currency forward-exchange contracts | $ | 5 | |||||||||||||||||||||||||||
We use a market approach in valuing financial instruments on a recurring basis. Our derivative financial instruments measured at fair value on a recurring basis use Level 2 inputs in the calculation of fair value. See Note 4. Significant Accounting Policies— Fair Value. | |||||||||||||||||||||||||||||
The net gains incurred on foreign currency forward-exchange contracts not designated as hedging instruments were $27 million for the year ended December 31, 2013, respectively, and are recorded in Other (income)/deductions—net. This amount was substantially offset in Other (income)/deductions—net by the effect of changing exchange rates on the underlying foreign currency exposures. |
Inventories_Notes
Inventories (Notes) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
Inventories | |||||||||
The components of inventory follow: | |||||||||
December 31, | December 31, | ||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | |||||||
Finished goods | $ | 862 | $ | 799 | |||||
Work-in-process | 218 | 332 | |||||||
Raw materials and supplies | 213 | 214 | |||||||
Inventories | $ | 1,293 | $ | 1,345 | |||||
Property_Plant_and_Equipment_P
Property, Plant and Equipment Property, Plant and Equipment (Notes) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | ||||||||||
Property, Plant and Equipment | |||||||||||
The components of property, plant and equipment follow: | |||||||||||
Useful Lives | As of December 31, | ||||||||||
(MILLIONS OF DOLLARS) | (Years) | 2013 | 2012 | ||||||||
Land | — | $ | 36 | $ | 35 | ||||||
Buildings | 33 1/3 - 50 | 883 | 860 | ||||||||
Machinery and equipment | 20-Aug | 1,062 | 1,071 | ||||||||
Furniture, fixtures and other | 3 - 12 1/2 | 143 | 127 | ||||||||
Construction-in-progress | — | 199 | 159 | ||||||||
2,323 | 2,252 | ||||||||||
Less: Accumulated depreciation | 1,028 | 1,011 | |||||||||
Property, plant and equipment | $ | 1,295 | $ | 1,241 | |||||||
Depreciation expense was $146 million in 2013, $133 million in 2012 and $135 million in 2011. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets (Notes) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||||||||||
Goodwill and Other Intangible Assets | |||||||||||||||||||||||||
A. | Goodwill | ||||||||||||||||||||||||
The components of, and changes in, the carrying amount of goodwill follow: | |||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | U.S. | EuAfME | CLAR | APAC | Total | ||||||||||||||||||||
Balance, December 31, 2011 | $ | 504 | $ | 157 | $ | 164 | $ | 164 | $ | 989 | |||||||||||||||
Other(a) | (2 | ) | — | (1 | ) | (1 | ) | (4 | ) | ||||||||||||||||
Balance, December 31, 2012 | $ | 502 | $ | 157 | $ | 163 | $ | 163 | $ | 985 | |||||||||||||||
Other(a) | (1 | ) | — | (1 | ) | (1 | ) | (3 | ) | ||||||||||||||||
Balance, December 31, 2013 | $ | 501 | $ | 157 | $ | 162 | $ | 162 | $ | 982 | |||||||||||||||
(a) | Primarily reflects adjustments for foreign currency translation. | ||||||||||||||||||||||||
The gross goodwill balance was $1,518 million as of December 31, 2013 and $1,521 million as of December 31, 2012. Accumulated goodwill impairment losses (generated entirely in fiscal 2002) were $536 million as of December 31, 2013 and December 31, 2012. | |||||||||||||||||||||||||
B. | Other Intangible Assets | ||||||||||||||||||||||||
The components of identifiable intangible assets follow: | |||||||||||||||||||||||||
As of December 31, 2013 | As of December 31, 2012 | ||||||||||||||||||||||||
Identifiable | Identifiable | ||||||||||||||||||||||||
Gross | Intangible Assets, | Gross | Intangible Assets, | ||||||||||||||||||||||
Carrying | Accumulated | Less Accumulated | Carrying | Accumulated | Less Accumulated | ||||||||||||||||||||
(MILLIONS OF DOLLARS) | Amount | Amortization | Amortization | Amount | Amortization | Amortization | |||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||
Developed technology rights | $ | 762 | $ | (219 | ) | $ | 543 | $ | 762 | $ | (173 | ) | $ | 589 | |||||||||||
Brands | 216 | (100 | ) | 116 | 216 | (88 | ) | 128 | |||||||||||||||||
Trademarks and trade names | 59 | (38 | ) | 21 | 54 | (36 | ) | 18 | |||||||||||||||||
Other | 121 | (116 | ) | 5 | 122 | (115 | ) | 7 | |||||||||||||||||
Total finite-lived intangible assets | 1,158 | (473 | ) | 685 | 1,154 | (412 | ) | 742 | |||||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||
Brands | 39 | — | 39 | 39 | — | 39 | |||||||||||||||||||
Trademarks and trade names | 67 | — | 67 | 67 | — | 67 | |||||||||||||||||||
In-process research and development | 12 | — | 12 | 20 | — | 20 | |||||||||||||||||||
Total indefinite-lived intangible assets | 118 | — | 118 | 126 | — | 126 | |||||||||||||||||||
Identifiable intangible assets | $ | 1,276 | $ | (473 | ) | $ | 803 | $ | 1,280 | $ | (412 | ) | $ | 868 | |||||||||||
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 cattle, swine, poultry, fish, sheep, dogs, cats and horses. | |||||||||||||||||||||||||
Brands | |||||||||||||||||||||||||
Brands represent the amortized or unamortized cost associated with product name recognition, as the products themselves do not receive patent protection. The more significant finite-lived brands are Excenel, Lutalyse and Spirovac and the more significant indefinite-lived brands are the Linco family products and Mastitis. | |||||||||||||||||||||||||
Trademarks and Tradenames | |||||||||||||||||||||||||
Trademarks and tradenames represent the amortized or unamortized cost associated with legal trademarks and tradenames. The more significant components of indefinite-lived trademarks and tradenames are indefinite-lived trademarks and tradenames acquired from SmithKlineBeecham. The more significant finite-lived trademarks and tradenames are finite-lived trademarks and tradenames for vaccines acquired from CSL Animal Health. | |||||||||||||||||||||||||
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 FDAH. | |||||||||||||||||||||||||
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 United States 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. | |||||||||||||||||||||||||
For IPR&D assets, there can be no certainty that these assets ultimately will yield a successful product. | |||||||||||||||||||||||||
C. | Amortization | ||||||||||||||||||||||||
The weighted average life of our total finite-lived intangible assets, developed technology rights, and finite-lived brands is approximately 12 years. Total amortization expense for finite-lived intangible assets was $63 million in 2013, $67 million in 2012, and $70 million in 2011. | |||||||||||||||||||||||||
The annual amortization expense expected for the years 2014 through 2018 is as follows: | |||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||
Amortization expense | $ | 63 | $ | 62 | $ | 62 | $ | 62 | $ | 59 | |||||||||||||||
D. Impairments | |||||||||||||||||||||||||
For information about intangible asset impairments, see Note 7. Other (Income)/Deductions––Net. |
Benefit_Plans
Benefit Plans | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||
Benefit Plans | ' | |||||||||
Benefit Plans | ||||||||||
The combined statements of income for the years ended December 31, 2012 and 2011 and the pre-Separation period included in the consolidated statement of income for the year ended December 31, 2013, included all of the benefit plan expenses attributable to the animal health operations of Pfizer, including expenses associated with pension plans, postretirement plans and defined contribution plans. The expenses included allocations of direct expenses, as well as expenses that were deemed attributable to the animal health operations. The combined balance sheet as of December 31, 2012 included the benefit plan assets and liabilities of only those plans that were dedicated to animal health employees. The consolidated balance sheet as of December 31, 2013 includes those dedicated plans, as well as the benefit plan assets and liabilities that were transferred to Zoetis from Pfizer as part of the Separation, as further discussed below. All dedicated benefit plans are pension plans. | ||||||||||
Prior to the Separation from Pfizer, employees who met certain eligibility requirements participated in various defined benefit pension plans and postretirement plans administered and sponsored by Pfizer. Generally, most of our employees were eligible to participate in Pfizer’s pension plans. An employee’s pension benefits were determined based on a combination of years of service and average earnings, as defined in the specific plans. Participants in Pfizer's U.S. plans generally vested in benefits after three years of service. Participant vesting in the international plans varies based on the specific plan in each country. | ||||||||||
Effective December 31, 2012, our employees ceased to participate in the Pfizer U.S. qualified defined benefit and U.S. retiree medical plans, and liabilities associated with our employees under these plans were retained by Pfizer. Pfizer is continuing to credit certain employees' service with Zoetis generally through December 31, 2017 (or termination of employment from Zoetis, if earlier) for certain early retirement benefits with respect to Pfizer's U.S. defined benefit pension and retiree medical plans. In connection with the employee matters agreement, Zoetis is responsible for payment of three-fifths of the total cost of the service credit continuation (approximately $38 million) for these plans and Pfizer is responsible for the remaining two-fifths of the total cost (approximately $25 million). The $25 million capital contribution from Pfizer and corresponding contra-equity account (which is being reduced as the service credit continuation is incurred) is included in Employee benefit plan contribution from Pfizer Inc. in the consolidated statement of equity. At December 31, 2013, the balance in the contra-equity account was approximately $23 million. The amount of the service cost continuation payment to be paid by Zoetis to Pfizer was determined and fixed based on an actuarial assessment of the value of the grow-in benefits and will be paid in equal installments over a period of ten years. Pension and postretirement benefit expense associated with the extended service for certain employees in the U.S. plans totaled approximately $6 million in 2013. For additional information see Note 19B. Transactions and Agreements with Pfizer—Agreements with Pfizer—Employee matters agreement. | ||||||||||
Pension expense, associated with the U.S. and certain significant international locations, totaled approximately $15 million in 2013 (inclusive of service cost grow-in benefits discussed above), $61 million in 2012 and $64 million in 2011. | ||||||||||
A. International Pension Plans | ||||||||||
As part of the Separation, certain Separation Adjustments (see Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer: Adjustments Associated with the Separation) were made to transfer the assets and liabilities of certain international defined benefit pension plans including Austria, France, Germany, India, Mexico, South Africa, Taiwan and Venezuela to Zoetis in 2013, and we assumed the liabilities allocable to employees transferring to us. Prior to the Separation, these benefit plans were accounted for as multi-employer plans. Also as part of the Separation Adjustments, a benefit plan in Germany was retained by Pfizer. The net obligation of these transferred plans totaled $21 million. At December 31, 2013, the projected benefit obligation and fair value of plan assets of the dedicated international pension plans in the Netherlands, Germany, India and Korea, as well as those plans transferred in 2013, were $73 million and $45 million, respectively. Also as part of the Separation, a net liability has been recognized for the pension obligations less the fair value of plan assets associated with additional defined benefit pension plans in certain international locations that will be transferred to us in 2014 (approximately $21 million), in accordance with the applicable local separation agreements or employee matters agreement. | ||||||||||
Information about the dedicated pension plans (inclusive of plans transferred in 2013 as part of the Separation) is provided in the tables below. | ||||||||||
Virtually all of the dedicated pension plan assets are associated with the pension plan in the Netherlands. The Netherlands plan is financed through an insurance contract for which the insurer is responsible for the investment of the plan assets. The insurance contract covers certain investment and mortality risks in relation to accrued benefits earned in the plan. The assets held in the insurance contract are predominantly fixed income securities. The expected return on assets is determined based on the yields available on those assets. During 2012, the Netherlands manufacturing plant was sold. The active participants in the plan were transferred to the buyer at the time of sale and the plan liability associated with inactive participants remained with the insurance contract. The insurance contract, which is used to finance the plan, was also transferred to the buyer although we remain liable for the proportion of administrative costs that relate to inactive members under the terms of this contract through December 31, 2013. Under the terms of the sale agreement, the contract was terminated on December 31, 2013 (fiscal year 2014 for our international operations) and the liability for benefits associated with this plan reverted in full to the insurance company. The related settlement charge of approximately $4 million was recognized in the first quarter of 2014. | ||||||||||
Net Periodic Benefit Costs and Other Costs––Dedicated Plans | ||||||||||
The net periodic benefit cost associated with dedicated pension plans (including those transferred to us in 2013) recognized in our consolidated and combined statements of income is approximately $4 million in 2013, $2 million in 2012 and $3 million in 2011, the majority of which relate to service cost and interest cost. | ||||||||||
The other changes associated with dedicated pension plans recognized in our consolidated and combined statements of comprehensive income are approximately $2 million loss in 2013, $1 million income in 2012 and $5 million income in 2011. These other changes are primarily due to changes in actuarial assumptions and for 2013, reflects the Separation Adjustments associated with plans transferred to us from Pfizer. | ||||||||||
The amount in Accumulated other comprehensive loss expected to be amortized into 2014 net periodic benefit cost is $0.2 million attributable to the amortization of previously unrecognized actuarial losses. | ||||||||||
Actuarial Assumptions––Dedicated Plans | ||||||||||
The following table provides the weighted average actuarial assumptions for the dedicated pension plans: | ||||||||||
As of December 31, | ||||||||||
(PERCENTAGES) | 2013 | 2012 | 2011 | |||||||
Weighted average assumptions used to determine benefit obligations: | ||||||||||
Discount rate | 5 | % | 4.6 | % | 5.8 | % | ||||
Rate of compensation increase | 4.4 | % | 5.3 | % | 2.7 | % | ||||
Weighted average assumptions used to determine net benefit cost for the year ended December 31: | ||||||||||
Discount rate | 4.6 | % | 5.8 | % | 5.1 | % | ||||
Expected return on plan assets | 4.5 | % | 3.6 | % | 3.6 | % | ||||
Rate of compensation increase | 5.3 | % | 2.7 | % | 2.7 | % | ||||
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. In 2013 and 2012, the calculation of the weighted average expected rate of compensation increase used to determine benefit obligations excludes the Netherlands plan as that plan has no active participants at December 31, 2013 and 2012. | ||||||||||
Actuarial and other assumptions for pension plans can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For a description of the risks associated with estimates and assumptions, see Note 4. Significant Accounting Policies—Estimates and Assumptions. | ||||||||||
Obligations and Funded Status––Dedicated Plans | ||||||||||
An analysis of the changes in our benefit obligations, plan assets and funded status of our dedicated plans follows: | ||||||||||
As of and for the | ||||||||||
Year Ended December 31, | ||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | ||||||||
Change in benefit obligation: | ||||||||||
Projected benefit obligation, beginning | $ | 39 | $ | 37 | ||||||
Separation adjustments(a) | 28 | — | ||||||||
Changes in actuarial assumptions and other | (2 | ) | 2 | |||||||
Adjustments for foreign currency translation | 2 | (1 | ) | |||||||
Other––net | 6 | 1 | ||||||||
Benefit obligation, ending | 73 | 39 | ||||||||
Change in plan assets: | ||||||||||
Fair value of plan assets, beginning | 35 | 33 | ||||||||
Separation adjustments(a) | 7 | — | ||||||||
Actual return on plan assets | — | 2 | ||||||||
Company contributions | — | 2 | ||||||||
Adjustments for foreign currency translation | 2 | (1 | ) | |||||||
Other––net | 1 | (1 | ) | |||||||
Fair value of plan assets, ending | 45 | 35 | ||||||||
Funded status—Projected benefit obligation in excess of plan assets at end of year(b) | $ | (28 | ) | $ | (4 | ) | ||||
(a) | Represents the benefit obligations and plan assets (net obligation of approximately $21 million) transferred to us in 2013 from Pfizer as part of the Separation, as described above. | |||||||||
(b) | Included in Other noncurrent liabilities. | |||||||||
Actuarial losses were approximately $10 million at December 31, 2013 and $5 million at December 31, 2012. 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 income/(loss). At December 31, 2013 and 2012, the actuarial losses included approximately $4 million and $3 million, respectively, associated with the Netherlands plan. The actuarial loss associated with the Netherlands plan was recognized into net periodic benefit costs in full as a result of the termination of the insurance contract associated with the Netherlands plan in the first quarter of 2014. The remaining losses will be amortized into net periodic benefit costs over an average period of 12.4 years. | ||||||||||
Information related to the funded status of selected plans follows: | ||||||||||
As of December 31, | ||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | ||||||||
Pension plans with an accumulated benefit obligation in excess of plan assets: | ||||||||||
Fair value of plan assets | $ | 37 | $ | 35 | ||||||
Accumulated benefit obligation | 58 | 38 | ||||||||
Pension plans with a projected benefit obligation in excess of plan assets: | ||||||||||
Fair value of plan assets | 42 | 35 | ||||||||
Projected benefit obligation | 70 | 39 | ||||||||
Plan Assets—Dedicated Plans | ||||||||||
The components of plan assets follow: | ||||||||||
As of December 31, | ||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | ||||||||
Cash and cash equivalents | $ | — | $ | 1 | ||||||
Equity securities: Equity commingled funds | 7 | 5 | ||||||||
Debt securities: Government bonds | 31 | 28 | ||||||||
Real estate | 2 | 1 | ||||||||
Other investments | 5 | — | ||||||||
Total(a) | $ | 45 | $ | 35 | ||||||
(a) | Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 4. Significant Accounting Policies—Fair Value). All 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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Note 4. 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. | |||||||||
• | Government bonds and other investments––principally observable market prices. | |||||||||
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 | ||||||||||
percentage | Percentage of Plan Assets | |||||||||
(PERCENTAGES) | 2013 | 2013 | 2012 | |||||||
Cash and cash equivalents | 0-20% | — | % | 1.8 | % | |||||
Equity securities | 0-20% | 14.2 | % | 13 | % | |||||
Debt securities | 65-80% | 70.1 | % | 79.5 | % | |||||
Other investments | 0-20% | 15.7 | % | 5.7 | % | |||||
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. | ||||||||||
Contributions to the dedicated plans were approximately $2 million per year in 2013, 2012 and 2011. We expect to contribute approximately $1 million to our dedicated pension plans in 2014. The benefit payment for 2014 is expected to be approximately $39 million as the majority of this payment is expected to be made in association with the planned settlement of the liability for the Netherlands plan. Zoetis will fund virtually all of the plan settlement using the existing plan assets. The expected benefit payment for each of the next four years is approximately $1 million per year, and approximately $12 million in the aggregate for the five years thereafter. These expected benefit payments reflect the future plan benefits subsequent to 2014 projected to be paid from the plans or from the general assets of Zoetis entities in India, Korea, Mexico and Taiwan 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. | ||||||||||
Multi-employer Plans | ||||||||||
Pension expense associated with certain international benefit plans that are expected to transfer to us from Pfizer in 2014, and accounted for as multi-employer plans, was approximately $7 million in 2013, $6 million in 2012 and $5 million in 2011. Contributions to these plans were approximately $6 million per year in 2013, 2012 and 2011. We expect to contribute a total of approximately $7 million to these plans in 2014. | ||||||||||
B. Postretirement Plans | ||||||||||
Prior to the Separation from Pfizer, many of our employees were eligible to participate in postretirement plans sponsored by Pfizer. As discussed above, Pfizer is continuing to credit certain United States employees' service with Zoetis generally through December 31, 2017 (or termination of employment from Zoetis, if earlier) for certain early retirement benefits with respect to Pfizer's U.S. retiree medical plans. Postretirement benefit expense, associated with the U.S. and certain significant international locations, totaled approximately $4 million in 2013 (inclusive of service cost grow-in benefits discussed above), $17 million in 2012 and $17 million in 2011. The expected benefit payments for each of the next five years is approximately $4 million per year, and approximately $14 million in the aggregate for the five years thereafter. | ||||||||||
Also prior to the Separation from Pfizer, employees in the United States who met certain eligibility requirements participated in a supplemental (non-qualified) savings plan sponsored by Pfizer. In 2013, Pfizer transferred the supplemental savings plan liability of approximately $14 million, cash of $9 million and a deferred tax asset of $5 million associated with employees transferred to us. Post-Separation, employees in the United States who meet certain eligibility requirements participate in a supplemental (non-qualified) savings plan sponsored by Zoetis. | ||||||||||
C. Defined Contribution Plans | ||||||||||
Zoetis has a voluntary defined contribution plan (Zoetis Savings Plan) 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 Zoetis Savings Plan 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 Zoetis Savings Plan. 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 (initially made into the Zoetis stock fund) into any of the funds offered. These funds provide participants with a cross section of investing options, including the Zoetis stock fund. Matching and profit-sharing contributions are funded through the issuance of Zoetis common stock. | ||||||||||
Prior to the Separation from Pfizer, our U.S. employees were eligible to participate in Pfizer’s defined contribution plans, whereby employees contributed a portion of their salaries and bonuses to the plans, which was partially matched by Pfizer, largely in Pfizer stock or Pfizer stock units. The matching contributions in Pfizer stock were sourced through open market purchases. | ||||||||||
Employees are permitted to subsequently 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 U.S. defined contribution plans, totaled approximately $35 million in 2013, $20 million in 2012 and $18 million in 2011. |
Sharebased_Payments_Notes
Share-based Payments (Notes) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Share-based Payments | ' | |||||||||||||
Share-Based Payments | ||||||||||||||
In January 2013, the Zoetis 2013 Equity and Incentive Plan (Equity Plan) became effective, in order to provide long-term incentives to, and facilitate the retention of, our employees. The principal types of stock-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 unit awards (DSUs), performance-based awards and other equity-based or cash-based awards. | ||||||||||||||
Twenty-five million shares of stock were approved and registered with the SEC 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, 2013, the aggregate number of remaining shares available for future grant under the Equity Plan was 20,728,313 shares. | ||||||||||||||
A. | Share-Based Compensation Expense | |||||||||||||
The components of share-based compensation expense follow: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | |||||||||||
Stock option expense | $ | 9 | $ | — | — | |||||||||
RSU / DSU expense | 9 | — | — | |||||||||||
Pfizer stock benefit plans—direct | 25 | 28 | 19 | |||||||||||
Share-based compensation expense—direct | 43 | 28 | 19 | |||||||||||
Share-based compensation expense—indirect | — | 5 | 6 | |||||||||||
Share-based compensation expense—total | $ | 43 | $ | 33 | 25 | |||||||||
Tax benefit for share-based compensation expense | (6 | ) | (10 | ) | (6 | ) | ||||||||
Share-based compensation expense, net of tax | $ | 37 | $ | 23 | $ | 19 | ||||||||
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 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 statement of income. The values determined through this fair-value-based method generally are amortized on a straight-line basis over the vesting term into Cost of sales, Selling, general and administrative expenses, or Research and development expenses, as appropriate. | ||||||||||||||
Eligible employees may receive Zoetis stock option grants. Zoetis stock options granted vest after three years of continuous service from the grant date 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, 2013 | ||||||||||||||
Expected dividend yield(a) | 1 | % | ||||||||||||
Risk-free interest rate(b) | 1.3 | % | ||||||||||||
Expected stock price volatility(c) | 28.21 | % | ||||||||||||
Expected term(d) (years) | 6.5 | |||||||||||||
(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 implied volatility. | |||||||||||||
(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, 2013: | ||||||||||||||
Weighted-Average | ||||||||||||||
Weighted-Average | Remaining | Aggregate | ||||||||||||
Exercise Price | Contractual Term | Intrinsic Value(a) | ||||||||||||
Shares | Per Share | (Years) | (MILLIONS) | |||||||||||
Outstanding, December 31, 2012 | — | $ | — | |||||||||||
Granted | 2,994,295 | 26.11 | ||||||||||||
Exercised | (6,419 | ) | 26 | |||||||||||
Forfeited | (108,312 | ) | 26.01 | |||||||||||
Outstanding, December 31, 2013 | 2,879,564 | $ | 26.11 | 9.1 | $ | 19 | ||||||||
Exercisable, December 31, 2013 | 22,388 | $ | 26 | 9.1 | $ | — | ||||||||
(a) | Market price of underlying Zoetis common stock less exercise price. | |||||||||||||
The following table summarizes data related to stock option activity: | ||||||||||||||
Year Ended/As of | ||||||||||||||
(MILLIONS OF DOLLARS, EXCEPT PER STOCK OPTION AMOUNTS) | December 31, 2013 | |||||||||||||
Weighted-average grant date fair value per stock option | $ | 7.05 | ||||||||||||
Aggregate intrinsic value on exercise | — | |||||||||||||
Cash received upon exercise | — | |||||||||||||
Tax benefits realized related to exercise | — | |||||||||||||
Total compensation cost related to nonvested stock options not yet recognized, pre-tax | 11 | |||||||||||||
Weighted-average period over which stock option compensation is expected to be recognized (years) | 2 | |||||||||||||
C. | Restricted Stock and Restricted Stock Units (RSUs) | |||||||||||||
Restricted stock is a share of our common stock that is subject to a risk of forfeiture or other restrictions that will lapse subject to the recipient's continued employment, the attainment of performance goals, or both. RSUs 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). | ||||||||||||||
RSUs are accounted for using a fair-value-based method that utilizes the closing price of Zoetis common stock on the date of grant. In general, RSUs vest after three years of continuous service from the grant date and the values are amortized on a straight-line basis over the vesting term into Cost of sales, Selling, general and administrative expenses, or Research and development expenses, as appropriate. | ||||||||||||||
The following table provides an analysis of RSU activity for the year ended December 31, 2013: | ||||||||||||||
Weighted-Average | ||||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Shares | Per Share | |||||||||||||
Nonvested, December 31, 2012 | — | $ | — | |||||||||||
Granted | 980,093 | 26.79 | ||||||||||||
Vested | (2,669 | ) | 26 | |||||||||||
Reinvested dividend equivalents | 7,484 | 26.53 | ||||||||||||
Forfeited | (35,538 | ) | 26.13 | |||||||||||
Nonvested, December 31, 2013 | 949,370 | $ | 26.82 | |||||||||||
The follow table provides data related to RSU activity: | ||||||||||||||
Year Ended/As of | ||||||||||||||
(MILLIONS OF DOLLARS) | December 31, 2013 | |||||||||||||
Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax | $ | 17 | ||||||||||||
Weighted-average period over which RSU cost is expected to be recognized (years) | 2.1 | |||||||||||||
D. | Deferred Stock Units (DSUs) | |||||||||||||
Deferred stock unit awards, which are granted to non-employee Directors, 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 (including fractional shares) within sixty days following the non-employee Director’s separation of 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 vest immediately as of the grant date and the values are expensed at the time of grant into Selling, general and administrative expenses. | ||||||||||||||
For the year ended December 31, 2013, Zoetis granted 34,804 DSUs at a grant date weighted-average fair value of $28.15 per stock unit. There were 35,024 DSUs outstanding, including dividend equivalents, as of December 31, 2013. | ||||||||||||||
E. | Other Equity-Based or Cash-Based Awards. | |||||||||||||
Performance-based awards will require satisfaction of pre-established performance goals, consisting of one or more business criteria and a targeted performance level with respect to such criteria as a condition of awards vesting or being settled. Performance may be measured over a period of any length specified but not less than one year. | ||||||||||||||
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. The maximum value of the aggregate payment to be paid to any participant with respect to cash-based awards under the Equity Plan in respect of an annual performance period will be $10 million. | ||||||||||||||
F. | Treatment of Outstanding Pfizer Equity Awards | |||||||||||||
Following the IPO, the equity awards previously granted to our employees by Pfizer continued to vest, and service with Zoetis counted as service with Pfizer for equity award purposes. On June 24, 2013, Pfizer completed the Exchange Offer whereby Pfizer disposed of all of its shares of Zoetis common stock owned by Pfizer. Pfizer accelerated the vesting of, and in some cases the settlement of, on a pro-rata basis, outstanding Pfizer RSUs, Total Shareholder Return Units (TSRUs) and Performance Share Awards (PSAs) previously granted to our employees, subject, in each case, to the requirements of Section 409A of the U.S. Internal Revenue Code, the terms of the 2004 Pfizer Stock Plan and the applicable award agreements and any outstanding deferral elections. In addition, unvested Pfizer stock options previously granted to our employees accelerated in full, and our employees generally have the ability to exercise the stock options until the earlier of (i) June 23, 2016 (three years from Pfizer's completion of the Exchange Offer), (ii) termination of employee from Zoetis, or (iii) the expiration date of the stock option. Zoetis employees who held Pfizer stock options and were retirement eligible as of June 24, 2013 will have the full term of the stock option to exercise. | ||||||||||||||
The accelerated vesting of the outstanding Pfizer stock options, and the settlement, on a pro-rata basis, of other Pfizer equity awards, resulted in the recognition of additional expense for the year ended December 31, 2013 of $9 million, which is included in stock-based compensation. The unvested portion of Pfizer RSUs, TSRUs and PSAs were forfeited as of the completion of the Exchange Offer. In the third quarter of 2013, Zoetis made a cash payment of approximately $20 million to certain non-executive Zoetis employees, based on the value of the employees' forfeited Pfizer RSUs, TSRUs and PSAs (as applicable). This amount is included in the consolidated statement of income as additional compensation expense for the year ended December 31, 2013. Members of the Zoetis Executive Team did not receive a cash payment for any forfeited Pfizer RSUs, TSRUs and PSAs, but instead, in the third quarter of 2013, they were granted Zoetis RSUs which were equivalent in value and vest on the same date as their forfeited Pfizer RSUs, TSRUs and PSAs. |
Earnings_Per_Share_Notes
Earnings Per Share (Notes) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Earnings per Share | ' | ||||||||||||
16 | Earnings per Share | ||||||||||||
The weighted average shares outstanding for both basic and diluted earnings per share for the years ended December 31, 2012 and 2011 was calculated using an aggregate of 500 million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the IPO. There were no Zoetis RSUs, stock options or performance shares outstanding prior to the IPO. | |||||||||||||
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) | 2013 | 2012 | 2011 | ||||||||||
Numerator | |||||||||||||
Net income before allocation to noncontrolling interests | $ | 503 | $ | 436 | $ | 248 | |||||||
Net income/(loss) attributable to noncontrolling interests | (1 | ) | — | 3 | |||||||||
Net income attributable to Zoetis Inc. | $ | 504 | $ | 436 | $ | 245 | |||||||
Denominator | |||||||||||||
Weighted-average common shares outstanding | 500.002 | 500 | 500 | ||||||||||
Common stock equivalents: stock options, RSUs and DSUs | 0.315 | — | |||||||||||
Weighted-average common and potential dilutive shares outstanding | 500.317 | 500 | 500 | ||||||||||
Earnings per share attributable to Zoetis Inc. stockholders—basic | $ | 1.01 | $ | 0.87 | $ | 0.49 | |||||||
Earnings per share attributable to Zoetis Inc. stockholders—diluted | $ | 1.01 | $ | 0.87 | $ | 0.49 | |||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Notes) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||||||||
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 United States 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 heavily 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 heavily 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. | |||||||||||||||||||||||||||||
Roxarsone®(3-Nitro) | |||||||||||||||||||||||||||||
We are named as defendants in nine actions involving approximately 140 plaintiffs that allege that the distribution of the medicated feed additive Roxarsone allegedly caused various diseases in the plaintiffs, including cancers and neurological diseases. Other defendants, including various poultry companies, were also named in these lawsuits. Compensatory and punitive damages were sought in unspecified amounts. | |||||||||||||||||||||||||||||
In September 2006, the Circuit Court of Washington County returned a defense verdict in one of the lawsuits, Mary Green, et al. v. Alpharma, Inc. et al. In 2008, this verdict was appealed and affirmed by the Arkansas Supreme Court. Certain summary judgments favoring the poultry company co-defendants in Mary Green, et al. v. Alpharma, Inc. et al. were reversed by the Arkansas Supreme Court in 2008. These claims were retried in 2009 and that trial also resulted in a defense verdict, which was affirmed by the Arkansas Supreme Court in April 2011. In October 2012, we entered into an agreement to resolve these cases, subject to the execution of full releases or dismissals with prejudice by all of the claimants. We received full releases from all claimants, and as a result, on January 23, 2014, the Court dismissed all nine actions with prejudice. | |||||||||||||||||||||||||||||
In June 2011, we announced that we would suspend sales in the United States of Roxarsone (3-Nitro) in response to a request by the U.S. FDA and subsequently stopped sales in several international markets. | |||||||||||||||||||||||||||||
Following our decision to suspend sales of Roxarsone (3-Nitro) in June 2011, Zhejiang Rongyao Chemical Co., Ltd., the supplier of certain materials used in the production of Roxarsone (3-Nitro), filed a lawsuit in the U.S. District Court for the District of New Jersey alleging that we are liable for damages it suffered as a result of the decision to suspend sales. In October 2013, the parties reached a preliminary agreement to resolve the matter, and the Court dismissed the action with prejudice. In December 2013, the parties finalized and executed the settlement agreement. | |||||||||||||||||||||||||||||
PregSure® | |||||||||||||||||||||||||||||
We have received in total approximately 200 claims in Europe and New Zealand seeking damages related to calves claimed to have died of Bovine Neonatal Pancytopenia (BNP) on farms where PregSure BVD, a vaccine against Bovine Virus Diarrhea (BVD) was used. BNP is a rare syndrome that first emerged in cattle in Europe in 2006. Studies of BNP suggest a potential association between the administration of PregSure and the development of BNP, although no causal connection has been established. The cause of BNP is not known. | |||||||||||||||||||||||||||||
In 2010, we voluntarily stopped sales of PregSure BVD in Europe, and recalled the product at wholesalers while investigations into possible causes of BNP continue. In 2011, after incidences of BNP were reported in New Zealand, we voluntarily withdrew the marketing authorization for PregSure throughout the world. | |||||||||||||||||||||||||||||
We have settled approximately 20 of these claims for amounts that are not material individually or in the aggregate. Investigations into possible causes of BNP continue and these settlements may not be representative of any future claims resolutions. | |||||||||||||||||||||||||||||
Advocin | |||||||||||||||||||||||||||||
On January 30, 2012, Bayer filed a complaint against Pfizer alleging infringement and inducement of infringement of Bayer patent US 5,756,506 covering, among other things, a process for treating bovine respiratory disease (BRD) by administering a single high dose of fluoroquinolone. The complaint was filed after Pfizer's product Advocin® was approved as a single dose treatment of BRD, in addition to its previous approval as a multi-dose treatment of BRD. Bayer seeks a permanent injunction, damages and a recovery of attorney's fees, and has demanded a jury trial. Discovery has now concluded. We have filed motions for summary judgment of non-infringement and invalidity of the Bayer patent, which are currently pending before the Court. | |||||||||||||||||||||||||||||
Ulianopolis, Brazil | |||||||||||||||||||||||||||||
In February 2012, the Municipality of Ulianopolis (State of Para, Brazil) filed a complaint against Fort Dodge Saúde Animal Ltda. (FDSAL) 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, the lawsuit has been suspended since April 2012. 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. | |||||||||||||||||||||||||||||
In early August 2013, new labor claims were filed against FDSAL as well as 57 other companies. These claims were filed by 30 employees of the local waste incineration facility that was used by FDSAL and the 57 other companies. The employees of the incineration facility allege health injuries in connection with their employment at the waste site. Based on legal precedent, it is possible that FDSAL may be considered a liable party. Due to the fact that we are in the early stages of the lawsuit, the amount of a potential loss, if any, cannot be reasonably estimated. Counsel has advised that the likelihood of Zoetis being considered severally liable is remote. | |||||||||||||||||||||||||||||
Other Matters | |||||||||||||||||||||||||||||
The European Commission published a decision on alleged competition law infringements by several human health pharmaceutical companies on June 19, 2013. One of the involved legal entities is Zoetis Products LLC, formerly having the name Alpharma Inc. Zoetis Products LLC's involvement is solely related to its human health activities prior to Pfizer's acquisition of King/Alpharma. Zoetis paid a fine in the amount of Euro 11 million (approximately $14 million) and was reimbursed by Pfizer in accordance with the Global Separation Agreement between Pfizer and Zoetis, which provides that Pfizer is obligated to indemnify Zoetis for any liabilities arising out of claims not related to its animal health assets. We filed an appeal of the decision on September 6, 2013. | |||||||||||||||||||||||||||||
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, 2013, recorded amounts for the estimated fair value of these indemnifications are not significant. | |||||||||||||||||||||||||||||
C. Purchase Commitments | |||||||||||||||||||||||||||||
As of December 31, 2013, we have agreements totaling $66 million to purchase goods and services that are enforceable and legally binding and include amounts relating to contract manufacturing and information technology services. Included in this amount are approximately $1 million of potential milestone payments that are deemed reasonably likely to occur. | |||||||||||||||||||||||||||||
D. Brazil Lease Agreements | |||||||||||||||||||||||||||||
In September 2012, Pfizer's subsidiary, Laboratórios Pfizer Ltda. (“Laboratórios”), as lessee, and our subsidiary, PAH Brasil Participações Ltda., (PAH Brasil), as lessor, entered into: (i) the Private Instrument of Non Residential Lease Agreement and Others, which establishes and regulates the use of the real property at our Guarulhos, Brazil facility (the Real Property Lease) and (ii) the Private Instrument of Lease Agreement Movable Assets and Others, which establishes the terms of the use of the fixed assets at the same site (the Fixed Asset Lease and, together with the Real Property Lease, the Brazil Leases). As a result of a merger of PAH Brasil into Fort Dodge Saúde Animal Ltda. (Fort Dodge Brazil) with Fort Dodge Brazil surviving, the Brazil Leases were assigned to Fort Dodge Brazil, later renamed Zoetis Indústria de Produtos Veterinários Ltda. (Zoetis Brazil). | |||||||||||||||||||||||||||||
Rent, rent adjustment and penalty. The monthly rent under the Brazil Leases corresponds to the amount of depreciation of the fixed assets and real property covered by the leases. During the first month that the leases were in effect, the rent under the Fixed Asset Lease was R$752,459 (approximately $0.4 million) and the rent under the Real Property Lease was R$479,977 (approximately $0.2 million). In subsequent periods, the parties will adjust these amounts to reflect the anticipated monthly depreciation amount and previously paid amounts may be adjusted if the amounts paid differ from actual depreciation. Late payments under Brazil Leases are subject to an adjustment plus a penalty equal to 2% and interest on arrears of 1% per month. A breach of either of the Brazil Leases that is not cured within 30 days from receipt of notice thereof is subject to a penalty equal to three monthly rent payments under the applicable lease. In addition to the rent, Laboratórios will pay expenses related to water consumption, sewerage and electricity as well as all taxes levied on the property. | |||||||||||||||||||||||||||||
Covenants and obligations. Laboratórios is required to maintain the fixed assets and real property in the same condition as they were received, except for normal wear and tear and any improvements thereon, and is responsible for the repair of any damage. Improvements on the existing fixed assets and investments in new fixed assets are permitted under the Fixed Asset Lease, provided Fort Dodge Brazil is given notice thereof and consents to Laboratórios's proposal. Costs for such improvements are paid or reimbursed by Fort Dodge Brazil unless the fixed asset is used solely to manufacture human health products, in which case the cost shall be the responsibility of Laboratórios and, in the event a new asset is purchased, exclusive ownership shall be retained by Laboratórios. The Real Property Lease also permits improvements on the property to be implemented by Laboratórios at its sole and entire discretion. Laboratórios is entitled to reimbursement for any related costs as long as Fort Dodge Brazil consented to the implementation of the improvements. | |||||||||||||||||||||||||||||
Term and termination. The Brazil Leases will last for a period of five years commencing on September 28, 2012. The Real Property Lease provides for automatic renewals for successive periods of one year at Laboratórios's discretion, unless notice of non-renewal is provided by Laboratórios. The Fixed Asset Lease can be extended for additional terms of five years by executing an amendment to such lease. | |||||||||||||||||||||||||||||
The Brazil Leases terminate at any time if agreed upon by the parties. The Brazil Leases also terminate upon satisfaction of certain regulatory conditions that will permit the animal health manufacturing operations of Laboratórios to be transferred to Zoetis Brazil and the human pharmaceutical manufacturing operations to be transferred to another facility or party. The Fixed Asset Lease automatically terminates upon the termination of the Real Property Lease or, subject to certain conditions, the master manufacturing and supply agreement that provides for Zoetis-supplied products. The Real Property Lease automatically terminates upon the termination of the Fixed Asset Lease or the expropriation of the property and cannot be terminated by Zoetis Brazil prior to termination of the master manufacturing and supply agreement that provides for Zoetis-supplied products. In the event the property is partially or completely destroyed, Laboratórios has the option to terminate the Real Property Lease. | |||||||||||||||||||||||||||||
E. Commitments under Operating Leases | |||||||||||||||||||||||||||||
We have facilities, vehicles and office equipment under various non-cancellable operating leases with third parties. Total rent expense, net of sublease rental income, was approximately $32 million in 2013, $17 million in 2012 and $21 million in 2011. | |||||||||||||||||||||||||||||
Future minimum lease payments under non-cancellable operating leases as of December 31, 2013 follow: | |||||||||||||||||||||||||||||
After | |||||||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2014 | 2015 | 2016 | 2017 | 2018 | 2018 | Total | ||||||||||||||||||||||
Maturities | $ | 18 | $ | 14 | $ | 12 | $ | 8 | $ | 5 | $ | 10 | $ | 67 | |||||||||||||||
Segment_and_Other_Revenue_Info
Segment and Other Revenue Information (Notes) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Segment and Other Revenue Information | ' | ||||||||||||
Segment, Geographic and Other Revenue Information | |||||||||||||
A. | Segment Information | ||||||||||||
The animal health medicines and vaccines industry is characterized by meaningful differences in customer needs across different regions. As a result of these differences, among other things, we manage our operations through four geographic regions. Each operating segment has responsibility for its commercial activities. Within each of these regional operating segments, we offer a diversified product portfolio, including vaccines, parasiticides, anti-infectives, medicated feed additives and other pharmaceuticals, for both livestock and companion animal customers. | |||||||||||||
Operating Segments | |||||||||||||
• | The United States (U.S.). | ||||||||||||
• | Europe/Africa/Middle East (EuAfME)—Includes, among others, the United Kingdom, Germany, France, Italy, Spain, Northern Europe and Central Europe as well as Russia, Turkey and South Africa. | ||||||||||||
• | Canada/Latin America (CLAR)––Includes Canada, Brazil, Mexico, Central America and Other South America. | ||||||||||||
• | Asia/Pacific (APAC)––Includes Australia, Japan, New Zealand, South Korea, India, China/Hong Kong, Northeast Asia, Southeast Asia and South Asia. | ||||||||||||
Our chief operating decision maker uses the revenue and earnings of the four operating segments, among other factors, for performance evaluation and resource allocation. | |||||||||||||
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, which includes certain Research & development (R&D) 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 not charged to our operating segments. | ||||||||||||
• | Corporate, which is responsible for platform functions such as business technology, facilities, legal, finance, human resources, business development, public affairs and procurement, among others. These costs also include compensation 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-related activities, where we incur costs for restructuring and integration; and (iii) certain significant items, which include non-acquisition-related restructuring charges, certain asset impairment charges and costs associated with cost reduction/productivity initiatives. | ||||||||||||
Segment Assets | |||||||||||||
We manage our assets on a total company basis, not by operating segment. Therefore, our chief operating decision maker 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 $6.6 billion and $6.3 billion at December 31, 2013 and 2012, respectively. | |||||||||||||
Selected Statement of Income Information | |||||||||||||
Depreciation | |||||||||||||
(MILLIONS OF DOLLARS) | Revenue(a) | Earnings(b) | and Amortization(c) | ||||||||||
Year Ended December 31, 2013 | |||||||||||||
U.S. | $ | 1,902 | $ | 1,045 | $ | 43 | |||||||
EuAfME | 1,168 | 420 | 25 | ||||||||||
CLAR | 778 | 266 | 18 | ||||||||||
APAC | 713 | 271 | 13 | ||||||||||
Total reportable segments | 4,561 | 2,002 | 99 | ||||||||||
Other business activities(d) | — | (320 | ) | 25 | |||||||||
Reconciling Items: | |||||||||||||
Corporate(e) | — | (567 | ) | 23 | |||||||||
Purchase accounting adjustments(f) | — | (48 | ) | 48 | |||||||||
Acquisition-related costs(g) | — | (22 | ) | — | |||||||||
Certain significant items(h) | — | (240 | ) | 5 | |||||||||
Other unallocated(i) | — | (115 | ) | 9 | |||||||||
$ | 4,561 | $ | 690 | $ | 209 | ||||||||
Year Ended December 31, 2012 | |||||||||||||
U.S. | $ | 1,776 | $ | 921 | $ | 28 | |||||||
EuAfME | 1,096 | 375 | 28 | ||||||||||
CLAR | 769 | 253 | 23 | ||||||||||
APAC | 695 | 236 | 17 | ||||||||||
Total reportable segments | 4,336 | 1,785 | 96 | ||||||||||
Other business activities(d) | — | (275 | ) | 16 | |||||||||
Reconciling Items: | |||||||||||||
Corporate(e) | — | (506 | ) | 25 | |||||||||
Purchase accounting adjustments(f) | — | (52 | ) | 52 | |||||||||
Acquisition-related costs(g) | — | (53 | ) | 10 | |||||||||
Certain significant items(h) | — | (96 | ) | 1 | |||||||||
Other unallocated(i) | — | (93 | ) | — | |||||||||
$ | 4,336 | $ | 710 | $ | 200 | ||||||||
Year Ended December 31, 2011 | |||||||||||||
U.S. | $ | 1,659 | $ | 820 | $ | 26 | |||||||
EuAfME | 1,144 | 365 | 25 | ||||||||||
CLAR | 788 | 275 | 25 | ||||||||||
APAC | 642 | 196 | 15 | ||||||||||
Total reportable segments | 4,233 | 1,656 | 91 | ||||||||||
Other business activities(d) | — | (279 | ) | 15 | |||||||||
Reconciling Items: | |||||||||||||
Corporate(e) | — | (504 | ) | 31 | |||||||||
Purchase accounting adjustments(f) | — | (82 | ) | 59 | |||||||||
Acquisition-related costs(g) | — | (122 | ) | 6 | |||||||||
Certain significant items(h) | — | (172 | ) | 3 | |||||||||
Other unallocated(i) | — | (103 | ) | — | |||||||||
$ | 4,233 | $ | 394 | $ | 205 | ||||||||
(a) | Revenue denominated in euros were $693 million in 2013, $639 million in 2012, and $710 million in 2011. | ||||||||||||
(b) | Defined as income before provision for taxes on income. | ||||||||||||
(c) | 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. | ||||||||||||
(d) | Other business activities reflects R&D costs managed by our Research and Development organization and not allocated to the operating segments. | ||||||||||||
(e) | Corporate includes, among other things, administration expenses, interest expense, certain compensation and other costs not charged to our operating segments. | ||||||||||||
(f) | Purchase accounting adjustments include certain charges related to intangible assets, property, plant and equipment not charged to our operating segments, and the fair value adjustments to inventory. | ||||||||||||
(g) | Acquisition-related costs can include costs associated with acquiring, integrating and restructuring acquired businesses, such as allocated transaction costs, integration costs, restructuring charges and additional depreciation associated with asset restructuring. For additional information, see Note 6. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives. | ||||||||||||
(h) | 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 restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition, the impact of divestiture-related gains and losses and certain costs related to becoming an independent public company. For additional information, see Note 6. Restructuring Charges and Other Costs Associated with Acquisition and Cost-Reduction/Productivity Initiatives. | ||||||||||||
• | For 2013, certain significant items primarily includes: (i) Zoetis stand-up costs of $206 million; (ii) $20 million income primarily related to a reversal of certain employee termination expenses, partially offset by restructuring charges related to exiting certain manufacturing and research facilities; (iii) $6 million income on the government-mandated sale of certain product rights in Brazil that were acquired with the FDAH acquisition in 2009; (iv) asset impairment charges associated with asset restructuring of $19 million; (v) additional depreciation associated with asset restructuring of $8 million; (vi) write-offs of inventory and intercompany accounts that were transferred to us as part of the Separation from Pfizer of $24 million; and (vii) litigation-related charges of $5 million. Stand-up costs include 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, accelerated vesting and associated cash payment related to certain Pfizer equity awards, and certain legal registration and patent assignment costs. | ||||||||||||
• | For 2012, certain significant items includes: (i) $115 million for restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition; (ii) $14 million income related to a favorable legal settlement for an intellectual property matter; and (iii) $4 million income due to a change in estimate related to transitional manufacturing purchase agreements associated with divestitures. | ||||||||||||
• | In 2011, certain significant items includes: (i) $62 million for restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition; (ii) certain asset impairment charges of $69 million; (iii) certain charges to write-off inventory of $12 million; (iv) charges related to transitional manufacturing purchase agreements associated with divestitures of $27 million; and (v)other costs of $2 million. | ||||||||||||
(i) | Includes overhead expenses associated with our manufacturing operations. | ||||||||||||
B. Geographic Information | |||||||||||||
Revenue exceeded $100 million in each of eight countries outside the United States in 2013, 2012 and 2011. The United States was the only country to contribute more than 10% of total revenue in each year. | |||||||||||||
Property, plant and equipment, less accumulated depreciation, by geographic region follow: | |||||||||||||
As of December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | |||||||||||
U.S. | $ | 827 | $ | 788 | |||||||||
EuAfME | 233 | 224 | |||||||||||
CLAR | 114 | 72 | |||||||||||
APAC | 121 | 157 | |||||||||||
Property, plant and equipment, less accumulated depreciation | $ | 1,295 | $ | 1,241 | |||||||||
C. | Other Revenue Information | ||||||||||||
Significant Customers | |||||||||||||
We sell our livestock products primarily to veterinarians and livestock producers as well as third-party veterinary distributors, and retail outlets who generally sell the products to livestock producers. We sell our companion animal products primarily to veterinarians who then sell the products to pet owners. In 2013, sales to our largest U.S. veterinary distributor represented approximately 11% of total revenue. No single customer accounts for 10% or more of our total revenue in 2012 or 2011. | |||||||||||||
Revenue by Species | |||||||||||||
Significant species revenue are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
Livestock: | |||||||||||||
Cattle | $ | 1,631 | $ | 1,608 | $ | 1,617 | |||||||
Swine | 655 | 590 | 562 | ||||||||||
Poultry | 541 | 501 | 501 | ||||||||||
Other | 104 | 107 | 98 | ||||||||||
2,931 | 2,806 | 2,778 | |||||||||||
Companion Animal: | |||||||||||||
Horses | 179 | 187 | 168 | ||||||||||
Dogs and Cats | 1,451 | 1,343 | 1,287 | ||||||||||
1,630 | 1,530 | 1,455 | |||||||||||
Total revenue | $ | 4,561 | $ | 4,336 | $ | 4,233 | |||||||
Revenue by Major Product Category | |||||||||||||
Significant revenue by major product category are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
Anti-infectives | $ | 1,295 | $ | 1,268 | $ | 1,311 | |||||||
Vaccines | 1,201 | 1,117 | 1,077 | ||||||||||
Parasiticides | 727 | 692 | 645 | ||||||||||
Medicated feed additives | 446 | 403 | 347 | ||||||||||
Other pharmaceuticals | 744 | 712 | 724 | ||||||||||
Other non-pharmaceuticals | 148 | 144 | 129 | ||||||||||
Total revenue | $ | 4,561 | $ | 4,336 | $ | 4,233 | |||||||
Transactions_and_Agreements_wi
Transactions and Agreements with Pfizer (Notes) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Related Party Transactions [Abstract] | ' | ||||
Related Party Transactions | ' | ||||
Transactions and Agreements with Pfizer | |||||
Zoetis had related party transactions with Pfizer through the completion of the Exchange Offer on June 24, 2013. As of the completion of the Exchange Offer, Pfizer is no longer a related party. Activities while Pfizer was a related party, as well as ongoing agreements with Pfizer, are detailed below. | |||||
A. | Pre-Separation Period | ||||
For the combined statement of income for the year ended December 31, 2012, the costs of goods manufactured in manufacturing plants that were shared with other Pfizer business units was approximately $420 million. | |||||
In the pre-Separation period, Pfizer provided significant corporate, manufacturing and shared services functions and resources to us. Our combined financial statements as of and for the year ended December 31, 2012, respectively, reflect an allocation of these costs. For further information about the cost allocations for these services and resources, see Note 3A. Basis of Presentation: Basis of Presentation Prior to the Separation. Management believes that these allocations are a reasonable reflection of the services received. However, these allocations may not reflect the expenses that would have been incurred if we had operated as an independent public company for the period presented. | |||||
Pfizer uses a centralized approach to cash management and financing its operations. In the pre-Separation period, cash deposits were remitted to Pfizer on a regular basis and were reflected in business unit equity and, similarly, Zoetis' cash disbursements were funded through Pfizer's cash accounts and were reflected within Business unit equity. | |||||
B. | Agreements with Pfizer | ||||
In connection with the Separation and IPO, we and Pfizer entered into agreements that provide a framework for our ongoing relationship with Pfizer, certain of which are described below. | |||||
• | Global separation agreement. This agreement governs the relationship between Pfizer and us following the IPO and includes provisions related to the allocation of assets and liabilities, indemnification, delayed transfers and further assurances, mutual releases, insurance and certain covenants. | ||||
• | Transitional services agreement. This agreement grants us the right to continue to use certain of Pfizer's services and resources related to our corporate functions, such as business technology, facilities, finance, human resources, public affairs and procurement, in exchange for mutually agreed-upon fees based on Pfizer's costs of providing these services. | ||||
• | Tax matters agreement. This agreement governs ours and Pfizer's respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes. Pursuant to this agreement, we have also agreed to certain covenants that contain restrictions intended to preserve the tax-free status of certain transactions, and we have agreed to indemnify Pfizer and its affiliates against any and all tax-related liabilities incurred by them relating to these transactions to the extent caused by an acquisition of our stock or assets or by any other action undertaken by us. | ||||
• | Research and development collaboration and license agreement. This agreement permits certain of our employees to be able to review a Pfizer database to identify compounds that may be of interest to the animal health field. Pfizer has granted to us an option to enter into a license agreement subject to certain restrictions and requirements and we will make payments to Pfizer. | ||||
• | Employee matters agreement. This agreement governs ours and Pfizer's respective rights, responsibilities and obligations with respect to the following matters: employees and former employees (and their respective dependents and beneficiaries) who are or were associated with Pfizer, us or the parties' respective subsidiaries or affiliates; the allocation of assets and liabilities generally relating to employees, employment or service-related matters and employee benefit plans; and other human resources, employment and employee benefits matters. | ||||
• | Master manufacturing and supply agreements. These two agreements govern our manufacturing and supply arrangements with Pfizer. Under one of these agreements, Pfizer will manufacture and supply us with animal health products. Under this agreement, our manufacturing and supply chain leadership will have oversight responsibility over product quality and other key aspects of the manufacturing process with respect to the Pfizer-supplied products. Under the other agreement, we will manufacture and supply certain human health products to Pfizer. | ||||
• | Environmental matters agreement. This agreement governs the performance of remedial actions for liabilities allocated to each party under the global separation agreement; addresses our substitution for Pfizer with respect to animal health assets and remedial actions allocated to us (including substitution related to, for example, permits, financial assurances and consent orders); allows our conditional use of Pfizer's consultants and contractors to assist in the conduct of remedial actions; and addresses the exchange of related information between the parties. The agreement also sets forth standards of conduct for remedial activities at the co-located facilities: Guarulhos, Brazil; Catania, Italy; Hsinchu, Taiwan; and Kalamazoo, Michigan, in the U.S. In addition, the agreement sets forth site-specific terms to govern conduct at several of these co-located facilities. | ||||
• | Screening services agreement. This agreement requires us to provide certain high throughput screening services to Pfizer's R&D organization for which Pfizer pays to us agreed-upon fees. | ||||
• | Intellectual property license agreements. Under these agreements (i) Pfizer and certain of its affiliates licensed to us and certain of our affiliates the right to use certain intellectual property rights in the animal health field; (ii) we licensed to Pfizer and certain of its affiliates certain rights to intellectual property in all fields outside of the animal health field; and (iii) Pfizer granted us rights with respect to certain trademarks and copyrighted works. | ||||
Following the Separation, we own, have access to or have the right to use, substantially all of the resources that were used, or held for use, exclusively in Pfizer's animal health business, including the following: | |||||
• | Intellectual Property. As part of the Separation, Pfizer assigned to us ownership of certain animal health related patents, pending patent applications, and trademark applications and registrations. In addition, Pfizer licensed to us the right to use certain intellectual property rights in the animal health field. We licensed to Pfizer the right to use certain of our trademarks and substantially all of our other intellectual property rights in the human health field and all other fields outside of animal health. In addition, Pfizer granted us a transitional license to use certain of Pfizer's trademarks and we granted Pfizer a transitional license to use certain of our trademarks for a period of time following the completion of the IPO. | ||||
• | Manufacturing Facilities. Our global manufacturing network consists of 13 “anchor” manufacturing sites and 15 “satellite” manufacturing sites. Ownership of, or the existing leasehold interest in, these facilities were conveyed to us by Pfizer as part of the Separation. Among these 28 manufacturing sites is our facility in Guarulhos, Brazil, which we leased back to Pfizer. Certain of our products are currently manufactured at 13 manufacturing sites that were retained by Pfizer. The products manufactured by Pfizer at these sites and at our Guarulhos, Brazil facility continue to be supplied to us under the terms of a manufacturing and supply agreement we entered into with Pfizer. | ||||
• | R&D Facilities. We have R&D operations co-located with certain of our manufacturing sites in Australia, Belgium, Brazil, Spain and the United States to facilitate the efficient transfer of production processes from our laboratories to manufacturing sites. In addition, we maintain R&D operations at non-manufacturing locations in Belgium, Brazil, India and the United States. As part of the Separation, Pfizer conveyed to us its interest in each of these R&D facilities, with the exception of our Mumbai, India facility, which we expect Pfizer to transfer to us after the completion of the Separation for cash consideration to be agreed upon, and, in the interim, we are leasing this facility from Pfizer. | ||||
• | Employees. In general, as part of the Separation, employees of Pfizer who were substantially dedicated to the animal health business became our employees. However, labor and employment laws or other business considerations in some jurisdictions delayed Pfizer from transferring to us employees who are substantially dedicated to the animal health business. In those instances, to the extent permissible under applicable law, we and Pfizer entered into mutually-acceptable arrangements to provide for continued operation of the business until such time as the employees in those jurisdictions can be transferred to us. | ||||
The amounts charged under each of the agreements with Pfizer, through the completion of the Exchange Offer on June 24, 2013, were as follows: | |||||
(MILLIONS OF DOLLARS) | |||||
Transitional services agreement | $ | 63 | |||
Master manufacturing and supply agreements | 130 | ||||
Employee matters agreement | 99 | ||||
In certain jurisdictions, while the Zoetis entities obtain appropriate registration and licensing, Pfizer entities purchase product from Zoetis entities and resell such product to the local Zoetis entity at cost. This activity is reflected in Accounts receivable for the product Pfizer purchases from Zoetis entities and in Accounts payable for the product purchased from such Pfizer entities by our local Zoetis entity. | |||||
At December 31, 2013, $121 million was included in Accounts receivable as receivable from Pfizer, and $181 million was included in Accounts Payable as payable to Pfizer. | |||||
We remained part of Pfizer's consolidated U.S. tax returns until we fully separated on June 24, 2013, and therefore reflected 2013 U.S. income taxes payable of $31 million as a payable to Pfizer in Other current liabilities. |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (Unaudited) Selected Quarterly Financial Data (Unaudited) (Notes) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
Quarterly Financial Information [Text Block] | ' | ||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | |||||||||||||||||
(MILLIONS OF DOLLARS, EXCEPT PER COMMON SHARE DATA) | FIRST | SECOND | THIRD | FOURTH | |||||||||||||
2013:00:00 | |||||||||||||||||
Revenue | $ | 1,090 | $ | 1,114 | $ | 1,103 | $ | 1,254 | |||||||||
Costs and expenses | 891 | 947 | 915 | 1,092 | |||||||||||||
Restructuring charges and certain acquisition-related costs | 7 | (20 | ) | 3 | 36 | ||||||||||||
Income before provision for taxes on income | 192 | 187 | 185 | 126 | |||||||||||||
Provision for taxes on income(a) | 52 | 59 | 54 | 22 | |||||||||||||
Net income before allocation to noncontrolling interests | 140 | 128 | 131 | 104 | |||||||||||||
Net income/(loss) attributable to noncontrolling interests | — | — | — | (1 | ) | ||||||||||||
Net income/(loss) attributable to Zoetis | $ | 140 | $ | 128 | $ | 131 | $ | 105 | |||||||||
Earnings per common share--basic(c) | $ | 0.28 | $ | 0.26 | $ | 0.26 | $ | 0.21 | |||||||||
Earnings per common share--diluted(c) | $ | 0.28 | $ | 0.26 | $ | 0.26 | $ | 0.21 | |||||||||
2012:00:00 | |||||||||||||||||
Revenue | $ | 1,047 | $ | 1,094 | $ | 1,019 | $ | 1,176 | |||||||||
Costs and expenses(b) | 851 | 818 | 800 | 1,022 | |||||||||||||
Restructuring charges and certain acquisition-related costs | 25 | 24 | 6 | 80 | |||||||||||||
Income before provision for taxes on income | 171 | 252 | 213 | 74 | |||||||||||||
Provision for taxes on income(a) | 59 | 79 | 52 | 84 | |||||||||||||
Net income before allocation to noncontrolling interests | 112 | 173 | 161 | (10 | ) | ||||||||||||
Net income/(loss) attributable to noncontrolling interests | 1 | — | (1 | ) | — | ||||||||||||
Net income attributable to Zoetis | $ | 111 | $ | 173 | $ | 162 | $ | (10 | ) | ||||||||
Earnings per common share--basic(c) | $ | 0.22 | $ | 0.35 | $ | 0.32 | $ | (0.02 | ) | ||||||||
Earnings per common share--diluted(c) | $ | 0.22 | $ | 0.35 | $ | 0.32 | $ | (0.02 | ) | ||||||||
(a) | Fourth quarter comparisons are impacted by an elevated tax rate in the fourth quarter of 2012, when Zoetis was still a business unit of Pfizer and reported consolidated results. The 2012 income tax provision in the combined statement of income was calculated as if Zoetis filed a separate tax return. | ||||||||||||||||
(b) | Costs and expenses in the fourth quarter reflect seasonal trends as well as specific costs associated with the build-up of our capabilities as an independent company. | ||||||||||||||||
(c) | The weighted average common shares outstanding for both basic and diluted earnings per share for 2012 was calculated using an aggregate of 500 million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the IPO. There were no Zoetis restricted stock units, stock options or performance shares outstanding prior to the IPO. | ||||||||||||||||
Basic and diluted EPS are computed independently for each of the periods presented. Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year. | |||||||||||||||||
Our historical combined quarterly financial data may not be representative of the results we would have achieved as an independent company. |
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts Schedule II - Valuation and Qualifying Accounts (Notes) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Receivables [Abstract] | ' | ||||||||||||||||
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | ' | ||||||||||||||||
Zoetis Inc. and Subsidiaries | |||||||||||||||||
Schedule II—Valuation and Qualifying Accounts | |||||||||||||||||
Balance, | Balance, | ||||||||||||||||
Beginning of | End of | ||||||||||||||||
(MILLIONS OF DOLLARS) | Period | Additions | Deductions | Period | |||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Allowance for doubtful accounts | $ | 49 | $ | 6 | $ | (24 | ) | (a) | $ | 31 | |||||||
Year Ended December 31, 2012 | |||||||||||||||||
Allowance for doubtful accounts | 29 | 23 | (3 | ) | 49 | ||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||
Allowance for doubtful accounts | 26 | 5 | (2 | ) | 29 | ||||||||||||
(a) Primarily reflects Separation Adjustments (see Notes to Consolidated and Combined Financial Statements—Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation) as well as an adjustment related to improved accounts receivable collection experience. |
Significant_Accounting_Policie1
Significant Accounting Policies Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |
New Accounting Standards | ||
In 2013, we adopted guidance issued by the Financial Accounting Standards Board that simplifies how an entity tests indefinite-lived intangibles for impairment. The amended guidance allows companies to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The adoption of this guidance had no impact on our financial position and results of operations. | ||
Use of Estimates, Policy [Policy Text Block] | ' | |
Estimates and Assumptions | ||
In preparing the consolidated and combined 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 and combined financial statements. For example, in the consolidated and combined statements of income, in addition to estimates used in determining the allocations of costs and expenses from Pfizer, 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 and combined 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, benefit obligations, the impact of contingencies, deductions from revenue and restructuring reserves, all of which also impact the consolidated and combined 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 and combined 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. | ||
Business Combinations and Other Purchase of Business Transactions, Policy [Policy Text Block] | ' | |
Acquisitions | ||
Our consolidated and combined 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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | |
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 Recognition, Policy [Policy Text Block] | ' | |
Revenue, Deductions from Revenue and the Allowance for Doubtful Accounts | ||
We record revenue from product sales when the goods are shipped and title and risk of loss passes to the customer. At the time of sale, we also record estimates for a variety of deductions from revenue, such as rebates, sales allowances, product returns and discounts. Sales deductions are estimated and recorded at the time that related revenue is recorded except for sales incentives, which are estimated and recorded at the time the related revenue is recorded or when the incentive is offered, whichever is later. As applicable, our estimates are generally based on contractual terms or historical experience, adjusted as necessary to reflect our expectations about the future. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenue. | ||
As of December 31, 2013 and 2012, accruals for sales deductions included in Other current liabilities are approximately $153 million and $126 million, respectively. | ||
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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Inventory, Policy [Policy Text Block] | ' | |
Cost of Sales and Inventories | ||
Inventories are carried at the lower of cost or market. 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, Policy [Policy Text Block] | ' | |
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 $143 million in 2013, $141 million in 2012 and $134 million in 2011. | ||
Shipping and handling costs totaled approximately $60 million in 2013, $59 million in 2012 and $66 million in 2011. | ||
Research and Development Expense, Policy [Policy Text Block] | ' | |
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 Policy [Text Block] | ' | |
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 impairment indicators exist, by first 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. If we 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. We performed a qualitative assessment, as of September 29, 2013, to determine whether it is more likely than not that the respective fair values of our reporting units are less than their carrying amounts, including goodwill. Based on that assessment, we determined that this condition does not exist for all reporting units and concluded that goodwill was not impaired. | |
Impairment reviews can involve a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | ' | |
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 $35 million and $3 million of internal-use software for the years ended December 31, 2013 and 2012, respectively. Depreciation expense for capitalized software was $2 million per year in 2013, 2012 and 2011. | ||
Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | ' | |
Restructuring Charges and Certain Acquisition-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-related costs are all restructuring charges and certain costs associated with acquiring and integrating an acquired business. 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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Earnings Per Share, Policy [Policy Text Block] | ' | |
Earnings per Share | ||
The weighted average common shares outstanding for both basic and diluted earnings per share for the years ended December 31, 2012 and 2011 was calculated using an aggregate of 500 million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the IPO. There were no Zoetis restricted stock units, stock options or performance shares outstanding prior to the IPO. | ||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | |
Cash Equivalents | ||
Cash equivalents include items almost as liquid as cash, such as certificates of deposit and time deposits with maturity periods of three months or less when purchased. | ||
Significant investing activities that affect recognized property, plant and equipment, but that do not result in cash receipts or cash payments in the period are not included in the consolidated and combined statements of cash flows. Purchases of property, plant and equipment in Other current liabilities or Accounts payable at December 31, 2013 and 2012 were $16 million and $14 million, respectively, and were insignificant at December 31, 2011. | ||
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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Trade and Other Accounts Receivable, Policy [Policy Text Block] | ' | |
Accounts Receivable | ||
The recorded amounts of accounts receivable approximate fair value because of their relatively short-term nature. As of December 31, 2013 and 2012, Accounts receivable, less allowance for doubtful accounts, of $1,138 million and $900 million, respectively, includes approximately $65 million and $43 million of other receivables, such as trade notes receivable and royalty receivables, among others. | ||
Income Tax, Policy [Policy Text Block] | ' | |
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 and combined balance sheet 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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Pension and Other Postretirement Plans, Policy [Policy Text Block] | ' | |
Benefit Plans | ||
Prior to the Separation from Pfizer, employees who met certain eligibility requirements participated in various defined benefit pension plans and postretirement plans administered and sponsored by Pfizer. Generally, most of our employees were eligible to participate in Pfizer’s pension plans. The combined statements of income for the years ended December 31, 2012 and 2011 and the pre-Separation period included in the consolidated statement of income for the year ended December 31, 2013, included all of the benefit plan expenses attributable to the animal health operations of Pfizer, including expenses associated with pension plans, postretirement plans and defined contribution plans. The expenses included allocations of direct expenses, as well as expenses that were deemed attributable to the animal health operations. The combined balance sheet as of December 31, 2012 included the benefit plan assets and liabilities of only those plans that were dedicated to animal health employees. The consolidated balance sheet as of December 31, 2013 includes those dedicated plans, as well as the benefit plan assets and liabilities that were transferred to Zoetis from Pfizer as part of the Separation. All dedicated benefit plans are pension plans. | ||
For the dedicated plans, we recognize the overfunded or underfunded status of defined benefit plans as an asset or liability on the consolidated and combined 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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Asset Retirement Obligations, Policy [Policy Text Block] | ' | |
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, 2013 and 2012, accruals for direct asset retirement obligations included in Other current liabilities are $0.1 million and $0.2 million, respectively, and included in Other noncurrent liabilities are $12 million and $15 million, respectively. | ||
Amounts recorded for asset retirement obligations can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Commitments and Contingencies, Policy [Policy Text Block] | ' | |
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 heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | |
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. | ||
Amounts recorded for share-based compensation can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions. | ||
Business Unit Equity Policy [Text Block] | ' | |
Business Unit Equity | ||
Total business unit equity represents Pfizer’s equity investment in Zoetis and the net amounts due to or due from Pfizer. Recorded amounts reflect capital contributions and/or dividends, as well as the results of operations and other comprehensive income/(loss) for periods prior to the IPO. | ||
Reclassification, Policy [Policy Text Block] | ' | |
Reclassifications | ||
Interest expense, net of capitalized interest previously presented as a component of Other (income)/deductions, net, is currently presented separately in the consolidated and combined statements of income. |
Restructuring_Charges_and_Othe1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||||||||||
Schedule of Costs Associated with Cost-Reduction/Productivity Initiatives and Acquisition Activity | ' | ||||||||||||||||||||
The components of costs incurred in connection with restructuring initiatives, acquisitions and cost-reduction/productivity initiatives follow: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||||||||||
Restructuring charges and certain acquisition-related costs: | |||||||||||||||||||||
Integration costs(a) | $ | 21 | $ | 26 | $ | 30 | |||||||||||||||
Restructuring charges (benefits)(b): | |||||||||||||||||||||
Employee termination costs | (23 | ) | 49 | 53 | |||||||||||||||||
Accelerated depreciation | 5 | — | — | ||||||||||||||||||
Asset impairment charges | 19 | 4 | — | ||||||||||||||||||
Exit costs | 4 | (1 | ) | 1 | |||||||||||||||||
Total direct | 26 | 78 | 84 | ||||||||||||||||||
Transaction costs(c) | — | — | 2 | ||||||||||||||||||
Integration costs(a) | — | 21 | 41 | ||||||||||||||||||
Restructuring charges(b): | |||||||||||||||||||||
Employee termination costs | — | 19 | 20 | ||||||||||||||||||
Asset impairment charges | — | 10 | 7 | ||||||||||||||||||
Exit costs | — | 7 | — | ||||||||||||||||||
Total allocated | — | 57 | 70 | ||||||||||||||||||
Total Restructuring charges and certain acquisition-related costs | 26 | 135 | 154 | ||||||||||||||||||
Other costs associated with cost-reduction/productivity initiatives: | |||||||||||||||||||||
Additional depreciation associated with asset restructuring––direct(d) | 1 | 11 | 9 | ||||||||||||||||||
Additional depreciation associated with asset restructuring––allocated(d) | 2 | 13 | 20 | ||||||||||||||||||
Implementation costs––direct(e) | — | — | 3 | ||||||||||||||||||
Implementation costs––allocated(e) | 1 | 9 | — | ||||||||||||||||||
Total costs associated with restructuring, acquisitions and cost-reduction/productivity initiatives | $ | 30 | $ | 168 | $ | 186 | |||||||||||||||
(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, as well as product transfer costs. | ||||||||||||||||||||
(b) | The restructuring charges (benefits) for the year ended December 31, 2013 are primarily related to the following: | ||||||||||||||||||||
• | When we were a business unit of Pfizer, we announced a restructuring plan related to our operations in Europe. In connection with these actions, we recorded a pre-tax charge of $27 million to recognize employee termination costs. As a result of becoming an independent public company (no longer being a majority-owned subsidiary of Pfizer) and related economic consideration, we revisited this restructuring action and decided to no longer implement this restructuring plan. As such, we reversed the existing reserve of $27 million in the second quarter of 2013. | ||||||||||||||||||||
• | We recorded asset impairment charges related to one of our manufacturing facilities of $17 million. | ||||||||||||||||||||
• | We recorded restructuring charges related to the exiting of certain leased manufacturing and research facilities and recorded employee termination expenses of $2 million, exit costs of $4 million, and accelerated depreciation of $5 million. | ||||||||||||||||||||
The direct restructuring charges (benefits) are associated with the following: | |||||||||||||||||||||
• | For the year ended December 31, 2013––EuAfME ($4 million), CLAR ($4 million) and manufacturing/research/corporate ($3 million income). | ||||||||||||||||||||
• | For the year ended December 31, 2012—EuAfME ($51 million), CLAR ($3 million), APAC ($1 million income) and manufacturing/research/corporate ($1 million income). | ||||||||||||||||||||
• | For the year ended December 31, 2011––U.S. ($2 million), EuAfME ($33 million), CLAR ($2 million), APAC ($2 million income) and manufacturing/research/corporate ($19 million). | ||||||||||||||||||||
(c) | Transaction costs represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services. | ||||||||||||||||||||
(d) | Additional depreciation associated with asset restructuring represents the impact of changes in the estimated lives of assets involved in restructuring actions. In 2013, included in Cost of sales ($1 million) and Selling, general and administrative expenses ($2 million). For 2012, included in Cost of sales ($10 million), Selling, general and administrative expenses ($5 million) and Research and development expenses ($9 million). For 2011, included in Cost of sales ($6 million), Selling, general and administrative expenses ($4 million) and Research and development expenses ($19 million). | ||||||||||||||||||||
(e) | Implementation costs—allocated represent external, incremental costs directly related to implementing cost reduction/productivity initiatives, and primarily include expenditures related to system and process standardization and the expansion of shared services. Included in Selling, general and administrative expenses. | ||||||||||||||||||||
Schedule of Restructuring and Related Costs | ' | ||||||||||||||||||||
The components of and changes in our direct restructuring accruals follow: | |||||||||||||||||||||
Employee | Asset | ||||||||||||||||||||
Termination | Impairment | Accelerated | Exit | ||||||||||||||||||
(MILLIONS OF DOLLARS) | Costs | Charges | Depreciation | Costs | Accrual | ||||||||||||||||
Balance, December 31, 2010 | $ | 90 | $ | — | $ | — | $ | 11 | $ | 101 | |||||||||||
Provision/(Benefit) | 53 | — | — | 1 | 54 | ||||||||||||||||
Utilization and other(a) | (73 | ) | — | — | (1 | ) | (74 | ) | |||||||||||||
Balance, December 31, 2011 | 70 | — | — | 11 | 81 | ||||||||||||||||
Provision/(Benefit) | 49 | 4 | — | (1 | ) | 52 | |||||||||||||||
Utilization and other(a) | (51 | ) | (4 | ) | — | (4 | ) | (59 | ) | ||||||||||||
Balance, December 31, 2012(b) | 68 | — | — | 6 | 74 | ||||||||||||||||
Provision/(Benefit) | (23 | ) | 19 | 5 | 4 | 5 | |||||||||||||||
Utilization and other(a) | (16 | ) | — | (4 | ) | (20 | ) | ||||||||||||||
Non-cash activity | — | (19 | ) | (5 | ) | — | (24 | ) | |||||||||||||
Separation adjustment(c) | (14 | ) | — | — | — | (14 | ) | ||||||||||||||
Balance, December 31, 2013(b) | $ | 15 | $ | — | $ | — | $ | 6 | $ | 21 | |||||||||||
(a) | Includes adjustments for foreign currency translation. | ||||||||||||||||||||
(b) | At December 31, 2013 and 2012, included in Other current liabilities ($13 million and $63 million, respectively) and Other noncurrent liabilities ($8 million and $11 million, respectively). | ||||||||||||||||||||
(c) | See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation. |
Other_IncomeDeductions_Net_Oth
Other (Income)/Deductions - Net Other (Income)/Deductions - Net (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Other Income and Expenses [Abstract] | ' | ||||||||||||
Components of Other (Income)/DeductionsbNet | ' | ||||||||||||
The components of Other (income)/deductions—net follow: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
Royalty-related income | $ | (23 | ) | $ | (32 | ) | $ | (26 | ) | ||||
Identifiable intangible asset impairment charges(a) | 1 | 5 | 69 | ||||||||||
Net gain on sale of assets(b) | (6 | ) | — | — | |||||||||
Certain legal matters, net(c) | 1 | (19 | ) | — | |||||||||
Foreign currency (gain)/loss(d) | 20 | — | (1 | ) | |||||||||
Other, net | (2 | ) | — | 6 | |||||||||
Other (income)/deductions—net | $ | (9 | ) | $ | (46 | ) | $ | 48 | |||||
(a) | In 2012, the intangible asset impairment charges include (i) approximately $2 million of finite-lived companion animal developed technology rights; (ii) approximately $1 million of finite-lived trademarks related to genetic testing services; and (iii) approximately $2 million of finite-lived patents related to poultry technology. The asset impairment charges for 2012 reflect, among other things, loss of revenue as a result of negative market conditions and, with respect to the poultry technology, a re-assessment of economic viability. In 2011, the asset impairment charges include (i) approximately $30 million of finite-lived intangible assets related to parasiticides technology as a result of declining gross margins and increased competition; (ii) approximately $12 million of finite-lived intangible assets related to equine influenza and tetanus technology due to third-party supply issues; (iii) approximately $10 million of finite-lived intangible assets related to genetic testing services that did not find consumer acceptance; and (iv) approximately $17 million related to IPR&D projects (acquired from Vetnex in 2010 and from FDAH in 2009), as a result of the termination of the development programs due to a re-assessment of economic viability. | ||||||||||||
(b) | For 2013, represents the net gain on the government-mandated sale of certain product rights in Brazil that were acquired with the FDAH acquisition in 2009. | ||||||||||||
(c) | For 2012, represents income from a favorable legal settlement related to an intellectual property matter ($14 million) and a change in estimate for an environmental-related reserve due to a favorable settlement ($7 million income) partially offset by litigation-related charges ($2 million). | ||||||||||||
(d) | For 2013, includes a foreign currency loss of $9 million incurred in the first quarter of 2013 related to the Venezuela currency devaluation in February 2013 and other foreign currency losses in the fourth quarter of 2013 primarily related to Argentina. |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | ' | ||||||||||||
The components of Income before provision for taxes on income follow: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
United States | $ | 238 | $ | 340 | $ | (239 | ) | ||||||
International | 452 | 370 | 633 | ||||||||||
Income before provision for taxes on income(a)(b) | $ | 690 | $ | 710 | $ | 394 | |||||||
Schedule Of Components Of Provision For Income Taxes Table [Text Block] | ' | ||||||||||||
The components of Provision for taxes on income based on the location of the taxing authorities follow: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
United States: | |||||||||||||
Current income taxes: | |||||||||||||
Federal | $ | 63 | $ | 132 | $ | (3 | ) | ||||||
State and local | 12 | 5 | (1 | ) | |||||||||
Deferred income taxes: | |||||||||||||
Federal | 10 | (7 | ) | (19 | ) | ||||||||
State and local | 2 | 11 | (3 | ) | |||||||||
Total U.S. tax provision/(benefit) | 87 | 141 | (26 | ) | |||||||||
International: | |||||||||||||
Current income taxes | 89 | 211 | 85 | ||||||||||
Deferred income taxes | 11 | (78 | ) | 87 | |||||||||
Total international tax provision | 100 | 133 | 172 | ||||||||||
Provision for taxes on income(a)(b)(c) | $ | 187 | $ | 274 | $ | 146 | |||||||
(a) | In 2013, the Provision for taxes on income reflects the following: | ||||||||||||
• | U.S. tax expense of approximately $3 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes); | ||||||||||||
• | U.S. tax benefit related to U.S. Research and Development Tax Credit which was retroactively extended on January 3, 2013, and the U.S. Domestic Production Activities deduction; | ||||||||||||
• | Tax expense of approximately $25 million related to the establishment of valuation allowance; and | ||||||||||||
• | Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | ||||||||||||
(b) | In 2012, the Provision for taxes on income reflects the following: | ||||||||||||
• | U.S. tax benefits of approximately $29.3 million, representing tax and interest, resulting from a multi-year settlement with the U.S. Internal Revenue Service with respect to audits for the years 2006 through 2008, and international tax benefits of approximately $2.7 million, representing tax and interest, resulting from the resolution of certain tax positions pertaining to prior years with various foreign tax authorities and from the expiration of certain statutes of limitations; | ||||||||||||
• | U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes); | ||||||||||||
• | The expiration of the U.S. Research and Development Tax Credit on December 31, 2011; and | ||||||||||||
• | Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | ||||||||||||
(c) | In 2011, the Provision for taxes on income reflects the following: | ||||||||||||
• | U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside of the United States that will not be indefinitely reinvested overseas; and | ||||||||||||
• | U.S. tax benefits of approximately $9.5 million, representing tax and interest, resulting from the tax benefit recorded in connection with the settlement of certain audits with the U.S. Internal Revenue Service. | ||||||||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | ' | ||||||||||||
The reconciliation of the U.S. statutory income tax rate to our effective tax rate follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
U.S. statutory income tax rate | 35 | % | 35 | % | 35 | % | |||||||
State and local taxes, net of federal benefits | 1 | 1.7 | (0.2 | ) | |||||||||
Taxation of non-U.S. operations(a)(b)(c) | (6.7 | ) | 5.6 | 2.7 | |||||||||
Unrecognized tax benefits and tax settlements and resolution of certain tax positions(d) | 1.1 | (4.1 | ) | (2.4 | ) | ||||||||
U.S. healthcare legislation(e) | — | (0.4 | ) | 0.3 | |||||||||
U.S. Research and Development Tax Credit and U.S. Domestic Production Activities deduction(f) | (1.2 | ) | (0.3 | ) | (2.3 | ) | |||||||
Non-deductible / non-taxable items(g) | 0.5 | 0.8 | 2.1 | ||||||||||
All other—net | (2.6 | ) | 0.3 | 1.9 | |||||||||
Effective tax rate | 27.1 | % | 38.6 | % | 37.1 | % | |||||||
(a) | For taxation of non-U.S. operations, this rate impact reflects the income tax rates and relative earnings in the locations where we do business outside of the United States, together with the cost of repatriation decisions, as well as changes in uncertain tax positions not included in the reconciling item called “Unrecognized tax benefits and tax settlements and resolution of certain tax positions”: (i) the jurisdictional mix of earnings is a component of our effective tax rate each year as tax rates outside of the U.S. are generally lower than the U.S. statutory income tax rate. The rate impact of the jurisdictional mix of earnings is influenced by the specific location of non-U.S. earnings and the level of such earnings as compared to our total earnings. This rate impact is then offset or more than offset by the cost of repatriation decisions and other U.S. tax implications of our foreign operations, which may significantly impact the taxation of non-U.S. operations; and (ii) the impact of changes in uncertain tax positions not included in the reconciling item called “Unrecognized tax benefits and tax settlements and resolution of certain tax positions” is a component of our effective tax rate each year that can result in either an increase or decrease to our effective tax rate. The jurisdictional mix of earnings, which includes the impact of the location of earnings as well as repatriation costs, can vary as a result of the 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, asset impairments and gains and losses on asset divestitures. | ||||||||||||
(b) | The rate impact of taxation of non-U.S. operations was a decrease to our effective tax rate in 2013 due to (i) the jurisdictional mix of earnings as tax rates outside of the United States are generally lower than the U.S. statutory income tax rate; and (ii) incentive tax rulings in Belgium effective December 1, 2012 and in Singapore effective October 29, 2012. The rate impact of taxation of non-U.S. operations was an increase to our effective tax rate in 2012 and 2011 due to (i) the cost of repatriation decisions and other U.S. tax implications that more than offset the impact of the generally lower tax rates outside of the United States; (ii) the tax impact of non-deductible items in those jurisdictions; and (iii) the tax impact of changes in uncertain tax positions related to our non-U.S. operations. | ||||||||||||
(c) | In 2013, the impact to the rate due to increases in uncertain tax positions was more than offset by the jurisdictional mix of earnings and other U.S. tax implications of our foreign operations described in the above footnotes. The increase in the rate in 2012 as compared to 2011 is primarily due to increases in uncertain tax positions (see D. Tax Contingencies, for current and prior period increases to uncertain tax positions), of which a significant portion relates to our non-U.S. operations. | ||||||||||||
(d) | For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see A. Taxes on Income and D. Tax Contingencies. | ||||||||||||
(e) | The decrease in the rate in 2012 primarily relates to the tax benefit recorded in connection with the establishment of deferred income tax assets related to the Medicare Part D subsidy for retiree prescription drug coverage. | ||||||||||||
(f) | In 2013, the decrease in the rate was due to the benefit associated with the U.S. Research and Development Tax Credit. In 2012, no benefit from the U.S. Research and Development Tax Credit was reflected as the credit expired on December 31, 2011 and was not extended until January 2013. In all years, we received a benefit from the U.S. Domestic Production Activities deduction. | ||||||||||||
(g) | Non-deductible items include meals and entertainment expenses. | ||||||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | ||||||||||||
The components of our deferred tax assets and liabilities follow: | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
(MILLIONS OF DOLLARS) | Assets (Liabilities) | ||||||||||||
Prepaid/deferred items | $ | 59 | $ | 69 | |||||||||
Inventories | 29 | 9 | |||||||||||
Intangibles | (111 | ) | (187 | ) | |||||||||
Property, plant and equipment | (92 | ) | (61 | ) | |||||||||
Employee benefits | 11 | 54 | |||||||||||
Restructuring and other charges | 4 | 27 | |||||||||||
Legal and product liability reserves | 13 | 20 | |||||||||||
Net operating loss/credit carryforwards | 30 | 219 | |||||||||||
Unremitted earnings | (3 | ) | (86 | ) | |||||||||
All other | (10 | ) | (3 | ) | |||||||||
Subtotal | (70 | ) | 61 | ||||||||||
Valuation allowance | (107 | ) | (69 | ) | |||||||||
Net deferred tax liability(a)(b) | $ | (177 | ) | $ | (8 | ) | |||||||
(a) | 2013 vs. 2012-The significant increase in the total net deferred tax liability from December 31, 2012 to December 31, 2013 is primarily attributable to the Separation Adjustments, predominantly related to deferred tax assets associated with net operating loss/credit carryforwards and deferred tax liabilities associated with unremitted earnings that were retained by Pfizer, partially offset by an increase in valuation allowances representing the amounts determined to be unrecoverable. See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation. | ||||||||||||
(b) | In 2013, included in Current deferred tax assets ($97 million), Noncurrent deferred tax assets ($63 million), Other current liabilities ($15 million) and Noncurrent deferred tax liabilities ($322 million). In 2012, included in Current deferred tax assets ($101 million), Noncurrent deferred tax assets ($216 million), Other current liabilities ($2 million) and Noncurrent deferred tax liabilities ($323 million). | ||||||||||||
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | ' | ||||||||||||
The reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows: | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
Balance, January 1 | $ | (144 | ) | $ | (114 | ) | $ | (93 | ) | ||||
Adjustments associated with the Separation(a) | 115 | — | — | ||||||||||
Acquisitions(b) | — | — | (19 | ) | |||||||||
Increases based on tax positions taken during a prior period(c) | (2 | ) | (2 | ) | — | ||||||||
Decreases based on tax positions taken during a prior period(c)(d) | — | 40 | 1 | ||||||||||
Decreases based on cash payments for a prior period | 1 | 3 | 7 | ||||||||||
Increases based on tax positions taken during the current period(c) | (16 | ) | (73 | ) | (10 | ) | |||||||
Decreases based on tax positions taken during the current period | — | — | — | ||||||||||
Lapse in statute of limitations | 1 | 2 | — | ||||||||||
Balance, December 31(e) | $ | (45 | ) | $ | (144 | ) | $ | (114 | ) | ||||
(a) | The significant decrease in the total gross unrecognized tax benefits from December 31, 2012 to December 31, 2013 is primarily attributable to the elimination of net tax liabilities associated with uncertain tax positions that were retained by Pfizer. See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation. | ||||||||||||
(b) | The amount in 2011 primarily relates to the acquisition of KAH. | ||||||||||||
(c) | Primarily included in Provision for taxes on income. | ||||||||||||
(d) | In all years, the decreases are primarily a result of effectively settling certain issues with the U.S. and non-U.S. tax authorities. See A. Tax Matters—Taxes on Income. | ||||||||||||
(e) | In 2013, included in Noncurrent deferred tax assets ($6 million) and Other taxes payable ($39 million). In 2012, included in Noncurrent deferred tax assets ($6 million) and Other taxes payable ($138 million). |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income/(Loss) Accumulated Other Comprehensive Income/(Loss) (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Changes, Net of Tax, in Accumulated Other Comprehensive Loss | ' | ||||||||||||
Changes, net of tax, in accumulated other comprehensive loss follow: | |||||||||||||
Currency Translation | Accumulated | ||||||||||||
Adjustment | Benefit Plans | Other | |||||||||||
Net Unrealized | Actuarial | Comprehensive | |||||||||||
(MILLIONS OF DOLLARS) | Losses | Gains/(Losses) | Loss | ||||||||||
Balance, December 31, 2010 | $ | (63 | ) | $ | (11 | ) | $ | (74 | ) | ||||
Other comprehensive loss, net of tax | 4 | 5 | 9 | ||||||||||
Balance, December 31, 2011 | (59 | ) | (6 | ) | (65 | ) | |||||||
Other comprehensive loss, net of tax | (93 | ) | 1 | (92 | ) | ||||||||
Balance, December 31, 2012 | (152 | ) | (5 | ) | (157 | ) | |||||||
Other comprehensive loss, net of tax | (54 | ) | (2 | ) | (56 | ) | |||||||
Separation adjustments(a) | (6 | ) | — | (6 | ) | ||||||||
Balance, December 31, 2013 | $ | (212 | ) | $ | (7 | ) | $ | (219 | ) | ||||
(a) | See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation. |
Financial_Instruments_Financia
Financial Instruments Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Financial Instruments [Abstract] | ' | ||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | ' | ||||||||||||||||||||||||||||
The components of our long-term debt follow: | |||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | |||||||||||||||||||||||||||
Allocated long-term debt | $ | — | $ | 509 | |||||||||||||||||||||||||
Lines of credit | 2 | — | |||||||||||||||||||||||||||
1.150% Senior Notes due 2016 | 400 | — | |||||||||||||||||||||||||||
1.875% Senior Notes due 2018 | 750 | — | |||||||||||||||||||||||||||
3.250% Senior Notes due 2023 | 1,350 | — | |||||||||||||||||||||||||||
4.700% Senior Notes due 2043 | 1,150 | — | |||||||||||||||||||||||||||
3,652 | 509 | ||||||||||||||||||||||||||||
Unamortized debt discount | (10 | ) | — | ||||||||||||||||||||||||||
Long-term debt / Allocated long-term debt | $ | 3,642 | $ | 509 | |||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt | ' | ||||||||||||||||||||||||||||
The principal amount of long-term debt outstanding as of December 31, 2013 matures in the following years: | |||||||||||||||||||||||||||||
After | |||||||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2014 | 2015 | 2016 | 2017 | 2018 | 2018 | Total | ||||||||||||||||||||||
Maturities | $ | — | $ | — | $ | 401 | $ | 1 | $ | 750 | $ | 2,500 | $ | 3,652 | |||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | ' | ||||||||||||||||||||||||||||
The location and fair values of derivative instruments not designated as hedging instruments at December 31, 2013 are as follows: | |||||||||||||||||||||||||||||
Fair Value of | |||||||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | Balance Sheet Location | Derivatives | |||||||||||||||||||||||||||
Foreign currency forward-exchange contracts | Other current assets | $ | 10 | ||||||||||||||||||||||||||
Foreign currency forward-exchange contracts | Other current liabilities | (5 | ) | ||||||||||||||||||||||||||
Total foreign currency forward-exchange contracts | $ | 5 | |||||||||||||||||||||||||||
Inventories_Inventories_Tables
Inventories Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Components of Inventory | ' | ||||||||
The components of inventory follow: | |||||||||
December 31, | December 31, | ||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | |||||||
Finished goods | $ | 862 | $ | 799 | |||||
Work-in-process | 218 | 332 | |||||||
Raw materials and supplies | 213 | 214 | |||||||
Inventories | $ | 1,293 | $ | 1,345 | |||||
Property_Plant_and_Equipment_P1
Property, Plant and Equipment Property, Plant and Equipment (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||
Property, Plant and Equipment [Table Text Block] | ' | ||||||||||
The components of property, plant and equipment follow: | |||||||||||
Useful Lives | As of December 31, | ||||||||||
(MILLIONS OF DOLLARS) | (Years) | 2013 | 2012 | ||||||||
Land | — | $ | 36 | $ | 35 | ||||||
Buildings | 33 1/3 - 50 | 883 | 860 | ||||||||
Machinery and equipment | 20-Aug | 1,062 | 1,071 | ||||||||
Furniture, fixtures and other | 3 - 12 1/2 | 143 | 127 | ||||||||
Construction-in-progress | — | 199 | 159 | ||||||||
2,323 | 2,252 | ||||||||||
Less: Accumulated depreciation | 1,028 | 1,011 | |||||||||
Property, plant and equipment | $ | 1,295 | $ | 1,241 | |||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
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. | EuAfME | CLAR | APAC | Total | ||||||||||||||||||||
Balance, December 31, 2011 | $ | 504 | $ | 157 | $ | 164 | $ | 164 | $ | 989 | |||||||||||||||
Other(a) | (2 | ) | — | (1 | ) | (1 | ) | (4 | ) | ||||||||||||||||
Balance, December 31, 2012 | $ | 502 | $ | 157 | $ | 163 | $ | 163 | $ | 985 | |||||||||||||||
Other(a) | (1 | ) | — | (1 | ) | (1 | ) | (3 | ) | ||||||||||||||||
Balance, December 31, 2013 | $ | 501 | $ | 157 | $ | 162 | $ | 162 | $ | 982 | |||||||||||||||
(a) | Primarily reflects adjustments for foreign currency translation. | ||||||||||||||||||||||||
Components of Identifiable Intangible Assets | ' | ||||||||||||||||||||||||
The components of identifiable intangible assets follow: | |||||||||||||||||||||||||
As of December 31, 2013 | As of December 31, 2012 | ||||||||||||||||||||||||
Identifiable | Identifiable | ||||||||||||||||||||||||
Gross | Intangible Assets, | Gross | Intangible Assets, | ||||||||||||||||||||||
Carrying | Accumulated | Less Accumulated | Carrying | Accumulated | Less Accumulated | ||||||||||||||||||||
(MILLIONS OF DOLLARS) | Amount | Amortization | Amortization | Amount | Amortization | Amortization | |||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||
Developed technology rights | $ | 762 | $ | (219 | ) | $ | 543 | $ | 762 | $ | (173 | ) | $ | 589 | |||||||||||
Brands | 216 | (100 | ) | 116 | 216 | (88 | ) | 128 | |||||||||||||||||
Trademarks and trade names | 59 | (38 | ) | 21 | 54 | (36 | ) | 18 | |||||||||||||||||
Other | 121 | (116 | ) | 5 | 122 | (115 | ) | 7 | |||||||||||||||||
Total finite-lived intangible assets | 1,158 | (473 | ) | 685 | 1,154 | (412 | ) | 742 | |||||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||
Brands | 39 | — | 39 | 39 | — | 39 | |||||||||||||||||||
Trademarks and trade names | 67 | — | 67 | 67 | — | 67 | |||||||||||||||||||
In-process research and development | 12 | — | 12 | 20 | — | 20 | |||||||||||||||||||
Total indefinite-lived intangible assets | 118 | — | 118 | 126 | — | 126 | |||||||||||||||||||
Identifiable intangible assets | $ | 1,276 | $ | (473 | ) | $ | 803 | $ | 1,280 | $ | (412 | ) | $ | 868 | |||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | ||||||||||||||||||||||||
The annual amortization expense expected for the years 2014 through 2018 is as follows: | |||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||
Amortization expense | $ | 63 | $ | 62 | $ | 62 | $ | 62 | $ | 59 | |||||||||||||||
Benefit_Plans_Tables
Benefit Plans (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Postemployment Benefits [Abstract] | ' | |||||||||
Schedule of Assumptions Used [Table Text Block] | ' | |||||||||
The following table provides the weighted average actuarial assumptions for the dedicated pension plans: | ||||||||||
As of December 31, | ||||||||||
(PERCENTAGES) | 2013 | 2012 | 2011 | |||||||
Weighted average assumptions used to determine benefit obligations: | ||||||||||
Discount rate | 5 | % | 4.6 | % | 5.8 | % | ||||
Rate of compensation increase | 4.4 | % | 5.3 | % | 2.7 | % | ||||
Weighted average assumptions used to determine net benefit cost for the year ended December 31: | ||||||||||
Discount rate | 4.6 | % | 5.8 | % | 5.1 | % | ||||
Expected return on plan assets | 4.5 | % | 3.6 | % | 3.6 | % | ||||
Rate of compensation increase | 5.3 | % | 2.7 | % | 2.7 | % | ||||
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan [Table Text Block] | ' | |||||||||
An analysis of the changes in our benefit obligations, plan assets and funded status of our dedicated plans follows: | ||||||||||
As of and for the | ||||||||||
Year Ended December 31, | ||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | ||||||||
Change in benefit obligation: | ||||||||||
Projected benefit obligation, beginning | $ | 39 | $ | 37 | ||||||
Separation adjustments(a) | 28 | — | ||||||||
Changes in actuarial assumptions and other | (2 | ) | 2 | |||||||
Adjustments for foreign currency translation | 2 | (1 | ) | |||||||
Other––net | 6 | 1 | ||||||||
Benefit obligation, ending | 73 | 39 | ||||||||
Change in plan assets: | ||||||||||
Fair value of plan assets, beginning | 35 | 33 | ||||||||
Separation adjustments(a) | 7 | — | ||||||||
Actual return on plan assets | — | 2 | ||||||||
Company contributions | — | 2 | ||||||||
Adjustments for foreign currency translation | 2 | (1 | ) | |||||||
Other––net | 1 | (1 | ) | |||||||
Fair value of plan assets, ending | 45 | 35 | ||||||||
Funded status—Projected benefit obligation in excess of plan assets at end of year(b) | $ | (28 | ) | $ | (4 | ) | ||||
(a) | Represents the benefit obligations and plan assets (net obligation of approximately $21 million) transferred to us in 2013 from Pfizer as part of the Separation, as described above. | |||||||||
(b) | Included in Other noncurrent liabilities. | |||||||||
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets [Table Text Block] | ' | |||||||||
Information related to the funded status of selected plans follows: | ||||||||||
As of December 31, | ||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | ||||||||
Pension plans with an accumulated benefit obligation in excess of plan assets: | ||||||||||
Fair value of plan assets | $ | 37 | $ | 35 | ||||||
Accumulated benefit obligation | 58 | 38 | ||||||||
Pension plans with a projected benefit obligation in excess of plan assets: | ||||||||||
Fair value of plan assets | 42 | 35 | ||||||||
Projected benefit obligation | 70 | 39 | ||||||||
Schedule of Allocation of Plan Assets [Table Text Block] | ' | |||||||||
The components of plan assets follow: | ||||||||||
As of December 31, | ||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | ||||||||
Cash and cash equivalents | $ | — | $ | 1 | ||||||
Equity securities: Equity commingled funds | 7 | 5 | ||||||||
Debt securities: Government bonds | 31 | 28 | ||||||||
Real estate | 2 | 1 | ||||||||
Other investments | 5 | — | ||||||||
Total(a) | $ | 45 | $ | 35 | ||||||
(a) | Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 4. Significant Accounting Policies—Fair Value). All investment plan assets are valued using Level 1 or Level 2 inputs. | |||||||||
Schedule Of Percentage Of Allocation Of Plan Assets Table [Text Block] | ' | |||||||||
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 | ||||||||||
percentage | Percentage of Plan Assets | |||||||||
(PERCENTAGES) | 2013 | 2013 | 2012 | |||||||
Cash and cash equivalents | 0-20% | — | % | 1.8 | % | |||||
Equity securities | 0-20% | 14.2 | % | 13 | % | |||||
Debt securities | 65-80% | 70.1 | % | 79.5 | % | |||||
Other investments | 0-20% | 15.7 | % | 5.7 | % | |||||
Total | 100 | % | 100 | % | 100 | % |
Sharebased_Payments_Sharebased
Share-based Payments Share-based Payments (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Components of Share-based Compensation Expense | ' | |||||||||||||
The components of share-based compensation expense follow: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | |||||||||||
Stock option expense | $ | 9 | $ | — | — | |||||||||
RSU / DSU expense | 9 | — | — | |||||||||||
Pfizer stock benefit plans—direct | 25 | 28 | 19 | |||||||||||
Share-based compensation expense—direct | 43 | 28 | 19 | |||||||||||
Share-based compensation expense—indirect | — | 5 | 6 | |||||||||||
Share-based compensation expense—total | $ | 43 | $ | 33 | 25 | |||||||||
Tax benefit for share-based compensation expense | (6 | ) | (10 | ) | (6 | ) | ||||||||
Share-based compensation expense, net of tax | $ | 37 | $ | 23 | $ | 19 | ||||||||
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, 2013 | ||||||||||||||
Expected dividend yield(a) | 1 | % | ||||||||||||
Risk-free interest rate(b) | 1.3 | % | ||||||||||||
Expected stock price volatility(c) | 28.21 | % | ||||||||||||
Expected term(d) (years) | 6.5 | |||||||||||||
(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 implied volatility. | |||||||||||||
(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, 2013: | ||||||||||||||
Weighted-Average | ||||||||||||||
Weighted-Average | Remaining | Aggregate | ||||||||||||
Exercise Price | Contractual Term | Intrinsic Value(a) | ||||||||||||
Shares | Per Share | (Years) | (MILLIONS) | |||||||||||
Outstanding, December 31, 2012 | — | $ | — | |||||||||||
Granted | 2,994,295 | 26.11 | ||||||||||||
Exercised | (6,419 | ) | 26 | |||||||||||
Forfeited | (108,312 | ) | 26.01 | |||||||||||
Outstanding, December 31, 2013 | 2,879,564 | $ | 26.11 | 9.1 | $ | 19 | ||||||||
Exercisable, December 31, 2013 | 22,388 | $ | 26 | 9.1 | $ | — | ||||||||
(a) | Market price of underlying Zoetis common stock less exercise price. | |||||||||||||
The following table summarizes data related to stock option activity: | ||||||||||||||
Year Ended/As of | ||||||||||||||
(MILLIONS OF DOLLARS, EXCEPT PER STOCK OPTION AMOUNTS) | December 31, 2013 | |||||||||||||
Weighted-average grant date fair value per stock option | $ | 7.05 | ||||||||||||
Aggregate intrinsic value on exercise | — | |||||||||||||
Cash received upon exercise | — | |||||||||||||
Tax benefits realized related to exercise | — | |||||||||||||
Total compensation cost related to nonvested stock options not yet recognized, pre-tax | 11 | |||||||||||||
Weighted-average period over which stock option compensation is expected to be recognized (years) | 2 | |||||||||||||
Restricted Stock Units (RSUs) | ' | |||||||||||||
The following table provides an analysis of RSU activity for the year ended December 31, 2013: | ||||||||||||||
Weighted-Average | ||||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Shares | Per Share | |||||||||||||
Nonvested, December 31, 2012 | — | $ | — | |||||||||||
Granted | 980,093 | 26.79 | ||||||||||||
Vested | (2,669 | ) | 26 | |||||||||||
Reinvested dividend equivalents | 7,484 | 26.53 | ||||||||||||
Forfeited | (35,538 | ) | 26.13 | |||||||||||
Nonvested, December 31, 2013 | 949,370 | $ | 26.82 | |||||||||||
The follow table provides data related to RSU activity: | ||||||||||||||
Year Ended/As of | ||||||||||||||
(MILLIONS OF DOLLARS) | December 31, 2013 | |||||||||||||
Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax | $ | 17 | ||||||||||||
Weighted-average period over which RSU cost is expected to be recognized (years) | 2.1 | |||||||||||||
Earnings_Per_Share_Earnings_Pe
Earnings Per Share Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
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) | 2013 | 2012 | 2011 | ||||||||||
Numerator | |||||||||||||
Net income before allocation to noncontrolling interests | $ | 503 | $ | 436 | $ | 248 | |||||||
Net income/(loss) attributable to noncontrolling interests | (1 | ) | — | 3 | |||||||||
Net income attributable to Zoetis Inc. | $ | 504 | $ | 436 | $ | 245 | |||||||
Denominator | |||||||||||||
Weighted-average common shares outstanding | 500.002 | 500 | 500 | ||||||||||
Common stock equivalents: stock options, RSUs and DSUs | 0.315 | — | |||||||||||
Weighted-average common and potential dilutive shares outstanding | 500.317 | 500 | 500 | ||||||||||
Earnings per share attributable to Zoetis Inc. stockholders—basic | $ | 1.01 | $ | 0.87 | $ | 0.49 | |||||||
Earnings per share attributable to Zoetis Inc. stockholders—diluted | $ | 1.01 | $ | 0.87 | $ | 0.49 | |||||||
Commitments_and_Contingencies_1
Commitments and Contingencies Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ||||||||||||||||||||||||||||
Future minimum lease payments under non-cancellable operating leases as of December 31, 2013 follow: | |||||||||||||||||||||||||||||
After | |||||||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2014 | 2015 | 2016 | 2017 | 2018 | 2018 | Total | ||||||||||||||||||||||
Maturities | $ | 18 | $ | 14 | $ | 12 | $ | 8 | $ | 5 | $ | 10 | $ | 67 | |||||||||||||||
Segment_and_Other_Revenue_Info1
Segment and Other Revenue Information Segment and Other Revenue Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Schedule of Selected Income Statement Information by Segment | ' | ||||||||||||
Selected Statement of Income Information | |||||||||||||
Depreciation | |||||||||||||
(MILLIONS OF DOLLARS) | Revenue(a) | Earnings(b) | and Amortization(c) | ||||||||||
Year Ended December 31, 2013 | |||||||||||||
U.S. | $ | 1,902 | $ | 1,045 | $ | 43 | |||||||
EuAfME | 1,168 | 420 | 25 | ||||||||||
CLAR | 778 | 266 | 18 | ||||||||||
APAC | 713 | 271 | 13 | ||||||||||
Total reportable segments | 4,561 | 2,002 | 99 | ||||||||||
Other business activities(d) | — | (320 | ) | 25 | |||||||||
Reconciling Items: | |||||||||||||
Corporate(e) | — | (567 | ) | 23 | |||||||||
Purchase accounting adjustments(f) | — | (48 | ) | 48 | |||||||||
Acquisition-related costs(g) | — | (22 | ) | — | |||||||||
Certain significant items(h) | — | (240 | ) | 5 | |||||||||
Other unallocated(i) | — | (115 | ) | 9 | |||||||||
$ | 4,561 | $ | 690 | $ | 209 | ||||||||
Year Ended December 31, 2012 | |||||||||||||
U.S. | $ | 1,776 | $ | 921 | $ | 28 | |||||||
EuAfME | 1,096 | 375 | 28 | ||||||||||
CLAR | 769 | 253 | 23 | ||||||||||
APAC | 695 | 236 | 17 | ||||||||||
Total reportable segments | 4,336 | 1,785 | 96 | ||||||||||
Other business activities(d) | — | (275 | ) | 16 | |||||||||
Reconciling Items: | |||||||||||||
Corporate(e) | — | (506 | ) | 25 | |||||||||
Purchase accounting adjustments(f) | — | (52 | ) | 52 | |||||||||
Acquisition-related costs(g) | — | (53 | ) | 10 | |||||||||
Certain significant items(h) | — | (96 | ) | 1 | |||||||||
Other unallocated(i) | — | (93 | ) | — | |||||||||
$ | 4,336 | $ | 710 | $ | 200 | ||||||||
Year Ended December 31, 2011 | |||||||||||||
U.S. | $ | 1,659 | $ | 820 | $ | 26 | |||||||
EuAfME | 1,144 | 365 | 25 | ||||||||||
CLAR | 788 | 275 | 25 | ||||||||||
APAC | 642 | 196 | 15 | ||||||||||
Total reportable segments | 4,233 | 1,656 | 91 | ||||||||||
Other business activities(d) | — | (279 | ) | 15 | |||||||||
Reconciling Items: | |||||||||||||
Corporate(e) | — | (504 | ) | 31 | |||||||||
Purchase accounting adjustments(f) | — | (82 | ) | 59 | |||||||||
Acquisition-related costs(g) | — | (122 | ) | 6 | |||||||||
Certain significant items(h) | — | (172 | ) | 3 | |||||||||
Other unallocated(i) | — | (103 | ) | — | |||||||||
$ | 4,233 | $ | 394 | $ | 205 | ||||||||
(a) | Revenue denominated in euros were $693 million in 2013, $639 million in 2012, and $710 million in 2011. | ||||||||||||
(b) | Defined as income before provision for taxes on income. | ||||||||||||
(c) | 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. | ||||||||||||
(d) | Other business activities reflects R&D costs managed by our Research and Development organization and not allocated to the operating segments. | ||||||||||||
(e) | Corporate includes, among other things, administration expenses, interest expense, certain compensation and other costs not charged to our operating segments. | ||||||||||||
(f) | Purchase accounting adjustments include certain charges related to intangible assets, property, plant and equipment not charged to our operating segments, and the fair value adjustments to inventory. | ||||||||||||
(g) | Acquisition-related costs can include costs associated with acquiring, integrating and restructuring acquired businesses, such as allocated transaction costs, integration costs, restructuring charges and additional depreciation associated with asset restructuring. For additional information, see Note 6. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives. | ||||||||||||
(h) | 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 restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition, the impact of divestiture-related gains and losses and certain costs related to becoming an independent public company. For additional information, see Note 6. Restructuring Charges and Other Costs Associated with Acquisition and Cost-Reduction/Productivity Initiatives. | ||||||||||||
• | For 2013, certain significant items primarily includes: (i) Zoetis stand-up costs of $206 million; (ii) $20 million income primarily related to a reversal of certain employee termination expenses, partially offset by restructuring charges related to exiting certain manufacturing and research facilities; (iii) $6 million income on the government-mandated sale of certain product rights in Brazil that were acquired with the FDAH acquisition in 2009; (iv) asset impairment charges associated with asset restructuring of $19 million; (v) additional depreciation associated with asset restructuring of $8 million; (vi) write-offs of inventory and intercompany accounts that were transferred to us as part of the Separation from Pfizer of $24 million; and (vii) litigation-related charges of $5 million. Stand-up costs include 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, accelerated vesting and associated cash payment related to certain Pfizer equity awards, and certain legal registration and patent assignment costs. | ||||||||||||
• | For 2012, certain significant items includes: (i) $115 million for restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition; (ii) $14 million income related to a favorable legal settlement for an intellectual property matter; and (iii) $4 million income due to a change in estimate related to transitional manufacturing purchase agreements associated with divestitures. | ||||||||||||
• | In 2011, certain significant items includes: (i) $62 million for restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition; (ii) certain asset impairment charges of $69 million; (iii) certain charges to write-off inventory of $12 million; (iv) charges related to transitional manufacturing purchase agreements associated with divestitures of $27 million; and (v)other costs of $2 million. | ||||||||||||
(i) | Includes overhead expenses associated with our manufacturing operations. | ||||||||||||
Long-lived Assets by Geographic Areas [Table Text Block] | ' | ||||||||||||
Property, plant and equipment, less accumulated depreciation, by geographic region follow: | |||||||||||||
As of December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | |||||||||||
U.S. | $ | 827 | $ | 788 | |||||||||
EuAfME | 233 | 224 | |||||||||||
CLAR | 114 | 72 | |||||||||||
APAC | 121 | 157 | |||||||||||
Property, plant and equipment, less accumulated depreciation | $ | 1,295 | $ | 1,241 | |||||||||
Schedule of Significant Product Revenues | ' | ||||||||||||
Revenue by Species | |||||||||||||
Significant species revenue are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
Livestock: | |||||||||||||
Cattle | $ | 1,631 | $ | 1,608 | $ | 1,617 | |||||||
Swine | 655 | 590 | 562 | ||||||||||
Poultry | 541 | 501 | 501 | ||||||||||
Other | 104 | 107 | 98 | ||||||||||
2,931 | 2,806 | 2,778 | |||||||||||
Companion Animal: | |||||||||||||
Horses | 179 | 187 | 168 | ||||||||||
Dogs and Cats | 1,451 | 1,343 | 1,287 | ||||||||||
1,630 | 1,530 | 1,455 | |||||||||||
Total revenue | $ | 4,561 | $ | 4,336 | $ | 4,233 | |||||||
Revenue by Major Product Category | |||||||||||||
Significant revenue by major product category are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | ||||||||||
Anti-infectives | $ | 1,295 | $ | 1,268 | $ | 1,311 | |||||||
Vaccines | 1,201 | 1,117 | 1,077 | ||||||||||
Parasiticides | 727 | 692 | 645 | ||||||||||
Medicated feed additives | 446 | 403 | 347 | ||||||||||
Other pharmaceuticals | 744 | 712 | 724 | ||||||||||
Other non-pharmaceuticals | 148 | 144 | 129 | ||||||||||
Total revenue | $ | 4,561 | $ | 4,336 | $ | 4,233 | |||||||
Transactions_and_Agreements_wi1
Transactions and Agreements with Pfizer Transactions and Agreements with Pfizer (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Related Party Transactions [Abstract] | ' | ||||
Schedule of Related Party Transactions | ' | ||||
The amounts charged under each of the agreements with Pfizer, through the completion of the Exchange Offer on June 24, 2013, were as follows: | |||||
(MILLIONS OF DOLLARS) | |||||
Transitional services agreement | $ | 63 | |||
Master manufacturing and supply agreements | 130 | ||||
Employee matters agreement | 99 | ||||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Unaudited) Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of Quarterly Financial Information [Table Text Block] | ' | ||||||||||||||||
(MILLIONS OF DOLLARS, EXCEPT PER COMMON SHARE DATA) | FIRST | SECOND | THIRD | FOURTH | |||||||||||||
2013:00:00 | |||||||||||||||||
Revenue | $ | 1,090 | $ | 1,114 | $ | 1,103 | $ | 1,254 | |||||||||
Costs and expenses | 891 | 947 | 915 | 1,092 | |||||||||||||
Restructuring charges and certain acquisition-related costs | 7 | (20 | ) | 3 | 36 | ||||||||||||
Income before provision for taxes on income | 192 | 187 | 185 | 126 | |||||||||||||
Provision for taxes on income(a) | 52 | 59 | 54 | 22 | |||||||||||||
Net income before allocation to noncontrolling interests | 140 | 128 | 131 | 104 | |||||||||||||
Net income/(loss) attributable to noncontrolling interests | — | — | — | (1 | ) | ||||||||||||
Net income/(loss) attributable to Zoetis | $ | 140 | $ | 128 | $ | 131 | $ | 105 | |||||||||
Earnings per common share--basic(c) | $ | 0.28 | $ | 0.26 | $ | 0.26 | $ | 0.21 | |||||||||
Earnings per common share--diluted(c) | $ | 0.28 | $ | 0.26 | $ | 0.26 | $ | 0.21 | |||||||||
2012:00:00 | |||||||||||||||||
Revenue | $ | 1,047 | $ | 1,094 | $ | 1,019 | $ | 1,176 | |||||||||
Costs and expenses(b) | 851 | 818 | 800 | 1,022 | |||||||||||||
Restructuring charges and certain acquisition-related costs | 25 | 24 | 6 | 80 | |||||||||||||
Income before provision for taxes on income | 171 | 252 | 213 | 74 | |||||||||||||
Provision for taxes on income(a) | 59 | 79 | 52 | 84 | |||||||||||||
Net income before allocation to noncontrolling interests | 112 | 173 | 161 | (10 | ) | ||||||||||||
Net income/(loss) attributable to noncontrolling interests | 1 | — | (1 | ) | — | ||||||||||||
Net income attributable to Zoetis | $ | 111 | $ | 173 | $ | 162 | $ | (10 | ) | ||||||||
Earnings per common share--basic(c) | $ | 0.22 | $ | 0.35 | $ | 0.32 | $ | (0.02 | ) | ||||||||
Earnings per common share--diluted(c) | $ | 0.22 | $ | 0.35 | $ | 0.32 | $ | (0.02 | ) | ||||||||
(a) | Fourth quarter comparisons are impacted by an elevated tax rate in the fourth quarter of 2012, when Zoetis was still a business unit of Pfizer and reported consolidated results. The 2012 income tax provision in the combined statement of income was calculated as if Zoetis filed a separate tax return. | ||||||||||||||||
(b) | Costs and expenses in the fourth quarter reflect seasonal trends as well as specific costs associated with the build-up of our capabilities as an independent company. | ||||||||||||||||
(c) | The weighted average common shares outstanding for both basic and diluted earnings per share for 2012 was calculated using an aggregate of 500 million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the IPO. There were no Zoetis restricted stock units, stock options or performance shares outstanding prior to the IPO. |
Schedule_II_Valuation_and_Qual1
Schedule II - Valuation and Qualifying Accounts Schedule II - Valuation and Qualifying Accounts (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Receivables [Abstract] | ' | ||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | ' | ||||||||||||||||
Balance, | Balance, | ||||||||||||||||
Beginning of | End of | ||||||||||||||||
(MILLIONS OF DOLLARS) | Period | Additions | Deductions | Period | |||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Allowance for doubtful accounts | $ | 49 | $ | 6 | $ | (24 | ) | (a) | $ | 31 | |||||||
Year Ended December 31, 2012 | |||||||||||||||||
Allowance for doubtful accounts | 29 | 23 | (3 | ) | 49 | ||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||
Allowance for doubtful accounts | 26 | 5 | (2 | ) | 29 | ||||||||||||
(a) Primarily reflects Separation Adjustments (see Notes to Consolidated and Combined Financial Statements—Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer— Adjustments Associated with the Separation) as well as an adjustment related to improved accounts receivable collection experience. |
Business_Description_Business_
Business Description Business Description (Details) | Dec. 31, 2013 |
species | |
product_categories | |
region | |
countries | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Number of regional segments | 4 |
Number of countries in which entity markets products | 120 |
Number of core animal species | 8 |
Number of major product categories | 5 |
Separation_Activities_and_Init1
Separation Activities and Initial Public Offering (Separation and Senior Notes Offering) (Details) (USD $) | Dec. 31, 2013 | Jan. 28, 2013 | Jan. 28, 2013 | Jan. 28, 2013 |
Senior Notes | Pfizer Transfer | Pfizer Transfer | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' |
Senior notes transferred to Pfizer | ' | ' | ' | $1,000,000,000 |
Cash transferred to Pfizer | ' | ' | 2,500,000,000 | ' |
Debt, principal amount | 3,652,000,000 | 3,650,000,000 | ' | 1,000,000,000 |
Debt, unamortized discount | ' | $10,000,000 | ' | ' |
Separation_Activities_and_Init2
Separation Activities and Initial Public Offering (Separation Adjustments) (Details) (Separation Adjustment, USD $) | Jun. 24, 2013 |
In Millions, unless otherwise specified | |
Schedule of Separation Adjustments [Line Items] | ' |
Net liabilities retained by Pfizer | $445 |
Removal of property, plant and equipment, retained by Pfizer | 2 |
Removal of net other assets, retained by Pfizer | 5 |
Business Separation, Addition of Net Receivables, From Related Party | 5 |
Addition of net benefit plan liabilities, retained by Pfizer | 21 |
Business Separation, Deferred Compensation Liabilities, Retained by Related Party | 4 |
Elimination of noncurrent deferred tax assets, retained by Pfizer | 49 |
Addition of noncurrent deferred tax assets, retained by Pfizer | 8 |
Addition of noncurrent deferred tax assets related to net operating loss and tax credit carryforwards, retained by Pfizer | 2 |
Addition of noncurrent deferred tax liabilities related to property, plant and equipment transferred by Pfizer | 2 |
Elimination of allocated long-term debt, retained by Pfizer | 582 |
Elimination of allocated accrued Interest payable, retained by Pfizer | 16 |
Elimination of allocated unamortized deferred debt issuance costs, retained by Pfizer | 2 |
Certain net financial assets retained by Pfizer | 45 |
Removal of miscellaneous other liabilities, retained by Pfizer | 57 |
Business Separation, Addition to Net Deferred Tax Assets, Adjustment | 1 |
Business Separation, Addition to Inventory, Retained by Related Party | 15 |
Business Separation, Elimination of Prepaid Taxes | 4 |
Business Separation, Addition of Net Benefit Plan Liabilities, To Transfer from Related Party | 21 |
Non-dedicated Manufacturing Sites Retained by Pfizer | ' |
Schedule of Separation Adjustments [Line Items] | ' |
Removal of inventories, retained by Pfizer | 74 |
Removal of property, plant and equipment, retained by Pfizer | 28 |
Removal of other net liabilities, retained by Pfizer | 21 |
Non-dedicated Manufacturing Site Transferred by Pfizer | ' |
Schedule of Separation Adjustments [Line Items] | ' |
Removal of inventories, retained by Pfizer | 46 |
Addition of property, plant and equipment, retained by Pfizer | 56 |
Removal of net other assets, retained by Pfizer | 4 |
Non U.S. Jurisdiction | ' |
Schedule of Separation Adjustments [Line Items] | ' |
Removal of inventories, retained by Pfizer | 5 |
Removal of property, plant and equipment, retained by Pfizer | 8 |
Removal of other net liabilities, retained by Pfizer | 2 |
Business Separation, Decrease in Cash, Retained by Related Party | 7 |
Removal of net other assets, retained by Pfizer | $3 |
Separation_Activities_and_Init3
Separation Activities and Initial Public Offering (Initial Public Offering) (Details) (USD $) | Dec. 31, 2013 | Feb. 06, 2013 | Feb. 06, 2013 | Feb. 06, 2013 |
Common Class A | Common Class B | IPO | ||
Common Class A | ||||
Class of Stock [Line Items] | ' | ' | ' | ' |
Common stock, shares issued | 500,007,428 | ' | ' | 99,015,000 |
Share price | ' | ' | ' | $26 |
Common stock, shares outstanding | 500,007,428 | 99,015,000 | 400,985,000 | ' |
Basis_of_Presentation_Basis_of
Basis of Presentation Basis of Presentation (Details) | Jan. 31, 2011 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Business Acquisition, Percentage of Voting Interests Acquired | 92.50% |
Basis_of_Presentation_Pre_IPO_
Basis of Presentation (Pre IPO Allocations) (Details) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jul. 01, 2012 | Apr. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 28, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 28, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 28, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | |
Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | Allocated Expense From Parent | |||||||||||||
Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | |||||||||||||
Cost of Sales | Cost of Sales | Cost of Sales | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Research and Development Expense | Research and Development Expense | Restructuring Charges and Certain Acquisition-related Costs | Restructuring Charges and Certain Acquisition-related Costs | ||||||||||||||||
Schedule of Expenses Allocated from Separation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Enabling Functions operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $11 | $310 | $335 | ' | $1 | $3 | $11 | $254 | $268 | $55 | $64 | ' | ' | |
PGS manufacturing costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25 | 34 | ' | ' | ' | ' | ' | ' | ' | |
Restructuring charges and certain acquisition-related costs | 36 | 3 | -20 | 7 | 80 | 6 | 24 | 25 | 26 | 135 | 154 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 57 | 70 |
Other costs associated with cost reduction/productivity initiativesbadditional depreciation associated with asset restructuring | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 13 | 20 | ' | ' | ' | 2 | 4 | 1 | 9 | 19 | ' | ' | |
Other costs associated with cost reduction/productivity initiativesbimplementation costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 9 | ' | ' | ' | ' | 1 | 8 | ' | 1 | ' | ' | ' | |
Share-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | 43 | 28 | 19 | 3 | 33 | 25 | 1 | 7 | 5 | 2 | 21 | 16 | 5 | 4 | ' | ' | |
Transaction costs(c) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 |
Compensation-related expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 12 | 6 | ' | 5 | 2 | 1 | 5 | 3 | 2 | 1 | ' | ' | |
Interest expense, net of capitalized interest | ' | ' | ' | ' | ' | ' | ' | ' | $113 | $31 | $36 | [1] | $2 | $31 | $36 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
[1] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | ||||||||||||||||||||||||
[2] | Additional depreciation associated with asset restructuring represents the impact of changes in the estimated lives of assets involved in restructuring actions. In 2013, included in Cost of sales ($1 million) and Selling, general and administrative expenses ($2 million). For 2012, included in Cost of sales ($10 million), Selling, general and administrative expenses ($5 million) and Research and development expenses ($9 million). For 2011, included in Cost of sales ($6 million), Selling, general and administrative expenses ($4 million) and Research and development expenses ($19 million). |
Significant_Accounting_Policie2
Significant Accounting Policies Significant Accounting Policies (Details) (USD $) | 12 Months Ended | 24 Months Ended | ||||||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | ||||
significant accounting policies [Line Items] | ' | ' | ' | ' | ||||
Income Tax Contingency Benefit Recognition Model Percent | 50.00% | ' | ' | ' | ||||
Advertising Expense | $143 | $141 | $134 | ' | ||||
Shipping, Handling and Transportation Costs | 60 | 59 | 66 | ' | ||||
Capitalized Computer Software, Net | 35 | 3 | ' | 3 | ||||
Capitalized Computer Software, Accumulated Amortization | 2 | 2 | 2 | ' | ||||
Weighted-average common shares outstanding | 500,002 | 500,000 | [1] | 500,000 | [1],[2] | 500,000 | ||
Accounts receivable, less allowance for doubtful accounts of $31 in 2013 and $49 in 2012 | 1,138 | [3] | 900 | [3] | ' | 900 | [3] | |
Other Receivables, Net, Current | 65 | 43 | ' | 43 | ||||
Asset Retirement Obligation, Current | 0.1 | 0.2 | ' | 0.2 | ||||
Asset Retirement Obligations, Noncurrent | 12 | 15 | ' | 15 | ||||
Other Current Liabilities | ' | ' | ' | ' | ||||
significant accounting policies [Line Items] | ' | ' | ' | ' | ||||
Liability for purchases of Property, Plant and Equipment | 16 | ' | ' | ' | ||||
Accruals for Sales Deductions | 153 | 126 | ' | 126 | ||||
Accounts Payable | ' | ' | ' | ' | ||||
significant accounting policies [Line Items] | ' | ' | ' | ' | ||||
Liability for purchases of Property, Plant and Equipment | ' | $14 | ' | $14 | ||||
Maximum [Member] | Software Capitalization [Member] | ' | ' | ' | ' | ||||
significant accounting policies [Line Items] | ' | ' | ' | ' | ||||
Property, Plant and Equipment, Useful Life | '10 years | ' | ' | ' | ||||
Minimum | Software Capitalization [Member] | ' | ' | ' | ' | ||||
significant accounting policies [Line Items] | ' | ' | ' | ' | ||||
Property, Plant and Equipment, Useful Life | '5 years | ' | ' | ' | ||||
[1] | The weighted average shares outstanding for both basic and diluted earnings per share for the years ended December 31, 2012 and 2011 was calculated using 500B million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the initial public offering, which was completed on February 6, 2013. There were no Zoetis restricted stock units, deferred stock units, stock options or performance shares outstanding prior to the initial public offering. | |||||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||||
[3] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
Acquisitions_and_Divestitures_1
Acquisitions and Divestitures Acquisitions and Divestitures (Details) (USD $) | 11 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||
Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 31, 2011 | Feb. 28, 2011 | Jan. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2011 | ||||
King | King | King Animal Health | Cost of Sales | Other Income Expense Net | Other Income Expense Net | Jilin Pfizer Guoyuan Animal Health Co Ltd | ||||||||
Wyeth | Wyeth | |||||||||||||
Europe | Europe | |||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $329,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Gain (Loss) on Disposition of Assets | ' | 6,000,000 | [1] | 0 | [1] | 0 | [1] | ' | ' | ' | ' | ' | ' | ' |
Service Management Costs | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | ' | 7,000,000 | ' | |||
Proceeds from Sale of Intangible Assets | ' | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | ' | ' | |||
Payments to Acquire Interest in Joint Venture | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,000,000 | |||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45.00% | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 55.00% | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | |||
Goodwill | 989,000,000 | 982,000,000 | [2] | 985,000,000 | [2] | 989,000,000 | ' | ' | ' | ' | ' | ' | 10,000,000 | |
BusinessAcquisitionCostOfAcquiredEntityCashPaidPerShare | ' | ' | ' | ' | 14.25 | 14.25 | ' | ' | ' | ' | ' | |||
Business Acquisition Acquired Entity Common Shares Percent | ' | ' | ' | ' | 92.50% | ' | ' | ' | ' | ' | ' | |||
Business Combination, Consideration Transferred | ' | ' | ' | ' | 3,600,000,000 | ' | ' | ' | ' | ' | ' | |||
Payments to Acquire Businesses, Net of Cash Acquired | ' | $4,000,000 | $0 | $345,000,000 | $3,200,000,000 | ' | $345,000,000 | ' | ' | ' | ' | |||
[1] | For 2013, represents the net gain on the government-mandated sale of certain product rights in Brazil that were acquired with the FDAH acquisition in 2009. | |||||||||||||
[2] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
Restructuring_Charges_and_Othe2
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jul. 01, 2012 | Apr. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Accelerated depreciation | ' | ' | ' | ' | ' | ' | ' | ' | $5 | [1] | ' | ' | ||
Total Restructuring charges and certain acquisition-related costs | 36 | 3 | -20 | 7 | 80 | 6 | 24 | 25 | 26 | 135 | 154 | [2] | ||
Transaction costs(c) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | [3] | ||
Total costs associated with restructuring, acquisitions and cost-reduction/productivity initiatives | ' | ' | ' | ' | ' | ' | ' | ' | 30 | 168 | 186 | |||
Certain Significant Items | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Charges | ' | ' | ' | ' | ' | ' | ' | ' | -20 | ' | ' | |||
Additional depreciation associated with asset restructuring | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' | |||
United States (U.S.) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | |||
Canada and Latin America (CLAR) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Charges | ' | ' | ' | ' | ' | ' | ' | ' | 4 | 3 | 2 | |||
Asia Pacific (APAC) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1 | -2 | |||
Manufacturing, Research, Corporate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Charges | ' | ' | ' | ' | ' | ' | ' | ' | -3 | -1 | ' | |||
Cost of Sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Additional depreciation associated with asset restructuring | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 10 | 6 | |||
Research and Development Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Additional depreciation associated with asset restructuring | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9 | 19 | |||
Selling, General and Administrative Expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Additional depreciation associated with asset restructuring | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 5 | 4 | |||
Certain Significant Items | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27 | ' | |||
Direct Cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Integration costs(a) | ' | ' | ' | ' | ' | ' | ' | ' | 21 | [4] | 26 | [4] | 30 | [4] |
Employee termination costs | ' | ' | ' | ' | ' | ' | ' | ' | -23 | [1] | 49 | [1] | 53 | [1] |
Asset impairment charges | ' | ' | ' | ' | ' | ' | ' | ' | 19 | [1] | 4 | [1] | 0 | [1] |
Exit costs | ' | ' | ' | ' | ' | ' | ' | ' | 4 | [1] | -1 | [1] | 1 | [1] |
Total Restructuring charges and certain acquisition-related costs | ' | ' | ' | ' | ' | ' | ' | ' | 26 | [3] | 78 | [3] | 84 | [3] |
Additional depreciation associated with asset restructuring | ' | ' | ' | ' | ' | ' | ' | ' | 1 | [5] | 11 | [5] | 9 | [5] |
Implementation costsbballocated(e) | ' | ' | ' | ' | ' | ' | ' | ' | 0 | [6] | 0 | [6] | 3 | [6] |
Direct Cost | Europe, Africa, and Middle East (EuAfME) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Charges | ' | ' | ' | ' | ' | ' | ' | ' | 4 | 51 | 33 | |||
Direct Cost | Manufacturing, Research, Corporate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19 | |||
Allocated Cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Integration costs(a) | ' | ' | ' | ' | ' | ' | ' | ' | 0 | [4] | 21 | [4] | 41 | [4] |
Employee termination costs | ' | ' | ' | ' | ' | ' | ' | ' | 0 | [1] | 19 | [1] | 20 | [1] |
Asset impairment charges | ' | ' | ' | ' | ' | ' | ' | ' | 0 | [1] | 10 | [1] | 7 | [1] |
Exit costs | ' | ' | ' | ' | ' | ' | ' | ' | 0 | [1] | 7 | [1] | 0 | [1] |
Total Restructuring charges and certain acquisition-related costs | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 57 | 70 | |||
Additional depreciation associated with asset restructuring | ' | ' | ' | ' | ' | ' | ' | ' | 2 | [5] | 13 | [5] | 20 | [5] |
Implementation costsbballocated(e) | ' | ' | ' | ' | ' | ' | ' | ' | 1 | [6] | 9 | [6] | 0 | [6] |
Manufacturing Facility | Direct Cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Asset impairment charges | ' | ' | ' | ' | ' | ' | ' | ' | 17 | [1] | ' | ' | ||
Facility Closing | Direct Cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Employee termination costs | ' | ' | ' | ' | ' | ' | ' | ' | $2 | [1] | ' | ' | ||
[1] | The restructuring charges (benefits) for the year ended DecemberB 31, 2013 are primarily related to the following:b"When we were a business unit of Pfizer, we announced a restructuring plan related to our operations in Europe. In connection with these actions, we recorded a pre-tax charge of $27 million to recognize employee termination costs. As a result of becoming an independent public company (no longer being a majority-owned subsidiary of Pfizer) and related economic consideration, we revisited this restructuring action and decided to no longer implement this restructuring plan. As such, we reversed the existing reserve of $27 million in the second quarter of 2013. b"We recorded asset impairment charges related to one of our manufacturing facilities of $17 million.b"We recorded restructuring charges related to the exiting of certain leased manufacturing and research facilities and recorded employee termination expenses of $2 million, exit costs of $4 million, and accelerated depreciation of $5 million.The direct restructuring charges (benefits) are associated with the following: b"For the year ended DecemberB 31, 2013bbEuAfME ($4 million), CLAR ($4 million) and manufacturing/research/corporate ($3 million income). b"For the year ended DecemberB 31, 2012bEuAfME ($51 million), CLAR ($3 million), APAC ($1 million income) and manufacturing/research/corporate ($1 million income). b"For the year ended DecemberB 31, 2011bbU.S. ($2 million), EuAfME ($33 million), CLAR ($2 million), APAC ($2 million income) and manufacturing/research/corporate ($19 million). | |||||||||||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||||||||||
[3] | Additional depreciation associated with asset restructuring represents the impact of changes in the estimated lives of assets involved in restructuring actions. In 2013, included in Cost of sales ($1 million) and Selling, general and administrative expenses ($2 million). For 2012, included in Cost of sales ($10 million), Selling, general and administrative expenses ($5 million) and Research and development expenses ($9 million). For 2011, included in Cost of sales ($6 million), Selling, general and administrative expenses ($4 million) and Research and development expenses ($19 million). | |||||||||||||
[4] | 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, as well as product transfer costs. | |||||||||||||
[5] | Implementation costsballocated represent external, incremental costs directly related to implementing cost reduction/productivity initiatives, and primarily include expenditures related to system and process standardization and the expansion of shared services. Included in Selling, general and administrative expenses. | |||||||||||||
[6] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmU0ODZiN2M4NjFhMjQ2MjM4ZjJhMDY0MWI2ZGMxZjU0fFRleHRTZWxlY3Rpb246OTFDRUYwQUY3MDdFRkRCQjc4MURDMzhBQjRGQTU4NzMM} |
Restructuring_Charges_and_Othe3
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Direct restructuring charges) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||||||
Employee Termination Costs | Employee Termination Costs | Employee Termination Costs | Asset Impairments | Asset Impairments | Asset Impairments | Accelerated Depreciation | Accelerated Depreciation | Accelerated Depreciation | Exit Costs | Exit Costs | Exit Costs | Accrual | Accrual | Accrual | Other Current Liabilities | Other Current Liabilities | Other Noncurrent Liabilities | Other Noncurrent Liabilities | |||||||||||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Balance, December 31, | $68 | [1] | $70 | $90 | $0 | [1] | $0 | $0 | $0 | [1] | $0 | $0 | $6 | [1] | $11 | $11 | $74 | [1] | $81 | $101 | ' | ' | ' | ' | |||||||
Provision/(Benefit) | -23 | 49 | 53 | 19 | 4 | ' | 5 | ' | ' | 4 | -1 | 1 | 5 | 52 | 54 | ' | ' | ' | ' | ||||||||||||
Utilization and other(a) | -16 | [2] | -51 | [2] | -73 | [2] | ' | -4 | [2] | ' | ' | ' | ' | -4 | [2] | -4 | [2] | -1 | [2] | -20 | [2] | -59 | [2] | -74 | [2] | ' | ' | ' | ' | ||
Non-Cash Activity | ' | ' | ' | -19 | ' | ' | -5 | ' | ' | ' | ' | ' | -24 | ' | ' | ' | ' | ' | ' | ||||||||||||
Separation adjustment(c) | -14 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -14 | [1] | ' | ' | ' | ' | ' | ' | ||||||||||
Balance, December 31, | 15 | [1] | 68 | [1] | 70 | 0 | [1] | 0 | [1] | 0 | 0 | [1] | 0 | 0 | 6 | [1] | 6 | [1] | 11 | 21 | [1] | 74 | [1] | 81 | ' | ' | ' | ' | |||
Restructuring Reserve, Current | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13 | 63 | ' | ' | ||||||||||||
Restructuring Reserve, Noncurrent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8 | $11 | ||||||||||||
[1] | See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offerb Adjustments Associated with the Separation. | ||||||||||||||||||||||||||||||
[2] | At DecemberB 31, 2013 and 2012, included in Other current liabilities ($13 million and $63 million, respectively) and Other noncurrent liabilities ($8 million and $11 million, respectively) |
Other_IncomeDeductions_Net_Oth1
Other (Income)/Deductions - Net Other (Income)/Deductions - Net (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Other Income Deductions | ' | ' | ' | |||
Royalty-related income | ($23) | ($32) | ($26) | |||
Identifiable intangible asset impairment charges(a) | 1 | [1] | 5 | [1] | 69 | [1] |
Net gain on sale of assets(b) | -6 | [2] | 0 | [2] | 0 | [2] |
Gain (Loss) Related to Litigation Settlement | 1 | [3] | -19 | [3] | 0 | [3] |
Foreign currency (gain)/loss(d) | 20 | [4] | 0 | [4] | -1 | [4] |
Other, net | -2 | 0 | 6 | |||
Other (income)/deductionsbnet | -9 | -46 | 48 | |||
Other Increase (Decrease) in Environmental Liabilities | ' | 7 | ' | |||
Developed Technology Rights | ' | ' | ' | |||
Other Income Deductions | ' | ' | ' | |||
Identifiable intangible asset impairment charges(a) | ' | 2 | ' | |||
Patented Technology | ' | ' | ' | |||
Other Income Deductions | ' | ' | ' | |||
Identifiable intangible asset impairment charges(a) | ' | 1 | ' | |||
Patented Technology | ' | ' | ' | |||
Other Income Deductions | ' | ' | ' | |||
Identifiable intangible asset impairment charges(a) | ' | 2 | 30 | |||
Technology-Based Intangible Assets | ' | ' | ' | |||
Other Income Deductions | ' | ' | ' | |||
Identifiable intangible asset impairment charges(a) | ' | ' | 12 | |||
Genetic Testing Services | ' | ' | ' | |||
Other Income Deductions | ' | ' | ' | |||
Identifiable intangible asset impairment charges(a) | ' | ' | 10 | |||
Intellectual Property | ' | ' | ' | |||
Other Income Deductions | ' | ' | ' | |||
Gain (Loss) Related to Litigation Settlement | ' | -14 | ' | |||
Other Litigation | ' | ' | ' | |||
Other Income Deductions | ' | ' | ' | |||
Gain (Loss) Related to Litigation Settlement | ' | 2 | ' | |||
VENEZUELA | ' | ' | ' | |||
Other Income Deductions | ' | ' | ' | |||
Foreign currency (gain)/loss(d) | 9 | [4] | ' | ' | ||
In Process Research and Development | ' | ' | ' | |||
Other Income Deductions | ' | ' | ' | |||
Identifiable intangible asset impairment charges(a) | ' | ' | $17 | |||
[1] | In 2012, the intangible asset impairment charges include (i) approximately $2 million of finite-lived companion animal developed technology rights; (ii) approximately $1 million of finite-lived trademarks related to genetic testing services; and (iii) approximately $2 million of finite-lived patents related to poultry technology. The asset impairment charges for 2012 reflect, among other things, loss of revenue as a result of negative market conditions and, with respect to the poultry technology, a re-assessment of economic viability. In 2011, the asset impairment charges include (i) approximately $30 million of finite-lived intangible assets related to parasiticides technology as a result of declining gross margins and increased competition; (ii) approximately $12 million of finite-lived intangible assets related to equine influenza and tetanus technology due to third-party supply issues; (iii) approximately $10 million of finite-lived intangible assets related to genetic testing services that did not find consumer acceptance; and (iv) approximately $17 million related to IPR&D projects (acquired from Vetnex in 2010 and from FDAH in 2009), as a result of the termination of the development programs due to a re-assessment of economic viability. | |||||
[2] | For 2013, represents the net gain on the government-mandated sale of certain product rights in Brazil that were acquired with the FDAH acquisition in 2009. | |||||
[3] | For 2012, represents income from a favorable legal settlement related to an intellectual property matter ($14 million) and a change in estimate for an environmental-related reserve due to a favorable settlement ($7 million income) partially offset by litigation-related charges ($2 million). | |||||
[4] | For 2013, includes a foreign currency loss of $9 million incurred in the first quarter of 2013 related to the Venezuela currency devaluation in February 2013 and other foreign currency losses in the fourth quarter of 2013 primarily related to Argentina. |
Income_Taxes_Taxes_on_Income_D
Income Taxes (Taxes on Income) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jul. 01, 2012 | Apr. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||||||||
Taxes on income [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | $126 | $185 | $187 | $192 | $74 | $213 | $252 | $171 | $690 | [1],[2],[3] | $710 | [1],[2],[3] | $394 | [1],[2],[3],[4] | ||||||||
Income Tax Expense Benefit Domestic Continuing Operations | ' | ' | ' | ' | ' | ' | ' | ' | 87 | 141 | -26 | |||||||||||
Foreign Income Tax Expense (Benefit), Continuing Operations | ' | ' | ' | ' | ' | ' | ' | ' | 100 | 133 | 172 | |||||||||||
Income Tax Expense (Benefit) | 22 | [5] | 54 | [5] | 59 | [5] | 52 | [5] | 84 | [5] | 52 | [5] | 79 | [5] | 59 | [5] | 187 | [1],[3],[6] | 274 | [1],[3],[6] | 146 | [1],[3],[4],[6] |
Deferred Income Tax Liability On Undistributed Earnings Not Reinvested Amount | 3 | ' | ' | ' | 9 | ' | ' | ' | 3 | 9 | 9 | |||||||||||
Valuation Allowance, Deferred Tax Asset, Change in Amount | ' | ' | ' | ' | ' | ' | ' | ' | 25 | ' | ' | |||||||||||
U.S. statutory income tax rate | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% | 35.00% | 35.00% | |||||||||||
State and local taxes, net of federal benefits | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | 1.70% | -0.20% | |||||||||||
Taxation of non-U.S. operations(a)(b)(c) | ' | ' | ' | ' | ' | ' | ' | ' | -6.70% | [7],[8],[9] | 5.60% | [7],[8],[9] | 2.70% | [7],[8],[9] | ||||||||
Unrecognized tax benefits and tax settlements and resolution of certain tax positions(d) | ' | ' | ' | ' | ' | ' | ' | ' | 1.10% | [10] | -4.10% | [10] | -2.40% | [10] | ||||||||
U.S. healthcare legislation(e) | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | [11] | -0.40% | [11] | 0.30% | [11] | ||||||||
U.S. Research and Development Tax Credit and U.S. Domestic Production Activities deduction(f) | ' | ' | ' | ' | ' | ' | ' | ' | -1.20% | [12] | -0.30% | [12] | -2.30% | [12] | ||||||||
Non-deductible / non-taxable items(g) | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | [13] | 0.80% | [13] | 2.10% | [13] | ||||||||
All otherbnet | ' | ' | ' | ' | ' | ' | ' | ' | -2.60% | 0.30% | 1.90% | |||||||||||
Effective tax rate | ' | ' | ' | ' | ' | ' | ' | ' | 27.10% | 38.60% | 37.10% | |||||||||||
Internal Revenue Service (IRS) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Taxes on income [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29.3 | 9.5 | |||||||||||
Various Foreign Country Tax Authorities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Taxes on income [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.7 | ' | |||||||||||
United States (U.S.) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Taxes on income [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | ' | ' | ' | ' | ' | ' | ' | ' | 238 | 340 | -239 | |||||||||||
Current Federal Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 63 | 132 | -3 | |||||||||||
Current State and Local Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 12 | 5 | -1 | |||||||||||
Deferred Federal Income Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 10 | -7 | -19 | |||||||||||
Deferred State and Local Income Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 11 | -3 | |||||||||||
International | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Taxes on income [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | ' | ' | ' | ' | ' | ' | ' | ' | 452 | 370 | 633 | |||||||||||
Current Foreign Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 89 | 211 | 85 | |||||||||||
Deferred Foreign Income Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | $11 | ($78) | $87 | |||||||||||
[1] | In 2012, the Provision for taxes on income reflects the following:b"U.S. tax benefits of approximately $29.3 million, representing tax and interest, resulting from a multi-year settlement with the U.S. Internal Revenue Service with respect to audits for the years 2006 through 2008, and international tax benefits of approximately $2.7 million, representing tax and interest, resulting from the resolution of certain tax positions pertaining to prior years with various foreign tax authorities and from the expiration of certain statutes of limitations;b"U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes);b"The expiration of the U.S. Research and Development Tax Credit on December 31, 2011; andb"Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | |||||||||||||||||||||
[2] | Defined as income before provision for taxes on income. | |||||||||||||||||||||
[3] | In 2013, the Provision for taxes on income reflects the following:b"U.S. tax expense of approximately $3 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes);b"U.S. tax benefit related to U.S. Research and Development Tax Credit which was retroactively extended on January 3, 2013, and the U.S. Domestic Production Activities deduction;b"Tax expense of approximately $25 million related to the establishment of valuation allowance; and b"Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | |||||||||||||||||||||
[4] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||||||||||||||||||
[5] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmU0ODZiN2M4NjFhMjQ2MjM4ZjJhMDY0MWI2ZGMxZjU0fFRleHRTZWxlY3Rpb246RkFERTU4NDYyMURFOTFBNjFFMENGRkQ4NUFBNDI1ODcM} | |||||||||||||||||||||
[6] | In 2011, the Provision for taxes on income reflects the following:b"U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside of the United States that will not be indefinitely reinvested overseas; and b"U.S. tax benefits of approximately $9.5 million, representing tax and interest, resulting from the tax benefit recorded in connection with the settlement of certain audits with the U.S. Internal Revenue Service. | |||||||||||||||||||||
[7] | The rate impact of taxation of non-U.S. operations was a decrease to our effective tax rate in 2013 due to (i) the jurisdictional mix of earnings as tax rates outside of the United States are generally lower than the U.S. statutory income tax rate; and (ii) incentive tax rulings in Belgium effective December 1, 2012 and in Singapore effective October 29, 2012. The rate impact of taxation of non-U.S. operations was an increase to our effective tax rate in 2012 and 2011 due to (i) the cost of repatriation decisions and other U.S. tax implications that more than offset the impact of the generally lower tax rates outside of the United States; (ii) the tax impact of non-deductible items in those jurisdictions; and (iii) the tax impact of changes in uncertain tax positions related to our non-U.S. operations. | |||||||||||||||||||||
[8] | In 2013, the impact to the rate due to increases in uncertain tax positions was more than offset by the jurisdictional mix of earnings and other U.S. tax implications of our foreign operations described in the above footnotes. The increase in the rate in 2012 as compared to 2011 is primarily due to increases in uncertain tax positions (see D. Tax Contingencies, for current and prior period increases to uncertain tax positions), of which a significant portion relates to our non-U.S. operations. | |||||||||||||||||||||
[9] | For taxation of non-U.S. operations, this rate impact reflects the income tax rates and relative earnings in the locations where we do business outside of the United States, together with the cost of repatriation decisions, as well as changes in uncertain tax positions not included in the reconciling item called bUnrecognized tax benefits and tax settlements and resolution of certain tax positionsb: (i) the jurisdictional mix of earnings is a component of our effective tax rate each year as tax rates outside of the U.S. are generally lower than the U.S. statutory income tax rate. The rate impact of the jurisdictional mix of earnings is influenced by the specific location of non-U.S. earnings and the level of such earnings as compared to our total earnings. This rate impact is then offset or more than offset by the cost of repatriation decisions and other U.S. tax implications of our foreign operations, which may significantly impact the taxation of non-U.S. operations; and (ii) the impact of changes in uncertain tax positions not included in the reconciling item called bUnrecognized tax benefits and tax settlements and resolution of certain tax positionsb is a component of our effective tax rate each year that can result in either an increase or decrease to our effective tax rate. The jurisdictional mix of earnings, which includes the impact of the location of earnings as well as repatriation costs, can vary as a result of the 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, asset impairments and gains and losses on asset divestitures. | |||||||||||||||||||||
[10] | For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see A. Taxes on Income and D. Tax Contingencies. | |||||||||||||||||||||
[11] | The decrease in the rate in 2012 primarily relates to the tax benefit recorded in connection with the establishment of deferred income tax assets related to the Medicare Part D subsidy for retiree prescription drug coverage. | |||||||||||||||||||||
[12] | In 2013, the decrease in the rate was due to the benefit associated with the U.S. Research and Development Tax Credit. In 2012, no benefit from the U.S. Research and Development Tax Credit was reflected as the credit expired on December 31, 2011 and was not extended until January 2013. In all years, we received a benefit from the U.S. Domestic Production Activities deduction. | |||||||||||||||||||||
[13] | Non-deductible items include meals and entertainment expenses. |
Income_Taxes_Deferred_Taxes_De
Income Taxes (Deferred Taxes) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
Taxes on income [Line Items] | ' | ' | ||
Deferred Tax Asset Temporary Differences Prepaid Deferred Items | $59,000,000 | $69,000,000 | ||
Deferred Tax Assets, Inventory | 29,000,000 | 9,000,000 | ||
Deferred Tax Liabilities, Intangible Assets | -111,000,000 | -187,000,000 | ||
Deferred Tax Liabilities, Property, Plant and Equipment | -92,000,000 | -61,000,000 | ||
Deferred Tax Assets Temporary Differences Employee Benefits | 11,000,000 | 54,000,000 | ||
Deferred Tax Assets Temporary Differences Tax Deferred Expense Reserves And Accruals Restructuring Charges And Other Charges | 4,000,000 | 27,000,000 | ||
Deferred Tax Assets Temporary Differences Tax Deferred Expense Reserves And Accruals Legal And Product Liability | 13,000,000 | 20,000,000 | ||
Deferred Tax Assets Temporary Differences Operating Loss Carryforwards And Deferred Tax Assets Tax Credit Carryforwards | 30,000,000 | 219,000,000 | ||
Deferred Tax Liabilities, Undistributed Foreign Earnings | -3,000,000 | -86,000,000 | ||
Deferred Tax Liabilities, Other | -10,000,000 | -3,000,000 | ||
Deferred Tax Liability, Before Valuation Allowance, Net Of Deferred Tax Asset | -70,000,000 | ' | ||
Deferred Tax Asset, Before Valuation Allowance, Net of Deferred Tax Liability | ' | 61,000,000 | ||
Deferred Tax Assets, Valuation Allowance | -107,000,000 | -69,000,000 | ||
Net deferred income tax liability | -177,000,000 | -8,000,000 | ||
Current deferred tax assets | 97,000,000 | [1] | 101,000,000 | [1] |
Noncurrent deferred tax assets | 63,000,000 | [1] | 216,000,000 | [1] |
Undistributed Earnings of Foreign Subsidiaries | 1,200,000,000 | ' | ||
Deferred Tax Liabiilty, Noncurrent | ' | ' | ||
Taxes on income [Line Items] | ' | ' | ||
Noncurrent deferred tax liabilities | 322,000,000 | 323,000,000 | ||
Deferred Tax Assets, Current | ' | ' | ||
Taxes on income [Line Items] | ' | ' | ||
Current deferred tax assets | 97,000,000 | 101,000,000 | ||
Noncurrent Deferred Tax Assets | ' | ' | ||
Taxes on income [Line Items] | ' | ' | ||
Noncurrent deferred tax assets | 63,000,000 | 216,000,000 | ||
Other Current Liabilities | ' | ' | ||
Taxes on income [Line Items] | ' | ' | ||
Other current deferred liabilities | $15,000,000 | $2,000,000 | ||
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
Income_Taxes_Tax_Contingencies
Income Taxes (Tax Contingencies) (Details) (USD $) | 12 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |||
Income Tax Contingency [Line Items] | ' | ' | ' | ' | |||
Unrecognized Tax Benefits Net Liabilities | $44 | $112 | ' | ' | |||
Unrecognized tax benefits | -45 | [1] | -144 | [1] | -114 | [1] | -93 |
Unrecognized Tax Benefits, Adjustments Associated With The Separation | 115 | [2] | 0 | [2] | 0 | [2] | ' |
Unrecognized Tax Benefits, Increase Resulting from Acquisition | 0 | [3] | 0 | [3] | -19 | [3] | ' |
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions | -2 | [4] | -2 | [4] | 0 | [4] | ' |
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | 0 | [4],[5] | 40 | [4],[5] | 1 | [4],[5] | ' |
Unrecognized Tax Benefits Decreases Resulting From Prior Period Cash Period | 1 | 3 | 7 | ' | |||
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions | -16 | [4] | -73 | [4] | -10 | [4] | ' |
Unrecognized Tax Benefits, Decrease Resulting from Current Period Tax Positions | 0 | 0 | 0 | ' | |||
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | 1 | 2 | 0 | ' | |||
Unrecognized tax benefits, exclusive of interest related to unrecognized tax benefits | 3 | 1 | ' | ' | |||
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | 11 | 17 | ' | ' | |||
Other Noncurrent Assets | ' | ' | ' | ' | |||
Income Tax Contingency [Line Items] | ' | ' | ' | ' | |||
Unrecognized Tax Benefits Assets | 1 | 32 | ' | ' | |||
Noncurrent Deferred Tax Assets | ' | ' | ' | ' | |||
Income Tax Contingency [Line Items] | ' | ' | ' | ' | |||
Unrecognized tax benefits | -6 | -6 | ' | ' | |||
Other Taxes Payable | ' | ' | ' | ' | |||
Income Tax Contingency [Line Items] | ' | ' | ' | ' | |||
Unrecognized tax benefits | ($39) | ($138) | ' | ' | |||
[1] | In 2013, included in Noncurrent deferred tax assets ($6 million) and Other taxes payable ($39 million). In 2012, included in Noncurrent deferred tax assets ($6 million) and Other taxes payable ($138 million). | ||||||
[2] | The significant decrease in the total gross unrecognized tax benefits from December 31, 2012 to December 31, 2013 is primarily attributable to the elimination of net tax liabilities associated with uncertain tax positions that were retained by Pfizer. See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offerb Adjustments Associated with the Separation. | ||||||
[3] | The amount in 2011 primarily relates to the acquisition of KAH. | ||||||
[4] | Primarily included in Provision for taxes on income. | ||||||
[5] | In all years, the decreases are primarily a result of effectively settling certain issues with the U.S. and non-U.S. tax authorities. See A. Tax MattersbTaxes on Income. |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income/(Loss) Accumulated Other Comprehensive Income/(Loss) (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ' | |||
Balance, December 31, 2012 | ($157) | [1] | ($65) | ($74) | ||
Other comprehensive loss, net of tax | -56 | -92 | 9 | [2] | ||
Separation adjustments(a) | -6 | [3] | ' | ' | ||
Balance, December 31, 2013 | -219 | [1] | -157 | [1] | -65 | |
Currency Translation Adjustment Net Unrealized Gain/(Losses) | ' | ' | ' | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ' | |||
Balance, December 31, 2012 | -152 | -59 | -63 | |||
Other comprehensive loss, net of tax | -54 | -93 | 4 | |||
Separation adjustments(a) | -6 | [3] | ' | ' | ||
Balance, December 31, 2013 | -212 | -152 | -59 | |||
Benefit Plans Actuarial Gains/(Losses) | ' | ' | ' | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ' | |||
Balance, December 31, 2012 | -5 | -6 | -11 | |||
Other comprehensive loss, net of tax | -2 | 1 | 5 | |||
Separation adjustments(a) | 0 | [3] | ' | ' | ||
Balance, December 31, 2013 | ($7) | ($5) | ($6) | |||
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. | |||||
[2] | Includes impacts from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||
[3] | (a) See Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offerb Adjustments Associated with the Separation. |
Financial_Instruments_Credit_F
Financial Instruments (Credit Facility) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Line of Credit Facility [Line Items] | ' | ' |
Line of credit facility, maximum borrowing capacity | $69,000,000 | ' |
Short-term Bank Loans and Notes Payable | 15,000,000 | ' |
Revolving credit facility, minimum interest coverage ratio | ' | 3.5 |
Line of Credit Facility, Amount Outstanding | 0 | ' |
Long-term Line of Credit | 2,000,000 | ' |
Revolving Credit Facility | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Revolving credit facility, term | ' | '5 years |
Revolving credit facility, current borrowing capacity | ' | 1,000,000,000 |
Line of credit facility, maximum borrowing capacity | ' | 1,500,000,000 |
Revolving credit facility, covenant compliance ratio, 2013 | ' | 4.35 |
Revolving credit facility, covenant compliance ratio, 2014 | ' | 3.95 |
Revolving credit facility, covenant compliance ratio, 2015 | ' | 3.5 |
Revolving credit facility, covenant compliance ratio, 2016 and thereafter | ' | 3 |
Financial_Instruments_Commerci
Financial Instruments (Commercial Paper) (Details) (USD $) | Dec. 31, 2013 | Feb. 28, 2013 |
Commercial Paper | ||
Short-term Debt [Line Items] | ' | ' |
Capacity of commercial paper program | ' | $1,000,000,000 |
Commercial Paper | $0 | ' |
Financial_Instruments_ShortTer
Financial Instruments (Short-Term Borrowings) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Financial Instruments [Abstract] | ' | ' | ||
Short-term Bank Loans and Notes Payable | $15 | ' | ||
Short-term borrowings, carried at historical proceeds, as adjusted | $15 | [1] | $73 | [1] |
Short-term debt, weighted-average effective interest rate | 5.70% | 3.70% | ||
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
Financial_Instruments_Senior_N
Financial Instruments (Senior Notes Offering) (Details) (USD $) | Dec. 31, 2013 | Jan. 28, 2013 |
In Millions, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Debt, principal amount | $3,652 | ' |
Senior Notes | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, principal amount | ' | 3,650 |
Debt, unamortized discount | ' | 10 |
Debt, purchase price percent due to downgrade of investment grade | ' | 101.00% |
Senior Notes | Initial Purchasers | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, principal amount | ' | 2,650 |
Senior Notes | Pfizer Transfer | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, principal amount | ' | 1,000 |
Senior Notes | Senior Notes 1.150% due 2016 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, principal amount | 400 | 400 |
Debt, stated interest rate | ' | 1.15% |
Senior Notes | Senior Notes 1.875% due 2018 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, principal amount | 750 | 750 |
Debt, stated interest rate | ' | 1.88% |
Senior Notes | Senior Notes 3.250% due 2023 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, principal amount | 1,350 | 1,350 |
Debt, stated interest rate | ' | 3.25% |
Senior Notes | Senior Notes 4.700% due 2043 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, principal amount | $1,150 | $1,150 |
Debt, stated interest rate | ' | 4.70% |
Financial_Instruments_Schedule
Financial Instruments (Schedule of Long-term Debt) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jan. 28, 2013 | Dec. 31, 2013 | Jan. 28, 2013 | Dec. 31, 2013 | Jan. 28, 2013 | Dec. 31, 2013 | Jan. 28, 2013 | Dec. 31, 2013 | Jan. 28, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | Allocated Long-term Debt | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | Prior to Initial Public Offering | ||||
Senior Notes 1.150% due 2016 | Senior Notes 1.150% due 2016 | Senior Notes 1.875% due 2018 | Senior Notes 1.875% due 2018 | Senior Notes 3.250% due 2023 | Senior Notes 3.250% due 2023 | Senior Notes 4.700% due 2043 | Senior Notes 4.700% due 2043 | Allocated Long-term Debt | Senior Notes | Senior Notes | Senior Notes | Senior Notes | ||||||||
Senior Notes 1.150% due 2016 | Senior Notes 1.875% due 2018 | Senior Notes 3.250% due 2023 | Senior Notes 4.700% due 2043 | |||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total long-term debt | $3,652 | ' | $0 | $3,650 | $400 | $400 | $750 | $750 | $1,350 | $1,350 | $1,150 | $1,150 | $509 | $509 | $0 | $0 | $0 | $0 | ||
Long-term Line of Credit, Noncurrent | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Unamortized debt discount | -10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ||
Long-term debt / Allocated long-term debt | $3,642 | [1] | $0 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $509 | ' | ' | ' | ' | ' |
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
Financial_Instruments_Fair_Val
Financial Instruments (Fair Value of Debt) (Details) (Fair Value, Inputs, Level 2, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | Senior Notes | Allocated Long-term Debt |
Debt Instrument [Line Items] | ' | ' |
Fair value, debt instrument | $3,526 | $732 |
Financial_Instruments_Longterm
Financial Instruments (Long-term Debt Maturity) (Details) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Financial Instruments [Abstract] | ' |
2014 | $0 |
2015 | 0 |
2016 | 401 |
2017 | 1 |
2018 | 750 |
After 2018 | 2,500 |
Total long-term debt | $3,652 |
Financial_Instruments_Interest
Financial Instruments Interest Expense (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Debt Disclosure [Abstract] | ' | ' | ' | |
Interest Expense | $113 | $31 | $36 | [1] |
Interest Costs Capitalized | $3 | ' | ' | |
[1] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. |
Financial_Instruments_Foreign_
Financial Instruments Foreign Exchange Risk (Details) (Foreign Exchange Contract, USD $) | 12 Months Ended |
In Billions, unless otherwise specified | Dec. 31, 2013 |
Foreign Exchange Contract | ' |
Derivative [Line Items] | ' |
Derivative, Notional Amount | 1.4 |
Majority | Foreign Exchange Contract | ' |
Derivative [Line Items] | ' |
Derivative, Term of Contract | '60 days |
Maximum [Member] | Foreign Exchange Contract | ' |
Derivative [Line Items] | ' |
Derivative, Term of Contract | '180 days |
Financial_Instruments_Fair_Val1
Financial Instruments (Fair Value of Derivative Instruments) (Details) (Foreign Exchange Forward, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Derivatives, Fair Value [Line Items] | ' |
Gain (loss) on derivative contracts not designated as hedging instruments | $27 |
Not Designated as Hedging Instrument | ' |
Derivatives, Fair Value [Line Items] | ' |
Total foreign currency forward-exchange contracts | 5 |
Not Designated as Hedging Instrument | Other Current Assets | ' |
Derivatives, Fair Value [Line Items] | ' |
Foreign currency forward-exchange contracts | 10 |
Not Designated as Hedging Instrument | Other Current Liabilities | ' |
Derivatives, Fair Value [Line Items] | ' |
Foreign currency forward-exchange contracts | ($5) |
Inventories_Inventories_Detail
Inventories Inventories (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Inventory Disclosure [Abstract] | ' | ' | ||
Finished goods | $862 | $799 | ||
Work-in-process | 218 | 332 | ||
Raw materials and supplies | 213 | 214 | ||
Inventories | $1,293 | [1] | $1,345 | [1] |
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
Property_Plant_and_Equipment_P2
Property, Plant and Equipment Property, Plant and Equipment (Details) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ||
Land | $36 | $35 | ' | ||
Buildings | 883 | 860 | ' | ||
Machinery and equipment | 1,062 | 1,071 | ' | ||
Furniture, fixtures and other | 143 | 127 | ' | ||
Construction-in-progress | 199 | 159 | ' | ||
Property, Plant and Equipment, Gross | 2,323 | 2,252 | ' | ||
Accumulated depreciation | 1,028 | 1,011 | ' | ||
Property, Plant and Equipment, Net | 1,295 | [1] | 1,241 | [1] | ' |
Depreciation | $146 | $133 | $135 | ||
Building | Maximum [Member] | ' | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ||
Property, Plant and Equipment, Useful Life | '50 years | ' | ' | ||
Machinery and Equipment | Minimum | ' | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ||
Property, Plant and Equipment, Useful Life | '8 years | ' | ' | ||
Machinery and Equipment | Maximum [Member] | ' | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ||
Property, Plant and Equipment, Useful Life | '20 years | ' | ' | ||
Furniture and Fixtures | Minimum | ' | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ||
Property, Plant and Equipment, Useful Life | '3 years | ' | ' | ||
Furniture and Fixtures | Maximum [Member] | ' | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ||
Property, Plant and Equipment, Useful Life | '33 years 3 months 18 days | ' | ' | ||
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Goodwill) (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Goodwill [Roll Forward] | ' | ' | ||
Balance, December 31, 2012 | $985 | [1] | $989 | |
Other(a) | -3 | [2] | -4 | [2] |
Balance, December 31, 2013 | 982 | [1] | 985 | [1] |
United States (U.S.) | ' | ' | ||
Goodwill [Roll Forward] | ' | ' | ||
Balance, December 31, 2012 | 502 | 504 | ||
Other(a) | -1 | [2] | -2 | [2] |
Balance, December 31, 2013 | 501 | 502 | ||
Europe, Africa, and Middle East (EuAfME) | ' | ' | ||
Goodwill [Roll Forward] | ' | ' | ||
Balance, December 31, 2012 | 157 | 157 | ||
Other(a) | 0 | [2] | 0 | [2] |
Balance, December 31, 2013 | 157 | 157 | ||
Canada and Latin America (CLAR) | ' | ' | ||
Goodwill [Roll Forward] | ' | ' | ||
Balance, December 31, 2012 | 163 | 164 | ||
Other(a) | -1 | [2] | -1 | [2] |
Balance, December 31, 2013 | 162 | 163 | ||
Asia Pacific (APAC) | ' | ' | ||
Goodwill [Roll Forward] | ' | ' | ||
Balance, December 31, 2012 | 163 | 164 | ||
Other(a) | -1 | [2] | -1 | [2] |
Balance, December 31, 2013 | $162 | $163 | ||
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. | |||
[2] | Primarily reflects adjustments for foreign currency translation. |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Finite-lived and Indefinite-lived Intangible Assets) (Details) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' | ||
Finite-Lived Intangible Asset, Useful Life | '12 years | ' | ' | ||
Amortization of Intangible Assets | $63 | $67 | $70 | ||
Finite-lived intangible assets, Gross Carrying Amount | 1,158 | 1,154 | ' | ||
Finite-lived intangible assets, Accumulated Amortization | -473 | -412 | ' | ||
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization | 685 | 742 | ' | ||
Total indefinite-lived intangible assets | 118 | 126 | ' | ||
Intangible Assets, Gross Carrying Amount | 1,276 | 1,280 | ' | ||
Identifiable Intangible Assets, Less Accumulated Amortization | 803 | [1] | 868 | [1] | ' |
Finite-Lived Intangible Assets, Amortization Expense, Year One | 63 | ' | ' | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 62 | ' | ' | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 62 | ' | ' | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 62 | ' | ' | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 59 | ' | ' | ||
Brands | ' | ' | ' | ||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' | ||
Total indefinite-lived intangible assets | 39 | 39 | ' | ||
Trademarks and Trade Names | ' | ' | ' | ||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' | ||
Total indefinite-lived intangible assets | 67 | 67 | ' | ||
In Process Research and Development | ' | ' | ' | ||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' | ||
Total indefinite-lived intangible assets | 12 | 20 | ' | ||
Developed Technology Rights | ' | ' | ' | ||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' | ||
Finite-lived intangible assets, Gross Carrying Amount | 762 | 762 | ' | ||
Finite-lived intangible assets, Accumulated Amortization | -219 | -173 | ' | ||
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization | 543 | 589 | ' | ||
Brands | ' | ' | ' | ||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' | ||
Finite-lived intangible assets, Gross Carrying Amount | 216 | 216 | ' | ||
Finite-lived intangible assets, Accumulated Amortization | -100 | -88 | ' | ||
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization | 116 | 128 | ' | ||
Trademarks and Trade Names | ' | ' | ' | ||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' | ||
Finite-lived intangible assets, Gross Carrying Amount | 59 | 54 | ' | ||
Finite-lived intangible assets, Accumulated Amortization | -38 | -36 | ' | ||
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization | 21 | 18 | ' | ||
Other Intangible Assets | ' | ' | ' | ||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' | ||
Finite-lived intangible assets, Gross Carrying Amount | 121 | 122 | ' | ||
Finite-lived intangible assets, Accumulated Amortization | -116 | -115 | ' | ||
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization | $5 | $7 | ' | ||
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
Gross goodwill | $1,518 | $1,521 |
Accumulated goodwill impairment losses | $536 | $536 |
Benefit_Plans_Schedule_of_Assu
Benefit Plans Schedule of Assumptions Used (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Weighted average assumptions used to determine benefit obligations: [Abstract] | ' | ' | ' |
Discount rate | 5.00% | 4.60% | 5.80% |
Rate of compensation increase | 4.40% | 5.30% | 2.70% |
Weighted average assumptions used to determine net benefit cost for the year ended December 31: | ' | ' | ' |
Discount rate | 4.60% | 5.80% | 5.10% |
Expected return on plan assets | 4.50% | 3.60% | 3.60% |
Rate of compensation increase | 5.30% | 2.70% | 2.70% |
Benefit_Plans_Changes_in_Proje
Benefit Plans Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan (Details) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Benefit Plans [Abstract] | ' | ' | ' | ||
Defined Benefit Plan, Benefit Obligation | $73 | $39 | $37 | ||
Benefit Obligation, Separation Adjustments | 28 | [1] | 0 | [1] | ' |
Defined Benefit Plan, Actuarial Gain (Loss) | -2 | 2 | ' | ||
Defined Benefit Plan, Foreign Currency Exchange Rate Gain (Loss) | 2 | -1 | ' | ||
Defined Benefit Plan, Other Changes | 6 | 1 | ' | ||
Defined Benefit Plan, Fair Value of Plan Assets | 45 | [2] | 35 | [2] | 33 |
Plan Assets, Separation Adjustments | 7 | [1] | 0 | [1] | ' |
Defined Benefit Plan, Actual Return on Plan Assets | 0 | 2 | ' | ||
Defined Benefit Plan, Contributions by Employer | 0 | 2 | ' | ||
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Plan Assets | 2 | -1 | ' | ||
Defined Benefit Plan, Other Costs | 1 | -1 | ' | ||
Defined Benefit Plan, Funded Status of Plan | -28 | [3] | -4 | [3] | ' |
Net Obligation, Separation Adjustment, Transferred from Parent | $21 | ' | ' | ||
[1] | Represents the benefit obligations and plan assets (net obligation of approximately $21 million) transferred to us in 2013 from Pfizer as part of the Separation, as described above. | ||||
[2] | Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 4. Significant Accounting PoliciesbFair Value). All investment plan assets are valued using Level 1 or Level 2 inputs. | ||||
[3] | Included in Other noncurrent liabilities. |
Benefit_Plans_Schedule_of_Bene
Benefit Plans Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Benefit Plans [Abstract] | ' | ' |
Defined Benefit Plan, Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets, Aggregate Fair Value of Plan Assets | $37 | $35 |
Defined Benefit Plan, Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets, Aggregate Accumulated Benefit Obligation | 58 | 38 |
Defined Benefit Plan, Plans with Benefit Obligations in Excess of Plan Assets, Aggregate Fair Value of Plan Assets | 42 | 35 |
Defined Benefit Plan, Plans with Benefit Obligations in Excess of Plan Assets, Aggregate Benefit Obligation | $70 | $39 |
Benefit_Plans_Schedule_of_Allo
Benefit Plans Schedule of Allocation of Plan Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
In Millions, unless otherwise specified | |||||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined Benefit Plan, Fair Value of Plan Assets | $45 | [1] | $35 | [1] | $33 |
Cash and Cash Equivalents | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 1 | ' | ||
Equity Securities | Commingled Equity Funds | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined Benefit Plan, Fair Value of Plan Assets | 7 | 5 | ' | ||
Debt Securities | Government Bonds | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined Benefit Plan, Fair Value of Plan Assets | 31 | 28 | ' | ||
Real Estate | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined Benefit Plan, Fair Value of Plan Assets | 2 | 1 | ' | ||
Other Pension Investments | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined Benefit Plan, Fair Value of Plan Assets | $5 | $0 | ' | ||
[1] | Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 4. Significant Accounting PoliciesbFair Value). All investment plan assets are valued using Level 1 or Level 2 inputs. |
Benefit_Plans_Schedule_Of_Perc
Benefit Plans Schedule Of Percentage Of Allocation Of Plan Assets Table (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined Benefit Plan Cash And Cash Equivalents | 0.00% | 1.80% |
Defined Benefit Plan Equity Securities Assets | 14.20% | 13.00% |
Defined Benefit Plan Debt Securities Assets | 70.10% | 79.50% |
Defined Benefit Plan Real Estate And Defined Benefit Plan Other Investments | 15.70% | 5.70% |
Defined Benefit Plan, Target Plan Asset Allocations | 100.00% | ' |
Defined Benefit Plan, Actual Plan Asset Allocations | 100.00% | 100.00% |
Cash and Cash Equivalents | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined Benefit Plan, Target Plan Asset Allocations Range Minimum | 0.00% | ' |
Defined Benefit Plan, Target Plan Asset Allocations Range Maximum | 20.00% | ' |
Equity Securities | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined Benefit Plan, Target Plan Asset Allocations Range Minimum | 0.00% | ' |
Defined Benefit Plan, Target Plan Asset Allocations Range Maximum | 20.00% | ' |
Debt Securities | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined Benefit Plan, Target Plan Asset Allocations Range Minimum | 65.00% | ' |
Defined Benefit Plan, Target Plan Asset Allocations Range Maximum | 80.00% | ' |
Other Pension Investments | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined Benefit Plan, Target Plan Asset Allocations Range Minimum | 0.00% | ' |
Defined Benefit Plan, Target Plan Asset Allocations Range Maximum | 20.00% | ' |
Benefit_Plans_Benefit_Plans_De
Benefit Plans Benefit Plans (Details) (USD $) | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | ||||
Netherlands Benefit Plans | Netherlands Benefit Plans | U.S. Plan | U.S. Plan | U.S. Plan | International Pension Plans [Member] | International Pension Plans [Member] | International Pension Plans [Member] | Foreign Pension Plans, Defined Benefit in Austria, France, Greece, Italy, Mexico, South Africa, Taiwan, Thailand, and Other | Foreign Pension Plans, Defined Benefit in the Netherlands, Germany, India, Korea, and Other | International Pension Plans in Other Locations | Foreign Pension Plans, Defined Benefit in the Netherlands | Multi-employer Plan | Multi-employer Plan | Multi-employer Plan | International Pension Plans Accounted for As Multi-employer Plans | Pfizer | Pfizer | |||||||
U.S. Plan | Supplemental Saving Plan | |||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Amount of Service Credit Continuation to be Funded, Percentage | ' | ' | ' | ' | ' | ' | 60.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Amount of Service Credit Continuation to be Funded by Related Party, Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40.00% | ' | |||
Defined Benefit Plan, Amount of Service Credit Continuation to be Funded | ' | ' | ' | ' | ' | ' | $38,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Amount of Service Credit Continuation to be Funded by Related Party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | |||
Employee benefit plan contribution from Pfizer Inc.(d) | 23,000,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Defined Benefit Plan, Amount of Service Credit Continuation, Payment Term | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Amount of Pension and Postretirement Benefit Expense for Certain US Employees | ' | ' | ' | ' | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Pension and Other Postretirement Benefit Expense | 15,000,000 | 61,000,000 | 64,000,000 | ' | ' | 4,000,000 | 17,000,000 | 17,000,000 | ' | ' | ' | ' | ' | ' | ' | 7,000,000 | 6,000,000 | 5,000,000 | ' | ' | ' | |||
Defined Benefit Plan, Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets, Aggregate Projected Benefit Obligation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,000,000 | ' | 21,000,000 | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Benefit Obligation | 73,000,000 | 39,000,000 | 37,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 73,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets, Aggregate Fair Value of Plan Assets | 37,000,000 | 35,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | |||
Dedicated Pension Plans, Settlement Charge for Contract Termination | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Net Periodic Benefit Cost | 4,000,000 | 2,000,000 | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Actuarial Gain (Loss) | -2,000,000 | [2] | 1,000,000 | [2] | 5,000,000 | [2],[3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Defined Benefit Plan, Future Amortization of Gain (Loss) | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Accumulated Other Comprehensive Income Net Gains (Losses), after Tax | 10,000,000 | 5,000,000 | ' | 4,000,000 | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Amortization Period For Defined Benefit Plan Gain Loss | ' | ' | ' | '12 years 4 months 24 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Contributions by Employer | 0 | 2,000,000 | ' | ' | ' | ' | ' | ' | 2,000,000 | 2,000,000 | 2,000,000 | ' | ' | ' | ' | 6,000,000 | 6,000,000 | 6,000,000 | 7,000,000 | ' | ' | |||
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | 39,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Expected Future Benefit Payments, Year Two | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Expected Future Benefit Payments, Five Fiscal Years Thereafter | ' | ' | ' | ' | ' | 14,000,000 | ' | ' | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Liabilities Transferred from Related Party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,000,000 | |||
Defined Benefit Plan, Cash Funding Transferred from Related Party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | |||
Defined Benefit Plan, Deferred Tax Asset Transferred from Related Party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Contribution Plan Minimum Annual Contributions Per Employee Percent | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Contribution Plan, Cost Recognized | 35,000,000 | 20,000,000 | 18,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Expected Future Benefit Payments, Year Three | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Expected Future Benefit Payments, Year Four | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Defined Benefit Plan, Expected Future Benefit Payments, Year Five | ' | ' | ' | ' | ' | $4,000,000 | ' | ' | $1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
[1] | 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. | |||||||||||||||||||||||
[2] | Presented net of reclassification adjustments and tax impacts, which are not significant 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 and combined statements of income. | |||||||||||||||||||||||
[3] | Includes impacts from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. |
Sharebased_Payments_Narrative_
Share-based Payments (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Sep. 29, 2013 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | ' | 25,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | ' | 20,728,313 |
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% |
Contractual term | ' | '10 years |
Award vesting period | ' | '3 years |
Restricted Stock Units (RSUs) | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Granted (in shares) | ' | 980,093 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | ' | $26.79 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | ' | 2,669 |
Award vesting period | ' | '3 years |
Deferred Stock Units (DSUs) | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Granted (in shares) | ' | 34,804 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | ' | $28.15 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | ' | 35,024 |
Pfizer Stock Benefit Plans | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Contractual term | ' | '3 years 0 months 0 days |
Other Equity-Based or Cash-Based Awards | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Maximum annual payment made to plan participant | ' | $10 |
Additional expense of accelerated vesting of the outstanding Pfizer stock options, and the settlement | 9 | ' |
Cash payment next quarter | $20 | ' |
Sharebased_Payments_Components
Share-based Payments (Components of share-based compensation expense) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Share-based compensation expensebdirect | $43 | $28 | $19 |
Share-based compensation expensebindirect | 0 | 5 | 6 |
Share-based compensation expensebtotal | 43 | 33 | 25 |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | -6 | -10 | -6 |
Allocated Share-based Compensation Expense, Net of Tax | 37 | 23 | 19 |
Stock Options | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Share-based compensation expensebdirect | 9 | 0 | 0 |
Restricted Stock Units (RSUs) | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Share-based compensation expensebdirect | 9 | 0 | 0 |
Pfizer Stock Benefit Plans | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Share-based compensation expensebdirect | $25 | $28 | $19 |
Sharebased_Payments_Stock_opti
Share-based Payments (Stock option valuation assumptions) (Details) | 12 Months Ended | |
Dec. 31, 2013 | ||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |
Expected dividend yield(a) | 1.00% | [1] |
Risk-free interest rate(b) | 1.30% | [2] |
Expected stock price volatility(c) | 28.21% | [3] |
Expected term(d) (years) | '6 years 6 months | [4] |
[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 implied volatility. | |
[4] | Determined using expected exercise and post-vesting termination patterns. |
Sharebased_Payments_Stock_opti1
Share-based Payments (Stock option activity) (Details) (USD $) | 12 Months Ended | |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | |
Shares | ' | |
Outstanding, December 31, 2012 (in shares) | 0 | |
Granted (in shares) | 2,994,295 | |
Exercised (in shares) | -6,419 | |
Forfeited (in shares) | -108,312 | |
Outstanding, June 30, 2013 (in shares) | 2,879,564 | |
Exercisable, December 31, 2013 | 22,388 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $26 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | '9 years 1 month 6 days | |
Weighted-average Exercise Price Per Share | ' | |
Outstanding, December 31, 2012 (in dollars per share) | $0 | |
Granted (in dollars per share) | $26.11 | |
Exercised (in dollars per share) | $26 | |
Forfeited (in dollars per share) | $26.01 | |
Outstanding, June 30, 2013 (in dollars per share) | $26.11 | |
Outstanding, Weighted-average Remaining Contractual Term | '9 years 1 month 6 days | |
Outstanding, Aggregate Intrinsic Value | $19 | [1] |
Vested and expected to vest, Aggregate Intrinsic Value | 0 | [1] |
Weighted-average grant date fair value per stock option | $7.05 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | 0 | |
Employee Service Share-based Compensation, Cash Received from Exercise of Stock Options | 0 | |
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options | 0 | |
Stock Options | ' | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | |
Unrecognized compensation costs | $11 | |
Unrecognized compensation costs, period for recognition | '2 years | |
[1] | Market price of underlying Zoetis common stock less exercise price. |
Sharebased_Payments_Nonvested_
Share-based Payments (Nonvested restricted stock activity) (Details) (Restricted Stock Units (RSUs), USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Restricted Stock Units (RSUs) | ' |
Shares | ' |
Nonvested, December 31, 2012 (in shares) | 0 |
Granted (in shares) | 980,093 |
Vested (in shares) | -2,669 |
Reinvested dividend equivalents (in shares) | $7,484 |
Forfeited (in shares) | -35,538 |
Nonvested, June 30, 2013 (in shares) | 949,370 |
Weighted Average Grant Date Fair Value Per Share | ' |
Nonvested, December 31, 2012 (in dollars per share) | $0 |
Granted (in dollars per share) | $26.79 |
Vested (in dollars per share) | $26 |
Reinvested dividend equivalents (in dollars per share) | 26.53 |
Forfeited (in dollars per share) | $26.13 |
Nonvested, June 30, 2013 (in dollars per share) | $26.82 |
Unrecognized compensation costs | $17,000,000 |
Unrecognized compensation costs, period for recognition | '2 years 1 month 6 days |
Earnings_Per_Share_Earnings_Pe1
Earnings Per Share Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||||||||||||||||||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jul. 01, 2012 | Apr. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | ||||||||||
Numerator | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Net income before allocation to noncontrolling interests | $104 | $131 | $128 | $140 | ($10) | $161 | $173 | $112 | $503 | $436 | $248 | [1],[2] | ' | |||||||||
Net income/(loss) attributable to noncontrolling interests | -1 | 0 | 0 | 0 | 0 | -1 | 0 | 1 | -1 | 0 | 3 | [2] | ' | |||||||||
Net income attributable to Zoetis Inc. | $105 | $131 | $128 | $140 | ($10) | $162 | $173 | $111 | $504 | $436 | $245 | [2] | ' | |||||||||
Denominator | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Weighted-average common shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 500,002 | 500,000 | [3] | 500,000 | [2],[3] | 500,000 | ||||||||
Common stock equivalents: stock options, RSUs and DSUs | ' | ' | ' | ' | ' | ' | ' | ' | 315 | 0 | ' | ' | ||||||||||
Weighted-average common and potential dilutive shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 500,317 | 500,000 | [3] | 500,000 | [2],[3] | ' | ||||||||
Earnings Per Share, Basic | $0.21 | [4] | $0.26 | [4] | $0.26 | [4] | $0.28 | [4] | ($0.02) | [4] | $0.32 | [4] | $0.35 | [4] | $0.22 | [4] | $1.01 | $0.87 | $0.49 | [2] | ' | |
Earnings per share attributable to Zoetis stockholdersbdiluted (in dollars per share) | $0.21 | [4] | $0.26 | [4] | $0.26 | [4] | $0.28 | [4] | ($0.02) | [4] | $0.32 | [4] | $0.35 | [4] | $0.22 | [4] | $1.01 | $0.87 | $0.49 | [2] | ' | |
[1] | Includes impacts from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||||||||||||||||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||||||||||||||||||
[3] | The weighted average shares outstanding for both basic and diluted earnings per share for the years ended December 31, 2012 and 2011 was calculated using 500B million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the initial public offering, which was completed on February 6, 2013. There were no Zoetis restricted stock units, deferred stock units, stock options or performance shares outstanding prior to the initial public offering. | |||||||||||||||||||||
[4] | The weighted average common shares outstanding for both basic and diluted earnings per share for 2012 was calculated using an aggregate of 500 million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the IPO. There were no Zoetis restricted stock units, stock options or performance shares outstanding prior to the IPO. |
Commitments_and_Contingencies_2
Commitments and Contingencies Commitments and Contingencies (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 13, 2013 | Feb. 29, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 |
USD ($) | EUR (€) | Roxarsone (3-Nitro) | PregSure | Ulianopolis, Brazil | Ulianopolis, Brazil | Mary Green | Other Fixed Assets | Other Fixed Assets | Land, Buildings and Improvements | Land, Buildings and Improvements | |
plaintiffs | claims | plaintiffs | defendant | Roxarsone (3-Nitro) | USD ($) | BRL | USD ($) | BRL | |||
claims | defendant | claims | |||||||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense | ' | ' | ' | ' | ' | ' | ' | $400,000 | 752,459 | $200,000 | 479,977 |
Number of claims seeking damages | ' | ' | 9 | 200 | ' | 6 | 1 | ' | ' | ' | ' |
Number of plaintiffs | ' | ' | 140 | ' | 30 | ' | ' | ' | ' | ' | ' |
Number of claims settled | ' | ' | ' | 20 | ' | ' | ' | ' | ' | ' | ' |
Number of additional defendants | ' | ' | ' | ' | 57 | 5 | ' | ' | ' | ' | ' |
Loss Contingency Accrual, Period Increase (Decrease) | $14,000,000 | € 11,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_3
Commitments and Contingencies Purchase Obligations (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Commitments and Contingencies Disclosure [Abstract] | ' |
Long-term Purchase Commitment, Amount | $66 |
Commitments_and_Contingencies_4
Commitments and Contingencies Operating Leases (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ' |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $18 | ' | ' |
Penalties Rate | 2.00% | ' | ' |
Capital Lease Interest Rates | 1.00% | ' | ' |
Operating Leases, Rent Expense, Net | 32 | 17 | 21 |
Operating Leases, Future Minimum Payments, Due in Two Years | 14 | ' | ' |
Operating Leases, Future Minimum Payments, Due in Three Years | 12 | ' | ' |
Operating Leases, Future Minimum Payments, Due in Four Years | 8 | ' | ' |
Operating Leases, Future Minimum Payments, Due in Five Years | 5 | ' | ' |
Operating Leases, Future Minimum Payments, Due Thereafter | 10 | ' | ' |
Operating Leases, Future Minimum Payments Due | $67 | ' | ' |
Segment_and_Other_Revenue_Info2
Segment and Other Revenue Information (Income Statement) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jul. 01, 2012 | Apr. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
segment | ||||||||||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Number of operating segments | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | |||
Revenue | $1,254,000,000 | $1,103,000,000 | $1,114,000,000 | $1,090,000,000 | $1,176,000,000 | $1,019,000,000 | $1,094,000,000 | $1,047,000,000 | $4,561,000,000 | [1] | $4,336,000,000 | [1] | $4,233,000,000 | [1],[2] |
Earnings | 126,000,000 | 185,000,000 | 187,000,000 | 192,000,000 | 74,000,000 | 213,000,000 | 252,000,000 | 171,000,000 | 690,000,000 | [3],[4],[5] | 710,000,000 | [3],[4],[5] | 394,000,000 | [2],[3],[4],[5] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 209,000,000 | [6] | 200,000,000 | [6] | 205,000,000 | [6] |
Reportable Segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 4,561,000,000 | [1] | 4,336,000,000 | [1] | 4,233,000,000 | [1] |
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | 2,002,000,000 | [4] | 1,785,000,000 | [4] | 1,656,000,000 | [4] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 99,000,000 | [6] | 96,000,000 | [6] | 91,000,000 | [6] |
Other business activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | |||
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | -320,000,000 | [4],[7] | -275,000,000 | [4],[7] | -279,000,000 | [4],[7] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | [6],[7] | 16,000,000 | [6],[7] | 15,000,000 | [6],[7] |
Corporate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | -567,000,000 | [4],[8] | -506,000,000 | [4],[8] | -504,000,000 | [4],[8] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 23,000,000 | [6],[8] | 25,000,000 | [6],[8] | 31,000,000 | [6],[8] |
Purchase accounting adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | -48,000,000 | [4],[9] | -52,000,000 | [4],[9] | -82,000,000 | [4],[9] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 48,000,000 | [6],[9] | 52,000,000 | [6],[9] | 59,000,000 | [6],[9] |
Acquisition-related costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | -22,000,000 | [10],[4] | -53,000,000 | [10],[4] | -122,000,000 | [10],[4] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 0 | [10],[6] | 10,000,000 | [10],[6] | 6,000,000 | [10],[6] |
Certain Significant Items | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | -240,000,000 | [11],[4] | -96,000,000 | [11],[4] | -172,000,000 | [11],[4] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | [11],[6] | 1,000,000 | [11],[6] | 3,000,000 | [11],[6] |
Other unallocated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | -115,000,000 | [12],[4] | -93,000,000 | [12],[4] | -103,000,000 | [12],[4] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | [12],[6] | 0 | [12],[6] | 0 | [12],[6] |
United States (U.S.) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,902,000,000 | [1] | 1,776,000,000 | [1] | 1,659,000,000 | [1] |
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | 1,045,000,000 | [4] | 921,000,000 | [4] | 820,000,000 | [4] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 43,000,000 | [6] | 28,000,000 | [6] | 26,000,000 | [6] |
Europe, Africa, and Middle East (EuAfME) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,168,000,000 | [1] | 1,096,000,000 | [1] | 1,144,000,000 | [1] |
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | 420,000,000 | [4] | 375,000,000 | [4] | 365,000,000 | [4] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | [6] | 28,000,000 | [6] | 25,000,000 | [6] |
Canada and Latin America (CLAR) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 778,000,000 | [1] | 769,000,000 | [1] | 788,000,000 | [1] |
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | 266,000,000 | [4] | 253,000,000 | [4] | 275,000,000 | [4] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 18,000,000 | [6] | 23,000,000 | [6] | 25,000,000 | [6] |
Asia Pacific (APAC) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 713,000,000 | [1] | 695,000,000 | [1] | 642,000,000 | [1] |
Earnings | ' | ' | ' | ' | ' | ' | ' | ' | 271,000,000 | [4] | 236,000,000 | [4] | 196,000,000 | [4] |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | $13,000,000 | [6] | $17,000,000 | [6] | $15,000,000 | [6] |
[1] | Revenue denominated in euros were $693 million in 2013, $639 million in 2012, and $710 million in 2011. | |||||||||||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | |||||||||||||
[3] | In 2012, the Provision for taxes on income reflects the following:b"U.S. tax benefits of approximately $29.3 million, representing tax and interest, resulting from a multi-year settlement with the U.S. Internal Revenue Service with respect to audits for the years 2006 through 2008, and international tax benefits of approximately $2.7 million, representing tax and interest, resulting from the resolution of certain tax positions pertaining to prior years with various foreign tax authorities and from the expiration of certain statutes of limitations;b"U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes);b"The expiration of the U.S. Research and Development Tax Credit on December 31, 2011; andb"Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | |||||||||||||
[4] | Defined as income before provision for taxes on income. | |||||||||||||
[5] | In 2013, the Provision for taxes on income reflects the following:b"U.S. tax expense of approximately $3 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes);b"U.S. tax benefit related to U.S. Research and Development Tax Credit which was retroactively extended on January 3, 2013, and the U.S. Domestic Production Activities deduction;b"Tax expense of approximately $25 million related to the establishment of valuation allowance; and b"Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | |||||||||||||
[6] | 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. | |||||||||||||
[7] | Other business activities reflects R&D costs managed by our Research and Development organization and not allocated to the operating segments. | |||||||||||||
[8] | Corporate includes, among other things, administration expenses, interest expense, certain compensation and other costs not charged to our operating segments. | |||||||||||||
[9] | Purchase accounting adjustments include certain charges related to intangible assets, property, plant and equipment not charged to our operating segments, and the fair value adjustments to inventory. | |||||||||||||
[10] | Acquisition-related costs can include costs associated with acquiring, integrating and restructuring acquired businesses, such as allocated transaction costs, integration costs, restructuring charges and additional depreciation associated with asset restructuring. For additional information, see Note 6. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives. | |||||||||||||
[11] | 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 restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition, the impact of divestiture-related gains and losses and certain costs related to becoming an independent public company. For additional information, see NoteB 6. Restructuring Charges and Other Costs Associated with Acquisition and Cost-Reduction/Productivity Initiatives. b"For 2013, certain significant items primarily includes: (i) Zoetis stand-up costs of $206 million; (ii) $20 million income primarily related to a reversal of certain employee termination expenses, partially offset by restructuring charges related to exiting certain manufacturing and research facilities; (iii) $6 million income on the government-mandated sale of certain product rights in Brazil that were acquired with the FDAH acquisition in 2009; (iv) asset impairment charges associated with asset restructuring of $19 million; (v) additional depreciation associated with asset restructuring of $8 million; (vi) write-offs of inventory and intercompany accounts that were transferred to us as part of the Separation from Pfizer of $24 million; and (vii) litigation-related charges of $5 million. Stand-up costs include 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, accelerated vesting and associated cash payment related to certain Pfizer equity awards, and certain legal registration and patent assignment costs.b"For 2012, certain significant items includes: (i) $115 million for restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition; (ii) $14 million income related to a favorable legal settlement for an intellectual property matter; and (iii) $4 million income due to a change in estimate related to transitional manufacturing purchase agreements associated with divestitures | |||||||||||||
[12] | Includes overhead expenses associated with our manufacturing operations |
Segment_and_Other_Revenue_Info3
Segment and Other Revenue Information (Income Statement Narrative) (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Revenues denominated in Euros | $693 | $639 | $710 | |||
Gain (Loss) on Disposition of Assets | 6 | [1] | 0 | [1] | 0 | [1] |
Asset write-offs and asset impairments | 15 | 10 | 78 | |||
Gain (loss) related to litigation settlement | -1 | [2] | 19 | [2] | 0 | [2] |
Percentage Of Total Revenues By Country | 10.00% | ' | ' | |||
Revenue By Major Customer, Percentage | 11.00% | 10.00% | ' | |||
Certain Significant Items | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Restructuring charges | 20 | ' | ' | |||
Stand-up costs | 206 | ' | ' | |||
Gain (Loss) on Disposition of Assets | 6 | ' | ' | |||
Asset write-offs and asset impairments | 19 | ' | 69 | |||
Inventory Write-down | ' | ' | 12 | |||
Charges for manufacturing services agreements associated with divestitures change in estimate | ' | -4 | 27 | |||
Restructuring and implementation costs | ' | 115 | 62 | |||
Additional depreciation asset restructuring | 8 | ' | ' | |||
Inventory and Intercompany Write Offs After Separation | 24 | ' | ' | |||
Gain (loss) related to litigation settlement | -5 | 14 | ' | |||
Other Cost of Operating Revenue | ' | ' | 2 | |||
Other International Countries | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Revenues | $100 | ' | ' | |||
[1] | For 2013, represents the net gain on the government-mandated sale of certain product rights in Brazil that were acquired with the FDAH acquisition in 2009. | |||||
[2] | For 2012, represents income from a favorable legal settlement related to an intellectual property matter ($14 million) and a change in estimate for an environmental-related reserve due to a favorable settlement ($7 million income) partially offset by litigation-related charges ($2 million). |
Segment_and_Other_Revenue_Info4
Segment and Other Revenue Information Segment Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Property, Plant and Equipment, Net | $1,295 | [1] | $1,241 | [1] |
Assets | 6,558 | [1] | 6,262 | [1] |
United States (U.S.) | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Property, Plant and Equipment, Net | 827 | 788 | ||
Europe, Africa, Middle East | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Property, Plant and Equipment, Net | 233 | 224 | ||
Canada and Latin America | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Property, Plant and Equipment, Net | 114 | 72 | ||
Asia Pacific (APAC) | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Property, Plant and Equipment, Net | $121 | $157 | ||
[1] | The consolidated balance sheet as of December 31, 2013 has been prepared under a different basis of presentation than the combined balance sheet as of December 31, 2012, which significantly impacts comparability. See Note 3. Basis of Presentation. |
Segment_and_Other_Revenue_Info5
Segment and Other Revenue Information (Revenue by Animal Species) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jul. 01, 2012 | Apr. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | $1,254,000,000 | $1,103,000,000 | $1,114,000,000 | $1,090,000,000 | $1,176,000,000 | $1,019,000,000 | $1,094,000,000 | $1,047,000,000 | $4,561,000,000 | [1] | $4,336,000,000 | [1] | $4,233,000,000 | [1],[2] |
Livestock [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 2,931,000,000 | 2,806,000,000 | 2,778,000,000 | |||
Cattle | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,631,000,000 | 1,608,000,000 | 1,617,000,000 | |||
Swine | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 655,000,000 | 590,000,000 | 562,000,000 | |||
Poultry | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 541,000,000 | 501,000,000 | 501,000,000 | |||
Other (Fish and Sheep) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 104,000,000 | 107,000,000 | 98,000,000 | |||
Companion Animal [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,630,000,000 | 1,530,000,000 | 1,455,000,000 | |||
Horses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 179,000,000 | 187,000,000 | 168,000,000 | |||
Dogs and Cats | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | $1,451,000,000 | $1,343,000,000 | $1,287,000,000 | |||
[1] | Revenue denominated in euros were $693 million in 2013, $639 million in 2012, and $710 million in 2011. | |||||||||||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. |
Segment_and_Other_Revenue_Info6
Segment and Other Revenue Information (Revenue by Product) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jul. 01, 2012 | Apr. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | $1,254,000,000 | $1,103,000,000 | $1,114,000,000 | $1,090,000,000 | $1,176,000,000 | $1,019,000,000 | $1,094,000,000 | $1,047,000,000 | $4,561,000,000 | [1] | $4,336,000,000 | [1] | $4,233,000,000 | [1],[2] |
Anti-infectives | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,295,000,000 | 1,268,000,000 | 1,311,000,000 | |||
Vaccines | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,201,000,000 | 1,117,000,000 | 1,077,000,000 | |||
Parasiticides | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 727,000,000 | 692,000,000 | 645,000,000 | |||
Medicated feed additives | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 446,000,000 | 403,000,000 | 347,000,000 | |||
Other pharmaceuticals | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 744,000,000 | 712,000,000 | 724,000,000 | |||
Other non-pharmaceuticals | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | $148,000,000 | $144,000,000 | $129,000,000 | |||
[1] | Revenue denominated in euros were $693 million in 2013, $639 million in 2012, and $710 million in 2011. | |||||||||||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. |
Transactions_and_Agreements_wi2
Transactions and Agreements with Pfizer (Pre-Separation Period) (Details) (Pfizer, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2013 |
Pfizer | ' |
Related Party Transaction [Line Items] | ' |
Costs of goods manufactured | $420 |
Transactions_and_Agreements_wi3
Transactions and Agreements with Pfizer (Agreements with Pfizer) (Details) (USD $) | Feb. 06, 2013 | Feb. 06, 2013 | Feb. 06, 2013 | Feb. 06, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | manufacturing_site | Pfizer | Anchor Manufacturing Sites | Satellite Manufacturing Sites | Pfizer |
manufacturing_site | manufacturing_site | manufacturing_site | |||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Gross | ' | ' | ' | ' | $121 |
Number of manufacturing facilities | 28 | ' | 13 | 15 | ' |
Number of manufacturing facilities retained by Pfizer | ' | 13 | ' | ' | ' |
Accounts Payable | ' | ' | ' | ' | $181 |
Transactions_and_Agreements_wi4
Transactions and Agreements with Pfizer (Post-Separation Agreements with Pfizer) (Details) (Pfizer, USD $) | 6 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2013 |
Transitional Services Agreement | Master Manufacturing and Supply Agreements | Employee Matters Agreement | Income Taxes Payable | |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Due to related parties | ' | ' | ' | $31 |
Amount charged under agreement with Pfizer | $63 | $130 | $99 | ' |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Unaudited) Selected Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | 24 Months Ended | ||||||||||||||||||||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jul. 01, 2012 | Apr. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | |||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Weighted-average common shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 500,002 | 500,000 | [1] | 500,000 | [1],[2] | 500,000 | |||||||||
Revenue, Net | $1,254 | $1,103 | $1,114 | $1,090 | $1,176 | $1,019 | $1,094 | $1,047 | $4,561 | [3] | $4,336 | [3] | $4,233 | [2],[3] | ' | ||||||||
Costs and Expenses | 1,092 | [4] | 915 | [4] | 947 | [4] | 891 | [4] | 1,022 | 800 | 818 | 851 | ' | ' | ' | ' | |||||||
Restructuring charges and certain acquisition-related costs | 36 | 3 | -20 | 7 | 80 | 6 | 24 | 25 | 26 | 135 | 154 | [2] | ' | ||||||||||
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | 126 | 185 | 187 | 192 | 74 | 213 | 252 | 171 | 690 | [5],[6],[7] | 710 | [5],[6],[7] | 394 | [2],[5],[6],[7] | ' | ||||||||
Provision for taxes on income | 22 | [8] | 54 | [8] | 59 | [8] | 52 | [8] | 84 | [8] | 52 | [8] | 79 | [8] | 59 | [8] | 187 | [5],[7],[9] | 274 | [5],[7],[9] | 146 | [2],[5],[7],[9] | ' |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 104 | 131 | 128 | 140 | -10 | 161 | 173 | 112 | 503 | 436 | 248 | [10],[2] | ' | ||||||||||
Net income/(loss) attributable to noncontrolling interests | -1 | 0 | 0 | 0 | 0 | -1 | 0 | 1 | -1 | 0 | 3 | [2] | ' | ||||||||||
Net Income (Loss) Attributable to Parent | $105 | $131 | $128 | $140 | ($10) | $162 | $173 | $111 | $504 | $436 | $245 | [2] | ' | ||||||||||
Earnings Per Share, Basic | $0.21 | [11] | $0.26 | [11] | $0.26 | [11] | $0.28 | [11] | ($0.02) | [11] | $0.32 | [11] | $0.35 | [11] | $0.22 | [11] | $1.01 | $0.87 | $0.49 | [2] | ' | ||
Diluted (in dollars per share) | $0.21 | [11] | $0.26 | [11] | $0.26 | [11] | $0.28 | [11] | ($0.02) | [11] | $0.32 | [11] | $0.35 | [11] | $0.22 | [11] | $1.01 | $0.87 | $0.49 | [2] | ' | ||
[1] | The weighted average shares outstanding for both basic and diluted earnings per share for the years ended December 31, 2012 and 2011 was calculated using 500B million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the initial public offering, which was completed on February 6, 2013. There were no Zoetis restricted stock units, deferred stock units, stock options or performance shares outstanding prior to the initial public offering. | ||||||||||||||||||||||
[2] | Includes revenue and expenses from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | ||||||||||||||||||||||
[3] | Revenue denominated in euros were $693 million in 2013, $639 million in 2012, and $710 million in 2011. | ||||||||||||||||||||||
[4] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmU0ODZiN2M4NjFhMjQ2MjM4ZjJhMDY0MWI2ZGMxZjU0fFRleHRTZWxlY3Rpb246MkM5RjNCMTlGQTZGQzg5MkE3RTdGRkQ3REY0QjU5MDQM} | ||||||||||||||||||||||
[5] | In 2012, the Provision for taxes on income reflects the following:b"U.S. tax benefits of approximately $29.3 million, representing tax and interest, resulting from a multi-year settlement with the U.S. Internal Revenue Service with respect to audits for the years 2006 through 2008, and international tax benefits of approximately $2.7 million, representing tax and interest, resulting from the resolution of certain tax positions pertaining to prior years with various foreign tax authorities and from the expiration of certain statutes of limitations;b"U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes);b"The expiration of the U.S. Research and Development Tax Credit on December 31, 2011; andb"Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | ||||||||||||||||||||||
[6] | Defined as income before provision for taxes on income. | ||||||||||||||||||||||
[7] | In 2013, the Provision for taxes on income reflects the following:b"U.S. tax expense of approximately $3 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside the United States that will not be indefinitely reinvested overseas (see C. Deferred Taxes);b"U.S. tax benefit related to U.S. Research and Development Tax Credit which was retroactively extended on January 3, 2013, and the U.S. Domestic Production Activities deduction;b"Tax expense of approximately $25 million related to the establishment of valuation allowance; and b"Tax cost related to changes in uncertain tax positions (see D. Tax Contingencies). | ||||||||||||||||||||||
[8] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmU0ODZiN2M4NjFhMjQ2MjM4ZjJhMDY0MWI2ZGMxZjU0fFRleHRTZWxlY3Rpb246RkFERTU4NDYyMURFOTFBNjFFMENGRkQ4NUFBNDI1ODcM} | ||||||||||||||||||||||
[9] | In 2011, the Provision for taxes on income reflects the following:b"U.S. tax expense of approximately $9 million as a result of providing U.S. deferred income taxes on certain current-year income earned outside of the United States that will not be indefinitely reinvested overseas; and b"U.S. tax benefits of approximately $9.5 million, representing tax and interest, resulting from the tax benefit recorded in connection with the settlement of certain audits with the U.S. Internal Revenue Service. | ||||||||||||||||||||||
[10] | Includes impacts from acquisitions from the acquisition date, see Note 3. Basis of Presentation and Note 5. Acquisitions, Divestitures and Certain Investments. | ||||||||||||||||||||||
[11] | The weighted average common shares outstanding for both basic and diluted earnings per share for 2012 was calculated using an aggregate of 500 million shares of common stock outstanding, which was the number of Zoetis Inc. shares outstanding at the time of the IPO. There were no Zoetis restricted stock units, stock options or performance shares outstanding prior to the IPO. |
Schedule_II_Valuation_and_Qual2
Schedule II - Valuation and Qualifying Accounts Schedule II - Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Receivables [Abstract] | ' | ' | ' | ' | |
Valuation Allowances and Reserves, Balance | $31 | $49 | $29 | $26 | |
Valuation Allowances and Reserves, Charged to Cost and Expense | 6 | 23 | 5 | ' | |
Valuation Allowances and Reserves, Deductions | ($24) | [1] | ($3) | ($2) | ' |
[1] | Primarily reflects Separation Adjustments (see Notes to Consolidated and Combined Financial StatementsbNote 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offerb Adjustments Associated with the Separation) as well as an adjustment related to improved accounts receivable collection experience. |