Zoetis (ZTS) 10-Q 5 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 27, 2015	Nov. 02, 2015
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 27, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Trading Symbol	ZTS
Entity Registrant Name	Zoetis Inc.
Entity Central Index Key	1,555,280
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity common Stock, Shares Outstanding		497,920,464

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Income Statement [Abstract]
Revenue		$ 1,214	$ 1,210	$ 3,491	$ 3,465
Costs and expenses:
Cost of Sales	[1]	421	434	1,242	1,226
Selling, general and administrative expenses	[1]	374	394	1,107	1,146
Research and development expenses	[1]	91	93	255	272
Amortization of intangible assets	[1]	15	16	45	46
Restructuring charges and certain acquisition-related costs		13	2	280	10
Interest expense, net of capitalized interest		29	29	86	87
Other (income)/deductions—net		(2)	4	0	13
Income before provision for taxes on income		273	238	476	665
Provision for taxes on income		83	71	157	204
Net income before allocation to noncontrolling interests		190	167	319	461
Less: Net income attributable to noncontrolling interests		1	1	2	4
Net income attributable to Zoetis Inc.		$ 189	$ 166	$ 317	$ 457
Earnings per share attributable to Zoetis Inc. stockholders:
Basic (in dollars per share)		$ 0.38	$ 0.33	$ 0.63	$ 0.91
Diluted (in dollars per share)		$ 0.38	$ 0.33	$ 0.63	$ 0.91
Weighted-average common shares outstanding:
Basic (in shares)		499,239	501,453	500,186	500,887
Diluted (in shares)		501,653	502,445	502,480	501,610
Dividends paid per common share (in dollars per share)		$ 0.083	$ 0.072	$ 0.166	$ 0.144
[1]	Amortization expense related to finite-lived acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense related to finite-lived acquired intangible assets that are associated with a single function is included in Cost of sales, Selling, general and administrative expenses or Research and development expenses, as appropriate, in the condensed consolidated statements of income.

CONDENSED CONSOLIDATED STATEME3

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Statement of Comprehensive Income [Abstract]
Net income before allocation to noncontrolling interests		$ 190	$ 167	$ 319	$ 461
Other comprehensive (loss)/income, net of taxes and reclassification adjustments:
Unrealized loss on derivatives, net		(3)	0	(3)	0
Foreign currency translation adjustments, net		(57)	(38)	(200)	(20)
Benefit plans: Actuarial gains, net	[1]	0	(1)	1	(1)
Plan settlement, net	[2]	0	0	0	3
Total other comprehensive (loss)/income, net of tax		(60)	(39)	(202)	(18)
Comprehensive income before allocation to noncontrolling interests		130	128	117	443
Less: Comprehensive (loss)/income attributable to noncontrolling interests		(2)	2	(1)	4
Comprehensive income attributable to Zoetis Inc.		$ 132	$ 126	$ 118	$ 439
[1]	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 condensed consolidated statements of income.
[2]	Reflects the 2014 settlement charge associated with the 2012 sale of our Netherlands manufacturing facility which was recorded to Other (income)/deductions—net. See Note 12. Benefit Plans for additional information.

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 592	$ 882
Accounts receivable, less allowance for doubtful accounts of $39 in 2015 and $32 in 2014	1,038	980
Inventories	1,403	1,289
Current deferred tax assets	127	109
Other current assets	264	205
Assets held for sale	26	0
Total current assets	3,450	3,465
Property, plant and equipment, less accumulated depreciation of $1,201 in 2015 and $1,145 in 2014	1,293	1,318
Goodwill	1,163	976
Identifiable intangible assets, less accumulated amortization	679	727
Noncurrent deferred tax assets	58	54
Other noncurrent assets	43	48
Total assets	6,686	6,588
Liabilities and Equity
Short-term borrowings	8	7
Current portion of long-term debt	400	0
Accounts payable	306	290
Dividends payable	0	42
Accrued expenses	599	475
Accrued compensation and related items	197	238
Income taxes payable	91	26
Other current liabilities	57	8
Total current liabilities	1,658	1,086
Long-term debt	3,226	3,624
Noncurrent deferred tax liabilities	227	277
Other taxes payable	63	57
Other noncurrent liabilities	258	207
Total liabilities	$ 5,432	$ 5,251
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value: 1,000,000,000 authorized, none issued	$ 0	$ 0
Common stock, $0.01 par value: 6,000,000,000 authorized; 501,573,533 and 501,342,267 shares issued; 498,333,086 and 501,327,524 shares outstanding at September 27, 2015, and December 31, 2014, respectively	5	5
Treasury stock, at cost, 3,240,447 and 14,743 shares of common stock at September 27, 2015, and December 31, 2014, respectively	(150)	0
Additional paid-in capital	993	958
Retained earnings	943	709
Accumulated other comprehensive loss	(562)	(361)
Total Zoetis Inc. equity	1,229	1,311
Equity attributable to noncontrolling interests	25	26
Total equity	1,254	1,337
Total liabilities and equity	$ 6,686	$ 6,588

CONDENSED CONSOLIDATED BALANCE5

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (PARENTHETICAL) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 39	$ 32
Accumulated depreciation	$ 1,201	$ 1,145
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	1,000,000,000	1,000,000,000
Preferred Stock, Shares Issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized	6,000,000,000	6,000,000,000
Common Stock, Shares, Issued	501,573,533	501,342,267
Common stock, shares outstanding	498,333,086	501,327,524
Treasury Stock, Shares	3,240,447	14,743

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) - USD ($) $ in Millions		Total	Common Stock	[1]	Treasury Stock	[1]	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Equity Attributable to Noncontrolling Interests
Beginning balance at Dec. 31, 2013		$ 962	$ 5		$ 0		$ 878	$ 276	$ (219)	$ 22
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		461						457		4
Other comprehensive income/(loss)		(18)							(18)
Share-based compensation awards	[2]	23					23
Defined contribution plans transactions	[3]	32					32
Pension plan transfer from Pfizer Inc.	[4]	0					3		(3)
Treasury stock acquired		(0.4)
Employee benefit plan contribution from Pfizer Inc.	[5]	2					2
Dividends declared		(73)						(72)		(1)
Ending balance at Sep. 28, 2014		1,389	5		0		938	661	(240)	25
Beginning balance at Dec. 31, 2014		1,337	5		0		958	709	(361)	26
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		319						317		2
Other comprehensive income/(loss)		(202)							(201)	(1)
Share-based compensation awards	[2]	31			(2)		33
Treasury stock acquired	[6]	(148)			(148)
Employee benefit plan contribution from Pfizer Inc.	[5]	2					2
Dividends declared		(85)						(83)		(2)
Ending balance at Sep. 27, 2015		$ 1,254	$ 5		$ (150)		$ 993	$ 943	$ (562)	$ 25
[1]	As of September 27, 2015, and September 28, 2014, there were 498,333,086 and 501,195,696 outstanding shares of common stock, respectively, and 3,240,447 and 13,792 shares of treasury stock, respectively. Treasury stock is recognized at the cost to reacquire the shares. For additional information, see Note 14. Stockholders' Equity.
[2]	Includes the issuance of shares of Zoetis Inc. common stock and the reacquisition of shares of treasury stock associated with the vesting of employee share-based awards. For additional information, see Note 13. Share-Based Payments and Note. 14. Stockholders' Equity.
[3]	Reflects company matching and profit-sharing contributions funded through the issuance of shares of Zoetis Inc. common stock. For additional information, see Note 14. Stockholders' Equity.
[4]	Reflects the 2014 transfers of defined benefit pension plans from Pfizer Inc. and the associated reclassification from Additional Paid in Capital to Accumulated Other Comprehensive Loss. See Note 12. Benefit Plans.
[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 12. Benefit Plans.
[6]	Reflects the acquisition of treasury shares in connection with the Share Repurchase Program. For additional information, see Note 14. Stockholders' Equity.

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) (PARENTHETICAL) - shares	Sep. 27, 2015	Dec. 31, 2014	Sep. 28, 2014	Dec. 31, 2013
Statement of Stockholders' Equity [Abstract]
Common stock, shares outstanding	498,333,086	501,327,524	501,195,696
Treasury stock, shares	3,240,447	14,743	13,792	0

CONDENSED CONSOLIDATED STATEME8

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions		9 Months Ended
		Sep. 27, 2015	Sep. 28, 2014
Operating Activities
Net income before allocation to noncontrolling interests		$ 319	$ 461
Adjustments to reconcile net income before noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization expense		144	151
Share-based compensation expense		31	22
Restructuring, net of payments		207	0
Asset write-offs and asset impairments		48	8
Deferred taxes		(81)	(60)
Employee benefit plan contribution from Pfizer Inc.		2	2
Other non-cash adjustments		11	(8)
Other changes in assets and liabilities, net of acquisitions and divestitures
Accounts receivable		(150)	39
Inventories		(142)	(107)
Other assets		(64)	1
Accounts payable		30	(237)
Other liabilities		(37)	(79)
Other tax accounts, net		68	46
Net cash provided by operating activities		386	239
Investing Activities
Purchases of property, plant and equipment		(143)	(129)
Milestone payment related to previously acquired intangibles		0	(15)
Asset acquisition	[1]	(229)	0
Net proceeds from sales of assets		2	8
Other investing activities		(8)	(1)
Net cash used in investing activities		(378)	(137)
Financing Activities
Increase (decrease) in short-term borrowings, net		2	(5)
Stock-based compensation-related proceeds and excess tax benefits		4	2
Purchases of treasury stock		(150)	0
Cash dividends paid		(127)	(109)
Net cash used in financing activities		(271)	(112)
Effect of exchange-rate changes on cash and cash equivalents		(27)	(2)
Net decrease in cash and cash equivalents		(290)	(12)
Cash and cash equivalents at beginning of period		882	610
Cash and cash equivalents at end of period		592	598
Cash paid during the period for:
Income taxes		175	210
Interest, net of capitalized interest		117	117
Non-cash transactions:
Intangible asset acquisition	[2]	0	8
Purchases of property, plant and equipment		12	0
Contingent purchase price consideration	[1]	$ 22	$ 0
[1]	Reflects the acquisition of certain assets of Abbott Animal Health. See Note 5. Acquisitions and Divestitures for additional information.
[2]	Reflects the non-cash portion of the acquisition of product registration and application rights from Pfizer in the third quarter of 2014.

Organization

Organization	9 Months Ended
	Sep. 27, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Zoetis Inc. (including its subsidiaries, 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 two geographic regions: the United States (U.S.) and International. We directly market our products in approximately 70 countries across North America, Europe, Africa, Asia, Australia and South America. Our products are sold in more than 120 countries, including developed markets and emerging markets, and our revenue is mostly generated in the United States. 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.

The Separation and Transactions

The Separation and Transactions and Agreements with Pfizer	9 Months Ended
	Sep. 27, 2015
Separation Activities and Initial Public Offering [Abstract]
The Separation and Transactions and Agreements with Pfizer	The Separation and Transactions and Agreements with Pfizer 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 (the Exchange Offer) resulting in the full separation of Zoetis from Pfizer and the disposal of Pfizer's entire ownership and voting interest in Zoetis. 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. After the Separation, an initial public offering (IPO) of our common stock was completed. Pfizer retained the net proceeds from the IPO. Zoetis had related party transactions with Pfizer through the completion of the Exchange Offer. As of the completion of the Exchange Offer, Pfizer is no longer a related party. In connection with the IPO, we entered into certain agreements that provide a framework for an ongoing relationship with Pfizer. For additional information regarding activities while Pfizer was a related party, as well as our ongoing agreements with Pfizer, see Note 19. Transactions and Agreements with Pfizer in our 2014 Annual Report on Form 10-K. At September 27, 2015 , and December 31, 2014 , $ 19 million and $ 24 million , respectively, was included in Accounts receivable as receivable from Pfizer, and $ 35 million and $ 42 million , respectively, was included in Accounts payable as payable to Pfizer.

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 27, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared following the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (U.S. GAAP) can be condensed or omitted. Balance sheet amounts and operating results for subsidiaries operating outside the United States are as of and for the three and nine-month periods ended August 23, 2015 , and August 24, 2014 . Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year. We are responsible for the unaudited condensed consolidated financial statements included in this Form 10-Q. The condensed consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of our financial position and operating results. The information included in this interim report should be read in conjunction with the financial statements and accompanying notes included in our 2014 Annual Report on Form 10-K. In the second quarter of 2015, we changed our segment reporting structure and recategorized certain costs that are not allocated to our operating segments. The prior period presentation has been revised to reflect the new segment reporting structure. See Note 17. Segment and Other Revenue Information for additional information. Certain reclassifications have been made to prior year data to conform to current year presentation.

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Sep. 27, 2015
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies New Accounting Standards In September 2015, the Financial Accounting Standards Board (FASB) issued an accounting standards update to simplify the accounting for measurement period adjustments recorded during the one-year period following a business combination. The update removes the requirement for an acquirer in a business combination to account for measurement period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which the amount of the adjustment is determined. The provisions of the new standard are effective beginning January 1, 2016, for annual and interim periods. The guidance will be adopted prospectively and early adoption is permitted. We are currently assessing whether or not to early adopt this guidance. In July 2015, the FASB issued an accounting standards update to simplify the measurement of inventory by requiring that inventory be measured at the lower of cost or net realizable value, rather than at the lower of cost or market, with market being defined as either replacement cost, net realizable value or net realizable value less a normal profit margin. The provisions of the new standard are effective beginning January 1, 2017, for annual and interim reporting periods. The guidance will be adopted prospectively and early adoption is permitted. We are currently assessing the potential impact that the adoption of this guidance will have on our consolidated financial statements, as well as whether or not to early adopt this guidance. In April 2015, the FASB issued an accounting standards update that requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, rather than as a deferred charge (i.e., an asset). Debt issuance costs associated with line-of-credit arrangements may continue to be recognized as a deferred charge. We have elected to adopt this new guidance, effective for the period ended September 27, 2015 . As such, debt issuance costs, associated with Zoetis senior notes of approximately $17 million and $19 million as of September 27, 2015 and December 31, 2014 , respectively, previously recorded within Other noncurrent assets are now presented as a direct deduction from the carrying amount of the related debt liability. In February 2015, the FASB issued an accounting standards update that provides revised guidance on whether to consolidate certain legal entities, such as limited partnerships, limited liability corporations and securitization structures. We plan to adopt this guidance as of January 1, 2016, the required effective date, and do not expect this guidance to have a significant impact on our consolidated financial statements. In May 2014, the FASB issued an accounting standards update that outlines a new, single comprehensive model for companies to use in accounting for revenue arising from contracts with customers. This update supersedes most current revenue recognition guidance under U.S. GAAP. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance includes a five-step model for determining how, when and how much revenue should be recognized. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB issued a one year deferral of the effective date. The provisions of the new standard are now effective for Zoetis beginning January 1, 2018, for annual and interim reporting periods. Early adoption is permitted beginning on January 1, 2017. The new standard allows for either full retrospective or modified retrospective transition upon adoption. We continue to assess the transition method we will elect for adoption as well as the potential impact that adopting this new guidance will have on our consolidated financial statements.

Acquisitions and Divestitures

Acquisitions and Divestitures	9 Months Ended
	Sep. 27, 2015
Business Combinations [Abstract]
Acquisitions and Divestitures	Acquisitions and Divestitures Acquisition of Abbott Animal Health On February 10, 2015, we completed the purchase of certain assets of Abbott Animal Health (AAH), a subsidiary of Abbott Laboratories (Abbott). AAH is a companion animal health business focused on the veterinary surgical suite. The purchase expands our companion animal product portfolio to include veterinarian solutions for anesthesia, pain management, and the diagnosis of diabetes. The $254 million purchase price included net cash of $229 million and an additional contingent payment of $25 million which is due to Abbott within one year of the acquisition date, subject to certain deductions in the event of sales disruptions due to supply issues. The range of undiscounted amounts that Zoetis could pay pursuant to this contingent consideration arrangement is between zero and $25 million , with an acquisition date fair value of $22 million . The fair value of the contingent consideration recognized as of the acquisition date was determined using a probability weighted discounted cash flow analysis that considered significant estimates and assumptions not available in the market (Level 3 inputs). The transaction was accounted for as a business combination, with the net assets acquired measured at their respective acquisition date fair values. Preliminary amounts recorded for the acquisition include $13 million of inventory, $8 million of in-process research and development (IPR&D) associated with oncology and osteoarthritis projects, $4 million of trade names related to diabetes and pain management products, $11 million of developed technology assets associated with pain management and surgical products, $15 million of other intangible assets including a favorable supply agreement and product exclusivity rights and property, plant and equipment of less than $1 million . Trade names and developed technology assets will be amortized over 15 years while other intangible assets acquired have a weighted average useful life of 5 years. Goodwill of $200 million , representing the excess of consideration transferred over the fair value of assets acquired, was allocated to our reportable segments and is predominantly attributable to synergies expected to be realized through the integration of AAH operations into the existing Zoetis business. The goodwill recorded is expected to be deductible for tax purposes. All amounts recorded are subject to final valuation, however any difference between such amounts and the final fair value determination for net assets acquired is not expected to be material to our condensed consolidated financial statements. Acquisition-related costs of the transaction were expensed as incurred and are not material to our condensed consolidated statements of income. AAH revenue and earnings occurring subsequent to the acquisition date have been included in our 2015 financial results but are not material to the condensed consolidated statements of income. Assets Held for Sale On May 5, 2015, in conjunction with the announcement of our comprehensive operational efficiency program, we announced our intent to sell or exit ten manufacturing sites over the long term. For additional information, see Note 6. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives. During the third quarter of 2015, we met the criteria for held for sale classification for two of our U.S. manufacturing sites. As of September 27, 2015, we recorded assets held for sale of $26 million , comprising inventory ( $19 million ), property, plant and equipment ( $5 million ) and goodwill ( $2 million ). We expect to finalize the sale of these sites within one year.

Restructuring Charges and Other

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives	9 Months Ended
	Sep. 27, 2015
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 In connection with our 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. 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 research and development (R&D), as well as functions such as business technology, shared services and corporate operations. On May 5, 2015, we announced a comprehensive operational efficiency program, which is incremental to the supply network strategy that was previously announced. These program’s actions are focused on reducing complexity in our product portfolios through the elimination of approximately 5,000 product stock keeping units (SKUs), changing our selling approach in certain markets and reducing our presence in certain countries, as well as planning to sell or exit ten manufacturing sites over the long term. We also plan to optimize our resource allocation and efficiency by reducing resources associated with non-customer facing commercial activities and operating more efficiently as a result of less internal complexity and more standardization of processes. As part of these initiatives, we expect to reduce certain positions through divestitures, normal attrition and involuntary terminations by approximately 2,000 to 2,500 , subject to consultations with works councils and unions in certain countries, primarily over the next 15 months. As a result of our operational efficiency initiative, we recorded restructuring charges of $8 million related to asset impairments during the three months ended September 27, 2015 , and recorded restructuring charges of $261 million related to employee termination costs ( $228 million ) and asset impairments ( $33 million ) during the nine months ended September 27, 2015 . As a result of our supply network strategy, we recorded restructuring charges of $10 million related to employee termination costs ( $9 million ) and asset impairments ( $1 million ) during the nine months ended September 27, 2015 . During the three and nine months ended September 28, 2014 , we recorded restructuring charges of $1 million and $6 million , respectively, related to employee termination costs in Europe as a result of initiatives to reduce costs and better align our organizational structure. The components of costs incurred in connection with restructuring initiatives, acquisitions and cost-reduction/productivity initiatives follow: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Restructuring charges and certain acquisition-related costs: Integration costs (a) $ 5 $ 1 $ 9 $ 5 Restructuring charges (b) : Employee termination costs — 1 237 4 Accelerated depreciation — — — 1 Asset impairment charges 8 — 34 — Total Restructuring charges and certain acquisition-related costs 13 2 280 10 Other costs associated with cost-reduction/productivity initiatives: Other operational efficiency initiative charges (c) 13 — 33 — Other supply network strategy charges (d) 3 — 13 — Total costs associated with acquisitions and cost-reduction/productivity initiatives $ 29 $ 2 $ 326 $ 10 (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 for the three and nine months ended September 27, 2015 , represent charges related to our operational efficiency initiative and supply network strategy. The restructuring charges for the three and nine months ended September 28, 2014 , include employee termination costs in Europe ( $1 million and $ 6 million , respectively). Additionally, the nine months ended September 28, 2014 , includes a reversal of a previously established reserve as a result of a change in estimate of severance costs ( $2 million benefit), and accelerated depreciation related to the exiting of a research facility ( $1 million ). The restructuring charges are associated with the following: • For the three months ended September 27, 2015 —U.S. ( $3 million benefit), International ( $2 million ) and Manufacturing/research/corporate ( $9 million ). • For the nine months ended September 27, 2015 —U.S. ( $27 million ), International ( $117 million ), and Manufacturing/research/corporate ( $127 million ). • For the three months ended September 28, 2014 —International ( $1 million ). • For the nine months ended September 28, 2014 —International ( $6 million ) and Manufacturing/research/corporate ( $1 million benefit). (c) Represents inventory write-offs of $5 million for the three and nine months ended September 27, 2015, included in Cost of Sales , and consulting fees of $8 million and $28 million for the three and nine months ended September 27, 2015, respectively, included in Selling, general and administrative expenses. (d) Primarily represents consulting fees and is included in Cost of sales. The components of, and changes in, our restructuring accruals follow: Employee Asset Termination Impairment Exit (MILLIONS OF DOLLARS) Costs Charges Costs Accrual Balance, December 31, 2014 (a) $ 18 $ — $ 1 $ 19 Provision 237 34 — 271 Utilization and other (b) (30 ) (34 ) — (64 ) Balance, September 27, 2015 (a) $ 225 $ — $ 1 $ 226 (a) At September 27, 2015 , and December 31, 2014 , included in Accrued expenses ( $157 million and $ 13 million , respectively) and Other noncurrent liabilities ( $69 million and $ 6 million , respectively). (b) Includes adjustments for foreign currency translation.

Other (Income)_Deductions - Net

Other (Income)/Deductions - Net	9 Months Ended
	Sep. 27, 2015
Other Income and Expenses [Abstract]
Other (Income)/Deductions - Net	Other (Income)/Deductions—Net The components of Other (income)/deductions—net follow: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Royalty-related income $ (5 ) $ (7 ) $ (19 ) $ (21 ) Identifiable intangible asset impairment charges (a) — 6 2 6 Net gain on sale of assets (b) — — — (6 ) Certain legal and other matters, net (c) — (1 ) — 10 Foreign currency loss (d) 6 7 18 23 Other, net (e) (3 ) (1 ) (1 ) 1 Other (income)/deductions—net $ (2 ) $ 4 $ — $ 13 (a) For the nine months ended September 27, 2015 , represents an impairment of IPR&D assets related to the termination of a canine oncology project. For the three and nine months ended September 28, 2014 , represents an impairment of IPR&D assets related to a pharmaceutical product for dogs acquired with the Fort Dodge Animal Health (FDAH) acquisition in 2009, as a result of the termination of the development program due to a re-assessment of economic viability. (b) For the nine months ended September 28, 2014 , represents the net gain on sale of land by our Taiwan joint venture. (c) For the nine months ended September 28, 2014 , represents a $13 million charge related to a commercial settlement in Mexico, partially offset by the insurance recovery of $1 million . See Note 16. Commitments and Contingencies for additional information. The nine months ended September 28, 2014 , also includes a $2 million insurance recovery of other litigation related charges. (d) Primarily driven by costs related to hedging and exposures to certain emerging market currencies. The nine months ended September 28, 2014 , also includes losses related to the depreciation of the Argentine peso in the first quarter of 2014. (e) For the three months ended September 27, 2015, primarily represents interest income and other miscellaneous income. For the nine months ended September 27, 2015 , primarily represents inventory losses of $3 million sustained as a result of weather damage at storage facilities in Brazil and Australia, partially offset by interest income and other miscellaneous income. For the nine months ended September 28, 2014 , represents a pension plan settlement charge related to the sale of a manufacturing plant, partially offset by interest income and other miscellaneous income.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 27, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes A. Taxes on Income The effective tax rate was 30.4% for the third quarter of 2015 , compared with 29.8% for the third quarter of 2014 . The higher effective tax rate for the third quarter of 2015 was primarily attributable to changes in the jurisdictional mix of earnings, which includes the impact of the location of earnings (i) from operations and (ii) from restructuring charges related to the operational efficiency initiative and supply network strategy, as well as repatriation costs. The effective tax rate was 33.0% for the nine months ended September 27, 2015 , compared with 30.7% for the nine months ended September 28, 2014 . The higher effective tax rate for the nine months ended September 27, 2015 , was primarily attributable to: • changes in the jurisdictional mix of earnings, which includes the impact of the location of earnings from (i) operations and (ii) restructuring charges related to the operational efficiency initiative and supply network strategy, as well as repatriation costs; and • a valuation allowance of $3 million recorded in the second quarter of 2015; partially offset by: • a $9 million discrete tax benefit recorded in the first quarter of 2015 related to a revaluation of deferred taxes as a result of a change in tax rates; and • a $6 million discrete tax benefit recorded in the second quarter of 2015 related to prior period tax adjustments. B. Deferred Taxes As of September 27, 2015 , the total net deferred income tax liability of $ 48 million is included in Current deferred tax assets ($ 127 million ), Noncurrent deferred tax assets ($ 58 million ), Accrued expenses ($ 6 million ) and Noncurrent deferred tax liabilities ($ 227 million ). As of December 31, 2014, the total net deferred income tax liability of $ 125 million is included in Current deferred tax assets ($ 109 million ), Noncurrent deferred tax assets ($ 54 million ), Accrued expenses ($ 11 million ) and Noncurrent deferred tax liabilities ($ 277 million ). C. Tax Contingencies As of September 27, 2015 , the tax liabilities associated with uncertain tax positions of $60 million (exclusive of interest and penalties related to uncertain tax positions of $ 8 million ) are included in Noncurrent deferred tax assets ($ 6 million ) and Other taxes payable ($ 54 million ). As of December 31, 2014, the tax liabilities associated with uncertain tax positions of $54 million (exclusive of interest and penalties related to uncertain tax positions of $ 8 million ) are included in Noncurrent deferred tax assets ($ 6 million ) and Other taxes payable ($ 48 million ). Our tax liabilities for uncertain tax positions relate primarily to issues common among multinational corporations. Any settlements or statute of limitations expirations could result in a significant decrease in our uncertain tax positions. Substantially all of these unrecognized tax benefits, if recognized, would impact our effective income tax rate. We do not expect that within the next twelve months any of our uncertain tax positions 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 uncertain tax positions 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 changes related to our uncertain tax positions, and such changes could be significant.

Financial Instruments

Financial Instruments	9 Months Ended
	Sep. 27, 2015
Financial Instruments [Abstract]
Financial Instruments	Financial Instruments 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 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 September 27, 2015 , and December 31, 2014 . There were no amounts drawn under the credit facility as of September 27, 2015 , or December 31, 2014 . We have additional lines of credit and other credit arrangements 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 September 27, 2015 , we had access to $79 million of lines of credit which expire at various times through 2017. Short-term borrowings outstanding related to these facilities were $8 million and $7 million as of September 27, 2015 , and December 31, 2014 , respectively. Long-term borrowings outstanding related to these facilities were $2 million and $3 million as of September 27, 2015 , and December 31, 2014 , respectively. Commercial Paper Program In February 2013 , we entered into a commercial paper program with a capacity of up to $1.0 billion . As of September 27, 2015 , and December 31, 2014 , there was no commercial paper issued under this program. Short-Term Borrowings As of September 27, 2015 , short-term borrowings outstanding related to credit facilities were $8 million , with a weighted-average interest rate of 6.0% . As of December 31, 2014 , short-term borrowings outstanding related to credit facilities were $ 7 million , with a weighted-average interest rate of 9.7% . See Credit Facilities for additional information. 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 . The current portion of long-term debt was $400 million as of September 27, 2015 , with a weighted-average interest rate of 1.150% . There was no current portion of long-term debt as of December 31, 2014 . 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. The components of our long-term debt follow: September 27, December 31, (MILLIONS OF DOLLARS) 2015 2014 Lines of credit, due 2016-2018 $ 2 $ 3 1.150% Senior Notes due 2016 400 400 1.875% Senior Notes due 2018 750 750 3.250% Senior Notes due 2023 1,350 1,350 4.700% Senior Notes due 2043 1,150 1,150 3,652 3,653 Unamortized debt discount / debt issuance costs (26 ) (29 ) Less current portion of long-term debt (400 ) — Long-term debt $ 3,226 $ 3,624 The fair value of our long-term debt, including the current portion of long-term debt, was $3,465 million and $3,690 million as of September 27, 2015 , and December 31, 2014 , respectively, 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). The principal amount of long-term debt outstanding, including the current portion of long-term debt, as of September 27, 2015 , matures in the following years: After (MILLIONS OF DOLLARS) 2016 2017 2018 2019 2020 2020 Total Maturities $ 401 $ — $ 751 $ — $ — $ 2,500 $ 3,652 Interest Expense Interest expense, net of capitalized interest, was $ 29 million and $86 million for the three and nine months ended September 27, 2015 , respectively, and $29 million and $87 million for the three and nine months ended September 28, 2014 , respectively. Capitalized interest was $ 1 million and $3 million for the both the three and nine months ended September 27, 2015 , and September 28, 2014 , respectively. 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. 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. The aggregate notional amount of foreign exchange derivative financial instruments offsetting foreign currency exposures was $1.3 billion and $1.1 billion , as of September 27, 2015 , and December 31, 2014 , respectively. The derivative financial instruments primarily offset exposures in the euro, U.K. pound, and Japanese Yen. 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 condensed 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. Interest Rate Risk The company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rates and to reduce its overall cost of borrowing. In anticipation of issuing fixed-rate debt, we may use forward-starting interest rate swaps that are designated as cash flow hedges to hedge against changes in interest rates that could impact expected future issuances of debt. To the extent these hedges of cash flows related to anticipated debt are effective, any unrealized gains or losses on the forward-starting interest rate swaps are reported in Accumulated other comprehensive loss and are recognized in income over the life of the future fixed-rate notes. When the company discontinues hedge accounting because it is no longer probable that an anticipated transaction will occur within the originally expected period of execution, or within an additional two-month period thereafter, changes to fair value accumulated in other comprehensive income are recognized immediately in earnings. In the third quarter of 2015, we entered into four interest rate swaps with an aggregate notional value of $300 million . We designated these swaps as cash flow hedges against interest rate exposure related principally to the anticipated future issuance of fixed-rate debt to be used primarily to refinance our 1.150% senior notes due in 2016. Contracts outstanding at September 27, 2015, have a mandatory termination within three months . Fair Value of Derivative Instruments The location and fair values of derivative instruments are as follows: Fair Value of Derivatives September 27, December 31, (MILLIONS OF DOLLARS) Balance Sheet Location 2015 2014 Derivatives Designated as Hedging Instruments: Interest rate swap contracts Other current liabilities $ (6 ) $ — Total derivatives designated as hedging instruments (6 ) — Derivatives Not Designated as Hedging Instruments Foreign currency forward-exchange contracts Other current assets $ 18 $ 9 Foreign currency forward-exchange contracts Other current liabilities (9 ) (4 ) Total derivatives not designated as hedging instruments $ 9 $ 5 Total derivatives $ 3 $ 5 We use a market approach in valuing financial instruments on a recurring basis. Our derivative financial instruments are measured at fair value on a recurring basis using Level 2 inputs in the calculation of fair value. The amount of losses on derivative instruments designated as cash flow hedges, recorded, net of tax, in Accumulated other comprehensive loss , are as follows: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Interest rate swap contracts $ (3 ) $ — $ (3 ) $ — The amounts of gains/(losses) on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions , are as follows: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Foreign currency forward-exchange contracts $ 18 $ (1 ) $ 24 $ (1 ) These amounts were substantially offset in Other (income)/deductions—net by the effect of changing exchange rates on the underlying foreign currency exposures.

Inventories

Inventories	9 Months Ended
	Sep. 27, 2015
Inventory Disclosure [Abstract]
Inventories	Inventories The components of inventory follow: September 27, December 31, (MILLIONS OF DOLLARS) 2015 2014 Finished goods $ 682 $ 688 Work-in-process 360 340 Raw materials and supplies 361 261 Inventories $ 1,403 $ 1,289

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	9 Months Ended
	Sep. 27, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	Goodwill and Other Intangible Assets A. Goodwill Prior to the second quarter of 2015, our businesses were managed through four operating segments, and they are now managed through two operating segments: U.S. and International. See Note 17. Segment and Other Revenue Information for additional information. The components of, and changes in, the carrying amount of goodwill follow: (MILLIONS OF DOLLARS) U.S. International Total Balance, December 31, 2014 $ 501 $ 475 $ 976 Additions (a) 164 38 202 Other (b) — (15 ) (15 ) Balance, September 27, 2015 $ 665 $ 498 $ 1,163 (a) Primarily reflects the allocation to reportable segments of goodwill associated with the acquisition of certain assets of Abbott Animal Health (amounts recorded are preliminary and subject to final valuation). For additional information, see Note 5. Acquisitions and Divestitures — Acquisition of Abbott Animal Health. (b) Includes adjustments for foreign currency translation, as well as a reclassification adjustment of $2 million to Assets held for sale. For additional information associated with this pending sale, see Note 5. Acquisitions and Divestitures — Assets Held for Sale . The gross goodwill balance was $1,699 million and $1,512 million as of September 27, 2015 , and December 31, 2014 , respectively. Accumulated goodwill impairment losses (generated entirely in fiscal 2002) were $536 million as of September 27, 2015 , and December 31, 2014 . B. Other Intangible Assets The components of identifiable intangible assets follow: As of September 27, 2015 As of December 31, 2014 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 (a) $ 716 $ (287 ) $ 429 $ 744 $ (259 ) $ 485 Brands 212 (119 ) 93 216 (111 ) 105 Trademarks and trade names (a) 63 (43 ) 20 60 (41 ) 19 Other (a) 133 (118 ) 15 119 (116 ) 3 Total finite-lived intangible assets 1,124 (567 ) 557 1,139 (527 ) 612 Indefinite-lived intangible assets: Brands 39 — 39 38 — 38 Trademarks and trade names 67 — 67 67 — 67 In-process research and development (a) 8 — 8 2 — 2 Product rights 8 — 8 8 — 8 Total indefinite-lived intangible assets 122 — 122 115 — 115 Identifiable intangible assets $ 1,246 $ (567 ) $ 679 $ 1,254 $ (527 ) $ 727 (a) Includes the acquisition of intangible assets associated with the purchase of certain assets of Abbott Animal Health in the first quarter of 2015 (amounts recorded are preliminary and subject to final valuation), as well as the impact of foreign exchange. For additional information, see Note 5. Acquisitions and Divestitures — Acquisition of Abbott Animal Health . C. Amortization Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property is included in Amortization of intangible assets as it benefits multiple business functions. Amortization expense related to acquired intangible assets that are associated with a single function is included in Cost of sales, Selling, general and administrative expenses or Research and development expenses , as appropriate. Total amortization expense for finite-lived intangible assets was $16 million and $47 million for the three and nine months ended September 27, 2015 , respectively, and $15 million and $47 million for the three and nine months ended September 28, 2014 , respectively.

Benefit Plans

Benefit Plans	9 Months Ended
	Sep. 27, 2015
Compensation and Retirement Disclosure [Abstract]
Benefit Plans	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. 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. Pension and postretirement benefit expense associated with the extended service for certain employees in the U.S. plans totaled approximately $2 million in each three month period ended September 27, 2015 , and September 28, 2014 , respectively, and approximately $5 million in each nine month period ended September 27, 2015 , and September 28, 2014 , respectively. As part of the Separation (see Note 2. The Separation and Transactions and Agreements with Pfizer ), certain separation adjustments were made to transfer the assets and liabilities of certain international defined benefit pension plans from Pfizer to Zoetis. During the first nine months of 2014, our pension plans in Australia, Japan and Switzerland were transferred to us from Pfizer. The net pension obligation (approximately $3 million ) and the related accumulated other comprehensive loss (approximately $3 million , net of tax) associated with these plans were recorded. During the remainder of 2014, our pension plan in Belgium was also transferred to us from Pfizer. During the third quarter of 2015, our pension plan in the Philippines was transferred to us from Pfizer. The net pension obligation (approximately $1 million ) and the related accumulated other comprehensive loss (which was less than $1 million , net of tax) associated with this plan were recorded. Prior to the Separation and transfer, these benefit plans were accounted for as multi-employer plans. The following table provides the net periodic benefit cost associated with dedicated pension plans (including those transferred to us): Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Service cost $ 2 $ 1 $ 6 $ 3 Interest cost 1 1 3 2 Expected return on plan assets (1 ) — (2 ) — Amortization of net actuarial loss — — 1 — Settlement loss (a) 1 — 1 4 Net periodic benefit cost $ 3 $ 2 $ 9 $ 9 (a) The nine months ended September 28, 2014 includes a first quarter settlement charge of approximately $4 million ($ 3 million , net of tax) associated with the 2012 sale of our Netherlands manufacturing facility. Total company contributions to the dedicated international pension plans were $ 3 million and $6 million for the three and nine months ended September 27, 2015 , respectively, and $1 million and $3 million for the three and nine months ended September 28, 2014 , respectively. We expect to contribute a total of approximately $8 million to these plans in 2015. Pension expense associated with international benefit plans accounted for as multi-employer plans was approximately $ 1 million and $4 million for the three months and nine months ended September 28, 2014 , respectively. Contributions to these plans were approximately $ 1 million and $3 million for the three and nine months ended September 28, 2014 , respectively. There were no plans accounted for as multi-employer plans in 2015.

Share-Based Payments

Share-Based Payments	9 Months Ended
	Sep. 27, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Payments	Share-Based Payments The company may grant a variety of share-based payments under the Zoetis 2013 Equity and Incentive Plan (the Equity Plan) to employees and non-employee directors. The principal types of share-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 share unit awards (PSUs) and other equity-based or cash-based awards. The components of share-based compensation expense follow: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Stock options / stock appreciation rights $ 3 $ 5 $ 14 $ 12 RSUs / DSUs 6 4 15 10 PSUs 1 — 2 — Share-based compensation expense—total (a) $ 10 $ 9 $ 31 $ 22 (a) For the three and nine months ended September 27, 2015 , we capitalized $1 million of share-based compensation expense to inventory. During the nine months ended September 27, 2015 , the company granted 862,403 stock options with a weighted-average exercise price of $46.01 per stock option and a weighted-average fair value of $11.70 per option. 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. The expected volatility assumption required for the Black-Scholes-Merton model for the 2015 grant was calculated using a 2-year historical volatility of the Zoetis stock price and weighting it equally against the implied volatility. Prior to 2015, the company had used an implied volatility. The selection of the blended historical and implied volatility approach was based on our assessment that this calculation of expected volatility is more representative of future stock price trends. The weighted-average fair value was estimated based on the following assumptions: risk-free interest rate of 1.79% ; expected dividend yield of 0.72% ; expected stock price volatility of 23.92% ; and expected term of 6.5 years. 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. During the nine months ended September 27, 2015 , the company granted 710,966 RSUs with a weighted-average grant date fair value of $ 46.06 per RSU. 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. During the nine months ended September 27, 2015 , the company granted 157,130 PSUs with a weighted-average grant date fair value of $63.14 per PSU. PSUs are accounted for using a Monte Carlo simulation model. The units underlying the PSUs will be earned and vested over a three-year performance period, based upon the total shareholder return of the company in comparison to the total shareholder return of the companies comprising the S&P 500 index at the start of the performance period (Relative TSR). The weighted-average fair value was estimated based on volatility assumptions of Zoetis common stock and an average of peer companies, which were 21.8% and 23.5% , respectively. Depending on the company’s Relative TSR performance at the end of the performance period, the recipient may earn between 0% and 200% of the target number of units. Vested units are settled in shares of the company’s common stock. PSU 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. As a result of our operational efficiency initiative and supply network strategy, the company accelerated the vesting, and in some cases the settlement on a pro-rata basis, of outstanding RSUs of terminated employees, subject, in each case, to the requirements of Section 409A of the U.S. Internal Revenue Code, the terms of the Equity Plan and the applicable award agreements, and any outstanding deferral elections. Generally, unvested stock options previously granted to terminated employees accelerated in full, and employees generally have the ability to exercise the stock options for three months after termination. Zoetis employees who held stock options and were retirement eligible as of their termination date generally have the full term of the stock option to exercise. In addition, outstanding PSUs of terminated employees vested on a pro-rata basis will be settled on or after the third anniversary of the grant date, subject to the achievement of performance goals. The unvested portion of RSUs and PSAs were forfeited. The accelerated vesting of the outstanding stock options and the settlement, on a pro-rata basis, of other equity awards resulted in the recognition of additional stock-based compensation expense for the three and nine months ended September 27, 2015 , of approximately $1 million , which is included in Restructuring charges and certain acquisition-related costs .

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 27, 2015
Equity [Abstract]
Stockholders' Equity	Stockholders' Equity Zoetis is authorized to issue 6,000,000,000 shares of common stock and 1,000,000,000 shares of preferred stock. Changes in common shares and treasury stock were as follows: (MILLIONS OF DOLLARS AND SHARES) Common Shares Issued (a) Treasury Stock (a) Cost of Treasury Stock Balance, December 31, 2013 500.008 — $ — Stock-based compensation (b) 0.100 0.014 0.4 Defined contribution plan 1.102 — — Balance, September 28, 2014 501.209 0.014 $ 0.4 Balance, December 31, 2014 501.342 0.015 $ 0.5 Stock-based compensation (b) 0.231 0.037 1.5 Share repurchase program (c) — 3.189 148.1 Balance, September 27, 2015 501.574 3.240 $ 150.1 (a) Shares may not add due to rounding. (b) Treasury shares associated with stock-based compensation are reacquired from employees to satisfy tax withholding requirements on the vesting of restricted shares from equity-based awards. For additional information regarding share-based compensation, see Note 13. Share-Based Payments. (c) In November 2014, the company's Board of Directors authorized a $500 million share repurchase program. Purchases of Zoetis shares may be made at the discretion of management, depending on market conditions and business needs. As of September 27, 2015 , there was approximately $352 million remaining under this authorization. Changes, net of tax, in accumulated other comprehensive loss, excluding noncontrolling interest, follow: Currency Translation Derivatives Adjustment Benefit Plans Accumulated Other Net Unrealized Net Unrealized Actuarial Comprehensive (MILLIONS OF DOLLARS) Gains/(Losses) Gains/(Losses) Gains/(Losses) Loss Balance, December 31, 2014 $ — $ (336 ) $ (25 ) $ (361 ) Other comprehensive income (loss), net of tax (3 ) (199 ) 1 (201 ) Balance, September 27, 2015 $ (3 ) $ (535 ) $ (24 ) $ (562 )

Earnings per Share

Earnings per Share	9 Months Ended
	Sep. 27, 2015
Earnings Per Share [Abstract]
Earnings per Share	Earnings per Share The following table presents the calculation of basic and diluted earnings per share: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA) 2015 2014 2015 2014 Numerator Net income before allocation to noncontrolling interests $ 190 $ 167 $ 319 $ 461 Less: net income attributable to noncontrolling interests 1 1 2 4 Net income attributable to Zoetis Inc. $ 189 $ 166 $ 317 $ 457 Denominator Weighted-average common shares outstanding 499.239 501.453 500.186 500.887 Common stock equivalents: stock options, RSUs, PSUs and DSUs 2.414 0.992 2.294 0.723 Weighted-average common and potential dilutive shares outstanding 501.653 502.445 502.480 501.610 Earnings per share attributable to Zoetis Inc. stockholders—basic $ 0.38 $ 0.33 $ 0.63 $ 0.91 Earnings per share attributable to Zoetis Inc. stockholders—diluted $ 0.38 $ 0.33 $ 0.63 $ 0.91 There were approximately 0.9 million and 0.7 million stock options outstanding for the three and nine months ended September 27, 2015 , respectively, and 3 million and 2 million stock options outstanding for the three and nine months ended September 28, 2014 , respectively, under the company’s Equity Plan that were excluded from the computation of diluted earnings per share, as the effect would have been anti-dilutive.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 27, 2015
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. Income Taxes . 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. PregSure ® We have received in total approximately 255 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 continued. 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 more than half 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. 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, in April 2012, the lawsuit was suspended for one year. 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. On October 3, 2014, the Municipal prosecutor announced that the investigation remained ongoing and outlined the terms of a proposed Term of Reference (a document that establishes the minimum elements to be addressed in the preparation of an Environmental Impact Assessment), under which the companies would be liable to withdraw the waste and remediate the area. On March 5, 2015, we presented our response to the prosecutor’s proposed Term of Reference, arguing that the proposed terms were overly general in nature, and expressing our interest in discussing alternatives to address the matter. The prosecutor agreed to consider our request to engage a technical consultant to conduct an environmental diagnostic of the contaminated area. On May 29, 2015, we, in conjunction with the other defendant companies, submitted a draft cooperation agreement to the prosecutor, which outlined the proposed terms and conditions for the engagement of a technical consultant to conduct the environmental diagnostic. The prosecutor, however, denied the proposal and reiterated his request that each defendant agree to become a signatory to the Term of Reference, as originally proposed. On October 5, 2015, we informed the prosecutor of our decision not to sign the Term Reference and requested a face-to-face meeting to clarify the scope and methodology of the preliminary assessment, to understand the exact reasons for the rejection of our proposal to engage a technical consultant, and to discuss alternative scenarios. The prosecutor granted our request and scheduled the face-to-face meeting for November 6, 2015. Lascadoil Contamination in Animal Feed An investigation by the U.S. Food and Drug Administration (FDA) and the Michigan Department of Agriculture is ongoing to determine how lascadoil, oil for industrial use, made its way into the feed supply of certain turkey and hog feed mills in Michigan. The contaminated feed is believed to have caused the deaths of approximately 50,000 turkeys and the contamination (but not death) of at least 20,000 hogs in August 2014. While it remains an open question as to how the lascadoil made its way into the animal feed, the allegations are that lascadoil intended to be sold for reuse as biofuel was inadvertently sold to producers of soy oil, who in turn unknowingly sold the contaminated soy oil to fat recycling vendors, who then sold the contaminated soy oil to feed mills for use in animal feed. Indeed, related to the FDA investigation, Shur-Green Farms LLC, a producer of soy oil, recalled certain batches of soy oil allegedly contaminated with lascadoil on October 13, 2014. During the course of its investigation, the FDA identified the process used to manufacture Zoetis’ Avatec® (lasalocid sodium) and Bovatec® (lasalocid sodium) products as one possible source of the lascadoil, since lascadoil contains small amounts of lasalocid, the active ingredient found in both products. Zoetis has historically sold any and all industrial lascadoil byproduct to an environmental company specializing in waste disposal. The environmental company is contractually obligated to incinerate the lascadoil or resell it for use in biofuel. Under the terms of the agreement, the environmental company is expressly prohibited from reselling the lascadoil to be used as a component in food. The FDA inspected the Zoetis site where Avatec and Bovatec are manufactured, and found no evidence that Zoetis was involved in the contamination of the animal feed. On March 10, 2015, plaintiffs Restaurant Recycling, LLC (Restaurant Recycling) and Superior Feed Ingredients, LLC (Superior), both of whom are in the fat recycling business, filed a complaint against Shur-Green Farms alleging negligence and breach of warranty claims arising from their purchase of soy oil allegedly contaminated with lascadoil. Plaintiffs resold the allegedly contaminated soy oil to turkey feed mills for use in feed ingredient. Plaintiffs also named Zoetis as a defendant in the complaint alleging that Zoetis failed to properly manufacture its products and breached an implied warranty that the soy oil was fit for use at turkey and hog mills. Zoetis was served with the complaint on June 3, 2015, and we filed our answer, denying all allegations, on July 15, 2015. On August 10, 2015, several of the turkey feed mills filed a joint complaint against Restaurant Recycling, Superior, Shur-Green Farms and others, alleging claims for negligence, misrepresentation, and breach of warranty, arising out of their alleged purchase and use of the contaminated soy oil. The complaint also named Zoetis as a defendant, but failed to raise any claims against Zoetis directly. The turkey-mill plaintiffs have attempted to address that deficiency by recently filing an amended complaint, and we are in the process of preparing our answer. We believe we have strong arguments against all claims and do not believe there is any liability on the part of Zoetis. 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 Alpharma, LLC, formerly having the name Alpharma Inc. Alpharma, 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; the appeal remains pending. In July 2014, we reached a commercial settlement with several large poultry customers in Mexico associated with specific lots of a Zoetis poultry vaccine. Although there have been no quality or efficacy issues with the manufacturing of this vaccine, certain shipments from several lots in Mexico may have experienced an issue in storage with a third party in Mexico that could have impacted their efficacy. We issued a recall of these lots in July 2014 and the product is currently unavailable in Mexico. We recorded a $13 million charge in Other (income)/deductions—net in the second quarter of 2014, and we do not expect any significant additional charges related to this issue. In the third quarter of 2014, we were notified of an insurance recovery of $1 million and have recorded this in Other (income)/deductions—net . On March 30, 2015, we were served with a complaint filed in the U.S. District Court for the Eastern District of Pennsylvania by two additional customers in Mexico, alleging damages suffered as a result of the use of poultry vaccines obtained from the recalled lots discussed above. We have moved to dismiss the complaint in its entirety on grounds that the complaint fails to properly state a claim on which relief can be granted. On September 16, 2015, the Court granted the motion in part and denied it in part, dismissing all claims arising out of tort or fraud. As a result, the only claims remaining in the lawsuit are based in contract, namely breach of express warranty, breach of certain implied warranties, and unjust enrichment. 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 September 27, 2015 , recorded amounts for the estimated fair value of these indemnifications were not significant.

Segment and Other Revenue Infor

Segment and Other Revenue Information	9 Months Ended
	Sep. 27, 2015
Segment Reporting [Abstract]
Segment and Other Revenue Information	Segment and Other Revenue Information A. Segment Information In the second quarter of 2015, we changed our segment reporting structure to reflect the way management makes operating decisions. We consolidated our prior Europe/Africa/Middle East (EuAfME), Canada/Latin America (CLAR) and Asia/Pacific (APAC) operating segments into one operating segment. As a result, the company's new segment reporting structure consists of two reportable segments: the United States and International. We also recategorized certain costs that are not allocated to our operating segments. There has been no change in our total condensed consolidated financial condition or results of operations previously reported as a result of the change in our segment structure. The prior period presentation has been revised to reflect the new segment reporting structure. We manage our operations through two geographic regions. Each operating segment has responsibility for its commercial activities. Within each of these 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 Our operating segments are the United States and International. Our chief operating decision maker uses the revenue and earnings of the two 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 includes our Client Supply Services (CSS) contract manufacturing results, as well as 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. Other R&D-related costs associated with non-U.S. market and regulatory activities are generally included in the international commercial segment. • Corporate , which is responsible for platform functions such as business technology, facilities, legal, finance, human resources, business development, and communications, 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 includes non-acquisition-related restructuring charges, certain asset impairment charges, stand-up costs and costs associated with cost reduction/productivity initiatives. • Other unallocated includes (i) certain overhead expenses associated with our global manufacturing operations not charged to our operating segments; (ii) certain costs associated with business technology and finance that specifically support our global manufacturing operations; (iii) certain supply chain and global logistics costs; and (iv) procurement costs. 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 $ 6.7 billion at September 27, 2015 , and $6.6 billion at December 31, 2014 . Selected Statement of Income Information Earnings Depreciation and Amortization (a) September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Three months ended U.S. Revenue $ 632 $ 532 Cost of Sales 147 126 Gross Profit 485 406 Gross Margin 76.7 % 76.3 % Operating Expenses 100 93 Other (income)/deductions (1 ) — U.S. Earnings 386 313 $ 5 $ 7 International Revenue (b) 569 666 Cost of Sales 209 241 Gross Profit 360 425 Gross Margin 63.3 % 63.8 % Operating Expenses 137 168 Other (income)/deductions 4 2 International Earnings 219 255 10 13 Total operating segments 605 568 15 20 Other business activities (c) (73 ) (76 ) 6 7 Reconciling Items: Corporate (d) (138 ) (142 ) 9 7 Purchase accounting adjustments (e) (13 ) (13 ) 14 13 Acquisition-related costs (f) (6 ) (1 ) — — Certain significant items (g) (46 ) (38 ) 1 1 Other unallocated (h) (56 ) (60 ) 1 2 Total Earnings (i) $ 273 $ 238 $ 46 $ 50 Earnings Depreciation and Amortization (a) September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Nine months ended U.S. Revenue $ 1,692 $ 1,470 Cost of Sales 399 343 Gross Profit 1,293 1,127 Gross Margin 76.4 % 76.7 % Operating Expenses 274 278 Other (income)/deductions (1 ) — U.S. Earnings 1,020 849 $ 18 $ 24 International Revenue (b) 1,762 1,956 Cost of Sales 638 701 Gross Profit 1,124 1,255 Gross Margin 63.8 % 64.2 % Operating Expenses 423 490 Other (income)/deductions 10 5 International Earnings 691 760 34 38 Total operating segments 1,711 1,609 52 62 Other business activities (c) (208 ) (224 ) 19 21 Reconciling Items: Corporate (d) (392 ) (389 ) 28 21 Purchase accounting adjustments (e) (41 ) (38 ) 39 38 Acquisition-related costs (f) (11 ) (5 ) — — Certain significant items (g) (406 ) (127 ) 3 4 Other unallocated (h) (177 ) (161 ) 3 5 Total Earnings (i) $ 476 $ 665 $ 144 $ 151 (a) 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. (b) Revenue denominated in euros was $139 million and $425 million for the three and nine months ended September 27, 2015 , respectively, and $175 million and $525 million for the three and nine months ended September 28, 2014 , respectively. (c) Other business activities reflects the R&D costs managed by our Research and Development organization, as well as revenue and expenses related to our contract manufacturing business. (d) Corporate includes, among other things, administration expenses, interest expense, certain compensation and other costs not charged to our operating segments. (e) Purchase accounting adjustments includes certain charges related to intangible assets and property, plant and equipment not charged to our operating segments, and the fair value adjustments to acquired inventory. (f) 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 . (g) Certain significant items includes substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items primarily include certain costs related to becoming an independent public company, restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition, certain legal and commercial settlements and the impact of divestiture-related gains and losses. • For the third quarter of 2015, Certain significant items primarily includes: (i) Zoetis stand-up costs of $22 million ; and (ii) charges related to our operational efficiency initiative and supply network strategy of $24 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, and certain legal registration and patent assignment costs. • For the third quarter of 2014, Certain significant items primarily includes: (i) Zoetis stand-up costs of $32 million ; (ii) intangible asset impairment charges related to an IPR&D project acquired with the FDAH acquisition in 2009 of $6 million ; and (iii) restructuring charges of $1 million related to employee severance costs in Europe. • For the nine months ended September 27, 2015 , Certain significant items primarily includes: (i) Zoetis stand-up costs of $84 million ; (ii) charges related to our operational efficiency initiative and supply network strategy of $317 million ; (iii) an impairment of IPR&D assets of $2 million related to the termination of a canine oncology project; and (iv) charges due to unusual investor-related activities of $3 million . • For the nine months ended September 28, 2014 , Certain significant items primarily includes: (i) Zoetis stand-up costs of $106 million ; (ii) charges related to a commercial settlement in Mexico of $13 million , partially offset by the insurance recovery of $1 million income; (iii) restructuring charges of $6 million related to employee severance costs in Europe, partially offset by a $2 million benefit related to a reversal of a previously established reserve as a result of a change in estimate of severance costs; (iv) intangible asset impairment charges related to an IPR&D project acquired with the FDAH acquisition in 2009 of $6 million ; (v) the Zoetis portion of a net gain on the sale of land by our Taiwan joint venture of $3 million ; (vi) additional depreciation associated with asset restructuring of $1 million ; (vii) a pension plan settlement charge related to the divestiture of a manufacturing plant of $4 million ; and (viii) an insurance recovery of litigation-related charges of $2 million income. (h) Includes overhead expenses associated with our manufacturing and supply operations, as well as procurement costs. (i) Defined as income before provision for taxes on income. B. Other Revenue Information Revenue by Species Significant species revenue are as follows: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Livestock: Cattle $ 432 $ 437 $ 1,201 $ 1,207 Swine 163 179 495 496 Poultry 132 147 399 428 Other 23 27 60 68 750 790 2,155 2,199 Companion Animal: Horses 35 38 117 127 Dogs and Cats 416 370 1,182 1,100 451 408 1,299 1,227 Contract Manufacturing 13 12 37 39 Total revenue $ 1,214 $ 1,210 $ 3,491 $ 3,465 Revenue by Major Product Category Significant revenue by major product category are as follows: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Anti-infectives $ 348 $ 356 $ 938 $ 965 Vaccines 301 308 858 886 Parasiticides 158 178 504 528 Medicated feed additives 124 124 364 337 Other pharmaceuticals 226 200 650 598 Other non-pharmaceuticals 44 32 140 112 Contract manufacturing 13 12 37 39 Total revenue $ 1,214 $ 1,210 $ 3,491 $ 3,465

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 27, 2015
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On November 2, 2015, we announced an agreement to purchase PHARMAQ, an animal health company specializing in aquatic health, based in Oslo, Norway, for $765 million (adjusted to reflect working capital and net indebtedness as of the closing date). The company generated revenue of approximately $80 million in 2014 and markets its products in the major fish-producing markets. We expect to complete the acquisition in the fourth quarter of 2015 and we intend on drawing on our revolving credit facility to finance the transaction. Also on November 2, 2015, we amended a financial covenant in our existing $1 billion revolving credit facility mentioned above to increase the existing maximum total leverage ratio from 3.50:1 to 4.25:1 only upon entering into a material acquisition, as defined. The amended ratio extends until the fourth full consecutive fiscal quarter ended immediately following the consummation of a material acquisition. See Note 9A. Financial Instruments — Debt: Credit Facilities for additional information regarding the existing facility and leverage ratio.

Significant Accounting Polici27

Significant Accounting Policies Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 27, 2015
Accounting Policies [Abstract]
New Accounting Standards	New Accounting Standards In September 2015, the Financial Accounting Standards Board (FASB) issued an accounting standards update to simplify the accounting for measurement period adjustments recorded during the one-year period following a business combination. The update removes the requirement for an acquirer in a business combination to account for measurement period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which the amount of the adjustment is determined. The provisions of the new standard are effective beginning January 1, 2016, for annual and interim periods. The guidance will be adopted prospectively and early adoption is permitted. We are currently assessing whether or not to early adopt this guidance. In July 2015, the FASB issued an accounting standards update to simplify the measurement of inventory by requiring that inventory be measured at the lower of cost or net realizable value, rather than at the lower of cost or market, with market being defined as either replacement cost, net realizable value or net realizable value less a normal profit margin. The provisions of the new standard are effective beginning January 1, 2017, for annual and interim reporting periods. The guidance will be adopted prospectively and early adoption is permitted. We are currently assessing the potential impact that the adoption of this guidance will have on our consolidated financial statements, as well as whether or not to early adopt this guidance. In April 2015, the FASB issued an accounting standards update that requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, rather than as a deferred charge (i.e., an asset). Debt issuance costs associated with line-of-credit arrangements may continue to be recognized as a deferred charge. We have elected to adopt this new guidance, effective for the period ended September 27, 2015 . As such, debt issuance costs, associated with Zoetis senior notes of approximately $17 million and $19 million as of September 27, 2015 and December 31, 2014 , respectively, previously recorded within Other noncurrent assets are now presented as a direct deduction from the carrying amount of the related debt liability. In February 2015, the FASB issued an accounting standards update that provides revised guidance on whether to consolidate certain legal entities, such as limited partnerships, limited liability corporations and securitization structures. We plan to adopt this guidance as of January 1, 2016, the required effective date, and do not expect this guidance to have a significant impact on our consolidated financial statements. In May 2014, the FASB issued an accounting standards update that outlines a new, single comprehensive model for companies to use in accounting for revenue arising from contracts with customers. This update supersedes most current revenue recognition guidance under U.S. GAAP. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance includes a five-step model for determining how, when and how much revenue should be recognized. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB issued a one year deferral of the effective date. The provisions of the new standard are now effective for Zoetis beginning January 1, 2018, for annual and interim reporting periods. Early adoption is permitted beginning on January 1, 2017. The new standard allows for either full retrospective or modified retrospective transition upon adoption. We continue to assess the transition method we will elect for adoption as well as the potential impact that adopting this new guidance will have on our consolidated financial statements.

Restructuring Charges and Oth28

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Tables)	9 Months Ended
	Sep. 27, 2015
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: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Restructuring charges and certain acquisition-related costs: Integration costs (a) $ 5 $ 1 $ 9 $ 5 Restructuring charges (b) : Employee termination costs — 1 237 4 Accelerated depreciation — — — 1 Asset impairment charges 8 — 34 — Total Restructuring charges and certain acquisition-related costs 13 2 280 10 Other costs associated with cost-reduction/productivity initiatives: Other operational efficiency initiative charges (c) 13 — 33 — Other supply network strategy charges (d) 3 — 13 — Total costs associated with acquisitions and cost-reduction/productivity initiatives $ 29 $ 2 $ 326 $ 10 (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 for the three and nine months ended September 27, 2015 , represent charges related to our operational efficiency initiative and supply network strategy. The restructuring charges for the three and nine months ended September 28, 2014 , include employee termination costs in Europe ( $1 million and $ 6 million , respectively). Additionally, the nine months ended September 28, 2014 , includes a reversal of a previously established reserve as a result of a change in estimate of severance costs ( $2 million benefit), and accelerated depreciation related to the exiting of a research facility ( $1 million ). The restructuring charges are associated with the following: • For the three months ended September 27, 2015 —U.S. ( $3 million benefit), International ( $2 million ) and Manufacturing/research/corporate ( $9 million ). • For the nine months ended September 27, 2015 —U.S. ( $27 million ), International ( $117 million ), and Manufacturing/research/corporate ( $127 million ). • For the three months ended September 28, 2014 —International ( $1 million ). • For the nine months ended September 28, 2014 —International ( $6 million ) and Manufacturing/research/corporate ( $1 million benefit). (c) Represents inventory write-offs of $5 million for the three and nine months ended September 27, 2015, included in Cost of Sales , and consulting fees of $8 million and $28 million for the three and nine months ended September 27, 2015, respectively, included in Selling, general and administrative expenses. (d) Primarily represents consulting fees and is included in Cost of sales.
Schedule of Restructuring and Related Costs	The components of, and changes in, our restructuring accruals follow: Employee Asset Termination Impairment Exit (MILLIONS OF DOLLARS) Costs Charges Costs Accrual Balance, December 31, 2014 (a) $ 18 $ — $ 1 $ 19 Provision 237 34 — 271 Utilization and other (b) (30 ) (34 ) — (64 ) Balance, September 27, 2015 (a) $ 225 $ — $ 1 $ 226 (a) At September 27, 2015 , and December 31, 2014 , included in Accrued expenses ( $157 million and $ 13 million , respectively) and Other noncurrent liabilities ( $69 million and $ 6 million , respectively). (b) Includes adjustments for foreign currency translation.

Other (Income)_Deductions - N29

Other (Income)/Deductions - Net (Tables)	9 Months Ended
	Sep. 27, 2015
Other Income and Expenses [Abstract]
Components of Other (Income)/Deductions—Net	The components of Other (income)/deductions—net follow: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Royalty-related income $ (5 ) $ (7 ) $ (19 ) $ (21 ) Identifiable intangible asset impairment charges (a) — 6 2 6 Net gain on sale of assets (b) — — — (6 ) Certain legal and other matters, net (c) — (1 ) — 10 Foreign currency loss (d) 6 7 18 23 Other, net (e) (3 ) (1 ) (1 ) 1 Other (income)/deductions—net $ (2 ) $ 4 $ — $ 13 (a) For the nine months ended September 27, 2015 , represents an impairment of IPR&D assets related to the termination of a canine oncology project. For the three and nine months ended September 28, 2014 , represents an impairment of IPR&D assets related to a pharmaceutical product for dogs acquired with the Fort Dodge Animal Health (FDAH) acquisition in 2009, as a result of the termination of the development program due to a re-assessment of economic viability. (b) For the nine months ended September 28, 2014 , represents the net gain on sale of land by our Taiwan joint venture. (c) For the nine months ended September 28, 2014 , represents a $13 million charge related to a commercial settlement in Mexico, partially offset by the insurance recovery of $1 million . See Note 16. Commitments and Contingencies for additional information. The nine months ended September 28, 2014 , also includes a $2 million insurance recovery of other litigation related charges. (d) Primarily driven by costs related to hedging and exposures to certain emerging market currencies. The nine months ended September 28, 2014 , also includes losses related to the depreciation of the Argentine peso in the first quarter of 2014. (e) For the three months ended September 27, 2015, primarily represents interest income and other miscellaneous income. For the nine months ended September 27, 2015 , primarily represents inventory losses of $3 million sustained as a result of weather damage at storage facilities in Brazil and Australia, partially offset by interest income and other miscellaneous income. For the nine months ended September 28, 2014 , represents a pension plan settlement charge related to the sale of a manufacturing plant, partially offset by interest income and other miscellaneous income.

Financial Instruments (Tables)

Financial Instruments (Tables)	9 Months Ended
	Sep. 27, 2015
Financial Instruments [Abstract]
Schedule of Long-term Debt Instruments	The components of our long-term debt follow: September 27, December 31, (MILLIONS OF DOLLARS) 2015 2014 Lines of credit, due 2016-2018 $ 2 $ 3 1.150% Senior Notes due 2016 400 400 1.875% Senior Notes due 2018 750 750 3.250% Senior Notes due 2023 1,350 1,350 4.700% Senior Notes due 2043 1,150 1,150 3,652 3,653 Unamortized debt discount / debt issuance costs (26 ) (29 ) Less current portion of long-term debt (400 ) — Long-term debt $ 3,226 $ 3,624
Schedule of Maturities of Long-term Debt	The principal amount of long-term debt outstanding, including the current portion of long-term debt, as of September 27, 2015 , matures in the following years: After (MILLIONS OF DOLLARS) 2016 2017 2018 2019 2020 2020 Total Maturities $ 401 $ — $ 751 $ — $ — $ 2,500 $ 3,652
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value	The location and fair values of derivative instruments are as follows: Fair Value of Derivatives September 27, December 31, (MILLIONS OF DOLLARS) Balance Sheet Location 2015 2014 Derivatives Designated as Hedging Instruments: Interest rate swap contracts Other current liabilities $ (6 ) $ — Total derivatives designated as hedging instruments (6 ) — Derivatives Not Designated as Hedging Instruments Foreign currency forward-exchange contracts Other current assets $ 18 $ 9 Foreign currency forward-exchange contracts Other current liabilities (9 ) (4 ) Total derivatives not designated as hedging instruments $ 9 $ 5 Total derivatives $ 3 $ 5
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)	The amount of losses on derivative instruments designated as cash flow hedges, recorded, net of tax, in Accumulated other comprehensive loss , are as follows: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Interest rate swap contracts $ (3 ) $ — $ (3 ) $ —
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location	The amounts of gains/(losses) on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions , are as follows: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Foreign currency forward-exchange contracts $ 18 $ (1 ) $ 24 $ (1 )

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 27, 2015
Inventory Disclosure [Abstract]
Components of Inventory	The components of inventory follow: September 27, December 31, (MILLIONS OF DOLLARS) 2015 2014 Finished goods $ 682 $ 688 Work-in-process 360 340 Raw materials and supplies 361 261 Inventories $ 1,403 $ 1,289

Goodwill and Other Intangible32

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
	Sep. 27, 2015
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. International Total Balance, December 31, 2014 $ 501 $ 475 $ 976 Additions (a) 164 38 202 Other (b) — (15 ) (15 ) Balance, September 27, 2015 $ 665 $ 498 $ 1,163 (a) Primarily reflects the allocation to reportable segments of goodwill associated with the acquisition of certain assets of Abbott Animal Health (amounts recorded are preliminary and subject to final valuation). For additional information, see Note 5. Acquisitions and Divestitures — Acquisition of Abbott Animal Health. (b) Includes adjustments for foreign currency translation, as well as a reclassification adjustment of $2 million to Assets held for sale. For additional information associated with this pending sale, see Note 5. Acquisitions and Divestitures — Assets Held for Sale .
Components of Identifiable Intangible Assets	The components of identifiable intangible assets follow: As of September 27, 2015 As of December 31, 2014 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 (a) $ 716 $ (287 ) $ 429 $ 744 $ (259 ) $ 485 Brands 212 (119 ) 93 216 (111 ) 105 Trademarks and trade names (a) 63 (43 ) 20 60 (41 ) 19 Other (a) 133 (118 ) 15 119 (116 ) 3 Total finite-lived intangible assets 1,124 (567 ) 557 1,139 (527 ) 612 Indefinite-lived intangible assets: Brands 39 — 39 38 — 38 Trademarks and trade names 67 — 67 67 — 67 In-process research and development (a) 8 — 8 2 — 2 Product rights 8 — 8 8 — 8 Total indefinite-lived intangible assets 122 — 122 115 — 115 Identifiable intangible assets $ 1,246 $ (567 ) $ 679 $ 1,254 $ (527 ) $ 727 (a) Includes the acquisition of intangible assets associated with the purchase of certain assets of Abbott Animal Health in the first quarter of 2015 (amounts recorded are preliminary and subject to final valuation), as well as the impact of foreign exchange. For additional information, see Note 5. Acquisitions and Divestitures — Acquisition of Abbott Animal Health .

Benefit Plans (Tables)

Benefit Plans (Tables)	9 Months Ended
	Sep. 27, 2015
Compensation and Retirement Disclosure [Abstract]
Schedule of Net Benefit Costs	The following table provides the net periodic benefit cost associated with dedicated pension plans (including those transferred to us): Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Service cost $ 2 $ 1 $ 6 $ 3 Interest cost 1 1 3 2 Expected return on plan assets (1 ) — (2 ) — Amortization of net actuarial loss — — 1 — Settlement loss (a) 1 — 1 4 Net periodic benefit cost $ 3 $ 2 $ 9 $ 9 (a) The nine months ended September 28, 2014 includes a first quarter settlement charge of approximately $4 million ($ 3 million , net of tax) associated with the 2012 sale of our Netherlands manufacturing facility.

Share-Based Payments (Tables)

Share-Based Payments (Tables)	9 Months Ended
	Sep. 27, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Components of Share-based Compensation Expense	The components of share-based compensation expense follow: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Stock options / stock appreciation rights $ 3 $ 5 $ 14 $ 12 RSUs / DSUs 6 4 15 10 PSUs 1 — 2 — Share-based compensation expense—total (a) $ 10 $ 9 $ 31 $ 22 (a) For the three and nine months ended September 27, 2015 , we capitalized $1 million of share-based compensation expense to inventory.

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Sep. 27, 2015
Equity [Abstract]
Changes in Common Shares and Treasury Stock	Changes in common shares and treasury stock were as follows: (MILLIONS OF DOLLARS AND SHARES) Common Shares Issued (a) Treasury Stock (a) Cost of Treasury Stock Balance, December 31, 2013 500.008 — $ — Stock-based compensation (b) 0.100 0.014 0.4 Defined contribution plan 1.102 — — Balance, September 28, 2014 501.209 0.014 $ 0.4 Balance, December 31, 2014 501.342 0.015 $ 0.5 Stock-based compensation (b) 0.231 0.037 1.5 Share repurchase program (c) — 3.189 148.1 Balance, September 27, 2015 501.574 3.240 $ 150.1 (a) Shares may not add due to rounding. (b) Treasury shares associated with stock-based compensation are reacquired from employees to satisfy tax withholding requirements on the vesting of restricted shares from equity-based awards. For additional information regarding share-based compensation, see Note 13. Share-Based Payments. (c) In November 2014, the company's Board of Directors authorized a $500 million share repurchase program. Purchases of Zoetis shares may be made at the discretion of management, depending on market conditions and business needs. As of September 27, 2015 , there was approximately $352 million remaining under this authorization.
Changes, Net of Tax, in Accumulated Other Comprehensive Loss	Changes, net of tax, in accumulated other comprehensive loss, excluding noncontrolling interest, follow: Currency Translation Derivatives Adjustment Benefit Plans Accumulated Other Net Unrealized Net Unrealized Actuarial Comprehensive (MILLIONS OF DOLLARS) Gains/(Losses) Gains/(Losses) Gains/(Losses) Loss Balance, December 31, 2014 $ — $ (336 ) $ (25 ) $ (361 ) Other comprehensive income (loss), net of tax (3 ) (199 ) 1 (201 ) Balance, September 27, 2015 $ (3 ) $ (535 ) $ (24 ) $ (562 )

Earnings per Share (Tables)

Earnings per Share (Tables)	9 Months Ended
	Sep. 27, 2015
Earnings Per Share [Abstract]
Basic and Diluted Earnings Per Share	The following table presents the calculation of basic and diluted earnings per share: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA) 2015 2014 2015 2014 Numerator Net income before allocation to noncontrolling interests $ 190 $ 167 $ 319 $ 461 Less: net income attributable to noncontrolling interests 1 1 2 4 Net income attributable to Zoetis Inc. $ 189 $ 166 $ 317 $ 457 Denominator Weighted-average common shares outstanding 499.239 501.453 500.186 500.887 Common stock equivalents: stock options, RSUs, PSUs and DSUs 2.414 0.992 2.294 0.723 Weighted-average common and potential dilutive shares outstanding 501.653 502.445 502.480 501.610 Earnings per share attributable to Zoetis Inc. stockholders—basic $ 0.38 $ 0.33 $ 0.63 $ 0.91 Earnings per share attributable to Zoetis Inc. stockholders—diluted $ 0.38 $ 0.33 $ 0.63 $ 0.91

Segment and Other Revenue Inf37

Segment and Other Revenue Information (Tables)	9 Months Ended
	Sep. 27, 2015
Segment Reporting [Abstract]
Schedule of Selected Income Statement Information by Segment	Selected Statement of Income Information Earnings Depreciation and Amortization (a) September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Three months ended U.S. Revenue $ 632 $ 532 Cost of Sales 147 126 Gross Profit 485 406 Gross Margin 76.7 % 76.3 % Operating Expenses 100 93 Other (income)/deductions (1 ) — U.S. Earnings 386 313 $ 5 $ 7 International Revenue (b) 569 666 Cost of Sales 209 241 Gross Profit 360 425 Gross Margin 63.3 % 63.8 % Operating Expenses 137 168 Other (income)/deductions 4 2 International Earnings 219 255 10 13 Total operating segments 605 568 15 20 Other business activities (c) (73 ) (76 ) 6 7 Reconciling Items: Corporate (d) (138 ) (142 ) 9 7 Purchase accounting adjustments (e) (13 ) (13 ) 14 13 Acquisition-related costs (f) (6 ) (1 ) — — Certain significant items (g) (46 ) (38 ) 1 1 Other unallocated (h) (56 ) (60 ) 1 2 Total Earnings (i) $ 273 $ 238 $ 46 $ 50 Earnings Depreciation and Amortization (a) September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Nine months ended U.S. Revenue $ 1,692 $ 1,470 Cost of Sales 399 343 Gross Profit 1,293 1,127 Gross Margin 76.4 % 76.7 % Operating Expenses 274 278 Other (income)/deductions (1 ) — U.S. Earnings 1,020 849 $ 18 $ 24 International Revenue (b) 1,762 1,956 Cost of Sales 638 701 Gross Profit 1,124 1,255 Gross Margin 63.8 % 64.2 % Operating Expenses 423 490 Other (income)/deductions 10 5 International Earnings 691 760 34 38 Total operating segments 1,711 1,609 52 62 Other business activities (c) (208 ) (224 ) 19 21 Reconciling Items: Corporate (d) (392 ) (389 ) 28 21 Purchase accounting adjustments (e) (41 ) (38 ) 39 38 Acquisition-related costs (f) (11 ) (5 ) — — Certain significant items (g) (406 ) (127 ) 3 4 Other unallocated (h) (177 ) (161 ) 3 5 Total Earnings (i) $ 476 $ 665 $ 144 $ 151 (a) 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. (b) Revenue denominated in euros was $139 million and $425 million for the three and nine months ended September 27, 2015 , respectively, and $175 million and $525 million for the three and nine months ended September 28, 2014 , respectively. (c) Other business activities reflects the R&D costs managed by our Research and Development organization, as well as revenue and expenses related to our contract manufacturing business. (d) Corporate includes, among other things, administration expenses, interest expense, certain compensation and other costs not charged to our operating segments. (e) Purchase accounting adjustments includes certain charges related to intangible assets and property, plant and equipment not charged to our operating segments, and the fair value adjustments to acquired inventory. (f) 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 . (g) Certain significant items includes substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items primarily include certain costs related to becoming an independent public company, restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition, certain legal and commercial settlements and the impact of divestiture-related gains and losses. • For the third quarter of 2015, Certain significant items primarily includes: (i) Zoetis stand-up costs of $22 million ; and (ii) charges related to our operational efficiency initiative and supply network strategy of $24 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, and certain legal registration and patent assignment costs. • For the third quarter of 2014, Certain significant items primarily includes: (i) Zoetis stand-up costs of $32 million ; (ii) intangible asset impairment charges related to an IPR&D project acquired with the FDAH acquisition in 2009 of $6 million ; and (iii) restructuring charges of $1 million related to employee severance costs in Europe. • For the nine months ended September 27, 2015 , Certain significant items primarily includes: (i) Zoetis stand-up costs of $84 million ; (ii) charges related to our operational efficiency initiative and supply network strategy of $317 million ; (iii) an impairment of IPR&D assets of $2 million related to the termination of a canine oncology project; and (iv) charges due to unusual investor-related activities of $3 million . • For the nine months ended September 28, 2014 , Certain significant items primarily includes: (i) Zoetis stand-up costs of $106 million ; (ii) charges related to a commercial settlement in Mexico of $13 million , partially offset by the insurance recovery of $1 million income; (iii) restructuring charges of $6 million related to employee severance costs in Europe, partially offset by a $2 million benefit related to a reversal of a previously established reserve as a result of a change in estimate of severance costs; (iv) intangible asset impairment charges related to an IPR&D project acquired with the FDAH acquisition in 2009 of $6 million ; (v) the Zoetis portion of a net gain on the sale of land by our Taiwan joint venture of $3 million ; (vi) additional depreciation associated with asset restructuring of $1 million ; (vii) a pension plan settlement charge related to the divestiture of a manufacturing plant of $4 million ; and (viii) an insurance recovery of litigation-related charges of $2 million income. (h) Includes overhead expenses associated with our manufacturing and supply operations, as well as procurement costs. (i) Defined as income before provision for taxes on income.
Schedule of Significant Product Revenues	Revenue by Species Significant species revenue are as follows: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Livestock: Cattle $ 432 $ 437 $ 1,201 $ 1,207 Swine 163 179 495 496 Poultry 132 147 399 428 Other 23 27 60 68 750 790 2,155 2,199 Companion Animal: Horses 35 38 117 127 Dogs and Cats 416 370 1,182 1,100 451 408 1,299 1,227 Contract Manufacturing 13 12 37 39 Total revenue $ 1,214 $ 1,210 $ 3,491 $ 3,465 Revenue by Major Product Category Significant revenue by major product category are as follows: Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, (MILLIONS OF DOLLARS) 2015 2014 2015 2014 Anti-infectives $ 348 $ 356 $ 938 $ 965 Vaccines 301 308 858 886 Parasiticides 158 178 504 528 Medicated feed additives 124 124 364 337 Other pharmaceuticals 226 200 650 598 Other non-pharmaceuticals 44 32 140 112 Contract manufacturing 13 12 37 39 Total revenue $ 1,214 $ 1,210 $ 3,491 $ 3,465

Organization (Details)

Organization (Details)	Sep. 27, 2015speciescountryregioncategory	May. 05, 2015product
Product Information [Line Items]
Number of regional segments | region	2
Number of countries in which entity markets products	70
Number of core animal species | species	8
Number of major product categories	5	5,000
Product [Member]
Product Information [Line Items]
Number of countries in which entity markets products	120

The Separation and Transactio39

The Separation and Transactions and Agreements with Pfizer (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Accounts receivable	$ 1,038	$ 980
Accounts payable	306	290
Pfizer [Member]
Related Party Transaction [Line Items]
Accounts receivable	19	24
Accounts payable	$ 35	$ 42

Significant Accounting Polici40

Significant Accounting Policies (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Accounting Policies [Abstract]
Unamortized Debt Issuance Expense	$ 17	$ 19

Acquisitions and Divestitures (

Acquisitions and Divestitures (Details)	May. 05, 2015manufacturing_site	Feb. 10, 2015USD ($)	Sep. 27, 2015USD ($)manufacturing_site	Sep. 27, 2015USD ($)	Dec. 31, 2014USD ($)
Business Acquisition [Line Items]
Goodwill acquired				$ 202,000,000
Number of manufacturing sites held-for-sale | manufacturing_site	10		2
Assets held for sale			$ 26,000,000	$ 26,000,000	$ 0
Manufacturing sites expected to sell period				1 year
Inventories [Member]
Business Acquisition [Line Items]
Assets held for sale			19,000,000	$ 19,000,000
Property, Plant and Equipment [Member]
Business Acquisition [Line Items]
Assets held for sale			5,000,000	5,000,000
Goodwill [Member]
Business Acquisition [Line Items]
Assets held for sale			2,000,000	2,000,000
Abbott Animal Health [Member]
Business Acquisition [Line Items]
Purchase price		$ 254,000,000
Payments to acquire business		229,000,000
Contingent consideration payment, high		25,000,000	25,000,000	25,000,000
Contingent consideration payment, low			$ 0	$ 0
Contingent consideration fair value liability		22,000,000
Assets acquired, inventory		13,000,000
Assets acquired, property plant, and equipment		1,000,000
Weighted average useful life				15 years
Goodwill acquired				$ 200,000,000
Abbott Animal Health [Member] | In Process Research and Development
Business Acquisition [Line Items]
Assets acquired, indefinite-lived intangible assets		8,000,000
Abbott Animal Health [Member] | Trade Names [Member]
Business Acquisition [Line Items]
Assets acquired, finite-lived intangibles		4,000,000
Abbott Animal Health [Member] | Developed Technology Rights [Member]
Business Acquisition [Line Items]
Assets acquired, finite-lived intangibles		11,000,000
Abbott Animal Health [Member] | Other Intangible Assets [Member]
Business Acquisition [Line Items]
Assets acquired, finite-lived intangibles		$ 15,000,000
Weighted average useful life				5 years

Restructuring Charges and Oth42

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives - Components of Costs Incurred (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015USD ($)category	Sep. 28, 2014USD ($)	Sep. 27, 2015USD ($)category	Sep. 28, 2014USD ($)	May. 05, 2015productemployees
Restructuring Cost and Reserve [Line Items]
Number of major product categories	5		5		5,000
Restructuring charges (benefit)			$ 271
Accelerated depreciation	$ 0	$ 0	0	$ 1
Total Restructuring charges and certain acquisition-related costs	13	2	280	10
Total costs associated with acquisitions and cost-reduction/productivity initiatives	29	2	326	10
Inventory write-off	5		5
Consulting charges	8		28
United States (U.S.)
Restructuring Cost and Reserve [Line Items]
Restructuring charges (benefit)	3		27
International
Restructuring Cost and Reserve [Line Items]
Restructuring charges (benefit)	2	1	117	6
Manufacturing, Research, Corporate [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges (benefit)	9		127	(1)
Direct Cost [Member]
Restructuring Cost and Reserve [Line Items]
Severance costs	0	1	237	4
Asset impairment charges	8	0	34	0
Integration costs	5	1	9	5
Employee Severance
Restructuring Cost and Reserve [Line Items]
Restructuring charges (benefit)			237
Employee Severance | Europe [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges (benefit)		1		6
Employee Severance | United States (U.S.)
Restructuring Cost and Reserve [Line Items]
Restructuring charges (benefit)				(2)
Minimum [Member]
Restructuring Cost and Reserve [Line Items]
Number of terminated positions expected | employees					2,000
Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Number of terminated positions expected | employees					2,500
Operational Efficiency [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges (benefit)	8		261
Severance costs			228
Asset impairment charges			33
Other cost reduction and cost productivity charges	13	$ 0	33	$ 0
Supply Network Strategy [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges (benefit)			10
Severance costs			9
Asset impairment charges			1
Other cost reduction and cost productivity charges	$ 3		$ 13

Restructuring Charges and Oth43

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives - Direct Restructuring Charges (Details) $ in Millions	9 Months Ended
	Sep. 27, 2015USD ($)	Dec. 31, 2014USD ($)
Restructuring Cost and Reserve
Beginning Balance	$ 19
Provision	271
Utilization and other	(64)
Ending Balance	226
Other Current Liabilities [Member]
Restructuring Cost and Reserve
Restructuring reserve current	157	$ 13
Other Noncurrent Liabilities [Member]
Restructuring Cost and Reserve
Restructuring reserve noncurrent	69	$ 6
Employee Termination Costs
Restructuring Cost and Reserve
Beginning Balance	18
Provision	237
Utilization and other	(30)
Ending Balance	225
Asset Impairments [Member]
Restructuring Cost and Reserve
Beginning Balance	0
Provision	34
Utilization and other	(34)
Ending Balance	0
Exit Costs [Member]
Restructuring Cost and Reserve
Beginning Balance	1
Provision	0
Utilization and other	0
Ending Balance	$ 1

Other (Income)_Deductions - N44

Other (Income)/Deductions - Net (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Other Income and Expenses [Abstract]
Royalty-related income	$ (5)	$ (7)	$ (19)	$ (21)
Identifiable intangible asset impairment charges	0	6	2	6
Net gain on sale of assets	0	0	0	(6)
Certain legal and other matters, net	0	(1)	0	10
Foreign currency loss	6	7	18	23
Other, net	(3)	(1)	(1)	1
Other (income)/deductions—net	$ (2)	4	0	13
Other income deductions [Line Items]
Litigation settlement expense		13
Insurance Recoveries				2
Other Nonrecurring Expense			3
MEXICO
Other Income and Expenses [Abstract]
Certain legal and other matters, net				13
Other income deductions [Line Items]
Litigation settlement expense			$ 13
Insurance Recoveries		$ 1		$ 1

Income Taxes - Taxes on Income

Income Taxes - Taxes on Income (Details) - USD ($) $ in Millions	3 Months Ended				9 Months Ended
	Sep. 27, 2015	Jun. 28, 2015	Mar. 29, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Income Tax Disclosure [Abstract]
Effective tax rate for income from continuing operations	30.40%			29.80%	33.00%	30.70%
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount			$ 9
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount		$ 3
Effective Income Tax Rate Reconciliation, Prior Year Income Taxes, Amount		$ 6

Income Taxes - Deferred Taxes (

Income Taxes - Deferred Taxes (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Net deferred income tax liability	$ 48	$ 125
Current deferred tax assets	127	109
Noncurrent deferred tax assets	58	54
Other current deferred liabilities	6	11
Noncurrent deferred tax liabilities	$ 227	$ 277

Income Taxes - Tax Contingencie

Income Taxes - Tax Contingencies (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Income Tax Contingency [Line Items]
Unrecognized tax benefits	$ 60	$ 54
Unrecognized tax benefits, income tax penalties and interest accrued	8	8
Noncurrent Deferred Tax Assets [Member]
Income Tax Contingency [Line Items]
Unrecognized tax benefits	6	6
Other Taxes Payable [Member]
Income Tax Contingency [Line Items]
Unrecognized tax benefits	$ 54	$ 48

Financial Instruments - Credit

Financial Instruments - Credit Facilities (Details)	12 Months Ended
	Dec. 31, 2012USD ($)	Sep. 27, 2015USD ($)	Dec. 31, 2014USD ($)
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 79,000,000
Line of credit facility		0	$ 0
Short-term bank loans and notes payable		8,000,000	7,000,000
Long-term line of credit, noncurrent		$ 2,000,000	$ 3,000,000
Revolving credit facility, minimum interest coverage ratio		3.50
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving credit facility, term	5 years
Revolving credit facility, current borrowing capacity	$ 1,000,000,000
Revolving credit facility, covenant compliance ratio, 2015		3.50
Revolving credit facility, covenant compliance ratio, 2016 and thereafter		3
Line of credit facility, maximum borrowing capacity	$ 1,500,000,000

Financial Instruments - Commerc

Financial Instruments - Commercial Paper Program (Details) - USD ($)	Sep. 27, 2015	Dec. 31, 2014	Feb. 28, 2013
Short-term Debt [Line Items]
Commercial paper	$ 0	$ 0
Commercial Paper [Member]
Short-term Debt [Line Items]
Capacity of commercial paper program			$ 1,000,000,000

Financial Instruments - Short-T

Financial Instruments - Short-Term Borrowings (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Financial Instruments [Abstract]
Short-term bank loans and notes payable	$ 8	$ 7
Short-term debt, weighted-average effective interest rate	6.00%	9.70%

Financial Instruments - Senior

Financial Instruments - Senior Notes Offering and Other Long-Term Debt (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014	Jan. 28, 2013
Debt Instrument [Line Items]
Debt, principal amount	$ 3,652	$ 3,653
Long-term debt current portion	400	0
Senior Notes [Member]
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 [Member] | Senior Notes 1.150% due 2016 [Member]
Debt Instrument [Line Items]
Debt, principal amount	400	400	$ 400
Debt, stated interest rate			1.15%
Senior Notes [Member] | Senior Notes 1.875% due 2018 [Member]
Debt Instrument [Line Items]
Debt, principal amount	750	750	$ 750
Debt, stated interest rate			1.875%
Senior Notes [Member] | Senior Notes 3.250% due 2023 [Member]
Debt Instrument [Line Items]
Debt, principal amount	1,350	1,350	$ 1,350
Debt, stated interest rate			3.25%
Senior Notes [Member] | Senior Notes 4.700% due 2043 [Member]
Debt Instrument [Line Items]
Debt, principal amount	$ 1,150	$ 1,150	$ 1,150
Debt, stated interest rate			4.70%

Financial Instruments - Schedul

Financial Instruments - Schedule of Long-term Debt (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014	Jan. 28, 2013
Debt Instrument [Line Items]
Lines of credit, due 2016-2018	$ 2	$ 3
Total long-term debt	3,652	3,653
Unamortized debt discount / debt issuance costs	(26)	(29)
Less current portion of long-term debt	(400)	0
Long-term debt	3,226	3,624
Senior Notes [Member]
Debt Instrument [Line Items]
Total long-term debt			$ 3,650
Senior Notes [Member] | Senior Notes 1.150% due 2016 [Member]
Debt Instrument [Line Items]
Total long-term debt	400	400	400
Senior Notes [Member] | Senior Notes 1.875% due 2018 [Member]
Debt Instrument [Line Items]
Total long-term debt	750	750	750
Senior Notes [Member] | Senior Notes 3.250% due 2023 [Member]
Debt Instrument [Line Items]
Total long-term debt	1,350	1,350	1,350
Senior Notes [Member] | Senior Notes 4.700% due 2043 [Member]
Debt Instrument [Line Items]
Total long-term debt	$ 1,150	$ 1,150	$ 1,150

Financial Instruments - Fair Va

Financial Instruments - Fair Value of Debt (Details) - Fair Value, Inputs, Level 2 [Member] - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Senior Notes [Member]
Debt Instrument [Line Items]
Fair value, debt instrument	$ 3,465
Allocated Long-term Debt [Member]
Debt Instrument [Line Items]
Fair value, debt instrument		$ 3,690

Financial Instruments - Long-te

Financial Instruments - Long-term Debt Maturity (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014	Dec. 31, 2014
Financial Instruments [Abstract]
2,016	$ 401		$ 401
2,017	0		0
2,018	751		751
2,019	0		0
2,020	0		0
After 2,020	2,500		2,500
Total long-term debt	3,652		3,652		$ 3,653
Interest expense, net of capitalized interest	29	$ 29	86	$ 87
Interest costs capitalized	$ 1	$ 1	$ 3	$ 3

Financial Instruments - Foreign

Financial Instruments - Foreign Exchange Risk (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 27, 2015	Dec. 31, 2014
Foreign Exchange Contract
Derivative [Line Items]
Derivative notional amount	$ 1,300	$ 1,100
Foreign Exchange Contract [Member]
Derivative [Line Items]
Derivative term of contract	60 days
Interest Rate Swap
Derivative [Line Items]
Derivative notional amount	$ 300
Maximum [Member] | Foreign Exchange Contract [Member]
Derivative [Line Items]
Derivative term of contract	180 days

Financial Instruments - Fair 56

Financial Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Derivatives, Fair Value [Line Items]
Total derivatives	$ 3	$ 5
Interest Rate Swap | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Total derivatives	(6)	0
Interest Rate Swap | Designated as Hedging Instrument [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities	(6)	0
Foreign Exchange Forward | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Total derivatives	9	5
Foreign Exchange Forward | Not Designated as Hedging Instrument [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative assets	18	9
Foreign Exchange Forward | Not Designated as Hedging Instrument [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities	$ (9)	$ (4)

Financial Instruments - Interes

Financial Instruments - Interest Rate Risk (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Interest Rate Swap
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Interest rate swap contracts	$ (3)	$ 0	$ (3)	$ 0
Foreign Exchange Forward
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Foreign currency forward-exchange contracts	$ 18	$ (1)	$ 24	$ (1)

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Finished goods	$ 682	$ 688
Work-in-process	360	340
Raw materials and supplies	361	261
Inventories	$ 1,403	$ 1,289

Goodwill and Other Intangible59

Goodwill and Other Intangible Assets - Narrative (Details) $ in Millions	3 Months Ended			6 Months Ended	9 Months Ended
	Sep. 27, 2015USD ($)segment	Jun. 28, 2015segment	Sep. 28, 2014USD ($)	Jun. 28, 2015segment	Sep. 27, 2015USD ($)segment	Sep. 28, 2014USD ($)	Dec. 31, 2014USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Number of operating segments | segment	2	1		4	2
Gross goodwill	$ 1,699				$ 1,699		$ 1,512
Accumulated goodwill impairment losses	536				536
Amortization of intangible assets	$ 16		$ 15		$ 47	$ 47

Goodwill and Other Intangible60

Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions	9 Months Ended
	Sep. 27, 2015USD ($)
Goodwill [Roll Forward]
Beginning Balance	$ 976
Additions	202
Other	(15)
Ending Balance	1,163
United States (U.S.)
Goodwill [Roll Forward]
Beginning Balance	501
Additions	164
Other	0
Ending Balance	665
International
Goodwill [Line Items]
Goodwill reclassification adjustment	2
Goodwill [Roll Forward]
Beginning Balance	475
Additions	38
Other	(15)
Ending Balance	$ 498

Goodwill and Other Intangible61

Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014	Dec. 31, 2014
Finite Lived and Indefinite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	$ 1,124		$ 1,124		$ 1,139
Finite-lived intangible assets, accumulated amortization	(567)		(567)		(527)
Finite-lived intangible assets, identifiable intangible assets, less accumulated amortization	557		557		612
Total indefinite-lived intangible assets	122		122		115
Intangible Assets, gross carrying amount	1,246		1,246		1,254
Identifiable intangible assets, less accumulated amortization	679		679		727
Amortization of intangible assets	16	$ 15	47	$ 47
Brands [Member]
Finite Lived and Indefinite Lived Intangible Assets [Line Items]
Total indefinite-lived intangible assets	39		39		38
Trademarks and Trade Names [Member]
Finite Lived and Indefinite Lived Intangible Assets [Line Items]
Total indefinite-lived intangible assets	67		67		67
In Process Research and Development
Finite Lived and Indefinite Lived Intangible Assets [Line Items]
Total indefinite-lived intangible assets	8		8		2
ProductRights [Member]
Finite Lived and Indefinite Lived Intangible Assets [Line Items]
Total indefinite-lived intangible assets	8		8		8
Developed Technology Rights [Member]
Finite Lived and Indefinite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	716		716		744
Finite-lived intangible assets, accumulated amortization	(287)		(287)		(259)
Finite-lived intangible assets, identifiable intangible assets, less accumulated amortization	429		429		485
Brands [Member]
Finite Lived and Indefinite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	212		212		216
Finite-lived intangible assets, accumulated amortization	(119)		(119)		(111)
Finite-lived intangible assets, identifiable intangible assets, less accumulated amortization	93		93		105
Trademarks and Trade Names [Member]
Finite Lived and Indefinite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	63		63		60
Finite-lived intangible assets, accumulated amortization	(43)		(43)		(41)
Finite-lived intangible assets, identifiable intangible assets, less accumulated amortization	20		20		19
Other Intangible Assets [Member]
Finite Lived and Indefinite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	133		133		119
Finite-lived intangible assets, accumulated amortization	(118)		(118)		(116)
Finite-lived intangible assets, identifiable intangible assets, less accumulated amortization	$ 15		$ 15		$ 3

Benefit Plans (Details)

Benefit Plans (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Mar. 30, 2014	Sep. 27, 2015	Sep. 28, 2014
Defined Benefit Plan Disclosure [Line Items]
Contributions to benefit plans	$ 3	$ 1		$ 6	$ 3
Expected future contributions to benefit plans				8
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	2	1		6	3
Interest cost	1	1		3	2
Expected return on plan assets	(1)	0		(2)	0
Amortization of net actuarial loss	0	0		1	0
Settlement loss	1	0		1	4
Net periodic benefit cost	3	2		9	9
Multi-employer Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension and postretirement benefit expense		1			4
Contributions to benefit plans		1			3
U.S. Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension and postretirement benefit expense	2	2		5	5
Belgium [Member] | Pfizer [Member] | Supplemental Saving Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Supplemental savings plan liability transferred from Pfizer	1
Supplemental savings plan liability transferred from Pfizer, net of tax	$ 1			$ 1
Australia, Japan, and Switzerland [Member] | Pfizer [Member] | Supplemental Saving Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Supplemental savings plan liability transferred from Pfizer					3
Supplemental savings plan liability transferred from Pfizer, net of tax		$ 3			$ 3
Netherlands [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan settlement loss after tax			$ 3
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Settlement loss			$ (4)

Share-Based Payments - Componen

Share-Based Payments - Components of Share-Based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense—total	$ 10	$ 9	$ 31	$ 22
Capitalized share-based compensation expense	1		1
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense—direct	3	5	14	12
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense—direct	6	4	15	10
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense—direct	$ 1	$ 0	$ 2	$ 0

Share-Based Payments - Narrativ

Share-Based Payments - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, options granted, shares			862,403
Share-based compensation, weighted average exercise price			$ 46.01
Share-based compensation, Options, weighted average grant date fair value			$ 11.70
Share-based compensation, risk free interest rate			1.79%
Share-based compensation, expected dividend rate			0.72%
Share-based compensation, expected volatility rate			23.92%
Share-based compensation, expected term			6 years 6 months
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, granted, shares			710,966
Share-based compensation, weighted average grant date fair value			$ 46.06
Share-based compensation, award vesting period			3 years
Share-based compensation expense	$ 6	$ 4	$ 15	$ 10
Restricted Stock Units (RSUs) | Restructuring Charges and Certain Acquisition-related Costs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	1		$ 1
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, granted, shares			157,130
Share-based compensation, weighted average grant date fair value			$ 63.14
Share-based compensation, expected volatility rate			21.80%
Share-based compensation expense	$ 1	$ 0	$ 2	$ 0
Performance Shares | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, target number of units percentage			0.00%
Performance Shares | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, target number of units percentage			200.00%
PeerCompanies | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, expected volatility rate			23.50%

Stockholders' Equity - Changes

Stockholders' Equity - Changes in Common Shares and Treasury Stock (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 27, 2015		Sep. 28, 2014	Dec. 31, 2014	Nov. 30, 2014	Dec. 31, 2013
Class of Stock [Line Items]
Common stock, shares authorized	6,000,000,000			6,000,000,000
Preferred stock, shares authorized	1,000,000,000			1,000,000,000
Common stock issued, shares	501,573,533		501,209,000	501,342,267		500,008,000
Stock issued, employee stock purchase plans	231,000		100,000
Treasury stock acquired, shares			14,000
Treasury stock acquired, value	$ 148	[1]	$ 0.4
Stock issued, employee benefit plan, shares			1,102,000
Treasury stock, shares	3,240,447		13,792	14,743		0
Treasury stock, carrying basis	$ 150.1		$ 0.4	$ 0.5		$ 0
Stock repurchase program, authorized amount					$ 500
Stock repurchase program, remaining authorized repurchase amount	$ 352
Stock Compensation Plan
Class of Stock [Line Items]
Treasury stock acquired, shares	37,000
Treasury stock acquired, value	$ 1.5
Share Repurchase Program
Class of Stock [Line Items]
Treasury stock acquired, shares	3,189,000
Treasury stock acquired, value	$ 148.1
[1]	Reflects the acquisition of treasury shares in connection with the Share Repurchase Program. For additional information, see Note 14. Stockholders' Equity.

Stockholders' Equity - Change66

Stockholders' Equity - Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, December 31, 2014			$ (361)
Other comprehensive income (loss), net of tax	$ (60)	$ (39)	(202)	$ (18)
Balance, September 27, 2015	(562)		(562)
Derivative
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, December 31, 2014			0
Other comprehensive income (loss), net of tax			(3)
Balance, September 27, 2015	(3)		(3)
Currency Translation Adjustment Net Unrealized Gain/(Losses)
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, December 31, 2014			(336)
Other comprehensive income (loss), net of tax			(199)
Balance, September 27, 2015	(535)		(535)
Benefit Plans Actuarial Gains/(Losses)
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, December 31, 2014			(25)
Other comprehensive income (loss), net of tax			1
Balance, September 27, 2015	(24)		(24)
Accumulated Other Comp. Income/(Loss)
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, December 31, 2014			(361)
Other comprehensive income (loss), net of tax			(201)	$ (18)
Balance, September 27, 2015	$ (562)		$ (562)

Earnings per Share (Details)

Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Numerator
Net income before allocation to noncontrolling interests	$ 190	$ 167	$ 319	$ 461
Less: net income attributable to noncontrolling interests	1	1	2	4
Net income attributable to Zoetis Inc.	$ 189	$ 166	$ 317	$ 457
Denominator
Weighted-average common shares outstanding	499,239	501,453	500,186	500,887
Common stock equivalents: stock options, RSUs, PSUs and DSUs	2,414	992	2,294	723
Weighted-average common and potential dilutive shares outstanding	501,653	502,445	502,480	501,610
Earnings per share attributable to Zoetis stockholders—basic (in dollars per share)	$ 0.38	$ 0.33	$ 0.63	$ 0.91
Earnings per share attributable to Zoetis stockholders—diluted (in dollars per share)	$ 0.38	$ 0.33	$ 0.63	$ 0.91
Stock Options
Denominator
Antidilutive securities excluded from computation of earnings per share, amount	900	3,000	700	2,000

Commitments and Contingencies (

Commitments and Contingencies (Details) animal in Thousands, € in Millions, $ in Millions	1 Months Ended	3 Months Ended	9 Months Ended
	Aug. 31, 2014animal	Sep. 28, 2014USD ($)	Sep. 27, 2015USD ($)claims	Sep. 28, 2014USD ($)	Jun. 19, 2013USD ($)	Jun. 19, 2013EUR (€)	Feb. 29, 2012defendant
Loss Contingencies [Line Items]
Number of deaths from contamination of animal feed | animal	50
Number of contaminated animal from contamination of animal feed | animal	20
Loss contingency accrual period increase (decrease)					$ 14	€ 11
Litigation settlement expense		$ 13
Insurance Recoveries				$ 2
PregSure
Loss Contingencies [Line Items]
Number of claims seeking damages | claims			255
Ulianopolis, Brazil
Loss Contingencies [Line Items]
Number of claims seeking damages | defendant							6
Number of additional defendants | defendant							5
MEXICO
Loss Contingencies [Line Items]
Litigation settlement expense			$ 13
Insurance Recoveries		$ 1		$ 1

Segment and Other Revenue Inf69

Segment and Other Revenue Information - Segment Information (Details) - segment	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 27, 2015	Jun. 28, 2015	Jun. 28, 2015	Sep. 27, 2015
Segment Reporting [Abstract]
Number of operating segments	2	1	4	2

Segment and Other Revenue Inf70

Segment and Other Revenue Information - Segment Assets (Details) - USD ($) $ in Millions	Sep. 27, 2015	Dec. 31, 2014
Segment Reporting [Abstract]
Assets	$ 6,686	$ 6,588

Segment and Other Revenue Inf71

Segment and Other Revenue Information - Statement of Income (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Segment Reporting Information [Line Items]
Revenue		$ 1,214	$ 1,210	$ 3,491	$ 3,465
Cost of Sales	[1]	421	434	1,242	1,226
Other (income)/deductions		2	(4)	0	(13)
Earnings		273	238	476	665
Depreciation and amortization		46	50	144	151
Other business activities
Segment Reporting Information [Line Items]
Earnings		(73)	(76)	(208)	(224)
Depreciation and amortization		6	7	19	21
Corporate Segment
Segment Reporting Information [Line Items]
Earnings		(138)	(142)	(392)	(389)
Depreciation and amortization		9	7	28	21
Purchase Accounting Adjustments
Segment Reporting Information [Line Items]
Earnings		(13)	(13)	(41)	(38)
Depreciation and amortization		14	13	39	38
Acquisition-related Costs
Segment Reporting Information [Line Items]
Earnings		(6)	(1)	(11)	(5)
Depreciation and amortization		0	0	0	0
Certain Significant Items
Segment Reporting Information [Line Items]
Earnings		(46)	(38)	(406)	(127)
Depreciation and amortization		1	1	3	4
Other unallocated
Segment Reporting Information [Line Items]
Earnings		(56)	(60)	(177)	(161)
Depreciation and amortization		1	2	3	5
Operating Segments | Reportable Segment
Segment Reporting Information [Line Items]
Earnings		605	568	1,711	1,609
Depreciation and amortization		15	20	52	62
Operating Segments | United States (U.S.) | United States (U.S.)
Segment Reporting Information [Line Items]
Revenue		632	532	1,692	1,470
Cost of Sales		147	126	399	343
Gross Profit		$ 485	$ 406	$ 1,293	$ 1,127
Gross margin (as a percent)		76.70%	76.30%	76.40%	76.70%
Operating Expenses		$ 100	$ 93	$ 274	$ 278
Other (income)/deductions		(1)	0	(1)	0
Earnings		386	313	1,020	849
Depreciation and amortization		5	7	18	24
Operating Segments | International | International
Segment Reporting Information [Line Items]
Revenue		569	666	1,762	1,956
Cost of Sales		209	241	638	701
Gross Profit		$ 360	$ 425	$ 1,124	$ 1,255
Gross margin (as a percent)		63.30%	63.80%	63.80%	64.20%
Operating Expenses		$ 137	$ 168	$ 423	$ 490
Other (income)/deductions		4	2	10	5
Earnings		219	255	691	760
Depreciation and amortization		$ 10	$ 13	$ 34	$ 38
[1]	Amortization expense related to finite-lived acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense related to finite-lived acquired intangible assets that are associated with a single function is included in Cost of sales, Selling, general and administrative expenses or Research and development expenses, as appropriate, in the condensed consolidated statements of income.

Segment and Other Revenue Inf72

Segment and Other Revenue Information - Statement of Income Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Segment Reporting Information [Line Items]
Investor Related Costs			$ 3
Restructuring charges (benefit)			271
Accelerated depreciation	$ 0	$ 0	0	$ 1
Dedicated pension plans, settlement charge for contract termination				4
Certain legal and other matters, net	0	(1)	0	10
Net gain on sale of assets	0	0	0	6
Insurance Recoveries				2
Certain Significant Items
Segment Reporting Information [Line Items]
Stand-up costs	22	32	84	106
United States (U.S.)
Segment Reporting Information [Line Items]
Restructuring charges (benefit)	3		27
Employee Severance
Segment Reporting Information [Line Items]
Restructuring charges (benefit)			237
Employee Severance | Europe [Member]
Segment Reporting Information [Line Items]
Restructuring charges (benefit)		1		6
Employee Severance | United States (U.S.)
Segment Reporting Information [Line Items]
Restructuring charges (benefit)				(2)
MEXICO
Segment Reporting Information [Line Items]
Certain legal and other matters, net				13
Insurance Recoveries		1		1
Zoetis Initiatives
Segment Reporting Information [Line Items]
Restructuring and other cost productivity charges	24		317
In Process Research and Development
Segment Reporting Information [Line Items]
Impairment of intangible assets indefinite-lived		6	2	6
Certain Significant Items
Segment Reporting Information [Line Items]
Net gain on sale of assets				3
Euro Member Countries, Euro
Segment Reporting Information [Line Items]
Revenues denominated in Euros	$ 139	$ 175	$ 425	$ 525

Segment and Other Revenue Inf73

Segment and Other Revenue Information - Revenue by Species (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Revenue from External Customer [Line Items]
Revenue	$ 1,214	$ 1,210	$ 3,491	$ 3,465
Livestock [Member]
Revenue from External Customer [Line Items]
Revenue	750	790	2,155	2,199
Cattle
Revenue from External Customer [Line Items]
Revenue	432	437	1,201	1,207
Swine
Revenue from External Customer [Line Items]
Revenue	163	179	495	496
Poultry
Revenue from External Customer [Line Items]
Revenue	132	147	399	428
Other
Revenue from External Customer [Line Items]
Revenue	23	27	60	68
Companion Animal [Member]
Revenue from External Customer [Line Items]
Revenue	451	408	1,299	1,227
Horses
Revenue from External Customer [Line Items]
Revenue	35	38	117	127
Dogs and Cats
Revenue from External Customer [Line Items]
Revenue	416	370	1,182	1,100
Contract Manufacturing
Revenue from External Customer [Line Items]
Revenue	$ 13	$ 12	$ 37	$ 39

Segment and Other Revenue Inf74

Segment and Other Revenue Information - Revenue by Major Product Category (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 27, 2015	Sep. 28, 2014	Sep. 27, 2015	Sep. 28, 2014
Revenue from External Customer [Line Items]
Revenue	$ 1,214	$ 1,210	$ 3,491	$ 3,465
Anti-infectives
Revenue from External Customer [Line Items]
Revenue	348	356	938	965
Vaccines
Revenue from External Customer [Line Items]
Revenue	301	308	858	886
Parasiticides
Revenue from External Customer [Line Items]
Revenue	158	178	504	528
Medicated feed additives
Revenue from External Customer [Line Items]
Revenue	124	124	364	337
Other pharmaceuticals
Revenue from External Customer [Line Items]
Revenue	226	200	650	598
Other non-pharmaceuticals
Revenue from External Customer [Line Items]
Revenue	44	32	140	112
Contract manufacturing
Revenue from External Customer [Line Items]
Revenue	$ 13	$ 12	$ 37	$ 39

Subsequent Events (Details)

Subsequent Events (Details) $ in Millions	Nov. 02, 2015USD ($)	Dec. 31, 2014USD ($)	Sep. 27, 2015	Dec. 31, 2012USD ($)
PHARMAQ
Subsequent Event [Line Items]
Revenues		$ 80
Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Revolving credit facility, current borrowing capacity				$ 1,000
Revolving credit facility, covenant compliance ratio			3.50
Subsequent Event | PHARMAQ
Subsequent Event [Line Items]
Purchase price	$ 765
Subsequent Event | Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Revolving credit facility, covenant compliance ratio	4.25