Zoetis (ZTS) 10-Q 2017 Q3 Quarterly report

Exhibit 12

ZOETIS INC. AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES^(a) 

	Nine months ended
	October 1,			Year Ended December 31,
(IN MILLIONS, EXCEPT RATIOS)	2017			2016			2015		2014		2013			2012
Determination of earnings:
Income before provision for taxes on income
and noncontrolling interests	$	1,095		$	1,228		$	545	$	820	$	690		$	710
Less: Net income/(loss) attributable to noncontrolling interests	(1		)	(2		)	—		4		(1		)	—
Income attributable to Zoetis Inc.	1,096			1,230			545		816		691			710
Add: fixed charges	135			177			137		131		127			37
Total earnings as defined	$	1,231		$	1,407		$	682	$	947	$	818		$	747
Fixed charges:
Interest expense, net of capitalized interest(a)	$	125		$	166		$	124	$	117	$	113		$	31
Capitalized interest	3			3			4		4		3			—
Interest portion of rent expense(b)	7			8			9		10		11			6
Fixed charges	$	135		$	177		$	137	$	131	$	127		$	37
Ratio of earning to fixed charges	9.1			7.9			5.0		7.2		6.4			20.2

^(a)  Interest expense includes amortization of debt discount and fees. Interest expense does not include interest related to uncertain tax positions.

^(b)  One-third of all rental expense is deemed to be interest, which we believe to be a conservative estimate of an interest factor in our leases.