10-K 0001555280-26-000011 (2026-02-12) vs 10-K 0001555280-25-000102 (2025-02-13)
| Section | Compared text | Words now | Changed |
|---|
| Risk Factors | Item 1A | 14,558 |
18.7% |
| MD&A | Item 7 | 15,364 |
15.2% |
| Legal Proceedings | Item 3 | 228 |
0.0% |
| Accounting Policies | Item 8, Note 3 – Significant Accounting Policies | 5,140 |
10.6% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 175 words changed in this paragraph; it is 54% similar to last year's version.
In addition, we will not be able to market new products unless and until we have obtained all required regulatory approvals in each jurisdiction where we propose to market those products. Delays by government agencies in approving new products or product upgrades or taking action with respect to other regulatory matters could have a negative impact on our growth and profitability. The ability of government agencies to review and approve new products or product upgrades or take other actions can be affected by various factors, including government budget and funding levels, ability to hire and retain key and other personnel, staffing shortages, public health emergencies, and statutory, regulatory, and policy changes. If a prolonged government shutdown or other disruption of normal business operations occurs, it could significantly impact the ability of the USDA, FDA, EPA and other agencies to timely review and process our regulatory submissions, including with respect to new product candidates, which could have an adverse effect on our business. Even after a product reaches market, it may be subject to re-review and may lose its registrations or approvals. We have changed, and may in the future change, the locations of where certain of our products are manufactured and, because of these changes, we may be required to obtain new regulatory approvals. Our failure to obtain approvals, delays in the approval process, including any delays in the United States resulting from federal workforce reductions or hiring freezes, federal agency reorganizations or deregulatory efforts, or any prolonged shutdown of the U.S. government, or our failure to maintain approvals in any jurisdiction, may prevent us from selling products in that jurisdiction until approval or reapproval is obtained, if ever.
Source: Item 1A, 10-K 0001555280-26-000011 vs Item 1A, 10-K 0001555280-25-000102
MD&A 146 words changed in this paragraph; it is 46% similar to last year's version.
In December 2021, our Board of Directors authorized a $3.5 billion multi-year share repurchase program. This program was completed as of December 31, 2024. In August 2024, our Board of Directors authorized a new multi-year share repurchase program of up to $6 billion of our outstanding common stock. In connection with the December 18, 2025 private offering of 0.250% convertible senior notes, we purchased approximately 2.1 million shares of Zoetis’ common stock, par value $0.01 per share, in privately negotiated transactions entered into concurrently with the pricing of the convertible senior notes offering effected with or through one of the initial purchasers or its affiliate. Following the date of the offering, we used $1,535 million of the remaining proceeds from the offering for additional repurchases of common stock which repurchases were substantially completed as of December 31, 2025. As of December 31, 2024, 2025, there was $5.6 $2.4 billion remaining under this authorization. Purchases of Zoetis shares may be made at the discretion of management, depending on market conditions and business needs. Share repurchases may be executed through various means, including open market or privately negotiated transactions. During 2025, 23.9 million shares were repurchased for $3.2 billion, which excludes a $31 million accrual for excise tax on net share repurchases.
Source: Item 7, 10-K 0001555280-26-000011 vs Item 7, 10-K 0001555280-25-000102
Accounting Policies 118 words changed in this paragraph; it is 39% similar to last year's version.
In preparing the consolidated financial statements, we use certain estimates and assumptions that affect reported amounts and disclosures, including amounts recorded in connection with acquisitions. These estimates and underlying assumptions can impact all elements of our consolidated financial statements. For example, in the Consolidated Statements of Income, estimates are used when accounting for deductions from revenue (such as rebates, sales allowances, product returns and discounts), determining cost of sales, allocating cost in the form of depreciation and amortization, and estimating restructuring charges and the impact of contingencies. On the Consolidated Balance Sheets, estimates are used in determining the valuation and recoverability of assets, such as accounts receivables, inventories, fixed assets, goodwill and other identifiable intangible assets, and estimates are used in determining the reported amounts of liabilities, such as taxes payable, uncertain tax positions, benefit obligations, the impact of contingencies, deductions from revenue and restructuring reserves, all of which also impact the Consolidated Statements of Income.
Source: Item 8, Note 3 – Significant Accounting Policies, 10-K 0001555280-26-000011 vs Item 8, Note 3 – Significant Accounting Policies, 10-K 0001555280-25-000102
Every change, by type
Sentences and paragraphs of ZTS's Risk Factors and MD&A, 10-K 2026-02-12 against 10-K 2025-02-13.
Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
Our products generally receive regulatory approval based on data obtained in controlled clinical trials. After approval and launch, the products are used for longer periods of time by much larger numbers of animals worldwide, which may lead to identifying new safety or efficacy concerns. In addition, we or others may conduct post-marketing clinical studies on efficacy and safety of our marketed products. Unanticipated safety, quality or efficacy concerns have, and could in the future, arise with respect to our products, whether or not scientifically or clinically supported, which have in the past and could in the future lead to product recalls, label changes or other measures that could reduce the product’s market acceptance, public
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AddedRisk Factors
regulatory communications, negative publicity or social media attention, withdrawals from the market or suspended or declining sales. Safety issues have, and could in the future, result in costly product liability and other claims. Any of these outcomes could result in material financial, legal, commercial, or reputational harm to our business.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
Changes in trade policies, including the imposition of tariffs, sanctions, and other trade restrictions, may adversely affect our business.
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AddedRisk Factors
Current or future tariffs or other restrictive trade measures may raise the costs of raw materials, components or finished goods, which may adversely impact both our product offerings and our operational expenses. Our manufacturers, suppliers and distribution channels may also experience supply chain disruptions as a result of increased costs and uncertainty. Duties are assessed based on import value. Each jurisdiction applies its own rules and procedures for import valuation, increasing the complexity and risk of errors. While we maintain procedures to ensure compliance, there is no guarantee these will prevent all errors, and regulatory changes may heighten this risk.
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AddedRisk Factors
Additional tariffs and other trade restrictions could result in a negative perception and/or an increased cost of goods and higher prices which may reduce demand for products and services, or extended sales cycles as customers assess the impact of evolving trade policies on their operations and face increased costs or decreased revenue. Additionally, a number of our customers, particularly U.S.-based livestock producers, benefit from free trade agreements, the loss of which could impact their operating results and spending power. Tariff and other trade-related cost pressures and supply chain disruptions may lead to reputational harm if we are unable to deliver products or services on expected timelines or if any price increases are poorly received by customers or business partners.
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AddedRisk Factors
In addition, retaliatory trade policies or anti-U.S. sentiment in certain regions whether driven by trade tensions, political disagreements or regulatory concerns may make customers, governments and investors more hesitant to engage with, purchase from or invest in U.S. companies. This may lead to increased preference for local competitors, changes to government procurement policies or heightened regulatory scrutiny, which may result in heightened operational risks and difficulties for us in attracting and retaining non-U.S. customers, suppliers, partners and investors.
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AddedRisk Factors
and distribute products in sufficient quantities to meet actual demand. The inability to successfully bring a product to market could negatively impact our revenues and earnings.
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AddedRisk Factors
The current transition of our ERP system is a multi-year implementation process; transitioning to new systems, integrating new systems into current systems or any disruptions or malfunctions (including from circumstances beyond our control) affecting our information systems could cause critical information upon which we rely to be delayed, unreliable, corrupted, insufficient or inaccessible. Costs and risks inherent in this transition may include disruptions to business continuity, administrative and technical problems, interruptions or delays in sales processes, manufacturing or R&D processes, expenditure overruns, payment delays, and data migration issues. If we do not properly address or mitigate these issues, they could result in increased costs and diversion of resources, negatively impacting our operating results and ability to effectively manage our business. Any of these potential issues, individually or in aggregation, could have a material adverse effect on our operating results and financial condition.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
We use machine learning and AI in various business operations, and inability to successfully monitor and manage its use could result in operational, competitive or reputational harm, regulatory enforcement, and legal liability.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
We incorporate (and expect to continue incorporating) AI capabilities in the development of new technologies and products and continue to expand the use of AI in our business and operations. Generative AI technologies are new and rapidly evolving technologies that could deliver significant benefits, but also present a number of operational, compliance, ethical, and reputational risks. AI algorithms are currently known to sometimes generate, among other things, irrelevant, nonsensical, deficient, factually inaccurate, biased or infringing content and results. In addition, if the manners in which we deploy and use AI become controversial, we may experience reputational harm to our brand, competitive harm or legal liability. In addition, we are subject to a growing number of cybersecurity and AI safety laws in markets in which we operate. For example, some of our European operations are subject to NIS2 which imposes cybersecurity requirements on “essential entities.” The EU AI Act prohibits certain AI systems that are categorized as “High Risk,” and requires certain disclosures about the use of AI tools. In the United States, there are emerging state AI laws and regulations that may impose additional requirements and restrictions in connection with the use of AI systems, including their use for "high risk" or "consequential" decision making. These rapidly changing regulatory complexities may increase our compliance costs. Moreover, there is risk that confidential information, including material non-public information, trade secrets or personal identifiable information, is input into AI applications, resulting in such information becoming accessible by third parties, including our competitors.
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AddedRisk Factors
The use of AI tools in the development of new technologies and products presents significant IP challenges. Determining IP ownership for AI-generated content remains uncertain in some jurisdictions. Also, AI tools might also unintentionally access or use third party IP or generate output infringing, thereby heightening exposure to IP claims and disputes. Inventions or works of authorship created using AI may be based on or contain, materials that were used in the training of such AI technologies and are identical or similar to third-party intellectual property, which could further limit our ability to obtain intellectual property protection in such inventions or works of authorship.
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AddedRisk Factors
Our competitors may incorporate AI into their operations more quickly or effectively than we do or with more successful outcomes. Additionally, we may not be able to attract or retain the necessary talent to support our AI technology investment or maintain our systems, which may affect our ability to remain competitive. Disruption or failure of our AI systems, or those of various third parties on whom we rely on, could lead to delays and operational challenges, as well as compliance and reputational issues which could materially adversely affect our business, financial condition and results of operations.
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RemovedRisk Factors
Unanticipated safety, quality or efficacy concerns can arise with respect to our products, whether or not scientifically or clinically supported, which can lead to product recalls, label changes, public regulatory communications, negative publicity or social media attention, withdrawals or suspended or declining sales, as well as product liability and other claims.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedRisk Factors
Modification of foreign trade policy by the U.S. or other countries or the imposition of tariffs on imported goods may harm our business.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedRisk Factors
Changes in trade laws, agreements and policies governing trade in and out of the territories and countries where our customers do business could negatively impact such customers’ businesses and adversely affect our operating results. A number of our customers, particularly U.S.-based livestock producers, benefit from free trade agreements. As well, international trade agreements or policies could harm our business and customers, and, as a result, negatively impact our financial condition and results of operations.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedRisk Factors
In addition, we will not be able to market new products unless and until we have obtained all required regulatory approvals in each jurisdiction where
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedRisk Factors
including changes in countries with highly inflationary economies, between the U.S. dollar and other currencies have had, and will continue to have, an impact on our results of operations.
Read it in 10-K 2025-02-13 at sec.gov ↗
RewordedRisk Factors
We may be unable to meet demand for certain of our products if any of our third-party suppliers cease or interrupt operations, fail operations due to, among other things, escalating tensions or trade disputes in their region, restrictions on the import/export of goods or services, contract manufacturing or supply chain disruptions due to renew contracts with us financial distress, our failure to mutually agree on contract terms, or otherwise fail some other failure of a contractor or supplier to meet their obligations to us.
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RewordedRisk Factors
Cyberattacks Cyberattacks, ransomware attacks, phishing attempts, social engineering schemes and other technology enabled threats are increasing in their frequency, sophistication and intensity, including through the use of AI and have become increasingly difficult to detect; and could include wrongful conduct by hostile foreign governments, industrial espionage, the deployment of harmful malware, ransomware, denial-of-service attacks, and other means to threaten data confidentiality, integrity and availability.
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RewordedRisk Factors
The discovery of additional or more severe cases of any of these, or new diseases may result in additional restrictions on animal proteins, reduced herd sizes, or reduced demand for animal protein, which may have a material adverse effect on our operating results and financial condition.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
(i) the availability and cost of low- or non-carbon-based energy sources and technologies, (ii) evolving regulatory requirements and rulings affecting ESG and diversity sustainability standards or disclosures, (iii) our ability to recruit, develop and retain talent in our labor markets, (iv) our ability to rely on third-party CMOs to incorporate appropriate sustainability actions, and (v) the impact of our organic growth and acquisitions or dispositions of businesses or operations and (v) potential negative publicity from diversity and inclusion matters. operations.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
In addition, because our financial statements are reported in U.S. dollars, changes in currency exchange rates, including changes in countries with highly inflationary economies, between the U.S. dollar and other currencies have had, and will continue to have, an impact on our results of operations.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
In particular, forward-looking statements include statements relating to our future actions, business plans or prospects, prospective products, product approvals or products under development, product and supply chain disruptions, R&D costs, timing and likelihood of success, future operating or financial performance, future results of current and anticipated products and services, strategies, sales efforts, expenses, production efficiencies, production margins, anticipated timing of generic market entries, integration of acquired businesses, anticipated impact or timing of divestitures, interest rates, tax rates, tariffs, changes in tax regimes and laws, impacts of the timing and processing of sales in the International segment, possible impacts of the expected fiscal year alignment of our subsidiaries operating outside the U.S., foreign exchange rates, growth in emerging markets, the outcome of contingencies, such as legal proceedings, plans related to share repurchases and dividends, government regulation, taxes and financial results.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
If any Some of our top-selling products or product lines have in the past or may in the future experience issues, such as loss of patent protection, material product liability litigation, new or unexpected side effects (or an increased frequency of serious, expected adverse events), manufacturing or supply chain disruptions, regulatory proceedings or enforcement, labeling changes, public regulatory communications, other regulatory correspondence, including “Dear Veterinarian” Letters, negative publicity or social media attention, changes to veterinarian or customer preferences, or ineffectiveness in connecting with veterinarians and customers and/or disruptive innovations or the introduction of competing and/or more effective products, our revenues could be negatively impacted, perhaps significantly.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
In addition, we depend on third parties and applications on virtualized (cloud) infrastructure to operate and support our information systems. systems and are currently in the process of a multi-year implementation process to update our enterprise resource planning (ERP) system to a new fully cloud-based system.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
The intellectual property positions of animal health medicines and vaccines businesses frequently involve complex legal and factual questions, and an issued patent does not provide the right to practice the patented technology or to develop, manufacture or commercialize the patented product. questions.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
In addition, we have been investing in data and digital capabilities, including incorporating the use of certain AI capabilities into the development of new technologies and products, and have expanded our diagnostics portfolio, and as a result, there could be an increased likelihood of a cyberattack or breach of security cyberattack, ransomware attacks, phishing attempts, social engineering schemes and other technology enabled threats, that could negatively impact us us, our third-party partners or our customers.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
Russia’s invasion of Ukraine, ongoing conflicts and rising tensions in various parts of the regional conflict in the Middle East, world, economic weakness in China, the COVID-19 pandemic, future pandemics, as well as inflation, are examples of recent global economic conditions that could have an adverse effect on our operating results, financial condition and liquidity.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
We may be unable to adequately protect our information technology systems from cyberattacks, ransomware attacks, phishing attempts, social engineering schemes and other technology enabled threats, breaches of security security, data loss or misappropriation of data, which could result in the disclosure of sensitive, personal, confidential or proprietary information, damage our reputation, and subject us to significant financial and legal exposure.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
Certain third-party suppliers are may be the sole or exclusive source of certain products, materials and services necessary for production of our products.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
This includes could include substantial fines and penalties, regulatory investigations, and civil lawsuits with damages, all of which could have a material adverse effect on our reputation and our business.
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AddedMD&A
Our financial results are subject to variability related to a number of factors including, but not limited to: tariffs and other trade protection measures, the decline in global macroeconomic conditions, competitive dynamics, geopolitical tensions with and economic uncertainty in certain markets, inflation, global supply chain disruption and supply availability, variability in distributor inventory stocking levels, including as a result of expected demand and promotional activities, weather patterns, herd management decisions, regulatory actions, disease outbreaks, product and geographic mix, timing of price increases and customer expectations related to the same, timing of investment decisions and operational and other changes made in connection with the expected change in accounting principle to eliminate the one-month reporting lag in 2026 for our subsidiaries operating outside the U.S.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
In connection with our multi-year process to transition our ERP system noted above, we expect to eliminate the one-month reporting lag in 2026 for our International Subsidiaries, effective beginning with the Company’s first quarterly report in 2026, which would result in an alignment of the year-end for all subsidiaries and operations to December 31 (the “Expected Fiscal Year Alignment”). As a result of this alignment, the results of operations of our International Subsidiaries for the month of December 2025 would not be included in our consolidated results of operations for fiscal year 2026 but will be included in the retrospective application of the new accounting principle to prior financial statement periods. This alignment is an important preliminary step in the process to transition our ERP system because it will contribute to more seamless financial consolidation, regulatory compliance and consistent reporting.
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AddedMD&A
In connection with the Expected Fiscal Year Alignment, revenue in the International segment for the reported fourth quarter of 2025 benefited from operational changes resulting in the acceleration of the timing of sales into the reported fourth quarter of 2025, which led to an approximate 2.5% to 3.5% increase in sales in the International segment in the reported fourth quarter of 2025, a trend that we do not expect to recur at the end of fiscal year 2026.
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AddedMD&A
The operational changes in connection with the Expected Fiscal Year Alignment to date also included a shift implemented in early 2026 to the timing of annual price increases in certain International Subsidiaries so that the price increase and anticipated customer buying preceding the price increase would occur in the same calendar year. In addition, processing of certain customer orders from December 2025 was delayed to calendar year 2026.
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AddedMD&A
Foreign exchange decreased our reported revenue growth by approximately $36 million, or 1%.
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AddedMD&A
•International segment revenue was positively impacted by operational changes made in connection with the Expected Fiscal Year Alignment, leading to an approximate 2.5% to 3.5% increase in sales in the International segment in the reported fourth quarter 2025 due to an acceleration of the timing of sales into the reported fourth quarter of 2025, a trend that we do not expect to recur.
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AddedMD&A
(d) Represents costs related to our multi-year business process transformation program, which includes the implementation of a new enterprise resource planning (ERP) system, related digital technology solutions and other related costs. This comprehensive program is a major global and cross-functional company-wide effort, of which the Expected Fiscal Year Alignment is a part, that we believe will transform how we work across our business and contribute to all of our strategic priorities. Due to the nature, scope and magnitude of this investment, these costs are incremental transformational costs that are far in excess of the historical normal level of spending to support operations and are not expected to recur in the foreseeable future.
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AddedMD&A
Accounts receivable, less allowance for doubtful accounts increased primarily as a result of higher net sales in the period.
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AddedMD&A
Identifiable intangible assets, less accumulated amortization decreased primarily due to amortization expense. See Notes to Consolidated Financial Statements - Note 13. Goodwill and Other Intangible Assets.
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AddedMD&A
On December 18, 2025, we completed a private offering (the “offering”) of 0.250% convertible senior notes (the “convertible senior notes”) with a maturity date of June 15, 2029, unless earlier repurchased, redeemed or converted. The aggregate principal amount of the convertible senior notes sold in the offering was $2.0 billion, which includes $250 million in aggregate principal amount of convertible senior notes issued pursuant to the initial purchasers’ option to purchase additional convertible senior notes on the same terms and conditions, which the initial purchasers exercised in full for settlement on December 18, 2025.
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AddedMD&A
The convertible senior notes were issued pursuant to an indenture, dated as of December 18, 2025, between us and Deutsche Bank Trust Company Americas, as trustee. If we call any convertible senior notes for redemption, a "make-whole fundamental change" will occur under the indenture with respect to those convertible senior notes, in which case the conversion rate applicable to the conversion of those convertible senior notes will be increased if they are converted during a specified period of time after they are called for redemption. The convertible senior notes are convertible at an initial conversion price of approximately $148.20 per share of common stock. Prior to March 15, 2029, the convertible senior notes are convertible during certain periods only: (i) if the trading price of our common stock is greater than or equal to 130% of the conversion price for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days prior to the end of a calendar quarter, (ii) the trading price per $1,000 principal amount of convertible senior notes for each trading day of the specified measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day, (iii) if we call the notes for redemption and (iv) upon the occurrence of certain corporate events, as set forth in the indenture. On or after March 15, 2029, holders may convert all or any portion of their notes, regardless of the foregoing conditions. Upon any conversion of the convertible senior notes, we will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination thereof, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted.
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AddedMD&A
The net proceeds from the offering were $1,970 million, after deducting the initial purchasers’ discounts and expenses of $30 million. We used the net proceeds from the offering as follows: (i) $187 million to fund the cost of entering into the capped call transactions described below, (ii) $248 million to purchase approximately 2.1 million shares of Zoetis’ common stock, par value $0.01 per share (the “common stock”), in privately negotiated transactions entered into concurrently with the pricing of the offering effected with or through one of the initial purchasers or its affiliate and (iii) the remaining $1,535 million for additional repurchases of common stock following the date of the offering, which repurchases were substantially completed as of December 31, 2025.
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RemovedMD&A
Pillar Two was effective beginning in 2024 and the impact of these provisions is included in our effective tax rate for 2024.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
•For 2022, tax benefits related to a deferred adjustment as a result of a change in tax basis.
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RemovedMD&A
•Customer relationships, developed technology rights and property, plant and equipment in our diagnostics, poultry, cattle and swine businesses; and
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RemovedMD&A
•Inventory and other charges related to the consolidation of manufacturing sites in China.
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RemovedMD&A
Dividends payable increased as a result of an increase in the dividend rate for the first quarter 2025 dividend, which was declared on December 12, 2024.
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RemovedMD&A
As of December 31, 2024, the supplemental savings plan liability was $48 million.
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RemovedMD&A
means, including open market or privately negotiated transactions. During 2024, 10.4 million shares were repurchased for $1.8 billion, which excludes a $17 million accrual for excise tax on net share repurchases.
Read it in 10-K 2025-02-13 at sec.gov ↗
RewordedMD&A
Description Principal Amount Interest Rate Terms 2015 Senior Notes due 2025 $750 million 4.500% Interest due semi annually, not subject to amortization, aggregate principal due on November 13, 2025 2022 Senior Notes due 2025 $600 million 5.400% Interest due semi annually, not subject to amortization, aggregate principal due on November 14, 2025 2017 Senior Notes due 2027 $750 million 3.000% Interest due semi annually, not subject to amortization, aggregate principal due on September 12, 2027 2018 Senior Notes due 2028 $500 million 3.900% Interest due semi annually, not subject to amortization, aggregate principal due on August 20, 2028 2025 Senior Notes due 2028 $850 million 4.150% Interest due semi annually, not subject to amortization, aggregate principal due on August 17, 2028 2025 Convertible Senior Notes due 2029 $2,000 million 0.250% Interest due semi annually, not subject to amortization, aggregate principal due on June 15, 2029 2020 Senior Notes due 2030 $750 million 2.000% Interest due semi annually, not subject to amortization, aggregate principal due on May 15, 2030 2022 Senior Notes due 2032 $750 million 5.600% Interest due semi annually, not subject to amortization, aggregate principal due on November 16, 2032 2025 Senior Notes due 2035 $1,000 million 5.000% Interest due semi annually, not subject to amortization, aggregate principal due on August 17, 2035 2013 Senior Notes due 2043 $1,150 million 4.700% Interest due semi annually, not subject to amortization, aggregate principal due on February 1, 2043 2017 Senior Notes due 2047 $500 million 3.950% Interest due semi annually, not subject to amortization, aggregate principal due on September 12, 2047 2018 Senior Notes due 2048 $400 million 4.450% Interest due semi annually, not subject to amortization, aggregate principal due on August 20, 2048 2020 Senior Notes due 2050 $500 million 3.000% Interest due semi annually, not subject to amortization, aggregate principal due on May 15, 2050
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
The change in Other (income)/deductions—net is primarily as a result of a gain on the sale of a majority interest in our pet insurance business in the prior period, royalty-related income in the prior period that was predominantly associated with a settlement received from a third-party for underpayment of royalties related to prior periods and a net loss on the sale of our medicated feed additive product portfolio, certain water soluble products and related assets in 2024, as well as lower asset impairment charges in the current period, partially offset by lower asset impairment charges interest income in the current period.
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RewordedMD&A
Cost of sales(a) 2,666 2,719 2,561 2,454 (2) 6 4 % of revenue 28.2 % 29.4 % 30.0 % 30.4 % Selling, general and administrative expenses(a) 2,378 2,318 2,151 2,009 3 8 7 % of revenue 25 % 25 % 25 % Research and development expenses(a) 698 686 614 539 2 12 14 % of revenue 7 % 7 % 7 % Amortization of intangible assets(a) 128 141 149 150 (9) (5) (1) Restructuring charges and certain acquisition and divestiture-related costs 51 53 53 11 (4) — * Interest expense, net of capitalized interest 222 225 239 221 (1) (6) 8 Other (income)/deductions—net (36) (19) (159) 40 89 (88) * Income before provision for taxes on income 3,360 3,133 2,936 2,656 7 11 7 % of revenue 35 % 34 % 34 % 33 % Provision for taxes on income 687 637 596 545 8 7 9 Effective tax rate 20.4 % 20.3 % 20.3 % 20.5 % Net income before allocation to noncontrolling interests 2,673 2,496 2,340 2,111 7 11 7 Less:
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RewordedMD&A
The increase decrease in operating cash flows was primarily attributable to higher inventory build-up of certain products in the prior period for increased demand and to mitigate potential supply constraints and the timing of receipts and payments in the ordinary course of business, as well as business and higher inventory build-up of certain products due to increased demand, partially offset by higher net income adjusted by non-cash items. items and the timing of income taxes paid.
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RewordedMD&A
The lower higher effective tax rate on adjusted pretax income for 2024, 2025, as compared to 2023, 2024, was primarily attributable to a higher lower benefit in the U.S. U.S related to foreign-derived intangible income and lower net discrete tax expenses, partially offset by a less favorable jurisdictional mix of earnings (which includes the impact of the location of pre-tax earnings, tax impact of permanent differences and repatriation costs and Pillar Two global minimum tax). activity), partially offset by higher net discrete benefits.
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RewordedMD&A
Other current assets decreased increased primarily due to lower value-added tax receivables for our international markets and an increase in collateral posted related to derivative contracts, the deferral of a prepaid tax benefit in connection with a prepayment from a related foreign entity in Belgium, as well as higher value-added tax receivables, partially offset by the mark-to-market adjustment adjustments of derivative instruments and the jurisdictional netting of income taxes receivable and income taxes payable. instruments.
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RewordedMD&A
The lower higher effective tax rate for 2023, 2025, as compared to 2022, 2024, was primarily attributable to a higher lower benefit in the U.S. related to foreign-derived intangible income, partially offset by a more favorable jurisdictional mix of earnings (which includes the impact of the location of earnings pre-tax earnings, tax impact of permanent differences and repatriation costs), partially offset by a activity) and higher net discrete tax expense in 2023, mainly related to changes to prior years’ tax positions. benefits.
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RewordedMD&A
Earnings by segment and the operational and foreign exchange changes versus the comparable prior year period were as follows:% Change 25/24 24/23 23/22 Related to Related to Year Ended December 31, Foreign Exchange Foreign Exchange (MILLIONS OF DOLLARS) 2025 2024 2023 2022 Total Operational Total Operational U.S. $ 3,438 $ 3,336 $ 2,863 $ 2,763 3 — 3 17 — 17 4 — 4 International 2,264 2,118 2,037 1,990 7 2 5 4 (7) 11 2 (2) 4 Total reportable segments 5,702 5,454 4,900 4,753 5 1 4 11 (3) 14 3 (1) 4 Other business activities (562) (562) (496) (424) — 13 17 Reconciling Items:
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RewordedMD&A
Other restructuring charges and cost-reduction/productivity initiatives(c) 27 35 44 8 Business process transformation costs(d) 29 — — Certain asset impairment charges(d) charges(e) 27 11 24 47 Net loss/(gain) on sale of businesses(e) businesses(f) 3 25 (101) — Other (4) 8 — 1 Total certain significant items—pre-tax 82 79 (33) 56 Income taxes(a) 9 (5) (12) (3) Total certain significant items—net of tax 73 84 (21) 59 Total purchase accounting adjustments, acquisition and divestiture-related costs, and certain significant items—net of tax $ 174 $ 207 $ 113 $ 183
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RewordedMD&A
Year Ended December 31, % Change (MILLIONS OF DOLLARS) 2025 2024 2023 2022 25/24 24/23 23/22 GAAP reported net income attributable to Zoetis $ 2,673 $ 2,486 $ 2,344 $ 2,114 8 6 11 Purchase accounting adjustments—net of tax 99 109 127 120 (9) (14) 6 Acquisition and divestiture-related costs—net of tax 2 14 7 4 (86) * 75 Certain significant items—net of tax 73 84 (21) 59 * (13) * Non-GAAP adjusted net income(a) $ 2,847 $ 2,693 $ 2,457 $ 2,297 6 10 7
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RewordedMD&A
On November 8, 2022, August 18, 2025, we issued $1.35 $850 million aggregate principal amount of 4.150% senior notes due 2028 and $1.00 billion aggregate principal amount of our 5.000% senior notes (2022 due 2035 (collectively, 2025 senior notes), with an original issue discount of $2 million.
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RewordedMD&A
Corporate (1,240) (1,213) (1,042) (1,073) 2 16 (3) Purchase accounting adjustments (128) (140) (159) (160) (9) (12) (1) Acquisition and divestiture-related costs (2) (18) (9) (5) (89) * 80 Certain significant items (82) (79) 33 (56) * 4 * Other unallocated (328) (309) (291) (379) 6 (23) 6 Income before income taxes $ 3,360 $ 3,133 $ 2,936 $ 2,656 7 11 7
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