10-KPeriod: FY2012

Zoetis Inc. Annual Report, Year Ended Dec 31, 2012

Filed March 28, 2013For Securities:ZTS

Summary

Zoetis Inc., a global leader in animal health, officially separated from Pfizer Inc. in early 2013, completing an initial public offering (IPO) of its Class A common stock on the NYSE under the ticker "ZTS." The company's core business revolves around the discovery, development, manufacturing, and commercialization of medicines and vaccines for both livestock and companion animals. Zoetis operates across four geographic segments: the United States, Europe/Africa/Middle East, Canada/Latin America, and Asia/Pacific, with international operations contributing 59% of its total revenues in 2012. The company's product portfolio spans five major categories: anti-infectives, vaccines, parasiticides, medicated feed additives, and other pharmaceutical products. Livestock products represented 65% of 2012 revenues, driven by global population growth and increasing demand for animal protein, while companion animal products accounted for 35%, benefiting from increased pet ownership and longer lifespans for pets. Zoetis emphasizes brand lifecycle development and new product R&D, with a significant investment in innovation. Key financial highlights for 2012 included revenues of $4.336 billion and a net income of $436 million.

Financial Statements
Beta
Revenue$4.34B
Cost of Revenue$1.56B
Gross Profit$2.77B
SG&A Expenses$1.47B
Interest Expense$31.00M
Net Income$436.00M
EPS (Basic)$0.87
EPS (Diluted)$0.87
Shares Outstanding (Basic)500.00M
Shares Outstanding (Diluted)500.00M

Key Highlights

  • 1Zoetis Inc. completed its IPO on February 6, 2013, listing on the NYSE under the symbol "ZTS," signifying its transition to an independent public company after separating from Pfizer Inc.
  • 2The company generated total revenues of $4.336 billion in 2012, with international operations accounting for 59% of this revenue.
  • 3Zoetis's product portfolio is diversified across livestock (65% of 2012 revenue) and companion animals (35% of 2012 revenue), with key product categories including anti-infectives, vaccines, parasiticides, and medicated feed additives.
  • 4Research and Development (R&D) expenses were $409 million in 2012, reflecting a commitment to innovation through new product development and brand lifecycle management.
  • 5The company operates globally across four segments: U.S., Europe/Africa/Middle East, Canada/Latin America, and Asia/Pacific, demonstrating a broad geographic reach.
  • 6A significant portion of the company's strategy involves expanding its presence in emerging markets, which contributed 26% of revenues in 2012.
  • 7Zoetis incurred substantial debt during the separation, issuing $3.65 billion in senior notes to fund its operations and the separation process.

Frequently Asked Questions

Zoetis operates in four geographic segments: United States, Europe/Africa/Middle East, Canada/Latin America, and Asia/Pacific. Its product portfolio is divided into five major categories: anti-infectives, vaccines, parasiticides, medicated feed additives, and other pharmaceutical products. The company serves both the livestock and companion animal markets.

Zoetis completed a $3.65 billion senior notes offering in January 2013 to fund its separation from Pfizer and for general corporate purposes. In conjunction with the IPO, the company also entered into a $1.0 billion revolving credit facility and a commercial paper program.

The IPO on February 6, 2013, marked Zoetis's debut as an independent, publicly traded company. This separation from Pfizer allowed Zoetis to establish its own capital structure, pursue its own strategic initiatives, and directly manage its operations and growth strategies, although Pfizer retained a significant ownership stake post-IPO.

For livestock, growth is driven by increasing global population and living standards, leading to higher demand for animal protein, increased need for productivity due to resource constraints, and a greater focus on food safety. For companion animals, growth is fueled by economic development, rising disposable incomes, increasing pet ownership, longer pet lifespans, and advancements in animal healthcare.