Zoetis (ZTS) 10-K risk factor changes: FY2022 vs FY2021

*In addition to the other information set forth in this [removed: 2021] [added: 2022] Annual Report, any of the factors described below could materially adversely affect our operating results, financial condition and liquidity, which could cause the trading price of our securities to decline.*

*In particular, forward-looking statements include statements relating to [removed: the impact of the coronavirus (COVID-19) pandemic and any recovery therefrom on] our [removed: business, our 2022 financial guidance,] future actions, business plans or prospects, prospective products, product approvals or products under development, product [added: and] supply [added: chain] disruptions, [added: the impact of the COVID-19 pandemic and any recovery therefrom on our business,] 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, interest rates, tax [removed: rates and] [added: rates, changes in] tax regimes and [removed: any changes thereto,] [added: laws,] foreign exchange rates, growth in emerging markets, the outcome of contingencies, such as legal proceedings, plans related to share repurchases and dividends,* *government regulation and financial results.

Risks related to our business and [added: the animal health] industry

Risks related to [added: our] research and development

Risks related to [removed: manufacturing][added: manufacturing and supply]

[removed: - We] [added: We] rely on third parties to provide us with [added: products,] materials and services, and are subject to increased labor and material costs and potential disruptions in [removed: supply.][added: supply.]

[removed: - Pfizer's rights as licensor under] [added: Under] the [removed: patent] [added: Patent] and [removed: know-how license could limit our ability] [added: Know-How License Agreement (Pfizer as licensor) Pfizer licenses] to [removed: develop and commercialize] [added: us] certain [removed: products.][added: of its intellectual property.]

Our global operations expose us to risks associated with public health crises, including epidemics and pandemics such as [removed: the novel coronavirus (COVID-19).][added: COVID-19.]

There is no certainty that measures taken by governmental [removed: authorities] [added: authorities, including those taken in China,] will be sufficient to mitigate the risks posed by the virus, and our ability to continue to perform critical functions could be harmed.

The COVID-19 pandemic has and may continue to impact our [added: global] supply chain as we experience disruptions or delays in shipments of certain materials or components of our products.

Additionally, many of our workforce continue to work [removed: remotely as a result of the pandemic.][added: remotely.]

Remote working arrangements could result in additional complexity or inefficiency or increase operational risks, including, but not limited to, risks associated with [added: cybersecurity,] information technology and systems which could have a material adverse effect on our business.

Weak global economic conditions also may [removed: exacerbate] [added: amplify] the ongoing impact of the pandemic.

This situation continues to change rapidly, especially as new variants of the virus are [removed: identified] [added: identified, surges occur] and [added: government mitigation plans are implemented and] additional impacts may arise that we are not aware of currently.

If any of our top-selling products [added: and product lines] experience issues, such as loss of patent protection, material product liability litigation, new or unexpected side effects, manufacturing [added: or supply chain] disruptions, regulatory proceedings, labeling changes, negative publicity, changes to veterinarian or customer preferences, and/or disruptive innovations or the introduction of [added: competing and/or] more effective products, our revenues could be negatively impacted, perhaps significantly.

[removed: Our] [added: For example, our] five top-selling [removed: products, Apoquel,] [added: products and product lines,] Simparica/Simparica Trio, [added: Apoquel, Cytopoint,] Revolution/Revolution [removed: Plus/Stronghold, Cytopoint] [added: Plus/Stronghold] and [removed: the] ceftiofur [removed: product] line, contributed approximately [removed: 33%] [added: 37%] of our revenue in [removed: 2021.][added: 2022, and any issues with these top-selling products and product lines would have a more significant impact to our results of operations.]

For example, several companies have launched generic versions of our Rimadyl chewable [removed: product.][added: and Draxxin products.]

In the years since the start of generic and other competition, sales of our Rimadyl chewable [removed: product] [added: and Draxxin products] have declined [removed: by approximately 19%] in the U.S., [removed: its] [added: the] largest [removed: market.][added: market for these products, by 23% and 45%, respectively, and additional declines are expected in subsequent years.]

[removed: In addition, we] [added: We] may [removed: be subject] [added: not complete these transactions in a timely manner, on a cost-effective basis, or at all, due] to regulatory constraints or limitations or other unforeseen factors that prevent us from realizing the expected benefits.

We may be unable to integrate acquisitions successfully into our existing business, and we may be unable to achieve expected [added: sales,] gross margin improvements or efficiencies.

[removed: Acquiring or implementing] [added: Implementing] new business lines or offering new products and services may subject us to additional risks.

From time to time, we may [removed: acquire or] implement new business lines or offer new products and services within existing lines of business.

[added: Failure to successfully manage these risks in the implementation or] acquisition of new lines of business or the offering of new products or services could have a material adverse effect on our reputation, business, results of operations, and financial condition.

Our total revenue attributable to antibacterials for livestock was approximately [removed: $1.1] [added: $1.0] billion for the year ended December 31, [removed: 2021.][added: 2022.]

In addition, certain jurisdictions like Italy have implemented the use of electronic prescriptions, which has caused more disciplined use of antibiotics and decreased the demand for our [added: antibacterial] products.

[removed: In] [added: Also, in] certain markets, there has been an increase in consumer preference towards proteins produced without the use of antibiotics.

Adverse consumer views related to the use of one or more of our products in livestock also may result in a decrease in the use of such products and could [removed: have a material adverse effect on] [added: materially adversely affect] our operating results and financial condition.

Our business is subject to risk based on global economic [added: and political] conditions.

Macroeconomic, [removed: business] [added: business, political] and financial [removed: disruptions, including inflation,] [added: disruptions] could have a material adverse effect on our operating results, financial condition and liquidity.

Certain of our customers and suppliers [removed: could] [added: may] be affected directly by [removed: an] [added: the current] economic downturn and could face credit issues or cash flow problems that could give rise to payment delays, increased credit risk, bankruptcies and other financial hardships that could decrease the demand for our products or hinder our ability to collect amounts due from [removed: customers.][added: customers or goods from our suppliers.]

If one or more of our large customers, including distributors, discontinue their relationship with us as a result of economic [removed: conditions] [added: conditions, sanctions] or otherwise, our operating results and financial condition may be materially adversely affected.

In addition, economic concerns [added: and geopolitical instability] may cause some pet owners to forgo or defer visits to veterinary practices or could reduce their willingness to treat pet health conditions or even to continue to own a pet.

Moreover, customers may seek lower price alternatives to our products if they are negatively impacted by [added: the current] poor economic conditions.

Infectious disease outbreaks, [removed: pandemics] [added: pandemics, sanctions, geopolitical instability] and widespread fear of spreading disease through human contact can cause disruptions to or negatively impact [removed: our,] our customers’ and our distributors’ business operations, which could materially adversely affect our operating results.

Furthermore, our exposure to credit and collectability risk [added: and cybersecurity risk] is higher in certain international markets and [added: as a result of the crisis resulting from Russia’s invasion of Ukraine,] our ability to mitigate such risks may be limited.

While we have procedures to monitor and limit exposure to credit and collectability [removed: risk,] [added: risk and have defensive measures in place to prevent and mitigate cyberattacks,] there can be no assurances that such procedures [added: and measures] will effectively limit such [removed: risk] [added: risks] and avoid losses.

In recent years, outbreaks of various diseases, including African Swine Fever, avian influenza, foot-and-mouth disease, bovine spongiform encephalopathy (otherwise known as BSE or mad cow disease) and porcine epidemic diarrhea virus (otherwise [added: known as PEDv), have impacted the animal health business.]

Weather conditions, including excessive cold or heat, natural [removed: disasters] [added: disasters, floods, droughts] and other events, could negatively impact our livestock customers by impairing the health or growth of their animals or the production or availability of feed.

If such events affect our customers’ businesses, they may purchase [removed: fewer Zoetis products, and our revenues may be negatively impacted.]

[removed: Moreover, there] [added: There] has been a broad range of proposed and promulgated state, national and international regulation aimed at reducing the effects of climate change.

Russia’s invasion of Ukraine and the imposition of sanctions and business disruptions and the measures taken in China to combat the COVID-19 pandemic, as well as inflation, are examples of recent global economic conditions that could have a material adverse effect on our operating results, financial condition and liquidity.

In addition, we cannot predict the impact or affect on our business of any future pandemics or disease outbreaks that may occur.

We may be subject to litigation or government investigations in connection with, or as a result of, acquisitions, dispositions, licenses or other alliances.

fewer Zoetis products, and our revenues may be negatively impacted.

success when introduced into new markets.

Our licenses or permits for animal testing could be revoked or put on hold due to animal welfare events that may occur.

- the failure to accurately forecast demand for our products;

For example, we sell limited humanitarian animal health products, including medicines, diagnostics and vaccines, to Russia and Iran, in compliance with economic sanctions affecting these countries.

In addition, our internal control policies and procedures may not protect us from reckless or criminal acts committed by our employees and agents.

The legal environment surrounding data privacy is demanding with the frequent imposition of new and changing regulatory requirements.

Our aspirations, goals and disclosures related to environmental, social and governance (“ESG”) matters expose us to numerous risks, including risks to our reputation.

Our Driven to Care sustainability program includes various ESG aspirations and goals.

These goal statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.

Our efforts to accomplish and accurately report on these goals and objectives present numerous operational, reputational, financial, legal and other risks, any of which could have a material negative impact, including on our reputation.

Our ability to achieve any goal or objective, including with respect to environmental and diversity initiatives, is subject to numerous risks, many of which are outside of our control.

Examples of such risks include: (1) the availability and cost of low- or non-carbon-based energy sources and technologies, (2) evolving regulatory requirements affecting ESG standards or disclosures, (3) our ability to recruit, develop and retain diverse talent in our labor markets, and (4) the impact of our organic growth and acquisitions or dispositions of businesses or operations.

The standards for tracking and reporting on ESG matters are relatively new, have not been harmonized and continue to evolve.

Our processes and controls may not always align with evolving standards for identifying, measuring and reporting ESG metrics, our interpretation of reporting standards that may be required by the SEC, European and other regulators may differ from those of others and such standards may change over time, any of which could result in significant revisions to our goals or reported progress in achieving such goals.

If our ESG practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation, our ability to attract or retain employees and our attractiveness as an investment, business partner or acquirer could be negatively impacted.

Similarly, our failure or perceived failure to pursue or fulfill our goals, targets and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could also have similar negative impacts and expose us to government enforcement actions and private litigation.

- compliance with a wide variety of potentially changing and conflicting laws and regulations, such as the FCPA, the U.K. Bribery Act of 2010 and similar anti-bribery and corruption-related laws globally, including labor laws, tax laws, tariffs and those relating to environmental, health and safety requirements;

restrictions on banking and commercial activities in those countries.

On December 15, 2022, the EU Council confirmed its adoption of the Pillar Two 15% global minimum tax.

Under the directive, EU members have until December 31, 2023 to implement the minimum tax into their domestic law.

In addition, global minimum tax legislation has been proposed and/or enacted in various other jurisdictions.

Summary of Risk Factors

Our business is subject to a number of risks of which you should be aware before making a decision to invest in our common stock.

These risks are more fully described in this “Risk Factors” section, including the following:

- The COVID-19 pandemic has negatively affected the global economy; has disrupted our and our customers', suppliers', and vendors' operations; has negatively affected certain elements of our business and operations; and may materially adversely affect our business, financial condition, results of operations and/or cash flows.

- Our products are subject to unanticipated safety, quality or efficacy concerns.

- Our results of operations are dependent on the success of our top-selling products.

- Generic and other products may be viewed as more cost-effective than our products.

- The animal health industry is highly competitive.

- Disruptive innovations and advances in medical practices and technologies could negatively affect the market for our products.

- Consolidation of our customers and distributors could negatively affect the pricing of our products.

- Changes in distribution channels for companion animal products could negatively impact our market share, margins and distribution of our products.

- Restrictions and bans on the use of and consumer preferences regarding antibacterials in food-producing animals may become more prevalent.

- Perceived adverse effects linked to the consumption of food derived from animals that utilize our products or animals generally could cause a decline in the sales of such products.

- Increased regulation or decreased governmental financial support relating to the raising, processing or consumption of food-producing animals could reduce demand for our livestock products.

- An outbreak of infectious disease carried by animals could negatively affect the sale and production of our products.

- Our business may be negatively affected by weather conditions, natural disasters and the availability of natural resources.

- Climate change could have a material adverse impact on our and our customer's businesses.

- Our business may be harmed if we are unable to retain and hire executive officers or other key personnel.

- Our R&D, acquisition and licensing efforts may fail to generate new products and product lifecycle innovations.

- We may experience difficulties or delays in the development, manufacturing and commercialization of new products.

- Our R&D relies on evaluations in animals, which may become subject to bans or additional restrictive regulations.

- Manufacturing problems and capacity imbalances may cause product launch delays, inventory shortages, recalls or unanticipated costs.

- There may be delays and additional costs due to changes to our existing manufacturing facilities and the construction of new manufacturing plants.

Risks related to legal matters and regulation

- Our business is subject to substantial regulation.

- The misuse or off-label use of our products may harm our reputation or result in financial or other damages.

- Laws and regulations governing global trade compliance could adversely impact our business.

- Our operations and reputation may be impacted if we do not comply with continually changing laws and regulations regarding data privacy.

Risks related to operating in foreign jurisdictions

- A significant portion of our operations are conducted in foreign jurisdictions, including jurisdictions presenting a high risk of bribery and corruption, and are subject to the economic, political, legal and business environments of the countries in which we do business.

- We may not be able to realize the expected benefits of our investments in emerging markets and are subject to certain risks due to our presence in emerging markets, including political or economic instability and failure to adequately comply with legal and regulatory requirements.

Risks related to intellectual property

- The alleged intellectual property rights of third parties may negatively affect our business.

- If our intellectual property rights are challenged or circumvented, competitors may be able to take advantage of our research and development efforts.

Risks related to information technology

- We may be unable to adequately protect our information technology systems from cyber-attacks, breaches of security or misappropriation of data, which could result in the disclosure of confidential information, damage our reputation, and subject us to significant financial and legal exposure.

Risks related to our relationship with Pfizer

- Certain of our directors may have actual or potential conflicts of interest because of their positions with Pfizer.

- We are dependent on Pfizer to prosecute, maintain and enforce certain intellectual property.

- If there is a later determination that the Exchange Offer or certain related transactions are taxable for U.S. federal income tax purposes because the facts, assumptions, representations or undertakings underlying the IRS private letter ruling and/or any tax opinion are incorrect or for any other reason, we could incur significant liabilities.

A discussion regarding our financial condition and results of operations for fiscal [removed: 2021] [added: 2022] compared to fiscal [removed: 2020] [added: 2021] is presented below.

A discussion regarding our financial condition and results of operations for fiscal [removed: 2020] [added: 2021] compared to fiscal [removed: 2019] [added: 2020] can be found under Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2020,] [added: 2021,] filed with the SEC on February [removed: 16, 2021] [added: 15, 2022] (our [removed: “2020] [added: “2021] Annual Report”), which is available free of charge on the SEC’s website at www.sec.gov.

For [added: over] 70 years, we have been innovating ways to predict, prevent, detect, and treat animal illness, and continue to stand by those raising and caring for animals worldwide - from [removed: livestock farmers to] veterinarians and pet [removed: owners.][added: owners to livestock farmers and ranchers.]

Our research and development (R&D) efforts enable us to deliver innovative products to address unmet needs and evolve our product lines so [added: that] they remain relevant for our customers.

For instance, in livestock, impacts on our revenue that may result from disease outbreaks or weather conditions in a particular market or region are often offset by increased sales in other regions from exports and other species as consumers shift to other [added: animal] proteins.

A summary of our [removed: 2021] [added: 2022] performance compared with the comparable [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] periods follows:

| (MILLIONS OF DOLLARS) | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 21/20] [added: 22/21] | | | | | | [removed: 20/19] [added: 21/20] | | |

| Revenue | | | | | | $ | [removed: 7,776] [added: 8,080] | | | | | $ | [removed: 6,675] [added: 7,776] | | | | | $ | [removed: 6,260] [added: 6,675] | | | | | [removed: 16] [added: 4] | | | | | | [removed: 7] [added: 16] | | |

| Net income attributable to Zoetis | | | | | | [removed: 2,037] [added: 2,114] | | | | | | [removed: 1,638] [added: 2,037] | | | | | | [removed: 1,500] [added: 1,638] | | | | | | [removed: 24] [added: 4] | | | | | | [removed: 9] [added: 24] | | |

| Adjusted net income(a) | | | | | | [removed: 2,240] [added: 2,297] | | | | | | [removed: 1,844] [added: 2,240] | | | | | | [removed: 1,755] [added: 1,844] | | | | | | [removed: 21] [added: 3] | | | | | | [removed: 5] [added: 21] | | |

[removed: Livestock health] and production are essential to meeting the growing demand for animal protein of a global population.

Our total revenue attributable to antibacterials for livestock was approximately [removed: $1.1] [added: $1] billion for the year ended December 31, [removed: 2021.][added: 2022.]

In addition to industry-specific factors, we, like other businesses, face challenges related to global economic [removed: conditions.][added: conditions, the current economic downturn and high inflation.]

In the past, certain of our customers and suppliers have been affected directly by economic [removed: downturns,] [added: downturns or inflation,] which decreased the demand for our products and, in some cases, hindered our ability to collect amounts due from customers.

[added: While these factors have mitigated the impact of prior downturns in the global economy, economic] challenges, including [added: the current economic downturn and] inflation, could increase cost sensitivity among our customers, which may result in reduced demand for our products, which could have a material adverse effect on our operating results and financial condition.

For more information regarding the generic competition we [removed: currently have and] expect to encounter as patents on certain of our key products expire, see *Item 1.

Their animals’ health and their ability to operate could be adversely affected if they experience a shortage of fresh water due to human [removed: population growth, climate change or floods, droughts or other weather conditions.]

We continue to closely monitor the impact of the [removed: coronavirus (COVID-19)] [added: COVID-19] pandemic and the resulting global [removed: recession] [added: economic downturn] on all aspects of our business across geographies, including how it has and may continue to impact our customers, workforce, suppliers and vendors.

In addition, a number of factors could cause production interruptions that could result in launch delays, inventory shortages, recalls, unanticipated costs or issues with our [removed: agreements under which we] supply [added: agreements with] third parties.

In [removed: 2021,] [added: 2022,] we experienced [removed: isolated] supply [added: chain] challenges for [removed: Librela, Solensia] [added: certain products including Simparica Trio,] and [added: the component parts of certain products including Librela and Solensia, and] some of our other products, resulting from strong demand as well as competition for manufacturing inputs with human health vaccine development during the pandemic.

[removed: Some of these challenges are expected to continue in 2022, but are being managed by our] [added: Our] global manufacturing network [removed: through certain] [added: team remains committed to addressing specific issues with ongoing] supply chain optimizations, controlled launches for new products in additional markets and customer coordination.

For the year ended December 31, [removed: 2021,] [added: 2022,] approximately [removed: 44%] [added: 42%] of our revenue was denominated in foreign currencies.

For the year ended December 31, [removed: 2021,] [added: 2022,] approximately [removed: 56%] [added: 58%] of our total revenue was in U.S. dollars.

Our year-over-year total revenue growth was [removed: favorably] [added: unfavorably] impacted by [removed: 1%] [added: 4%] from changes in foreign currency values relative to the U.S. dollar.

In [removed: 2021,] [added: 2022,] our two top-selling [removed: products, Apoquel] [added: products] and [added: product lines,] Simparica/Simparica [removed: Trio,] [added: Trio and Apoquel,] each contributed approximately [added: 12% and] 10% of our revenue, [added: respectively,] and combined with our next three top-selling [removed: products,] [added: products and product lines, Cytopoint,] Revolution/Revolution [removed: Plus/Stronghold, Cytopoint] [added: Plus/Stronghold] and [removed: the] ceftiofur line, these five [added: products and product lines] contributed approximately [removed: 33%] [added: 37%] of our revenue.

Our ten top-selling [added: products and] product lines contributed [removed: 47%] [added: 49%] of our revenue.

For additional information regarding our products, including descriptions of our product lines that each represented approximately 1% or more of our revenue in [removed: 2021,] [added: 2022,] see *Item 1.

For a description of our significant accounting policies, see Notes to Consolidated Financial [removed: Statements— *Note] [added: Statements—*Note] 3.

See also Notes to Consolidated Financial [removed: Statements— *Note] [added: Statements—*Note] 3.

For a discussion about the application of fair value to our long-term debt and financial instruments, see Notes to Consolidated Financial [removed: Statements—][added: Statements—*Note 9.]

For a discussion about the application of fair value to our business combinations, see Notes to Consolidated Financial [removed: Statements— *Note] [added: Statements—*Note] 3.

For further information about the risks associated with estimates and assumptions, see Notes to Consolidated Financial [removed: Statements— *Note] [added: Statements—*Note] 3.

Our impairment review processes are described below and in Notes to Consolidated Financial [removed: Statements— *Note] [added: Statements—*Note] 3.

We did not have any [removed: significant] [added: material] intangible asset impairment charges for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019.][added: 2020.]

While all identifiable intangible assets can be impacted by events and thus lead to impairment, in general, identifiable intangible assets that are at the highest risk of impairment include IPR&D assets [removed: (approximately $88] [added: ($77] million as of December 31, [removed: 2021).][added: 2022).]

In [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] we performed a periodic quantitative impairment assessment as of September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively, which did not result in the impairment of goodwill associated with any of our reporting units.

For a description of our accounting policy, see Notes to Consolidated Financial [removed: Statements— *Note] [added: Statements—*Note] 3.

For a discussion about income tax contingencies, see Notes to Consolidated Financial [removed: Statements— *Note] [added: Statements—*Note] 8D.

For a discussion about legal contingencies, guarantees and indemnifications, see Notes to Consolidated Financial [removed: Statement— *Note] [added: Statement—*Note] 18.

| | | | | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | [removed: %] [added: $] Change | | | | | | | | |

Livestock health

31 |

However, some of these challenges are expected to continue in 2023.

32 |

Since 2021, the first year of generic competition, sales of Draxxin declined by 45% in the U.S., its largest market, and additional declines are expected in subsequent years.

Russia’s Invasion of Ukraine

Russia’s invasion of Ukraine and the global response, including sanctions imposed by the United States and other countries, have increased global economic and political uncertainty.

As we announced on March 16, 2022, our first concern remains the safety of our colleagues and their families in Ukraine.

Our operations in Russia are focused on maintaining a supply of medicines and vaccines in compliance with any sanctions that are put in place.

We do not directly source input materials or components from Russia and do not have any manufacturing plants in Russia or Ukraine.

This crisis did not have a material adverse effect on our results or financial condition during 2022 and we do not expect it to have a material adverse effect on our results or financial condition going forward.

COVID-19 Update

33 |

population growth, climate change or floods, droughts or other weather conditions.

34 |

35 |

36 |

37 |

| Revenue | | | | | | $ | 8,080 | | | | | $ | 7,776 | | | | | $ | 6,675 | | | | | 4 | | | | | | 16 | | |

| *% of revenue* | | | | | | 30.4 | | % | | | | *29.6* | | *%* | | | | *30.8* | | *%* | | | | | | | | | | | | |

| (MILLIONS OF DOLLARS) | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 22/21 | | | | | | 21/20 | | |

| Total Revenue | | | | | | $ | 8,080 | | | | | $ | 7,776 | | | | | $ | 6,675 | | | | | 4 | | | | | | 16 | | |

- volume decrease from other in-line products of approximately 1%.

| (MILLIONS OF DOLLARS) | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 22/21 | | | | | | 21/20 | | |

| % of revenue | | | | | | 30.4 | | % | | | | 29.6 | | % | | | | 30.8 | | % | | | | | | | | | | | | |

2022 vs. 2021

Cost of sales as a percentage of revenue was 30.4% in 2022, compared with 29.6% in 2021.

The increase was primarily as a result of:

- price increases.

| (MILLIONS OF DOLLARS) | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 22/21 | | | | | | 21/20 | | |

2022 vs. 2021

- higher travel and entertainment expenses;

- investments in information technology; and

- higher bad debt reserves for accounts receivables,

- a decrease in certain compensation-related costs due to lower bonus and incentive related expenses:

- charitable contributions in the prior year.

| (MILLIONS OF DOLLARS) | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 22/21 | | | | | | 21/20 | | |

2022 vs. 2021

- higher other operating costs; and

partially offset by:

While these factors have mitigated the impact of prior downturns in the global economy, future economic

Uncertainty Relating to COVID-19

Although we are unable to fully predict the impact that the COVID-19 pandemic will ultimately have on our future financial position and operating results, we continue to monitor the potential effects, including impacts on our supply chain, the effect on customer demand, and changes to our operations.

*Note 9.

* Calculation not meaningful.

| % of revenue | | | | | | 30 | | % | | | | 31 | | % | | | | 32 | | % | | | | | | | | | | | | |

Cost of sales as a percentage of revenue decreased from 31% to 30% in 2021 compared with 2020, primarily as a result of:

- price increases,

| % of revenue | | | | | | 26 | | % | | | | 26 | | % | | | | 26 | | % | | | | | | | | | | | | |

- an increase in investments to support revenue growth;

- higher charitable contributions; and

- the reduced impact of purchase accounting adjustments and certain significant items.

Amortization of intangible assets increased $1 million, or 1%, in 2021 compared with 2020, primarily as a result of certain intangible assets acquired during 2021 and 2020.

The higher effective tax rate in 2021 compared with 2020 is primarily due to the following components:

- changes in the jurisdictional mix of earnings, which includes the impact of the location of earnings from operations and repatriation costs.

In addition, 2021 includes a tax benefit related to foreign-derived intangible income;

- a $6 million and $19 million discrete tax benefit recorded in 2021 and 2020, respectively, related to changes in various other tax items;

- a $1 million discrete tax expense and a $4 million discrete tax benefit recorded in 2021 and 2020, respectively, related to a remeasurement of deferred tax assets and liabilities as a result of changes in statutory tax rates; and

- a $24 million and $29 million discrete tax benefit recorded in 2021 and 2020, respectively, related to the excess tax benefits for share-based payments,

- a $5 million discrete tax expense recorded in 2020 related to changes in valuation allowances; and

- an $8 million and $4 million discrete tax benefit recorded in 2021 and 2020, respectively, related to the effective settlement of certain issues with tax authorities.

These changes did not impact the determination of our operating segments, however they resulted in the reallocation of certain costs between segments.

In 2020, the company realigned certain management responsibilities.

These changes primarily include the following: (i) R&D costs related to our aquaculture business, which were previously reported in our international commercial segment, are now reported in Other business activities; (ii) certain other miscellaneous costs, which were previously reported in international commercial segment results, are now reported in Corporate; and (iii) certain diagnostics and other miscellaneous costs, which were previously reported in our U.S. results, are now reported in Corporate.

Certain reclassifications of prior year information have been made to conform to the current year's presentation.

| | | | | | | | | | | | | | | | 21/20 | | | | | | | | | | | | | | | | | | 20/19 | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | 21/20 | | | | | | | | | | | | 20/19 | | | | | | | | |

Cattle product sales declined as a result of increased generic competition and challenges in the beef and dairy end-markets due to rising input costs.

The poultry portfolio declined as a result of the expanded use of lower cost alternatives and smaller flock sizes reducing disease pressure, as well as generic competition.

The decline in swine product sales was primarily due to pricing pressures on our anti-infective and vaccine portfolio and a non-recurring government purchase in the prior year.

Also contributing to growth were our key dermatology portfolio, vaccine products, the recent launches of our mAb therapies, Librela and Solensia, and diagnostics products.

Growth in cattle product sales was mainly due to the effect of marketing campaigns, key account penetration and favorable export market conditions in Brazil and favorable conditions in other emerging markets.

Sales of swine products grew as a result of expanding pork production in the wake of African Swine Fever in China in the first half of the year.

Fish growth was due to an increase in sales of the Alpha Flux sea lice treatment product, an increase in vaccine sales in key salmon markets and the 2020 acquisition of Fish Vet Group.

Lower interest income was offset by lower interest expense.

In addition, 2021 includes a tax benefit related to foreign-derived intangible income, (ii) a $7 million and $20 million net discrete tax benefit recorded in 2021 and 2020, respectively, related to changes in other tax items, (iii) a $24 million and $29 million discrete tax benefit recorded in 2021 and 2020, respectively, related to the excess tax benefits for share-based payments, and (iv) a $1 million discrete tax expense and a $3 million discrete tax benefit recorded in 2021 and 2020, respectively, related to a remeasurement of deferred tax assets and liabilities as a result of changes in statutory tax rates, partially offset by an $8 million and $4 million net discrete tax benefit recorded in 2021 and 2020, respectively, related to the effective settlement of certain issues with tax authorities.

The higher effective tax rate for 2020, compared with 2019, was primarily attributable to (i) changes in the jurisdictional mix of earnings, which includes the impact of the location of earnings, repatriation costs, operating fluctuations in the normal course of business and the impact of non-deductible and non-taxable items, (ii) an $18 million net discrete tax benefit recorded in 2019 related to changes in valuation allowances, and (iii) a $4 million and $10 million net discrete tax benefit recorded in 2020 and 2019, respectively, related to the effective settlement of certain issues with tax authorities, partially offset by (i) a $20 million and $4 million net discrete tax benefit recorded in 2020 and 2019, respectively, related to changes in other tax items, and (ii) a $29 million and $20 million discrete tax benefit recorded in 2020 and 2019, respectively, related to the excess tax benefits for share-based payments.

| | | | | | | | | | | | | | | | | | | | | |

51 |

| Supply network strategy(e) | | | | | | 3 | | | | | | 4 | | | | | | 7 | | |

We use [removed: cross-currency swap contracts] [added: foreign exchange derivative instruments] designated as net investment hedges to hedge the foreign currency risks related to our investment in foreign subsidiaries.

These [removed: cross-currency swap contracts] [added: foreign exchange derivative instruments] serve to offset the foreign currency translation risk from certain of our foreign operations.

Our [removed: cross-currency swap] [added: foreign currency forward-exchange] contracts at December 31, [removed: 2021] [added: 2022] were analyzed to determine their sensitivity to foreign exchange rate changes.

If the U.S. dollar were to strengthen or weaken against all other currencies by 10%, the amount recorded in cumulative translation adjustment (CTA) within *Accumulated other comprehensive loss* related to our net investment hedge would increase or decrease by approximately [removed: $86] [added: $79] million.

Our [removed: forward-exchange contracts] [added: foreign exchange derivative instruments] at December 31, [removed: 2021] [added: 2022] were analyzed to determine their sensitivity to foreign exchange rate changes.

If the U.S. dollar were to strengthen or weaken against all other currencies by 10%, the fair value of these contracts would [removed: decrease or] increase [added: or decrease] by [removed: $2] [added: $5] million.

The foreign currency gains and losses on the assets and liabilities are recorded in *Other [removed: income (deductions)-net*.][added: (income)/deductions-net*.]

Additionally, as of December 31, [removed: 2021,] [added: 2022,] because we held certain interest rate swap agreements that have the economic effect of modifying the fixed-interest obligations associated with our 3.900% Senior Notes due 2028 and our 2.00% Senior Notes due 2030, a portion of the fixed-rate interest payable on these senior notes effectively became variable based on LIBOR or SOFR.

At December 31, [removed: 2021,] [added: 2022,] there were no commercial paper borrowings outstanding and no outstanding principal balance under our revolving credit facility.

As of December 31, [removed: 2021,] [added: 2022,] if LIBOR or SOFR-based interest rates would have been higher by 100 basis points, the change would have increased our interest expense annually by approximately $3 million, as it relates to our fixed to floating interest rate swap agreements.

A 100-basis point [removed: change] [added: increase or (decrease)] in LIBOR or SOFR-based interest rates would have resulted in [removed: an] [added: a $3 million] increase or (decrease) in the fair value of our forward-starting interest rate swaps [removed: by $47 million and $(53) million, respectively] at December 31, [removed: 2021.][added: 2022.]

At December 31, [removed: 2021,] [added: 2022,] our cash equivalents were primarily invested in money market funds.

51 |

59 |

We have a diversified business, commercializing products across eight core species: dogs, cats and horses (collectively, companion animals) and cattle, swine, poultry, fish and sheep (collectively, livestock); and within seven major product categories: [removed: vaccines,] parasiticides, [removed: anti-infectives,] [added: vaccines,] dermatology, [added: anti-infectives,] other pharmaceutical products, medicated feed additives and animal health diagnostics.

For [added: over] 70 years, we have been innovating ways to predict, prevent, detect, and treat animal illness, and continue to stand by those raising and caring for animals worldwide - from [removed: livestock farmers to] veterinarians and pet [removed: owners.][added: owners to livestock farmers and ranchers.]

Unless the context requires otherwise, references to “Zoetis,” “the company,” “we,” “us” or “our” in this Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2021 (2021] [added: 2022 (2022] Annual Report) refer to Zoetis Inc., a Delaware corporation, and its subsidiaries.

In addition, unless the context requires otherwise, references to “Pfizer” in this [removed: 2021] [added: 2022] Annual Report refer to Pfizer Inc., a Delaware corporation, and its subsidiaries.

- United States (U.S.) with revenue of [removed: $4,042] [added: $4,313] million, or [removed: 52%] [added: 53%] of total revenue for the year ended December 31, [removed: 2021;] [added: 2022;] and

- International with revenue of [removed: $3,652] [added: $3,681] million, or [removed: 47%] [added: 46%] of total revenue for the year ended December 31, [removed: 2021.][added: 2022.]

In addition, our Client Supply Services (CSS) organization which provides contract manufacturing services to third parties, and our human health products, together represented approximately 1% of our total revenue for the year ended December 31, [removed: 2021.][added: 2022.]

Our [removed: 2021] [added: 2022] revenue for the U.S. and key international markets, together with the percentage of revenue attributable to companion animal and livestock products in those markets, is as follows:

[removed: |] United [removed: Kingdom | | | $234 | | | 68% | | | 32% | | |][added: Kingdom.]

For additional information regarding our performance in each of [removed: these] [added: our] operating segments and the impact of foreign exchange rates, see *Item 7.* *Management's Discussion and Analysis of Financial Condition and Results of Operations* and *Item 8.

[Financial Statements and Supplementary [removed: Data](#i557a9d1dda324175b603a2d1c8e225ee_139):*][added: Data](#i777cf052b1434fe1a50a8a8efc53fb6d_139):*]

Segment Information.* Our [removed: 2021] [added: 2022] reported revenue for each segment, by species, is as follows:

[removed: ][added: ]

Growth in the companion animal medicines, vaccines and diagnostics sector is driven by economic [removed: development,] [added: development;] related increases in disposable [removed: income] [added: income;] and increases in pet ownership and spending on pet care.

Companion animal products represented approximately [removed: 60%] [added: 64%] of our revenue for the year ended December 31, [removed: 2021.][added: 2022.]

Our livestock products primarily help prevent or treat diseases and conditions [removed: to] [added: that] allow veterinarians and producers to care for their animals and to enable the cost-effective and sustainable production of safe, high-quality animal protein.

Livestock products represented approximately [removed: 39%] [added: 35%] of our revenue for the year ended December 31, [removed: 2021.][added: 2022.]

In addition, our CSS organization, which provides contract manufacturing services to third parties, and our human health products, together represented approximately 1% of our total revenue for the year ended December 31, [removed: 2021.][added: 2022.]

- [removed: vaccines:] [added: vaccines:] biological preparations that help prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response;

- [removed: parasiticides:] [added: parasiticides:] products that prevent or eliminate external and internal parasites such as fleas, ticks and worms;

- [removed: anti-infectives:] [added: anti-infectives:] products that prevent, kill or slow the growth of bacteria, fungi or protozoa;

- [removed: dermatology products:] [added: dermatology products:] products that relieve itch associated with allergic conditions and atopic dermatitis;

- other pharmaceutical [removed: products:] [added: products:] pain and sedation, antiemetic, reproductive, and oncology products;

- [removed: medicated] [added: medicated] feed [removed: additives:] [added: additives:] products added to animal feed that provide medicines to livestock; and

- [removed: animal] [added: animal] health [removed: diagnostics: blood] [added: diagnostics: testing] and [removed: urine] analysis [removed: testing capabilities,] [added: of blood, urine and other animal samples and related products and services,] including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services and blood glucose monitors.

Our remaining revenue is derived from other non-pharmaceutical product categories, such as [removed: nutritionals and agribusiness,] [added: nutritionals,] as well as products and services in biodevices, genetic tests and precision animal health.

- Apoquel®, the first Janus kinase inhibitor for use in veterinary medicine, was approved [added: in 2013] for the control of pruritus associated with allergic dermatitis and the control of atopic dermatitis in dogs at least 12 months of age.

In 2021, a chewable version of Apoquel was approved in the European Union (EU) and the [removed: U.K.;][added: United Kingdom (U.K.) and in 2022 was approved in other key markets globally, including Mexico, Australia, Canada and Japan;]

- Fostera® PCV MH was introduced in November 2013 in the U.S. and [added: has since been] approved in [removed: the EU in 2015 and Australia in 2017.][added: many key markets globally.]

Fostera Gold PCV MH, the only vaccine to contain two PCV2 genotypes and long-lasting M. hyo coverage, was approved in the U.S. and Canada in [removed: 2018, Brazil and Mexico in 2019 and Australia, Europe (under the name CircoMax Myco)] [added: 2018] and [removed: Japan] [added: has since been approved] in [removed: 2020.][added: many key markets globally.]

The Fostera franchise also includes Fostera/Suvaxyn® PRRS, which was approved in the U.S. in 2015 and [removed: in Taiwan, Vietnam and EU countries] [added: has since been approved] in [added: many key markets globally.]

- Librela® (bedinvetmab), the first injectable mAb therapy for monthly alleviation of osteoarthritis (OA) pain in dogs, was approved in the EU and Switzerland in 2020, [removed: and] Canada, Brazil, and the U.K. in [removed: 2021;][added: 2021 and Australia and Japan in 2022;]

[removed: In 2021, we] [added: We] expanded Poulvac Procerta HVT-ND into new markets, including Brazil, Canada and the [removed: Philippines;][added: Philippines in 2021 and in 2022 expanded Poulvac Procerta HVT-IBD into Brazil.]

- SolensiaTM (frunevetmab), the first injectable mAb therapy for monthly alleviation of OA pain in cats, was approved in Switzerland in 2020, Canada, the EU and the U.K. in 2021 and the [removed: U.S.] [added: U.S., Australia and Japan] in 2022;

We pursue the development of new vaccines for emerging infectious diseases, with an operating philosophy of “first to know and fast to market.” Examples of the successful execution of this strategy include the first experimental [removed: COVID-19] [added: coronavirus (COVID-19)] vaccine to help protect the health and well-being of more than 100 mammalian species living in zoos around the world; the first equine vaccine for West Nile virus in the U.S. and EU; the first swine vaccine for pandemic H1N1 influenza virus in the U.S.; the first [removed: fully] licensed vaccine [removed: to help reduce disease caused by] [added: against] the [removed: Georgia 08 variant of infectious bronchitis virus (IBV)] [added: pandemic H5N1 bird flu] in [removed: poultry;] [added: the U.S. and EU;] a conditionally licensed vaccine to help fight porcine epidemic diarrhea virus (PEDv) in the U.S.; and the first conditionally licensed vaccine to help prevent the H3N2 type of canine influenza that emerged in the U.S. In 2019, Zoetis established a research facility with Texas A&M University to develop vaccines for transboundary and emerging diseases in animals, including Foot-and-Mouth Disease (FMD), a virus that can cause serious illness in cattle, pigs, and sheep.

In 2020, the company opened a research lab at Colorado State University in a partnership to increase our understanding of the potential use of immunomodulators in livestock that [removed: would] [added: could] reduce the need for antibiotics, as well as advance our understanding of the biology of key diseases affecting companion animals which could lead to new therapies that can treat chronic health conditions in pets.

Pharmaq also established a new diagnostics lab in Norway, the country with the highest density of salmon fish farmers in the world, that [removed: will serve] [added: serves] as a hub for research and testing.

In 2019, the company acquired Phoenix Central Laboratory for Veterinarians, Inc. [removed: (Phoenix Lab)] and ZNLabs, LLC [removed: (ZNLabs)] marking its entry into reference laboratory services and building on a strategy to develop a more comprehensive diagnostics offering with enhanced value for veterinarians.

The Zoetis diagnostic portfolio also includes the Witness®, Serelisa® and ProFlok® lines of immunodiagnostic kits, which provide disease detection capabilities for various species, including dogs, cats, cattle, [removed: pigs] [added: swine] and poultry.

In 2020, the company launched Vetscan Imagyst™ in the U.S., Australia, Ireland, New Zealand, and the U.K. In [removed: 2021] [added: 2021,] we expanded to Canada, Spain, Germany, Italy, Netherlands, Belgium and Luxembourg.

| United States | | | $4,313 | | | 77% | | | 23% | | |

| Total International | | | $3,681 | | | 51% | | | 49% | | |

| Australia | | | $289 | | | 46% | | | 54% | | |

| Brazil | | | $330 | | | 36% | | | 64% | | |

| Canada | | | $238 | | | 61% | | | 39% | | |

| Chile | | | $141 | | | 13% | | | 87% | | |

| China | | | $382 | | | 66% | | | 34% | | |

| France | | | $126 | | | 60% | | | 40% | | |

| Germany | | | $176 | | | 73% | | | 27% | | |

| Italy | | | $111 | | | 72% | | | 28% | | |

| Japan | | | $173 | | | 68% | | | 32% | | |

| Mexico | | | $136 | | | 32% | | | 68% | | |

| Spain | | | $118 | | | 57% | | | 43% | | |

| United Kingdom | | | $235 | | | 73% | | | 27% | | |

| Other Developed | | | $468 | | | 48% | | | 52% | | |

| Other Emerging | | | $758 | | | 38% | | | 62% | | |

Since January 2014, we have launched Apoquel in many key markets globally.

The product has since been approved in many key markets globally.

In 2022, we further expanded our line of recombinant vector vaccines with the launch of Poulvac Procerta HVT-IBD-ND in the U.S., which is an advanced trivalent vector vaccine that delivers powerful early protection against Marek's disease, infectious bursal disease and Newcastle disease in one dose;

- Protivity®, a modified-live bacterial vaccine that is effective in protecting healthy beef and dairy cattle against respiratory disease caused by Mycoplasma bovis (M. bovis), was approved in the U.S. in 2022;

In 2021, the company added digital cytology testing to the Vetscan Imagyst platform and in 2022 the company added AI blood smear testing to the Vetscan Imagyst platform.

In 2022, the company completed the acquisition of Jurox, an animal health company based in Australia, which brings the company a range of companion animal and livestock products and provides the company with future growth opportunities, manufacturing capacity and increased capabilities in Australia.

Also in 2022, the company acquired Basepaws, a petcare genetics company that provides pet owners with genetic tests, analytics and early health risk assessments, which help pet owners and veterinarians understand an individual pet’s risk for disease and can lead to more meaningful engagements and increased likelihood of early detection and treatment of disease.

In 2022, we had 15 products and product lines with revenues of $100 million or more.

| Librela® | | | | | | An injectable monthly antibody therapy to alleviate osteoarthritis pain in dogs | | | | | | Dogs | | |

| Product / product line | | | | | | Description | | | | | | Primary species | | |

In regions where we do not maintain a direct commercial presence, we rely solely on distributors for these services.

In certain markets, we also sell certain companion animal products through retail and e-commerce outlets.

| Campinas | | | | | | Brazil | | | | | | Rathdrum | | | | | | Ireland | | |

| Catania | | | | | | Italy | | | | | | Rutherford | | | | | | Australia | | |

| Kalamazoo | | | | | | Michigan, U.S. | | | | | | Tullamore | | | | | | Ireland | | |

| Lincoln | | | | | | Nebraska, U.S. | | | | | | Weibern | | | | | | Austria | | |

| Louvain-la-Neuve | | | | | | Belgium | | | | | | Wellington | | | | | | New Zealand | | |

We regularly evaluate the adequacy of our manufacturing capabilities and are currently in the process of expanding these capabilities at certain existing sites.

Nonetheless, we continue to face increased competition from generic products and lower cost alternatives.

products.

In addition we are subject to a wide variety of state level regulations in the United States covering topics such as the environment, animal welfare and privacy

The centralized procedure is mandatory for certain types of products, such as those developed by means of recombinant DNA technology or novel therapeutic veterinary medicinal products.

The U.K. is no longer a member of the EU and the making, updating and enforcing of U.K. legislation for Veterinary Medicinal products is the responsibility of the U.K.’s Veterinary Medicine Directorate (VMD) agency.

Applications undergo rigorous assessment using the expertise of the APVMA's scientific staff

| United States | | | $4,042 | | | 74% | | | 26% | | |

| Total International | | | $3,652 | | | 47% | | | 53% | | |

| Australia | | | $259 | | | 47% | | | 53% | | |

| Brazil | | | $312 | | | 33% | | | 67% | | |

| Canada | | | $232 | | | 58% | | | 42% | | |

| Chile | | | $136 | | | 21% | | | 79% | | |

| China | | | $357 | | | 53% | | | 47% | | |

| France | | | $132 | | | 56% | | | 44% | | |

| Germany | | | $183 | | | 64% | | | 36% | | |

| Italy | | | $115 | | | 66% | | | 34% | | |

| Japan | | | $186 | | | 67% | | | 33% | | |

| Mexico | | | $133 | | | 29% | | | 71% | | |

| Spain | | | $128 | | | 46% | | | 54% | | |

| Other Developed | | | $467 | | | 45% | | | 55% | | |

| Other Emerging | | | $778 | | | 34% | | | 66% | | |


Since January 2014, we launched Apoquel in key markets including the U.S., Europe, Japan, Brazil, Australia and China.

The product has been approved in major markets since 2016, including Canada, the EU, New Zealand, Australia, Brazil and Mexico, and was approved in China in 2021.

The one-bottle formulation of Fostera PCV MH allows the convenience of a one-dose program or the flexibility of a two-dose program.

2017.

In 2021, the company added digital cytology testing to the Vetscan Imagyst platform, which offers a network of expert remote pathologists in addition to AI technology for fecal testing.

| Vanguard® L4 (4-way Lepto) | | | | | | Compatible with the Vanguard line and helps protect against leptospirosis caused by *Leptospira canicola*, *L. grippotyphosa*, *L. icterohaemorrhagiae* and *L. pomona* | | | | | | Dogs | | |

| Terramycin® line | | | | | | Antibiotic for the treatment of susceptible infections | | | | | | Cattle, poultry, sheep, swine | | |

| Catania | | | | | | Italy | | | | | | Overhalla | | | | | | Norway | | |

| Jilin | | | | | | China | | | | | | Tullamore | | | | | | Ireland | | |

| Klofta | | | | | | Norway | | | | | | Weibern | | | | | | Austria | | |

| Lincoln | | | | | | Nebraska, U.S. | | | | | | Wellington | | | | | | New Zealand | | |

We are currently in the process of qualifying a second manufacturing site in Suzhou (China).

Following our separation from Pfizer, Pfizer licensed to us the right to use certain intellectual property rights in the animal health field.

We licensed to Pfizer the right to use certain of our trademarks and substantially all of our other intellectual property rights in the human health field and all other fields outside of animal health.

In addition, Pfizer granted us a perpetual license to use certain of Pfizer's product name trademarks.

In the majority of our markets, the relevant animal health authority is separate from those governing human medicinal products.

The mutual recognition and decentralized procedures allow submissions of pharmaceuticals and vaccines.

As well as registering new

Our engagement rate in 2021 was 88%.

In response to the COVID-19 pandemic, we have implemented and continue to implement additional safety measures in all our facilities.

Timothy J.

Bettington

Mr. Bettington joined Zoetis from Boehringer Ingelheim (BI) where he served for 12 years, most recently as North American Region Head of Commercial Operations for BI’s animal health business from January 2017 to December 2019.

Mr. Bettington was also BI’s Global Head of Customer Experience from August 2015 to December 2016, and Vice President of Sales and Marketing for the United States from April 2012 to July 2015.

The aggregate market value of the voting stock held by nonaffiliates of the registrant as of June 30, [removed: 2021,] [added: 2022,] the last business day of the registrant's most recently completed second fiscal quarter, was [removed: $88,374] [added: $80,550] million.

The number of shares outstanding of the registrant's common stock as of February [removed: 11, 2022] [added: 10, 2023] was [removed: 471,970,580] [added: 463,386,716] shares.

Portions of the registrant’s Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Shareholders (hereinafter referred to as the [removed: “2022] [added: “2023] Proxy Statement”) are incorporated into Part III of this Form 10-K.

| [PART [removed: I](#i557a9d1dda324175b603a2d1c8e225ee_10)] [added: I](#i777cf052b1434fe1a50a8a8efc53fb6d_10)] | | | | | | | | | | | | Page | | |

| Item 1. | | | | | | [removed: [Business](#i557a9d1dda324175b603a2d1c8e225ee_13)] [added: [Business](#i777cf052b1434fe1a50a8a8efc53fb6d_13)] | | | | | | | | |

| | | | | | | [Operating [removed: Segments](#i557a9d1dda324175b603a2d1c8e225ee_19)] [added: Segments](#i777cf052b1434fe1a50a8a8efc53fb6d_19)] | | | | | | [removed: [1](#i557a9d1dda324175b603a2d1c8e225ee_19)] [added: [1](#i777cf052b1434fe1a50a8a8efc53fb6d_19)] | | |

| | | | | | | [International [removed: Operations](#i557a9d1dda324175b603a2d1c8e225ee_25)] [added: Operations](#i777cf052b1434fe1a50a8a8efc53fb6d_25)] | | | | | | [removed: [6](#i557a9d1dda324175b603a2d1c8e225ee_25)] [added: [6](#i777cf052b1434fe1a50a8a8efc53fb6d_25)] | | |

| | | | | | | [Sales and [removed: Marketing](#i557a9d1dda324175b603a2d1c8e225ee_28)] [added: Marketing](#i777cf052b1434fe1a50a8a8efc53fb6d_28)] | | | | | | [removed: [6](#i557a9d1dda324175b603a2d1c8e225ee_28)] [added: [6](#i777cf052b1434fe1a50a8a8efc53fb6d_28)] | | |

| | | | | | | [Research and [removed: Development](#i557a9d1dda324175b603a2d1c8e225ee_34)] [added: Development](#i777cf052b1434fe1a50a8a8efc53fb6d_34)] | | | | | | [removed: [7](#i557a9d1dda324175b603a2d1c8e225ee_34)] [added: [7](#i777cf052b1434fe1a50a8a8efc53fb6d_34)] | | |

| | | | | | | [Manufacturing and Supply [removed: Chain](#i557a9d1dda324175b603a2d1c8e225ee_37)] [added: Chain](#i777cf052b1434fe1a50a8a8efc53fb6d_37)] | | | | | | [removed: [7](#i557a9d1dda324175b603a2d1c8e225ee_37)] [added: [7](#i777cf052b1434fe1a50a8a8efc53fb6d_37)] | | |

| | | | | | | [Intellectual [removed: Property](#i557a9d1dda324175b603a2d1c8e225ee_43)] [added: Property](#i777cf052b1434fe1a50a8a8efc53fb6d_43)] | | | | | | [removed: [8](#i557a9d1dda324175b603a2d1c8e225ee_43)] [added: [9](#i777cf052b1434fe1a50a8a8efc53fb6d_43)] | | |

| | | | | | | [Human Capital [removed: Management](#i557a9d1dda324175b603a2d1c8e225ee_49)] [added: Management](#i777cf052b1434fe1a50a8a8efc53fb6d_49)] | | | | | | [removed: [11](#i557a9d1dda324175b603a2d1c8e225ee_49)] [added: [11](#i777cf052b1434fe1a50a8a8efc53fb6d_49)] | | |

| | | | | | | [Information about our Executive [removed: Officers](#i557a9d1dda324175b603a2d1c8e225ee_52)] [added: Officers](#i777cf052b1434fe1a50a8a8efc53fb6d_52)] | | | | | | [removed: [12](#i557a9d1dda324175b603a2d1c8e225ee_52)] [added: [13](#i777cf052b1434fe1a50a8a8efc53fb6d_52)] | | |

| | | | | | | [Environmental, Health and [removed: Safety](#i557a9d1dda324175b603a2d1c8e225ee_55)] [added: Safety](#i777cf052b1434fe1a50a8a8efc53fb6d_55)] | | | | | | [removed: [14](#i557a9d1dda324175b603a2d1c8e225ee_55)] [added: [14](#i777cf052b1434fe1a50a8a8efc53fb6d_55)] | | |

| | | | | | | [Available [removed: Information](#i557a9d1dda324175b603a2d1c8e225ee_58)] [added: Information](#i777cf052b1434fe1a50a8a8efc53fb6d_58)] | | | | | | [removed: [14](#i557a9d1dda324175b603a2d1c8e225ee_58)] [added: [15](#i777cf052b1434fe1a50a8a8efc53fb6d_58)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#i557a9d1dda324175b603a2d1c8e225ee_61)] [added: Factors](#i777cf052b1434fe1a50a8a8efc53fb6d_61)] | | | | | | [removed: [16](#i557a9d1dda324175b603a2d1c8e225ee_61)] [added: [16](#i777cf052b1434fe1a50a8a8efc53fb6d_61)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#i557a9d1dda324175b603a2d1c8e225ee_64)] [added: Comments](#i777cf052b1434fe1a50a8a8efc53fb6d_64)] | | | | | | [removed: [35](#i557a9d1dda324175b603a2d1c8e225ee_64)] [added: [28](#i777cf052b1434fe1a50a8a8efc53fb6d_64)] | | |

| Item 2. | | | | | | [removed: [Properties](#i557a9d1dda324175b603a2d1c8e225ee_67)] [added: [Properties](#i777cf052b1434fe1a50a8a8efc53fb6d_67)] | | | | | | [removed: [35](#i557a9d1dda324175b603a2d1c8e225ee_67)] [added: [28](#i777cf052b1434fe1a50a8a8efc53fb6d_67)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#i557a9d1dda324175b603a2d1c8e225ee_70)] [added: Proceedings](#i777cf052b1434fe1a50a8a8efc53fb6d_70)] | | | | | | [removed: [35](#i557a9d1dda324175b603a2d1c8e225ee_70)] [added: [28](#i777cf052b1434fe1a50a8a8efc53fb6d_70)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosures](#i557a9d1dda324175b603a2d1c8e225ee_73)] [added: Disclosures](#i777cf052b1434fe1a50a8a8efc53fb6d_73)] | | | | | | [removed: [35](#i557a9d1dda324175b603a2d1c8e225ee_73)] [added: [28](#i777cf052b1434fe1a50a8a8efc53fb6d_73)] | | |

| Item 5. | | | | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i557a9d1dda324175b603a2d1c8e225ee_79)] [added: Securities](#i777cf052b1434fe1a50a8a8efc53fb6d_79)] | | | | | | [removed: [36](#i557a9d1dda324175b603a2d1c8e225ee_79)] [added: [29](#i777cf052b1434fe1a50a8a8efc53fb6d_79)] | | |

| Item 7. | | | | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i557a9d1dda324175b603a2d1c8e225ee_82)] [added: Operations](#i777cf052b1434fe1a50a8a8efc53fb6d_82)] | | | | | | [removed: [38](#i557a9d1dda324175b603a2d1c8e225ee_82)] [added: [31](#i777cf052b1434fe1a50a8a8efc53fb6d_82)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i557a9d1dda324175b603a2d1c8e225ee_136)] [added: Risk](#i777cf052b1434fe1a50a8a8efc53fb6d_136)] | | | | | | [removed: [59](#i557a9d1dda324175b603a2d1c8e225ee_136)] [added: [51](#i777cf052b1434fe1a50a8a8efc53fb6d_136)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#i557a9d1dda324175b603a2d1c8e225ee_139)] [added: Data](#i777cf052b1434fe1a50a8a8efc53fb6d_139)] | | | | | | [removed: [60](#i557a9d1dda324175b603a2d1c8e225ee_139)] [added: [52](#i777cf052b1434fe1a50a8a8efc53fb6d_139)] | | |

| Item 9. | | | | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i557a9d1dda324175b603a2d1c8e225ee_241)] [added: Disclosure](#i777cf052b1434fe1a50a8a8efc53fb6d_244)] | | | | | | [removed: [100](#i557a9d1dda324175b603a2d1c8e225ee_241)] [added: [92](#i777cf052b1434fe1a50a8a8efc53fb6d_244)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#i557a9d1dda324175b603a2d1c8e225ee_244)] [added: Procedures](#i777cf052b1434fe1a50a8a8efc53fb6d_247)] | | | | | | [removed: [100](#i557a9d1dda324175b603a2d1c8e225ee_244)] [added: [92](#i777cf052b1434fe1a50a8a8efc53fb6d_247)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#i557a9d1dda324175b603a2d1c8e225ee_247)] [added: Information](#i777cf052b1434fe1a50a8a8efc53fb6d_250)] | | | | | | [removed: [100](#i557a9d1dda324175b603a2d1c8e225ee_247)] [added: [92](#i777cf052b1434fe1a50a8a8efc53fb6d_250)] | | |

| Item 9C. | | | | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i557a9d1dda324175b603a2d1c8e225ee_2755)] [added: Inspections](#i777cf052b1434fe1a50a8a8efc53fb6d_253)] | | | | | | [removed: [100](#i557a9d1dda324175b603a2d1c8e225ee_2755)] [added: [92](#i777cf052b1434fe1a50a8a8efc53fb6d_253)] | | |

| Item 10. | | | | | | [Directors, Executive Officers and Corporate [removed: Governance](#i557a9d1dda324175b603a2d1c8e225ee_253)] [added: Governance](#i777cf052b1434fe1a50a8a8efc53fb6d_259)] | | | | | | [removed: [101](#i557a9d1dda324175b603a2d1c8e225ee_253)] [added: [93](#i777cf052b1434fe1a50a8a8efc53fb6d_259)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#i557a9d1dda324175b603a2d1c8e225ee_256)] [added: Compensation](#i777cf052b1434fe1a50a8a8efc53fb6d_262)] | | | | | | [removed: [101](#i557a9d1dda324175b603a2d1c8e225ee_256)] [added: [93](#i777cf052b1434fe1a50a8a8efc53fb6d_262)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i557a9d1dda324175b603a2d1c8e225ee_259)] [added: Matters](#i777cf052b1434fe1a50a8a8efc53fb6d_265)] | | | | | | [removed: [101](#i557a9d1dda324175b603a2d1c8e225ee_259)] [added: [93](#i777cf052b1434fe1a50a8a8efc53fb6d_265)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i557a9d1dda324175b603a2d1c8e225ee_262)] [added: Independence](#i777cf052b1434fe1a50a8a8efc53fb6d_268)] | | | | | | [removed: [101](#i557a9d1dda324175b603a2d1c8e225ee_262)] [added: [93](#i777cf052b1434fe1a50a8a8efc53fb6d_268)] | | |

| Item 14. | | | | | | [Principal [removed: Account](#i557a9d1dda324175b603a2d1c8e225ee_265)[ant](#i557a9d1dda324175b603a2d1c8e225ee_265) [Fees] [added: Accountant Fees] and [removed: Services](#i557a9d1dda324175b603a2d1c8e225ee_265)] [added: Services](#i777cf052b1434fe1a50a8a8efc53fb6d_271)] | | | | | | [removed: [101](#i557a9d1dda324175b603a2d1c8e225ee_265)] [added: [93](#i777cf052b1434fe1a50a8a8efc53fb6d_271)] | | |

| Item 15. | | | | | | [removed: [Exhibit](#i557a9d1dda324175b603a2d1c8e225ee_271)[,] [added: [Exhibit,] Financial Statement [removed: Schedules](#i557a9d1dda324175b603a2d1c8e225ee_271)] [added: Schedules](#i777cf052b1434fe1a50a8a8efc53fb6d_277)] | | | | | | [removed: [102](#i557a9d1dda324175b603a2d1c8e225ee_271)] [added: [94](#i777cf052b1434fe1a50a8a8efc53fb6d_277)] | | |

| Item 16. | | | | | | [Form 10-K [removed: Summary](#i557a9d1dda324175b603a2d1c8e225ee_274)] [added: Summary](#i777cf052b1434fe1a50a8a8efc53fb6d_280)] | | | | | | [removed: [102](#i557a9d1dda324175b603a2d1c8e225ee_274)] [added: [94](#i777cf052b1434fe1a50a8a8efc53fb6d_280)] | | |

| | | | December 31, 2022 | | | | | |

| | | | | | | [Overview](#i777cf052b1434fe1a50a8a8efc53fb6d_16) | | | | | | [1](#i777cf052b1434fe1a50a8a8efc53fb6d_16) | | |

| | | | | | | [Products](#i777cf052b1434fe1a50a8a8efc53fb6d_22) | | | | | | [3](#i777cf052b1434fe1a50a8a8efc53fb6d_22) | | |

| | | | | | | [Customers](#i777cf052b1434fe1a50a8a8efc53fb6d_31) | | | | | | [7](#i777cf052b1434fe1a50a8a8efc53fb6d_31) | | |

| | | | | | | [Competition](#i777cf052b1434fe1a50a8a8efc53fb6d_40) | | | | | | [8](#i777cf052b1434fe1a50a8a8efc53fb6d_40) | | |

| | | | | | | [Regulatory](#i777cf052b1434fe1a50a8a8efc53fb6d_46) | | | | | | [9](#i777cf052b1434fe1a50a8a8efc53fb6d_46) | | |

| [PART II](#i777cf052b1434fe1a50a8a8efc53fb6d_76) | | | | | | | | | | | | | | |

| [PART III](#i777cf052b1434fe1a50a8a8efc53fb6d_256) | | | | | | | | | | | | | | |

| [PART IV](#i777cf052b1434fe1a50a8a8efc53fb6d_274) | | | | | | | | | | | | | | |

| [EXHIBIT INDEX](#i777cf052b1434fe1a50a8a8efc53fb6d_283) | | | | | | | | | | | | [95](#i777cf052b1434fe1a50a8a8efc53fb6d_283) | | |

| [SIGNATURES](#i777cf052b1434fe1a50a8a8efc53fb6d_286) | | | | | | | | | | | | [99](#i777cf052b1434fe1a50a8a8efc53fb6d_286) | | |

| | | | December 31, 2021 | | | | | |

| | | | | | | [Overview](#i557a9d1dda324175b603a2d1c8e225ee_16) | | | | | | [1](#i557a9d1dda324175b603a2d1c8e225ee_16) | | |

| | | | | | | [Products](#i557a9d1dda324175b603a2d1c8e225ee_22) | | | | | | [3](#i557a9d1dda324175b603a2d1c8e225ee_22) | | |

| | | | | | | [Customers](#i557a9d1dda324175b603a2d1c8e225ee_31) | | | | | | [7](#i557a9d1dda324175b603a2d1c8e225ee_31) | | |

| | | | | | | [Competition](#i557a9d1dda324175b603a2d1c8e225ee_40) | | | | | | [8](#i557a9d1dda324175b603a2d1c8e225ee_40) | | |

| | | | | | | [Regulatory](#i557a9d1dda324175b603a2d1c8e225ee_46) | | | | | | [9](#i557a9d1dda324175b603a2d1c8e225ee_46) | | |

| [PART II](#i557a9d1dda324175b603a2d1c8e225ee_76) | | | | | | | | | | | | | | |

| [PART III](#i557a9d1dda324175b603a2d1c8e225ee_250) | | | | | | | | | | | | | | |

| [PART IV](#i557a9d1dda324175b603a2d1c8e225ee_268) | | | | | | | | | | | | | | |

| [EXHIBIT INDEX](#i557a9d1dda324175b603a2d1c8e225ee_277) | | | | | | | | | | | | [103](#i557a9d1dda324175b603a2d1c8e225ee_277) | | |

| [SIGNATURES](#i557a9d1dda324175b603a2d1c8e225ee_280) | | | | | | | | | | | | [106](#i557a9d1dda324175b603a2d1c8e225ee_280) | | |

We have [removed: 174] [added: 189] owned and leased properties, amounting to approximately [removed: 11.9] [added: 12.5] million square feet, around the world for sales and marketing, customer service, regulatory compliance, R&D, manufacturing and distribution, and administrative support functions.

In addition, our global manufacturing network continues to be supplemented by [removed: 136] [added: 132] CMOs.

28 |

35 |

As of February [removed: 11, 2022,] [added: 10, 2023,] there were [removed: 471,970,580] [added: 463,386,716] shares of our common stock outstanding, held by [removed: 1,667] [added: 1,653] shareholders of record.

As of December 31, [removed: 2021,] [added: 2022,] there was [removed: approximately $681 million] [added: $2.6 billion] remaining under this authorization.

On December 7, 2021, our Board of Directors authorized [removed: a] [added: an additional] multi-year share repurchase program of up to $3.5 billion of our outstanding common stock.

Issuer purchases of equity securities for the three months ended December 31, [removed: 2021] [added: 2022] were as follows:

(a) The company repurchased [removed: 2,749] [added: 993] shares during the three-month period ended December 31, [removed: 2021,] [added: 2022,] that were not part of the publicly announced share repurchase authorization.

The graph below compares the cumulative total shareholder return on an investment in our common stock, the S&P 500 Index and the S&P 500 Pharmaceuticals Index for the five fiscal years beginning with the close of trading on December 31, [removed: 2016] [added: 2017] and ending December 31, [removed: 2021.][added: 2022.]

The graph assumes an investment of $100 on December 31, [removed: 2016,] [added: 2017,] in our common stock, the S&P 500 Index and the S&P 500 Pharmaceuticals Index and assumes dividends, if any, were reinvested.

[removed: ][added: ]

| | | | December 31, [removed: 2016 | | | December 31,] 2017 | | | December 31, 2018 | | | December 31, 2019 | | | December 31, 2020 | | | December 31, 2021 | | | [added: December 31, 2022 | | |]

This program was completed as of June 30, 2022.

| October 1 - October 31, 2022 | | | 385,234 | | | $148.78 | | | 384,955 | | | $2,934,545,331 | | |

| November 1 - November 30, 2022 | | | 807,282 | | | $143.37 | | | 806,710 | | | $2,818,883,845 | | |

| December 1 - December 31, 2022 | | | 1,523,900 | | | $151.67 | | | 1,523,758 | | | $2,587,042,238 | | |

| Total | | | 2,716,416 | | | $148.80 | | | 2,715,423 | | | $2,587,042,238 | | |

29 |

| Zoetis Inc. | | | $100 | | | $119.45 | | | $185.99 | | | $233.91 | | | $346.80 | | | $209.79 | | |

| S&P 500 Index | | | $100 | | | $95.62 | | | $125.72 | | | $148.85 | | | $191.58 | | | $156.88 | | |

| S&P 500 Pharmaceuticals Index | | | $100 | | | $108.09 | | | $124.40 | | | $133.76 | | | $168.21 | | | $182.43 | | |

30 |

| October 1 - October 31, 2021 | | | 296,909 | | | $201.33 | | | 296,406 | | | $819,762,190 | | |

| November 1 - November 30, 2021 | | | 324,175 | | | $218.52 | | | 323,780 | | | $749,007,056 | | |

| December 1 - December 31, 2021 | | | 296,682 | | | $230.42 | | | 294,831 | | | $680,739,112 | | |

| Total | | | 917,766 | | | $216.81 | | | 915,017 | | | $680,739,112 | | |

36 |

| Zoetis Inc. | | | $100 | | | $135.55 | | | $161.91 | | | $252.11 | | | $317.06 | | | $470.08 | | |

| S&P 500 Index | | | $100 | | | $121.83 | | | $116.49 | | | $153.17 | | | $181.35 | | | $233.41 | | |

| S&P 500 Pharmaceuticals Index | | | $100 | | | $112.57 | | | $121.68 | | | $140.04 | | | $150.58 | | | $189.36 | | |

37 |

| Reports of Independent Registered Public Accounting Firm | | | [removed: [61](#i557a9d1dda324175b603a2d1c8e225ee_142)] [added: [53](#i777cf052b1434fe1a50a8a8efc53fb6d_142)] | | |

| Consolidated Statements of Income for the Years Ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] | | | [removed: [64](#i557a9d1dda324175b603a2d1c8e225ee_148)] [added: [56](#i777cf052b1434fe1a50a8a8efc53fb6d_148)] | | |

| Consolidated Statements of Comprehensive Income for the Years Ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] | | | [removed: [65](#i557a9d1dda324175b603a2d1c8e225ee_151)] [added: [57](#i777cf052b1434fe1a50a8a8efc53fb6d_151)] | | |

| Consolidated Balance Sheets as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | [removed: [66](#i557a9d1dda324175b603a2d1c8e225ee_154)] [added: [58](#i777cf052b1434fe1a50a8a8efc53fb6d_154)] | | |

| Consolidated Statements of Equity for the Years Ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] | | | [removed: [67](#i557a9d1dda324175b603a2d1c8e225ee_160)] [added: [59](#i777cf052b1434fe1a50a8a8efc53fb6d_160)] | | |

| Consolidated Statements of Cash Flows for the Years Ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] | | | [removed: [68](#i557a9d1dda324175b603a2d1c8e225ee_163)] [added: [60](#i777cf052b1434fe1a50a8a8efc53fb6d_163)] | | |

| Notes to Consolidated Financial Statements | | | [removed: [69](#i557a9d1dda324175b603a2d1c8e225ee_166)] [added: [61](#i777cf052b1434fe1a50a8a8efc53fb6d_166)] | | |

| Schedule II—Valuation and Qualifying Accounts | | | [removed: [99](#i557a9d1dda324175b603a2d1c8e225ee_238)] [added: [91](#i777cf052b1434fe1a50a8a8efc53fb6d_241)] | | |

We have audited the accompanying consolidated balance sheets of Zoetis Inc. and subsidiaries (the Company) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February [removed: 15, 2022] [added: 14, 2023] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

As of December 31, [removed: 2021,] [added: 2022,] the Company has recorded gross unrecognized tax benefits of [removed: $189] [added: $194] million.

Amounts recorded as a reduction in accounts receivable as of December 31, [removed: 2021] [added: 2022] are approximately [removed: $216] [added: $295] million and accruals for deductions from revenue included in accrued expenses are approximately [removed: $312] [added: $285] million.

We evaluated the historical accuracy of the Company’s U.S. rebates accrual by comparing the previously recorded accrual as of December 31, [removed: 2020] [added: 2021] to the actual amount that ultimately was paid by the Company during [removed: 2021.][added: 2022.]

We have audited Zoetis Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February [removed: 15, 2022] [added: 14, 2023] expressed an unqualified opinion on those consolidated financial statements.

| (MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA) | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Revenue | | | | | | $ | [removed: 7,776] [added: 8,080] | | | | | $ | [removed: 6,675] [added: 7,776] | | | | | $ | [removed: 6,260] [added: 6,675] | |

| Cost of sales(a) | | | | | | [removed: 2,303] [added: 2,454] | | | | | | [removed: 2,057] [added: 2,303] | | | | | | [removed: 1,992] [added: 2,057] | | |

| Selling, general and administrative expenses(a) | | | | | | [removed: 2,001] [added: 2,009] | | | | | | [removed: 1,726] [added: 2,001] | | | | | | [removed: 1,638] [added: 1,726] | | |

| Research and development expenses(a) | | | | | | [removed: 508] [added: 539] | | | | | | [removed: 463] [added: 508] | | | | | | [removed: 457] [added: 463] | | |

| Amortization of intangible assets | | | | | | [removed: 161] [added: 150] | | | | | | [removed: 160] [added: 161] | | | | | | [removed: 155] [added: 160] | | |

| Restructuring charges and certain acquisition-related costs | | | | | | [removed: 43] [added: 11] | | | | | | [removed: 25] [added: 43] | | | | | | [removed: 51] [added: 25] | | |

| Interest expense, net of capitalized interest | | | | | | [removed: 224] [added: 221] | | | | | | [removed: 231] [added: 224] | | | | | | [removed: 223] [added: 231] | | |

| Other (income)/deductions––net | | | | | | [removed: 48] [added: 40] | | | | | | [removed: 17] [added: 48] | | | | | | [removed: (57)] [added: 17] | | |

| Income before provision for taxes on income | | | | | | [removed: 2,488] [added: 2,656] | | | | | | [removed: 1,996] [added: 2,488] | | | | | | [removed: 1,801] [added: 1,996] | | |

| Provision for taxes on income | | | | | | [removed: 454] [added: 545] | | | | | | [removed: 360] [added: 454] | | | | | | [removed: 301] [added: 360] | | |

| Net income before allocation to noncontrolling interests | | | | | | [removed: 2,034] [added: 2,111] | | | | | | [removed: 1,636] [added: 2,034] | | | | | | [removed: 1,500] [added: 1,636] | | |

| Less: Net loss attributable to noncontrolling interests | | | | | | (3) | | | | | | [removed: (2)] [added: (3)] | | | | | | [removed: —] [added: (2)] | | |

| Net income attributable to Zoetis Inc. | | | | | | $ | [removed: 2,037] [added: 2,114] | | | | | $ | [removed: 1,638] [added: 2,037] | | | | | $ | [removed: 1,500] [added: 1,638] | |

| Basic | | | | | | $ | [removed: 4.29] [added: 4.51] | | | | | $ | [removed: 3.44] [added: 4.29] | | | | | $ | [removed: 3.14] [added: 3.44] | |

| Diluted | | | | | | $ | [removed: 4.27] [added: 4.49] | | | | | $ | [removed: 3.42] [added: 4.27] | | | | | $ | [removed: 3.11] [added: 3.42] | |

| Basic | | | | | | [removed: 474.348] [added: 468.891] | | | | | | [removed: 475.502] [added: 474.348] | | | | | | [removed: 478.128] [added: 475.502] | | |

| Diluted | | | | | | [removed: 476.717] [added: 470.385] | | | | | | [removed: 478.569] [added: 476.717] | | | | | | [removed: 481.787] [added: 478.569] | | |

| Dividends declared per common share | | | | | | $ | [removed: 1.075] [added: 1.350] | | | | | $ | [removed: 0.850] [added: 1.075] | | | | | $ | [removed: 0.692] [added: 0.850] | |

| (MILLIONS OF DOLLARS) | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Net income before allocation to noncontrolling interests | | | | | | $ | [removed: 2,034] [added: 2,111] | | | | | $ | [removed: 1,636] [added: 2,034] | | | | | $ | [removed: 1,500] [added: 1,636] | |

| Unrealized gains/(losses) on derivatives for cash flow hedges, [removed: net(a)] [added: net of tax of $26, $5 and $(5) for the years ended December 31, 2022, 2021 and 2020, respectively(a)] | | | | | | [removed: 19] [added: 86] | | | | | | [removed: (15)] [added: 19] | | | | | | [removed: 4] [added: (15)] | | |

| Unrealized gains/(losses) on derivatives for net investment hedges, [removed: net(a)] [added: net of tax of $11, $13 and $(18) for the years ended December 31, 2022, 2021 and 2020, respectively(a)] | | | | | | [removed: 42] [added: 36] | | | | | | [removed: (58)] [added: 42] | | | | | | [removed: 12] [added: (58)] | | |

52 |

53 |

February 14, 2023

54 |

February 14, 2023

55 |

56 |

| Benefit plans: Actuarial gain, net of tax of $6, $3 and $0 for the years ended December 31, 2022, 2021 and 2020, respectively(a) | | | | | | 13 | | | | | | 6 | | | | | | — | | |

57 |

58 |

| Net income/(loss) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,114 | | | | | | — | | | | | | (3) | | | | | | 2,111 | | |

| Balance, December 31, 2022 | | | | | | 501.9 | | | | | | $ | 5 | | | | | 38.1 | | | | | | $ | (4,539) | | | | | $ | 1,088 | | | | | $ | 8,668 | | | | | $ | (817) | | | | | $ | (2) | | | | | $ | 4,403 | |

Stockholders' Equity*.

59 |

| Net income before allocation to noncontrolling interests | | | | | | $ | 2,111 | | | | | $ | 2,034 | | | | | $ | 1,636 | |

| Settlement of derivative contracts | | | | | | 114 | | | | | | — | | | | | | (6) | | |

| Proceeds from/(payments of) derivative instrument activity, net | | | | | | 23 | | | | | | 44 | | | | | | (27) | | |

We determine the implied fair value of goodwill

| Contract manufacturing & human health | | | | | | 86 | | | | | | 82 | | | | | | 83 | | |

| Total Revenue | | | | | | $ | 8,080 | | | | | $ | 7,776 | | | | | $ | 6,675 | |

| Contract manufacturing & human health | | | | | | 86 | | | | | | 82 | | | | | | 83 | | |

| Total Revenue | | | | | | $ | 8,080 | | | | | $ | 7,776 | | | | | $ | 6,675 | |

| (MILLIONS OF DOLLARS) | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| | | | | | | 7,994 | | | | | | 7,694 | | | | | | 6,592 | | |

| Contract manufacturing & human health | | | | | | 86 | | | | | | 82 | | | | | | 83 | | |

| Total Revenue | | | | | | $ | 8,080 | | | | | $ | 7,776 | | | | | $ | 6,675 | |

In certain markets, we also sell certain companion animal products through retail and e-commerce outlets.

During 2022, we completed the acquisition of Basepaws, a privately held petcare genetics company based in the U.S., which provides pet owners with genetic tests, analytics and early health risk assessments that can help manage the health, wellness and quality of care for their pets.

We also completed the acquisition of NewMetrica, a privately held company based in Scotland, that provides scientifically-developed instruments to measure quality of life in companion animals.

On September 30, 2022, after satisfying all customary closing conditions, including clearance from the Australian Competition and Consumer Commission, we completed the acquisition of Jurox.

We acquired 100% of the outstanding shares for an aggregate cash purchase price of $226 million, which was adjusted to $240 million for cash and working capital and other adjustments as of the closing date.

Net cash consideration transferred to the seller was $215 million.

As of the balance sheet date, the remaining purchase consideration of $5 million was outstanding and recorded in *Other current liabilities*.

The transaction was accounted for as a business combination, with the assets acquired and liabilities assumed measured at their respective acquisition date fair values.

The table below presents the preliminary fair values allocated to the assets and liabilities of Jurox as of the acquisition date:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| (MILLIONS OF DOLLARS) | | | Amounts | | |

| Accounts receivable | | | 8 | | |

| Other current assets | | | 1 | | |

February 15, 2022

| Benefit plans: Actuarial gain/(loss), net(a) | | | | | | 6 | | | | | | — | | | | | | (9) | | |

| Balance, December 31, 2018 | | | | | | 501.9 | | | | | | $ | 5 | | | | | 22.3 | | | | | | $ | (1,487) | | | | | $ | 1,026 | | | | | $ | 3,270 | | | | | $ | (629) | | | | | $ | — | | | | | $ | 2,185 | |

Stockholders' Equity.*

| Loss on treasury locks | | | | | | — | | | | | | (6) | | | | | | — | | |

| Proceeds from maturities and redemptions of investments | | | | | | — | | | | | | — | | | | | | 101 | | |

| Settlements on swaps designated as net investment hedges | | | | | | 44 | | | | | | (27) | | | | | | 37 | | |

| Contingent purchase price consideration | | | | | | — | | | | | | — | | | | | | 23 | | |

The transaction is subject to customary closing conditions and the satisfaction of regulatory requirements.

We expect to complete the acquisition in 2022.

During 2019, we completed the acquisitions of Platinum Performance, a nutrition-focused animal health business for companion animals, and Phoenix Lab and ZNLabs, both full service veterinary reference laboratory companies with networks of labs across the U.S. These transactions did not have a significant impact on our consolidated financial statements.

The restructuring charges for the year ended December 31, 2019 are primarily related to the acquisition of Abaxis and CEO transition-related costs.

(a) In 2021, the *Provision for taxes on income* reflects the following:

- the change in the jurisdictional mix of earnings, which includes the impact of the location of earnings from operations and repatriation costs.

- tax expense related to changes in uncertain tax positions (see *D.

Tax Contingencies*);

- a $24 million discrete tax benefit recorded in 2021 related to the excess tax benefits for share-based payments;

- an $8 million net discrete tax benefit recorded in 2021 related to the effective settlement of certain issues with tax authorities;

- a $6 million net discrete tax benefit recorded in 2021 related to changes in various other tax items; and

- a $1 million discrete tax expense recorded in 2021 related to a remeasurement of deferred tax assets and liabilities as a result of changes in statutory tax rates.

(b) In 2020, the *Provision for taxes on income* reflects the following:

- a $29 million discrete tax benefit recorded in 2020 related to the excess tax benefits for share-based payments;

- a $19 million net discrete tax benefit recorded in 2020 related to changes in various other tax items;

- a $7 million discrete tax benefit recorded in 2020 related to the remeasurement of deferred tax assets and liabilities resulting from the integration of acquired businesses;

- a $5 million discrete tax expense related to the changes in valuation allowances;

- a $4 million discrete tax benefit recorded in 2020 related to a remeasurement of deferred tax assets and liabilities as a result of changes in statutory tax rates; and

- a $4 million net discrete tax benefit recorded in 2020 related to the effective settlement of certain issues with tax authorities.

(c) In 2019, the *Provision for taxes on income* reflects the following:

- the impact of the Global Intangible Low-Tax Income tax, a new provision of the Tax Act, which became effective for the company in the first quarter of 2019;

- a $20 million discrete tax benefit recorded in 2019 related to the excess tax benefits for share-based payments;

- an $18 million discrete tax benefit related to the changes in valuation allowances;

- a $14 million net discrete tax benefit recorded in the third quarter of 2019 due to a change in tax basis related to purchase accounting;

- a $12 million net discrete tax benefit recorded in 2019 related to changes in various other tax items;

- a $10 million net discrete tax benefit recorded in 2019 related to the effective settlement of certain issues with tax authorities; and

- an $8 million discrete tax benefit recorded in 2019 related to a remeasurement of deferred tax assets and liabilities as a result of changes in statutory tax rates.

| Foreign Derived Intangible Income | | | | | | (1.1) | | | | | | — | | | | | | (0.6) | | |

| U.S. Research and Development Tax Credit | | | | | | (0.6) | | | | | | (0.7) | | | | | | (0.7) | | |

(b) In all years, the rate impact of taxation of non-U.S. operations was a decrease to our effective tax rate due to the jurisdictional mix of earnings.

(c) In 2020, the rate impact of non-U.S. operations also includes (i) a $5 million discrete tax expense related to the changes in valuation allowances, and (ii) an $8 million net discrete tax benefit related to changes in various other tax items.

In 2019, the rate impact of non-U.S. operations also includes (i) an $18 million discrete tax benefit related to the changes in valuation allowances, (ii) a $14 million net discrete tax benefit due to a change in tax basis related to purchase accounting, and (iii) a $10 million discrete tax benefit related to the effective settlement of certain issues with non-U.S. tax authorities.

Based upon that evaluation as of December 31, [removed: 2021,] [added: 2022,] the company's Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective at a reasonable level of assurance in alerting them in a timely manner to material information required to be disclosed in our periodic reports filed with the SEC.

Based on our evaluation under the framework in *Internal Control - Integrated Framework*, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2021.][added: 2022.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report included herein.

92 |

100 |

Information about our directors is incorporated by reference from the discussion under the heading *Item 1*\-*Election of Directors* in our [removed: 2022] [added: 2023] Proxy Statement.

Information about compliance with Section 16(a) of the Exchange Act is incorporated by reference from the discussion under the heading *Delinquent Section 16(a) Reports* in our [removed: 2022] [added: 2023] Proxy Statement.

Information about the Zoetis Code of Conduct governing our employees, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer and Controller, and [removed: the Code of Business Conduct and Ethics for members of] our Board of Directors, is incorporated by reference from the discussions under the heading *Corporate Governance at Zoetis* in our [removed: 2022] [added: 2023] Proxy Statement.

Information regarding the procedures by which our stockholders may recommend nominees to our Board of Directors is incorporated by reference from the discussion under the heading *Corporate Governance at Zoetis* in our [removed: 2022] [added: 2023] Proxy Statement.

Information about our Audit Committee, including the members of the Committee, and our Audit Committee financial experts, is incorporated by reference from the discussion under the heading *Corporate Governance at Zoetis* in our [removed: 2022] [added: 2023] Proxy Statement.

Information about director compensation is incorporated by reference from the discussion under the heading *Corporate Governance at Zoetis* in our [removed: 2022] [added: 2023] Proxy Statement.

Information about executive compensation is incorporated by reference from the discussion under the heading *Executive* *Compensation* in our [removed: 2022] [added: 2023] Proxy Statement.

Information required by this item is incorporated by reference from the discussion under the heading *Ownership of Our Common Stock* in our [removed: 2022] [added: 2023] Proxy Statement.

Information about certain relationships and transactions with related parties and our policies and procedures in relation to such transactions is incorporated by reference from the discussion under the heading *Transactions with Related Persons* in our [removed: 2022] [added: 2023] Proxy Statement.

Information about director independence is incorporated by reference from the discussion under the heading *Corporate Governance at Zoetis-Corporate Governance Principles and Practices-Director Independence* in our [removed: 2022] [added: 2023] Proxy Statement.

Information about the fees for professional services rendered by our independent registered public accounting firm in [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] is incorporated by reference from the discussion under the heading *Item [removed: 4*—*Ratification] [added: 3*—*Ratification] of Appointment of KPMG as our Independent Registered Public Accounting Firm for [removed: 2022*] [added: 2023*] in our [removed: 2022] [added: 2023] Proxy Statement.

Our Audit Committee’s policy on pre-approval of audit and permissible non-audit services of our independent registered public accounting firm is incorporated by reference from the discussion under the heading *Item [removed: 4*—*Ratification] [added: 3*—*Ratification] of Appointment of KPMG as our Independent Registered Public Accounting Firm for [removed: 2022*] [added: 2023*] in our [removed: 2022] [added: 2023] Proxy Statement*.*

93 |

101 |

| | | | | | | [added: as trustee] (incorporated by reference to Exhibit [removed: 2.1] [added: 4.2] to Zoetis [removed: Inc.'s] [added: Inc.’s] Current Report on Form 8-K filed on [added: November 16, 2022] | | |

| | | | | | | [removed: May 16, 2018] (File No. 001-35797)) | | |

| [Exhibit [removed: 3.1](http://www.sec.gov/Archives/edgar/data/1555280/000155528014000335/zoetis2014928-ex31.htm)] [added: 3.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000181/0001555280-22-000181-index.htm)] | | | | | | Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to Zoetis Inc.'s [removed: Quarterly] [added: Current] | | |

| | | | | | | Report on Form [removed: 10-Q] [added: 8-K] filed on [removed: November 10, 2014] [added: May 20, 2022] (File No. 001-35797)) | | |

| [Exhibit [removed: 3.2](http://www.sec.gov/Archives/edgar/data/1555280/000155528016000344/ex32zoetisbylawsamendedand.htm)] [added: 3.2](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000284/exhibit32arbylaws.htm)] | | | | | | By-laws of the Registrant, amended and restated as of [removed: February 19, 2016] [added: December 8, 2022] (incorporated by reference to Exhibit 3.2 to Zoetis | | |

| | | | | | | Inc.’s [removed: 2015 Annual] [added: Current] Report on Form [removed: 10-K] [added: 8-K] filed on [removed: February 24, 2016] [added: December 8, 2022] (File No. 001-35797)) | | |

| [Exhibit 4.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000078/zts_ca1xf04x02-14x22x2.htm) | | | | | | Specimen Common Stock [removed: Certificate†] [added: Certificate (incorporated by reference to Exhibit 4.1 to Zoetis Inc.'s Annual Report on Form 10-K] | | |

| [Exhibit [removed: 4.8](http://www.sec.gov/Archives/edgar/data/1555280/000119312513027025/d381653dex43.htm)] [added: 4](http://www.sec.gov/Archives/edgar/data/1555280/000119312513027025/d381653dex43.htm)[.9](http://www.sec.gov/Archives/edgar/data/1555280/000119312513027025/d381653dex43.htm)] | | | | | | Form of 3.250% Senior Notes due 2023 (incorporated by reference to Exhibit 4.3 of Zoetis Inc.'s registration statement on | | |

| [Exhibit [removed: 4.9](http://www.sec.gov/Archives/edgar/data/1555280/000119312515377110/d39819dex42.htm)] [added: 4.](http://www.sec.gov/Archives/edgar/data/1555280/000119312515377110/d39819dex42.htm)[10](http://www.sec.gov/Archives/edgar/data/1555280/000119312515377110/d39819dex42.htm)] | | | | | | Form of 4.500% Senior Notes due 2025 (incorporated by reference to Exhibit 4.2 to Zoetis Inc.’s Current Report on | | |

| [Exhibit [removed: 4.10](http://www.sec.gov/Archives/edgar/data/1555280/000119312513027025/d381653dex43.htm)] [added: 4.1](http://www.sec.gov/Archives/edgar/data/1555280/000119312513027025/d381653dex43.htm)[1](http://www.sec.gov/Archives/edgar/data/1555280/000119312513027025/d381653dex43.htm)] | | | | | | Form of 4.700% Senior Notes due 2043 (incorporated by reference to Exhibit 4.3 of Zoetis Inc.'s registration statement on | | |

| [Exhibit [removed: 4.11](http://www.sec.gov/Archives/edgar/data/1555280/000119312517282801/d456656dex42.htm)] [added: 4.1](http://www.sec.gov/Archives/edgar/data/1555280/000119312517282801/d456656dex42.htm)[2](http://www.sec.gov/Archives/edgar/data/1555280/000119312517282801/d456656dex42.htm)] | | | | | | Form of 3.000% Senior Notes due 2027 (incorporated by reference to Exhibit 4.2 to Zoetis Inc.’s Current Report on Form 8-K | | |

| [Exhibit [removed: 4.12](http://www.sec.gov/Archives/edgar/data/1555280/000119312517282801/d456656dex42.htm)] [added: 4.1](http://www.sec.gov/Archives/edgar/data/1555280/000119312517282801/d456656dex42.htm)[3](http://www.sec.gov/Archives/edgar/data/1555280/000119312517282801/d456656dex42.htm)] | | | | | | Form of 3.950% Senior Notes due 2027 (incorporated by reference to Exhibit 4.2 to Zoetis Inc.’s Current Report on Form 8-K | | |

| [Exhibit [removed: 4.1](http://www.sec.gov/Archives/edgar/data/1555280/000119312518252910/d601449dex42.htm)[3](http://www.sec.gov/Archives/edgar/data/1555280/000119312518252910/d601449dex42.htm)] [added: 4.1](http://www.sec.gov/Archives/edgar/data/1555280/000119312518252910/d601449dex42.htm)[4](http://www.sec.gov/Archives/edgar/data/1555280/000119312518252910/d601449dex42.htm)] | | | | | | Form of 3.900% Senior Notes due 2028 (incorporated by reference to Exhibit 4.2 to Zoetis Inc.’s Current Report on Form 8-K | | |

| [Exhibit [removed: 4.1](http://www.sec.gov/Archives/edgar/data/1555280/000119312518252910/d601449dex42.htm)[4](http://www.sec.gov/Archives/edgar/data/1555280/000119312518252910/d601449dex42.htm)] [added: 4.1](http://www.sec.gov/Archives/edgar/data/1555280/000119312518252910/d601449dex42.htm)[5](http://www.sec.gov/Archives/edgar/data/1555280/000119312518252910/d601449dex42.htm)] | | | | | | Form of 4.450% Senior Notes due 2048 (incorporated by reference to Exhibit 4.2 to Zoetis Inc.’s Current Report on Form 8-K | | |

| [Exhibit [removed: 4.1](https://www.sec.gov/Archives/edgar/data/1555280/000119312520140399/d901166dex42.htm)[5](https://www.sec.gov/Archives/edgar/data/1555280/000119312520140399/d901166dex42.htm)] [added: 4.](https://www.sec.gov/Archives/edgar/data/1555280/000119312520140399/d901166dex42.htm)[16](https://www.sec.gov/Archives/edgar/data/1555280/000119312520140399/d901166dex42.htm)] | | | | | | Form of 2.000% Senior Notes due 2030 (incorporated by reference to Exhibit 4.2 to Zoetis Inc.’s Current Report on Form 8-K | | |

| [Exhibit [removed: 4.16](https://www.sec.gov/Archives/edgar/data/1555280/000119312520140399/d901166dex42.htm)] [added: 4.1](https://www.sec.gov/Archives/edgar/data/1555280/000119312520140399/d901166dex42.htm)[7](https://www.sec.gov/Archives/edgar/data/1555280/000119312520140399/d901166dex42.htm)] | | | | | | Form of 3.000% Senior Notes due 2050 (incorporated by reference to Exhibit 4.2 to Zoetis Inc.’s Current Report on Form 8-K | | |

| [Exhibit [removed: 4.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000078/a2021xex417xdescriptionofs.htm)[7](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000078/a2021xex417xdescriptionofs.htm)] [added: 4.](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/exhibit420descriptionofsec.htm)[20](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/exhibit420descriptionofsec.htm)] | | | | | | Description of the Registrant’s [removed: Securities†] [added: Securities †] | | |

| [Exhibit [removed: 10.9](http://www.sec.gov/Archives/edgar/data/1555280/000155528013000008/zoetisexhibit1016.htm)] [added: 10.9](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000231/exhibit101-zoetisinc2013eq.htm)] | | | | | | Zoetis Inc. 2013 Equity and Incentive [removed: Plan] [added: Plan, as amended and restated as of May 19, 2022] (incorporated by reference to Exhibit [removed: 10.16 to Zoetis Inc.’s 2012 Annual Report] | | |

| | | | | | | on Form [removed: 10-K] [added: 8-K] filed on [removed: March 28, 2013] [added: December 21, 2022] (File No. [removed: 001-35797))*] [added: 001-35797))] | | |

| [Exhibit 10.11](http://www.sec.gov/Archives/edgar/data/1555280/000155528016000505/exhibit101-zoetiscreditagr.htm) | | | | | | Revolving Credit Agreement, dated as of December 21, [removed: 2016,] [added: 2022,] among Zoetis Inc., the lenders party thereto and JPMorgan | | |

| | | | | | | [removed: on Form 8-K] filed on [removed: December 21, 2016] [added: February 15, 2022] (File No. 001-35797)) | | |

| | | | | | | [added: 10.1 to Zoetis] Inc.’s [removed: 2017 Annual] [added: Quarterly] Report on Form [removed: 10-K] [added: 10-Q] filed on [removed: February 15, 2018] [added: August 4, 2022] (File No. [removed: 001-35797))] [added: 001-35797))*] | | |

| | | | | | | [removed: 2020 Annual] [added: Quarterly] Report on Form [removed: 10-K] [added: 10-Q] filed on [removed: February 16, 2021] [added: November 3, 2022] (File [removed: No. 001-35797))] [added: No 001-35797))*] | | |

| [Exhibit [removed: 21.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000078/ex211-20211231.htm)] [added: 21.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/ex211-20221231.htm)] | | | | | | Subsidiaries of the Registrant † | | |

| [Exhibit [removed: 23.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000078/ex23-20211231.htm)] [added: 23.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/ex23-20221231.htm)] | | | | | | Consent of KPMG LLP † | | |

| [Exhibit [removed: 24.1](#i557a9d1dda324175b603a2d1c8e225ee_280)] [added: 24.1](#i777cf052b1434fe1a50a8a8efc53fb6d_286)] | | | | | | Power of Attorney (included as part of signature page) † | | |

| [Exhibit [removed: 31.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000078/ex31120211231.htm)] [added: 31.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/ex31120221231.htm)] | | | | | | Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 † | | |

| [Exhibit [removed: 31.2](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000078/ex312-20211231.htm)] [added: 31.2](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/ex312-20221231.htm)] | | | | | | Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 † | | |

| [Exhibit [removed: 32.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000078/ex321-20211231.htm)] [added: 32.1](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/ex321-20221231.htm)] | | | | | | Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the | | |

| [Exhibit [removed: 32.2](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000078/ex322-20211231.htm)] [added: 32.2](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/ex322-20221231.htm)] | | | | | | Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the | | |

| Dated: February [removed: 15, 2022] [added: 14, 2023] | | | | | | By: | | | /S/ KRISTIN C. PECK | | | | | |

| | | | | | | | | | [added: Kristin C. Peck] Chief Executive Officer and Director | | | | | |

[removed: Under] [added: Pursuant to] the requirements of the Securities Exchange Act of 1934, this report [removed: was] [added: has been] signed [added: below] by the following persons on behalf of the [removed: Registrant] [added: registrant] and in the capacities and on the [removed: date] [added: dates] indicated.

| /S/ KRISTIN C. PECK | | | | | | Chief Executive Officer and Director | | | | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /S/ WETTENY JOSEPH | | | | | | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | | | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /S/ MICHAEL B. MCCALLISTER | | | | | | Chairman and Director | | | | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /S/ PAUL M. BISARO | | | | | | Director | | | | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /S/ FRANK A. D'AMELIO | | | | | | Director | | | | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /S/ SANJAY KHOSLA | | | | | | Director | | | | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /S/ ANTOINETTE R. LEATHERBERRY | | | | | | Director | | | | | | February [removed: 15, 2022] [added: 14, 2023] | | |

94 |

| [Exhibit 4.8](https://www.sec.gov/Archives/edgar/data/1555280/000110465922119521/tm2230604d1_ex4-2.htm) | | | | | | Sixth Supplemental Indenture, dated November 16, 2022, between Zoetis Inc. and Deutsche Bank Trust Company Americas, | | |

95 |

| [Exhibit 4.18](https://www.sec.gov/Archives/edgar/data/1555280/000110465922119521/tm2230604d1_ex4-3.htm) | | | | | | Form of 5.400% Senior Notes due 2025 (incorporated by reference to Exhibit 4.3 to Zoetis Inc.’s Current Report on Form 8-K | | |

| | | | | | | filed on November 16, 2022 (File No. 001-35797)) | | |

| [Exhibit 4.19](https://www.sec.gov/Archives/edgar/data/1555280/000110465922119521/tm2230604d1_ex4-4.htm) | | | | | | Form of 5.600% Senior Notes due 2032 (incorporated by reference to Exhibit 4.4 to Zoetis Inc.’s Current Report on Form 8-K | | |

| | | | | | | filed on November 16, 2022 (File No. 001-35797)) | | |

96 |

| [Exhibit 10.31](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000276/exhibit101-2022zoetisrsuaw.htm) | | | | | | Form of Restricted Stock Unit Award Agreement, effective as of July 27, 2022 (incorporated by reference to Exhibit 10.1 to | | |

| | | | | | | Zoetis Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2022 (File No 001-35797))* | | |

| [Exhibit 10.32](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000276/exhibit102-2022zoetisstock.htm) | | | | | | Form of Stock Option Award Agreement, effective as of July 27, 2022 (incorporated by reference to Exhibit 10.2 to Zoetis Inc.’s | | |

| [Exhibit 10.33](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000276/exhibit103-2022zoetisperfo.htm) | | | | | | Form of Performance Restricted Stock Unit Award Agreement, effective as of July 27, 2022 (incorporated by reference to Exhibit | | |

| | | | | | | 10.3 to Zoetis Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2022 (File No 001-35797))* | | |

| [Exhibit 10.34](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000276/exhibit104-2022zoetiscasha.htm) | | | | | | Form of Cash Award Agreement, effective as of July 27, 2022 (incorporated by reference to Exhibit 10.1 to Zoetis Inc.’s | | |

| | | | | | | Quarterly Report on Form 10-Q filed on November 3, 2022 (File No 001-35797))* | | |

| [Exhibit 10.35](https://www.sec.gov/Archives/edgar/data/1555280/000155528022000276/exhibit105-2022zoetisdirec.htm) | | | | | | Form of Non-Employee Director Restricted Stock Unit Award Agreement, effective as of July 27, 2022 (incorporated by | | |

| | | | | | | reference to Exhibit 10.5 to Zoetis Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2022 (File No 001-35797))* | | |

| [Exhibit 10.36](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/exhibit10362023zoetisrsuaw.htm) | | | | | | Form of Restricted Stock Unit Award Agreement, effective as of December 8, 2022* | | |

| [Exhibit 10.37](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/exhibit10372023zoetisstock.htm) | | | | | | Form of Stock Option Award Agreement, effective as of December 8, 2022* | | |

| [Exhibit 10.38](https://www.sec.gov/Archives/edgar/data/1555280/000155528023000074/exhibit10382023zoetisperfo.htm) | | | | | | Form of Performance Restricted Stock Unit Award Agreement, effective as of December 8, 2022* | | |

97 |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

98 |

| /S/ VANESSA BROADHURST | | | | | | Director | | | | | | February 14, 2023 | | |

| Vanessa Broadhurst | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

99 |

102 |

| [Exhibit 2.1](http://www.sec.gov/Archives/edgar/data/1555280/000155528018000179/exhibit21mergeragreement.htm) | | | | | | Agreement and Plan of Merger, dated as of May 15, 2018, by and among Zoetis Inc., Zeus Merger Sub, Inc. and Abaxis, Inc. | | |

103 |

| [Exhibit 10.11.1](http://www.sec.gov/Archives/edgar/data/1555280/000155528018000053/ex1016120171231.htm) | | | | | | Extension Agreement to Revolving Credit Agreement, dated as of December 21, 2017, among Zoetis Inc., the lenders party | | |

| | | | | | | thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.16.1 to Zoetis | | |

| [Exhibit 10.11.2](http://www.sec.gov/Archives/edgar/data/1555280/000155528019000041/ex1011220181231.htm) | | | | | | Extension Agreement to Revolving Credit Agreement, dated as of December 21, 2018, among Zoetis Inc., the lenders party | | |

| | | | | | | thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.11.2 to Zoetis Inc.'s | | |

104 |

105 |

| | | | | | | | | | Kristin C. Peck | | | | | |

106 |