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^(a) The consolidated statements of income present the three and twelve months ended December 31, 2018 and 2017. Subsidiaries operating outside the United States
are included for the three and twelve months ended November 30, 2018 and 2017.

^(b) Exclusive of amortization of intangible assets, except as discussed in footnote (c) below.

^(c) Amortization expense related to finite-lived acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products,
compounds and intellectual property is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization
expense related to finite-lived acquired intangible assets that are associated with a single function is included in Cost of sales, Selling, general and administrative
expenses or Research and development expenses, as appropriate.

^(a) The consolidated statements of income present the three and twelve months ended December 31, 2018 and 2017. Subsidiaries operating outside the United States are included for the
three and twelve months ended November 30, 2018 and 2017.

^(b) Non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its
components and diluted EPS. Despite the importance of these measures to management in goal setting and performance measurement, non-GAAP adjusted net income and its
components and non-GAAP adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their
usefulness to investors. Because of the non-standardized definitions, non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS (unlike U.S. GAAP net
income and its components and diluted EPS) may not be comparable to the calculation of similar measures of other companies. Non-GAAP adjusted net income and its components and
non-GAAP adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance.

^(c) Exclusive of amortization of intangible assets, except as discussed in footnote (d) below.

^(d) Amortization expense related to finite-lived acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and
intellectual property is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense related to acquired intangible
assets that are associated with a single function is included in Cost of sales, Selling, general and administrative expenses or Research and development expenses, as appropriate.

(1) Income taxes in Purchase accounting adjustments for 2017 includes a provisional tax benefit of $17 million related to the
remeasurement of the company’s deferred taxes due to the reduction in the U.S. federal corporate tax rate as provided by the U.S. Tax Cuts and Jobs Act enacted on
December 22, 2017.

(2) Acquisition-related costs include the following:

^(a) Represents external costs directly related to acquiring businesses and primarily includes expenditures for banking, legal, accounting and other similar services.
Included in Restructuring charges and certain acquisition-related costs.

^(b) Represents external, incremental costs directly related to integrating acquired businesses and primarily includes expenditures for consulting and the integration of
systems and processes. Included in Restructuring charges and certain acquisition-related costs.

^(c) Represents employee termination costs related to the 2018 acquisition of Abaxis and the 2017 acquisition of an Irish biologic therapeutics company.
Included in Restructuring charges and certain acquisition-related costs.

^(d) Included in Provision for taxes on income. Represents the tax effect of the associated pre-tax acquisition-related amounts, calculated by determining the
jurisdictional location of the pre-tax amounts and applying that jurisdiction's applicable tax rate. For the twelve months ended December 31, 2018, also includes a
tax charge related to the non-deductibility of certain costs associated with the 2018 acquisition of Abaxis.

(3) Certain significant items include the following:

^(a) Represents consulting fees and product transfer costs, adjustments to inventory reserves and accelerated depreciation included in Cost of sales, consulting fees
included in Selling, general and administrative expenses, employee termination costs and exit costs included in Restructuring charges and certain acquisition-
related costs, and net (gains)/losses on sales of certain manufacturing sites and products included in Other (income)/deductions—net, related to cost-reduction and
productivity initiatives.

^(b) Represents employee termination costs/(reversals) in Europe as a result of initiatives to better align our organizational structure, included in Restructuring charges
and certain acquisition-related costs.

^(c) Represents a net gain related to the divestiture of certain agribusiness products within our International segment, included in Other (income)/deductions—net.

^(d) Represents certain nonrecurring costs related to becoming an independent public company, such as the creation of standalone systems and infrastructure, site
separation, new branding (including changes to the manufacturing process for required new packaging), and certain legal registration and patent assignment costs,
included in Cost of sales.

^(e) For 2018, primarily represents a net gain related to the relocation of a manufacturing site in China, included in Other (income)/deductions—net.

For 2017, primarily represents costs associated with changes to our operating model in Cost of sales and Selling, general and administrative expenses, and income
related to an insurance recovery from commercial settlements in Mexico recorded in 2014 and 2016, included in Other (income)/deductions—net.

^(f) Included in Provision for taxes on income. Represents the tax effect of the associated pre-tax certain significant items amounts, calculated by determining the
jurisdictional location of the pre-tax amounts and applying that jurisdiction's applicable tax rate.

For 2018, also includes (i) a net tax benefit of $45 million related to a measurement period adjustment to the one-time mandatory deemed repatriation tax on the
company's undistributed non-U.S. earnings, pursuant to the Tax Cuts and Jobs Act enacted on December 22, 2017, and (ii) a tax charge of approximately $17
million related to the disposal of certain assets.

For 2017, also includes (i) a provisional net tax charge of $229 million related to the impact of the Tax Cuts and Jobs Act enacted on December 22, 2017,
including a one-time mandatory deemed repatriation tax on the company’s undistributed non-U.S. earnings, partially offset by a tax benefit related to the
remeasurement of the company’s deferred tax assets and liabilities, as of the date of enactment, due to the reduction in the U.S. federal corporate tax rate, (ii) a net
tax charge of approximately $3 million as a result of the implementation of certain operational changes, and (iii) a tax charge of approximately $2 million related
to the disposal of certain assets.

^(a) Adjusted cost of sales, adjusted selling, general, and administrative (SG&A) expenses, adjusted research and development (R&D) expenses, and adjusted net
income attributable to Zoetis are defined as the corresponding reported U.S. generally accepted accounting principles (GAAP) income statement line items
excluding purchase accounting adjustments, acquisition-related costs, and certain significant items. Reconciliations of certain reported to adjusted information for
the three and twelve months ended December 31, 2018 and 2017 are provided in the materials accompanying this report. These adjusted income statement line
item measures are not, and should not be viewed as, substitutes for the corresponding U.S. GAAP line items. For the corresponding GAAP line items, see
Consolidated Statements of Income and Reconciliation of GAAP Reported to Non-GAAP Adjusted Information.

^(b) Operational growth (a non-GAAP financial measure) is defined as growth excluding the impact of foreign exchange.

^(a) Operational growth (a non-GAAP financial measure) excludes the impact of foreign exchange.

^(b) Organic operational growth (a non-GAAP financial measure) excludes the impact of the acquisition of Abaxis as well as foreign exchange.

^(c) Adjusted net income and its components and adjusted diluted EPS are defined as reported U.S. generally accepted accounting principles (GAAP) net income and
its components and reported diluted EPS excluding purchase accounting adjustments, acquisition-related costs and certain significant items. Adjusted cost of sales,
adjusted selling, general and administrative (SG&A) expenses, adjusted research and development (R&D) expenses, and adjusted interest expense and other
(income)/deductions are income statement line items prepared on the same basis, and, therefore, components of the overall adjusted income measure. Despite the
importance of these measures to management in goal setting and performance measurement, adjusted net income and its components and adjusted diluted EPS are
non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. Because of
the non-standardized definitions, adjusted net income and its components and adjusted diluted EPS (unlike U.S. GAAP net income and its components and diluted
EPS) may not be comparable to the calculation of similar measures of other companies. Adjusted net income and its components and adjusted diluted EPS are
presented solely to permit investors to more fully understand how management assesses performance. Adjusted net income and its components and adjusted
diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS.

^(d) We do not provide a reconciliation of forward-looking non-GAAP adjusted net income operational growth to the most directly comparable GAAP reported
financial measure because we are unable to calculate with reasonable certainty the foreign exchange impact of unusual gains and losses, acquisition-related
expenses, potential future asset impairments and other certain significant items, without unreasonable effort. The foreign exchange impacts of these items are
uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period.

^(e) Primarily includes certain nonrecurring costs related to the acquisition of Abaxis and other charges.

^(a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K.

^(b) Operational revenue growth (a non-GAAP financial measure) is defined as revenue growth excluding the impact of foreign exchange.

^(a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K.

^(b) Operational revenue growth (a non-GAAP financial measure) is defined as revenue growth excluding the impact of foreign exchange.

^(a) Operational growth (a non-GAAP financial measure) is defined as growth excluding the impact of foreign exchange.

^(a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K.

^(b) Operational growth (a non-GAAP financial measure) is defined as growth excluding the impact of foreign exchange.

^(c) Other business activities reflect the research and development costs managed by our Research and Development organization as well as our contract manufacturing business
and human health diagnostics business.

^(d) Corporate includes, among other things, administration expenses, interest expense, certain compensation and other costs not charged to our operating segments.

^(e) Purchase accounting adjustments include certain charges related to the amortization of fair value adjustments to inventory, intangible assets and property, plant and
equipment not charged to our operating segments.

^(f) Acquisition-related costs include costs associated with acquiring and integrating newly acquired businesses, such as transaction costs and integration costs.

^(g) Certain significant items includes substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a
regular basis. Such items primarily include restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated
with an acquisition, costs associated with the operational efficiency initiative and supply network strategy, certain legal and commercial settlements, and the impact of
divestiture-related gains and losses.

^(h) Includes overhead expenses associated with our manufacturing and supply operations not directly attributable to an operating segment, as well as procurement costs.

⁽ⁱ⁾ Defined as income before provision for taxes on income.

^(a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K.

^(b) Operational growth (a non-GAAP financial measure) is defined as growth excluding the impact of foreign exchange.

^(c) Other business activities reflect the research and development costs managed by our Research and Development organization as well as our contract manufacturing business and human health diagnostics business.

^(d) Corporate includes, among other things, administration expenses, interest expense, certain compensation and other costs not charged to our operating segments.

^(e) Purchase accounting adjustments include certain charges related to the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment not charged to our operating segments.

^(f) Acquisition-related costs include costs associated with acquiring and integrating newly acquired businesses, such as transaction costs and integration costs.

^(g) Certain significant items includes substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items primarily include restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition, costs associated with the operational efficiency initiative and supply network strategy, certain legal and commercial settlements, and the impact of divestiture-related gains and losses.

^(h) Includes overhead expenses associated with our manufacturing and supply operations not directly attributable to an operating segment, as well as procurement costs.

⁽ⁱ⁾ Defined as income before provision for taxes on income.