Zoetis Inc.ZTS
Zoetis Inc. Goodwill & Intangibles Disclosure
13. Goodwill and Other Intangible Assets
A. Goodwill
The components of, and changes in, the carrying amount of goodwill follow:
| (MILLIONS OF DOLLARS) | U.S. | International | Total | |||||||||||||||||
| Balance, December 31, 2023 | $ | 1,532 | $ | 1,227 | $ | 2,759 | ||||||||||||||
Other(a) | (17) | (18) | (35) | |||||||||||||||||
| Balance, December 31, 2024 | $ | 1,515 | $ | 1,209 | $ | 2,724 | ||||||||||||||
Additions(b) | — | 7 | 7 | |||||||||||||||||
Other(a) | — | 36 | 36 | |||||||||||||||||
| Balance, December 31, 2025 | $ | 1,515 | $ | 1,252 | $ | 2,767 | ||||||||||||||
(a) Includes adjustments for foreign currency translation.
For 2024, also includes adjustments for the derecognition of goodwill of $24 million related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. See Note 5. Acquisitions and Divestitures.
(b) Relates to the acquisition of Veterinary Pathology Group. See Note 5. Acquisitions and Divestitures.
The gross goodwill balance was $3,303 million as of December 31, 2025 and $3,260 million as of December 31, 2024. Accumulated goodwill impairment losses were $536 million as of December 31, 2025 and 2024.
B. Other Intangible Assets
The components of identifiable intangible assets follow:
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Identifiable | Identifiable | |||||||||||||||||||||||||||||||||||||
| Gross | Intangible Assets, | Gross | Intangible Assets, | |||||||||||||||||||||||||||||||||||
| Carrying | Accumulated | Less Accumulated | Carrying | Accumulated | Less Accumulated | |||||||||||||||||||||||||||||||||
| (MILLIONS OF DOLLARS) | Amount | Amortization | Amortization | Amount | Amortization | Amortization | ||||||||||||||||||||||||||||||||
| Finite-lived intangible assets: | ||||||||||||||||||||||||||||||||||||||
| Developed technology rights | $ | 1,932 | $ | (1,342) | $ | 590 | $ | 1,891 | $ | (1,175) | $ | 716 | ||||||||||||||||||||||||||
| Brands and tradenames | 362 | (250) | 112 | 367 | (246) | 121 | ||||||||||||||||||||||||||||||||
| Other | 292 | (210) | 82 | 278 | (197) | 81 | ||||||||||||||||||||||||||||||||
| Total finite-lived intangible assets | 2,586 | (1,802) | 784 | 2,536 | (1,618) | 918 | ||||||||||||||||||||||||||||||||
| Indefinite-lived intangible assets: | ||||||||||||||||||||||||||||||||||||||
| Brands and tradenames | 67 | — | 67 | 66 | — | 66 | ||||||||||||||||||||||||||||||||
| In-process research and development | 141 | — | 141 | 136 | — | 136 | ||||||||||||||||||||||||||||||||
| Product rights | 6 | — | 6 | 7 | — | 7 | ||||||||||||||||||||||||||||||||
| Total indefinite-lived intangible assets | 214 | — | 214 | 209 | — | 209 | ||||||||||||||||||||||||||||||||
| Identifiable intangible assets | $ | 2,800 | $ | (1,802) | $ | 998 | $ | 2,745 | $ | (1,618) | $ | 1,127 | ||||||||||||||||||||||||||
Developed Technology Rights
Developed technology rights represent the amortized cost associated with developed technology, which has been acquired from third parties and which can include the right to develop, use, market, sell and/or offer for sale the product, compounds and intellectual property that we have acquired with respect to products, compounds and/or processes that have been completed. These assets include technologies related to the care and treatment of dogs, cats, horses, cattle, swine, poultry, fish and sheep.
Brands and Tradenames
Brands and tradenames represent the amortized or unamortized cost associated with product name recognition, as the products themselves do not receive patent protection. The most significant finite-lived brands and tradenames are related to Abaxis, Platinum Performance, and Lutalyse. The most significant indefinite-lived brands and tradenames were acquired from SmithKlineBeecham and the Linco family of products.
In-Process Research and Development
IPR&D assets represent R&D assets that have not yet received regulatory approval in a major market. The majority of these IPR&D assets were acquired in connection with our acquisition of two research and development stage animal health biopharmaceutical companies, PetMedix and adivo.
IPR&D assets are required to be classified as indefinite-lived assets until the successful completion or abandonment of the associated R&D effort. Accordingly, during the development period after the date of acquisition, these assets will not be amortized until approval is obtained in a major market, typically either the U.S., U.K. or the EU, or in a series of other countries, subject to certain specified conditions and management judgment. At that time, we will determine the useful life of the asset, reclassify the asset out of IPR&D and begin amortization. If the associated R&D effort is abandoned, the related IPR&D assets will be written-off and we will record an impairment charge.
There can be no certainty that IPR&D assets ultimately will yield a successful product.
Product Rights
Product rights represent product registration and application rights.
C. Amortization
The weighted average life of our total finite-lived intangible assets is approximately 7.7 years. Total amortization expense for finite-lived intangible assets was $157 million in 2025, $170 million in 2024 and $185 million in 2023.
The annual amortization expense expected for the years 2026 through 2030 is as follows:
| (MILLIONS OF DOLLARS) | 2026 | 2027 | 2028 | 2029 | 2030 | |||||||||||||||||||||||||||
| Amortization expense | $ | 152 | $ | 148 | $ | 119 | $ | 82 | $ | 71 | ||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 15, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 15, 2018 | |
| 2016 | Feb 16, 2017 | |
| 2015 | Feb 24, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.