Zoetis Inc.

Welcome to the second quarter 2019 financial results conference call and webcast for Zoetis. Hosting the call today is Steve Frank, Vice President of Investor Relations for Zoetis. The presentation materials and additional financial tables are currently posted on the Investor Relations section of Zoetis.com. The presentation slides can be managed by you, the viewer, and will not be forwarded automatically. In addition, a replay of this call will be available approximately two hours after the conclusion of this call via dial-in or on the investor relations section of zolatis.com. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star and 1 on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. In the interest of time, we ask that you limit yourself to one question and then queue up again with any follow-ups. Your line will be muted when you complete your question. When posing your question, please pick up your handset to allow optimal sound quality. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Steve Frank. Steve, you may begin.

Thank you, Keith. Good morning, everyone, and welcome to the Zoetta second quarter 2019 earnings call. I am joined today by Juan Ramon Alikes, our Chief Executive Officer, and Glenn David, our Chief Financial Officer. Before we begin, I'll remind you that the slides presented on this call are available on the Investor Relations section of our website, and that our remarks today will include forward-looking statements, and that actual results could differ materially from those projections. For a list and description of certain factors that could cause results to differ, I refer you to forward-looking statement in today's press release and our SEC filings, including but not limited to our annual report on Form 10-K and our reports on Form 10-Q. Our remarks today will also include references to certain financial measures which were not prepared in accordance with generally accepted accounting principles or U.S. GAAP. The reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures is included in the financial tables that accompany our earnings press release, and then the company's 8K filing, dated today, August 6th, 2019. We also cite operational results, which exclude the impact of foreign exchange. With that, I will turn the call over to Juan Ramon.

Thank you, Steve, and good morning, everyone. Our second quarter results demonstrate many of the competitive advantages that have made Zoetis the world leader in animal health. We have been able to deliver steady and reliable financial results for our investors since 2013, consistently growing our revenue faster than the market and growing our adjusted net income faster than revenue each year. It is a track record driven by leading innovation, a diverse and durable portfolio and a clear strategy that begins and ends with our customers, their success, and the health of their animals. Over the last few years, we have consistently brought new innovation to market from our R&D labs, most notably in dermatology, parasiticides, and vaccines, with products like ApoQoil and CytoPoint. Simparica, Revolution Plus, and Stonehole Plus, and values new vaccines in our foster, sub-vaccine, and vanguard product lines. We invest significantly in our productive R&D and rely on the support of our commercial, manufacturing, and supply chain teams to maximize the growth of our products and services. We also invest internally and externally to maintain the most diverse and durable portfolio in the animal health industry. This approach has helped us perform well even in the face of shifting weather patterns, changing market conditions, and the impact that emerging diseases have on our customers. Recent external investment in diagnostic, nutritionals, and digital solutions kept us evolving in line with market trends, while enhancing the integrated solutions we offer to our customers. At the same time, better supporting our medicines and vaccine portfolio. This consistent performance is made possible by the outstanding, talented, and dedicated Zoetis colleagues that execute our plans and growth strategies. Turning now to our financials, we continue our strong performance through the first half of the year with 14% operational revenue growth in the second quarter. Diagnostic sales from the Adaxes acquisition accounted for five percentage points