Elanco Animal Health (ELAN) 10-Q 8 Nov 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 06, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Entity Registrant Name	Elanco Animal Health Inc.
Entity Central Index Key	1,739,104
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		365,625,000

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated and Combined Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Revenue	$ 761.1	$ 697.1	$ 2,267.5	$ 2,134.7
Costs, expenses and other:
Cost of sales	369.8	376.2	1,161.3	1,088.9
Research and development	58.9	61.9	185.5	189.7
Marketing, selling and administrative	179	194.7	550.1	583
Amortization of intangible assets	48.7	51.6	147.3	161
Asset impairments, restructuring and other special charges (Note 6)	12.4	23.7	82.8	189.3
Other–net, (income) expense	13.5	(1.9)	24.2	0
Costs, expenses and other	682.3	706.2	2,151.2	2,211.9
Income (loss) before income taxes	78.8	(9.1)	116.3	(77.2)
Income tax expense	18.6	11.6	46.2	72
Net income (loss)	$ 60.2	$ (20.7)	$ 70.1	$ (149.2)
Earnings (loss) per share:
Basic and diluted (usd per share)	$ 0.16	$ (0.06)	$ 0.19	$ (0.41)
Weighted average shares outstanding:
Basic and diluted (in shares)	365.6	365.6	365.6	365.6

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated and Combined Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 60.2	$ (20.7)	$ 70.1	$ (149.2)
Other comprehensive income (loss), net of tax	94.5	(4)	(9.8)	231.8
Comprehensive income (loss)	$ 154.7	$ (24.7)	$ 60.3	$ 82.6

Condensed Consolidated and Comb

Condensed Consolidated and Combined Balance Sheets - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 300	$ 323.4
Accounts receivable, net of allowances of $8.8 (2018) and $9.8 (2017)	606.1	567.4
Other receivables	30.8	34.5
Inventories (Note 7)	1,008.7	1,062.3
Prepaid expenses and other	123.2	136.1
Restricted cash (Note 14)	634.9	0
Total current assets	2,703.7	2,123.7
Noncurrent Assets
Investments (Note 9)	14.9	12.3
Goodwill	2,968.8	2,969.2
Other intangibles, net	2,514.8	2,672.8
Other noncurrent assets	100	242
Property and equipment, net of accumulated depreciation $894.5 (2018) and $834.1 (2017)	909.3	920.3
Total assets	9,211.5	8,940.3
Current Liabilities
Accounts payable	202.7	203.8
Employee compensation	81.3	89.3
Sales rebates and discounts	147.9	165.5
Other current liabilities	178.6	184.5
Payable to Lilly (Note 14)	634.9	0
Total current liabilities	1,245.4	643.1
Noncurrent Liabilities
Long-term debt (Note 8)	2,478.5	0
Accrued retirement benefits	136	139
Deferred taxes	125	251.9
Other noncurrent liabilities	89.5	126
Total liabilities	4,074.4	1,160
Commitments and Contingencies (Note 11)
Equity
Net parent company investment	0	8,036.9
Common stock, no par value, 5,000,000,000 shares authorized 365,625,000 shares issued and outstanding as of September 30, 2018	0	0
Additional paid-in capital	5,347.4	0
Accumulated other comprehensive loss	(210.3)	(256.6)
Total equity	5,137.1	7,780.3
Total liabilities and equity	$ 9,211.5	$ 8,940.3

Condensed Consolidated and Co_2

Condensed Consolidated and Combined Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Receivables, Net, Current [Abstract]
Accounts receivable, allowances	$ 8.8	$ 9.8
Property and equipment, accumulated depreciation	$ 894.5	$ 834.1
Common stock, shares authorized	5,000,000,000	5,000,000,000
Common stock, shares issued	365,625,000	365,625,000
Common stock, shares outstanding	365,625,000	365,625,000

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated and Combined Statements of Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Additional Paid-in Capital	Net Parent Company Investment	Accumulated Other Comprehensive Income (Loss)	Foreign Currency Translation	Defined Benefit Pension and Retiree Health Benefit Plans
Balance at beginning of period (in shares) at Dec. 31, 2016		0
Balance at beginning of period at Dec. 31, 2016	$ 7,017.4	$ 0	$ 0	$ 7,474.3	$ (456.9)	$ (437.3)	$ (19.6)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(149.2)			(149.2)
Other comprehensive income (loss), net of tax	231.8				231.8	228.1	3.7
Transfers (to)/from Lilly, net	862.7			862.7
Balance at end of period (in shares) at Sep. 30, 2017		0
Balance at end of period at Sep. 30, 2017	7,962.7	$ 0	0	8,187.8	(225.1)	(209.2)	(15.9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adoption of Accounting Standards Update 2016-16	(0.3)			(0.3)
Balance at beginning of period (in shares) at Dec. 31, 2017		0
Balance at beginning of period at Dec. 31, 2017	7,780.3	$ 0	0	8,036.9	(256.6)	(227.2)	(29.4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	70.1			70.1
Other comprehensive income (loss), net of tax	(9.8)				(9.8)	(20.6)	10.8
Transfers (to)/from Lilly, net	(226.3)			(226.3)
Separation adjustments	58.3			2.2	56.1	56.1
Issuance of common stock (in shares)		365.6
Issuance of common stock	1,659.7		1,659.7
Consideration to Lilly in connection with the Separation	(4,194.9)		(4,194.9)
Reclassification of net parent company investment			7,882.6	(7,882.6)
Balance at end of period (in shares) at Sep. 30, 2018		365.6
Balance at end of period at Sep. 30, 2018	$ 5,137.1	$ 0	$ 5,347.4	$ 0	$ (210.3)	$ (191.7)	$ (18.6)

Unaudited Condensed Consolida_4

Unaudited Condensed Consolidated and Combined of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash Flows from Operating Activities
Net income (loss)	$ 70.1	$ (149.2)
Adjustments to Reconcile Net Income (Loss) to Cash Flows from Operating Activities:
Depreciation and amortization	222.3	231.3
Change in deferred income taxes	12.6	(7)
Stock-based compensation expense	20.2	18.7
Asset impairment charges	102.5	43.8
Gain on sale of assets	0	(16)
Other changes in operating assets and liabilities, net of acquisitions and divestitures	(83.4)	42.7
Other non-cash operating activities, net	3.5	2.8
Net Cash Provided by Operating Activities	347.8	167.1
Cash Flows from Investing Activities
Net purchases of property and equipment	(74.3)	(31.7)
Cash paid for acquisitions, net of cash acquired	0	(882.1)
Other investing activities, net	(4.6)	(15.3)
Net Cash Used for Investing Activities	(78.9)	(929.1)
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt (Note 8)	2,477.7	0
Proceeds from issuance of common stock (Note 1)	1,659.7	0
Consideration paid to Lilly in connection with the Separation (Note 1)	(3,559.1)	0
Other financing activities, net	(3.7)	(0.5)
Other net transactions with Lilly	(247.4)	844
Net Cash Provided by Financing Activities	327.2	843.5
Effect of exchange rate changes on cash and cash equivalents	15.4	3.3
Net increase in cash, cash equivalents and restricted cash	611.5	84.8
Cash, cash equivalents and restricted cash at beginning of period	323.4	258.8
Cash, cash equivalents and restricted cash at end of period	934.9	343.6
Cash, cash equivalents and restricted cash at end of period	$ 323.4	$ 258.8

Nature of Business and Organiza

Nature of Business and Organization	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business and Organization	Note 1. Nature of Business and Organization Nature of Business Elanco Animal Health Incorporated (Elanco Parent) and its subsidiaries (collectively, Elanco, the Company, we, us or our) was formed as a wholly-owned subsidiary of Eli Lilly and Company (Lilly). Elanco is a global animal health company that innovates, develops, manufactures and markets products for companion and food animals. We offer a diverse portfolio of more than 125 brands to veterinarians and food animal producers in more than 90 countries. Organization Elanco Parent was formed in 2018, as a wholly-owned subsidiary of Lilly, to serve as the ultimate parent company of substantially all of the animal health businesses of Lilly. On September 24, 2018, Elanco Parent completed an initial public offering resulting in the issuance of 72.3 million shares of its common stock (including shares issued pursuant to the underwriters’ option to purchase additional shares), which represents 19.8% of the outstanding shares, at $24 per share (IPO) for a total net proceeds, after underwriting discounts and commissions, of $1.7 billion . In connection with the completion of the IPO, through a series of equity and other transactions, Lilly transferred to Elanco Parent the animal health businesses that form its business going forward. In exchange Elanco Parent has paid, or will pay, to Lilly approximately $4.2 billion , which includes the net proceeds from the IPO, the net proceeds from the debt offering completed by Elanco Parent in August 2018 and the term loan facility entered into by Elanco Parent in September 2018 (see Note 8). As of September 30, 2018, Elanco Parent has paid Lilly $3.6 billion . These transactions are collectively referred to herein as the Separation.

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Note 2. Basis of Presentation We have prepared the accompanying unaudited condensed consolidated and combined financial statements in accordance with the requirements of Form 10-Q and, therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States (GAAP). In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for a fair presentation of the results of operations for the periods shown. In preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates. Certain reclassifications have been made to prior periods in the unaudited condensed consolidated and combined financial statements and accompanying notes to conform with current presentation. In addition, during the period ended September 30, 2018, certain combined balance sheet amounts related to the prior year have been revised to correct the sales rebates and discounts liability, which did not correctly reflect an accrual for rebates related to product held in the wholesalers' pipeline. In accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 99, Materiality , and Accounting Standards Codification (ASC) 250, Presentation of Financial Statements , we assessed the materiality of this correction and concluded that the accrual for the rebate related to product held in the wholesalers' pipeline was not material to prior periods, and therefore, amendments of previously filed reports are not required. As such, in accordance with ASC 250, we revised the previously reported combined balance sheet and combined statements of equity. The adjustment, which originates in periods prior to those presented, resulted in a $10.5 million increase as of December 31, 2017 in the accrual for sales rebates and discounts of $155.0 million , total current liabilities of $632.6 million and total liabilities of $1,149.5 million . In addition, previously reported amounts at December 31, 2017 and December 31, 2016 of net parent company investment of $8,047.4 million and $7,484.8 million , respectively, and total equity of $7,790.8 million and $7,027.9 million , respectively, have been reduced by $10.5 million to reflect the correction above. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our combined financial statements and accompanying notes as of and for the three years ended December 31, 2017 included in our final prospectus relating to our IPO filed on September 21 2018 (IPO Prospectus) with the Securities and Exchange Commission (SEC). For the periods after Separation, the financial statements are prepared on a consolidated basis. For periods prior to the Separation, our financial statements are combined, have been prepared on a standalone basis, and are derived from Lilly's consolidated financial statements and accounting records. The unaudited condensed combined financial statements reflect the financial position, results of operations and cash flows related to the animal health businesses that were transferred to Elanco Parent and are prepared in conformity with GAAP. The unaudited condensed combined financial statements include the attribution of certain assets and liabilities that historically have been held at the Lilly corporate level but which are specifically identifiable or attributable to the businesses that have been transferred to Elanco Parent. All intercompany transactions and accounts within Elanco have been eliminated. All transactions between us and Lilly are considered to be effectively settled in the unaudited condensed combined financial statements at the time the intercompany transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the unaudited condensed combined statements of cash flows as a financing activity and in the condensed combined balance sheets as net parent company investment. These unaudited condensed combined financial statements include an allocation of expenses related to certain Lilly corporate functions, including executive oversight, treasury, legal, finance, human resources, tax, internal audit, financial reporting, information technology and investor relations. These expenses have been allocated to us based on direct usage or benefit where specifically identifiable, with the remainder allocated primarily on a pro rata basis of revenue, headcount and other measures. We consider the expenses methodology and results to be reasonable for all periods presented. However, the allocations may not be indicative of the actual expense that would have been incurred had we operated as an independent, publicly traded company for the periods presented. It is impractical to estimate what the standalone costs of Elanco would have been in the historical periods. The income tax amounts in the unaudited condensed combined financial statements have been calculated based on a separate return methodology and presented as if our operations were separate taxpayers in the respective jurisdictions. We file income tax returns in the United States (U.S.) federal jurisdiction and various state, local and non-U.S. jurisdictions. Certain of these income tax returns are filed on a consolidated or combined basis with Eli Lilly and Company and/or its subsidiaries. Lilly maintains various benefit and combined stock-based compensation plans at a corporate level and other benefit plans at a country level. Our employees participate in such programs and the portion of the cost of those plans related to our employees is included in our financial statements. However, the condensed combined balance sheets do not include any equity issued related to stock-based compensation plans or any net benefit plan obligations unless the benefit plan covers only our dedicated employees or where the legal obligation associated with the benefit plan will transfer to Elanco. Prior to Separation, the equity balance in the unaudited condensed combined financial statements represents the excess of total assets over liabilities, including intercompany balances between us and Lilly (net parent company investment) and accumulated other comprehensive loss. Net parent company investment is primarily impacted by contributions from Lilly which are the result of treasury activities and net funding provided by or distributed to Lilly. See Note 14 for further information.

Impact of Separation

Impact of Separation	9 Months Ended
	Sep. 30, 2018
Equity [Abstract]
Impact of Separation	In connection with the Separation, we issued $2.0 billion aggregate principal amount of senior notes in a private placement, and we also entered into a $750.0 million senior unsecured revolving credit facility and $500.0 million senior unsecured term credit facility. See Note 8 for further information. In connection with the Separation, we entered into various agreements with Lilly, including a master separation agreement. In connection with the terms of the Separation, there were certain assets and liabilities included in the pre-Separation balance sheet that were retained by Lilly and there were certain assets not included in the pre-Separation balance sheet that were transferred to us. The cumulative adjustment to the historical balance sheet increased net assets and total equity by approximately $58.3 million . The impact on net assets primarily represent the elimination of certain income tax assets and liabilities and the contribution of additional fixed assets. After Separation, Lilly owns approximately 80.2% of the outstanding shares of our common stock. Lilly has informed us that it may make a tax-free distribution to its shareholders of all or a portion of its remaining equity interest, which may include one or more distributions effected as a dividend to all Lilly shareholders, one or more distributions in exchange for Lilly shares or other securities, or any combination thereof. Lilly does not have any obligation to pursue or consummate any further dispositions of its ownership interest in us by any specified date or at all. In connection with the Separation, we will continue to have certain ongoing relationships with Lilly as described in Note 14.

Implementation of New Financial

Implementation of New Financial Accounting Pronouncements	9 Months Ended
	Sep. 30, 2018
Accounting Changes and Error Corrections [Abstract]
Implementation of New Financial Accounting Pronouncements	Note 4. Implementation of New Financial Accounting Pronouncements The following table provides a brief description of accounting standards that were effective January 1, 2018 and were adopted on that date: Standard Description Effect on the financial statements or other significant matters Accounting Standards Update 2014-09 and various other related updates, Revenue from Contracts with Customers This standard replaced existing revenue recognition standards and requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity can apply the new revenue standard retrospectively to each prior reporting period presented or with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings. We applied the latter approach. Application of the new standard to applicable contracts had no impact to net parent company investment as of January 1, 2018. Disclosures required by the new standard are included in Note 5. Accounting Standards Update 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory This standard requires entities to recognize the income tax consequences of intra-entity transfers of assets other than inventory at the time of transfer. This standard requires a modified retrospective approach to adoption. Upon adoption, the cumulative effect of applying the standard resulted in a decrease to net parent company investment of approximately $0.3 million. Adoption of this standard did not result in a material change in net income for the three and nine months ended September 30, 2018. Accounting Standards Update 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost This standard was issued to improve the transparency and comparability among organizations by requiring entities to separate their net periodic pension cost and net periodic postretirement benefit cost into a service cost component and other components. Previously, the costs of the other components along with the service cost component were classified based upon the function of the employee. This standard requires entities to classify the service cost component in the same financial statement line item or items as other compensation costs arising from services rendered by pertinent employees. The other components of net benefit cost are now presented separately from the line items that include the service cost component. When applicable, the service cost component is now the only component eligible for capitalization. An entity should apply the new standard retrospectively for the classification of the service cost and other components and prospectively for the capitalization of the service cost component. Upon adoption of this standard, pension and postretirement benefit cost components other than service costs are presented in other–net, (income) expense. Retrospective application was not material to the combined statement of operations for the three and nine months ended September 30, 2017. We do not expect application of the new standard to have a material impact on an ongoing basis. The following table provides a brief description of the accounting standard that has not yet been adopted and could have a material effect on the consolidated financial statements: Standard Description Effective Date Effect on the financial statements or other significant matters Accounting Standards Update 2016-02, Leases This standard was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities, including leases classified as operating leases under current GAAP, on the balance sheet and requiring additional disclosures about leasing arrangements. An entity can apply the new leases standard retrospectively to each prior reporting period presented or with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings. We plan to use the latter approach. This standard is effective January 1, 2019, with early adoption permitted. We intend to adopt this standard on that date. We are in the process of determining the impact on our consolidated financial statements. We have selected a software solution to be compatible with our enterprise software system. Development of our selected solution is ongoing, as it is not yet fully compliant with the requirements of the standard. The timely readiness of the lease software system is critical to ensure an efficient and effective adoption of the standard.

Revenue

Revenue	9 Months Ended
	Sep. 30, 2018
Revenue from Contract with Customer [Abstract]
Revenue	Note 5. Revenue Effective January 1, 2018, we adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09) and other related updates. The new standard has been applied to contracts for which performance had not been completed as of the date of adoption. Revenue presented for periods prior to 2018 were accounted for under previous standards and has not been adjusted. Revenue and net income for the three and nine months ended September 30, 2018 do not differ materially from amounts that would have resulted from application of the previous standards. Product Sales We recognize revenue primarily from product sales to customers. Revenue from sales of products is recognized at the point where the customer obtains control of the goods and we satisfy our performance obligation, which generally is at the time we ship the product to the customer. Payment terms differ by jurisdiction and customer, but payment terms in most of our major jurisdictions typically range from 30 to 100 days from date of shipment. Revenue for our product sales has not been adjusted for the effects of a financing component as we expect, at contract inception, that the period between when we transfer control of the product and when we receive payment will be one year or less. Any exceptions are either not material or we collect interest for payments made after the due date. Provisions for rebates and discounts, and returns are established in the same period the related sales are recognized. We generally, ship product shortly after orders are received; therefore, we generally only have a few days of orders received but not yet shipped at the end of any reporting period. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are imposed on our sales of product and collected from a customer. Significant judgments must be made in determining the transaction price for sales of products related to anticipated rebates and discounts, and returns. The following describe the most significant of these judgments: Sales Rebates and Discounts - Background and Uncertainties • Most of our products are sold to wholesale distributors. We initially invoice our customers contractual list prices. Contracts with direct and indirect customers may provide for various rebates and discounts that may differ in each contract. As a consequence, to determine the appropriate transaction price for our product sales at the time we recognize a sale to a direct customer, we must estimate any rebates or discounts that ultimately will be due to the direct customer and other customers in the distribution chain under the terms of our contracts. Significant judgments are required in making these estimates. • The rebate and discount amounts are recorded as a deduction to arrive at our net product sales. We estimate these accruals using an expected value approach. • In determining the appropriate accrual amount, we consider our historical experience with similar incentives programs and current sales data to estimate the impact of such programs on revenue and continually monitor the impact of this experience and adjust as necessary. Although we accrue a liability for rebates related to these programs at the time the sale is recorded, the rebate related to that sale is typically paid up to six months after rebate or incentive period expires. Because of this time lag, in any particular period rebate adjustments may incorporate revisions of accruals for several periods. Our sales rebates and discounts are based on specific agreements and the majority relate to sales in the U.S. As of September 30, 2018 and 2017 , liability for sales rebates and discounts in the U.S. represents approximately 70% and 71% , respectively, of our total liability with the next largest country representing approximately 8% and 6% , respectively, of our total liability. The following table summarizes the activity in the sales rebates and discounts liability in the U.S.: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Beginning balance $ 99.1 $ 118.7 $ 114.8 $ 116.1 Reduction of revenue 53.5 48.6 154.2 184.9 Payments (49.1 ) (49.6 ) (165.5 ) (183.3 ) Ending balance $ 103.5 $ 117.7 $ 103.5 $ 117.7 Adjustments to revenue recognized as a result of changes in estimates for the judgments described above during the three and nine months ended September 30, 2018 for product shipped in previous periods were not material. Sales Returns - Background and Uncertainties • We estimate a reserve for future product returns related to product sales using an expected value approach. This estimate is based on several factors, including: local returns policies and practices; returns as a percentage of revenue; an understanding of the reasons for past returns; estimated shelf life by product; and estimate of the amount of time between shipment and return. Adjustments to the returns reserve have been and may in the future be required based on revised estimates to our assumptions, which would have an impact on our consolidated results of operations. We record the return amounts as a deduction to arrive at our net product sales. • Actual product returns have been approximately 1% of net revenue for the three and nine months ended September 30, 2018 and 2017 and have not fluctuated significantly as a percentage of revenue. Disaggregation of Revenue The following table summarizes our revenue disaggregated by product category: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Companion Animal Disease Prevention $ 188.6 $ 140.4 $ 603.9 $ 519.7 Companion Animal Therapeutics 80.5 63.5 211.1 181.8 Companion Animal Other 27.7 48.3 69.3 119.9 Food Animal Future Protein & Health 162.8 164.5 502.1 456.0 Food Animal Ruminants & Swine 301.5 280.4 881.1 857.3 Revenue $ 761.1 $ 697.1 $ 2,267.5 $ 2,134.7

Asset Impairment, Restructuring

Asset Impairment, Restructuring and Other Special Charges	9 Months Ended
	Sep. 30, 2018
Restructuring and Related Activities [Abstract]
Asset Impairment, Restructuring and Other Special Charges	Note 6. Asset Impairment, Restructuring and Other Special Charges We have historically participated in Lilly's cost-reduction initiatives. Our total charges related to asset impairment, restructuring and other special charges, including integration of acquired businesses, in the unaudited condensed consolidated and combined statements of operations consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cash expense: Severance $ (0.2 ) $ 5.8 $ (2.8 ) $ 62.1 Integration and other 4.9 6.4 10.5 75.1 Exit costs 1.5 11.5 11.2 24.3 Total cash expense 6.2 23.7 18.9 161.5 Non-cash expense Asset impairment 6.2 — 63.9 43.8 Total non-cash expense 6.2 — 63.9 43.8 Gain on sale of fixed assets — — — (16.0 ) Total $ 12.4 $ 23.7 $ 82.8 $ 189.3 Severance costs represent costs incurred as a result of actions taken to reduce our cost structure. Integration and other costs primarily represent costs related to our integration efforts as a result of our acquired businesses. Exit costs primarily represent contract termination costs and reserves for costs related to facilities which we have exited. Asset impairment recognized during the nine months ended September 30, 2018 resulted from $19.9 million of intangible asset impairments and $44.0 million of fixed asset impairments. The intangible asset impairments primarily related to revised projections of fair value due to product rationalization. The fixed asset impairments were primarily due to the decision to dispose of a manufacturing facility in the U.S. and to the suspension of commercial activities for Imrestor®. Asset impairment recognized during the nine months ended September 30, 2017 resulted primarily from intangible asset impairments related to revised projections of fair value due to product rationalization and to a lessor extent competitive pressures. The fair value measurements utilized to determine the intangible asset impairments in 2018 and 2017 represent Level 3 fair value measurements. Gain on sale of fixed assets for the nine months ended September 30, 2017 represents a gain on the disposal of a site that was previously closed as part of the acquisition and integration of Novartis Animal Health. The following table summarizes the activity in our reserves established in connection with these restructuring activities: Exit costs Severance Total Balance at December 31, 2016 $ 11.5 $ 26.6 $ 38.1 Charges 24.3 62.1 86.4 Cash paid (7.6 ) (61.8 ) (69.4 ) Balance at September 30, 2017 $ 28.2 $ 26.9 $ 55.1 Balance at December 31, 2017 $ 34.9 $ 43.1 $ 78.0 Charges 11.2 (2.8 ) 8.4 Separation adjustment (5.9 ) — (5.9 ) Cash paid (10.9 ) (22.6 ) (33.5 ) Balance at September 30, 2018 $ 29.3 $ 17.7 $ 47.0 Substantially all of the reserves are expected to be paid in the next twelve months. We believe that the reserves are adequate.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2018
Inventory Disclosure [Abstract]
Inventories	Note 7. Inventories We state all inventories at the lower of cost or market. We use the last-in, first-out (LIFO) method for a portion of our inventories located in the continental U.S. Other inventories are valued by the first-in, first-out (FIFO) method. FIFO cost approximates current replacement cost. Inventories consisted of the following: September 30, 2018 December 31, 2017 Finished products $ 408.1 $ 452.0 Work in process 572.3 580.0 Raw materials and supplies 71.4 70.4 Total (approximates replacement cost) 1,051.8 1,102.4 Decrease to LIFO cost (43.1 ) (40.1 ) Inventories $ 1,008.7 $ 1,062.3 During the nine months ended September 30, 2018, we recognized $38.6 million of inventory write-offs in cost of sales primarily related to the suspension of commercial activities for Imrestor.

Debt

Debt	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Debt	Note 8. Debt Long-term debt as of September 30, 2018 consisted of the following: September 30, 2018 Term credit facility $ 500.0 3.912% Senior Notes due 2021 500.0 4.272% Senior Notes due 2023 750.0 4.900% Senior Notes due 2028 750.0 Other obligations 0.2 Unamortized debt issuance costs (21.7 ) Total long-term debt 2,478.5 Less current portion of long-term debt — $ 2,478.5 Long-term debt as of December 31, 2017 was not material. Revolving and Term Credit Facilities On September 5, 2018 , we entered into a revolving credit agreement with a syndicate of banks providing for a five -year $750.0 million senior unsecured revolving credit facility (Revolving Facility). The Revolving Facility bears interest at a variable rate plus specified margin as defined in the agreement and is payable quarterly. There were no borrowings outstanding under the Revolving Facility at September 30, 2018 . The Revolving Facility is payable in full at the end of the term. On September 5, 2018 we also entered into a $500.0 million three -year term loan under a term credit facility with a syndicate of banks (the Term Facility and collectively with the Revolving Facility, the Credit Facilities.) The Term Facility bears interest at a variable rate plus margin as defined in Term Facility ( 3.50% at September 30, 2018) and is payable quarterly. The Term Facility is payable in full at the end of the term. The Credit Facilities are subject to various financial and other covenants including restrictions on the level of borrowings based on a consolidated leverage ratio and a consolidated interest coverage ratio. We were in compliance with all such covenants as of September 30, 2018 . Senior Notes On August 28, 2018 , we issued $2.0 billion of senior notes (Senior Notes) in a private placement. The Senior Notes comprised of $500.0 million of 3.912% Senior Notes due August 27, 2021 , $750.0 million of 4.272% Senior Notes due August 28, 2023 , and $750.0 million of 4.900% Senior Notes due August 28, 2028 . The interest rate payable on each series of Senior Notes is subject to adjustment if Moody's Investor Services, Inc. or Standard & Poor's Financial Services LLC downgrades, or subsequently upgrades, its ratings on the respective series of Senior Notes. The indenture that governs the Senior Notes contains covenants, including limitations on our ability, and certain of our subsidiaries, to incur liens or engage in sale-leaseback transactions. The indenture also contains restrictions on our ability to consolidate, merge or sell substantially all of our assets, in addition, to other customary terms. We were in compliance with all such covenants under the indenture governing the Senior Notes as of September 30, 2018. We have entered into an agreement that requires us to use commercially reasonable efforts to cause a registration statement to become effective with the SEC by August 28, 2019, relating to an offer to exchange the Senior Notes for registered Senior Notes having substantially identical terms, or, in certain cases, to register the Senior Notes for resale. If we do not register or exchange the Senior Notes pursuant to the terms of the registration rights agreement, we will be required to pay additional interest to the holders of the Senior Notes under certain circumstances.

Financial Instruments and Fair

Financial Instruments and Fair Value	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Financial Instruments and Fair Value	Note 9. Financial Instruments and Fair Value Financial instruments that are potentially subject to credit risk consist principally of trade receivables. Collateral is generally not required. The risk associated with this concentration is mitigated by our ongoing credit-review procedures and insurance. A large portion of our cash is held by a few major financial institutions. We monitor the exposure with these institutions and do not expect any of these institutions to fail to meet their obligations. All highly liquid investments with a maturity of three months or less from the date of purchase are considered to be cash equivalents. The cost of these investments approximates fair value. We also consider the carrying value of restricted cash balances to be representative of its fair value. As of September 30, 2018 and December 31, 2017 , we had $14.9 million and $12.3 million , respectively, of cost and equity method investments. The following table summarizes the fair value information at September 30, 2018 and December 31, 2017 for contingent consideration liabilities measured at fair value on a recurring basis in the respective balance sheet line items: Fair Value Measurements Using Financial statement line item Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value September 30, 2018 Other current liabilities- contingent consideration $ 17.4 $ — $ — $ 17.4 $ 17.4 Other noncurrent liabilities- contingent consideration 41.4 — — 41.4 41.4 December 31, 2017 Other current liabilities- contingent consideration 1.3 — — 1.3 1.3 Other noncurrent liabilities- contingent consideration 45.2 — — 45.2 45.2 Contingent consideration liabilities relate to Galliprant for which the fair value was estimated using a discounted cash flow analysis and Level 3 inputs, including projections representative of a market participant view for the probability of achieving potential future payments to Aratana Therapeutics, Inc. and an estimated discount rate. The amount to be paid is dependent upon certain development, success-based regulatory, and sales-based milestones. In addition, the amount of royalties to be paid is calculated as a percentage of net sales dependent upon the timing and geography and will, therefore, vary directly with increases and decreases in net sales of Galliprant . There is no cap on the amount that may be paid pursuant to this arrangement. During the second quarter of 2018, as a result of an increase in the projected cash flows related to Galliprant, we increased the fair value of the contingent consideration liabilities by $8.5 million . The additional expense was recognized in other-net (income) expense. We have long term debt of $2.5 billion that is recorded at amortized cost in our condensed consolidated balance sheet as of September 30, 2018. We consider the carrying value of the long term debt to be representative of its fair value as of September 30, 2018. The fair value of this long term debt is estimated based on quoted market prices of similar liabilities and is classified as Level 2. As of December 31, 2017 , long term debt was not material.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Note 10. Income Taxes Prior to Separation During the periods presented in the unaudited condensed consolidated and combined financial statements, our operations were generally included in the tax grouping of other Lilly entities within the respective entity's tax jurisdiction; however, in certain jurisdictions, we filed separate tax returns. Prior to the Separation, the income tax expense included in these financial statements has been calculated using the separate return basis as if Elanco filed separate tax returns. For the three and nine months ended September 30, 2018 , we incurred $18.6 million and $46.2 million , respectively, of income tax expense. For the three and nine months ended September 30, 2018 , the effective tax rate of 23.6% and 39.7% , respectively, was primarily attributable to a net operating loss in the U.S. for which no tax benefit was recognized and a valuation allowance was recorded. For the three and nine months ended September 30, 2017 , despite reporting a loss before taxes of $9.1 million and $77.2 million , respectively, we incurred $11.6 million and $72.0 million of income tax expense. The tax expense recorded related primarily to income generated in certain foreign jurisdictions as no tax benefit was recorded for U.S. net operating losses. In December 2017, the President of the U.S. signed into law the Tax Cuts and Jobs Act (2017 Tax Act), which includes significant changes to the U.S. corporate income tax system, including a reduction in the corporate income tax rate, transition to a territorial tax system, and modifications to the international tax provisions. At September 30, 2018 , our accounting for the 2017 Tax Act is incomplete; however, we expect to complete our accounting by December 2018. As discussed in our combined financial statements and accompanying notes as of and for the year ended December 31, 2017 included in our IPO Prospectus, we recorded provisional adjustments for effects that we were able to reasonably estimate. Those effects included the one-time repatriation transition tax (also known as the Toll Tax), re-measurement of deferred tax assets and liabilities, unremitted earnings, executive compensation, and uncertain tax positions. At December 31, 2017 , we were not able to make reasonable estimates for Global Intangible Low-Taxed Income (GILTI) deferred taxes or changes to the valuation allowances; therefore, we did not record provisional amounts. We are still evaluating the effects of the GILTI provisions and assessing our valuation allowances, and we have not yet concluded upon our accounting policy election with respect to GILTI deferred taxes or the application of intra entity transfers of inventory; therefore, the estimated annual effective tax rate reflects GILTI as a period expense. For the three and nine months ended September 30, 2018 , we have not made any additional measurement-period adjustments related to provisional amounts as we are continuing to collect and analyze additional information as well as evaluate the interpretations and assumptions made. Updates to the calculations may result in material changes to the provisional adjustments recorded at December 31, 2017 and the estimated annual effective tax rate. As part of Lilly, we are included in Lilly's U.S. tax examinations by the Internal Revenue Service (IRS). The IRS examination of tax years 2013-2015 began in 2016. While we believe it is reasonably possible that this audit could reach a resolution within the next twelve months, the IRS examination of tax years 2013-2015 remains ongoing. For periods prior to the Separation, Lilly will retain the liabilities related to such IRS audit resolutions. Impact of Separation In connection with the Separation, we entered into a tax matters agreement (TMA) with Lilly that, among other things, formalized our agreement related to the responsibility for historical tax positions for the periods prior to the Separation for jurisdictions where our business was included in the consolidated or combined tax returns of Lilly. The TMA also established a tax sharing agreement for jurisdictions where our business will continue to be included in Lilly's consolidated or combined tax returns for a period of time. Based on the TMA, Lilly retained the tax benefits and liabilities associated with all periods prior to the Separation date for any jurisdiction where we were included in a consolidated or combined tax return. The financial statements for periods prior to Separation included certain deferred tax assets related to tax credit and net operating loss carryovers that resulted from our tax expense being calculated on a separate return basis that will not transfer to us either because they were used by Lilly or are retained by Lilly and reflected certain tax liabilities that will be retained by Lilly. We recorded an adjustment to our consolidated balance sheet at the date of Separation to reflect our tax positions based on the TMA. This resulted in a decrease in tax liabilities by $31.2 million as these tax liabilities will be retained by Lilly. At September 30, 2018 , we have net operating losses for international tax purposes of approximately $190 million which will expire between 2022 and 2028. These net operating losses are partially reserved. Deferred tax assets related to state net operating losses are $6.2 million . The state net operating losses will generally expire between 2035 and 2037.

Contingencies

Contingencies	9 Months Ended
	Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Contingencies	Note 11. Contingencies We are party to various legal actions in the normal course of business. We record a liability if there is a claim for which it is probable a payment will be made and the amount is estimable. At September 30, 2018 and December 31, 2017 , we had no liabilities established related to litigation as there are no claims which were probable and estimable. We have not historically had any significant litigation expense and are not currently subject to any claim.

Geographic Information

Geographic Information	9 Months Ended
	Sep. 30, 2018
Segment Reporting [Abstract]
Geographic Information	We operate as a single operating segment engaged in the development, manufacturing, marketing and sales of animal health products worldwide for both food animals and companion animals. Consistent with our operational structure, our President and Chief Executive Officer (CEO), as the chief operating decision maker, makes resource allocation and business process decisions globally across our consolidated business. Strategic decisions are managed globally with global functional leaders responsible for determining significant cost/investments and with regional leaders responsible for overseeing the execution of the global strategy. Our global research and development organization is responsible for development of new products. Our manufacturing organization is responsible for the manufacturing and supply of products and for the optimization of our supply chain. Regional leaders are responsible for the distribution and sale of our products and for local direct costs. The business is also supported by global corporate staff functions. Managing and allocating resources at the global corporate level enables our CEO to assess the overall level of resources available and how to best deploy these resources across functions, product types, regional commercial organizations and research and development projects in line with our overarching long-term corporate-wide strategic goals, rather than on a product or geographic basis. Consistent with this decision-making process, our CEO uses consolidated, single-segment financial information for purposes of evaluating performance, allocating resources, setting incentive compensation targets, as well as forecasting future period financial results. Our products include Rumensin ® , Optaflexx ® , Denagard ® , Tylan ® , Maxiban ® and other products for livestock and poultry, as well as Trifexis ® , Interceptor ® , Comfortis ® and other products for companion animals. We have a single customer who accounted for 11.1% and 9.4% of revenue for the three months ended September 30, 2018 and 2017 , respectively, and for 11.5% and 11.9% of revenue for the nine months ended September 30, 2018 and 2017 , respectively. The product sales resulted in accounts receivable with this customer of $79.5 million and $88.0 million as of September 30, 2018 and December 31, 2017 , respectively. We are exposed to the risk of changes in social, political and economic conditions inherent in foreign operations and our results of operations and the value of its foreign assets are affected by fluctuations in foreign currency exchange rates. Selected geographic area information was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue—to unaffiliated customers (1) United States $ 382.2 $ 321.4 $ 1,108.6 $ 1,054.6 International 378.9 375.7 1,158.9 1,080.1 Revenue $ 761.1 $ 697.1 $ 2,267.5 $ 2,134.7 September 30, 2018 December 31, 2017 Long-lived assets (2) United States $ 589.5 $ 604.7 United Kingdom 195.9 204.4 Other foreign countries 190.5 190.2 Long-lived assets $ 975.9 $ 999.3 (1) Revenue is attributed to the countries based on the location of the customer. (2) Long-lived assets consist of property and equipment, net, and certain noncurrent assets.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2018
Earnings Per Share [Abstract]
Earnings Per Share	Note 13. Earnings Per Share We have calculated earnings per share assuming 365,625,000 shares were outstanding for all periods presented. This represents an aggregate of 293,290,000 shares of our common stock held by Lilly (which represents the 100 shares held by Lilly prior to giving effect to the 2,932,900 -for-1 stock split that occurred on September 19, 2018), the issuance of 62,900,000 shares of our common stock in the IPO, and the issuance of 9,435,000 shares of our common stock sold pursuant to the underwriters’ option to purchase additional shares.

Related Party Agreements and Tr

Related Party Agreements and Transactions	9 Months Ended
	Sep. 30, 2018
Related Party Transactions [Abstract]
Related Party Agreements and Transactions	Note 14. Related Party Agreements and Transactions Separation-Related Agreements with Lilly As described in Note 1, in connection with the Separation Lilly transferred to us substantially all of its animal health businesses in exchange for approximately $4.2 billion . This is reflected as consideration to Lilly in our statement of equity. In addition, we entered into a master separation agreement and a transitional services agreement with Lilly. Master Separation Agreement (MSA) As stated in Note 1, Lilly transferred to us at the time of Separation, through a series of transactions, the businesses that will continue as part of Elanco. For a certain portion of our operations, the legal transfer of our net assets did not occur prior to the Separation due to certain regulatory requirements in each of these countries. Under the MSA entered into with Lilly, we are responsible for the business activities conducted by Lilly on our behalf and are subject to the risks and entitled to the benefits generated by these operations and assets. As a result, the related assets and liabilities and results of operations have been reported in our unaudited condensed consolidated and combined financial statements. The total net assets associated with these jurisdictions are $84.5 million and the annual profits are insignificant. Upon Separation, we retained $275.0 million , which is reflected as restricted cash, that will be used to fund the purchase of these operations from Lilly at the time of the local country closing and have an offsetting payable to Lilly. If the amount of local purchases is less than $275.0 million , we are required to repay the remaining amount to Lilly. In addition, based on the MSA, we are required to distribute to Lilly any amount of cash in excess of $300.0 million held at September 30, 2018 . As a result, we have reflected an additional $359.9 million of restricted cash on our balance sheet with an offsetting payable to Lilly at September 30, 2018 . Transitional Services Agreement (TSA) Historically, Lilly has provided us significant shared services and resources related to corporate functions such as executive oversight, treasury, legal, finance, human resources, tax, internal audit, financial reporting, information technology and investor relations, which we refer to collectively as the "Lilly Services." Under the terms of the TSA, we will be able to use Lilly Services for a fixed term established on a service-by-service basis. We will pay Lilly mutually agreed-upon fees for the Lilly Services provided under the TSA, which will be based on Lilly's cost (including third-party costs) of providing the Lilly Services through March 31, 2021 , and subject to a mark-up of 7% thereafter, with additional inflation-based escalation beginning January 1, 2020 . The fees under the TSA become payable for all periods beginning after October 1, 2018 . We also entered into a TMA, an employee matters agreement, a toll manufacturing and supply agreement and a registration rights agreement with Lilly in connection with the Separation. Transactions with Lilly Prior to Separation We did not historically operate as a standalone business and had various relationships with Lilly whereby Lilly provided services to us. Transfers to/from Lilly, net As discussed in the basis of presentation, net parent company investment is primarily impacted by contributions from Lilly which are the result of treasury activity and net funding provided by or distributed to Lilly. For the three months ended September 30, 2018 and 2017 , respectively, the net transfers (to)/from Lilly were $(116.8) million and $38.1 million . For the nine months ended September 30, 2018 and 2017 , respectively, the net transfers (to)/from Lilly were $(226.3) million and $862.7 million , respectively. The most significant activity impacting the 2017 transfer was the financing by Lilly of our acquisition in the amount of $882.1 million for Boehringer Ingelheim Vetmedica, Inc.'s United States feline, canine, and rabies vaccine portfolio and other related assets in 2017. Other activities that impacted the net transfers (to)/from Lilly include corporate overhead and other allocations, income taxes, retirement benefits, and centralized cash management. Corporate Overhead and Other Allocations Lilly provides us certain services, including executive oversight, treasury, legal, finance, human resources, tax, internal audit, financial reporting, information technology and investor relations. We provide Lilly certain services related to manufacturing support. Our financial statements reflect an allocation of these costs. When specific identification is not practicable, the remainder have been allocated primarily on a proportional cost method on a basis of revenue or headcount. The allocations of services from Lilly to us were reflected as follows in the unaudited condensed consolidated and combined statements of operations: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cost of sales $ 7.0 $ 7.7 $ 21.8 $ 23.0 Research and development 0.7 0.7 2.2 2.1 Marketing, selling and administrative 26.4 27.7 81.2 82.7 Total $ 34.1 $ 36.1 $ 105.2 $ 107.8 We provide Lilly certain services related to manufacturing support. Allocations of manufacturing support from us to Lilly of $1.3 million and $1.5 million for the three months ended September 30, 2018 and 2017 , respectively, as well as $3.7 million and $4.5 million for the nine months ended September 30, 2018 and 2017 , respectively, reduced the cost of sales in the unaudited condensed consolidated and combined statements of operations. The financial information herein may not necessarily reflect our consolidated financial position, results of operations and cash flows in the future or what they would have been if we had been a separate, standalone entity during the periods presented. Management believes that the methods used to allocate expenses are reasonable. Stock-based Compensation Our employees participate in Lilly stock-based compensation plans, the costs of which have been allocated to us and recorded in cost of sales, research and development, and marketing, selling and administrative expenses in the unaudited condensed consolidated and combined statements of operations. The costs of such plans related to our employees were $6.9 million and $6.2 million for the three months ended September 30, 2018 and 2017 , respectively, as well as $20.2 million and $18.7 million for the nine months ended September 30, 2018 and 2017 , respectively. Retirement Benefits Our employees participate in defined benefit pension and other post retirement plans sponsored by Lilly, the costs and benefits of which have been recorded in the unaudited condensed consolidated and combined statement of operations in cost of sales, research and development, and marketing, selling and administrative expenses. For the three and nine months ended September 30, 2018 , the benefit of such plans related to our employees was $1.6 million and $0.3 million , respectively, and for the three and nine months ended September 30, 2017 the costs of such plans related to our employees were $1.7 million and $5.1 million , respectively. Centralized Cash Management Lilly uses a centralized approach to cash management and financing of operations. Until Separation, the majority of our business was party to Lilly’s cash pooling arrangements to maximize Lilly's availability of cash for general operating and investing purposes. Under these cash pooling arrangements, cash balances were swept regularly from our accounts. Cash transfers to and from Lilly’s cash concentration accounts and the resulting balances at the end of each reporting period were reflected in net parent company investment in the condensed consolidated and combined balance sheets. Debt Lilly’s third-party debt and the related interest expense have not been allocated to us for any of the periods presented as we were not the legal obligor of the debt and Lilly borrowings were not directly attributable to our business. Commercial Operations We sell certain products to and receives certain goods and services from a customer/vendor, whose chairman and Chief Executive Officer is a member of Lilly's Board of Directors. These product sales resulted in revenue of $4.2 million and $6.6 million for the three months ended September 30, 2018 and 2017 , respectively, and of $16.4 million and $17.8 million for the nine months ended September 30, 2018 and 2017 , respectively. The product sales resulted in accounts receivable of $1.9 million and $2.0 million at September 30, 2018 and December 31, 2017 , respectively. The purchase of goods and services resulted in cost of sales and operating expenses of $1.4 million and $1.1 million for the three months ended September 30, 2018 and 2017 , respectively, as well as $3.3 million and $5.3 million September 30, 2018 and 2017 , respectively. The purchase of goods and services resulted in accounts payable of $0.4 million and $0.3 million at September 30, 2018 and December 31, 2017 , respectively.

Basis of Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	We have prepared the accompanying unaudited condensed consolidated and combined financial statements in accordance with the requirements of Form 10-Q and, therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States (GAAP). In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for a fair presentation of the results of operations for the periods shown. In preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates.
Reclassifications	Certain reclassifications have been made to prior periods in the unaudited condensed consolidated and combined financial statements and accompanying notes to conform with current presentation.
Consolidation	For the periods after Separation, the financial statements are prepared on a consolidated basis. For periods prior to the Separation, our financial statements are combined, have been prepared on a standalone basis, and are derived from Lilly's consolidated financial statements and accounting records. The unaudited condensed combined financial statements reflect the financial position, results of operations and cash flows related to the animal health businesses that were transferred to Elanco Parent and are prepared in conformity with GAAP. The unaudited condensed combined financial statements include the attribution of certain assets and liabilities that historically have been held at the Lilly corporate level but which are specifically identifiable or attributable to the businesses that have been transferred to Elanco Parent. All intercompany transactions and accounts within Elanco have been eliminated. All transactions between us and Lilly are considered to be effectively settled in the unaudited condensed combined financial statements at the time the intercompany transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the unaudited condensed combined statements of cash flows as a financing activity and in the condensed combined balance sheets as net parent company investment.
Expenses Related to Certain Corporate Functions	These unaudited condensed combined financial statements include an allocation of expenses related to certain Lilly corporate functions, including executive oversight, treasury, legal, finance, human resources, tax, internal audit, financial reporting, information technology and investor relations. These expenses have been allocated to us based on direct usage or benefit where specifically identifiable, with the remainder allocated primarily on a pro rata basis of revenue, headcount and other measures. We consider the expenses methodology and results to be reasonable for all periods presented. However, the allocations may not be indicative of the actual expense that would have been incurred had we operated as an independent, publicly traded company for the periods presented. It is impractical to estimate what the standalone costs of Elanco would have been in the historical periods.
Income Tax	The income tax amounts in the unaudited condensed combined financial statements have been calculated based on a separate return methodology and presented as if our operations were separate taxpayers in the respective jurisdictions. We file income tax returns in the United States (U.S.) federal jurisdiction and various state, local and non-U.S. jurisdictions. Certain of these income tax returns are filed on a consolidated or combined basis with Eli Lilly and Company and/or its subsidiaries.
Benefit and Combined Stock-Based Compensation Plans	Lilly maintains various benefit and combined stock-based compensation plans at a corporate level and other benefit plans at a country level. Our employees participate in such programs and the portion of the cost of those plans related to our employees is included in our financial statements. However, the condensed combined balance sheets do not include any equity issued related to stock-based compensation plans or any net benefit plan obligations unless the benefit plan covers only our dedicated employees or where the legal obligation associated with the benefit plan will transfer to Elanco.
Equity Balance	Prior to Separation, the equity balance in the unaudited condensed combined financial statements represents the excess of total assets over liabilities, including intercompany balances between us and Lilly (net parent company investment) and accumulated other comprehensive loss. Net parent company investment is primarily impacted by contributions from Lilly which are the result of treasury activities and net funding provided by or distributed to Lilly.
New Financial Accounting Pronouncements	The following table provides a brief description of accounting standards that were effective January 1, 2018 and were adopted on that date: Standard Description Effect on the financial statements or other significant matters Accounting Standards Update 2014-09 and various other related updates, Revenue from Contracts with Customers This standard replaced existing revenue recognition standards and requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity can apply the new revenue standard retrospectively to each prior reporting period presented or with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings. We applied the latter approach. Application of the new standard to applicable contracts had no impact to net parent company investment as of January 1, 2018. Disclosures required by the new standard are included in Note 5. Accounting Standards Update 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory This standard requires entities to recognize the income tax consequences of intra-entity transfers of assets other than inventory at the time of transfer. This standard requires a modified retrospective approach to adoption. Upon adoption, the cumulative effect of applying the standard resulted in a decrease to net parent company investment of approximately $0.3 million. Adoption of this standard did not result in a material change in net income for the three and nine months ended September 30, 2018. Accounting Standards Update 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost This standard was issued to improve the transparency and comparability among organizations by requiring entities to separate their net periodic pension cost and net periodic postretirement benefit cost into a service cost component and other components. Previously, the costs of the other components along with the service cost component were classified based upon the function of the employee. This standard requires entities to classify the service cost component in the same financial statement line item or items as other compensation costs arising from services rendered by pertinent employees. The other components of net benefit cost are now presented separately from the line items that include the service cost component. When applicable, the service cost component is now the only component eligible for capitalization. An entity should apply the new standard retrospectively for the classification of the service cost and other components and prospectively for the capitalization of the service cost component. Upon adoption of this standard, pension and postretirement benefit cost components other than service costs are presented in other–net, (income) expense. Retrospective application was not material to the combined statement of operations for the three and nine months ended September 30, 2017. We do not expect application of the new standard to have a material impact on an ongoing basis. The following table provides a brief description of the accounting standard that has not yet been adopted and could have a material effect on the consolidated financial statements: Standard Description Effective Date Effect on the financial statements or other significant matters Accounting Standards Update 2016-02, Leases This standard was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities, including leases classified as operating leases under current GAAP, on the balance sheet and requiring additional disclosures about leasing arrangements. An entity can apply the new leases standard retrospectively to each prior reporting period presented or with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings. We plan to use the latter approach. This standard is effective January 1, 2019, with early adoption permitted. We intend to adopt this standard on that date. We are in the process of determining the impact on our consolidated financial statements. We have selected a software solution to be compatible with our enterprise software system. Development of our selected solution is ongoing, as it is not yet fully compliant with the requirements of the standard. The timely readiness of the lease software system is critical to ensure an efficient and effective adoption of the standard.

Implementation of New Financi_2

Implementation of New Financial Accounting Pronouncements (Tables)	9 Months Ended
	Sep. 30, 2018
Accounting Changes and Error Corrections [Abstract]
Description of Accounting Standards Adopted and Not Yet Adopted	The following table provides a brief description of accounting standards that were effective January 1, 2018 and were adopted on that date: Standard Description Effect on the financial statements or other significant matters Accounting Standards Update 2014-09 and various other related updates, Revenue from Contracts with Customers This standard replaced existing revenue recognition standards and requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity can apply the new revenue standard retrospectively to each prior reporting period presented or with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings. We applied the latter approach. Application of the new standard to applicable contracts had no impact to net parent company investment as of January 1, 2018. Disclosures required by the new standard are included in Note 5. Accounting Standards Update 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory This standard requires entities to recognize the income tax consequences of intra-entity transfers of assets other than inventory at the time of transfer. This standard requires a modified retrospective approach to adoption. Upon adoption, the cumulative effect of applying the standard resulted in a decrease to net parent company investment of approximately $0.3 million. Adoption of this standard did not result in a material change in net income for the three and nine months ended September 30, 2018. Accounting Standards Update 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost This standard was issued to improve the transparency and comparability among organizations by requiring entities to separate their net periodic pension cost and net periodic postretirement benefit cost into a service cost component and other components. Previously, the costs of the other components along with the service cost component were classified based upon the function of the employee. This standard requires entities to classify the service cost component in the same financial statement line item or items as other compensation costs arising from services rendered by pertinent employees. The other components of net benefit cost are now presented separately from the line items that include the service cost component. When applicable, the service cost component is now the only component eligible for capitalization. An entity should apply the new standard retrospectively for the classification of the service cost and other components and prospectively for the capitalization of the service cost component. Upon adoption of this standard, pension and postretirement benefit cost components other than service costs are presented in other–net, (income) expense. Retrospective application was not material to the combined statement of operations for the three and nine months ended September 30, 2017. We do not expect application of the new standard to have a material impact on an ongoing basis. The following table provides a brief description of the accounting standard that has not yet been adopted and could have a material effect on the consolidated financial statements: Standard Description Effective Date Effect on the financial statements or other significant matters Accounting Standards Update 2016-02, Leases This standard was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities, including leases classified as operating leases under current GAAP, on the balance sheet and requiring additional disclosures about leasing arrangements. An entity can apply the new leases standard retrospectively to each prior reporting period presented or with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings. We plan to use the latter approach. This standard is effective January 1, 2019, with early adoption permitted. We intend to adopt this standard on that date. We are in the process of determining the impact on our consolidated financial statements. We have selected a software solution to be compatible with our enterprise software system. Development of our selected solution is ongoing, as it is not yet fully compliant with the requirements of the standard. The timely readiness of the lease software system is critical to ensure an efficient and effective adoption of the standard.

Revenue (Tables)

Revenue (Tables)	9 Months Ended
	Sep. 30, 2018
Revenue from Contract with Customer [Abstract]
Summary of Activity in Sales Rebates and Discounts Liability	The following table summarizes the activity in the sales rebates and discounts liability in the U.S.: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Beginning balance $ 99.1 $ 118.7 $ 114.8 $ 116.1 Reduction of revenue 53.5 48.6 154.2 184.9 Payments (49.1 ) (49.6 ) (165.5 ) (183.3 ) Ending balance $ 103.5 $ 117.7 $ 103.5 $ 117.7
Disaggregation of Revenue	The following table summarizes our revenue disaggregated by product category: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Companion Animal Disease Prevention $ 188.6 $ 140.4 $ 603.9 $ 519.7 Companion Animal Therapeutics 80.5 63.5 211.1 181.8 Companion Animal Other 27.7 48.3 69.3 119.9 Food Animal Future Protein & Health 162.8 164.5 502.1 456.0 Food Animal Ruminants & Swine 301.5 280.4 881.1 857.3 Revenue $ 761.1 $ 697.1 $ 2,267.5 $ 2,134.7

Asset Impairment, Restructuri_2

Asset Impairment, Restructuring and Other Special Charges (Tables)	9 Months Ended
	Sep. 30, 2018
Restructuring and Related Activities [Abstract]
Total Charges Related to Asset Impairment, Restructuring and Other Special Charges	Our total charges related to asset impairment, restructuring and other special charges, including integration of acquired businesses, in the unaudited condensed consolidated and combined statements of operations consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cash expense: Severance $ (0.2 ) $ 5.8 $ (2.8 ) $ 62.1 Integration and other 4.9 6.4 10.5 75.1 Exit costs 1.5 11.5 11.2 24.3 Total cash expense 6.2 23.7 18.9 161.5 Non-cash expense Asset impairment 6.2 — 63.9 43.8 Total non-cash expense 6.2 — 63.9 43.8 Gain on sale of fixed assets — — — (16.0 ) Total $ 12.4 $ 23.7 $ 82.8 $ 189.3
Summary of Activity in Reserves	The following table summarizes the activity in our reserves established in connection with these restructuring activities: Exit costs Severance Total Balance at December 31, 2016 $ 11.5 $ 26.6 $ 38.1 Charges 24.3 62.1 86.4 Cash paid (7.6 ) (61.8 ) (69.4 ) Balance at September 30, 2017 $ 28.2 $ 26.9 $ 55.1 Balance at December 31, 2017 $ 34.9 $ 43.1 $ 78.0 Charges 11.2 (2.8 ) 8.4 Separation adjustment (5.9 ) — (5.9 ) Cash paid (10.9 ) (22.6 ) (33.5 ) Balance at September 30, 2018 $ 29.3 $ 17.7 $ 47.0

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2018
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories consisted of the following: September 30, 2018 December 31, 2017 Finished products $ 408.1 $ 452.0 Work in process 572.3 580.0 Raw materials and supplies 71.4 70.4 Total (approximates replacement cost) 1,051.8 1,102.4 Decrease to LIFO cost (43.1 ) (40.1 ) Inventories $ 1,008.7 $ 1,062.3

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Schedule of Long-term Debt	Long-term debt as of September 30, 2018 consisted of the following: September 30, 2018 Term credit facility $ 500.0 3.912% Senior Notes due 2021 500.0 4.272% Senior Notes due 2023 750.0 4.900% Senior Notes due 2028 750.0 Other obligations 0.2 Unamortized debt issuance costs (21.7 ) Total long-term debt 2,478.5 Less current portion of long-term debt — $ 2,478.5

Financial Instruments and Fai_2

Financial Instruments and Fair Value (Tables)	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Summary of Fair Value Information	The following table summarizes the fair value information at September 30, 2018 and December 31, 2017 for contingent consideration liabilities measured at fair value on a recurring basis in the respective balance sheet line items: Fair Value Measurements Using Financial statement line item Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value September 30, 2018 Other current liabilities- contingent consideration $ 17.4 $ — $ — $ 17.4 $ 17.4 Other noncurrent liabilities- contingent consideration 41.4 — — 41.4 41.4 December 31, 2017 Other current liabilities- contingent consideration 1.3 — — 1.3 1.3 Other noncurrent liabilities- contingent consideration 45.2 — — 45.2 45.2

Geographic Information (Tables)

Geographic Information (Tables)	9 Months Ended
	Sep. 30, 2018
Segment Reporting [Abstract]
Revenue by Selected Geographic Area Information	Revenue is attributed to the countries based on the location of the customer. Selected geographic area information was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue—to unaffiliated customers (1) United States $ 382.2 $ 321.4 $ 1,108.6 $ 1,054.6 International 378.9 375.7 1,158.9 1,080.1 Revenue $ 761.1 $ 697.1 $ 2,267.5 $ 2,134.7
Long-lived Assets by Selected Geographic Area Information	September 30, 2018 December 31, 2017 Long-lived assets (2) United States $ 589.5 $ 604.7 United Kingdom 195.9 204.4 Other foreign countries 190.5 190.2 Long-lived assets $ 975.9 $ 999.3 Long-lived assets consist of property and equipment, net, and certain noncurrent assets.

Related Party Agreements and _2

Related Party Agreements and Transactions (Tables)	9 Months Ended
	Sep. 30, 2018
Related Party Transactions [Abstract]
Allocations of Services	The allocations of services from Lilly to us were reflected as follows in the unaudited condensed consolidated and combined statements of operations: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cost of sales $ 7.0 $ 7.7 $ 21.8 $ 23.0 Research and development 0.7 0.7 2.2 2.1 Marketing, selling and administrative 26.4 27.7 81.2 82.7 Total $ 34.1 $ 36.1 $ 105.2 $ 107.8

Nature of Business and Organi_2

Nature of Business and Organization (Details) $ / shares in Units, shares in Millions, $ in Millions	Sep. 24, 2018USD ($)$ / sharesshares	Sep. 30, 2018USD ($)brandcountry	Sep. 30, 2018USD ($)brandcountry	Sep. 30, 2017USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of brands in diverse portfolio (more than) | brand		125	125
Number of countries in which entity operates (more than) | country		90	90
Subsidiary, Sale of Stock [Line Items]
Amount transferred to parent			$ 3,559.1	$ 0
IPO
Subsidiary, Sale of Stock [Line Items]
Number of shares issued | shares	72.3
Percentage of total outstanding shares	19.80%
Price per share (usd per share) | $ / shares	$ 24
Total net proceeds, after underwriting discounts and commissions	$ 1,700
Payments made to date		$ 4,200	$ 4,200
Amount transferred to parent		$ 3,600

Basis of Presentation (Details)

Basis of Presentation (Details) - USD ($) $ in Millions	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Sales rebates and discounts liability	$ 103.5	$ 99.1	$ 114.8	$ 117.7	$ 118.7	$ 116.1
Total current liabilities	1,245.4		643.1
Total liabilities	4,074.4		1,160
Net parent company investment	0		8,036.9
Total equity	$ 5,137.1		7,780.3	$ 7,962.7		7,017.4
Rebates Related to Product Held in Wholesalers Pipeline | Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Sales rebates and discounts liability			10.5
Total current liabilities			10.5
Total liabilities			10.5
Net parent company investment			(10.5)			(10.5)
Total equity			(10.5)			(10.5)
Rebates Related to Product Held in Wholesalers Pipeline | Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Sales rebates and discounts liability			155
Total current liabilities			632.6
Total liabilities			1,149.5
Net parent company investment			8,047.4			7,484.8
Total equity			$ 7,790.8			$ 7,027.9

Impact of Separation (Details)

Impact of Separation (Details) - USD ($)	Sep. 24, 2018	Sep. 30, 2018	Sep. 05, 2018	Aug. 28, 2018
Debt Instrument [Line Items]
Increase in net assets	$ 58,300,000	$ 58,300,000
Elanco | Lilly
Debt Instrument [Line Items]
Ownership percentage of outstanding Common stock		80.20%
Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount				$ 2,000,000,000
Credit Facility | Senior Unsecured Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	750,000,000		$ 750,000,000
Credit Facility | Senior Unsecured Term Credit Facility
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 500,000,000		$ 500,000,000

Implementation of New Financi_3

Implementation of New Financial Accounting Pronouncements (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net parent company investment	$ 0	$ (8,036.9)
Accounting Standards Update 2016-16
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net parent company investment	$ 0.3

Revenue - Narrative (Details)

Revenue - Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Concentration Risk [Line Items]
Payment terms			Payment terms differ by jurisdiction and customer, but payment terms in most of our major jurisdictions typically range from 30 to 100 days from date of shipment.
Rebate period			6 months
Geographic Concentration Risk | Contract With Customer Liability | United States
Concentration Risk [Line Items]
Concentration risk			70.00%	71.00%
Geographic Concentration Risk | Contract With Customer Liability | Next Largest Country
Concentration Risk [Line Items]
Concentration risk			8.00%	6.00%
Product Return Concentration Risk | Net Revenue
Concentration Risk [Line Items]
Concentration risk	1.00%	1.00%	1.00%	1.00%

Revenue - Summary of Activity i

Revenue - Summary of Activity in Sales Rebates and Discounts Liability (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Change In Contract With Customer, Liability [Roll Forward]
Beginning balance	$ 99.1	$ 118.7	$ 114.8	$ 116.1
Reduction of revenue	53.5	48.6	154.2	184.9
Payments	(49.1)	(49.6)	(165.5)	(183.3)
Ending balance	$ 103.5	$ 117.7	$ 103.5	$ 117.7

Revenue - Disaggregation of Rev

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of Revenue [Line Items]
Revenue	$ 761.1	$ 697.1	$ 2,267.5	$ 2,134.7
Companion Animal Disease Prevention
Disaggregation of Revenue [Line Items]
Revenue	188.6	140.4	603.9	519.7
Companion Animal Therapeutics
Disaggregation of Revenue [Line Items]
Revenue	80.5	63.5	211.1	181.8
Companion Animal Other
Disaggregation of Revenue [Line Items]
Revenue	27.7	48.3	69.3	119.9
Food Animal Future Protein & Health
Disaggregation of Revenue [Line Items]
Revenue	162.8	164.5	502.1	456
Food Animal Ruminants & Swine
Disaggregation of Revenue [Line Items]
Revenue	$ 301.5	$ 280.4	$ 881.1	$ 857.3

Asset Impairment, Restructuri_3

Asset Impairment, Restructuring and Other Special Charges - Total Charges Related to Asset Impairment, Restructuring and Other Special Charges (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Cash expense:
Severance	$ (0.2)	$ 5.8	$ (2.8)	$ 62.1
Integration and other	4.9	6.4	10.5	75.1
Exit costs	1.5	11.5	11.2	24.3
Total cash expense	6.2	23.7	18.9	161.5
Non-cash expense
Asset impairment	6.2	0	63.9	43.8
Total non-cash expense	6.2	0	63.9	43.8
Gain on sale of fixed assets	0	0	0	(16)
Total cash expense	$ 12.4	$ 23.7	$ 82.8	$ 189.3

Asset Impairment, Restructuri_4

Asset Impairment, Restructuring and Other Special Charges - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018USD ($)
Restructuring and Related Activities [Abstract]
Intangible asset impairments	$ 19.9
Fixed asset impairments	$ 44

Asset Impairment, Restructuri_5

Asset Impairment, Restructuring and Other Special Charges - Summary of Activity in Reserves (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Restructuring Reserve [Roll Forward]
Balance at beginning of period	$ 78	$ 38.1
Charges	8.4	86.4
Separation adjustment	(5.9)
Cash paid	(33.5)	(69.4)
Balance at end of period	47	55.1
Exit costs
Restructuring Reserve [Roll Forward]
Balance at beginning of period	34.9	11.5
Charges	11.2	24.3
Separation adjustment	(5.9)
Cash paid	(10.9)	(7.6)
Balance at end of period	29.3	28.2
Severance
Restructuring Reserve [Roll Forward]
Balance at beginning of period	43.1	26.6
Charges	(2.8)	62.1
Separation adjustment	0
Cash paid	(22.6)	(61.8)
Balance at end of period	$ 17.7	$ 26.9

Inventories - Schedule of Inven

Inventories - Schedule of Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Finished products	$ 408.1	$ 452
Work in process	572.3	580
Raw materials and supplies	71.4	70.4
Total (approximates replacement cost)	1,051.8	1,102.4
Decrease to LIFO cost	(43.1)	(40.1)
Inventories	$ 1,008.7	$ 1,062.3

Inventories - Narrative (Detail

Inventories - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018USD ($)
Inventory Disclosure [Abstract]
Inventory write-offs	$ 38.6

Debt - Schedule of Long-term De

Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions	Sep. 30, 2018	Aug. 28, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ (21.7)
Total long-term debt	2,478.5
Less current portion of long-term debt	0
Total long-term debt, excluding current portion	2,478.5		$ 0
Credit Facility | Term credit facility
Debt Instrument [Line Items]
Long-term debt, gross	$ 500
Senior Notes | 3.912% Senior Notes due 2021
Debt Instrument [Line Items]
Interest rate	3.912%	3.912%
Long-term debt, gross	$ 500
Senior Notes | 4.272% Senior Notes due 2023
Debt Instrument [Line Items]
Interest rate	4.272%	4.272%
Long-term debt, gross	$ 750
Senior Notes | 4.900% Senior Notes due 2028
Debt Instrument [Line Items]
Interest rate	4.90%	4.90%
Long-term debt, gross	$ 750
Other obligations
Debt Instrument [Line Items]
Long-term debt, gross	$ 0.2

Debt - Narrative (Details)

Debt - Narrative (Details) - USD ($)	Sep. 05, 2018	Sep. 30, 2018	Sep. 24, 2018	Aug. 28, 2018	Dec. 31, 2017
Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount				$ 2,000,000,000
Senior Notes | 3.912% Senior Notes due 2021
Debt Instrument [Line Items]
Borrowings outstanding		$ 500,000,000
Aggregate principal amount				$ 500,000,000
Interest rate		3.912%		3.912%
Senior Notes | 4.272% Senior Notes due 2023
Debt Instrument [Line Items]
Borrowings outstanding		$ 750,000,000
Aggregate principal amount				$ 750,000,000
Interest rate		4.272%		4.272%
Senior Notes | 4.900% Senior Notes due 2028
Debt Instrument [Line Items]
Borrowings outstanding		$ 750,000,000
Aggregate principal amount				$ 750,000,000
Interest rate		4.90%		4.90%
Revolving credit facility | Credit Facility
Debt Instrument [Line Items]
Credit facility term	5 years
Credit facility, maximum borrowing capacity	$ 750,000,000		$ 750,000,000
Borrowings outstanding					$ 0
Term credit facility | Credit Facility
Debt Instrument [Line Items]
Credit facility term	3 years
Credit facility, maximum borrowing capacity	$ 500,000,000		$ 500,000,000
Borrowings outstanding		$ 500,000,000
Interest rate at period end		3.50%

Financial Instruments and Fai_3

Financial Instruments and Fair Value - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Cost and equity method investments		$ 14.9	$ 12.3
Amortized Cost
Business Acquisition, Contingent Consideration [Line Items]
Long term debt		$ 2,500
Aratana Therapeutics, Inc.
Business Acquisition, Contingent Consideration [Line Items]
Increase in fair value of contingent consideration liabilities	$ 8.5

Financial Instruments and Fai_4

Financial Instruments and Fair Value - Summary of Fair Value Information (Details) - Recurring - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Other current liabilities- contingent consideration | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	$ 0	$ 0
Other current liabilities- contingent consideration | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	0	0
Other current liabilities- contingent consideration | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	1.3	17.4
Other current liabilities- contingent consideration | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	1.3	17.4
Other current liabilities- contingent consideration | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	1.3	17.4
Other noncurrent liabilities- contingent consideration | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	0	0
Other noncurrent liabilities- contingent consideration | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	0	0
Other noncurrent liabilities- contingent consideration | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	45.2	41.4
Other noncurrent liabilities- contingent consideration | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	45.2	41.4
Other noncurrent liabilities- contingent consideration | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liabilities	$ 45.2	$ 41.4

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	Sep. 24, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Income tax expense (benefit)		$ 18.6	$ 11.6	$ 46.2	$ 72
Income (loss) before income taxes		$ 78.8	$ (9.1)	$ 116.3	$ (77.2)
Effective tax rate		23.60%		39.70%
Decrease in tax liabilities	$ 31.2
International
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards that expire		$ 190		$ 190
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards that expire		$ 6.2		$ 6.2

Contingencies (Details)

Contingencies (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Liabilities related to litigation	$ 0	$ 0

Geographic Information - Narrat

Geographic Information - Narrative (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018USD ($)	Sep. 30, 2017	Sep. 30, 2018USD ($)segment	Sep. 30, 2017	Dec. 31, 2017USD ($)
Segment Reporting [Abstract]
Number of operating segments | segment			1
Concentration Risk [Line Items]
Accounts receivable	$ 606.1		$ 606.1		$ 567.4
Product Sales
Concentration Risk [Line Items]
Accounts receivable	$ 79.5		$ 79.5		$ 88
Customer Concentration Risk | Revenue | Single Customer
Concentration Risk [Line Items]
Concentration risk	11.10%	9.40%	11.50%	11.90%

Geographic Information - Revenu

Geographic Information - Revenue by Selected Geographic Area Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue—to unaffiliated customers	$ 761.1	$ 697.1	$ 2,267.5	$ 2,134.7
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue—to unaffiliated customers	382.2	321.4	1,108.6	1,054.6
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue—to unaffiliated customers	$ 378.9	$ 375.7	$ 1,158.9	$ 1,080.1

Geographic Information - Long-l

Geographic Information - Long-lived Assets by Selected Geographic Area Information (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 975.9	$ 999.3
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	589.5	604.7
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	195.9	204.4
Other foreign countries
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 190.5	$ 190.2

Earnings Per Share (Details)

Earnings Per Share (Details)	Sep. 24, 2018shares	Sep. 19, 2018	Sep. 30, 2018shares	Sep. 30, 2017shares	Sep. 30, 2018shares	Sep. 30, 2017shares	Sep. 18, 2018shares
Subsidiary, Sale of Stock [Line Items]
Number of shares outstanding			365,625,000	365,265,000	365,265,000	365,265,000
Stock split ratio		2,932,900
IPO, excluding Underwriters' Option
Subsidiary, Sale of Stock [Line Items]
Number of shares issued	62,900,000
Underwriters' Option
Subsidiary, Sale of Stock [Line Items]
Number of shares issued	9,435,000
Elanco | Lilly
Subsidiary, Sale of Stock [Line Items]
Common shares outstanding			293,290,000		293,290,000		100

Related Party Agreements and _3

Related Party Agreements and Transactions - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Net transfers (to)/from Lilly	$ (116,800,000)	$ 38,100,000	$ (226,300,000)	$ 862,700,000
Acquisition amount			0	882,100,000
Boehringer Ingelheim Vetmedica, Inc.
Related Party Transaction [Line Items]
Acquisition amount				882,100,000
Lilly
Related Party Transaction [Line Items]
Stock-based compensation	6,900,000	6,200,000	20,200,000	18,700,000
Benefit of defined benefit pension plan	1,600,000		300,000
Costs of defined benefit pension plan		1,700,000		5,100,000
Lilly | MSA
Related Party Transaction [Line Items]
Total net assets	84,500,000		84,500,000
Restricted cash retained	275,000,000		275,000,000
Local purchases minimum	275,000,000		275,000,000
Cash to be distributed in excess of	300,000,000		300,000,000
Additional restricted cash	359,900,000		$ 359,900,000
Lilly | TSA
Related Party Transaction [Line Items]
Mark-up rate			7.00%
Lilly | Manufacturing Support
Related Party Transaction [Line Items]
Revenue from related parties	1,300,000	1,500,000	$ 3,700,000	4,500,000
Director | Commercial Operations
Related Party Transaction [Line Items]
Revenue from related parties	4,200,000	6,600,000	16,400,000	17,800,000
Accounts receivable	1,900,000		1,900,000		$ 2,000,000
Purchases of goods and services	1,400,000	$ 1,100,000	3,300,000	$ 5,300,000
Accounts payable	400,000		400,000		$ 300,000
IPO
Related Party Transaction [Line Items]
Amount transferred to parent	$ 4,200,000,000		$ 4,200,000,000

Related Party Agreements and _4

Related Party Agreements and Transactions - Allocations of Services (Details) - Lilly - Transitional Services Agreement - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Related Party Transaction [Line Items]
Allocation of services	$ 34.1	$ 36.1	$ 105.2	$ 107.8
Cost of sales
Related Party Transaction [Line Items]
Allocation of services	7	7.7	21.8	23
Research and development
Related Party Transaction [Line Items]
Allocation of services	0.7	0.7	2.2	2.1
Marketing, selling and administrative
Related Party Transaction [Line Items]
Allocation of services	$ 26.4	$ 27.7	$ 81.2	$ 82.7