Elanco Animal Health (ELAN) 10-Q 13 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 09, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Registrant Name	Elanco Animal Health Inc.
Entity Central Index Key	0001739104
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		372,996,341

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated and Combined Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Revenue	$ 781.6	$ 770.2	$ 1,512.7	$ 1,506.4
Costs, expenses and other:
Cost of sales	356	431.5	699.8	791.5
Research and development	68.8	61.4	132.9	126.6
Marketing, selling and administrative	200.9	191.1	382	371.1
Amortization of intangible assets	49.3	49.4	98.3	98.6
Asset impairment, restructuring and other special charges (Note 6)	31.8	68	56.7	70.4
Interest expense, net of capitalized interest	20.7	0	41.5	0
Other–net, expense	3.9	8.8	6.5	10.7
Costs, expenses and other	731.4	810.2	1,417.7	1,468.9
Income (loss) before income taxes	50.2	(40)	95	37.5
Income tax expense	14.3	22.8	27.6	27.6
Net income (loss)	$ 35.9	$ (62.8)	$ 67.4	$ 9.9
Earnings (loss) per share:
Basic (usd per share)	$ 0.10	$ (0.21)	$ 0.18	$ 0.03
Diluted (usd per share)	$ 0.10	$ (0.21)	$ 0.18	$ 0.03
Weighted average shares outstanding:
Basic (in shares)	365.7	293.3	365.7	293.3
Diluted (in shares)	367	293.3	366.5	293.3

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated and Combined Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 35.9	$ (62.8)	$ 67.4	$ 9.9
Other comprehensive income (loss):
Foreign currency translation	35.4	(224.9)	5.2	(105.7)
Defined benefit pension and retiree health benefit plans, net of taxes	0.2	2	2.2	1.4
Other comprehensive income (loss), net of tax	35.6	(222.9)	7.4	(104.3)
Comprehensive income (loss)	$ 71.5	$ (285.7)	$ 74.8	$ (94.4)

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Current Assets
Cash and cash equivalents	$ 385.1	$ 474.8
Accounts receivable, net of allowances of $5.7 (2019) and $8.4 (2018)	757.2	651.8
Other receivables	74.3	57.6
Inventories (Note 7)	1,053.1	1,004.1
Prepaid expenses and other	102.3	113.9
Restricted cash (Note 15)	11.5	202.7
Total current assets	2,383.5	2,504.9
Noncurrent Assets
Goodwill	2,959.6	2,958
Other intangibles, net	2,352.8	2,453
Other noncurrent assets	229.9	118.4
Property and equipment, net of accumulated depreciation of $921.2 (2019) and $878.6 (2018)	931.1	922.4
Total assets	8,856.9	8,956.7
Current Liabilities
Accounts payable	242.9	205.2
Employee compensation	67.3	98.9
Sales rebates and discounts	176	169.9
Current portion of long-term debt (Note 8)	27.1	29
Other current liabilities	205.4	199
Payable to Lilly (Note 15)	58.8	268.7
Total current liabilities	777.5	970.7
Noncurrent Liabilities
Long-term debt (Note 8)	2,382	2,443.3
Accrued retirement benefits	108.4	109.1
Deferred taxes (Note 11)	147.8	114.6
Other noncurrent liabilities	175.7	121.5
Total liabilities	3,591.4	3,759.2
Commitments and Contingencies (Note 12)	0	0
Equity
Common stock, no par value, 5,000,000,000 shares authorized, 365,707,233 and 365,643,911 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively	0	0
Additional paid-in capital	5,396.5	5,403.3
Retained earnings	83.8	16.4
Accumulated other comprehensive loss	(214.8)	(222.2)
Total equity	5,265.5	5,197.5
Total liabilities and equity	$ 8,856.9	$ 8,956.7

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Receivables, Net, Current [Abstract]
Accounts receivable, allowances	$ 5.7	$ 8.4
Property and equipment, accumulated depreciation	$ 921.2	$ 878.6
Common stock, shares authorized	5,000,000,000	5,000,000,000
Common stock, shares issued	365,707,233	365,643,911
Common stock, shares outstanding	365,707,233	365,643,911

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	Retained Earnings	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, 2017			293.3
Balance at beginning of period at Dec. 31, 2017		$ 7,780.3	$ 0	$ 0	$ 8,036.9	$ 0	$ (256.6)	$ (227.2)	$ (29.4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		72.7			72.7
Other comprehensive income (loss), net of tax		118.6					118.6	119.2	(0.6)
Transfers (to)/from Lilly, net	[1]	(69.2)			(69.2)
Balance at end of period (in shares) at Mar. 31, 2018			293.3
Balance at end of period at Mar. 31, 2018		7,902.1	$ 0	0	8,040.1	0	(138)	(108)	(30)
Balance at beginning of period (in shares) at Dec. 31, 2017			293.3
Balance at beginning of period at Dec. 31, 2017		7,780.3	$ 0	0	8,036.9	0	(256.6)	(227.2)	(29.4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		9.9
Other comprehensive income (loss), net of tax		(104.3)
Transfers (to)/from Lilly, net					(109.5)
Balance at end of period (in shares) at Jun. 30, 2018			293.3
Balance at end of period at Jun. 30, 2018		7,576.1	$ 0	0	7,937	0	(360.9)	(332.9)	(28)
Balance at beginning of period (in shares) at Mar. 31, 2018			293.3
Balance at beginning of period at Mar. 31, 2018		7,902.1	$ 0	0	8,040.1	0	(138)	(108)	(30)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		(62.8)			(62.8)
Other comprehensive income (loss), net of tax		(222.9)					(222.9)	(224.9)	2
Transfers (to)/from Lilly, net	[1]	(40.3)			(40.3)
Balance at end of period (in shares) at Jun. 30, 2018			293.3
Balance at end of period at Jun. 30, 2018		7,576.1	$ 0	0	7,937	0	(360.9)	(332.9)	(28)
Balance at beginning of period (in shares) at Dec. 31, 2018			365.6
Balance at beginning of period at Dec. 31, 2018		5,197.5	$ 0	5,403.3	0	16.4	(222.2)	(218.2)	(4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		31.5				31.5
Other comprehensive income (loss), net of tax		(28.2)					(28.2)	(30.2)	2
Separation activities	[1]	(7)		(7)
Stock compensation		2.4		2.4
Issuance of stock under employee stock plans, net (in shares)			0.1
Balance at end of period (in shares) at Mar. 31, 2019			365.7
Balance at end of period at Mar. 31, 2019		5,196.2	$ 0	5,398.7	0	47.9	(250.4)	(248.4)	(2)
Balance at beginning of period (in shares) at Dec. 31, 2018			365.6
Balance at beginning of period at Dec. 31, 2018		5,197.5	$ 0	5,403.3	0	16.4	(222.2)	(218.2)	(4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		67.4
Other comprehensive income (loss), net of tax		7.4
Separation activities	[1]			25.4
Balance at end of period (in shares) at Jun. 30, 2019			365.7
Balance at end of period at Jun. 30, 2019		5,265.5	$ 0	5,396.5	0	83.8	(214.8)	(213)	(1.8)
Balance at beginning of period (in shares) at Mar. 31, 2019			365.7
Balance at beginning of period at Mar. 31, 2019		5,196.2	$ 0	5,398.7	0	47.9	(250.4)	(248.4)	(2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		35.9				35.9
Other comprehensive income (loss), net of tax		35.6					35.6	35.4	0.2
Separation activities	[1]	(18.4)		(18.4)
Stock compensation		14.3		14.3
Other		1.9		1.9
Balance at end of period (in shares) at Jun. 30, 2019			365.7
Balance at end of period at Jun. 30, 2019		$ 5,265.5	$ 0	$ 5,396.5	$ 0	$ 83.8	$ (214.8)	$ (213)	$ (1.8)
[1]	See Note 15: Related Party Agreements and Transactions for further discussion.

Unaudited Condensed Consolida_4

Unaudited Condensed Consolidated and Combined Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash Flows from Operating Activities
Net income (loss)	$ 67.4	$ 9.9
Adjustments to Reconcile Net Income to Cash Flows from Operating Activities:
Depreciation and amortization	152.4	149.6
Change in deferred income taxes	40.3	10.8
Stock-based compensation expense	21.9	13.3
Asset impairment charges	4	97.9
Changes in operating assets and liabilities	(205.2)	(98.3)
Other non-cash operating activities, net	(22.6)	0.7
Net Cash Provided by Operating Activities	58.2	183.9
Cash Flows from Investing Activities
Net purchases of property and equipment	(51.8)	(56.5)
Other investing activities, net	(25.7)	(1)
Net Cash Used for Investing Activities	(77.5)	(57.5)
Cash Flows from Financing Activities
Repayments of borrowings (Note 8)	(65)	0
Consideration paid to Lilly in connection with the Separation (Note 1)	(191.2)	0
Other net financing transactions with Lilly	5	(122.8)
Other financing activities, net	1.4	(0.9)
Net Cash Used for Financing Activities	(249.8)	(123.7)
Effect of exchange rate changes on cash and cash equivalents	(11.8)	(5.1)
Net decrease in cash, cash equivalents and restricted cash	(280.9)	(2.4)
Cash, cash equivalents and restricted cash at beginning of period	677.5	323.4
Cash, cash equivalents and restricted cash at end of period	396.6	321
Cash, cash equivalents and restricted cash at end of period	$ 677.5	$ 323.4

Nature of Business and Organiza

Nature of Business and Organization	6 Months Ended
	Jun. 30, 2019
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 represented 19.8% of the outstanding shares, at $24 per share (IPO) resulting in 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: Debt). These transactions are collectively referred to herein as the Separation. On February 8, 2019, Lilly announced an exchange offer whereby Lilly shareholders could exchange all or a portion of Lilly common stock for shares of Elanco common stock owned by Lilly. The disposition of Elanco shares was completed on March 11, 2019 and resulted in the full separation of Elanco and disposal of Lilly's entire ownership and voting interest in Elanco.

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2019
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. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our consolidated and combined financial statements and accompanying notes for the year ended December 31, 2018 included in our Annual Report on Form 10-K filed with the SEC on February 20, 2019. For the periods after Separation, the financial statements are prepared on a consolidated basis and reflect the results of operations, comprehensive income, financial position, equity and cash flows resulting from our operations as an independent company. 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 consolidated and 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 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 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 combined statements of cash flows as a financing activity and in the condensed consolidated and combined statement of equity as net parent company investment. Prior to Separation, these 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, prior to IPO. 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. After the Separation, a Transitional Services Agreement (TSA) between Lilly and Elanco went into effect. Under the terms of the TSA, we will be able to use these Lilly services for a fixed term established on a service-by-service basis. We are paying Lilly mutually agreed upon fees for the Lilly services provided under the TSA. Our consolidated and combined financial statements reflect the charges for Lilly services after the IPO. See Note 15: Related Party Agreements and Transactions for additional details. The income tax amounts in the 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. Prior to full separation, certain of these income tax returns were filed on a consolidated or combined basis with Eli Lilly and Company and/or its subsidiaries. Prior to Separation, Lilly maintained various benefit and combined stock-based compensation plans at a corporate level and other benefit plans at a country level. Our employees participated 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 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 transferred to Elanco. Upon Lilly's full divestiture of Elanco in March 2019, all Lilly share-based awards held by our employees were converted into awards that will be settled in Elanco shares. Prior to Separation, the equity balance in the combined financial statements represents the excess of total assets over liabilities, including intercompany balances between Elanco and Lilly (net parent company investment) and accumulated other comprehensive income/(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 15: Related Party Agreements and Transactions for further information.

Impact of Separation

Impact of Separation	6 Months Ended
	Jun. 30, 2019
Equity [Abstract]
Impact of Separation	Note 3. 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. In connection with the Separation, we entered into various agreements with Lilly, including a master separation agreement, a tax matters agreement and the TSA. We will also continue to have certain ongoing relationships with Lilly as described in Note 15: Related Party Agreements and Transactions.

Implementation of New Financial

Implementation of New Financial Accounting Pronouncements	6 Months Ended
	Jun. 30, 2019
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 an accounting standard that was effective January 1, 2019 and was adopted on that date: Standard Description 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 previous GAAP, on the balance sheet and requiring additional disclosures about leasing arrangements. We adopted the standard on January 1, 2019 using the modified retrospective approach, applied at the beginning of the period of adoption, and we elected the package of transition practical expedients. Upon adoption of the standard, we recorded $84.9 million of right-of-use assets and $85.3 million of operating lease liabilities on our consolidated balance sheet. Adoption of this standard did not have a material impact on our consolidated statement of operations for the six months ended June 30, 2019. See Note 10: Leases for further information. The following table provides a brief description of the accounting standards that have 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 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments This standard modifies the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. This standard is effective January 1, 2020, with early adoption permitted. We intend to adopt this standard on that date. We are currently evaluating the effect of this standard on our financial statements. Accounting Standards Update 2018-15, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract This guidance aligns the requirements for capitalizing implementation costs incurred in a cloud-based hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard is effective January 1, 2020, with early adoption permitted. We intend to adopt this standard on that date. We are currently evaluating the effect of this standard on our financial statements.

Revenue

Revenue	6 Months Ended
	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
Revenue	Note 5. Revenue 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. 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 the 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 June 30, 2019 and 2018 , the liability for sales rebates and discounts in the U.S. represents approximately 75% and 70% , respectively, of our total liability with the next largest country representing approximately 5% 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Beginning balance $ 120.0 $ 91.1 $ 118.5 $ 114.8 Reduction of revenue 80.6 56.2 146.3 100.7 Payments (68.5 ) (48.2 ) (132.7 ) (116.4 ) Ending balance $ 132.1 $ 99.1 $ 132.1 $ 99.1 Adjustments to revenue recognized as a result of changes in estimates for the judgments described above during the three and six months ended June 30, 2019 and 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 were less than 0.1% and approximately 0.2% of net revenue for the three and six months ended June 30, 2019 and 0.6% and 0.4% for the three and six months ended June 30, 2018 , respectively, 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Companion Animal Disease Prevention $ 223.4 $ 214.0 $ 409.3 $ 415.3 Companion Animal Therapeutics 83.4 68.3 164.8 130.6 Food Animal Future Protein & Health 175.8 172.6 343.0 339.3 Food Animal Ruminants & Swine 271.5 297.1 545.6 579.6 Strategic Exits (1) 27.5 18.2 50.0 41.6 Revenue $ 781.6 $ 770.2 $ 1,512.7 $ 1,506.4 (1) Represents revenue from business activities we have either exited or made a strategic decision to exit.

Asset Impairment, Restructuring

Asset Impairment, Restructuring and Other Special Charges	6 Months Ended
	Jun. 30, 2019
Restructuring and Related Activities [Abstract]
Asset Impairment, Restructuring and Other Special Charges	Note 6. 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cash expense (income): Severance and other costs $ (1.3 ) $ (2.7 ) $ (0.8 ) $ (2.6 ) Integration and acquisition costs 33.1 2.8 53.5 5.6 Facility exit costs — 10.2 — 9.7 Total cash expense 31.8 10.3 52.7 12.7 Non-cash expense: Asset impairment — 57.7 4.0 57.7 Total non-cash expense — 57.7 4.0 57.7 Total expense $ 31.8 $ 68.0 $ 56.7 $ 70.4 Restructuring We historically participated in Lilly's cost-reduction initiatives, which resulted in restructuring charges in the period prior to our IPO. The restructuring costs include severance and other costs incurred as a result of actions taken to reduce our cost structure. Integration and acquisition costs Integration and acquisition costs primarily represent charges and costs related to our integration efforts as a result of our acquired businesses, external costs directly related to acquiring businesses, including expenses for banking, legal, accounting, and other similar services, and costs to stand our organization up to be an independent company. Facility exit costs Facility exit costs primarily represent contract termination costs and reserves for costs related to facilities which we have exited. Asset impairment Asset impairment recognized during the six months ended June 30, 2019 resulted from the adjustment to fair value of intangible assets that were subject to product rationalization. The following table summarizes the activity in our reserves established in connection with these restructuring activities: Facility exit costs Severance Total Balance at December 31, 2017 $ 34.9 $ 43.1 $ 78.0 Charges 21.2 — 21.2 Reserve adjustments (11.5 ) (2.6 ) (14.1 ) Cash paid (9.9 ) (28.4 ) (38.3 ) Balance at June 30, 2018 $ 34.7 $ 12.1 $ 46.8 Balance at December 31, 2018 $ 9.3 $ 35.1 $ 44.4 Charges — 2.5 2.5 Reserve adjustments — (3.3 ) (3.3 ) Cash paid (1.7 ) (13.8 ) (15.5 ) Balance at June 30, 2019 $ 7.6 $ 20.5 $ 28.1 Substantially all of the reserves are expected to be utilized in the next twelve months. We believe that the reserves are adequate.

Inventories

Inventories	6 Months Ended
	Jun. 30, 2019
Inventory Disclosure [Abstract]
Inventories	Note 7. Inventories We state all inventories at the lower of cost or net realizable value. 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: June 30, 2019 December 31, 2018 Finished products $ 412.4 $ 400.7 Work in process 610.2 570.4 Raw materials and supplies 72.7 80.4 Total (approximates replacement cost) 1,095.3 1,051.5 Decrease to LIFO cost (42.2 ) (47.4 ) Inventories $ 1,053.1 $ 1,004.1

Debt

Debt	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Debt	Note 8. Debt Long-term debt consisted of the following: June 30, 2019 December 31, 2018 Term credit facility $ 427.5 $ 492.5 3.912% Senior Notes due 2021 500.0 500.0 4.272% Senior Notes due 2023 750.0 750.0 4.900% Senior Notes due 2028 750.0 750.0 Other obligations 0.3 0.5 Unamortized debt issuance costs (18.7 ) (20.7 ) Total debt 2,409.1 2,472.3 Less current portion of long-term debt 27.1 29.0 Total long-term debt $ 2,382.0 $ 2,443.3 On June 26, 2019, we completed an exchange offer pursuant to which privately issued Senior Notes were exchanged for publicly registered Senior Notes having substantially identical terms.

Financial Instruments and Fair

Financial Instruments and Fair Value	6 Months Ended
	Jun. 30, 2019
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 in 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 June 30, 2019 and December 31, 2018 , we had $16.3 million and $15.3 million , respectively, of equity method investments included in other noncurrent assets in our condensed consolidated balance sheet. The following table summarizes the fair value information at June 30, 2019 and December 31, 2018 for contingent consideration liabilities, the net investment hedge liability and long-term debt 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 June 30, 2019 Other current liabilities - contingent consideration $ (9.1 ) $ — $ — $ (9.1 ) $ (9.1 ) Other noncurrent liabilities - contingent consideration (68.1 ) — — (68.1 ) (68.1 ) Other noncurrent assets/(liabilities) - cross currency interest rate contracts designated as net investment hedges (0.5 ) — (0.5 ) — (0.5 ) Long-term debt - senior notes (2,000.0 ) — (2,137.0 ) — (2,137.0 ) December 31, 2018 Other current liabilities - contingent consideration $ (5.1 ) $ — $ — $ (5.1 ) $ (5.1 ) Other noncurrent liabilities - contingent consideration (69.0 ) — — (69.0 ) (69.0 ) Other noncurrent assets/(liabilities) - cross currency interest rate contracts designated as net investment hedges (7.4 ) — (7.4 ) — (7.4 ) Long-term debt - senior notes (2,000.0 ) — (2,005.0 ) — (2,005.0 ) We determine our Level 2 fair value measurements based on a market approach using quoted market values, significant other observable inputs for identical or comparable assets or liabilities, or discounted cash flow analysis. 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 as of June 30, 2019 was 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. These liabilities were settled upon the closing of our acquisition of Aratana Therapeutics, Inc. on July 18, 2019. See Note 16: Subsequent Events for further discussion. The Senior Notes are 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. We have a term credit facility of $427.5 million and $492.5 million , respectively, recorded at amortized cost in our condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018 . We consider the carrying value of the term credit facility to be representative of its fair value as of June 30, 2019 and December 31, 2018 . The fair value of this term credit facility is estimated based on quoted market prices of similar liabilities and is classified as Level 2. In October 2018, we entered into a cross-currency fixed interest rate swap, 5 -year, 750 million Swiss franc (CHF), which is designated as a net investment hedge (NIH) against CHF denominated assets for which the fair value was estimated based on quoted market values of similar hedges and is classified as Level 2. The NIH is expected to generate approximately $25 million in cash and an offset to interest expense on an annual basis. During the three and six months ended June 30, 2019 , our interest expense was offset by $6.1 million and $12.2 million , respectively, as a result of the NIH. Over the life of the derivative, gains or losses due to spot rate fluctuations are recorded in cumulative translation adjustment. During the three months ended June 30, 2019 , we recorded a $6.8 million loss, net of tax, on the NIH, which is included in the change in the cumulative translation adjustment in other comprehensive income. There is a potential for significant 2023 settlement exposure as the U.S. dollar fluctuates against the Swiss franc. The risk management objective is to manage foreign currency risk relating to net investments in certain CHF denominated assets. Changes in fair value of the derivative instruments are recognized in a component of Accumulated Other Comprehensive Loss to offset the changes in the values of the net investments being hedged.

Leases

Leases	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Leases	Note 10. Leases We determine if an arrangement is a lease at inception. We have operating leases for corporate offices, research and development facilities, vehicles, and equipment. Our leases have remaining lease terms of one to 10 years , some of which have options to extend or terminate the leases. Finance leases are included in property and equipment, current portion of long-term debt, and long-term debt in our condensed consolidated balance sheets. Finance leases are not material to our condensed consolidated statements of operations, condensed consolidated balance sheets, or condensed consolidated statements of cash flows. Beginning January 1, 2019, operating leases are included in noncurrent assets, other current liabilities, and other noncurrent liabilities in our consolidated balance sheets. Right-of-use assets included in noncurrent assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate if it is readily determinable. The right-of-use asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain and there is a significant economic incentive to exercise that option. Operating lease expense for right-of-use assets is recognized on a straight-line basis over the lease term. Variable lease payments, which represent lease payments that vary due to changes in facts or circumstances occurring after the commencement date other than the passage of time, are expensed in the period in which the obligation for these payments was incurred. We elected not to apply the recognition requirements of ASC 842, Leases , to short-term leases, which are deemed to be leases with a lease term of 12 months or less. Instead, we recognized lease payments in the condensed consolidated statements of operations on a straight-line basis over the lease term and variable payments in the period in which the obligation for these payments was incurred. We elected this policy for all classes of underlying assets. We elected not to apply the practical expedient related to the separation of lease and non-lease components or the practical expedient which allows entities to use hindsight when determining lease term. The impact of operating leases to our condensed consolidated financial statements was as follows: Three months ended June 30, 2019 Six months ended June 30, 2019 Lease cost Operating lease cost $ 6.6 $ 12.3 Short-term lease cost 0.2 0.4 Variable lease cost 0.6 1.1 Total lease cost $ 7.4 $ 13.8 Other information Operating cash outflows from operating leases $ 11.8 Right-of-use assets obtained in exchange for new operating lease liabilities — Weighted-average remaining lease term - operating leases 5 years Weighted-average discount rate - operating leases 4.2 % Supplemental balance sheet information related to our operating leases is as follows: Balance Sheet Classification June 30, 2019 Right-of-use assets Other noncurrent assets $ 81.3 Current operating lease liabilities Other current liabilities 23.3 Non-current operating lease liabilities Other noncurrent liabilities 58.3 As of June 30, 2019 , the annual minimum lease payments of our operating lease liabilities were as follows: Year 1 $ 24.8 Year 2 19.6 Year 3 11.9 Year 4 9.2 Year 5 7.4 After Year 5 15.1 Total lease payments 88.0 Less imputed interest (6.4 ) Total $ 81.6

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Income Taxes	Note 11. Income Taxes Provision for Taxes on Income Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Provision for Taxes on Income $ 14.3 $ 22.8 $ 27.6 $ 27.6 Effective Tax Rate 28.5 % (57.0 )% 29.0 % 73.6 % During the periods presented in the condensed consolidated and combined financial statements for the three and six months ended June 30, 2018, 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. Our income taxes for the three- and six-month periods ended June 30, 2019 reflect the results on a stand-alone basis independent of Lilly, except for the period during which we were included in a combined tax return until full separation. In the jurisdictions in which we were included in a combined tax return, our income taxes were determined based on the tax matters agreement between us and Lilly. 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. In 2017, the U.S. enacted the Tax Cuts and Jobs Act (2017 Tax Act), which significantly revised U.S. tax law. Guidance related to the 2017 Tax Act, including Notices, Proposed Regulations, and Final Regulations, has been issued, and we expect additional guidance will be issued in 2019. This additional guidance could materially impact our assumptions and estimates used to record our U.S. federal and state income tax expense resulting from the 2017 Tax Act. We are included in Lilly's U.S. tax examinations by the Internal Revenue Service through the full separation date of March 11, 2019. Pursuant to the tax matters agreement we executed with Lilly in connection with the IPO, the potential liabilities or potential refunds attributable to pre-IPO periods in which Elanco was included in a Lilly consolidated or combined tax return remain with Lilly. Certain matters of Lilly’s U.S. examination of tax years 2013 - 2015 effectively settled during the three months ended June 30, 2019 and the resulting adjustments will not require any cash tax payments by Elanco. These adjustments are recorded in Separation activities within shareholders' equity. See Note 15: Related Party Agreements and Transactions for further information. As a result of Lilly's U.S. examination, there was a reduction of state net operating loss carryovers of $3.6 million gross, or $2.9 million , net of federal benefit. Additionally, associated valuation allowances were reduced by the same amount. The examination of tax year 2015 remains ongoing, and we believe it is reasonably possible that this examination could reach conclusion within the next twelve months. For the three and six months ended June 30, 2019 , we incurred $14.3 million and $27.6 million , respectively, of income tax expense. For the three and six months ended June 30, 2019 , our effective tax rate of 28.5% and 29.0% , respectively, differs from the statutory income tax rate primarily due to a one-time foreign exchange gain on the transfer of assets upon separation in addition to the impact of state income taxes. For the three and six months ended June 30, 2018 , we incurred $22.8 million and $27.6 million , respectively of income tax expense. For the three and six months ended June 30, 2018 , our effective tax rate differs from the statutory income tax rate primarily due to no benefits being recorded for losses incurred in the U.S. for asset impairments and contractual commitment charges associated with the suspension of commercial activities of Imrestor ® due to full valuation allowances recorded in the U.S.

Contingencies

Contingencies	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Contingencies	Note 12. Contingencies We are party to various legal actions in the normal course of business. In determining whether a pending matter is significant for financial reporting and disclosure purposes, we consider both quantitative and qualitative factors in order to assess materiality. We record a liability for claims to the extent that we can formulate a reasonable estimate of their costs and there is a reasonable probability of incurring significant costs or expenses. At June 30, 2019 and December 31, 2018 , we had no liabilities established related to litigation as there were no significant claims which were probable and estimable. We have not historically had any significant litigation expense and are not currently subject to a significant claim.

Geographic Information

Geographic Information	6 Months Ended
	Jun. 30, 2019
Segment Reporting [Abstract]
Geographic Information	Note 13. 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 ® , Galliprant ® and other products for companion animals. We have a single customer that accounted for 12.5% of revenue for each of the three months ended June 30, 2019 and 2018 , respectively, and for 12.2% and 11.7% of revenue for the six months ended June 30, 2019 and 2018 , respectively. The product sales resulted in accounts receivable with this customer of $98.1 million and $96.4 million as of June 30, 2019 and December 31, 2018 , 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 our foreign assets are affected by fluctuations in foreign currency exchange rates. Selected geographic area information was as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenue—to unaffiliated customers (1) United States $ 395.0 $ 366.4 $ 778.9 $ 726.4 International 386.6 403.8 733.8 780.0 Revenue $ 781.6 $ 770.2 $ 1,512.7 $ 1,506.4 June 30, 2019 December 31, 2018 Long-lived assets (2) United States $ 637.0 $ 602.6 United Kingdom 185.0 187.5 Other foreign countries 200.4 195.8 Long-lived assets $ 1,022.4 $ 985.9 (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	6 Months Ended
	Jun. 30, 2019
Earnings Per Share [Abstract]
Earnings Per Share	Note 14. Earnings Per Share As discussed in Note 1, Elanco Parent was formed for the purpose of facilitating the IPO. Lilly held all shares of Elanco Parent from the time of formation until the IPO. Prior to IPO, there were 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). In connection with the completion of the IPO, an additional 72,335,000 shares were issued. Earnings per share was calculated based on the assumption that the shares held by Lilly were outstanding for all periods prior to IPO. We compute basic earnings per share by dividing net earnings available to common shareholders by the actual weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if holders of unvested restricted stock units and stock options converted their holdings into common stock. Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive and as such, these shares are not included in the calculation of diluted earnings per share. For the three and six months ended June 30, 2019 , approximately 0.1 million and 0.1 million shares, respectively, of potential common shares were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive.

Related Party Agreements and Tr

Related Party Agreements and Transactions	6 Months Ended
	Jun. 30, 2019
Related Party Transactions [Abstract]
Related Party Agreements and Transactions	Note 15. Related Party Agreements and Transactions Transactions with Lilly Subsequent to Separation and Related to the Separation Amounts due from/(due to) Lilly in connection with the Separation and agreed upon services were as follows: June 30, 2019 December 31, 2018 TSA $ (18.6 ) $ (28.0 ) Other activities (28.7 ) (38.0 ) Local country asset purchases (11.5 ) (202.7 ) Total receivable from/(payable to) Lilly $ (58.8 ) $ (268.7 ) As described in Note 1, we completed an IPO in September 2018 and Lilly fully divested of all ownership of Elanco in March 2019. In connection with the Separation, we entered into various agreements with Lilly related to the form of our separation and certain ongoing activities that will continue for a period of time. These included, among others, a master separation agreement (MSA), a TSA and a tax matters agreement. In addition, there was a portion of our operations for which the legal transfer of our net assets did not occur prior to the Separation due to certain regulatory requirements in each of these countries. 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, 2022. The fees under the TSA became payable for all periods beginning after October 1, 2018. Separation Activities Subsequent to our IPO, there continue to be transactions between us and Lilly related primarily to the completion of the local country asset purchases and finalization of assets and liabilities associated with the legal separation from Lilly, combined income tax returns and the impact of the tax matters agreement, historical Lilly retirement benefits, and centralized cash management. The net impact of these activities of $18.4 million and $25.4 million for the three and six months ended June 30, 2019 has been reflected as Separation Activities within shareholders' equity. The most significant of these activities includes the finalization of the local country valuation of business and the resulting impact on deferred tax assets and the impact of combined tax returns. Other Activities We continue to share certain services and back office functions with Lilly, which in certain instances result in Lilly paying costs for Elanco (e.g., utilities, local country operating costs, etc.) that are then passed through to Elanco for reimbursement. These amounts are included in cash flows from operating activities in our condensed consolidated and combined statements of cash flows. In addition, we operate through a single treasury settlement process and prior to the local country asset purchases (as described below) continued to transact through Lilly's processes in certain instances. As a result of these activities, there were certain amounts of financing that occurred between Lilly and Elanco during the six month periods ended June 30, 2019 . These amounts are included in cash flows from financing activities in our condensed consolidated and combined statements of cash flows. Local Country Asset Purchases The legal transfer of certain of our net assets did not occur prior to the Separation due to certain regulatory requirements in each of these countries. The related assets, liabilities, and results of operations have been reported in our condensed consolidated and combined financial statements, as 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 under the terms of the MSA. We held restricted cash, and the associated payable to Lilly, at the date of Separation to fund the acquisition of these assets. As of June 30, 2019 , the majority of these assets have been legally acquired and the remainder are expected to be purchased during 2019. Restricted cash and Payable to Lilly of $ 11.5 million are recorded in the condensed consolidated balance sheet for the remainder of the assets expected to be purchased by the end of 2019. Transactions with Lilly Prior to Separation Prior to the IPO, we did not operate as a standalone business and had various relationships with Lilly whereby Lilly provided services to us. The impact on our historical combined financial statements includes the following: Transfers to/from Lilly, net As discussed in Note 2: 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 and six months ended June 30, 2018 , net transfers to Lilly were $40.3 million and $109.5 million , respectively. 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 Prior to full separation, Lilly provided 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 reflected 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 condensed consolidated and combined statements of operations: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cost of sales $ — $ 7.3 $ — $ 14.8 Research and development — 0.7 — 1.5 Marketing, selling and administrative — 27.5 — 54.8 Total $ — $ 35.5 $ — $ 71.1 We provide Lilly certain services related to manufacturing support. Allocations of manufacturing support from us to Lilly were $1.2 million and $2.4 million for the for the three and six months ended June 30, 2018 , respectively which reduced 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 Prior to full separation, our employees participated in Lilly stock-based compensation plans, the costs of which were 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 $5.1 million for the six months ended June 30, 2019 . The costs of such plans related to our employees were $6.4 million and $13.3 million for the three and six months ended June 30, 2018 , respectively. Retirement Benefits Prior to full separation, our employees participated in defined benefit pension and other post retirement plans sponsored by Lilly, the costs and benefits of which were 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 six months ended June 30, 2018 , the benefit of such plans related to our employees was $ 0.7 million and $1.3 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 statements of equity. Debt Lilly’s third-party debt and the related interest expense were not 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.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	Note 16. Subsequent Events Aratana Acquisition On April 26, 2019, we entered into an agreement (the Merger Agreement) to acquire Aratana Therapeutics, Inc. (Aratana). Aratana is a pet therapeutics company focused on innovative therapies for dogs and cats, and creator of the canine osteoarthritis medicine, Galliprant ® , the rights to which we acquired in 2016. Subject to the terms and conditions set forth in the Merger Agreement, upon the consummation of the merger, each share of Aratana common stock was converted into the right to receive 0.1481 shares of Elanco’s common stock plus one contingent value right, which represents the right to receive a contingent payment of $0.25 per share in cash upon the achievement of a specified milestone as outlined in the Merger Agreement. In connection with the transaction, we registered approximately 7.8 million shares of our stock during the three months ended June 30, 2019 for issuance to Aratana shareholders. Approximately 7.3 million shares were issued to previous Aratana shareholders upon closing, and the stock portion of the merger consideration represented $241.6 million . The maximum aggregate contingent payment is approximately $12 million . The transaction closed on July 18, 2019 and, as such, the accounting for this acquisition was incomplete at the time the condensed consolidated financial statements were issued. Prevtec Acquisition On July 31, 2019, we, through our wholly-owned subsidiary Elanco Canada Limited, acquired Prevtec Microbia, Inc. (“Prevtec”), pursuant to the terms of a share purchase agreement (the Share Purchase Agreement). Prevtec is a Canadian biotechnology company specializing in the development of vaccines intended to help prevent bacterial diseases in food animals. Prevtec is the maker of Coliprotec, a vaccine designed to protect pigs against post-weaning diarrhea and the effects of E. coli, which we were previously distributing in Europe and Canada. Pursuant to the terms and conditions of the Share Purchase Agreement, the total consideration to be paid is approximately CAD $78.5 million . We paid approximately CAD $40.0 million at closing, with the remainder to be paid on September 30, 2019, subject to certain post-closing adjustments. In addition to this consideration, the sellers may receive up to CAD $21.5 million in additional cash consideration, if specific sales milestones are achieved by December 31, 2021. Due to the timing, the accounting for this acquisition was incomplete at the time the condensed consolidated financial statements were issued.

Basis of Presentation (Policies

Basis of Presentation (Policies)	6 Months Ended
	Jun. 30, 2019
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.
Consolidation	For the periods after Separation, the financial statements are prepared on a consolidated basis and reflect the results of operations, comprehensive income, financial position, equity and cash flows resulting from our operations as an independent company. 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 consolidated and 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 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 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 combined statements of cash flows as a financing activity and in the condensed consolidated and combined statement of equity as net parent company investment.
Allocation of Expenses	Prior to Separation, these 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, prior to IPO. 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. After the Separation, a Transitional Services Agreement (TSA) between Lilly and Elanco went into effect. Under the terms of the TSA, we will be able to use these Lilly services for a fixed term established on a service-by-service basis. We are paying Lilly mutually agreed upon fees for the Lilly services provided under the TSA. Our consolidated and combined financial statements reflect the charges for Lilly services after the IPO.
Income Tax	The income tax amounts in the 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. Prior to full separation, certain of these income tax returns were filed on a consolidated or combined basis with Eli Lilly and Company and/or its subsidiaries.
Benefit and Combined Stock-Based Compensation Plans	Prior to Separation, Lilly maintained various benefit and combined stock-based compensation plans at a corporate level and other benefit plans at a country level. Our employees participated 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 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 transferred to Elanco.
Implementation of New Financial Accounting Pronouncements	The following table provides a brief description of an accounting standard that was effective January 1, 2019 and was adopted on that date: Standard Description 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 previous GAAP, on the balance sheet and requiring additional disclosures about leasing arrangements. We adopted the standard on January 1, 2019 using the modified retrospective approach, applied at the beginning of the period of adoption, and we elected the package of transition practical expedients. Upon adoption of the standard, we recorded $84.9 million of right-of-use assets and $85.3 million of operating lease liabilities on our consolidated balance sheet. Adoption of this standard did not have a material impact on our consolidated statement of operations for the six months ended June 30, 2019. See Note 10: Leases for further information. The following table provides a brief description of the accounting standards that have 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 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments This standard modifies the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. This standard is effective January 1, 2020, with early adoption permitted. We intend to adopt this standard on that date. We are currently evaluating the effect of this standard on our financial statements. Accounting Standards Update 2018-15, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract This guidance aligns the requirements for capitalizing implementation costs incurred in a cloud-based hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard is effective January 1, 2020, with early adoption permitted. We intend to adopt this standard on that date. We are currently evaluating the effect of this standard on our financial statements.

Implementation of New Financi_2

Implementation of New Financial Accounting Pronouncements (Tables)	6 Months Ended
	Jun. 30, 2019
Accounting Changes and Error Corrections [Abstract]
Description of Accounting Standards Adopted and Not Yet Adopted	The following table provides a brief description of an accounting standard that was effective January 1, 2019 and was adopted on that date: Standard Description 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 previous GAAP, on the balance sheet and requiring additional disclosures about leasing arrangements. We adopted the standard on January 1, 2019 using the modified retrospective approach, applied at the beginning of the period of adoption, and we elected the package of transition practical expedients. Upon adoption of the standard, we recorded $84.9 million of right-of-use assets and $85.3 million of operating lease liabilities on our consolidated balance sheet. Adoption of this standard did not have a material impact on our consolidated statement of operations for the six months ended June 30, 2019. See Note 10: Leases for further information. The following table provides a brief description of the accounting standards that have 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 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments This standard modifies the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. This standard is effective January 1, 2020, with early adoption permitted. We intend to adopt this standard on that date. We are currently evaluating the effect of this standard on our financial statements. Accounting Standards Update 2018-15, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract This guidance aligns the requirements for capitalizing implementation costs incurred in a cloud-based hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard is effective January 1, 2020, with early adoption permitted. We intend to adopt this standard on that date. We are currently evaluating the effect of this standard on our financial statements.

Revenue (Tables)

Revenue (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Beginning balance $ 120.0 $ 91.1 $ 118.5 $ 114.8 Reduction of revenue 80.6 56.2 146.3 100.7 Payments (68.5 ) (48.2 ) (132.7 ) (116.4 ) Ending balance $ 132.1 $ 99.1 $ 132.1 $ 99.1
Disaggregation of Revenue	The following table summarizes our revenue disaggregated by product category: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Companion Animal Disease Prevention $ 223.4 $ 214.0 $ 409.3 $ 415.3 Companion Animal Therapeutics 83.4 68.3 164.8 130.6 Food Animal Future Protein & Health 175.8 172.6 343.0 339.3 Food Animal Ruminants & Swine 271.5 297.1 545.6 579.6 Strategic Exits (1) 27.5 18.2 50.0 41.6 Revenue $ 781.6 $ 770.2 $ 1,512.7 $ 1,506.4 (1) Represents revenue from business activities we have either exited or made a strategic decision to exit.

Asset Impairment, Restructuri_2

Asset Impairment, Restructuring and Other Special Charges (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cash expense (income): Severance and other costs $ (1.3 ) $ (2.7 ) $ (0.8 ) $ (2.6 ) Integration and acquisition costs 33.1 2.8 53.5 5.6 Facility exit costs — 10.2 — 9.7 Total cash expense 31.8 10.3 52.7 12.7 Non-cash expense: Asset impairment — 57.7 4.0 57.7 Total non-cash expense — 57.7 4.0 57.7 Total expense $ 31.8 $ 68.0 $ 56.7 $ 70.4
Summary of Activity in Reserves	The following table summarizes the activity in our reserves established in connection with these restructuring activities: Facility exit costs Severance Total Balance at December 31, 2017 $ 34.9 $ 43.1 $ 78.0 Charges 21.2 — 21.2 Reserve adjustments (11.5 ) (2.6 ) (14.1 ) Cash paid (9.9 ) (28.4 ) (38.3 ) Balance at June 30, 2018 $ 34.7 $ 12.1 $ 46.8 Balance at December 31, 2018 $ 9.3 $ 35.1 $ 44.4 Charges — 2.5 2.5 Reserve adjustments — (3.3 ) (3.3 ) Cash paid (1.7 ) (13.8 ) (15.5 ) Balance at June 30, 2019 $ 7.6 $ 20.5 $ 28.1

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2019
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories consisted of the following: June 30, 2019 December 31, 2018 Finished products $ 412.4 $ 400.7 Work in process 610.2 570.4 Raw materials and supplies 72.7 80.4 Total (approximates replacement cost) 1,095.3 1,051.5 Decrease to LIFO cost (42.2 ) (47.4 ) Inventories $ 1,053.1 $ 1,004.1

Debt (Tables)

Debt (Tables)	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Schedule of Long-term Debt	Long-term debt consisted of the following: June 30, 2019 December 31, 2018 Term credit facility $ 427.5 $ 492.5 3.912% Senior Notes due 2021 500.0 500.0 4.272% Senior Notes due 2023 750.0 750.0 4.900% Senior Notes due 2028 750.0 750.0 Other obligations 0.3 0.5 Unamortized debt issuance costs (18.7 ) (20.7 ) Total debt 2,409.1 2,472.3 Less current portion of long-term debt 27.1 29.0 Total long-term debt $ 2,382.0 $ 2,443.3

Financial Instruments and Fai_2

Financial Instruments and Fair Value (Tables)	6 Months Ended
	Jun. 30, 2019
Fair Value Disclosures [Abstract]
Summary of Fair Value Information	The following table summarizes the fair value information at June 30, 2019 and December 31, 2018 for contingent consideration liabilities, the net investment hedge liability and long-term debt 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 June 30, 2019 Other current liabilities - contingent consideration $ (9.1 ) $ — $ — $ (9.1 ) $ (9.1 ) Other noncurrent liabilities - contingent consideration (68.1 ) — — (68.1 ) (68.1 ) Other noncurrent assets/(liabilities) - cross currency interest rate contracts designated as net investment hedges (0.5 ) — (0.5 ) — (0.5 ) Long-term debt - senior notes (2,000.0 ) — (2,137.0 ) — (2,137.0 ) December 31, 2018 Other current liabilities - contingent consideration $ (5.1 ) $ — $ — $ (5.1 ) $ (5.1 ) Other noncurrent liabilities - contingent consideration (69.0 ) — — (69.0 ) (69.0 ) Other noncurrent assets/(liabilities) - cross currency interest rate contracts designated as net investment hedges (7.4 ) — (7.4 ) — (7.4 ) Long-term debt - senior notes (2,000.0 ) — (2,005.0 ) — (2,005.0 )

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Impact of Operating Leases to Condensed Consolidated Financial Statements	The impact of operating leases to our condensed consolidated financial statements was as follows: Three months ended June 30, 2019 Six months ended June 30, 2019 Lease cost Operating lease cost $ 6.6 $ 12.3 Short-term lease cost 0.2 0.4 Variable lease cost 0.6 1.1 Total lease cost $ 7.4 $ 13.8 Other information Operating cash outflows from operating leases $ 11.8 Right-of-use assets obtained in exchange for new operating lease liabilities — Weighted-average remaining lease term - operating leases 5 years Weighted-average discount rate - operating leases 4.2 %
Supplemental Balance Sheet Information Related to Operating Leases	Supplemental balance sheet information related to our operating leases is as follows: Balance Sheet Classification June 30, 2019 Right-of-use assets Other noncurrent assets $ 81.3 Current operating lease liabilities Other current liabilities 23.3 Non-current operating lease liabilities Other noncurrent liabilities 58.3
Annual Minimum Lease Payments of Operating Lease Liabilities	As of June 30, 2019 , the annual minimum lease payments of our operating lease liabilities were as follows: Year 1 $ 24.8 Year 2 19.6 Year 3 11.9 Year 4 9.2 Year 5 7.4 After Year 5 15.1 Total lease payments 88.0 Less imputed interest (6.4 ) Total $ 81.6

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Provision for Taxes on Income	Provision for Taxes on Income Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Provision for Taxes on Income $ 14.3 $ 22.8 $ 27.6 $ 27.6 Effective Tax Rate 28.5 % (57.0 )% 29.0 % 73.6 %

Geographic Information (Tables)

Geographic Information (Tables)	6 Months Ended
	Jun. 30, 2019
Segment Reporting [Abstract]
Revenue by Selected Geographic Area Information	Selected geographic area information was as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenue—to unaffiliated customers (1) United States $ 395.0 $ 366.4 $ 778.9 $ 726.4 International 386.6 403.8 733.8 780.0 Revenue $ 781.6 $ 770.2 $ 1,512.7 $ 1,506.4 (1) Revenue is attributed to the countries based on the location of the customer.
Long-lived Assets by Selected Geographic Area Information	(2) Long-lived assets consist of property and equipment, net, and certain noncurrent assets. June 30, 2019 December 31, 2018 Long-lived assets (2) United States $ 637.0 $ 602.6 United Kingdom 185.0 187.5 Other foreign countries 200.4 195.8 Long-lived assets $ 1,022.4 $ 985.9

Related Party Agreements and _2

Related Party Agreements and Transactions (Tables)	6 Months Ended
	Jun. 30, 2019
Related Party Transactions [Abstract]
Amounts Due From/(Due To) Lilly and Allocations of Services	The allocations of services from Lilly to us were reflected as follows in the condensed consolidated and combined statements of operations: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cost of sales $ — $ 7.3 $ — $ 14.8 Research and development — 0.7 — 1.5 Marketing, selling and administrative — 27.5 — 54.8 Total $ — $ 35.5 $ — $ 71.1 Amounts due from/(due to) Lilly in connection with the Separation and agreed upon services were as follows: June 30, 2019 December 31, 2018 TSA $ (18.6 ) $ (28.0 ) Other activities (28.7 ) (38.0 ) Local country asset purchases (11.5 ) (202.7 ) Total receivable from/(payable to) Lilly $ (58.8 ) $ (268.7 )

Nature of Business and Organi_2

Nature of Business and Organization (Details) $ / shares in Units, $ in Billions	Sep. 24, 2018USD ($)$ / sharesshares	Jun. 30, 2019USD ($)brandcountry
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of brands in diverse portfolio (more than) | brand		125
Number of countries in which entity operates (more than) | country		90
IPO
Subsidiary, Sale of Stock [Line Items]
Number of shares issued | shares	72,335,000
Percentage of total outstanding shares	19.80%
Price per share (usd per share) | $ / shares	$ 24
Total net proceeds, after underwriting discounts and commissions	$ 1.7
Payments made to date		$ 4.2

Impact of Separation (Details)

Impact of Separation (Details)	Sep. 24, 2018USD ($)
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
Credit Facility | Senior Unsecured Term Credit Facility
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 500,000,000

Implementation of New Financi_3

Implementation of New Financial Accounting Pronouncements (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use assets	$ 81.3
Operating lease liabilities	$ 81.6
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use assets		$ 84.9
Operating lease liabilities		$ 85.3

Revenue - Narrative (Details)

Revenue - Narrative (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Concentration Risk [Line Items]
Performance obligation, description of timing			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 (less than for Product Returns for the three months ended June 30, 2019)			75.00%	70.00%
Geographic Concentration Risk | Contract With Customer Liability | Next Largest Country
Concentration Risk [Line Items]
Concentration risk (less than for Product Returns for the three months ended June 30, 2019)			5.00%	6.00%
Product Return Concentration Risk | Net Revenue
Concentration Risk [Line Items]
Concentration risk (less than for Product Returns for the three months ended June 30, 2019)	0.10%	0.60%	0.20%	0.40%

Revenue - Summary of Activity i

Revenue - Summary of Activity in Sales Rebates and Discounts Liability (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Change In Contract With Customer, Liability [Roll Forward]
Beginning balance	$ 120	$ 91.1	$ 118.5	$ 114.8
Reduction of revenue	80.6	56.2	146.3	100.7
Payments	(68.5)	(48.2)	(132.7)	(116.4)
Ending balance	$ 132.1	$ 99.1	$ 132.1	$ 99.1

Revenue - Disaggregation of Rev

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 781.6	$ 770.2	$ 1,512.7	$ 1,506.4
Companion Animal Disease Prevention
Disaggregation of Revenue [Line Items]
Revenue	223.4	214	409.3	415.3
Companion Animal Therapeutics
Disaggregation of Revenue [Line Items]
Revenue	83.4	68.3	164.8	130.6
Food Animal Future Protein & Health
Disaggregation of Revenue [Line Items]
Revenue	175.8	172.6	343	339.3
Food Animal Ruminants & Swine
Disaggregation of Revenue [Line Items]
Revenue	271.5	297.1	545.6	579.6
Strategic Exits
Disaggregation of Revenue [Line Items]
Revenue	$ 27.5	$ 18.2	$ 50	$ 41.6

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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Cash expense (income):
Severance and other costs	$ (1.3)	$ (2.7)	$ (0.8)	$ (2.6)
Integration and acquisition costs	33.1	2.8	53.5	5.6
Facility exit costs	0	10.2	0	9.7
Total cash expense	31.8	10.3	52.7	12.7
Non-cash expense:
Asset impairment	0	57.7	4	57.7
Total non-cash expense	0	57.7	4	57.7
Total cash expense	$ 31.8	$ 68	$ 56.7	$ 70.4

Asset Impairment, Restructuri_4

Asset Impairment, Restructuring and Other Special Charges - Summary of Activity in Reserves (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Restructuring Reserve [Roll Forward]
Balance at beginning of period	$ 44.4	$ 78
Charges	2.5	21.2
Reserve adjustments	(3.3)	(14.1)
Cash paid	(15.5)	(38.3)
Balance at end of period	28.1	46.8
Facility exit costs
Restructuring Reserve [Roll Forward]
Balance at beginning of period	9.3	34.9
Charges	0	21.2
Reserve adjustments		(11.5)
Cash paid	(1.7)	(9.9)
Balance at end of period	7.6	34.7
Severance
Restructuring Reserve [Roll Forward]
Balance at beginning of period	35.1	43.1
Charges	2.5	0
Reserve adjustments	(3.3)	(2.6)
Cash paid	(13.8)	(28.4)
Balance at end of period	$ 20.5	$ 12.1

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Finished products	$ 412.4	$ 400.7
Work in process	610.2	570.4
Raw materials and supplies	72.7	80.4
Total (approximates replacement cost)	1,095.3	1,051.5
Decrease to LIFO cost	(42.2)	(47.4)
Inventories	$ 1,053.1	$ 1,004.1

Debt (Details)

Debt (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ (18.7)	$ (20.7)
Total debt	2,409.1	2,472.3
Less current portion of long-term debt	27.1	29
Total long-term debt, excluding current portion	2,382	2,443.3
Credit facility | Term credit facility
Debt Instrument [Line Items]
Long-term debt, gross	$ 427.5	492.5
Senior Notes | 3.912% Senior Notes due 2021
Debt Instrument [Line Items]
Interest rate	3.912%
Long-term debt, gross	$ 500	500
Senior Notes | 4.272% Senior Notes due 2023
Debt Instrument [Line Items]
Interest rate	4.272%
Long-term debt, gross	$ 750	750
Senior Notes | 4.900% Senior Notes due 2028
Debt Instrument [Line Items]
Interest rate	4.90%
Long-term debt, gross	$ 750	750
Other obligations
Debt Instrument [Line Items]
Long-term debt, gross	$ 0.3	$ 0.5

Financial Instruments and Fai_3

Financial Instruments and Fair Value - Narrative (Details) SFr in Millions	1 Months Ended	3 Months Ended	6 Months Ended
	Oct. 31, 2018CHF (SFr)	Jun. 30, 2019USD ($)	Jun. 30, 2019USD ($)	Dec. 31, 2018USD ($)	Oct. 31, 2018USD ($)	Sep. 24, 2018USD ($)
Fair Value Disclosures [Abstract]
Equity method investments		$ 16,300,000	$ 16,300,000	$ 15,300,000
Foreign Exchange Contract | Net Investment Hedging | Designated as Hedging Instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Term of contract	5 years
Notional amount | SFr	SFr 750
Expected cash and contra interest per year					$ 25,000,000
Loss, net of tax		6,800,000
Foreign Exchange Contract | Net Investment Hedging | Designated as Hedging Instrument | Interest Expense
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contra interest expense		6,100,000	12,200,000
Amortized Cost
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Term credit facility		427,500,000	427,500,000	$ 492,500,000
Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate principal amount						$ 2,000,000,000
Senior Notes | 3.912% Senior Notes due 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate principal amount		$ 500,000,000	$ 500,000,000
Interest rate		3.912%	3.912%
Senior Notes | 4.272% Senior Notes due 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate principal amount		$ 750,000,000	$ 750,000,000
Interest rate		4.272%	4.272%
Senior Notes | 4.900% Senior Notes due 2028
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate principal amount		$ 750,000,000	$ 750,000,000
Interest rate		4.90%	4.90%

Financial Instruments and Fai_4

Financial Instruments and Fair Value - Summary of Fair Value Information (Details) - Recurring - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt - senior notes	$ 0	$ 0
Other noncurrent assets/(liabilities) - cross currency interest rate contracts designated as net investment hedges	0	0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt - senior notes	(2,137)	(2,005)
Other noncurrent assets/(liabilities) - cross currency interest rate contracts designated as net investment hedges	(0.5)	(7.4)
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt - senior notes	0	0
Other noncurrent assets/(liabilities) - cross currency interest rate contracts designated as net investment hedges	0	0
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt - senior notes	(2,000)	(2,000)
Other noncurrent assets/(liabilities) - cross currency interest rate contracts designated as net investment hedges	(0.5)	(7.4)
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt - senior notes	(2,137)	(2,005)
Other noncurrent assets/(liabilities) - cross currency interest rate contracts designated as net investment hedges	(0.5)	(7.4)
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	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	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	(9.1)	(5.1)
Other current liabilities - contingent consideration | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	(9.1)	(5.1)
Other current liabilities - contingent consideration | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	(9.1)	(5.1)
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	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	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	(68.1)	(69)
Other noncurrent liabilities - contingent consideration | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	(68.1)	(69)
Other noncurrent liabilities - contingent consideration | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	$ (68.1)	$ (69)

Leases - Narrative (Details)

Leases - Narrative (Details)	6 Months Ended
	Jun. 30, 2019
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	10 years

Leases - Impact of Operating Le

Leases - Impact of Operating Leases to Condensed Consolidated Financial Statements (Details) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2019USD ($)
Lease cost
Operating lease cost	$ 6.6	$ 12.3
Short-term lease cost	0.2	0.4
Variable lease cost	0.6	1.1
Total lease cost	$ 7.4	13.8
Other information
Operating cash outflows from operating leases		11.8
Right-of-use assets obtained in exchange for new operating lease liabilities		$ 0
Weighted-average remaining lease term - operating leases	5 years	5 years
Weighted-average discount rate - operating leases	4.20%	4.20%

Leases - Supplemental Balance S

Leases - Supplemental Balance Sheet Information Related to Operating Leases (Details) $ in Millions	Jun. 30, 2019USD ($)
Leases [Abstract]
Right-of-use assets	$ 81.3
Current operating lease liabilities	23.3
Non-current operating lease liabilities	$ 58.3

Leases - Annual Minimum Lease P

Leases - Annual Minimum Lease Payments of Operating Lease Liabilities (Details) $ in Millions	Jun. 30, 2019USD ($)
Leases [Abstract]
Year 1	$ 24.8
Year 2	19.6
Year 3	11.9
Year 4	9.2
Year 5	7.4
After Year 5	15.1
Total lease payments	88
Less imputed interest	(6.4)
Total	$ 81.6

Income Taxes - Provision for Ta

Income Taxes - Provision for Taxes on Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Provision for Taxes on Income	$ 14.3	$ 22.8	$ 27.6	$ 27.6
Effective Tax Rate	28.50%	(57.00%)	29.00%	73.60%

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Operating Loss Carryforwards [Line Items]
Income tax expense	$ 14.3	$ 22.8	$ 27.6	$ 27.6
Effective tax rate	28.50%	(57.00%)	29.00%	73.60%
State | Restatement Adjustment
Operating Loss Carryforwards [Line Items]
Net operating loss carryovers	$ 3.6		$ 3.6
Net operating loss carryovers, net of federal benefit	$ 2.9		$ 2.9

Contingencies (Details)

Contingencies (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Liabilities related to litigation	$ 0	$ 0

Geographic Information - Narrat

Geographic Information - Narrative (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2018	Jun. 30, 2019USD ($)segment	Jun. 30, 2018	Dec. 31, 2018USD ($)
Segment Reporting [Abstract]
Number of operating segments | segment			1
Concentration Risk [Line Items]
Accounts receivable	$ 757.2		$ 757.2		$ 651.8
Product Sales
Concentration Risk [Line Items]
Accounts receivable	$ 98.1		$ 98.1		$ 96.4
Customer Concentration Risk | Revenue | Single Customer
Concentration Risk [Line Items]
Concentration risk	12.50%	12.50%	12.20%	11.70%

Geographic Information - Revenu

Geographic Information - Revenue by Selected Geographic Area Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 781.6	$ 770.2	$ 1,512.7	$ 1,506.4
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	395	366.4	778.9	726.4
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 386.6	$ 403.8	$ 733.8	$ 780

Geographic Information - Long-l

Geographic Information - Long-lived Assets by Selected Geographic Area Information (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 1,022.4	$ 985.9
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	637	602.6
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	185	187.5
Other foreign countries
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 200.4	$ 195.8

Earnings Per Share (Details)

Earnings Per Share (Details)	Sep. 24, 2018shares	Sep. 19, 2018	Jun. 30, 2019shares	Jun. 30, 2019shares	Sep. 18, 2018shares	Dec. 31, 2017shares
Subsidiary, Sale of Stock [Line Items]
Stock split ratio		2,932,900
Antidilutive shares not included in calculating diluted earnings per share			100,000	100,000
IPO
Subsidiary, Sale of Stock [Line Items]
Number of shares issued	72,335,000
Elanco | Lilly
Subsidiary, Sale of Stock [Line Items]
Common shares outstanding					100	293,290,000

Related Party Agreements and _3

Related Party Agreements and Transactions - Amounts Due From/(Due To) Lilly (Details) - Lilly - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Total receivable from/(payable to) Lilly	$ (58.8)	$ (268.7)
TSA
Related Party Transaction [Line Items]
Total receivable from/(payable to) Lilly	(18.6)	(28)
Other activities
Related Party Transaction [Line Items]
Total receivable from/(payable to) Lilly	(28.7)	(38)
Local country asset purchases
Related Party Transaction [Line Items]
Total receivable from/(payable to) Lilly	$ (11.5)	$ (202.7)

Related Party Agreements and _4

Related Party Agreements and Transactions - Narrative (Details) - USD ($) $ in Millions		3 Months Ended						6 Months Ended
		Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018		Mar. 31, 2018		Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Separation adjustments	[1]	$ 18.4	$ 7
Restricted cash and payable		11.5		$ 0				$ 11.5	$ 0	$ 202.7
Net transfers to Lilly	[1]			40.3		$ 69.2
Lilly
Related Party Transaction [Line Items]
Stock-based compensation				6.4				$ 5.1	13.3
Costs of defined benefit pension plan				0.7					1.3
Lilly | TSA
Related Party Transaction [Line Items]
Mark-up rate								7.00%
Lilly | Manufacturing Support
Related Party Transaction [Line Items]
Revenue from related parties				1.2					2.4
Additional Paid-in Capital
Related Party Transaction [Line Items]
Separation adjustments	[1]	$ 18.4	$ 7					$ (25.4)
Net Parent Company Investment
Related Party Transaction [Line Items]
Net transfers to Lilly				$ 40.3	[1]	$ 69.2	[1]		$ 109.5
[1]	See Note 15: Related Party Agreements and Transactions for further discussion.

Related Party Agreements and _5

Related Party Agreements and Transactions - Allocations of Services (Details) - Lilly - Transitional Services Agreement - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Related Party Transaction [Line Items]
Allocation of services	$ 0	$ 35.5	$ 0	$ 71.1
Cost of sales
Related Party Transaction [Line Items]
Allocation of services	0	7.3	0	14.8
Research and development
Related Party Transaction [Line Items]
Allocation of services	0	0.7	0	1.5
Marketing, selling and administrative
Related Party Transaction [Line Items]
Allocation of services	$ 0	$ 27.5	$ 0	$ 54.8

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Millions	Jul. 31, 2019CAD ($)	Jul. 18, 2019USD ($)shares	Jul. 18, 2019USD ($)right$ / sharesshares
Aratana
Subsequent Event [Line Items]
Common stock right to receive converted shares (in shares) | shares			0.1481
Number of contingent value rights | right			1
Right to receive contingent payment (usd per share) | $ / shares			$ 0.25
Number of shares issued to previous shareholders upon closing (in shares) | shares		7,300,000	7,800,000
Stock portion of merger consideration			$ 241.6
Maximum aggregate contingent payment		$ 12	$ 12
Prevtec
Subsequent Event [Line Items]
Maximum aggregate contingent payment	$ 21,500,000
Total consideration	78,500,000
Amount paid at closing	$ 40,000,000

Uncategorized Items - elan-2019

Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (300,000)
Net Parent Company Investment [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (300,000)