Elanco Animal Health (ELAN) 10-Q 8 Nov 22 2022 Q3 Quarterly report Financial data

Cover Page

Cover Page - shares	9 Months Ended
	Sep. 30, 2022	Nov. 03, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-38661
Entity Registrant Name	Elanco Animal Health Inc
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	82-5497352
Entity Address, Address Line One	2500 INNOVATION WAY
Entity Address, City or Town	GREENFIELD
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	46140
City Area Code	877
Local Phone Number	352-6261
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		474,205,430
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001739104
Current Fiscal Year End Date	--12-31
Common stock, no par value
Document Information [Line Items]
Title of 12(b) Security	Common stock, no par value
Trading Symbol	ELAN
Security Exchange Name	NYSE
5.00% Tangible Equity Units
Document Information [Line Items]
Title of 12(b) Security	5.00% Tangible Equity Units
Trading Symbol	ELAT
Security Exchange Name	NYSE

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenue	$ 1,028	$ 1,131	$ 3,430	$ 3,652
Costs, expenses and other:
Cost of sales	472	502	1,465	1,622
Research and development	78	94	241	277
Marketing, selling and administrative	298	342	961	1,075
Amortization of intangible assets	128	141	398	417
Asset impairment, restructuring and other special charges	26	111	158	518
Interest expense, net of capitalized interest	60	60	179	181
Other expense, net	8	11	17	8
Costs, expenses and other	1,070	1,261	3,419	4,098
Income (loss) before income taxes	(42)	(130)	11	(446)
Income tax expense (benefit)	7	(26)	34	(71)
Net loss	$ (49)	$ (104)	$ (23)	$ (375)
Loss per share:
Basic (usd per share)	$ (0.10)	$ (0.21)	$ (0.05)	$ (0.77)
Diluted (usd per share)	$ (0.10)	$ (0.21)	$ (0.05)	$ (0.77)
Weighted average shares outstanding:
Basic (in shares)	488.4	487.3	488.3	487.1
Diluted (in shares)	488.4	487.3	488.3	487.1

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net loss	$ (49)	$ (104)	$ (23)	$ (375)
Other comprehensive income (loss):
Cash flow hedges, net of taxes	62	4	179	52
Foreign currency translation	(418)	(209)	(973)	(506)
Defined benefit pension and retiree health benefit plans, net of taxes	(2)	(6)	(4)	5
Other comprehensive loss, net of taxes	(358)	(211)	(798)	(449)
Comprehensive loss	$ (407)	$ (315)	$ (821)	$ (824)

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Current Assets
Cash and cash equivalents	$ 460	$ 638
Accounts receivable, net of allowances of $10 (2022) and $12 (2021)	804	833
Other receivables	224	195
Inventories	1,340	1,373
Prepaid expenses and other	326	237
Total current assets	3,154	3,276
Noncurrent Assets
Goodwill	5,716	6,172
Other intangibles, net	4,766	5,587
Other noncurrent assets	376	387
Property and equipment, net of accumulated depreciation of $696 (2022) and $1,041 (2021)	936	1,061
Total assets	14,948	16,483
Current Liabilities
Accounts payable	350	418
Employee compensation	136	185
Sales rebates and discounts	298	316
Current portion of long-term debt	394	294
Other current liabilities	435	430
Total current liabilities	1,613	1,643
Noncurrent Liabilities
Long-term debt	5,507	6,025
Accrued retirement benefits	240	271
Deferred taxes	618	745
Other noncurrent liabilities	225	261
Total liabilities	8,203	8,945
Commitments and Contingencies
Equity
Preferred stock, no par value, 1,000,000,000 shares authorized; none issued	0	0
Common stock, no par value, 5,000,000,000 shares authorized, 474,124,115 and 473,119,786 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	0	0
Additional paid-in capital	8,724	8,696
Accumulated deficit	(972)	(949)
Accumulated other comprehensive loss	(1,007)	(209)
Total equity	6,745	7,538
Total liabilities and equity	$ 14,948	$ 16,483

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Accounts receivable, net of allowances	$ 10	$ 12
Property and equipment, net of accumulated depreciation	$ 696	$ 1,041
Preferred stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, shares authorized (in shares)	5,000,000,000	5,000,000,000
Common stock, shares issued (in shares)	474,124,115	473,119,786
Common stock, shares outstanding (in shares)	474,124,115	473,119,786

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Cash Flow Hedge Gain (Loss)	Foreign Currency Translation	Defined Benefit Pension and Retiree Health Benefit Plans
Balance at beginning of period (in shares) at Dec. 31, 2020		471,900,000
Balance at beginning of period at Dec. 31, 2020	$ 8,476	$ 0	$ 8,650	$ (477)	$ 303	$ (61)	$ 360	$ 4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(61)			(61)
Other comprehensive income (loss), net of tax	(405)				(405)	53	(466)	8
Stock compensation	15		15
Issuance of stock under employee stock plans, net (in shares)		1,100,000
Issuance of stock under employee stock plans, net	(18)		(18)
Balance at end of period (in shares) at Mar. 31, 2021		473,000,000
Balance at end of period at Mar. 31, 2021	8,007	$ 0	8,647	(538)	(102)	(8)	(106)	12
Balance at beginning of period (in shares) at Dec. 31, 2020		471,900,000
Balance at beginning of period at Dec. 31, 2020	8,476	$ 0	8,650	(477)	303	(61)	360	4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(375)
Other comprehensive income (loss), net of tax	(449)
Balance at end of period (in shares) at Sep. 30, 2021		473,000,000
Balance at end of period at Sep. 30, 2021	7,682	$ 0	8,680	(852)	(146)	(9)	(146)	9
Balance at beginning of period (in shares) at Mar. 31, 2021		473,000,000
Balance at beginning of period at Mar. 31, 2021	8,007	$ 0	8,647	(538)	(102)	(8)	(106)	12
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(210)			(210)
Other comprehensive income (loss), net of tax	167				167	(5)	169	3
Stock compensation	16		16
Balance at end of period (in shares) at Jun. 30, 2021		473,000,000
Balance at end of period at Jun. 30, 2021	7,980	$ 0	8,663	(748)	65	(13)	63	15
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(104)			(104)
Other comprehensive income (loss), net of tax	(211)				(211)	4	(209)	(6)
Stock compensation	17		17
Balance at end of period (in shares) at Sep. 30, 2021		473,000,000
Balance at end of period at Sep. 30, 2021	$ 7,682	$ 0	8,680	(852)	(146)	(9)	(146)	9
Balance at beginning of period (in shares) at Dec. 31, 2021	473,119,786	473,100,000
Balance at beginning of period at Dec. 31, 2021	$ 7,538	$ 0	8,696	(949)	(209)	25	(253)	19
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	48			48
Other comprehensive income (loss), net of tax	23				23	109	(85)	(1)
Stock compensation	14		14
Issuance of stock under employee stock plans, net (in shares)		1,000,000
Issuance of stock under employee stock plans, net	(11)		(11)
Balance at end of period (in shares) at Mar. 31, 2022		474,100,000
Balance at end of period at Mar. 31, 2022	$ 7,612	$ 0	8,699	(901)	(186)	134	(338)	18
Balance at beginning of period (in shares) at Dec. 31, 2021	473,119,786	473,100,000
Balance at beginning of period at Dec. 31, 2021	$ 7,538	$ 0	8,696	(949)	(209)	25	(253)	19
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(23)
Other comprehensive income (loss), net of tax	$ (798)
Balance at end of period (in shares) at Sep. 30, 2022	474,124,115	474,100,000
Balance at end of period at Sep. 30, 2022	$ 6,745	$ 0	8,724	(972)	(1,007)	204	(1,226)	15
Balance at beginning of period (in shares) at Mar. 31, 2022		474,100,000
Balance at beginning of period at Mar. 31, 2022	7,612	$ 0	8,699	(901)	(186)	134	(338)	18
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(22)			(22)
Other comprehensive income (loss), net of tax	(463)				(463)	8	(470)	(1)
Stock compensation	17		17
Issuance of stock under employee stock plans, net	(4)		(4)
Balance at end of period (in shares) at Jun. 30, 2022		474,100,000
Balance at end of period at Jun. 30, 2022	7,140	$ 0	8,712	(923)	(649)	142	(808)	17
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(49)			(49)
Other comprehensive income (loss), net of tax	(358)				(358)	62	(418)	(2)
Stock compensation	13		13
Issuance of stock under employee stock plans, net	$ (1)		(1)
Balance at end of period (in shares) at Sep. 30, 2022	474,124,115	474,100,000
Balance at end of period at Sep. 30, 2022	$ 6,745	$ 0	$ 8,724	$ (972)	$ (1,007)	$ 204	$ (1,226)	$ 15

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash Flows from Operating Activities
Net loss	$ (23)	$ (375)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization	514	542
Deferred income taxes	(36)	(119)
Stock-based compensation expense	44	48
Asset impairment and write-down charges	87	334
Loss on sale of assets	3	0
Loss (gain) on divestiture	(3)	2
Inventory fair value step-up amortization	0	64
Loss on extinguishment of debt	19	0
Proceeds from interest rate swap settlements	207	0
Changes in operating assets and liabilities, net of acquisitions	(384)	(243)
Other non-cash operating activities, net	11	7
Net Cash Provided by Operating Activities	439	260
Cash Flows from Investing Activities
Net purchases of property and equipment	(71)	(60)
Cash paid for acquisitions, net of cash acquired	0	(342)
Proceeds from site divestitures	11	0
Purchases of intangible assets	(11)	(35)
Purchases of software	(23)	(11)
Other investing activities, net	(9)	(8)
Net Cash Used for Investing Activities	(103)	(456)
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt	425	500
Proceeds from revolving credit facility	563	500
Repayments of long-term borrowings	(607)	(555)
Repayments of revolving credit facility	(813)	(250)
Debt issuance costs	(2)	(1)
Early redemption and tender premiums paid	(14)	0
Other net financing transactions with Lilly	0	(11)
Other financing activities, net	(17)	(17)
Net Cash (Used for) Provided by Financing Activities	(465)	166
Effect of exchange rate changes on cash and cash equivalents	(49)	(23)
Net decrease in cash and cash equivalents	(178)	(53)
Cash and cash equivalents at January 1	638	506
Cash and cash equivalents at September 30	$ 460	$ 453

Background

Background	9 Months Ended
	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Background	Note 1. Background Elanco is a global animal health company that innovates, develops, manufactures and markets products for pets and farm animals. We offer a portfolio of approximately 200 brands to pet owners, veterinarians and farm animal producers in more than 90 countries. Our products are generally sold worldwide directly to wholesalers, distributors, and independent retailers. Certain products are also sold directly to farm animal producers and veterinarians. We have a diversified business of products across species consisting of: dogs and cats (collectively, pet health) and cattle, poultry, swine and aqua (collectively, farm animal).

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Summary of Significant Accounting Policies	Note 2. Basis of Presentation and Summary of Significant Accounting Policies We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the U.S. Securities and Exchange Commission (SEC) requirements for interim reporting. As permitted under those rules, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. (GAAP) have been condensed or omitted. The information included in this Form 10-Q should be read in conjunction with our consolidated financial statements and accompanying notes for the year ended December 31, 2021 included in our Form 10-K filed with the SEC on February 28, 2022 ( 2021 Form 10-K ). In addition, results for interim periods should not be considered indicative of results for any other interim period or for the full year ending December 31, 2022 or any other future period. In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for fair presentation of the results of operations for the periods shown. In preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates. Certain reclassifications of prior year information have been made to conform to the current year's presentation. The significant accounting policies set forth in Note 3 to the consolidated financial statements in our 2021 Form 10-K appropriately represent, in all material respects, the current status of our accounting policies, except as it relates to goodwill and the adoption of the standard that was effective January 1, 2022 as described in Note 3: Implementation of New Financial Accounting Pronouncements. Goodwill Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. We evaluate goodwill for impairment at least annually and when certain qualitative impairment indicators are present. When required, a comparison of fair value to the carrying amount of our single reporting unit is performed to determine the amount of any impairment. We begin by assessing qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying value. Based on that qualitative assessment, if we conclude that it is more likely than not that the fair value of our single reporting unit is less than its carrying value, we conduct a quantitative goodwill impairment test, which involves comparing the estimated fair value of our single reporting unit with its carrying value, including goodwill. We estimate the fair value of our single reporting unit using a combination of the income and market approach. If the carrying value of the reporting unit exceeds its estimated fair value, we recognize an impairment loss for the difference. During the third quarter of 2022, a significant change in our market capitalization relative to our book value, among other factors, triggered a quantitative goodwill impairment test. As of September 30, 2022, our single reporting unit was tested for impairment using the quantitative approach described above, resulting in an estimated fair value that exceeded the carrying amount by more than 20%. Therefore, no impairment existed with respect to our goodwill.

Implementation of New Financial

Implementation of New Financial Accounting Pronouncements	9 Months Ended
	Sep. 30, 2022
Accounting Changes and Error Corrections [Abstract]
Implementation of New Financial Accounting Pronouncements	Note 3. Implementation of New Financial Accounting Pronouncements The following table provides a brief description of an accounting standard that was effective January 1, 2022 and was adopted on that date: Standard Description Effect on the financial statements or other significant matters ASU 2021-10, Government Assistance (Topic 832) The amendments in this update require annual disclosure of transactions with governments that are accounted for by applying a grant or contribution model. The new pronouncement requires entities to provide information about the nature, terms and conditions associated with the transactions and the financial statement line items affected. The adoption of this guidance did not have a material impact on our consolidated financial statements. The following table provides a brief description of an accounting standard that is applicable to us but has not yet been adopted: Standard Description Effective Date Effect on the financial statements or other significant matters ASU 2020-04, Reference rate reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting; ASU 2021-01, Reference Rate Reform (Topic 848): Scope ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2021-01 clarifies the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions. Adoption of the guidance is optional and effective as of March 12, 2020 through December 31, 2022. Adoption is permitted at any time during the period on a prospective basis. Our current credit facilities reference London Inter-Bank Offered Rate (LIBOR) as a benchmark rate. The underlying credit agreements include provisions which outline criteria for establishing a consistent replacement benchmark rate in the event that LIBOR is discontinued. Therefore, it is unlikely that we will need to adopt this optional guidance. However, we will continue to evaluate the impact as reference rate reform activities occur.

Revenue

Revenue	9 Months Ended
	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Revenue	Note 4. Revenue Our sales rebates and discounts are based on specific agreements. The most significant of our sales rebate and discount programs in terms of accrual and payment amounts, percentage of our products that are sold via these programs, and level of judgment required in estimating the appropriate transaction price, relate to our programs in the U.S., France and the United Kingdom (U.K.). As of September 30, 2022 and 2021, the aggregate liability for sales rebates and discounts for these countries represented approximately 76% and 72%, respectively, of our total liability. The following table summarizes the activity in our global sales rebates and discounts liability: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance $ 284 $ 303 $ 316 $ 295 Reduction of revenue 169 163 524 516 Payments (143) (146) (525) (489) Foreign currency translation adjustments (12) (4) (17) (6) Ending balance $ 298 $ 316 $ 298 $ 316 Adjustments to revenue recognized as a result of changes in estimates for the judgments described above during the three and nine months ended September 30, 2022 and 2021 for product shipped in previous periods were not material. Actual global product returns were approximately 1% and 2% of net revenue for the three months ended September 30, 2022 and 2021, respectively. Actual global product returns were approximately 1% of net revenue for the nine months ended September 30, 2022 and 2021. Disaggregation of Revenue The following table summarizes our revenue disaggregated by product category: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Pet Health $ 471 $ 527 $ 1,722 $ 1,857 Farm Animal: Cattle 227 250 722 735 Poultry 176 179 529 536 Swine 95 110 284 346 Aqua 47 44 132 111 Total Farm Animal 545 583 1,667 1,728 Contract Manufacturing (1) 12 21 41 67 Revenue $ 1,028 $ 1,131 $ 3,430 $ 3,652

Acquisitions, Divestitures and

Acquisitions, Divestitures and Other Arrangements	9 Months Ended
	Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]
Acquisitions, Divestitures and Other Arrangements	Note 5. Acquisitions, Divestitures and Other Arrangements KindredBio Acquisition On August 27, 2021, we acquired KindredBio, a publicly traded biopharmaceutical company that developed innovative biologics focused on saving and improving the lives of pets. The acquisition further accelerates our pet health expansion, particularly by expanding our presence in dermatology. The transaction was accounted for as a business combination under the acquisition method of accounting. The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The determination of estimated fair value requires management to make significant estimates and assumptions. The excess of the purchase price over the fair value of the acquired net assets, where applicable, has been recorded as goodwill. The results of operations of the acquisition are included in our condensed consolidated financial statements from the date of acquisition. In connection with the merger agreement, we acquired all outstanding stock of KindredBio for $9.25 per share, or an aggregate cash purchase consideration of $444 million. We utilized our revolving credit facility and cash on hand to finance the acquisition. On May 5, 2021, we signed an agreement with KindredBio to acquire exclusive global rights to KIND-030, a monoclonal antibody that is being developed for the treatment and prevention of canine parvovirus. We calculated the fair value of the liability associated with that agreement using an income approach leveraging the estimated sales royalty, sales milestone and technical milestone payments avoided, and settled the $29 million liability upon the closing of our acquisition of KindredBio. Revenue and loss from KindredBio included in our condensed consolidated statements of operations for the three and nine months ended September 30, 2022 were immaterial. The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date: Estimated Fair Value at August 27, 2021 Cash and cash equivalents $ 31 Other net working capital 13 Property and equipment 33 Intangible assets, primarily acquired in-process research and development (IPR&D) 333 Deferred income taxes, net (30) Total identifiable net assets 380 Goodwill 35 Settlement of liability related to previous license agreement 29 Total consideration transferred $ 444 The valuation of assets acquired and liabilities assumed was finalized during the third quarter of 2022. The measurement period adjustments recorded during 2022, which were made to reflect the facts and circumstances in existence as of the acquisition date, primarily related to changes in the estimated fair value of acquired IPR&D and minor tax and working capital adjustments. The net impact of these adjustments was not material. Property and equipment is mostly comprised of land, buildings, equipment (including laboratory equipment, furniture and fixtures, and computer equipment), and construction in progress. The estimated fair value of real and personal property was determined using the sales comparison data valuation technique, to the extent that market data for similar assets was available. When market pricing data was not available for a given asset or asset class, the direct replacement cost method was used. The estimated fair values of acquired IPR&D were determined using the income approach, which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the significant assumptions inherent in the development of these asset valuations include the estimated net cash flows for each year for each asset (including revenues, cost of sales, R&D expenses, marketing, selling and administrative expenses, and contributory asset charges), the appropriate discount rate necessary to measure the risk inherent in each future cash flow stream, the life cycle of each asset, the potential regulatory and commercial success risk, and competitive trends impacting the asset and each cash flow stream, as well as other factors. The goodwill recognized from this acquisition is primarily attributable to KindredBio's assembled workforce and expected synergies. The majority of goodwill associated with this acquisition is not deductible for tax purposes. Divestitures Microbiome R&D platform carve-out In April 2022, we signed an agreement to transfer assets associated with our microbiome R&D platform to a newly created, independent biopharmaceutical company, BiomEdit, focused on developing solutions for animal and human health. As part of the agreement, we retain a non-voting, minority stake in the company. Assets transferred include intellectual property and laboratory equipment. The book values of those assets were not material. In addition, we have entered into transitional services agreements with the company for certain services. We have determined that the disposal of the related net assets does not qualify for reporting as a discontinued operation because it does not represent a strategic shift that has or will have a major effect on our operations and financial results. During the nine months ended September 30, 2022, we recorded a gain on the disposal of approximately $3 million. Shawnee and Speke During 2021, as part of our strategy to optimize our manufacturing footprint, we announced an agreement with TriRx Pharmaceuticals (TriRx) to sell our manufacturing sites in Shawnee, Kansas (Shawnee) and Speke, U.K. (Speke), including the planned transfer of approximately 600 employees. In connection with these arrangements, we also entered into long-term manufacturing and supply agreements, under which TriRx will manufacture existing Elanco products at both sites upon the closing of the transactions. On August 1, 2021 and February 1, 2022, we completed the sales of our Shawnee and Speke sites, respectively. Upon closing the sale of the Speke site, we recorded a contract asset of $55 million for the favorable supply agreement, which is included in prepaid expenses and other and other noncurrent assets on our condensed consolidated balance sheets. The divestitures did not represent a strategic shift that has or will have a major effect on our operations and financial results, and therefore do not qualify for reporting as discontinued operations. See Note 6: Asset Impairment, Restructuring and Other Special Charges for further information. Based on the terms of the agreements, we expect to receive aggregate gross cash proceeds of $78 million from the sales of Shawnee and Speke over a period of three years beginning in the second half of 2022. During the three months ended September 30, 2022, we received cash proceeds of $11 million. Receivables for the remaining expected cash proceeds are included in other receivables and other noncurrent assets on our condensed consolidated balance sheets. Assets Held For Sale Assets considered held for sale in connection with the Speke divestiture were included in the respective line items on our condensed consolidated balance sheets as follows: December 31, 2021 Inventories $ 31 Property and equipment, net 50 Total assets held for sale $ 81 BexCaFe Arrangement On June 9, 2022, we signed a license agreement with BexCaFe, LLC (BexCaFe) for the development and commercialization of products related to Bexacat, an oral treatment intended to reduce glucose levels in diabetic cats. BexCaFe held the rights to the compound through a license agreement with similar terms and conditions. We will incur all development and regulatory costs associated with the products. Based on the guidance in Accounting Standards Codification (ASC) 810, Consolidation , we determined that BexCaFe represents a variable interest entity and that we are the primary beneficiary of BexCaFe because the terms of the license give us the power to direct the activities that most significantly impact the entity’s economic performance. As a result, we consolidated BexCaFe, a development-stage company with no employees that did not meet the definition of a business, as of the date we signed the license agreement. Upon initial consolidation of BexCaFe, we measured an IPR&D asset at its fair value of $59 million and recorded liabilities totaling $59 million, which included contingent consideration of $49 million based on the fair value of estimated future milestone payments and sales royalties owed under the license agreement. The initial fair value of the contingent payments was calculated based on an income approach, with payments adjusted for probability of success and then discounted to a present value. There is no minimum payout due on the contingent consideration and the maximum payout is unlimited. Since BexCaFe did not meet the definition of a business, no goodwill was recorded and immediately after initial consolidation, we expensed the IPR&D asset because we concluded that it did not have an alternative future use. This amount is included in asset impairment, restructuring, and other special charges in our condensed consolidated statement of operations for the nine months ended September 30, 2022. We paid $10 million to BexCaFe under the terms of this agreement during the three months ended September 30, 2022. Contingent consideration liabilities of $49 million are included in other current liabilities and other noncurrent liabilities on our condensed consolidated balance sheet as of September 30, 2022. Subsequent to the effective date of the license agreement, our condensed consolidated financial statements include the assets, liabilities, operating results and cash flows of BexCaFe. Based on the guidance in ASC 810, income and expense between us and BexCaFe have been eliminated against the income or expense included in the financial statements of BexCaFe. The resulting amounts after the effect of these eliminations were included in our condensed consolidated financial statements for the three and nine months ended September 30, 2022 and were not material.

Asset Impairment, Restructuring

Asset Impairment, Restructuring and Other Special Charges	9 Months Ended
	Sep. 30, 2022
Restructuring and Related Activities [Abstract]
Asset Impairment, Restructuring and Other Special Charges	Note 6. Asset Impairment, Restructuring and Other Special Charges In recent years, we have incurred substantial costs associated with restructuring programs and cost-reduction initiatives designed to achieve a flexible and competitive cost structure. As discussed further below, restructuring activities primarily include charges associated with facility rationalization and workforce reductions. In connection with our recent acquisitions, including the acquisition of Bayer Animal Health, we have also incurred costs associated with executing transactions and integrating acquired operations, which may include expenditures for banking, legal, accounting, and other similar services. In addition, we have incurred costs to stand up our organization as an independent company. All operating functions can be impacted by these actions; therefore, non-cash expenses associated with our tangible and intangible assets can be incurred as a result of revised fair value projections and/or determinations to no longer utilize certain assets in the business on an ongoing basis. For finite-lived intangible assets and other long-lived assets, whenever impairment indicators are present, we calculate the undiscounted value of projected cash flows associated with the asset, or group of assets, and compare it to the carrying amount. If the carrying amount is greater, we record an impairment loss for the excess of book value over fair value. Determinations of fair value can result from a complex series of judgments and rely on estimates and assumptions. See Note 2: Basis of Presentation and Summary of Significant Accounting Policies for discussion regarding estimates and assumptions. 2021 Restructuring Programs In 2021, we announced two separate restructuring programs to improve operating efficiencies. The actions proposed in January 2021 focused on streamlining processes and delivering increased efficiency in functional areas, while improving the productivity of our investments in innovation. As part of the restructuring plan, we closed our R&D sites in Manukau, New Zealand and Cuxhaven, Germany. We also reduced duplication and optimized structures in U.S. operations, marketing, manufacturing and quality central functions, and administrative areas. The restructuring resulted in the elimination of approximately 315 positions around the world. Activities related to this initiative resulted in adjustments of $1 million to reduce severance accruals and net charges of $44 million for the three and nine months ended September 30, 2021, respectively. The adjustments reflect a change in estimate resulting from negotiations. Restructuring charges under this program were substantially complete at the end of 2021. The program announced in November 2021 included initiatives to consolidate certain international commercial operations into one organization, integrate our centralized global marketing organization into country level commercial organizations, transform and simplify our R&D organizational structure, and other organizational adjustments. In connection with the proposed restructuring, we eliminated 380 positions. During the nine months ended September 30, 2022, we recorded adjustments of $9 million to reduce severance accruals resulting from final negotiations and certain restructured employees filling open positions. Restructuring charges under this program were substantially complete as of September 30, 2022; however, we may continue to make adjustments to our severance accruals to reflect changes in estimates resulting from ongoing negotiations. Components of asset impairment, restructuring and other special charges are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Restructuring charges (credits): Severance and other costs (1) $ — $ (2) $ (9) $ 26 Facility exit costs — — 2 — Acquisition related charges: Transaction and integration costs (2) 27 30 77 141 Non-cash and other items: Asset impairment (3) — 50 59 63 Asset write-down (4) (1) 6 27 275 Net periodic benefit income (Note 14) — (9) — (26) Settlements and other (5) — 36 2 39 Total expense $ 26 $ 111 $ 158 $ 518 (1) 2022 credits primarily relate to adjustments resulting from the reversal of severance accruals associated with the November 2021 program. For the nine months ended September 30, 2021, charges primarily related to the restructuring program announced and initiated in January 2021. These costs were partially offset by the reversal of severance accruals associated with the January 2021 and September 2020 programs during the period. (2) Transaction costs represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services. Integration costs represent internal and external incremental costs directly related to integrating acquired businesses, including the acquisitions of KindredBio and Bayer Animal Health (e.g., expenditures for consulting, system and process integration, and product transfers), as well as independent company stand-up costs related to the implementation of new systems, programs, and processes. (3) 2022 includes a charge of $59 million related to the expensing of an IPR&D asset with no alternative future use licensed from BexCaFe during the second quarter. See Note 5: Acquisitions, Divestitures and Other Arrangements for further discussion. 2021 amounts represent the impact of adjustments to the fair value of certain IPR&D assets that were subject to product rationalization. The asset impairment charge during the three months ended September 30, 2021 reflects a decision by management to terminate an IPR&D project and fully impair the related asset, which was associated with a farm animal parasiticide. The decision was prompted by unfavorable efficacy results observed during the quarter. (4) 2022 amounts primarily include the finalization of the write-down charge upon the final sale of the Speke manufacturing site. Asset write-down charges recorded in 2021 included the initial adjustments recorded to write down the Shawnee and Speke assets classified as held for sale as of June 30, 2021 to an amount equal to estimated fair value less costs to sell, as well as adjustments to values of assets sold in relation to the Shawnee manufacturing site sold on August 1, 2021 and assets classified as held for sale in relation to the Speke manufacturing site during the three months ended September 30, 2021. See Note 5: Acquisitions, Divestitures and Other Arrangements for further discussion. Also included are charges recorded to write down assets in Belford Roxo, Brazil; Basel, Switzerland; Cuxhaven, Germany; and Manukau, New Zealand that were classified as held and used to their current fair value. These charges were recorded in connection with announced restructuring programs. (5) Amounts recorded during the nine months ended September 30, 2022 represent a $2 million measurement period adjustment to the charge associated with the settlement of a liability for future royalty and milestone payments triggered in connection with our acquisition of KindredBio. See Note 5: Acquisitions, Divestitures and Other Arrangements for further discussion. Amounts recorded during the three and nine months ended September 30, 2021 include the initial charge associated with the settlement of the liability for future royalty and milestone payments triggered in connection with our acquisition of KindredBio, accounting and advisory fees related to the sale of our manufacturing site in Shawnee, and an $8 million charge related to a litigation settlement for a matter that originated prior to our acquisition of Bayer Animal Health. The amount for the nine months ended September 30, 2021 also includes the gain recorded on the divestiture of an early-stage IPR&D asset acquired as part of the Bayer Animal Health acquisition. The following table summarizes the activity in our reserves established in connection with restructuring activities: Severance Balance at December 31, 2020 $ 130 Charges 41 Reserve adjustments (15) Cash paid (94) Foreign currency translation adjustments (1) Balance at September 30, 2021 $ 61 Balance at December 31, 2021 $ 126 Reserve adjustments (9) Cash paid (71) Foreign currency translation adjustments (5) Balance at September 30, 2022 $ 41 These reserves are included in other current liabilities and other noncurrent liabilities on our condensed consolidated balance sheets based on the timing of when the obligations are expected to be paid, which can vary due to certain country negotiations and regulations. As of September 30, 2022, we expect to pay approximately $34 million over the next 12 months. We believe that the reserves are adequate.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2022
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 or the weighted average cost method. Inventories consisted of the following: September 30, 2022 December 31, 2021 Finished products $ 612 $ 598 Work in process 542 565 Raw materials and supplies 240 256 Total 1,394 1,419 Decrease to LIFO cost (54) (46) Inventories $ 1,340 $ 1,373

Equity

Equity	9 Months Ended
	Sep. 30, 2022
Equity [Abstract]
Equity	Note 8. Equity Tangible Equity Unit (TEU) Offering On January 22, 2020, we completed our offering of 11 million, 5.00% TEUs. Total proceeds, net of issuance costs, were $528 million. Each TEU, which has a stated amount of $50, is comprised of a prepaid stock purchase contract (prepaid stock) and a senior amortizing note due February 1, 2023. Subsequent to issuance, each TEU may be legally separated into the two components. The prepaid stock is considered a freestanding financial instrument, indexed to Elanco common stock, and meets the conditions for equity classification. The value allocated to the prepaid stock is reflected net of issuance costs in additional paid-in capital. The value allocated to the senior amortizing notes is reflected in current portion of long-term debt on the condensed consolidated balance sheets. Issuance costs related to the amortizing notes are reflected as a reduction of the carrying amount and will be amortized through the maturity date using the effective interest rate method. The proceeds from the issuance were allocated to equity and debt based on the relative fair value of the respective components of each TEU as follows: Equity Component Debt Component Total Fair value per unit $ 42.80 $ 7.20 $ 50.00 Gross proceeds $ 471 $ 79 $ 550 Less: Issuance costs 19 3 22 Net proceeds $ 452 $ 76 $ 528 The senior amortizing notes have an aggregate principal amount of $79 million and bear interest at 2.75% per year. On each February 1, May 1, August 1, and November 1 until the maturity date, we pay equal quarterly cash installments of $0.6250 per each amortizing note with an initial principal amount of $7.2007 (except for the first installment payment of $0.6528 per amortizing note paid on May 1, 2020). Each installment constitutes a payment of interest and partial payment of principal, and in the aggregate is equivalent to 5.00% per year with respect to the $50 stated amount per TEU. Unless settled early at the holder’s or our election, each prepaid stock purchase contract will automatically settle on February 1, 2023 (the mandatory settlement date) for a number of shares of common stock per contract based on the average of the volume-weighted average trading prices during the 20 consecutive trading day period beginning on, and including the 21st scheduled trading day immediately preceding February 1, 2023 (applicable market value) with reference to the following settlement rates: Applicable Market Value Common Stock Issued Equal to or greater than $38.40 1.3021 shares (minimum settlement rate) Less than $38.40, but greater than $32.00 $50 divided by applicable market value Less than or equal to $32.00 1.5625 (maximum settlement rate)

Debt

Debt	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Debt	Note 9. Debt Long-term debt consisted of the following: September 30, 2022 December 31, 2021 Incremental Term Facility due 2025 (1) $ 175 $ — Incremental Term Facility due 2028 495 499 Incremental Term Facility due 2029 (2) 250 — Term Loan B due 2027 (3) 3,941 4,118 Revolving Credit Facility — 250 4.272% Senior Notes due 2023 (4) 344 750 4.900% Senior Notes due 2028 750 750 TEU Amortizing Notes due 2023 14 34 Unamortized debt issuance costs (68) (82) 5,901 6,319 Less current portion of long-term debt 394 294 Total long-term debt $ 5,507 $ 6,025 (1) In June 2022, we entered into an incremental assumption agreement with Bank of America, N.A. supplementing and amending our existing credit agreement dated August 1, 2020 relating to our senior secured credit facility. The incremental assumption agreement provides for a new incremental term facility with an aggregate principal amount of $175 million. The new incremental term facility bears interest at the Secured Overnight Financing Rate (Term SOFR), including a credit spread adjustment, plus 175 basis points and is payable in full on June 30, 2025. The proceeds were used to repay a portion of our outstanding obligations under our revolving credit facility. (2) In April 2022, we entered into an incremental assumption agreement with Farm Credit Mid-America, PCA supplementing and amending our existing credit agreement dated August 1, 2020 relating to our senior secured credit facility. The incremental assumption agreement provides for a new incremental term facility with an aggregate principal amount of $250 million maturing on April 19, 2029. The new incremental term facility bears interest at Term SOFR, including a credit spread adjustment, plus 175 basis points and will be payable in quarterly installments of principal and interest with a final balloon payment due on April 19, 2029. The proceeds were used to repay a portion of our outstanding obligations under our revolving credit facility. (3) In September 2022, we repaid indebtedness outstanding under our Term Loan B. We paid $75 million in cash, composed of principal and accrued interest, resulting in a debt extinguishment loss of approximately $2 million recognized in interest expense, net of capitalized interest in the condensed consolidated statements of operations. (4) In April 2022, we completed a tender offer and retired $406 million in aggregate principal amount of our 4.272% Senior Notes due August 28, 2023, resulting in a debt extinguishment loss of approximately $17 million recognized in interest expense, net of capitalized interest in the condensed consolidated statements of operations. The repayment was funded with proceeds received from a draw under our revolving credit facility. We were in compliance with all of our debt covenants as of September 30, 2022.

Financial Instruments and Fair

Financial Instruments and Fair Value	9 Months Ended
	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Financial Instruments and Fair Value	Note 10. Financial Instruments and Fair Value Financial instruments that are potentially subject to credit risk consist principally of trade receivables. We evaluate the creditworthiness of our customers on a regular basis, monitor economic conditions, and calculate allowances for estimated credit losses on our trade receivables on a quarterly basis using an expected credit loss model. We assess whether collectability is probable at the time of sale and on an ongoing basis. Collateral is generally not required. The risk associated with this concentration is mitigated by our ongoing credit-review procedures. A large portion of our cash is held by a few major financial institutions. We monitor the exposure with these institutions and do not expect any of these institutions to fail to meet their obligations. All highly liquid investments with a maturity of three months or less from the date of purchase are considered to be cash equivalents. The cost of these investments approximates fair value. We had investments without readily determinable fair values and equity method investments included in other noncurrent assets on our condensed consolidated balance sheets totaling $28 million and $22 million as of September 30, 2022 and December 31, 2021 , respectively. Unrealized net gains and losses on our investments for the three and nine months ended September 30, 2022 and 2021 were immaterial. The following table summarizes the fair value information at September 30, 2022 and December 31, 2021 for foreign exchange contract assets (liabilities), investments, and cash flow hedge assets (liabilities) measured at fair value on a recurring basis in the respective balance sheet line items, as well as long-term debt (including TEU amortizing notes) for which fair value is disclosed on a recurring basis: Fair Value Measurements Using Financial statement line item Carrying Quoted Prices in Active Markets for Identical Assets Significant Significant Fair September 30, 2022 Prepaid expenses and other - foreign exchange contracts not designated as hedging instruments $ 39 $ — $ 39 $ — $ 39 Prepaid expense and other - forward-starting interest rate contracts designated as cash flow hedges 3 — 3 — 3 Other noncurrent assets - forward-starting interest rate contracts designated as cash flow hedges 15 — 15 15 Other noncurrent assets - investments 10 10 — — 10 Other current liabilities - foreign exchange contracts not designated as hedging instruments (29) — (29) — (29) Long-term debt, including current portion (5,969) — (5,686) — (5,686) December 31, 2021 Prepaid expenses and other - foreign exchange contracts not designated as hedging instruments $ 19 $ — $ 19 $ — $ 19 Other noncurrent assets - forward-starting interest rate contracts designated as cash flow hedges 8 — 8 — 8 Other noncurrent assets - investments 13 13 — — 13 Other current liabilities - foreign exchange contracts not designated as hedging instruments (20) — (20) — (20) Long-term debt, including current portion (6,401) — (6,518) — (6,518) We determine our Level 2 fair value measurements based on a market approach using quoted market values or significant other observable inputs for identical or comparable assets or liabilities. Derivative Instruments and Hedging Activities We are exposed to market risks, such as changes in foreign currency exchange rates and interest rates. To manage the volatility related to these exposures, we have entered into various derivative transactions. We formally assess, designate and document, as a hedge of an underlying exposure, each qualifying derivative instrument that will be accounted for as an accounting hedge at inception. Additionally, we assess, both at inception and at least quarterly thereafter, whether the financial instruments used in the hedging transaction are effective at offsetting changes in either the fair values or cash flows of the underlying exposures. Derivative cash flows, with the exception of net investment hedges, are principally classified in the operating activities section of the condensed consolidated statements of cash flows, consistent with the underlying hedged item. Cash flows related to net investment hedges are classified in the investing activities section of the consolidated statements of cash flows. Our outstanding positions are discussed below. Derivatives not designated as hedges We may enter into foreign exchange forward or option contracts to reduce the effect of fluctuating currency exchange rates. These derivative financial instruments primarily offset exposures in the Euro, British pound, Swiss franc, Brazilian real, Australian dollar, Japanese yen, Canadian dollar, and Chinese yuan. Foreign currency derivatives used for hedging are put in place using the same or like currencies and duration as the underlying exposures and are recorded at fair value with the gain or loss recognized in other expense, net in the condensed consolidated statements of operations. Forward contracts generally have maturities not exceeding 12 months. At September 30, 2022 and December 31, 2021, we had outstanding foreign exchange contracts with aggregate notional amounts of $821 million and $1,212 million, respectively. The amount of net losses on derivative instruments not designated as hedging instruments, recorded in other expense, net were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Foreign exchange forward contracts (1) $ (5) $ (2) $ (20) $ (29) (1) These amounts were substantially offset in other expense, net by the effect of changing exchange rates on the underlying foreign currency exposures. Derivatives designated as hedges We are subject to interest rate risk with regard to our existing floating-rate debt, and we utilize interest rate swap contracts to mitigate the variability in cash flows by effectively converting the floating-rate debt into fixed-rate debt. We recognize any differences between the variable interest rate payments and the fixed interest rate settlements with the swap counterparties as an adjustment to interest expense, net of capitalized interest over the life of the swaps. We have designated these swaps as cash flow hedges and record them at fair value on the condensed consolidated balance sheets. Changes in the fair value of the hedges are recognized in other comprehensive income (loss). Fair value is estimated based on quoted market values of similar hedges and is classified as Level 2. Our outstanding forward-starting interest rate swaps have maturities ranging between 2023 and 2025 with aggregate notional amounts of $3,050 million and $3,800 million as of September 30, 2022 and December 31, 2021, respectively. The amounts of net gains on cash flow hedges recorded, net of tax, in other comprehensive income (loss), are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Forward-starting interest rate swaps $ 62 $ 4 $ 179 $ 52 During the three months ended September 30, 2022 and 2021, net gains on cash flow hedges recorded in other comprehensive income (loss) included gains of $75 million and $4 million, respectively, related to mark-to-market adjustments. During the nine months ended September 30, 2022 and 2021, net gains on cash flow hedges recorded in other comprehensive income (loss) included gains of $218 million and $52 million, respectively, related to mark-to-market adjustments. In April 2022 and September 2022, we took advantage of market opportunities to restructure our interest rate swap portfolio. We unwound the existing swaps and simultaneously entered into new agreements with the same notional amounts and covering the same tenors. As a result, we received cash settlements of $132 million and $75 million in the respective periods. These gains were initially recognized in accumulated other comprehensive loss and will be reclassified to interest expense, net of capitalized interest over the period during which the related interest payments will be made. During the three and nine months ended September 30, 2022, we reclassified $13 million and $22 million, respectively, of gains relating to our terminated interest rate swaps from accumulated other comprehensive loss to interest expense, net of capitalized interest. Additionally, as a result of the April 2022 interest rate swap settlement, other comprehensive income (loss) for the nine months ended September 30, 2022 included a $17 million reclassification of a stranded tax benefit from accumulated other comprehensive loss, based on our policy to reclassify income tax effects from accumulated other comprehensive loss using the portfolio approach. Other than the reclassification of the stranded tax benefit, there was no tax effect recorded in relation to our cash flow hedges for the three and nine months ended September 30, 2022 and 2021 after the application of the U.S. valuation allowance. See Note 11: Income Taxes for further discussion. During the three months ended September 30, 2022 and 2021, we reclassified $2 million and $8 million, respectively, of net losses into interest expense, net of capitalized interest in our condensed consolidated statements of operations. During the nine months ended September 30, 2022 and 2021, we reclassified $12 million and $22 million, respectively, of net losses into interest expense. Over the next 12 months, we expect to reclassify a gain of $106 million, which includes $103 million relating to the interest rate swap settlements, to interest expense, net of capitalized interest.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Note 11. Income Taxes Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income tax expense (benefit) $ 7 $ (26) $ 34 $ (71) Effective tax rate (17.1) % 20.0 % 315.6 % 15.9 % We were 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 our initial public offering (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. The U.S. examination of tax years 2016 to 2018 began in the fourth quarter of 2019 and remains ongoing. The resolution of this audit period will likely extend beyond the next 12 months. For the three and nine months ended September 30, 2022, we recognized income tax expense of $7 million and $34 million, respectively. Our effective tax rate of (17.1)% and 315.6%, respectively, differs from the statutory income tax rate largely due to changes in earnings mix between periods resulting in projected losses in the U.S. and projected earnings outside of the U.S. The U.S. federal and state jurisdictions are subject to valuation allowances. Income tax expense was partially offset by beneficial net foreign currency gains, which are nontaxable in certain tax jurisdictions outside of the U.S. The income tax expense for the nine months ended September 30, 2022 was partially offset by the $17 million income tax benefit reclassified from accumulated other comprehensive loss due to the termination of interest rate swaps during the period and net foreign currency gains, which are nontaxable in certain tax jurisdictions outside of the U.S. For the three and nine months ended September 30, 2021, we recognized an income tax benefit of $26 million and $71 million, respectively. For the three months ended September 30, 2021, our effective tax rate of 20.0% differs from the statutory income tax rate primarily due to preliminary accounting for the acquisition of KindredBio, which caused a partial release of the U.S. federal valuation allowance, as well as profits being located in jurisdictions with higher statutory tax rates. For the nine months ended September 30, 2021, our effective tax rate of 15.9% differs from the statutory income tax rate primarily because the U.S. federal and state jurisdictions are currently generating losses that are subject to valuation allowances.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 12. Commitments and Contingencies Legal Matters We are party to various legal actions in the normal course of business. We are not currently subject to a significant claim other than the lawsuits noted below. On May 20, 2020, a shareholder class action lawsuit captioned Hunter v. Elanco Animal Health Inc., et al. was filed in the United States District Court for the Southern District of Indiana (the Court) against Elanco and certain executives. On September 3, 2020, the Court appointed a lead plaintiff, and on November 9, 2020, the lead plaintiff filed an amended complaint adding additional claims against Elanco, certain executives, and other individuals. The lawsuit alleges, in part, that Elanco and certain of its executives made materially false and/or misleading statements and/or failed to disclose certain facts about Elanco’s supply chain, inventory, revenue and projections. The lawsuit seeks unspecified monetary damages and purports to represent purchasers of Elanco securities between September 30, 2018 and May 6, 2020, and purchasers of Elanco common stock issued in connection with Elanco's acquisition of Aratana. We filed a motion to dismiss on January 13, 2021. On August 17, 2022, the Court issued an order granting our motion to dismiss the case without prejudice. On October 14, 2022, the plaintiffs filed a motion for leave to amend the complaint, and we intend to oppose the plaintiffs' motion. We believe the claims made in the case are meritless, and we intend to vigorously defend our position. The process of resolving these matters is inherently uncertain and may develop over an extended period of time; therefore, at this time, the ultimate resolution cannot be predicted. On October 16, 2020, a shareholder class action lawsuit captioned Saffron Capital Corporation v. Elanco Animal Health Inc., et al. was filed in the Marion Superior Court of Indiana against Elanco, certain executives, and other individuals. On December 23, 2020, the plaintiffs filed an amended complaint adding an additional plaintiff. The lawsuit alleges, in part, that Elanco and certain of its executives made materially false and/or misleading statements and/or failed to disclose certain facts about Elanco’s relationships with third party distributors and revenue attributable to those distributors within the registration statement on Form S-3 dated January 21, 2020 and accompanying prospectus filed in connection with Elanco’s public offering which closed on or about January 27, 2020. The lawsuit seeks unspecified monetary damages and purports to represent purchasers of Elanco common stock or 5.00% TEUs issued in connection with the public offering. This case was previously stayed in deference to Hunter v. Elanco Animal Health Inc . On October 24, 2022, we filed a motion to dismiss. We believe the claims made in the case are meritless, and we intend to vigorously defend our position. The process of resolving these matters is inherently uncertain and may develop over an extended period of time; therefore, at this time, the ultimate resolution cannot be predicted. Claims seeking actual damages, injunctive relief, and/or restitution for allegedly deceptive marketing have been made against Elanco Animal Health Inc. and Bayer HealthCare LLC, along with other Elanco and Bayer entities, arising out of the use of Seresto™ , a non-prescription flea and tick collar for cats and dogs. During 2021, putative class action lawsuits were filed in federal courts in the U.S. alleging that the Seresto collars contain pesticides that can cause serious injury and death to cats and/or dogs wearing the product. The cases mention the existence of incident reports involving humans, but no plaintiff has claimed personal harm from the product. In August 2021, the lawsuits were consolidated by the Judicial Panel on Multidistrict Litigation, and the cases were transferred to the Northern District of Illinois. We are vigorously defending these lawsuits. Further, in March 2021, a U.S. House of Representatives subcommittee chair requested that Elanco produce certain documents and information related to the Seresto collar and further made a request to temporarily recall Seresto collars from the market. On June 15, 2022, the subcommittee held a hearing at which our President and Chief Executive Officer (CEO) testified. During and after the hearing, the subcommittee chair repeated his request that Elanco voluntarily recall the collars and also requested that the Environmental Protection Agency (EPA) commence administrative proceedings that would allow the EPA to remove Seresto from the market. Seresto is a pesticide registered with the EPA. A non-profit organization submitted a petition to the EPA requesting that the agency take action to cancel Seresto’s pesticide registration and suspend the registration pending cancellation. The EPA is considering this petition and asked for public comment. We submitted a comment to the EPA supporting the safety profile of Seresto . Data and scientific evaluation used during the product registration process and through pharmacovigilance review supports the product’s positive safety profile and efficacy. Therefore, we believe no removal, recall, or cancellation of the pesticide registration is warranted, nor has it been suggested by any regulatory agency. We continue to stand behind the safety profile for Seresto , and it remains available to consumers globally. In the third quarter of 2019, Tevra Brands, LLC (Tevra) filed a complaint in the U.S. District Court of the Northern District of California, alleging that Bayer Animal Health (acquired by us in August 2020) had been involved in unlawful exclusive dealing and tying of its flea and tick products Advantage , Advantix , and Seresto and maintained a monopoly in the market. The complaint was amended in March 2020 and then dismissed in September 2020 with leave to amend. A second amended complaint was filed in March 2021 and realleges claims of unlawful exclusive dealing related to Advantage and Advantix and monopoly maintenance. A motion to dismiss the second amended complaint was denied in January 2022. Tevra’s demands include both actual and treble damages. We intend to defend our position vigorously. The process of resolving these matters is inherently uncertain and may develop over an extended period of time; therefore, at this time, the ultimate resolution cannot be predicted. We are party to various other 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. If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. We accrue for liability claims to the extent that it is probable we will incur a loss and we can formulate a reasonable estimate of the costs. As of September 30, 2022 and December 31, 2021, we had no material liabilities established related to litigation as there were no significant claims which were probable and estimable. We are not currently subject to a significant claim other than the lawsuits noted above. Regulatory Matters On July 1, 2021, we received a subpoena from the SEC relating to our channel inventory and sales practices prior to mid-2020. We have cooperated in providing documents and information to the SEC and will continue to do so. Management believes that its actions were appropriate. Other Commitments As of September 30, 2022, we have a lease commitment that has not yet commenced for our new corporate headquarters in Indianapolis, Indiana. Total minimum lease payments are estimated to be approximately $378 million over a term of 25 years, excluding extensions. The increase in estimated minimum lease payments in comparison to prior periods is primarily due to higher expected construction and debt costs. Final lease payments may vary depending on the actual cost of certain construction activities. Lease commencement is expected in 2025.

Geographic Information

Geographic Information	9 Months Ended
	Sep. 30, 2022
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 pets and farm animals. Consistent with our operational structure, our 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 costs/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 AviPro™ , Baytril™ , Cydectin™ , Catosal™ , Denagard™ , Maxiban™ , Rumensin™ , Pulmotil™ , and other products for livestock and poultry, as well as Advantage™ , Advantix™ , Advocate™ (collectively referred to as the Advantage Family ), Credelio™ , Duramune™ , Galliprant™ , Interceptor™ Plus , Seresto , Trifexis™ , and other products for pets. We have a single customer that accounted for 12% and 11% of revenue for the three months ended September 30, 2022 and 2021, respectively, and 11% and 9% of revenue for the nine months ended September 30, 2022 and 2021, respectively. Product sales with this customer resulted in accounts receivable of $80 million and $74 million as of September 30, 2022 and December 31, 2021, 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue United States $ 475 $ 507 $ 1,537 $ 1,621 International 553 624 1,893 2,031 Revenue $ 1,028 $ 1,131 $ 3,430 $ 3,652

Retirement Benefits

Retirement Benefits	9 Months Ended
	Sep. 30, 2022
Retirement Benefits [Abstract]
Retirement Benefits	Note 14. Retirement Benefits The following table summarizes net periodic benefit cost (income) relating to our defined benefit pension plans Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Service cost $ 4 $ 4 $ 11 $ 14 Interest cost 1 1 3 2 Expected return on plan assets (2) (2) (5) (5) Amortization of prior service cost (1) (1) (3) (5) Amortization of net actuarial loss — — — 1 Net curtailments and settlements (Note 6) — (9) — (26) Net periodic benefit cost (income) $ 2 $ (7) $ 6 $ (19) The components of net periodic benefit cost (income) other than service cost and net curtailments and settlements are included in other expense, net in our condensed consolidated statements of operations. Net curtailments and settlements are included in asset impairment, restructuring and other special charges in our condensed consolidated statements of operations.

Loss Per Share

Loss Per Share	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Loss Per Share	Note 15. Loss Per Share We compute basic earnings (loss) per share by dividing net income (loss) available to common shareholders by the actual weighted average number of common shares outstanding for the reporting period. Elanco has variable common stock equivalents relating to certain equity awards in stock-based compensation arrangements and the TEU prepaid stock purchase contracts (see Note 8: Equity for further discussion). Diluted earnings per share reflects the potential dilution that could occur if holders of the unvested equity awards and unsettled TEUs converted their holdings into common stock. The weighted average number of potentially dilutive shares outstanding is calculated using the treasury stock method. Potential common shares that would have the effect of increasing diluted earnings per share (or reducing loss per share) are considered to be anti-dilutive and as such, these shares are not included in the calculation of diluted earnings (loss) per share. Basic and diluted loss per share are calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net loss available to common shareholders $ (49) $ (104) $ (23) $ (375) Determination of shares: Weighted average common shares outstanding 488.4 487.3 488.3 487.1 Assumed conversion of dilutive common stock equivalents (1) — — — — Diluted weighted average shares outstanding 488.4 487.3 488.3 487.1 Loss per share (2) Basic $ (0.10) $ (0.21) $ (0.05) $ (0.77) Diluted $ (0.10) $ (0.21) $ (0.05) $ (0.77) (1) For periods with a reported net loss, dilutive common stock equivalents are not assumed to have been issued since their effect is anti-dilutive. As a result, basic and diluted weighted average shares are the same, causing diluted net loss per share to be equivalent to basic net loss per share. For the three months ended September 30, 2022 and 2021, approximately 4.4 million and 3.7 million, respectively, of potential common shares were excluded from the calculation of diluted loss per share because their effect was anti-dilutive. For the nine months ended September 30, 2022 and 2021, approximately 2.6 million and 3.9 million, respectively, of potential common shares were excluded from the calculation of diluted loss per share because their effect was anti-dilutive. (2) Due to rounding conventions, loss per share may not recalculate precisely based on the amounts presented within this table.

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the U.S. Securities and Exchange Commission (SEC) requirements for interim reporting. As permitted under those rules, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. (GAAP) have been condensed or omitted. The information included in this Form 10-Q should be read in conjunction with our consolidated financial statements and accompanying notes for the year ended December 31, 2021 included in our Form 10-K filed with the SEC on February 28, 2022 ( 2021 Form 10-K ). In addition, results for interim periods should not be considered indicative of results for any other interim period or for the full year ending December 31, 2022 or any other future period. In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for fair presentation of the results of operations for the periods shown. In preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates. Certain reclassifications of prior year information have been made to conform to the current year's presentation.
Goodwill	Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. We evaluate goodwill for impairment at least annually and when certain qualitative impairment indicators are present. When required, a comparison of fair value to the carrying amount of our single reporting unit is performed to determine the amount of any impairment. We begin by assessing qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying value. Based on that qualitative assessment, if we conclude that it is more likely than not that the fair value of our single reporting unit is less than its carrying value, we conduct a quantitative goodwill impairment test, which involves comparing the estimated fair value of our single reporting unit with its carrying value, including goodwill. We estimate the fair value of our single reporting unit using a combination of the income and market approach. If the carrying value of the reporting unit exceeds its estimated fair value, we recognize an impairment loss for the difference. During the third quarter of 2022, a significant change in our market capitalization relative to our book value, among other factors, triggered a quantitative goodwill impairment test. As of September 30, 2022, our single reporting unit was tested for impairment using the quantitative approach described above, resulting in an estimated fair value that exceeded the carrying amount by more than 20%. Therefore, no impairment existed with respect to our goodwill.
Implementation of New Financial Accounting Pronouncements	The following table provides a brief description of an accounting standard that was effective January 1, 2022 and was adopted on that date: Standard Description Effect on the financial statements or other significant matters ASU 2021-10, Government Assistance (Topic 832) The amendments in this update require annual disclosure of transactions with governments that are accounted for by applying a grant or contribution model. The new pronouncement requires entities to provide information about the nature, terms and conditions associated with the transactions and the financial statement line items affected. The adoption of this guidance did not have a material impact on our consolidated financial statements. The following table provides a brief description of an accounting standard that is applicable to us but has not yet been adopted: Standard Description Effective Date Effect on the financial statements or other significant matters ASU 2020-04, Reference rate reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting; ASU 2021-01, Reference Rate Reform (Topic 848): Scope ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2021-01 clarifies the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions. Adoption of the guidance is optional and effective as of March 12, 2020 through December 31, 2022. Adoption is permitted at any time during the period on a prospective basis. Our current credit facilities reference London Inter-Bank Offered Rate (LIBOR) as a benchmark rate. The underlying credit agreements include provisions which outline criteria for establishing a consistent replacement benchmark rate in the event that LIBOR is discontinued. Therefore, it is unlikely that we will need to adopt this optional guidance. However, we will continue to evaluate the impact as reference rate reform activities occur.

Implementation of New Financi_2

Implementation of New Financial Accounting Pronouncements (Tables)	9 Months Ended
	Sep. 30, 2022
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, 2022 and was adopted on that date: Standard Description Effect on the financial statements or other significant matters ASU 2021-10, Government Assistance (Topic 832) The amendments in this update require annual disclosure of transactions with governments that are accounted for by applying a grant or contribution model. The new pronouncement requires entities to provide information about the nature, terms and conditions associated with the transactions and the financial statement line items affected. The adoption of this guidance did not have a material impact on our consolidated financial statements. The following table provides a brief description of an accounting standard that is applicable to us but has not yet been adopted: Standard Description Effective Date Effect on the financial statements or other significant matters ASU 2020-04, Reference rate reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting; ASU 2021-01, Reference Rate Reform (Topic 848): Scope ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2021-01 clarifies the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions. Adoption of the guidance is optional and effective as of March 12, 2020 through December 31, 2022. Adoption is permitted at any time during the period on a prospective basis. Our current credit facilities reference London Inter-Bank Offered Rate (LIBOR) as a benchmark rate. The underlying credit agreements include provisions which outline criteria for establishing a consistent replacement benchmark rate in the event that LIBOR is discontinued. Therefore, it is unlikely that we will need to adopt this optional guidance. However, we will continue to evaluate the impact as reference rate reform activities occur.

Revenue (Tables)

Revenue (Tables)	9 Months Ended
	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Summary of Activity in Sales Rebates and Discounts Liability	The following table summarizes the activity in our global sales rebates and discounts liability: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance $ 284 $ 303 $ 316 $ 295 Reduction of revenue 169 163 524 516 Payments (143) (146) (525) (489) Foreign currency translation adjustments (12) (4) (17) (6) Ending balance $ 298 $ 316 $ 298 $ 316
Summary of Disaggregation of Revenue	The following table summarizes our revenue disaggregated by product category: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Pet Health $ 471 $ 527 $ 1,722 $ 1,857 Farm Animal: Cattle 227 250 722 735 Poultry 176 179 529 536 Swine 95 110 284 346 Aqua 47 44 132 111 Total Farm Animal 545 583 1,667 1,728 Contract Manufacturing (1) 12 21 41 67 Revenue $ 1,028 $ 1,131 $ 3,430 $ 3,652

Acquisitions, Divestitures an_2

Acquisitions, Divestitures and Other Arrangements (Tables)	9 Months Ended
	Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]
Summary of Recognized Identified Assets Acquired and Liabilities Assumed	The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date: Estimated Fair Value at August 27, 2021 Cash and cash equivalents $ 31 Other net working capital 13 Property and equipment 33 Intangible assets, primarily acquired in-process research and development (IPR&D) 333 Deferred income taxes, net (30) Total identifiable net assets 380 Goodwill 35 Settlement of liability related to previous license agreement 29 Total consideration transferred $ 444
Summary of Assets and Liabilities Held for Sale	Assets considered held for sale in connection with the Speke divestiture were included in the respective line items on our condensed consolidated balance sheets as follows: December 31, 2021 Inventories $ 31 Property and equipment, net 50 Total assets held for sale $ 81

Asset Impairment, Restructuri_2

Asset Impairment, Restructuring and Other Special Charges (Tables)	9 Months Ended
	Sep. 30, 2022
Restructuring and Related Activities [Abstract]
Summary of Asset Impairment, Restructuring and Other Special Charges	Components of asset impairment, restructuring and other special charges are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Restructuring charges (credits): Severance and other costs (1) $ — $ (2) $ (9) $ 26 Facility exit costs — — 2 — Acquisition related charges: Transaction and integration costs (2) 27 30 77 141 Non-cash and other items: Asset impairment (3) — 50 59 63 Asset write-down (4) (1) 6 27 275 Net periodic benefit income (Note 14) — (9) — (26) Settlements and other (5) — 36 2 39 Total expense $ 26 $ 111 $ 158 $ 518 (1) 2022 credits primarily relate to adjustments resulting from the reversal of severance accruals associated with the November 2021 program. For the nine months ended September 30, 2021, charges primarily related to the restructuring program announced and initiated in January 2021. These costs were partially offset by the reversal of severance accruals associated with the January 2021 and September 2020 programs during the period. (2) Transaction costs represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services. Integration costs represent internal and external incremental costs directly related to integrating acquired businesses, including the acquisitions of KindredBio and Bayer Animal Health (e.g., expenditures for consulting, system and process integration, and product transfers), as well as independent company stand-up costs related to the implementation of new systems, programs, and processes. (3) 2022 includes a charge of $59 million related to the expensing of an IPR&D asset with no alternative future use licensed from BexCaFe during the second quarter. See Note 5: Acquisitions, Divestitures and Other Arrangements for further discussion. 2021 amounts represent the impact of adjustments to the fair value of certain IPR&D assets that were subject to product rationalization. The asset impairment charge during the three months ended September 30, 2021 reflects a decision by management to terminate an IPR&D project and fully impair the related asset, which was associated with a farm animal parasiticide. The decision was prompted by unfavorable efficacy results observed during the quarter. (4) 2022 amounts primarily include the finalization of the write-down charge upon the final sale of the Speke manufacturing site. Asset write-down charges recorded in 2021 included the initial adjustments recorded to write down the Shawnee and Speke assets classified as held for sale as of June 30, 2021 to an amount equal to estimated fair value less costs to sell, as well as adjustments to values of assets sold in relation to the Shawnee manufacturing site sold on August 1, 2021 and assets classified as held for sale in relation to the Speke manufacturing site during the three months ended September 30, 2021. See Note 5: Acquisitions, Divestitures and Other Arrangements for further discussion. Also included are charges recorded to write down assets in Belford Roxo, Brazil; Basel, Switzerland; Cuxhaven, Germany; and Manukau, New Zealand that were classified as held and used to their current fair value. These charges were recorded in connection with announced restructuring programs. (5) Amounts recorded during the nine months ended September 30, 2022 represent a $2 million measurement period adjustment to the charge associated with the settlement of a liability for future royalty and milestone payments triggered in connection with our acquisition of KindredBio. See Note 5: Acquisitions, Divestitures and Other Arrangements for further discussion. Amounts recorded during the three and nine months ended September 30, 2021 include the initial charge associated with the settlement of the liability for future royalty and milestone payments triggered in connection with our acquisition of KindredBio, accounting and advisory fees related to the sale of our manufacturing site in Shawnee, and an $8 million charge related to a litigation settlement for a matter that originated prior to our acquisition of Bayer Animal Health. The amount for the nine months ended September 30, 2021 also includes the gain recorded on the divestiture of an early-stage IPR&D asset acquired as part of the Bayer Animal Health acquisition.
Summary of Activity in Reserves	The following table summarizes the activity in our reserves established in connection with restructuring activities: Severance Balance at December 31, 2020 $ 130 Charges 41 Reserve adjustments (15) Cash paid (94) Foreign currency translation adjustments (1) Balance at September 30, 2021 $ 61 Balance at December 31, 2021 $ 126 Reserve adjustments (9) Cash paid (71) Foreign currency translation adjustments (5) Balance at September 30, 2022 $ 41

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2022
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories consisted of the following: September 30, 2022 December 31, 2021 Finished products $ 612 $ 598 Work in process 542 565 Raw materials and supplies 240 256 Total 1,394 1,419 Decrease to LIFO cost (54) (46) Inventories $ 1,340 $ 1,373

Equity (Tables)

Equity (Tables)	9 Months Ended
	Sep. 30, 2022
Equity [Abstract]
Schedule of Stockholders Equity	The proceeds from the issuance were allocated to equity and debt based on the relative fair value of the respective components of each TEU as follows: Equity Component Debt Component Total Fair value per unit $ 42.80 $ 7.20 $ 50.00 Gross proceeds $ 471 $ 79 $ 550 Less: Issuance costs 19 3 22 Net proceeds $ 452 $ 76 $ 528 Unless settled early at the holder’s or our election, each prepaid stock purchase contract will automatically settle on February 1, 2023 (the mandatory settlement date) for a number of shares of common stock per contract based on the average of the volume-weighted average trading prices during the 20 consecutive trading day period beginning on, and including the 21st scheduled trading day immediately preceding February 1, 2023 (applicable market value) with reference to the following settlement rates: Applicable Market Value Common Stock Issued Equal to or greater than $38.40 1.3021 shares (minimum settlement rate) Less than $38.40, but greater than $32.00 $50 divided by applicable market value Less than or equal to $32.00 1.5625 (maximum settlement rate)

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Schedule of Long-term Debt	Long-term debt consisted of the following: September 30, 2022 December 31, 2021 Incremental Term Facility due 2025 (1) $ 175 $ — Incremental Term Facility due 2028 495 499 Incremental Term Facility due 2029 (2) 250 — Term Loan B due 2027 (3) 3,941 4,118 Revolving Credit Facility — 250 4.272% Senior Notes due 2023 (4) 344 750 4.900% Senior Notes due 2028 750 750 TEU Amortizing Notes due 2023 14 34 Unamortized debt issuance costs (68) (82) 5,901 6,319 Less current portion of long-term debt 394 294 Total long-term debt $ 5,507 $ 6,025 (1) In June 2022, we entered into an incremental assumption agreement with Bank of America, N.A. supplementing and amending our existing credit agreement dated August 1, 2020 relating to our senior secured credit facility. The incremental assumption agreement provides for a new incremental term facility with an aggregate principal amount of $175 million. The new incremental term facility bears interest at the Secured Overnight Financing Rate (Term SOFR), including a credit spread adjustment, plus 175 basis points and is payable in full on June 30, 2025. The proceeds were used to repay a portion of our outstanding obligations under our revolving credit facility. (2) In April 2022, we entered into an incremental assumption agreement with Farm Credit Mid-America, PCA supplementing and amending our existing credit agreement dated August 1, 2020 relating to our senior secured credit facility. The incremental assumption agreement provides for a new incremental term facility with an aggregate principal amount of $250 million maturing on April 19, 2029. The new incremental term facility bears interest at Term SOFR, including a credit spread adjustment, plus 175 basis points and will be payable in quarterly installments of principal and interest with a final balloon payment due on April 19, 2029. The proceeds were used to repay a portion of our outstanding obligations under our revolving credit facility. (3) In September 2022, we repaid indebtedness outstanding under our Term Loan B. We paid $75 million in cash, composed of principal and accrued interest, resulting in a debt extinguishment loss of approximately $2 million recognized in interest expense, net of capitalized interest in the condensed consolidated statements of operations.

Financial Instruments and Fai_2

Financial Instruments and Fair Value (Tables)	9 Months Ended
	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Summary of Fair Value Information	The following table summarizes the fair value information at September 30, 2022 and December 31, 2021 for foreign exchange contract assets (liabilities), investments, and cash flow hedge assets (liabilities) measured at fair value on a recurring basis in the respective balance sheet line items, as well as long-term debt (including TEU amortizing notes) for which fair value is disclosed on a recurring basis: Fair Value Measurements Using Financial statement line item Carrying Quoted Prices in Active Markets for Identical Assets Significant Significant Fair September 30, 2022 Prepaid expenses and other - foreign exchange contracts not designated as hedging instruments $ 39 $ — $ 39 $ — $ 39 Prepaid expense and other - forward-starting interest rate contracts designated as cash flow hedges 3 — 3 — 3 Other noncurrent assets - forward-starting interest rate contracts designated as cash flow hedges 15 — 15 15 Other noncurrent assets - investments 10 10 — — 10 Other current liabilities - foreign exchange contracts not designated as hedging instruments (29) — (29) — (29) Long-term debt, including current portion (5,969) — (5,686) — (5,686) December 31, 2021 Prepaid expenses and other - foreign exchange contracts not designated as hedging instruments $ 19 $ — $ 19 $ — $ 19 Other noncurrent assets - forward-starting interest rate contracts designated as cash flow hedges 8 — 8 — 8 Other noncurrent assets - investments 13 13 — — 13 Other current liabilities - foreign exchange contracts not designated as hedging instruments (20) — (20) — (20) Long-term debt, including current portion (6,401) — (6,518) — (6,518)
Summary of Gain (loss), Net of Tax	The amount of net losses on derivative instruments not designated as hedging instruments, recorded in other expense, net were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Foreign exchange forward contracts (1) $ (5) $ (2) $ (20) $ (29) (1) These amounts were substantially offset in other expense, net by the effect of changing exchange rates on the underlying foreign currency exposures. The amounts of net gains on cash flow hedges recorded, net of tax, in other comprehensive income (loss), are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Forward-starting interest rate swaps $ 62 $ 4 $ 179 $ 52

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Schedule of Provision for Taxes on Income	Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income tax expense (benefit) $ 7 $ (26) $ 34 $ (71) Effective tax rate (17.1) % 20.0 % 315.6 % 15.9 %

Geographic Information (Tables)

Geographic Information (Tables)	9 Months Ended
	Sep. 30, 2022
Segment Reporting [Abstract]
Schedule of Selected Geographic Area Information	Selected geographic area information was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue United States $ 475 $ 507 $ 1,537 $ 1,621 International 553 624 1,893 2,031 Revenue $ 1,028 $ 1,131 $ 3,430 $ 3,652

Retirement Benefits (Tables)

Retirement Benefits (Tables)	9 Months Ended
	Sep. 30, 2022
Retirement Benefits [Abstract]
Summary of Net Benefit Costs	The following table summarizes net periodic benefit cost (income) relating to our defined benefit pension plans Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Service cost $ 4 $ 4 $ 11 $ 14 Interest cost 1 1 3 2 Expected return on plan assets (2) (2) (5) (5) Amortization of prior service cost (1) (1) (3) (5) Amortization of net actuarial loss — — — 1 Net curtailments and settlements (Note 6) — (9) — (26) Net periodic benefit cost (income) $ 2 $ (7) $ 6 $ (19)

Loss Per Share (Tables)

Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Schedule of Basic And Diluted Loss	Basic and diluted loss per share are calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net loss available to common shareholders $ (49) $ (104) $ (23) $ (375) Determination of shares: Weighted average common shares outstanding 488.4 487.3 488.3 487.1 Assumed conversion of dilutive common stock equivalents (1) — — — — Diluted weighted average shares outstanding 488.4 487.3 488.3 487.1 Loss per share (2) Basic $ (0.10) $ (0.21) $ (0.05) $ (0.77) Diluted $ (0.10) $ (0.21) $ (0.05) $ (0.77) (1) For periods with a reported net loss, dilutive common stock equivalents are not assumed to have been issued since their effect is anti-dilutive. As a result, basic and diluted weighted average shares are the same, causing diluted net loss per share to be equivalent to basic net loss per share. For the three months ended September 30, 2022 and 2021, approximately 4.4 million and 3.7 million, respectively, of potential common shares were excluded from the calculation of diluted loss per share because their effect was anti-dilutive. For the nine months ended September 30, 2022 and 2021, approximately 2.6 million and 3.9 million, respectively, of potential common shares were excluded from the calculation of diluted loss per share because their effect was anti-dilutive. (2) Due to rounding conventions, loss per share may not recalculate precisely based on the amounts presented within this table.

Background (Details)

Background (Details)	Sep. 30, 2022 country
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of brands in diverse portfolio	200
Number of countries in which entity operates (more than)	90

Basis of Presentation and Sum_3

Basis of Presentation and Summary of Significant Accounting Policies (Details)	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Fair value in excess of carrying amount	20%

Revenue - Narrative (Details)

Revenue - Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Geographic Concentration Risk | Contract With Customer Liability | United States
Concentration Risk [Line Items]
Concentration risk			76%	72%
Product Return Concentration Risk | Net Revenue | Global Customers
Concentration Risk [Line Items]
Concentration risk	1%	2%	1%	1%

Revenue - Activity in Sales Reb

Revenue - Activity in Sales Rebates and Discounts Liability (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Change In Contract With Customer, Liability [Roll Forward]
Beginning balance	$ 284	$ 303	$ 316	$ 295
Reduction of revenue	169	163	524	516
Payments	(143)	(146)	(525)	(489)
Foreign currency translation adjustments	(12)	(4)	(17)	(6)
Ending balance	$ 298	$ 316	$ 298	$ 316

Revenue - Disaggregation of Rev

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenue	$ 1,028	$ 1,131	$ 3,430	$ 3,652
Pet Health
Disaggregation of Revenue [Line Items]
Revenue	471	527	1,722	1,857
Farm Animal
Disaggregation of Revenue [Line Items]
Revenue	545	583	1,667	1,728
Cattle
Disaggregation of Revenue [Line Items]
Revenue	227	250	722	735
Poultry
Disaggregation of Revenue [Line Items]
Revenue	176	179	529	536
Swine
Disaggregation of Revenue [Line Items]
Revenue	95	110	284	346
Aqua
Disaggregation of Revenue [Line Items]
Revenue	47	44	132	111
Contract Manufacturing
Disaggregation of Revenue [Line Items]
Revenue	$ 12	$ 21	$ 41	$ 67

Acquisitions, Divestitures an_3

Acquisitions, Divestitures and Other Arrangements - Narrative (Details) $ / shares in Units, $ in Millions			3 Months Ended	9 Months Ended
	Aug. 27, 2021 USD ($) $ / shares	Aug. 01, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Jun. 09, 2022 USD ($)	Feb. 01, 2022 USD ($)	Dec. 31, 2021 USD ($) employee	May 05, 2021 USD ($)
Business Acquisition [Line Items]
Contract with customer, asset, before allowance for credit loss							$ 55
Proceeds from site divestitures				$ 11	$ 0
Liabilities			$ 8,203	8,203				$ 8,945
Variable Interest Entity, Primary Beneficiary | BexCaFe, LLC
Business Acquisition [Line Items]
Liabilities						$ 59
Payment on agreement			10
Variable Interest Entity, Primary Beneficiary | BexCaFe, LLC | Future Milestone Payments And Sales Royalties
Business Acquisition [Line Items]
Liabilities						49
Intangible assets, primarily acquired in-process research and development (IPR&D) | Variable Interest Entity, Primary Beneficiary | BexCaFe, LLC
Business Acquisition [Line Items]
Finite-lived intangible assets						$ 59
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
Business Acquisition [Line Items]
Number of employees transferred | employee								600
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Microbiome R&D Platform Carve-Out
Business Acquisition [Line Items]
Gain on disposal				3
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Shawnee
Business Acquisition [Line Items]
Cash received in agreement to divest		$ 78
Duration over which proceeds will be received		3 years
Proceeds from site divestitures			$ 11	$ 11
KindredBio
Business Acquisition [Line Items]
Common stock price (usd per share) | $ / shares	$ 9.25
Cash paid in acquisition	$ 444
Settlement of liability related to previous license agreement									$ 29

Acquisitions, Divestitures an_4

Acquisitions, Divestitures and Other Arrangements - Amounts Recognized for Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021	Aug. 27, 2021
Business Acquisition [Line Items]
Goodwill	$ 5,716	$ 6,172
KindredBio
Business Acquisition [Line Items]
Cash and cash equivalents			$ 31
Other net working capital			13
Property and equipment			33
Intangible assets, primarily acquired in-process research and development (IPR&D)			333
Deferred income taxes, net			(30)
Total identifiable net assets			380
Goodwill			35
Settlement of liability related to previous license agreement			29
Total consideration transferred			$ 444

Acquisitions, Divestitures an_5

Acquisitions, Divestitures and Other Arrangements - Assets and Liabilities Held for Sale (Details) - Worldwide rights to Osurnia and U.S. rights to Capstar - Held for Sale $ in Millions	Dec. 31, 2021 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Inventories	$ 31
Property and equipment, net	50
Total assets held for sale	$ 81

Asset Impairment, Restructuri_3

Asset Impairment, Restructuring and Other Special Charges - Narrative (Details) $ in Millions	1 Months Ended		3 Months Ended	9 Months Ended		12 Months Ended
	Nov. 30, 2021 position	Jan. 31, 2021 position	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2021 restructuring_program
Restructuring Cost and Reserve [Line Items]
Number of restructuring programs announced | restructuring_program							2
Expected payment term				12 months
Forecast
Restructuring Cost and Reserve [Line Items]
Cash paid						$ 34
January 2021 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Expected number of positions eliminated | position		315
Restructuring costs			$ 1		$ 44
November 2021 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Expected number of positions eliminated | position	380
Restructuring reserve, accrual adjustment				$ 9

Asset Impairment, Restructuri_4

Asset Impairment, Restructuring and Other Special Charges - Component of Asset Impairment, Restructuring and Other Special Charges (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Restructuring charges (credits):
Severance and other costs	$ 0	$ (2)	$ (9)	$ 26
Facility exit costs	0	0	2	0
Acquisition related charges:
Transaction and integration costs	27	30	77	141
Non-cash and other items:
Asset impairment	0	50	59	63
Asset write-down	(1)	6	27	275
Net periodic benefit income	0	(9)	0	(26)
Settlements and other	0	36	2	39
Total expense	26	111	158	518
Litigation settlement charges		$ 8		$ 8
KindredBio
Non-cash and other items:
Measurement period adjustment related to settlement of preexisting liability			2
Variable Interest Entity, Primary Beneficiary | BexCaFe, LLC | Intangible assets, primarily acquired in-process research and development (IPR&D)
Non-cash and other items:
Asset impairment	$ 59		$ 59

Asset Impairment, Restructuri_5

Asset Impairment, Restructuring and Other Special Charges - Activity in Reserves (Details) - Severance - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Restructuring Reserve [Roll Forward]
Balance at beginning of period	$ 126	$ 130
Charges		41
Reserve adjustments	(9)	(15)
Cash paid	(71)	(94)
Foreign currency translation adjustments	(5)	(1)
Balance at end of period	$ 41	$ 61

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Finished products	$ 612	$ 598
Work in process	542	565
Raw materials and supplies	240	256
Total	1,394	1,419
Decrease to LIFO cost	(54)	(46)
Inventories	$ 1,340	$ 1,373

Equity - Narrative (Details)

Equity - Narrative (Details) $ / shares in Units, shares in Millions	Jan. 22, 2020 USD ($) trading_day $ / shares shares	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Class of Stock [Line Items]
Net proceeds		$ 5,901,000,000	$ 6,319,000,000
Total
Class of Stock [Line Items]
Number of shares sold in public offering (in shares) | shares	11
Proceeds after underwriting discounts and commissions	$ 528,000,000
Offering price (usd per share) | $ / shares	$ 50
Additional dilutive shares (in shares) | shares	3
Total | Minimum
Class of Stock [Line Items]
Shares issued upon conversion of prepaid stock purchase contracts (in shares) | shares	14
Average applicable market value necessary to be included in calculation of diluted shares outstanding (usd per share) | $ / shares	$ 32
Total | Maximum
Class of Stock [Line Items]
Shares issued upon conversion of prepaid stock purchase contracts (in shares) | shares	17
Average applicable market value necessary to be included in calculation of diluted shares outstanding (usd per share) | $ / shares	$ 38.40
5.00% Tangible Equity Units | Senior Notes
Class of Stock [Line Items]
Interest rate on debt component	5%
Number of consecutive trading days | trading_day	20
2.75% Senior Amortizing Notes | Senior Notes
Class of Stock [Line Items]
Interest rate on debt component	2.75%
Net proceeds	$ 79,000,000
Quarterly cash installment per amortizing note	0.6250
Initial principal amount	7.2007
First installment payment per amortizing note	$ 0.6528
Total
Class of Stock [Line Items]
Offering price (usd per share) | $ / shares	$ 50

Equity - Stockholders' Equity (

Equity - Stockholders' Equity (Details) $ / shares in Units, $ in Millions	Jan. 22, 2020 USD ($) $ / shares
Equity Component
Class of Stock [Line Items]
Fair value per unit (usd per share) | $ / shares	$ 42.80
Gross proceeds	$ 471
Less: Issuance costs	19
Net proceeds	$ 452
Debt Component
Class of Stock [Line Items]
Fair value per unit (usd per share) | $ / shares	$ 7.20
Gross proceeds	$ 79
Less: Issuance costs	3
Net proceeds	$ 76
Total
Class of Stock [Line Items]
Fair value per unit (usd per share) | $ / shares	$ 50
Gross proceeds	$ 550
Less: Issuance costs	22
Net proceeds	$ 528
Total | Minimum
Class of Stock [Line Items]
Applicable Market Value (usd per share) | $ / shares	$ 32
Settlement rate	130.21%
Total | Maximum
Class of Stock [Line Items]
Applicable Market Value (usd per share) | $ / shares	$ 38.40
Settlement rate	156.25%

Debt - Long-term Debt (Details)

Debt - Long-term Debt (Details) - USD ($)		1 Months Ended			9 Months Ended
	Apr. 30, 2022	Sep. 30, 2022	Jun. 30, 2022	Apr. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Jan. 22, 2020
Debt Instrument [Line Items]
Unamortized debt issuance costs		$ (68,000,000)			$ (68,000,000)		$ (82,000,000)
Total debt		5,901,000,000			5,901,000,000		6,319,000,000
Less current portion of long-term debt		394,000,000			394,000,000		294,000,000
Total long-term debt		5,507,000,000			5,507,000,000		6,025,000,000
Debt extinguishment loss					19,000,000	$ 0
Credit facility | Secured Debt | Incremental Term Facility due 2025
Debt Instrument [Line Items]
Long-term debt, gross		175,000,000			175,000,000		0
Debt instrument, face amount			$ 175,000,000
Credit facility | Secured Debt | Incremental Term Facility due 2025 | SOFR
Debt Instrument [Line Items]
Basis spread on variable rate			1.75%
Credit facility | Secured Debt | Incremental Term Facility due 2028
Debt Instrument [Line Items]
Long-term debt, gross		495,000,000			495,000,000		499,000,000
Credit facility | Secured Debt | Incremental Term Facility Due 2029
Debt Instrument [Line Items]
Long-term debt, gross		250,000,000			250,000,000		0
Debt instrument, face amount	$ 250,000,000			$ 250,000,000
Credit facility | Secured Debt | Incremental Term Facility Due 2029 | SOFR
Debt Instrument [Line Items]
Basis spread on variable rate				1.75%
Credit facility | Term Loan B due 2027
Debt Instrument [Line Items]
Long-term debt, gross		3,941,000,000			3,941,000,000		4,118,000,000
Repayment of debt		75,000,000
Debt extinguishment loss		2,000,000
Credit facility | Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt, gross		0			0		250,000,000
Senior Notes | 4.272% Senior Notes Due 2023
Debt Instrument [Line Items]
Long-term debt, gross		$ 344,000,000			$ 344,000,000		750,000,000
Interest rate	4.272%	4.272%		4.272%	4.272%
Debt extinguishment loss	$ 17,000,000
Amount of debt retired	$ 406,000,000			$ 406,000,000
Senior Notes | 4.900% Senior Notes due 2028
Debt Instrument [Line Items]
Long-term debt, gross		$ 750,000,000			$ 750,000,000		750,000,000
Interest rate		4.90%			4.90%
Senior Notes | TEU Amortizing Notes due 2023
Debt Instrument [Line Items]
Long-term debt, gross		$ 14,000,000			$ 14,000,000		$ 34,000,000
Interest rate								5%

Financial Instruments and Fai_3

Financial Instruments and Fair Value - Narrative (Details) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2022	Apr. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Equity method investments	$ 28,000,000		$ 28,000,000		$ 28,000,000		$ 22,000,000
Unrealized gains associated with cancelled swaps			13,000,000		22,000,000
Stranded tax benefits reclassified to earnings					17,000,000
Reclassification from AOCI			2,000,000	$ 8,000,000	12,000,000	$ 22,000,000
Unrealized gains	106,000,000		106,000,000		106,000,000
Designated as Hedging Instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Unrealized gain (loss) on investments			75,000,000	4,000,000	218,000,000	52,000,000
Cross-currency fixed interest rate swap | Not Designated as Hedging Instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notional amount	821,000,000		821,000,000		821,000,000		1,212,000,000
Cross-currency fixed interest rate swap | Designated as Hedging Instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notional amount	3,050,000,000		3,050,000,000		3,050,000,000		$ 3,800,000,000
Forward-starting interest rate contracts designated as cash flow hedges | Designated as Hedging Instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Unrealized gains	103,000,000		103,000,000		103,000,000
Forward-starting interest rate contracts designated as cash flow hedges | Designated as Hedging Instrument | Cash Flow Hedging
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash received for derivative settlement	$ 75,000,000	$ 132,000,000
Interest rate swaps, net of tax			$ 0	$ 0	$ 0	$ 0

Financial Instruments and Fai_4

Financial Instruments and Fair Value - Fair Value Information (Details) - Recurring - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
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, including current portion	$ 0	$ 0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt, including current portion	(5,686)	(6,518)
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt, including current portion	0	0
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt, including current portion	(5,969)	(6,401)
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt, including current portion	(5,686)	(6,518)
Prepaid expenses and other | Foreign exchange contracts not designated as hedging instruments | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0	0
Prepaid expenses and other | Foreign exchange contracts not designated as hedging instruments | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	39	19
Prepaid expenses and other | Foreign exchange contracts not designated as hedging instruments | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0	0
Prepaid expenses and other | Foreign exchange contracts not designated as hedging instruments | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	39	19
Prepaid expenses and other | Foreign exchange contracts not designated as hedging instruments | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	39	19
Prepaid expenses and other | Forward-starting interest rate contracts designated as cash flow hedges | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0
Prepaid expenses and other | Forward-starting interest rate contracts designated as cash flow hedges | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	3
Prepaid expenses and other | Forward-starting interest rate contracts designated as cash flow hedges | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0
Prepaid expenses and other | Forward-starting interest rate contracts designated as cash flow hedges | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	3
Prepaid expenses and other | Forward-starting interest rate contracts designated as cash flow hedges | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	3
Other noncurrent assets | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	10	13
Other noncurrent assets | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0	0
Other noncurrent assets | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0	0
Other noncurrent assets | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	10	13
Other noncurrent assets | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	10	13
Other noncurrent assets | Foreign exchange contracts not designated as hedging instruments | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0	0
Other noncurrent assets | Foreign exchange contracts not designated as hedging instruments | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	15	8
Other noncurrent assets | Foreign exchange contracts not designated as hedging instruments | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)		0
Other noncurrent assets | Foreign exchange contracts not designated as hedging instruments | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	15	8
Other noncurrent assets | Foreign exchange contracts not designated as hedging instruments | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	15	8
Other current liabilities | Foreign exchange contracts not designated as hedging instruments | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0
Other current liabilities | Foreign exchange contracts not designated as hedging instruments | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	(29)
Other current liabilities | Foreign exchange contracts not designated as hedging instruments | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0
Other current liabilities | Foreign exchange contracts not designated as hedging instruments | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	(29)
Other current liabilities | Foreign exchange contracts not designated as hedging instruments | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	$ (29)
Other current liabilities | Forward-starting interest rate contracts designated as cash flow hedges | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)		0
Other current liabilities | Forward-starting interest rate contracts designated as cash flow hedges | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)		(20)
Other current liabilities | Forward-starting interest rate contracts designated as cash flow hedges | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)		0
Other current liabilities | Forward-starting interest rate contracts designated as cash flow hedges | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)		(20)
Other current liabilities | Forward-starting interest rate contracts designated as cash flow hedges | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)		$ (20)

Financial Instruments and Fai_5

Financial Instruments and Fair Value - Net Gains/Losses on Derivative Instruments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Cross-currency fixed interest rate swap | Not Designated as Hedging Instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign exchange forward contracts	$ (5)	$ (2)	$ (20)	$ (29)
Forward-starting interest rate contracts designated as cash flow hedges | Designated as Hedging Instrument | Cash Flow Hedging
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Forward-starting interest rate swaps	$ 62	$ 4	$ 179	$ 52

Income Taxes - Provision for Ta

Income Taxes - Provision for Taxes on Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 7	$ (26)	$ 34	$ (71)
Effective tax rate	(17.10%)	20%	315.60%	15.90%

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 7	$ (26)	$ 34	$ (71)
Effective tax rate	(17.10%)	20%	315.60%	15.90%
Release of stranded tax benefits			$ 17

Commitments and Contingencies -

Commitments and Contingencies - Narrative (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021	Oct. 16, 2020
Commitments and Contingencies Disclosure [Abstract]
Percent of TEUs issued involved in lawsuit			5%
Liabilities related to litigation	$ 0	$ 0
Operating lease, lease not yet commenced liability	$ 378,000,000
Lessee, operating lease, lease not yet commenced, term of contract	25 years
New corporate headquarters, estimated total incentive to be funded by TIF	$ 64,000,000
Tax Incremental Financing, commitment amount		$ 64,000,000
Refund within next three months	$ 15,000,000

Geographic Information - Narrat

Geographic Information - Narrative (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021	Sep. 30, 2022 USD ($) segment	Sep. 30, 2021	Dec. 31, 2021 USD ($)
Concentration Risk [Line Items]
Number of operating segments | segment			1
Accounts receivable	$ 804		$ 804		$ 833
Product Sales
Concentration Risk [Line Items]
Accounts receivable	$ 80		$ 80		$ 74
Customer Concentration Risk | Revenue | Single Customer
Concentration Risk [Line Items]
Concentration risk (as a percent)	12%	11%	11%	9%

Geographic Information - Select

Geographic Information - Selected Geographic Area Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 1,028	$ 1,131	$ 3,430	$ 3,652
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	475	507	1,537	1,621
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 553	$ 624	$ 1,893	$ 2,031

Retirement Benefits (Details)

Retirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Type [Extensible Enumeration]			Pension Plan
Net periodic benefit cost (income)	$ 0	$ (9)	$ 0	$ (26)
Pension Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	4	4	11	14
Interest cost	1	1	3	2
Expected return on plan assets	(2)	(2)	(5)	(5)
Amortization of prior service cost	(1)	(1)	(3)	(5)
Amortization of net actuarial loss	0	0	0	1
Net curtailments and settlements (Note 6)	0	(9)	0	(26)
Net periodic benefit cost (income)	$ 2	$ (7)	$ 6	$ (19)

Loss Per Share (Details)

Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net loss available to common shareholders	$ (49)	$ (22)	$ 48	$ (104)	$ (210)	$ (61)	$ (23)	$ (375)
Weighted average common shares outstanding (in shares)	488.4			487.3			488.3	487.1
Assumed conversion of dilutive common stock equivalents (in shares)	0			0			0	0
Diluted weighted average shares outstanding (in shares)	488.4			487.3			488.3	487.1
Basic (usd per share)	$ (0.10)			$ (0.21)			$ (0.05)	$ (0.77)
Diluted (usd per share)	$ (0.10)			$ (0.21)			$ (0.05)	$ (0.77)
Antidilutive shares not included in calculating diluted loss per share (in shares)	4.4			3.7			2.6	3.9