Elanco Animal Health (ELAN) 10-Q 7 Aug 23 2023 Q2 Quarterly report Financial data

Cover Page

Cover Page - shares	6 Months Ended
	Jun. 30, 2023	Aug. 03, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
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
Title of 12(b) Security	Common stock, no par value
Trading Symbol	ELAN
Security Exchange Name	NYSE
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)		492,675,580
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001739104
Current Fiscal Year End Date	--12-31

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenue	$ 1,057	$ 1,175	$ 2,314	$ 2,401
Costs, expenses and other:
Cost of sales	434	484	928	993
Research and development	81	82	162	163
Marketing, selling and administrative	353	343	680	666
Amortization of intangible assets	136	133	270	270
Asset impairment, restructuring and other special charges	35	86	75	126
Interest expense, net of capitalized interest	74	67	138	119
Other expense (income), net	23	(6)	32	3
Costs, expenses and other	1,136	1,189	2,285	2,340
(Loss) income before income taxes	(79)	(14)	29	61
Income tax expense (benefit)	18	(4)	23	20
Net (loss) income	$ (97)	$ (10)	$ 6	$ 41
(Loss) earnings per share:
Basic (usd per share)	$ (0.20)	$ (0.02)	$ 0.01	$ 0.08
Diluted (usd per share)	$ (0.20)	$ (0.02)	$ 0.01	$ 0.08
Weighted average shares outstanding:
Basic (in shares)	492.6	488.4	491.8	488.2
Diluted (in shares)	492.6	488.4	492.7	492.1

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (97)	$ (10)	$ 6	$ 41
Other comprehensive income (loss):
Cash flow hedges, net of taxes	29	8	(19)	117
Foreign currency translation, net of taxes	2	(470)	132	(555)
Defined benefit pension and retiree health benefit plans, net of taxes	(2)	(1)	(2)	(2)
Other comprehensive income (loss), net of taxes	29	(463)	111	(440)
Comprehensive (loss) income	$ (68)	$ (473)	$ 117	$ (399)

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Current Assets
Cash and cash equivalents	$ 367	$ 345
Accounts receivable, net	1,000	797
Other receivables	225	205
Inventories	1,690	1,538
Prepaid expenses and other	370	394
Total current assets	3,652	3,279
Noncurrent Assets
Goodwill	6,040	5,993
Other intangibles, net	4,678	4,842
Other noncurrent assets	419	378
Property and equipment, net	1,007	999
Total assets	15,796	15,491
Current Liabilities
Accounts payable	354	390
Sales rebates and discounts	332	324
Current portion of long-term debt	39	388
Other current liabilities	559	600
Total current liabilities	1,284	1,702
Noncurrent Liabilities
Long-term debt	6,023	5,448
Deferred taxes	658	662
Other noncurrent liabilities	411	390
Total liabilities	8,376	8,202
Commitments and Contingencies
Equity
Common stock, no par value, 5,000,000,000 shares authorized, 492,554,242 and 474,237,738 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	0	0
Additional paid-in capital	8,752	8,738
Accumulated deficit	(1,051)	(1,057)
Accumulated other comprehensive loss	(281)	(392)
Total equity	7,420	7,289
Total liabilities and equity	$ 15,796	$ 15,491

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, shares authorized (in shares)	5,000,000,000	5,000,000,000
Common stock, shares issued (in shares)	492,554,242	474,237,738
Common stock, shares outstanding (in shares)	492,554,242	474,237,738

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 Loss	Cash Flow Hedge	Foreign Currency Translation	Defined Benefit Pension and Retiree Health Benefit Plans
Balance at beginning of period (in shares) at Dec. 31, 2021		473,100,000
Balance at beginning of period at Dec. 31, 2021	$ 7,508	$ 0	$ 8,696	$ (979)	$ (209)	$ 25	$ (253)	$ 19
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	51			51
Other comprehensive income (loss), net of tax	23				23	109	(85)	(1)
Stock-based compensation activity, net (in shares)		1,000,000
Stock-based compensation activity, net	3		3
Balance at end of period (in shares) at Mar. 31, 2022		474,100,000
Balance at end of period at Mar. 31, 2022	7,585	$ 0	8,699	(928)	(186)	134	(338)	18
Balance at beginning of period (in shares) at Dec. 31, 2021		473,100,000
Balance at beginning of period at Dec. 31, 2021	7,508	$ 0	8,696	(979)	(209)	25	(253)	19
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	41
Other comprehensive income (loss), net of tax	(440)
Balance at end of period (in shares) at Jun. 30, 2022		474,100,000
Balance at end of period at Jun. 30, 2022	7,125	$ 0	8,712	(938)	(649)	142	(808)	17
Balance at beginning of period (in shares) at Mar. 31, 2022		474,100,000
Balance at beginning of period at Mar. 31, 2022	7,585	$ 0	8,699	(928)	(186)	134	(338)	18
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(10)			(10)
Other comprehensive income (loss), net of tax	(463)				(463)	8	(470)	(1)
Stock-based compensation activity, net	13		13
Balance at end of period (in shares) at Jun. 30, 2022		474,100,000
Balance at end of period at Jun. 30, 2022	$ 7,125	$ 0	8,712	(938)	(649)	142	(808)	17
Balance at beginning of period (in shares) at Dec. 31, 2022	474,237,738	474,200,000
Balance at beginning of period at Dec. 31, 2022	$ 7,289	$ 0	8,738	(1,057)	(392)	182	(672)	98
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	103			103
Other comprehensive income (loss), net of tax	82				82	(48)	130
Stock-based compensation activity, net (in shares)		1,000,000
Stock-based compensation activity, net	6		6
Conversion of tangible equity units (TEUs) into common stock (in shares)		17,200,000
Balance at end of period (in shares) at Mar. 31, 2023		492,400,000
Balance at end of period at Mar. 31, 2023	$ 7,480	$ 0	8,744	(954)	(310)	134	(542)	98
Balance at beginning of period (in shares) at Dec. 31, 2022	474,237,738	474,200,000
Balance at beginning of period at Dec. 31, 2022	$ 7,289	$ 0	8,738	(1,057)	(392)	182	(672)	98
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	6
Other comprehensive income (loss), net of tax	$ 111
Balance at end of period (in shares) at Jun. 30, 2023	492,554,242	492,600,000
Balance at end of period at Jun. 30, 2023	$ 7,420	$ 0	8,752	(1,051)	(281)	163	(540)	96
Balance at beginning of period (in shares) at Mar. 31, 2023		492,400,000
Balance at beginning of period at Mar. 31, 2023	7,480	$ 0	8,744	(954)	(310)	134	(542)	98
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(97)			(97)
Other comprehensive income (loss), net of tax	29				29	29	2	(2)
Stock-based compensation activity, net (in shares)		200,000
Stock-based compensation activity, net	$ 8		8
Balance at end of period (in shares) at Jun. 30, 2023	492,554,242	492,600,000
Balance at end of period at Jun. 30, 2023	$ 7,420	$ 0	$ 8,752	$ (1,051)	$ (281)	$ 163	$ (540)	$ 96

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash Flows from Operating Activities
Net (loss) income	$ 6	$ 41
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	350	347
Stock-based compensation expense	21	31
Asset impairment and write-down charges	0	81
Proceeds from interest rate swap settlements	0	132
Changes in operating assets and liabilities, net of acquisitions	(473)	(384)
Other non-cash operating activities, net	12	2
Net Cash (Used for) Provided by Operating Activities	(84)	250
Cash Flows from Investing Activities
Net purchases of property and equipment and software	(66)	(58)
Cash paid for acquisitions	(16)	0
Purchases of intangible assets	(14)	(1)
Other investing activities, net	(2)	(7)
Net Cash Used for Investing Activities	(98)	(66)
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt	0	425
Proceeds from revolving credit facility	250	563
Repayments of long-term borrowings	(32)	(528)
Repayments of revolving credit facility	0	(738)
Other financing activities, net	(5)	(17)
Net Cash Provided by (Used for) Financing Activities	213	(296)
Effect of exchange rate changes on cash and cash equivalents	(9)	(19)
Net increase (decrease) in cash and cash equivalents	22	(131)
Cash and cash equivalents – beginning of period	345	638
Cash and cash equivalents – end of period	$ 367	$ 507

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Summary of Significant Accounting Policies	Note 1. Basis of Presentation and Summary of Significant Accounting Policies We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the 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, 2022 included in our 2022 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, 2023 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 4 to the consolidated financial statements in our 2022 Form 10-K appropriately represent, in all material respects, the current status of our accounting policies. Revision of Previously Issued Consolidated Financial Statements In connection with the preparation of our financial statements as of and for the year ended December 31, 2022, a cumulative error was identified and corrected relating to the valuation allowance for taxes for a Southeast Asia affiliate. While immaterial to prior years, correcting this cumulative error in 2022 would have caused the 2022 financial statements to be materially misstated. In conjunction with making these corrections, we made other adjustments to the prior years to revise uncorrected errors. The appropriate revisions to our historical condensed consolidated financial statements and the notes thereto are reflected herein. Further information is included in Note 2 and Note 21 to the consolidated financial statements in our 2022 Form 10-K

Implementation of New Financial

Implementation of New Financial Accounting Pronouncements	6 Months Ended
	Jun. 30, 2023
Accounting Changes and Error Corrections [Abstract]
Implementation of New Financial Accounting Pronouncements	Note 2. Implementation of New Financial Accounting Pronouncements The following table provides a brief description of an accounting standard that was recently 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 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 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. ASU 2022-06 extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024. Adoption of the guidance is optional and effective as of March 12, 2020 through December 31, 2024. Adoption is permitted at any time during the period on a prospective basis. Effective April 1, 2023, and in accordance with the provisions outlined in our underlying credit agreements, we have transitioned the reference rate used in our credit facilities from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (Term SOFR). The change did not have a material impact on our condensed consolidated financial statements.

Revenue

Revenue	6 Months Ended
	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Revenue	Note 3. Revenue We recognize revenue primarily from product sales to customers. Revenue from sales of products is recognized at the point where the customer obtains control of the goods and we satisfy our performance obligations, which is generally once the goods have been shipped and the customer has assumed title. For contract manufacturing organization (CMO) arrangements, we recognize revenue over time or at a point in time depending on our evaluation of when the customer obtains control of the promised goods or services. We have a single customer that accounted for approximately 9% and 10% of revenue for the six months ended June 30, 2023 and 2022, respectively. Product sales with this customer resulted in accounts receivable of $84 million and $73 million as of June 30, 2023 and December 31, 2022, respectively. Provisions for sales rebates and discounts are established in the same period the related sales are recognized and are based on specific agreements. Sales rebates and discounts are recorded as a reduction to revenue. In determining the appropriate accrual amount, we consider our historical experience with similar incentive programs, current sales data and estimates of inventory levels at our channel distributors. The following table summarizes the activity in our global sales rebates and discounts liability: Six Months Ended June 30, 2023 2022 Beginning balance $ 324 $ 316 Reduction of revenue 387 355 Payments (379) (387) Ending balance $ 332 $ 284 Adjustments to revenue recognized as a result of changes in estimates during the six months ended June 30, 2023 and 2022 for product shipped in previous periods were not material. Actual global product returns were approximately 1% of net revenue for the six months ended June 30, 2023 and 2022. Disaggregation of Revenue The following table summarizes our revenue disaggregated by product category: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Pet Health $ 518 $ 610 $ 1,193 $ 1,250 Farm Animal: Cattle 210 248 458 495 Poultry 178 174 361 353 Swine 89 89 191 189 Aqua 50 42 90 85 Total Farm Animal 527 553 1,100 1,122 Contract Manufacturing (1) 12 12 21 29 Revenue $ 1,057 $ 1,175 $ 2,314 $ 2,401 (1) Represents revenue from arrangements in which we manufacture products on behalf of a third party. The following table summarizes our revenue disaggregated by geographic area: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 United States $ 500 $ 539 $ 1,043 $ 1,061 International 557 636 1,271 1,340 Revenue $ 1,057 $ 1,175 $ 2,314 $ 2,401

Acquisitions, Divestitures and

Acquisitions, Divestitures and Other Arrangements	6 Months Ended
	Jun. 30, 2023
Business Combination and Asset Acquisition [Abstract]
Acquisitions, Divestitures and Other Arrangements	Note 4. Acquisitions, Divestitures and Other Arrangements NutriQuest U.S. Acquisition On January 3, 2023, we acquired certain U.S. marketed products, pipeline products, inventory and an assembled workforce from NutriQuest, LLC (NutriQuest). NutriQuest is a provider of swine, poultry and cattle nutritional health products to animal producers. The acquisition allows us to expand our existing nutritional health offerings and furthers our efforts to explore innovative antibiotic alternatives. The composition of the purchase price was as follows: Up-front cash consideration $ 16 Deferred cash consideration due January 4, 2024 5 Fair value of contingent consideration 37 Total purchase consideration $ 58 The NutriQuest acquisition 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 assets has been recorded as goodwill. Contingent consideration includes up to $85 million of cash consideration payable if specific development, sales and geographic expansion milestones are achieved, as outlined in the asset purchase agreement. The initial fair value assessment of this contingent consideration liability of $37 million was estimated as of the acquisition date using a Monte Carlo simulation model, which represented a Level 3 measurement under the fair value measurement hierarchy (see Note 10. Fair Value for further information). The following table summarizes the preliminary amounts recognized for assets acquired as of the acquisition date: Inventory $ 3 Intangible assets: Marketed products 29 Acquired in-process research and development (IPR&D) 10 Other intangible assets 15 Total identifiable assets 57 Goodwill 1 Total consideration transferred $ 58 Other intangible assets consist of customer relationships and trade names. The acquired definite-lived intangible assets are being amortized over a weighted-average estimated useful life of approximately 12 years on a straight-line basis. The estimated fair values of identifiable intangible assets 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 or product (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 accounting for this acquisition has not been finalized as of June 30, 2023. The purchase price allocation is preliminary and subject to change, including the valuation of the contingent consideration and intangible assets. The final determination of these amounts will be completed as soon as possible but no later than one year from the acquisition date. Revenue attributable to the NutriQuest acquisition for the six months ended June 30, 2023, was approximately $9 million. NutriQuest Brazil Acquisition On August 1, 2023, we acquired certain assets including inventory and distribution rights for certain marketed products from NutriQuest Nutricao Animal Ltda (NutriQuest Brazil). As of the closing date, we paid cash consideration of approximately $3 million, with future payments required through 2026 of up to $19 million, pursuant to the terms and conditions set forth in the asset purchase agreement. The accounting for this acquisition was incomplete at the time the condensed consolidated financial statements were issued; however, we anticipate this transaction will be accounted for as a business combination under the acquisition method of accounting. 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 retained a non-voting, minority stake in the company. In addition, we entered into transitional services agreements with the company for certain services. Assets transferred included intellectual property and laboratory equipment. The book values of those assets were not material. We recorded a gain on disposal of the assets of approximately $3 million during the year ended December 31, 2022. 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 transfer of approximately 600 employees. In connection with these arrangements, we also entered into long-term manufacturing and supply agreements, under which TriRx began manufacturing 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 was included in prepaid expenses and other and other noncurrent assets on our condensed consolidated balance sheets. Based on the terms of the agreements and cash proceeds received to date, as of June 30, 2023, we had a net receivable balance from TriRx of $71 million from the sales of Shawnee and Speke, of which $65 million was included within other receivables on the condensed consolidated balance sheets, with the remainder included in other noncurrent assets. In May 2023, we entered into amendments to the agreements which effectively restructured the payment schedule related to the remaining amount owed. Under the terms of the amendments, we expect to receive the $65 million current portion of this receivable balance upon the earlier of the date on which certain conditions are met or in equal installments over a twelve-month period beginning January 31, 2024. At this time, we believe amounts owed by TriRx are collectible and we will continue to assess collectibility. Further, we have rights to certain collateral in the event of a default and we continue to monitor the value of this collateral. BexCaFe Arrangement In June 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. There is no minimum payout due on the contingent consideration and the maximum payout related to sales royalties 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. During the six months ended June 30, 2023, we paid $13 million to BexCaFe in connection with development/regulatory milestones achieved upon U.S. Food and Drug Administration (FDA) approval of the original new animal drug application for Bexacat

Asset Impairment, Restructuring

Asset Impairment, Restructuring and Other Special Charges	6 Months Ended
	Jun. 30, 2023
Restructuring and Related Activities [Abstract]
Asset Impairment, Restructuring and Other Special Charges	Note 5. 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. Restructuring activities primarily include charges associated with facility rationalization and workforce reductions. In connection with recent acquisitions, including the acquisition of Bayer Animal Health, we have also incurred costs associated with executing transactions and integrating acquired operations. 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 impairment charges 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. Determinations of fair value can result from a complex series of judgments and rely on estimates and assumptions. Components of asset impairment, restructuring and other special charges were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Restructuring charges (credits) (1) $ — $ (1) $ — $ (7) Acquisition related charges (2) 35 26 75 50 Non-cash and other items: Asset impairment (3) — 59 — 81 Settlements and other — 2 — 2 Total expense $ 35 $ 86 $ 75 $ 126 (1) Restructuring credits in 2022 relate to adjustments resulting from the reversal of severance accruals associated with 2021 restructuring programs, resulting from final negotiations and certain restructured employees filling open positions. (2) Acquisition related charges include transaction costs directly related to acquiring businesses, such as expenditures for banking, legal, accounting, consulting and other similar services, and integration charges inclusive of system and process integration and product transfers and independent company stand-up costs related to the implementation of new systems, programs and processes. (3) Asset impairments include a charge of $59 million in the second quarter of 2022 related to the write-off of an IPR&D asset with no alternative future use licensed from BexCaFe (see Note 4. Acquisitions, Divestitures and Other Arrangements for further discussion) and a $22 million charge related to the finalization of the write-down upon sale of the Speke site during the first quarter of 2022. The changes in our restructuring reserve during the six months ended June 30, 2023, were as follows: Balance at December 31, 2022 $ 36 Cash paid (28) Balance at June 30, 2023 $ 8

Inventories

Inventories	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
Inventories	Note 6. Inventories Inventories are stated at the lower of cost and 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: June 30, 2023 December 31, 2022 Finished products $ 834 $ 783 Work in process 773 683 Raw materials and supplies 141 130 Total 1,748 1,596 Decrease to LIFO cost (58) (58) Inventories $ 1,690 $ 1,538

Equity

Equity	6 Months Ended
	Jun. 30, 2023
Equity [Abstract]
Equity	Note 7. Equity Tangible Equity Unit (TEU) Offering

Debt

Debt	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
Debt	Note 8. Debt Long-term debt consisted of the following: June 30, 2023 December 31, 2022 Incremental Term Facility due 2025 $ 175 $ 175 Incremental Term Facility due 2028 491 494 Incremental Term Facility due 2029 248 249 Term Loan B due 2027 3,860 3,881 Revolving Credit Facility (1) 250 — 4.272% Senior Notes due 2023 (2) 344 344 4.900% Senior Notes due 2028 (3) 750 750 TEU Amortizing Notes due 2023 (4) — 7 Unamortized debt issuance costs (56) (64) 6,062 5,836 Less current portion of long-term debt 39 388 Total long-term debt $ 6,023 $ 5,448 (1) During the six months ended June 30, 2023, we drew $250 million on our Revolving Credit Facility to fund working capital needs. Our Revolving Credit Facility provides up to $750 million in borrowing capacity (with incremental capacity if certain conditions are met), bears interest at Term SOFR plus 2.10% and matures in August 2027. (2) The 4.272% Senior Notes due 2023, issued in August 2018, have been subject to interest rate increases since issuance related to credit rating agency downgrades. As of June 30, 2023, these notes bear interest at a rate of 6.022%. As discussed further below, on August 7, 2023, we redeemed the 4.272% Senior Notes due 2023 in full. (3) The 4.900% Senior Notes due 2028, issued in August 2018, have been subject to interest rate increases since issuance related to credit rating agency downgrades. As of June 30, 2023, these notes bear interest at a rate of 6.650%. (4) The TEU Amortizing Notes due 2023 matured on February 1, 2023 (see Note 7. Equity for further information). 2023 Financing On August 3, 2023, we entered into a new $300 million secured term facility (the "Securitization Facility") that is secured and collateralized by our U.S. Net Eligible Receivables Balance (as defined within the applicable agreement). Of the maximum borrowing capacity under the Securitization Facility of $300 million, $250 million was drawn on August 3, 2023. The Securitization Facility will require monthly interest payments over its three-year term at a variable rate based on Term SOFR plus 125 basis points, and our borrowing capacity under the Securitization Facility will be subject to fluctuation over time based on the level of our borrowing base, which is correlated to our U.S. Net Eligible Receivables Balances. The full, outstanding balance of the Securitization Facility will be due on July 31, 2026. On August 7, 2023, we utilized the proceeds from the Securitization Facility, in addition to a $100 million draw on our Revolving Credit Facility on August 4, 2023, to redeem in full the 4.272% Senior Notes due 2023. As the 4.272% Senior Notes due 2023 have been refinanced with long-term financing, they are reflected within long-term debt on our condensed consolidated balance sheet as of June 30, 2023. The early redemption of the 4.272% Senior Notes due 2023 has satisfied all obligations and commitments thereunder. Subsequent to the issuance of the Securitization Facility and the redemption of the 4.272% Senior Notes due 2023, as of the date of this filing, approximately 75% of our long-term indebtedness now bears interest at a fixed-rate (including variable-rate converted to fixed-rate through the use of interest rate swaps - see Note 9. Financial Instruments for further information). We were in compliance with all of our debt covenants as of June 30, 2023, and remain in compliance subsequent to entering into the new Securitization Facility.

Financial Instruments

Financial Instruments	6 Months Ended
	Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Financial Instruments	Note 9. Financial Instruments To manage our exposure to market risks, such as changes in foreign currency exchange rates and interest rates, 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. We also assess 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 condensed consolidated statements of cash flows. Further, we do not offset derivative assets and liabilities on the condensed consolidated balance sheets. 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. 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 (income), net in the condensed consolidated statements of operations. Forward contracts generally have maturities not exceeding 12 months. As of June 30, 2023 and December 31, 2022, we had outstanding foreign exchange contracts with aggregate notional amounts of $988 million and $784 million, respectively. The amount of net (losses) gains on derivative instruments not designated as hedging instruments, recorded in other expense (income), net were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Foreign exchange forward contracts (1) $ (1) $ (7) $ 1 $ (15) (1) These amounts were substantially offset in other expense (income), net by the effect of changing exchange rates on the underlying foreign currency exposures. Derivatives designated as hedges To manage our exposure to variable interest rate risk, we utilize interest rate swap contracts to effectively convert our variable-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 our interest rate 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 in the fair value hierarchy (see Note 10. Fair Value for further information). Our outstanding forward-starting interest rate swaps had maturities ranging between 2023 and 2028, with aggregate notional amounts of $3,800 million and $3,050 million as of June 30, 2023 and December 31, 2022, respectively. In March 2023, we entered into new interest rate swap agreements with a combined notional amount of $1,000 million, which will become effective on October 1, 2023, following the maturity of certain current swaps with the same combined notional amount. Additionally, on May 1, 2023, we entered into new interest rate swap agreements with a combined notional amount of $750 million, which became effective on June 1, 2023, and mature in August 2028. As of June 30, 2023, when factoring in the $3,800 million of variable rate debt converted to fixed-rate through the use of interest rate swaps, our weighted-average effective interest rate on our outstanding indebtedness was 6.28%. The amounts of net gains (losses) on cash flow hedges recorded, net of tax in other comprehensive income (loss) were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Forward-starting interest rate swaps $ 29 $ 8 $ (19) $ 117 During the three months ended June 30, 2023 and 2022, activity on cash flow hedges recorded in other comprehensive income (loss) included gains of $55 million and $33 million, net of tax, respectively, related to mark-to-market adjustments. During the six months ended June 30, 2023 and 2022, activity on cash flow hedges recorded in other comprehensive income (loss) included gains of $33 million and $142 million, net of tax, respectively, related to mark-to-market adjustments. In April 2022 and September 2022, we settled certain existing interest rate swaps and simultaneously entered into new agreements with the same notional amount and covering the same tenor. As a result, we received cash settlements of $132 million and $75 million, respectively, the former of which was reflected in net cash from operating activities in the condensed consolidated statement of cash flows for the six months ended June 30, 2022. During the three months ended June 30, 2023 and 2022, we reclassified $29 million and $1 million of net gains, respectively, into interest expense, net of capitalized interest. During the six months ended June 30, 2023 and 2022, we reclassified $59 million of net gains and $2 million of net losses, respectively, into interest expense, net of capitalized interest. Over the next 12 months, we expect to reclassify a gain of $108 million to interest expense, net of capitalized interest.

Fair Value

Fair Value	6 Months Ended
	Jun. 30, 2023
Fair Value Disclosures [Abstract]
Fair Value	Note 10. Fair Value Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a framework that utilizes the inputs market participants use to determine the fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. Level 1 fair value measurements are based on quoted prices in active markets for identical assets or liabilities. 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. Our Level 3 fair value measurements, which include the value of contingent consideration as of June 30, 2023, are based on unobservable inputs based on little or no market activity. The following table summarizes the fair value information at June 30, 2023 and December 31, 2022 for assets and liabilities measured at fair value on a recurring basis in the respective balance sheet line items, as well as long-term debt, 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 June 30, 2023 Recurring fair value measurements Prepaid expenses and other - derivative instruments $ 40 $ — $ 40 $ — $ 40 Other noncurrent assets - derivative instruments 51 — 51 — 51 Other noncurrent assets - investments with readily determinable fair value 9 9 — — 9 Other current liabilities - derivative instruments (35) — (35) — (35) Other current liabilities - contingent consideration (13) — — (13) (13) Other noncurrent liabilities - contingent consideration (25) — — (25) (25) Financial instruments not carried at fair value Long-term debt, including current portion (6,118) — (5,942) — (5,942) December 31, 2022 Recurring fair value measurements Prepaid expenses and other - derivative instruments $ 90 $ — $ 90 $ — $ 90 Other noncurrent assets - derivative instruments 10 — 10 — 10 Other noncurrent assets - investments with readily determinable fair value 7 7 — — 7 Other current liabilities - derivative instruments (64) — (64) — (64) Financial instruments not carried at fair value Long-term debt, including current portion (5,900) — (5,711) — (5,711) We also had investments without readily determinable fair values and equity method investments, which were classified as other noncurrent assets on our condensed consolidated balance sheets totaling $27 million as of June 30, 2023 and December 31, 2022. These investments are not recorded at fair value on a recurring basis, and as such, are not included in the fair value table above. Contingent consideration liabilities totaling $38 million as of June 30, 2023 related to our acquisition of certain assets of NutriQuest during the first quarter of 2023 (see Note 4. Acquisitions, Divestitures and Other Arrangements for further information). We may pay up to $85 million in cash consideration, which is contingent upon the achievement of specific development, sales and geographic expansion milestones as outlined in the asset purchase agreement. The fair values of the contingent consideration liabilities were estimated using the Monte Carlo

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Note 11. Income Taxes Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income tax expense (benefit) $ 18 $ (4) $ 23 $ 20 Effective tax rate (23.0) % 28.6 % 79.9 % 32.3 % For the three and six months ended June 30, 2023, we recognized income tax expense of $18 million and $23 million, respectively. Our effective tax rates of (23.0)% and 79.9%, respectively, differ from the statutory income tax rates due to the earnings mix of income in jurisdictions with statutory tax rates higher than the U.S. and losses in the U.S. and various foreign affiliates for which there was no tax benefit, as valuation allowances have been established in those jurisdictions. For the three and six months ended June 30, 2022, we recognized an income tax benefit of $4 million and income tax expense of $20 million, respectively. Our effective tax rates of 28.6% and 32.3%, respectively, differ from the statutory income tax rate largely due to changes in the earnings mix between periods resulting in projected losses in the U.S. The U.S. federal and state losses were subject to valuation allowances. The income tax (benefit) expense was partially offset by a $17 million income tax benefit reclassified from accumulated other comprehensive loss due to the termination of interest rates swaps during the three months ended June 30, 2022.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 12. Commitments and Contingencies Legal Matters We are party to various legal actions that arise in the normal course of business. The most significant matters are described below. Loss contingency provisions are recorded when it is deemed probable that we will incur a loss and we can formulate a reasonable estimate of that loss. Seresto Class Action Lawsuits and EPA Safety Review 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. 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. In June 2023, the parties agreed on the monetary terms of a potential settlement of the consolidated class action lawsuits. As a result, we determined that an accrual of $15 million was appropriate, given a settlement is now considered both estimable and probable as of June 30, 2023. The parties must still reach agreement on non-monetary terms, and any settlement, if reached, is subject to approval by the court, and likely will be subject to other conditions. We have recorded this $15 million accrual provision within other current liabilities on our condensed consolidated balance sheet, with a corresponding charge included within other expense (income), net on our condensed consolidated statements of operations for the three and six months ended June 30, 2023. Also, in January 2023, a lawsuit seeking damages for alleged negligence, breach of statutory regulations, breach of statutory duties and deceptive marketing was filed in Israel against Elanco and other parties, arising out of the use of Seresto and Foresto™ flea and tick collars for cats and dogs that are marketed and sold in Europe and in Israel. We intend to defend our position vigorously, and as of the date of this filing, we are unable to estimate the probability of loss or range of loss, if any. Further, in March 2021, a member of the U.S. House of Representatives who was serving as a 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 CEO testified. During and after the hearing, the subcommittee chair repeated his request that Elanco voluntarily recall the collars and also requested that the U.S. 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. In April 2021, 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. In response to the EPA's request for comments from the public on the petition, we submitted a comment to the EPA supporting the safety profile of Seresto and engaged in discussions with the EPA. On July 13, 2023, the EPA announced their completion of a comprehensive, multi-year review, with support from the FDA, of the Seresto flea and tick collar and confirmed the continued registration of the collar, denying the citizen's petition. As part of the EPA’s scientific review process, the agency analyzed incident data including third-party assessments and compared data to other EPA registered pet products. Based on comprehensive data from the review, the EPA concluded that Seresto continues to meet all the EPA’s standards for registration under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), which ensures that products do not pose unreasonable risk of harm. Additional Legal Matters For the litigation matters discussed below we either believe loss is not probable or are unable to estimate the possible loss or range of loss, if any. The process of resolving these matters is inherently uncertain and may develop over an extended period of time; therefore, at this time, the ultimate resolutions cannot be predicted. As of June 30, 2023 and December 31, 2022, we had no material liabilities established related to the litigation matters mentioned 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. On January 13, 2021, we filed a motion to dismiss, and 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. On December 7, 2022, we filed an opposition to the plaintiffs' motion, and we were awaiting the Court’s decision as of June 30, 2023. We believe the claims made in the case are meritless, and we intend to vigorously defend our position. 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 and entities. 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 TEUs issued in connection with the public offering. From February 2021 to August 2022, this case was stayed in deference to Hunter v. Elanco Animal Health Inc . On October 24, 2022, we filed a motion to dismiss. On December 23, 2022, the plaintiffs filed their opposition to the motion to dismiss. Prior to the ruling on the motion to dismiss, on June 8, 2023, the plaintiffs filed a motion for leave to file a second amended complaint, which is now the operative complaint. Our motion to dismiss the complaint is due on August 7, 2023. We believe the claims made in the case are meritless, and we intend to vigorously defend our position. 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. The trial is scheduled for July 2024. We intend to defend our position vigorously. 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. At this stage, we are unable to estimate the range of any potential loss associated with this matter. Other Commitments As of June 30, 2023, we had 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. Final lease payments may vary depending on the actual cost of certain construction activities. Lease commencement is expected in 2025. The land for our new corporate headquarters is located in a Tax Increment Finance District, and the project is, in part, funded through Tax Incremental Financing (TIF) through an incentive agreement between us and the City of Indianapolis. The agreement provides for an estimated total incentive of $64 million to be funded by the City of Indianapolis in connection with the future tax increment revenue generated from the developed property. In December 2021, as part of a funding and development agreement entered into between us and the developer, we made a commitment to use the expected TIF proceeds towards the cost of developing and constructing the headquarters. In exchange, the developer reimbursed us up to the $64 million commitment in 2021. During 2022, we refunded approximately $15 million of the TIF proceeds to the developer. As a result, it is our expectation that our future lease payments will be reduced. The remaining accrued incentive was included in other noncurrent liabilities on our condensed consolidated balance sheets and will be amortized over the lease term beginning on the commencement date and offset future rent expense.

Earning Per Share

Earning Per Share	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
Earning Per Share	Note 13. Earnings 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. We also had variable common stock equivalents related to the TEU prepaid stock purchase contracts during the three and six months ended June 30, 2022, and in the first quarter of 2023 through the settlement date of February 1, 2023 (see Note 7. Equity for further discussion). Diluted earnings per share reflects the potential dilution that could occur if holders of the unvested equity awards converted their holdings into common stock and that could have occurred if holders of unsettled TEUs had converted their holdings into common stock prior to the February 1, 2023 settlement date. The weighted average number of potentially dilutive shares outstanding was 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 were not included in the calculation of diluted earnings (loss) per share. Basic and diluted weighted-average shares outstanding were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Determination of shares: Basic weighted-average common shares outstanding (1) 492.6 488.4 491.8 488.2 Assumed conversion of dilutive common stock equivalents (2) — — 0.9 3.9 Diluted weighted-average shares outstanding 492.6 488.4 492.7 492.1 (1) The TEU prepaid stock purchase contracts were convertible into a minimum of 14.3 million shares or a maximum of 17.2 million shares. The minimum 14.3 million shares were included in the calculation of basic weighted average shares from January 22, 2020 to February 1, 2023. The 17.2 million shares that were ultimately issued were included in the calculation of basic weighted average shares subsequent to the settlement date of February 1, 2023. (2) For the three months ended June 30, 2023 and 2022, approximately 2.0 million and 3.2 million, respectively, of potential common shares were excluded from the calculation of diluted loss per share because their effect was anti-dilutive. For the six months ended June 30, 2023 and 2022, approximately 1.8 million and 1.6 million, respectively, of potential common shares were excluded from the calculation of diluted loss per share because their effect was anti-dilutive.

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net (loss) income	$ (97)	$ 103	$ (10)	$ 51	$ 6	$ 41

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2023
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 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, 2022 included in our 2022 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, 2023 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.
Implementation of New Financial Accounting Pronouncements	The following table provides a brief description of an accounting standard that was recently 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 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 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. ASU 2022-06 extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024. Adoption of the guidance is optional and effective as of March 12, 2020 through December 31, 2024. Adoption is permitted at any time during the period on a prospective basis. Effective April 1, 2023, and in accordance with the provisions outlined in our underlying credit agreements, we have transitioned the reference rate used in our credit facilities from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (Term SOFR). The change did not have a material impact on our condensed consolidated financial statements.

Implementation of New Financi_2

Implementation of New Financial Accounting Pronouncements (Tables)	6 Months Ended
	Jun. 30, 2023
Accounting Changes and Error Corrections [Abstract]
Schedule of Description of Accounting Standards Adopted and Not Yet Adopted	The following table provides a brief description of an accounting standard that was recently 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 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 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. ASU 2022-06 extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024. Adoption of the guidance is optional and effective as of March 12, 2020 through December 31, 2024. Adoption is permitted at any time during the period on a prospective basis. Effective April 1, 2023, and in accordance with the provisions outlined in our underlying credit agreements, we have transitioned the reference rate used in our credit facilities from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (Term SOFR). The change did not have a material impact on our condensed consolidated financial statements.

Revenue (Tables)

Revenue (Tables)	6 Months Ended
	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Schedule of Activity in Sales Rebates and Discounts Liability	The following table summarizes the activity in our global sales rebates and discounts liability: Six Months Ended June 30, 2023 2022 Beginning balance $ 324 $ 316 Reduction of revenue 387 355 Payments (379) (387) Ending balance $ 332 $ 284
Schedule of Revenue Disaggregated by Product Category	The following table summarizes our revenue disaggregated by product category: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Pet Health $ 518 $ 610 $ 1,193 $ 1,250 Farm Animal: Cattle 210 248 458 495 Poultry 178 174 361 353 Swine 89 89 191 189 Aqua 50 42 90 85 Total Farm Animal 527 553 1,100 1,122 Contract Manufacturing (1) 12 12 21 29 Revenue $ 1,057 $ 1,175 $ 2,314 $ 2,401
Schedule of Revenue Disaggregated by Geographic Area	The following table summarizes our revenue disaggregated by geographic area: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 United States $ 500 $ 539 $ 1,043 $ 1,061 International 557 636 1,271 1,340 Revenue $ 1,057 $ 1,175 $ 2,314 $ 2,401

Acquisitions, Divestitures an_2

Acquisitions, Divestitures and Other Arrangements (Tables)	6 Months Ended
	Jun. 30, 2023
Business Combination and Asset Acquisition [Abstract]
Schedule of Purchase Consideration	The composition of the purchase price was as follows: Up-front cash consideration $ 16 Deferred cash consideration due January 4, 2024 5 Fair value of contingent consideration 37 Total purchase consideration $ 58
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed	The following table summarizes the preliminary amounts recognized for assets acquired as of the acquisition date: Inventory $ 3 Intangible assets: Marketed products 29 Acquired in-process research and development (IPR&D) 10 Other intangible assets 15 Total identifiable assets 57 Goodwill 1 Total consideration transferred $ 58

Asset Impairment, Restructuri_2

Asset Impairment, Restructuring and Other Special Charges (Tables)	6 Months Ended
	Jun. 30, 2023
Restructuring and Related Activities [Abstract]
Schedule of Asset Impairment, Restructuring and Other Special Charges	Components of asset impairment, restructuring and other special charges were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Restructuring charges (credits) (1) $ — $ (1) $ — $ (7) Acquisition related charges (2) 35 26 75 50 Non-cash and other items: Asset impairment (3) — 59 — 81 Settlements and other — 2 — 2 Total expense $ 35 $ 86 $ 75 $ 126 (1) Restructuring credits in 2022 relate to adjustments resulting from the reversal of severance accruals associated with 2021 restructuring programs, resulting from final negotiations and certain restructured employees filling open positions. (2) Acquisition related charges include transaction costs directly related to acquiring businesses, such as expenditures for banking, legal, accounting, consulting and other similar services, and integration charges inclusive of system and process integration and product transfers and independent company stand-up costs related to the implementation of new systems, programs and processes.
Schedule of Activity in Reserves	The changes in our restructuring reserve during the six months ended June 30, 2023, were as follows: Balance at December 31, 2022 $ 36 Cash paid (28) Balance at June 30, 2023 $ 8

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories consisted of the following: June 30, 2023 December 31, 2022 Finished products $ 834 $ 783 Work in process 773 683 Raw materials and supplies 141 130 Total 1,748 1,596 Decrease to LIFO cost (58) (58) Inventories $ 1,690 $ 1,538

Debt (Tables)

Debt (Tables)	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
Schedule of Long-term Debt	Long-term debt consisted of the following: June 30, 2023 December 31, 2022 Incremental Term Facility due 2025 $ 175 $ 175 Incremental Term Facility due 2028 491 494 Incremental Term Facility due 2029 248 249 Term Loan B due 2027 3,860 3,881 Revolving Credit Facility (1) 250 — 4.272% Senior Notes due 2023 (2) 344 344 4.900% Senior Notes due 2028 (3) 750 750 TEU Amortizing Notes due 2023 (4) — 7 Unamortized debt issuance costs (56) (64) 6,062 5,836 Less current portion of long-term debt 39 388 Total long-term debt $ 6,023 $ 5,448 (1) During the six months ended June 30, 2023, we drew $250 million on our Revolving Credit Facility to fund working capital needs. Our Revolving Credit Facility provides up to $750 million in borrowing capacity (with incremental capacity if certain conditions are met), bears interest at Term SOFR plus 2.10% and matures in August 2027. (2) The 4.272% Senior Notes due 2023, issued in August 2018, have been subject to interest rate increases since issuance related to credit rating agency downgrades. As of June 30, 2023, these notes bear interest at a rate of 6.022%. As discussed further below, on August 7, 2023, we redeemed the 4.272% Senior Notes due 2023 in full. (3) The 4.900% Senior Notes due 2028, issued in August 2018, have been subject to interest rate increases since issuance related to credit rating agency downgrades. As of June 30, 2023, these notes bear interest at a rate of 6.650%. (4) The TEU Amortizing Notes due 2023 matured on February 1, 2023 (see Note 7. Equity for further information).

Financial Instruments (Tables)

Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of (Losses) Gain , Net of Tax	The amount of net (losses) gains on derivative instruments not designated as hedging instruments, recorded in other expense (income), net were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Foreign exchange forward contracts (1) $ (1) $ (7) $ 1 $ (15) (1) These amounts were substantially offset in other expense (income), net by the effect of changing exchange rates on the underlying foreign currency exposures. The amounts of net gains (losses) on cash flow hedges recorded, net of tax in other comprehensive income (loss) were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Forward-starting interest rate swaps $ 29 $ 8 $ (19) $ 117

Fair Value (Tables)

Fair Value (Tables)	6 Months Ended
	Jun. 30, 2023
Fair Value Disclosures [Abstract]
Schedule of Fair Value Information	The following table summarizes the fair value information at June 30, 2023 and December 31, 2022 for assets and liabilities measured at fair value on a recurring basis in the respective balance sheet line items, as well as long-term debt, 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 June 30, 2023 Recurring fair value measurements Prepaid expenses and other - derivative instruments $ 40 $ — $ 40 $ — $ 40 Other noncurrent assets - derivative instruments 51 — 51 — 51 Other noncurrent assets - investments with readily determinable fair value 9 9 — — 9 Other current liabilities - derivative instruments (35) — (35) — (35) Other current liabilities - contingent consideration (13) — — (13) (13) Other noncurrent liabilities - contingent consideration (25) — — (25) (25) Financial instruments not carried at fair value Long-term debt, including current portion (6,118) — (5,942) — (5,942) December 31, 2022 Recurring fair value measurements Prepaid expenses and other - derivative instruments $ 90 $ — $ 90 $ — $ 90 Other noncurrent assets - derivative instruments 10 — 10 — 10 Other noncurrent assets - investments with readily determinable fair value 7 7 — — 7 Other current liabilities - derivative instruments (64) — (64) — (64) Financial instruments not carried at fair value Long-term debt, including current portion (5,900) — (5,711) — (5,711)

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Schedule of Provision for Taxes on Income	Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income tax expense (benefit) $ 18 $ (4) $ 23 $ 20 Effective tax rate (23.0) % 28.6 % 79.9 % 32.3 %

Earning Per Share (Tables)

Earning Per Share (Tables)	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
Schedule of Basic And Diluted Weighted-average Shares Outstanding	Basic and diluted weighted-average shares outstanding were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Determination of shares: Basic weighted-average common shares outstanding (1) 492.6 488.4 491.8 488.2 Assumed conversion of dilutive common stock equivalents (2) — — 0.9 3.9 Diluted weighted-average shares outstanding 492.6 488.4 492.7 492.1 (1) The TEU prepaid stock purchase contracts were convertible into a minimum of 14.3 million shares or a maximum of 17.2 million shares. The minimum 14.3 million shares were included in the calculation of basic weighted average shares from January 22, 2020 to February 1, 2023. The 17.2 million shares that were ultimately issued were included in the calculation of basic weighted average shares subsequent to the settlement date of February 1, 2023. (2) For the three months ended June 30, 2023 and 2022, approximately 2.0 million and 3.2 million, respectively, of potential common shares were excluded from the calculation of diluted loss per share because their effect was anti-dilutive. For the six months ended June 30, 2023 and 2022, approximately 1.8 million and 1.6 million, respectively, of potential common shares were excluded from the calculation of diluted loss per share because their effect was anti-dilutive.

Revenue - Narrative (Details)

Revenue - Narrative (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Concentration Risk [Line Items]
Accounts receivable, net	$ 1,000		$ 797
Product Sales
Concentration Risk [Line Items]
Accounts receivable, net	$ 84		$ 73
Customer Concentration Risk | Revenue | Single Customer
Concentration Risk [Line Items]
Concentration risk	9%	10%
Product Return Concentration Risk | Net revenue | Global Customers
Concentration Risk [Line Items]
Concentration risk	1%	1%

Revenue - Activity in Sales Reb

Revenue - Activity in Sales Rebates and Discounts Liability (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Change In Contract With Customer, Liability [Roll Forward]
Beginning balance	$ 324	$ 316
Reduction of revenue	387	355
Payments	(379)	(387)
Ending balance	$ 332	$ 284

Revenue - Disaggregation of Rev

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 1,057	$ 1,175	$ 2,314	$ 2,401
United States
Disaggregation of Revenue [Line Items]
Revenue	500	539	1,043	1,061
International
Disaggregation of Revenue [Line Items]
Revenue	557	636	1,271	1,340
Pet Health
Disaggregation of Revenue [Line Items]
Revenue	518	610	1,193	1,250
Farm Animal
Disaggregation of Revenue [Line Items]
Revenue	527	553	1,100	1,122
Cattle
Disaggregation of Revenue [Line Items]
Revenue	210	248	458	495
Poultry
Disaggregation of Revenue [Line Items]
Revenue	178	174	361	353
Swine
Disaggregation of Revenue [Line Items]
Revenue	89	89	191	189
Aqua
Disaggregation of Revenue [Line Items]
Revenue	50	42	90	85
Contract Manufacturing
Disaggregation of Revenue [Line Items]
Revenue	$ 12	$ 12	$ 21	$ 29

Acquisitions, Divestitures an_3

Acquisitions, Divestitures and Other Arrangements - Schedule of The Composition of The Purchase Consideration (Details) - NutriQuest, LLC $ in Millions	Jan. 03, 2023 USD ($)
Business Acquisition [Line Items]
Up-front cash consideration	$ 16
Deferred cash consideration due January 4, 2024	5
Fair value of contingent consideration	37
Total purchase consideration	$ 58

Acquisitions, Divestitures an_4

Acquisitions, Divestitures and Other Arrangements - NutriQuest US Acquisition & NutriQuest Brazil Acquisition (Details) - USD ($) $ in Millions			3 Months Ended		6 Months Ended
	Aug. 01, 2023	Jan. 03, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Business Acquisition [Line Items]
Revenue			$ 1,057	$ 1,175	$ 2,314	$ 2,401
NutriQuest Brazil | Subsequent Event
Business Acquisition [Line Items]
Cash consideration	$ 3
Future payments	$ 19
NutriQuest, LLC
Business Acquisition [Line Items]
Contingent consideration liability			$ 38		38
Fair value of contingent consideration		$ 37
Weighted average useful life		12 years
NutriQuest, LLC | NutriQuest, LLC
Business Acquisition [Line Items]
Revenue					$ 9
Maximum | NutriQuest, LLC
Business Acquisition [Line Items]
Contingent consideration liability		$ 85

Acquisitions, Divestitures an_5

Acquisitions, Divestitures and Other Arrangements - Amounts Recognized for Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Jun. 30, 2023	Jan. 03, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill	$ 6,040		$ 5,993
NutriQuest, LLC
Business Acquisition [Line Items]
Inventory		$ 3
Total identifiable assets		57
Goodwill		1
Total consideration transferred		58
NutriQuest, LLC | Marketed products
Business Acquisition [Line Items]
Intangible assets		29
NutriQuest, LLC | Acquired in-process research and development (IPR&D)
Business Acquisition [Line Items]
Intangible assets		10
NutriQuest, LLC | Other intangible assets
Business Acquisition [Line Items]
Intangible assets		$ 15

Acquisitions, Divestitures an_6

Acquisitions, Divestitures and Other Arrangements - Divestitures and BexCaFe Arrangement (Details) $ in Millions	1 Months Ended	6 Months Ended	12 Months Ended	23 Months Ended
	May 31, 2023	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Feb. 01, 2022 USD ($)	Dec. 31, 2021 employee
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract with customer, asset, before allowance for credit loss						$ 55
Liabilities		$ 8,376	$ 8,202	$ 8,376
Variable Interest Entity, Primary Beneficiary | BexCaFe, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Liabilities					$ 59
Payment on agreement		13
Variable Interest Entity, Primary Beneficiary | BexCaFe, LLC | Future Milestone Payments And Sales Royalties
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Liabilities		$ 36		36	49
Variable Interest Entity, Primary Beneficiary | BexCaFe, LLC | Acquired in-process research and development (IPR&D)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Finite-lived intangible assets					$ 59
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [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
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on disposal			$ 3
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Shawnee and Speke
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from site divestitures				71
Duration over which proceeds will be received	12 months
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Shawnee and Speke | Other Receivables
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from site divestitures				$ 65

Asset Impairment, Restructuri_3

Asset Impairment, Restructuring and Other Special Charges - Component of Asset Impairment, Restructuring and Other Special Charges (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Restructuring Cost and Reserve [Line Items]
Restructuring charges (credits)	$ 0	$ (1)		$ 0	$ (7)
Acquisition related charges	35	26		75	50
Non-cash and other items:
Asset impairment	0	59		0	81
Settlements and other	0	2		0	2
Total expense	$ 35	86		$ 75	$ 126
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Speke Site
Non-cash and other items:
Asset impairment			$ 22
Variable Interest Entity, Primary Beneficiary | BexCaFe, LLC | Acquired in-process research and development (IPR&D)
Non-cash and other items:
Asset impairment		$ 59

Asset Impairment, Restructuri_4

Asset Impairment, Restructuring and Other Special Charges - Activity in Reserves (Details) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($)
Restructuring Reserve [Roll Forward]
Balance at beginning of period	$ 36
Cash paid	(28)
Balance at end of period	$ 8

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Finished products	$ 834	$ 783
Work in process	773	683
Raw materials and supplies	141	130
Total	1,748	1,596
Decrease to LIFO cost	(58)	(58)
Inventories	$ 1,690	$ 1,538

Equity (Details)

Equity (Details) - Tangible Equity Unit - USD ($) $ / shares in Units, $ in Millions	1 Months Ended
	Jan. 31, 2020	Feb. 01, 2023
Class of Stock [Line Items]
TEUs issued (in shares)	11,000,000
Offering price (usd per share)	$ 50
Proceeds after underwriting discounts and commissions	$ 528
Equity component	86%
Debt component	14%
Settlement rate		156.25%
Shares issued upon conversion of prepaid stock purchase contracts (in shares)		17,000,000
Maximum
Class of Stock [Line Items]
Average applicable market value necessary to be included in calculation of diluted shares outstanding (usd per share)		$ 32

Debt - Long-term Debt (Details)

Debt - Long-term Debt (Details) - USD ($) $ in Millions		6 Months Ended
	Aug. 04, 2023	Jun. 30, 2023	Jun. 30, 2022	Aug. 07, 2023	Dec. 31, 2022	Aug. 31, 2018
Debt Instrument [Line Items]
Unamortized debt issuance costs		$ (56)			$ (64)
Total debt		6,062			5,836
Less current portion of long-term debt		39			388
Total long-term debt		6,023			5,448
Proceeds from revolving credit facility		250	$ 563
Line of Credit | Secured Debt | Incremental Term Facility due 2025
Debt Instrument [Line Items]
Long-term debt, gross		175			175
Line of Credit | Secured Debt | Incremental Term Facility due 2028
Debt Instrument [Line Items]
Long-term debt, gross		491			494
Line of Credit | Secured Debt | Incremental Term Facility due 2029
Debt Instrument [Line Items]
Long-term debt, gross		248			249
Line of Credit | Term Loan B due 2027
Debt Instrument [Line Items]
Long-term debt, gross		3,860			3,881
Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt, gross		250			0
Proceeds from revolving credit facility		250
Credit facility, maximum borrowing capacity		$ 750
Line of Credit | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Basis spread on variable rate		2.10%
Line of Credit | Revolving Credit Facility | Subsequent Event
Debt Instrument [Line Items]
Proceeds from revolving credit facility	$ 100
Senior Notes | Senior Notes due 2023
Debt Instrument [Line Items]
Long-term debt, gross		$ 344			344
Interest rate		4.272%				4.272%
Effective interest rate		6.022%
Senior Notes | Senior Notes due 2023 | Subsequent Event
Debt Instrument [Line Items]
Interest rate				4.272%
Senior Notes | Senior Notes due 2028
Debt Instrument [Line Items]
Long-term debt, gross		$ 750			750
Interest rate		4.90%				4.90%
Effective interest rate		6.65%
Senior Notes | TEU Amortizing Notes due 2023
Debt Instrument [Line Items]
Long-term debt, gross		$ 0			$ 7

Debt - Narrative (Details)

Debt - Narrative (Details) - USD ($) $ in Millions			6 Months Ended
	Aug. 04, 2023	Aug. 03, 2023	Jun. 30, 2023	Jun. 30, 2022	Aug. 07, 2023
Debt Instrument [Line Items]
Proceeds from revolving credit facility			$ 250	$ 563
Subsequent Event
Debt Instrument [Line Items]
Percentage of long term debt bearing fixed interest					75%
Credit Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Proceeds from revolving credit facility			$ 250
Credit Facility | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Basis spread on variable rate			2.10%
Credit Facility | Revolving Credit Facility | Subsequent Event
Debt Instrument [Line Items]
Proceeds from revolving credit facility	$ 100
Securitization Facility | Credit Facility | Secured Debt | Subsequent Event
Debt Instrument [Line Items]
Debt instrument, face amount		$ 300
Proceeds from revolving credit facility		$ 250
Securitization Facility | Credit Facility | Secured Debt | Subsequent Event | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Debt maturity term		3 years
Basis spread on variable rate		1.25%
4.272% Senior Notes due 2023 | Senior Notes | Subsequent Event
Debt Instrument [Line Items]
Interest rate					4.272%

Financial Instruments - Narrati

Financial Instruments - Narrative (Details) - USD ($) $ in Millions		1 Months Ended			3 Months Ended		6 Months Ended
	May 01, 2023	Mar. 31, 2023	Sep. 30, 2022	Apr. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Reclassification of gain (loss) from AOCI					$ 29	$ 1	$ 59	$ (2)
Unrealized gains to be reclassified during next 12 months					$ 108		$ 108
Weighted Average
Derivative Instruments, Gain (Loss) [Line Items]
Effective interest rate					6.28%		6.28%
Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain on investments					$ 55	$ 33	$ 33	$ 142
Cross-currency fixed interest rate swap | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount					988		988		$ 784
Interest Rate Swap | Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount					$ 3,800		$ 3,800		$ 3,050
Increase in derivative notional amount during period	$ 750	$ 1,000
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Cash received for derivative settlement			$ 75	$ 132

Financial Instruments - Net Los

Financial Instruments - Net Losses/Gains on Derivative Instruments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Cross-currency fixed interest rate swap | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange forward contracts	$ (1)	$ (7)	$ 1	$ (15)
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Forward-starting interest rate swaps	$ 29	$ 8	$ (19)	$ 117

Fair Value - Schedule of Fair V

Fair Value - Schedule of Fair Value Information (Details) - Recurring - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
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	(5,942)	(5,711)
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	(6,118)	(5,900)
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt, including current portion	(5,942)	(5,711)
Prepaid expenses and other | 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 | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	40	90
Prepaid expenses and other | 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 | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	40	90
Prepaid expenses and other | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	40	90
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)	0	0
Investments with readily determinable fair value	9	7
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)	51	10
Investments with readily determinable fair value	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
Investments with readily determinable fair value	0	0
Other noncurrent assets | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	51	10
Investments with readily determinable fair value	9	7
Other noncurrent assets | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	51	10
Investments with readily determinable fair value	9	7
Other current liabilities | 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
Contingent consideration	0
Other current liabilities | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	(35)	(64)
Contingent consideration	0
Other current liabilities | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0	0
Contingent consideration	(13)
Other current liabilities | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	(35)	(64)
Contingent consideration	(13)
Other current liabilities | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	(35)	$ (64)
Contingent consideration	(13)
Other noncurrent liabilities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	0
Other noncurrent liabilities | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	0
Other noncurrent liabilities | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	(25)
Other noncurrent liabilities | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	(25)
Other noncurrent liabilities | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	$ (25)

Fair Value - Narrative (Details

Fair Value - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2023	Jan. 03, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Equity method investments	$ 27		$ 27
NutriQuest, LLC
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent consideration liability	$ 38
NutriQuest, LLC | Maximum
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent consideration liability		$ 85

Income Taxes - Provision for Ta

Income Taxes - Provision for Taxes on Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 18	$ (4)	$ 23	$ 20
Effective tax rate	(23.00%)	28.60%	79.90%	32.30%

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 18	$ (4)	$ 23	$ 20
Effective tax rate	(23.00%)	28.60%	79.90%	32.30%
Release of stranded tax benefits		$ 17

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Loss Contingencies [Line Items]
Operating lease, lease not yet commenced liability	$ 378
Lessee, operating lease, lease not yet commenced, term of contract	25 years
New corporate headquarters, estimated total incentive to be funded by TIF	$ 64
Tax incremental financing, commitment amount			$ 64
Refund within next three months		$ 15
Seresto Class Action Lawsuits
Loss Contingencies [Line Items]
Loss contingency accrual	$ 15

Earning Per Share (Details)

Earning Per Share (Details) - shares shares in Millions	3 Months Ended		5 Months Ended	6 Months Ended		36 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Jan. 31, 2023
Determination of shares:
Basic weighted-average common shares outstanding (in shares)	492.6	488.4		491.8	488.2
Assumed conversion of dilutive common stock equivalents (in shares)	0	0		0.9	3.9
Diluted weighted-average shares outstanding (in shares)	492.6	488.4		492.7	492.1
Antidilutive shares not included in calculating diluted loss per share (in shares)	2	3.2		1.8	1.6
Tangible Equity Unit
Determination of shares:
Conversion of tangible equity units (TEUs) into common stock (in shares)			17.2
Minimum | Tangible Equity Unit
Determination of shares:
Conversion of tangible equity units (TEUs) into common stock (in shares)				14.3		14.3
Maximum | Tangible Equity Unit
Determination of shares:
Conversion of tangible equity units (TEUs) into common stock (in shares)				17.2