Audit Information |
12 Months Ended |
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Dec. 31, 2025 | |
| Audit Information [Abstract] | |
| Auditor Name | Ernst & Young LLP |
| Auditor Location | Indianapolis, Indiana |
| Auditor Firm ID | 42 |
Consolidated Statements of Operations - USD ($) shares in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
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| Income Statement [Abstract] | |||
| Revenue | $ 4,715,000,000 | $ 4,439,000,000 | $ 4,417,000,000 |
| Cost of sales | 2,122,000,000 | 2,003,000,000 | 1,931,000,000 |
| Gross Profit | 2,593,000,000 | 2,436,000,000 | 2,486,000,000 |
| Research and development | 368,000,000 | 344,000,000 | 327,000,000 |
| Marketing, selling and administrative | 1,430,000,000 | 1,314,000,000 | 1,285,000,000 |
| Amortization of intangible assets | 543,000,000 | 527,000,000 | 548,000,000 |
| Asset impairment, restructuring and other special charges | 237,000,000 | 150,000,000 | 127,000,000 |
| Goodwill impairment | 0 | 0 | 1,042,000,000 |
| Gain on divestiture | 0 | (640,000,000) | 0 |
| Interest expense, net of capitalized interest | 220,000,000 | 235,000,000 | 277,000,000 |
| Other expense, net | 19,000,000 | 18,000,000 | 75,000,000 |
| (Loss) income before income taxes | (224,000,000) | 488,000,000 | (1,195,000,000) |
| Income tax expense | 8,000,000 | 150,000,000 | 36,000,000 |
| Net (loss) income | $ (232,000,000) | $ 338,000,000 | $ (1,231,000,000) |
| (Loss) earnings per share: | |||
| Basic (usd per share) | $ (0.47) | $ 0.68 | $ (2.50) |
| Diluted (usd per share) | $ (0.47) | $ 0.68 | $ (2.50) |
| Weighted-average shares outstanding: | |||
| Basic (in shares) | 496.4 | 494.0 | 492.3 |
| Diluted (in shares) | 496.4 | 497.3 | 492.3 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
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| Statement of Comprehensive Income [Abstract] | |||
| Net (loss) income | $ (232) | $ 338 | $ (1,231) |
| Other comprehensive income (loss): | |||
| Cash flow hedges, net of taxes | (49) | (20) | (125) |
| Foreign currency translation, net of taxes | 647 | (487) | 293 |
| Defined benefit plans, net of taxes | 32 | 2 | (42) |
| Other comprehensive income (loss), net of taxes | 630 | (505) | 126 |
| Comprehensive income (loss) | $ 398 | $ (167) | $ (1,105) |
Consolidated Balance Sheets (Parenthetical) - shares |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
| Preferred stock issued (in shares) | 0 | 0 |
| Common stock authorized (in shares) | 5,000,000,000 | 5,000,000,000 |
| Common stock issued (in shares) | 496,975,154 | 494,445,839 |
| Common stock outstanding (in shares) | 496,975,154 | 494,445,839 |
Background and Basis of Presentation |
12 Months Ended |
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Dec. 31, 2025 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Background and Basis of Presentation | Note 1. Background and Basis of Presentation Elanco Animal Health Incorporated (collectively, Elanco, the Company, we, us, or our) is a global leader in animal health dedicated to innovating and delivering products and services to prevent and treat disease in farm animals and pets. Elanco was incorporated in Indiana on September 18, 2018, and prior to that was a business unit of Eli Lilly and Company (Lilly). Our diverse, durable product portfolio of approximately 200 brands is sold in more than 90 countries and serves animals across many species, primarily: dogs and cats (collectively, pet health) and cattle, poultry, swine and sheep (collectively, farm animal). Our products are generally sold worldwide to third-party distributors and independent retailers and directly to farm animal producers and veterinarians. Additionally, our omnichannel presence allows us to sell into both the veterinary clinic and retail markets, including e-commerce. We have prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States (GAAP). In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for fair presentation of the results of operations for the periods shown. All intercompany balances and transactions have been eliminated, and we have evaluated subsequent events up to the time of filing.
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Summary of Significant Accounting Policies |
12 Months Ended |
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Dec. 31, 2025 | |
| Accounting Policies [Abstract] | |
| Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The following is a summary of significant accounting policies used in the preparation of the accompanying consolidated financial statements. Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires us to make estimates and judgments 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. These estimates and underlying assumptions can impact all elements of our consolidated financial statements. Our estimates are often based on several factors, including the facts and circumstances available at the time the estimates are made, historical experience, risk of loss, general economic conditions and trends and the assessment of the probable future outcome. Some of our estimates require significant, difficult or complex judgments, probabilities and assumptions that we believe to be reasonable but that can be inherently uncertain and unpredictable. If our estimates and assumptions are not representative of actual outcomes, our results could be materially impacted. We regularly evaluate our estimates and assumptions and adjust them when facts and circumstances indicate the need for change. Such changes generally would be reflected in our consolidated financial statements in the period they are determined. We apply estimation methodologies consistently from year to year. 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 obligation, which is generally once the goods have 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 service. Royalty revenue represents sales-based royalties that are recognized in the period in which the underlying sales occur. Revenue reflects the total consideration to which we expect to be entitled (i.e., the transaction price) after considering various types of variable consideration such as rebates, sales allowances, product returns and discounts. Provisions for returns, rebates and discounts are established in the same period the related sales are recognized. Significant judgments must be made in determining the transaction price for sales of products related to anticipated rebates, discounts and returns. The following describe the most significant of these judgments: Sales Rebates and Discounts •Many of our products are sold and initially invoiced at contractual list prices. Contracts with customers often provide for various rebates and discounts that may differ in each contract. To determine the appropriate transaction price for our product sales, we must estimate any rebates or discounts that will ultimately be due to the customer and/or other customers in the distribution chain under the terms of our contracts. Rebate and discount amounts are recorded as a reduction to revenue and as a liability in the period the underlying revenue is recognized. In determining the appropriate net revenue, we consider our historical experience with similar incentives programs, current sales data and contract information and estimates of inventory levels at our channel distributors, among other factors, to evaluate the impact of such programs on revenue. We continually monitor the impact of this experience and adjust our accrual amounts as needed. Sales Returns •We estimate a reserve for future product returns based on several factors, including local returns policies and practices, historical returns as a percentage of revenue, an understanding of the reasons for past returns, estimated shelf life by product and estimates of the amount of time between shipment and return. Reserves for sales returns are estimated and recorded as a reduction to revenue and as a liability in the period the underlying revenue is recognized. Payment terms differ by jurisdiction and customer but typically range from 30 to 120 days from date of shipment in most of our major jurisdictions. Revenue for our product sales has not been adjusted for the effects of a financing component, as we expect the period between when we transfer control of the product and when we receive payment will be one year or less. Any exceptions are either not material, or we collect interest for payments made after the due date. Shipping and handling activities are considered fulfillment activities and are not considered a separate performance obligation. We exclude from our measurement of the transaction price all taxes assessed by a governmental authority that are imposed on our sales of products and collected from a customer. Allowance for Doubtful Accounts We provide for an allowance for doubtful accounts, which represents our best estimate of expected lifetime credit losses inherent in our accounts and other receivables portfolios. Our estimates include a continuing credit evaluation of customers' financial condition, trade accounts and other receivables aging and historical loss experience, as well as reasonable and supportable forecasts of future economic conditions. As of December 31, 2025 and 2024, we had an allowance for doubtful accounts of $17 million and $13 million, respectively. Inventories We state all inventories at the lower of cost and net realizable value. We value a majority of our inventories using the first-in-first-out (FIFO) method, although at December 31, 2025 and 2024, $373 million and $301 million, respectively, of our total inventories were valued using the last-in, first-out (LIFO) method. Property and Equipment Property and equipment assets placed into service are recorded at cost and depreciated using the straight-line method over their estimated useful life (12 to 50 years for buildings and 3 to 25 years for equipment), except for certain leasehold improvements, which are depreciated over the shorter of their economic useful life or remaining lease term. Repair and maintenance costs that do not extend the useful life of the asset are expensed as incurred. Major replacements and significant improvements that either increase asset values or extend useful lives are capitalized. We assess the recoverability of the carrying value of property and equipment whenever events or changes in circumstances indicate the carrying amount may not be fully recoverable. When such indications of a potential impairment exist, we compare the projected undiscounted cash flows to be generated by the asset (or asset group) to its carrying value. If the carrying amount is found to be greater, an impairment charge is recorded equal to the excess of the asset's carrying value over its fair value. In such an event, we also re-evaluate the remaining useful life of the asset (or asset group) and modify it, as appropriate. Goodwill and Indefinite-lived Intangible Assets Goodwill represents the excess of the consideration transferred in a business combination over the assigned fair value of the net assets of the acquired business. Goodwill is not amortized but is reviewed at least annually for impairment during the fourth quarter, or more frequently if there is a significant change in events or circumstances that indicate the fair value of our single reporting unit is more likely than not less than its carrying amount (a "triggering event"). We begin by assessing qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying value. Based on this qualitative assessment, if we conclude it is more likely than not that the fair value of our single reporting unit is less than its carrying value, we conduct a quantitative goodwill impairment test, which involves a comparison of the estimated fair value of our single reporting unit to its carrying value, including goodwill. When required, we estimate the fair value of our single reporting unit using an 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. If the carrying value of our single reporting unit exceeds its estimated fair value, we will recognize an impairment loss for the difference. The income approach represents a Level 3 fair value measurement in the fair value hierarchy (see Note 9. Fair Value for further information). When a quantitative goodwill impairment test is required, significant management judgment is involved in estimating our single reporting unit’s fair value, including in the creation of forecasts of future operating results to be used in the income approach valuation. These significant judgments include, but are not limited to, estimates and assumptions regarding our future cash flows, revenue growth rates, profitability measures such as gross margin and earnings before interest, taxes, depreciation and amortization (EBITDA) margin and the determination of an appropriate discount rate. Similar to goodwill, indefinite-lived intangible assets, which primarily represent in-process research and development (IPR&D) assets acquired from prior business combinations, are reviewed annually for impairment during the fourth quarter, or more frequently in the event of a triggering event. We utilize an income approach for determining the estimated fair value of indefinite-lived intangible assets upon acquisition and as needed for evaluations of potential impairment. Acquired IPR&D assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are tested for impairment and, if not impaired, are transferred to marketed products and amortized over their estimated economic life. Finite-lived Intangible Assets Finite-lived intangible assets primarily relate to marketed products acquired or licensed from third parties and software. Marketed products consist of the amortized cost of the rights to assets acquired in business combinations and approved for marketing in a significant global jurisdiction. The cost basis of marketed products includes both the initial assigned IPR&D value, as well as any associated milestone payments subsequent to the product receiving regulatory approval in a significant global jurisdiction. Software consists of certain costs incurred in connection with obtaining or developing internal-use software, including compensation and benefits for employees directly associated with the internal-use software projects and direct costs of external resources. Other finite-lived intangible assets consist primarily of the amortized cost of licensed platform technologies, manufacturing technologies, customer relationships and finite-lived trade names. Intangible assets with finite lives are capitalized and amortized over their estimated economic lives, typically ranging from 3 to 20 years. We assess the recoverability of the carrying value of finite-lived intangible assets in the same manner as property and equipment, as described above. Research and Development Expenses Research and development (R&D) costs are expensed as incurred and relate to the effort associated with the discovery of new knowledge that will be useful in developing a new product or in significantly improving an existing product and the implementation of research findings. R&D costs include, but are not limited to, compensation and benefits, facilities and overhead expenses, clinical trial expenses and fees paid to contract research organizations. We may also enter into licensing arrangements with third parties to acquire the rights to IPR&D. These arrangements typically do not meet the definition of a business combination. In such arrangements, prior to regulatory approval of a product, we record upfront and milestone payments to third parties as expense when the event requiring the upfront or milestone payment occurs. Advertising Expenses Costs associated with advertising, including costs for TV, radio and other electronic media and publications, are generally expensed when the related advertising occurs, and are included in marketing, selling and administrative expenses in the consolidated statements of operations. Advertising expenses for the years ended December 31, 2025, 2024 and 2023, approximated $314 million, $236 million and $207 million, respectively. Financial Instruments We utilize various financial instruments to help manage our exposures to market risks, such as changes in foreign currency exchange rates and variable interest rates. At inception, 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. We also assess at least quarterly thereafter whether the qualifying derivative instrument continues to be effective at offsetting changes in either the fair values or cash flows of the underlying exposures. Derivative cash flows are principally classified in the operating activities section of the consolidated statements of cash flows, consistent with the underlying hedged item, while cash proceeds from or payments for the settlement of net investment hedges are classified as investing activities. Our financial instruments are recorded at their fair values on our consolidated balance sheets, and we do not offset derivative assets and liabilities. Fair values are estimated based on quoted market values for similar instruments and are classified as Level 2 in the fair value hierarchy. As of December 31, 2025 and 2024, we held the following types of financial instruments: Derivatives Not Designated as Hedges •Foreign currency derivatives used for hedging our exposure to fluctuating currency exchange rates are put in place using the same or like currencies and duration as the underlying exposures and are recorded at fair value, with gains or losses recognized in other expense, net in the consolidated statements of operations. These instruments generally have maturities not exceeding 12 months. Derivatives Designated as Hedges – Net investment hedges •Cross-currency fixed interest rate swaps determined to be effective economic hedges of net investments in foreign denominated net assets are designated as net investment hedges. Gains or losses on our net investment hedges due to spot rate fluctuations are recorded as cumulative translation adjustments, a component of other comprehensive income (loss). Gains and losses will remain in accumulated other comprehensive income (loss) until either the sale or substantial liquidation of the hedged subsidiary. Derivatives Designated as Hedges – Interest rate swaps •Interest rate swap contracts are used to effectively convert a portion of our variable-rate debt into fixed-rate debt. Differences between the variable interest rate payments and the fixed interest rate settlements with the swap counterparties are recorded as an adjustment to interest expense, net of capitalized interest over the life of the swaps. Changes in the fair value of interest rate swaps are recognized in other comprehensive income (loss) and reclassified into earnings through interest expense, net of capitalized interest at the time earnings are affected by the hedged transaction. Foreign Currency Translation Operations in our subsidiaries outside the U.S. are recorded in the functional currency of each subsidiary, which is determined by a review of the environment where each subsidiary primarily generates and expends cash. The results of operations for our subsidiaries outside the U.S. where the U.S. dollar is not the functional currency, are translated from the functional currency into U.S. dollars using the exchange rates in effect as of the date of the transactions, or a reasonable approximation thereof, such as the weighted-average currency rate for the period. Assets and liabilities are translated using the period-end exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries are recorded in other comprehensive income (loss). Foreign currency transaction gains and losses are due to the effect of exchange rate changes on transactions denominated in currencies other than a subsidiary's functional currency and are recognized in other expense, net, in the consolidated statements of operations in the period incurred. Transaction losses of $14 million, $12 million and $40 million were recorded during the years ended December 31, 2025, 2024 and 2023, respectively. We generally identify hyperinflationary markets as those markets whose cumulative inflation rate over a three-year period exceeds 100%. Translation adjustments resulting from the application of hyperinflationary accounting are also recognized in other expense, net, in the consolidated statements of operations in the period incurred. Recently Adopted Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which was intended to enhance the transparency and usefulness of income tax disclosures by providing incremental and disaggregated income tax disclosures pertaining to the effective tax rate reconciliation and income taxes paid by jurisdiction. We adopted this standard on a prospective basis for the year ended December 31, 2025. See Note 15. Income Taxes for further details. Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed and disaggregated information about significant expense categories, such as purchases of inventory, employee compensation, depreciation and amortization and selling expenses. This new standard, including related updates, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively. We are currently assessing the impact ASU 2024-03 will have on our consolidated financial statements, including our footnote disclosures. Other Significant Accounting Policies Our other significant accounting policies are described in the remaining appropriate notes to the consolidated financial statements.
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| Revenue | Note 3. Revenue The following table summarizes the activity in our global sales rebates and discounts liability for the years ended December 31:
Adjustments to revenue recognized as a result of changes in estimates during the years ended December 31, 2025, 2024 and 2023, for product shipped in previous periods were not material. Actual global product returns approximated 1% of net revenue in each of the years ended December 31, 2025, 2024 and 2023. Disaggregation of Revenue The following table summarizes our revenue disaggregated by product category for the years ended December 31:
(1)On July 9, 2024, we sold our aqua business to a subsidiary of Merck Animal Health (see Note 4. Acquisitions and Divestitures for further details). (2)Represents revenue from arrangements in which we manufacture products on behalf of a third party and royalty revenue. In May 2025, we entered into an agreement to sell certain qualifying royalties, among other potential future cash flows, to a third party for proceeds of $295 million in cash. While we are no longer entitled to these qualifying royalties, we are required under GAAP to continue recognizing them as revenue. For the year ended December 31, 2025, royalty revenue associated with this arrangement, which is reflected within Contract Manufacturing and Other in the table above, totaled $19 million. See Note 10. Liability for Sale of Future Revenue for additional information. The following table summarizes our revenue disaggregated by geographic area for the years ended December 31:
We have a single customer that accounted for approximately 12%, 11% and 10% of revenue for the years ended December 31, 2025, 2024 and 2023, respectively. Product sales with this customer resulted in accounts receivable of $107 million and $90 million as of December 31, 2025 and 2024, respectively.
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| Acquisitions and Divestitures | Note 4. Acquisitions and Divestitures Acquisitions In November 2024, we acquired a manufacturing facility in Speke, United Kingdom (U.K.), including its workforce and related assets such as inventory and property and equipment (Speke), from a former contract manufacturing supply partner, TriRx Speke Ltd (TriRx Speke). During 2023, we completed the acquisitions of certain U.S. marketed products, pipeline products, inventory and an assembled workforce from NutriQuest, LLC (NutriQuest), a provider of swine, poultry and cattle nutritional health products to animal producers, and certain assets including inventory and distribution rights for certain marketed products from NutriQuest Nutricao Animal Ltda (NutriQuest Brazil). These transactions were all accounted for as business combinations under the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The excess of the purchase price over the fair value of the acquired net assets, where applicable, has been recorded as goodwill. Speke: In 2021 and 2022, respectively, we sold manufacturing facilities in Shawnee, Kansas, and Speke, United Kingdom (U.K.), to TriRx Pharmaceuticals (TriRx). We received cash proceeds from our sale of these facilities over several years, with the final cash payment of $66 million received from TriRx, in addition to accrued interest, during the first quarter of 2024. Concurrent with our initial sale of the Speke facility to TriRx, we entered into a long-term supply agreement with them for a number of farm animal product lines. Because we determined this supply agreement to be on favorable terms to us, we recorded a contract asset associated with it. In 2023, due to a forecasted decline in cash flows associated with this contract asset, we determined the asset was partially impaired, and we recorded a $26 million impairment charge. In September 2024, TriRx Speke entered into trading administration, a formal insolvency process in the U.K. At this time, we impaired the remaining $12 million value of this contract asset. Each of these impairment charges was recorded within asset impairment, restructuring and other special charges within our consolidated statements of operations. To minimize supply disruption for our impacted product lines, we acquired Speke on November 15, 2024, for $36 million. The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:
NutriQuest: On January 3, 2023, we acquired NutriQuest for total purchase consideration of $59 million. The composition of the purchase price was as follows:
The following table summarizes the fair value of assets acquired as of the acquisition date:
Other intangible assets consisted of customer relationships and trade names. The acquired finite-lived intangible assets are being amortized over a weighted-average useful life of approximately 12 years on a straight-line basis. NutriQuest Brazil: On August 1, 2023, we acquired NutriQuest Brazil for total purchase consideration of $19 million. The following table summarizes the fair values of assets acquired as of the acquisition date:
Divestitures New Zealand manufacturing facility: In February 2025, we sold our manufacturing facility in Manukau, New Zealand, to a third party for cash proceeds of $9 million. Assets divested included property and equipment related to the facility and inventory. Additionally, approximately 50 individuals were transferred to the new owners as part of the divestiture. This transaction did not result in a material gain or loss on divestiture. Aqua business: On July 9, 2024, we sold our aqua business to Intervet International B.V., a Dutch subsidiary of Merck Animal Health, for $1,294 million in cash, the vast majority of which was utilized to repay previously outstanding term loan debt. Our aqua business included products across both warm-water and cold-water species and generated revenues of $81 million in 2024, through the divestiture date, and $175 million in 2023. Assets sold included inventories, real property and equipment, including our manufacturing sites in Canada and Vietnam, and certain intellectual property, technology and other intangible assets, including marketed products. Additionally, approximately 280 commercial and manufacturing employees were transferred to Merck Animal Health as part of this divestiture. As of the disposal date, the carrying amounts of the following major assets were derecognized from our consolidated balance sheet:
Based on the aggregate carrying value of our aqua business and $20 million of costs to sell, we recorded a pre-tax gain on divestiture of $640 million. We also recognized income tax expense of $170 million related to the taxable gain. In determining the amount of goodwill to include in our disposal group, a portion of our single reporting unit’s goodwill was allocated to it on a relative fair value basis by comparing the fair value of the disposal group to the estimated fair value of our single reporting unit as a whole. We estimated the fair value of our single reporting unit using the income approach. Significant management judgment was required in estimating the fair value of our single reporting unit, including, but not limited to, estimates and assumptions regarding future cash flows of our single reporting unit, revenue growth and other profitability measures, such as gross margin and earnings before interest, taxes, depreciation and amortization (EBITDA) margin, and the determination of an appropriate discount rate. We considered this valuation approach to be a Level 3 measurement under the fair value hierarchy.
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Asset Impairment, Restructuring and Other Special Charges |
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| 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. For example, in December 2025 our Board of Directors authorized a restructuring plan (the 2025 Restructuring Plan) to support margin expansion, optimize our global footprint and further invest in innovation. Specifically, the 2025 Restructuring Plan targeted an expected 2026 closure of the animal studies portion of our R&D facilities in Monheim, Germany, while also expanding our R&D organization in Indianapolis, Indiana, among other changes to our R&D organization. The 2025 Restructuring Plan is also expected to result in our exit from certain farm animal implant products and the related closure of our manufacturing facility in Kansas City, Kansas. Additionally, in February 2024, our Board of Directors authorized a separate restructuring plan (the 2024 Restructuring Plan) to improve operational efficiencies and better align our organizational structure with business needs, top strategic priorities and key growth opportunities. Specifically, the 2024 Restructuring Plan reallocated resources by shifting international resources from farm animal to pet health in anticipation of the global launches of several potential blockbuster products. The 2024 Restructuring Plan also impacted how we operate in and sell into the Argentina market, among others. We have also incurred costs associated with executing acquisitions, divestitures and other significant transactions and related integration and/or separation activities. Components of asset impairment, restructuring and other special charges for the years ended December 31 were as follows:
(1)Restructuring charges in 2025 primarily related to $116 million of expected cash-based severance costs associated with the 2025 Restructuring Plan, as well as $39 million primarily consisting of non-cash asset impairment charges associated with our animal studies research facilities in Monheim, Germany, and our manufacturing facility in Kansas City, Kansas. Restructuring charges in 2024 primarily related to cash-based severance charges associated with the 2024 Restructuring Plan. (2)Acquisition and divestiture-related charges in 2024 primarily consisted of transaction costs related to the divestiture of our aqua business (see Note 4. Acquisitions and Divestitures for further information). Acquisition and divestiture-related charges in 2023 primarily represented costs associated with the implementation of new systems, programs and processes due to the integration of Bayer Animal Health. (3)Asset impairments in 2025 primarily included a $47 million impairment of a marketed product intangible asset due to a decline in projected sales of a product group acquired in a past acquisition and $16 million in impairments related to two early-stage capital projects that were indefinitely suspended. Asset impairments in 2024 principally included a $53 million write-off of an IPR&D asset and $15 million of asset impairments tied to the financial difficulties of TriRx Speke (see Note 4. Acquisitions and Divestitures for further information). Asset impairments in 2023 primarily included a $26 million partial write-down of a contract asset with TriRx Speke. The following table summarizes the activity in our reserves established in connection with restructuring activities:
Timing of when restructuring reserve obligations are expected to be paid can vary due to country-specific negotiations and regulations. As of December 31, 2025, $80 million of our restructuring reserve was classified within other current liabilities on our consolidated balance sheet, with the remainder classified within other noncurrent liabilities.
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Inventories |
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| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | Note 6. Inventories Inventories at December 31 consisted of the following:
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Debt and Finance Lease Liability |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt and Finance Lease Liability | Note 7. Debt and Finance Lease Liability Our long-term debt and finance lease liability as of December 31, consisted of the following:
(1)On October 31, 2025, we repaid our Term Loan B due 2027 in full, primarily with the proceeds from three new debt facilities, our Term Loan B due 2032, Euro Term Loan due 2029 and Incremental Term Facility due 2032 (see below for further details). (2)In June 2025, we entered into a finance lease arrangement for our new corporate headquarters. See Note 13. Leases for further information. Term Loan B due 2027 and Revolving Credit Facility In 2020, we simultaneously entered into our Term Loan B due 2027 facility and Revolving Credit Facility. In July 2024, we amended our Revolving Credit Facility, which extended its maturity through July 2029. Our Revolving Credit Facility provides up to $750 million in borrowing capacity and bears interest at Term SOFR plus a spread, dependent on our Net Total Leverage Ratio, as defined within the amended agreement, which was 1.50% at December 31, 2025. There are two financial maintenance covenants under our Revolving Credit Facility which are solely for the benefit of the lenders, a net total leverage ratio covenant and an interest coverage ratio covenant. The net total leverage ratio covenant requires us to maintain a net total leverage ratio (which is not subject to step-downs) as of the end of each quarter. The required level of this covenant is based on the ratio of our pro forma net debt to our pro forma adjusted EBITDA not to exceed 7.71 to 1.00 for the preceding four fiscal quarters. The interest coverage ratio covenant requires us to maintain a ratio of pro forma adjusted EBITDA to cash interest expense for the preceding four fiscal quarters of no less than 2.00 to 1.00. We were in compliance with all of our debt covenants as of December 31, 2025. During the year ended December 31, 2025, we both borrowed and repaid $125 million on our Revolving Credit Facility. On October 31, 2025, we entered into three new debt facilities, our Term Loan B due 2032, Euro Term Loan due 2029 and Incremental Term Facility due 2032 (all described below) for aggregate gross proceeds of $2,106 million. We simultaneously repaid our Term Loan B due 2027 in full utilizing these proceeds, net of issuance costs and discounts of approximately $32 million, and cash on hand. With this repayment, all obligations and commitments under our Term Loan B due 2027 were satisfied. We recognized charges of $20 million during the year ended December 31, 2025, related to refinancing costs and the write-off of previously deferred financing costs, which were included within interest expense, net of capitalized interest in the consolidated statement of operations. Term Loan B due 2032 On October 31, 2025, concurrent with the repayment of our Term Loan B due 2027, we entered into a new Term Loan B (the Term Loan B due 2032) in the amount of $1,100 million. The Term Loan B due 2032 bears interest at Term SOFR plus 1.75% and amortizes in quarterly required principal payments of 0.25%, with a final balloon payment due on the scheduled maturity date of October 31, 2032. Euro Term Loan due 2029 On October 31, 2025, we also entered into a Euro Term Loan A facility (the Euro Term Loan due 2029) in the amount of €400 million. The Euro Term Loan due 2029 bears interest at the Euro Interbank Offered Rate (EURIBOR) plus a spread dependent on our Net Total Leverage Ratio, as defined within the agreement, which was 1.50% at December 31, 2025, and amortizes in quarterly required principal payments of 1.875%, with a final balloon payment due on the scheduled maturity date of April 30, 2029. Our Euro Term Loan due 2029 has both a net total leverage ratio covenant and an interest coverage ratio covenant, both of which are consistent with our Revolving Credit Facility's financial maintenance covenants. Additional Term Facilities Incremental Term Facility due 2028: Our Incremental Term Facility due 2028 bears interest at Term SOFR plus 1.75% and is payable in quarterly installments of principal and interest with a final balloon payment due at scheduled maturity on August 12, 2028. The terms of the Incremental Term Facility due 2028 are generally consistent with the terms of our Term Loan B due 2032 and Revolving Credit Facility. Incremental Term Facility due 2029: Our Incremental Term Facility due 2029 bears interest at Term SOFR plus 1.75% and is payable in quarterly installments of principal and interest with a final balloon payment due at scheduled maturity on April 19, 2029. The terms of the Incremental Term Facility due 2029 are generally consistent with the terms of our Term Loan B due 2032 and Revolving Credit Facility. Incremental Term Facility due 2031: Our Incremental Term Facility due 2031 bears interest at Term SOFR plus 1.75% and is payable in quarterly installments of principal and interest with a final balloon payment due at scheduled maturity on August 13, 2031. The terms of the Incremental Term Facility due 2031 are generally consistent with the terms of our Term Loan B due 2032 and Revolving Credit Facility. Incremental Term Facility due 2032: On October 31, 2025, we also entered into an incremental term facility with an aggregate principal amount of $540 million. The Incremental Term Facility due 2032 bears interest at Term SOFR plus 2.25% and amortizes in quarterly required principal payments of 0.25%, with a final balloon payment due at scheduled maturity on October 31, 2032. The terms of the Incremental Term Facility due 2032 are generally consistent with the terms of our Term Loan B due 2032 and Revolving Credit Facility. Securitization Facility In August 2023, we entered into a secured term facility (the Securitization Facility), which is secured and collateralized by our U.S. accounts receivable, subject to certain adjustments (defined as the Net Eligible Receivables Balance within the applicable agreement). The terms of the agreement result in an amount of our U.S. accounts receivable, equivalent to the outstanding balance of the Securitization Facility at any point in time, being pledged to the lender as collateral for the borrowings. Our borrowing capacity under our Securitization Facility is subject to monthly fluctuation, based on the level of our borrowing base as reported to the lender, which is correlated to our U.S. Net Eligible Receivables Balances, with a maximum borrowing capacity not to exceed $300 million. The Securitization Facility requires monthly interest payments over its term at a variable rate based on Term SOFR plus 1.25%. On June 25, 2025, we amended our Securitization Facility, which extended its maturity through June 2028 and made other amendments to certain covenants and other terms of the agreement. The Securitization Facility also includes various covenants specific to the underlying composition of our U.S. accounts receivables portfolio, all of which we were in compliance with as of December 31, 2025. During the year ended December 31, 2025, we both borrowed and repaid $125 million on our Securitization Facility. Senior Notes In August 2018, we issued $750 million of 4.900% Senior Notes due August 28, 2028 (the Senior Notes due 2028). The interest rate payable on the Senior Notes due 2028 is subject to adjustment in the event of credit rating agency downgrades, which last occurred in April 2023, and as of December 31, 2025, these notes bore interest at a rate of 6.650%. The indenture that governs these notes contains covenants that limit our ability to incur liens or engage in sale-leaseback transactions. The indenture also contains restrictions on our ability to consolidate, merge or sell substantially all of our assets, in addition to other customary terms. We were in compliance with all such covenants under the indenture governing our Senior Notes due 2028 as of December 31, 2025. Finance Lease Obligation In June 2025, we commenced a five-year finance lease for our new corporate headquarters in Indianapolis, Indiana. The right-of-use (ROU) asset related to this finance lease is included within property and equipment, net, while the finance lease liabilities are classified within both the current and noncurrent portions of long-term debt and finance lease liability on our consolidated balance sheet. See Note 13. Leases for further information. Scheduled Repayments As of December 31, 2025, future required principal payments on our outstanding indebtedness, excluding our finance lease payments which are included in the future minimum lease payment schedule within Note 13. Leases, for each of the next five years and thereafter, were as follows:
As of December 31, 2025, approximately 80% of our long-term indebtedness, excluding our finance lease liability, bore interest at a fixed rate, including variable-rate debt converted to fixed-rate through the use of interest rate swaps (see Note 8. Financial Instruments for further information). Cash payments for interest, excluding the interest component of our finance lease payments, during the years ended December 31, were as follows:
(1)Reflected within the above totals are $43 million, $31 million and $4 million of cash interest received from our net investment hedges during the years ended December 31, 2025, 2024 and 2023, respectively. See Note 8. Financial Instruments for further information on our net investment hedges.
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Financial Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instruments | Note 8. Financial Instruments To manage our exposure to market risks, such as changes in foreign currency exchange rates and variable interest rates, we have entered into various derivative transactions. Our outstanding positions are discussed below. Derivatives Not Designated as Hedges We may enter into foreign currency exchange forward or option contracts to reduce the effects of fluctuating currency exchange rates. As of December 31, 2025 and 2024, we had outstanding foreign currency exchange contracts with aggregate notional amounts of $1,090 million and $1,016 million, respectively. The amounts of net gains (losses) on our derivative instruments not designated as hedging instruments, recorded in other expense, net for the years ended December 31, were as follows:
(1)These amounts were substantially offset in other expense, net by the effect of changing exchange rates on the underlying foreign currency exposures. Derivatives Designated as Hedges – Net investment hedges At December 31, 2024, we had a series of cross-currency fixed interest rate swaps to help mitigate the impact of foreign currency fluctuations on our operations in Switzerland with a combined 1,000 million CHF notional amount with tenors in August and November of 2026 and February of 2027. In January 2025, we took advantage of market opportunities to restructure our net investment hedges, paying $10 million to settle these instruments. We simultaneously entered into new cross-currency fixed interest rate swaps with the same 1,000 million CHF notional amounts and covering the same tenors. These instruments were determined to be, and have been designated as, effective economic hedges of net investments in our CHF denominated net assets. The amounts of (losses) gains on net investment hedges, net of tax, recorded in accumulated other comprehensive loss for the years ended December 31, were as follows:
For the years ended December 31, 2025, 2024 and 2023, these instruments also generated $45 million, $31 million and $9 million of interest income, respectively, which was included as a contra interest expense, net of capitalized interest in our consolidated statements of operations. Derivatives Designated as Hedges – Interest rate swaps We had outstanding interest rate swaps with aggregate notional amounts of $2,300 million and $2,800 million as of December 31, 2025 and 2024, respectively, which have scheduled maturities in 2026. In October 2025, we settled an aggregate $500 million notional amount of existing interest rate swaps, paying an immaterial amount upon settlement. As of December 31, 2025 and 2024, we also had forward-starting interest rate swap agreements with a combined notional amount of $850 million, which will become effective on August 1, 2026, and have scheduled maturities between 2028 and 2031. The amounts of (losses) gains on interest rate swap contracts, net of tax, recorded in accumulated other comprehensive loss for the years ended December 31, were as follows:
The amounts of gains reclassified out of accumulated other comprehensive loss and recognized into earnings through interest expense, net of capitalized interest for the years ended December 31, were as follows:
Over the next 12 months, we expect to reclassify a loss of $13 million out of accumulated other comprehensive loss and into interest expense, net of capitalized interest related to our interest rate swaps, although the actual amounts reclassified may vary as a result of future changes in market conditions. As of December 31, 2025, when factoring in the impact from our interest rate swaps, the weighted-average effective interest rate on our outstanding indebtedness, excluding our finance lease liability, was 5.76%.
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Note 9. 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 are based on unobservable inputs based on little or no market activity. As of December 31, 2025 and 2024, contingent consideration liabilities reported within the fair value table below primarily stem from our 2023 acquisition of NutriQuest (see Note 4. Acquisitions and Divestitures for further information). The fair values of these liabilities were estimated using a Monte Carlo simulation model, consisting of Level 3 inputs not observable in the market, including estimates relating to revenue forecasts, discount rates and volatility. The following table summarizes the fair value information at December 31, 2025 and 2024, 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 excluding our finance lease liability, for which fair value is disclosed on a recurring basis:
Cash and cash equivalents include cash on hand and all highly liquid investments with original maturities at the time of purchase of three months or less. The carrying values of cash and cash equivalents, accounts and other receivables, accounts payable and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these assets and liabilities. Further, we had investments without readily determinable fair values, which were classified as other noncurrent assets on our consolidated balance sheets totaling $15 million and $17 million as of December 31, 2025 and 2024, respectively. These investments are not recorded at fair value on a recurring basis, and as such, are not included in the fair value table above. We also had contingent consideration liabilities totaling $31 million and $32 million as of December 31, 2025 and 2024, respectively, related to a license agreement we signed in 2022 for the development and commercialization of products related to Bexacat. These contingent consideration liabilities, which are principally recorded within other noncurrent liabilities on our consolidated balance sheets, are not included in the fair value table above, as they are not recorded at fair value on a recurring basis.
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Liability for Sale of Future Revenue |
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Liability For Sale Of Future Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
| Liability for Sale of Future Revenue | Note 10. Liability for Sale of Future Revenue In May 2025, we executed a Purchase and Sale Agreement (PSA) with funds affiliated with Blackstone Life Sciences and Blackstone Credit & Insurance (collectively, Blackstone). Pursuant to the PSA, we received a cash payment of $295 million from Blackstone for the rights to the proceeds from (a) the future royalties we are owed from net sales in the U.S. of XDEMVY® (lotilaner ophthalmic solution) 0.25%, a medical treatment for Demodex blepharitis in humans, by Tarsus Pharmaceuticals, Inc. (Tarsus) and (b) certain future sales milestone payments we are owed based on global net sales of XDEMVY, both of which are pursuant to the terms of a previously executed license agreement with Tarsus (the qualifying royalties and milestones). The PSA applies to net sales of XDEMVY in the U.S. from April 1, 2025 through August 24, 2033. We retain the rights to all royalty payments on net sales outside the U.S. and any royalties due on U.S. net sales after August 24, 2033. We also retain the rights to any future royalties or milestones earned due to the future expansion of lotilaner in other human health applications. The proceeds from Blackstone, net of transaction costs, were utilized to repay previously outstanding term loan debt. Given our continuing involvement with the generation of net sales of XDEMVY under our license agreement with Tarsus, which includes our retention and associated defense and maintenance obligations of a portion of the intellectual property used in XDEMVY, under GAAP, the $295 million payment received from Blackstone, net of transaction costs of $5 million, was recorded as a liability for sale of future revenue. However, under the terms of the PSA, we are not obligated to make payments to Blackstone. Rather, Blackstone is only entitled to receive the qualifying royalties and milestones based on XDEMVY's net sales, as outlined within our license agreement with Tarsus. These payments are made by Tarsus to Blackstone through a third-party escrow account and, therefore, do not represent cash inflows or outflows within our consolidated statements of cash flows. GAAP also requires us to impute interest expense associated with the liability for sale of future revenue based on our estimates of the total amount of payments due to Blackstone over the life of the PSA. The excess of the future payments received by Blackstone over and above the $295 million in proceeds we received from them will be recognized as interest expense, net of capitalized interest in our consolidated statements of operations. Our imputed interest rate is calculated based on the rate we expect would enable the liability to be amortized in full over the life of the PSA. Our effective interest rate will vary throughout the term of the arrangement depending on the amount and timing of forecasted qualifying royalties and milestones, which will affect the timing and amount of reductions to the liability. We periodically assess the forecasted qualifying royalties and milestones using a combination of historical results, internal projections and forecasts from external sources and prospectively adjust the effective interest rate and amortization of the liability for sale of future revenue as deemed appropriate. Although we no longer receive the proceeds from the qualifying future royalties and milestones, we are required under GAAP to continue recording them within our consolidated statements of operations. As the qualifying royalties and milestones sold to Blackstone are earned, the balance of the liability is reduced, offset by the imputed interest for the period, which increases the recognized liability. The transaction costs are being amortized to interest expense, net of capitalized interest over the life of the arrangement. The following table shows the activity during the year ended December 31, 2025, related to our liability for sale of future revenue:
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Goodwill and Intangibles |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangibles | Note 11. Goodwill and Intangibles Goodwill The following table summarizes the changes in the carrying amount of goodwill:
As previously disclosed, due principally to an increased discount rate environment, driven by a sharp increase in long-term treasury rates, we recorded a pre-tax goodwill impairment charge of $1,042 during the year ended December 31, 2023. No impairments to goodwill were recorded during either of the years ended December 31, 2025 or 2024. Other Intangible Assets The gross amount of intangible assets and related accumulated amortization, as of December 31, were as follows:
(1)The reduction in acquired IPR&D in 2025 is attributable to the U.S. Department of Agriculture (USDA) approval for Befrena, an anti-IL31 monoclonal antibody injection targeting canine allergic and atopic dermatitis. This asset had been included in acquired IPR&D since its acquisition from Kindred Biosciences, Inc. in 2021. Upon receiving USDA approval, we reclassified this asset to marketed products and will amortize it over its estimated economic life. Intangible assets with finite lives are capitalized and amortized over their estimated economic lives. As of December 31, 2025, the remaining weighted-average amortization periods for finite-lived intangible assets were as follows:
In the fourth quarter of 2025, we determined one of our marketed product intangible assets was impaired due to a decline in projected future sales of the underlying product group, and recorded an impairment charge of $47 million to write the asset down to its estimated fair value. Our fair value assessment used an income approach, which incorporated Level 3 fair value inputs not observable in the market, including estimates relating to revenue and margin forecasts for the product group underlying the marketed product asset and an appropriate discount rate. The estimated amortization expense for each of the next five years associated with our finite-lived intangible assets, as of December 31, 2025, is as follows:
For the years ended December 31, 2025, 2024 and 2023, amortization expense related to software was $31 million, $40 million and $54 million, respectively.
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Property and Equipment |
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| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and Equipment | Note 12. Property and Equipment At December 31, property and equipment consisted of the following:
Property and equipment, net by geographic area as of December 31, was as follows:
Depreciation and amortization expense related to property and equipment, including our finance lease ROU asset, for the years ended December 31, was as follows:
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Leases |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Note 13. Leases We have operating leases for corporate offices, R&D facilities, vehicles and equipment with lease terms generally ranging from to 15 years, some of which have options to extend or terminate the leases. In June 2025, we also commenced a five-year finance lease for our new corporate headquarters in Indianapolis, Indiana. We determine if an arrangement is a lease at inception, and if so, whether it represents an operating or finance lease. ROU assets represent our right to use an underlying asset for the lease term, while lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments. We use the implicit rate if it is readily determinable. Our lease terms may include puts or options to extend or terminate the lease or purchase the leased asset. When it is reasonably certain these puts or options will be exercised, the lease term and the purchase amount, if applicable, are considered in the calculation of the ROU assets and operating lease liabilities. We do not include leases with a lease term of 12 months or less within the determination of our ROU assets or lease liabilities. ROU assets related to our operating leases are included within noncurrent assets on our consolidated balance sheets, while the ROU asset relating to our finance lease is included within property and equipment, net. Lease liabilities related to our operating leases are included within other current liabilities and other noncurrent liabilities on our consolidated balance sheets, while the current and noncurrent portions of our finance lease is included within long-term debt and finance lease liability, including the current portion. Operating lease expense is recognized on a straight-line basis over the lease term. For our finance lease, we recognize interest expense using the effective interest method and amortization expense on the ROU asset over the expected useful life of the asset. The principal component of our finance lease payments is classified within financing activities within our consolidated statements of cash flows, while the interest component is classified within operating activities. Variable lease payments, which represent non-lease components such as maintenance, insurance and taxes, and which vary due to changes in facts or circumstances occurring after the commencement date, are expensed in the period in which the obligation for these payments is incurred. The impact of operating and financing leases on the consolidated statements of operations and cash flows for the years ended December 31, was as follows:
Supplemental balance sheet and other information related to our operating and finance leases is as follows:
Corporate Headquarters Finance Lease Our five-year corporate headquarters lease in Indianapolis, Indiana, which commenced in June 2025, contains both an option for Elanco to purchase the headquarters facility and a put right for the landlord to put the facility to us, both of which, if exercised, would occur at the end of the five-year lease term for $250 million. Based on our review of the terms of this lease, including our expectation to exercise our purchase option at the end of the lease, we determined classification as a finance lease to be appropriate. In addition to the required minimum lease payments, our determination of the finance lease ROU asset and lease liability amounts at commencement also included this purchase option amount. Additionally, as previously disclosed, the land for our new corporate headquarters is located in a Tax Increment Finance District, and the project was, in part, funded through Tax Incremental Financing through an incentive agreement between the City of Indianapolis and Elanco. The agreement provided for a 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. This accrued incentive was recorded principally within other noncurrent liabilities, on our consolidated balance sheet as of December 31, 2025, and is being amortized over the period we expect to benefit from the use of the new headquarters. This amortization partially offsets the depreciation related to our ROU asset. As of December 31, 2025, the minimum lease payments for our operating and finance lease liabilities for each of the next five years and thereafter, were as follows:
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| Leases | Note 13. Leases We have operating leases for corporate offices, R&D facilities, vehicles and equipment with lease terms generally ranging from to 15 years, some of which have options to extend or terminate the leases. In June 2025, we also commenced a five-year finance lease for our new corporate headquarters in Indianapolis, Indiana. We determine if an arrangement is a lease at inception, and if so, whether it represents an operating or finance lease. ROU assets represent our right to use an underlying asset for the lease term, while lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments. We use the implicit rate if it is readily determinable. Our lease terms may include puts or options to extend or terminate the lease or purchase the leased asset. When it is reasonably certain these puts or options will be exercised, the lease term and the purchase amount, if applicable, are considered in the calculation of the ROU assets and operating lease liabilities. We do not include leases with a lease term of 12 months or less within the determination of our ROU assets or lease liabilities. ROU assets related to our operating leases are included within noncurrent assets on our consolidated balance sheets, while the ROU asset relating to our finance lease is included within property and equipment, net. Lease liabilities related to our operating leases are included within other current liabilities and other noncurrent liabilities on our consolidated balance sheets, while the current and noncurrent portions of our finance lease is included within long-term debt and finance lease liability, including the current portion. Operating lease expense is recognized on a straight-line basis over the lease term. For our finance lease, we recognize interest expense using the effective interest method and amortization expense on the ROU asset over the expected useful life of the asset. The principal component of our finance lease payments is classified within financing activities within our consolidated statements of cash flows, while the interest component is classified within operating activities. Variable lease payments, which represent non-lease components such as maintenance, insurance and taxes, and which vary due to changes in facts or circumstances occurring after the commencement date, are expensed in the period in which the obligation for these payments is incurred. The impact of operating and financing leases on the consolidated statements of operations and cash flows for the years ended December 31, was as follows:
Supplemental balance sheet and other information related to our operating and finance leases is as follows:
Corporate Headquarters Finance Lease Our five-year corporate headquarters lease in Indianapolis, Indiana, which commenced in June 2025, contains both an option for Elanco to purchase the headquarters facility and a put right for the landlord to put the facility to us, both of which, if exercised, would occur at the end of the five-year lease term for $250 million. Based on our review of the terms of this lease, including our expectation to exercise our purchase option at the end of the lease, we determined classification as a finance lease to be appropriate. In addition to the required minimum lease payments, our determination of the finance lease ROU asset and lease liability amounts at commencement also included this purchase option amount. Additionally, as previously disclosed, the land for our new corporate headquarters is located in a Tax Increment Finance District, and the project was, in part, funded through Tax Incremental Financing through an incentive agreement between the City of Indianapolis and Elanco. The agreement provided for a 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. This accrued incentive was recorded principally within other noncurrent liabilities, on our consolidated balance sheet as of December 31, 2025, and is being amortized over the period we expect to benefit from the use of the new headquarters. This amortization partially offsets the depreciation related to our ROU asset. As of December 31, 2025, the minimum lease payments for our operating and finance lease liabilities for each of the next five years and thereafter, were as follows:
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Stock-Based Compensation |
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| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation | Note 14. Stock-Based Compensation The Amended and Restated 2018 Elanco Stock Plan (Plan) provides long-term incentives to attract, motivate and retain employees and non-employee directors. The types of stock-based awards available include, but are not limited to, restricted stock units (RSUs), performance-based awards (PAs) and stock options. Our practices and policies specify that stock-based compensation awards are approved by the Compensation and Human Capital Committee of our Board of Directors. As of December 31, 2025, the total number of shares authorized for stock-based compensation awards under the plan was 40 million, out of which the aggregate number of remaining shares available for future grant was 17.3 million. Stock-Based Compensation Expense We measure compensation expense for stock-based awards based on grant date fair value and the estimated number of awards that are expected to vest. We include the impact of estimated forfeitures when measuring compensation expense, which are estimated based on historical experience at the time of grant and are revised in subsequent periods if actual forfeitures differ from those estimates. Stock-based compensation expense for the years ended December 31, 2025, 2024 and 2023, was $68 million, $55 million and $46 million, respectively, a majority of which related to RSUs and PAs in each year. The associated tax benefit from stock-based compensation expense was offset by a valuation allowance. Restricted Stock Units RSUs are granted to certain employees and are settled in shares of our common stock. RSUs are accounted for at fair value based upon the closing stock price on the date of grant. The corresponding expense is amortized on a straight-line basis over the vesting period, which is typically three years. RSUs granted to employees for the years ended December 31, were as follows:
Changes in the nonvested portion of RSUs for 2025 are summarized below:
The fair market value of RSUs vesting in 2025, 2024 and 2023 was $31 million, $29 million and $12 million, respectively. As of December 31, 2025, the total remaining unrecognized expense related to nonvested RSUs was $22 million, which is expected to amortize over a weighted-average remaining requisite service period of 17 months. Performance-Based Awards PAs, which are granted to eligible officers and management, represent the right to receive shares of our common stock and are subject to forfeiture until restrictions lapse, including continued employment through the end of the vesting period and achievement of certain pre-established metrics. Payouts can vary depending on achievement. PAs are accounted for at fair value based upon the closing stock price on the date of grant and fully vest at the end of the measurement period. Compensation expense for PAs is recognized only if it is deemed probable that the performance condition will be achieved. PA activity during the year ended December 31, 2025, is summarized below:
The fair market value of PAs vesting in 2025, 2024 and 2023 was $14 million, $10 million and $8 million, respectively. As of December 31, 2025, the total remaining unrecognized expense related to nonvested PAs was $10 million, which is expected to amortize over a weighted-average remaining requisite service period of 12 months. Stock Options Stock options represent the right to purchase shares of our common stock within a specified period of time at a specified price. Stock options are granted to our officers and management at exercise prices equal to the fair market value of our stock at the date of the grant. Options fully vest three years from the grant date and have a term of 10 years. We value stock options at grant date using a Black-Scholes-Merton valuation model, and the corresponding expense is generally amortized on a straight-line basis over the vesting period. The weighted-average fair value of stock options granted during the years ended December 31, 2025, 2024 and 2023 was estimated to be $5.59, $7.35, and $4.93 respectively. The Black-Scholes-Merton model incorporates a number of valuation assumptions, which are noted in the following table, shown at their weighted-average values for the years ended December 31:
(1)Determined based on the zero-coupon risk-free rate for a U.S. Treasury Constant Maturity yield curve, with a term equal to our expected term assumption. (2)Determined based on our historical stock price volatility over the past six years (commensurate with our expected term assumption). (3)Determined using SEC safe harbor approach, based on a 3-year cliff vesting schedule and 10-year contractual term. Stock option activity during the year ended December 31, 2025, is summarized below:
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Income Taxes |
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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | Note 15. Income Taxes The composition of (loss) income before income tax expense for the years ended December 31, was as follows:
The composition of income tax expense for the years ended December 31, was as follows:
We treat taxes due on future Net Controlled Foreign Corporation Tested Income (NCTI, formerly known as Global Intangible Low-Taxed Income, or GILTI) inclusions in U.S. taxable income as a current period expense when incurred. Certain countries in which we have operations have adopted legislation influenced by the Organization for Economic Co-operation and Development (OECD) Pillar Two rules, including a minimum tax rate of 15%. As of December 31, 2025, the U.S. has not yet enacted legislation to adopt the Pillar Two framework. We are continuing to evaluate additional guidance released by the OECD and the pending legislative adoption by additional individual countries. The adoption of Pillar Two was not material to income tax expense for the years ended December 31, 2025 and 2024. We recognize deferred taxes for the future tax effects of temporary differences between financial and income tax reporting based on enacted tax laws and rates. The tax benefit from an uncertain tax position is recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. Deferred taxes are not provided on substantially all of the unremitted earnings of subsidiaries outside of the U.S., except where required, because it is expected that these earnings will be reinvested indefinitely. Deferred taxes, including U.S. or foreign withholding taxes, would be provided when we no longer consider our subsidiary earnings to be permanently reinvested, although the determination of taxes that would be incurred upon the future remittance of such earnings is not practicable. Significant components of our deferred tax assets and liabilities as of December 31, were as follows:
The deferred tax assets and related valuation allowance amounts for net operating losses and tax credits shown above have been adjusted for differences between prior provisional estimates and tax return filings. At December 31, 2025, we had foreign tax credit carryovers of $6 million available to reduce future income taxes which will begin to expire in 2034 if unused. The U.S. federal credits totaled $23 million while state credits totaled $16 million. If unused, both the U.S. federal and state credits will begin to expire in 2029. The U.S. federal credits were subject to a partial valuation allowance and the state credits were subject to a full valuation allowance. At December 31, 2025, we also had net operating loss carryovers for foreign, U.S. federal and state income tax purposes of $153 million. Of this total, $99 million will expire between 2026 and 2044, and $54 million of the carryovers had an indefinite carryforward period. Net operating losses and other carryovers for foreign, U.S. federal and state income tax purposes were subject to full and partial valuation allowances. Movements in the valuation allowance for the years ended December 31, were as follows:
The net decreases in the valuation allowance recorded in income tax expense in 2025 and 2024 were $17 million and $77 million, respectively, while the net increase in the valuation allowance recorded in income tax expense in 2023 was $93 million. The remaining changes during these years were primarily recorded through accumulated other comprehensive loss. The decrease in the valuation allowance during 2024 was primarily attributable to the sale of our aqua business, which generated U.S. federal taxable income, allowing us to realize certain net operating loss carryforwards and other tax attributes which were historically offset by a valuation allowance. The increase in the valuation allowance during 2023 was primarily attributable to the deemed likelihood of not realizing the benefit of U.S. federal and state deferred tax assets because of U.S. pre-tax losses. A reconciliation of the U.S. federal statutory tax rate to our effective tax rate for the year ended December 31, 2025, is as follows:
(1)State taxes in California made up greater than 50% of the tax effect in this category. The following is a reconciliation of the income tax expense applying the U.S. federal statutory tax rate to income (loss) before income taxes to reported income tax expense for the years ended December 31, 2024 and 2023:
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the years ended December 31, was as follows:
We recognize both accrued interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties related to income tax matters were not material for the years ended December 31, 2025, 2024 and 2023. Net cash payments (refunds) of income taxes by jurisdiction for the year ended December 31, 2025, were as follows:
Net cash payments of income taxes during the years ended December 31, 2024 and 2023, were $140 million and $95 million, respectively. The increase in cash paid for income taxes in 2025 was primarily driven by required tax payments associated with the taxable gain from the 2024 divestiture of our aqua business. Income taxes receivable of $113 million and $121 million, respectively, were included in prepaid expenses and other on our consolidated balance sheets as of December 31, 2025 and 2024. Income taxes payable of $14 million and $127 million, respectively, were included within other current liabilities on our consolidated balance sheets as of December 31, 2025 and 2024. On July 4, 2025, the One Big Beautiful Bill Act (Act) was enacted into law in the U.S. The Act includes significant provisions, including tax cut extensions and modifications to the U.S. and international tax frameworks. Based on our current analysis of these provisions, we do not believe these provisions will have a material impact on our consolidated financial statements, including our analysis of our U.S. valuation allowance position. Further, the Act did not have a material impact on our income tax expense during the year ended December 31, 2025. We were included in Lilly's U.S. tax examinations by the Internal Revenue Service (IRS) through the full separation date of March 11, 2019. Pursuant to the tax matters agreement we executed with Lilly in connection with our initial public offering (IPO), the potential liabilities or potential refunds attributable to pre-IPO periods in which Elanco was included in a Lilly consolidated or combined tax return remain with Lilly. The U.S. examination by the IRS of tax years 2016 to 2018 began in 2019 and is ongoing. Final resolution of certain matters is dependent upon several factors, including the potential for formal administrative proceedings.
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Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2025 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | Note 16. Commitments and Contingencies Legal Matters We are party to various legal actions that oftentimes arise in the normal course of business. The most significant of these matters are described below. Under GAAP, loss contingency provisions are recorded when we deem it probable that we will incur a loss and are able to formulate a reasonable estimate of that loss. For the legal matters discussed below, we either believe material loss is not probable or are unable to reasonably 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 December 31, 2025 and 2024, we had no material liabilities established related to the legal matters discussed below. On October 7, 2024, a putative securities class action lawsuit captioned Joseph Barpar v. Elanco Animal Health Inc., et al. (Barpar) was filed in the U.S. District Court for the District of Maryland against Elanco and two of its executives. Barpar alleged claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act) and specifically alleged that Elanco and the two executives made materially false and/or misleading statements and/or failed to disclose certain facts about the safety of and labeling for our Zenrelia® product, as well as the approval and launch timelines for Zenrelia and our Credelio Quattro™ product. The plaintiff purported to represent purchasers of Elanco securities between November 7, 2023 and June 26, 2024. On March 21, 2025, plaintiff filed an amended complaint that extended the time period for which the plaintiff purported to represent purchasers of Elanco securities to between May 9, 2023 and June 26, 2024. The amended complaint also removed allegations concerning the approval and launch timelines for our Credelio Quattro product. On May 20, 2025, we filed a motion to dismiss this case. Following the filing of Barpar, several derivative cases were filed, all of which have been stayed pending the outcome of the Barpar motion to dismiss. On November 1, 2024, a shareholder derivative action captioned Lawrence Hollin v. Lawrence E. Kurzius, et al. (Hollin) was filed in the U.S. District Court for the District of Maryland against current members of Elanco's Board of Directors and senior management, alleging claims under Sections 10(b) and 20(a) of the Exchange Act and state law claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment and waste of corporate assets, based on allegations substantially similar to the allegations in the putative class action complaint in Barpar. On March 11, 2025, a shareholder derivative action captioned James Habermehl v. Jeffrey N. Simmons, et al. was filed in Hancock County Circuit Court of Indiana, against the same parties named in Hollin, alleging claims under Indiana state law for breach of fiduciary duty and unjust enrichment, based on allegations substantially similar to the allegations in the putative class action complaint in Barpar. On April 28, 2025, a shareholder derivative action captioned Christopher Dougherty v. Elanco Animal Health, Inc., et al. (Dougherty), was filed in the District of Maryland, naming certain Elanco executives and 13 Elanco Board members as defendants. Dougherty alleges the defendants engaged in conspiratorial and individually culpable conduct based on materially false or misleading statements and omissions alleged in, referenced or related to, in large part, the putative class action complaint in Barpar, as well as breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and as to the certain executives, contribution under Section 15, U.S.C. § 78j(b) and Section 21D of the Exchange Act. On June 11, 2025, a shareholder derivative action captioned Mike Sexton v. Jeffrey N. Simmons, et al. (Sexton) was filed in Hancock County Circuit Court of Indiana against largely the same parties as in Hollin, alleging claims under Indiana state law for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets. We are vigorously defending our positions in connection with each of these actions. On May 20, 2020, a shareholder class action lawsuit captioned Hunter v. Elanco Animal Health Inc., et al. (Hunter) was filed in the U.S. District Court for the Southern District of Indiana 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 alleged, 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 sought 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 Therapeutics, Inc. 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 on September 27, 2023, the court denied the plaintiffs' motion for leave, issuing final judgment in favor of Elanco. On October 25, 2023, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Seventh Circuit. We intend to continue to vigorously defend our position. On October 16, 2020, a shareholder class action lawsuit captioned Safron 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 tangible equity units issued in connection with the public offering. From February 2021 to August 2022, this case was stayed in deference to Hunter. 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. We filed a motion to dismiss the second amended complaint on August 7, 2023, to which the plaintiffs filed their opposition on October 13, 2023. On April 17, 2024, our motion to dismiss was granted. On or about October 4, 2024, the plaintiffs appealed the dismissal to the Indiana Court of Appeals. Subsequently, on or about March 20, 2025, the plaintiffs' motion for oral argument was denied, and on August 1, 2025, the Indiana Court of Appeals affirmed the trial court’s order granting our motion to dismiss. On September 17, 2025, the plaintiff petitioned the court for a rehearing, which was subsequently denied. On October 23, 2025, the plaintiff appealed dismissal to the Indiana Supreme Court. We intend to continue 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 realleged 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 included both actual and treble damages. On April 16, 2024, the court granted our motion for summary judgment to exclude all damages subsequent to our acquisition of Bayer Animal Health in August 2020. A jury trial was held in July 2024, and on August 1, 2024, the jury returned a verdict in favor of Bayer Animal Health. In January 2025, Tevra's motion for a new trial was denied, and in February 2025, Tevra filed its notice of appeal. Following the initial Tevra trial, three additional matters have been filed against us, both in the Northern District of California and in the Southern District of Indiana, most recently in January 2025: Tracy Spradlin v. Elanco Animal Health, Inc. (Spradlin), Tevra Brands, LLC v. Elanco Animal Health, Inc. (Tevra v. Elanco), and Susan Kraus-Silfen v. Elanco Animal Health, Inc. et. al. (Kraus-Silfen). While there are substantive and statutory differences, the allegations underpinning these matters are similar in some respects to the initial Tevra matter including, but not limited to, the family of pet health products and sales tactics and agreements alleged to drive a monopoly within the market. Spradlin and Kraus-Silfen are putative class actions, and all three of these additional matters seek injunctive relief and an unspecified amount of monetary relief. On March 31, 2025, our motion to dismiss Tevra v. Elanco was granted by the court without prejudice to plaintiff's right to file an amended claim. We filed motions to dismiss Spradlin and Kraus-Silfen on October 25, 2024 and April 25, 2025, respectively. On October 7, 2025, the court granted our motion to dismiss the federal antitrust claims and denied our motion to dismiss the state antitrust claims. On February 18, 2026, we reached a settlement in principle with the Kraus-Silfen and Spradlin plaintiffs which remains subject to execution of definitive documentation and court approval. Additionally, this proposed settlement does not constitute an admission of liability. We continue to vigorously defend against each of the remaining claims in the two Tevra matters.
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Retirement Benefits |
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| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits | Note 17. Retirement Benefits Pension Plans We sponsor various defined benefit pension plans, which cover certain employees worldwide. Our plans in Switzerland and Germany represent approximately 92% of our global benefit obligation and approximately 91% of our total plan assets for all pension plans. We use a measurement date of December 31 to develop the change in benefit obligation, change in plan assets, funded status and amounts recorded on the consolidated balance sheets at December 31 for our defined benefit pension plans, which were as follows:
The unrecognized net actuarial gain and unrecognized prior service cost for these pension plans have not yet been recognized in net periodic pension expense and were included in accumulated other comprehensive loss at December 31, 2025. We do not expect any plan assets to be returned to us in 2026. The following represents our weighted-average assumptions related to these pension plans as of and for the years ended December 31:
These assumptions were used to estimate both our pension benefit obligations at year-end, as well as in the determination of applicable pension benefit costs for the years presented. These assumptions are reviewed on at least an annual basis and are revised based on a yearly evaluation of long-term trends and market conditions that may impact the cost of providing retirement benefits. The weighted-average discount rates for our defined benefit plans are set by benchmarking against investment grade corporate bonds where available, including, when there is sufficient data, a yield curve approach. In evaluating the expected rate of return, we consider many factors, with a primary analysis of current and projected market conditions, asset returns and asset allocations and the views of leading financial advisers and economists. We may also review our historical assumptions compared with actual results, as well as the assumptions and trend rates utilized by similar plans, where applicable. Future benefit payments as of December 31, 2025, which reflect expected future service, as appropriate, are expected to be as follows:
We also expect to contribute $14 million to our pension plans in 2026. Amounts relating to pension plans with projected benefit obligations in excess of plan assets at December 31, were as follows:
Amounts relating to pension plans with accumulated benefit obligations in excess of plan assets at December 31, were as follows:
The total accumulated benefit obligation for our defined benefit pension plans was $360 million and $340 million at December 31, 2025 and 2024, respectively. Net pension benefit expense for the years ended December 31, included the following components:
The above components, with the exception of service cost, were included within other expense, net in the consolidated statements of operations. The following represents the pre-tax amounts recognized for defined benefit plans in other comprehensive income (loss) for the years ended December 31:
Income tax expense recognized in other comprehensive income (loss) related to our defined benefit plans was not material during any of the years ended December 31, 2025, 2024 or 2023. Benefit Plan Investments Our benefit plan investment policies are set with specific consideration of return and risk requirements in relation to the respective liabilities. Given the long-term nature of our liabilities, our plans have the flexibility to manage an above-average degree of risk in the asset portfolios. At the investment-policy level, there are no specifically prohibited investments; however, individual investment manager mandates, restrictions and limitations are contractually set to align with our investment objectives, ensure risk control and limit concentrations. We manage our portfolio to minimize concentration of risk by allocating funds within asset categories. In addition, within a category we use different managers with various management objectives to eliminate any significant concentration of risk. Our investment strategy is to diversify our plan assets with a designated percentage invested in fixed-income securities, equity securities, real estate and other investments. Each category is diversified and comprised of the following: •Fixed-income securities – Swiss bonds, global aggregates, global aggregate corporates, global government bonds, global high-yield bonds, emerging market local currencies and emerging markets hard currencies. •Equity securities – Swiss equities, global equities, low volatility equities (to reduce risk) and emerging market equities. •Real estate – Swiss real estate and global real estate funds. •Other – cash, cash equivalents and investments in senior secured loans, insurance contracts and other alternative investments. We determine the fair value of our plan investments based on a market approach using quoted market values and/or significant other observable inputs for identical or comparable assets or liabilities. Certain investments measured at fair value using the Net Asset Value (NAV) per share, or its equivalent, as a practical expedient have not been classified in the fair value hierarchy. No material transfers between Level 1, Level 2 or Level 3 occurred during the years ended December 31, 2025 or 2024. The fair values of pension plan assets as of December 31, 2025, by asset category were as follows:
The fair values of pension plan assets as of December 31, 2024, by asset category were as follows:
Defined Contribution Plans Elanco has defined contribution savings plans that include certain employees worldwide. Our contributions to these plans are based on our employee contributions and the level of our match. Expenses under the plans totaled $42 million, $36 million and $40 million for the years ended December 31, 2025, 2024 and 2023, respectively. Multiemployer Plans We also participate in certain multiemployer plan arrangements which provide basic pension benefits to the majority of our employees in Germany. Up to a certain salary level, the benefit obligations are covered by our contributions and the contributions from employees to the plans. The Company-specific plan information for these plans is not publicly available, and the plans are not subject to a collective-bargaining agreement. The plans provide fixed, monthly retirement payments on the basis of the credits earned by the participating employees. To the extent these plans become underfunded, our future required contributions may increase and may be used to fund retirement benefits for employees related to other employers, although as of December 31, 2024 and 2023, the plans' total assets exceeded the total actuarial present value of accumulated plan benefits. Our plan contributions to these plans are expensed as incurred and were not material in any of the years ended December 31, 2025, 2024 and 2023, nor did they exceed 5% of the total contributions to the plans. Contributing to these types of plans creates risk that differs from providing benefits under our sponsored plans, in that if another participating employer ceases to contribute to a multiemployer plan, additional unfunded obligations may need to be funded over time by remaining participating employers.
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Earnings Per Share |
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Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | Note 18. Earnings Per Share We compute basic earnings (loss) per share by dividing net income (loss) by the 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. Diluted earnings per share reflects the potential dilution that could have occurred if holders of the unvested equity awards converted their holdings into common stock. The weighted-average number of potentially dilutive shares outstanding was calculated using the treasury stock method. Potential common shares that would have had the effect of increasing diluted earnings per share (or reducing loss per share) were 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 for the years ended December 31, were as follows:
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Business Segment Information |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Segment Information | Note 19. Business Segment Information We operate our business as a single segment engaged in the development, manufacturing, marketing and sales of animal health products for both pets and farm animals. Consistent with our operational structure, our Chief Executive Officer (CEO), as the chief operating decision maker, makes resource allocation and business process decisions globally across our consolidated business. Strategic and resource allocation decisions are managed globally, with global functional leaders responsible for determining significant costs and investments and with regional leaders responsible for overseeing the execution of our global strategy. Managing and allocating resources at the global corporate level enables our CEO to assess the overall level of resources available and how to best deploy these resources across functions, product types, regional commercial organizations and R&D projects in line with our overarching long-term, corporate-wide strategic goals, rather than on a product or geographic basis. Consistent with this decision-making process, our CEO considers consolidated net income (loss), which is our single segment’s principal measure of segment profit and loss, when evaluating performance. Our CEO also considers these measures, as well as other factors, such as an assessment of a new product’s future market potential, when determining how to allocate company-wide resources. Significant segment expenses are amounts that are regularly provided to our CEO and included in consolidated net income (loss), our primary measure of our single segment’s profit or loss. Our CEO regularly reviews reported consolidated revenue, gross profit, other significant segment expenses and consolidated net income (loss), in addition to forecasted revenue, significant segment expenses and net income (loss) amounts for future periods. A summary of our consolidated net (loss) income for the years ended December 31, is as follows, including the significant segment expenses provided to and regularly reviewed by our CEO, as well as other expenses, which are included in consolidated net (loss) income, but are not regularly provided to and/or reviewed by our CEO:
(1)Other expenses include amortization of intangible assets; asset impairment, restructuring and other special charges; goodwill impairment; and gain on divestiture. Given our single reporting segment structure, we manage our assets on a total company basis. Cash paid for acquisitions, intangible assets and property and equipment and software, and cash proceeds from divestitures, are all summarized in the Investing Activities section of our consolidated statements of cash flows.
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Subsequent Event |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Subsequent Events [Abstract] | |
| Subsequent Event | Note 20. Subsequent Event On February 19, 2026, we signed a definitive purchase agreement to acquire 100% of the outstanding equity interests of AHV International B.V. (AHV), along with selected assets of AHV's affiliates necessary for the on-going operations of the business. AHV is an innovative, farm animal health company incorporated in the Netherlands focused on solutions to improve animal welfare and productivity, while reducing the need for antibiotics. The acquisition of AHV is expected to accelerate our strategy to grow our industry leadership in farm animal products, particularly for cattle, by expanding our product portfolio, primarily throughout Europe and the U.S. Aggregate consideration for this acquisition will include (1) $170 million of guaranteed payments through 2030, with $70 million of this amount due upon closing, which we currently anticipate during the second quarter of 2026, and (2) up to $140 million of contingent payments due upon the achievement of significant performance-based and time-limited milestones through 2032.
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Insider Trading Arrangements |
3 Months Ended |
|---|---|
Dec. 31, 2025 | |
| 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 |
Insider Trading Policies and Procedures |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Insider Trading Policies and Procedures [Line Items] | |
| Insider Trading Policies and Procedures Adopted | true |
Cybersecurity Risk Management and Strategy Disclosure |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Cybersecurity Risk Management, Strategy, and Governance [Line Items] | |
| Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block] | Given the importance of the integrity and security of the information and data utilized in our day-to-day operations, our processes for assessing, identifying and managing material risks from cybersecurity threats is incorporated into our overall enterprise risk management framework. We evaluate cybersecurity risks on an ongoing basis, and both our executive management and Board of Directors have an overall responsibility for assessing and managing risks from cybersecurity threats. We have established an information security team which is structured into three areas, all of which report directly to our Chief Information Security Officer (CISO): 1) Governance, Risk and Compliance; 2) Architecture; and 3) Operations (Detect and Respond). Our information security team is responsible for the design and execution of our cybersecurity risk management and helps executive management and our Board of Directors stay informed about and monitor the prevention, detection, mitigation and remediation of cybersecurity risks and incidents through various means, including but not limited to, briefings with internal security team members, threat intelligence obtained from public and private sources and alerts and reports produced by security tools deployed within our IT environment. Our current CISO, who reports directly to our Chief Financial Officer (CFO), has over 18 years of experience in various roles involving information technology governance and compliance, including cybersecurity, engineering and enterprise architecture. Our information security team includes professionals with relevant industry, educational and cybersecurity experience. Governance, Risk and Compliance: Our approach to cybersecurity governance, risk and compliance is based on overarching guidelines, standards and best practices developed by the U.S. National Institute of Standards and Technology (NIST), a department of the U.S. Department of Commerce. Our information security governance oversees the process of coordinating the cybersecurity team(s) responsible for the mitigating of business risks posed by IT-related resources. Our governance framework of authority and accountability ensures that prioritized initiatives have the required structure, sponsorship and funding to appropriately address the foreseen risks. Risk management includes an assessment of the risks posed to us by an IT solution, including cloud hosted and/or other third-party environments and systems. Our processes also address cybersecurity risks associated with our use of third-party service providers, including those in our supply chain or who have access to our client or employee data on our systems. In addition, cybersecurity considerations affect the selection and oversight of third-party service providers. We perform diligence on third parties, particularly those that have access to our systems, data or facilities that house such systems or data, and continually monitor cybersecurity threat risks identified through such diligence. Our risk management process assesses likelihood and impact based on a variety of potential risks and cyber events. The information security team also periodically engages third-party vendors to assist with our cyber threat detection and response actions, as well as to ensure our processes related to information security and defense against cybersecurity threats are appropriately designed and implemented to best prevent, detect and/or respond to a cyber threat or event. We also engage an independent third party to conduct comprehensive assessments of our cybersecurity program approximately every 18 months. Architecture: Our information security architecture is focused on designing IT-related solutions that are foundationally secure. Our information security architecture assumes that internal and external threats always exist, and that all networks are inherently hostile. Accordingly, all connections accessing business assets must first be authenticated and authorized. Where viable, IT services are individually secured and monitored at the source, following the principle of least privilege. Operations (Detect and Respond): In the event of a cybersecurity incident, the Elanco Information Security Incident Response Plan (ISIRP) defines the roles, responsibilities, procedures and reporting processes required to respond effectively to cybersecurity incidents. Responses to information security incidents are led by two teams: 1) the Security Operations Center (SOC) team, which conducts the initial technical triage and analysis, and 2) a cross-functional team of leaders from the IT, Legal, Human Resources and Finance functions (the Cyber Lead team), which is engaged by the CISO on an as needed basis, based on incident severity. The Cyber Lead team is tasked with confirming the severity of a cybersecurity incident and bringing together the proper resources to lead the corporate-wide response to such incidents, including engaging the Company’s Disclosure Committee, in the event an incident may rise to a level deemed material to us. In the event an incident is escalated by the Cyber Lead team, the Disclosure Committee, led by our Chief Financial Officer and General Counsel, would evaluate all estimable quantitative and qualitative factors to determine if a Current Report on Form 8-K would be required under Item 1.05, “Material Cybersecurity Incidents.” The ISIRP is reviewed and updated at least once annually. For the year ended December 31, 2025, we have not identified any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition. For more information on potential risks related to cybersecurity threats and incidents, please see Item 1A. Risk Factors – Breaches of our IT systems or improper disclosure of confidential company or personal data, or a failure to comply with privacy laws, regulations and our contractual obligations concerning data privacy or the security of certain information, could have a material adverse effect on our reputation and operations.
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| Cybersecurity Risk Management Processes Integrated [Flag] | true |
| Cybersecurity Risk Management Processes Integrated [Text Block] | Given the importance of the integrity and security of the information and data utilized in our day-to-day operations, our processes for assessing, identifying and managing material risks from cybersecurity threats is incorporated into our overall enterprise risk management framework. |
| Cybersecurity Risk Management Third Party Engaged [Flag] | true |
| Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] | true |
| Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] | false |
| Cybersecurity Risk Board of Directors Oversight [Text Block] | Our Board of Directors actively oversees our cybersecurity management processes, including appropriate risk mitigation strategies, systems, processes and controls. Our CISO meets with the Audit Committee of the Board of Directors and separately with the full Board of Directors at least twice annually to discuss the status of policies and procedures related to information security. Discussions with the Audit Committee and the full Board of Directors focus on any notable incidents and incident responses, updates on known or perceived cyber threats and the information security team's recent actions taken in response to such incidents and threats. In addition, our Board of Directors and the Audit Committee also receive updates from the CISO and/or our CIO on an ad-hoc or as-requested basis. Any incidents or changes to our process of identifying and responding to potential cybersecurity incidents would be included within these materials. According to our ISIRP, our Board of Directors would also be notified of any high severity incidents deemed material, simultaneously with the notification to the Disclosure Committee, and would be kept apprised of actions taken in response to such incidents.
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| Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] | Our Board of Directors actively oversees our cybersecurity management processes, including appropriate risk mitigation strategies, systems, processes and controls. Our CISO meets with the Audit Committee of the Board of Directors and separately with the full Board of Directors at least twice annually to discuss the status of policies and procedures related to information security. |
| Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block] | Our CISO meets with the Audit Committee of the Board of Directors and separately with the full Board of Directors at least twice annually to discuss the status of policies and procedures related to information security. Discussions with the Audit Committee and the full Board of Directors focus on any notable incidents and incident responses, updates on known or perceived cyber threats and the information security team's recent actions taken in response to such incidents and threats. In addition, our Board of Directors and the Audit Committee also receive updates from the CISO and/or our CIO on an ad-hoc or as-requested basis. Any incidents or changes to our process of identifying and responding to potential cybersecurity incidents would be included within these materials. According to our ISIRP, our Board of Directors would also be notified of any high severity incidents deemed material, simultaneously with the notification to the Disclosure Committee, and would be kept apprised of actions taken in response to such incidents. |
| Cybersecurity Risk Role of Management [Text Block] | Management is responsible for executing the Cybersecurity Risk Management, Strategy and Governance policies outlined above. This is done, in part, by both establishing systems, processes and controls to minimize the risk of a high severity cybersecurity incident as much as possible, as well as ensuring there is a formal process designed to identify, investigate and appropriately respond to potential cybersecurity incidents. As noted, we have established our ISIRP as a response tool in the event of a cybersecurity incident. The ISIRP documents the actionable steps the SOC team, information security leadership and cross-functional stakeholders and partners take when a cybersecurity incident is identified. The ISIRP covers the preparation, detection and analysis, containment, eradication, recovery and post-incident activities required to effectively respond to an incident. Once a cybersecurity incident has been identified, the SOC team performs an initial investigation to determine if the incident is deemed high or low severity, based upon the business and operational impacts. Any incident deemed high severity would result in notification by the CISO to the Cyber Lead team to determine the appropriate actions to be taken. This determination would be made by the Cyber Lead team based on both qualitative and quantitative factors regarding the extent and magnitude of the incident. If the incident is then escalated to the Disclosure Committee and determined to be material, a disclosure via a Current Report on Form 8-K would be made within four business days of the incident being identified as such. Our Board of Directors would also be notified of any high severity incidents that are determined to be material, concurrently with the notification to the Disclosure Committee, and would be kept apprised of actions taken in response to such incidents. Our information security team is also responsible for cybersecurity awareness and education across the company, including our Board of Directors. Awareness empowers users, including our employees and contractors, to be mindful of cybersecurity in day-to-day situations. Our cybersecurity education practices help ensure specific users have the appropriate security skills and competencies to help prevent and/or detect and respond to a cyber threat. Formal training is delivered and measured throughout our organization on a routine, ongoing basis, and dedicated training is delivered to all new employees and contractors through our onboarding process. Targeted and company-wide communications, as well as simulated phishing campaigns and tabletop exercises are also routinely executed to promote ongoing awareness, preparation and education about cyber threats.
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| Cybersecurity Risk Management Positions or Committees Responsible [Flag] | true |
| Cybersecurity Risk Management Positions or Committees Responsible [Text Block] | Our Board of Directors actively oversees our cybersecurity management processes, including appropriate risk mitigation strategies, systems, processes and controls. Our CISO meets with the Audit Committee of the Board of Directors and separately with the full Board of Directors at least twice annually to discuss the status of policies and procedures related to information security. Discussions with the Audit Committee and the full Board of Directors focus on any notable incidents and incident responses, updates on known or perceived cyber threats and the information security team's recent actions taken in response to such incidents and threats. In addition, our Board of Directors and the Audit Committee also receive updates from the CISO and/or our CIO on an ad-hoc or as-requested basis. |
| Cybersecurity Risk Management Expertise of Management Responsible [Text Block] | Our current CISO, who reports directly to our Chief Financial Officer (CFO), has over 18 years of experience in various roles involving information technology governance and compliance, including cybersecurity, engineering and enterprise architecture. Our information security team includes professionals with relevant industry, educational and cybersecurity experience. |
| Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] | Our CISO meets with the Audit Committee of the Board of Directors and separately with the full Board of Directors at least twice annually to discuss the status of policies and procedures related to information security. Discussions with the Audit Committee and the full Board of Directors focus on any notable incidents and incident responses, updates on known or perceived cyber threats and the information security team's recent actions taken in response to such incidents and threats. In addition, our Board of Directors and the Audit Committee also receive updates from the CISO and/or our CIO on an ad-hoc or as-requested basis. Any incidents or changes to our process of identifying and responding to potential cybersecurity incidents would be included within these materials. |
| Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] | true |
Summary of Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | |
| Basis of Presentation | We have prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States (GAAP). In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for fair presentation of the results of operations for the periods shown. All intercompany balances and transactions have been eliminated, and we have evaluated subsequent events up to the time of filing. |
| Estimates and Assumptions | The preparation of financial statements in accordance with GAAP requires us to make estimates and judgments 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. These estimates and underlying assumptions can impact all elements of our consolidated financial statements. Our estimates are often based on several factors, including the facts and circumstances available at the time the estimates are made, historical experience, risk of loss, general economic conditions and trends and the assessment of the probable future outcome. Some of our estimates require significant, difficult or complex judgments, probabilities and assumptions that we believe to be reasonable but that can be inherently uncertain and unpredictable. If our estimates and assumptions are not representative of actual outcomes, our results could be materially impacted. We regularly evaluate our estimates and assumptions and adjust them when facts and circumstances indicate the need for change. Such changes generally would be reflected in our consolidated financial statements in the period they are determined. We apply estimation methodologies consistently from year to year.
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| 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 obligation, which is generally once the goods have 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 service. Royalty revenue represents sales-based royalties that are recognized in the period in which the underlying sales occur. Revenue reflects the total consideration to which we expect to be entitled (i.e., the transaction price) after considering various types of variable consideration such as rebates, sales allowances, product returns and discounts. Provisions for returns, rebates and discounts are established in the same period the related sales are recognized. Significant judgments must be made in determining the transaction price for sales of products related to anticipated rebates, discounts and returns. The following describe the most significant of these judgments: Sales Rebates and Discounts •Many of our products are sold and initially invoiced at contractual list prices. Contracts with customers often provide for various rebates and discounts that may differ in each contract. To determine the appropriate transaction price for our product sales, we must estimate any rebates or discounts that will ultimately be due to the customer and/or other customers in the distribution chain under the terms of our contracts. Rebate and discount amounts are recorded as a reduction to revenue and as a liability in the period the underlying revenue is recognized. In determining the appropriate net revenue, we consider our historical experience with similar incentives programs, current sales data and contract information and estimates of inventory levels at our channel distributors, among other factors, to evaluate the impact of such programs on revenue. We continually monitor the impact of this experience and adjust our accrual amounts as needed. Sales Returns •We estimate a reserve for future product returns based on several factors, including local returns policies and practices, historical returns as a percentage of revenue, an understanding of the reasons for past returns, estimated shelf life by product and estimates of the amount of time between shipment and return. Reserves for sales returns are estimated and recorded as a reduction to revenue and as a liability in the period the underlying revenue is recognized. Payment terms differ by jurisdiction and customer but typically range from 30 to 120 days from date of shipment in most of our major jurisdictions. Revenue for our product sales has not been adjusted for the effects of a financing component, as we expect the period between when we transfer control of the product and when we receive payment will be one year or less. Any exceptions are either not material, or we collect interest for payments made after the due date. Shipping and handling activities are considered fulfillment activities and are not considered a separate performance obligation. We exclude from our measurement of the transaction price all taxes assessed by a governmental authority that are imposed on our sales of products and collected from a customer.
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| Allowance for Doubtful Accounts | We provide for an allowance for doubtful accounts, which represents our best estimate of expected lifetime credit losses inherent in our accounts and other receivables portfolios. Our estimates include a continuing credit evaluation of customers' financial condition, trade accounts and other receivables aging and historical loss experience, as well as reasonable and supportable forecasts of future economic conditions. |
| Inventories | We state all inventories at the lower of cost and net realizable value. |
| Property and equipment | Property and equipment assets placed into service are recorded at cost and depreciated using the straight-line method over their estimated useful life (12 to 50 years for buildings and 3 to 25 years for equipment), except for certain leasehold improvements, which are depreciated over the shorter of their economic useful life or remaining lease term. Repair and maintenance costs that do not extend the useful life of the asset are expensed as incurred. Major replacements and significant improvements that either increase asset values or extend useful lives are capitalized. We assess the recoverability of the carrying value of property and equipment whenever events or changes in circumstances indicate the carrying amount may not be fully recoverable. When such indications of a potential impairment exist, we compare the projected undiscounted cash flows to be generated by the asset (or asset group) to its carrying value. If the carrying amount is found to be greater, an impairment charge is recorded equal to the excess of the asset's carrying value over its fair value. In such an event, we also re-evaluate the remaining useful life of the asset (or asset group) and modify it, as appropriate.
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| Goodwill and Indefinite-lived Intangible Assets | Goodwill represents the excess of the consideration transferred in a business combination over the assigned fair value of the net assets of the acquired business. Goodwill is not amortized but is reviewed at least annually for impairment during the fourth quarter, or more frequently if there is a significant change in events or circumstances that indicate the fair value of our single reporting unit is more likely than not less than its carrying amount (a "triggering event"). We begin by assessing qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying value. Based on this qualitative assessment, if we conclude it is more likely than not that the fair value of our single reporting unit is less than its carrying value, we conduct a quantitative goodwill impairment test, which involves a comparison of the estimated fair value of our single reporting unit to its carrying value, including goodwill. When required, we estimate the fair value of our single reporting unit using an 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. If the carrying value of our single reporting unit exceeds its estimated fair value, we will recognize an impairment loss for the difference. The income approach represents a Level 3 fair value measurement in the fair value hierarchy (see Note 9. Fair Value for further information). When a quantitative goodwill impairment test is required, significant management judgment is involved in estimating our single reporting unit’s fair value, including in the creation of forecasts of future operating results to be used in the income approach valuation. These significant judgments include, but are not limited to, estimates and assumptions regarding our future cash flows, revenue growth rates, profitability measures such as gross margin and earnings before interest, taxes, depreciation and amortization (EBITDA) margin and the determination of an appropriate discount rate. Similar to goodwill, indefinite-lived intangible assets, which primarily represent in-process research and development (IPR&D) assets acquired from prior business combinations, are reviewed annually for impairment during the fourth quarter, or more frequently in the event of a triggering event. We utilize an income approach for determining the estimated fair value of indefinite-lived intangible assets upon acquisition and as needed for evaluations of potential impairment. Acquired IPR&D assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are tested for impairment and, if not impaired, are transferred to marketed products and amortized over their estimated economic life.
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| Finite-lived intangible assets | Finite-lived intangible assets primarily relate to marketed products acquired or licensed from third parties and software. Marketed products consist of the amortized cost of the rights to assets acquired in business combinations and approved for marketing in a significant global jurisdiction. The cost basis of marketed products includes both the initial assigned IPR&D value, as well as any associated milestone payments subsequent to the product receiving regulatory approval in a significant global jurisdiction. Software consists of certain costs incurred in connection with obtaining or developing internal-use software, including compensation and benefits for employees directly associated with the internal-use software projects and direct costs of external resources. Other finite-lived intangible assets consist primarily of the amortized cost of licensed platform technologies, manufacturing technologies, customer relationships and finite-lived trade names. Intangible assets with finite lives are capitalized and amortized over their estimated economic lives, typically ranging from 3 to 20 years. We assess the recoverability of the carrying value of finite-lived intangible assets in the same manner as property and equipment, as described above.
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| Research and Development Expenses | Research and development (R&D) costs are expensed as incurred and relate to the effort associated with the discovery of new knowledge that will be useful in developing a new product or in significantly improving an existing product and the implementation of research findings. R&D costs include, but are not limited to, compensation and benefits, facilities and overhead expenses, clinical trial expenses and fees paid to contract research organizations. We may also enter into licensing arrangements with third parties to acquire the rights to IPR&D. These arrangements typically do not meet the definition of a business combination. In such arrangements, prior to regulatory approval of a product, we record upfront and milestone payments to third parties as expense when the event requiring the upfront or milestone payment occurs.
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| Advertising Expenses | Costs associated with advertising, including costs for TV, radio and other electronic media and publications, are generally expensed when the related advertising occurs, and are included in marketing, selling and administrative expenses in the consolidated statements of operations. |
| Financial Instruments | We utilize various financial instruments to help manage our exposures to market risks, such as changes in foreign currency exchange rates and variable interest rates. At inception, 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. We also assess at least quarterly thereafter whether the qualifying derivative instrument continues to be effective at offsetting changes in either the fair values or cash flows of the underlying exposures. Derivative cash flows are principally classified in the operating activities section of the consolidated statements of cash flows, consistent with the underlying hedged item, while cash proceeds from or payments for the settlement of net investment hedges are classified as investing activities. Our financial instruments are recorded at their fair values on our consolidated balance sheets, and we do not offset derivative assets and liabilities. Fair values are estimated based on quoted market values for similar instruments and are classified as Level 2 in the fair value hierarchy. As of December 31, 2025 and 2024, we held the following types of financial instruments: Derivatives Not Designated as Hedges •Foreign currency derivatives used for hedging our exposure to fluctuating currency exchange rates are put in place using the same or like currencies and duration as the underlying exposures and are recorded at fair value, with gains or losses recognized in other expense, net in the consolidated statements of operations. These instruments generally have maturities not exceeding 12 months. Derivatives Designated as Hedges – Net investment hedges •Cross-currency fixed interest rate swaps determined to be effective economic hedges of net investments in foreign denominated net assets are designated as net investment hedges. Gains or losses on our net investment hedges due to spot rate fluctuations are recorded as cumulative translation adjustments, a component of other comprehensive income (loss). Gains and losses will remain in accumulated other comprehensive income (loss) until either the sale or substantial liquidation of the hedged subsidiary. Derivatives Designated as Hedges – Interest rate swaps •Interest rate swap contracts are used to effectively convert a portion of our variable-rate debt into fixed-rate debt. Differences between the variable interest rate payments and the fixed interest rate settlements with the swap counterparties are recorded as an adjustment to interest expense, net of capitalized interest over the life of the swaps. Changes in the fair value of interest rate swaps are recognized in other comprehensive income (loss) and reclassified into earnings through interest expense, net of capitalized interest at the time earnings are affected by the hedged transaction.
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| Foreign Currency Translation | Operations in our subsidiaries outside the U.S. are recorded in the functional currency of each subsidiary, which is determined by a review of the environment where each subsidiary primarily generates and expends cash. The results of operations for our subsidiaries outside the U.S. where the U.S. dollar is not the functional currency, are translated from the functional currency into U.S. dollars using the exchange rates in effect as of the date of the transactions, or a reasonable approximation thereof, such as the weighted-average currency rate for the period. Assets and liabilities are translated using the period-end exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries are recorded in other comprehensive income (loss). Foreign currency transaction gains and losses are due to the effect of exchange rate changes on transactions denominated in currencies other than a subsidiary's functional currency and are recognized in other expense, net, in the consolidated statements of operations in the period incurred. Transaction losses of $14 million, $12 million and $40 million were recorded during the years ended December 31, 2025, 2024 and 2023, respectively. We generally identify hyperinflationary markets as those markets whose cumulative inflation rate over a three-year period exceeds 100%. Translation adjustments resulting from the application of hyperinflationary accounting are also recognized in other expense, net, in the consolidated statements of operations in the period incurred.
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| Recently Adopted and Issued Accounting Pronouncements and Other Significant Accounting Policies | Recently Adopted Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which was intended to enhance the transparency and usefulness of income tax disclosures by providing incremental and disaggregated income tax disclosures pertaining to the effective tax rate reconciliation and income taxes paid by jurisdiction. We adopted this standard on a prospective basis for the year ended December 31, 2025. See Note 15. Income Taxes for further details. Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed and disaggregated information about significant expense categories, such as purchases of inventory, employee compensation, depreciation and amortization and selling expenses. This new standard, including related updates, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively. We are currently assessing the impact ASU 2024-03 will have on our consolidated financial statements, including our footnote disclosures. Other Significant Accounting Policies Our other significant accounting policies are described in the remaining appropriate notes to the consolidated financial statements.
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Revenue (Tables) |
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| Schedule of Activity in Sales Rebates and Discounts Liability | The following table summarizes the activity in our global sales rebates and discounts liability for the years ended December 31:
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| Schedule of Revenue Disaggregated by Product Category | The following table summarizes our revenue disaggregated by product category for the years ended December 31:
(1)On July 9, 2024, we sold our aqua business to a subsidiary of Merck Animal Health (see Note 4. Acquisitions and Divestitures for further details). (2)Represents revenue from arrangements in which we manufacture products on behalf of a third party and royalty revenue. In May 2025, we entered into an agreement to sell certain qualifying royalties, among other potential future cash flows, to a third party for proceeds of $295 million in cash. While we are no longer entitled to these qualifying royalties, we are required under GAAP to continue recognizing them as revenue. For the year ended December 31, 2025, royalty revenue associated with this arrangement, which is reflected within Contract Manufacturing and Other in the table above, totaled $19 million. See Note 10. Liability for Sale of Future Revenue for additional information.
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| Schedule of Revenue Disaggregated by Geographic Area | The following table summarizes our revenue disaggregated by geographic area for the years ended December 31:
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Acquisitions and Divestitures (Tables) |
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| Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:
The following table summarizes the fair value of assets acquired as of the acquisition date:
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| Schedule of Purchase Consideration | The composition of the purchase price was as follows:
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| Schedule of Divestitures Activities | As of the disposal date, the carrying amounts of the following major assets were derecognized from our consolidated balance sheet:
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Asset Impairment, Restructuring and Other Special Charges (Tables) |
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| Schedule of Asset Impairment, Restructuring and Other Special Charges | Components of asset impairment, restructuring and other special charges for the years ended December 31 were as follows:
(1)Restructuring charges in 2025 primarily related to $116 million of expected cash-based severance costs associated with the 2025 Restructuring Plan, as well as $39 million primarily consisting of non-cash asset impairment charges associated with our animal studies research facilities in Monheim, Germany, and our manufacturing facility in Kansas City, Kansas. Restructuring charges in 2024 primarily related to cash-based severance charges associated with the 2024 Restructuring Plan. (2)Acquisition and divestiture-related charges in 2024 primarily consisted of transaction costs related to the divestiture of our aqua business (see Note 4. Acquisitions and Divestitures for further information). Acquisition and divestiture-related charges in 2023 primarily represented costs associated with the implementation of new systems, programs and processes due to the integration of Bayer Animal Health. (3)Asset impairments in 2025 primarily included a $47 million impairment of a marketed product intangible asset due to a decline in projected sales of a product group acquired in a past acquisition and $16 million in impairments related to two early-stage capital projects that were indefinitely suspended. Asset impairments in 2024 principally included a $53 million write-off of an IPR&D asset and $15 million of asset impairments tied to the financial difficulties of TriRx Speke (see Note 4. Acquisitions and Divestitures for further information). Asset impairments in 2023 primarily included a $26 million partial write-down of a contract asset with TriRx Speke.
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| Schedule of Activity in Reserves | The following table summarizes the activity in our reserves established in connection with restructuring activities:
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Inventories (Tables) |
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Inventories | Inventories at December 31 consisted of the following:
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Debt and Finance Lease Liability (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-term Debt and Finance Lease Liability | Our long-term debt and finance lease liability as of December 31, consisted of the following:
(1)On October 31, 2025, we repaid our Term Loan B due 2027 in full, primarily with the proceeds from three new debt facilities, our Term Loan B due 2032, Euro Term Loan due 2029 and Incremental Term Facility due 2032 (see below for further details). (2)In June 2025, we entered into a finance lease arrangement for our new corporate headquarters. See Note 13. Leases for further information.
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| Schedule of Maturities of Long-term Debt | As of December 31, 2025, future required principal payments on our outstanding indebtedness, excluding our finance lease payments which are included in the future minimum lease payment schedule within Note 13. Leases, for each of the next five years and thereafter, were as follows:
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| Cash Payments of Interest Expense and Income Taxes | Cash payments for interest, excluding the interest component of our finance lease payments, during the years ended December 31, were as follows:
(1)Reflected within the above totals are $43 million, $31 million and $4 million of cash interest received from our net investment hedges during the years ended December 31, 2025, 2024 and 2023, respectively. See Note 8. Financial Instruments for further information on our net investment hedges. Net cash payments (refunds) of income taxes by jurisdiction for the year ended December 31, 2025, were as follows:
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Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Gain (loss), Net of Tax | The amounts of net gains (losses) on our derivative instruments not designated as hedging instruments, recorded in other expense, net for the years ended December 31, were as follows:
(1)These amounts were substantially offset in other expense, net by the effect of changing exchange rates on the underlying foreign currency exposures. The amounts of (losses) gains on net investment hedges, net of tax, recorded in accumulated other comprehensive loss for the years ended December 31, were as follows:
The amounts of (losses) gains on interest rate swap contracts, net of tax, recorded in accumulated other comprehensive loss for the years ended December 31, were as follows:
The amounts of gains reclassified out of accumulated other comprehensive loss and recognized into earnings through interest expense, net of capitalized interest for the years ended December 31, were as follows:
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Fair Value (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value Information | The following table summarizes the fair value information at December 31, 2025 and 2024, 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 excluding our finance lease liability, for which fair value is disclosed on a recurring basis:
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Liability for Sale of Future Revenue (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Liability For Sale Of Future Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Sale of Future Revenue Activity | The following table shows the activity during the year ended December 31, 2025, related to our liability for sale of future revenue:
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Goodwill and Intangibles (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill:
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| Schedule of Components of Finite-Lived Intangible Assets | The gross amount of intangible assets and related accumulated amortization, as of December 31, were as follows:
(1)The reduction in acquired IPR&D in 2025 is attributable to the U.S. Department of Agriculture (USDA) approval for Befrena, an anti-IL31 monoclonal antibody injection targeting canine allergic and atopic dermatitis. This asset had been included in acquired IPR&D since its acquisition from Kindred Biosciences, Inc. in 2021. Upon receiving USDA approval, we reclassified this asset to marketed products and will amortize it over its estimated economic life. As of December 31, 2025, the remaining weighted-average amortization periods for finite-lived intangible assets were as follows:
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| Schedule of Components of Indefinite-Lived Intangible Assets | The gross amount of intangible assets and related accumulated amortization, as of December 31, were as follows:
(1)The reduction in acquired IPR&D in 2025 is attributable to the U.S. Department of Agriculture (USDA) approval for Befrena, an anti-IL31 monoclonal antibody injection targeting canine allergic and atopic dermatitis. This asset had been included in acquired IPR&D since its acquisition from Kindred Biosciences, Inc. in 2021. Upon receiving USDA approval, we reclassified this asset to marketed products and will amortize it over its estimated economic life.
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| Schedule of Estimated Amortization Expense | The estimated amortization expense for each of the next five years associated with our finite-lived intangible assets, as of December 31, 2025, is as follows:
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Property and Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Property and Equipment and Depreciation Expense | At December 31, property and equipment consisted of the following:
Property and equipment, net by geographic area as of December 31, was as follows:
Depreciation and amortization expense related to property and equipment, including our finance lease ROU asset, for the years ended December 31, was as follows:
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Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Operating Leases to Condensed Consolidated Financial Statements | The impact of operating and financing leases on the consolidated statements of operations and cash flows for the years ended December 31, was as follows:
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| Schedule of Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet and other information related to our operating and finance leases is as follows:
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| Schedule of Minimum Lease Payments for Operating Lease Liabilities | As of December 31, 2025, the minimum lease payments for our operating and finance lease liabilities for each of the next five years and thereafter, were as follows:
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| Schedule of Minimum Lease Payments for Financing Lease Liabilities | As of December 31, 2025, the minimum lease payments for our operating and finance lease liabilities for each of the next five years and thereafter, were as follows:
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Restricted Stock Unit Activity | RSUs granted to employees for the years ended December 31, were as follows:
Changes in the nonvested portion of RSUs for 2025 are summarized below:
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| Schedule of Performance Awards Activity | PA activity during the year ended December 31, 2025, is summarized below:
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| Schedule of Assumptions Used | The Black-Scholes-Merton model incorporates a number of valuation assumptions, which are noted in the following table, shown at their weighted-average values for the years ended December 31:
(1)Determined based on the zero-coupon risk-free rate for a U.S. Treasury Constant Maturity yield curve, with a term equal to our expected term assumption. (2)Determined based on our historical stock price volatility over the past six years (commensurate with our expected term assumption). (3)Determined using SEC safe harbor approach, based on a 3-year cliff vesting schedule and 10-year contractual term.
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| Schedule of Stock Option Activity | Stock option activity during the year ended December 31, 2025, is summarized below:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Composition of (Loss) Income Before Income Tax Expense (Benefit) | The composition of (loss) income before income tax expense for the years ended December 31, was as follows:
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| Composition of Income Tax Expense (Benefit) | The composition of income tax expense for the years ended December 31, was as follows:
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| Schedule of Significant Components of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities as of December 31, were as follows:
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| Schedule of Movements in the Valuation Allowance | Movements in the valuation allowance for the years ended December 31, were as follows:
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| Schedule of Reconciliation of Income Tax Expense (Benefit) | A reconciliation of the U.S. federal statutory tax rate to our effective tax rate for the year ended December 31, 2025, is as follows:
(1)State taxes in California made up greater than 50% of the tax effect in this category. The following is a reconciliation of the income tax expense applying the U.S. federal statutory tax rate to income (loss) before income taxes to reported income tax expense for the years ended December 31, 2024 and 2023:
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| Schedule of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the years ended December 31, was as follows:
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| Schedule of Net Cash Payments (Refunds) of Income Taxes | Cash payments for interest, excluding the interest component of our finance lease payments, during the years ended December 31, were as follows:
(1)Reflected within the above totals are $43 million, $31 million and $4 million of cash interest received from our net investment hedges during the years ended December 31, 2025, 2024 and 2023, respectively. See Note 8. Financial Instruments for further information on our net investment hedges. Net cash payments (refunds) of income taxes by jurisdiction for the year ended December 31, 2025, were as follows:
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Retirement Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Change in Benefit Obligation, Change in Plan Assets, and Funded Status | We use a measurement date of December 31 to develop the change in benefit obligation, change in plan assets, funded status and amounts recorded on the consolidated balance sheets at December 31 for our defined benefit pension plans, which were as follows:
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| Schedule of Amounts Recognized in Combined Balance Sheet |
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| Schedule of Weighted-Average Assumptions Related to Pension Plans | The following represents our weighted-average assumptions related to these pension plans as of and for the years ended December 31:
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| Schedule of Expected Benefit Payments | Future benefit payments as of December 31, 2025, which reflect expected future service, as appropriate, are expected to be as follows:
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| Schedule of Projected Benefit Obligations in Excess of Plan Assets | Amounts relating to pension plans with projected benefit obligations in excess of plan assets at December 31, were as follows:
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| Schedule of Accumulated Benefit Obligations in Excess of Plan Assets | Amounts relating to pension plans with accumulated benefit obligations in excess of plan assets at December 31, were as follows:
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| Schedule of Net Pension Expense (Benefit) | Net pension benefit expense for the years ended December 31, included the following components:
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| Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The following represents the pre-tax amounts recognized for defined benefit plans in other comprehensive income (loss) for the years ended December 31:
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| Schedule of Fair Value of Pension Plan Assets | The fair values of pension plan assets as of December 31, 2025, by asset category were as follows:
The fair values of pension plan assets as of December 31, 2024, by asset category were as follows:
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Earnings Per Share (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Basic And Diluted Weighted-average Shares Outstanding | Basic and diluted weighted-average shares outstanding for the years ended December 31, were as follows:
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Business Segment Information (Tables) |
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Segment Reporting Information, by Segment | A summary of our consolidated net (loss) income for the years ended December 31, is as follows, including the significant segment expenses provided to and regularly reviewed by our CEO, as well as other expenses, which are included in consolidated net (loss) income, but are not regularly provided to and/or reviewed by our CEO:
(1)Other expenses include amortization of intangible assets; asset impairment, restructuring and other special charges; goodwill impairment; and gain on divestiture.
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Background and Basis of Presentation (Details) |
Dec. 31, 2025
country
|
|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Number of brands in diverse portfolio (approximately) | 200 |
| Number of countries in which entity operates (more than) | 90 |
Revenue - Schedule of Activity in Sales Rebates and Discounts Liability (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
|
| Change In Contract With Customer, Liability [Roll Forward] | ||
| Beginning balance | $ 332 | $ 367 |
| Reduction of revenue | 969 | 799 |
| Payments | (901) | (824) |
| Foreign currency translation adjustments | 16 | (10) |
| Ending balance | $ 416 | $ 332 |
Revenue - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Concentration Risk [Line Items] | |||
| Accounts receivable | $ 873 | $ 805 | |
| Product Sales | |||
| Concentration Risk [Line Items] | |||
| Accounts receivable | $ 107 | $ 90 | |
| Product Return Concentration Risk | Net revenue | Global Customers | |||
| Concentration Risk [Line Items] | |||
| Concentration risk | 1.00% | 1.00% | 1.00% |
| Customer Concentration Risk | Revenue | Single Customer | |||
| Concentration Risk [Line Items] | |||
| Concentration risk | 12.00% | 11.00% | 10.00% |
Acquisitions and Divestitures - Schedule of The Composition of The Purchase Consideration (Details) - NutriQuest, LLC $ in Millions |
Jan. 03, 2023
USD ($)
|
|---|---|
| Business Combination [Line Items] | |
| Up-front cash consideration | $ 16 |
| Deferred cash consideration paid January 4, 2024 | 5 |
| Initial fair value of contingent consideration | 38 |
| Total purchase consideration | $ 59 |
Acquisitions and Divestitures - Schedule of Assets Derecognized (Details) - Aqua Business - Disposal Group, Disposed of by Sale, Not Discontinued Operations $ in Millions |
Jul. 09, 2024
USD ($)
|
|---|---|
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
| Inventories | $ 43 |
| Property and equipment, net | 68 |
| Goodwill | 458 |
| Other intangibles, net | 51 |
| Other assets | 14 |
| Total assets | $ 634 |
Asset Impairment, Restructuring and Other Special Charges - Schedule of Activity in Reserves (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Restructuring Reserve [Roll Forward] | |||
| Balance at beginning of period | $ 16 | $ 7 | |
| Charges | 156 | 44 | $ 0 |
| Cash paid | (10) | (32) | |
| Non-cash items and other | (38) | (3) | |
| Balance at end of period | $ 124 | $ 16 | $ 7 |
| Restructuring Charges, Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset impairment, restructuring and other special charges | Asset impairment, restructuring and other special charges | |
| Severance | |||
| Restructuring Reserve [Roll Forward] | |||
| Charges | $ 116 | ||
Asset Impairment, Restructuring and Other Special Charges - Additional Information (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|---|
| Restructuring Cost and Reserve [Line Items] | |||
| Restructuring reserve | $ 124 | $ 16 | $ 7 |
| Other current liabilities | Severance | |||
| Restructuring Cost and Reserve [Line Items] | |||
| Restructuring reserve | $ 80 |
Inventories (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Finished products | $ 871 | $ 754 |
| Work in process | 837 | 783 |
| Raw materials and supplies | 104 | 98 |
| Total | 1,812 | 1,635 |
| Decrease to LIFO cost | (75) | (61) |
| Inventories | $ 1,737 | $ 1,574 |
Debt and Finance Lease Liability - Schedule of Maturity of Long-Term Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Debt Disclosure [Abstract] | ||
| 2026 | $ 63 | |
| 2027 | 63 | |
| 2028 | 1,236 | |
| 2029 | 548 | |
| 2030 | 20 | |
| 2031 and thereafter | 1,860 | |
| Total obligations and commitments | 3,790 | |
| Unamortized debt issuance costs | (28) | |
| Total debt | $ 3,762 | $ 4,321 |
Debt and Finance Lease Liability - Schedule of Cash Payments of Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Debt Disclosure [Abstract] | |||
| Interest paid | $ 206 | $ 296 | $ 379 |
| Investment income interest | $ 43 | $ 31 | $ 4 |
Financial Instruments - Schedule of Net Losses/Gains on Derivative Instruments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Cross-currency fixed interest rate swap | Not Designated as Hedging Instrument | |||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
| Net gain (loss) on derivative instruments | $ 34 | $ (22) | $ 7 |
| Cross-currency fixed interest rate swap | Designated as Hedging Instrument | Net Investment Hedging | |||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
| Gain, net of tax | (155) | 59 | (72) |
| Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging | |||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
| Gain, net of tax | (14) | 84 | 0 |
| Reclassification from accumulated other comprehensive income, current period, net of tax | $ 35 | $ 104 | $ 125 |
Fair Value - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Fair Value Disclosures [Abstract] | ||
| Equity method investments | $ 15 | $ 17 |
| Contingent consideration liability | $ 31 | $ 32 |
Liability for Sale of Future Revenue - Narrative (Details) - Blackstone Life Sciences And Blackstone Credit & Insurance $ in Millions |
1 Months Ended | 12 Months Ended |
|---|---|---|
|
May 31, 2025
USD ($)
|
Dec. 31, 2025
USD ($)
|
|
| Revenue Recognition, Milestone Method [Line Items] | ||
| Proceeds from sale of future revenue | $ 295 | $ 295 |
| Royalties from net sales (as a percent) | 0.0025 | |
| Transaction costs | $ 5 | $ 5 |
Liability for Sale of Future Revenue - Schedule of Sale of Future Revenue Activity (Details) - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
May 31, 2025 |
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Deferred Revenue Arrangement [Line Items] | ||||
| Royalty revenue | $ (19) | $ 0 | $ 0 | |
| Imputed interest expense | 33 | $ 0 | $ 0 | |
| Blackstone Life Sciences And Blackstone Credit & Insurance | ||||
| Deferred Revenue Arrangement [Line Items] | ||||
| Proceeds from sale of future revenue | $ 295 | 295 | ||
| Deferred transaction costs | $ (5) | (5) | ||
| Royalty revenue | (19) | |||
| Imputed interest expense | 33 | |||
| Balance at December 31, 2025 | $ 304 | |||
| Effective interest rate | 16.70% | |||
Goodwill and Intangibles - Schedule of Goodwill Activity (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
|
| Goodwill [Roll Forward] | ||
| Beginning balance | $ 4,414 | $ 5,094 |
| Divestiture of our aqua business | (458) | |
| Foreign currency translation and other adjustments | 365 | (222) |
| Ending balance | $ 4,779 | $ 4,414 |
Goodwill and Intangibles - Narrative (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Finite-Lived Intangible Assets [Line Items] | ||||
| Impairment charge | $ 0 | $ 0 | $ 1,042,000,000 | |
| Asset impairment | 71,000,000 | 81,000,000 | 32,000,000 | |
| Marketed products | ||||
| Finite-Lived Intangible Assets [Line Items] | ||||
| Asset impairment | $ 47,000,000 | 47,000,000 | ||
| Software | ||||
| Finite-Lived Intangible Assets [Line Items] | ||||
| Amortization | $ 31,000,000 | $ 40,000,000 | $ 54,000,000 | |
Goodwill and Intangibles - Schedule of Remaining Weighted Average Amortization Periods (Details) |
Dec. 31, 2025 |
|---|---|
| Marketed products | |
| Finite-Lived Intangible Assets [Line Items] | |
| Remaining amortization period | 7 years |
| Software | |
| Finite-Lived Intangible Assets [Line Items] | |
| Remaining amortization period | 5 years |
| Other | |
| Finite-Lived Intangible Assets [Line Items] | |
| Remaining amortization period | 5 years |
Goodwill and Intangibles - Schedule of Estimated Amortization Expense (Details) $ in Millions |
Dec. 31, 2025
USD ($)
|
|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| 2026 | $ 560 |
| 2027 | 534 |
| 2028 | 532 |
| 2029 | 509 |
| 2030 | $ 372 |
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Finance lease ROU asset | $ 226 | $ 0 |
| Property and equipment gross, total | 2,361 | 1,851 |
| Less accumulated depreciation and amortization | (952) | (858) |
| Property and equipment, net | 1,409 | 993 |
| Land | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | 66 | 40 |
| Buildings | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | 698 | 600 |
| Equipment | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | 1,103 | 990 |
| Construction in progress | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | $ 268 | $ 221 |
Property and Equipment- Schedule of Property and Equipment Geographic Area (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, net | $ 1,409 | $ 993 |
| United States | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, net | 972 | 610 |
| Germany | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, net | 250 | 230 |
| Other foreign countries | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, net | $ 187 | $ 153 |
Property and Equipment - Schedule of Depreciation Expense and Rental Expense for All Leases (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Property, Plant and Equipment [Abstract] | |||
| Depreciation and amortization expense | $ 106 | $ 95 | $ 92 |
Leases - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Jun. 30, 2025 |
|---|---|---|
| New Corporate Headquarters | ||
| Lessee, Lease, Description [Line Items] | ||
| Finance lease term | 5 years | |
| Lessee option to purchase | $ 250 | |
| New corporate headquarters, estimated total incentive to be funded by TIF | $ 64 | |
| Minimum | ||
| Lessee, Lease, Description [Line Items] | ||
| Remaining lease term | 1 year | |
| Maximum | ||
| Lessee, Lease, Description [Line Items] | ||
| Remaining lease term | 15 years |
Leases - Schedule of Impact of Operating Leases to Condensed Consolidated Financial Statements (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Leases [Abstract] | |||
| Operating lease cost | $ 58 | $ 49 | $ 42 |
| Finance lease cost: | |||
| Finance lease cost: | 2 | 0 | 0 |
| Interest expense, net of capitalized interest | 8 | 0 | 0 |
| Short-term and variable lease cost | 5 | 6 | 5 |
| Total lease cost | 73 | 55 | 47 |
| Supplemental cash flow information | |||
| Operating cash outflows from operating leases | 40 | 35 | 35 |
| Operating cash outflows from finance lease | 8 | 0 | 0 |
| Financing cash outflows from finance lease | 2 | 0 | 0 |
| ROU assets obtained in exchange for new operating lease liabilities | 43 | 33 | 28 |
| ROU asset obtained in exchange for new finance lease liability | $ 226 | $ 0 | $ 0 |
Leases - Schedule of Minimum Lease Payments of Operating and Financing Lease Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Operating Leases | ||
| 2026 | $ 44 | |
| 2027 | 33 | |
| 2028 | 22 | |
| 2029 | 17 | |
| 2030 | 7 | |
| 2031 and thereafter | 20 | |
| Total lease payments | 143 | |
| Less imputed interest | (19) | |
| Total operating lease liabilities | 124 | |
| Finance Lease | ||
| 2026 | 17 | |
| 2027 | 17 | |
| 2028 | 17 | |
| 2029 | 17 | |
| 2030 | 259 | |
| 2031 and thereafter | 0 | |
| Total lease payments | 327 | |
| Less imputed interest | (72) | |
| Total financing lease liabilities | $ 255 | $ 0 |
Stock-Based Compensation - Schedule of Assumptions Used (Details) - Stock options |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Expected dividend yield | 0.00% | 0.00% | 0.00% |
| Risk-free interest rate | 4.01% | 4.19% | 4.08% |
| Expected stock price volatility | 43.60% | 40.70% | 38.20% |
| Expected term (years) | 6 years | 6 years | 6 years |
| Period used for expected volatility calculation | 6 years | ||
| Vesting period | 3 years | ||
| Expiration period | 10 years | ||
Income Taxes - Schedule of Composition of (Loss) Income Before Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income Tax Disclosure [Abstract] | |||
| Federal | $ 116 | $ (376) | $ (669) |
| Foreign | (340) | 864 | (526) |
| (Loss) income before income taxes | $ (224) | $ 488 | $ (1,195) |
Income Taxes - Schedule of Composition of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Current: | |||
| Federal | $ 6 | $ 5 | $ (8) |
| Foreign | 132 | 274 | 122 |
| State | 4 | (17) | 2 |
| Total current tax expense | 142 | 262 | 116 |
| Deferred: | |||
| Federal | (4) | 1 | (3) |
| Foreign | (129) | (114) | (66) |
| State | (1) | 1 | (11) |
| Total deferred tax benefit | (134) | (112) | (80) |
| Income tax expense | $ 8 | $ 150 | $ 36 |
Income Taxes - Schedule of Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Deferred tax assets: | ||
| Compensation and benefits | $ 51 | $ 42 |
| Accruals and reserves | 38 | 48 |
| Tax credit carryovers | 45 | 43 |
| Tax loss carryovers | 153 | 180 |
| Business interest deduction limitation | 187 | 198 |
| Inventories | 28 | 40 |
| R&D capitalized assets | 74 | 78 |
| Lease liabilities | 50 | 47 |
| Other assets | 76 | 13 |
| Total gross deferred tax assets | 702 | 689 |
| Valuation allowances | (246) | (269) |
| Total deferred tax assets | 456 | 420 |
| Deferred tax liabilities: | ||
| Right-of-use assets | (38) | (45) |
| Intangibles | (664) | (700) |
| Property and equipment | (62) | (62) |
| Other liabilities | 0 | (6) |
| Total deferred tax liabilities | (764) | (813) |
| Deferred tax liabilities, net | $ (308) | $ (393) |
Income Taxes - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Operating Loss Carryforwards [Line Items] | |||
| Net operating losses and other carryovers | $ 153 | $ 180 | |
| Net increase (decrease) in the valuation allowance | (17) | (77) | $ 93 |
| Income taxes paid | 225 | 140 | $ 95 |
| Income taxes receivable | 113 | 121 | |
| Income taxes payable | 14 | $ 127 | |
| Foreign | |||
| Operating Loss Carryforwards [Line Items] | |||
| Tax credit carryovers | 6 | ||
| Domestic | |||
| Operating Loss Carryforwards [Line Items] | |||
| Tax credit carryovers | 23 | ||
| State | |||
| Operating Loss Carryforwards [Line Items] | |||
| Tax credit carryovers | 16 | ||
| International, State and Federal | |||
| Operating Loss Carryforwards [Line Items] | |||
| Net operating loss carryforwards with indefinite carryforward period | 54 | ||
| International, State and Federal | 2026 to 2036 | |||
| Operating Loss Carryforwards [Line Items] | |||
| Net operating loss carryforwards that expire | $ 99 | ||
Income Taxes - Schedule of Movements in the Valuation Allowance (Details) - Valuation Allowance, Deferred Tax Asset - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
| Beginning balance | $ (269) | $ (363) | $ (228) |
| Increase | (2) | (2) | (141) |
| Release | 25 | 96 | 6 |
| Ending balance | $ (246) | $ (269) | $ (363) |
Income Taxes - Schedule of Reconciliation of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income Tax Disclosure [Abstract] | |||
| Income tax expense (benefit) at the U.S. federal statutory tax rate | $ (47) | $ 102 | $ (251) |
| Add (deduct): | |||
| Taxation of international operations | 98 | 3 | |
| State taxes | 2 | (21) | (12) |
| Income tax credits | (11) | (10) | |
| Non-deductible employee compensation | 8 | 5 | 15 |
| Divestitures and impairments of goodwill and other intangible assets | 38 | 164 | |
| Other permanent adjustments | 1 | 7 | 19 |
| Change in uncertain tax positions | 27 | 9 | 15 |
| Change in valuation allowance | (77) | 93 | |
| Income tax expense | $ 8 | $ 150 | $ 36 |
Income Taxes - Schedule of Reconciliation of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Unrecognized Tax Benefits [Roll Forward] | |||
| Beginning balance | $ 40 | $ 31 | $ 16 |
| Additions based on tax positions related to the current year | 37 | 7 | 2 |
| Changes for tax positions of prior years | (10) | ||
| Changes for tax positions of prior years | 2 | 13 | |
| Ending balance | $ 67 | $ 40 | $ 31 |
Income Taxes - Schedule of Net Cash Payments (Refunds) of Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income Tax Paid, by Individual Jurisdiction [Line Items] | |||
| Federal | $ 0 | ||
| State | (5) | ||
| Total | 225 | $ 140 | $ 95 |
| China | |||
| Income Tax Paid, by Individual Jurisdiction [Line Items] | |||
| Foreign: | 12 | ||
| Germany | |||
| Income Tax Paid, by Individual Jurisdiction [Line Items] | |||
| Foreign: | 75 | ||
| Netherlands | |||
| Income Tax Paid, by Individual Jurisdiction [Line Items] | |||
| Foreign: | 14 | ||
| Switzerland | |||
| Income Tax Paid, by Individual Jurisdiction [Line Items] | |||
| Foreign: | 90 | ||
| Other | |||
| Income Tax Paid, by Individual Jurisdiction [Line Items] | |||
| Foreign: | $ 39 | ||
Commitments and Contingencies (Details) |
Apr. 28, 2025
board_member
|
Oct. 07, 2024
executive
|
Feb. 18, 2026
claim
|
Dec. 31, 2025
USD ($)
|
Jan. 31, 2025
claim
|
Dec. 31, 2024
USD ($)
|
|---|---|---|---|---|---|---|
| Loss Contingencies [Line Items] | ||||||
| Liabilities related to litigation | $ | $ 0 | $ 0 | ||||
| Joseph Barpar v. Elanco Animal Health Inc. | ||||||
| Loss Contingencies [Line Items] | ||||||
| Number of executives named in lawsuit | executive | 2 | |||||
| Christopher Dougherty v. Elanco Animal Health, Inc. | ||||||
| Loss Contingencies [Line Items] | ||||||
| Number of board members named in lawsuit | board_member | 13 | |||||
| Tracy Spradlin, Tevra Brands, LLC, And Susan Kraus-Silfen v Elanco Animal Health, Inc | ||||||
| Loss Contingencies [Line Items] | ||||||
| Number of pending claims | 3 | |||||
| Tracy Spradlin, Tevra Brands, LLC, And Susan Kraus-Silfen v Elanco Animal Health, Inc | Subsequent Event | ||||||
| Loss Contingencies [Line Items] | ||||||
| Number of pending claims | 2 |
Retirement Benefits - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Defined Benefit Plan Disclosure [Line Items] | |||
| Expected contributions in fiscal year | $ 14 | ||
| Expenses related to employees under defined contribution plans | 42 | $ 36 | $ 40 |
| Pension Plans | |||
| Defined Benefit Plan Disclosure [Line Items] | |||
| Total accumulated benefit obligation | $ 360 | $ 340 | |
| Pension Plans | Switzerland | |||
| Defined Benefit Plan Disclosure [Line Items] | |||
| Percentage of benefit obligation in Switzerland pension plans | 92.00% | ||
| Percentage of plan assets in Switzerland pension plans | 91.00% | ||
Retirement Benefits - Schedule of Change in Benefit Obligation, Change in Plan Assets, and Funded Status (Details) - Pension Plans - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Change in benefit obligation: | |||
| Benefit obligation at beginning of year | $ 352 | $ 366 | |
| Service cost | 10 | 9 | $ 9 |
| Interest cost | 9 | 9 | 11 |
| Actuarial (gain) loss | (32) | 6 | |
| Benefits paid | (12) | (12) | |
| Foreign currency exchange rate changes and other adjustments | 44 | (26) | |
| Benefit obligation at end of year | 371 | 352 | 366 |
| Change in plan assets: | |||
| Fair value of plan assets at beginning of year | 184 | 192 | |
| Actual return on plan assets | 11 | 11 | |
| Employer contribution | 14 | 10 | |
| Benefits paid | (12) | (12) | |
| Foreign currency exchange rate changes and other adjustments | 24 | (17) | |
| Fair value of plan assets at end of year | 221 | 184 | $ 192 |
| Funded status | (150) | (168) | |
| Unrecognized net actuarial gain | (96) | (56) | |
| Unrecognized prior service cost | (19) | (21) | |
| Net amount recognized | $ (265) | $ (245) | |
Retirement Benefits - Schedule of Amounts Recognized in Combined Balance Sheet (Details) - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Amounts recognized in the consolidated balance sheets as of December 31, consisted of: | ||
| Accrued retirement benefits | $ (158) | $ (175) |
| Pension Plans | ||
| Amounts recognized in the consolidated balance sheets as of December 31, consisted of: | ||
| Other noncurrent assets | 4 | 1 |
| Other current liabilities | (2) | (2) |
| Accrued retirement benefits | (152) | (167) |
| Accumulated other comprehensive loss before income taxes | (115) | (77) |
| Net amount recognized | $ (265) | $ (245) |
Retirement Benefits - Schedule of Weighted-Average Assumptions Related to Pension Plans (Details) - Pension Plans |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Defined Benefit Plan Disclosure [Line Items] | |||
| Discount rate for benefit obligation | 3.20% | 2.60% | 2.80% |
| Discount rate for net benefit costs | 2.60% | 2.80% | 3.40% |
| Rate of compensation increase for benefit obligation | 2.70% | 2.80% | 2.90% |
| Rate of compensation increase for net benefit costs | 2.80% | 2.90% | 3.00% |
| Expected return on plan assets for net benefit costs | 4.10% | 4.20% | 4.40% |
Retirement Benefits - Schedule of Expected Benefit Payments (Details) - Pension Plans $ in Millions |
Dec. 31, 2025
USD ($)
|
|---|---|
| Benefit payments | |
| 2026 | $ 17 |
| 2027 | 18 |
| 2028 | 18 |
| 2029 | 18 |
| 2030 | 20 |
| 2031-2035 | $ 105 |
Retirement Benefits - Schedule of Projected Benefit Obligations in Excess of Plan Assets (Details) - Pension Plans - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Defined Benefit Plan Disclosure [Line Items] | ||
| Projected benefit obligation | $ 353 | $ 334 |
| Fair value of plan assets | $ 199 | $ 165 |
Retirement Benefits - Schedule of Accumulated Benefit Obligations in Excess of Plan Assets (Details) - Pension Plans - USD ($) $ in Millions |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Defined Benefit Plan Disclosure [Line Items] | ||
| Accumulated benefit obligation | $ 336 | $ 323 |
| Fair value of plan assets | $ 192 | $ 165 |
Retirement Benefits - Schedule of Net Pension Expense (Details) - Pension Plans - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Defined Benefit Plan Disclosure [Line Items] | |||
| Service cost | $ 10 | $ 9 | $ 9 |
| Interest cost | 9 | 9 | 11 |
| Expected return on plan assets | (8) | (7) | (8) |
| Amortization of prior service cost | (5) | (5) | (5) |
| Amortization of net actuarial gain | (3) | (3) | (3) |
| Net pension benefit expense | $ 3 | $ 3 | $ 4 |
Retirement Benefits - Schedule of Amounts Recognized in Other Comprehensive Income (Loss) (Details) - Pension Plans - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Defined Benefit Plan Disclosure [Line Items] | |||
| Actuarial gain (loss) arising during period | $ 35 | $ (1) | $ (17) |
| Amortization of prior service cost | (5) | (5) | (5) |
| Amortization of net actuarial gain | (3) | (3) | (3) |
| Foreign currency exchange rate changes and other | 11 | (5) | 5 |
| Total other comprehensive income (loss) during period | $ 38 | $ (14) | $ (20) |
Earnings Per Share (Details) - shares shares in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Earnings Per Share [Abstract] | |||
| Basic weighted average common shares outstanding (in shares) | 496.4 | 494.0 | 492.3 |
| Assumed conversion of dilutive common stock equivalents (in shares) | 0.0 | 3.3 | 0.0 |
| Diluted weighted average shares outstanding (in shares) | 496.4 | 497.3 | 492.3 |
| Potential common shares excluded from calculation (in shares) | 7.5 | 1.4 | 2.9 |
Business Segment Information - Narrative (Details) |
12 Months Ended |
|---|---|
|
Dec. 31, 2025
segment
| |
| Segment Reporting [Abstract] | |
| Number of operating segments | 1 |
| Number of reportable segments | 1 |
Subsequent Event (Details) - AHV International B.V - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Feb. 19, 2026 |
Jun. 30, 2026 |
|
| Forecast | ||
| Subsequent Event [Line Items] | ||
| Cash consideration | $ 70 | |
| Subsequent Event | ||
| Subsequent Event [Line Items] | ||
| Purchase agreement to acquire percentage | 100.00% | |
| Guaranteed consideration | $ 170 | |
| Contingent payments | $ 140 |